{"id": "0000021652", "text": ["PETITIONER: Vs. RESPONDENT: & ORS. DATE OF JUDGMENT26/09/1989 BENCH: , (J) BENCH: , (J) RAY, (J) CITATION: 1990 AIR 209 1989 SCR Supl. (1) 292 1990 SCC (1) 445 JT 1989 (4) 38 1989 SCALE (2)677 ACT: Criminal Trial--Criminal charge must be brought home- Proved beyond all reasonable doubt-abetment separate and distinct offence--Letting guilty escape is not doing justice according to law. HEADNOTE: , daughter of was married to in November, 1962. She died on 25th June, 1983 at about 2.30 P.M. It was alleged, she committed sui- cide because of the harassment, constant taunts and cruel behaviour of her in-laws towards her and persistent demand for dowry and insinnuations that she was carrying an ille- gitimate child. It is alleged, provoked by the aforesaid conduct and behaviour she committed suicide. The father-in- law, mother-in-law and the husband of the deceased have been the abetters of the crime and the deceased died of second to third degree burns. The learned Additional Sessions Judge on the totality of evidence on record held that the accused were guilty of abetment to suicide and as such punishable under Section 306 of the I.P.C. On appeal by the accused was of the view that the guilt of the accused had not been proved and as such acquitted them. The complainant and father of the deceased aggrieved by the order of preferred these appeals by way of special leave to appeal. This Court holding that the order of acquittal made by is not sustainable and affirming the conviction of the accused under section 306 of I.P.C. and the sentence imposed by the Additional Sessions Judge, Amritsar, HELD: (Per ) Abetment is a sepa- rate and distinct offence provided the thing abetted is an offence. Abetment does not involve the actual commission of the crime abetted; it is a crime apart. [295G] Criminal charges must be brought home and proved beyond all reasonable doubts. While civil case may be proved by mere preponderance of evidence, in criminal cases the prose- cution must prove the 293 charge beyond reasonable doubt. There must not be any 're- asonable doubt' of the guilt of the accused in respect of the particular offence charged. The courts must strictly be satisfied that no innocent person-innocent in the sense of not being guilty of the offence of which he is charged--is convicted. even at the risk of letting of some guilty per- sons. Even after the introduction of S. 493A of the I.P.C. and S. 113A of the Indian Evidence Act, the proof must be beyond any shadow of reasonable doubt. There is a higher standard of proof in criminal cases than in civil cases, but there is no absolute standard in either of the cases. [296C-F] The standard adopted must be the standard adopted by a prudent man which, of course, may vary from case to case, circumstances to circumstances. Exaggerated devotion to the rule of benefit of doubt must not nurture fanciful doubts of lingering suspicions and thereby destroy social defence. Justice cannot be made sterile on the plea that it is better to let hundred guilty escape than punish an innocent. Let- ting guilty escape is not doing justice, according to law. [296F] (Per Ray, J): Circumstantial evidence as well as the prosecution witnesses in the instant case clearly prove beyond doubt that the accused instigated and abetted Ravind- er Kaur, deceased in the commission of the offence by com- mitting suicide by burning herself. [306G] The findings arrived at by after consid- ering and weighing the entire evidences are unexceptional. The findings arrived at by without consider- ing properly the circumstantial evidence as well as the evidences of the prosecution witnesses cannot be sustained. As such the findings of are liable to be reversed and set aside. [306H; 307A] The suicide having been committed within a period of seven years from the date of her marriage in accordance with the provisions of Section 113A the Court may presume having regard to all the other circumstances of the case that such suicide had been abetted by the husband and his relations. Therefore, the findings arrived at by the Additional Ses- sions Judge are quite in accordance with the provisions of this section and the findings of that the accused persons could not be held to have instigated or abetted the commission of offence, is not sustainable in law. [308C-D] Section 113A of the Indian Evidence Act was inserted in the Statute Book by Act 46 of 1983 whereas the offence under Section 306 , I.P.C . was committed on June, 23, 1983 i.e. prior to the insertion of the 294 said provisions in the Indian Evidence Act . [308E] Bardendra Kumar Ghosh, 52 ILR Cal. 197. Mancini v. Director of Public Prosecutions, AC 1. v. , AC 462, v. , 2 AET 458 at 459. with and Anr., I SCC 244, , 2 SCR 11 at 30. v. , A.C. 643. ' v. , I AER 93, . 1989 3 SC 1, Halsbury's Laws of England, 4th Edn. Vol. 44 P. 510 & P. 574, refered to. JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 600-601 of 1989. ", "From the Judgment and Order dated 13.3.1986 of in Crl. Revn. No. 434 and 1295 of 1984. ", "Ms. , Ms. and for the Appellant. ", " and for the Respondents. The following Judgments of the Court were delivered , , daughter of , resident of Amritsar, was married to in November, 1982. She died on 25th June, 1983 at about 2.30 p.m. She, it was alleged, committed suicide because of the cruel behaviour of her in-laws soon after her marriage. She used to visit her parents' at Amritsar occa- sionally and during those visits she used to tell them that there was demand for dowry and also taunting of her by the members of the family of her in-laws and also insinuation that she was carrying on illegitimate child. There are sufficient, relevant and acceptable evidence to that effect. It is alleged that provoked by the aforesaid conduct and behaviour-, she committed suicide. The father-in-law, moth- er-in-law and the husband of the accused have been the abettors to the crime. The evidence further established that she died of second to third degree burns on the body, and there was sprawling of kerosene oil on her body and the body was burnt by fire. Accused no. 3--Smt. , the mother-in-law of the deceased and the mother of the accused , stated in her statement under s. 3 13 Cr. P.C. that she was lying in her house at that time and the de- ceased was cooking food on a kerosene stove, and as such the deceased caught fire accidentally. ", "Learned Addl. Sessions Judge held that there was absence of burn injuries on the fingertips of the mother-in-law and other members of the family. As mentioned before, the de- ceased was married in November, 1982. After marriage, she used to stay in the house of her-in-laws at Raja Sansi. The deceased used to visit the house of her parents at Amritsar occasionally, as noted before. During these visits she used to tell them that her-in-laws were not happy with the dowry given to the latter. It is further on evidence..that she complained that her in-laws used to taunt her and insisted her tO bring more dowry. It is stated that she complained that the in-laws taunted her that at the time of the mar- riage, her parents did not serve proper meals to the in-laws and their guests. It is further stated that the accused used to tell her that they had been offered by fridge etc. by other parties for the marriage of the accused while she had not brought dowry expected from her parents. It is also on evidence that she was often openly threatened that she would be turned out of the house in case she did not bring more articles. These were all established by the evidence of , father of the deceased and his two daugh- ters. It was insinuated of her by the accused that she was carrying an illegitimate child. ", "On the totality of these evidence on record, it was held by the learned Sessions Judge that the accused were guilty of abetment to suicide and as such punishable under s. 306 of the I.P.C. on appeal was of the view that the guilt of the accused had not been proved, and as such acquitted them. ", "The first thing that is necessary for proving the of- fence is the fact of suicide. Abetment is a separate and distinct offence provided the thing abetted is an offence. Abetment does not involve the actual commission of the crime abetted; it is a crime apart. See the observations of , 52 ILR Cal. 197. It was contended on behalf of the accused that there was no direct evidence of the act of suicide by . There, indeed, could not be in the circumstances in which she died. She was in the house of her in-laws. There is ample and sufficient evidence that she had complained that she was taunted for bringing meager dowry and that even insinuated that she was carrying 'an illegitimate child'. The aforesaid facts stand established by cogent and reliable evidence. These are grave and serious provocation enough for an ordinary woman in the Indian set up, to do what the deceased is alleged.to have done. There is also evidence that the persons in the house of her in-laws in- cluding the mother-in-law-mother of the accused , made no attempt to save her from the burn injuries. The absence of any burn injury in the hands of the people around, indicates and establishes that there was no attempt to save the deceased though she was seen being burnt. The evidence of attitude and conduct of the in-laws--the father-in-law, mother-in-law and the husband after , the deceased, got burns in not informing the parents and not taking prompt steps to take her to hospital for giving medical assistance corroborate the inference that these accused connived and abetted the crime. Criminal charges must be brought home and proved beyond all reasona- ble doubt. While civil case may be proved by mere preponder- ance of evidence, in criminal cases the prosecution must prove the charge beyond reasonable doubt. See v. Director of Public Prosecutions, [1942] AC 1, v. , [1935] AC 462. It is true even today, as much as it was before. There must not be any 'reasonable doubt' about the guilt of the accused in respect of the particular offence charged. The courts must strictly be satisfied that no innocent person, innocent in the sense of not being guilty of the offence of which he is charged, is convicted, even at the risk of letting of some guilty persons. Even after the introduction of s. 498A of the I.P.C. and s. 113A of the Indian Evidence Act, the proof must be beyond any shadow of reasonable doubt. There is a higher standard of proof in criminal cases than in civil cases, but there is no absolute standard in either of the cases. See the observations of Lord in Bater v. Bater, 2 AER 458 at 459 but the doubt must be of a reasonable man. The standard adopted must be the standard adopted by a prudent man which, of course, may vary from case to case, circumstances to circumstances. Exaggerated devotion to the rule of benefit of doubt must not nurture fancilful doubts or lingering suspicions and thereby destroy social defence. Justice cannot be made sterile on the plea that it is better to let hundred guilty escape than punish an innocent. Letting guilty escape is not doing justice, according to law. ", "The conscience of the court can never be bound by any rule but that is coming itself dictates the consciousness and prudent exercise of the judgment. Reasonable doubt is simply that degree of doubt which would permit a reasonable and just man to come to a conclusion. Reasonableness of the doubt must be commensurate with the nature of the offence to be investigated. ", "297 ", "Having regard to the circumstances of the case, there is no direct evidence indicating the circumstances in which the death took place, the conduct of the accused and the nature of the crime with which the accused was charged, there cannot be any scope of doubt that the learned Sessions Judge was right and the conviction was properly made. This is not a case where there could be two views possible on the facts found and on the facts which could not possibly be found because of i,the nature of the offence. The fact the two view are reasonably possible, is not established by the fact that two different conclusions are reached by two adjudica- tory authorities. The factum of that may be only a piece of evidence, but whether two views at all are possible or not, has to be judged in all circumstances by the Judge, by the logic of the facts found in the background of law. For the reasons aforesaid, I respectfully agree with the judgment and order proposed by my learned brother. ", ", Special leave granted. ", "These appeals are at the instance of , the complainant against the judgment and order passed in Criminal Appeal No. 434 SB of 1984 by at Chandigarh acquitting the accused-re- spondents of the charge under s. 306 of the Indian Penal Code on setting aside the conviction and sentence passed by the Additional Session Judge on August 9, 1984 convicting and sentencing all the accused. The appeal was allowed on holding that there was no evidence on record that the ac- cused at the time of commission of suicide by , in any way instigated or abetted her to commit suicide and as such the prosecution failed to establish the charge against the accused and their conviction consequently can not be sustained. ", "The prosecution case is that the deceased, , daughter of , the complainant was married to in November, 1982. After marriage, started living in the house of her in-laws at Raja Sansi. She used to visit the house of her parents at Amritsar occasionally and during these visits, she used to tell them that her in-laws were not happy with the dowry given to her and they used to taunt her and insisted her to bring more dowry and that they even used to taunt her that her parents at the time of the marriage did not serve them with proper meals. The accused also used to tell her that they were being offered Fridge etc. by the other parties in the marriage of Accused and that she has not brought the dowry expected from her parents. She was often told by them that she would be turned out of the house, in case she did not bring more articles. ", "In November, 1982, visited the house of her in-laws at Raja Sansi where his daughter complained that the behaviour of her in-laws towards her was not cordial and that they were maltreating her for bringing insufficient dowry and they even taunted her that she was carrying an illegitimate child. Hearing these complaints from her daugh- ter, brought her daughter to his house at Amritsar, one day prior to Baisakhi, 1983 and his daughter continued to remain at his house for about eight days. There-. after , his father , accused and his mother along with , and , maternal uncles of came to the house of at Amritsar and pursuaded that he should send with them where- upon told them that his daughter complained against the ill-treatment and cruel behaviour towards her for bringing insufficient dowry and they also taunted her for this as well as for her illegitimate child and put pressure on her to bring more dowry. So he was reluctant to send her daughter back to her in-laws. called , President of , Smt. , a social worker living in the neighbourhood of and one to his house and all these complaints and grievances were repeated in presence of these persons. The accused assured him that in future they would not maltreat and taunt her and that he would not receive any complaint against them. They also assured him that in future they would not ask her to bring more dowry. On these assurances of the accused, sent his daughter with the accused to Raja Sansi, the house of the accused. ", "For about two months, did not receive any information from his daughter and so he sent his two daughters and to Raja Sansi to the house of the in:laws of to enquire about her welfare. The said daughters of went to the house of the in-laws of on June 23, 1983 that is, two days prior to the death of . The de- ceased complained to them about the torture as well as cruel behaviour of her in-laws, as before and they have not stopped maltreating her and torturing her and she was not happy there. On June 25, 1983 at about 6.30 p.m., , maternal uncle of came to the shop of at Amritsar and informed him that his daugh- ter committed suicide by sprinkling kerosene oil on her body and then setting herself on fire and that she was lying at , Amritsar. immediately went to the hospital and found the dead body of her daughter lying in the dead house. It has been alleged that committed suicide on June 25, 1983 at 2.30 p.m. having fed up with the cruel behaviour of her in-laws. The appellant alongwith the mem- bers of his family stayed in the hospital. On June 26, 1983, , , Ajnala came to the dead house at Amritsar at about 5 p.m. and examined the dead body of . He recorded the statements of , and . ", "The statement of was reproduced in the Roznamcha, and the statements of and , President of and though disclosed the commission of a cognizable offence by the accused yet , A.S.I. and even , D.S.P., Ajnala Police Station did not register the case for extraneous reasons. On June 27, 1983, Dr. , Medical Offi- cer, , Amritsar conducted the post mortem examination on the dead body of and found 2nd to third degree burns on the body of deceased. alongwith his daughters and , , and others met the S.S.P. Amritsar in this regard and the investigation of the case was then entrusted by S.S.P. to , S.P. (Head Quar- ters) Amritsar who summoned and other per- sons and recorded their statements on July 23, 1983. All the three accused were charged for an offence under s. 306 of the Indian Penal Code and they pleaded not guilty to the charge framed against them. The accused no. 3 Smt. , the mother of the accused, stated in her statement under s. 313 Cr. P.C. that she was lying in her house at the time and the deceased was cooking food in the kitchen on a kerosene stove and she caught fire accidentally. ", "The learned Additional Sessions Judge held that the absence of burn injuries on the fingertips of the mother-in-law or other members of the family as evident from the statement of D.W. 1, Jaswant Singh, ruled out the story of accidental fire as set up by the defence. He further held referring to the provisions of s. 113A of the Evidence Act that having regard to the facts and circumstances of the case it may be presumed that the ac- cused persons have abetted the suicide committed by the deceased and they fail to reverse this prosecution case by any evidence. Accordingly, the Additional Sessions Judge, Amritsar convicted the accused under s. 306 and sen- tenced them to suffer rigorous imprisonment for five years each and to pay a fine of Rs.2,000 each, in default of payment of fine the accused shall be further liable to rigorous imprisonment for four months. ", "The accused-respondents preferred an appeal being Crimi- nal Appeal No. 454 of 1984 in and Haryana. The appeal was allowed and the conviction and sentence was set aside on the ground that the prosecution failed to establish the charge against the accused persons. Hence this appeal by special leave has been filed by the complainant. ", "It has been contended by the learned counsel appearing on behalf of the appellant that the cruel behaviour, mal- treatment and taunts for not bringing sufficient dowry have been made to the deceased, , soon after her coming to the house of her in-laws. It has also been urged that in November, 1982 she complained of her in-laws' iII- treatment and taunts to his father and her father took her to his house. It has also been urged that the accused and his father accused and other relatives of the accused met the deceased father at his house and requested him to send his daughter to the house of her in-laws and assured them that they would not maltreat her or taunt her or torture her for not bringing sufficient dowry. These assurances were given in the presence of , the President of , and , a social worker and one . , father of the deceased on these assurances given by the accused and their relations sent his daughter, to her in laws house. It has also been urged that on June 23, 1983 the two daughters and were sent by to the house of the in- laws of to enquire about her welfare. , PW-7 stated in her statement under s. 161 Cr. P.C. that her sister complained them about the same iII-treatment by her husband continuing in the same manner as before and as such she was not happy. This was reported by them to their father at Amritsar. It has also been urged that all the three accused taunted the deceased, that she was carrying an illegitimate child. Being depressed with these taunts and iII-treatment the deceased committed suicide by sprinkling kerosene on her person and setting her to fire. The evidences of PW-4 , father of the deceased and the evidence of PW-7 as well as evidence of PW-6 were duly considered by the trial court and the trial court clearly found the accused persons guilty of the offence of abetting the sui- cide committed by the deceased. The court of appeal below had wrongly found that the prosecution could not prove charge against the accused and set aside the order of con- viction and sentence made by the trial court and acquitted the accused. It has been urged in this connection that the defence that it was a case of accidental fire and not of suicide was also not believed by the trial court and the trial court gave very cogent and plausible reasons for not believing this story and holding that it was a case of suicide committed by the deceased by the taunts and ill-treatment made to her by her in laws and this forced her to take her own life by suicide. It has been submitted that the accused have abetted the commission of suicide by , deceased and the accused are, therefore, guilty of the said charge. The order of acquittal made by is not sustainable in these circum- stances. ", "The learned counsel, Mr. has made three fold submissions before this Court. The first submission is that the case of suicide committed by the deceased was not proved and as such the conviction on the charge of s. 306 I.P.C . as made by the trial court was not sustain- able. He has further submitted that the prosecution has not proved beyond reasonable doubts that the deceased committed suicide. The next submission made is that the evidences produced on behalf of the prosecution are meagre and do not prove that the accused had abetted the commission of suicide by the deceased . The prosecution did not prove that there was any instigation by the accused persons charged with the offence in this case. has rightly held that the prosecution failed to prove the ingre- dients of s. 306 of the and acquitted the accused of the charge under s. 306 . This order of acquittal should not be interfered with by this Court in this appeal. It has been lastly contended that if two reasonable views could be taken of evidences, one in favour of the accused and the other against them the appellate court should not interfere in such case and set aside the order of acquittal. As regards the first submission that the case of suicide has not been proved, it is relevant to mention that in the FIR (Ex. PF) lodged by the complainant it has been specifi- cally stated that due to constant harassment of by the accused persons for having brought less dowry in her marriage as well as due to constant taunts and also torture, the deceased committed suicide by pouring kerosene oil on her and burnt herself and afterwards she died. It has been further stated in the FIR that the complainant apprehended that some quarrel must have happened on the day of the incident between his daughter, and her husband , father-in-law and mother-in-law before she took the extreme step. P.W. 4, has also stated in his deposition that his daughter used to tell them that her husband, father-in-law and mother-in-law always taunted her saying that her parents had not given sufficient dowry during the marriage and had not even served them with proper meals at the time of marriage. He further stated that on 25th June, 1983 at 6.30 p.m. , maternal uncle of came to shop and told him that his daughter had committed suicide by sprinkling kerosene oil on her body and then setting her on fire. In his statement under Section 161 , Cr. P.C. recorded on 23rd July, 1983 he also stated that her two daughters namely and (P.W. 7) who visited Raja Sansi to meet their sister, two days before the incident were told by her deceased daughter that her in-laws often taunted her for not bringing sufficient dowry. It has also been stated by him that the accused taunted her daughter saying that she was carrying an illegal child which is a great defame for them. It has also been stated that \"due to the bad treatment meted out towards his daughter at the hands of her husband, , her mother-inlaw, and her father-in-law, that she had not brought scooter and fridge and had brought less dowry in her marriage they had forced her to put kerosene oil on her body and commit suicide and as they often taunted her saying that she had begotten immoral and illegal pregnancy and for this reason she had committed suicide and thus had lost her life.\" ", "Furthermore, though the house of the accused persons is not far off yet the information was given not by his son-in-law or other members of the family promptly but it was given by the maternal uncle of the son-in-law, at 6.30 p.m. to the appellant although the incident occurred at about 2.30 p.m. It is also evident that the deceased, who had second to third degree burns on her person was brought to the hospital in the evening and the doctor, P.W. I immediately examined her and declared that she was already dead. Another most pertinent question which has been decided by is that the de- fence story as stated by her mother-in-law, in her examination under section 3 13 Cr. P.C. that it was a case of accidental fire and not a case of suicide, was falsified by the absence of burn injuries on the finger tips of the mother-in-law or other members of the family. rightly held \"that the intending circumstances show that she was not allowed to move till the process of burning had become irrecoverable and till she succumbed to her injuries.\" ", "We do not find any infirmity in this finding and we also hold on consideration and appraisement of the evidences as well as the circumstances set out hereinbefore that it was not a case of accidental fire but a case of suicide commit- ted by the deceased being constantly abused, taunted for bringing less dowry and also being defamed for carrying an illegitimate child. It is pertinent to mention that in the appeal before it was not urged on behalf of the accused that the case of suicide was not proved and as such there was no finding by on this score. In such circumstances this argument is totally devoid of merit and as such it is not sustainable. It is convenient to refer in this connection the deci- sion cited at the bar in with State of Haryana v. and Another, 1 SCC 244 to which one of us () was a party, wherein it has been held that \"a plain reading of this provision (S. 306 I.P.C ) shows that before a person can be convicted of abetting the suicide of any other person, it must be established that such other person committed sui- cide.\" This decision is not at all applicable to the instant case in view of our specific finding that the evidence adduced on behalf of the prosecution clearly establish that the deceased committed suicide at the instiga- tion and abetment of the accused persons in the commission of the said offence. ", "The next argument advanced is that the evidences were too meagre and unreliable to sustain the conviction. It has also been urged that considered the evidences and came to a reasonable finding that the prosecution could not prove the ingredients of Section 306 , IPC as there was no instigation by the accused nor there was any conspiracy for the commission of that offence. arrived at this finding on some contradictions in the statement of the evidences of P.W. 4, , father of the deceased and of P.W. 7, , sister of the deceased respectively with their statements made under Section 161 Cr. P.C. ", "304 ", "It is convenient to refer in this connection the obser- vation made by this Court in the case of , 2 SCR 11 at 30 to the following effect: ", "\"It emerges clear that on a criminal prosecu- tion when a witness is cross-examined and contradicted with the leave of the court, by the party calling him, his evidence cannot, as a matter of law, be treated as washed off the record altogether. It is for the Judge of fact to consider in each case whether as a result of such cross-examination and contradiction, the witness stands thoroughly discredited or can still be believed in regard to a part of his testimony. If the Judge finds that in the process, the credit of the witness has not been completely shaken, he may, after reading and considering the evidence of the witness, as a whole, with due caution and care, accept, in the light of the other evidence on the record that part of his testimony which he finds to be creditworthy and act upon it.\" ", "We have already referred to the material portions of the FIR as well as all the statements made by P.W. 4 in his evidence as well as his statement under Section 161 Cr. P.C. as well as the evidence of P.W. 7 and her statement under Section 161 Cr. P.C. On a plain reading of these statements it will be crystal clear that the accused persons since the date when the deceased, went to her in-laws' house after the marriage, was mal-treated and was constantly taunted, harassed and tortured for not bringing sufficient dowry from her father and she was taunted for carrying an illegitimate child. The appellant sometime in November, 1982 went to her in-laws house. His daughter, complained to him about this torture and constant taunts for not bringing sufficient dowry. On hearing this, her father brought her to his house and after eight days the accused persons, , his father and two maternal uncles came to the house of the appellant and requested him to send his daughter with them assuring that there would be no further taunts or any iII-treatment by the respondents. The President of , , P.W. 5 and a social worker, , P.W. 6 and another person of the same village were called in by and in their presence all these talks were held. On the assurances given, sent his daughter with them. It is also in evidence that as no information of her was received, sent his two other daughters namely , P.W. 7 and , to the house of the in-laws of the deceased to en- quire about her welfare. told them that there was no improvement in the treatment meted out to her and she was being taunted and tortured by her in-laws in the same way and she was not happy. Two days thereafter i.e. on 25th June, 1983 at 2.30 P.M. this unfortunate incident occurred. P.W. 7, also stated in her deposition to the same effect. In her statement under Section 161 Cr. P.C. she also stated categorically that after about one month of the marriage whenever met her she told that her in-laws i.e. the respondents were not treating her well for bringing less dowry. She was also told that the respondents were demanding refrigerator and a scooter. They had also taunted that she was having illegitimate child. She further stated that two days prior to the present occurrence she and her sister, went to Raja Sansi to enquire about the welfare of our sister, who told them weepingly that she was being beaten by the accused and again was mal-treated for bringing less dowry and scooter and fridge etc. She further stated that the respondents were leveling allegations that she had been carrying an illegiti- mate child and that she should die. It was also stated by her that her mother-in-law, was present in the house and she was abusing in their presence. ", "The learned Sessions Judge after carefully considering and weighing the evidences held that the witnesses P.W. 4, , P.W. 5, , President of , P.W. 6, Smt. Raj Kumari, social worker and P.W. 7, clearly proved that the respondents mal-treated for bringing less dowry and they even tortured her for carrying an illegiti- mate child. The said witnesses testified to the greedy and lusty nature of the respondents that they were persistently demanding more money. It has also been held that the worst part of the cruelty was that she was even taunted for carry- ing an illegitimate child. also held that a respectable lady cannot bear this kind of false allegation levelled against her and this must have mentally tortured her. Thus the persistent demands of the accused for more money, their tortures and taunts amounted to instigation and abetment that compelled her to do away with her life. This finding was arrived at by the learned Sessions Judge on a proper appreciation of the evidences adduced by the prosecution. without properly considering and weighing the evidences of the prosecution witnesses and on a wrong appreciation of the evidences found that the prosecution failed to prove the ingredients of Section 306 of I.P.C. It was also held that there was no evidence on record that the accused at the time of commis- sion of suicide by , deceased in any way insti- gated or abetted her to commit suicide even though it has been brought but in evidences that the deceased was being maltreated by the accused continuously after her coming to the house of her in-laws. It was further held that the prosecution has singularly failed to establish the charge against the accused and their conviction and sentences were consequently unsustainable. ", "We have already stated hereinfore that P.W. 4, , P.W. 7, have clearly stated in their depositions about the ill-treatment, torture and the cruel behaviour meted out to the deceased which instigated her to take the extreme step of putting an end to her life by sprinkling kerosene oil on her body and setting fire. We have also stated hereinbefore that though the incident occurred at 2.30 P.M. the information of the death of by burning was given to her father, at 6.30 P.M. in his shop at Amritsar. with members of his family immediately rushed to the hospital and found the dead body of her daughter in the dead house of the hospital. It is also in evidence that was brought to the hospital after much delay when she was already dead. ", " rightly held that in such cases direct evidence is hardly available. It is the circumstantial evidence and the conduct of the accused persons which are to be taken into consideration for adjudicating upon the trust- fulness or otherwise of the prosecution case. We have already referred to hereinbefore the evidences of the prosecution witnesses who clearly testified to the greedy and lusty nature of the accused in that they persist- ently taunted the deceased and tortured her for not having brought sufficient dowry from her father. It is also in evidence that they also taunted her for carrying an illegit- imate child. All these tortures and taunts caused depression to her mind and drove her to take the extreme step of put- ting an end to her life by sprinkling kerosene oil on her person and setting fire. Circumstantial evidence as well as the evidences of the prosecution witnesses clearly prove beyond reasonable doubt that the accused persons instigated and abetted , deceased in the commission of the offence by committing suicide by burning herself. The find- ings arrived at by after considering and weighing the entire evidences are unexceptional. The findings arrived at by without considering properly the cir- cumstantial evidence as well as the evidences of the prose- cution witnesses cannot be sustained. As such the findings of are liable to be reversed and set aside. drew an inference from the conduct of , P.W. 4 in making a delay of about 24 hours after receipt of the information regarding her daughter's death to make a statement to the police about the incident with lodging the F.I.R. on the same date, i.e. June 25, 1983 or on the following morning. , therefore, held that all these circumstances would raise considerable doubt regarding the veracity of the evidence of these two witness- es (P.W. 4 and P.W. 7) and point an infirmity in their evidence as would render it unsafe to base the conviction of the accused. ", "It is in evidence of P.W. 4 that he was intimate about the death of his daughter by committing suicide, by the maternal uncle of , son-in-law on June 25, 1983 at about 5.30 p.m. He immediately rushed to the hospital with members of his family where his daughter was brought. It is also in his evidence that he stayed there the whole night with his wife and other members of his family near the dead body of his deceased daughter and also on the next day till the dead body was handed over to him after the comple- tion of post martem in the afternoon. The Assistant Sub- Inspector of Police of Ajnala Police Station reached SGTB Hospital on the next day i.e. on June 26, 1983 and got his statement recorded there. It has been rightly held by the Additional Sessions Judge that in the circumstances it cannot be said that there has been any delay in reporting the matter to the police. We fully accept this finding of the Additional Sessions Judge and we also held that the delay in lodging the FIR in the above circumstances does not raise any doubt regarding the veracity of the said two witnesses and there is no infirmity in the evidences of P.W. 4 and P.W. 7 which would render them unsafe to base the conviction of the accused as wrongly observed by the High Court. ", "It is also convenient to refer to this connection to the provisions of Section 113A of Indian Evidence Act, 1872 which provide that: ", "\"113-A. Presumption as to abetment of suicide by a married women--When the question is whether the commission of suicide by a woman had been abetted by her husband or any rela- tive of her husband and it is shown that she had committed suicide within a period of seven years from the date of her marriage and that her husband or such relative of her husband had subjected her to cruelty, the court may presume, having regard to all the other circumstances of the case, that such suicide had been abetted by her husband or by such relative of her husband.\" ", "In the instant case the deceased was married to the accused, in November, 1982 and she committed suicide on June 25, 1983. It has also been found on a consideration of the circumstantial evidence that she was compelled to take the extreme step of committing suicide as the accused persons had subjected her to cruelty by constant taunts, mal-treatment and also by alleging that she has been carrying an illegitimate child. The suicide having been committed within a period of seven years from the date of her marriage in accordance with the provisions of this Section, the Court may presume having regard to all the other circumstances of the case which we have set out earlier that such suicide has been abetted by the husband and his relations. Therefore, the findings arrived at by the Additional Sessions Judge are quite in accordance with the provisions of this Section and the finding of that the accused persons could not be held to have instigate or abetted the commission of offence, is not sustainable in law. ", "It has been contended on behalf of the accused-respond- ents that Section 113-A of the Indian Evidence Act was inserted in the Statutes Book by Act 46 of 1983 whereas the offence under Section 306 , I.P.C . was committed on June 23, 1983 i.e. prior to the insertion of the said provision in the Indian Evidence Act . It has, therefore, been submitted by the learned counsel for the respondents that the provi- sions of this Section cannot be taken recourse to while coming to a finding regarding the presumption as to abetment of suicide committed by a marriage woman, against the ac- cused persons. ", "The provisions of the said Section do not create any new offence and as such it does not create any substantial right but it is merely a matter of procedure of evidence and as such it is retrospective and will be applicable to this case. It is profitable to refer in this connection to Hals- bury's Laws of England, (Fourth Edition), Volume 44 Page 570 wherein it has been stated that: ", "\"The general rule as mat all statutes, other than those which are merely declaratory or which relate only to mat- ", "309 ", "ters of procedure or of evidence, are prima facie prospective, and retrospective effect is not to be given to them unless, by express words or necessary implication, it appears that this was the intention of the legislature It has also been stated in the said volume of at page 574 that: \"The presumption against retrospection does not apply to legislation concerned merely with matters of procedure or of evidence; on the contrary, provisions of that nature are to be construed as retrospective unless there is a clear indication that such was not the inten- tion of .\" ", "In v. , [1966] A.C. 643 the wife left the husband in 1954 and lived with the co-respondent until August, 1955, when she broke off the association. In 1958 the husband and wife met by chance and sexual intercourse took place. In December, 1962, the husband sought a divorce on the ground of his wife's adultery. During the pendency of the application section 1 of the Matrimonial Causes Act, 1963 came into force on July 31, 1963 which provided that any presumption of condonation which arises from the contin- uance or resumption of marital intercourse may be rebutted on the part of a husband, as well as on the part a of wife, by evidence sufficient to negative the necessary intent. The question arose whether this provision which came into force on July 31, 1963 can be applied in the instant case. It was held that the husband's evidence was admissible in that Section 1 of the Act of 1963 only altered the law as to the admissibility of evidence and the effect which the courts are to give to evidence, so that the rule against giving retrospective effect to Acts of Parliament did not apply. In v. , 1 AER 93 similar ques- tion arose, it was held that section 2(1) of the Act of 1963 was a procedural provision, for it dealt with the adducing of evidence in relation to an allegation of condonation in any trial after July 31, 1963; accordingly the subsection was applicable, even though the evidence related to events before that date, and the resumption of cohabitation in the present case did not amount, by reason of Section 2(1) , to condonation. ", "On a conspectus of these decisions, this argument on behalf of the appellant fails and as such the presumption arising under Section 113-A of The Evidence Act has been rightly taken into consideration by . It has been urged by referring to the decision in 1989 3 SC 1 that where two views could reasonably be taken the appellate court should not interfere with the order of acquittal made by . ", "In the instant case on a proper consideration and weigh- ing of the evidences the only reasonable view that can be taken is that the cruel behaviour and constant taunts and harassment caused by the accused persons while , deceased was in her in-laws house instigated her to commit suicide and in our considered opinion no other rea- sonable view follows from a proper consideration and ap- praisement of the evidences on record. As such the decision cited above is not applicable to the facts and circumstances of the instant case. ", "For the reasons aforesaid we set aside the judgment and order of acquittal passed by and affirm the conviction of the accused of the offence under Section 306 I.P.C. and sentence imposed upon them by the Additional Sessions Judge, Amritsar. The respondents will immediately surrender in , Amritsar to serve out the remaining period of their sentence. ", "R.N.J. Appeals allowed."], "relevant_candidates": ["0000590455", "0000916840", "0001481813", "0001907199"]} {"id": "0000030721", "text": ["CASE NO.: Appeal (civil) 2995-97 of 1984. Appeal (civil) 3301-03 of 1984 Appeal (civil) 3018-20 of 1984 PETITIONER: UNION OF INDIA Vs. RESPONDENT: & ORS. DATE OF JUDGMENT: 10/01/2001 BENCH: S.R.Babu, D.P.Mohapatro, Doraswamy Raju, S.V.Patil JUDGMENT: ", "L.....I.........T.......T.......T.......T.......T.......T..J JUDGMENT PATTANAIK,J. ", "These appeals by are directed against the judgment of , Certificates under Articles 132(1) and 133 of the Constitution for leave to appeal to having been granted by itself. By the impugned judgment, came to the conclusion that the action of in taking over the managements of the three Cotton Mills, namely, , and of Bombay under the provisions of Textile Undertakings (Taking over of Management) Ordinance, 1983, (hereinafter referred to as The Ordinance) and the Textile Undertakings (Taking over of Management) Act , 1983 (hereinafter referred to as The Act ), infringed the fundamental right under Article 14 of the Constitution and, therefore, qua them it was invalid. also further came to hold that the Act infringed the petitioners fundamental rights under Article 19(1)(g) and on that count qua the petitioner was equally invalid. In coming to the aforesaid conclusion after thorough discussion of the materials on record found that failed to establish either directly or inferentially any mis-management on the part of the three companies and failed to establish from the material on record that there was any nexus between the main object or purpose of the Act, viz., to take over management of only those mills whose financial condition before strike was wholly unsatisfactory by reason of mis-management. ", "The short facts leading to the promulgation of the Ordinance and replacement of the same by the Act are that the Textile in and around Bombay had gone on strike with effect from 18.1.1982. On 15.2.1982 declared its policy for nationalisation of all these Textile Industries. In October 1982, had called a meeting to discuss the situation arising out of the strike. Depending upon the economic conditions of different mills the mills had been classified into three groups. The continued Textile strike had deteriorated the financial condition of all the Textile and the were looking forward to the Financial Institutions and Nationalised Banks for financial aid to make the viable. On 28th March, 1983, wrote letters to and to conduct a viability study of these . The three , with which we are concerned, in these appeals had been included in category III. On 20th September, 1983, in had issued a Memorandum constituting a to collect data and submit a note for being placed before of to enable it to take a decision as to which of the in category III would be Nationalised. The said submitted its report by the end of September 1983. On 18th October, 1983, the Ordinance was promulgated and the management of 13 Textile enumerated in the First Schedule to the Ordinance was taken over pending Nationalisation of the Undertakings. The Ordinance indicates that for re-organising and re-habilitating the Textile to protect the interest of the workmen employed therein, and to augment the product and distribution at fair price of different varieties of cloth and yarn so as to subserve the interest of the general public, investment of very large sums of money was necessary and for such investment, the Central Government felt that the acquisition of the would be necessary, but since acquisition would take some time and it was felt that it would be expedient in the public interest to take over the management of the Undertakings, pending acquisition, and that was not in Session, the President, on being satisfied that circumstances exists for taking immediate action, promulgated the Ordinance in exercise of powers conferred under Article 123(1) of the Constitution. The said Ordinance was replaced by the Act and the Act provided that the same shall be deemed to have come into force on 18th day of October, 1983. Immediately after the promulgation of the Ordinance the Management of the , enumerated in the First Schedule thereof, having been taken over by the Government, the three referred to earlier filed three Writ Petitions in Bombay High Court challenging the applicability of the Ordinance so far as those are concerned. After replacement of the Ordinance by the Act the Writ Petitions were amended and thus the validity of the Act was challenged qua the three Writ Petitioners. Though the challenge was on three counts, namely, violation of Article 14 , violation of Article 19(1)(g) and violation of Article 300A , but at the time of hearing the challenge in relation to violation of Article 300A was not pressed and, therefore, considered the challenge, so far as it relates to violation of Articles 14 and 19(1)(g) of the Constitution. in the impugned judgment made elaborate discussion of the materials on record as well as interpreted the different provisions of the Constitution and came to hold that the act with its object of only taking over the management cannot be considered to be law for taking over the ownership and control of the property, as required under Article 39(b ), but would squarely fall under Article 31A (1)(b) and, therefore, Article 31(c) will have no application. also came to the conclusion that to protect a legislation under Article 31(c ), there must be a declaration in the legislation itself that the Act was enacted to give effect to the Directive Principles under Article 39(b) and (c ), and in the case in hand, there being no such declaration either in the Ordinance and in the Act, Article 31(c) will have no application and, squarely the challenge on the ground of violation of Article 14 or 19 has to be examined. On examining Article 31A(1)(b) was of the opinion that two conditions must be satisfied for attracting Clause 1(b) of Article 31A , namely, that the taking over of the management of the property by the would be for a limited period, and such taking over must be either in public interest or in order to secure the proper management of the property, since the taking over of management was not for any limited period and in fact such management had been taken over pending nationalisation, the provisions of Clause 1(b) of Article 31A would not get attracted. According to the expression Pending Nationalisation cannot be held to be for a limited period and the protection of Article 31A (1)(b) would be available only when there is a definite limit in the law for the period of management and, consequently the challenge on the anvil of violation of Articles 14 and 19(1)(g) has to be examined. then examined the factual aspect for considering the question as to whether there were any materials to put the three in a class of for which the taking over of the management was meant notwithstanding a declaration or recital in the Preamble itself, the same being whose financial condition had become wholly unsatisfactory by reason of mis-management. then examined the different datas collected by as well as several reports including the Report and ultimately came to the conclusion that even though the financial condition had become unsatisfactory but the Union Government has failed to establish that such unsatisfactory financial condition is by reason of mis-management and, therefore, there was no nexus between the basis of the classification of the petitioner with other mismanaged and the said object and the purpose of the Act. In other words, came to the conclusion that inclusion of the three in the Schedule appended to the Ordinance and the Act was arbitrary and, on the other hand, the figures given by itself show that the financial position of the three were far better than even the which were in category II. Consequently, was of the opinion that the Government could not have, for taking over of the management of the petitioners , classified those as whose financial condition was bad due to mis-management. , therefore, ultimately came to the conclusion that there has been a gross violation of Article 14 in clubbing the three with other in category three, enumerated in the Schedule appended to the Act and such inclusion violates the fundamental right guaranteed under Article 14 of the Constitution. also came to the conclusion that the impugned Act infringed the petitioners right under Article 19(1)(g) and on that count qua petitioners was equally invalid. Having come to the aforesaid conclusion the Writ Petitions were allowed and the order of taking over of the management of three was set aside. But the operation of the order had been stayed for 8 weeks and certain restrictions had been imposed and also granted Certificate under Article 132(1) and 133 of the Constitution for Leave to Appeal to . When the matter was listed before this Court the aforesaid interim order staying the operation of the judgment was continued and later on certain Misc. Applications being filed by different certain orders have been passed by the Court with regard to the possession of certain assets, like, car, telephone connections etc. When the appeals were taken up for hearing in January 1985, the same had been heard before but after hearing for some time felt that in view of the questions which arise for consideration, and in view of Clause 3 of Article 145 of the Constitution the cases should be heard by a Bench of not less than Five Honble Judges and that is why these appeals were heard by us. ", "Mr. , the learned Solicitor General, appearing for the appellant contended that the basic approach of in examining the constitutional validity of the Act is grossly erroneous and such approach has vitiated the ultimate conclusion. According to the learned Solicitor General, the financial condition of these mills had become so bad that unless large sum of money from the public exchequer was pumped into it, the mills were not in a position to run and that in turn would have made thousands of labourers idle. To overcome the aforesaid crisis and since large scale government money was going to be pumped into the for making it viable, the itself thought it appropriate to take step for acquiring the and pending finalisation of acquisition the thought it fit to take over the management which was absolutely necessary in the public interest. According to Mr. this is apparent from the Bill introduced by the concerned Minister as well as the Act itself and in such a case the would not be justified in examining the datas which persuaded the to take the aforesaid decision to come to a conclusion that the said decision of the could not have been taken on the available materials. According to Mr. the fact that the management of the had been taken over until the are acquired by enacting an Acquisition Act , for all practical purposes the taking over was for a limited period thereby attracting Clause 1(b) of Article 31A and was in error in concluding that the taking over was not for a limited period and, as such, Clause 1(b) of Article 31A will not get attracted. According to learned Solicitor General the Act in question was for a limited period and had been enacted in the public interest coming within the purview of Clause (1)(b) of Article 31A and, therefore, provisions of Article 14 or Article 19 cannot at all be attracted for assailing the validity of the action taken under the Act. The learned Solicitor General also further urged that the materials which were there before the before promulgation of the Ordinance and before the before enactment of the Act were sufficient for classifying the into three categories and in fact by inclusion of the three with which we are concerned in the present appeals with the group of 13, the Management of which was being taken over by the Act, by no stretch of imagination can be held to be discriminatory nor the conclusion of that there has been an infringement of Article 19(1)(g) of the Constitution is at all sustainable. The learned Solicitor General also placed reliance on the averments made by in its Counter Affidavit filed before to indicate how it was absolutely necessary to promulgate the Ordinance and how the took the decision after considering the reports submitted by the and other financial institutions as well as the report of the so called . He also placed reliance on the Affidavit of Mr. , the then Secretary explaining the Report and contended that was in error in basing its conclusion on the earlier Affidavit of one Mr. . According to learned Solicitor General that while considering the constitutional validity of a statute, more particularly a statute on economic matter, certain well established principles evolved by the as rules of guidance in discharge of its constitutional function of judicial review have to be borne in mind, and in the case in hand the impugned judgment of , on the face of it, indicates that those guiding principles have not been borne in mind. According to the learned Solicitor General one cardinal principle well accepted and recognized by is that the legislature understands and correctly appreciates the needs of its own people and its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds and the presumption of constitutionality is indeed so strong that in order to sustain it the may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. He further emphasised that the law relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. and totally over-looked the aforesaid approach and guidelines in basing its conclusion. According to the learned Solicitor General the preamble of the Act unequivocally indicates the Act to be a piece of legislation for taking over in the public interest of the management of the Textile Undertakings of the Companies specified in the First Schedule pending nationalisation of such undertakings. It no doubt, further stipulates that by reason of mis- management of the affairs of the Textile Undertakings specified in the First Schedule their financial condition became wholly unsatisfactory but the financial condition of these had become so precarious and unsatisfactory as was found from the reports of different financial institutions including that mis-management is the natural inference and the preamble read as a whole would indicate that the thought it appropriate to take over the management of Textile Undertakings in the public interest pending nationalisation of such undertaking and in this view of the matter was hyper-technical in recording a finding that even though the financial condition become wholly unsatisfactory but the failed to establish the mis-management of the undertaking which had brought the financial condition to such unsatisfactory stage and, therefore, by including the three mills in question in the group of 13 there has been violation of Article 14. The learned Solicitor General also seriously commented upon the conclusion of and submitted that committed error in assuming mis-management as fraud and such fraud has not been established by the . According to learned Solicitor General mis-understood the basis of the classification itself and taking an over all view of the financial position of these three the conclusion is irresistible that these three were rightly clubbed together with the group of 13 whose financial position was wholly unsatisfactory and government money was required to be pumped into it for making the mills viable and for effective running of the so that the large number of workers will not face the misery of closure of the . The learned Solicitor General also urged that in view of the prevailing situation in the 13 including the three with which we are concerned, in these appeals, the thought that only way to put the management on the wheels was to take over the management of the which is permissible in the larger public interest, as contained in Article 31A (1)(b) of the Constitution, and such ary wisdom cannot be scrutinised by the in a scale on the basis that certain reports might not have been placed before the or on the ground that factually the were not mis-managed and yet had sustained heavy financial loss and thereby putting them alongwith the group of 13 constitutes an infraction of Article 14 of the Constitution. According to the learned Solicitor General the burden being on a person who attacks the constitutionality on the grounds of discrimination the said burden cannot be held to have been discharged by the and committed serious error in annulling the taking over of the management of the three under the Act on the ground that failed to establish the relevant material before the . The learned Solicitor General also argued that Article 31(c) does apply to the legislation in question, and therefore, infraction of Article 14 or 19 should not have been gone into by the . ", "Mr. , learned senior counsel appearing for , emphatically urged that Article 31 A (1)(b) was introduced by the Constitution IVth Amendment Act of 1955 which enables to make law for taking over of the management of any property by the for a limited period either in the public interest or in order to secure proper management of the same. The law made by the is the Textiles Undertakings (Taking over of Management) Act , 1983. The said law permits take over only when the financial condition became unsatisfactory by reason of mis-management of the affairs of . And, this being the position, if there is no material to establish that financial losses is on account of mis-management then the taking over of the management of the mill by taking recourse to the impugned Act must be held to be invalid and in fact has held it to be invalid. According to Mr. mere losses will not entitle to take over of the management of mill, inasmuch as, all the mills have suffered loss and, therefore, there must be some other factors on account of which it will be possible for the Government to take over the management of only 13 mills as included in the First Schedule to the Act. He also further urged that in view of the language of Article 31A (1)(b) the law for taking over of the management must be for a limited period and the expression pending nationalisation in the impugned Act cannot be construed to be a definite limited period and, therefore, the Act in question is not referable to Article 31A (1)(b). It is in this connection he cited the decision of as well as the decision of in ILR 74 (1) Delhi 311 and also a decision of in AIR 1977 A.P. 420. Mr. also argued that in the impugned Act there is intrinsic evidence to indicate that the taking over of management was not for a limited period as it would be apparent from Sections 33 , 34 , 36 and Sections 6 , 8 and 11(1) , and essentially it constitutes acquisition and not take over of management for a limited period. Mr. also urged that the legislative declaration of facts are not beyond judicial scrutiny in the constitutional context of Articles 14 and 16 and the can always tear the veil to decide the real nature of the statute if the facts and circumstances warrant such a course. A mere declaration in the legislation would not be permissible so as to defeat the fundamental right. If the legislation in question was merely a pretence and the object was discrimination the validity of the statute could be examined by the notwithstanding the declaration made by the legislature and, therefore, was fully justified in examining the facts and coming to the conclusion that in grouping the three mills alongwith other 13 mills for the purpose of taking over the management constitutes an infraction of Article 14 of the Constitution. In support of this contention he places reliance on the decision of this in (2000) 1 Supreme Cases 168. Mr. R.F. , learned senior counsel pursued the arguments advanced by Mr. and contended that the classification itself may be valid but while choosing the mills to be included in such classification and clubbing within the group of 13 is discriminatory in as much as a well managed mill is being clubbed with a mis- ", "managed mill. According to Mr. categorisation of the mill as a mis-managed mill is contrary to the facts available on record, and as such, it violates Article 14. Mr. also further urged that a machinery available under IDR Act for an inquiry not having been resorted to it contravenes Article 19(1)(g). According to learned counsel the chose to adopt a procedure without any urgency being there and without any machinery to look into the facts on the basis of which categorisation could be made, the classification is bad in law. Mr. also contended that in view of Article 300A the law must be reasonable and fair and in view of the judgment of this Court in of Bombay vs,. and others 1954 Reports 674, the impugned action is bad in law. Mr. RF also contended that it was open for the Writ Petitioners to place and establish that the legislative facts are incorrect and in fact the petitioners have discharged that burden by placing materials on record and , therefore, was fully justified in arriving at its decision on the materials produced. He placed reliance on the decision of this Court in (1996) 2 Cases 226 in support of aforesaid contention. According to Mr. the following facts establishes that the Elphinstone Mill was not a mis-managed mill and erroneously clubbed the same with other mis- managed mills. Those facts are :- (a) viability study report (b) Task Force Report (c) Approval of the Central Government itself to appoint a Managing Director (d) Sanction of loan by AND in September 1993 (e) No investigation done under Section 15 and 15(a) of IDR Act, and (f) No action of any kind under the provisions of Companies Act , and on this score the conclusion of is unassailable. ", "Mr. , learned counsel appearing for contended, that itself has given a positive finding on the basis of the materials those have been produced that the performance of the mill; was good. Even the Counter Affidavit of the Union Government before does not indicate that the performance of the New City Mill was in any way made out a case of mis- management. The analysis of Mr. , the letter of dated 23rd March, 1983 and the very clearly demonstrates that the New City Mill was not at all a mis-managed mill and these materials could be looked into by the when the Mill itself had alleged discrimination under Article 14. In support of this contention he places reliance on the decision of this in 1990(4) Supreme Cases 366 and 1978 Supreme Cases 248. Mr. also placed reliance on the decision of this in 1950 Supreme Reports 869 and submitted that in that case the did go into the materials and came to the conclusion about the mis-management and, therefore, in the case in hand was fully justified in interfering with the order of taking over qua New City Mill. ", "Ms. , learned senior counsel appearing for the workers of the supported the stand taken by the learned Solicitor General and placed before us different materials on record to establish the mis-management of the mills concerned. ", "In view of the rival submissions the following questions arise for our consideration:- ", "1. Can the impugned Act be held to be a law providing for the taking over of the management of the Mills for a limited period? 2. The Act read as a whole expresses the intention of the for taking over the management of the Textile Undertakings specified in the First Schedule in the public interest or is it capable of indicating the legislative intent that only those Mills whose financial condition became wholly unsatisfactory by reasons of mis-management of the affairs of the Textile Undertakings which are sought to be specified in the First Schedule and management of those Mills are being taken over under the Act? 3. Has any case been made out by the Mills concerned to enable a Court that in fact by clubbing the three Mills in the group of 13 there has been the violation of the mandate under Article 14? 4. Was justified in recording a conclusion that there has been a violation of Article 19(1)(g)? 5. On the available materials on record was justified in going behind the legislative intent apparent on the face of the Act to find out the so called true intention and thereby coming to the ultimate conclusion that there has been a gross discrimination in clubbing the three mills with the other admitted mis-managed mills which are enumerated in the Schedule to the Act? ", "But before examining the aforesaid questions it would be appropriate for us to notice the legal position on certain general principles relating to the challenge of a statute in the anvil of Articles 14 and 19 and the parameters of jurisdiction to examine materials for arriving at the legislative intent behind a statute as well as the presumption of constitutionality of a statute. ", "A statute is construed so as to make it effective and operative. There is always a presumption that the legislature does not exceed its jurisdiction and the burden of establishing that the legislature has transgressed constitutional mandates such as, those relating to fundamental rights is always on the person who challenges its vires. Unless it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits laid down by the organic law of the constitution it must be allowed to stand as the true expression of the national will ", "- vs. (1931) AC 275 (). The aforesaid principle, however, is subject to one exception that if a citizen is able to establish that the legislation has invaded its fundamental rights then the must justify that the law is saved. It is also a cardinal rule of construction that if one construction being given statute will become ultra vires the powers of the legislature whereas on another construction which may be open, the statute remains effective and operative then the will prefer the latter, on the ground that the legislature is presumed not to have intended an excess of jurisdiction. (1983) 1 Supreme Cases 147, the speaking through , had observed, in the context of interpretation of the provisions of Coking Coal Mines (Nationalisation) Act , 1972 that the is not concerned with the statements made in the Affidavits filed by the parties to justify and sustain the legislation. The deponents of the affidavits filed into the court may speak for the parties on whose behalf they swear to the statements. They do not speak for the . No one may speak for the and is never before the court. After has said what it intends to say, only the court may say what the meant to say. None else. Once a statute leaves House, the is the only authentic voice which may echo the . This the will do with reference to the language of the statute and other permissible aids. The executive Government may place before the court their understanding of what has said or intended to say or what they think was s object and all the facts and circumstances which in their view led to the legislation. When they do so, they do not speak for . No Act of may be struck down because of the understanding or misunderstanding of parliamentary intention by the executive Government or because their spokesmen do not bring out relevant circumstances but indulge in empty and self-defeating affidavits. They do not and they cannot bind . Validity of legislation is not to be judged merely by affidavits filed on behalf of the , but by all the relevant circumstances which the court may ultimately find and more especially by what may be gathered from what the legislature has itself said. In the facts of that case the had held that We do not entertain the slightest doubt that the nationalisation of the coking coal mines and the specified coke oven plants for the above purpose was towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and there has been no discrimination or infringement of Article 14 of the Constitution in his separate judgment also agreed with the ultimate conclusion of , J and had said that there was logical basis for the nationalisation of the 4 oven plants of the petitioners, leaving out a few and I am not satisfied that there has been any wrong and arbitrary discrimination of Article 14 of the Constitution. While examining the constitutional validity of the special courts bill in the anvil of Article 14 of the Constitution, after an exhaustive review of all the decisions bearing on the question, in 1979(1) S.C.C. 380, it was held as follows:- ", "(3) The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary. (4) The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same. x x x x x x x x x (6) The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience. It can recognise even degree of evil, but the classification should never be arbitrary, artificial or evasive. (7) The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act. ", " (1988) 2 Cases 299, the had observed that when the constitutionality of a legislation is being assailed before a it is the collective will of the with which the is concerned. No officer of the department can speak for the . The interpreter of the statute must take note of the well known historical facts. In conventional language the interpreter must put himself in the armchair of those who were passing the Act i.e. the Members of the . It is the collective will of the with which we are concerned. The aforesaid observation had been made in the context of an argument sought for by the petitioner for production of certain documents to ascertain the question whether the shares vested in the or not? ", "In Bearer Bonds case (1981) 4 Cases 675, this held that it is a rule of equal importance that laws relating to economic activities should be viewed with greater latitude than law touching civil rights, such as freedom of speech, religion etc. The observed that :- ", "It has been said by no less a person than , J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in v. (354 US 457:1 L Ed 2d 1485 (1957) where , J. said in his intimitable style: ", "In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events self- limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. ", "The must always remember that legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstrct propositions and do not relate to abstract units and are not to be measured by abstract symmetry; that exact wisdom and nice adaption of remedy are not always possible and that judgment is largely a prophecy based on meagre and uninterpreted experience. Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme in Secretary of v. (94 L Ed 381: 338 US 604 (1950)) be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. ", " ., 1959, S.C.R., 279, this Court held: ", "(a) xxxxxxx xxxxxxxx (b)that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c)that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; (d)that the legislature is free to recognise derees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. ", "In the case of ., 1975(4) S.C.C., 754, this Court held: ", "The preamble provides the key to the general purpose of the Act. That purpose is the regulation of certain payments, dealings in foreign exchange and securities and the import and export of currency and bullion in the economic and financial interest of India. The general purpose or object of the Act given in the preamble may not show the specific purpose of the classification made in Section 23(1)(a) and Section 23(1A) .The has therefore to ascribe a purpose to the statutory classification and co-ordinate the purpose with the more general purpose of the Act and with other relevant Acts and public policies. For achieving this the may not only consider the language of Section 23 but also other public knowledge about the evil sought to be remedied, the prior law, the statement of the purpose of the change in the prior law and the internal legislative history. When the purpose of a challenged classification is in doubt, the court attribute to the classification the purpose thought to be most probable. Instead of asking what purpose or purposes the statute and other materials reflect, the may ask what constitutionally permissible objective this statute and other relevant materials could plausibly be construed to reflect. The latter approach is the proper one in economic regulation cases. The decisions dealing with economic regulation indicate that courts have used the concept of purpose and similar situations in a manner which give considerable leeway to the . This approach of judicial restraint and presumption of constitutionality requires that the is given the benefit of doubt about its purpose. How far a court will go in attributing a purpose which though perhaps not the probable is at least conceivable and which would allow the classification to stand depends to a certain extent upon its imaginative power and its devotion to the theory of judicial restraint. ", "The further held: ", "It would seem that in fiscal and regulatory matters the not only entertains a greater presumption of constitutionality but also places the burden on the party challenging its validity to show that it has no reasonable basis for making the classification. ", "The Legislation in a modern State is actuated with some policy to curb some public evils or to effectuate some public benefit. The Legislation is primarily directed to the problems before the legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But from the very nature of things, it is impossible to anticipate fully, the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite reference are bound to be in many cases, lacking in clarity and precision, and thus giving rise to the controversial question of construction. Bearing in mind the aforesaid general principles, let us now examine the five questions formulated earlier. ", "Coming to the first question, the contention of the Companies, who were the petitioners before is that under Article 31A(1)(b ), a law providing for 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, cannot be assailed on the ground of violation of Article 14 or 19 but the impugned ordinance and the Act cannot be held to be a law for providing for taking over of the management for a limited period, even though, the same may be in the public interest and as such, such a law cannot be held to be immune from attack being violative of Article 14 or 19 within the ambit of Article 31A(1)(b) of the Constitution. According to the learned counsel, appearing for these textile mills, the expression for a limited period as a definite connotation and the impugned legislation being a law until the acquisition proceedings are over, cannot be held to be a law for a limited period. This argument found favour with and following the decision of this in case, held that the legislation in question cannot be held to be within the purview of Article 31A(1)(b) of the Constitution. Mr. , the learned Solicitor General, appearing for contended before us that it is the usual pattern of taking over of such undertaking to take over the management, immediately by a law made by the appropriate legislature and since it was apparent at the time of enactment of the law that the taking over of the management is pending nationalisation which had been embodied in the legislation itself, such take-over of the management must be held to be for a limited period and the observations of this in Raman lal, must be construed in the context of the facts of the said case and will have no application to the facts and circumstances of the present case. According to the learned Solicitor General, the legislature on being satisfied about the financial instability of the mills and further substantial sum of money required to be pumped into the mills for running of the same, so that large number of employees will not be kept out of employment, it was necessary in the public interest to take over the management immediately, inasmuch as the process of nationalisation will take sometime, the conclusion is irresistible that the so-called taking over was for a limited period and not for ad infinitum, and is intended to over-come a particular crisis. That being the position, committed error in recording a finding that the taking over of the management was not for a limited period. ", "Mr. , the learned senior counsel, appearing for one of the mills, on the other hand contended that the expression pending nationalisation, by no stretch of imagination can be held to be a definite period and this has been answered directly in the case of and . Vs. Union of India and ., Indian Law Reports(Delhi) 1974(1) Page 311, as well as of Andhra Pradesh in Full Bench decision of ., AIR 1977, Andhra Pradesh, Page 420, following the decision of this in lal, 1969(1) S.C.R., 42. According to Mr. , there is intrinsic evidence in the impugned Act itself that the so-called taking-over was not for a limited period, as is apparent from examining Sections 3(3) , 3(4) , 3(6) , Section 6 , Section 8 and Section 11(1) of the Act. The Counsel further urged that the Act is in essence one for acquisition and not for taking over of management for a limited period and consequently, the challenge on the ground of Article 14 and 19 will get attracted, as the law does not come within the purview of Article 31A(1)(b) of the Constitution. Article 31A was introduced by the Constitution (First Amendment)Act, 1951 to validate the acquisition of Zamindari and the abolition of Permanent Settlement without interference from s. The further amendment of the Constitution was made by (Fourth Amendment) Act of 1955 with the object that items of agrarian and social welfare legislation, which affect the proprietary rights, should be kept out of the purview of Articles 14, 19 and 31. Clause (b) of Article 31A(1) provides for taking over the management of any property, movable or immovable, agricultural or non-agricultural for a limited period without being obliged to justify its action in a of law, with reference to Article 14 or 19. The necessary conditions for application of sub-clause (b), therefore are that the taking over in question must be for a limited period, as distinguished from any indefinite period and such taking over must be either in the public interest or in order to secure the proper management of the property, which of course require to be objectively established. That the facts and circumstances leading to the taking over of the management of the sick mills undoubtedly indicated that the same was in the public interest, but the only question remains to be answered is whether it can be said to be for a limited period. In case, 1969 (1) S.C.R., 42, the provisions of Bombay Tenancy and Agricultural Lands Act was under consideration before this . The said Act had been amended by Bombay Act 13 of 1956, which confers the power on the State Government to take over the management of any land on the ground that full and efficient use of the land had not been made for the purposes of agriculture and under the Act, it was contemplated that the land taken over could be returned to the land holder under certain contingencies. This considering the provisions of the Act and the rules made thereunder, came to the conclusion that even though there may be a possibility of return of the land to the original owner but that does not satisfy the requirement of Article 31A(1)(b ), as the taking-over of the management was not for a limited period. The held that the scheme of the Act ought to have shown the limit of the period for which the management is being taken over and consequently, the protection of Article 31A(1)(b) cannot be invoked as the limit for the period of management had not been indicated. Having examined the ratio of the aforesaid decision to the case in hand, we are not in a position to hold that the taken over of the management in the present case was not for a limited period . The Act itself stipulates that the management of the mill is being taken over pending nationalisation of the mill, therefore, the decision to nationalise the mills had already been taken. But as the process of nationalisation would take a considerable period and it was thought absolutely necessary in the public interest to take over the management of the mills immediately, the passed the impugned legislation. In our considered opinion the context in which the observations have been made by this in lals case, referred to supra, will have no application to the case in hand and it must be construed that the management of the property in the present case by virtue of the ordinance and the Act was for a limited period, the period being till the process of nationalisation is finalised. It is to be noticed that , which was also one of the mills in category III and had been put in Group II by , whose management had been taken over under the provisions of Textile Undertakings (Taking over of Management) Act , 1983 had approached and had upheld the action of taking over but had held that the surplus lands appurtenant to the mills would not vest under sub-section (2) of Section 3 of the Act, but this had reversed the said decision and had held that the surplus lands appurtenant to the mill did form a part of the assets in relation to the textile undertaking within the meaning of Section 3(2) of the Act and the said land was held for the benefit of, and utilised for the textile mill in question. Before this , it is true that the question of applicability of Article 31A(1)(b) had not cropped up for consideration, but yet certain observations of this in the aforesaid case would be appropriate to be quoted:- ", "There can be no doubt that the legislative intent and object of the impugned Act was to secure the socialisation of such surplus lands with a view to sustain the sick textile undertakings so that they could be properly utilised by the for social good i.e. in resuscitating the dying textile undertakings. Hence, a paradoxical situation should have been avoided by adding a narrow and pedantic construction of a provision like sub- section(2) of Section 3 of the Act which provides for the consequences that ensue upon the taking over in public interest of the management of a textile undertaking under sub-section(1) thereof as a step towards nationalisation of such undertakings, which was clearly against the national interest. In dealing with similar legislation, this has always, adopted a broad and liberal approach. ", "What has been observed above, while interpreting sub- section (2) of Section 3 , should be borne in mind also while interpreting the expression for a limited period used in Article 31A(1)(b) and in our view the construction to the aforesaid expression made by in its Judgment in Vs. Union of India and ., I.L.R.(Delhi) 1974(1) 311, as well as the Bombay High Court in the impugned judgment, cannot be accepted. has no doubt in The case, considered the applicability of Article 31A(1)(b) and held that taking over of the management, pending nationalisation cannot be held to be for a limited period, since there is no question of returning the property to the old management, but we are unable to accept this view of and we hold that the views expressed therein are not correct in law. Having regard to the conditions of these mills at the time of taking over of the management and having regard to the decision of on the basis of data and materials to nationalise the mills falling under category III and the ultimate policy decision of the to achieve the process of nationalisation in two stages, first by taking over the management of the textile undertakings and thereafter, enact suitable legislation to nationalise the same, the ultimate legislation for taking over the management of the mills passed by the , cannot but be held to be a law, providing for taking over of the management for a limited period in public interest and as such the said law comes within the purview of Article 31A(1)(b) of the Constitution. Once it is held that the law is one attracting Article 31A(1)(b) of the Constitution, then the validity of the said law cannot be assailed on the ground of violation of Articles 14 and 19 of the Constitution. But since elaborate arguments had been advanced, we would also examine the other questions posed by us. 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Thereafter examined different affidavits and materials and came to the conclusion that the question of management of the mills had no where been discussed or dealt with either directly or indirectly and that the existence of bad financial condition was in fact a general phenomena during the said period amongst in Bombay and the same by itself anything more could not have been an indication of bad/inadequate management. In paragraph 180 of the impugned judgment came to the conclusion that the Government, therefore, could not have, for taking over the management of the said , relied on the said for classifying the petitioners as mills whose financial condition was bad due to mis- management. In paragraph 203 of the impugned judgment the learned Judges came to the ultimate conclusion : ", "In our view, therefore, all the circumstances mentioned above by the learned counsel for do not bring out either directly or inferentially any mis-management on the part of the petitioner company, but on the contrary the fact that the said circumstances existed even in case of some of and I Mills show that the Government could not have considered the said circumstances for concluding that the said were mismanaged or their financial condition was wholly unsatisfactory by reason of such mismanagement. ", "The learned Judges then held that there was no nexus between the main object or purpose of the Act to take over the management of only those whose financial condition before strike was wholly unsatisfactory by reason of mis-management., and as such, the rights of the under Article 14 of the Constitution has been violated. At the outset it may be stated that committed serious error in recording a finding that the preamble and other provisions of the Act go to show that in the context of things the term mis-management has been used to mean mis- management having an element of fraud or dishonesty. We have examined the impugned Act carefully and we fail to understand that how could come to a conclusion that the expression mis-management has been used to indicate an element of fraud and dis-honesty whereas in fact neither the provisions of the Act nor the object or preamble have indicated any such intention. While examining a particular statute for finding out the legislative intent it is the attitude of judges in arriving at a solution by striking a balance between the letter and spirit of the statute without acknowledging that they have in any way supplement the statute would be the proper criteria. The duty of judges is to expound and not to legislate is a fundamental rule. There is no doubt a marginal area in which the courts mould or creatively interpret legislation and they are thus finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing. (see: vs. (1968) 3 WLR 714, p.732, 1975 (2) SCC 810). But by no stretch of imagination a Judge is entitled to add something more than what is there in the Statute by way of a supposed intention of the legislature. It is, therefore, a cardinal principle of construction of statute that the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed. Applying the aforesaid principle we really fail to understand as to how the learned judges of could come to a conclusion that the mismanagement must necessarily mean an element of fraud or dishonesty. Courts are not entitled to usurp legislative function under the disguise of interpretation and they must avoid the danger of determining the meaning of a provision based on their own preconceived notions of ideological structure or scheme into which the provision to be interpreted is somehow fitted. Caution is all the more necessary in dealing with a legislation enacted to give effect to policies that are subject to bitter public and parliamentary controversy for in controversial matters there is room for differences of opinion as to what is expedient, what is just and what is morally justifiable; it is the s opinion in these matters that is paramount. (see; vs. Sirs, (1980) 1 All ER 529 at 541. When the question arises as to the meaning of a certain provision in a Statute it is not only legitimate but proper to read that provision in its context. The context means; the statute as a whole, the previous state of law, other statutes in pari materia, the general scope of the statute and the mischief that it was intended to remedy. An Act consists of a long title which precedes the preamble and the said long title is a part of an Act itself and is admissible as an aid to its construction. It has been held in several cases that a long title along with preamble or even in its absence is a good guide regarding the object, scope or purpose of the Act whereas the preamble being only an abbreviation for purposes of reference is not a useful aid to construction. The preamble of an Act, no doubt can also be read along with other provisions of the Act to find out the meaning of the words in enacting provisions to decide whether they are clear or ambiguous but the preamble in itself not being an enacting provision is not of the same weight as an aid to construction of a Section of the Act as are other relevant enacting words to be found elsewhere in the Act. The utility of the preamble diminishes on a conclusion as to clarity of enacting provisions. It is therefore said that the preamble is not to influence the meaning otherwise ascribable to the enacting parts unless there is a compelling reason for it. If in an Act the preamble is general or brief statement of the main purpose, it may well be of little value. , J. had observed in - AIR 1961 SC 954, It is one of the cardinal principles of construction that where the language of an Act is clear, the preamble must be disregarded though, where the object meaning of an enactment is not clear the preamble may be resorted to explain it. Again where very general language is used in an enactment which, it is clear must be intended to have a limited application, the preamble may be used to indicate to what particular instances, the enactment is intended to apply. We cannot, therefore, start with the preamble for construing the provisions of an Act, though we could be justified in resorting to it nay we will be required to do so if we find that the language used by is ambiguous or is too general though in point of fact intended that it should have a limited application. In Coal Bearing Areas (Acquisition and Development) Act 1957 the Court was construing a Notification issued under Section 4(1) of the said Act and as in the present case the preamble of that Act was to the effect An Act to establish in the economic interest of India greater public control over the coal mining industry and its development by providing for the acquisition by the of unworked land containing or likely to contain coal deposits or of right in or over such land, for the extinguishment or modification of such rights accruing by virtue of any agreement, lease license or otherwise, and for matters connected therewith. Repelling an argument advanced on behalf of the Mine owners that the Act intended to apply only to virgin land and not on the land which are being worked or were worked in the past because of the use of the words unworked land in the preamble, this Court held that the language of the enacting provisions was clear and therefore not controlled by the preamble. (see; Vs. AIR 1961 SC 954 at p. 957). This being the position, and the Textile Undertakings Taking Over of the Management Act, 1983, being an Act providing for taking over in the public interest of the Management of Textile Undertakings of the Companies specified in the First Schedule pending nationalisation of such undertakings and for matters connected therewith or incidental thereto as is apparent from the long title, use of the expression mis-management of the affairs in the preamble will not control the purpose of the Act, namely, the public interest and the having decided to take over the management of the Textile which were in serious financial crisis, in the public interest it was not open for the Court to come to a conclusion by taking recourse to the use of the word mis-management in the preamble to hold that the intended only to take those whose financial condition was deplorable on account of mismanagement and not in case of those mills where the financial condition may be deplorable but not on account of mis-management. ", "Mr. , learned senior counsel had strongly relied upon the decision of this in Madras Race case 1996 (2) , 226, whereunder the struck down the provisions of Madras Race (Acquisition and Transfer of Undertakings) Act , 1986, on a conclusion that the declaration made in the Act that the Act was made to implement Article 39 (b) & (c) was a mere cloak and there was no nexus between the Act and the objects contained in Article 39 (b) & (c ), and as such the Act is arbitrary. But a reading of the aforesaid case would make it clear that the facts and features of that case were completely different from the facts and features of the present case. In the Madras case the objects and reasons, as indicated in the Act, was that the acquisition is for a public purpose but in fact there was no material to show that any inquiry or investigation had been held by in the affairs of the and the held that no public purpose is being served by the acquisition and transfer of the undertaking of the by the . But in the case in hand, as has been noticed by this in Sitaram Mills Case, the had before it several viability surveys made by different authorities like, , , and and an independent survey by the itself. These surveys had been directed in ascertaining whether companies textile undertaking was a techno economically viable unit or not and whether it was desirable to provide the company with the working capital. The in had constituted to look into the affairs of the Category III strike affected mills. On the basis of all these informations it was decided as a matter of policy that it was desirable to achieve the process of nationalisation, initially by taking over the management of the mills and thereafter by enacting suitable legislation to nationalise the same. The objects and reasons of the Act unequivocally indicated that the basic decision of nationalisation having been taken a genuine apprehension having arisen in the s mind that unless the management of the concerned undertakings was taken over on immediate basis, there might be large scale flittering away of assets which would be detrimental to the public interest and it thus became urgently necessary for to take over the management of the undertakings in the public interest. In this state of affairs, we have no doubt in our mind that the decision in Madras Race case will have no application to the case in hand. ", "In our considered opinion the impugned Act read as a whole unequivocally indicates that the was satisfied that the management of the Textile Undertakings specified in the First Schedule should be taken over pending nationalisation of such undertakings, and therefore, passed the impugned Act in public interest. ", "So far as third question is concerned, we think it appropriate to discuss the same alongwith Fifth question as they are inter-linked. In the case in hand appears to have examined in detail the functioning of each of these three mills which had filed Writ Petition before it, for ascertaining whether the financial conditions of those mills had deteriorated because of the strike or on account of mis- management and on scrutiny of different materials came to hold that has failed to establish the case of mis-management which in turn would mean a case of fraud and dishonesty on the part of those who were in management of the mills. We have already indicated that the legislature nowhere expressed that fraud or dishonesty on the part of those who were in management of the mills had brought the mills to the acute financial crisis. That apart, when an Act has been made by the as the thought the taking over of the management of the 13 Textile Mills pending their nationalisation would be in the public interest, it was not open for a in exercise of its power of judicial review to have in depth examination of different facts and circumstances and record a conclusion, as has been done in the case in hand by concerned. It is of course true, as held by this in the case of (2000) 1 Supreme Cases 168, that the legislative declaration of facts are not beyond judicial scrutiny in the constitutional context of Articles 14 and 16. In case this had also observed that the s could lift the veil and examine the position inspite of a legislative declaration. In case (supra) the was examining whether the Appropriate Authorities have rightly determined the persons to be included in the creamy layer or whether such determination has been arbitrarily made. These principles will have no application to a legislation of the present nature where the itself had already taken a decision to nationalise the Textile Mills which had undergone severe financial crisis and such mills could not be re-started without pumping in large amount of money from the public exchequer and, therefore, the legislation in question was passed to take over the management of the mills immediately as such take over was in the public interest. The argument advanced on behalf of the mills and the microscopic examination of datas by the for arriving at a conclusion as to the alleged violation of Article 14 of the Constitution is not permissible and will not override the legislative intent behind taking over of management of the mills in the larger public interest. The conclusion of on the basis of the Viability Study Report, Report, approval of to the posting of a Managing Director and the sanction of loan by the financial institution by no stretch of imagination could out-weigh the conclusion of the legislature that the Act is intended to provide for the taking over of the management of specified in the First Schedule, pending nationalisation in the public interest. We are unable to agree with the arguments advanced on behalf of the counsel appearing for the respondents that by picking up the three mills who had approached and clubbing them together with other mills in the Fist Schedule the Government did not have germane considerations before it, in fact it is not the Executive Government but the itself had chosen to take over the management of the 13 mills included in the First Schedule to the impugned Act and for that purpose the impugned legislation was enacted and the management of the mills could be taken over by operation of law. As has been indicated in the judgment of this in the case of . 1986 (Suppl.) Supreme Cases 117, that the Textile Mills and in India has played an important role in the growth of national economy. Its importance in the industrial field is because of the fact that it produces an essential commodity and the export of such commodity helps in building up the foreign exchange reserve of the country, simultaneously the industry gives employment to a large number of persons. It is because of this consideration the Government has always been conscious that it is necessary to preserve such mills and assist them by granting necessary financial loans and advances from public financial institutions so that mills will not be close down but in the year 1983 because of an indefinite strike the financial condition was not satisfactory on account of lack of proper management. This had indicated that as the overall economic factors applicable to all Textile Mills in Grater Bombay were broadly and generally comparable the worker position of mills in question was attributable to mis- management. This had also taken note of the fact that was required to evolve a scheme to put on its rail and therefore after getting the matter investigated by committee and after recommending that and should finance and put through expeditiously, the re-habilitation programme and having accepted the categorisation made in the meeting called by on October 29, 1982, and having realised that none of the 13 mills in Category III could be expected to survive on a sound basis without financial assistance from the Government controlled Institutions and s and thereafter obtaining a detailed Viability Report from the and , which was constituted by the Government decided that the Mills in question should be re-habilitated by injecting public funds but since the management of the mills has been defective, in as much as had there been no mis-management the mills would not be found themselves in the conditions in which they were even before the general strike. As the matter of policy it was desirable to achieve the process of nationalisation in two stages (1) taking over of the management and (2) thereafter suitable legislation to nantionalise the same and the taking over of management was with a view to implement the decision of nationalisation. We have refrained from going into the details of the financial position of different mills which filed the Writ Petition in Bombay High in as much as the financial condition was such that it could not have revived without pumping in of large scale of money either from financial institutions or from the . The fact that in some of the Reports indicating viability of the mills on large scale money being pumped in would not in any way affect the ultimate conclusion of the in providing for a law to take over in the public interest the management of Textile Undertakings of the Companies specified in the First Schedule, as the danger of pumping in of large sum from the public exchequer without taking over the management of the mills would not have been a prudent action. As has been stated earlier, and as is apparent from the long title of the Act itself, that the decision to nationalise the mills had already been taken, but pending nationalisation the 13 mills in question including the mills of the three petitioners who filed Writ Petition Bombay High the management was taken over by the impugned legislation as otherwise there was imminent danger to the finance to be pumped in to the for its revival and revival was necessary to provide employment to the large number of mill workers. In the aforesaid premises, we have no hesitation to come to a conclusion on the materials on record the ary action in legislating the law and taking over of the management of all the 13 mills included in the First Schedule to the Act cannot be held to be discriminatory nor was justified in recording a conclusion about the true intention of the legislation that it is only the mis-managed mills whose financial condition had deteriorated, the management of those to be taken over and not others. On the other hand the sharp deterioration in the financial position lead to an irresistible conclusion that it was because of mis- management and nothing else and that is why in the preamble of the Act the legislature have indicated that the affairs of specified in the First Schedule on account of mis-management have become wholly unsatisfactory. In other words while the Act of taking over of the management of the mills was in the public interest, the inference of mis-management was the inference of the duly arrived at from the fact that the financial condition of the mills had become wholly unsatisfactory even before the commencement in January 1982 and such financial condition has further deteriorated thereafter. This inference of the is not subject to a mathematical judicial scrutiny and the way in which has gone into this question in the impugned judgment is certainly not within the para meters of the power of High under Article 226 of the Constitution. In our view was wholly in error in striking down the taking over of the three petitioners mills before it on a supposed violation of Article 14 of the Constitution. ", "So far as the fifth question is concerned, though it is no doubt true that the would be justified to some extent in examining the materials for finding out the true legislative intent, engrafted in a Statute, but the same would be done only, when the Statute itself is ambiguous or a particular meaning given to a particular provision of the Statute, it would make the Statute unworkable or the very purpose of enacting the Statute would get frustrated. But by no stretch of imagination, it would be open for a to expand even the language used in the preamble to extract the meaning of the Statute or to find out the latent intention of the legislature in enacting the Statute. As has been stated earlier, in the case in hand, the Taking over of Management Statute of 1983, had been engrafted in the public interest as the legislature found that there is imperative need to take over of the management of the companies until the process of nationalisation is finalised. This is apparent from the long title of the Act itself and the preamble also indicates that to make the mills viable, it would be necessary for the public financial institutions to invest very large sum of money, so that the mills will be rehabilitated and the interest of the workmen, employed therein would be protected. The preamble further indicates that the process of acquisition would take a longer time and to enable to invest large sum of money, it was necessary in the public interest to take over the management of the undertakings. Thus, the taking over of the management of the mills was in the public interest, the said public interest being to rehabilitate the mills by pumping in, huge sums of public money to protect the interest of the workers in the mills. The High in the impugned judgment, however gave a restricted meaning to the purpose of the act by interpreting the expression Mismanagement used in the first preamble to connote fraud and dis-honesty, and in our considered opinion, the High was wholly unjustified in going behind the apparent legislative intention as already stated and in coming to a conclusion which cannot be sustained either on the materials on record or applying the rules of interpretation of a Statute. The said conclusion of the High as to the spirit behind the Statute, therefore, cannot be sustained. ", "Apart from answering the five points, formulated by us, we may also deal with some other ancillary points, which have been raised in course of arguments. Mr. had argued on the basis of Article 300A of the constitution and relied upon the judgment of this Court in . 1954, S.C.R. 674, but we find from the impugned judgment that the said contention had not been pressed before and, therefore, we are not called upon to examine the contention to find out whether the Act can be held to be reasonable and fair. That apart, the impugned Act merely takes over the management of the property by a legislation permitted under Article 31A(1)(b) of the Constitution. This being the position, Article 300A will have no application. ", "Mr. also had raised a contention that the very fact that the other provisions, available under the Companies Act or under Industrial Development and Regulation Act had not been adhered to and a drastic step had been taken by immediately taking over of the management of the mills, would constitute an infraction of Article 19(1)(g) and in support of the said contention, reliance has been placed on the decision of this Court in the case of ., 1970(1) S.C.R., ", "156. In the aforesaid case, the was considering the validity of the notification issued by in canceling the confirmation of the bye-laws made by Jabalpur Municipality, in so far as the bye-laws relate to slaughter of bulls and bullocks. This had observed that the in considering the validity of the impugned law imposing a prohibition on the carrying on of a business or profession, attempt an evaluation of its direct and immediate impact upon the fundamental rights of the citizens affected thereby and the larger public interest sought to be ensured in the light of the object sought to be achieved, the necessity to restrict the citizens freedom, the inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public, the possibility of achieving the object by imposing a less drastic restraint, and in the absence of exceptional situations such as the prevalence of a state of emergency national or local or the necessity to maintain essential supplies, or the necessity to stop activities inherently dangerous, the existence of a machinery to satisfy the administrative authority that no case for imposing the restriction is made out or that a less drastic restriction may ensure the object intended to be achieved. It is these observations on which Mr. strongly relied upon , since in the case in hand, the appropriate did not take any action under the provisions of the Companies Act , nor there had been any investigation as provided under Section 15 and 15A of the Industrial Development and Regulation Act , according to Mr. , obviously, those provisions are less drastic in nature than the impugned Act and in fact, there was no urgent necessity for enacting a law and taking a drastic measure of taking over the management of the mills. We are unable to accept this contention, since we have already discussed the public interest involved and how the thought of taking over the management of the mills without which, it would not be feasible to pump in, large sums of money from the public exchequer and leave the management with the erstwhile managers for whose mismanagement, the mills would not have been in the situation in which the law was enacted. The decision to take over the management of the mills with a view to implement the decision to nationalise the mills being the basis for enactment of the Taking Over of the Management of the Mills Act, question of taking recourse to the remedies available under the Companies Act or Industries Development and Regulation Act really do not arise and on that score it cannot be said that there has been a violation of Article 19(1)(g). Applying the observations of this in , in fact a somewhat similar contention had been noticed in Sitaram Mills case in paragraph 14 of the judgment. We are, therefore, unable to persuade ourselves to accept the contention that the very fact that did not proceed with the remedies available under other Act and proceeded to enact a legislation for taking over of the management of the Mills would constitute an infraction of Article 19 (1)(g) of the Constitution. We may reiterate that we are examining the enactment of a law by the itself and the wisdom of the in taking a decision to take over the management of the mills in the larger public interest and not an executive decision of the which could have taken recourse to some other remedial measure provided under the Industries Development and Regulation Act or the Companies Act . If decides to enact a law for taking over the management of , pending completion of the process of nationalisation, on a genuine apprehension that there might be a large scale flittering away of assets if the management is not taken over and that would be grossly detrimental to the public interest it would not be open for the to examine the question whether other remedies could have been taken and not being taken there has been an infraction of Article 19(1)(g). In the aforesaid premises, we have no hesitation in coming to the conclusion that the High was in error to hold that there has been an infraction of Article 19(1)(g) in the case in hand. ", "In view of our conclusions, as aforesaid, we do not propose to examine the contention of the learned Solicitor General, with regard to the applicability of Article 31C of the Constitution, which he had raised in course of his arguments. In the premises, these appeals are allowed. The impugned judgment of is set aside and the writ petitions, filed before the stand dismissed. ", "During the pendency of these appeals this Court had passed some interim orders with regard to possession of certain land and other assets as well as with regard to cars and telephone connections. In view of our decision setting aside the impugned judgment of and in view of Section 3(2) of the Act all interim orders would stand vacated. But in its Writ Petition No. 2401 of 1983 having made a specific case that notwithstanding the Act being valid and the management of the mills can be taken over and its properties and assets vest with under Section 3(2) of the Act, but there are certain other assets which cannot be held to form a part of the assets of and, therefore, cannot be taken over, has not considered this question as the Act itself was struck down but it would be meet and proper for now to consider the same, bearing in mind the law laid down by this Court in case interpreting the provisions of Section 3(2) of the Act on the materials to be produced by the parties. Be it stated that until a decision is given by on this score, by virtue of operation of law all the assets would stand vested and such vesting would be subject to a final decision of in respect of any of these so-called assets which the petitioner establishes not to be an asset of notwithstanding the wider meaning given to Section 3(2) in case. ", "...............................................)"], "relevant_candidates": ["0000004354", "0000320809", "0000516439", "0000611866", "0000685234", "0000785119", "0000849101", "0001061804", "0001195357", "0001248365", "0001363234", "0001489649", "0001531491", "0001766147", "0001849054", "0001880952"]} {"id": "0000037174", "text": ["REPORTABLE THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1975 OF 2008 .... Appellant Versus State of Maharashtra and Ors. .... Respondents with CIVIL APPEAL NO. 1976 OF 2008 with CIVIL APPEAL NO. 1977 OF 2008 JUDGMENT ", "Dr. , J. ", "INTRODUCTION ", "1. This matter concerns an assortment of questions regarding the interpretation and constitutionality of certain provisions of the Maharashtra Control of Organized Crime Act, 1999, and as such calls for our utmost attention, particularly in view of the fact that, this legislation, although widely used for maintaining law and order, has also generated some controversy alleging its sweeping powers. ", " ", "2. Since its enactment in 1999, it has found favour with the law enforcement officials and has been enthusiastically applied wherever possible by the law enforcement agencies and the concerned . ", " ", "3. These three appeals have been filed by the appellants herein to assail the common judgment and order dated 19.07.2007 rendered by at Bombay in Writ Petition No. 1136 of 2007, whereby dismissed the Writ Petition filed by the appellants herein. ", " ", "4. The appellants herein challenged before , the constitutional validity of that part of Section 2(1)(e) of the Maharashtra Control of Organised Crime Act, 1999 (\"MCOCA\" hereinafter) which refers to `insurgency'. ", " ", "5. Before we proceed to discuss and deal with the issue at hand, it will be prudent to address an issue that goes to the very root of the jurisdiction of this to entertain the present appeal. The constitutional validity of the said provision of the had earlier been under the scrutiny of this in the case of (2008) 13 SCC 5. The aforesaid case arose against the judgment of dated 05.03.2003 in Crl. WP Nos. 27 of 2003, 1738 of 2002 and 110 of 2003, whereby negated the contention of the petitioners therein that Section 2 (1)(e) was violative of Article 13 (2) and Article 14 of the Constitution of India. In the said case, no appeal was filed against the said finding of upholding the constitutional validity of Section 2 (1)(e) of the . However, since the said issue was raised before this during the course of arguments in the said case, this on a conjoint reading of the said provision with the object and purpose of the held that there is no vagueness in the provision and the same also does not suffer from the vice of class legislation. The said finding of this in the said case as enumerated, in paras 29 and 30, is as follows: - \"29. In addition, Mr. Counsel for the Respondent No. 3 submitted that Section 2 (d), (e) and (f) and Sections 3 and 4 of the are constitutionally invalid as they are ultra virus being violative of the provisions of Article 14 of the Constitution. But we find that no cross appeal was filed by any of the respondents against the order of upholding the constitutional validity of provisions of Section 2(d), (e) and (f) and also that of Sections 3 and 4 of the . During the course of hearing, Mr. , the counsel appearing for one of the respondents herein tried to contend that the aforesaid provisions of Section 2(d), (e) and ", "(f) of the MCOCA are unconstitutional on the ground that they violate the requirement of Article 13(2) of the Constitution and that they make serious inroads into the fundamental rights by treating unequals as equals and are unsustainably vague. Since such issues were not specifically raised by filing an appeal and since only a passing reference is made on the said issue in the short three page affidavit filed by the respondent No. 3, it is not necessary for us to examine the said issue as it was sought to be raised more specifically in the argument stage only. ", "30. Even otherwise when the said definitions as existing in Section 2(d), (e) and (f) of the MCOCA are read and understood with the object and purpose of the Act which is to make special provisions for prevention and control of organised crime it is clear that they are worded to subserve and achieve the said object and purpose of the Act. There is no vagueness as the definitions defined with clarity what it meant by continuing unlawful activity, organised crime and also organised crime syndicate. As the provisions treat all those covered by it in a like manner and does not suffer from the vice of class legislation they cannot be said to be violative of Article 14 of the Constitution.\" Thus, in the said case there was no specific challenge to the constitutional validity of Section 2(1)(e) of the MCOCA. Moreover, even in its observations, this had not gone into the question of constitutional validity of the said provision, so far as it relates to insurgency on the ground of lack of legislative competence. ", "6. We may also refer to the findings of this Court in a situation of this nature, where once the constitutional validity of a provision has been upheld and the same is again challenged on a ground which is altogether different from the earlier one. .) and Ors. [(1989)1SCC272] notwithstanding the fact that of this Court had once upheld the constitutionality of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971, the petitioner therein had renewed his challenge on the ground that the did not have the legislative competence to legislate on the subject of the said legislation. On the facts before it, this Court held that since that specific aspect had not been debated before in the earlier case, it would not be appropriate to shut out the petitioner from raising the plea by recourse to the argument that the point had been concluded in the earlier case regardless of whether the matter had been debated or not. ", " ", "7. In the later judgment in , [], a larger Bench of this Court emphasized the binding nature of the judgments of this Court in the light of Article 141 of the Constitution and has held that the binding effect of a decision of this Court does not depend upon whether a particular argument was considered or not, provided the point with reference to which the argument is subsequently advanced was actually decided in the earlier decision. ", " ", "8. However, since there was no specific challenge before this to the constitutional validity of Section 2(1)(e) of the and the point with reference to which the arguments were advanced in the present appeal was actually not decided in the earlier decision of this , we wish to proceed to examine the same. ", "9. The appellants have challenged the constitutional validity of Section 2(1)(e) of the MCOCA, so far it relates to `promoting insurgency' on following two grounds:- ", " ", "(a) the Maharashtra State legislature did not have legislative competence to enact such a provision; and ", "(b) the part of Section 2(1)(e) of the MCOCA, so far as it covers case of `insurgency', is repugnant and has become void by enactment of the Unlawful Activities (Prevention) Amendment Act , 2004, amending the Unlawful Activities (Prevention) Act , 1967. ", " ", "10.The learned senior counsel appearing for the parties have advanced elaborate arguments before us on the aforesaid issues. ", "11.Mr. , learned senior counsel appearing for the appellant in Civil Appeal No. 1975 of 2008 submitted that `insurgency' is an offence falling within the ambit of Defence of India, Entry 1 of List I i.e., the Union List, as it threatens the unity, integrity and sovereignty of India and, in any event, under the residuary power conferred on the under Article 248 read with Entry 97 of the Union List and, therefore, the Maharashtra State legislature did not have legislative competence to enact the latter part of Section 2 (1)(e) of the MCOCA which relates to `promoting insurgency'. Hence, according to him, that part of Section 2(1)(e) of the MCOCA which refers to `promoting insurgency' is ultra vires Article 246(3) of the Constitution. ", "12.Mr. , learned senior counsel appearing for the appellant in Civil Appeal No. 1977 of 2008, in addition to the above noted submission, submitted that Section 2(1)(e) of the so far as it covers `insurgency' is repugnant and has become void by enactment of the Unlawful Activities (Prevention) Amendment Act , 2004, amending the Unlawful Activities (Prevention) Act , 1967 (\"\" hereinafter). He submitted that insurgency and terrorism are two sides of the same coin and after the 2004 amendment, the exhaustively deals with the offence of terrorism and the meaning of the term insurgency as contained in Section 2 (1)(e) of the is very well included in the definition of `terrorist act' as contained in Section 15 of the . He further submitted that due to the said anomaly, an act would constitute an offence under Section 2 (1)(e) of the as also under Section 15 of the and that while lays down a different procedure and envisages a different competent court to try that offence, the provides for a different procedure and different court for the trial of the same offence. He submitted that the will be within the competence of , but for the addition of the term `insurgency' in Section 2(1)(e) . ", " ", "13.Mr. submitted that although the does not expressly repeal the impugned provision of the MCOCA, yet the same cannot stand, for the case in hand is a case of implied repeal. Mr. submitted that if the subsequent law enacted by the is repugnant (in direct conflict) to the State Law then the State Law will become void as soon as the subsequent law of is enacted. Thus, according to him, in the present case, after the 2004 amendment to the there is an implied repeal of the MCOCA, so far as it covers `insurgency'. ", "14.As against this Mr. and Mr. , learned senior counsel appearing for the respondent State of Maharashtra submitted that the deals with the activities of the organized gangs and the criminal syndicate and that no other law, including the , deals with the said subject. They further submitted that the aim, objective and the area of operation of the and the are entirely different and that there is no overlapping in the working of the two Acts. As per the submissions of learned senior counsel, so far as the is concerned, it deals with the prevention and control of criminal activity by organized crime syndicate or gang within India, whereas the aim of the is to deal with the terrorist activities both within and outside India. Hence, the target of the is the organised syndicate gangs whereas the targets any person who indulges in terrorist activity, be it an individual or a group. They further submitted that the extension of the to activities of organized gangs or syndicate where they sought to promote insurgency is a logical extension of the remedy provided under the to deal with the growing menace in the society. ", "15.While making a comparison between the two Acts, they submitted that the punishes the acts of insurgency per se whereas under the , it is not the act of insurgency per se which is punishable, for under the , `insurgency' is the motive for the act and not the act per se. They further submitted that at the first blush, they may appear to be similar but a closer scrutiny would dispel any such notion and would show a vast area of dissimilarity between the two. ", " ", "16.While making their submissions on the issue of implied repeal, they submitted that promoting insurgency as one of the elements of the may overlap in some cases in its application with the relevant provisions of the , but the question of implied repeal would arise only where it overlaps in its entirety. They further submitted that the law is settled on the point that a given act can constitute more than one offence under two or more statutes, but merely because an act also becomes an offence under a subsequent statute does not automatically result in repugnancy or implied repeal of the offence defined in the earlier statue. The existing statute would stand repealed only if the ingredients of the offence created by the later statute are identical to the ingredients of the offence in the earlier statute. It is only when the ingredients of both the offences are identical which makes them irreconcilable that the statutes are held to be repugnant to each other. ", "17.Mr. , learned ASG appearing for , respondent No. 2 herein, and Mr. , learned ASG appearing for the , supported the contentions made by Mr. and Mr. . In addition, they submitted that the creates and defines a new offence and even if it be assumed that the part of the containing the term `promoting insurgency' incidentally trenches upon a field under the list then the same cannot be held to be ultra vires applying the doctrine of pith and substance, as in essence, the deals with the subject on which the State legislature has power to legislate under the Constitution. ", " ", "18.Before we proceed further to deal with and answer the issues that have been raised for our consideration, we wish to make note of a minor development which took place during the pendency of the present appeal. A further amendment was made to the , namely, the Unlawful Activities (Prevention) Amendment Act , 2008 and so the matter was again listed for hearing in order to ascertain the impact, if any, of the said amendment to the issue in hand. Mr. , learned senior counsel has, in detail, taken us through the provisions of the 2008 amendment. At the time of hearing, the counsel appearing for both the parties have fairly agreed that the 2008 amendment did not bring about any such change which would affect the decision of this on the issues raised and urged. It is, therefore, not necessary for us to elaborate on the said amendments. ", "Legislative Competence of Government of Maharashtra ", "19.The legislature of a State derives its legislative power from the provisions of Article 246(3) of the Constitution of India. Article 246(3) confers on a State legislature the exclusive power to enact laws for the whole or any part of the territory of the State on any of the matters enumerated in List II in the Seventh Schedule to the Constitution. ", " ", "20.So far as the question of legislative competence of the Maharashtra legislature to enact a law like MCOCA is concerned, in the impugned judgment has held that MCOCA in pith and substance falls in Entry No. 1 of List III which refers to the criminal law. Though has noted the fact that the of Maharashtra could have relied upon Entry 1 of List II i.e. the List which refers to `public order' to contend that the term `promoting insurgency' is relatable to that entry, refrained itself from analyzing the said aspect because the respondent had, before , taken a stand that `promoting insurgency' would be covered by Entry 1 of List III i.e. the Concurrent List. ", " ", "21.Before proceeding further, it would be appropriate on our part to mention that we do not concur with the said finding of that the in pith and substance falls only in Entry No. 1 of List III. This Court in (supra) has already held that the subject-matter of the is maintaining public order and prevention by police of commission of serious offences affecting public order, and thus would be within the purview of and be relatable to Entries 1 and 2 of List II as also to Entries 1, 2 and 12 of List III of Schedule VII to the Constitution of India. The question that needs to be determined in the present case is whether the said finding in (supra) can be extended to the term `promoting insurgency', and also whether the term `promoting insurgency', would be within the purview and relatable to Entry 1 of List II. ", " ", "22.Section 2(1)(e) of the MCOCA, which includes within its ambit the term `promoting insurgency', reads as follows:- \"2. (1)(e) `organised crime' means any continuing unlawful activity by an individual, singly or jointly, either as a member of an organised crime syndicate or on behalf of such syndicate, by use of violence or threat of violence or intimidation or coercion, or other unlawful means, with the objective of gaining pecuniary benefits, or gaining undue economic or other advantage for himself or any other person or promoting insurgency.\" [emphasis supplied] ", "23.The term `insurgency' has not been defined either under the or any other statute. The word `insurgency' does not find mention in the even after the 2004 and 2008 amendments. The definition as submitted by Mr. also does not directly or conclusively define the term `insurgency' and thus reliance cannot be placed upon it. The appellants would contend that the term refers to rising in active revolt or rebellion. defines it as a condition of revolt against government that does not reach the proportion of an organized revolution. ", " ", "24. , [], this Court has held that insurgency is undoubtedly a serious form of internal disturbance which causes a grave threat to the life of people, creates panic situation and also hampers the growth and economic prosperity of the State. ", " ", "25.We feel inclined to adopt the aforesaid definition for the current proceedings as there does not appear to exist any other satisfactory source. ", " ", "26.Although the term `insurgency' defies a precise definition, yet, it could be understood to mean and cover breakdown of peace and tranquility as also a grave disturbance of public order so as to endanger the security of the state and its sovereignty. ", "27.In terms of Entry 1 of the State List, is competent to enact a law for maintenance of public order. The said entry is reproduced herein below:- ", "\"Entry 1, List II ", "1. Public order (but not including the use of any naval, military or air force or any other armed force of the or of any other force subject to the control of the or of any contingent or unit thereof in aid of the civil power).\" ", "28.It has been time and again held by this Court that the expression `public order' is of a wide connotation. [1950 SCR 594], it has been held by this Court that `public order' signifies a state of tranquility which prevails among the members of a political society as a result of internal regulations enforced by the Government which they have established. This Court, in para 8, quoted a passage from Stephen's Criminal Law of England, wherein he observed as follows: ", "\"Unlawful assemblies, riots, insurrections, rebellions, levying of war, are offences which run into each other and are not capable of being marked off by perfectly defined boundaries. All of them have in common one feature, namely, that the normal tranquility of a civilized society is in each of the cases mentioned disturbed either by actual force or at least by the show and threat of it.\" ", "This Court further observed that though all these offences involve disturbances of public tranquility and are in theory offences against public order, the difference between them is only one of degree. The Constitution thus requires a line, perhaps only a rough line, to be drawn between the fields of public order or tranquility and those serious and aggravated forms of public disorder which are calculated to endanger the security of the . ", " ", "29. [(1960) 2 SCR 821] this Court had held that \"Public order\" is synonymous with public safety and tranquility, and it is the absence of any disorder involving a breach of local significance in contradistinction to national upheavals, such as revolution, civil strife, war, affecting the security of the State. Subsequently, in [(1966) 1 SCR 709], , J., held that any contravention of law always affected order, but before it could be said to affect public order, it must affect the community at large. He was of the opinion that offences against \"law and order\", \"public order\", and \"security of State\" are demarcated on the basis of their gravity. The said observation is as follows:- ", "\"55. It will thus appear that just as \"public order\" in the rulings of this (earlier cited) was said to comprehend disorders of less gravity than those affecting \"security of \", \"law and order\" also comprehends disorders of less gravity than those affecting \"public order\". One has to imagine three concentric circles. Law and order represents the largest circle within which is the next circle representing public order and the smallest circle represents security of . It is then easy to see that an act may affect law and order but not public order just as an act may affect public order but not security of the .......\" ", " ", "30.The Constitution Bench of this Court in , [], while adopting and explaining the scope of the test laid down in (supra), stated that the is at the centre of the society. Disturbances in the normal functioning of the society fall into a broad spectrum, from mere disturbance of the serenity of life to jeopardy of the . The acts become more and more grave as we journey from the periphery of the largest circle towards the centre. In this journey we travel first though public tranquility, then through public order and lastly to the security of the . This Court further held that in the judgment of this Court, the expression \"in the interest of public order\" as mentioned in the Constitution of India encompasses not only those acts which disturb the security of the or acts within ordre publique as described but also certain acts which disturb public tranquility or are breaches of the peace. It is not necessary to give the expression a narrow meaning because, as has been observed, the expression \"in the interest of public order\" is very wide. ", "31.The meaning of the phrase \"public order\" has also been determined by this Court in [] where it was held that the concept of \"public order\" is based on the French concept of \"ordre publique\" and is something more than ordinary maintenance of law and order. ", "32.It has been seen that the propositions laid down in the above noted cases have been time and again followed in subsequent judgments of this Court and still govern the field. ", " ", "33.At this stage, it would also be pertinent to note the findings of in [AIR 1950 FC 59] where while considering the scope and ambit of the expression \"public order\", used in Entry 1 of the provincial list in the Government of India Act, 1935, in para 12 of the judgment observed as follows:- ", " \"The expression \"Public Order\" with which the first item begins is, in our opinion, a most comprehensive term and it clearly indicates the scope or ambit of the subject in respect to which powers of legislation are given to the province. Maintenance of public order within a province is primarily the concern of that province and subject to certain exceptions which involve the use of His Majesty's forces in aid of civil power, is given plenary authority to legislate on all matters which relate to or are necessary for maintenance of public order.\" ", " ", "34.It is a well-established rule of interpretation that the entries in the List being fields of legislation must receive liberal construction inspired by a broad and generous spirit and not a narrow or pedantic approach. Each general word should extend to all ancillary and subsidiary matters which can fairly and reasonably be comprehended within it. [Reference in this regard may be made to the decisions of this Court in . [AIR 1955 SC 58], lal Shah []]. It is also a cardinal rule of interpretation that there shall always be a presumption of constitutionality in favour of a statute and while construing such statute every legally permissible effort should be made to keep the statute within the competence of [Reference may be made to the cases of: [AIR 1951 SC 41], [], State of AP []]. ", " ", "35.One of the proven methods of examining the legislative competence of a legislature with regard to an enactment is by the application of the doctrine of pith and substance. This doctrine is applied when the legislative competence of the legislature with regard to a particular enactment is challenged with reference to the entries in various lists. If there is a challenge to the legislative competence, the courts will try to ascertain the pith and substance of such enactment on a scrutiny of the Act in question. In this process, it is necessary for the courts to go into and examine the true character of the enactment, its object, its scope and effect to find out whether the enactment in question is genuinely referable to a field of the legislation allotted to the respective legislature under the constitutional scheme. This doctrine is an established principle of law in India recognized not only by this , but also by various High s. Where a challenge is made to the constitutional validity of a particular State Act with reference to a subject mentioned in any entry in List I, the has to look to the substance of the State Act and on such analysis and examination, if it is found that in the pith and substance, it falls under an entry in the State List but there is only an incidental encroachment on any of the matters enumerated in the Union List, the State Act would not become invalid merely because there is incidental encroachment on any of the matters in the Union List. ", "36.A Constitution Bench of this Court in [AIR 1957 SC 297], held as under: ", "\"8. ... But then, it must be remembered that we are construing a federal Constitution. It is of the essence of such a Constitution that there should be a distribution of the legislative powers of the Federation between the and the Provinces. The scheme of distribution has varied with different Constitutions, but even when the Constitution enumerates elaborately the topics on which the and the States could legislate, some overlapping of the fields of legislation is inevitable. The British North America Act, 1867, which established a federal Constitution for Canada, enumerated in Sections 91 and 92 the topics on which the Dominion and the Provinces could respectively legislate. Notwithstanding that the lists were framed so as to be fairly full and comprehensive, it was not long before it was found that the topics enumerated in the two sections overlapped, and had time and again to pass on the constitutionality of laws made by the Dominion and . It was in this situation that evolved the doctrine, that for deciding whether an impugned legislation was intra vires, regard must be had to its pith and substance. That is to say, if a statute is found in substance to relate to a topic within the competence of the legislature, it should be held to be intra vires, even though it might incidentally trench on topics not within its legislative competence. The extent of the encroachment on matters beyond its competence may be an element in determining whether the legislation is colourable, that is, whether in the guise of making a law on a matter within it competence, the legislature is, in truth, making a law on a subject beyond its competence. But where that is not the position, then the fact of encroachment does not affect the vires of the law even as regards the area of encroachment.\" ", "37.Again, a Constitutional Bench of this Court while discussing the said doctrine in [] observed as under: ", "\"60. This doctrine of `pith and substance' is applied when the legislative competence of a legislature with regard to a particular enactment is challenged with reference to the entries in the various lists i.e. a law dealing with the subject in one list is also touching on a subject in another list. In such a case, what has to be ascertained is the pith and substance of the enactment. On a scrutiny of the Act in question, if found, that the legislation is in substance one on a matter assigned to the legislature enacting that statute, then that Act as a whole must be held to be valid notwithstanding any incidental trenching upon matters beyond its competence i.e. on a matter included in the list belonging to the other legislature. To say differently, incidental encroachment is not altogether forbidden.\" ", "38.It is common ground that does not have power to legislate upon any of the matters enumerated in the Union List. However, if it could be shown that the core area and the subject-matter of the legislation is covered by an entry in the State List, then any incidental encroachment upon an entry in the Union List would not be enough so as to render the State law invalid, and such an incidental encroachment will not make the legislation ultra vires the Constitution. ", " ", "39. [], the doctrine of pith and substance came to be considered, when after referring to a catena of decisions of this Court on the doctrine it was laid down as under: \"18. It is likely to happen from time to time that enactment though purporting to deal with a subject in one list touches also on a subject in another list and prima facie looks as if one legislature is impinging on the legislative field of another legislature. This may result in a large number of statutes being declared unconstitutional because the legislature enacting law may appear to have legislated in a field reserved for the other legislature. To examine whether a legislation has impinged on the field of other legislatures, in fact or in substance, or is incidental, keeping in view the true nature of the enactment, the courts have evolved the doctrine of `pith and substance' for the purpose of determining whether it is legislation with respect to matters in one list or the other. Where the question for determination is whether a particular law relates to a particular subject mentioned in one list or the other, the courts look into the substance of the enactment. Thus, if the substance of the enactment falls within the Union List then the incidental encroachment by the enactment on the State List would not make it invalid. This principle came to be established by when it determined appeals from Canada or Australia involving the question of legislative competence of the federation or the States in those countries. This doctrine came to be established in India and derives its genesis from the approach adopted by the courts including in dealing with controversies arising in other federations. For applying the principle of `pith and substance' regard is to be had (i) to the enactment as a whole, (ii) to its main objects, and (iii) to the scope and effect of its provisions. For this see [], [AIR 1959 SC 544], [AIR 1955 SC 504], [] and []. In the last-mentioned case it was held: ", "`(3) Where a law passed by while being substantially within the scope of the entries in the State List entrenches upon any of the entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential.' \" ", "40.Now that we have examined under what circumstances a State Law can be said to be encroaching upon the law making powers of , we may proceed to evaluate the current issue on merits. Let us once again examine the provision at the core of this matter: ", "\"2(1)(e) \"organized crime\" means any continuing unlawful activity by an individual, singly or jointly, either as a member of an organized crime syndicate or on behalf of such syndicate, by use of violence or threat of violence or intimidation or coercion, or other unlawful means, with the objective of gaining pecuniary benefits, or gaining undue economic or other advantage for himself or any person or promoting insurgency;\" ", "After examining this provision at length, we have come to the conclusion that the definition of \"organized crime\" contained in Section 2(1)(e) of the makes it clear that the phrase \"promoting insurgency\" is used to denote a possible driving force for \"organized crime\". It is evident that the does not punish \"insurgency\" per se, but punishes those who are guilty of running a crime organization, one of the motives of which may be the promotion of insurgency. We may also examine the Statement of Objects & Reasons to support the conclusion arrived at by us. The relevant portion of the Statement of Objects & Reasons is extracted hereinbelow: - ", " ", "\"1. Organised crime has been for quite some years now come up as a very serious threat to our society. It knows no national boundaries and is fueled by illegal wealth generated by contract, killing, extortion, smuggling in contrabands, illegal trade in narcotics kidnappings for ransom, collection of protection money and money laundering, etc. The illegal wealth and black money generated by the organised crime being very huge, it has had serious adverse effect on our economy. It was seen that the organised criminal syndicates made a common cause with terrorist gangs and foster narco terrorism which extend beyond the national boundaries. There was reason to believe that organised criminal gangs have been operating in the and thus, there was immediate need to curb their activities. ", "... ", "2. The existing legal framework i.e. the penal and procedural laws and the adjudicatory system are found to be rather inadequate to curb or control the menace of organized crime. Government has, therefore, decided to enact a special law with stringent and deterrent provisions including in certain circumstances power to intercept wire, electronic or oral communication to control the menace of organized crime.\" ", "41.We find no merit in the contention that the , in any way, deals with punishing insurgency directly. We are of the considered view that the legislation only deals with \"insurgency\" indirectly only to bolster the definition of \"organized crime\". ", "42.However, even if it be assumed that \"insurgency\" has a larger role to play than pointed out by us above in the , we are of the considered view that the term \"promoting insurgency\" as contemplated under Section 2(1)(e) of the comes within the concept of public order. From the ratio of the judgments on the point of public order referred to by us earlier, it is clear that anything that affects public peace or tranquility within the or the Province would also affect public order and the Legislature is empowered to enact laws aimed at containing or preventing acts which tend to or actually affect public order. Even if the said part of the incidentally encroaches upon a field under Entry 1 of the Union list, the same cannot be held to be ultra vires in view of the doctrine of pith and substance as in essence the said part relates to maintenance of Public Order which is essentially a subject and only incidentally trenches upon a matter falling under the Union List. ", " ", "43.Therefore, we are of the considered view that it is within the legislative competence of the State of Maharashtra to enact such a provision under Entries 1 and 2 of List II read with Entries 1, 2 and 12 of List III of the Seventh Schedule of the Constitution. Repugnance with Central Statute ", "44.This brings us to the second ground of challenge i.e. the part of Section 2(1)(e) of the MCOCA, so far as it covers case of insurgency, is repugnant and has become void by the enactment of Unlawful Activities (Prevention) Amendment Act , 2004, amending the Unlawful Activities (Prevention) Act , 1967. ", "45.The Bombay High Court, in para 44 of the impugned judgment, has held that though `promoting insurgency' is one of the facets of terrorism, the offence of terrorism as defined under the UAPA as amended by the 2004 Act is not identical to the offences under the MCOCA and the term `terrorism' and `insurgency' are not synonymous. As per both the enactments can stand together as there is no conflict between the two. ", "46.Before we proceed to analyze the said aspect, it would be appropriate to understand the situations in which repugnancy would arise. ", " ", "47.Chapter I of Part XI of the Constitution deals with the subject of distribution of legislative powers of the and the legislature of the States. Article 245 of the Constitution provides that the 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. ", " ", "48.The legislative field of the and has been specified in Article 246 of the Constitution. Article 246 , reads as follows: - ", "\"246. Subject-matter of laws made by and by the legislature of States.--(1) Notwithstanding anything in clauses (2) and (3), has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this referred to as the `Union List'). (2) Notwithstanding anything in clause (3), , and, subject to clause (1), the legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this referred to as the `Concurrent List'). (3) Subject to clauses (1) and (2), the legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this referred to as the `State List'). ", "(4) 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.\" ", " Article 254 of the Constitution which contains the mechanism for resolution of conflict between the Central and the legislations enacted with respect to any matter enumerated in List III of the Seventh Schedule reads as under: ", " ", "\"254. Inconsistency between laws made by and laws made by the legislatures of States.--(1) If any provision of a law made by the legislature of a State is repugnant to any provision of a law made by which is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of Clause (2), the law made by , whether passed before or after the law made by the legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the legislature of the State shall, to the extent of the repugnancy, be void. ", " ", "(2) Where a law made by the legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by or an existing law with respect to that matter, then, the law so made by the legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: ", "Provided that nothing in this clause shall prevent from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the legislature of the State.\" ", " ", "49.We may now refer to the judgment of this Court in , [], which is one of the most authoritative judgments on the present issue. In the said case, the principles to be applied for determining repugnancy between a law made by the and a law made by were considered by a Constitution Bench of this Court. At para 8, this Court held that repugnancy may result from the following circumstances: ", "\"1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy. ", " ", "2. Where however a law passed by the comes into collision with a law passed by on an Entry in the Concurrent List, the Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the Act has been passed in accordance with clause (2) of Article 254. ", " ", "3. Where a law passed by while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential. ", " ", "4. Where, however, a law made by on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by , then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the Act is concerned, it will prevail in the and overrule the provisions of the Central Act in their applicability to the only. Such a state of affairs will exist only until may at any time make a law adding to, or amending, varying or repealing the law made by under the proviso to Article 254.\" In para 24, this further laid down the conditions which must be satisfied before any repugnancy could arise, the said conditions are as follows:- ", " ", "\"1. That there is a clear and direct inconsistency between the Central Act and the State Act . ", "2. That such an inconsistency is absolutely irreconcilable. ", "3. That the inconsistency between the provisions of the two Acts is of such nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other.\" ", "Thereafter, this after referring to the catena of judgments on the subject, in para 38, laid down following propositions:- ", "1. That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field. ", "2 ", "2. That there can be no repeal by implication unless the inconsistency appears on the face of the two statutes. ", "3. That where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results. ", " ", "4. That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field.\" ", "50. , [], this Court while discussing the scope of Articles 246 and 254 and considering the proposition laid down by this Court in M. Karunanidhi case (supra) with respect to the situations in which repugnancy would arise, in para 9, held as follows:- \"9. has exclusive power to legislate with respect to any of the matters enumerated in List I, notwithstanding anything contained in clauses (2) and (3) of Article 246. The non obstante clause under Article 246(1) indicates the predominance or supremacy of the law made by in the event of an overlap of the law made by with respect to a matter enumerated in List I and a law made by with respect to a matter enumerated in List II of the Seventh Schedule. ", "10. There is no doubt that both and are supreme in their respective assigned fields. It is the duty of the court to interpret the legislations made by and in such a manner as to avoid any conflict. However, if the conflict is unavoidable, and the two enactments are irreconcilable, then by the force of the non obstante clause in clause (1) of Article 246 , the parliamentary legislation would prevail notwithstanding the exclusive power of to make a law with respect to a matter enumerated in the State List. ", " ", "11. With respect to matters enumerated in List III (Concurrent List), both and have equal competence to legislate. Here again, the courts are charged with the duty of interpreting the enactments of and in such manner as to avoid a conflict. If the conflict becomes unavoidable, then Article 245 indicates the manner of resolution of such a conflict. ", "Thereafter, this , in para 12, held that the question of repugnancy between the parliamentary legislation and the legislation could arise in following two ways:- ", "\"12..........First, where the legislations, though enacted with respect to matters in their allotted sphere, overlap and conflict. Second, where the two legislations are with respect to matters in the Concurrent List and there is a conflict. In both the situations, parliamentary legislation will predominate, in the first, by virtue of the non obstante clause in Article 246(1 ), in the second, by reason of Article 254(1). Clause (2) of Article 254 deals with a situation where the legislation having been reserved and having obtained President's assent, prevails in that ; this again is subject to the proviso that can again bring a legislation to override even such legislation.\" ", "51. [(1988) Supp SCC 82], , J., opined that the best test of repugnancy is that if one prevails, the other cannot prevail. ", " ", "52.In the light of the said propositions of law laid down by this in a number of its decisions, we may now analyze the provisions of the two Acts before us. ", " ", "53.The provisions of the MCOCA create and define a new offence of `organised crime'. According to its Preamble, the said Act was enacted to make specific provisions for prevention and control of, and for coping with, criminal activity by organised crime syndicate or gang and for matters connected therewith or incidental thereto. ", "54.The ment of Objects and Reasons of the , inter alia, states that organized crime has for quite some years now come up as a very serious threat to our society and there is reason to believe that organized criminal gangs are operating in the and thus there is immediate need to curb their activities. The ment of Objects and Reasons in relevant part, reads as under: \"Organised crime has for quite some years now come up as a very serious threat to our society. It knows no national boundaries and is fuelled by illegal wealth generated by contract killings, extortion, smuggling in contrabands, illegal trade in narcotics, kidnappings for ransom, collection of protection money and money laundering, etc. The illegal wealth and black money generated by the organised crime is very huge and has serious adverse effect on our economy. It is seen that the organised criminal syndicates make a common cause with terrorist gangs and foster narco-terrorism which extend beyond the national boundaries. There is reason to believe that organised criminal gangs are operating in the and thus, there is immediate need to curb their activities. ", "It is also noticed that the organised criminals make extensive use of wire and oral communications in their criminal activities. The interception of such communications to obtain evidence of the commission of crimes or to prevent their commission is an indispensable aid to law enforcement and the administration of justice. ", "2. The existing legal framework i.e. the penal and procedural laws and the adjudicatory system are found to be rather inadequate to curb or control the menace of organised crime. Government has, therefore, decided to enact a special law with stringent and deterrent provisions including in certain circumstances power to intercept wire, electronic or oral communication to control the menace of the organised crime.\" ", "After enacting the , assent of the President was also obtained which was received on 24.04.1999. Section 2 of the is the interpretation clause. Clause (d) of sub-section (1) of Section 2 of the , defines the expression \"continuing unlawful activity\" to mean an activity prohibited by law for the time being in force, which is a cognizable offence punishable with imprisonment of three years or more, undertaken either singly or jointly, as a member of an organised crime syndicate or on behalf of such syndicate in respect of which more than one charge-sheets have been filed before a competent court within the preceding period of ten years and that court has taken cognizance of such offence. Clause (e) (extracted earlier hereinabefore), defines the expression \"organised crime\" to mean any continuing unlawful activity by an individual, singly or jointly, either as a member of an organised crime syndicate or on behalf of such syndicate, by use of violence or threat of violence or intimidation or coercion, or other unlawful means, with the objective of gaining pecuniary benefits, or gaining undue economic or other advantage for himself or any other person or promoting insurgency. Clause (f), defines \"organised crime syndicate\" to mean a group of two or more persons who, acting either singly or collectively, as a syndicate or gang indulge in activities of organised crime. The said definitions are interrelated; the \"organised crime syndicate\" refers to an \"organised crime\" which in turn refers to \"continuing unlawful activity\". , in the subsequent provisions lays down the punishment for organised crime and has created special machinery for the trial of a series of offences created by it. ", " ", "55.Prior to the 2004 amendment, the UAPA did not contain the provisions to deal with terrorism and terrorist activities. By the 2004 amendment, new provisions were inserted in the UAPA to deal with terrorism and terrorist activities. The Preamble of the UAPA was also amended to state that the said Act is enacted to provide for the more effective prevention of certain unlawful activities of individuals and associations, and dealing with terrorist activities and for matters connected therewith. In 2008 amendment, the Preamble has again been amended and the amended Preamble now also contains a reference to the resolution adopted by the Security Counsel of on 28.09.2001 and also makes reference to the other resolutions passed by the Security Counsel requiring the States ( which are member of ) to take action against certain terrorist and terrorist organizations. It also makes reference to the order issued by in exercise of power under Section 2 of (Security Council) Act, 1947 which is known as the Prevention & Suppression of Terrorism (Implementation of Security Council Resolutions) Order, 2007. The Preamble of the UAPA now reads as under: ", " ", "\" An Act to provide for the more effective prevention of certain unlawful activities of individuals and associations and for dealing with terrorist activities and for matters connected therewith. ", "Whereas of in its 4385th meeting adopted Resolution 1373 (2001) on 28th September, 2001, under Chapter VII of the Charter of requiring all the States to take measures to combat international terrorism; ", "And whereas Resolutions 1267 (1999), 1333 (2000), 1363 (2001), 1390 (2002), 1455 (2003), 1526 (2004), 1566 (2004), 1617 (2005), 1735 (2006) and 1822 (2008) of of require the to take action against certain terrorists and terrorist organisations, to freeze the assets and other economic resources, to prevent the entry into or the transit through their territory, and prevent the direct or indirect supply, sale or transfer of arms and ammunitions to the individuals or entities listed in the Schedule; ", "And whereas the Central Government, in exercise of the powers conferred by section 2 of the United Nations (Security Council) Act, 1947 has made the Prevention and Suppression of Terrorism (Implementation of Security Council Resolutions) Order, 2007; And whereas it is considered necessary to give effect to the said Resolutions and the Order and to make special provisions for the prevention of, and for coping with, terrorist activities and for matters connected therewith or incidental thereto.\" ", "3 ", "56. Section 2 (1)(k) and Section 15 of the UAPA, 1967 which were inserted by the 2004 amendment and define and deal with the term `terrorist act', read as under : ", "\"2(k). `terrorist act' has the meaning assigned to it in section 15 and the expression `terrorism' and `terrorist' should be construed accordingly.\" ", "\"15. Terrorist act. Whoever, with intent to threaten the unity, integrity, security or sovereignty of India or to strike terror in the people or any section of the people in India or in any foreign country, does any act by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances (whether biological or otherwise) of a hazardous nature, in such a manner as to cause, or likely to cause, death of, or injuries to any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community in India or in any foreign country or causes damage or destruction of any property or equipment used or intended to be used for the defence of India or in connection with any other purposes of , or any of their agencies, or detains any person and threatens to kill or injure such person in order to compel the Government in India or the Government of a foreign country or any other person to do or abstain from doing any act, commits a terrorist act\". ", "However, after the 2008 amendment, Section 15 has been substituted in the following manner:- ", "\"15. Whoever does any act with intent to threaten or likely to threaten the unity, integrity, security or sovereignty of India or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any foreign country,- ", "3 ", "(a) by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances whether biological radioactive, nuclear or otherwise of a hazardous nature or by any other means of whatever nature to cause or likely to cause-- ", "(i) death of, or injuries to, any person or persons; ", "or ", "(ii) loss of, or damage to, or destruction of, property; ", "or ", "(iii) disruption of any supplies or services essential to the life of the community in India or in any foreign country; or ", "(iv) damage or destruction of any property in India or in a foreign country used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, or any of their agencies; or ", "(b) overawes by means of criminal force or the show of criminal force or attempts to do so or causes death of any public functionary or attempts to cause death of any public functionary; or ", "(c) detains, kidnaps or abducts any person and threatens to kill or injure such person or does any other act in order to compel , or the Government of a foreign country or any other person to do or abstain from doing any act, commits a terrorist act. ", "Explanation.- For the purpose of this section, public functionary means the constitutional authorities and any other functionary notified in the Official Gazette by as public functionary.\" ", " From a perusal of Section 15 before and after amendment of the , it comes to light that though after amendment there have been certain additions to the provision but in substance the provision remains the same. ", " ", "57.Sub-Clauses (l) and (m) of sub Section (1) of Section 2 of the UAPA, which define the term `terrorist gang' and `terrorist organisation' respectively, read as under : ", " ", "(l) \"terrorist gang\" means any association, other than terrorist organisation, whether systematic or otherwise, which is concerned with, or involved in, terrorist act; ", "(m) \"terrorist organisation\" means an organisation listed in the Schedule or an organisation operating under the same name as an organisation so listed; ", "The following are the Terrorist Organisations which are mentioned in the First Schedule of the : - ", " ", "\"1. . ", "2. . ", "3. . ", "4. . ", "5. /Pasban-E-Ahle Hadis. ", "6. Jaish-E-Mohammed/Tahrik-E-Furqan. ", "7. Harkat-Ul-Mujahideen/Harkat-Ul-Nsar/Harkat-Ul-Jehad- E-Islami. ", "8. . ", "9. . ", "10.Jammu and Kashmir . ", "11.United (). ", "12.National (). ", "13.People's (). ", "14.United (). ", "15.People's (). ", " (). ", "3 ", " (). ", "18.Manipur (). ", "19.All Tiger Force. ", "20.National of Tripura. ", "21.Liberation Tigers of Tamil Eelam (LTTE). ", "22.Students . ", ". ", "24.Communist (, all its formations and front organisations. ", " (), all its formations and front organisations. ", " ", "27.Jamiat-ul-Mujahidden. ", "28.Al-. ", "eMillat (). ", "30.Tamil Nadu (). ", "31.Tamil National Retrieval Troops (). ", "32.Akhil Bharat Nepali Ekta Samaj (ABNES).'. ", "33. Organisations listed in the Schedule to the U.N. Prevention and Suppression of Terrorism (Implementation of Security Council Resolutions) Order, 2007 made under section 2 of the United Nations (Security Council) Act, 1947 and amended from time to time.\" [Entry No. 33 was inserted by the 2008 amendment.] The precise reason why we have extracted the list of terrorist organizations under the hereinbefore is to bring to the fore the contrast between the two legislations which are in question before us. The exhaustive list of terrorist organizations in the First Schedule to the has been included in order to show the type and nature of the organizations contemplated under that Act. A careful look of the same would indicate that all the organizations mentioned therein have as their aims and objects undermining and prejudicially affecting the integrity and sovereignty of India, which certainly stand on a different footing when compared to the activities carried out by the forces like the appellant. ", " ", "58. Section 2 (1)(o) of the UAPA, which defines the term `unlawful activity', reads as under: - ", "\"(o) \"unlawful activity\", in relation to an individual or association, means any action taken by such individual or association whether by committing an act or by words, either spoken or written, or by signs or by visible representation or otherwise, - ", "(i) which is intended, or supports any claim, to bring about, on any ground whatsoever, the cession of a part of the territory of India or the secession of a part of the territory of India from the Union, or which incites any individual or group of individuals to bring about such cession or secession; or ", "(ii) which disclaims, questions, disrupts or is intended to disrupt the sovereignty and territorial integrity of India; or ", "(iii) which causes or is intended to cause disaffection against India;\" ", "59.Before we proceed to analyse the provisions of the two statutes in order to ascertain whether they are repugnant or not, we may note that it is well settled that no provision or word in a statute is to be read in isolation. In fact, the statute has to be read as a whole and in its entirety. ., [], this while elaborating the said principle held as under: \"33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place.\" ", "60.A perusal of the Preamble, the Statement of Objects and Reasons and the Interpretation clauses of the and the would show that both the acts operate in different fields and the ambit and scope of each is distinct from the other. So far as the is concerned, it principally deals with prevention and control of criminal activity by organised crime syndicate or gang within India and its purpose is to curb a wide range of criminal activities indulged in by organised syndicate or gang. The aim of the , on the other hand, is to deal with terrorist and certain unlawful activities, which are committed with the intent to threaten the unity, integrity, security or sovereignty of India or with the intent to strike terror in the people or any section of the people in India or in any foreign country or relate to cessation or secession of the territory of India. ", " ", "61.Under the the emphasis is on crime and pecuniary benefits arising therefrom. In the wisdom of the legislature these are activities which are committed with the objective of gaining pecuniary benefits or economic advantages and which over a period of time have extended to promoting insurgency. The concept of the offence of `terrorist act' under section 15 of the essentially postulates a threat or likely threat to unity, integrity, security and sovereignty of India or striking terror amongst people in India or in foreign country or to compel the Government of India or the Government of a foreign country or any other person to do or abstain from doing any act. The offence of terrorist act under Section 15 and the offence of Unlawful activity under Section 2 (1) ", "(o) of the have some elements in commonality. The essential element in both is the challenge or threat or likely threat to the sovereignty, security, integrity and unity of India. While Section 15 requires some physical act like use of bombs and other weapons etc., Section 2 (1)(o) takes in its compass even a written or spoken words or any other visible representation intended or which supports a challenge to the unity, sovereignty, integrity and security of India. The said offences are related to the Defence of India and are covered by Entry 1 of the Union List. ", "62.Moreover, the meaning of the term ` Unlawful Act ivity' in the is altogether different from the meaning of the term ` Unlawful Act ivity' in the . It is also pertinent to note that the does not deal with the terrorist organisations which indulge in terrorist activities and similarly, the does not deal with organised gangs or crime syndicate of the kind specifically targeted by the . Thus, the offence of organised crime under the and the offence of terrorist act under the operate in different fields and are of different kinds and their essential contents and ingredients are altogether different. ", "63.The concept of insurgency under Section 2(1) (e) of the MCOCA, if seen and understood in the context of the Act, is a grave disturbance of the public order within the state. The disturbance of the public order, in each and every case, cannot be said to be identical or similar to the concepts of terrorist activity as contemplated respectively under Section 2(1)(o) and Section 15 of the UAPA. Moreover, what is punishable under the MCOCA is promoting insurgency and not insurgency per se. ", "64.The aforesaid analysis relating to the essential elements of offence of `promoting insurgency' under Section 2 (1) (e) of the and the offence of terrorist act and unlawful activity under Section 15 and Section 2 (1)(o) of the respectively, clearly establishes that the occupies a field different than that occupied by the . There is no clear and direct inconsistency or conflict between the said provisions of the two Acts. ", " ", "65.We therefore, for the reasons mentioned above, concur with the final decision reached by in the impugned judgment and repel the challenge unhesitatingly. ", " ", "66.The appeals accordingly fail and are dismissed. No Costs. ", ".......................................J. ", "[R.V. Raveendran] ........................................J. [Dr. Mukundakam Sharma] New Delhi, April 23, 2010. ", " REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 940 OF 2008 .... Appellant Versus State of Maharshtra .... Respondent JUDGMENT Dr. , J. ", "67.By a separate Judgment pronounced today, the three connected Civil Appeals being C.A. Nos. 1975-1977 of 2008 have been dismissed. ", "68.We dispose of the present Criminal Appeal with a direction that constituted under the shall consider the issue raised under Misc. Application No. 142 of 2008 in Special Case No. 23 of 2006 on its own merits in light of the findings given by this in the said connected appeals, in case a fresh application is moved by the appellant herein before . ", ".......................................J. [R.V. Raveendran] .......................................J. [Dr. Mukundakam Sharma] New Delhi April 23, 2010."], "relevant_candidates": ["0000004354", "0000193762", "0000351838", "0000456839", "0000496236", "0000512761", "0000528732", "0000640725", "0000665682", "0000698472", "0000907725", "0001057797", "0001126318", "0001149874", "0001378263", "0001386353", "0001394213", "0001506108", "0001716282", "0001733535", "0001750663", "0001757393", "0001809331", "0001813801", "0001968012"]} {"id": "0000038597", "text": ["CASE NO.: Appeal (civil) 7717 of 1994 PETITIONER: MAHARASHTRA VIKRIKAR KARAMCHARI SANGATHAN RESPONDENT: STATE OF MAHARASHTRA AND ANR. DATE OF JUDGMENT: 12/01/2000 BENCH: S.P. KURDUKAR & S.S.M. QUADRI JUDGMENT: ", "JUDGMENT 2000 (1) SCR 166 The Judgment of the Court was delivered by , J. Civil Appeal No, 7717 Of 1994. ", "This is a third round of litigation whereby a challenge to the seniority list of the Sales Tax Inspectors in , Maharashtra, was made by promotees/departmental candidates (for short 'the promotees) against the direct recruits in respect of their placements in the seniority list. These two civil appeals in strict sense cannot be said to be connected involving identical questions of inter se seniority save and except that they relate to the fixation of seniority of the Sales Tax Inspectors in their cadre in of Maharashtra. Civil Appeal No. 7717 of 1994 is filed by the Maharashtra Vikrikar Karamchari Sangathan, the appellant (for short 'the promotees') assailing the legality and correct-ness of the judgment and order dated 23rd March, 1994 passed by , Bombay Bench in Original Applica- tion No. 690-A of 1993 (for short '')- This was filed by the promotees challenging the correctness of the final seniority list notified and published on 28th December, 1992 and amended on 29th October, 1993. This seniority list of Sales Tax Inspectors came to be prepared as on 31st of December, 1987. To be more precise, the dispute relates to the fixation of seniority of promotees and direct recruits for the block 1991 to 31st December, 1987. (for short ') dismissed the principally on the ground that the contentions raised therein are barred by principles of res-judicata as well as constructive res-judicata. However, with a view to avoid the remand, in case the higher courts hold that the is not barred by the principles of res-judicata or constructive res- judicata, the disposed of the controversy raised in on merits too. ", "2, Civil Appeal No. 6316 of 1997 is filed by the State of Maharashtra impugning the judgment and order dated 23rd February, 1989 rendered by in Writ Petition No. 2742 of 1987. The dispute in this civil appeal pertains to the determination of seniority of Sales Tax Inspectors who were promoted (on absorption) from two different sources, namely, and , Bombay. The dispute thus in this civil appeal is confined to the inter-se seniority of promotees from these two sources. ", "3, We may first deal with Civil Appeal No. 7717 of 1994. The facts which are necessary for the disposal of the appeal may be stated briefly as under :- ", "Prior to 6th September, 1971, the recruitment to the posts of Sales Tax Inspectors (for short 'STIs') was made through three sources, (1) by promotion from clerks, (2) by transfer from other departments and (3) by direct recruitment Till this time, no quota was prescribed for these three different sources of recruitment. The seniority of all these three sets of STIs was determined pursuant to the general provisions relating to seniority contained in the government resolution dated July 29,1963. ", "4. For the first time, in exercise of powers conferred by provisions of Article 309 of the Constitution of India, framed the rules called Maharashtra Sales Tax Inspectors Recruitment Rules, 1971 (for short 'Rules 1971') which came into force w.e.f. September 6, 1971. Suffice is to refer to Rule 2 thereof. It deals with the appointments to the posts of Sales Tax Inspectors from two sources, namely direct recruits and by promotion in the ratio of 60:40 as far as practicable. (Emphasis sup-plied). ", "Rule 2 reads thus :- ", "2. Appointment to the posts of Sales Tax Inspectors shall be made either : ", "(a) by promotion of suitable clerks in the Sales Tax Depart-ment, who have passed at least Part ! of the Departmental Ex-amination prescribed for the Sales Tax Inspector or for the Higher Clerical staff in or who have been exempted from passing the Departmental Examination prescribed for Sales Tax Inspectors or for the High Clerical Staff. ", "Provided that the Clerks who have passed Part I of the Departmental Examination for Sales Tax Inspector and who have been promoted to the posts of Sales Tax Inspectors are required to pass Part II of the Departmental Examination for Sales Tax Inspector also, according to the rules made in that behalf, failing which they shall be liable to be reverted. ", "The ratio of persons appointed by promotion as provided above and by nomination as provided below shall, as far as practicable, be 40:60. The ratio shall not apply to temporary vacancies not exceeding one year which may be filled by promotion. Such promo-tions shall, however, be treated as stopgap promotions and will not entitle the promotees to seniority by virtue thereof. ", "Note : In the period from the date on which these rules come into force to the date on which the results of the first Departmental Examination of Sales Tax Inspectors under the unified Departmen-tal Examination Rules are declared, promotions made to the post of Sales Tax Inspector shall be purely provisional and persons so promoted shall be required to pass the prescribed Departmental Examination within the prescribed period from the date the Departmental Examination rules come into force, failing which they shall be liable to be reverted : ", "(b) by nomination, on the result of a competitive examination held by , from among can-didates who - ", "(i) possess a degree in Arts, Science, Commerce, Law or Agriculture of a recognised University or any recognised equivalent qualifications; ", "and ", "(ii) have attained the age of 18 years and have not attained the age of 24 years, on the first day of the month immediately following the month in which the posts are advertised by the ; ", "Provided that the upper age limit shall be relaxed upto 30 years in the case of persons serving in . ", "Thereafter, the State of Maharashtra in exercise of powers conferred under Article 309 of the Constitution of India framed the Rules for regulating the seniority amongst government employees. The said Rules were called Maharashtra Civil Services (Regulation of Seniority) Rules, 1982 (for short 'Rules 1982'). These rules came into force w.e.f. June 21, 1982, Rule 4 is relevant in the present controversy and it reads thus : ", "\"4. General Principles of Seniority : (1) Subject to the other provisions of these rules, the seniority of a Government servant in any post, cadre or service shall ordinarily be determined on the length of his continuous service there. ", "Provided that, for the purpose of computing such service, any period of absence from the post, cadre or service due to leave, deputation for training or otherwise or on foreign service or temporary officiation in any other post shall be taken into account, if the competent authority certified that the servant concerned would have continued in the said post cadre or service during such period, had he not proceeded on leave or deputation Or been appointed temporarily to such other post. ", "Provided further that, the service, if any, rendered by him as a result of a fortuitous appointment shall be excluded in computing the length of service and for the purposes of seniority he shall be deemed to have been appointed to the post in the cadre of service on the date on which his regular appointment is made in accordance with the provisions of the relevant recruitment rules. ", "(2) Notwithstanding anything contained in sub rule (1) : ", "(a) the inter se seniority of direct recruits selected in one batch for appointment to any post, cadre or service, shall be determined according to their ranks in the order of preference arranged by or in the case of recruitment by nomination directly made by the competent authority, the said authority, as the case may be, if the appointment is taken up by the person recruited within thirty days from the date of issue of the order of appointment or within such extended period as the competent authority may in its discretion allow. ", "(b) the inter se seniority of servants promoted from a Select List shall be in the same order in which their names appear in such Select List. If the Select List is prepared in two parts, the first part, containing the names of those selected unconditionally and the second part containing the names of those selected provisionally. AH persons included in the first part shall rank above those included in all second part. ", "Provided that, if the order in which the names are arranged in the Select List is changed following a subsequent review of it, the seniority of the servants involved shall be re-arranged and determined afresh in conformity with their revised ranks. ", "(c) the seniority of a transferred Government servant vis-a-vis the Government servant in the posts, cadre or service to which he is transferred shall be determined by the competent authority with due regard to the class and pay scale of the post, cadre or service from which he is transferred, the length of his service therein and the circumstances leading to his transfer. ", "(3) Where the dates of appointment in posts, cadre or service of any two or more persons determined after assigning the deemed dates, if necessary, are identical the person senior in age shall be considered as senior for the purpose of deter-mining the seniority.\" ", "Rule 3 contains several definitions and we are concerned with for a defini- tions. ", "3(D)\"Deemed date\" means the date assigned to a Government servant in accordance with the provisions of Rub 5; ", "3(E) \"Direct recruit\" means, in relation to any post, cadre or service, a person appointed by nomination thereto; ", "3(F) \"fortuitous appointment' means a temporary appointment made pending a regular appointment in accordance with the provisions of the relevant recruitment rules; ", "3(H)Promotee\" means, In relation to any post, cadre or service, a Government servant appointed thereto by promotion from a lower post, cadre or service; ", "5, The State of Maharashtra again in exercise of its powers conferred by Article 309 of the Constitution of India carried out the amendments to the Rules 1982, We may reproduce the relevant amendments to Rules 4 and 6 which read as under : ", "\"2, in Rule 4 of the Maharashtra Civil Services (Regulation of Seniority) Rules, 1982 (hereinafter referred to as \"the principle rules\", in sub-rule (1) in the second proviso, after the words, ''a fortuitous appointment\" the following shall be inserted, namely :- ", "\"except in a case where the competent authority certifies that, it was not expedient/possible or practicable to make a regular ap-pointment strictly in accordance with the ratio of recruitment as prescribed in the relevant recruitment rules, with the brief reason recorded therefor.\" ", "3. xxx xxx xxx ", "4. In Rule 6 of the principle Rules, after the existing proviso, the following proviso shall be added, namely :- ", "\"provided further that, appointment shall not be deemed to be fortuitous if the authority competent to make appointment certified while preparing the annual gradation list that the temporary appointment had to be made, as candidates for regular appointment by nomination or as the case may be, persons fit for promotion from the lower cadre, were not available at all or in adequate numbers.\" ", "6. This is how the relevant rules were holding the field when the impugned seniority list as amended came to be published in the year 1992 and 1993, It is clear from the certificate of the Addl. Commissioner of Sales Tax dated 21st February, 1992 (Ex.K) that from 6th September, 1971 to 31st December, 1987, total 1750 posts of Sales Tax Inspectors became vacant. Under the Recruitment Rules, 1050 posts for the direct recruits were required to be filled in accordance with-the ratio of 60:40. However, during the said period, only 346 direct recruits were available and they were appointed. Balance of 704 posts of Sales Tax Inspectors came to be filled by temporary promotions because no candidates were available for direct recruitment for the said posts. From this certificate, it is amply clear that between 6th of September, 1971 and 31st December, 1987, the quota rule was not observed and the departmental candidates came to be promoted as Sales Tax Inspectors beyond their prescribed quota of 40%. Obviously, these promotions were treated by as temporary promotions. The principle issue which needs to be considered in this appeal is how to determine the seniority amongst the promotees and direct recruits who were promoted and appointed as STIs during this block. The contention raised on behalf of the promotees (appellants) is that the quota rule was broken down and as a result thereof, the promotees were required to be appointed in view of the exigencies of service and if so appointed, their promotions cannot be termed as for-tuitous/temporary/ad hoc and that they will be entitled to earn the seniority and placement in the impugned seniority list from the date they were so promoted and working as STIs. As against this, the contention raised on behalf of the direct recruits was that the promotees who were promoted/appointed in the vacancies falling in the quota of direct recruits (60%), such promotions of the promotees were fortuitous in excess of their quota and notwithstanding that they were so appointed and working as STIs in the vacancies reserved for direct recruits as per the quota rule, they cannot get the seniority from the date of promotion or officiation and that they will get their placement in the seniority list in accordance with their quota i.e. 40% and until they are accommodated in their quota (40%) as regular promotees, their date of promotion or officiation will not be counted for the purposes of fixing their seniority vis-a-vis direct recruits. The quota rule was never broken down. The direct recruits further prayed that the present O.A. is barred by principles of res judicata as also the constructive res judicata by virtue of the judgment dated 3rd September, 1992 rendered by in T.P. No. 822 of 1991. The direct recruits, therefore, prayed that present O.A. has no substance and the same be dismissed. ", "7. It would be necessary to refer to the earlier proceedings which were finally disposed of by the , Bombay Bench, and this Court upheld the said judgment while dismissing the SLP filed by promotees/departmental candidates. ", "8. The first proceeding in point of time was filed by the promotees bearing Writ petition No. 2742 of 1987 challenging the seniority list of the STIs in wherein the direct recruits were also arrayed as respondents. The vide its judgment and order dated 23rd February, 1989 quashed the seniority list and directed the concerned authority to prepare a fresh seniority list. ", "9. Following the directions of in its order dated 23rd February, 1989, a fresh seniority list was prepared and issued on 12th April, 1989. The direct recruits were not satisfied with this seniority list prepared and issued on 12th April, 1989 as according to them, the same was prepared in contravention of the Statutory Rules 1971, framed by the State of Maharashtra in the years 1971, 1982 and 1988. To vindicate their grievances in respect of their erroneous placement in the seniority list issued on 12th April, 1989, two direct recruits petitioned the State of Maharashtra bearing Writ Petition No. 4852 of 1989 to which some of the promotees were also impleaded as respondents. Some similarly situated promotees filed the intervention application which was allowed. Writ Peti- tion No. 4852 of 1989 was then transferred to the , Bombay Bench in view of the constitution of the . It came to be listed as T.P. No. 822 of 1991. The State of Maharashtra as well as the promotees filed their responses to the transferred petition. The State of Maharashtra pleaded that the seniority list issued on 12th April, 1989 was in accordance with the statutory rules and the promotions given to the promotees in excess of their quota were required to be treated as fortuitous promotions and since they were not regularly appointed as STIs, they will be pushed down below the direct recruits for the respective unit years of appointments in accordance with quota rule. According to the State of Maharashtra, the promotions given to the promotees in excess of quota were temporary/ad hoc and or stop-gap arrangement without reckoning the period of their officiation as STIs for the purposes of fixing their seniority, 10, The promotees strongly relied upon circular issued by the govern-ment on 2nd September, 1989 regarding the seniority of with reference to the rules and principles of seniority between the promotees and direct recruits. In addition, they also relied upon a certificate dated 21st February, 1992 issued by the under the amended seniority rules declaring promotees in excess of quota as regular promotees. There is a dispute as regards the correct reading and inter- pretation of this certificate dated 21st February, 1992. ", "11. After hearing the parties, the by its detailed reasoned order dated 3rd September, 1992 quashed the seniority list dated 12th April, 1989 after setting/concluding the issues and directed the concerned authority to prepare a fresh seniority list in terms of its order as also in accordance with the rules notified from time to time. The promotees moved this Court in SLP (c) ...... (CC No, 18427/92), but, however, this Court on 10th December, 1992 dismissed the same as under :- ", "\"IA No. 1 for permission to file SLP is allowed. The SLP is dismissed on merits,\" ", "12, In view of the decision of the dated 3rd September, 1992 and on SLP confirmed by this Court on 10th December, 1992, a fresh seniority list was issued on 28th December, 1992 and was finalised on 29th October, 1993. The appellants/promotees who were aggrieved by the said seniority list filed O.A. No. 690-A of 1993 before the , . The direct recruits were also made parties to this O.A. , , vide its impugned Judgment dated 23rd March, 1994 dismissing the O.A. It is against this order passed by , , the appellants have filed this CM Appeal No. 7717 of 1994. ", "13. The impugned judgment principally proceeded on the footing that the contentions raised by the appellants were barred by principle of res judicata in view of the earlier decision of the , rendered on 3rd September, 1992 whereunder the seniority list dated April 12,1989 came to be quashed. The then directed concerned authority to prepare a fresh seniority list in terms of directions contained in its order dated September 3, 1992. The also considered in its impugned judgment the merits of the claim set up by the appellants and while negating the same on merits issued certain directions contained in para-graph 50 thereof. The gave the findings on merits in order to avoid the order of remand in the event the higher court comes to the conclusion that the contentions raised by the appellants in. O.A. No. 690-A of 1993 are not barred by res- judicata or constructive res- judicata. Before we deal with the rival contentions on merits, it would be appropriate to set out relevant contentions and the findings recorded thereof by the , in its judgment dated September 3, 1992 as to whether the contentions raised in the present proceedings are barred by res- judicata/constructive res judicata. ", "14. The principle of res judicata is sought to be applied on the footing that the identical contentions were raised in Transfer Petition No. 822 of 1991 and, therefore, such contentions cannot be re-agitated in the present QA. It may be true that the appellants have got a fresh cause of action because the seniority list was prepared in 1993 by following the decision in Transfer Petition Case No. 822 of 1991 but it will not alter the situation in view of the fact that identical contentions/issues were sought to be re-agitated in O.A. No. 690-A of 1993. All these contentions/issues were concluded not only by the Bombay Bench, but by this Court also in SLP (C) No.......(CC No. 18427 of 1992). Certainly findings on such issues must operate as res judicata in the present proceedings otherwise the very rule of res judicata will be defeated ", "15. As stated earlier, Transfer Application No. 822 of 1991 (Writ Petition No. 4852 of 1989) was filed by two direct recruits against the State of Maharashtra, the Commissioner of Sales Tax and who was a promotee. To this O.A., four more promotees got themselves impleaded as interveners and filed their counter affidavit opposing the said T.P. The contention raised on behalf of direct recruits was that the promo-tions given to the promotees in excess of their quota as laid down in the Rules 1971 be treated as fortuitous beyond their prescribed quota. The appellants contended that since direct recruits were not adequately avail-able for appointments in terms of the quota rule, the promotions were required to be given during the respective years for administrative reasons as could not be allowed to suffer because of non availability of direct recruits. This contention is based on the principle that quota rule was broken down and, therefore, the Government had to resort to departure from the quota rule due to administrative exigencies. If such promotions were given to the promotees they could not be said to be fortuitous/ad hoc/temporary or stop-gap arrangement. On this topic both the parties relied upon the Rules 1971, the Rules 1982 and various decisions of this Court. The after analysing the relevant rules and the decisions of this Court came to the following conclusions : ", "1. It cannot be held that the quota rule has not been followed continuously for number of years. ", "2. 1971 quota rule has not been broken down. ", "3. Inter se seniority is to be guided by quota rule. ", "4. It is reasonable to implement the principles of pushing down. ", "5. Promotions in excess of quota are liable to be fortuitous. ", "6. Promotions in excess of quota in the year of promotion will aot get seniority in that year. ", "7. Promotees in excess of quota will get seniority in subsequent year when they can get place in their quota (pushing down principle). ", "8. Year is taken as unit for deciding the quota. ", "16. The while coining to the above conclusions noticed that (1) there was no material on record to indicate that the quota rule was broken down and, therefore, the promotions given to the promotees in excess of quota rule will have to be treated as regular promotions and not being fortuitous/ad hoc/temporary/stop-gap arrangement. The also found that the government had failed to show that despite their sincere efforts, they could not adhere to the quota rule because of non-availability of eligible candidates for direct recruitment. (2) The words \"as far as practicable\" appearing in Rule 2 of Rules 1971 could not be equated with impossible and for that the had referred to the number of vacancies that fell to the share of direct recruits. It was noticed that during the period from 6th September, 1971 to 31st December, 1987, 1050 posts fell to the share of direct recruits as per the quota rule, but, however, only 346 direct recruits were appointed. Except for the year when recruitment was not permitted by the government for the rest of the years either the requisitions were not sent on time or the number of candidates for direct recruits was restricted by the , For some years, no requisitions were sent to . (3) No material was produced on record to indicate that govern-ment ever took a conscious decision to deviate from the quota rule as it was broken down and, therefore, promotees were required to be promoted in excess of their quota. The number of posts for direct recruits falling vacant were 704 for the said block. (4) The Government had taken no active steps in the direction of direct recruitment. The promotions given to the promotees in excess of their quota were either fortuitous/fid hoc/tem-porary or stop-gap arrangement and, therefore, notwithstanding that such promotees were officiating for long period, they will have to be pushed down in the seniority list below the direct recruits for the respective year/s of recruitment. ", "Consistent with these findings, the concluded thus : ", "\"It has not been explained by the respondents whether the seniority list published by the Additional Commissioner, , vide his letter dated 12th April, 1989 is in accordance with the instructions issued by the vide letter dated 2nd September, 1989. Therefore, the will have to forthwith cancel the impugned seniority list published on 12th April, 1989 and to prepare a fresh seniority list of the Inspectors in accordance with the law. It is needless to soy that the appointments made in excess of the quota will have to be treated as fortuitous. Therefore, the respondents are directed to revise the seniority list and republish it in accordance with the law laid down by as well as the letter No. VIKRANT -1087/41/87/Administration-7 dated 2nd September, 1989 addressed to Additional Commissioner, , Bombay, within a period of six months, from the date of this order.\" ", "17. As stated earlier, promotees challenged this order in SLP bearing CC No. 18427 of 1992 and the same carne to be dismissed on December 10, 1992. In view of the finality attained by the judgment and order dated September 3, 1992 passed by the , the Government issued a fresh seniority list on December 28, 1992 which was finalised on October 29, 1993. In this seniority list, the promotees were pushed down below the direct recruits as per the directions contained in the judgement of the dated September 3, 1992. It is this seniority list which was challenged by the appellants before the , in Original Application No. 690-A of 1993. The , vide its judg-ment and order dated 23rd March, 1994 dismissed the said O.A. ", "18. Mr. , the learned Senior Counsel appearing in support of this appeal urged that the phrase used in Rule 2 \"as far as practicable\" proves beyond any pale of doubt that there is no fix quota between promotees and nominees and the said explanation \"as far as practicable\" cannot be given a restrictive interpretation and it cannot be gainsaid that no definite quota exists between the promotees and nominees and any departure thereof would amount to breach of quota rule. In support of this submission, he drew support from the decision of this Court in , 2 SCC 715, wherein the words \"as far as practicable\" have been interpreted as under :- ", "\"The other important feature was that the proviso fixing the ratio, far from being imperative, permitted to exercise its discretion according to the demand of the exigencies, by using the expression \"as far as practicable\". The case of the appellants is that the said expression was inserted in the proviso with the object of avoiding fractions in arithmetical calculations of number of posts available to the two groups, and for no other purpose. We do not see any reason to so restrict the scope and meaning of the expression \"as far as practicable\". A similar expres-sion in identical terms used in certain other rules came up for consideration in and it was held that if it became non-feasible and impracticable for the to fill up the requisite quota by direct recruits after making a serious efforts to do so, it was free to fill the posts by promotions of suitable hands, if the filling up of the vacancies was administratively neces-sary and could not wait. Similar is the position here, and the Rule 1 of the 1960 Rules must be held to be realistic and flexible, true to life rather than abstractly absolute.\" ", "19. While construing the phrase \"as far as practicable\", in the manner suggested by the respondents, it must be indicated that serious efforts were made with all promptness on the part of the to secure the hands to fill up the required number of vacancies from the open market. ", "20, This submission was also raised in Transfer Petition No. 822 of 1991 and while construing the said expression, , referred to the judgment in , 1 SCC 308 and held that having regard to the facts and circumstances of the case and in particular the inaction on the part of the Government in recruiting the direct recruits during this block, it could not be said that the in tune with the mandate of the rule had made serious efforts to secure the hands to fill up the required number of vacancies from the open market. The in paragraph 7 has concluded : ", "\"According to him between the period 6th September, 1971 to 31st December, 1987, 2561 posts of Sales Tax Inspectors have been filled, out of which only 335 posts have gone to direct recruits and the remaining 2226 have gone to promotees and thus 1202 promotees have been promoted in excess of quota. The total percentage of direct recruitment would come hardly to 13% as against the 60% described in Rule 2 of Maharashtra Sales Tax Inspectors (Recruitment) Rules, 1971.\" ", "21, In view of these findings, a similar contention sought to be raised in the present proceedings cannot be entertained and the , in our opinion, has rightly negatived the said contention on the ground of res judicata. An equally unsustainable contention was raised on behalf of the appellant that the aforesaid finding is per incuriam and as such the prin- ciple of res judicata will have no application. Reliance was placed on the decision of this Court in , 2 SCC 715, , 1 SCC 101 and , 2 SCC 602. We wonder how this contention can be accepted in view of the specific finding recorded by the in its judgment dated September 3, 1992 which is quoted herein above. This submission cannot be sustained and hence rejected. ", "22. It was then contended on behalf of the appellants that neither the recruitment rules of 1971 nor the seniority rules of 1982 provided for carrying forward the vacancies falling in either category. In the absence of such rule which specifically provide for carrying forward the vacancies falling in either category, no such carry forward rule could be implied either in Recruitment Rules or in the Seniority Rules. This contention need hot detain us any longer because such a contention was available to the appellants in the earlier proceedings, namely, Transfer Petition No, 822 of 1991 and the same was not put in. issue. That not having been done, it must follow that such a contention is barred by principle of constructive res judicata. Neither the contesting respondents nor the appellants ever raised this contention at any stage of the proceedings in Transfer Petition No. 822 of 1991. It would, therefore, be too late to raise such a contention when the seniority list has been finalised pursuant to the judgment of the Bombay Bench in Transfer Petition No. 822 of 1991. The reliance placed on behalf of the appellants on the decision of this Court in , 2 SCC 157, therefore, does not advance the case of the appellants. ", "23. It was then contended on behalf of the appellants that in the year 1988, the Recruitment Rules were amended and as per the amended rules, cases where appointments are not made strictly in accordance with the ratio of recruitment as prescribed in the Rules 1971, such appointments will not be fortuitous appointments if the competent authority certified that it was not expedient/possible or practicable to make a regular appointment strictly in accordance with the ratio. In support of this submission, reliance was placed on the certificate dated 21st February, 1992 issued by in terms of the amended Rules. The legality and correctness of the said certificate, counsel urged, cannot be challenged. The certificate reads thus : ", "\"In accordance with the said Rules dated 23rd September, 1988, it is hereby certified that from 6th September, 1971 to 31st Decem-ber, 1987, total 1750 posts of Sales Tax Inspectors became vacant. Under the recruitment rules, 1050 posts, for Direct recruits were required to be filled in according to the ratio of 60:40. However, during the said period only 346 direct recruits were available and they were appointed. Balance of 704 posts of Sales Tax Inspectors to be filled in by temporary promotions because no candidates were available for direct recruitment for posts of Sales Tax Inspectors.\" (Emphasis supplied) ", "24. We fail to understand how, on the face of finding noted above, this certificate would advance the case of the appellants. Further the certificate recites that the balance of 704 posts of Sales Tax Inspectors \"to be filled in by temporary promotions\" because no candidates were available for direct recruitment for the post of Sales Tax Inspectors. On the contrary, this certificate unmistakably indicates that although it was issued on 21st February, 1992, the promotions given to the promotees in excess of their quota for the respective unit years were treated as temporary promotions. No document is brought to our notice to indicate that has ever taken any decision much less the conscious decision in accordance with law to treat the promotions of these promotees (in excess of the quota) on regular basis. In the absence of any such decision on the part of the Government, it would be wrong to assert that such promotions were on regular basis and not fortuitous/temporary/ad hoc or stop-gap arrangement. This certificate, therefore, is of no consequence. This certificate was issued on 21st February, 1992 when the Transfer Petition No, 822 of 1991 was pending before the when it rendered its judgment on September 3, 1992. It does not appear that either of the parties ever produced the same in the earlier proceedings. The respon-dents were therefore justified in contending that this issue cannot be agitated in the present proceedings as it is barred under the principle of constructive res judicata. Even on merits of this certificate, we have already indicated that the appellant cannot draw any support therefrom to contend that the promotions were on regular basis. It was contended by Mr. , learned Senior Counsel appearing for the respondents that this certificate was issued by the Addl. Commissioner of Sales Tax after the service of notices in Transfer Petition No, 822 of 1991. Of course, there is no prohibition/bar as such but, this would only indicate an afterthought attempt to lend support to the appellants. This contention must also stand rejected. ", "25. It was then contended by Mr. that the respondents 3 and 4 in Transfer Petition No. 822 of 1991 were not sued in a representative capacity on behalf of all the promotees. No leave under Order 1 Rule 8 CPC was obtained by the petitioners therein (direct recruits). In view of this relevant circumstances, at the most, it would be an inter partis judgment and would not bind the appellants save and except the respondents Nos. 3 and 4. This submission was strongly opposed on behalf of the non-official respondents. It was contended by Mr. , the learned Senior Counsel that the petitioners in T.P. Case No. 822 of 1.991 sued the respondent Nos. 3 and 4 in a representative capacity and, therefore, the law laid down by the Bombay Bench in Transfer Petition No. 822 of 1991 must bind all the promotees who are similarly situated. This contention raised on behalf of appellants was negatived by the in its impugned judgment and held that the said Transfer Petition by the direct recruits was in the representative capacity. No such specific contention appears to have been taken up in the present civil appeal. We see no reason to doubt the findings of the in this behalf which is supported by Mr. . ", "26. Lastly, it was contended on behalf of the appellants that some of :the appellants have put in more than 17 years of service when few of the direct recruits were either schooling and/or not born in the cadre. If the appellants were to be pushed down, it will cause a great hardship to them. We are unable to subscribe to this contention because if there is patent violation of the quota rule, the result must follow and the appellants who remained in the office for all these years cannot take the advantage of this situation. This submission is, therefore, devoid of any substance. ", "27. Thus, we concur with the findings recorded by the on the issue of res judicata and consequently, the O.A. No. 690-A of 1993 will have to be dismissed on this ground alone for the reasons recorded herein above. We accordingly do so. If this be so, the findings of the in the impugned judgment on merits and certain directions issued therein and in particular para 50 would be of no consequence. Accordingly, any such direction in the operative portion of the impugned judgment based on para 50 will be non est. Principle of pushing down will have to be adhered to so long as the Rules of 1971 and Rules of 1982 as interpreted by and this hold the field. The seniority of such pushed down STIs vis-a-vis the direct recruits appointed after 31st December, 1987 is left open as it was not the subject matter of O.A. Consequently, challenge to the im-pugned seniority lists issued on 28th December, 1992 and finalised on 29th October, 1993 as on 31st December, 1987 must fail. We must make it clear that subject matter of challenge before the was in respect of im-pugned seniority list issued on December 28, 1992 and final seniority list issued on October 29, 1993. It is expressly made clear that this judgment is confined to the seniority list as on 31st December, 1987 and no more. ", "28. In view of the aforesaid discussion, we find no merit in this appeal and the same is dismissed. In the circumstances of the case, parties are directed to bear their own costs. ", "I.A. No. 7 of 1997 & I.A. No. 8 of 1998. ", "In view of our order in the main appeal, I.A. No. 7 of 1997 and I.A. No. 8 of 1998 are allowed. ", "Civil Appeal No. 6316 of 1997 This Civil Appeal by Special Leave is filed by the State of Maharashtra challenging the legality and correctness of the judgment and order dated February 23,1989 passed by of in Writ Petition No. 2742 of 1987. This writ petition was filed by the first respondent , the Sales Tax Inspector (for short 'STI') on behalf of himself and other similarly situated STIs who were promoted to the posts of STIs prior to September 1, 1980. To this writ petition, State of Maharashtra and the Commissioner of along with other 35 respondents were arrayed as respondents. ", "The challenge in this writ petition was to the provisional seniority list of STIs as on April 1, 1984 issued by on April 28, 1987. It is this provisional seniority list which was quashed by by this impugned order and was directed to prepare a fresh seniority list of STIs in accordance with the directions contained therein. ", "A few facts leading to the present proceedings are as under : ", "Prior to April 1974, the staffing pattern amongst Class III employees in , Maharashtra State was (1) Clerk (2) Sales Tax Inspectors and (3) Selection Grade Inspectors. Prior to the said date, the post of Clerk was divided into Junior Clerk and Senior Clerk. The posts of STIs are filled up by promotion as well as nomination in equal ratio. Promotion to the STI from the cadre of Clerk was made from the suitable candidates on the basis of the certificate issued by about his suitability. The post of Sales Tax Inspector is a selection post. ", "Earlier, the work of recovery of sale tax was entrusted to of the Government of Maharashtra. vide their Resolutions passed in 1976 and 1978 decided to transfer the said work to and accordingly in the year 1980, they implemented the said decision. Resultantly, 462 posts in for the recovery of sale tax dues were abolished and equal number of posts were created on the establishment of . A question arose as to how to equate these posts with various corresponding posts in in terms of the Govern-ment resolution dated September 25, 1978. The posts were equated as under : ", "The post of /Senior Clerk in the service of was equated with the post of Senior Clerk in as the scale for both these posts was identical i.e. Rs. 335-15-500-20-580- BB-20-680. ", "Consistent with this Government Resolution, the employees in came to be absorbed in permitting them to exercise the option in this behalf. While determining the seniority of such absorbed employees vis-a-vis the employees in working on the post of Senior Clerks, the Govern-ment of Maharashtra, by Resolution dated June 18, 1980 determined the norms of fixation of the seniority and it reads thus : ", "\"So far as terms and conditions regarding fixation of seniority are concerned, the seniority of the revenue staff in the post of absorp-tion should be fixed from the date from which such persons are working regularly in the equated posts prior to their absorption, for all purposes, including promotions, confirmation, etc. The total length of service in the equivalent posts in the Revenue Depart-ment in which a person was working regularly prior to absorption should be taken into account for fixation of seniority in the post of absorption.\" ", "36 employees from came to be absorbed in in terms of the order dated December 12, 1980. The said order also recites that the seniority of the staff in the post of absorption will be separately fixed from the date from which such persons were working regularly in the equated posts prior to their absorption for all purposes including promotions, confirmations, etc. These 36 employees who were absorbed in were holding the posts of Senior Clerk/, , Entertain-ment Duty Inspectors etc, in and since their scale was found to be equivalent to the Senior Clerk in the Sales Tax Depart-ment, they were absorbed in the cadre of Senior Clerk in . These employees are the respondents at serial Nos. 2 to 36 in this appeal. ", "The respondents herein (the writ petitioners) and other similarly situated clerks and Senior Clerks who were working in were promoted from October 15, 1976 onwards to the posts of STIs against regular vacancies. Respondents 2 to 36 who were absorbed from in in the cadre of Senior Clerk were also promoted to the post of Sales Tax Inspectors in August, 1981. The total number of Clerks and Senior Clerks working in came to be promoted from October 15, 1976, were about 200 in number. The seniority list of the Senior Clerks of as on September 1, 1980 was prepared and published on May 15, 1982 by wherein respondents 2 to 36 herein were included. From the provisional seniority list so published, it appears that such of the Clerks/Senior Clerks working in and promoted prior to September 1, 1980 were not included in the seniority list. The issued a circular enclosing the list of persons in who were promoted from the post of Senior Clerks between 1980 and 1982. ", "From the material placed on record, it is noticed that the employees who were initially working in and were absorbed in were making representations to to reckon their seniority in the cadre of STIs by taking into account their service/seniority in the cadre of Senior Clerk in their parent department. , however, published the provisional seniority list on April 28, 1987 whereby respondents 2 to 36 herein were included in the said provisional seniority list. It is this provisional seniority list which was challenged by the first respondent on behalf of himself and similarly situated STIs who were promoted between 1976 and 1980. The first respondent pleaded that on the date when the respondents 2 to 36 were absorbed, the first respondent and other similarly situated persons were already promoted as STIs and, therefore, the provisional seniority list was not only erroneous but also violative of Ar-ticles 14 and 16 of the Constitution. ", "The appellants herein and also the respondents 2 to 36 contested the claim of the first respondent on the ground that in view of the decision of the Government to absorb the Senior Clerks/, , Entertainment Duty Inspectors etc. on the equivalent posts in the cadre of Senior Clerk in , they are entitled to reckon their seniority in the parent department as they were absorbed along with their seniority. It was, therefore, necessary to prepare a common seniority list of the Clerk/Senior Clerks of as well as the ab- sorbed employees from . The promotions to the post of STIs be governed by the seniority subject to other rifles, regulations and government orders. The provisional seniority list prepared by the State of Maharashtra suffers from no infirmity and the writ petition be dismissed. ", "The learned Division Bench of after con-sidering the rival contentions found that the provisional seniority list pub-lished by on April 28,1987 is contrary to law and the same cannot be sustained. opined that the post of Sales Tax Inspector being a selection post and unless finds the Senior Clerk suitable, no promotion to such selection post could be made. The first respondent and other similarly situated persons were selected by and came to be promoted to the STIs from October 15,1976 onwards. The absorbed employees from might be entitled for appropriate placements in the seniority list of Clerks and Senior Clerks in but, however, it cannot be ignored that such absorbed employees came to be promoted as STIs much after the respondent No. 1 and other similarly situated persons were promoted. As stated earlier, the first respondent and other similarly situated persons were promoted between 1976 and 1980 whereas respondent Nos. 2 to 36 were selected by and came to be promoted in the year 1981 and thereafter. The Government Resolution dated June 18, 1980 specifically recites that the seniority of the absorbed employees should be fixed in the equated post i.e. in the present case in the cadre of Senior Clerk. The Resolution nowhere provides that seniority can have any effect while determining the seniority in the higher cadre of Sales Tax Inspector, The effect of the impugned provisional seniority list dated April 28, 1987 would be that the respondent Nos. 2 to 36 who were absorbed personnel and who were promoted as the Sales Tax Inspectors after 1981 would be senior to those STIs like the first respon-dent and other similarly situated persons who were promoted after selec-tion prior to September, 1980. It was, therefore, an error on the part of the Government to ignore the date of selection and appointment of the first respondent and other similarly situated employees to the post of STIs and treat them as junior to respondent Nos. 2 to 36 who were selected sub-sequently. If such course is followed, the action of and the Commissioner of Sales Tax would be violative of Articles 14 and 16 of the Constitution. accordingly set aside the impugned provisional seniority list and directed to prepare fresh seniority list in accordance with the directions contained in the impugned judgment. ", "Mr. , the learned Advocate appearing for the State of Maharashtra took us through the impugned judgment as well as the relevant documents on record but was unable to persuade us to take a different view than the one taken by , As indicated earlier, the respondent No. 1 and other similarly situated persons were selected by and came to be promoted between 1976 and 1980 whereas the respondent Nos. 2 to 36 were selected by and came to be promoted in 1981 and thereafter. If this be so, in our opinion, the provisional seniority list has been rightly quashed by . Thus, the appeal is devoid of any substance. ", "In the result, the appeal to stand dismissed with costs."], "relevant_candidates": ["0000101697", "0000327169", "0000485116", "0000968709", "0001353689"]} {"id": "0000043994", "text": ["JUDGMENT , J. ", "1. This is a reference under Section 64(1) of the Estate Duty Act, 1953. It relates to the Assessment of Estate duty on the accountable persons of the estate of , who died on the 11th July, 1959. The deceased was the absolute owner, inter alia, of premises No. 1, Queens Park, Calcutta. On July 1, 1954, he gifted this property by way of settlement on four trustees namely , , and for the objects mentioned in the Indenture of Trust. The trustees were to hold the property for the absolute use and benefit of the deceased's two sons, and , in equal shares during their respective lives and upon the death of any of or both the sons, to be held for the use of the wife or wives of such son or sons with remainder to the male children of the two sons in equal share per stirpes. Provision had been made in the deed of settlement empowering the trustees to grant, amongst other things, lease of the trust property as they thought fit. ", "2. On the 2nd July, 1954, the trustees leased out the upper portion of the premises to the settlor on a monthly rental of Rs. 150/- for a period of five years. The lease was to take effect from the 1st July, 1954, i.e. from the same date as the date of the gift itself. The lease expired on the 30th June, 1959, and as stated above, the deceased died 11 days thereafter, on the 11th July, 1959. The said property continued to be occupied by the deceased as a continuing tenant for the last 11 days of his life. ", "3. Before the Assistant Controller of Estate Duty two alternative contentions were raised on behalf of the accountable persons. The first contention was that no part of the property could be deemed to pass under Section 10 of the Estate Duty Act. The alternative contention was that only the upper portion of the house could be deemed to pass. The Assistant Controller rejected both the contentions. He took the view that the entire property did pass on the donor's death because continued possession and enjoyment of the property was not immediately assumed by the donees and thenceforward retained to the entire exclusion of the donor or to the entire exclusion of any benefit to him by contract or otherwise. ", "4. The Appellate Controller of Estate Duty gave his decision against the assessees on the same ground. ", "5. decided the appeal partially in favour of the applicants. It held that upon the donor's death only that part of the property which had been leased out to the donor would be deemed to pass to the accountable persons. The other portion of the property was exempt from estate duty because to that extent bona fide possession and enjoyment had had been assumed by the donees and thenceforward retained by them to the entire exclusion of the donor. The also held that it was unrealistic to separate the property in its intangible form from the rights and interests attached to it. ", "6. On behalf of the Controller of Estate Duty the following question of law was suggested for reference to this Court: ", "\"Whether, oh the facts and in the circumstances of the case, the was right in holding that in terms of Section 10 of the Estate Duty Act only that portion of the property at No. 1, Queens Park, Calcutta, which was occupied by the deceased by virtue of the lease dated the 2nd July, 1954, could be deemed to pass on his death and the value thereof only was to be included in the principal value of the estate?\" ", "7. The accountable persons, on the other hand, framed the following question: ", "\"Whether on the facts and in the circumstances of the case is right in holding that the deceased was not entirely excluded from bona fide possession and enjoyment of the part or portion of the property at 1, Queens Park, Calcutta, occupied by him by reason of the lease dated July 2, 1954, within the meaning of Section 10 of the Estate Duty Act?\" ", "8. The was of opinion that the questions raised on behalf of the parties were counterparts of each other and framed the following question of law and referred it to this Court for opinion: ", "\"Whether on the facts and in the circumstances of the case and on a true interpretation of the provisions of Section 10 of the Estate Duty Act, the was justified in holding that only that portion of the property at 1, Queens Park, Calcutta, which was in the occupation of the deceased could be deemed to pass on the death of the deceased and not the whole of the property?\" ", "9. Learned counsel for the Controller argued that having regard to the framing of the question by the it was not open to the applicants to contend that no portion of the property was dutiable. From the statement of the case relevant portions whereof I have referred to already, it seems to me, that this argument is of no substance. The by the question it has framed intended to cover all the aspects of this case. Just as the Controller can urge that the whole of the property is liable to estate duty the applicants can also submit that no portion of the property is dutiable. The it appears has taken into consideration the question suggested by the Controller and the applicants respectively and tried to frame a question of its own. Both the questions have been set out in the statement of the case and then the 's question is put forward. In these circumstances, to my mind, it is unreasonable to hold that the applicants before us are debarred from contending that no portion of the property is liable to estate duty. ", "10. Mr. , learned counsel for the applicants, has argued that, the question at issue depends upon the true construction of Section 10 of the Estate Duty Act, 1953, which reads- ", "\"Property taken under any gift whenever made shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise.\" ", "11. In the words of in Attorney General v. (1911) 2 KB 688 at p. 699: ", "\"I think gramatically the words must be construed thus: 'Property taken under any gift, whenever made, of which property bona fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift, and of which property bona fide possession and enjoyment shall not have been thenceforward retained by the donee to the entire exclusion of the donor from such possession and enjoyment or of any benefit to him by contract or otherwise.\" ", "12. Therefore, according to Mr. ,' the first thing to be determined is: what is the property taken under the gift? The nature of the right to the property given is important. ", "13. Mr. then relied on a passage in the judgment of Lord of Killowen in Commr. for Stamp Duties, New South Wales v. (1943) AC 425 at p. 440. Lord has said: ", "\"The linking of possession with enjoyment as a composite object which has to be assumed by the donee indicates that the possession and enjoyment contemplated is beneficial possession and enjoyment by the object of the donor's bounty.\" ", "14. Learned Counsel proceeded to quote thereafter the following passage from the speech of Lord Simonds in , (1952) AC 15 at p. 29: ", "\"I venture to think that much of the argument that was addressed to the in this case and much of the confusion that has arisen in the past op this admittedly difficult branch of the law have been due to the failure to bear in mind that that of which enjoyment is to be assumed and retained and from which there is to be exclusion of the donor and any benefit to him by contract or otherwise is that which is truly given, a proposition which is obvious enough in the case ot two separate estates but more difficult to follow and apply where trusts are declared of a single property which are not completely exhaustive in favour of a donee.\" ", "15. For the propositions aforesaid Mr. has also relied on the cases of v. Commr of Stamp Duties, 1934 AC 61 and the dictum of in the case Lang v. , (1912) 13 CLR 503. ", "16. Mr. submitted to us that having ascertained the property taken under the gift and whether the donee assumed bona fide possession and enjoyment of that property the next step is to find whether the donor had thenceforth been excluded from the possession and enjoyment of such property. ", "17. The 'possession and enjoyment' of the property contemplated. Mr. says, is the legal possession and enjoyment and not factual or physical and the principle is \"the cedent or donor must be entirely excluded from some enforceable right of a benefit of that which was part of his properly before the cession\": in other words, an enjoyment by the donor of the same kind as before: vide Lord Advocate v. (1906) 8 F. 579 re-affirmed in 1911-2 KB 688 (Supra). ", "18. In order to bring the case within the scope of the Section, it is not sufficient, states Mr. , to take the situation as a whole and find that the donor has been allowed to enjoy substantial advantages which have some relation to the property given: it is necessary to consider the nature and source of each of the advantages and determine whether or not it is a benefit of such a kind as to come within the section: v. Commr. of Stamp Duties, New South Wales 1954 AC 57. ", "19. Mr. submits that, the possession and enjoyment from which the has not been excluded (or to which he has been inducted) must trench upon or impair and diminish the rights of the donee, in the subject-matter of the gift If a new right in the tangible property is created which does not affect the rights of the donee then the Section is not attracted. ", "20. Learned counsel then urged that, in order that duty may be levied the burden of proof is upon the taxing authority who must bring the subject within the charge i.e., establish that there was not an entire exclusion of the donor or of any benefit to him by contract or otherwise. The Section does not impose an obligation to pay the duty leaving the accountable person to bring himself within the exception: vide 's case 1911-2 KB 688 (Supra). ", "21. It follows, according to learned counsel, that if there is any doubt as to the nature of the 'possession and enjoyment' granted to the donor being that which he had before the cession then the duty is not exigible. ", "22. In this case, Mr. argued, the gift was of the full right of ownership which did not contain any right as a tenant at the time the gift was made. Therefore, the benefit that may have been conferred on the donor a day after was not referable to the gift itself. The source of the possession and enjoyment under the lease was the lease and not the freehold right which had been given. Before the lease is given the tenant's right does not come into existence and it would be erroneous to say that the leasehold interest in the property was comprised in the freehold interest before the creation of the lease. Hence, the lease when granted does not in any way prejudice or trench upon or impair 'posssession and enjoyment' which the lessor had before the creation of the lease. ", "23. In the foregoing paragraphs I have set out all the points canvassed before us by learned counsel for the applicants. The law on the subject including the present trend of decisions of has been summarised in 's \"Death Duties\", 13th Edition, Volume 1, at pages 210 to 221. ", "24. For purposes of the present reference the provisions in the Indian Act ( Section 10 of the Estate Duty Act, 1953) and those in the British Act ( Section 59(3) of the Finance Act (1909-1910) and in the Australian Act ( Section 11 of the Administration and Probate Act, 1903), are substantially the' same. The difference, that is there, relevant for us in this reference would be discussed later in this judgment. I propose to rely on the observations made in 's book confining myself, however, to the points that arise for our consideration in the instant case. ", "25. Estate duty is payable in respect of all gifts, made by the deceased in his life time unless, inter alia, (1) the transfer of the property to the donee was only completed; (2) the donee assumed bona fide possession and enjoyment of the property and thenceforward retained such possession and enjoyment; and (3) the deceased was thenceforward entirely excluded from the possession and enjoyment thereof and also from any benefit by contract or otherwise. ", "26. The first condition is satisfied if the pro perty is vested in trustees for the donee, even though the donor is one of the trustees 1943 AC 425 or the sole trustee 1954 AC 57. This condition has undoubtedly been satisfied in the instant case. ", "27. For the purpose of the second condition, it is necessary that the donee shall (a) assume, and (b) thenceforward retain the possession and enjoyment of the property. It seems that the donee, or person on his behalf, must assume and retain actual possession and enjoyment, and not merely the legal right thereto; Stamp Duties Commr. of New South Wales v. . 1956 AC 512. But presumably where the donor occupies land or enjoys chattels for full consideration such as the payment of a full rent, the receipt of the rent or other consideration by the donee will be regarded in English Law as possession and enjoyment by him if the death was on or after the 29th July, 1959, in view of Section 35(2) of the Finance Act, 1959, which runs thus: ", "\"In the case of property being an interest in land, or being chattels retention or assumption by the said other person or actual occupation of the land or actual enjoyment of an incorporeal right over the land, or actual possession of the chattels shall be disregarded if for full consideration in money or money's worth.\" ", "28. Our attention has not been drawn to any provision in the Indian Act similar to the provision in Section 35(2) of the English Finance Act of 1959. There is a finding by the Appellate Controller at page 29 of the paper book that bonafide possession and enjoyment of the property was perhaps assumed by the donees immediately upon the gift.\" also must have come to the same conclusion otherwise its order cannot be justified. ", "29. In this reference the crux of the matter appears to be whether condition No. 3 stated above has been satisfied. This condition has two limbs: the deceased must be entirely excluded (i) from the property and (ii) from any benefit by contract or otherwise. ", "30. The distinction between the two limbs or conditions, which has not always been made clear in the earlier cases, some of which have been cited by Mr. , was sharply drawn by in v. Commr. of Stamp Duties of New South Wales, 1958 AC 435, a decision on a similarly worded clause of a New South Wales Statute. In this case, the deceased gave his son a farming property, \"Mia Mia\", in 1934; in 1935 the deceased the son and another son entered into a partnership agreement as graziers and Stock dealers, on the terms, inter alia, that the deceased should be the Manager and that his decision should be final in all matters relating to the conduct of the business; that the capital should consist of the live stock and plant owned by the partners; that the business should be conducted on their respective holdings (including \"Mia Mia\"); and that the land held by each partner should be his sole property and he should have the sole and free right to deal with it as he might think fit. The partnership continued till the death of the deceased in 1952, and the property \"Mia Mia\" was held dutiable as a gift not to his entire exclusion. The main points were: ", "(1) the deceased was not in fact excluded from the property, but as a partner enjoyed rights over it. ", "(2) There was an initial out-right gitf of the property not of the property shorn of certain rights (contrast 1934 AC 61). ", "(3) It was immaterial that the partnership agreement was later than the gift, since the Section required that possession and enjoyment should thereafter be retained to the exclusion of the donor 1956 AC 512. ", "(4) It was also immaterial that the partnership was \"an independent commercial transaction\", and that the donor gave full consideration for his rights. If a donor gives a donee a freehold and the donee gives the donor a lease, even at a full rent, the donor is not excluded from the property. ((1912) 13 CLR 503, which was approved). ", "(5) The question whether the partnership agreement was \"related\" or \"referable\" to the gift did not arise: the question is relevant only to the \"second limb\" of the clause. ", "(6) It was immaterial that the donee could make no better use of the property. \"Where the question is whether the donor has been entirely excluded from the subject matter of the gift that is the single fact to be determined. If he has not been so excluded, the eye need look no further to see whether his non-exclusion has been advantageous or otherwise to the donee.\" The remarks of Lord in 1954 AC 57 do not relate to the \"first limb\", but to the \"second limb\" of the clause. In this last mentioned case residence on the property in a managerial capacity had not been regarded as a \"reservation\" but, in the light of the decision it cannot be considered authoritative on the \"first limb\". ", "31. It appears from point No. 4 above that in 's case 1958 AC 435 has fully approved of the decision of in (1912) 13 CLR 503. This is the case which has to be carefully considered by us in determining whether Section 10 of the Estate Duty Act, 1953, applies to the facts in the present reference. ", "32. Section 11 of the Administration and Probate Act, 1903, (Vict) ran as follows: ", "\"Every conveyance or assignment, gift, delivery or transfer of any estate real ot personal and whether made before or after the commencement of this Act, purporting fo operate as an immediate gift inter vivos whether by way of transfer, delivery, declaration of trust or otherwise shall- ", "(a) if made within twelve months immediately preceding the death of the person so dying; or ", "(b) if made at any time relating to any property of which property bona fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise be deemed to have made the property to which the same relates chargeable with the payment of the duty payable under the Administration and Probate Acts, as though part of the estate of the donor.\" ", "33. In 's case (1912) 13 CLR 503 a testa trix was the owner in fee of land in her actual pos session and enjoyment, which she worked as a single property. More than 12 months before her death she gave to her three sons blocks of this land each of which was surrounded by other of the land of the testatrix. The gift was made by conveyances of so much of the land as was under the general law, and by transfers of So much of it as was under the Transfer of Land Acts. On the same day upon which the conveyances and transfers were executed, each of the sons executed a lease for five years of the land given to him to the testatrix at a fair and reasonable rent. After the gifts the lands given continued to be in the actual physical occupation of the testatrix, and to be worked by her with her other lands in the same way as before the gifts. The testatrix died before the expiration of the leases. ", "34. Let us compare these facts with the salient facts in the reference before us. On the 1st July, 1354, the deceased made a gift of the property by way of settlement on trustees. On the 2nd July, 1954, the trustee leased out the upper portion of the premises to the deceased with effect from the 1st July, 1954, on a monthly rental of Rs. 150/-for a period of five years. The lease expired on the 30th June, 1959; the deceased continued as a tenant; and died on the 11th July, 1959. ", "35. In 's case (1912) 13 CLR 503 held that the land so given was chargeable with the payment of the duty payable under the Administration and Probate Acts as though part of the estate of the testatrix. ", "36. Viscount in 's case 1958 AC 435 has fully considered the effect of the decision in 's case, (1912) 13 CLR 503 and makes the following observations: ", "\"As long ago as 1912 in Lang v. (1912) 13 CLR 503 (a case whether a testatrix gave certain blocks of land to her son and on the same day took leases from them of the same land) , said: 'the lease, however, gave to the doner possession and enjoyment of the land itself, which is a simple negation of exclusion, and bring the case within the statutory liability. It was argued that as the rent was the full value, the lessee's possession and occupation were not a benefit. The argument is unimportant because the lease, at whatsoever rent, prevents the entire exclusion of the donor'. This view of the sub-section has never been departed from and their Lordships respectfully adopt the words of , in the present case. It is irrelevant that the donor gave (if he did give) full consideration for his right as a member of the partnership to possession and enjoyment of the land that he had given to his son.\": Vide 1958 AC 435 at p. 447. ", "37. I have given my anxious consideration to the arguments of Mr. that unless something is carved out of the subject-matter of the gift and given to the donor the liability under the statute is not attracted. To my mind the correct view is that so far as the upper portion of premises No. 1, Queens Park is concerned the lease gave to the donor possession and enjoyment of the property itself which is a negation of exclusion and brings the case within the statutory liability. The lease at whatsoever rent prevents the entire exclusion of the donor envisaged by Section 10 of the Estate Duty Act, 1953. This was the view of , J. in 's case, (1912) 13 CLR 503 approved by in 's case, 1958 AC 435 and it is this view which applies to the portion of premises No. 1, Queens Park, leased out by the trustees to the donor. As to whether the other portion of the property was also affected by this lease we shall consider later in this judgment. ", "38. The principles decided in 's case, (1912) 13 CLR 503 has, however, been substantially negatived in England, as respects, deaths on and after the 29th July, 1959. Under Section 35(2) of the Finance Act, 1959, the donor's actual occupation of the land, enjoyment of an incorporeal right over the land (e.g. Shooting or fishing rights or a right to take timber), or possession of the chattels is to be disregarded if for full consideration in money or moneys worth. But as I have said no such provision exists in the Indian Statute. There is no difficulty, it seems, therefore, in drawing upon the principles laid down in 's case, (1912) 13 CLR 503 for construing the relevant provisions in lection 10 of the Estate Doty Act, 1953. Accord-ingly, it appears, that subject to Section 3542 ) of the English Finance Act, 1959, in the case of land and chattels, the condition regarding entire exclusion of the donor from the property would be infringed where the donor's benefit consists of any form of possession or enjoyment of the gifted property itself, or of property representing it. In other words, the \"first limb\" of the condition may be infringed if the donor occupies OK enjoys the property or its income, even though he has no right to do so which he could legally enforce against the donee. It is not entirely easy to reconcile this view with the decisions in 's case, (1906) 43 ScLR. 465 and in 's case, (1911) 2 KB 688 (the. decision on which Mr. placed strong reliance) in which cases the deceased either released with the decision in 's case, (1906) 43 SC LR 465) or made an absolute gift of (the ), a house and furniture to a relative, without any stipulation, but continued to live there as the donee's guest until his death more than five years later, and it was held that duty was not chargeable. In the case, 1911-2 KB 688 in his remarks at p. 700 of the report, appears to have considered that the deceased's exclusion from the property itself (the first limb of the condition) would, like his exclusion \"from any benefit by contract or otherwise\" (the second limb), be achieved unless he had \"some enforceable right\". It is submitted in 's book that if by this expression meant a legally enforceable right against the donee, his view cannot be sustained, so far as the first limb is concerned, in the light of the contrary authority noted above. The requirement of enforceability in this sense, derived apparently from the word \"contract\" in the second limb, seemingly has no relevance to the first limb. It may be observed, however, that although in cases like the Permanent Trustee case 1956 AC 512 the donee could at any time have terminated the arrangement under which the deceased was not excluded, nevertheless, so long as the arrangement continued, the deceased had a specific right; whereas in the case, (1906) 43 ScLR 465 and the case, 1911-2 KB 688 it appears that there was no specific arrangement at all and the deceased was simply the guest of the donee. In case, (191!) 2 KB 688 for example. said (at p. 701 of the report) that there was no understanding that the deceased should be permitted to reside in the house. ", "\"in the sense of an arrangement, or as it is called an honourable understanding, which is not legally enforceable. I have no doubt that neither the donor nor the donee contemplated for. one moment that the former would under any circumstances be turned out of the house: but there was no discussion on the point, and the donor befors he executed the Deed was fully aware that after executing the Deed he would be at the defendant's mercy, and was fully content to rely upon the affection which the defendant Bore towards his grand-uncle and benefactor. Upon this affection, and not upon Any contract or honourable understanding, the donor was content to rely. . . .\" The difference indicated may, according to the Editor of 's book, be sufficient to distinguish the two lines of cases. It is also stated in this text book that, notwithstanding the sweeping character of the term \"entire exclusion\", there must, it is thought, be some limit to its meaning: the condition cannot be infringed merely because the donor paid occasional visits to the donee, and the and 's decisions ((1906) 43 Sc LR 465 and 1911-2- KB 688) if still valid, indicate that more permanent residents as a guest does not offend the condition, at any rate if there was no \"honourable understanding\". On the other hand, specific rights of lodging in the property secured to the donor at the time of the transfer are a Breach of the condition: , 1936 IR 342, where the deceased retained the right to the exclusive use of a room and \"the right of his support therein.\" ", "39. I have discussed alt the authorities which appear to me to be relevant for answering the question raised in this reference. These authorities lead me to the following conclusions: ", "(a) In order to avoid the mischief of Section 10 of the Estate Duty Act, 1953, it must be established that the donee not only assumed bona fide possession and enjoyment of the property taken under the gift but also thenceforward retained the said property to the entire exclusion of the donor or any benefit to him by contract or otherwise. ", "(b) The single factor to be considered is whether the donor has been entirely excluded from the subject matter of the gift. ", "(c) If the donor has not been entirely excluded then it is not at all relevant to consider whether the non-exclusion of the donor has been advantageous to the doaee or not. In other words, it is immaterial that the donee was receiving full consideration for what the donor was enjoying or possessing. ", "(d) Possession and enjoyment by the donor have to be judged in the light of the factual position alone. ", "(e) The \"benefit to him by contract or otherwise\" must, however, be based on enforceable rights. ", "39a. Applying the above principles to the facts of this case I reiterate that the upper portion of premises No. 1, Queens Park, Calcutta, which was leased out by the trustees to the donor, does not escape the consequences indicated in Section 10 of the Estate Duty Act. We have now to consider whether this section can be attracted to the whole of the property on the facts of this case. ", "40. Section 10 of the Estate Duty Act, 1953, provides as we have already seen, that property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise. ", "41. The expression \"to the extent\" introduced into the Indian Statute is a departure from the provisions in the British and Australian Acts. So far as this aspect of the question is, therefore, concerned no assistance can be derived from decisions in other countries. Mr. , learned counsel for the Controller says that this expression does not indicate any quantum or degree of curtailment of interest. It is merely descriptive of the nature of the property given to the donee. I am not inclined to accept this argument. That is not the plain meaning of the expression at all and there is no reason why the meaning should be strained in the manner suggested by Mr. . In any event the doubt, if any, has been resolved by the statement of objects and reasons whh respect to Section 10 of the Estate Duty Act, 1953, circulated to the members of . The statement runs thus: ", "\"This clause brings under charge property given in gift, but in which the donor retains some interests by contract or otherwise. Where the donor retains such interests in a part of the property only, estate duty is payable on that part only .....\" ", "42. It is abundantly clear, therefore, that in this case estate duty is payable by the accountable persons only on that portion of premises No. 1, Queens Park, Calcutta, which was in the occupation of the deceased as a lessee. ", "43. The answer to the question framed is in the affirmative. Each party will bear and pay its own costs of the reference. Certified for the counsel as against respective clients. ", ", J. ", "44. I agree."], "relevant_candidates": ["0000887364", "0157433067"]} {"id": "0000047629", "text": ["PETITIONER: UNION OF INDIA Vs. RESPONDENT: COL. J. N. SINHA AND ANR. DATE OF JUDGMENT: 12/08/1970 BENCH: , K.S. BENCH: , K.S. SHAH, J.C. CITATION: 1971 AIR 40 1971 SCR (1) 791 1969 SCC (2) 662 CITATOR INFO : R 1972 SC2185 (12) F 1973 SC 698 (11) R 1973 SC1252 (14) RF 1975 SC2057 (8) RF 1976 SC2433 (7) R 1976 SC2581 (18) F 1977 SC 854 (9) R 1978 SC 597 (218) R 1978 SC 851 (65,66) R 1980 SC 563 (16,18,21,22,25,27,31) R 1981 SC 594 (5) RF 1981 SC 818 (22,29) R 1984 SC 630 (4) R 1985 SC1416 (99) RF 1986 SC 555 (6) R 1987 SC 65 (2) RF 1987 SC 593 (23) RF 1987 SC1933 (10) R 1989 SC2218 (5) RF 1990 SC1004 (8) R 1990 SC1368 (22) RF 1991 SC 101 (22,152,261) RF 1991 SC 564 (6) R 1992 SC1020 (12,16,17,23,24,25,29,31) ACT: Constitution of India 1950, Arts. 309, 310-Rules made under Art.309- Pleasure doctrine embodied in Art. 310- Fundamental Rule 56(j) embodies pleasure doctrine-Compulsory refirement at age of 50 after a certain number of years of service does not have civil consequences Rules of natural justice cannot be invoked in such case-Rules of natural justice operate only in areas not covered by law validly made. HEADNOTE: The first respondent joined the post of Extra Assistant Superintendent in in 1938. Later he was taken into the Class I Service of and rose to the post of Deputy Director. He also officiated as -Director. On August 13, 1969 the President of India pleased by an order under Rule 56(j) of the Funda- mental Rules to compulsorily retire the first respondent from Government service. No reasons were given in the order. The appellant challenged the order by a writ petition in . The failure on the part of the concerned authority to give opportunity to the first respondent to show cause against his compulsory retirement was held by to have amounted to a contravention of the principles of natural justice. Against the judgment of appealed. HELD : Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this Court in 's case these rules can operate only in areas not covered by any law validly made. If a statutory provision can be read consistently with the principles of natural justice, the should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But on the other hand a statutory provision either specifically 'or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read with the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of the power. [794 G-795 C] Fundamental Rule 56(i) does not in terms require that any opportunity should be given to the concerned Government servant to show cause against his compulsory requirement. It says that the appropriate authority has the absolute right to retire a government servant if it is of the opinion that it is in the public interest to do so. If that authority bona fide forms that opinion the correctness of that opinion cannot be challenged before courts, though it is open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision. The respondent had not challenged the impugned order on any of these grounds. [795 D-F] Compulsory retirement does not involve any civil consequence. A person retired under Rule 56(i) does not lose any of the rights acquired 792 by him before retirement. The rule is not intended for taking any penal action against government servants. It merely embodies one of the facets of the pleasure doctrine embodied in Art. 310 of the Constitution. The rule holds the balance between the, rights of the individual government servant and the interests of the public. While a minimum service is guaranteed to the government servant, the government is given power to energise its machinery and make it more efficient by compulsorily retiring those who in its opinion should not be there in public interest. Three months notice is provided to enable the retired employee to find out other suitable employment. [795 G-796 B] On the above view of the law, namely, that no notice to show-cause was required, the appeal must be allowed. , A.I.R. 1965 S.C. 280. , A.I.R. 1970, S.C. 150, ., 2 S.C.R. 625 distinguished. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 381 of 1970. Appeal-from the judgment and order dated December 22, 1969 of in Civil Writ No. 746 of 1969. , Attorney-General and , for the appellant. ", ", , and , for respondent No. 1. ", ", for respondent No. 2. ", "The Judgment of the Court was delivered by. , J. 'In this appeal by certificate the only question that was canvassed before us was as regards the validity of the order contained in memorandum No. F. 16-42/68-S-1, dated August 13, 1969 issued by the Government of India, , retiring the 1st respondent compulsorily from government service in exercise of the powers conferred under cl. (j) -of Fundamental Rule 56 with effect from August 14 1969. That order was attacked before on various grounds. rejected some of those grounds. It did not find it necessary to decide ' a few others but accepting the contention of the respondent that in making the order, the appellant -had violated the principles of natural justice, it held that the impugned order is invalid accordingly issued a writ of certiorari quashing that order. ", "Before us the only contention presented for -our decision was whether was right in holding that in making the impugned order the appellant had violated the principles of natural justice. No other contention was taken before us. Hence we shall address ourselves only to that question. ", "793 ", "Before proceeding to examine the contention above-formulated it is necessary to set out the material facts. The 1st respondent. herein Col. successfully competed in the examination held by in 1938 for the post of Extra-Assistant Superintendent in . After selection, he was appointed as an Extra-Assistant Superintendent. He worked as probationer for a period of three years and thereafter he was confirmed in that post in 1941. During the second world war, he Volunteered for active-service in the army and was granted an emergency Commission in the army. He was granted a regular commission in the army with effect from October 23, 1942. ", "In exercise of the powers conferred by the proviso to Art. 309 of the Constitution, the President of India made on August 17, 1950 rules called the Survey of India (Recruitment from Corps of Engineering Officers) Rules, 1950 for regulating the recruitment and conditions of service of persons appointed from of to Rule 2 of the said Rules provides for the recruitment of Military Officers to and Rule 3 provides that the recruited officers will be on probation for two years which may be extended by the on the advice of the Surveyor General. The 1st respondent was taken into under Rule 2 of the aforesaid 1950 Rules as Deputy Superintendent Surveyor with effect from June 1951. Thereafter the President of India in .exercise of the powers under the proviso to Art. 309 , made on July 1, 1960 the Survey of India Class I (Recruitment) Rules, 1960 for regulating the recruitment of . The 1st respondent was subsequently promoted firstly as Superintending Surveyor and then as Deputy Director. After sometime he was promoted as Director and lastly as Director (Selection Grade). The last mentioned promotion was made with effect from October 27, 1966. On May 17, 1969, Fundamental Rule 56(j) was amended. Thereafter on August 13, 1969, issued the impugned order. The 1st respondent was given three months pay and allowances in lieu of three months notice prescribed in Fundamental Rule 56(1). The 1st respondent being aggrieved by that order, challenged the validity of the same. As mentioned earlier, accepted his plea. has appealed against that order. ", "Fundamental Rule 56(j) reads \"Notwithstanding anything contained in this Rule the appropriate authority shall, if it is of the opinion that it is in the public interest so to do have the absolute right to retire any Government servant by giving him notice of not less than three months in writing or three months pay and allowances in lieu of such notice ", "(i) if he is in Class I or Class II Service or post the age limit for the purpose of direct recruitment to which is below 35 years, after he has attained the age of 50 years. ", "(ii) In any other case after he has attained the age of 5 5 years. ", "Provided that nothing in this clause shall apply to a Government servant referred to in clause (e) who entered Government service on or before 23rd July, 1966 and to a Government servant referred to in clause (f ) .\" ", "The order impugned merely says that in pursuance of cl. 5 6 ,the President was, pleased to decide that in public interest the 1st respondent should retire from government service with effect from August 13, 1969 and that he would be given three months pay and allowances in lieu of three months notice provided in the said rule. No reasons are given for compulsorily retiring the 1st respondent. Admittedly no opportunity was given to him to show cause against his compulsory retirement. The failure on' the part of the concerned authority to give an opportunity to the 1st respondent to show cause against his compulsory retirement was held by to have amounted to a contravention of the principles of natural justice. The validity of Fundamental Rule 56(j) was not questioned before nor before us. Its validity is not open to question in view of the decision of this in (1). Fundamental Rule 56(j) in terms does not require that any ", "-opportunity should be given to the, concerned government servant 'to show cause against his compulsory retirement. A government -servant serving under holds his office at the pleasure of the President as provided in Art. 310 of the Constitution. But this \"Pleasure\" doctrine is subject to the rules or law -made under Art. 309 as well as to the conditions prescribed under Art. 311. Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this Court in (2) \"the aim of rules of natural justice is to secure justice or to put it negatively to -prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law but supplement it.\" It (1) A. I. R. 1965 S. C. 280 (2) A. I. R. 1970 , S. C. 150. ", "795 ", "is true that if a statutory provision can be read consistently with the principles of natural justice. the courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of naural justice. But if on the other hand a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred / and the effect of the exercise of that power. Now coming to the express words of Fundamental Rule 56(j), it says that the appropriate authority has the absolute right to retire a government servant if it is of the opinion that it is in the public interest to do so. The right conferred on the appropriate authority is an absolute one. That power can be exercised subject to the conditions mentioned in the rule.' one of which is that the concerned authority must be of the opinion that it is in public interest to do so. If that authority bona fide forms that opinion, the correctness of that opinion cannot be challenged before courts. It is open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision. The 1st respondent challenged the opinion formed by the government on the ground of mala fide. But that ground has failed. did not accept that plea. The same was not pressed before us. The impugned order was not attacked on the ground that the required opinion was not formed or that the opinion formed was an arbitrary one. One of the conditions of the 1st respondent's service is that the government can choose to retire him any time after he completes fifty years if it thinks that it is in public interest to do so. Because of his compulsory retirement he does not lose any of the rights acquired by him before retirement. Compulsory retirement involves no civil consequences. The aforementioned rule 56(j) is not intended for taking any penal action against the government servants. That rule merely embodies one of the facets of the pleasure doctrine embodied in Art. - 3 1 0 of the Constitution. Various considerations may weigh with, the appropriate authority while exercising the power conferred under the rule. In some cases, the government may feel that a particular post may be more usefully held in public interest by an officer more competent than the one who is holding. It may be that the officer who is holding the post is not inefficient but the appropriate authority may prefer to have a more efficient officer. It may further be that in certain key posts public interest may require that a person of undoubted ability and integrity should be there. There is no denying the fact that in all organizations and more so in government organizations, there is good deal of dead wood. It is in public interest to chop off the same. Fundamental Rule 56(j) holds the balance between the rights of the individual government servant and the interests of the public. 'While a minimum service is guaranteed to the government servant, the government is given power to energise its machinery and make it more efficient by compulsorily retiring those who in its opinion should not be there in public interest. ", "It is true that a compulsory retirement is bound to have some adverse effect on the government servant who is compulsorily retired but then as the rule provides that such retirements can be made only after the officer attains the prescribed age. Further a compulsorily retired government servant does not lose any of the benefits earned by him till the date of his retirement. Three months' notice is provided so as to enable him to find out other suitable employment. ", "In our opinion erred in thinking that the compulsory retirement involves civil consequences. Such a retirement does not take away any of the rights that have accrued to the government servant because of his past service. It cannot be said that if the retiring age of all or a section of the government servants is fixed at 50 years, the same would involve civil consequences. Under the existing system there is no uniform retirement age for all government servants. The retirement age is fixed not merely on the basis of the interest of the government servant but also depending on the requirements of the society. was not justified in seeking support for its conclusion from the decision of this in and ors.(1) and ('). ", "In case(') Dr. date of birth was refixed by the government without giving her proper opportunity to show that the enquiry officer's report was not correct. It is under those circumstances this Court held that the order refixing the date of birth was vitiated for failure to comply with the principles of natural justice. Therein the impugned order took away some of the existing rights of the petitioner. ", "In 's case('), a committee consisting of Chief Conservator of, Forest, Kashmir and others was appointed to recommend names of the officers from for (1) [1967] 2 S. C. R. 625. ", "(2) A.I.R. 1970 S.C. 150. ", "797 ", "being selected for the Indian, . The Chief Conservator of Forests, Kashmir was one of the candidates for selection. Further it was established therein that some of the officers who competed with him had earlier challenged his seniority and consequently his right to be the Chief Conservator and that dispute was pending. Under those circumstances this Court held that there -was contravention of the principles of natural justice. ", "For the reasons mentioned above, we are unable to agree with the conclusion reached by that the impugned order is invalid. We accordingly allow this appeal, set aside the judgment and decree of and dismiss the writ petition. In the circumstances of the case we make no order as to costs. ", "[The by order dated November 18, 1970 and January 19, 1971 on an application for review filed by the respondent vacated its order dismissing the writ petition. Instead, the proceedings were remanded to the High for decision on such points as were not, dealt with and decided in the judgment of that court. Ed.] G.C. Appeal allowed. Proceedings remanded. ", "798"], "relevant_candidates": ["0000639803", "0001382485", "0001455346", "0001857950"]} {"id": "0000055098", "text": ["PETITIONER: Vs. RESPONDENT: UNION OF INDIA & ORS. ETC. DATE OF JUDGMENT21/02/1978 BENCH: , M. HAMEEDULLAH (CJ) BENCH: , M. HAMEEDULLAH (CJ) CHANDRACHUD, Y.V. BHAGWATI, P.N. KRISHNAIYER, V.R. FAZALALI, SYED MURTAZA SHINGAL, P.N. , D.A. CITATION: 1978 AIR 803 1978 SCR (3) 334 1978 SCC (2) 50 CITATOR INFO : D 1980 SC1682 (67,68) RF 1980 SC2181 (149) R 1982 SC1126 (2,12,13,17,19) D 1984 SC1130 (31) F 1984 SC1291 (12) D 1986 SC1126 (47,48,49,50) APL 1989 SC1629 (17,22,23,24) RF 1989 SC1741 (10) RF 1990 SC 123 (32) R 1992 SC 522 (17) ACT: Life Insurance (Modification of Settlement) Act, 1976-S. 3-Validity of- entered into Settlement with Class III and Class IV employees regarding bonus- Settlement was subject to the approval of Central -During emergency Central issued instructions not to pay bonus under the settlement-Employees filed Writ Petition in -A Single Judge allowed the Writ Petition-The impugned Act was passed when Letters Parent Appeal was pending before - withdrew the appeal-Impugned Act, if absolved the from obligation to carry out the Writ of Mandamus issued by the Single Judge. Constitution of India : Art. 31- Bonus payable under the Settlement, if property within the mtaning of Art. 31(2)- Stopping payment of bonus, if amounts to compulsory acquisition of property without payment of compensation. HEADNOTE: From time to time the Life Insurance and its employees arrived at settlement relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them. Clause (8) of the Settle- ment dated January 24, 1974, which related to payment of bonus, provided-(i) that no profit-sharing bonus shall be paid but the may, subject to such directions as may issue from time to time, grant any other kind of bonus to its Class III and Class IV employees; (ii) that an annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary actually drawn by an employee in respect of the financial year to which the bonus relates and (iii) that save as provided therein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated June 26, 1972. Clause (12) of the Settlement which refers to the, period of settlement provided (1) that the Settlement shall be effective from April 1, 1973 for a period of four years and (2) that the, terms of the Settlement shall be subject to the approval of the Board of the and . One of the administrative instructions issued by the in regard to the payment of cash bonus under cl. 8(ii) of the Settlement was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose, of determining the amount of bonus payable to the employee or his heirs and the other was that the bonus shall be paid along with the salary for the month of April but in case of retirement or death, payment will be made soon after the contingency. The payment of Bonus (Amendment) Act . 1976 considerably curtailed the rights of the employees to bonus in industrial establishments. But in so far as the employees of the were concerned this Act had no application because by reason of s. 32 of the Payment of Bonus Act, the was outside the purview of its operation. however decided that the employees of establishments which were not covered by the Bonus Act would not be eligible for payment of bonus but exgratia payment in lieu of bonus would be made to them. Pursuant to this decision was advised by , of India, that no further payment of bonus should be made to its employees without getting the same cleared by the . The accordingly issued administrative instructions not to pay bonus to its employees under the existing provisions until further instructions. To the employees' assertion that the was bound to, 335 pay bonus in accordance with the terms of the Settlement the- cOntended that payment of bonus by the was subject to such directions as might issue from time to time, and since had advised it not to make any payment of bonus without its specific approval, bonus could not be paid to the employees. Thereupon, moved for issue of a writ directing the to act in accordance with the terms of the Settlement dated January 24, 1974 read with administrative instructions dated March 29, 1974 and not to refuse to pay cash bonus to Class III and Class IV employees. A single Judge of allowed the writ petition. While the Letters Patent Appeal was pending, passed the Life Insurance (Modification of Settlement) Act, 1976 (which is the Act impugned in this case). In the Letters Patent Appeal the stated that in view of the impugned Act , there was no necessity for proceeding with the appeal and hence made no order in the appeal. Since the effect of the impugned Act was to deprive Class III and Class IV employees of bonus payable to them in accordance with the terms of the Settlement, two of the associations filed writ petitions in this challenging the constitutional validity of the impugned Act. It was contended on their behalf that even if the impugned Act rendered cl. (8) (ii) ineffective with effect from April 1, 1975 it did not have the effect of absolving the Life Insurance from its obligation to carry out the writ of Mandamus issued by and (2) that the right of Class III and Class IV employees to annual cash bonus for the years 1975-76 and 1976-77 under Cl. 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property. without payment of compensation, it was violative of Art. 31(2) of the Constitution. Allowing the writ petitions Beg C.J. (concurring with the majority) HELD : Section 3 of the Life Insurance (Modification of Settlement) Act, 1976 is struck by the provisions of Art. 19(1)(f) and is not saved by Art. 19(6) of the Constitution. [346 A] 1. The ment of Objects and Reasons of the Act discloses that the purpose of the impugned Act was to undo settlements arrived at between the and Class III and Class IV employees on January 24 and February 6, 1974 and recognised by . this held that even a constitutional amendment cannot authorise the assumption of judicial power by . One of the tests laid down was whether the decision is of a kind which requires hearing to be given to the parties i.e., whether it involves a quasi-judicial procedure. A decision reached by is the result of a satisfaction on matters stated there and would imply quasi-judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure. followed in this case does not require that to, be done. It would be unfair to adopt legislative procedure to undo a settlement which had become the basis of a decision of . Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the and its employees from the purview of s. 18 of the Industrial Disputes Act, 1947 which had been held to be valid and enforceable by . [341 G, H, 342 A-C] 2(a) The object of the Act was in effect to take away the force of the judgment of . Rights under that judgment could be said to, rise independently of Art. 19 , of the Constitution. To give effect to that judgment is not the same thing as enforcing a right under Art. 19. It may be that a right under Art. 19 becomes linked up with the enforceability of the judgment. Nevertheless the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside s. 3 would be invalid for trenching upon the judicial power. [343 B-D] 336 (b) A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public. But the present is a pure and simple case of deprivation of rights of the employees without any apparent nexus with any public interest. In the instant case the impugned Act is a measure which seeks to deprive workers of the benefits of settlement arrived at and assented to by under the provisions of the Industrial Disputes Act . Such a settlement should not be set at naught by an Act designed to defeat the purpose. In judging the reasonableness of an Act the prospects held out, the representations made, the conduct of the and equities arising therefrom may all be taken into consideration. [342 E-F, 344 E-F] 3. Even though the real object of the Act was to set aside the result of mandamaus, the section does not mention this object. This was perhaps because the jurisdiction of and the effectiveness of its orders derived their force from Art. 226 of the Constitution. Even if s. 3 seeks to take away the basis of the judgment without mentioning it, yet where the rights of the citizens against the are concerned the court should adopt an interpretation which upholds those rights. Therefore, the rights which had passed into those embodied in a judgment and become the basis of a mandamus from , could not be taken away in an indirect fashion. [343 D-E]. 4. Even though the Directive Principles contained in Art. 43 , cast an obligation on the to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the country, it is not a fundamental right which can be enforced. Even though the Directive Principles give a direction in which the fundamental policies of the must be oriented, yet this cannot direct either or the to proceed in that direction. Even if the Directives are not directly enforceable by a they cannot be declared ineffective. They have the life and force of fundamentals. The best way to give vitality and effect to them is to use them as criteria of reasonableness. [344 B-C] 5(a) Articles 358 and 359(1A) provide that as soon as the Proclamation of emergency cease to operate the effect of suspension must vanish \"except as respects things done or omitted to be done before the law so ceases to have effect.' [346 B-C] (b) The term \"things done or omitted to be done\", should be interpreted very narrowly. In the present case it means that the settlements are not to be deemed to be wiped off. All that it means is that no payment of bonus could be demanded during the emergency but as soon as the emergency was over, the settlement would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended. In other words valid claims cannot be washed off by the emergency per se. They can only be suspended by a law passed during the operation of Arts. 358 and 359(1A). [346 C-F] (Per , and , JJ.). Concurring with the majority. The impugned Act violates Art. 31(2) and is, therefore, void. [369 G] (Per , and , JJ.) Irrespective whether the impugned Act is constitutionally valid or not, the is bound to obey the Writ of Mandamus issued by the, High and to pay annual cash bonus for the year 1975-76 to Class III and Class IV employees. [352 D-E] 1. Section 3 of the impugned Act merely provided that the provisions of the Settlement, in so far as they related to payment of annual cash bonus to Class in and Class IV employees, shall not have any force or effect and shall not be deemed to have had any force or effect from April 1, 1975. The writ of Mandamus issued by was not touched by the impugned Act. The right of the employees to annual cash bonus' for the year 1975-76 became 337 crystallised in the judgment and this right was not sought to be taken away by the impugned Act. The Judgment continued to subsist and the corporation was bound to pay bonus in obedience to the writ of Mandamus. By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the could have successfully contended in the appeal that since the Settlement, in so far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975 and so the employees were not entitled to bonus for the year 1975-76 and hence no writ of Mandamus could issue against the directing it to make payment of bonus. If such contention had been raised, there is little doubt that the judgment of the single Judge would have been upturned. But that was not done, and the judgment of the single Judge became final and binding oil the parties. [353 A-F, 355 , 1 SCR 358 and , 2 SCR 608; distinguished and held inapplicable. 2(a). The argument on behalf of the that on a proper interpretation of the clauses annual cash bonus payable under cl. 8(ii) was, by reason of cl. 8(i) subject to the directions issued by from time to time and the having stopped further payment of bonus, the employees were not entitled to claim annual cash bonus, is erroneous. The employees had absolute right to receive annual cash bonus from the in terms of el. 8(ii) and it was not competent to to issue any directions to the to refuse or withhold payment of the same. [356 D-H] (b) Although under regulation 58 of the Service Regulations non-profit sharing bonus could be granted subject to the directions of and if the issues a direction to the contrary bonus could not be paid by the , in the instant case, as provided in cl. 12 of the Settlement, approved the payment of bonus under cl. 8(ii). That having been done it was not competent to thereafter to issue another contrary direction which would have the effect of compelling the to commit a breach of its obligation under s. 18(1) of the Industrial Disputes Act, 1947 to pay annual cash bonus under clause 8(ii). The overriding power given to to issue directions from time to time contained in cl. 8(i) is conspicuously absent in cl. 8(ii). The power contained in cl. 8(i) cannot be projected or read into cl. 8(ii). These two clauses are distinct and independent. While cl. 8(i) is a general provision, el. 8(ii) specifically provides that cash bonus in the manner prescribed therein shall be paid to the employees. This specific provision is made subject only to the approval of , which was obtained. [357 A-F] (c) Moreover, under cl. 8(ii) read with the administrative instruction issued by the , annual cash bonus accrued from day to day, though payable in case of retirement, resignation or death on the happening of that contingency and otherwise on the expiration of the year to which the bonus related, Thus the annual cash bonus payable for the year 1975-76 was a debt due and owing from the to each of the employees., On the date when the impugned Act came into force each of the employees was entitled to a debt due and owing to him from the . [357 H, 358 A] 3(a) The impugned Act must be held to be violative of Art. 31(2) since it did not provide for payment of any compensation for the compulsory acquisition of the debts. [369 C] (b) The direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of cash bonus to the Life Insurance and since the is a owned by the , the impugned Act was a law providing for compulsory acquisition of the debts by the within the meaning of Art. 31(2A). 1369 B-C] 338 (c) Choses in action can be acquired by the . So long as the acquisition sub-serves a public purpose, it would satisfy the requirement of Art. 31(2). There is a fundamental distinction between a chose in action and money. A chose in action has not the same mobility and liquidity as money, and its value is not measured by the amount recoverable under it but depends on a variety of factors. Where money is given as compensation for taking money the theory of forced loan may apply, but it is not applicable where a chose in action is taken and money representing its value is given as compensation. [363 A, D-F] R. C. Cooper v. Union of India, 3 SCR 530; : 3 SCR 9 reiterated. , S.C.R. 889; , 3 S.C.R. 489; dissented; , Suppl. S.C.R. 634; , 2 S.C.R. 405; ., 3 S.C.R. 760 and Slat(, of ., 1 S.C.R. 671 followed; , 3 S.C.R. 489; , S.C.R. 889 and , S.C.R. 1122; explained; 3 S.C.R. 489 and S.C.R. 889; held no longer good law. (d) The debts due and owing from the in respect of annual cash bonus were clearly property of the employees within the meaning of Art. 31(2) and they could be compulsorily acquired under Art. 31(2). Similarly their right to receive cash bonus for the period from the date of commencement of the impugned Act upto March 31, 1977 was a legal right enforceable through of law. [360 B-C] (a) Property within the meaning of Arts. 19(1)(f) and 31(2) comprises every form of property, tangible or intangible, including debts and choses in action such is unpaid accumulation of wages, pension, cash grants etc. [360 A] R. C. Cooper v. Union of India, 3 S.C.R. 530; , 3 S.C.R. 9; ., 3 S.C.R. 489; , Supp. S.C.R. 634; , 2 S.C.R. 485; and , 3 S.C.R. 760 referred to. 4(a) The contention of the that when ownership of a debt is transferred it continues to exist as a debt but that when the debt is extinguished it ceases to exist as a debt and that extinguishment of a debt does not therefore involve transfer of ownership of the debt to the debtor is not well founded. Where, by reason of extinguishment of a right or interest of a person, detriment is suffered by him and a corresponding benefit accrues to the , there would be transfer of ownership of such right or interest to the . The question would always be : who is the beneficiary of the extinguishment of the right or interest effectuated by the law ? If it is the , then there would be transfer of ownership of the right or interest to the , because what the owner of the right or interest would lose by reason of the extinguishment would be the benefit accrued to the [367 H, 368 B-C] (b) Extinguishment of the debt of the creditor with corresponding benefit to the or owned/controlled would involve transfer of ownership of the amount representing the debt from the former to the latter. This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the or owned/controlled cannot obtain benefit at the cost of the creditor and yet avoid' the applicability of 339 Art. 31(2). The verbal veil constructed by employing the device of extinguishment of debt cannot lot permitted to conceal or hide the real nature of the transaction [368 F-B] JUDGMENT: ", "ORIGINAL JURISDICTION: Writ Petitions Nos. 108 and 174-177 of 1976. ", "(Under Article 32 of the Constitution of India). , & for the petitioners in WP 108 , & for the petitioners in 174-77 , Attorney Genl., , & for r. 2 in all the WPs. ", ", Attorney Gent. & for rr. 2 & 3 in WP 108 and rr. 2-4 in WP 174-77. ", " for the Intervener (AIN LIC Employees Federation) The following Judgments were delivered BEG, C.J.-The Life Insurance Corporation was constituted under the Life Insurance Corporation Act 31 of 1956 (hereinafter to be referred to as \"the Act\"). On 1-6-1957, issued, under s. 11 (1) of the Act, an order prescribing the 'Pay scales, dearness allowance and conditions of service applicable to-Class III and IV employees. Among these conditions it is, stated that no bonus would be paid but amenities like insurance and medical treatment free of cost would be provided. On 26-6-1959, an order was passed by under s. 11(2) of the Act, amending para 9 of the 1957 Order inasmuch as it was provided that bonus other than profit sharing bonus would be paid to the employees drawing the salary not exceeding Rs. 5001- per month. On 2nd of July 1959, there was. a settlement between the and the employees providing for payment of cash bonus at the rate of one-and-a-half month's basic salary which was to be effective from 1-9-1956 and valid upto 31-12-1961. In July 1960, regulations were framed under section 49 to regulate the conditions of service of classes of employees and regulation 58 provided for payment of non-profit sharing bonus to the employees. Orders were again passed on 14-4- 1962 and 3rd August 1963, the effect of which was to remove the restriction of Rs. 5001- for eligibility for payment of bonus. On 29th January 1963, another settlement was arrived at between the and its employees for payment of cash bonus at the rate of one-and-a-half month's basic salary. This was to continue in operation until 31st March 1969. On 20th June 1970, a third settlement was reached for payment of cash bonus at the same rate which was to be effective upto 31st March 1972. On 26-6-1972, a fourth settlement for payment of cash bonus at the rate of 10 per cent of gross wages (basic and special pay and dearness allowance) was made effective from 1st 'April 1972 to 1973. On 21st January 1974 and 6th February 1974, settlements for payment of cash bonus at 15 per cent of gross wages, valid for four years from 1st April 1973 to 31st March 1977, were reached. It is clear that this so called \"bonus\" did not depend upon profits earned but was nothing short of increas- ", "340 ", "ed wages. The settlements were approved by of the and also by . On 29th March, 1974, a circular was issued by the for payment of bonus in accordance with the settlement along with the salary in April. In April 1974, the payment of bonus for the year 1973-74 was actually made in accordance with the settlement. Again, in April 1975, *bonus for the year 1974-75 was made in accordance. with the settlements. On 25th September 1975, however, a Payment of Bonus Amendment Ordinance was promulgated. On 26-9-1975, the issued a circular stating that, as the payment of bonus was being reviewed in the light of the Ordinance, and, on 22nd of March, 1976, payment of bonus for the year 1975- 76 was to, be withheld until a final decision was) taken. Against this, a writ petition was filed in the; of Calcutta. On 21st May 1976, the Calcutta passed an order recognising the right of petitioners to payment of bonus for the year 1975-76 which had become payable along with the salary in April 1976 and ordered that it must be paid to the employees. Apparently, bonus was treated as part of the right of the petitioners to property protected by Article 19( and 31 (1) of the Constitution. On 29th May 1976, the Life Insurance Corporation Modification of Settlement Act 1976 was enacted by denying to the petitioners the right which had been recognised by the settlements, approved by and acted upon by the actual payment of bonus to the employees, and, finally, converted into right under the decision of the Calcutta on 21st May 1976. ", "Provisions. of section 1 1 (2) may read as follows \"(2) Where is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions. of service applicable to employees of insurers whose controlled busi- ness has been transferred to, and vested in, the , it is necessary so to do, or that, in the interests of the and its policy-holders,, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, may, notwithstanding anything contained in sub- section (1), or in the Industrial Disputes Act , 1947, or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions. of service to such extent, and in such manner-as it thinks fit; and if the alteration is not acceptable to any employee, the may terminate his employment by giving him compensation equivalent to three months' remuneration unless the contract of service with such employee provides for a shorter notice of termination. ", "Explanation :-The compensation payable to an employee under this sub-section shall be in addition to, and shall not affect, any pension, gratuity, provident fund money or any other benefit to which the employee may be entitled under his contract of service.\" Section 1 1 (2) of the Act shows that had ample power to revise the scales of remuneration and other terms and conditions of service if it was satisfied that the interest of the or the policy-holders demanded this. Of course, such orders had to be passed as a result of satisfaction upon material placed before relating to the interests of the or its policy holders. But, no such order was passed. What was actually done was that the Act was passed to set aside the terms of the settlements which had been incorporated in the Judgment inter-parties of . ", "The objects and reasons of the Act were set out as follows \"The provisions of the Payment of Bonus Act , 1965 do not apply to the employees employed by . ", "However, the has, as a matter of practice, been paying bonus to its employees. The bonus to Class I and Class II employees is being paid in pursuance of agreements between the and such employees. The bonus to Class III and ,Class IV employees is being paid under the terms of settlement arrived at between the and such employees from time to time. In terms of the settlement arrived at between the and its Class III and class IV employees on 24th January, 1974 under the Industrial Disputes Act , 1947, which is in force upto the 31st March, 1977, bonus is payable by the to its Class III and Class IV employees at the rate of fifteen per cent, of their annual salary without any maximum limit. ", "2. It is proposed to set aside, with effect from the 1st April, 1975, these provisions of the settlement arrived at between the and its Class III and Class IV employees on 24th January, 1974 to enable the to make ex gratia payments to such employees at the rates determined on the basis of the general Government policy for making ex gratia payments to the employees of the non- competing public sector undertakings. ", "3. The bill seems to, achieve the above object.\" ", "The statement of objects and reasons discloses that the purpose ,of the impugned Act was to undo settlements which had been arrived at between the and Class III and Class IV employees on January 24 and February 6, 1974, and actually recognised by the order of . The question could well arise whether this was really the exercise of a legislative power or of a power comparable to that of an appellate authority considering the merits of what had passed into a right to property recognised by the This Court has decided in Vs. ) that even a constitutional amendment cannot authorise the assumption of a judicial power by . One of the tests laid down there was whether the decision is of a kind which requires hearing to be given to the parties, or, in other words, involves at least a quasi-judicial procedure, which the does not, in exercise of its legislative power, follow. A decision reached by , under s. 11(2) of the Act, is the result of a satisfaction on matters stated there and would imply quasi-judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure, followed here, does not require that to be done. It would, in any event, be unfair to adopt legislative procedure to undo such a settlement which had become the basis of a decision of . Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the and its employees from the purview of the section 18 of the Industrial Disputes Act, 1947, which had been held to be valid and enforceable by . Such selective exclusion could also offend Article 14. ", "If steps in to set aside such a settlement, which could much more reasonably 'have examined after going into the need for it or for its revision, the question also arises whether it violates the fundamental right to property guaranteed under Article 19 (1 ) (f ) of the Constitution, inasmuch as the right to get bonus is part of wages and, by its deprivation, a judicially recognised right to property is taken away and not saved by- the provisions of Article 19 (6) of the Constitution? A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public. Where was the question of any restriction here in the interests of the general public ? it seems a pure and simple case of a deprivation of rights of Class III and Class TV employees without any apparent nexus with any public interest. ", "The first hurdle in the way of this attack upon the Act undoing the settlement under Article 19 (1) (f) of the Constitution placed before us what that the Act of 1976 notified on 29-5-1976 was passed during the emergency. Hence, it was submitted that Article, 358 of the Constitution is an absolute bar against giving effect to any right arising under Article 19 of the Constitution. Furthermore, it was submitted that the effect of the Act was to wash off. the liability altogether after 1-4-1975 so that nothing remained to be enforced after 1-4-1975. The Act is a very short one of 3 sections. After defining the settlement as the one which was arrived at between the and their workers on 24-1-1974 under section 18 , read with clause (p) of section 2 , of the Industrial Disputes Act , 1947 and the similar further settlement of 6-2-1974, section- 3 lays down (1) (2)S.C.R.347. ", " ", "\"Notwithstanding anything contained in the Industrial Disputes Act , 1947, the provisions of each of the settlements, in so far as they relate to the payment of an annual cash bonus to every Class, III and Class IV employees of the at the rate of fifteen per cent of his annual salary, shall not have any force or effect and shall not be deemed to have any force or effect on and from 1st day of April, 1975.\" ", "The object of the Act was, in effect, to take away the force of the judgment of recognising the settlements in favour of Class III and Class IV employees of the . Rights under that judgment could be said to arise independently of Article 19 of the Constitution. I find my self in complete agreement with my learned brother that to give effect to the judgment of is not the same thing as enforcing a right under Article 19 of the Constitution. It may be that a right under Article 19 of the Constitution becomes linked up with the enforceability of the judgment. Nevertheless, the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside, section 3 of the Act, would, in my opinion, be invalid for trenching upon the judicial power. I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by , yet, the section does not mention this object at all. Probably this was so because the jurisdiction of and the effectiveness of its orders derived their force from Article 226 of the Constitution itself, These could not be touched by an ordinary act of . Even if section 3 of the Act seeks to take away the basis of the judgment of , without mentioning it, by enacting what may appear to be a law, yet, I think that, where the rights of the citizen against the are concerned, we should adopt an interpretation which upholds those rights. Therefore, according to the interpretation, I prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a Mandamus from could not be taken away in this indirect fashion. Apart from the consideration mentioned above there are also other considerations put forward, with his usual vehemence, by Mr. who relies upon the directive principles of the Policy as part of the basic structure of our Constitution. At any rate, he submits that in judging the reasonableness of a provision the directive principles of policy can be used, as this has repeatedly done, as criteria of reasonableness, and, therefore, of validity. Mi. Garg bad relied strongly upon the provisions of Article 43 of the Constitution which says : ", "\"43. The shall endeavour to secure by suitable legislation or economic Organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage,, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.\" ", "He submits that Article 43 casts an obligation on the to secure a living wage for the workers and is part of the principles \"declared fundamental in the governance of the country\". In other words, he would have us use Article 43 as conferring practically a fundamental right which can be enforced. I do not think that we can go so far as that because, even though the directive principles of policy, including the very important general ones contained in Article 38 and 39 of the Constitution, give the direction in which the fundamental policies of the must be oriented yet, we cannot direct either or to proceed in that direction. Article 37 says that they \"shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the to apply these principles in making laws.\" Thus, even if they are not directly enforceable by a court they cannot be declared ineffective. They have the life and force of fundamentals. The best way in which they can be, without being directly enforced, given vitality and effect in Courts of laws is to use them as criteria of reasonableness, and, therefore, of validity, as we have been doing. Thus, if progress towards goals found in Articles 38 and 39 and 43 are desired, there should not be any, curtailment of wage rates arbitrarily without disclosing any valid reason for it as is. the case here. It is quite reasonable, in my opinion, to submit that the measure which seeks to deprive workers of the benefits of a settlement arrived at and assented to by , under the provisions of the Industrial Disputes Act , should not be set at naught by an Act designed to defeat a particular settlement. If this be the purpose of the Act, as it evidently is, it could very well be said to be contrary to public interest, and, therefore, not protected by Article 19(6) of the Constitution. ", "Furthermore, I think that the principle laid down by this Court in .(1) can also be taken into account in judging the reasonableness of the provision in this case. It was held there (at p. 385) : ", "\"Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its, own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen.\" ", "(1) [1968] (2)S.C.R.365. ", "34 5 In that case, equitable principles were invoked against the . It is true that, in the instant case, it is a provision of the Act of and not merely a governmental order whose validity is challenged before us. Nevertheless, we cannot forget that the Act is the result of a proposal made by the of the day which, instead of proceeding under section 11(2) of the Life Insurance Corporation Act, chose to make an Act of protected by emergency provisions. I think that the prospects held out, the representations made , the conduct of the , and equities arising therefrom, may all be taken into consideration for judging whether a particular piece of legislation, initiated by the and en- acted by , is reasonable. ", "Mr. has also strongly attacked section 3 of the Act as, violative of Article 14 of the Constitution which was also not available to the petitioners during the emergency. He alleges that the has been making very handsome profits so that the question of jeopardising the interests of the or Policyholders could not arise. He submits that the Act is nothing more than selective discrimination practised against the lower levels of the staff of the Life Insurance . I do not think that these contentions are devoid of force. I am sorry that due to the very short interval left for me to dictate my opinion in this case I have not been able to fully set out the reasoning or to cite all the authorities I would have liked to have done. The pressure of work on hand is too great. I have several judgments to pronounce tomorrow, the last day on which I shall have the authority to participate as a Judge in the decisions of this Court. I have, however, thought it to be my duty to indicate my line of thinking briefly as I have my doubts whether Article 31(2A) is not an effective answer to complete reliance upon Article 31(2) of the Constitution. ", "It is true that the right to receive bonus which had been recognised by both by its orders and conduct under a settlement is a right to property. Nevertheless, since acquisition is defined by Article 31(2A) of the 'Constitution, I seriously doubt whether that definition of acquisition really satisfied by the facts in the case before us. The provision reads as follows : ", "\"31(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the or to a evened or controlled by the , it shall not be deemed to provide for the compulsory acquisition or requisitioning, of property, notwithstanding that it deprives any person of his property.\" ", "I have, however, no doubt that the conclusion reached by my learned brother is quite correct inasmuch as the benefits of the rights recognised by the judgment of could not be indirectly taken away by section 3 of the Act selectively directed against specified settlements only. ", "346 ", "I think that section 3 of the impugned Act is struck by the provisions of Article 19(1) (f) of the Constitution and not saved by Article 19(6) of the Constitution. It is also struck by Article 14. If the fundamental rights guaranteed by Articles 14 and 19 are not suspended, but their operation is only suspended, a view which I expressed in v. ) the effect of the suspension is to restore the status quo ante. Would this not mean that only the validity of an attack based on Articles 14 and 19 is suspended during the Emergency ? But, once this embargo is lifted Articles 14 and 19 of the Constitution whose use was suspended, would strike down any legislation which would have been bad. In other words, the declaration of invalidity is stayed during the emergency. Both Articles 358 and 359(1A) provide that, as soon as a proclamation of emergency ceases to operate, the effect of suspension must vanish \"except as respects things done or omitted to be done before the law so ceases to have effect\". ", "The things done or omitted to be done could certainly not mean that the rights conferred under the settlements were washed off completely as the learned Attorney General suggested. To hold that would be to convert the suspension of invalidity into a validation of law made during the emergency. If the law was not validated but only its invalidation was suspended, we should not give any wider effect to the suspension. I think we should interpret \"things done or omitted to be done\" very narrowly. If this be so, it means that the settlements are not to be deemed to be wiped off. No doubt payments under them were temporarily suspended. This must obviously mean that no payment could be demanded under them during the emergency, but, as soon as the emergency was over, the settlements would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended. Otherwise the enactment will have effect even after the emergency had ceased. This would clearly be contrary to the express provisions of Article 358 and 359(1A). In other words, valid claims cannot be washed off by the emergency per se. They can only be suspended by a law passed during the operation of Article 358 and 359(1A) of the Constitution. For the reasons given above, I reach the same conclusion as my learned brother although perhaps by a difference route. concur in the final order made by my learned Brother . ", "BHAGWATI, J.-These writ petitions are filed by employees of challenging the constitutional validity of (Modification of Settlement) Act, 1976. This unusual piece of legislation was enacted by during the emergency at a time when there could hardly be any effective debate or discussion and it sought to render ineffective a solemn and deliberate Settlement arrived at between and four different associations of its employees for payment of cash bonus. It is necessary, in order to appreciate the various (1) A.T.R. 1976 S.C. 1207-[1976] Suppl. S.C.R. 172. ", "347 ", "contentions arising in the writ petitions to recapitulate briefly the facts leading up to the enactment of (Modification of Settlement) Act, 1976, hereinafter referred to as the impugned Act. is a statutory authority established under Act , 1956 and under section 6 it is the general duty of to carry On life insurance business, whether in or outside India, and it is required to so exercise its powers as to secure that life insurance business is developed to the best advantage of the community. It is not necessary to refer to the various provisions of Act , 1956 which define the powers, duties and functions of Act , since we are not concerned with them in these writ petitions. It would be enough to refer to section 49 which confers power on to make regulations. 'Sub-section (1) of that section provides that may,. with the previous approval of , make regulations, not in consistent with the Act, \"to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions\" of the Act and sub- section (2) enacts that in particular and without prejudice to the generality of the power conferred under sub-section (1), such regulations may provide for- ", "\"(b) the method of recruitment of employees and agents of the and the terms and conditions of service of such employees or agents; ", "(bb) the terms and conditions of service of persons who have become employees of the Corporation under subsection (1) of section 11 ;\" ", " has in exercise of the power conferred under clauses (b) and (bb) of sub-section (2). of section 49 and with the previous approval of , made the Life Insurance (Staff) Regulations, 1960 defining the terms and conditions of service of its employees. There is only one Regulation which is material for our purpose, and that is Regulation 58 which is in the following terms \"The may, subject to such directions as may issue, grant non-profit sharing bonus to its employees and the payment thereof, including conditions of eligibility for the bonus, shall be regulated by instructions issued by the Chairman from time to time.\" ", "We have set out Regulation 58 in its present form as that is the form in which it stood throughout the relevant period. It will be a matter for consideration as to what is the effect of this Regulation on the Settlement arrived at between and its employees in regard to bonus. ", "348 ", "It appears that right from 1959 Settlement were arrived at between and its employees from time to time in regard to various matters relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them. The last of such Settlement dated 20th June, 1970, as modified by the Settlement dated 26th June, 1972, expired on 31st March, 1973. Thereupon four different associations of employees of submitted their charter of demands for revision of scales of pay, allowances and other terms and conditions of service on behalf of Class III and Class IV employees. carried on negotiations with these associations. between July 1973 and January 1974 at which there was free and frank exchange of views in regard to various matters including the obligation of to the policy- holders and;. the community and ultimately these negotiations culminated in a Settlement: dated 24th January, 1974 between and these associations. The Settlement having been arrived at other-- wise than in the course of conciliation proceeding, was binding on the parties under section 18 , sub-section (1) of the Industrial Disputes Act , 1947 and since the four associations which were parties to the. employees, the Settlement was binding on and all its Class III and Class IV employees. The Settlement provided for various matters relating to the terms and conditions of: service but we are concerned only with Clause (8) which made provision in regard to bonus. That clause was in the following terms \"(i) No profit sharing bonus shall be paid. However, the may, subject to such directions as may issue from time to time, grant any other kind of bonus to its Class III & IV employees. ", "(ii) An annual cash bonus will be paid to all Class III and' Class IV employees at the rate of 15% of the annual salary (i.e. basic pay including of,special pay, if any, and dearness allowance and additional dearness allowance) actually drawn by an employee in respect of the financial year to which thebonus relates. ", "(iii) Save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated tile 26th, June, 1972.\" ", "It is also necessary to reproduce here Clause (12) as that has some bearing on the controversy between the parties \"PERIOD OF SETTLEMENT: ", "(1) This Settlement shall be effective from 1st April, 1973 and shall be for a period of four years, i.e., from 1st April,, 1973 to 31st March, 1977. ", "349 ", "(2) The terms of this Settlement shall be subject to the approval of and . ", "(3) This Settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service. ", "(4) Except as otherwise provided or modified by this Settlement, the workmen shall continue to be governed by all the terms and conditions of service as set forth and regulated by the Life Insurance Corporation of India (Staff) Regulations, 1960 as also the administrative instructions issued from time to time and they shall, subject to the provisions thereof including any period of operation specified therein be entitled to, the benefits thereunder.\" ", "It was common ground between the parties that the Settlement was approved by the Board of as also by and the Chief of Personnel by his Circular dated 12th March, 1974 intimated to the Zonal and Divisional Managers that the approval of to the Settlement having been received should proceed to implement the terms of the Settlement. The Executive Director also issued a circular dated 29th March, 1974 containing administrative instructions in regard to, payment of cash bonus under clause 8 (ii) of the Settlement. These administrative instructions set out directions in regard to Various matters relating to payment of cash bonus and of these, two are material. One was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose of determining the amount of bonus payable to the employee, or his heirs and the other was that the bonus shall be paid along with the salary for the month of April, but in case of retirement or death, payment will be made \"soon after the contingency\". There was no dispute that for the first two years, 1st April, 1973 to 31st March, 1974 and 1st April, 1974 to 31st March, 1975, paid bonus to its Class III and Class IV employees in accordance with the provisions of Clause 8(ii) of the Settlement read with the administrative instructions dated 29th March, 1974. But then came the declaration of emergency on 26th June, 1975 and troubles began for Class III and Class IV ,employees of . ", "On 25th September, 1975 an Ordinance was promulgated by the President of India called the Payment of Bonus (Amendment) Ordinance, 1975 which came into force with immediate effect. Subsequently, this Ordinance was replaced by the Payment of Bonus (Amendment) Act , 1976 which was brought into force with retrospective effect from the date of the Ordinance, namely, 25th September, 1975. This amending law considerably curtailed the rights of the employees to bonus in industrial establishments, but it had no impact so far as the employees of were concerned since the original Payment of Bonus Act was not applicable to the life Insurance Corporation by reason of section 32 which exempted from its operation. , however, decided that the employees of establishments which were not covered by the Payment of Bonus Act would not be eligible for payment of bonus but ex-gratia cash payment in lieu of bonus would be made \"as may be determined by the taking into account the wage level, financial circumstances etc. in each case and such payment will be subject to a maximum of 10% and pursuant to this decision, was advised by that no further payment of bonus should be made to the employees \"without getting the same cleared by the \". thereupon by its Circular dated 26th September, 1975 informed all its offices that since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance dated 25th September,, 1975, no bonus should be paid to the employees \"under the existing provisions until further instructions\". protested against this stand taken by and pointed out that was bound to pay bonus in accordance with the terms of the Settlement and the direction not to pay bonus was clearly illegal and unjustified. conceded that payment of bonus was covered by the settlement but contended that it was subject to such directions as the Central might issue from time to time and since the Central had advised not to make any payment of bonus without their specific approval, was justified in not making payment to the employees. This stand was taken by in its letter dated 7th February, 1976 addressed to, and this was followed by a Circular dated 22nd March, 1976 instructing all the offices of not to make payment by way of bonus. and some others thereupon filed writ petition No. 371 of 1976 in for a writ of Mandamus and Prohibition directing to act in accordance with the terms of the Settlement dated 24th January. 1974 read with the administrative instructions dated 29th March, 1974 and to rescind or cancel the Circulars dated 26th September, 1975, 7th February, 1976 and 22nd March, 1976 and not to refuse to pay cash bonus to Class III and Class IV employees along with their salary for the month of April 1976 as provided by the Settlement read with the administrative instructions. The writ petition was resisted by on various grounds to which it is not necessary to refer since we are not concerned with the correctness of the judgment of disposing of the writ petition. Suffice it to state, and that is material for our purpose, that by a judgment dated 21st May, 1976 a Single Judge of allowed the writ petition and issued a writ of Mandamus and Prohibition as prayed for in the writ petition. preferred a Letters Patent Appeal against the judgment of the learned Single Judge but in the mean time the impugned Act bad already come into force and it was, therefore, stated on behalf of before that there was no necessity for proceeding with the appeal and hence made no order in the appeal. The result was that the judgment of the learned Single Judge remained intact : with what effect, is a matter we shall presently consider. ", "On 29th May, 1976 enacted the impugned Act providing inter alia for modification' of the Settlement dated 24th January, 1974 arrived at between and its employees. The impugned Act was a very short statute consisting only of three sections. Section 1 gave the short title of the impugned Act, section 2 contained definitions and section 3 , which was the operative section, provided as follows : ", "\"Notwithstanding anything contained in the Industrial Disputes Act , 1947, the provisions of the settlement in so far as they relate to the payment of an annual cash bonus to every Class III and Class IV employees of the at the rate of fifteen per cent, of his annual salary, shall not have any force or effect and shall not be deemed to have had any force or effect on and from the 1st day of April, 1975.\" ", "Since the impugned Act did not set at naught the entire settlement dated 24th January, 1974 but merely rendered without force and effect the provisions of the Settlement in so far as they related to payment of annual cash bonus to Class III and Class IV employees and that too not from the date when the Settlement became operative but from 1st April, 1975, it was said to be a statute modifying the pro- visions of the Settlement. The plain and undoubted effect of the impugned Act was to deprive Class III and Class IV employees of the annual cash bonus to which they were entitled under clause 8(ii) of the Settlement for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 3 1 St March, 1977 and therefore, two of the associations along with their office bearers field the present writ peti- tions challenging the constitutional validity of the impugned Act. ", "There were two grounds on which the constitutionality of the impugned Act was assailed on behalf of the petitioners and they were as follows : ", "A. The right of Class III and Class TV employees to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under clause 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property without payment of compensation, the impunged Act was violative of Article 31(2) of the Constitution and was hence null and void. ", "B. The impugned Act deprived Class III and Class IV employees of the right to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 which was vested in them under clause 8(ii) of the Settlement and there was, therefore, clear infringement of their fundamental right under Article 3 52 19(1) (f) and since this deprivation of the right to annual cash bonus, which was secured under a Settlement arrived at as a result of collective bargaining and with full and mature deliberation on the part of and after taking into account the interests of the policy-holders and the community and with a view to approximating towards the goal of a living wage as envisaged in Article 43 of the Constitution, amounted to an unreasonable restriction, the impugned Act was not saved by Article 19(5) and hence it was liable to be struck down as invalid. ", "We shall proceed to consider these grounds in the order in which we have set them out, though we may point out that if either ground succeeds, it would be unnecessary to consider the other. ", "But before we proceed, further, it would be convenient at this stage to refer to one other contention of the petitioner based on the judgment of in Writ Petition No. 371 of 1976. The contention was that since had by its judgment dated 21st May, 1976 issued a writ of Mandamus directing to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 along with their salary for the month of April, 1976 as provided by the Settlement and this judgment had be- come final by reason of withdrawal of the Letters Patent Appeal preferred against it, was bound to obey the writ of Mandamus and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 in accordance with the terms of clause 8(ii) of the Settlement. It is, no doubt, true, said the petitioners, that the impugned Act, if valid, struck at clause 8(ii) of the Settlement and rendered it ineffective and without force with effect from 1st April, 1975 but it did not have the effect of absolving from its obligation to carry out the writ of Mandwnus. There was, according to the petitioners, nothing in the impugned Act which set at naught the effect of the judgment of or the binding character of the writ of Mandamus issued against . This contention of the petitioners requires serious consideration and we are inclined to accept it. It is significant to note that there was no reference to the judgment of in the Statement of Objects and Reasons, nor any non-obstante clause referring to a judgment of a court in section 3 of the impugned Act. The attention of does not appear to have been drawn to the fact that had already issued a writ of Mandamus commanding to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976. It appears that unfortunately the judgment of remained almost unnoticed and the impugned Act was passed in ignorance of that judgment. Section 3 of the impugned Act provided that the provisions of the Settlement in so far as they relate to payment of annual cash bonus to Class III and Class IV employees shall not have any force or effect and shall not be deemed to have had any force or effect from 1st April, 1975. But the writ of Mandamus issued by directing to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976 remained untouched by the impugned Act. So far as the right of Class III and Class IV employees to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 was concerned, it became crystallised in the judgment and thereafter they became entitled to enforce the writ of Mandamus granted by the judgment and not any right to annual cash bonus under the settlement. This right under the, judgment was not sought to be taken away by the impugned Act. The judgment continued to subsist and was bound to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 in obedience to the writ of Mandamus. The error committed by Insurance Corporation was that it withdrew the Letters Patent Appeal and allowed the judgment of the learned Single Judge to become final. By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and could, therefore, have successfully contained in the Letters Patent Appeal that, since the Settlement, in as far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975, Class III and Class IV employees were not entitled to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 and hence no writ of Mandamus could issue directing to make payment of such bonus. If such contention had been raised, there is little doubt, subject of course to any constitutional challenge to the validity of the impugned Act, that the judgment of the learned Single Judge would have been upturned and the Writ petition dismissed. But on account of some inexplicable reason, which is difficult to appreciate, did not press the Letters Patent Appeal and the result was that the judgment of the learned Single Judge granting writ of Mandamus became final and binding on the parties. It is difficult to see how in these circumstances could claim to be absolved from the obligation imposed by the judgment to carry out the Writ of Mandamus by relying on the impugned Act. leaned heavily on the decision of this Court in ('-) in support of its contention that when the settlement in so far as it provided for payment of annual cash bonus was set at naught by the impugned Act with effect from 1st April, 1975, the basis on which the judgment proceeded was fundamentally altered and that rendered the judgment ineffective and not binding on the parties. We do not think this decision lays down any such wide proposition as is contended for and on behalf of . It does not say that whenever any actual or legal situation is altered by retrospective legislation, a judicial decision rendered by a court on the basis of such factual or legal situation prior to the alteration, would (1) 1 S.C.R. 388. ", "354 ", "straightaway, without more, cease to be effective and binding on the parties. It is true that there, are certain observations in this decision which seem to suggest that a court decision may cease to be binding when the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. But these observations have to be read in the light of the question which arose for consideration in that case. There, the validity of the Gujarat Imposition of Taxes by Municipalities (Validation) Act, 1963 was assailed on behalf of the petitioners. The Validation Act had to be enacted because it was held by this in (1) that since section 73 of the Bombay Municipality Boroughs Act, 1925 allowed the Municipality to levy a 'rate? on buildings or lands and the term 'rate? was confined to, an imposition on the basis of annual letting value, tax levied by the Municipality on lands, and buildings on the basis of capital value was invalid. Section 3 of the Validation Act provided that notwithstanding anything contained in any judgment, decree or order of a court or tribunal or any other authority, no tax assessed or purported to have been assessed by a municipality on the, basis of capital value of a building or land and imposed, collected or recovered by the municipality at any time before the commencement of the Validation Act shall be deemed to have invalidly assessed, imposed, collected or recovered and the imposition, collection or recovery of the tax so assessed shall be valid and shall be deemed to have always been valid and shall not be called in question merely on the ground that the assessment the tax on the basis of capital value of the building or land was not authorised by law and accordingly any tax so assessed before the commencement of the Validation Act and leviable for a period prior to such commencement but not collected or recovered before such commencement may be collected or recovered in accordance with the relevant municipal law. It will be seen that by section 3 of the impugned Act the retrospectively imposed tax on building or land on the basis of capital value and if the tax was already imposed, levied and collected on that basis, made the imposition levy, collection and recovery of the tax valid, notwithstanding the declaration by the that as 'rate, the levy was incompetent. This was clearly permissible to the because in doing so, the did not seek to reverse the decision of this on the interpretation of the word 'rate,, but retrospectively amended the law by providing for imposition of tax on land or building on the basis of capital value and validated the imposition, levy, collection and recovery of tax on that basis. The decision of this holding the levy of tax to be incompetent on the basis of the unamended law, therefore, became irrelevant and could not stand in the way of the tax being assessed, collected and recovered on the, basis of capital value under the law as retrospectively amended. That is why this held that the Validation Act was effective to validate imposition, levy, collection and recovery of tax on land or building on the basis of capital value. It is difficult to see bow this decision given in the context of a validating statute can be of any help to . Here, the judgment given by the (1) 2S.C.R.608. ", "355 ", ", which is relied upon by the petitioners, is not a mere declaratory judgment holding an impost or tax to be invalid, so that a validation statute can remove the defect pointed out by the judgment amending the law with retrospective effect and validate such impost or tax. But it is a judgment giving effect to the right of the petitioners to annual cash bonus under the Settlement by issuing a writ of Mandamus directing to pay the amount of such bonus. If by reason of retrospective, alteration of the factual or legal situation, the judgment is rendered erroneous, the remedy may be by way of appeal or review, but so long as the judgment stands, it cannot be disregarded or ignored and it must be obeyed by . We are, therefore, of the view that, in any event, irrespective of whether the impugned Act is constitutionally valid or not, is bound to obey the writ of Mandamus issued by the and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 to Class III and Class IV employees. Now, to the grounds of constitutional challenge Re: Ground A : ", "This ground raise-& the question whether the impugned Act is violative of clause, (2) of Article 31. This clause provides safeguards against compulsory acquisition or requisitioning of property by laying down conditions subject to which alone property may be compulsorily acquired or requisitioned and at the date when the impugned Act was enacted, it was in the following terms \"No property shall be, compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no, such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash Clause (2) in this form was substituted in Article 31 by the Constitution (Twenty-fifth Amendment) Act, 1971 and by this amending Act, clauses (2A) and (2B) were also introduced in Article 31 and they read as follows :- ", "\"(2A) Where a, law does not provide for the transfer of the ownership or right to, possession of any property to the or to a corporation owned or controlled by the , it shall not be deemed to provide for the compulsory acquisition or requisitioning of Property, notwithstanding that it does any person of his property. ", "(2B) Nothing in sub-clause (f) of clause (1) of Article 19 shall effect any such law as is referred to in clause (2) The argument of the petitioners was that the right of Class III and Class IV employees to annual cash bonus' for the, years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under Act provided for Insurance, Corporation 12, it was a law providing for compulsory acquisition of property as contemplated under clause (2A) of Article 31 and it was, therefore, required to meet the challenge of Article 31 , clause (2). The compulsory acquisition of the right to annual cash bonus' sought to be effectuated by the impugned Act, said the petitioners, was not supported by public purpose nor did the impugned Act. provide for payment of any compensation for the same and hence the impugned Act was void as contravening clause (2) of Article 21. ", "The first question which arises for consideration on this. contention is whether the right of Class III and Class IV employees to 'annual cash bonus' for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under the was property so as to attract the inhibition of Article 31 , clause (2). submitted that at the date when the, impugned Act was enacted, Class III and Class IV employees had no absolute right to receive 'annual cash bonus' either for the, year 1st April, 1975 to 31st March, 1976 or for the year 1st April, 1976 to 31st March, 1977 and there was, therefore,, no property which could be compulsorily acquired under the impugned Act. The argument of was that (Staff) Regulations, 1960 which laid down the terms and conditions of services inter alia of Class III and Class IV employees did not contain any provision for payment of bonus except Regulation 58 and since under this Regulation, grant of annual cash bonus by was subject to such directions as might issue, the right of Class III and Class IV employees to receive annual cash bonus could not be said to be an absolute right. It was a right which was liable to, be set at naught by any directions that might be issued by and in fact did issue a direction to not to make payment of bonus to the employees \"without getting the same cleared by the Government\" and consequently, Class III and Class IV employees had no absolute right to claim bonus. The result, according to , also followed on a proper interpretation of clauses 8 (i) and 8(ii) of the , for it was clear on a proper reading of these two clauses that annual cash bonus payable to Class III and Class IV employees under clause 8 (ii) was, by reason of clause 8 (i) , subject to such directions as might issue from time to time and having directed that no further payment of bonus should be made to the employees, Class III and Class TV employees were not entitled to claim annual cash bonus from . This argument of is plainly erroneous and it is, not possible to accept it. Regulation 58 undoubtedly says that non-profit sharing bonus may be granted by the was property and since the impugned transfer of the ownership of this right to the which was 'State' within the meaning of Article 35 7 to its employees, subject to such directions as may issue and, therefore, if issues a direction to the contrary, nonprofit sharing bonus cannot be granted by to any class of employees. But here, in the present case, grant of annual cash bonus by to Class III and Class IV employees under clause 8(ii) of the was approved by as provided it clause 12 and the 'direction contemplated by Regulation 58 was given by that annual cash bonus may be granted as provided in clause 8(ii) of the . It was not competent to thereafter to issue another contrary direction which would have the effect of compelling to commit a breach of its obligation under section'18, sub-section (1) of the Industrial Disputes Act , 1947 to pay annual cash bonus in terms of clause 8 (ii) of the . to clause 8(i) of the , it is true that under this, clause non-profit sharing bonus could be granted by 'subject to such directions as may issue from time to time but these words giving overriding power to to issue directions from time to time are conspicuously absent in clause 8(ii) and it is difficult to see bow they could be projected or read into that clause,. Clauses 8(i) and 8(ii are distinct and independent clauses and while clause 8(i) enacts a general provision that non-profit sharing bonus may be paid by to Class III and Class IV employees subject to such directions as might issue from time to time, clause 8(ii) picks out one kind of non-profit sharing bonus and specifically provided that annual cash bonus shall be paid to all Class III and Class IV employees at the rate of 15 per cent of the annual salary and this specific provision in regard to payment of annual cash bonus is made subject to only the approval of which was admittedly obtained. It is, therefore, clear that Class III and Class IV employees had absolute right to receive annual cash bonus from in terms of clause 8(ii) of the and it was not competent to to issue any directions to to refuse or withhold payment of the same. It is true that under clause 8(ii) of the the annual cast bonus for a particular year was payable at the rate of 15 per cent. of the annual salary actually drawn by the employee in respect of the financial year to which the bonus, related and it would, therefore, seem that the bonus was payable at the end of. the year and not before, but it was not disputed on behalf of that even an employee who retired or resigned before the, expiration of that year, as also the heirs of a deceased employee who died during the. currency of the year, were entitled to receive, proportionate bonus and in fact recognised this to be the correct position in its administrative instructions dated 29th March, 1974 and actually paid proportionate bonus to the retiring- or resigning employee and the heirs; of the deceased employee. The annual cash bonus payable under clause 8(ii) of the , therefore, accrued from day to-day, though payable in case of retirement resignation or death, on the happening of that contingency and otherwise, on the expiration of the year to which the bonus related. There was thus plainly and unquestionably a debt in respect of annual cash bonus accruing to each Class III or Class IV employees from day-to-day and consequently, on the expiration of the year 1st April, 1975 to 31st March. 1976, the annual cash bonus payable under clause 8(ii) of the was a debt due and owing from to each Class III or Class IV employee and so also at the date when the impugned Act came into force, each Class III or Class IV employee was entitled to a debt due and owing to him from in respect of the annual cash bonus from 1st April, 1976 upto that date. The question is whether these debts due and owing from were property of Class III and Class IV employees within the meaning of Article 31(2). So also, was the right of each Class III and Class IV employee to receive annual cash bonus for the period from the date of commencement of the impugned Act upto 31st March, 1977 property for the purpose of Article 31(2) ? These questions we shall now proceed to consider, for on the answer to them depends the applicability of Article 31(2). ", "It is clear from the scheme of fundamental rights embodied in Part III of the Constitution that the guarantee of the right to property is contained in Article 19 (1 ) (f) and clauses ( 1 ) and (2) of Article 31. It stands to reason that 'property' cannot have one meaning in Article 19(1) ", "(f), another in Article 31 clause (1) and still another in Article 31 , clause (2). 'Property' must have the same connotation in all the three Articles and since these are constitutional provisions intended to secure a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind. While discussing the scope and content of Entry 42 in List III of the Seventh Schedule to the Constitution, which confers power on and the to legislate with respect to \"acquisition and requisitioning of property\" It was J., speaking on behalf of the majority in R. India(1) that property which can be compulsorily aquired by legislation under this Entry means the \"highest anything, being that right which one has to with respect to \"acquisition and requisition of property\", it was pointed out by , C. Cooper v. Union of acquired by legislative a man can have to lands or tenements, goods or chattels which does not depend on another's courtesy : it includes ownership, estates and interests in corporeal things, and also rights such as trade-marks, copyrights, patents and even rights in persona capable of transfer or transmission, such, as debts; and signifies a beneficial right to or a thing considered as having a money value, especially with reference to transfer or succession, and to their capacity of being injured\". It would, therefore, seem that, according to the decision of the majority in , debts and other rights in personam capable of transfer or transmission are property which can form the subject- matter of compulsory acquisition. And this would seem to be unquestionable on principle, since even jurisprudentially debts and other rights of action are property and there is no (1) 3 S.C.R. 530. ", "359 ", "reason why they should be excluded from the protection of the constitutional guarantee. , C.J., had occasion to consider the true nature of debt in (1) where the question was whether the Privy Purse payable to the Ruler was property of which he could be said to be deprived by the Order of the President withdrawing his recognition as Ruler. The learned Chief Justice, making a very penetrating analysis of the jural relationship involved, in a debt, pointed out that \" a debt or a liability to pay money passes through four stages. First there is a debt not yet due. The debt has not yet become a part of the obliger's 'things' because. no net liability has yet arisen. The Second stage is when the liability may have arisen but is not either ascertained or admitted. Here again the amount due has not become a part of the obligor's things, The third stage is reached when the liability is both ascertained and admitted. Then it is property proper of the debtor in the creditor's hands. The law begins to recognise such property in insolvency, in ,dealing with it in fraud of creditors, fraudulent preference of one creditor against another, subrogation, equitable estoppel, stoppage intransitive etc. A credit- debt is then a debt fully provable and which is fixed and absolutely owing. The last stage is when the debt becomes a judgment debt by reason of a decree of a .\" and apply- ing this test, concluded that the Privy Purse would be property and proceeded to add : \"As, soon as an Appropriation Act is passed there is established a credit- debt and the outstanding Privy Purse becomes the property of the Ruler in the hands of Government. It is also a sum certain and absolutely payable.\" Since the effect of the Order of the President was to deprive the, Ruler of his Privy Purse which was his property the learned Chief Justice held that there was infringement of the fundamental right of the Ruler under Article 3 1 (2). , J., also pointed out in a separate but concurring judgment that since the right to get the Privy Purse was a legal right \"enforceable through the courts\", it was undoubtedly property and its deprivation was sufficient to, found a petition based on contravention of Article 31(2). It was also held by this in . (2) that a right to receive cash grant annually from the was property within the, meaning of that expression in Article 19(1)(f) and clause (2) of Article 31. The right to pension was also regarded as property for the purpose of Article 19(1) (f) by the decisions of this in (1) and (4). This adopted the same line of reasoning when it said in (5) that \"unpaid accumulations represent the obligation of the, employers to the employees and they are the property of the employees\". , J., speaking on behalf of the , observed that the obligation to, the employees owned by the employers was (1) 3 S.C.R. 489. ", "(3) [1971] Supp. S.C.R. 634. ", "(4) [1973] 2 S.C.R. 405. ", "(5) [1974] 3 S.C.R. 760. ", "(2) [1968] 3 S.C.R. 9. ", "360 ", "\"property from the standpoint of the employees\". It would, therefore, be seen that Property within the meaning of Article 19(1)(f) and clause (2) of Article 31 comprises every form of property, tangible or intangible, including debts and chooses in action, such as unpaid accumulation of wages, pension, cash grant and constitutionally protected Privy Purse. The debts due and owing from in respect of annual cash bonus were, therefore, clearly property of Class III and Class IV employees within the meaning of Article 31 , clause (2). And so also was their right to receive annual cash bonus for the period; from the date of commencement of the impugned. Act upto 31st March, 1977, for that was a legal right enforceable through a court of law by issue of a writ of Mandamus, Vide the observation of , J., at page 194 in the Privy Purse case. ", "But a question was raised on behalf of the Respondents whether debts and choses in action, though undoubtedly property, could form the subject-matter of compulsory acquisition so as to attract the applicability of Article 31 , clause (2). There is divergence of opinion amongst jurists in the United s of America on this question and though in the earlier decisions of the American courts, it was said that the power of eminent domain cannot be exercised in respect of money and choses in action, the modern trend, as pointed by on Eminent Domain, Vol. 1, page 99, para 2, seems to be, that the right of eminent domain can be exercised on choses in action. But even if the preponderant view in the United s were that choses in action cannot come within the power of eminent domain, it would not be right to allow us to be unduly influenced by this view in the interpretation of the scope and ambit of clause (2) of Article 31. We must interpret Article 31 , clause (2) on its own terms without any preconceived notions borrowed from the law in the United s on the subject of eminent domain. Let us see how this interpretative exercise has been performed by this ( in the decisions that have been rendered so far and what light they throw on the question as to whether choses in action can be compulsorily acquired under clause (2) of Article 31. We shall confine our attention only to the question of compulsory acquisition of choses in action and not say anything in regard to compulsory acquisition of money, for in these appeals the question arises only in regard to choses in action and it is not necessary to consider whether money can form the subject-matter of compulsory acquisition. This question came to be considered by a constitution Bench of this in (',). Section 4(b) of the Bihar Land Reforms Act, 1950, which provided. for vesting in the , of arrears of rent due to the pro- prietors or tenure holders for the period prior to the date of vesting of the estates or tenures held by them, on payment of only 50 per cent of the amount as compensation, was challenged as constitutionally invalid on the ground that there was no public purpose for which such acquisition could be said to have been made. The necessity for existence of public purpose was not sought to be spelt out from Article 31 , clause (2), because even if there were violation of that (1) S.C.R. 889. ", "361 ", "clause, it would be protected by Article 31A and the Ninth Schedule read with Article 31-B , the. Act being included as Item in the Ninth Schedule, but it was said that public purpose was an essential element in the very nature of the power of acquisition and even apart from Article 31 , clause (2), no acquisition could be made save for a public purpose. It was in the context of this argument that , J., observed that money and choses in action could not be taken under the power of compulsory acquisition, since the only purpose which such taking would serve would be to augment the revenues of the and that would clearly not be a public purpose. The learned judge pointed out at pages 942- 944 of the Report : ", "\"It is a well accepted proposition of law that property of individuals cannot be appropriated by the State under the power of compulsory acquisition for the, mere purposes of adding to the, revenues of the State-no instance is known in which it has been taken for the mere purpose of raising a revenue by sale, or otherwise Taking money under the right of eminent domain, when it must be compensated in money afterwards is nothing more or less than a forced loan Money or that which in ordinary use passes as such and which the Government may reach by taxation-and also rights in action which can only be available when made to produce money, cannot be taken under this power\". ", "for the taking would not be for a public purpose, and proceeded to and that the only purpose, to support the acquisition of the arrears of rent was \"to raise revenue to pay compensation to some of the zamindars whose estates are being taken\" and this purpose did not fall within any definition, however, wide, of the phrase 'public purpose and the law was, therefore, to this extent unconstitutional. , J., came to the same conclusion and observed at page 961 of the Report \"Money as such and also rights in action are ordinarily excluded from this List by American jurists and for good reasons. There could be no possible necessity for taking either of them under the power of eminent domain. Money in the hands of a citizen can be reached by the exercise of the power of taxation, it may be confiscated as a penalty under judicial order-But, as has pointed out, taking money under the right of eminent domain when it must be compensated by money afterwards could be nothing more or less than a forced loan and it is difficult to say that it comes under the head of acquisition and is embraced within its ordinary connotation.\" ", ", J., also took the same view and held that money. and choses in action were exempt from compulsory acquisition \"not on the ground that they are movable property, but on the ground that generally speaking there could be no public purpose in their acquisition\". , C.J., and , J., on the other hand held that the arrears of rent constituted a debt due by the tenants. It was nothing but an actionable claim, against the tenants which was undoubtedly a species of 'property' which was assignable and, therefore, it could equally be acquired by the as a species of 'property'. These two rival views were referred to by speaking on behalf of the in .(1) but the learned Judge did not treat the majority view as finally settling the law on the subject. It appears that in the subsequent case of (supra) Hegde, J., delivering the judgment of the observed that the majority view in case was followed by this in case, but we do not think that this observation correctly represents what was decided in case. , rested his decision in case on alternative grounds : if, the impugned section provided for the acquisition of money, and if money could not be acquired, then the section was void under Article 19 (1) (f) as imposing an unreasonable restriction on the right to hold property. If, on the other hand, money could be acquired , the section was void as offending Article 31 , clause (2) since the section did not provide for payment of compensation. The decision in case did not, therefore, lay down that money and choses in action could not be acquired under Article 31 , clause (2). ", "But in (supra) this did hold that money and choses in action could not form the subject-matter of acquisition under Article 31 , clause (2) and the reason it gave for taking this view was the same as that which prevailed with the majority judges in case. This held that the power of compulsory acquisition conferred under Article 31 , clause (2) could not be utilised for enriching the coffers of the ; that power could be exercised only for a public purpose and augmenting the resources of the could not be regarded as public purpose. , J., speaking on behalf of the , pointed out that if it were otherwise, \"it would be permissible for the legislatures to enact laws acquiring all public debts due from the , annuity deposits returnable by it and provident fund payable by it by providing for the payment of some nominal compensation to the persons whose rights are acquired, as the acquisitions in question would augment the resources of the \", but nothing so bad could be said to be within the contemplation of clause (2) of Article 31. Let us first examine on principles whether this reasoning qua choses in action is sound and commends itself for our acceptance. This premise on which this reasoning is based is that the only purpose for which choses in action may be acquired is augmenting the revenues of the and there can be no other purpose for such (1) S.C.R. 1122. ", "363 ", "acquisition. But this premise is plainly incorrect and so is the reasoning based upon it. Why can choses in action 'not be acquired for a public purpose other than mere adding to the revenues of the ? There may be debts due and owing by poor and deprived tillers, artisans and landless labourers to moneylenders and the may acquire such debts with a view to relieving the weak and exploited debtors from the harassment and oppression to which they might be subjected by their economically powerful creditors. The purpose of the acquisition in such a case would not be to enrich the coffers of the . In fact, the coffers of the would not be enriched by such acquisition, because having regard to the financial condition of the debtors, it may not be possible for the to recover much, or perhaps anything at all, from the impoverished debtors. The purpose of such acquisition being relief of the distress of the poor and helpless debtors would be clearly a public purpose. We have taken one example by way of illustration, but in a modern welfare , dedicated to a socialist pattern of society, myriad situations may arise where it may be necessary to acquire choses in action for achieving a public purpose. It is not correct to say that in every case where choses in action may be acquired, the purpose of acquisition would necessarily and always be augmenting of the revenues of the and nothing else. Even the theory of forced loan may break down in case of acquisition of choses in action. There is a fundamental difference between chose in action and money, in that the former has not the same mobility and liquidity as the latter and its values is not measured by the amount recoverable under it, but it depends on a variety of factors such as the financial condition of the person liable, the speed and effectiveness of the litigative process and the eventual uncertainty as to when and to what extent it may be possible to realise the chose in action. Even after the chose in action is acquired, the may not be able to recover the amount due under it and there may even be cases where the chose in action may be released by the . Where money is given as compensation for taking of money, the theory of forced loan may apply,. but it is difficult to see how it can be applicable where chose in action is taken and money representing its value, which in a large majority of cases would be less than the amount recoverable under it, is given as compensation. Moreover, the theory of forced loan stands considerably eroded after the amendment of Article 31 , clause (2) by the Constitution (Twenty-fifth Amendment) Act, 1971, because under the amended clause, even if an amount less than the just equivalent is given as compensation for acquisition of property, it would not be violative of the constitutional guarantee. It is true, and this thought was also expressed by , J., and myself in our separate but concurring Judgment in the .(1) that, notwithstanding the amended clause (2) of Article 31 , the legislature would be expected, save in exceptional socio-historical setting to provide just compensation for acquisition of property, but if for any reason the legislature provides a lesser amount than the just equivalent, it would not be open to challenge on the ground of infringement of clause (2) of Article (1) [1974] 1 S.C.R.671. ", "364 ", "31. Then, how can the theory of forced loan apply when chose in action is acquired and what is paid for it is not the just equivalent but a much lesser amount, which is of course not illusory. Moreover, there is also one other fallacy underlying the argument that there can be no public purpose in the acquisition of choses in action and that is based on the assumption that the public purpose contemplated by Article 31 , clause (2) lies in the use to which the pro- perty acquired is to be put as for example, where land or building or other movable property is acquired for being used for a public purpose. But this assumption is hot justified by the language of Article 31 , clause (2), because all that this clause requires is that the purpose for which the acquisition is made must be a public purpose, or, in other words, the, acquisitions must be made to achieve a public purpose. Article 31 , clause (2) does not require that the property acquired must itself be used for a public purpose. So long as the acquisition subserves a public purpose, it would satisfy the requirement of clause (2) of Article 31 and, therefore, if it can be shown that the acquisition of choses in action is for subserving a public purpose, it would be constitutionally valid. , J., expressed an apprehension in (supra) that if this view were accepted, it would be permissible for the legislature to enact laws acquiring the public debts due from the , the annuity deposits returnable by it and the provident fund payable by it by providing for payment of some nominal compensation to the persons whose rights were acquired. We do not think this apprehension is well founded. It is difficult to see what public purposes can possibly Justify a law acquiring the public debts due to the or the annuity deposits returnable by it or the provident fund payable by it. If the legislature enacts a law acquiring any of these choses in action, it could only be for the purpose of augmenting the revenues of the or reducing expenditure and that would clearly not be a public purpose and the legislation would plainly be violative of the constitutional guarantee embodied in Article 31 , clause (2). We would, therefore, prefer the minority view of , J., in case (supra) as against the majority view of , J., , J. and , J. So much on principle. Turning now to the authorities, we find that, apart from the view of the majority judges in case and the decision in the (supra), there is no other decision of this Court which has taken the view that choses in action cannot be compulsorily acquired under Article 31 , clause (2). There are in fact subsequent decisions which clearly seem to suggest the, contrary. We have already referred to case. The majority judgment case gives the widest meaning to 'property which of , J., in that can be, compulsorily acquired and includes within it ::rights in personam capable of transfer or transmission, such as debts. The majority view in case (supra) and the decision in (supra) on this point can no longer be regarded as good law in view of this statement of the law in the majority judgment of , J. Then again, in the Privy Purse case (supra), , C.J., held that the Privy Purse payable to a Ruler was a credit-debt owned by him and since he was deprived of it by the Order of the President, there was violation of his- fundamental right under Article 31 , clause (2). The learned Chief Justice thus clearly recognised that debt or chose in action could form the subject matter of compulsory acquisition under Article 31 , clause (2). , J., also took the same view in his separate but concurring judgment in the Privy Purse case. It will, therefore, be seen that the trend of the recent decisions has been to regard debt or chose in action as property which can be compulsorily acquired under clause (2) of Article 31. We are accordingly of the view that the debts due and owing from to Class III and Class IV em- ployees in respect of annual cash bonus were 'property' within the meaning of Article 3 1 , clause (2) and they could be compulsorily acquired under that clause. The question, however, still remains whether by the impugned Act there was compulsory acquisition of the debt due and owing from to Class III and Class IV employees in respect of annual cash bonus. It was not disputed on behalf of that if the impugned Act had the affect of compulsorily acquiring these debts belonging to Class III and Class IV employees, it would be void as offending Article 31 , clause (2), since it admittedly did not provide for payment of any compensation. The ment of Objects and Reasons undoubtedly said that the provisions of the Settlement in regard to payment of annual cash bonus were being set aside with effect from 1st April, 1975 with a view to enabling to make ex-gratia payment to the employees \"at the rates determined on the basis of the general Government policy for making ex-gratia payments to the, employees of non-competing public sector undertaking\". But the impugned Act did not contain any provision to that effect and Class III and Class IV employees were deprived of the debts due and owing to them without any provision in the statute for payment of compensation. The learned Attorney- General on behalf of , however, strenuously contended that there was no compulsory acquisition of the debts due and owing to, Class III and Class IV employees under the impugned Act, but all that the impugned Act did was to extinguish those debts by annihilating the provisions of the Settlement in regard to payment of annual cash bonus with effect from 1st April, 1975. The debts due and owing from to Class III and Class IV employees, said the learned Attorney-General, were extinguished and not compulsorily acquired and hence there was no contravention of Article 31 , clause (2). Now, prior to the Constitution (Fourth Amendment) Act, 1955, which introduced clauses (2A) and (2B) in Article 3 1 , there was considerable controversy as to the inter-relation between clauses (1) and. (2) and that coloured the interpretation of the words \"taken possession of or acquired\" in clause (2) as it stood prior to the amendment. The majority view in .(1) and of (1) S.C.R. 587. ", "6- :(1) was that clauses (1) and (2) of Article 31 were not mutually exclusive; but they dealt with same topic and the deprivation contemplated in clause (1) was no, other than the compulsory acquisition or taking possession of property referred to in clause (2) and hence where the deprivation was so substantial as to amount to compulsory acquisition or taking possession, Article 31 was attracted. The introduction of clause ('-)A) in Article, 31 snapped the link between clauses (1) and (2) and brought about a dichotomy between these two clauses. Thereafter, clause. (2) alone dealt with compulsory acquisition or requisitioning of property by the and clause (1) dealt with deprivation of property in other ways and what should be regarded as compulsory acquisition or requisitioning of property for the Purpose of clause (2) was defined in clause (2A). It was if clause (2A) supplied the dictionary for the mean of 'compulsory acquisition and requisitioning of property in clause (2). Clause (2A) declared that a law shall not be deemed, to provide for the compulsory acquisition or requisitioning of property, if it does not provide for the transfer of the ownership or right to possession of the property to the or to a corporation owned or controlled by the . It is only where a law provides for the transfer of ownership or right to possession of any property to the or to a corporation owned or controlled by the that it would have to meet the challenge of clause (2) of Article 31 as a law providing for compulsory acquisition or requisitioning of property. Whenever, therefore, the constitutional validity of a law is challenged on the ground of infraction of Article 31 , clause (2), the question has to be asked whether the law provides for the transfer of ownership or right to possession of any property to the or to a corporation owned or controlled by the . Here, is a corporation owned by the as its entire capital has been provided by the- Central Government. The debts due, and owing to Class III and Class IV employees from are cancelled or extinguished by the impugned Act. Does that amount to transfer of ownership of any property to within the meaning of clause (2A) of Article 31 ? If it does, Article 31 , clause (2) would be attracted, but not otherwise. That depends on the true interpretation of Article 31 , clause (2A). ", "Now, whilst interpreting Article 31 , clause (2A), it must be remembered that the interpretation we place upon it will determine the scope and ambit of the constitutional guarantee under clause (2) of Article 31. We must not, therefore, construe clause (2A) in a narrow pedantic manner nor adopt a doctrinaire or legalistic approach. Our interpretation must be guided by the substance of the matter and not by lex scripts. When clause (2A) says that in order to attract the applicability of clause (2) the law must provide for the transfer of ownership of property to the or to a corporation owned or controlled by the , it is not necessary that the law should in so many words provide for such transfer. No particular verbal formula need be adopted. It is not a ritualistic mantra which is required to be repeated in the law. What (1) S.C.R. 674. ", "3 67 has to be considered is the substance of the law and not its form. The question that is to be asked is : does the law in substance provide for transfer of ownership- of property, whatever be the linguistic formula employed ? What is the effect of the law : does it bring about transfer of ownership of property ? Now, 'transfer of ownership is also a term of wide import and it comprises every mode by which ownership may be transferred from one person to another. The mode of transfer may vary from one kind of property to another : it would depend on the nature of the property to be transferred. And moreover, the court would have to look to the substance of the transaction in order to determine whether there is transfer of ownership involved in what has been brought about by the law. ", "There is no doubt that in the present case the impugned Act extinguished or put an end to the debts due and owing from to Class III and Class IV employees. that was the, direct effect of. the impugned Act and it can, therefore, be legitimately said that in substance the impugned Act provided for extinguishment of these debts, though it did not say so in so many words. This much indeed was not disputed on behalf of and the controversy between the parties only centred round the question whether the extinguishment of these debts involved any transfer of ownership of property to . The learned Attorney General on behalf of sought to make a distinction between extinguishment and transfer of ownership of a debt and contended that when ownership of a debt is transferred, it continues to exist as a debt in the hands of the transferee, but when a debt is extinguished it ceases to exist as a debt and it is not possible to say that the debtor has become the owner of the debt. There can be no transfer of ownership of a debt, said the learned Attorney-General unless the debt continues to exist as such in the hands of the transferee, and, therefore, extinguishment of a debt does not involve transfer of ownership of the debt to the debtor. This contention of the learned Attorney-General, though attractive at first blush, is, in our opinion not well founded. It is not correct to say that there can be no transfer of ownership of a right or interest unless such right or interest continues to have a separate identifiable existence in the hands of the transferee. It is not difficult to find instances where ownership of a right or interest may be transferred from one person to, another by extinguishment. Take for example, a case where the lessor terminates the lease granted by him to the lessee by exercising his right of forfeiture or the lessee surrenders the lease in favour of the lessor. The lease would in such a case come to an end and the interest of the lessee would be extinguished and correspondingly, the reversion of the lessor would be enlarged into full ownership by the return of the leasehold interest. There would clearly be transfer of the lease-hold interest from the lessee to the lessor as a result of the determination of the lease and the extinguishment of the interest of the lessee. The same would be the position where A law provides for cancellation, of the lease and in such a case, if the lessor is the or a corporation owned or controlled by the , it would amount to compulsory acquisition of the leasehold interest of the lessees within meaning of clause (2A) of Article 31. It was in fact to held by this and in our opinion rightly in (1) where , J., speaking on behalf of the majority, pointed out at page 149 that if \"the is the landlord of an estate and there is a lease of that property and a law provides for the extinguishment of leases held in an estate-it would properly fall under the category of acquisition by the because the beneficiary of extinguishment would be the \". Where by reason of extinguishment of a right or interest of a person, detriment is suffered by him, and a corresponding benefit accrues to the , there would be transfer of ownership of such right or interest to the . The question would always be : who is the, beneficiary of the extinguishment of the right or interest effectuated by the law? If it is the , then there would be transfer of ownership of the right or interest to the -, because what the owner of the right or interest would have lost by reason of the extinguishment would be the benefit accrued to the . This was precisely the reason why , J., speaking on behalf of the observed in the (supra) that it was possible to view the abolition of cash grants under the Madhya Pradesh law impugned in that case \"as a statutory transfer of rights of the grantees to the \". It was pointed out in that case that there was no difference between taking by the of money that is in the hands of others and the abrogation of the liability of the to make payment to others, for in the former case the would be compulsorily taking others' property, while in the latter it would be seeking to appropriate to itself the property of others which is in its hands. It is, therefore, clear that when a debt due and owing by the or a corporation owned or controlled by the is extinguished by law, there is transfer of ownership of the money representing the debt from the creditor to the or the owned/controlled corporation. So long as the debt is due and owing to, the creditor, the or the owned/controlled corporation is under a liability to pay the amount of the debt to the creditor and, therefore, if the amount of the debt is X, the total wealth of the creditor would be A plus X, while that of the or owned/controlled corporation would be B minus X. But if the debt is extinguished, the total wealth of the creditor would be reduced by X and that of the or owned/controlled corporation augmented by the same amount. Would this not be in substance and effect of transfer of X from the creditor to the or owned/controlled corporation ? The extinguishment of the debt of the creditor with corresponding benefit to the or owned/controlled corporation would plainly and indubitably involve transfer of ownership of the amount representing the debt from the former to the latter. This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the or owned/controlled corpo- ration cannot obtain benefit at the cost of the creditor and yet avoid the applicability of Article 31 , clause (2). The verbal veil constructed by employing the device of extinguishment of debt cannot be permitted to conceal or hide the real nature of the transaction. It is necessary to remember that we are dealing here with a case where a constitutionally guaranteed right is sought to be enforced and the protection of such right should not be allowed to be defeated or rendered illusory by legis- ", "3 69 lative stratagems. The courts should be ready to rip open such stratagems and devices and find out whether in effect and substance the legislation trenches upon any fundamental rights. The encroachments on fundamental rights are often subtle and sophisticated and they are disguised in language which apparently seems to steer clear of the constitutional inhibitions. The need for a perspective and alert is, therefore, very great and the courts too have to adopt a bold and dynamic approach, if the fundamental rights are to be protected against dilution or erosion. In the light of this discussion, the conclusion is inevitable that the direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to and since is a corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of these debts by the State within-the meaning of clause (2A) of Article 31. If that be so, the, impugned Act must be held to be violative of Article 31 , clause (2) since it did not provide for payment of any compensation at ail. for the compulsory acquisition of these debts. Re : Ground (B) Since the impugned Act has been held void as offending Article 3 1 , clause (2) under Ground (A), it is unnecessary to consider Ground (B) based on infraction of Article 19 ( ", "1) (f). It is the settled practice of this Court to decide no more than what is absolutely necessary for the decision of a case. Moreover, once it is held that-the impugned Act falls within Article 31 , clause (2), its validity cannot be tested by reference to Article 19 (1) (f) by reason of clause (2B) of Article 31. Hence we do not-propose to discuss the very interesting arguments advanced before us in regard to Article 19 (1) (f). ", "We accordingly allow the writ petitions and declare (Modification of Settlement) Act, 1976 void as offending Article 31 , clause (2) of the Constitution and issue a writ of Mandamus directing the union of India and to forebear from implementing or enforcing the provisions of that Act and to, pay annual cash bonus for the years 1st April, 1975 to 3 1 st March, 1976 and 1 st April, 1976 to 3 1 st March, 1977 to, Class III and Class IV employees in accordance with the terms of clause 8(ii) of the Settlement dated 24th January, 1974. The respondents will pay the costs of the writ petitions to the petitioners. ", "ORDER We agree with the conclusion of Brother but prefer to rest our decision on the ground that the impugned Act violates the provisions of Article 31(2) and is, therefore, void. We consider it unnecessary to express any opinion on the effect of the judgment of in W.P. No. 371 of 1976. ", "P.B.R. Petitions allowed. 3 70"], "relevant_candidates": ["0000001566", "0000041868", "0000315432", "0000660275", "0000681436", "0000973363", "0001018531", "0001240174", "0001298680", "0001657891", "0001758160", "0001880952", "0001882267", "0001963913", "0060443377"]} {"id": "0000056195", "text": ["PETITIONER: TAHSILDAR SINGH AND ANOTHER Vs. RESPONDENT: THE STATE OF UTTAR PRADESH DATE OF JUDGMENT: 05/05/1959 BENCH: , BHUVNESHWAR P. BENCH: , BHUVNESHWAR P. , SYED JAFFER , J.L. , A.K. SUBBARAO, K. , M. CITATION: 1959 AIR 1012 1959 SCR Supl. (2) 875 CITATOR INFO : R 1960 SC 706 (27,28) R 1962 SC 605 (26) R 1964 SC1563 (8) R 1970 SC1006 (7) RF 1972 SC1004 (82) E 1974 SC 308 (1,6,10) RF 1975 SC 667 (95) RF 1975 SC1758 (18) D 1977 SC1579 (28) RF 1981 SC1068 (3) ACT: Criminal Trial-Police ments-Use of-Omission, when amounts to contradiction-Code of Criminal Procedure, 1898 (V of 1898), s. 162-Indian Evidence Act, 1872 , s. 14 .5. HEADNOTE: A music performance attended by a large number of persons including two police informers and was going on on a platform in front of the house of one . At that time there was a full moon and the light of a gas lamp and several lanterns. The informers had placed their guns on a cot close to the platform and one was sitting on that cot. The accused along with 15 or 20 persons suddenly arrived armed with fire arms to kill the informers and stood behind a well on the southern side, from where they shouted that no one should run away and advanced firing shots. Two persons were killed on the spot. was hit and he ran northwards pursued by the culprits and was also shot dead. The culprits turned over the dead bodies and on seeing 's face they exclaimed that informer had been killed. They then passed in front of 's house and disappeared. While going they carried away 's gun from the cot. The appellants and seven others were sent up for trial for this occurrence. At the trial the defence alleged that prosecution had developed its case. The police statements of the eye witness did not mention the facts regarding the scrtitiny of the (lead bodies and the presence of the gas lantern, and the defence counsel put the following two questions with respect to these omissions to the first eye witness produced :- 1. \" Did you state to the Investigating Officer that the gang rolled the dead bodies of , and and scrutinised them and did you tell him that the face of resembled with that of the deceased ?\" 2. \" Did you state to the Investigating Officer about the presence of the gas lantern ?\" The judge disallowed the questions and on account of this order similar questions were not put to the other eye witnesses. The judge convicted the appellants under s. 302 Indian Penal Code and sentenced them to death. The appellants appealed to and made an application alleging that the judge had not allowed the defence counsel to put omissions amounting to material contradictions to 876 the eye witnesses and prayed that the eye witnesses be summoned so that the questions disallowed may be put to them. Though held that the omissions amounted to contradictions and that the judge had wrongly dis- allowed cross-examination with respect thereto, it found that even after ignoring these two circumstances there were other facts which showed that the culprits had come close to the eye witnesses and that they had unmistaken opportunity of identifying the appellants in the light of the full moon and the lanterns. accordingly dismissed the application for summoning the eye witnesses holding that no prejudice had been caused to the appellants by the disallowance of the cross-examination in respect of omissions and also dismissed the appeals and confirmed the convictions and sentences of the appellants. Held, (Per , , and , .) that the omissions did not amount to contradictions -and that the judge was right in disallowing cross-examination in respect thereof. A statement to the police could be used under s. 162 of the Code only for the purpose of contradicting a statement in the witness box under the second part of s. 1 , Evidence Act , but it could not be used for the purpose of cross-examining the witness under the first part of s. 145 . A statement made to the police but not reduced to writing, could not be used for any purpose, not even for contradiction. It was incorrect to say that all omissions in regard to important features of the incident which were expected to be included in the statement made before the police, should be treated as contradictions. An omission in the police statement could amount to a statement and be used as a contradiction only when (i) it was necessarily implied from the recital or recitals found in the statement, (ii) it was negative aspect of a positive recited in the statement or (iii) when the statement before the police and that before the could not stand together. It was for the the trial judge to decide in each case, after comparing the part or parts of the statement recorded by the police with that made in the witness-box, whether the recital intended to be used for contradiction was one of the nature indicated above. In , (1933) I.L.R. 56 Mad. 475 ; In , I.L.R. (1944) Mad. 897; , A.I.R. 1952 All 289; v. , A.I.R. 1926 Pat. 20, v. , I.L.R. (1937) Nag. 277, referred to. , A.I.R. 1957 All. 239; v. Emperor, A.I.R. 1932 Lah. 103; , A.I.R. 1938 Pat. 579; of M. P. v. , A.I.R. 1958 M.P. 13, disapproved. Held, (Per and , .) that the questions that were put by the defence counsel were properly ruled out by the judge as they did not set up contradictions, but attempted to obtain from the witnesses versions of what they 877 had stated to the police which were then to be contradicted. The reference to s. I45 Evidence Act in s. 162 of the Code of Criminal Procedure brings in the whole of the manner and machinery Of S. I45 and not merely the second part. An accused is entitled to cross-examine the witness under the first part of s. 145 with respect to the police statement. Relevant and material omissions amount to vital contradictions which can be established by crossexamination and confronting the witness with his previous statement to the police. In the circumstances of the present case even if the defence had been allowed to put questions concerning the omissions, it would not have affected the credibility of the witnesses and no prejudice was caused to appellants by the disallowance of the questions. JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 67 of 1958. ", "Appeal by special leave from the judgment and order dated September 11, 1957, of in Criminal Appeal No. 1388 of 1956 and Referred Trial No. 133 of 1956, arising out of the judgment and order dated September 8, 1956, of at Etawah in Sessions Trial Nos. 83 and 109 of 1955. and , for the appellants. , and , for the respondent. ", "1959. May 5. The judgment of , , and , . was delivered by , J. and the judgment of and ., was delivered by J. ", "SUBBA RAO, J.-This appeal by special leave raises the question of construction of s. 162, Code of Criminal Procedure. On June 16,1954, one of Nayapura gave a dinner at his home and a large number of his friends attended it. After the dinner, at about 9 p. m., a music performance was given in front of the house of neighbour, . About 35 or 40 guests assembled in front of 's platform to hear the music. The prosecution case is that a large number of persons armed with fire-arms suddenly appeared near a well situated on the southern side of the house of and opened fire which resulted in the death of , and , and injuries to six persons, namely, , , , , and . ", "The topography of the locality where the incident took place is given in the two site-plans, Ex. P-57 and Ex. P-128. It appears from the plans that the house of faces west, and directly in front of the main door of his house is a, platform; to the southwest of the platform, about 25 paces away, is a well with a platform of 3 feet in height and about 13 feet in width around it; and to the west of the platform in front of 's house the audience were seated. ", "The prosecution version of the sequence of events that took place on that fatal night is as follows: After the dinner, there was a music performance in front of the platform of house and a number of persons assembled there to hear the music. played on the Majeera while was singing. it was a full-moon night and there were also a gas lamp and several lanterns. and placed their guns on a cot close to the platform and was sitting on that cot. While was among the audience, was still taking his dinner inside the house. At about 9 p. m., the accused along with 15 or 20 persons arrived from an eastern lane, stood behind the well, shouted that no one should run away and advanced northward from the well firing shots. and were hit and both of them died on the spot. , who was also hit, ran northward and was pursued by some of the culprits and was shot dead in front of 's house shown in the plan. , who was also shot at and injured, took up 's gun and went up to the roof of house wherefrom he fired shots at the dacoits, who were retreating. , who was luckily inside the house taking his dinner, ran up to the roof of house and saw the occurrence from over the parapet. The culprits turned over the dead- bodies of , and and, on seeing 's face, they exclaimed that was killed. Thereafter, they proceeded northward, passed through the corner of house and disappeared in the direction of the . They also carried away 's gun which was on the cot. ", "The motive for the offence is stated thus : The culprits were members of a notorious gang called , who, it is alleged, were responsible for many murders and dacoities in and about the aforesaid locality. That gang was in league with another gang known as 's gang operating in the same region. and had acted as informers against 's gang, and this information led to the killing of . gang wanted to take vengeance on the said two persons; and, having got the information that the said two persons would be at the music party on that fateful night, they organized the raid with a view to do away with and . ", "Out of the nine accused committed to the Sessions, the learned Sessions Judge acquitted seven, convicted and under 14 charges and awarded them various sentences, including the sentence of death. Before the learned Sessions Judge, took a palpably false plea that be was not but was , and much of the time of the learned Sessions Judge was taken to examine the case of the prosecution that the accused was really , son of . The other accused, , though made a statement before the Sub-Divisional Magistrate admitting some facts, which were only exculpatory in nature, denied the commission of the offence before the committing Magistrate and before the learned Sessions Judge. As many as eight eyewitnesses described the events in detail and clearly stated that both the accused took part in the incident. When one of the witnesses, (P. W., 30), was in the witness-box, the learned Counsel for the accused put to him the following two questions in cross-examination: ", "1. \" Did you state to the investigating officer that the gang rolled the dead bodies of , and , and scrutinized them and did you tell him that the face of resembled that of the deceased ?\" ", "2. \" Did you state to the investigating officer about the presence of the gas lantern ?\" ", "In regard to the first question, the learned Sessions Judge made the following note: ", "\" The cross-examining Counsel was asked to show the law which entitles him to put this question. He is unable to show any law. 1, therefore, do not permit the question to be put unless I am satisfied.\" ", "In respect of the second question, the following note is made: ", "\" He is also unable to show any law entitling him to put this question. I will permit him to put it if he satisfies me about it.\" ", "It appears from the deposition that no other question on the basis of the statement made before the police was put to this witness. After his evidence was closed, the learned Judge delivered a considered order giving his reasons for disallowing the said two questions. The relevant part of the order reads: ", "\"Therefore if there is no contradiction between his evidence in and his recorded statement in the diary, the latter cannot be used at all. If a witness deposes in that a certain fact existed but had stated under section 161 Cr. P. C. either that that fact had not existed or that the reverse and irreconcilable fact had existed, it is a case of conflict between the deposition in the and the statement under section 161 Cr. P. C. and the latter can be used to contradict the former. But if he had not stated under section 161 anything about the fact, there is no conflict and the statement cannot be used to contradict him. In some cases an omission in the statement under section 161 may amount to contradiction of the deposition in ; they are the cases where what is actually stated is irreconcilable with what is omitted and impliedly negatives its existence.\" ", "It is enough to notice at this stage that the learned Sessions Judge did not by the said order rule that no. ", "881 ", "omission in the statement made under s. 161 of the Code of Criminal Procedure can be put to a witness, but stated that only an omission which is irreconcilable with what is stated in evidence can be put to a witness. The said two omissions were not put to any of the other witnesses except to one to whom only one of the said omissions was put. No other omissions were put in the cross-examination either to P. W. 30 or to any other witness. The learned Sessions Judge on a consideration of the voluminous evidence in the case held that the guilt was brought home to the said two accused and convicted them as aforesaid. and preferred two separate appeals to against their convictions and sentences. The two appeals were heard along with the reference made by the learned Sessions Judge under s. 374 of the Code of Criminal Procedure for the confirmation of the sentence of death awarded to the appellants. The learned Judges of , after reviewing the entire evidence over again, accepted the findings of the learned Sessions Judge and con- firmed the convictions and sentences passed on the appellants. Before a petition was filed by the appellants alleging that the learned Sessions Judge did not allow the Counsel for defence to put omissions amounting to material contradictions to the eye-witnesses and therefore the said eye-witnesses should be summoned so that the said questions might be put to them. That petition was filed on May 1, 1957, and on July 30, 1957, after the argument in the appeals was closed, the petition was dismissed. Presumably, no attempt was made to press this application either before the appeals were taken up for argument or during the course of the argument; but the question raised in the petition was considered by the earned Judges of in their judgment. The judgment discloses that the learned Counsel appearing for the appellants argued before that the learned Sessions Judge wrongly disallowed the aforesaid two questions, and the learned Judges, conceding that those two questions should have been allowed, held that the accused were not prejudiced by the said fact. They justified their conclusion by the following reasons: ", "\"We did so because among other reasons we decided to ignore these two circumstances and to base our findings on matters of greater certainty, namely, the fact of the miscreants firing while advancing, passing in front of platform and taking away 's gun from the cot, movements which brought them close to the eye-witnesses and thereby gave the witnesses an unmistakable opportunity of seeing their faces in the light of the lanterns and the full moon. These factors made recognition by witnesses independent of any gas lantern or any scrutiny of the dead bodies, so that these matters ceased to be of any real consequence and therefore made the summoning of the eye- witnesses before us quite unnecessary \". In the result, they dismissed the appeals. The present appeal is by special leave filed against the judgment of . Learned Counsel for the appellants raised before us the following points : (1) (a). Section 162 of the Code of Criminal Procedure by its own operation attracts the provisions of s. 145 of the Evidence Act and under the latter section the whole vista of cross-examination on the basis of the previous statement in writing made by the witnesses before the police is open to the accused ; to illustrate the contention: a witness can be asked whether he made a particular statement before the police officers; if he says \" yes \", the said assertion can be contradicted by putting to him an earlier statement which does not contain such a statement. (1) (b). The word ',contradiction \" is of such wide connotation that it takes in all material omissions and a Court can decide whether there is one such omission as to amount to contradiction only after the question ,is put, answered and the relevant statement or part of it is marked, and, therefore, no attempt should be made to evolve a workable principle, but the question must be left at large to be decided by the Judge concerned on the facts of each case. (2) erred in holding that only two questions were intended to be put in cross- examination to the prosecution witnesses whereas the Advocate for the accused in. tended to put to the witnesses many other omissions to establish that there was development in the prosecution case from time to time but refrained from doing so in obedience to the considered order made by the learned Sessions Judge. (3) Even if only two questions were illegally disallowed, as it was not possible to predicate the possible effect of the cross-examination of the- witnesses on the basis of their answers to the said questions on their reliability, it should be held that the accused had no opportunity to have an effective cross-examination of the witnesses and there. fore they had no fair trial. (4) The learned Judges committed an illegality in testing the credibility of the witnesses other than the witness who gave the first information report by the contents of the said report. The arguments of the learned Counsel for the respondent in respect of each of the said contentions will be considered in their appropriate places. ", "We shall proceed to consider the contentions of the learned Counsel for the appellants in the order in which they were addressed: ", "Re. (1) (a): Diverse and conflicting views were expressed by Courts on the interpretation of s. 162 of the Code of Criminal Procedure. A historic retrospect of the section will be useful to appreciate its content. The earliest Code is that of 1872 and the latest amendment is that of 1955. Formerly Criminal Procedure Code for Courts in the Presidency, towns and those in the mofussil were not the same. Criminal Procedure Code , 1882 , consolidated the earlier Acts and prescribed a uniform law to all Courts in India. It was superseded by Act 5 of 1898 and substantial changes were made by Act 18 of 1923. Since then the Code stands amended from time to time by many other Acts. The latest amendments were made by Act 26 of 1955 which received the assent of the President on August 10, 1955, and by notification issued by its provisions came into force on and from January 1, 1956. We are not concerned in this case with the Amending Act of 1955, but only with the Act as it stood before the amendment of 1955. ", "884 ", "In Act 10 of 1872 the section corresponding to the present s. 162 was s. 119 , which read: ", "\" An officer in charge of a -station, or other officer making an investigation, may examine orally any person supposed to be acquainted with the facts and circumstances of the case, and may reduce into writing any statement made by the person so examined. ", "Such person shall be bound to answer all questions relating to such case, put him by such officer, other than questions criminating himself. ", "No statement so reduced into writing shall be signed by the person making it, nor shall it be. treated as part of the record or used as evidence.\" ", "This section enables a police officer to elicit information from persons supposed to be acquainted with facts, and permits him to reduce into writing the answers given by such persons, but excludes the said statement from being treated as part of the record or used as evidence. Act 10 of 1882 divided the aforesaid s. 119 into two sections and numbered them as ss. 161 and 162 , which read: ", "S. 161: \" Any Police-officer making an investigation under this chapter may examine orally any person supposed to be acquainted with the facts and circumstances of the case, and may reduce into writing any statement made by the person so examined. ", "Such person shall be bound to answer truly all questions relating to such case put to him by such officer, other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.\" ", "S. 162: \" No statement, other than a dying declaration, made by any person to a Police-officer in the course of an investigation under this chapter shall, if reduced to writing, be signed by the person making it, or be used as evidence against the accused. ", "Nothing in this section shall be deemed to affect the provisions of section 27 of the Indian Evidence Act, 1872.\" The first two paragraphs of s. 119 of Act 10 of 1872 with slight modifications not relevant for the present purpose constituted the corresponding paragraphs of s. 161 of Act 10 of 1882; and the third paragraph of s. 119 of the ", "-former Act, with some changes, was made s. 162 of the latter Act. There was not much difference between the third paragraph of s. 119 of the Act of 1872 and s. 162 of the Act of 1882, except that in the latter Act, it was made clear that the prohibition did not apply to a dying declaration or affect the provisions of s. 27 of the Indian Evidence Act, 1872 The Code of 1898 did not make any change in s. 161 , nor did it introduce any substantial change in the body of s. 162 except taking away the exception in regard to the dying declaration from it and putting it in the second clause of that section. But s. 162 was amended by Act 5 of 1898 and the amended section read : ", "\" (1) No statement made by any person to a police-officer in the course of an investigation under this Chapter shall, if taken down in writing, be signed by the person making it, nor shall such writing be used as evidence: Provided that, when any witness is called for the prosecution whose statement has been taken down in writing as aforesaid, the shall, on the request of the accused, refer to such writing, and may then, if the thinks it expedient in the interests of justice, direct that the accused be furnished with a copy thereof ; and such statement may be used to impeach the credit of such witness in manner provided by the Indian Evidence Act , 1872. (2) Nothing in this section shall be deemed to apply to any statement falling within the provisions of section 32 , clause (1), of the Indian Evidence Act , 1872.\" For the first time the proviso to s. 162 introduced new elements, namely: (i) The right of the accused to request the to refer to the statement of a witness reduced to writing; (ii) a duty cast on the to refer to such writing; (iii) discretion conferred on the in the interests of justice to direct that the accused be furnished with a copy of the statement; and (iv) demarcating the field within which such statements can be used, namely, to impeach the credit of the witness in the manner provided by the Indian Evidence Act , 1872. From the standpoint of the accused, this was an improvement on the corresponding sections of the earlier Codes, for whereas the earlier Codes enacted a complete bar against the use of such statements in evidence, this Code enabled the accused, subject to the limitations mentioned therein, to make use of then to impeach the credit of a witness in the manner provided by the Indian Evidence Act . On the basis of the terms of s. 162 of Act 5 of 1896, two rival contentions were raised before the s. It was argued for the prosecution that on the strength of s. 157 of the Evidence Act, the right of the prosecution to prove any oral statement to contradict the testimony of any witness under that section was not taken away by s. 162 of the Code of Criminal Procedure which only provided that the writing shall not be used as evidence. On the other hand, it was contended on behalf of the accused that when the statement of a witness was admittedly reduced into writing, it would be unreasonable to allow any oral evidence of the statement to be given when the writing containing the statement could not be proved. The judgment of , J., in the case of v. (1) and the decisions in (2), (3) and ( (4) represent one side of the question, and the judgment of , J., in v. (1) and the observations of , J., in (5) represent the other side. A division Bench of the Bombay High in (6), after noticing the aforesaid decisions on the question, ruled that the police officer could be allowed to depose to what the witness had stated to him in the investigation for the purpose of corroborating what the witness had said at the trial. In that context, , J., observed at p. 66: ", "(1) (1970) 7 A L.J. 468. ", "(3) (1912) 35 Mad. 247. ", "(5) (1907) 32 Bo-. 111 (2) (1908) 36 Cal. 281 (4) (1912) 35 Mad. 397. ", "(6) (1915) 39 Bo-~- 58. ", "8S7 The point is not free from difficulty which is sufficiently reflected in the diversity of judicial opinions, bearing on the question.\" ", "Presumably, in view of the aforesaid conflict, to make the legislative intention clear the section was amended by Act 18 of 1923. Section 162 as amended by the aforesaid Act reads: ", "\" (1) No statement made by any person to a police-officer in the course of an investigation under this Chapter shall, if reduced into writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police-diary or otherwise, or any part of such statement or record, be used for any purpose (save as hereinafter provided) at any inquiry or trial in respect of any offence under investigation at the time when such statement was made: ", "Provided that, when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing as aforesaid, the Court shall, on the request of the accused, refer to such writing and direct that the accused be furnished with a copy thereof, in order that any part of such statement if duly proved, may be used to contradict such witness in the manner provided by section 145 of the Indian Evidence Act, 1872. When any part of such statement is so used, any part thereof may also be used in the reexamination of such witness, but for the purpose only of explaining any matter referred to in his cross- examination: ", "Provided, further that, if the is of --opinion that any part of any such statement is not relevant to the subject-matter of the inquiry or trial or that its disclosure to the accused is not essential in the interests of justice and is inexpedient in the public interests, it shall record such opinion (but not the reasons therefore) and shall exclude such part from the copy of the statement furnished to the accused.\" ", "Sub-section (1) of the substituted section attempted to steer clear of the aforesaid conflicts and avoid other difficulties by the following ways: (a) Prohibited the use of the statement, both oral and that reduced into writing, from being used for any purpose at any inquiry or trial in respect of any offence under investigation; (b) while the earlier section enabled the accused to make use of it to impeach the credit of a witness in the manner provided by the Indian Evidence Act , 1872, the new section enabled him only to use it to contradict the witness in the manner provided by s. 145 of the said Act; (c) the said statement could also be used for the purpose of only explaining any matter referred to in his cross-examination; and (d) while under the old section a discretion was vested in the in the matter of furnishing the accused with a copy of an earlier statement of a prosecution witness, under the amended section, subject to the second proviso, a duty was cast upon the , if a request was made to it by the accused, to direct that the accused be furnished with a copy thereof. The effect of the amendment was that the loopholes which enabled the use of the statement made before the police in a trial were plugged and the only exception made was to enable the accused to use the statement of a witness reduced into writing for a limited purpose, namely, in the manner provided by s. 145 of the Indian Evidence Act, 1872, and the prosecution only for explaining the matter referred to in his cross examination. The scope of the limited use also was clarified. Under the old section the statement was permitted to be used to impeach the credit of a witness in the manner provided by the Indian Evidence Act ; under the said Act, the credit of a witness could be impeached either under s. 145 or under s. 155(3) . While the former section enables a witness to be cross-examined as to a previous statement made by him in writing without such writing being shown to him, the latter section permits the discrediting of the witness by proof of his previous statement by independent evidence. If a statement in writing could be used to discredit a witness in the manner provided by those two sections, the purpose of the would be defeated. Presumably in realisation of this unexpected consequence, the in the amendment made it clear that the said statement can only be used to contradict a witness in the manner provided by s. 145 of the Evidence Act. By Act 2 of 1945, the following sub-section (3) was added to s. 161 : ", "\" The police-officer may reduce into writing any statement made to him in the course of an examination under this section, and if he does so, he shall make a separate record of the statement of each such person whose statement he records.\" ", "This subsection restored the practice obtaining before the year 1923 with a view to discourage the practice adopted by some of the police officers of taking a condensed version of the statements of all the witnesses or a precise of what each witness said. It is not necessary to notice in detail the changes made in s. 162 by Act 26 of 1955, except to point out that under the amendment the prosecution is also allowed to use the statement to contradict a witness with the permission of the and that in view of the shortened committal procedure prescribed, copies of the statements of the prosecution witnesses made before the police during investigation are made available by the police to the accused before the commencement of the inquiry or trial. The consideration of the provisions of the latest amending Act need not detain us, for the present case falls to be decided tinder the Act as it stood before that amendment. ", "It is, therefore, seen that the object of the legislature throughout has been to exclude the statement of a witness made before the police during the investigation from being made use of at the trial for any purpose, and the amendments made from time to time were only intended to make clear the said object and to dispel the cloud cast on such intention. The Act of 1898 for the first time introduced an exception enabling the said statement reduced to writing to be used for impeaching the credit of the witness in the manner provided by the Evidence Act . As the phraseology of the exception lent scope to defeat the purpose of the legislature, by the Amendment Act of 1923, the section was redrafted defining the limits of the exception with precision so as to confine it only 112 to contradict the witness in the manner provided under s. 145 of the Evidence Act. If one could guess the intention of the legislature in framing the section in the manner it did in 1923, it would be apparent that it was to protect the accused against the user of the statements of witnesses made before the police during investigation at the trial presumably on the assumption that the said statements were not made under circumstances inspiring confidence. Both the section and the proviso intended to serve primarily the same purpose, i.e., the interest of the accused. , J., in (1) gave the purpose of s. 162 thus at p. 299: ", "\" As it seems to us it is to protect accused persons from being prejudiced by statements made to police officers who by reason of the fact that an investigation is known to be on foot at the time the statement is made, may be in a position to influence the maker of it and, on the other hand, to protect accused persons from the prejudice at the hands of persons who in the knowledge that an investigation has already started, are prepared to tell untruths. \" A division Bench of in v. Emperor (2) expressed a similar idea in regard to the object underlying the section,at p. 5, thus: \" The object of the section is to protect the accused both against over-zealous police officers and untruthful witnesses. \" ", " in Pakala Narayana Swami v. The King- Emperor (3) found another object underlying -the section when they said at p. 78: ", "\"If one had to guess at the intention of the in framing a section in the words used, one would suppose that they had in mind to encourage the free disclosure of information or to protect the person making the statement from a supposed unreliability of police testimony as to alleged statements or both. ", "Section 162 with its proviso, if construed in the (1) A.I R. 1940 All. 291. (2) A.I.R. 1945 Nag. 1. (3) (1939) L.R. 66 I. A. 66. ", "891 ", "manner which we will indicate at the later stage of the judgment, clearly achieves the said objects. The learned Counsel's first argument is based upon the words \" in the manner provided by s. 145 of the Indian Evidence Act, 1872 \" found in s. 162 of the Code of Criminal Procedure. Section 145 of the Evidence Act, it is said, empowers the accused to put all relevant questions to a witness before his attention is called to those parts of the writing with a view to contradict him. In support of this contention reliance is placed upon the judgment of this Court in (1). , J., describes the procedure to be followed to contradict a witness under s. 145 of the Evidence Act thus at p. 819: \" Resort to section 145 would only be necessary if the witness denies that he made the former statement. In that event, it would be necessary to prove that he did, and if the former statement was reduced to writing, then section 145 requires that his attention must be drawn to those parts which are to be used for contradiction. But that position does not arise when the witness admits the former statement. In such a case all that is necessary is to look to the former statement of which no further proof is necessary because of the admission that it was made. \" It is unnecessary to refer to other cases wherein a similar procedure is suggested for putting questions under s. 145 of the Indian Evidence Act, for the said decision of this Court and similar decisions were not considering the procedure in a case where the statement in writing was intended to be used for contradiction under s. 162 of the Code of Criminal Procedure. Section 145 of the Evidence Act is in two parts: the first part enables the accused to cross-examine a witness as to previous statement made by him in writing or reduced to writing to without such writing being shown to him; the second part deals with a situation where the cross- examination assumes the shape of contradiction : in other words, both parts deal with cross-examination; the first part with cross-examination other than by way of contradiction, and the (1) S.C.R. 812. ", "892 ", "second with cross-examination by way of contradiction only. The procedure prescribed is that, if it is intended to contradict a witness by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him. The proviso to s. 162 of the Code of Criminal Procedure only enables the accused to make use of such statement to contradict a witness in the manner provided by s. 145 of the Evidence Act . It would be doing violence to the language of the proviso if the said statement be allowed to be used for the purpose of cross-examining a witness within the meaning of the first part of s. 145 of the Evidence Act. Nor are we impressed by the argument that it would not be possible to invoke the second part of s. 145 of the Evidence Act without putting relevant questions under the first part thereof. The difficulty is more imaginary than real. The second part of s. 145 of the Evidence Act clearly indicates the simple procedure to be followed. To illustrate: A says in the witness-box that B stabbed C ; before the police he bad stated that D stabbed C. His attention can be drawn to that part of the statement made before the police which contradicts his statement in the witness-box. If he admits his previous statement, no further proof is necessary; if he does not admit, the practice generally followed is to admit it subject to proof by the police officer. On the other hand, the procedure suggested by the learned Counsel may be illustrated thus: If the witness is asked \" did you say before the police-officer that you saw a gas light ? \" and he answers \" yes \", then the statement which does not contain such recital is put to him as contradiction. This procedure involves two fallacies: one is it enables the accused to elicit by a process of cross-examination what the witness stated before the police-officer. If a police-officer did not make a record of a witness's statement, his entire statement could not be used for any purpose, whereas if a police-officer recorded a few sentences, by this process of cross- examination, the witness's oral statement could be brought on record. This procedure, therefore, contravenes the express provision of s. 162 of the Code. The second fallacy is that by the illustration given by the learned Counsel for the appellants there is no self-contradiction of the primary statement made in the witness-box, for the witness has yet not made on the stand any assertion at all which can serve as the basis. The contradiction, under the section, should be between what a witness asserted in the witness-box and what he stated before the police-officer, and not between what he said he had stated before the police-officer and what he actually made before him. In such a case the question could not be put at all: only questions to contradict can be put and the question here posed does not contradict it leads to an answer which is contradicted by the police statement. This argument of the learned Counsel based upon s. 145 of the Evidence Act is, therefore, not of any relevance in considering the express provisions of s. 162 of the Code of Criminal Procedure. ", "This leads us to the main question in the case, i.e., the interpretation of s. 162 of the Code of Criminal Procedure. The cardinal rule of construction of the, provisions of a section with a proviso is succinctly stated in Maxwell's Interpretation of Statutes, 10th Edn., at p. 162 thus: \" The proper course is to apply the broad general rule of construction, which is that a section or enactment must be construed as a whole, each portion throwing light if need be on the rest. ", "The true principle undoubtedly is, that the sound interpretation and meaning of the statute, on a view of the enacting clause, saving clause, and proviso, taken and construed together is to prevail.\" ", "Unless the words are clear, the should not so construe the proviso as to attribute an intention to the legislature to give with one hand and take away with another. To put it in other words, a sincere attempt should be made to reconcile the enacting clause and the proviso and to avoid repugnancy between the two. ", "As the words in the section declare the intention of the legislature, we shall now proceed to construe the section giving the words used therein their natural and ordinary sense. ", "The object of the main section as the history of its legislation shows and the decided cases indicate is to impose a general bar against the use of statement made before the police and the enacting clause in clear terms says that no statement made by any person to a police officer or any record thereof, or any part of such statement or record, be used for any purpose. The words are clear and unambiguous. The proviso engrafts an exception on the general prohibition and that is, the said statement in writing may be used to contradict a witness in the manner provided by s. 145 of the Evidence Act. We have already noticed from the history of the section that the enacting clause was mainly intended to protect the interests of accused. At the stage of investigation, statements of witnesses are taken in a haphazard manner. The police- officer in the course of his investigation finds himself more often in the midst of an excited crowd and label of voices raised all round. In such an atmosphere, unlike that in , be is expected to hear the statements of witnesses and record separately the statement of each one of them. Generally he records only a summary of the statements which appear to him to be relevant. These statements are, therefore, only a summary of what a witness says and very often perfunctory. Indeed, in view of the aforesaid facts, there is a statutory prohibition against police officers taking the signature of the person making the statement, indicating thereby that the statement is not intended to be binding on the witness or an assurance by him that it is a correct statement. ", "At the same time, it being the earliest record of the statement of a witness soon after the incident, any contradiction found therein would be of immense help to an accused to discredit the testimony of a witness making the statement. The section was, therefore, conceived in an attempt to find a happy via media, namely, while it enacts an absolute bar against the statement made before a police- officer being used for any purpose whatsoever, it enables the accused to rely upon it for a limited purpose of contradicting a witness in the manner provided by s. 145 of the Evidence Act by drawing his attention to parts of the statement intended for contradiction. It cannot be used for corroboration of a prosecution or a defence witness or even a witness. Nor can it be used for contradicting a defence or a witness. Shortly stated, there is a general bar against its use subject to a limited exception in the interest of the accused, and the exception cannot obviously be used to cross the bar. ", "If the provisions of the section are construed in the aforesaid back 'ground, much of the difficulty raised disappears. Looking at the express words used in tile section, two sets of words stand out prominently which afford the key to the intention of the legislature. They are : \" statement in writing \", and \" to contradict \". \" Statement \" in its dictionary meaning is the act of stating or reciting. Prima facie a statement cannot take in an omission. A statement cannot include that which is not stated. But very often to make a statement sensible or self-consistent, it becomes necessary to imply words which are not actually in the statement. Though something is not expressly stated, it is necessarily implied from what is directly or expressly stated. To illustrate: ' A' made a statement previously that he saw ' B ' stabbing ' C ' to death; but before the he deposed that he saw 'B' and 'D' stabbing ' C' to death: the can imply the word \"only \" after ' B ' in the statement before the police. Sometimes a positive statement may have a negative aspect and a negative one a positive aspect. Take an extreme example : if a witness states that a man is dark, it also means that he is not fair. Though the statement made describes positively the colour of a skin, it is implicit in that statement itself that it is not of any other colour. Further, there are occasions when we come across two statements made by the same person at different times and both of them cannot stand or co-exist. There is an inherent repugnancy between the two and, therefore, if one is true, the other must be false. On one occasion a person says that when he entered the room, he saw ' A' shooting 'B' dead with a gun; on another occasion the same person says that when he entered the room he saw 'C' stabbing ' B ' dead ; both the statements obviously cannot stand together, for, if the first statement is true, the second is false and vice versa. The doctrine of recital by necessary implication, the concept of the negative or the positive aspect of the same recital, and the 'principle of inherent repugnancy, may in one sense rest on omissions, but, by construction, the said omissions must be deemed to be part of the statement in writing. Such omissions are not really omissions strictly so called and the statement must be deemed to contain them by implication. A statement, therefore, in our view, not only includes what is expressly stated therein, but also what is necessarily implied therefrom. ", "\" Contradict \" according to the Oxford Dictionary means to affirm to the contrary. Section 145 of the Evidence Act indicates the manner in which contradiction is brought out. The cross-examining Counsel shall put the part or parts of the statement which affirms the contrary to what is stated in evidence. This indicates that there is something in writing which can be set against another statement made in evidence. If the statement before the police-officer-in the sense we have indicated-and the statement in the evidence before the are so inconsistent or irreconcilable with each other that both of them cannot co-exist, it may be said that one contradicts the other. ", "It is broadly contended that a statement includes all omissions which are material and are such as a witness is expected to say in the normal course. This contention ignores the intention of the legislature expressed in s. 162 of the Code and the nature of the non-evidentiary value of such a statement, except for the limited purpose of contradiction. Unrecorded statement is completely excluded. But recorded one is used for a specified purpose. The record of a statement, however perfunctory, is assumed to give a sufficient guarantee to the correctness of the statement made, but if words not recorded are brought in by some fiction, the object of the section would be defeated. By that process, if a part of a statement is recorded, what was not stated could go in on the sly in the name of contradiction, whereas if the entire statement was not recorded, it would be excluded. By doing so, we would be circumventing the section by ignoring the only safeguard imposed by the legislature, viz., that the statement should have been recorded. ", "We have already pointed out that under the amending Act of 1955, the prosecution is also allowed to use the statement to contradict a witness with the permission of the . If construction of the section as suggested by the learned Counsel for the appellants be accepted, the prosecution would be able to bring out in the cross-examination facts stated by a witness before a police-officer but not recorded and facts omitted to be stated by him before the said officer. This result is not decisive on the question of construction, but indicates the unexpected repercussions of the argument advanced to the prejudice of the accused. As s. 162 of the Code of Criminal Procedure enables the prosecution in the reexamination to rely upon any part of the statement used by the defence to contradict a witness, it is contended that the construction of the section accepted by us would lead to an anomaly, namely, that the accused cannot ask the witness a Single question, which does not amount to contradiction whereas the prosecution, taking advantage of a single contradiction relied upon by the accused, can reexamine the witness in regard to any matter referred to in his cross-examination, whether it amounts to a contradiction or not. I do not think there is any anomaly in the situation. Section 145 of the Evidence Act deals with cross-examination in respect of a previous statement made by the witness. One of the modes of cross-examination is by contradicting the witness by referring him to those parts of the writing which are inconsistent with his present evidence. Section 162 , while confining the right to the accused to cross-examine the witness in the said manner, enables the prosecution to reexamine the witness to explain the matters referred to in the cross-examination. This enables the prosecution to explain the alleged contradiction by pointing out that if a part of the statement used to contradict be read in the context of any other part, it would give a different meaning; and if so read, it would explain away the alleged contradiction. We think that the word \" cross-examination \" in the last line of the first proviso to s. 162 of the Code of Criminal Procedure cannot be understood to mean the entire gamut of cross-examination without reference to the limited scope of the proviso, but should be confined only to the cross-examination by contradiction allowed by the said proviso. The conflict of judicial opinion on this question is reflected in the decisions of different High s in this country. One of the views is tersely put by in In re (1) at p. 476: ", "\"Whether it is considered as a question of logic or language, \" omission \" and \" contradiction \" can never be identical. If a proposition is stated, any contradictory proposition must be a statement of some kind, whether positive or negative. To \" contradict \" means to \" speak against \" or in one word to \" gainsay \". It is absurd to say that you can contradict by keeping silence. Silence may be full of significance, but it is not \" diction \", and therefore it cannot be \" contradiction \"Considering the provisions of s. 145 of the Evidence Act, the learned Judge observed thus at p. 477: ", "\" It would be in my opinion sheer misuse of words to say that you are contradicting a witness by the writing, when what you really want to do is to contradict him by pointing out omissions from the writing. I find myself in complete agreement with the learned Sessions Judge of Ferozepore who observed that \" a witness cannot be confronted with the unwritten record of an unmade statement \".\" The learned Judge gives an illustration of a case of apparent omission which really is, a contradiction, i.e., a case where a witness stated under s. 162 of the Code that he saw three persons beating a man and later (1) (1933) I.L.R. 56 Mad. 475. ", "899 ", "stated in Court that four persons were beating the same man. This illustration indicates the trend of the Judge's mind that he was prepared to treat an omission of that kind as part of the statement by necessary implication. of followed this judgment in In re Guruva Vannan (1). In that judgment, , J., made the following observation at p. 901 : ", "\" I respectfully agree with the judgment of , J., in v. (2) in which the learned Judge held that a statement under section 162 of the Code of Criminal Procedure cannot be filed in order to show that a witness is making statements in the witness box which he did not make to the police and that bare omission cannot be a contradiction. The learned judge points out that, whilst a bare omission can never be a contradiction, a so-called omission in a statement may sometimes amount to a contradic- tion, for example, when to the police three persons are stated to have been the criminals and later at the trial four are mentioned.\" ", " in expressed the principle with its underlying reasons thus at p. 294: \" Witness after witness was cross-examined about certain statements made by him in the deposition but not to be found in his statement under s. 162 , Criminal P. C. A statement recorded by the police under s. 162 can be used for one purpose and one purpose only and that of contradicting the witness. Therefore if there is no contradiction between his evidence in and his recorded statement in the diary, the latter cannot be used at all. If a witness deposes in that a certain fact existed but had stated under s. 162 either that fact had not existed or that the reverse and irreconcilable fact had existed it is a case of conflict between the deposition in the and the statement under s. 162 and the latter can be used to contradict the former. But if he had not stated under s. 162 anything about the fact there is no conflict and the (1) I.L.R. (1944) Mad. 897. (2) (1933) I L.R. 56 Mad. 475. (3) A.I.R. 1952 All. 280. ", "900 ", "statement cannot be used to contradict him. In some cases an omission in the statement under s. 162 may amount to contradiction of the deposition in ;they are the cases where what is actually stated is irreconcilable with what is omitted and impliedly negatives its existence.\" At a later stage of the judgment, the learned Judges laid down the following two tests to ascertain whether a particular omission amounts to contradiction: (i) an omission is not a contradiction unless what is actually stated contradicts what is omitted to be said; and (ii) the test to find out whether an omission is contradiction or not is to see whether one can point to any sentence or assertion which is irreconcilable with the deposition in the . The said observations are in accord with that of the Madras High in In re Guruva Vannan (1). The Patna High in v. (2) expressed a similar view. At p. 22, , analysing s. 162 of the Code of Criminal Procedure, after its amendment in 1923, observed : ", "\" The first proviso to section 162 (1) makes an exception in favour of the accused but it is an exception most jealously circumscribed under the proviso itself. \" Any part of such statement \" which has been reduced to writing may in certain limited circumstances be used to contradict the witness who made it. The limitations are strict: (1) Only the statement of a prosecution witness can be used; and (2) only if it has been reduced to writing ; (3) only a part of the statement recorded can be used ; (4) such part must be duly proved ; (5) it must be a contradiction of the evidence of the witness in Court; (6) it must be used as provided in s. 145 , Evidence Act , that is, it can only be used after the attention of the witness has been drawn to it or to those parts of it which it is intended to use for the purpose of contradiction, and there are others. Such a statement which does not contradict the testimony of the witness cannot be proved in any circumstances and it is not permissible to use the recorded statement as a whole to show that the witness did not say something to the investigating officer.\" (1) I.L.R. (1944) Mad. 897. ", "(2) A.I.R. 1926 Pat. 20. ", " ", "In v. (1) much to the same effect was stated at p. 284: ", "\" The section (s. 162) provides that such statements can be used only for the purpose of contradiction. Contradiction means the setting up of one statement against another and not the setting up of a statement against nothing at all. An illustration would make the point clear. If a witness in Court says 'I saw A running away' he may be contradicted under section 162 by his statement to the police 'I did not see A running away'. But by proving an omission what the learned Counsel contradicts is not the statement 'I saw A running away' but the statement 'I stated to the police that I saw' A running away'. As section 162 does not allow the witness to depose ' I stated to the police that I saw A running away ' it follows that there can be no basis for eliciting the omission. Our argument is further fortified by the use of the words \" any part of such statement ............... may be used to contradict.\" It is not said that whole statement may be used. But in order to prove an omission the whole statement has to be so used, as has been done in the present case.\"The contrary view is expressed in the following proposition \" An omission may amount to Contradiction if the matter omitted was one which the witness would have been expected to mention and the Sub-Inspector to make note of in the ordinary course. Every detail is expected to be noted.\" This proposition, if we may say so, couched in wide phraseology enables the trial Judge to put into the mouth of a witness things which he did not state at an earlier stage and did not intend to say, oil purely hypothetical considerations. The same idea in a slightly different language was expressed by and , JJ., in (2) at p. 240: ", "\" There are, however, certain omissions which amount to contradictions and have been treated as such by this Court as well as other Courts in this country. Those are omissions relating to facts which (1) I.L.R. (1937) Nag. 277. ", "(2) A.I.R. 1957 All. 239. ", "902 ", "are expected to be included in the statement before the police by a person who is giving a narrative of what 'he saw, on the ground that they relate to important features of the incident about which the deposition is made.\" A similar view was expressed in v. Emperor (1), (2), and State of M. P. v. (3). ", "Reliance is placed by the learned Counsel for the appellants on a statement of law found in \" Wigmore on Evidence \", Vol. III, 3rd Edn., at p. 725. In discussing under the head \" what amounts to a Self-contradiction \", the learned author tersely describes a self-contradiction in the following terms: ", "\"............ it is not a mere difference of statement that suffices; nor yet is an absolute oppositeness essential; it is an inconsistency that is required.\" ", "The learned author further states, at p. 733 : \" A failure to assert a fact, when it would have been natural to assert it, amounts in effect to an assertion of the non-existence of the fact.\" ", "The said statement is no doubt instructive, but it cannot be pressed into service to interpret the provisions of s. 162 of the Code of Criminal Procedure. In America, there is no provision similar to s. 162 of the Code . It is not, therefore, permissible, or even possible, to interpret the provisions of a particular Act, having regard to stray observations in a text-book made in a different context. It is not necessary to multiply cases. The two conflicting views may be briefly stated thus: (i) omissions, unless by necessary implication be deemed to be part of the statement, cannot be used to contradict the statement made in the witness-box; and (ii) they must be in regard to important features of the incident which are expected to be included in the statement made before the police. The first proposition not only carries out the intention of the legislature but is also in accord with the plain meaning of the words used in the section. The second proposition not only stretches (1) A.I.R. 1932 Lah. 103. (2) A.I.R. 1938 Pat. 579. ", "(3) A.I.R. 1936 M.P. 13. ", "903 ", "the meaning of the word \" statement \" to a breaking point, but also introduces an uncertain element, namely, ascertainment of what a particular witness would have stated in the circumstances of a particular case and what the police officer should have recorded. When the section says that the statement is to be used to contradict the subsequent version in the witness-box, the proposition brings in, by construction, what he would have stated to the police within the meaning of the word \" statement \". Such a construction is not permissible. ", "From the foregoing discussion the following propositions emerge: (1) A. statement in writing made by a witness before a police officer in the course of investigation can be used only to contradict his statement in the witness-box and for no other purpose; (2) statements not reduced to writing by the police officer cannot be used for contradiction; (3) though a particular statement is not expressly recorded, a statement that can be deemed to be part of that expressly recorded can be used for contradiction, not because it is an omission strictly so-called but because it is deemed to form part of the recorded statement; (4) such a fiction is permissible by construction only in the following three cases: (i) when a recital is necessarily implied from the recital or recitals found in the statement ; illustration: in the recorded statement before the police the witness states that he saw A stabbing B at a particular point of time, but in the witness-box he says that he saw A and C stabbing B at the same point of time; in the statement before the police the word \" only \" can be implied, i.e., the witness saw A only stabbing B; (ii) a negative aspect of a positive recital in a statement; illustration: in the recorded statement before the police the witness says that a dark man stabbed B, but in the witness-box he says that a fair man stabbed B; the earlier statement must be deemed to contain the recital not only that the culprit was a dark complexioned man but also that be was not of fair complexion; and (iii) when the statement before the police and that before the cannot stand together; illustration: the witness says in the recorded statement before the police that A after stabbing B ran away by a northern lane, but in the he says that immediatly after stabbing he ran away towards the southern lane; as he could not have run away immediately after the stabbing, i.e., at the same point of time, towards the northern lane as well as towards the southern lane, if one statement is true, the other must necessarily be false. The aforesaid examples are not intended to be exhaustive but only illustrative. The same instance may fall under one or more heads. It is for the trial Judge to decide in each case' after comparing the part or parts of the statement recorded by the police with that made in the witness-box, to give a ruling, having regard to the aforesaid principles, whether the recital intended to be used for contradiction satisfies the requirements of law. ", "The next point is what are the omissions in the statement before the police which the learned Sessions Judge did not allow the accused to put to the witnesses for contradicting their present version. The learned Counsel for the appellants contends that the accused intended to put to the witnesses the following omissions, but they did not do so as the learned Sessions Judge disallowed the two questions put to P. W. 30 and made a considered order giving his reasons for doing so, and that the learned Counsel thought it proper not to put the same questions or other questions in regard to omissions to P. W. 30 or to the other witnesses that followed him. The said omissions are: (1) The warning by the members of the gang on their arrival to the audience at the music party not to stir from their places; (2) the presence of a gas lantern;(3) the chase of by the assailants; (4) the scrutiny of the dead bodies by the gang; and (5) the return of the gang in front of the house of . The learned Counsel for the respondent contests this fact and argues that only two omissions, namely, the presence of a gas-lantern and the scrutiny of the dead bodies by the gang, were put in the cross-examination of P. W. 30 and no other omissions were put to him or any other witness, and that indeed the order of the learned Sessions Judge did not preclude him from putting all the omissions to the witnesses and taking the decision of the Judge on the question of their admissibility. He further contends that even before the learned Judges of the Advocate for the appellants only made a grievance of hi,,; not having been allowed to put the aforesaid two omissions and did not argue that he intended to rely upon other omissions but did not do so as he thought that the learned Sessions Judge would disallow them pursuant to his previous order. Before an application was filed for summoning eight eye- witnesses on the ground that the learned Sessions Judge did not allow the Counsel for defence to put the omissions amounting to material contradiction to them, but no mention was made in that application of the number of omissions which the accused intended to put to the eye-witnesses if they were summoned. That application was filed on May 1, 1957, but no attempt was made to get a decision on that application before the arguments were heard. Presumably, the as well as the parties thought that the application could more conveniently be disposed of after hearing the arguments. On July 30, 1957) 1 after the appellants were fully heard, that application was dismissed and the detailed reasons for dismissing it were given in the judgment, which was delivered on September 11, 1957. The judgment of the learned Judges of clearly indicates that what was argued before them was that two omissions sought to be put to P. W. 30 were disallowed and therefore the accused did not put the said omissions to the other witnesses. It was not contended on behalf of the accused that other omissions were intended to be used for contradiction, but were not put to the witnesses as the Advocate thought that in view of the order of the learned Sessions Judge they would not be allowed automatically. The learned Judges held that the said two omissions amounted to material contradiction and that the learned Sessions Judge was wrong in disallowing them, but they ignored those two circumstances and based their findings on matters of greater certainty. If really the Judges had made a mistake in appreciating the arguments of the learned Counsel for the appellants in the context of omissions, one would expect the accused to mention the said fact prominently in their application for special leave. Even if they omitted to mention that fact in the application for special leave, they could have filed an affidavit sworn to by the Advocate, who appeared for them before the learned Judges of , mentioning the fact that in spite of the argument specifically directed to the other omissions the learned Judges by mistake or over-sight failed to notice that argument. The learned Counsel who argued before us did not argue before , and, therefore, obviously he is not in a position to assert that the Judges committed a mistake in omitting to consider the argument advanced before them. But he made strenuous attempts before us to persuade us to hold that there must have been a mistake. He would say that the learned Counsel had in fact relied upon all the aforesaid omissions in support of his contention that there was development of the case of the prosecution from time to time and therefore he must have also relied upon the said omissions in the context of the statements made under s. 162 of the Code of Criminal 'Procedure; on the other hand, the fact that the learned Judges considered all the alleged omissions in connection with the said contention and only considered two omissions in regard to the contention based on s. 162 of the Code is indicative of the fact that the learned Counsel, for reasons best known to him, did not think fit to rely upon all the alleged omissions. The deposition of P.W. 30 also shows that only two omissions in the statement before the police, viz., the existence of a gas-lantern and the scrutiny of the dead bodies by the gang, were put to him in cross-examination and the learned Sessions Judge disallowed those questions on the ground that the learned Counsel was not able to `how any law entitling him to put the said questions. Though the witness was exa- mined at some length no other alleged omissions in the statement before the police were sought to be put to him. It would be seen from the short order made by the learned Sessions Judge at the time each one of the two questions were put, that the learned Sessions Judge did not give a general ruling that no omissions in a statement before the police could be put to a witness. The rulings were given, having regard to the nature of the omissions relied upon. But after the entire evidence of P. W. 30 was closed, the learned Sessions Judge gave a considered order. Even in that order, he did not rule out all omissions as inadmissible, but clearly expressed the view that if what was stated in the witness-box was irreconcilable with what was omitted to be stated in the statement, it could go in as material contradiction. Even after this order, it was open` to the appellants to bring out all such omissions, but no attempt was made by them to do go. These circumstances also support the impression of the learned Judges of that what was argued before them was only in respect of the two specified omissions put to P. W. 30 in his cross- examination. We, therefore, hold that only two omissions relating to the existence of the gas-lantern and the scrutiny of the faces of the deceased by the appellants were put to P. W. 30 and were intended to be put to the other witnesses, but were not so done on the basis of the ruling given by the . ", "Would those two omissions satisfy the test laid down by us ? The witness stated in the Court that there was a gas-lamp and that some of the miscreants scrutinised the faces of the dead bodies. In their statements before the police they did not mention the said two facts and some of the witnesses stated that there were lanterns. Taking the gas-lamp first: the scene of occurrence was not a small room but one spread- over from the well to 's house. From that omission in the statement it cannot necessarily be implied that there was no gas-lamp in any part of the locality wherein the incident took place; nor can it be said that, as the witnesses stated that there were lanterns, they must be deemed to have stated that there was no gas-lamp, for the word \" lantern is comprehensive enough to take in a gas-lantern. It is also not possible to state that the statements made before the police and those made before the Court cannot co-exist, for there is no repugnancy between the two, as even on the assumption that lantern excludes a gas-lantern, both can exist in the scene of occurrence. The same can be said also about the scrutiny of the faces of the dead bodies. In the statements before the police, the movements of the appel- lants were given. It was stated that they shot at the people and decamped with the gun of . The present evidence that in the course of their pursuit, they looked at the faces of two of the dead bodies does not in any way contradict the previous versions, for the said incident would fit in with the facts contained in the earlier statements. The appellants could have shot at the audience, pursued them, taken the gun of and on their way scrutinised the dead bodies. The alleged omission does not satisfy any of the principles stated by us. In this view, it is unnecessary to express our opinion on the question whether, if the said two omissions amounted to contradiction within the meaning of s. 162 of the Code of Criminal Procedure, the appellants were in any way prejudiced in the matter of their trial. ", "The last contention of the learned Counsel for the appellants is that the learned Judges of acted illegally in testing the veracity of the witnesses with reference to the contents of the first information report. A perusal of the judgment of shows that the Advocate for the appellants contended before them, inter alia, that the witnesses should not be believed as their present version was inconsistent with the first information report. The learned Judges assumed that the said process was permissible and even on that assumption they rejected the plea of the learned Counsel for the appellants that there was improvement in the prosecution case. The learned Judges were really meeting the argument of the learned Counsel for the appellants. It is idle to suggest that they erred in law in relying upon the first infor- ", "909 ", "mation report to discredit the witnesses for the simple reason that they accepted the evidence in spite of some omissions in the first information report. In the result, we confirm the judgment of and dismiss the appeal. ", ", -The judgment which I am delivering has been prepared by my learned brother, , and myself We agree that the appeal be dismissed but would express in our own words the grounds upon which it should be dismissed. The main contention advanced on behalf of the appellants was as follows: There was no fair trial of the appellants as they had been deprived of the right of cross-examination of the prosecution witnesses with reference to their statements made to the police during the police investigation. The trial Judge had disallowed two questions in this respect, and the lawyer for the appellants regarded the decision of the learned Judge as one which prevented him from putting further questions with respect to other matters concerning the police statements of the witnesses. The order of the learned Judge had to be respected. The order of the learned Judge was illegal, as on a proper interpretation of the provisions of s. 162 of the Code of Criminal Procedure, the appellants were entitled not only to put the two questions which were ruled out, but also questions with respect to other matters arising out of the police statements of the witnesses. The purpose of cross-examination is to test the reliability of the witnesses both as to what they had to say about the occurrence itself and concerning their identification of those who had participated in it. There were several matters with respect to which, if questions had been allowed to be put, an effective -cross-examination might have resulted and enabled the appellants to persuade the trial Judge to hold that the witnesses were entirely unreliable. In a case of this kind in which the appellants were involved, there were only two principal questions which were of vital importance: (1) how far the witnesses had improved their story in their evidence in from what they had said to the police concerning the occurrence, and (2) the existence of opportunity and sufficient light to enable proper identification. ", "It may be assumed, although it has been a matter of controversy, that the order of the trial Judge disallowing the two questions which were put was understood by the lawyer for the defence to mean that all similar questions in the nature of omissions in the police statements with respect to matters stated in Court would be disallowed and therefore no attempt was made to put further questions to the witnesses in this respect. ", "Unfortunately, the lawyer for the defence had not in this particular case laid any adequate foundation upon which the two questions, which were ruled out, could have been properly put. From that point of view, the order of the trial Judge in disallowing those questions was not improper. It could not, therefore, be said that the trial Judge had done anything which could be rightly characterised as infringement of the provisions of s. 162 of the Code of Criminal Procedure or of the Indian Evidence Act , or even of the rules of natural justice. ", " had reported the occurrence to the police station, which was a brief statement. Certain matters were, however, definitely mentioned the names of the persons recognised in the occurrence, the number of persons killed and injured, the taking away of a gun which was with , firing his gun at the culprits in such a manner that some of them must have been injured, and the existence of light from the moon and lantern. The principal comment had been that in this report there was no mention of the culprits having advanced from the well towards the open place where villagers had gathered to hear the music. On the contrary, the first information report indicated that the firing was done from the parapet of the well. It is clear, however, from 's statement that the culprits had taken away the gun which was with . This could only have been done if the culprits had advanced from the well to the place where the villagers had assembled. ", "It was then commented that in the first information report the culprits were said to have come from the southern lane, while in the evidence was that they had come to the well from the eastern lane. The discrepancy is a minor one. must have been concerned with reporting the first firing from the well, and he might have mistaken the actual direction from which the culprits had approached the well. 's statement made no mention of the culprits uttering any warning that no one was to run away as they advanced from the well, whereas in the witnesses spoke to that effect. This was a detail which might not have considered to be of sufficient importance, as he was anxious to make a bare statement in order to get the police to proceed to the place of occurrence as quickly as possible. 's statement also makes no mention of the culprits examining the bodies of the dead and examining their faces and exclaiming that , one of the men whom they wished to kill, had been killed. Here again, this was a matter of detail which might not have considered necessary to mention. The first information report made no mention of the existence of gas light. It did, however, mention the existence of light of lantern and existence of moonlight. The existence of light from lantern and the full moon obviously was sufficient to recognise known persons. It is in evidence that the appellants were known for several years to the witnesses who had identified them as participants in the occurrence. It could not be said with absolute certainty that the mention of the existence of light of lantern excluded the existence of gas light. The statement of gives clear indication that the culprits did not remain all the time at the well, because they must have advanced to take away the gun which was with . The culprits must have stayed at the place of occurrence for some time to enable to fire his gun at them and to convey to 's mind the certainty that some of the culprits must have been injured. Reference is made only to some of the details and not to all the discrepancies pointed out in order to determine whether the alleged improvement in the story of the witnesses in from what they are alleged to have stated to the police was with reference to vital matters, which went to the root of the prosecution case. ", "It is apparent from what has been stated above that even if the defence had been allowed to put questions concerning these alleged omissions in the statements of the witnesses to the police, it could not have made their evidence in Court unreliable with respect to any material particular concerning the occurrence or the identification of the accused. ", "From the above, it seems to us that there is no merit in the appeal. As, however, considerable argument has been made concerning the right of cross. examination and as to how the provisions of s. 162 of the Code of Criminal Procedure should be construed, it becomes necessary to consider the submissions of the learned counsel for the appellants. The provisions of the Code of. Criminal Procedure of 1861 and 1872 have been referred to by our learned brother, , J. Section 162 of the Code of 1872 made it clear that except for a dying declaration and matters coming within the provisions of s. 27 of the Indian Evidence Act of 1872, no statement of any person made to a police officer in the course of in. vestigation, if reduced into writing, could be used as evidence against the accused. There was no restric- tion as to the extent of the right of an accused to cross- examine a prosecution witness concerning his statement to the police. Section 162 of the Code of 1898 prohibited the use of a statement reduced into writing, as evidence except any statement falling within the provisions of s. 32 of the Indian Evidence Act, 1872. The proviso to this section, however, expressly stated that in spite of the prohibition in the main provision, the accused could use such a state- ment to impeach the credit of the witnesses in the manner provided in the Indian Evidence Act of 1872. It will be seen therefore that until 1898 there was no restriction, imposed upon the accused as to the extent of his right of cross-examination. As s. 162 of the Code of 1898 entirely prohibited the use of the statement reduced into writing as evidence, the proviso to it safeguarded the right of the accused to impeach the credit of such witness in the manner provided in the Indian Evidence Act , 1872. Under the Indian Evidence Act , a witness's credit can be impeached under ss. 145 and 155 of that Act. The manner in which the provisions of these sections could be utilized to impeach the credit of a witness covers a wide field. If, however, it was intended to contradict a witness concerning his previous statement reduced into writing, then the provisions of s. 145 require that those parts of the writing by which it was sought to contradict the witness must be shown to him. There can, be no doubt that the provisions of the Code from 1861 to 1898 in no way curbed the right of cross-examination on behalf of the accused. The provisions were intended to protect the accused in that no statement of a witness to the police reduced into writing could be used as evidence against him, but the right to cross-examine the witness to the fullest extent in accordance with the provisions of the Indian Evidence Act in order to show that he was unreliable, remained unaffected. The real question for consideration is whether the amendment of the Code in 1923 brought about such a radical change in the provisions of s. 162 of the Code as to suggest that the had taken a retrograde step, and had intended to deprive the accused of the right of cross-examination of prosecution witnesses concerning their police statements except in one restricted particular, namely, to make use of the statements reduced into writing to contradict the witnesses in the manner provided by s. 145 of the Indian Evidence Act. The provisions of s. 162 of the Code of 1898 were amended in 1923 in the hope that the amendment would resolve the various doubts which had sprung up as the result of divergent judicial opinions as to the meaning of these Provisions. The provisions of s. 162 of the Code of 1898 had been variously construed, and the amendment in 1923 has not improved matters. The amended section still remains difficult to construe. We shall endeavour now to construe it. ", "Under s. 161 of the Code, the police officer may examine orally any person supposed to be acquainted with the facts and circumstances of the case. He may also reduce into writing any statement made to him in the course of such examination, and if he does so, he must make a separate record of the statement of each such person. ", "The legislature has, however, put restrictions upon the use of such statements at the inquiry or trial of the offence. The first restriction is that no statement made by any person to a police officer, if reduced into writing, be signed by the person making it. The intention behind the provision is easy to understand. The legislature probably thought that the making of statements by witnesses might be thwarted, if the witnesses were led to believe that because they had signed the statements they were bound by them, and that whether the statements were true or not, they must continue to stand by them. The legislature next provides that a statement, however recorded, or any part of it shall not be used for any purpose (save as provided in the sections at the inquiry or trial in respect of any offence under investigation at the time such statement is wade. The object here is not easily discernible, but perhaps is to discourage over-zealous police officers who might otherwise exert themselves to improve the statements made before them. considered the intention to be: \" If one had to guess at the intention of the legislature in framing a section in the words used, one would suppose that they had in mind to encourage the free disclosure of the information or to protect the person making the statement from a supposed unreliability of police testimony as to alleged statements or both.\" ", "It is possible that the legislature had also in mind that the use of statements made under the influence of the investigating agency might, unless restricted to a use for the benefit of the accused, result in considerable prejudice to him. But whatever the intention which led to the imposition of the restrictions, it is manifest that the statements, however recorded, cannot be used except to the extent allowed by the section. The prohibition contained in the words \"any purpose\" is otherwise absolute. Then follow two provisos. The first gives the right to the accused to make use of the statements for contradicting a witness for the prosecution in the manner provided by s. 145 of the Indian Evidence Act. It also gives a right to the prosecution to use the statement for purposes of reexamination of the same witness but only to explain any matter referred to in the cross-examination of the witness. The first proviso, when analysed, gives the following ingredients: ", "(i) A prosecution, witness Is called for the prosecution ; ", "(ii) whose statement has previously been reduced to writing; ", "(iii) The accused makes a request ", "(iv) The accused is furnished with a copy of the previous statement; ", "(v) In order that any part of such statement, if duly proved, may be used to contradict such witness in the manner provided by s. 145 of the Indian Evidence Act. If the a accused exercises the right in (v) above in any instance, then the prosecution has the right to use the statement in the reexamination of the witness but only to explain any matters referred to by him in cross-examination. Section 145 of the Indian Evidence Act reads: Cross-examination as to previous statements in writing: A witness may be cross-examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without such writing being shown to him, or being proved ; but, if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it, which are to be used for the purpose of contradicting him.\" ", "916 ", "The section analysed, gives the following result: (1) Witnesses can be cross-examined as to previous statements in writing or reduced into writing; (2) These writings need not be shown to the witnesses or proved beforehand; ", "(3) But if the intention is to contradict them by the writings, ", "(a) their attention must be drawn to those parts which are to be used for contradiction ; ", "(b) This should be done before proving the writings. Our learned brother, , J., restricts the use by the accused of the previous statements to the mechanism of contradiction as detailed in (3) above, but says that the accused has no right to proceed under (1) and (2). He deduces this from the words of s. 162 of the Code of Criminal Procedure, where it is provided : \" in order that any part of such statement, if duly proved, may be used to contradict such witness in the manner provided by section 145 of the Indian Evidence Act, 1872.\" The fact that the accused can use the previous statement for the purpose of contradicting, shows that the previous statement cannot be used for corroborating the witness. Also there must be some basis for contradicting. This may arise, because of there being a contrary statement, irreconcilable statement or even material omissions. The accused can establish a contradiction by cross-examining the witness but only so as to bring out a contradiction and no more. We regret we cannot agree (and we say this with pro- found respect) that the accused is not entitled to cross- examine but only to contradict. In our opinion, the reference to s. 145 of the Indian Evidence Act brings in the whole of the manner and machinery of s. 145 and not merely the second part. In this process, of course, the accused cannot go beyond s. 162 or ignore what the section prohibits but cross-examination to establish a contradiction between one statement and another is certainly permissible. This question loses much of its importance when there are patent contradictions and they can be put to the witness without any cross-examination as in the two statements: ", "(a) I saw A hit B. ", "(b) I did not see A hit B. ", "But there are complex situations where the contradiction is most vital and relevant but is not so patent., There are cases of omissions on a relevant and material point. Let us illustrate our meaning by giving two imaginary statements: ", "(a) When I arrived at the scene I saw that X was running away, chased by A and B who caught him. ", "(b) When I arrived at the scene I saw X take out a dagger from his pocket, stab D in his chest and then take to his heels. He was chased by A and B who caught him. ", "There is an omission of two facts in the first statement, viz., (a) X took out a dagger from his pocket, and (b) he stabbed D in the chest. These two statements or their omission involve a contradiction as to the stage of the occurrence, when the observation of the witness began. What s. 145 of the Indian Evidence Act provides is that a witness may be contradicted by a statement reduced into writing and that is also the use to which the earlier statement can be put under s. 162 of the Code of Criminal Procedure. When some omissions occur, there is contradiction in one sense but not necessarily on a relevant matter. The statements of witnesses may and do comprise numerous facts and circumstances, and it happens that when they are asked to narrate their version over again, they omit some and add others. What use can be made of such omissions or additions is for the accused to decide, but it cannot be doubted that some of the omissions or additions may have a vital bearing upon the truth of the story given. We do not think that by enacting s. 162 in the words used, the legislature intended a prohibition of cross-examination to establish which of the two versions is an authentic one of the events as seen by the witness. The use of the words\" reexamination and \" cross-examination \" in the same proviso shows that cross-examination is contemplated or in other words, that the manner of contradiction under s. 145 of the Indian Evidence Act comprises both cross-examination and contradiction. Indeed, the second part is only the final stage of the contra- ", "diction,which includes the earlier stages. Reexamination is only permissible where there is cross-examination. It must not be overlooked that the cross-examination must be directed to bringing out a contradiction between the statements and must not subserve any other purpose. If the cross-examination does anything else, it will be barred under s. 162 , which permits the use of the earlier statement for contradicting a witness and nothing else. Taking the example given above, we do not see why cross-examination may not be like this: ", "Q. I put it to you that when you arrived on the scene X was already running away and you did not actually see him stab D as you have deposed to-day ? ", "A. No. I saw both the events. ", "Q. If that is so, why is your statement to the police silent as to stabbing ? ", "A. I stated both the facts to the police. ", "The witness can then be contradicted with his previous statement. We need hardly point out that in the illustration given by us, the evidence of the witness in is direct evidence as opposed to testimony to a fact suggesting guilt. The statement before the police only be called circumstantial evidence of, complicity and not direct evidence in the strict sense. ", "Of course, if the questions framed were: ", "Q. What did you state to the police ? or Q. Did you state -to the police that D stabbed X ? They may be ruled out as infringing s. 162 of the Code of Criminal Procedure, because they do not set tip a contradiction but attempt to get a fresh version from the witnesses with a view to contradicting him. How the cross- examination can be made must obviously vary from case to case, counsel to counsel and statement to statement. No single rule can be laid down and the propriety of the question in the light of the two sections can be found only when the facts and questions are before the . But we are of opinion that relevant and material omissions amount to vital contradictions, which can be established by cross- examination and confronting the witness with his previous statement. ", "The word \" contradict \" has various 'Meanings, and in the Oxford English Dictionary it is stated as \" To be contrary to in effect, character, etc. ; to be directly opposed to go counter to, go against \" as also \" to affirm the contrary of; to declare untrue or erroneous; to deny categorically \" and the word \" contradiction \" to mean \" A state or condition of opposition in things compared ; variance; inconsistency, contrariety \". In Shorter Oxford English Dictionary, \" contradict \" is said to mean \"To speak against; to oppose in speech ; to forbid ; to oppose; to affirm the contrary of; to declare untrue or erroneous; to deny to be contrary to go counter to and go against and \" contradiction \" to mean \" A state of opposition in things compared; variance; inconsistency\". The meaning given to the words ,contradict \" and \" contradiction \" in these Dictionaries must at least include the case of an omission in a previous statement which by implication amounts to contradiction and therefore such an omission is a matter which is covered by the first proviso to s. 162 and questions in cross. examination can be put with respect to it in over to contradict the witness. It is difficult to say as an inflexible rule that any other kind of omission cannot be put to a witness in order to contradict him, when the proper foundation had been laid for putting such questions. The words \" to contradict him \" appearing in s. 145 of the Evidence Act must carry the same meaning as the words \" to contradict such witness \" in s. 162 of the Code. In a civil suit, where the provisions of s. 162 of the Code of Criminal Procedure have no application, would it be correct to say that only questions concerning omissions of the kind suggested by our learned brother could be put and none other ? We cannot see why a question of the nature of cross-examination regarding an omission with respect to a matter which the witness omitted to make in his previous statement and which, if made, would. have been recorded, cannot be put. The facts and circumstances of each case will determine whether any other kind of omission than that referred to by our learned brother could be put to a witness in order to contradict him. It would be for the Judge to decide in each case whether in the circumstances before him the question could be put. The purpose of cross-examination is to test the veracity of the statement made by a witness in his examination-in-chief as also to impeach his credit. Not only is it the right of the accused to shake the credit of a witness, but it is also the duty of the trying an accused to satisfy itself that the witnesses are reliable. It would be dangerous to lay down any hard and fast rule. We pause to look at the matter from another angle. We shall assume that the interpretation which the claims should be put upon s. 162(1) is correct and compare the respective rights of the accused and the prosecution. According to this interpretation, the accused has no right of cross- examination in respect of the contradiction. This means that no question can be put about the previous statement but only the part in which there is a contradiction can be brought to the witness's notice and his explanation, if any, obtained. In other words, there is only \" contradiction \" and no more. But when the accused has used the statement to contradict the witness-it may be only on one point-what are the rights of the prosecution ? The prosecution can use any part of the statement in the reexamination not only to explain the I contradiction' but also to explain any matter referred to in the cross-examination of the witness. If I contradiction ' does not include the right of cross- examination, the right of the prosecution must necessarily extend to reexamination in respect of any other matter needing explanation in the cross-examination at large. Thus, the accused cannot ask a single question of the nature of cross-examination but because he sets up a I contradiction' in the narrow sense, the prosecution can range all over the previous statement and afford the witness a chance of explaining any matter in his cross-examination by re-examining him which right includes the possibility of asking leading questions with the permission of the . ", "Thus, the accused makes a I contradiction' at his own peril. By making a single I contradiction', the accused places the entire statement in the hands of the prosecution to explain away everything with its assistance. One wonders if the legislature intended such a result, for it is too great a price for the accused to pay for too small a right. Fortunately, that is not the meaning of s. 162 of the Code of Criminal Procedure, and it is not necessary to read the word \" cross-examination \" in the proviso in a sense other than what it has. ", "The right of both the accused and the prosecution is limited to contradictions. It involves cross. examination by the accused as to that contradiction within s. 145 of the Indian Evidence Act and reexamination in relation to the matters I referred to in the cross-examination of the witness'. The prosecution cannot range at will to explain away every dis- crepancy but only such as the accused under his right has brought to light. In our opinion, reading the section in this way gives effect to every part and does not lead to the startling and, if we may say so, the absurd results which we have endeavoured to set out above. ", "The question may be asked, how is there to be a cross- examination about a previous statement ? It is difficult to illustrate one's meaning by entering into such an exposition. Any one interested to see the technique is invited to read Mrs. 's trial in the Notable English Trials (1912) at pages 77-79, the trial of , pages 35,36, 50-51. Examples will be found in every leading trial. The question is, did the legislature intend giving this right ? In our opinion, the legislature did and for the very obvious reason that it gave the prosecution also a chance to re-examine the witness, to explain I any matter referred to in the cross-examination of the witness. ", "116 ", "922 ", "We respectfully do not agree that the section should be construed in the way our learned brother has construed it. Though we agree as to the result, our opinion cannot be left unexpressed. If the section is construed too narrowly, the right it confers will cease to be of any real protection to the accused, and the danger of its becoming an impediment to effective cross-examination on behalf of the accused is apparent. ", "This brings us to the consideration of the questions, which were asked and disallowed. These were put during the cross- examination of , P. W. 30. They are: ", "Q. Did you state to the investigating officer that the gang rolled the dead bodies of , and and scrutinized them, and did you tell him that the face of resembled that of the deceased ? Q. Did you state to the investigating officer about the presence of the gas lantern ? ", "These questions were defective, to start with. They did riot set up a contradiction but attempted to obtain from the witness a version of what he stated to the police, which is then contradicted. What is needed is to take the statement of the police as it is, and establish a contradiction between that statement and the evidence in . To do otherwise is to transgress the bounds set by s. 162 which, by its absolute prohibition, limits even cross-examination to contradictions and no more. The cross-examination cannot even indirectly subserve any other purpose. In the questions with which we illustrated our meaning, the witness was not asked what he stated to the police,. but was told what he had stated to the police and asked to explain the omission. It is to be borne in mind that the statement made to the police is I duly proved' either earlier or even later to establish what the witness had then stated. In our opinion, the two questions were defective for the reasons given here, and were properly ruled out, even, though all the reasons given by the may not stand scrutiny. The matter was not followed up with proper questions, and it seems that similar questions on these and other points were not put to the witness out of deference (as it is now suggested) to the ruling of the . The accused can only blame themselves, if they did not. ", "The learned Judges of ruled out from their consideration that these two circumstances made it possible for the witnesses to recognise the accused, but hold that there was ample opportunity even otherwise for the witnesses to do so. was justified in so doing, and there being ample evidence on which they could come to the conclusion that the witnesses had, in fact, recognised the accused, it must inevitably be regarded as one of fact in regard to which this does not interfere. Since no other point was argued, the appeal must fail, and we agree that it be dismissed. ", "Appeal dismissed."], "relevant_candidates": ["0000028825", "0000390792", "0000675238", "0000821763", "0000886875", "0000892009", "0000925336", "0001073688", "0001480735", "0001813941"]} {"id": "0000059678", "text": ["JUDGMENT , Kt., C.J. ", "1. The plaintiffs sued for a declaration against the Secretary of and one Sanava kom Shiddangowda, that they, and not Sanava, were the Watandars of Nagwand Patilki watan, and for a permanent injunction restraining defendants Nos. 1 and 2 from recovering from plaintiffs more than assessment or judi payable on watan lands and for costs of the suit. ", "2. It is stated in the plaint that prior to 1812 four persons of defendant No. 2's family had owned half the Patilki watan of the village of Nagwand. But they left Nagwand for good and began to live in Mysore territory. Their watan lands remained uncultivated and thus lay fallow. Judi to the then remained unpaid by them. In these circumstances, the then , with a view to realize the judi due to it upon those lands, granted the Patilki watan to one the ancestor of the present plaintiffs, hereditarily at a reduced rate of judi for seven years. This represented to the then that the original house of the Patilki watan was situated near ' houses and lie being a Lingayat could not live in it. Upon this the were pleased to grant, in lieu of the house, another house and open space to , and also granted a for lands, i.e., deed of grant in 1812, in favour of . So, by the of 1812, the family of the present plaintiffs acquired half the Gowdki watan of Nagwand village, and similarly the family of defendant No. 2 ceased to be Watandars of the same watan. Since then the plaintiffs' family as Watandars of the Nagwand Gowdki watan had been in possession and enjoyment of the Patilki watan house and Patilki watan lands R Survey Nos. 94 and 95 of Nagwand village uptil now. In 1907, the present defendant No. 2 moved the revenue authorities to restore these watan lands to her under the Watan Act, but ultimately the Prant Officer rejected her application by an order, dated September 19, 1907. In 1919, the present defendant No. 2 again moved the revenue authorities, and finally the Commissioner S. D. passed, on May 17, 1921, an order that he did not consider it, necessary to cancel the Prant Officer's order, dated September 19, 1907. But, again, on July 24,1921, defendant No. 2, by an application, moved the Commissioner S. D, to revise his own order dated May 17, 1921, and, on November 30, 1921, the Commissioner passed the order that, under Section 8(2) of the Watan Act, the Collector should pass such order as he thought fit regarding the rent to be paid on . 94 and 95 of Nagwand village by plaintiffs to defendant No. 2.The Collector, accordingly, passed, on March 3, 1922, the order that the fair rent of Rs. 280 should be recovered from the plaintiffs and paid to defendant No. 2 so long as the plaintiffs continued to be in possession of these lands. Upon this the plaintiffs appealed to the Local , but it refused to interfere. The plaintiffs prayed (a) that the should declare that the plaintiffs are Watandars of the Nagwand Patilki watan, and that defendant No. 2 is not Watandar of the same watan; and (b) that the should issue a permanent injunction to defendants Nos. 1 and 2 that they should not recover from the plaintiffs more than assessment or judi payable on watan lands . 94 and 9a of Nagwand village. ", "3. Defendant No. 1 pleaded that the Court had no jurisdiction to take cognizance of the suit, under Section 4 (a) of the Bombay Revenue Jurisdiction Act, 1876; that the suit was barred by limitation under Article 120 of the Indian Limitation Act ; that the cause of action arose in 18S0 when the request of the plaintiffs' predecessor-in-title to be declared a Watandar was rejected; that it also arose in 1870 when, during an inquiry held for the determination of the custom of the watan as to service and the appointment of a representative Watandar, it was decided that the plaintiffs' predecessor-in-title was not a representative Watandar but held the watan land as tenant only; that the allegation in paragraph 7 of the plaint that the cause of action arose in 1921 was not true; that the allegations in paragraphs and 2 of the plaint that in 1812 the Patilki watan land in dispute was granted to the plaintiffs' ancestor was not true and was denied; that it was also denied that, in 1812 or at any time thereafter, the ancestor of defendant No. 2 ceased to be the Watandar or that the plaintiffs' ancestor was appointed and recognised as a Watandar of the Patilki watan in dispute. ", "4. It was also pleaded that the plaintiffs' ancestors were throughout in possession of the land as the tenants of defendant No. 2's ancestors to whom the land in dispute was assigned as remuneration for the Patilki office of Nagwand. ", "5. The District Judge held that the second relief claimed for an injunction clearly fell within the provisions of the Bombay Revenue Jurisdiction Act. It was a suit to set aside or avoid the order passed by the Collector, on March 3, 1922, in obedience to the Commissioner's request of November 30, 1921. That order was expressly made under Section 9 (2) of the Watan Act. It was made by an officer duly authorized in that behalf and such a suit was within the prohibition of Section 4(a)(3) of the Bombay Revenue Jurisdiction Act. ", "6. With regard to the first relief, the Judge thought that a more, difficult question was raised. He came to the conclusion that \"when an order is made on a specific decision, such as ia contained in Exhibit 36, that a person is not a Watandar, a person seeking to obtain a declaration from a civil that the decision is bad certainly seeks to avoid that order,\" and; accordingly the suit was dismissed with costs. ", "7. The plaintiffs have appealed. Pending the appeal died and one was placed on the record as her heir. But we are told now that does not claim to be the heir of , and, if it were necessary, the appeal would have to be adjourned for the purpose of amending the record, But if the District Judge was right in dismissing the suit for want of jurisdiction, then there would be no necessity for adjourning the appeal. ", "8. It has been argued that the order made by the Commissioner, on November 30, 1921, to the Collector was ultra vires, as he had no power to revise his own order of May 17, 1921. But it would appear from the record of the proceedings before the Commissioner on that date, that they were ex parte without hearing , and the Commissioner admitted that as had not been given full opportunity of representing her case, he reconsidered the matter on November 30, 1921, after hearing pleaders for and for respondents, the present appellants. ", "9. We do not think that those proceedings were ultra vires. It is a general principle that a party against whom an order ex parte is made is entitled to have the matter decided after arguments on both sides have been heard, so that the order passed by the Commissioner on November 30, 1921, was not, properly speaking, an order passed in revision, but an order properly made after hearing both the parties, one of whom had not been heard on the previous occasion, The Commissioner has given his reasons for holding that the present appellants were not Watan-dars. He referred particularly to the Kararpatra of 1866 by which the respondents' predecessor agreed to restore the whole of the watan land to the Watandars excepting one field which he was to retain as tenant for five years, i. e,, till 1871. That field is identical with the two Survey Numbers now in suit. ", "10. It has, therefore, been held by the Commissioner that there had been an alienation which showed that the appellants were not Watandars, and had never attained to any higher title to the said land than that of tenants. ", "11. We agree with the District Judge that this Court has no jurisdiction to set aside orders made under Sections 11 and 11A and Section 9 (2) of the Watan Act. ", "12. But it is contended by the plaintiff's that they would be entitled to ask the to grant them the declaration they asked for in the plaint, that they, and not defendant No. 2, are the Watandars of the watan in question, as against defendant No.2, leaving out of consideration defendant No. 1. In the first place, that would be striking out the main relief asked for in the plaint against both the defendants, and would also entirely change the character of the suit. Secondly, as the suit has been dismissed for want of jurisdiction, that does not bar the plaintiffs from bringing any other suit, which they may be advised, against the heirs of the original defandant No. 2. We say nothing with regard to the question whether such a suit would lie, But we think that, as long as the Secretary of is a party to the suit, such a declaration could not be granted. ", "13. In Phadnis' Vatan Act (3rd Edn.) at p. 461, reference is made to an unreported decision in v. (1920) F.A. No. 269 of 1918 in which said :- ", "In my opinion, when an order is baaed on a specific decision that a person is not a Watandar, a person seeking to obtain a declaration from that that decision is bad. certainly seeks to avoid that order,...Accordingly, the case clearly falls within the 3rd paragraph of Clause (a) of Section 4 (of the Revenue Jurisdiction Act) Also so far as the suit seeks relief against Government relating to Watan land it falls within the that paragraph of that clause-We were referred...to the decision in (1896) P.J. 666....It was there argued that the Secretary of was merely a formal party and that it was merely a contest between two private parties. No doubt, if that is the case in a auit, then the 3rd paragraph of Clause (a) of b. 4,.,does not come in the way of the plaintiff; and,... the decisions of this Court that has jurisdiction to entertain a suit to be declared a Watandar are really confined to cases of that class. In the leading case of v. (1883) I.L.R. 8 Bom. 25, there had apparently been no order against the plaintiff passed fay the Collector and it was merely a private dispute between the plaintiff and certain persons who denied plaintiff's status as a Watandar. ", "14. We agree with the conclusions arrived at by the learned Judges in that case. ", "15. Here the Commissioner has come to the conclusion that the appellants are not Watandars, and if we were to deal with the case as if the Secretary of were not a party, and there was merely a private dispute between the appellants and defendant No. 2 as to whether the plaintiffs were Watandars, we should be in effect passing judgment on the decision of the Commissioner, and oven if we were of opinion that the plaintiffs were Watandara, our decision would be of no value whatever to the plaintiffs as against . ", "16. We see no reason, therefore, why we should alter the character of the suit which is, we think, beyond the jurisdiction of the , in order to enable the plaintiffs to try and obtain what, as far as we can see, would be an entirely useless declaration. If, as a matter of fact, they are able to prove that the Kararpatra of 1866 was a forgery, then that might be of some assistance to them in prosecuting their claim for the declaration they ask for against defendant No. 2. That is a matter, however, with which we are not concerned in this suit. Therefore, we dismiss the appeal with costs. Two sets of costs."], "relevant_candidates": ["0000137039"]} {"id": "0000070466", "text": ["ORDER ", "1. Defendants in O.S.No.293 of 2001 on the file of the Subordinate Judge, Cuddalore, aggrieved by the order dated 29.11.2001 in I.A.No. 777 of 2001 in the said suit, has filed the above revision under Article 227 of the Constitution of India. Plaintiffs/respondents herein filed the said suit (O.S.No.293 of 2001) before , Cuddalore against the defendants/petitioners herein for declaration declaring that , Cuddalore is an independent entity outside the control of and that the suit property belongs absolutely to , and restraining the defendants, their men, agents or any person claiming under them by a decree of permanent injunction from in any manner interfering with the plaintiffs' possession and enjoyment of the suit property and their right to administer the affairs of . Pending suit, the plaintiffs filed I.A.No.777 of 2001 under Order 39, Rules 1 and 2 and Section 151 of the Code of Civil Procedure, praying for an order of interim injunction restraining the second respondent therein from acting as Pastor (Presbyter) of and the first respondent from appointing any other person as Pastor (Presbyter) of . The learned Subordinate Judge, by an order dated 29.11.2001, after hearing the arguments of the petitioners' side and perusing the records and after holding that they made out a prima facie case, granted ad interim injunction against the second respondent therein till 20.12.2001 and ordered Notice to the respondents. Against the said order, the respondents in that application preferred the present revision under Article 227 of the Constitution of India. ", "2. Heard the learned counsel for the petitioners as well as respondents. ", "3. Mr. , learned counsel appearing for the petitioners, after drawing my attention to the relevant provisions, namely, Order 39, Rules 1, 2 and 3 of the Code of Civil Procedure and by pointing out that inasmuch as the learned Subordinate Judge has not recorded any reason for the grant of interim order, the same is violative of the provisions of Order 39, Rule 3, C.P.C. and not sustainable. He also points out that in such a circumstance, the petitioners herein are entitled to seek constitutional remedy under Article 227 of the Constitution of India by way of revision before this Court. On the other hand, Mr. , learned counsel appearing for the respondents, vehemently contended that the present revision under Article 227 of the Constitution of India is not maintainable since the petitioners herein have effective remedy either by filing a petition for vacation of the injunction or filing an appeal before the appellate court accordingly prayed for dismissal of the revision petition. ", "I have carefully considered the rival submissions. ", "4. Since the issue arose in this Revision relates to interpretation of Order 39, Rules 1 and 3 C.P.C., it is useful to refer the same:- ", "\"Order 39, Rule I. Cases in which temporary injunction may be granted.-Where in any suit it is proved by affidavit or otherwise- ", "a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or ", "(b) that the defendant threatens, or intends, to remove or dispose of his property with a view to defrauding his creditors, ", "(c) that the defendant threatens to dispossess the plaintiffs or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as the Court thinks fit, until disposal of the suit or until further orders. ", "2. xx xx 2A. xx xx ", "3.Before granting injunction. to direct notice to opposite party.- The shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party. ", "Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the court shall record the reasons for its opinion that the object or granting the injunction would be defeated by delay, and require the applicant- ", "(a) to deliver to the opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with- ", "(i) a copy of the affidavit filed in support of the application; ", "(ii) a copy of the plaint; and ", "(iii) copies of documents on which the applicant relies, and ", "(b) to file, on the day on which such injunction is granted or on the day immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent.\" ", "5. Before considering the fact whether the learned Subordinate Judge, Cuddalore has complied with the conditions stipulated in the above Rules, it is but proper to refer the factual aspects. According to the petitioners, was formed by in the year 1947. is an unregistered body with a written constitution which governs the administration in the . It is divided into 21 Dioceses each administered by a body called which meets once in two/three years. ", "Each s is headed by a Bishop who presides over an elected Executive Committee which acts for in between the biennial meetings of . Each consists of several units called s. A pastorate consists of one or more congregations. Each has its own constitution which is in conformity with the constitution of and the . The properties of are held by () which is registered under the Companies Act , 1956. Though several civil and revenue proceedings had taken place, it is suffice to refer the filing of the suit, namely, O.S.No.293 of 2001 by the respondents herein before , Cuddalore. In that suit, they prayed for a declaration declaring that , Cuddalore is an independent entity outside the control of , declaring that the suit property belongs absolutely to and restraining the defendants, their men, agents or any person claiming under them by a decree of permanent injunction from in any manner interfering with the plaintiffs' possession and enjoyment of the suit property and their right to administer the affairs of . The plaintiffs also filed I.A.No. 777 of 2001 under Order 39, Rules 1 and 2 and Section 151 of the Code of Civil Procedure praying for an order of injunction against the 2nd respondent therein from acting as Pastor (Presbyter) of and from appointing any other person as Pastor (Presbyter) of pending suit. The Principal Subordinate Judge, Cuddalore took up the injunction application and passed the following orders on 29.11.2001:- ", "29.11.2001 Petitioner's side arguments Heard. Perused the records. Prima facie case made out. Hence, ad-interim injunction granted against 2nd respondent till 20/12. Notice to respondents by then. Prl. Subordinate Judge. ", "29.11.2001\" ", "Petition Under Order 39, Rules 1 and 2 Section 151 . C.P.C. ", "Mr. , learned counsel for the petitioners herein by drawing my attention to Order 39, Rules 1 and 3, vehemently contended that in the absence of recording the reasons for granting ad-interim injunction before hearing the other side, the interim order passed by the learned Subordinate Judge cannot be sustained. He also contended that the plaintiffs have not enclosed any document either along with the plaint or with the injunction application; hence there is no question of \"perusing the records\" as stated by the learned Subordinate Judge. Any party who files a suit for necessary relief is also entitled for a temporary injunction under Order 39, Rule 1. The said application must be supported by affidavit stating that the property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree or that the other party threatens, or intends, to remove or dispose of his property with a view to defraud. In other words, if there is sufficient materials and apprehension to show that the defendant is likely to waste, damage, alienate, sell or dispossess the property in dispute or otherwise cause injury to the plaintiff in relation to the property in dispute in the suit, he can ask for a temporary injunction either until the disposal of the suit or until further orders. Like wise, in a suit for restraining the defendant from committing a breach of contract or other injury, the plaintiff may at any time during the pendency of the suit apply to the , for temporary injunction to restrain the defendant from committing the breach of contract or injury complained of. In all these cases, the may by order grant injunction, on such terms as to the duration of the injunction. The power granted under Rules 1 and 2 of Order 39 is subject to the conditions prescribed in Rule 3. As per Rule 3, in all the injunction applications the normal rule is to issue notice of the application to the opposite party. However, if it appears to the that the object of granting injunction would be defeated by delay, the shall, before granting an injunction, direct notice of the application for the same to be given to the opposite party. The can grant injunction without giving notice of the application to the opposite party by recording the reasons for its opinion and also require the applicant to fulfill the conditions stipulated in Clauses (a) (i) (ii) and (iii) and (b) of Rule 3. In the order under challenge, the learned Subordinate Judge has no doubt stated that he heard the \"petitioners' side arguments\" and \"perused the records.\". He also stated that there is a \"prima facie case\". Before going further, as rightly contended by Mr. , the plaintiffs have not produced a single document in support of their allegations along with the plaint. A perusal of the copy of the plaint filed in the typed-set of papers as well as the certified copy of the plaint produced at the time of hearing shows that the plaintiffs have not produced documents along with the plaint. Order 7, Rule 9 insists that plaintiff shall endorse on the plaint, or annex thereto, a list of the documents, if any, which he has produced along with it and if the plaint is admitted, he has to present within such time as may be fixed by the or extended by it from time to time as many copies for the service of the defendants. If documents are enclosed along with the plaint, Sub-rule (4) of Rule 9 enables the Chief Ministerial Officer of the to sign such list and copies of such statements regarding the correctness of the same. Mr. , learned counsel appearing for the respondents, fairly admitted that the plaint did not contain documents. However, it is stated that at the time of hearing of the injunction application I.A.No.777 of 2001, necessary documents have been placed before the and after perusing those documents, the learned Subordinate Judge has granted ad-interim injunction. He also points out that the copies of those documents have been served on the respondents therein along with the copy of the injunction petition, affidavit, plaint etc. According to Mr. , this shows that the plaintiffs have produced those documents at the time of hearing of the injunction application. I am unable to accept the said contention, since the injunction application I.A.No.777 of 2001 did not contain any such enclosures as claimed by Mr. . The petition and order finds a place at pages 30 and 31 of the typed book. Absolutely there is no reference regarding details of those documents whether they were filed along with the petition or placed at the time of hearing of the injunction application. In other words, except the oral statement of Mr. , absolutely there is no iota of evidence to show that the documents have been filed either along with the plaint or in the injunction application. In such a circumstance, as rightly contended by Mr. , except the averments in the affidavit and plaint, no documents have been placed before the ; accordingly the statement of the learned Subordinate Judge that he \"perused the records\" cannot be sustained. ", "6. The scope of Order 39, Rule 3, particularly giving reason/reasons for granting injunction without giving notice of the application to the opposite party and the effect of the same has been considered in various decisions. In v. , , three Judge Bench of has held that reasons to be recorded before grant of ex parte injunction under Order 39 Rule 3. This question was elaborately considered in para 38 of their judgment:- ", "\"38. This Court had occasion to emphasise the need to give reasons before passing ex parte orders of injunction. , \"...the court shall record the reasons' why an ex pane order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party which invokes the jurisdiction of the court for grant of an order of restrain against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex parte order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authority concerned to record reasons before exercising power vested in them. In respect of some of such provisions it has been held that they are required to be complied with but non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been imposed that court must record reasons before passing such order. If it is held that the compliance with the proviso aforesaid is optional and not obligatory, then the introduction of the proviso by the shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not at all. This principle was approved and accepted in well-known cases of v. , 1875 (1) Ch D 426: 45 LJ Ch 373), and AIR 1936 PC 253(2) :63 IA 372: 37 Crl LJ 897. This Court has also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of , 1975(1) SCC 915. ", "As such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed.\" ", "After saying so and after considering the merits of the case before them, Their Lordships have concluded that, (para 39) \"39...As to why the respondent chose to come at the eleventh hour and where was the need to pass an urgent order of injunction, are mailers which are not discernible. Besides tested in the light of the case law set out above, the impugned order which is bereft of reason and laconic cannot stand a moment's scrutiny.\" ", "7. , , which is also another three Judge Bench of , it has been held that, (para 30) \"30....It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course. Grant of injunction is within the discretion of the court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status quo. The court grants such relief according to the legal principles - ex debito justitiae. Before any such order is passed the court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him.\" ", "8. It is clear from Rule 3 that whenever the intends to grant ex parte injunction without notice to the opposite part, the shall record its reason/reasons for its opinion that the object of granting the injunction would be defeated by the delay and also require the applicant to fulfil the conditions stipulated in Clause (a) and (b) therein. Though the learned Subordinate Judge has stated that he heard the arguments of the petitioners' side, perused the records and found that a prima facie case is made out in favour of the petitioners, first of all there is no question of perusing the records in the absence of any documents filed either along with the plaint or with the injunction application. The mere statement that 'there is a prima facie made out' would not be sufficient for strict compliance of Rule 3. As a matter of fact, the courts have taken a view that apart from arriving at a conclusion that a prima facie case is made out, in certain matters, the court has to satisfy the maintainability of the suit etc. It is to be noted that grant of injunction is an extraordinary power vested in the to be exercised taking into consideration the facts and circumstances of a particular case. The s have to be more cautious that when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed. That is why Rule 3 of Order 39 of the Code requires that in all cases the court shall, before grant of an injunction, direct notice of the application to be given to the opposite party, except where it appears that object of granting injunction itself would be defeated by delay. By the Civil Procedure Code (Amendment) Act, 1976, a proviso has been added to the said rule saying that \"where it is proposed to grant an injunction without giving notice of the application to the opposite-party, the court shall record the reasons for its opinion that, the object of granting the injunction would be defeated by delay. In view of the Proviso to Rule 3 aforesaid, 1 hold that without recording the reasons, the grant of ad-interim injunction cannot be sustained. When the statute itself requires reasons to be recorded, the cannot ignore the requirements. Further, the condition so introduced .is that the court \"shall record the reasons\" why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party which invokes the jurisdiction of the court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex parte order. Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not at all. This principle was approved and accepted in well-known cases of v. , 1875 (1) Ch D 426: 45 LJ Ch 373 and , AIR 1936 PC 253 (2). To make it clear that whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed. It is also relevant to note the decision of the Apex in , , wherein Their Lordships have held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. In the light of the specific provision, namely, Proviso to Rule 3, in the absence of recording reasons for granting ad-interim injunction even before notice to the opposite party, I hold that the impugned order of the learned Subordinate Judge dated 29.11.2001 is liable to be interfered. ", "9. Now I shall consider whether the impugned order can be interfered by exercising the constitutional remedy under Article 227 of the Constitution of India or the aggrieved party has to go before the same court for vacation of the injunction order or file an appeal before the appellate court to vindicate their grievance. Mr. , learned counsel for the respondents by relying on a latest decision of in ., , contended that the remedy under Article 227 of the Constitution of India is not appropriate and the proper course for the petitioner herein is to go before the same court or file an appeal before the appellate court. In the said decision, the power of the court to pass ex pane order of injunction with or without notice, interim or temporary or till further orders or till the disposal of the suit, and the non-compliance of Rule 3 (a) or (b) as well as interference by this exercising Article 227 of the Constitution of India have been considered. The facts in that case are the plaintiff claims to be a lessee under one , 6th defendant in the suit in respect of the property and on that strength he claimed to be in possession of the property. He alleged that the defendants 1 to 5 have been threatening to dispossess him. The appellant/plaintiff filed the suit on 25.6.99 for a decree of permanent injunction restraining defendant Nos. 1 to 5 from dispossessing him. Along with the institution of the suit he moved an application under Order 39, Rules 1 and 2 of the Code of Civil Procedure to pass an ad-interim injunction restraining the respondents 1 to 5 or their men or agents, or their representatives or any person claiming through them or under them from evicting the petitioner from the suit property other than by due process of law. On 29.6.99 the Assistant Judge of the City Civil , Chennai passed an ex pane order of injunction. In the order, the learned Judge has stated that he perused the documents. Rental receipt document 11 to document 47 proves that the petitioner is the statutory tenant and in prima facie possession of the suit property. The balance of convenience is in favour of the petitioner. In the interest of justice, it appears that R-1 to R-5 are restrained from evicting the petitioner from the suit property; accordingly granted interim injunction till 25.8.99. The first respondent on behalf of himself and respondents 2 to 5, filed a revision petition invoking Article 227 of the Constitution before this court alleging that they purchased the property from the owners thereof its per different sale documents executed on 15.3.96, and they were in possession and enjoyment of the property. The learned Single Judge of this , who disposed of the revision, made the observation that the trial court ought not have granted an order of injunction at the first stage itself which could operate beyond thirty days as the court had then no occasion to know of what the affected party has to say about it. Such a course is impermissible under Order 39, Rule 3-A of the Code, according to the learned Single Judge and, therefore, he set aside the injunction order. After holding that there is no documents to show that the first respondent is actually in possession and running such a business except the lease deed, he came to the conclusion that the ex parte order is unsustainable and accordingly set aside the order of the trial Judge. After holding so, the learned Single Judge directed the trial court to lake up the interlocutory application for injunction and pass orders on merits and in accordance with law. It was contended before the Supreme court that the High should not have entertained a petition under Article 227 of the Constitution when the respondent had two remedies statutorily available to him first is that the respondent could have approached the trial court for vacating, if not for any modification, of the interim ex parte order passed. Second is that an appeal could have been preferred by him against the said order. It was also stated that it is open to the respondent to opt either of the two remedies. After referring to Rule 3 of Order 39, the Supreme has arrived at the following conclusion:- (para 12 of L.W) \" 12. What would be the position if a court which passed the order granting interim ex parte injunction did not record reasons thereof or did not require the applicant to perform the duties enumerated in Clauses (a) and (b) of Rule 3 of Order 39. In our view, such an order can be deemed to contain such requirements at least by implication even if they are not stated in so many words. But if a party, in whose favour an order was passed ex pane, fails to comply with the duties which he has to perform as required by the proviso quoted above, he must take the risk. Non-compliance with such requisites on his part cannot be allowed to go without any consequence and to enable him to have only the advantage of it. The consequence of the party (who secured the order) for not complying with the duties he is required to perform is that he cannot be allowed to take advantage of such order if the order is not obeyed by the other party. A disobedient beneficiary of an order cannot be heard to complain against any disobedience alleged against another party. \" ", "It is also relevant to note the further conclusion of Their Lordships in para 18, \"18. It is the acknowledged position of law that no party can be forced to suffer for the inaction of the court or its omissions to act according to the procedure established by law. Under the normal circumstances, the aggrieved party can prefer an appeal only against an order passed under Rules 1, 2, 2A, 4 or 10 of Order 39 of the Code in terms of Order 43 Rule 1 of the Code. He cannot approach the appellate or revisional court during the pendency of the application for grant or vacation of temporary injunction. In such circumstances, the party who does not get justice due to the inaction of the court in following the mandate of must have a remedy. So we are of the view that in a case where the mandate of Order 39 Rule 3A of the Code is flouted, the aggrieved party, shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force. In such appeal, if preferred, the appellate court shall be obliged to entertain the appeal and further to take note of the omission of the subordinate court in complying with the provisions of Rule 3A. In appropriate cases, the appellate court, apart from granting or vacating or modifying the order of such injunction, may suggest suitable action against the erring judicial officer, including recommendation to take steps for making adverse entry in his ACRs. Failure to decide the application or vacate the ex parte temporary injunction shall, for the purposes of the appeal, be deemed to be the final order passed on the application for temporary injunction, on the date of expiry of thirty days mentioned in the Rule.\" ", "Mr. very much relied on the conclusion of Their Lordships in para 12 and 18 extracted above. Though the said decision supports the contention of the learned counsel for the respondents, the facts in that case clearly show that the learned Single Judge of interfered in the revision filed under Article 227 of the Constitution mainly on the ground that the trial court ought not have granted an order of injunction at the first stage itself which could operate beyond 30 days and according to the learned single Judge, such a course is impermissible under Order 39, Rule 3-A of the Code. He, therefore, set aside the injunction order \"for the clear transgression of the provisions of law\" and noted that this is the third suit filed in reference to the suit property and hence deprecated the grant of ex parte injunction without notice. Order 39, Rule 3-A of the Code emphasises that should dispose of the applications for injunction within 30 days. It is clear that where an injunction has been granted without giving notice to the opposite party, the shall make an endeavour to finally dispose of the application within 30 days from the date on which the injunction was granted; and where it is unable so to do, it shall-record its reasons for such inability. That is not the position in the case on hand. In the present case, the learned Subordinate Judge, Cuddalore, by Order dated 29.11.2001, case has granted ad-interim injunction till 20.12.2001. The Hon'ble Supreme after holding that the said Rule does riot say that the period of injunction should be restricted by the to 30 days at the first instance, but the court should pass final order on it within 30 days from the day on which the injunction was granted, came to the conclusion that the order does not ipso facto become illegal merely because it was not restricted to a period of 30 days or less. It is also clear that the (Supreme ) was to consider the consequence, if any, on account of the court failing to pass the final orders within 30 days as enjoined by Rule 3-A. Only in this context, the Supreme has held that the aggrieved party shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force. This is clear from para 18 of Their Judgment. The reading of paragraph 18 of their Judgment, it is clear that the aggrieved party can prefer an appeal only against an order passed under Rules 1, 2, 2A, 4 or 10 of Order 39 of the Code in terms of Order 43 Rule 1 of the Code. The Hon'ble Supreme has also expressed that in a case where the mandate of order 39 Rule 3 A of the Code is floated, the aggrieved party shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force. They also observed that in such appeal, if preferred, the appellate court shall be obliged to entertain the appeal and further to take note of the omission of the subordinate in complying with the provisions of Rule 3A. In the present case, inasmuch as the learned Subordinate Judge has not recorded the reason for its opinion for granting ad-interim injunction without giving notice of application to the opposite party, I am of the view that the said decision is not helpful to the respondents' case as claimed by Mr. . I am also satisfied that Their Lordships have very much considered the consequence of failure of non-compliance of Sub-rule (a) or (b) of Rule 3 and Rule 3A. Further, the earlier judgments of the Supreme , particularly regarding Proviso to Rule 3 have not been cited or referred to in ., 2001 (1) L.W. 429. I have already referred to the decisions reported in , and , , wherein the three Judge Bench of the Hon'ble Supreme after considering the Proviso to Rule 3, have held in categorical terms that ex parte injunction without recording reasons for its opinion cannot be sustained and this can interfere by exercising the constitutional power under Article 227. For these reasons, I am of the view that the two Judge Bench decision reported in ., 2001 (1) L.W. 429 relied on by Mr. is not helpful and applicable to the case on hand. ", "10. Learned counsel appearing for the respondents has also very much relied on a Judgment of , J., the then Hon'ble Chief Justice of this in ., 1996 (2) L.W. 834. No doubt, in similar circumstance, the Hon'ble Judge in para 4 of the Judgment has held that, \"4. Even assuming for a moment that what is passed is only an ad-interim injunction, ignoring the provisions contained in Rule 3 of Order 39 of Civil Procedure Code, the only appropriate course for the party against whom an order of injunction is issued, is to file objections immediately without waiting for service of notice, and seek vacation of the same. Rule 3-A of Order 39, C.P.C. specifically provides that where an injunction has been granted without giving a notice to the opposite party the shall make an endeavour to finally dispose of the application within 30 days from the date on which the injunction was granted; and where it is unable so to do, it shall record its reasons for such inability. Therefore, it becomes incumbent on the part of the granting an injunction without giving a notice to the opposite party to decide the application within four weeks. That being the position, the practice of filing a Civil Revision Petition against the ad-interim injunction and entertaining of the same by this cannot be encouraged, rather it should be deprecated, and discontinued....\" ", "Though Mr. heavily relied on the above passage of the conclusion of the Hon'ble Judge, it is to be noted that the said conclusion had been arrived at in a revision filed under Section 115 , C.P.C. against the ex parte order of injunction passed under Order 39, Rules t and 3. Admittedly, it seems that the decisions of reported in , and , were not brought to the notice of the Hon'ble Judge. Apart from this, the learned Judge had no occasion to consider the power of interference under Article 227 of the Constitution of India. I have already stated that the case before the learned Judge relates to revision filed under Section 115 , C.P.C. In such a circumstance, I am of the view that the conclusion arrived at by the learned Judge is to be confined to the revision petitions filed under Section 115 , C.P.C., accordingly the same is also not helpful to the present case. ", "11. It is relevant to refer a decision of in , , wherein their lordships have held that rigid and inflexible view of jurisdiction under Article 227 should not be taken. Their Lordships have also held that \" Article 227 or Article 226 was devised to advance justice and not to thwart it. Even as early as in 1954 of in , had held that the power of superintendence conferred by Article 227 is to be exercised most sparingly and only in appropriate cases in order to keep subordinate within the bounds of their authority apart from and independently of the provisions of other laws conferring revisional jurisdiction on . It is also relevant to note the latest decision of in , regarding the revisional jurisdiction of this under Article 227 of the Constitution. In the said decision, Their Lordships have held in para 26 that \"when there is error of jurisdiction or flagrant violation of the law laid down by this , by exercising the revisional powers, the court can set aside the order passed by the to do justice between the parties.\" It is clear that error of jurisdiction or flagrant violation of the law laid down by can be set aside by this under Article 227 of the Constitution. As already referred to by me, in the case of granting injunction without hearing the opposite party, it is mandatory on the part of the trial court to record the reasons for its opinion for granting such injunction. When the said condition is violated, I am of the view that in order to do justice between the parties, this can interfere by exercising the revisional powers under Article 227 of the Constitution. The impugned order which is bereft of reason and laconic cannot stand a moment's scrutiny as ruled in , . If it is held that the compliance with the proviso in Rule 3 is optional and not obligatory, then the introduction of the proviso by the shall be a futile exercise. As observed by the Hon'ble Supreme , Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not at all. Inasmuch as this condition has been violated by the learned Subordinate Judge, the impugned order is liable to be set aside. ", "12. Net result, the order dated 29.11.2001 of the Subordinate Judge, Cuddalore in I.A.No. 777 of 2001 in O.S.No.293 of 2001 is set aside. Civil Revision Petition is allowed. No costs."], "relevant_candidates": ["0000361106", "0000442524", "0000863497", "0000997610", "0001014408", "0001120137", "0001740954", "0001831036", "0001986616"]} {"id": "0000078536", "text": ["PETITIONER: Vs. RESPONDENT: THE ADMINISTRATOR, UNION TERRITORY OF DELHI & ORS. DATE OF JUDGMENT13/01/1981 BENCH: BHAGWATI, P.N. BENCH: BHAGWATI, P.N. FAZALALI, SYED MURTAZA CITATION: 1981 AIR 746 1981 SCR (2) 516 1981 SCC (1) 608 1981 SCALE (1)79 CITATOR INFO : RF 1981 SC2041 (9) D 1982 SC 710 (92,93) D 1982 SC1029 (14) MV 1982 SC1325 (16,36,75) R 1982 SC1473 (11) E&D 1985 SC1618 (9) R 1986 SC 180 (39,42) RF 1986 SC 847 (12) RF 1987 SC 990 (16) R 1991 SC 101 (239) RF 1991 SC1902 (24) RF 1992 SC1858 (10) ACT: Right of the detenu under Conservation of Foreign Exchange & Prevention of Smuggling Activities Act , to have interview with a lawyer and the members of his family- Section 3(b)(i) & (ii) read with rule 559A and 550 of the Punjab Manual of the Superintendence and Management of Jails-Whether violates Articles 14 and 21 of the Constitution and hence invalid-Distinction between preventive detention with punitive detention-Constitution of India 1950 Article 21 , scope of. HEADNOTE: Allowing the writ petition, the ^ HELD : (1) While considering the question of validity of conditions of detention courts must necessarily bear in mind the vital distinction between preventive detention and punitive detention. Punitive detention is intended to inflict punishment on a person, who is found by the judicial process to have committed an offence, while preventive detention is not by way of punishment at all, but it is intended to pre-empt a person from indulging in conduct injurious to the society. [523 A-B] (2) The power of preventive detention has been recognised as a necessary evil and is tolerated in a free society in the larger interest of security of the State and maintenance of public order. It is a drastic power to detain a person without trial and in many countries it is not allowed to be exercised except in times of war or aggression. The Indian Constitution does recognise the existence of this power, but it is hedged-in by various safeguards set out in Articles 21 and 22. Article 22 in clauses (4) to (7) deals specifically with safeguards against preventive detention and enjoins that any law of preventive detention or action by way of preventive detention taken under such law must be in conformity with the restrictions laid down by those clauses on pain of invalidation, Article 21 also lays down restrictions on the power of preventive detention. [523 B-D] Article 21 as interpreted in case requires that no one shall be deprived of his life or personal liberty except by procedure established by law and this procedure must be reasonable, fair and just and not arbitrary, whimsical or fanciful and it is for the to decide in the exercise of its constitutional power or judicial review whether the deprivation of life or personal liberty in a given case is by procedure, which is reasonable, fair and just or it is otherwise. The law of preventive detention must, therefore, pass the test not only of Article 22 but also of Article 21. But, despite these safeguards laid down by the Constitution and creatively evolved by the s. the power of preventive detention is a frightful and awesome power with drastic consequences affecting personal liberty, which is the most cherished 517 and prized possession of man in a civilised society. It is a power to be exercised with the greatest care and caution and the courts have to be ever vigilant to see that this power is not abused or misused, inasmuch as the preventive detention is qualitatively different from punitive detention and their purposes are different. In case of punitive detention, the person has fullest opportunity to defend himself, while in case of preventive detention, the opportunity that he has for contesting the action of the Executive is very limited. Therefore, the \"restrictions placed on a person preventively detained must, consistently with the effectiveness of detention, be minimal\". [524A- , 1 SCC 248; M.O. Hoscot v. State of Maharashtra, 1 SCR 192; , 1 SCC 81; , 1 SCR 392; , 2 SCR 557, referred to. , 3 SCR 574, followed. 3. The prisoner or detenu has all the fundamental rights and other legal rights available to a free person, save those which are incapable of enjoyment by reason of incarceration. A prisoner or detenu is not stripped of his fundamental or other legal rights, save those which are inconsistent with his incarceration, and if any of these rights are violated, the will immediately spring into action and run to his rescue. [525 B-C, 526 G-H, 527 , 1 SCR 392; , 2 SCR 557, 1 SCR 702; , 2 SCR 24, followed. Case, 417 US 817: 41 Lawyers Edition 2nd 495; , 41 Lawyers Edition 2nd 935, quoted with approval. (4) While arriving at the proper meaning and content of the right to life, the attempt of the court should always be to expand the reach and ambit of the fundamental right rather than to attenuate its meaning and content. A constitutional provision must be construed, not in a narrow and constricted sense, but in a wide and liberal manner so as to anticipate and take account of changing conditions and purposes so that the constitutional provision does not get atrophied or fossilized but remains flexible enough to meet the newly emerging problems and challenges. This principle applies with greater force in relation to a fundamental right enacted by the Constitution. The fundamental right to life which is the most precious human right and which forms the ark of all other rights must therefore be interpreted in a broad and expansive spirit so as to invest it with significance and vitality which may endure for years to come and enhance the dignity of the individual and the worth of the human person. [527 C-D, 528 . 54 Lawyers Edition 801, quoted with approval. (5) The right to life enshrined in Article 21 cannot be restricted to mere animal existence. It means something much more than just physical survival. 518 Every limb or faculty through which life is enjoyed is thus protected by Article 21 and a fortiorari, this would include the faculties of thinking and feeling. Now deprivation which is inhibited by Article may be total or partially neither any limb or faculty can be totally destroyed nor can it be partially damaged. Moreover it is every kind of deprivation that is hit by Article 21 , whether such deprivation be permanent or temporary and, furthermore, deprivation is not an act which is complete once and for all: it is a continuing act and so long as it lasts, it must be in accordance with procedure established by law. Therefore any act which damages or injures or interferes with the use of any limb or faculty of a person either permanently or even temporarily, would be within the inhibition of Article 21. [528 D, G-H, 529 A] v. State of Uttar Pradesh, 1 SCR 232, followed. v. Illinois 94 US 133, referred to. , 2 SCR 557, applied. (6) The right to life includes the right to live with human dignity and all that goes along with it, namely, the bare necessaries of life such as adequate nutrition, clothing and shelter and facilities for reading, writing and expressing oneself in diverse forms, freely moving about and mixing and commingling with fellow human beings. The magnitude and content of the components of this right would depend upon the extent of the economic development of the country, but it must, in any view of the matter, include the right to the basic necessities of life and also the right to carry on such functions and activities as constitute the bare minimum expression of the human self. Every act which offends against or impairs human dignity would constitute deprivation pro tanto of this right to live and it would have to be in accordance with reasonable, fair and just procedure established by law which stands the test of other fundamental rights. Therefore, any form of torture or cruel, inhuman or degrading treatment would be offensive to human dignity and constitute an inroad into this right to live and it would, on this view, be prohibited by Article 21 unless it is in accordance with procedure prescribed by law, but no law which authorises and no procedure which leads to such torture or cruelty, inhuman or degrading treatment can ever stand the test of reasonableness and non-arbitrariness: it would plainly be unconstitutional and void as being violative of Article 14 and 21. [529 B-F] (7) There is implicit in Article 21 the right to protection against torture or cruel, inhuman or degrading treatment which is enunciated in Article 5 of the Universal Declaration of Human Rights and guaranteed by Article 7 of the international Covenant on Civil and Political Rights. This right to live which is comprehended within the broad connotation of the right to life can concededly be abridged according to procedure established by law and therefore, when a person is lawfully imprisoned, this right to live is bound to suffer attenuation to the extent to which it is incapable of enjoyment by reason of incarceration. The prisoner or detenu obviously cannot move about freely by going outside the prison walls nor can be socialise at his free will with persons outside the jail. But, as part of the right to live with human dignity and therefore, as a necessary component of the right to life, he would be entitled to have interviews with the members of his family and friends and no prison regulation or procedure laid down by prison regulation regulating the right to have interviews with the members of the family and 519 friends can be upheld as constitutionally valid under Article 14 and 21 , unless it is reasonable, fair and just. Considered from the point of view also of the right to personal liberty enshrined in Article 21 , the right to have interviews with members of the family and friends is clearly part of personal liberty guaranteed under that Article. The expression \"personal liberty\" occurring in Article 21 is of the widest amplitude and it covers a variety of rights which go to constitute the personal liberty of a man and it also includes rights which \"have been raised to the status of distinct Fundamental Rights and given additional protection under Article 19\". Therefore, personal liberty would include the right to socialise with members of the family and friends subject, of course, to any valid prison regulations and under Articles 14 and 21, such prison regulations must be reasonable and non-arbitrary. If any prison regulation or procedure laid down by it regulating the right to have interviews with members of the family and friends is arbitrary or unreasonable, it would be liable to be struck down as invalid as being violative of Articles 14 and 21. [530 , 1 SCC 248, applied. (8) Sub-clause (ii) of clause 3(b) of the Conditions of Detention Order is violative of Articles 14 and 21 in so far as it permits only one interview in a month to a detenu. When an under-trial prisoner is granted the facility of interviews with relatives and friends twice in a week under Rule 559A and a convicted prisoner is permitted to have interviews with his relatives and friends, once in a week under Rule 550, sub-clause (ii) of clause 3(b) of the Conditions of Detention Order, which restricts the interview only to one in a month in case of a detenu, is unreasonable and arbitrary, particularly when a detenu stands on a highest pedestal than an under-trial prisoner or a convict. A detenu must be permitted to have at least two interviews in a week with relatives and friends and it should be possible for relative or friend to have interview with the detenu at any reasonable hour on obtaining permission from the Superintendent of the Jail and it should not be necessary to seek the permission of the District Magistrate, Delhi, as the latter procedure would be cumbrous and unnecessary from the point of view of security and hence unreasonable. Even independently of Rules 550 and 559A, of the Punjab Manual for the Superintendence and Management of Jails, the present norm of two interviews in a week for prisoners furnishes a reasonable and non-arbitrary criterion. [530 F-H, 531 , 3 SCR 574, applied. (9) Sub-clause (i) of clause 3(b) of the Conditions of Detention Order regulating the right of a detenu to have interview with a legal adviser of his choice is violative of Article 14 and 21 and therefore unconstitutional and void, It would be quite reasonable if a detenu were to be entitled to have interview with his legal adviser at any reasonable hour during the day after taking appointment from the Superintendent of the Jail, which appointment should be given by the Superintendent without any avoidable delay. The interview need not necessarily take place in the presence of a nominated officer of Customs/ Central Excise/Enforcement but if the presence of such officer can be conveniently secured at the time of the interview without involving any postponement of the interview, than such officer and if his presence cannot be so secured, 520 then any other Jail official may, if thought necessary, watch the interview but in a month to a detenu. When an under-trial prisoner is granted the facility [532C-F] (10) The right of a detenu to consult a legal adviser of his choice for any purpose not necessarily limited to defence in a criminal proceeding but also for securing release from preventive detention or filling a writ petition or prosecuting any claim or proceeding, civil or criminal is obviously included in the right to live with human dignity and is also part of personal liberty and the detenu cannot be deprived of this right nor can this right of the detenu be interfered with except in accordance with reasonable, fair and just procedure established by a valid law. [531C-E] JUDGMENT: ", "ORIGINAL JURISDICTION: Writ Petition No. 3042 of 1980. (Under Article 32 of the Constitution.) (Dr.) and for the Petitioner. ", " and for the Respondents Nos. 1-2. ", "The Judgment of the Court was delivered by , J. This petition under Article 32 of the Constitution raises a question in regard of the right of a detenu under the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act (hereinafter referred to as COFEPOSA Act ) to have interview with a lawyer and the members of his family. The facts giving rise to the petition are few and undisputed and may be briefly stated as follows: ", "The petitioner, who is a British national, was arrested and detained in the Central Jail, Tihar under an Order dated 23rd November 1979 issued under section 3 of the COFEPOSA Act. She preferred a petition in this Court for a writ of habeas corpus challenging her detention, but by a judgment delivered by this Court on 27th February 1980, her petition was rejected with the result that she continued to remain under detention in the Tihar Central Jail. Whilst under detention, the petitioner experienced considerable difficulty in having interview with her lawyer and the members of her family. Her daughter aged about five years and her sister, who was looking after the daughter, were permitted to have interview with her only once in a month and she was not allowed to meet her daughter more often, though a child of very tender age. It seems that some criminal proceeding was pending against the petitioner for attempting to smuggle hashish out of the country and for the purpose of her defence in such criminal proceeding, it was necessary for her to consult her lawyer, but even her lawyer found it difficult to obtain an interview with her because in order to arrange an interview, he was required to obtain prior appointment from the District Magistrate, Delhi and the interview could take place only in the presence of a Officer nominated by the Collector of . This procedure for obtaining interview caused considerable hardship and inconvenience and there were occasions when, even after obtaining prior appointment from the District Magistrate, Delhi, her lawyer could not have an interview with her since no Officer nominated by the Collector of remained present at the appointed time. The petitioner was thus effectively denied the facility of interview with her lawyer and even her young daughter 5 years old could not meet her except once in a month. This restriction on interviews was imposed by the Prison Authorities by virtue of clause 3(b) sub-clauses (i) and ", "(ii) of the Conditions of Detention laid down by under an Order dated 23rd August 1975 issued in exercise of the powers conferred under section 5 of the COFEPOSA Act. These two sub-clauses of clause 3(b) provided inter alia as under: ", "\"3. The conditions of detention in respect of classification and interviews shall be as under:- ", "(a) .......... ", "(b) Interviews: Subject to the direction issued by the Administrator from time to time, permission for the grant of interviews with a detenu shall be granted by the District Magistrate, Delhi as under:- ", "(i) Interview with legal adviser: ", "Interview with legal adviser in connection with defence of a detenu in a criminal case or in regard to writ petitions and the like, may be allowed by prior appointment, in the presence of an officer of to be nominated by the local Collector of or Deputy Director of Enforcement who sponsors the case for detention. ", "(ii) Interview with family members: ", "A monthly interview may be permitted for members of the family consisting of wife, children or parents of the detenu ..........\" ", "The petitioner, therefore, preferred a petition in this Court under Article 32 challenging the constitutional validity of sub-clauses (i) and (ii) of clause 3(b) of the Conditions of Detention Order and praying that the Administrator of the Union Territory of Delhi and the Superintendent of Tihar Central Jail be directed to permit her to have interview with her lawyer and the members of her family without complying with the restrictions laid down in those sub-clauses. ", "The principal ground on which the constitutional validity of sub-clauses (i) and (ii) of clause 3(b) of the Conditions of Detention Order was challenged was that these provisions were violative of Articles 14 and 21 of the Constitution inasmuch as they were arbitrary and unreasonable. It was contended on behalf of the petitioner that allowing interview with the members of the family only once in a month was discriminatory and unreasonable, particularly when under-trial prisoners were granted the facility of interview with relatives and friends twice in a week under Rule 559A and convicted prisoners were permitted to have interview with their relatives and friends once in a week under Rule 550 of the Rules set out in the Manual for the Superintendence and Management of Jails in the Punjab. The petitioner also urged that a detenu was entitled under Article 22 of the Constitution to consult and be defended by a legal practitioner of his choice and she was, therefore entitled to the facility of interview with a lawyer whom he wanted to consult or appear for him in a legal proceeding and the requirement of prior appointment for interview and of the presence of a Customs or Excise Officer at the interview was arbitrary and unreasonable and therefore violative of Articles 14 and 21. The respondents resisted the contentions of the petitioner and submitted that sub- clauses (i) and (ii) of clause 3(b) were not violative of Articles 14 and 21, since the restrictions imposed by them were reasonable, fair and just, but stated that they would have no objection if instead of a monthly interview, the petitioner was granted the facility of interview with her daughter and sister twice in a week as in the case of under- trial prisoners and so far as interview with the lawyer is concerned, they would not insist on the presence of a customs or excise officer at the interview. Though these two concessions were made on behalf of the respondents at the hearing of the petition before us, the question still remains whether sub-clause (i) and (ii) of cl. 3(b) are valid and it is necessary that we should examine this question in the context of our constitutional values, since there are a large number of detenus under the COFEPOSA Act and the conditions of their detention in regard to interviews must be finally settled by this Court. ", "Now it is necessary to bear in mind the distinction between 'preventive detention' and punitive detention', when we are considering the question of validity of conditions of detention. There is a vital distinction between these two kinds of detention. 'Punitive detention' is intended to inflict punishment on a person, who is found by the judicial process to have committed an offence, while 'preventive detention' is not by way of punishment at all, but it is intended to pre-empt a person from indulging in conduct injurious to the society. The power of preventive detention has been recognised as a necessary evil and is tolerated in a free society in the larger interest of security of the and maintenance of public order. It is a drastic power to detain a person without trial and there are many countries where it is not allowed to be exercised except in times of war or aggression. Our Constitution does recognise the existence of this power, but it is hedged-in by various safeguards set out in Articles 21 and 22. Art. 22 in clauses (4) to (7), deals specifically with safeguards against preventive detention and any law of preventive detention or action by way of preventive detention taken under such law must be in conformity with the restrictions laid down by those clauses on pain of invalidation. But apart from Art. 22 , there is also Art. 21 which lays down restrictions on the power of preventive detention. Until the decision of this in v. , a very narrow and constricted meaning was given to the guarantee embodied in Art. 21 and that article was understood to embody only that aspect of the rule of law, which requires that no one shall be deprived of his life or personal liberty without the authority of law. It was construed only as a guarantee against executive action unsupported by law. So long as there was some law, which prescribed a procedure authorising deprivation of life or personal liberty, it was supposed to meet the requirement of Art. 21. But in case (supra), this for the first time opened-up a new dimension of Art. 21 and laid down that Art. 21 is not only a guarantee against executive action unsupported by law, but is also a restriction on law making. It is not enough to secure compliance with the prescription of Article 21 that there should be a law prescribing some semblance of a procedure for depriving a person of his life or personal liberty, but the procedure prescribed by the law must be reasonable, fair and just and if it is not so, the law would be void as violating the guarantee of Art. 21. This expanded the scope and ambit of the right to life and personal liberty enshrined in Art. 21 and sowed the seed for future development of the law enlarging this most fundamental of Fundamental Rights. This decision in case became the starting point-the-spring-board-for a most spectacular evolution the law culminating in the decisions in v. ", "524 ", "State of Maharashtra,, case, the first case and the second case. The position now is that Art. 21 as interpreted in case (supra) requires that no one shall be deprived of his life or personal liberty except by procedure established by law and this procedure must be reasonable, fair and just and not arbitrary, whimsical or fanciful and it is for the to decide in the exercise of its constitutional power of judicial review whether the deprivation of life or personal liberty in a given case is by procedure, which is reasonable, fair and just or it is otherwise. The law of preventive detention has therefore now to pass the test not only of Art. 22 , but also of Art. 21 and if the constitutional validity of any such law is challenged, the would have to decide whether the procedure laid down by such law for depriving a person of his personal liberty is reasonable, fair and just. But despite these safeguards laid down by the Constitution and creatively evolved by the s, the power of preventive detention is a frightful and awesome power with drastic consequences affecting personal liberty, which is the most cherished and prized possession of man in a civilised society. It is a power to be exercised with the greatest care and caution and the courts have to be ever vigilant to see that this power is not abused or misused. It must always be remembered that preventive detention is qualitatively different from punitive detention and their purposes are different. In case of punitive detention, the person concerned is detained by way of punishment after he is found guilty of wrong doing as a result of trial where he has the fullest opportunity to defend himself, while in case of preventive detention, he is detained merely on suspicion with a view to preventing him from doing harm in future and the opportunity that he has for contesting the action of the Executive is very limited. Having regard to this distinctive character of preventive detention, which aims not at punishing an individual for a wrong done by him, but at curtailing his liberty with a view to pre-empting his injurious activities in future, it has been laid down by this in \"that the restrictions placed on a person preventively detained must, consistently with the effectiveness of detention, be minimal.\" ", "The question which then arises is whether a person preventively detained in a prison has any rights which he can enforce in . Once his freedom is curtailed by incarceration in a jail, does he have any fundamental rights at all or does he leave them behind, when he enters the prison gate ? The answer to this question is no longer res integra. It has been held by this Court in the two cases that \"fundamental rights do not flee the person as he enters the prison although they may suffer shrinkage necessitated by incarceration.\" The prisoner or detenu has all the fundamental rights and other legal rights available to a free person, save those which are incapable of enjoyment by reason of incarceration. Even before the two cases, this position was impliedly accepted in and it was spelt-out clearly and in no uncertain terms by , J. as he then was, in : ", "\"Convicts are not, by mere reason of the conviction, denuded of all the fundamental rights which they otherwise possess. A compulsion under the authority of law, following upon a conviction, to live in a prison-house entails to by its own force the deprivation of fundamental freedoms like the right to move freely throughout the territory of India or the right to \"practise\" a profession. A man of profession would thus stand stripped of his right to hold consultations while serving out his sentence. But the Constitution guarantees other freedoms like the right to acquire, hold and dispose of property for the exercise of which incarceration can be no impediment. Likewise, even a convict is entitled to the precious right guaranteed by Art. 21 of the Constitution that he shall not be deprived of his life or personal liberty except according to procedure established by law.\" ", "This statement of the law was affirmed by a Bench of five Judges of this in the first case (supra) and by , J. speaking on behalf of the in the second case (supra). , J. in the latter case proceeded to add in his characteristic style; \"The jurisdictional reach and range of this 's writ to hold prison caprice and cruelty in constitutional leash is incontestable\" and concluded by observing; \"Thus it is now clear law that a prisoner wears the armour of basic freedom even behind bars and that on breach thereof by lawless officials the law will respond to his distress signals through 'writ' aid. The Indian human has a constant companion-the armed with the Constitution.\" ", " ", "It is interesting to note that of the United States has also taken the same view in regard to rights of prisoners. Mr. Justice struck a humanistic note when he said in case : ", "\"Prisoners are still persons entitled to all constitutional rights unless their liberty has been constitutionally curtailed by procedures that satisfy all the requirements of due process.\" ", "So also in case, Mr. Justice made the same point in emphatic terms. ", "\"But, though his rights may be diminished by environment, a prisoner is not wholly stripped off constitutional protections, when he is imprisoned for crime. There is no iron curtain drawn between the Constitution and the prisons of this country.\" ", "Mr. Justice reiterated his thesis when he asserted: ", "\"Every prisoner's liberty i.e. of courses, circumscribed by the very fact of his confinement, but his interest in the limited liberty left to him is then only the more substantial. Conviction of a crime does not render one a non-person whose rights are subject to the whim of the prison administration, and therefore, the imposition of any serious punishment within the system requires procedural safeguards.\" ", "Mr. Justice also expressed himself clearly and explicitly in the same terms: ", "\"I have previously stated my view that a prisoner does not shed his basic constitutional rights at the prison gate, and I fully support the court's holding that the interest of inmates in freedom from imposition of serious discipline is a 'liberty' entitled to due process protection.\" ", "What is stated by these learned Judges in regard to the rights of a prisoner under the Constitution of the United States applies equally in regard to the rights of a prisoner or detenu under our constitutional system. It must, therefore, now be taken to be well-settled that a prisoner or detenu is not stripped of his fundamental or other legal rights, save those which are inconsistent with his incarceration, and if any of these rights are violated, the which is to use the words of , J., \"not a distant abstraction omnipotent in the books but an activist institution which is the cynosure of public hope,\" will immediately spring into action and run to his rescue. ", "We must therefore proceed to consider whether any of the Fundamental Rights of the detenu are violated by sub- clauses (i) and (ii) of clause 3(b) so as to result in their invalidation wholly or in part. We will first take up for consideration the Fundamental Right of the detenu under Article 21 because that is a Fundamental Right which has, after the decision in case (supra), a highly activist magnitude and it embodies a constitutional value of supreme importance in a democratic society. It provides that no one shall be deprived of his life or personal liberty except according to procedure established by law and such procedure shall be reasonable fair, and just. Now what is the true scope and ambit of the right to life guaranteed under this Article ? While arriving at the proper meaning and content of the right to life, we must remember that it is a constitutional provision which we are expounding and moreover it is a provision enacting a Fundamental right and the attempt of the court should always be to expand the reach and ambit of the Fundamental right rather than to attenuate its meaning and content. The luminous guideline in the interpretation of a constitutional provision is provided by in v. . ", "\"Legislation, both statutory and constitutional is enacted, it is true, from an experience of evils, but- its general language should not, therefore, be necessarily confined to the form that evil had, therefore taken. Time works changes, brings into existence new conditions and purposes. Therefore, a principle, to be vital, must be capable of wider application than mischief which gave it birth. This is peculiarly true of constitutions. They are not ephemeral enactments designed to meet passing occasions. They are, to use the words of Chief Justice , \"designed to approach immorality as nearly as human institutions can approach it\" The future is their care, and provisions for events of good and bad tendencies of which no prophecy can be made. In the application of a constitution, therefore, our contemplation cannot be only of what has been, but of what may be. Under any other rule a constitution would indeed be as easy of application as it would be deficient in efficacy and power. Its general principles would have little value, and be converted by precedent into important and lifeless formulas. Rights declared in the words might be lost in reality. And this has been recognised. The meaning and vitality of the Constitution have developed against narrow and restrictive construction.\" ", "This principle of interpretation which requires that a Constitutional provision must be construed, not in a narrow and constricted sense but in a wide and liberal manner so as to anticipate and take account of changing conditions and purposes so that the Constitutional provision does not get atrophied or fossilized but remains flexible enough to meet the newly emerging problems and challenges, applies with greater force in relation to a fundamental right enacted by the Constitution. The fundamental right to life which is the most precious human right and which forms the ark of all other rights must therefore be interpreted in a broad and expansive spirit so as to invest it with significance and vitality which may endure for years to come and enhance the dignity of the individual and the worth of the human person. ", "Now obviously, the right to life enshrined in Article 21 can not be restricted to mere animal existence. It means something much more than just physical survival. In v. State of Uttar Pradesh quoted with approval the following passage from the judgment of in v. Illinois to emphasize the quality of life covered by Article 21: ", "\"By the term \"life\" as here used something more is meant than mere animal existence. The inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed. The provision equally prohibits the mutilation of the body or amputation of an arm or leg or the putting out of an eye or the destruction of any other organ of the body through which the soul communicates with the outer world.\" ", "and this passage was again accepted as laying down the correct law by the Constitution Bench of this Court in the first case (supra). Every limb or faculty through which life is enjoyed is thus protected by Article 21 and a fortiorari, this would include the faculties of thinking and feeling. Now deprivation which is inhibited by Article 21 may be total or partial, neither any limb or faculty can be totally destroyed nor can it be partially damaged. Moreover it is every kind of deprivation that is hit by Article 21 , whether such deprivation be permanent or temporary and, furthermore, depriva- ", "529 ", "tion is not an act which is complete once and for all: it is a continuing act and so long as it lasts, it must be in accordance with procedure established by law. It is therefore clear that any act which damages or injures or interferes with the use of, any limb or faculty of a person, either permanently or even temporarily, would be within the inhibition of Article 21. ", "But the question which arises is whether the right to life is limited only to protection of limb or faculty or does it go further and embrace something more. We think that the right to life includes the right to live with human dignity and all that goes along with it, namely, the bare necessaries of life such as adequate nutrition, clothing and shelter and facilities for reading, writing and expressing one-self in diverse forms, freely moving about and mixing and commingling with fellow human beings. Of course, the magnitude and content of the components of this right would depend upon the extent of the economic development of the country, but it must, in any view of the matter, include the right to the basic necessities of life and also the right to carry on such functions and activities as constitute the bare minimum expression of the human-self. Every act which offends against or impairs human dignity would constitute deprivation protanto of this right to live and it would have to be in accordance with reasonable, fair and just procedure established by law which stands the test of other fundamental rights. Now obviously, any form of torture or cruel, inhuman or degrading treatment would be offensive to human dignity and constitute an inroad into this right to live and it would, on this view, be prohibited by Article 21 unless it is in accordance with procedure prescribed by law, but no law which authorises and no procedure which leads to such torture or cruel, inhuman or degrading treatment can ever stand the test of reasonableness and non-arbitrariness: it would plainly be unconstitutional and void as being violative of Articles 14 and 21. It would thus be seen that there is implicit in Article 21 the right to protection against torture or cruel, inhuman or degrading treatment which is enunciated in Article 5 of the Universal Declaration of Human Rights and guaranteed by Article 7 of the International Covenant on Civil and Political Rights. This right to live which is comprehended within the broad connotation of the right to life can concededly be abridged according to procedure established by law and therefore when a person is lawfully imprisoned, this right to live is bound to suffer attenuation to the extent to which it is incapable of enjoyment by reason of incarceration. The prisoner or detenu obviously cannot move about freely by going outside the prison walls nor can he socialise at his free will with persons outside the jail. But, as part of the right to live with human dignity and therefore as a necessary component of the right to life, he would be entitled to have interviews with the members of his family and friends and no prison regulation or procedure laid down by prison regulation regulating the right to have interviews with the members of the family and friends can be upheld as constitutionally valid under Articles 14 and 21, unless it is reasonable, fair and just. ", "The same consequence would follow even if this problem is considered from the point of view of the right to personal liberty enshrined in Article 21 , for the right to have interviews with members of the family and friends is clearly part of personal liberty guaranteed under that Article. The expression 'personal liberty' occurring in Article 21 has been given a broad and liberal interpretation in case (supra) and it has been held in that case that the expression 'personal liberty used in that Article is of the widest amplitude and it covers a variety of rights which go to constitute the personal liberty of a man and it also includes rights which \"have been raised to the status of distinct Fundamental Rights and given additional protection under Article 19\". There can therefore be no doubt that 'personal liberty would include the right to socialise with members of the family and friends subject, of course, to any valid prison regulations and under Articles 14 and 21, such prison regulations must be reasonable and non-arbitrary. If any prison regulation or procedure laid down by it regulating the right to have interviews with members of the family and friends is arbitrary or unreasonable, it would be liable to be struck down as invalid as being violative of Articles 14 and 21. ", "Now obviously when an under-trial prisoner is granted the facility of interviews with relatives and friends twice in a week under Rule 559A and a convicted prisoner is permitted to have interviews with his relatives and friends once in a week under Rule 550, it is difficult to understand how sub-clause (ii) of Clause 3(b) of the Conditions of Detention Order, which restricts the interview only to one in a month in case of a detenu, can possibly be regarded as reasonable and non-arbitrary, particularly when a detenu stands on a higher pedestal than an under-trial prisoner or a convict and, as held by this in case (supra) restrictions placed on a detenu must \"consistent with the effectiveness of detention, be minimal.\" We would therefore unhesitatingly hold sub-clause ", "(ii) of clause 3(b) to be violative of Articles 14 and 21 in so far as it permits only one interview in a month to a detenu. We are of the view that a detenu must be permitted to have atleast two interviews in a week with relatives and friends and it should be possible for a relative or friend to have interview with the detenu at any reasonable hour on obtaining permission from the Superintendent of the Jail and it should not be necessary to seek the permission of the District Magistrate, Delhi, as the latter procedure would be cumbrous and unnecessary from the point of view of security and hence unreasonable. We would go so far as to say that even independently of Rules 550 and 559A, we would regard the present norm of two interviews in a week for prisoners as furnishing a criterion of what we would consider reasonable and non-arbitrary. ", "The same reasoning must also result in invalidation of sub-clause (i) of clause 3(b) of the Conditions of Detention Order which prescribes that a detenu can have interview with a legal adviser only after obtaining prior permission of the District Magistrate, Delhi and the interview has to take place in the presence of an officer of to be nominated by the local Collector of or Deputy Director of Enforcement who has sponsored the case for detention. The right of a detenu to consult a legal adviser of his choice for any purpose not necessarily limited to defence in a criminal proceeding but also for securing release from preventive detention of filing a writ petition or prosecuting any claim or proceeding, civil or criminal, is obviously included in the right to live with human dignity and is also part of personal liberty and the detenu cannot be deprived of this right nor can this right of the detenu be interfered with except in accordance with reasonable, fair and just procedure established by a valid law. A prison regulation may, therefore, regulate the right of a detenu to have interview with a legal adviser in a manner which is reasonable, fair and just but it cannot prescribe an arbitrary or unreasonable procedure for regulating such an interview and if it does so, it would be violative of Articles 14 and 21. Now in the present case the legal adviser can have interview with a detenu only by prior appointment after obtaining permission of the District Magistrate, Delhi. This would obviously cause great hardship and inconvenience because the legal adviser would have to apply to the District Magistrate, Delhi well in advance and then also the time fixed by the District Magistrate, Delhi may not be suitable to the legal adviser who would ordinarily be a busy practitioner and, in that event, from a practical point of view the right to consult a legal adviser would be rendered illusory. Moreover, the interview must take place in the presence of an officer of to be nominated by the local Collector of or Deputy Director of Enforcement who has sponsored the detention and this too would seem to be an unreasonable procedural requirement because in order to secure the presence of such officer at the interview, the District Magistrate, Delhi would have to fix the time for the interview in consultation with the Collector of or the Deputy Director of Enforcement and it may become difficult to synchronise the time which suits the legal adviser with the time convenient to the concerned officer and furthermore if the nominated officer does not, for any reason, attend at the appointed time, as seems to have happened on quite a few occasions in the case of the petitioner, the interview cannot be held at all and the legal adviser would have to go back without meeting the detenu and the entire procedure for applying for an appointment to the District Magistrate, Delhi would have to be gone through once again. We may point out that no satisfactory explanation has been given on behalf of the respondents disclosing the rationale of this requirement. ", "We are therefore of view that sub-clause (i) of clause 3(b) regulating the right of a detenu to have interview with a legal adviser of his choice is violative of Arts. 14 and 21 and must be held to be unconstitutional and void. We think that it would be quite reasonable if a detenu were to be entitled to have interview with his legal adviser at any reasonable hour during the day after taking appointment from the Superintendent of the , which appointment should be given by the Superintendent without any avoidable delay. We may add that the interview need not necessarily take place in the presence of a nominated officer of but if the presence of such officer can be conveniently secured at the time of the interview without involving any postponement of the interview, then such officer and if his presence cannot be so secured, then any other official may, if thought necessary, watch the interview but not as to be within hearing distance of the detenu and the legal adviser. ", "We accordingly allow the writ petition and grant relief to the extent indicated above. ", "V.D.K. Petition allowed."], "relevant_candidates": ["0000162242", "0000353351", "0000778810", "0000850821", "0000879068", "0001007347", "0001573666", "0001766147", "0133550130"]} {"id": "0000081055", "text": ["PETITIONER: . Vs. RESPONDENT: THE COMMISSIONER OF INCOME TAX, GUJARAT-IIAHMEDABAD (AND VIC DATE OF JUDGMENT11/04/1978 BENCH: , V.D. BENCH: , V.D. CHANDRACHUD, Y.V. ((CJ) CITATION: 1978 AIR 1099 1978 SCR (3) 660 1978 SCC (2) 644 CITATOR INFO : R 1985 SC1585 (18,19,22) E&R 1986 SC1727 (7) ACT: Income Tax Act , 1961 Sections 32(2) , 33(2) , 41(2) , 72 and 80E(1) -Computation of the mode in which and the fund from which deduction of 8% under Section 80E(1) is to be made, explained. HEADNOTE: The assessee company carries on the business of generation and distribution of electricity at and as such is covered by the provisions of Section 80E(1) and is entitled to claim the deduction contemplated by the said provision. During the accounting period which ended on March. 31, 1967 i.e. assessment year 1967-68, the assessee Company earned an income of Rs. 46,319/- from its business. The assessee company had sold some of its old machinery and buildings resulting in balancing charges contemplated by section 41(2) which worked out to Rs. 7,55,807/-. There were unabsorbed depreciation of Rs. 1,42,955/- and unabsorbed development rebate of Rs. 1,11,658/aggregating to Rs. 2,54,613/- of the earlier years which were required to be set off against the profits of that period. The Income Tax Officer, while com- pleting the assessment treated the item of Rs. 7,55,807/- as profits attributable to the business of generation and distribution of electricity and allowed deduction at 8% thereon under Section 80E(1) . The Income Tax Officer, thus computed the relief/deduction admissible to the assessee under section 80E(1) at 8% on the amount of Rs. 8,02,126/- (46,319+7,55,807), that is to say, on the income without adjusting or setting off the unabsorbed depreciation and development rebate carried forward from the earlier year. In exercise of his revisional powers under section 263 of the Act, the Additional Commissioner of Income Tax called for examined the records and took the view that the manner of computing the deduction admissible to the assessee under Section 80E(1) was erroneous and prejudicial to the interests of the , in that the deduction of 8% on the item of profit of Rs. 7,55,807 arising under Section 41(2) had been wrongly allowed and that for the purpose of calculating the deduction of 8%, the items in respect of the unabsorbed depreciation and development rebate should not have been excluded and that, if proper calculations as suggested by him were made, the assessee was not entitled to any deduction. In the appeal, the took the view that the item of Rs. 7,55,807 being profits arising from the sale of old machinery and buildings under S. 41(2) of the Act, could not be treated in isolation or divorced from the profits and gains of the business of generation and distribution of electricity done by the assessee-company and that the said item will have to be regarded as profits ,.attributable to\", though not \"derived from\" the business of generation and distribution of electricity and, as such, the said item was exigible to the deduction of 8% under Section 80E(1) of the Act. On the question whether the unabsorbed depreciation and development rebate would be deductible in computing the profits under Section 80E of the Act, following 93 ITR, 115, the held that these items could not be deducted in computing the deduction admissible under Section 80E . The allowed the appeal and set aside the orders of the Additional Commissioner. By its judgment, dated 11th and 24th of December 1975 disposing of the Reference, upheld the view of the regarding the item of Rs. 7,55,807/- and answered in favour of the assessee. As to the items of unabsorbed depreciation and development rebate, held that they were deductible before arriving at the figure that would be exigible to the deduction of 8% under Section 80E(1) and, therefore, after deducting the aggregate amount of Rs. 2,54,613 from Rs. 8,02.126, the balance of Rs. 547,513 was exigible to the deduction of 8% under the said provision. 661 Both the assessee and the preferred separate appeals against the said judgment. Dismissing both the appeals, the Court HELD : 1. (a) On true construction of the provision itself, both the and were right in taking the view that the item of Rs. 7,55,807 was required to be taken into account while computing the deduction of 8% contemplated by S. 80E(1) of the Act. [668 A] (b) Three important steps are required to be taken before the special deduction permissible under section 80E(1) of Income Tax Act, is allowed and the net total income exigible to tax is determined. First, compute the total income of the concerned assessee in accordance with the other provisions of the Act i.e., in accordance with all the provisions except Sec. 80E; secondly, ascertain what part of the total income so computed represents the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity); and thirdly, if there be profits and gains so attributable, deduct 8% thereof from such profits and gains and then arrive at the net total income exigible to tax. As regards the first step mentioned above, the important words in sub- s. 1 are those that appear in parenthesis, namely, \"as computed in accordance with the other provisions of this Act\", and these words clearly contain a mandate that the total income of the concerned assessee must be computed in accordance with the other provisions of the Act without reference to S. 80E and since in the instant case it is income from business the same as per s. 29 will have to be computed in accordance with Ss. 30 to 43A which would include s. 41 (2). It is also clear that under the second step the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity) forms a component of the total income spoken of in the first step. Reading these two steps together, therefore, it is obvious that in computing the total income of the concerned assessee the balancing charge arising as a result of the sale of old machinery and buildings and worked out as per s. 41(2) , irrespective of its real character, will have to be taken into account and included as income of the business. In other words, the balancing charge as worked out under s. 41(2) will have to be taken into account before computing the deduction of 8% under the third step. On proper construction of sub-s. (1) and having regard to the legislative mandate contained in the three steps that are required to be taken in the manner indicated above, it is clear that the item of Rs. 7,55,807/- will have to be taken into account before computing the 8% deduction contemplated by the said provision. [667 G-H, 668 ., (1961) 41 ITR 290 and ., (1964) 53 I.T.R. 250; discussed. (c) It is true that by legal fiction created under S. 41(2) a balancing charge arising from sale of old machinery or building is treated as deemed income and the same is brought to tax; in other words the legal fiction enables the to take back what it had given by way of depreciation allowance in the preceding years since what was given in the preceding years was in excess of that which ought to have been given. This shows that the fiction has been created for the purpose of computation of the assessable income of the assessee under the head 'business Income'. [669A-B] (d) Legal fictions are created only for a definite purpose and they should be limited to the purpose for which they are created and should not be extended beyond their legitimate field. The fiction under s. 41(2) is created' for the purpose of computation of assessable income of the assessee under the head \"business income\" and under s. 80E(1) , in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assessable income chargeable to tax is to be determined, in other words, the legal fiction under S. 41(2) and the grant of special deduction in case of specified industries are so closely connected with each other that 662 taking into account the balancing charge (i.e. deemed profits) before computing 8% deduction under S. 80E(1) would amount to extending the legal fiction within the limits of the purpose for which the said fiction had been created. [669 B-E] (e) Whenever the wanted to give a restricted meaning it has used the expression \"derived from\", as for instance in S. 80J . Since the expression of wider import, namely, \"attributable to\" has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. [669 G-H] 2. (a) The High Court was right in deducting unabsorbed depreciation and development rebate aggregating to Rs. 2,54,613 from Rs. 8,02,126 and holding the balance of Rs. 5,47,513/- being exigible to the 8% deduction. [670 E] (b) Having regard to the construction placed on sub-s. (1) of Section 80E as above it is obvious that, in computing the total income of the concerned assessee items of unabsorbed depreciation and unabsorbed development rebate will have to be deducted before arriving at the figure that will become exigible to the deduction of 8% contemplated by s. 80E(1) [670D-E] (c) In sub-s. (1) of S. 80E the expression \"total income\" is followed by the words \"as computed in accordance with the other provisions of this Act\" in parenthesis and the mandate of these words clearly negatives the argument that the expression \"total income\" has been used in the sense of commercial profits. The expression \"total income\" has been defined in s. 2(45) of the Act as meaning \"the total amount of income referred to in Section 5 , computed in the manner laid down in this Act\" and when this definition has been furnished by the Act itself the expression as appearing in S. 80E(1) must be in the absence of anything in the context suggesting to the contrary be construed in accordance with such definition. Since the words in the parenthesis occurring in sub-s. (1) lay down the manner in which the total income of the concerned assessee is to be computed there would be no scope for excluding items like unabsorbed depreciation and unabsorbed development rebate while computing the total income on the basis that the total income spoken of by sub-s. (1) means commercial profits. [670 G-H, 671 A-B] 3. S. 72(1) has a direct impact upon the computation under the head 'profits and gains' of business or profession. In other words, the correct figure of total income, which is otherwise as taxable under other provisions of the Act, cannot be arrived at without working out the net result of computation under the head 'profits and gains' of business or profession. The question whether special benefit under s. 80E as well as the normal or usual benefit of carry forward of losses of previous years should both be available to an assessee without one impinging on the other must depend upon the intention of the and such intention has to be gathered from the language employed. In this view of the matter it is extremely doubtful, whether in spite of the legislative mandate contained in the three steps provided by sub-s. (1) of s. 80E , carried forward losses would not be deductible before working out the 8% deduction contemplated by s. 80E and, therefore, the contention that by parity of reasoning or on a priori reasoning unabsorbed development rebate and unabsorbed depreciation should be held to be lion-deductible before working out the 8% deduction under s. 80E(1) cannot be accepted. On proper construction of the provisions contained in sub-s. (1) of a. 80E item like unabsorbed depreciation and absorbed development rebate will have to be deducted in arriving at the figure which would be exigible to deduction of 8% under 80E(1). [673C-F] Indian Transformers Ltd. v. Commissioner of Income Tax, Ernakulam, '1972) 86 I.T.R. 192. ., (1977) 107 I.T.R. 386, Commissioner of income . 2); (1977) 110 I.T.R. 346, discussed and criticised. ., 93 I.T.R. 115 held inapplicable. 663 JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 785 and 783 of 1977. ", "Appeals by Special Leave from the Judgment and Order dated 11/24-12-1975 of in Income Tax Reference No. 115 of 1974. ", ", and , for the Appellant. ", ", and for the Respondent. ", "The Judgment of the Court was delivered by TULZAPURKAR, J.-These two appeals by special leave, one by the Commissioner of Income Tax, Gujarat and the other by the assessee, against the judgment of Gujarat in Income Tax Reference No. 115 of 1974 raise two interesting questions regarding the mode in which and the fund from which deduction of 8 % contemplated by section 80E(1) of the Income Tax Act, 1961 (as it stood at the relevant time) should be computed. ", "The short facts giving rise to the questions may be stated : The assessee-,carries on the Business of generation and distribution of electricity at Cambay and, as such, is covered by the provisions of S. 80E(1) and is entitled to claim the deduction contemplated by the said provision. The assessment in question relates to the assessment year 1967- 68, the accounting year for which is the financial year ending- March 31, 1967. During the accounting period which ended on March 31, 1967, the assessee company earned an income of Rs. 46,319/- from its said business. It appears that during this period it had sold some of its old machinery and buildings resulting in balancing, charges contemplated by s. 41(2) which the Income Tax Officer worked out at Rs. 7,55,807/-. It further appears that there was unabsorbed depreciation of Rs. 1,42,955/- and unabsorbed development rebate of Rs. 1,11,658/- aggregating to Rs. 2,54,613/- of the earlier years which were required to be set off against the profits of that period. The Income Tax Officer while completing the assessment, determined the deduction admissible to the assessee under s. 80E(1) of the Act in the following manner : ", "Income from business a computed Rs. 46,319 in the assessment order Add : Profit u/s. 41 (2) in respect of sale of machinery and buildings Rs. 7.55,807 Total Rs. 8. 02,126 Less 8 %deduction u/s 80E (1) on Rs. 8.02,126 Rs. 64.170 Less Unabsorbed depreciation Rs. 7 .37,956 and development rebate : Depreciation : Rs. 1 .42,955 ", "Development Rebate: Rs. 1 . 11, 658 Rs. 2,54,613 ", "- - ", "Net Income chargeable to tax: Rs. 4,83,343 It will appear clear from the above computation that the Income Tax Officer treated the item of Rs. 7,55,807/- as profits attributable to the business of generation and distribution of electricity and allowed deduction at 8% thereon under s. 80E(1) . It would also be clear that the Income Tax Officer computed the relief /deduction admissible to the assessee under s. 80E(1) at 8% on the amount of Rs. 8,02,126, that is to say, on the income before adjusting or setting off the unabsorbed depreciation and development rebate carried forward from the earlier year. When the aforesaid assessment order came to his knowledge, the Additional Commissioner of Income Tax called for and examined the record and proceedings in exercise of his powers under s. 263 of the Act and after giving an opportunity to the assessee-company to show cause, took the view that the manner of computing the deduction admissible to the assessee under s. 80E(1) was erroneous and prejudi- cial to the interests of the , in that the deduction of 8 % on the item of profit of Rs. 7,55,807 arising under s. 41 (2) had been wrongly allowed and that for the purpose of calculating the deduction of 8% the items in respect of the unabsorbed depreciation and development rebate should not have been excluded, and that if proper calculations as suggested by him were made, the assessee was not entitled to any deduction. He, therefore, set aside the order of the Income Tax Officer and directed that fresh assessment be made in accordance with law. Feeling aggrieved by the order passed by the Additional Commissioner of Income-Tax the assessee preferred an appeal to . In the appeal as regards the item of Rs. 7,55,807 being profits arising from the sale of old machinery and buildings under s. 41 (2) of the Act, the took the view that the said item of profits could not be treated in isolation or divorced from the profits and gains of the business of generation and distribution of electricity done by the assessee-company and that the said item will have to be regarded as profits \"attributable to\", though not \"derived from\" the business of generation and distribution of electricity and, as such, the said item was exigible to the deduction of 8% under s. 80E(1) of the Act. On the question whether the unabsorbed depreciation and development rebate would be deductible in computing the profits under S. 80E of the, Act, the following the decision of in the case of .(1) held that these two items could not be deducted in- computing the deduction admissible under S. 80E of the Act. The accordingly allowed the appeal, set aside the order of the Additional Commissioner and restored that of the income Tax Officer. ", "At the instance of the Commissioner of Income Tax, the referred the following two questions to for its opinion : ", "\" (1) Whether the was correct in holding that the Profits under section 41(2) of the Income Tax Act 1961 arising from the, sale of machinery and building, amounting to Rs. 7,55,807/- should be taken into account while computing the deduction of 8 per cent under section 80F(1) of the Act ? ", "(3) (1964) 53 I.T.R.250. ", "665 ", "(2)Whether unabsorbed depreciation and development rebate amounting to Rs. 2,54,613 is not deductible in computing profits under section 80E(1) of the Act ?\" ", " by its judgment dated 11th and 24th December, 1975 disposed of the-Reference by answering the first question in favour of the assessee and the second question in favour. of the . In other words upheld the view of the on the first question while on the second question it took the view that the unabsorbed depreciation and development rebate were deductible before arriving at the figure that would be exigible to the deduction of 8% under, s. 80E(1) and therefore. after deducting the aggregate amount of Rs. 2,54,613 from Rs. 8,02,126 the balance of Rs. 5,47,513 was exigible to the deduction of 8% under the said provision. Civil Appeal No. 783(NT) of 1977 has been preferred by the in so far as the answer to the first question has gone against it while Civil Appeal No. 785(NT) of 1977 has been preferred by the assessee inasmuch as the second question has been answered in favour of the . ", "As regards the question raised in C.A. No. 783(NT) of 1977, the learned Solicitor General appearing for the has contended that the item of Rs. 7,55,807/_ represents the balancing charges arising out of the sale of old machinery and buildings worked out under s. 41 (2) of the Act and the same cannot be treated as any. profits or gains \"attributable to\" the business of generation and distri- bution of electricity carried on by the assessee and as such the said item should not be taken into account while' computing the deduction of 8% under s. 80E(1) of the Act. He emphasized that under that, section a deduction of 8% is permissible from \"such profits and gains\" meaning \"profits and gains attributable 'to the business of generation and distribution of electricity\" carried on by an assessee. He contended that a balancing charge contemplated under s. 41 (2) is really in the nature of a return of capital and not a return of revenue and it is only by reason of the fiction created by s. 41(2) that the same is deemed to be a revenue receipt and has been made chargeable to income tax as income of the business but it is well settled that a legal fiction is to be limited to the purpose for which it is created and should not be extended beyond its legitimate field. He urged that the very fact that a deeming provision has' been made under S. 41(2) shows that it is not a revenue receipt but a capital receipt in the hands of an assessee. In support of his contention he placed reliance upon a decision of this Court in .-,(1) where the real nature of the balancing charge arising under the corresponding provision of the 1922 Act has been explained by this Court as being a capital return or a capital receipt. He. therefore, contended that item of Rs. 7,55.807/- which is not really any profit or gain earned in the conduct of the business of generation and distribution of electricity cannot be. taken into account while computing the deduction of 8% \"under s. 80E(1) of the Act. in (1) (1961) 41 I.T.R. 290. ", "8315SCI/78 On the other hand, Mr. , appearing, for the, assessee, contended that both the as well as were right in coming to the conclusion that the said item of Rs. 7,55,807/- was, on proper construction of s. 80E(1), required to be taken into account before computing the permissible deduction of 8% contemplated by that provision. He pointed out that s. 80E in the first place requires the computation of the total income of the assessee carrying on specified industry \"in accordance with the other provisions of this Act\"; secondly, such total income so computed should include \"profits and gains attributable to the business of' the specified industry (here generation and distribution of electricity); and thirdly, it is from such profits attributable-to the business of the specified industry that the deduction of 8% should be made. He laid considerable emphasis on the aspect that the has used the expression \"attributable to the business of' instead of \"derived from the-business of\" and according to him the former being an expression of 'Wider import would include an item like the balancing charge which may not be directly derived from the conduct of the business of the specified industry (here generation and distribution of electricity). He also urged that in its subsequent decision in the case of .,(1) this Court has explained that the balancing charge contemplated under s. 41(2) . in substance partakes the character of \"escaped profits\" of the business carried on by an assessee and as such the item of Rs. 7,55,807/- could be treated as profits attributable to the business of generation and distribution of electricity by the assessee. He also contended that even if the matter were to be looked at from the angle of the legal fiction created by s. 41 (2) of the Act, the said fiction could be extended so as to take into account the said item of Rs. 7,55,807/- before computing the 8% deduction for such extension of the fiction would be within and for the purpose for which the same has been created. In our view the answer to the question raised before us really turns upon the proper construction of the provision contained in s. 80E(1) of the Act rather than on what is the real nature or character of a balancing charge arising under s. 41(2) of the Act and it would, therefore, be proper to set out the provisions of s. 80E as it stood at the relevant time : ", "\"80E. Deduction in respect of profits and gains from specified industries in the case of certain companies.-(1) In the case of a company to which this section applies, where the total income (as computed in accordance with the other provisions of this Act) includes any profits and gains attributable to the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule, there 'shall be allowed a deduction from such profits and gains of an amount equal to eight per cent, thereof, in computing the total income of the company. ", "(1) (1964) 53 I.T.R. 250. ", "667 ", "(2) This section applies to- ", "(a) an Indian company; or ", "(b) any other company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India. ", "but does not apply to any Indian company referred to in clause (a), or to any other company referred to in clause (b), if such Indian or other company is a company referred to in section 108 and its total income as computed before applying the provisions of sub-section (1) does not exceed twenty-five thousand rupees.\" ", "It was not disputed before us that the aforesaid provision contained in s. 80E(1) has been enacted for the purpose of providing for certain, special deduction to be made in computing the, total income in the case of specified industries, over and above the other general deductions contemplated by the Act. It was further not disputed before. us that the assessee being an Indian company engaged in the business of generation and distribution of electricity is a company to which the section applies and is entitled to claim the deduction of 8% contemplated by that provision and the only question is how and in what manner the said deduction should be computed. On reading sub-s. (1) it will become clear that three important steps are required to be taken before the 'special deduction permissible thereunder is allowed and the net total income exigible to tax is determined. First, compute the total income of the concerned assessee in accordance with the other provisions of the Act i.e. in accordance with all the provisions except s. 80E ; secondly, ascertain what part of the total income so computed represents the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity); and thirdly, if there be profits and gains so attributable, deduct 8% thereof from such profits and gains and then arrive at the net total income exigible to tax. As regards the first step mentioned above, the important words in sub- s. (1) are those that appear in parenthesis, namely, \"as computed in accordance with the other provisions of this Act\" and these words clearly contain a mandate that the total income of the concerned assessee must be computed in accordance with the other provisions of the Act without reference to s. 80E and since in the instant case it is income from business the same as per s. 29 will have to be computed in accordance with ss. 30 to 43A which would include S. 41(2) . It is also clear that under the second step the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity) forms a component of the total income spoken of in the first step. Reading these two steps together, therefore, it is obvious that in computing the total income of 'the concerned assessee the balancing charge arising as a result of the sale of old machinery and buildings and worked out as per S. 41 (2), irrespective of its real character, will have to be taken into account and included as income of the business. In other words, the balancing charge as worked out under S. 41 (2) will have to be taken into account before computing the deduction of 8% under the third step. On proper construction of sub-s. (1) and having regard to the legislative mandate contained-in the three steps that are required to be taken in the manner indicated above we are clearly of the view that the item of Rs. 7,55,807/- will have to be taken into account before computing the 8% deduction contemplated by the said provision. The learned Solicitor General has argued to the contrary by laying considerable emphasis on two aspects, first, the real nature of the balancing charge under S. 41(2) , which according to him is a return of capital and not a return of revenue and, secondly, under the second and third steps the 8% deduction is to be made from \"profits and gains attributable to the business of\" the specified industry (here generation and distribution of electricity). As regards the first aspect, on the question of real nature or true character of a balancing charge two apparently divergent views would appear to have been taken by this in two decisions. In the case of (supra) the question that arose for determination was whether a balancing charge which was brought to tax on the basis of deemed income and was, therefore, included in the assessable income of an assessee under the second proviso to cl. (vii) of sub-s. (2) of s. 10 of the 1922 Act (equivalent to s. 41(2) of the 1961 Act) could be taken into account while considering \"smallness of profit\" for purposes of deciding whether the case attracted the applicability of S. 23A of the Act and this took the view that the balancing charge was not real income but was made taxable income for the purpose of computation of the assessable income by legal fiction but on that account it did not become commercial profit and was not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable; in that context this observed that what in truth was a capital return was by a fiction regarded for the purposes of the Act as income and was made chargeable to income tax but because of that its character was not altered and it was not converted into assessee's business profits and that smallness of profit in S. 23A had to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. In the subsequent decision in the case (supra) this has regarded a balancing charge as being the \"escaped profits\" of the business for which the assessee is made liable to tax. At page 254 of the report the explained the nature of the balancing charge by way of illustration thus : \"assume that the original cost of a machinery or plant is Rs. 100 and depreciation allowed is Rs. 25; the written down value is Rs. 75. If the machinery is sold for Rs. 100. it is obvious that depreciation of Rs. 25 was wrongly allowed. If it had not been allowed that amount would have swelled the profits to that extent. When it is found that it was wrongly allowed that profit Is brought to charge. The second proviso, therefore, in substance, brings to charge an escaped profit or gain of the business carried on by the assessee\". These apparently divergent views have given rise to two rival contentions urged before us by counsel on other tide, It is unnecessary in this case to go into the question whether the divergence, is real or merely apparent, for. as we have said above. the answer to the question raised before us does not depend upon the real nature on true character of the balancing charge but upon proper construction of the sub-s. (1) which contains the legislative mandate with regard to the manner in which three steps indicated therein are required to be taken for computing the deduction of 8% contemplated by that pro- vision. It is true that by a legal fiction created under s. 41 (2) a balancing charge arising from, sale of old machinery or building is treated as deemed income and the same is brought to tax; in other words the legal fiction enables the to take back what it had given by way of depreciation allowance in the preceding years since what was given in the preceding years was in excess of that which ought to have been given. This shows that the fiction has been created for the purpose of computation of the assessable income of the assessee under the head \"Business Income\". It was rightly pointed out by the learned Solicitor General that legal fictions are created only for a definite purpose and they should be limited to the purpose for which they are created and should not be extended beyond their legitimate field. But as indicated earlier the fiction under s. 41(2) is created for the purpose of computation of assessable income of the assessee under the head 'Business Income' and under s. 80E(1) in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assesaable income chargeable to tax is to be determined; in other words, the legal fiction under s. 41(2) and the grant of special deduction in case of specified industries are so closely connected with each other that taking into account the balancing charge (i.e. deemed profits) before computing the 8% deduction under s. 80E(1) would amount to extending the legal fiction within the limits of the purpose for which the said fiction 'had been created. ", "As regards the aspect emerging from the expression \"attributable to\" occurring in the phrase \"profits and gains attributable to the business of\" the specified industry (here generation and distribution of electricity) on which the learned Solicitor General relied, it will be pertinent to observe that the has deliberately used the expression \"attributable to\" and not the expression \"derived from\". It cannot be disputed that the expression \"attributable to\" is certainly wider in import than the expression \"derived from\". Had the expression \"derived from\" been used it could have with some force been contended that a balancing charge arising from the sale of old machi- nery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection it may be pointed out that whenever the wanted to give a restricted meaning in the manner suggested by the learned Solicitor General it has used the expression \"derived from\", as for instance in s. 80J . In our view (since the expression of wider import, namely, \"attributable to?' has been used, the intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. For the aforesaid reasons and particularly on true construction of the provision itself we are of the view that both the and were right in taking the view that the item of Rs. 7,55,807/was required to be taken into account while computing the deduction of 8 % contemplated by s. 80E (1) of the Act. The 's appeal, therefore, fails and is dismissed. ", "Turning to the appeal of the assessee, being Civil Appeal No. 785 (NT). of 1977, the question is whether unabsorbed depreciation and development rebate are deductible or not in computing. profits under s. 80E(1) of the Act. Here again the answer to the question must depend upon the construction of sub-s. (1) of s. 80E and the construction which we have placed on the said provision while disposing of the 's appeal will furnish the correct answer to the question posed. As indicated earlier sub-s. (1) contemplates three steps being taken for computing the special deduction permissible thereunder and arriving at the net income exigible to tax and the first two steps read together contain the Legislative mandate as to how the total income of which the profits and gains attributable to the business of the specified industry forms a part-of the concerned assessee is to be computed and according to the parenthetical clause, Which contains the key words, the same is to be computed in accordance with the provisions a the Act except s. 80E and since in this case it is income from business the same will have to be computed in accordance with ss. 30 to 43A which would include s. 32(2) (which provides for carry forward of depreciation) and s. 3 3 (2) (which provides for carry forward of development rabate for eight years). In other words, in computing the total income of the concerned assessee items of unabsorbed depreciation and unabsorbed development rebate will have to be deducted before arriving at the figure that will become exigible to, the deduction of 8% contemplated by s. 80E(1) . On this construction, therefore , in our view, was right in deducting unabsorbed depreciation and development rebate aggregating to Rs' 2,54,613 from Rs. 8,02,126 and holding the balance of Rs. 5,47,513/- being, exigible to the 8% deduction. ", "The assessee attempted to challenge the aforesaid view by raising a couple of contentions. In the first place before it was strenuously urged, though not seriously before us, that the expression \"total income\" appearing in S. 80E(1) has been used in its commercial sense and since neither the unabsorbed depreciation nor the unabsorbed development rebate has anything to do with commercial profits. attributable to the business, the said two items would not be deductible before arriving at the figure that would be exigible to the 8% deduction. It is not possible to accept this contention for more than one reason. First. in sub-s. (1) of s. 80E the expression \"total income\" is followed by the words \"as computed in accordance with the other provisions of this Act\" in parenthesis and the mandate of these words clearly negatives the argument that the expression \"total income\" has been used in the sense of commercial profits. Secondly, the expression \"total income\"' has been defined in s. 2 (45) of the Act as meaning \"the total amount of income referred to in section 5 , computed in the manner laid down in this Act\" and when this definition has been furnished by the Act itself' the expression as appearing in S. 80E(1) must, in the absence of any- ", "671 ", "thing in the context suggesting to the contrary, be construed in accordance with such definition. Since the words in the parenthesis occurring in sub-s. (1)Lay down the manner in which the total income of the concerned assessee is to be computed there would be no scope for excluding items like unabsorbed depreciation and unabsorbed deve- lopment rebate while computing the total income on the basis that the total income spoken of by sub-s. (1) means commercial profits. ", "Counsel for the assessee next relied upon two decisions, one of in the case of ,(1) and the other of in the case of .,(2) in both of which a view has been taken that the deduction under s. 80E (1) has to be worked out before setting off the losses brought forward from the earlier years and the further argument based on this view is that if carried forward losses are not to be deducted then carried forward depreciation and carried forward development rebate,-since all the three stand on the same footing-should not be deductible while working out the deduction under s. 80E of the Act and in that behalf reliance was placed on a later decision of in . (No.2).(3), It may be stated that the first two decisions did not deal with the question of unabsorbed depreciation or unabsorbed rebate, but merely dealt with the question of carried forward losses in the context of s. 80E(1) , while the third decision dealt with all the three things, carried forward loss, carried forward depreciation and carried forward development rebate in the context of s. 80E(1) and it was held that the deduction under s. 80E(1) will have to be worked out before setting off or adjusting each of the three things. In that case held that as regards carried forward loss the point was covered by its earlier decision in , case (supra), that unabsorbed development rebate stood on the same footing as unabsorbed losses and as regards unabsorbed depreciation it took the view that since s. 72(2) itself postponed the adjustment of unabsorbed depreciation to a stage subsequent to the set off of business losses under S. 72(2) and set off of the losses in speculation business under s. 73(3) , the unabsorbed depreciation cannot be. adjusted or deducted because if for the purpose of S. 80E the previous years losses could not be set off it will be a fortiori that the unabsorbed depreciation could not be adjusted inasmuch as from the very sequence the adjustment of unabsorbed depreciation could come only after the adjustment of the unabsorbed losses of the previous years. It will thus appear clear that in the last mentioned case unabsorbed development rebate was held to be non-deductible for the same reasons for which unabsorbed loss could not be deducted under the earlier decision and the unabsorbed depreciation was held to be non- deductible on the basis of de priori reasoning. The question that arises for consideration, therefore, is whether the view taken in regard to non-deductibility of carried for- ", "(1) (1972) 86 I.T.R. 192. ", "(2) (1977) 107 I.T.R. 386. ", "(3) (1977) 110 I.T.R. 346. ", "672 ", "ward losses while computing the total income for the purpose of granting the 8% deduction under s. 80E in the first two decisions is correct. It is true that in the instant case the question of deductibility or otherwise of carried forward losses of earlier years in the context of S. 80E has not directly arisen before us but since counsel for the assessee has raised a contention about non-deductibility of unabsorbed depreciation and unabsorbed development rebate on the basis of the view taken by in case (supra) and in case (supra) in regard to nondeductibility of unabsorbed losses of earlier years, we are constrained to express our opinion on the validity of the view taken in those two cases. In our opinion, the view taken in case (supra) and case (supra) in regard to the nondeductibility of unabsorbed losses of the earlier years in the context of computing the deduction under s. 80E of the Act is open to grave doubts. In the first place such a view runs counter to the Legislative mandate contained in the three steps required to be taken under sub-s. '(1) of s. 80E as discussed earlier. Secondly, the main reasoning given by the for taking such a view in the Indian Transformers' case (supra) the in case (supra) has merely followed the Kerala decision-does not bear scrutiny. After pointing out that Chapter IV of the 1961 Act deals with the computation of income falling under the various heads mentioned in s. 14 of the Act, that Chapter VI in which s. 72 occurs deals with the aggregation of income and set off or carry forward of loss and that s. 80E deals with deduction to be made in computing total income, the has proceeded to observe thus \"Computation as such is used only in the heading in Chapter IV. Section 66 Also provides that in computing the total income of an assessee there shall be included all income on which no income-tax is payable under Chapter VII, etc. What is provided in section 66 is also relating to computation. ", "Similarly, the same words are used in section ", "67. But, there are no such words in section ", "72. Section 72 speaks of the net result of the computation under the bead 'Profits and gains of business or profession'. We consider that the set-off permitted under section 72 is from an amount arrived at after applying the provisions of Chapter IV along with other sections of the Act such as sections 66 and 67 , etc., dealing with computation of income and after permitting the deductions under section 80E .\" ", "The Court has further observed that in its opinion the deduction under S.80 E is a 'special benefit given to a company which satisfies the conditions under section 80E and the deduction permissible thereunder is only from profits and gains attributable to the specified activities and this benefit should not be diminished by 'the other benefits conferred by the Act, such as the right to have the previous losses set off, that the two serve different purposes and the benefit of both must be available to an assessee, without the one impinging on the other. It will thus appear that has regarded section 72 appear-, ing in Chapter VI as a provision unconnected with the computation of the total income of an assessee and a provision which comes into operation 'at a stage subsequent to the computation of the total income arising from business done in accordance with ss. 30 to 43A occurring in Chapter IV of the Act and, therefore, the unabsorbed losses cannot be set off before calculating the deduction under S. 80E . It is not possible to accept the view that s. 72 has no bearing on or is unconnected with the computation of the total income of an assessee under the head 'Profits and gains of business or profession'. Actually s. 72(1) provides that where the net result of computation under the head 'Profits and gains of business or profession' is a loss and such loss cannot be or is not Wholly set off against the income under any head of income in, accordance with the provisions of S. 71 , so much of the loss as has not been so set-off, subject to the other provisions of the Chapter, shall be carried forward to the following assessment year and shall be set off against the profits and gains, if any, of any business or profession for that assessment year. Therefore, s. 72(1) has a direct impact upon the computation under the head 'Profits and gains of business or profession'. In other words, the correct figure of total income. which is otherwise taxable under other provisions of the Act, cannot be arrived at without working out the net result of computation under the head 'Profits and gains of business or profession'. Further the question whether special benefit under S. 80E as well as the normal or usual benefit of carry forward of losses of previous years should both be available to an assessee, without one impinging on the other must depend upon the intention of the and such intention has to be gathered from the language employed. In this view of the matter it is extremely doubtful whether in spite of the Legislative mandate contained in the three steps provided for by sub-s. (1) of S. 80E, the carried forward losses would not be deductible before working out the 8% deduction contemplated by s. 80E and, therefore, the contention that by parity of reasoning or on a priori reasoning unabsorbed development rebate and unabsorbed depreciation should be held to be non-deductible before working out the 8% deduction under S. 80E(1) cannot be accepted. As observed earlier on proper construction of the provision contained in sub-s. (1) of s. 80E items like unabsorbed depreciation and unabsorbed development rebate will have to be deducted in arriving at the figure which would be exigible to deduction of 8% under s. 80E(1) . Reference was also made by counsel for the assessee to the decision of in the case of ., (supra). In our view that decision has nothing whatever to do with the question posed before us. In that case the question was whether the loss incurred by an assessee in non-priority business could be set off against the profits and gains made by the assessee in the priority business while computing the 8 % deduction under s. 80E and upheld the 's view that for the purpose of allowing a deduction under S. 80E the words \"such profits\" occurring in that section mean \"the profits and gains attributable to an activity as specified in the 5th Schedule of the Act\" and, therefore, the deduction was required to be worked out with- ", "674 ", "out reference to the loss incurred in non-priority business. The decision was rendered on the language of s. 80E(1) but it cannot avail the assessee on the point raised in the appeal. ", "In the result the assessee's appeal also fails and the same is dismissed. ", "In the circumstances, there will be no order as to costs in both the appeals. ", " dismissed."], "relevant_candidates": ["0000310501", "0000748727", "0001149818", "0001329246", "0001359356", "0001436024"]} {"id": "0000102852", "text": ["CASE NO.: Writ Petition (civil) 61 of 2002 PETITIONER: & Others RESPONDENT: & Others DATE OF JUDGMENT: 19/10/2006 BENCH: Y.K.SABHARWAL CJI & K.G.BALAKRISHNAN & S.H.KAPADIA & C.K.THAKKER & P.K. BALASUBRAMANYAN JUDGMENT: ", "JUDGMENT with WP (C) Nos.62, 81, 111, 134, 135, 206, 226, 227, 255, 266, 269, 279, 299, 294, 295, 298, 250, 319, 375, 386, 387, 320, 322, 323, 338, 234, 340, 423, 440, 453, 460, 472, 482, 483, 484, 485, 550, 527 and 640 of 2002, SLP (C) Nos. 4915-4919 of 2003, W.P. (C) Nos.153/2003, C.P. (C) No. 404/2004 in W.P.(C) No. 255/2002, C.P. (C) No.505/2002 in WP (C) No.61/2002, C.P. (C) No.553/2002 in WP (C) No.266/2002, C.P. (C) No.570/2002 in WP (C) No.255/2002, C.P. (C) No.122/2003 in WP (C) No.61/2002, C.P. (C) No.127/2003 in WP (C) No.61/2002, C.P. (C) No.85/2003 in WP (C) No.255/2002, W.P. (C) Nos. 313 and 381 of 2003, CIVIL APPEAL Nos. 12501-12503/1996, SLP (C) No.754/1997, WP (C) No.460 of 2003, CIVIL APPEAL Nos. 7802/2001 and 7803/2001, W.P. (C) No.469/2003, SLP (C) No.19689/1996, WP (C) No. 563/2003, WP (C) No.2/2003, WP (C) Nos. 515, 519 and 562 of 2004, WP (C) No. 413 of 1997, WP (C) No.286 of 2004 and SLP (C) No.14518 of 2004. ", "DELIVERED BY: ", "S.H.KAPADIA, J. ", "KAPADIA, J. ", "The width and amplitude of the right to equal opportunity in public employment, in the context of reservation, broadly falls for consideration in these writ petitions under Article 32 of the Constitution. ", "FACTS IN WRIT PETITION (CIVIL) NO.61 OF 2002: ", "The facts in the above writ petition, which is the lead petition, are as follows. ", "Petitioners have invoked Article 32 of the Constitution for a writ in the nature of certiorari to quash the Constitution (Eighty-Fifth Amendment] Act, 2001 inserting Article 16(4A) of the Constitution retrospectively from 17.6.1995 providing reservation in promotion with consequential seniority as being unconstitutional and violative of the basic structure. According to the petitioners, the impugned amendment reverses the decisions of this Court in the case of and others , and others v. State of Punjab and others (), and others (II) v. State of Punjab and others , and others (III) v. State of Punjab and . ", " . Petitioners say that the has appropriated the judicial power to itself and has acted as an appellate authority by reversing the judicial pronouncements of this Court by the use of power of amendment as done by the impugned amendment and is, therefore, violative of the basic structure of the Constitution. The said amendment is, therefore, constitutionally invalid and is liable to be set aside. Petitioners have further pleaded that the amendment also seeks to alter the fundamental right of equality which is part of the basic structure of the Constitution. Petitioners say that the equality in the context of Article 16(1) connotes \"accelerated promotion\" so as not to include consequential seniority. Petitioners say that by attaching consequential seniority to the accelerated promotion, the impugned amendment violates equality in Article 14 read with Article 16(1). Petitioners further say that by providing reservation in the matter of promotion with consequential seniority, there is impairment of efficiency. Petitioners say that in the case of decided on 16.11.1992, this Court has held that under Article 16(4 ), reservation to the backward classes is permissible only at the time of initial recruitment and not in promotion. Petitioners say that contrary to the said judgment delivered on 16.11.1992, the enacted the Constitution (Seventy- Seventh Amendment) Act, 1995. By the said amendment, Article 16(4A) was inserted, which reintroduced reservation in promotion. The Constitution (Seventy-Seventh Amendment) Act, 1995 is also challenged by some of the petitioners. Petitioners say that if accelerated seniority is given to the roster-point promotees, the consequences would be disastrous. A roster-point promotee in the graduate stream would reach the 4th level by the time he attains the age of 45 years. At the age of 49, he would reach the highest level and stay there for nine years. On the other hand, the general merit promotee would reach the 3rd level out of 6 levels at the age of 56 and by the time, he gets eligibility to the 4th level, he would have retired from service. Petitioners say that the consequences of the impugned 85th Amendment which provides for reservation in promotion, with consequential seniority, would result in reverse discrimination in the percentage of representation of the reserved category officers in the higher cadre. BROAD ISSUES IN WRIT PETITION No.527 OF 2002: The broad issues that arise for determination in this case relate to the: ", "1. Validity ", "2. Interpretation ", "3. Implementation of (i) the Constitution (Seventy-Seventh Amendment) Act, 1995, the Constitution (Eighty-First Amendment) Act, 2000, the Constitution (Eighty-Second Amendment) Act, 2000, and the Constitution (Eighty-Fifth Amendment) Act, 2001; and, (ii) Action taken in pursuance thereof which seek to reverse decisions of in matters relating to promotion and their application with retrospective effect. ", "ARGUMENTS: ", "The substance of the arguments advanced on behalf of the petitioners briefly is as follows: ", "Equality is a part of the basic structure and it is impossible to conceive of the Constitution without equality as one of its central components. That, equality is the basic feature referred to in the preamble to our Constitution. Petitioners further submit that Article 16 is integral to equality; that, Article 16 has to be read with Article 14 and with several Articles in Part-IV. According to the petitioners, the Constitution places an important significance on public employment and the rule of equality, inasmuch as, a specific guarantee is given under Article 16 protecting equality principles in public employment. In this connection, reliance is also placed on the provisions of Part XIV to show that the Constitution makers had given importance to public employment by making a special provision in the form of Part XIV providing certain rights and protection to the office holders in the services of the Union and the States. These provisions are Articles 309, 311, 315, 316, 317 and 318 to 323. Special provisions have also been made in Article 323-A which permits establishment of tribunals as special and adjudicatory mechanism. That, Article 335 recognizes the importance of efficiency in administration and the various provisions of the Constitution indicate that public employment was and is even today of central concern to the Constitution. It is urged that equality in matters of public employment cannot be considered as merely an abstract concept. Petitioners say that over the years, this Court has delivered many decisions laying down that principles of 'equality' and 'affirmative action' are the pillars of our Constitution. These judgments also provide conclusions based on principles which gave meaning to equality both as an individual right and as group expectations. It is submitted that clause (4) of Article 16 is an instance of the classification implicit and permitted by Article 16(1) and that this view of equality did not dilute the importance of Article 16(1) or Article 16(2) but merely treated Article 16(4) as an instance of the classification; that this relationship of sub-clauses within Article 16 is not an invitation for reverse discrimination and that, equality of opportunity cannot be overruled by affirmative action. It is submitted that \"equality in employment\" consists of equality of opportunity [ Article 16(1 )], anti- discrimination [ Article 16(2 )], special classification [ Article 16(3 )], affirmative action [ Article 16(4)] which does not obliterate equality but which stands for classification within equality], and lastly, efficiency [ Article 335]. As regards the words 'nothing in this article' in Article 16(4 ), it is urged that these words cannot wipe out Article 16(1) and, therefore, they have a limited meaning. It is urged that the said words also occur in Articles 16(4A) and 16(4B). It is urged that equality in the Constitution conceives the individual right to be treated fairly without discrimination in the matter of equality of opportunity. It also conceives of affirmative action in Article 15(4) and Article 16(4). It enables classification as a basis for enabling preferences and benefits for specific beneficiary groups and that neither classification nor affirmative action can obliterate the individual right to equal opportunity. Therefore, a balance has to be evolved to promote equal opportunities while protecting individual rights. It is urged that as an individual right in Article 16(1 ), enforceability is provided for whereas \"group expectation\" in Article 16(4) is not a fundamental right but it is an enabling power which is not coupled with duty. It is submitted that if the structural balance of equality in the light of the efficiency is disturbed and if the individual right is encroached upon by excessive support for group expectations, it would amount to reverse discrimination. ", "On the question of power of amendment, it is submitted that the limited power of amendment cannot become an unlimited one. A limited amendment power is one of the basic features of our Constitution and, therefore, limits on that power cannot be destroyed. Petitioners submit that cannot under Article 368 expand its amending power so as to acquire for itself the right to abrogate the Constitution and if the width of the amendment invites abrogation of the basic structure then such amendment must fail. Reliance is placed in this connection on the judgment in . On the question of balancing of fundamental rights vis-`-vis directive principles, it is submitted that directive principles cannot be used to undermine the basic structure principles underlying fundamental rights including principles of equality, fundamental freedoms, due process, religious freedom and judicial enforcement. ", "On the question of balancing and structuring of equality in employment, it is urged that quotas are subject to quantitative limits and qualitative exclusions; that, there is a distinction between quota limits (example 15% to SCs) and ceiling-limits/maximum permissible reservation limits (example 50%) which comes under the category of quantitative limits. However, quotas are also subject to qualitative exclusions like creamy layer. It is urged that in numerous judgments and in particular in , , (II)3, the equality of opportunity in public employment is clarified in order to structure and balance Articles 16(1) and 16(4). ", "In answer to the respondents' contentions that Articles 16(4A) and 16(4B) and the changes to Article 335 are merely enabling provisions and that in a given case if the exercise undertaken by the appropriate Government is found to be arbitrary, this Court will set it right, it is contended that ingressing the basic structure is a per se violation of the Constitution. In this connection, it is alleged that the basis for impugned amendments is to overrule judicial decisions based on holistic interpretation of the Constitution and its basic values, concepts and structure. In this connection, it is urged that the 77th Amendment introducing Article 16(4A) has the effect of nullifying the decision in the case of ; that, the 81st Amendment introducing Article 16(4B) has been brought in to nullify the effect of the decision in , in which it has been held that carry forward vacancies cannot be filled exceeding 50% of the posts. Petitioners say that similarly the Constitution (Eighty-Second Amendment) Act, 2000 introducing the proviso to Article 335 has been introduced to nullify the effect of the decision in the case of and a host of other cases, which emphasize the importance of maintaining efficiency in administration. It is submitted that, the 85th Amendment adding the words 'with consequential seniority' in Article 16(4A) has been made to nullify the decision in ", "Accordingly it is urged that the impugned amendments are violative of the basic structure and the fundamental values of the Constitution articulated in the preamble and encapsulated in Articles 14, 16 and 19; that, they violate the fundamental postulates of equality, justice, rule of law and secularism as enshrined in the Constitution and that they violate the fundamental role of as interpreter of the Constitution. That, the impugned amendments create an untrammelled, unrestrained and unconstitutional regime of reservations which destroys the judicial power and which undermines the efficacy of judicial review which is an integral part of rule of law. It is argued that, Articles 14 and 16 have to be read with Article 335 as originally promulgated; that, the impugned amendments invade the twin principles of efficiency, merit and the morale of public services and the foundation of good governance. It is urged vehemently that the impugned amendments open the floodgates of disunity, disharmony and disintegration. ", "On behalf of the respondents, following arguments were advanced. The power of amendment under Article 368 is a 'constituent' power and not a 'constituted power'; that, that there are no implied limitations on the constituent power under Article 368; that, the power under Article 368 has to keep the Constitution in repair as and when it becomes necessary and thereby protect and preserve the basic structure. In such process of amendment, if it destroys the basic feature of the Constitution, the amendment will be unconstitutional. Constitution, according to the respondents, is not merely what it says. It is what the last interpretation of the relevant provision of the Constitution given by which prevails as a law. The interpretation placed on the Constitution by the becomes part of the Constitution and, therefore, it is open to amendment under Article 368. An interpretation placed by the on any provision of the Constitution gets inbuilt in the provisions interpreted. Such articles are capable of amendment under Article 368. Such change of the law so declared by will not merely for that reason alone violate the basic structure of the Constitution or amount to usurpation of judicial power. This is how Constitution becomes dynamic. Law has to change. It requires amendments to the Constitution according to the needs of time and needs of society. It is an ongoing process of judicial and constituent powers, both contributing to change of law with the final say in the judiciary to pronounce on the validity of such change of law effected by the constituent power by examining whether such amendments violate the basic structure of the Constitution. On every occasion when a constitutional matter comes before the , the meaning of the provisions of the Constitution will call for interpretation, but every interpretation of the Article does not become a basic feature of the Constitution. That, there are no implied limitations on the power of the under Article 368 when it seeks to amend the Constitution. However, an amendment will be invalid, if it interferes with or undermines the basic structure. The validity of the amendment is not to be decided on the touchstone of Article 13 but only on the basis of violation of the basic features of the Constitution. ", "It is further submitted that amendments for giving effect to the directive principles cannot offend the basic structure of the Constitution. On the contrary, the amendments which may abrogate individual rights but which promote Constitutional ideal of 'justice, social, economic and political' and the ideal of 'equality of status' are not liable to be struck down under Article 14 or Article 16(1) and consequently, such amendments cannot violate the basic structure of the Constitution. That, the amendments to the Constitution which are aimed at removing social and economic disparities cannot offend the basic structure. It is urged that the concepts flowing from the preamble to the Constitution constitute the basic structure; that, basic structure is not found in a particular Article of the Constitution; and except the fundamental right to live in Article 21 read with Article 14 , no particular Article in Part-III is a basic feature. Therefore, it is submitted that equality mentioned in Articles 14 and 16 is not to be equated to the equality which is a basic feature of the Constitution. ", "It is submitted that the principle of balancing of rights of the general category and reserved category in the context of Article 16 has no nexus to the basic feature of the Constitution. It is submitted that basic feature consists of constitutional axioms like constitutional supremacy, and democratic form of government, secularism, separation of powers etc. Respondents contend that Article 16(4) is a part of the Constitution as originally enacted. The exercise of the power by the delegate under Article 16(4) will override Article 16(1). It is not by virtue of the power of the delegate, but it is by virtue of constituent power itself having authorized such exercise by the delegate under Article 16(4 ), that article 16(1) shall stand overruled. The only limitation on the power of delegate is that it should act within four corners of Article 16(4 ), namely, backward classes, which in the opinion of the are not adequately represented in public employment. If this condition precedent is satisfied, a reservation will override Article 16(1) on account of the words 'nothing in this Article shall prevent the '. It is urged that jurisprudence relating to public services do not constitute basic feature of the Constitution. That, the right to consideration for promotion in service matters is not a basic feature. ", "It is lastly submitted that Articles 16(4A) and 16(4B) are only enabling provisions; that, the constitutionality of the enabling power in Articles 16(4A) and 16(4B) is not to be tested with reference to the exercise of the power or manner of exercise of such power and that the impugned amendments have maintained the structure of Articles 16(1) to 16(4) intact. In this connection, it is submitted that the impugned amendments have retained reservations at the recruitment level inconformity with the judgment in , which has confined Article 16(4) only to initial appointments; that Article 16(4A) is a special provision which provides for reservation for promotion only to SCs and STs. It is urged that if SCs/STs and OBCs are lumped together, OBCs will take away all the vacancies and, therefore, Article 16(4A) has been inserted as a special provision. That, in , the focus was on Backward Classes and not on SCs/STs and, therefore, there was no balancing of rights of three groups, namely, general category, other backward classes and scheduled castes/scheduled tribes. It is, therefore, contended that under Article 16(4A ), reservation is limited. It is not to the extent of 50% but it is restricted only to SCs and STs, and, therefore, the \"risk element\" pointed out in stands reduced. To carve out SCs/STs and make a separate classification is not only constitutional, but it is a constitutional obligation to do so under Article ", "46. That, Article 16(4) is an overriding provision over Article 16(1) and if Article 16(4) cannot be said to constitute reverse discrimination then Article 16(4A) also cannot constitute reverse discrimination. ", "It is next submitted that this has taken care of the interests of the general category by placing a ceiling on filling-up of vacancies only to a maximum of 50% for reservation. The said 50% permitted by this can be reserved in such manner as the appropriate Government may deem fit. It is urged that if it is valid to make reservation at higher levels by direct recruitment, it can also be done for promotion after taking into account the mandate of Article 335. ", "It is next submitted that the amendment made by Article 16(4B) makes an exception to 50% ceiling-limit imposed by , by providing that the vacancies of previous years will not be considered with the current year's vacancies. In this connection, it was urged that Article 16(4B) applies to reservations under Article 16(4) and, therefore, if reservation is found to be within reasonable limits, the would uphold such reservations depending upon the facts of the case and if reservation suffers from excessiveness, it may be invalidated. Therefore, the enabling power under Article 16(4B) cannot be rendered invalid. ", "For the above reasons, respondents submit that there is no infirmity in the impugned constitutional amendments. ", "KEY ISSUE: ", "It is not necessary for us to deal with the above arguments serially. The arguments are dealt with by us in the following paragraphs subject-wise. ", "The key issue, which arises for determination in this case is \u0016 whether by virtue of the impugned constitutional amendments, the power of the is so enlarged so as to obliterate any or all of the constitutional limitations and requirements? ", "STANDARDS OF JUDICIAL REVIEW OF CONSTITUTIONAL AMENDMENTS: ", "Constitution is not an ephermal legal document embodying a set of legal rules for the passing hour. It sets out principles for an expanding future and is intended to endure for ages to come and consequently to be adapted to the various crisis of human affairs. Therefore, a purposive rather than a strict literal approach to the interpretation should be adopted. A Constitutional provision must be construed not in a narrow and constricted sense but in a wide and liberal manner so as to anticipate and take account of changing conditions and purposes so that constitutional provision does not get fossilized but remains flexible enough to meet the newly emerging problems and challenges. ", "This principle of interpretation is particularly apposite to the interpretation of fundamental rights. It is a fallacy to regard fundamental rights as a gift from the to its citizens. Individuals possess basic human rights independently of any constitution by reason of basic fact that they are members of the human race. These fundamental rights are important as they possess intrinsic value. Part-III of the Constitution does not confer fundamental rights. It confirms their existence and gives them protection. Its purpose is to withdraw certain subjects from the area of political controversy to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts. Every right has a content. Every foundational value is put in Part-III as fundamental right as it has intrinsic value. The converse does not apply. A right becomes a fundamental right because it has foundational value. Apart from the principles, one has also to see the structure of the Article in which the fundamental value is incorporated. Fundamental right is a limitation on the power of the . A Constitution, and in particular that of it which protects and which entrenches fundamental rights and freedoms to which all persons in the are to be entitled is to be given a generous and purposive construction. In the case of this has held that while considering the nature and content of fundamental rights, the must not be too astute to interpret the language in a literal sense so as to whittle them down. The must interpret the Constitution in a manner which would enable the citizens to enjoy the rights guaranteed by it in the fullest measure. An instance of literal and narrow interpretation of a vital fundamental right in the Indian Constitution is the early decision of the Supreme in the case of . Article 21 of the Constitution provides that no person shall be deprived of his life and personal liberty except according to procedure established by law. The Supreme by a majority held that 'procedure established by law' means any procedure established by law made by the or the legislatures of the . The Supreme refused to infuse the procedure with principles of natural justice. It concentrated solely upon the existence of enacted law. After three decades, the Supreme overruled its previous decision in A.K. Gopalan10 and held in its landmark judgment in that the procedure contemplated by Article 21 must answer the test of reasonableness. The further held that the procedure should also be in conformity with the principles of natural justice. This example is given to demonstrate an instance of expansive interpretation of a fundamental right. The expression 'life' in Article 21 does not connote merely physical or animal existence. The right to life includes right to live with human dignity. This has in numerous cases deduced fundamental features which are not specifically mentioned in Part-III on the principle that certain unarticulated rights are implicit in the enumerated guarantees. For example, freedom of information has been held to be implicit in the guarantee of freedom of speech and expression. In India, till recently, there is no legislation securing freedom of information. However, this by a liberal interpretation deduced the right to know and right to access information on the reasoning that the concept of an open government is the direct result from the right to know which is implicit in the right of free speech and expression guaranteed under Article 19(1)(a). The important point to be noted is that the content of a right is defined by the s. The final word on the content of the right is of this . Therefore, constitutional adjudication plays a very important role in this exercise. The nature of constitutional adjudication has been a subject matter of several debates. At one extreme, it is argued that judicial review of legislation should be confined to the language of the constitution and its original intent. At the other end, non- interpretivism asserts that the way and indeterminate nature of the constitutional text permits a variety of standards and values. Others claim that the purpose of a Bill of Rights is to protect the process of decision making. ", "The question which arises before us is regarding nature of the standards of judicial review required to be applied in judging the validity of the constitutional amendments in the context of the doctrine of basic structure. The concept of a basic structure giving coherence and durability to a Constitution has a certain intrinsic force. This doctrine has essentially developed from the German Constitution. This development is the emergence of the constitutional principles in their own right. It is not based on literal wordings. ", "In & Others etc. v. etc. , the basic structure concept was resorted to although no question of constitutional amendment was involved in that case. But this held that policies of a State Government directed against an element of the basic structure of the Constitution would be a valid ground for the exercise of the central power under Article 356 , that is, imposition of the President's rule. In that case, secularism was held to be an essential feature of the Constitution and part of its basic structure. A State Government may be dismissed not because it violates any particular provision of the Constitution but because it acts against a vital principle enacting and giving coherence to a number of particular provisions, example: Articles 14, 15 and 25. In 12, the clearly based its conclusion not so much on violation of particular constitutional provision but on this generalized ground i.e. evidence of a pattern of action directed against the principle of secularism. Therefore, it is important to note that the recognition of a basic structure in the context of amendment provides an insight that there are, beyond the words of particular provisions, systematic principles underlying and connecting the provisions of the Constitution. These principles give coherence to the Constitution and make it an organic whole. These principles are part of Constitutional law even if they are not expressly stated in the form of rules. An instance is the principle of reasonableness which connects Articles 14, 19 and 21. Some of these principles may be so important and fundamental, as to qualify as 'essential features' or part of the 'basic structure' of the Constitution, that is to say, they are not open to amendment. However, it is only by linking provisions to such overarching principles that one would be able to distinguish essential from less essential features of the Constitution. ", "The point which is important to be noted is that principles of federalism, secularism, reasonableness and socialism etc. are beyond the words of a particular provision. They are systematic and structural principles underlying and connecting various provisions of the Constitution. They give coherence to the Constitution. They make the Constitution an organic whole. They are part of constitutional law even if they are not expressly stated in the form of rules. ", "For a constitutional principle to qualify as an essential feature, it must be established that the said principle is a part of the constitutional law binding on the legislature. Only thereafter, the second step is to be taken, namely, whether the principle is so fundamental as to bind even the amending power of the , i.e. to form a part of the basic structure. The basic structure concept accordingly limits the amending power of the . To sum up: in order to qualify as an essential feature, a principle is to be first established as part of the constitutional law and as such binding on the legislature. Only then, it can be examined whether it is so fundamental as to bind even the amending power of the i.e. to form part of the basic structure of the Constitution. This is the standard of judicial review of constitutional amendments in the context of the doctrine of basic structure. ", "As stated above, the doctrine of basic structure has essentially emanated from the German Constitution. Therefore, we may have a look at common constitutional provisions under German Law which deal with rights, such as, freedom of press or religion which are not mere values, they are justiciable and capable of interpretation. The values impose a positive duty on the to ensure their attainment as far as practicable. The rights, liberties and freedoms of the individual are not only to be protected against the , they should be facilitated by it. They are to be informed. Overarching and informing of these rights and values is the principle of human dignity under the German basic law. Similarly, secularism is the principle which is the overarching principle of several rights and values under the Indian Constitution. Therefore, axioms like secularism, democracy, reasonableness, social justice etc. are overarching principles which provide linking factor for principle of fundamental rights like Articles 14, 19 and ", "21. These principles are beyond the amending power of the . They pervade all enacted laws and they stand at the pinnacle of the hierarchy of constitutional values. For example, under the German Constitutional Law, human dignity under Article 1 is inviolable. It is the duty of the not only to protect the human dignity but to facilitate it by taking positive steps in that direction. No exact definition of human dignity exists. It refers to the intrinsic value of every human being, which is to be respected. It cannot be taken away. It cannot give. It simply is. Every human being has dignity by virtue of his existence. in Germany, therefore, see human dignity as a fundamental principle within the system of the basic rights. This is how the doctrine of basic structure stands evolved under the German Constitution and by interpretation given to the concept by . ", "Under the Indian Constitution, the word 'federalism' does not exist in the preamble. However, its principle (not in the strict sense as in U.S.A.) is delineated over various provisions of the Constitution. In particular, one finds this concept in separation of powers under Articles 245 and 246 read with the three lists in the seventh schedule to the Constitution. ", "To conclude, the theory of basic structure is based on the concept of constitutional identity. The basic structure jurisprudence is a pre-occupation with constitutional identity. , it has been observed that 'one cannot legally use the constitution to destroy itself'. It is further observed 'the personality of the constitution must remain unchanged'. Therefore, this in Kesavananda Bharati13, while propounding the theory of basic structure, has relied upon the doctrine of constitutional identity. The word 'amendment' postulates that the old constitution survives without loss of its identity despite the change and it continues even though it has been subjected to alteration. This is the constant theme of the opinions in the majority decision in Kesavananda Bharati13. To destroy its identity is to abrogate the basic structure of the Constitution. This is the principle of constitutional sovereignty. Secularism in India has acted as a balance between socio-economic reforms which limits religious options and communal developments. The main object behind the theory of the constitutional identity is continuity and within that continuity of identity, changes are admissible depending upon the situation and circumstances of the day. ", "Lastly, constitutionalism is about limits and aspirations. According to Justice , interpretation of the Constitution as a written text is concerned with aspirations and fundamental principles. In his Article titled 'Challenge to the Living Constitution' by , the author says that the Constitution embodies aspiration to social justice, brotherhood and human dignity. It is a text which contains fundamental principles. Fidelity to the text qua fundamental principles did not limit judicial decision making. The tradition of the written constitutionalism makes it possible to apply concepts and doctrines not recoverable under the doctrine of unwritten living constitution. To conclude, as observed by , CJ, in , 'the Constitution is a precious heritage and, therefore, you cannot destroy its identity'. ", "Constitutional adjudication is like no other decision-making. There is a moral dimension to every major constitutional case; the language of the text is not necessarily a controlling factor. Our constitution works because of its generalities, and because of the good sense of the Judges when interpreting it. It is that informed freedom of action of the Judges that helps to preserve and protect our basic document of governance. ", "IS EQUALITY A PART OF THE FUNDAMENTAL FEATURES OR THE BASIC STRUCTURE OF THE CONSTITUTION? ", "At the outset, it may be noted that equality, rule of law, judicial review and separation of powers are distinct concepts. They have to be treated separately, though they are intimately connected. There can be no rule of law if there is no equality before the law; and rule of law and equality before the law would be empty words if their violation was not a matter of judicial scrutiny or judicial review and judicial relief and all these features would lose their significance if judicial, executive and legislative functions were united in only one authority, whose dictates had the force of law. The rule of law and equality before the law are designed to secure among other things justice both social and economic. Secondly, a federal Constitution with its distribution of legislative powers between and legislatures involves a limitation on legislative powers and this requires an authority other than and Legislatures to ascertain whether the limits are transgressed and to prevent such violation and transgression. As far back as 1872, Lord said that the duty to decide whether the limits are transgressed must be discharged by courts of justice. Judicial review of legislation enacted by the within limited powers under the controlled constitution which we have, has been a feature of our law and this is on the ground that any law passed by a legislature with limited powers is ultra vires if the limits are transgressed. The framers conferred on the power to issue writs for the speedy enforcement of those rights and made the right to approach for such enforcement itself a fundamental right. Thus, judicial review is an essential feature of our constitution because it is necessary to give effect to the distribution of legislative power between and legislatures, and is also necessary to give practicable content to the objectives of the Constitution embodied in Part-III and in several other Articles of our Constitution. ", "In the case of , Chandrachud, C.J., speaking for the majority, observed that Articles 14 and 19 do not confer any fanciful rights. They confer rights which are elementary for the proper and effective functioning of democracy. They are universally regarded by the universal Declaration of Human Rights. If Articles 14 and 19 are put out of operation, Article 32 will be rendered nugatory. In the said judgment, the majority took the view that the principles enumerated in Part-IV are not the proclaimed monopoly of democracies alone. They are common to all polities, democratic or authoritarian. Every is goal-oriented and every claims to strive for securing the welfare of its people. The distinction between different forms of Government consists in the fact that a real democracy will endeavour to achieve its objectives through the discipline of fundamental freedoms like Articles 14 and ", "19. Without these freedoms, democracy is impossible. If Article 14 is withdrawn, the political pressures exercised by numerically large groups can tear the country apart by leading it to the legislation to pick and choose favoured areas and favourite classes for preferential treatment. ", "From these observations, which are binding on us, the principle which emerges is that \"equality\" is the essence of democracy and, accordingly a basic feature of the Constitution. This test is very important. Free and fair elections per se may not constitute a basic feature of the Constitution. On their own, they do not constitute basic feature. However, free and fair election as a part of representative democracy is an essential feature as held in the case). Similarly, federalism is an important principle of constitutional law. The word 'federalism' is not in the preamble. However, as stated above, its features are delineated over various provisions of the Constitution like Articles 245, 246 and 301 and the three lists in the seventh schedule to the Constitution. ", "However, there is a difference between formal equality and egalitarian equality which will be discussed later on. ", "The theory of basic structure is based on the principle that a change in a thing does not involve its destruction and destruction of a thing is a matter of substance and not of form. Therefore, one has to apply the test of overarching principle to be gathered from the scheme and the placement and the structure of an Article in the Constitution. For example, the placement of Article 14 in the equality code; the placement of Article 19 in the freedom code; the placement of Article 32 in the code giving access to . Therefore, the theory of basic structure is the only theory by which the validity of impugned amendments to the Constitution is to be judged. ", "WORKING TEST IN THE MATTER OF APPLICATION OF THE DOCTRINE OF BASIC STRUCTURE: ", "Once it is held that fundamental rights could be abridged but not destroyed and once it is further held that several features of the Constitution can not be destroyed, the concept of 'express limitation' on the amending power loses its force for a precise formulation of the basic feature of the Constitution and for the courts to pronounce on the validity of a constitutional amendment. ", "A working test has been evolved by , J. in the Election Case14, in which the learned Judge has rightly enunciated, with respect, that \"for determining whether a particular feature of the Constitution is a part of its basic structure, one has per force to examine in each individual case the place of the particular feature in the scheme of the Constitution, its object and purpose and the consequences of its denial on the integrity of the Constitution as a fundamental instrument of the country's governance.\" ", "Applying the above test to the facts of the present case, it is relevant to note that the concept of 'equality' like the concept of 'representative democracy' or 'secularism' is delineated over various Articles. Basically, Part-III of the Constitution consists of the equality code, the freedom code and the right to move the courts. It is true that equality has several facets. However, each case has to be seen in the context of the placement of an Article which embodies the foundational value of equality. ", "CONCEPT OF RESERVATION: ", "Reservation as a concept is very wide. Different people understand reservation to mean different things. One view of reservation as a generic concept is that reservation is anti-poverty measure. There is a different view which says that reservation is merely providing a right of access and that it is not a right to redressal. Similarly, affirmative action as a generic concept has a different connotation. Some say that reservation is not a part of affirmative action whereas others say that it is a part of affirmative action. ", "Our Constitution has, however, incorporated the word 'reservation' in Article 16(4) which word is not there in Article 15(4). Therefore, the word 'reservation' as a subject of Article 16(4) is different from the word 'reservation' as a general concept. ", "Applying the above test, we have to consider the word 'reservation' in the context of Article 16(4) and it is in that context that Article 335 of the Constitution which provides for relaxation of the standards of evaluation has to be seen. We have to go by what the Constitution framers intended originally and not by general concepts or principles. Therefore, schematic interpretation of the Constitution has to be applied and this is the basis of the working test evolved by , J. in the Election Case14. ", "JUSTICE, SOCIAL, ECONOMIC AND POLITICAL IS PROVIDED NOT ONLY IN PART-IV (DIRECTIVE PRINCIPLES) BUT ALSO IN PART-III (FUNDAMENTAL RIGHTS): ", "India is constituted into a sovereign, democratic republic to secure to all its citizens, fraternity assuring the dignity of the individual and the unity of the nation. The sovereign, democratic republic exists to promote fraternity and the dignity of the individual citizen and to secure to the citizens certain rights. This is because the objectives of the can be realized only in and through the individuals. Therefore, rights conferred on citizens and non-citizens are not merely individual or personal rights. They have a large social and political content, because the objectives of the Constitution cannot be otherwise realized. Fundamental rights represent the claims of the individual and the restrictions thereon are the claims of the society. Article 38 in Part- IV is the only Article which refers to justice, social, economic and political. However, the concept of justice is not limited only to directive principles. There can be no justice without equality. Article 14 guarantees the fundamental right to equality before the law on all persons. Great social injustice resulted from treating sections of the Hindu community as 'untouchable' and, therefore, Article 17 abolished untouchability and Article 25 permitted the to make any law providing for throwing open all public Hindu religious temples to untouchables. Therefore, provisions of Part-III also provide for political and social justice. ", "This discussion is important because in the present case, we are concerned with reservation. Balancing a fundamental right to property vis-`-vis Articles 39(b) and 39(c) as in Kesavananda Bharati13 and cannot be equated with the facts of the present case. In the present case, we are concerned with the right of an individual of equal opportunity on one hand and preferential treatment to an individual belonging to a backward class in order to bring about equal level- playing field in the matter of public employment. Therefore, in the present case, we are concerned with conflicting claims within the concept of 'justice, social, economic and political', which concept as stated above exists both in Part-III and Part-IV of the Constitution. Public employment is a scarce commodity in economic terms. As the supply is scarce, demand is chasing that commodity. This is reality of life. The concept of 'public employment' unlike right to property is socialistic and, therefore, falls within the preamble to the Constitution which states that WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC. Similarly, the preamble mentions the objective to be achieved, namely, justice, social, economic and political. Therefore, the concept of 'equality of opportunity' in public employment concerns an individual, whether that individual belongs to general category or backward class. The conflicting claim of individual right under Article 16(1) and the preferential treatment given to a backward class has to be balanced. Both the claims have a particular object to be achieved. The question is of optimization of these conflicting interests and claims. ", "EQUITY, JUSTICE AND MERIT: ", "The above three concepts are independent variable concepts. The application of these concepts in public employment depends upon quantifiable data in each case. Equality in law is different from equality in fact. When we construe Article 16(4 ), it is equality in fact which plays the dominant role. Backward classes seek justice. General class in public employment seeks equity. The difficulty comes in when the third variable comes in, namely, efficiency in service. In the issue of reservation, we are being asked to find a stable equilibrium between justice to the backwards, equity for the forwards and efficiency for the entire system. Equity and justice in the above context are hard-concepts. However, if you add efficiency to equity and justice, the problem arises in the context of the reservation. This problem has to be examined, therefore, on the facts of each case. Therefore, Article 16(4) has to be construed in the light of Article 335 of the Constitution. Inadequacy in representation and backwardness of Scheduled Caste and Scheduled Tribes are circumstances which enable to act under Article 16(4) of the Constitution. However, as held by this Court the limitations on the discretion of the government in the matter of reservation under Article 16(4) as well as Article 16(4A) come in the form of Article 335 of the Constitution. ", "Merit is not a fixed absolute concept. , in a book, Meritocracy and Economic Inequality, edited by , points out that merit is a dependent idea and its meaning depends on how a society defines a desirable act. An act of merit in one society may not be the same in another. The difficulty is that there is no natural order of 'merit' independent of our value system. The content of merit is context- specific. It derives its meaning from particular conditions and purposes. The impact of any affirmative action policy on 'merit' depends on how that policy is designed. Unfortunately, in the present case, the debate before us on this point has taken place in an empirical vacuum. The basic presumption, however, remains that it is the who is in the best position to define and measure merit in whatever ways they consider it to be relevant to public employment because ultimately it has to bear the costs arising from errors in defining and measuring merit. Similarly, the concept of \"extent of reservation\" is not an absolute concept and like merit it is context- specific. ", "The point which we are emphasizing is that ultimately the present controversy is regarding the exercise of the power by depending upon the fact-situation in each case. Therefore, 'vesting of the power' by an enabling provision may be constitutionally valid and yet 'exercise of the power' by the in a given case may be arbitrary, particularly, if the fails to identify and measure backwardness and inadequacy keeping in mind the efficiency of service as required under Article 335. ", "RESERVATION AND AFFIRMATIVE ACTION: ", "Equality of opportunity has two different and distinct concepts. There is a conceptual distinction between a non-discrimination principle and affirmative action under which the is obliged to provide level- playing field to the oppressed classes. Affirmative action in the above sense seeks to move beyond the concept of non-discrimination towards equalizing results with respect to various groups. Both the conceptions constitute \"equality of opportunity\". ", "It is the equality \"in fact\" which has to be decided looking at the ground reality. Balancing comes in where the question concerns the extent of reservation. If the extent of reservation goes beyond cut-off point then it results in reverse discrimination. Anti-discrimination legislation has a tendency of pushing towards de facto reservation. Therefore, a numerical benchmark is the surest immunity against charges of discrimination. ", "Reservation is necessary for transcending caste and not for perpetuating it. Reservation has to be used in a limited sense otherwise it will perpetuate casteism in the country. Reservation is under-written by a special justification. Equality in Article 16(1) is individual- specific whereas reservation in Article 16(4) and Article 16(4A) is enabling. The discretion of the is, however, subject to the existence of \"backwardness\" and \"inadequacy of representation\" in public employment. Backwardness has to be based on objective factors whereas inadequacy has to factually exist. This is where judicial review comes in. However, whether reservation in a given case is desirable or not, as a policy, is not for us to decide as long as the parameters mentioned in Articles 16(4) and 16(4A) are maintained. As stated above, equity, justice and merit ( Article 335 )/efficiency are variables which can only be identified and measured by the . Therefore, in each case, a contextual case has to be made out depending upon different circumstances which may exist wise. ", "EXTENT OF RESERVATION: ", "Social justice is one of the sub-divisions of the concept of justice. It is concerned with the distribution of benefits and burdens throughout a society as it results from social institutions \u0016 property systems, public organisations etc. The problem is \u0016 what should be the basis of distribution? Writers like , and define 'social justice' in terms of rights. Other writers like and define 'social justice' in terms of deserts. Socialist writers define 'social justice' in terms of need. Therefore, there are three criteria to judge the basis of distribution, namely, rights, deserts or need. These three criteria can be put under two concepts of equality \u0016 \"formal equality\" and \"proportional equality\". \"Formal equality\" means that law treats everyone equal and does not favour anyone either because he belongs to the advantaged section of the society or to the disadvantaged section of the society. Concept of \"proportional equality\" expects the States to take affirmative action in favour of disadvantaged sections of the society within the framework of liberal democracy. ", "Under the Indian Constitution, while basic liberties are guaranteed and individual initiative is encouraged, the has got the role of ensuring that no class prospers at the cost of other class and no person suffers because of drawbacks which is not his but social. The question of extent of reservation involves two questions: ", "1. Whether there is any upper limit beyond which reservation is not permissible? ", "2. Whether there is any limit to which seats can be reserved in a particular year; in other words the issue is whether the percentage limit applies only on the total number of posts in the cadre or to the percentage of posts advertised every year as well? ", "The question of extent of reservation is closely linked to the issue whether Article 16(4) is an exception to Article 16(1) or is Article 16(4) an application of Article 16(1). If Article 16(4) is an exception to Article 16(1) then it needs to be given a limited application so as not to eclipse the general rule in Article 16(1). But if Article 16(4) is taken as an application of Article 16(1) then the two articles have to be harmonized keeping in view the interests of certain sections of the society as against the interest of the individual citizens of the society. ", "Maximum limit of reservation possible Word of caution against excess reservation was first pointed out in The General Manager, Southern Railway and another v. J. giving the majority judgment said that reservation under Article 16(4) is intended merely to give adequate representation to backward communities. It cannot be used for creating monopolies or for unduly or illegitimately disturbing the legitimate interests of other employees. A reasonable balance must be struck between the claims of backward classes and claims of other employees as well as the requirement of efficiency of administration. ", "However, the question of extent of reservation was not directly involved in Rangachari15. It was directly involved in . with reference to Article 15(4). In this case, 60% reservations under Article 15(4) was struck down as excessive and unconstitutional. , J. observed that special provision should be less than 50 per cent, how much less would depend on the relevant prevailing circumstances of each case. ", "But in State of Kerala and another v. and others J. expressed his concurrence to the views of , J. who said that although reservation cannot be so excessive as to destroy the principle of equality of opportunity under clause (1) of Article 16 , yet it should be noted that the Constitution itself does not put any bar on the power of the under Article 16(4). If a State has 80% population which is backward then it would be meaningless to say that reservation should not cross 50%. ", "However, in Indra Sawhney5 the majority held that the rule of 50% laid down in Balaji16 was a binding rule and not a mere rule of prudence. ", "Giving the judgment of the in , , stated that Article 16(4) speaks of adequate representation not proportionate representation although proportion of population of backward classes to the total population would certainly be relevant. He further pointed out that Article 16(4) which protects interests of certain sections of society has to be balanced against Article 16(1) which protects the interests of every citizen of the entire society. They should be harmonised because they are restatements of principle of equality under Article 14. (emphasis added) Are reserved category candidates free to contest for vacancies in general category In , noted that reservation under Article 16(4) do not operate on communal ground. Therefore if a member from reserved category gets selected in general category, his selection will not be counted against the quota limit provided to his class. Similarly, in R.K. Sabharwal8 the Supreme held that while general category candidates are not entitled to fill the reserved posts; reserved category candidates are entitled to compete for the general category posts. The fact that considerable number of members of backward class have been appointed/promoted against general seats in the services may be a relevant factor for the Government to review the question of continuing reservation for the said class. ", "Number of vacancies that could be reserved , who had given dissenting judgment in Rangachari15 observed that the requirement of Article 16(4) is only to give adequate representation and since Constitution-makers intended it to be a short-term measure it may happen that all the posts in a year may be reserved. He opined that reserving a fixed percentage of seats every year may take a long time before inadequacy of representation is overcome. Therefore, the Government can decide to reserve the posts. After having reserved a fixed number of posts the Government may decide that till those posts are filled up by the backward classes all appointments will go to them if they fulfil the minimum qualification. Once this number is reached the Government is deprived of its power to make further reservations. Thus, according to , the adequacy of representation has to be judged considering the total number of posts even if in a single year or for few years all seats are reserved provided the scheme is short-term. ", "The idea given by , J. in Rangachari15 did not work out in practice because most of the time even for limited number of reservations, every year qualified backward class candidates were not available. This compelled the government to adopt carry-forward rule. This carry-forward rule came in conflict with ruling. In cases where the availability of reserved category candidates is less than the vacancies set aside for them, the Government has to adopt either of the two alternatives: ", "(1) the may provide for carrying on the unfulfilled vacancies for the next year or next to the next year, or (2) instead of providing for carrying over the unfulfilled vacancies to the coming years, it may provide for filling of the vacancies from the general quota candidates and carry forward the unfilled posts by backward classes to the next year quota. ", "But the problem arises when in a particular year due to carry forward rule more than 50% of vacancies are reserved. , this was the issue. had provided for 17=% reservation for Scheduled Castes and Scheduled Tribes. In case of non- availability of reserved category candidates in a particular year the posts had to be filled by general category candidates and the number of such vacancies were to be carried forward to be filled by the reserved category candidate next year. Due to this, the rule of carry forward reservation in a particular year amounted to 65% of the total vacancies. The petitioner contended that reservation was excessive which destroyed his right under Article 16(1) and Article 14. The court on the basis of decision in Balaji16 held the reservation excessive and, therefore, unconstitutional. It further stated that the guarantee of equality under Article 16(1) is to each individual citizen and to appointments to any office under the . It means that on every occasion for recruitment the should see that all citizens are treated equally. In order to effectuate the guarantee each year of recruitment will have to be considered by itself. ", "Thus, majority differed from 's, decision in Rangachari15 holding that a cent per cent reservation in a particular year would be unconstitutional in view of decision. ", ", gave dissenting judgment. He relied on 's, judgment in Rangachari15 and held that Article 16(4) provides for adequate representation taking into consideration entire cadre strength. According to him, if it is within the power of the to make reservations then reservation made in one selection or spread over many selections is only a convenient method of implementing the provision of reservation. Unless it is established that an unreasonably disproportionate part of the cadre strength is filled up with the said castes and tribes, it is not possible to contend that the provision is not one of reservation but amounts to an extinction of the fundamental right. ", "In the case of under the Kerala State and Subordinate Services Rules, 1950 certain relaxation was given to Scheduled Caste and Scheduled Tribe candidates passing departmental tests for promotions. For promotion to upper division clerks from lower division clerks the criteria of seniority-cum-merit was adopted. Due to relaxation in merit qualification in 1972, 34 out of 51 vacancies in upper division clerks went to Scheduled Caste candidates. It appeared that the 34 members of had become senior most in the lower grade. quashed the promotions on the ground that it was excessive. upheld the promotions. , C.J. held that the promotions made in services as a whole is no where near 50% of the total number of the posts. Thus, the majority differed from the ruling of the court in Devadasan19 basically on the ground that the strength of the cadre as a whole should be taken into account. , J. in his dissenting opinion made a reference to it on the ground that such excessive concession would impair efficiency in administration. ", "In , the majority held that 50% rule should be applied to each year otherwise it may happen that (if entire cadre strength is taken as a unit) the open competition channel gets choked for some years and meanwhile the general category candidates may become age barred and ineligible. The equality of opportunity under Article 16(1) is for each individual citizen while special provision under Article 16(4) is for socially disadvantaged classes. Both should be balanced and neither should be allowed to eclipse the other. ", "However, in which was a case of promotion and the issue in this case was operation of roster system, the Court stated that entire cadre strength should be taken into account to determine whether reservation up to the required limit has been reached. With regard to ruling in case5 that reservation in a year should not go beyond 50% the Court held that it applied to initial appointments. The operation of a roster, for filling the cadre strength, by itself ensures that the reservation remains within the 50% limit. In substance the court said that presuming that 100% of the vacancies have been filled, each post gets marked for the particular category of candidate to be appointed against it and any subsequent vacancy has to be filled by that category candidate. The Court was concerned with the possibility that reservation in entire cadre may exceed 50% limit if every year half of the seats are reserved. The Constitution (Eighty-first Amendment) Act, 2000 added Article 16(4B) which in substance gives legislative assent to the judgment in . ", "CATCH-UP RULE \u0016 IS THE SAID RULE A CONSTITUTIONAL REQUIREMENT UNDER ARTICLE 16(4): ", "One of the contentions advanced on behalf of the petitioners is that the impugned amendments, particularly, the Constitution (Seventy-Seventh Amendment) and (Eight-Fifth Amendment) Acts, obliterate all constitutional limitations on the amending power of the . That the width of these impugned amendments is so wide that it violates the basic structure of equality enshrined in the Constitution. ", "The key issue which arises for determination is \u0016 whether the above \"catch-up\" rule and the concept of \"consequential seniority\" are constitutional requirements of Article 16 and of equality, so as to be beyond the constitutional amendatory process. In other words, whether obliteration of the \"catch-up\" rule or insertion of the concept of \"consequential seniority code\", would violate the basic structure of the equality code enshrined in Articles 14, 15 and 16. ", "The concept of \"catch-up\" rule appears for the first time in the case of . In the category of Guards in the , there were four categories, namely, Grade 'C', Grade 'B', Grade 'A' and Grade 'A' Special. The initial recruitment was made to Gr. 'C'. Promotion from one grade to another was by seniority-cum-suitability. The rule of reservation was applied not only at the initial stage of appointment to Grade 'C' but at every stage of promotion. The percentage reserved for SC was 15% and for ST, it was 7.5%. To give effect to the rule of reservation, a forty- point roster was prepared in which certain points were reserved for SCs and STs respectively. Subsequently, a hundred-point roster was prepared reflecting the same percentages. In 1986, general candidates and members of SCs/STs came within Grade 'A' in Northern-. On 1.8.1986, the Chief Controller promoted certain general candidates on ad hoc basis to Grade 'A' Special. Within three months, they were reverted and SCs and STs were promoted. This action was challenged by general candidates as arbitrary and unconstitutional before the tribunal. The general candidates asked for three reliefs, namely, (a) to restrain the from filling-up the posts in higher grades in the category of Guards by applying the rule of reservation; (b) to restrain the from acting upon the seniority list prepared by them; and (c) to declare that the general candidates were alone entitled to be promoted and confirmed in Grade 'A' Special on the strength of their seniority earlier to the reserved category employees. The contention of the general candidates was that once the quota prescribed for the reserved group is satisfied, the forty- point roster cannot be applied because that roster was prepared to give effect to the rule of reservation. It was contended by the general candidates that accelerated promotion may be given but the cannot give consequential seniority to reserved category candidates in the promoted category. (Emphasis added). In this connection, the general category candidates relied upon the decisions of the Allahabad and Madhya Pradesh . It was contended by the general candidates that giving consequential seniority in addition to accelerated promotion constituted conferment of double benefit upon the members of the reserved category and, therefore, violated the rule of equality in Article 16(1). It was further urged that accelerated promotion-cum- accelerated seniority is destructive of the efficiency of administration inasmuch as by this means the higher echelons of administration would be occupied entirely by members of reserved categories. This was opposed by the reserved category candidates who submitted that for the purposes of promotion to Grade 'A' Special, the seniority list pertaining to Grade 'A' alone should be followed; that, the administration should not follow the seniority lists maintained by the administration pertaining to Grade 'C' as urged by the general candidates and since SCs and STs were senior to the general candidates in Grade 'A', the seniority in Grade 'A' alone should apply. In short, the general candidates relied upon the 'catch-up' rule, which was opposed by the members of . They also relied upon the judgment of this in . ", "This Court gave following reasons for upholding the decision of the tribunal. Firstly, it was held that a rule of reservation as such does not violate Article 16(4). Secondly, this Court opined, that there is no uniform method of providing reservation. The extent and nature of reservation is a matter for the to decide having regards to the facts and requirements of each case. It is open to the , if so advised, to say that while the rule of reservation shall be applied, the candidate promoted earlier by virtue of rule of reservation/roster shall not be entitled to seniority over seniors in the feeder category and that it is open to the to interpret the 'catch-up' rule in the service conditions governing the promotions [See: para 24]. Thirdly, this Court did not agree with the view expressed by the tribunal [in ] that a harmonious reading of clauses (1) to (4) of Article 16 should mean that a reserved category candidate promoted earlier than his senior general category candidates in the feeder grade shall necessarily be junior in the promoted category to such general category. This Court categorically ruled, vide para 27, that such catch-up principle cannot be said to be implicit in clauses (1) to (4) of Article 16 (emphasis supplied). Lastly, this Court found on facts that for 11 vacancies, 33 candidates were considered and they were all candidates. Not a single candidate belonged to general category. It was argued on behalf of the general candidates that all top grades stood occupied exclusively by the reserved category members, which violated the rule of equality underlying Articles 16(1), 16(4) and 14. This Court opined that the above situation arose on account of faulty implementation of the rule of reservation, as the did not observe the principle that reservation must be in relation to 'posts' and not 'vacancies' and also for applying the roster even after the attainment of the requisite percentage reserved for SCs/STs. In other words, this Court based its decision only on the faulty implementation of the rule by the which the Court ordered to be rectified. ", "The point which we need to emphasize is that the has categorically ruled in that the 'catch-up' rule is not implicit in clauses (1) to (4) of Article 16. Hence, the said rule cannot bind the amending power of the . It is not beyond the amending power of the . ", "In , the controversy which arose for determination was \u0016 whether after the members of for whom specific percentage of posts stood reserved having been promoted against those posts, was it open to the administration to grant consequential seniority against general category posts in the higher grade. The appellant took a clear stand that he had no objection if members of get accelerated promotions. The appellant objected only to the grant of consequential seniority. Relying on the circulars issued by the administration dated 19.7.1969 and 8.9.1969, held that the members of can be promoted against general category posts on basis of seniority. This was challenged in appeal before this Court. The ruling was set aside by this Court on the ground that if the 'catch-up' rule is not applied then the equality principle embodied in Article 16(1) would stand violated. This Court observed that the 'catch-up' rule was a process adopted while making appointments through direct recruitment or promotion because merit cannot be ignored. This Court held that for attracting meritorious candidate a balance has to be struck while making provisions for reservation. It was held that the promotion is an incident of service. It was observed that seniority is one of the important factors in making promotion. It was held that right to equality is to be preserved by preventing reverse discrimination. Further, it was held that the equality principle requires exclusion of extra-weightage of roster-point promotion to a reserved category candidate (emphasis supplied). This Court opined that without 'catch-up' rule giving weightage to earlier promotion secured by roster-point promotee would result in reverse discrimination and would violate equality under Articles 14, 15 and 16. Accordingly, this Court took the view that the seniority between the reserved category candidates and general candidates in the promoted category shall be governed by their panel position. Therefore, this Court set aside the factor of extra-weightage of earlier promotion to a reserved category candidate as violative of Articles 14 and 16(1) of the Constitution. ", "Therefore, in Virpal Singh Chauhan1, this Court has said that the 'catch-up' rule insisted upon by the though not implicit in Articles 16(1) and 16(4), is constitutionally valid as the said practice/process was made to maintain efficiency. On the other hand, in this Court has held that the equality principle excludes the extra-weightage given by the to roster-point promotees as such weightage is against merit and efficiency of the administration and that the Punjab had erred in not taking into account the said merit and efficiency factors. ", "In the case of , three interlocutory applications were filed by State of Punjab for clarification of the judgment of this Court in . The limited question was \u0016 whether there was any conflict between the judgments of this Court in and on one hand and vis-`-vis the judgment of this Court in . The former cases were decided in favour of general candidates whereas latter was a decision against the general candidates. Briefly, the facts for moving the interlocutory applications were as follows. following the law laid down in issued a circular on 28.2.1997 to the effect that the reserved candidates promoted on roster-points could not claim seniority over the senior general candidates promoted later on. after following revised their seniority list and made further promotions of the senior general candidates following the 'catch-up' rule. Therefore, both the judgments were against the reserved candidates. However, in the later judgment of this Court in the case of , another three-Judge bench took the view that under the general rule of service jurisprudence relating to seniority, the date of continuous officiation has to be taken into account and if so, the roster-point promotees were entitled to the benefit of continuous officiation. In , the bench observed that the right to promotion was a statutory right while the rights of the reserved candidates under Article 16(4) and Article 16(4A) were fundamental rights of the reserved candidates and, therefore, the reserved candidates were entitled to the benefit of continuous officiation. ", "Accordingly, in , three points arose for consideration: ", "(i) Can the roster point promotees count their seniority in the promoted category from the date of their continuous officiation vis-`-vis general candidates, who were senior to them in the lower category and who were later promoted to the same level? ", "(ii) Have Virpal1 and (I)2 have been correctly decided and has correctly decided? ", "(iii) Whether the catch-up principles are tenable? ", "At the outset, this stated that it was not concerned with the validity of constitutional amendments and, therefore, it proceeded on the assumption that Article 16(4A) is valid and is not unconstitutional. Basically, the question decided was whether the 'catch- up' principle was tenable in the context of Article 16(4). It was held that the primary purpose of Article 16(4) and Article 16(4A) is to give due representation to certain classes in certain posts keeping in mind Articles 14, 16(1) and 335; that, Articles 14 and 16(1) have prescribed permissive limits to affirmative action by way of reservation under Articles 16(4) and 16(4A) of the Constitution; that, Article 335 is incorporated so that efficiency of administration is not jeopardized and that Articles 14 and 16(1) are closely connected as they deal with individual rights of the persons. They give a positive command to the that there shall be equality of opportunity of all citizens in public employment. It was further held that Article 16(1) flows from Article 14. It was held that the word 'employment' in Article 16(1) is wide enough to include promotions to posts at the stage of initial level of recruitment. It was observed that Article 16(1) provides to every employee otherwise eligible for promotion fundamental right to be considered for promotion. It was held that equal opportunity means the right to be considered for promotion. The right to be considered for promotion was not a statutory right. It was held that Articles 16(4) and 16(4A) did not confer any fundamental right to reservation. That they are only enabling provisions. Accordingly, in the judgment of this in was overruled. However, in the context of balancing of fundamental rights under Article 16(1) and the rights of reserved candidate under Articles 16(4) and 16(4A), this opined that Article 16(1) deals with a fundamental right whereas Articles 16(4) and 16(4A) are only enabling provisions and, therefore, the interests of the reserved classes must be balanced against the interests of other segments of society. As a remedial measure, the held that in matters relating to affirmative action by the , the rights under Articles 14 and 16 are required to be protected and a reasonable balance should be struck so that the affirmative action by the does not lead to reverse discrimination. ", "Reading the above judgments, we are of the view that the concept of 'catch-up' rule and 'consequential seniority' are judicially evolved concepts to control the extent of reservation. The source of these concepts is in service jurisprudence. These concepts cannot be elevated to the status of an axiom like secularism, constitutional sovereignty etc. It cannot be said that by insertion of the concept of 'consequential seniority' the structure of Article 16(1) stands destroyed or abrogated. It cannot be said that 'equality code' under Article 14 , 15 and 16 is violated by deletion of the 'catch-up' rule. These concepts are based on practices. However, such practices cannot be elevated to the status of a constitutional principle so as to be beyond the amending power of the . Principles of service jurisprudence are different from constitutional limitations. Therefore, in our view neither the 'catch-up' rule nor the concept of 'consequential seniority' are implicit in clauses (1) and (4) of Article 16 as correctly held in . ", "Before concluding, we may refer to the judgment of this court in M.G. Badappanavar6. In that case the facts were as follows. Appellants were general candidates. They contended that when they and the reserved candidates were appointed at Level-1 and junior reserved candidates got promoted earlier on the basis of roster- points to Level-2 and again by way of roster-points to Level-3, and when the senior general candidate got promoted to Level-3, then the general candidate would become senior to the reserved candidate at Level-3. At Level-3, the reserved candidate should have been considered along with the senior general candidate for promotion to Level-4. In support of their contention, appellants relied upon the judgment of the Constitution Bench in . The above contentions raised by the appellants were rejected by the tribunal. Therefore, the general candidates came to this Court in appeal. This Court found on facts that the concerned Service Rule did not contemplate computation of seniority in respect of roster promotions. Placing reliance on the judgment of this Court in and in , this court held that roster promotions were meant only for the limited purpose of due representation of backward classes at various levels of service and, therefore, such roster promotions did not confer consequential seniority to the roster-point promotee. In , the circular which gave seniority to the roster-point promotees was held to be violative of Articles 14 and 16. It was further held in that equality is the basic feature of the Constitution and any treatment of equals as unequals or any treatment of unequals as equals violated the basic structure of the Constitution. For this proposition, this Court placed reliance on the judgment in while holding that if creamy layer among backward classes were given some benefits as backward classes, it will amount to equals being treated unequals. Applying the creamy layer test, this Court held that if roster-point promotees are given consequential seniority, it will violate the equality principle which is part of the basic structure of the Constitution and in which event, even Article 16(4A) cannot be of any help to the reserved category candidates. This is the only judgment of this Court delivered by three-Judge bench saying that if roster-point promotees are given the benefit of consequential seniority, it will result in violation of equality principle which is part of the basic structure of the Constitution. Accordingly, the judgment of the tribunal was set aside. ", "The judgment in the case of was mainly based on the judgment in which had taken the view that the departmental circular which gave consequential seniority to the 'roster-point promotee', violated Articles 14 and 16 of the Constitution. In none of the above cases, the question of the validity of the constitutional amendments was involved. , (II)'3 and were essentially concerned with the question of 'weightage'. Whether weightage of earlier accelerated promotion with consequential seniority should be given or not to be given are matters which would fall within the discretion of the appropriate , keeping in mind the backwardness, inadequacy and representation in public employment and overall efficiency of services. The above judgments, therefore, did not touch the questions which are involved in the present case. ", "SCOPE OF THE IMPUGNED AMENDMENTS Before dealing with the scope of the constitutional amendments we need to recap the judgments in and . In the former case the majority held that 50% rule should be applied to each year otherwise it may happen that the open competition channel may get choked if the entire cadre strength is taken as a unit. However in , this court stated that the entire cadre strength should be taken into account to determine whether the reservation up to the quota-limit has been reached. It was clarified that the judgment in was confined to initial appointments and not to promotions. The operation of the roster for filling the cadre strength, by itself, ensure that the reservation remains within the ceiling-limit of 50%. ", "In our view, appropriate Government has to apply the cadre strength as a unit in the operation of the roster in order to ascertain whether a given class/group is adequately represented in the service. The cadre strength as a unit also ensures that upper ceiling-limit of 50% is not violated. Further, roster has to be post- specific and not vacancy based. ", "With these introductory facts, we may examine the scope of the impugned constitutional amendments. ", " in its judgment dated 16.11.92 in stated that reservation of appointments or posts under Article 16(4) is confined to initial appointment and cannot extend to reservation in the matter of promotion. Prior to the judgment in reservation in promotion existed. The Government felt that the judgment of this court in adversely affected the interests of SCs and STs in services, as they have not reached the required level. Therefore, the Government felt that it was necessary to continue the existing policy of providing reservation in promotion confined to SCs and STs alone. We quote hereinbelow Statement of Objects and Reasons with the text of the Constitution (Seventy-Seventh Amendment) Act, 1995 introducing clause (4A) in Article 16 of the Constitution: ", "\"THE CONSTITUTION (SEVENTY-SEVENTH AMENDMENT) ACT, 1995 STATEMENT OF OBJECTS AND REASONS The Scheduled Castes and the Scheduled Tribes have been enjoying the facility of reservation in promotion since 1955. in its judgment dated 16th November, 1992 in the case of , however, observed that reservation of appointments or posts under Article 16(4) of the Constitution is confined to initial appointment and cannot extent to reservation in the matter of promotion. This ruling of will adversely affect the interests of the Scheduled Castes and the Scheduled Tribes. Since the representation of the Scheduled Castes and the Scheduled Tribes in services in the States have not reached the required level, it is necessary to continue the existing dispensation of providing reservation in promotion in the case of the Scheduled Castes and the Scheduled Tribes. In view of the commitment of the Government to protect the interests of the Scheduled Castes and the Scheduled Tribes, the Government have decided to continue the existing policy of reservation in promotion for the Scheduled Castes and the Scheduled Tribes. To carry out this, it is necessary to amend Article 16 of the Constitution by inserting a new clause (4A) in the said Article to provide for reservation in promotion for the Scheduled Castes and the Scheduled Tribes. ", "2. The Bill seeks to achieve the aforesaid object. ", "THE CONSTITUTION (SEVENTY-SEVENTH AMENDMENT) ACT, 1995 [Assented on 17th June, 1995, and came into force on 17.6.1995] An Act further to amend the Constitution of India BE it enacted by in the Forty- sixth Year of the Republic of India as follows:- ", "1. Short title.\u0017- This Act may be called the Constitution (Seventy-seventh Amendment) Act, 1995. ", "2. Amendment of Article 16. \u0017- In Article 16 of the Constitution, after clause (4), the following clause shall be inserted, namely:- \"(4A) Nothing in this Article shall prevent the from making any provision for reservation in matters of promotion to any class or classes of posts in the services under the in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the , are not adequately represented in the services under the .\" ", "The said clause (4A) was inserted after clause (4) of Article 16 to say that nothing in the said Article shall prevent the from making any provision for reservation in matters of promotion to any class(s) of posts in the services under the in favour of SCs and STs which, in the opinion of the s, are not adequately represented in the services under the . ", "Clause (4A) follows the pattern specified in clauses (3) and (4) of Article 16. Clause (4A) of Article 16 emphasizes the opinion of the s in the matter of adequacy of representation. It gives freedom to the in an appropriate case depending upon the ground reality to provide for reservation in matters of promotion to any class or classes of posts in the services. The has to form its opinion on the quantifiable data regarding adequacy of representation. Clause (4A) of Article 16 is an enabling provision. It gives freedom to the to provide for reservation in matters of promotion. Clause (4A) of Article 16 applies only to SCs and STs. The said clause is carved out of Article 16(4). Therefore, clause (4A) will be governed by the two compelling reasons \u0016 \"backwardness\" and \"inadequacy of representation\", as mentioned in Article 16(4). If the said two reasons do not exist then the enabling provision cannot come into force. The can make provision for reservation only if the above two circumstances exist. Further in Ajit Singh (II)3 , this court has held that apart from 'backwardness' and 'inadequacy of representation' the shall also keep in mind 'overall efficiency' ( Article 335 ). Therefore, all the three factors have to be kept in mind by the appropriate by providing for reservation in promotion for SCs and STs. ", "After the Constitution (Seventy-Seventh Amendment) Act, 1995, this court stepped in to balance the conflicting interests. This was in the case of in which it was held that a roster-point promotee getting the benefit of accelerated promotion would not get consequential seniority. As such, consequential seniority constituted additional benefit and, therefore, his seniority will be governed by the panel position. According to the , the decisions in and in the concept of \"catch-up\" rule adversely affected the interests of SCs and STs in the matter of seniority on promotion to the next higher grade. ", "In the circumstances, clause (4A) of Article 16 was once again amended and the benefit of consequential seniority was given in addition to accelerated promotion to the roster-point promotees. Suffice it to state that, the Constitution (Eighty-Fifth Amendment) Act, 2001 was an extension of clause (4A) of Article 16. Therefore, the Constitution (Seventy-Seventh Amendment) Act, 1995 has to be read with the Constitution (Eighty-Fifth Amendment) Act, 2001. ", "We quote hereinbelow Statement of Objects and Reasons with the text of the Constitution (Eighty-Fifth Amendment) Act, 2001: ", "\"THE CONSTITUTION (EIGHTY-FIFTH AMENDMENT) ACT, 2001 STATEMENT OF OBJECTS AND REASONS The Government servants belonging to the Scheduled Castes and the Scheduled Tribes had been enjoying the benefit of consequential seniority on their promotion on the basis of rule of reservation. The judgments of in the case of and (No.1) v. State of Punjab AIR 1996 SC 1189, which led to the issue of the O.M. dated 30th January, 1997, have adversely affected the interest of the Government servants belonging to the Scheduled Castes and Scheduled Tribes category in the matter of seniority on promotion to the next higher grade. This has led to considerable anxiety and representations have also been received from various quarters including Members of to protect the interest of the Government servants belonging to Scheduled Castes and Scheduled Tribes. ", "2. The Government has reviewed the position in the light of views received from various quarters and in order to protect the interest of the Government servants belonging to the Scheduled Castes and Scheduled Tribes, it has been decided to negate the effect of O.M. dated 30th January 1997 immediately. Mere withdrawal of the O.M. dated 30th will not meet the desired purpose and review or revision of seniority of the Government servants and grant of consequential benefits to such Government servants will also be necessary. This will require amendment to Article 16(4A) of the Constitution to provide for consequential seniority in the case of promotion by virtue of rule of reservation. It is also necessary to give retrospective effect to the proposed constitutional amendment to Article 16(4A) with effect from the date of coming into force of Article 16(4A) itself, that is, from the 17th day of June, 1995. ", "3. The Bill seeks to achieve the aforesaid objects. ", "THE CONSTITUTION (EIGHTY-FIFTH AMENDMENT) ACT, 2001 The following Act of Parliament received the assent of the President on the 4th January, 2002 and is published for general information:- ", "An Act further to amend the Constitution of India. ", "BE it enacted by in the Fifty- second Year of the Republic of India as follows:- ", "1. Short title and commencement.- (1) This Act may be called the Constitution (Eighty-fifth Amendment) Act, 2001. ", "(2) It shall be deemed to have come into force on the 17th day of June 1995. ", "2. Amendment of Article 16.- In Article 16 of the Constitution, in clause (4A), for the words \"in matters of promotion to any class\", the words \"in matters of promotion, with consequential seniority, to any class\" shall be substituted.\" ", "Reading the Constitution (Seventy-Seventh Amendment) Act, 1995 with the Constitution (Eighty- Fifth Amendment) Act, 2001, clause (4A) of Article 16 now reads as follows: ", "\"(4A) Nothing in this article shall prevent the from making any provision for reservation in matters of promotion, with consequential seniority, to any class or classes of posts in the services under the in favour of the Scheduled Castes and the Scheduled Tribes which in the opinion of the are not adequately represented in the services under the .\" ", "The question in the present case concerns the width of the amending powers of the . The key issue is \u0016 whether any constitutional limitation mentioned in Article 16(4) and Article 335 stand obliterated by the above constitutional amendments. ", "In R.K. Sabharwal8, the issue was concerning operation of roster system. This court stated that the entire cadre strength should be taken into account to determine whether reservation up to the required limit has been reached. It was held that if the roster is prepared on the basis of the cadre strength, that by itself would ensure that the reservation would remain within the ceiling-limit of 50%. In substance, the court said that in the case of hundred-point roster each post gets marked for the category of candidate to be appointed against it and any subsequent vacancy has to be filled by that category candidate alone (replacement theory). ", "The question which remained in controversy, however, was concerning the rule of 'carry-forward'. In this court held that the number of vacancies to be filled up on the basis of reservation in a year including the 'carry-forward' reservations should in no case exceed the ceiling-limit of 50%. ", "However, the found that total reservation in a year for SCs, STs and OBCs combined together had already reached 49=% and if the judgment of this court in had to be applied it became difficult to fill \"backlog vacancies\". According to the , in some cases the total of the current and backlog vacancies was likely to exceed the ceiling- limit of 50%. Therefore, the inserted clause (4B) after clause (4A) in Article 16 vide the Constitution (Eighty-First Amendment) Act, 2000. ", "By clause (4B) the \"carry-forward\"/\"unfilled vacancies\" of a year is kept out and excluded from the overall ceiling-limit of 50% reservation. The clubbing of the backlog vacancies with the current vacancies stands segregated by the Constitution (Eighty-First Amendment) Act, 2000. Quoted hereinbelow is the Statement of Objects and Reasons with the text of the Constitution (Eighty-First Amendment) Act, 2000: ", "\"THE CONSTITUTION (EIGHTY FIRST AMENDMENT) ACT, 2000 (Assented on 9th June, 2000 and came into force 9.6.2000) STATEMENT OF OBJECTS AND REASONS Prior to August 29, 1997, the vacancies reserved for the Scheduled Castes and the Scheduled Tribes, which could not be filled up by direct recruitment on account of non- availability of the candidates belonging to the Scheduled Castes or the Scheduled Tribes, were treated as \"Backlog Vacancies\". These vacancies were treated as a distinct group and were excluded from the ceiling of fifty per cent reservation. of India in its judgment in the Indra Sawhney versus Union of India held that the number of vacancies to be filled up on the basis of reservations in a year including carried forward reservations should in no case exceed the limit of fifty per cent. As total reservations in a year for the Scheduled Castes, the Scheduled Tribes and the other Backward Classes combined together had already reached forty-nine and a half per cent and the total number of vacancies to be filled up in a year could not exceed fifty per cent., it became difficult to fill the \"Backlog Vacancies\" and to hold Special Recruitment Drives. Therefore, to implement the judgment of , an Official Memorandum dated August 29, 1997 was issued to provide that the fifty per cent limit shall apply to current as well as \"Backlog Vacancies\" and for discontinuation of the Special Recruitment Drive. ", "Due to the adverse effect of the aforesaid order dated August 29, 1997, various organisations including the Members of represented to the central for protecting the interest of the Scheduled castes and the Scheduled Tribes. The , after considering various representations, reviewed the position and has decided to make amendment in the constitution so that the unfilled vacancies of a year, which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) of Article 16 of the Constitution, shall be considered as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty percent, reservation on total number of vacancies of that year. This amendment in the Constitution would enable the to restore the position as was prevalent before august 29, 1997. The Bill seeks to achieve the aforesaid object. ", "THE CONSTITUTION (EIGHTY-FIRST AMENDMENT) ACT, 2000 (Assented on 9th June, 2000 and came into force 9.6.2000) An Act further to amend the Constitution of India. ", "BE it enacted by in the Fifty- first Year of the Republic of India as follows:- ", "1. Short title: This Act may be called the Constitution (Eighty-first Amendment) Act, 2000. ", "2. Amendment of Article 16: In Article 16 of the Constitution, after clause (4A), the following clause shall be inserted, namely: - \"(4B) Nothing in this Article shall prevent the State from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent reservation on total number of vacancies of that year.\" ", "The Constitution (Eighty-First Amendment) Act, 2000 gives, in substance, legislative assent to the judgment of this Court in . Once it is held that each point in the roster indicates a post which on falling vacant has to be filled by the particular category of candidate to be appointed against it and any subsequent vacancy has to be filled by that category candidate alone then the question of clubbing the unfilled vacancies with current vacancies do not arise. Therefore, in effect, Article 16(4B) grants legislative assent to the judgment in . If it is within the power of the to make reservation then whether it is made in one selection or deferred selections, is only a convenient method of implementation as long as it is post based, subject to replacement theory and within the limitations indicated hereinafter. ", "As stated above, clause (4A) of Article 16 is carved out of clause (4) of Article 16. Clause (4A) provides benefit of reservation in promotion only to SCs and STs. In the case of this court held that relaxation of qualifying marks and standards of evaluation in matters of reservation in promotion was not permissible under Article 16(4) in view of Article 335 of the Constitution. This was also the view in . ", "By the Constitution (Eighty-Second Amendment) Act, 2000, a proviso was inserted at the end of Article 335 of the Constitution which reads as under: \"Provided that nothing in this article shall prevent in making of any provision in favour of the members of the Scheduled Castes and the Scheduled Tribes for relaxation in qualifying marks in any examination or lowering the standards of evaluation, for reservation in matters of promotion to any class or classes of services or posts in connection with the affairs of the or of a .\" ", "This proviso was added following the benefit of reservation in promotion conferred upon SCs and STs alone. This proviso was inserted keeping in mind the judgment of this court in which took the view that relaxation in matters of reservation in promotion was not permissible under Article 16(4) in view of the command contained in Article 335. Once a separate category is carved out of clause (4) of Article 16 then that category is being given relaxation in matters of reservation in promotion. The proviso is confined to SCs and STs alone. The said proviso is compatible with the scheme of Article 16(4A). ", "INTRODUCTION OF \"TIME\" FACTOR IN VIEW OF ARTICLE 16(4B): ", "As stated above, Article 16(4B) lifts the 50% cap on carry-over vacancies (backlog vacancies). The ceiling- limit of 50% on current vacancies continues to remain. In working-out the carry-forward rule, two factors are required to be kept in mind, namely, unfilled vacancies and the time factor. This position needs to be explained. On one hand of the spectrum, we have unfilled vacancies; on the other hand, we have a time-spread over number of years over which unfilled vacancies are sought to be carried-over. These two are alternating factors and, therefore, if the ceiling-limit on the carry-over of unfilled vacancies is removed, the other alternative time-factor comes in and in that event, the time-scale has to be imposed in the interest of efficiency in administration as mandated by Article 335. If the time-scale is not kept then posts will continue to remain vacant for years, which would be detrimental to the administration. Therefore, in each case, the appropriate Government will now have to introduce the time-cap depending upon the fact-situation. What is stated hereinabove is borne out by Service Rules in some of the States where the carry- over rule does not extend beyond three years. ", "WHETHER IMPUGNED CONSTITUTIONAL AMENDMENTS VIOLATES THE PRINCIPLE OF BASIC STRUCTURE: ", "The key question which arises in the matter of the challenge to the constitutional validity of the impugned amending Acts is - whether the constitutional limitations on the amending power of the are obliterated by the impugned amendments so as to violate the basic structure of the Constitution. ", "In the matter of application of the principle of basic structure, twin tests have to be satisfied, namely, the 'width test' and the test of 'identity'. As stated hereinabove, the concept of the 'catch-up' rule and 'consequential seniority' are not constitutional requirements. They are not implicit in clauses (1) and (4) of Article 16. They are not constitutional limitations. They are concepts derived from service jurisprudence. They are not constitutional principles. They are not axioms like, secularism, federalism etc. Obliteration of these concepts or insertion of these concepts do not change the equality code indicated by Articles 14, 15 and 16 of the Constitution. Clause (1) of Article 16 cannot prevent the from taking cognizance of the compelling interests of backward classes in the society. Clauses (1) and (4) of Article 16 are restatements of the principle of equality under Article 14. Clause (4) of Article 16 refers to affirmative action by way of reservation. Clause (4) of Article 16 , however, states that the appropriate Government is free to provide for reservation in cases where it is satisfied on the basis of quantifiable data that backward class is inadequately represented in the services. Therefore, in every case where the decides to provide for reservation there must exist two circumstances, namely, 'backwardness' and 'inadequacy of representation'. As stated above \u0016 equity, justice and efficiency are variable factors. These factors are context-specific. There is no fixed yardstick to identify and measure these three factors, it will depend on the facts and circumstances of each case. These are the limitations on the mode of the exercise of power by the . None of these limitations have been removed by the impugned amendments. If the concerned fails to identify and measure backwardness, inadequacy and overall administrative efficiency then in that event the provision for reservation would be invalid. These amendments do not alter the structure of Articles 14, 15 and 16 (equity code). The parameters mentioned in Article 16(4) are retained. Clause (4A) is derived from clause (4) of Article 16. Clause (4A) is confined to SCs and STs alone. Therefore, the present case does not change the identity of the Constitution. The word \"amendment\" connotes change. The question is \u0016 whether the impugned amendments discard the original constitution. It was vehemently urged on behalf of the petitioners that the ment of Objects and Reasons indicate that the impugned amendments have been promulgated by the to overrule the decision of this court. We do not find any merit in this argument. Under Article 141 of the Constitution the pronouncement of this court is the law of the land. The judgments of this court in , I)2 , II)3 and , were judgments delivered by this court which enunciated the law of the land. It is that law which is sought to be changed by the impugned constitutional amendments. The impugned constitutional amendments are enabling in nature. They leave it to the s to provide for reservation. It is well- settled that the while enacting a law does not provide content to the \"right\". The content is provided by the judgments of . If the appropriate Government enacts a law providing for reservation without keeping in mind the parameters in Article 16(4) and Article 335 then this court will certainly set aside and strike down such legislation. Applying the \"width test\", we do not find obliteration of any of the constitutional limitations. Applying the test of \"identity\", we do not find any alteration in the existing structure of the equality code. As stated above, none of the axioms like secularism, federalism etc. which are overarching principles have been violated by the impugned constitutional amendments. Equality has two facets \u0016 \"formal equality\" and \"proportional equality\". Proportional equality is equality \"in fact\" whereas formal equality is equality \"in law\". Formal equality exists in the Rule of Law. In the case of proportional equality the is expected to take affirmative steps in favour of disadvantaged sections of the society within the framework of liberal democracy. Egalitarian equality is proportional equality. ", "The criterion for determining the validity of a law is the competence of the law-making authority. The competence of the law-making authority would depend on the ambit of the legislative power, and the limitations imposed thereon as also the limitations on mode of exercise of the power. Though the amending power in Constitution is in the nature of a constituent power and differs in content from the legislative power, the limitations imposed on the constituent power may be substantive as well as procedural. Substantive limitations are those which restrict the field of the exercise of the amending power. Procedural limitations on the other hand are those which impose restrictions with regard to the mode of exercise of the amending power. Both these limitations touch and affect the constituent power itself, disregard of which invalidates its exercise. [See: ]. ", "Applying the above tests to the present case, there is no violation of the basic structure by any of the impugned amendments, including the Constitution (Eighty-Second) Amendment Act, 2000. The constitutional limitation under Article 335 is relaxed and not obliterated. As stated above, be it reservation or evaluation, excessiveness in either would result in violation of the constitutional mandate. This exercise, however, will depend on facts of each case. In our view, the field of exercise of the amending power is retained by the impugned amendments, as the impugned amendments have introduced merely enabling provisions because, as stated above, merit, efficiency, backwardness and inadequacy cannot be identified and measured in vacuum. Moreover, Article 16(4A) and Article 16(4B) fall in the pattern of Article 16(4) and as long as the parameters mentioned in those articles are complied-with by the States, the provision of reservation cannot be faulted. Articles 16(4A) and 16(4B) are classifications within the principle of equality under Article 16(4). ", "In conclusion, we may quote the words of : ", "\"ignoring our commitments may make us rationale but not free. It cannot make us maintain our constitutional identity\". ", "ROLE OF ENABLING PROVISIONS IN THE CONTEXT OF ARTICLE 14: ", "The gravamen of Article 14 is equality of treatment. Article 14 confers a personal right by enacting a prohibition which is absolute. By judicial decisions, the doctrine of classification is read into Article 14. Equality of treatment under Article 14 is an objective test. It is not the test of intention. Therefore, the basic principle underlying Article 14 is that the law must operate equally on all persons under like circumstances. [Emphasis added]. Every discretionary power is not necessarily discriminatory. According to the Constitutional Law of India, by , 4th Edn. 546, equality is not violated by mere conferment of discretionary power. It is violated by arbitrary exercise by those on whom it is conferred. This is the theory of 'guided power'. This theory is based on the assumption that in the event of arbitrary exercise by those on whom the power is conferred would be corrected by the . This is the basic principle behind the enabling provisions which are incorporated in Articles 16(4A) and 16(4B). Enabling provisions are permissive in nature. They are enacted to balance equality with positive discrimination. The constitutional law is the law of evolving concepts. Some of them are generic others have to be identified and valued. The enabling provisions deal with the concept, which has to be identified and valued as in the case of access vis-`-vis efficiency which depends on the fact- situation only and not abstract principle of equality in Article 14 as spelt out in detail in Articles 15 and 16. Equality before the law, guaranteed by the first part of Article 14 , is a negative concept while the second part is a positive concept which is enough to validate equalizing measures depending upon the fact-situation. ", "It is important to bear in mind the nature of constitutional amendments. They are curative by nature. Article 16(4) provides for reservation for backward classes in cases of inadequate representation in public employment. Article 16(4) is enacted as a remedy for the past historical discriminations against a social class. The object in enacting the enabling provisions like Articles 16(4), 16(4A) and 16(4B) is that the is empowered to identify and recognize the compelling interests. If the has quantifiable data to show backwardness and inadequacy then the can make reservations in promotions keeping in mind maintenance of efficiency which is held to be a constitutional limitation on the discretion of the in making reservation as indicated by Article 335. As stated above, the concepts of efficiency, backwardness, inadequacy of representation are required to be identified and measured. That exercise depends on availability of data. That exercise depends on numerous factors. It is for this reason that enabling provisions are required to be made because each competing claim seeks to achieve certain goals. How best one should optimize these conflicting claims can only be done by the administration in the context of local prevailing conditions in public employment. This is amply demonstrated by the various decisions of this discussed hereinabove. Therefore, there is a basic difference between 'equality in law' and 'equality in fact' (See: 'Affirmative Action' by ). If Articles 16(4A) and 16(4B) flow from Article 16(4) and if Article 16(4) is an enabling provision then Articles 16(4A) and 16(4B) are also enabling provisions. As long as the boundaries mentioned in Article 16(4 ), namely, backwardness, inadequacy and efficiency of administration are retained in Articles 16(4A) and 16(4B) as controlling factors, we cannot attribute constitutional invalidity to these enabling provisions. However, when the fails to identify and implement the controlling factors then excessiveness comes in, which is to be decided on the facts of each case. In a given case, where excessiveness results in reverse discrimination, this has to examine individual cases and decide the matter in accordance with law. This is the theory of 'guided power'. We may once again repeat that equality is not violated by mere conferment of power but it is breached by arbitrary exercise of the power conferred. ", "APPLICATION OF DOCTRINE OF \"GUIDED POWER\" \u0016 ARTICLE 335 : ", "Applying the above tests to the proviso to Article 335 inserted by the Constitution (Eighty-Second Amendment) Act, 2000, we find that the said proviso has a nexus with Articles 16(4A) and 16(4B). Efficiency in administration is held to be a constitutional limitation on the discretion vested in the to provide for reservation in public employment. Under the proviso to Article 335 , it is stated that nothing in Article 335 shall prevent the to relax qualifying marks or standards of evaluation for reservation in promotion. This proviso is also confined only to members of SCs and STs. This proviso is also conferring discretionary power on the to relax qualifying marks or standards of evaluation. Therefore, the question before us is \u0016 whether the could be empowered to relax qualifying marks or standards for reservation in matters of promotion. In our view, even after insertion of this proviso, the limitation of overall efficiency in Article 335 is not obliterated. Reason is that \"efficiency\" is variable factor. It is for the concerned to decide in a given case, whether the overall efficiency of the system is affected by such relaxation. If the relaxation is so excessive that it ceases to be qualifying marks then certainly in a given case, as in the past, the is free not to relax such standards. In other cases, the may evolve a mechanism under which efficiency, equity and justice, all three variables, could be accommodated. Moreover, Article 335 is to be read with Article 46 which provides that the shall promote with special care the educational and economic interests of the weaker sections of the people and in particular of the scheduled castes and scheduled tribes and shall protect them from social injustice. Therefore, where the finds compelling interests of backwardness and inadequacy, it may relax the qualifying marks for SCs/STs. These compelling interests however have to be identified by weighty and comparable data. ", "In conclusion, we reiterate that the object behind the impugned Constitutional amendments is to confer discretion on the to make reservations for SCs/STs in promotions subject to the circumstances and the constitutional limitations indicated above. ", "TESTS TO JUDGE THE VALIDITY OF THE IMPUGNED STATE ACTS: ", "As stated above, the boundaries of the width of the power, namely, the ceiling-limit of 50% (the numerical benchmark), the principle of creamy layer, the compelling reasons, namely, backwardness, inadequacy of representation and the overall administrative efficiency are not obliterated by the impugned amendments. At the appropriate time, we have to consider the law as enacted by various s providing for reservation if challenged. At that time we have to see whether limitations on the exercise of power are violated. The is free to exercise its discretion of providing for reservation subject to limitation, namely, that there must exist compelling reasons of backwardness, inadequacy of representation in a class of post(s) keeping in mind the overall administrative efficiency. It is made clear that even if the has reasons to make reservation, as stated above, if the impugned law violates any of the above substantive limits on the width of the power the same would be liable to be set aside. ", "Are the impugned amendments making an inroad into the balance struck by the judgment of this court in the case of : ", "Petitioners submitted that equality has been recognized to be a basic feature of our Constitution. To preserve equality, a balance was struck in so as to ensure that the basic structure of Articles 14, 15 and 16 remains intact and at the same time social upliftment, as envisaged by the Constitution, stood achieved. In order to balance and structure the equality, a ceiling-limit on reservation was fixed at 50% of the cadre strength, reservation was confined to initial recruitment and was not extended to promotion. Petitioners further submitted that in , vide para 829 this Court has held that reservation in promotion was not sustainable in principle. Accordingly, petitioners submitted that the impugned constitutional amendments makes a serious inroad into the said balance struck in the case of which protected equality as a basic feature of our Constitution. We quote hereinbelow paragraph 829 of the majority judgment in the case of which reads as follows: ", "\"829. It is true that Rangachari15 has been the law for more than 30 years and that attempts to re-open the issue were repelled in . It may equally be true that on the basis of that decision, reservation may have been provided in the matter of promotion in some of the Central and services but we are convinced that the majority opinion in Rangachari15, to the extent it holds, that Article 16(4) permits reservation even in the matter of promotion, is not sustainable in principle and ought to be departed from. However, taking into consideration all the circumstances, we direct that our decision on this question shall operate only prospectively and shall not affect promotions already made, whether on temporary, officiating or regular/permanent basis. It is further directed that wherever reservations are already provided in the matter of promotion - be it or Services, or for that matter services under any corporation, authority or body falling under the definition of '' in Article 12- such reservations shall continue in operation for a period of five years from this day. Within this period, it would be open to the appropriate authorities to revise modify or re-issue the relevant Rules to ensure the achievement of the objective of Article 16(4). If any authority thinks that for ensuring adequate representation of 'backward class of citizens' in any service, class or category, it is necessary to provide for direct recruitment therein, it shall be open to it do so. ", "(emphasis supplied) What are the outer boundaries of the amendment process in the context of Article 16 is the question which needs to be answered. Equality is the basic feature of the Constitution as held in . The content of Article 14 was originally interpreted by this Court as a concept of equality confined to the aspects of discrimination and classification. It is only after the rulings of this Court in , that the content of Article 14 got expanded conceptually so as to comprehend the doctrine of promissory estoppel, non arbitrariness, compliance with rules of natural justice, eschewing irrationality etc. There is a difference between \"formal equality\" and \"egalitarian equality\". At one point of time Article 16(4) was read by as an exception to Article 16(1). That controversy got settled in . The words \"nothing in this Article\" in Article 16(4) represents a legal device allowing positive discrimination in favour of a class. Therefore, Article 16(4) relates to \"a class apart\". Article 16(4 ), therefore, creates a field which enables a to provide for reservation provided there exists backwardness of a class and inadequacy of representation in employment. These are compelling reasons. They do not exist in Article 16(1). It is only when these reasons are satisfied that a gets the power to provide for reservation in matters of employment. Therefore, Article 16(1) and Article 16(4) operate in different fields. Backwardness and inadequacy of representation, therefore, operate as justifications in the sense that the gets the power to make reservation only if backwardness and inadequacy of representation exist. These factors are not obliterated by the impugned amendments. ", "The question still remains as to whether any of the constitutional limitations are obliterated by way of the impugned constitutional amendments. By way of the impugned amendments Articles 16(4A) and 16(4B) have been introduced. ", "In the equality which was protected by the rule of 50%, was by balancing the rights of the general category vis-`-vis the rights of BC en bloc consisting of , and ST. On the other hand, in the present case the question which we are required to answer is: whether within the egalitarian equality, indicated by Article 16(4 ), the sub-classification in favour of and ST is in principle constitutionally valid. Article 16(4A) is inspired by the observations in vide para 802 and 803 in which this Court has unequivocally observed that in order to avoid lumping of , and ST which would make take away all the vacancies leaving and ST high and dry, the concerned was entitled to categorise and sub- classify s and STs on one hand vis-`-vis on the other hand. We quote hereinbelow paragraphs 802 and 803 of the judgment in : ", "\"802. We are of the opinion that there is no constitutional or legal bar to a categorizing the backward classes as backward and more backward. We are not saying that it ought to be done. We are concerned with the question if a makes such a categorisation, whether it would be invalid? We think not. Let us take the criteria evolved by . Any caste, group or class which scored eleven or more points was treated as a backward class. Now, it is not as if all the several thousands of castes/groups/classes scored identical points. There may be some castes/groups/classes which have scored points between 20 to 22 and there may be some who have scored points between eleven and thirteen. It cannot reasonably be denied that there is no difference between these two sets of castes/groups/classes. To give an illustration, take two occupational groups viz., gold-smiths and vaddes (traditional stone-cutters in Andhra Pradesh) both included within Other Backward Classes. None can deny that gold- smiths are far less backward than vaddes. If both of them are grouped together and reservation provided, the inevitably result would be that gold-smiths would take away all the reserved posts leaving none for vaddes. In such a situation, a may think it advisable to make a categorisation even among other backward classes so as to ensure that the more backward among the backward classes obtain the benefits intended for them. Where to draw the line and how to effect the sub-classification is, however, a matter for the and the - and so long as it is reasonably done, the may not intervene. In this connection, reference may be made to the categorisation obtaining in Andhra Pradesh. The Backward Classes have been divided into four categories. Group-A comprises \"Aboriginal tribes, Vimukta jatis, Nomadic and semi-nomadic tribes etc.\". Group-B comprises professional group like tappers, weavers, carpenters, ironsmiths, goldsmiths, kamsalins etc. Group-C pertains to \"Scheduled Castes converts to Christianity and their progeny\", while Group-D comprises all other classes/communities/groups, which are not included in groups A, B and C. The 25% vacancies reserved for backward classes are sub-divided between them in proportion to their respective population. This categorisation was justified in [1972] 3 S.C.R. 247 at ", "286. This is merely to show that even among backward classes, there can be a sub- ", "classification on a reasonable basis. ", "(emphasis supplied) \"803. There is another way of looking at this issue. Article 16(4) recognises only one class viz., \"backward class of citizens\". It does not speak separately of Scheduled Castes and Scheduled Tribes, as does Article 15(4). Even so, it is beyond controversy that Scheduled Castes and Scheduled Tribes are also included in the expression \"backward class of citizens\" and that separate reservations can be provided in their favour. It is a well-accepted phenomenon throughout the country. What is the logic behind it? It is that if Scheduled Tribes, Scheduled Castes and Other Backward Classes are lumped together, O.B.Cs. will take away all the vacancies leaving Scheduled Castes and Scheduled Tribes high and dry. The same logic also warrants categorisation as between more backward and backward. We do not mean to say - we may reiterate - that this should be done. We are only saying that if a chooses to do it, it is not impermissible in law.\" ", "(emphasis supplied) Therefore, while judging the width and the ambit of Article 16(4A) we must ascertain whether such sub- classification is permissible under the Constitution. The sub-classification between \"OBC\" on one hand and \"SC and ST\" on the other hand is held to be constitutionally permissible in . In the said judgment it has been held that the State could make such sub- classification between SCs and STs vis-`-vis OBC. It refers to sub-classification within the egalitarian equality (vide paras 802 and 803). Therefore, Article 16(4A) follows the line suggested by this Court in . In on the other hand vide para 829 this Court has struck a balance between formal equality and egalitarian equality by laying down the rule of 50% (ceiling-limit) for the entire BC as \"a class apart\" vis-`-vis GC. Therefore, in our view, equality as a concept is retained even under Article 16(4A) which is carved out of Article 16(4). ", "As stated above, Article 14 enables classification. A classification must be founded on intelligible differential which distinguishes those that are grouped together from others. The differential must have a rational relation to the object sought to be achieved by the law under challenge. In an opinion was expressed by this Court vide para 802 that there is no constitutional or legal bar to making of classification. Article 16(4B) is also an enabling provision. It seeks to make classification on the basis of the differential between current vacancies and carry-forward vacancies. In the case of Article 16(4B) we must keep in mind that following the judgment in the concept of post-based roster is introduced. Consequently, specific slots for , and ST as well as GC have to be maintained in the roster. For want of candidate in a particular category the post may remain unfilled. Nonetheless, that slot has to be filled only by the specified category. Therefore, by Article 16(4B) a classification is made between current vacancies on one hand and carry-forward/backlog vacancies on the other hand. Article 16(4B) is a direct consequence of the judgment of this court in by which the concept of post-based roster is introduced. Therefore, in our view Articles 16(4A) and 16(4B) form a composite part of the scheme envisaged. Therefore, in our view Articles 16(4), 16(4A) and 16(4B) together form part of the same scheme. As stated above, Articles 16(4A) and 16(4B) are both inspired by observations of in and . They have nexus with Articles 17 and 46 of the Constitution. Therefore, we uphold the classification envisaged by Articles 16(4A) and 16(4B). The impugned constitutional amendments, therefore, do not obliterate equality. ", "The test for judging the width of the power and the test for adjudicating the exercise of power by the concerned are two different tests which warrant two different judicial approaches. In the present case, as stated above, we are required to test the width of the power under the impugned amendments. Therefore, we have to apply \"the width test\". In applying \"the width test\" we have to see whether the impugned amendments obliterate the constitutional limitations mentioned in Article 16(4 ), namely, backwardness and inadequacy of representation. As stated above, these limitations are not obliterated by the impugned amendments. However, the question still remains whether the concerned has identified and valued the circumstances justifying it to make reservation. This question has to be decided case- wise. There are numerous petitions pending in this in which reservations made under enactments have been challenged as excessive. The extent of reservation has to be decided on facts of each case. The judgment in does not deal with constitutional amendments. In our present judgment, we are upholding the validity of the constitutional amendments subject to the limitations. Therefore, in each case the has got to be satisfied that the has exercised its opinion in making reservations in promotions for SCs and STs and for which the concerned will have to place before the the requisite quantifiable data in each case and satisfy the that such reservations became necessary on account of inadequacy of representation of SCs/ STs in a particular class or classes of posts without affecting general efficiency of service as mandated under Article 335 of the Constitution. ", "The constitutional principle of equality is inherent in the Rule of Law. However, its reach is limited because its primary concern is not with the content of the law but with its enforcement and application. The Rule of Law is satisfied when laws are applied or enforced equally, that is, evenhandedly, free of bias and without irrational distinction. The concept of equality allows differential treatment but it prevents distinctions that are not properly justified. Justification needs each case to be decided on case to case basis. ", "Existence of power cannot be denied on the ground that it is likely to be abused. As against this, it has been held vide para 650 of Kesavananda Bharati13 that where the nature of the power granted by the Constitution is in doubt then the has to take into account the consequences that might ensue by interpreting the same as an unlimited power. However, in the present case there is neither any dispute about the existence of the power nor is there any dispute about the nature of the power of amendment. The issue involved in the present case is concerning the width of the power. The power to amend is an enumerated power in the Constitution and, therefore, its limitations, if any, must be found in the Constitution itself. The concept of reservation in Article 16(4) is hedged by three constitutional requirements, namely, backwardness of a class, inadequacy of representation in public employment of that class and overall efficiency of the administration. These requirements are not obliterated by the impugned constitutional amendments. Reservation is not in issue. What is in issue is the extent of reservation. If the extent of reservation is excessive then it makes an inroad into the principle of equality in Article 16(1). Extent of reservation, as stated above, will depend on the facts of each case. Backwardness and inadequacy of representation are compelling reasons for the State Governments to provide representation in public employment. Therefore, if in a given case the court finds excessive reservation under the State enactment then such an enactment would be liable to be struck down since it would amount to derogation of the above constitutional requirements. ", "At this stage, one aspect needs to be mentioned. Social justice is concerned with the distribution of benefits and burdens. The basis of distribution is the area of conflict between rights, needs and means. These three criteria can be put under two concepts of equality, namely, \"formal equality\" and \"proportional equality\". Formal equality means that law treats everyone equal. Concept of egalitarian equality is the concept of proportional equality and it expects the States to take affirmative action in favour of disadvantaged sections of society within the framework of democratic polity. In all the judges except , held that the \"means test\" should be adopted to exclude the creamy layer from the protected group earmarked for reservation. In this has, therefore, accepted caste as determinant of backwardness and yet it has struck a balance with the principle of secularism which is the basic feature of the Constitution by bringing in the concept of creamy layer. Views have often been expressed in this that caste should not be the determinant of backwardness and that the economic criteria alone should be the determinant of backwardness. As stated above, we are bound by the decision in . The question as to the \"determinant\" of backwardness cannot be gone into by us in view of the binding decision. In addition to the above requirements this in has evolved numerical benckmarks like ceiling-limit of 50% based on post-specific roster coupled with the concept of replacement to provide immunity against the charge of discrimination. ", "CONCLUSION: ", "The impugned constitutional amendments by which Articles 16(4A) and 16(4B) have been inserted flow from Article 16(4). They do not alter the structure of Article 16(4). They retain the controlling factors or the compelling reasons, namely, backwardness and inadequacy of representation which enables the s to provide for reservation keeping in mind the overall efficiency of the administration under Article 335. These impugned amendments are confined only to SCs and STs. They do not obliterate any of the constitutional requirements, namely, ceiling-limit of 50% (quantitative limitation), the concept of creamy layer (qualitative exclusion), the sub-classification between OBC on one hand and SCs and STs on the other hand as held in , the concept of post-based Roster with in-built concept of replacement as held in . ", "We reiterate that the ceiling-limit of 50%, the concept of creamy layer and the compelling reasons, namely, backwardness, inadequacy of representation and overall administrative efficiency are all constitutional requirements without which the structure of equality of opportunity in Article 16 would collapse. ", "However, in this case, as stated, the main issue concerns the \"extent of reservation\". In this regard the concerned will have to show in each case the existence of the compelling reasons, namely, backwardness, inadequacy of representation and overall administrative efficiency before making provision for reservation. As stated above, the impugned provision is an enabling provision. The is not bound to make reservation for SC/ST in matter of promotions. However if they wish to exercise their discretion and make such provision, the has to collect quantifiable data showing backwardness of the class and inadequacy of representation of that class in public employment in addition to compliance of Article 335. It is made clear that even if the has compelling reasons, as stated above, the will have to see that its reservation provision does not lead to excessiveness so as to breach the ceiling-limit of 50% or obliterate the creamy layer or extend the reservation indefinitely. ", "Subject to above, we uphold the constitutional validity of the Constitution (Seventy-Seventh Amendment) Act, 1995, the Constitution (Eighty-First Amendment) Act, 2000, the Constitution (Eighty-Second Amendment) Act, 2000 and the Constitution (Eighty-Fifth Amendment) Act, 2001. ", "We have not examined the validity of individual enactments of appropriate States and that question will be gone into in individual writ petition by the appropriate bench in accordance with law laid down by us in the present case. ", "Reference is answered accordingly."], "relevant_candidates": ["0000113526", "0000151907", "0000243002", "0000257876", "0000599701", "0000861069", "0000936707", "0000994451", "0001111529", "0001186368", "0001361237", "0001363234", "0001466728", "0001686885", "0001766147", "0001857950", "0001871744", "0001939993"]} {"id": "0000107104", "text": ["ORDER (1) These are two connected revisions preferred against the orders made by the learned Ex-Officio First Class Magistrate, , in M. C. Nos. 36 of 1957 and 2 of 1958 and the opinion of the learned Subordinate Judge of Tirunelveli in C. M. P. 2 of 1958. ", "(2) The facts are short: There has been a land dispute regarding possession between and . The Ex-officio First Class Magistrate, . on account of the complicated questions of law, which arose, proceeded under S. 146(1) Crl. P. C. This section has been newly introduced and states that if the magistrate is of opinion that none of the parties was them in such possession, or is unable to decide as to which of them was then in such possession, of the subject of dispute, he may attach it and draw up a statement of the facts of the case and forward the record of the proceeding to a civil court of competent jurisdiction to decide the question whether any and which of the parties was in possession of the subject of dispute at the date of the order as explained in sub-s. (4) of S. 145, and he shall direct the parties to appear before the civil court on a date to be fixed by him. ", "In this case that procedure was adopted and the learned subordinate, on receipt of the reference perused the evidence on record and took further evidence produced by the parties respectively, considered the effect of all such evidence, and decided the question of possession so referred to it. The learned Subordinate Judge has sent his findings to the magistrate. The magistrate on receipt of these proceedings has disposed of the matter under S. 145 in conformity with the decision of the civil court. That decision was that the counter petitioner was possession of the lands in dispute on the relevant date and which conclusion was on a consideration of all the circumstance of the case and after preferring the affidavits fired on behalf of the counter petitioner to those of the petitioner. ", "(3) Two applications are now preferred, first against the order of the magistrate dismissing the petition and secondly against the opinion of the learned Subordinate Judge transmitted to the magistrate and in conformity of which the magistrate has decided the case. ", "(4) So far as the merits of the case are concerned, the revision petitioner has no case. On acceptable and relevant evidence it has been found that the counter petitioner was in possession of the lands in dispute on the relevant date prescribed under Ss. 145 and 146 Crl. P. C. This finding is of course subject to adjudication in the civil court. I am unable to see how the conclusion set out can be held to be not in accordance with the evidence in the case. Therefore, the dismissal of the petition was quite proper. ", "(5) In regard to the revision which is sought to be preferred against the proceedings of the learned Subordinate Judge, one has only to look at S. 146(1)(d), which lays down that no appeal shall lie from any finding of the civil court given on a reference under this section nor shall any review or revision of any such finding be allowed. In other words, the parliament in the exercise of its undoubted and unquestionable power has limited the revisional powers of this court to this extent, viz., that the case of findings given under S. 146 Crl. P. C. no revision shall lie and has thereby provided against mischievous consequences and duplicated wasteful court work (6) This point also is concluded by authority--vide , . ", "(7) This restriction is but proper because the findings get merged in the decision of the magistrate and all the grounds that can be urged against the finding can be urged against the finalised decision and if there is no such restriction there will be multiplicity of proceedings and possible conflicting revisional orders reducing the whole thing to an absurdity. This wise restriction has been conceived in the best public interests and involves no invasion of the fundamental right or diminution of the paternal and supervisory jurisdiction of this court. ", "(8) This provision is akin to and an improvement on the old system of the Hindu Pandits and Muslim Muftis who furnished opinions to the courts expounding the Hindu and Muslim law applicable to the cases referred to them and courts gave decisions in accordance with those expositions. (For an interesting discussion of this topic see Rt. Hon'ble Sir , sometime , Background to Indian law, () pages 4-5). ", "(9) The objective of as to harmoniously combine the intimate revenue knowledge of the Executive magistrate in actual touch with the locality, with the sound legal knowledge of the fundamental principles of jurisprudence regarding title and possession by the munsif. ", "(10) Therefore, this civil revision petition also has got to be dismisseAd and it is hereby dismissed. ", "(11) Revision dismissed."], "relevant_candidates": ["0001871332"]} {"id": "0000107780", "text": [", J. ", "1. The above writ petition has been filed for the issue of a writ of certiorari to call for and quash the proceedings of the third respondent in A.No. 79/83 (CBE) (D), dated 27.12.1983. ", "2. The petitioners are manufacturers of straight length pipes (bevelled at ends), water well casing pipes, pipe bends, rolled and welded pipe work, boiler tubes, etc., and were assessed on the file of the Superintendent of , Hosur. It is claimed that under a mistake of law, excise duty was paid on those goods under tariff item (T.I.) 68 of the Tariff. The petitioners also claimed that they buy the duty-paid pipes and merely bend or process the pipes and coming to know of the orders of , New Delhi dated 28.2.1981 issued in the matter of M/s. Stewards and , Calcutta, the petitioners sought for reclassification of their products under T.I. 26AA (IV) of the Tariff. On an application submitted on 22.8.1983, it is claimed that revised classification was approved by the first respondent. Thereupon, the petitioners filed an application on 26.8.1983 claiming refund of a sum of Rs. 6,19,444.65 after adjusting a sum of Rs. 44,732.03 on exports, which according to the petitioners was erroneously paid for the period from 12.5.1981 to 28.8.1983. ", "3. The second respondent, before whom the said application for refund was filed, issued a notice dated 19.9.1983 proposing to reject the claim as time barred under Section 11-B(1) of the Central Excises and Salt Act , 1944 and the petitioners submitted their objections on 30.9.1983 contending that the commodity manufactured by them was not excisable since the -pipes had already suffered duty and not only there cannot be any fresh duty, but the duty paid was under a total mistake and consequently, no period of limitation will apply to make their claim. The petitioners claim to have placed reliance upon the decision in . (1975 ELT J 154) and other decisions in support of their stand. The second respondent by his proceedings dated 12.10.1983 ordered the refund of Rs. 3,01,915.73 in full settlement of the claim made by the petitioners on 26.8.1983. ", "4. While matters stood thus, the petitioners received a\" notice from the third respondent that an appeal had been filed against the refund granted by the second respondent by the Assistant Collector of (Audit), Coimbatore as per the authorisation letter from the Collector of , Coimbatore. The petitioners submitted their objections to the appeal as required by the third respondent, contending that the second respondent had granted refund applying the ratio of the decision' of in (83 ELT 1495) and that the department had not challenged the revised classification list approved by the second respondent and since the duty was paid under a mistake of law, the proceedings now instituted are not maintainable at the instance of the Collector of , Coimbatore. The third respondent also called for Memo of Cross Objections by his notice dated 17.11.1983 to be submitted within 30 days. Thereupon, under the impugned order dated 27.12.1983, the third respondent set aside the communication of the third respondent dated 12.10.1983 and further directed that the petitioners should re-credit the amount within 7 days from the receipt of the said order made an appeal. The third respondent has exercised powers under Section 11-B and particularly placed reliance on Section 11-B (%) of the Act. Hence, the above writ petition. ", "5. In the affidavit filed in support of the above writ petition, it is contended that under Section 35-E of the Act, the Collector of Central Excise has to direct the very adjudicating authority whose decision or order calls for determination, to apply to the Collector (Appeals) and does not empower any other authority to file an appeal and consequently, the appeal filed by the different authority than the adjudicating authority is non est. It is also contended that the application can be only to seek a reference and cannot be treated as an outright revision/appeal to set aside an order of the adjudicating authority and the third respondent has only power to decide the issue and remit the matter with his opinion to the adjudicating authority to pass consequential orders and cannot by himself set aside the order. It is also contended in the said affidavit that the appellate authority exercising powers Under Section 35-A of the Act can merely decide an issue and refer a case to the adjudicating authority and thereafter the procedure contemplated under Section 11-A of the Act has to be followed. Before calling for repayment or duty allegedly short-levied or erroneously refunded and the absence of service of any such show-cause notice by any of the respondents vitiates the impugned order. It is the further contention of the petitioners that the amount was originally paid and collected under a mistake which was common to the petitioners as well as the department, that when the error was pointed out, the goods were reclassified by an order dated 24.8.1983 for future clearances and the inevitable consequence of the approval of the reclassification was that the goods were never taxable under T.I. 68 of the Central Excise Tariff and since the other assessees similarly situated had not remitted duty during the period between 12.5.1981 and 28.8.1983, the collection from the petitioners alone is discriminatory and violative of Article 14 of the Constitution of India and consequently, the bar of limitation stipulated under Section 11-B(1) of the Act and the bar of jurisdiction stipulated in Section 11-B(1) and (5) cannot be put against the petitioners. ", "6. The respondents have filed a counter affidavit contending that the petitioners are manufacturers of elbows, reducers, tees which are pipe fittings in their factory at Hosur, that on the basis of the classification list submitted by the petitioners those goods were classified under tariff item 68 and accordingly, the petitioners were paying duty and that when subsequently the petitioners sought for reclassification of their products under tariff item 26 AA (iv) by filing a revised classification list on 22.8.1983, the claim was considered and accepted by the Assistant Collector, , Hosur. While accepting the position that thereafter the petitioners filed a refund claim for the period between 12.5.1981 to 26.8.1983, it is contended that there was no protest or objection from the petitioners for classification of their products under T.I. 68 till 22.8.1983 when the revised classification list was filed, and that, therefore, any claim for refund of any duty of excise has to be considered in the context of the provisions contained under Section 11-B of the s and Salt Act , 1944. Consequently, it is also contended that the refund claim should have been made within a period of six months from the relevant date, namely, the date of payment of duty and inasmuch as the refund claim was received by the second respondent only on 26.8.1983 a portion of the claim pertaining to the period from 12.5.1981 to 16.2.1983 was found to be inadmissible in view of the bar of limitation prescribed under Section 11-B of the Act and it is only on that account, a sum of Rs. 3,17,528.92 pertaining to the period from 27.2.1983 to 26.8.1983 alone was sanctioned for refund to the petitioners and so far as the claim for the period prior to 26.2.1983 is concerned, a notice was issued to the petitioners to show cause against why the claim for refund for the period prior to 26.2.1983 should not be rejected as hit by the bar of limitation contained in Section 11-B of the Act. ", "7. The respondents also state that the Collector of Central Excise, who examined the records relevant to the refund claim exercised his powers under Section 35-E of the Act by issuing a direction to the Assistant Collector of Central Excise to file an appeal before the Collector of Central Excise (Appeals) under Section 35-E of the Act and the Appellate Collector, after inviting cross objections from the petitioners, by forwarding a copy of the appeal, came to the conclusion that the Assistant Collector of Central Excise had no powers to overlook the mandatory provisions of Section 11-B of the Act and consequently, the refund for the period from 12.5.1981 to 26.2.1983 was hit by the bar of limitation under Section 11-B of the Act. Admittedly, the Appellate Collector directed the petitioners to recredit the amount refunded erroneously to them. It is also stated that the petitioners had an effective alternative remedy by filing an appeal before the Tribunal () and, therefore, the writ petition is not maintainable. ", "8. While traversing the various pleas raised in the affidavit to challenge the impugned order, the respondents contend that or the Authorised Officer can make the application to or the Collector (Appeals), that the plea based on the absence of notice is misconceived, that the procedure prescribed under Section 35-E of the Act has been directly complied with in forwarding a copy of the appeal filed and also by inviting cross objections from the petitioners and giving a personal hearing before passing final orders by the Appellate Collector and that no further show-cause notice is contemplated under Section 35-E of the Act. The respondents also contend that there is vast and substantial difference between the procedure to be followed in disposing of an appeal filed under Section 35-A of the Act and the exercise of powers under Section 35-E of the Act. It is also contended that the forwarding of the copy of the appeal and the opportunity given to file a cross objection constitute sufficient compliance with law and there was no need for any further show-cause notice to be issued and that the plea of the petitioners to the contra would run counter to the stipulations contained in Section 35-E of the Act. The respondents also deny the claim of the petitioners that the Collector of Central Excise (Appeals) exercising powers under Section 35-E of the Act can only decide and remand back to the original authority and cannot set aside the order and there is no such restriction warranted in the provisions contained in Section 35-E either expressly or by implication. While contending that the only issue for determination is whether the time barred refund is justifiable or not, the respondents contend that once the Appellate Collector came to the conclusion that the claim for refund was time barred and refund was erroneously made, the appellate Collector was well within his jurisdiction for ordering recovery from the petitioners. The decision in (83 ELT 1495) (supra) is said to be not applicable since according to the respondents, they were rendered under the provisions with a different scheme underlying them, and that the specific mandate contained in Section 11-B of the Act militates against the applicability of the decision of to the case on hand. It is also contended that any claim arising out of a reclassification could be considered only in the context of Section 11-B of the Act and the mandatory requirements of the law as enshrined therein cannot be overlooked. It is also contended that the specific stipulation of a period of limitation under Section 11-B(5) of the Act was with a view to prevent unjust enrichment in cases where the parties have collected the money from their consumers as duty of excise either intentionally or by mistake of law and subsequently claim them also from the department irrespective of any time limit and consequently there was nothing unconstitutional about the impugned orders passed by the Appellate Collector. ", "9. Mr. , learned Counsel for the petitioners contended as follows:- That having regard to the provisions contained in Section 11-A and the proviso to the said Section conferring power upon the Assistant Collector within 6 months and the Collector under certain circumstances within a period of five years there is no scope for having recourse to Section 35-E of the Act for the recovery of the duty erroneously refunded. It is also contended that even when a direction under Section 35-E(2) is issued, the Collector of Appeals can, in the appeal filed, only determine about the legality of the order passed under Section 11-B , and there is no power in the Collector of Appeals to issue a positive direction for repayment or recovery of the duty erroneously refunded earlier, de hors Section 11-A of the Act. The further submission of the learned Counsel for the petitioner is that even assuming that the Collector of Appeals, while disposing of the appeal under Section 35-E could have passed orders under Section 35-A(3) for the recovery of the duty erroneously refunded; the same could not have been done without complying with the requirements of the proviso by issuing a show-cause notice and also complying with Section 11-A of the Act. In substance, the plea of the learned Counsel for the petitioner is that recovery of any duty erroneously refunded under Section 11-B could be made only under Section 11-A and even while exercising the powers of revision or appeal, there could not be any positive order for recovery without meticulously complying with the stipulations contained in Section 11-A of the Act. The entire stand of the petitioner is built upon the supremacy of Section 11-A of the Act and that even Section 35-E of the Act is subject to Section 11-A of the Act and without conforming to the stipulations and conditions contained in Section 11-A , no positive order for recovery of the duty erroneously refunded could be passed under any provisions of the Act and particularly Section 35-E . ", "The decisions referred to by the learned Counsel in support of his stand will be considered, at the appropriate stage. ", "10. Mr. , learned Counsel appearing for the respondents contended that in view of the direction by the Collector to file an appeal to , and the issue of notice of appeal with a direction to file cross objections, if any, to the demand made by the department, there is no need to again have recourse to or comply with the stipulations contained in Section 11-A of the Act. It is also the contention of the learned Counsel for the department that the powers under Section 11-A and the appellate as well as revisional powers conferred under the other provisions like Sections 35-A , 35-E , etc., are distinct and separate, each of them with well defined and settled norms and distinctions and subject to the conditions specified in the respective provisions and the provisions contained in Section 11-A cannot be dovetailed into the other provisions or that the exercise of power under other provisions by the Appellate and Revisional Authorities cannot be subjected to or made dependent upon compliance with the criteria or restrictions under Section 11-A of the Act. Finally, the learned Counsel contended that while setting aside the order under Section 11-B , the competent authority entrusted with such power has as a necessary corollary to inevitably also pass orders for the return or repayment or recovery of the duty erroneously refunded. In effect, it was contended that accepting the plea of the petitioner would amount to allowing the provisions of Section 35-E to become otiose and render completely nugatory leading to absurd results. ", "11. The relevant provisions of the Act which require to be noticed are as follows:- ", "Section 11-A . (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: ", "Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words, 'six months', the words 'five years' were substituted. ", "Explanation: Where the service of the notice is stayed by an order of a , the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be. ", "Section 35-A . Procedure in appeal: (1) The Collector (Appeals) shall give an opportunity to the appellant to be heard, if he so desires. ", "(2) The Collector (Appeals) may, at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal, if the Collector (Appeals) is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. ", "(3) The Collector (Appeals) may, after making such further inquiry as may be necessary, pass such order as he thinks fit confirming, modifying or annulling the decision or order appealed against, or may refer the case back to the adjudicating authority with such directions as he may think fit for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. ", "Provided that an order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order: ", "Provided further that where the Collector (Appeals) is of opinion that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in Section 11-A to show cause against the proposed order. ", "(4) The order of the Collector (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. ", "(5) On the disposal of the appeal, the Collector (Appeals) shall communicate the order passed by him to the appellant, the adjudicating authority and the Collector of . ", "Section 35-E . Powers of or Collector of Central Excise to pass certain orders:- (1) The may, of its own motion, call for and examine the record of any proceeding in which a Collector of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector to apply to for the determination of such points arising out of the decision or order as may be specified by the in its order. ", "(2) The Collector of Central Excise may, of his own motion call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order. ", "(3)No order shall me made under Sub-section (1) or Sub-section (2) after the expiry of one year , from the date of the decision or order of the adjudicating authority. ", "(4)Where in pursuance of an order under Sub-section (1) or Sub-section (2) the adjudicating authority or the authorised officer makes an application to or the Collector (Appeals) within a period of three months from the date of communication of the order under Sub-section (1) or Sub-section (2) to the adjudicating authority, such application shall be heard by or the Collector (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals including the provisions of Sub-section (4) of Section 35-B shall, so far as may be, apply to such application. ", "12. Before adjudicating upon the issues raised, it would be useful to refer to the various judicial pronouncements and the opinion of the Tribunals, pressed into service by the counsel appearing on either side to substantiate their respective stands. The decision of of reported in AIR 1962 Calcutta, 258 ( .) was the one rendered construing the relative scope of Sections 39 and 190-A of the [Sea] Act , 1878. While considering the case of a claim by the Officer for payment of duty erroneously refunded by the department, the Division Bench of held it was required to be taken under Section 39 of the said Act within three months from the relevant date and that the period of limitation prescribed under Section 190-A cannot override the express provision in Section 39 which limits the issue of notice of demand for payment of duties not levied or short levied or erroneously refunded to a period of three months. To come to such a conclusion, the learned Judges considered that there was really no conflict between Sections 39 and 190-A , that whereas Chapter V comprising Section 39 deals with rights and liabilities, Chapter XVII in which Section 190-A occurs contains procedural provisions, that where a general intention as well as a particular intention has been expressed in the Act and both are incompatible with each other, the particular intention is to be considered as an exception to the general one and consequently, the period of limitation prescribed under Section 39 must prevail and cannot, therefore, be destroyed or overridden by Section 190-A and the limitation stipulated therein. ", "13. A Division Bench of , in a decision reported in 1981 ELT 114 (Delhi) ( .) construed the scope of Rule 10 and Rule 173-J of the Central Excise Rules and held that as there could be no non-levy or short-levy except by a process of assessment and likewise a refund could have been directed only after making a like determination of quasi-judicial nature and not only Rule 10 applied to such a case but Rule 173-J also applies to the review of a case of erroneous refund under Rule 10 and in substance, it only directs the application of Rule 10 in certain cases with a modification regarding the period of limitation. In 1985 (22) ELT 892 (T) of the CEGAT at Madras ( ) had an occasion to deal with a situation of the nature which has arisen in the present writ petition and the Tribunal expressed the view that the prescription of limitation under Section 11-A does not mean that even the revisional power of the Collector, a superior authority, could be equated to the limited power of review conferred upon the Assistant Collector, an authority below in the hierarchy or that Section 35-E(3) could be rendered nugatory by reading into the said provision a limitation stipulated under Section 11-A . The decision of in (supra) has been distinguished on the ground that the provisions of the Sea Customs Act, 1878 and that of the Central Excises and Salt Act , 1944 are not in pari materia. ", "14. Another Bench of the CEGAT at New Delhi in two separate opinions rendered and - and 1988 (37) ELT 22 (T)-Collector of Central Excise v. , took a contra view holding that demand by the department for repayment of duty erroneously refunded could be only under Section 11-A and within the time stipulated therefor and the period of limitation provided therein cannot be circumvented by having recourse to Section 35-E of the Act. ", "15. In ( ), has held that the provisions of Section 11-A(1) and (2) of the Central Excises and Salt Act , 1944 make it clear that the statutory scheme is that in the situations covered by Sub-section (1) a notice of show-cause has to be issued and Sub-section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the amount has to be determined. The said Scheme underlying the above provision was considered to be in consonance with the rules of natural justice and, therefore, notice is a condition precedent to a demand under Sub-section (2). In AIR 1988 SC 236 ( .), held that before any demand was made on any person chargeable in respect of non-levy or short-levy or under-payment of duty a notice requiring him to show-cause why he should not pay the amounts specified in the notice must be served on him and the admitted absence of a prior show-cause notice vitiated the impugned proceedings in that case. As a matter of fact, it was also pointed out therein that under Section 11-A of the Act the notice can relate only to a period of six months prior to the issue of that notice, except in cases where it was alleged that the short levy or short payment has occurred by reason of fraud, collusion or wilful mis-representation or suppression of facts or contravention of the provisions of the Act and the rules and the actual notice issued in that case could be of prospective consequence and the post facto show-cause notice could not be regarded as adequate in law. The decision ( ) is one where among other things was considering the question of the impact of Section 51 of the Finance Act, 1982 and the constitutional validity of giving retrospective effect to the amendments to Rules 9 and 49 of the Central Excise Rules from 28.2.1944, which provided for the collection of duty levied on the production of a commodity at an intermediate stage of an integrated process of manufacture of another commodity by deeming such production or manufacture of the commodity at an intermediate stage to be removal from such place or premises of manufacture. While repelling a challenge based upon Articles 14 and 19(1)(g) of the Constitution of India, held as follows:- ", "Under Section 11-A(1) the excise authorities cannot recover duties not levied or not paid or short-levied or short-paid or erroneously refunded beyond the period of six months, the proviso to Section 11-A not being applicable in the present case. Thus although Section 51 , Finance Act , 1982 has given retrospective effect to the amendments of Rules 9 and provision of Section 11-A of the Act. We are unable to accept the contention of the learned Attorney General that as Section 51 has made the amendments retrospective in operation since Feb. 28, 1944, it should be held that it overrides the provision of Section 11-A . If the intention of the was to nullify the effect of Section 11-A , in that case, the would have specifically provided for the same. Section 51 does not contain any non obstante clause, nor does it refer to the provision Section of 11-A. In the circumstances, it is difficult to hold that Section 51 overrides the provision of Section 11-A . (para 32). ", "There is no provision in the Act or in the Rules enabling the excise authorities to make any demand beyond the periods mentioned in Section 11-A of the Act on the ground of the accrual of cause of action. The question that is really involved is whether in view of Section 51 , Finance Act , 1982, Section 11-A should be ignored or not. In our view Section 51 does not, in any manner, affect the provision of Section 11-A of the Act. In the absence of any specific provision overriding Section 11-A , it will be consistent with rules of harmonious construction to hold that Section 51 , Finance Act , 1982 insofar as it gives retrospective effect to the amendments made to Rules 9 and 49 of the Rules, is subject to the provision of Section 11-A . (para 34) ", "16. After a careful consideration of the submissions of the learned Counsel appearing on either side in the light of the judicial pronouncements placed before me and the relevant provisions of law and the indisputable material of facts on record, I am of the view that the submissions on behalf of the petitioner have no merit and do not merit countenance in my hands. So far as the decisions of referred to before me are concerned, they had no occasion to deal with or decide the issue that is relevant or raised before me in this case. The observations made were merely on the scope of Section 11-A and the necessary formalities to be observed and the conditions to be satisfied for invoking the powers under Section 11-A of the Act. The impact of an interaction of the said provision with the provision contained in Section 35-A and Section 35-E was not at all considered in any of the decisions of but were in issue and considered only in the opinion expressed by some of the and whereas the branch of the at South had taken a view favourable to the , the Branch of took a view supporting the stand point of an assessee-manufacturer. a careful analysis and perusal of the orders of the in ) and . (supra) would go to show that greater emphasis and effect was given by them only to Section 11-A at the expense and in derogation of Section 35-E of the Act and in utter disregard of the jurisdiction of the authority exercising powers under Section 35-E of the Act. While the orders of the proceeded to hold that there is nothing in any part of the Act that can counteract Section 11-A and that resort to Section 35-E cannot have the effect of nullifying Section 11-A and the time limit stipulated therein and that such an interpretation would have the effect of rendering Section 11-A otiose, they have totally lost sight of the position that dovetailing Section 11-A into Section 35-E would equally have the effect of nullifying and making Section 35-E wholly redundant and would also result in completely obliterating the said provision from the statute itself. Such an interpretation also cannot be said to be a proper or reasonable one. ", "17. On a careful analysis of the provisions contained in Sections 11-A , 35-A and 35-E it could be seen that the powers conferred are upon different authorities to be exercised in different circumstances and fact situations. Section 11-A(1) of the Act confers powers upon a Central Excise Officer, in the nature of a review or reconsideration, though the proviso confers powers under certain specified circumstances upon the Collector of Central Excise. It is only the Collector of Appeals who has been conferred powers under Section 35-A in an appeal filed by an assessee and again under Section 35-E(4) in respect of a proceeding instituted by the department. In view of the above, one provision is not and cannot be also derogatory of the other, either in respect of the power or the authority entrusted with such power under different provisions of the Act. In substance, those provisions are mutually exclusive in their scope, extent and purport only and resort can be had to either one or more than one of such powers depending upon the exigencies of the situation and the exercise of one is not destructive of the other. The dicta of in the decision in . [] may be usefully referred, though rendered under the Bihar and Orissa Co-operative Societies Act , 1935. Regarding the availability of more than one remedy and the manner in which it could be invoked or exercised, it was held as follows:- ", " has in its judgment assumed that whenever a specific remedy is made available in law the other remedy, more general in nature, necessarily gets excluded. ", "6. Validity of plural remedies, if available under the law, cannot be doubted. If any standard book on the subject is examined, it will be found that the debate is directed to the application of the principle of election, where two or more remedies are available to a person. Even if the two remedies happen to be inconsistent, they continue for the person concerned to choose from, until he elects one of them, commencing an action accordingly. In the present case there is no such problem as no steps under Section 40 were ever taken by the appellant. The provisions of Section 48 must, therefore, be held to be available to the appellant for recovery of the loss. ", "7. Our view that a matter which may attract Section 40 of the Act will continue to be governed by Section 48 also if the necessary conditions are fulfilled, is consistent with the decision of this Court in (1991 Supp. (2) SCC 215) arising under the Delhi Co-operative Societies Act , 1972. The two Acts are similar and Section 40 and 48 of the Bihar Act and Section 59 and 60 of the Delhi Act are in pari materia. The reported judgment followed an earlier decision of this Court in . [(1965) 1 SCR 186]. We accordingly hold that was in error in assuming that the application of provisions of Section 48 of the Bihar Act could not be applied to the present case for the reason that Section 40 was attracted. ", "8. So far the question of limitation is concerned, it is true that as in the Delhi Act , a period of six years was fixed under the Bihar Act also by second proviso under Section 40(1) , which reads thus: ", "'Provided further that no order shall be passed under this sub-section in respect of any act or omission mentioned in Clause (a), (b), (c) or (d) except within six years of the date on which such act or omission occurred.' It will be observed that the six years rule of limitation, however, is limited for the purpose of Section 40 , and cannot govern the reference under Section 48 . The relevant provision of Section 48 is to be found in the proviso to Section 48(1) which has been quoted above. For determining its impact on the present case, it is necessary to examine the proviso closely. Firstly, both the proviso and Section 63 of the Act are concerned only where the claim is against a member. Even if the proviso be assumed to govern a dispute between the society and its past or present officer or servant it cannot come to the aid of the present respondent-1 because he was dismissed from service on October 15, 1966 and he was directed to deposit the disputed amount within 30 days therefrom. The dispute was referred for adjudication under Section 48 on December 12, 1966 and the reference was registered as Award Case No. 25 of 1968 on August 3, 1968. Thus all these steps were taken within a period of two years. No reliance, therefore, can be placed on either Section 32 or 63. ", "18. Similar issue has come up before this Court on more than one occasion under the Tamil Nadu General Sales Tax Act, 1959, of the relative scope and effect of Section 16 and 32 or 34, of the said Act and the limitations prescribed for the exercise of those powers. A Division Bench of this Court to which I was a party while following the decision of an earlier Division Bench in [1989 (74) STC 364] held in the decision in and Co. v. The State of Tamil Nadu rep. by the Jt. Commr. of Commercial Taxes-II Madras-5 (1992 (2) MTCR 203) as hereunder: ", " (1989 (74) STC 364), another Division Bench of this Court held as hereunder:- ", "'The revisional order passed by is within a period prescribed by that section. Therefore, the power of limitation prescribed under Section 16 of the Act will not apply to the revision in the instant case. Further in the decision reported in (1979) 44 STC 446 (Mad) while considering the scope of Sections 16 and 32 (the revision by the Deputy Commissioner is analogous to Section 34 ) it is held as follows:- ", "... the two sections are mutually exclusive and give different powers to different authorities. Therefore, if action could be taken under one section, it does not follow that action could not be taken under the other. Where it is possible to act under two provisions, the department may resort to the one instead of the other and it cannot be compelled to proceed under only one of the two provisions. Section 32 provides for the examination of the order passed by a subordinate authority under certain provisions set out therein. So long as the jurisdiction is exercised with respect to an order contemplated by the section, there would be no error in the exercise of jurisdiction. ", " also held on the relative scope of Sections 16 and 34 in the following terms:- ", "On a consideration of the above decisions we are of the view that Sections 16 and 34 of the Tamil Nadu General Sales Tax Act are independent and the limitation prescribed under Section 16 will not be applicable to a revision under Section 34 of the Act and in any event, in this case, since the original assessment was not revised under Section 16 the limitation prescribed under Section 16 will not be applicable to a revision under Section 34 . Further, we are of the view that Section 34 gives wide power to reassess the turnover as in the case of the original assessing authority. ", "15. The exercise of powers, so far as the present case before us is concerned, is one, in our view, squarely coming within the four corners of suo motu revisional powers conferred upon the Joint Commissioner under Section 34 of the Act and consequently there is no merit whatsoever in the plea made on behalf of the appellants that it has also to satisfy the period of limitation as prescribed under Section 16(1) of the Act. The provisions of Section 34 of the Act contain their own period of limitation and the exercise of power by the Joint Commissioner is well within the said period of limitation. ", "19. Consequently, in my view, there is absolutely, no warrant or justification to restrict the scope and amplitude of the powers of the Collector of Appeals under Section 35-E by reading into it the provisions of Section 11-A of the Act. Such a construction is not permissible under any known or well accepted principles of interpretation governing similar provisions, particularly in fiscal enactment and while construing provisions meant to prevent evasion of tax liability. The plea that Section 11-A is a special provision and therefore cannot be allowed to be overtaken by Section 35-E or that Section 11-A is a substantive provision unlike a procedural provision of the nature in Section 35-E has no rhyme or reason. An appellate or revisional provision is as much a provision of law conferring substantive rights as a provision regulating refund or recovery of an amount erroneously refunded. The decisions of were concerned with the scope of Section 11-A only and they have not dealt with the relative scope of Section 11-A and the other provisions or the issue as to whether the provisions in Section 11-A have overriding effect on the provisions in Section 35-A or 35-E or even as to whether Section 11-A has to be dovetailed into Section 35-A and 35-E of the Act, in cases of recovery of erroneously refunded duty. Consequently, these decisions cannot be the authority to support the stand of the petitioners. For all the reasons stated above, I am unable to subscribe to the view expressed by or at New Delhi, relied upon for the petitioners. ", "20. The further plea that in view of the mandate in Section 35-E(4) that the application filed shall be heard and disposed of as if the same were an appeal and consequently compliance with Section 11-A cannot be avoided in view of Section 35-A(3) second proviso, though would appear attractive cannot merit acceptance. The specific stipulation is that \"the provisions of this Act regarding appeals including the provisions of Sub-section (4) of Section 35-B shall, so far as may be apply to such application\", (emphasis supplied Here italicised). The two provisos incorporated to Section 35-A(3) deal with cases which are in the nature of suo motii exercise of power or the right of cross objections for the department in an appeal filed by an assessee appellant seeking relief for himself so far as against the order is against him (sic). Section 35-E is meant to confer a right upon the to file an application before of course only on a direction from the Collector of , for the determination of the points arising out of the order of an adjudicating authority, and it is only treated as an appeal for certain purposes. The specific stipulation in Section 35-E(4) that \"such application shall be heard by or the Collector (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority\", does not have the consequence of converting it as a regular appeal of an assessee subject to all the stipulations, including those which are required to be observed in passing an order against the interests of an assessee in his appeal. On the other hand, the words \"shall be heard as if such application were an appeal so far as may be apply to such application\" would go to show and lay emphasis to the fact that the hearing of the application shall be as if an appeal is to be heard and that too following the provisions relating to the hearing of the appeal so far as may be applicable and not in every sense. In an application filed under Section 35-E(4) on the directions of the Collector of , the very issue would be against the interests of the assessee who has not himself filed an appeal, and there is no scope or occasion for forming an opinion by and then issuing any notice to the assessee. On the other hand, once an application has been filed under Section 35-E(4) notice has to be issued inevitably and automatically to the assessee and after hearing him the same should be disposed of as such and the assessee communicated with the order as visualised under Sub-section (4) and (5) of Section 35-A . The deeming of the application filed under Section 35-E(4) as if it were an appeal is only for such limited purpose and the same cannot be enlarged beyond its legitimate purpose. The submission for the petitioner to the contrary has no substance or merit whatsoever. ", "21. So far as the facts and circumstances of the case are concerned, there is no dispute that the impugned order came to be passed within the six months period visualised under Section 11-A and that notice of the application filed under Section 35-E(4) was also served upon the petitioner calling upon him also to file his cross objections, if any, and he was fully heard and then orders have been passed and communicated to the petitioner, also. There is no need to follow the procedure prescribed under Section 11-A once over again. So far as the facts and circumstances of the present case are concerned, it may also be taken that the provisions of Section 11-A have also been substantially and effectively complied with when the procedure under Section 35-E has been followed and notices have been issued and no legitimate or real grievance whatsoever could be made by the petitioners. There is also no substance or merit in the plea that the authority exercising power under Section 35-E(4) can only set aside the order of the adjudicating authority and cannot direct refund to the or order recovery of the amount erroneously refunded. When the very order, as in this case, that is the subject matter in issue in the application filed under Section 35-E(4) is the earlier order of refund passed by the adjudicating authority, and the legality and propriety of passing such an order, while the Collector of Appeals sets aside such an order, the Collector of Appealls shall be entitled as of necessity to direct the return or repayment or recovery of the money erroneously refunded. Such powers are conserved to the Appellate Collector as a necessary and incidental power essential for the effective discharge of the jurisdiction under Section 35-E(4) of the Act. Otherwise, it would be a futile exercise of powers and such a construction cannot be countenanced at all by and render an effective power conferred really purposeless or useless. The impugned order, therefore, does not call for any interference in these proceedings. ", "22. For all the reasons stated supra, the writ petition fails and shall stand dismissed. No costs."], "relevant_candidates": ["0000144508", "0000253561", "0000363381", "0000913572", "0000923733", "0000971550", "0001053542", "0001063842", "0001126745", "0001378773", "0001418391", "0001997627"]} {"id": "0000108534", "text": ["ORDER and , . ", "1. This is a judgment-debtors' appeal against an order of the learned Additional District Judge of Moradabad dated 4th August 1945, allowing an appeal of the decree-holder respondent against the order of the dismissing an application for preparation of a final decree. The only question in appeal before as is whether the application for the preparation of a final decree was barred under Article 181 , Limitation Act . The facts bearing upon the question may be stated shortly as follows : ", "2. The appellants judgment-debtors brought a suit for accounts under Section 33 , U. P. Agriculturists' Relief Act. The suit was decreed in terms of a compromise according to which the decretal amount was made payable in twelve half yearly instalments. The first instalment was to fall due on 23rd June 1937 and the last was payable on 23rd December 1942. It was further provided that in default of payment of any two instalments the whole amount would become payable with interest allowed by law. The Hindustani expression used in the compromise was rather clumsy. It was: \"Kul mutalba ekmusht mae sud qanooni lagaya jawe.\" As it stands the expression is meaningless, but there can be no doubt that parties meant what we have stated above. No instalment was paid. An application for the preparation of a final decree was made on 26th July 1943. The decree-holder claimed that he was entitled to get a final decree prepared in respect of all the twelve instalments. ", "3. Now, if regard be had to the default in payment of the first two instalments then the cause of action accrued on 23-12-1937, and an application for preparation of the final decree should have been made by the latest on 23-12-1940. But if regard be had to the last of the defaults or to the individual instalments alone, then it was clear that the last five instalments, namely, those that fell due on 23-12-1940, 23-6-1941, 23-12-1942, 23-6-1942, and 23-12-1942, were within time. ", "4. The held that the application was time barred. Against that order the decree-holder appealed to the lower appellate Court. The lower appellate Court held that the ruling reported in , 1945 ALL. W. R. H. C. 54 applied to the case. In that ruling it was held that there was nothing in Article 181 , limitation Act which indicated that the decree-holder's right to apply for a final decree accrued only once; rather a new cause of action accrued upon every fresh default and not only once on the occurrence of the first default. The lower appellate Court, therefore, ordered that the decree-holder was to have a final decree prepared in respect of the last five instalments which fell due within three years of the making of the application and remanded the case to for the preparation of a final decree. The decree-holder has submitted to this order but the judgment-debtors have come up in appeal to this Court. ", "5. It has been contended before us by Mr. on behalf of the judgment-debtors-appellants that the cause of action for preparation of the final decree accrued only once and that was on the first default in the payment of two consecutive instalments, that is to say, on 23-12-1937, and that, therefore, the application was time-barred under Article 181 Limitation Act . According to him \"the right to apply\" within the meaning of col. 3 of Art 181, Limitation Act means the first right to apply, and he has relied upon a decision of this Court reported in , A. I. R. 1946 ALL. 360. ( and .) ", "6. We think that the question involved in this appeal is not free from difficulty and there does not appear to be a uniformity of decisions in this . ", "7. Now let us mention the case law bearing upon the point in chronological order. But before we do so, it will be well if we take note of similar provisions under different Articles of the Limitation Act: ", "Article 74: ", "On a promissory note or bond payable by instalments. ", "(3 years) The expiration of the first term of payment as to the part then payable and for the other parts, the expiration of the respective terms of payment. ", "Article 75: ", "On a promissory note or bond payable by instalments, which provides that if default be made in payment of one or more instalments, the whole shall be due. ", "(3 years) When a default is made, unless where the payee or obligee waives the benefit of the provision, and then when fresh default is made in respect of which there is no such waiver. ", "Article 80: ", "Suit on bill of exchange, promissory note or rond not herein expressly provided for. ", "(3 years) When the bill, note or bond be-domes payable Article 120: ", "Suit for which no period of limitation is provided elsewhere in this schedule. ", "(6 years) When the right to sue accrues. ", "Article 132: ", "To enforce payment of money eharges upon immovable property. ", "(12 years) When the money sued for becomes due. ", "Article 181: ", "Applications for which no period of limitation is provided elsewhere in this Schedule or by S. 48 , Civil P. G., 1908. ", "(3 years) When the right to apply accrues. ", "Article 182: ", "For the execution of a decree or order of not provided for by Art. 183 or by S. 48 , Civil P.O., 1908. ", "(Three years;or where) (a certified copy of ) (the decree or order ) (has been registered ) (six years. ) (Where the application is to enforce any payment which the decree or order directs to be made at a certain date (such date). ", "8. TION> , 1 Cal. 163, a case falling under ct 14 of 1859, the facts were these: having borrowed money from executed in his favour a bond (which was afterwards duly registered) in which he engaged to repay the amount with interest on a day named and hypothecated certain lands by way of security with a condition that, in the event of the said lands being sold in execution of the decree before the day fixed for repayment, should be at liberty to sue at once for the recovery of the debt. efore the term of repayment expired, the mortgage land was sold in execution of a decree obtained by another creditor on a second bond made by . More than six years after the date of sale in execution of the decree, but within six years of the date fixed in the bond for repayment, brought a suit against and the purchasers of the lands at the auction sale for recovery of the money due under the bond. ", "Clause 10, Limitation Act , (XIV of 1859) applied to suits for money lent where the instrument was not registered. Clause 16 applied to all other suits for which no period of limitation was expressly provided. Under Clause 16 a period of six years was provided from the time \"the cause of action arose.\" Clause 12 provided a period of 12 years for the recovery of immoveable property, or of an interest in immoveable property. The contention of the defendants in that case was that Clause 16 providing a period of 6 years applied and that the cause of action arose on the date when the property was sold in execution of the decree. On the other hand, the plaintiff claimed that a period of 12 years applied under Clause 12. Sir delivering the judgment of held that Clause 12 applied and the suit was within time, but he also made observations to the following effect : ", "\"Their Lordships must not be supposed, in coming to this decision, to give any countenance to the argument of Mr. that this suit would have been barred if the limitation of 6 years under Clause 16 tad been applicable to it. They think, upon the construction of this bond, there would be good reason for holding that the cause of action arose within 6 years before commencement of the suit.\" ", "The words \"cause of action\" should be noted. It is clear that although the mortgagee was entitled to sue under the terms of the bond upon the sale of the property and his cause of action thus arose on that date yet in their Lordships' view he was not bound to do so and if he elected not to do so, his cause of action nevertheless arose when the payment was not made on the date fixed in the bond. In other words, the second cause of action was to be taken into account when the default clause was for the benefit of the mortgagee. ", "9. , 37 ALL. 400, a Full Bench of this Court had to consider a case falling under Article 132. There was a mortgage bond in which the mortgage money was payable after a certain period. There was a default clause to the following effect : ", "\"If we fail to pay the interest aforesaid in any month, on the principal by the end of the stipulated period, as specified above, or no payment is made in a year, the mortgagee shall, under all these circumstances, be at liberty to realise the entire amount with the interest aforesaid in a lump sum, through , by means of a suit, from the mortgaged and other moveable and immoveable property and the persons of us the executants.\" ", "It was held by and that within the meaning of the article the money became due as soon as it could be legally demanded, that is, upon the first default. The learned Chief Justice followed the judgment of in England in v. , (1891) 2 Q. B. 509. took the opposite view. He thought that the clause in question was clearly inserted for the benefit of the creditor and that it was at his option to treat the money as being immediately due or not. He relied upon the dictum of Sir in v. , 1 Cal. 163 (P. C.) referred to above. ", "10. case, 37 ALL. 400 was affirmed by another Full Bench of this Court in , 45 ALL. 27. ", "11. In v. , 50 ALL. 328, Sir Hears C. J. and Sen J. had a case in which the facts were these: A mortgage bond, executed on 1-5-1909, was payable in three years. But it was provided in it that if the mortgagor transferred the hypothecated property or if anyone advertised the same for sale, the creditors shall, even before the expiry of the term, be at liberty to institute a suit for recovery of the amount of this bond, with the entire interest and compound interest for the aforesaid period of 3 years. On 8-3-1911, the mortgagor executed a hypothecation bond and hypothecated a portion of the mortgaged property. The mortgagee brought a suit against the mortgagor himself and the transferees on 27-3-1924, that is, beyond 12 years of the hypothecation of the mortgagor, but within twelve years of the expiry of 3 years fixed for payment of the mortgage amount in the mortgage bond. ", "12. Their Lordships refused to extend the principle laid down in (37 ALL. 400) and (45 ALL. 27 P. B.) cases to the facts before them. ", "13. As observed in , (A. I. R. 1932 P. C. 207) to which we shall refer presently, there is no difference in principle between the principal money becoming due immediately upon the default by the mortgagor in payment of interest or of an instalment and it becoming due upon the breach of any other condition to which a similar provision is attached. ", "14. , 53 Ind. App. 187 there was a default in payment of interest, the default clause giving the mortgagees right, without waiting for the expiry of the stipulated period, to enforce the security. This Court followed case, (37 ALL 400) and had dismissed the suit as beyond time. On appeal Lord delivering the judgment of the observed as follows : ", "\"Applying certain previous decisions of that Court, and in particular a decision in , 37 All. 400 held that under a clause in the above form a single default on part of the mortgagors, without any act of election, cancellation or other form of response or acceptance on the part of the mortgagees, and even, it would appear, against their desire operates, eo instanti, to make the money secured by the mortgage \"become due,\" so that all right of action in respect of the security is finally barred twelve years later, that is in the present case, on 21-2-1906. All this held, notwithstanding that the mortgage is for a term certain, a \"provision which may be as much for the benefit of the mortgagees as the mortgagors, and notwithstanding that the proviso is exclusively for the benefit of the mortgagees. The decision also apparently proceeds upon the view that the words of the English Limitation Act and the English decisions thereon apply without question to the words of Article 132 of Schedule to the Indian Act --a conclusion which, as it seems to their Lordships, may involve, and, on the critical point when applied to such a proviso as the present, a large assumption.\" ", "The , however, did not decide the question finally and left it to be decided in some other case. ", "15. , 54 Ind. App. 272 (P. C.), there was a decree which provided that the husband would pay Rs. 2,000 annually to the wife and remain in possession of the disputed property, but in case of default of payment the property would be made over to the wife. There was default in payment on several occasions. More than three years after the first default the decree-holder applied on the basis of a fresh default for recovery of the amount then due and also for recovery of possession over the disputed property. Their Lordships of held that the decree-holder was entitled not only to the instalments claimed but also to the delivery of possession of the disputed property. According to their Lordships upon the construction of the decree itself, on the occasion of a default in each payment the right of the respondent to have the said property made over to her arose, and, therefore, the claim was not time barred. ", "Their Lordships did not mention the particular article which applied to that application but it is clear, as was held in a case of this Court, , 51 ALL. 237 that to the application for delivery of possession over the property Article 181 was the only article that was applicable, and their Lordships of must have had that article in their minds, when they decided that case. This case is very important and clearly decides that in a case in which there is a default clause and the relief claimed is based upon the default clause, the right to apply accrues on the happening of every default and not only on the happening of the first default. ", "16. This was followed by a Full Bench of this Court in , 51 ALL. 237. In that case there was a decree based on a compromise by which the decretal amount was made payable by instalments. The decree further provided that in ease of default of any two consecutive instalments the defendants would pay up the whole of the balance due. There was default in the payment of several instalments. The decree- ", "holder filed an application for execution more than three years after the first default. The matter came up before which referred five questions for decision by . ", "17. In the Full Bench, held that the instalments as individual instalments could be recovered under Article 182 , Clause (7) within three years of their falling due and that the whole amount then remaining due could be recovered within three years of the last of two consecutive defaults under Article 181. after pointing out that in that case the default clause did not provide that in case of default the decree-holder shall have power or option to recover the amount, but provided that the amount shall be paid by the defendants to the plaintiffs, held that this difference in language was not material. In his Lordship's opinion Article 181 was applicable to the relief claimed under the default clause and relying upon the case just cited, , 54 Ind. App. 272 (P. C.), concurred with in holding that: ", "If the application for execution is one for the remaining unpaid balance of the decretal amount under the default clause, it is not governed by Article 182 , at all but by Article 181 , and limitation will run from the date of the last of any two successive defaults, the decree holder being entitled for an order for whole balance due less the amount of any individual instalments which regarded as individual instalments, are already barred by limitation and that in cases of this description it is undesirable to interpret the application too strictly, and that the Court may well pay regard to the substance of the application. ", "18. This was a case in which the terms of the decree were exactly similar to the case before us with the only difference that in our case it was a preliminary decree, the application was for the preparation of a final decree, whereas in the case before it was a final decree and the application was for execution of the decree. So far as the question of the enforcement of the default clause and the recovery of the amount due under that clause is concerned, the same Article, namely, Article 181 , was held to apply, and the decision is directly in point and we think binding upon us unless it is overruled expressly, or impliedly, by any subsequent decision of a higher authority. ", "19. In our opinion this case lays down the following propositions:--(1) Where there is a default clause the decree-holder has a right to apply for recovery of the whole amount upon the happening of any default; (2) That even where the default clause has come into operation by default in payment, the individual instalments, as and when they fall due, do not become extinct, and the provision with regard to their payment remains intact and may be enforced, and (3) That it is immaterial that the default clause is worded as expressly giving an option to the decree-holder to apply for the recovery of the whole amount on the happening of a default or whether it pro- ", "vides that on the happening of a default the whole amount shall become due or payable. The reason is that in both cases the default clause is for the benefit of the decree-holder, and not for the benefit of the judgment-debtor. ", "20. The matter which was left undecided in 's case, (53 Ind. App. 187 P. C.) (ubi supra) again came up before the Board in , 1932 ALL. L. J. 913 (P.C.). In that case the mortgage deed provided that the principal sum would be paid within six years and the stipulated interest every year and further that in case of default in punctual payment of interest the mortgagee shall, within the expiry of the stipulated period of six years, have power to realise the entire mortgage money and the remaining interest and compound interest due to him in a lump sum through by sale of the mortgaged property. There was default in payment of interest, but the mortgagee did not avail himself of the option given to him. He sued upon the mortgage after 12 years from the date of such default but within twelve years from the date of the expiry of the stipulated period of six years. ", "Sir delivering the judgment of the Board observed as follows: ", "\"There can be no doubt, as pointed out by Lord , a proviso of this nature is inserted in a mortgage deed \"exclusively (or the benefit of the mortgagees\", and that it purports to give them an option either to enforce their security at once, or if the security is ample, to stand by their investment for the full term of the mortgage. If on the default of the mortgagor, in other words, by the breach of his contract the mortgage money becomes immediately 'due' it is clear that the intention of the parties is defeated and that what was agreed to by them as an option in the mortgagees is, in effect, converted into an option in the mortgagor. For if, the latter, after the deed has been duly executed, and registered, finds that he can mate a better bargain elsewhere, he has only to break his contract by refusing to pay the interest, and \"eo instanti,\" as Lord says, he is entitled to redeem. ", "If the principal money is \"due\", and the stipulated term has gone out of the contract, it follows, in their Lordships' opinion that the mortgagor can claim to repay it, as was recognised by in his judgment in . Their Lordships think that this is an impossible result. They are not prepared to hold that the mortgagor could in this way take advantage of his own default; they do not think that upon such default he would have the right to redeem, and in their opinion the mortgage money does not \"become due\" within the meaning of Art 132, Limitation Act until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued. This would, of course, also be the position if the mortgagee exercised the option reserved to him. ", "\"Their Lordships are not greatly oppressed by the authority of v. , (1891) 2 Q. B. 509. It is, they think, always dangerous to apply English decisions to the construction of an Indian Act . The clause there under consideration differed widely from that now before their Lordships, and indeed from the clauses with which had to deal; the question for decision would have fallen in India, not under Article 132 , but under Article 75 , which is in very special terms; and Section 3 of the statute of James, with which the was concerned, made the time to run, not from the date when the money became due. but from the date when the cause of action arose. If in the Indian eases the question were \"when did the mortgagee's cause of action arise ?' i.e., when did he first become entitled to sue for the relief claimed by his suit their Lordships think that there might be much to be said in support of the Allahabad decisions. Judged by the Indian criterion, \"when the money sued for became due,\" upon the best consideration their Lordships have been able to give to this difficult question, they think that the decision of the Chief of Oudh was wrong, and that they should have held that the appellant's suit was within time.\" ", "21. It will be observed that the reasoning upon which the decision was based was that where a default clause is inserted in a bond \"exclusively for the benefit of the mortgagee\" and gives him an option to either enforce the security at once, or, if the security is ample, to stand by his investment for the Full term of the mortgage, the mortgagee is not bound to sue at once upon the happenning of the default, but may wait and sue when the time fixed for the payment expires. It is true that while distinguishing the case of v. , (1891-2 Q. B. 509) (supra), their Lordships have observed that: ", "\"If in the Indian cases the question were did the mortgagee's cause of action arise? i.e., when did he first become entitled to sue for the relief claimed by his suit --their Lordships think that there might be much to be said in support of the Allahabad decisions.\" ", "The words \"there might be much to be said in support of the Allahabad decisions\" are significant. Where two views are possible and much can be said on both sides, the mere fact that much can be said in favour of one view does not mean that that view is necessarily correct. Having regard to the other decisions of the on the subject, already referred to, namely, , 1 Cal. 163 (P. C.) and Maung Sin v Ma Tok, 54 Ind. App. 272 (P. c.), we do not think that when their Lordships themselves did not decide the question finally the in India should feel bound by observations of that nature. ", "22. , (1934 ALL. L. J. R. 261) of this Court had to consider Article 80 read with Article 110. There was a mortgage which provided that the principal sum would be paid in eight years and the stipulated interest every month and further that if the interest for one full year remained unpaid the mortgagee shall be at liberty to recover the principal and interest without waiting for the expiry of the stipulated period. No interest was paid and there was default at the expiry of one year, but the mortgagee did not avail himself of the option given to him. He sued for the recovery of the mortgage money within six years from the date of the expiry of the stipulated period, and obtained a decree. The sale proceeds of the mortgaged property having proved insufficient to pay up the mortgaged money the mortgagee applied for a simple money decree for the balance under Order 34, Rule 6. The case was referred to . ", "23. It was contended that since in Article 80 time began to run from the date when the money became 'payable,' limitation would begin to run when the money first became payable by the mortgagor, that is. on the happening of the first default, and that this result was not affected by the question of mortgagee's option. case, (A. I. R. 1932 P. C. 207) was attempted to be distinguished upon the ground that the language of Article 132 , which was applicable to that case -was different from the language of Article 80. observed : ", "\"I take the pronouncement of their Lordships to mean that a clause of this nature is exclusively for the benefit of the mortgagee and gives him a perfect option or liberty to sue for his money or to stand by his investment for the full term of the mortgage and so long as the mortgagee does not, by means of any act of election, cancellation or other form of response or acceptance make the money become due, time does not begin to run against him\" ", "King agreed with him. His Lordship observed that their Lordships of in case laid \"stress upon the point that the provision enabling the mortgagees to sue before the expiry of the stipulated period is inserted exclusively for the benefit of the mortgagees' giving them an option either to enforce their security at once, or, to stand by their investment for the full term. I take this to mean that the mortgagee has an option of treating the money as having 'become due' by demanding or suing for it, and it does not become due unless he exercises his option, even though the mortgagor may already have a right to redeem in accordance with the terms of the mortgage contract. If we hold that time begins to run for a suit to enforce the mortgage from the date of the first default that gives an optional cause of action, then it could not be said that the provision is inserted exclusively for the mortgagee's benefit. He would have to sue within twelve years from the date of the first default although he might prefer to stand by his investment for the full term and then sue within twelve years from the expiry of that term. He might indeed be compelled to sue before the expiry of the full term, if the term were 13 years or more. In my view, therefore, the question whether the mortgagor has a right to redeem before the expiry of the stipulated period is immaterial. Time does not begin to run against the mortgagee before the expiry of that period unless he avails himself of the option inserted exclusively for his benefit\" ", " also held to the same effect. His Lordship held that in case, their Lordships of intended to rest their conclusion on two grounds either of which supported it. These two grounds were money does not \"become due unless (1) mortgagor is at liberty to pay and the mortgagee is at liberty to sue, and (2) the mortgagee having an option to claim immediate payment avails himself of the option by claiming it before the expiry of the term. His Lordship held that either ground was independent of the other and even if the first ground was absent, the second ground was enough for a decision in favour of the mortgagee. ", "His Lordship further considered the sentence relating to the accrual of the cause of action in , 's case, beginning \"If in the Indian cases the question were ...\" and observed that it did not affect the decision even though the language of the statute was \"when the money be- ", "came payable\" and not \"when the money became due.\" ", "24. Nor in our opinion, this decision is authority for the proposition that the real ratio decidendi of case, (A. I. R. 1932 P.C. 207) was that whenever a default) clause is intended exclusively for the benefit of the mortgagee the mortgagor cannot take advantage of his own default in payment and the mortgagee can stand by his investment for the full term and his right to realise the amount will not be affected by his inaction. This case further lays down that there is no particular difference between the words \"becoming due\" and \"money becoming payable,\" and that the sentence in the judgment in case beginning 'If in the Indian case . . . .\" does not affect the matter. ", "25. Now there is no essential difference between the phrase \"the amount becomes payable\" and \"the right to sue or to apply accrues.\" In the case of a decree for payment of money \"the right to apply accrues\" when \"the money becomes payable.\" The considerations that weighed with their Lordships in the above case, to our minds, equally apply to the present case. ", "26. , 1934 ALL. L. J. 772, however, there was a compromise decree fixing payments of certain instalments on specified dates. It provided further that: ", "\"In the case of default in the payment of two successive instalments, the decree-holder would be entitled to realise the entire balance of his decretal amount, irrespective of the fact whether or not instalments have fallen due, by execution of the decree.\" ", "An application for execution was made more than three years after the first default in the payment of two successive instalments. and held that the decree-holder's right to receive the instalments as and when they fell due was not barred but that his right to enforce the payment of all the instalments that might remain unpaid, in the event of two successive instalments remaining unpaid was time barred. The application was made more than three years after the right to apply first accrued on the default of first two instalments. ", "This ruling was given in spite of the decision in , 51 ALL. 237. Their Lordships felt not bound to follow that ease on account of the observations of in case, (A. I. R. 1932 p. c 207) in the sentence, \"If in the Indian cases etc. ...\" already referred to. Their Lordships seem to have held in this case that even where the mortgagee was given an option to realise the Full amount on default of any two successive instalments even then he was bound to apply within three years of the first default in the payment of two successive instalments. ", "27. , 1934 ALL. L. J. 1035 (F. B.), the principle underlying case was not applied to a case falling under Article 75. It was held that the language of the Article was quite different from that of Article 132 or Article 80. , and observed that unless there was waiver the Article became applicable on the first default. , however, gave a dissenting judgment in which he observed : ", "\"To start with, I would like to mention that as a matter of principle, what is given to a man for his advantage should not be turned into his disadvantage. That is a matter of simple justice.\" ", "His Lordship referred to case, (A. I. R. 1932 P. C. 207) and observed that had remarked with reference to a suit on a mortgage that a contract which had been entered into for. the benefit of the mortgagee could not be converted into a contract as if it were for the benefit of the mortgagor and held that the same principle should apply to Article 75. ", "28. As the language of Article 75 is peculiar we do not think that the present case is governed by case, (1934 ALL. L. J. 1035 F. B.) ", "29. , A. I. R. 1945 ALL. 161, had a case exactly similar to the present. There was a preliminary mortgage decree directing payment by instalments and farther that on default in payment of three instalments the decree-holder was entitled to apply for a final decree. It was held that the cause of action to apply for a final decree accrued not only on default of payment of the third instalment but also on subsequent breaches and an application for final decree made more than three years after the first default of three instalments was within time. v. , A. I. R. 1938 Oudh 112 and , A. I. R. 1942 Mad. 581 were relied upon. The basis of the decision was that the right to apply accrued on every fresh default and not only once on the occurrence of the first default. ", "30. This leads us to a consideration of the last case in this series. ", "31. , A. I. R. 1946 ALL. 360, a Bench of this Court consisting of and had a case very much similar to the present case. In that case the preliminary decree for sale provided that the decretal amount would be paid in instalments and in case of non-payment of any three instalments the entire amount would be payable in a lump sum. It was held that the expression \"When the right to apply accrues\" in Article 181 meant \"when the right to apply first accrued\". Their Lordships relied upon the sentence in case, (A. I. R. 1932 P.c. 207) so often quoted by us already. Their Lordships held that the case in , 54 Ind. App. 272, was different. They distinguished the case in v. , A. I. R. 1938 Oudh 112 on the ground that in that case the preliminary decree conferred an option on the decree- ", "holder to obtain a final decree on default of any one instalment when the entire amount unpaid became payable, and observed that if there was anything in the judgment of which may be said to be in conflict with the view that the expression \"when the right to apply accrues\" meant \"when the right to apply first accrues\" they would dissent from that decision. ", "Their Lordships observed that case did not lay down any general principle. They distinguished the Full Bench case reported in , 51 ALL. 237 (F.B.), on the ground that it was a case not for preparation of a final decree but for the execution of a decree and also upon the ground that the terms of the decree in that case were essentially different from the terms of the decree in the case before them. Their Lordships emphasised that in the case before them there was no option contained in the decree and it was for that reason that they held that the application for a final decree was time-barred. Thus it would seem that although their Lordships emphasised the fact that under Article 181 \" when the right to apply accrues\" mean \"when the right to apply first accrues,\" their Lordships were of the opinion that where there was an option in the decree-holder to take advantage of the default clause or not to take advantage of it, he could stand by his investment for the full term, but where there was no option for the decree-holder he could not wait and limitation would start to run from the first default. ", "32. It appears to us, therefore, that the decisions of this cannot be reconciled and, in our opinion, the case should be referred to a larger Bench in order that a final and authoritative decision may be given on the following questions: ", "1. Where a preliminary decree (or money allows instalment and provides that in case of default in payment of any specified number of instalments, the entire amount then remaining unpaid would become payable, whether the words \"when the right to apply accrues\" in the third column in Article 181 , Limitation Act are confined to the first default or include every fresh accrual of the right to apply upon the happening of each successive default and limitation for applying for a final decree for the balance then due may be counted from the accrual of the last default? ", "2. Whether in such a case the right to apply for a final decree in respect of the instalments not barred by limitation as individual instalments, remains intact in spite of the omissions to take advantage of the default clause? ", "3. Whether the answers to the above two questions would be affected if the default clause instead of being worded as \"the decree-holder shall have a right to apply,\" or \"the decree-holder shall have the option to apply\", is worded as \"the entire decretal amount shall become payable,\" or \"the entire decretal amount shall become due\", or, \"the judgment-debtor shall pay the entire decretal amount\", even though in all these cases the default clause be intended for the benefit of the decree-holder? ", "We, therefore, order that the case may be laid before the Hon'ble the Acting Chief Justice for the constitution of a Full Bench for a decision of the above questions. ", "Opinion of the Full Bench , ", "33. The following questions have been referred to us for decision by a Bench of the Court: [After stating the questions referred his Lordship continued]. ", "34. The appellant judgment-debtors brought a suit for accounts under Section 33 , U. P. Agriculturists' Belief Act. On 6-10-1936, a decree-was passed in favour of the creditor-respondent. The amount found due was made payable in 12 sis-monthly instalments. It was provided that on failure of payment of two instalments the whole amount would become payable with interest allowed by law : (kul mutalba ek musht mal sood qanuni lagaya jawe). The first instalment was made payable on 23-6-1937, and the last on 23-12-1942. No instalments were paid. An application for the preparation of a final decree in respect of all the twelve instalments was made on 26-7-1943. An objection was taken to the preparation of the final decree by the judgment-debtors on the ground that the application was time-barred because on failure of payment of two instalments a right to apply for the preparation of final decree had accrued, to the decree-holder on 23-12-1937. ", "35. held that the application for the preparation of a final decree was time-barred but as in its opinion, the decree was a final decree and no application for preparation of a final decree was necessary, it held that the decree-holder may apply for execution. Later, however, the execution application was also dismissed upon the ground that the decree-holder ought to have applied for the preparation of a final decree. The decree-holder appealed against both these orders. The lower appellate Court dismissed the appeal against the dismissal of the execution application on the ground that the memorandum of appeal was not properly presented. It, however, allowed the appeal in part against the order dismissing the application for preparation of a final decree. ", "It held that the application for preparation of a final decree was within time so far as the five instalments which were within three years of the making of the application were concerned and remanded the case to the lower Court for the preparation of a final decree in respect of those five instalments. The decree-holder submitted to this order, but the judgment-debtors appealed to this Court, and the only question urged before the Bench which made the reference to this larger Bench was, whether the application for preparation of a final decree was time-barred. A further point was urged before us to the effect that no application for the preparation of a final decree could be made, because the decree was a final decree and not a preliminary decree. As this point was not raised before the Bench and has not been referred to us, we have not entertained it. ", "36. The relevant case law has been discussed in the referring order and it is not necessary to repeat what has been stated therein. ", "37. The Article of the Indian Limitation Act applicable to an application for the preparation of a final decree is 181. The period of limitation for the application is three years and it begins to run from the time \"when the right to apply accrues.\" The right to apply may occur only once or may occur more than once. It will all depend upon the cause of action. It is an error to suppose that in all cases the right to apply can accrue only once. No doubt, for one particular cause of action the right to apply can accrue only once. But where there are different causes of action, or where after the accrual of one cause of action, another cause of action arises by reason of a change in the circumstances the right to apply can be said to arise upon the accrual of each of the causes of action. ", "For example, in respect of a preliminary decree payable by instalments when there is no defaults clause, as many applications for the preparation of a final decree can be made as there are instalments to be recovered. It cannot be that in such a case there should be only one final decree, for if an application for the preparation of a final decree is made after default is made in the last instalment, some of the earlier instalments may have fallen due more than three years earlier. Thus the first principle to be remembered is that when we speak of 'the right to apply', what is intended is the right to apply for a particular cause of action bearing in mind always that there may be more than one causes of action under one decree. ", "38. Let us take a case in which the decree is for the payment of a certain amount by instalments, with a condition that if a certain number of instalments say, two, are not paid in time, the whole amount will become payable forthwith. If the first instalment is not paid, there can be no doubt that before the second instalment has fallen due, the decree-holder can apply for the preparation of a final decree in respect of the first instalment. ", "39. Now, let us assume that the second instalment is also not paid. The decree-holder is entitled to apply for the preparation of a final decree for the whole of the amount then due. But when the whole of the amount has fallen due, can the decree-holder apply for the instalments alone ignoring the fact that the whole amount has fallen due by reason of the breach of the condition ? To my mind the answer must depend upon whether the condition gives an option to the decree-holder or not. If he has no option at all, then the provision for payment by instalments ceases to exist and no longer is there any right in the decree-holder to apply in respect of the instalments and he must apply for the enforcement of the condition alone. But if the decree- ", "holder has an option to enforce the condition or not to enforce it, there is no reason why he should not be able to waive the condition and enforce payment of the instalments as and when they fall due. ", "40. Again, if there is no option with the decree-holder to waive or condone the default made in payment of the instalments so that the condition comes into operation in spite of his desire to the contrary, there can be only one cause of action for applying on the basis of the condition and he cannot waive one default and apply on the basis of a second or subsequent default. But when the condition gives an option to the decree-holder whether to enforce it or not to enforce it and entitles him to waive or condone the default, the question is whether even in such a case the decree-holder is bound to apply for the recovery of the whole amount due under the condition on the very first default or he can waive the default and apply on the basis of a subsequent default. To my mind, the decree-holder can waive the first or subsequent default and apply for the preparation of a final decree on the basis of the default not waived. Of course, in such a case he cannot claim to recover instalments already barred by time. To hold that he is bound be apply on the very first default is to hold that he has no option which would be to deny the very hypothesis upon which the question is posed. ", "It is said that the right to apply must mean the first right to apply, and that, therefore, even though there is an option in the decree-holder to enforce the default clause or not to enforce it, still he must apply upon the very first default. I cannot accept this argument. It seems to me that if the decree-holder has a right to waive or condone the default he can avail of the second default and then apply, because his right to apply upon each subsequent default when the previous defaults have been waived is based upon a different cause of action. The first cause of action arose when there was default in the payment of the first two instalments. That having been waived or condoned, it is washed out and it will be treated as if it had never arisen. In other words it may be said that when a default is waived or condoned, no cause of action arose at all on the first default and, therefore, no right to apply accrued. In the circumstances, the second default gives the decree-holder a different cause of action. ", "A cause of action, as is well known, is a bundle of all the material facts upon which a right of action is based. When the first default is waived, the cause of action based on the second default comprises of a different set of facts. It may be that when the first default is condoned and an application is made on the basis of a second or subsequent default, the relief claimed is the same as would have been the ease if the applications were made on the basis of the first default and it is also true that in both cases, whether applying on the basis of the first default or applying on the basis of the second default the same condition is being enforced. But this is wholly immaterial as a cause of action does not depend on the relief claimed, vide Mt. v. , 10 cal. 98 (P. c.) at p. 102. ", "41. In my opinion, the principle enunciated by in , 1932 ALL. L. J. 913 (P.C.) is a principle which is applicable not only to a case falling under Article 132 , but to all cases wherever there is an option given to a creditor or decree-holder to waive a default because it is based on equity and justice. Adopting the observations of their Lordships to the case in hand it may be said that the condition being exclusively for the benefit of the decree-holder, it purports to give him an option either to enforce it at once or not to enforce it and to recover the instalments as stipulated. If on the default of the judgment-debtor by the breach of the terms of the decree providing for payment of instalments the right to apply for the final decree accrues once and for all, it is clear that the intention of the parties is defeated and what was intended to be for the benefit of the decree-holder is turned to his disadvantage and leaves no option to him. ", "42. The observations of their Lordships that: ", "\"If In the Indian cases the question were 'when did the mortgagee's cause of action arise?' i.e. when did he first become entitled to sue for the relief claimed by his suit--their Lordships think that there might be much to be said in support of the Allahabad decision\" ", "should not be taken to mean that their Lordships finally decided that the mortgagee's cause of action arose on the first default even though the mortgagee had a right to waive or condone the first default. To my mind the decision of in , 54 Ind. App. 272: 5 Rang. 422: A. I. R. 1927 P. C. 146 is decisive upon the question under consideration. In that case there was a decree against the husband in favour of the wife directing the husband to pay Rs. 2,000 annually to the wife and to remain in possession of the disputed property. It further provided that in case of default of payment, the wife would be entitled to take possession of the property. There was default on several occasions. More than three years after the first default, the decree-holder applied on the basis of a fresh default for recovery of the amount then due and also for the recovery of possession over the disputed property. ", "It was held, that the decree-holder was entitled not only to the instalments claimed but also to the delivery of possession of the disputed property and that the application for delivery of possession was made within time. The application for delivery of possession of the property could only be under Article 181 , Limitation Act , and this case, therefore, is a direct authority upon the points arising in the present case. This was the view taken of this case and a Full Bench of this Court, , 51 ALL. ", "237 (F.B.) and I respectfully agree with what was held in that case. The principles I have discussed above would apply not only to Article 181 but also to other Articles in the Limitation Act in which the amount is payable by instalments and there is a default clause, e. g., Arts. 80 and 132. ", "The same view was taken by a single Judge of this Court in v Sakal Raj A. I. R. 1945 ALL. 161, by in v. , A. I. R. 1938 Oudh 112 and by in , A. I. R. 1942 Mad. 581. In these two cases when the learned Judges stated that the cause of action arose on each subsequent default, I have no doubt that they had the principle of waiver in their minds. The non-exercise of the option on the previous defaults was considered by them to be enough to show that the default was condoned or waived. ", "43. The question of construction of a condition clause does not present much difficulty. When a debtor agrees to make payment by instalments or when the decree directs payment by the judgment-debtor in instalments, the direction is for the benefit of the debtor or the judgment-debtor. The default clause is inserted to ensure regular payment of the instalments and is solely for the benefit of the creditor. It may be expressed in a hundred ways, but the object in all cases is the same. Therefore, even if in the default clause instead of expression \"the decree-holder or the creditor shall have the option of realising the whole amount\", the expression used is \"the whole amount shall become due or shall become payable\", it is not intended that the creditor has no option in the matter. ", "This was so held in cast already referred to, 51 ALL,. 237 F. B. The view taken by is further fortified by a reference to the language of Article 75 , Limitation Act . In the default clause therein prescribed the words used are \"the whole shall be due\" and no option is expressly mentioned, and yet it is clear that the treats this clause also as giving an option to the creditor which he can waive, vide the third column of the Article. ", "44. , 2 ALL. 443 and in , 2 Bom. 356, the held that a provision similar to the provision in the present case implied that the instalment arrangement ceased to exist. With respect, I am unable to agree with this construction of the default clause. There was no express statement that the instalment arrangement shall cease and there was nothing to show that the default clause was not for the benefit of the creditor but was equally intended for the benefit of the debtor. ", "45. In my opinion the ease of Mt. Bhagwati v. , A. I. R. 1946 ALL 360, was not correctly decided. In that case a Bench of this Court construed the default clause which was in very much similar terms to the default clause in the present case as if it extinguished the instalment arrangement and left no option to the decree-holder. This was contrary to the decision in case, 51 ALL. 237. Further when the learned Judges observed that \"when the right to apply accrues\" under Article 181 means \"when the right to apply first accrues\", they overlooked that even so the right to apply may accrue more than once upon different causes of action under the same decree or bond. ", "46. There is only one more case, Chuni Lal Motiram v. , A. I. R 1950 Bom. 188 : I. L. R. 1951 Bom. 65 which needs consideration as it was decided after the referring order was made. In that case there was an award decree payable by instalments of Rs. 1,000 with interest. The first of such instalments was made payable in March or April 1932, and each subsequent instalment on the succeeding March or April, of every year. It was also provided that in default of payment of any two instalments the plaintiffs might recover the whole balance that would remain over after the deduction of payments received in one lump sum by sale of the mortgaged property. A sum of Rs. 1,195 was paid by the judgment-debtor on 24-11-1931. A further sum of Bs. 1,260 was paid on 14-11-1932. On 17-4-1933, a sum of Rs. 105 was paid by the judgment-debtor. On 5-10-1936, the decree-holder filed an application for execution of the whole amount then due on the ground that there has been a default in payment of the first and second instalments. The question was whether this application was within time. As the application was made on the basis of the default of the first two instalments the application was clearly time-barred. ", "It will be observed that the application was not based on the default in payment of any subsequent instalments which defaults were within time. With respect, the decision in that case was right, but there are certain observations which require comment. Said their Lordships, \"In would of fallacious to argue that in case of each default there is a separate right which accrues to the decree-holder There may be subsequent defaults, but the right having once accrued to the decree holder, limitation would run notwithstanding the subsequent default and subsequent default would not give him further rights, the right having already accrued to him when the first default took place.\" ", "Then their Lordships added : ", "\"The only exception to this proposition is a question of waiver or condonation on the part of the decree-holder. It would be open to the decree-holder not to treat the non-payment of the instalments on the due date as a default at all. He may waive or condone the default, in which case limitation would not run from the def alt which was condoned or waived but from the default which the decree-holder treated as a default under the decree. ", "47. After making these observations the learned judges pointed out that in the case before them no question of waiver or condonation arose as the decree-holder treated the first default made by non-payment of two instalments as a default under the decree and it was on the basis of that default that he filed his darkhast of 1936 claiming the whole amount due under the decree. It is, therefore, clear that the learned Judge held that if the decree-holder \"waived or condoned the default\" or, in other words, exercised his option not to enforce the default clause on the first default, limitation would not begin to run against him. This is precisely what I have stated above. The learned judges, however, seem to have been of the opinion that there must be an agreement of both parties in order that waiver or condonation may take effect. Say they : ", "\"Where the parties agree not to treat failure on the due date as a default then in the eye of law there is no default at all and limitation does not begin to run and the parties will be estopped from saying that there was default when they did not in fact treat it as such.\" ", "48. With all respect there is a contradiction in terms in saying that a party has an option to waive or condone a default, and yet he cannot exercise his right without the consent of the debtor or judgment-debtor. The option to waive a default or to condone a default is a right exclusively vested in the creditor which can be exercised by him at will. Its exercise does not depend upon the agreement of the debtor. A debtor may induce the creditor to exercise his option and waive a default in various ways. But the waiver or condonation is by the creditor himself. The learned judges seem to have used the word \"agree\" in the above quotation by reason of the observations of Sir in v. , 27 Bom. 1 at p. 10, to the following effect: ", "\"The true view appears to me to be, that though there may be a failure to pay punctually under an instalment decree, still the subsequent conduct of the parties may preclude either of them from afterwards asserting that payment was not made regularly and in satisfaction of the obligation under the decree.\" ", "49. Sir was referring to the conduct of both the parties because he was laying down that both of them are precluded from afterwards asserting the contrary of what would be the justifiable inference from their conduct. The case before his Lordship was a case in which payment of an instalment had been offered by the judgment-debtor after the default had been made and had been accepted by the decree-holder. The acceptance of the payment amounted to a waiver or condonation of the default by the decree-holder and the payment of the amount precluded the judgment-debtor from asserting that there was no such waiver or condonation. His Lordship never laid down that waiver or condonation of a default could only be made by an agreement with the judgment-debtor. ", "50. Sometimes, no doubt, it is said that waiver is based either on fresh contract or estoppel, vide Halsbury's Laws of England, Vol. VII, p. 204. But the waiver which in order to be effective must be based on fresh contract or estoppel is not the waiver of an advantage under an optional clause. It is the waiver of the very right of the performance of the contract in a particular manner and that manner alone. If a debtor pleads that he is released from the performance of a contract because the creditor has waived his rights under the contract, he has to show that the waiver of the right to have the contract performed or a release from the obligation of the performance of a contract was such as would be binding upon the creditor, e.g. either by reason of estoppel or by reason of a fresh agreement (which must be under the Indian Law for consideration and which may be under the English Law for consideration or under seal) vide Halsbury's Laws of England, Vol. VII, p. 250. ", "This principle is not applicable to the exercise of an option by a creditor. No fresh agreement or estoppel is required for the effectiveness of the exercise by a creditor of the option to waive or condone a default. The distinction between the two classes of cases should always be borne in mind when dealing with a question of waiver. ", "51. Proof of waiver or condonation of a default will depend upon the circumstances of each case. Where a creditor asserts that he has waived or condoned previous defaults and applies to enforce the default clause upon the happening of a subsequent default, he is entitled to do so unless it could be shown by his previous conduct that he has already exercised his option in a different, manner. ", "52. Upon the facts of the present case the decree-holder must be deemed to have waived his right of action when defaults were made and was, therefore, entitled to enforce the decree, but in doing so he could not claim instalments that had already become time-barred. ", "53. I would, therefore, answer the questions referred to us as follows: ", "1. The words \"when the right to apply accrues\" in Col. 3 in Article 181 , Limitation Act must mean the first default giving rise to the particular cause of action on the basis of which the application for a final decree is made, unless there has been a waiver, express or implied, of the first default in which case the words \"when the right to apply accrues\" would mean the next succeeding default which is not waived but the decree-holder will have a right to apply for realisation of each successive instalment as it falls due, provided the decree is not so worded that the only right left to the decree-holder after the first default is to realise the whole decretal amount. ", "2. My answer to the second question is the same, that is, the right to apply for a final decree in respect of the instalments not barred by limitation as individual instalments would remain intact in spite of the omission to take advantage of the default clause provided the default clause is not so worded that the decree-holder has a right to rely on that alone and the decree after the default ceases to be an instalment decree. ", "3. It is immaterial that the default clause is worded as \"the decree-holder shall have a right to apply\", or as \"the decree-holder shall have the option to apply\" or as \"the entire decretal amount shall become payable\", or as \"the entire decretal amount shall become due\", or as \"the judgment-debtor shall pay the entire decretal amount\", as in all such cases the default clause is to be interpreted liberally and for the benefit of the decree-holder and the rights of the decree-holder mentioned by us in our answers to questions 1 and 2 will not be affected. ", ", ", "54. I have had the advantage of going through the judgment prepared by brother and it is not necessary for me to deal with the questions at length. ", "55. To my mind in an instalment decree with a default clause the question for consideration is whether on a true interpretation of the decree after a default is made the only cause of action surviving to the decree-holder is the cause of action based on the default clause or the causes of action for payment of instalments on the dates fixed survive even though default may have been made and the whole amount may have become recoverable. If the decree ceases to be an instalment decree on default and the only relief avail, able to the decree-holder is the relief for realisation of the whole amount, the application must be made within three years of the date on which the default was made giving rise to a right to recover the whole amount. If, however, the default clause gives the decree-holder a mere right or an option, there appears to be no reason why he should not avail himself of the option and choose his remedy. In my opinion, the question must depend upon the interpretation of the decree itself. ", "56. would probably clarify matters if I were to give a few illustrations. If an instalment decree provided in clear terms that on default of two instalments being made the decree shall cease to be an instalment decree and the whole amount would become payable at once, the only cause of action available to the decree-holder after the second default must be to apply for a final decree for the whole amount in accordance with the provisions of the default clause. If, however, the decree provided that it would be payable by instalments but in case of default of two instalments the decree-holder will have the further right to recover the whole amount at once or to let the judgment-debtor pay by instalments fixed in the decree, the decree-holder will have clearly the right to apply for a final decree for the whole amount on the date of the second default or he can apply for a final decree for each amount remaining unpaid as it fell due. In between these two extreme cases are the large variety of cases where the meaning is not clear and it is for the to interpret the decree and come to the conclusion what it was really meant to provide. ", "57. When interpreting a decree in such a casa I would, unless the terms of the decree clearly rule out such an interpretation, rather hold that it was an option given to the decree-holder than that the instalment decree had ceased to be an, instalment decree and the decree-holder was compelled to realise the whole amount in a lump sum. It must, in this connection, be remembered that instalments are fixed for the benefit of the judgment-debtor while the default clause is for the benefit of the decree-holder and unless the terms of the decree clearly provide to the contrary what was given as a benefit to a decree-holder should not be interpreted as an obligation placed on him, ", "58. It must further be remembered that on a claim being time barred it does not get extinguished unless such a claim comes under Section 28 , Limitation Act which applies to suits for possession of property and provides that on the determination of the period fixed for such a suit the right to such property is extinguished. If therefore, there are a number of causes of action given to a decree-holder and those causes of action are not extinguished by the terms of the decree, there is no reason why for the relief appropriate to the cause of action the decree-holder cannot come to within three years of the date when the right to apply for the particular relief claimed accrued to him. ", "59. I may, however, make it clear that when a right to apply on the basis of a particular cause of action arises, it is the first date of the arising of the cause of action that is material for an application under Article 181. Subsequent breaches in payment of instalments cannot be relied upon to give each time a fresh right to rely on the default clause and to claim the whole decretal amount. ", "60. A case may arise, however, in which defaults have been made in payment of instalments giving rise to a right in the decree-holder to claim the whole amount, but before the decree-holder could bring such a claim the judgment-debtor had paid up the instalments with reference to which he had defaulted and the decree-holder had waived the default with the result that he had no longer the right to rely on the default clause, thereafter if on a later date fresh defaults are made, would the decree-holder have the right to rely on the fresh defaults and bring a suit for realisation of the whole amount then due? As at present advised I consider that the decree-holder having waived the default the cause of action on the earlier defaults had ceased to exist and the decree-holder can rely on the subsequent defaults, claim that there was a fresh cause of action and apply within three years from the date when the fresh cause of action accured in his favour. ", "61. In this connection I would like to point out that though there is a difference in the language of Article 75 and Article 181 , and while under Article 75 a creditor can waive a default and the cause of action would then arise on the date the next default not so waived is made, Article 181 provides for three years from the date when the right to apply arises and makes no mention about waiver of a right to apply, to my mind, the difference in the language does not make any difference in the case of decree payable by instalments. ", "62. Coming back to the terms of the decree before us I can find nothing in it which would compel me to hold that the decree had ceased to be an instalment decree on failure of payment of two instalments. The last instalment was payable on 23-12-1942, but no instalments were paid. After 23-12-1942, there was no question of the plaintiff being able to rely on the default clause. If the decree is interpreted in the sense that it had not ceased to be an instalment decree and it was, therefore, open to the decree-holder not to avail himself of the option given to him to rely on the default clause and claim the whole amount, the application for preparation of a final decree made on 26-7-1943, would not be time-barred about the instalments which fell due within three years from the said application. ", "63. I, therefore, agree with my learned brother that the decree-holder was entitled to have a final decree passed in his favour for the instalments which had not already become time-barred and would answer the questions referred to us in the manner proposed by him. ", ", J. ", "64. I entirely agree with my Lord the Chief Justice. ", "65. By the Court--The answers to the questions referred to the Full Bench are as below: ", "1. The words \"when the right to apply accrues\" in the third column in Article 181 , Limitation Act must mean the first default giving rise to the particular cause of action on the basis of which the application for a final decree is made, unless there has been a waiver, express or implied of the first default in which case the words \"when the right to apply accrues\" would mean the next succeeding default which is not waived, but the decree-holder will have a right to apply for realisation of each successive instalment as it falls due, provided the decree is not so worded that the only right left to the decree-holder after the first default is to realise the whole decretal amount. ", "2. The answer to the second question is the same, that is, the right to apply for a final decree in respect of the instalments not barred by limitation as individual instalments would remain intact in spite of the omission to take advantage of the default clause provided the default clause is not so worded that the decree-holder has a right to rely on that alone and the decree after the default ceases to be an instalment decree. ", "3. It is immaterial that the default clause is worded as \"the decree-holder shall have a right to apply\", or as \"the decree-holder shall have the option to apply\", or as \"the entire decretal amount shall become payable\", or as \"the entire decretal amount shall become due\", or as \"the judgment-debtor shall pay the entire decretal amount\", as in all such cases the default clause is to be interpreted liberally and for the benefit of the decree-holder and the rights of the decree-holder mentioned by us in our answers to questions 1 and 2 will not be affected."], "relevant_candidates": ["0000035468", "0000158516", "0000201545", "0000327334", "0000504870", "0000565089", "0001114727", "0001575754", "0001691127", "0020740455"]} {"id": "0000123740", "text": ["JUDGMENT , J. ", "1. This is a plaintiff's second appeal. The plaintiff's are , his two sons and , and his wife Smt. . Plaintiff No. 1 has been separate from the other plaintiffs, and there has been a partition between them. Plaintiff No. 1 is the owner of a half share, and the other plaintiffs are the owners. of the remaining half share of certain premises in Muzaffarnagar known as the \"Royal Talkies\". The building together with its fittings and ceiling fans had been leased to who was the father of defendants Nos. 1 and 2 and the husband of defendant No. 3 who are respondents before us. died some time in 1949 and the defendants have since then continued in occupation as tenants. It is common ground that the defendants caused material alterations in the building and. substantially damaged the same without the consent of the plaintiffs. The plaintiffs were therefore driven to the necessity of instituting suit No. 268 of 1950 against them in the court of the Munsif of Muzaffarnagar, in which the prayer originally was that the defendants should be restrained by an injunction from making any alterations in the property and from damaging the same so long as the property had continued in their possession as tenants. Later on, by an amendment of the plaint, a relief for recovery of a sum of Rs. 2,000/- as. damages had been added. The suit aforesaid was-instituted on the 29th of March, 1950. It was decreed upon compromise on the 20th of March 1952, on payment of a sum of Rs. 1,000/- to the plaintiffs. During the pendency of that suit an application was made to the District Magistrate of Muzaffarnagar by requesting. that he may be granted permission under the U. P. Control of Rent and Eviction Act , No. III of 1947, to file a suit for ejectment of the tenants or occupants namely, \", etc.\" because they had damaged the building to a very great extent and also because the plaintiffs wanted the building for starting their own business inasmuch as by the prospective legislation for the abolition of the zamindari rights their income would be materially affected. The permission sought for was granted. Thereupon the plaintiffs instituted Suit No. 87 of 1950 in the court of Civil Judge of Muzaffarnagar on the 2nd of December, 1950, for the ejectment of the defendants and for recovery of arrears of rent and mesne profits after giving the defendants a notice dated the 5th of July, 1950, by which they intended to terminate their tenancy from the Ist of August, 1950. ", "2. The defendants resisted the suit on the ground that in view of the provisions of the U. P. Rent Control and Eviction Act the permission obtained from the District Magistrate was of no help to the plaintiffs and that they had no cause of action against them. They further pleaded that the notice of ejectment was not in accordance with law, firstly, because six months notice to quit was necessary, and, secondly, because the notice was served prior to the sanction given by the District Magistrate. They further contended that no forfeiture had been incurred by them and they pleaded Order II, Rule 2 as a bar to the suit, ", "3. The trial court held that the defendants had substantially damaged and materially altered the building within the meaning of Section 3 of the U. P. Control of Rent and Eviction Act , (Act III of 1947), that Order II, Rule 2 barred the suit inasmuch as in the previous suit for damages the plaintiffs could make relief for ejectment and they did not; that no defect attached to the permission of the District Magistrate obtained by the plaintiffs under the Rent Control Act; that the notice of ejectment given under Section 106 of the Transfer of Property Act was a valid notice and that the plaintiffs were entitled to a decree for Rs. 525/- towards arrears of rent and for Rs. 900/- for use and occupation. In ranting the plaintiffs a decree for ejectment and drecting the defendants to vacate the premises within two months, the trial court observed: ", "\"In view of my findings above that the permission obtained from the District Magistrate to bring the suit is valid and that the notices of ejectment served to the defendants are also valid, the defendants are liable to be ejected from the cinema house.\" ", "4. Against the decision aforesaid the defendants preferred civil appeal No. 269 of 1953 before the District Judge. The appeal was heard by the Additional District Judge of Meerut. The Additional District Judge held that the sanction accorded by the District Magistrate was defective inasmuch as it was in favour of only one plaintiff, namely, and against only one defendant, namely, ; and that a suit based on such a defective sanction was not maintainable. The lower appellate court agreed with the view of the trial court in holding that the defendants substantially damaged and materially altered the building within the meaning of Section 3 of Act III of 1947 so as to make them liable to ejectment on that ground. ", "But the lower appellate court further held that since the plaintiffs aid not seek ejectment of the defendants in Suit No. 268 of 1950 aforesaid, the present suit in regard to ejectment was barred by Order II, Rule 2 of the Code of Civil Procedure, The lower appellate court concurred in the view of the trial court that the notice of ejectment given under Section 106 was a perfectly valid notice. The lower appellate court accordingly allowed the appeal in part, modified the decree of the trial court, dismissed the suit for ejectment and granted the plaintiffs a decree for Rs. 1225/- as arrears of rent from the 1st of May 1950 to 30th of November, 1950. ", "5. Against the decision of the Additional District Judge this second appeal has been preferred by the plaintiffs and two points have been urged, namely, (1) That the suit for ejectment was not barred by Order II, Rule 2 of the Code of Civil Procedure; and (2) That the permission granted by the District Magistrate under Section 3 ot Act III of 1947 was a valid and good permission. ", "6. On the other hand it has been contended by the defendants-respondents that the notice given was defective and the lease has not been determined and that in any event there has been a waiver. ", "7. We have already stated that the building together with its fittings and ceiling fans had been leased to who was the father of defendants Nos. 1 and 2 and the husband of defendant No. 3. In 1946 . the plaintiff instituted Suit No. 899 of 1946 in against the aforesaid for his ejectment and for recovery of certain amount as rent. The suit was compromised on the 28th of April, 1947. According to that compromise upon the fulfilment of certain conditions by , the said was to continue as tenant of the property for a term of three years beginning from the 1st of May, 1947, on a rent of Rs. 175/- per month. The conditions were fulfilled and continued in occupation of the property as tenant. died some time in 1949. ", "The defendants continued in occupation of the property as tenants and their possession as tenants had been recognised by the plaintiffs in Suit No. 268 of 1950 referred to above by which the plaintiffs sought a relief for injunction restraining the defendants from making any alteration in the property and from damaging the same as long as the property continued in their possession as tenants. It was no doubt by a later amendment of that plaint that a relief for recovery of a sum of Rs. 2,000/- as damages had been added. The suit aforesaid was decreed upon compromise on the 20th of March, 1952, on payment of a sum of Rs. 1000/-. As a lease is a transfer of an estate of inheritance, it does not terminate with the death of the original lessee, but survives during the: remainder of the term of his heirs and representatives and if the heirs and representatives are acknowledged as tenants and they continue in occupation of the premises as tenants after the efflux of the time limited by the original lease, there is holding over. ", "8. The question which we now propose to dispose of is whether the permission granted by the District Magistrate under Section 3 of the U. P. Control of Rent and Eviction Act No. III of 1947 was a valid and good permission. The permission of the District Magistrate for a suit for ejectment postulated under Section 3 of the U. P. Rent Control and Eviction Act relates to cases which are not covered by Clauses (a) to (g) of that section. Clause (b) covers a case where the tenant has wilfully caused or per-mitted to be caused substantial damage to the accommodation. ", "Clause (c) covers a case where the tenant has, without the permission in writing of the landlord, made or permitted to be made any such construction as in the opinion of the court has materially altered the accommodation or is likely substantially to diminish its value. If the suit is regarded as one falling under Clauses (b) and (c) the permission of the District Magistrate would not be necessary. In the present case there is concurrent finding of fact of the two courts below that the tenants wilfully caused or permitted to be caused substantial damage to the accommodation and they without the permission in writing of the landlord, made constructions which materially altered the accommodation. The present case was therefore covered by Clauses (b) and (c) of Section 3 and the permission of the District Magistrate would not therefore be necessary. ", "9. Coming now to the actual permission it appears that on the 1st of September, 1950, an application was made by alonejo the District Magistrate in which he stated that \", etc.\" had been occupying the cinema hall as tenants; that they had made substantial alterations in the building which caused damage to the building to a great extent; that he did not wish them to continue in occupation of the building, the more so because after the abolition of the zamindari, which was his main source of income, his resources would be considerably affected and he wanted the accommodation for himself in order to start some business. requested the District Magistrate to grant him the permission to file a civil suit against the \"occupiers\" for their eviction. The District Magistrate granted the permission which was conveyed by the Rent Control and Eviction Officer of Muzaffarnagar to . This communication, which is dated the 13th of October, 1950, was as follows: ", "\"Please refer to your application dated 1-9-1950 addressed to the District Magistrate. I have the honour to communicate the order of the District Magistrate given below. 'I have perused the report of the D. S. O. and Cinema Officer. The tenant has made unauthorised alterations in the cinema hall. The consent of the owner has not been established. Due to the impending zamindari abolition legislation the personal need of the owner is genuine. Permission will be awarded to the owner to file a civil suit for the ejectment of the tenant.' \"Hence under the orders of the District Magistrate you are hereby accorded permission to file a civil suit against your tenant Sri Debi Prasad under Section 7 of the Rent Control and Eviction Act .\" ", "10. In regard to the permission aforesaid it has been contended on behalf of the appellants that the lower appellate court's view that this permission was defective because it was in favour of only one of the landlords, namely, and against only one of the tenants, namely, was not based upon a correct appreciation of matter. , AIR 1956 All 175 (A), a learned Judge of this Court held that where permission to sue for ejectment has been obtained under Section 3 , it will automatically enure not only to the benefit of the person who obtained it but also to the benefit of the others who were interested in filing the suit. ", "It was further held that where it is mainfest that all the plaintiffs landlords who were interested in the matter brought the suit after serving a notice on the tenants to vacate the premises in suit, it will be deemed that the plaintiff who obtained the permission acted as agent on behalf of the other plaintiffs. We are in accord with that view. We are further of opinion that where an order of the nature covered by the present suit has been obtained by one of the plaintiffs who will be deemed to have acted as agent on behalf of the other plaintiffs for the ejectment of \"the tenant\" and the order specifies only one such person as tenant the order will be deemed to cover the entire body of tenants and not simply one out of them whose name was specified, not by the District Magistrate but by the Rent Control Officer. We have quoted the order of the District Magistrate and in that order the District Magistrate granted permission \"to the owner\" to file a civil suit for the ejectment of \"the tenant\". Such a permission was therefore valid and it automatically enured to the benefit of the entire body of owners or landlords against the entire body of the class designated as \"the tenant\". ", "11. Under Section 108(o) of the Transfer of Property Act the lessee must not pull down or damage buildings' belonging to the lessor or commit any other act which is destructive or permanently injurious thereto. It is clear that the tenant cannot make structural additions and alterations without the consent of the landlord. Alterations that are not authorised amount to a breach of the implied covenant mentioned in Clause (m) of Section 108 . Such alterations will also be a breach of the implied covenants mentioned in Clauses (o) and (p) of the section. ", "12. Section 111 of the Transfer of Property Act, inter alia provides that a lease of immovable property determines. (a) by efflux of the time limited thereby;..... (g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter and the lessor gives notice in writing to the lease of his intention to determine the lease..... (h) on the expiration of a notice to determine the lease duly given by one party to the other. ", "13. Leases for a definite period, such as a lease for a year, or for a term of years, expire on the last day of the term and the lessor may enter without notice or other formality. Under Clause (g) of Section 111 a breach of condition only makes the lease voidable, the forfeiture is not complete unless and until the lessor gives notice that he has exercised his option to determine the lease. In v. , (1947) 1 All E. R. 116 (B) it has been explained that when a forfeiture of a lease is incurred the lease is voidable and not void and in those circumstances the giving of a notice to quit may recognise the subsistence of the lease and may amount to a waiver of forfeiture, but when the tenancy is determined by a notice to quit the position is entirely different. When a valid notice to quit is given, the lease is determined and a new tenancy can be created by an agreement, express or implied, and no such agreement can be inferred from the fact of service of a second notice. ", "14. Under Section 112 of the Transfer of Property Act a forfeiture under Section 111 , Clause (g) is waived by acceptance of rent which has become due since the forfeiture, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting, provided that the lessor is aware that the forfeiture has been incurred; provided also that where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture such acceptance is not waiver. The election not to avoid the lease may be manifested in other ways besides acceptance of rent. Instances of such acts showing an intention to treat the lease as subsisting are a demand of rent accruing due since the breach, a suit for such rent, or acceptance of a sum paid into court as damages for breach of covenant to repair alleged to have been committed during the term. ", "15. Keeping in view the principles stated above we now proceed to examine the facts of this case. The lease was created in favour of for a period of three years ending with the 30th of April, 1950. died some time in 1949. The defendants since then continued in occupation as tenants. They substantially and materially damaged the building and caused material alterations in it without the consent of the plaintiffs. This amounted to a breach of the implied covenants mentioned in Clauses (m), (o) and (p) of Section 108 of the Transfer of Property Act. ", "There was no express condition in the terms of the compromise decree dated 28-4-1947, in Suit No. 899 of 1946 of the court of Munsif Muzaffarnagar, referred to above, which provided that on breach thereof the lessor may re-enter. Even if an express condition like that is to be inferred from the compromise decree emanating from the implied covenants mentioned in Clauses (m), (o) and (p) of Section 108 of the Transfer of Property Act, a breach of the condition only makes the lease voidable and the forfeiture woiild not be complete unless and until the lessor gave notice that he had exercised his option to determine the lease under Section 111 , Clause (g) of the Act. ", "The forfeiture under Section 111 , Clause (g) in the present case must be deemed to have been waived not only by acceptance of rent which became due since the forfeiture but by the act on the part of the lessor in the subsequent suit No. 268 of 1950 brought against the tenants showing an intention to treat the lease as subsisting. As we have already said, such an intention on the part of the lessor must be inferred because, although the lessor was aware that the forfeiture had been incurred, the lessor in the suit aforesaid clearly indicated that the forfeiture has been waived; and that was why the lessor in spite of the forfeiture prayed for a relief of injunction restraining the tenants from making any future alteration in the building so long as the tenancy existed. ", "It appears that in Suit No. 268 of 1950 aforesaid a compromise was entered into between the parties. That compromise is on the record. It mentions that Suit No. 268 of 1950 as also Suit No. 57 of 1950 (namely, the present suit out of which this second appeal has arisen) had been compromised and that in Suit No. 268 of 1950 the plaintiffs had received Rs. 1000/- from the defendants. On 12-4-1952 when Suit No. 57 of 1950 was taken up for hearing, an application which is paper No. 127 C on the record, was made on behalf of the defendants. ", "In that application it was stated that the plaintiffs in their Suit No. 268 of 1950 of the court of the had unequivocally compromised the ground of claim, namely that the defendants tenants had materially altered and damaged the premises of the plaintiff and had accepted Rs.1000/-from the defendants by way of compensation\" for the said alterations and that in the light of the above fact the plea of damages or alteration of the premises did no longer remain open to the plaintiff in the present suit. The defendants therefore prayed that the plaintiffs' evidence on the said plea be disallowed and the compromise be admitted in support of the defendants' plea of waiver. ", "This application was disposed of by the learned Additional Civil Judge by an order dated 1-5-1952, by which he stated that Suit No. 268 of 1950 was compromised between the parties on the understanding that that case as also the present Suit No. 57 of 1950 shall be compromised together; that as a matter of fact the compromise of both these suits had been settled in open Court by the parties and thereafter the first suit was compromised on a payment of certain sum, while the terms of the compromise in the second suit were left to be recorded in writing and the completed compromise was to be filed the next day; that on the next day the parties informed the court that the corn-promise talks had fallen through on account of some misunderstanding and that it would therefore be wrong to contend that the compromise of the first suit should in any way lead to the shutting out of any evidence in this case. ", "Upon that view of the matter the learned Additional Civil Judge rejected Application No. 127 C. The learned Additional Civil Judge allowed evidence to be led on the question of material alteration or damage to the building and he held, independently of the compromise decree in the earlier Suit No. 268 of 1950, that there was material damage or alteration to the building. Whether it was open to the learned Additional Civil fudge to take fresh evidence on the point or whether lie should have taken that question to have been finally concluded by the compromise decree in Suit No. 268 of 1950 is not now necessary for us to decide. ", "In any event, the act of the plaintiffs in entering into a compromise in Suit No. 268 of 1950 and in accepting a sum of Rs. 1000/- as damages for the alterations in the building amounted, in our opinion to an act on the part of the lessor showing an intention to treat the lease as subsisting. In these circumstances and in view of Section 113 of the Transfer of Property Act the notice given under Section 111 Clause (h) must be deemed to have been waived with the express or implied consent of the persons to whom it was given by an act of the persons giving it, showing an intention to treat the| lease as subsisting. It follows therefore that the relief for ejectment and for damages for use and occupation, instead of for rent, was rightly refused by the lower appellate court. Upon this view of the matter, although we have disagreed with some of the findings of the lower appellate court, the refusal to grant the relief for ejectment must be upheld. ", "16. There remains only one other point to be determined and that is whether the present suit was barred by Order II, Rule 2 of the Code of Civil Procedure. In giving an affirmative finding on this issue the lower appellate court was swayed by the consideration that when the earlier Suit No. 268 of 1950 was filed the cause of action for ejectment had already accrued to the plaintiffs and since that cause of action was not made the subject of relief in that suit the present suit was barred under Order II, Rule 2. ", "This reasoning in our opinion is faulty. Suit No. 268 of 1950 for the relief of injunction was filed when the alterations were still in progress. It was during the pendency of that suit that an ad-ditional relief for damages had been added to that plaint. A suit for ejectment required determination of the lease by a prior notice under the Transfer of Property Act and it was on the expiration of that notice to determine the lease and that the lease will be deemed to have been determined under Section 111(h) of the Transfer of Property Act. On the date of that suit the lease had not been determined by a notice under Section 111(h) . Consequently a relief for ejectment could not have been made in that suit. ", "The argument that the plaintiffs could have asked the court that Suit No. 268 of 1950 should have been kept stayed for some time and that that interval could have been utilised for the giving of a notice for the determination of the lease and thereafter a relief for ejectment could have been added to the plaint in Suit No. 268 of 1950 by making certain additional averments in the plaint has only got to be stated in order to bear out our view that it has got no substantial basis for its acceptance. If a relief for ejectment could not have been made on the date the suit No. 268 of 1950 was instituted, the second suit for such a relief cannot be said to be barred by the principles of Order II, Rule 2 of the Code. In our opinion therefore the lower appellate court was wrong in holding that Order II, Rule 2 applied to the suit. ", "17. As a result of the finding reached by us, namely, that the notice given under Section 111 , Clause (h) must be deemed to have been waived and there was no determination of the lease and further that an intention on the part of the lessor to treat the lease as subsisting was manifest by their own action or conduct, this second appeal in our opinion has got no force and we accordingly dismiss it with costs."], "relevant_candidates": ["0000967465"]} {"id": "0000134532", "text": ["IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL Nos. 4849-4850 of 2000 Sita Ram Bhandar Society, New Delhi ....Appellant Vs. Lt. Governor, Govt. of N.C.T. Delhi & Ors. ......Respondents JUDGMENT ", "J. ", "1. These appeals are directed against the judgment of the Division Bench of dated 2nd September 1998 dismissing the writ petitions. The facts are as under: ", "2. On 13th November 1959, a Notification was issued by the Chief Commissioner of Delhi under 4 of the Land Acquisition Act (hereinafter called the \"Act\") notifying the Government's intention to acquire 34070 acres of land for the \"Planned ...2/... ", "2 ", "CA Nos.4849-4850/2000 Development of Delhi\". This notification had, within its ambit, agricultural land belonging to the appellant society, bearing Khasra No. 157 in Village Lado Sarai, Tehsil Mehrauli, Delhi measuring 8 Bighas and 11 Biswas or 8620 sq. yards equivalent to 1.8 acres. The appellant filed objections under Section 5A of the Act on the 10th December 1959 submitting that the land be exempted from the proposed acquisition. It pointed out that the appellant body was a registered trust and a religious body managing three temples in Pilani, Rajasthan and several gardens, water tanks etc. having religious significance. The objections raised were apparently found without merit whereafter the Chief Commissioner issued a declaration under Section 6 of the Act which was published on 16th May 1966 pertaining to 2153 Bighas 2 Biswas corresponding to about 448 acres. The Collector, Land Acquisition also rendered his award on 19th June 1980 clarifying that it pertained only to 1996 Bighas 18 Biswas leaving out an area of 156 Bighas 4 Biswas for the time being CA Nos.4849-4850/2000 as it was built up and that the award for this area would be given later. The appellant's property Khasra No.157 was, however, included in the award of 19th June, 1980. It appears that pursuant to the award possession of 1933 Bighas and 2 Biswas was taken by the Collector, Land Acquisition on the 20th June 1980 and further handed over to the beneficiary department. It was, however, observed in the proceedings of 20th June 1980 that the possession of the balance area of about 61 Bighas would be taken after the removal of the structures with the help of the demolition squad. On the 29 th July 1980 a Notification under Section 22 (1) of the Delhi Development Act, 1957 was issued by the Central Government, placing the acquired land at the disposal of for the planned development of Delhi. At this stage, the appellant filed CWP No.1068 of 1980 in challenging the validity of the Notification under Section 4 and Declaration under Section 6 of the Act. This petition was dismissed in limine on the 18 th August 1980. The appellant thereupon preferred Special CA Nos.4849-4850/2000 Leave Petition in this Court and after leave was granted the appeal was registered as C.A. No. 1738 of 1981. While the appeal was still pending, the appellant filed Writ Petition No.2220/1981 under Article 32 of the Constitution of India in . It appears that an interim order was made by in these proceedings on 15th of July 1981 staying dispossession of the appellant from the property in dispute and the said order was confirmed on 16th September 1982. Both the Civil Appeal and the Writ Petition aforementioned were, however, dismissed by this Court on the 20th July 1993. It also appears from the record that while the aforementioned two matters were pending in this Court, the appellant filed Suit No. 1226 of 1992 on the Original Side of praying for an injunction against the respondents, including , that no structure be demolished and that no interference be made with the plaintiff's possession and management of the Suit land. An interim injunction was also sought and obtained in these proceedings. It is the appellant's case that though the CA Nos.4849-4850/2000 aforesaid Suit was transferred to in Delhi on account of the revision of the pecuniary jurisdiction of , the said interim injunction still continued to operate, but despite the interim orders continued to impinge on the appellant's property on which a Contempt Petition was filed in the High Court, which in its order dated 19th May 1992, directed the respondent authorities to ensure compliance with order dated 2nd April 1992 made in the civil suit. It is further the case of the appellant that some time later again tried to interfere with the appellant's property on which yet another Contempt Petition No.36 of 1993 was filed and the same is said to be pending. The appellant, however, continued to be persist in its efforts to save the acquired land and at this stage filed C.W.P.No.700 of 1994 in on 28th January 1994 challenging, inter-alia, the constitutional validity of Section 22 of the Delhi Development Act, whereunder the acquired land had been handed over to the , and also praying for the CA Nos.4849-4850/2000 allotment of an alternative site in lieu of the acquired land. This writ petition was dismissed as withdrawn on September 8, 1995 the prayer of the counsel for the petitioner (the present appellant) in the following terms: ", "\"Mr. says, in view of the order dated 29.11.94, he would not press this petition at this stage and would apply for allotment of alternative land in the institutional area. ", "Dismissed as withdrawn. However, we will make it clear that allotment of the alternative land be made to the petitioner as per policy.\" ", "3. Still dissatisfied, the appellant filed W.P. No. 623 of 1995 in challenging some facets of the alleged violation of the Master Plan of 2001 which had statedly made the entire proceedings for the planned development of Delhi incohate and which had rendered the acquisition without any authority of law . This matter came up before after notice on 20th February 1995 on which observed that the petitioner was seeking two distinct prayers in the Writ Petition, (1) that the land which had been CA Nos.4849-4850/2000 acquired under the Land Acquisition Act should be released from acquisition and (2) that the should not be permitted to use the aforesaid land for a purpose other than that postulated in the Master Plan and the Zonal Development Plan and as the two prayers were mutually distinct and pertained to different causes of action, one writ petition was not maintainable. On this, the learned senior counsel for the appellant, Mr. stated that he would file two separate writ petitions for which liberty was granted and the papers of CWP No. 623 of 1995 were accordingly returned to the counsel. The appellant thereupon moved two writ petitions i.e. W. P. Nos. 1628/1995 praying that the respondent be restrained from taking over possession of the land and Writ Petition No. 1629/1995 seeking to challenge the land acquisition proceedings which had been initiated by the Notification under Section 4 and Declaration under Section 6 of the Act in the year 1959 and 1966 respectively and also pleading that as the possession had not been taken, the land be released under Section 48 of the Act. The Division CA Nos.4849-4850/2000 Bench while dealing with the question of possession held that the writ petitioner had only relied on two stray entries in two Khasra Girdawaris for the period 13th October 1980 to 11th March 1981 which had recorded the land to be \"Gair Mumkin Kotha Pukhta and Char Diwari\" and that this entry was meaningless in the light of the fact that the land had been described as \"Rosli\" (agricultural) and not a built up property in the award No.36/80-81 dated 19.6.1980 and that in any case the plea appeared to be an after thought as it had not been taken by the petitioner though it was available at the time when Writ Petition No. 1068/1980 (in ) and Writ Petition No.2220/1981 had been directly filed in this Court. The Court further held that it was clear from the proceedings recorded by , Land Acquisition, on 20th June 1980 in the presence of a large number of Revenue Officials that possession had indeed been taken over on that day after demarcation had been made with respect to 1933 bighas 2 biswas, including the land belonging to the appellant, and that boundary pillars had been affixed CA Nos.4849-4850/2000 round the demarcated land and that the possession had further been handed over to , Tehsildar on 20th, 21st, 23rd and 24th of June 1980. The Court also noted that the proceedings aforementioned were witnessed as to their authenticity by , and the two Officials, and . The Division Bench in this background observed that possession had, in fact, been taken over after appropriate proceedings. The two writ petitions were accordingly dismissed by the Division Bench of vide the impugned judgment leading to the present appeals as a consequence. ", "4. At the very outset, Mr. , the learned senior counsel for the appellant has candidly stated at the that the appellant was no longer challenging the acquisition and the relief claimed in W.P. 1629/1995 was, therefore, not being pursued in this appeal. He has, however, prayed with the greatest emphasis, that in so far as the claim arising out of W.P. No.1628/1995 was concerned it was clear from the record that possession of the appellant's land i.e. 1 acre 8 CA Nos.4849-4850/2000 Biswas continued to remain with the appellant despite the findings to the contrary recorded by , and as such it was open to the Government to withdraw from the acquisition if it so desired, under Section 48 of the Act. ", "5. In this background, Mr. , has raised three arguments before us during the course of hearing. He has first pointed out that it was the positive case of the appellant that the land in dispute was encircled by a boundary wall and as such possession thereof could be taken only after entering the land and not by any symbolic or paper possession. As a corollary, it has been submitted, that there was no material on record to show that the actual physical possession had been taken as would preclude the withdrawal of the acquisition under Section 48 of the Act. In this connection, the learned counsel has placed reliance on . and Anr. Vs. State of U.P. & Ors. which had been subsequently followed in . . It has finally been CA Nos.4849-4850/2000 submitted that there was ample evidence on record to show that the property in dispute was, in fact, surrounded by a wall and had some other structures as well, and in view of the positive stand taken by the Land Acquisition Collector in his award dated 19th June 1980 that the possession of the area covered by structures would be the subject matter of a supplementary award, the very basis of the judgment of that the possession had been taken on the 20th June 1980 was erroneous. ", "6. Mr. and Mr. , the learned counsel appearing for the and respectively have controverted the submissions and have pointed out that the appellant had, for almost 30 years, been able to scuttle the development of the area by taking piecemeal stands in the writ petitions and civil suits from the year 1980 onwards and though the aforesaid matters had been rejected with positive findings that possession had been taken, and that there was no wall or structure on the land in question. It has also been submitted that the proper procedure had been adopted by the CA Nos.4849-4850/2000 Naib Tehsildar and that the possession had been taken over as per law on the 20th June 1980 and there was ample evidence to this effect which had been considered by . ", "7. We have heard the learned counsel for the parties very carefully. The Act provides a machinery for the acquisition of the land. An acquisition is set in motion by a Notification under Section 4 when it is proposed to acquire any land for public purpose and Section 5A envisages the filing of objections with regard to the proposed acquisition. After the objections under Section 5A have been considered and been found without merit, a declaration under Section 6 of the Act is published that the land is indeed required for a public purpose. Section 9 of the Act provides that after all the proceedings and certain other formalities have been completed the Collector shall give public notice that the intends to take possession of the land and calling upon the persons interested to file their claims for compensation. The matter is then enquired into by the Collector who renders his award under Section 11 of the Act and possession is taken by CA Nos.4849-4850/2000 the Collector under Section 16 on which the land vests absolutely in the free from all encumbrances. It is the case of the respondent that all the procedures had been followed and that possession had been taken under Section 16 on the 20th June 1980, and as such, the question of its release under Section 48 of the Act did not arise, as this provision gives \"liberty to withdraw from the acquisition of any land of which possession has not been taken\". The question raised by Mr. is that as the area in question was very extensive i.e. about 1933 bigas and the land belonging to the appellant was surrounded by a boundary wall, symbolic possession was meaningless and some more positive action was called for. To support this view he has relied on the three judgments cited earlier. We find, however, that the aforesaid judgments, in fact, help the case of the respondent rather than the other way around. In case, which was heard by three Hon'ble Judges of this Court one of the Hon'ble Judges (,J.) held that the principles underlying Order 21, Rules 35, 36, 95 and 96 of the prescribing the modes of CA Nos.4849-4850/2000 delivery of possession including symbolic and actual could be applied to proceedings under the Act but the other two Hon'ble Judges ( and ,.) held that the said provisions could not be applied to proceedings under the Act and that actual possession thereof was required to be taken. In this background, the two Hon'ble Judges observed as under:- ", "\"We think it is enough to state that when the proceeds to take possession of the land acquired by it under the Land Acquisition Act , 1894, it must take actual possession of the land, since all interests in the land are sought to acquired by it. There can be no question of taking `symbolical' possession in the sense understood by judicial decision under the Code of Civil Procedure. Nor would possession merely on paper be enough. What the Act contemplates as a necessary condition of vesting of the land in the is the taking of actual possession of the land. How such possession may be taken would depend on the nature of the land. Such possession would have to be taken as the nature of the land admits of. There can be no hard and fast rule laying down what act would be sufficient to constitute taking of possession of land. There cannot be an absolute and inviolable rule that merely going on the spot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking of possession of land in every case. But here, in CA Nos.4849-4850/2000 our opinion, since the land was lying fallow and there was no crop on it at the material time, the act of the Tehsildar in going on the spot and inspecting the land for the purpose of determining what part was waste and arable and should, therefore, be taken possession of and determining its extent, was sufficient to constitute taking on possession. \" ", "8. In case (supra) the basic issue was as to whether the land which was the subject matter of acquisition could be acquired in view of the State policy that Abadi land was not to be acquired. It is in this connection, the Court observed that there appeared to be no conclusive evidence that possession had been taken from the land owner, and the matter was left open for the land owner to approach under Section 48 of the Act to have land released. In 's case (supra), a reference was made to the judgment in case (supra) and it was once again reiterated that the procedure for taking possession would depend upon the nature of the land and the extent thereof. A cumulative reading of the aforesaid judgments would reveal that while taking symbolic and notional CA Nos.4849-4850/2000 possession is perhaps not envisaged under the Act but the manner in which possession is taken must of necessity depend upon the facts of each case. Keeping this broad principal in mind, this Court in ) by Lrs. AIR 1996 SC 3377 after considering the judgment in case, observed that while taking possession of a large area of land (in this case 339 acres) a pragmatic and realistic approach had to be taken. This Court then examined the context under which the judgment in case had been rendered and held as under: ", "\"It is settled law by series of judgments of this Court that one of the accepted modes of taking possession of the acquired land is recording of a memorandum or Panchanama by the in the presence of witnesses signed by him/them and that would constitute taking possession of the land as it would be impossible to take physical possession of the acquired land. It is common knowledge that in some cases the owner/interested person may not cooperative in taking possession of the land.\" ", "17 ", "CA Nos.4849- . AIR 1996 SC 1239 yet again the question was as to the taking over of the possession of agricultural land and it was observed thus: ", "\"It is seen that the entire gamut of the acquisition proceedings stood completed by April 17, 1976 by which date possession of the land had been taken. No doubt, has contended that the appellant still retained their possession. It is now well-settled legal position that it is difficult to take physical possession of the land under compulsory acquisition. The normal mode of taking possession is drafting the Panchnama in the presence of and taking possession and giving delivery to the beneficiaries is the accepted mode of taking possession of the land. Subsequent thereto, the retention of possession would tantamount only to illegal or un lawful possession.\" ", "9. It would, thus, be seen from a cumulative reading of the aforesaid judgments, that while taking possession of a large area of land with a large number of owners, it would be impossible for the Collector or the Revenue Official to enter each bigha or biswas and to take possession thereof and that a pragmatic approach has to be adopted by the . It is CA Nos.4849-4850/2000 also clear that one of the methods of taking possession and handing it over to the beneficiary department is the recording of a which can in itself constitute evidence of the fact that possession had been taken and the land had vested absolutely in the Government. ", "10. The question arises as to whether in the face of the above observations, the procedure adopted by , Land Acquisition was the correct one. The Award was rendered in the present matter on the 19th June 1980. As per the possession proceedings (Panchnama) recorded by dated the 20th June 1980, possession of 1933 bighas 2 biswas of land had been taken over and handed over to on the 21st June 1980, 23rd June 1980 and 24th June 1980. In the Panchnama it was also observed that the land had been demarcated and pillars had been affixed and that the physical possession had further been handed over to , Tehsildar, the representative of the beneficiary department. Admittedly, Khasra No.157 was covered by this document. It is CA Nos.4849-4850/2000 recorded that the possession of the land under the built up area of 160 bighas 6 biswas could not be handed over and the details of this land have also been provided in the aforesaid document. Khasra No.157 does not come in this category. Mr. has, however, emphasized that some material documents which show the possession had not been taken on 20th June, as alleged, had been ignored by which he has referred us to for the years 1980-81 and 1981-82 showing the existence of . He has, accordingly, submitted that the observations in the award that the appellant's land was \"Rosli\" was incorrect in the light of this record. We find absolutely no merit in this plea. A Khasra Girdwari which is a mere crop inspection report entered twice a year (Kharif and Rabi crops) has no presumption of truth attached to it. Even otherwise the state of the land as on the date of the Notification under Section 4 of the Act (which is 13th November 1959) would be the relevant date as to the nature of the land and a crop inspection report 20 years later cannot be taken as proof of some facts said to CA Nos.4849-4850/2000 exist in the year 1959. Mr. has also stressed that from the Award itself it was clear that the wall standing on Khasra No.157 had been assessed to a compensation of Rs.420/- and as such the observations in the award that land was agricultural was erroneous. Mr. has, however, pointed out that the part of the Award to which reference has been made by Mr. is captioned as \"Wells and Structures' and that a reference to a wall in the body is typographical error. We reproduce the relevant portion of the award herein under: ", "Wells and Structures \"The land under acquisition has number of wells, water channel and structures. The Assistant Engineer (Valuation) has made the rate assessment of each of these items to which I agree and award accordingly subject to the verification at the time of possession as per details given as under: - ", "Value Kh.No. Item Assessed Well, Drain, Water 555/2/2 tank Rs.6920/- ", "254 Well Structure Rs.2490/- 577/430 -do- Rs.2130/- 217 Well Structure Rs.2730/- 100 Structure Rs.260/- 670/27 -do- Rs.3320/- 15 Well Rs.4030/- CA Nos.4849-4850/2000 Structure/Room Well, Water tank, 29 Room & Structures Rs.3490/- Well, Structures, Water tank, rooms & 139 drains 4600/- Well Structures, 160 room & drain Rs.2750/- 394 Well Structures Rs.4690/- 399 -do- Rs.2380/- 242 Structure Rs.540/- 149 -do- Rs.260/- 580/148 Wall Rs.1264/- 157 -do- Rs.420 Well, Water Tank, 172 drain Structure Rs.7960/- 298 -do- Rs.4890/- 333 wells, Structure Rs.5350/- Structure & 20 Compound wall Rs.3300/- Well, Water drains, 195/2 Water tank & room Rs.7530/- 321 -do- Rs.7250/- Well, Water tank 478 drains & rooms Rs.6665/- Room, water tank, 321 drain Rs.1125/- 478 Drain Rs.360/- Well, water tank, 92 drain, Khurli, rooms Rs.7260/- Well, water tank, drain khurli, rooms, 155 verandah Rs.6720/- Well, Water tank, 597/202/264 Room Rs.2700/- Well, Water tank, Water Channel 455 room Rs.2790/- Well, Water tank, 86 drains, rooms Rs.3320/- Value No. Item assessed 514 Well Rs.1720/- 464 -do- Rs.2850/- 688/518/119/2 -do- Rs.2290/- 189 -do- Rs.1820/- 436 Well, structures Rs.1020/- 210 Well Rs.2060/- 453 -do- Rs.5650/- CA Nos.4849-4850/2000 Total: Rs.1,21,189-00 There are water channels running ", "through . Nos. 228, 635/251, 254, 253, 255, 250, 263, 597/262, 261, 269, 434, 435, 440, 442, 443, 444, 445 & 446. The Naib- ", " has made a detailed valuation to which I agree and award Rs.2870/- as compensation as these channels.\" ", " ", "11. A reading of the above extract reveals that wells, and structures connected with wells, and irrigation facilities have been referred to therein and an independent wall is not even remotely the subject matter. Mr. has, however, seriously objected to this explanation by submitting that no plea doubting the accuracy of the document having been raised in the counter affidavit, the respondents were now precluded from making this submission. We, however, feel that in the light of the context in which the entire matter has been dealt with in the Award, there can be no doubt that the entry `wall' should be read as `well' vis-`-vis Khasra No.157. There is yet CA Nos.4849-4850/2000 another circumstance, perhaps even more relevant. We find that no question had ever been raised by the appellant with regard to the presence of a wall in the objections filed under Section 5A or even in the responses filed to the notices under Section 9 of the Act and the only prayer was that the land be exempted from acquisition (Item no.36). These omissions become more significant as several other landowners had claimed compensation for the superstructures that were existing on the acquired land. It is also equally significant, as pointed out by Mr. , that no question had ever been raised by the appellant with regard to the existence of a wall or superstructure in any of the litigations prior to the present set of Writ Petitions. Mr. has, however, referred us to the objections dated 15th November 1966 showing the existence of a wall. These objections are, to our mind, meaningless as they had not been filed in response to the notification CA Nos.4849-4850/2000 under Section 4 which had been published in the year 1959 and were filed after the declaration under Section 6 had been made and are, therefore, an obvious after thought. It also bears notice that despite the claim under this document, no plea with regard to the existence of a wall had been raised at any stage till the filing of the present petitions in the year 1995. ", "12. Mr. has, with great emphasis, pointed out that from the affidavit dated 30th July 1996 sworn by Mr. , Under Secretary, , it was clear that the appellant continued to remain in possession on account of the stay of dispossession granted by on 15th July 1981 in WP No. 2220/1981 and the confirmation of the said order on 16th September 1982 and as such the stand of the appellants that possession had been taken was not correct. We have, however, already observed that possession had been taken between 20th and 24th June 1980, and the acquired land thus stood vested in the State CA Nos.4849-4850/2000 free from all encumbrances under Section 16 of the Act. It is also relevant that the afore-referred writ petition was dismissed meaning thereby that the said order should automatically be vacated as well. Even assuming for a moment that the petitioner had re-possessed the acquired land at some stage would be of no consequence in view of the provisions of section 16 ibidem. In case (supra) one of the arguments raised by the land owner was that as per the communication of the Commissioner the land was still with the land owner and possession thereof had not been taken. The Bench observed that the letter was based on a misconception as the land owner had re-entered the acquired land immediately after its possession had been taken by the government ignoring the scenario that he stood divested of the possession, under Section 16 of the Act. This Court observed as under: ", "\"This was plainly erroneous view, for the legal position is clear that even if the appellant entered upon the land and resumed possession of it the very next moment after the land was actually taken possession of and CA Nos.4849-4850/2000 became vested in the Government, such act on the part of the appellant did not have the effect of obliterating the consequences of vesting.\" ", "To our mind, therefore, even assuming that the appellant had re-entered the land on account of the various interim orders granted by the courts, or even otherwise, it would have no effect for two reasons, (1) that the suits/petitions were ultimately dismissed and (2) that the land once having vested in the by virtue of Section 16 of the Act, re-entry by the land owner would not obliterate the consequences of vesting. ", "12. We must also observe that the petitioner has been able to frustrate the acquisition and development of the land right from the 1980 onwards by taking recourse to one litigation after the other. The record reveals that all the suits/writ petitions etc. that had been filed had failed. Undoubtedly, every citizen has a right to utilize all legal means which are open to him in a bid to vindicate and protect his rights, but if the court comes to the CA Nos.4849-4850/2000 conclusion that the pleas raised are frivolous and meant to frustrate and delay an acquisition which is in public interest, deterrent action is called for. This is precisely the situation in the present matter. The appeals are, accordingly, dismissed with costs which are determined at Rupees two lacs. The respondents, shall, without further loss of time proceed against the appellant. ", "..................................J. (Dalveer Bhandari) .................................J. ", "() New Delhi, Dated: September 15, 2009"], "relevant_candidates": ["0000022699", "0001013352", "0001285565", "0001537954"]} {"id": "0000151302", "text": ["PETITIONER: STATE OF ORISSA & ORS. Vs. RESPONDENT: LALL BROTHERS DATE OF JUDGMENT25/08/1988 BENCH: , (J) BENCH: , (J) RANGNATHAN, S. CITATION: 1988 AIR 2018 1988 SCR Supl. (2) 579 1988 SCC (4) 153 JT 1988 (3) 552 1988 SCALE (2)542 CITATOR INFO : RF 1989 SC 606 (7) ACT: Arbitration Act 1940: Sections 14, 17, 30 and 33- Unreasoned award-No ground to set aside award-Lump sum award-Not bad perse. HEADNOTE: The respondent-firm was entrusted with the construction work of a `Minor Irrigation Project' by the State of Orissa- Petitioner. The work was due to be completed on 3rd August, 1977 but it was actually on 31st March? 1978. Disputes arose in regard to the payment for the work. The respondent- contractor raised certain claims and gave notice for the appointment of an arbitrator according to the contract. On 22nd April, 1980, the Chief Engineer appointed an arbitrator but, on an application by the respondent, the judge removed him and appointed another arbitrator. Before the arbitrator, the respondent filed its claim along with some documents and the petitioner filed its counter statement. No further evidence was adduced and on 23rd June, 1982. the arbitrator gave a lump sum award for Rs. 14.67 lakhs with interest at 9% from 30th April, 1978. On 11th July 1983, the Sub-Judge made the award rule of the with the modification that the interest was directed to run from 23rd June, 1982, instead of 30the April, 1978. The High allowed the appeal in part and deleted the direction regarding future interest awarded by the arbitrator and modified by the Subordinate Judge. In the appeal by special leave to this . it waS contended on behalf of the State-petitioner that the award in the instant case was an unreasoned award and a lump such amount was awarded without specifying the amount awarded on particular grounds. Dismissing the special leave petition . PG NO 579 PG NO 580 HELD: 1. The fact that there is an unreasoned award, is no ground to set aside an award. Lump sum award is not bad per se, as such. [583A] In the instant case, the award contained the recitals to the effect that the arbitrator had gone through the claim statement, counterstatement and documents produced before him and heard the representations made by the parties. There is no error of law apparent on the face of the award. There was no misconduct on the part of the arbitrator or in the conduct of the proceedings. [582G] , 1 SCR 105; ., 1 SCR 324 and Allen Berry JUDGMENT: ", "282, referred to. ", "2. An award is conclusjve as a judgment between the parties and the court is entitled to set aside an award only if the arbitrator has misconducted himself, or where an award has been inproperly procured, or is otherwise invalid under Sections 30 and 35 of the Arbitration Act 1940. [583B] ", "3. An award may be set aside by the on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion [583C] ", "4. It is not open to the Court to speculate, where no reasons are given by the arbitrator, its to what impelled him to arrive at his conclusions. [593D] & weaving co. Ltd., L. R. 50 . 5 SCR 480 referred to. ", "5. If a question of law was not specifically referred to the arbirator his decision is not final. [583F] , 3 SCC 82 distinguished. ", "& CIVIL APPELLATE JURISDICTION : Special Leave petition (civil) No. 7396 of 1987. ", "PG NO 581 From the Judgment and Order dated 8.4. 1997 of in M. A. No. 378 of 1983. ", ", Solicitor General, and Miss for the Petitioners. ", ", and for the Respondent The Judgment of the Court was delivered by , J. This is an application for leave to appeal under Article 136 of the Constitution from the decision and judgment of , dated 8th April, 1987. By the judgment had allowed the appeal in part and modified the award so far as it related to the payment of interest in the awarded amount. Another appeal challenging the validity of the award was, however, dismissed. ", "In or about 1975-76 the respondent was entrusted with the work of \"Construction of balance work of earth dam of \" vide an agreement No. 207 F- ", "2. The said work was due to be completed on 3rd August, 1977 but it was actually completed on 31st March, 1978. The estimated of value of the work was Rs.25,06,299. It is stated that the contractor, respondent herein, had executed only 18 out of 33 items of work beside one extra item and he was paid a sum of Rs.23.63.122 for the work done. According to, the petitioner no further amount was due to, the contractor, the respondent. ", "Final bill was prepared on 12th February, 1980 and it was unconditionally accepted be the respondent- contractor. This contention, however, was sought to be disputed before us by the respondent contractor by producing certain bill stated to be the final bill which was `accepted under protest '. It is, however, not necessary for us to go into this question at this stage. ", "On or about 16th April, 1980, the respondent-contractor raised certain claims and gave notice far appointment of an arbitrator according to the contract. On 22nd April, 1980, the Chief Engineer appointed as arbitrator. However. on the application of the respondent the subordinate Judge removed and instead appointed as the arbitrator. Before the arbitrator the respondent filed its claim along with some documents and the petitioner filed his counter statement. It is stated on behalf of the State that no further evidence PG NO 582 was adduced by the respondent but the petitioner produced the measurement books. The petitioner contended that no amount was due. The respondent disputed that. The arbitrator on behalf of the claim statement and some document filed by the respondent-contractor, gave a lump sum award for Rs. 14,67,000 plus interest at 9% from 30.4. 1978. The award was given on 23rd June, 1982. On 11th July, 1983, the learned Subordinate judge made the award rule of the Court with the modification that the interest was directed to run from 23.6.1982 instead of 30.4. 1978. allowed the appeal in part and deleted the direction regarding future interest awarded by the arbitrator and modified by the learned Subordinate Judge. In appeal it was contended before for the said judgment by the Subordinate Judge that the following objections were taken against the award, namely: ", "\"(i) that there is an error of law apparent on the face of the award ; ", "(ii) that the arbitrator has misconducted himself by giving a lump sure award without examining, each item of the claims, ", "(iii) that the claimant having accepted the final bill unconditionally deposit, the contract between the parties stood closed and, therefore, the arbitration clause was not operative and the arbitrator appointed had no jurisdiction to adjudicated upon the disputes ; ", "(iv) that the award of interest is without jurisdiction\". Except the documents on record, neither of the parties adduced any evidence. It was urged before us that did not accept challenge to the award but modified the order of interest as indicated before. The award in question contained the recitals to the effect that the arbitrator had gone through the claim statement, counter statement and documents produced before him and heard the representations made by the parties. There is no error of law apparent on the face of the award. There was no misconduct an the part of the arbitrator or in the conduct of the proceedings. It was contended before us that this is an award which was an unreasoned and a lump of amount was awarded without specifying the amount awarded on particular grounds. ", "PG NO 583 In our opinion, was right in refusing to accept the challenge to the award. The fact that there is an unreasoned award, is no ground to set aside an award. Lump sum award is not bad per se. as such. An award is conclusive as a judgment between the parties and the court is entitled to set aside an award only if the arbitrator has misconducted himself in the proceedings or when the award has been made after the issue of an order by the superseding the arbitration or after arbitration proceedings have become invalid under section 35 of the Arbitration Act or where an award has been improperly procured or is otherwise invalid under section 30 of the Act. An award may be set aside by the on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and agrument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. ", "It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impellied him to arrive at his conclusions. See in this connection the observations of in . 50 I.A. 324 and of this Court in ., 5 SCR 480. The fact that a lump sum award has been given, is no ground to declare the award bad. See further , 1 SCR 105 and ., 1 SCR 324 as well as the decision of this Court in ,. ( , 3 SCR 282. ", "Learned Solicitor General for the petitioner relied on , 3 SCC 82.Reliance was misplaced. If a question of law was not specifically referred to the arbitrator his decision is not final. It was reiterated that the arbitrator is bound by law, and if an error of law in the award is on the face of it, it is amenable to be corrected. ", "In that view of the matter the points sought to be urged in this application for leave, are not entertainable. The application fails and is accordingly dismissed. ", "N.V.K. Petition dismissed."], "relevant_candidates": ["0000525017", "0000899911", "0000931195", "0001553220", "0001815803", "0001840796"]} {"id": "0000169599", "text": ["PETITIONER: ., . Vs. RESPONDENT: STATE OF UTTAR PRADESH & OTHERS DATE OF JUDGMENT24/02/1983 BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SEN, A.P. (J) CITATION: 1983 AIR 383 1983 SCR (2) 418 1983 SCC (2) 195 1983 SCALE (1)152 CITATOR INFO : D 1992 SC 443 (13,14) ACT: Motor Vehicles Act , 1939 as in force in the State of Uttar Pradesh- S. 43-A as amended by U.P. Act 15 of 1976 read with s. 47 as amended by Central Act 47 of 1978 Interpretation of-State Government cannot issue directions under sub-s. (1) of s. 43-A for grant of stage carriage permits to an eligible applicants after amendment of s. 43-A by U. P. Act 15 of 1976-While issuing directions under sub- s. (1) of s. 43-A State Government cannot ignore provisions contained in sub-ss. (1) and (1A) to (1H) of s. 47 . Interpretation - Rule of construction of an amended provision. Words and Phrases -`Public interest'-What it means in the context of Motor Vehicles Act , 1939. HEADNOTE: A 'stage carriage' under the Motor Vehicles Act , 1939 means a motor vehicle which carries more than six persons for hire or reward at separate fares paid by or for individual passengers either for the whole journey or for stages of the journey and for plying such a vehicle it is necessary to obtain a permit from the appropriate . While considering an application for such a permit, the must, under cls. (a) to (f) of sub-s. (1) of s. 47 , have regard to the interest of the public generally, the advantages to the public of the service to be provided, the adequacy of other passenger transport services operating between the places to be served, the operation by the applicant of other transport services, etc., and also take into consideration the representations made by local or police authorities and by persons already providing passenger transport facilities by any means along or near the proposed route or area. may, under sub-s. (1) of s. 43 , having regard to the advantages offered to the public by the development of motor transport, the desirability of preventing uneconomic competition among motor vehicles, etc., issue appropriate directions to the The subject matter of regulation of motor vehicles being within the scope of entry 35 of the Concurrent List, the Act in its application to tho State of Uttar Pradesh was amended in 1972 by by the introduction of s. 43-A which was a new provision. While sub-s. (1) thereof conferred power on to issue directions of a general character in public interest in respect of any matter relating to road transport, sub-s. 419 (2) specifically conferred the power to issue directions regarding grant of stage carriage permits to all eligible applicants if was of the opinion that it was in the public interest to do so. Further, under sub- s. (2) of s. 43-A , the provisions of s. 47 stood amended to the effect that while considering an application for permit, it was no longer necessary for the to have regard to the adequacy of other passenger transport services operating between the places to be served or to the operation by the applicant of other transport services; nor was the required to look into representations made by any one other than local or police authorities. , acting under s. 43-A , issued directions in March, 1972 for grant of permits to all eligible applicants without any restriction as to the number of permits to be issued on any route. The validity of s. 43- A and the directions issued thereunder were upheld by the in 1 S.C.R. 9l6. But, within a short time, realised the necessity of reviewing the policy of issuing permits to all eligible applicants and amended s. 43-A with retrospective effect by the Uttar Pradesh Act 15 of 1976. While sub s. (1) was retained as such, sub-s. (2) was substituted by an entirely new sub-section. The Statement of objects and Reasons appended to the Amending Act stated that it had become necessary to reconsider the policy of granting bus permits liberally with a view to checking unproductive capital expenditure and unnecessary consumption of fuel, preventing elimination of small operators as a consequence of unreasonable competition, etc. and authorising to issue necessary directions from time to time in regard to the number of permits that may be granted in respect of any route or area, the preference to be given to specifically deserving categories, etc. thereafter issued directions to to ensure that the operation of the total number of stage carriages on any route was economically viable. Section 47 was amended by the Central Act 47 of 1978. The proviso to sub-s. (1) of s. 47 was amended by providing that in addition to a registered cooperative society, an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall he given preference over applications from individual owners. also introduced new sub-ss. (1A) to (1H) in s. 47 providing for reservation of certain percentage of stage carriage permits for the Scheduled Castes and Tribes and weaker sections of the community and empowered to frame rules for implementing sub-ss. (1A) to (1H) of s 47. These amendments came into force on January 16, 1979. On January 10, 1981 issued a notification directing to issue stage carriage permits to all eligible applicants and specifying that there should be no upper limit to the number of stage carriages for which permits might be granted. On January 23, 1981, by another notification, of were directed to have regard only to matters referred to in cls. (a), (b), (d) and (f) of sub-s. (l) of s. 47 and to take into consideration representations made by local or police authorities only. Tho appellants challenged the notifications under Article 226. 420 The High dismissed the petitions repelling the contention that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes, the Scheduled Tribes and weaker sections as provided in s. 47 the grant of permits would be vitiated. According to the High the question of reservation would arise only in those cases where the seats or articles are limited for distribution or allotment but where there is no limit or no fixed number, the question of reservation would not arise. The High said that the Statement of objects and Reasons appended to the Amending Act 15 of 1976 cannot override the clear provisions of s. 43-A as amended by that Act and held that though the two impugned notifications did not follow the procedure prescribed by sub-s. (2) of s. 43-A , they could be sustained under sub-s. (1) of s.43-A. It relied on the decision in case to hold that large number of buses operating on different routes would be for the convenience and benefit of the travelling public. Allowing the appeals, ^ HELD: Whenever a court is called upon to interpret an amended provision it has to bear in mind the history of the provision, the mischief which the legislature attempted to remedy, the remedy provided by the amendment and the reason for providing such remedy. Section 43-A of the Act as in force in the State of U.P. was amended by the U.P. Act 15 of 1976. By the substitution of the former sub-s. (2) by the new sub-s (2) in s. 43-A the legislature clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualifications of applicants. After the amendment, sub-s. (1) of S. 43-A did not comprehend within its scope the power to issue directions for issuing permits to all eligible applicants without any sort of restriction relevant to the scheme of the Act. The sub-section states that may issue such directions of a general character as it may consider necessary in the public interest. 'Public interest' under the Act does not mean the interests of the operators or of the passengers only. It takes within its fold several factors such as, the maximum number of permits that may be Issued on a route or in any area having regard to the needs and convenience of the travelling public, the non- availability of sufficient number of stage carriages in other routes or areas which may be in need of running of additional services, the problems of law and order, availability of fuel, etc. To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over- simplification of a problem with myriad facets affecting the general public. The Act itself contains provisions relating to licensing of drivers and conductors, specifications of motor vehicles, co-ordination of road and rail transport, prevention of deterioration of road system, prevention of Uneconomic competition among motor vehicles, etc. Any direction given by under s. 43-A should, therefore, be in conformity with all matters regarding which the statute has made provision. In this situation to say that any number of permits can be issued to any eligible operator without any upper limit is to overstep the limits of delegation of statutory power. [444 A-H; 445 A-E] In the instant case, a reading of the two notifications shows that ignored the legislative policy underlying the U.P. Act 15 of 421 1976 by which the new sub-s. (2) of s. 43-A was enacted in substitution of the former sub-s. (2) with retrospective effect. The new sub-s. (2) was introduced by the State legislature after it had realised the mistake committed by in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under-utilisation of capital and fuel and in unreasonable competition which eventually eliminated small operators from business. [441 D-F] (ii) also ignored the new policy governing the issue of permits introduced by by amending s. 47 of the Act in 1978. The High erred in not noticing that by issuing the notification containing a direction to to issue limitless number of permits, had attempted to circumvent sub-ss. (1) and (IA) to (IH) of a s. 47 . The observation of the High that preferences have to be shown and reservations have to be made only when there is scarcity of permits and since there were no restrictions on the number of permits to be issued there was no necessity to make any such provision is shocking. Preference and reservations have value only when there is a limit on the number of permits to be issued and in the context of the Act there should necessarily be a limit on the issue of permits to operate motor vehicles in respect of any route or area. By the D method adopted by it has virtually allowed the rich and well-to-do businessman - who can bear the loss for some time to introduce any number of vehicles on a route or in any area until all the small operators who also may take the permits to leave the field owing to the inevitable loss that ensues by the operation of an unlimited number of vehicles. The two notifications in question are clearly outside the scope of the Act. [445 F-H; 446 A-E] (iii) The observations in case are inapplicable to the present cases. In that case the was concerned with sub-s. (2) of s. 43-A as it stood then. At that time, the sub-section contained a clear legislative policy which considered that there could be no public prejudice if all eligible applicants were granted permits. Whatever the may have observed while considering that provision would not apply now as There is a clear departure made by the legislature from that policy when it enacted the new sub-s. (2) of s. 43-A . In the face of this amendment by which the former sub-s. (2) of s.43-A which specifically authorised when it was satisfied that it was necessary to do so in the public interest to issue directions to to grant permits to all eligible applicants was deliberately taken away by the State legislature, the High was wrong in holding that such power was still available under sub-s. (1) of s. 43-A which was widely worded. [443 . 2 S.C.R. 916, held inapplicable. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1269- 71 of 1982. ", "422 ", "Appeals by Special leave from the Judgment and order dated 23rd the March, 1982 of in Civil Miscellaneous Writ Petition Nos. 2328, 2424 and 1998 of 1981. ", " and for the Appellants. Mrs. for the Respondents. ", "The Judgment of the Court was delivered by J. In these appeals by special leave filed against the common judgment dated March 23, 1982 of , the validity of two Notifications issued by under section 43-A of the Motor Vehicles Act, 1939 (Act IV of 1939) (hereinafter referred to as 'the Act') as in force in the State of Uttar Pradesh arises for consideration. The two impugned Notifications are reproduced below: ", "I. \"Notification No. 68 T/XXX-4-15-KM/79 Dated: Lucknow: January 10, 1981. ", "Whereas, is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68-C of the Motor Vehicles Act, 1939) to all eligible applicants: ", "Now. therefore, in exercise of the powers under section 43 . A of the Motor Vehicles Act , 1939, the Governor of Uttar Pradesh is pleased to direct that the stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68-C of the Motor Vehicles Act, 1939) shall be granted according to the provisions of the Act to all eligible applicants and there shall be no upper limit to the number of stage carriages for which permits may be granted. ", "By order , Sachiv II. Notification No. 241 T/XXX-4-15-P/79 Dated: January 23, 1981 The Governor being satisfied that it is expedient in the public interest so to do, is pleased to direct in exercise of the powers under section 43-A of the Motor Vehicles Act, 1939 (Act No. 4 of 1939) that while considering applications for stage carriage permits, or : ", "(i) shall have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub-section (1) of section 47 of the said Act and shall also take into consideration representations made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and ", "(ii) shall be deemed to have made sufficient compliance of the provisions of section 57 of the said Act, if it intimates the particulars of the applications to such local authority and police authority for making representations, if any, within a period of fifteen days from the date of despatch of the intimation with the stipulation that if no representation is received with in the prescribed period of time, it shall be presumed that they have no representation to make, and has considered any representation made by such local authority and police authority. ", "By order , Sachiv.\" ", "The appellants who are stage carriage operators challenged The validity of the above Notifications in the writ petitions filed by them under Article 226 of the Constitution before inter alia on the ground that they were ultra vires the provisions of the Act under which they had been issued. dismissed the writ petitions after negativing the contentions of the appellants. Aggrieved by the decision of the appellants have preferred these appeals by special leave as stated above. ", "It is necessary at this stage to give a resume of the relevant statutory provisions to understand the rival contentions of the parties. On finding that the Indian Motor Vehicles Act , 1914 which Was brought into force at an early stage of development of motor transport was inadequate to meet the new situation created by the growth of motor transport by the year 1939, passed the Act for the purpose of regulating motor traffic in the interests alike of the safety and convenience of the public and of the development of a coordinated system of transport. The Act underwent major alterations in 1956 and 1969. Broadly the Act provided inter alia for registration of motor vehicles, licensing of drivers and conductors, grant of permits to ply public service vehicles and public carriers, operation of road transport service by State transport undertakings in any area or on any route to the exclusion, complete or partial of other persons, construction, equipment and maintenance of motor vehicles, control of traffic, insurance of motor vehicles against third party risks and offences, penalties and procedure. The State Governments were entrusted with the duty of framing rules on various matters connected with the topics dealt with by the Act. The subject of regulation of motor vehicles being within the scope of Entry 35 - mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied-in List III of the Seventh Schedule to the Constitution, various amendments were made from time to time by several State Legislatures with the assent of the President of India either adding to or modifying the provisions of the Act. Chapter IV of the Act which includes section 42 to section 68 contains provisions pertaining to the control of motor vehicles. Section 42 of the Act provides that no owner of a transport vehicle shall r use or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by or the authorising the use of the vehicle in that place in the manner in which the vehicle is being used. A 'transport vehicle' is defined in section 2(33) of the Act as a public service vehicle or a goods vehicle. A 'public service vehicle' is defined in section 2(25) of the Act as any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage and stage carriage. Section 2(29) of the Act states that a 'stage carriage' means a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey. Section 45(1) of the Act prescribes that every application for a permit shall be made to of the region in which it is proposed to use the vehicle or vehicles. When the vehicle is to be used in two or more regions, the applications for permits may be made as provided in the provisos to section 45(1) or section 45(2) of the Act, as the case may be. The constitution of and is dealt with by section 44 of the Act. or shall consist of a Chairman who has had judicial experience or experience as an appellate or revisional authority under any law relating to land revenue and in the case of , such other officials and non-officials, not being less than two, and, in the case of such other persons (whether officials or not) not being less than two, as may think fit to appoint. An application for a stage carriage permit shall have to contain the particulars mentioned in section 46 of the Act. Prior to its amendment in 1978, section 47 as amended by Act 100 of 1956 read as follows: ", "\"47. Procedure of in considering application for stage carriage permits.-(1) A shall, in considering an application for a stage carriage permit. have regard to the P following matters, namely: ", "(a) the interest of the public generally; ", "(b) the advantages to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; ", "(c) the adequacy of other passenger transport services operating or likely to operate in the near future, whether by road or other means, between the places to be served. ", "(d) the benefit to any particular locality or localities likely to be afforded by the service; ", "(e) the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending; ", "(f) the condition of the roads included in the proposed route or area; ", "and shall also take into consideration any representations made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provision of road trans port facilities recognised in this behalf by , or by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies: ", "Provided that other conditions being equal, an application for a stage carriage permit from a cooperative society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners. (2) shall refuse to grant a stage carriage permit if it appears from any timetable furnished that the provisions of this Act relating to the speed at which vehicles may be driven are likely to be contravened: ", "Provided that before such refusal an opportunity shall be given to the applicant to amend the time-table so as to conform to the said provisions. (3) may, having regard to the matters mentioned in sub-section (1), limit the number of stage carriages generally or of any specified type for which stage carriage permits may be granted in the region or on any specified area or on any specified route within the region.\" ", "The procedure in applying for and granting permits is set out in section 57 of the Act. Section 48 of the Act provides that subject to section 47 , may, on an application made to it under section 46 , grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit. If decides to grant a stage carriage permit, it may attach to it all or any of the conditions mentioned in section 48(3) of the Act. The proceedings before are quasi judicial in character. While considering the application for the grant of a stage carriage permit has to consider all representations referred to in section 57(3) . Sub-section (5) of section 57 of the Act provides that when any representation such as is referred to in sub-section (3) thereof is made, shall dispose of the application at a public hearing at which the applicant and the persons making the representations shall have an opportunity of being heard either in person or by a duly authorised representative. Representations can be made among others by any person who is providing transport facilities on the route or in the area, any rival applicant, police authorities and local authorities. Any person who satisfies the qualifications mentioned in section 64 of the Act and who is aggrieved by the resolution of may file an appeal before which should consist of a wholetime judicial officer not below the rank of a District Judge. An order of or of against which no appeal can be filed is subject to revision by under section 64-A of the Act. Subsection (1) of section 43 of the Act which confers power on to control transport reads thus: ", "\"43. Power to State Government to control transport- ", "(1) A State Government having regard to: ", "428 ", "(a) the advantages offered to the public, trade and industry by the development of motor transport, ", "(b) the desirability of coordinating road and rail trans port. ", "(c) the desirability of preventing the deterioration of the road system, and ", "(d) the desirability of preventing uneconomic competition among motor vehicles, may, from time to time, by notification in the official , issue directions to : ", "(i) regarding the fixing of fares and freights (including the maximum and minimum in respect thereof) for stage carriages, contract carriages and public carriers; ", "(ii) regarding the prohibition or restriction, subject to such conditions as may be specified in the directions, of the conveying of long distance goods traffic generally, or of specified classes of goods, by private or public carriers, ", "(iii) regarding the grant of permits for alternative routes or areas, to persons In whose cases the existing permits are not renewed in pursuance of the provisions of sub-section (1-D) of section 68-F , or are cancelled or the terms thereof are modified in exercise of the powers conferred by clause ", "(b) or clause (c) of sub-section (2) of section 68-F ; ", "(iv) regarding any other matter which may appear to necessary or expedient for giving effect to any agreement entered into with or any other State Government or the Government of any other country relating to the regulation of motor transport generally, and in particular to its coordination with A other means of transport and the conveying of long distance goods traffic: ", "Provided that no such notification shall be issued unless a draft of the proposed directions is published in the official specifying therein a date being not less than one month after such publication, on or after which the draft will be taken into consideration and any objection or suggestion which may be received has, in consultation with , been considered after giving the representatives of the interests affected an opportunity of being heard.\" ", "In the year 1972, however, the Act was amended by State of Uttar Pradesh introducing a new section being section 43-A by the Motor Vehicles (U.P. Amendment) Act, 1972 with the assent of the President. The material part of section 43-A which was newly introduced by the said amending U.P. Act read as under: ", "\"43-A. (1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to or to , and such Transport Authority shall give effect to all such directions. ", "(2) Without prejudice to the generality of the fore going power, where the State Government is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68(C) or contract carriage permits or public carrier permits to all eligible applicants, it may by notification in the issue a direction accor- dingly, and thereupon all transport authorities as well as constituted under section 64 shall proceed to consider and decide all applications, appeals and. revisions in that behalf (including any pending applications, appeals and revisions) as if- ", "430 ", "(a) in section 47- ", "(i) for sub-section (1) the following sub- ", "sections were substituted: ", "(ii) shall in considering an application for a stage carriage permit, have regard to the following matters, namely- ", "(a) the interest of the public generally; ", "(b) the advantage to the public of the service to be provided including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; ", "(c) the benefit to any particular locality or localities likely to be afforded by the service; ", "and shall also take into consideration any representation made by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and sub-section (3) were omitted The above U.P. Act was preceded by the U.P. Ordinance which contained more or less the same provisions. The ordinance was substituted by the said U.P. Act . The object of enacting section 43-A of the Act was set out in the Statement of objects and Reasons attached to the relevant U.P. Bill which read as follows: ", "\"Objects and Reasons-operators engage in the race for securing permits for stage carriage on non-nation alised routes. Due to limitation on the number of permits this business is controlled by a few persons. Complaints in this regard are made every other day. Therefore, with a view to making it easier to secure permits in respect of non nationalised routes and to introducing simplicity in procedure and to providing greater employment and securing equitable distribution thereof it was considered necessary to amend sections 47 , SO, SS and 64 of the Motor Vehicles Act , 1939, suitably. Accordingly, in the public interest and with the aforesaid object in view, the Motor Vehicles (Uttar Pradesh Amendment) ordinance, 1972, was promulgated. This Bill is introduced to replace the said ordinance. ", "Pursuant to the power conferred on it by section 43-A of the Act, issued the following directions on March 30, 1972 by a Notification, the relevant part of which reads as under: ", "\"Whereas is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68-C of the Motor Vehicles Act, 1939) contract carriage permits and public carrier permits to all eligible applicants. Now, therefore, in exercise of the power conferred by section 43-A of the Motor Vehicles Act, 1939 the Governor is pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applicants.\" ", "The validity of section 43-A of the Act introduced by and of the Notification dated March P 30, 1972 issued by the Government of Uttar. Pradesh pursuant to that section was questioned in some writ petitions filed by some motor operators in of Allahabad. Those petitions were dismissed. On appeal this Court upheld the validity of section 43-A of the Act as well as the Notification by its judgment in .(1) which was delivered on December 4, 1974. Within about three and half years from the date of the above said notification realised that it was necessary to review the whole question of issuing permits to all eligible applicants. Accor- ", "432 ", "dingly the State Government issued a Notification on September 24, 1975 which ran as follows: ", "\"Whereas, in exercise of the power conferred by Section 43-A of the Motor Vehicles Act, 1939 was by notification No. 1188-T/XXX-4, dated March 30, 1972, pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applicants: And whereas, on further consideration is of opinion that the policy of granting such permits to all eligible applicants requires review with a view to: ", "(a) Preventing unproductive expenditure and under utilization of capital and fuel. ", "(b) Preventing elimination of small operators due to unfair competition resulting from the issue of more permits than required for a route. ", "(c) Facilitating long term planning of passenger road transport services. ", "And whereas, such review is likely to take some time and in the mean time it is necessary to stay the disposal of all pending applications for permits or entertainment of fresh applications. Now, therefore, in exercise of the powers conferred by the said Section 43-A of the Motor Vehicles Act, 1939, read with Section 21 of the U.P. General Clauses Act, 1904, the Governor is pleased to direct that: ", "1. The Notification No. 1198 T/XXX-4, dated 30th March, 1972 be and is hereby rescinded with immediate effect. ", " ", "2. The consideration of applications for stage carriage permits pending with shall stand postponed until further directions are issued in this behalf by the State Government. ", "3. No fresh applications for such permits shall be entertained until further directions are issued in this behalf by .\" ", "The above Notification shows that as a consequence of the policy of granting permits to all eligible applicants, necessity had arisen to take measures (i) to prevent unproductive expenditure and under utilisation of capital and fuel, (ii) to prevent elimination of small operators due to unfair competition resulting from the issue of more permits than required for a route; and (iii) to embark upon long term planning of passenger road transport services. ", "It is stated that by U.P. Ordinance 35 of 1975, Section 43-A was amended. This ordinance was replaced by the Uttar Pradesh Act 15 of 1976. By this Act, sub-section (2) of section 43-A . which had been added in 1972 was substituted with retrospective effect from the date of its original enactment. Section 43-A after it was amended by the U.P. Act 15 of 1976 read as under: ", "\"43-A. Power of State Government to issue directions to Transport Authorities-(1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to or to , and such Transport Authority shall give effect to all such directions. (2) Without prejudice to the generality of the provisions of sub-section (1) such directions may be given in respect of any of the following matters, namely: ", "(a) the number of stage carriage or contract carriage permits that may be granted in respect of any route or area. ", "434 ", "(b) the preference or the order of preference to be given to or the quota to be fixed for, specially deserving categories, such as personnel, educated unemployed persons, such persons holding driving licences as are members of cooperative societies formed for passenger transport business, persons belonging to the Scheduled castes and Scheduled Tribes. ", "(c) the procedure for grant of permits, and for selection from among the applicants, including selection by drawing of lots from among persons belonging to the same category. (3) Any direction under sub-section (1) may be issued with retrospective effect. ", "(4) Where any direction is issued under sub- section (1) to , then any appeal or revision pending before shall also be decided in such manner as to give effect to such directions. (5) Where any direction is issued under sub- section (1) with retrospective effect then ", "(a) or may review any order passed earlier by it with a view to making it conform to such direction and may for that purpose cancel any permit already issued. ", "(b) may apply to earlier with a view to enabling such authority to comply with such direction. (6) The provisions of this section shall have effect not withstanding anything contained in sections 47 , 50 and 57 .\" ", "The policy behind the above amendment was stated in the Statement of objects and Reasons placed before as follows: ", "435 ", "\"(5) In 1972 had accepted a policy of granting bus permits liberally. Reconsideration of the said policy however, became necessary with a view to checking unproductive capital expenditure and unnecessary consumption of fuel and preventing the elimination of small operators as a consequence of unreasonable competition and to removing difficulties in the implementation of long term plans pertaining to passenger road transport services. It was accordingly considered necessary to amend the Motor Vehicles Act , 1939, to authorise to issue directions from time to time in regard to the number of permits that may be granted in respect of any route or area, the preference to be given to specially deserving categories and the procedure for grant of permits.\" ", "Pursuant to the said amended section 43-A of the Act, issued a Notification containing directions on March 12, 1976 in the following terms: ", "\"Whereas, in exercise of the powers conferred by section 43-A of the M.V. Act, 1939, had by a notification No. 4251-T/XXX-4-9P/72 dated September 24 1975, as amended by notification No. 4530-T/ XXX-4-75 dated October 6,1975 postponed the consideration of applications for permits by any transport authority in respect of non-notified routes until further directions in this behalf of . ", "Now, therefore, in exercise of the powers conferred by the said section 43-A (2) of the M.V. Act , 1939 read with section 21 of the General Clauses Act, 1904, the Governor is pleased to direct: (1) That the S.T.A. and R.T. As. while fixing the number of Additional Stage Carriage permits to be issued at a given time on non-notified routes, shall in addition to the consideration of the matter mentioned in sub-section (1) of section 47 of the M.V. Act, ensure that the operation of the total number of stage carriages on any route, taking into consideration the existing as well as the additional permits proposed to be issued, would be economically viable on the existing fare-structure as per the norms as laid down by from time to time .............................\" ", "The above notification also contained directions regarding the principle to be followed in determining the number of permits that could be issued and reservation of permits for operators displaced by nationalisation, educated unemployed, members belonging to the Scheduled Castes, the Scheduled Tribes and other backward classes, unemployed army drivers and cooperative societies. ", "These directions were superseded by the issue of a fresh notification under section 43-A by on October 12, 1977 which was superseded by a Notification dated October 15, 1978. ", "Within a fortnight from the date of the last Notification referred to above amended the Act by enacting The Motor Vehicles (Amendment) Act , 1978 (Act 47 of 1978) which inter alia amended the proviso to subsection (1) of section 47 of the Act and inserted sub-sections (1A) to (1H) in that section. After this amendment, the proviso to sub-section (1) of section 47 of the Act reads thus: ", "\"47. (1)............. ", "Provided that other conditions being equal, an application for a stage carriage permit from a co- operative society registered or deemed to have been registered under any enactment in force for the time being and an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall, as far as may be, be given preference over applications from individual owners.\" ", "The new sub-sections (1A) to (1H) of section 47 of the Act read: ", "\"47. (1) ............ ", "437 ", "(1A) The Government of a State shall reserve in that State certain percentage of stage carriage permits for the Scheduled Castes and the Scheduled Tribes. Explanation-In this section and in sections 55 and 63 , 'Scheduled Castes,' and 'Scheduled Tribes' have the meanings respectively assigned to them in Article' 366 of the Constitution. ", "(1B) The reservation of permits under sub-section (1A) shall be in the same ratio as in the case of appointments made by direct recruitment to public services in the . ", "(1C) The Government of a State may, having regard to the extent to which persons belonging to economically weaker sections of the community have been granted stage carriage permits in that State:- ", "(a) reserve in that State such percentage of stage carriage permits, as may be prescribed, for persons belonging to economically weaker sections of the community, or ", "(b) notwithstanding anything contained in the proviso to sub-section (1), give preference, in such manner as may be prescribed, to applications for stage carriage permits from such person Explanation I-In this section and in sections 55 , 63 and 68 , a person shall be deemed to belong to economically weaker section of the community, if and only if, on the prescribed date:- ", "(a) the annual income of such person together with the annual income, if any, of the members of his family; or G ", "(b) the extent of land (whether in one class or in different classes), held by such person together with that, if any, held by the members of his family, or ", "(c) the annual income and the extent of land aforesaid, does, or do not exceed such limit as may be prescribed. ", "Explanation II.- For the purposes of Explanation I, \"family\", in relation to an individual, means the wife or husband, as the case may be, of such individual and the minor children of such individual. (1D) The number of permits reserved under sub- section (1B) and clause (a) of sub-section (1C), shall not exceed fifty per cent of the total number of stage carriage permits granted during a calendar year. (1E) In giving effect to the provisions of sub- section (1B) and clause (a) of sub-section (1C) or may, if it considers necessary or expedient so to do, group the various routes within its jurisdiction. ", "(1F) Where any stage carriage permit is to be granted from the quota reserved under sub-section (1B) or clause(a) of sub-section (1C) to any cooperative society registered or deemed to have been registered under any enactment in force for the time being or any firm to which the provisions of the Indian Partnership Act , 1932 , apply, no permit shall be granted to such society or firm unless the members of the co-operative society or the partners of the firm belong to the Scheduled Castes, the Scheduled Tribes or economically weaker sections of the community: Provided that where the members of such co- operative society or the partners of such firm are partly from the Scheduled Castes, partly from the Scheduled Tribes and partly from the economically weaker sections of the community, or from any two of these categories, any permit under this sub-section shall be granted to such society or firm only from the quota reserved for the category to which the largest number of members of the co-operative society, or as the case may be, partners of the firm belong: ", "439 ", "Provided further that where no reservation has been made in the State for economically weaker sections of the community under clause (a) of sub-section (1C), no permit under this sub-section shall be granted to a co-operative society or firm unless the members of such society or partners of such firm belong to the Scheduled Castes or the Scheduled Tribes or partly to the Scheduled Castes and partly to the Scheduled Tribes and the permit to such society or firm shall be granted only from the quota reserved for the Scheduled Castes or the Scheduled Tribes according as to whether the larger number of the members of the co-operative society, or partners of the firm, belong to the Scheduled Castes or the Scheduled Tribes. (1G) The circumstances under which, the manner in which, and the extent to which, reservation under sub- section (1A) and clause (a) of sub-section (1C) may be carried forward shall be such as may be prescribed. (1H) Notwithstanding anything contained in this section, an application for stage carriage permit from a State transport undertaking for operating in any inter-State route shall be given preference over all other applications: Provided that the authority shall not grant a permit under this sub-section unless it is satisfied that the State transport undertaking would be able to operate in the inter-State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section (3) of section 68D where the undertaking operates the service. ", "Explanation.-For the purposes of this sub-section, 'inter-State route' means any route Lying continuously in two or more States.\" ", "By the amendment of section 47 of the Act as stated above, directed that while considering applications for stage carriage permits should, provided that other conditions being equal? give preference to an application from a person who has a valid licence for driving transport vehicles over applications from individual owners. also provided for reservation of certain percentage of permits for state carriages in favour of persons belonging to the Scheduled Castes and the Scheduled Tribes in the same ratio as in the case of appointments made by direct recruitment by a State Government to public services in that State. Since it was considered necessary to promote the well being of economically weaker sections of the community, was empowered under certain circumstances either to reserve certain percentage of permits for stage carriages for persons belonging to economically weaker sections of the community or to give preference to them in the prescribed manner. It was however, provided that the number of permits reserved under section 47(1B) and (1C)(a) of the Act should not exceed fifty per cent of the total number of stage carriage permits granted in a calendar year. It was also provided that if applied for a stage carriage permit operating in any inter-State route, such application should be given preference over all other applications provided the authority we satisfied that the would be able to operate in the inter-State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section (3) of section 68-D of the Act where the operated its service. By the very same amending Act of 1978 also amended section 68 of the Act by inserting clauses (ci), (cii), (ciii) and (civ) enabling s to frame rules for implementing subsections (1A) to (1H) of section 47 of the Act. The above said amendments made to sections 47 and 68 came into force on January 16, 1979. It is conceded by the learned Attorney General who appeared for that these amendments which were made by would have an over riding effect on section 43-A of the Act introduced earlier by and that section 43-A should be read subject to those later amendments made by . Curiously issued on January IO, 1981 and January 23, 1981 the impugned notifications which are set out at the commencement of this judgment. By the first notification, directed of the State of Uttar Pradesh to issue stage carriage permits (except in respect of routes or areas for which schemes had been published under section 68-C of the Act) to all eligible applicants and that there should be no upper limit to the number of stage carriages for which permits might be provided. By the second impugned notification dated January 23, 1981, directed and to have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub-section (1) of section 47 of the Act and should also take into consideration representation made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lay. It also directed that section 57 should be deemed to have been complied with if concerned intimated the particulars of the applications to such local authority and police authority for making representations, if any, within a period of fifteen days from the date of despatch of the intimation with the stipulation that if no representation was received within the prescribed period of time, it would be presumed that they had no representation to make and considered any representation made by such local authority and police authority; ", "A reading of these two notifications shows that ignored, first, the legislative policy underlying the Uttar Pradesh Act 15 of 1976 by which the new sub-section (2) of section 43-A was enacted in substitution of the former sub section (2) with retrospective effect. As stated earlier, introduced the new sub-section (2) of section 43-A after it realised the mistake committed by in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under utilisation of capital and fuel and in unreasonable competition which eventually eliminated small operators from business. The State Government also ignored the new policy governing the issue of permits introduced by by amending section 47 of the Act. It was argued on behalf of before that d not contravened either section 43-A , or the provisions of section 47 as amended in the year 1978. dismissed the writ petitions observing that the Statement of objects and Reasons attached to the Bill which was ultimately enacted as the U.P. Act 15 of 1976 could not over-ride the clear provisions of section 43-A as amended by that Act. upheld the notification dated January 10, 1981 and further observed that since the schemes of grant of free permits had been upheld by it ' had the power to prescribe the procedure to be followed in granting the same which has been provided for by the Notification dated January 23, 1981'. Repelling the contention of the writ petitioners that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes, the Scheduled Tribes and weaker sections as provided in section 47 as amended by in 1978, the grant of permits would be vitiated, observed as follows: ", "\"The question of reservation, however, arises only in those cases where the seats or articles are limited for distribution or allotment but where there is no limit or no fixed number, the question of reserved on will not arise. In that event, every body would be served according to his need and aspiration. Hence, if under section 43-A a direction has been made for grant of stage carriage permit to all eligible applicants without putting any fixed number for the vehicles to ply, the interest of the Scheduled Castes and Scheduled Tribes would be sufficiently safeguarded. A member of the Scheduled Caste or Scheduled Tribe as well as economically weaker section of the community would as much be entitled to get a permit to run his vehicle as a member of any other community. It is where the seats are limited that the legislature thought of making a provision to reserve the grant of permits in their favour to the extent of 25 per cent. The principle behind reservation in the grant of stage carriage permits employed by the appears to be the same as in reserving appointment in the Government service. If today government services are available in abundance, the question of reservation would not arise. It is only on account of the posts being limited that the question of reservation has arisen. So we are not able to agree with the submission of the petitioner's learned counsel that there is a conflict between section 43-A , as inserted by and the amendments made in section 47 by in the Motor Vehicles Act .\" ", " further proceeded to observe that though the tow impugned notifications did not follow the procedure prescribed by sub-section (2) of section 43-A as it is now in force in the State of Uttar Pradesh, they could be sustained under sub-sec. (1) of section 43-A which authorised to issue such directions of a general character as it might consider necessary or expedient in the public interest in respect of any matter relating to road transport to or to and which required such authority to give effect to any such directions. also relied upon the decision of this Court in case (supra) to hold that larger number of buses operating on different routes would be for the convenience and benefit of the travelling public. ", "We may here state that any observations made in case (supra) would be inapplicable so far as these cases presently before us are concerned. In that case the was concerned with sub-section (2) of section 43-A of the Act as it stood then which was a provision enacted by the . That sub- section provided that without prejudice to the generality of the power contained in section 43-A(1) of the Act where was of opinion that it was in public interest to grant stage carriage permits (except) in respect of routes or areas for which schemes have been published under section 68 (C) or contract carriage permits or public carrier permits to all eligible applicants it may issue appropriate directions as stated therein. That sub-section contained a clear legislative policy which considered that there could be no public prejudice if all eligible applicants were granted permits. Without saying anything more on the point, it may be stated that whatever this may have observed while considering that provision would not apply now as there is a clear departure made by the from that policy when it enacted the new sub-section (2) of section 43-A . In the face of this amendment by which the former sub-section (2) of section 43-A which specifically authorised he State Government when it was satisfied that it was necessary to do so in the public interest to issue directions to the Transport Authorities to grant permits to all eligible applicants was deliberately taken away by the State , the High was wrong in holding that such power was still available under sub-section (1) of section 43-A of the Act which was widely worded. The High shut its eyes to the realities of the situation when it observed that in this case the contents of the Statement of objects and Reasons were irrelevant as the provisions of section 43-A (1) were very clear. Even without the aid of the Statement of objects and Reasons it has to be held that by the substitution of the former sub-section (2) by the new sub- section (2) in section 43-A the clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualification of applicants. It is a well settled rule of construction of statutes that whenever a court is called upon to interpret an amended provision it has to bear in mind the history of that provision, the mischief which the attempted to remedy, the remedy provided by the amendment and the reason for providing such remedy. Therefore, after the amendment at any rate it has to be held that sub-section (1) of section 43-A of the Act did not comprehend within its scope the power to issue direction, for issuing permits to all eligible applicants without any sort of restriction relevant to the scheme of the Act. What does section 43-A(1) after all say ? It says that may issue such directions of a general character as it may consider necessary in the public interest What is the meaning of the term 'public interest' ? In the context of the Act, it takes within its fold several factors such as, the maximum number of permits that may be issued on a route or in any area having regard to the needs and convenience of the travelling public, the non-availability of sufficient number of stage carriage services in other routes or areas which may be in need of running of additional services, the problems of law and order, availability of fuel, problems arising out of atmospheric pollution caused by a large number of motor vehicles operating in any route or area, the condition of roads P and bridges on the routes, uneconomic running of stage carriage services leading to elimination of small operators and employment of more capital than necessary in any sector leading to starvation of capital investment in other sectors etc. Public interest under the Act does not mean the interest of the operators or of the passengers only. We nave to bear in mind that like every other economic activity the running of stage carriage service is an activity which involves use of scarce or limited productive resources. Motor Transport involves a huge capital investment on motor vehicles, training of competent drivers and mechanics establishment of workshops, construction of safe roads and bridges, deployment of sufficient number of policemen to preserve law and order and several other matters. To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over simplification of a problem with myriad facts affecting the general public. If we run through the various provisions of the Act it becomes clear how much attention is given by it to various matters affecting public interest. There are provisions relating to licensing of drivers on the basis of their competence, licensing of conductors, specifications to which the motor vehicles should conform, coordination of road and rail transport, prevention of deterioration of the road system, prevention of uneconomic competition among motor vehicles, fixation of reasonable fare, compliance by motor vehicles with the prescribed time table, construction of bus stands with necessary amenities, maintenance of standards of comfort and cleanliness in the vehicles, development of tourist traffic and several other matters with the object of making available adequate and efficient transport facilities to all parts of the country. Any direction given by under section 43-A of the Act should therefore, be in conformity with all matters regarding which the statute has made provision. In this situation to say that any number of permits can be issued to any eligible operator without any upper limit is to overstep the limits of delegation of statutory power and to make a mockery of an important economic activity like the motor transport. ", "It is surprising that has reached the conclusion that the preferences and reservations to be observed while granting permits as stated in the proviso to sub-section (1) to section 47 and in sub sections (1A) to (1H) of section 47 have not been contravened as there is no restriction on the number of permits to be issued. The observation of that preferences have to be shown and reservations have to be made only when there is scarcity of permits and since there are no restrictions on the number of permits to be issued there is no necessity to make any such provision really shocks us. erred in not noticing that it was dealing with a vital economic activity which could be carried on at a huge cost both to the operator and to the and that by issuing the notification containing a direction to to issue limitless number of permits, the State had attempted to circumvent sub-sections (1) and (1A) to (1H) of section 47 of the Act. Preferences and reservations have value only when there is a limit on the number of permits to be issued and in the context of the Act there should necessarily he a limit on the issue of permits to operate motor vehicles in respect of any route or area. By the method adopted by it the State has virtually allowed the rich and well-to-do businessman who can bear the loss for some time to introduce any number of vehicles on a route or in any area until all the small operators who also may take the permits to leave the field owing to the inevitable loss that ensues by the operation of an unlimited number of vehicles. The learned Attorney General while conceding that the amendment made in 1978 to section 47 of the Act should prevail contended that they had not been violated by the impugned notifications. We do not agree with the above submission. We are clearly of the view that the State has transgressed the provisions contained in sub-section (1) and sub-sections (1A) to (1H) of section 47 . It has failed to comply with the duty imposed on it by those provisions. ", "We are of the view that the two notifications are clearly outside the scope of the Act. The first notification which directs that all eligible applicants shall be granted permits and that there shall be no upper limit to the number of permits to be issued for stage carriages and the second notification which says that shall have regard only to matters referred to in clauses (a), (b), ", "(d) and (f) of sub-section (1) of section 47 of the Act and thereby precludes to take into consideration matters contained in the proviso to section 47(1) and in sub-section (1A) to (1H) of section 47 of the Act are ultra vires the Act and they are liable to he struck down. ", "We, therefore, allow these appeals, set aside the judgment of in each of these cases and declare that the Notification No. 68 T/XXX-4-15 KM/79 dated January 10, 1981 and the Notification No. 241 T/XXX-4-15- P/79 dated January 23,1981 issued by the GoverDmeDt of the State of Uttar Pradesh under section 447 43-A of the Act are ultra vires and, therefore, void and, ineffective. ", "In the circumstances of the case. there will be no order as to costs. ", "H.L.C. Appeals allowed."], "relevant_candidates": ["0001274508"]} {"id": "0000172640", "text": ["PETITIONER: SIR SHADI LAL SUGAR AND GENERAL MILLSLTD. & . Vs. RESPONDENT: COMMISSIONER OF INCOME TAX, DELHI. DATE OF JUDGMENT31/07/1987 BENCH: , (J) BENCH: , (J) OZA, G.L. (J) CITATION: 1987 AIR 2008 1987 SCR (3) 692 1987 SCC (4) 722 JT 1987 (3) 189 1987 SCALE (2)153 ACT: Income Tax Act , 1961: ss. 256 , 271 & 274 / Income Tax Act , 1922: s. 66- -Income-tax Reference--Finding of fact by Tribu- nal--When could be transformed into question of law and interfered with. HEADNOTE: The assessee company, which derived its income from the manufacture and sale of sugar and confectionery, was as- sessed for the years 1958-59 by the Income Tax Officer under the Income Tax Act , 1922 by making additions of Rs.48,500 for cane cost, Rs.67,500 for shortage in cane, and Rs.21,700 for salary of outstation staff. The assessee did not chal- lenge the said assessment order. Later in the year 1963 the Income Tax Officer issued notice under s. 274 read with s. 271 of the Income Tax Act, 1961 in respect of the assessment year 1958-59 for imposing penalty. Before the Inspecting Assistant Commissioner the assessee admitted that these amounts, which were not included in the return by the compa- ny, represented income. On finding that there was deliberate understatement of income he imposed a penalty of Rs.70,000. On appeal the held that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipsofacto indicate any criminality in its action to conceal any portion of the income, and that the assessee could very well have argued against the additions of the two sums, namely, Rs.67,500 and Rs.21,700. As regards the sum of Rs.48,500 it found that the assessee had agreed to similar addition in the earlier years and so the penalty was war- ranted in similar amount for this year and taking into consideration that the sum involved was Rs.48,500, it con- sidered that a smaller penalty of Rs.5,000 was imposable. took the view that the onus of proving concealment was on the because proceedings for penalty were penal in character, and held that so far as the sum of Rs.48,500 was concerned it was not proved that there was any deliberate concealment, that the had not set aside the finding of the Assistant Inspecting Com- 693 missioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly estab- lished concealment, that the assessee in fact had surren- dered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre- sented its income, that acceptance by the assessee was material to give proper weight to judge the criminality of the action which in its opinion was not given, and that the omitted to take into account the fact that the assessee had admitted that the amount of Rs.21,700 repre- sented its income. In the appeal by special leave on the question as to how far in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non-consideration of all relevant facts. Allowing the appeal, HELD: 1.1 In an income tax reference a finding on a question of pure fact could be reviewed by only on the ground that there was no evidence to support it or that it was perverse. If found that there was no such evidence, those circumstances would give rise to question of law and could be agitated in a reference. [700G-701A, 702H-703A] 1.2 When a conclusion has been reached on an apprecia- tion of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue is an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found in such a case would be a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an infer- ence from the facts could not be regarded as one of law. The proposition that an inference from. facts is one of law is, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact an inference from the facts is as much a question of fact as the evidence of the facts. [701A-D] In the instant case, it is not said that the had acted on material which was irrelevant to the enquiry or considered material 694 which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions. It took into account all the relevant facts in a proper light in rendering a finding of fact. Therefore, no question of law arises. [703BC, 701DE] - tax, Madras, 31 I.T.R. 28; v. Com- missioner of Income-tax, Madras, 37 I.T.R. 151; 1, 66 I.T.R. 462 and ., 87 I.T.R. 421, referred to. 2.1 was wrong in saying that proper weight had not been given to all the evidence and admissions made by the assessee. The had taken into considera- tion the fact that the assessee had admitted the additions as its income when faced with non-disclosure in assessment proceedings. The time when the assessee admitted the addi- tions was also considered. But to admit that there has been excess claim or disallowance is not the same thing as delib- erate concealment or furnishing inaccurate particulars. There may he hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the to prove the mens rea of quasi criminal offence. [703BC, 702AB, 701A, 702BC] 2.2 It is for the Income-tax authority to prove that a particular receipt is taxable. If however, the receipt is accepted and certain amount is accepted as taxable, it could be added. But in the instant case, it was not accepted by the assessee that it had deliberately furnished inaccurate particulars or concealed any income. [702EF] 3. observed that the time of admission was not noted by the and this fact had not been properly appreciated by the . That is not correct. The had made additions during the assessment pro- ceedings. In any event that would be appreciation of evi- dence in a certain way, unless in such misappreciation which amounted to non-appreciation no question of law would arise. Nonappreciation may give rise to the question of law but not mere misappreciation even if there he any from certain angle. Change of perspective in viewing a thing does not transform a question of fact into a question of law. [703CD] in preferring one view to another view of factual 695 appreciation in the instant case, has therefore, trans- gressed the limits of its. jurisdiction under the Income-Tax Reference in answering the question of law. [703F] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1660 (NT) of 1974. ", "From the Judgment and Order dated 23.12.1971 of in Income-tax Reference No. 53 of 1968. for the Appellants. ", "Miss and for the Respondent. The Judgment of the Court was delivered by , J. This appeal by special leave is from the judgment and order of dated 23rd December, 1971 in the Income Tax Reference. The assessee is a limited company under the Indian Companies Act and derived its income from the manufacture and sale of sugar and confectionery. The assessment for the assessment year 1958-59 was completed under the Indian Income Tax Act , 1922. The Income Tax Officer in the said assessment, inter alia made the following additions besides others in respect of the following items: ", "(i) For cane cost Rs.48,500/- (ii) For shortage in cane Rs.67,500/- (iii) For salary of outstation staff Rs.21,700/- ", "The assessee did not challenge the said assessment order passed by the Income Tax Officer in so far as the additions of the above amounts in appeal or otherwise. It was the case of the assessee that it did not appeal because it wanted to keep good relations with the revenue although, according to the assessee, the above additions made by the Income Tax Officer were totally unjustified and illegal. On 14th March, 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 (hereinafter called 'the Act') in respect of the assessment year 1958-59 for imposing penalty. The assessee company demurred. After considering the reply the Inspecting Assistant Commissioner on 1st October, 1964 imposed a penalty of Rs.70,000 under section 274 read with section 271 of the Act holding inter alia that there was concealment of income to the tune of Rs.1,37,700 and the maximum penalty of Rs.1,06,317 was imposable in law but a sum of Rs.70,000 was imposed as penalty considering the facts and circumstances of the case. ", "The assessee preferred an appeal against the said order. The after considering the entire matter, reduced the penalty to Rs.5,000. The referred the three following questions, two at the instance of the assessee and one at the instance of the revenue, to for determination: ", "\"1. Whether, on the-facts and in the circum- stances of the case, the was correct in holding that the provisions of section 271 of the Income Tax.Act, 1961 are applicable to the present case; ", "2.'Whether, there is any material to warrant the finding that the assessee company had concealed the particulars of its income or deliberately furnished inaccurate particulars thereof within the meaning of section 271(2) of the Income Tax Act, 1961; and ", "3. Whether, on the facts and in the circum- stances of the case, the is correct in reducing the penalty under section 271(1)(c) from Rs.70,000 to Rs.5,000?\" was of the opinion that the third question did not clearly bring out the matter in dispute between the parties and as such it was reframed as follows: ", "\"Whether, on the facts and in the circum- stances, the finding of the that the assessee had not concealed income to the extent of Rs.67,500 and Rs.21,700 within the meaning of section 271(1)(c) of the Indian Income Tax Act, 1961, is correct in law?\" ", " noted that the Income Tax Officer had made certain additions and disallowed certain expenses and of the various amounts disallowed only three amounts were required to be considered by namely; (i) inflation in price of sugar-cane of an amount of Rs.48,500, ", "(ii) excess shortage claimed for cane Rs.67,500 and (iii) salary of out-station staff of loading contractors of Rs.21,700. So far as the first question is concerned held in favour of revenue and answered the question in the negative. The answer to this question is no longer in dispute here. So far as the second question is concerned answered the question in the nagative and in favour of the assessee. There is no dispute about that question too, in so far as there is no appeal by the revenue. As regards the third question re- framed as mentioned hereinbefore, it was answered by in the affirmative and in favour of the revenue. The assessee has come up in appeal to this Court challenging the correctness of that answer. In this appeal we are con- cerned with the correctness or otherwise of the answer given to this question and the appeal must be confined to the correctness of the answer given to the third question as reframed. ", "The Income Tax Officer in his assessment order out of which this penalty proceedings arose noted that there were several disallowances in various accounts and he mentioned altogether 19 items totalling Rs.3,01,787. All these were on account of disallowances. Main item was shortage in cane and the amount was Rs.67,500. Another items was salary of out- station staff and the amount was Rs.21,700. There was also addition of Rs.48,500 on account of inflation in the price of sugar cane. The Inspecting Assistant Commissioner in his order noted, inter alia three items, namely, (i) inflation in price of sugar cane Rs.48.500 (ii) excess shortage claimed for cane Rs.67,500 and (iii) salary of outstation staff of loading contractors Rs.21,700. It was found so far as the last item was concerned that the amount was disal- lowed being a false debit. It was found that the assessee attempted to understate the income by debiting a false expenditure of Rs.48,500. The Inspecting Assistant Commis- sioner noted that actual shortage was 21,143 Mds. valuing Rs.26,429 while the assessee had claimed Rs.1,34,661 for shortage at 2%. The excess claim was also indicative of the real position that the shortage was fictitiously claimed at a high figure. Faced with these facts the assessee eventual- ly surrendered Rs.67,500. Therefore, the Inspecting Assist- ant Commisioner held that the assessee was certainly reduc- ing the income by debiting false claims for excess shortage and the action amounted to intentional concealment. Salary amounting to Rs.21,700 paid by the contractors to their staff working at out-centres was debited in the books and while it was claimed that the staff working at these centres were actually employed by the company, on investigation the claim was found to be false. In this connec- ", "698 ", "tion a reference was made to the statement of one . He had stated that he had employed five per- sons at the out-centres and there was no employee of the mill working at the centres. The mill had kept there neither any clerk not any chowkidar. He confirmed that he had paid the employees out of his own funds and had categorically denied that they were the employees of the mill or that they were paid by it. In his statement he further stated that although the staff was actually paid by him yet the compa- ny's accountant had obtained their signatures on salary sheets and thus inflated the expenses by raising false debit in the salary account. This procedure was followed in re- spect of other contractors also. The salary bill was thereby inflated by Rs.21,700. The Inspecting Assistant Commissioner therefore, held that the assessee had concealed income to the extent of Rs.21,700. He had also come to the conclusion that the cane purchases noted against these last entries were false and fictitious and the quantity covered by these entries was 31, 561 Mds. valuing at Rs.48,500. This was a false debit. The assessee debited the three items of Rs.48,500, Rs.67,500 and Rs.21.700. The assessee admitted that these items represented income. It was also borne out by records that the amounts were not included in the return by the company. The offence of deliberate under-statement of income was, thus clearly established according to the In- specting Assistant Commissioner. He, therefore, found that the tax sought to be evaded came to Rs.70,914 and the maxi- mum penalty worked out to Rs. 1,06,37 1. Having regard to the facts and circumstances of the case, he imposed a penal- ty of Rs.70,000. ", "In appeal was of the view that not much turned upon the fact that the assessee agreed to the additions of the amounts in the assessment. So far as the reliance placed upon 's statement by the Inspect- ing Assistant Commissioner was concerned, it had no rele- vance or bearing to the facts of the assessment year in question. He was not the contractor employed by the assessee in the year of account. He came in only for a later year. One was the contractor in the year in ques- tion. He had specifically stated that he was responsible for shortages. He had also admitted that there was staff main- tained by the mill at the centre at which he was the loading contractor. In fact he had gone to the extent of and stated as to what staff was maintained in that centre; there was a man in charge of the centre, a weighment clerk, a cane clerk and three to four chowkidars. He had also stated that they were not his employees. According to the in these circumstances the assessee could very well have argued against the addition of the two sums, namely, Rs.67,500 and Rs.21,700. But the assessee as we have noted had agreed to the amounts being included. The was of the view that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipso facto indicate any criminality in its action to conceal any portion of the income. The found that so far as Rs.48,500 was concerned in the inflation in the price of sugar-cane, the previous history was against the assessee. It had agreed to the similar additions in the earlier years 1955-56 and 1956-57 the noted. From the above facts, it was seen that the penalty was warranted in similar amount for this year also, the noted. Taking into consideration that the sum involved against this year was Rs.48,500 the tribunal considered that a smaller penalty was imposable. The accordingly imposed a total penalty of Rs. 5,000. ", " reiterated that the onus of proving concealment was on the revenue because the proceedings for penalty were penal in character. In that view of the matter was of the opinion that so far as Rs.48,500 was concerned it was not proved that there was any deliber- ate concealment. So far as the other two amounts of Rs.67,500 and Rs.21,700 were concerned, it was contended that noted the history of the order of the Inspecting Assistant Commissioner and the circumstances of the case and was of the view that had not at all considered the fact that the value of the shortage was only Rs.26,429. According to , the had brushed aside the fact that the assessee had agreed to the addition of this amount. According to , the had not set aside the finding of the Inspecting Assistant Commissioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly established concealment. The assessee according to the Inspecting Assistant Commissioner had surrendered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre- sented its income. In other words, what sought to state was that acceptance by the assessee was material to give proper weight to judge the criminality of the action which according to was not given. highlighted that so far as Rs.67,500 was concerned only on being faced with facts from which there could possibly be no escape from the inference that the amount represented his income, that the assessee agreed to its inclusion. was of the view that the was in error in brushing aside consideration of these aspects while considering the question of concealment. In respect of the addition of Rs.21,700 the Inspecting Assistant Commissioner had relied upon the statement of as also the fact that the assessee admitted that this item represented its income. The did not place reliance upon the statement of . It, however, omitted to take into account the fact that the assessee had admitted that these items represented its income. was of the view that such admissions were made by the assessee but the had not properly appreciated that aspect. Therefore in respect of these two items was of the view that the was not right in holding that the assessee was not guilty of any concealment. So far as question No. 2 was concerned which dealt with Rs.48,500 confined itself to the disallowance in respect of purchase of cane. So far as this question was answered in favour of the assessee and there is no challenge by the revenue, it is not material any more. came to the conclusion that the finding of the in respect of the concealment of Rs.48,500 was not justified in law. It was urged before us that as the second question which was in general form has been answered in favour of the assessee, the third question as reframed could not have been answered otherwise. We are unable to accept this contention. As evident from the discussion by , confined to second question with regard to disallowance in respect of purchase of cane that amounted to Rs.48,500. So, therefore it cannot be said that in view of the answer given to the second question, the third question was no longer open. The second question was confined to only Rs.48,500. ", "So far as whether there was justification for the answer given to the reframed third question or was proper or not has to be judged on the basis as to how far in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non-consideration of all relevant facts. The law on this point is quite settled. ", "The question was considered by this Court exhaustively in - tax, Madras, 31 I.T.R. 28 where this Court reiterated that findings on questions of pure fact arrived at by were not to be disturbed by on a refer- ence unless it appeared that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come; and this was so, even though would on the evidence have come to a conclusion entirely different from that of . In other words, such a finding could be reviewed only on the ground that there was no evi- ", "701 ", "dence to support it or that it was perverse. ", "When a conclusion had been reached on an appreciation of a number of facts established by the evidence, whether that was sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue was an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found was in such a case, a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the appli- cation of any principle of law, an inference from the facts could not be regarded as one of law. The proposition that an inference from facts was one of law was, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact an inference from the facts was as much a question of fact as the evidence of the facts. In the instant case there is a finding of fact and unless it could be said that all the relevant facts had not been considered in a proper light, no question of law arises. In our opinion, took into account all the relevant facts. The had been accused by of not taking into con- sideration the fact that the assessee had admitted these amounts in the assessment. To admit that there has been excess claim or disallowance is not the same thing as delib- erate concealment or furnishing inaccurate particulars. At least in the background of the law as it stood at the rele- vant time that was the position. There have been some changes subsequentiy which we have not noticed for the present purpose. ", " - tax, Madras, 37 I.T.R. 15 1, this Court held that tax Appellate was a fact finding tribunal and if it arrived at its own conclusions of fact after due consideration of the evidence before it the court could not interfere. It was necessary, however, that every fact for and against the assessee must have been considered with due care and the must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the should not be coloured by any irrelevant considerations or matters of prejudice and if there were any circumstances which required to be ex- plained by the assessee, the assessee should be given an opportunity of doing so. In this case, the had taken into consideration the fact that the assessee had admitted the additions as its income when faced with non-disclosure in assessment proceedings. accused the of not considering the time when the assessee admitted the additions. We find that it was duly considered by the . We find that the assessee admitted that these were the income of the assessee but that was not an admission that there was deliberate concealment. From agreeing to additions it does not follow that the amount agreed to be added was concealed. There may be hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the revenue to prove the mens rea of quasi criminal offence. 1, 66 I.T.R. 462, the Court held that the Income-tax Appellate performed a judicial function under the Income-tax Act and it was invested with authority to determine finally all questions of fact. The must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the asses- see and the Commissioner in the light of the evidence and the relevant law. The was undoubtedly competent to disagree with the view of the Appellate Assistant Commis- sioner, but in proceeding to do so, it had to act judicially i.e. to consider all the evidence in favour of and against the assessee. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence could not be regarded as conclusively determinative of the ques- tion of fact raised before the . It is for the Income-tax authority to prove that a particular receipt is taxable. If, however, the receipt is accepted and certain amount is accepted as taxable, it could be added but it was not accepted by the assessee, however, that it hard deliber- ately furnished inaccurate particulars or concealed any income. In our opinion, the has properly considered all the evidence in the instant case. ., 87I I.T.R. 421, this Court again reiterated that it was for the to decide questions of fact, and in a reference under section 66 of the Act as at that time could not go behind the 's findings of fact. could only lay down the law applicable to the facts found by the . in a reference under section 66 of the Act, as at that time could, however, go into the ques- tion as to whether the conclusion of the on a question of fact was based upon relevant evidence. If found that there was no such evidence to support the finding of fact of the , those circumstances would give rise to a question of law and could be agitated in a reference. Here in the instant case that is not the position. This Court again reiterated that it was also well-established that when a acted on material which was irrelevant to the enquiry or considered material which was partly relevant and partly irrelevant or based on conjectures, surmises and suspicions and partly on evidence, then in such a situation an issue of law arose and the finding of the could be interfered with. That is not the position here. In the instant case, it is not said that the had acted on material which was irrelevant to the enquiry or considered material which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions. was wrong in saying that proper weight had not been given to all the evidence and admissions made by the asses- see. further observed that the time of admis- sion was not noted by the and this fact had not been properly appreciated by the . That is also not correct. The had made additions during the assess- ment proceedings. In any event that would be appreciation of evidence in a certain way, unless in such misappreciation which amounted to non-appreciation no question of law would arise. Non-appreciation may give rise to the question of law but not mere misappreciation even if there be any from certain angle. Change of perspective in viewing a thing does not transform a question of fact into a question of law. In the instant case we are of the opinion that in pre- ferring one view to another view of factual appreciation, transgressed the limits of its jurisdiction under the Income-tax reference in answering the question of law. ", "In the premises, we are of the opinion that was in error in so far as it held that the had acted incorrectly. We are further of the opinion that the reframed question must be answered in the affirmative and in favour of the assessee. ", "The appeal is allowed and the judgment and order of in so far as answer to the question No. 3 is concerned is set aside. The assessee is entitled to the costs of this appeal. ", " al- lowed."], "relevant_candidates": ["0000000987", "0000053020", "0001464458", "0001720898"]} {"id": "0000177474", "text": ["JUDGMENT , J. ", "There are certain common questions of law which have been referred to us by the , at the instance of the revenue, arising out of the assessment of the assessee for the two assessment years 1975-76 and 1976-77, and the questions of law referred read as under: ", "\"1. Whether, on the facts and in the circumstances of the case, is correct in law in holding that the Commissioner had not validly assumed jurisdiction under section 263 of the Income Tax Act and, accordingly, in cancelling the order made for the assessment years 1975-76 and 1976-77 ? ", "2. Whether, on the facts and in the circumstances of the case, is justified in law in holding that inasmuch as tile assessment was made under section 143(3) , read with section 144B on the basis of the directions given by the Inspecting Assistant Commissioner, the order. made cannot be subject-matter of revision by the Commissioner under section 263 ? ", "3. Whether, view that there was no clear finding in the order passed by the Commissioner of Income-tax under section 263 regarding the items allowed by the Income Tax Officer which could be termed as prejudicial to the interest of the revenue is sustainable in law and is reasonable on the facts obtaining in this case ?\" ", "2. The questions relate to the jurisdiction of the Commissioner under section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The assessee is a public limited company. The assessments for the assessments years 1975-76 and 1976-77 were completed by the Income Tax Officer under section 143(3) , read with section 144B , of the Act. The Commissioner on perusal of the records of the assessee for the two assessment years noticed that the orders were erroneous and prejudicial to the interest of the revenue and, accordingly, show-cause notices were issued to the assessee requiring to show cause as to why the orders of assessment made by the assessing officer should not be set aside with a direction to the assessing officer to consider that points contained in the show-cause notices. In the show-cause notices as many as 15 items have been considered to be erroneous and prejudicial to the interest of the revenue insofar as the assessment year 1975-76 is concerned and 24 items were considered to be erroneous and prejudicial to the interest of the revenue as far as the assessment year 1976-77 is concerned. The assessee sent a detailed reply and stated that the proposal to revise the orders of assessment is based on assumptions and not any material. The assessee has also dealt with each individual item and submitted that all the points have been considered by the Inspecting Assistant Commissioner () at the time of finalisation of draft assessment and, therefore, the revision proceedings initiated by the Commissioner should be dropped. The Commissioner found that the Income Tax Officer had not considered the points while completing the assessment and, therefore, overruled the objections raised by the assessee. He found certain instances wherein the assessment orders showed that they were erroneous and prejudicial to the interest of the revenue. After noticing some of those items, he came to the conclusion that those items represent various issues covered in the show-cause notices and many of them could be considered after the examination of the books of the assessee. He, therefore, held that the orders of assessment were erroneous and prejudicial to the interest of the revenue and in that view of the matter, set aside the orders of assessment for the two assessment years 1975-76 and 1976-77 and remitted the matter to the assessing officer to examine other issues also contained in the showcase notices and take appropriate action. ", "2. The questions relate to the jurisdiction of the Commissioner under section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The assessee is a public limited company. The assessments for the assessments years 1975-76 and 1976-77 were completed by the Income Tax Officer under section 143(3) , read with section 144B , of the Act. The Commissioner on perusal of the records of the assessee for the two assessment years noticed that the orders were erroneous and prejudicial to the interest of the revenue and, accordingly, show-cause notices were issued to the assessee requiring to show cause as to why the orders of assessment made by the assessing officer should not be set aside with a direction to the assessing officer to consider that points contained in the show-cause notices. In the show-cause notices as many as 15 items have been considered to be erroneous and prejudicial to the interest of the revenue insofar as the assessment year 1975-76 is concerned and 24 items were considered to be erroneous and prejudicial to the interest of the revenue as far as the assessment year 1976-77 is concerned. The assessee sent a detailed reply and stated that the proposal to revise the orders of assessment is based on assumptions and not any material. The assessee has also dealt with each individual item and submitted that all the points have been considered by the Inspecting Assistant Commissioner () at the time of finalisation of draft assessment and, therefore, the revision proceedings initiated by the Commissioner should be dropped. The Commissioner found that the Income Tax Officer had not considered the points while completing the assessment and, therefore, overruled the objections raised by the assessee. He found certain instances wherein the assessment orders showed that they were erroneous and prejudicial to the interest of the revenue. After noticing some of those items, he came to the conclusion that those items represent various issues covered in the show-cause notices and many of them could be considered after the examination of the books of the assessee. He, therefore, held that the orders of assessment were erroneous and prejudicial to the interest of the revenue and in that view of the matter, set aside the orders of assessment for the two assessment years 1975-76 and 1976-77 and remitted the matter to the assessing officer to examine other issues also contained in the showcase notices and take appropriate action. ", "3. The assessee challenged the order of the Commissioner before . held that the Commissioner had no jurisdiction to revise the orders of assessment made in pursuance of the directions of the Inspecting Assistant Commissioner on the ground that, there was a statutory merger of the order of the Income Tax Officer with that of the Inspecting Assistant Commissioner. The recorded a finding that the order of the Commissioner was not a speaking order and the Commissioner has not given any clear finding that any of the items listed in the order was erroneous and prejudicial to the interest of the revenue. According to the , the Commissioner has not considered the objections of the assessee. The also held that there is no material to show the assessments were made in a hurry, especially when the procedure prescribed under section 144B had been followed, and the higher authority had been associated in making the orders of assessment. The also held that the Commissioner had surrendered his judgment to the audit party and delegated his discretion to the assessing officer. The , therefore, held that the procedure adopted by the Commissioner would vitiate the order of the Commissioner and cancelled the order passed by the Commissioner and allowed the appeal preferred by the assessee. The , on the basis of the directions of this , has stated a case and referred the questions of law set out earlier for the two assessment years in question. ", "3. The assessee challenged the order of the Commissioner before . held that the Commissioner had no jurisdiction to revise the orders of assessment made in pursuance of the directions of the Inspecting Assistant Commissioner on the ground that, there was a statutory merger of the order of the Income Tax Officer with that of the Inspecting Assistant Commissioner. The recorded a finding that the order of the Commissioner was not a speaking order and the Commissioner has not given any clear finding that any of the items listed in the order was erroneous and prejudicial to the interest of the revenue. According to the , the Commissioner has not considered the objections of the assessee. The also held that there is no material to show the assessments were made in a hurry, especially when the procedure prescribed under section 144B had been followed, and the higher authority had been associated in making the orders of assessment. The also held that the Commissioner had surrendered his judgment to the audit party and delegated his discretion to the assessing officer. The , therefore, held that the procedure adopted by the Commissioner would vitiate the order of the Commissioner and cancelled the order passed by the Commissioner and allowed the appeal preferred by the assessee. The , on the basis of the directions of this , has stated a case and referred the questions of law set out earlier for the two assessment years in question. ", "4. The learned counsel for the revenue submitted that the order of the is erroneous in law as the proceeded on the assumption that the order of the Commissioner was not a speaking order. He submitted that under the provisions of section 263 of the Act, the Commissioner has wide powers to remit the matter to the assessing officer and it is for the Commissioner to pass such orders thereon as the circumstances of the case would justify. He also submitted that the was not correct in holding that the Commissioner had surrendered his jurisdiction in favour of the audit party and the report of the audit party would constitute a material for the Commissioner to exercise his revisional jurisdiction under section 263 . The submission of the learned counsel for the revenue was that the circumstances relied on by the Commissioner would clearly show that the orders of the assessment were erroneous and they were not in accordance with law and tile Commissioner has jurisdiction to exercise the powers conferred under section 263 . The learned counsel for the assessee, on the other hand submitted that it is the duty of the Commissioner to record his final conclusion on the matters raised in the show-cause notices, especially when the assessee in his reply has pointed out that there were no mistakes or errors in the orders of assessment passed by the assessing officer. The learned counsel for the assessee further submitted that the Commissioner had not exercised the jurisdiction conferred upon him properly, as the Commissioner after setting out the objections raised by the audit party and the reply submitted by the assessee set aside the orders of assessment with a direction to the assessing officer to complete the assessment. According to the learned counsel, the Commissioner should have determined the question whether the orders of assessment were erroneous and prejudicial to the interest of the revenue and it is not open to the Commissioner to remit the matter for the purpose of further investigation. The learned counsel for the assessee relied upon the decision of in the case of v. CWT (1970) 77 ITR 6 and the decision of in the case of Jeewanlal (1929) . CIT (1977) 108 ITR 407, in support of his submission that the Commissioner cannot exercise the power on the basis of the report of the audit party. The learned counsel for the assessee also placed reliance on the decision of this Court in the case of ( 1987) 163 ITR 129/30 Taxman 528 and submitted that the procedure contemplated in section 263 is prejudicial to the income-tax administration as a whole. Reliance was placed by the learned counsel for the assessee on the decision of in the case of . (1993) 203 ITR 108, wherein held that the Commissioner could not direct the Income Tax Officer to re-examine the question, where the Commissioner after initiating the revision proceedings did not decide that the claim of the assessee was erroneous and the expenditure claimed was not revenue in nature, but capital in nature. He, therefore, submitted that on the same analogy the Commissioner had not exercised powers of revision conferred upon him. The learned counsel foil lie assessee also submitted that the orders of the Income Tax Officer should not only be erroneous but the order should have resulted in prejudice to the interests of the revenue and unless the two conditions prescribed in section 263 are satisfied, the Commissioner has no power to revise the orders of the Income Tax Officer. The learned counsel placed reliance on the decision of in the case of a (1975) 98 ITR 422 in support of his above submission. ", "5. Insofar as the second question of law that has been referred to us I or our consideration is concerned, there is no dispute that the issue raised in the second question is covered against the assessee in view of the decision of this Court in . 1090 of 1980, dated 7-1-1997), wherein this Court held that the Commissioner has the jurisdiction under section 263 to interfere with the order passed by the Income Tax Officer as per 1 he directions given by the Inspecting Assistant Commissioner under section 144B of the Act. We are in respectful agreement with the reasoning and the view expressed by the Bench of this Court and, accordingly, the second question referred to us is answered in the negative and in favour of the revenue. The remaining questions, viz., question Nos. 1 and 3 are considered together. ", "5. Insofar as the second question of law that has been referred to us I or our consideration is concerned, there is no dispute that the issue raised in the second question is covered against the assessee in view of the decision of this Court in . 1090 of 1980, dated 7-1-1997), wherein this Court held that the Commissioner has the jurisdiction under section 263 to interfere with the order passed by the Income Tax Officer as per 1 he directions given by the Inspecting Assistant Commissioner under section 144B of the Act. We are in respectful agreement with the reasoning and the view expressed by the Bench of this Court and, accordingly, the second question referred to us is answered in the negative and in favour of the revenue. The remaining questions, viz., question Nos. 1 and 3 are considered together. ", "6. Section 263 empowers the Commissioner to call for and examine the record of any proceeding under the Act and if he considers that any order passed by the Income Tax Officer is erroneous and prejudicial to the interests of the revenue he may, after complying with the principles of natural justice pass such orders thereon as the circumstances of the case require including an order enhancing or modifying the assessment or cancelling the assessment and directing the fresh assessment. in the case of (1997) 143 CTR 406 held that the revisional powers conferred on the Commissioner under section 263 is of wide amplitude and it enables the Commissioner to call for and examine the record of any proceeding under the Act. held that section 263 empowers tile Commissioner to make or cause to be made such enquiry as the deems necessary in order to find out if the order passed by the Income Tax Officer was erroneous in so far as it is prejudicial to the interest of the revenue. The decision of makes it clear that the powers of the Commissioner are very wide in exercising the powers of revision under section 263 . The only limitation on his power is that he must have some materials which would enable him to form a prima facie opinion that the order passed by the Income Tax Officer was erroneous insofar as it is prejudicial to the interests of the revenue. Once he comes to the conclusion on the basis of the material that the order of the Income Tax Officer was erroneous and prejudicial to the interests of the the Commissioner is empowered to pass an order as the circumstances of the case may warrant. He may pass an order enhancing the assessment or he may modify the assessment. He is also empowered to the assessment and direct a fresh assessment. The Commissioner is fully empowered to adopt any one of the three courses indicated the provisions of section 263 and the Commissioner's power cannot be faulted because he cancelled the assessment and directed a fresh assessment. In the instant case, the order of the Commissioner shows that he has gone through the records of the Income Tax Officer and he considered the order to he erroneous and prejudicial to the interests of the revenue on several matters for both the assessment orders. The Commissioner also found that the records do not show that the Income Tax Officer has considered the points on which the revision was made while completing the assessment. He also gave detailed reasons with reference to some of the items for both the assessment years and he held that they were representatives of the various issues covered in the show-cause notices. On the above basis, the Commissioner came to the conclusion that the order of the Income Tax Officer wits erroneous and prejudicial to the interests of the revenue and set aside the orders of the Income Tax Officer with the direction to the Income Tax Officer to consider the points in detail. It is not a case where he simply sets aside the assessment order to verify the correctness of the accounts seeking clarification the assessee as was done in the case of (1998) 230 ITR 695 (Mad.), wherein it was held that the Commissioner cannot simply set aside the order unless he finds the order was erroneous. On the other hand, in the instant case, the Commissioner has found that the records do not show that the Income Tax Officer had considered the points on which revision proceedings were initiated, which indicate that there was a lack of proper enquiry. Not content with the above conclusion, the Commissioner examined the matter and found that some of the items claimed and allowed were erroneous which shows that the order was erroneous. The , in our opinion, was not correct in holding that the order passed by the Commissioner was not a speaking order. ", "6. Section 263 empowers the Commissioner to call for and examine the record of any proceeding under the Act and if he considers that any order passed by the Income Tax Officer is erroneous and prejudicial to the interests of the revenue he may, after complying with the principles of natural justice pass such orders thereon as the circumstances of the case require including an order enhancing or modifying the assessment or cancelling the assessment and directing the fresh assessment. in the case of (1997) 143 CTR 406 held that the revisional powers conferred on the Commissioner under section 263 is of wide amplitude and it enables the Commissioner to call for and examine the record of any proceeding under the Act. held that section 263 empowers tile Commissioner to make or cause to be made such enquiry as the deems necessary in order to find out if the order passed by the Income Tax Officer was erroneous in so far as it is prejudicial to the interest of the revenue. The decision of makes it clear that the powers of the Commissioner are very wide in exercising the powers of revision under section 263 . The only limitation on his power is that he must have some materials which would enable him to form a prima facie opinion that the order passed by the Income Tax Officer was erroneous insofar as it is prejudicial to the interests of the revenue. Once he comes to the conclusion on the basis of the material that the order of the Income Tax Officer was erroneous and prejudicial to the interests of the the Commissioner is empowered to pass an order as the circumstances of the case may warrant. He may pass an order enhancing the assessment or he may modify the assessment. He is also empowered to the assessment and direct a fresh assessment. The Commissioner is fully empowered to adopt any one of the three courses indicated the provisions of section 263 and the Commissioner's power cannot be faulted because he cancelled the assessment and directed a fresh assessment. In the instant case, the order of the Commissioner shows that he has gone through the records of the Income Tax Officer and he considered the order to he erroneous and prejudicial to the interests of the revenue on several matters for both the assessment orders. The Commissioner also found that the records do not show that the Income Tax Officer has considered the points on which the revision was made while completing the assessment. He also gave detailed reasons with reference to some of the items for both the assessment years and he held that they were representatives of the various issues covered in the show-cause notices. On the above basis, the Commissioner came to the conclusion that the order of the Income Tax Officer wits erroneous and prejudicial to the interests of the revenue and set aside the orders of the Income Tax Officer with the direction to the Income Tax Officer to consider the points in detail. It is not a case where he simply sets aside the assessment order to verify the correctness of the accounts seeking clarification the assessee as was done in the case of (1998) 230 ITR 695 (Mad.), wherein it was held that the Commissioner cannot simply set aside the order unless he finds the order was erroneous. On the other hand, in the instant case, the Commissioner has found that the records do not show that the Income Tax Officer had considered the points on which revision proceedings were initiated, which indicate that there was a lack of proper enquiry. Not content with the above conclusion, the Commissioner examined the matter and found that some of the items claimed and allowed were erroneous which shows that the order was erroneous. The , in our opinion, was not correct in holding that the order passed by the Commissioner was not a speaking order. ", "7. The contention of the learned counsel for the assessee that the Commissioner should have examined the issue and recorded a clear finding that the findings of the Income Tax Officer on all the points were erroneous and, therefore, the Commissioner had lacked jurisdiction is bereft of any force. It is no doubt true that for making a valid order under section 263 , it is essential for the Commissioner to record an express finding that the order sought to be revised was erroneous as well as prejudicial to the interests of the revenue. In the instant case, the Commissioner had recorded such a finding and with reference to some of the items he positively found that the orders were erroneous and prejudicial to the interests of the revenue. But in our opinion, there is nothing in section 263 to show that the Commissioner should in all cases record his final conclusion on the points in controversy before him. The above position of law is well-settled by the decision of in the case of Addl. . (1978) 111 ITR 312, wherein held as under: ", "7. The contention of the learned counsel for the assessee that the Commissioner should have examined the issue and recorded a clear finding that the findings of the Income Tax Officer on all the points were erroneous and, therefore, the Commissioner had lacked jurisdiction is bereft of any force. It is no doubt true that for making a valid order under section 263 , it is essential for the Commissioner to record an express finding that the order sought to be revised was erroneous as well as prejudicial to the interests of the revenue. In the instant case, the Commissioner had recorded such a finding and with reference to some of the items he positively found that the orders were erroneous and prejudicial to the interests of the revenue. But in our opinion, there is nothing in section 263 to show that the Commissioner should in all cases record his final conclusion on the points in controversy before him. The above position of law is well-settled by the decision of in the case of Addl. . (1978) 111 ITR 312, wherein held as under: ", "\"... Now, even on this question, we find that there is nothing in section 263(1) to show that before passing the final order under that section, the Commissioner must necessarily and in all cases record final conclusions about the points in controversy before him. As already noted by us above, we would have expected him to record final conclusions which he thought proper if he was to settle the assessment finally but since he has not settled the assessment finally, and has preferred to direct the Income Tax Officer to make an order for fresh assessment, it was proper that he did not express any final conclusions and recorded only prima facie conclusions at which he had arrived with reference to the facts of the case. Here it should be noted that, as the assessment was to be freshly made by the Income Tax Officer, the only proper course for the Commissioner was not to express any final opinion as regards the controversial points.\" (p. 325) ", "8. The further question that arises is whether in the absence of the final conclusion of the Commissioner on all the points raised in the show-cause notices, can it be said that the Commissioner has not exercised the jurisdiction properly? We are of the opinion that it would all depend upon the facts of each case to decide whether the Commissioner had exercised the powers properly or not. In the instant case, the Commissioner found that the Income Tax Officer was not correct in granting relief to some of the items considered in the original assessment proceedings and from the instances or specimen of some of the cases examined by him, he came to the conclusion that the Income Tax Officer had not completed the assessment by following the procedure expected of him. In our opinion, it is not necessary for the Commissioner to examine each item in detail and record a clear finding that. the order passed by the Income Tax Officer was erroneous and not in accordance with law. Some of the typical illustrations were noticed by the Commissioner to find out how the assessment proceedings were proceeded with by the officer and how the orders were erroneous and prejudicial to the interests of the revenue. Therefore, it is not a case of the Commissioner directing fresh assessment without any material. The order of the Commissioner clearly shows that he had enough materials and on that basis, he exercised the powers of, revision under section 263 , set aside the order and ordered to make fresh assessment. The decision of this Court in the case of (1996) 220 ITR 657/88 Taxman 526, makes it clear that the Income Tax Officer is expected to make an enquiry before taking the particular item of income or before granting deduction of particular item of expenditure and if he does not make such an enquiry as expected, that would be a ground for the Commissioner to interfere under section 263 . In our opinion, the decision of this Court in the above case is applicable to the facts of the present case, as the order of the Commissioner indicates that the Income Tax Officer had not called for the details atleast with reference to some of the items, and granted deduction without verification of the claim. The Commissioner has pointed out in the orders of revision that there were certain glaring mistakes in the orders of assessment made by the assessing officer and the Commissioner after examining the records held that the Income Tax Officer had not considered the points raised in the show-cause notice and we are of the opinion that the Commissioner had properly exercised the jurisdiction under section 263 . ", "8. The further question that arises is whether in the absence of the final conclusion of the Commissioner on all the points raised in the show-cause notices, can it be said that the Commissioner has not exercised the jurisdiction properly? We are of the opinion that it would all depend upon the facts of each case to decide whether the Commissioner had exercised the powers properly or not. In the instant case, the Commissioner found that the Income Tax Officer was not correct in granting relief to some of the items considered in the original assessment proceedings and from the instances or specimen of some of the cases examined by him, he came to the conclusion that the Income Tax Officer had not completed the assessment by following the procedure expected of him. In our opinion, it is not necessary for the Commissioner to examine each item in detail and record a clear finding that. the order passed by the Income Tax Officer was erroneous and not in accordance with law. Some of the typical illustrations were noticed by the Commissioner to find out how the assessment proceedings were proceeded with by the officer and how the orders were erroneous and prejudicial to the interests of the revenue. Therefore, it is not a case of the Commissioner directing fresh assessment without any material. The order of the Commissioner clearly shows that he had enough materials and on that basis, he exercised the powers of, revision under section 263 , set aside the order and ordered to make fresh assessment. The decision of this Court in the case of (1996) 220 ITR 657/88 Taxman 526, makes it clear that the Income Tax Officer is expected to make an enquiry before taking the particular item of income or before granting deduction of particular item of expenditure and if he does not make such an enquiry as expected, that would be a ground for the Commissioner to interfere under section 263 . In our opinion, the decision of this Court in the above case is applicable to the facts of the present case, as the order of the Commissioner indicates that the Income Tax Officer had not called for the details atleast with reference to some of the items, and granted deduction without verification of the claim. The Commissioner has pointed out in the orders of revision that there were certain glaring mistakes in the orders of assessment made by the assessing officer and the Commissioner after examining the records held that the Income Tax Officer had not considered the points raised in the show-cause notice and we are of the opinion that the Commissioner had properly exercised the jurisdiction under section 263 . ", "9. In the case of (1986) 157 ITR 112, this Court held that the Commissioner had jurisdiction under section 263 where the Income Tax Officer had granted certain relief without verifying the facts and the order passed by the officer was held to be prejudicial to the interests of the revenue. This Court also held that the Commissioner has the power to set aside a portion of the order of the assessing authority which is against the revenue or he may remit the matter to the Income Tax Officer for further enquiry after setting aside the relief given by the assessing officer. Therefore, the Commissioner, in our opinion, had set aside the orders of the Income Tax Officer insofar as they relate to the matters which were the subject-matters of revision. The learned counsel for the assessee strongly placed reliance on the decision of this Court in the case of (supra), wherein this Court held that the prejudice contemplated under section 263 must be prejudicial to the income-tax administration as a whole and section 263 cannot be invoked as a jurisdictional corrective or as a review of a subordinate's order in exercise of the supervisory power. We are of the opinion that the above decision has no application as the words 'prejudicial to the interests of the revenue' as held by in case (supra) have wide impact and where it was found that the assessing officer failed to apply his mind in proper perspective and where the officer had completed the assessment without conducting or making the enquiry that is necessary for the purpose of deciding the issue before him, the order passed in such circumstances can be said to be erroneous and prejudicial to the interests of the revenue in the sense that the order is not in accordance with law, and once such a conclusion is reached by the Commissioner, the Commissioner would have necessary power to invoke his jurisdiction under section 263 . We have already held that the mere fact that a higher authority like Inspecting Assistant Commissioner was associated in the draft assessment proceedings would not render the orders of the assessment immune from the revisional proceedings. The Commissioner is expected to examine the orders of assessment to find out whether there is any error resulting in prejudice to the interest of the revenue and in that process the question as to who participated, in the assessment proceedings or made the order of assessment is an immaterial consideration. ", "9. In the case of (1986) 157 ITR 112, this Court held that the Commissioner had jurisdiction under section 263 where the Income Tax Officer had granted certain relief without verifying the facts and the order passed by the officer was held to be prejudicial to the interests of the revenue. This Court also held that the Commissioner has the power to set aside a portion of the order of the assessing authority which is against the revenue or he may remit the matter to the Income Tax Officer for further enquiry after setting aside the relief given by the assessing officer. Therefore, the Commissioner, in our opinion, had set aside the orders of the Income Tax Officer insofar as they relate to the matters which were the subject-matters of revision. The learned counsel for the assessee strongly placed reliance on the decision of this Court in the case of (supra), wherein this Court held that the prejudice contemplated under section 263 must be prejudicial to the income-tax administration as a whole and section 263 cannot be invoked as a jurisdictional corrective or as a review of a subordinate's order in exercise of the supervisory power. We are of the opinion that the above decision has no application as the words 'prejudicial to the interests of the revenue' as held by in case (supra) have wide impact and where it was found that the assessing officer failed to apply his mind in proper perspective and where the officer had completed the assessment without conducting or making the enquiry that is necessary for the purpose of deciding the issue before him, the order passed in such circumstances can be said to be erroneous and prejudicial to the interests of the revenue in the sense that the order is not in accordance with law, and once such a conclusion is reached by the Commissioner, the Commissioner would have necessary power to invoke his jurisdiction under section 263 . We have already held that the mere fact that a higher authority like Inspecting Assistant Commissioner was associated in the draft assessment proceedings would not render the orders of the assessment immune from the revisional proceedings. The Commissioner is expected to examine the orders of assessment to find out whether there is any error resulting in prejudice to the interest of the revenue and in that process the question as to who participated, in the assessment proceedings or made the order of assessment is an immaterial consideration. ", "10. The learned counsel also placed reliance on the decision of in the case of (supra). The decision of has no application to the facts of the case. In the decision before , it was found that the Commissioner noticed that the order of the Income Tax Officer did not contain discussion with regard to the allowability of the claim for deduction. The Commissioner, therefore, came to the conclusion that the claim of the assessee required examination as to whether the expenditure in question was allowable as a revenue expenditure or not allowable as a capital expenditure. In the factual situation, the Court held it is not open to the Commissioner to re-examine the matter and he has no power to set aside the orders of assessment and direct the Income Tax Officer to re-examine the issue. On the other hand, on the facts of the case, it was found by the Commissioner that the Income Tax Officer had not conducted the enquiry which was expected of him and also found that some of the items allowed by the Income Tax Officer were not allowable and warranted by the provisions of the Act. The Commissioner here has recorded a finding that the orders of the Income Tax Officer were erroneous and prejudicial to the interests of the revenue. Therefore, the decision of cited supra has no application to the facts of the case. ", "10. The learned counsel also placed reliance on the decision of in the case of (supra). The decision of has no application to the facts of the case. In the decision before , it was found that the Commissioner noticed that the order of the Income Tax Officer did not contain discussion with regard to the allowability of the claim for deduction. The Commissioner, therefore, came to the conclusion that the claim of the assessee required examination as to whether the expenditure in question was allowable as a revenue expenditure or not allowable as a capital expenditure. In the factual situation, the Court held it is not open to the Commissioner to re-examine the matter and he has no power to set aside the orders of assessment and direct the Income Tax Officer to re-examine the issue. On the other hand, on the facts of the case, it was found by the Commissioner that the Income Tax Officer had not conducted the enquiry which was expected of him and also found that some of the items allowed by the Income Tax Officer were not allowable and warranted by the provisions of the Act. The Commissioner here has recorded a finding that the orders of the Income Tax Officer were erroneous and prejudicial to the interests of the revenue. Therefore, the decision of cited supra has no application to the facts of the case. ", "11. There is no quarrel over the proposition of law laid down by in the case of (supra), wherein held that the twin conditions prescribed in section 263 , viz., the order must be erroneous and prejudicial to the interests of the revenue should be satisfied. ", "11. There is no quarrel over the proposition of law laid down by in the case of (supra), wherein held that the twin conditions prescribed in section 263 , viz., the order must be erroneous and prejudicial to the interests of the revenue should be satisfied. ", "12. The learned counsel also relied upon the decision of in the case of 's (supra) and the decision of in ' case (supra) and submitted that the Commissioner, in the instant case, had exercised the powers of revision on the basis of report of audit party and, therefore, the Commissioner had no jurisdiction to invoke his jurisdiction under section 263 . The decision of in 's case (supra) has no application as the Commissioner there had surrendered his jurisdiction and authority to in deciding the questions which were sought to be raised by the company in the revision application. On the other hand, the Commissioner occupies a unique position in the administrative set-up of the department. He is the head of the department in the administrative side and he is also given the power of quasi-judicial nature under section 263 to exercise the powers of revision. There is no dispute that there is no right of appeal to the department against the orders of the assessing authority, to the first appellate authority, and jurisdiction to reopen or to rectify the mistake is subject to the fulfilment of statutory conditions to reopen the assessment or to rectify the mistake in the order. The internal audit party on going through the records of the assessment of the assessee had pointed out certain mistakes in the orders passed by the Income Tax Officer. The report of the audit does not in any way bind the Commissioner but nonetheless, the Commissioner is empowered under section 263 to make such enquiry and to find out that the order of the Income Tax Officer is erroneous and prejudicial to the interests of the revenue. If after such investigation, the Commissioner comes to the conclusion that the order is erroneous and prejudicial to the interests of the revenue, he can pass any orders as he thinks fit, but where the materials are already available on record, there is nothing which precludes the Commissioner from taking into consideration already available materials, on record. in the case of (supra) has laid down the above proposition that it is open to the Commissioner to take into account the materials which come into existence subsequent to the completion of the orders of the assessment made by the Income Tax Officer. The report of the internal audit party does not have any binding effect on the Commissioner and the order passed by the Commissioner shows that he has applied his mind independently to the errors pointed out by the internal audit party and then came to the conclusion that the orders passed by the Income Tax Officer were erroneous and prejudicial to the interests of the revenue. Therefore, it is not a case of the action initiated by the Commissioner on the binding circular issued by the higher authorities, nor it is a case of surrender of jurisdiction in favour of any other authority, but it is a case where the ' Commissioner had exercised the powers of revision after applying his mind in considering the question whether the orders were erroneous and prejudicial to the interest of the revenue, in the revisional proceedings. Consequently, we hold that the Commissioner had exercised the powers and assumed the jurisdiction properly and the was not correct in holding that the Commissioner lacked the jurisdiction under section 263 . ", "12. The learned counsel also relied upon the decision of in the case of 's (supra) and the decision of in ' case (supra) and submitted that the Commissioner, in the instant case, had exercised the powers of revision on the basis of report of audit party and, therefore, the Commissioner had no jurisdiction to invoke his jurisdiction under section 263 . The decision of in 's case (supra) has no application as the Commissioner there had surrendered his jurisdiction and authority to in deciding the questions which were sought to be raised by the company in the revision application. On the other hand, the Commissioner occupies a unique position in the administrative set-up of the department. He is the head of the department in the administrative side and he is also given the power of quasi-judicial nature under section 263 to exercise the powers of revision. There is no dispute that there is no right of appeal to the department against the orders of the assessing authority, to the first appellate authority, and jurisdiction to reopen or to rectify the mistake is subject to the fulfilment of statutory conditions to reopen the assessment or to rectify the mistake in the order. The internal audit party on going through the records of the assessment of the assessee had pointed out certain mistakes in the orders passed by the Income Tax Officer. The report of the audit does not in any way bind the Commissioner but nonetheless, the Commissioner is empowered under section 263 to make such enquiry and to find out that the order of the Income Tax Officer is erroneous and prejudicial to the interests of the revenue. If after such investigation, the Commissioner comes to the conclusion that the order is erroneous and prejudicial to the interests of the revenue, he can pass any orders as he thinks fit, but where the materials are already available on record, there is nothing which precludes the Commissioner from taking into consideration already available materials, on record. in the case of (supra) has laid down the above proposition that it is open to the Commissioner to take into account the materials which come into existence subsequent to the completion of the orders of the assessment made by the Income Tax Officer. The report of the internal audit party does not have any binding effect on the Commissioner and the order passed by the Commissioner shows that he has applied his mind independently to the errors pointed out by the internal audit party and then came to the conclusion that the orders passed by the Income Tax Officer were erroneous and prejudicial to the interests of the revenue. Therefore, it is not a case of the action initiated by the Commissioner on the binding circular issued by the higher authorities, nor it is a case of surrender of jurisdiction in favour of any other authority, but it is a case where the ' Commissioner had exercised the powers of revision after applying his mind in considering the question whether the orders were erroneous and prejudicial to the interest of the revenue, in the revisional proceedings. Consequently, we hold that the Commissioner had exercised the powers and assumed the jurisdiction properly and the was not correct in holding that the Commissioner lacked the jurisdiction under section 263 . ", "13. In the result, we answer the questions 1 and 3 also in the negative, and in favour of the revenue. The revenue will be entitled to costs of Rs. 1,000 one set. ", "13. In the result, we answer the questions 1 and 3 also in the negative, and in favour of the revenue. The revenue will be entitled to costs of Rs. 1,000 one set."], "relevant_candidates": ["0000488714", "0000490098", "0000803844", "0000856827", "0000943770", "0001027050", "0001261186", "0001282496", "0001377272", "0001560985"]} {"id": "0000180317", "text": ["PETITIONER: DUTTA Vs. RESPONDENT: AND OTHERS DATE OF JUDGMENT: 18/09/1958 BENCH: , T.L. VENKATARAMA BENCH: , T.L. VENKATARAMA GAJENDRAGADKAR, P.B. SARKAR, A.K. CITATION: 1959 AIR 24 1959 SCR 1309 CITATOR INFO : R 1973 SC2609 (21) ACT: Grant-Construction- Patni settlement-Chaukidari Chakaran lands-Resumption and transfer to Zamindar-Grant of the lands by the Zamindar on Patni to Person who held the village in Patni settlement-Distinct Patni-Sale of lands for arrears of revenue-Validity-Bengal Patni Taluks Regulation, 1819 (Ben. Regulation VIII of 1819), ss. 8, 14-Village Chaukidari Act, 1870 (Ben. VI of 1870), ss. 48, 50, 51. HEADNOTE: The lands in question are situate in lot Ahiyapur which is one of the villages forming part of the permanently settled estate of Burdwan and had been set apart as Chaukidari Chakaran lands to be held by the Chaukidars for rendering service in the village as watchmen. At the time of the permanent settlement the income from these lands was not taken into account in fixing the jama payable on the estate. Some time before the enactment of the Bengal Patni Taluks Regulation, 1819, the entire village of Ahiyapur was granted by the then 1310 Zamindar of Burdwan, to the predecessors-in-title of the defendants on Patni settlement. In 1870 the Village Chaukidari Act came into force and acting under the provisions of that Act the Government put an end to the services of the Chaukidars resumed the lands and imposed an assessment thereon, and, subject to it, transferred the lands to the Zamindar. On June 3, 899, the Zamindar granted the suit lands on Patni to the predecessors-in-title of the defendants who were the then holders of the village in Patni. In proceedings taken by the Zamindar under the provisions of the Bengal Patni Taluks Regulation, 1819, the suit lands were brought to sale for arrears of rent and purchased by him. On February I3, 1941, the Zamindar sold the lands to the appellant who sued to recover possession thereof from the defendants. The defendants resisted the suit on the ground, inter alia, that the effect of the grant of the Chaukidari Chakaran lands on June 3, 1899, was to make them part and parcel of the Patni settlement of the village of Ahiyapur and that, in consequence, the sale of those lands, apart from the village of Ahiyapur, was bad as being a sale of a portion of the Patni. Held, that when the Zamindar made a grant of the Chaukidari Chakaran lands which formed part of a village which had previously been settled in Patni, it was open to the parties to agree that those lands should form a new and distinct Patni and the result of such an agreement would be that while the grantee would hold those lands in Patni right, that is to say, that the tenure would be permanent, heritable and alienable, so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there was a default in the payment thereof were concerned, the new grant would be a distinct Patni, independent of the original Patni. Held, further, that construing the grant dated June 3, 899, as a whole, the intention of the parties as expressed therein was that the Chaukidari Chakaran lands were to be treated as a distinct Patni and that, therefore, the sale of the lands for arrears of rent was valid. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 108 of 1954. Appeal from the judgment and decree dated March 21, 1952, of in Appeal from Appellate Decree No. 971 of 1950, arising out of the judgment and decree dated August 29, 1950, of in Title Appeal No. 247/16 of 1948 against judgment and decree dated September 25, 1948, of , in Title Suit No. 7 of 1946/27 of 1947. ", " ", " and , for the appellant. and , for the respondents. 1958. September 18. The Judgment of the Court was delivered by is an appeal by the plaintiff against the judgment of in a second appeal which, in reversal of the judgments of the Courts below dismissed his suit, which was one in ejectment. The suit property is a Mahal of the extent of 84 Bighas 18 Cottas situated within lot village, which is one of the villages forming part of the permanently settled estate of . This village was granted by the Maharaja of in Patni settlement to the predecessors- in-title of defendants I to 7. The exact date of this grant does not appear, but it is stated that it was sometime prior to the enactment of the Bengal Patni Taluks Regulation, 1819 (Bengal Regulation VIII of 1819), hereinafter referred to as the Regulation, and nothing turns on it. The Mahal with which this litigation is concerned, had been at or prior to the permanent settlement set apart as Chaukidari Chakaran lands; that is to say, they were to be held by the Chaukidars for rendering service in the village as watchmen. In 1870, the Village Chaukidari Act, 1870 (Ben. VI of 1870), hereinafter referred to as the Act, was passed, and s. 48 of that Act provides that all Chaukidari Chakaran lands assigned for the benefit of any village shall be transferred to the zamindar of the estate in the manner and subject to the provisions contained in the Act. Under s. 50, the Collector is authorized to make an order transferring those lands to the Zamindar after determining the assessment payable thereon, and s. 51 enacts that: \" Such order shall operate to transfer to such zamindar the land therein mentioned subject to the amount of assessment therein mentioned, and subject to all contracts theretofore made, in respect of, under, or by virtue of, which any person other than the zamindar may have any right to any land, portion of his estate, or tenure, in the place in which such land may be situate. \" In accordance with the provisions aforesaid, the suit properties were transferred to the Maharaja of , and on June 3,1899, he granted the same to the predecessors-in- title of defendants I to 7, who at that time held the Patni interest in respect of lot . Under the grant which has been marked as exhibit B, the yearly rental for the area was fixed at Rs. 126-8 as., out of which Rs. 84-4 as., had to be paid to the Panchayat within the 7th of Baisakh for being credited to and the balance of Rs. 42-4 as., was to be paid to the Zamindar within the month of Chaitra. Exhibit B also provides that in default of payment of kist the lands are liable to be sold in proceedings taken under the Bengal Regulation VIII of 1819. Acting under this clause, the Maharaja applied under s. 8 of the Regulation to bring the suit lands to sale for realisation of arrears, and at the auction held on May 15, 1937, himself became the purchaser. On February 13, 1941, he granted the lands again on Patni to the appellant, who filed the suit, out of which the present appeal arises, in , , to recover possession thereof from the defendants alleging that they had trespassed thereon. The respondents contested the suit on the ground that, in fact, there were no arrears of rent due under Exhibit B, and that the sale was therefore void. ", "The Subordinate Judge held that there were arrears of rent due from the respondents, and that further as they had not sued to set aside the sale under s. 14 of the Regulation within the time limited by law, they could not set up its invalidity as a defence to the action in ejectment. The defendants preferred an appeal against this judgment to , and there raised a new contention that under the grant, Exhibit B, the suit lands became part of lot , and that a sale of those lands was illegal as being a sale of a portion of the . The District Judge after observing that the point was taken for the first time, held on a construction of Exhibit B that it created a new , and that it could therefore be brought to sale, and he also held that s. 14 of the Regulation operated as a bar to the validity of the sale being questioned on the ground that the rent claimed was not, in fact, due. He accordingly dismissed the appeal. The respondents took the matter in second appeal to , and that was heard by a Bench consisting of and who differed from the District Judge both on the construction of Exhibit B and on the bar of limitation based on s. 14 of the Regulation. They held that the effect of Exhibit B was merely to make the suit lands part and parcel of the lot , and that, therefore, the sale of those lands only was bad, as being a sale of a part of the . They further held that as such a sale was void, s. 14 of the Regulation had no application. They accordingly allowed the appeal, and dismissed the suit. It is against this judgment that the present appeal has been brought on a certificate granted by under Art. 133(1)(a). ", "Mr. for the appellant urged the following contentions in support of the appeal: (1) The defendants did not raise either in the written statement or during the trial, the plea that under the sanad, Exhibit B, the Chaukidari Chakaran lands comprised therein became part of the Patni settlement of lot Ahiyapur, and, in consequence, their sale was bad as being of a part of the Patni, and the learned Judges should not have allowed that point to be raised in appeal. (2) Exhibit B properly construed must be held to create a new Patni distinct from lot Ahiyapur, and its sale is therefore valid. (3) Assuming that the sale is invalid as being of a part of a tenure, the only right of the defendants was to sue to have it set aside, as provided in s. 14 of the Regulation, and that not having been done, it is not open to them to attack it collaterally in these proceedings. ", "We see no substance in the first contention. It is true that the defendants did not put forward in the plea that the effect of Exhibit B was to incorporate the suit lands in lot Ahiyapur , and that, in consequence, the sale was illegal as being of a part of the . On the other hand, the written statement proceeds on the view that Exhibit B created a new unconnected with lot Ahiyapur, and the only defence raised on that basis was that no arrears of rent were due under Exhibit B, and that the sale was therefore invalid. But the true nature of the grant under Exhibit B is a matter to be decided on a construction of the terms of the document, and that is a question of law. It is argued for the appellant that it would be proper in determining the true character of the grant under Exhibit B to take into account surrounding circumstances, that to ascertain what those circumstances are, it will be necessary to take evidence, and that, in consequence, a question of that kind could not be permitted to be agitated for the first time in appeal. But it is well-settled that no evidence is admissible on a question of construction of a contract or grant, which must be based solely on the terms of the document, there being no suggestion before us that there is any dispute as to how the contents of the document are related to existing facts. Vide Balkishen Das v. (1) and (2). It should, moreover, be mentioned that when the defendants sought to raise this contention in their appeal in , no objection was taken by the plaintiff thereto. Under the circumstances, the learned Judges were right in allowing this point to be taken. This contention must therefore be rejected. ", "The next point for determination is as to the true character of the grant under Exhibit B, whether it amounts to a new Patni with reference to the Chaukidari Chakaran lands as contended for by the appellant, or whether it incorporates those lands in the Patni of lot , so as to make them part and parcel of the lands comprised therein, as is maintained by the respondents. To appreciate the (1) (1899) L.R. 27 I.A. 58, 65. ", "(2) (1917) L.R- 44 I.A. 236, 243. ", "1315 ", "true position, it is necessary to examine what the rights of the Zamindar and of the Patnidar were with respect to Chaukidari Chakardan lands at the time of the grant, Exhibit B. These lands had been originally set apart as remuneration for the performance of services by the village chaukidars as watchmen, and for that reason when the village was granted to the Zamindar in permanent settlement, the income therefrom was not taken into account in fixing the jama payable by him, though they passed to him under the permanent settlement. Then came the Village Chaukidari Act, and under that Act the put an end to the services of the Chaukidars as village watchmen, resumed the lands and imposed assessment thereon, and, subject to it, transferred them to the Zamindar; and where the Zamindar had already parted with the village in which the lands were situate, by granting Patni, it became necessary to define the rights of the Zamindar and the Patnidar with reference to those lands. Dealing with this matter, s. 51 of the Act provides that the title of the Zamindar on resumption and transfer by the shall be subject to \" all contracts theretofore made \". Under this section, the Patnidar would be entitled to the Chaukidari Chakaran lands in the same right and on the same terms on which lie held the village in which they are situate. The nature of this right has been the subject of consideration in numerous authorities, and the law on the subject is well-settled. (1), it was held by that though the reservation under s. 51 is of rights under contracts made by the Zamindar and the word \" contract \" primarily means a transaction which creates personal obligations, it might also refer to transactions which create real rights, and that it was in that sense the word was used in s. 51 , and that accordingly the Patnidar was entitled to institute a suit against the Zamindar for possession of those lands and was not obliged to suit for specific performance. But this does not mean that the Patnidar is (1) (1918) L.R. 45 I.A. 162. ", "167 ", " ", "entitled to hold the lands free of all obligations. He is under a liability to pay to the Zamindar the assessment due thereon, when it is fixed under s. 50 , and also a share of profits. (1), where it was held by that when Chaukidari Chakaran lands included in a Patni settlement had been resumed and transferred to the Zamindar under s. 51 of the Act, he is entitled to the payment of a fair and equitable rent in respect thereof, and that the fixing of the rent is a condition to the being put in possession. Vide also v. (2) and (3). ", "These being the rights and obligations of the Zamindar and the Patnidar under s. 51 of the Act, a grant of the Chaukidari Chakaran lands by the former to the latter serves, in fact, two purposes. It recognises that the grantee is entitled to hold those lands by virtue of his title as Patnidar of the village of which they form part, and it fixes the amount payable by him on account of assessment and share of profits. The question then arises as to what the exact relationship is in which the new grant stands to the original Patni grant. Now, when s. 51 of the Act recognises and saves rights which had been acquired under contract with the Zamindar, its reasonable implication is that the rights so recognised are the same as under the contract, and that, in consequence, the settlement of the Chaukidari Chakaran lands in Patni must be taken to be a continuance of the Patni of the village in which they are included. But it is open to the parties to agree that the Chaukidari Chakaran lands should form a new and distinct Patni, and the result of such an agreement will be that while the grantee will hold those lands in Patni right, that is to say, the tenure will be permanent, heritable and alienable so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there is any default in the (1) (1925) L.R. 52 I.A. 355. (2) (1906) 14 C.W.N. 995. (3) (1910) I.L.R. 37 Cal. 598. ", "1317 ", "payment thereof are concerned, the now grant will be an entity by itself independent of the original . That that could be done by agreement of parties is well-settled, and is not disputed before us. If that is the true position, then the real question to be considered is, what is the agreement of parties with reference to the Chaukidari Chakaran lands, whether they are to be constituted as an independent or whether they should be treated as a continuation of the original or an accretion thereto, and the answer to it must depend on the interpretation to be put on the grant. ", "It is now necessary to refer to the material terms of Exhibit B under which the Chaukidari Chakaran lands were granted to the predecessors of respondents I to 7. It begins by stating that the Patnidars of lot Ahiyapur appeared before the Zamindar and ,prayed for taking Patni settlement of the said 84 Bighas 18 Cottas of land at a yearly rental of Rs. 126/8 as.\", and then provides how the amount is to be paid. Then there is the following clause, which is important: ", "\"You will pay the rent etc., after according to the bandi in accordance with law, and if you do not pay the same, I will realise the arrears together with interest and costs by causing the aforesaid lands to be sold by auction by instituting proceedings under Regulation VIII of 1819 and other laws which are in force or will come into force......\" ", "Then follow provisions relating to the transfer by the Patnidars of \" the aforesaid lands \", succession by inheritance or by will to \" the aforesaid lands \" and the registration of the name of the transferee or successor in the Sherista, and it is expressly stated that \"so long as the name of the new Patnidar is not recorded in the Sherista, the former Patnidar whose name is recorded in the Sherista will remain liable for the rent, and on a sale of the Mahal by auction on institution of proceedings against him under Regulation VIII of 1819 or any other law that will be in force for realisation of arrears of rent, no objection thereto on the Part of the new Patnidar can be entertained.\" ", "1318 ", "Then ,there are two clause on which on the respondents rely, and they are in these terms: ", "\" If in future it transpires that any other persons besides yourselves have Patni rights in the Patni interest of the, said lot , such persons shall have Patni rights in these Chakaran lands also to the same extent and in the same manner as they will be found to have interests in the Patni of the aforesaid lot, and if for the said reason any person puts forward any claim against the Raj Estate and the Raj Estate has to suffer any loss therefor, you will make good the said claim and the loss without any objection. If in future the Patni interest in the said lot be transferred for liability for arrears of rent or if the same comes to an end for any reason, then your Patni interest in these Chakaran lands also will be transferred or will come to an end alongwith the original Patni ,simultaneously.\" It is on these two clauses that the learned Judges in the Court below have based their decision that the intention of the par-ties was to treat the suit lands as part of the Patni of lot . Now, it cannot be disputed that the two clauses aforesaid afford considerable support to the conclusion to which the learned Judges have come. The first clause provides that if besides the grantee under Exhibit B there were other persons entitled to Patni rights in lot , those persons also shall have Patni rights in Chaukidari Chakaran lands to the same extent as in Patni . That clearly means that the rights conferred on the grantees under Exhibit B have their roots in the Patni lot of . Likewise, the provision in the last clause that the grantees will lose their rights to the Chaukidari Chakaran lands if their interest in Patni was sold clearly suggests that the grant under Exhibit B is to be an annexe to the grant of . ", "As against this, the appellant argues that the other clauses in Exhibit B quoted above strongly support his contention, and that when the document is read as a whole, it unmistakably reveals an intention to treat the suit lands as a distinct Patni. We must now refer to these clauses. Exhibit B begins by reciting that the grantees desired to take a Patni settlement of 84 Bighas 18 Cottas, which is some indication, though not very strong, that it is to be held as a distinct entity. We have then the clause which provides that when there is default in the payment of kist, the lands are liable to be sold in proceedings instituted under the Regulation. Now, the law had long been settled that a sale of a portion of a Patni is bad, but that if by agreement of all the parties interested different portions thereof are held under different sadads, which provide for sale of those portions for default in pay- ment of kist payable respectively thereon, then each of those sanads might be held to have created a separate Patni in respect of the portion comprised therein. v. Mr. ) and and another v. Mr. (2). When, therefore, the Zamindar and the Patnidar agreed under Exhibit B that the lands comprised therein could be sold under the Regulation when there was default in payment of kist fixed therefor, they must clearly have intended that those lands should be constituted into a distinct Patni. Otherwise, the clause will be inoperative and void, and indeed, the learned Judges in the Court below have, on that ground, declined to give any effect to it. Now, it is a settled rule of interpretation that if there be admissible two constructions of a document, one of which will give effect to all the clauses therein while the other will render one or more of them nugatory, it is the former that should be adopted on the principle expressed in the maxim \" ut res magis valeat quam per-eat \". What has to be considered therefore is whether it is possible to give effect to the clause in question, which can only be by construing Exhibit B as creating a separate Patni, and at the same time reconcile the last two clauses with that construction. Taking first the provision that if there be other persons entitled to the Patni of lot Ahiyapur they are to have the same rights in the land comprised in Exhibit B, (2) (1873) 20 Weekly Reporter 275. ", "1320 ", "that no doubt posits the continuance in those persons of the title under the original . But the true purpose of this clause is, in our opinion, not so much to declare the rights of those other persons which rest on statutory recognition, but to provide that the grantees tinder the document should take subject to those rights. That that is the purpose of the clause is clear from the provision for indemnity which is contained therein. Moreover, if on an interpretation of the other clauses in the grant, the correct conclusion to come to is that it creates a new in favour of the grantees thereunder, it is difficult to see how the reservation of the rights of the other dars of lot Ahiyapur, should such there be, affects that conclusion. We are unable to see anything in the clause under discussion, which militates against the conclusion that Exhibit B creates a new . ", "Then there is the clause as to the cesser of interest of the grantees in the Chaukidari Chakaran lands when their title to lot comes to an end, and according to the respondents, this shows that under Exhibit B the Chaukidari Chakaran lands are treated as part and parcel of the Patni. If that were so, a sale of lot must carry with it the Chaukidari Chakaran lands, they being ex hypothesi, part and parcel thereof, and there was no need for a provision such is is made in the last clause. But that clause would serve a real purpose if the Patni under Exhibit B is construed as separate from that of lot . In that view, when the major Patni of lot is sold, the intention obviously is that the minor Patni under Exhibit B, should not stand out but be extinguished,-a result which could be achieved only by a special provision. We should finally refer to the clauses in Exhibit B providing for transfer of or succession to the Chaukidari Chakaran lands and for the recognition of such transferee or successor as a Patnidar of those lands. It is clear from these provision,s that such a transferee or successor is to hold the lands as a Patnidar, different from the Patnidar of lot . Reading these clauses along with the last clause, it seems clear that the intention of the parties was that while a transfer of the Patni by sale should extinguish the title of the holders of the Chaukidari Chakaran lands a transfer of these lands would have no effect on the title to the lot Patni. Construing Exhibit B, as a whole, we are of opinion that the intention of the parties as expressed therein was that the Chaukidari Chakaran lands should be held as a distinct Patni. We must now refer to the decision on which the learned Judges in the below have relied in support of their conclusion. (1), the facts were that the Maharaja of Burdwan had created a Patni of lot in 1820. The Chaukidari Chakaran lands situated within that village were resumed under the Act and transferred to the Zamindar who granted them in 1899 to one in Patni on terms similar to those in Exhibit B. In 1914 the Patni lot was sold under the Regulation, and purchased by Sint. . She then sued as such purchaser to recover possession of the Chaukidari Chakaran lands. The defendants who represented the grantees under the Patni settlement of 1899 resisted the suit on the ground that the sale of Patni did not operate to vest in the purchaser the title in the Chaukidari Chakaran lands, as they formed a distinct Patni. Dealing with this contention, who delivered the judgment of the , observed : ", "concerned to alter the terms of the original patni if they chose to do so; and what we have to see is whether that was done. In order to do that, we have to examine the terms of the pattah by which the Chaukidari Chakaran lands were granted to .\" ", "The learned Judge then refers to the two clauses cor- responding to the last two clauses in Exhibit B, and comes to the conclusion that their effect was merely to, restore the position as it was when the original was created, and that, in consequence, the purchaser was entitled to the as it was created in 1820, (1) A.I.R. 1925 Cal. 807, and that the plaintiff was entitled to the possession of the Chaukidari Chakaran lands as being part of the . Now, it is to be observed that in deciding that the Chaukidari Chakaran lands granted in 1899 became merged is lot , as it was in 1820, the learned Judge did not consider the effect of the clause providing for sale of those lands as a distinct entity under the provisions of the Regulation when there was default in the payment of ret payable thereon under the deed, and that, in our opinion, deprives the deci- sion of much of its value. In the result, we are unable to hold that the two clauses on which the learned Judges base their conclusion are really inconsistent with the earlier clauses which support the view that the grant under Exhibit B is of a distinct . Nor do we agree with them that the earlier clause providing for the sale of the Chaukidari Chakaran lands in default of the payment of jama, should be construed so as not to override the later clauses. If, in fact, there is a conflict between the earlier clause and the later clauses and it is not possible to give effect to all of them, then the rule of construction is well-established that it is the earlier clause that must override the later clauses and not vice versa. In v. (1), Lord stated the rule in the following terms : \" If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails. In this case the two clauses cannot be reconciled and the earlier provision in the deed prevails over the later.\" ", "We accordingly hold that Exhibit B created a new Patni and that the sale of the lands comprised therein is not bad as of a portion of a, Patni. ", "We are conscious that we are differing from the learned Judges of the below on a question relating to a local tenure on which their opinion is, by reason of the special knowledge and experience which they have of it, entitled to the greatest weight. It is also true that the decision in v. ", "(1) [1922] 1 A.C. 256,259. ", " ", " (1) has stood now for over three decades, though it is pertinent to add that its correctness does not appear to have come up for consideration in any subsequent decision of , prior to this litigation. But then, the question is one of construction of a deed, and our decision that the effect of an agreement of the kind in Exhibit B was to constitute the Chaukidari Chakaran lands into a distinct Patni will not result in any injustice to the parties. On the other hand, the rule that a portion of a Patni should not be sold being one intended for the benefit of the Patnidars, there is no reason why an agreement entered into by them with the Zamindars providing for the sale of a portion, thereof-which is really to their advantage, should not be given effect to. Having anxiously considered the matter, we have come to the conclusion that Exhibit B creates a distinct Patni, that the sale thereof on May 15, 1937, is valid, and that the plaintiff has therefore acquired a good title to the suit lands under the grant dated February 13, 1941. In this view, it is unnecessary to express any opinion on the point that was the subject of considerable argument before us as to whether it is open to the defendants to raise the invalidity of the sale held on May 15, 1937, in answer to this action, they not having taken steps to have set it aside, as provided in s. 14 of the Regulation. ", "In the result, the appeal is allowed, the judgment of the lower Court reversed and that of the District Judge restored, with costs throughout. ", "Appeal allowed. ", "(1) A.I.R. 1925 Cal. 807. ", "168 ", ""], "relevant_candidates": ["0000414242", "0000682293", "0001300403", "0001754138", "0001771458"]} {"id": "0000184190", "text": ["JUDGMENT ", "1. The petitioners who have obtained the present Rule are the editor, the printer and the publisher of the Bengali newspaper called . On the 23rd April 1926 an item headed \"Telegram to the Nakhoda Mosque\" was published in a conspicuous position at the top of a column. The petitioners were thereupon charged before the Chief Presidency Magistrate with having committed an offence under Section 153A of the I.P.C. The defence taken was that they published the telegram to draw the attention of the authorities to a piece of information received from a reliable source so that they might trace the persons responsible for the disturbances and find some means of securing peace between the two communities. ", "2. The learned Chief Presidency Magistrates took the view that the publication of this telegram did not fall within the explanation of Section 153A . But having regard to the circumstances of the case he came to the conclusion that it would be sufficient to deal with the petitioners under Section 562 of the Criminal P.C., and dismissed them with a warning not to publish rumours of this nature in future particularly at a time of tension. The telegram in question is in these terms: ", "It is rumoured that a certain Moslem has sent a telegram to from Port Louis Mauritius to the following effect : 'Let the quarrel between Hindus and Moslems be carried on; whatever money will be spent, I will pay up on going. I am soon going to Calcutta. Will cf the mosque disclose whether or not this telegram has come? ", "3. Now the defence taken by the petitioners was that this item of news was base upon a telegram which had been actually received in Calcutta from Mauritius and the telegraph officer has produced the original in Court. It is addressed to , Nakhoda Masjid, Jakaria Street, Calcutta in these terms: ", "Wait, starting Naringa, take money for food Mirzapuri. ", "and is signed by Mr. who has appeared for the petitioners construes this message as meaning that the writer was shortly starting for Calcutta by the steamer \"Naringa\" and was bringing money with him to feed Mirzapuris by which he means goondas if that is the correct interpretation of the message the question is whether the editor of a paper is justified in translating it into the words which find expression in the paper. Beading the wording in the newspaper as a whole we think that this is a possible interpretation of the telegram. ", "4. The next question is whether in publishing a message of this kind the petitioners brought themselves within the scope of Section 153A . The learned Magistrate has expressed his view in this way: ", "If the accused honestly thought there was anything in it requiring investigation he could have given particulars of his information to the police. I cannot sea any honesty in this pretence of informing the authorities by quoting rumours. It is the obvious duty of a paper not to give currency to rumours at such times. ", "5. The editor of a newspaper has certain public duties, one of which is to publish matters-which it is to the public interest should be known and if he does so honestly he is evidently not liable to be dealt with by a criminal Court. Section 153A says that a person is liable under this section if he promotes or attempts to promote feelings of enmity or hatred between different classes of His Majesty's subjects. The explanation says that it does not amount to an offence within the meaning of this section to point out without malicious intention and with an honest view to their removal matters which are producing or have a tendency to produce feelings of enmity or hatred between different classes of His Majesty's subjects. It is well settled as Mr. , the learned Counsel, who has appeared for the has stated that the essence of an offence under this section and also under Section 108 of the Criminal P.C. is malicious intention. ", "6. In the recent case of A.I.R. 1926 Cal. 1133, , makes the following observations : \"In substance my opinion of this case\" (he is referring to the prosecution of the paper \"Forward\"): ", "is that the newspaper here has given its readers in the ordinary way a perfectly legitimate and sensible piece of news without any intention to utilize that piece of news for the purpose of promoting or furthering class hatred and that even if the news is of such a character that it is possible to suppose that some people reading it may momentarily or foolishly be induced to entertain unreasonable feeling towards a class of other people, this is not enough to bring it within the mischief either of Section 153A of the I.P.C. or Section 108 of the Criminal P.C. ", "7. Applying that test to the present case we are of opinion that there is no indication of any such intention as to bring the case within the purview of Section 153A . Learned Counsel for the Crown has contended that that is not enough but that the petitioners must also show that the publication was with an honest view to remove certain matters which have a tendency to produce feelings of enmity between the various classes. If there is no malicious intention in the publication we think honesty of purpose may safely be inferred. Upon the facts found in the present case we are not satisfied that the action taken by the Magistrate in dealing with the petitioners was necessary. The order made under Section 562 should be vacated. ", "8. The rule is accordingly made absolute."], "relevant_candidates": ["0000584125"]} {"id": "0000190651", "text": ["JUDGMENT , J. ", "1. This is an application filed by nine petitioners, under Article 227 of the Constitution of India. These petitioners were members of the first party in a proceeding Under Section 145 of the Code of Criminal Procedure which was pending before a Magistrate, 1st Class, at Jahanabad, in case No. 175 M/81 of 1958. About 40 bighss of land of village Kalu within the jurisdiction of Arwal police-station was in dispute between the petitioners and the members of the opposite party. The learned Magistrate by an order dated the 9th of February, 1959, attached the disputed lands Under Section 146(1) of the Code of Criminal Procedure and directed the parties to appear before at Jahanabad on the 24th of February, 1959, for the decision of the question as to which of the parties was in possession over the disputed land. The matter thereafter went before the Munsif of Jahanabad in Miscellaneous Case No. 32 of 1959. ", "The proceeding before the learned of Jahanabad was covered by Sub-sections (1A) and 1(B) of Section 146 of the Code of Criminal Procedure. Ultimately, by a judgment and order dated the 18th of September, 1959,' the learned held that the. members of were in possession of the disputed property from the year 1953 and that the members of the first party were not in possession. The record of the case was returned to the Sub-divisional Magistrate, for passing necessary orders under Sub-section (IB) of Section 146 of the Code. The present petitioners have come up to this complaining of the order passed by. the learned on the 18th of September, 1959. It may be stated here that further proceedings in the below have been stayed by this by an order dated the 28th of September, 1959, while admitting this application. ", "2. learned Counsel for the petitioners submitted, mainly, that the order of the learned dated the 18th of September, 1959, is not in accordance with law,' inasmuch as the learned has not complied with the specific requirements of Sub-section (1A) of Section 146 of the Code of Criminal, Procedure. This argument of the learned Counsel is based on the fact that the petitioners; who were the first party in the proceeding Under Section 145 of the Code, had filed -affidavits of 29 persons two were before the learned Magistrate when he had passed the order on the 9th of February, 1959, and which affidavits were on the record before the learned when he was dealing with the case. It has been mentioned in paragraph 5 of the petition filed in this Court, that the petitioners had filed affidavits of 29 persons which had been sent to the learned with the record of the case. ", "It appears from paragraph 6, that the petitioners had filed various other documents also before the learned Magistrate but that they had withdrawn those other documents, for the purpose of filing them before . It is, therefore, urged that the order of the learned , dated the 18th of September, is vitiated on the ground that the learned has not considered the several affidavits that had been filed by the first party and which were on the record of the case. It is argued that the learned has specifically mentioned that he found no documents filed on behalf of the first party and that this conclusion of the learned , so far as this case is concerned, is wrong, inasmuch as the affidavits which were already on record, should have been perused and considered as part of the evidence in the case. Substantially, upon these arguments it is submitted by the learned Counsel for the petitioners that the order of the learned should be quashed. ", "3. The history of this unnecessarily protracted litigation appears to be as follows. At the time when the proceeding Under Section 145 of the Code of Criminal Procedure was pending before the learned Magistrate, the parties had filed a large number of documents including a large number of affidavits of many persons. Under the amended Section 145 of the Code of Criminal Procedure,' the learned Magistrate had to peruse the statements of the parties, the documents and affidavits filed by them, hear the parties and conclude the enquiry by deciding the question as to which of the parties was in possession. The order of the learned Magistrate in this case, dated the Seth of February, 1959, hardly indicates that the learned Magistrate took the trouble of coming to his decision, upon considering the materials before him. The learned Magistrate has stated thus; ", "Both the parties are armed with volumes of documents which are contradictory and highly confusing and do not lead to definite finding on fact of possession. Both the parties have also filed affidavits of many persons which appear to be oaths against oaths and does not help in determining the fact of possession. So I am unable to decide as to which of the parties is in possession over the disputed lands and so I consider It necessary to refer the matter to Under Section 146 CrIPC to give a finding on the fact of possession. ", "It is apparent to me that the learned Magistrate made no serious effort to consider the affidavits mentioned by him in his order. Disposal of cases Under Section 145 of the Code of Criminal ProceduTe, where affidavits have been filed by both the parties, stating that these affidavits appear to be oaths against oaths, has not been approved by this Court in a large number of decisions. Reference may be made to a decision of this Court, in the case of . It was stated in this case that the Magistrate should consider the affidavit of each deponent and should give his reasons for accepting or not accepting it. The order in this case was set aside on the ground that the Judgment of the learned Magistrate was vitiated for the consideration of a the affidavits fifed on behalf of the parties. Again, in the case of v. , the judgment the learned Magistrate was set aside on the ground that he had not considered the affidavits filed on behalf of the parties at all. It was mentioned in this decision that the affidavits cannot be brushed aside by saying that they are oath against oath. It was held that the Magistrate should consider the affidavits in the same manner in which oak evidence is considered. ", "In another decision of this Court, in the case of , it was again held that the Magistrate had to consider the affidavits and give reasons for accepting the affidavits of one or the other of the parties. Our attention has also been drawn to a recent decision of of this Court in the case of , Criminal Revn. No. 625 of 1958 D/-17-10-1960 (Pat), in which it was stated thus: ", "Sub-section (1) of Section 146 lays down that a Magistrate can make a reference to , (1) if he is of opinion that none of the parties was in possession of the subject of dispute on the date of the proceeding, or (2) if he is unable to decide as to which of then was then in such possession. As I have already said,1 the Magistrate did not, in this case, make any attempt whatever to consider or discuss the evidence in order to find whether one or the other party was in possession or none of the parties was in possession. A Magistrate cannot take recourse to Section 146 (1) merely for the purpose of shifting his own responsibility. It is only when either of the two contingencies mentioned in the sub-section arises that he can refer the case to . ", "From the exposition of law made by this , subsequent to the orders passed in the instant case, it is clear that the order of reference made by the learned Magistrate on the 9th of February, 1959, was not a proper order \"at all. ", "4. Coming to the decision of the learned , after reference to him Under Section 146 (1) of the Code of Criminal Procedure, it appears that the learned did make an effort to come to a conclusion on the materials that were placed before him. But, unfortunately, his attention was not drawn to Sub-section (1-A) of Section I4fr of the Code, under which it was his duty, also, to peruse the evidence that had already come on the record on be half of the first party. What-happened in the Court of the learned was this. On the 12th of September, 1959, a petition for time was filed by the first party/This petition was rejected by the learned on the ground that the case was an old one. The parties were ordered to be ready with the case at once. When the case was teen up, it appears that the first party did not co-operate and the learned proceeded to hear the case ex. parte. The last two witnesses of the second party were examined and' argument on behalf of the second, party was made and 18th of September was fixed for delivering judgment in the case. The first two .witnesses had already been examined on the 5th of June, 1959. On the 14tn of September, however, the first party filed another petition praying that a date may be fixed for argument it behalf of the first party. This petition was rejected by the learned and, in due course, on the 18th of September Judgment was delivered: m his judgment and order, the learned has mentioned the case of the first party: He has also mentioned the case of the second party and. thereafter the learned has considered in detail the oral and documentary evidence, adduced on behalf of the second party. He has mentioned that there-was no oral evidence on behalf of the first party and he-found' no documentary evidence of the first party as well-On a consideration of the materials that were placed before him, the learned held that the second party were in possession of the disputed property from the year 1953. ", "5. It is contended by the learned Counsel for ' the petitioners that having stated the ease of the first party and the second party, in his order, the learned was bound to consider the affidavits which were already on the record. Reliance is placed on Section 146 (1A) of the Code of Criminal Procedure, where it is mentioned that on receipt of any reference, shall peruse the evidence on record and take such further evidence as may be produced by the parties respectively, consider .the effect of all such evidence, and after hearing the parties,' decide the question so referred to it. It is urged that under the provision of law, even if no further evidence was adduced by the first party before the learned , and even if no arguments were advanced before him, the learned had to peruse the several affidavits which had already been filed before the learned Magistrate and which, on reference, formed part of the record before the learned . ", "Our attention is drawn to the case of , wherein it has been held that, after a reference is made to , when the Magistrate finds it difficult to decide the question of possession on the materials as required by Section 145 of the Code of Criminal Procedure, there is always some, evidence of possession on the facts and circumstances of this case, the learned was bound to consider the affidavits filed by the first party, before holding that the members of the second party were in possession since 1953 and that the members of the first party were not in possession. In my opinion, the contention of the learned Counsel for the petitioners based on Sub-section (1A) of Section 146 of the Code of Criminal Procedure must be accepted, in my opinion, the decision in case, so far as it has held that in a reference to Under Section 146 of the Code of Criminal Procedure, trireme is always same evidence on record for consideration by ; is correct. ", "As a matter of fact, in this case, the order of the learned Magistrate itself makes it clear that there were evidence on record. I have already mentioned that of the voluminous documents mentioned by the learned Magistrate, at least, the affidavits of 29 persons which had been filed by the members of the first party were still on the record when the case had reached the Court of the learned . It is clear, therefore, that the learned had to consider these affidavits on record, before coming to an adverse conclusion against the members of the first party. It is rather unfortunate that the course adopted by the: learned , although inadvertently, has resulted in protracting this litigation, after the learned had rejected the first party's petition for time with a view to an expeditious disposal of the case. But the amendment of Section 146 of the Code of Criminal Procedure has put upon a statutory duty, in the discharge of which the learned failed altogether. There is no other alternative but to quash the order of the learned , for tote reasons given above. ", "6. The order of the learned of Jahanabad, dated the J8tti of September, 1959, passed in Miscellaneous Case Ho. 32 of 1959, is, therefore, quashed. The case is remanded to for reconsideration.' .In this connection, learned Counsel for the opposite party has submitted that a direction should be given that will now proceed to decide the case only on the materials that are already on the record. In my opinion, however, this Court ought not to make such an order, thereby restricting the discretion of in disposing of the reference in accordance with law. I, therefore, remand the case with a direction that the case should now be disposed of in accordance with law and as quickly as possible. ", ", J. ", "7. I agree."], "relevant_candidates": ["0000034509", "0000300099", "0001323656"]} {"id": "0000195129", "text": ["PETITIONER: Vs. RESPONDENT: KHUBCHAND BAGHEL AND OTHERS DATE OF JUDGMENT: 20/12/1963 BENCH: , N. RAJAGOPALA BENCH: , N. RAJAGOPALA SINHA, BHUVNESHWAR P.(CJ) , K. , RAGHUBAR , J.R. CITATION: 1964 AIR 1099 1964 SCR (6) 129 CITATOR INFO : E 1969 SC 872 (17) R 1970 SC1477 (6) F 1974 SC 480 (11,3,14,16) RF 1977 SC 56 (6) RF 1989 SC1477 (12) ACT: Election-Appeal to under s. 116-A-Whether in computing period of limitation for filing an appeal to , time provided by s. 12 of Limitation Act for getting a copy of the order can be excluded-Whether s. 29(2)(a) applied to cases of appeal preferred under s. 116-A - Relationship between the two limbs of s. 29(2) of Limitation Act-Limitation Act, 1908 , ss. 12 , 29(2) , First Schedule, Art, 156- Representation of the People Act , 1951 , v. 116-A. HEADNOTE: The appellant was elected to from a constituency in the State of Madhya Pradesh. The respondents were the ,other contesting candidates. Respondent No. 1 filed an election petition challenging the election of the appellant. That election petition was dismissed by . Against the order of the the first respondent preferred an appeal to the under s. 116-A 134-159 S.C.-9. 130 of the Representation of the People Act , 1951. Admittedly, the appeal was filed more than 30 days after the order of .. If the time requisite for obtaining a copy of the order of the was excluded, the appeal was filed within 30 days. However, if that was not 'done, the appeal was out of time. The contention of the appellant before the was that the respondent No. 1 was not entitled in law to exclude the time taken by him in obtaining the copy of the order of the . That contention was rejected by the . The also found that the appellant was guilty of two, corrupt practices and hence his election was set aside. The appellant came to this by special leave. The only question raised before this was whether for 'the purpose of computing the period of 30 days prescribed under s. 116-A(3) of the Act, the provisions of s. 12 of the Limitation Act could be invoked or not. Dismissing the appeal, Held: (per , , , and .) (i) The exclusion of time provided for by s. 12 is permissible in computing the period of limitation for filing.the appeal in the . Per , , and .) (ii) Though the right of appeal is conferred by s. 116-A of the Representation of the People Act, 1951, and it is by virtue thereof that the appeal was filed by respondent in the , it is still an appeal \" under the Code of Civil Procedure, 1908, to the \". To attract Art. 156 of the First Schedule to the Limitation Act , it is not necessary for an appeal to be an \"appeal under the Code of Civil Procedure\" that the right to prefer the appeal should be conferred by the Code of Civil Procedure. It is sufficient if the procedure for the filing of the appeal and the power of the for dealing with the appeal, when filed, are governed by the Code. Per and is no warrant for holding that an appeal which is not given by the Code of Civil Procedure is still an appeal under the Code merely because its procedural provisions govern its course. Where a right of appeal is given by some other law, the appeal must be regarded as one udder that law and not under the Code of Civil Procedure. There is no reason for construing the words \"under the Code of Civil Procedure\" as meaning \"governed in the matter of procedure by the Code of Civil Procedure\". Held:(iii) (per , , and JJ.) The entire sub-s. (2) of s. 29 of the Limitation. Act has to be read as an integrated provision and the conjunction \"and\" connects the two parts and makes it necessary for attracting cl. (a) that the conditions laid down by the opening words of sub-s. (2) should be satisfied. 131 Per and second limb of sub-s. (2) of s. 29 is wide enough to include a suit, appeal or an application under a special or local law which is of a type for which no period of limitation is prescribed in the First Schedule. Per J.-The use of the word \"any\" clearly shows that the second part of sub-s. (2) of s. 29 does not depend on the first part or vice versa. The second part of sub-s. (2) is an independent provision providing for that category of proceedings to which the first part does not apply. Held: (i) that s. 116-A does not provide an exhaustive and exclusive code of limitation for the purpose of appeals against orders of s and also does not exclude the general provisions of the Limitation Act . Section 29(2)(a) of the Limitation Act speaks of express exclusion and there is no express exclusion in s. 116-A(3) of the Representation of the People Act, 1951. Moreover, the proviso to s. 116- A(3) from which an implied exclusion is sought to be drawn does not lead to any such necessary implication. The proviso only restores the power denied to the under s. 29(2)(b) of the Limitation Act. If this proviso had not been there, s. 29(2)(b) would have excluded the operation of s. 5 of the Limitation Act with the result that even if a sufficient cause for the delay existed, the would have been helpless to excuse the delay. (ii)S. 12(2) of the Limitation Act applies to an appeal to the against the order of the . An order made under s. 98 of the Representation of the People Act, 1951, if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order and thereby attracting the relevant provisions of s. 12 of the Limitation Act. Section 12(2) does not say that the order mentioned therein shall be only such order as is defined in the Civil Procedure Code. If a statute provides for the making of an order and confers a right of appeal to an aggrieved party against that order within a prescribed time, the time requisite for obtaining a copy of the order can be excluded. The Act of 1951 empowers the to make an order and gives a right of appeal against that order to the and therefore s. 12(2) is directly attracted without any recourse to the definition of an order in the Code of Civil Procedure. Per limb of s. 29(2) is concerned only with the proceedings under special or local law for which a period of limitation is prescribed in the First Schedule to the Limitation Act . If for such a proceeding the period to be found in the First Schedule is different from that prescribed under a special or local law, certain consequences will follow under the provision. No inconvenience is to be caused by giving a literal and natural interpretation to the expression used by the legislature in the first portion of sub-s. (2) of s. 29 because cases of other kind can easily come under the second portion thereof. Case Law referred to. 132 JUDGMENT: ", "CIVIL APPELLATE JURISDICTION:, Civil Appeal No. 815 of 1963. Appeal by special leave from judgment and order dated April 23, 1963, of in 1st Appeal No. 23 of 1963. ", ", , and , for the appellant. ", ", for respondent No. 1. ", "December 20, 1963. ", "The following Judgments were delivered: ", " behalf of the Chief Justice and himself) We have had the advantage of perusing the judgment of our brother and we agree with him that the appeal should be dismissed. ", "The justification for this separate judgment, however, is because of our inability to agree with him in his construc- tion of the relative scope of the two limbs of s. 29(2) of the Indian Limitation Act. ", "The facts of the case have been set out in detail in the judgment of and it is therefore unnecessary to repeat them. There were three principal points that were urged before us on either side which require to be considered and all of them turn on the proper construction of s. 29(2) of the Indian Limitation Act which we shall for convenience set out here: ", "\"29(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefor by the first schedule, the provisions of section 3 shall apply, as if such period were prescribed therefor in that schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law- ", "(a) the provisions contained in section 4 , sections 9 to 18 , and section 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law; and ", "(b) the remaining provisions of this Act shall not apply.\" ", "The learned Judges of have proceeded on the basis that s. 29(2)(a) applies to the case of appeals preferred under s. 116 A of the Representation of the People Act, 1951 and on that footing have held that the appeal presented to them by the respondent was within time if computed after making the deductions permitted by s. 12 of the Limitation Act. It is the correctness of this view that is challenged before.....us. ", "Proceeding now to deal with the question whether the terms of s. 29(2) are apt to take in appeals under the Re- presentation of the People Act , the first matter to be con- sidered necessarily is whether that Act is a \"special or local law\" within the opening words of the sub-section. As to this, however, Mr. raised no dispute and he con- ceded that s. 116A was such a \"special or local law.\" That this \"special or local law\" prescribes \"for an appeal a period of limitation\" is also evident. The first point of controversy, however, has arisen as to whether \"the period of limitation prescribed by the special or local Law is different from the period prescribed therefor by the first schedule.\" The contention urged strenuously before us by Mr. , the learned counsel for the appellant, was that there would be \"a different period\" only where for the identical appeal (to refer only to that proceeding with which we are immediately concerned) for which a period of limitation has been prescribed by the special or local Law, a period is prescribed by first column of the first schedule. and there is a difference between the two periods. It was his further contention that where the Indian Limitation Act made no provision for such an appeal, s. 29(2) and the provision contained in its (a) and (b) were inapplicable. There have been several decisions on this point but it is sufficient to refer to the decision of in (1) where repelled this construction and held that even where there was no provision in the first schedule for an (1) I. L. R. 1952 Bom. 1083. ", "134 ", "appeal in a situation identical with that for which the spe- cial law provides, the test of \"a prescription of a period of limitation different from the period prescribed by the First Schedule is satisfied. This Court in etc.(1) upheld this construction and approved ,the judgment of in the case. Apart from the decision of this Court, we consider the reasoning of to be unexceptionable and we agree with in holding that the requirement of a prescription by the special law \"of a period different\" from that prescribed by the First Schedule is satisfied in the present case. ", "The next point was one that arose on the submission of counsel for the respondent and it was this. Assume that the construction of the words \"different from\" urged by the appellant were accepted, and this requirement would be satisfied only if the First Schedule made provision for an identical appeal as that under the special law, still it was submitted by the respondent that even this was satisfied in this case. For this purpose he relied on Art. 156 of the first schedule which runs: ", "----------------------------------------------------------- ", "Time from which \"Description of Period of period begins to appeal limitation run ", "------------------------------------------------------------ ", "156.-Under the Code of Civil Ninety days The date of Procedure, 1908, to a High decree or order Court, except in the cases appealed from.\" provided for by article 51 and article 153. ", "The argument was that though the right of appeal in the case before us was conferred by s. 116A of the Representation of the People Act and it was by virtue thereof that the appeal was filed by the respondent to , it was still an appeal \"under the Code of Civil Procedure, 1908, to .\" For this submission learned Counsel relied principally on two decisions--one of the Calcutta and the (1) A. 1. R. 1964 S. C. 416. ", "135 ", "other of , and they undoubtedly support him. .(1) -as well as in (1) which followed it-the held that to attract this article it was not necessary in order to be an \"appeal under the Code of Civil Procedure\" within the meaning of those words in Art. 156 , that the right to prefer the appeal should be conferred by the Code of Civil Procedure but that it was sufficient if the procedure for the filing of the appeal and the powers of the court for dealing with the appeal were governed by that Code. For adopting this construction the relied on the reference in Art. 156 to Art. 151. Article 151 dealt with appeals to the High from judgment rendered on the original side of that . The right to prefer these appeals was conferred by constituting the respective High s and not by the Code of Civil Procedure, though the Code of Civil Procedure governed the procedure, jurisdiction and powers of the in dealing with the appeals so filed. There would have been need therefore to except cases covered by Art. 151 only if the words \"under the Code of Civil Procedure\" were understood as meaning appeals for the disposal of which the provisions of the Code of Civil Procedure was made applicable. We might mention that besides the Calcutta and s a Full Bench of the Allahabad High also has in v. (3 ) adopted a similar construction of the Article, the learned Judges pointing out that several Indian enactments, among them the Indian - Succession Act , the Probate and Administration Act , the Land Acquisition Act and the Provincial Insolvency Act , proceeded on the basis of a legislative practice of con- ferring rights of appeal under the respective statutes without prescribing any period of limitation within which the appeal should be preferred, but directing the application, of the provisions of the Civil Procedure Code to such appeals, the intention obviously being that Art. 156 would furnish the period of limitation for such appeals. We consider that these deci- ", "(1) 1. L. R. 13 Cal. 221. ", "(3) 1. L. R. 34 Allahabad 496. ", "(2) 1. L. R. 43 Mad. 51. ", "136 ", "sions correctly interpret Art. 156 and, in any event, we are not prepared to disturb the decisions which have stood for so long and on the basis of the correctness of which Indian legislation has proceeded. ", "Mr. drew our attention to some decisions in which a different construction was adopted of the word \"under\" a particular enactment occurring in other Articles of the Limitation Act and in particular some dealing with appeals in certain criminal matters. In them the word 'under' was understood as meaning \"by virtue of\". He was, however, unable to bring to our notice any decision in which the construction adopted of Art. 156 which we have set out has been departed from. In the cases dealing with the words \"under the Criminal Procedure Code \" which he placed before us, the situation would obviously be different, since the indication afforded by the mention of Art. 151 in Art. 156 does not figure in the Articles dealt with. Therefore that would be a circumstance pointing to a different result. If the construction adopted of Art. 156 in the Calcutta and Madras decisions to which we have referred were upheld, there could be no controversy that an appeal under s. 116A of the Representation of the People Act would be \"under the Code of Civil Procedure\", for s. 116A(2) enacts, to read the material portion: ", "\"116A. (2) shall, subject to the provisions of this Act, have the same powers, jurisdiction and authority, and follow the same procedure, with respect to an appeal under this Chapter as if the appeal were an appeal from an original decree passed by a civil court situated within the local limits of its civil appellate juris- ", "diction.............................. ", "In this view even on the narrowest construction of the words \"different from those prescribed therefor in first schedule\" occurring the opening part of s. 29(2) , the exclusion of time provided for by Art. 12 of the Limitation Act would be permissible in computing the period of limitation for filing the appeal to in the case before us. ", "137 ", "The last point which remains for consideration is one which would be material only in the event of the two points we have already dealt with being decided differently. This relates to the relationship or inter-connection between the first and the second limbs of s. 29(2) of the Limitation Act. The reason why we are dealing with it is because of our inability to agree with the construction which our learned brothers & have placed on this feature of the sub-section. Sub-section (2), it would be seen, consists of two parts. The first sets out the conditions to which the special law should conform in order to attract section 3 and that part ends with the words 'as if such period were prescribed therefor in that schedule\". This is followed by the conjunction 'and' that word by the second part reading \"for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law- ", "(a) the provisions contained in section 4 , sections 9 to 18 , and section 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law; and ", "(b) the remaining provisions of this Act shall not apply.\" ", "The question that has been debated before us is whether the condition postulated by the first limb, namely the special or local law prescribing a period of limitation for a suit appeal etc. different from the period prescribed therefor by the first schedule has to be satisfied in order to render the provisions of cl. (a) applicable. If the conjunction 'and' was used for the purpose of indicating that the two parts were cumulative, that is, if the two parts operated in respect of the same set of circumstances, then unless the opening words of sub-s. (2) were satisfied, there would be no basis for the application of cl. (a) to the period prescribed for a suit, appeal or application applicable by the special or local law. If on the other hand, the two parts of the sub-section could be read independently as if they made provision for two separate situations, the result would be that the words starting from \"for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law\" followed by clauses (a) & (b) would be an independent provi- sion unrelated to the first part and therefore could operate unhampered by the condition set out in the first part. In other words, if the latter construction were adopted for every suit, appeal or application for which a period of limitation was prescribed by a special or local law, the provisions in ss. 4, 9 to 18 & 22 would apply unless excluded. Mr, urged that the conjunction 'and' could in the context be construed only as rendering the second limb a part and parcel of the first, so that unless the conditions laid down by the opening words of the sub-section were satisfied, the provisions of the Limitation Act set out in cl. (a) would not be attracted to \"determine the period of limitation' prescribed by the special or local law. The question of the import and function of the conjunction 'and' was the subject of elaborate consideration by a Full Bench of in a decision in (1). The majority of the learned Judges held that the two parts of the sub-section were independent and that \"for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law\". cl. (a) would apply unless excluded. then a judge of that Court, however, dissented from this view and held that the entire sub-s. (2) had to be read as an integrated provision and that the conjunction 'and' connected the two parts and made it necessary for attracting cl. (a) that the conditions laid down by the opening words of sub-s. (2) should be satisfied. Mr. recommended for our acceptance the dissenting judgment of We consider that the view expressed by as to the inter-relation of the two parts of the sub-section reflects correctly our own construction of the provision. has approached this question of construction from several angles including the grammar of the passage. Without going into any of them, we would rest our decision on a shorter ground. In order that the second part might be held to be independent ,of the first, the first part should itself be complete and be ", "1. L. R. [1956]2 Allahabad 252. ", "139 ", "capable of operating independently. Unless this test were ", "-satisfied, the conjunction 'and' would have to be read as importing into what follows it, the conditions or consideration set out earlier as otherwise even the first part would be incomplete. Let us now see whether the first part could function without the second. The first part reads \"where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the first schedule the provision of s. 3 shall apply as if that period was prescribed therefor in that schedule.\" The question is what this, standing by itself, would signify. If the conditions prescribed by the opening words were satisfied, s. 3 of the Limitation Act would be attracted Section 3 reads: ", "\"Subject to the provisions contained in sections 4 to 25 (inclusive), every suit instituted, appeal preferred, and application made, after the period of limitation prescribed therefor by the first schedule shall be dismissed, although limitation has not been set up as a defence.................... ", "In other words, if the special or local law prescribed a period of limitation different from that prescribed by the first schedule by the application of the first part of sub- s. (2), the court is enabled to dismiss suits, appeals and applications filed beyond time. If this is the only effect it would be seen that the provision is inane and redundant, because even without it, by the very prescription of a period of limitation the jurisdiction of the court to entertain the suit, appeal etc. would be dependent on the same being filed in time. ", "It is possible, however, to construe the reference to s. 3 in s. 29(2) to mean that the power to dismiss the suit, appeal etc. if filed beyond the time prescribed, is subject to the modes of computation etc. of the time prescribed by applying the provisions of ss. 4 to 25 which are referred to in the opening words of s. 3 . On this construction where a case satisfies the opening words of s. 29(2) the entire group of ss. 3 to 25 would be attracted to determine the period of limitation prescribed by the special or local law. Now let us test this with reference to the second limb of s. 29(2) treating the latter as a separate and independent provision. That part starts with the words \"for determining any period of limitation pres- cribed for any suit, appeal or application by any special or local law\" (italics ours). The words italicised being perfectly general, would manifestly be comprehensive to include every special or local law, and among these must necessarily be included such special or local laws which satisfy the conditions specified by the first limb of s. 29(2) . We then have this strange result that by the operation of the first part ss. 3 to 25 of the Limitation Act are made applicable to that class of special and local laws which satisfy the conditions specified by the first limb, whereas by the operation of the second limb the provisions of section 3 , 5 , 6 to 8 & 19 to 21 & 23 to 25 would not apply to the same class of cases. A construction which would lead to this anomalous result cannot be accepted and we, therefore, hold that subject to the construction we have put upon sub-s. (2) of s. 29 both the parts are to be read as one whole and that the words following the conjunction 'and' \"for the purpose of determining any period of limitation\" etc. attract the conditions laid down by the opening words of the sub-section. ", "As we have pointed out earlier this does not affect the result. We agree that the appeal fails and we direct that it be dismissed with costs. ", " by special leave raises the question of true construction of the provisions of s. 29(2) of the Indian Limitation Act, 1908 , in the context of its application to s. 116-A of the Representation of the People Act, 1951 , hereinafter called the Act. ", "The facts relevant to the question raised lie in a small compass and they are not disputed. The appellant was elected to from the Mahasamund parliamentary constituency in the State of- Madhya Pradesh in the third general elections. The respondents were the other contesting candidates. Respondent 1 filed an election petition before the Election Commissioner of India under ss. 80 and 81 of the Act for setting aside the election of the appellant and it was duly referred to . , by its order dated January 5, 1963, dis- missed the election petition. On February 11, 1963, the first respondent preferred an appeal against the said order of to of Madhya Pradesh at Jabalpur. Under sub-s. (3) of s. 116-A of the Act every appeal under Ch. IVA of the Act shall be preferred within a period of thirty days from the date of the order of the Tri- bunal under s. 98 or s. 99 thereof. Admittedly, the appeal was filed more than 30 days from the said order. If the time requisite for obtaining a copy of the order of the was excluded, the appeal was filed within 30 days; but if in law it could not be excluded, the appeal would certainly be out of time. The appellant contended before that respondent I was not entitled in law to exclude the time so taken by him in obtaining a copy of the order of the , but that plea was rejected by . On merits, held that the appellant had committed two acts of corrupt practice as defined by s. 123(4) of the Act and on that finding it declared the election of the appellant void. It is not necessary to go into the details of the judgment of given on the merits of the case,as nothingturns upon them in this appeal, for the learned,counsel confined his argument only to the question of limitation. The present appeal has been preferred by the appellant against the said order of setting aside his ,election. ", "The only question, therefore, is whether for the purpose of computing the period of 30 days prescribed under s. 116A (3) of the Act the provisions of s. 12 of the Limitation Act can be invoked. ", "Mr. , learned counsel for the appellant, in an ela- borate argument placed before us the different aspects of the question raised, and I shall deal with his argument in the appropriate context in the course of my judgment. It would be ,convenient at the outset to read the relevant provisions of the Act and those of the Limitation Act . ", "142 ", "The Representation of the People Act , 1951. Decision of the Section 98 . At the conclusion of the trial of an election petition the shall make an order:- ", "(a) dismissing the election petition; or ", "(b) declaring the election of all or any of the returned candidates to be void; or Section 116-A . (1) An appeal shall lie from every order made by a under section 98 or section 99 to in which the is situated. ", "(2)The High Court shall, subject to the provisions of this Act, have the same powers, jurisdiction and authority, and follow the same procedure, with respect to an appeal under this Chapter as if the appeal were an appeal from an original decree passed by a civil court situated within the local limits of its civil appellate jurisdiction. (3)Every appeal under this Chapter shall be preferred within a period of thirty days from the date of the order of the under section 98 or section 99 : Provided that may entertain an appeal after the expiry of the said period of thirty days if it is satis- fied that the appellant had sufficient cause for not preferring the appeal within such period. The Indian Limitation Act , 1908 Section 29 .-(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefor by the First Schedule, the provisions of section 3 shall apply, as if such period were prescribed therefor in that Schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law- ", "(a) the provisions contained in section 4 , section 9 to 18 , and section 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law; and ", "(b) the remaining provisions of this Act shall not apply. ", "Section 12 .-(2) In computing the period of limitation prescribed for an appeal, an application for leave to appeal and an application for a review of judgment, the day on which the judgment complained of was pronounced, and time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be reviewed, shall be excluded. ", "(3)Where a decree is appealed from or sought to be reviewed, the time requisite for obtaining a copy of the judgment on which it is founded shall also be excluded. Section 116-A of the Act confers a right of appeal against an order of the under s. 98 or s. 99 thereof; sub- s.(3) thereof prescribes a period of limitation of 30 days for preferring such an appeal. Section 29 of (the Limitation Act attracts, by fiction, the provisions of s. 3 thereof to an appeal described in s. 29 of the said Act; with the result, the provisions of sub-ss. (2) and (3) of s. 12 of the Limitation Act are attracted thereto; and if those sub-sections were attracted in computing the period of limitation prescribed for an appeal the time requisite for obtaining a copy of the decree or order or judgment on which it is founded shall be excluded. Learned counsel for the appellant, therefore, contends that s. 29 of the Limitation Act does not apply to an appeal under s. 116-A of the Act. The first argument of learned counsel is that for invoking sub-s.(2) of s. 29 of the Limitation Act the necessary condition is that the First Schedule thereto shall prescribe a period of limitation for an appeal and that a special law shall prescribe for the same type of appeal a different period of limitation and that, as in the present case the First Schedule has not prescribed any period of limitation to an appeal under s. 116-A of the Act against an order of the , sub-s. (2) of s. 29 of the Act -is not attracted. This argument is met by learned counsel for the respondents in two ways, namely, (i) that the First Schedule to the Limitation Act has prescribed a period of limitation for such an appeal, and (ii) that sub- s. (2) will apply even to a case where the First Schedule to the Limitation Act has not prescribed any period of limitation for an appeal, but a special law prescribed a period of limitation for such an appeal. I shall proceed to consider the two limbs of the argument separately. Has the First Schedule to the Limitation Act prescribed a period of limitation for an appeal against an order of an Election under s. 98 or s. 99 of the Act? Article 156 of the First Schedule to the Limitation Act says that to an appeal under the Code of Civil Procedure, 1908, to , except in the cases provided for by article 151 and article 153 , the period of limitation is 90 days from the date of the decree or order appealed from; and article 151 referred to in article 156 provides for an appeal against a decree or order of any of at Fort William, Madras, and Bombay, or of in the exercise of its original jurisdiction. What does the expression \"under the Code of Civil Procedure\" in art. 156 of the First Schedule to the Limitation Act connote? Does it mean that a right of appeal shall be conferred under the Code of Civil Procedure, or does it mean that the procedure prescribed by the said Code shall apply to such an appeal? A comparison of the terms of art. 156 and art. 151 indicates that the emphasis is more upon the procedure applicable to an appeal than on 'the right of appeal conferred under an Act. The heading of the first column in the First Schedule to the Limitation Act is \"Description of appeal\". The phraseology used in art. 156 describes the nature of the appeal in respect of which a particular period of limitation is prescribed. It does not refer to a right conferred under the Code of Civil Procedure, but only describes the appeal with reference to the procedure applicable thereto. Though the word \"under\" may support the contrary view, the reference to ", "- art. 151 therein detracts from it. Article 151 is an exception to art. 156 , indicating thereby that, but for the exception art. 156 will apply to an appeal covered by art. 151: that is to say, an appeal under art. 151 is deemed to be an appeal under the Code of Civil Procedure. Though a right of appeal is conferred under the Letters Patent, it is deemed to be an appeal under the Code of Civil Procedure, because the Code of Civil Procedure governs the said appeal. As , , observed in (1), \"It is well established that the Limitation Act and the Code are to be read together, because both are statutes relating to procedure and they are in pari materia and, therefore, to be taken and construed together as one system as explanatory of each other.\" So construed it may reasonably be held that art. 156 provides for an appeal governed by the procedure prescribed by the Code of Civil Procedure. This view was accepted by as early as 1886 in (1). There, under s. 49 of the Burma Courts Act (XVII of 1875), where the amount or value of a suit or proceeding in exceeded Rs. 3,000, and was less than Rs. 10,000, an appeal lay to . Under s. 97 of the said Act, \"save as otherwise provided by this Act, the Code of Civil Procedure shall be, and shall, on and from the 15th day of April 1872, be deemed to have been in force throughout British Burma\". Section 540 of the Civil Procedure Code of 1882, which was in force at that time, read: ", "\"Unless when otherwise expressly provided by this Code or by any other law for the time being in force, an appeal shall lie from the decrees or from any part of the decrees of the exercising original jurisdiction to the authorized to hear appeals from the decisions of those .\" ", "(1) A. T. R. 1952 Mad. 186. ", "134-159 S.C.-10. ", "(2) (1886) I. L. R. 13 Cal. 221. ", "146 ", "The effect of this provision of the Code on was that where an appeal was not expressly excluded by any special Act, an appeal lay to whatever court which under the enactment in force was the appropriate court. But this section was overborne by to the extent it conferred a right of appeal from the Recorder's Court to subject to certain conditions, for s. 49 of had taken away the right of appeal of value under a prescribed amount and conferred such a right, when the subject-matter of the appeal was between two prescribed amounts, from the decree of the Recorder's Court to . It is, therefore, not correct to say, as contended by the learned counsel, that a right of appeal was conferred under s. 540 of the Code of Civil Procedure, 1882. After the passing of , a right of appeal was, conferred under s. 49 of that Act and not under s. 540 of the Code. It was contended before , as it is now contended before us, that art. 156 of Schedule 11 of the Limitation Act did not apply to an appeal under , on the ground that the said appeal was not an appeal under the Code of Civil Procedure. The learned Judges observed thus, at p. 224: \"Now, what is meant by an appeal under the Civil Procedure Code? A particular appeal was given by and is still the only Act which prescribes to what Court this appeal shall lie. If it had not been given by then s. 540 of the Civil Procedure Code would have been sufficient to give it, provided that some Court was by some enactment provided as the proper Court to hear the appeal. The procedure in appeals in every respect is governed by the Code of Civil Procedure, The Limitation Act , Schedule 11. Art. 156 , when it speaks of the Civil Pro- ", "cedure Code is, on the face of it, speaking of a Code which relates to procedure, and does not ordinarily deal with substantive rights: ", "and the natural meaning of an appeal under the Civil Procedure Code appears to us to be an appeal governed by the Code of Civil Procedure so far as procedure is concerned.\" ", "It is manifest from this passage that the learned Judges did not repel the contention on the ground that the right of appeal was conferred by s. 540 of the Code of Civil Proce- dure, but expressly for the reason that the natural meaning of the relevant expression in art. 156 of Sch. 11 of the Limitation Act was that the appeal mentioned therein was one governed by the Code of Civil Procedure. This decision was followed by a Division Bench of in (1). The learned Judges, and , JJ., held that art. 156 of the Limitation Act (IX of 1908) applied to appeals filed under s. 54 of the Land Acquisition Act . The right of appeal was conferred under the Land Acquisition Act , but the procedure prescribed by the Code of Civil Procedure governed that appeal. The same argument now raised before us was raised, but was repelled. After citing the relevant part of the passage from the judgment of extracted above, the learned Judges stated at p. 55 thus: ", "\"It seems to us that this is the correct interpretation of article 156. There seems to be no good reason for saying that an appeal under the Civil Procedure Code means only an appeal the right to prefer which is conferred by the Code itself. On the other hand it would not be straining the language of the article too much to hold that an appeal, the procedure with respect to which, from its inception to its disposal, is governed by the Civil Procedure Code, may rightly be spoken of as an appeal under the Code .\" ", "Then the learned Judges referred to art. 151 of the Limita- tion Act and concluded thus: ", "(1) (1919) 1 L. R. 43 Mad. 51. ", "148 ", "\"That also tends to show that what is meant by the legislature is appeals, the hearing and disposal of which is governed by the rules of procedure laid down in the Civil Procedure Code.\" ", "Though about 77 years have passed by since the decision of and though the Limitation Act was amended a number of times, the did not think fit to express its dissent from this view by amendment or otherwise. No direct decision has been brought to our notice which has differed from, or even questioned the correctness of, this decision. In this context we may also refer to the decision of in (1) where it is pointed out) that several Indian enactments, for instance, the Succession Act , the Probate and Administration Act , the Land Acquisition Act and the Provincial Insolvency Act , confer rights of appeal and direct the application of the provisions of the Code of Civil Procedure to such appeals, but prescribed no period within which such appeals might be filed, the idea being that art. 156 of the Limitation Act would furnish the period of limitation for the filing of such appeals. Mr, , learned counsel for the appellant, brought to our notice a number of decisions which considered the forum to which an appeal shall lie against an order under s. 476 of the Code of Criminal Procedure and the procedure to be followed therein. ", " (1), where an appeal under s. 476-B of the Code of Criminal Procedure from was heard in part by the District Judge, and on the next date of hearing the appellant's pleader was not present in Court, it was held that the District Judge was entitled to consider that the appeal had been abandoned and to dismiss it under the provisions of Order XLI of the Code of Civil Procedure. (1), held, under similar circumstances, that an appellate court could set aside an order dismissing an appeal for default. in (1) (1912) I. L. R. 34 All. 496. ", "(2) (1926) I. L. R. 53 Cal. 827. ", "(3)A. I. R. 1956 All. 155. ", "149 ", " v. ), held that in such an appeal the appellate Court could exercise its power under 0. XLI, r. 27 of the Code of Civil Pro- cedure. (2 ) , applied to such an appeal the period of limitation prescribed under art. 154 of the Limitation Act . It is said that the combined effect of these decisions is that the procedure applicable in an appeal against an order made by a civil court under s. 476 of the Code of Criminal Procedure is that prescribed by the Code of Civil Procedure whereas the period of limitation is that prescribed for an appeal under the Code of Criminal Procedure. But the lear- ned counsel himself conceded that there is a conflict of decisions on the question whether to an appeal against the order of a civil court under s. 476-B of the Code of Criminal Procedure, the civil procedure applies or the criminal procedure applies and, therefore, the only decision which may have some bearing on the question now raised is that in (2). There, an application was filed before the Subordinate Judge for filing of a complaint against the petitioner under s. 476 of the Code of Criminal Procedure. That was rejected. The complainant preferred an appeal to the District Judge more than 30 days prescribed under art. 154 of the Limitation Act . The learned District Judge held that no question of limitation arose, for the District Judge suo motu could lodge a complaint in the criminal court when an offence in connection with the administration of civil justice came to his notice. On that reasoning he instituted a complaint. held that the appeal was filed before he District Judge under s. 476-B of the Code of Criminal Procedure and that under art. 154 of the Limitation Act it should have been filed within 30 days from the date of the order of the Subordinate court. It will be noticed that no argument was raised in that case that the appeal was governed by the Code of Civil Procedure and, therefore, the appropriate article of the Limitation Act was not art. 154 , (1) A. 1. R. 1937 Nag. 91. ", "(2) (1925) I. L. R. 52 Cal. 1009. ", "150 ", "but art. 156 thereof, for the simple reason that whichever article applied the apPeal was clearly barred by limitation. It is not, therefore, permissible to read into the decision the entire argument now advanced before us. The present question was neither raised nor argued in that case. It may, therefore, be safely held that for over 75 years the decision of on the construction of art. 156 of the Limitation Act stood the ground. Though it must be conceded that the point is not free from difficulty, we are not prepared to depart from the construction put upon the article as early as 1886 and which was not dissented from all these years. 1, therefore, hold that the expression \"appeal under the Code of Civil Procedure\" in art. 156 of the Limitation Act means an appeal governed by the Code of Civil Procedure. ", "Even so, it is contended that under s. 116-A(2) of the Act , though it has the same powers, jurisdiction and authority of an appellate court governed by the Code of Civil Procedure, is not empowered to follow the procedure prescribed under the Code in respect of receiving the appeals. This argument is contrary to the express terms of sub-s. (2) of s. 116-A of the Act. Under that sub-section, \" shall, subject to the provisions of this Act, have the same powers, jurisdiction and authority and follow the same procedure, with respect to an appeal under this Chapter as if the appeal were an appeal from an original decree passed by a civil court situated within the local limits of its civil appellate jurisdiction\". Under the second part of sub-s. (2) of s. 11 6-A of the Act, a fiction is created, namely, that though a right of appeal is conferred by s. 116-A(1) of the Act, the appeal thereunder for the purpose of sub-s. (2) will be deemed to be an appeal from an original decree passed by a civil court situated within the local limits of its civil apPellate jurisdiction. The first part of the sub-section describes the purposes for which the fiction is invoked, namely, the exercise of the powers, jurisdiction and authority and the following of the procedure with respect to such an appeal. The powers, jurisdiction and authority take in the powers, jurisdiction and authority exercisable by an appellate tribunal in regard to various matters prescribed in the Code of Civil Procedure. What does the word \"procedure\" mean? The procedure must necessarily be the procedure governing such ", "-an appeal. It means, inter alia, the manner of receiving an -appeal in the court, the preparation of records of the appeal, the posting of the appeal and the manner of its disposal. We find it impossible to exclude from the word \"procedure\" the filing and receiving of an appeal in the court. If that part was excluded, how could the appeal be received in ? The answer given is that the Government might make rules under s. 169(1) of the Act. When s. 168(2) confers a statutory power on to follow the procedure prescribed by the Code of Civil Procedure, we ,cannot invoke the general power of to make rules under s. 169(1) of the Act. If so, the procedure prescribed by 0. XLI of the Code of Civil Procedure, along with the other relevant provisions of the said Code, equally applies to an appeal filed under s. 116-A (2) of the Act. The result is that under s. 116-A(2) of the Act, the appeal, by fiction, is equated with an appeal filed under the ,Code of Civil Procedure in the matter of not only the exercise ,of the powers, jurisdiction and authority but also in the matter ,of procedure to be followed from the date of receipt of the :appeal to its final disposal. For the aforesaid reasons, I hold that the special law, namely, the Act, prescribes a period of limitation different from the period prescribed therefor by the First Schedule to the Limitation Act within the meaning of art. 29 (2) of the Limitation Act . If so, s. 12 of the Limitation Act is attracted, and the 1st respondent was entitled to exclude the time taken by him for obtaining the copy of -the order. ", "Even assuming that art. 156 of Schedule 1 to the Limitation Act did not prescribe a period of limitation for the kind of appeal under consideration, the question arises whether sub- s. (2) of s. 29 of the Limitation Act would not be appli- cable if no period was prescribed by the First Schedule for an appeal created by a special law but the special law pres- cribed a period of limitation for the same. The history of this provision throws some light on this question. The first Limitation Act was passed in the year 1859 (Act XIV of 1859). Section 3 of that act provided: ", "152 ", "\"When, by any law now or hereafter to be in force, a shorter period of limitation than that prescribed by this Act is specially prescribed for the institution of a particular suit, such shorter period of limitation shall be applied notwithstanding this Act.\" ", "The provisions of the Act of 1859 were repealed by the Limi- tation Act IX of 1871. Section 6 of that Act, which is relevant to the present inquiry, read: ", "\"When, by any law not mentioned in the schedule hereto annexed, and now or hereafter to be in force in any part of British India, a period of limitation differing from that prescribed by this Act is especially prescribed for any suits, appeals or applications, nothing herein contained shall affect such law.\" ", "The Limitation Act of 1871 was replaced by Act XV of 1877. Section 6 of this Act read: ", "\"When, by any special or local law now or hereafter in force in British India, a period of limitation is especially prescribed for any suit, appeal or application, nothing herein contained shall affect or alter the period so prescribed.\" ", "The same provision was retained in the Limitation Act IX of 1908, but it was amended in the year 1922 in the present form. Before the amendment of 1922, there was a difference of view on the following questions, namely, (1) whether the general provisions of the Limitation Act , where the word \"prescribed\" alone without reference to any Act, was used or even where that word was not used, would be applicable to special or local laws, and (2) whether the general provisions of the Limitation Act did not apply at all to the periods of limitation prescribed by special or local laws. Decisions holding that the general provisions of the Limitation Act did not apply to periods of limitations prescribed by other laws relied upon the expression \"affect or alter\" used in the section as it then stood. Section 29 of the Limitation Act was amended to remove the conflict with a view to make the general provisions applicable to the period of limitation prescribed by special or local laws. A comparison of the phraseology of the earlier sections shows that while s. 3 of the Limitation Act of 1859 used the words \"shorter period\", s. 6 of the Act of 1871 used the expression \"differing\", and s. 6 of the Acts of 1877 and 1908 removed both the expressions. The result was that s. 6 of the Act of 1871 saved all the special or local laws which prescribed a special period of limitation from the operation of the provisions of the Limitation Act . As the section then stood, it applied to all special or local laws prescribing a ", "-,period of limitation whether the Limitation Act prescribed any period of limitation or not for suits or appeals similar to those governed by special or local laws, or where the period of limitation so prescribed by special or local laws was shorter or longer than that prescribed in the Limitation Act . Can it be said that by the Amending Act of 1922, a conscious departure was made by the to impose a condition for the application of sub-s. (2) of s. 29 , namely, that a period of limitation should have been expressly prescribed by the First Schedule to the Limitation Act in respect of a suit or appeal governed by the special or local law? There was no occasion for such a departure. To put it in other words, apart from resolving the conflict, did the intend to exclude a particular category of proceedings governed by special or local laws from the operation of the benefit conferred by sub-s. (2) of s. 29 ? No justification was suggested for such a departure and we find none. ", "The problem may be approached from a different perspective. The scheme of the Limitation Act may be briefly stated thus: The preamble to the Act shows that it was passed to consolidate and amend the laws relating to the law of limitation in respect of the proceedings mentioned in the Act. It applies to the whole of India. Part 11 comprising ss. 3 to 11 deals with limitation of suits, appeals and applications; Part III comprising ss. 12 to 25 provides for computation of periods of limitation; and Part V deals with savings and repeals. We are not concerned with Schedules II and III for they have been repealed. The First Schedule consists of three divisions: the first division provides for the period of limitation for suits; the second division, for appeals; and the third division, for applications. Article 120 found in the first division prescribes for a suit for which no period of limitation is prescribed elsewhere in the Schedule; art. 181 in the third division prescribes for application for which no period of limitation is prescribed elsewhere in the Schedule or by s. 48 of the Code of Civil Procedure. But no such residuary article is found in the second division dealing with appeals. The Limitation Act was conceived to be an exhaustive code prescribing for every conceivable proceeding, whether suit, appeal or application, subject to the saving in Part V thereof. It follows that there is no period of limitation for an appeal not provided for in the second division unless the special or local law prescribes for it. If so, it may reasonably be said that, as the First Schedule of the Limitation Act prescribes no limitation for an appeal not covered by arts. 150 to 157 thereof, under the Limitation Act such a suit or appeal can be filed irrespective of any time limit. ", "With this background let us revert to the construction of s. 29(2) of the Limitation Act. When the First Schedule of the Limitation Act prescribes no time limit for a particular appeal, but the special law prescribes a time limit to it, can it not be said that under the First Schedule of the Limitation Act an appeal can be filed at any time, but the special law by limiting it provides for a different period? While the former permits the filing of an appeal at any time, the latter limits it to the prescribed period. It is, therefore, different from that prescribed in the former. 'This problem was considered by of , consisting of and , in (1). Therein, speaking for the , observed at p. 1086 thus: ", "\"The period of limitation may be different under two different circumstances. It may be different if it modifies or alters a period of limitation fixed by the first Schedule to the Limitation Act . It may also be different in the (1) I. L. R. Bom. 1083. ", "155 ", "sense that it departs from the period of limitation fixed for various appeals under the Limitation Act . If the first Schedule to the Limitation Act omits laying down any period of limitation for a particular appeal and the special law provides a period of limitation, then to that extent the special law is different from the Limitation Act . We are conscious of the fact that the language used by the is perhaps not very happy, but we must put upon it a construction which will reconcile the various difficulties caused by the other sections of the Limitation Act and which will give effect to the object which obviously the had in mind, because if we were to give to s. 29 (2) the meaning which Mr. contends for, 'then the result would be that even s. 3 of the Limitation Act would not apply to this special law. The result would be that although an appeal may be barred by limitation, it would not be liable to be dismissed under s. 3 \". ", "A Full Bench of , in (1) also dealt with this question. The learned Judges expressed conflicting views. , assumed that the first limb of the sub-section ,did not apply to a case where the schedule omitted to provide for a period of limitation. On that assumption he proceeded to consider the second limb of the sub-section. .. took the view that for the application of the first part of s.29(2) the period of limitation should have been prescribed by the First Schedule. , agreed with the view of . agreed with the view expressed by , and , did not agree with the view of . A Division Bench of in (2) (1) I. L.R. (1956) 2 All. 252. ", "(2) A. 1. R. 1961 M. P. 75,77. ", "156 ", "agreed with the view expressed by of . , speaking for (the , stated thus: ", "\"A special law may provide a period of limitation and schedule I may omit to do so. ", "None the less the special law would be different from the Limitation Act . Section 29 (2) of -the Limitation Act is not very happily worded. It must be construed so as to avoid absurdity. The, expression 'a period of limitation different. from the period prescribed therefor by the first schedule' occurring in s. 29 (2) cannot be construed as meaning that schedule 1 must also positively prescribe the period of limitation.. Such a construction would not be in accordance with the intention of the and would lead to an absurdity.\" ", "The learned Chief Justice proceeded to consider the ano- malous position that would arise if a literal construction was given to the provisions of the first part of the section. This , in (1), had to. consider this question incidentally in the context of the application of s. 29(2) of the Limitation Act to an application for special leave to appeal against an order of acquittal under sub-s. (3) of s. 417 of the Code of Criminal Procedure. This held that s. 5 of the Limitation Act would not apply to an application for special leave to appeal under sub-s. (3) of s. 417 of the Code of Criminal Procedure. The Limitation Act does not provide any period of limitation for an application for special leave to appeal from an order of acquittal under the said section. If that be so, on the argument of learned counsel for the appellant, s. 29 of the Limitation Act could not be invoked. But this held that s. 29(2) of the Limitation Act applied, but that section excluded the application of s. 5 to the said application. , speaking for the , observed: ", "\"Hence it may be said that there is no limitation prescribed by the Limitation Act for an (1) A. I. R. 1964 S. C. 260 appeal against an order of acquittal at the instance of a private prosecutor. Thus, there is a difference between the Limitation Act and the rule laid down in s. 417 (4) of the Code in respect of limitation affecting such an application. Section 29(2) is supplemental in its character in so far as it provides for the application of s. 3 to such cases as would not come within its purview but for this provision.\" ", "'This observation clearly supports the position that s. 29(2) would apply even to a case where a difference between the special law and the Limitation Act arose by the omission to provide for a limitation to a particular proceeding under the Limitation Act . ", "1, therefore, hold that in the instant case the Act provides a period of limitation different from that prescribed therefor by the First Schedule to the Limitation Act and, therefore, it is governed by s. 29(2) of the said Act. Even if my view on the construction of the first limb of s. 29 of the Limitation Act were wrong, it would not help the appellant, for his case squarely falls within the scope of the second limb of the section., For convenience I restate the relevant part of the section: ", "\"........... and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or focal law.\" ", "Learned counsel for the appellant relied upon the conjunc- tion \"and\" in support of his contention that the use of that conjunction makes the following sentence a limitation on the first part of the section. He further argues that if it is not a limitation but an independent clause, it will lead to the -anomaly of ss. 4 to 25 of the Limitation Act applicable to proceedings failing under the first part and only some of the provisions thereof, namely, ss. 4 , 9 to 18 and 22 apply- ing to the second part of the section. Apart from the grammatical construction, which I will consider presently, I do not see any anomaly in ss. 4 to 25 of the Limitation Act applying to the first part of the section and only some of them applying to the second part thereof. Those proceedings to which the first part applies, by fiction the period prescribed in the special or local law is treated as prescribed in the First Schedule itself. There cannot possibly be any reason why s. 3 of the Limitation Act in toto shall not apply to them. But the same cannot be said in the case of the proceedings of a different type not provided for in the First:Schedule. So, the specified the sections applicable tothem and excluded the general sections which relate tolegal disabilities, acknowledgements, part-payments and others specified therein. The may_ have -thought that such articles are not generally appropriate to proceedings under special or local laws for reliefs not provided for in the First Schedule. ", "Now, coming to the construction of the section, the relevant rule of construction is well settled. \"A construction which will leave without effect any part of the language of a statute will normally be rejected\"; or to put it in a positive form, the shall ordinarily give meaning to every word used in the section. Does the conjunction \"and\" make the following clause a limitation on the preceding one? No rule of grammatical construction has been brought to our notice which requires an interpretation that if sentences complete by themselves are connected by a conjunction, the second sentence must be held to limit the scope of the first sentence. The conjunction \"and\" is used in different contexts. It may combine two sentences dealing with the same subject without one depending upon the other. But, if the interpretation suggested by the learned counsel be accepted, we would not be giving any meaning at all to the word \"any\" used thrice in the second part of the section, namely \"any period\", \"any suit\" and \"any special or local law\". If the second part is a limitation on the first part, the sentence should read, \"for the purpose of determining the period of limitation prescribed for such suit, appeal or application by such special or local law.\" Instead of that, the use of the word \"any\" clearly demonstrates that the second. part does not depend upon the first part or vice versa. There is no reason why we should attribute such a grammatical deficiency to the legislature when every word in the second part of the section can be given full and satisfactory meaning. I would, therefore, hold that the second part is an independent provision providing for the aforesaid category of proceedings to which the first part does not apply. This is the view expressed by the majority of the judges of the Full Bench of the Allahabad High in (1). I agree with the same. ", "It was then said that s. 116-A of the Act provided an exhaustive and exclusive code of limitation for the purpose of appeals against orders of tribunals and reliance is placed on the proviso to sub-s. (3) of that section, which reads: ", "\"Every appeal under this Chapter shall be preferred within a period of thirty days from the date of the order of the under section 98 or section 99 . ", "Provided that may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within such period.\" ", "The contention is that sub-s. (3) of s. 116-A of the Act not only provides a period of limitation for such an appeal. but also the circumstances under which the delay can be excused, indicating thereby that the general provisions of the Limitation Act are excluded. There are two answers to this argument. Firstly, s. 29(2)(a) of the Limitation Act speaks of express exclusion but there is no express exclusion in sub-s. (3) of s. 116-A of the Act; secondly, the proviso from which an implied exclusion is sought to be drawn does not lead to any such necessary implication. The proviso has become necessary, because, if the proviso was not enacted. s. 29(2)(b) of the Limitation Act would have excluded the operation of s. 5 of the Limitation Act, with the result that even if a sufficient cause for the delay existed, would have been helpless to excuse the delay. 1, therefore, hold that the proviso to sub-s. (3) of s. 116-A of the Act only restores the power denied to the court under s. 29(2)(b) of the Limitation Act . ", "1) I. L. R. [1956] 2 All. 252. ", "160 ", "Lastly, it is contended that s. 12(2) of the Limitation Act, on its express terms, would not apply to an appeal to against an order of under s. 98 of the Act. Elaborating the argument it is said that in order to exclude the time for obtaining a copy of the order appealed against, the original shall be a decree or order within the meaning of s. 12(2) or judgment within the meaning of s. 12(3) of the Limitation Act and the order under s. 98 of the Act is neither a decree nor an order or a judgment within the meaning of the said sub-sections of s. 12 of the Limitation Act. Reference is made to the defini- tions of decree, judgment and order in sub-sections (2), (9) and (14) of s. 2 of the Code of Civil Procedure, respectively, and it is contended that the order under s. 98 of the Act does not fall under any of the said three expressions as defined therein. Under sub-s. (9) of s. 2 of the Code of Civil Procedure, \"judgment\" is defined to mean the statement given by the judge of the grounds of a decree or order. Sub-section (14) of s. 2 of the said Code defines \"order\" to mean the formal expression of any decision of a civil court which is not a decree. It follows from the said definitions that judgment is a statement of the reasons given by the judge and order is the formal expression of his decision. Section 104 of the said Code says, \"An appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders.\" Order XX of the Code deals with the manner of pronouncing a judgment and decree. Under 0. XX, r. 20, of the Code , \"Certified copies of the judgment and decree shall be furnished to the parties on application to the , and at their expense.\" Under s. 141 of the Code, \"The procedure provided in this Code in regard to suits shall be followed as far as it can be made applicable, in all proceedings in any court of civil jurisdiction\". The effect of these provisions is that a decree is a formal expression of adjudication conclusively determining the rights of parties with regard to all or any of the controversies in a suit, whereas order is a formal expression of any ,decision of a civil court which is not a decree. Judgment is a statement given by the judge of his grounds in respect of ,a decree or order. Ordinarily judgment and order are en- ", "161 ", "grossed in two separate documents. But the fact that both are engrossed in the same document does not deprive the statement of reasons and the formal expression of a decision of their character as judgment or order, as the case may be. ", "With this background let me look at the provisions of s.116- A of the Act . Under sub-s. (1) thereof, an appeal shall lie from every order made by a under s. 98 or s. 99 to of the State in which the is situated. Under s. 98 of the Act, \"At the conclusion of the trial of an election petition the shall make an order- ", "(a) dismissing the election petition;or ", "(b) declaring the election of all or any of the returned candidates to be void; or ", "(c)declaring the election of all or any of the returned candidates to be void and the petitioner or any other candidate to h ave been duly elected. \" ", "Part VI of the Act provides for disputes regarding elections-, Ch. III thereof prescribes the procedure for the trial of election petitions, and s. 90 therein says: ", "\"(1)Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the , as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits.\" ", "There is noprovision in the Act defining how the decision should be given. It could not have been the intention of the that the need not give the statement of reasons for its decision. As under s. 90 of the Act the Election is directed to try election petitions as nearly as may be in accordance with the pro- cedure applicable under the Code of Civil Procedure, it is the duty of the Election to give a statement of reasons for its decision. It is open to it to issue two documents--one embodying the reasons for the decision and the 134-159 S.C.-11. ", "162 ", "other, the formal expression of its decision: the former will be its judgment and the latter, its order. It may issue both in the same document in which case the judgment as well as the order is embodied in the same document. If so it is manifest that an order made under s. 98 of the Act, if it contains also the reasons for it, is a composite document ,satisfying the definition of a judgment as well as that of an ,order and thereby attracting the relevant provisions of s. 12 of the Limitation Act. That apart, a different approach to the question raised leads to the same conclusion. Section 12(2) of the Limitation Act does not say that the order mentioned therein shall be only such order as defined in the Civil Procedure Code. If a statute provides for the making of can order and confers a right of appeal to an aggrieved party -against that order within a prescribed time, sub-s. (2) of s. 12 of the Limitation Act says that the time requisite for obtaining a copy of such order shall be excluded. The Act em-powers the to make an order and gives a right of -appeal against that order to . Section 12(2) of the Limitation Act is, therefore, directly attracted without any recourse to the definition of an order in the Code of Civil Procedure. In either view, s. 12 of the Limitation Act ", "-applies and, therefore, the time taken for obtaining a copy ,of the said order shall be excluded in computing the period ,of limitation. ", "In the result, the appeal fails and is dismissed with costs. that the appeal be dismissed, but for different reasons. ", "I am of opinion that the first part of s. 29(2) of the Limi- tation Act applies only when a special or local law prescribes -a period of limitation for an appeal and when for that particular appeal a period of limitation is prescribed in the First Schedule to the Limitation Act , as omission to prescribe a period of limitation cannot be equated with the prescribing ,of any positive period of limitation within which the appeal should be filed, and that the second part of s. 29(2) of the Act is independent of the first part and can apply to cases to which the first part does not apply. I am also of ,opinion that art. 156 of the First Schedule applies to appeals which are instituted in view of the right of appeal conferred by any special or local law and not in pursuance of the provisions of s. 96 C.P.C. I do not elaborate my views as I agree with what my learned brother , has said in construing the first part of s. 29 (2) of the Limitation Act and art. 156 of the First Schedule and agree with my learned brother , with respect to his construction of the second part of s. 29(2) . The proviso to s. 116(a) of the Representation of the People Act gives discretion to to entertain an appeal presented after the expiry of 30 days from the date of the order of the in case it is satisfied that there is sufficient cause for the late presentation of the memorandum of appeal. The respondent has applied in this Court for the condonation of the delay in filing the appeal in . In the circumstances of the case, I consider it a fit case for condoning the delay. There was a difference of opinion in s regarding the applicability of s. 12 of the Limitation Act to such appeals. The delay was of a few days. The Election passed the order on January 5, 1963 and the appeal was filed on February 11, 1963. ", "A party can reasonably desire to obtain a copy of the judgment for deciding, after studying it, whether it is worthwhile appealing against it, and if so. on what grounds. I am satisfied that there was sufficient cause for the respondent's not presenting the appeal within the period of limitation. I therefore condone the delay and confirm the order of . ", " agree with my brother that the appeal should be dismissed, I regret my inability to agree with all the reasons which he has given. I need not recapitulate the facts which have been set out ", "-fully in the judgment prepared by my learned brother but I would only state the point which we have to consider in this appeal. The point is whether for the purpose of computing the period of 30 days prescribed by s. 116A(3) of the Representation of the People Act , 1951 under which an appeal can be preferred from the decision of , the provisions of s. 12 , sub-s. (2) of the Limita- tion Act, whereunder the time requisite for obtaining a copy of the decree and the day on which the judgment complained of was pronounced can be excluded can be pressed in aid. It was contended before us that the appeal should be deemed to be one under the Code of Civil Procedure, in which case it would fall under art. 156 of the First Schedule to the Limi- tation Act, and that though a shorter period of limitation is prescribed for it by the Representation of the People Act the provisions of s. 12(2) of the Limitation Act would be attracted by reason of the provisions of cl. (a) of s. 29(2) . Reliance was ;)laced in this connection on the first limb of s. 29(2) . Alternatively it was argued that the first limb of s. 29 , sub-s. (2) of the Limitation Act would also apply to an appeal under the Representation of the People Act even though it does not fall under art. 156 of the Limitation Act since a different period of limitation was prescribed for it from that prescribed for an appeal in the First Schedule of the Limitation Act and that, therefore, cl. (a) thereof would attract s. 12(2) of the Limitation Act. Finally it was argued that even if the appeal cannot be regarded as one falling within the first limb of s. 29(2) sub-s. (2) of s. 12 would still apply because the second limb of sub-s. (2) of s. 29 is wide enough in its ambit to include a suit, appeal or application for which no period of limitation is prescribed in the first schedule but a period of limitation has been prescribed by a special or local law. My learned brother has held in his: judgment that an appeal provided for by s. 116A of the Representation of the People Act would be an appeal underthe Code of Civil Procedure and thus fall under the first column of art. 156 of the First Schedule of the Limitation Act. He has also held that the words \"where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefor by the first schedule\" occurring in the first limb of sub-s. (2) of s. 29 would include a suit or an appeal' even though it is not of a type for which a period of limitation is prescribed in the First Schedule because it is enough if the special law prescribes for such an appeal a period which is different from any period prescribed in the First Schedule. I regret I am unable to agree with either of these views. Finally, however, my learned brother has construed the second limb of sub-s. 2 of s. 29 \"and for the purpose of ,determining any period of limitation prescribed for any suit, appeal or application by any special or local law\" as being wide enough to include a suit, appeal or an application under a special or local law which is of a type for which no period of limitation is prescribed in the First Schedule. With this last conclusion I agree. In my judgment what he has said on the last point is enough for the purpose of disposing of the appeal in the way proposed by him. As, however, I do not agree with what he has said on the first two points I must briefly indicate my reasons for coming to different conclusions. ", "In support of the conclusion that art. 156 applies, my learned brother has relied upon the decision in (1) which was followed by in (1). The first of these two cases was one from what was then British Burma. Under s. 49 of the Burma Courts Act, 1875 (XVII of 1875) an appeal Jay to from the decision in a suit or proceeding before in which the amount or value was not less than Rs. 3,000 and was not more than Rs. 10,000. Section 97 of that Act said: \"save as otherwise provided by this Act, the Code of Civil Procedure shall be, and shall, on and from the 15th day of April, 1872, be deemed to have been in force throughout British Burma.\" Section 540 of the Code of Civil Procedure, 1882 which was in force at that time read thus: ", "\"Unless when otherwise expressly provided by this Code or by any other law for the time being in force, an appeal shall lie from the decrees or from any part of the decrees of the exercising original jurisdiction to the authorised to hear appeals from the decisions of those courts.\" ", "(1) (1886) 1. L. R. 13 Cal. 221 (2) (1919) 1. L. R. 43 Mad. 51 The question which had to consider in that case was whether the appeal could be said to be in time as it fell to be governed by art. 156 of the First Schedule to the Limitation Act . For deciding this matter proceeded to consider what was-meant by an appeal under the Code of Civil Procedure. While dealing with the matter observed: ", "\"A particular appeal was given by . Act and Act is still the only Act which prescribes to what Court this appeal shall lie. If it had not been given by Act then s. 540 of the Civil Procedure Code would have been sufficient to give it. provided that some Court was by some enactment provided as the proper Court to hear the appeal. The procedure in appeals in every respect is governed by the Code of Civil Procedure. The Limitation Act , Sch. 1, Art.. 156 when it speaks of the Civil Procedure Code is, on the face of it, speaking of a Code which relates to procedure, and does not ordinarily deal with substantive rights: and the natural meaning of an appeal under the Civil Procedure Code appears to us to be an appeal governed by the Code of Civil Procedure so far as procedure, is concerned.\" ", "Referring to this, my learned brother has observed: ", "\"It is manifest from this passage that the learned judges did not repel the contention on the ground that the right of appeal was conferred by s. 540 of the Code of Civil Procedure, but expressely for the reason that the natural meaning of the relevant expression in art. 156 of Sch. 1 of the Limitation Act was that the appeal mentioned therein was one governed by the Code of Civil Procedur e.\" ", "That is true. It is, however, not material for my purpose to consider whether or not was right in hold- ing that the appeal before it was under the Burma Courts Act. I would assume that was right but it is necessary to point out that the provisions of s. 29 of the Limitation Act as then in force did not come for considera- tion in that case. The question would then be whether its view that an appeal, though not provided by the Code of ", "-Civil Procedure, would yet be deemed to be an appeal under the Code for the purpose of art. 156 of the Limitation Act ,,, was right. With respect I do not think that there was any warrant for holding that an appeal which was not given by, the Code would still be one under the Code merely because the procedural provisions thereof would govern its course-. Where the right of appeal is given by some other law, the appeal must be regarded as one under that law and not under the Code . I see no valid reason for construing the words 'under the Code of Civil Procedure' as meaning 'governed in the matter of procedure by the Code of Civil Procedure'. For, that is, in effect, what has done in this case. By reading the article in the way it has done has virtually construed the only provision in the Limitation Act dealing with normal civil appeals; to as a residuary article which would take in all appeals by whatever law they may be provided, merely because the procedure relating to appeals contained in the Code of Civil Procedure was applicable to them. This would in my judgment go against the plain intended of the . Indeed, while a right to institute a suit or make an application is a wider kind of right. there can be no right of appeal unless some statute confers it. That is why the has expressly enacted residuary provisions, Arts. 120 and 180, for suits and applications respectively in the Limitation Act . The First Schedule is divided into three divisions. Article 156 is one of the eight article& contained in the second division which deals with appeals. The first division of that schedule deals with suits. There, provision is made for a variety of suits including some under special laws. but it was realised that it could not be exhaustive. Therefore, art. 120 was provided therein, which deals with \"Suits for which no period of limitation is provided elsewhere in this schedule.\" The third division of the First Schedule deals with applications of different kinds. Article 181 makes provision for applications for which no period of limitation is prescribed elsewhere in the Schedule. In the second division, however, which deals with appeals, there is no provision analogous to art. 120 and art. 181. Four of the eight articles deal with appeals under the Code of Criminal Procedure and four with appeals other than those under the Code of Criminal Procedure. As already stated, only one of these articles deals with normal civil appeals to , namely, art. 156. It is not couched in language similar to that used in art. 120 and art. 181. Would we then be justified in reading the first column of art. 156 to mean the same thing as is said in the first column of arts. 120 or 181? The knew that appeals have been provided by various special laws; but it made no provision for such appeals in this Schedule appa- rently for the reason that a law which confers a right of appeal is expected to provide for the period of limitation for such an appeal. That seems to be the explanation for the absence of a residuary provision for appeals. The first difficulty, therefore, in interpreting art. 156 in the way contended for by -the respondents is that where a different period of limitation for appeal is expressly pro- vided by a special law art. 156 will not in terms be attracted. To bring such an appeal under it would clearly go against the express intention of 'the which was to confine that article to appeals under the Code of Civil Procedure. The next difficulty is that the entry deals with appeals \"under\" the Code of Civil Procedure and not appeals arising out of proceedings to which the Code of Civil Procedure applies. Nor again, does it include an appeal which is only deemed to be under the Code of Civil Procedure. Be it noted that so far as proceedings under the Representation of the People Act are concerned, the whole of the Code of Civil Procedure does not apply but only so much of it as is expressly made applicable by the provisions of the Representation of the People Act . It was said that if the provisions of 0. XLI, of the Code of Civil Procedure were not applicable to an appeal under the Representation of the People Act there would be no provision whereunder the party could at all file an appeal. It seems to me, however, that there can be no difficulty at all in this matter as every ", "-High Court has made rules partly under the Constitution ", "-and partly in exercise of its inherent power to make suitable provisions in regard to this and allied matters. , however, does not appear to have given ,the full consideration in 's case(1) to the ambit of art. 156 and that is another reason why I find myself unable to accept the correctness of the view it has taken in that case. ", "It was then said that the view should be accepted on the ground of stare decisis. In this connection it was pointed out thatso far no court has dissented from that view and indeed theview was fully accepted in .case(1) bythe Madras . In so far as the principle of stare decisis is concerned it is nothing more 'than,. as observed by in Justice According to the English ,Common Lawyers (1961 ed. p. 195), a precipitate of the notion of legal justice. In other words it is the principle that judicial decisions have a binding character. But in India the position is not quite the same. Here the decision of a is not even always binding upon it in the sense that it can be reconsidered by . No doubt its decision may bind all courts subordinate to it as also all Judges sitting singly or in division benches of the . It is also true that a decision of a of a is binding on every other of that but there again there have been cases where one has reconsidered the decision of an earlier . In any case the decision of a has no more than persuasive character in so far as this ' is concerned. In that view the decision of the Calcutta , even though it may not have been dissented from since the time it was rendered, cannot, in the proper sense of the term be regarded as stare decisis. What could be stare decisis in this would be its own previous ,decisions. But even here instances are not wanting where, unlike perhaps , we have considered ourselves free to go back on previous decisions. ( . 3 Finally, even where a decision has not been (1) (1886) I. L. R. 13 Cal. 221 (2) (1919) I. L. R. 43 Mad. 51 (3) 2 S. C. R. 603 dissented from for a long time, but has on the other hand been followed, it is not entitled to be treated as immutable, particularly where it deals only with a question appertaining to the adjective law, such as the law of limitation. There may be a great deal to be said in favour of not disturbing even erroneous decisions affecting substantive rights to property which have stood undisturbed for a long time on the ground that such a course may unsettle existing titles to property. But this or similar considerations which would justify leaving such decisions undisturbed would not stand in the way of overruling an erroneous decision on a matter appertaining to the adjective law however ancient the decision may be(1). Therefore, I do not feel myself persuaded to hold that the present appeal can be regarded as of a type falling within the first column of art. 156 of the First Schedule to the Limitation Act . In order to deal with the second ground given by my learned brother it is necessary to reproduce the provisions of s. 29 , sub-s. (2) of the Limitation Act . They run thus: ", "\"Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefor by the First Schedule, the provisions of section 3 shall apply, as if such period were prescribed therefor in that Schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law-. ", "(a) the Provisions contained in section 4 ., sections 9 to 18 , and section 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law; and ", "(b) the remaining provisions of this Act shall not apply.\" ", "(1) See , Law in the, making (5th edn.) p. 209 fn. 3 While expressing the view that the legislature has not ex- pressed itself happily while enacting this provision he has agreed with the view taken in (1), which was followed by in (1). In that case has held that art. 156 is attracted on the ground that the period provided by the special law is different from that contained in the First Schedule. With great respect to the learned Judges, I find it difficult to strain the language used in the first limb of s. 29 (2) in this manner. The legislature has in clear terms spoken of cases in which a special or local law has prescribed for a suit, appeal or an application a period of limitation \"different\" from that prescribed by the First Schedule. Now, the governing words are \"suit, appeal or application\". Therefore, what has to be seen is whether a suit, appeal or application under a particular local or special law is of a kind similar to one for which a period of limitation is prescribed in the First Schedule. The first limb of sub-s. (2) of s. 29 is concerned only with proceedings of this kind, that is, proceedings under special or local law for which a period of limitation is provided in the First Schedule. If for such a proceeding the period to be found in the First Schedule is different from that prescribed under a special or local law certain consequences will follow under the provision. I do not think that any inconvenience would be caused by giving literal and natural interpretation to the expression used by the legislature in the first portion of sub-s. (2) of s. 29 because cases of other kind can easily come under the second portion thereof. Since I agree with my learned brother about what he has said regarding the second limb of sub-s. (2) of s. 29 the aapeal must be dismissed with costs as proposed by him. (1) I. L. R. 1952 Bom. 1083. ", "Appeal dismissed. ", "(2) A.I.R. 1961 M. P. 75. ", "172"], "relevant_candidates": ["0000010459", "0000114447", "0000210785", "0000278608", "0000324164", "0000490735", "0000608874", "0000935053", "0000951533", "0001221030", "0001744698", "0001747962", "0001855680"]} {"id": "0000199139", "text": ["JUDGMENT , C.J. ", "1. This special civil application has been referred to a Full Bench by Mr. Justice and Mr. Justice . No question has been formulated by the learned Judges, but it seems that they took the view that the decision of of this Court in ), requires reconsideration inasmuch as a decision of in v , , seems to the learned Judges inconsistent with the view taken of the law in 's case (A). ", "2. Now, curiously enough, the Advocate General emphatically asserts before us that not only the decision of is not inconsistent with 's case (A), but that the decision of supports and reinforces the view taken by this Court in 's case (A), and Mr. not so emphatically also agrees that it is difficult to find any inconsistency between the judgment of and the judgment in 's case (A). But inasmuch as the matter has been referred to and the matter has been argued at great length and the Advocate General tells us that a decision should be given by us because a large number of petitions are pending and the decision of which would be governed by the view we take in , we must proceed to decide the question referred to us. ", "3. Now, to state the facts briefly, the petitioner was employed as a Khalasi in the Loco Shed of the Central Railway at Kalyan. He was employed on 3rd October 1947. On 26th October 1949 he was arrested on a charge under Sections 457 and 380 of the Indian Penal Code and placed before the First Class Magistrate at Kalyan, and it appears that he was released on bail on 4th November 1949. On 6th May 1953 he was discharged by the learned Magistrate and the learned Magistrate gave him, as it were, a clean bill and said in his judgment that there would be no objection to his being reinstated by . He resumed his work -- and we are using a neutral expression -- on 20th October 1953, and he filed a petition before the under the Payment of Wages Act claiming wages from the period 25th October 1949 to 19th October 1953. The decreed his claim. There was an appeal to and the learned District Judge took the view that the under the Payment of Wages Act had no jurisdiction to deal with this matter. Thereupon the employee filed a petition under the Constitution before consisting of Mr. Justice and Mr. Justice and it is this Bench that has referred the matter to us. ", "4. Now, we should have thought, but for the fact that we are sitting here as a Full Bench, that the law as to the jurisdiction of the under the Payment of Wages Act is fairly well settled. If it is necessary at all, we will reiterate it as briefly as possible. The leading case on the subject is ), where was for the first time called upon to consider the scheme of the Act and the jurisdiction of the under the Act, and in that decision we laid down that the had no jurisdiction to decide whether the services of an employee had been rightly or wrongly terminated or whether the dismissal was lawful or unlawful. We said that such a question would not come within the purview of the special tribunal set up under the Act. Although that was the question that arose for our determination, we also made it clear as to what was the nature and ambit of the jurisdiction of the , and in brief what we said was that the primary function of the was to determine what the wages of the employee were and whether there had been a delay in payment of those wages or a deduction from those wages, and in order to determine the wages it may be necessary to determine what the terms, of the contract were under which the employee was employed and under which he was claiming his wages. It may also be necessary, we pointed out, to decide whether the employee was employed by the employed or not because the question of a contract can only arise provided there was employment. Therefore, in order to determine what the contract was, what the terms of the contract were, what were the wages due under the contract, it might become necessary for the to determine whether in the first place there was an employment or not. ", "5. The next decision which followed upon 's case (C), was the case of v. , (D-E). That was really a logical extension of the principle laid down in 's case(C), because in that case there was a suspension of an employee by and the contention put forward was that in view of the suspension no claim could be made by the employee in respect of the period of suspension, and what the Court held was that it was open to the under the Payment of Wages Act to consider whether during the period of suspension the relationship of master and servant subsisted between the employer and the employee and if such relationship subsisted, notwithstanding the suspension the employer was liable to pay to his employee wages for that period. Here again, therefore, the point that we were emphasising was that It was competent to the to determine whether during the relevant period the employee was in fact employed by the employer. ", "6. Then a third judgment to which reference might be made is ). In that case certain employees of who had migrated to Pakistan returned and purported to exercise the option given to them to be re-employed by , and they claimed the wages of the period antecedent to the time when they exercised the option, and the question that arose first before my brother Mr. Justice was whether the under the Payment of Wages Act had jurisdiction to decide this question, and the learned Judge at page 864, with respect, correctly enunciates the principles emerging from the authorities that we have considered. \"Again, it is well established that it is open to the under the Payment of Wages Act , in order to decide what sums are payable as wages, to determine whether a person has been employed or not, because the question of contract of employment can only arise if there was at the relevant time a subsisting contract of employment.\" Therefore, it will be noticed that again in this case the emphasis is on the question as to whether there was an employment by the. employer of the employee or, in other words, whether there was relationship of master and servant between the employer and the employee or, again to use different language, whether there was a subsisting contract of employment between the employer and the employee. Mr. Justice held in favour of the employee. There was an appeal and upheld the view taken by the learned Judge. ", "7. Then we come to (A). In that case there was no dispute as to employment. The dispute was whether the employee was entitled to receive wages under a contract which he had set up or wages under a contract which was set up by the employer. These two contracts were relied upon by the employee and the employer in respect of the same period for which wages were claimed by the employee and what the Court held was that when there is a dispute as to which is the contract that governs the relationship of the parties and if two rival contracts are in the field, then the under the Payment of Wages Act has no jurisdiction to decide which of the contracts should regulate the rights of the parties, and the distinction that was drawn in that case was that whereas the could determine what was the contract, it could not determine which was the contract. As the Advocate General has rightly pointed out, in 's case (A), also we enunciated the principle that was laid down in 's case (C). At page 901 (of Bom LR): (At p. 733 of AIR), of the judgment the ratio of 's case (C), is thus stated that the jurisdiction of the really is to determine the terms of the contract in so far as they relate to the payment of wages and in so far as he has to decide the liability of the employer to pay wages under the terms of the contract. ", "8. Turning to the decision of , which has necessitated this Full Bench, in , the question that arose for the consideration of the learned Judges was an entirely different question. The employee there was a carpenter employed on daily wages. subsequently introduced a scheme which created a cadre of skilled labourers on the scale of monthly rates of pay and admitted to it only those who passed a test. The employee did not pass the test and continued to serve as an employee on daily wages, and he sued before the under the Payment of Wages Act to recover the additional amount of wages that would have become payable to him had he been taken up on the cadre of monthly rated employees, complaining that he was wrongly not treated as such by the , and held that this was not a claim for actual wages but it was a claim for potential wages and that the under the Payment of Wages Act had no right to determine whether the employee was entitled to be put on the cadre which had been created; that was the function of and not the under the Payment of Wages Act . In this connection at page 745 (of Bom LR): (at p. 416 of ), gives expression to the same principle that has been enunciated both in 's case (C) and 's case (A), and what Mr. Justice says is : ", "\"But it is said on behalf of the respondent that the has the jurisdiction not only to make directions contemplated by Sub-section (3) of Section 15 to refund to the employed person any amount unlawfully deducted but also to find out what the terms of the contract were so as to determine what the wages of the employed person were. There is no difficulty in accepting that proposition.\" ", "Now, that is exactly the proposition to which legal effect was sought to be given in both the cases of this Court to which reference has just been made. Therefore, we agree with the Advocate General that it is impossible to contend that 's case (B), has in any way undermined the authority of 's case (A). On the contrary, 's case (B), reinforces the decision given by this Court. This was also the view taken by a Division Bench of this Court consisting of Mr. Justice and Mr. Justice in Special Civil Appln. No. 2520 of 1956 on 23-11-1956 (G), and Mr. Justice delivering the judgment points out that in all cases properly filed before the authority there should be no dispute about the contract itself, and the learned Judge, with respect, rightly explains the decision in 's case (A) by pointing out that when the employer and the employee come before the authority and rely on different contracts, it is not within its jurisdiction to decide which of the two contracts is subsisting and under which of them the employer is liable to pay wages. The learned Judge refers to 's case (B) and points out that the limits of the jurisdiction of the authority under the Payment of Wages Act are no longer in doubt. ", "9. Now, this being the settled law, let us turn to the facts before us and apply that law to those facts. It is clear that the claim of the employee was made on the basis that he continued to be in the employment of the railway authorities during the relevant period, viz., the 25th October 1949 to the 19th October 1953, because rightly or wrongly his case was that during that period he was under suspension and did not cease to be in the employment of . Let us see what the answer of was to this claim. They denied in para. 3 of the written statement that the employee was in their employment, and in para. 5, which is the most material paragraph and on which great reliance has been placed by the Advocate-General, say : ", "\"After a period of three months he was treated as 'absconding' and a temporary employee engaged in the vacancy. His name was automatically struck off the attendance register as nothing was heard about him. He cannot therefore be regarded as an employee of the opposite party for any length of time.\" ", "And in para. 9 case is that the employee was re-employed as a fresh entrant on the 20th October 1953, and they end the written statement by saying: ", "\"As he was neither an employee nor can be said to be 'in service' he is legally not entitled to any 'wages'; neither he can claim them under the Payment of Wages Act .\" ", "In our opinion, on these pleadings the issue directly and substantially arises as to whether the employee was in the employment of during the relevant period, and there can be no doubt that that is an issue which the under the Payment of Wages Act can try and determine. It is not the case of that the services of the employee were terminated, nor have contended that he was dismissed. They have relied on the fact that automatically his name was struck off from the attendance register for the purpose of contending that he must be regarded as not being an employee during the relevant period. We agree with the Advocate-General that if ' case was that the employee's services were terminated or that he was dismissed or discharged, then in view of 's decision (C), that was an issue which could not have been tried by the under the Payment of Wages Act . But when the dispute and controversy between the parties is whether the employee was in employment or not, that surely is an issue which is directly within the jurisdiction and competence of the . The Advocate-General has laid great emphasis on the case of the employee that he was reinstated and on the case of that he was re-employed, and says the Advocate-General that it is clear on these pleadings that two contracts are in the field, and that the employee is relying on the original contract under which according to him he was continued and reinstated, and are relying on another contract under which he was re-employed at the relevant date. In our opinion, that argument is based on a misapprehension. Whether the employee was reinstated or re-employed depends upon the fact as to whether the employee continued to be employed during the relevant period. If the employee continued to be employed during the relevant period, then he was reinstated as contended by the employee. If, on the other hand, he did not continue to be employed, then the employment having come to an end there was a case of re-employment as alleged by . It is also erroneous to suggest that there are two conflicting contracts in the field. There are not. If the employee was in the employment during the relevant period, then the only contract is the original contract, the terms of which have to be construed in order to determine what wages the employee was entitled to. It is not suggested by that if the employee was in the employment during that period any other contract regulated the rights of parties. The second contract could only come into play provided the employee was not in employment during the relevant period. But if the employee was not in employment during the relevant period, no further question survives and it would not be necessary to determine what the terms of the subsequent contract were, because if the holds that the employee was not in service the claim made by the employee with regard to wages must fail. Therefore, we cannot accept the contention of the Advocate-General that his case falls within the principle of 's case (C) for the reason that no issue as to the termination of the services of the employee can arise on those pleadings. We might point out that have not even indicated when his services were terminated. Nor does the case fall within the principle of 's case (A) because, as just pointed out, we do not have here a case where the has to determine which contract regulates the rights of the parties. ", "10. Turning to the judgment of the under the Payment of Wages Act , the view taken by the is that the employee should be deemed to have been suspended and having been deemed to have been suspended, under the rules in the Railway Manual he was entitled to full salary as he was reinstated and as no obloquy attached to his conduct in respect of which he was charged, he indeed having obtained an honourable discharge from the Magistrate, The may be right or wrong on the facts, but his decision turned on this that on his construction of the rules and of the attendant circumstances he took the view that the employee was in the service of the Railway Authorities during the relevant period and he also determined the quantum of wages on a construction of the contract as full salary during the period. When the matter went to the learned District Judge, the view that he took was this -- and to quote from his judgment: ", "\"On these pleadings one of the issues that arise for consideration is: Whether the respondent was discharged from service and re-employed as the appellant contends or was suspended from service and was reinstated. This issue involves the question whether the respondent was really discharged from service and if so whether he was legally discharged. And, in my view, this issue is beyond the competence of the under the Payment of Wages Act .\" ", "Now, with respect to the learned District Judge he would be quite right if the issue that was involved was the issue set out by him. But, as we have already pointed out, the question that had to be considered by him and had to be considered by the was not whether the employee was discharged from service and if so legally discharged, but what had to be considered was whether the employee was employed by during the relevant period. ", "11. The Advocate-General has drawn our attention to the relevant rules and has pointed out that even suspension from service does not automatically entitle the worker to wages unless he actually works, and he has also drawn our attention to the fact that even if there is a case of reinstatement it is for to determine whether he should get his full wages or not. Now, these are matters affecting the merits of the case. They go to determine what the quantum of wages is to which the employee would be entitled. It may be that the learned District Judge to whom we are proposing to send the matter back may take the view that during the relevant period there was no employment and that the relationship of master and servant did not subsist between the employee and , and even if he takes the view that the employment continued he may take the view on a consideration of the relevant rules that the employee was not entitled to the wages because he did not do any work or that he was entitled not to full wages as claimed by him but to much less. But these are all questions of determining the wages due to the employee on a construction of the terms of the contract. These are not questions which affect the jurisdiction of the under the Payment of Wages Act . ", "12. Therefore, in our view, the learned District Judge was in error in holding that the under the Payment of Wages Act had no jurisdiction to entertain the application Sled by the employee. We will, therefore, set aside the order of the learned District Judge send the matter back to him, and direct him to try the following issues: ", "(1) Whether the employee continued to be in the employment of during the relevant period, viz., 25th October 1949 to 19th October 1953? ", "(2) If he continued to be in employment what are the wages, if any, to which the employee is entitled under the terms of the contract subsisting between the employee and ? ", "13. The petitioner to get the costs of the petition. No order as to costs of the hearing before us. ", "14. Case sent back."], "relevant_candidates": ["0000348559", "0000679996", "0001733648"]} {"id": "0000199143", "text": ["PETITIONER: BABURAM Vs. RESPONDENT: C C JACOB & ORS. (WITH C.A NO.10909/96) DATE OF JUDGMENT: 18/03/1999 BENCH: , JUDGMENT: ", "SANTOSH HEGDE, J. ", "C.A. Nos.10658-59/96 : ", "These appeals arise out of the order dated 22.9.1995 made by , , (for short `the tribunal') in O.A. Nos.186/94, 961/95 and 1192/94. The applicants therein questioned the selection made by and consequential promotion of the appellant to the post of Superintendent of in a vacancy reserved for Scheduled Castes. The contention before the tribunal was that the percentage of reservation has always to be worked out in relation to the number of posts which formed the cadre strength and the said reservation is not to be made with reference to a vacancy. ", "Since the law in regard to the above stated position was nebulous, of this Court in the case of . (1995 2 SCC 745) settled the said issue holding that such reservation is in relation to the number of posts comprising in the cadre and not in relation to vacancies. The judgment of was delivered on 10.2.1995. This Court in the said judgment after taking into consideration the fact that the law was not clear till that date, observed thus : \"We, however, direct that the interpretation given by us to the working of the roster and our findings on this point shall be operative prospectively.\" The question that arises for our consideration in this case is: was it open to the tribunal to apply the law laid down in case (supra) to the facts of the case in hand. The brief facts necessary for the purpose of deciding this question are that in June, 1993, (for short `the ') considered the suitability of candidates eligible for promotion to four vacancies which arose during 1993-94 in the cadre of Superintendent of (Preventive) from the post of Preventive Officers in which proceedings of the the appellant was chosen to be promoted against a reserved vacancy earmarked for the Scheduled Castes. The said decision of the was challenged before the tribunal on 27.1.1994 wherein the applicants contended that they are entitled to be considered for promotion to the category of Superintendent of in the concerned vacancy, treating these vacancies as unreserved. Consequently, they prayed that their case be considered for promotion on merits. During the pendency of the applications before the tribunal, the appellants herein came to be promoted on 26.6.1994 as against a reserved vacancy which arose on 1.6.1994. The tribunal on 22.9.95 following the judgment of this Court in the 's case (supra), allowed the applications and held that there had been an erroneous application of the principle of reservation resulting in appointment of Scheduled Caste candidates in excess of the quota earmarked for them. It directed the concerned respondents to recalculate the entitlements of different categories and take further action applying the quota rule to the cadre and not to the vacancies as they arose. It further directed that till the quota is correctly maintained, no appointment will be made from the groups which have exceeded the quota reserved for them. As noted above, the finding of the tribunal is based on the ratio of the judgment laid down by this Court in 's case (supra). The contention of the appellant in these appeals is that the judgment in 's case was made effective prospectively, hence, the same could not have been applied to the promotion of the appellant. This contention was negatived by the tribunal on the ground that the decision of the in selecting the appellant does not amount to an appointment and in view of the fact that the appellant's promotion was made subsequent to filing of the petition, the appellant cannot claim the benefit of the prospectivity given to the 's judgment by this Court. We are unable to agree with this view of the tribunal. It is to be noted that the prospectivity given to 's case was obviously on the ground that there was a doubt in regard to the position of law until the same was clarified by this Court in 's case. The decision of the was taken in June, 1993; much prior to the judgment in 's case. It is only pursuant to the decision of the , the appellant came to be promoted on 27.6.1994 which is also a date prior to the delivery of the judgment in 's case. In our opinion, the prospectivity was given to 's case only to see that status prevailing prior to the judgment in 's case should not be disturbed. The prospective declaration of law is a devise innovated by the apex court to avoid reopening of settled issues and to prevent multiplicity of proceedings. It is also a devise adopted to avoid uncertainty and avoidable litigation. By the very object of prospective declaration of law, it is deemed that all actions taken contrary to the declaration of law prior to its date of declaration are validated. This is done in the larger public interest. Therefore, the subordinate forums which are legally bound to apply the declaration of law made by this Court are also duty-bound to apply such dictum to cases which would arise in future only. In matters where decisions opposed to the said principle have been taken prior to such declaration of law cannot be interfered with on the basis of such declaration of law. In the instant case, both decisions of the as well as the appointing authority being prior to the judgment in 's case, we are of the opinion that the tribunal was in error in applying this decision. For this reason, these appeals succeed and are hereby allowed; setting aside the orders and directions made by the tribunal in OA Nos.186/94, and 961/95. ", "C.A. No.10909/1996 : ", "In view of our judgment in CA Nos.10658-59/96, this appeal also succeeds and is hereby allowed."], "relevant_candidates": ["0001871744"]} {"id": "0000235803", "text": ["CASE NO.: Appeal (civil) 11768 of 1996 PETITIONER: & . Vs. RESPONDENT: STATE OF U.P. & ORS. DATE OF JUDGMENT: 14/02/2001 BENCH: V.N.Khare, S.N.Variava JUDGMENT: ", "L.....I.........T.......T.......T.......T.......T.......T..J J U D G M E N T S. N. VARIAVA, J. ", "This Appeal is against a judgment dated 10th July, 1996. By this judgment a number of Writ Petitions filed before have been dismissed. The Petitioners in all the Writ Petitions were doing the business of preparing tanned and finished leather. The question involved in all the four Petitions was whether 'tanned leather' can be subjected to Uttar Pradesh Mandi Fee payable under the provisions of U.P. Krishi Utapadan Mandi Adhiniyam, 1964 (hereinafter for the sake of convenience called the said Act). For an understanding of this question it is necessary to see Section 2 (a) of the said Act which reads as follows : \"'Agricultural produce' means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry or forest as are specified in the Schedule, and includes admixture of two or more of such items, and also includes any such item in processed form, and further includes Gur, Rab, Shakkar, Kandsari and jaggery\". ", "Schedule G of the said Act deals with \"Animal Husbandry\". Serial No. 11 thereunder includes 'hides and skins'. The question which had been raised in the Writ Petitions and which is raised here is whether the term 'hides and skins' includes 'tanned leather'. Mr. has submitted that admittedly the term 'tanned leather' has not been used either in the Act or in the Schedule. He admits that under Section 2(a), not just the items which have been specified in the Schedule but also an admixture of two or more such items or any of those items in a processed form, would also be included. He, however, submits that tanned leather is not 'hide or skin' and is not derived by processing 'hide' or 'skin'. He submits that 'tanned leather' is a manufactured commodity. He submits that \"tanned leather\" is an entirely different commodity from 'hide' or 'skin'. In support of his contention that 'tanned leather' is a different commodity from 'hide' and 'skin' he relies upon a Judgment of the Constitution Bench of this Court in the case of reported in 1964 (8) S.C.R. ", "217. In this case the Petitioners were dealers in skins in the State of Madras. They purchased raw skins from places both within and outside the State of Madras, tanned those skins and sold them through their agents in Madras. They were assessed to sales tax under the provisions of the Madras General Sales Tax Act, 1939 and under rules 16(2)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules. They filed the Petition under Article 32 contending that Section 2 of the Madras General Sales Tax (Special Provisions) Act, 1963 was ultra vires the Constitution. That challenge was upheld on the ground that Section 2(1) discriminated against imported hides and skins and local hides and skins. It was however held that Rule 16(1) did not become invalid because Rule 16(2) had been held to be invalid. Under the Rules tax was levied on sale of hides and skins in raw condition but no tax was levied on sale of hides and skins in tanned condition. Therefore, the Rules themselves made a distinction between hides and skins in raw condition and hides and skins in tanned condition. It was contended that hides and skins whether tanned or untanned constituted one commodity and, therefore, there could be no tax on sales of hides and skins in raw condition when there was no tax on sale of hides and skins in tanned condition. It was held that they were two different commodities and constituted two separate categories for purposes of taxation. It was so held because the two were treated differently in the Rules. Reliance was also placed upon the authority in the case of . reported in 1998 (1) S.C.C. 437. This again was a case under the T.N. General Sales Tax Act, 1959. The question here was whether raw hides and skins and dressed hides and skins were different commodities. The following the decision in () held that dressed hides and skins were different goods from raw hides and skins. It may be noted that it was so held in the context of the definition as given in Item 7 of the Second Schedule of the said Act, which provided both for raw hides and skins as well as dressed hides and skins. Thus the Act itself made a distinction between raw hides and skins and dressed hides and skins. It is on that basis that the held that they were not the same commodity. Mr. also placed reliance in the case of reported in AIR 1994 S.C. 64. This was a case under the Central Sales Tax Act and the question for consideration was whether the term \"Wheat\", within the meaning of Section 14(i)(iii) of that Act, included \"flour, maida and suji\" which were derived from Wheat. It was held that flour, maida and suji are different and distinct goods from wheat. It was held that flour, maida or suji were not included in the Act and they would not fall within the term \"Wheat\" as defined in the Act. It must immediately be noted that the Act only contained the term \"Wheat\". That Act did not cover \"Wheat\" in its processed form. It is because the Act did not cover \"Wheat in a processed form\" that the held that flour, maida and suji were not wheat. Reliance was also placed upon the judgment of this in the case of . reported in 2000 (6) S.C.C. 264. In this case the question was whether fruit drinks \"Frooti\" and \"Appy\" fell within the term agricultural produce under the Bihar Agricultural Produce Markets Act, 1960. This held that even though these \"Frooti\" and \"Appy\" were manufactured out of mango pulp and apple concentrate but after the mango pulp and apple concentrates were processed and beverages were manufactured, the products becomes entirely different from the fruits that is the mango and apple. It was held that even though the basic character of the mango pulp and apple concentrate may be present in beverages, but the end products were not fruits which were specified in the Schedule. On this basis it was held that the products like \"Frooti\" and \"Appy\" were not covered by the Item Agricultural produce as defined in of that Act. Mr. also relied upon the case of reported in AIR (1992) S.C. 224 for the proposition that there is a difference between 'manufacture' and 'processing'. In this case the question was whether an industry which manufactures sugar from sugar cane was covered by Entry 15 of Schedule I to the Water (Prevention and Control of Pollution) Cess Act , 1977. The relevant Entry under which the industry was sought to be brought in was item 15 of Schedule I which reads as \"processing of animal or vegetable products industry\". This held, in para 13, that the term 'processing' as normally understood would mean that even after processing the product would retain its character. The held that 'processing' essentially effectuates a change in form, contour, physical appearance or chemical combination or otherwise by artificial or natural means. The held that a 'manufacture' implies a change but that every change was not 'manufacture'. The held that for 'manufacture' something more was necessary and that there must be a transformation and a new and distinct article must emerge having a distinctive name, character or use. Based on this authority it was submitted that tanned leather was a different article and a distinctive commodity having a distinctive name, character and use and that tanned leather was a manufactured item. In our view the authority would, if anything be against the Appellants. Tanned leather retains its basic character namely, it remains hide or skin, though there is some change in form and physical appearance. Lastly reliance was placed upon the case of and another, etc. v. , etc. reported in AIR (1963) S.C. 791. This was a case under the Central Excises and Salt Act and the question was whether the Raw oils which were purified but not deodorised in the process of manufacture of Vanaspati was covered by the expression \"non- essential vegetable oils\" in Item 12 of Schedule I of that Act. In this case it was held that processing cannot be equated to manufacture. It was held that the word \"manufacture\" is generally understood to mean as \"bringing into existence a new substance\" and does not mean merely \"to produce some change in a substance\". In our view this authority would also show that in fact there is no manufacture but mere processing of hides and skins to bring them into a tanned state. Based upon the above authorities Mr. submitted that 'tanned leather' was not an 'agricultural produce' inasmuch as it is a different item or commodity from hide and skin and it is an item which is not a processed form of hide or skin but an item which is manufactured. He submits that for the above reasons the Judgment of the High cannot be sustained and requires to be set aside. As against this Mr. submitted that definitions and meanings given in other Acts or in the context of other Acts can be of no assistance. He submits that one has to look at the provisions of the said Act itself. He submitted that the term 'agricultural produce' had been given a wide meaning in Section 2 (a) of the said Act. He points out that it is a definition which is not an exhaustive definition but is an inclusive definition. He submits that any item would be an 'agricultural produce' if it is specified in the Schedule or if it is an admixture of two or more items specified in the Schedule or if it is a processed form of any of the items specified in the Schedule. He points out that in all Acts are enacted in Hindi even though an equivalent English version is printed. He points out that in the Hindi version the terms used are 'Khal Va Chamra'. He submits that a dictionary meaning of the term 'Chamra' is leather and therefore the Hindi version clearly shows that leather was meant to be included. He admits that if there was a conflict between an Hindi version and an English version then by virtue of Article 384 of the Constitution of India the English version would prevail. He submits that if there is no conflict, then the Hindi version can be looked at in order to determine any ambiguity or to find out if any item is included or not. In support of his submission he relies upon the case of ., etc. reported in 1984 (4) S.C.C. 516. This was a case under the said Act. The question was whether 'Dal' of legume is an agricultural produce and therefore eligible to market fee. In that case it had been argued, as in the present case, that as 'Dal' has not been specified in the Schedule and it was a distinct commodity no market fee could be levied. This held that to resolve a controversy of this nature one has to seek light from the definition of expression 'agricultural produce' as set out in Section 2(a) of the Act. This held that no resort can be taken to decisions under entirely different statutes, such as the sales tax laws, to find out whether the product were same or two different and independent products commercially so recognised. It was held that it was an indisputable canon of construction that where an expression is defined in the statute, unless there is anything repugnant in the subject or context, the expression had to be construed as having the same meaning assigned to it in the dictionary clause of the statute. It was held that 'Dal' was nothing else but a whole grain split into two folds in its processed form acquired by manufacturing process and that was therefore an agricultural produce. After so holding this held as follows : \"14. This very conclusion can be reached by a slightly different route. As is well-known, the legislative enactments in the State of are enacted primarily in Hindi language and its official and authentic translation in English is simultaneously published. Bearing this in mind, we turn to the notification dated April 11, 1978 specifying legumes therein enumerated as specified agricultural produce for various Market Areas. The heading under which various legumes are enumerated is 'Dwi Daliya Utpadan'. This tongue twister was explained to us to mean that legume itself is Dwi Daliya Utpadan i.e., the whole grain is made of two folds. Ek daliya grain is without a fold. Dwi Daliya is a grain composed of two folds and certainly not many folds. Concise Oxford Dictionary specifies the meaning of legume to be \"fruit, edible part, pod, of leguminous plant; vegetable used for food,\" and 'leguminous' to mean \"like of the botanical family of pulse\". And in common parlance 'pulse' connotes legume and denotes dal of legume. Reverting however, to the heading under which legumes are enumerated in 1978 notification, it must be confessed that it clearly connotes the meaning to be given to the whole grain and denotes dal i.e. split folds as specified agricultural produce. The Hindi protagonists used the expression 'Dwi Daliya Utpadan' meaning thereby double folded grain called Gram, Peas, Arhar, Moong etc. on a strict construction, the two dals i.e. two parts forming the whole grain both are comprehended in the expression 'Dwi Daliya Utpadan'. Therefore, it is crystal clear that while enumerating legumes in the Schedule and reproduced in the 1978 notification to make them specified agricultural produce, the framers intended to include both the grain as a whole and its split parts the dal. And when the agricultural produce enumerated in the Schedule such as Gram including its processed part is reproduced in the notification as Dwi Daliya Utpadan, the dal of each of the legumes therein mentioned became specified agricultural produce.\" ", "It is thus to be seen that the derived support for its conclusion by looking at the Hindi version of the said Act on the ground that it was well known that in the State of U.P. enanctments were in Hindi language. Reliance was also placed upon the case of . reported in 1985 (2) S.C.C. 485. This was also a case under the said Act. The question before the was whether 'Khandsari sugar' manufactured by an open pan process was an agricultural produce within the meaning of the said Act. In this case also based upon a Sugarcane (Control) Order, 1966 and U.P. Khandsari Sugar Manufacturer's Licensing Order, 1967, both of which define 'khandsari sugar' it had been contended that 'khandsari sugar' was a distinct and a separate commodity from 'khandsari' as defined in Section 2(a) of the said Act and therefore no market fee could be levied on 'khandsari sugar'. This contention was negatived and it was held that 'khandsari' was a genus and 'khandsari sugar' was a species and in the market both were merely known as 'khandsari'. It was held that the word 'khandsari' was wide enough to cover 'khandsari' produced by any process regardless of its quality or variety. It may be mentioned that a challenge to Section 2 (a) on the ground that it was discriminatory and violative of Article 14 was also repelled. Reliance was also placed upon the case of . reported in 1993 Supp (3) S.C.C. 361(II). This again was a case under the said Act. The question was whether 'gur-lauta', 'raskat', 'rab- galawat' and 'rab-salawat' were 'agricultural produce' under the said Act. In this case it was noted that sugarcane was an agricultural produce out of which juice was extracted. The juice was then thickened by dehydration and when it reached a particular pigment it took the form of 'rab' which is a semi-solid form of the sugarcane juice. After boiling this 'rab' was put in a crystalliser where it was allowed to get cooled and crystals were formed which were then rotated in the crystalliser. The crystallised rab was then put into centrifugal machines in which through the process of infusion of sulphur, the sugarcane juice was cleaned and whitened. The 'rab' which was not put into the centrifugal machine but which was dehydrated and allowed to be hardened by the open pan process became 'gur', which was sold for home consumption. The 'rab' which was not allowed to be hardened was also sold in semi-solid form but certain persons who wanted to make further profits put this 'rab' into centrifugal machines and by the process of infusion of sulphur they obtained 'khandsari' in the dry powder/crystallised form and the waste of 'rab' which was obtained in the liquid form known as 'molasses'. 'Molasses' was further utilised by many people by boiling in the open pans and the same was again re-processed by cleaning and dehydrating and later by sulphitation was taken in powder form. This then was also sold in the market as inferior quality called 'rab-galawat'. It was held that there was a further inferior quality of rab called 'rab-salawat'. The contention was that 'gur-lauta', 'raskat', 'rab-galawat' and 'rab-salawat' were all different commodities which were not the same as 'gur' or 'rab' and that therefore no market fee could be levied on those commodities. This held that a wide interpretation had to be given to Section 2(a) of the said Act as the meaning was exhaustive and not restricted to the items included in the Schedule. It was held that items which came into being in a processed form would be included. It was held that these items were 'agricultural produce' and market fee could be levied on these items. Mr. then relied upon the case of State of Tamil Nadu etc. vs. etc. reported in 1989 (1) S.C.C. ", "724. He clarified that this was a case under the Central Sales Tax Act and that he was not saying that this would therefore be an authority for considering the definition of the term \"agricultural produce\" under the said Act. He submitted that in this case certain opinions of as well as glossary of terms published by had been reproduced. He stated that he was merely bringing those portions of the judgment to the attention of the . In this behalf he showed to the the paragraphs 6, 9, 10, 11 and 13, which read as follows : \"6. Turning to coloured leather, we may, at the outset, refer to a very important circumstance referred to by the respondents. When the CST Act came into force on April 1, 1957, a question was raised regarding the meaning of the expression 'hides and skins in dressed state' used in Section 14 . The matter was referred to the leather development wing of which gave the following opinion : ", "Hides and skins are obtained from either slaughtered or dead animals. The raw hides and skins thus obtained are known to be in the Green State. These are easily putrescible; if proper precautions are not taken they would easily rot and decay. Since tanneries are not always located very near the source of raw hides and skins, the question of preserving them for a temporary period till they reach a tanning centre assumes importance. Raw hides and skins are 'cured' by either wet salting, dry salting or drying. In the 'cured state' the raw materials can be preserved for a temporary period. In the third stage of temporary preservation, the hides and skins are 'pickled'. During the next stage they are tanned in which state they can be preserved almost indefinitely. These tanned hides and skins are processed further to yield Dressed Hides and Skins which are ready for use. 'Dressed' or finished material could also be preserved almost indefinitely. ", "From the above, it will be seen that the expressing 'Hides and skins in the raw or dressed state' refers at one end to the raw material obtained from the slaughtered or dead animals and at the other to the tanned and finished material; the expression, therefore, seems to include the other intermediate stages indicated in the previous paragraphs. Dressing, according to the authoritative interpretations, would mean the conversion of tanned hides and skins by further suitable processing into leathers of different types which are ready for use (vide SBT/18(495)/14) of November 11, 1957). ", "9. Can it then be said that the view expressed above is clearly wrong? We think not; on the contrary, it is seen to be quite correct. The statutory expression refers to \"hides and skins in a dressed state\". The guidelines issued for identification of 'finished' leather for exports by () refer to as many as 19 operations or processes undergone during manufacture of 'finished leather' but 'dressing' is not one of them. A glossary of terms relating to hides, skins and leather published by the in 1960 contains the following definitions: ", "CRUSTS: (Crust Leather) - Tanned hides and skins without any finish. ", "CURRYING: A series of dressing and finishing processes applied to leather after tanning in the course of which appropriate amounts of oils and greases are incorporated in the leather to give it increased tensile strength, flexibility and water resisting properties. ", "DRESSED HIDES: Tanned hides, curried or otherwise finished, for various purposes, such as belting, harness and saddlery, travel goods and for upholstery. ", "DRESSING LEATHER: Vegetable tanned hides which may be dressed to suit the purpose for which they are to be used, such as for harness, saddlery and other mechanical purposes. ", "LEATHER: The skin or hide of animals prepared by tanning, which still retains its original fibrous structure more or less intact, but from which hair or wool may or may not have been removed and which has been treated so as to be imputrescible even after treatment with water. ", "10. The earlier glossary of such terms published by defines 'dressing' as a \"general term for the series of processes employed to convert certain rough tanned hides and skins and/or crust leather into leather ready for use\". Also, \"Leather\" is defined as \"a general term for hide or skin which still retains its original fibrous structure more or less intact, and which has been treated so as to be imputrescible even after treatment with water\". The hair or wool may or may not have been removed. Certain skins, similarly treated or dressed, and without the hair removed, are termed 'fur'. The Dictionary of Leather Terminology published by , describes leather as \"the hide and skin of any animal or any portion of such skin, when tanned, tawed or otherwise dressed for use\". ", "11. The above definitions show that hides and skins acquire the name of 'leather', even if the hair or wool has not been removed therefrom, as soon as they receive some treatment which prevents them from putrefaction after treatment with water. Dressing is a stage much later than tanning. Indeed, from the definitions quoted above, it will be seen that it is practically the same as giving finishing touches to the leather and making it suitable for the manufacture of particular types of goods. ", "13. The same conclusion is further borne out by the literature referred to before us by . Volume 7 of , under the word \"dress\", explains that the verb has various applications which can be deduced from its original meaning and that \"it is thus used not only of the putting on of the clothing but of the preparing and finishing of leather \". Volume 17, under the head \"leather\" details the various processes applied in the treatment of hides and skins at all stages, pre-tanning, tanning and post-tanning. Dyeing or colouring is a process which follows tanning but precedes \"finishing: (i.e. dressing) in order to make it suitable for the purpose which it is required in commercial usage. Part V of the \"Wealth of India\", a publication of (1966), dealing with leather under \"Industrial Products\" explains that \"hides and skins are liable to putrefaction and loss unless suitably treated and converted into leather\". Structurally, hides and skins have a thick middle layer called corium, which is converted to leather by tanning. The operations involved in leather manufacture however fall into three groups. Pre- tanning operations includes soaking, liming, de- liming, bating and pickling, and post-tanning operations are splitting and shaving, neutralising, bleaching, dyeing, fat-liquoring and stuffing, setting out, samming, drying, staking and finishing. These operations bring about Chemical changes in the leather substance and influence the physical characteristics of the leather, and different varieties of commercial leather are obtained by suitably adjusting the manufacturing operations. These processes need not be gone into in detail but the passages relied upon clearly show that hides and skins are termed 'leather' even as soon as the process of tanning is over and the danger of their putrefaction is put an end to. The entry in the CST Act , however, includes within its scope hides and skins until they are 'dressed'. This, as we have seen, represents the stage when they undergo the process of finishing and assume a form in which they can be readily utilised for manufacture of various commercial articles. In this view, it is hardly material that coloured leather may be a form of leather or may even be said to represent a different commercial commodity. The statutory entry is comprehensive enough to include the products emerging from hides and skins until the process of dressing or finishing is done.\" ", "Mr. submitted that tanned leather would be covered by the definition of the term \"Agricultural produce\" as defined in Section 2(a) of the Act. He submitted that it was merely a processed form of \"hide and skin\". He submitted that cases relied upon by the Appellants were of no help as all of them were under taxing statutes and were merely interpreting terms in the context of the definitions given in those statutes. We have considered the arguments of both the parties. In our view it is clear that the interpretation has to be on the basis of the expression 'Agricultural produce' as set out in Section 2(a) of the said Act. In so determining decisions based on different statutes such as Sales Tax Laws can be of no assistance. All the cases relied upon by Mr. are cases under the taxing statutes where the interpretation has been given on the basis of the terms as defined in those statutes. A perusal of Section 2(a) of the said Act makes it clear that an agricultural product would be a product which is specified in the Schedule or one which is admixture of two or more items and would also include any such item in a processed form. In our view it makes no difference, for the purposes of the said Act, that the concerned item is a different commodity from the one which is included in the Schedule. It is possible that by virtue of an admixture of two or more items or by virtue of processing a different commodity or item may come into existence. Even though a different commodity may come into existence, it would still be an 'Agricultural produce'. This is best illustrated by which is in Schedule A, Item VIII at Serial No. 14. From , \"rab\" and \"gur\" are manufactured. They are already different commodities or items. Yet they are all included. The specific inclusion of items like \"gur, rab, shakkar, khandsari and jaggery\" is to make it clear that merely because it becomes a different item or commodity it is not excluded. We see no reason to go into the difference between 'manufacturing' and 'processing'. In the strict sense of the terms there may be a difference. However, we are not required to go into these differences as, in our view, it is very clear, from what has been set out by the Appellants themselves in their affidavit that for hide and skin to be converted into leather or tanned leather all that is required is a process. It is a process of cleaning, curing and adding preservatives. That it is a process has been held by this Court in the case of , etc. (). We are also of the view that the finished product i.e. 'tanned leather' even though it may have changed in physical appearance or chemical combination and even though it may commercially be a different item still remains a 'hide' or a 'skin'. For this reason we are of the opinion that there is no illegality or infirmity in the judgment of . Even otherwise our above view is supported by the Hindi version of the definition. As has been set out in the case of (), it is well known in U.P. all legislations are in Hindi. Of course an English version simultaneously published. Undoubtedly if there is conflict between the two than the English version would prevail. However, if there is no conflict then one can always have assistance of the Hindi version in order to find out whether the word used in English includes a particular item or not. In the Hindi version the word used is 'Chamra'. There can be no dispute that the term 'Chamra' would include 'leather' in all its forms. In this view of the matter the Appeal stands dismissed. There will, however, be no order as to costs."], "relevant_candidates": ["0000075422", "0000096040", "0000625579", "0000759521", "0000774518", "0001105204", "0001124411", "0001295207", "0001927285"]} {"id": "0000241245", "text": ["JUDGMENT ", "1. In this case the Subordinate Judge has refused to execute a decree passed on the original side of this Court, upon the ground that the decree-holder had fraudulently brought a suit on the original side of this Court when this Court had no territorial jurisdiction to pass a decree in the suit. He has purported to act upon the Full Bench decision of this Court in the case of . What has happened is this: the decree-holder, as plaintiff, instituted a. suit on the original side of this Court for recovery of a sum of money from the judgment-debtors on giving up her charge on a certain property under a mortgage bond which the judgment debtors had executed In the plaint that was filed, it was definitely averred that the money had been advanced in Calcutta and that the mortgagors had agreed to repay the loan with interest in Calcutta, as provided in the deed. In the plaint it was definitely stated that the cause of action for the suit had arisen in Calcutta. As the defendants who were then residing outside the local limits of the ordinary original civil jurisdiction of this Court, the plaintiff asked for and obtained leave to institute the suit under Clause (12), Letters Patent. The suit was not contested and an ex parte decree was obtained which formed the subject-matter of the execution and in connexion with which, the order appealed from has been made by the Subordinate Judge. The Subordinate Judge has, upon certain materials to which he has referred in his judgment, come to the conclusion that there was. nothing to show that there was any contract for the repayment of the money in Calcutta as was the plaintiff's case; and; he has held that there is no satisfactory evidence to show that the money was advanced in Calcutta. On these grounds he has come to the conclusion that the suit was fraudulently instituted on the original side of this Court and the said Court had no territorial jurisdiction to pass the decree, ", "2. We are clearly of opinion that it was; not within the competency of the executing to challenge the validity of the decree which this on its original side had made, upon the ground on which the order of the Subordinate Judge has been made. It is quite true that an executing is competent to refuse to execute a decree if it finds that the decree was made without jurisdiction. But the limits of the powers of an executing in this respect have been very definitely prescribed by the decision of this in the case of (supra) on which the Subordinate Judge purports to have proceeded but which, in our opinion, he ha9 entirely misappreciated. What has been laid down in that case is this: ", "Where a decree presented for execution was made by a which apparently had not jurisdiction, whether pecuniary or territorial or in respect of the judgment-debtor's person, to make a decree, the executing is entitled to refuse to execute it on the ground that it was made without jurisdiction. Within these narrow limits, the executing is authorized to question the validity of a decree. ", "3. The word \"apparently\" used in connexion with the proposition laid down by this , is a word which must always be very carefully kept in view. What the proposition means is that the executing would be competent to refuse to execute the decree only when on the face of the decree it would appear that the which passed it had no jurisdiction. When we say 'the decree\" we mean the decree and the papers relevant for the purpose of understanding it. The proposition does not mean that, if there is a clear statement upon the plaint which gives the jurisdiction to entertain a suit, and if upon the basis of that jurisdiction the decree is passed by the without there being a challenge by the defendant as regards the territorial jurisdiction of the to pass the decree, it remains open to the defendant to question the jurisdiction of the after the decree has been made and in the course of its execution. That was exactly what was intended to he guarded against by the decision which passed in the case referred to above. ", "4. We are of opinion that the learned Judge's order is entirely wrong We accordingly allow the appeal and set aside the order appealed against, and direct that the execution be entertained and dealt with in accordance with law. The appellant is entitled to her costs in this appeal. Hearing fee is assessed at three gold mohurs. ", "5. The record must be sent down as early as possible."], "relevant_candidates": ["0000396208"]} {"id": "0000256394", "text": [", J. ", "1. The petitioners have been convicted of an offence punishable under Section 188, Penal Code , for disobeying an order made by the Sub-divisional Magistrate of Barrackpore under Section 144 , Criminal P.C. The facts which give rise to the prosecution are briefly as follows: It is said that communal tension had been aroused in the locality in connexion with a strike. After setting out the matters which gave him jurisdiction, the Sub-divisional Magistrate passed an order under Section 144 . Altogether that order contained three directions and the petitioners are alleged to have dis. obeyed the third which was in these terms: ", "That no public meeting shall be held in any area in the sub-division so long as this order is in force except on special permission from me which must be applied for at least 24 hours before the. said meetings are held. ", "2. On 9th December last, the officer-in-charge of the thana at Titagarh was informed that petitioner 1 and others had come to Titagarh and were holding a meeting in front of a certain dispensary. He went to the spot with some police and found petitioner 1 addressing a crowd. He ordered the crowd to disperse as in his opinion they were violating the order made by the Magistrate. The contention of the prosecution is that in taking this action the petitioners were guilty of an offence punishable under Section 188 , Penal Code . They were convicted by the Magistrate of Barrackpore. As their appeal to the Sessions Judge was dismissed they obtained this rule. The rule was pressed on two grounds: (1) The order itself is illegal. (2) That there is no evidence to show that the petitioners had any knowledge of it. The first ground is based upon Clause (3) of Section 144 , Criminal P.C., which is in these terms: ", "An order under this Section may be directed to a particular individual, or to the public generally when frequenting or visiting a particular place. ", "3. This particular order was addressed to the public when visiting any part of the Barrackpore sub-division. In support of this ground, Mr. contended that the scope of the order was far too wide and drew a distinction between a particular place and an area. In support of his contention, he relied upon the cases in In re D.V. Belvi (1931) 18 A.I.R. Bom. 325 and (1931) 18 A.I.R Bom. 513. On the other hand, the learned Deputy Legal Remembrancer relied upon the case in v. Emperor (1934) 21 A.I.R. Bom. 375. In my opinion, it is necessary to distinguish carefully between the jurisdiction of the Magistrate to make an order and a possible practical difficulty in showing that it has been disobeyed. It does not follow that because it is difficult for the to secure a conviction that the order itself was made without jurisdiction. If we apply the test laid down by the learned Judges in those two Bombay cases, it would be very difficult to say where a place ends and an area begins. It is obvious that a line would have to be drawn somewhere and for my part I shall find it very difficult to draw such a line. Nor is the matter of much practical importance: for example, if an area may be said to contain 150 places, She Magistrate could pass 150 orders in identical terms and the result would be exactly the same. In our opinion, the order is a definite order and it does not contravene the provisions of Section 144 . ", "4. On the second point, the learned Deputy Legal Remembrancer conceded that he had no evidence apart from the evidence relating to what took place at the actual meeting. It is said that the petitioners knew of the order because they were told of it by the Sub-Inspector while the meeting was actually going on. The evidence on the point is extremely scanty and is to be found in the deposition of P.W. 1, P.W. 3 and P.W. 4., P.W. 1, the Sub-Inspector, says that he ordered the crowd to disperse as they had assembled in violation of the order. The order was given in an audible voice and part of the crowd actually dispersed. It is, of course, difficult for him to say whether the order was audible to other persons or not. P.W. 3, the Town Inspector, corroborates this account of the action taken by the officer-in-charge of the and adds that petitioner 1 and five other persons were addressing the meeting at the time. P.W. 4 merely says that the police arrived and began to move people telling them that there was a Section 144 Order. It appears therefore that his version is not quite the same. From this evidence it is abundantly clear that no personal communication was made to any of the petitioners. There is no distinct evidence as to the relative positions of the petitioners and the officer in the crowd. The learned Judge did not consider whether it necessarily follows that petitioner 1 heard what was said by the Sub-Inspector at a time when he himself was actually delivering a speech. The prosecution really did not take sufficient trouble to see that the evidence on this very essential point was sufficient and clear. ", "5. Then in the second place the order itself is not very happily worded. It does not clearly forbid attendance at a meeting or making speeches at a meeting. The use of the words 'no public meeting shall be held' seems to suggest something in connexion with the organization of a meeting. From the evidence it appears that the petitioner, did nothing more than behave like a Hyde Park orator. The actual order is capable of more interpretation than one. Before it can be said that the petitioners had knowledge of the order, it must be shown that its terms were communicated to them. Instead of doing that, the Sub-Inspector merely gave his own interpretation of it, which is quite a different thing. We must accordingly accept the contention raised in the second ground that there is no evidence upon which it can be held that the petitioners had any knowledge of the order. The rule is accordingly made absolute, the convictions and sentences are set aside and the petitioners are discharged from their bail. ", ", ", "6. I agree."], "relevant_candidates": ["0000774626"]} {"id": "0000270817", "text": ["JUDGMENT , J. ", "1. One was a Dharmakartha of the Srirangam temple and the right of his family to a place in the is still reserved in the scheme framed by in (1915) I.L.R. 39 Mad. 700 at 721 : 30 M.L.J. 39. He had also certain offices in the temple with emoluments and perquisites attached to them. In 1870 the office of the Dharmakartha and certain offices were held by three descendants of the said , vis., (1) Sri (2) and (3) who then constituted an undivided Hindu family. Owing to dissensions in the family in 1870 they became divided in status and later effected a partition of their properties including the offices in a certain manner. Ex. Ill dated 1st January, 1876, which evidences the division 'provides, so far as the is concerned, enjoyment by turns by the three members in rotation each for one year. The actual arrangement in the document was only for three years. But it is in evidence and not disputed that it was acted upon up to the date of the suit by the representatives of the various branches. In 1924 by a document, Ex. V dated 7th February, 1924, and styled deed of partition, four members of the family, representatives of the three branches who were parties to the deed of 1876, purported to effect a complete partition of all that they had kept and enjoyed in common up to that date. They affirmed the arrangement of 1876 and stated that the properties were being enjoyed in accordance therewith up to that date. one of the parties to Ex. V died leaving no issue and the first defendant became his heir under the Hindu law in preference to the plaintiffs. It may be mentioned that the plaintiffs 1 and 2 and the first defendant were parties to Ex. V. The plaintiffs have now filed the suit out of which this second appeal arises praying for two reliefs, vis., (1) for \"declaring that the plaint schedule offices, rights and perquisites lapse by survivorship to the plaintiffs and the defendants 1 and 2 on the death of the said Vedavyasa , on 12th November, 1927, and as a consequential relief (2) for directing (a) the first and second defendants to enjoy the plaint schedule offices, rights and perquisites with the plaintiffs in equal moities by turns or in any other manner the Court may deem fit to order, giving necessary directions therefor to the first, second and third defendants \". ", "2. Both the Courts have dismissed the suit holding that the arrangement entered into in 1876 and 1924 were binding on the parties in virtue of which the first defendant is entitled to enjoy the share of in preference to the plaintiff. ", "3. Mr. on their behalf has raised three contentions: One on a question of fact and two on questions of law namely (1) the office of Dharmakarthaship was in fact kept undivided and plaintiffs have succeeded to the share of by right of survivorship along with defendants 1 and 2. (2). and the mirasi offices are inalienable and impartible. (3) Whatever may be said of religious offices, the office of dharmakarthaship being in the nature of a bare trusteeship could not be the subject of a partition and every descendant succeeds to the trusteeship in his own right, not as a representative of another and any arrangement come to between the parties at one time could only bind them and not their successors. ", "4. The question of fact can be easily disposed of. The documents clearly indicate that the members of the family became divided in status and effected a complete division of all the properties including the office. In the document of 1876 no doubt provision was made only for three years in regard to the dharmakarthaship but it was illustrative of the future order in which the property was to be enjoyed by the several branches and for a period of nearly half a century it was so enjoyed. It must therefore be found that the office was divided and enjoyed by turns by the three branches in rotation in accordance with the arrangement of 1876. ", "5. The office of a trustee of a temple or a religious office therein is prima facie inalienable. It is also indivisible. In one sense it is true that where the office is held by many, it is a collective office. I may state at the outset that it is neither sound nor proper to think of such offices from the point of view of a bare trustee under English law. The conception of the office of a trustee in English law is not the same as the Hindu conception. In v. Balusami Ayyar (1921) L.R. 48 I.A. 302 : I.L.R. 44 Mad. 831 at 839, 840 : 41 M.L.J. 346 (P.C.) when speaking of a trustee of a temple, their Lordships of the Privy Council observed; ", "It has also to be remembered that a trust in the sense in which the expression is used in English law is unknown to the Hindu system pure and simple...in no case is the property conveyed to or vested in him nor is he a trustee in the English sense of the term. ", "6. The office of a trustee has always been prized as a valuable possession or property much more than tangible property. The succession to a religious office or the office of a trustee of a temple is regulated according to the course prescribed by the founder expressed or implied or according to the usage which is again supposed to be the index of the intention of the founder. Usage has often been resorted to for making the office heritable, v. (1818) 2 Morley's Digest 146 , to make it also partible under certain conditions, Mitta Kunth v. (1874) 14 Bengal L.R. 166, v. (1882) I.L.R. 6 Bom. 298 or to make it alienable in the line of heirs, v. (1882) I.L.R. 6 Bom. 298 v. (1898) I.L.R. 23 Bom. 131 (1935) 68 M.L.J. 295. The intention of various pious donors and benefactors in creating such offices and endowing properties to religious or charitable purposes has always been and must be deemed to have been in accordance with the notions and known usages of the community. Even where the office of trusteeship is hereditary - and it may be held by a single family or a number of families. Vide v. (1876) L.R. 4 I.A. 76 : I.L.R. 1 Mad. 235 (P.C.). As observed by , J. in (1917) I.L.R. 40 Mad. 612 at 628 : 32 M.L.J. 597 (F.B.) the institution of hereditary trusteeship is held to rest on the intention of the donor either expressed in the instrument of trust or to be presumed from the usage. In v. (1876) L.R. 4 I.A. 76 : I.L.R. 1 Mad. 235 (P.C.) their Lordships of the Privy Council observed; ", "The unknown founder may be supposed to have established this species of corporation with the distinct object of securing the due performance of the worship and the due administration of the property by the instrumentality and at the discretion of four persons capable of deliberating and bound to deliberate together; he may also have considered it essential that those four persons should be the heads of particular families resident in a particular district open to the public opinion of that district, and having that sort of family interest in the maintenance of this religious worship which would insure its due performance. ", "7. The in dealing with these hereditary and charitable offices have always kept two considerations in view : (1) the intention of the founder must be given effect to and should not be frustrated (2) the interests of the trust are paramount and any thing injurious to the interests of the trust cannot be countenanced. So, whether it is a case of a partition or an alienation, the courts have subordinated questions relating thereto to those two considerations. The prohibition against alienation for example was founded on the principle that to make the office the subject of a bargain was to defeat the intention of the founder (1891) I.L.R. 15 Mad. 183 : 2 M.L.J. 19 and it was by the application of this principle that even an alienation for consideration to an heir was forbidden. The question of partibility has again been viewed from the same stand point. , J. observed in v. (1882) I.L.R. 6 Bom. 298. ", "Hereditary offices, whether religious or secular, are no doubt treated by the'. Hindu text writers as naturally indivisible; but modern custom whether or not it be strictly in accordance with ancient law, has sanctioned such partition as can be had of such property by means of a performance of the duties of the office and the enjoyment of the emoluments by the different co-parceners in rotation. ", "8. No doubt these observations were made with reference to a religious office but it has also been extended to the case of a bare dharmakarthaship without any emoluments attached thereto. As observed by , J. in (1903) I.L.R. 27 Mad. 192 : 13 M.L.J. 341 The juristic basis for the usage and the custom above referred to is not strictly the legal right of partition of ordinary joint family property, but the equitable right to settle a suitable scheme for the efficient and satisfactory management of trusts the duration of the turns of the several members in rotation being however fixed with reference to the law of partition. ", "9. Their Lordships of the Privy Council in (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 : 16 M.L.J. 265 (P.C.) (on appeal from (1903) I.L.R. 27 Mad. 192 : 13 M.L.J 341) observed: ", "The arrangement seems to have been a perfectly proper arrangement conducing to the due and orderly execution of the office. ", "In such a case, (where the office vests by descent in a number of persons) in order to avoid confusion or an unseemly scramble, it is not unusual, and it is certainly not improper, for the parties interested to arrange among themselves for the due execution of the functions belonging to the office in turn or in some settled order and sequence. There is no breach of trust in such an arrangement nor any improper delegation of the duties of a trustee. ", "10. Thus it will be seen that the principle of partition is permitted on the ground that the usage which sanctions it is wholesome for the efficient and smooth discharge of the duties of the office, where the office being hereditary in the family devolves on a number of co-trustees. So far as the trust is concerned, whoever manages the office by turns must be deemed to be managing on behalf of all and management by one of them in rotation is not considered to be adverse or exclusive to other co-trustees. ", "11. The question now arises, if partition is permitted how it is to be enjoyed by the several members thereafter. , J., in the very same case observes: ", "The usage and custom generally is that along with other properties the office also is divided in the sense that the office is agreed to be held and the duties thereof discharged in rotation by each member or branch of the family the duration of their turns being in proportion to their shares in the family property. Such a scheme of management may proceed either on the footing that the co-trustees are to continue as undivided members quoad the trust property or on the footing of being divided members, as in the case of the rest of the family property. In either case as between themselves their position will be that of co-trustees though on the death of any of them the devolution of his interest in the office will vary according as the scheme of management has been settled on the one footing or the other. ", "12. This view seems to be borne out both on principle and authority. In the case of religious offices with emoluments attached thereto, usage has always been to permit partition and heritability in the various branches, according to the laws of inheritance applicable to private property; but should such a principle also be extended to the case of a trusteeship where there are no emoluments attached thereto? In v. (1899) L.R. 27 I.A. 69 : I.L.R. 23 Mad. 271 : 10 M.L.J. 29 (P.C.) applied the Hindu law of inheritance to the trusteeship of a temple. Sir said: ", "In their Lordships' opinion the ruling in (1872) L.R.I.A. Supp. Vol. P. 47 is applicable to an hereditary office and endowment as well as to other immoveable property. ", "13. (treating the office as immoveable property.) It may be noticed Sir was a party to the decision in v. (1874) 14 B.L.R. 166 which recognised partition of an office. Lord assumes that the office of a temple descends according to the ordinary law of inheritance applicable. He says in (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 : 16 M.L.J. 265 (P.C.): ", "On 's death, the office devolved by inheritance on male descendants of his two wives. ", "14. Later on he says: ", "The office may become vested by descent in more than one person. ", "15. (1920) I.L.R. 44 Mad. 205 : 39 M.L.J. 403 where a widow of a divided member of a family was allowed to succeed to the management of a charity, in thatKattalai in a temple, His Lordship Chief Justice Wallis made the following observation: ", "It was next argued by Mr. that as the plaintiff is now the only male member in the junior branch, he is entitled to the right to the exclusion of the females. He relied upon (1863) 1 M.H.C.R. 415 and on v. (1877) I.L.R. 1 Mad. 343 for the position that the office of a trustee in a public institution is indivisible and that succession to it must be regulated as in the case of impartible estates. However much one may wish that such a rule of law should obtain in regard to the management of trusts, we are of opinion that the course of decisions in this , which has the sanction of , is opposed to this principle. (1923) I.L.R. 27 Mad. 192 : 13 M.L.J. 341 Sir , J., pointed out that the right of trusteeship in a public institution possessed by the members of a family, when it is hereditary, descends in the same manner as the right to the enjoyment of ordinary family property. ", "16. (1918) I.L.R. 41 Mad. 886 : 35 M.L.J. 196 (F.B.) it was held that a Hindu female was entitled to succeed to the office of archaka in a temple. Where succession according to the ordinary Hindu law is permitted in the case of a religious office there does not seem to be any objection to permit such a course of a descent in the case of a secular office like a bare trusteeship. In v. (1927) I.L.R. 52 Mad. 373 : 55 M.L.J. 757 J., after referring to (1915) 22 C.L.J. 404 observes: ", "When the office is held by a number of persons jointly, the right to the office on the death of any of the joint holders passes to his personal heirs, that is, to those who would be his heirs in respect of his separate property. ", "17. (1917) I.L.R. 40 Mad. 612 : 32 M.L.J. 597 (F.B.), , J., in dealing with the doctrine of reverter of an office of a trustee to the natural heirs of a founder observes that where a founder of a charity: ", "does not appoint another person to manage the properties so given, or settle a scheme for such management, as he is entitled to do at the time of the endowment and as a part of the same transaction, the natural presumption or the legal inference is that he intends to manage the property himself on behalf of the charity or reserves the management to himself. Such management may pass to his heirs by inheritance, just as a legal estate of inheritance may pass in England. ", "and he points out, citing the decision in (1913) L.R. 40 I.A. 97 : I.L.R. 35 All. 283 (P.C.), that: ", "the vesting of the management in accordance with rules of inheritance applicable to private property must from the very nature of the right, be subject to the condition that the devolution in the ordinary line of descent is not inconsistent with or opposed to the purpose the founder had in view in establishing the worship. ", "18. Once it is recognised that the office of trustee is property to which the rules of inheritance governing ordinary property are applicable, and it has been applied where the office has vested in a single person, on principle the same rule must govern the devolution of the turn of office which has become vested on division between the various members of the family. ", "19. Mr. relied on a number of decisions in support of his contention that this principle should not apply to the case of a bare trusteeship. The decision which he strongly relied on is that of in (1917) L.R. 45 I.A. 1 : I.L.R. 41 Mad. 296 : 34 M.L.J. 130 (P.C.), where their Lordships make the observation that (1903) I.L.R. 27 Mad. 192 : 13 M.L.J. 341 and (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 : 16 M.L.J. 265 (P.C.), dealt with a case of private trust. As has been pointed out by Wallis C.J., in (1920) I.L.R. 44 Mad. 205 : 39 M.L.J. 403, the observations of in that case which were purely obiter appear to have proceeded on some misconception as to the facts of that case and he pointed out that the decision of in (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 : 16 M.L.J. 265 (P.C.) , proceeded on the view that the trust they were dealing with was a public trust. ", "20. No doubt the approval of the decisions in v. (1864) 2 M.H.C.R. 19 and v. (1895) I.L.R. 20 Bom. 495, would seem to suggest that their Lordships would favour the rule of impartibility, but as pointed out by , the course of decisions has been opposed to this rule. Further their Lordships did not decide the question and the actual decision was rested on the facts peculiar to the foundation in question. Sir observed: ", "It is unnecessary however to decide whether there is a general rule for the devolution of the management of charities of this class, because in their Lordships' view, there is sufficient indication in the documents and surrounding circumstances of this case that a devolution of the management to the heirs of the original donee is inconsistent with the purposes of the founder when he created the endowments. ", "21. (1894) I.L.R. 19 Mad. 211 , was another case relied on. But that case itself explains the principle upon which a partition will be permissible. The decision while it lays down that a renunciation or a waiver of a trust should not be permitted, enunciates the following principle: ", "If it was a mere arrangement for the more convenient management of the choultry, reserving to the plaintiff's brothers their right of control, and, if necesssary of resumption of actual management, then it might be said that there would be no interference with the supposed will of the founder and that the arrangement would be lawful. To that extent it seems clear that any co-parcener jointly entitled to management may waive his rights. ", "22. In every case of partition where several branches enjoy the office by turns there is no surrender or renunciation. It is always subject to the implied condition that the resumption of actual management can be availed of either by consent of parties or through and there is no question of divesting themselves of all control over the offices. As has been pointed out by their Lordships of in (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 at 288 : 16 M.L.J. 265 (P.C.), If he (a member) has any ground for attacking the management of the temple or the administration of the property attached to it, the s are open. ", "23. The case in (1925) I.L.R. 49 Mad. 116 : 49 M.L.J. 568 is distinguishable because it was found therein that impartibility and management by a single individual who was the eldest member of the family had been the rule from the foundation. ", "24. The decision in (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 : 16 M.L.J. 265 (P.C.), is itself an authority for the proposition that a family arrangement or a partition entered into by the several branches of the family must be given effect to so long as the interests of the trust are not imperilled. In this case the members of the family have acted upon the arrangement for nearly half a century and there is no reason why the arrangement should not be held binding on the representatives of the various branches. In a recent case and Stodart JJ., in (1935) 70 M.L.J. 262, following (1903) I.L.R. 27 Mad. 192 : 13 M.L.J. 341 and (1906) L.R. 33 I.A. 139 : I.L.R. 29 Mad. 283 : 16 M.L.J. 265 (P.C.), observed that: ", "the arrangement will be binding upon the parties thereto and their representatives till modified either by common consent or in some manner known to law. ", "25. In this case the plaintiffs themselves were parties to Ex. V and it was not open to disturb an arrangement which they affirmed and which they acted on. ", "26. The first defendant is therefore entitled to enjoy the turn of office of as also the various religious offices which fell to the share of in preference to the Plaintiffs. In the result the second appeal fails and should be dismissed with costs. ", "27. Leave refused."], "relevant_candidates": ["0000325317", "0000423161", "0000424047", "0000577658", "0001173428", "0001338641", "0001502516", "0001546983", "0001848445", "0001854454", "0001916574"]} {"id": "0000282592", "text": ["PETITIONER: ANAND PARKASH SAKSENA Vs. RESPONDENT: UNION OF INDIA & ORS. DATE OF JUDGMENT: 14/12/1967 BENCH: , R.S. BENCH: , R.S. WANCHOO, , J.M. MITTER, G.K. VAIDYIALINGAM, C.A. CITATION: 1968 AIR 754 1968 SCR (2) 311 CITATOR INFO : R 1976 SC2345 (16) RF 1980 SC1275 (24) ACT: Indian Administrative Service-I.A.S. Extension to s Scheme-Officer in the junior scale of pay if has a right to a post in the senior scale-All India Services (Discipline and Appeal) Rules 1955, r. 3-Filling of posts by non- officers, if penalty-I.A.S. Recruitment Rules, 1954, r. 4(3), if bad for excessive delegation-Regulation of Seniority Rules, 1954, r. 3(3)(b), Seniority of Special Recruits Regulation, 1960, regulation 3(3), if violative of Constitution of India, Arts. 14, 16. HEADNOTE: of was constituted in 1951 under the I.A.S. Extension to s Scheme. The included all senior posts. A number of junior and training posts were provided to be held by officers recruited to the cadre before they acquired the experience and seniority necessary to hold senior posts. The primary source for the initial constitution of the was the existing incumbents of . They were selected and included in three Lists. Officers in List I, were immediately appointed to the service Officers in List 11 were to be taken in the service only when found suitable and those in List III were not to be absorbed in the service. List 11 and III officers were counted against' senior posts but these posts held by them were excluded from the for the period they were held by those officers. The was to be maintained on a permanent basis by direct recruitment by competitive examination and promotion of Civil Service Officers and twenty-five per cent of the senior posts were reserved for the latter. The continued Co be governed by the Scheme until 1954 when the I.A.S. Recruitment, Seniority and Pay Rules were made. Rule 9(1) of the Rules provides for appointment of non-cadre officers to cadre posts, i.e. senior posts, if suitable cadre officers are not available and the proviso to the rule preserved the arrangement under the Extension to s Scheme for the holding of cadre posts by non- officers. Under Rule 9(1) of the Recruitment Rules twenty- five per cent of the senior posts are reserved for persons recruited under rule 8, i.e. by promotion of substantive members of and by selection of those who hold gazetted posts in connection, with the affairs of a . The Special Recruitment Regulations, 1956, made under rule 4 of the Recruitment of Rules, provides for recruitment by promotion to the Service by selection of persons serving in connection with the affairs of a . In the matter of seniority, the Regulation of seniority Rules, gives a promote from Civil Service the year of allotment of the junior-most direct recruit officiating continuously in a senior post earlier than the date of commencement of such officiation by the promotee. The seniority of Special Recruits Regulation,, 1960, adopts the formula applicable to promotees for fixing the seniority of those recruited by promotion under the Special Recruitment Regulations. The petitioner, a direct recruit by competitive examination,, was appointed to a junior post in the Service on April 2, 1952. He was originally allotted to , which along with the former and Madhya Pradesh s merged in the present L2 Sup CI/68-9 612 Madhya Pradesh constituted on November 1, 1956. He was not found suitable to hold a senior post till November 17, 1956, when. he was appointed to officiate in a senior post. At the time his appointment to the service there were no vacancies in the senior posts. Vacancies arose before he was appointed to officiate in the senior post and after. Some of the respondents who were officers of and the former Madhya Pradesh Civil Services were promoted before the integration of the cadres on November 1, 1956 to fill the vacancies against the twenty- five per cent quota and several non- officers were appointed under r. 9(1) of the Rules. Vacancies were also filled in by promotion under the Special Recruitment Regulations. In the gradation List published on January 1, 1966 all the respondents were shown as senior to the petitioner. In a writ petition, under Art. 32 the petitioner contended that (i) he had a right to hold a post in the senior scale of pay from April 2. 1952 to November 17, 1956, under the Rules and in tile light of this Court's decision in and the filling of the vacancies by non- officers amounted to withholding of promotion and penalty within the meaning of r. 3 of the All India Service (Discipline and Appeal) Rules. 1955; (ii) under the rules seventy-five per cent of the total number of senior posts was exclusively reserved for direct recruits and that in computing the twenty-five per cent quota officers in Lists 11 and III and special recruits had to be included; (iii) r. 4(3) of the Recruitment Rules which authorised to make regulation for special recruitment was bad on the ground of excessive deletation; (iv) r. 3 (3) (b) of the Regulation of Seniority Rules, 1954, made unjust discrimination between a promotee and a direct recruit in the matter of seniority by arbitrarily allotting a lower year of allotment to a promotee and therefore violated Arts. 14 and 16 of the Constitution; and (v) regulation 3(3) of the Seniority of Special Recruits, Regulation 1960, offended Arts. 14 and 16 inasmuch as the relevant rules and regulations set up an arbitrary double standard for a special recruit enlisted by promotion. HELD : Dismissing the petition. (i) The filling of a vacancy by a non- officer under r. 9 of the Rules does not infringe any right of the officer nor does it amount to withholding of Promotion or a Penalty within the meaning of r. 3 of All India Service (Discipline and Appeal) Rules, 1955. A Officer in the junior scale of pay cannot claim 'a right to fill a vacancy in the senior scale if he is not 'suitable and no officer junior to him is Promoted to fill the vacancy. The decision in 's case is distinguishable. That case only decided that the reversion of a , office, while officers junior to him continued in the senior scale amounted not only to reduction in rank but also to withholding of promotion. Rule 6 A(2) of the Recruitment Rules introduced in 1965 after the decision in 's case now makes explicit what was always implicit in r. 9(i) of the Rules. In the instant case no Officer junior to the Petitioner was promoted to the post be-fore his Promotion on November 17, 1956 and after Promotion he was neither reverted nor reduced in rank nor was his promotion withheld. [619 F-H: 620 E-F] P. C. v. Union of India, 4 S.C.R. 598. distinguished. 613 (ii) Seventy-five per cent of the senior posts may be filled by recruits other than those recruited by promotion or selection under r. 8 of the Recruitment Rules. Special recruits are appointed against the seventy-five per cent quota and rule 9(3)(b)(iv) added in 1965 makes explicit what was always implicit in r. 9(1) of the Recruitment Rules. Under the Extension. to Scheme officers in Lists II and III were not counted against the twenty-five per cent quota. Rule 9(3)(b)(iii) of the Recruitment Rules make it clear that in computing the twenty-five per cent quota the appointments of officers in List 11 will be excluded. [620 G, H] (iii) Assuming that the doctrine of excessive delegation of Legislative power applies to rules, r. 4(3) does not suffer from the vice of excessive delegation. in making .'he regulations under the rule is to be guided by the exigencies of the service and the advice of the Governments 'and (,he . There authorities are the best judges of the appropriate regulations to be made in the matter [622 A-C] (iv) Rule 3(3)(b) of the Regulation of Seniority Rules is not violative of Arts. 14 or 16 of the Constitution. The object of the rule is to fix the seniority of the promotees who obtained promotion after long service in , in relation to direct recruits. The 'rule attempts to strike a just balance between the- conflicting claims of the promotees and direct recruits. [622 F-G] (v) Regulation 3(3) of the Special Recruits Seniority Regulations is not violative of Arts. 14 and 16. Special recruits 'are neither direct recruits nor promotees. They form a distinct class. The regulation, properly adopts the formula applicable to promotees for fixing the seniority of special recruits enlisted by promotion so that in the matter of seniority all officers recruited from s 'are placed on the same footing. [623 A-C] JUDGMENT: ", "ORIGINAL JURISDICTION : Writ Petition No. 58 of 1967. Petition under Article 32 of the Constitution of India for the enforcement of the Fundamental Rights. , , and , for the petitioner. ", ", Solicitor-General, and for , for respondent No. 1. and , for respondents Nos. 2 to 18,, The Judgment of the Court was delivered by , J. The petitioner is a member of having been appointed to a junior post therein on April 2, 1952 on the basis of a competitive examination held by in the year 1951. He completed his probation on October 2, 1953. He was originally allotted to of which along with the former Vindhya Pradesh and Madhya Pradesh cadres, merged in the present Madhya Pradesh cadre of constituted on November 1, 1956. ", "614 ", "He was appointed to officiate in a senior post on November 17, 1956. In the gradation list published on January 1, 1966, hi,; number is 70. In this writ petition under Art. 32 of the Constitution he claims that (a) he had the right to hold a post in the senior scale of pay from April 2, 1952 up to November 17, 1956 under the relevant rules read in the light of the decision in (1) and that (b) he is entitled to a higher place in the gradation list. He asks for the issue of appropriate writs declaring his rights and giving him consequential reliefs. The cadre of : was constituted on June 1, 1951 under Extension to States Scheme. The cadre included all senior posts. A number of junior and training posts were provided, to be held by officers recruited to the cadre before the) acquired the experience and seniority necessary for holding senior posts. The initial constitution of the cadre was made from (1) the existing incumbents and (2) emergency recruits. The existing incumbents were considered to be the first and primary source of recruitment. They were selected by and divided in three lists. Officers in List I were considered fit for immediate appointment to the . Officers in List II were to continue to hold their present posts, their work was to be watched for 5 years and were to be absorbed in the as and when they were found fit. Officers in List III were to hold their present posts or posts of equivalent rank until they retired but they were not to be absorbed in the . The posts held by officers in Lists 11 and III were excluded from the cadre for the period during which they were held by those officers. The cadre was to be maintained on a permanent basis by (a) direct recruitment on the result of the competitive examination and (b) promotion from amongst officers of the State Civil . As in the case of the Provincial cadres, 25 per cent of the senior posts were earmarked for promotion of officers of the State Civil . ", "On June 1, 195 1, the number of senior posts in the cadre was 25. On selection by , 6 officers were placed in List I and were appointed to the Service from January 1, 1951. Four officers were placed in List II and 11 officers were placed in List III and they continued to hold their posts under the Extension to States Scheme.. The remaining 4 senior posts were held by 4 emergency recruits. On April 2, 1952, there was thus no available vacancy for the petitioner in the senior posts. As a matter of fact, 2 direct recruits senior to the petitioner were in the junior scale of pay. (1) [1964] 4 S.C.R. 598. ", "615 ", "In September 1954, framed the Cadre Rules, 1954, Recruitment Rules, 1954, Pay Rules, 1954 and Regulation of Seniority Rules, 1954 in exercise of its powers under s. 3(1) of the All India Services Act, 1951. These rules were amended from time to time. Under r. 2 (a) of the Cadre Rules, a cadre officer means a member of . Under r. 2(b), a cadre post means a senior cadre post under . Under r. 3, an cadre is constituted for each State or group of . Under r. 4, the strength and composition of each cadre is determined by regulations made by . Rule 8 provides that \"Save as otherwise provided in these rules, every cadre post shall 'be filled by a cadre officer.\" Rule 9(1) provides that \"A cadre post in a State may be filled by a person who is not a cadre officer if is satisfied (a) that the vacancy is not likely to last for more than three months; or (b) that there is no suitable cadre officer available for filling the vacancy.\" If a person other than a cadre officer is appointed to a cadre post for a period exceeding three months, the fact shall be reported to who may, on receipt of the report, direct to terminate his appointment and if he is likely to fill a cadre post for a period exceeding six months, must seek the advice of and in the light of its advice, give suitable directions to . It was provided that r. 9 would not affect the existing arrangements made by in connection with the Governments of Part B and the State of Vindhya Pradesh at the time of the initial constitution of the cadre for certain cadre posts to be filled by non-cadre officers. ", "Rule 3 of the I.A.S. Recruitment Rules, 1954 gives the cons- titution of the service. Rule 4 specifies the methods of recruitment. Sub-rule (1) of r. 4, as amended, provides that \"Recruitment to the Service, after the commencement of these rules, shall be by the following methods, namely: (a) by a competitive examination; (aa) by selection of persons from among released Emergency ed Officers and Short Service ed Officers, commissioned in after the 1st November, 1962; (b) by promotion of substantive members of a Civil Service; (c) by selection, in special cases from among persons, who hold in a substantive capacity gazetted posts in connection with the affairs of a and who are not members of a Civil Service.\" Sub-rule (3) of r. 4 provides that \"Notwithstanding anything contained in sub- rule (1), if in the opinion of the exigencies of the service so require, may, after consultation with the Governments and the , adopt such methods of recruitment to the Service other than those specified in the said sub-rules as it may by regulations made in this behalf prescribe.\" Rule 6 provides that no appointment to the Service shall be made except after recruitment by one of the methods specified by r. 4 Rules 6A(2) introduced with effect from September 24, 1966 after the decision in case(1) provides that \"A direct recruit in the junior time-scale of pay shall be appointed to a post in the senior time-scale of pay if, having regard to his length of service, experience, and performance in the junior time-scale of pay, the Government is satisfied that he is suitable for appointment to a post in the senior time-scale of pay.\" Rules 7. 7A, 8(1) and 8(2) deal with the four methods of recruitment specified in r. 4 and empowers to make appropriate regulations. Rule 8(1) deals with recruitment by promotion of substantive members of the Civil Service. Rule 8(2) deals with recruitment by selection in special cases from amongst persons who hold, in a substantive capacity, gazetted posts in connection with the affairs of the and who are not members of the Civil Service. Rule 9(1), as amended, provides inter alia that \"the number of persons recruited under rule 8 in any or group of s shall not, at any time, exceed 25 per cent of the number of\" senior posts in relation to that or group of s. Rule 9(3)(b) provides that \"for the purpose of determining the percentage specified in sub-rule (1)(b) the following category of officers shall 'be excluded namely :- (i) officers of a Civil Service appointed to the Service under the Emergency Recruitment Scheme otherwise than against the 25 per -cent quota; (iii) officers of a Civil Service appointed to the Service from List II, prepared by under the Indian Administrative Service (Extension to s) Schemes; (iv) officers of a Civil Service appointed to the Service under the Indian Administrative Service (Special Recruitment) Regulations, 1956.\" Rule 9 (3) ", "(b) (iv) was added oil October 15, 1965. ", "The I.A.S. (Special Recruitment) Regulations, 1956 were made under r. 4(3) of the Recruitment Rules. Regulation 3 pro- vides that special recruitment will be made (a) by direct recruitment by selection and (b) by promotion to the Service by selection of persons serving in connection with the affairs of the . Regulations 8 and 9 adopt for the purposes of special recruitment the regulations for appointment by competitive examination, promotion and selection made under rules 7, 8(1) and 8(2) of the Recruitment Rules with appropriate modifications. Rule 3 of I.A.S. (Pay) Rules, 1954 prescribes the scales of pay admissible to the members of the Service. The _junior scale is (1)[1964] 4 S.C.R. 598. ", "617 ", "scale is Rs. 900 (6th year or under)-50-1000-60-1600-50-1800 (22 years). The selection grade is Rs. 1800-100-2000. Rule 4(1) provides that the initial pay of a direct recruit shall be fixed at the minimum of the junior time-scale. Rule 4(2) provides that the pay of a member of the Service in the junior time-scale shall on appointment to a post on the senior time-scale, be fixed at the corresponding stage of the senior time-scale as shown in Sch. 1. The two scales of pay are given in Sch. 1 in parallel columns against the years of service. The increments, withholding of increments and grant of advance increments are regulated by rules 5, 6 and 7. ", "Rule 3(1) of I.A.S. (Regulation of Seniority) Rules, 1954 provides that every officer shall be assigned a year of allotment. Rule 3 (3) (a) provides inter alia that the year of allotment of an officer appointed to the Service after the commencement of these rules, shall be-where the officer is appointed to the Service on the results of a competitive examination, the year following the year in which such examination was held.\" Rule 3 (3) (b) provides that the year of allotment of an officer shall be \"where the officer is appointed to the Service by promotion in accordance with subrule (1) of rule 8 of the Recruitment Rules, the year of allotment of the junior-most among the officers recruited to the Service in accordance with rule 7 of those rules who officiated continuously in a senior post from a date earlier than the date of commencement of such officiation by the former.\" The proviso to r. 3 (3) (b) lays down that \"the year of allotment of an officer appointed to the Service in accordance with sub-rule (1) of rule 8 of the Recruitment Rules who started officiating continuously in a senior post from a date earlier than 'the date on which any of the officer recruited to the Service in accordance with rule 7 of those Rules so started officiating shall be determined ad hoc by in consultation with the State Government concerned.\" Rule 5A authorises the making of regulations for fixing the seniority of special recruits. Rule 6 provides for preparation of a gradation list of all officers borne on the cadre arranged in order of seniority. Regulation 3 of the I.A.S. (Seniority of Special Recruits) Regulation, 1960 made under r. 5A of the Regulation of Seniority Rules fixes the seniority of special recruits. Rule 3(3) provides that \"In the case of officers recruited by promotion from under clause (b) of regulation 3 read with regulation 9 of the Indian Administrative Service (Special Recruitment) Regulations, 1956, the year of allotment shall be fixed in accordance with the provisions of clause (b) of sub-rule (3) of rule 3 of the Indian Administrative Service (Regulation of Seniority) Rules, 1954.\" ", "618 ", "The relevant provisions of the parallel Cadre, Recruitment, Pay and Regulation of Seniority Rules of were considered by this Court in (1). There, the appellant was a member of . He joined the Service in 1952 and was confirmed in 1953. In 1958 he was promoted to officiate in the senior time-scale as Additional Superintendent of Police at Ferozepore in place of the permanent incumbent who was on leave. In July 1964, he was served with a charge- sheet and he submitted a reply. Before the enquiry started he was reverted to his substantive rank of Assistant Superintendent of Police. The reversion was not due to the return of the permanent incumbent from leave or deputation or for any administrative reason. Other officers junior to him continued to officiate in the senior scale while he was reverted. His personal file revealed a note by the Senior Superintendent of Police to the effect that a regular en- quiry into his conduct would take a long time and it was advisable to revert him. He was not given any opportunity of showing cause against the action taken against him. He filed a writ petition in asking for the issue of a writ quashing the order of reversion. dismissed the petition. On appeal, this Court set aside the order of and allowed the petition. This Court held that the reversion was made in contravention of Art. 311 of the Constitution. The majority held that the reversion was by way of punishment and amounted to reduction in rank and withholding of promotion on grounds which may be summarised thus : There is only one cadre in . A person in the junior time-scale of the Service is as much a cadre officer as one holding a post in the senior time-scale or a post above the time-scale. The transition of a member of the Service from one scale to another does not depend upon selection or the consideration of the comparative merits of the officers in the junior scale inter se but only upon a consideration of his seniority. , J. said that \"the whole scheme of the rules indicates that a person borne on the junior scale of pay has a right to hold a post on the senior scale of pay depending upon the availability of a post and his seniority in the junior scale of pay.\" The learned Judge added : \"Despite the fact that he holds a certain rank in the gradation list persons who also belong to and who were recruited to it subsequent to him have continued to hold or have been appointed to hold posts carrying salary in the senior scale. This would itself indicate that the action taken against him was by way of penalty or punishment. For, he has not only been reduced in rank but his promotion to the senior scale has also been withheld.\" ", "(1) [1964] 4 S.C.R. 598. ", "619 ", "In this background, the petitioner says that he was deprived of his right to hold a senior post during the period from April 2, 1952 up to November 17, 1956. We have found already that on April 2, 1952 there was no available vacancy in the senior post to which he should be appointed. continued to be governed by the Extension to States Scheme until September 1954 when the Cadre, Recruitment, Pay and Regulation of Seniority Rules were made. The proviso to r. 9 of the Cadre Rules preserved the existing arrangements under the I.A.S. Extension to States Scheme for the holding of certain cadre posts by non- cadre, officers. On June 24, 1955, the strength of the cadre was revised and increased to 46. Respondents Nos. 14, 15 and 16 belonged to the State Service. Respondent No. 14 was appointed on June 24, 1955 and respondents Nos. 15 and 16 were appointed on April 25, 1956 to senior posts against vacancies in the 25 per cent quota. Several non-cadre officers were appointed to fill vacancies in the senior posts under r. 9 of the Cadre Rules. The petitioner was not found suitable to fill a vacancy in a senior post until November 17, 1956. The petitioner contends that (1) he had the absolute right to be appointed to a vacancy in the senior posts on and after April 2, 1952, (2) the filling of the vacancies by non-cadre officers on the ground that he was not suitable was an infringement of his right and amounted to withholding of promotion and a penalty within the meaning of r. 3 of the All India Services (Discipline and Appeal) Rules, 1955, (3) 75 per cent of the total number of senior posts was reserved exclusively for direct recruits and (4) in computing the 25 per cent quota under r. 9(1) of the Recruitment Rules officers in Lists 11 and III and special recruits should be included. These contentions must be rejected. Vis a vis another cadre officer junior to him, a cadre officer in the junior scale of pay has the right of promotion to a post in the senior scale on the ground of seniority. This right is infringed if the junior cadre officer is promoted to fill a vacancy in the senior scale, while he continues to hold a post in the junior scale of pay. But he cannot claim the right to fill the, vacancy if he is not suitable and no cadre officer junior to him is promoted to fill the vacancy. An officer in the junior scale of pay has no right to a senior post as soon as he joins the Service. He may be appointed to a senior post only when he is found suitable having regard to his length of service, experience and performance in the junior scale of pay. Rule 6A(2) of the Recruitment Rules now makes explicit what was always implicit in r. 9 of the Cadre Rules. ", "Under r. 9(1) of the Cadre Rules, a senior cadre post may be filled by a non-cadre officer if there is no suitable officer available for filling the vacancy. Similar provision is to be found in paragraph 3 of the memorandum regarding constitution of and paragraph 5 of the Indian Civil Administrative Cadre Rules, 1950. The appointment of a non-cadre officer to a cadre post under r. 9(1) of the Cadre Rules is a temporary arrangement which may be terminated at any time when the Government finds a cadre officer suitable for filling the vacancy. Until the cadre officer is found suitable, a non- cadre officer may be appointed to fill the vacancy in a\" post in the senior scale of pay. The cadre officer has no right to fill the vacancy if he is not suitable. The filling of the vacancy by a non-cadre ,officer under r. 9 does not infringe any right of the cadre officer nor does- it amount to a withholding of promotion or a penalty within the meaning of r. 3 of the All India Services (Discipline and Appeal) Rules, 1955. ", "The decision in case(1) is distinguishable. There, a cadre officer in the junior scale of pay was promoted to officiate in a post in the senior scale of pay and was thereafter reverted to his substantive post while other cadre officers junior to him continued to officiate in posts in the senior scale of pay. As against cadre officers junior to him,,he had the right to hold :the post in the senior scale of pay. The reversion while cadre officers junior to him continued in the senior scale amounted to not only reduction in rank but also withholding of promotion. This is all that case(1) decided. The fact in the present case are entirely different. The petitioner was not suitable to fill the vacancies in the senior posts and non-cadre officers were appointed to fill the vacancies under r. 9 of the Cadre Rules. No cadre officer junior to the petitioner was promoted to the cadre post before his promotion on November 17, 1956. Nor was he reverted after his promotion, while officers junior to him continued to hold senior posts. The petitioner was not reduced in rank nor was his promotion withheld. He had no right to fill a vacancy in the senior posts or to draw salary in the senior scale between April 2, 1952 and November 17, 1956. There is no merit in the contention that 75 per cent of the total number of senior posts is reserved exclusively for direct recruits. Under r. 9(1) of the Recruitment Rules, the number of persons recruited to senior posts under r. 8 of the Recruitment Rules by promotion or by selection cannot exceed 25 per cent of the total number of senior posts. The remaining 75 per cent of the senior posts may be filled by other recruits. Special recruits under r. 4 of the Recruitment Rules are appointed against the 75 per cent quota. Their appointments are not counted against the 25 per cent quota reserved for persons recruitment under r.8. (1) [1964] 4 S.C.R. 598. ", "621 ", "Rule 9(3)(b)(iv) now expressly provides what was already implicit in r. 9(1). ", "Paragraph 4(iv) of the I.A.S. !Extension to States Scheme provided that the posts held by officers included in Lists 11 and III would be excluded from the cadre for the period they were held by those officers and would revert to the cadre as and when they ceased to be required for that purpose. The posts held by the officers in List III were excluded from the cadre until they retired and were not counted against the 25 per cent quota. The posts held by the officers in List 11 pending absorption in the service were excluded from the cadre. They were absorbed in the service as and when they were found fit. Rule 9 (3) (b) ", "(iii) provides that in computing the 25 per cent quota the appointments of officers from List 11 will be excluded. There were vacancies in the 25 per cent quota which were filled up by promotion of respondents Nos. 14, 15 and 16 from . Respondents Nos. 4, 6, 11, 12, 13, 17 and 18 were from the former . Some of them were promoted to against the 25 per cent quota in the cadres before the integration of the cadres on November 1, 1956. No appointments were made between November 1, 1956 and November 17, 1956 when the petitioner was appointed to officiate in a senior post Other respondents were appointed after November 17, 1956. None of the appointments is open to any challenge. It is surprising that the petitioner seeks to challenge the appointments after a long lapse of time. He has not given any adequate explanation as to the delay in filing the writ petition. The petitioner next challenges the seniority assigned to the respondents. In the gradation list, all the respondents are shown as senior to him Respondents Nos. 10, 11, 12 and 13 are special recruits and their seniority has been fixed under Regulation 3(3) of the I.A.S. (Seniority of Special Recruits) Regulation, 1960 read with r. 3 ( 3 ) (b) of the Regulation of Seniority Rules, 1 9 5 4. The other respondents are promotees and their seniority has been fixed under r. 3 (3) (b) of the Regulation of Seniority Rules and the proviso thereto. ", "The petitioner challenges the vires of r. 4(3) of the Recruitment Rules under which framed the Special Recruitment Regulations. The Recruitment Rules were made under s. 3 of the All India Services Act, 1951. (1), this Court held that s. 3 was not bad on the ground of excessive delegation of legislative power. The petitioner submits that r. 4(3) of the (1) Sup, 1 S.C.R. 72 Recruitment Rules is bad on the ground of excessive delegation, of legislative power. Assuming that the doctrine of excessive delegation of legislative power applies to rules, we think that r. 4(3) does not suffer from the vice of excessive delegation. Rule 4(3) .authorities to make regulations for special recruitment. In making the regulations, is to be guided by the exigencies of the service and the advice of the State Governments and . These authorities are the best judges of the appropriate regulations to be made in the matter. In the light of their expert knowledge they can adapt for this purpose the existing regulations for other methods of recruitment with suitable modifications or make other appropriate regulations having regard to the exigencies of the service. As a matter, of fact, the Special Recruitment Regulations 1960 framed under r. 4(3) have adapted for the purposes of special recriutment the regulations for recruitment by competitive examination, promotion and selection with appropriate modifications, The petitioner next contends that r. 3 (3) (b) of the Regulation of Seniority Rules makes unjust discrimination between a promotee and a direct recruit in the matter of seniority by arbitrarily assigning a lower year of allotment to a promotee and is violative of Arts. 14 and 16 of the constitution. This contention is devoid of merit. The seniority of direct recruits inter se and promotees inter se is fixed by r. 4. The object of r. 3 (3) (b) is to fix the seniority of the promotees in relation to direct -recruits. The promotees obtain promotion after long service in . From the point of view of the promotee, his seniority should be counted from the date of his joining . From the point of view of the direct recruit the seniority of the promotee should be counted from the date of his appointment to . Rule, 3 (3) (b) attempts to strike a just balance between the conflicting claims. It gives the promotee the year of allotment of the junior-most direct recruit officiating continuously in a senior post earlier than the date of commencement of such officiation by the promotee. If no direct recruit was officiating continuously in a senior post on an earlier date. the seniority of the promotee is determined ad hoc. In our opinion, the rule is not arbitrary or discriminatory and is not violative of Arts. 14 and 16 of the Constitution. ", "The petitioner next challenges the validity of ]Regulation 3(3) of the Special Recruitment Seniority Regulations, 1960 on the ground that it offends Arts. 14 and 16 of the Constitution. According to the petitioner, the relevant rules and regulations have set up an arbitrary double standard for a special recruit enlisted by promotion because Regulation 3(3) of the Special Recruit- ", "623 ", "ment Seniority Regulations read with r. 3 (3) (b) of the Regulation of Seniority Rules treats him as a promotee for the purpose of seniority while r. 9 (3) (b) (iv) of the Recruitment Rules treats him as a direct recruit for the purpose of recruitment. There is no substance in this contention. Special recruits form a distinct class. They are neither direct recruits nor promotees. Rule 9 of the Recruitment Rules does not treat them as direct recruits. Regulation 3 (3) of the Special Recruits Seniority Regulations properly adopts the formula applicable to promotees for fixing the seniority of special recruits enlisted by promotion. so that in the matter of seniority all officers recruited from are placed on the same footing. The regulation is not arbitrary nor violative of Arts. 14 and 16 of the Constitution. The seniority of the respondents was fixed in accordance with Regulation 3 (3) of the Special Recruitment Seniority Regulations, r. 3 (3) (b) of the Regulation of Seniority Rules and the proviso thereto, and is not open to any challenge. ", "The writ petition is dismissed. There will be no order as to costs. ", "Y.P. Petition dismissed."], "relevant_candidates": ["0000406974", "0000615469"]} {"id": "0000287864", "text": [", J. ", "1. The first defendant in these suits is the present of , an impartible estate. The 1st plaintiff in O.S. No. 9 of 1910 and the sole plaintiff in O.S. No. 17 of 1910 are brothers of the 1st defendant. The 2nd plaintiff in O.S. No. 9 of 1910, is the minor adopted son of the 1st plaintiff. They brought these suits for a declaration of their rights to maintenance at the rate of Rs. 650 per mensem and for recovery of the same with arrears and interest as a charge upon the estate. They also claimed priority over the mortgage rights of certain mortgagees who were made parties to the suit and thus raised questions which need not now be considered as they are not pressed in these appeals. The 1st defendant acknowledged that the plaintiffs were entitled to be maintained out of the estate but pleaded that the financial condition of the estate was such that he could not afford to give his brothers more than Rs. 400 per mensem which was in fact the amount that they were receiving during the period when the estate was under the management of . The lower Court gave the plaintiffs a decree for Rs. 400 per mensem during their joint and several lives for the maintenance of their branches of the family and directed that the sums due on account of past and future maintenance at this rate should be recoverable as a charge upon the estate. From this. plaintiffs' appeal on the ground that the amount awarded should not have been less than Rs. 650. ", "2. The position taken for the appellants is this. The present 1st defendant brought a suit O.S. No. 12 of 1890 for partition against the then to which all the brothers were made parties. It ended in a compromise in which the estate was declared to be impartible and the succession to it was declared to be governed by rules of primogeniture, simultaneously it was agreed that the Zemin dar's brothers, mcluding the present plaintiffs and the 1st defendant and their male descendants should be entitled to a maintenance allowance from the income of the estate of Rs. 600 per mensem for the first ten years and of Rs. 700 per mensem thereafter. passed a decree in terms of the compromise but on appeal held in (1894) I.L.R. 18 M. 410 that the stipulations which were outside the scope of the suit should not have been embodied in the decree and these included the stipulations as to allowances, so they were excluded. ", "3. After the death of , succeeded to the , and during his time two of the brothers of viz., the present 4th defendant and the father of the 6th defendant brought suits against in respect of their maintenance allowances and obtained consent decrees for Rs. 650 per mensem.: The other brothers, viz., the 1st plaintiff in O.S. No. 9 of 1910 and the plaintiff in O.S. No. 17 of 1910 and the present got registered agreements executed (Exhibits A.C. and I) with in similar terms of, Rs. 650 per mensem. On the death of the 1st defendant became . ", "4. Now it is urged that the appellants have by virtue of exhibits A and C become creditors of the Estate and not mere maintenance holders, that the agreements are binding on all the successors of the who executed them and that there- fore no less sum than what was agreed upon therein can now be given as maintenance. Further it is argued that the compromise having been entered into as a settlement of certain claims to portions of the estate is binding on all who took part in it and their representatives, and creates vested rights in favour of those whose rights are declared in it. ", "5. Lastly it is contended on the evidence that the amount claimed was not excessive and that the estate could well afford it. On the last point I agree with the Subordinate Judge's opinion that nothing more than Rs. 400 is proper and reasonable for the reasons given in paragraph 10 of his judgment. ", "6. As for the other points now taken in the appeals it is noticeable that Exhibit A, though purporting to have been executed in pursuance of the razinamah in O.S. No. 12 of 1890, contains terms very different from the- compromise petition (Exhibit D). Not only is the amount of maintenance different in the two documents as I have already stated, but the periodical instalments in which payments are to be made are different, and Exhibit D states the source to be the income of the Zamindari whereas Exhibits A. and C. provide for recovery of the allowance from the estate as well as its incomes. Exhibits A. and C. are three years later than Exhibit D. ", "7. It is thus impossible to treat Exhibits A. and C. as having the same force and binding character as a decree in a suit terminating litigation and compromising a bona fide claim to property. Nor can the appellants rely on those terms of the compromise (Exhibit P) which have not passed into a decree or order of so far as they affect the immoveable property comprised in the document, as the agreement of compromise was not registered. (1911) I.L.R 36 M. 46. Exhibits A. and C are registered and purport to be agreements relating to the payment of maintenance allowances, as is distinctly stated in the first clause of the document. ", "8. An amount provided as maintenance for a member of a family does not lose its character as a maintenance allowance by being embodied in an instrument or decree, the character, I mean of being liable to be increased or decreased under a cha'nge of circumstances, (Vide Gopikabai v. (1900) I.L.R. 24 B. 386. (1904) 14 M.L.J. 339 and v. (1835) W.R. 598 (P.C.). For these reasons alone I consider that the Subordinate Judge had power to direct the 1st defendant to pay maintenance, at a lower rate than Rs. 650. But as reliance is placed on the binding character of the registered documents under which it is claimed that plaintiffs and their male heirs have acquired a right to an hereditary annuity for all time, I may observe that in so far as Exhibit A. and C. provide that and and their male descendants have a vested right to recover the fixed allowances through the present and after him through the rightful owners of the i or their heirs, assignees, executors, administrators, trustees, etc.; from the estate and its incomes by declaring a recurring charge on the Kalahasti estate, these documents create a future interest' in\" immoveable property in favour of persons unborn, and thus impose a restraint upon alienation which is contrary to the principles of Hindu Law. In excluding females and collaterals they provide for a line of succession not according to law, and they are therefore invalid' ( Law of Perpetuities in British India, pp. 123 to 128 and the decision in v. Sidhesswari Debt (1888) I.L.R. 16 C. 71. . ", "9. I would therefore dismiss these appeals with costs. ", "10. The 3rd Respondent in Appeal 216 who got a consent\" decree in O.S. No. 33 of 1895 (Exhibit E) on 22nd April 1896 for maintenance allowance of Rs. 650 per mensem has filed a memorandum of objections claiming priority over the appellant's right on the ground of his decree being prior in point of time to Exhibit C which is dated 17th November 1896. ", "11. In these suits it is unnecessary to determine questions of priority between the various maintenance holders inter se seeing that their right to receive maintenance rests in the first instance not on their decrees or agreements but on their relationship to the owner of the Zamindari. ", "12. The objection memorandum in App. 216 of 1911 is for this reason dismissed with costs. That in Appeal 217 is out of time and is also dismissed with costs. ", ", J. ", "13. I agree. ", "14. I think that considering the income of the Zamindari Rs. 400 is a fair rate of maintenance. ", "15. The terms of the compromise in O.S. No. 12 of 1890 relating to maintenance were not embodied in the decree. It is not those terms that are now sought to be enforced. The subsequent registered agreement of 1896 is so far as the rate is concerned only binding on the Zamindar who executed it. It is not shown that it was executed under circumstances which would make it binding on the succeeding Zamindars who take the property in their own right. ", "16. It was not contended, nor could it be successfully contended, that the maintenance formed such a charge on the Zamindari as would preclude the Zamindar for the time being from alienating portions of it for necessary purposes. It would be unreasonable to hold in the circumstances that the maintenance is a fixed unvarying amount."], "relevant_candidates": ["0001356963", "0001758535"]} {"id": "0000290613", "text": ["JUDGMENT , J. ", "1. These two tax revision cases give rise to a common question of law for our consideration and hence they are disposed of by a common order. ", "2. The State of Andhra Pradesh is the revision-petitioner in both the cases. The respondents are dealers in iron and hardware goods. While assessing the dealers to sales tax, the Commercial Tax Officer exempted the sales of (i) galvanised plain or corrugated sheets and (ii) B. P. sheets, in both the cases and of wire-nails in the first case on the ground that those commodities fell within the ambit of entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act (hereinafter called \"the Act\"), namely, \"iron and steel\" and those sales were not the first sales, but second sales. ", "3. In the exercise of his revisional powers Under Section 20(2) of the Act, the Deputy Commissioner of Sales Tax, suo motu, revised the assessments by withdrawing the exemption that was granted by the Commercial Tax Officer as, in his opinion, the view taken by the Commercial Tax Officer that the corrugated and B.P. sheets and wire-nails fell under the entry \"iron and steel\", was erroneous in law. ", "4. On appeals filed by the dealers, held that galvanised plain or corrugated sheets and B.P. sheets fell within \"iron and steel\", entry No. 2 in the Third Schedule to the Act and as the sales effected by the dealers were not the first sales, those sales were exempted from payment of sales tax. The , however, upheld the view of the Deputy Commissioner of Sales Tax that the commodity of wire-nails did not fall within the entry \"iron and steel\". In other words, disagreed with the Deputy Commissioner's view in respect of the sales of the first two commodities and exempted the sales of those commodities from tax, but, with regard to the sales of wire-nails, upheld the view of the Deputy Commissioner of Sales Tax that they were exigible to sales tax. ", "5. Aggrieved by the orders of , the State of Andhra Pradesh has filed these tax revision cases, raising four questions of law for our consideration. These four questions can be reframed into one question and that question is: ", "Whether the commodities of galvanised plain or corrugated sheets and B.P. sheets fall within the ambit of 'iron and steel', i. e., entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act ? ", "6. Commodities mentioned in the Third Schedule to the Act are declared goods in respect of which a single point tax only is leviable Entry No. 2 in that schedule is \"iron and steel\". The sales of iron and steel are made taxable at the point of first sale at 0.3 paise in a rupee. The said entry defines \"iron and steel\" thus : ", "Iron and steel, that is to say, ", "(a) pig iron and iron scrap ; ", "(b) iron plates sold in the same form in which they are directly produced by the rolling mills; ", "(c) steel scraps, steel ingots, steel billets, steel bars and rods ; ", "(d)(i) steel plates, ", "(ii) steel sheets, ", "(iii) steel bars and tin bars, ", "(iv) rolled steel Sections and ", "(v) tool alloy steel, sold in the same form in which they are directly produced by the rolling mills. ", "7. The learned Advocate appearing for the contended that the real test that has to be applied for determining whether galvanised plain or corrugated sheets or B.P. sheets fall within \"iron and steel\" within the meaning of entry No. 2 in the Third Schedule to the Act is the test of possibility of substitution of the one for the other, so far as the consumers are concerned. If there is no such possibility, it would be a different commodity, but if there is such a possibility, it would be the same commodity. For that purpose, the entries in the schedule to the Act must be construed or understood not in a technical sense but in a sense as understood in common parlance by persons who are conversant with the subject-matter with which the statute is dealing. ", "8. Corrugated and B.P. sheets in the commercial field are understood by business people, in ordinary parlance, as commodities different from iron and steel. The use for which the corrugated sheets and B.P. sheets are put by the consumers is something different from the use to which iron and steel are put. The trade names under which corrugated sheets and B.P. sheets and the iron and steel are sold, are different from one another. Hence it was urged by the learned counsel appearing for the that erred in holding that the galvanised plain and corrugated sheets and B.P. sheets fall within the entry \"iron and steel\". In support of this argument, the learned counsel relied upon the decisions in 23 S.T.C. 288, . 12 S.T.C. 286 (S.C.) and the .) Ltd. 20 S.T.C. 409. ", "9. The learned counsel , appearing for the dealers, on the other hand, submitted that iron and steel are not sold as such, but are sold in acceptable forms and shapes and merely because iron and steel are put to some process for bringing them into acceptable forms and shapes for their sales, i. e., into galvanised or B. P. sheets, they do not cease to be iron and steel. In support of his argument, the learned counsel relied upon the following decisions : ", "(i) 19 S.T.C. 24 (S.C) in which held that patasa, hard a and alchidana fall within the definition of \"sugar\"; ", "(ii) A.I.R. 1966 S.C. 1546, in which held that bars, flats and plates fall within the definition of \"iron and steel\"; ", "(iii) 26 S.T.C. 416 in which held that though mild steel rounds, flats and angles manufactured from \"iron and steel\" scraps maybe commercially different from iron and steel scraps, still they do not cease to be \"iron and steel\"; and ", "(iv) 11 S.T.C. 827 (S.C.) in which held that hydrogenated groundnut oil called \"vanaspati\" is \"groundnut oil\" within the meaning of Rule 18(2) of the Madras General Sales Tax Rules. ", "10. In order to decide the question referred to us, we must know the exact nature of the commodities known as galvanised plain or corrugated sheets and B.P. sheets. ", "11. Corrugated sheets are iron sheets with parallel ridges and furrows so that the cross-section is a continuous waved line. \"Flat sheet metal\", according to , 1958 Edition, Volume 8, at page 21, \"tends to buckle and get out of shape with every change in temperature. The corrugations, made in one direction, give it greatly increased stiffness and adapt it to numerous purposes for which it would otherwise be less suitable. The sheet metal is corrugated by passing between ridged rollers.... It comes out in the commercial form,and is frequently subjected to a process of coating with zinc to protect from oxidation and is then known as galvanised corrugated iron. It is used widely for roofing and walling barns, sheds, warehouses and other buildings....\" ", "12. Encyclopaedia Britannica, Fourteenth Edition, Volume 6, at page 471, points out that corrugating process enables much lighter gauges of sheets to be used because it makes them very rigid and portable. ", "13. Corrugated iron sheets are thus nothing but iron sheets-sheets of iron-corrugated, that is, wrinkled for the purpose of making them more rigid and giving them increased stiffness so that they become more suitable for roofing and walling than they would otherwise be as flat iron sheets. They are merely iron sheets with their shapes altered to make them more adaptable and useful for being used as iron sheets for roofing and walling. ", "14. On a difference of opinion expressed by two learned Judges, the learned Chief Justice of in 23 S.T.C. 288 agreed with the view expressed by one of the differing Judges, Mr. , that galvanised plain or corrugated sheets fall within the entry \"iron and steel\" under the Bombay Sales Tax Act. The definition of \"iron and steel\" given by the Bombay Sales Tax Act is exactly identical with its definition given in the Andhra Pradesh General Sales Tax Act. ", "15. The test, of substitution of the one for the other, applied by , J., was not accepted by the learned Chief Justice. The learned Chief Justice observed that: ", "...It is no doubt true that iron sheets when corrugated cease to be raw materials for manufacture or fabrication of goods and they can be used only as corrugated iron sheets for roofing and walling but on that account they do not cease to be iron sheets having the essential character of iron. It may be that by reason of alteration of shape, iron sheets may cease to be usable for any purpose other than roofing or walling but they still remain iron sheets and do not lose the essential character of iron which they possessed as flat iron sheets before corrugation. The process of corrugation is one of Alteration of shape and it does not make iron sheets a different or product of iron.... ", "16. The question as to when a commodity would lose its essential character of the raw material and becomes a different or a product of the raw material, is one of degree and where precisely to draw the dividing line is a pretty difficult task. However, the test of substitution or the user of the one for the other is not the sole criterion for holding the view that the galvanised corrugated or plain sheets are a commodity different from \"iron and steel\" as defined in entry No. 2 in the Third Schedule of the Andhra Pradesh General Sales Tax Act. ", "17. Entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act begins with the words \"iron and steel, that is to say....\" Those words are of considerable importance. They are explanatory of what iron and steel is. All s enumerated under that head, either in their crude form or in their manufactured stage or in any of the forms listed under the sub-headings (a), (b), (c) and (d), are treated as various forms of iron and steel. ", "18. The scope and meaning of the words \"that is to say\" following \"land\" in entry No. 21 of List II of the Seventh Schedule to the Government of India Act, 1935, has been expressed by in A.I.R. 1917 P.C. 72 as introducing the most general concept \"rights in or over land\". ", "19. By a parity of reasoning, the words \"that is to say\" occurring immediately after \"iron and steel\" in entry No. 2 show that the intended to adopt the most general concept of iron and steel and wanted all forms of iron and steel to be brought within that entry. ", "20. . 12 S.T.C. 286 (S.C.) the dealer claimed exemption from payment of sales tax on betel leaves, contending that betel leaves fell under the entry \"vegetables\" which was an exempted item. rejected the contention holding that : ", "this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it' ", "21. A Division Bench of this Court in the .) Ltd. 20 S.T.C. 409 held that: ", "'manganese' does not include 'manganese ore' in the popular sense of the term, though from the scientist's point of view manganese ore may contain manganese ", "22. The learned Judges observed that: ", "in interpreting items in statutes like the Sales Tax Act ,resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their ordinary sense. ", "23. 11 S.T.C. 827 (S.C.), had to consider whether the hydrogenated groundnut oil (commonly called \"vanaspati\") was \"groundnut oil\" within the meaning of the Rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. ", "24. Before , the decision of which was the subject-matter of the appeal before , the dealer had claimed deduction of the purchase price of the groundnuts from the proceeds of the sale of all oils by the company-raw, refined and hydrogenated. Both the as well as the learned Judges of upheld the dealer's contention in regard to the sale of refined oil, but rejected it in so far as it related to the sale of hydrogenated oil. ", "25. The as well as held that the hydrogenated oil ceased to be groundnut oil by reason of the chemical changes which took place and which resulted in the acquisition of new properties including the loss of its fluidity. In other words, held that hydrogenated oil was not groundnut oil but a product of groundnut manufactured out of groundnut oil and, therefore, was not entitled to the benefit of deduction under Rule 18(2). Before , the question that was raised for their decision was, whether, if beyond the process of refinement of the oil, the oil was hardened again by the use of chemical processes, it was rendered any-the-less groundnut oil ? In regard to that question, the Advocate-General, late , laid stress on two facts: (i) while normally oil was a viscous liquid, the hydrogenated oil was semi-solid and that this change in its physical state was itself indicative of a substantial modification of the identity of the substance; and (ii) in the course of hydrogenation the oil absorbed two atoms of hydrogen and there was an inter-molecular change in the content of the substance. , J., speaking for , rejected the first submission and in regard to the second submission, stated that it was not decisive of the matter. ", "26. The learned Judge observed that: ", "To be groundnut oil, two conditions have to be satisfied. The oil in question must be from groundnuts and, secondly, the commodity must be 'oil' The addition of the hydrogen atoms was effected in order tosaturate a portion of the oleic and linoleic constituents of the oil and render the oil more stable thus improving its quality and utility. But neither mere absorption of other matter, nor inter-molecular changes necessarily affect the identity of a substance as ordinarily understood The change here is both additive and inter-molecular, but yet it could hardly be said that rancid groundnut oil is not groundnut oil. It would undoubtedly be very bad groundnut oil but still it would be groundnut oil and if so it does not seem to accord with logic that when the quality of the oil is improved in that its resistance to the natural processes of deterioration through oxidation is increased, it should be held not to be oil There is no use to which the groundnut oil can be put for which the hydrogenated oil could not be used, nor is there any use to which the hydrogenated oil could be put for which the raw oil could not be used ", "27. In the end, the learned Judge held that the hydrogenated oil will continue to be groundnut oil notwithstanding the processing which was merely for the purpose of rendering the oil more stable thus improving its keeping qualities for those who desire to consume groundnut oil. ", "28. 19 S.T.C. 24 (S.C.), the question that arose for the decision of was whether patasa, harda and alchidana could be regarded as \"sugar\", which was defined as meaning \"any form of sugar containing more than 90 per cent of sucrose\". ", "29. A small portion of hydrogen sulphide is passed through the sugar solution for bleaching purposes, after which patasas are prepared by splashing the solution on a piece of wood which converts the sugar into amorphous sugar; the hard as are prepared by pouring the solution into moulds which is then allowed to cool and the alchidanas are prepared by rapidly passing the solution of appropriate thickness through a sieve so as to convert it into granulated lumps of sugar. ", "30. It was contended on behalf of the that patasa, harda and alchidana bore a distinct and different name from sugar and were not commercially purchased or sold as sugar and, therefore, they were commodities different from \"sugar\". This argument was rejected. It was held that they fell within the definition of \"sugar\". ", "31. In v. [1954] 5 S.T.C. 365, a question arose before , whether chira and muri could be said to be covered by the words \"all cereals and pulses including all forms of rice\". ", "32. Chira is parched beaten rice. It involves the process of boiling paddy, its dehydration, frying and flattening. Muri involves the process of soaking, boiling and dehydration of paddy and the removal of husks. As a result of these processes, the rice became edible and could be taken as food without any more cooking. ", "33. Although the , when so transformed, bore a different name and could not be commonly recognised as \"rice\", , C.J., observed that it seemed to him that those commodities could be regarded more as forms of rice than products thereof and were, therefore, exempt from the payment of tax under the Assam Sales Tax Act, 1947. ", "34. 19 S.T.C. 469 (S.C.) in considering whether charcoal was included in the word \"coal\" specified in entry 1 of Part III of Schedule II to the Madhya Pradesh General Sales Tax Act, 1958, observed that : ", "while construing the word 'coal' in entry 1 of Part III of Schedule II to the Act, the test that would be applicable is, what is the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as 'coal' according to the meaning ascribed to it in common parlance. Viewed from that angle, both the merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal' in the term 'coal'.... ", "35. also observed that: ", "...While interpreting items in statutes like the Sales Tax Act s,resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.... ", "36. A.I.R. 1966 S.C. 1546 Subba Rao, J. (as he then was), speaking for , observed that: ", "...So long as iron and steel continued to be raw materials, they enjoyed the exemption. Scrap iron purchased was merely re-rolled into bars, flats and plates. They were processed for convenience of sale. The raw materials were only re-rolled to give them attractive and acceptable forms. They did not in the process lose their character as iron and steel. The dealer sold 'iron and steel' in the shape of bars, flats and plates and the customer purchased 'iron and steel' in that shape.... ", "37. held that bars, flats and plates sold by the assessee were \"iron and steel\" which were exempted under the notification. ", "38. 26 S.T.C. 416, a Division Bench of held that: ", "...Even though mild steel rounds, flats and angles manufactured from iron and steel scraps may be commercially different from iron and steel scraps, they do not cease to be 'iron and steel' and tax can be levied only at a single point in the series of sales from the stage of raw material till it is sold in the same form in which it has been produced by the rolling mills, that is, till the manufactured s have been converted into any other form of fabricated material.... ", "39. From the aforesaid discussion it emerges that a taxing statute like the Sales Tax Act must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term according to the meaning ascribed to it in common parlance. In interpreting items contained in those entries, resort should be had not to the scientific, geological or botanical sense, but to their popular meaning, or the meaning that is attributed to them by those who are dealing in those commodities and the meaning in which their consumers or buyers understand them. ", "40. The test of possibility of substitution of the one for the other, so far as the consumers or purchasers are concerned, cannot be said to be a decisive or the only test for determining whether the sold was the same or different from the s specified in the entry in the schedule to the Sales Tax Act . ", "41. If the raw material is subjected to a processing by the application of chemical methods, either for the removal of impurities or for improving its quality or utility, the resulting does not lose its essential character as the raw material. ", "42. Neither mere absorption of other matter, nor any inter-molecular changes effected in processing the raw material, necessarily affect the identity of the as ordinarily understood by the dealers or consumers.Mere change of physical form or shape of the raw material by the application of some process or the other, so as to prevent it from oxidation or to increase its utility, the resulting from that process, although called by a different trade name in the commercial world, does not lose its essential character of the raw material. The different uses to which the raw material and the resulting from it by reason of some process or the other, are put to, would not be decisive of the fact that the resulting is different from the raw material that was processed. ", "43. It is in this background of decided cases and by applying the tests laid down by those cases, that we will now have to decide whether or not galvanised plain of corrugated sheets and B.P. sheets are different from \"iron and steel\" specified in entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act. ", "44. Galvanisation is nothing but coating the iron sheet with zinc by an electrical process, or some other processes, to prevent it from oxidation. The galvanisation improves the utility of the raw material of iron. Corrugation is merely wrinkling of the sheets in one direction for the purpose of making the sheets more rigid and for giving increased stiffness so as to be more suitable for roofing and walling. Corrugation results merely in the alteration of the shape of the raw material, \"iron and steel\". Both corrugation and galvanisation improve the utility of the raw material. By the process of galvanisation and corrugation, the iron and steel do not lose their essential character as \"iron and steel\" when the resulting s are sold as galvanised plain or corrugated sheets. The purposes for which the iron is used may be different from the purposes for which the galvanised plain or corrugated sheets are used, but for that mere reason it is difficult to hold that the essential character of iron has been lost. Nor is the fact that the raw material and the s resulting on processing that are sold under different and distinct names in the commercial market, would be decisive of the fact that the galvanised plain or corrugated sheets are different from iron, the raw material which still exists in them. B.P. sheets are mere sheets of steel and hence a fortiori they are forms of \"iron and steel\". ", "44. Hence we agree with the that galvanised plain or corrugated sheets and B.P. sheets fall within entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act. Since the sales of those s are not the first sales effected by the dealers but are the second sales, the dealers are not liable to pay the sales tax thereon. ", "45. The references are accordingly answered. The shall pay the costs of these references to the dealers. The tax revision cases are dismissed."], "relevant_candidates": ["0000357142", "0000547717", "0000571954", "0000665168", "0000903306", "0001032892", "0001270021", "0001272035", "0001876937"]} {"id": "0000293661", "text": [", ", "1. This is an appeal against an order of , J. ", "allowing certain amendments of the plaint and granting fresh leave under Clause 12 of the Letters Patent in respect of such amendments. ", "2. The plaintiff respondent which is a registered partnership firm carrying on business at 195, Old China Bazar Street, Calcutta, filed a suit in this Court on or about the 15th December 1959 against the appellants and describing the former as the or Manager of a joint Hindu Mitakshara family consisting of himself and his sons and and as carrying on a family business under the name and style of Shanharlal , along wiw , at Katihar and also at Labha, in the District of Purnea in the State of Bihar, for recovery of a sum of Rs. 74,612.89 nP. In respect of certain commission agency dealings and transactions. In the plaint as originally filed the case made was that in or about the year 1952 the defendants in their said business of appointed the plaintiff firm as their Commission Agents for the sale of raw jute at certain terms and conditions set out in the plaint. Thereafter pursuant to such terms and conditions the plaintiff firm acted as the Commission Agent of the defendants. The accounts in respect of the dealings and transactions had between the parties were adjusted from time to time and on or about the 15th June 1959, a sum of Rs. 38,344.48 nP. was found due and owing by the defendants to the plaintiff firm, but later on it was discovered that there was a slight error in the account and the amount actually due was Rs. 33,334.68 np. There were further dealings and transactions between the parties after that date and as a result of such further dealings and transactions a sum of Rs. 78,646.41 nP. became due from the defendants to the plaintiff. But after giving credit of a sum of Rs. 5900.09 nP. which was payable by the plaintiff firm to the defendants in respect of the sale proceeds of a consignment of jute sent from Labha station to Cossipore Railway Station, the sum that remained due from the defendants to the plaintiff was Rs. 66, 280.30 nP. and adding to that a sum of Rs. 8,232.50 nP. being the amount of interest due at the stipulated rate, the total amount that remained payable to the plaintiff was Rs. 74,512.89 nP. Accordingly the claim of the plaintiff was laid at this figure in the original plaint. It is to be noted that the suit was filed after obtaining leave under Clause 12 of the Letters Patent. ", "3. On cr about 7th December, 1950 the plaintiff firm look out a summons for amendment of the plaint. The material amendments asked for were as follows: ", "4. In the cause title of the plaint was described as or Manager of a joint Hindu Mitakshara family consisting of himself and his sons and and/or his grandson and other coparceners, if any, of the said joint family. So the words \"and/or his grandson ...... family\" were added by this amendment. Then in paragraph 2 of the plaint it was stated that in 1952 the defendants appointed the then registered partnership firm of as then constituted and consisting of four partners, , , and as their commission agents. Certain alterations as to the terms as set out in Clause (d) and Clause e(i) in paragraph 2 were also made. In Paragraph 3 (a) of the plaint it was stated that the firm which was appointed the Commission Agent acted as such till 11th April, 1954 on which date three partners namely , and , retired from the said firm and all their rights, liabilities, assets, credits and benefits of all contracts which accrued or were to accrue end the goodwill of the firm, were assigned by the retiring partners in favour of by a deed dated the 6th May, 1954. In paragraph 3 (b) it was stated that the defendants had knowledge and notice of the retirement of three partners and about the assignment, and the dealings and transactions continued between the defendants and until 11th June, 1954. In paragraph 3 (c) it was stated that on or about 11th June 1954 a deed of partnership was executed whereby took in two partners, namely, and in the said business as a going concern and the plaintiff firm was constituted and registered with the Registrar of firms and all the rights of including the rights, liabilities etc. which he acquired by reason of the deed of 6th May, 1954 were assigned and became vested in the partners of the plaintiff firm as constituted on the 11th June, 1954. in paragraph 3 (d) it was stated that the defendants had full knowledge and notice of the aforesaid facts, and the business was by concurrence of the defendants and the plaintiff firm as newly constituted, carried on, according to the terms and conditions mentioned in paragraph 2 of the plaint. In paragraph 3 (e) an agreement accepting all the dealings and transactions had since 1952, is pleaded, and in paragraph 3 (f) the dealings and transactions had pursuant to such agreement as pleaded in paragraphs 3 (d) and 3 (e) are pleaded. In paragraph 11 of the plaint it is pleaded that since the institution of the suit the plaintiff firm had realised the sale proceeds in respect of 180 bales of jute and a sum of Rs. 12,267.62 nP. was payable by the plaintiff to the defendant and so after giving credit for this amount, the amount that would still remain payable by the defendants to the plaintiff was the sum of Rs. 62,245.27 nP. ", "5. It will thus appear that by making certain alterations in paragraph 3 of the original plaint and by introducing paragraphs 3 (a) 3 (b), 3 (c), 3 (d), 3 (e) and 3 (f) some substantial amendments were made in the cause of action as originally pleaded in the plaint. It may be pointed out at this stage that this application for amendment was made inasmuch as the defendants in their written statement filed in answer to the original plaint, took up the defence that there was no agreement appointing the plaintiff firm which filed the suit as commission agent as pleaded in the plaint, but the defendants had appointed a firm in which and the three were partners. A further point was taken in the written statement that besides the persons whose names are mentioned in the original plaint, there were other members of the joint family of the defendants who were not mads parties to the suit and so the suit was bad for non-joinder of parties. The application for amendment having come up for hearing before J., the learned Judge by his order dated the 28th March 1961 granted fresh leave under Clause 12 of the Letters Patent in respect of the amendments asked for and allowed all the amendments that had been asked for in respect of the plaint. The defendants have thereupon preferred the present appeal against the said order of the learned Judge and have contended before us that the amendments asked for introduced a totally different cause of action and so should not have been allowed and further the had no power to grant fresh leave under Clause 12 of the Letters Patent to allow any amendment of a plaint which added to or altered the cause of action as pleaded in the original plaint and in respect of which leave under Clause 12 of the Letters Patent had been obtained prior to the institution of the suit. According to the learned counsel for the appellants leave under Clause 12 of the Letters Patent is a condition precedent to the institution of a suit and it can be given only once by the in respect of a suit at the time of its institution. ", "6. The attention of the has been drawn by the learned counsel for the appellants to decisions of the different High s which have a bearing on this point. The first decision to which reference was made is the casa of v. , ILR 15 Bom 93. In this case , J. after referring to certain decisions of the Calcutta, Madras and Bombay High s made the following observations: ", "\"From all these authorities it seems to me to result that the grant of leave under Clause 12 of the Letters Patent is a judicial act which must be held to relate only to the cause of action disclosed in the plaint as presented to the at the time of the grant; that such leave which affords the very foundation of the jurisdiction is not available to confer jurisdiction in respect of a substantially different cause of action which was not judicially considered at the time it was granted; that in respect of such a different cause of action leave under Clause 12 cannot be granted after the institution of the suit; and that therefore the cannot try such a different cause of action except in another suit duly instituted. It follows from this consideration that any amendment such as Mr. proposes to make in the plaint cannot be of any avail ..... ", "..... In the course ol the argument, I did, indeed, suggest that the might perhaps consider itself seized of the case by virtue of the leave when once granted and that being so seized of the case it might then proceed to deal with any application for amendment as in a case under the ordinary jurisdiction. But in view of the authorities above referred to as to the nature of the order under Clause 12 and having regard to the fact that the point is one relating, not to procedure, but to Jurisdiction, it appears to me that that suggestion cannot be maintained. ", "7. After making these observations the learned proceeded to consider the nature of the cause of action as pleaded in the original plaint and the nature of the amendment asked for and recorded the following conclusion at page 103: ", "\"I must therefore hold that in this case which is governed by Clause 12 of the Letters Patent, the leave of the was necessary under that clause to give the jurisdiction; that the jurisdiction so conferred was confined to the cause of action disclosed in the plaint as originally framed; and that the cannot now allow an amendment which shall substantially alter that cause of action. In this view it becomes unnecessary to consider whether the cause of action intended to be introduced into the suit by amendment would itself be one over which this could exercise jurisdiction without leave granted under Clause 12.\" ", "8. In this case the plaintiffs who resided at Indore and carried on business in Bombay by their , sued the defendants upon 17 Hundies which were drawn by the defendants from Sihore upon the plaintiff in Bombay in favour of several individuals and firms' in Bombay. The plaintiffs at the request of the defendants paid the said hundies on the defendants' account and called upon the defendants for repayment but as no repayment was made the plaintiffs filed the suit after obtaining leave under Clause 12 of the Letters Patent. The defendants took up the defence that the hundies in respect of which the suit had been brought were merely Items in one account comprising a long series of transactions between the plaintiffs and the defendants and they contended that the plaintiffs are not entitled to bring a suit in respect of certain selected items in an account but must sue for the balance, if any, upon the whole account. In their written statement they asked for an account after taking into consideration an the dealings between the plaintiffs and the defendants. At the hearing of the suit the learned counsel appearing for the plaintiffs submitted that the hundies sued upon were separate transactions but if the Court accepted the case of the defendants as set up in the written statement, opportunity might be given to the plaintiffs to amend the plaint. as pointed out already found that no such amendment could be allowed and dismissed the suit. ", "9. The next case that may be considered is reported in v. , ILR 20 Bom 767. In this case the plaintiff firm brought a suit against one for recovery of a sum of Rs. 53,883/4/9 In respect of certain commission agency transactions after obtaining leave under Clause 12 of the Letters Patent, alleging that was the owner of the defendant firm. In the written statement filed by the defendant It was denied that was the owner and It was stated that the firm belonged to her son who was then dead and who had left an Infant daughter . In consequence of these allegations in the written statement the plaintiff added as a party defendant to the suit but no fresh leave was obtained when was added as a party. At the hearing the learned counsel appearing for the added defendant relied on Section 22 of the Limitation Act and contended that when was added as a defendant, the suit was to be treated as instituted against her on that date and fresh leave under Clause 12 of the Letters Patent should have been obtained at that time. But no fresh leave having been obtained, the Court had no jurisdiction to entertain or try the suit so far as was concerned. At page 774 , J. in dealing with this question of jurisdiction observed inter alia as follows: ", "\"According to the view which has been always accepted in this Court, the leave required by Clause 12 of the Letters Patent must be granted, if at all, at the time of the acceptance of the plaint and cannot be granted afterwards. By Section 22 of the Limitation Act the suit as regards must be deemed to have been instituted when she was made a party. Then was the time if at all to apply for leave under the clause. To use language of the clause the \"suit\" was then \"received\" against , it cannot be inferred that leave was then allowed or granted.\" ", "The learned Judge ultimately held that the suit was not maintainable against and therefore dismissed the suit. ", "10. There is nothing in this decision to suggest that no fresh leave could at all be granted at the time was added as a party. On the other hand, the implication is that at the time was added as a party it was open to the plaintiff to apply for such leave. ", "11. The next decision to which reference may be made is that of v. , ILR 30 Bom 364. In this case the plaintiffs filed a suit In on 19th November 1904 against \"the firm of , as it was constituted on the 13th September, 1898 and the partners in the said firm on that date\" in respect of breach of an agreement dated the 13th September, 1898. On 22nd December, 1904 the plaintiffs obtained an order of amendment of the plaint and the plaint was subsequently amended by the addition of the names of Messrs. , , , and . The last named person Mr. was the executor of one who was a partner of the firm but who had died In the meanwhils. It was found that the four persons namely, , , and being members of the old firm who could be sued under the firm name, the suit as originally framed was maintainable against them. But with regard to Mr. , observed as follows: ", "\"Mr. was not a party to the suit at its admission. Even if leave subsequent to the admission of a plaint could be given under Clause 12 of the Letters Patent -- as to which I say nothing -- I am clearly of opinion that leave could not be given by the prothcnotary. Mr. therefore as the executor of Mr. iias wrongly been added as a defendant\". ", "Thus the question whether a leave subsequent to the admission of a plaint can be given under Clause 12 of the Letters Patent was left open by the learned Chief Justice. , J. against whose order the appeal had been preferred dealt with Clause 12 of the Letters Patent in the following manner: ", "\"If the leave under Clause 12 of the Letters Patent had not been obtained, and if the suit had been filed as an ordinary suit without any leave, no question as to the propriety of the amendment could possibly had arisen. But the difficulties have arisen only by reason of the fact that the amendments were introduced into a plaint which had been accepted under Clause 12 of the Letters Patent. For the decisions snow that very careful consideration is required before any amendments can be permitted in a suit accepted under Clause 12 of the Letters Patent, and if the amendments are material or go to alter in any way the character of the suit or the liabilities of the parties I think they would be open to very serious objection and may net be covered by the leave originally granted.\" ", "So this decision does not also lay down in any definite terms that no leave under Clause 12 of the Letters Patent can in any circumstances be granted in respect of amendments made In a suit filed with prior leave under Clause 12 of the Letters Patent. ", "12. The next decision to be considered is of , J. in the case of , AIR 1939 Bom 345. In this case a summary suit had been filed in the name of the plaintiff as a firm disclosing the names of six persons as partners of that firm. The case made in the plaint was that the defendants had given instructions to the plaintiff firm consisting of six persons as partners to effect certain transactions on his behalf; the plaintiffs acted as brokers and as a result of carrying out the transactions the plaintiffs had suffered loss and they claimed the same from the defendant. As the defendant was a resident of Surat it was alleged in the plaint that a part of the cause of action had arisen in Bombay and leave under Clause 12 of the Letters Patent was obtained before the plaint was filed. When the plaintiff firm took out a summoris for judgment, the defendant raised the contention that he had dealings with , the individual, and not with the plaintiff firm and so the firm consisting of the six persons had no cause of action against him and the suit was liable to be dismissed. Upon this plea being taken the defendant was granted an unconditional leave to defend the suit. Thereafter an application was made for amendment of the plaint and Choksey, the individual, continued the suit in his own name after consequential amendment had been made in the body of the plaint to the effect that it was , the individual, who had a cause of action against the defendant. But at the time the order for amendment was obtained no leave under Clause 12 of the Letters Patent was asked for or granted. At the hearing of the suit the learned counsel appearing for the defendant raised the objection that as no leave under Clause 12 had been obtained at the time the amendment was made, the had no jurisdiction to try the suit. , J. after referring to the decision in ILR 15 Bom 93, observed as follows: ", "\"In ILR 15 Bom 93 it was held that the leave granted was confined to the cause or causes of action set forward in the plaint at the time the leave was granted; hence the plaint cannot be amended so as to alter the cause of action, if an amendment which would alter the cause of action Is made it necessarily follows that fresh leave should be obtained in respect of the altered cause of action. In the present case it seems clear to me that the cause of action alleged to exist in the six persons against the defendant for their alleged employment as brokers by him, is clearly different from the alleged cause of action claimed to exist In , the individual .... ... ... ", "The two causes of action being thus entirely different and no leave having been obtained when , the Individual, desired to carry on the suit, this Issue must be found against the plaintiff and the suit should therefore be dismissed with costs.\" ", "13. It is clear from these observations of the learned Judge of that If an amendment is sought to be introduced in a plaint filed with leave obtained under Clause 12 of the Letters Patent and such amendment had the effect of altering the causes of action, then it was necessary to obtain fresh leave. So the implication of this judgment also is that when an amendment is asked for in a suit instituted with leave under Clause 12 of the Letters Patent it is open to the party applying for amendment to ask for fresh leave under Clause 12 of the Letters Patent and for the to grant such leave. ", "14. The Calcutta cases to which reference has been made by the learned counsel appearing for the parties may now be dealt with. The first case is that of of the 24 Parganas, AIR 1946 Cal 23 : ILR (1944) 2 Cal 101 which is a decision of Gentle J. In this case the plaintiff company filed a suit against the defendant for recovery of a sum of Rs. 1,04,000/- under six agreements on 22nd August 1941. After the trial of the suit commenced, some time in April 1943 the learned counsel for the defendant raised the question that the agreements upon which the claim was made were not binding or enforceable against the on the ground that they were not executed by the as required by the Act and the Rules made thereunder. Subsequently, both the plaint and the written statement were allowed to be amended and alternative claims made under Sections 65 , 70 and 72 of the Contract Act were introduced in the plaint by way of amendment. The leave to amend the plaint to include these claims was given on 17th November, 1943. Thereafter when the matter came up for further hearing the learned counsel for the defendant raised the contention that the had no jurisdiction to try the suit in respect of the claims introduced by way of amendment in the plaint inasmuch as fresh leave under Clause 12 had not been obtained at the time of the amendment in the plaint which had been originally filed after obtaining leave under Clause 12 of the Letters Patent. Gentle J. after pointing out that the original claim was only to enforce the terms of the agreement, but the claims which had been introduced by way of amendment were dehors the agreement and sought to enforce other rights, referred to the decisions of the Bombay High reported in ILR 15 Bom 93 and AIR 1939 Bom 345 and after setting out the scope and Implications of those decisions held as follows :- ", "\"In my opinion the has no jurisdiction to receive, try and determine the claims upon the causes of action In the amendment to the plaint since leave was not previously obtained in respect of those causes of action before the suit in which they are made was instituted in this .\" ", "15. Now if the entire process of reasoning in the Judgment of the learned Judge in arriving at this conclusion, is analysed, the Impression that is conveyed, is that according to the learned Judge an amendment to a plaint raising a new cause of action upon which a claim is made, is not a fresh suit but is an additional claim made in an existing suit, and it is not therefore permissible for the to grant fresh leave under Clause 12 and allow an amendment of the plaint at a subsequent stage of the suit. This is also the view which appears to have found favour with In the case of . After summarising the effect of the various decisions to which the attention of the learned Judge had been drawn, the learned Judge at page 286 (of ) : (at p. 641 of ) recorded the following propositions:- ", "\"Where by amendment of a plaint a cause of action is altered or a new cause of action added, it is not a new suit but the old suit in a new form. In such a case no amendment can be ordered if it requires leave to be granted under Clause 12 of the Letters Patent at the time of the amendment. ", "It follows that leave under Clause 12 of the Letters Patent cannot be granted in such a case at any stage after the institution of the original suit.\" ", "16. In the case of v. Debi Prosad Shaw 94 C.LJ. 160 G.K. Mitter J. after dealing with the decision of and the argument of hardship put forward by the learned counsel for the plaintiff observed as follows (pages 167-168):- ", "\"I agree that hardship may be caused to the plaintiff in these circumstances but I see no reason why I should differ from the judgment of Gentle which I have quoted, as also from the judgment of Kania of in AIR 1939 Bom 345 ..... once the cause of action is altered or added to it cannot in my opinion be said that the reception of the suit continues to be proper without the grant of fresh leave.\" ", "17. The last part of the observation of the learned Judge \"without the grant of fresh leave\" seems to indicate that fresh leave subsequent to the institution of the suit can be granted for the purpose of introducing an amendment to the plaint and if no such fresh leave is granted at the time of the amendment the reception of the suit although proper at the time of the institution of the suit ceases to be so and becomes improper by reason of no fresh leave having been obtained in respect of the amendment introduced in the plaint. So this learned Judge has construed the decisions of Gentle and of Kania in a manner different from D.N. Sinha In a later decision of this reported in . after dealing with the decisions of the Calcutta and to which I have referred and another decision of reported in held that in a suit which is filed with leave under Clause 12 of the Letters Patent only formal amendments or other reasonable amendments can be allowed, provided the amendment sought, does not affect the jurisdiction assumed by the originally either by adding to or altering the original cause of action as pleaded in the plaint and no amendment seeking to alter the original cause of action can be allowed by in a suit filed with leave tinder Clause 12, far the simple reason that the question involved is not one of procedure but of jurisdiction. The learned Judge disagreed with the interpretation put on the decisions of Kania and Gentle by Krishnaswami Nayudu in the Madras case. ", "18. This very point also came up for consideration in an unreported decision of in suit No. 1457 of 1955 (Ramballav Rameshwar v. , judgment D/- 6-9-1961 (Cal). The learned Judge placed strong reliance on a Bench decision of this Court reported in , 84 Cal LJ 200 in which observed that - ", "\"It is now established that leave originally obtained at the time of the filing of a suit does not cover an amended plaint. Where a defendant is added fresh leave must be obtained even if leave had been obtained when the suit was originally filed. It is contended that there was no change in the cause of action. Even so if new parties are joined against whom it is intended to proceed In the suit and to obtain a decree, the obtaining of the leave is imperative because it is the foundation of the jurisdiction of the . The gets jurisdiction to decide the suit against parties only if it grants leave which is a condition precedent. No leave was obtained to proceed against the only added defendants and it follows that the never got any jurisdiction to make any decree or order against them in the suit.\" ", "19. Relying on this observation and also analysing the Bombay and Calcutta decisions referred to in his judgment, the learned Judge has come to the conclusion that under certain circumstances fresh leave under Clause 12 of the Letters Patent can be granted in respect of an amendment introduced at a stage subsequent to the filing of the suit which is instituted after obtaining prior leave under Clause 12 of the Letters Patent. ", "20. The attention of the was also drawn to two decisions of of this reported in and . In the first mentioned case the learned Judge held that no fresh leave was required for including an alternative relief by way of amendment in the plaint in a partition suit comprising lands partly within and partly outside the jurisdiction of this and instituted after obtaining leave under Clause 12 of the Letters Patent. But in view of the conflict of decisions on the point the learned Judge took the precaution of granting fresh leave in respect of the amendment. In the last mentioned case where a person was added as defendant at his own instance to a suit filed after obtaining leave under Clause 12 it was held by the learned Judge that no fresh leave was necessary. ", "20a. Such being the state of authorities, I am disposed to think that to accept the argument of the appellants will be to put a very narrow and rigid construction an the wordings of Clause 12 and to defeat the true purpose and effect of that clause. Clause 12 sets cut the different circumstances under which can receive, try and determine suits in the exercise of its Ordinary Original Civil Jurisdiction. One of the circumstances is that if part of the cause of action arises within the local limits of the Ordinary Original Jurisdiction then with the leave of the first obtained the becomes empowered to receive, try and determine the suit. So the granting of leave is a condition precedent to the acquiring or becoming vested with jurisdiction in respect of such a suit. Clause 12 deals with the question of jurisdiction only. It does not deal with the procedure regulating the trial and determination of suits. The power of the to deal with matters of amendment of pleadings for determining the real question in controversy between the parties is derived from the Code of Civil Procedure. This power of amendment inheres in the for trial and determination of suits of every description in respect of which it acquires jurisdiction under Clause 12 of the Letters Patent. But as in cases where part only of the cause of action arises within jurisdiction or part only of the land is within jurisdiction the obtaining of the leave of the is made a condition precedent to the assuming or acquiring Jurisdiction the judicial decisions have laid down that any substantial or material addition to or alteration of the cause of action as pleaded in the original plaint is dependent on obtaining of prior leave of the , inasmuth as the question of amendment and the question of jurisdiction are inextricably linked up in such cases. Similarly when a new party is added to a suit the cause of action is laid as against him for the first time when he is so added and consequently in such a case the obtaining of fresh leave has been held to be imperative. It appears to me that this view accords with reason and common sense and the decisions which hold that leave under Clause 12 can be granted by the only once at the time of the institution of the suit, and no amendment at all can be allowed of any plaint filed with the leave of the have put a wrong construction on the language used in Clause 12. ", "21. With regard to the nature of amendment asked it is sufficient to point out that the amendment proposed to be introduced cannot be said to be a totally new or inconsistent cause of action. The proposed amendment seeks to set forth certain anterior events which have close relation to and are connected with the subject matter of the original suit. As I have pointed out already certain assignments and agreements have been introduced by the amendment in order to supply the missing links in the chain of the cause of action to show the origin, devolution and accrual of the cause of action in respect of which the plaintiff firm has brought the suit, cut of which the appeal arises. ", "22. In my view the order made by is right and it should be upheld. ", "23. The only other question which has been raised in this appeal is whether an appeal lies from the order allowing the amendment and granting fresh leave under Clause 12 of the Letters Patent. Now if the order in the present case had been an order of amendment simpliciter it might very well have been contended that such an order was not an appealable order. Because by a mere order allowing certain amendments or some new grounds of claim to be raised in the pleadings there is no determination of ihe rights of the parties on any question between them. As observed by , A.C.J. in the case of v. , AIR 1946 Bom 361. ", "\"The effect of the amendment only is that the plaintiff will be allowed to raise that contention. The granting of leave to amend does not amount to admitting that those contentions are valid or that the plaintiff will get the relief because of those contentions. They will be decided at the fearing on the merits of the disputes between the parties ..... It is only an order in respect of the procedure of the suit ..... It is however clear that the order for amendment as made in the present case does not in any way deal with the jurisdiction of the or affect its jurisdiction.\" ", "24. in the same case also made similar observations in his judgment. At page 363 the learned Judge stated thus :- ", "\"Order 6 Rule 17 has nothing whatsoever to do with jurisdiction. It proceeds on the assumption that the has the jurisdiction in a suit pending before it to order amendment of pleadings. All that Order 6 Rule 17 provides is the mode in which the should exercise that jurisdiction.\" ", "25. This view has found favour with this court. So if the order appealed against in the present case would have been an order of amendment pure and simple this Court would have been inclined to take the view that no appeal lay from such an order. But in the present case the question is further complicated by the fact that fresh leave under Clause 12 of the Letters Patent was granted in respect of the amendment, as such leave was found necessary in view of the provisions of Clause 12 of the letters Patent. It was held in the case of v. ", ", 3 Mad HCR 384 that an appeal lies from the decision of a judge exercising Original Jurisdiction refusing to give leave to institute a suit on the Original Side of the High in a case in which the cause of acton has arisen in part within the Ordinary Original Jurisdiction of the High . In the case of v. , 3 Mad HCR 21 an appeal from an order granting leave under Clause 12 of the Letters Patent by a learned judge of after another learned Judge of co-ordinate jurisdiction had refused leave in respect of substantially the same cause of action was entertained by and the order was set aside as being irregular and an abuse of the process of the . It is to be noted that no objection was raised in that case as to the competency of the appeal. ", "26. In the case of decided so far back as in 1874 and reported in 21 Suth WR 303 where a suit had been instituted in this Court after obtaining leave under Clause 11 of the Charter which corresponds to Clause 12 of the Letters Patent for setting aside a release and the defendants made an application for the plaint being taken off the file, rejected the application. An appeal was taken against the order and the question of maintainability of the appeal was raised before . The learned Chief Justice Sir in dealing with the question of competency of the appeal observed :- ", "\"It was held by at Madras in 3 Mad HCR 384 that an order made under this clause of the Charter was subject to appeal. We may not agree in all the reasons which the learned Judges of that gave for their decision, but we do agree in the conclusion that this is an appealable order. It is of great importance to the parties. It is not a mere formal order or an order merely regulating the procedure in the suit, but one that has the effect of giving a jurisdiction to the which it otherwise would not have and it may fairly be said to determine some right between them, namely, the right to sue in a particular and to compel the defendants who are not within its jurisdiction to come in and defend the suit, or, if they do not, to make them liable to have a decree passed against them in their absence.\" ", "These observations of the learned Chief Justice make ft abundantly clear that an order made under Clause 12 of the Letters Patent is subject to appeal inasmuch as it is not an order merely regulating the procedure of the suit but one which affects the jurisdiction of the . So when the question of amendment of the pleading and the question of leave under Clause 12 of the Letters Patent are inter-connected or in other words when the question of procedure and the question of jurisdiction are mixed up and one cannot be dissociated from the other, the order dealing with such question of procedure and jurisdiction is in my view an appealable order and it is a judgment within the meaning of Clause 15 of the Letters Patent. ", "27. in a more recent decision of this Court reported in it has been held relying on the decision of Sir to which I have already referred that an order refusing to rescind a leave granted under Clause 12 of the Letters Patent is a judgment and is appealable under Clause 15 of the Letters Patent. at pages 567-568 (of ): (at pp. 732-733 of AIR) relied on the observations of Sir in case, 21 Suth WR 303 and also referred to the decision of in and particularly to the observations of made- in connection with the decision of Sir reported in v. Camaji Bomanji, ILR 29 Bom 249 where the learned Chief Justice expressed the view that an order refusing to rescind a leave granted under Clause 12 of the Letters Patent was a judgment and was appealable as such and proceeded to point out that although did not express any final opinion as to the propriety or otherwise of the view expressed by Sir the fact remains that did not disapprove of the decision of Sir and as he himself did not see any reason to differ from the decision of Sir , he agreed with the reasoning expressed in that decision. Thus there is a Bench Decision of this Court in which an order refusing to rescind a leave under Clause 12 has been held to be a judgment and as such appealable under Clause 15 of the Letters Patent and as In my view there is no difference between an order refusing to rescind a leave under Clause 12 and an order granting leave under Clause 12, I am at a loss to understand why the order made in the present case granting fresh leave in respect of the amendment asked for cannot be said to be a judgment from which an appeal lies under Clause 15 of the Letters Patent. I hold that the order appealed from is a judgment within the meaning of Clause 15 of the Letters Patent and as such the objection as to the maintainability of the appeal must be overruled. ", "28. But in view of my finding that the order of is right this appeal must fall and it is accordingly dismissed with costs. Certified for two Counsel. ", "29. The operation of the order of dated the 28th March 1961 will remain stayed till the 16th January, 1962. ", ", J. ", "30. I agree in the conclusion reached by my Lord the Chief Justice that the appeal should be dismissed but I do so on somewhat different grounds. ", "31. Two questions have in the main been debated in this appeal: First whether in a suit brought with the leave of the court under Clause 12 of the Letters Patent, amendment of pleadings Is at all allowable, and if so, whether fresh leave Is required; secondly, whether the order giving such leave is appealable. ", "32. The plaintiffs, a firm of Commission Agents Instituted the suit against the defendants for a decree for a certain sum of money; in the alternative, a claim for accounts without disturbing settled accounts was made end a decree for such sum as may be found due on taking accounts was prayed for. The plaintiff firm alleged that part of the cause of action had arisen within the original jurisdiction of this Court and consequently asked for leave under Clause 12 to Institute the suit. The leave having been granted the suit was taken on file and the defendants put in their written defence. Thereafter, fresh leave under Clause 12 to amend the cause title and certain pleadings In the plaint was asked for. The learned trial Judge heard the parties on the proposed amendments and gave leave again with liberty to the defendants to file an additional written statement. This order was made on March 28, 1961 against which the defendants have appealed. ", "33. The material provisions of Clause 12 of the Letters Patent are \"..... the said at Fort William in Bengal ..... shall be empowered to receive, try and determine suits of every description if ..... the cause of action shall have arisen either wholly or in case leave of the court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said ....\" ", "34. It is plain from the language employed that where only a part of the cause of action has arisen within jurisdiction, has first to give leave in order to receive, try and determine the suit. The leave has la be given at the time of admission of the plaint and cannot be granted afterwards. The courts have gone further and held that the decision to give leave or to withhold it, is a judicial act and the order giving leave or refusing it, is subject to appeal. That was the view taken as long ago as 1868 in the case of 3 Mad HCR 384 where it was held that a Judge exercising discretion vested in him by Clause 12 of the Charter upon an ex parte application lor leave to bring a suit, acts judicially and his decision is a judgment subject to appeal under Clause 15. This view was endorsed by , C. J. in the case of 21 Suth WR 303. It was ruled that where leave was necessary, such leave must be obtained as a condition precedent to the institution of the suit. The order made under Clause 12 was accordingly held appealable on the footing that it was not a formal order, or an order merely regulating procedure in the suit, but one which has the effect of giving jurisdiction to the court which it otherwise would not have. It was explained that a decision giving leave or withholding it amounts to a determination of some right between the parties, namely, the right to sue in a particular court and to compel the defendants who are not within its jurisdiction to come In and defend the suit, or if they do not, to make themselves liable to have a decree made against them in their absence. This position was reaffirmed in a decision of this of v. , ILR 34 Cal 619 where , C.J. held, on a consideration of the relevant authorities, that the order granting leave to sue under Clause 12 of the Letters Patent Is a judicial and not merely a procedural or administrative act; the leave has to be granted by a Judge of the and it is not competent for the court to delegate this function to one of its officers. The leave given creates jurisdiction which determines a right between the parties, namely, the right to sue in a particular court. ", "35. held in the case of that leave granted under Clause 12 constitutes the very foundation of the suit which is instituted on Its basis. Even a distinction was made between leave under Clause 12 and leave given under Clause 13 directing removal of a suit from one court to another. ", "36. It seems clear that the leave contemplated In Clause 12 of the Letters Patent must be given before a suit, in which the cause of action has arisen partly within jurisdiction, can be received, tried and determined by on its Original Side. The leave is a condition precedent which has to be fulfilled before the court can in a case of this kind assume powers over parties to the dispute and the subject matter of the dispute. Such leave has to be expressly given and cannot be inferred from the mere fact that the suit has been allowed to go on where only a part of the cause of action has arisen within jurisdiction. ", "37. If such Is the position the question then arises whether amendment of pleadings can be allowed in a suit brought with leave under Clause 12. There is no provision in the Letters Patent providing for leave to be given again to amend the pleadings. It is therefore for consideration whether any amendment of pleadings can at all be allowed in such suit, and if allowed, whether fresh leave is required for such amendment. ", "38. The Letters Patent by its Clause 37 provides for regulation of proceedings in civil cases. It authorises to make rules and orders for the purpose of regulating all proceedings in civil actions which may be brought before it and says that shall be guided in making such rules and orders as far as possible by the provisions of the Code of Civil Procedure or of any law by which the Code may be altered or amended by competent legislative authority. In the absence of any direct provision in the Letters Patent, it would not perhaps be wrong to look to the Civil Procedure Code for guidance in the matter. Order 6 of the Code deals with pleadings generally and R. 17 provides that the may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and ail such amendments shall be made as may be necessary for the purpose of determining the real questions In controversy between the parties. The Letters Patent Itself enjoins reference to the Civil Procedure Code for guidance in the matter of rules to be framed by the for regulating its own procedure. Order 49 of the Code expressly exempts from the operation of certain rules contained in Its first schedule. The exemption relates to service of processes, the manner of taking evidence or recording of judgment and orders. Rule 3 enumerates the rules and orders which will not apply to in its ordinary or extra ordinary original civil Jurisdiction. It is to be observed that Order 6 which deals with pleadings generally is not one of the orders mentioned in Rule 3 of Order 49. The result is that there is nothing either in the Letters Patent or In the Code which prevents application of the rules relating to pleadings contained in Orders 6. Prima facie it seems right to hold that amendment of pleadings can be allowed in suits brought with leave under Clause 12. The opposite conclusion can only result in deprivation of the right of the suitor to amend his pleadings in such suit. ", "39. The contention on behalf of the appellants has been that no amendment of pleadings can be allowed In such suits for the reason that amendments have the effect of altering or adding to the original cause of action upon which leave under Clause 12 was asked for and obtained. The argument is that the very notion of amendment is repelled by the condition prescribed in Clause 12 which requires the Judge to give leave first and then to receive, try and determine the suit. I agree; leave which confers jurisdiction cannot be given piecemeal; leave once given is given for trial to a close, and cannot be repeated. The Judge when giving leave exercises his judicial mind on the facts making up the cause of action originally stated in the plaint. Broadly speaking the notion of fresh leave, appears to be abhorrent to the concept of leave in Clause 12 since such leave constitutes the very foundation of jurisdiction, and jurisdiction cannot be created or conferred in instalment. A concession has, however, been made on behalf of the appellants that if any amendment does not entail substantial alteration of the cause of action, the amendment may be allowed even in such suits. ", "40. The argument has been sought to be reinforced by a decision of in the case of ILR 15 Bom 93, where Telang, J. held on reference to the authorities that since leave tinder Clause 12 is a judicial act which must be held to relate only to the cause of action disclosed in the plaint as presented to the at the time of the grant of such leave, no amendment of pleadings can be allowed. The learned Judge felt pressed by the weight of judicial opinion to hold that since the leave affords the very foundation of the 's power to deal with the dispute, it is not available to confer jurisdiction in respect of a substantially different cause of action which was not judicially considered at the time the leave was granted. This view has found favour with , J. in the case of AIR 1946 Cal 23, who also held that leave under Clause 12 being a condition precedent to jurisdiction to receive, try and determine the claims contained in the plaint, the has no jurisdiction to determine other claims founded upon causes of action in the amendment on the ground that leave had not previously been obtained in respect of the amended pleadings. ", "41. In my opinion, these decisions proceed on the assumption that every amendment necessarily implies a complete change of cause of action. As is well known a cause of action means every fact which if traversed, it would be necessary for the plaintiff to prove In order to support his right to entitle him to a decree; it includes everything which if not proved would entitle the defendants to an immediate judgment; it is a bundle of essential facts set forth in the plaint and those facts are the media upon which the plaintiff asks the to pronounce in his favour. It is equally well known that there may be parts of a cause of action same of which may only be an elaboration of the main facts upon which the plaintiff founds his claim to relief. The Letters Patent itself refers to cause of action arising wholly or in part within jurisdiction. As , aptly observed in the case of 3 Mad HCR 384, that \"the words cause of action may have either the restricted sense of immediate occasion of the action or the wider sense of necessary conditions of its maintenance. In the one sense it is the mere matter of fact the failure of the defendant to do or forbear from doing, to give, or make good that which the plaintiff's right entitles him to insist upon. In the other, it is this matter of fact plus the right resident in the plaintiff. Failing the former an injury is inconceivable; failing the latter, the right cannot assume the special shape of an action.\" ", "42. It seems plain that several facts pleaded upon which the claim to relief is founded may well have ancillary facts which are more or less of a subsidiary or explanatory in character. Where therefore an amendment of the pleadings does not introduce an altogether new set of facts which changes beyond recognition the original cause of' action, there cannot possibly be any objection to such amendment being allowed in a suit brought with leave under Clause 12 of the Letters Patent. Within the limits permitted by the law, there may be several causes of action joined together and trial of such action is a familiar feature of the law of procedure. There are circumstances where such joinder is forbidden; but where, within the limits prescribed, several causes of action are Joined which do not bring about multifariousness, joinder is permissible and the suit may well proceed to judgment. ", "43. The question whether amendment can be allowed In a given case Is always a matter for the exercise of the 's Judicial discretion. Amendments are, as a matter of fact, liberally allowed and R. 17 of Or. 6 expressly provides that a may at any stage of the proceedings-allow either party to alter or amend his pleadings. Such amendments have of course to be necessary for the purpose of determining the real question in controversy between the parties. The only inhibition against allowing amendments appears to have been indicated by in the case of , 48 Ind App 214 : (AIR 1922 PC 249), where it was said that the has no power to enable one distinct cause of action to be substituted for another in order to change by mesne of the amendment the subject matter of the suit; at the same time it was held that all rules of are nothing but provisions intended to secure the proper administration of justice, and it is therefore essential that they should be made to serve and be subordinate to that purpose, so that the full power of amendment must be enjoined and always be liberally exercised. This observation implies that it is not open to the to permit altogether a new case to be made. Substantially the same view had been expressed by in the earlier case of , 47 Ind App 255 : (AIR 1921 PC 50), that the discretion exercised in allowing an amendment should not be interfered with. It was held that although the power of the to amend the plaint in a suit should not be exercised where the effect is to take away from the defendant a legal right which has accrued to him by lapse of time, still there are cases in which that consideration is outweighed by the special circumstances of the case. These observations were endorsed by the Supreme in the case of . in which that gave leave to amend the plaint even at that stage by allowing an alternative claim for damages for breach of contract for non-delivery of goads despite the respondent's opposition. It was held that interests of justice required that the amendment should be allowed even though a suit on the amended cause of action was barred by limitation. ", "44. It is, in my view, not right to contendi that amendment will, when allowed, affect jurisdiction. Clause 12 speaks of leave being given to receive, try and determine a suit. Amendment can only mean additions or alterations to the suit. There can be no question of leave being given to amendments which are by the very nature of things mere additions or alterations to the pleadings in the suit. The leave spoken of in Clause 12 gives jurisdiction to receive and determine the suit. There can be no question of leave to amendments under that Clause. Under the general law regulating amendments of pleadings, the may give leave to amendments being made to pleadings, but such leave controlled and guided by Orders 6, Rule 17 has nothing to do with the leave under Clause 12 which when obtained enables the party to commence the suit. Leave under Clause 12 affects jurisdiction but leave or allowance under Orders 6, Rule 17 is entirely procedural; such allowance has nothing to do with jurisdiction. As was observed by , J. in the case of AIR 1946 Bom 361, an order for amendment of pleadings does not in any way affect the jurisdiction of the . When the allows an amendment it proceeds on the basis that the has jurisdiction to try the suit and regulate its. own procedure by allowing amendment of pleadings. Rule 17 only provides the mode in which the should exercise jurisdiction which it possesses. It must therefore be held that jurisdiction and procedure are entirely different categories and the two cannot be confused. Procedure becomes relevant only when there is jurisdiction to regulate it; the former is merely the machinery to reach a decision which the latter conditions and authorises. ", "45. If such is the result, there can be no question of leave being granted to an amendment of pleadings under Clause 12 of the Letters Patent. If the proposed amendment is not allowable by reason of its being wholly inept or unnecessary for the purpose of determining the real question in controversy between the parties, it is bound to be disallowed. That disallowance takes place in the exercise of the 's discretion given to it by Orders 6, Rule 17. It can have nothing to do with jurisdiction contemplated in Clause 12 of the Letters Patent. I agree there can be no such thing under Clause 12 as leave by instalment. Once such leave has been given, the acquires jurisdiction over the subject matter and the parties to the dispute. In the course of the trial the dispute may take on new aspects in consequence of the amendment allowed; but being an amendment it must be assumed to have gassed the initial iest that it is related to the main cause of action and necessary to enable the to determine the real question in controversy over which the has already assumed jurisdiction by reason of the leave given under Clause 12. An amendment must, by the very nature of things, be subsidiary to the main facts constituting the cause of action; and once the has by its leave given under Clause 12, become seized of the dispute, it cannot consider itself disseized or robbed of jurisdiction by reason of the amendment allowed. I cannot conceive that the right of amendment which is a valued right is denied to a suitor who has asked for and obtained leave in terms of Clause 12. If it is right to hold that amendments cannot be allowed in a suit brought with leave, that would obviously imply denial of the right of amendment of pleadings and make the rules contained in Orders 6 a dead letter. Amendments are made in the course of the trial; but the trial cannot commence until there is already jurisdiction in the court; and once jurisdiction is there to try the action, the amendments are assimilated to the main pleading upon which leave to receive, try and determine the suit was had, and obtained. To hold therefore that amendment requires fresh leave is to say that jurisdiction has again to be created to receive the amendment in order to relate it to the original cause of action upon which the leave was granted. I for one do not see how on principle it could be said that an amendment requires fresh leave under Clause 12 except perhaps in one case to which I shall presently refer. ", "46. Where for the purpose of addition of parties an amendment is introduced, it has necessarily the effect of enlarging the scope of the suit. The acquires jurisdiction upon the added party for the first time when he is brought into the proceeding. The 's jurisdiction has to be related to the cause of action as much as to the parties to be affected by its decision. Indeed, the has no jurisdiction over such added party until the amendment was allowed. An order made or decree passed in the suit would not have affected him if he was not a party to it. In such a case it must be held that when the acquires jurisdiction upon such added party, there has to be leave given under Clause 12 so as to make him amenable to the 's jurisdiction. For the party thus added, the suit commences when he is brought on the record. But before the can exercise jurisdiction over him, there has to be leave given in so far as he is concerned. That seems to be the position in view of Section 22 of the Limitation Act which says that where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he is made a party. In a case of this kind the suit, in fact instituted earlier, must by a legal fiction be held to have been Instituted at the lime when he is put into the proceedings and made a party. This view was accepted in the case of 84 Cal LJ 200, where , J. who spoke for the , held that leave has to be obtained for the addition of parties although the suit has been commenced with leave already obtained under Clause 12. This view accords with the principle that leave once given under Clause 12 enures, and no farther leave is required or can be given when amendments to pleadings have been allowed by the . Leave repeated under Clause 12 in the course of the suit seems to be repelled by the clause itself, except upon addition of party, when leave becomes imperative, since the then acquires for the first time jurisdiction over him. In all other cases amendments when allowed merely adhere to the original cause of action upon which the Judge's mind was exercised when he decided judicially to receive, try end determine the suit. ", "47. I am inclined to agree with the view taken by , J. in the case of , that where by amendment of plaint a cause of action is added, it is not a new suit but the old suit in a new form. If by \"new form\" the learned Judge meant that it is the old suit with certain facts added to the original cause of action, I should have no difficulty in accepting his conclusion. As I understand it, no amendment can be allowed under the rules of pleading if it is of such a character as to alter completely the nature of the original cause of action and make leave under Clause 12 imperative. An amendment such as this cannot be allowed under R, 17 of Orders 6; and if such amendment is allowed it would import an altogether new cause of action entirely foreign to the original one, and it would only be fit to be tried separately. In my, view, no leave need be asked for when an amendment, properly so called, is made since the court once seized of the original cause of action is quite entitled to entertain amendments in terms of Orders 6, Rule 17 of the Code of Civil Procedure. I agree that where a new party is added, the suit as regards the added party must be deemed to have been commenced on the date he is brought into the proceedings, in such case it is necessary to grant leave under Clause 12 in order that the may assume jurisdiction ever such added party. ", "48. The Bombay decision in , ILR 30 Bom 364, is of little assistance. This was a suit brought with leave but it was held on appeal that the leave was unnecessary. A party had been wrongly added and Chief Justice commenting upon it observed that leave could not have been given by the 's Officer; as to whether leave subsequent to the admission of a plaint could be given the learned Chief Justice observed that he wished to say nothing. ", "49. But another Bombay decision in AIR 1939 Bom, 345, is instructive. , J. (as he then was) observed that the obtaining of leave Wider Clause 12 being the foundation of the 's jurisdiction, such leave cannot be given afterwards. The cause of action which was a right to sue vested in six persons in that case was held as being not the same as the right which existed in an individual; when, therefore that individual desired to carry on the suit without the leave first had and obtained, the learned Judge thought that the suit deserved to be dismissed. ", "50. In the case of 94 Cal LJ 160, accepted the view expressed by in the case of , but added that once the cause of action was altered it could not be said that the reception of the suit \"continued to be proper\" without the grant of fresh leave. The learned Judge repelled the contention that amendments ought to be allowed in suits brought with leave to prevent hardship and held that a suitor who sought to take advantage of Clause 12 cannot be heard to complain if through his own default he omitted to include a ground of relief which was available to him at the time of the institution of the suit. I am unable to agree that there is such a thing as \"fresh leave\". The leave is the initial thing and when a party is added and leave given, it is also the initial leave so far as he is concerned. ", "51. I am unable to agree with , J. who seems to have held in that fresh leave can be granted upon the plaintiff's application to amend his plaint. As I have said amendments, properly so called, of the original cause of action do not require fresh leave since they are mere amendments. When the is once seized of the suit, it is seized for all purposes and it can allow an amendment provided it is necessary for determining the controversy between the parties. That I think is the true view since an amendment of pleading is merely procedural, whereas leave under Clause 12 is fundamental and jurisdictional. ", "52. , held in case that only formal amendments or reasonable ones can be allowed if they do not affect the jurisdiction assumed by the court originally under Clause 12. While it is not easy to see what is meant by formal amendment, the learned Judge seems to be inclined to the View that leave once granted cannot be repeated. Mallick had occasion to deal with the question in a slightly different form in the case of in which the learned Judge referred to an earlier decision of his and expressed the view that in a suit for land partly situate within jurisdiction which required leave to be obtained under Clause 12 of the Letters Patent, fresh leave for amendment was not necessary if the plaint was subsequently amended. But this statement has to be taken with a qualification since the new cause of action related to land situate wholly within jurisdiction; the facts of the case did not quite clinch the issue as to whether fresh leave was necessary consequent upon an amendment. ", "53. In a recent unreported decision of this in the case of Suit No. 1457 of 1955 (Cal) held that it is open to the to grant fresh leave under Clause 12 to amendments of pleadings. At the same time the learned Judge held that amendment is a matter of procedure and procedure is different from jurisdiction, the two being entirely separate concepts. For the reasons given I am unable to accept the view that fresh leave can be given to amended pleadings even though they do not involve addition of parties. ", "54. It is plain that judicial opinion has been divided on the question whether an amendment of pleadings requires fresh leave under Clause 12. But I think it has to be held that amendment is entirely procedural and has nothing to do with jurisdiction. There is nothing in the Letters Patent which will encourage the view that in a suit brought with leave under Clause 12, the suitor is to be deprived of the right to amend his pleading where such amendment can be properly allowed. In my view, he has that right within the limits of Order 6 Rule 17. This is essentially a procedural right which has nothing to do with jurisdiction which leave under Clause 12 confers. For amendments, he docs not require leave again under Clause 12. Indeed, jurisdiction cannot he acquired in instalments and the question of leave under the clause during the pendency of a suit can only arise when a new party is brought into the proceeding by way of an amendment. But in such case it will not he leave repealed, but only leave given, since by such leave the acquires jurisdiction for the first time. In the present case Counsel for the appellants conceded that in substance there has been no amendment by addition of parties. The question need not therefore be pursued and the effect of such inconsequential amendment need not be considered. ", "55. The other main question debated relates to the appealability of an order giving leave to amend the pleading. An order giving leave or refusing leave under Clause 12 or even refusing to rescind the leave given has been held to be appealable under Clause 15 of the Letters Patent. In 3 Mad HCR 384 the decision proceeds on the footing that an appeal lies from the decision of a Judge exercising original jurisdiction refusing to give leave to institute a suit in which the cause of action has arisen In part within the ordinary original jurisdiction of . The decision in case, 21 Suth WR 303 also proceeds on the same looting. The decisions have turned on the construction put upon the word \"Judgment\" under Clause 15 and it has generally been held that the word \"judgment\" must be taken to mean a decision which determines some liability affecting the merits of the controversy between the parties. It is unnecessary in the present case to elaborate this aspect of the matter since the immediate question before us is one of appeal from an order allowing an amendment. The Civil Procedure Code does not allow an appeal from an order under Rule 17 of Orders 6. But the question may arise in another form. If an amendment requires fresh leave under Clause 12, the order granting such leave or refusing it, may attract a right of appeal. In the view I have taken amendments properly allowed under Rule 17 of Orders 6 being entirely a matter of procedure does not relate to jurisdiction and consequently no question arises of an order permitting or refusing such amendments being held appealable. But even then it may perhaps be argued that such order amounts to a decision affecting the rights of a suitor. This aspect of the matter was considered at some length in the case of by , C. J. who held that the word \"judgment\" in Clause 15 of the Letters Patent must be taken to mean a decision on a question touching the merits of the controversy between the parties. A distinction was made between controversy regarding rights to the subject matter of the suit and controversy about the ground upon which such rights are asserted or denied. Where a plaint is properly allowed to be amended, it merely means that the plaintiff has been permitted to include a new ground of relief; an order permitting such amendment decides nothing, affects no rights and curtails no claim of the defendant to challenge the new ground. The effect of such an order is merely that the plaintiff is allowed to make a claim and it does not mean that the claim has been rightly made. It has accordingly been held that the order permitting amendment is merely an order regulating procedure of the court regarding the manner in which the parties will state their cases with the consequence that no substantive rights are thereby affected. The learned Chief Justice pointed out that if substantive rights which are the rights in controversy between the parties to the suit are not affected by an order permitting an amendment, such order cannot amount to a 'judgment' and therefore cannot be held to be appealable. It was therefore held that ai order allowing an amendment of the written statement to raise the plea that the suit was barred by limitation and that the plaintiff was not entitled to succeed on the ground of adverse possession was not 'Judgment' within the meaning of Clause 15 of the Letters Patent and was therefore not appealable. I respectfully agree with this view. ", "56. An order of amendment of pleadings is not by Itself appealable and in my opinion no question of leave under Clause 12 of the Letters Patent arises in suth case, since leave under that clause being a matter of jurisdiction Involves decision of some kind affecting the merits of the controversy. But amendment of pleadings being entirely procedural, an order allowing or refusing it decides nothing, does not affect the merits of the controversy and is consequently not appealable except where jurisdiction is assumed over added parties by leave being given under Clause 12 of the Letters Patent. ", "57. I would therefore dismiss the appeal."], "relevant_candidates": ["0000014789", "0000362389", "0000379593", "0000631746", "0000645052", "0000908527", "0000975807", "0001064060", "0001997407"]} {"id": "0000327202", "text": ["JUDGMENT Divan, C.J. ", "1. The petitioners in each of these two special civil applications are the same, namely, a limited-company, carrying on business of manufacturing textile cloth in Ahmedabad. The petitioners, namely, and , Income-tax Officer, , are respondents in both these special civil applications. The two special civil applications refer to separate notices issued by the second respondent in each of these special civil application under section 147(a) of the Income-tax Act, 1961, seeking to reopen assessments for different years and the grounds on which the assessments are sought to be re-opened are identical. The petitioners challenge these notices under section 148 of the Act of 1961 seeking to re-open assessments under section 147 . Special Civil Application No. 517 of 1971 refers to notices to re-open assessments for assessments years 1962-63 and 1963-64 whereas notices which are challenged in Special Civil Application No. 218 of 1972 are in connection with re-opening of the assessments for assessment years 1964-65 and 1965-66. Since the notices for these four different reassessment years are being challenged on the same grounds, it will be convenient to dispose of both these special civil application by this common judgment. ", "2. The petitioners have their registered office at Commercial Ahmedabad Mills' Premises, near Idga Chawky, Asarwa, Ahmedabad, and the petitioners are owners of two textile units both of which are situate at Ahmedabad. The petitioners have been assessed to Income-tax under the Indian Income-tax Act , 1922, and after the coming into force of the Income-tax Act , 1961, under that At as well. The assessments of the petitioners for the assessment years 1958-59 to 1965-66 were completed in due course. At the time of assessment, according to the petitioners, they had disclosed truly and fully all particulars necessary for the grants of depreciation allowance and had also furnished the relevant particulars of sale of assets, in the respective assessment years as and when such sales took place. It is the case of the petitioners that after verifying the records, the assessments of the petitioners had been completed and in the course of those assessments, the petitioners were granted necessary depreciation allowance while the liability on account of balancing charge on sales of assets was also brought to charge in the respective assessment years 1962-63 to 1964-65. By his letter dated March 18, 1971, the second respondent intimated to the petitioners that he intended to initiate proceedings against the petitioners under section 147(a) of the Act of 1961, in respect of assessment years 1962-63 to 1965-66 the corresponding accounting years being 1961 to 1964. This action was proposed because, according to the second respondent, the petitioners had been granted excessive depreciation allowance in assessment years 1960-61 to 1965-66 and the second respondent further stated in the said letter that certain capital gains arising on transfer of assets had not been assessed in assessment years 1962-63 to 1964-65. By the letter dated March 24, 1971, the petitioners intimated to the second respondent that the action proposed to be taken by the second respondent was without jurisdiction and/or without authority of law. The petitioners further contended that no income had escaped assessment by reason of failure or omission on the part of the petitioners to disclose fully and truly all material facts necessary for the assessments for the relevant years. Thereafter, two notices, both dated March 30, 1971, were issued by the second respondent. Those notices were in respect of assessment years 1962-63 and 1963-64 and they were issued under section 148 of the Income-tax Act 1961. These notices were issued as, according to the second respondent, income chargeable to tax for the said two assessments years had escaped assessment within the meaning of section 147 of the Act and the second respondent proposed to reassess the income for the said assessment years and had called upon the petitioners to submit returns in the prescribed form. These two notices, both dated March 30, 1971, have been challenged in Special Civil Application No. 517 of 1971. Thereafter, on January 17, 1972, two further notices were issued by the second respondent in respect of assessment years 1964-65 and 1965-66 and these notices, exhibit-B collectively to Special Civil Application No. 218 of 1972, have been challenged in that special civil application. As we have mentioned earlier, the grounds of attack against all the four notices are the same and it will, therefore, convenient to dispose of both these matters by this common judgment. In the affidavit-in-reply filed in Special Civil Application No. 517 of 1971, the second respondent has stated in paragraph 3 : ", "\"In the original return of income filed by the petitioner, depreciation was claimed on machineries on the written down value basis and it was accordingly allowed. However, in respect of certain block of machineries initial depreciation was allowed to the extent of Rs. 2,24,764. The total depreciation, which included the aforesaid amount of initial depreciation, allowed up to the assessment years 1958-59 in fact exceeded the total cost of the said machineries. As the total depreciation allowed exceeded the cost of machineries, in view of the provisions of section 34(2) (i), no further depreciation in respect of the said block of machineries was admissible from the assessment year 1959-60 and onwards. The petitioners, however, claimed depreciation on the said block of machineries on the written down value basis without disclosing the initial amount of depreciation, which was allowed to the extent of Rs. 2,24,764 and the subsequent allowance of depreciation. The Petitioner failed to bring to the notice of the fats and figures correctly and made a false claim of depreciation in its return with a view to defraud the revenue. The petitioner also failed to rectify the incorrect figures of written down value supplied by it during the course of the assessment proceedings. Consequently, the petitioner falsely claimed depreciation as allowable though, in fact, it was not due for allowance.\" ", "3. In order to appreciate the rival contentions at this stage, it is necessary to refer to some of the provisions of the Indian Income-tax Act , 1922, hereinafter referred to as \"the Act of 1922\". Under section 10 , sub-section (1) of the Act of 1922, the tax was to be payable by an assessee under the head \"Profits and gains of business, profession or vacation\" in respect of the profits or gains of any business, profession or vocation carried on by him. Under sub-section (2), such profits or gains were to be computed after making the allowances set out in the different clauses of that sub-section. Under section 10(2) (vi) in respect of depreciation of buildings, machinery, plant or furniture being the property of the assessee, a sum equivalent to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed was to be allowed. Under the second paragraph of clause (vi), where the building have been newly erected, or the machinery or plant being new, has been installed, after the 31st day of March, 1945, and before the first day of April, 1956, a further sum which was however not to be deductible in determining the written down value for the purposes of the clause in respect of the year of erection or installation, was to be allowed. The proviso to section 10(2) (vi) contained three clauses (a), (b) and (c) clause (c) is material for the purpose of this judgment : ", "\"Provided that -..... ", "(c) the aggregate of all allowance in respect of depreciation made under this clause and clause (via) or under any Act repealed hereby, or under the Indian Income-tax Act , 1886 (II of 1886), shall, in no case, exceed the original cost to the assessee of the building, machinery, plant or furniture, as the case may be.\" ", "4. Thus under the Act of 1922 depreciation of three kinds could be allowed, namely : (1) ordinary depreciation; (2) initial depreciation which was granted in the first year of installation but which was not to be taken into consideration for the purpose of arriving at the written down value; and (3) additional depreciation which was climbable for a period of five years but which, like ordinary depreciation, was to be taken into consideration for the purpose of working out the written down value. As regards the initial depreciation, it was in terms provided that this initial depreciation was not to be deductible in determining the written down value for the purpose of section 10(2) (vi). Under section 10(5) (b) of the Act of 1922 the written down value in the case of assets acquired before the previous year was to be the actual cost to the assessee less all depreciation actually allowed to him under that Act or any Act repealed thereby, or under executive orders issued when the Indian Income-tax Act , 1886, was in force. But by virtue of the provision in the second paragraph of section 10(2) (vi), initial depreciation was not to be deductible in determining the written down value for the purpose of the clause. The case of the revenue as set out in the letter dated March 18, 1971, was that the petitioner-company had been allowed excess depreciation on the oldest block of machinery as on January 1, 1952. The written down valued of the said block at the end of the assessment years 1958-59 was Rs. 2,46,558 but the initial depreciation allowed on that machinery was Rs. 2,24,764. Hence, in view of the provisions of section 10(2) (vi), proviso clause (c), the allowable depreciation for the assessment year 1959-60 could not have exceeded Rs. 21,724. But the petitioner had been granted depreciation on the said block for the assessment year 1959-60, to the tune of Rs. 36,984. Thus with the depreciation allowance of Rs. 36,984 granted for the assessment year 1959-60, the aggregate of depreciation allowance, whether ordinary or initial granted, in respect of that block of machinery exceeded the original cost to the petitioner-company of that block of machinery and according to the second respondent in that letter of March 18, 1971, excess depreciation was granted to the petitioner-company by Rs. 75,190 in the assessment year 1959-60. It was, therefore, contained that no depreciation was to be available for subsequent years on the said block and it was proposed to withdraw the excess depreciation allowed for the assessment years 1962-63 to 1965-66. It is obvious that since the provisions of section 147(b) could not be invoked because the period of limitation of four years from the assessment years under consideration had expired and since there was a period of eight year even for invoking the provisions of section 147(a) of the Act of 1961, the second respondent proposed to confine his action to the depreciation allowance granted to the petitioner-company during the assessment years 1962-63 to 1965-66, because those four years would be within the period of eight years immediately preceding March 31, 1961. ", "5. The second ground for which reopening of the assessment was proposed was that some machinery was sold during assessment years 1962-63 to 1964-65, and half of the profits estimated under section 41(2) had been allowed and the sale proceeds had been charged as a balancing charge only to the extent of half instead of full bow there was no written down cost of the oldest machinery and also the said balance of sale price, i.e., half of the said profits was charged as profits under section 41(2) of the Act of 1961 and the second respondent proposed to reopen the assessments for assessment years 1962-63 to 1965-66 for these two purpose, namely, for the excess depreciation allowance allowed during these respective four years and also in connection with the balancing charge of the sale proceeds which were not fully taxed under section 41(2) . ", "6. Section 41(2) of the Act of 1961 provides for what is known as the balancing charge. Under that sub-section where any building, machinery, plant or furniture which is owned by the assessee and which was or has been used for the purpose of business or profession is sold, discarded, demolished or destroyed and the moneys payable in respect of such building, machinery, plant or furniture, as the case may be, together with the amount of scrap value, if any, exceed the written down value, so much of the excess as does not exceed the difference between the actual cost and the written down value shall be chargeable to Income-tax as income of the business of profession of the previous year in which the moneys payable for the building, machinery, plant or furniture became due and if there is any surplus still left, then it would be charged as capital gains under section 45 of the Act of 1961. As and in the Commentaries on Income-tax Law, 1971 edition, have pointed out at page 746 : ", "\"Where any allowance or deduction had earlier been made in respect of any loss, expenditure or trading liability and subsequently the assessee has obtained or realised any amount towards such loss, expenditure or trading liability, section 41(2) deems such realisation, etc., as the assessee's income for the year in which he has realised it. ", "Section 41(2) is a necessary corollary to section 41(1) in respect of allowed depreciation, if, in respect has been building, machinery, plant or furniture, any depreciation has been allowed had subsequently such building, etc., is sold, discarded, demolished or destroyed, the assessee may get some value either as a result of the sale or from insurance or from salvage or compensation thereabout.\" ", "7. The authors illustrated the problem in this manner : ", "\"Let the original cost of the building be taken as X and depreciation already allowed in respect thereof be taken as Y. On sale, etc., the assessee realise a total sub, Z, when the written down value was X - Y. If Z is greater than X - Y, the balancing charge, viz., treated, by virtue of section 41(2) , as the assessee's income for the year in which Z becomes payable. ", "The necessity to keep section 41(2) as a provision in addition to section 41(1) arises from the fact that, in its very nature depreciation is neither loss nor expenditure nor a trading, which are the subject-matter of section 41(1) .\" ", "8. He has also been pointed out : ", "\"There may be cases where the moneys payable in respect of sale, etc., of the asset are grater than the written down value plus the depreciation actually allowed. In such a case, the gross surplus (that is sale price minus the written down value) will be bifurcated into (i) depreciation actually allowed, and (ii) further surplus. The depreciation actually allowed shall be includible in the total income as balancing charge under section 41(2) , and the further surplus shall be treated as capital gains (if a transfer' of the asset is involved) under section 45 . ", "Suppose, A imported a machine at a cost of Rs. 1,00,000. During the years A used it for his business, he had been allowed a depreciation totaling to Rs. 36,000. Its written down value of Rs. 64,000. At such a time, A sell it for Rs. 1,60,000. The gross surplus, Rs. 1,60,000, minus Rs. 64,000, i.e., Rs. 96,000, is bifurcated into (i) depreciation actually allowed, Rs. 36,000, and (ii) the further surplus, Rs. 60,000. Thus, Rs. 36,000, shall be includible in A's total income as balancing large under section 41(2) and Rs. 60,000 shall be includible as capital gains under section 45 .\" ", "9. It is against this background of the provisions of law that we have to consider the validity of the notices issued under section 148 of the Act of 1961. We may point out that in Special Civil Application No. 218 of 1972, the petitioners has annexed to the petition the different assessment order for assessment years 1963-64 to 1965-66 together with the annexures to those assessment order for the relevant years. There annexures to the assessment orders set out the working made by the Income-tax Officer concerned in arriving at the written down value of each of the different pieces of machinery, etc. In each of these three years for which consideration of section 41(2) arises, the Income-tax Officer has indicated in the assessment order how the amount was charged under section 41(2) . In the assessment years 1962-63, sale proceeds of machinery sole in the course of the assessment year came to Rs. 68,314 and one-half of that amount of sale proceeds, namely, Rs. 34,157, was included under section 41(2) or under section 10(2) (vii) which was the equivalent section of the Act of 1922. In the assessment year 1963-64, the total amount of sale proceeds was Rs. 1,16,840 and one-half of those sale proceeds, namely, Rs. 58,420, was included as profit under section 41(2) . Similarly, for the assessment year 1964-65, the total amount of sale proceeds was Rs. 4,350 and the profit Income-tax Officer included the whole amount of Rs. 4,350 as profit under section 41(2) but subsequently the Appellate Assistant Commissioner had reduced it by half and had only included the amount of Rs. 2,175 as profit under section 41(2) . In the annexures to the assessment orders for the relevant years which are to be found annexed to the petition in Special Civil Application No. 218 of 1972, the reason why one-half of the amount of sale proceeds was included has been given. In the annexure to the assessment order for the assessment years 1965-66 in paragraph 12 it has been mentioned as follows : ", "\"During the year the assessee has sold off certain machineries worth Rs. 1,16,201. The machineries sold were old ones. Following the practice adopted in the past, 50% of it is considered as profit under section 41(2) of the Act, i.e., Rs. 58,540.\" ", "10. Thus, it appears that the usual practice of this department was, at the time of applying section 41(2) , to take one-half of the sale proceeds as profits under section 41(2) and not work out the actual figures as contemplated by section 41(2) and the method which the passage which we have quoted from Chaturvedi and requires the Income-tax Officer to do. ", "11. The question, therefore, that we have to consider is whether there was any escapement of income from assessment by reason of any failure or omission on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of the petitioner for the relevant year. This will apply both to the question of depreciation allowance and also to the question of profits under section 41(2) . As regards the question under section 41(2) , it obvious that it is because the old practice which was being followed by the Income-tax department for several years in connection with the computation of the profit under section 41(2) was discontinued that the second respondent proposed to reopen the assessment regarding the profits under section 41(2) in these three years. The written down value of each piece of machinery which was sold was apparently disclosed by the petitioner-company but, following the usual practice, the Income-tax Officer, in two of the three years under consideration, and the Appellate Assistant Commissioner in the third year, had treated one-half of the sale proceeds as the profits under section 41(2) . Merely because the Income-tax authorities changed their practice or started applying the provisions of section 41(2) in full force, it cannot be said that that part of the sale proceeds, which was deemed income as profit under section 41(2) , escaped assessment by reason of any omission or failure on the part of the assessee, that it, the petitioner, to disclose fully and truly all material facts necessary for the assessment for the assessment year under consideration. ", "12. The question, therefore, remains whether failure on the part of the petitioner to mention the amount of initial depreciation that had been allowed to the petitioner-company under the provision of section 10(2) (vi), second paragraph, in the earlier years, amounted to failure or omission on its part to disclose fully and truly all material fats necessary for the assessment in the years under consideration. It is true that excess depreciation had been allowed to the petitioner-company, that is, depreciation allowance in excess of what was permissible to it in view of the provisions of section 10(2) (vi), proviso, clause (c), inasmuch as the aggregate of all depreciation allowance (ordinary allowance plus initial depreciation allowance) was in excess of the original cost and, therefore, it cannot be gainsaid that by virtue of excess depreciation allowance having been granted, income chargeable to tax had escaped assessment. The question, however, is whether there was any omission of failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessments inasmuch as the amount of initial depreciation was not disclosed by it to the Income-tax Officer at the time of the assessment for the relevant year and, secondly, whether the income had escaped assessment by reason of such omission or failure on the part of the petitioner-company because it is only if the income has escaped assessment by reason of such omission or failure on the part of the petitioner-company that the Income-tax Officer can have reason to believe that by reason of such omission of failure on the part of the petitioner-company income chargeable to tax had escaped assessment and then only the Income-tax Officer, the second respondent herein, would get jurisdiction to proceed under section 147(a) . ", "13. The position under section 34 of the Act of 1922 and section 147 of the Act of 1961, which are identical provision, has been explained in several decision of the of . We may only refer to . At page 371 , as he then was, delivering the judgment of , has pointed out : ", "\" Section 34 confers jurisdiction upon the Income-tax Officer to issue a notice in respect of the assessment beyond the period of four years, but within a period of eight years, from the end of the relevant years, if two conditions exist - (1) that the Income-tax Officer has reason to believe that income, profits or gains chargeable to Income-tax had been under-assessed; and (2) that he has also reason to believe that such 'under-assessment' has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under section 22 , or (ii) omission or failure on the part of an assessee to disclose fully and truly all material fats necessary for his assessment for that year. These conditions are cumulative and precedent to the exercise of jurisdiction to issue a notice of reassessment.\" ", "14. We are in the present case concerned with the second condition, namely, that the Income-tax Officer must have reason to believe that income escaped assessment or there was under-assessment by reason of omission of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. It is no doubt true that if the Income-tax Officer had consulted his own records, he could have found out without the least trouble as to what initial depreciation had been allowed in respect of the different items of machinery and what depreciation had been allowed from year to year in respect of that piece of machinery and thus by looking at his own records for the previous years, the Income-tax Officer could very easily have ascertained whether the aggregate of all depreciation, whether initial or ordinary or additional, allowed in respect of that particular piece of machinery. Apparently, the Income-tax Officer had not consulted his own records and had not checked up whether the aggregate of all depreciation, ordinary, initial or additional, when combined together, exceeded the original cost of the piece of machinery to the petitioner-company. ", "15. A similar case came up for consideration before in Special Civil Application No. 545 of 1966, decided by a Division Bench on August 31, 1970. There , and were concerned with the following facts. The petitioner was a public limited company carrying on business of manufacturing pottery and sanitary were and, in respect of assessment year 1957-58, the petitioner filed its return of income before the Income-tax Officer. The petitioner put in a claim for Rs. 3,58,325 as depreciation allowance in respect of its capital assets. The Income-tax Officer allowed depreciation to the the tune of Rs. 5,05,487. The order was rectified under section 35 of the Act of 1922 and the total income of the petitioner was redetermined and in spite of all ratification, appeals, etc., the depreciation allowance to the tune of Rs. 5,05,487 was not disturbed and it remained unchanged. Similarly, in respect of assessment year 1959-60 the Income-tax Officer concerned has allowed depreciation and development rebate to the tune of Rs. 3,87,926. It was subsequently realised that because of the omission to take into consideration the initial depreciation, excess depreciation allowance had been granted to the assessee for assessment years 1957-58 and 1959-60 and the Income-tax Officer started reassessment proceedings under section 147(a) and at that stage the Special Civil Application was filed in this court. ", "16. Two contentions were urged before , namely : (1) whether the assessee was bound during the course of the Previous assessment proceeding to disclose fully and truly all material facts necessary for its assessment for the relevant years to the assessing authority although such material was admittedly on the record of the department and it was not exclusively within the knowledge of the assessee; and (2) whether, on a true and proper interpretation of section 147(a) of the 1961 Act, the jurisdiction of the Income-tax Officer to reassess income that had escaped assessment or to recompute loss or depreciation allowance, was affected in case where the material necessary for the assessment in respect of which the alleged omission or failure to disclose had occurred, is such as could have been gathered by him from an investigation into the records of the department. On both these points decided against the assessee. observed : ", "\"Since the fact that initial depreciation allowance was granted to the petitioner in respect of certain items of its capital assets is admittedly a material fact for the purpose of the assessment of the petitioner, it was bound to disclose the said fact to the Income-tax Officer during the course of the previous assessment proceedings to enable the assessing authority to determine the true amount of the allowance to which it was entitled..... Even if the material necessary for the assessment in respect of which the alleged omission or failure to disclose has occurred is such as could have been verified or obtained by an investigation of the material on the record or the facts disclosed thereby or from other inquiries or search into the records of the previous assessment proceedings but which was not in fact so obtained, the jurisdiction of the Income-tax Officer to proceed under section 142 is not affected.\" ", "17. , therefore, rejected the submission made on behalf of the petitioner that, since the fact that initial depreciation in respect of certain items of the capital assets of the petitioner was granted to the petitioner under section 10(2) (vi) of the 1922 Act was already on the record of the department and could have been found out by the Income-tax Officer during the course of the previous assessment proceeding by investigation of the record, there was no obligation on the part of the petitioner to disclose the said material in the course of its previous assessment proceedings and there was, therefore, no failure or omission on the part of the petitioner to disclose fully and truly all material necessary for his assessment for the relevant years within the meaning of section 147(a) of the Act. ", "18. In view of this judgment, with which we are in agreement, it is obvious that the petitioner in the present case must be held to have omitted or to have failed to disclose fully and truly all material facts necessary for the assessment of the petitioner-company for assessment years 1962-63 to 1965-66 by failing to refer to the grant of initial depreciation that had been granted to it in the past and we well proceed in the course of this judgment on the footing that at least as regards the excess of depreciation allowance granted to it in the past, such excess depreciation was allowed and, therefore, income had escaped assessment for these different years under consideration but the question that still remains to be considered is whether the income chargeable to tax so far as the petitioner was concerned had escaped assessment by reason of the omission or failure on the part of the petitioner to disclose fully and truly such material facts. ", "19. Under section 10(2) (vi), proviso, clause (c), as we have noticed, the aggregate of all allowances in respect of depreciation made under section 10(2) (vi) of the Act of 1922, and under clause (via) or under any Act repealed thereby, or under the Indian Income-tax Act , 1886, was, in no case, to exceed the original cost to the assessee of the buildings, machinery, plant or furniture, as the case may be. Therefore, it was the duty of the Income-tax Officer concerned who was assessing the income of the petitioner-company in the years 1962-63 to 1965-66 to see to it that the aggregate of all depreciation allowances, ordinary depreciation allowance or initial depreciation allowance or additional depreciation allowance, allowed under the provisions of section 10(2) (vi) or section 10(2) (via) did not exceed the original cost to the petitioner-company. Just as there was an obligation on the part of the petitioner-company to see to it that the factum of initial depreciation was disclosed by it, there was also a duty on the part of the Income-tax Officer concerned to see to that the aggregate of all allowances in respect of depreciation made under section 10(2) (vi) of the Act of 1922 did not exceed the original cost to the petitioner-company. If that duty had been properly discharged by the Income-tax Officer, it is obvious that no excess depreciation would have been allowed in the assessment years 1962-63 to 1965-66. The fact remains that such excess depreciation allowance was allowed and two factors apparently were responsible for such granting of excess depreciation : the failure or omission on the part of the petitioner-company to mention in its return or in the papers filed along with the return or in the course of the assessment proceedings the fact that initial depreciation has been allowed in respect of certain pieces of machinery and to disclose the quantum of that initial depreciation. However, the other factor which led to such excess depreciation allowance being allowed was the dereliction of duty on the part of the Income-tax Officer himself. He failed to notice that the aggregate of all allowances in respect of depreciation made under section 10(2) (vi) had exceeded the original cost to the assessee of the relevant pieces of machinery. It is because of the combined operation of the omission or failure on the part of the petitioner-company to disclose these material fats to the Officer in failing to see that the aggregate of all allowances in respect of depreciation under section 10(2) (vi) had exceeded the original cost to the petitioner-company that the situation came about under which the petitioner-company was in fact allowed excess depreciation in the assessment years under consideration. It is, therefore, not possible for us to say that it was by reason of the omission or failure on the part of the petitioner-company to disclose fully and truly all material fats necessary for its assessment for the relevant years that the income chargeable to tax escaped assessment for those years. ", "20. It may be pointed out that has emphasised the duty of the Income-tax Officer in determining what the correct amount of depreciation is. , at pate 356 , delivering the judgment of , approved of the decision of in and observed : ", "\"It was next argued by the learned Attorney-General that the written down values determined under section 35 are not final and can be redetermined in the following assessment years and in support he referred to , where the original cost of the machinery purchased, Rs. 3,40,000, was accepted in the successive assessment years till it was doubted in the assessment year 1946-47 and was determined at Rs. 2,80,000 and it was contended that the Income-tax Officer had to take the written down value of the previous year as correct. Thus, the question there raised was whether the Income-tax predecessor ever since the assessment year 1939-40. It was held that neither the principle of res judicata nor estoppel nor the terms of section 10(2) (vi) of the Act prevented prevented the Income-tax Officer from determining for himself what the actual cost of the machinery had been and that depreciation had to be calculated for every year and it was open to the Income-tax Officer not merely to perform 'a mathematical operation, on the basis of the written down value of the previous year, but one of determining the written down value himself.'\" ", "21. It was also observed at page 357 : ", "\"The limit to which the Income-tax Officer can go back does not stop at the written down value of the previous year by extends up to the figure of the original cost, and the method enjoined by section 10(5) (b) is not that the Income-tax Officer should merely sale down the written down value of the previous year but that he should take into consideration the actual cost, determining it for himself, if necessary, take also into consideration the allowances granted in the past and then make his own computation as to the write down value for the assessment year with which he is concerned. Thus, it cannot be said that merely because under section 35 some written down value and the depreciation amount have been determined they are a final determination binding for all times to come nor does the determination operate as estoppel or res judicata for the following years.\" ", "22. It is thus clear that according to the method enjoined for the purpose of ascertaining the written down value while granting depreciation allowance was that the Income-tax Officer should take into consideration the actual cost determining it for himself, if necessary, take into consideration the allowance granted in the past and then make his own computation as to the written down value for the assessment year with which he was concerned. Hence, it is obvious that if the Income-tax Officer who passed the assessment orders in the case of the petitioner-company at the time of the original assessments for the assessment years 1962-63 to 1964-65 had followed this method which is enjoined upon him and had taken into consideration the actual cost determining it for himself if necessary and had taken also into consideration the allowances granted in the past (inclusive of the initial allowance) and then had made his own computation as to the write down value for the assessment year with which he was concerned, it is obvious that no excess depreciation allowance would have been granted for assessment years 1962-63 to 1965-66, though no doubt true, chargeable income escaped assessment in the case of excess depreciation allowance, and though there was failure or omission on the part of the assessee, namely, the petitioner-company before us, in not disclosing fully and truly all material fats which were necessary for the assessment for those four years, still it is not possible for us to say that it was only by reason of such omission or failure on the part of the assessee that the income chargeable to tax had escaped assessment. The income escaped assessment also by reason of the fact that the Income-tax Officer concerned in the relevant year had not followed the method enjoined upon him for the purposes of calculating depreciation allowance and not taking into consideration all allowances granted in the past in respect of these different pieces of machinery. ", "23. We may point out that in , remanded the matter back to because did not consider whether the income escaped assessment by reason of the omission or failure on the part of the company to disclose fully and truly all material facts necessary for assessment. There also there was a question of initial depreciation in respect of certain machinery and the aggregate of depreciation allowances including initial depreciation on the machinery exceeding the ordinal cost, but merely because of the failure on the part of the assessee-company to mention the amount of initial depreciation, it was not held by that income had escaped assessment by reason of the omission or failure on the part of the company to disclose fully and truly all material facts necessary for the assessment. ", "24. In our opinion, therefore, sine it is not possible to say that income had escaped assessment by reason of the failure or omission on the part of the petitioner-company to disclose fully and truly all material facts necessary for the assessments for the years under consideration, the Income-tax Officer cannot be said to have reason to believe as had been set out in section 147(a) of the Act of 1961. ", "25. We may point out that in , a Division Bench of , following the decision in v. commissioner of Income-tax, has held that it is open to the Income-tax Officer to determine afresh for himself the original cost of the depreciable asset in the assessment of each year. Therefore, it can be now treated as well-settled law that the method of arriving at the amount of depreciation in each assessment year which the Income-tax Officer allows in the case of any assessee must be arrived at by him by following the above mentioned method and while following that method it is incumbent upon him to take into consideration the actual cost and also the allowances granted in the past. That being the law, the conclusion we have reached would necessarily follow and, therefore, the income chargeable to tax cannot be said to have escaped assessment by reason of the omission or failure on the part of the petitioner-company to disclose fully and truly all material facts necessary for its assessment. ", "26. Under these circumstances neither of the grounds on which the Income-tax Officer, the second respondent herein, proposed to initiate reassessment proceedings against the petitioner-company survives. Because on neither of these two grounds can it be said that by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, income chargeable to tax had escaped assessment, the conditions precedent for the exercise of the jurisdiction under section 147(a) cannot be said to exist so far as the present cases are concerned. ", "27. Under these circumstances we allow both these Special Civil Application and quash and set aside the notices issue under section 148 by the second respondent. The two notices which we are quashing in Special Civil Application No. 517 of 1971 are annexure \"D\" to the petition each dated March 30, 1971, and in Special Civil Application No. 218 of 1972 they are annexure \"E\" date January 17, 1972. The respondents will pay the costs of the petitioner in each of these Special Civil Applications. Rule is made absolute accordingly."], "relevant_candidates": ["0001074072", "0001143491", "0001338992", "0001484009"]} {"id": "0000327334", "text": ["JUDGMENT , C.J. ", "1. The facts of this case are as follows : On 20th February 1902, executed a mortgage-deed in favour of the respondents for Rs. 1,000, carrying interest at rupee 1-80 per cent per mensem \"promising to repay the same in eight years.\" The strictly literal translation of the vernacular words, though not grammatical, would be \"on the promise of eight years payment.\" The deed provided that if the interest for one complete year remains unpaid the creditors shall have power to recover the interest and shall also be at liberty to recover the principal and interest without having any regard \"for the stipulated period.\" On 8th September 1903 another mortgage deed was executed by the same person in favour of the same mortgagees for Rs. 700 at the same rate of interest \"promising to pay off the amount in eight years.\" There was a stipulation that if the interest and compound interest were not paid for one year the creditors shall, after the expiry of one year, have power to recover the principal amount with interest and compound interest \"without waiting for the expiry of the stipulated period.\" There was an additional clause in the second mortgage-deed in the following terms: ", "Whenever I the executant shall pay any amount the creditors aforesaid shall receive it without any objection and shall, after setting it off against the interest, credit the balance towards the principal, and the interest will be reduced in proportion to the amount paid. ", "2. Admittedly interest was not paid and there were defaults at the expiry of one year on account of both these mortgage-deeds. There was an acknowledgment of both these mortgage debts on 3rd March 1906, which gave a fresh start for the purpose of limitation. One consolidated suit was filed on 22nd February 1916, to recover the amounts due on both these documents and in 1917 the claim was decreed. On 20th February 1929, after all the mortgaged properties had been sold, there still remained a balance of over Rs. 2,000 to be realized. The mortgagees accordingly filed an application on 21st August 1929, under Order 34, Rule 6 for a personal decree against the mortgagors. The mortgagors objected to this application on the ground that the personal remedy was barred by time. The , below has disallowed this plea. The mortgagors have appealed to this . The Bench before which the case came up for disposal, on these facts, referred the following question to the Full Bench: ", "Whether in the circumstances mentioned above limitation for a decree under Order 34, Rule 6 commented to ran after the expiry of one year within which the mortgagor made continued default of payment; of interest, or whether, it commenced to run after the expiry of eight Years' terra stipulated in the deed. ", "3. Before 1932 the view which prevailed in this Court was that the limitation being to run against a mortgagee from the date of the first default which entitles him to sue for the whole amount. It is not necessary to refer to earlier cases. But in A.I.R. 1915 All. 189, the majority of held that money becomes \"due\" within the meaning of Article 132 as soon as it can be legally demanded and recovered by suit and the mortgagor can no longer plead that the suit is premature. The view of was followed by a larger Full Bench in A.I.R. 1923 All. 1. In this case it was laid down that the question whether the mortgagee is bound to sue or not and whether he does at once sue or not was wholly irrelevant to the issue; so long as he can sue even though he does not choose to sue, the money has become due. The Full Bench in case A.I.R. 1923 All. 1 then considered the question of limitation with reference to the personal liability and came to the conclusion that the starting point of limitation should be the same for the recovery of the amount by sale of the property and for recovery of it as simple debt, as the cause of action for the enforcement o both the reliefs was one and the same. They held that Article 80 read with Article 116 , Limitation Act , was the appropriate Article for money claim under a registered bond and held that the expression \"becomes payable\" was very much the same thing as the words \"become due,\" and accordingly the cause of action being the same the periods of limitation for both would begin to run simultaneously and the claim for a personal decree would be barred after six years from the first default. and took the same view as was taken in Allahabad, but the Madras and Patna s took a different view. The appears to have gone further and held that even the mortgagor's right to redeem can accrue as soon as the default is made. This could be supported only on the assumption that the stipulated period was a \"term of years or the date of default, whichever is the earlier.\" Although the view in this Court was that the money became duo within the meaning of Article 132 go as to make the period of limitation for a suit for sale run from the date of the default, it was never held that the mortgagor also can by his own default entitle himself to redeem before the expiry of the stipulated period. The mortgagor's suit for redemption would be governed by Article 148 , Limitation Act , the words in the third column of which were different from the words in the third column of Article 132. His right to redeem or recover possession cannot accrue contrary to a special contract fixing a period of time within which he could not redeem. A.I.R. 1926 P.C. 85, was a case in which there was somewhat similar clause giving power to the mortgagee to recover the whole amount in case of default of payment of interest. Their Lordships of were able to dispose of the case on a different ground but Lord , who delivered the judgment of their Lordships observed that this applying the previous decision in case A.I.R. 1915 All. 189 and other cases, had held that a single delimit on the part of the mortgagors without without any act of election, cancellation or other form of response or acceptance on the part of the mortgagees, and even, it would appear against their desire, operates eo instanti, to make the money scoured by the mortgage 'become due' so that all right of action in respect of the security is finally barred 12 years later.... All this the held, notwithstanding that the mortgage is for a term certain, a provision which may be as much for the benefit of the mortgagees as for the mortgagors, and notwithstanding that the proviso is exclusively for the benefit of the mortgagees. ", "4. Their Lordships recognizing the seriousness of the view taken by , which according to their Lordships, had been \"emphasized and perhaps extended\" as it has be on by a later decision to the same effect : see A.I.R. 1923 All. 1, considered it manifestly desirable that the question should be examined noon. A.I.R. 1932 P.C. 207, there was a mortgage-deed which contained a clause that in case of default the creditor shall at all times within and after the expiry of the stipulated period have to power to realize the entire mortgage money with interest. Their Lordships of definitely overruled the cases of Gaya Din A.I.R. 1915 All. 189 and Shib Dayal A.I.R. 1923 All. 1, so far as the interpretation of Article 132 was concerned. ", "5. Their Lordships considered it a matter of great regret that they had to pronounce upon this important and difficult question without the assistance of counsel for the respondents, but as the case had been placed before their Lordships very fully and fairly by the counsel for the appellant their Lordships had the opportunity to give full consideration to their judgment. Their Lordships accordingly laid down that a proviso of such a nature is inserted \"exclusively for the benefit of the mortgagees\" and that it purports to give them an option either to enforce their security at once, or, if the security is ample, to stand by their investment for the full term of the mortgage. Their Lordships pointed out that if on the default of the mortgagor the mortgage money becomes immediately due the option in the mortgagees would be converted into an option in the mortgagor for, as hold by , the mortgagor can claim to repay the amount before the expiry of the stipulated term, which, in their Lordships' opinion, was an impossible result as the mortgagor could not be allowed in this way to take advantage of his own default. It was accordingly laid down that the mortgage money does not become due within the meaning of Article 132 , Limitation Act , until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued and that this would, of course, also be the position if the mortgagee exercised the option reserved to him. Their Lordships pointed out that if they had words like \"cause of action arises\" to interpret, there might be much to be said in support of the Allahabad decisions. ", "6. There is accordingly no doubt whatsoever that the Full Bench cases of this Court have been expressly overruled and are no longer good law. The learned advocate for the mortgagor contends before us that the Full Bench case of A.I.R. 1923 All. 1, has not been overruled so far as the bar of limitation against the personal remedy is concerned, and that on this latter point that Fall Bench decision is binding upon this Court. It is urged that even if the reasons on which the latter decision was based have now disappeared the decision itself is binding on this Court because it cannot be considered to have been overruled by their Lordships of . The learned Counsel points out that whereas the words in Article 132 are \"when the money sued for becomes due\" the words in Article 80 applied by the Full Bench to such cases, are \"when the bond becomes payable.\" It is therefore argued that when the words to be interpreted are different it is the decision of the Full Bench of five Judges which is binding on this Court and not the decision of their Lordships of the learned Counsel further draws our attention to the passage in the judgment of their Lordships quoted above where it was laid down that the mortgage money does not become due until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued. It is then contended that in the present case the mortgagor had already a right under the deeds to red earn before the expiry of the fixed period, and so when the mortgagee also came to have the right to sue, there was perfect mutuality and the-money must be deemed to have become duo within the moaning of Article 132. It is further pointed out that in the Limitation Act , the words \"become due\" or \"falls due\" and the word \"payable\" are used in different senses, Reference is made to Article 69 whore on a bill of exchange or a promissory note payable at a fixed time after date limitation begins to run from the date when the bill or note falls due. If the period of grace is added under Section 22 , Negotiable Instruments Act , the two dates would be different. ", "7. No doubt if one were to be strictly literal and very technical, one might say that the decision in A.I.R. 1923 All. 1, has been overruled on one point only. But I feel that it would not be proper for this to adhere to the original view when its basis has been destroyed by the pronouncement of their Lordships of and the ratio decidendi has altogether disappeared. I take the pronouncement of their Lordships to mean that a clause of this nature is exclusively for the benefit of the mortgagee and gives him a perfect option or liberty to sue for his money or to stand by his investment for the full term of mortgage, and so long us the mortgagee does net by means of any act of election, cancellation or other form of response or acceptance make the money become due, time does not begin to run against him. The mere fact that the mortgagor has made a default and thereby deprived himself of the protection which the stipulated term gave him, would not suffice for limitation to commence to run against the mortgagee if the latter waives his right to sue and chooses not to exercise his option. In view of this interpretation of the law the ground on which case A.I.R. 1623 All. 1 was decided can no longer be sustained. ", "8. It has already been pointed out that the reason given by for holding that limitation began to run from the same data so far as the personal liability also was concerned was the same, namely, that the cause of action for claiming both the reliefs have accrued simultaneously on account of the default. Indeed, considered that the words \"bond becomes payable\" in Article 80 meant very the same thing as money becomes due\" in Article 132. Further their Lordships of in case A.I.R. 1926 P.C. 85, at p. 464, (of 48 All.), considered that had not only emphasized, but perhaps extended the view taken in case A.I.R. 1915 All. 189 previously. It therefore seems to me that the basis of both the views must be deemed to have gone on account of the latest pronouncement of their Lordships. I have therefore no option, but to hold that the ruling in case A.I.R. 1923 All. 1, has been definitely overruled so far as the applicability of Article 132 is concerned and has by necessary implication been overruled so far as the commencement of the limitation on the first default under Article 80 also concerned. It follows that time did not begin to run on the two bonds before the expiry of the stipulated periods. It is not necessary to decide in this case when time would begin to run if a mortgagee were to enforce a default clause; nor is it necessary to consider whether the mortgagor had a right of redemption even before the expiry of the stipulated period. ", "9. So far as the deed of 1903 is concerned there can be no doubt as to when the mortgagor could redeem, as there was an express clause to that effect at the end of the document. There may be some doubt as regards the first document, but I should say that the question whether a period specified in the document is for the benefit of both the mortgagor and the mortgagee or for the benefit of only one of them is a question of interpretation of the document. Sometimes a stipulated period may be for the protection of the mortgagor so as to prevent a demand being made from him before the expiry of that period. Sometimes it may be to ensure to the mortgagee an investment of his money for at least a fixed period. Again in some cases it may be for the benefit of both. Each document has to be interpreted on its own terms and the words used have to be read in conjunction with all the other stipulations in the deed, and the real intention of the parties deduced there from. It may not be fair to take a few words out of the context and lay down a general rule of interpretation as to their proper meaning. Ordinarily, and in the absence of a special condition entitling the mortgagor to redeem during the term for which the mortgage is created, the right of redemption can only arise on the expiration of the specified period, before which the mortgagee also cannot sue : A.I.R. 1914 P.C. 36, at p. 199 (of 36 All.). ", "10. But I must say that if a document says that the mortgagor shall have a right to redeem it \"within a fixed period\" there is some difficulty in holding that it necessarily means that the mortgagor cannot redeem it before the expiry of the period. On the other hand where the mortgage is for a stipulated period, ordinarily it would be a fixed term binding upon both the parties. In cases where ambiguous words are used the intention of the parties has to be gathered from the whole document. As the question does not directly arise, I should not like to commit myself in this case as to whether when the mortgage is payable \"in a fixed number of years\" it is necessarily redeemable before the expiry of that period. On the one hand if the word is taken literally one would think that it would be so redeemable, otherwise one would have to give to the word in\" the meaning of the word \"after.\" But on the other hand the context of the document may show that the word \"in\" was used loosely for the word \"for.\" I may in this connexion point out that in the mortgage-deed which was before their Lordships of for consideration in A.I.R. 1926 P.C. 85 the words were \"stipulated to be paid in 12 years.\" Their Lordships took it for granted that the time fixed for repayment was 12 years and that the mortgage was for a term certain. ", "11. My answer to the question referred to us is therefore that the limitation began to run after the expiry of the stipulated period. ", ", ", "12. I agree. It seems to me that their Lordships of in A.I.R 1923 P.C. 207 by expressly overruling the decision of A.I.R. 1923 All. 1, on the question of limitation for a suit for sale, have by necessary implication overruled it also on the question of limitation for a suit for a personal decree. The held that the starting point must be the same for both classes of suits, as the expression \"becomes due\" in Article 132 is very much the same thing as 'becomes payable\" in Article 80. I quite agree, and indeed I think we are bound by the authority of the larger on this point which certainly has not been overruled by . ", "13. Now on the authority of case A.I.R. 1623 P.C. 207 we are, in my opinion, bound to hold that the mortgage money did not \"become due\" when the mortgagor made default in payment of interest for one year, unless the mortgagee chose to exercise his option by demanding the entire mortgage money or by instituting a suit for sale. It is argued that case A.I.R. 1932 P.C. 207 does not apply when the mortgagor has a right to redeem before the expiry of the stipulated period. Their Lordships observed that the money does not become due, within the meaning of Article 132 , until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued. This seems to imply that the money does become due when both the right of redemption and the right of enforcement have accrued. In the present case the mortgagor certainly had a right to redeem the mortgage of 1903 before the expiry of the stipulated period. So when the mortgagee's right of enforcement accrued by reason of the mortgagor's default in payment of interest, it is certainly arguable that the money had become due\" within the meaning of Article 132. In my opinion however this would not be a correct interpretation of their Lordships' views in case A.I.R. 1932 P.C. 207. They lay stress upon the point that the provision enabling the mortgagees to sue before the expiry of the stipulated period is inserted \"exclusively for the benefit of the mortgagees,\" giving them an option either to enforce their security at once or to stand by their investment for the full term. I take this to mean that the mortgagee has an option of treating the money as having become due\" by demanding or suing for it, and that it does not become due unless he exercises his option, even though the mortgagor may already have a right to redeem in accordance with the terms of the mortgage contract. If we hold that time begins to run for a suit to enforce the mortgage from the date of the first default that gives an optional cause of action, then it could not be said that the provision is inserted exclusively for the mortgagee's benefit. He would have to sue within 12 years from the date of the first default although he might prefer to stand by his investment for the full term and then sue within 12 years from the expiry of that term. He might indeed be compelled to sue before the expiry of the full term, if the term were 13 years or more. In my view therefore the question whether the mortgagor has a right to redeem before the expiry of the stipulated period is immaterial. Time does not begin to run against the mortgagee before the expiry of that period unless he avails himself of the option inserted exclusively for his benefit. ", "14. If this view is correct then the money did DOC become flue, within the meaning of Article 132 , until the expiry of the stipulated period. I think it follows, on the authority of the decision in case A.I.R. 1923 All. 1, that the money did not \"become payable,\" within the meaning of Article 80 until the same date. ", "Niamatullah, J. ", "15. The facts of this case have been fully stated by the learned Chief Justice It will appear that there is an important distinction between this case and A.I.R. 1932 P.C. 207, in so far that the bond in suit in that case contained a stipulation that the mortgagee was not entitled to call in his money within the term fixed by the deed, nor was the mortgagor entitled to pay within the aforesaid term. From the report of the case it does not appear what the precise terms of the bond were. Their Lordships however accepted it as a fact not disputed by either side that the mortgage was for a term of six years certain. In the case before us the deeds cannot be so read as to make them for a term certain. The words used in both the deeds are \"ba waida adai ath sal,\" which have been, in my opinion, rightly translated by the office as \"promising to repay...in eight years.\" In one of the deeds (dated 8th September 1903), it is expressly stipulated that whenever I, the executant, shall pay any amount, the creditor aforesaid shall receive it without any objection and shall, after setting it off against the interest, credit the balance towards the principal, and the interest will be reduced in proportion to the amount paid. ", "16. Quite apart from a stipulation of the kind I am of opinion, that a condition like the one found in these deeds is always for the benefit of the mortgagor, who cannot be sued by the mortgagee within that term but may himself pay it if he likes. The term is always intended as a measure of forbearance which the mortgagee agrees to show. ", "17. It has been argued on the authority of the cases that clauses which provide that the mortgage money shall be paid \"in so many years\" or \"within so many years\" should be construed as providing for a term certain, so that neither the mortgagor can pay nor the mortgagee can recover within that term. In v. 131, of this Court had the occasion to consider a document in which there was a stipulation that the mortgagor would redeem the mortgaged property \"within 15 years.\" One of the learned Judges following v. (1880) 5 Bom. 22 held that in the absence of any agreement express or implied to the contrary the right to redeem and the right to foreclose must be regarded as co-extensive and that the mere use of the words \"andar miad\" in the mortgage-deed is not enough evidence of a contract that the mortgagor was given a right to redeem before the expiry of the stipulated period for which the mortgage was effected. At one place the learned Judge mentioned that the mortgagor had usufructuarily mortgaged the property for a term of 15 years, viz., from Kharif 1300 to the end of 1314 Fasli. ", "18. This is followed by a stipulation to the effect that the mortgagor would redeem within 15 years. It may be that the deed,, read as a whole, showed in that case that the use of the word \"within\" was wrong and that the intention of the parties that the mortgagor should not be at liberty to redeem within the stipulated term was perfectly clear from other parts of the deed. It may be conceded that if there are clear indications in a deed showing, that the mortgagor was debarred from paying within the stipulated term which was as much for the benefit of the mortgagee as for his own, the mere use of the words \"andar miad\" may not neutralise such indications; but I am strongly of opinion that, in the absence of other words showing that the mortgagor is precluded from redeeming within the term, the use of the words \"in so many years\" or \"within so many years\" in itself implies that the right to redeem and the right to foreclose have not been made coextensive by the parties. The other learned Judge composing observed that if the matter were res integra, I would be prepared to hold that 'andar miad' meant before the expiry of 15 years and that, according to the stipulation contained in the mortgage bond this suit was not premature. ", "19. But the learned Judge thought that (1886) 8 All. 95 and A.I.R. 1914 P.C. 36 were conclusive on the point. I have carefully examined these cases and entertain no doubt that the question was res integra and is so, at any rate, 30 far as this Full Bench is concerned. ", "20. (1886) 8 All. 95 the deed was in a different language and in any case that ruling did not make the question otherwise than res integra so far as this Court is concerned. There is nothing in (1907) 29 All. 471, which may justify the view that the word \"in\" or \"within\" should be ignored. The learned Judges had not to consider a clause occurring in any deed. They concluded that on the evidence afforded by the proceeding before the Collector we are of opinion that the agreement of the parties was that the advance made by was to be left outstanding for a period of nine years and that within that period the mortgagee could not foreclose the mortgage nor could the mortgagor redeem it. ", "21. Similarly in A.I.R. 1914 P.C. 36, which is a decision of their Lordships of on appeal from (1907) 29 All. 471, there is nothing to warrant the view that the use of the word \"within\" or \"in\" does not imply that the mortgagor has a right to redeem before the expiry of the term. Their Lordships have made it perfectly clear that the mortgage deed is not forthcoming, but both She Courts in India have found that a contract between the parties to the transaction is, for all material purposes, substantially set forth in the proceedings of dated 18th September 1830 on an application for mutation of names in . ", "22. In that case the intention of the parties had to be gathered from certain proceedings taken as a whole, and nothing turned upon the use of the word \"in\" or \"within.\" Another case, relied on by the learned advocate for the respondents is A.I.R. 1932 All. 155. The material clause occurring in the deed in question in that case was as follows: ", "Whereas I have taken a loan of Rs. 1,225.... I have made a usufructuary mortgage for a term of 10 years.... The agreement is that when I, the mortgagor, do pay to the mortgagee within ton years the entire mortgage money cash and in a lump sum, then the property mortgaged will stand redeemed.... Hence I have executed this usufructuary mortgage deed by a conditional sale of ten years that it may serve as evidence when necessary. ", "23. In that case the words \"in ten years\" were clearly qualified by such expressions as \"for a term of ten years,\" and again \"mortgage-deed by conditional sale of ten years.\" I am clearly of opinion that a condition such as \"I shall pay in ten years\" or \"I shall redeem within ten years\" implies that the mortgagor is at liberty to pay within that time and shall enjoy immunity from being sued by the mortgagee. To hold in such cases that the mortgagor is not entitled to pay with in the stipulated term would make the condition demonstrably absurd. When a man says that he would pay or redeem in or within ten years, it would be absurd to say that he means that he is not to pay or redeem within that term. Such a construction implies the assumption of a negative where the parties clearly meant the affirmative. For these reasons I hold that in deciding the present case we must start with the hypothesis that the mortgagor was at liberty to pay at any time after the execution of the mortgage-deed, a fact which was not present in either of the two cases decided by their Lordships of . A.I.R. 1926 P.C. 85, in which the respondent was not represented, it was assumed that the mortgage was for a term of 12 years certain, within which the mortgagor could not redeem. The same was the case in A.I.R. 1932 P.C. 207. The former case was disposed of on another ground, though their Lordships made certain observations which were accepted in the second case. That observation is as follows: ", "Applying certain previous decisions of the and in particular a decision in A.I.R. 1915 All. 189 the High held that under a clause in the above form a single default on the part of the mortgagors, without any act of election, cancellation or other form of response of acceptance on the part of the mortgagees, and even, it would appear, against their desire, operates eo instanti to make the money secured by the mortgage become due, so that all right of action in respect of the security is finally barred by 12 years later, that is, in the present case, on 21st February 1906. All this the High held, notwithstanding that the mortgage is for a term certain, provision which may be as much for the benefit of the mortgagees as of the mortgagors, and notwithstanding that the proviso is exclusively for the benefit of the mortgagees. ", "24. It seems tome that, though their Lordships did not decide the question, their view is sufficiently indicated by what they considered to be reductio ad absurdum resulting from the view taken by . Though their Lordships make a reference to \"a term certain,\" the essential reason for the view implied in that observation seems to be that the mortgagor has, in such a case, a right of \"election\" or \"cancellation,\" and that the clause being for the benefit of the mortgagee he can waive the benefit. In the subsequent case greater stress has been laid on another ratio decidendi, viz., that money does not \"become due,\" unless there is a mutuality and the mortgagor can pay and the mortgagee can call in his money. They assumed, there being no contest on the point, that the mortgage was for a term certain, so that it was not open to the mortgagor to pay before the expiry of that term and therefore money did not become due. This is perfectly clear from paragraph the last but three. It gives one an impression that if the mortgagor has got the right to pay, and it is also open to the mortgagee to call in his money by the exercise of an option given to him by the deed, the money becomes due. If this is the right view of the decision of their Lordships of , the appellants' contention must prevail, because, as I have already held, the mortgagor was at liberty to pay at any time after the execution of the deeds and the term of eight years was for his benefit and intended as an indulgence to him, which benefit or indulgence was forfeited by his continued default for one year in paying interest so that the mortgagee was no longer bound by the eight years' term and was entitled to sue for the mortgage money after the expiry of the first year. ", "25. This line of argument is very attractive having regard to the material part of the ratio decidendi adopted in A.I.R. 1932 P.C. 207, but it seems to me that their Lordships intended to rest their conclusion on two grounds, either of which can support it. As I read para the last but three of their Lordships' judgment, money does not \"become due,\" unless : (1) the mortgagor is at liberty to pay and the mortgagee is at liberty to sue, and (2) the mortgagee having an option to claim immediate payment did not avail himself of the option by claiming it before the expiry of the term. Their Lordships point out that in cases in which the mortgagee elects to sue before the expiry of the term and does make a demand or institute a suit, the mortgagor is at liberty to pay within the term, so that the rule of mutuality is enforced by acts of parties. In the case before us, though the mortgagor had the right to pay at any time within the stipulated term the mortgagee did not avail himself of his option to call in his money, and therefore the money sued for did not become due. The question in the present case is not whether the claim is barred by Article 132 , Schedule 1, Limitation Act . The mortgagee instituted his suit for recovery of his mortgage money by sale of the mortgaged property and obtained a decree. The sale proceeds did not suffice to pay up the mortgage money. The present proceedings arose from his application for a simple-money decree in respect of the unsatisfied point of the mortgage money. Article 116 read with Article 80 is applicable. The starting point of limitation under Article 80 is when the money sued for becomes payable.\" It is argued that their Lordships of have excluded a claim of this kind from the operation of the rule on which they based their judgment when they observed that: ", "If in the Indian cases the question were, when did the mortgagee's cause of action arise, that is, when he first became entitled to sue for the relief claimed by his suit, their Lordships think that there might be much to be said in support of the Allahabad decisions. ", "26. It is contended that we are not concerned with the words \"become due\" occurring in Article 132 , Limitation Act , but with Articles 116 and 80, and the question is when the money sued for became payable, which means in substance \"when did he (mortgagor) first become entitled to sue for the relief claimed.\" The contention is plausible, but I do not think that any distinction can be made between the expressions \"when money becomes due\" and \"when money becomes payable\" if in either case the mortgagee has an option to disregard the term and he did not exercise that option. Precisely the same reasoning holds good in a case in which Article 116 read with Article 80 is applicable as in a case under Article 132. To accede to the above contention would be to introduce an anomaly which is highly undesirable. For the reasons mentioned above I agree in answering the question referred to in the manner proposed by the Hon'ble Chief Justice."], "relevant_candidates": ["0000035468", "0000201545", "0000565089", "0000889424", "0001114727", "0001635125", "0001681974", "0001689123", "0001693503"]} {"id": "0000328250", "text": ["JUDGMENT , J. ", "1. In this reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, the following two questions have been referred to this court for the assessment year 1973-74 : ", "\"1. Whether, on the facts and in the circumstances of the case, the loss arising out of exchange fluctuation in respect of the payment of the instalments of loan in Japanese yen obtained for the purchase of machineries on deferred payment basis was capital or revenue expenditure ? ", "2. Whether, on the facts and in the circumstances of the case, the assessee can claim as deduction the provision for payment of leave salary in the year under consideration ?\" ", "2. At the suggestion of the learned advocates, we have reframed the first question as follows to bring out the real controversy : ", "\"Whether, on the facts and in the circumstances of this case, the additional expenditure incurred by reason of exchange fluctuation in respect of the payment of the instalments of loan in Japanese yen obtained for the purchase of machinery on deferred payment basis was capital or revenue expenditure ?\" ", "3. The facts relating to the first question are stated hereafter. ", "4. The assessee had borrowed certain capital in Japanese yen for the setting up of a capital asset. The said loan was also repayable in instalments in Japanese yen. For the instalments in Japanese yen payable towards the purchase price of the machinery purchased on deferred payment, basis, the assessee, over and above the amount of those instalments in Indian rupees, had to pay Rs. 8,939 more in view of the day to day fluctuations in the exchange rate. The claim of the assessee for the deduction of the said amount under Section 43A of the Act has been negatived by the Income-tax Officer on the ground that the said loss was capital and not revenue in nature because the loss arose in making instalment payments of the purchase price of the machineries which were capital assets of the assessee. ", "5. Aggrieved by the said disallowance, the assessee brought the matter by way of appeal before the Appellate Assistant Commissioner who, following the decision of the in the case of , in ITA No. 5304 (Cal) of 1974-75, held that the said loss was capital and not revenue in nature. ", "6. In the appeal by the assessee before the , it was conceded that if the loss in the present case was loss due to devaluation in relation to a capital asset, it would not be allowed but since in this case the loss is on account of fluctuations in the rates of foreign exchange in terms of Section 43A of the Act, such loss should be allowed. The merely followed its earlier order and held that the loss in question was allowable as revenue loss. ", "7. The in the case of held as follows : ", "\"In our opinion, Mr. is right. There is no dispute that the loss relates to capital, in the sense that in respect of certain loans which were to be repaid by the assessee, they were incurred in acquiring capital assets and the loss arose. So far as the loss on account of fluctuations in foreign exchange rate is concerned, the decisions of the are uniform in Calcutta and Bombay to which reference has been made already. The decision in has no application as it is a case of loss on devaluation. The matter was fully discussed by the Calcutta and Bombay and we are in full agreement with the views expressed therein. Consequently, the loss is allowable.\" ", "8. One of the orders relied on by the is in the case of . In that case, the has taken the view that foreign loans were obtained by the assessee in the course of business which were ultimately utilised for the purchase of plant and machinery. The ultimate object and purpose of those foreign loans are immaterial for deciding the question whether the additional liability for fluctuation in the rate of foreign exchange is a business loss or not. Accordingly, it was held that the loss in such a case was allowable as revenue loss or revenue expenditure, as the case may be, in view of the decision of in the case of 60 ITR 52. ", "9. Mr. , learned advocate for the assessee, has mainly reiterated his submissions made before the . It is his submission that a distinction has to be drawn between a case where the loss is on account of devaluation and a case where the loss arises due to day to day fluctuation in the rate of currency. In a case of loss or liability arising because of fluctuations in the rate of exchange, it must be treated as incidental to the carrying on of the business. It is his contention that in the instant case whatever extra payment in terms of rupees was made by the assessee must be taken to be an unavoidable expenditure in connection with the loan. He has relied on the decision of this court in 130 ITR 351. ", "10. On the other hand, Mr. , learned advocate for the , has contended that there cannot be any difference in principle so far as the nature of the liability is concerned, one arising on devaluation and the other by reason of fluctuation. He has relied on various decisions in support of his contention. The respective contentions have to be considered in the light of the decisions cited before us. ", "11. Mr. has cited before us a decision of in , 60 ITR 405, where observed as follows (p. 410): ", "\"A number of cases have been cited before us, but it seems to us that the answer to the question depends on whether the act of keeping the money, i.e., $36,123.02, for capital purposes after obtaining the sanction of was part of or a trading transaction. If it was part of or a trading transaction then any profit that would accrue would be revenue receipt ; if it was not part of or a trading transaction, then the profit made would be a capital profit and not taxable. There is no doubt that the amount of $36,123.02 was a revenue receipt in the assessee's business of commission agency. Instead of repatriating it immediately, the assessee obtained the sanction of to utilise the commission in its business of manufacture of locomotive boilers and locomotives for buying capital goods. That was quite an independent transaction, and it is the nature of this transaction which has to be determined. In our view, it was not a trading transaction in the business of manufacture of locomotive boilers and locomotives ; it was clearly a transaction of accumulating dollars to pay for capital goods, the first step in the acquisition of capital goods. If the assessee had repatriated $36,123.02 and then after obtaining the sanction of remitted $36,123.02 to the U.S.A., Mr. does not contest that any profit made on devaluation would have been a capital profit. But, in our opinion, the fact that the assessee kept the money there does not make any difference especially, as we have pointed out, when it was a new transaction which the assessee entered into, the transaction being the first step in the acquisition of capital goods.\" ", "12. The next decision cited by Mr. is also of in the case of 116 ITR i. There, observed as follows (p. 13) : ", "\"The law may, therefore, now be taken to be well settled that where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as part of circulating capital embarked in the business. But, if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature. Now, in the present case, no finding appears to have been given by the as to whether the sums of Rs. 25 lakhs and Rs. 12,50,000 were held by the assessee in West Pakistan on capital account or revenue account and whether they were part of fixed capital or of circulating capital embarked and adventured in the business in West Pakistan. If these two amounts were employed in the business in West Pakistan and formed part of the circulating capital of that business, the loss of Rs. 11 lakhs and Rs. 5,50,000 resulting to the assessee on the remittance of those two amounts to India, on account of alteration in the rate of exchange, would be a trading loss, but if, instead, these two amounts were held on capital account and were part of fixed capital, the loss would plainly be a capital loss. The question whether the loss suffered by the assessee was a trading loss or a capital loss cannot, therefore, be answered unless it is first determined whether these two amounts were held by the- assessee on capital account or on revenue account or, to put it differently, as part of fixed capital or of circulating capital.\" ", "13. The next decision cited by Mr. is the decision of this court in the case of 117 ITR 789. This court observed as follows (p. 802) : ", "\"The question which in our view is of real importance in the instant case is whether the loss or expenditure of the assessee as a result of the devaluation is of a capital nature or of a revenue nature. Mr. , for the assessee, has contended in the course of his submissions that a loss has to be considered in a different way from a gain in computing business profits. There may be cases where a loss dehors the business is allowed as a business loss, whereas a gain arising in similar circumstances will never be a business gain. In our view, this distinction again is of little significance as the gain or the loss, as the case may be, has to be connected with the business before the same can enter into the computation of profits. ", "On a scrutiny of the facts of the instant case, it appears to us that as a result of the devaluation which befell the assessee, it became immediately liable to an extra liability in terms of its rupee assets for repayment of its debts. This extra expenditure, deemed or otherwise, or this loss, is inextricably connected with the assessee's indebtedness and did not arise dehors the indebtedness nor was it incurred for the purposes of the loan and it was, as if, from the date of the devaluation, the dues from the assessee to its creditors in rupees were increased. We are unable to accept the contentions of Mr. that the extra amount which the assessee had to provide for as a result of the devaluation is to be considered as extra expenditure to be incurred for meeting the debt just as postal expenses or bank charges or this extra expenditure which would result in a business loss of a revenue nature.\" ", "14. Mr. then relied on the decision of in the case of . 120 ITR 451. In that case, the assessee entered into an agreement on December 3, 1958, with an Italian company for the purchase of machinery at the total value working out to Rs. 2,93,25,000-39 in Indian currency at the then prevailing rate of exchange. The agreement further provided that the Italian company should draw bills of exchange on the assessee which were to be accepted by the assessee and payments of which were to be guaranteed by . The agreement also provided for payment in terms of British sterling calculated at the prevalent exchange rate between sterling and the U.S. dollar and if there should be variation in the exchange rate, the same should be separately settled with credit notes in rupees or in lire in favour respectively of the Italian company or the assessee, as the case may be. In pursuance of the above agreement, during the accounting years fending on December 31, 1961, and December 31, 1962, the Italian company drew four bills of exchange on the assessee, the total amount payable according to the then prevailing rate of exchange being Rs. 2,95,35,020.38. However, due to the fluctuations in the rate of exchange, the assessee had to pay Rs. 2,98,15,915.41. Similarly, the assessee had to pay a larger amount on account of fluctuations in exchange rate in respect of other instalments in 1964. Consequently, the assessee had to pay during the period relevant to the assessment years 1963-64 and 1965-66, Rs. 1,93,509 and Rs. 1,08,302 respectively in excess of the amount that would have been payable if the exchange rates were stationary as at the time the agreement was entered into. In its returns for these two assessment years 1963-64 and 1965-66, the assessee claimed deduction of these two amounts. The claim; was negatived by the but upheld by the Appellate Assistant Commissioner and the . ", "15. On the aforesaid facts, held that as the price fixed under the agreement was only a tentative price which had to be discharged at the prevailing rates of exchange at the time of the respective payments, the payments related only to the purchase price of the machinery and the difference was on capital account and not allowable as business expenditure. ", "16. also observed that the fact, that , provided for the fluctuation in the exchange rates being taken into account in arriving at the cost of assets by inserting Section 43A in the Income-tax Act , 1961, by Section 17 of the Finance (No. 2) Act, 1967, with effect from April 1, 1967, would not in any way affect the point in issue which, has to be considered in the light of the actual nature of the payment that had to be made and in the light of the provisions in force. ", "17. The next decision relied on by the learned advocates for the parties is in the case of 130 ITR 351. There, this court, after considering the judgment of in the case of 116 ITR 1, held at page 370, as follows: ", "\"The aforesaid passage was emphasised on behalf of the re-presenting the settled law that when profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency-held by it, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as part of circulating capital embarked in the business. But if, on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature. It was, in this connection, emphasised that whether it was sustenance money or borrowed money, after borrowing it becomes its own money. The learned advocate for the assessee also emphasised that there was dealing essentially with the assessee's own money. Therefore, according to him, had no occasion to advert to this aspect of the matter, where, in a case, the assessee was dealing with borrowed money. ", "Perhaps, in this light, of this court decided this question in the case of ( .\" ", "18. Then, this court considered the scope of Section 43A of the Act. At page 374, the court referred to the object of the Finance Bill which introduced Section 43A . ", "\"In the Finance (No. 2) Bill, 1967, which introduced Section 43A , Clause 17 of the Notes on Clauses sought to explain the purpose of such insertion, which reads as follows ( 64 ITR (St.) 109, 169): ", "'Clause 17 seeks to insert a new Section 43A in the Income-tax Act . The proposed Section 43A , in substance, secures that where an assessee had acquired any capital asset from a country outside India for the purposes of his business or profession on deferred payment terms or against a foreign loan, before the date of devaluation of the rupee, the additional rupee liability incurred by him in meeting the instalments of the cost of the asset or of the foreign loan, as the case may be, falling due for payment after the date of devaluation, will be allowed to be added to the original actual cost of the asset for the purpose of calculating the allowance on account of depreciation in computing the profits for the assessment year 1967-68 and subsequent assessment years. Similar increase in the original actual cost will be allowed to be made in respect of the capital assets acquired by the assessee to be used in scientific research related to the class of business carried on by him or patent rights or copyrights acquired from abroad or any capital asset acquired by a company for the purpose of promoting family planning amongst its employees. Further, in computing the capital gains arising to the assessee on the sale or transfer of a capital asset acquired by him from abroad on deferred payment terms or against a foreign loan, the additional rupee liability incurred by him in repaying the instalments of the cost or the foreign loan, as the case may be, after the date of devaluation of the rupee, will be added to the original actual cost of the asset. The proposed section also secures that where there is a decrease in the rupee liability of the assessee in respect of assets acquired by him from abroad due to a change in the exchange value of the rupee, the original actual cost of the asset will be correspondingly reduced. ", "The additional rupee liability incurred on imported capital assets or, as the case may be, any decrease in such liability, in the circumstances stated in the earlier paragraph, will not, however, be taken into account in computing the actual cost of the asset for the purpose of deduction on account of development rebate.' Basing on the aforesaid notes, on behalf of the , it was contended mainly that the purpose of Section 43A was to deal with all devaluation cases. Therefore, any appreciation or depreciation in value of assets, as a result of devaluation in profit or loss arising therefrom, must be governed by the special provisions of Section 43A . A special provision has been made and this is the only provision to guide the matter. Before we deal with that aspect of the matter, we must refer to Section 43(1) which uses a non obstante clause. had observed in the case of (P.) , explaining the purpose of such a clause at page 215 dealing with Article 372 of the Constitution of India (p. 89 of 15 STC) : ", "' That apart, even if Article 372 continues the pre-Constitution laws of taxation, that provision is expressly made subject to the other provisions of the Constitution. The expression \"subject to\" conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. Further, Article 278 opens out with a non obstante clause. The phrase \"notwithstanding anything in the Constitution\" is equivalent to saying that in spite of the other articles of the Constitution, or that the other articles shall not be an impediment to the operation of Article 278. While Article 372 is subject to Article 278 , Article 278 operates in its own sphere in spite of Article 372. The result is that Article 278 overrides Article 372 ; that is to say, notwithstanding the fact that a pre-Constitution taxation law continues in force under Article 372 , the and the State Governments can enter into an agreement in terms of Article 278 in respect of Part B States depriving the State law of its efficacy. In one view, Article 277 excludes the operation of Article 372 , and in the other view, an agreement in terms of Article 278 overrides Article 372. In either view, the result is the same, namely, that at any rate during the period covered by the agreement, the States ceased to have any power to impose the tax in respect of \"works contracts\".' ", "19. It states in essence that in spite of what is contained previously, this clause would be operative. Another significant fact has to be borne in mind that Sub-section (1) of Section 43A deals with the expression 'acquisition' which deals with the situation where there is a change in the valuation of foreign currency after acquisition. But in the case of development rebate, it has to be emphasised that acquisition is not relevant on the material date, but the date of installation is the most material date.\" ", "20. At page 377, the court observed as follows : ", "\"In the instant case before us, the contract stipulated repayment in dollars. Therefore, the actual cost of the assessee must be computed on the dollar value. Therefore, anything which went into that repayment, that is to say, any cost which actually went in repaying the debt, must be, in our opinion, on the principle of computation of the actual cost, which, irrespective of Section 43A , would be entitled to development rebate under Section 33A and inasmuch as Sub-section (2) of Section 43A only excludes the portion of Sub-section (1) of Section 43A , in our opinion, this position would not be inadmissible that the assessee would be entitled to obtain the development rebate. In the instant case, we are concerned with the question whether Section 43 was at all meant for dealing with the case where there is no question of installation involved, but only acquisition was the relevant fact. We are unable to find any support for the argument on behalf of the that in all devaluation cases, whether of increase or decrease, the result of devaluation must be guided by Section 43A and under Section 43A alone. The same view was reiterated by in the case of 112 ITR 64.\" ", "21. This court thereafter considered the judgment of in the case of . CIT 116 ITR 819 and at page 379, observed as follows : ", "\"In so far as the decision took the view that in respect of all devaluation cases irrespective of whether the stipulated payment in the matter of foreign currency should be made under Section 43A alone, with great respect we are unable to agree and we prefer to adhere to the former view of and the other view of as mentioned hereinbefore. On behalf of the assessee, it was contended that Section 43A has been introduced to meet with the situation of computing depreciation year after year where the price in terms of Indian rupee fluctuates on account of change in the rate of exchange. But since no such situation arises in the cases of development rebate which is granted once and for all, the said provision has not been made applicable to the computation of development rebate. The development rebate continues to be computed on the basis of the provisions of Section 33 as before. It was linked with the actual cost of the machinery or plant to the assessee. The actual cost of the machinery or plant should be the cost on the relevant date. Therefore, on the relevant date when the contract was entered into, it was entered into with the direction to pay back in dollars and whatever was necessary to pay back must be treated as actual cost to the assessee.\" ", "22. Having regard to the principles laid down by the aforesaid decisions, we are unable to accept the contention of Mr. . There is no qualitative difference in the additional expenditure incurred due to the devaluation or fluctuation in the rate of exchange. In both the cases, an additional liability is imposed. But whether the expenditure involving this additional liability will be allowable or not in computing the profit will depend on whether the expenditure is on capital account or on revenue account. It is the nature and character of the expenditure which would determine the question. It is not an expenditure as contended by Mr. for meeting \"the debt just as postal expenses or bank charges \" or an extra expenditure in connection with obtaining any loan like \"stamp duty, registration fees, etc.\" This court held in case [1979] 117 ITR 789, that an additional expenditure incurred due to the devaluation for repaying (in foreign exchange) a loan is a capital expenditure. Although in that case the court was concerned with a case of devaluation, the principles laid down therein will equally apply to a case like this where the additional liability arises because, of fluctuation in the rate of exchange. As laid down in , \" this extra expenditure, deemed or otherwise, or this loss, is inextricably connected with the assessee's indebtedness and did not arise dehors the indebtedness nor was it incurred for the purpose of the loan and it was, as if, from the date of the devaluation, the dues from the the assessee to its creditors in rupees were increased \". The reasoning of the is based on the decision of in 's case [1966] 60 ITR 52. This case has no application to the facts of this case as the extra expenditure was not incurred to obtain the loan. The loan had already been obtained. It is at the point of repayment of the loan that the assessee has to provide an extra amount in rupees by reason of the fluctuation in the rate of exchange. Further, the assessee purchased a capital asset and the purchase price was converted into loan which was repayable by instalments. Thus, the expenditure is on capital account. in the case of [1979] 120 ITR 451 also held that additional expenditure incurred for paying the instalments of purchase of a capital asset due to fluctuation in the rate of exchange is on capital account. ", "23. The decision relied on by Mr. in the case of also does not assist him. There, the assessee had taken a loan from of Washington for making payment in the U.S.A. of the price of capital plant and machinery purchased for its project. The loan was taken and was repayable in dollars. One of the questions was whether the increase in liability of the assessee for repayment of loan due to devaluation was allowable deduction in computing the business income of the assessee. There, the court considered various decisions including the decision in the case of . This court considered in detail the judgment in 's case [1979] 117 ITR 789 and took note of what was said in as follows (p. 372) : ", "\"Conversely, as a result of the exchange rate going against the asses-see, the loss which the assessee incurred cannot be held to be a revenue loss.\" ", "24. This court held that \"in view of the consistent view of and in view of the decision in \" , the increased liability in terms of rupees for repayment of loan was not an allowable deduction as the said loss was on capital account. Thus whether there is devaluation or whether there is fluctuation in the rate of exchange, the fact remains that the exchange rate goes against the assessee resulting in increase in the liability and there cannot be any difference in principle in deciding the question. In , the alternative argument of the assessee that development rebate should have been allowed on the increased liability arising out of devaluation attributable to plant and machinery was accepted. Even the observation of this court in that context also does not support the contention of Mr. . The principle which has been laid down in , by this court is that if the contract stipulates repayment in foreign currency, the actual cost of the asset must be computed on the value of the foreign currency. Anything which went into the repayment was part of the actual cost of the capital asset. Thus in the instant case also the extra expenditure incurred by the assessee would be towards the cost of plant and machinery and accordingly it will be on capital account. In either view of the matter, the contention of Mr. must fail. We, therefore, answer the first question by saying that the additional expenditure incurred by reason of exchange fluctuation was capital expenditure. ", "25. Now we shall take up the second question. The facts relating to the second question are stated hereunder : ", "According to the leave rules of the assessee, one of the leaves to which the employees of the assessee are entitled is known as \"privilege leave\". Para. 1 of the said leave rules pertains to privilege leave. It lays down that every permanent employee of the assessee was entitled to privilege leave at the rate of 30 days for every completed period of twelve months. The said privilege leave has to be credited in the account of each individual employee at the end of each financial year of the assessee-company or calendar year as may be applicable. The said privilege leave can be accumulated up to 120 days only. Ordinarily, the privilege leave can be granted only twice a year at the discretion of the management, but in exceptional circumstances like marriage, death of near relatives, sickness, etc., it may be granted even beyond the schedule at the sole discretion of the management. It is further provided that if privilege leave is offered by the assessee-company and the offer is not accepted by the employee, the employee shall forfeit his leave to the extent of the period offered. Rule 6 of the said leave rules further provides the method for encashment of leave by different categories of employees. Rule 6A further provides that without prejudice to the aforesaid general provisions for encashment of leave, the management shall have the right, at its sole discretion, to permit encashment of any number of days of accumulated privilege leave not exceeding 120 days in cases like marriage/sickness/accident or other special circumstances beyond reasonable control of the person concerned like refusal of leave by the management, etc., but no staff member shall be entitled to claim it as a matter of right. ", "26. It is also an admitted position that prior to the year under consideration, the assessee was claiming the deduction in the matter of payment on account of privilege leave when the same was encashed on retirement or on the termination of the services of the employees in a particular year. Though this was the practice in the past, the assessee in the accounts for the year made a provision in respect of its accrued liability for payment of accumulated leave earned by the employee amounting to Rs. 2,19,982. The claim of the assessee for the deduction of the said amount had been negatived by the Income-tax Officer on the ground that the liability is a contingent liability. ", "27. Aggrieved by the said disallowances, the assessee brought the matter by way of appeal before the Appellate Assistant Commissioner who upheld the aforesaid view of the Income-tax Officer by agreeing with him that the said liability was not a present liability but a contingent liability on the happening of some events. ", "28. The Tribunal upheld the contention of the assessee and, inter alia, observed as follows : ", "\"No doubt in the past the assessee was claiming the deduction only to the extent to which the said privilege leave was encashed by an employee on retirement or on termination of his service, yet that is not conclusive on the subject. The position in the present case is that the employee is entitled under the rules to the privilege leave and he can accumulate the privilege leave for a period of 120 days. Once the privilege leave is earned by an employee, it gets credited to his account. The same can, under the circumstances stated in the leave rules, be encashed. Though the payment may be deferred, the liability of the assessee to pay for the accumulated leave stands accrued. The said liability is a liability in praesenti and not a contingent liability. As such, on the ratio of the decision of in [1969] 73 ITR 53, the asses-see can claim the deduction in respect of the said accrued liability in its assessment for the year under consideration. We hold likewise. \" ", "29. It has been contended by Mr. with reference to the leave rules that the liability accrues to the assessee for payment of leave wages as soon as leave, under the rules, has become due to the employees. He has particularly referred to the following rules in support of his contention. ", "30. Privilege leave : ", "(i) Every permanent employee shall be entitled to privilege leave at the rate of 30 (thirty) days for every completed period of twelve months : ", "(ii) Privilege leave will be credited to the account of each individual at the end of each financial year of the company, or calendar year, as may be applicable (hereinafter referred to as \" the year \") ; ", "(iii) Privilege leave will accumulate up to 120 days only. ", "31. Rule 6 has provided for encashment of leave. The management shall have the right, at its sole discretion, to permit encashment of any number of days of accumulated privilege leave not exceeding 120 days. Mr. has also drawn our attention to Rule 6C, which is in the following terms : ", "\"For the purpose of leave encashment, the leave record will be completed immediately after the end of every calendar year or financial year of the company and the benefit of unavailed or accumulated leave, if any, shall be given as per these Rules in the succeeding calendar year or financial year, as the case may be.\" ", "32. The question before us is whether provision for leave salary is an allowable deduction. The contention of Mr. is that leave salary payable to an employee can be ascertained at the end of the accounting year depending on the accumulated leave to the credit of an employee. It is his contention that it is not a contingent liability but a liability in praesenti. He has also submitted that out of the provision made, leave salary would be paid to the employees. He has also submitted that the leave encashment benefit is ascertainable at the end of the year in terms of Rule 6 of the leave rules. ", "33. Mr. on the other hand contended that the question of payment of leave salary only arises when a person goes on leave and for that particular period leave salary is payable. Similarly a person is entitled to avail of the leave encashment benefit under the rules. This will depend on whether he actually avails himself of the leave or not. If leave is due to a person, he has the option either to accumulate the leave or he may avail of the leave. If he avails of the leave, he would be entitled to the leave salary. If he does not, he will be entitled to the benefit of encashment of the leave. These events according to the learned advocate are uncertain events and are contingent. He has relied on several decisions in support of his contention. ", "34. In the case of 62 ITR 274, the question before was whether provision for earned leave wages was allowable as a deduction. The assessee in that case claimed that in the computation of its profits, it was entitled to a deduction of Rs. 75,000 being the amount set apart as a reserve fund in its balance-sheet for the payments it may have to make to its workers in the next year on account of holiday wages under Section 79 of the Factories Act, 1948. held that the liability of the assessee for holiday wages under the Factories Act is a contingent liability. It was held that the liability that rests on the employer to pay a worker wages in accordance with Section 79 for leave period remains a contingent liability which the employer may or may not be called upon to discharge. That being so, any sum set apart by an employer in any year for meeting the contingency of some of his workers going on leave the next year cannot be regarded as a permissible expenditure under Section 10(2)(xv) of the Indian Income-tax Act, 1922. As a matter of fact, followed the decision of this court in the case of 2 Cal 13. There, this court held that holiday waives, payable under the Factories Act , not actually spent in the accounting year but entered in the books of account as a reserve fund for payment in the next year, are not allowable as an item of expenditure although the accounts may be kept according to the mercantile system. The liability under Section 49B of the Factories Act to pay holiday wages depends on the arising of circumstances specified therein and since they may or may not arise, the liability is only a contingent and uncertain liability which may or may not have to be discharged. , observed as follows (p. 278 of 62 ITR) : ", "\"It should be clear from what I have stated above that such statutory liability for holiday wages as the Factories Act creates is only a contingent liability which may or may not have to be discharged ; and, secondly, the measure of that liability can never be known in advance. It cannot be so known, because it cannot be known in advance how many employees will avail themselves of how many holidays and when and, necessarily, at what rate, holiday wages would be payable. In those circumstances, it is perfectly clear that not only is the amount claimed not allowable as an item of expenditure, because, in fact, no expenditure had been incurred and not a pica had gone out of the funds of the company, but also that the amount does not even represent a certain liability which will have to be discharged in any event. It may be that although a particular amount is not actually expended during the currency of a particular accounting year, the assessee will still be entitled to a deduction if a certain liability for its payment has arisen so that it may be said that the expenditure is as good as made. The amount claimed in the present case is certainly not even of that character and, as I have already pointed out, it is not an amount which was actually spent.\" ", "35. A similar view was taken by in the case of . 80 ITR 244. There the assessee-company set apart in its accounts a sum of Rs. 75,000 for payments it may have to make to its workers in the next year on account of holiday wages under Section 79 of the Factories Act and claimed deduction in respect of that amount on the footing that it had incurred a liability to pay leave wages to its employees in the year of account. held that the assessee-company has not incurred the liability for leave wages in the accounting year and the claim for deduction was not allowable. ", "36. It is true that this court as well as the Madhya Pradesh and Bombay High Courts considered the scope of the provisions of the Factories Act regarding the payment of holiday wages and upon the consideration of the relevant provisions, the courts held that the liability was contingent. The principles which have been laid down in those cases, in our opinion, would equally apply to the facts of this case. Leave wages are payable only when a person goes on leave and during the period of leave, the wages paid to him are known as leave wages. It cannot be ascertained with any certainty whether in a particular year the employees would go on leave or the leave would be granted to them. After all, privilege leave cannot be claimed as a matter of right. It will depend on the exigencies of the circumstances. The rules also provide that the leave may be refused on certain circumstances. Unless an employee goes on leave, the assessee is not required to pay the leave wages. The liability will only arise when a person goes on leave and it is only for that particular month or months he is on leave, the leave wages are payable. ", "37. Having regard to the facts and circumstances of this case, we are unable to accept the contention of Mr. that at the end of the accounting year it is known what is the quantum of leave due to a particular employee and on that basis a calculation can be made with accuracy. No one makes a provision for salary because salary is only payable after the employee renders the service and then only it will accrue to him. Similarly in the case of wages which are paid during the leave period, the employee becomes entitled to such leave wages only when he goes on leave. Accumulated leave to the extent of 120 days can only be encashed at the time of retirement or termination or determination of service. This is, therefore, a contingent liability and not a certain liability. ", "38. Inspired by a decision of under the Wealth-tax Act in the case of CWT v. Prema Lakshman 150 ITR 170, Mr. sought to contend that the liability to pay the leave wages is not a contingent liability. There the assessees were partners of a firm which was engaged in the business of processing and exporting cashew kernels. For the assessment year 1974-75 relevant to the valuation date, December 31, 1973, the assessees claimed deduction in respect of the amounts payable by the firm by way of leave with wages, in calculating their interest in the firm for purposes of wealth-tax. The Wealth-tax Officer disallowed the claim. The found that subsequent to the decision of in v. , , a practice came to be crystallised in the cashew industry in Kerala making it obligatory for the management to pay the workers leave with wages contemplated under Section 79 of the Factories Act, 1948, irrespective of the number of days they worked. The examined the relevant records and the books of account and, after satisfying itself as to the correctness of the claims, held that provision made for leave with wages had to be deducted while ascertaining the interest of the assessees in the firm. On a reference, held that the amounts in question did not relate to a contingent or future liability but to an existing liability, liability which had already been incurred as a result of the practice which had, as found by the , come to be crystallised in the cashew industry following an earlier decision of the court. This liability could be arithmetically worked out as on the valuation day. Hence, these were amounts in the nature of debts which could be taken into account for computation under the Wealth-tax Act , 1957. ", "39. The decision, however, does not assist the assessee. In the present case, leave rules provide that, ordinarily, the privilege leave shall be granted only twice a year at the discretion of the management, in exceptional circumstances like marriage, death of near relatives, sickness, etc. Such leave may be granted even beyond the schedule at the sole discretion of the management. Further, if privilege leave is offered by the assessee-company, whether applied for or not, and the offer is not accepted by the employee, the employee shall forfeit his leave to the extent of the period offered. That apart, leave shall be granted at the convenience of the management and nothing would limit the free discretion of the management to refuse, evoke and/or cut short the leave period and ask the staff member to report immediately as the exigencies of the company's work may require. It is, therefore, clear that there is no obligation on the employer to pay the leave wages irrespective of the number of days worked by the employee as in the Kerala case. The decision of in the case of 73 ITR 53, cannot have any application in this case. in that case was concerned, inter alia, with the question whether it is legitimate in a scheme of gratuity to estimate the liability on actuarial valuation and deduct such estimated liability in the profit and loss account while working out the net profit. held that if the liability is properly ascertainable and if it is possible to arrive at its discounted present value, even if the liability is a contingent liability, it can be taken into account. That question does not arise here. There cannot be actuarial valuation regarding the liability for payment of leave wages. It cannot be equated with the gratuity liability under the Gratuity Act . The rate of leave salary will depend on the salary a person draws at the time when he goes on leave and not when the leave is accumulated. So far as the leave encashment is concerned, the employees are entitled to encashment of their privilege leave to the extent of 120 days. Such encashment can be made only at the time of retirement or termination or determination of the services of an employee. If any employee avails of the leave, he will be entitled to the leave salary. If he does not avail of the entire leave, he will be entitled to accumulate to the extent permissible. He will only be entitled to encash such accumulated leave when he retires or his services are terminated or determined. Therefore, neither the leave salary nor the leave encashment benefit payable to the employees can be said to be a present liability. The contention of Mr. has no substance and must fail. The second question is, therefore, answered in the negative and in favour of the . ", "40. There will be no order as to costs. ", ", J. ", "41. I agree."], "relevant_candidates": ["0000012637", "0000263647", "0000636011", "0000676779", "0000756197", "0000777166", "0001085477", "0001101230", "0001114923", "0001207302", "0001429395", "0001433939", "0001461059"]} {"id": "0000328628", "text": ["JUDGMENT , J. ", "1. This Second Appeal coming on for bearing on Thursday, sixteenth day and tuesday, the twenty first day of July, 98 upon perusing the Grounds of Appeal, the judgment and Decrees of and and the material papers in the suit and upon hearing the arguments of Mr. Sarvabhauman Senior Counsel for M/s. Sarvabhauman Associates for the Appellant and the respondents not appearing in person or by Advocate, and having stood over for consideration till this day, the Court delivered the following judgment: ", "The appellant is the 1st defendant and the respondents are the plaintiffs and the 2nd defendant before the lower Court. ", "2. The respondents 1 to 7, who are the plaintiffs before the lower , filed the suit in O.S. No. 815/80 on the file of Principal District Munsif's at Karur for declaration of their exclusive title to the suit property and for a consequential permanent injunction or in the alternative for the relief of possession in case if it is found that the defendants trespassed into the suit property. ", "3. It is the case of the respondents 1 to 7, who are the plaintiffs before the lower Court, that the suit property is the northern half share measuring 1.89 1/2 cents in the total extent of 3.79 acres in S.F. No. 1430/C of Sanapatti Village in Karur Taluk and one purchased the suit property from one as early as on 16-2-1927 and the said conveyed the suit property to one under a registered sale deed dated 12-3-1928, and the said died in the year 1941 survey by his wife by name , and is the grandmother of the plaintiffs and the executed a registered settlement deed dated 11-7-1961 in favour of the plaintiffs and ever since then the plaintiffs are in possession of the suit property, and the defendants attempted to trespass into the suit property, and so the present suit was filed. ", "4. The appellant/1st defendant filed a written statement, which was adopted by the 2nd defendant, stating that it is not correct to state that the suit property originally belonged to , and she was in exclusive possession of the same, and the plaintiffs are put to strict proof of the execution and attestation of the settlement deed dated 11-7-1961 in their favour, and the plaint is silent as to how got title in the suit property, and neither the plaintiffs nor their predecessor-in-title had any title or possession to the suit property at any time, and the 1st defendant purchased the suit property from one under a registered sale deed dated 21 -8-1975 and the 1st defendant was in possession of the suit property, and the 1st defendant sold a portion of the suit property to the 2nd defendant on 26-10-1977, and the defendants are in possession of the suit property on the date of suit, and the allegation that they attempted to trespass into the suit property is denied, and so the suit deserves dismissed with costs. ", "5. On the above pleading and considering the oral and documentary evidence placed, the learned Principal District Munsif at Karur came to the conclusion that the plaintiffs have failed to prove their title to the suit property and they were in possession of the suit property on the date of suit as claimed by them, and the defendants are in possession of the suit property, and so the plaintiffs are not entitled to the reliefs of declaration of their title to the suit property and for the consequential relief of permanent injunction or in the alternative for the relief of possession and so the learned Principal District Munsif at Karur dismissed the suit with costs. ", "6. Aggrieved against the said findings of the trial Court, the plaintiffs preferred an appeal in A.S. No. 74/83 before the Sub-Court at Karur and the learned Subordinate Judge at Karur came to the conclusion that the plaintiffs have proved their title beyond reasonable doubt (language (Tamil version) Omitted--Ed.) and the defendants attempted to interfere with the possession of the plaintiffs, and so the plaintiffs are entitled to the reliefs of declaration of their title and for the consequential permanent injunction and so the learned Subordinate Judge at Karur set aside the judgment and decree of the trial Court and allowed the appeal, and decreed the suit as prayed for with costs. ", "7. Not satisfied with the findings of the learned Subordinate Judge at Karur, the 1st defendant has preferred this second appeal. On the above pleadings and after hearing the learned counsel for the appellant, the substantial questions of law that arise for consideration in this second appeal are as follows :-- ", "(1) Whether the plaintiffs, who are the respondents 1 to 7 in this second appeal, have title to the suit property and whether they were in possession of the suit property on the date of suit? ", "(2) Whether the recitals as to the boundaries in the documents marked as Exs. A9 to A11 not inter partes are admissible in evidence without examining the executants? ", "(3) Whether the plaintiffs, who are the respondents 1 to 7 in this second appeal, are estopped from denying the correctness of the description of the suit property even in their own document marked as Ex. 81 in this case? ", "8. Point No. 1:--The description of the suit property as set out in the plaint schedule by the plaintiffs is as follows :-- ", "(Language (Tamil version) Omitted--Ed.) Therefore the plaintiffs are claiming title to the northern half share with an east west ridge measuring an extent of 1.89 1/2 cents out of the total extent of 3-79 acres of land in S.F. No. 1430/C of Sanapatti Village. ", "9. The relevant documents of title in support of the plaintiffs case are marked as Exs. B.18, B.19, A1, A2 and A5. Let us consider the title of the plaintiffs from these documents of title. ", "10. It is the specific case of the plaintiffs in para 9 of the plaint that originally the suit property belonged to one , who purchased it from one on 16-9-1927, and the aforesaid Nachiyar Animal conveyed the same under the registered sale deed dated 12-3-1978 in favour of Krishnaswamy Naidu the husband of , who in turn executed a registered settlement deed dated 11-7-1961 in favour of the plaintiffs. So according to the allegations in the plaint the original owner of the suit property is . The plaint is silent as to how acquired title to the suit property. However the defendants have produced the registration copy of the sale deed dated 14-2-1923 executed by and others in favour of and the same is marked as Ex. B. 18 in this case. The description of property as set out in this sale deed of the year 1923 marked as Ex. B.18 runs in Tamil as follows :-- ", "(Language (Tamil version) Omitted--Ed.) Thus the earliest document to prove the title of the plaintiffs to the suit property mentions an undivided 1-89 1/2 acres out of the total extent of 3.79 acres in S.F. No. 1430/C, and not the northern half share with an east west ridge as mentioned in the description of property in the plaint schedule. ", "11. The next document in the chronological order in the sale deed dated 16-9-1927 executed by in favour of and it is marked as Ex. B. 19 in this case. The description of property in this document of the year 1927 marked as Ex. B.19 leads a follows :-- ", "(Language (Tamil version) Omitted--Ed.) Thus the tide deed of the year 1927 in favour of the plaintiffs also states an undivided 1.89 1/2 acres in total extent of 3.79 acres of land in S.E. No. 1430/C. ", "12. Within one year i.e. on 12-3-1928 the very same executed the sale deed dated 12-3-1928 under Ex. A.1 in favour of Krishnaswamy Naidu, wherein, we find the description of the suit property in the following words in Tamil :-- ", "(Language (Tamil version) Omitted--Ed.) So in the document of the year 1928 marked as Ex. Al also we find that the common undivided 1.89 1/2 cents of land in the total extent of 3.79 acres of land in S.F. No. 1430/C was sold by in favour of . ", "13. In para 5 of the plaint it is stated by the plaintiffs that Krishnasv/amy, Naidu, who is the purchaser under Ex. A1 died in the year 1941 leaving behind him his widow as his only heir and after the death of his wife executed the settlement deed dated 11-7-1961 marked as Ex. A2 in favour of the plaintiffs. The description of property as set out in the document of title of the plaintiffs in the year 1961 marked as Ex. A2 states in Tamil as follows :-- ", "(Language (Tamil version) Omitted--Ed.) So far the first time we get the reference to the northern half share measuring 1.89 1/2 cents out of the total extent of 3.79 acres of land in suit S. F. No. 1430/C in this document of the year 1961 marked as Ex. A.2 in favour of the plaintiffs. It is not known at what point of time this northern half share was allotted to Andalammal in a partition by metes and bounds in respect of the total extent of 3.79 acres of land in suit S.F. No. 1430/C. ", "14. Then the next document on the side of the plaintiffs is the surrender of lease deed dated 12-2-1978 marked as Ex. A5 and it is executed by one in favour of the 1st plaintiff by name examined as P. W. 1 in this case. The same description that was found in Ex. A2 is repeated in this surrender deed of the lease in the year 1978 marked as Ex. A5. ", "15. P.W. 1 , who is the 1st plaintiff in the suit, did not say anything about the alleged partition of the entire extent of the suit S.F. No. 1430/C into two-half shares, one as the northern half share and another as the southern half share measuring 1.89 1/2 cents. He speaks to the execution of the settlement deed executed by his grandmother under Ex. A2. He speaks to the possession of northern half share of 1.89 1/2 cents by the plaintiffs and the lease of the same. He did not say as to how the northern half share of 1.89 1/2 cents was allotted to before the execution of the settlement deed dated 11-7-1961 under Ex. A.2. Therefore the testimony of P.W. 1 will not be of any help to establish that the northern half share of 1.89 1/2 cents with an east west ridge out of the total extent of 3.79 cents in S.F. No. 1430/C was allotted to the share of after the execution of the sale deed by in favour of on 12-3-1928 under Ex.A.1. ", "16. is one of the attestors to the settlement deed dated 14-7-1961 marked as Ex A3 executed by in favour of the plaintiffs. He speaks to the attestation of the settlement deed marked as Ex. A.2 and nothing else. Therefore, the testimony of , who is one of the attestors of the settlement deed marked as Ex. A.2 is also not useful to prove the case of the plaintiffs that was allotted the northern half share of 1.891/2 cents with an east west ridge out of the total extent of 3.79 acres of land in S.F. No. 1430/C. ", "17. P.W. 3 is one Natarayan. He attested the sale deed dated 14-12-1971 executed by and in favour of one marked as Ex. A.9 in this case. He also purchased 5 cents of land from Gounder and on 13-12-1971 under the registered sale deed marked as Ex. A. 11 in this case. He did not whisper a word as to how got the northern half share of 1.891/2 cents of land out of the total extent of 3.79 acres of land in suit S.F. No. 1430/C. He went to the extent of staling in Tamil in the chief examination as follows : ", "(Language (Tamil version) Omitted--Ed.) Therefore it is the testimony of that the southern half share belongs to the plaintiffs whereas the case of plaintiffs is that they are entitled to the northern half share of 1.89 1/2 cents. So the testimony of instead of proving the case of the plaintiffs, will only destroy the contention of the plaintiffs. ", "18. A careful scrutiny of the oral and documentary evidence placed in this case I am of the view that the plaintiffs, who are respondents 1 to 7 in this second appeal, have not satisfactorily proved their title to the northern half share of 1.891/2 cents of land with an east west ridge out of the total extent of 3.79 acres of land in S.F. No. 1430/C as described in the plaint schedule. ", "19. The plaintiffs have come forward with a specific case in their plaint that the northern half share of 1.89 1/2 cents of land with an east-west ridge out of the total extent of 3.79 acres of land in S.F. No. 1430/C belongs to them exclusively, and on that basis they prayed for declaration of their title. Having come forward with the suit for declaration of title, it is the bounden duty of the plaintiffs to prove their title, and it is not necessary to consider the title of the defendants. If the title of the defendants is not acceptable for one reason of the other even, then the plaintiffs must fail because they have not proved their exclusive title to the northern half share in the suit S.F. No. 1430/C. In other words the plaintiffs must succeed on the strength of their own title and that could be done by adducing satisfactory evidence to discharge the onus which is on them, irrespective of the question whether the defendants have proved their case or not. I am fortified with this view by two decisions of our . ", "20. In the decision reported in , it was held as follows :-- ", "'The plaintiff is asserting that he is the. . . owner and it is for him to establish his title.\" ", "21. In the other decision reported in v. , (1982) 95 Mad Law Weekly 708 a Division Bench of our Madras High Court laid down as follows :--- ", "\"It is the duty of the plaintiff to establish his claim on the basis of the averments made in the plaint. The plaintiff cannot pick holes in the title of the defendants and try to succeed on the weakness in the defence presented.\" ", "22. In the light of the above decisions even assuming and without admitting that the defendants have not proved their case or their title to the suit property, even then the plaintiffs cannot succeed because their title deeds did not prove that they are the exclusive owners of the northern half share of 1.89 1/2 cents of land with an east west ridge out of the extent of 3.79 acres of land in suit S.F. No. 1430/C. Even then let us consider the title of the defendants in this case. ", "23. It is not in dispute between the parties in the suit that the total extent of the suit S.F. No. 1430/C is S. 3.79 acres of land out of which the defendants are entitled to 94 1/2 cents and the family of one is entitled to another 94 1/2 cents and the balance of 1.89 1/2 cents of land belong to the plaintiffs. But the dispute is whether the plaintiffs are entitled to the northern half share of 1.89 1/2 cents in the total extent of 3.79 acres of land in S.F. No. 1430/C. The defendants have produced Bxs. B.15 to B.17 in support of their contention. Ex. B.15 is the printed copy of the judgment in O.S. No. 569 of 1949 on the file of District at Karur wherein one is the plaintiff and one , , , and are the defendants. The said suit in O.S. No. 369 of 1949 on the file of District 's Court at Karur was filed for recovery of possession of the plaint A Schedule properties or in the alternative for partition and separate possession of half share in the plaint B schedule properties, and the learned District at Karur decreed the suit in U.S. No. 369 of 1949 by stating that the plaintiff will be entitled to a decree for partition and separate possession of half share in the plaint B schedule properties. Ex. B.16 as the certified copy of the decree in A. S. No. 492 of 1950 on the file of at Tiruchirapalli, which is the appeal filed by the defendants 2 and 3 in O.S. No. 369 of 1949 by name and and the decree of the lower Court was modified in so far as it related to the suit costs, and thereby the judgment and decree of the lower Court in O.S. No. 369 of 1949 in other respect was confirmed Ex. B.17 is the certified copy of the delivery receipt in E.P. No. 485 of 1951 in O.S. No. 369 of 1949 on the file of District f Court at Karur. The delivery receipt under Ex. B.17, which is dated 24-12-1951, states in as follows :-- ", "(Language (Tamil version) Omitted--Ed.) Thus an extent of 95 cents of land in the western half of 1.89 1/2 cents out of the total extent of 3.79 acres in S.F. No. 1430/C was allotted to the plaintiff/decree holder by name in the suit in O.S. No. 369 of 1949 on the file of at Karur. These documents marked as Exs. B.15 to B.17 came into existence at a time when there was no dispute among the parties to the suit. Therefore it is satisfactorily established by the defendants that their predecessors-in-title became entitled to 95 cents on the western side in S.F. No. 1430/C. The documents marked as Exs. B.5 to B.8 and Ex. B.12 are the subsequent sale deeds in respect of the property of allotted to him earlier in the partition suit in U.S. No. 369/49. Under Ex.B.8 which is dated 21-8-1975, the 1st defendant gets title in the western 94 1/2 cents of land in S.F. No. 1430/C. Thus Exs. B.15 to B.17 will satisfactorily establish the contention of the defendants that the extent of 941/2 cents on the western side in S.F. No. 1430/C was delivered by to his predecessor-in-title of by name , and the 1st defendant purchased an extent of 94 1/2 cents on the western side in the suit S.F. No. 1430/C under the registered sale deed dated 21-8-1975 marked as Ex. B.8 in this case. ", "24. There is one clinching circumstance in this case to destroy the case of the plaintiffs and to lend support to the contention of the defendants herein and it is the Commissioner's report and plan marked as Exs. B. 13 and B. 1.4 in another earlier suit in O.S. No. 557 of 1980. That was a suit filed by as the plaintiff as against the defendant herein. The learned Commissioner in para 5 of his report marked as Ex. B. 13 categorically stated as follows :-- ", "\", Advocate for the petitioner, asked me to note whether there is any east-west demarcating feature to divide the property on the north of the suit property, the Survey Number of which is 1430/C so as to show northern and southern portions in it. There is no east-west demarcating feature in S.F. No. 1430/C to divide it in the northern half and southern half. In S .F. No. 1430-C on the western side I found some stones planted showing as house sites.\" ", "Therefore the Commissioner's report and plan marked an Exs. B.13 and B.14 will not disclose any east-west ridge as mentioned in the plaint schedule in the present suit in O.S. No. 815/80 and there is no east-west boundary to show that the entire extent of 3.79 acres of land was divided into southern half share and northern half share. ", "25. The plaintiffs in this case relied on Exs. A8 to A12 which are subsequent sale deeds. But the earlier documents under Exs. B.18, B-15, A1 and B.1 will show that only an undivided half share was purchased by the plaintiffs predecessors-in-title. In particular Ex. B.1 which is dated 19-12-1929 and which is a lease deed executed by and another in favour of , who is the predecessor-in-title, will show that leased out only the western half share in the suit S.F. No. 1430/C. Therefore the subsequent documents covered under EX. A.8 to Ext. A.12.will not help the plaintiffs to contend that they are entitled to the northern half share of 1.891/2 cents of land in the total extent of 3.79 acres of land in the suit S.F. No. 1430/C. ", "26. Considering the above facts and circumstances of the case I hold that the plaintiffs, who are the respondents 1 to 7 in this second appeal, have no title to the northern half share of 1.89 1/2 cents of land out of the total extent of 3.79 acres of land in S.F. 1430/C, which is stated to have been divided by east-west ridge, and they were not in possession of the suit property as described in the plaint schedule on the date of suit and consequently I answer this point in favour of the appellant/1st defendant and against the respondents 1 to 7/plaintiffs. ", "27. Point No. 2 : the documents marked as Exs. A.9 to A.11 are documents of 3rd parties, and they are not inter se between the parties to the present suit or their predecessors-in-title. is the attestor of the sale deeds marked as Ex. A.9 and A. 10 and he is the purchaser under Ex.A.11. But the executants of these sale deeds market as Exs. A.9 to A.11 were not examined in this case. In the absence of the evidence of the executants of these documents the boundary recitals found in these documents will not be admissible in evidence. This was the view expressed by our in the decision . ", "28. In the decision reported in , it was laid down as follows:-- ", "\"Recitals as to boundaries in documents not inter partes are inadmissible in evidence under Sections 11, 13(a), 32(3) and 32(7) of the Act. The only method by which recitals in a document not inter partes could be admitted in evidence is by examination of the executant of the document in which such recitals as to boundaries are found.\" ", "In the present case the executants of Exs. A9 to A11 were not examined. Hence I hold that the recitals as to the boundaries in the documents marked as Exs. A9 to A11 not inter parties to the present suit are not admissible in evidence without examining the executants of the sale deeds marked as Exs. A9 to A11, and I answer this point also in favour of the appellant/1st defendant and as against the respondent 1 to 7/plaintiffs. ", "29. Point No. 3 :--Ex. B.1 is a registered sale deed executed by and another in favour of , who is the husband of and who is the grandfather of the plaintiffs in this suit. In Ex. B1 which is dated 19-12-1929, we find the following descriptions: ", "(Language (Tamil version) Omitted--Ed.) Thus the eastern 1-89 1/2 cents out of the total extent of 3.79 acres of land in S.F. No. 1430/C was leased out by none other than the grand father of the plaintiffs by name . to and another. The plaintiffs derived title through , who is the wife of the said , and therefore they cannot resile back or deny the correctness of the description of property in this lease deed of the year 1929 marked as Ex. B.1. Hence I hold that the respondents 1 to 7, who are plaintiffs in the suit, are estopped from denying the correctness of the description of the suit property even in their own document marked as Ex.B 1 in this case, and I answer this point also in favour of the appellant/1st defendant and as against the respondents 1 to 7/plaintiffs. ", "30. Consistent with my findings on the earlier points I am to hold that this second appeal has to be allowed as prayed for with costs, and the judgment and decree of at Karur in A. S. No. 74/83 dated 17-4-1985 are to be set aside, and the judgment and decree of at Karur in O.S. No. 815/80 dated 28-8-1982 are to be restored, and the suit in O.S. No. 815/80 on the file of Principal District Munsiff's Court at Karur has to be dismissed with costs throughout, and I answer this point in favour of the appellant/1st defendant and as against the respondents 1 to 7/plaintiffs. ", "31. In the result the second appeal is allowed as prayed for with costs. The judgment and decree of at Karur in A.S. No. 74/83 dated 17-4-1985 are set aside. The judgment and decree of at Karur in O. S. No. 815/80 dated 28-8-1982 are restored. The suit in O. S. No. 815/ 80 on the file of Principal District Munsif's Court at Karur shall stand dismissed with costs throughout."], "relevant_candidates": ["0001831380"]} {"id": "0000329840", "text": [", J. ", "1. In the present case the question referred for the decision of is as follows: ", "2. Whether should exercise its extraordinary jurisdiction under Section 622 of the Code of Civil Procedure, or otherwise on behalf of persons who feel themselves aggrieved by orders passed by below in cases, such as the present, in which it appears the law has specifically prescribed another remedy, by suit or otherwise? E.g.--Parties considering themselves aggrieved by orders passed under Sections 280, 281, or 282 may, under Section 283, institute a suit. Instead of filing, a suit, are they entitled to ask to exercise its extraordinary jurisdiction and set aside the order? The decisions on the point conflict, and we have, therefore, made the reference. ", "3. The matter is one of practical importance, as is shown by the frequency with which it comes up in the . That it is one of some difficulty is proved by the differences of opinion which have led to the present reference. We propose, therefore, to consider it in the light, both of the decisions of the Indian s and of those given by the English s in analogous circumstances and as the question is closely connected with others referable to the same general principles, and can be better understood by a discussion of the whole group, we will try to ascertain what are the proper grounds and limits of the 's visitatorial and superintending,--that is, of its extraordinary, jurisdiction. ", "4. Mr. relied much on the practice of the late under the wide and vague provisions of Bombay Regulation II of 1827, Section 5. In the case of v. L.R. 6 Ap. Ca. 619 the principle is stated that a cannot by mere practice acquire any jurisdiction not given to it by its Charter or Act of constitution See also per , J., in v. Sir 8 Bom. H.C. Rep. at p. 108 O.C.J. Thus the proper scope of the enactment regulating the jurisdiction of the late was not really affected by anything done, or supposed to be done, in virtue of them. For the proper limit of the jurisdiction we must still look to the words of the law: but the decisions and the practice of the , and after it of the High , are of use, as in the case of other jural questions, as showing what view was taken by competent authorities, with or without special advertence to the questions now brought before us, of the construction and application of the language we are called on to interpret. ", "5. The provisions in Regulation 1, Section 7, of 1827, reserving to the Governor in for two years the power of interpretation of the then new Elphinstone Code, and after that time giving it to , meant no more than that after the temporary suspension of the ordinary powers of these were to be resumed. It did not mean that the interpretations of were to have a legislative force, or any more than that its ordinary functions were, after two years, to be exercised as if they had not been interrupted. The English Statute of Treasons, 25 Edw. III, c. 5 Sec Reeves's Hist of the Eng. Law, Ch. XIV; Revised Statute, Vol. I p. 106; Steph. Hist of the Crim. Law, Vol. II, p. 250, provides that new and doubtful cases arising under it shall be referred for determination of their character, as treason or felony, to , but this has never been supposed to make the Judges power legislative in any special sense, since the judicial function was dropped by in this class of cases, and new Statutes were passed without reference to it , Ch. II, \u00a7 6; , Bk. IV, Ch. VI. ", "6. The grounds of the superintending and of the extraordinary jurisdiction of this are set forth in v. 9 Bom. H.C. Rep. at p. 251 and in the same case the limits imposed by the , or recognized by it, as necessarily controlling the exercise of its powers, are also stated. \"The words of the law,\" says , C.J., \"impose no limit on the exercise of the power; but the has, in its discretion, consistently refused to exercise its extraordinary jurisdiction, except in cases Which disclose some grave and patent error not otherwise to be remedied.\" The judgment, then, after ruling that the mamlatdar's , though of new creation, was a \"Civil \" within Regulation II, Section 5, of 1827, concludes: \"We think we should not interfere, unless it be quite clear that the mamlatdar's order has been made without jurisdiction, and this certainly is not clear in the present case.\" His jurisdiction depended, as the thought, on a dispossession within six months, and as it was not manifest that he had determined this point erroneously, his decision on the evidence was taken as conclusive. ", "7. . 4 Bom. 168 the point considered by the Court was whether , as reconstituted by Bombay Act III of 1876, had jurisdiction in the city of Ahmedabad. It was ruled that it had, and that had superintendence over equally after as before the recent legislation. are not generally subject to the Code of Civil Procedure, nor are they included in the provisions of the Bombay Civil Courts Act XIV of 1869, so that the visitatorial power over them has to be drawn from the earlier source of Regulation II of 1827, and from the Statute 24 and 25 Vict., c. 104, Section 9. ", "8. The superintending jurisdiction of this over all inferior Civil s, even those of recent creation, seems thus established in a manner analogous to that of over the inferior Common Law s in England. The ground of interference is limited to \"grave and patent error not otherwise to be remedied\". This principle, if taken in its literal sense, has been considerably widened in some of the more recent cases, in this . It will be desirable to review these, and at the same time to consider some of the more important decisions on similar points of the other High s in India. ", "9. The case of v. H.C. Rep. 375 was disposed of on the principle stated by , J. \"We conceive that we have full authority under Regulation II of 1327, Section 5, el. 2, to call for the proceedings of a subordinate Court, and to direct the Judge of it to exercise the jurisdiction conferred upon him by an Act of the which, owing to a misconception, he has declined to do.\" ", "10. In the case of v. Printed Judgments for 1877 p. 162 the Subordinate Judge was directed the make an inquiry into the claim set up by a claimant to property under Section 269 of Act VIII of 1859. There was a possible remedy by suit, but the direction was to exercise a particular judicial function in a way avoided by the Court below. The inquiry incumbent on the Court below had not been made. ", "11. In the case of . 7 Bom. 316 the directed an inferior to give effect to an award, filed many years before, in the way prescribed by law. It was the enforcement of a function declined by the Subordinate Judge. It may be taken then, as well established that the will enforce the exercise of jurisdiction when that is necessary, and that even the possibility of proceeding in some Other way will not shut out a right to claim the assistance of the in getting a matter dealt With judicially, in a way that was intended by the law, but cannot otherwise be made available. ", "12. In the case of , Zamorin of Calicut, v. Mad. at p. 69 there had been a refusal to file an award. On an application under Section 622 the Court said: \"Although the Judge has treated the application as a suit, it is, in fact, not a suit, and it is determined, not by a decree, but by an order refusing the prayer of the application. No appeal is given by the Act from Such an order. It is, therefore, competent to this Court to admit the application.\" ", "13. In the ' case I.L.R., 6 Bom., 663 this Court set aside an order of a Subordinate Judge for filing an award under Section 525 , Code of Civil Procedure (Act X of 1877). Under the Code no appeal would lie from a decree passed in accordance with the award. No remedy being provided by appeal or otherwise for a failure of justice in the inferior Court, the case is not such a one as that now before us. It was on a consideration of the final character of the order for filing an award that I, in the previous case referred to in the one just noticed, held in chambers that a prima facie substantial objection to the award ought to prevent its being filed. He who brings it in, is the actor seeking to establish a right, and should not be freed from the burden of proof when his application on the award is met by a case showing its apparent nullity. The same result, however, is arrived at if the burden of proof on the rule to show cause is properly laid, without a too slavish regard to the nominal positions of the parties concerned, on him who desires that the award be filed. ", "14. The sometimes underrate their powers, and is called on to enlarge their too narrow views. The case of v. 2 Mad. H.C. Rep. 264 was one of a sale under a decree in which the agent of the decree-holder had fraudulently aided the purchaser to buy at an under value by inducing other persons not to bid. The judgment-debtor sought to prevent a confirmation of the sale, but it was confirmed, as there had been no irregularity; and an application being then made to , it was held that the could rescind the order under Section 622 . \"Fraud,\" according to the familiar formula,\" is an extrinsic collateral act which vitiates the most solemn proceedings of of justice , C.J., in Duchess of Kingston's Case, 2 's L.C, 7th ed., 770.\" Lord says \"it avoids all judicial acts.\" \" of Equity\" again \"have an inherent jurisdiction to relieve against every species of fraud\"--Colt v. 2 P. Wins. 156. The of this country are of Equity, and, regarding the sale as a judicial proceeding, in the case in question ought not to have declined to annul it. Regarding it as a transaction in which the took the place of the owner, the principle applied that \"every transfer or conveyance of property... is in equity vitiated by fraud,\" much more a sale still awaiting confirmation. The High , therefore, could most properly insist on 's exercising the authority which it had declined to use on an idea that it did not exist. The former law, Section 35 of Act XXIII of 1861, extended in terms only to an excess of jurisdiction by an Appellate ; the present Code extends equally to a refusal of jurisdiction by any Civil through a misconception of its authority. ", "15. In the case of v. 4 Calc. L.R. 74 there, was apparently an exercise, by , of its extraordinary jurisdiction in a case admitting of a remedy in the regular course of the law. But that case may perhaps be referred` more properly to the principle that in India, acting, under Section 622 of the Civil Procedure Code, will, like in England by mandamus, enforce the exercise by inferior Courts of their proper functions. If the improperly refused to make an inquiry, he thereby declined jurisdiction in a case proper for its exercise, and falling within the express provisions of the Code. ", "16. But can also enforce, or control, the exercise of authority by reference to extrinsic circumstances misconceived, in their bearing on his jurisdiction, by a Judge of an inferior Court, and undo what he has done in a procedure opposed to the law. ", "17. The cases of v. 9. W.R. 309 C.R. and v. at p. 387 illustrate this view. In the former, the Subordinate Judge had made an order in a matter which in its nature was within his competence, but without any grounds in the particular case. That is, he removed, plaintiff's name without his assent. This order set aside, under the superintending power given by 24 and 25 Vict., c. 104, Section 15 . It was a case of illegality by the exercise of jurisdiction, not of want of jurisdiction, seeing that the order was assailable only under the particular circumstances. In the latter case the lower had exempted a particular judgment-debtor from liability under a decree. This was called an excess of jurisdiction, but , J., said: \"Although the is competent to require the inferior s to exercise a jurisdiction which they possess, and which they have declined to exercise, or to set aside anything which has plainly been done without jurisdiction, that Section ( Section 15 of the same Statute), will not enable this , by way of motion, to deal with an order made by a lower Appellate in cases where it has jurisdiction, and the law expressly declares that its order shall be final.\" It is obvious that the declaration of finality must apply equally to a of original as of appellate jurisdiction. In both cases the intends the controversy to be closed when the designated Judge has exercised his mind on the intended subject. His determination of it, even though erroneous, is not then illegal. The superintending function is to compel the exercise of judicial authority on the subject, and not beyond it; to define the subject by the elements composing it, and by reference to the prescribed, or intended, external conditions and to exact obedience to the law of procedure in gathering the materials for adjudication, and in giving effect to them. It is no part of that function to substitute the opinion of the superintending for that of the superintended, in matters assigned by the to the cognisance of the latter. What it can exact is a real endeavour, in good faith, to apply the law. Such an endeavour is an actual application of the law, the application intended, (as the possibility of error could not have been overlooked,) except in cases of some such extraordinary misconception as cannot be deemed to fall within the purpose of the law at all. Such instances may be negative, as well as positive--that is, there may be a refusal of relief, or of action, by the inferior , on grounds implying a total misconception and misapplication of the law in its limiting operation. There may also be instances in which both kinds of blunders have been combined. When these stand manifestly quite outside the positive or the negative sphere of the law, they are but in semblance an application of the law, and must annul what is obviously a mere pretext or a perversion. ", "18. It must be conceded, indeed, that some of the decisions have gone much further than this. On Section 622 of the Code of Civil Procedure at Allahabad has ruled that, in a case called for under that section, may pass any order that could be passed in second appeal--Maulvi Muhammad v. Syed Husain I.L.R. 3 All. 203. It was admitted that this was tantamount to giving a second appeal, at the discretion of the , in the very cases in which the had denied it. The s are bound to act, so far as they can, in furtherance of the intention of the , and the moderate construction put by this on the still wider terms of the Bombay Regulation seems to us more consistent with sound principles than that put by the Allahabad High on an enactment intended only for extreme, and wholly unusual, cases. ", "19. In Trimbak v. Naro Printed Judgments for 1880 p. 32 the rule is stated thus: \"The extra ordinary jurisdiction of this is exercised generally only when a lower has exceeded its jurisdiction, or has declined to exercise a jurisdiction with which it is clothed, or where great and irreparable wrong is done by a decree or order of a lower .\" ", "20. In v. Printed Judgments for 1881 p. 133 , J., thought that a wrong order, on an application by a purchaser at an execution sale for possession, ought to be set right by the exercise of the extraordinary jurisdiction. , J., consistently with the principle lately cited, thought it ought not, there being a remedy by suit under Section 333 of the Code of Civil Procedure. , J., admitting this, and acknowledging that the extraordinary jurisdiction had generally been confined to cases in which the applicant had not an ordinary remedy, thought an exception was admitted where an order was \"manifestly illegal and unjust\". A rule was accordingly granted. ", "21. In v. Printed Judgments for 1881 p. 223 an alleged mortgagee having set up a claim upon attached property under several mortgages.\" the Subordinate Judge found that one of these was spurious. Nevertheless he ordered a sale to be made subject to all. The decree-holder applied to this Court. The learned Judges differed as to its being, or not being, a case for the exercise of the extraordinary jurisdiction; but a rule was granted to show cause why the Subordinate Judge's order should not be modified. That order was not subject to appeal; but, if wrong, could be displaced, not only by a suit brought by the judgment-creditor, but by the purchaser, or by the judgment-debtor. ", "22. In v. Balvant Printed Judgments for 1881 p. 221 a purchaser of an equity of redemption sought to raise an attachment. His claim was rejected, because the vendor had sold without possession, the property being held by the mortgagee. , J., opposed the exercise of the extraordinary jurisdiction, and would have left the applicant to a suit under Section 283 . , J., thought it should be exercised, and , J., agreed with the latter, on the principle; as, stated by him, that, \"when, in a proceeding in which no appeal is, permitted, there appears on the face of the judgment of a subordinate Court, not a doubtful question of law or fact, but a manifest error of law vitiating the decision, 1 think that we ought, as a rule, to exercise our extraordinary jurisdiction, and not put the aggrieved party to the delay and expense of; a regular suit.\" ", "23. In v. Printed Judgments for 1882 p. 197 a Subordinate Judge disallowed a claim to attached property, as resting on a sale by a, vendor not himself in possession, though his tenant was , J., thought it, a proper case for the exercise of the extraordinary jurisdiction: , J., was of an opposite opinion, as a remedy was open by suit under Section 283 : , concurred with the former. ", "24. In Uttamram v. p. 199 a difference of view as to whether the extraordinary jurisdiction should be exercised in a case of costs, thought by one learned Judge to have been wrongly and by the other rightly dealt with, was, on reference to Melvill, J., dealt with on another ground, viz., that there was a question of who were necessary parties defendant, which had been disposed of by in a way that, if wrong, would work an injury to the plaintiff. A rule was, therefore, granted to the plaintiff. ", "24. . 6 Bom. 728 this , following an early ruling, cancelled a certificate of heirship given to a minor. This is said to have been done under the extraordinary jurisdiction but though a refusal to grant a certificate could not, it was said, be appealed against, that being a matter of discretion Re , 14th April 1864, yet it appears from Sections 23 and 38 of Act XXIII of 1861, coupled with the provisions of the Civil Procedure Code, Act VIII of 1859, Sections 333 , 363 , 388 , that an appeal might possibly, be made against an order granting a certificate. That such appeals, in the irregular form of applications, were several times entertained, appears from the cases referred to in v. 8 Bom. H.C. Rep. A.C. J. 162. Sections 540 and 647 of the present Code have preserved this appellate, coupled necessarily with a superintending See Statute, 24 & 25 Vict., c. 104, Sections 9 , 15 ; Letters Patent of 1865, para. 16 jurisdiction, if it existed, as it was probably thought by the to exist, under the former Code. If there was no appeal, then the case, being one in which no remedy in the same course of proceedings, beyond the supposed to have erred, is provided by the law, was one of a class to which most of the cases of interference have belonged. ", "25. In the case of v. Application 14 of 1882 on an application be the , in its extraordinary jurisdiction, against a 's decision, and not, therefore, under the Code of Civil Procedure, this reversed the order, because the evidence had been improperly taken. This furnishes a good illustration of the kind of irregularity which the may correct by its interference. The 's order is final for its own purposes, inasmuch as no appeal lies against it, and the irregularity was of a kind not depending on any appreciation of evidence. It consisted in a gross infringement of the external conditions imposed by the law on the collection of the \"materials for adjudication. ", "26. It is not easy, if possible, to reduce this series of decisions to consistent results. It comes out, however, that will interfere to enforce the exercise of jurisdiction, or to restrain an excess of jurisdiction, in cases apparently calling for such interference, even though there may be a remedy by suit. When there is a remedy by appeal, the cases do not appear to warrant such interference, except under circumstances in which an appeal would manifestly be ineffectual. In cases of illegality and irregularity in dealing with matters in their nature cognizable by the inferior , has generally been governed by a similar principle. But where the further remedy was to be obtained, not by an appeal, but by a separate suit, seems, at least in recent years, to have interfered more freely in cases in which there had been some palpable perversion of the law, or what prima facie seemed to be such a perversion. In the first case we have referred to, the thought it could interpose only where there had been an excess of jurisdiction; in the later cases, it has interfered wherever there had been\" a grave and patent error not otherwise to be remedied,\"--as it would seem, in the same course of proceedings,--regarding the original inquiry and the appeal, as for this purpose continuous. The mere provision of a separate suit seems not to have been held a sufficient reason for refusing to correct a first injustice when this arose from a palpable illegality, whether in acting, or refusing to act, judicially, or in the method of judicial action. ", "27. This extension of the 's powers, or rather of the definition of the proper limits of the exercise of its powers as they were formerly understood, has accompanied a development oil the jurisdiction as conferred by the Code of Civil Procedure, which must have been caused by a similar perception of evils to be remedied, and have had similar means in view. Section 622 , which in the Code of 1877 was limited to cases of jurisdiction, was, by Act XII of 1879, widened so as to embrace \"illegality\" or \"material irregularity\", in the exercise of jurisdiction by the subordinate s. It must have been felt that, without exceeding its jurisdiction, a might give orders unwarranted by the law under the circumstances, or attended with irregularities of procedure which would defeat the intention of the . It began to be no longer possible to call every error made by a an excess of jurisdiction. But what precisely was intended by \"illegality\" and \"irregularity\" has been left undefined. As the adjective \"material\" is annexed to the latter word, we must suppose that it is meant to provide against departures from rule which have prevented an investigation being made such as would enable a right, or duty to be established in the way contemplated by the Code, or have given effect, or refused effect, to particular rights in ways quite different from what it prescribes. The word \"illegally\" presents more difficulty. In one sense, every erroneous decision or order is illegal; in another, no judicial order is \"illegal\", even though it may call for reversal or amendment, which is within the general competence of the Judge who makes it. What probably was meant was an obviously perverse use of jurisdiction, or authority, which could not be justified even on the premises assumed or found by the Judge, or else, some palpable transgression of rule in the collection of the premises, an error, in either case, not admitting of reasonable question. Such an error undoubtedly warrants the interference of this , even under the Civil Procedure Code: the precise circumstances under which it will interfere are left to its discretion. What is abnormal cannot in its nature be provided for precisely by rules, and an extraordinary jurisdiction cannot be meant for ordinary cases. We can only say with confide ace that when the Code says \"final\" it speaks on the supposition that there has been a reasonable' attention to its rules, and to ordinary principles, in the previous proceedings; that, where it provides an appeal, it does not intend that the appeal should be superseded; that, even when proceedings are quashed, it does not intend the lower functions to be transferred to the higher ; and, lastly; that where conclusiveness for their own purposes is given to inquiries or orders of a subordinate , which are obviously regarded as of but a provisional effect as founded on a summary or limited investigation, the further suit or proceeding in any cases provided, is not meant to be replaced by an order under our extraordinary jurisdiction. Such an order must usually be itself grounded on a defective investigation of the facts; one, at any rate, less effectual than could, in the view of the , be had by a regular suit, and should not be made except when the mischief is demonstrable and urgent, and resort to a suit will not, for some special reason, really fulfil the purpose of the . ", "28. In such a conflict of opinion as has arisen on the subject we are now considering, it may be useful to see how similar questions have been dealt with by the in England. Their decisions can, of course, only afford analogies, not precedents for so differently constituted as those in India; but these analogies point to principles of general application, and thus repay our attentive consideration. A superintending and visitatorial jurisdiction has been exercised from ancient times by and by . The powers of the former have been executed through the writs of certiorari, of mandamus, and; of prohibition. ", "29. By the last of these, the has been wont to check an assumption or excess of jurisdiction; by the second, it has enforced the use of powers improperly declined; by the first it has withdrawn to itself the proceedings of inferior s in which some illegality or irregularity required its interference, for the purpose of preventing a defeat of justice. The legal limits of its powers in this sphere it would be hard to define; few cases of hardship could be put such as it has not at some time endeavoured to remedy; but in recent times the proper grounds and limitations of its somewhat arbitrary authority have been; more strictly analysed than formerly, and the consequence has been a, marked contraction of the range of its interference, if not of its abstract jurisdiction. ", "30. had jurisdiction over \"all errors in fact or in law upon judgments by any other. Court,\" and to correct and reform all errors and misdemeanours extrajudicial which tend to oppression of the subject\" Co. 4 Inst., 71. It has \"not only power to reverse erroneous judgments, but also to punish all inferior Magistrates, and all other officers of justice, for wilful and corrupt abuses of authority Bac. Abr., Vol. II, p. 143. ", "31. The great powers thus vested in it the exercised over the subordinate s usually by calling for their proceedings by writ of certiorari. This authority was so essential to the that \"there are numerous cases in the books which establish that, notwithstanding the privative clause in a Statute, the of Queen's Bench will grant a certiorari\"--Colonial Bank of Australasia v. at p. 442. This power conferred on a in a colony was held not to be extinguished even by a clause expressly taking away the power to remove the proceedings from a particular into the , Ibid, though an appeal was provided to the Chief Judge of the inferior See Vin. Abr., tit. Certiorari. But, then, the power, it was said, could be used only in extreme cases not practically admitting of another remedy. \"In any such case that will not quash the order removed, except upon the ground, either of a manifest defect of jurisdiction in the tribunal that made it, or of manifest fraud in the party procuring it\" (1) L.R. 5 P.C. at p. 442. These are the most obvious grounds, apart from express legislative authority, for the interference by a Chief with the proceedings of one inferior to it, in the exercise of a superintending or extraordinary jurisdiction. The proceedings are conceived, not so much as a fulfillment of the statute or law, as a perversion, or mere semblance of applying it. By the Code of Civil Procedure, as it now stands, the High can not only check an excess of jurisdiction, but may compel the exercise of jurisdiction, and control its exercise so as to correct illegality or material irregularity. These are the powers formerly vested in the of Queen's Bench, reduced now, where certiorari has been withdrawn, to the limits already indicated; v. at p. 437. argument of Mr. . ", "32. Then, it is said in the same judgment (at page 443) \"Objections founded on the personal incompetency of the Judge, or on the nature of the subject-matter, or on the absence of some essential preliminary, must obviously, in most cases, depend upon matters which, whether apparent on the face of the proceedings, or brought before the superior by affidavit, are extrinsic to the adjudication impeached. But an objection that the Judge has erroneously found a fact which, though essential to the validity of his order, he was competent to try, assumes that, having general jurisdiction over the subject-matter, he properly entered upon the inquiry As to this Section , v. Proud L.R. 1 Cr. C. 71 but miscarried in the course of it. The superior -cannot quash an adjudication upon such an objection without assuming the functions of a of appeal, and the power to re-try a question which the Judge was competent to decide. Accordingly, the authorities, of which . v. Bolton 10 L.J.Q.B.95; S.C. 1 Q.B. 66 and . v. St. Olave S.E. & B. 529 may be taken as examples, establish that an adjudication by a Judge having jurisdiction over the subject-matter is, if no defects appear on the face of it, to be taken as conclusive of the facts stated therein; and that the of Queen's Bench will not, on etrirari, quash such an adjudication on the ground that any such fact, however essential has been erroneously found.\" And, again, it is laid down (at page 446) that the Supreme should \"not enter on re-trial of the questions within the competence of the inferior , and disposed of by it upon the evidence, A contrary course, it is said, would be opposed \"to the principles established by : v. and that class of cases.\" ", "33. We may, from this judgment, gather with reasonable certainty the opinion of the highest present authorities, that the power of control almost essential to the conception of cannot be divested except by the most express and pointed statutory provisions See also Er. p. Bradlaugh, L.R., 3 Q.B.D., 509, but also that it is not to be used so as to supersede the lower in their proper functions, by substituting its own judgment for theirs in matter's committed to their jurisdiction, by the . It is further to be observed that their Lordships of L.R. 5 P.C. at p. 441 rely on the fact that the Statute they had to expound gave an appeal to the Chief Judge of as a ground for holding that the general power of certiorari was withdrawn, even in the case of proceedings under a previous Act, connected with the later one only by a general provision in the latter giving a right of appeal from the subordinate of Mines to that of the Chief Judge. In argument for the respondents, who had to maintain' the certiorari, Mr. put his case thus Ibid, at p. 433; \"A right of appeal can be given only by express words... there was no appeal open to the respondent's, and, therefore, it was a case to be set right by on certiorari for when the creates a without appeal, it is presumed that certiorari lies to restrain excess of jurisdiction.\"The exception allowed by this able advocate implies that he, felt he could not contend for a certiorari where the remedy intended by the law was, an appeal, and where there were not some special circumstances in the case making that remedy inapplicable, or ineffectual, or else such as to place the case altogether outside the, intention and scope of the privative clause. ", "34. That this conception, of the grounds and limits of interference was historically a correct one is easily, shown by, reference to the earlier authorities. Several of these are collected in Bacon's Abridgement, Tit. Certiorari, to prove that the \"will not grant certiorari, where an appeal is given, if the objection be, not to the want of jurisdiction, but to the merits; for that is more properly the subject of appeal.\" A fortiori, they will not grant it, pending an appeal. Similar propositions are set forth in Comyn's Digest, Certiorari (D). For more recent times reference may be made to the case of Ex. p. Blewitt re 14 L.T.N.S., 598 In that case the allegation was that the justices had convicted without any evidence at all; yet, as they had jurisdiction over the subject-matter, and the conviction was formally valid, refused a certiorari. ", "35. \"The grant of the writ being discretional\"--Zink v. 2 Doug. 749 and' E. v. 6 T.R. 251--it will be refused on such a ground as that the party seeking to get an inquisition into compensation quashed lies allowed the time to expire within which he could have \"got an award set aside under the same(Lands' Clauses Consolidation) Act\"--The Queen v. L.R. 5Q.B.D. 179, 182. In India, as in England, the grant; of a rule under the extraordinary jurisdiction is discretional, and the power should be, used only to sustain, and not further to disturb, the regular course of judicial administration; to prevent distortions, or sham applications of the law, but not to promote uncertainty and restlessness, by an over-nice scrutiny of proceedings that\", aim at promptness rather than refinement. ", "36. It does not appear, indeed, that the principles now recognized were always strictly adhered to in the earlier English cases, and in R. v. Eaton 2 T.R. 89 it could be argued that a certiorari issued of course; but in that case it was definitely laid down that a cause must be shown. In R. v. Sparrow 2 T.R. 198 a certiorari was quashed on account of an appeal having been made against a commitment to the sessions. In R. v. Bass 6 T.R. 251 the still looked into the evidence; but finding the justices, had, as it appeared, drawn the right conclusion, it refused the certiorari prayed for. But a greater strictness prevailed as the grounds of interference became more distinctly conceived, and as, no doubt the general administration of justice by the inferior s improved in regularity, until jurisdictional errors have, as we have seen, in recent years, become almost the sole admitted ground of interference. ", "37. As a certiorari is the appropriate means of restraining an excess of jurisdiction, so by mandamus the inferior in England are made to do a duty which, they have sought, in any case, to decline. It is a cumbrous process, and has been superseded As in India, see Specific Relief Act , I of 1877, Chap. VIII in some cases by more expeditious methods See Common Law Procedure Act, 1854, Sections 68 to 77 ; but the principles of interference and control remain what they were. The object of the writ is to prevent a failure of justice, and it is granted only where there is no other specific remedy--R. v. 2 Dong. 624; R. v. The Mayor of Colchester 2 T.R. 259; R.v. Commissioners of Dean Inclosure 2M. & S. 80- -by which such a failure can be prevented--R. v. 1 Cowp. p. 377; . 396. Thus it lies to compel an inferior to adopt the requisite proceedings--Amherst's Case 1 T. Raym., 214; and to record correctly--R. v. 5 D. & R. 489; but not to come to a particular decision, even though it appears the one actually arrived at may hare been erroneous-- 4 D. & R. 735; R. v. Justices of Monmouthshire 7.D. & R. 334. The will not substitute its own judgment for that of the , or body invested by law with authority--R. v. Justices of Middlesex 4 8. & Ald. 298. On an application grounded on an affidavit of gross injustice, the Judges said they could command the Judge of an inferior to give judgment, but could not thus review his proceedings, or try an alleged irregularity--Ex. p. Morgan 2 Chit., 250; and in another case, where a judgment-creditor complained that an inferior refused to allow him to sign judgment, it was pointed out that there was a _ remedy by writ of error; and the added--R. v. Marq. of Conyngham 1 D. & R. 529--\" It is our constant practice to refuse the writ of mandamus to a party who has another remedy, which the plaintiff in this case certainly has.\" ", "38. In the case of , the Statute, 9 and 10 Vict, c. 108, Section 43 , abolished the writ of mandamus, but allowed any person interested to call on a Judge, or officer, of ; to show cause in a superior Court why he should not do some specified act. Before this, a Judge, who had refused to receive a plaint for an insufficient cause, was compelled by mandamus to accept it--It v. 21 L.J. Q.B. 8. Still, however, if he had once heard the case on the merits, though no appeal lay, yet no mandamus, it was held, could be issued, however erroneous his decision, to compel him to rehear the case on its merits-- v. 15 Jur N.S. 1037. Much less would take into its own hands the adjudication of a case already disposed of by the tribunal designated by the . ", "39. In the case of the King v. The Directors of (4) 4 M. & S. 279 had directed an alteration to be made in a despatch intended to be sent by the directors to India. The directors refused, and the Board Applied to for a mandamus. The directors replied that the proposed change amounted, in effect, to a direction by on a matter not within its authority, as not relating to the civil or military government of India. Section 16 of Statute 33, Geo. ITI, c. 52, provided that, in the event of a dispute on this point, an appeal might be made by the directors to the King in . It was urged for the directors that, notwithstanding this provision, the would not, by mandamus, enforce the performance of what it did not consider a legal duty; but Lord said: \"this is an objection which the of Directors ought to submit to the decision of the Privy \"... \"as far as we are concerned it is perfectly alieni fori, and upon which we, therefore, sedulously abstain from pronouncing any opinion.\" Afterwards the directors appealed to the Privy , and the decision having been against them, the rule for a mandamus was made absolute. In this case, the having a general power to enforce legal duties see v. and 32 L.J. Ch. 329 declined to refrain from exercising the power on an assertion that the alleged duty did not exist, and refused to examine that question because the law intended it to be disposed of by appeal to another tribunal. The competence specially assigned to that other tribunal involved, in the opinion of the , an incompetence to deal with the same subject itself. ", "40. The ordinary means of, preventing the exercise of a jurisdiction not at all vested in a , in England, is by writ of prohibition. The application of the law may be illustrated by the case of v. Base L.R. 4 Q.B. 4. There a Judge of a County had, given himself jurisdiction, in a case of ejectment, by a misconstruction of the section as to valuation. , C.J., says: \"If there has been a real conflict of testimony upon some fact which goes to the question of jurisdiction, the will not interfere except upon very strong grounds. The Judge has then really exercised his discretion; but when he has given himself jurisdiction by coming to an erroneous conclusion upon a point of law, the case is very different, and he is, in fact, without jurisdiction, and has no authority to entertain the question., It is apparent that that was the case here, and, 1 think, therefore, that the writ of prohibition ought to issue.\" ", "41. In the same case , J., says: \"On the second, point I would refer to v. 14 Q.B. 710; S.C. 19 L.J.Q.B. 189 where, to a declaration, in prohibition against a Judge, which stated that title to land was in question, there was a plea alleging that the Judge heard the evidence of both parties upon the point, and adjudged that title was not in question. The plea was demurred to, and judgment was given for the plaintiff; the ground of the decision being that, although the Judge must of necessity decide the point for the time, his determination was not conclusive, as in the analogous case of a plea to the jurisdiction; and as there was no writ of error from the , the question, whether there was jurisdiction or not, must be open to one of the superior Courts on motion for a prohibition. If the value of the land was above \u00a320 there would be good ground for issuing the writ; and I am quite prepared to hold that, if the evidence upon that point was conflicting, that circumstance, though not conclusive upon us, so as absolutely to deprive as of the discretionary power of granting the prohibition, would so far influence us, that we should require very strong grounds before we should interfere. It is clear, in the present case, that what the Judge found was simply that, taking his view of the law, and deducting the ground rent, the value of the ground was below \u00a320. I think that he was wrong in the conclusion at which he arrived, because ho applied a wrong rule of law to the facts, and, therefore, that he had no jurisdiction.\" ", "42. It is to be observed that the learned Judge puts the competence of to examine the facts, in the case he refers to, on the circumstance of there being no writ of error from . There was no remedy after a wrong judgment should be delivered; and, therefore, the Judges were forced to see whether the facts did or did not, on any reasonable construction, give jurisdiction, as the Judge of had Supposed. This agrees with the view expressed by the same learned Judge in v. , quoted in v. Willan L.R. 5 P.G. at p. 441; while the opinion of the Chief Justice is substantially the same as that expressed by him in Ex p. Vaughan I.R., 2 Q.B., 117. According to either view, the 's visitatorial or superintending power of interference is to be very sparingly exercised when another remedy is provided in the regular course, and in a case of conflicting evidence as to facts, on which the jurisdiction of a tower depends, it would, except in a very extreme case, be held contrary to sound principles to interfere. 6 T.R. 177 the said: \"If there be any evidence of an offence, over which a Justice of the Peace has summary jurisdiction, the will not estimate its value.\" And in Re 30 L.J., M.C., 19 a conviction by Justices of the Peace on a minor charge was sustained, merely because they might have believed so much of the evidence only as sustained that charge, and not the rest which went to prove one beyond their jurisdiction. When no reasonable construction of the facts affords a ground for the assumed jurisdiction, the superior always may interfere, but will always be reluctant to do so when, by writ of error, or otherwise, a wrong judgment may be set right. ", "43. In v. , 346 the case was not within the jurisdiction of . A. clause in the Constituting Act required any objection by a defendant on that ground to be made by special plea, and added, \"if the want of jurisdiction be not so pleaded, the shall have jurisdiction for all purposes.\" The defendant had not pleaded want of jurisdiction; but he obtained a prohibition, the clause being construed as applicable only within the , not as ousting the jurisdiction of the superior , where the inferior had, by its constitution, been excluded from cognizance of the cause. ", "44. The case of v. was disposed of on the ground of want of jurisdiction. The Recorder of Liverpool thought that required a time for making up their minds whether to appeal or not against a poor rate which entitled them to a hearing at the nest quarter sessions but one, instead of the next quarter sessions. thought that so much time was not required. They held that the admission of the appeal was an excess of jurisdiction, and granted a prohibition. It would seem that as the Recorder had a general jurisdiction over the subject-matter of the appeal, the trial before the recorder, apart from any prohibition, could not have been regarded as coram non judice, and the case would, on the principles recognized in v. Ramalinga Filial L.R. 2 I.A. at pp. 222, 323, rather be referred to an illegal exercise of jurisdiction than to a want of jurisdiction. An error as to limitation is not generally regarded as jurisdictional--see Case L.R., 8 I.A., 123. The case shows, however, that the facts may be looked into, and appreciated differently, in the higher , when the very point to be determined, the legality or illegality of the course taken by the subordinate , depends on that investigation, as showing a particular state of things to have existed or not existed. Illegality in the exercise of an acknowledged jurisdiction was a ground on winch many prohibitions issued in former times from the Common Law s in England. It is recognized in v. 3 Eas 472 as sufficient, where the Spiritual had misconstrued a Statute, though it had jurisdiction of the subject; but Lord owns that, apart from precedents, the dictum of , J., in 4 T.R. 807 would be worthy of respect, that \"it the s below have jurisdiction over the subject, though they mistake in their judgment, it is no ground for prohibition, but only matter of appeal.\" ", "45. The great increase in the number of public boards in England in recent times, and the various duties imposed on them, have led to many applications to the superior , grounded on complaints of failures of duty which these could correct. The have thus been driven to consider, more closely than in former days, the extent to which they can properly use their undefined powers, in relation to bodies vested with special duties, and a discretion requisite to the due performance of them. The result has been a recognition of the impropriety of checking the exercise in good faith, of any special competence--see per Lord in v. for London L.R. 9 Ch. Ap. 122; per Sir in Duke of Bedford v. Dawson L.R. 20 Eq. at p. 358; and in v. Buxlon Local Board L.R. 1 Ch. Div. at p. 224. in the case of the Attorney General v. at p. 743 , L.J., says: \"It is very important, no doubt) that all these special jurisdictions, and powers, which are given to departments of the ) and other similar bodies, should not be exceeded, and that such bodies should keep themselves within the jurisdiction which is given to them. But, as it appears to me, it is no less important that we should set them the example of keeping ourselves within our proper jurisdiction, and I am of opinion that we have no jurisdiction to sit as Judges on appeal from a finding of ok the facts properly brought before them in this matter-, and that we ought not to try to find reasons for substituting our judgment and decision for theirs.\" ", "46. This may be received as expressing the latest conviction of the English judicial mind as to interferences with constituted authorities. In the particular case of those vested with judicial powers, the Lord Chancellor of Ireland disapproved even of censorious comments, where there had been no excess of; jurisdiction by the inferior authority such as to warrant the superior in quashing its proceedings. The remarks are cited with approval by Sir in his edition of Pothier on Obligations, Vol. II, p. 353. ", "47. The Specific Relief Act , I of 1877, ch. VIII, in abolishing the writ of mandamus, enacts that may require \"any specific act to be done or forborne within the limits of its ordinary original civil jurisdiction by any... inferior ;\" but the conditions are imposed (a) of a wrong to the applicant; (6) of a duty clearly incumbent on the inferior ; (c) consistency of the order sought with justice;(d) \"that the applicant has no other specific and adequate legal\" remedy; and (e) \"that the remedy given by the order will be complete.\" These provisions, which express the results of an experience of centuries gained by superior s in England, working without statutory limits to their jurisdiction, show very clearly the proper conditions of peremptory interference, even when there has been an excess of jurisdiction, or a failure to exercise it, by the lower . It is very desirable that there should, as far as possible, be a complete In the course of his judgment, his Lordship said: \"It has been urged at the bar that the Commissioners and Sub-Commissioners of Excise are illiterate, and that they are partial and interested men. But if the has thought fit to commit judicial powers to men of that description, we should very much exceed our jurisdiction, and grossly mistake the authority committed to us, if, in giving judgment upon this record, we were to enter into a consideration of the policy of that establishment. Sitting in a of law, I am not at liberty to enter into an examination of the justice or injustice of any judgment of a of competent jurisdiction, unless it comes before me by writ of error. All parties to such a judgment arc bound by it, until it is reversed by a tribunal having competent authority to review it. I know of no such dangerous and extravagant excess into which any of justice can be betrayed, as entering into a discussion of legislative policy in erecting particular tribunals. If the has thought fit to commit judicial powers to excise officers of a particular description, we can only see that they do not exceed the jurisdiction intrusted to them. If they do not exceed their jurisdiction, we have no authority to pronounce that they are incompetent or corrupt Judges. ", "agreement of principal between the working of this at its original and appellate sides, in giving effect to kindred jurisdictions. The terms imposed on the one may well serve for guidance to the other branch of the , unless they contravene some law which the latter branch has to administer. It does not appear that, in regulating the exercise of our ill-defined authority by the principles in question, we shall diminish our power to correct abuses of the law, which the does not intends to be corrected in other ways, by other means. Where it intends the first stage of a judicial inquiry to be the last also; where it intends possible errors in such an inquiry to be set right by an appeal; our supersession of the designated s would be a usurpation, by whatever motives it might be induced. If the law as administered, with a restrained exercise of our powers, should prove ineffective, the can readily widen our sphere of activity by enactments adapted for that purpose. ", "48. From the consideration we have given to the whole subject, the following conclusions may, we think, be deduced: ", "(1). The visitatorial or superintending power of is so necessary, and almost indispensable, that it is not to be wholly excluded even by a clause in a Statute withdrawing cases under the Statute from its control. When such a Statute has been made a mere pretext, or has been wholly misapplied, the case will be treated as one not really arising under the Statute, but on an evasion or perversion of the Statute, and, as such, subject to the general control of the , by which a rational application is to be secured to both the positive and the negative provisions of the law. ", "(2). The , having called up the record or proceedings of a subordinate , will itself investigate the facts on which a jurisdiction has been assumed or declined; on which it depends whether the subordinate could, or could not, legally deal with the matter in question, either at all, or on the principle to Which it has referred the case; or according to which its mode of inquiry, or of action, may, or may not, have been in contradiction, than obedience, to the rules of procedure, or the principles implied in them, to such a material extent as to defeat the purpose of the law. ", "(3). If the finds that the external conditions of jurisdiction, of investigation, and of command, have been satisfied by the inferior , it will not substitute its own appreciation of evidence or its own judgment thereon, for the determination of the inferior , in any matter committed by the to the discretion of such , whether for the sake of promptness, or finality, or because the lower has been thought by the the best tribunal for dealing with the matter in question. ", "(4). Where an appeal is provided, the Court will not interfere by any peremptory order with the ordinary course of adjudication, save in cases wherein a defeat of the law, and a grave wrong, are manifest, and are irremediable by the regular procedure. ", "(5). Where a decree or order of a subordinate is declared by the law to bo, for its own purposes, final, or conclusive, though in its nature provisional, as subject to displacement by the decree in another more formal suit, the will have regard to the intention of the that promptness and certainty should, in such cases, be in some measure accepted instead of juridical perfection, It will rectify the proceedings of the inferior where the extrinsic conditions of its legal activity have plainly been infringed; but where the alleged, or apparent, error consists in a misappreciation of evidence, or misconstruction of the law, intrinsic to the inquiry and decision, it will respect the intended finality, and will intervene peremptorily only when it is manifest that, by the ordinary and prescribed method, an adequate remedy, or the intended remedy, cannot be had. ", "(6). The will, in all cases, regard its exercise of the extraordinary jurisdiction as discretional, and subject to considerations of the importance of the particular case, or of the principle involved in it, of delay on the part of an applicant, and of his merits with respect to the case in which the interference of the is sought, Should other special causes appear for, or against, the 's intervention, due weight is to be given to them, regard being always had to the principles already enunciated. ", "(7). The will \"sedulously abstain from making\" any order, or refusing to make it, on grounds, the appreciation of which is exclusively assigned by law to some other authority, provided the legal competence be exercised, in good faith, on matters that may reasonably be understood as within its lawful range. ", "49. It seems to us that the question put by does not admit of a precise categorical reply; that the cannot impose on itself limitations without regard to circumstances; but that it should generally be governed, in the class of cases in question, by the principles contained in the fifth of the propositions just stated."], "relevant_candidates": ["0000403856", "0000563376", "0001208422", "0001310375", "0005206851", "0150417452", "0154112735"]} {"id": "0000342651", "text": ["JUDGMENT ", "1. This appeal has arisen out of suit which was instituted by the plaintiffs for recovery of possession on ejectment of the defendants. decreed the suit on contest as against some of the defendants and ex parte against the others. It declared the plaintiffs' title to the land and directed that they would recover khas possession on evicting the defendants therefrom. The defendants thereupon preferred an appeal. The learned Subordinate Judge who dealt with that appeal dismissed the plaintiffs' claim holding, that although he found in favour of the plaintiffs on the merits, the decree of was to be reversed and the suit dismissed on the ground that notices under Section 106, T.P. Act , were neither sufficient nor properly served. ", "2. The plaintiffs have then preferred this second appeal and on their behalf the findings of the Subordinate Judge, both on the question of sufficiency of the notices as also on the question of their service, have been challenged in this appeal. ", "3. As regards the sufficiency of the notices what has been found against the plaintiffs by the Subordinate Judge is that the notices purported to have been signed by certain persons as am-mukhtears on behalf of certain ladies and that it had not been proved in the case that the persons who purported to sign on behalf of the said ladies as such am-mukhtears had been duly authorized by the said ladies to issue the said notices. The learned Subordinate Judge has found that upon the evidence in the case proper execution of the am-mukhtearnamas had not been duly proved, and further more that although in the am-mukhtearnamas power was given to the am-mukhtears to sue in ejectment there was nothing said conferring any authority to the am-mukhtears to issue notices to quit. As regards this matter it is sufficient for us to say that in the written statement that was filed on behalf of the defendants no question as to the want of a power of this character in the am-mukhtearnamas or as to the am-mukhtearnamas not having been duly executed by the ladies appears to have been raised. If it was the defendants' desire to contest the validity of the notices upon grounds such as these, it was clearly their duty to put forward their objection on this head definitely and specifically in the written statement in order that the plaintiffs could have produced necessary evidence showing due and proper execution of the am-mukhtearnamas and the fact that the power to issue notices on behalf of the ladies was conferred thereby. Moreover even if there was any defect in the am-mukhtearnamas as regards these matters the plaintiffs could have proved that the notices were issued under authority duly given by the ladies because the law does not say that such authority must necessarily be given in writing. It may also be mentioned that the power to sue in ejectment should ordinarily be taken to include power to take up such action as may be necessary as preliminaries to the institution of such a suit. In view of the fact that the objection was not taken in the written statement and the matter did not form the subject matter of discussion in and was not even mentioned in the grounds of appeal which the defendants preferred to the lower appellate Court, it was not right on the part of the learned Subordinate Judge to have gone into this question at all. ", "4. As regards service of notices the learned Subordinate Judge has held that the notice that was meant for one had not been duly served. , it appears, denied in the written statement that there was any service of notice on him. But he did not appear as a witness and did not adduce any evidence to the effect that the notice meant for him was not received by him. On behalf of the plaintiffs it was proved that notice was sent by registered post and an acknowledgment purporting to have been signed by and received back through the post office was produced and proved in the case. On these facts the learned Subordinate Judge should have held that the service of notice upon had been proved in view of the decision of in the case of A.I.R. 1918 P.C. 102. In that case their Lordships quoting the decision in the case of v. W.N. 119 observed that if a letter properly directed containing a notice to quit is proved to have been put into the post office it is presumed that the letter reached its destination at the proper time according to the regular course of business in the post office and was received by the person to whom it was addressed. That presumption would appear to their Lordships to apply with still greater force to letters which the sender has taken the precaution to register and is not rebutted but strengthened by the fact that a receipt for the letter is produced signed on behalf of the addressee by some person other than the addressee himself. In this particular case as I have already stated had not come forward to deny his signature on oath and in view of the presumption which arises upon the circumstances of the case it must be held that until that presumption is rebutted the service of notice upon had been duly proved. The learned Subordinate Judge in our opinion was wrong in not giving effect to this presumption. ", "5. With regard to the service of notice again the second question that arises is with reference to the notice of . The notice meant for was also sent per registered post and served on one . has been examined on behalf of the defendants and he has said that he forgot to make over the notice to . The postal peon who delivered the letter to was examined but he was unable to say that he made over the notice to at the request of . The learned Subordinate Judge thought that it was the duty of the plaintiffs to go further and to prove that the notice that was served on had actually reached . He held that her evidence to that effect was not forthcoming and it should be taken that the notice was not served on . The notices that were given in this case were addressed to all the joint tenants and copies of such notice are alleged to have been served upon the joint tenants severally. in the case of A.I.R. 1918 P.C. 102 to which reference has already been made, pointed out that in the case of joint tenants each is intended to be bound and it has long been decided that service of notice to quit upon the joint tenant is prima facie evidence that it has reached the other joint tenants. In view of the fact that we have found that service of notice to quit upon had been established, applying to the case the dictum of referred to above it follows as a matter of course that the other joint tenants including had been served with notice. Our attention has been drawn to the decision of this Court in the case of in which, according to the contention of the respondents, some observations have been made which may be taken to have detracted from the correctness or applicability of the dictum to circumstances such as arise in the present case. On examination of the facts of that case, however, it appears that all that has been laid down in that case is that the notice in order to give rise to this presumption must be addressed to all the joint tenants and that where no notice was addressed to one of of the joint tenants the mere service of the notice on the other joint tenants is not sufficient notice to quit according to law. In the present case the notices that were issued were addressed to all the joint tenants. On the question of service of notice also therefore the decision of the Subordinate Judge is not correct. ", "6. The respondents have then drawn our attention to two passages in the judgment of the Subordinate Judge which are somewhat in conflict with each other and from a perusal of which the conclusion may not unreasonably be arrived at to the effect that the notice as well as the suit excluded a portion of the tenancy which is in the occupation of the defendants. One of the passages runs in these words: ", "'s land must have been in regard to a portion of it on the north of the District Board Road.... The suit is for eviction from the land lying to the south of District Board Road. The plaintiff's case is 2 bighas 12 cottahs of land lying in the south of the road was let out. But this cannot be possibly true as I have seen that had also some land to the north of the road and his brother 's boitakhana was situated there. ", "7. The other passage runs in these words: ", "The plaintiffs have sued for all the lands in the possession of Darajtulla'a hairs as appertaining to the jote but they have understated the area. They have resorted to this understatement with two objects in view. They would not admit that any land of Derajtulla lay to the north of the District Board Road and had been acquired by . In the next place they thought it necessary to minimise the area of the land to make it appear that the land could not have been let out for agricultural purposes. ", "8. What exactly was the finding of fact of the Subordinate Judge on this question we are not in a position to appreciate. If it was only an understatement in the area, the whole of the land forming the subject-matter of the tenancy having been included, the defect in the notice or in the suit would not be fatal to the plaintiff's case. It has been held in the case of v. [1898] 26 Cal. 35 that where a notice to quit stated the area of the defendant's holding to be I bigha 5 chitaks but the true area was If cottahs less and no boundaries were given, it was not a defect which would make the notice bad in law. But if it be a fact that a part of the land of this tenancy was excluded from the notice and from the suit and of such part the defendants are in possession as tenants under the plaintiff the plaintiff cannot possibly obtain a decree' in the suit. ", "9. The question whether the notice and the suit covered the entire tenancy or whether they have left out a part of it which is in the defendants' occupation will have to be re-investigated and in view of the fact that it was not specifically raised in the pleadings and there is not much indication in the judgment of showing that it was canvassed there we think that while we shall make an order for remand to the lower appellate Court for proper investigation of that question and for a clear finding on it we shall give the parties an opportunity to adduce such further materials as they may desire to do in connexion with this question. All other questions that arose in the suit have now been concluded and the question referred to above is f only question that will be left open for consideration by the learned Subordinate Judge. On arriving at his finding on that question he will proceed to dispose of the appeal in accordance with law. ", "10. Costs of this appeal will abide the result."], "relevant_candidates": ["0000380642", "0005565313"]} {"id": "0000345078", "text": ["PETITIONER: & Vs. RESPONDENT: COMMISSIONER OF INCOME TAX, BOMBAY DATE OF JUDGMENT12/03/1986 BENCH: , (J) BENCH: , (J) SINGH, K.N. (J) CITATION: 1986 AIR 1857 1986 SCR (1) 627 1986 SCC Supl. 279 JT 1986 642 1986 SCALE (1)555 ACT: Jurisdiction to reopen assessment by the Income Tax Officer, when arises - Reopening assessment on the ground that the assessee had obtained depreciation at 6 per cent on the assets as masonry works, but the assets consisted of earth work wholly or substantially - Whether escaped assessment Duty of the assessee to disclose primary facts and truly Income Tax Act , 1961, section 147 (a). HEADNOTE: A partnership firm business carried on by M/s. was taken over by the appellant-assessee by an agreement dated 24.8.1949. During the assessment year 1950-51, the said Agreement as well as the Valuation Report of the assets had been filed before the assessing authority. The Income Tax Officer did not discuss the point whether the assets were constructed of masonry or made of earth but on the assessee's letter conveying its agreement that for the purpose of depreciation the value should be taken as Rs.20,31,000 in the aggregate, in the assessment order allowed 6 per cent depreciation. Later it was found that 93% of the construction works were made of earth and only 7% of masonry and that 59% of piers were made of masonry and 41% of them were made of earth were allowed 12% depreciation which rate is available only if constructed entirely or mainly of wood. The Income Tax Officer, on these facts proposed to reopen the assessment on escaped income for the years 1955-56 to 1962-63. The jurisdiction of the Income Tax Officer to reopen the assessment under section 147(a) of the Income Tax Act, 1961 and declining to call for a statement of case on a question of law by rejecting the application under section 256(2) of the Act are under challenge in the appeals on certificate granted by . Dismissing the appeals, the , 628 ^ HELD: 1.1 If there are some primary facts from which reasonable belief could be formed that there was some non- disclosure or failure to disclose fully and truly all material facts, the Income Tax Officer has jurisdiction to reopen the assessment. Assessee knows all the material and relevant facts - the assessing authority might not. In respect of the failure to disclose, the omission to disclose may be deliberate or inadvertent. That was immaterial. But if there is omission to disclose material facts, then, subject to the other conditions, jurisdiction to reopen is attracted. [632 D-F] 1.2 The obligation of the assessee is to disclose only primary facts and not inferential facts. What facts are material facts would depend upon the facts and circumstances of each case. Further, whether there has been such non- disclosure of primary facts which has caused escapement of income in the assessment was basically a question of fact. In this case, what portion of the asset consisted of earth and what portion or proportion consisted of masonry work was indubitably a material fact for the purpose of calculating the depreciation. If over depreciation has been allowed on the basis that the entire work consisted of masonry work, income might have been under-assessed. The Income Tax Officer can reasonably be said to have material to form that belief. [631 E-F] 1.3 Mere production of evidence before the Income Tax Officer and leaving him to find out the position by further probing is not enough. The assessee must make full disclosure truly. There may be omission or failure to make a true and full disclosure, but if some material for the assessment lay embedded in the evidence which the revenue could have uncovered but did not, then, it is the duty of the assessee to bring it to the notice of the assessing authority. [632 , 41 I.T.R. 191; , 110 I.T.R. 630; , 103 I.T.R. 437; and , 78 I.T.R. 466 applied. 629 JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 800- 807 (NT) of 1974. ", "From the Judgment and Order dated 21st June, 1973 of in Income Tax Application No.6 of 1972. ", ", and for the Appellant. ", ", and Ms. for the Respondent. ", "The Judgment of the Court was delivered by , J. These appeals are by certificate from the decision of dated 21st June, 1973 whereby had declined the application made under section 256 (2) of the Income Tax Act , 1961 (hereinafter called 'the Act') wherein the assessee sought two questions to be referred to . The questions were: ", "(1) Whether, on the facts and in the circumstances of the case, the re-assessment proceedings under section 147 (a) of the Income-tax Act , 1961, initiated by the Income-tax Officer for the assessment years 1955-56 to 1962-63 against the assessee were valid in law ? ", "(2) Whether, on the facts and in the circumstances of the case, the was justified in up- holding the action under section 147(a) of the Income Tax Act, 1961 for the assessment years 1955-56 to 1962-63 ? ", "The real question, therefore, is whether there were facts from which it could be believed that there was failure or omission to disclose fully and truly all material facts necessary for the assessment as a result of which income has escaped assessment. The assessment was sought to be re-opened for the years 1955-56 to 1962-63 (for failure to disclose fully and truly all material facts). It is well- settled that the obligation of the assessee is to disclose only primary facts and not inferential facts - , 41 I.T.R. 191. There must be, therefore, (a) full disclosure, and (b) true disclosure of all material facts. What facts are material for a particular case would depend upon the facts and circumstances of each case, (c) there must be escapement of tax or under assessment due to such failure or omission. ", "In this case the reason for the belief of the Income Tax Officer was that the assessee had obtained depreciation at 6 per cent on the assets which were masonry works but the assets really consisted of earth work wholly or substantially. If that was the position then the assessee was not entitled to depreciation as was granted. The question, is, whether the assessee had disclosed the nature of the masonry work and whether the nature of the asset had been fully and truly disclosed. ", "The assessee's case was that a partnership business carried on by was taken over by the assessee by an agreement dated 24th August, 1949 and during the assessment year 1950-51 the said agreement dated 24th August, 1949 as well as the Valuation Report had been filed before the assessing authority. It is, further, the case of assessee that there was discussion on this Valuation Report. It further appears from the assessment Order and the affidavit that the Valuation Report was discussed and the amount of depreciation was more or less agreed to between the parties. The revenue's case, on the other hand, is that which portion of the assets consisting of masonry work and which of earth work was not discussed or disclosed. The assessee's contention before the revenue authorities was that the primary facts were discussed fully and it was open to the revenue to examine into this aspect greater and it was not possible after the lapse of such a long time to say actually whether what portion of asset consisted of earth work has been disclosed or not. It appears, however, from the order of the that by its last letter addressed to the Income Tax Officer the assessee had conveyed its agreement that for the purpose of depreciation the value should be taken as Rs.20,31,000 in the aggregate, in the assessment. The has, further, found that in granting the depreciation the I.T.O. did not discuss the point whether the assets were constructed of masonry or made of earth and the I.T.O. did not exclude for depreciation the value of reservoirs, salt pans and piers and condensers and channels made of earth but allowed the depreciation claim of the assessee on the entire value of the reservoirs, salt pans and piers and condensers and channels at 6% even though these were only partly constructed of masonry and partly made of earth. The has noticed that 93% of the construction works were made of earth and only 7% of masonry, and the facts that 41% of the piers were made of earth and only 59% of masonry was not challenged before the and were not in dispute before the . There is also no dispute that depreciation at 6% is available only in respect of such assets constructed of masonry and not if made of earth. It was also not in dispute that depreciation on piers is available at 12% only if constructed entirely or mainly of wood. The fact that for the assessment years 1955-56 to 1962-63 excessive depreciation allowance had been allowed in the original assessments and income chargeable to tax had escaped assessment and/or was under-assessed for these years was also not in dispute. ", "The only question, therefore, is, whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and future whether such income escaped assessment and whether such escapement or under-assessment has been caused as a result of the failure or omission on the part of the assessee to disclose fully and truly all material facts. What facts are material facts would depend upon the facts and circumstances of a particulate case. This follows from the scheme of the section and is well-settled by the authorities of this Court. ", "It is the admitted position that the assessee had not disclosed either by valuation report or by statement before the I.T.O. as to what portion consisted of earth work and what portion or proportion consisted of masonry work. For the purpose of calculating depreciation that indubitably was a material fact. If over depreciation has been allowed on that basis i.e. that the entirety of the work consisted of masonry work, income might have been under-assessed. The Income tax Officer can reasonably be said to have material to form that belief. That position is also well-settled by the scheme of the section, and concluded by the authorities of this Court. ", "The assessee's contention is that the I.T.O. could have found out the position by further probing. That, however, does not exonerate the assessee to make full disclosure truly. The explanation 2 to section 147 of the Act makes the position abundantly clear. The principles have also been well-settled and reiterated in numerous decisions of this Court. See . , 110 I.T.R. 630 and Income-Tax Officer I Ward, Distt. , 103 I.T.R. 437. , J. as the learned Chief Justice then was, observed in case (supra) that mere production of evidence before the Income- tax Officer was not enough, that there may be omission or failure to make a true and full disclosure, if some material for the assessment lay embedded in the evidence which the revenue could have uncovered but did not, then, it is the duty of the assessee to bring it to the notice of the assessing authority. Assessee knows all the material and relevant facts - the assessing authority might not. In respect of the failure to disclose, the omission to disclose may be deliberate or inadvertent. That was immaterial. But if there is omission to disclose material facts, then, subject to the other conditions, jurisdiction to re-open is attracted. It is sufficient to refer to the decision of this Court in case (supra) where it had been held that if there are some primary facts from which reasonable belief could be formed that there was some non- disclosure or failure to disclose fully and truly all material facts, the I.T.O. has jurisdiction to reopen the assessment. This position was again reiterated by this Court in , 78 I.T.R. 466. ", "Further more bearing these principles in mind in this particular case whether there has been such non-disclosure of primary facts which has caused escapement of income in the assessment was basically a question of fact. ", " was right in declining to call for a statement of case on a question of law. The appeals, therefore, fail. However, there will be no order as to costs. ", "S.R. Appeals dismissed."], "relevant_candidates": ["0000086256", "0000380958", "0001104260", "0001300646", "0001567881"]} {"id": "0000353077", "text": ["JUDGMENT P. C. Banerji, J. ", "1. The question in this case is whether the application of plaintiff decree-holder for a final decree for sale under Order XXXIV, Rule 5, of the Code of Civil Procedure is or is not barred by limitation. The preliminary decree for sale was passed by the of first instance on the 16th of May 1911. The mortgagors were allowed six months from that date to pay the mortgage amount, so that the date fixed for payment was the 15th of November 1911. The plaintiff, whose claim had only been partially decreed by the of first instance, preferred an appeal to the lower , but that appeal was dismissed on the 3rd of November 1911. He appealed to and this affirmed the decree of the lower on the 3rd of July 1912 The present application was filed on the 22nd of June 1915. Among the pleas raised on behalf of the defendants was the plea of limitation and it was contended that the application had been filed beyond time. If limitation is to be computed from the date of 's decree of the 3rd of July 1912, the application is certainly within time. If, however, limitation is to be reckoned from the 16th of November 1911, when the date fixed for payment by the of first instance expired, the application would be beyond time. It is not disputed by either party that the Article in Schedule I of the Limitation Act applicable to the present application is Article 181. The present application being an application in the suit for a final decree, it is not an application for execution, and, therefore, the Article applicable to an application for execution of decree does not govern it. We have, therefore, to consider whether the right of the plaintiff to apply for a final decree accrued when the decree of was passed or on the expiry of the six months allowed for payment by the of first instance. Order XXXIV Rule 5, provides that where payment is not made as directed by the preliminary decree for sale, \"the shall, on application made in that behalf by the plaintiff, pass a decree that the mortgaged property or a sufficient part thereof, be sold, and that the proceeds of the sale be dealt with as is mentioned in Rule 4.\" It seems to me that this rule contemplates the passing of only one final decree in a suit for sale upon a mortgage. The essential condition to the making of a final decree is the existence of a preliminary decree which has become conclusive between the parties. When an appeal has been preferred, it is the decree of the which is the final decree in the cause. This is beyond controversy, having regard to the decisions of this in v. 4 A. 376: A. W. N, (1882) 68: 2 Ind. Dec. (N. S.) 990. and 11 A 267: A. W. N. (1889) 55: 13 Ind. Jur. 427: 6 Ind. Dec. (N. S.) 598. The view taken in those cases was affirmed by their Lordships of in 23 Ind. Cas. 649: 36 A, 350: 18 C. W. 963: 27 M. L. J. 17: 16 Bom. L. R. 395: 19 C. L. J. 626: 12 A. L. J. 624: 16 M. L. T. 44: (1914) M. W. N. 485: I L. W. 483 (P. C.) As has been already stated, if an appeal is preferred and the case is decided by the , the decree of the takes the place of the decrees of the Subordinate s where it affirms the decrees of those s and the decrees of the Subordinate s are merged in the decree of the final of Appeal. Therefore, where a preliminary decree for sale is appealed to , it is the decree of which must be deemed to be the preliminary decree that may be made final under Order XXXIV, Rule 5. In the present case the decree of , no doubt, affirmed the decree of the lower s: but whether the decree of tin's is a decree of affirmance, or modification of the decrees of the s below, it is the final decree in the cause. It is this decree which in a suit for sale the plaintiff can seek to be made absolute and final. In the present case the plaintiff's application was to the effect that the decree of this should be made final. He applied for interest for the period subsequent to the decree of the first and subsequent costs which could be added to the amount of the mortgage under Rule 10. These he could not have claimed before the decree of was passed. To the case of 30 Ind. Cas. 494: 38 A. 21: 13 A. L. J. 985., to which I was a party, it was no doubt held that the right of the decree-holder to apply for a final decree accrued upon the expiry of the term fixed for payment. I must confess that the considerations to which I have referred were overlooked in that case. Upon further consideration, I think the view taken in that case was not correct. It is impossible to hold that there can be more final decrees than one in a suit for sale upon a mortgage Unless it be held that the right to apply for a final decree accrues when the decree of the is passed, in a case in which an appeal has been preferred to the final of Appeal, it may be open to a party to apply for several final decrees in the same cause. That surely was not contemlated by the . In this view the appeal must prevail. I would allow it, set aside the orders of the s below and remand the case to the of first instance for disposal of the application of the plaintiff according to law. ", "Tudball, J. ", "2. I fully agree and there is very little that I can with advantage add to the judgment which has just been delivered. When the passed the decree it was open to the plaintiff, or the defendant, to accept that decree or to appeal. If an appeal is preferred the final decree is the decree of of final decision. When that decree is passed, it is that decree and only that which can be made final in the cause between the parties. ", ", ", "3. I conour. ", "4. By the .---The order of the is that the appeal is allowed, the orders and decrees of the s below are set aside, and the case is remanded to the of first instance with directions to readmit it under its original number in the register and to dispose of it according to law. Costs here and hitherto will be costs in the cause."], "relevant_candidates": ["0001250363", "0001313981", "0001841230"]} {"id": "0000355919", "text": ["PETITIONER: & ORS. Vs. RESPONDENT: THE PUNA MUNICIPAL CORPN. & ANR. DATE OF JUDGMENT23/01/1995 BENCH: (K.RAMASWAMY & N. VENKATACHALA) ACT: HEADNOTE: JUDGMENT: ", "ORDER ", "1. This appeal by special leave arises from the order of the Single Judge of in Special Civil Application No.2521 of 1978, dated December 20, 1978 wherein the learned Single Judge set aside the order of the Joint Judge, , dated 29.8.1973 made in Misc. Appeal No.92 of 1973. The facts necessary for disposal of this appeal lie in a short compass. ", "2. The Poona Municipality has undertaken widening of the road to remove traffic congestion and initiated proceedings under s.4(1) of the Land Acquisition Act , 1894 for acquiring two storied building belonging to at Kotwal Chowk. The Notification under s.4(1) was published in the Gazette in December 1966. The Land Acquisition Officer passed his award on December 14, 1970. Thereafter the compensation was deposited and paid to the owner. Pursuant thereto possession was taken on March 13, 1971 by the competent officer and handed over to the corporation. However, the earlier 24 appellants/tenants who entered into leave and licence agreements with the were allowed to get into possession. After the expiry of the period of leave and licence, proceedings were initiated for eviction of the appellants and an order in that behalf came to be passed. Calling in question that order of eviction, they went in appeal and writ petition but were unsuccessful. Ultimately, this Court affirmed the order of eviction of the appellants. Subsequently, they filed Civil Suit No.590/73 in the Court of the Joint Civil Judge, Poona and sought perpetual injunction from dispossession and for ad interim injunction. The Civil Judge by his order dated 27.4.1973 refused to grant ad interim injunction. The Joint Judge, as stated earlier, on appeal under s.43(r) C.P.C. allowed the appeal and granted ad interim injunction pending disposal of the suit. in the Special Civil Application under Art.227 of the Constitution, by its impugned order dated 20.12.1978 set aside the appellate order and confirmed that of the Civil Judge. Thus this appeal, by special leave. ", "3. , the learned Senior counsel for the appellants contended that under s. 115 , has power of revision where the appeal is not provided for either to it or subordinate court. Since the Joint Judge had exercised the appellate power, by operation of s. 1 15(2) , the was devoid of jurisdiction to exercise the revisional power. When statutory prohibition was im- posed by which is more expeditious and efficacious remedy, the exercise of' jurisdiction by the under Art.226 was not warranted. At this juncture it is necessary to point out that the exercised its power under Art.227 and not either under Art.226 or under s. 115 . Even otherwise the bar under s. 115(2) is to exercise revisional power where the party is provided with right of appeal to the or against the impugned order. It is not a bar to exercise revisional power under s. 115(1) 507 against appellate order. The ratio in , 1987 (1) SCR 485, is that no second revision under s. 1 15(1) would lie against revisional order of . ", "4. He further contended that the exercise of power under Art.226 is only discretionary; the appellate Judge has gone into the questions of fact and law; the exercise of power under Art.226 is not an appellate power but only one of correcting errors of jurisdiction. Appellate Judge ex- haustively dealt with all the points raised by the appellants, it is one of taking an alternative view by to the one taken by the appellate Judge. in that situation was not justified in interfering with the order of the appellate Judge, in particular, when scope of the revisional power tinder s. 1 15 CPC itself is very rigid. Even in equity the appellants are entitled to remain in possession since they have been continuing under the respondents since 1971 uninterruptedly and they should be allowed to continue till the disposal of the suit by giving suitable directions for expeditious trial. He also contended that in view of the resolutions passed by on November 11, 1972 and November 29, 1972, suitable direction may be given to the Municipality to reconsider the matter whether the building is still needed for widening the road and based thereon, they could take appropriate steps or to provide alternative shops. ", "5. , the learned Senior counsel appearing for the respondents, on the other hand contended that the need for widening the road still subsists and that the having taken possession of the building and the order of eviction passed against the appellant having been allowed to become final by disposing the S.L.P. by this Court, the appellate Judge had committed palpable error of law in interfering with the order. He also contended that the Civil Suit itself is not maintainable as being barred by the provisions in the Act and C.P.C. ", "6. Having heard the learned counsel for the parties, the question arises whether the appellant had shown that there was a prima facie case, triable issue and balance of convenience for granting ad interim injunction pending the suit. It is an admitted position that after the award was made by the Collector, possession was taken. Thereafter, the appellants entered into leave and licence with the . On expiry thereof, the had initiated proceedings for ejectment of the appellants and the order of ejectment had become final when the SLP was dismissed by this court. Thereafter, the appellants had no legal right to remain in possession of the shops. The question then is, whether an injunction could be granted in favour of the persons who remain in possession of the property. After the order of ejectment had become final, their continuance will be only unlawful possession and that therefore strong prima facie case need to be made out. Further question is, whether an injunction could be granted against the rightful owner in favour of the persons Who remain in unlawful possession. The appellate Court has not gone into the pertinent aspects of the matter. The founda- tion for action is based on the subsequent reservation of the . ", "0 ", "7. , (1993)3 SCC 161, a Bench of three Judges of this Court held that \"a party is not entitled to an order of injunction as a matter of course. Grant of injunction is within the discretion of the court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status quo. The court grants such relief according to the legal principles - ex debito justifiae. Before any such order is passed the court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him. Further the court should be always willing to extend its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law or ,without following the procedure which are fundamental and vital in nature. But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the court. ", "8. , (1992)1 SCC 719, a Bench of two Judges (in which , J. was a Member) of this Court held that the phrases \"prima facie case\", \"balance of convenience\" and \"irreparable loss\" arc not rhetoric phrases for incantation but words of width and elasticity, intended to meet myriad situations presented by men's ingenuity in given facts and circumstances and should always be hedged with sound exercise of judicial discretion to meet the ends of justice. The court would be circumspect before granting the injunction and look to the conduct of the party, the probable injury to either party and whether the plaintiff could be adequately compensated if injunction is refused. The existence of prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction. Prima facie case is not to be confused with prima facie title which has to be established on evidence at the trial. Only prima facie case is a substantial question raised, bona fide, which needs investigation and a decision on merits. Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The court further has to satisfy that noninterference by the court would result in \"irreparable injury \" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The balance of convenience must be in favour of granting injunction. The court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the court considers that pending the suit, the subject matter should be maintained in status quo, an in- ", "509 ", "junction would be issued. The court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit.\" ", "9.It is settled law that no injunction could be granted against the true owner at the instance of persons in unlawful possession.It is true that the appellants placed reliance in their plaint on resolutions passed by the . on 11.11. 72 and 29.11.72. A reading of those resolutions would prima facie show that possession would be taken where the acquisition proceedings have become final and land acquisition proceedings would not be pursued where award has not been made as on the date of the resolutions. In this case, since the acquisition proceedings have become final, then necessarily possession has to be taken by the for the public purpose for which the acquisition was made. In that context the question arises whether the appellants can seek reliance on two resolutions. They furnish no prima facie right or title to the appellants to have perpetual injunction restraining the from taking possession of the building. The orders of eviction were passed by due process of law and had become final. Thereafter no right was created in favour of the appellants to remain in possession. Their possession is unlawful and that therefore, they cannot seek any injunction against the rightful owner for evicting them. There is thus neither balance of convenience nor irreparable injury would be caused to the appellants. ", "10. In 's \"Law Relating to Injunctions, Second revised and enlarged edition, 1992, at page 56 in para 30.01, it is stated that \"an injunction will only be granted to prevent the breach of an obligation (that is a duty enforceable by, law)existing in favour of the applicant who must have a personal interest in the matter. In the first place, therefore, an interference by injunction is founded on the existence of a legal right, an applicant must be able to show a fair prima facie case in support of the title which he asserts\". At page 80 in para 33.02, it is further stated that \"if the court be of opinion that looking to these principles the case is not one for which an injunction is a fitting remedy, it has a discretion to grant damages in lieu of an injunction. The grounds upon which this discretion to grant damages in lieu 'of an injunction should be exercised, have been subject of discussion in several reported Indian cases\". At page 83, it is stated that \"the court has jurisdiction to grant an injunction in those cases.where pecuniary compensation would not afford adequate relief, The expression \"adequate relief\" is not defined, but it is probably used to mean - such a compensation as would, though not in specie, in effect place the plaintiffs in the same position in which they stood before. The determination of the question whether relief by injunction or by damages shall be granted depends upon the circumstances of each case. ", "11.In \"Law of Injunctions\" by , at page 64, it is stated that \"an application for temporary injunction is in the nature of a quia timet action. Plaintiff must, therefore, prove that there is an imminent danger of a substantial kind or that the apprehended injury, if it does come, will be irreparable. The word \"imminent\" is used in the sense that the circumstances are such that the remedy sought is not premature. The degree of probability of fu- ture injury is not an absolute standard: what is aimed at is justice between. the parties, having regard to all the relevant circumstances\". At page 116, it is also stated that \"in a suit for a perpetual or mandatory injunction, in addition to, or in substitution for, the plaintiff can claim damages. The court will award such damages if it thinks fit to do so. But no relief for dam- ages will be granted, if the plaintiff has not claimed such relief in the suit\". ", "12. In \"Modem Law Review\", Vol 44, 1981 Edition, at page 214, stated that \"a plaintiff may still be de- prived of an injunction in such a case on general equitable principles under which factors such as the public interest may, in an appropriate case, be relevant. It is of interest to note, in this connection, that it has not always been regarded as altogether beyond doubt whether a plaintiff who does thus fail to substantiate a claim for equitable relief could be awarded damages\". in \"The Law Quarterly Review\" Vol 109, at page 432 (at p.446), under Title \"Mareva Injunctions and Security for Judgment in a Framework of Interlocutory Remedies\" stated that \"if the plaintiff is likely to suffer irreparable or uncompensable damage, no interlocutory injunction will be granted, then, provided that the plaintiff would be able to compensate the defendant for any unwarranted restraint on the defendant's right pending trial, the balance would tilt in favour of restraining the defendant pending trial. Where both sides are exposed to irreparable injury pending trial, the courts have to strike a just balance\". At page 447, it is stated that the court considering an application for an interlocutory injunction has four factors to consider: first, whether the plaintiff would suffer irreparable harm if the injunction is denied; secondly, whether this harm outweighs any irreparable harm that the defendant would suffer from an injunction; thirdly, the parties' relative prospects of success on the merits; fourthly, any public interest involved in the decision. The central objective of interlocutory injunctions should therefore be seen as reducing the risk that rights will be irreparably harmed during the inevitable delay of litigation\". ", "13. In \"Injunctions\" by , , at page 22, it is stated -that \"if the plaintiff obtains an interlocutory injuntion, but subsequently the case goes to trial and he fails to obtain a perpetual order, the defendant will meanwhile have been restrained unjustly and will be entitled to damages for any loss he has sustained. The practice has therefore grown up, in almost every case where an interlocutory injunction is to be granted, of requiring the plaintiff to undertake to pay any damages subsequently found due to the defendant as compensation if the injunction cannot be justified at trial. The undertaking may be required of the plaintiff in appropriate cases in that behalf\". In \"Joyce on Injunctions Vol. 1 in paragraph 177 at page 293, it is stated \"Upon a final judgment dissolving an injunction, a right of action upon the injunction bond immediately follows, unless the judgment is superseded. A right to damages on dissolution of the injunction would arise at the determination of the suit at law\". ", "14. It would thus be clear that in a suit for perpetual injunction, the court would enquire on affidavit evidence and other material placed before the court to find strong prima facie case and balance of convenience in favour of granting injunction otherwise irreparable damage or damage would ensue to the plaintiff The Court should also find whether the plaintiff would adequately be compensated by damages if injunction is not granted. It is common experience that injunction normally is asked for and granted to prevent the public authorities or the respondents to proceed with execution of or implementing scheme of public utility or granted contracts for execution thereof Public interest is, therefore, one of the material and relevant considerations in either exercising or refusing to grant ad interim injunction. While exercising the power of discretion, the court should also adopt the procedure of calling upon the plaintiff to file a bond to the satisfaction of the court that in the event of his failing in the suit to obtain the relief asked for in the plaint, he would adequately compensate the defendant for the loss en- sued due to the order of injunction granted in favour of the plaintiff. Even otherwise the court while exercising its equity jurisdiction in granting injunction as also juris- diction and power to grant adequate compensation to mitigate the damages caused to the defendant by grant of injunction restraining to proceed with the execution of the work etc. which is retrained by an order of injunction made by the court. The pecuniary award of damages is consequential to the adjudication of the dispute and the result therein is incidental to the determination of the case by the court. The pecuniary jurisdiction of the court of first instance should not impede nor a bar to award damages beyond its pecuniary jurisdiction. In this behalf, the grant or re- fusal of damages is not founded upon the original cause of action but the consequences of the adjudication by the con- duct of the parties, the court gets inherent jurisdiction in doing ex debito justifiae mitigating the damage suffered by the defendant by the act of the court in granting injunction restraining the defendant from proceeding with the action complained of in the suit. It is common knowledge that injunction is invariable sought for in laying the suit in a court of lowest pecuniary jurisdiction even when the claims are much larger than the pecuniary jurisdiction of the court of first instance, may be, for diverse reasons, Therefore, the pecuniary jurisdiction is not and should not stand -an impediment for the court of first instance in determining damages as the part of the adjudication and pass a decree in that behalf without relegating the parties to a further suit for damages. This procedure would act as a check on abuse of the process of the court and adequately compensate the damages or injury suffered by the defendant by act of court at the behest of the plaintiff. ", "15. Public purpose of removing traffic congestion was sought to be served by acquiring the building for widening the road. By orders of injunction, for 24 years the public purpose, was delayed. As a consequence execution of the project has been delayed and the costs now stand mounted. The courts in the cases where injunction arc to be granted should necessarily consider the effect on public purpose thereof and also suitably mould the relief In the event the plaintiffs losing ultimately the suit, they should necessarily bear the consequences. namely, escalation of the cost or the damages the suffered on account of injunction issued by the courts. Appellate court had not adverted to any of the material aspects of the matter. Therefore, has rightly, though for different reasons, dissolved the order of ad interim injunction. Under these circumstances, in the event of the suit to be dismissed while disposing of the suit the trialcourt is directed to assess the damages and pass a decree for recovering the same at pro rata against the appellants. ", "16. The appeal is accordingly dismissed with costs."], "relevant_candidates": ["0000049480", "0000052016", "0000863497"]} {"id": "0000363381", "text": [", J. ", "1. By this order I shall dispose of two petitions under Article 226 of the Constitution of India, viz., Writ Petitions Nos. 746 and 889 of 1972, in each of which there is a single petitioner who challenges the acquisition of his land situated in Coimbatore town. The acquisition proceedings were initiated by a notification, dated the 15th of April, 1970 issued under Sub-section (1) of Section 4 of the Land Acquisition Act (herein after referred to as the Act). Notices of the proposed acquisition were published in conformity with Rule (1) of the rules framed by under Section 55(1) of the Act, but no notice thereof was served individually on either of the petitioners and it is contended on their behalf that the acquisition proceedings are void for want of such notices which it was incumbent on the Collector to serve as per instruction (1) contained in paragraph 9 of Standing Order 90 issued by . That instruction states: ", "(1) Besides publishing the notice as prescribed in Rule 1 of the Appendix I, the Collector should see that individual notices are served as far as possible on every person known or believed to be interested in the land and to be acquired in the manner prescribed by Sub-sections (3) and (4) of Section 9 of the Land Acquisition Act (I of 1894). In cases in which it has been impossible at the time of the issue of the notification under Section 4(1) so to describe all or any of the lands to be acquired that the persons interested therein can understand that their lands are likely to be needed for the public purpose, the individual notice should be issued as soon as the necessary details are available allowing 15 days thereafter for the presentation of objections to the acquisition. ", "This instruction was considered in , by , J., who laid down the following two propositions in regard to it: ", "(1) The instruction has statutory force and is not merely an executive instruction in the sense that it emanates from a superior to a subordinate official. ", "(2) Even if it is regarded as an executive instruction it is based on the principle of natural justice that nobody shall be condemned and for that reason also it is binding on the acquisition authorities. ", "2. Attention of , J., was drawn to v. State of Madras W.P. No. 1734 of 1964, decided by , J., and v. State of Madras W.P. No. 1846 of 1965, decided by , J. (as his Lordship then was), in both of which it was held that the Act did not prescribe as an obligatory direction that notice be given for an enquiry under Section 5-A thereof to particular persons individually. Each one of these cases was distinguished by , J., on the ground that the instruction above extracted was not brought to the notice of the learned Judge who decided the same. As it is, learned Counsel for and the Special Tahsildar for Land Acquisition, Coimbatore who are the two respondents before me, has contended that case 2, was not correctly decided and that the instruction above extracted is neither statutory in character nor liable to be enforced in writ proceedings on the basis of principles of natural justice. Reliance for this contention is placed on a Bench decision of this Court in , which repeats the dictum given by , J., and , J., in the cases above cited, although no reference therein also is made to the said instruction. ", "3. After hearing learned Counsel for the parties at some length I have begun to entertain doubts (and I say so with the utmost respect to , J.) about the correctness of the decision in case (1972) 1 M.L.J. 92 : 85 L.W. 894, although 1 have not formed any definite opinion in that behalf. The points raised are not free from difficulty and are of great general importance. I consider the cases before me, therefore, to be fit ones for decision by a larger Bench and direct that their records be laid before my lord the Chief Justice with a request that such a Bench may be constituted. ", ", for and , for Petitioner in Writ Petition No. 746 of 1972. ", ", and , for Petitioner in Writ Petition No. 889 of 1972. ", ", for Government Pleader on behalf of the Respondents in both the writ petitions on 23 rd November, 1976 and of the Government Pleader on behalf of the Respondents in both the writ petition on 24th November, 1976. ", "The Order of the Court was pronounced by , J. ", "4. These two writ petitions come before us on a reference by , J. Each is filed by a different individual. But both raise a common question of law under the Land Acquisition Act , 1894. ", "5. The writ petitioners are owners of fractional interests in two pieces of land in Coimbatore Town. Those lands were notified by for compulsory acquisition for a public purpose. The notification was published in the official gazette. Public notices of the gazette notification would appear to have been displayed in the locality. But individual notices were not given to the petitioners. The question raised before , J., was whether for want of individual notices on the petitioners, as persons interested in the lands, the subsequent proceedings would be rendered invalid. The learned Judge was referred to a decision in , in which , J., held that individual notices were indispensable under the law and in the absence of such individual notices the persons aggrieved were entitled to move this Court under Article 226 of the Constitution for setting aside all proceedings subsequent to the 's notification in the . But a contrary view was found expressed in two earlier unreported decisions rendered by learned single Judges of this Court. According to this earlier view, the omission to send individual notices of acquisition to each and every one of the persons interested in the lands was of no consequence to the validity of the acquisition. With these citations before him and not wishing to hazard yet another single Judge opinion to the existing conflict of authority in this Court, , J., deemed it proper to refer these writ petitions to be heard and determined by a larger Bench. ", "6-7. The facts bearing on the question before us are not very much in dispute. is running an elementary school in Oppanakara Street in Coimbatore Town. The building in which the school is housed is its own. But the accommodation was found inadequate to its growing needs. The Municipality, accordingly resolved, to acquire portions of land which lay on either side of the existing premises for expansion of the school. The council then moved to acquire the said lands for the school, undertaking to meet the cost of acquisition from out of municipal funds. thereupon issued a notification in the under Section 4(1) of the Land Acquisition Act. The notification was published on 26th March, 1970. It set out the purpose of the acquisition, the particulars of the lands to be acquired and the names of the person interested in the lands. The Special Deputy (Land Acquisition) Town Planning, Coimbatore was named as the authority to discharge the functions of the Collector under the Land Acquisition Act in relation to this acquisition. Following the Notification, the Special caused public notices to be displayed in the village chavadi and the municipal office. The notification of acquisition was also broadcast in the locality by beat of tom-tom. The lands notified belonged to a number of persons as co-owners. In response to the public notices, a few of them came forward to file their objections before the Special , objecting to the acquisition of their lands for the school. The held an inquiry into the objections on 17th June, 1970, 4th July, 1970 and 14th July, 1970. At the conclusion of his inquiry he forwarded the proceedings along with his recommendations to the . On 28th April, 1971, the published a declaration in the declaring that the lands notified were required for the extension of the municipal school, The there upon took orders from the for acquisition and proceeded to conduct the inquiry into compensation to be awarded to the persons interested in the lands. At the conclusion of the inquiry, he announced his award of compensation on 8th March, 1972. He followed it up by sending notices of the award to such of those persons who were not present at the time he made the award. Among the absentees who received notices of the award were and , who are the two writ petitioners before us. ", "8. In the events that happened, as narrated above, the complaint of the petitioners before us is that proper notice of the acquisition had not been given to them by the . It is not the petitioners' case that no public notices were at all published by the following the 's notification in the . Nor do they contend that the manner of their publication fell short of the legal requirements. Their one and only grievance is that the did not give them any individual notices informing them about the 's preliminary notification for acquisition. Their complaint before us is that there by they had been deprived of the opportunity of objecting to the acquisition at the right moment and of availing themselves of the inquiry held by the . ", "9. In the counter-affidavits filed in this Court on behalf of and there is no denial of the allegation in the writ petition that the petitioners were not served with any individual notices of acquisition immediately following the preliminary notification by the in the . Nor do the records, which we had an opportunity to peruse at the hearing, show that any such notices were addressed by the to the writ petitioners or, for that matter, to any of the other persons interested in the lands in question. It may, therefore, be taken as a fact that apart from public notices, no individual notices were given to the petitioners informing them about the 's preliminary notification. Even so, the case of the respondents is that on that account the whole course of the subsequent proceedings for acquisition could not be held to be invalid. It was pointed out that the public notices, in response to which some of the persons interested had filed their objections, must be held to be adequate notice under the law to all the persons, concerned, including the petitioners. ", "10. The question for our consideration, then, is whether it is a necessary requirement of the law that owners of land should receive individual notices from the Land Acquisition Collector of the Government's intention to acquire the land for a public purpose, so as to enable them, if they so chose, to object to the acquisition. The further question is, whether the acquisition proceedings would be invalid if such individual notices were not given to the persons interested in the land. The answer to these questions must be found, first, in the provisions of the Land Acquisition Act , 1894. Section 4(1) of the Act, which is the pertinent provision in this regard, is in the following terms: ", "Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for a public purpose a notification to that effect shall be published in the Official Gazette, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the locality. ", "11. The section deals with the genesis of the proceedings for compulsory acquisition. The appropriate must first be satisfied that any land in a given locality is needed, actually or potentially, for a public purpose. If the is so satisfied, then a notification to that effect has to be published in the . The section does not require that even for the initial formation of its opinion that the land is needed for a public purpose, the should send notices to the owners of the land, convene them, and listen to their objections. The satisfaction of the both as to the needs of public purpose and as to the particular land that would satisfy those needs is purely a subjective satisfaction. The notification is to be issued solely on the basis of this subjective opinion of the . What should follow the gazette notification is also laid down in the section. It provides that the Collector should cause public notice of the gist of the 's notification in convenient places in the locality. The marginal note to the section sums up the procedure correctly when it refers to \"publication of preliminary notification.\" Public notice by the Collector is mandatory, as might be seen from the use of the word \"shall\" in the section. He would be failing in his duty if he did not cause public notice to be displayed in convenient places in the locality. Failure or omission to comply with this step in the procedure for acquisition would invalidate subsequent proceedings, and any person aggrieved would have a right to move the Court under Article 226 of the Constitution to have them quashed, vide observations of in , wherein this position is clearly laid down, although the person aggrieved in that case was not allowed to challenge the proceedings on this ground, on account of unreasonable delay. ", "12. In the present case, as we had earlier pointed out, the writ petitioners do not seek to challenge the acquisition proceedings on the score that no public notice was given as required by Section 4(1) , or even on the ground that the public notice as actually given by the Collector fell short of what is contemplated by the section. Their grievance is that the Collector did not personally inform them about the notification by issuing to them individual notices containing the gist of the 's decision to acquire the lands in question for a public purpose. This argument, manifestly, could not be founded on the words of Section 4(1) . This is because the section, while being positive about the Collector's duty to give public notice in that locality stops short with that provision. It does not impose on the Collector any other positive duty in regard to notice of the 's notification. Sub-section (2) of Section 4 deals with the next step in the procedure for compulsory acquisition, and it begins with these words, \"Thereupon, it shall be lawful for any officer, etc.\" These words are an indication that the issue of notification and publicising of the notification by display of public notices in the locality are both intended to exhaust the process of notice-giving at the preliminary stage. There are other indications, too, in Section 4(2) to the same effect. The sub-Section provides that on the publication of the 's preliminary notification in the and the Collector's public notices in the locality, the may authorise any of its officers to enter upon and purvey the lands in the locality and to do any acts necessary to ascertain whether the land notified for acquisition for the avowed public purpose is suitable for that purpose. The might, under this sub-section authorise its officers to enter any building or dwelling-house or any enclosed Court or garden attached thereto. But the proviso to Section 4(2) clearly enacts that this power of entry of residential buildings etc., cannot be exercised by the officers without previously giving the occupier of the premises at least seven days' notice in writing of his intention to do so. The reference to notice in this proviso is specific and detailed. It requires that the notice should be in writing, it should be addressed to the occupier, it should be served on him personally, and it should give him seven days' time. The proviso, no doubt, dispenses with notice as unnecessary wherever the occupier himself consents to the inspection of the premises. But, short of obtaining the occupier's consent, the power of entry can be exercised by the officers authorized in that behalf only after service of individual notices on the occupier. How the notice on the occupier is to be served is dealt with by Section 45(1) , which provides that in the case of a notice under Section 4 it shall be effected by \"the officer therein mentioned\" by delivering or tendering a copy thereof signed by him to the person intended to be served with the notice. Section 45(1) in terms, only refers to \" Section 4 \", but it is obvious that this reference cannot appertain to any notice under Sub-section (1) of that section; it can only refer to the notice of intention to enter the premises issued to the owner or occupier of a residential house by officers generally or specially authorized in that behalf by the , in connection with the proceedings contemplated by Section 4(2) and the proviso thereto. ", "13. On the terms of Section 4(1) , therefore, there can be no scope for assuming that the Collector's statutory obligation to publicise the 's preliminary notification for acquisition extends to the giving of individual notices to the persons interested in the lands notified for acquisition. ", "14. Mr., learned Counsel for the writ petitioners, however referred to Section 5-A of the Act as an aid to the understanding of the true scope and intendment of the statute regarding notice of the acquisition even at the preliminary stage. In this case, the procedure under Section 5-A had not been dispensed with by any direction made by the in exercise of its powers under Section 17(4) . Section 5-A would, accordingly have full force and effect. learned Counsel urged that under Section 5-A (1) any person interested in the land notified for compulsory acquisition was at liberty to object to the acquisition, and, when once he lodges his objections, the Collector would be under duty bound to give him an opportunity of being heard. learned Counsel proceeded to urge that the opportunity of being heard which Section 5-A conferred could only have meaning and reality if all the persons interested in the land were first made aware of the desire of the to acquire the lands. According to learned Counsel, it was implicit in Section 5-A that every one who had a stake in the land should be individually served with the notice of the acquisition. learned Counsel referred, in this connection, to an unreported judgment of , J., in v. The Land Acquisition Officer, Omalur, Salem District W.P.No. 1686 of 1971, dated 31st January, 1973. The facts of the case are not necessary to be noticed. The conclusion of the learned Judge was that individual notices to persons aggrieved must be given in every case. This position was derived by the learned Judge on his construction of Section 5-A . He observed: ", "The very intention of Section 5-A of the Act is to give all persons interested in the land, which is subject to the com pulsory process, to state their objections and after such objections are received, the Land Acquisition Officer is mandatorily obliged to give such an objector an opportunity of being heard either in person or by pleader. After giving such a full hearing, as contemplated under Section 5-A (2), the Land Acquisition Officer shall make his recommendations and submit the case for decision to the appropriate authority. ", "15. It seems to us that the learned Judge has read more into the section than its language can bear. Section 5-A has three sub-sections. Under Sub-section (1) any person interested in any land which has been notified under Section 4(1) is at liberty to object to the acquisition of the land within 30 days after the issue of notification. Sub-section (2) requires that objection shall be made to the Collector in writing. It further provides that after the receipt of written objection from any person interested the Collector shall give to him an opportunity of being heard either in person or by pleader. It is also provided in the same sub-section that the Collector shall himself hear the objections. Apart from hearing the objections, the Collector is also empowered to institute further inquiries. On the conclusion of the inquiry, the Collector is to make a report to the Government containing a record of the proceedings and also his recommendations on the objections. Any decision that the Government might take on the objections is declared by this sub-section to be final. Sub-section (3) of Section 5-A merely lays down the locus standi of the objectors by inserting a special definition of the expression \"person interested .\" . But this definition is more or less a repetition of the definition in the interpretation clause contained in of the Act. According to these provisions, a person shall be deemed to be interested in the land who would be entitled to claim an interest in compensation if the land were acquired under the Act. ", "16. The foregoing analysis of Section 5-A of the Act would show that the section deals not with the stage of notice of acquisition, but with a subsequent stage. We have earlier described Section 4(1) as marking the very beginning of the acquisition proceedings under the Land Acquisition Act . Section 5-A , no doubt, confers on the persons interested a right to object to the acquisition, but under Sub-section (1) this right has to be exercised by them within 30 days after the preliminary notification under Section 4(1) . The prescription of a time-limit in Section 5-A (1) and its computation as of a fixed period after the notification under Section 4(1) clearly show that the provision deals with a stage subsequent to the stage of notification of the acquisition. The right to object, under Section 5-A , begins to operate from the date of the notification. The person objecting may file his objection on the very next day after the publication or on any day falling within a period of 30 days. By that time, the Collector may or may not have given public notices in prominent places in the locality in accordance with Section 4(1) . Irrespective of the date of his public notice the Collector has to entertain the objections, provided they are filed within 30 days after the publication. This, again, shows that the right conferred by Section 5-A (1) has nothing whatever to do with the mechanics of notice which the statute contemplates for publicising the notification of the under Section 4(1) . We are satisfied that the right under Section 5-A (1), in content as well as in chronology, is a bare right to object to the acquisition. The section does not deal with any right, properly so-called, to notice of the acquisition itself. ", "17. Of what use, it was asked in argument, is a right to object, if the person concerned does not know, and has no means of knowing, that his land has been notified for acquisition? This, however, is mere rhetoric, of a kind that a law reformer may properly employ to some purpose on the floor of the or in his published writings. But for lawyers and whose task it is to interpret the legislative enactment, the answer must only be found in the words of the section or not at all. , J., had taken the view that it is implicit in Section 5-A that notices ought to go to all the individuals interested in the land. In our view, however, the language of Section 5-A , when read in juxtaposition to Section 4(1) , does not bear any such implication being read into it. ", "18. Mr. made a reference to the statement of Objects and Reasons set out in the Bill which introduced Section 5-A in the Act in the year 1923. According to this statement: ", "The object of the Bill is to provide that a local Government shall not declare under Section 6 of the Act that any land is needed for a public purpose unless time has been allowed after the notification under Section 4 for persons interested in the land to put in objection and for such objections to be considered by the local Government. ", "19. We do not find even in this statement of Objects and Reasons any indication of an intention to enlarge the scope of the notice. It may be observed that while Section 5-A was newly introduced by the Land Acquisition Amendment Act (XXXVIII of 1923), the provisions of Section 4(1) relating to notice were not subjected to any amendment whatever. Indeed, right from 1894, upto the present day Section 4(1) has remained the same, in this regard. in its 10th Report, dated 26th September, 1958, had suggested an amendment of Section 4(1) in the direction of liberalising the procedure for notice. Under proposals. ", "the Collector shall cause-- ", "(a) public notice of the substance of such notification to be given at convenient places in the locality in which the land is situated, and ", "(b) a copy of such notification to be served on the owner, and where the owner is not the occupier, also on the occupier, of the land. ", "20. These amendments, especially Clause (b), are yet to be written into the statute book. Till that time comes, we must construe and persist in construing Section 4(1) only on its present terms. We would not be justified in writing into the section what properly is the function of future legislation. The canons of statutory construction do not include anticipatory interpretation. ", "21. Reference was then made to Rule 1 of the Madras Land Acquisition Rules framed by the State Government in exercise of its rule-making power under Section 55(1) of the Act. The said Rule is in the following terms: ", "Rule 1: \"Immediately after the publication of the notification under Section 4(1) , the Collector shall issue a notice stating that the land is needed, or is likely to be needed, as the case may be, for a public purpose and requiring all persons interested in the land to lodge before the Collector within 30 days after the issue of the notification, a statement in writing of their objections if any, to the proposed acquisition. This notice should be published at convenient places in the said locality, and copies thereof fixed up in the office of the Collector, the Tahsildar, and in the nearest Police Station. ", "22. This Rule does not so much as whisper anything about individual notices to the persons interested in the land. All it does is to repeat the provisions of Section 4(1) and, by way of elucidation, make mention of the places where copies of the public notice should be exhibited. ", "23. It would appear that different States have different Rules on the subject of notice. , a Division Bench of had occasion to construe the relevant rule in force in the State of Maharashtra . In the course of their judgment, the learned Judges observed that \"Neither Section 4 nor Section 5-A , contains any provision for the service of individual notice on any person interested in the land sought to be acquired by a notification under Section 4 .\" They were, however, referred to Rule 1 framed by the Government of Maharashtra. It was to the following effect: ", "Whenever any notification under Section 4 has been published but the provisions of the section have not been applied and the Collector has under Section 4(1) issued notice to the parties interested, and on or before the last day fixed by the Collector in those notices in this behalf any objection is lodged under Section 5-A(2) : Firstly the Collector shall record the objection in his proceedings, secondly, the Collector shall consider whether the objection is admissible according to these rules. ", "24. Before the learned Judges, there was no dispute that this rule formed part of the statutory rules made by the State Government in exercise of its powers under Section 55(1) of the Act and hence it had the force of law. Proceeding to construe the rule, the learned Judges held that the words \"the Collector has, under Section 4(1) , issued notices to the parties interested\" clearly indicated that individual notice should be given to all the parties interested in the land. Since such notices were not given to the writ petitioners before them, the learned Judges quashed the proceedings. ", "25. Whether or not the conclusion of the learned Judges is justified on the construction of the words of Rule 1 of the Maharashtra Rules is not for us to say. So far as the relevant Rule in force in this State is concerned we have no doubt whatever that it does not envisage or contemplate, much less expressly provide, that individual notices shall be addressed to all the persons interested in the land, in addition to the publication of notices in prominent places in the locality. ", "26. learned Counsel referred us, in this connection, to a decision of in . in that case was concerned with the question of validity of Rule 3(b) of the Madras Land Acquisition Rules. This Rule provided that the Collector, while conducting an inquiry under Section 5-A (2) of the Act, must also issue notice of the hearing to the at whose instance the land was proposed to be acquired. In the case before the Collector did not give notice to the Education , which was the concerned interested in that acquisition. It was argued that Rule 3(b) was not mandatory, and, if it was, it would be against the provisions of Section 5-A (2) which invested the Collector with a complete discretion in the matter of conducting the inquiry, his only statutory obligation being that he should serve the notice of the inquiry on the persons who had lodged their objections. This argument was repelled by . The learned Judges held that the concerned Rule 3(b) was not only intra vires the Act, but also mandatory in character. ", "27. We do not see how this decision can be relied on as authority for the position that the persons interested in the land must be given individual notices of the intended acquisition. The provisions of Rule 3(b) and Section 5-A , with which was concerned, deal with a stage in the compulsory acquisition proceedings which, as we have shown earlier, is subsequent to the issue of the gazette notification by the under Section 4(1) . While Section 4(1) and Rule 1 are obviously intended to facilitate objections to be lodged by the persons interested in the subject-matter of the acquisition, neither Section 4(1) nor Rule 1 contemplates that the Collector should serve individual notices on the persons interested in the lands. Under the scheme of Section 5-A the question of sending individual notices to persons hardly arises until the proceedings reach a stage when objections are actually lodged with the Collector and an inquiry into these objections has to be gone into by him. Besides, even at the stage when the Collector has taken the objections on file, his obligation under Section 5-A (2) to send notices of inquiry does not extend to all persons interested in the land, but is limited only to those of them who had lodged their objections before the Collector within 30 days of the gazette notification. It follows, therefore, that for the purposes of seeing whether or not the initial notices of acquisition should be served individually on all the persons interested in the land, we would not have to be searching the provisions of Section 5-A or of the relevant rules bearing on Section 5-A , but have to look only to Section 4(1) and Rule 1 for the purpose. The decision of cited above is not addresed to any question touching the notice of acquisition, but is concerned rather with the subsequent notice of the inquiry which is taken up by the Collector after he receives the objections on file. ", "28. Mr. then pressed before us the contention that, notwithstanding the absence of any specific provision in the Act or in the Rules in force in this State for sending individual notices of acquisition to persons interested in the land at the stage of proceedings under Section 4(1) of the Act, such notices must be given even at that particular stage, since they are required to be given under executive instructions issued to the officers concerned by the State Government. He relied on a circular issued by the State Government in G.O. No. 196 Revenue, dated 6th February, 1926, set out at pages 84 and 85 of the Land Acquisition Manual (1961). Paragraph 1 of the circular states as under: ", "The statutory rules framed under the Act, require that immediately after the publication of the notification under Section 4(1) the Collector shall issue a notice calling on all persons interested in the land to prefer in writing their objections, if any, to the acquisition. The notice should be published at convenient places in the locality and copies thereof should be affixed to the notice boards in the offices of the Collector and and in the nearest Police Station\". ", "29. The above passage is more or less a repetition of Rule 1 of the Land Acquisition Rules. But the G.O. lays down the following further instructions: ", "The notice should also be served individually on every person known or believed to be interested in the land to be acquired in the manner prescribed by Sub-sections (3) and (4) of Section 9 . ", "30. It is this last passage on which Mr. places strong reliance. According to him, these instructions issued by the are binding on the Collector, and since they were not complied with in the present case, the acquisition proceedings must be held to be invalid. ", "31. learned Counsel supported the aforesaid contention on the basis of the decision of , J., in , to which we have made reference at the beginning of this judgment. In that case the Collector had already entered upon his inquiry under Section 5-A (2). The question before the learned Judge was whether the Collector was under a duty to issue a notice to a person interested in the land who had not lodged his objections under Section 5-A (1), but whose interest in the land had subsequently come to the knowledge of the Collector in the course of the inquiry under Section 5-A (2). It appears that in the notification under Section 4(1) the name of figured as the owner of a particular item of land which was included in the subject-matter of acquisition. Actually, however, this item of land had long ago been partitioned and been allotted to the share of 's sons, prior to the notification under Section 4(1) . ", "Accordingly, when notice of inquiry under Section 5-A (2) was served on him, appeared before the Collector and placed the Correct facts relating to present ownership of the land. The Collector omitted to act on that information and did not direct notices to be served on 's sons. He proceeded, instead to continue the inquiry under Section 5-A (2) in their absence. Subsequently, a draft declaration was made under Section 6(1) , and further proceedings were taken for inquiry into the compensation. At this stage, the sons of approached this Court and sought for a certiorari to quash all the proceedings taken by the Collector subsequent to the notification under Section 4(1) . Their contention was that the Collector was bound to serve individual notices on them of the inquiry under Section 5-A (2), giving them an opportunity to object to the acquisition, considering that he knew that they were the real owners of the land which had been notified by the for acquisition. Before , J., reliance for the petitioners was mainly placed on 's Standing Order No. 90, which, in turn was based on G.O. No. 196, Revenue, dated 6th February, 1926, issued by the State portions of which we have set out earlier in this judgment. The 's Standing Order is to be found at page 41 of the Land Acquisition Manual and it contains inter alia, the following instructions: ", "Besides publishing the notice as prescribed in Rule 1 of the Appendix, the Collector should see that the individual notices are served as far as possible on every person known or believed to be interested in the land to be acquired in the manner prescribed by Sub-sections (3) and (4) of Section 9 of the Land Acquisition Act, I of 1894\". ", "32. A foot-note to the Standing Order shows that the source of the 's instructions was to be found in G.O. No. 196, , dated 6th February, 1926. ", "33. In the course of his examination of the relevant provisions, , J., observed that neither the G.O. nor the 's Standing Order could be regarded as a statutory rule made under Section 55 of the Land Acquisition Act. The learned Judge noticed that for exercise by the of its rule-making power under Section 55 there were certain requirements to be fulfilled and formalities to be observed in order that the Rules may acquire \"the force of law\". Those are: (i) previous publication of Rules in draft form, and (ii) final publication of the Rules in the . The learned Judge recognised the legal position that a 's Standing Order or an executive direction by the cannot be equated to a statutory rule made by the under Section 55 . Nevertheless, the learned Judge took the view that the instructions contained in the G.O. and the 's Standing Order had \"statutory force\". According to the learned Judge, the instructions issued by the and and incorporated, in the Land Acquisition Manual could not be dismissed as those emanating from a superior official to a subordinate official. The learned Judge further observed that the instructions which related to the issue of individual notices to the persons interested in the land obviously satisfied the principles of natural justice. On these reasonings, the learned Judge held that any violation of the instructions contained in the 's Standing Orders would give rise to a cause of action to a person aggrieved and this Court would have jurisdiction to interfere under Article 226 of the Constitution. In this view of the matter, on the admitted fact that the petitioners were not given individual notices of the acquisition, the learned Judge quashed all the proceedings in that case subsequent to the notification under Section 4(1) of the Act. ", "34. With respect, we do not subscribe to the view of , J. The 's Standing Order No. 90, on which the learned Judge relied, forms part of the Land Acquisition Manual prepared by . The introduction to the Manual states that the scope of the Manual is to present in a form readily available for reference by the Officers responsible for land acquisition proceedings, information relating to general principles and details of the procedure to be followed at each stage of the proceedings. 's Standing Order Nos. 90 and 91 are set out in Part II of the Manual. 's Standing Order No. 90, with which we are concerned, relates to acquisition of land for public purposes. It is divided into many sections. Section 2 is entitled Preliminary Proceedings. Paragraph 9 in Section 2 contains the relevant instructions that \"besides publishing the notice as prescribed in Rule 1, the Collector should see that individual notices are served as far as possible on every person known or believed to be interested in the land to be acquired\". ", "35. Neither the 's Standing Order nor any other part of the Land Acquisition Manual indicates under what authority these instructions had been issued to the Collectors and other officers functioning under the Land Acquisition Act . at Madras is a statutory authority whose powers and functions were defined for the first time in statutory form in the Madras of Revenue Regulation (I of 1803) passed by the Governor-General-in-Council on 1st January, 1803. It appears from the preamble to the Regulation that prior to the establishment of Courts of judicature in the Presidency for administering justice in all cases, civil and criminal, it was usual for to exercise judicial authority in the determination of certain cases of a civil nature by way of appeals from the Collectors Who were entrusted with the administration of revenue and dispensation of justice in their respective districts. After the establishment of Courts of judicature it was decided that the judicial authority theretofore being exercised by should be formally abrogated and the powers and authorities of should be re-defined in respect of its executive administration of the revenue. Accordingly, Sections 4 and 5 of the Regulation enacted the duties of and its powers of superintendence and control of persons employed in the executive administration of revenues. Section 4 enacts that the duties of have been, and are declared to be, (i) the general superintendence of the revenues from whatever source they may arise, and (ii) the recommendation of such propositions to and in their judgment may be calculated to augment or improve those revenues. enacts that had, and are declared to have, authority to superintend and control all persons employed in the executive administration of the public revenue, all zamindars or proprietors of land paying revenue, and all farmers, securities, raiyats or other persons concerned in, or responsible for, any part of the revenue of Government, as far as the said superintendence and control may relate to the executive administration of the revenue under the regulations now enacted, or to be hereafter enacted. Section 33 of the Regulation enacts that shall be responsible that the executive officers employed under them discharge the duties of their respective stations with assiduity and for that purpose the shall require the officers to pay ready and implicit obedience to all its orders and regulations. To the same end, the was empowered to punish, at its discretion any neglect on the part of such officers. ", "36. The above provisions make it clear that is only concerned with the superintendence of the revenues of the from whatever source derived. Its powers of superintendence and control are limited to the persons employed in the executive administration of public revenue, and even those powers only relate to the control of the executive administration of revenue under the appropriate regulations. Even its disciplinary jurisdiction is confined strictly to the subordinate officers of the revenue. The subject of compulsory acquisition of land for public purposes is by no means connected with the administration of the revenue of the . Payment of compensation out of the coffers of the may have to do with the expenditure of the revenues, but what Regulation I of 1803, has entrusted to the is the raising of the revenues from whatever source derived. The 's position at the summit of the revenue administration cannot give it, on that account and without more, a similar position in the hierarchy of officials entrusted by the law with the implementation of the land acquisition proceedings. If the claims any powers of superintendence, control and administration over the Land Acquisition Collectors and their subordinates that must be spelled out from the provisions of the Land Acquisition Act itself or from any other express piece of legislation on the subject. We have not come across any piece of legislation in which has been given any powers as respects proceedings or officers under the Land Acquisition Act . As for the Land Acquisition Act itself, it is quite remarkable that in all its various provisions there is not a single place in which the gets so much as a passing mention. The authorities exercising powers and functions under the Land Acquisition Act are three in number, but is not one of them. The three authorities, in fact, are the , the Collector and . Besides, the Act establishes a direct link between the Collector and the for certain purposes and between the Collector and the for certain other purposes. Subject to the authority of the in regard to certain matters, on the one hand, and subject to the jurisdiction in certain other matters, on the other, the Collector is all-in-all under the Act and the is nowhere in the picture. The Collector, for purposes of the Land Acquisition Act may be either the District Collector or any other officer specially appointed to perform the functions of a Land Acquisition Collector. Whatever departmental disciplines and loyalties to which the District Collector and other revenue officials might be subject as subordinates of in so far as revenue administration is concerned, their status is that of distinctive statutory authorities once they begin functioning as Collectors under the Land Acquisition Act . The first piece of legislation for compulsory acquisition of land was the Bengal Regulation (I of 1824) which was applied with some modification to the Presidency of Madras for the first time by Act XX of 1852. The first all-India enactment was Act VI of 1857 which was replaced by Act X of 1870 which ultimately yielded place to the present Land Acquisition Act of 1894. At no point in the evolution of the statute law relating to land acquisition in this country has the of Revenue figured as an authority entrusted by the statute with any powers or duties or functions connected with compulsory acquisition of land for public purposes. The has apparently deliberately provided for the appointment of the District Collector who is the head of as the Land Acquisition Officer while at the same time desisting from handing over the entire set up of the administrative machinery entrusted with implementation of the provisions of the Land Acquisition Act , to the higher echelons of the revenue hierarchy. ", "37. That has no powers of superintendence or control apart from what Regulation or other statute confers on it, is illustrated by a decision of a learned single Judge of this Court reported in v. Secretary of State for India in Council (1939) 2 M.L.J. 6 : 49 L.W, 773 : A.I.R. 1939 Mad. 648. In that case, a person was appointed as village headman by the Revenue Divisional Officer. His order was confirmed in appeal by the District Collector. Another individual whose claim was rejected by both the officers purported to file what he was pleased to describe as a second appeal to . allowed the appeal and set aside the orders of the Revenue Divisional Officer and the District Collector. The person aggrieved against the 's decision filed a civil suit to set aside the 's orders. One of the questions raised in the suit was whether had jurisdiction to interfere with the orders passed by the Revenue Divisional Officer and the District Collector under the Madras Hereditary Village Offices Act, 1895. In second appeal, Wadsworth, J., held that the order of was illegal. Under the scheme of the Madras Hereditary Village Offices Act, 1895, whenever there was a vacancy to an hereditary office, the Collector shall fill up that vacancy and that any dissatisfied claimant shall have the remedy of a suit before the Collector to establish that he had a better right. Under the Subordinate Collector's Regulation, 1828, the powers of the Collector are to be wielded in the first instance by the Revenue Divisional Officer, subject to revision by the Collector. In this statutory scheme, the learned Judge considered the locus standi of to interfere in so-called second appeal or review with the appointment of the Village Officer. The learned Judge observed as follows: ", "The only power which can be claimed by is based on Section 5 of Regulation (I of 1803), whereby is given authority to superintend and control all persons employed in the executive administration of the public revenue.... But I am emphatically of opinion that these general powers of superintendence did not authorise to arrogate to itself a power of interference in revision or in second appeal from a statutory order, when machinery of the statute itself confers no such power.... ", "The learned Judge further observed thus: ", "In my opinion, the order of purporting to act in second appeal or revision and to decide a matter which according to the machinery of the Act should have been decided by a suit under Section 13 of Act III of 1895, was an illegal attempt to invade the vested rights of the plaintiff. ", "The above decision has been approved by a Full Bench of this Court in . ", "38. The same is the position in the present case under the Land Acquisition Act which is not only a special enactment but a complete code in itself. We therefore, hold that the 's Standing Order No. 90 relied on by learned Counsel for the petitioners has no statutory sanction. ", "39. , J., in , clearly observed that the instructions contained in 's Standing Order No. 90 were not issued under Section 55 and strictly speaking they are not statutory rules. The learned Judge, however, proceeded to observe, \"But, nontheless, the instructions have statutory force\". It is difficult to understand how the instructions of the , which are neither statutory nor rules, could yet possess \"Statutory force\". In our opinion, the only force that executive instructions can have, or hope to have, is executive force; they cannot have legislative or statutory force. Under Section 55(3) of the Act, rules framed by the appropriate after following the requirements of that section, can alone possess the \"force of law\" and not any other instruments. We have earlier shown how the of Revenue has no place in the scheme of the Land Acquisition Act . Considered from that view-point, 's Standing Order No. 90 cannot even claim the Status of executive instructions. ", "40. Before us learned Counsel for the petitioners did not rely so much on the 's Standing Order No. 90. He relied rather, on the order passed by in G.O. No. 196, , dated 6th February, 1926, relevant portions of which we have extracted and set out in an earlier part of this judgment. But the question would still remain the same. Can the instructions issued by the have statutory force? The answer, to our minds must be in the negative. The G.O. relied on is found published in the Land Acquisition Manual in Part III entitled \"General Principles and Procedure\". The particular G.O. is included in Chapter V of Part III. Chapter I of Part III contains an order by the , G.O. Ms. No. 2475, , dated 4th March, 1946, which explains the scope and effectiveness of the instructions contained in that Part. This Gazette Order is published at page 77 of the Manual and is as under: ", "Rules have been framed under Section 55(1) of the Land Acquisition Act prescribing the procedure to be adopted to give full effect to the spirit of the amending Act, and these have the force of law. They have been further supplemented by executive . instructions which though not having the force of law, yet bind the officers of the in their land acquisition work. ", "The above G.O. makes two things clear. (i) The instructions contained in Part III including G.O. No. 196, Revenue, dated 6th February, 1926 are not rules framed by in exercise of its powers under Section 55 . (ii) The instructions have no legal force. ", "41. Apparently this order, G.O. No. 2475, dated 4th March, 1946, was not brought to the notice of , J. Quite apart from the recognition by the in this G.O., that the executive instructions issued by it have no statutory force, the true position in law of such instructions could never have been in doubt. It was urged that the instructions by the are for the guidance of the officials. But under the peculiar terms of Section 55(1) , which , J., carefully noted, even instructions issued by the for the guidance of officers can have validity only if they are promulgated in the form of statutory rules, following the procedure and formalities laid down in Section 55 . Even otherwise, assuming that the is not barred from issuing \"extra-statutory\" instructions for the guidance of its officers, those instructions can only be interpretative of the existing statutory provisions. In this context, the departmental interpretation must necessarily give way to judicial interpretation. What the s say of a statute is the law; by which is meant, not only that it is binding on all authorities entrusted with the task of administering the statute, but also that the 's interpretation can be got over only by legislative amendment. In contrast, departmental or governmental interpretation of Acts of the Legislature have no such binding authority. Even the officers of the cannot excuse themselves from 's interpretation by the protest that they are bound, under the departmental discipline, to obey their superior's instructions. It may be observed that whenever a question is raised before the on a matter of statutory interpretation, not only is the not bound by any executive instructions on the subject, but the will not even be swayed by the consideration that any action of an executive authority has been done under the colour of the authority of those instructions. We do not, therefore, concur with the views of , J., based, as they are, on the 's Standing Orders or on the 's instructions. In our considered opinion, literature on land acquisition procedure cannot be relied upon by the petitioners to support their contention that the acquisition proceedings in this case are invalid because they were not served with individual notices of acquisition immediately following the notification under Section 4(1) . ", "42. Mr. , learned Counsel for the petitioners cited a decision of in , to support the proposition that even executive instructions issued by the Government could confer rights on the subject and when those instructions are not complied with by subordinate officials the subject would have a right to move this for redress. The question in that case was, whether a general order passed by on 15th July, 1960 applied to a clerk who belonged to ex-military personnel and who was employed on the civil side. It was contended by that the order was purely an administrative direction and it did not confer any justifiable right on the official in question such as could be enforced by the issue of a mandamus by the . This contention however was not accepted. The Supreme held that the order passed by must be regarded as supplementing the rules framed under Article 309 of the Constitution of India and since they were not . inconsistent with those rules, the instructions must be regarded as governing the conditions of service of the concerned Government servant. It was in that context that observed thus: ", "To say that an administrative order can never confer any right would be too wide a proposition. There are administrative orders which confer rights and impose duties. ", "We do not think that the above decision of on the construction of Service Rules and instructions can have application to a case like the present where the questions are: (i) whether can have locus standi to issue guidelines to officers functioning as independent statutory authorities, and (ii) whether the Government could issue rules for guidance otherwise than under Section 55 . Besides, their Lordships have themselves expressly stated in the above decision that \"We should not be understood as laying down any general proposition on this question.\" ", "43. The next major contention of the learned Counsel for the petitioners is that even if the 's Standing Order No. 90 or the 's instructions in the Manual were to be held non-statutory yet the omission of the Special Tahsildar to give individual notices to the writ petitioners and the other persons interested was in violation of the rules of natural justice and on this account, the subsequent proceedings taken by him must be held to be void. ", "44. A Similar argument addressed before Palaniswami, J., in , found favour with the learned Judge and he observed as follows: ", "... rules of natural justice would have to be complied with in the absence of a statutory provision. Violation of these instructions would result in denial of natural justice and would give rise to a cause of action to a person aggrieved by such denial. ", "The learned Judge relied on a decision of in , and observed that the principle laid down by in that decision would squarely apply to the case before him. The question which had to decide did not arise under the Land Acquisition Act but under certain Service Regulations relating to recruitment. The question was whether the recommendations of for recruitment to the posts in Junior and Senior Scales in was vitiated by the circumstance that the name of one of the members of itself figured in the list of persons to be considered for selection. The recommendations of were impugned on the ground of bias and as being opposed to the rules of natural justice, one of which lays down that \"no man can be a judge in his own cause.\" It was urged before the , on behalf of the , that principles of natural justice would not apply to purely administrative decisions. The however repelled this argument holding that the observance of rules of natural justice extended to administrative decision-making as well. ", "45. We regard the above decision as authority for the position that the rules of natural justice are not confined in their application to judicial and quasi-judicial proceedings, but apply equally to administrative proceedings. But we do not understand the decision to lay down that even in cases where the statute elaborately deals with, not only the powers and functions of an administrative agency but also the particular procedures that that agency should follow in proceedings within its cognizance the principles of natural justice should be freely applied to test the procedural validity of the action taken by the administrative agency. That this was not the broad result intended is shown by the following observations of the : ", "What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the inquiry is held and the constitution of the or body of persons appointed for that purpose. Whenever a complaint is made before a that some principles of natural justice had been contravened the has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. ", "The question of the applicability of the rules of natural justices cannot, in our opinion, be judged de hors the provisions of the statute, and this position is made clear by in the above passage. Earlier in this judgment we have subjected the relevant provisions of the Land Acquisition Act relating to notice of acquisition to detailed scrutiny. We have explained how under the very scheme of its various provisions the Land Acquisition Act does not contemplate the issue of individual notices of acquisition to all the persons interested in the land at the preliminary stage of notification. Our analysis of Section 4(1) , supplemented by reference to the proviso to Section 4(2) read with Section 45(1) and to Section 5-A by way of contrast, shows that the omission in the Act to provide for individual notices could not have been accidental. There are other provisions too, such for instance, as Sections 9(4) and 12(2) , which point to the same conclusion. These latter sections in the Act specifically provide for service of individual notices on the persons aggrieved, in the context of the subsequent proceedings for determination of compensation. The pattern which thus emerges is that of an Act which is deliberately choosy, to employ a colloquialism, in the matter of giving notices. Wherever it was felt necessary and just to give individual notices, the had made clear and specific provision therefor; wherever it was felt that public notice would more than meet the needs, having regard to the stage of the acquisition, the need for expedition and the requirements of public purpose itself, the has stopped short with providing for public notice. That the stage of the notification under Section 4(1) is only the preliminary stage of land acquisition is not only clear from the arrangement and contents of the sections in the Act, but also by decided cases on the subject. It is also clear that the right to object to the acquisition conferred by Section 5-A on the persons interested in the land can be taken away in any case of urgency by the making a direction under Section 17(4) to the effect that the provisions of Section 5-A shall not apply to the land in question. ", "46. The Land Acquisition Act is a complete Code in itself. Hence, wherever in the context of particular proceedings under the Act the has not provided for individual notices, that must be regarded not as an accidental or inadvertent omission on the part of the to provide for full procedure, which omission may be supplied by grafting the principles of natural justice to the relevant provisions, but as a deliberate decision of the not to import the principles of natural justice, to the fullest extent, into those provisions. ", "47. learned Counsel for the writ petitioners cited the decision of in , which decided the scope of an inquiry under Rule 4 of the Land Acquisition (Companies) Rules (1963). Under the said Rule, the Collector was to inquire into any application made by a company to the for acquisition of any land for its purpose. The Rule explicitly made provision for hearing by the Collector of the company in question and also of representations from other Departments of . The rule, however, contained no provision for any opportunity to be given, at that stage to the owners of the land sought to be acquired for the purpose of the company. Even though the rule in question was silent regarding the mode of inquiry to be held by the Collector, yet held that in the interest of fair play, the Collector has to observe the principles of natural justice by affording the persons interested in the lands reasonable opportunity of being heard and of adducing material before the Collector to refute the allegations of the company. ", "48. Our understanding of the above decision is that while the Rule contemplated an inquiry to be made by the Collector, since the procedure for holding the inquiry was not fully laid down, the principles of natural justice could very well be inducted into the Rule for determining what the lawful requirements of the inquiry should be. We do not think that the above decision of has any application to Section 4(1) . We have earlier shown how, on its own terms, as well as in comparison with other provisions in the Act, the public notice contemplated under Section 4(1) must be regarded as exhaustive of the mode of notice. The question of importing rules of natural justice would only arise where the statutory provision can be held to have left gaps that are capable of being filled by the rules of natural justice, without doing violence to the legislative intentions deducible from the terms of the relevant statutory provision . ", "49. We may refer in this connection, to a recent decision of in v. (1973) 2 W.L.R. 92, as to the proper approach that a Court of law must take whenever natural justice is invoked for the purpose of supplementing express statutory provisions. held in that case that it is not the function of to re-draft the code for the purpose of applying the principles of natural justice. ", "Lord , delivering the judgment of the ,, quoted from a decision of in v. Municipality of St. Leonards (1969) 121 C.L.R. 509,524, the following passage, as relevant: ", "The has addressed itself to the very question and it is not for the to amend the statute, by engrafting upon it some provision which the might think more consonant with a complete opportunity for an aggrieved person to present his views and to support them by evidentiary material. ", "50. Reference was also made to the judgment of Lord in v. (1971) A.C.297, and in particular to the following passage in that judgment at page 308: ", "Natural Justice requires that the procedure before any which is acting judicially shall be fair in all the circumstances... For a long time, the have without objection from , supplemented procedure laid down in legislation where they have found that to be necessary, for this purpose. But before this unusual kind of power is exercised it must be clear that the statutory procedure is insufficient to achieve justice and that to require additional steps would not frustrate the apparent purpose of the legislation. ", "51. In v. (1972)1 W.L.R. 534, another decision of , Lord quoted the above passage from Lord and proceeded to observe: ", "I respectfully agree. I would only emphasise that one should not start by assuming that what has done in the lengthy process of legislation is unfair. One should rather assume that that has been done is fair until the contrary is shown\". ", "52. In our view, the Land Acquisition Act is a piece of legislation wherein is to be found not merely the policy of the to acquire lands for public purpose, but also the means for giving effect to such a policy. In this situation, our function as a in relation to this enacted law is limited to interpreting and applying its provisions. In the task of interpretation it is necessary for us to ascertain what the means are which the has enacted for the purpose of achieving its policies. Having ascertained those means, effect must be given to those means and to no other. We do not conceive it to be our function to add to the means which the has enacted merely on the score that the provisions do not fulfil to perfection the dictates of natural justice. ", "53. We may quote the following general observations of Lord in (1970)3 AII E.R. 97 at 106, on the scope of judicial construction of statutes interfering with subject's rights. The observations were made in a different context while considering a different statutory situation, but we feel that they are apposite to the present purpose: ", "Under our system of ary Government what enacts are not policies but means for giving effect to policies. Those means often involve imposing on private citizens fresh obligations or restrictions on their liberties to which they were not previously subject at common law. The constitutional function of the in relation to enacted law is limited to interpreting and applying it. It is the duty of the Judge to ascertain what are the means which has enacted by the Act. In construing the enacting words he may take account of what the Act discloses as the purpose that those means were intended to achieve and, in the case of ambiguity alone, he may interpret them in the sense in which they are more likely to promote than hinder its achievement. But it is no function of a Judge to add to the means which has enacted in derogation of rights which citizens previously enjoyed at common law, because he thinks that the particular case in which he has to apply the Act demonstrates that those means are not adequate to achieve what he conceives to be the policy of the Act. To do so is not to carry out the intention of but to usurp its functions. The choice of means is itself part of the ary choice of policy. It represents the price, by way of deprivation of freedom to do or not to do as the wish, which is prepared to exact from individual citizens, to promote those objects to which the Act is directed. To raise the price is to change the policy, not to give effect to it. If the policy is to be changed, it is for , not the to change it.... ", "54. For the reasons stated above we do not feel persuaded to imply in the provisions of Section 4(1) and Section 5-A of the Act, the necessity for issuing individual notices to persons aggrieved, promoted by consideration of natural justice. This means that the writ petitioners cannot make a grievance of not having been individually served with notices of acquisition. ", "55. On these conclusions of ours we must reject the ruling of , , in v. State of Madras , as unacceptable. The learned Judge had referred in his judgment to two earlier decisions of learned single Judges of this Court, both of them unreported. One of them was rendered by , (as my Lord the Chief Justice then was) in v. The State of Madras by the Secretary to Government, , Madras and another W.P. No. 1846 of 195 dated 7th February, 1966. The other was by , , in firm by its , represented by the for Land Acquisition Special Indian Institute of Technology having his office at Saidapet, Madras-15 W.P.Nos.1734, 1770 and 1771 of 1967, dated 27th July, 1967. , , felt that neither decision laid down the law correctly and, in that view felt free to differ from them. As we shall show presently, the views expressed in the two unreported decisions eminently merit acceptance both on principle and on precedent. ", "56. The earlier of the two unreported decisions arose in a case where the owner contended that there was no proper publication of the notification under Section 4(1) of the Act. It was further contended that the property notified for acquisition was under mortgage, and the Collector should have given notice personally to the mortgagee. Dealing with the latter contention , observed: ", "Regarding the contention that there was no proper notice to the petitioner or to , it has to be mentioned that neither Section 4(1) nor Section 9(1) contemplates service of any personal notice on the owner or occupier of the land that is sought to be acquired. ", "57. Referring to the nature and scope of the notice under Section 4(1) , it was observed: ", "The notice contemplated at this stage is only a public notice at convenient places in the locality. ", "58. Elaborating the theme at a later part of the judgment, it was observed as follows: ", "The plea of the learned Counsel for the petitioner that Section 4(1) read with Section 45 contemplates service of notices on the person in occupation or interested in the property cannot be accepted for there is no mention of service of any personal notice under Section 4 . What is contemplated under Section 45 is that service of any notice under this Act shall be made by delivering or tendering a copy thereof signed, in the case of a notice under Section 4 , by the officer therein mentioned. The proviso to Section 4(2) states that no person shall enter any building without giving the occupier at least seven days notice in writing of his, intention to do so. So far as the notice under Section 4(1) is concerned, it is not required that it should be served on any person. ", "59. In this view, among other considerations, the writ petition in that case was dismissed. The comment of , J., on the above decision is that there was no consideration by the learned Judge of the executive instructions and the Board Standing Orders bearing on the subject of notice under Section 4(1) . We have earlier expressed the view that those instructions have no legal efficacy. On the terms of Section 4(1) the views expressed in the above unreported judgment are those with which we fully agree. ", "60. , , in the course of his judgment in the other unreported case referred to by us, adverted to the Rules made by under the Land Acquisition Act . He observed that \"these Rules prescribe only for the publication of notices at convenient places in the locality, in the office of the Collector, the Tahsildar and in the nearest Police Station. But individual notices to the persons interested in the land are not enjoined either by the Statute or the Rules.\" While concluding, , , referred to the earlier unreported decisions of this Court in these terms: \"That such individual notices are not obligatory is the view held by this Court in earlier decisions: unreported decisions in W.P. Nos. 1846 of 1965 and 219 of 1963. The learned Judge also adverted to the executive instructions on the subject found at pages 41 and 85 of the Land Acquisition Manual, but the learned Judge's view seemed to be that the provision of individual notices in those instructions was only \"by way of abundant caution\". It is not clear as to what the learned Judge meant to indicate by this description. It is, however, quite clear that the learned Judge was not prepared to quash the proceedings merely on the basis of the executive instructions, considering the view he had expressed as to the scope of Section 4(1) of the Act and Rule 1 of the Madras Land Acquisition Rules on the subject of notice. ", "61. While referring to the above decisions, , J., expressed the criticism that the learned Judge had not adverted to the terms of the statutory form of notice to be issued under Section 5-A of the Act. This is, no doubt, true, but, in our view, the statutory form of notice referred to by , J., does not lead to the conclusion that the Act contemplates individual notices to be observed on the persons interested even at the stage of Section 4(1) notification. The learned Judge himself concedes that \" Section 5-A does not say that before holding an inquiry the Acquisition Officer should issue notice to the persons interested\". Form 3 is not a statutory form. Even Form 3, printed at page 262 of the Land Acquisition Manual cannot bear the inference which the learned Judge has drawn from its contents. The form of notice no doubt calls upon \"all persons interested in the land are accordingly required to lodge within 30 days from the date of publication of the above notification a statement in writing... etc.\" But there is nothing in the form to suggest that the notice in that form should actually be issued to each and every one of the persons interested in the land. From the mere aspect of that which has been prescribed as the subject-matter of any given notice, we cannot proceed to draw any conclusion as to the mode of service of that notice. The content of a notice is one thing: the mode of service of that notice is quite another. If the Rules had really contemplated individual service of notices on all potential objectors under Section 5-A it should have been the easiest for the rule-making authority to have so prescribed in explicit terms. However much the language of Form 3 can be strained, it cannot, in our opinion, lead to the inference that notice in that form must be sent to all the persons interested in the land. ", "62. In view of the above considerations, we hold that the views expressed in the two unreported decisions of this Court are to be preferred to those found in . ", "63. The last submission made by the learned Counsel for the petitioners relates to a subsequent stage of the acquisition proceedings, namely, the stage of what is popularly termed as \"the award inquiry.\" learned Counsel complained that the notices for the award inquiry were not properly served on his clients. The provisions regarding the award inquiry are to be found in Sections 9 and 10 of the Land Acquisition Act. Section 9 deals with notices to persons interested. It provides that the Collector shall give public notice at convenient places on or near the land to be taken, stating that the Government intends to take possession of the land and that claims to compensation for all interests in such land may be made to him. Section 9(2) requires that the public notice shall state the particulars of the land so needed, and shall require all persons interested in the land to appear personally or by agent before the Collector at a time and place mentioned therein and to state the nature of the interest in the land and the amount and particulars of their claim to compensation for such interests, as well as their objections, if any, to the measurements. Section 9(3) contemplates that individual notices must be served on the occupier of the land and on all persons known or believed to be interested in the land. Sub-section (4) provides that in the event of any such person residing elsewhere and having no agent in residence at the locality, then the notice will have to be sent to him by registered post addressed to. him at his last place of residence of place of business. Section 45 , which specifically deals with modes of service of individual notices, enacts that service of any notice under this Act shall be made by delivering or tendering a copy of such notice. It further says that whenever practicable, service of the notice shall be made on the persons therein named. But when such person cannot be found, service may be made on any adult male member of his family, residing with him, and if no such adult male member can be found, the notice may be served by affixing the notice on the outer door of the house in which the person therein named ordinarily dwells or carries on business, or by affixing a copy thereof in some conspicuous place in the office of the Collector or in the Court-house, and also in some conspicuous part of the land to be acquired. Provision is also made, at the Collector's discretion, to send notice by registered post to the person sought to be served, addressing him at his last known residence or place of business. The section provides that production of postal acknowledgment would be good proof of service in such cases. ", "64. In the present case, the facts relating to the service of the notices of the award inquiry are to be found from the counter-affidavit filed by the Special Tahsildar. He states that notices under Sections 9(1) and 10 of the Land Acquisition Act and 9(3) and 10 were published and served on all the interested persons in accordance with the Statute. In so far as the petitioner in W.P. No. 746 of 1972 is concerned, it is stated that since she was out of Coimbatore, the notice under Section 9(3) was served by affixture. In the case of the other petitioner in W.P. No. 889 of 1972, the counter-affidavit filed by the Deputy Secretary to Government, states that the notice under Sections 9(1) and 10 and 9(3) of the Act were published and served on all the interested persons in accordance with the terms of those provisions. As for the notice directed to , it is stated that the notice intended for him was received by his father, , who acknowledged the receipt of the notice on behalf of his son. ", "65. The above facts set out in the respondents counter-affidavits have not been controverted before us. However, it is the case of both the writ petitioners that the notices were not actually served on them personally. , in her affidavit in support of her Writ Petition No. 746 of 1972, states that the land, which is the subject-matter of acquisition in T.S. No. 3978, Oppanakkara Street, Coimbatore Town is owned by 10 persons, being herself, her three sisters, her five brothers and her mother, all of whom are entitled to the property as co-heirs of her father. She further states that while a portion of the premises had been let out to a tenant, the remaining portion \"is set apart for our personal occupation as and when we visit Coimbatore where our mother is permanently residing there\". , in his affidavit in W.P. No. 889 of 1972, states that T.S. No. 3980 of Oppanakkara Street, Coimbatore Town, in which he is interested as a co-owner, belongs to his family consisting of 7 members, namely, the petitioner's father, the petitioner, his brother and four sisters. He further states that a portion of the house property had been let out to a tenant, and in the remaining portion the petitioner's family is permanently residing. It is further stated that a portion of the premises is set apart for the petitioner's sisters whenever they visit Coimbatore Town. ", "66. We are satisfied that the services of notices under Section 9(3) read with Section 45 have been validly made on the petitioner on the basis of their own affidavits in support of the writ petitions. Section 45(3) provides that when a person named in the notice cannot be found, service may be made on any adult male member of his family residing with him. On the admission made by that his father was residing with him in his family house service of notice on the father is a valid service of notice on the petitioner himself. In the case of , since she was not found in the residence at the time when the notice was sought to be served on her, the notice-server, affixed a copy of the notice at the residence. It was argued that the house in question was not her residence, but this cannot be accepted, in the face of the admission made by her in the affidavit that whenever she visited Coimbatore she used to stay in the house and a portion in the house was specially reserved for such stay. Law does not say that a person can have only one ordinary residence. A person can have more than one ordinary residence, and service of notice at any one of the residences would be good service under Section 9(3) read with Section 45 . In these circumstances the contention that service of notice under Section 9(3) was not proper must also be rejected as untenable. ", "67. It would be appreciated that the contentions raised by the petitioners are all in the nature of mere procedural wrangles. The writ petitioners have not raised before us any contention either that the purpose of the acquisition is not a public purpose, or that the land sought to be acquired would not be suitable for that public purpose. Undoubtedly, the expansion of the elementary school must fall within the conception of a public purpose. Undoubtedly, again, the requirements of expansion can be fulfilled in this case in no other way then by acquiring the adjacent lands on either side of the existing premises, short of asking the school to shift its present premises bag and baggage and plant it elsewhere in the Town. Perhaps because the petitioners have no case on merits, they have been hard put to it to raise technical contentions, concerning notice, service, etc., which after consideration we have rejected in the foregoing paragraphs. ", "68. In the circumstances, the writ petitioners are dismissed, but again in the circumstances, without costs."], "relevant_candidates": ["0000526906", "0000639803", "0000879806", "0000892303", "0001027849", "0001372570", "0001675739"]} {"id": "0000368132", "text": ["CASE NO.: Appeal (civil) 6113 of 2000 PETITIONER: RESPONDENT: M/s DATE OF JUDGMENT: 20/02/2007 BENCH: & JUDGMENT: ", "J U D G M E N T S.B. SINHA , J : ", "Appellant insurer is before us questioning the correctness or otherwise of a judgment and order dated 10.09.1999 passed by of in CIMA 21 of 1998 allowing the appeal preferred by the respondent herein from a judgment and order dated 16.12.1997 passed by . ", "Respondent herein carries on business in jewellery It obtained a policy known as 'Jeweller Block Policy'. A theft of 140 gms of jewellery worth of Rs.63,000/- occurred in his business premises. A First Information Report was lodged therefor. Respondent also lodged a claim with the appellant herein. The same having not been settled for a long time, an application was filed before constituted under the J & K Consumers Protection Act, 1987. ", "The question raised before the was as to whether the loss in question was covered by the insurance policy. Appellant contended that the claim of the respondent is covered by an exclusion clause contained in the policy, which reads as under : ", "\"8. Loss or damage occasioned by theft or dishonesty or any attempt there at committed by or where such loss or damage has been expedited or in any way sustained or brought about by : ", "(a) any of the insured's family members; ", "(b) any servant or traveler or messenger in the exclusive employment of the insured; ", "(c) any customer or broker or their customer or angadias or cutters or goldsmiths in respect of the property hereby insured entrusted to them by the insured his or their servants or agents.\" ", "The by reason of its order dated 16.12.1997, inter alia, found the said claim to be not sustainable on the ground that the loss was not covered by the said policy, stating : ", "\"\u0005It appears to us that while preparing the insurance agreement the insurer was aware of the fact that this could be the easiest way for any Jeweller to raise claims against the insurance companies and that is why this clause has been deliberately introduced and theft by customer if any has been put in exclusive clause of the policy\u0005\" ", ", as indicated hereinbefore, by reason of its judgment and order dated 10.09.1999, did not agree therewith. It was held : ", "\"What is meant by the term 'entrustment' does handing over of jewellery to a customer amounts to entrustment. The dictionary meaning of the word 'entrust' would be to give to another for care, protection or to commit something trustfully or plays trust upon a person'. If a customer enters the premises of a shopkeeper and examines some movable property and takes away the same, then there hardly arises any occasion for entrustment to such a customer. In the present case a customer entered the business premises and removed 140 gms. of Jewellery. There was no entrustment on the part of the owner to the customer. The act of removal of the goods by the customer is nothing but a plain theft. This is a dishonest taking and removing the property by the customer with the intent of permanently depriving the owner.\" ", "A short question which, thus, arises for our consideration is as to whether clause 8 of the policy is applicable to the facts and circumstances of the present case. ", "It is not in dispute that an insurance cover against theft was granted by the appellant. The insurance policy, thus, covered the risk of theft also. An insurer determines the extent of its risk. It floats the policy knowing fully well the risk it seeks to cover. Having regard to the determination of the risk only he fixes the quantum of premium. The insured while entering into a contract of insurance must precisely know the extent of his cover so that he may take out additional insurance if it is so required. ", "However, there may be an express clause excluding the applicability of insurance cover. Wherever such exclusionary clause is contained in a policy, it would be for the insurer to show that the case falls within the purview thereof. In a case of ambiguity, it is trite, the contract of insurance shall be construed in favour of the insured. [ ], . [2006 (14) SCALE 300] and []. ", "Clause 8 of the contract of insurance would be attracted only where the offences specified therein are committed by any of the persons mentioned therein. For defeating the claim of the respondent, it was, thus, obligatory on the part of the appellant to establish that the conditions prescribed therein were satisfied. ", "Keeping in view the aforementioned legal aspect of the matter, we may advert to the meaning of the word 'entrust'. Its ordinary meaning, would mean \"to charge or invest with a trust; to commit to another with a certain confidence regarding his care\" [See Advanced Law Lexicon by \u0016 3rd Edn. \u0016Book 2 \u0016 page1613]. ", "It requires no elaboration that offences of 'breach of trust' and 'theft' contain different ingredients. Whereas theft has been defined in Section 378 of the Indian Penal Code; breach of trust has been defined in Section 405 thereof, which read as under : ", "\"378. Theft.- Whoever, intending to take dishonestly any moveable property out of the possession of any person without that person's consent, moves that property in order to such taking, is said to commit theft.\" ", "Illustration (d) appended thereto reads as under : ", "\"(d) A, being 's servant, and entrusted by with the care of 's plate, dishonestly runs away with the plate, without 's consent. A has committed theft.\" ", "\"405. Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits \"criminal breach of trust\"\" ", "The word 'entrust' would imply giving responsibility to a person upon whom the owner has confidence. It envisages establishment of a relationship. When a customer enters into a jewellery shop, as of necessity, the owner or his agent must allow him to inspect the merchandise, the customer intends to purchase. For the said purpose possession in the legal sense is not handed over. The owner or his agent does not loose complete control thereover. ", "For the purpose of arriving at a conclusion as to whether the exclusion clause is attracted or not, loss or damage must be occasioned, inter alia, by a customer in respect of the property entrusted to him. The word 'customer' contained in clause 8 (c) of the Insurance Policy must be read ejusdem generis. A customer contemplated thereunder must have to be one who would be a man of trust. If a customer is not a man of trust or the property had not been entrusted to him, the exclusion clause would not apply. The customer who committed theft of jewellery was an unknown person. It was so categorically stated in the First Information Report. There was, thus, no occasion for the respondent to entrust the jewellery to him. ", "Mr. , the learned counsel appearing for the appellant has relied upon the meaning of the word 'entrust' as contained in Black's Law Dictionary, 8th Edn. and Webster's Universal Dictionary. ", "In Black's Law Dictionary, the word 'entrust' has been defined as under : ", "\"To give (a person) the responsibility for something after establishing a confidential relationship.\" ", "In Webster's Universal Dictionary meaning of the word 'entrust' reads as under : ", "\"To confer as a responsibility, duty etc. to place, something in another's care.\" ", "Apart from the fact that the said meaning of the term 'entrustment' goes against the submission Mr. , we may notice that in Black's Law Dictionary the word 'entrusting' in commercial law has been described as \"The transfer of possession of goods to a merchant who deals in goods of that type and who may in turn transfer the goods and all rights to them to a purchaser in the ordinary course of business.\" Transfer of possession of goods, therefore, is a sine qua non for entrustment. The person must be handed over the possession of the property. Illustration (d) appended to Section 378 envisages a situation of this nature. It by no stretch of imagination would have contemplated a situation where an unknown customer would have committed theft. ", "The word 'entrustment', moreover, must be read in the context in which it has been used. ", "In Colinvaux's Law of Insurance, 7th Edn., by at page 50, it is stated : ", "\"Words in context The above generality is not applicable when it is clear from the context that the words are not used in a colloquial popular sense. Thus the word \"flood\" in the phrase \"strom, tempest or floor\" does not cover a case where a house-holder's bathroom is affected by upward seepage of water to a depth of three inches, as the context of the word requires an event violent, sudden or abnormal. Similarly, heavy rain is not in itself likely to constitute a storm. It has also been held that the phrase \"sum actually paid\" in a reinsurance agreement referred to a sum which the reinsured is merely liable to pay, as the agreement read as a whole was against liability rather than actual payment.\" ", "In The State of Gujarat v. [(1968) 2 SCR 408], this Court held : ", "\"\u0005The expression 'entrustment' carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an entrustment\u0005\" ", " [AIR 1974 SC 794], this Court held : ", "\"12. To constitute an offence under Section 409 , it is not required that misappropriation must necessarily take place after the creation of a legally correct entrustment or dominion over property. The entrustment may arise in any manner whatsoever. That manner may or may not involve fraudulent conduct of the accused. Section 409 , covers dishonest misappropriation in both types of cases; that is to say, those where the receipt of property is itself fraudulent or improper and those where the public servant misappropriates what may have been quite properly and innocently received. All that is required is what may be described as entrustment or acquisition of dominion over property in the capacity of a public, servant who, as a result of it, becomes charged with a duty to act in a particular way, or, atleast honestly.\" ", "Yet again in etc. v. etc. [(2003) 3 SCC 641], it was held : \"361. To constitute an offence of criminal breach of trust, there must be an entrustment, there must be misappropriation or conversion to one's own use, or use in violation of a legal direction or of any legal contract; and the misappropriation or conversion or disposal must be with a dishonest intention. When a person allows others to misappropriate the money entrusted to him, that amounts to a criminal breach of trust as defined by Section 405 . The section is relatable to property in a positive part and a negative part. The positive part deals with criminal misappropriation or conversion of the property and the negative part consists of dishonestly using or disposing of the property in violation of any direction and of law or any contract touching the discharge of trust. ", "362. it was held that if the Managing Director of the Bank entrusted with securities owned by the pledgor disposes of their securities against the stipulated terms of the contract entered into by the parties with an intent to cause wrongful loss to the pledgor and wrongful gain to the Bank, there can be no question but that the Managing Director has necessarily mens rea required by Section ", "405. ", "363. The term entrustment is not necessarily a term of law. It may have different implications in different contexts. In its most general signification all it imports is the handing over possession for some purpose which may not imply the conferring of any proprietary right at all. ", "364. When a person misappropriates to his own use the property that does not belong to him, the misappropriation is dishonest even though there was an intention to restore it at some future point of time.\" ", "We, therefore, are clearly of the opinion that the view taken by was correct. judgment is upheld. The appeal is dismissed. We, in the facts and circumstances of this case, also direct the appellant to pay and bear the cost of the respondent throughout. Counsel's fee in this appeal is assessed at Rs.50,000/-."], "relevant_candidates": ["0000095274", "0000705032", "0001009121", "0001273982", "0001739214"]} {"id": "0000402967", "text": ["JUDGMENT , J. ", "1. Messrs (hereinafter referred to as 'the Mills') are engaged in the manufacture of Maida, which is item no. 1-F of the First Schedule attached to the Central Excises and Salt Act , 1944 (hereinafter referred to as 'the Excise Act ') and bolts, nuts and screws which are item no. 52 of the said Schedule as also certain articles which are included under item no. 68 of the Schedule. The details of the other items excluding those under items 1-F and 68 are given in annexure 4 appended to the writ application. ", "2. By a notification issued by dated 10th August, 1971 item no. 1-F of the First Schedule to the Excise Act , has been exempted from payment of duty under Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as 'the rules'), copy of which is Annexure 1. Thereafter by a notification dated 18th June, 1977, under Rule 8(1) of the Rules (copy of which is annexure 2) exempted goods falling under item 68 of the First Schedule, if to be utilised for home consumption and if the total value of all excisable goods in the preceding financial year docs not exceed Rupees thirty lakhs. The petitioner claims that under the aforesaid notification the total value of Maida manufactured by it in the preceding financial year could not be included in determining the exemption. The Assistant Collector of Central Excise (respondent no. 3), however, asserts that the value of Maida cleared in the previous financial year shall be taken into account for determining the exemption under the aforesaid notification. Hence this application. ", "3. The Excise Act , under Section 2(d) , defines excisable goods, and Section 3 is the charging section which provides that there shall be levied and collected in such manner as may be prescribed, duties of excise on all excisable goods other than salt, which are produced or manufactured at the rates set forth in the First Schedule, and it further empowers different tariff values to be fixed for different classes or descriptions of the same article. Section 6 authorises , by notification from such date as may be specified in it, to have the production or manufacture or any process of production or manufacture of any specified goods included in the First Schedule, licence the production or of salt petre or any specified component parts or ingredients of such goods or of specified containers of such goods in accordance with the terms and conditions granted under this Act. This First Schedule attached to the Act details the items of goods as also the basic and additional rates of duty. It appears that to begin with the First Schedule contained 11 items which has now increased to 68 items. Section 37 empowers to make rules and under Section 38 such rules have to be laid before while it is in session for a total period of 30 days which may be comprised in one or two more successive sessions. The have the power to modify or annul the Rules. Under Rule 8(1) is authorised from time to time by notification in the official gazette to exempt, subject to such conditions as may be specified in the notification, any excisable goods from the whole or any part of the duty leviable on such goods, The aforesaid two notifications, annexures 1 and 2, have been issued under this provision. ", "4. Relevant facts leading to this application are that, as already pointed out earlier, by a notification copy of which is annexure I, Maida was exempted from the duty of excise leviable thereon. Thereafter, in 1977, came the notification copy of which is annexure 2, granting exemption under certain conditions to articles manufactured under item no. 68. These items manufactured by the mill are M.S. rivets, castings, machinery parts, job work etc. Item 68 under the Schedule provided at the relevant period the rate of duty as 2% ad valorem. On the 7th or 8th of December, 1979, the Superintendent of , Patna City, respondent no. 4, issued a letter to the petitioners that since the annual turnover of the mills including the sale of Maida (which is item 1-F in the Schedule) was more than Rs. 30,00,000/- the mills were not entitled to the exemption from the payment of duty with respect to item No. 68 of the Schedule. Copy of this letter is Annexure 5. The mills did not accept the interpretation to annexure 2 and submitted in reply that the C.E. authorities were wrong in refusing to give the exemption, whereupon the mills have been served with an order of the Assistant Collector, , Patna (respondent no. 3) stating that the petitioners were liable for the financial year 1976-77 to Duty at the rate of 2% ad valorem on goods manufactured by them under item 68; copy of the communication is annexure 6. ", "5. A counter affidavit has been filed on behalf of the respondents stating that the exemption granted by annexure 2 would not exempt the liability of the mills from paying the duty upon goods, under the head, item no. 68, manufactured by them, inasmuch as the value of produced in the previous financial year had to be taken into account. It is not necessary to refer in detail to the counter affidavit as the facts are not in dispute. ", "6. Before proceeding to consider the merits of the rival claims made, a preliminary point raised on behalf of the respondents by the learned Standing Counsel for has to be disposed of. It was submitted that as the had not availed of the alternative remedies provided under the Excise Act itself, the present application was not maintainable. Reference was made to Sections 35 and 35A as also 36 of the Act, which provide for appeals and revisions to as also to itself. This preliminary objection was resisted by , who submitted that where a fundamental right is involved, consideration of alternative remedy is irrelevant, and he referred to a number of decisions in support of this submission. ", "He further submitted that once a writ petition had been admitted it could not be thrown away on the ground of alternative remedy. In support of this, learned counsel relied upon a Bench decision of this Court in , 1976 BBC J 1 where it was held : ", "\"...it is well established by several authorities of that alternative remedy is not a bar to the exercise of power by this Court under Articles 226 and 227 of the Constitution. Whether such an application should not be entertained, as there is an alternative remedy, should be considered at the time of admission of the writ application, and once the writ application is admitted and heard on merits, it should not be rejected merely on that ground.\" ", "In this connection it was further observed that at the stage of final hearing a writ application should not be dismissed on the ground that the petitioners have not availed of the alternative remedy provided under the enactment itself. In support, reliance was placed upon the case of , A.I.R. 1971 Supreme Court 33 where it was observed that merely because a revision application could have been moved under Section 35 of the Income-tax Act but was not moved, would not be justified in dismissing as not maintainable a petition which was entertained and was heard on merits. Therefore, it would not be permissible now to reject this application on the ground that the petitioners have availed of the alternative remedies provided under the Excise Act itself. ", "7. It may further be pointed out that in paragraph 27 of the writ petition it has been asserted that the petitioners have learnt that a communication bearing No. F.No. 3.36/8/77-TRU, dated 20th July, 1977, the Under Secretary to in the Ministry of Finance, has advised all the Collectors of Central Excise in India that in computing the sum of Rupees thirty lakhs as per the proviso to the notification copy of which is annexure 2, the value of all excisable goods whether exempted or not exempted, should be taken into account, and in that view of the advice, the remedy before any of the superior officers of the would be futile. In the counter-affidavit filed by the respondents in paragraph 21 it is stated that the aforesaid statement is not admitted and that the decision of respondent no, 3 is based upon a correct interpretation of the notification. If there be such a communication as mentioned above, it is obvious, any appeal or revision to the authorities as contemplated in Sections 35 , 35A and 36 would be of no avail. ", "8. In support of this application on merits, Mr. has made two submissions ; namely, that Maida having been exempted from excise duty was not \"excisable goods\" the value of which could be taken into account for the annual turnover. The second submission is that even after Maida has been exempted from the excise duty, it cannot be included in the expression \"all excisable goods cleared\" used in the first proviso to the notification (annexure 2). ", "9. For the sake of convenience I will first consider the second submission made on behalf of the petitioners. Before doing so, it would be relevant to quote the notification which reads thus :- ", "\"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Rules, 1944 hereby exempts goods falling under Item No. 68 of the First Schedule to the s and Salt Act , 1944 and cleared for home consumption on or after the first day of April in any financial year, by or on behalf of manufacturer from one or more factories from the whole of the duty of excise leviable thereon, if an officer not below the rank of an Assistant Collector of is satisfied that the sum total of the value of the capital investment made from time to time on plant and machinery installed in the industrial unit in which the goods, under clearance, are manufactured, is not more than Rupees Ten lakhs : ", "Provided that this exemption shall not be applicable to a manufacturer if the total value of all excisable goods cleared by him or on his behalf in the preceding financial year had exceeded Rupees Thirty Lakhs : ", "Provided further that the exemption contained to this notification shall apply only to the first clearance for home consumption by, or on behalf of, the manufacturer referred to in this notification, from one or more factories, upto a value not exceeding Rupees Thirty Lakhs during a financial year subsequent to 1977-78 and upto a value not exceeding rupees Twenty-four lakhs during the period commencing on the 18th day of June, 1977 and ending on the 31st day of March, 1978. ", "Explanation :-For the purposes of determining the value of any capital investment, only the face value of such investment at the time when such investment was made shall be taken into account.\" ", "It is not disputed that the goods falling under item no. 68 of the First Schedule relating to the mills are for home consumption and that the capital investment made from time to time on plant and machinery installed in the industrial unit of the mills in which the goods are manufactured is more than Rupees Ten Lakhs. In other words, the conditions to be fulfilled under paragraph 1 of the notification are fulfilled. The controversy arises with regard to the meaning and effect of the proviso thereafter, which says that the exemption shall not be available to a manufacturer if the total value in the preceding financial year of \"all excisable goods cleared by him\" had exceeded Rupees Thirty lakhs. Obviously in calculating the amount of Rupees Thirty lakhs the goods manufactured by the mills under item 52 has got to be included. The question is whether, in computing this amount of Rupees Thirty lakhs, Maida manufactured and sold during the period by the mill will be included or not. According to Mr. , the word \"cleared\" in the Rules and Notifications issued thereunder is used only for those \"excisable goods\" on which excise duty is actually paid and as no excise duty has to be paid on Maida, it would not be included in the expression \"all excisable goods cleared\". Learned counsel says that even if Maida in spite of the exemption, is \"excisable goods\" as defined in Section 2(d) of the Excise Act, it cannot be referred as excisable goods cleared. \"Cleared\" in the context means, free from obstruction or to free from obligation or encumbrance. Therefore, excisable goods cleared will only mean those excisable goods on which excise duty is payable and has been paid, that is, is free from obstruction or obligation or encumbrance. ", "10. In this context, reference was made to Rule 9 of the Rules, which provides that excisable goods shall not be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export or manufacture of any other commodity until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require. Rule 52 further provides that when a manufacturer desires to remove the goods on payment of duty either from the place or premises specified under Rule 9 or from a store room or other place of storage approved by the Collector he shall make an application in triplicate to the proper officer in the proper form and shall deliver it to the officer at least 15 hours before it is intended to remove the goods. The officer shall thereupon assess the amount of duty due on the goods and on production of evidence that the same has been paid into the treasury or paid to the account of the Collector in or , allow the goods to be \"cleared\". Placing reliance upon this provision, Mr. submitted that the word \"cleared\" is used to signify permission to remove such excisable goods only after payment of excise duty, meaning thereby, only after excise duty levied has already been paid. ", "11. Rule 52-A provides for goods to be delivered on gate pass and sub-rule (4) reads thus :- ", "\"Gate passes shall be maintained in two sets ; one for clearance for home consumption and the other for clearance for export. Each gate pass shall bear a printed serial number running for the whole year beginning on the first January or such other date as approved by the proper officer as may correspond to the accounting year of the factory. Only one gate pass book of each type shall be used by a factory for an excisable commodity at any one time unless otherwise specially permitted by the Collector in writing in respect of factories having more than one section from which clearances take place.\" ", "Mr. submitted that the word \"clearance\" has been used here for the removal of such goods on which either excise duty has to be paid or which are being permitted to be removed for export. It has, therefore, been urged before us that the word \"cleared\" as used in the notification signifies the removal of an obstruction which is in the way on account of the imposition of excise duty and which obstruction is removed when the excise duty has been paid. ", "12. The learned Standing Counsel on the other hand contends that the word \"cleared\" used in the notification has no special or particular meaning. It refers to all excisable goods which are moved out. According to him \"all excisable goods \"cleared\" in the proviso would mean all such goods removed irrespective of the consideration whether excise duty has been paid or such duty is exempted. In other words, Standing Counsel submits that if comes within the definition of \"exacisable goods\" then even if payment of excise duty is exempted, its value would be included in computing the amount of Rupees Thirty Lakhs. ", "He further emphasises that the word \"cleared\" as used in the proviso could not relate to excise duty actually paid as the expression used in the proviso is \"all excisable goods cleared by him\". It is said that the clearance refers to the clearance by the manufacturer and, therefore, the word \"cleared\" here means \"removed\". ", "13. The submissions made by both sides are plausible. , A.I.R. 1957 Supreme Court 657, Bhagwati, J., speaking for the Court ruled :- ", "\"It is no doubt true that in construing fiscal Statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the Statute or the substance of the law. If the satisfies the that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxaing Statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.\" ", "In the case of A.I.R. 1976 Supreme Court 1503, it was laid down ; ", "\"It is well settled that in case of fiscal Statute the provisions must be strictly interpreted giving every benefit of doubt to the subject and lightening as far as possible the burden of court fees on the litigant\". ", "Therefore, by strictly interpreting and giving every benefit of doubt to the subject, I am of the opinion that the proviso to annexure 2 refers only to such excisable goods on which excise duty has been paid. The contention that out-turn of Maida in the preceding financial year by the mills could not be taken into account for calculating the total output of \"excisable goods cleared\" must be sustained and Annexure 6 appended to the writ application is quashed and set aside. ", "14. Reverting to the first submission, Section 2(d) reads \"excisable goods\" specified in the First Schedule as being subject to duty of excise and includes salt. On behalf of the petitioners it is said that excisable goods under the definition has two attributes, namely : (i) goods which are specified in the First Schedule of the Act, and (ii) which are subject to a duty of excise. The argument proceeds that all the goods specified in the First Schedule are not necessarily subject to a duty of excise. There are some goods mentioned therein where the duty of excise is nil, as for example item No. 4 (1) (7) i.e. unmanufactured tobacco if used for agricultural purpose. It is further submitted that even if there are goods in the First Schedule which are subject to a duty of excise, such duty, at times, is exempted under Rule 8(1) of the Rules. Therefore, excisable goods not only refer to goods specified in the First Schedule but those goods must also be subject to duty of excise and where either of the conditions is missing, it is not excisable goods. In support of this contention, reliance is placed on a Single Judge decision of in the case of . 1972 Tax Law Reports 1771. This report was not available here but a copy of the judgment was given to us where it was observed : ", "\"On this observation, it is arguable that the goods manufactured by the petitioner ceased to be \"excisable goods\" after they were exempted from payment of duty, for the exemption notification was entitled to be regarded as part of the Act itself. If the Act and the Notification are read together, the effect is the goods exempted were not \"excisable goods\" within the meaning of Section 2(d) of the Act.\" ", "15. The Standing Counsel, on the other hand, submitted that the expression \"as being subject to a duty of excise\" is descriptive of the goods mentioned in the First Schedule and its purpose is to include in the definition of excisable goods only those goods which are subject, to a duty of excise under the Schedule itself. He has submitted that from the year 1944 itself when the Act was first made, there was at least one item in the Schedule where the duty of excise was nil which was item 8 (3) Palmyra Sugar. It is further argued that when the rate of excise duty is prescribed under the Schedule of the Act then such goods are subject to a duty of excise and if some of those goods are exempted by a notification under Rule 8(1) they still continue to be excisable goods on which excise duty is exempted. Exemption of such duty, it is submitted, is the result of an eclipse caused by the notification under Rule 8(1). The Standing Counsel relied upon a Bench decision of in the case of , 1978 ELT (J 57), a copy of which has been given to us, as the report is not available, where it was held that the character of excisable goods does not depend on the actual levy a duty but on the description as excisable goods in the First Schedule to the Act and any exemption does not change. the nature and character of the goods as excisable goods within the meaning of the Act. ", "16. As I have already held that the petitioners are entitled to the relief sought for in this application, as at present advised, I do not consider it necessary to decide this point. ", "17. In the result, this application is allowed and the impugned order is quashed and set aside. In the circumstances of the case, however, I would make no order as to costs. ", ", J. ", "I agree with my learned brother on both the questions decided by him but I would like to add a few words. ", "19. With respect to the preliminary objection taken by the Standing Counsel, appearing on behalf of , regarding the maintainability of the writ application, Mr. contended that in the facts and circumstances of the case, the provisions for appeal and revision do not provide an effective alternative remedy and since no investigation of fact is involved in the case, this should not refuse to exercise its constitutional powers. The notification (Annexure 2) has been erroneously interpreted by the authority and the impugned order must, therefore, be held to be without jurisdiction. This , therefore, should not decline to give to the petitioner the relief under Article 226 of the Constitution. He also cited a number of decisions in support of his argument. ", "20. Mr. advanced a further argument that as the writ application was admitted by this Court, it should not be dismissed on the basis of the preliminary objection now. He placed reliance on the decisions in , A.I.R. 1971 Supreme Court 33, , 1976 B.B.C. J. 1 and ., A.I.R. 1973 Madhya Pradesh 175. ", "21. The appellant in (supra) was aggrieved by the assessment order passed under the Income Tax Act and applied for rectification of a mistake in the order of assessment which he claimed, was apparent from the record. The Income Tax Officer declined to grant any relief and the assessee moved under Article 226 of the Constitution challenging the order of the Income Tax Officer. Having lost the case before the . High Court, he approached and was granted special leave. accepted the claim of the appellant, allowed the appeal and while so doing held as under:- ", "\"It is true that a petition to revise the order could be moved before the Commissioner of Income Tax. But moved a petition in and entertained that petition. If had not entertained his petition, could have moved the Commissioner in revision, because at the date on which the petition was move 1 the period prescribed by Section 33-A of the Act had not expired. We are unable. to hold that because a revision application could have been moved for an order correcting the order of the Income Tax Officer under Section 35 , but was not moved, would be justified in dismissing as not maintainable the petition which was entertained and was heard on the merits\". ", "22. , 1976 B.B.C. J. 1 the petitioner challenged before this Court an order of confiscation passed under Section 6A of the Essential Commodities Act and it was pointed out that Section 60 of the Act provided for an appeal against such an order to be filed within one month from the date of its communication, which the petitioner had failed to avail. The petitioner had approached within the period prescribed for filing the appeal and the writ application was admitted and was heard after the expiry of the said period. Relying upon the decision of in case (supra) held that the writ petition could not be dismissed on the ground of alternative remedy. ", "23. In the present case also, the petitioner filed a wait application before the expiry of the period of limitation which is admittedly three months as mentioned in Section 35 and the case was admitted and an interim order was passed. Now when the period of limitation is over, it will not be a proper exercise of the jurisdiction to dismiss the application merely on the ground that the petitioner should have filed an appeal. The preliminary objection raised on behalf of the respondents must, therefore, be rejected. ", "24. I entirely agree with the view expressed by my learned Brother on the second point urged on behalf of the petitioner, as discussed in paragraphs 9 to 12 of his judgment. ", "25. I wish to express my opinion on the first question raised on behalf of the petitioners also as formulated in paragraph 3 of the judgment of my learned Brother. ", "26. The expression \"excisable goods\" has been defined in Section 2(d) in the following terms : ", "\"Excisable goods means goods specified in the First Schedule as being subject to a duty of excise and includes salt\". ", "Mr. contended that after exemption was granted with respect to by Annexure 1, the article ceased to be subject to a duty of excise and consequently cannot be assumed to be covered by the expression. The factual position in this case admittedly is that if the sale of in the preceding financial year is taken into account, the total turnover would exceed Rs. 30 lakhs but if be excluded, the turnover will be below that figure, and consequently the first proviso in annexure 2 would have no application at all. The question to be answered, therefore, is as to whether continued to be excisable goods even after Annexure 1. According to the petitioner, the liability in regard to the payment of excise duty is an essential condition for bringing an article within the expression, and, as by Annexure 1, was exempted from duty in 1971, it cannot be treated as excisable goods since then. The learned counsel also tried to take help from the language used in Section 6 as it stood earlier and as it now stands after amendment. He said that if the intention was to include within the expression all the articles specified in the First Schedule then there was no necessity of including the 'words \"as being subject to a duty of excise\" in the definition. Mr. strenuously contended on the well-established principles of interpretation that the legislature must be presumed to have used each word in a Statute for a purpose and that every part of a statutory provision should be given effect to. It was urged that if the intention had been to, treat every article mentioned in the schedule as excisable goods without reference to the question as to whether duty was payable or not, it could have been expressed in a more direct straight forward manner without unnecessarily making a reference to payment of duty. ", "27. On a close examination of the Act along with the First Schedule arid the rules, I do not find myself in a position to accept the petitioner's stand. It is true that the expression is not intended to include every article mentioned in the First Schedule, but at the same time it is also clear that the definition is not entirely dependent upon liability to pay duty for if that were so, the sub-section would not have mentioned the First Schedule. A reference has been made to both the First Schedule and to the liability in regard to the excise duty and they have been connected by the every significant words \"as being\". Giving effect to every word in the sub-section, its meaning appears to be that all goods which are subject to duty by virtue of being included in the First Schedule must be treated as excisable. The second part is merely descriptive. Whether a particular article is subject to duty or not by reason of any other provision does not appear to be relevant. What has to be seen is whether by reason of its being included in the First Schedule, it is subject to a duty or not. A reference to the Schedule indicates that Maida is still retained there as item 1 with the rate of duty as 10 paise per kilogram in column 3. It is, therefore, specified in the First Schedule as being subject to a duty and comes squarely within the definition. ", "28. Let us test the conclusion to which I have arrived above in the light of the argument addressed on behalf of the petitioner. It has been contended that on this view the words \"as being subject to duty of excise\" are rendered superfluous. The fallacy in this argument is that it is assumed that every item mentioned in the First Schedule is automatically subject to duty. It is not so. In Item No. 60, several articles are excluded from the duty and even before this item was included in the Schedule, there was other articles not subject to duty. Presently, against tobacco if used for agricultural purpose as mentioned in item 4(7), the rate of duty is mentioned as nil. In the past, Palmyra Sugar, now mentioned in item 1(3) earlier at one point of time as mentioned in item 8(3) also was not subject to duty. ", "29. I, therefore, do not find any substance in the first point urged on behalf of the petitioner. However, since the second question has been decided in its favour, the writ application succeeds."], "relevant_candidates": ["0000616577", "0001309362", "0001323341", "0001350547", "0001632366", "0001849088", "0132535791"]} {"id": "0000419395", "text": ["JUDGMENT , J. ", "1. This is an appeal by defendants 4 and 5 which arises out of a suit for partition. A preliminary decree has been made by the learned Subordinate Judge and the appeal is directed against that preliminary decree. The property which is the subject-matter of this appeal originally belonged to two brothers, and . died in the year 1900 leaving him surviving his widow and three sons. got his share partitioned in the year 1905. The three sons of purchased the share of , which had been partitioned previously by a conveyance dated 31st May 1922. On that very day the three brothers mortgaged the entire interest in the house to a third person, with which we are not concerned in this litigation. On 12th October 1923 these three brothers again mortgaged the property to defendant 5. On 1st September 1924 these three brothers again executed a second mortgage of this very property in favour of their mother. Defendant 5 brought a suit on his mortgage on 10th November 1924 and a preliminary decree was made on 22nd January 1925. In the meantime defendant 4 was appointed as Receiver by an order of the in accordance with the terms contained in the indenture of mortgage dated 12th October 1923. The Receiver remained in possession of the property on behalf of the mortgagors and the mortgagee. The present suit for partition was brought by one of the sons of on 17th April 1925 and two items of properties were included in his suit. There is no dispute with regard to item 1 with which the present appellants have no concern and the whole dispute centres round item 2 which had been mortgaged to defendant 5. During the pendency of this suit for partition a final decree in the mortgage suit of defendant 5 was made on 19th March 1925 and the property was sold on 7th August 1926 and purchased by defendant 5, as the lower finds and as is contended for on behalf of the respondent. But it is stated that there were other purchasers who were trustees with regard to some charitable trust : but that is a matter with which we are not concerned and this was not discussed in the below. The Receiver was discharged by order of the and defendant 5 took possession of the disputed property as purchaser. In the partition suit the two brothers of the plaintiff were defendants 1 and 2 and his mother was defendant 3; defendant 4 was Receiver and defendant 5 was the mortgagee and subsequently became the purchaser. ", "2. The question which is in debate in this and which was the subject-matter of dispute in the below is whether the mother is entitled to a fourth share of the property including property No. 2, according to the provisions of the Hindu Law, on a partition being made among the sons. There is one small matter which has not been much debated that a half share of the property is not the ancestral property of the brothers and therefore if the widow of is entitled to a share on a partition between her sons she would get a fourth share of item 2. But the real controversy is whether she would get any share under the circumstances of this case. The learned Subordinate Judge has held that the plaintiff and defendants 1 and 2 have got no subsisting right to property No. 2, which has been described as the-Strand Road premises, and their suit for partition with regard to that plot must fail. He has, however, made a decree to this effect that defendant 3, the mother,, would get a fourth share of both the properties Nos. 1 and 2 and the plaintiff and defendants 1 to 3 would each get a fourth share of the property No. 1. As I have already stated that assuming that the learned Judge is right, the lady would be entitled to get an Right share of the property No. 2. But it is contended on behalf of the appellants that under the circumstances of this case the lady would be entitled to get no share in property No. 2. Their case is that the principle of Hindu Law upon which the learned Subordinate Judge has relied is not applicable in this case and that his decision is, therefore, liable to be reversed. On behalf of the respondents-reliance is placed upon the well known case of v. [1900] 27 Cal. 77. In that case-, J., laid down the principle on which according to the Hindu Law the mother is entitled to get a share on a. partition made among the sons born of her womb of the property inherited from the father. The learned Judge after quoting the text from observes: ", "With reference to the above passage front the Dayabhaga, it has been held, and it must now be taken as settled law, that the mother right to claim a share arises only when her sons come to a partition, in other words that she cannot enforce her claim to a share so long her sons remain joint and do not ask for partition. But there is nothing said in this passage or in any other authoritative text of as to a mother's right to a share on partition being so absolutely non-existent before partition, that it may be defeated by any of her sons alienating his share before coming to a partition. ", "3. He then proceeds in this way: ", "In my opinion the correct view to take of this right would be to hold that it is an inchoate right as long as no partition is come to amongst the sons and it becomes actually enforceable only when the sons come to a partition ; or in other words that the right when it becomes enforceable by reason of a partition being come to among the sons, is [1900] 27 Cal. 77 enforceable not only as against the song, and as regards so much only of the joint property as at the date of partition is in the hands of the sons, but also as against any person deriving title from any of the sons and as regards the property to which they may have so derived title, subject to certain qualifications and limitations. ", "4. In that case during the pendency of the suit for partition by one of the sons another son sold his share in the joint property. It was held by the that by reason of the sale the interest obtained by the purchaser is subject to the rule of lis pendens and that he cannot stand on a higher footing than that of his vendor and when the partition is made, if his vendor was a party to the suit, the mother would get a share: that right cannot be defeated during the pendency of the suit by one of the sons transferring his interest in favour of a third party. This principle has been elaborated in a subsequent case 27 Cal. 551 where , sitting alone held that this principle is applicable where a stranger to the family purchases the interest of one of the sons and then seeks for partition of the joint family property. The question has again been discussed in the case of A.I.R. 1921 Cal. 351 by , But the principle has not been carried further than what was laid down by , In this case the appellants contend that he is entitled to the property by virtue of his purchase in the same state in which it was at the time of the mortgage or, in other words, that any subsequent alienation made by the mortgagor would not affect his interest. That proposition is uncontroverted. But if the mother could get any right in the present suit by reason of the partition, that would not be by the right created by the mortgagor but it would arise under the Hindu Law and I doubt whether the principle enunciated by the appellant would apply to such a case. In this case, in my opinion, the plaintiff had a right to bring the suit for partition at the time when he brought the suit. Although there had been a preliminary decree for partition the title of the plaintiff to his share of the property was not extinguished by that preliminary decree on mortgage but he had still a subsisting interest in the share of the property by reason of succession to his father. The plaintiff's right to bring the suit was not affected. The mother's right to claim a share, however, arises, as , laid down, only on a partition no matter whether the partition is made amicably or as the result of a decree by a suit The mere bringing of a suit for partition by one of the sons does not confer any right on the mother to have a share, according to the view expressed by , If the suit for partition is withdrawn the mother cannot claim any share, nor can she insist that the suit must be carried on to a decree. If the partition suit is dismissed by the for some reason or other, then the mother would not get any share in the property. It is only when the property is actually partitioned, the mother would get a share equal to that of her sons. She is not even a necessary party to the suit having no interest in the property when the suit is brought. She can only come in to watch the proceedings to safeguard her interest when the partition is effected. ", "5. Now, it is contended on behalf of the respondent that defendant 5 is bound by the rule of lis pendens as was applied in the case of v. Fulkumari Dassi [1900] 27 Cal. 77 cited above. The difficulty in this case is that that principle cannot be applied to this case. Here defendant 5 has acquired the interest of the plaintiff as well as the defendants who had interest in the property. It is a fundamental principle that a man ; cannot sue himself and the defendant standing in the shoes of the plaintiff with regard to this property cannot continue the suit for partition with regard to this very property. The plea therefore, must fall to the ground by reason of the purchase of defendant 5 and, as the learned Subordinate Judge says, the plaintiff and defendants 1 and 2 cannot ask for partition of property 2. That being so, the mother would not be entitled to any share of property No. by reason of the fact that her sons had no interest in the property and this property could not be the subject of partition. Whether she would have a charge for her maintenance against the property in the hands of the purchaser is another matter. That question cannot arise in a suit for partition and if she has any right, the question must be left open to be debated in a subsequent suit. ", "6. The result, therefore, is that the judgment and preliminary decree of the Subordinate Judge should be modified to this extent that the suit for partition with regard to property No. 2, i.e., the Strand road premises, should stand dismissed and, therefore, any claim of defendant 3 will also stand dismissed, and the appeal is allowed to this extent. The appellant is entitled to his costs from the respondent who has appeared, hearing fee being assessed at three gold mohurs. ", ", J. ", "7. I agree."], "relevant_candidates": ["0000218763", "0000266240"]} {"id": "0000431954", "text": ["JUDGMENT , J. ", "1. In pursuance of the directions of this court in T.C. P. No. 186 of 1984, dated December 4, 1934, , Madras, has referred the following question of law under section 256(2) of the Income-tax Act for the assessment year 1980-81 for our opinion : ", "\"Whether, on the facts and in the circumstances of the case, was justified in holding and had valid materials to hold that the assessee is entitled to the deduction under section 35B in respect of the commission paid to and also on its share of contribution paid to for participating in a trade exhibition ?\" ", "2. The question referred to us consists of two parts one regarding the claim of the assessee for weighted deduction in respect of the commission paid to , and another in respect of its share of its contribution paid to for participating in an international trade exhibition. ", "3. The assessee is a company and the assessee claimed weighted deduction under the provisions of section 35B of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), in its assessment proceedings for the assessment year 1980-81 and the claim of the assessee for weighted deduction in respect of the commission paid to , and another in respect of its share of its contribution paid to for participating in an international trade exhibition. ", "4. The assessee is a company and the assessee claimed weighted deduction under the provisions of section 35B of the Income-tax Act 1961 (hereinafter referred to as \"the Act\"), in its assessment proceedings for the assessment year 1980-81 and the claim of the assessee related to the following items of expenditure. ", "Rs. ", "1. Share of Australian office expenditure 12,000 paid to 2. Share of export promotion division 3,600 expenditure paid to 3. Commission paid to on export sales 4. Share of expenditure for participation 32,450 in Second Asian Automotive and Accessories Exhibition at Singapore --------- 65,480 --------- 1/3rd thereof Rs. 21,827. ", "5. The Income-tax Officer rejected the claim of the assessee for weighted deduction in so far as it related to the commission paid to , on export sales and the share of its expenditure for participation in Second Asian Automotive and Accessories Exhibition at Singapore on the ground that the assessee has not established the link between the expenditure and the items enumerated under section 35B of the Act. The assessee preferred an appeal before ) against the order of denying its claim for weighted deduction on the share of export promotion division expenditure and the commission paid to and on the share of the expenditure for participation in the second Asian Automotive and Accessories Exhibition. The Commissioner of Income-tax (Appeals) held that the commission paid to , was not covered by any of the provisions of section 35B of the Act, and further the commission was also paid in India and hence the assessee was not entitled to claim weighted deduction. In so far as the share of expenditure for participation in the Second Asian Automotive and Accessories Exhibition is concerned, he held that the assessee has not participated in the said exhibition and, therefore, the assessee was not entitled to claim weighted deduction. ", "6. The assessee carried the matter in appeal before . In so far as the claim of the assessee relating to the commission paid to is concerned, followed its earlier order passed for the assessment years 1976-77 and 1979-80 and held that the assessee is entitled to weighted deduction in respect of the commission paid to As regards the claim of the assessee for weighted deduction in respect of the share of expenditure in participating the Second Asian Automotive and Accessories Exhibition is concerned, the Tribunal has found that on the basis of the bills produced by the assessee, the assessee had participated in the exhibition and, therefore, the assessee is entitled to weighted deduction under section 35B of the Act in respect of the sum of Rs. 32,450 also. thus allowed the appeal preferred by the assessee as regards the two items claimed by the assessee for weighted deduction. ", "7. Mr. , learned counsel for the , submitted that the assessee is not entitled to weighted deduction in respect of both the items as the expenditure incurred cannot be brought in within in any of the items enumerated under section 35B of the Act and there is no nexus between the expenditure and the items mentioned under section 35B of the Act, and the assessee is not entitled to weighted deduction. He however, fairly brought to our notice an earlier unreported decision of this court in . 245 of 1984, dated February 11, 1997 - since reported at 240 ITR 59), wherein this court has held that the assessee was entitled to weighted deduction in respect of the commission paid to , Mr. , learned counsel for the assessee, submitted that the decision of this court in . 240 ITR 59 cited supra would apply to the commission paid to As regards the share of expenditure incurred by the assessee in the participation in the Second Asian Automotive and Accessories Exhibition is concerned, learned counsel for the assessee submitted that the assessee had participated in the exhibition by exhibiting its goods in the foreign country and thereby it has incurred an expenditure towards either advertisement or publicity of the goods or for obtaining information regarding the market outside India, and, therefore, the assessee is eligible to claim weighted deduction in respect of its share of expenditure incurred for participating in the exhibition. ", "8. We have carefully considered the submissions of learned counsel. In so far as the commission paid to is concerned, this court in . 240 ITR 59 cited supra rendered in the assessee's own case, has held that the assessee is eligible to claim weighted deduction in respect of the commission paid to This court in the above judgment has upheld the view of that the assessee was eligible for weighted deduction in respect of the said expenditure. We are of the view that since the facts prevailing in the earlier decision rendered in the assessee's own case are the same, we hold that was right in holding that the assessee is entitled to weighted deduction under section 35B of the Act in respect of the commission paid to ", "9. In so far as the claim of the assessee for weighted deduction in respect of his share of contribution paid to is concerned, the Income-tax Officer has not allowed the claim of the assessee on the ground that there was no nexus between the expenditure and the items enumerated under section 35B of the Act. The Commissioner of Income-tax (Appeals) disallowed the claim on the ground that the assessee had not participated in the said exhibition The order of the assessment clearly shows that the exhibition was held in a foreign country, viz., Singapore. on a perusal of the material came to the conclusion that the assessee had participated in the exhibition. The logical inference that flows from the above finding of is that the assessee had displayed its articles in the Second Asian Automotive and Accessories Exhibition held at Singapore and since there was a display of the assessee's articles in a foreign country, it would amount to either advertisement of its goods or publicity of its goods outside India. The purpose behind the act of the assessee in participating in the exhibition also shows that it was inviting trade enquiries about the assessee's products in the foreign country which would enable the assessee to obtain information regarding the markets outside India and it is significant to note that the expenditure was incurred only in connection with the export of the assessee's products. Since by the display of the goods made in an international exhibition there was a publicity or advertisement of its products eliciting information regarding markets outside India, we are of the view that the claim of the assessee would fall either under sub-clause (i) or sub-clause (ii) of clause (b) of sub-section (1) of section 35B of the Act. We are, therefore, of the view that there is no infirmity in the order of in holding that the assessee is entitled to weighted deduction in respect of the share of contribution by , when it participated in the international trade exhibition held in the foreign country. ", "10. We answer the question of law referred to us in the affirmative and against the . No costs."], "relevant_candidates": [""]} {"id": "0000432259", "text": ["JUDGMENT , J. ", "1. This is an appeal from a judgment of the Subordinate Judge of Burdwan whereby he affirmed a decision of the of the third Court at Burdwan. ", "2. The facts out of which these proceedings arose are stated by the learned in the early part of the judgment which he gave on January 15, 1934. ", "3. The present appellant had made an application under Section 47 of the Code of Civil Procedure. The present respondent had obtained a decree against the appellant for a certain sum for rent. The decree was dated July 26, 1930, and that decree was put to execution, and proceedings which were described as Rent Execution Case No. 252 of 1930 in at Burdwan, were started. Subsequently, on August 13, 1930, there was an agreement between the parties as to the method in which the decree was to be satisfied, or to put the matter in another way, there was an adjustment of the decree. By that agreement the amount due under the decree was made payable by certain instalments, and there was a provision in the agreement, for payment of interest at a certain rate. It also contained a provision that if the judgment-debtor failed to pay any instalment in proper time, the decree-holder would be entitled to realise the whole amount by means of execution proceedings. ", "4. In June, 1931, there were further proceedings in execution which were described as Rent Execution Case No. 305 of 1930. That case was disposed of on June 20, 1931. There were further execution proceedings being Rent Execution Case No. 53 of 1933, which were disposed of on July 25, 1933. In those proceedings the judgment-debtor filed an objection which was heard as Miscellaneous Case No. 39 of 1935, and finally the present proceedings were started on August 9, 1933. ", "5. At the hearing before the 3rd at , the applicant, that is to say the judgment-debtor contended that me present execution petition was barred by limitation and also by res judicata and that the solenama (or adjustment) which had been made in Rent Execution Case No. 252 of 1930 was not a part of the decree, and it was not legal, or valid or binding on the parties. It was further contended that the solenama was at the most a mere contract which could not be enforced in execution proceedings, but could only be enforced by means of a regular suit. The learned said in his judgment: ", "It appears that the rent decree passed on July, 26, 1930, was completely superseded by a solenama on August, 13, 1930. It further appears that the old rent decree being non-existent, was found not capable of execution. ", "6. Then follows this very important observation: ", "In the present execution case the decree-holder seeks to execute the solenama or the adjusted decree and not the superseded decree which has been extinguished by virtue of the solenama or adjustment. ", "7. It is obvious that there are no real merits in this case as regards the attitude adopted by the judgment-debtor or on the contentions pat forward on his behalf. It appears that at the time when the solenama was entered into, that is to say on August 13, 1930, a sum of Rs. 61 was paid by the judgment-debtor to the decree-holder, and after that nothing more whatever was paid and so on August 9, 1933, the present proceedings were instituted. The learned came to the following conclusion: ", "The solenama although it is an agreement, is binding upon the parties and is executable as a decree without recourse to any suit. ", "8. Then he said: ", "The period of limitation will run from the date of adjustment. ", "9. In support of that view he relied upon a decision of this Court in v. . ", "10. The Subordinate Judge on all material points agreed with the view taken by the learned , and he seems to have come to the conclusion that: ", "In the present case the varied the decree by noting the instalments in . ", "11. In the concluding paragraph of his judgment the learned Subordinate Judge said: ", "The last execution in which the decree-holder was trying to execute the original decree gave rise to an objection case by the appellant who contended that after the adjustment the original decree was no longer executable. The accepted that contention and nobody appealed against that order. ", "12. We have been invited by Mr. on behalf of the appellants before us to come to the exclusion that the decision of. Mr. Justice and Mr. Justice in the case I have just mentioned is no good law. In that case it was held that since the parties, by agreement, can arrange their own procedure and give jurisdiction to the to adopt that procedure, and since the parties agreed that the money due should be realised by execution, the -had jurisdiction to proceed by way of execution. That decision is based on a number of cases, notably the following: v. Attorney-General for Gibraltar (1874) 5 PC 516 : 22 WR 900 : 30 LT 729, v. 2 IA 219 : 24 WR 193 : 3 Sar. 519 : 15 BLR 383 : 3 Suth. PCJ 190 (PC), v. 20 C 22 and v. 11 A 228 : AWN 1889, 53. ", "13. There are, however, a number of authorities, chiefly it is true, in other and one or two in this , in which a contrary view has been taken and in my opinion it is extremely doubtful whether the proposition laid down in the case of v. (supra) is really good law. If in the present circumstances it was simply a question of our having to decide that whether in any circumstances it is possible for an agreement between the parties to supersede a decree of the and then to put it to execution as if it were itself a decree, it would be extremely difficult to hold that the parties can by an agreement substitute as it were a fresh decree in place of the original decree, or even vary the terms of the original decree. In our opinion, however, it is not necessary that we should decide that point, because in the present instance we are disposed to hold on the authority of a decision of the Full Bench of the Allahabad High in . in which a number of previous decisions were considered and reviewed, that in the circumstances of this case it was not open to the parties to extend by their agreement, the period of limitation laid down as applicable to execution matters. If in the present case the decree-holder had sought to put to execution the solenama within a period of three years from the date of the original decree then it would have been necessary to decide whether we ought to follow the judgment of Mr. Justice and Mr. Justice . But in the present instance it is clear from the dates that the present execution proceedings were instituted at a time when more than three years had elapsed from the date of the original decree. The original decree was made on July 26, 1930, and these proceedings were instituted in August, 1933, so that whether the matter falls within the provisions of the ordinary law of limitation or under the provisions of the Bengal Tenancy Act, it was outside the period prescribed. ", "14. In these circumstances while deprecating the attitude and action taken up by the judgment-debtor, we find ourselves forced to the conclusion that the decree-holder had lost whatever rights he possessed so far as enforcing her claim in execution proceedings. ", "15. In that view of the matter we come to the conclusion that this appeal must be allowed. But having regard to the circumstances we make no order as to costs. ", ", J. ", "16. I agree with my learned brother that this appeal should be allowed. ", "17. It was a rent decree obtained on July 26, 1920. In the first execution case there was an adjustment between the parties on August 13, 1930, by which the judgment-debtor agreed to pay the decretal amount by cert in instalments. The instalments not being paid, the decree-holder instituted a further execution case which the judgment-debtor opposed on. the ground that the decree had been superseded by the subsequent agreement. The accepted the judgment-debtor's plea and dismissed the execution petition. Thereafter the decree-holder instituted the present execution case on August 9, 1933, asking execution of the agreement of August 13, 1930. Both the s below held on the authority of the case of v. , that an agreement which superseded the original decree is executable as a decree. ", "18. Having regard to the various decisions of this and of other High s which have been cited before us, the question in my opinion in not free from difficulty, but it is, as my learned brother stated, not necessary to decide the question in this case. It is clear having regard to the provisions of Article 6 of Schedule Ill of the Bengal Tenancy Act, which limits the life of a rent decree to three years, that the present decree was barred on August 9, 1933 when the execution case was instituted. ", "19. I agree that the appeal should be allowed, and having regard to the conduct of the judgment-debtor no cost should be allowed to him."], "relevant_candidates": ["0001434001"]} {"id": "0000462163", "text": ["CASE NO.: Special Leave Petition (civil) 14833 of 1999 PETITIONER: NETAI BAG & ORS. Vs. RESPONDENT: THE STATE OF WEST BENGAL & ORS. DATE OF JUDGMENT: 27/09/2000 BENCH: & . JUDGMENT: ", "SETHI,J. ", "Leave granted. ", "L...I...T.......T.......T.......T.......T.......T.......T..J Claiming to be the champions to the cause of vegetarians, the Appellant Nos.5 and 6 along with the heirs of the erstwhile land owners, Appellant Nos.1 to 4 herein, moved by way of a writ petition, filed in public interest with prayer for the issuance of a writ in the nature of mandamus commanding the respondents to forbear from using or utilising the acquired lands for the purposes other than the one for which the acquisition was made. It was further prayed that directions be issued to give back the lands in question to the erstwhile land owners or to sell the land by public auction only for the public purpose. Prayer for the issuance of writ of prohibition was also made for restraining the respondents to use the land for slaughter house or abattoir by respondent No.5. Pending adjudication of the main petition an injunction was prayed for restraining the respondents from using or utilising any part or portion of land in question for any slaughter house/ abattoir and restraining the respondent No.4 from allowing respondent No.5 to establish or operate any slaughter house/ abattoir on the land in question. Vide order dated 25.5.1988, the learned Single Judge of dismissed the writ petition and the appeal filed against the order of the learned Single Judge was dismissed by of vide the judgment impugned in this appeal. ", "The facts leading to the filing of the present appeal are that by notification dated 22nd August, 1961 issued under the Land Acquisition Act , acquired land measuring 151.18 acres for a public purpose, namely, construction of Mourigram-Dankuni Link Project of South-Eastern . After completion of the project, the surrendered the surplus land measuring 77.36 acres to on 7.7.1972. On 12.5.1973, handed over the possession of 74.21 acres of the surplus land to , now . was authorised to set up on this land. In furtherance of the establishment of abattoir, a Memorandum of Understanding was signed between India and Australia by which agreed to provide assistance for the establishment of an abattoir, in the year 1977. The consultants of prepared a detailed three-volume Feasibility Report stating therein that was feasible. By that time had established another abattoir project at Durgapur which, after commissioning, was running into losses. The appellants apprehended that , in collusion with some outsiders, was negotiating to sell out and to transfer the land in fiduciary manner exclusively for a profit purpose allegedly to defraud and mislead the people of the . The private party referred to was , a Dubai based concern for the purposes of establishing a slaughter house/abattoir. Some correspondence ensued between the appellants and the respondents 1 to 4. It was contended that the respondents were encroaching upon the Constitutional Rights of the appellants by establishing a slaughter house/abattoir on the land acquired for a specified public purpose. It was submitted that after the completion of the project, the excess land should have been transferred to the land owners or sold in public auction but could not be utilised for any private purpose particularly for the establishment of a slaughter house/abattoir. The petitioners alleged that the establishment of the slaughter house/abattoir was not in conformity with List III Entry 17 of the Seventh Schedule of the Constitution. The action was further alleged to be contrary to List III Entry 17(B) and violative of the mandate of Articles 31(2), 48, 48A, 49 and 51 of the Constitution. The delay in filing Writ Petition was sought to be explained on the ground that respondents had allegedly kept the deal a guarded secret. ", "The disputed land comprises of an area measuring 46.42 acres, being part of the unutilised surplus land. It appears that realising its inability to profitably run the abattoir at Durgapur, was in search of some private party to take over the said abattoir along with the proposed Project of establishing abattoir at Mourigram. Newspaper advertisements appears to have been issued by in 1986, inviting private parties to take over the Durgapur Abattoir which is shown to be running in losses and for which the Comptroller & Auditor General had severely criticised the aforesaid vide its Report submitted in 1993. Respondent No.5 is stated to have been invited by vide letter dated 19th October, 1993 for taking over Durgapur Abattoir. In reply , a sister concern of respondent No.5 intimated that \"we are willing to take over the existing facilities at Durgapur on 'as is where is basis' at reasonable terms for subsequent development into an export oriented integrated complex\". On 22nd December, 1993 they informed the Minister concerned that to effectively utilise the State's agro based materials being livestock, fruits and vegetables, fresh water and sea fish in addition to milk based product, the concern proposed to create integrated food processing and preservation facilities. For that purpose, they promised that factory would be complete in accordance with the highest international standards and specifications for conversion and production of food products. They declared that the pulp of mango fruits besides mango slices and other fruits and vegetables from Bardhaman, Malda and Murshidabad Districts would be received at their proposed preliminary and processing centres to be set up in the Districts to ensure direct linkage with the farmers and for maintaining steady supply to their processing unit. Upon the suggestion of the Secretary, , the representatives of inspected the vacant plot of land at Mourigram and found the same to be suitable for their proposed venture. They desired that the entire site be leased out to them on a long term basis as per the standard terms of the concerned West Bengal Government at reasonable terms. On 14th January, 1994, the said concern was offered the land at Mourigram and Durgapur upon the following terms: ", "\"Through long-term lease for 99 years on realisation of 100% market value only. ", "2. Approximate market value at Mourigram has been assessed at Rs.1,92,800/- per acre for Danga/ Bastu/Bagan land, Rs.1,54,240/- per acre for 'Sali', Rs.77,120/- per acre for 'Doba', Rs.1000/- per acre for 'Khal'. ", "3. The market value in respect of Durgapur land will be communicated to you shortly. ", "4. If you do not use the land within a reasonable time for the purpose for which it is given, . will reserve the light suo moto to determine the lease.\" The offer was accepted by the company on 18th January, 1994 with intimation that the leased property shall be utilised for development of integrated multipurpose product food processing plants. The market value of the Durgapur land, building, plant and machinery was communicated to respondent No.5 on 1.2.1994 which was accepted the same day. On 25th February, 1994, granted approval to respondent No.5 for setting up of Mourigram and Durgapur Projects. On 2nd March, 1994, , Howrah was requested to furnish a report as to whether the entire 46.42 acres of land was fit for settlement for the proposed project and also to furnish the details of the land which would be fit for settlement by mentioning specifically the exact extent for each class and area involved. A decision was taken on 18.4.1994 for transferring the land to the respondent No.5 on long term basis, initially for a period of 99 years on payment of Rs.71,59,820.80. On 13th June, 1994, respondent No.5 was informed that possession of the land would be handed over after payment of the lease premium. Respondent No.5 is stated to have made the payment of Rs.87,27,000/- for the purchase of building, plant and machinery of Durgapur Slaughter House and on 13th July, 1994 and sum of Rs.71,59,820/- as lease premium for Mourigram Abattoir. The lease deed was executed between the parties on 9th June, 1995 on terms and conditions which were incorporated in Part II of the Schedule attached to the said lease deed. Feeling aggrieved, the appellants are stated to have filed the writ petition on 13.4.1998 without impleading respondent No.5 as party thereto. Respondent No.5 is shown to have been impleaded as party in the writ petition on 17th August, 1998. The writ petition was dismissed on 25th September, 1998 and appeal filed against it met the same fate on 10.5.1999, vide the judgment impugned in this appeal. , learned Senior Counsel appearing for the appellants has challenged the action of the respondent solely on the ground of arbitrariness and violation of Article 14 of the Constitution. He has contended that the largesse in the form of the land, the subject matter of the litigation has been bestowed upon respondent No.5 merely for a song without adhereing to the settled norms of fair play and equity. It is contended that the respondent , without issuing any advertisement or resorting to the procedure of auction and tender, has secretly leased out the land which has resulted in huge monetary loss worth crores of rupees to the exchequer. Elaborating the arguments, it was submitted that is not and should not act as free as an individual in selecting the recepient for its largesse, as has been allegedly done in this case. The Government cannot lay down arbitrary and capricious standards for choice of persons for the conferment of benefits. Referring to a host of documents, the learned Senior Counsel submitted that the arbitrary action of the respondent- is writ large in this case. The respondents are stated to have not satisfied either or this about their bonafides in initiating, processing and concluding the lease agreement with respondent No.5. Inviting our attention to the lease deed, the learned Senior Counsel submitted that the said document in fact was a sale deed in cloak of a lease agreement. The consideration of the sale deed has been termed to be \"on throw away price\". Conceding that the appellants had not made allegations of malafides against any one of the respondents, it is contended that though not actual but legal malafides are discernible from the pleadings of the parties and the record produced by them. Per contra , Senior Counsel who was followed by , Additional Solicitor General contended that the writ petition is not a bonafide action of the appellants. Four of whom are stated to be the erstwhile owners interested only to get back the land legally acquired from them. The petition is stated to be suffering from unexplained delay and latches. The appellants are stated to have not pleaded or argued the points including the plea of arbitrary action of the respondents before . It is submitted that in the light of the pleadings and the record produced before it, was justified in dismissing the writ petition filed by the appellants. The proposed setting up of the industry is stated to have provided job opportunities to more than 300 people and is likely to earn foreign exchange to the extent of Rs.50 crores per year. It is argued that there is no defect or error of law in the decision making process of by which the land has been leased out to respondent No.5. It is conceded that though the documents executed between the parties is styled as a lease deed, yet in fact it is a sale as the whole of the then prevalent market value of the land has been paid by the respondent No.5. The lease deed is stated to have been got executed for keeping interests of the alive in the land which in no way affects the public interest but in effect is adverse to the interests of the respondent No.5. The deed is stated to have been concluded on the basis of negotiations, a recognised method of transferring the property. The learned Single Judge formulated the three questions for his adjudication which read as under: \"(a)@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Whether the writ petitioner nos.3 to 6 can as a matter of right get back the land which was acquired from the predecessor in interest or not; ", "(b) Whether a property which has been vested under the Acquisition Act , 1894 can be dealt with and/or used by otherwise than public purpose or not; ", "(c) Whether granting of lease of a vested land to a private company for the purpose of industrial development and for earning foreign exchange is public purpose or not.\" ", "Learned counsel who appeared in for writ petitioners 3 to 6 conceded that his clients had no right to ask for return of the surplus land. Relying upon the judgments of this Court in [AIR 1977 SC 448] and [1997 (2) SCC 627, the learned Single Judge held that \"once the property has been vested unto the under Section 17 of the Land Acquisition Act, neither the previous owner nor their successors-in-interest can question the dealing and disposal of the property by the \". Referring to the decisions of this Court reported in [AIR 1986 SC 72 and AIR 1986 SC 910] and analysing the facts of the case the learned Single Judge held:- ", "\"There are enough materials placed before me which unmistakably substantiate that Mr.'s client has brought a promise and/or hope that at least 400 employed youths would be provided in this industry. This industry will also bring foreign exchange to the public exchequer nearly worth 40 crores per annum. It is now accepted position that one of the prime economic policies of this country is to earn foreign exchange as much as possible. So, in my view, when the utilizes a land in furtherance of development of industry and/or earning foreign exchange the same is nothing short of public purpose, notwithstanding a statement made in clause 16 of the lease deed. The statements made in clause 16 of the lease at best operate as admission. This admission however is displaced by the above fact to prove the fact of public purpose. My view has been expressed accepting the decision of case reported in AIR 1978 Pat.136. Moreover, here the instead of leaving the land being unutilised has gainfully utilized by granting long lease to Mr.'s client with a premium of Rs.71,59,820.80 which has gone to the exchequer.\" The construction of a slaughter house was also held to be a public purpose. In appeal, while upholding the judgment of the learned Single Judge, dealt with the submissions of the appellants to the effect that the land should have been sold by public auction, if after acquisition it was not used for any other public purpose by the . The Division Bench held that the surplus land in question need not have been sold in auction when the had declared to utilise the land by leasing out the same for 99 years in favour of Respondent No.5. Agreeing with the learned Single Judge, it was held by in appeal, that: ", "\"We are, however, of the opinion that this court is not at all required to be satisfied whether a surplus land has been utilised for a public purpose. After acquisition of the land in accordance with the procedure established by law a surplus land has vested in the free from all encumbrances. Article 298 empowers the to carry on any trade or business and make contracts for any purpose.\" ", "Finding that no allegations of malafide and discrimination had been pleaded in the petition, was held competent to enter into contracts with private persons for disposal of the property irrespective of the purpose of such acquisition or disposition subject only to the condition of compliance with the relevant provisions of the Constitution. The appellants were held to be having no locus standi to question the agreement executed between the respondent-State and the respondent No.5. ", "As noticed earlier, Dr., learned Senior Counsel appearing for the appellants has not challenged the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ legality or constitutionality of the lease agreement or the@@ JJJJJJJJJJJJ action of the respondent- on the grounds alleged in the writ petition. He has conceded that the erstwhile owners of the land had no right to ask for the return of the land to them. Similarly, , petitioner No.5 was not justified in seeking the relief of restraining the respondents from utilising the land for the purposes of abattoir at Mourigram. The sole point urged before us was with respect to the alleged arbitrariness of . To appreciate the only submission made before us we scanned the writ petition, the counter affidavit and the accompanying documents and found that no basis for such a plea was laid in the writ petition and the arguments addressed before were not referable to any pleadings. It is contended that as the issue had specifically been pleaded in the appeal before and has been urged in the grounds of appeal in this , a decision on the point was warranted, notwithstanding the absence of sufficient pleadings. We are not impressed with such an argument. Whether any advertisement was issued or not, or whether public auction or floating of tenders should have been dispensed with or not, are such matters which require pleadings in order to enable to explain or justify their action in the circumstances of the case. The appeal before of and in this being in continuation of the original proceedings in the form of writ petition, cannot enlarge the scope of inquiry at this belated stage. In the absence of specific allegations of the malafides attributed to any of the respondents, it cannot be said that mere violation of some alleged statutory provisions are safeguards as spelt out by this , would render the action to be arbitrary in all cases. To buttress his arguments, the learned counsel for the appellants submitted that as the land was transferred to respondent No.5 for a song and at throw away price, resulting in corresponding loss to the exchequer, it reflected the legal malafides and the arbitrary action of the respondents. The argument has to be noted to be rejected inasmuch as nowhere in their writ petition the appellants had alleged that the land had been sold at a throw away price. Referring to the lease agreement it is contended that as in fact transaction is sale under the cloak of lease, the legal malafides are writ large exhibiting the arbitration action of the respondents. Learned counsel appearing for the respondents have brought to our notice that in fact the value charged from respondents No.5 was the market value of the land and not lease money as urged. In this regard, in the counter affidavit filed on behalf of the respondent No.1 in this it is stated: ", "\"In order that the proper and correct lease premium and lease rent were arrived at a valuation of the land in question was caused to be made by the Special Land Acquisition Officer. By the memo no.49(c) dated 12th January, 1994 of the District Magistrate, Howrah, a copy whereof is annexed hereto and marked \"Annexure R1/8\", the valuation Report (in L.V. Case No.46/93) was forwarded to the Secretary, of the Government of West Bengal Officer. A photocopy of the said valuation report is annexed hereto and marked \"Annexure R1/9\". From the memo dated 12.1.94 it would be seen that a part of the land which was ultimately leased out to the respondent No.5 was under water and hence demarcation could be done only in respect of 30 acres of the land. On the basis of the said valuation the selami, i.e., lease premium, annual rent and cess payable by the respondent no.5 for the lease to be granted were calculated as per the circulars issued by for determination of land revenue and , West Bengal respectively, copies whereof are annexed hereto and marked Annexure R1/10. copy of the documents evidencing the manner in which the value of the lands at both Mourigram and Durgapur were arrived at and the lease premium, annual rent, cess etc., arrived is annexed hereto and marked Annexure R1/11. The lease premium so arrived at was of a sum of Rs.71,59,820.80 on the basis of the market value of the land then prevailing. The ground rent arrived at was RS.418/- per annum and cess Rs.296/- per annum without granting any concessions whatsoever. ", "From the above-mentioned valuation report of the Land Acquisition Officer, the manner in which the market value of the said land which was to be given on lease basis to the respondent no.5 for setting up of the above-mentioned project and the documents relied upon for the said purpose, which included five numbers of executed lease deeds as available in at Howrah for the year 1992 and applying appreciation percentage thereon, as well as the order of the Collector dated 29th April, 1993 in a land acquisition case were taken into account. The same clearly shows that, contrary to what had been alleged in the Special Leave Petition, the lease in question has been granted taking into consideration the market price of subject land on the relevant date.\" ", "The public purpose, which the had in mind has been spelt out in its affidavit as under: ", "\"In finalising the lease terms and conditions and the proposal of the respondent no.5, the fact that setting up of the said industry in the low lying land at Mourigram would not only provide employment to more than 300 persons (which estimate was provided even by , Australia in its feasibility study report carried out in the year 1983 as aforesaid) and indirect employment to large number of persons in West Bengal were taken into consideration. It was also taken into consideration that setting up an industry in such a semi-rural area in Mourigram, a Gram Panchayat area under Duillya Gram Panchayat of Zilla Parishad Howrah would help in industrialisation of the said area and consequently the State of West Bengal. The fact that the proposed unit would be an export oriented which would earn valuable foreign exchange of more than Rs.50 crores under export obligation in terms of the EPGC Scheme of where-under machinery and equipment for setting up the Project would be imported, as represented by the respondent no.5 during the course of negotiation, was also taken into account.\" ", "Learned counsel for the appellant has not referred to any statutory provision mandating the to adhere to a specified procedure in the matter of transfer of its property either by way of sale or by lease. In the absence of a statutory restriction imposed upon the , it is to be seen whether the impugned action is against public interest or actuated by extraneous considerations or is opposed to fair play or the is shown to have conferred undue benefits upon undeserving party. ", "It has been consistently held by this Court that in a democracy governed by the rule of law, the @@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Government or any of its officers cannot be allowed to@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJ possess arbitrary powers over the interests of the individual. Every action of must be in conformity with reason and should be free from arbitrariness. The Government cannot be equated with an individual in the matter of selection of the recepient for its largesse. Dealing with the limits on the exercise of authority in relation to rule of administrative justice, Mr.Justice in v. [(1959) 359 US 535: 3 L Ed 2d 1012] said: ", "\"An executive agency must be rigorously held to the standards by which it professes its action to be judged.... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. ...This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword.\" ", "This Rule of Administrative law, was accepted as valid and applicable in India by this Court in v. The State of Punjab & Ors. [1975 (3) SCR 82], . [1975 (3) SCR 619] and . [AIR 1979 SC 1628]. ", "Though the cannot escape its liability to show its actions to be fair, reasonable and in accordance with law,@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ yet wherever challenge is thrown to any of such action,@@ JJJJJJJJJJJJJ initial burden of showing the prima facie existence of violation of the mandate of the Constitution lies upon the person approaching the Court. We have found in this case, that the appellants have miserably failed to place on record or to point out to any alleged constitutional vice or illegality. Neither the High Court nor this Court would have ventured to make a rowing inquiry particularly in a writ petition filed at the instance of the erstwhile owners of the land, whose main object appeared to get the land back by any means as, admittedly, with the passage of time and development of the area, the value of the land had appreciated manifold. It may be noticed that in the year 1961 the erstwhile owners were paid about Rs.5.5 lakhs and the Government assessed the market value of the property which was paid by respondent No.5 at Rs.71,59,820/- The appellants have themselves stated that the value of the land round about the time, when it was leased to respondent No.5 was about Rs.11 crores. There cannot be any dispute with the proposition that generally when any land is intended to be transferred or the largesse decided to be conferred, resort should be had to public auction or transfer by way of inviting tenders from the people. That would be a sure method of guaranteeing the compliance of mandate of Article 14 of the Constitution. Non-floating of tenders or not holding of public auction would not in all cases be deemed to be the result of the exercise of the executive power in an arbitrary manner. Making an exception to the general rule could be justified by the executive, if challenged in appropriated proceedings. cannot be expected to presume the alleged irregularities, illegalities or unconstitutionality nor the courts can substitute their opinion for the bonafide opinion of the executive. The courts are not concerned with the ultimate decision but only with the fairness of the decision making process. ", "The Government is entitled to make pragmatic adjustments and policy decision which may be necessary or called for under the prevalent peculiar circumstances. The court cannot strike down a policy decision taken by the Government merely because it feels that another decision would have been fairer or wiser or more scientific or logical. . [1986 (4) SCC 566] it was held that the policy decision can be interfered with by the court only if such decision is shown to be patently arbitrary, discriminatory or malafide. In the matter of different modes, under the rule of general application made under the M.P. Excise Act, the Court found that the four different modes, namely, tender, auction, fixed licence fee or such other manner were alternative to one another and any one of them could be resorted to. . [1987 (2) SCC 295], it was held that as regards the question of propriety of private negotiation with an individual or corporation, it should be borne in mind that owned or public owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed, public interest being the paramount consideration. One of the methods of securing the public interest when it is considered necessary to dispose of the property is to sell the property by public auction or by inviting tenders. But such a rule is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule. As and when a departure is made from the general rule, it must be shown that such an action was rational and not suggestive of discrimination. In that case on facts the Court found that on the commercial and financial aspect, the lease granted in favour of a group of hoteliers, not arbitrary as the method of \"nett sales\" was held to be fairly well-known method adopted in similar situations. To the same effect is the judgment in . [1995 Supp. (2) SCC 512]. . [AIR 1980 SC 1992], this Court, after referring to various judgments, including the judgment in case, held: ", "\"It is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of law and if there is any transgression, the must be ready to condemn it. It is a matter of historical experience that there is a tendency in every government to assume more and more powers and since it is not an uncommon phenomenon in some countries that the legislative check is getting diluted, it is left to the as the only other reviewing authority under the Constitution to be increasingly vigilant to ensure observance with the rule of law and in this task, the court must not flinch or falter. It may be pointed out that this ground of invalidity, namely, that the governmental action is unreasonable or lacking in the quality of public interest, is different from that of mala fides though it may, in a given case, furnish evidence of mala fides.\" [1997 (7) SCC 592] this held: ", "\"Although to ensure fair play and transparency in State action, distribution of largesse by inviting open tenders or by public auction is desirable, it cannot be held that in no case distribution of such largesse by negotiation is permissible. In the instant case, as a policy decision protective measure by entering into agreements with selected industrial units for assured supply of sal trees at concessional rate has been taken by the . The rate of royalty has also been fixed on some accepted principle of pricing formula as will be indicated hereafter. Hence, distribution or allotment of sal seeds at the determined royalty to the respondents and other units covered by the agreements cannot be assailed. It is to be appreciated that in case, distribution by public auction or by open tender may not achieve the purpose of the policy of protective measure by way of supply of sal seeds at concessional rate of royalty to the industrial units covered by the agreements on being selected on valid and objective considerations.\" ", "It was further held that principle of reasonableness and non- arbitrariness in governmental action is the core of our entire Constitutional scheme and structure. On the facts of that case, the action of in granting a contract by way of negotiation was held not arbitrary or irrational. ", "In the backdrop of the legal position noticed herein, it has to be seen, in the instant case, as to whether the action of the respondent No.1 was illegal, arbitrary or malafide. To justify their action of entering into an agreement of lease by negotiation, even in the absence of pleadings on behalf of the appellants, the has submitted that the entire transaction of granting the lease to the respondent No.5 for an integrated food processing unit with an abattoir in a semi-rural area, which was a low lying land, despite their best efforts, the state Government were unable to set up any project. The lease was given to respondent No.5 upon consideration of all the facts and circumstances with the object of setting up an industry in the of West Bengal which was likely to generate employment to more than 300 persons and earn foreign exchange worth more than Rs.50 crores. The negotiations were resorted to ensure the disposal of the slaughter house at Durgapur which was proved to have been running in losses. The respondent- had failed to get any buyer for Durgapur Project despite Newspaper advertisements. The Government had decided to make a package deal for the purposes of transferring the Durgapur Project and establishment of . Earlier a memorandum of understanding had been arrived at between and Australia which ultimately did not mature in the shape of an abattoir. Due to financial constraints, continuous loss suffered at Durgapur and lack of technical expertise, the respondent- could not venture to undertake the for setting up of an abattoir. Having failed in all its efforts, the then Minister-in-charge of of is stated to have written to some Bombay based firms, reputed in the field, to salvage the two projects. Positive response is stated to have been received from some firms including , namely, respondent No.5 and . The proposal of being very vague was not accepted. had shown interest in taking over both Durgapur & Mourigram sites under certain terms and conditions for the purpose of revitalising and making operational the existing abattoir at Durgapur and for setting up of along with abattoir at Mourigram. It is further stated in the counter-affidavit of the respondent-, that:- \"Since, no response was received from the advertisements and the personal requests made in the manner above by the Minister-in-charge of the Department from any concern except as aforesaid, the took into account the credentials of the group of companies of which , was one, including the export award certificate awarded to for outstanding contribution for promotion of agricultural and processed food products during the year 1992-93 as proof of their excellence in their field and thereupon proceeded to finalise the lease terms and conditions under which inter alia the Mourigram land would be leased out to the respondent No.5 for setting up of an integrated food processing unit along with an abattoir, products whereof could be exported as well as sold in the of West Bengal. alongwith its associated companies was the first company in India to export 1000 million rupees on agricultural and process food products (in 1992-93). (), , India, had acknowledged and certified the efforts of and its associated companies in the export of Meat and other agro products such as rice, tea, coffee, spices, onion, cashew, pulses extractions, marine products and processed Food and vegetable.\" ", "In view of the peculiar facts and circumstances of the case we are not persuaded to hold that the action of the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ respondent- in executing the lease deed with respondent@@ JJJJJJJJJJJJJJJJJJJ was unreasonable, illegal, arbitrary or actuated by extraneous considerations. In this regard it is worth noticing that none except the erstwhile owners and the propounders of vegetarianism have made any grievance to the effect that the market value of the property, as charged from respondent , was either allegedly for a song or at a throw away price. The inaction of the appellants in approaching the , almost after three years of the impugned lease deed is an additional circumstance to doubt their bonafides in challenging the impugned action. During the pendency of the litigation between the parties, a huge project has actually, by now, come into existence where the production has also commenced. Respondent is claimed to have spent a sum of Rs.73.01 crores as of 30.10.1999 on the project. Interference at this stage will not only adversely affect the business of respondent but would also render a large number of people unemployed and deprive the its cherished desire of developing the industrial growth. ", "Under the circumstances, we do not find any ground to interfere with the impugned judgments or the action of the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ respondent-State in granting the lease to respondent No.5.@@ JJJJJJJJJJJJJJJJJJJJ The appeal is accordingly dismissed but without any order as to costs."], "relevant_candidates": ["0000186428", "0000320843", "0000447441", "0000497388", "0000974148", "0001281050", "0047808634"]} {"id": "0000469863", "text": ["JUDGMENT , J. ", "1. This is a petition under Article 226 of the Constitution arising out of proceedings under the U. P. Consolidation of Holdings Act (hereinafter referred to as the Act). ", "2. One Smt. died leaving some grove and agricultural plots which she had inherited from her husband. She had acquired Bhumidhari rights in respect of the agricultural plots before her death. During the consolidation proceedings , moved an application before claiming that as Smt. had died heirless her entire holding vested in . The original petitioners and filed objection laying claim to the estate of the deceased widow on the basis of:-- ", "(i) inheritance being her husband's brother's son's sons: ", "(ii) Will executed by Smt. Dhanraj Kuer on 12-10-1962 in favour of : ", "(iii) Registered sale-deed dated 4-4-1963 executed by Smt. in respect of her entire holding including groves in favour of the petitioners. The petitioners' objection was rejected and the claim of was upheld. The appeal filed by the petitioners was dismissed by the Settlement Officer (Consolidation) and their revision under Section 48 of the Act was also dismissed by the Deputy Director of Consolidation by his order dated 26-3-1966. The petitioners then moved the present writ Petition. ", "3. When the Writ Petition came up for hearing before , J., he noticed that one of the questions that arose in the case was as to whether the widow was competent to transfer the whole of her agricultural holding without the prior permission of the Settlement Officer (Consolidation) as required by Section 5 (1) (c) (ii) of the Act. ", "4. Section 5 (1) (c) (ii) of the Act enacts that no tenure-holder, except with the permission in writing of the Settlement Officer (Consolidation) previously obtained shall transfer by way of sale, gift or exchange any part of his holding in the consolidation area. Full Bench of this court in at Hardoi, AIR 1971 All 87 (FB), has taken the view that the expression \"any part of his holding\" did not include the entire holding so that the ban applied only where a part of holding was transferred and not when the holding was transferred as a whole. ", "The learned Judge noticed the Hindi version of Section 5 (1) (c) (ii) of the Act which reads: ", "\"NA CHAKBANDI KSHETTRA ME SAMMILIT APKI JOT ATHWA USKE KISHI BHAG KO VIKRAYA DAN ATHWA BINIMAY DWARA HASTAN-TRIT KAREGA.\" ", "According to the Hindi version the ban would apply as much to the transfer of a part of the holding as to the whole. In his opinion the words in the English version were not clear and it was possible to interpret them in accordance with the Hindi version of the enactment. He accordingly referred the matter to and that is how this petition has come up before us. ", "5. To begin with, we might state that although the learned Judge has not indicated as to whether the entire case has to be decided by or only the question relating to the interpretation of Section 5 (1) (c) (ii) of the Act, yet having regard to the fact and the circumstances of the case the intention of the learned Judge was to refer only the limited question relating to the interpretation of Section 5 (1) (c) (ii) and not the whole case, because even if the petitioners fail on this ground their alternative pleas will have to be examined. We shall accordingly restrict ourselves to the short question as to whether the ban incorporated in Section 5 (1) (c) (ii) applies to the transfer of an agricultural holding as a whole or applies only when a part of the holding is transferred. Clause (c) of Section 5 (1) was added in the Act by Section 4 of the U. P. Consolidation of Holdings (Amendment) Act, 1958 (U. P. Act XXXVIII of 1958) and reads as under:-- ", "\"(c) Notwithstanding anything contained in the U. P. Zamindari Abolition and Land Reforms Act, 1950, no tenure-holder, except with the permission in writing of the Settlement Officer Consolidation previously obtained shall- ", "(i) Use his holdings or any part thereof for purpose not connected with agriculture, horticulture or animal husbandry including pisciculture and poultry farming; or ", "(ii) transfer by way of sale, gift or exchange any part of his holding in the consolidation area; ", "Provided that a tenure-holder may continue to use his holding, or any part thereof, for any purpose for which it was in use prior to the date specified in the notification issued under Sub-section (2) of Section 4 .\" ", "It may at once be noticed that Clause (ii) is flanked by Clause (i) and the proviso at the end of Clause (ii). Clause (i) and the proviso deal with the ban on non-agricultural use of a holding while Clause (ii) imposes a ban on the transfer of a holding. In Clause (i) the expression used is \"holding or any part thereof\". The same expression is used in the proviso, which in fact, is a proviso to Clause (i) so that ban on the user of agricultural holding for non-agricultural purpose extends to the holding as a whole as also to a part thereof. But when we come to Clause (ii) the expression used is \"any part of his holding\". Obviously the ban contemplated under Clause (i) is not co-extensive with the ban contained in Clause (ii) otherwise there is no reason why the expression \"holding or any part thereof\" should not have been used in Clause (ii) also. The expression \"holding or any part thereof\" is not synonymous with the expression \"any part of the holding\" if regard is had to the jurisdiction of Clause (ii). If Clause (ii) had stood alone it could be possible to interpret the expression \"any part of the holding\" as meaning every part of the holding. But having regard to the terminology employed in the preceding clause and the succeeding proviso, no other meaning can be assigned to it except that it means \"a part\" as distinguished from 'the whole': It is true that grammatically, the expression \"a part\" would have been more apt than the expression \"any part\". But when the intention of the is clear, nothing will turn upon this grammatical error. According to the dictionary meaning also \"any\" is sometimes used for the adjective \"a\". It is not necessary, however, to dwell upon this point any further because the question has been the subject-matter of previous decisions of this court which have unanimously interpreted the expression \"any part\" to mean \"a part\". The first decision is of , J., in , 1966 All WR (HC) 818 His Lordship held that the prohibition in Clause (ii) of Section 5 (1) (c) extended to the transfer of a part of the holding and not to the whole holding so that the whole holding could be transferred by a tenure-holder without the permission of the Settlement Officer (Consolidation). This decision has been affirmed on special appeal by , and , J., in v. , 1968 All LJ 223. The question was again considered by another of which two of us were members in the case Smt. , AIR 1971 All 87 () when the view taken in the earlier cases was affirmed. There is yet another decision of a of this court consisting of , , and , JJ., in , 1970 RD 130. agreed with the view taken by the earlier in the case of Smt. (). Thus so far this court is concerned, the matter stands concluded. ", "6. If one has regard to the object underlying the provisions in question it becomes quite clear as to why the ban in Clauses (i) and (ii) is not co-extensive. The object underlying Clause (i) is to preserve the land for agricultural purposes and that is why a complete ban has been placed on the use of the land for non-agricultural purposes. A ban on a part of the land only would not have served the purpose. Under Clause (ii) the ban was intended to prevent the fragmentation of holdings and, as such, it was placed only on a transfer of a part of the holding. There could be no objection to the transfer of the holding as a whole because if would not involve fragmentation but would involve only a change in ownership. The scheme underlying the Act was to consolidate agricultural holdings and to prevent their further fragmentation and also to preserve the land for agricultural purpose. It was not the intention to restrict the right of an owner to deal with his property by way of sale, exchange or transfer except to the extent that was necessary to carry out the objects of the Act. That is why a ban of a limited nature has been placed on transfers while a complete ban has been placed on the user of agricultural land for non-agricultural purposes. Having regard to all these circumstances it is not possible to take a different view. ", "7. The learned counsel for the petitioners submitted that the law having been settled by a series of decisions of this court it should not be unsettled by taking a different view as it would lead to a lot of confusion and give rise to a spate of litigation. For this he relied upon the decision of in , AIR 1973 SC 291 where it has been observed: ", "\"............ to take a contrary view from the law laid down would have the effect of unsettling the law established for a number of years. In the matter of interpretation of a local statute the view taken by over a number of years should normally be adhered to and not disturbed. A different view would not only introduce an element of an uncertainty and confusion, it would also have the effect of unsettling transactions which might have been entered on the faith of those decisions. The doctrine of stare decisis can be invoked in such a situation.\" ", "There is a lot of force in this contention also but it is not necessary to invoke the doctrine of stare decisis, because we are of the firm view that there is no ambiguity whatsoever in the language in which this provision is couched and having regard to all the facts and the circumstances of the case it is not possible to interpret it differently. ", "8. It is no doubt true that the Hindi version is in conflict with the English version. The Hindi version expressly says that the ban shall apply to the holding as a whole as also to a part thereof. The question arises as to whether in such a situation we should give preference to the English version or to the Hindi version. For this purpose we have to turn to Article 348 of the Constitution. It is necessary to reproduce that Article. It enacts:-- ", "\"348 (1) Notwithstanding anything in the foregoing provisions of this Part, until by law otherwise provides- ", "(a) all proceedings in and , ", "(b) the authoritative texts- ", "(i) of all Bills to be introduced or amendments thereto to be moved in either or in the or either of the Legislature of a State. ", "(ii) of all Acts passed by or the of a State and of all ordinances promulgated by the President or the Governor of a State, and (iii) of all orders, rules, regulations and bye-laws issued under this Constitution or under any law made by or the of a State, shall be in the English language. (2) Notwithstanding anything in Sub-clause (a) of Clause (1) the Governor of a State may, with the previous consent of the President, authorise the use of the Hindi language, or any other language used for any official purpose of the State, in proceedings in the having its principal seat in that State: Provided that nothing in this Clause shall apply to any judgment, decree or order passed or made by such . ", "(3) Notwithstanding anything in Sub-clause (b) of Clause (1) where the of a state has prescribed any language other than the English language for use in Bills introduced in, or Acts passed by, the of the State or in Ordinances promulgated of the Governor of the state or in any order, rule, regulation or bye-law referred to in paragraph (iii) of that sub-clause, a translation of the same in the English language published under the authority of the Governor of the State in the official Gazette of that State shall be deemed to be the authoritative text thereof in the English language under this Article.\" ", "Under this Article two things have been provided. Firstly all proceedings in and in have to be in the English language except when under Clause (2) the Governor of a State with the previous consent of the President authorises the use of the Hindi language or any other local language in proceedings in of that State. We are not concerned with that question in this case. Secondly the authoritative text of all Bills and Acts of the and of has to be in the English language. However, s are authorised to prescribe any language other than the English language for this purpose, but, in such an event Clause (3) provides that a translation in the English language of any Bill introduced in or Act passed by in a language other than the English language has to be published under the authority of the Governor of the State in the Official Gazette of the state and such translation shall be deemed to be the authoritative text of such a Bill and Act. ", "Whenever a question arises as to what is the authoritative text of a particular Act or an Ordinance etc., of one has to turn to its English translation if ii was enacted in a language other than the English language. The authoritative text of a Bill, Act or Ordinance of cannot be in a language other than the English language unless the by law otherwise provides. Thus the power to declare that the authoritative text of any Ordinance, Act etc., of a State Legislative shall, be in a language other than the English language has been vested exclusively in the . The has not made any such provision so far. The official language of the State of Uttar Pradesh is Hindi, so that can pass Ordinance, Acts etc., in the Hindi Language. Thus even though the U. P. Consolidation of Holdings Act was passed by in Hindi, yet its translation in the English Language shall be regarded its authoritative text and shall prevail over its Hindi version. ", "9. The learned Counsel for the respondents referred to Articles 345, 346 and 347 of the Constitution. Article 345 makes a provision for official language of a and provides that may by law adopt any one or more of the languages in use in the or the Hindi as the language or languages to be used for all or any of the official purposes. Article 346 makes a provision about the official language for communication between one and another or between a and the Union. In Article 347 a provision has been made that on a demand being made the President may direct that a language other than the English language shall be officially recognised in a or any part thereof for such purposes as may be specified. These Articles have no bearing upon the question before us. We are not concerned with the official language of a but are concerned with the question of the language in which the Bills and Acts have to be passed by a Legislature and that subject has been specifically dealt with in Article 348 , which provides that notwithstanding anything in the foregoing provisions of this part of the Constitution, all Acts etc., shall be in the English language. It is thus clear that the provisions contained in Articles 345, 346 and 347 are subject to the provisions contained in Article 348. ", "10. The other argument is that in Clause (3) of Article 348 the use of words \"notwithstanding anything in Sub-clause (b) of Clause (1)\" suggests that this clause will override Clause (1). This interpretation is not correct. It only means that may prescribe any language other than the English Language for use in Bills introduced in or Acts passed by and that Clause (1) (b) shall not create an impediment in its way. As we have already indicated above, when a Bill is introduced or an Act is passed in a language other than the English language by , an authoritative translation thereof in the English language has to be provided and that translation shall for the purposes of Clause (1) (b) be deemed to be the authoritative text thereof. Indeed, it will be beyond the competence of to provide that the authoritative text of its Act and Ordinance etc., shall be in a language other than the English language, because such a power vests only in the . Thus, when there is a conflict between the English version of a Statute of and its version in a local language, the version in English language will prevail over the version in the local language. of this court in ., AIR 1954 All 257 while referring to Article 348 of the Constitution has at page 278 in paragraph 83 observed:-- ", "\"In view of this provision of the Constitution the notification appearing in English must prevail over the notification appearing in Hindi.\" ", "A of this Court in , AIR 1962 AH 240 (FB) has held that in U. P. after the passing of the U. P. Act s No. 1 of 1950 (U. P. Language Bills Act) and 26 of 1951 (U. P. Official Language Act) has prescribed Hindi as the language for the official use in the , and both, the Hindi version as also the English translation of a Bill or Act etc., published in are valid and authorised and both of them can be looked into and put to official use. There is no competition between the two. It is only in case of conflict or divergence between the two versions that the English version may reign supreme and supersede the Hindi one. Following this decision a learned Single Judge in , AIR 1965 All 170 has held that although Hindi was the official language of the of U. P., in case of divergence between the Hindi and the English versions, of the official gazette the English version reigned supreme and superseded the Hindi version. The same view has been taken by in , AIR 1966 Raj 142 and in v. (Sales Tax), AIR 1958 Madh Pra 16. ", "11. This being the position we are clearly of the opinion that in the present case it is the English text which shall prevail over the Hindi version and according to the English text the expression \"any holding\" occurring in Clause (ii) of Section 5 (1) (c) of the Act does not include the \"Whole holding\" so that it is not necessary to obtain the permission of the Settlement Officer (Consolidation) for the transfer of the holding as a whole. ", "12. With this answer, we direct the writ Petition to be placed before a learned Single Judge for disposal."], "relevant_candidates": ["0000056603", "0000777513", "0000857581", "0000973037", "0001297969", "0001365275", "0001596363", "0001822801"]} {"id": "0000504870", "text": ["JUDGMENT , C.J. ", "1. This is an execution appeal by judgment-ebtors. A compromise decree fixing the payments of certain instalments on specified dates was passed. The decree further provided that in case of default of two consecutive instalments the decree-holder would have the right to recover the whole amount by execution. The dates fixed for payment were : 6th June 1925, 13th June 1926, 15th June 1927, 3rd June 1928, 22nd June 1929, 11th June 1930, 31st May 1931 and 18th June 1932. ", "2. The decree-holder filed the present application on 21st May 1931 in which he mentioned all the instalments but separated the first three from the rest by means of cross-marks. He did not indicate in his application that it was his case that these instalments were barred by time or that they had been paid, but it is a fact that he did not ask for recovery of these instalments. The judgment-debtors took objection that the application was barred by time because the right to apply accrued when the second default was made in 1926. The decree-holder replied by filing an application alleging that he had received payment of the first three instalments. The below have found that the first three instalments were in fact paid and that there was no default. The lower appellate Court has accordingly allowed the appeal for execution for all the instalments except the last one as to which the application was not pressed by the decree-holder. ", "3. The judgment-debtors have come up in appeal and reiterate their plea of limitation and further urge that it was not open to the s below to go into the question of the payments out of . ", "4. It has to be conceded on behalf of the decree-holder that the payments alleged to have been made by the judgment-debtors out of were not certified in or recorded by the prior to the filing of the objection of the judgment-debtors. It was held by all the Judges in the case of v. Sriohand A.I.R. 1928 All.629, that if a statement purporting to certify a payment out of is made by the decree-holder after the controversy had arisen it cannot have the force of a certificate. It is impossible to hold that the mere placing of certain cross-marks after the first three instalments amounted to any intimation to the that the decree-holder was certifying payment of those instalments. The idea did not seem to have struck the decree, holder till some time after the objection was filed by the judgment-debtors alleging that no payments had bean made and the application for execution itself was barred by time. It must accordingly be held that these payments had never been certified within the meaning of Order 21, Rule 2, Civil P.C. and therefore the execution cannot take cognizance of any such alleged payments. The s below therefore were not justified in enquiring into this matter. When these alleged payments are to be altogether ignored it must be assumed that no payments were in fact made. It would follow that it must be presumed that the judgment-debtors had made default in the payment of the first three instalments. ", "5. The next question is whether the present application is barred by time. The application can be split up into two parts. The first relief being for the recovery of the instalments of 1928, 1929 and 1930, and the second for the recovery of the subsequent instalments, one of which was later on not pressed for. As noted above, the application is for execution of a decree of which fixes certain instalments. So far as the instalments of 1928, 1929 and 1930 are concerned, dates were specified in the decree on which they had to be paid. It is therefore impossible to take the case out of Article 182(7 ), Limitation Act . Under that sub-clause an application for execution, where the application is to enforce any payment which the decree or order directs to be made at a certain date, must be made within three years from such date. The clause applies in express terms to the application for execution so far as these three instalments are concerned and it is not possible to take it out of that clause. In these circumstances the residuary Article 181 would not apply at all to these three instalments. ", "6. It is however contended on behalf of the appellants that inasmuch as the right to apply accrued on the occurrence of the second default in 1926 and the decree-holder became entitled to recover the whole amount, time began to run in respect of the instalments from that date and the whole claim is now barred by time. ", "7. This question came up for consideration before a Full Bench of this Court in A.I.R. 1928 All. 629 of which both of us were members. The opinion of the majority of the Bench was that the Words \"at a certain date\" in Clause (7) of Article 182 meant a specified date and would not be wide enough to include any date of default not specified. It was accordingly held by the majority that when a default clause of this kind is sought to be enforced the appropirate article would not be Article 182(7) but the residuary Article 181. And air the three Judges took the view that so far as the instalments which had already fallen due were concerned the appropriate article was Article 182(7). It was only as regards the remaining unpaid balance in respect of the instalments which had not yet fallen due that two of the Judges thought that Article 181 applied. The view of the majority accordingly was that it was not necessary to enforce the default clause in order to recover instalments which had already fallen due and that an application for recovery of such instalments would be governed by Article 182(7) and would be in time if filed within three years of the dates of the various instalments. An application for recovery of instalments more than three years old would be beyond time unless there was an acknowledgment or payment sufficient to save limitation. But as regards the future instalments not yet fallen due and which were not yet recoverable unless the default clause was enforced the appropriate article was Article 181 and time would begin to run from the date when the right to apply accrued. ", "8. The further question as to the date from which the time under Article 181 would begin to run, namely, whether from the date when the right to apply accrued on the first occasion or from the date when it accrued on the last occasion did not directly arise in the case because all the instalments had fallen due before the application for execution was made. , J., did not deal with this aspect of the case because he was of opinion that Article 181 did not apply at all. On p. 980 (of 26 A.L.J.) I remarked: ", "In such circumstances the application for the recovery of the amounts of instalments which fell due more than three years prior to the application would, unless it was saved by Sections 19 or 20, be barred by time; but the application would still be within time as regards those instalments which fell duo within three years, in spite of a default clause. As the dates fixed for all the instalments had expired before the application for execution was made, there; was no necessity for the decree-holder to enforce the default clause. His application is substantially one for recovery of the total amount of the instalments fallen due together with interest. ", "9. I further pointed out that the case would be different if the claim were to enforce the default clause before the dates fixed for the subsequent instalments had arrived. In my separate-judgment I did not deal with the question whether time would begin to run from the date when the right to apply first accrued or from any subsequent accrual of a similar right. , J., seems to have held at p. 989 that Article 181 would apply to an application for execution in respect of the future instalments, but further added that the right to apply would accrue on the first date of default and again on the occurrence of each default in respect of that and the previous default. Thus, in the separate judgments that were delivered only one Judge had expressed the opinion that there would be successive accruals of the right to apply the other two did not express any opinion at all. In the opinion of the which was expressed at the end of the judgment and which was the opinion of the only Judge who had expressed it, it was accordingly mentioned that if the application is one for the remaining unpaid balance of the decretal amount under the second part of the decree (default clause) it is not governed by Article 182 at all, but by Article 181 and limitation will run from the date of any two successive defaults, the decree-holder being entitled to a decree for the whole of the balance due less the amount of any individual instalments, which regarded as individual instalments are not already barred by limitation. ", "10. It is quite clear therefore that Article 181 in the opinion of all the Judges of would not apply to the application for recovery of instalments of 1928, 1929 and 1930 in the present case. The application having been made after the instalments had fallen due the appropriate article is Article 182(7); the application for the recovery of this amount therefore was well within time. As regards the future instalments the decree-holder did not press his application for the instalments of 1932, but the lower appellate Court has ordered execution in respect of the instalments for 1931 which would have fallen due on 31st of May of that year. The application however was made 10 days earlier and was therefore premature unless the default clause can be enforced. The condition in the compromise decree already referred to laid down that the decree-holder would have the right to recover the whole amount on the occurrence of two successive defaults in the payment of instalments. There had been a considerable difference of opinion as to whether it is open to a creditor to waive his right to recover the whole amount where an option is given to him in case of default. So far as the right to sue for recovery of mortgage money is concerned it is now governed by the pronouncement of their Lordships of in A.I.R. 1932 P.C. 207 in which their Lordships have clearly pointed out that a fixed term for a mortgage transaction may be as much for the benefit of the mortgagee as for the benefit of the mortgagor and that it is impossible to hold that a mortgagor can, by making default, make the mortgage money become due within the meaning of Article 132 , Limitation Act , before the expiry of the fixed period. Their Lordships held that a mortgagor could not take advantage of his own default and claim a right to redeem before the expiry of the period and that therefore the mere fact that there was an option given to the mortgagee for his own benefit to sue for the whole amount would not make the money become due so as to make the time run against the mortgagee. But in the latter portion of the judgment their Lordships also pointed out that: ", "If in the Indian cases the question ware 'when did the mortgagee's cause of action arise?' i.e., when did he first become entitled to sue for the relief claimed by his suit their Lordships think there might be much to be said in support of the Allahabad decision. ", "11. The Allahabad view, as expressed in two previous cases of 189 and v. Meherban A.I.R. 1923 All. 1 was that time began to run from the date when the mortgagee first become entitled to exercise option no matter whether he chose to exercise it or not. This view has been definitely overruled by their Lordships of , but their Lordships seem inclined to the view that if in the Indian cases the questions were \"when did the mortgagee's cause of action arise?\" the Allahabad view might well be correct. It seems to me that the expression \"right to apply accrues\" is more emphatic than the expression \"cause of action arises.\" If the date when the cause of action arises is to be considered to be the first date when one becomes entitled to sue for the relief claimed by him then the date when he becomes entitled to apply is certainly the date when the right to apply by way enforcing the default clause accrued to the mortgagee when on the first occasion there was a default in the payment of two successive instalments, namely, in the year 1926. It is true that he did not then apply for execution claiming the whole amount, but certainly had the right to apply and so it cannot [be said that the right to apply did not accrue. The result would be that so far as the remedy for the enforcement of the default clause in the compromise decree is concerned it became time-barred after the expiry of three years from 13th June 1926. It is no longer open to the decree-holder to claim the recovery of future instalments merely because in some future years there has again been a default in the payment of two successive instalments. This however does not mean that his remedy to recover the instalments as and when they fall due is also equally barred. I have already pointed out that the application for execution of the decree for recovery of these instalments for which dates have been specified in the decree is governed by Article 182(7). As remarked by me on p. 980 (of 26 A.L.J.) in case A.I.R. 1928 All. 629 the application is still within time as regards these installments which had fallen due within three years \" in spite of the default clause. \" I would accordingly hold that the application for the recovery of the instalments for 1928, 1929 and 1930 is within time, whereas the application for the recovery of the instalment for 1931 was premature, I would accordingly allow the appeal in part. ", "Mukerji, J. ", "12. I entirely agree with the Hon'ble the Chief Justice, but having regard to the importance of the points raised in this appeal and having regard to the fact that points, similar to the one before us, arise very often in execution of instalment decrees, I would like to add a few words. The facts of the case are stated in the judgment of the learned Chief Justice and briefly they may be reiterated as follows : An instalment decree was passed on 12th May 1924 in favour of the respondent. It can after mentioning the several dates fixed for payment for instalments, as follows: ", "In the case of default in the payment of two successive instalments, the decree-holder would be entitled (decreedar ho ikhtiar hoga) to realize the entire balance of his decretal amount, irrespective of the fact whether or not instalments have fallen due, by execution of the decree. ", "13. The decree-holder applied for execution in respect of the last five instalments. He did not say in respect of the first three instalments whether they had been paid or not. \"When the application for execution was made the judgment-debtors objected that they had never made any payment and the application was time-barred, inasmuch as the right to apply for execution accrued to the decree-holders on 13th June 1926. On this the decree-holder came forward with an application stating that he had received the first three instalments. The Courts below have found as a fact that the first three instalments were paid by the judgment-debtors. Having regard however to the decision of the case in v. Sriahand A.I.R. 1928 All. 629 it was not open to the decree-holder to certify payment of the first three instalments after the judgment-debtors had taken an objection to the execution of the decree on the ground that he had made no payment. It follows that the Courts below were not entitled to go into the question as to whether the first three instalments had been paid or not. The judgments of the Courts below therefore so far as they found that the payments had been made, must be regarded as non-existent. We must however further regard, for the purposes of this case, that the first three instalments were never paid. In the circumstances, the question arises whether the present application is time-barred. According to the terms of the decree the decree-holder had two distinct rights. The first right was to receive instalments as and when they fell due. The second right was to enforce the payment of all the instalments that might remain unpaid, in the case of two successive instalments remaining unpaid. If it be a fact that the second right is time-barred it would not follow that the first right would also be time-barred. ", "14. As regards the second right, namely, to realise the entire amount of the decree irrespective of the fact whether the instalments have fallen due or not, the majority of in the case already quoted, namely, A.I.R. 1928 All. 629 held that Article 181 , Schedule 1, Limitation Act , would apply. Then the question is when did the right to apply accrue to the decree-holder within the meaning of column 3 of Article 181. That right to apply would accrue on the first occasion. A right to apply may accrue on several occasions but for the purposes of limitation the first occasion when the right to apply accrues must be taken as the crucial date. This was indicated by their Lordships of in the case of A.I.R. 1932 P.C. 207. The right to apply in this case therefore accrued to the decree-holder on 13th June 1926. More than three years having elapsed from that date it is no longer open to the decree-holder to apply for recovery of such instalments as had not fallen due on 21st May 1931, when he made his application for exeeution. It follows that he cannot recover the instalment due on 31st May 1931, which had not fallen due on the date of the application for execution. For similar reasons he could not apply for the recovery of the instalment of 1932. ", "15. I have already remarked that the fact that the decree-holder's second right is barred, does not force us to hold, as a necessary consequence, that the first right is also barred. As pointed out by all the Judges in the case of v. Sriohand A.I.R. 1928 All. 629 the instalments, as and when they fall due, are recoverable under Article 182(7 ), Schedule 1, Lim. Act. In that view the instalments of 1928, 1929 and 1930 are recoverable. 1 agree therefore that the appeal should be al-slowed in part by declaring that the instalment which fell due on 31st May 1931 is not recoverable under the present application for execution."], "relevant_candidates": ["0000565089", "0000884131"]} {"id": "0000507731", "text": ["CASE NO.: Appeal (civil) 9676 of 2003 PETITIONER: RESPONDENT: Chairman, & . DATE OF JUDGMENT: 03/05/2005 BENCH: & JUDGMENT: ", "J U D G M E N T W I T H CIVIL APPEAL NO.9678 OF 2003 S.B. SINHA, J : ", "These two appeals arising out of a common judgment and order dated 10.2.2003 passed by at Jammu were taken up for hearing together and are being disposed of by this common judgment. ", "Interpretation of a bipartite settlement dated 8.9.1983 is in question in these appeals which arise out of the aforementioned judgment and order passed by a Division Bench of the said court dismissing an appeal preferred by (hereinafter referred to as 'the Bank), affirming a judgment and order dated 15.12.1999 passed by a learned Single Judge of the said court whereby and whereunder an award dated 4.10.1995 passed by , Chandigarh, directing the workman to be reinstated in service with the benefit of past service without any back wages had not been interfered with. ", "The workman was working as a Cashier-cum-Clerk with the . He was transferred to Kolkata on or about 2.4.1981; but he did not join the said office or before 14.4.1981, when he was supposed to do so. On his failure to report to Kolkata office by 14.4.1981, a notice was issued by the on 22.6.1981 asking him to show cause as to why disciplinary proceedings should not be initiated against him. Taking however a lenient view, he was transferred to Amritsar on 6.8.1981 and then to on a representation having been made in this behalf. He later on was transferred to Amritsar again. He joined on 29.7.1982. A leave for a period of 28 days was sought for and sanctioned in favour of the workman on an application made therefor by him on or about 9.10.1982. A further leave of 9 days was sanctioned by an order dated 17.11.1982. Yet again he filed an application seeking leave for one month on 19.5.1983; although he had only 25 days accumulated leave to his credit and his leave account had already been deducted by 50 days' medical leave. ", "A bipartite settlement was entered into by and between the management of 58 Banks including herein and their workmen; clause 2 whereof is as under : ", "\"2. Voluntary Cessation of employment by the employees. ", "Whereas an employee has not submitted any application for leave and absents himself from work for a period of 90 or more consecutive days without or beyond any leave to his credit or absents himself for 90 or more consecutive days beyond the period of leave originally sanctioned or subsequently extended and where there is satisfactory evidence that he has taken up employment in India and the management is satisfied that he has no present intention of joining duties, the management may at any time thereafter give a notice, to the employee's last known address calling upon the employee to report for duty within 30 days of the notice stating, inter alia, the grounds for the management coming to the conclusion that the employee has no intention of joining duties and furnishing necessary evidence, where available. Unless the employee reports for duty within 30 days or unless he gives an explanation for his absence satisfying the management that he has not taken up another employment or avocation and that he has no intention of not joining duties, the employee will be deemed to have voluntarily retired from the bank's service on the expiry of the said notice. In the event of the employee submitting a satisfactory reply, he shall be permitted to report for duty thereafter within 30 days from the date of the expiry of the aforesaid notice without prejudice to the 's right to take any action under the law or rules of service.\" ", "Despite the expiry of the period of leave in June 1983, the workman did not report back for duties, whereupon the Branch Manager, , informed him by a letter dated 2.11.1983 that he should rejoin his duties, which was not complied with. An explanation was sought for from him by Memorandum dated 2.11.1983 whereby and whereunder he was asked to show cause as to why he had been on unauthorized leave for such a long period. Such an explanation was to be filed by 10.11.1983. He had further been asked to join duties. Despite service of the said memo., the workman failed to join his duties by 31.12.1983. Consequently, a show cause notice dated 31.12.1983 served on him whereby and whereunder he was intimated that in the event of his failure to resume his duties by 15.1.1984 he would be deemed to have been discharged from the services of the . In reply thereto, a telegram from one was received stating that the workman being unwell could not join his duties by 15.1.1984. He again applied for grant of leave on medical ground on 15.2.1984. As by reason of the aforementioned act on the part of the workman, the felt a great deal of inconvenience, a memorandum was served on 20.2.1984, pursuant whereto again he requested for sanctioning of leave. His services were dispensed with by invoking clause (2) of the bipartite settlement stating : ", "\"3. Consequent upon receipt of these applications from Mr. , the bank had no alternative but to make confidential enquiries about the state of his health in pursuance of which it was revealed that Mr. was keeping a good health and even attended to his family business. This convinced the bank that Mr. was not at all interested in the services of the bank, which prompted it to issue an order vide No. Per/Disp/84-448 dated 17.5.1984 in accordance with the provisions contained in Memorandum of Settlements dated 8.9.1983 and Mr. was deemed to have voluntarily retired from the services of the bank w.e.f.8.2.1984.\" ", "A legal notice was served upon the herein after a long time demanding the reinstatement of the workman on or about 6.4.1989, to which it was replied that he had been engaged in some business at and thus it was clear that he had no interest in continuing in the services of the . Sometime in June 1989, a conciliation proceeding was initiated by him under the Industrial Disputes Act resulting in a reference made by in terms of a Notification dated 7.8.1990. ", "Inter alia, on the ground that the bank allegedly did not place on records the settlement dated 8.9.1983, the impugned award was passed. In the writ petition filed thereagainst by the it was specifically averred : ", "\"\u0005It is important to point out here that the relevant Bipartite Settlement is applicable to the Management of the Bank and is just in the form of Book and the petitioner-bank while perusing its case has placed that book of Bi-Partite Settlement before the respondent No.2 but the respondent No.2 without considering that settlement has remained under this impression that Bi-Partite Settlement is just a form of some document consisting of some leaves and has not placed on record which is not true. The order passed by the respondent No.2 is totally in contravention of Bi- partite Settlement and deserves to be quashed on this score only. ", "A writ petition was also filed by the workman questioning non-grant of back wages. Both the writ petitions were heard together. In the said proceedings, the workman filed an application purported to be under Section 17-B of the Industrial Disputes Act, which was not supported by an affidavit as is required in law. The learned Single Judge although noticed the contentions raised in both the writ petitions, but dealt with the one filed by the workman only. An appeal preferred thereagainst was also dismissed. ", "Mr. , the learned counsel appearing on behalf of the , would submit that -cum- Labour Court as also both the learned Single Judge and the Division Bench of proceeded on a wrong premise that it was obligatory on the part of the to conduct a full fledged departmental proceeding. According to the learned counsel as also erred in law insofar as they failed to take into consideration that the principles of natural justice had been complied with as repeated opportunities had been given to the workman to explain his position as also report for duties. Strong reliance, in this behalf, has been placed on [] and []. ", "Mr. , the learned counsel appearing on behalf of the workman, on the other hand, would contend that as a plea for extension of leave was raised by the workman, if the same had not been proved to be satisfactory to the management, it was obligatory on its part to conduct a departmental proceeding against him. In any event, the learned counsel would contend that the applicability of the bipartite settlement having not been gone into by as also by , the matter should be remitted to the . ", "Before , the workman did not deny or dispute the existence of the bipartite settlement. He merely raised a plea that the same was not applicable. The plea of the , on the other hand, was that the stipulations contained in the bipartite settlement were attracted if the employer arrives at a satisfaction that that there were sufficient grounds for it to arrive at a conclusion that the employee was no longer interested to continue in the service. ", "The fact that there exists a bipartite settlement entered into by and between the Banks and their workmen is not in dispute. The workman was all along aware about the said legal position inasmuch as, at all stages, viz., issuance of notices and memorandums, passing of the order of termination, the said settlement had been referred to. ", "What fell for consideration before was the interpretation and/or applicability of the said settlement. committed an error of record insofar as it proceeded on the basis that the said settlement had not been proved. The settlement being an admitted document should have been considered in its proper perspective by . Clause (2) of the said settlement is a complete code by itself. It lays down a complete machinery as to how and in what manner the employer can arrive at a satisfaction that the workman has no intention to join his duties. A bare perusal of the said settlement clearly shows that it is for the employee concerned to submit a proper application for leave. It is not in dispute that after the period of leave came to an end in June 1983, the workman did not report back for duties. He also did not submit any application for grant of further leave on medical ground or otherwise. It is in that situation the memorandum dated 2.11.1983 was issued and he was asked to joint his duties. It is furthermore not in dispute that despite receipt of the said memorandum, the workman did not join duties pursuant whereto he was served with a notice to show cause dated 31.12.1982. He was required to resume his duties by 15.1.1984. The received a telegram on 17.1.1984 and only about a month thereafter he filed an application for grant of leave on medical ground. It is not the case of the workman that any leave on medical ground or otherwise was due to him. Opportunities after opportunities indisputably had been granted to the workman to explain his position but he chose not to do so except filing applications for grant of medical leave and that too without annexing proper medical certificates. ", "The bipartite settlement is clear and unambiguous. It should be given a literal meaning. A bare perusal of the said settlement would show that on receipt of a notice contemplated thereunder, the workman must either : (1) report for duties within thirty days; (2) give his explanation for his absence satisfying the management that he has not taken any employment or avocation; and (3) show that he has no intention of not joining the duties. It is, thus, only when the workman concerned does not join his duties within thirty days or fails to file a satisfactory explanation, as referred to hereinbefore, the legal fiction shall come into force. In the instant case except for asking for grant of medical leave, he did not submit any explanation for his absence satisfying the management that he has not taken up any other employment or avocation and that he has no intention of not joining his duties. ", "In the aforementioned fact situation we do not see any reason as to why the could not arrive at a satisfaction that the workman had no intention to join his duties. It is interesting to note that though the said order was passed on 17.5.1984, a representation to the was made by the workman to reconsider the said decision after a period of 3 years and 2 months by a letter dated 31.7.1987 Yet again a dispute was sought to be raised by issuance of a legal notice on the only on 6.4.1989. ", "Mere sending of an application for grant of leave much after the period of leave was over as also the date of resuming duties cannot be said to be a bona fide act on the part of the workman. The , as noticed hereinbefore, in response to the lawyer's notice categorically stated that the workman had been carrying on some business elsewhere. ", "We cannot accept the submission of Mr. that only because on a later date an application for grant of medical leave was filed, the same ipso facto would put an embargo on the exercise of the jurisdiction of the from invoking clause (2 ) of the bipartite settlement. ", "It may be true that in a case of this nature, the principles of natural justice were required to be complied with but the same would not mean that a full-fledged departmental proceeding was required to be initiated. A limited enquiry as to whether the employee concerned had sufficient explanation for not reporting to duties after the period of leave had expired or failure on his part on being asked so to do, in our considered view, amounts to sufficient compliance of the requirements of the principles of natural justice. ", "Clause (2) of the bipartite settlement raises a legal fiction, which is of wide import. Once the action on the part of the employer is found to be fair, the court in view of such legal fiction would call upon the workman to prove contra. It will bear repetition to state that the only defence which came to be raised by the workman was non-applicability of the bipartite settlement. The notice dated 31.12.1983 refers to the said settlement by necessary implication, as on the failure of the workman to resume his duties by 15.1.1984, it was stated that he would be deemed to have been discharged from the services of the . Yet again in terms of the memorandum dated 20.2.1984, attention of the workman was drawn to the fact that his application for grant of leave was neither in the prescribed form nor any medical certificate was attached thereto. It was pointed out that the medical certificate shows that he was under the doctor's treatment from 22.10.1983 to 22.1.1984 and as such he should have reported for duties on 23.1.1984 and as he failed to do so, it gave rise to an inference that he was not interested to continue in 's services. He did not submit any satisfactory explanation nor he filed any valid medical certificate. It was in that situation, the order dated 17.5.1984 was issued which again referred to the provisions contained in memorandum of settlement dated 8.9.1983. The workman ex facie appears to have accepted the said order as for a long period he maintained silence. Had he been interested in the 's services, it was expected of him to resume his duties and/or file proper application for grant of medical leave with a valid medical certificate. ", "The principle of natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an empty formality. Even the principle of estoppel will apply. [ []. The principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. [ ] and & Anr. Vs. S.G. Koturappa & Anr. 2005 (2) SCALE 493]. ", "The contention raised at the appears to be squarely covered by two decisions of this relied upon by Mr. . In (supra) , J. speaking for the Division Bench observed : ", "\"14. Two principles emerge from the decisions: (1) principles of natural justice and duty to act in a just, fair and reasonable manner have to be read in the Certified Standing Orders which have statutory force. These can be applied by and even to relations between the management and workman though based on contractual obligations; and (2) where domestic inquiry was not held or it was vitiated for some reason the or adjudicating an industrial dispute can itself go into the question raised before it on the basis of the evidence and other material on record. ", "15. In the present case action was taken by the under clause 16 of the Bipartite Settlement. It is not disputed that absented himself from work for a period of 90 or more consecutive days. It was thereafter that the served a notice on him calling upon him to report for duty within 30 days of the notice stating therein the grounds for the to come to the conclusion that had no intention of joining duties. did not respond to the notice at all. On the expiry of the notice period the passed orders that had voluntarily retired from the service of the .\" ", "It was further held : ", "\"18. The has followed the requirements of clause 16 of the Bipartite Settlement. It rightly held that has voluntarily retired from the service of the . Under these circumstances it was not necessary for the to hold any inquiry before passing the order. An inquiry would have been necessary if had submitted his explanation which was not acceptable to the or contended that he did report for duty but was not allowed to join by the . Nothing of the like has happened here. Assuming for a moment that inquiry was necessitated, evidence led before the clearly showed that notice was given to and it is he who defaulted and offered no explanation of his absence from duty and did not report for duty within 30 days of the notice as required in clause 16 of the Bipartite Settlement.\" ", "The aforementioned legal position was reaffirmed by a decision of three-Judge Bench in (supra), wherein it has been held : ", "\"\u0005Under this rule the employee is given an opportunity to rejoin duty within a stipulated time or explain his position to the satisfaction of the management that he has no intention of not joining duty, and a presumption will be drawn that the employee does not require the job anymore and will stand retired from service. Thus, there is no punishment for misconduct but only to notice the realities of the situation resulting from long absence of an employee from work with no satisfactory explanation thereto\u0005\". ", "In the fact situation obtaining therein it was held that there had been sufficient compliance for principle of natural justice. ", "In (supra), this Court noticed the decision of three- Judge Bench of this Court in . [] whereupon had placed strong reliance. In (supra) admittedly no opportunity was given to the workman and no inquiry was held. In that situation, it was observed : ", "\"8. The cardinal point that has to be borne in mind, in every case, is whether the person concerned should have a reasonable opportunity of presenting his case and the authority should act fairly, justly, reasonably and impartially. It is not so much to act judicially but is to act fairly, namely, the procedure adopted must be just, fair and reasonable in the particular circumstances of the case. In other words application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority from acting arbitrarily affecting the rights of the concerned person.\" ", "Keeping in view the fact that we have ourselves considered the pleadings of the parties as also the materials on records, it is not necessary to remit the matter to the as it would not serve any purpose. So far as the appeal preferred by the workman is concerned, it is not necessary to entertain the same as it is evident that Section 17-B of the of the Industrial Disputes Act cannot now be applied in view of the fact that the workman did not file an affidavit before the learned Single Judge in support of his contentions and as required under law. ", "Having regard to the facts and circumstances of the case and for the reasons stated hereinbefore, we are of the opinion that the appeal preferred by the should be allowed and that of the workman should be dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs."], "relevant_candidates": ["0000313314", "0000427114", "0001660852", "0001867627", "0001991233"]} {"id": "0000511635", "text": ["CASE NO.: Special Leave Petition (crl.) 1971 of 1999 PETITIONER: Vs. RESPONDENT: & . RESPONDENTS DATE OF JUDGMENT: 25/02/2000 BENCH: G.B.Pattanaik, U.C.Banerjee JUDGMENT: ", "J. ", "L.....I.........T.......T.......T.......T.......T.......T..J Leave granted. ", "Exercise of jurisdiction under the inherent power as envisaged in Section 482 of the Code to have the complaint or the charge-sheet quashed is an exception rather a rule and the case for quashing at the initial stage must have to be treated as rarest of rare so as not to scuttle the prosecution. With the lodgment of First Information Report the ball is set to roll and thenceforth the law takes its own course and the investigation ensues in accordance with the provisions of law. The jurisdiction as such is rather limited and restricted and its undue expansion is neither practicable nor warranted. In the event, however, the court on perusal of the complaint comes to a conclusion that the allegations levelled in the complaint or charge-sheet on the face of it does not constitute or disclose any offence as alleged, there ought not to be any hesitation to rise upto the expectation of the people and deal with the situation as is required under the law. Frustrated litigants ought not to be indulged to give vent to their vindictiveness through a legal process and such an investigation ought not to be allowed to be continued since the same is opposed to the concept of justice, which is paramount. Factual matrix therefore would thus be relevant in the matter of assessment of the situation as to whether civic profile would outweigh the criminal outfit. It appears that as against the initiation of proceeding on the file of 17th Metropolitan Magistrate, Hyderabad against the appellant under Sections 120B, 418, 415 and 420 read with Section 34 Indian Penal Code, the respondents moved for quashing of complaint and the Learned Single Judge on 15th February, 1999 in Criminal Petition No.5386 of 1998 did quash the complaint and hence the petitioner is in appeal before this Court. The Learned Single Judge while dealing with the matter came to a definite conclusion that the complaint does not disclose any offence having been committed by the accused petitioner and as such allowed the petition for quashing of the complaint. The factual score depict that the respondents approached the petitioner for the purpose of securing Ethambutol Hydrochloride drug in bulk for sale and use in various pharmaceutical drugs and products being manufactured by the respondent Company. It is at this juncture that the Petitioner has come out with a definite case that by reason of a promise of maintaining continuous supply of raw materials to the petitioners herein for the purpose of manufacturing Ethambutol Hydrochloride and in such a way so as not to cause any interruption or hindrance to the manufacturing activity of the Complainants factory, the Complainant-petitioner entered into an agreement dated 31st August, 1997 which inter alia records as below: It is the responsibility of the party of the 2nd part to maintain sufficient inventory of the Raw Materials as described in the Annexure I in order to maintain consistent supplies to the manufacturer and not to cause any interruption/hindrance with the manufacturing activity by the manufacturer. ", "It is on the basis of the agreement as noticed above and failure to comply therewith, it is stated that the petitioner herein has lost a substantial amount of money and to the extent of about one crore and the sufferance of loss has been by reason of specific assurance and representation which obviously turned out to be false. Misrepresentation on the part of the respondent accused persons to the Complainant, has been the major grievance and a definite and specific case has been made out that such a misrepresentation was intentionally effected since the accused persons were in the know of things that in the event the supplies are not effected, as per the agreement, the Complainant is likely to suffer a wrongful loss which as the complaint proceeds, in the interest of the transaction between the parties, the accused persons were bound to protect. It is on this score that relevant extracts of the complaint ought to be noticed at this juncture. The complaint inter alia provides as below: (i) ...Clause 9 of the Agreement dated 31.8.1997 states that the schedule of supply of raw materials by the party of the 2nd Part (A1 Company) and the delivery of the finished product by the party of the 1st Part (Complainant) shall be as in Annexure III (to the Agreement) ", "(ii) Annexure III to the Agreement dated 31.8.1997 would show that the supply of raw material DL2 Amino Butanol by A1 to the Complainant must be 15,210 Kgs or 15.21 Mts per month to facilitate and sustain a monthly production of 8500 Kgs. or 8.5 Mts. of the finished product Ethambutol Hydrochloride per month. ", "(iii) Another main factor being that the Complainant should not suffer any loss on account of the execution of the agreement with . The Complainant states that it entered into the Agreement dated 31.8.1997 with under which the Complainant has been converting the raw materials supplied by into the bulk drug Ethambutol Hydrochloride and supplying it back to on prescribed conversion charges. ", "(iv) ..The Complainant states that the supply of raw materials, particularly the principal imported raw material DL2 Amino Butanol, by A1 was far from regular almost from the beginning of the agreement. This was often being informed to A1 through A2, A3, A4 and A5. Based on the representations made by A1 through A2 to A5, the Complainant had planned its production according to the agreement i.e. on the basis of supply of 15,210 kgs. DL2 Amino Butanol by A1 for conversion every month, but the production plans were totally dislocated and disrupted on account of A1s willful failure to supply the raw materials as represented by them through A2, A3, A4 and A5. ", "(v) ..The Complainant states that it had to incur a loss of over Rs. One crore due to the willful defaults committed by the Accused. These defaults on part of A1 were repeatedly brought to the notice of the Accused through telephonic calls by the Complainant, more particularly in the fax message of 15.12.97 and 10.2.98 to A1 and A3. ", "(vi) The Complainant had a meeting with on 4.4.1998 which was also attended by . At this meeting held on 4.4.98, and agreed with the position stated by the Complainant and made representations that the supply of raw material by A1, particularly the critical raw material DL2 Amino Butanol, would be kept up regularly to enable production of 8 MTs of the finished product. The Complainant reduced these representations by A1 through and into writing on the same day and wrote the letter dated 4.4.98 to A1 through . The contents of this letter have not been rebutted by A1. The Complainant states that inspite of this, the Accused deliberately failed to act on their representations made to the Complainant on 4.4.98 and thus continued to inflict huge losses on the Complainant ", "(vii) ..The Complainant states that in its talks and discussions with the Accused, it had been indicating to A2, A3, A4, A5 and A6 that in case A1 could not keep up to its representations which put the Complainant to huge losses, this clause 15 could be invoked and the agreement terminated by the Complainant giving 2 months notice to A1. But the Accused would, on these occasions, persuade the Complainant not to invoke this provision and make further representations to the Complainant that the supply of raw materials would henceforth be kept at the agreed level. However, these representations were not acted upon by the Accused while, on the other hand, believing these representations, the Complainant made schedules of production, but was left without materials, holding on to an idle plant carrying idle labour and thus incurring huge monetary losses. ", "(viii) ..The Complainant now understands that the above false representations were made by the Accused solely with the purpose of putting the Complainant to huge losses and crippling them since the Accused themselves were planning to manufacture in their own facilities the bulk drug Ethambutol Hydrochloride and wanted to put the Complainant out of competition by ruining them by keeping them out of production which was achieved by the Accused by making false representations of supply of raw material at the agreed levels and then willfully failing and omitting to act as per these representations. ", "(ix) The Complainant was also persuaded by the representations of the Accused to desist from invoking Clause 15 of the Agreement and revoke it which would have reduced its losses to some extent. The above acts of the Accused clearly attract the ingredients of the offence punishable U/Sec.415 I.P.C .. ", "(x) the Accused were having dishonest intention and it was with such intention that was fraudulently and dishonestly induced to enter into the Agreement dt. 31.8.97. The dishonest intention of the Accused is further seen from the complaint lodged by on behalf of against three officers of the Complainant. ", "(xi) The Accused were fully aware that the is a reputed manufacturer of Ethambutol Hydrochloride and they are having good reputation in Indan and Overseas markets. The Accused were themselves contemplating entering into production of Ethambutol Hydrochloride and wanted to eliminate the competition from the who had established their name in the market. Keeping this in mind, the Accused, in order to earn wrongful gain and cause wrongful loss to the , acted in the aforesaid manner, inducing the through representations (by the Accused) to commit to conversion work and consequently schedule its production accordingly and then willfully failing to act as per the representations thus putting the to huge losses. ", "(xii) The Complainant further states that but for the false representations made by the Accused at the time of entering into the Agreement dt. 31.8.97, it (Complainant) would not have entered into this Contract. The aforesaid acts of the Accused have ruined the finances of the Complainant and it had to incur huge loss due to these acts of the Accused. The Complainant states that the above said acts of the Accused clearly attract the ingredients of Section 420 I.P.C.. ", "(xiii) The preceding paragraphs in this Complaint would clearly reveal that the Accused who are bound to protect the interests of the Complainant in the transactions under the Agreement dt.31.8.97 have not only cheated the Complainant by causing wrongful loss to it, but have also failed to protect the interests of the Complainants in the transactions. Hence, the Accused are liable to be punished U/Sec.418 I.P.C . ", "(xiv) .The Complainant states that from whatever has been stated and set out herein above, it is absolutely clear that A1 to A6 had, in criminal conspiracy with each other and in furtherance of the common intention of all have committed the above offences under Section 415 I.P.C. and 420 I.P.C . Letter correspondence, the Complaint and the documents relating to the Agreement dt. 31.8.97 would prove that A2 to A6 have very much participated in the affairs of A1 and in particular, those relating to the transactions under the Agreement dt. 31.8.97. ", "This longish narration could have probably been avoided, but it cannot be so done by reason of the fact that the Learned Single Judge has only recorded : It appears that under an agreement the accused were obliged to supply raw materials for production to the Complainant which they failed to do. I do not find any allegation whatsoever in the complaint which would disclose a criminal offence. ", "Before proceeding further in the matter, let us now deal with the offences alleged in the First Information Report. The first offence alleged is that of cheating within the meaning of Section 415 . For convenience sake Section 415 reads as below: 415. Cheating Whoever, by deceiving any person, fradulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat . Explanation A dishonest concealment of facts is a deception within the meaning of this section. ", "The Complaint is also said to be under Section 418 I.P.C. which reads as below: 418. Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect. Whoever cheats with the knowledge that he is likely thereby to cause wrongful loss to a person whose interest in the transaction to which the cheating relates, he was bound , either by law or by a legal contract, to protect, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. ", "The Complaint also alleges an offence said to have been committed under Section 420 I.P.C. which reads as below: 420. Cheating and dishonestly inducing delivery of property. Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. ", "The ingredients require to constitute an offence under Section 415 has been lucidly dealt with by this Court in the Case of Ram Jas v. State of U.P. (1970 (2) SCC 740) wherein this Court observed as below: The ingredients required to constitute the offence of cheating are- ", "(i) there should be fraudulent or dishonest inducement of a person by deceiving him; ", "(ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and ", "(ii) in cases covered by (ii)(b), the act or omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property. ", "While Section 415 is an offence of cheating, Section 418 deals with cheating with knowledge that wrongful loss may ensue to a person whose interest the offender is bound to protect and Section 420 is cheating and dishonestly inducing delivery of property. In order to attract the provisions of Sections 418 and 420 the guilty intent, at the time of making the promise is a requirement and an essential ingredient thereto and subsequent failure to fulfil the promise by itself would not attract the provisions of Section 418 or 420. Mens rea is one of the essential ingredients of the offence of cheating under Section 420 . As a matter of fact illustration (g) to Section 415 makes the position clear enough to indicate that mere failure to deliver in breach of an agreement would not amount to cheating but is liable only to a civil action for breach of contract and it is this concept which obviously has weighed with the Learned Single Judge. But can the factual situation as narrated above in the longish reproduction of the complaint lend support to the observations of the Learned Judge, the answer is pivotal one but before so doing one other aspect as regards the powers under Section 482 . ought to be noticed. As noted herein before this power is to be exercised with care and caution and rather sparingly and has been so held on more occasions than one. In the case of 1985 SCC (Crl.) 180 this Court pointed out that the High Court should very sparingly exercise its discretion under Section 482 [AIR 1983 SC 1219: : 1983 SCC (Crl) 813] this Court observed: , we cannot refrain from observing, might well have refused to invoke its inherent powers at the very threshold in order to quash the proceedings, for these powers are meant to be exercised sparingly and with circumspection when there is reason to believe that the process of law is being misused to harass a citizen. ", "Needless to record however and it being a settled principle of law that to exercise powers under Section 482 of the Code, the complaint in its entirety shall have to be examined on the basis of the allegation made in the complaint and at that stage has no authority or jurisdiction to go into the matter or examine its correctness. Whatever appears on the face of the complaint shall be taken into consideration without any critical examination of the same. But the offence ought to appear ex facie on the complaint. The observation in [1976 (3) SCC 736] lend support to the above statement of law. (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; ", "(2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; ", "(3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like. ", "The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where can quash proceedings. ", "58. The same principles would apply mutatis mutandis to a criminal complaint. ", "59. We now come to the question as to whether or not a clear allegation of entrustment and misappropriation of properties was made by the appellant in her complaint and, if so, was justified in quashing the complaint at that stage. It is well settled by a long course of decisions that for the purpose of exercising its power under Section 482 . to quash a FIR or a complaint would have to proceed entirely on the basis of the allegations made in the complaint or the documents accompanying the same per se. It has no jurisdiction to examine the correctness or otherwise of the allegations. In case no offence is committed on the allegation and the ingredients of Sections 405 and 406 , IPC are not made out, would be justified in quashing the proceedings. ", "In the matter under consideration, if we try to analyse the guidelines as specified in case (supra) can it be said that the allegations in the complaint do not make out any case against the accused nor it discloses the ingredients of an offence alleged against the accused or the allegations are patently absurd and inherently improbable so that no prudent person can ever reach to such a conclusion that there is sufficient ground for proceeding against the accused. In the present case, the complaint as noticed above does not, however, lend credence to the questions posed. It is now well settled and one need not dilate on this score, neither we intend to do so presently that the allegations in the complaint will have to be accepted on the face of it and truth or falsity of which would not be gone into by the at this earliest stage as noticed above: whether or not allegations in the complaint were true is to be decided on the basis of the evidence led at the trial and the observations on this score in the case of v. [1997 SCC (Crl.) 1073] ought to be noticed. In paragraph 3 of the report this observed: 3. We have perused the complaint carefully. In our opinion it cannot be said that the complaint did not disclose the commission of an offence. Merely because the offence was committed during the course of a commercial transaction, would not be sufficient to hold that the complaint did not warrant a trial. Whether or not the allegations in the complaint were true was to be decided on the basis of evidence to be led at the trial in the complaint case. It certainly was not a case in which the criminal trial should have been cut short. The quashing of the complaint has resulted in grave miscarriage of justice. We, therefore, without expressing any opinion on the merits of the case, allow this appeal and set aside the impugned order of the High and restore the complaint. The learned trial Magistrate shall proceed with the complaint and dispose of it in accordance with law expeditiously. ", "Be it noted that in the matter of exercise of inherent power, the only requirement is to see whether continuance of the proceeding would be a total abuse of the process of . The Criminal Procedure Code contains a detailed procedure for investigation, charge and trial, and in the event, the High is desirous of putting a stop to the known procedure of law, the High must use a proper circumspection and as noticed above, very great care and caution to quash the complaint in exercise of its inherent jurisdiction. Recently, this in (1999 (5) SCALE 609) observed: 5. Respondents counsel in the High put forward mainly two contentions. First was that the dispute is purely of a civil nature and hence no prosecution should have been permitted, and the second was that the Judicial Magistrate of First Class, Gandhidham has no jurisdiction to entertain the complaint. Learned Single Judge has approved both the contentions and quashed the complaint and the order passed by the magistrate thereon. ", "6. On the first count learned Single Judge pointed out that there was a specific clause in the Memorandum of Understanding arrived between the parties that disputes, if any, arising between them in respect of any transaction be resolved through arbitration. made the following observations: ", "Besides supplies of processed soyabean were received by the complainant company without any objection and the same have been exported by the complainant-company. The question whether the complainant-company did suffer the loss as alleged by it are the matters to be adjudicated by and cannot be the subject matter of criminal prosecution. ", "7. Time and again this Court has been pointing out that the quashment of FIR or a complaint in exercise of inherent powers of should be limited to very extreme exceptions (vide (1992 Suppl.(1) SCC 335 and (1999 (3) SCC 259)]. ", "8. In the last referred case this court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. We quote the following observations: ", "It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions. ", "9. We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases as indicated in ). ", "On careful reading of the complaint, in our view, it cannot be said that the complaint does not disclose the commission of an offence. The ingredients of the offences under Sections 415 , 418 and 420 cannot be said to be totally absent on the basis of the allegations in the complaint. We, however, hasten to add that whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the evidence to be led at the trial in the complaint case but simply because of the fact that there is a remedy provided for breach of contract, that does not by itself clothe the to come to a conclusion that civil remedy is the only remedy available to the appellant herein. Both criminal law and civil law remedy can be pursued in divers situations. As a matter of fact they are not mutually exclusive but clearly co-extensive and essentially differ in their content and consequence. The object of criminal law is to punish an offender who commits an offence against a person, property or the for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect civil remedies at all for suing the wrongdoer in cases like arson, accidents etc. It is anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred . The two types of actions are quite different in content, scope and impart [vide (supra)]. Mr. , the learned Senior Advocate for the respondents herein being the accused persons, strongly relied upon the decisions of this in the case of Dr. Sharma Nursing Home v. 1998 (8) SCC 745 wherein this observed: that findings of Section 420 has been rested only on the reception and did not go into the question whether the complainant and its accompanymen disclosed the essential ingredient of the offence under Section 420 namely, disclosed inducement. Mr. upon reliance in Dr. case (supra) also contended that Section 24 of the I.P.C has defined the word dishonesty to mean a deliberate intent to cause wrongful gain or wrongful loss. It has been the specific case of the complainant that from the beginning of the transaction there was a definite intent on the part of the accused persons to cause wrongful loss to the complainant. This aspect of the matter, however, has not been taken note of by the learned Single Judge. The decision of this in Dr. case (supra) thus does not lend any assistance to Mr. in support of quashing of the criminal complaint. Some other decisions have also been cited but we do not feel it inclined to refer to the same except one noted above since they do not advance the case of the respondents in any way whatsoever. Considering the factual aspect of the matter, we unhesitatingly state, however, that the issue involved in the matter under consideration is not a case in which the criminal trial should have been short circuited. We, thus, without expressing any opinion on the merits of the case allow the Appeal and set aside the impugned order of the High and restore the complaint. The learned trial Magistrate shall proceed with the complaint and dispose of the same in accordance with the law with utmost expectation. Be it clarified however that observations as above in this judgment be not taken as an expression of opinion of ours."], "relevant_candidates": ["0000056823", "0000418835", "0001033637", "0001684706", "0001751199", "0001922701"]} {"id": "0000514162", "text": ["PETITIONER: , LTD. Vs. RESPONDENT: THE STATE OF ASSAM AND OTHERS. AND CONNECTED PETITION AND DATE OF JUDGMENT: 16/08/1960 BENCH: , BHUVNESHWAR P.(CJ) BENCH: , BHUVNESHWAR P.(CJ) GAJENDRAGADKAR, P.B. WANCHOO, K.N. GUPTA, K.C. DAS SHAH, J.C. CITATION: 1961 AIR 232 1961 SCR (1) 809 CITATOR INFO : R 1962 SC 562 (7) E 1962 SC1406 (1,3,6,7,8,9,13,17,53,124,128) R 1963 SC 928 (8,9) R 1963 SC1667 (1,2,69,12,13,14,31,56,57,58) R 1964 SC1006 (8) RF 1967 SC 1 (42) RF 1967 SC1643 (274) RF 1968 SC 599 (14) RF 1968 SC1277 (4) F 1969 SC 147 (8,9,26,33) E 1970 SC1864 (5) APL 1970 SC1912 (7) RF 1972 SC1061 (51) RF 1972 SC1804 (11) RF 1974 SC1505 (6) RF 1975 SC 17 (15) E 1975 SC 583 (11,13) D 1975 SC1443 (18,21) MV 1975 SC2065 (33) RF 1977 SC1825 (10) E&R 1978 SC 68 (252,253,254) RF 1981 SC 463 (24,26) RF 1981 SC 711 (11) RF 1981 SC 774 (9) R 1983 SC 634 (11,12) F 1983 SC1283 (5) R 1986 SC 63 (36) RF 1988 SC 567 (11,12) RF 1988 SC2038 (4) RF 1989 SC1119 (12,14) RF 1989 SC1949 (12) R 1989 SC2015 (8) RF 1990 SC 313 (24) C 1990 SC 772 (1,3) RF 1990 SC 781 (74) E&D 1990 SC 820 (10,17,20) RF 1990 SC2072 (48) ACT: Freedom of Trade--If includes freedom from taxation--State Law imposing tax on goods carried by road or inland waterways--Constitutionaly of--Constitution of India, Arts. 301 and 304--Assam Taxation (on goods carried by Roads and Inland Waterways) Act , 1954 (Ass. XIII of 1954). HEADNOTE: The Assam Taxation (on goods carried by Roads and Inland Waterways) Act , 1954, was passed under Entry 56 of List II of Seventh Schedule to the Constitution. The appellants contended that the Act violated the freedom of trade guaranteed by Art. 301 Of the Constitution and as it was not passed after obtaining the previous sanction of the President as required by Art. 304(b) it was ultra vires. The respondent urged that taxing laws were not governed by Part XIII (which contained Arts. 301 and 304) but only by Part XII and in the alternative that the provisions of Part XIII applied only to such legislative entries in the Seventh Schedule as dealt specifically with trade, commerce and intercourse. Held, (per , and , .) that the Act violated Art. 30i and since it did not comply with the provisions of Art. 304(b) it was ultra vires and void. The freedom of trade, commerce and intercourse guaranteed by Art. 301 was wider than that contained in S. 297 Of the Government of India Act, 1935, and it included freedom from tax laws also. Article 301 provides that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves ; and if any Act imposes any direct restrictions on the movement of goods it attracts the provisions of Art. 301 , and its validity can be sustained only if it satisfied the requirements of Art. 302 or Art. 304. The operation of Art. 301 cannot be restricted to legislation under the Entries dealing with trade and commerce. The Assam Act directly affected the freedom contemplated by Art. 301. , S.C.R. 127, , S.C.R. 1422, v. , (1936) A.C. 578, ., S C.R. 1069, . 810 1 S.C.R. 707, v. State of South Australia, (1927) 40 C.L.R. 1 and v. , (1932) A.C. 542, referred to. , C. J.-The Assam Act did not contravene Art. 301 and was not ultra vires. Neither the one extreme position that Art. 301 included freedom from all taxation nor the other that taxation was wholly outside the purview of Art. 301 was correct. The freedom conferred by Art. 301 did not mean freedom from taxation simpliciter but only from the erection of trade barriers, tariff walls and imposts which had a deleterious effect on the free flow of trade, commerce and intercourse. The Assam Act was a taxing statute simpliciter and did not suffer from any of the vices against which Part XIII of the Constitution was intended. , S.C.R. 127, referred to. Further, the impugned Act was within the competence of and fell directly within Entry 56 of List 11 ; it was not in conflict with the Tea Act Of 1953 enacted by ; it did not contravene Art. 14 and it was not extra-territorial in operation. , S.C.R. 1355, followed. Per , J.-The Assam Act infringed the guarantee of freedom of trade and commerce under Art. 301 and as the Bill was not moved with the previous sanction of the President as required by Art. 304(b) nor was it validated by the assent of the President under Art. 255(c ), it was ultra vires and void. Article 301 guarantees freedom in its widest amplitude, freedom from prohibition, control, burden or impediment in commercial intercourse. The freedom includes not only freedom from discriminative tariffs and trade barriers but also from all taxation on commercial intercourse. Part XIII of the Constitution places restrictions upon the legislative power granted by Arts. 245, 246 and 248 and the Lists and these restrictions include burdens in the nature of taxation. v. , L.R. (1936) A.C. 578, referred to. JUDGMENT: ", "ORIGINAL JURISDICTION: Petitions Nos. 246 of 1956 and 2 of 1959 (Under Article 32 of the Constitution of India for enforcement of Fundamental Rights) with C. As. Nos. 126 to 128 of 1958. ", "1960. August 16, 17. , with , and for the petitioners in Petition No. 246 of 1956 and with , and , for the appellants in C. As. Nos. 126-128 of 1958. The Assam Taxation (on goods carried by road and inland waterways) Act, contravenes Art. 301 of the Constitution. Article 301 means freedom from all restrictions including tax laws. Articles 245 and 246 are subject to Art. 301. It is wrong to say that taxation is outside the scope of Art. 301. Article 304(a) itself contemplates'the imposition of tax. Article 304(b) may also refer to tax in certain circumstances, in cases other than those covered by Art. 304(a). In enacting Art. 301 rejected s. 297 of the Government of India Act, 1935, and deliberately adopted the Australian s. 92 . Movement is an essential ingredient of trade and commerce and there must be no fetter on it; any taxation would be a fetter. Taxation is not outside the ambit of Art. 301 ; I.L.R. 1955 Bom. 680, ", "683. What is commerce is brought out in the following decisions : 6 L. Ed. 1, 68; [1952] S.C.R. 572, 578 ; 93 C.L.R. 127 ; 1936 A.C. 573, 627 A.I.R. 1954 Raj. 217. and , for the petitioners in Petn. No. 2/59. Article 301 sets out the general freedom and Art. 302 the restrictions that can be placed on this freedom. Non-discrimination is one of the aspects of the freedom in Art. 301. Article 306 as it stood before its deletion, spoke of taxation or duty on import or export of goods between States. It postulated 'taxes' in Art. 301 ; but for the non-obstante clause it would have been affected by Art. ", "301. has discussed the scope of Art. 301 in S.C.R. 1069, 1079, 1081, 1088. The decision Of , C. J., in I.L.R. 1955 Bom. 680 regarding scope of Art. 301 was not reversed by . and regard to the scope of Art. 301 reference is invited to the decision in A.I.R. 1954 Hyd. 207, A.I.R. 1958 M.P. 33, A.I.R. 1956 M.B. 214, I.L.R. 1952 Mad. 933, 55 C.L.R. 1, 56 and regarding the meaning of export to the decision in I.L.R. 1955 Tr. Co. ", "123, Attorney-General of India, with , Advocate-General of Assam and , for the respondents in Petition No. 246 of 1956 and Civil Appeals Nos. 126-128 of 1958 and Petition No. 2 of 1959, and with , for the Intervener, Attorney- General of India. Power to tax is an incident of sovereignty. The Power is divided between the and the s. Part XII of the Constitution deals with taxation- several aspects of it. All restrictions on the powers to tax are contained in Part XII which is self contained. Part XII1 deals with something else. Art. 301 deals with freedom of inter- as well as intra-state trade and is different from s. 92 of the Australian Constitution. In Article 301 freedom of trade only means freedom from trade barriers-it does not mean freedom from taxation. Taxation simpliciter was not within the terms of Art. 301. Taxation is not a restriction within the meaning of Part XIII. Article 302 uses the words \" in the public interest \". If the restrictions contemplated therein included tax, then every tax will have to be justified to be in the public interest. Restrictions do not include taxing measures, otherwise there will be a power of judicial review in respect of all such taxing measures. 's Consti- tutional Limitations, 8th Edition, Vol. II, p. 986-988. Taxation is a peculiarly legislative activity. It is likely that if the Constitution makers wanted to put a bar on the taxation power, it would have been placed 'in Part XII and not left to be inferred from Art. 301 ; [1951] S.C.R. 127, 136-137: 1 S.C.R. 765. The word \" restriction \" is very inapt to describe taxation. Apart from Part III all restrictions must be found in Part XIII so far as taxation is concerned. Article 301 does not start with the words \" notwithstanding anything in this Constitution \" because it is concerned only with a small sphere of freedom of trade and commerce and not with taxation. Restriction in these Articles means restriction on movement. The result of holding otherwise would be that even for intrastate taxes the s will have to go to the President and the legislation will be subject to judicial review. If Part III as well as Art. 301 apply to taxing measures, the question will arise which test would the apply-\" reasonable in the interest of the general public \" as envisaged by Part III or \" in the interest of the public \" envisaged by Art. 302. This indicates that neither Part III nor Art. 301 applies to taxing measures. Article 303 deals with preference and discrimination between one and another. It is restricted to legislation with respect to the entries regarding trade and commerce within the , like entry 26, list II and the entries 33 and 42 of list 111. Nothing in Art. 303 indicates that the freedom there includes freedom from taxation. Article 304(a) deals with discrimination and not with taxation simpliciter. It lays no restriction on the taxing goods in its own territory: S.C.R. 1472. Article 304(a) cannot be interpreted as throwing any light on the scope of Art. 301. Section 297 of the Government of India Act, 1935, was the predecessor of Art. 304. Article 304(a) assumes that there is an existing tax on goods which is not levied under 304(a). ", "There is an intermediate position also. Article 301 should be restricted to legislation which is directly with respect to trade and commerce and not to legislation, which is in pith and substance not with respect to trade but only incidentally or indirectly affects trade and commerce. The Assam Act passed under entry 56 is not a legislation with respect to trade and commerce. ", ", Advocate-General for the of Bihar, and for the Intervener, of Bihar.- Article 301 merely concerns itself with the restrictions on the free flow of trade and commerce. It deals with policy of protection. Article 302 also contemplates movement and passage of goods. Restriction does not as a rule imply taxation. If taxation is imposed with a view to restrict goods passing from one to another, it will become a restriction under Art. 301. Article 304(a) permits tax on entry of goods equal to the tax on such goods which are in the . Octroi may be hit by Art. 301 if it is not saved by other provisions. It is a restriction within Art. 301 when it obstructs the movement of trade. ", ", Advocate General for the State of Punjab, and for the Intervener, the State of Punjab. It is impossible to determine whether a particular tax places reasonable restrictions and whether it is in the public interest. Article 301 is concerned with the right of passage generally with respect to trade and commerce and Art. 19(1)(g) with the right of an individual: 1955 P.L.R. 304; I.L.R. 7 Raj. 794; A.I.R. 1960 Andhra 234. Article 302 assumes legislation of under the entries relating to trade and commerce. ", " and , for Intervener No. 3, the State of Madras adopted the submissions made by the Attorney-General. ", ", Advocate-General for the State of Rajasthan and for the Intervener, the State of Rajasthan adopted the submissions made by the Attorney-General. and , for the Intervener No. 6, the State of Uttar Pradesh, adopted the submissions made by the Attorney-General. ", " in reply. Article 301 is an over. riding provision over all other provisions. It is much wider than s. 297 of the Government of India Act. It applies to all pecuniary burdens and commands that trade shall be free from all pecuniary burdens: 22 C.L.R. 566; 1936 A.C. 573, 629- ", "630. 1960. September 26. The Judgment of , C. , was delivered by , C. The judgment of , and , ., was delivered by , and , , delivered his own judgment. SINHA C. -These appeals on certificates granted under Art. 132 of the Constitution by and Writ Petitions under Art. 32 of the Constitution impugn the constitutionality of the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act , (Assam Act XIII of 1954), which hereinafter will be referred to as the Act. The appellants moved under Art. 226 of the Constitution challenging the validity of the Act. by its judgment and order dated June 6, 1955, dismissed the writ petitions. Thereupon, the appellants obtained the certificates that the cases involved substantial questions of law as to the interpretation of the Constitution. The petitions under Art. 32 of the Constitution were moved in this Court for the same purpose of challenging the vires of the Act. The appellants and the petitioners will-, in the course of this judgment, be referred to, for the sake of convenience, as the appellants. The of Assam, the Commissioner of Taxes, appointed under s. 6 of the Act, and the Superintendent of Taxes are the respondents to the appeals and the writ petitions. It appears that the appellants are growers of tea in West Bengal or in Assam and carry their tea to the market in Calcutta from where the tea is sold for consumption in the country or is exported for sale out of the country. The sale of tea inside Assam bears a very small proportion to the tea produced and manufactured by the appellants. Thus the bulk of tea produced and manufactured is carried out of Assam, either for internal consumption in India or for export abroad. Besides the tea carried by rail, a large quantity of tea is carried by road or by inland waterways from Assam to Bengal and in some of these cases, from one part of West Bengal to another part of the same through inland waterways, only a few miles of which pass through the territory of the of Assam. passed the Act which received the assent of the Governor of Assam on April 9, 1954, and came into force on and from June 1, 1954. The purpose of the Act is to levy taxes on certain goods carried by road or inland waterways in the of Assam. On June 30, 1954, the second respondent, the Commissioner of Taxes, Assam, in exercise of the powers conferred upon him by subs. (3) of s. 7 of the Act,, published a notification in bearing date June 21, 1954, by which he notified for general information that the return under the aforesaid Act and the rules made thereunder for the period commencing June 1, 1954 to September 30, 1954, should be furnished by October 30, 1954. The said notification also demanded the furnishing of quarterly returns before January 30, 1955 and April 36, 1955, for the quarters ending December 31, 1954 and March 31, 1955, respectively. The appellants in some of the cases, in pursuance of demand notices, submitted returns to the third respondent, the Superintendent of Taxes, in the prescribed form in respect of tea despatched and carried up to September 30, 1954, under protest. They also paid the tax demanded under protest. The appellants moved under Art. 226 of the Constitution challenging the validity of the said Act and praying for the issue of a writ of mandamus directing the respondents to forbear from giving effect to the provisions of the Act and the notification issued under the Act and/or a writ of prohibition or any other appropriate writ restraining them from taking steps under the provisions of the Act. The appellants challenged the validity of the Act mainly on the grounds that (1) the Act, rules and the notifications under the Act were ultra vires the Constitution, because the Act was repugnant to the provisions of Art. 301 of the Constitution as the tax on carriage of tea through the of Assam had the effect of interfering with the freedom of trade, commerce and intercourse; (2) that tea being a controlled industry under the provisions of the Tea Act XXIX of 1953, the Union Government alone had the power to regulate the manufacture, production, distribution or transport of tea and the jurisdiction of was thus completely ousted; (3) that the tax under the Act was nothing but a duty of excise, in substance, though not in form, and was thus an encroachment on the Central legislative field within the meaning of entry 84 of the Union List. The impugned Act was also challenged on the ground that it was discriminatory and thus void under Art. 14 of the Constitution. The competence of to legislate on the subject was also questioned. The respondents opposed those petitions under Art. 226 of the Constitution in . It was denied by the that the Act or the rules made thereunder or the notifications issued thereunder were ultra vires the Constitution or that the Act contravened the provisions of Art. 301 of the Constitution or that it was an encroachment on the sphere of or was in any way in conflict with the provisions of the Tea Act XXIX of 1953. The case of the respondents was that the Act was in pith and substance, a legislation to levy tax on certain classes and types of goods carried by road or inland waterways, strictly within entry no. 56 of the List. It was also asserted that the Act was within the legislative competence of and was not within the terms of the prohibition contained in Art. 301 of the Constitution. These petitions were heard by of , which, by its judgment and order dated June 6, 1955, dismissed them holding that the Act was not unconstitutional. Two separate, but concurring judgments, were delivered by , C. and , The learned Chief Justice, in the course of his judgment, held that the Act contemplated imposition of a tax on transport or carriage of goods within the Meaning of entry 56 of List II and did not amount to interference with the freedom of trade and commerce within the meaning of Art. 301 of the Constitution ; that the pith and substance of the impugned Act was that it was a taxing legislation which was not directly concerned with trade and commerce, though it might indirectly entrench on the field of trade and commerce and that Art. 301 was not directly concerned with taxing laws. He also held that the impost levied by the Act was not in the nature of an excise duty and that there was no substance in the contention that it encroached upon entry 84 of the Union List 1. It was also held that the impugned Act did not, in any way, come in conflict with the control of the tea industry introduced by the Central Legislation, namely, the Tea Act XXIX of 1953. ", ", J., examined the provisions of the impugned Act in great detail and came to the conclusion that the element of carriage was expressly made a condition of liability to tax under the impugned Act and it was, therefore, distinguishable from a duty of excise and came directly under entry 56 of List 11. On the crucial question arising in this case, his conclusion was that taxation per se has not the effect of abridging or curtailing the freedom contemplated by Art. 301 ; that Arts. 302 and 304 restrict the powers of and in the matter of legislation under entries 42 of List 1, 26 of List 11 and 33 of List III and that restrictions properly so called on the movement of goods and traffic must find their justification from the provisions of Part XIII of the Constitution ; that the impugned Act made provision for taxation which did not directly impinge upon the freedom of trade, commerce and intercourse within the meaning of Art. ", "301. His view also was that in some cases taxation may have the effect of placing restrictions on movement of goods and traffic, and if it has that effect, it comes within the mischief of Art. 301. In the result, his conclusion was that the impugned Act in its pith and substance fell within the ambit of entry 56 of List 11. He also examined the terms of the legislation, Tea Act No. XXIX of 1953, and came to the conclusion that the impugned Act did not trespass upon the field of the controlled industry of tea. His conclusion with reference to the argument of discrimination based on Art. 14 was that there was no proof forthcoming of any real discrimination between persons and things. With these conclusions , J., the third Judge, entirely agreed. From the judgment of the appellants have come up in appeal on certificates granted by . The two petitions under Art. 32 of the Constitution were filed on behalf of two other producers of tea. They raise the same questions as arise for determination in the three appeals from the decision of . They have all been heard together And will be dealt with by a common judgment. Mr. , on behalf of the appellants, contended that the impugned Act imposed fetters on the free flow of trade and commerce in respect of tea and jute, the two commodities dealt with by the Act and, A therefore,, contravened the provisions of Art. 301 of the Constitution; that the legislation was beyond the legislative competence of and was not authorised by entry 56 in List II ; that the tea industry was a controlled industry as declared by and directly came under entry 52 of List 1 ; that it was a colourable piece of legislation which, in its true effect, was a levy of a duty of excise which could only be done by the , and finally, that it contravened Art. 14 of the Constitution. The learned Attorney General on behalf of the State of Assam as also of the contended, on the other hand, that taxation simpliciter was not within the terms of Art. 301. Taxation as such is not a restriction within the meaning of Part XIII. It is an attribute of sovereignty, which is not justiciable. The power to tax is a peculiar legislative function with which the courts are not directly concerned and that, therefore, the freedom contemplated by Art. 301 does not mean freedom from taxation and that taxation is not included within the connotation of the term. \" Restriction \" in the context of Part XIII meant legislation which had the effect of impeding the free flow of goods and traffic by erection of tariff walls, for example, a tariff wall, if erected by a , may be justiciable, but not legislation simply imposing a tax for purposes of revenue. He further contended that Part XII of the Constitution is a self-contained part dealing with finance etc., even as Part XIII is a selfcontained part dealing with trade, commerce and intercourse within the territory of India. He emphasis- ed that the American and Australian decisions are no guide to the decision of the points in controversy in the present case, as the framework of their respective constitutions was entirely different from the Indian Constitution. Particularly, the Australian Constitution did not contain anything corresponding to Parts III and XII of our Constitution. According to his contention \" freedom \" in Part XIII meant freedom from discriminatory taxation and freedom from trade barriers. The Advocate-General of the several States who appeared in this case supported the viewpoint stressed by the learned Attorney General. The most important question that falls to be determined in this batch of cases is whether the impugned Act infringes the provisions of Part XIII of the Constitution, with particular reference'to Art. 301. Part XIII is headed \"Trade Commerce and Intercourse within the Territory of India\". Article 301 , which is the opening Article in this Part is in very general terms, which are as under:- \" Subject to the other provisions of this part, trade, commerce and intercourse throughout the territory of India shall be free \". ", "It is clear that this Part is not subject to the other provisions of the Constitution and the generality of the words used in Art. 301 is cut down only by the provisions of the other Articles of this Part ending with Art. 307. It has not been and it could not be contended that the generality of the expressions used in Art. 301 admit of any Exceptions or explanations not occurring in this Part itself, nor has it been contended that trade, commerce and intercourse are subject to any other fetters. All parties are agreed that trade, commerce and intercourse throughout the territory of India have been emphatically declared by the Constitution to be free, but there is a wide divergence of views on the answer to the question \" free from what ?\" It has been contended on behalf of the appellants that the answer to this question must be that trade, commerce and intercourse throughout India, shall be free from everything including taxation. On the other hand, the contention on behalf of and is that the freedom envisaged by Art. 301 does not include immunity from taxation and that freedom means that there shall be no trade barriers or tariff walls shutting out commodities, traffic and intercourse between individuals, and no shutting in. ", "In order fully to appreciate the implications of the provisions of Part XIII of the Constitution, it is necessary to bear in mind the history and background of those provisions. The Constitution Act of 1935 (Government of India Act, 26 ('Teo. 5, Ch. 2) which envisaged a federal constitution for the whole of India, including what was then Indian India in contradistinction to British India, which could not be fully implemented and which also introduced full provincial autonomy enacted s. 297 prohibiting certain restrictions on internal trade in these terms:- \" 297.-(1) No Provincial Legislature or Government shall- ", "(a) by virtue of the entry in the Provincial Legislative List relating to trade and commerce within the Province, or the entry in that list relating to the production, supply, and distribution of commodities, have power to pass any law or take any executive action prohibiting or restricting the entry into, or export from the Province of goods of any class or description ; or ", "(b) by virtue of anything in this Act have power to impose any tax, cess, toll or due which, as between goods manufactured or produced in the Province and similar goods not so 'manufactured or produced, discriminates in favour of the former, or which, in the case of goods manufactured or produced outside the Province, discriminates between goods manufactured or produced in one locality and similar goods manufactured or produced in another locality. (2) Any law passed in contravention of this section shall, to the extent of the contravention, be invalid.\" It will be noticed that the prohibition contained in the section quoted above applied only to Provincial Governments and Provincial Legislatures with reference to entries in the Provincial Legislative List relating to trade and commerce within the Province and to production, supply and distribution of commodities. That section dealt with prohibitions or restrictions in respect of import into or export from a Province, of goods generally. It also dealt with the power to impose taxes etc. and prohibited discrimination against goods manufactured or produced outside a Province or goods produced in different localities. Part XIII of the Constitution has introduced all those prohibitions, not only in respect of State Legislatures, but of also. In other words, Part XIII enlarges the scope of the inhibitions and lays down the limits within which the Union or may legislate with reference to trade, commerce and intercourse inter-State, intrastate and throughout the territory of India. In this connection it has got to be remembered that before the commencement of the Constitution about two-thirds of India was directly under British rule and was called ' British India' and the remaining about one-third was being directly ruled by the Princes and was known as Native States. There were a large number of them with varying degrees of sovereignty vested in them. Those rulers had, broadly speaking, the trappings of a Sovereign State with power to impose taxes and to regulate the flow of trade, commerce and intercourse. It is a notorious fact that many of them had erected trade barriers seriously impeding the free flow of trade, commerce and intercourse, not only shutting out but also shutting in commodities meant for mass consumption. Between the years 1947 and 1950 almost all the Indian States entered into engagements with and ultimately merged their individualities into India as one political unit, with the result that what was called British India, broadly speaking, became, under the Constitution, Part A States, and subject to certain exceptions not relevant to our purpose, the Native States became Part B States. We also know that before the Consti- tution introduced the categories of Part A States, Part B States and Part C States (excluding Part D relating to other territories), Part B States themselves, before their being constituted into so many units, contained many small States, which formed themselves into Unions of a number of States, and had such trade barriers and custom posts, even inter se. But even after the merger, the Constitution had to take notice of the existence of trade barriers and therefore had to make transitional provisions with the ultimate objective of abolishing them all. Most of those Native States, big or small, had their own taxes, cesses, tolls and other imposts and duties meant not only for raising revenue, but also as trade barriers and tariff walls. It was in the background of these facts and circumstances that the Constitution by Art. 301 provided for the abolition of all those trade barriers and tariff walls. When for the first time in the history of India the entire territory within the geographical boundaries of India, minus what became Pakistan, was knit into one political unit, it was necessary to abolish all those trade barriers and custom posts in the interest of national solidarity, economic and cultural unity as also of freedom of trade, commerce and intercourse. ", "It is in the background of these facts and circumstances that we have to determine the ambit of the freedom contemplated by Art. 301. That Article envisages freedom of trade and commerce with reference to different parts of India as also freedom of movement of individuals in relation to their trade and other activities. Hence, Art. 301 has reference not only to trade and commerce, as ordinarily understood in common parlance, but also in relation to individuals who have to move with their goods and commodities throughout the length and breadth of the country. Movement of traffic in goods and commodities as also of persons can be by railway or airways, by road or by inland waterways etc., etc. Carriage of goods and passengers by railway, by sea or by air or by national waterways is covered by entry 30 of List 1 and taxes on railway fares and freights and terminal taxes on goods or passengers carried by railway, sea or air come under the purview of entry 89 in the same List. On the other hand, taxes on goods and passengers carried by road or inland waterways come under entry 56 of List II ( List). It will thus be seen that the Constitution makers contemplated taxes on goods and passengers to be imposed by the on journeys covered by railway or by sea or by air; and by on journeys by road or inland waterways. The power to tax is inherent in sovereignty. The sovereign , in some cases the , in other cases the , has the inherent power to impose taxes in order to raise revenue for purposes of . Such a sovereign power ordinarily is not justiciable, simply because the in its legislative department has to determine the policy and incidence of taxation. It is the -ate which determines, through the , what taxes to impose, on whom and to what extent. The judicial department of the is not expected to deal with such matters, because it is not for the courts to determine the policy and incidence of taxation. This power of the to raise finances for Government purposes has been dealt with by Part XII of the Constitution, which contains the total prohibition of levy or collection of tax, except by authority of law ( Art. 265 ). This Part also deals with the distribution of revenue between the and the s. It does not clearly demarcate the taxing authority as between the and the s and therefore had to indicate in great detail what taxes shall be levied for the benefit of the or for the benefit of the s and what taxes may be levied and collected by the for the benefit of the s and the principle according to which those revenues have to be distributed amongst the constituent s of the . In short, Part XII is a self-contained series of provisions relating to the finances of the and of the s and their interrelation and adjustments (ignoring the provisions in Chapter 2 of that Part relating to borrowing and Chapter 3 relating to property contracts etc.). Like Part XIII, Part XII also is not expressed to be subject to the other provisions of the Constitution. Hence, both Parts XII and XIII are meant to be self-contained in their respective fields. It cannot, therefore, be said that the one is subject. to the other. But it has been argued on behalf of the appellants that the pro. visions of Art. 304 indicate that taxation is within the purview of the overriding provisions, as they have been characterised, of Art. 301. But a close examination of the provisions of Art. 304 would show that it is divided into two parts, viz., (1) dealing with imposition of discriminatory taxes by a ; and (2) relating to imposition of reasonable restrictions, thus showing that imposition of taxes, discriminatory or otherwise, is a class apart from imposition of reasonable restrictions on freedom of trade, commerce and intercourse. The second part of Art. 304 dealing with imposition of reasonable restrictions on freedom of trade, commerce and intercourse by a is on a line with the imposition by of such restrictions between one and another or within any part of the territory of India in public interest, contained in Art. 302. The provisions of Art. 303 further make it clear that the giving Of preference to one over another or discrimination between one and another are clearly within the purview of Part XIII, that is to say, they are calculated to impede the freedom of trade, commerce and intercourse. There is a prohibition against as also against the of a making any law giving preference to one over another or making or authorising the making of any discrimination between one and another. But the most significant words in connection with giving preference or making discrimination as envisaged in Art. 303 are with reference to \" any entry relating to trade and commerce in any of the Lists in the Seventh Schedule\", that is to say, entry 42 in List 1, entry 26 in List II and entry 33 in List III of the Seventh Schedule. Hence, any legislation under those entries which has the effect of directly interfering with trade, commerce and intercourse being free throughout the territory of India has to be struck down as infringing the provisions of Art. 301. But in this matter also the Constitution makers had before them situations of emergency, say for example, created by drought or overflooding resulting in scarcity of commodities like foodgrains etc. In such a situation, has been armed with the power to grant preference to one over another or to make a discrimination as between two and more s if the Law dealing with such a situation declares that it is necessary to do so in order to deal with an emergency like the one referred to above. In this connection it may not be emphasised that Art. 303 has not been very accurately worded inasmuch as the non obstante clause, with which the Article opens, has reference only to Art. 302 , which empowers to impose by law restrictions on the freedom of trade, commerce or intercourse, inter- or intra, in public interest. But the non obstante clause is immediately followed by reference not only to but also to the of a which are armed with the power of giving preference or making discrimination as aforesaid in respect of the entries relating to trade and commerce in any of the lists in the Seventh Schedule. Here, no reference is made to intercourse. But as the present controversy is not concerned with the freedom of intercourse, as distinguished from the freedom of trade and commerce, no more need be said about that omission. ", "Learned counsel for the appellants vehemently argued that the freedom contemplated by Art. 301 Must be construed in its most comprehensive sense of freedom from all kinds of impediments, restraints and trade barriers, including freedom from all taxation. In my opinion, there is no warrant for such an extreme position. It has to be remembered that trade, commerce and intercourse include individual freedom of movement of every citizen of India from State to State, which is also guaranteed by Art. 19(1)(d) of the Constitution. The three terms used in Art. 301 include not only free buying and selling, but also the freedom of bargain and contract and transmission of informa- tion relating to such bargains and contracts as also transport of goods and commodities for the purposes of production, distribution and consumption in all their aspects, that is to say, transportation by land, air or water. They must also include commerce not only in goods and commodities, but also transportation of men and animals by all means of transportation. Commerce would thus include dealings over the telegraph, telephone or wireless and every kind of contract relating to sale, purchase, exchange etc. of goods and commodities. Viewed in this all comprehensive sense taxation on trade, commerce and intercourse would have many ramifications and would cover almost the entire field of public taxation, both in the and in the State Lists. It is almost impossible to think that the makers of the Constitution intended to make trade, commerce and intercourse free from taxation in that comprehensive sense. If that were so, all laws of taxation relating to sale and purchase of goods on carriage of goods and commodities, men and animals, from one place to another, both inter-State and intraState, would come within the purview of Art. 301 and the proviso to Art. 304 (b) would make it necessary that all Bills or Amendments of pre- existing laws shall have to go through the gamut prescribed by that proviso. That will be putting too great an impedi- ment to the power of taxation vested in the States and reduce the States' limited sovereignty under the Constitution to a mere fiction. That extreme position has, therefore, to be rejected as unsound. ", "In this connection, it is also pertinent to bear in mind that all taxation is not necessarily an impediment or a restraint in the matter of trade, commerce and intercourse. Instead of being such impediments or restraints, they may, on the other hand, provide the wherewithal; to improve different kinds of means of transport, for example, in cane growing areas, unless there are good roads, facility for transport of sugarcane from sugarcane fields to sugar mills may be wholly lacking or insufficient. In order to make new roads as also to improve old ones, cess on the grower of cane or others interested in the transport of this commodity has to be imposed, and has been known in some parts of India to have been imposed at a certain rate per maund or ton of sugarcane transported to sugar factories. Such an imposition is a tax on transport of sugarcane from one place to another, either intrastate or inter-State. It is the tax thus realised that makes it feasible for opening new means of communication or for improving old ones. It cannot, therefore, be said that taxation in every case must mean an impediment or restraint against free flow of trade and commerce. Similarly, for the facility of passengers and goods by motor transport or by railway, a surcharge on usual fares or freights is levied, or may be levied in future. But for such a surcharge, improvement in the means of communication may not be available at all. Hence, in my opinion, it is not correct to characterise a tax on movement of goods or passengers as necessarily connoting an impediment, or a restraint, in the matter of trade and commerce. That is another good reason in support of the conclusion that taxation is not ordinarily included within the terms of Art. 301 of the Constitution. ", "In my opinion, another very cogent reason for holding that taxation simpliciter is not within the terms of Art. 301 of the Constitution is that the very connotation of taxation is the power of the to raise money for public purposes by compelling the payment by persons, both natural and juristic, of monies earned or possessed by them, by virtue of the facilities and protection afforded by the . Stich burdens or imposts, either direct or indirect, are in the ultimate analysis meant as a contribution by the citizens or persons residing in the or dealing with the citizens of the , for the support of the Govern- ment, with particular reference to their respective abilities to make such contributions. Thus public purpose is implicit in every taxation, as such. There. fore, when Part XIII of the Constitution speaks of imposition of reasonable restrictions in public interest, it could not have intended to include taxation within the generic term \" reasonable restrictions \". This has laid it down in the case of (1) that imposition and collection of taxes by authority of law envisaged by Art. 265 is outside the scope of the expression \" deprivation of property \" in Art. 31(1) of the Constitution. Reasonable restrictions as used in Part III or Part XIII of the Constitution would in most cases be less (1) S.C.R. 127,136. ", "829 ", "than total deprivation of property rights. Hence, Part XII dealing with finance etc. as already indicated, has been treated as a Part dealing with the sovereign power of the to impose taxes, which must always mean imposing burdens on citizens and others, in public interest. If a law is passed by, the imposing a tax which in its true nature and effect is meant to impose an impediment to the free flow of trade, commerce and intercourse, for example, by imposing a high tariff wall, or by preventing imports into or exports out of a , such a law is outside the significance of taxation, as such, but assumes the character of a trade barrier which it was the intention of the Constitution makers to abolish by Part XIII. The objections against the contention that taxation was included within the prohibition contained in Part XIII may thus be summarised: (1) Taxation, as such, always implies that it is in public interest. Hence, it would be outside particular restrictions, which may be characterised by the courts as reasonable and in public interest. (2) The power is vested in a sovereign to carry on Government. Our Constitution has laid the foundations of a welfare , which means very much expanding the scope of the activities of Government and administration, thus making it necessary for the to impose taxes on a much larger scale and in much wider fields. The legislative entries in the three Lists referred to above empowering and the Governments to impose certain taxations with refe- rence to movement of goods and passengers would be rendered ineffective, if not otiose, if it were held that taxation simpliciter is within the terms of Art. 301. (3) If the argument on behalf of the appellants were accepted, many taxes, for example, sales tax by the and by the s, would have to go through the gamut prescribed in Arts. 303 and 304, thus very much detracting from the limited sovereignty of the s, as envisaged by the Constitution. (4) Laws relating to taxation, which is essentially a legislative function of the , will become justiciable and every 106 time a taxation law is challenged as unconstitutional, the will have to satisfy the courts a course which will seriously affect the division of powers on which modern constitutions, including ours, are based. (5) Taxation on movement of goods and passengers is not necessarily an impediment. ", "That conclusion leads to a discussion of the other extreme position that taxation is wholly out of the purview of Art. ", "301. That extreme position is equally untenable in view of the fact that Art. 304 contains, and Art. 306 , before it was repealed in 1956, contained, reference to taxation for certain purposes mentioned in those Articles. But Art. 306 , which now stands repealed, contained references to tax or duty on the import of goods into one from another or on the exports of goods from one to another. Such imposts were really in the nature of impediments to the free flow of goods and commodities on account of customs barriers, which it was the intention of Art. 301 to abolish. Similarly, Art. 304 while recognising the power of a to tax goods imported inter-, insists that a similar tax is imposed on goods manufactured or produced within the . The Article thus brings out the clear distinction between taxation as such for the purpose of revenue and taxation for purposes of making discrimination or giving preference, both of which are treated by the Constitution as impediments to free trade and commerce. In other words, so long as the impost was not in the nature of an impediment to the free flow of goods and commodities between one and another, including in this expression territories also, its legality was not subject to an attack based on the provisions of Part XIII. But that does not mean that s derive their power of taxation by virtue of what is contained in Art. 304. Article 304 only left intact such power of taxation, but contained the inhibition that such taxes shall not be permitted to have the effect of impeding the free flow of goods and commodities. ", " Article 301 , with which Part XIII commences, contains the crucial words \" shall be free \" and provides the key to the solution of the problems posed by the whole Part. The freedom declared by this Article is not an absolute freedom from all legislation. As already indicated, the several entries in the three Lists would suggest that both and have been given the power to legislate in respect of trade, commerce and intercourse, but it is equally clear that legislation should not have the effect of putting impediments in the way of free flow of trade and commerce. In my opinion, it is equally clear that the freedom envisaged by the Article is not an absolute freedom from the incidence of taxation in respect of trade, commerce and intercourse, as shown by entries 89 and 92 A in List 1, entries 52, 54 and 56 to 60 in List II and entry 35 in List ", "111. All these entries in terms speak of taxation in relation to different aspects of trade, commerce and intercourse. The and , therefore, have the power to legislate by way of taxation in respect of trade, commerce and intercourse, so as not to erect trade barriers, tariff walls or imposts, which have a deleterious effect on the free flow of trade, commerce and intercourse. That freedom has further been circumscribed by the power vested in or in to impose restrictions in the public interest. has further been authorised to legislate in the way of giving preference or making discrimination in certain strictly limited circumstances indicated in el. (2) of Art. 303. Thus, on a fair construction of the provisions of Part XIII, the following propositions emerge: (1) trade, commerce, and intercourse throughout the territory of India are not absolutely free, but are subject to certain powers of legislation by or ; (2) the freedom declared by Art. 301 does not mean freedom from taxation simpliciter, but does mean freedom from taxation which has the effect of directly impeding the free flow of trade, commerce and intercourse; (3) the freedom envisaged in Art. 301 is subject to non-discriminatory restrictions imposed by in public interest ( Art. 302 ); (4) even discriminatory or preferential legisla- ", "832 ", "tion may be made by for the purpose of dealing with an emergency like a scarcity of goods in any part of India ( Art. 303(2)); (5) reasonable restrictions may be imposed by the Legislature of a State in the public interest ( Art. 304(b)); (6) non-discriminatory taxes may be imposed by the Legislature of a State on goods imported from another State or other States, if similar taxes are imposed on goods produced or manufactured in that State ( Art. 304(a)); and lastly (7) restrictions imposed by existing laws have been continued, except in so far as the President may by order otherwise direct ( Art. 305 ). ", "After having discussed the arguments for and against the proposition that Art. 301 includes within its large sweep taxation simpliciter, I now proceed to discuss the terms of the impugned Act in order to find out whether in the light of the discussion above, any of its provisions are liable to be struck down as unconstitutional, because they infringe Art. 301 , as contended on behalf of the appellants. The Act , as the preamble shows, is intended to \" impose a tax on certain goods carried by road or inland waterways Dealer \" has been defined in s. 2(4) as under: - ", "\"Dealer' means a person who owns jute in bales before it is carried by motor vehicle, cart, trolley, boat, animal and human agency or any other means except railways or airways and includes his agent.\" ", "Producer has been defined by cl.'(12) of s. 2 as follows:- \" 'Producer' means a producer of tea and includes the person in charge of the garden where tea is produced \". Section 3 , which is the charging section, provides that manufactured tea in chests carried by motor vehicle, etc., except railways and airways, shall be liable to a tax at a certain rate per pound of such tea and that this tax shall be realised from the producer. It also provides that jute carried in bales by motor vehicle, etc., except railways and airways, shall be liable to a tax at a certain rate per maund on such jute, which shall be realised from the dealer. It is not necessary to set out the rate of taxes aforesaid, because 'no argument was advanced to the effect that they were oppressive or excessive. The tax on manufactured tea in chests is to be paid by the producer, which term includes the person in charge of the garden where tea is produced. This provision has occasioned the argument that it is an excise duty in the garb of a tax and will be dealt with later in the course of this judgment. The tax on jute carried in bales is made realisable from the dealer which means a person who owns the jute in bales. Section 6 lays down the taxing authorities. Section 7 requires every producer and dealer to furnish returns of such tea or such jute as have been made liable to tax under s. 3 , as aforesaid. Section 8 makes provision for licensing of balers, which means persons who own or possess a pressing machine for the compression of jute into bales. Section 9 lays down the procedure of assessment and s. 10 the procedure for cancellation of assessment in certain cir- cumstances. Section 11 lays down the procedure for assessment in such cases as have escaped assessment or there has been an evasion of the tax. It is not necessary to refer to the other provisions of the Act, because they are not relevant to the arguments advanced at the . It will be seen from the bare summary of the relevant provisions of the statute that it is a taxing statute simpliciter without the least suggestion even of any attempt at discrimination against dealers and producers outside the State of Assam or of preference in favour of those inside the State. On the face of it, therefore, the Act does not suffer from any of the vices against which Part XIII of the Constitution was intended. It has not been suggested that the Act imposes a heavy burden on the dealer or the producer as the case may be. On the terms of the Statute, it cannot be said that it is intended to put obstacles or impediments in the way of free flow of traffic in respect of jute and tea. On the face of it, it would not be in the interest of the State of Assam to put any such impediments, because Assam is a large producer of those commodities and the market for those commodities is mainly in Calcutta. ", "834 ", "In those I circumstances, it is difficult, if not impossible, to come to the conclusion that the Act comes within the purview of Art. 301 of the Constitution. If that is so, no further consideration arising out of the other provisions of Part XIII of the Constitution calls for any decision. ", "Having thus disposed of the main ground of attack against the constitutionality of the Act based on Art. 301 of the Constitution, it is necessary to advert to the other contentions raised on behalf of the appellants. It has been contended that the Act is beyond the legislative competence of . We have, therefore, to address ourselves to the question whether or not it is covered by any of the entries in List 11 of the Seventh Schedule. Entry 56, in its very terms, \" Taxes on goods and passengers carried by rail or in inland waterways \", completely covers the impugned Act. There is no occasion in this case to take recourse to the doctrine of pith and substance, inasmuch as the Act is a simple piece of taxing statute meant to tax transport of goods, in this case jute and tea, by road or on inland waterways. In my opinion, it is a very simple case of taxation completely covered by entry 56, but the argument against the competence of has been sought to be supported by the subsidiary contention that though in form it is a tax on the transport of goods within the terms of entry 56, in substance it is an imposition of excise duty within the meaning of entry 84 in List 1 of the Seventh Schedule, but, in my opinion, there is no substance in this contention for the simple reason that so long as jute or tea is not sought to be transported from one place to another, within the or outside the , no tax is sought to be levied by the Act. It is only when those goods are put on a motor truck or a boat or a steamer or other modes of transport contemplated by the Act, that the occa- sion for the payment of tax arises. A similar argument was advanced in the case of (2), and , C. J., delivering the majority judgment of the , disposed of the argument that the tax in that case was not (2) S.C.R. 1355. ", " ", "on sale of goods, but was, in substance, a duty of excise, in these terms: ", "\" This argument, however, overlooks the fact that under . ", "(ii) the producer or manufacturer became liable to pay the tax not because he produced or manufactured the goods, but because he sold the goods. In other words the tax was laid on the producer or manufacturer only qua seller and not qua manufacturer or producer as pointed out in case (1942) F.C.R. 290. In the words of their Lordships of in , 72 I.A. 91 at p. 103, ' a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods not on sales or the proceeds of sale of goods'. If the goods produced or manufactured in Bihar were destroyed by fire before sale the manufacturer or producer would not have been liable to pay any tax under s. 4(1) read with s. 2(g) , second proviso. As , C. J., said in case, supra, at p. 102, the manufacturer or producer would be liable, if at all, to a sales-tax because he sells and not because he manufactures or produces; and he would be free from liability if he chose to give away everything which came from his factory'.\" (See p. 1369 of the Report). The observations quoted above completely cover the present controversy. The has chosen the dealer or the producer as the convenient agency for collection of the tax imposed by s. 3 , but the occasion for the imposition of the tax is not the production or the dealing, but the transport of those goods. It must, therefore, be held that the Act does what it sets out to do, namely to impose a tax on goods carried by road or on inland waterways. ", "Another line of argument directed to the same end, namely, of attacking the competence of was that it impinged on the provisions of the Tea Act , XXIX of 1953. It was argued that the tea industry was a controlled one within the competence . The Tea Act declared that it was expedient in the public interest that the should take the tea industry under its control. With a view to controlling the industry in public interest the Act established (s. 4) whose function it was, inter alia, to regulate the production and extent of cultivation of tea, of improving the quality of tea, of promoting co-operative effort among growers and manufacturers of tea, etc., etc. (s. 10). With the objectives aforesaid, Chapter III lays down provisions for the control over the extension of tea cultivation and Chapter IV deals with provisions for control over the export of tea and tea seed. Chapter V lays down provisions for the imposition of duty of customs on export of tea outside India and the proceeds of the cess thus levied have to be credited to . Out of that Fund, called , the expenses of the establishment created by the Tea Act have to be met. The rest of the provisions of the Act are meant to implement the main provisions of the Act. There-are no provisions of the Tea Act which can be said to come into conflict with the provisions of the impugned Act. In our opinion, therefore, this ground of attack also fails. ", "A third line of argument against the constitutionality of the Act was that it is extra-territorial in its operation in so far as it purports to tax producers and dealers who may not be residents of the State of Assam. This argument has been advanced in the interest of the appellants and petitioners from West Bengal, who have to carry their goods by road or on waterways passing through the territory of Assam, from one part of West Bengal to another. So far as this group of cases is concerned, the main grievance of the appellants is that no doubt their goods have to pass through a portion of the territory of Assam, but the goods have been produced, packed and transported as merchandise from one part of West Bengal to another part of the same State. It is not denied that there is some real and substantial nexus to support the taxing statute, but it is contended that relatively to the whole journey to be covered by the merchandise, the portion of the territory of Assam covered in that journey is very small. But in judging the validity of a legislation with reference to the contention based on extra-territoriality it is not relevant to consider the question of the proportion between the extent of territorial nexus to the whole length of the journey. If goods belonging to or carried by the appellants traverse any of the territory of Assam the taxation cannot be successfully assailed on this ground, once it is held that it was within the legislative competence of the imposing the tax in question. See in this connection the observations of this in (1) at pp. 1369 to 1371, where , C. J., speaking for the majority of the , has examined the theory of nexus with reference to a large body of case-law bearing on the question. I respectfully adopt that line of reasoning and hold that the Act does not suffer from the vice of extra-territoriality. It is true that the incidence of the taxation may fall upon per.sons not ordinarily residing in the State of Assam or upon goods not produced in Assam, but, in this connection, it is enough to point out that what has been said above in respect of the tax being in the nature of a duty of excise applies which equal force to this part of the argument also. The tax is leviable from such goods as traverse in their journey any part of the territory of Assam, not because the owners or the producers are residents of Assam, but because the waterway or the roadway situate in the territory of Assam has been utilised for a portion of the journey. It is clear, therefore, that there is no infirmity attaching to the Act on the ground that it is extra-territorial in its operation. ", "It only remains to consider the last ground of attack, namely, that the Act is discriminatory in character and thus infringes Art. 14 of the Constitution. In this connection, it has been argued that only tea in chests and jute in bales have been selected for taxation, leaving the same commodities in other hands or in other forms, or in other receptacles (1) S.C.R. 1353. ", "107 ", "838 ", "free from the incidence of the taxation in question. The has chosen to tax the transport over land or over waterways of those commodities, in chests or in bales, apparently because those are the most convenient and usually employed methods of packing for carriage of those goods to long distances. Hence, it is not a case of choosing for the purposes of taxation one class of goods in preference to another class of the same variety. The was out to tax the transport of those commodities and must be presumed to have selected the most convenient way of doing it. It has not been suggested that any large amount of such commodities is transported over long distances, otherwise than in chests or bales. Furthermore, if the has to tax something, it is not bound to tax that thing in all its forms and varieties. It may pick and choose with a view to raising such amount of revenue as it sets out to do. It is not for the courts to say that there were other ways of doing the thing or that all forms and varities should have been brought under the scope of the taxation. It is open to the to impose a tax in a form and in a way which it deems most convenient for the purposes of collection and calculation of the tax. ", "As all the grounds of attack raised against the con- stitutionality of the Act fail, the appeals and the petitions, in my opinion, should be dismissed with costs. I have deliberately refrained from making references to or relying upon decisions from other countries like the U. S. A. or Australia, because the cases decided in those countries cannot be any guide for the solution of the problems raised in this case inasmuch as the framework of the Constitution in those countries is not in pari materia with ours. Any precedents deciding cases on the construction of statutes, which are worded differently from ours, cannot, in my opinion, be a safe guide for the decision of controversies raised in terms of our Constitution. ", "I regret to have to differ from the majority of the , but my only justification for taking a different view is that my reading of Part XIII of the Constitution does not justify the inference that taxation simpliciter is within the terms of Art. 301 of the Con- stitution. ", " vexed question posed by the construction of the provisions of Part XIII Of A the Constitution which has been incidentally discussed in some reported decisions of this Court falls to be Ga considered in the present group of cases. This group consists of three appeals brought to this Court with a certificate issued by under Art. 132 and two petitions filed under Art. 32. The three appellants are tea companies, two of which (Civil Appeal No. 126 of 1958 and Civil Appeal No. 128 of 1958) carry on their trade of growing tea in the District of Sibsagar in Assam while the third (Civil Appeal No. 127 of 1958) carries on its trade in Jalpaiguri in West Bengal. All the three companies which would be described hereafter as the appellants carry their tea to Calcutta in order that it may be sold in the Calcutta market for home consumption or export outside India. Tea produced in Jalpaiguri has also to pass through a few miles of territory in the State of Assam, while the tea produced in Assam has to go all the way through Assam to reach Calcutta. It appears that a very small pro-portion of tea produced and manufactured in Assam finds a market in Assam itself; bulk of it finds its custom in the market at Calcutta. Besides the tea which is carried by rail a substantial quantity has to go by road or by inland waterways and as such it becomes liable to pay the tax leviable under the Assam Taxation (on goods carried by Roads or Inland Waterways) Act , 1954 (Act XIII of 1954) (hereafter called the Act). The Act has been passed by in order to provide for the levy of a tax on certain goods carried by road or inland waterways in the State of Assam and it has received the assent of the Governor on April 9,1954. On behalf of the State of Assam, which will be described hereafter as respondent, its officers required the appellants to comply with the several requirements imposed by the Act, and made tax demands on them in respect of the tea carried by them. The tax thus demanded was paid by the appellants under protest, and soon thereafter petitions were filed in under Art. 226 challenging the validity of the Act as well as the tax demands made by the officers of the respondent. By J. their respective petitions the appellants prayed that a writ of mandamus should issue directing the respondent and its officers to forbear from giving effect to the provisions of the Act and from otherwise enforcing it against the appellants. The petitioners also claimed alternatively a writ of prohibition or any other appropriate writ restraining the respondent and its officers from enforcing the Act against the appellants. That is how the validity of the Act came before for judicial scrutiny. ", "The appellants challenged the vires of the Act on several grounds. The principal ground, however, was that the Act had violated the provisions of Art. 301 of the Constitution, and since it did not comply with the provisions of Art. 304(b) it was ultra vires. It was also urged that tea was a controlled industry under the provisions of Act 29 of 1953, and so it was the Union Government alone which was competent to regulate the manufacture, production, distribution or transport of the said commodity ; that being so was not competent to pass the Act. The validity of the Act was further challenged on the, ground that, though the Act purported to have been passed under Entry 56 of List 11, in substance and in reality it was a duty of excise and as such it could be enacted only under Entry 84 of List 1. According to the appellants the Act also suffered from the vice that it was violative of the fundamental right of equality before the law guaranteed by Art. 14. The correctness of these contentions was disputed by the respondent. It urged that the Act was perfectly within the competence of under Entry 56 of List II and that the provisions of Part XIII were wholly inapplicable to it. The respondent further pleaded that Art. 14 had not been violated and that there was no substance in the argument that as controlled industry it is only the Union Government which could deal with it or that in reality the Act bad imposed a duty of excise. ", "The petitions filed by the appellants were heard by a Special Bench of . All the pleas raised by the appellants were rejected by , C. J. and J., who delivered,, separate but concurring judgments. The appellants' then applied for and obtained a certificate from under Art. 132 ; that is how the three appeals have come to this Court, and they raise for our decision all the points which were argued before . Naturally the principal contention which has been urged before us at length centres round the applicability of Part XIII. ", "The two petitions filed under Art. 32 raise substantially the same question. The petitioners are tea companies which carry on the trade of growing and manufacturing tea in Jalpaiguri in West Bengal. The respondent has attempted to subject the petitioners to the provisions of the Act, and the petitioners have challenged the authority of the respondent to levy a tax against them under the Act on the ground that the Act is ultra vires. Since the principal question raised in these appeals appeared to be of considerable importance in which other States may also be interested we directed that notice should be issued to the Attorney-General of India and the Advocates-General in all the States of India. Accordingly the Attorney. General appeared before us and the States of Bihar, Madras, Punjab, Rajasthan and Uttar Pradesh have also been heard. The challenge to the vires of the Act on the ground that it contravenes Art. 301 necessarily raises the question about the construction of the relevant provisions in the said Part. Art. 301 with which Part XIII begins provides that \" subject to the other provisions of this Part trade, commerce and intercourse through. out the territory of India shall be free \". The appellants contend that this provision imposes a limitation on the legislative power of the State Legislatures as well as the , and the vires of the Act will have to be judged on that basis. The words used in Art. 301 are wide and unambiguous and it would be unreasonable to exclude from their ambit a taxing law which restricts trade, commerce or intercourse either directly or indirectly. On the other band, the respondent the Attorney-General, and the other States have urged that taxing laws stand by themselves; 'they are governed by the provisions of Part XII and no provision of Part XIII can be extended to them. In the alternative it has been suggested that the provisions of Part XIII should be applied only to such legislative entries in the Seventh Schedule which deal with trade, commerce and intercourse. This alternative argument would bring within the purview of Part XIII Entry 42 in List I which refers to interState trade and commerce, Entry 26 in List II which deals with trade and commerce, within the State subject to the provisions of Entry 33 in List III, and Entry 33 in List III which deals with trade and commerce as therein specified. The arguments thus presented by both the parties appear prima facie to be logical and can claim the merit of attractive simplicity. The question which we have to decide is which of the contentions correctly represents the true position in law. Does truth lie in one or the other contention raised by the parties, or does it lie midway between those contentions ? This problem has to be resolved primarily by adopting a fair and reasonable construction of the relevant Articles in Part XIII; but before we attempt that task it would be relevant to deal with some general considerations. ", "Let us first recall the political and constitutional background of Part XIII. It is a matter of common knowledge that, before the Constitution was adopted, nearly two-thirds of the territory of India was subject to British Rule and was then known as British India, while the remaining part of the territory of India was governed by Indian Princes and it consisted of several Indian States. A large number of these States claimed sovereign rights within the limitations imposed by the paramount power in that behalf, and they pur- ported to exercise their legislative power of imposing taxes in respect of trade and commerce which inevitably led to the erection of customs barriers between themselves and the rest of India. In the matter of such barriers British India was governed by the provisions of s. 297 of the Constitution Act, 1935. To the provisions of this section we will have occasion later to refer during the course of this judgment. Thus, prior to 1950 the flow of trade and commerce was impeded at several points which constituted the boundaries of Indian States. After India attained political freedom in 1947 and before the Constitution was adopted the historical process of the merger and integration of the several Indian States with the rest of the country was speedily accomplished with the result that when the Constitution was first passed the territories of India consisted of Part A States which broadly stated represented the Provinces in British India, and Part B States which were made up of Indian States. This merger or integration of Indian States with was preceded by the merger and consolidation of some of the States interse between themselves. It is with the knowledge of the trade barriers which had been raised by the Indian States in exercise of their legislative powers that the Constitution- makers framed the Articles in Part XIII. The main object of Art. 301 obviously was to allow the free flow of the stream of trade, commerce and intercourse throughout the territory of India. ", "In drafting the relevant Articles of Part XIII the makers of the Constitution were fully conscious that economic unity was absolutely essential for the stability and progress of the federal policy which had been adopted by the Constitution for the governance of the country. Political freedom which had been won, and political unity which had been accomplished by the Constitution, had to be sustained and strengthened by the bond of economic unity. It was realised that in course of time different political parties believing in different economic theories or ideologies may come in power in the several constituent units of the , and that may conceivably give rise to local and regional pulls and pressures in economic matters. Local or regional fears or apprehensions raised by local or regional problems may persuade to adopt remedial measures intended solely for the protection of regional interests without due regard to their effect on the economy of the nation as a whole. The object of Part XIII was to avoid such a possibility. Free movement and exchange of goods throughout the territory of India is essential for the economy of the nation and for sustaining and improving living standards of the country. The provision contained in Art. 301 guaranteeing the freedom of trade, commerce and intercourse is not a declaration of a mere platitude, or the expression of a pious hope of a declaratory character; it is not also a mere statement of a directive principle of policy ; it embodies and enshrines a principle of paramount importance that the economic unity of the country will provide the main sustaining force for the stability and progress of the political and cultural unity of the country. In appreciating the significance of these general consi- derations we may profitably refer to the observations made by , , in v. ) while he was dealing with the commerce clause contained in Art. 1 , s. 8 , cl. 3 of the American Constitution. \" This part of the Constitution \", observed , \" was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together and that in the long run prosperity and salvation are in union and not division \". ", "There is another general consideration which has been pressed before us by the learned Attorney-General and the States to which reference must be made. It is argued that in determining the scope and reach of the freedom embodied in Art. 301 we should bear in mind the fact that to the extent to which the frontiers of this freedom are widened to that extent is the legislative power of the States curtailed or limited. The Legislatures of the States have plenary powers to (1) 294 U.S. 511, 523; 79 L. Ed. 1033, 1038. ", "845 ", "legislate in respect of topics covered by the legislative entries in Parts II and III. If the words used in Art. 301 receive the widest interpretation as contended by the appellants it would obviously mean that would not be able to legislate on several entries in the said Lists without adopting the procedure prescribed by Art. 304(b). In fact it would be unreasonable to impose such a limitation on the legislative power of and thereby affect their freedom of action. Whilst appreciating this argument it may be pertinent to observe that what appears as a curtailment of, or limitation on, the powers of prescribed by Art. 304(b) day, from the point of view of national economy, be characterised as a safeguard deliberately evolved to protect the economic unity of the country ; even so it may be assumed that in interpreting the provisions of Art. 301 and determining the scope and effect of Part XIII we should bear in mind the effect of our decision on the legislative power of the and also of . ", "Having thus referred to some general considerations let us now proceed to examine the question as to whether tax laws are wholly outside the purview of Part XIII. In support of the argument that Part XIII does not apply to tax laws the learned Attorney-General has emphasised the fact that the power to levy a tax is an essential part of sovereignty itself, and he has suggested that this power is not subject to judicial review and never has been held to be so. In this connection he has invited our attention to the observa- tions made in 's \" Constitutional Limitations \" on the power of taxation. 'The power to impose taxes \", says the author, \" is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restriction whatever, except such as rest in the discretion of the authority which exercises it \" (1). The author then has cited the observations of , C. J., in v. Maryland (2) where the learned Chief Justice has (1) 's \" Constitutional Limitations \", Vol. 2, 8th Ed., p. 986. ", "(2) 4 Wheat. 316, 428: 4 L. Ed. 579, 607. ", "108 ", "846 ", "stated that \" the power of taxing the people and their property is essential to the very existence of the government, and may be legitimately exercised on the objects to which it is applicable to the utmost extent to which the government may choose to carry it. The only security against the abuse of this power is found in the structure of the government itself \". Basing himself on this character of the taxing power of the the learned Attorney- General has asked us to hold that Part XIII can have no application to any statute imposing a tax. In our opinion this contention is not wellfounded. The statement of the law on which reliance has been placed is itself expressed to be subject to the relevant provisions of the Constitution; for instance, the same author has observed \" It is also believed that that provision in the Constitution of the United s which declares that the citizens of each state shall be entitled to all the privileges and immunities of the citizens of the several states will preclude any state from imposing upon the property which citizens of other states may own, or the business which they may carry on within its limits, any higher burdens by way of taxation than are imposed upon corresponding property or business of its own citizens\" (p. 1016). Putting the same propositions in terms of our Constitution it cannot be suggested that the power of taxation can, for instance, violate the equality before the law guaranteed by Art. 14 of the Constitution. Therefore the true position appears to be that, though the power of levying tax is essential for the very existence of the government, its exercise must inevitably be controlled by the constitutional provisions made in that behalf. It cannot be said that the power of taxation per se is outside the purview of any constitutional limitations. It is true that in (1) it has been held that \" since there is a special provision in Art. 265 of the Constitution that no tax shall be levied or collected except by authority of law, el. (1) of Art. 31 must be regarded as concerned with deprivation of property otherwise than by the (1) S.C.R. 127. ", "847 ", "imposition or collection of tax, and inasmuch as the right conferred by Art. 265 is not a right conferred by Part III of the Constitution, it could not be enforced under Art. 32\". It is clear that the effect of this decision is no more than this that the protection against the imposition and collection of taxes, save by the authority of law, directly comes under Art. 265 and cannot be said to be covered by cl. (1) of Art. 31. It would be unsafe to assume that this decision is, or was intended to be, an authority for the proposition that the levy of a tax by taxing statute can, for instance, violate Art. 14 of the Constitution. The next question which needs examination is whether tax laws are governed only by Part XII of the Constitution and not by Part XIII. The argument is that Part XII is a self- contained code; it makes all necessary provisions, and so the validity of any taxing statute can be judged only by reference to the provisions of the said Part. Article 265 provides that \"no tax shall be levied or collected except by authority of law\". It is emphasised that this Article does not contemplate that its provision is subject to the other provisions of the Constitution, and so there would be no justification for applying Part XIII to the taxing statutes. It is also pointed out that restrictions and other exceptions which the Constitution wanted to prescribe in respect of taxation have been provided for by Arts. 274, 276, 285, 287 and 288, and so we need not look beyond the provisions of this Part in dealing with tax laws. In our opinion this argument fails to take notice of the fact that Art. 265 itself inevitably takes in Art. 245 of the Constitution when in substance it says that a tax shall be levied by authority of law. The authority of law to which it refers and under which alone a tax can be levied is to be found in Art. 245 read with the corresponding legislative entries in Schedule VII. Now, if we look at Art. 245 which deals with the extent of laws made by and by the s of States it begins with the words \" subject to the provisions of this Constitution \"; in other words, the power of and the s of the States to make laws including laws imposing taxes is subject to the provisions of this Constitution and that must bring in the application of the provisions of Part XIII. Therefore the argument based on the theory that tax laws are governed by the provisions of Part XII alone cannot be accepted. The power to levy taxes is ultimately based on Art. 245 , and the said power in terms is subject to the provisions of the Constitution. On the other hand, the opening words of Art. 301 are very significant. The doctrine of the freedom of trade, commerce and intercourse enunciated by Art. 301 is not subject to the other provisions of the Constitution but is made subject only to the other provisions of Part XIII; that means that once the width and amplitude of the freedom enshrined in Art. 301 are determined they cannot be controlled by any provision outside Part Xlll. This position incidentally brings out in bold relief the important part, which the Constitution-makers wanted the doctrine of freedom of trade to play in the future of the country. It is obvious that whatever may be the content of the said freedom it is not intended to be an absolute freedom; absolute freedom in matters of trade, commerce and intercourse would lead to economic confusion, if not chaos and anarchy; and so the freedom guaranteed by Art. 301 is made subject to the exceptions provided by the other Articles in Part XIII. The freedom guaranteed is limited in the manner specified by the said Articles but it is not limited by any other provisions of the Constitution outside Part XIII. That is why it seems to us that Art. 301 , read in its proper context and subject to the limitations prescribed by the other relevant Articles in Part XIII, must be regarded as imposing a constitutional limitation on the legislative power of and the s of the States. What entries in the legislative lists will attract the provisions of Art. 301 is another matter; that will depend upon the content of the freedom guaranteed; but wherever it is held that Art. 301 applies the legislative competence of the in question will have to be judged in the light of the relevant Articles of Part XIII; this position appears to us to be inescapable. On behalf of the respondent it was suggested before us that the scope and extent of the application of Art. 301 can well be determined in the light of s. 297 of the Constitution Act of 1935. Section 297 reads thus: ", "\" 297(1). No Provincial Legislature or Government shall- ", "(a) by virtue of the entry in the Provincial Legislative List relating to trade and commerce within the Province, or the entry in that List relating to the production, supply, and distribution of commodities, have power to pass any law or take any executive action prohibiting or restricting the entry into, or export from the Province of goods of any class or description ; or ", "(b) by virtue of anything in this Act have power to impose any tax, cess, toll, or due which, as between goods manufactured or produced in the Province and similar goods not so manufactured or produced, discriminates in favour of the former, or which, in the case of goods manufactured or produced outside the Province, discriminates between goods manufactured or produced in one locality and similar goods manufactured or produced in another locality. (2) Any law passed in contravention of this section shall, to the extent of the contravention, be invalid. There is no doubt that the prohibition prescribed by this section was confined to the Provincial Governments and and did not apply to the or . It is also true that the said prohibition had reference to the entries in the Provincial Legislative List relating to trade and commerce, and to production, supply and distribution of commodities. The section also deals with prohibitions and restrictions in respect of import of goods into, or their export from, a Province. Likewise discrimination against goods manufactured or produced outside the Province or goods produced in other localities is also prohibited. The argument is that when the Constitution adopted Art. 301 it had s. 297 in view and the only substantial change which it intended to make was to extend the application of the principles enunciated in the said section to and , and to apply it to the territory which had subsequently become a part of India as indicated by the relevant 'Articles; the essential content of freedom of trade and commerce as prescribed by the said section, however, continues to be the same. ", "In support of this argument, reliance has been placed on the observations made by , in the case of (1). In that case the vires of some of the provisions of the Sales Tax Laws Validation Act , 1956 , were challenged on several grounds. In dealing with one of the points raised in support of the said challenge , who delivered the majority judgment, considered the content of Entry 42 in List 1. It had been urged before the Court that the said entry should be liberally construed and should be held to include the power to tax, and in support of this contention reliance was placed on certain American and Australian decisions. This argument was repelled and it was held that Entry 42 in List I is not to be interpreted as including taxation. In coming to this conclusion the learned judge made certain general observations pointing out that it would not be always safe to rely upon American or Australian decisions in interpreting the provisions of our Constitution. Said the learned judge, \" the threads of our Constitution were no doubt taken from other Federal Constitutions but when they were woven into the fabric of our Constitution their reach and their complexion underwent changes. Therefore, valuable as the American decisions are as showing how the question is dealt with in sister Federal Constitution great care should be taken in applying them in the interpretation of our Constitution \". He made a similar comment about s. 92 of the Commonwealth of Australia Constitution Act and (1) S.C.R. 1422, 1483-84. ", "851 ", "the decisions thereunder, and in that connection he observed:', We should also add that Art. 304(a) of the Constitution cannot be interpreted as throwing any light on the scope of Art. 301 with reference to the question of taxation as it merely reproduces s. 297(1)(b) of the Government of India Act, and as there was no provision therein corresponding to Art. 301 s. 297(1)(b) could not have implied what is now sought to be inferred from Art. 304(a) \". The learned Attorney-General has relied on these observations. It would be noticed that, incidental as these observations are, what the learned judge was considering was the scope and effect of s. 297(1)(b) of the Government of India Act, 1935, and he held that the content of the said section cannot be enlarged in the light of the provisions of Art. 304(a). No doubt the observations would seem to show that the learned judge thought that Art. 304(a) cannot throw any light on the scope of Art. 301 with reference to the question of taxation ; but it is clear that the question of construing the said Articles did not fall to be considered, and was not obviously argued before the . With respect, it may be pointed out that in the happy phraseology adopted by the learned judge himself, in the setting of Part XIII and particularly in the light of the wide words used in Art. 301 , the reach and complexion of Art. 304(a) is wider than s. 297(1)(b) and does include reference to taxation. Then as to the merits of the argument that s. 297 of the Constitution Act of 1935 should virtually determine the scope of Art. 301 , we are reluctant to accept the assumption that the only change which the Constitution makers intended to make by adopting Art. 301 was to extend the application of s. 297 to and the . Just as the Constitution-makers had before them the said section they were also familiar with corresponding clauses included in the Federal Constitutions of other countries. The history of judicial decisions interpreting s. 92 of the Australian Constitution must have been present to their minds as also the history of the growth and development of the American Law under the commerce clause in the American Constitution. Besides, we feel considerable hesitation in accepting the view that the makers of the Constitution did not want to enrich and widen the content of freedom guaranteed by s. 297 . They knew that the Constitution would herald a new and inspiring era in the history of India and they, were fully conscious of the importance of maintaining the economic unity of the Union of India in order that the federal form of government adopted by the Constitution should progress in a smooth and harmonious manner. That is why we are inclined to hold that the broad and unambiguous words used in Art. 301 are intended to emphasise that the freedom of trade, commerce and intercourse guaranteed was richer and wider in content than was the case under s. 297 ; how much wider and how much richer can be determined only on a fair and reasonable construction of Art. 301 read along with the rest of the Articles in Part XIII. In our opinion, therefore, the argument that tax laws are outside Part XIII cannot be accepted. ", "That takes us to the question as to whether Art. 301 operates only in respect of the entries relating to trade and commerce already specified. Before answering this question it would be necessary to examine the scheme of Part XIII, and construe the relevant Articles in it. It is clear that Art. 301 applies not only to inter-State trade, commerce and intercourse but also intrastate trade, commerce and intercourse. The words \" throughout the territory of India \" clearly indicate that trade and commerce whose free- dom is guaranteed has to move freely also from one place to another in the same State. This conclusion is further supported by Arts. 302 and 304(b) as we will presently point out. There is no doubt that the sweep of the concept of trade, commerce and intercourse is very wide; but in the present case we are concerned with trade, and so we will leave out of consideration commerce and intercourse. Even as to trade it is really not necessary to discuss or determine what trade exactly means; for it is common ground that the activity carried on by the appellants amounts to trade, and it is not disputed that transport of goods or merchandise from one place to another is so essential to trade that it can be regarded as its integral part. Stated briefly trade even in a narrow sense would include all activities in relation to buying and selling, or the interchange or exchange of commodities and that movement from place to place is the very soul of such trading activities. When Art. 301 refers to the freedom of trade it is necessary to enquire what freedom means. Freedom from what? is the obvious question which falls to be determined in the context. At this stage we would content ourselves with the statement that the freedom of trade guaranteed by Art. 301 is freedom from all restrictions except those which are provided by the other Articles in Part XIII. What these restrictions denote may raise a larger issue, but in the present case we will confine our decision to that aspect of the matter which arises from the provisions of the Act under scrutiny. It is hardly necessary to emphasise that in dealing with constitutional questions courts should be slow to embark upon an unnecessarily wide or general enquiry and should confine their decision as far as may be reasonably practicable within the narrow limits of the controversy arising between the parties in the particular case. We will come back again to Art. 301 after examining the other Articles in Part XIII. ", " Art. 302 confers on the power to impose restrictions on trade, commerce and intercourse. It provides that may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. It would be immediately noticed that the reference made to a restriction on the freedom of trade within any part of the territory of India as distinct from freedom of trade between one State and another clearly indicates that the freedom in question covers not only inter-State trade but also intrastate trade. Thus the effect of Art. 302 is to provide for an exception to the general rule prescribed, by Art. 301. Restrictions on the freedom of trade can be imposed by if they are required in the public interest so that the generality of freedom guaranteed by Art. 301 is subject to the exception s provided by Art. 302. That takes us to Art. 303. It reads thus: ", "\" 303. (1) Notwithstanding anything in article 302 , neither nor the of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule. (2) Nothing in clause (1) shall prevent from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.\" ", "The first part of this Article is in terms an exception or a proviso to Art. 302 as is indicated by the nonobstante clause. This clause prohibits from making any law which would give any preference to one State over another or would make any discrimination between one State and another by virtue of the relevant entries specified in it. In other words, in regard to the entries there specified, the power to impose restrictions cannot be used for the purpose of giving any preference to one State over another or making any discrimination in that manner. It is obvious that the reference to in this clause cannot be reconciled with the non-obstante clause; but the object of including appears to be to emphasise that like even cannot give any preference or make any discrimination. ", "Sub- Article (2) is an exception to sub- Art. (1) of Art. 303. It empowers the to make a law giving or authorising to give any preference or making any discrimination, but this power can be exercised only if it is declared by law made by the that it is necessary so to do for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India ; in other words, it is only when is faced with the task of meeting an emergency created by the scarcity of goods in any particular part of India that it is authorised to make a law making a discrimination, or giving preference, in favour of the part thus affected. ", "On behalf of the States strong reliance is placed on the fact that Art. 303(1) expressly refers to the entries relating to trade and commerce in any of the Lists in the Seventh Schedule, and it is urged tbat this gives a clear indication as to the scope of the provisions of Art. 301 itself There is some force in this contention ; but on the whole we are not prepared to hold that the reference to the said entries should govern the construction of Art. 301. The setting in which the said entries are referred to would of course determine the scope and extent of the prohibition prescribed by Art. 303 (1); but that cannot be pressed into service in determining the scope of Art. 301 itself. It is significant that Art. 303(1) does not refer to intercourse and in that sense intercourse is outside its sphere. It is likely that having authorised to impose restrictions by Art. 302 it was thought expedient to prohibit expressly the said power of imposing restrictions from being used for the purpose of giving any preference in so far as the relevant entries are concerned. It may also be that the primary object of confining the operation of Art. 303(1) to the said entries was to introduce a corresponding limitation on the power of to discriminate under Art. 302. However that may be, in our opinion the limitation thus introduced in Art. 303(1) cannot circumscribe the scope of Art. 301 or otherwise affect its construction. Besides, as we will presently point out, there are other Articles in this Part which indicate that tax laws are included within Art. 301 , and if that be so, the reference to the said entries in Art. 303(1) cannot limit the application of Art. 301 to the said entries alone. Article 304 reads thus: ", "\"Notwithstanding anything in article 301 or article 303 , may by law-- ", "(a) impose on goods imported from other States or the territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and ", "(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: ", "Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the of a without the previous sanction of the President.\" The effect of Art. 304(a) is to treat imported goods on the same basis as goods manufactured or produced in any ; and it authorises tax to be levied on such imported goods in the same manner and to the same extent as may be levied on goods manufactured or produced inside the . We ought to add that this sub-Article assumes that taxation can be levied by on goods manufactured or produced within its territory and it provides that outside goods cannot be treated any worse. How a tax can be levied on internal goods is, however, provided by Art. 304(b). The non-obstante clause referring to Art. 301 would go with Art. 304(a ), and that indicates that tax on goods would not have been permissible but for Art. 304(a) with the non-obstante clause. This incidentally helps to determine the scope and width of the freedom guaranteed under Art. 301 ; in other words Art. 304(a) is another exception to Art. 301. Article 304(b) empowers to impose reasonable restrictions on the freedom of trade with other s or within its own territory. Again, the reference to the territory within the supports the conclusion that Art. 301 covers the movement of trade both inter- and intrastate. Article 304(b) is to be read with the non-obstante clause relating to Art. 301 as well as Art. 303 , and in substance it gives power to somewhat similar to the power conferred on the by Art. 302. The reference to Art. 303 in the non-obstante clause has presumably been made as a matter of abundant( caution since the of a has been included in Art. 303(1). There are, however, obvious differences in the powers of the and s. In regard to an act which intends to pass under Art. 304(b) no bill can be introduced without the previous sanction of the President, and this requirement has obviously been inserted in order that regional economic pressures which may inspire legislation under the said clause should be duly examined in the light of the interest of national economy; such legislation must also be in the public interest which feature is common with the provision contained in Art. 302; such legislation must also satisfy the 'further test that the restrictions imposed by it are reasonable. That is another additional restriction imposed on the powers of s. Thus there are three conditions which must be satisfied in passing an Act under Art. 304(b ),the previous sanction of the President must be obtained, the legislation must be in the public interest, and it must impose restrictions which are reasonable. It is of course true that if the previous sanction of the President is not obtained that infirmity may be cured by adopting the course authorised by Art. 255. The result of reading Art. 304(a) and (b) together appears to be that a tax can be levied by a on goods manufactured or produced or imported in the and thereby reasonable restrictions can be placed on the freedom of trade either with another or between different areas of the same . Tax legislation thus authorised must therefore be deemed to have been included in Art. 301 , for that is the obvious inference from the use of the non-obstante clause. ", " Article 305 saves existing laws and laws providing for monopolies. It is unnecessary to deal with this Article. Its object clearly was not to interrupt or to Affect the operation of the existing laws except in so far as the President may by order otherwise direct. Article 306 is relevant. It reads thus: ", "\" Notwithstanding anything in the foregoing provisions of this Part or in any other provisions of this Constitution, any State specified in Part B of the First Schedule which before the commencement of this Constitution was levying any tax or duty on the import of goods into the State from other States or on the export of goods from the State to other States may, if an agreement in that behalf has been entered into between and the Government of that State, continue to levy and collect such tax or duty subject to the terms of such agreement and for such period not exceeding ten years from the commencement of this Constitution as may be specified in the agreement: Provided that the President may at any time after the expiration of five years from such commencement terminate or modify any such agreement if, after consideration of the report of constituted under article 280 , he thinks it necessary to do so.\" ", "This Article has been subsequently deleted by s. 29 and Schedule to the Constitution (Seventh Amendment) Act, 1956, but its initial inclusion in Part XIII throws some light on the scope of Art. 301. Laws made by any specified in Part B of the First Schedule levying any tax or duty on the import of goods into the from other s or the export of goods from the to other s were expressly saved by a Art. 306 because it was realised that they would otherwise be hit by Art. 301. In other words, taxing statutes or statutes imposing duties on goods would, but for Art. 306 , have attracted the application of Art. ", "301. Let us now revert to Art. 301 and ascertain the width and amplitude of its scope. On a careful examination of the relevant provisions of Part XIII as a whole as well as the principle of economic unity which it is intended to safeguard by making the said provisions, the conclusion appears to us to be inevitable that the content of freedom provided for by Art. 301 was larger than the freedom contemplated by s. 297 of the Constitution Act of 1935, and whatever else it may or may not include, it certainly includes movement of trade which is of the very essence of all trade and is its integral part. If the transport or the( movement of goods is taxed solely on the basis that the goods are thus carried or transported that, in our opinion, directly affects the freedom of trade as contemplated by Art. 301. If the movement, transport or the carrying of goods is allowed to be impeded, obstructed or hampered by taxation without satisfying the requirements of Part XIII the freedom of trade on which so much emphasis is laid by Art. 301 would turn to be illusory. When Art. 301 provides that trade shall be free throughout the territory of India primarily it is the movement part of the trade that it has in mind and the movement or the transport part of trade must be free subject of course to the limitations and exceptions provided by the other Articles of Part XIII. That we think is the result of Art. 301 read with the other Articles in Part XIII. ", "Thus the intrinsic evidence furnished by some of the Articles of Part XIII shows that taxing laws are not excluded from the operation of Art. 301 ; which means that tax laws can and do amount to restrictions freedom from which is guaranteed to trade under the said Part. Does that mean that all tax laws attract the provisions of Part XIII whether their impact on trade or its movement is direct and immediate or indirect and remote ? It is precisely because the words used in Art. 301 are very woe, and in a sense vague and indefinite that the problem of construing them and determining their exact width and scope becomes complex and difficult. However, in interpreting the provisions of the Constitution we must always bear in mind that the relevant provision \" has to be read not in vacuo but as occurring in a single complex instrument in which one part may throw light on another \". (Vide: of Australia (1)). In construing Art. 301 we must, therefore, have regard to the general scheme of our Constitution as well as the particular provisions in regard to taxing laws. The construction of Art. 301 should not be determined on a purely academic or doctrinnaire considerations ; in construing the said 'Article we must adopt a realistic approach and bear in mind the essential features of the separation of powers on which our Constitution rests. It is a federal constitution which we are interpreting, and so the impact of Art. 301 must be judged accordingly. Besides, it is not irrelevant to remember in this connection that the Article we are construing imposes a constitutional limitation on the power of the and State to levy taxes, and generally, but for such limitation, the power of taxation would be presumed to be for public good and would not be subject to judicial review or scrutiny. Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by Art. 301 , would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions ; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Art. 301. The argument that all taxes should be governed by Art. 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld. If the said argument is accepted it would mean, for instance, that even a legislative enactment prescribing the minimum wages to industrial employees may fall under Part XIII because in an economic sense an additional wage bill may indirectly affect trade or commerce. We are, therefore, satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by Art. 301 a rational and workable test to apply would be: Does the impugned restriction operate directly or immediately on trade or its (1) (1936) A.C. 578,613. ", "861 ", "movement? It is in the light of this test that we propose to examine the validity of the Act under scrutiny in the present proceedings. ", "We do not think it necessary or expedient to consider what other laws would be affected by the interpretation we are placing on Art. 301 and what other legislative entries would fall under Part XIII. We propose to confine our decision to the Act with which' we are concerned. If any other laws are similarly challenged the validity of the challenge will have to be examined in the light of the provisions of those laws. Our conclusion, therefore, is that when Art. 301 provides that trade shall be free throughout the territory of India it means that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves. It is the free movement or 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 restrictions on the very movement of such goods it attracts the provisions of Art. 301 , and its validity can be sustained only if it satisfies the requirements of Art. 302 or Art. 304 of Part XIII. At this stage we think it is necessary to repeat that when it is said that the freedom of the movement of trade cannot be subject to any restrictions in the form of taxes imposed on the carriage of goods or their movement all that is meant is that the said restrictions can be imposed by the State only after satisfying the requirements of Art. 304(b). It is not as if no restrictions at all can be imposed on the free movement of trade. ", "Incidentally we may observe that the difference in the provisions contained in Art. 302 and Art. 304(b) would prima facie seem to suggest that where exercises its power under Art. 302 and passes a law imposing restrictions on the freedom of trade in the public interest, whether or not the given law is in the public interest may not be justiciable, and in that sense is given the sole power to decide what restrictions can be imposed in public interest as authorised by Art. 302. On the other hand Art. 304(b) requires not only that the law should be in the public interest and should have received the previous sanction of the President but that the restrictions imposed by it should also be reasonable. Prima facie the requirement of public interest can be said to be not justiciable and may be deemed to be satisfied by the sanction of the President; but whether or not the restrictions imposed are reasonable would be justiciable and in that sense laws passed by the State Legislatures may on occasions have to face judicial scrutiny. However this point does not fall to be considered in the present proceedings and we wish to express no definite opinion on it. ", "Let us then examine the material provisions of the Act. As we have already pointed out the Act has been passed providing for the levy of tax on certain goods carried by roads or inland waterways in the State of Assam. Section 2(11) defines a producer as meaning a producer of tea and including the person in charge of the garden where it is produced. Section 3 is the charging section. It provides that manufactured tea in chests carried by motor vehicles etc., except railways and airways shall be liable to tax at the specified rate per lb. of such tea and this tax shall be realised from the producer. It also makes similar provisions for jute with which we are not concerned in the present proceedings. Section 6 provides for taxing authorities and their powers. Section 7 provides, inter alia, that every producer shall furnish returns of the manufactured tea carried in tea chests ,in such form and to such authority as may be prescribed. Section 8 makes a provision for licensing of balers who are persons owning or possessing pressing machines for the compression of jute into bales. Section 9 prescribes the procedure for levying the assessment ; and s. 10 provides for the cancellation of assessment in the cases specified. Section 11 deals with the assessment in cases of evasion and escape; s. 12 with rectification, and s. 13 with penalty for non-submission of returns and evasion of taxes. Section 19 provides for notice of demand, and is. 20 lays down when tax becomes payable. This Act has been passed by under Entry 56 in List 11 and naturally it purports to be a tax on goods carried by roads or by inland waterways. It is thus obvious that the purpose and object of the Act is to collect taxes on goods solely on the ground that they are carried by road or by inland waterways within the area of the, State. That being so the restriction placed by the Act on the free movement of the goods is writ large on its face. It may be that one of the objects in passing the Act was to enable to raise money to keep its roads and waterways in repairs; but that object may and can be effectively achieved by adopting another course of legislation ; if the said object is intended to be achieved by levying a tax on the carriage of goods it can be so done only by satisfying the requirements of Art. 304(b). It is common ground that before the bill was introduced or moved in the previous sanction of the President has not been obtained ; nor has the said infirmity been cured by recourse to Art. 255 of the Constitution. Therefore we do not see how the validity of the tax can be sustained. In our opinion was in error in putting an unduly restricted meaning on the relevant words in Art. 301. It is clear that in putting that narrow construction on Art. 301 was partly, if not substantially, influenced by what it thought would be the inevitable consequence of a wider construction of Art. 301. As we have made it clear during the course of this judgment we do not propose to express any Opinion as to the possible consequence of the view which we are taking in the present proceedings. We are dealing in the present case with an Act passed by which imposes a restriction in the form of taxation on the carriage or movement of goods, and we hold that such a restriction can be imposed by only if the relevant Act is passed in the manner prescribed by Art. 304(b). ", "This question can be considered from another point of view. When passes an Act under Entry 56 of List II its initial legislative competence is not in dispute. What is in dispute is whether or not such legislative competence is subject to the limitations prescribed by Part XIII. Now what does an act passed under the said Entry purport to do ? It purports to put a restraint in the form of taxation on the movement of trade, and if the movement of trade is regarded as an integral part of trade itself, the Act in substance puts a restriction on trade itself. The effect of the Act on the movement of trade is direct and immediate; it is not indirect or remote; and so legislation under the said Entry must be held to fall directly under Art. 301 as legislation in respect of trade and commerce. In some of the decisions of this Court, in examining the validity of legislation it has been considered whether the impugned legislation is not directly in respect of the subject matter covered by a particular Article of the Constitution. This test was applied, for instance by , C. J., in the case of (1). It was also adopted by this Court in the case of (2). It is no doubt true that the points which arose for decision in those cases had reference to the fundamental rights guaranteed by Arts. 19, 21 or 22 ; but we are referring to those decisions in order to emphasise that the test there adopted would in the present case lead to the conclusion that the Act with which we are concerned is invalid. The true approach according to , , is only to consider the directness of the legislation. Now, if the directness of legislation has to be considered it is clear that the Act imposes a tax on the carriage of goods and that immediately takes it within the purview of Part XIII. ", "In the course of arguments the learned Attorney-General invited us to apply the test of pith and substance, and he contended that if the said test is applied the validity of the Act can be sustained. In support of his argument he has relied on the observations made by , C. J., in the case of (3). In that case the Court (1) (1950] S.C.R. 88. (2) S.C.R. 451. (3) S.C.R. 874. ", "865 ", "was called upon to consider the validity of the Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act , 1952. The challenge to the Act proceeded on two grounds, (1) that it violated the fundamental right guaranteed under Art. 19(1)(g) and (2) that it offended against the provisions of Art. 301. The challenge on the first ground was repelled because it was held that gambling cannot be treated as trade or business under Art. 19(1)(g). This conclusion was sufficient to repel also the other ground on which the, validity of the Act was challenged because, if gambling was not trade or business under Art. 19(1)(g ), it was also not trade or commerce under Art. 301. On the conclusion reached by this Court that gambling is not a trade this position would be obvious. Even so, the learned Chief Justice incidentally applied the test of pith and substance, and observed that the impugned act was in pith and substance an act in respect of betting and gambling, and since betting or gambling was not trade, commerce or business \" the validity of the Act had not to be decided by the yardstick of reasonableness and public interest laid down in Arts. 19(6) and 304 \". In this connection it may, with respect, be pointed out that what purports to be a quotation from Lord 's judgment in v. ) has not been accurately reproduced. In fact, referring to phrases such as 'pith and substance' Lord has observed that \" they no doubt raise in convenient form an appropriate question in cases where the real issue is one of subject-matter, as when the point is whether a particular piece of legislation is a law in respect of some subject within the permitted field. They may also serve useful purpose in the process of deciding whether an enactment which works some interference, with trade, commerce and intercourse among the States is nevertheless untouched by s. 92 as being essentially regulatory in character \" (pp. 312, 313). These observations would indicate that the test of pith and substance is generally and more appropriately applied when a dispute arises as to the legislative competence of the legislature, and it has to be resolved by reference to the entries to which the impugned legislation is relatable. When there is a conflict between two entries in the legislative lists, and legislation by reference to one entry would be competent but not by reference to the other, the doctrine of pith and substance is invoked for the purpose of determining- the true nature and character of the legislation in question (Vide: v. , Khulna (1) and v. (2) . But even the application of the test of pith and substance yields the same result in the present proceedings. The pith and substance of the legislation is taxation on the carriage of goods and that clearly falls within the terms of Art. 301. At the commencement of this judgment we have stated that the complexity of the problem which we are called upon to decide in the present proceedings has been incidentally mentioned or considered in some of the reported decisions of this Court. We may in that connection refer to two of such decisions at this stage. . (3), , C. J., observed that the freedom of inter-State trade and commerce declared in Art. 301 is expressly subordinated to the State power of taxing goods imported from sister States provided only no discrimination is made in favour of similar goods of local origin. According to the learned Chief Justice the commercial unity of India is made to give way before the State power of imposing any non-discriminatory tax on goods imported from sister States. This observation would suggest that Art. 304(a) and (b) deal with taxes and to that extent it is inconsistent with the argument that tax laws are outside Part XIII. ", "The next case in which this question has been incidentally discussed is in . (4). In that case the impugned provisions of the U. P. Road Transport Act, 1951 (U. P. Act II of (1) (1947) L.R. 74 I.A. 23. (2) F.C.R. 188. (3) S.C.R. 1069. (4) 1 S.C.R. 707. ", "867 ", "1951), were declared to be unconstitutional on two other grounds which had no direct connection with the challenge under Part XIII of the Constitution. Even so, , J., as he then was, who spoke for the , has referred to the problem raised by Part XIII as \" not quite free from difficulty \" and has indicated its pros and cons which were urged before the . One of the points thus urged was that Art. 301 provides safeguards for carrying on trade as a whole as distinct from the rights of an individual to carry it on. In other words the said Article was concerned with the passage of commodities or persons either within or without the frontiers but not directly with individuals carrying on the trade or commerce. The right of individuals, it was said, was dealt with under Art. 19(1)(g) so that the two Articles had been framed in order to secure two different objects. To the same effect are some of the observations made by , C. J., in the case of (1). It is unnecessary on the present occasion to consider whether the fields covered by Art. 19(1)(g) and Art. 301 can be distinguished in the manner suggested in the said observations. It may be possible to urge that trade as a whole moves inevitably with the aid of human agency, and so protection granted to trade may involve protection even to the individuals carrying on the said trade. In that sense the two freedoms may overlap. However, it is unnecessary to pursue this point any further in the present proceedings. ", "Before we conclude we would like to refer to two decisions in which the scope and effect of the provisions of s. 92 of the Australian Constitution came to be considered. We have deliberately not referred to these decisions earlier because we thought it would be unreasonable to refer to or rely on the said section or the decisions thereon for the purpose of construing the relevant Articles of Part XIII of our Constitution. It is commonplace to say that the political and historical background of the federal polity adopted by the Australian Commonwealth, the setting of the Constitution itself, the distribution of powers and the general scheme of the Constitution are different, and so it (1) [1957] S.C.R. 874. ", "868 ", "would not be safe to seek for guidance or assistance from the Australian decisions when we are called upon to construe the provisions of our Constitution. In this connection we have already referred to the note of warning struck by , against indiscriminate reliance being placed on Australian and American decisions in interpreting our Constitution in the case of & Co. (1). The same caution was expressed by , C. J., as early as 1939 when he observed in The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (2) \" there are few subjects on which the decisions of other Courts require to be treated with greater caution than that of federal and provincial powers, for in the last analysis the decision must depend upon the words of the Constitution which the Court is interpreting; and since no two Constitutions are in identical terms it is extremely unsafe to assume that a decision on one of them can be applied without qualification to another. This may be so even where the words or expressions used are the same in both cases, for a word or a phrase may take a colour from its context and bear different senses accordingly \". Even so the reported decisions of this Court show that in dealing with constitutional problems reference has not infrequently been made to Australian and American decisions; and that, we think, brings out the characteristic feature of the working of the judicial process. When you are dealing with the problem of construing a constitutional provision which is none-too-clear or lucid you feel inclined to inquire how other judicial minds have responded to the challenge presented by similar provisions in other sister Constitutions. It is in that spirit that we propose to refer to two decisions which dealt with the construction of s. 92 of the Australian Constitution. The first paragraph of s. 92 of the Australian Constitution, around which has grown, in the words of Lord a \" labyrinth where there is no golden thread \", reads thus: \" On the imposition of uniform (1) [1958] S.C.R. 1422. 1483-84. ", "(2) A.I.R. 1939 F.C. 1, 5. ", "869 ", "duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free \". The part played by , who carried on the trade of growing and processing dried fruits, in securing judicial pronouncements on the true scope and effect of the said section is wellknown. He fought three valiant legal battles in which he successfully asserted his right as a trader against legislative encroachment. In V. State of South Australia (1) s. 20 of the Dried Fruits Export Control Act, 1924, was struck down. In V. Cowan (2) s. 28 was challenged, whereas in the last case of V. Commonwealth of Australia (3) had claimed a declaration that the Dried Fruits Act 11 of 1928 and 5 of 1935 and the regulations framed thereunder were invalid as offending against s. 92 of the Constitution. It is to the observations made by in the last case to which we wish to refer. Referring to the word \" free \" used in the said section Lord observed that the said word in itself is vague and indeterminate; it must take its colour from the context. Then he referred to the fact that \"'free trade' ordinarily means freedom from tariffs \", but he immediately added that \" free \" in s. 92 cannot be limited to freedom in the last-mentioned sense. According to this judgment, every step in the series of operations which constitute the particular transaction is an act of trade, and control under the State law of any of these steps must be an interference with its freedom as trade. In this connection it was also observed that not much help is to be got by reflecting that trade may still be free though the trader has to pay for the different operations such as tolls, railway rates and so forth; it would thus appear that the result of this decision is that imposition of tolls, railway rates and so forth might impede the freedom of trade contemplated by s. 92 , which in other words supports our conclusion that a tax may amount to a restriction under Art. ", "301. (1) (1927) 40 C.L.R. 1. ", "(3) (1936) A.C. 578,613. ", "(2) (1932) A.C. 542. ", "III In the case of v. (1) to which reference has already been made in connection with the test of pith and substance was examining the validity of s. 46 of Banking Act (Commonwealth) (No. 57 of 1947) in the light of the provisions of s. 92 of the Australian Constitution. In deciding the said question one of the tests which was applied by Lord was : \" Does the act not remotely or incidentally (as to which they will say something later) but directly restrict the inter-State business of banking \", and he concluded that \" two general propositions may be accepted, (1) that regulation of trade, commerce and intercourse among the States is compatible with its absolute freedom, and (2) that s. 92 is violated Only when a, legislative or executive act operates to restrict such trade, commerce and intercourse directly and immediately as distinct from creating Some indirect or consequential impediment which may fairly be regarded as remote \". This decision thus justifies the conclusion we have reached about the scope and effect of Art. 301. ", "In the result we hold that the Act has put a direct restriction on the freedom of trade, and since in doing so it has not complied with the provisions of Art. 304(b) it must be declared to be void. In view of this conclusion it is unnecessary to consider the other points urged in support of the challenge against the validity of the Act. The three appeals and the two petitions are accordingly allowed and writs or orders directed to be issued as prayed. The appellants and the petitioners will be entitled to their costs from the respondent. ", "SHAH. J.-The validity of the Assam Taxation (on Goods carried by Roads or lnland Waterways) Act , 1954-hereinafter referred to as the, Act, is challenged by certain producers of tea in the States of West Bengal and Assam. The Act was passed by and received the assent of the Governor of Assam on April 9, 1954. To the introduc- tion of the Bill (which was enacted into the Act) in , the previous sanction of the President was not obtained : nor did the President assent to the Act. By s. 3 of the Act,, it is provided inter alia that \" manufactured tea in chests carried by motor vehicles, cart, trolly, boat, animal and human agency or any other means except, railways and airways shall be liable to a tax of one anna per pound of such tea and this tax shall be realised from the producer\". \" Producer \" is defined by s. 2 cl. (2) as meaning a producer of tea and included a person in charge of the garden where tea is produced. By s. 4 , tax is charged on the total net weight carried during the return period. Section 7 provides that every producer and dealer shall furnish a return of manufactured tea carried in chests. By s. 23 , cl. (3), the Commissioner of Taxes is authorised to recover taxes and penalties due under the Act as arrears of land revenue. Sections 27 and 28 impose a duty upon the producers to maintain accounts in the forms prescribed under the Act and to preserve the same and to producer them whenever called upon, to the Commissioner or other persons as may be appointed by the Government in that behalf The rules framed under the Act make it obligatory upon the producers to submit quarterly returns to the Superintendent of Taxes and to maintain the registers in the forms prescribed and failure to maintain registers is penalised. ", "In exercise of the powers conferred by s. 7 , sub-s. (3), the Commissioner of Taxes issued a notification in notifying for general information that returns under the Act and the Rules thereunder for the period between June 1, 1954 and September 30, 1954, shall be furnished on or before October 30, 1954, and for the subsequent quarters on or before the dates specified therein. Three producers who transported their tea by road or by inland waterways to Calcutta in the of West Bengal challenged by petitions under Art. 226 of the Constitution filed in , tile authority of to enact the Act on the plea that the Act violated the guarantee of freedom of trade, commerce and intercourse under Art. 301 of the Constitution. rejected the plea raised by the petitioners, and against the orders passed, three appeals with certificates of fitness under Art. 132 of the Constitution have been preferred. Two other producers have challenged the vires of the Act by petitions under Art. 32 of the Constitution presented to this court. The principal question canvassed in these proceedings is about the competence of to enact the Act. The producers contend that by Art. 301 of the Constitution, trade, commerce and intercourse being declared free throughout the territory of India, the statute authorising imposition of restrictions or burdens on that freedom by levying tax under the authority of an Act which does not conform to the conditions prescribed by the Constitution is invalid. Item 56 of List II of the seventh schedule to the Constitution authorises to impose taxes on goods and passengers carried byroad or on inland waterways. In terms, the tax imposed by the Act is a tax on goods carried by road and inland waterways and is not of the nature of a duty of excise. If the vires of the Act are to be adjudged solely in the light of the power conferred by Art. 246 cl. (3) read with item 56 of List 11 of the seventh schedule, the tax must be regarded as within the competence of the . But the exercise of legislative power of the and s conferred by the legislative lists is restricted by diverse provisions of the Constitution. By Art. 301 , it is declared that subject to the provisions of Part XIII of the Constitution, trade, commerce and intercourse throughout the territory of India shall be free. The language of the Article is general; it admits of no implications and of no exceptions bar those expressly imposed by Part XIII. It comprehensively sets out the guarantee of freedom and defines in terms, clear and precise, that trade, commerce and intercourse throughout the territory of India subject to the provisions of Part XIII, shall be free, i.e., trade, commerce and intercourse shall not, except to the extent expressly permitted, be prohibited, controlled, burdened or impeded. Our Constitution even though in form federal, has in diverse provisions thereof, emphasised the unity of India; and with a view to promote that unity appears to have guaranteed, subject to specific restrictions, freedom of trade, commerce and intercourse throughout the territory. The Article is not merely declaratory of policy like the directive principles defined by Part IV of the Constitution which are expressly not made enforceable by any court though the principles are \" fundamental in the governance of the country '. It incorporates a restriction on the exercise of power by Governmental agency- legislative as well as execu- tive. Besides placing an irremovable ban on the executive authority, it restricts the legislative power of the and the legislatures conferred by Arts. 245, 246 and 248 and the relevant items in the legislative lists relating to trade, commerce and intercourse. On the exercise of the legislative power to tax trade, commerce and intercourse, restrictions are prescribed by certain provisions Contained in Part XII, e.g., Arts. 276, 286, 287, 288 and 289: but these restrictions do not exhaustively delimit the periphery of that power. The legislative power to tax is restricted also by the fundamental freedoms contained in Part III, e.g., Arts. 14,15(1),19(1)(g) and 31(1) and is further restricted by Part XIII. Article 245 , cl. (1), of the Constitution expressly provides that the legislative powers of the and the Legisla- tures to make laws are subject to the provisions of the Constitution ; and Art. 301 is undoubtedly one of the provisions to which the legislative powers are subject. The power of taxation is essentially an attribute of the sovereignty of the and is not exercised in consideration of the protection it affords or the benefit that it confers upon citizens and aliens. Its content is not measured by the apparent need of the amounts sought to be collected, and its incidence does not depend upon the ability of the citizens to meet the demand. But it is still not an unrestricted power. By Art. 265 of the Constitution, the power to tax can be exercised by authority of law alone and the Constitution affirmatively grants the power of taxation under diverse heads under the three lists of the seventh schedule. The power of taxation has there. fore to be exercised by the strictly within the limits prescribed by the Constitution, and any alleged transgression either by or of the limits imposed by the Constitution is justiciable. Trade and commerce do not mean merely traffic in goods, i. e., exchange of commodities for money or other commodities. In the complexities of modern conditions, in their wide sweep are included carriage of persons and goods by road, rail, air and waterways, contracts, banking, insurance transactions in the stock exchanges and forward markets, communication of information, supply of energy, postal and telegraphic services and many more activities-too numerous to be exhaustively enumerated-which may be called commercial intercourse. Movement of goods from place to place may in some instance,% be an important ingredient of effective commercial intercourse, but movement is not an essential ingredient thereof Dealings in goods and other commercial activities which do not import a concept of movement are as much part of trade and commerce as transactions involving movement of goods. The guarantee of freedom of trade and commerce is not addressed merely against prohibitions, complete or partial; it is addressed to tariffs, licensing, marketing regulations, price-control, nationalisation, economic or social planning, discriminatory tariffs, compulsory appropriation of goods, freezing or stand-still orders and similar other impediments operating directly and immediately on the freedom of commercial intercourse as well. Every sequence in the series of operations which constitutes trade or commerce is an act of trade or commerce and burdens or impediments imposed on any such step are restrictions on the freedom of trade, commerce and inter- course. What is guaranteed is freedom in its widest amplitude-freedom from prohibition, control, burden or impediment in commercial intercourse. Not merely discriminative tariffs restricting movement of goods are included in the restrictions which are hit by Art 301, but ball taxation on commercial intercourse, even imposed as a measure for collection of revenue is so hit. Between discriminatory tariffs and trade barriers on the one hand and taxation for raising revenue on commercial intercourse, the difference is one of purpose and not of quality. Both these forms of burden on commercial intercourse trench upon the freedom guaranteed by Art. 301: The guarantee of freedom is again not merely against burdens or impediments on inter- movement: nor does the language of Art. 301 guarantee freedom merely from restrictions on trade, commerce and intercourse as such. Articles 302, 303, 304 and 306, which I will presently advert to, make it abundantly clear that the freedom contemplated was freedom of trade, commerce and intercourse in all their varied aspects inclusive of all activities which constitute commercial intercourse and not merely from restrictions on \" trade, commerce and intercourse as such \". Article 301 as has already been observed enunciates a fetter upon the exercise of legislative power under the entries in the lists of the seventh schedule concerning or relating to trade, commerce and intercourse. The basic principle underlying Art. 301 appears to have been adopted from the Constitution of the Australian Commonwealth. In the American Constitution, by the 8th section, Art. 1 , power to regulate commerce is granted; but the freedom of commerce as guaranteed by our Constitution is not found enunciated in the Constitution of the United s. Section 92 of the Constitution of the Commonwealth of Australia provides by the 1st paragraph that \" on the imposition of uniform duties of customs, trade, commerce and intercourse among the s, whether by means of internal carriage or ocean navigation, shall be absolutely free \". That guarantee of freedom of trade, commerce and intercourse though Dot as extensive as the guarantee enshrined in our Constitution, is of the same pattern. But our Constitution has made a sig- nificant departure from the Australian Constitution, Whereas by s. 92 of the Australian Constitution, freedom of trade, commerce and intercourse is guaranteed among the s, i.e., at inter- level, our Constitution has made trade, commerce and intercourse free throughout the territory of India. The freedom guaranteed by our Constitution is more pervasive: it is freedom of trade, commerce and intercourse intra as well as inter- . But this extension of the area of its operation does not alter the content of that freedom. It is freedom from tax burdens as well as other impediments. ", "Section 92 of the Commonwealth of Australia Act does not encompass the wide freedom guaranteed by our Constitution-it protects trade, commerce and intercourse from restrictions in inter-State commerce; but in my judgment, the interpretation put by in v. Commonwealth of Australia (1) upon the meaning of the expression \" free \" in s. 92 is not on that account less illuminating in the interpretation of Art. 301 of our Constitution which is largely based on that section of the Australian Constitution. ", "Lord in delivering the judgment of the in v. Commonwealth of Australia (1) (supra) at pp. 627.628 observed : ", "\" ' Free' in s. 92 cannot be limited to freedom in the last mentioned sense (freedom from tariffs). There may at first sight appear to be some plausibility in that idea, because of the starting point in time specified in the section, because of the sections which surround, s. 92 , and because proviso to s. 92 relates to customs duties. But it is clear that much more is included in the term; customs duties and other like matters constitute a merely pecuniary burden; there may be different and perhaps more drastic ways of interfering with freedom, as by restriction or partial or complete prohibition of passing into or out of the . Nor does \" free \" necessarily connote absence of discrimination between inter- and intrastate trade. No doubt conditions restrictive of freedom of trade among the s will frequently 'involve a discrimination; but that is not essential or decisive........ ", "(1) L.R. (1936) A.C. 578. ", "877 ", "A compulsory seizure of goods may include indifferently goods intended for intrastate trade and goods intended for trade among the s. Nor can freedom be limited to freedom from legislative control; it must equally include executive control Every step in the series of operations which constitute the particular transaction is an act of trade; and control under the law of any of these steps must be an interference with its freedom as trade.\" These observations made in the context of a guarantee against obstruction to the flow of interstate trade and commerce, involved the \" conception \" of \" freedom from customs duties, imports, border prohibitions and restrictions of every kind : the people were to be free to trade with each other, and to pass to and fro among the s, without any burden, hindrance or restriction based merely on the fact that they were not members of the same \". ", "Freedom guaranteed by Art. 301 is however not absolute: it is subject to the provisions contained in Part XIII of the Constitution. Article 302 authorises to impose restrictions on the freedom of trade, commerce and intercourse between one and another or within any 'part of the territory of India as may be required in the public interest. The Constitution has therefore circumscribed the guarantee under Art. 301 by authorising the to impose restrictions thereon. Such restrictions on trade, commerce and intercourse may be intrastate as well as inter-: the only condition which the restrictions must fulfil is that they must be imposed in the public interest. The learned Attorney-General urged that the courts are incompetent to adjudge whether the quantum, and the incidence of a tax imposed by a in exercise of its powers are in the public interest, and therefore it must be inferred that Arts. 301 and 302 do not deal with freedom from taxation and the limits which may be placed thereon. Counsel urged that in the modern political thought, exercise of the sovereign power of taxation is not restricted to collection of revenue for governmental purposes; it is reported to for diverse purposes, often with a view to secure a pattern of social order ensuring justice, liberty and equality amongst citizens. That the courts may not in adjudging upon the validity of a restriction imposed by a parliamentary statute, lightly enter upon an investigation whether the amount sought to be recovered and its incidence are in the public interest, is not a ground for holding that Art. 302 does not deal with restrictions which may be placed upon trade, commerce and intercourse by the imposition of taxes. The courts will normally rely upon the wisdom of the and presume that taxes are generally imposed in the public interest: but that does not exclude the jurisdiction of the court in a given case to enter upon an enquiry whether an impugned legislation satisfies the constitutional test. If an enquiry into the validity of a burden or impediment imposed on the freedom of trade, commerce 'and intercourse imposed otherwise than by levying a tax is within the competence of the court, the restraint which the courts put upon their own functions by raising a presumption of constitutionality in dealing with a burden imposed by a taxing statute cannot be forged into a fetter upon their jurisdiction. By el. (b) of Art. 304 , the s are invested with similar authority to impose restrictions on the freedom of trade, commerce and intercourse with or within the as may be required in the public interest. The territorial extent of the operation of the laws which may be made under Arts. 302 and 304(b) may not from the very nature of the jurisdiction exercised by the s be co-extensive, but subject thereto, the and the s are entrusted in exercise of legislative authority with powers to restrict freedom of trade, commerce and intercourse. Why the Constitution should have enacted that the ary law may impose restrictions as may be required in the public interest and the law may impose reasonable restrictions as may be required in the public interest, it is difficult to appreciate. It is unnecessary for the purpose of these cases to enter upon a discussion whether there is any real distinction between the quality of restrictions which may be imposed by legislation by the and s exercising authority respectively under Arts. 302 and 304(b) of the Constitution. The two Articles enact that to oirucmscribe effectively the freedom of trade, commerce and intercourse, the restriction must satisfy the primary test that it is \" required in the public interest \". Clause (b) of Art. 304 is subject to a proviso that no Bill or amendment for the purpose of el. (b) shall be introduced or moved in the of a without the previous sanction of the President. The authority of the to enact legislation imposing restrictions on trade, commerce and intercourse is therefore subject to the condition that before the Bill or amendment of a statute is moved, the previous sanction of the President must be obtained. Legislative power of the imposing restrictions on the freedom of trade, commerce and intercourse may therefore be validly exercised if the restrictions are required in the public interest. On the exercise of authority in that behalf by the s, there are placed two restrictions, (1) that the restriction must be reasonable and required in the public interest, (2) that the Bill or amendment imposing restriction can be moved or introduced in the only with the previous sanction of the President. In this context, I may refer to Art. 255 which provides, in so far as it is material, that no Act of the of a shall be invalid by reason only that the previous sanction required by the Constitution was not given, if assent to that Act was given under el. (c) where the previous sanction required was that of the President, by the President. Even if the previous sanction of the President has not been obtained to the moving or introduction of the Bill or amendment falling within el. (b) of Art. 304 , the Act still would not be invalid if the President has signified his assent to the Act enacted by the . Article 303(1) is an exception to Art. 302 as well as Art. 304(b). Notwithstanding the wide sweep of the legislative power restored by Arts. 302 and 304(b) to the and the s to make laws imposing restrictions on the freedom of trade, commerce and intercourse, prohibition is imposed on the exercise of the power in making laws giving or authorising the giving of, any preference to one over another or making, or authorising the making of, any discrimination between one and another, by virtue of any entry relating to trade and commerce in any of the Lists in the seventh schedule. Cl. (1) of Art. 303 emphasises the object of the Constitution. makers to safeguard the economic unity of the nation and to prevent discrimination between the constituent s in the matter of trade and commerce. It is true that under cl. (1) of Art. 302 , the discrimination which is prohibited is under a law made by virtue of an entry relating to trade and commerce in the seventh schedule. But thereby, discrimination which is prohibited is not limited to discrimination under laws made under items expressly relating to the trade and commerce items of the seventh schedule. The expression \" relating to trade and commerce \" used in Art. 302(1) in my judgment includes all those entries in the lists of the seventh schedule which deal with the power to legislate, directly or indirectly in respect of activities in the nature of trade and commerce. By el. (2) of Art. 303 , the rigour of cl. (1) in the matter of laws to be enacted by is to a certain extent reduced. That clause authorises the , but not the s, to make laws notwithstanding el. (1) when it is declared by law that it is necessary to make discrimination which is prohibited for the purpose of dealing with the situation arising from scarcity of goods in any part of the territory of India. ", " Article 304 , in so far as it is material, provides that notwithstanding anything in Art. 301 or Art. 303 , may by law, (a) impose on goods imported from other s (or the territories) any tax to which similar goods manufactured or produced in that are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced. This clause implies that notwithstanding anything contained in Art. 301 or Art. 303 , has the power to im. pose tax on the import of goods to which similar goods manufactured or produced in the are subject, provided that by taxing the goods imported from another or territory, no discrimination is practised. If Art. 301 and Art. 303 did not deal with restrictions or burdens in the nature of tax, the reason for incorporating the non-obstante clause to which Art. 304 , el. (1), is subject, cannot be appreciated. Undoubtedly, the provisions of Part XIII of the Constitution do not impose additional or independent powers of taxation; the powers of taxation are to be found conferred by Arts. 245, 246 and 248 read with the lists in the seventh schedule, and the provisions of Part XIII are limitative of the exercise of legislative power. The circumstance that the Constitution has chosen to deal with a specific field of taxation as an exception to Arts. 301 and 303 (which should really be Art. 303(1) ) strongly supports the inference that taxation was one of the restrictions from the imposition of which by the guarantee of Art. 301 , trade, commerce and intercourse are declared free. ", "Clause (b) of Art. 304 is subject to the proviso prescribing that the previous sanction of the President shall be obtained to the moving or introduction of a Bill or amendment imposing restrictions on the freedom of trade, commerce and intercourse. There is however no such condition imposed in the matter of enactment of laws imposing non-discriminative tariffs under el. (a). But on that account, the nature of the restrictions contemplated by cls. (a) arid (b) is not in any manner different. Clause ", "(b) deals with a general restriction which includes a restriction by the imposition of a burden in the nature of tax. Clause (a) deals with a specific burden of taxation in a limited field. ", " Article 305 protects existing laws except in so far as the President may by order or otherwise direct, and it also validates certain enactments made before the commencement of the Constitution (Fourth Amendment) Act, 1955, and authorises the and in future to make laws relating to matters referred to in sub-cl. (2) of cl. (6) of Art. 19. Article 306 of the Constitution which was repealed by the Constitution (Seventh Amendment) Act, 1956, provided, in so far as it is material, that notwithstanding anything in the foregoing provisions of Part XIII or any other provisions of the Constitution, a State specified in Part B of the First Schedule which before the commencement of the Constitution was levying any tax or duty on the import of goods into the State from other States or on the export of goods from the State to other States may, if an agreement in that behalf has been entered into between and the Government of that State continue to levy and collect such tax or duty subject to the terms of such agreement........... The marginal note of the Article refers to the power of the States specified in Part B of the First Schedule to levy tax as a power to impose restrictions on trade and commerce, and clearly supports the view that within the meaning of Art. 301 , freedom was to include free- dom from taxation and the restrictions contemplated by Arts. 302 and 304 contemplated imposition of burdens of the nature of taxation. ", "On a careful review of the various Articles, in my judgment, by Part XIII, restrictions have been imposed upon the legislative power granted by Arts. 245, 246 and 248 and the lists in the seventh schedule to the and and those restrictions include burdens of the nature of taxation. Therefore, the power to tax commercial intercourse vested by the legislative lists in the or , is circumscribed by Part XIII of the Constitution and if the exercise of that power does not conform to the requirements of Part XIII, it would be regarded as invalid. ", "As observed hereinbefore, the previous sanction of the President was not obtained to the moving of the Bill which was enacted as the impugned Act. Even though had by item 56 of the seventh schedule legislative authority to impose this tax, the State could not exercise this authority in the absence of the previous sanction of the President and the invalidity of the Act imposing the tax on goods and passengers is not cured, the President not having assented to the Act at any time after it was passed by . The argument that this view seriously restricts the \" sovereignty \" of the has, in my view, little force. Even a cursory review of our constitutional provisions clearly shows that the primary object of was to erect a governmental machinery with a strong central Government, with the object of building up a healthy economy, and unifying the various component , consisting of the former British Indian Provinces and the merged Indian , by subordinating local and parochial interests to the wider national interest. In any event, in adjudging the vires of a statute, the impact of the view which the interpretation placed by the court may produce on some cherished notion of sovereignty of the component must be ignored. In that view, the Assam Taxation (on Goods carried by Roads or Inland Waters) Act, 1954, must be regarded as infringing the guarantee of freedom of trade and commerce under Art. 301 , because the Bill moved in the had not received the assent of the President as required under Art. 304(b) proviso, and the Act has not been validated by the assent of the President under Art. 255(c). ", "In the view expressed by me, I do not deem it necessary to enter upon certain subsidiary contentions such as the application of the \" pith and substance doctrine \" to the interpretation of the relevant clauses, the alleged violation by the Act of the equal protection clause of the Constitution, and the effect of Act XXIX of 1953 enacted by the , which were debated at the . In the view taken, the appeals must be allowed and the Rule in the two applications made absolute, with costs. ORDER OF COURT: In view of the majority judgment, the appeals and the writ petitions are allowed with costs-one set of hearing fees. ", "884"], "relevant_candidates": ["0000212098", "0000233559", "0000283660", "0000424874", "0000928482", "0000959860", "0001148508", "0001291316", "0001629177", "0001857950"]} {"id": "0000516738", "text": ["JUDGMENT ", "1. These writ appeals have been referred to a Full Bench for considering the question whether the existing holders of stage carriage permits are entitled to submit representations and are also entitled to be heard before (hereinafter referred to as ) when it is considering fresh applications filed after 1-7-1989. under Section 70 read with Sections 71 , 72 and 80 of the Motor Vehicles Act, 1988. Incidentally the question has arisen whether the said existing operators are entitled to copies of the applications filed by new applicants under Rule 166 of the A. P. Motor Vehicles Rules, 1989 (hereinafter referred to as the Rules). As the points arising in all the writ appeals are common it will be sufficient to refer to the facts in W.A. No. 795 of 1990 arising out of W.P. No. 14987 of 1989. The writ petitioner therein (respondent in the writ appeal) is holding a pucca stage carriage permit on the town service route in Gutur town from Syamalanagar to Sivareddipalem via Pattabhipuram, Kanakaragunta Gate, and old Bus Stand, the distance of which is 8 K.Ms., is running 24 single trips per day. The petitioner states that there is one more bus in his route making 24 single trips per day, that there are 22 buses having 7 K.Ms. of common sector from Syamalanagar to bus stand, in all making 440 single trips per day and that there are about 100 buses belonging to the covering the above route fully. According to, the petitioner there is no existing need to provide any additional transport facilities in the above route or on its sector and that even the existing transport facilities are more than the need and he states that he is suffering heavy loss for want of passengers in his bus. He also states that he is the oldest operator on the said route. Coming to know that certain fresh applications have been made for grant of pucca stage carriage permits on certain routes in Guntur town covering his route, the writ petitioner filed an application dated 17-10-1989 before the Secretary, , Guntur (1st appellant), requesting him to furnish him certified copies of various new applications filed, covering the petitioner's route with a view to enable him \"to file representation against the (sic) end to approach higher authorities if necessary\". The 1st appellant refused to grant the same by endorsement dated 21-10-1989 stating that it is not possible to comply with the request as there are a number of applications received for grant of stage carriage permits on various sectors of the town. It was further stated that the writ petitioner may as well ascertain the information from the copy of the agenda published in the notice board of the office of the Then the petitioner filed the present writ petition stating that under Rule 166 of the Rules he is entitled to certified copies of the said applications. The petitioner also contended that there is no need to grant any permit on the route, that no traffic survey was conducted to find out the need, that there are no representations from the public for additional transport facilities and that no permit can legally be granted unless such need is first established. Thus the very receipt of applications is illegal. According to the petitioner, the agenda of the meeting will be published only on the date of consideration of the applications by the that the agenda does not contain all the particulars mentioned in the various applications and that therefore the writ petitioner cannot make any effective representation. The meeting was proposed to take place on 27-10-1989 and the permits were to be granted on the routes overlapping the writ petitioner's route, he would suffer irreparable loss and hardship. The petitioner therefore prays for the issue of a writ of Certiorari for quashing the orders of the 1st appellant dated 21-10-1989, refusing to grant certified copies and for a positive direction for furnishing certified copies of all applications filed for grant of pucca stage carriage permits on the town service route. Pending the writ petition he prayed for stay of consideration of the applications by the on 27-10-1989 as also to the subsequent grant of pucca stage carriage permits or temporary permits. In W. A. No. 796/90 (arising out of W.P. 14969/89 the writ petitioner asked for certified copies of other applications for representing to higher authorities also. ", "2. The learned single Judge by his order dated 29-3-1989 allowed the writ petitions partly holding that the existing operators were entitled to have certified copies of the applications filed by third parties before the 1st or 2nd appellant if there was common sector between the route granted to the writ petitioner and the route for which fresh applications are made for grant of stage carriage permits and the impugned order was quashed. The was further directed before taking a decision to grant fresh permits to consider the representations of the existing operators who are likely to be affected by reason of the grant of fresh permit. The learned single Judge referred to the provisions of Sections 47(1) and 57(3) , (4), (5) of the old Motor Vehicles Act , 1939 and Sections 70 , 71(1) , (2), (3) and 90 of the new Motor Vehicles Act as also Rules 132, 166 and 179 of the new Motor Vehicles Rules, 1989 and came to the conclusion that the procedure contemplated by the new Act for grant of stage carriage permits did not result in a total exclusion of principles of natural justice. The provisions of Rule 132, according to him, clearly negated such an assumption inasmuch as the proviso to the said rule unequivocally laid down that the shall give adequate notice of the meetings and of the business to be transacted at the meetings, \"for the information of such persons who being interested in the particular business to be transacted.\" He held that it was not the intention of the Rule making authority that the information relating to the transaction of the business should be confined only to the applicants for the stage carriage permits. If that were the intention, the rule could have mentioned that the information was to be given to \"such persons being interested in the particular business\". Under the new Rule 179, the has to-bear in mind several guiding principles including whether the new operators are financially sound and whether their performance has been satisfactory. The existing operators, the learned Judge said, cannot make a representation unless they could know the contents of the applications filed by the fresh applicants. Any increase in the permits or in the change of timings would affect their business and if so they would be entitled to prefer revision petitions under Sec. 90 of the new Act before . An existing operator will not be able to file an effective revision if he could not file a representation before the The business transacted under Rule 132 cannot be said to be purely administrative in character without any likelihood of the interest of others being affected. Even in respect of administrative actions the principles of natural justice apply. The learned Judge referred to , ; , for the aforesaid proposition. He also relied upon the prevailing practice even after the commencement of the New Act, of representations being called for from existing operators. According to him, the words \"other relevant documents\" in Rule 166 include the applications made by new applicants for grant of permits which might partly or wholly cover the routes of the existing operators. At the pre-decisional stage before there could be enquiry into the question whether the existing operators are \"interested in an appeal or revision\" within the meaning of the said words in Rule 166. The principle of natural justice was clearly embodied in Rule 132. According to the learned Judge, it is possible that grant of copies might be cumbersome if a large number of applications are filed but the can evolve its own procedure by fixing some time limit for making representations and quoted , . ", "3. It is against the above said judgment of the learned single Judge that the present batch of writ appeals have been preferred and have later been referred to the Full Bench by a Division Bench of this Court. ", "4. The case for the appellants has been argued by the learned Advocate General. , Sri , Smt. Vinobha Devi who appeared for the new applicants supported his contention. For the writ petitioners (respondents in appeals) arguments were submitted by and . ", "5. The point arising before can be stated as follows: Whether the existing operators on a route are entitled to file representations before while the said is dealing with grant of stage carriage permits to fresh applicants under Section 72 read with Ss. 70, 71 and 80 of the Motor Vehicles Act , 1988 and whether the existing operators can also claim a right to be heard before the and claim, for the aforesaid purposes, a right under Rule 166 of the A. P. Motor Vehicles Rules for grant of certified copies of the applications made by fresh applicants? ", "6. The Motor Vehicles Act , 1988 has been brought into force with effect from 1-7-1989. It is an Act to consolidate and amend the law relating to motor vehicles. The Statement of Objects and Reasons mentions that the Act is passed after taking into account the changes in the said transport technology, pattern of passengers and freight movements, development of the road net-work in the country and particularly the improved techniques in the motor vehicles management. Various committees like , , and -mission have gone into different aspects of the road transport and have recommended the updating, simplification and rationalisation of the law. A working group constituted in January, 1984 submitted proposals for a comprehensive new legislation. The said working group took into account the suggestions made by various bodies and institutions like , and other transport organisation as also manufacturers and.general public, besides, the said group obtained the comments of the State Governments and discussed the same at a meeting of the Transport Ministers of all the States and of the Union Territories. Some of the factors suggested for consideration therein are as follows:-- (a) The fast increasing number of both commercial vehicles and personal vehicles in the country; (b) the need for encouraging adoption of higher technology in automotive sector; (c) the greater flow-of passengers and freight with the least impediments so that islands of isolation are not created leading to regional or local imbalances; (d) concern for road safety standard and pollution control measures, standards for transportation of hazardous and explosive material; (e) simplification of procedure and policy liberalisations for private sector operations in the road transport field; and (f) the need for effective ways of tracking down traffic offenders. It is further mentioned in the Statement of Objects and Reasons that the legislation has been prepared in the light of the above background and among the various items provided therein include, liberalised schemes for grant of stage carriage permits on non-nationalised rules, permits also national permits for goods carriages. ", "7. Though the contentions of the learned counsel for the writ petitioners covered a large ground, we wish to make it clear even at the outset, that we do not propose to decide by hypothetical questions. It is neither necessary nor desirable for us to go into every aspect of the changes brought about by the new Act. We have therefore confined our decision to a very narrow compass consisting of only three inter-related questions concerning stage carriage permits, firstly, whether the existing operators have a legal right to file representations opposing the applications of new applicants after the commencement of the new Act; secondly, whether the existing operators have a right to be heard before fresh stage-carriage permits are granted; and thirdly whether, at the stage of grant of new stage carriage permits, the existing operators can claim a legal right, under R. 166, for grant of copies of the applications filed by the new applicants, for the limited purpose of enabling the existing operators to file representations. We are here concerned with the city town route services in Guntur, whose population is not more than five lakhs. ", "8. Under the old Act, the procedure contained in S. 47(1) required the factors stated in sub-clauses (a) to (f) thereof to be taken into account by the R.T.A. and it was further specifically provided in S. 47(1) that the R.T.A.: ", "\"Shall also take into consideration any representation made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provisions of road transport facilities recognised in this behalf by , or by any local authority, or police authority within whose jurisdiction any part of the proposed route or area lies.\" ", "That would mean that existing operators, or recognised associations local or police authorities could file representations before the objecting to grant of permit to new applicants. S. 47(3) further permitted the to 'limit' the number of stage carriages generally or of any specified type for which stage carriage permits may be granted in the region or in any specified area or on any specified route within the region. Adverting to S. 47(3) , has, however, pointed out in , that while fixing the limit of the number of stage carriages under S.47(3) by the , the said authority need not take into consideration any representation of the nature men-tioned in S. 47(1) nor hear the existing operators. further pointed out tbat representations mentioned in S.47(l) are referable to representations contemplated by S. 57(3) of the Act. These representations are those made by existing operators to the , after the publication of an application for a stage carriage permit. further observed that representations contemplated by S. 47(1) and S. 57(3) are representations by existing operators made subsequent to the application for grant of permit and therefore, these representations do not however enter the field of determination of number of stage carriages under S. 47(3) of the (old) Act. The deliberations decision under S. 47(3) as to the number of permits are confined to the 's administrative policy based on factors mentioned in S.47(1) and at the stage of S.47(3), there is no question of hearing the existing operators. Thus, even under the old Act, at the stage of limiting the number of permits under S. 47(3) there was no legal right vested in the existing operators either to file representations or to a right of hearing. A right to send representations and to a hearing was given before the under S.57(3) only at the stage of actual grant of permit to the new operators. ", "9. Under the old Act, S. 57(3) provided that if any person filed an application for a permit, the same should be available for inspection, that should publish the application and contents thereof and further state that representations (by existing operators) would be received, if sent, within particular time. If the grant of new applications was to result in exceeding the number of permits limited by Sec. 47(3), the applications were to be 'summarily' rejected. In other cases, the existing operators so representing should, under S. 57(5) be heard in the public hearing of the applications of the applicant. ", "10. The above procedure is changed under the New Act. We shall therefore compare Sec. 47(1) of the old Act and Sec. 71(1) of the new Act; and again Sec. 57(3) & (5) of the old Act and Sec. 80(2) of the new Act. ", "(A) \"Sec. 47(1) (old Act) : Procedure of Regional Transport Authority in considering application for stage carriage permit:-- (1) shall, in considering an application for a stage carriage permit, have regard to the following matters, namely: -- ", "(a) the interests of the public generally; ", "(b) the advantages to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; ", "(c) the adequacy of other passenger transport services operating or likely to operate in the near future, whether by road or other means, between the places to be served; ", "(d) the benefit to any particular locality or localities likely to be afforded by the service; ", "(e) the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending; ", "(f) the condition of the roads included in the proposed route or area; ", "and shall also take into consideration any representations made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provisions of road transport facilities recognised in this behalf by , or by any local authority, or police authority within whose juris,-diction any part of the proposed route or area lies: ", "Provided that other conditions being equal, an application for a stage carriage permit from a co-operative society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owner.\" ", "\"Sec. 71(1) (new Act):-- Procedure of in considering application for stage carriage permit:-- (1) A shall, while considering an application for a stage carriage permit, have regard to the objects of this Act : ", "Provided that such permit for a route of fifty Kilometres or less shall be granted only to an individual or a undertaking.\" ", "Note:-- (S.71(3) indicates procedure for limiting the number of permits in town with population not less than S lakhs). ", "(B) Sec. 57 (old Act):-- Procedure in applying for and granting permits:-- (3) On receipt of an application for a stage carriage permit or a public carrier's permit shall make the application available for inspection at the office of the and shall publish the application or the substance thereof in the prescribed manner together with a notice of the date before which representations in connection therewith may be submitted and the date, not being less than thirty days from such publication, on which and the time and place at which the application and any representations received will be considered; ", "Provided that, if the grant of any permit in accordance with the application or with the modifications would have the effect of increasing the number of vehicles operating in the region or in any area or on any route within the region under the class of permits to which the application relates, beyond the limit fixed in that behalf under sub-sec. (3) of S. 47 or sub-sec. (2) of S. 55 , as the case may be, may summarily refuse the application without following the procedure laid down in this subsection. ", "(5) When any representation such as is referred to in sub-sec. (3) is made, shall dispose of the application at a public hearing at which the applicant and the person making the representation shall have an opportunity of being heard either in person or by a duly authorised representative.\" ", "\"S. 80(2) (new Act):-- Procedure in applying for and granting permits:-- (2) shall not ordinarily refuse to grant an application for permit of any kind made at any time under this Act Provided that may summarily refuse the application if the grant of any permit in accordance with the application would have the effect of increasing the number of stage carriages as fixed and specified in a notification in the Official Gazette under cl. (a) of sub-sec. (3) of S.71 or of contract carriages as fixed and specified in a notification in the Official Gazette under cl.(a) of sub-sec. (3) of S. 74 : ", "Provided further that where refuses an application for the grant of permit of any kind under this Act, it shall give to the applicant in writing its reasons for the refusal of the same and an opportunity of being heard in the matter.\" ", "11. It is important to note that there is no reference to any representation in S.7(1) of the New Act, which corresponds to S. 47(1) of the old Act. All that S. 71(1) states is that the shall, while considering the applications for stage carriage permit, have regard to \"the objects of the Act\". While S. 47(3) of the old Act permitted the to limit permits in all routes without reference to the extent of population, the new S. 71(3) permits such a limit to number of permits to be imposed only in towns with population of not less than 5 lakhs, that too provided and ", "ment so direct, as stated in S. 71(3) of the new Act. There is also no reference to the factors (a) to (f) referred to in S. 47(3) or to the filing of any representations by the existing operators of associations, local authority or police authorities. Nor is there any reference to submission of representations in S. 80(2) of the new Act which corresponds to S. 57(3) of the old Act. Further, under the first proviso to S. 80(2) , the applications for permits are liable for summary rejection if the grant thereof will result in exceeding the number of permits limited under S. 71(3) for city routes in towns with population of not less than five lakhs. Under the second proviso to S. 80(2) , a right of hearing is limited to the applicant alone and if the permit is to be refused, reasons shall have to be given. ", "12. So far as the right of existing operators to send representations and seek a right of hearing are concerned, identical questions arose in the of Uttar Pradesh after the amendment in Act 25 of 1972. By that amendment, S.47(1) was amended by omitting the right of representation to existing operators given under the Central Act . However that right in so far as local and police authorities were/concerned was retained. It was held by a Division Bench of in v. that, after the amendment, the right of representation by existing operators has ceased to exist as the said provision is dropped. ", "13. The said U.P. amendment omitting the right of representation by existing operators, came up for consideration before in . . Adverting to the right of a rival operator to object to the grant of the application of other persons, referred to Art. 19(l)(g) and (6) of the Constitution of India and held that rival operators have no right to represent against the grant of permit to other persons. Such a right to represent, if it has to be conferred on an existing operator, it can be done only by way of a law made under Art. 19(6) in the interests of the general public. observed (in para 8) : ", "\"The fact that some others have also been enabled to obtain permits for running buses cannot constitute a violation of the appellants' rights under the above two cls. ((f) and (g)) of Art. 19 of the Constitution. The above provisions are not intended to grant a monopoly to a few bus operators to the exclusion of other eligible persons. No right guaranteed to any private party by Art. 19 of the Constitution of carrying on trade and business without competition from other eligible persons. Cl. (g) of Art. 19(1) gives a right to all citizens subject to Art. 19(6 ), to practise any profession or to carry on any occupation, trade or business. It is an enabling provision and does not confer a right on those already practising a profession or carrying on any occupation, trade or business to exclude and debar fresh eligible entrants from practising that profession or from carrying on that occupation, trade or business. The said provision is not intended to make any profession, business or trade the exclusive preserve of a few persons.\" ", "The aforesaid judgment of , therefore, makes it clear that an existing operator has no fundamental right to a monopoly of the trade, business or occupa tion and after the omission by the U.P. amending Act of 1972 of the right of representation by existing operators, no such right could be claimed. We may add that viewing the matter from the point of view of the new applicant's fundamental right under Article 19(1)(g ), the said right can be fettered only to the extent specified by law made under Art. 19(6). Under the old Act, the fetters on this fundamental right of the new applicant included a right conferred on existing operators and others under Ss.47(1), 57(3), (5) to represent. Those fetters have now been removed under S.71(1) and S.80(2) of the new Act of 1988. An existing operator, in our view, cannot, therefore, claim a right of representation or a right to be heard before the These rights have been specifically omitted in the new Act by . ", "14. Learned counsel for the writ petitioners (respondents) however relied upon a later decision of in . to contend that the decision in . no longer holds the field. In view of the subsequent statutory changes in we are of the view that this contention cannot be accepted. What happened in was that, after the Amendment of 1972 to the Motor Vehicles Act , 1939 it was found that certain anomalies had arisen in the working thereof, particularly in regard to the provision allowing an unrestricted number of stage carriage permits to be granted. With a view to remedy the situation, the Legislature amended the Act again by the Act 15 of 1976 permitting restriction of the number of permits. Thereafter the Central Act was also amended by in certain respects by Act 47 of 1978. Even so the State Government had issued certain notifications dated 10-1-1981 and 23-1-1981 permitting grant of permits to all eligible applicants without any upper limit. held that these notifications were inconsistent with the limitations as to number of permits introduced afresh by the Amending Act, 1976 and were bad. Their Lordships referred to the earlier judgment in . and said that the judgment was good as the law stood before the Amendment Act , 1976 and that once the Legislature had itself changed the law in 1976, the State Government could not have issued notifications inconsistent with the amending Act of 1976. It is, therefore, clear from the judgment in . that nowhere-doubted the correctness of its earlier judgment in fact, it stated (at para 19) : ", "\"Without saying anything more on the point, it may be stated that whatever this may have observed while considering that provision would not apply now as there is a clear departure made by the from that policy when it enacted the new sub-sec. (2) of S.43-A.\" ", "We may point out that nowhere said in . that even after the U.P. Amendment of 1972, (which are similar to the provisions of the present Act of 1988) omitting the provisions relating to the right of representation and right of hearing to existing operators, the existing operators have a right to represent or a right to be heard before the R.T.A. Hence, this latter decision, far from supporting the writ petitioners, supports the appellants as it reiterates the correctness of v. State of U.P. according to the law as it stood before the U.P. Amendment of 1976. ", "15. We may, in the context of Article 19(1)(g) and (6) also refer to four other rulings of . In v. R.T.A. Calcutta Region , smaller taxis at cheaper rates were introduced by orders of the R.T.A. and the same was questioned by taxi-owners who were to charge higher rates, on the ground that their business would be affected. The contention was rejected by holding that if other persons were also allowed the right to carry on the same occupation and an element of competition was introduced in the business, that did not amount to violation of fundamental right guaranteed under Article 19(1)(g). In another case in relating to change of location of existing rice-mill which adversely affected the business of another miller in the locality, it was held that a compelitor in the business (owner of another rice-mill), could have no grievance against the grant of permission to another under the Rice Milling Industry (Regulation) Act , 1958 and the fundamental right under Art. 19(1)(g) was subject only to such restrictions as are imposed under Art. 19(6) of the Constitution of India. A similar question arose again under the Bombay Regulation Act, 1953 and the Bombay Rules (1954) in AIR 1976 SC 578. It was held, on an elaborate consideration of the case-law, that the said Act and Rules did not confer any substantive justiciable right on a rival in cinema trader to lodge an objection in response to a notice published under R.4. The proprietor of a theatre holding a licence for exhibiting films had no legal right under the statutory provisions or under the general law which could be subjected to or threatened with injury as a result of the grant of no objection certificate' to the rival trader. After elaborately discussing the meaning of the words 'aggrieved person' in various laws, observed (see para 46): ", "\"Juridically, harm of this description is called damnum sine injuria, the term injuria here used in its true sense of an act contrary to law (Salmond on Jurisprudence, 12th Ed. by , p. 357, para 85). The reason why the law suffers a person knowingly to inflict harm of this description on another, without holding him accountable for it is that such harm done to an individual is again to society at large.\" ", "and again stated (para 49): ", "\".......the result of the exercise of discretionary powers, in his (existing licence) favour, will, on balance, be against public policy. It will eliminate healthy competition in this business which is so essential to raise commercial morality; it will tend to perpetuate the appellant's monopoly of cinema * business in the town, and above all, it will in effect, seriously injure the fundamental right of respondents 1 and 2, which they have under Art. 19(1)(g) of the Constitution of India to carry on trade or business subject to 'reasonable restrictions imposed by law'.\" ", "Again, in . the question arose under the M.P. Cinemas (Regulation) Act and case AIR 1976 SC 578 above referred to, was followed. ", "16. Viewing therefore from the perspective of Art. 19( 1 )(g) & (6) of the Constitution of India, it is clear that the existing operators have no 'legal right'to object to the grant of a permit to rival operators. Any injury by way of loss of business to the existing operators cannot, in law, be treated as a 'legal injury'. There would be no legal injury if such injury was the result of exercise of a fundamental right by another person. ", "17. Learned counsel for the writ peti- ", "tioners while accepting that there is no express provision in the new Act either in S. 71(1) or S. 80(2) conferring on the existing operators a legal right to file representations or for being heard have, however, contended that such a right has to be 'implied' by law. We shall now refer to this aspect of the matter. ", "18. Learned counsel for the writ petitioners (respondents) Sri. T. Venkataramana and Sri M. V. Ramana Reddy, referred to (AIR 1967 SC 1267); . ; ;_ National Textile Workers' Union v. Liberty Oil Mills v. Union of India v. State of H.P. ; ; ; v. Govt. of A.P. and Re Liverpool Taxi Owners' Assn. (1972) 2 All ER 589 for the proposition that 'whenever an order is passed by any authority which is likely to affect the rights of another person, such person must be given a reasonable opportunity to submit his objections. It is also stated in these decisions that principles of natural justice are to be implied and that there can also be a post-decisional opportunity in certain cases. On the other hand the learned Advocate General has referred to and . to contend that principles of natural justice can be expressly excluded and that such exclusion can be necessarily implied in certain cases. ", "19. In our view, there can be no quarrel with the general propositions of law referred to above by the learned counsel. No doubt, principles of natural justice can normally be implied even if there is no express provision therefore whenever the rights of a party are affected. But, at the same time, it is equally true that they can be excluded by the statute expressly or by necessary implication. This depends again on the intendment of the legislature, the provisions of the particular statute and the facts and circumstances of the case. We, therefore, once again come back to the question as to what is the position under the new Act of 1988? ", "20. We have noticed that under the old Act, there were provisions in Sec. 47(1) as well as S. 57(3) and (5) enabling existing operators to submit their representations and for a hearing to be given to them. But under the new Act, 1988 these provisions have been deliberately dropped by . The Statement of Objects and Reasons clearly states that the new Act proposes to liberalise the grant of permits. In such a situation, it is, in our opinion, not open to this Court to imply and read into the new Act, the same provisions which have been deliberately and expressly omitted. The new applicants for grant of stage carriage permits are obviously exercising their fundamental right under Art. 19(1)(g) to carry on their occupation, trade or business. Such a fundamental right can, no doubt, be restricted by an existing law or a new law, by the imposition of reasonable restrictions in the interest of the general public under Art. 19(6). It is for from time to time to define the limits up to which the said fundamental right unde'r Art. 19(1)(g) can be reasonably restricted. Under the old Motor Vehicles Act , 1939 the restrictions included one which enabled-an existing operator to represent and also to be heard in opposition. That restriction has now been deliberately removed and thereby the fundamental right of the applicant is not now as restricted as it was before the new Act. Further an existing operator cannot be said to suffer any legal injury (vide AIR 1976 SC 578) if a new rival operator is proposed to be introduced. These being the factors governing the situation, we are of the view that intended to negative any right to the existing operators either to submit their representations or to a right to a hearing under S. 71(1) or S. 80(2) of the new Act. It is therefore not open to the Court to imply principles of natural justice and add further restrictions than what considered sufficient, according to its new legislative policy. A similar change in the legislative policy brought about by in 1972 has already had the approval of and as stated in detail earlier. ", "21. The decision in Re Liver Pool Taxi Owners' Association (1972-2 All ER 589) relied upon by Sri for the writ petitioners turned, as stated by in AIR 1976 SC 578 on the peculiar facts therein and in particular on the assurance or undertaking given by the officials of and cannot help the writ petitioners. There, the number of taxi-cabs had been limited since 1948 to 300 by the licensing authority namely . In 1970, after learning that the proposed to increase the number of licences, the taxi-cab owners' association took up the matter with the '. On 24th July, 1970 and 28th October 1970 the town-clerk of the wrote to the solicitors of the association that the interested parties and the association would be fully consulted and heard before any decision was taken. In July, 1971, the matter came up before a sub-committee of the , the association was heard and the limits proposed by the Committee were approved by the council and finally on 4th August, the Chairman of the sub-Committee gave an undertaking that no licences additional to the existing 300 licences would be issued until the proposed legislation, which was under consideration, had come into force. But this undertaking was not adhered to later on the ground that it had no legal basis and the unilaterally resolved on 22nd December, 1971 to increase the number of licences. held that the undertaking that was given was compatible with the 's statutory duties and that it could be prohibited from acting contrary to the said undertaking. It is important to notice that under S. 37 of the Town Police Clauses Act, 1847, the had a right to 'limit' the number of licences. Further, there was an undertaking given on behalf of the . Adverting to this decision, it was observed in J. M. ", " AIR 1976 SC 578, by as follows (see paras 24, 25): ", "\"It may be noted that in this case, the whole question turned on the effect in law of the , undertaking and whether the applicants had been treated fairly. ", "Emphasising the 'very special circumstances' of the case, the read into the statute, a duty to act fairly in accordance with the principles of natural justice. Thus, a corresponding right to be treated fairly was also imported by implication in favour of the applicants. Viewed from this standpoint, the\" applicants had an interest recognised in law which was adversely affected by the impugned action. They had suffered a wrong as a result of the unfair treatment on the part of the .\" ", "The abovesaid English decision is therefore clearly distinguishable. Learned counsel for the writ petitioners attempted to argue that the above English case was not based on the undertaking alone. We are unable to agree with this contention particularly in view of the observations of . So far as the decision in . is concerned, that decision related to the locus standi of the petitioner tenant therein to file a writ petition under Art. 226 of the Constitution of India questioning an exemption granted by the under S. 20(1) of the Urban Land (Ceiling and Regulation) Act , 1976 to the owner of the premises. It was held that though the petitioner had locus standi to file a writ petition, the petitioner's legal rights as such were not affected and also that it had no right to be heard. While locus standi occupied a 'larger area' governing the right to approach the under Art. 226 , every such person could not claim a legal right to be heard before the under S. 20(1) of the said Act. For the purposes of application of principles of natural justice, the question according to the learned Judges was merely whether 'any legal power has been exercised over a person affecting his legal rights and not whether he has some legal right to move the s. For that purpose, the relied upon the decision of in AIR 1976 SC 578. ", "22. It was then argued for the respondents by Sri M. V, that the , was a quasi-judicial tribunal and that it was a body exercising powers in 'public interest' and therefore it ought to receive representations from existing operators and give them a right of hearing. In our view, the provisions of S. 71 and S. 80 in the new Act as compared with Ss. 47 and 57 of the old Act clearly define the limits of the restrictions to be imposed in 'public interest' under Art. 19(6) and therefore, the . while exercising powers under the new Act has necessarily to bear in mind those restrictions and cannot impose any other restrictions in the context of Art. 19(6 ), that were statutorily imposed earlier by Ss. 47 and 57 of the old Act. ", "23. For all the aforesaid reasons, we hold that when the is dealing with new applications for grant of stage carriage permits, existing operators cannot claim any legal right to file representations or a right for being heard. ", "24. We shall next refer to the right of the existing operators to obtain copies of the applications filed by new applicants under Rule 166 of the A.P. Motor Vehicles Rules, 1989. Rule 166 reads thus: ", "\"166. Levy of fees for supply of copies of documents:-- The Secretary, , and Secretary, , or any authority specified by the said Tribunal may in its discretion give any person interested in an appeal or revision a certified copy of the decision or an order or of any other relevant documents on payment of a fee of Rupees two, such payment being made by means of fee stamps affixed to the application for each such copy of the decision, orders, petition or documents.\" ", "It will be noticed that, under the said Rule, the may, in its discretion, give any person interested in an appeal or revision, a certified copy of the decision or an order or of any other relevant documents on payment of the fee. In the present case, the applications filed by the writ petitioners before the do not anywhere say that the applicants are interested in filing an appeal or revision. On the other hand, they merely say that they, as existing operators, require the certified copies of the applications filed by other applicants with a view to file 'representations' and that unless such certified copies are granted, they will not be in a position to file effective representations. Hence the applications of the writ petitioners do not, in our view, satisfy the requirements of R. 166. Further, we are of the view that the question of filing any application for a certified copies of the orders, decisions, petition or documents referred to in R. 166 arises only after the disposes of the application for grant of stage carriage permit and not before that stage. ", "25. So far as W.A, No. 796/90 (arising out of W.P. No. 14969/89) is concerned, where copies are asked also for purpose of submission of representation to higher authorities, we may state that R. 166 does not cover such a situation. ", "26. We may point out that even after the grant of such permits, the existing operators, have, as conceded before us, no right of appeal under S. 89 of the Act. There is no provision for appeal by existing operators. ", "27. It is no doubt argued by Sri and Sri. M, V. Ramana Reddi that the existing operators are, however, entitled to file revisions under Sec. 90 as 'persons aggrieved'. Reliance for that purpose is placed upon the decision of in . wherein it was held, with reference to S. 64-A of the old Act, that though the existing operators had no right to represent at the stage of Sec. 47(3) when the public need is gone into and the decides to open a new route, the existing operators could file a revision under Sec. 64-A. It is argued, on the said anology, that even if existing operators have no right to represent or right to be heard at the stage of Ss. 71 and 80, they could still file revisions under S. 90 . We do not think it necessary for the purpose of the cases before us to decide the question whether existing operators could file revisions under S.90 against orders granting stage carriage permit to applicants inasmuch as the matter in these writ petitions is still at the stage of grant of permits by the and also because the question whether they had a right of revision will depend upon the scheme of the Act. ", "28. There was also some argument before us as to whether under S. 89(2) of the new Act permits for stage carriage ought to be ordinarily granted as a matter of course in cases not covered by S. 71(3) . While for the appellants and for some of the new applicants it was argued that was the positional was argued for the writ petitioners (respondents) and for some of the other new-applicants, that even in cases not covered by S. 71 (3) of the new Act, it is incumbent on the to bear in mind the guidelines referred to in R. 179 of the new A.P. Motor Vehicles Rules, 1989 (corresponding to Rule 212 of the old Rules). We do not think it necessary to decide this question either. ", "29. The only and limited question therefore decided by us is that whenever fresh applications are filed under S.72 read with Ss. 70, 71 and 80 of the new Motor Vehicles Act , 1988, existing operators have no legal right !o file representations before the Nor can they claim any right to be heard by the It may however be open to them to send whatever representations they may like to send, as a matter of information, to the but this they cannot claim as of right. If any representations are so sent, it is open to the to consider them if there is anything relevant in the said representations. But the may or may not consider every such representation sent by the existing operators. Nor can the existing operators claim any legal right to be heard before the under any circumstances. They cannot also claim a right to be given certified copies under R. 166 of the A. P. Motor Vehicles Rules, 1989, of any applications filed by fresh applicants (who are seeking stage carriage permits) on the ground that such copies are necessary 'for filing effective representations' before the We do not decide any other question or questions which may have been incidentally referred to during the arguments, as it is not relevant for the question being decided by us. ", "30. For the aforesaid reasons, the writ appeals are allowed, the orders of the learned single Judge are set aside and the writ petitions are dismissed. In the circumstances there will be no order as to costs. Advocate's fee Rs. 330/- in each case. ", "31. Appeals allowed."], "relevant_candidates": ["0000047629", "0000169599", "0000729271", "0001207635", "0001232760", "0001239949", "0001427520", "0001749406", "0001860806", "0001908803"]} {"id": "0000522452", "text": ["PETITIONER: M/S. MATHRA PRASHAD AND SONS. Vs. RESPONDENT: STATE OF PUNJAB DATE OF JUDGMENT: 05/12/1961 BENCH: , M. BENCH: , M. , BHUVNESHWAR P.(CJ) , J.L. SHAH, J.C. MUDHOLKAR, J.R. CITATION: 1962 AIR 745 1962 SCR Supl. (1) 913 ACT: Sales Tax-Exemptions-Notification issued after commencement of financial year-Whether effective from date of notification or from commencement of financial year-East Punjab General Sales Tax Act, 1948 (E. P. of 1948). ss. 4,5,6,10,11-Notification dated September 27, 1954. HEADNOTE: Section 6(1) of the East Punjab General Sales Tax Act, 1948, provided that no tax shall be payable on the sale of goods specified in the Schedule to the Act and that no dealer shall charge sales tax on the sale of goods which were \"declared tax-free from time to time\". Sub-section (2) of s. 6 empowered by notification to add or to delete from the Schedule. On September 27, 1954, issued a notification under s. 6 (2) 914 adding item 51 relating to manufactured tobacco to the Schedule. The appellant contended that sales tax was a yearly tax and hence the exemption, whenever given during the financial year, became operative as from the beginning thereof. ^ Held, (per , , , and , , J., dissenting) that the exemption operated for the entire financial year. The tax was a yearly tax levied on the taxable turnover of a dealer every year though it was collected in some cases at the end of the year, in some cases quarterly and in other cases monthly. If the exemption operated for the period for which the tax was payable according as it was annually, quarterly or monthly the tax would be different for different persons; those paying annually would get exemption for the whole year but those paying quarterly or monthly would get the benefit in the quarter or month of the notification and not for earlier quarters or months. This could not have been intended. The exemption whenever it came in, in the year for which the tax was payable, exempted sales throughout the year, unless the notification fixed the date for the commencement of the exemption. ., 2 S.C.R. 189, referred to. Per , J.-The exemption became operative only from the date of the notification. The tax was not a yearly tax. The use of the words \"tax- free from time to time\" in s. 6 (1) showed that the exemption could be given at any time during the year and that it would operate from the date of the notification and not from the beginning of the financial year. Otherwise, an exemption given or an imposition made near the end of the year will both operate from the beginning of the year. This was never intended JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9 of 61. ", "Appeal from the judgment and order dated May 7, 1959, of in L.P.A. No. 86 of 1956. ", ", Attorney-General of India, , and , for the appellants. ", ", Advocate-General, Punjab, and , for the respondents. ", "915 ", "1961. December, 5. The Judgment of , , and , was delivered by , , J., delivered a separate judgment. ", "HIDAYATULLAH, J.-The appellants are a firm of general merchants which sells, among other goods manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (12 of 1954), which came into force in the State of Punjab from April 1, 1954. The firm is also a registered dealer under s. 7 of the East Punjab General Sales Tax Act, 1948 and till the end of March, 1954, was paying sales tax on manufactured tobacco also. Indeed, the firm paid sales tax on manufactured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently. On September 27, 1954, issued a Notification (No. 4556-E & T (Ch)-54/957) by which the schedule of exemptions under s. 6 of the Sales Tax Act was amended by the inclusion of item 51, which reads as follows: ", "\"51. Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954.\" This Notification was preceded by a Notification of May 7, 1954 (No. 427-E & T (Ch)-54/369), by which had given notice, as required by law, of its intention to add the said item in the schedule of exemptions. In June, 1954, issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as well as the fee for any period. The Press Note reads as follows: ", "\"There is some misapprehension in the minds of dealers in manufactured tobacco as to whether sales tax is also chargeable in respect of manufactured tobacco after the 1st April, 1954, in addition to the license fees under the Tobacco Vend Fees Act. Government would like to make it clear that although the Tobacco Vend Fees Act has come into force with effect from 1st April, 1954, no license fees for dealers have yet been prescribed under the Act. Therefore, the levy of sales tax continues till the Vend Fee licences come into operation. It is to be clearly understood that the Vend Fee will be proportionately reduced for the current financial year to adjust the period for which sales tax will have been charged. Manufactured tobacco will be exempted from sales tax simultaneously with the enforcement of the Vend Fees.\" ", "On August 2, 1954, issued another Press Note, in which the decision was altered. The Press Note said: ", "\"Government recently announced through a press note that the levy of Sales Tax on manufactured tobacco would be continued till the Vend Fee Licences came into operation and that the Vend Fee would be proportionately reduced for the current financial year in respect of the period for which Sales Tax would have been charged. In order to avoid double taxation, Government have since reconsidered the matter and have, in supersession of the previous decision, decided that the Sales Tax, if any, recovered from the dealers would be refunded and that no Sales Tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act. Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised.\" ", "It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms and licences prescribed during the financial year ending on March 31, 1955. In the meantime, the appellants, as already stated, paid sales tax on sales of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27, 1954. The appellants had made enquiries from , Punjab, about the Press Note of August 2, 1954, and had been assured that the Notification as printed in the Newspapers was accurate, and that Government intended implementing the Press Note. ", "On January 23, 1956, the appellants received a notice from , Rohtak, calling upon them to produce their account books. The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success. The appellants then filed on February 8, 1956 a petition under Art. 226 of the Constitution for substantially three reliefs. They were: (a) a declaration that the levy of sales tax on manufactured tobacco upto September 26, 1954 was illegal; (b) refund of the sales tax paid by it for the quarter ending June 30, 1954; and (c) an order in the nature of a writ of against the proposed levy of sales tax till September 26, 1954. It remains to mention that the sales tax authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954 and reaffirmed the policy stated in the Press Note of June, 1954. The following extract from the Press Note of August, 1955 may be read here: ", "\"2. In conformity with the press note issued in June, 1954, and in view of the facts explained above, Government have now decided that sales tax on tobacco shall be levied for the year 1954-55 before the 27th September, only, the date on which tobacco was included in the schedule of exemptions appended to the General Sales Tax Act . This amounts to a handsome concession to the dealers and Government except that, in return, every cooperation shall be shown by the dealers of the assessing authorities in the matter of the assessment of the tax.\" ", "The petition under Art. 226 was heard by a learned Single Judge of , who held that the orders of Government were entirely in accordance with law, that the East Punjab Sales Tax Act, in so far as it related to the sale of manufactured tobacco was not repealed by the Tobacco Vend Fees Act, and that sales tax on manufactured tobacco was payable from April 1, 1954 to September 26, 1954, in view of the fact that the exemption was made on September 27, 1954, and would operate from the latter date. Against the decision of the learned Judge dismissing the writ petition, an appeal under Letters Patent was filed. , which heard the appeal, agreed with the judgment appealed from, and dismissed the appeal. A certificate was, however, granted to the appellants and the present appeal has been filed. ", "Two contentions were raised in the forefront before , by the appellants. The first was that the Punjab Tobacco Vend Fees Act had pro tanto repealed the East Punjab General Sales Tax Act, and that sales tax on manufactured tobacco could not be levied after April 1, 1954. The second was that by its assurance in the Press Note of August, 1954, had estopped itself from reversing its policy and claming the sales tax up to the date of the Notification. These points were not seriously pressed upon us, because there can be two taxes on the same commodity or goods without the one law repealing the other. No repeal can be implied, unless there is an express repeal of an earlier Act by the later Act, or unless the two Acts cannot stand together. The first argument was, therefore, rightly rejected in . The second argument is also without force. There can be no estoppel against a statute. If the law requires that a certain tax be collected, it cannot be given up, and any assurance that it would not be collected, would not bind , whenever it choose to collect it. ", "The question which is now raised, and of which there is but a trace in is the real one to decide, and it may be formulated thus; Did the exemption in the Notification issued on September 27, 1954 have effect from that date, or from the beginning of the financial year ? We are not concerned with the question whether, in the absence of rules and forms, the Punjab Tobacco Vend Fees Act, 1954 could operate from April 1, 1954. Whether it did or did not, can make no difference to the sale tax, because the Punjab Tobacco Vend Fees Act, 1954 did not abrogate the Sales Tax Act . If sales Tax was not payable, it would be because of the exemption, and the only question thus is when the exemption began to operate. The Notification does not say from what date the exemption operates. Taking the Notification by itself, it cannot be said that it comes into force from an earlier date. Both sides have thus called in aid provisions of the East Punjab General Sales Tax Act and the Rules to determine the date from which the exemption can be said to operate. Reference was made by the appellants to a decision of this Court in .(1), where a notification increasing sales tax on edible oils issued in the middle of the year 1948 was held not to apply to the assessee in that year, inasmuch as its liability to tax had become fixed on April 1, earlier, as it had elected to pay tax on the turnover of the previous year. The scheme of taxation under the U.P. Sales Tax Act, 1948 (15 of 1948) and the Rules under that Act is so vastly different from the East Punjab General Sales Tax Act and the Rules under it, that a detailed reference to that case may not be necessary. ", "The question thus must be viewed in the setting of the East Punjab Sales Tax Act and the Rules under it. We shall refer to them shortly as the Act and the Rules in the rest of this judgment. The Act was passed in 1948, and came into force on November 15, 1948. Previous to this, sometimes licence fee under an earlier Tobacco Vend Fees Act and sometimes sales tax also under an earlier Sales Tax Act had been levied but not side by side in the Province. The history of these earlier Acts was brought to our notice during the course of the argument, but nothing turns upon it. ", "The sales tax under the Act continued to be levied up to April 1, 1954, and none has disputed that it could be levied. On that date, the Punjab Tobacco Vend Fees Act came into force. We have already said that the latter Act did not repeal pro tanto the earlier. The liability for sales tax in this appeal is for two quarters ending June 30, 1954, and September 30, 1954. There is no dispute that after September 27, 1954 sales tax could not be levied, in view of the inclusion of item 51 in the schedule exempting manufactured tobacco from the operation of the Act. We must now examine those provisions of the Act which are claimed by the rival parties to indicate the moment of time from which the exemption granted by the Notification began to operate. \"Turnover\" has been defined in the Act to include the aggregate of the amounts of sales and parts of sales actually made by any dealer during the given period, less certain allowances, and \"year\" means the financial year. Sections 4 and 5 read together are the charging sections, the first dealing with the incidence of the tax, and the second, with its rate. Section 6 (1) provides for exemptions on the sale of goods which are specified in schedule to the Act. Under s. 6 (2), has been given the power to add to or delete from that schedule. Section 10 deals with the making of returns and payment of the tax. Section 27 empowers to make rules for carrying out the purposes of the Act. This is the general scheme of the Act, in so far as we are concerned; but a somewhat detailed examination of these sections is necessary to understand the rival contentions. ", " Section 4 consists of five sub-sections. Sub Section (1), which is a subject to the provisions of ss. 5 and 6 , says that every dealer, except one dealing exclusively in goods declared tax-free under s. 6 , whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum, shall be liable to pay tax under the Act on all sales effected after the coming into force of this Act. A proviso is added, which is not relevant. Sub-section (2) says that every dealer who is liable to pay tax under the first sub-section shall be liable to pay it on the expiry of 30 days after the date on which his gross turnover first exceeds the taxable quantum. Sub-sections (3) and (4) deal with the continuance of the liability of the dealer under certain circumstances, and are not relevant here. Sub- section (5) then defines \"taxable quantum\" in relation to different kinds of dealers, and fixes a certain amount as the lowest limit. Since, in the present case, the taxable quantum is above the limit applicable to the appellants and they are also admittedly dealers, a detailed reference to the provisions of sub-s. (5) is unnecessary. Section 5 , which deals with the rate of tax, is made subject to the other provisions of the Act, and the first sub-section says that there shall be levied on the taxable turnover every year of a dealer a tax at such rates (not exceeding two pice in a rupee) as may by notification direct. \"Taxable turnover\" ", "922 ", "is then defined by the second sub-section to mean that part of a dealer's gross turnover during any period which remains after deducting therefrom, inter alia his turnover during that period of tax- free sales, sales to registered dealers, sales to any undertaking supplying electrical energy, sales to dealers outside Punjab and other sales, as may be prescribed. With none of these deductions we are concerned in this case. ", "Now, the appellants emphasise the words \"gross turnover during the year\" in s.4 (1) and the words \"taxable turnover every year of a dealer\" in s. 5 (1), and argue that the tax is computed year-wise, and the exemption must, therefore, operate for the whole of the year in which it is made, irrespective of the date on which the Notification is made. The respondents, on the other hand, emphasise the words \"gross turnover during any period\" and \"his turnover during that period\" occurring in s. 5 , and contend that the tax is not year-wise but accrues, so to speak, from day to day or at least from period to period within a year, and the exemption thus operates not from the whole of the year, but for the period within which it is granted, and refer in aid of this argument, to ss. 6 and 10 . Sections 4 (1) and 5 (1) are subject to s. 6 , s. 5 (1), to other sections of the Act and so, s. 10 , and we have to see what they provide. Section 6 (1) is brief, and may be quoted in extenso. It reads: ", "\"6 (1). No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column there of and no dealer shall charge Sales Tax on the sale of goods which are declared tax-free from time to time under this section.\" ", "The respondents emphasise the words \"from time to time\" in the first sub-section, and say that they also show that exemptions may be given, withdrawn, or given again and again several times during the year in respect of the same goods, and the exemptions, therefore, begin to operate when they are given and cease, when they are withdrawn. But, the appellants contend that these words merely indicate that the power may be exercised as often as needed, and do not indicate the time from which the operation of the exemption commences and the period during which it lasts. Section 10 (1) provides that the tax payable under the Act shall be paid in the manner provided at such intervals, as may be prescribed. Two Rules framed under s. 27 provide for such intervals. Rule 20 reads: ", "\"Every registered dealer other than those referred to in rules 17, 18 and 19, shall furnish returns in Form S.T.VIII or S.T. XXIII, if so permitted quarterly within thirty days from the expiry of each quarter.\" (words underlined were introduced on June 28, 1955). ", "Rule 23: ", "\"Notwithstanding the provisions of rules 20 and 21, the appropriate may, for reasons to be recorded in writing, fix monthly returns for a dealer, who would otherwise be required to furnish quarterly or annually under these rules.\" ", "Section 10 and Rules 20 and 23 clearly provide that returns may be made annually, quarterly or monthly. The forms, S. T. VIII and S.T. XXIII, also are forms of returns of sales tax payable for the year, quarterly or monthly. It is thus possible that some dealers pay tax annually some, quarterly, and some, monthly. ", "The contention of the appellants is that s.10 read with Rules 20 and 23 merely provides for making of returns at prescribed intervals and the collection of tax is for a period falling between those intervals, but the tax is the tax appropriate to the whole year's result. The respondents contend that the effect of the section and the two Rules is that the tax due for the period of the return is separate from any other tax for any other period. Each period, according to them, must be viewed separately and not as part of a year. Thus, if exemption is granted during the second quarter, according to the respondents it affects that quarter and subsequent quarters but not the first quarter, because tax is payable on the turnover of a period and at such intervals, as may be applicable to an assessee. ", "We cannot help saying that the Act and the Notification could have been framed to obviate such unnecessary questions by providing clearly in them the time from which such exemptions would begin to operate. Similarly, if the rules under the Punjab Tobacco Vend Fees Act had been framed in time and the Tobacco Vend Fees Act together with the Rules under it and the exemptions under the Sales Tax Act were brought into force together, a considerable amount of time to the and the would have been saved, as also trouble to the tax-payer. The Rules under the Punjab Tobacco Vend Fees Act were not framed during the whole of the financial year, 1954-55. Contradictory Press Notes were issued, which showed that the State Government itself was not sure of the true legal position, thus causing great confusion and distrust in the minds of the tax-payers. ", "There is no doubt that the tax is a yearly tax. It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949, was above the taxable quantum. The tax is to be levied on the taxable turnover of a dealer every year. The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of any period some deductions have to be made for the same period. This clearly shows that the tax is for a year. The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year; in some others, the tax is collected quarterly and in still other cases, even monthly. If the exemption can be said to operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would be different for different persons. Those who are paying the tax annually would get exemption for the whole year; but those who are paying it quarterly or monthly would get benefit in the quarter or the month of the Notification but not for earlier quarters or months. It could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment. ", "The exemption thus must operate either from the date of the Notification or from the commencement of the financial year. Here, the nature of the tax, as disclosed in ss. 4 and 5 , is decisive. In s. (5), the tax is made leviable \"on the taxable turnover every year of a dealer\". The divisions of the year and the taxable turnover into different parts are to make easy the collection of tax, and form part of the machinery sections. If the tax is yearly and is to be paid on the taxable turnover of a dealer, then the exemption, whenever it comes in, in the year for which the tax is payable, would exempt sales of those goods throughout the year, unless the Act said that the Notification was not to have this effect, or the Notification fixed the date for the commencement of the exemption. In the present case, the Notification did not fix the date from which the exemption was to operate, probably because the Act omitted to make such provision, enabling the to do so, and the exemption must, therefore, operate for the whole year, during which it was granted. ", "926 ", "The case of this Court, to which we have referred earlier, dealt with an Act under which the taxpayer could elect to pay the tax on the turnover of either the previous year or the year of assessment. A notification in the middle of the assessment year was considered, and was held inapplicable in those cases where a dealer had elected to pay tax on the turnover of his previous year. The majority view on that occasion pointed out that it was not possible to divide the assessment year in two portions, in which the tax was levied at one rate in one part and another rate in another part. The case was confined to a dealer who had elected to pay the tax for a year different from that in which the exemption was granted. Those facts do not exist here; but if the case is considered at all relevant, it supports the appellants rather than the respondents. ", "In the result, the appeal succeeds, and is allowed with costs. ", "KAPUR, J.-The facts of this case have been set out in the judgment of my learned brother , which I have had the advantage of reading and as I am unable to agree with the conclusion that the effect of the exemption given by Notification No. 34556-E & T. (CH)54/957 dated September 27, 1954, issued under s.6(2) of the Punjab General Sales Tax Act (Act 16 of 1948), hereinafter called the \"Act\", on unmanufactured tobacco becomes effective as from the beginning of the financial year, I proceed to give my reasons for the same. ", "The period in regard to which the disputed amount of sales tax is sought to be levied was from April. 1, 1954 to September 27, 1954. Previous to the issuing of the notification of September 27, 1954, issued a notification required under s.6(2) of the Act for the purpose of information of persons likely to be affected thereby and to give them an opportunity to file any objections or suggestions in regard to the same. A press note was issued on August 4, 1954 stating that no sales tax will be leviable on manufactured tobacco for the financial year 1954-55. ", "In order to resolve the controversy as to whether the exemption is effective from the commencement of the financial year or from the date of the notification it is necessary to refer to the scheme of the Act and the rules made thereunder. The East Punjab General Sales Tax Act (Act 46 of 1948) as amended, made provision for the levy of general sales tax on the sale of goods in the Punjab and repealed the General Sales Tax Act of 1941. Section 2 of the Act gives definitions and cl.(d) defines a \"dealer\" as a person.. engaged in the business of selling or supplying goods. In cl.(i) \"Turnover\" was defined to include- ", "\"the aggregate of the amount of a sale and parts of the sale actually made by any dealer during the given period less any sum allowed as cash discount according to ordinary trade practice....\" ", "Sections 4 and 5 are the charging sections, the former makes the tax leviable prospectively and the latter prescribes the rate of tax. The relevant portions of these sections when quoted are as follows: ", "S.4(1) \"Subject to the provisions of sections 5 and 6 , every dealer except one dealing exclusively in goods declared tax-free under section 6 whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act. ", "(2) Every dealer to whom sub-section (1) does not apply or who does not deal exclusively in goods declared to be tax-free under section 6 shall be liable to pay tax under this Act on the expiry of 30 days after the date which his gross turnover first exceeds the taxable quantum.\" ", "\"Taxable quantum\" mentioned in sub-section (2) is defined in sub-section (5) of s. 4 . ", "Thus a dealer is liable to sales tax if his sales in the year preceding the commencement of the Act are more than the taxable quantum (s. ", "4.(1) or subsequently becomes so during any year. S. 5.(1) \"Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates not exceeding two pice in a rupee as the State Government may by notification direct: ", "Provided that Government may by notification in the Official Gazette declare that in respect of any goods or class of goods the dealer may pay such lump-sum by way of composition of the tax payable under this Act as the Government may notify from time to time. ", "(2) In this Act the expression \"taxable turnover\" means that part of a dealer's gross turnover during any period which remains after deducting therefrom. ", "(a) his turnover during that period on ", "(i) the sale of goods declared tax-free under section 6 ; ", "(ii)............................... . ", "(iii).............................. \" ", "Section 6 which makes provision for giving exemption is as follows:- ", "S.6(1) \"No tax shall be payable under this act on the sale of goods specified in the first column of the Schedule subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof, and no dealer shall charge Sales Tax on the sale of goods which are declared tax- free from time to time under this section. (2) The State Government, after giving by notification not less than three months' notice of its intention so to do, may by like notification add to or delete from the Schedule and thereupon the Schedule shall be deemed to be amended accordingly.\" Section 10 deals with payment of taxes of returns. Clause (1) of s. 10 provides:- ", "S.10 (1) \"Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.\" ", "Section 11 is the section dealing with assessments. It provides that if is satisfied that the returns furnished are correct and complete he shall assess the amount of tax due and if he is not so satisfied he can require the production of evidence which may be necessary and provision is also made for default in carrying out the notice issued. Section 27 gives the the power to make rules. The relevant portions of this section are clauses ", "(h) and (i) which were as follows:- ", "(h) \"the return to be furnished under sub- section (3) of section 10 , and dates by which and the authority to which, such returns shall be furnished; ", "(i) the date by which returns for any period are to be furnished and the procedure to be followed for assessment under section ", "11.\" ", "Under the rule making power rules have been framed by and reference may be made to Rules 20 and 23. Under the former rule every registered dealer is required to furnish returns in Form ST-VIII or ST-XXIII if so permitted quarterly within thirty days from the expiry of each quarter. Under the latter is given the power to tax the returns to be made monthly in the case of a dealer who would otherwise be required to furnish them quarterly or annually. ", "It was argued that the tax under s.5 was a yearly tax and therefore whenever the exemption may be given during a financial year the effect of the exemption will become operative as from the beginning of the financial year and emphasis was laid on the words \"there shall be levied on the taxable turnover every year of a dealer a tax..\" The argument was that it was a yearly tax on the turnover and not that every year a tax was to be levied on the taxable turnover i.e. aggregate of the sales made during a given period. It was also argued that if the exemption of the turnover was to operate for the quarter in which the exemption was notified, the consequence will be absurd as those who pay the tax on quarterly returns or monthly returns will not be able to get the advantage of the exemption whereas those who pay on yearly returns will be so entitled. ", "I am unable to agree that the effect of the collection of the words in s. 5 and particularly of the words \"shall be levied on the taxable turnover every year...... a tax\" is what was argued by the appellants i.e. it was a yearly tax like the income tax. Section 6 which provides for exemption specifically envisages the declaration from time to time of exemption of goods which are to be tax-free. The use of the words \"tax-free from time to time\", in my opinion, means that the exemption may be given at any time during the year but it does not suggest that the exemption will operate from the beginning of the year and not from the time that the exemption is given. If this were not so the the imposition of sales tax by excluding an article exempt from tax from the schedule say about the end of the financial year would render the dealer liable to sales tax for the whole year even though he may not have collected any sales tax from his customers which under the law he would be entitled to do if the article is not in the schedule. It will be an imposition which is not envisaged by the general scheme of the Sales Tax Act because the tax is exigible on taxable turnover in every return made monthly or quarterly or yearly as the case may be. It appears that it is for that reason that in the definition of the word \"turnover\" the legislature has chosen the word \"during the given period\" i.e. the period for which the tax is leviable and is levied. Similarly in subsection (2) of s. 5 where sales tax is levied on the taxable turnover of a dealer the use of the word \"during any period\" is again repeated and in cl.(a) of that section reference is made to deduction from his turnover during that period of the sale of goods declared tax-free under s. 6 and that is for a good reason because s. 6 itself mentions the declaration of tax-free goods from time to time indicating that whenever during the year or at any time during the year when goods are notified to be tax-free. ", "That the intention of the legislature was to give exemption from the date of the notification or such date as is mentioned in the notification is further supported by the provisions of ss. 10 and 11 of the Act. Under s. 10 a dealer may be required to furnish his return at such intervals as may be prescribed and when he makes a return it must necessarily be of the goods on which during that period sales tax was exigible. Under sub- s.(4) of s.10 the dealer is required to pay into the treasury the full amount of tax according to his return. Under s. 11 the assessment of the tax either on the acceptance of the return or after production of such evidence as may be required is to be made. From the provisions of a 11, it does not appear that returns are to be scrutinised at the end of the year like in income tax cases and assessment made on the income of the year preceding the assessment year. It is to be made in regard to each return whenever according to the rules the return has to be and is made. The tax is also paid for that period i.e. on the taxable turnover for the period for which the return is made and which becomes the subject matter of assessment. When the assessment has been made and the tax assessed is paid the assessment for that period is completed and all proceedings and liabilities and subjected to what is stated as to escaped periods. ", "This is further clear from the rules which have been made in regard to registration and furnishing of returns. In the registration certificate it has to be mentioned as to what goods are free of tax. Returns are required to be made in the Forms which are given i.e. Form VIII or Form XXIII. A return under Form VIII may be monthly, quarterly or yearly. A return to be made also provides for mentioning the turnover of tax- free goods and goods which are exempted from sales tax. If the contention of the appellants is correct, then after all the returns have been filed, the amount of sales tax according to the returns assessed and payments made, there will have to be proceedings for reassessment, remission or refund as the case may be in regard to those periods, if any goods are added to the schedule exempting them from sales tax after the assessment or any goods are deleted from the schedule thus making them liable for sales tax and that will be for the periods of which the assessment had already been completed and finished. That does not seem to be the scheme of the Act. It does not envisage reassessment for the purpose of refunding the tax assessed and paid on articles which were assessable at the time the assessment was made but became exempt later nor is it envisaged in the case of articles excluded from the schedule. Section 11(6) which deals with reassessments at the relevant time provided: ", "\"If upon information which has come into his possession is satisfied that any dealer has been liable to pay tax under this Act in respect of any period has failed to apply for registration, shall.........assess to the best of his judgment the amount of tax.......due from the dealer.\" ", "The scheme of the Act and the rules made thereunder do not, in my opinion, show that the exemption becomes operative for the whole year whenever during the year the notification of exemption is issued even though it may be on the last day of the financial year. ", "I would therefore dismiss this appeal with costs. ", "By . In accordance with the judgment of the majority, the appeal stands allowed with costs."], "relevant_candidates": ["0000850597"]} {"id": "0000527368", "text": ["JUDGMENT , C.J. ", "1. On 27-10-1944, the appellant, , was appointed a District Fishery Officer along with several other persons. He was put on probation for a period of two years and the order of appointment specifically provided that he would be confirmed in service \"on the satisfactory completion of the period of probation and the passing of a departmental examination, which may be prescribed during the period.\" No departmental examination was held during the probationary period, but the appellant was allowed to continue in service. An examination was held in 1951 and the appellant did appear in it, but was unable to pass. Up to the time when the proceedings out of which this appeal has arisen were commenced, he had not passed the departmental examination. We are informed that he passed it while he was under suspension. ", "2. On 22-9-1951, the appellant was placed under suspension by an order passed on that date. Along with the order, a charge-sheet containing as many as five charges was served on him. Those charges related principally to alleged irregularities in monetary dealings and also failure to maintain proper accounts. The charge-sheet, after reciting the charges, directed the appellant to show cause within a fortnight why disciplinary action under Rule 7 of the Bengal Subordinate Services (Discipline and Appeal) Rules. 1936 should not be taken against him. Both the order of suspension and the charge-sheet were signed by one Dr. who was the Director of at the time. ", "3. The appellant showed cause by means of a lengthy document submitted on 14-11-1931. On the 7th of December following, he received a telegram from the Director of , directing him to see the Director on the 10th of December next in connection with the explanation furnished. did see the Director on that date and something like an enquiry was held at which another Officer as also a stenographer was present. What happened exactly on the 10th of December is a matter of dispute between the parties, but this much is clear that the enquiry was not concluded on that date. It appears from a letter of the Director that he thought that the appellant was obstinately refusing to furnish further explanation as to certain points raised by him in his memorandum and that he was insisting on the points being formally reduced to writing and formally served on him before he would undertake to answer them. The appellant's version is different. Be that as it may, the Director finally asked the appellant to appear before him once again on the 13th of December. The appellant did not appear on that date, but on the previous clay left a letter addressed to the Director at his Office by which he explained his own point of view. As the appellant failed to appear on the 13th of December, the Director treated his examination as closed and made a report which was adverse to the appellant. The report was duly considered by and they came provisionally to the conclusion that the appellant \"should be punished with discharge from service under Rule 49 (vi) of the Civil\" Service (C.G.A.) Rules.\" By a notice dated 14-5-1952, an Assistant Secretary to the State called upon the appellant to submit within fifteen days any representation that he might desire to make as to why he should not be punished in the aforesaid manner. ", "4. The appellant did make a representation, but it found no favour with the authorities. They consulted and on the recommendation received from that body, they finally decided that the appellant should be discharged from service. Thereafter, by an order dated 28-3-1953, he was discharged. ", "5. The appellant then moved this Court under Article 226 of the Constitution against the Director of , the Secretary in the Department of Forests and and the State of West Bengal for a writ of mandamus, commanding them to rescind the orders passed against him or to forbear from giving effect to them. The usual additional prayers for writs of certiorari and prohibition were also made. A Rule was issued on the application, but at the final hearing it was discharged by , J., by an order dated 29-5-1956. Aggrieved by that order, the appellant preferred the present appeal. ", "6. A great deal of controversy appears to have taken place before the learned Judge as to whether the appellant had continued to be a mere probationer in service or had become a confirmed member by reason of his having been retained in employment after the expiry of the probationary period. The learned Judge held that the appellant had continued to be a probationer and I find no good reason to dissent from that view. It is quite true that the probationary period was for two years only and that even after the expiry of that period, the appellant had not been discharged but kept on in service. At the same time, he had not been confirmed. It has also to be noticed that by the very terms of his appointment, he was to be confirmed only if he satisfied both of two conditions, one of which was satisfactory work during the probationary period and the other of which was the passing of a departmental examination. Admittedly, he did not pass a departmental examination during the probationary period and obviously his work was not considered satisfactory. It may have been wrong for not to hold a departmental examination within the probationary period and the appellant, if he was so minded, might have taken appropriate steps at the appropriate time for forcing to hold a timely examination. This point, however, which is somewhat in the appellant's favour, loses a great deal of its force, if one remembers that when the examination was ultimately held in 1951, the appellant failed to pass it. Be that as it may, whatever might have been the reason for not confirming him, the fact remains that he was not confirmed and if he was not confirmed, he could not claim any status other than that of a probationer. ", "7. The learned Judge found the status of the appellant to be a complete answer to the grievance made by him. The grievance was that he was entitled to the benefit of Article 311(2) of the Constitution of India and, therefore, he was entitled to a proper enquiry into the charges against him and proper opportunities to show cause both against the charges and, if the charges were found proved, against the action proposed to her taken against him. , J., disposed of the appellant's complaint by holding that since his status in service was no more than that of a probationer and since under the very terms of his employment, he would be liable to be discharged, if his work was not found satisfactory, it could not be said that he had been penalised, if his service had been terminated in the view that he had failed to render satisfactory service. What had happened, according to the learned Judge, was that the conditions under which the appellant had entered employment in had been worked out in a normal manner and, consequently, no question of any penalty arose at all. ", "8. The learned Judge also pointed out that the appellant had been proceeded against under Rule 7 of the Bengal Subordinate Services (Discipline and Appeal) Rules, 1936 and that, according to the explanation appended to that Rule, the discharge of a person appointed on probation during the period of probation would not amount to removal or dismissal within the meaning of the Rule. On the basis of the explanation the learned Judge held that since the appellant was only a probationer and since he had been discharged during the period of his probation, he had neither been dismissed nor removed and, therefore, he could not complain that the protection of Article 311(2) had not been made available to him. ", "9. A point had been taken before the learned Judge that the enquiry which had been held was not a proper enquiry at all. It was said that the Director of , having himself framed the charges and having been virtually in the position of a complainant, should not have constituted himself the Enquiring Officer as well. Other complaints were also made as to irregularities in the course of the enquiry. The learned Judge found it unnecessary to decide whether what had taken place could be said to have been an enquiry as contemplated by Article 311(2) or the relevant Service Rules, because, in his view, the appellant having been a mere probationer, was not entitled to an enquiry of that kind at all. ", "10. On the broad features of the case, the learned Judge held that it could not fairly be said that the appellant had had no opportunity for establishing his innocence. He pointed out that the authorities had proceeded on documents which had been fully dealt with by the appellant in his representations and that he had been given opportunity to show cause against both the charges and the penalty proposed to be imposed on him. Accordingly, the learned Judge concluded that even if Rule 55B of the Fundamental Rules applied, it could not be said that the benefit of that Rule had been withheld from him. I should explain here that Rule 55B provides that where it is proposed to terminate the employment of a probationer, whether during or at the end of the period of probation, for any specific fault on account of his unsuitability for the service, he shall be apprised of the grounds of such proposal and given an opportunity to show cause against it. There is no such Rule amongst the Bengal Subordinate Services (Discipline and Appeal) Rules, 1936, and that explains why the learned Judge said \"even if Rule 55B applies.' ", "11. It appears to me that the view taken by the learned Judge of the proceedings had against the appellant is not warranted by the facts. It is quite true that his status was that of a probationer, as the learned Judge has held and as I think he rightly held. But the mere fact that the appellant was a probationer could not by itself exclude him from the benefit of the Constitutional protection. If the service of a probationer is terminated merely on the ground of his work being unsatisfactory and terminated in accordance with the terms of the employment, no question of any penalty being imposed, it is true, arises. But even a probationer can be proceeded against for misconduct and proceedings with a view to imposing a penalty can be taken against a probationer as well. If, on the facts of the case, it appears that what the authorities did was not merely to terminate the employment of the probationer, because his work had not been found up to the required standard, but they had proceeded on some ground extraneous to the terms of service and had intended to punish the probationer on that ground, Article 311(2) would obviously be attracted. As I have explained elsewhere, a probationer will normally servo up to the end of the probationary period and then be either confirmed, if his work has been found satisfactory, or discharged, if the reverse has been the case; but if before me probationary period is over or if although the period is over, the servant concerned is still holding the status of a probationer, some misconduct if alleged against him and proceedings are started with a view to punishing him for such misconduct, it can by no means be said that no more is being done than the terms of the employment are being worked out. To such a case, as I have already said, the provisions of Article 311(2) will apply. ", "12. Before dealing with the facts of the case may point out that the argument drawn by the learned Judge from Rule 7 of the Bengal Subordinate Services (Discipline and Appeal) Rules, 1936, does not, with respect, appear to me to be correct. Under the Explanation to Rule 7, discharge of a probationer during the period of probation does not I amount to removal or dismissal from service. The I meaning of that provision is that if a person, appointed on probation, is discharged during the period of probation, such discharge will not be a penalty of removal within the meaning of clause (vi) of Rule 7, nor a penalty of dismissal within the meaning of clause (vii) of the same Rule. In such a case, therefore, there would be no question of proceeding under Rule 7 at all, because Rule 7 only provides for imposition of penalties by way, inter alia, of removal from service or dismissal. The fact, therefore, that the authorities in the present case proceeded under Rule 7 of the Bengal Subordinate Services (Discipline and Appeal) Rules, 1936, proves rather than disproves that they were proceeding against the appellant with a view to imposing a penalty. The explanation to Rule 7 is an exception and if a case comes under the exception, Rule 7 will not apply at all and no proceedings under that Rule can be taken. ", "13. Turning now to the facts of the case, it appears from the charge-sheet that the charges all related to specific instances of misconduct on the part of the appellant. The proceedings begin with an order of suspension which, by itself, indicates that it was not as a case of a probationer that the appellant's case was being considered. If it was a question of merely examining the record of the appellant with a view to taking a decision as to whether he should or should not be confirmed, it could hardly be appropriate to serve him with a charge-sheet. Not merely was a charge-sheet served, but, as I have already pointed out, the appellant was asked to show cause why disciplinary action under Rule 7 of the Bengal Subordinate Services (Discipline and Appeal) Rules should not be taken against him. The structure of the proceedings, again, was the structure of an enquiry such as prescribed by Rule 55 of the Civil Services (Classification, Control and Appeal) Rules. A charge-sheet was served, cause was directed to be shown against the charges, then an enquiry of a kind was held, at the end of the enquiry a particular penalty was tentatively decided on, then the appellant was asked to show cause why that penalty should not be imposed and ultimately it was imposed. The succession of these steps, coupled with the fact that the authorities were on their own admission proceeding under Rule 7 of the Bengal Subordinate Services (Discipline and Appeal) Rules, shows conclusively that they were holding an enquiry with a view to imposing a penalty, if the charges were proved. The matter is clinched by the letter of 14-5-1952, which an Assistant Secretary to addressed to the appellant. There it was stated that Government bad come to the conclusion provisionally that the appellant should be \"punished\" with discharge from Government service and he was asked to show cause why he should not be \"punished\" in the manner stated. After all these, it cannot possibly be contended that it was not punishment which the authorities had in view, but merely the termination of the appellant's service in accordance with the terms of his employment. ", "14. Mr. , who appeals for the respondents, was asked by me whether he could, in view of these facts, contend that the appellant had been treated merely as a probationer and whether it was not a fact that the authorities had proceeded against him for alleged misconduct with a view to punishing him therefor. He would not directly concede that the true view of the facts was the latter, but was frank enough to say that it looked as if it was so. In my view, it does not merely look that it was so, but it was in fact so. ", "15. It must, therefore, be held that the appellant was entitled to the protection of Article 311(2) of the Constitution and that, therefore, was entitled to a proper opportunity at a proper enquiry to show cause against the charges framed against him. The learned Judge has undoubtedly held that even if the appellant was entitled to the Constitutional protection, he had in substance got it, because the authorities had proceeded on nothing which he had not dealt with in his representations and because two opportunities, one to show cause against the charges and another to show cause against the proposed punishment, had in fact been given. I think that this is not a correct view of the facts. I pass over the appellant's objection that the so-called Enquiring Officer was the complainant himself, but an enquiry had to be directed to be held and the appellant had to be given proper notice thereof. All that happened after he had submitted the explanation was that he was asked by a telegram to appear before the Director of Fisheries in connection with a representation made by him. What happened subsequently I have already stated. The learned Judge has said that the appellant could not complain that he had not been given an opportunity to call witnesses, because he had never asked for such an opportunity. It appears to me that since no or Enquiring Officer had ever been appointed and the appellant had merely been asked to see the Director of Fisheries which he did at least once, it cannot fairly be said that an occasion had arisen when he could ask for an opportunity to call witnesses. There was nothing to indicate to him that what was being held by the Director of Fisheries was anything but an interview between a superior Officer and a subordinate Officer and that it was a formal enquiry at which he would be entitled to call witnesses. It is true, as the learned Judge has observed, that the appellant had not specifically asked for an opportunity to call any evidence, but I do not think that anything ever happened which could put him in mind that he was appearing at a formal enquiry and that he was to ask for an opportunity to tender evidence, if he wished to tender evidence. I am, therefore, of opinion that since no or Enquiring Officer was ever appointed and all that happened was that the appellant was summoned for interview with his superior Officer, it cannot be said that having had an opportunity to call evidence, the appellant had not claimed it and that therefore he is estopped. ", "The result, as I see it, is that the appellant being entitled to a proper enquiry and entitled to an opportunity to snow cause thereat in a proper manner was not granted such an opportunity. The order passed against him cannot, therefore, be sustained. ", "16. The next question is what order we should make. In my view the proper order to make will be not merely to quash the order passed against the appellant, but also to give further directions. Certain charges were framed, the appellant submitted his explanation and the position is that thereafter the matter did not proceed according to law and that all that happened subsequently must be quashed as having been illegal. This, however, will not affect such portion of the proceedings as was legal which will remain valid to be proceeded with and concluded if desired. ", "17. For the reasons given above, this appeal is allowed, the order of the learned Judge dated 29-5-1956, is set aside and the order of discharge dated 28-3-1953, passed against the appellant by the State Government is quashed. We direct further that if Government be so minded, they will be at liberty to continue the proceedings in accordance with law from the stage at which the appellant had furnished his explanation of the charges framed against him but no enquiry had yet been held and pass such orders as may be lawful and proper according to the result of such proceedings. ", "*(As regards the order of suspension passed against the appellant, the order of his discharge being now quashed, it will be governed, so far at least the period subsequent to the date of the order of discharge is concerned, by the principles laid down by in the case of )). ", "18. The appellant will have the costs of this appeal from respondent No. 3, the State of West Bengal hearing fee five gold mohurs. ", ", J. ", "19. I agree."], "relevant_candidates": ["0172560102"]} {"id": "0000527480", "text": ["CASE NO.: Appeal (civil) 1081 of 2008 PETITIONER: & Anr. RESPONDENT: State of Rajasthan & Ors. DATE OF JUDGMENT: 07/02/2008 BENCH: ASHOK BHAN & DALVEER BHANDARI JUDGMENT: ", "J U D G M E N T [Arising out of S.L.P.(C)No.16910 of 2006] ASHOK BHAN, J. ", "1. Leave granted. ", "2. Challenge in the present appeal is to the order passed on 04th September 2006 in D.B. Special Appeal (W) No.134 of 2006 by of dismissing the appeal filed by the appellants whereby has upheld the judgment and order passed by a learned Single Judge of the same dismissing the writ petition filed by the appellants thereby upholding the acquisition proceedings in respect of the land of the appellants. ", "3. In order to appreciate the grievance of the appellants, facts leading to the filing of the appeal are necessary to be indicated. ", "4. Notice under Section 52(2) [which is equivalent to Section 4 of the Land Acquisition Act, 1894] of the Rajasthan Urban Improvement Act 1959 (for short, 'the Act') was issued on S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 2 - ", "25th June 1975 for acquiring the land of the appellants bearing Khasra No.383 measuring 14 bighas and 16 biswas situated at Madrampura, Jaipur, Rajasthan. As per the said notice, land was sought to be acquired for improvement and purposes of Jaipur Town \u0016 extension of Civil Lines Area for construction of buildings. On 23rd August 1975, another notice was issued by the under Section 52(2) of the Act indicating the purpose of acquisition of land for extension of civil lines and planning of housing scheme. Appellants, on 08th September 1975, filed objections to the acquisition of their land. The appellants also submitted their representation from time to time. The Land Acquisition Officer, however, rejected the objections. On 08th February 1984, the Government issued declaration under Section 52(1) of the Act [which is equivalent to Section 6 of the Land Acquisition Act, 1894]. Pursuant to the said declaration, notice under Section 52(5) of the Act was issued asking the appellants to hand over possession of the land. ", "5. After these notices were issued, the appellants filed Writ Petition No.5972 of 1984 before . A learned Single Judge of , while issuing rule nisi, granted stay of the acquisition proceedings and restrained the respondents from taking possession of the land. Aggrieved against the said order the respondents filed Special Leave Petition before this Court, inter alia, S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 3 - ", "challenging the jurisdiction of to entertain the writ petition. Since the Special Leave Petition was filed against an interim order, this Court did not go into the merits of the case and while granting leave, by order dated 08th April 1985, set aside the order of and held that did not have the territorial jurisdiction to entertain the writ petition in respect of a land situated in the State of Rajasthan. Thus, the proceedings before came to an end. ", "6. On 17.02.1987, possession of the land in question is alleged to have been taken by the respondents and the same was handed over to . However, according to the the appellants, possession was not taken. ", "7. The appellants filed Writ Petition No.1507 of 1987 in which was withdrawn by them on 10th March 1989 with liberty to file a fresh writ petition. ", "8. On 26th June 1989, the Land Acquisition Officer passed the award and forwarded the same for approval to . According to the respondents, accorded its approval on 29th July 1989 which was declared by the Land Acquisition Officer on 30th July 1989 in accordance with law. ", "9. In the meantime, the appellants filed S.B.Civil Writ Petition No.2911 of 1989 seeking quashing of Notification dated 08th February 1984 and also notice dated 17th/18th February 2007 S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 4 - ", "by which the possession is alleged to have been taken. One of the objections taken by the respondents before was that the writ petition could not be entertained after taking over of the possession of the land and handing over the same to and the award having been passed in respect of the said land in accordance with law. It was also alleged that the award was not the subject-matter of the writ petition. It was also pointed out that the appellants were simultaneously pursuing Reference Application for enhancement of compensation. Ultimately, a learned Single Judge of of Rajasthan, accepting the submissions of the respondents, dismissed the writ petition holding that the there was a genuine public purpose behind initiating the acquisition proceedings. ", "10. Being aggrieved, the appellants carried the matter in appeal before of . , agreeing with the view taken by the learned Single Judge, dismissed the appeal and held that since the appellants had filed an application under Section 18 of the Land Acquisition Act, 1894 for enhancement of the compensation they are not entitled to the relief sought for in the writ petition. The said order is under challenge before us. ", "11. A preliminary objection has been taken by the respondents to the effect that the appeal is liable to be S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 5 - ", "dismissed on the ground of the delay on the part of the appellants to challenge the acquisition proceedings. It is also submitted that the acquisition of the land cannot be challenged after taking over of the possession and after the award having become final. In support of this submission, the respondents have relied upon a number of judgments of this . ", "12. Counsel for the appellants, however, strenuously contended that there was no delay on the part of the appellants in filing the writ petition challenging the acquisition proceedings. He submitted that soon after the notice under Section 52(5) was issued by by the respondents, the appellants filed writ petition before which stood dismissed pursuant to an order of this Court, as noted above. Thereafter the appellants filed another writ petition before which was withdrawn. Within a period of four months thereof, i.e., on 05th July 1989, another writ petition bearing No.2911 of 1989 was filed. Counsel also submitted that these acts of the appellants demonstrate that there was no delay on the part of the appellants to seek redressal of their grievance. It was contended that actual possession of the land was never taken by the respondents on 17th/18th February 1987. ", "13. We do not find any substance in the submissions of the counsel for the appellants. No doubt, the appellants had filed S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 6 - ", "a writ petition before challenging the acquisition proceedings, but the said writ petition was dismissed by this Court on 08th April 1985 holding that did not have the territorial jurisdiction to entertain the writ petition. Thereafter, till 1987 the appellants did not challenge the acquisition proceedings and the writ petition was filed by it before which had the territorial jurisdiction in the matter and the same was withdrawn which was again filed within the next four months thereof, meaning thereby, during the interregnum the appellants slept over the matter. However, the appellants have not been able to give any explanation for the same. Insofar as the contention regarding the possession having not been taken is concerned, the respondents submit that the possession of the land in dispute has already been taken. Be that as it may, the award in respect of the land having become final, is vested with the powers to take possession of the land concerned and, therefore, there is no reason to disbelieve the claim of that the possession had been taken before the filing of the writ petition. Moreover, the appellants sought enhancement of compensation by filing reference application under Section 18 of the Land Acquisition Act, 1894. Simultaneously, the appellants filed writ petition before after passing of the award. ", "S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 7 - ", "This Court has repeatedly held that a writ petition challenging the notification for acquisition of land, if filed after the possession having been taken, is not maintainable. In the case of . where , J. speaking for a Bench consisting of His Lordship and , J. held : ", "\"It is thus well-settled law that when there is inordinate delay in filing the writ petition and when all steps taken in the acquisition proceedings have become final, the Court should be loath to quash the notifications. has, no doubt, discretionary powers under Article 226 of the Constitution to quash the notification under Section 4(1) and declaration under Section 6 . But it should be exercised taking all relevant factors into pragmatic consideration. When the award was passed and possession was taken, the Court should not have exercised its power to quash the award which is a material factor to be taken into consideration before exercising the power under Article 226. The fact that no third party rights were created in the case is hardly a ground for interference. of was not right in interfering with the discretion exercised by the learned Single Judge dismissing the writ petition on the ground of laches.\" ", "14. In the concurring judgment, J. held as under : ", "\"..... Such a belated writ petition, therefore, was rightly rejected by the learned Single Judge on the ground of gross delay and laches. The respondent-writ petitioners can be said to have waived their objections to the acquisition on the ground of extinction of S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 8 - ", "public purpose by their own inaction, lethargy and indolent conduct. of had taken the view that because of their inaction no vested rights of third parties are created. That finding is obviously incorrect for the simple reason that because of the indolent conduct of the writ petitioners land got acquired, award was passed, compensation was handed over to various claimants including the landlord. Reference applications came to be filed for larger compensation by claimants including writ petitioners themselves. The acquired land got vested in and free from all encumbrances as enjoined by Section 16 of the Land Acquisition Act. Thus right to get more compensation got vested in diverse claimants by passing of the award, as well as vested right was created in favour of by virtue of the vesting of the land in for being handed over to the . All these events could not be wished away by observing that no third party rights were created by them. The writ petition came to be filed after all these events had taken place. Such a writ petition was clearly stillborn due to gross delay and laches. ....\" ", "15. Similarly, in the case of . following the decision of this Court in the case of (supra) it was held : ", "\".... When the award was passed and possession was taken, the Court should not have exercised its power to quash the award which is a material factor to be taken into consideration before exercising the power under Article 226. The fact that no third party rights were created in the case, is hardly a ground for interference. of was not right in interfering with the discretion exercised by the learned Single Judge dismissing the writ petition on the ground of laches. ....\" ", "S.L.P.(C)No.16910 of 2006 ..... (contd.) ", "- 9 - ", "16. To the similar effect is the judgment of this Court in the case of . this Court, following the decision of this Court in the case of . held : ", "\"In any event, after the award is passed no writ petition can be filed challenging the acquisition notice or against any proceeding thereunder. This has been the consistent view taken by this Court and in one of the recent cases ( .) ....\" ", "17. In the present case also, the writ petition having been filed after taking over the possession and the award having become final, the same deserves to be dismissed on the ground of delay and laches. Accordingly, the order of the learned Single Judge and that of are affirmed to the extent of dismissal of the writ petition and the special appeal without going into the merits thereof. This appeal also deserves to be dismissed without going into the merits of the case and is dismissed as such. No costs."], "relevant_candidates": ["0000081544", "0000688536", "0001381780", "0035018544"]} {"id": "0000535796", "text": ["PETITIONER: HARBANS SINGH AND ANOTHER Vs. RESPONDENT: STATE OF PUNJAB DATE OF JUDGMENT: 16/10/1961 BENCH: , K.C. DAS BENCH: , K.C. DAS GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N. CITATION: 1962 AIR 439 1962 SCR Supl. (1) 104 CITATOR INFO : RF 1963 SC 200 (17) R 1965 SC 26 (19) R 1965 SC 257 (8) R 1970 SC1566 (5) F 1972 SC 622 (27,31) R 1973 SC 55 (19) R 1973 SC1204 (9) R 1973 SC2195 (8) F 1973 SC2622 (7) R 1974 SC 606 (8,9) R 1976 SC1994 (6) R 1985 SC 416 (13) ACT: Appeal against acquittal -interference by appellate court, when permissible-Dying declaration Corroboration, if necessary. HEADNOTE: set aside order of acquittal of the appellants and convicted them on a charge of murder under s. 302 of the Indian Penal Code. On appeal by the appellants by special leave ^ Held, that this in its earlier decisions emphasised that interference with an order of acquittal should be based only on \"complying and substantial reasons\" and held that unless such reasons were present an Appeal should not interface with an order of acquittal, but this did not try to curtail the powers of the appe11ate court under s. 423 of the Code of Criminal Procedure. Though in its more recent pronouncements this laid less emphasis on 105 \"compelling reasons\" the principle has remained the same. That principle is that in deciding appeals against acquittal the of Appeal must examine the evidence with particular care and must also examine the reasons on which the order of acquittal was based and should interfere with the order only when satisfied that the view taken by the acquitting judge was clearly unreasonable. Once the came to the conclusion that the view of the lower court was unreasonable that itself was a \"compelling reason\" for interference. Once it was found that the High applied the correct principles in setting aside the order of acquittal this will not ordinarily interfere with the High 's order of conviction in appeal against acquittal o enter into the evidence to ascertain whether the High was right in its view of the evidence. Only such examination of the evidence would ordinarily be necessary as is needed to see that the High approached the question properly and applied the principle correctly. If the judgment of the High did not disclose a careful examination of the evidence in coming to the conclusion that the view of the acquitting court was unreasonable or if it appeared that the High erred on questions of law or misread the evidence or the judgment of the trial court, this would, unless the case was sent back to the High for re-hearing, appraise the evidence for itself to examine the reasons on which the lower court based its order of acquittal and then decide whether the High s view that the conditions of the lower court was unreasonable, was correct. If on such examination it appeared to the that the view of the acquitting court was unreasonable the acquittal would be set aside and if on the other had it appeared that the view was not unreasonable the order of acquittal would be restored. v. State, S.C.R. 194, S.C.R. 418, A.I.R. 1953 S.C. 459, v. State of M. P., Cr. A. No. 178 of 59 and v. State of Bombay, Cr. A. No. 38 of 1960, referred to. It was neither a rule of law nor of prudence that a dying declaration should be corroborated by other evidence before a conviction could be ba ed thereon. v. state of M. P. A.l.R. 1953 S.C. 420, referred to. v. State of Bombay, [l958] S.C.R. 552, followed. A dying declaration did not become less credible if a number of persons were names are culprits 106 . v. Emperor,(1941) 43 Cr.L.J.59, held erroneous. JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 115 of 1959. ", "Appeal by special leave from the judgment and order dated May 23, 1958, of in Criminal Appeal No. 414 of 1957. ", " , and , for the appellant. ", " and , for the respondent. ", "1961. October 16. The Judgment of the Court was delivered by , J.-Six persons including the present appellants were tried by the Additional Sessions Judge Ferozpur on several charges in connection with the death by homicidal injuries of two brothers and . Of these six, was the father of the other five accused persons. All the six accused persons were acquitted by the Additional Sessions Judge; on appeal by the State, set aside the orders of acquittal in respect of and Major and convicted them under section 302 of the Indian Penal Code. The appeal was dissmissed in respect of the other four, viz., , , Bant and Gian . It is against this order of conviction that and Major have filed the present appeal after obtaining special leave from this Court. ", "The prosecution case is that at about 8 or 9 P.M. on July 23, 1956, shortly after had returned home and complained to his father about the conduct of and in abusing him. ran out of his house on hearing some cries; but when he reached the Dharamshala not far from his house these two appellants, along with their father and their brothers , and fell upon him and caused numerous injuries with the weapons which they carried. , it is said, struck on the abdomen with a Sela in his hand. 's brother and his father also had followed when he ran out of the house. On seeing this attack on , tried to intervene, but he too was attacked and received several injuries. , it is said, gave him a Sela thrust in the abdomen. died on the spot; was brought to the hospital at Gidderbha the following morning and received some treatment but he also died of his injuries the following day, that is, the 24th July. ", "All the accused pleaded not guilty, the defence being that they had been falsely implicated out of enmity. ", "To prove its Base the prosecution relied on the evidence of two persons, the deceased's father and their uncle and the dying declaration alleged to have been made by , once in the village before , the Sub-Inspector of Police who had come to the village that night in connection with some other investigation and for the second time at Gidderbha hospital before a Magistrate. ", "On a consideration of the evidence the Trial Judge came to the conclusion that the prosecution case had not been proved against any of the accused person. Being of opinion that the First Information Report had been recorded as late as 4- 30 P.M. On the 24th July he thought that \"the complainant party was not able to day who the assailants were and the police was making time to find out the culprits after investigation and the First Information Report was delayed on that account.\" He was doubtful also about the truth of the Sub-Inspector's story that he actually reached the village of occurrence on that very night and consequently doubtful about any statement having been made by to him on that night. In any case, he thought 's dying declaration had little probative value because as many as six persons had been named and that it could not be relied upon without corroboration. The learned Judge was also not satisfied that (Prosecution Witness) \"was present in the village or at his house at the time of the occurrence\" since \"his statement was not recorded in the Inquest Report prepared by the police at midnight\". The learned Judge also thought it unsatisfactory that nobody other than these two near relatives, that is, the father and uncle of the deceased persons had been examined as witnesses of the occurrence. These were the main reasons for which he came to the conclusion that the case had not been proved against any of the accused beyond reasonable doubt and accordingly acquitted the accused was of opinion that the learned Judge was wholly \"wrong in holding that was not mentioned in the Inquest Report\"; that he had misread the time of the first Information Report as 4-30 P. M. for 4-30 A. M. and that he was again in error in concluding that \"the statement made by to the police on their arrival at 1-15 A.M. was inadmissible\". After pointing out these \"errors\" in the reasoning of the learned Trial Judge said:- ", "\"We have no hesitation in concluding that for the said reasons the judgment of the learned Additional Sessions Judge is wholly erroneous resulting in complete miscarriage of justice. ", "After having gone through the testimony of both of the eye-witnesses and examining the other material, particularly the two dying declarations, we are of the view that the projection case was substantially true and have been proved. ", "As regards complicity of and Major , there appears to be no doubt. Both of them had been assigned participation and were responsible for the fatal blow on each of the deceased. In this respect the testimony of both of the witnesses and the dying declarations are consistent. They were accordingly held guilty under section 302 , Indian Penal code.\" ", "The main contention raised by Mr. on behalf of the appellants is that had no sufficient reasons for interfering with the order of acquittal made by the Additional Sessions Judge and that itself had been guilty of \"errors\", especially as has misread the judgment of the learned Additional Sessions Judge and had attributed to him statements which are not to be found in his judgment. ", "The question as regards the correct principles to be applied by a hearing an appeal against acquittal of a person has engaged the attention of this from the very beginning. In many cases, especially the earlier ones, the has in laying down such principles emphasised the necessity of interference with an order of acquittal being based only on \"compelling and substantial reasons\" and has expressed the view that unless such reasons are present an Appeal court should not interfere with an order of acquittal. (Vide v. The State (1); (2); (3). The use of the words \"compelling reasons\" embarrassed some of the High s in exercising their jurisdiction in appeals against acquittals and difficulties occasionally arose as to what this had meant by the (1) S. C. R. 194. (2) S. C. R. ", "418. ", "3)A.l.R. (1953) S. C. 459. ", "110 ", "words \"compelling reasons\". In later years the has often avoided emphasis on \"compelling reasons\" but nonetheless adhered to the view expressed earlier that before interfering in appeal with an order of acquittal a must examine not only questions of law and fact in all their aspects but must also closely and carefully examine the reasons which impelled the lower courts to acquit the accused and should interfere only if satisfied after such examination that the conclusion reached by the lower court that the guilt of the person has not been proved is unreasonable. ( v. The State of Madhya Pradesh (1); v. The State of Bombay (2), It is clear that in emphasising in many cases the necessity of \"compelling reasons\" to justify an interference with an order of acquittal the did not in any way try to curtail the power bestowed on appellate courts under s 423 of the Code of Criminal Procedure when hearing appeals against acquittal; but conscious of the intense dislike in our jurisprudence of the conviction of innocent persons and of the facts that in many systems of jurisprudence the law does not provide at all for any appeal against an order of acquittal the was anxious to impress can the appellate courts the importance of bestowing special care in the sifting of evidence in appeal against acquittals. As has already been pointed out less emphasis is being given in the more recent pronouncements of this on \"compelling reasons\". But, on close analysis, it iq clear that the principles laid down by the court ill this matter have remained the same. What may be called the golden thread running through all these decisions is the rule that in deciding appeals against acquittal the of Appeal must examine (1) Criminal Appeal No. 178 of 1959 decided on l8-11-60. ", "(2) Criminal Appeal No. 38 of 1960 decided on 14-12-60. ", "111 ", "the evidence with particular care, must examine also the reasons on which the order of acquittal was based and should interfere with the order only when satisfied that the view taken by the acquitting Judge is clearly unreasonable. Once the appellate court comes to the conclusion that the view taken by the lower court is clearly an unreasonable one that itself is a \"compelling reason\" for interference. For, it is a court's duty to convict a guilty person when the guilt is established beyond reasonable doubt, no less than it is its duty to acquit the accused when such guilt is not so established. ", "When judgment shows clearly that the matter has been approached in the proper manner and the correct principles have been applied, there is very little scope for this to interfere with an order made by convicting an accused person in an appeal against acquittal. Once it is found that the principles laid down by this have been correctly applied this will not ordinarily embark upon a reappraisal of the evidence to ascertain whether was right in its view of the evidence. The only examination of the evidence that this may find itself called upon to undertake will ordinarily be just so much as is necessary to see whether has approached the question properly and applied the principles correctly. ", "The position may however be different if the judgment of while indicating its conclusion that in its opinion the view taken by the lower court is unreasonable does not disclose a careful examination of the evidence for coming to such conclusion. Or it may appear from 's judgment that has erred on questions of law or has obviously misread the evidence on the record or the judgment of . What is this to do in such cases ? We are unable to agree with Mr. that the only proper course for this court to take is to set aside the order made by and restore the order of acquittal. For, even where 's judgment suffers from any of these defects it may very well be that 's conclusion that the view of the lower court is unreasonable is correct. So, unless this thinks fit to send the case back to for re-hearing of the appeal and its disposal in accordance with law, it becomes the duty of this in cases like these which fortunately are likely to be few in number-to appraise the evidence for itself, to examine the reasons on which the lower court based the order of acquittal and then decide whether 's conclusion that the view taken by the lower on the question of the guilt of the accused is clearly unreasonable, is correct. If satisfied that the view was clearly unreasonable, this is bound to dismiss the appeal and to maintain the order of conviction made by ; if on the contrary, this is not satisfied on such examination that the conclusion reached by the lower court that the guilt of the accused has not been proved was clearly unreasonable, the order of acquittal would be restored. ", "The judjment of in the present case does not contain much discussion of the evidence in the case. All the discussion of the eviddnce is confined to the few sentences which we have quoted earlier in this judgment. We also notice that the learned judges of were under some misapprehension in thinking that the Additional Sessions Judge had held that was not mentioned as a witness in the Inquest Report. What the Additional Sessions Judge had pointed out was that 's statement had not been recorded in the Inquest Report. The Additional Sessions Judge was certainly right in this. While might have well thought that no doubt against the credibility of should be based on this fact that his statement was not recorded, was not justified in attributing to the Trial Judge something which he did not say. ", "It is also not quite clear how the learned Judge said about the appellant Major that he had been assigned participation and was responsible for the fatal blow on each of the deceased. In fact, neither of the two who claim to be the eye-witnesses of the occurrence has said that Major dealt a fatal blow on either Hazura or Munshi . While it is true that a general statement is made by both the witnesses as regards all the six accused having attacked both Munshi and Hazura neither of them has spoken of any particular injury having been caused by Major . Hazura himself in his dying declaration did say that Major gave him a Sela blow on his left wrist but does not speak of any other injury having been caused by Major either to him or to Munshi except that he also said generally that all the accused gave blows on the person of Munshi . has therefore clearly misdirected itself in thinking that Major was responsible for any of the fatal injuries. ", "In view of all this we consider it necessary to examine the judgment of and also the evidence on record ourselves for a proper decision of this appeal. ", "Turning to the judgment of we find that the main circumstance which weighed with him for doubting the truth of the prosecution story is what he considered the considerable delay in recording the First Information Report. From the printed record before us we find that Head Constable, who actually entered the formal First Information Report, stated in his evidence that he made the entry at \"4.30 P.M.\" on the 24th July 1956. It is apparently this fact taken with the fact that the report did not reach the Magistrate before 8.45 P.M. on the 24th July that made the learned Judge think that the First Information was made at the Police Station at 4.30 P.M. He has unfortunately not noticed that the record of the First Information Report Ex. PP1 shows the time of record as 4.30 A.M. He also overlooked 's own evidence in cross-examination in these words: \"I have perused the entries and find that this special report was despatched by me through Foot Constable at 5.15 A.M. I cannot say why he did not deliver it to the Magistrate till 8.45 P.M.\" It is quite clear that 5.15 A.M. as recorded in the printed record in cross- examination is not a mistake for 5.15 P.M. If that had been so there would have been no point in his saying that he could not say why the Constable did not deliver it to the Magistrate till 8.45 P.M. when this statement in cross-examination is considered along with the recording of the time in Ex. PP1 itself there is no escape from the conclusion that 4.30 P.M. as stated in Examination-in-Chief was a slip of tongue and the correct time of the record was 4.30 A.M. and that the fact that it reached the Magistrate at 8.45 P.M. that day may well be due to the fact that the Constable was negligent and took his own time about going to the Magistrate or to some other reason not clear from the record. The reasoning of the Trial Judge based on his wrong view about the time of recording of the formal First Information Report that the complainant party was not able to say who the assailants were and so delay was made, therefore falls to the ground. ", "The learned Judge has also misdirected himself in thinking that the dying declaration had very little probative value because as many as six accused persons had been named and that no conviction could in law be based on such dying declaration without corroboration. The law does not make any distinction between a dying declaration in which one person is named and a dying declaration in which several persons are named as culprits. A dying declaration implicating one person may well be false while a dying declaration implicating several persons may be true. Just as when a number of persons are mentioned as culprits by a person claiming to be an eye-witness in his evidence in court the court has to take care in deciding whether he has lied or made a mistake about any of them, so also when a number of persons appear to have been mentioned as culprits in a dying declaration that court has to scrutinise the evidence in respect of each of the accused. But it is wrong to think that a dying declaration becomes less credible if a number of persons are named as culprits. The contrary view taken in in v. Emperor (1) on which apparently the Trial Judge has relied is clearly erroneous. ", "The learned Judge appears to have relied also on what was said by this in (2) on the need of corroboration for a dying declaration. Speaking for the (as he then was) observed in that case:- ", "\"It is settled law that it is not safe to convict an accused person merely on the evidence furnished by a dying declaration without further corroboration because such a statement is not made on oath and is not subject to cross-examination and because the maker of it might be mentally and physically in a state of confusion and might well be drawing upon his imagination while he was making the declaration.\" ", "The question was however considered again by this in (3). After pointing out that in Case (Supra) the after a careful examination of the facts of that case distinctly came to the conclusion that the dying declaration was not true and could not be relied upon this stated in the later case that the observations of the in case were in the nature of obiter dicta. The then proceeded to review the relevant provisions of the Evidence Act and of the decided cases in the different High s in India and in this and stated the law in these words:- ", "\"that it cannot be laid down as an absolute rule of law that a dying declaration cannot form the sole basis of conviction unless it is corroborated; (2) that each case must be determined on its own facts keeping in view the circumstances in which the dying declaration was made; (3) that it cannot be laid down as a general position that a dying declaration is a weaker kind of evidence than other pieces of evidence; (4) that a dying declaration stands on the same footing as anotherpiece of evidence and has to be judged in the light of surrounding circumstances and with reference to the principles governing the weighing of evidence; (5) that a dying declaration which has been recorded by a competent magistrate in the proper manner, that is to say, in the form of questions and answers, and, as far as practicable, in the words of the maker of the declaration, stands on a much higher footing than a dying declaration which depends upon oral testimony which may suffer from all the infirmities of human memory and human character, and (6) that in order to test the reliability of a dying declaration, the has to keep in view the circumstances like the opportunity of the dying man for observation, for example, whether there was sufficient light if the crime was committed at night; whether the capacity of the man to remember the facts stated had not been impaired at the time he was making the statement by circumstances beyond his control that the statement has been consistent throughout if he had several opportunities of making a dying declaration apart from the official record of it; and that the statement had been made at the earliest opportunity and was not the result of tutoring by interested parties. \"Hence, in order to pass the test of reliability a dying declaration has to be subjected to a very close scrutiny, keeping in view the fact that the statement has been made in the absence of the accused who had no opportunity of testing the veracity of the statement by cross-examination. But once the court has come to the conclusion that the dying declaration was the truthful version as to the circumstances of the death and the assailants of the victim, there is no question of further corroboration. If, on the other hand, the , after examining the dying declaration in all its aspects and testing its veracity, has come to the conclusion that it is not reliable by itself, and that it suffers from an infirmity, then, without corroboration it cannot form the basis of a conviction. Thus, the necessity for corroboration arises not from any inherent weakness of a dying declaration as a piece of evidence, as held in some of the reported cases, but from the fact that the court, in a given case has come to the conclusion that that particular dying declaration was not free from the infirmities referred to above or from other infirmities as may be disclosed in evidence in that case.\" ", "In view of this latest pronouncement of this -which it should be stated in fairness to the Trial Judge was made long after he gave his judgment-it must be held that it is neither a rule of law nor of prudence that a dying declaration requires to be corroborated by other evidence before a conviction can be based thereon. The evidence furnished by the dying declaration must be considered by the Judge, just as the evidence of any witness, though undoubtedly some special considerations arise in the assessment of dying declarations which do not arise in the case of assessing the value of a statement made in by a person claiming to be witness of the occurrence. In the first place, the has to make sure as to what the statement of the dead man actually was. This itself is often a difficult task, specially where the statement had not been put into writing. In the second place, the court has to be certain about the identity of the persons named in the dying declaration-a difficulty which does not arise where a person gives his depositions is and identifies the person who is present in court as the person whom he has named. Other special considerations which arise in assessing the value of dying declarations have been mentioned by this in (1) and need not be repeated here. ", "In view of this latest pronouncement of this on the question of need of corroboration of a dying declaration by other evidence, it must be held that the Trial Judge was wrong in thinking that he could not act on the dying declaration of unless it was corroborated by other evidence. ", "In view of the several defects in the reasoning of the Trial Judge, it is necessary for us to examine the evidence on the record to see whether was right in thinking that the view taken by the learned Judge was clearly unreasonable. The most important evidence in the case is furnished by the dying declaration made by . The Investigating Officer, has said that on July 22, 1956 he had gone to the village Rikala on an excise raid and from there he went to Mallan at about 2 P.M. on July 23, to investigate a case under section 392 of the Indian Penal Code. His further evidence is that it was on the same night at about midnight that he started for Dhurkot from Mallan. We see no reason to doubt the truth of his statement that he did reach Dhurkot shortly after midnight of the 23rd July and that when on hearing that a murder had taken place near the Dharamshala he came to the Dharamshala. who was lying injured on a cot there made a statement to him, he recorded the statement correctly. That statement has been marked Ex. PP. The substance of this statement is that at about 9 P.M. on the night of the occurrence his brother came and complained about the conduct of , and other sons of and that shortly after this on hearing shouts of and others near the Lharamshala, went towards that place followed by and his father and that when they reached the place they found and the other accused persons all armed with weapons raising uproar and when reached the place and returned the abuse gave the first blow to with a Sela in his hand hitting him on the front of the chest after which others of the party also gave blows and when stepped forward to rescue his brother, gave him a blow with a Sela in his hand which hit him on the abdomen and the other accused also gave him blows. The blow given by Major hit him on his left wrist. ", "It is clear that this statement was made by shortly after midnight i.e., within about four hours after the occurrence. It has to be remembered that had one single serious injury viz., the penetrating wound on his abdomen. We are satisfied from the evidence of the witnesses that there was sufficient moonlight that to enable to recognize clearly the assailant who struck the blow which caused this injury. He could have therefore made no mistake about the indentity of his assailant. Nor is it likely that he would within a few hours of the occurrence ascribe this fatal blow on him to somebody other than the real assailant. The several injuries on and the numerous injuries on justify the conclusion that there was more than one assailant in the attacking party. Whether or not could have made a mistake about the identity of the other assailants or could have implicated some of them at least falsely, it will be unreasonable to think that he would substitute another person for the one assailant who gave him the fatal blow. On a consideration of these circumstances we are therefore satisfied that it would be unreasonable to doubt or disbelieve the truth of 's statement when he said that struck him with the Sela in his hand which hit him on the abdomen. Even if there was no other evidence on the records as regards the part taken by the appellant this dying declaration of is so clearly true that the only reasonable view for a judge of facts to take is that caused the death of by striking him with a Sela. ", "As has already been noticed in this statement mentioned as the person who gave the first blow to , the blow which caused one of the injuries on his chest. We can think of no reason why this main part should be ascribed falsely to ; we think, considering the circumstances in which the statement was made, that this part of 's statement is also clearly the truth and could reasonably be accepted even without any corroboration. ", "A second statement of was recorded at the Hospital where he was removed. This statement appears to have been recorded at about midnight of the 24th July. In this statement also he mentioned and the other accused persons as having taken part in the attack. It appears that when this statement was made 's condition was very bad. Indeed, after he had made a part of the statement the Magistrate recorded that he had started giving indifferent answers and asked the Doctor to give him the necessary treatment. After the treatment was given the statement was concluded. We would not attach much weight to this statement on the 24th July. But, it will be noticed that there is nothing in this latter statement which detracts from the truth of the earlier statement made shortly after the occurrence to the police sub- Inspector. ", "There is apart from this the testimony in Court of the father of the two deceased persons and his uncle . As regards the learned Trial Judge has pointed out that 's statement was not recorded by the sub-Inspector in the Inquest Report. While there is nothing in law which requires the statement of witnesses to be recorded in the Inquest Report, it appears to be a common practice in Punjab for police officers to record statements of witnesses in Inquest Reports. In the present case the Sub- Inspector appears to have recorded a fairly full statement of as also short statements of , and in the Inquest Report itself. It is somewhat curious therefore that the Sub-Inspector did not record the statement of also in this report even though it is found that was named as a witness of the occurrence in dying declaration itself. It is also difficult to understand 's statement that he left the place as soon as some neighbours came up after the occurrence and did not go back to the spot till he was called by the police. He has offered no explanation for this rather unusual conduct. In view of all this, we are not prepared to say that tho Trial Judge acted unreasonably in doubting his testimony. ", "We are unable however to discover any valid reason for doubting the presence of at the place of occurrence. It seems to us that the main reason for the Trial Judge to doubt the truth of 's evidence was what he considered the great delay in lodging the formal First Information Report. That reason, as we have already pointed out, does not exist. ", "On an examination, it seems to us quite likely that also accompanied when the latter followed towards the Dharmashala and it also seems to us improbable that he would give the main part in the assault falsely to if somebody else was responsible for the blow which caused 's death. In our view the learned Trial Judge acted unreasonably in doubting the truth of 's evidence against . ", "On a consideration of the evidence we are therefore satisfied that the conclusion reached by that the view taken by as regards guilt Was clearly unreasonable is correct and that the only reasonable view on the evidence can be that committed murder by causing the death of and also committed murder by causing the death of . ", "The position is however different as regards Major . As has already been pointed out is wrong in thinking that the evidence Shows that Major gave any of the fatal blows. Hazura in his first dying declaration mentioned Major as having given a below on him on his left wrist. Apart from Bhag only Hira has ascribed any specific part to Major in addition to saying generally that he took part in the attack. The evidence therefore leaves scope for thinking that Hazura has made a mistake about Major or has wrongly implicated him. We are not therefore prepared to say that the view taken by the Trial Judge as regards Major is clearly unreasonable. ", "123 ", "We therefore allow the appeal of Major set aside the order of conviction and sentence made against him by and restore the order of acquittal made by . The appeal of Harbans is dismissed. Major should be set at liberty at once. ", "Appeal of appellant 2 allowed. ", "Appeal of appellant 1 dismissed. ", "----"], "relevant_candidates": ["0000198357", "0000991170", "0001285886", "0001428689"]} {"id": "0000537129", "text": ["JUDGMENT , J. ", "(1) This is an appeal from an order granting temporary injunction in a suit pending before a learned Single Judge on the original side of this Court. ", "(2) The facts have been fully stated in the order under appeal and may therefore be only briefly re-stated. ", "(3) The appellants are defendants in a suit filed on the original side of this by the plaintiff-respondent which is a foreign company having its registered office in Karachi (West Pakistan.). The company is the registered proprietor of a trade mark \"Tibet Snow\" which was registered in India under No. 14567 in class 3 as of 16-4-1943. The trade mark was renewed and its registration, subject to cancellation in the meanwhile, would be valid till 16-4-1972. ", "(4) The defendants-appellants are carrying on business as manufacturers of cosmetics, including face cream, in the name and style of and , Delhi. The face cream manufactured by them is being marketed and sold under the mark \"Tibet Snow\". ", "(5) It is not disputed that the appellants had applied for registration of a trade mark with the words \"Tibet Snow\"; but their application was dismissed in the year 1968 on the ground that the said trade mark was already registered in the name of the respondent. The appellants thereupon filed an application under Section 56 of the Trade and Merchandise Marks Act . 1958 (hereafter referred to as the Act) for rectification of the Register of trade marks by removal of respondent's mark No. 14567 there from. The application was however dismissed by on 21-11-1968. ", "(6) While the appellants' application for rectification of the Registrar was still pending, the respondent-company instituted in this on 23-9-1968, a suit wherein it prayed for a decree inter alia, for perpetual injunction restraining the appellants, by themselves or through any other persons on their behalf, from using the trade mark \"Tibet Snow\" or any other mark in respect of face cream which may be an infringement of its trade mark. The plaint was accompanied by an application for grant of a temporary injunction to the same effect till the decision of the suit. On that application an ad-interim order requiring the appellants to maintain accounts of the sale of face cream manufactured and traded by them under the mark \"Tibet Snow\" was passed. The appellants were also directed to file quarterly statements of account in . Meanwhile a notice of the application for temporary injunction was also issued to the appellants, (7) The appellants entered appearance and by two separate applications asked for stay of proceedings in the suit till the final disposal of their application for rectification of the and for security for their costs in defending the suit being furnished by the respondent. ", "(8) The learned Judge trying the suit, allowed the application for stay of proceedings in the suit. He also held that the appellants were entitled to an order regarding security for costs being made in their favor, but since their application for stay of the suit was being accepted by him, it was not necessary to make such an order at present and that necessary directions in that behalf, would be given if and when the proceedings in the suit were resumed. ", "(9) In this appeal we are only concerned with the order made by the learned Judge on the respondent's application for grant of temporary injunction whereby the appellants have been restrained from using any carton, packing, container or bottle bearing the words \"Tibet Snow\" or any word that might sound like \"Tibet\" while marketing and selling the face cream manufactured by them till the disposal of the suit. The appellants have also been directed to submit a statement showing particulars of the face cream in stock that had already been manufactured by them and was packed in bottles and cartons, resembling those which they had been using previously, prior to the date of the order vi:.. April 22, 1969. With regard to the face cream that had already been manufactured and packed in such bottles and cartons the appellants were permitted to sell the same but they were directed to maintain accounts regarding the sale and submit the same in by the 10th day in each quarter. They were further restrained from trading under the mark \"Tibet Snow\" or any work which mights sound like \"Tibet\" in respece of any face cream manufactured by them thereafter. ", "(10) The appellants are aggrieved by the aforesaid order and have come up in appeal against the same. ", "(11) At the hearing of the appeal, the 's jurisdiction to issue an order of injunction has not been challenged on the ground that the original suit having been stayed no such interlocutory order could be made by it. Counsel for the appellants has however endeavored to attack the order of the learned Judge holding that the respondent has a 'prima fade case which requires investigation and that the balance of convenience lies in favor of the respondent rather than the appellants. ", "(12) It is contended that the carton used by the appellants is somewhat different from that of the respondent and as such it cannot be held that the user of the mark \"Tibet Snow\" by the appellants amounts to an infringement of the respondent's trade mark. Another fact on which a great deal of stress had been laid is that there has been considerable delay on the part of the Respondent 1n instituting the suit in spite of the fact that the respondent had come to know in the year 1966 that the appellants had commenced proceedings for cancellation of their trade mark 14567 and for rectification of the . ", "(13) In support of his argument, learned counsel for the appellants has not only cited the case of versus (1957 R.P.C. 183)(') which was relied upon by the appellant before the learned Judge but he has also cited a decision of (as his lordship then was) in Firm Gaylord Shangrila and another v. . New Delhi (1962 Pir 1128). The case of has also been cited. In ) the plaintiff-company had traded as jewellers for over a century, In August 1956 the defendant using the name , opened a jewellery shop which it was alleged resembled in appearance a neighbouring shop of the plaintiff-company. The plaintiff issued a writ in December 1956 and moved for an interim injunction restraining the defendant from carrying on business except under his full name \"\". Up-Johan J. held that it was doubtful whether the similarity of the shops would deceive potential customers and as there had been un-due delay in the plaintiff's taking action no interim relief could be granted. It is apparent that there is no connection between the two cases. Firstly, the respondent's action in the present case is eased on the alleged infringement of its registered trade mark which is different from a passing off action, as was the case before Secondly, the similarity in the two marks is prima fade too obvious. The appellants are using the same mark bearing the words \"Tibet Snow\" which the respondent claims to be its registered trade mark. ", "(14) It is well settled that there is an essential difference between an action for infringement of a trade mark and an action for passing off. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of \"the exclusive right to the use of the trade mark in relation to those goods\" while an action for passing off is a common law remedy, being in substance an action for defunct, that is. a passing off by a person of his own goods as those of another. In an action for infringement where the defendant's trade mark is identical with the plaintiff's mark. the court will not enquire whether the infringement is such as is likely to deceive or cause confusion. But where the alleged infringement consists of using not the exact mark on the Register, but something similar to it, the test of infringement is the same as in an action for passing off. (See and . . ", "(15) The learned Judge has advisedly refrained from expressing any opinion about the alleged similarity between the two marks. We also do not propose to say anything that may be understood as a final expression of our opinion on that question, Prima fade however it seems to us that the respondent has a case which certainly merits examination. more particularly after the appellants' application for a trade mark having the words \"Tibet Snow\" was dismissed and their application for cancellation of the respondents' mark was also rejected by the Joint Registrar of Trade Marks. It is no doubt true, as has been contended by the learned counsel for the appellants, that their appeal against the order of the Joint Registrar of \"trade Marks is still pending before and that since the appeal is a continuation of the original cause the controversy, as to whether the respondent's trade mark should be cancelled is still un-resolved and the whole question is at large. But the very fact that the appellants have been defeated in at least two rounds, does give rise to' the belief that the respondent-company has a prime fade case and that the sale of the same class of goods under the mark \"Tibet Snow\" does constitute infringement of the respondent's trade mark. ", "(16) The case of Gay lord decided by the learned Chief Justice, also relates to a dispute regarding a trading style. The plaintiffs in that suit were carrying on business under the trading style \" Restaurant' in New Delhi. The defendant started their restaurant at Chandigarh under the trading style \" \". The plaintiffs sued turn a decree for perpetual injunction restraining the defendants from using the words \" \" or \"\" as their trading style and succeeded in obtaining a temporary injunction from the District Judge restraining the defendants till the decision of the suit from using the words \"\" or \" \". The defendants appealed against the order. The appeal was allowed and the order of temporary injunction-was substituted by an order for maintaining true and proper accounts and for furnishing security for payment to the plaintiffs of profits made by them in case the plaintiffs ultimately succeeded in the suit. There was also a further direction that the defendants shall display the word '' on the signboard, cash memo's, cartons and memo books as prominently as the word ''\" and also publish general notices in the newspapers viz., , New Delhi and the , Ambala, to the effect that the restaurant of the defendants had no connection with the restaurant of the plaintiffs. This again was not a case of infringement of a registered trade marks. The very fact that gave the aforesaid directions clearly shows that the plaintiffs had a prima facie case. The ultimate decision in the appeal, on the other hand turned on the issue as to balance of convenience and not on the question of prima focie case, for it is implicit in the judgment that the use of the word \"\" both by the plaintiffs and the defendants, did indicate that the plaintiffs had a prima facie case. ", "(17) The case of ^) is also of no assistance to the argument of the learned counsel for the appellants. although the case does relate to infringement of a trade mark. The relief of temporary injunction was refused to the appellant in that case not on the ground of absence of a prima jade case but on the ground that the respondent's business was centered in three districts of Madhya Pradesh where the appellant had practically no sales. It was the local nature of the respondent's business that was responsible for the decision. ", "(18) As regards delay, the argument of the learned counsel for the appellants lies that this aspect of the case had not been considered by the learned Judge at all and that only a passing reference has been made to it in the order under appeal. It is no doubt true that the delay in applying for an order of temporary injunction is one of the considerations which has to be kept in view, but delay by itself is not sufficient to deprive the registered proprietor of a trade mark of his rights unless it is such as to give rise to a belief that the proprietor of the trade mark has either acquiesced in the user of the mark by the opposite party or has abandoned his rights therein. The respondent no doubt came to know about the appellants' efforts to have the respondent's trade mark removed from the , but so long as there was no real danger to its rights the respondent could well ignore the threat. We also cannot shut our eyes to the fact that the respondent is a foreign company in Pakistan and there are obvious difficulties in the way of its launching on a litigation in this country. In such circustances. if there has been some delay in the respondent's coming to court, it is not such as to dis-entitle the respondent to the protection of this . ", "(19) In the ultimate analysis the question of delay is also linked with the question of balance of convenience and is one of the factors to be kept in view while deciding an application for grant of temporary injunction. The principle that governs such matters is as was held by and in , that when an interim injunction is sought during the pendency of a suit what has to be seen is first, whether a prima facie case has been made out by the plaintiff in respect of the claim, and secondly, whether the balance of convenience demands that the injunction should be issued. ", "(20) The real question that has to be considered in this appeal therefore is on which side lies the balance of convenience. Learned counsel for the appellants contends that it is incontrovertible that the face-cream bearing the respondent's trade mark and manufactured by it in Pakistan is not being imported in this country since some years past. It is also not known how long the present trade restrictions between the two countries may last. In such circumstances, the respondent cannot restrain the appellants from manufacturing and marketing their produce under that mark when there is no possibility of the respondent's own product being made available to the public in India. ", "(21) In this connection reliance is placed by the learned counsel on a recent decision of in England in v. (1968 R.P.C. 433)^). Special stress has been laid by the learned counsel on the observations of at page 495 of the report where it was said : ", "\"IT is naturally with reluctance that I differ from the view of so experienced a judge, but I cannot think that this is a proper case in which to grant the relief of an interlocutory injunction. The grant of such relief can be a very serious matter especially if it leads to the closing down of the defendants' works for an indeterminate period, with the possibility of throwing a number of people out of employment. ", "\"INthe circumstances of this case I do not see that in the absence of an interlocutory injunction, there is the slightest chance of the plaintiff suffering any irreparable injury. I see no reason why damages should not afford an adequate remedy, assuming that the plaintiff ultimately succeeds in the action. We have not been informed as to the scale on which the defendants are operating, but if in turns out that they are operating on a large scale than no doubt, if the plaintiff succeeds in the action, she will recover substantial damages. But equally on that basis there should be no doubt as to the ability of the defendants to pay them. If, on the other hand. the defendants are operating on only a small scale, than I venture to think that any injury to that plaintiff will be almost minimal.\" ", "(22) We are not impressed by this argument. Firstly, the case before related to infringement of a patent. The plaintiff in that case was the owner of two patents relating to a vehicle anti-theft device which immobilised the vehicle by locking the steei-ing wheel and the foot-paddle together by means of a hooked telescopic rod. The defendant disputed the validity of the patent on the grounds of prior publication, obviousness and lack of un-inventive merit. Although no opinion was expressed by upon the general merits of the question canvassed before them, it was said by that in his view there was a good deal to be said in support of either side's case. That apart, what appears to have weighed with the learned Judges of was that the grant of injunction in that case would have led to the closing down of the defendants' works for an un-determined period with the possibility of throwing a number of people out of employment. There was also no material before the as to the seals on which the defendants were operating. It was further said that normally an interlocutory injunction would not be granted where damages would provide adequate remedy should the claim succeed nor would the grant an interlocutory iniunction unless it was satisfied that there was a real probability of the plaii-itiff succeeding on the trial of the suit. ", "(23) In the present case, there is no danger of the business of the appellants closing down. As a result of grant of injunction, the appellants can still continue to manufacture and sell their face cream: only they have to stop using the words \"Tibet Snow\" on the cartons, bottles and packages etc. in which the said article may be sold. It has been pointed out by Mr. , learned counsel for the respondent that the audited statements of account which the appellants have been filing in under the directions of the learned Judge, do not at all indicate that the appellants are operating on a large scale. According to Mr. , either the audited statements filed by the appellants do not give a correct version of their sales or the business of the appellants is 'on such a small scale that any injury to them will be almost minimal. It is urged that if the audited statements of account do not reflect the true version of the sales the necessary inference is that it will not be possible for the trial Judee to compute the damages which the Respondent 1s likely to suffer during the pendency of the spit that case damages will not provide an adeauate remedy should the respondent's claim succeed. On the other hand. if the appellants' sales are as reflected by the statements of account filed by them in court, they are not likely to suffer any serious injury. ", "(24) Mr. further contends that in spite of the embargo on. the import of respondent's goods from Pakistan into this country, the very fact that during the period the said embargo lasts and there is equal possibility of the embargo being removed sometime or the other, she respondent will have suffered an irreparable injury. He says that the respondent's face cream sold under the trade mark 'Tibet Snow\" is both widely advertised and has always had large sales. Although due. to import restrictions it has at present no sales in this country it cannot be denied that the product is associated, in the mind of the people with the name of the respondent. The object of the appellants in using the same mark is, or at any rate. the natural consequence of their doing so would be, to induce the public to believe that the goods which they are selling were exported by or came from the respondent's house or that the appellants were concessionnaires from the respondent-company or were under some arrangement with it. In that case the appellants would evidently be deceiving the public to the prejudice of the respondent. Likewise if the appellants were allowed to use the same trade mark in the market turn a long time they would become as well known in the market as importers and sellers of the goods of the respondent. There is thus an apparent danger to the respondent's goodwill and reputation which is a necessary attribute of a right to trade mark. To accept the argument if the learned counsel for the appellants that since the respondent-company was not having any sales of Its product in this country on account of trade restrictions one would have to go to the length of holding that it had also no right to its rights as the registered' proprietor of the trade mark being protected by injunction or otherwise. On that view of the matter we shall have to establish two separate standards, one for the protection of the rights of a national of this country and another for a foreigner who may be registered as a proprietor of a registered trade mark in this country. In the latter case, the trade mark could be successfully purloined by any unscrupulous indigenous producer on the ground that the Government had temporarily imposed trade restrictions on the import of the product. That is not the law as we understand it to be. ", "(25) Mr, also referred us to a decision of in v. and others (1969 Dlt 469) where it was held that for the grant or a temporary injunction the question of balance of convenience could arise only when at least pritna facie the two parties were on the same levels and their rights were about equal. The plaintiff in that suit for the grant of a permanent injunction to restrain the defendant from infringing its trade mark had alleged that it was the user of the trade mark for 12 years and had spent about four lakhs of rupees for advertising the trade mark and had sold goods under that trade mark to the tune of Rupees three crores while the defendant had used the trade mark for six months only. It was. held that the balance of convenience was in favor of the plaintiff and a temporary injunction ought to have been \"ranted by the trial court. ", "(26) It appears to us that in the present case there was material before the learned Judge that the respondent had large sales and had widely advertised its product for several vears. It was only due to import restrictions that the respondent's product had no sales in this country at present. ", "(27) On an over-all view of the material on record we are satisfied that the learned Judge exercised his discretion on sound lines and that there is no error of principle involved in the order made by him. The order made by the learned Judge is therefore maintained and the appeal is dismissed with costs"], "relevant_candidates": ["0000529384", "0000634752", "0001291269", "0001300681"]} {"id": "0000540215", "text": ["JUDGMENT ", "1. The circumstances giving to this appeal are as follows:- ", " respondent was at the material time posted as Superintendent of police, Guedaspur. A government jeep was supplied to him for official use. It was being maintained at Government expense. The tyres of this jeep became worn out. , therefore, on the 7th June, 1966 wrote a letter to the controller of stores, Punjab, chandigarh, that inter alia, some tyres and tubes for government jeep and other transport under his charge were urgently required by him. The controller was requested to intimate the amount involved so that sanction of the competent authority to purchase those articles might be obtained. He followed this by a reminder, dated 23-6-1966, requesting the controller to make necessary arrangements for the supply of types and tubes at an early date. The controller of stores, in reply sent the letter, dated 24-6-1966, requesting the respondent to send his demand in the new prescribed from the controller of printing and stationary, Punjab. He added that that further action would be taken on hearing on hearing from him (respondent). ", "2. On the 20th July, 1966 proceeded in the jeep no. PNP-15 registered in the name of Superintendent of police, Gurdaspur, on official duty, to Pathankot. The jeep was driven by Constable 43. It was raining at about 6.45 P. M. when the jeep was on the road near village Paniar, it skidded and overturned, as a result on which received injuries. His right clavical bone was fractured . He remained in plaster for 6 weeks suffering intense pain. Mr. , therefore made an application to , Punjab chandiaarh, claiming rs. 5.000/- as compensation. It was alleged that the accident occurred due to the worn out tyres of the government vehicle, which were not replaced by the appellant-State, despite repeated requests, in time. At the time of the accident it was raining and the road was wet; consequently, the vehicle skidded and overturned. ", "3. The application was opposed by the state of Punjab through its secretary in the home department. In its written statement, the state denied its liability to pay any compensation, It was added that the officer had taken out the jeep on the road against the instructions of the Inspector-General of police, and that the superintendent of police, Gurdaspur, being himself the registered owner of the vehicle, could not claim compensation against himself. ", "4. The framed these issues:- ", "1. Was the accident due to any negligence on the part of the driver of the vehicle or due to any defect in the vehicle involved in the accident? ", "2. What is the quantum of compensation due if any and and from whom? ", "3. Is not the claimant entitled to any compensation? ", "4. Is the government not liable to pay any compensation to the claimant? ", "5. after recording the evidence produced by the parties, the found:- ", "\"The accident no doubt took place because the tyres were worn out and had become unserviceable and the driver was not to blame as it was raining that day and the tyres slipped, but the driver was negligent in the performance of his duties as he did take the defective vehicle on the road and did not inform his officer about its unserviceable that day. The accident was, therefore, both due to the negligence of the driver as well as due to the defect of the tyres. The respondents have also admitted that requisition had been made to the controller of Stores by the applicant much before the accident for the supply of new tyres. Had they been supplied prior to the accident, it would not have occurred.\" ", "6. The two-pronged issue No. 1 was thus decided entirely in favour of the claimant. The remaining issues were also decided against the state. In the result Rs. 4,000/- were awarded as compensation under section 110-B of the Motor Vehicles Act, 1939, to the claimant against the appellant -State, with costs. It was further directed that the amount be paid within a month of the date of the award, failing which it will carry interest at 6% per annum. Hence this appeal by the state. ", "7. Mr. , the learned counsel for the appellant state, has canvassed these points in the course of his arguments:- ", "1. The claimant as Superintendent of police was the registered owner of the vehicle, and at the material time, it was being driven by his own subordinate, Constable-driver. It was a rainy day the claimant knew or should have, by the exercise of ordinary diligence, known that the tyres of the vehicle were worn out and unserviceable, and it was dangerous to take it out on a rainy day on the road. This act of the claimant, , and his constable-driver in taking out the jeep, which was not in a roadworthy condition, on that rainy day, amounted to an offence under section 121 of the Motor Vehicles Act, read with Rules 5.1 and 5.3 of the Motor Vehicles Rules. The claimant, therefore could not claim compensation for his own wrong or negligence. ", "2. the state was not liable, because no negligence either on the part of the controller in not supplying the new tyres, or the driver in driving the vehicle, was established. ", "3. There were several transport vehicle under the control of the superintendent of police, Gurdaspur. The claimant could avoid travelling on that rainy day in that unsafe vehicle, by selecting some other vehicle, or adopting any other mode of conveyance. The accident was, therefore, self-invited and the direct result of the negligence on the part of the claimant. ", "8. Mr. , the learned Counsel for the claimant-respondent contends occurred as a result of the negligence of the appellant- in not replacing the worn out tyres of the government jeep in time, despite requisitions made by the claimant: secondly, even if there was no such negligence, the liability of the to compensate its servant for an injury sustained by him in the performance of his duty was absolute. It was not dependent on proof of any negligence either on the part of the Controller in not supplying the new tyres in time, or on the part of the drives of the vehicle in driving it. The claim ant as well as the driver both were servants of the . The claimant was required to go on official tours in this jeep. While it was the duty of the constable-driver to drive it. A jeep with worn out tyres when driven on the road on a rainy day, is an intrinsically dangerous vehicle. ", "It was only in answer to the call of duty, which was paramount, that the claimant-respondent tool the risk of taking the unsafe vehicle on the road, and thereby met an accident and got injured. It was the duty of the master to keep the vehicle in a roadworthy condition, in which the servant was required to travel in the performance of his duties. It is maintained that the principle of res ipsa loquitur will be attracted. It is also said that section 110-B of the Motor Vehicles Act does not say that compensation can be awarded only when negligence on the part of the driver of the vehicle or its owner is established. I n support of this contention, Mr. has referred to roadways, Ambala 1962-64 Pun LR 448=(AIR 1962 Punj 540): and sons, Ltd., (1921) 2 KB 674: , (1955) 1 All ER 6: and , (1944) 1 All ER 465. ", "9. Before entering on the merits of the case, it will be worthwhile to elucidate the law on the point. It is true that there is nothing either in Ss. 110, 110- A, 110-B or 110- C of the Motor Vehicles Act , which says that compensation can be awarded by only when negligence on the part of the driver of the vehicle concerned is established. These provisions, however, do not lay down any criterion for awarding compensation. They merely substitute the Motor Accidents claims tribunal for the Civil courts, for adjudicating claims to compensation in respect of accidents, involving death of or bodily injury to persons, arising our of the use of motor vehicles. They do not deal with the question as to who is to be held liable and in what circumstances, if any injury results from an accident. For fixing liability, in the absence of any specific statutory provision, we have to go back to the law of torts, according to which, generally speaking negligence in causing the accident is essential to hold the negligent person liable. ", "As observed by I. D. dua, J. in shri ram Pertap's case, 1962-64 Pun LR 448=(AIR 1962 Punj 540) the cardinal principle of liability on tort, when death or bodily injury has been caused to a person, is negligence or failure to take the requisite amount of care required by law. Similarly, in . AIR 1963 Punj 214, the accident in which the claimant received injuries while travelling in a bus, run by the state, was not proved to be due to any rash or negligent act of the driver. It was held that the claimant was not entitled to claim any compensation from the state for the injuries received by him. ", "10. It must be remembered that 'absolute liability' - which means liability without any fault or negligence on the part of the respondent, is exception under the common law, the general rule being that a person is liable only for the injury or harm directly flowing from his intention or negligence and not for any harm resulting from an unavoidable accident. The rule of absolute liability has grown in modern times. In Rylands V. Fletcher. (1865) 3 H & c 774 (sic) (1868- 3 HL 330 reversing (1865) 3 H & C 774), it was laid down that a person who brings dangerous things on his land and a harm results due to their escape, is liable. An extension of this rule casts vicarious liability on employers towards their employees. Employing servants or workmen in industry of business under the present conditions in this machine age is attended with risk of injury due to the negligence or mischief of the employees, which their employer cannot avoid with any amount of care. Statutory provisions, such as Workmen's Compensation Act , have been made to put the employer in the position of an insurer against harm done to the employees or its workmen within the scope of the employment. This principle of insurance against harm is in consonance with the socialistic pattern of society envisaged in our constitution. ", "11. In applying the doctrine of absolute liability, the have to perform a delicate task. They have to give a new look to the old principles in the light of the present-day circumstances. They have to adopt the old principles to the modern world. If the old principles are to live and not become flint fossils of time, they must be constantly renovated, molded, and attuned to the changing social conditions. The courts play a limited role in this process by placing, what is called a dynamic interpretation on principles which carry behind them the sanction of tradition and precedent. They cannot, however, in the absence of any statutory provision, sanctioning that course, cut themselves completely adrift from their past moorings, and arrogate to themselves the functions of the . Introducing entirely new principles, radically differing from a conflicting with the fundamental principles of Common law that have evolved through the centuries. Leaving aside the cases governed by special statutory provisions, such as Workmen's compensation Act, in cases of the kind before me, negligence on the part of the master or his agent must be proved before he can be fastened with the liability to compensate his servant, sustaining an injury in the course of the service. ", "12. The above being the law on the point, I pass on to consider whether in the present case, the accident resulting in injury to the claimant was due to negligence - actual or presumed - on the part of the employer - or its servant, the driver of the vehicle concerned. ", "13. It was first on the 7th June 1966, that the claimant wrote to the controller of that some tyres and tubes for jeep and other transport under his charge were urgently required by him. This letter was more or less of an exploratory nature, inasmuch as the controller was requested to intimate the amount involved so that sanction of the competent authority to purchase those articles might be obtained. To this letter, the controller of stores sent a reply, dated 24-6-1966, asking the claimant -respondent to send his demand in the prescribed indent form available from the controller of printing and stationary, Punjab. There is nothing on the record to show that the claimant-respondent had sent his demand in the prescribed form thereafter. In the letter, dated 7-6-1966, Exhibit D. B., the claimant-respondent did not even say that the tyres of the vehicles had become unserviceable or worn our. The only thing mentioned therein is, that certain number if tyres and tubes were urgently required. ", "On the other hand, the controller of stores in his letter, Exhibit D. D., dated 24-6-1966, clearly intimated the claimant-respondent that further action in the matter could be taken only on respect of his demand on the prescribed indent forms No. \"UF 88\". It is true that the knowledge of the employer or the controller about this unserviceable or dangerous condition of the motor vehicle concerned is not a sine qua non for fixing him with the liability. It is, however, an important piece of evidence showing that were was no negligence on his part. Thus, it was not established that there was any negligence on the part of the appellant or its servant, the controller of stores, in not replacing the worn out tyres of the vehicle in time. Indeed, there was negligence on the part of the claimant in not making the demand well in time in the prescribed form. , also, has not recorded any clear finding that there was negligence on the part of the state in replacing the worn out tyres, though it has said that the accident occurred due to the defect in the tyres. ", "14. Having seen that no negligence on the part of the employer-state has been proved, I pass on to consider, whether any negligence on the part of the driver held been established. The has held that the driver was not to blame for the accident, which occurred due to the rain and the worn out and unserviceable condition of the tyres. The has however, held that the driver was negligent as he did take the defective vehicle on the road and did not inform his officer about its unserviceable that day. ", "15. I am unable to appreciate this reasoning. It was the claimant's own case that the tyres of the vehicle had become worn out and unserviceable and they required urgent replacement. The knowledge of the claimant about the worn out condition of the tyres can be inferred from the circumstances that he wrote to the controller as far back as the 7th June 1966, that the tyres and tubes of the jeep and other transport vehicles were urgently needed by him. He followed up this letter by a reminder, dated 23-6-1966. Thereafter, he received the reply of the controller that the requisition should be sent in the prescribed form. The accident occurred only about 4 weeks after the receipt of this letter. It is therefore, preposterous to suggest that Mr. did not know about the worn our and unserviceable condition of the tyres. ", "He further knew that it was a rainy day. By ordinary diligence, therefore, he ought to have known that it was dangerous to take out the vehicle with unserviceable tyres on a rainy day. He did not require to be told by the Constable-driver about the condition of the tyres and the consequent roadworthy condition of the jeep on that rainy day. This act of the driver in driving that dangerous and unsafe vehicle on that rainy day, with its unserviceable tyres, and also act of in allowing his subordinate driver to drive the vehicle on that day, might amount to the commission of an offence by the claimant as well as the driver under section 121 of the Motor Vehicles Act. Section 121 of the Act, reads as follows:- ", "\"121. Using vehicle in unsafe condition. Any person who drives or cause or allows to be driven in any public place a motor vehicle or trailer while the vehicle or trailer has any defect, which such person knows of or could have discovered by the exercise of ordinary care and which is calculated to render the driving of the vehicle a source of danger to persons and vehicles using such place, shall be punishable with fine which may extend to two hundred and fifty rupees, or if as a result of such defeat an accident is caused causing bodily injury or damage to property, with imprisonment for a term which may extend to three months or with fine which may extend to one thousand rupees, with both.\" ", "16. Thus, the claimant and the driver both committed a wrongful act which is interdicted Act. The claimant, therefore cannot be compensated for a harm flowing from his own wrongful act or negligence. ", "17. The facts of the cases referred to by Mr. were materially different from those of the instant case. The sheet-anchor of Mr. , is the case, (1921) 2 KB 674. The plaintiff, Mr. , a commercial traveler, was employed by the defendants, who were wholesale grocers. His duties were to travel round the district, show samples, take orders and deliver goods, and for that purpose he was supplied by the defendants with a motor-car, the starting gear of which was defective. He complained of this on several occasions to the defendants, who admitted that it was defective, but failed to remedy the defect. While the plaintiff was upon one of his journeys the car stopped, and in trying to restart it, he was severely injured. In an action brought by the plaintiff to recover damages in respect of personal injury resulting from the negligence of the defendants, it was held that the plaintiff notwithstanding his knowledge of the defect in the starting gear, had never undertaken or consented to take upon himself the risks arising from continuing to use the car, that he had sustained the injury owing to the personal negligence of the defendants, and that, not having been guilty of contributory negligence, he was entitled to recover. ", "18. It is important to note that Mr. had repeatedly complained to his employers about the defect in the starting gear of the car. But the defect was not removed. The last time he complained about the defect to his employers, he was told: \"Well we do not want you to be laid up, Use the car this week, as no other car is available. I will then have it seen to when you get back and you can go your next round by rail\". It was in compliance with this direction of the employer that Mr. started on his journey in the car, with the starting gear still defective. ", "19. In the instant case, it was neither alleged not proved by the claimant that he was peremptorily required by his employer or any superior officer to use the jeep with its defective tyres on that rainy day and thus run the risk of being injured. The claimant has not alleged, much less proved, (1) that the official work for which he had to travel on that day was so urgent and paramount that he could not, as a devoted and faithful servant of the state, avoid, and (2) that in the circumstances, he had no choice but to use this very defective jeep. It is apparent from the letter written by the claimant to the controller that there were several transport vehicles under his control. ", "He has not alleged that all the other vehicles were unserviceable and in a more unroadworthy condition than the jeep concerned. Indeed, it was never the claimant's case that the exigencies of the official mission to be performed by him were so urgent and imminent that he had no choice but to travel in this defective jeep, except at the cost of committing dereliction of the official duty and the consequent incurrence of displeasure of the master. There was no proof that the master had done some act either by issuing peremptory direction to the servant to use this defective vehicle on that day and thereby expose him to danger, or had in any manner put the servant in that dangerous situation which he could not, by the exercise of ordinary diligence or discretion, avoid. ", "20. In (1921) 2 KB 674, it has no-where been laid down that the master's Liability is absolute and is not dependent on his personal negligence towards the servant. Mr. Justice , who decided this xase, agreed that in order to cast liability on the master it was not necessary to prove that the master knew of the danger and that the servant was ignorant of the danger. In this opinion, both these branches of the proposition as enunciated in 's case, (1884) 13 QBD 259, were erroneous. The learned Judge further observed:- ", "\"I do not think it was ever essential not is it now essential to show that the master has actual knowledge of the danger or defect. The action against the master by a servant for negligence was based., as it purported to be based, on negligence and not on knowledge. It may well be that negligence could not in certain cases be shown without proof of knowledge. It may also be that once knowledge was shown the inference of negligence would be drawn. But proof of knowledge was only a useful method of proving negligence. Negligence could exist and can exist without actual knowledge by the master of the danger or defect. Indeed the absence of knowledge may itself be the basis of the charge of negligence. ", "The relationship between master and servant normally places upon the master the duty of care towards his servant........... ", "Now what does the duty of care involve? The answer is supplied by the well-known words of in , (1856) 11 Ex 781, 784, where he defines negligence as \"the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.\" Subject to the observation in , (1893) 1 QB 491, the words of , are still a useful guiding rule. ", "It follows therefore that a master may be liable for a danger or defect (causing hurt to his servant) not only where he knew but where he ought to have known of it. The negligence may be either (a) where he knows and negligently fails ro remedy, or (b) where he ought to have known but negligently fails in acquiring knowledge and therefore negligently fails to remove the danger or defect.\" ", "21. Thus, from what has been quoted above, it is quite clear that negligence on the part of the master is still the basis of an action for compensation in cases of this kind. In the case before me, the master was not apprised of the fact that the tyres of all the vehicles, including the jeep in question had become unserviceable. Secondly, it was not the master who put the servant in that situation. It was the claimant's own negligence that exposed him to that danger. The claimant's negligence consists first in not placing the indent in time in the prescribed form, and further allowing the jeep to be taken out in that road unworthy condition on a rainy day. Thus, the rule in 's case, 1921-2 KB 674 does not advance the proposition expounded Mr. . ", "The general rule is that the plaintiff must establish some negligence or a breach of duty by the defendant towards him and its causal connection with his injury. I do not agree that the case is covered by the principle or res ipsa loquitur. This rule has been very succinctly stated in the leading English case, Scott V. London and (1865) 3 H & c 596. There the plaintiff, a customs officer, went inti the defendant's docks on business and in passing from one door way to another, six bags of sugar which were hung by a chain, fell on him. It was held that on these facts negligence of the defendant's servant could be inferred. The rule applicable to such cases was enunciated as follows:- ", "\"Where the thing is shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen it those who have the management use proper care, it affords reasonable evidence in the absence of explanation by the defendant, that the accident arose from want of care.\" ", "22. In case before, me the vehicle concerned was not under the 'management' of the appellant-state or its servant, the driver, It was registered in the name of the superintendent of Police Gurdsapur, and was under his control . that is to say, it was under the, management of the claimant himself, and the accident would not have happened if the claimant, who had the management and control, used proper care either to get the tyres replaced in time or to avoid using this dangerously unsafe vehicle on that rainy day. The accident occurred for want of care on the part of the claimant himself. The rule of res ipsa loquitur , (which for the sake of convenience maybe called the rule of presumptive negligence on part of the defendant), has therefore, no application to the facts of the case. ", "23. It is not necessary for me to over-burden this judgment by discussing all the cases cited by Mr. . It would suffice to say that their facts were entirely different. ", "24. For all the reasons aforesaid, I have no hesitation in holding that the claimant was not entitled to any compensation. In the result, I would allow this appeal, and dismiss the claimant's application, leaving the parties to bear their own costs throughout. ", "25. SSG/D.V.C. ", "26. Appeal allowed."], "relevant_candidates": ["0000251519", "0001585501"]} {"id": "0000594165", "text": ["CASE NO.: Appeal (civil) 5837 of 2006 PETITIONER: and RESPONDENT: Smt. DATE OF JUDGMENT: 15/12/2006 BENCH: & JUDGMENT: ", ", J. ", "Leave granted. ", "This appeal has been filed against the impugned judgment of dated 17.1.2005 in C.M.M. No. 1367 of 2004 and C.MM. No. 1420 of 2004. ", "Heard learned counsel for the parties and perused the record. ", "The facts of the case are that respondent Smt. was married to , son of the appellants, on 14.4.2000. ", "After the marriage respondent started living with her husband in the house of the appellant no.2 in the second floor. It is not disputed that the said house which is at B-135, Ashok Vihar, Phase-I, Delhi belongs to the appellant no.2 and not to her son . ", " filed a divorce petition against his wife , and it is alleged that as a counter blast to the divorce petition Smt. filed an F.I.R. under Sections 406 / 498A / 506 and 34 of the Indian Penal Code and got her father-in-law, mother-in-law, her husband and married sister-in-law arrested by the police and they were granted bail only after three days. ", "It is admitted that Smt. had shifted to her parent's residence because of the dispute with her husband. She alleged that later on when she tried to enter the house of the appellant no.2 which is at property No. B-135, Ashok Vihar, Phase-I, Delhi she found the main entrance locked and hence she filed Suit No. 87/2003 for a mandatory injunction to enable her to enter the house. The case of the appellants was that before any order could be passed by the trial Judge on the suit filed by their daughter-in- law, Smt. , along with her parents forcibly broke open the locks of the house at Ashok Vihar belonging to appellant No. 2, the mother- in-law of Smt. . The appellants alleged that they have been terrorized by their daughter-in-law and for some time they had to stay in their office. ", "It is stated by the appellants that their son , husband of the respondent, had shifted to his own flat at Mohan Nagar, Ghaziabad before the above litigation between the parties had started. ", "The learned trial Judge decided both the applications for temporary injunction filed in suit no.87/2003 by the parties by his order on 4.3.2003. He held that the petitioner was in possession of the second floor of the property and he granted a temporary injunction restraining the appellants from interfering with the possession of Smt. , respondent herein. ", "Against the aforesaid order the appellants filed an appeal before the Senior Civil Judge, Delhi who by his order dated 17.9.2004 held that Smt. was not residing in the second floor of the premises in question. He also held that her husband was not living in the suit property and the matrimonial home could not be said to be a place where only wife was residing. He also held that Smt. had no right to the properties other than that of her husband. Hence, he allowed the appeal and dismissed the temporary injunction application. ", "Aggrieved, Smt. filed a petition under Article 227 of the Constitution which was disposed of by the impugned judgment. Hence, these appeals. ", "The learned Single Judge of in the impugned judgment held that the second floor of the property in question was the matrimonial home of Smt. . He further held that even if her husband had shifted to Ghaziabad that would not make Ghaziabad the matrimonial home of Smt. . The Learned Judge was of the view that mere change of the residence by the husband would not shift the matrimonial home from Ashok Vihar, particularly when the husband had filed a divorce petition against his wife. On this reasoning, the learned Judge of held that Smt. was entitled to continue to reside in the second floor of B-135, Ashok Vihar, Phase-I, Delhi as that is her matrimonial home. ", "With respect, we are unable to agree with the view taken by . ", "As held by this Court in ., 4 SCC 183, whereas in England the rights of the spouses to the matrimonial home are governed by the Matrimonial Homes Act, 1967, no such right exists in India. ", "In the same decision it was observed \"it may be that with change of situation and complex problems arising it is high time to give the wife or the husband a right of occupation in a truly matrimonial home, in case of the marriage breaking up or in case of strained relationship between the husband and the wife.\" ", "In our opinion, the above observation is merely an expression of hope and it does not lay down any law. It is only the legislature which can create a law and not the . The courts do not legislate, and whatever may be the personal view of a Judge, he cannot create or amend the law, and must maintain judicial restraint. ", "There is no such law in India, like the British Matrimonial Homes Act, 1967, and in any case, the rights which may be available under any law can only be as against the husband and not against the father-in-law or mother- in-law. ", "Here, the house in question belongs to the mother-in-law of Smt. and it does not belong to her husband . Hence, Smt. cannot claim any right to live in the said house. ", "Appellant No. 2, the mother-in-law of Smt. has stated that she had taken a loan for acquiring the house and it is not a joint family property. We see no reason to disbelieve this statement. ", "Learned counsel for the respondent then relied upon the Protection of Women from Domestic Violence Act , 2005. He stated that in view of the said Act respondent Smt. cannot be dispossessed from the second floor of the property in question. ", "It may be noticed that the finding of the learned Senior Civil Judge that in fact Smt. was not residing in the premises in question is a finding of fact which cannot be interfered with either under Article 226 or 227 of the Constitution. Hence, Smt. cannot claim any injunction restraining the appellants from dispossessing her from the property in question for the simple reason that she was not in possession at all of the said property and hence the question of dispossession does not arise. ", "Apart from the above, we are of the opinion that the house in question cannot be said to be a `shared household' within the meaning of Section 2(s) of the Protection of Women from Domestic Violence Act , 2005 (hereinafter referred to as the 'Act'). ", "Section 2(s) states: ", "\"`shared household` means a household where the person aggrieved lives or at any stage has lived in a domestic relationship either singly or along with the respondent and includes such a household whether owned or tenanted either jointly by the aggrieved person and the respondent, or owned or tenanted by either of them in respect of which either the aggrieved person or the respondent or both jointly or singly have any right, title, interest or equity and includes such a household which may belong to the joint family of which the respondent is a member, irrespective of whether the respondent or the aggrieved person has any right, title or interest in the shared household\". ", "Learned counsel for the respondent has relied upon Sections 17 and 19(1) of the aforesaid Act, which state: ", "\"17. (1)Notwithstanding anything contained in any other law for the time being in force, every woman in a domestic relationship shall have the right to reside in the shared household, whether or not she has any right, title or beneficial interest in the same. ", "(2) The aggrieved person shall not be evicted or excluded from the shared household or any part of it by the respondent save in accordance with the procedure established by law. ", "19. (1) While disposing of an application under sub-section (1) of section 12 , the Magistrate may, on being satisfied that domestic violence has taken place, pass a residence order-- ", "(a) restraining the respondent from dispossessing or in any other manner disturbing the possession of the aggrieved person from the shared household, whether or not the respondent has a legal or equitable interest in the shared household; ", "(b) directing the respondent to remove himself from the shared household; ", "(c) restraining the respondent or any of his relatives from entering any portion of the shared household in which the aggrieved person resides; ", "(d) restraining the respondent from alienating or disposing off the shared household or encumbering the same; ", "(e) restraining the respondent from renouncing his rights in the shared household except with the leave of the Magistrate; or ", "(f) directing the respondent to secure same level of alternate accommodation for the aggrieved person as enjoyed by her in the shared household or to pay rent for the same, if the circumstances so require: ", "Provided that no order under clause (b) shall be passed against any person who is a woman\". ", "Learned counsel for the respondent stated that the definition of shared household includes a household where the person aggrieved lives or at any stage had lived in a domestic relationship. He contended that since admittedly the respondent had lived in the property in question in the past, hence the said property is her shared household. ", "We cannot agree with this submission. ", "If the aforesaid submission is accepted, then it will mean that wherever the husband and wife lived together in the past that property becomes a shared household. It is quite possible that the husband and wife may have lived together in dozens of places e.g. with the husband's father, husband's paternal grand parents, his maternal parents, uncles, aunts, brothers, sisters, nephews, nieces etc. If the interpretation canvassed by the learned counsel for the respondent is accepted, all these houses of the husband's relatives will be shared households and the wife can well insist in living in the all these houses of her husband's relatives merely because she had stayed with her husband for some time in those houses in the past. Such a view would lead to chaos and would be absurd. ", "It is well settled that any interpretation which leads to absurdity should not be accepted. ", "Learned counsel for the respondent has relied upon Section 19(1)(f) of the Act and claimed that she should be given an alternative accommodation. In our opinion, the claim for alternative accommodation can only be made against the husband and not against the husband's in-laws or other relatives. ", "As regards Section 17(1) of the Act, in our opinion the wife is only entitled to claim a right to residence in a shared household, and a `shared household' would only mean the house belonging to or taken on rent by the husband, or the house which belongs to the joint family of which the husband is a member. The property in question in the present case neither belongs to nor was it taken on rent by him nor is it a joint family property of which the husband is a member. It is the exclusive property of appellant No. 2, mother of . Hence it cannot be called a `shared household'. ", "No doubt, the definition of `shared household' in Section 2(s) of the Act is not very happily worded, and appears to be the result of clumsy drafting, but we have to give it an interpretation which is sensible and which does not lead to chaos in society. ", "In view of the above, the appeal is allowed. The impugned judgment of is set aside and the order of Senior Civil Judge dismissing the injunction application of Smt. is upheld. No costs. ", "Contempt Petition (C) No. 38/2006 In view of the judgment given above, the contempt petition stands dismissed."], "relevant_candidates": ["0001642416"]} {"id": "0000603628", "text": ["ORDER Per - This appeal by the assessee for assessment year 1985-86 is directed against the order dated 16-9-1992 passed under section 263 of the Income-tax Act, 1961 by , Patiala. ", "2. Brief facts of the case are these : The assessee is an individual who had income for two months from 1-4-1984 to 31-5-1984 as proprietor of dealing in manufacture and sale of poultry feeds. The assessee also started a proprietary business in the name of , Jagraon, which ran for two months for February and March 1985. The accounting period of the assessee ended on 31-3-1985. There was an income-tax search at the premises of the assessee on 14-10-1986 when certain books of accounts and documents were taken into possession by the . The Assessing Officer made an assessment on 27-7-1990 under section 143(3) of the Act. Though the order is not very exhaustive, it is clear from the order that the incriminating material seized by the income-tax authorities was looked into by the Assessing Officer before framing the assessment. In fact, the Assessing Officer had issued three enquiry letters dated 6-2-1987, 10-2-1987 and 29-1-1988, copies of which are placed at pages 9 to 14 of the compilation. ", "3. The , however examined the record of the assessee and noticed that the document seized during the income-tax search had not been considered by the Assessing Officer. He also noticed that some of the investments had not been looked into and on some, enquiries had not been made. The ld. Commissioner accordingly issued a show-cause notice dated 4-2-1992 listing as many as nine items which were not considered by the Assessing Officer at the time of original assessment. The Assessee furnished a detailed reply dated 15-9-1992 which is placed at pages 4 to 8 of the assessees compilation. ", "4. The . Commissioner, after enumerating the nine items mentioned the show-cause notice in the body of the order passed under section 263 of the Act, took cognizance of the reply submitted by the assessee but he that it was neither proper nor possible for him to verify the explanation furnished by the assessees learned counsel. Since, according to him, the Assessing Officer while passing the original assessment order had failed to consider the incriminating evidence in some seized papers and also did not look into certain investments, he he that the assessment order dated 27-7-1990 was erroneous insofar as it was prejudicial to the interests of the revenue. He accordingly set aside the assessment order in question and directed the Assessing Officer to make a de novo assessment considering all the seized papers not considered earlier and also other important aspects of the case as mentioned in the impugned order. It is against this order that the assessee has come up in appeal before us. ", "5. , Advocate, the ld. counsel for the assessee, very ably presented the case of the assessee. It was submitted by him that though the assessment order passed by the Assessing Officer may not be exhaustive and may be cryptic, that would not mean that the Assessing Officer had not made the necessary enquiries before completing the assessment. The ld. counsel, in fact, drew our attention to the various notices issued by the Assessing Officer before completing the assessment to which a reference had been made above. It was also submitted that the order under section 263 was a quasi-judicial order and it was necessary for assuming jurisdiction that there should be a proper and valid reason for doing so and the conclusion of the ld. Commissioner should also be based on facts. It was submitted that in the instant case, the ld. Commissioner had not gone into the explanation furnished by the assessee nor had he come to a definite conclusion that the order passed by the was erroneous and prejudicial to the interests of the revenue. It was vehemently argued that the entire approach of the ld. Commissioner was faulty and on that basis, no order under section 263 could have been passed. ", "6. The ld. counsel with the help of a chart filed before us explained as to how item Nos. (i) to (vi) in the impugned order had been gone into by the Assessing Officer as would be clear from the various query letters issued by him before completing the assessment. As regards item No. (vii), it was submitted that the assessee in his detailed reply before the Commissioner had pointed out that was incorporated on 5-5-1984 and that no income was earned up to 29-9-1984 when the assessee resigned from directorship. The assessee had explained that shares worth Rs. 10,000 of this company had been purchased after earned the same in the books of accounts since no income had been earned, nothing was to be shown in the return. As regards item No. (viii), it was submitted that business in the style of was being run by w/o Dr. , sister-in-law of the assessee, as a proprietary concern. It was pointed out that in the reply submitted, it had been explained that the proprietary concern was proposed to be converted into a partnership concern for which purpose a partnership deed dated 17-10-1984 was also executed but this remained a paper transaction only and no activity was done by the partnership concern. It was also pointed out that neither any investment was made nor did the firm actually come into existence. It was also submitted that was assessed in her proprietary capacity for the said business for assessment year 1985-86. ", "7. As regard item No. (ix), it was submitted that all the incriminating documents had been gone into by the ITO and that the search took place as a result of the machination of a disgruntled and dismissed employee of the assessee, . The ld. counsel for the assessee, therefore, vehemently argued that there was absolutely no justification for assuming jurisdiction under section 263 by the ld. CIT nor for passing the order setting aside the assessment to be made afresh. ", "8. The ld. counsel relied on the Patna High court decision in 142 ITR 778 for the proposition that the Commissioner has to point out as to how order sought to be cancelled is prejudicial to the interest of the revenue. Moreover, his satisfaction has to be not subjective but objective. Reliance was also placed on the decision in the . 170 ITR 28 for the proposition that the power of revision by the Commissioner under section 263 of the Act is quasi-judicial in character and he must give reasons in support of his conclusion that the assessment order is erroneous insofar as it is prejudicial to the interests of the revenue. If he does not give reasons, the order would stand vitiated. The ld. counsel also relied on the Punjab and Haryana High Court decision in 112 ITR 445 for the proposition that in passing an order of revision under section 263 of the Act, it is necessary for the Commissioner to state in what manner he considered that the order of the Assessing Officer was erroneous and prejudicial to the interests of the revenue and that the basis was for such a conclusion. Relying on the Punjab and Haryana High Court decision in 178 ITR 446, it was submitted that the Commissioner had come to a firm decision that the order of the Assessing Office was erroneous and was prejudicial to the interests of the revenue. The ld. counsel also relied on decision in 171 ITR 698 at 701 for the proposition that the orders of the may be brief and cryptic, but that by itself is not sufficient to brand the assessment orders as erroneous and prejudicial to the interests of the revenue. Writing an order in detail may be legal requirement, but the order not fulfilling this requirement, cannot be said to be erroneous and prejudicial to the interests of the revenue. Relying on the Rajasthan High Court decision in 167 ITR 129, it was submitted that the error envisaged by section 263 was not on which depended on possibility or guesswork, but it should be actually an either of fact or of law. The learned counsel for the assessee, therefore, forcefully submitted that all the necessary enquiries had been made by the and the ld. Commissioner had failed to point out any error in the assessment order. It was, therefore, pleaded that the impugned order may be vacated. ", "9. The Representative submitted that in the show-cause notice, 9 reasons were given by the ld. Commissioner for invoking his jurisdiction under section 263 . According to the Representative, these very reasons were incorporated in the impugned order. It was submitted that these were valid reasons which could justify the intervention by the learned Commissioner. It was submitted that the Assessing Officer had failed to consider the entire evidence and hence the setting aside of assessment order became a necessity. The al Representative strongly superheated the impugned order. ", "10. We have carefully considered the submission of both the sides. We find considerable merit in the arguments of which have been put forth in a very clear-cut manner. We find that the assessment order framed by the Assessing Officer was passed under section 143(3) after making all the necessary enquiries. The income-tax search and taken place on 14-10-1986. The Assessing Officer issued three query letters to which a reference has been made above. The assessment was completed on 27-7-1990 which was almost four years after the seizure of documents and records by the income-tax authorities. All these clearly show that the had made the necessary enquiries before completing the assessment. The counsel for the assessee has demonstrated with reference to a chart that items at Sl. Nos. (i) to (vi) mentioned in the impugned order were covered by one other query letter issued by the Assessing Officer. As regards items at Sl Nos. (vii) to (ix), it was submitted that a proper and exhaustive reply had been filed before the CIT which was, however, not considered by that authority. Various High Courts have he that the power by the Commissioner under section 263 is quasi-judicial in character. The Commissioner, therefore, has not to record his subjective satisfaction but to a conclusion in an objective manner. The Commissioner has also to come to a firm conclusion that the order passed by the Assessing Officer was erroneous and prejudicial to the interests of revenue. The learned Commissioner cannot sit in judgment over the discretion exercised by the Assessing Officer. He can legally interfere with the assessment order only if he finds that the order is both erroneous and prejudicial to the interests of the revenue. In the instant case, what we find is that the Commissioner has neither looked into the submissions made on behalf of the assessee nor came to a firm conclusion that the assessment order was erroneous and prejudicial to the interests of the revenue. He has also not demonstrated as to how the incriminating evidence seized by the revenue had not been utilised by the . On the contrary, the for the assessee has demonstrated before us as to how the Assessing Officer had issued detailed query letters for eliciting necessary information from the assessee. The case law cited by the assessee and referred to above makes it abundantly clear that the Commissioner must state the reasons for intervention before assuming jurisdiction under section 263 and while passing the order under section 263 must come to a conclusion that the order passed by the Assessing Officer was not only erroneous but also prejudicial to the interests of the revenue. In the case of (supra) the facts were more or less similar to what we find in the instant case. In that case for assessment year 1979-80, the Assessing Officer completed the assessment. The Commissioner intervened under section 263 of the Act and set aside the order of assessment with a direction to make fresh assessment on the ground that business loss of the assessee amounting to Rs. 30,000 was determined after adjusting deductions under section 80J and was allowed to be carried forward and also due to certain other infirmities. The found that no firm conclusions were arrived at by the Commissioner in his revisional jurisdiction, and therefore, it cou not be said that the assessment made by the Assessing Officer was erroneous, which was one of the prerequisites for the exercise of revisional jurisdiction by the Commissioner and hence set aside the order of the Commissioner. he that the Commissioner did not furnish his opinion or consider the cited cases or the arguments raised and merely observed that these were the points which deserved consideration and after setting aside the order of the Assessing Officer, issued a direction for making assessment afresh, which was not permissible under the provisions contained in section 263 of the Act. further he that the Commissioner had to come to a firm decision that the order of the was erroneous and prejudicial to the interests of the revenue and since no decision about the erroneous nature of the order was firmly taken. The was he to be right in vacating the order of the Commissioner under section 263 . In our opinion, the fact in the case of (supra), as discussed above, are akin to the in the instant case. In the present case also, the Commissioner has not come to a firm conclusion as to how the order passed by the Assessing Officer was erroneous. All the necessary enquiries as noted above already been made by the Assessing officer. The assessee had all furnished a cogent reply before the Commissioner when a show-cause notice issued under section 263(1) was issued. In the face of this evidence, the Commissioner cou not pass an order under section 263 by remarking that it was neither proper nor possible for him to verify the explanation furnished by the assessees counsel. In fact, it was the duty of the Commissioner to took the explanation of the counsel for the assessee and come to a firm conclusion as to whether the Assessing Officer had committed an error framing the assessment. Setting aside an assessment is no ordinary matter. In fact, in tax laws as in other laws, certainly and finality are the prerequisites of a good tax administration. The orders of the subordinate authority shou, therefore, not be cancelled or set aside on mere whims and fancies; there must be very compelling reasons for interference by the Commissioner under section 263 . In the instant case, however, the Commissioner has left the enquiries to be made to the Assessing Officer without reaching a firm conclusion that the order passed was, in fact, erroneous. We have therefore, no hesitation to say that the impugned orders stands vitiated for the reasons mentioned above and is hereby vacated. ", "11. In the result, the appeal is allowed."], "relevant_candidates": ["0000051942", "0000175151", "0000181784", "0000804932", "0000890199", "0001324656"]} {"id": "0000615273", "text": ["PETITIONER: INDIAN AND EASTERN NEWSPAPER SOCIETY NEW DELHI Vs. RESPONDENT: COMMISSIONER OF INCOME TAX, NEW DELHI DATE OF JUDGMENT31/08/1979 BENCH: , R.S. BENCH: , R.S. BHAGWATI, P.N. TULZAPURKAR, V.D. CITATION: 1979 AIR 1960 1980 SCR (1) 442 1979 SCC (4) 248 ACT: Income Tax Act 1961-S. 147(b)-Scope of-\"Information\" \"Reason to believe\"-Meaning of-Opinion of audit party of -If would constitute \"information\". HEADNOTE: Section 147(b) of the Income Tax Act, 1961 provides that if an Income Tax officer has, in consequence of information in his possession, reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess such income. The internal audit organisation of the income tax department, in the course of auditing the income tax records pertaining to the assessee for certain assessment years stated that the assessee's income on account of letting out of halls and rooms should not have been assessed as income from business but an assessment should have been made under the head \"Income from property\". Treating the report as information in his possession under s. 147(b) the Income Tax officer re-assessed the assessee's income The Appellate Assistant Commissioner reversed the Income Tax officers order. On the other hand, took the view that the Income Tax officer had jurisdiction to proceed under s.147(b). In a reference under s.257 of the Income Tax Act the question was whether the Income Tax officer was legally justified in reopening the assessment under s. 147(b) on the basis of the view expressed by the Internal Audit party received by him subsequent to the original assessment. Allowing the appeal, ^ HELD: The opinion of the internal audit organization of the on a point of law cannot be regarded as information within the meaning of s. 147(b) of the Act. [455A]. 1. (a) An assessment proceeding, which is a quasi- judicial proceeding, acquires finality on the assessment order being made. The finality of such an order can be disturbed only in proceedings, and within the confines, provided by law. An appeal, revision and rectification are proceedings in which the finality of the assessment may be questioned. Section 147 , under which an assessment may be reopened, is a proceeding for assessing income which has escaped assessment. [446F-G] 2. In cases falling under s. 147(b) \"information\" is an indispensable ingredient. The word ''information'' has been interpreted by this Court to mean not only facts or factual material but include information as to the true and correct state of the law and, therefore, information as to relevant judicial decisions. The term is also defined as \"instruction\" or Knowledge derived from an external source concerning facts or particular, or as to law, relating to n matter bearing on the assessment. [447D- 35 I.T.R. 1 (S.C.)= Sup. I SCR 10, 67 I.T.R. Il(SC)= I SCR 10, referred to. 443 3.(a) By its inherent nature, a fact has concrete existence. It influences the determination of an issue by the mere circumstance of its relevance. It requires no further authority to make it significant. [447-H]. (b) The term 'law' is used in the sense of norms or guiding principles having legal effect and legal consequences. To possess legal significance for that purpose, law must be enacted or declared by a competent authority. The legal sanction vivifying it imparts to it its force and validity and binding nature. Law may be statutory law enacted by a competent legislative authority, or it may be judge made law emanating from a declaration or exposition of the content of a legal principle or the interpretation of a statue and may in particular cases extend to a definition of the status of a party or the legal relationship between the parties, the declaration being rendered by a competent judicial or quasi-judicial authority empowered to decide questions of law between contending parties. The declaration or exposition is ordinarily set forth in the judgment of a court or the order of a tribunal. Such declaration or exposition in itself bears the character of law. In every case, therefore, to be law it must be a creation by a formal source, either legislative or judicial authority. A statement by a person or body not competent to create, or define the law cannot be regarded as law. [448A-D] (c) Where s. 147(b) is read as referring to 'information' as to law, what is contemplated is 'information' as to the law created by a formal source. It is law which, because it issues from a competent legislature or a competent judicial or quasi-judicial authority, influences the course of the assessment and decides any one or more of these matters which determine the assessee's tax liability [448G] 4. The Internal Audit organisation of the was set up primarily for imposing a check over the arithmetical accuracy of the computation of income and the determination of tax. The audit of income tax receipts having been entrusted to the Comptroller and Auditor-General of India, it is intended as an exercise in removing mistakes and errors in income tax records before they are submitted to the scrutiny of the Comptroller and Auditor General. The audit by the Comptroller and Auditor General is, by virtue of s. 16 of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 intended to ensure the sufficiency or otherwise of the rules and procedures prescribed for the purpose of securing an effective check on the assessment, collection and proper allocation of revenue and to ascertain whether the rules and procedure are being fully observed and L nothing more. Therefore the contents of an internal audit report cannot be construed as enjoying the status of a declaration of law binding on the Income Tax Officer. Both the internal audit party of the and the Audit report of the Comptroller and Auditor General perform essentially administrative or executive functions and cannot be attributed the power of judicial supervision over the quasi-judicial acts of income tax authorities. The statute does not contemplate such power The opinion of the audit party in regard to the application of one section of the Income Tax Act instead of another by the Income Tax officer is not law because it is rot a declaration by a body authorised to declare the law. [450B-F] 444 5. While the law may be enacted or laid down only by a. body or person with authority in that behalf, knowledge or awareness of the law may be communicated by any one. No authority is required for the purpose of communicating knowledge or awareness of the law. [450G] 6 (a) In every case the Income Tax officer must determine for himself what the effect and consequence of the law mentioned in the audit note are and whether in consequence of the law which has come to his notice he can reasonably believe that income had escaped assessment. The basis of his belief must be the law of which he has now become aware. The true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income Tax officer. [451C- 35 I.T.R. I (SC)= Sup. I SCR 10, 67 I.T.R. 11 (SC)= 1 SCR 10, 82 I.T.R. 831 followed , Income Tax officer, Croup Circle 11(1), , 109 I.T.R. 537, , 102 I.T.R. 287, over-ruled. Assistant Controller of Estate Duty Y. Nawab Sir Mir Osman Ali Khan Bahadur, 72 I.T.R, 376 referred to. 84 I.T.R 584, Commissioner of Income Tax v. 85 I.T.R 102, officer, 99 I.T.R. 148, v Com missioner of Income Tax, Kerala, 90 I.T.R 503, . 107 I.T.R. 570, officer, Companies Circle, 'A' Ward, Kanpur, 111 I.T.R. 287 not approved. (b) The error discovered by the Income Tax Officer on a. reconsideration of the same material (and nothing more) does not give the Income Tax Officer the power to reopen the assessment. [451G] (c) The submission of the that upon receipt of the audit note the Income Tax officer discovers or realises that a mistake has been committed in the original assessment and therefore the discovery of the mistake would be \"information\" within the meaning of s. 147(b) is inconsistent with the terms of the section. What the section envisages is that the Income Tax officer must first have information in his possession and then in consequence of such information he must have reason to believe that income has 'escaped assessment. The realisation that income has escaped assessment is covered by the words \"reason to believe\", and it follows from the \"information\" received by him. The information is not the realisation; the information gives birth to the realisation. [452C-D] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Tax Reference Case Nos. 1 to 4 of 1973. ", "Income Tax Reference under section 257 of Income Tax Act 1961 made by Delhi Bench 'C' in R.A. Nos. 491 to 494 of 1971-72 (I.T.A. NOS. 6992,19629- 19631 of 1967-68). ", "445 ", ", (Mrs.) , an(3 J. B. Dadachanji for the appellant. ", " and Miss for the respondent. ", "(Dr.) , and for the Intervener. ", "The Judgement of the Court was delivered by , J.-Can the view expressed by an internal audit party of on a point of law be regarded as ''information' for the purpose of initiating proceedings under section 147(b) of the Income Tax Act, 1961 ? opinion on the question has been divided among the High Courts, and accordingly the present cases have been referred by under s. 257 of the Act. ", "The assessee, Messrs. , is a society registered under the Indian Companies Act . It is a professional association of newspapers established with the principal object of promoting the welfare and interest of all newspapers. The assessee owns a building in which a conference hall and rooms are let out on rent lo its members as well as to outsiders. Certain other services are also provided to the members. The income from that source was assessed to tax all along as income from business. It was so assessed for the years 1960-61, 1961-62, 1962-63 and 1963-64 also. ", " includes an internal audit organisation whose function it is to examine income-tax records and check mistakes made therein with a view ultimately to improve the quality of assessments. In the course of auditing the income-tax records pertaining to the assessee for the assessment years 1960-61 to 1963-64, the internal audit party expressed the view that the money realised by the assessee on account of the occupation of its conference hall and rooms should not have been assessed as income from business. It said that an assessment should have been made under the head \"Income from property\". The Income Tax Officer treated the contents of the report as \"information\" in his possession for the purpose of s. 147(b) of the Income Tax Act. 1961, and reassessed the income on that basis. The Appellate Assistant Commissioner allowed the appeals filed by the assessee holding, inter alia, that in law it could not be said that the Income Tax officer had any \"information\" in his possession enabling him to take action under s. 147(b) . On appeal by the , , Delhi Bench noticed a conflict of judicial opinion on the question whether the internal audit report could be treated as \"information\" for the purpose of s. 147(b). in 11(1), Ahmedabad had held that an internal audit report could not be regarded as \"information\", while in has expressed a contrary view. Following the view adopted by , the Tribunal held that the Income Tax officer had jurisdiction to proceed under s. 147(b) . The assessee applied for a reference, and having regard to the difference between the High Courts on the point, the Tribunal has considered it expedient to refer the following question of law directly to this Court:- ", "\"Whether, on the facts and in the circumstances of the case, the Income-tax officer was legally justified in reopening the assessments under section 147 (b) for the years 1960-61, 1961-62, 1962-63 and 1963-64 on the basis of the view expressed by the Internal Audit party and received by him subsequent to the original assessment ?\" ", "Since then, the judgment of in case (supra) has, on appeal, been reversed by this Court in , Income Tax Officer, Group Circle 11(1) . It has been strenuously contended that the view taken by this Court calls for further consideration. Having regard to the dimensions of the controversy and the importance of the question, we have been persuaded to take a fresh look at the point. ", "An assessment proceeding is a quasi judicial proceeding. It acquires finality on the assessment order being made. And the finality of such an order can be disturbed only in proceeding, and within the confines provided by law. An appeal, revision and rectification are proceedings in which the finality may be questioned. The assessment may also be reopened under section 147 of the Act. It is a proceeding for assessing income which has \"escaped assessment\". Section 147 reads:- ", "\"147. If- ", "(a) the Income Tax officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income Tax officer or Lo disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or ", "(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153 , assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned.\" ", "In cases falling under section 147(b) , the expression \"information\" prescribes one of the conditions upon which a concluded assessment may be reopened under that provision. It is an indispensable ingredient which must exist before the section can be availed of. What does \"information\" in section 147(b) connote ? In v. Commissioner of Income-tax this , construing the corresponding section 34(1) (b) of the Indian Income Tax Act , 1922 held the word \"information\" to mean not only facts or factual material but to include also information as to the true and correct state of the law and, therefore, information as to relevant judicial decisions. Thereafter, in , the defined the expression \"information\" in section 147(b) of the Income-Tax Act 1961 as \"instruction or knowledge derived from an external source concerning facts or particulars, or as to law, relating to a matter bearing on the assessment.\" That definition has been reaffirmed in subsequent cases, and with it as the point of departure we shall now proceed. ", "In so far as the word \"information\" means instruction or know- ledge concerning facts or particulars, there is little difficulty. By its inherent nature, a fact has concrete existence. It influences the determination of an issue by the mere circumstance of its relevance. It requires no further authority to make it significant. Its quint essential value lies in its definitive vitality. ", "448 ", "But when \"information\" is regarded as meaning instruction or knowledge as to law the position is more complex. When we speak of \"law\", we ordinarily speak of norms or guiding principles having legal effect and legal consequences. To possess legal significance for that purpose, it must be enacted or declared by competent authority. The legal sanction vivifying it imparts to it its force and validity and binding nature. Law may be statutory law or, what is popularly described as, judge-made law. In the former case, it proceeds from enactment having its source in competent legislative authority. Judge made law emanates from a declaration or exposition of the content of a legal principle or the interpretation of a statute, and may in particular cases extend to a definition of the status of a party or the legal relationship between parties, the declaration being rendered by a competent judicial or quasi- judicial authority empowered to decide questions of law between contending parties. The declaration or exposition is ordinarily set forth in the judgment of a court or the order of a tribunal. Such declaration or exposition in itself bears the character of law. In every case, therefore, to be law it must be a creation by a formal source, either legislative or judicial authority. A statement by a person or body not competent to create or define the law cannot be regarded as law. The suggested interpretation of enacted legislation and the elaboration of legal principles in text books and journals do not enjoy the status of law. They are merely opinions and, at best, evidence in regard to the state of the law and in themselves possess no binding effect as law. The forensic submissions of professional lawyers and the seminal activities of legal academics enjoy no higher status. Perhaps the only exception is provided by the writings of publicists in international law, for in the law of nations the distinction between formal and material sources is difficult to maintain. ", "In that view, therefore, when section 147(b) of the Income Tax Act is read as referring to \"information\" as to law, what is contemplated is information as to the law created by a formal source. It is law, we must remember, which because it issues from a competent legislature or a competent judicial or quasi-judicial authority, influence the course of the assessment and decides any one or more of those matters which determine the assessee's tax liability. ", "In determining the status of an internal audit report, it is necessary to consider the nature and scope of the functions of an internal audit party. The internal audit organisation of was set up primarily for imposing a check over the arithmetical accuracy of the computation of income and the determination of tax, and now, because of the audit of income-tax receipts being entrusted to the A Comptroller and Auditor-General of India from 1960, it is intended as an exercise in removing mistakes and errors in income tax records before they are submitted to the scrutiny of the Comptroller and Auditor-General. Consequently, the nature of its work and the scope of audit have assumed a dimension ca-extensive with that of Receipt Audit. The nature and scope of Receipt Audit are defined by section 16 of the Comptroller and Auditor General's-(Duties, Powers and Conditions of Services) Act, 1971. ", "Under that section, the audit by the Comptroller and Auditor General is principally intended for the purposes of satisfying him with regard to the sufficiency of the rules and procedures prescribed for the purpose of securing an effective check on the assessment, collection and proper allocation of revenue. He is entitled to examine the accounts in order to ascertain whether the rules and procedures are being duly observed, and he is required, upon such examination, to submit a report. His powers in respect of the audit of income-tax receipts and refunds are outlined in the 's Circular No. 14/19/ 56-II dated July 28, 1960. Paragraph 2 of the Circular repeats the provisions of section 16 of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971. And paragraph 3 warns that \" should not in any way substitute itself for the revenue authorities in the performance of their statutory duties.\" Paragraph 4 declares: ", "\"4. Audit does not consider it any part of its duty to pass in review the judgment exercised or the decision taken in individual cases by officers entrusted with those duties, but it must be recognised that an examination of such cases may be an important factor in judging the effectiveness of assessment procedure .. It is however, to forming a general judgment rather than to the detection of individual errors of assessment, etc. that the audit enquiries should be directed. The detection of individual errors is an incident rather than the object of audit.\" ", "Other provisions stress that the primary function of audit in relation to assessments and refunds is the consideration whether the internal procedures are adequate and sufficient. It is not intended that the purpose of audit should go any further. Our attention has been invited to certain provisions of the Internal Audit Manual more specifically defining the functions of internal audit in . While they speak of the need to check all assessments and refunds in the light of the relevant tax laws, the orders of the Commissioners of Income Tax and the instructions of , nothing contained therein can be construed as conferring on the contents of an internal audit report the status of a declaration of law binding on the Income Tax Officer. Whether it is the internal audit party of or an audit party of the Comptroller and Auditor- General, they perform essentially administrative or executive functions and cannot be attributed the powers of judicial supervision over the quasi-judicial acts of income tax authorities. The Income Tax Act does not contemplate such power in any internal audit organisation of ; it recognises it in those authorities only which are specifically authorised to exercise adjudicatory functions. Nor does section 16 of the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971 envisage such a power for the attainment of the objectives incorporated therein. Neither statute supports the conclusion that an audit party can pronounce on the law, and that such pronouncement amounts to \"information\" within the meaning of section 147(b) of the Income Tax Act, 1961. ", "But although an audit party does not possess the power to so pronounce on the law, it nevertheless may draw the attention of the Income Tax officer to it. Law is one thing, and its communication another. If the distinction between the source of the law and the communicator of the law is carefully maintained, the confusion which often results in applying section 147(b) may be avoided. While the law may be enacted or laid down only by a person or body with authority in that behalf, the knowledge or awareness of the law may be communicated by anyone. No authority is required for the purpose. ", "In the present case, an internal audit party of expressed the view that the receipts from the occupation of the conference hall and rooms did not attract section 10 of the Act and that the assessment should have been made under section 9 . While sections 9 and 10 can be described as law, the opinion of the audit A party in regard to their application is not law. It is not a declaration by a body authorised to declare the law. That part alone of the note of an audit party which mentions the law which escaped the notice of the Income Tax officer constitutes \"information\" within the meaning of section 147(b) ; the part which embodies the opinion of the audit parts in regard to the application or interpretation of the law cannot be taken into account by the Income Tax Officer. In every case, the Income Tax officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has now come to his notice he can reasonably believe that income has escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cannot for the purpose of such belief, add to or colour the significance of such law. In short, the true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income Tax officer. ", "Now, in the case before us, the officer had, when he made the original assessment, considered the provisions of sections 9 and 10 . Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion of material already considered by him. The contends that it is open to him to do so, and on that basis to reopen the assessment under section 147(b) . Reliance is placed on , where a Bench of two learned Judges of this Court observed that a case where income had escaped assessment due to the \"oversight, inadvertence or mistake\" of the officer must fall within section 34(1) (b) of the Indian Act , 1922. It appears to us, with respect, that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on reappraising the material considered by him during the original assessment, the officer discovers that he has committed an error in consequence of which income has escaped assessment it is open to him to reopen the assessment. In our opinion, an error discovered on a reconsideration of the same material (and not more) does not give him that power. That was the view taken by this Court in (supra), and Company (supra) and . and we do not believe that the law has since taken a different course. Any observations in v Commissioner of (supra) suggesting the contrary do not, we say with respect, lay down the correct law. ", "A further submission raised by the on section 147(b) of the Act may be considered at this stage. It is urged that the expression \"information\" in section 147(b) refers to the realisation by the officer that he has committed an error when making the original assessment. It is said that, when upon receipt of the audit note the officer discovers or realizes that a mistake has been committed in the original assessment, the discovery of the mis take would be \"information\" within the meaning of section 147(b) . The submission appears to us inconsistent with the terms of section 147(b) . Plainly, the statutory provision envisages that the officer must first have information in his possession, and then in consequence of such information he must have reason to believe that income has escaped assessment. The realisation that income has escaped assessment is covered by the words \"reason to believe'. and it follows from the \"information\" received by the officer. The information is not the realisation, the information gives birth to the realisation. ", "The recent decision of this Court in (supra) may be examined now. While making an assessment on a Hindu undivided family, the officer allowed a deduction of municipal taxes in determining the annual value of two house properties occupied by the assessee. Subsequently, the officer re-opened the assessment on receipt of a report from the office of of India that on a true interpretation of s. 23(2) of the Act, 1961, the deduction of municipal taxes was not admissible in the computation of the annual value of self- occupied house properties. The assessee contended that the report did not constitute \"information\" within the meaning of section 147(b) of the Act, and accepted the plea in the view that information as to law would consist of a statement by a person, body or authority competent and authorised to pronounce upon the law and invested with the authority to do so, and that was not such competent or authorised authority. On appeal by the , a Bench of two learned Judges of this Court, although endorsing the principle enunciated by , said that the audit department was the proper machinery to scrutinise assessments made by the officer and to point out errors of law contained therein, and had erred in taking the strict view which it did. The Court rested its decision on , (supra), Commissioner of v. and officer. ", " osman Ali Khan Bahadur (supra), this Court held the opinion of as regards the correct valuation of securities for the purpose of estate duty to be \"information\" within the meaning of section 59 of the Estate Duty Act, 1953 on the basis of which the Controller of Estate Duty was held entitled to entertain a reasonable belief that property assessed to estate duty had been under- valued. The circumstance that the opinion of the was rendered in an appeal filed before it under the Estate Duty Act against the assessment made by the Assistant Controller of Estate Duty was apparently not brought to the notice of this Court when it heard (supra). The opinion of the represented its view as a quasi-judicial authority possessing jurisdiction to lay down the law. Although the did not enhance the valuation of the securities in the appellate proceeding because of the argument advanced by the appellant, nonetheless its observations amounted to information as to the law. It was not a case where the was functioning as an extrajudicial authority, performing administrative or executive functions, and not competent or authorised to pronounce upon the law. in (supra) held that the scrutiny note of constituted \"information\" within the meaning of section 147(b) of the Income Tax Act because the Comptroller and or-General of India was empowered by statute to scrutinise the proceedings of and to point out defects and mistakes which adversely affected the . considered that the view that information as to law could be gathered only from the decisions of judicial or quasi- judicial authorities was unduly restrictive. In Commissioner of Income-tax v. (supra), also regarded the note put up by as \"information\" within the meaning of section 147(b) of the Act, but it appears to have assumed, without anything more, that an audit note would fall within that expression. As regards officer (supra) the \"information\" consisted in a note of the and that the payment of interest by the assessee was in fact made to his own account in the and, therefore, in law the money paid did not vest in the Government and, consequently, the original assessment was erroneous in so far as it allowed the deduction of the interest as expenditure made by the assessee. upheld the reassessment on the finding that the note of the and had to be taken into account by the Income Tax officer, because in his executive capacity he had to be guided by the advice rendered by and he had to pay due regard to the note of the because the officers of the Department were experts empowered to examine and check upon the work of the Income Tax officers. It seems to us that the considerations on which rested its judgment are not correct. But the decision of the case can be supported on the ground that the basic information warranting the re- opening of the assessment was the fact that the payment of interest was made to the account of the assesses himself. That the money so paid did not vest in the Government was a conclusion which followed automatically upon that fact, and no controversy in law could possibly arise on that point. ", "On the considerations prevailing with us, we are of opinion that the view taken by and in the aforementioned cases is wrong and we must, with great respect, hold that this was in error in the conclusion reached by it is. (supra). ", "Our attention has been drawn to the further decision of in and the decisions of in and officer, Companies Circle, \"A\" Ward, Kanpur. merely followed its earlier judgment in Commissioner of Income Tax v. (supra) and was impressed by the same reasons substantially which persuaded and in the cases referred to above. ", "Therefore, whether considered on the basis that the. nature and scope of the functions of the internal audit organisation of are co-extensive with that of Receipt Audit or on the basis of the provisions specifically detailing its functions in the Internal Audit Manual, we hold that the opinion of an internal audit party of on a point of law cannot be regarded as \"information\" within the meaning of section 147(b) of the Income Tax Act, 1961. ", "The question referred by is answered in the negative, in favour of the assessee and against the The assessee is entitled to one set of costs in these appeals. ", "P.B.R. Appeals allowed ."], "relevant_candidates": ["0000170133", "0000319187", "0000525364", "0000721631", "0000839441", "0001027455", "0001065676", "0001146476", "0001195692", "0001401948", "0001512520", "0001886356", "0118959948"]} {"id": "0000615459", "text": ["ORDER , J. ", "1. The defendants have come up in appeal feeling aggrieved by the order dated 12-7-1996 passed by a learned Single Judge of this Court (Original Side) confirming the ex parte order of injunction and rejecting the defendants, application for vacation of the ex parte order of injunction dated 23-5-1996 in a trade mark case. ", "2. The plaintiff is engaged in the manufacture and sale of Ayurvedic medical preparations since 1930. One of the preparation manufactured and marketed by the plaintiff is under the trade mark Liv-52. It is a liver tonic prescribed for liver disorder and to protect the liver against various dysfunction, damage and hepatotoxins. It is also advised for promotion appetite and growth. The trade mark Liv. 52 is registered since 10-7-1957 in Class 5 as medical proportion for the treatment of disorders of liver. The Liv. 52 label is also registered in Class 5 as medical pharmaceutical and Ayurvedic preparation and substances since 15-2-1987. ", "3. The grievance of the plaintiff is against the use by the defendants of the trade mark LIV-T for its similar product, the defendants are also manufacturers and merchants of Homoeopathic pharmaceutical preparations. ", "4. According to the plaintiff, the mark Liv. 52 is a coined word. It has acquired tremendous goodwill in the market and is associated exclusively with the plaintiff. The defendants have come to the market in 1996 with the mala fide and fraudulent intention of utilising the goodwill earned by the plaintiff. The mark LIV-T is deceptively similar with the mark Liv. 52 of the plaintiff and is likely to mislead or confuse those who are likely to purchase such preparations in the market. The plaintiff complains of infringement of its trade mark as also passing off by the defendants. ", "5. According to the defendants they are renowned manufacturers of Homoeopathic and Ayurvedic preparations. They have a collaboration with of France from whom they have obtained the technical know-how for many of its Homoeopathic formulations. They obtained a drug licence to manufacture its LIV-T formulation in the year 1987. They also applied for registration of the trade mark LIV-T together with bits packaging carton in April, 1988. The application No. 490010 is pending with the Registrar of the Trade Marks. Ever since 1989 they have been marketing their preparations under their trade mark and figures of sales have risen from Rs. 96,843/- in the year 1988-89 to Rs. 46,68,614/- in 1995-96. ", "5.1. The defendants have also submitted that the word 'Liv' is an abbreviation of Liver, a human organ. There are a good number of medicines already in the market associated with treatment of liver ailments/disorders using the word Liv as suggestive of liver and prefixing or suffixing words or figures so as to confer a distinction on the name associated with the manufacturer or trader. It is submitted by the defendant that mark Liv-T is neither similar to nor deceptive with the plaintiff's mark Liv-52. Such medicines cannot be manufactured without a drug licence nor sold in retail without any medical prescription. It is not likely that the prospective customer would be deceived or confused. The defendants have also pleaded as their defense the delay is bringing the action by the plaintiff. ", "5.2. The defendants have filed a certificate issued by Chartered Accountant certifying the figures of sales relied on by them. The defendants have also filed search report dated 31-5-1996 which goes to show hundreds of medical/pharmaceutical preparation available in the market with trade marks, one of the components whereof is 'Liv', used in association with other words or figures. It is not necessary to reproduce entire result of search. It would suffice to mention a few trade marks which are already in the market being used by several companies. LIV as an abbreviation of Liver is a generic term or a descriptive word - its use suggesting reference of the preparation to liver. It has become public juris on which no one can claim proprietory rights or right to exclusive use. ", "5.3. Yet another plea raised by the defendants in their application seeking vacation of the ex parte order of injunction was based on non-compliance by the plaintiff with the mandatory provisions of Order 39 Rule 3 CPC demanding instantaneous vacating of the order of injunction. ", "6. The learned Single Judge has held against the defendants on all the relevant issues. This is how the defendants are in appeal. ", "7. The following questions arise for decision : ", "(1) Whether the trade mark LIV-T can be said to be deceptively similar to or confusing with the trade mark LIV-52; ", "(2) Whether the provisions of Order 39 Rule 3 are mandatory ? If so, what is the effect of non-compliance therewith ? ", "8. Before dealing with the contentions of the parties we may refer to a few statutory provisions and settled principles in the field of trade marks. In particular let us refer to what is a trade mark ? How the rights are acquired therein ? What is the effect of use of common descriptive or generic words as trade mark or as one of the constituents of the word or phrase constituting a trade mark ? How the same principles would apply and operate in the filed of medicinal and pharmaceutical preparations with which we are concerned ? What amounts to infringement of a trade mark and passing off goods as the goods of another person ? ", "9. First, we may refer to a few provisions of the Trade and Merchandise Marks Act , 1958. A trade mark is a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right to use the mark. ( Section 2(v) ). A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive ar cause confusion. ( Section 2(d) ). Name includes any abbreviation of a name. ( Section 2(k) ). A mark the use of which would be likely to deceive or cause confusion is prohibited from being registered. ( Section 11 ) Use of a trade mark which is identical with or deceptively similar to a registered trade mark amounts to infringement of trade mark. ( Section 29 ). The statutory remedy of action for infringement does not take away the Common Law remedy of an action for passing off, which in substance is an action for deceit ( Section 27 ). ", "10. . Their Lordships have set out the distinction between action for passing off and action for infringement of a trade mark. Their Lordships have then stated the law for the Courts faced with an action for infringement of a trade mark and laid down the following principles : ", "\"(1) Where the two marks are identical, no further questions arise for, then the infringement is made out; ", "(2) When the two marks are not identical, the plaintiff would have to establish that the mark used by the defendant so nearly resembles the plaintiff's registered trade mark as is likely to deceive or cause confusion and in relation to goods in respect of which it is registered; ", "(3) The onus would be on the plaintiff; ", "(4) The court has to compare that two marks - the degree of resemblance which is necessary to exist to cause deception not being capable of definition by laying down objective standard. The persons who would be deceived are of course the purchasers of the goods and it is the likelihood of their being deceived that is the subject for consideration. The purpose of the comparison is for determining whether the essential features of the plaintiff s trade mark are to be found used by the defendant. The ultimate test is whether the mark used by the defendant as a whole is deceptively similar to that of the registered mark of the plaintiff; ", "(5) The resemblance may be phonetic, visual or in the basic idea represented by the plaintiff's mark; ", "(6) The identification of the essential features of the mark is in essence a question of fact and depends on the judgment of the based on evidence led before it as regards the usage of the trade.\" ", "11. The principles deducible from . , are : ", "(i) Where the infringing trade mark is not identical with the complaining trade mark on the , but something similar to it, the test of infringement is the same as in action for passing off. ", "(ii) In a passing off action the issue is : Is the defendant selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiff's goods ? ", "(iii) In an infringement action the issue is : Is the defendant using a mark which is the same as or which is colourable imitation of the plaintiff's registered trade mark ? ", "(iv) The element of deception or confusion becomes irrelevant in the second issue (as the same is implicit, inherent or presumed to be present). ", "12. In Parle Products (P.) . Their Lightships have laid emphasis on the test of overall similarity. The broad and essential features of the two are to be considered. One need not place side by side the two to find out if there are any differences in the design, and if so, whether they are of such character as to prevent one from being mistaken for the other. The likelihood of a person usually dealing with the one being mislead to accept the other if offered to him, would be enough. Their Lordships have held that an ordinary purchaser is not gifted with the powers of observation of and cited with approval the following statement from Karly's Law of Trade Marks and Trade Names, (9th edition, paragraph 838) : ", "\"Two marks, when placed side by side, may exhibit many and various differences. yet the main idea left on the mind by both may be the same. A person acquainted with one mark, and not having the two side by side for comparison, might well be deceived, if the goods were allowed to be impressed with the second mark, into a belief that he was dealing with goods which before the same mark as that with which he was dealing with goods which bore the same mark as that with he was acquainted. Thus, for example, a mark may represent a game of football; another mark may show players in a different dress, and in very different positions, and yet the idea conveyed by each might be simply a game of football. It could be too much to expect that persons dealing with trade marked goods, and replying, as they frequently do, upon marks should be able to remember the exact details of the marks upon goods with which they are in the habit of dealing. Marks are remembered rather by general impressions or by some significant recollection of the whole. Moreover, variations in detail might well be supposed by customers to have been made by the owners of the trade mark they are already acquainted with for reasons for their own.\" ", "13. What is property in trade mark and how it is lost, we dealt with by their Lordships in .) Ltd. and another (AIR 1971 SC 898). Their Lordships have so stated the law : ", "\"The property in a trade mark exists so long as it continues to be distinctive of the goods of the registered proprietor in the eyes of the public or a section of the public. If the proprietor is not in a position to use the mark to distinguish his goods from those of others or has abandoned it or the mark has become so common in the market that it has ceased to connect him with his goods, there remains no jurisdiction in retaining it on the register. The distinctiveness of the trade mark in relation to the goods of a registered proprietor of such a trade mark may be lost in a variety of ways, e.g., by the goods not being capable of being distinguished as the goods of such a proprietor or by extensive piracy so that the marks become public juris.\" ", "14. on Trade Marks and Unfair Competition. (Third Edn. Vol. 2) states : ", "\"The name of a product or service itself - what it is - is the very antithesis of a mark. In short, a generic name of a product can never function as a trade mark to indicate origin. The terms \"generic\" and \"trade mark\" are mutually exclusive ... The concept of \"generic name\" and \"trade name\" are-mutually exclusive. Thus, if, in fact a given term is 'generic', it can never function as a mark to identify and distinguish the products of only one seller (para 12.01). ", "An abbreviation of a generic name which still conveys to the buyer the original generic connotation of the abbreviated name, is still, \"generic\". ", "\"Acronyms of generic names are often used interchangeable with the full generic name and recognised as equivalent .....\". ", "\"If the abbreviation is not recognisable as that original generic term, then the abbreviation is like a fanciful mark and protectable. (para 12.12(1)) \"As with misspelling of descriptive terms, a misspelling of a generic name which does not change the generic significance to the buyer, is still \"generic\". (para 12.12(2)) ", "15. The decision has to be left with the , as already noticed in case (supra). So is the view taken by the Supreme of judicature in v. and another ((1954) 71 RPC 23), by in ((1973) RPC 297) case, and also in ) v. (AIR 1939 Rangoon 113). ", "15.1. In Trade Mark case (supra) Lord said that the question does not cease to be a \"jury question\". He (the Judge) too, would be a potential buyer of the goods. He should, of course, be alert to the danger of allowing his own idiosyncratic knowledge or temperament to influence his decision, but the whole of his training in the practice of the law should have accustomed him to this and this should provide the safety which is the case of a jury is provided by their number. That in issue of this kind Judges are entitled to give effect to their own opinions as to the likelihood of deception or confusion and, in doing so, are not confined to the evidence of witnesses called at the trial. ", "15.2. In case (supra) said the eye of the judge is the final arbiter, but the Judge must not use, if the expression be allowed, his own eyes; he has got to look at the articles with the eyes of the public who may be expected to buy those articles, especially when, the people who buy those articles include people of all classes including many persons living in the jungle, uneducated, illiterate and who may be regarded as equivalent to the incautious, ignorant, or unwary up-country purchasers. ", "16. In Halsbury's Laws of England (4th End. Vol. 48 para 163) the subject has been dealt with as under : ", "\"163. Establishing Likelihood of deception or Confusion. - To establish a likelihood of deception or confusion in 'an action for passing off where there has been no direct misrepresentation generally requires the presence of two factual elements : ", "(1) that a name, mark or other distinctive feature used by the plaintiff has acquired a reputation among a relevant class of persons.; and (2) that members of that class will mistakenly infer from the defendant's use of a name, mark or other feature which is the same or sufficiently similar that the defendant's goods or business are from the same source or are connected. ", "While it is helpful to think of these two factual elements as two successive hurdles which the plaintiff must surmount, consideration of these two aspects cannot be completely separated from each other, as whether deception or confusion is likely is ultimately a single question of fact. ", "In arriving at the conclusion of fact as to whether deception or confusion is likely, the court will have regard to : ", "(a) the nature and extent of the reputation relied upon; ", "(b) the closeness or otherwise of the respective fields of activity in which the plaintiff and the defendant carry on business; ", "(c) the similarity of the mark, name etc. used by the defendant to that of the plaintiff; ", "(d) the manner, in which the defendant makes use of the name, mark etc., complained of and collateral factors; and ", "(e) the manner in the particular 'trade is carried on the class of persons who it is alleged is likely to be deceived and all other surrounding circumstances. ", "In assessing whether confusion or deception is likely, the court attaches importance to the question as to whether the defendant can be shown to have acted with a fraudulent intent, although a fraudulent intent is not a necessary part of the cause of action.\" ", "17. in Law of Trade Marks and Trade Names (12th Edn.), deals with proof of likelihood of deception as under (vide para 16-72 at p. 407). ", "\"The must in the common case be satisfied that the defendant's conduct is calculated to pass off other goods as those of the plaintiff, or, at least, to produce such confusion in the minds of probable customers or purchasers or other persons with whom the plaintiff has business relations as, would be likely to lead to the other goods being bought and sold for his. This is the foundation of the action.\" ", "\"The question of likelihood of deception is for the (not the witnesses) to decide \"looking at the documents and evidence before him.\" Evidence may be called on the point, but is not essential except in cases of doubt and the assistance it gives to the will be of a limited nature unless it includes evidence of actual deception.\" ", "18. Vide para 17.05 (supra) deals with \"whom the mark must be calculated to deceive\" as under : ", "\"The persons to be considered in estimating whether the resemblance between the marks in question is likely to deceive are all of those who are likely to become purchasers of the goods upon which the marks are used provided that such persons use ordinary care and intelligence. In some cases confusion, that matters to those concerned may be irrelevant in law since it does not lead the public into receiving the wrong goods or services.\" ", "19. The learned counsel for the defendant - appellant submitted that there are two very important relevant considerations which must be kept in view in deciding the case at hand. ", "19.1. Firstly, he submitted that 'LIV' is an abbreviation of liver. This abbreviation has been used in over 100 registrations as a constituent of the name under which the products relating to treatment associated with liver in the field of medicinal and pharmaceutical preparations - Homoeopathic and Ayurvedic are being marketed. The work 'LIV' is, therefore, generic and common to trade as describing the medicines associated with the treatment of liver. It has become public juris. In the filed of medicines and pharmaceuticals, it is common practice that the drugs are named either by the name of the organ which it treats or by the principal ingredients or the name of the ailment. This enables a doctor to associate a particular trade name with the organ, ingredient or ailment, thereby reducing chances of error. No trader can therefore restrain another trader from using the description of the organ, ingredients or ailment. The learned counsel has cited a host of authorities in support of his submission that a word or its abbreviation having become public juris ceases to be subject matter of proprietorship, also ceases to be source of deception ar confusion for the person likely to deal with such goods would ignore the public juris and go distinguishing the products by the prefixes and/or suffixes. ", "19.2. Secondly, he submitted that the goods, trade marks whereof are under scrutiny, are medicines. They are sold by the licensed chemists and druggists and that too under prescription by medical practitioners. It is not that airy man in the street would just reach the counter in a shop, ask for the goods by spelling out the trade mark and the salesman would hand over one or the other of the two goods which would be carried away by the unwary customer unmindful of what he intended to purchase and what he in fact got into his hands. Attention was invited to certain provisions of the Drugs and Cosmetics Rules 1945 framed under the Drugs and Cosmetics Act , 1940. No drug may be sold without a licence. A licence to sell stock, exhibit or offer for sale or distribute Homoeopathic medicines by retail or by wholesale has to be under a licence under Rule 67C. One of the conditions of the licence as provided by Clause (2) of Rule 67G is that the sale of Homeopathic medicine shall be conducted under the supervision of a person competent to deal with Homoeopathic medicines. So are the provisions for sale etc. of drugs other than Homoeopathic medicines. ", "19.3. We find merit in both the contentions so advanced. ", "20. A mark is said to be common to the trade when (1) it is in common use in the trade, or (2) when it is open to the trade to use. ", "Any symbol, word or get up commonly used by traders in connection with their trade and in respect of which no particular trader can claim an exclusive right to use may be considered common to that particular trade, or public, juris. Further words, expressions. or devices which are descriptive of particular goods are open to use by all persons engaged in the trade. Such matters which are generally of a non distinctive character may or may not be in actual use at any particular time. What is important is that the trading public has a right to use them in connection with their business. ", "21. Whether a matter is or is not common to the trade is a question of fact. A feature which is common to one trade may not be so to a different trade. Similarly a mark may continue to be trade mark in some countries and public juris in others. A mark which was common to the trade at one time may in course of time become distinctive and vice versa. A word or words used by a number of firms as part of their designation may be considered as words in common use (See : Law of Trade Mark and Passing Off, P. Narayanan, 4th Edn., para 14.2). ", "22. We would first deal with the cases generally associated with this aspect and then pass over to the medicinal cases arising in the field of medicinal and pharmaceutical preparations. ", "22.1. . . Their Lordships have cited with approval the following statement of law from In re : Harrod's Application ((1935) 52 RPC 65). ", "\"Now it is well recognised principle, that has to be taken into account in considering the possibility of confusion arising between any two trade marks, that where those two marks contain a common element; which is also contained in a number of other marks in use in the same market such a common occurrence in the market tends to cause purchasers to pay more attention to the other features of the respective marks and to distinguish between them by those features. This principle clearly requires that the marks comprising the common element shall be in fairly extensive use and as I have mentioned in use in the market in which the marks under consideration are being on will be used.\" ", "22.2 ((1994) 3 Suppl. SCC 215 = 1994(2) Arb. LR 274). wanted to restrain MICRONIX. The two trade marks were used in respect of electrical and electronic apparatus. Their Lordships held that micro-chip technology being the base of many of the products the word 'Micro' has much relevance in describing the products. It was descriptive of the micro-technology used for production of many electronic goods which daily come to the market. No one can claim monopoly over the use of the said word. Anyone producing any product with the use of micro-chip technology would be justified in using the said word as a prefix to his trade name. It was further held : ", "\"Those who are familiar with the use of electronic goods know fully and well and are not likely to be misguided or confused merely by the prefix 'micro' in the trade name. Phonetically, the words 'tel' and 'nix' being totally dissimilar are not going to create any such confusion in the mind of the users. Secondly, even the visual impression of the said two trade names is different. ", "In the first instance, the respondent's trade name '' is in black and white in slimmer letters and they are ensconced in designs of elongated triangles both above and below the said name. On the other hand, the appellant's trade name 'MICROTEL' is in thick bold letters in red colour without any design around. There is not even the remotest chance of the buyers and users being misguided or confused by the two trade names and logos. Same is the case with the carton which merely reproduces both the trade names and the logos.\" ", "22.3. In v. ((1942) LIX RPC 127), the question arising was if PEPSI-COLA was so similar with COCA-COLA as to be likely to cause confusion. It was found that COLA was not the name of the drink. It has been adopted for beverages in Canada. PEPSI and COLA joined by a hyphen so also COCA and COLA joined by a hyphen, were both written in a script form with flourishes. Both had been used simultaneously and for sometime with wares of the same kind. The judicial found that both the trade marks had a descriptive flavour to the trade. On using the word COLA, on the review of the authorities, their Lordships laid down three fundamental propositions. : ", "(i) In considering similarity comparison must be between the defendant's mark as used and a normally imperfect recollection, of the plaintiff's mark, ", "(ii) In making a comparison no regard should be paid to the fact that some part of the mark common to both marks has a descriptive flavour unless it is proved that such part is in common use in the trade. ", "(iii) If after applying the aforesaid propositions the conclusion is reached that the marks are similar it is irrelevant that the defendant had used differentiating features of get-up.\" ", "Their Lordships then concluded : ", "\"If it be viewed simply as a word mark consisting COCA and COLA joined by a hyphen, and the fact be borne in mind that COLA is a word in common use in Canada in naming beverages, it is plain that the distinctive feature in the hyphenated word is the first word 'Coca' and not \"Cola\". \"Coca\" rather than \"Cola\" is what would remain in the average memo'. It is difficult, indeed impossible, to imagine that the mark -Cola as used by the defendant, in which the distinctive feature is, for the same reason, the first word and not Cola, would lead anyone to confuse it with the registered mark of the plaintiff. The trade mark used by the defendant and the registered mark of the plaintiff are not trade marks so nearly resembling each other or so clearly suggesting the idea conveyed by each other, that the contemporaneous use of both in the same area in association with wares of the same kind would be likely to cause dealers in or users of such wares to infer that the same person assumed responsibility for their character, or quality, or for the conditions under which or the class of persons by whom they were produced or for their place of origin.\" ", "22.4. In (1954 (Vol. LXXI), RPC 136) case, had sought for cancellation of . Both were intended to be used in connection with aluminium hydroxide and also a substance considered and counted as a gel. contained syllables from aluminium and hydroxide. had reference to aluminum, get and hydroxide. Their Lordships held : ", "\"When the two words in question in this case are first looked at and regarded as made-up words, as they in fact are, their reason and virtue may elude the mind; but when it is recognised that both are intended to be used in connection with aluminium hydroxide, or a substance substantially composed of aluminum hyproxide, and also a substance which is considered or counted as a gel, it is seen that both words are intended to convey, by their/characteristics, an indication of what it is that is being sold.' It was concluded that the similarity was not great enough to be, likely to cause confusion. ", "22.5. ANCHOLA and ANCHOVETTE in 'In the matter of an Application by to Register a Trade Mark' 1916 (XXXIII) RPC 320. MICRONIC and MICROVEE in 'In the matter of 's Application to Register a Trade Mark, 1983 LXX RPC 224, were not found to be so similar as likely to deceive. ", "23. We may now proceed to notice a few cases in the filed of medicines and pharmaceuticals. ", "23.1. The leading most case in . . The question was whether DROPOVIT and PROTOVIT are deceptively similar. Vide para 12, their Lordships found that the last three letters were common, and in the uncommon part, the first two are consonants, the next is the same vowel \"O\", the next is a consonant and the fifth is again a common vowel \"O\". The combined \"effect was to produce alliteration. VIT is a well known abbreviation used in pharmaceutical trade to denote vitamin preparation. Thus, the terminal syllable \"Vit' in the two marks was both descriptive and common to the trade. Their Lordships held : ", "\"If greater regard is paid to the uncommon element in these two words, it is difficult to hold that one will be mistaken for or confused with the other. The letters 'D' and 'P' in 'DROPOVIT' and the corresponding letters 'P' and 'T' in PROTOVIT cannot possibly be slurred over in pronunciation and the words are so dissimilar that there is no reasonable probability of confusion between the words either from the visual or phonetic point of view.\" ", "23.2. In the matter of an application by for the registration of a trade mark' (1948) LXV PRC 342. SEDA-SELTZER was sought to be registered for preparations for use in making Seltzer water. It was opposed by the Proprietor of the mark ALKA-STELTZER registered for goods of same description. Both were pharmaceutical preparations. Evidence was adduced to show that the word Seltzer was having general usage in the trade and there were several trade mark using a prefix to the word Seltzer and available in the market. One of the relevant factors relied on by their Lordships for holding the word SELTZER as public juris was that both the parties were using it in specification of goods suggesting that the word is one which is descriptive and well understood. It was held : ", "\"If the fact be borne in mind that the distinctive feature of the mark ALKASELTZER is the first word Alka and not Seltzer, 'Alka' rather than SELTZER is what would remain in the average memory. It is difficult indeed impossible to imagine that the mark Seda Seltzer in which the distinctive feature for the reason in SEDA and not SELTZER would lead anyone to confuse it with Alka-Seltzer.\" (Para 347) 23.3. In v. ((1947) LXIV RPC 125), Application to register was objected to by proprietor of . Both were pharmaceutical preparations consisting of sulphadiazine. The plea as to deception or confusion was turned down. Their Lordship held : ", "\"It is quite obvious that once you get a statutory regulation of the channels of supply, is essential that the court in considering the possibilities of deception should be taken into account the extent to which such a possibility is minimised or perhaps, obliterated altogether by the statutory regulations.\" ", "\"Once you get the position that only a doctor can order sulphadiazine, that he must give a written prescription and that a chemist cannot supply it without such a prescription, you ensure that the article in question is only going to pass at that stage through the hands of skilled persons who by their training, their experience and their knowledge would be most unlikely to refer to that drug in a way which would admit of any reasonable possibility of confusion. Of course, it is impossible to exclude entirely the risk of confusion. What we are concerned with are not unlikely cases which may happen once in one hundred years but reasonable probabilities and we have to ask ourselves in relation to those facts. Is there such a risk that a doctor or a chemist or the two of them in combination by some carelessness in expression, some obscurity in handwriting, some slip of recollection or some careless mistake which you would not expect highly trained professional people to fail into will refer to the product in such a way as will lead the court to say that there is a reasonable probability of confusion.\" ", "In my opinion, there is not. It seems to me that if one is really to give weight to such a risk, it involves attributing to those highly skilled, experienced and careful people to whom the has entrusted and to whom alone the has entrusted the precautions necessary under the Poisons Act , qualities of carelessness or incompetence which, although may exist in a person here and there on occasions that, of course cannot be denied are not usually found in that class of persons. We are not concerned with hypothetical possibilities but with the ordinary practical business probabilities having regard to the circumstances of the case. (para 137). ", "23.4. In v. (AIR 1965 Punjab 17), dispute was between and . One of the relevant considerations kept in view by the DB (vide para 14) was that the goods being Schedule H drugs were obtainable only on doctor's prescription. It was further held that there was no phonetic similarity and there was no cause for confusion. ", "23.5. . , there were several medicinal oils using THENNAMARAKKUDI a geographical name as part of trade mark. It was held that word having become public juris nobody could claim any exclusive right to its use. ", "23.6. We may briefly refer to several other cases throwing light on the point. CURECHLOR and both being pharmaceutical preparation of CHLOROMPHENICAL. both being Schedule-H drugs for treatment of Asthma in both brands having the same drug in v. (1966 RPC 64), and both being toilet creams in Application (1960 RPC 229), were held not liable to cause deception or confusion. ", "24. The test for judging a case of infringement and/or passing off remains the same when applied to medicines and pharmaceuticals. However, a few additional considerations arise when dealing with cases of such drugs which cannot be sold except on prescription of a doctor and which are sold only by such persons who have special knowledge or expertise in the field. The manner in which trade in such medicines is carried on that is, they can be sold only on prescription and at authorised outlets only and the class of persons who would purchase that is, the patients advised by doctors, chemists and druggists these two facts assume significance and shall have to be kept in view by the courts. ", "25. To sum up : ", "(1) The crucial tests to be applied for judging an infringement action or a passing off action in the field of medicinal and pharmaceutical preparations remain the same as are applicable to other goods. However, in the case of preparations trading whereof is governed by statutory rules or regulations, additional considerations become relevant. They are : ", "(i) the manner in which the trade is carried on, such as sales being made only by authorised or licensed vendors who will be educated, also having special knowledge of medicines and pharmacy; ", "(ii) the class of persons who would be the purchasers, whether they would be accompanied by doctors' prescription and would in all probability remain in touch with doctor while consuming the medicine purchased. ", "The court would ask - Is there such a similarity between the two trade marks that a doctor or a chemist or the both by some carelessness in expression, some obscurity in handwriting, some slip of recollection or some careless mistake not expected of a trained professional like doctor or chemist might lead to the one being confused for the other ? Regard shall be had not to the hypothetical possibilities but to ordinary practical business probabilities as applied to the circumstances of an individual case. ", "(2) The decision on the question of likelihood of deception is to be left to the court. ", "(3) Nobody can claim exclusive right to use any word, abbreviation, or acronym which has become public juris. In the trade of drugs it is common practice to name a drug, by the name of the organ or ailment which it treats or the main ingredient of the drug. Such organ, ailment or ingredient being public juris or generic cannot be owned by anyone for use as trade mark. ", "(4) Whether such feature is public juris or geris is a question of fact. ", "(5) If the two trade marks by two competing traders use a generic word or an expression public juris common to both the trade marks it has to be seen if the customers who purchase the goods would be guided by the use of such word expression or would ignore it and give emphasis to prefixes or suffixes or words used in association therewith. The primary question to be asked is what would remain in the memory or customer ? The surrounding circumstances such as the presentation of goods, colour scheme and lettering style etc., used on the packing also assume significance. ", "26. Reverting back to the facts of the case, from the documentary evidence filed we are satisfied that here are about 100 drugs in the market using the abbreviation 'Liv' made out of the word Liver-and organ of the human body, as a constituent of names of medicinal/pharmaceutical preparations with some prefix or suffix-mostly suffixes meant for treatment of ailments or diseases associated with liver. Liv has thus become a generic term and public juris. It is descriptive in nature and common in usage. Nobody can claim' an exclusive right to the use of 'Liv' as a constituent of any trade mark. The class of customers dealing with medicines would distinguish the name of the medicines by ignoring 'Liv' and by assigning weight to the prefix or suffix so as to associate the name with the manufacturer. The possibility of deception or confusion is reduced practically to nil in view of the fact that the medicine will be sold on medical prescription and by licensed dealers well versed in the field and having knowledge of medicines. The two rival marks Liv. 52 and LJV-T contain a, common feature Liv which is not only descriptive but also public juris; a customer will tend to ignore the common feature and will pay more attention to uncommon features i.e., 52 and T. The two do not have such phonetic similarity as to make it objectionable. ", "27. The cartons of the two products respectively of the plaintiff and of the defendant have been filed with the appeal memo at pages 35 and 36 of the paper book. We have carefully examined the same. ", "27.1. The plaintiffs product Liv. 52 is in a carton with a colour scheme consisting of dark brown, dark yellow and white. On the dark brown background Liv. 52/drops 60 ml are printed in white colour. Also these very words are printed in dark brown on the white background. The other matter is printed in dark brown on yellow background. There is no device used. The size of the presentation is less than half of the size of the defendant's presentation. The carton claims it to be an Ayurvedic proprietory medicine with the ingredients set-out. ", "27.2. The packing carton including the distinctive features of the defendant appellants is entirely different. The colour scheme is light yellow/single colour scheme whereon the entire matter is printed in black. There is a device of liver also printed. LIV-T/Liver Tonic/net 180 ml also appears in print. The printed matter claims it to be a Homoeopathic medicine with composition set out. ", "27.3. The respective packing prominently contain the name of the two contesting parties written in capital letters in bold and prominent fashion. The defendant's carton clearly mentions it to be the product of /collaboration BIORN France. The carton in the middle features an artistic impression of the organ liver. ", "27.4. Each of the two cartons has unique placement of lettering and other features constituting each an original artistic work under the Copyright Act . ", "27.5. Having examined the two cartons we are clearly of the opinion that there is no possibility of one being accused of deceptively similar with the other and the likely customer mistaking one with the, other, even by recollecting faint impressions. ", "28. We are, therefore, unhesitatingly of the opinion that the proprietor of Liv. 52 was not entitled to the grant of an injunction restraining the use of LIV-T. ", "29. The learned Counsel for the plaintiff respondent cited a host of authorities which we must catalogue to be fair to him : ", "(1) . (1990 (Suppl.) SCC 727 = 1990(2) Arb. LR 399). ", "(2) . ", "(3) . ", "(4) . (AIR 1971 SC 898). ", "(5) Kaveri P. T. Durga Dutta v. . ", "(6) . ", "(7) (supra). ", "(8) . ", "(9) . (1992(1) Arb. LR 297). ", "(10) (1992(2) Arb. LR 174). ", "(11) . ", "(12) (AIR 1990 Delhi 109). ", "(13) (1989(2) Arb. LR 242). ", "(14) v. (1988 PTC 192). ", "(15) Trading as . ", "(16) v. . ", "(17) . ", "(18) . ", "We have perused the cited cases. We do not think that any of the above cited cases lays down law at variance with the view which we have taken on a review of several authorities as already stated. Sufficient it to observe that it was in the facts and circumstances of each of the above said cases that the defendant's trade name/trade mark was found to be offending and hence restrained. ", "30. case (supra) is usually cited on behalf of the defendants opposing the prayer for injunction. Therein also, their Lordships have held : ", "\"The act does not lay down any criteria for determining what is likely to deceive or cause confusion within the meaning of Section 8(c) and Section 19(1) . Therefore, every case must depend on its own particular facts, and the value of authorities lies not so much in the actual decision as in the tests applied for determining what is likely to deceive or cause confusion. ", "A trade mark is likely to deceive or cause confusion by its resemblance to another already on the Register, it is likely to do so in the course of its legitimate use in a market where the two marks are assumed to be in use by traders in that market. In considering the matter, all the circumstances of the case must be considered. ", "What degree of resemblance is necessary to deceive or cause confusion must in the nature of thing be incapable of definition a priori. For deceptive resemblance two important questions are (1) who are the persons whom the resemblance must be likely to deceive or confuse, and (2) what rules of comparison are to be adopted in judging whether such resemblance exists. ", "As to confusion, it is perhaps an appropriate description of the state of mind of a customer who on seeing a mark thinks that it differs from the mark on goods which he had previously bought, but is doubtful whether that impression is not due to imperfect recollection.\" ", "30.1. Their Lordships held and Laxmandhara likely to deceive or cause confusion because of the overall structural and phonetic similarity. The goods were such as are largely sold to illiterate or badly educated persons. Their Lordships formed an opinion that the use of the word DHARA was not of itself decisive of the matter, in the facts found in that case. ", "31. In view of our finding that the defendant's trade mark is neither deceptive with nor confusingly similar to the plaintiff's trade mark, a case for the grant of injunction is not made out, it is not necessary to deal with the plea of the defendant appellant disputing the plaintiff respondent's entitlement to the grant of ad interim injunction on the ground of delay in bringing the action. ", "32. However, we would like to deal with the plea raised on behalf of the defendant-appellant before us, just as it was raised before the learned Single Judge though unsuccessfully, demanding instantaneous vacating of the ex parte order of injunction even without going into the merits of the case solely because the plaintiff-respondent had failed to discharge its obligation mandatorily cast by the proviso to Rule 3 of Order 39 of . ", "33. The plea was set out in para 4 of the defendant's application under Order 39 Rule 4. CPC in the following words : ", "\"By virtue of the order of dated May 23, 1996 the plaintiff was required to comply with the provisions of Order 39 Rule 3 within 3 days. The plaintiff till date has deliberately failed to comply with the said order. The defendant through their attorneys have made repeated telephone calls to the office of the attorneys of the plaintiff, despite which the plaintiff till date has supplied the defendant with a complete set. The defendant's attorney M/s. and also sent a facsimile message dated May 30, 1996 to Mr. Counsel for the plaintiff, requesting Mr. to supply the complete set to enable the defendants to file an appropriate reply, but no reply has been received to the same till dated. A copy of the said letter was also delivered personally to Mr. 's office. A copy of the facsimile message is attached as Annexure-A hereto. Only an incomplete set was received by the defendant by post and that too as late as on May 31, 1996. The said set does not even have a complete index and there are only 43 pages in the same. The injunction granted in favour of the plaintiff is liable to set aside on this ground alone.\" ", "34. Looking to the scheme of Order 39, CPC it is clear that ordinarily an order of injunction may not be granted ex parte. The opposite party must be noticed and heard before an injunction may be granted. Rule 3 carves out an exception in favour of granting an injunction without notice to the opposite party where it appears that the object of granting injunction would be defeated by the delay. Conferment of this privilege on the party seeking an injunction is accompanied by an obligation cast on the court to record reasons for its opinion and an obligation cast on the applicant to comply with the requirements of Clauses (a) and (b) of the proviso. Both the provisions are mandatory. The applicant gets an injunction without notice but subject to the condition of complying with Clauses (a) and (b) above said. ", "35. We may refer to several observations made by their Lordships of in . Though the observations have been, made primarily on the obligation of the to record the reasons but in our opinion they equally apply to the obligation cast on the applicant by the proviso. The provisions are mandatory. Their Lordships have observed : ", "\"The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code. Before the proviso aforesaid was introduced, Rule 3 said \"the court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party\". The proviso was introduced to provide a condition, where court proposes to grant an injunction without giving notice of the application to the opposite party being of the opinion that the subject of granting injunction itself shall be defeated by delay. The condition so introduced is that the court \"shall record the reasons\" why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3 the procedure prescribed under the proviso has been followed. The party which invokes the jurisdiction of the court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex parte order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authorities concerned to record reasons before exercising power vested in them. In respect of some of such non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The has prescribed a particular procedure for passing of an order of injunction without notice to the other side under exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been imposed that court must record reasons before passing such order. If it is held that the compliance with the proviso aforesaid is optional and not obligatory, then the proviso by the shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of Order 39 of the Code, attracts the principle that if a statute requires a thing to be done in a particular manner it should be done in that manner or not all.\" ( ", "36. We are of the opinion that if the court is satisfied of non-compliance by the applicant with the provisions contained in the proviso then on being so satisfied the court which was persuaded to grant an ex parte ad interim injunction confiding in the applicant that having been shown indulgence by the court he would comply with the requirements of the proviso, it would simply vacate the ex parte order of injunction without expressing any opinion of the merits of the case leaving it open to the parties to have a hearing on the grant or otherwise on the order of injunction but bi-part only. The applicant would be told that by this conduct (mis-conduct to be more appropriate) he has deprived the opponent of an opportunity of having an early or urgent hearing on merits and, therefore, the ex parte order of injunction cannot be allowed to operate any more. ", "37. The appeal is allowed. The impugned order of injunction granted by the learned Single Judge is set aside. The plaintiff respondent's seeking the injunction is dismissed. Defendant-appellants' application seeking vacating of the ex parte injunction is allowed. No order as to costs. ", "38. Appeal allowed."], "relevant_candidates": ["0000103561", "0000180266", "0000267499", "0000288048", "0000330608", "0000368264", "0000417765", "0000486152", "0000487303", "0000529384", "0000863497", "0000880032", "0000990811", "0001300681", "0001389940", "0001455698", "0001566484", "0001632587", "0001676726", "0001752560", "0001883538", "0001938862", "0002044127"]} {"id": "0000648722", "text": ["PETITIONER: COMMISSIONER OF INCOME-TAX WEST BENGAL,CALCUTTA Vs. RESPONDENT: SMT. ANUSUYA DEVI DATE OF JUDGMENT: 28/11/1967 BENCH: , J.C. BENCH: , J.C. RAMASWAMI, V. CITATION: 1968 AIR 779 1968 SCR (2) 466 CITATOR INFO : F 1969 SC1917 (10) ACT: Income-tax Act , s. 66(1) , (2) and (4)--question not raised before either in appeal or application to state a case-If can direct reference on such question-If must answer question referred-Power to reframe question and call for additional statement from when to be exercised. HEADNOTE: The husband of the respondent died in October 1944. For the assessment year 1945-46, his estate was assessed to income- tax on a total income of Rs. 22,160. In January 1946, the respondent encashed 584 high denomination notes of the value of Rs. 5,84,000. There were proceedings for re-assessment of the total income of the assessee, wherein it was stated before the Income-tax Officer, on behalf of the respondent, that during the previous 30 years, her husband was giving gifts to the respondent and was also setting apart money exclusively for her and their children and, that the fund so accumulated amounting to Rs. 5,84,000 remained in a cupboard and was found after his death, and therefore, the amount was not liable to tax as the income of her husband in the previous year. The Income-tax Officer disbelieved her explanation and brought the amount of Rs. 5,84,000 to tax as tre income of the respondents' husband from an undisclosed source in the year of account 1944-45. The order was con- firmed by the Appellate Assistant Commissioner who also referred to the respondent's declaration under the High Denomination Bank Notes (Demonetisation) Ordinance that the amount was made over by the de,ceased, some time before his death, to her for her benefit and that of her 8 minor sons. The Appellate also upheld the order of the Income- tax Officer. The respondent then filed an application under s. 66 (1) to state a case to the . In that application she asserted that 494 out of the 584 notes were received from a Bank in Calcutta in realisation of a cheque drawn for Rs. 4,94,000 in September 1945 by her eldest son. The rejected the application. The , under S. 66(2) directed the to state a case on the question6n:-Whether the erred in law by basing its decision on a part of the evidence ignoring the 'statement made as regards the withdrawal of Rs. 4,94,000 by 494 pieces of Rs. 1,000 notes from the bank. The , while submitting the statement of case, pointed out that the statement in the petition under s. 66(1) was materially different from that made before the Income-tax Officer and that the was not invited to consider, at the hearing of the appeal, the truth of that statement. The , thereafter, heard the reference and decided in favour of the assessee, holding that: (1) the ignored a part of the declaration made by the respondent that 494 high denomination notes were received from the bank in Calcutta in September 1945; (2) no opportunity was given by the to the respondent to clear up the discrepancies in her statements made at the time of the disclosure of the high denomination notes and before the Income-tax Officer; and (3) it was not open to the hearing a reference under s. 66(2) to hold, contrary to the decision recorded at the time when the was directed to state the case on a question, that the question did not arise out of the order of the . 467 In appeal to this , HELD : (1) In the question which was directed to be referred it was assumed that the had before it the statement about the receipt of 494 currency notes from the bank at Calcutta. But that evidence was not before the . No such statement was made either before the Income-tax Officer, or before the Appellate Assistant Commissioner or in the appeal before the . The statement was made for the first time in the petition under s. 66(1) . Even in the application it was not suggested that the finding of the was vitiated because some relevant evidence was ignored. The order of the was not therefore open to the objection that the appeal before it was decided on a partial review of the evidence. [471 B, D-F] (2) The plea of want of opportunity was not raised before the , and therefore, the validity of the conclusion of the on the evidence could not be assailed before the on the ground that the departmental authorities had violated the basic rules of natural justice, without raising that question before the . [472 H] (3) The was in error in holding that at the hearing of a reference pursuant to an order calling upon the to state a case, the must proceed to answer the question without considering whether it arises out of the order of the or whether it is a question of law, or whether it is academic, unnecessary or irrelevant especially when by an erroneous order the directed the to state a case on a question which did not arise out of the order of the . [472 D-E] Observations contra in , 20 I.T.R. 484. overruled. (4) When the was not invited to state a case on a question of law alleged to arise out of its order, the could not direct the to state it on that question. [471 ., 24 I.T.R. 589 followed. (5) The irregularities in the judgment of the could not be cured by reframing the question referred to the and calling for a supplementary statement from the The power to reframe a question may be exercised only to clarify some obscurity in the question referred or to pinpoint the real issue between the tax payer and the department or for similar other reasons. It cannot be exercised for reopening an enquiry on questions of fact, which was closed by the order of the . Similarly, a supplementary statement could be ordered only on a question arising out of the order of the if the court is satisfied that the original statement is not sufficient to enable it to determine the question raised thereby, and, when directed the supplementary statement may be only on such material and evidence as may already 1 on record, but not included in the statement initially made. [473 , 56 I.T.R. 365 and Y. Commissioner of Excess Profits Tax, 26 I.T.R. 765, referred to. (6) The was not in- error in failing to raise and state a case on the question whether the amount of Rs. 5,84,000 was taxable in the accounting year 1944-45. That question was considered by the Incometax Officer and by the Appellate Assistant Commissioner and the explana- 468 tion of the respondent was rejected by them, and no argument was raised before the tribunal that the amount, though taxable, was not the income of the year of account 1944-45. Further, when the did not direct the to state a case on the question, it must be deemed to have, rejected the application to refer that question, and the order of rejection having become final, this cannot set it aside without an appeal by the respondent. [474 B, E, H; 475 A] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION:. Civil Appeal No. 2457 of 1966. ", "Appeal from the judgment and order dated September 13, 1963 of in Income-tax Reference No. 29 of 1959. ", ", and , for the appellant. ", ", , and , for the respon- ", "dent. ", "The Judgment of the Court was delivered by , died on October 18, 1944. For the assessment year 1945-46 his estate was assessed to tax on a total income of Rs. 22,160/- from salary and other sources. In January 1946, widow of encashed high denomination notes of the value of Rs. 5,84,000/-, and made a declaration as required by the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 that: ", "\"A sum of Rs. 5,84,000/- in notes were made over and/or directed to be made over by the declarant's deceased husband at Rajkot in April, 1944, sometime before his death for the benefit of declarant and her 8 minor sons.\" ", "In a proceeding for reassessment of the income of Amritlal for the assessment year 1945-46 the attorney who appeared on behalf of stated that \"Amritlal was from time to time, during the last 30. years of his life, giving gifts to his wife and also setting apart money exclusively for his wife and children and that the fund so accumulated which remained in a cupboard\" was found after his death. The Income-tax Officer disbelieved the explanation furnished and brought the amount of Rs. 5,84,000/- to tax as income of Amritlal in the year of account 1944-45 from an undisclosed source, and with his decision the Appellate Assistant Commissioner agreed. ", "At the hearing of the appeal before , -widow of Amritlal-filed an affidavit in which it was stated, inter alia ", "5. \"From time -to, time during our married life, late used to make presents of cash moneys to me on occasion of birthday of myself and of my sons and daughter by him and also on the occasion of his own birthday and on the anniversary of our marriage.\" ", "6. \"My husband late Sri used to tell me that these presents of cash money that he made was to make provisions for me and my minor sons and daughter and also to meet the expenses of their education and marriage in the event of his death.\" ", "8. \"The total amount of the money so paid by late Sri was Rs. 5 84,600/-. This amount was my stridhan property and was all along in my possession.\" ", "This affidavit was admitted in evidence by the , but the declined to admit an affidavit of one of the sons of Amritlal, because in their view an attempt was made to bring on record a large number of new facts which were not disclosed before the departmental authorities. The declined to accept the case set up by . Beside pointing out the discrepancies in the statements made from time to time, which rendered her case unreliable, the expressed the view that gifts made during a long period of \"20 to 30 years\" could not all have been made only in thousand rupee notes. The accordingly upheld that order bringing to tax Rs. 5,84,000/- as income from an undisclosed source in the account year 1944-45. ", "In her application for stating a case to on eleven questions set out therein asserted that in her declaration under s. 6 of the High Denomination Bank Notes (Demonetisation) Ordinance, 1946, she had given information pursuant to the queries as follows : Reasons for keeping above in No bank account. The high denomination notes rather amount is held in trust than in current account, fixed for minors and as prices deposit or securities. of securities very so for greater safety the amount is held in cash for the benifit of the defandent and in trust for the minors. ", "When and from what source did A sum of Rs. 5,84,000 in declarant come into possession notes were made over and or of bank notes now tendered. directed to be made over by the declarant's deceased husband at Rajkot in April 1944 sometime before his death for benefit of the declarant and her eight minor sons. in the latter part of August and beginning of September 1945, Rs.4,94,000/was deposited with ", "at its Bombay Branch and transferred by to their Calcutta Branch in the account of the declarant's major son who drew a self cheque for Rs. ", "4,94,000/- received payment by 494 pieces of 1,0001- ", "notes (included in the list) and made them over to the declarant. ", "The Tribunal rejected the application. at Calcutta however directed to state a case on the following question : ", "\"Whether the erred in law by basing their decision on part of the evidence ignoring the statement made as regards the withdrawal of Rs. 4,94,000/- by 494 pieces of Rs. 1,000/- notes from the bank?\" ", "In compliance with the order, the observed that the extract from the statement incorporated in the petition under s. 66(1) was materially different from the statement reproduced in the order of the Income-tax Officer and that the was not invited to consider at the hearing of the appeal the truth or otherwise of the alleged copy of the declaration incorporated in the petition under S. 66(1) and that at the hearing of the appeal the original declaration had not been produced. ", "The learned Judges of who heard the reference were apparently of the view that the question referred did not arise out of the order of the , but they felt bound by the view expressed in (1) that it is not open to the hearing a reference under s. 66(2) to hold, contrary to the decision recorded at the time when the was directed to state the case on a question, that the question did not arise out of the order of the . , J., who delivered the principal judgment of the observed that the had apparently ignored a part of the declaration made by that 494 high denomination notes out of those encashed in January 1946 were received from a Bank in Calcutta in realization of a cheque for Rs. 4,94,000/- drawn in September 1945 by her eldest son; that there was reason to doubt that statements referred to in his order by the Appellate Assistant Commissioner were made by or her attorney; and that in any event opportunity to \"clear up the discrepancies\" between the statement made at the time of the disclosure of the high denomination notes and the statements said to have been made before the Income-tax Officer or before the Appellate Assistant Commissioner ought to have been given to her. Holding that the (1) 20 I.T.R 484. ", "471 ", "order of the suffered from those infirmities the learned Judges of answered the question in the affirmative. ", "In our, judgment the order of cannot be sus- tained. The statement that out of 584 high denomination notes disclosed by 494 notes were received in realization of a cheque drawn by at Rajkot was made for the first time in a petition under s. 66(1) : it did not find place in the statement before the Income-tax Officer, nor in the grounds of objection raised before the Appellate Assistant Commissioner, and. not even in the affidavit filed before the . The was never apprised of that part of the case, and had no opportunity to test the correctness of that statement. On the statements made before the Income-tax Officer and in the affidavit there can be no doubt that it was the case of that she had encashed high denomination notes which she had received from her husband. No fault can therefore be found with the observations of the that it was \"a peculiar fact that all the money stated to have been received and found in the cupboard was all in high denomination notes and the entire amount had to be exchanged under the High Denomination Bank Notes (Demonetisation) Ordinance\". ", "In the question which was referred under the direction of , it was assumed that the had before it the statement about the receipt of 494 currency notes of Rs. 1,000/each from a Bank at Calcutta in realization of a cheque. But that evidence was not before the , and the order of the was not open to the objection that it had decided the appeal before it on a partial review of the evidence. Even in the application made to the under s. 66(1) in the large number of, questions which it was claimed arose out of the order of the it was not suggested that the finding of the was vitiated because some relevant evidence was ignored. If the refuses to state a case under sub-s. (1) of s. 66 on the ground that no question of law arises, and is not satisfied with the correctness of that decision, -nay in exercise of the power under s. 66(2) require the to state a case, and refer it. When the is not invited to state a case on a question of law alleged to arise out of its order, cannot direct the to state it on that ques- tion: see . (1). The reason of the rule is clear: cannot hold that the decision of the refusing to state a case on a particular question is incorrect if the was not asked to consider whether the question arose out of its order, and whether it was a question of law. ", "(1) 42 I.T.R. 589. ", " ", "We find it difficult to uphold the view of that if an order is passed by calling upon the to state a, case on a question which does not arise out of the order of the , is bound to advise the on that question even if the question does not arise out of the order of the . may only answer a question referred to it by the : is however not bound to answer a question merely because it is raised and referred. It is well-settled that may decline to answer a question of fact or a question of law which is purely academic, or has no bearing on the dispute between the parties or though referred by the does not arise out of its order. may also decline to answer a question arising out of the order of the , if it is unnecessary or irrelevant or is not calculated to dispose of the real issue between the tax-payer and the department. If the power of to refuse to answer questions other than those which are questions of law directly related to the dispute between the tax-payer and the department, and which when answered would determine qua that question the dispute, be granted, we fail to see any ground for restricting that power when by, an erroneous order has directed the to state a case on a question which did not arise out of the order of the . We are unable therefore to hold that at the hearing of a reference pursuant to an order calling upon the to state a case, must proceed to answer the question without considering whether it arises out of the order of the , whether it is a question of law, or whether it is academic, unnecessary or irrelevant. ", "We are of the opinion that the very basis of the question on which the was called upon to submit a statement of the case did not exist. The cannot in this case be charged with recording its decision without considering all the evidence on the record : the decision of the was clearly based on appreciation of evidence on the record before it, and was, in our view, incompetent to direct the to state the case on- the question which was directed to be, referred and dealt with by . We are also unable, to agree with the observation of that the explanation which the Assistant Commissioner says was made by was not made by her or by her attorney. No such plea was apparently raised before the . There is also no ground for believing that was not given an opportunity to \" clear up the discrepancies\" between the statements made by her or on her behalf from time to time in connection with the encashment of the high denomination notes. That plea was not raised before the , and the validity of the conclusion of the on appreciation of evidence cannot be assailed before on the ground that departmental authorities had violated the basic rules of natural justice without raising that question before the . Counsel for requested that in any event the question which has been referred by the in pursuance of the order of may be reframed and a supplementary statement may be ordered to be submitted by the . But power to reframe a question may be exercised to clarify some obscurity in the question referred, or to pinpoint the real issue between the tax- payer and the department or for similar other reasons : it cannot be exercised for reopening an enquiry on questions of fact which is closed by the order of the . Again, a supplementary statement may be ordered only on the question arising out of the order of the , and if the is satisfied that the statements are not sufficient to enable the to determine the question raised thereby, and when directed may be only on such material and evidence as may already be on the record but which has not been included in the statement initially made: (1). We do not think that the judgment of this in (2) lays down any general proposition that hearing a reference is entitled to amend or reframe a question and call for a supplementary statement so as to enable a party to lead evidence which has not been led before the or the departmental authorities. In case(2) this merely reframed the question so as to bring out the real issue between the parties. ", "Finally counsel for submitted that the was bound to state a case on the following question which was. set out in the application under s. 66 (1) : ", "6. \"Whether there is any material before the Tribunal to hold that the said sum of Rs. 5,84,000/representing the value of the encashed high denomination notes was the income of the deceased of the period of the year 1944-45 prior to his death ?\" ", "Counsel submitted that since the had failed to raise and state a case on that question, and had also in directing that a statement of case be submitted, ignored that question, in the interest of justice and for a final and satisfactory disposal of the case this may order a statement on that question. Counsel said that merely because on the findings-of (1) 56 I.T.R. 365. (2) 26 I.T. R. 765. ", "474 ", " was on April 30, 1944, possessed of a large sum of money it could not be assumed that the whole amount was earned after April 1, 1944, and was on that account taxable in its entirely in the year of assessment 1945-46. ", "The question whether the amount of-Rs. 5,84,000/- was taxable in the proceeding for assessment for the year 1945- 46 was considered by the Income-tax Officer and by the Appellate Assistant Commissioner. The Income-tax Officer observed that by the explanation submitted on behalf of before him, contrary to what was stated at the time of encashment of the high denomination notes, it was attempted \"as an afterthought, to spread over the amount over a number of years\". The contention that the amount of Rs. 5,84,000/- was not taxable in the .year of assessment 1945-46 was rejected. The Appellate Assistant Commissioner observed that on the statement made by that she had received the amount from her husband in the year of account 1944-45 and that it was unfortunate that there was ' no complete record of the \"earnings and withdrawals\" .,of Amritlal from the various businesses in which he was interested, and that in the absence of such a record all that was to be done was to examine whether the explanation was credible. He observed that \"the accounting year was very favourable for all types ..of business, and in all probability the sum represented some income earned by the deceased in some ventures which were not known to the and therefore the sum could be treated as income of Amritlal from undisclosed sources\". The observed that they were unable to believe the version of that the amount was accumulated by her husband during a long period, and since the assessee and his legal representatives had failed to prove the source of the fund, it \"must be considered as of income character\". Apparently, no argument was raised before the that the amount though taxable was not income of the year of account 1944-45 and could obviously not he referred. ", " may answer only those questions which are ,actually referred to it. New questions which have not been referred cannot be raised and answered by . If the refuses to refer a case under S. 66(1) which arises out of its order, the proper course is for the aggrieved party to move to require the under S. 66(2) to refer the same. The question whether Rs. 5,84,000/- represented income of the year of account 1944-45 was not submitted by the, to . Even if it be assumed that was moved to direct the to state a case on the sixth question which was set out in the, application filed ", "-'before the under S. 66(1) , the application must be deemed to have been rejected, and the order of rejection has become final. We have no power, without an appeal by the assessee, to set aside that order of and to direct the to state a case on that question. The appeal must therefore be allowed, and the order passed by set aside. The answer to the question will be in the negative. ", "This case discloses a very disturbing state of affairs prevailing in . It is a startling revelation that the entire record of an assessee's case both before the Income-tax Officer and the Appellate Assistant Commissioner was found missing, and has not been traced thereafter. Even if collusion be ruled out, the persons concerned in looking after the safety of the important record of proceedings of assessment cannot escape a charge of gross negligence. In the circumstances of the case. -we think there shall be no order as to costs in and in this Court. ", "Appeal allowed. ", "V.P.S. ", "476"], "relevant_candidates": ["0000127231", "0000204623", "0000963833", "0001512520"]} {"id": "0000649393", "text": ["PETITIONER: THE STATE OF MADHYA PRADESH Vs. RESPONDENT: G. C. MANDAWAR. DATE OF JUDGMENT: 13/05/1954 BENCH: , T.L. VENKATARAMA BENCH: , T.L. VENKATARAMA MAHAJAN, (CJ) MUKHERJEA, B.K. BOSE, VIVIAN BHAGWATI, NATWARLAL H. CITATION: 1954 AIR 493 1955 SCR 158 CITATOR INFO : F 1963 SC 222 (24) R 1966 SC 976 (21) F 1973 SC 231 (16) RF 1973 SC1461 (1191) R 1987 SC2117 (14) RF 1989 SC 100 (33) ACT: Constitution of India, Art. 14- Scale of dearness allowance fixed by Provincial Government-Different from the scale fixed by -Whether discriminatory-Rule 44 of Fundamental Rules-Grant of dearness allowance-Whether a right or a matter of discretion-Mandamus or any other Writ under Art. 226 of the Constitution. HEADNOTE: (Now of Madhya Pradesh) fixed in 1948 a scale of dearness allowance for its servants which though practically identical with the scale of dearness allowance fixed by in respect of salaries over Rs. 400 per mensem was less than it in respect of salaries for Rs. 400 per mensem or less. The petitioner- government servant-challenged the validity of the order of on the ground that his fundamental right under Art. 14 of the Constitution had been violated inasmuch as he had a right to be equally treated with the Servants similarly situated. Held, that under the provisions of Rule 44 of the Fundamental Rules it is a matter of discretion with the local Government whether it will grant dearness allowance to any Government servant and if so how much. It imposes no duty on the to grant it and therefore no mandamus can issue to compel the to grant it nor can any other writ or direction be issued in respect of it as there is no right in the Government servant which is capable of being protected or enforced. Article 14 does not authorise the striking down of a law of one on the ground that in contrast with a law of another on the same subject its provisions are discriminatory. Nor does it contemplate a law of the or of the dealing with similar subjects being held to be unconstitutional by a process of comparative study of the provisions of two enactments. The sources of authority for the two statutes being different, Article 14 can have no application. Therefore 'the scale of dearness allowance sanctioned by the can furnish no ground for holding that the allowance sanctioned by is repugnant to Article 14. The Government was entitled to fix the Government of India rates for one slab and ; different rates for another slab, 600 ( F.C.R. 89), and ( S.C.R. 786) distinguished. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2 of 1954. Appeal under article 132 (1) of the Constitution of India from the Judgment and Order dated the 10th September, 1953, of at Nagpur in Miscellaneous Petition No. 123 of 1953. ", ", Attorney-General for India ( and , with him) for the appellant. (, with him) for the respondent. ", " and for the Intervener (State of West Bengal). ", "1954. May 13. The Judgment of the Court was delivered by -The point for decision in this appeal is whether a Resolution of , now Madhya Pradesh, dated 16th September, 1948, fixing a -scale of dearness allowance to be paid to its servants is repugnant to article 14 of the Constitution. The circumstances under which the above Resolution came to be adopted may be briefly mentioned. Consequent on the war, there was a phenomenal rise in the price of foodstuffs and of other essential commodities, and among the persons worst hit by it were the Government servants. As a measure of relief to them, the and the s sanctioned a grant of grain allowances to them under various Resolutions passed in 1940. The scheme adopted by the Government was that its employees stationed in various Provinces received the same benefit as the respective employees. But this scheme was found to be unsuitable for employees of the Government, as the allowances granted by the s were not uniform. On 10th May, 1946, the Government appointed a Pay , hereinafter referred to as the , to enquire into and ", "-report on the conditions of service of its employees with particular reference to I 'the structure of their pay scales 'and standards of remuneration with the object of achieving a rationalisation, simplification and uniformity to the fullest degree possible.\" The , which was presided over by Sir , recommended by its report dated 3rd May, 1947, the grant of dearness allowance on a specified scale. On 27th May, 1947, appointed , hereinafter referred to as the , \"to examine the recommendations of the Central Pay and to report the extent to which and the modifications subject to which these recommendations should be accepted by , so far as servants under its rule- making control are concerned.\" By its report dated 22nd June, 1948, the recommended the grant of dearness allowance on a scale which, though practically identical with that adopted by the in respect of salaries above Rs. 400 per mensem, was less than it as regards salaries of Rs. 400 per mensem or less. These recommendations were accepted by the by its Resolution dated 16th September, 1948. This difference in the result between the two scales not unnaturally caused considerable dissatisfaction among the employees concerned, and after unsuccessful attempts to get redress on the executive side, they filed through their representative, the respondent, the present application under article 226 of the Constitution. ", "In the petition it was alleged that \"the should have uniformly adopted the rates for all its servants and the discrimination in making the two-fold slab and accepting the rates for one slab, i.e., for servants receiving salary over Rs. 400, and not accepting them in respect of the other slab, i.e., of servants drawing below Rs. 400, is highly discri- minatory,\" that \"the servant has a right to be treated equally with the servant similarly situated,\" and that \"every servant has these fundamental and natural rights and the petitioner and the members of have a right to demand from the respondent the Dearness Allowance at the rates.\" The petitioner then prayed: ", "\"That declaring that all ministerial servants are entitled to the rates of Dearness Allowance or in any case adequate Dearness Allowance, should be directed by a writ of mandamus or by any other suitable writ or direction to cancel the discriminatory rules of Dearness Allowance and adopt the rates to all servants without discrimination or in any case, to provide with adequate rates of Dearness Allowance sufficient to provide reasonable subsistence for them.\" The Government contested the petition on the grounds, firstly, that the claim for dearness allowance was not justiciable, and secondly, that the difference in the scales of dearness allowance adopted by the and by the Committee did not violate article 14. The learned Judges ( and ) held that under the rules dearness allowance was placed on the same footing as pay, and that the claim relating thereto was therefore justiciable; and that the differentiation made between the employees of and of in the matter of the grant of dearness allowance rested on \"no intelligible and reasonable basis,\" and that the Resolution dated 16th September, 1948, was therefore bad. They accordingly issued a direction to that they do reconsider the question of dearness allowance payable to the employees concerned. It is against this judgment that the present appeal has been preferred by on a certificate granted under article 132(1) of the Constitution. ", "It is argued on behalf of the appellant firstly that grant of dearness allowance is a matter ex gratia and not justiciable, and that neither a writ of mandamus nor any direction could be issued with reference thereto, and secondly, that the Resolution dated 16th September, 1948, is not hit by article 14 of the Constitution. In our opinion, both these contention are well founded On the first question, Rule 44 of the Fundamental Rules runs as follow: \"Subject to any restrictions which the Secretary of State in Council may by order impose upon the powers of the Governor-General in Council or the Governor in Council, as the case may be, and to the general rule that the amount of a compensatory allowance should be so regulated that the allowance is not on the whole a source of profit to the recipient, a Local Government may grant such allowance to any Government servant under its control and may make rules prescribing their amounts and the conditions under which they may be drawn.\" ", "Under this provision, it is a matter of discretion with the local Government whether it will grant dearness allowance and if so, how much. That being so, the prayer for mandamus is clearly misconceived, as that could be granted only when there is in the applicant a right to compel the performance of some duty cast on the opponent. Rule 44 of the Fundamental Rules confers no right on the Government servants to the grant of dearness allowance; it imposes no duty on the to grant it. It merely confers a power on the to grant compassionate allowance at its own discretion, and no mandamus can issue to compel the exercise of such a power. Nor, indeed, could any other writ or direction be issued in respect of it, as there is no right in the applicant which is capable of being protected or enforced. ", "The learned Judges of relied on certain rules which put dearness allowance on the, same footing as pay for certain purposes, and held on the authority of the decision in The Punjab Province v. pandit ) that the present claim was justiciable. was an action for recovery of arrears of salary, land it was held that under the law of this country which differed in this respect from that of England, arrears of salary were a debt due by the Government, that they could be attached in execution of a decree under section 60, Civil Procedure Code, as a debt, and that on that basis an action to recover the same was (1) F.C.R. 89. ", "604 ", "maintainable. This decision was quite recently approved by this Court in (1), wherein it was pointed out that salary was not in the nature of a bounty, and that whatever was recoverable by a Petition of Rights in England could be recovered by action in this country. This question may therefore now be taken to be settled beyond controversy. But we are not concerned in the present proceedings with any debt payable by the . The claim is not to recover arrears of dearness allowance which had accrued due under the rules in force relating thereto. The claim now put forward its to compel the to grant dearness allowance at a particular rate, and under Rule 44 of the Fundamental Rules, such a claim is a matter of grace and not a matter of right. In England, no petition of right will lie in respect of such a claim. The position is thus stated in Halsbury's Laws of England, Volume IX, page 688, Note (s) @: ", "\" It is erroneous to suppose that a petition of right will lie for matters which are of grace and not of right. [De (Baron) v. R.(2).]\" ", "That is also the law in this country where an action is a substitute for a petition of right. In the result, we must hold that the matters raised in the petition are not justiciable. ", "Mr. , the learned counsel for the respondent, did not dispute the correctness of this position. But he argued that when once the Government passed 'a Resolution fixing a scale of allowance under Rule 44, that would be law as defined in article 13(3)(a) of the Constitution, and if that law infringed, article 14 , it could be declared void. That is a contention which is clearly open to him, and the question therefore that falls to be decided is whether the Resolution dated 26th September, 1948, is bad as infringing article 14. ", "Now, the scheme which has been adopted in the impugned Resolution is firstly that dearness allowance if; to I be paid to the employees on a scale graded according to pay, different rates being adopted for different slabs and there being a progressive reduction (1) [1954] S.C.R. 786. ", "(2) 13 Q. B- 364 Ex. Ch. at P- 387- ", "605 ", "of the rate from the lowest to the highest category. No contention is raised that fixing different rates of dearness allowance for different slabs of pay is obnoxious to article ", "14. Secondly, within any given slab, the scheme places all the employees in the same position, except that in the lowest ranks a slightly higher rate is fixed for residents in the cities of Nagpur and Jubbulpore, which again has not been attacked as discriminatory. These being the features of the scheme, there can be no room for the contention that it has made any discrimination. ", "Mr. does, not contend that there is anything in the scheme or in the Resolution adopting it, which bring s it within the prohibition enacted in article 14. His contention is that the whose recommendations were accepted by the adopted the rates suggested in the report of the as regards servants who drew a monthly salary of. over Rs. 400, but when they came to those employees who drew a monthly salary of Rs. 400 or less, they discarded the rates fixed by the , and, instead, adopted different and lower rates, and that this was discrimination hit by article 14. In other words, the impugned Resolution, though valid in itself as not infringing article 14 , becomes void under that provision when it is taken in conjunction with the report of the . We do not find anything in article 14 which supports this somewhat startling contention. Under the Constitution, the and the are distinct entities, each having its own executive and , with their powers well-defined. Article 12 defines \"the \" as including the and the of each of the . Article 13(2) enacts that the shall not make any laws taking away, or abridging the rights conferred by Part III, and article 14 enacts that, \"The shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.\" ", "On these provisions, the position is that when a law is impugned under article 13 , what the has to decide is whether that law contravenes any of the provisions of Part III. If it-decides that it does, it has to declare it void; if it decides that it does not, it has to uphold it. The power of the to declare a law void under article 13 has to be exercised with reference to the specific legislation which is impugned. It is conceivable that when the same enacts two different laws but in substance they form one legislation, it might be open to the to disregard the form and treat them as one law and strike it down, if in their conjunction they result in discrimination. But such a course is not open where, as here, the two laws sought to be read in conjunction are by different s and by different s. Article 14 does not authorise the striking down of a law of one on the ground that in contrast with a law of another on the same subject its provisions are discriminatory. Nor does it contemplate a law of the or of the dealing with similar subjects being held to be unconstitutional by a process of comparative study of the provisions of the two enactments. The sources of authority for the two statutes being different, article 14 can have no application. The result, therefore, is that the scale of dearness allowance recommended by the and sanctioned by can furnish no ground for holding that the scale of dearness allowance recommended by the and adopted by the appellant is repugnant to article 14. It may no doubt ,sound hard that servants doing work of a similar kind and working, it may be, even in the same place, should receive different allowances; but the rights of the parties have to be decided on legal considerations, and it is impossible to hold that the Resolution in question is bad under article 14. It was argued on behalf of the appellant that the assumption underlying the argument of the respondent -with reference to article 14 that the had adopted the Report of the in part and rejected it in part was itself without foundation. In the view we have taken on the applicability of article 14 , this question has no practical importance; but as all the materials have been placed before us, we may briefly express our opinion thereon. In paragraph 80 of the Report the observed that while the based its scale on the cost of living index, they themselves adopted the current level of prices as the basis for fixation of dearness allowance. In paragraph 83 they further observed that in fixing the scale on the basis of the cost of living index the element of pay had also been taken into account, but that as they had revised the scale of basic pay, they were not including it in fixing the dearness allowance. In paragraph 31, they observed that unlike the they were taking into consideration the financial resources of the in fixing the scale. Thus, the approached the problem from a different angle, and applied different principles in fixing the scale of dearness allowance; and if the two schemes produced the same results at some stages, that was due to coincidence and not to adoption of the report of the by the '. Mr. also referred us to two Resolutions of the appellant dated 4th January, 195 1, and 6th October, 195 1, adopting the scale fixed by the in respect of certain other categories. That has no bearing on the question whether the whose recommendations were approved by the had adopted in part the Report of the so as to result in discrimination. The facts stated above show that the went into the matter independently, and viewed the question from a different standpoint; and in formulating the scheme which they did, they did not adopt the Report of the , though they derived considerable assistance from it. In the result, this appeal must be allowed and the petition of the respondent dismissed; but in the circumstances, there will be no order as to costs either here or in the below. ", "Appeal allowed. ", "608"], "relevant_candidates": ["0000480602", "0000551443"]} {"id": "0000660982", "text": ["JUDGMENT , Acting C.J. ", "1. This is a Reference under Section 51 of the Indian Income Tax Act, 1918. The section is in the following terms: ", "1. If, in the course of any assessment under this Act or any proceeding in connection therewith other than a proceeding under Chapter VII, a question has arisen with reference to the interpretation of any of the provisions of this Act or of any rule there under, may, either on its own motion or on reference from any Revenue Officer subordinate to it, draw up a statement of the case, and refer it, with its own opinion thereon, to , and shall so refer any such question on the application of the assessee unless it is satisfied that the application is frivolous or that a reference is unnecessary. ", "2. If is not satisfied that the statements contained in the case are sufficient to enable it to determine the questions raised thereby, the may refer the case back to by which it was stated, to make such additions thereto, or alterations therein as the may direst in that behalf. ", "3. upon the hearing of any sash case shall decide the questions raised thereby, and shall deliver its judgment thereon containing the grounds on which such decision is founded, and shall send to by which the case was stated, a copy of such judgment under the seal of the and the signature of the Registrar; and shall dispose of the case accordingly, or if the case arose on reference from any Revenue Officer subordinate to it, shall forward a copy of such judgment to such Officer who shall dispose of the case conformably to such judgment. ", "4. Where a reference is made to on the application of an assessee, costs shall be in the discretion of the . ", "2. The assessment which has led up to the present proceeding was made by the Collector of Tipperah, in whose jurisdiction the assessee resides, within the meaning of the definition of the term \"Collector\" contained in Sub-section (5) of Section 2 of the Indian income Tax Act . The Maharaja of Tipperah, who was the assessee, fork exception to the assessment as contrary to law, but the Collector refused to entertain the petition of objections on the ground that it could be heard by way of appeal from his order only by the Commissioner of . The matter was then taken before the Commissioner, who heard the objections, allowed them in part, and modified the order of the Collector on the 19th December 1919. The assesses was not satisfied with his partial success and applied to , as , to revise the order of the Commissioner. On the 3rd May 1920 made this reference under Section 51 , with a view to obtain a ruling of on the several questions specified. When the matter was notified to be set down for disposal here, the Advocate-General appeared and mentioned to the , that, as it was understood that the assessee had arranged to be represented at the hearing by , he thought it fair to state in advance that objection would be taken that s were not entitled to be heard on this Reference. When the case was actually taken up for disposal, Mr. intimated to the that he had been instructed to appear on behalf of the assessee and, consequently, the objection which the Advocate-General had intended to take could not, in the circumstances, arise. It transpired, however, that Mr. was instructed by Mr. , who was a Solicitor of this but had not bean enrolled as a . As an Attorney can appear in this only on the Original Side and in appeals from the Original Side, the question arose whether this was a matter in which Counsel could be instructed by an Attorney or only by a , Consequently, the point which the Advocate-General had previously brought to the notice of the did require consideration, though in a somewhat different form. We accordingly heard the Advocate General and Mr. and held that, as this reference by arose out of a proceeding for assessment of income tax within the jurisdiction of the Collector of Tipperah and the Commissioner of , s were entitled to be heard and Counsel could be properly instructed only by a . When this was intimated to Mr. he stated, that Mr. and Mr. Birendra Chandra , two of the s of this , were ready to enter appearance on behalf of the assesses. After Mr. had thus been properly instructed, the matter was heard on the merits. We shall now state the grounds for our ruling on the question of procedure and then give our decision on the points raised in the Reference. ", "3. For the solution of the question of procedure, it is necessary to investigate the nature of the proceeding under Section 51 of the Indian Income Tax Act. It is plain that the nature of the proceeding cannot be affected by coincidental circumstances, such as the plane from or the channel through which the Reference has been made; it is immaterial whether, at the time of the Reference, was at Calcutta, Darjeeling or Dacca, or, whether caused the order of Reference to be transmitted to the Government Solicitor who placed the matter in the hands of the Registrar on the Original Side or to the Legal Remembrance who entrusted the matter to the charge of the Government Pleader on the Appellate Side. The nature of the proceeding is a matter of substance and not of form. ", "4. The scheme of the Indian Income Tax Act , 1918, for the determination of controverter questions of liability to assessment is fairly simple. The assessment is made, in the first instance, under Sub-section (1) of Section 18 , by the Collector, who, under Clause (5) of Section 2 , it in relation to an assesses carrying on business, the Collector of the place where the principal place of business of such assesses is situate, and in relation to any other assessee, the Collector of the place where such assessee resides. When the assessment has been so made, the assessee may, under Sub-section (1) of Section 21 , apply by petition to the Commissioner for relief against the order of the Collector. Under Section 22 , the Commissioner may pass such order as he thinks fit, by way of confirmation, reduction, enhancement or cancellation of the assessment. Section 23 next authorises to call for the record of any assessment proceeding which has been taken by any Officer subordinate to it and to make such enquiry and to pass such orders thereon as it thinks fit. Section 51 empowers to make a reference to either on it own motion (that is, when it has seizin of the proceeding under Section 23 ) or on reference from any Revenue Officer subordinate to it (that is, while the proceeding is still before the Collector or the Commissioner). Section 51 further provides that shall make such reference on the application of the assessee, unless it is satisfied that the application is frivolous or that a reference is unnecessary. Section 52 finally lays down that no suit Shall be brought in to set aside or modify any assessment made under the Act. It is clear from the provisions analysed that the jurisdiction of is taken away, as the assessee would have been entitled, but for Section 52 , to institute a suit in to contest the validity of the assessment made by the Collector. In lieu of such remedy, the assessee is permitted to take up the matter successively to the Commissioner and . is thus constituted the which finally re-places , subject to the reservation that there may be a reference to on questions of interpretation of the provisions of the Act or of the rules made there under. When such a reference has been made, the opinion pronounced by cannot be ignored, because it is made obligatory on concerned to decide the case conformably to the judgment of . What then is the nature of the jurisdiction which exercises on such reference? Under the Letters Patent, the civil jurisdiction of is classified as original (ordinary and extraordinary), and appellate (from the Original Side or from the in the Provinces.) The Letters Patent makes no mention of revision (as distinguished from superintendence) of the proceedings of subordinate or of references from them. This does not justify the inference that the has no power to revise proceedings or to hear references. It was pointed out by Sir , C.J., in v. 21 W.R. 263 : 13 B.L.R. 103, that the power of revision is in essence an aspect of appellate jurisdiction. The substance of the matter is, as explained in Secretary of for . 9 Ind. Cas. 183 : 18 C.L.J. 90 : 15 C.W.N. 848, that the error of the inferior ia rectified by a superior ; this characteristically common to both the proceedings technically sailed appeal and revision. On the other hand, a reference is made by a subordinate to a superior with a view to obtain its opinion upon a controverter question of law and thereby avoid possible error. An Appellate thus exists for the correction of an error of a subordinate by way of appeal or revision, as also for the evidence of error by a subordinate by pronouncing an opinion upon the question of law referred in advance. The essence of the matter thus is that when a hears a reference, it really performs the functions of a of Appeal quite as much as it undoubtedly does when it hears an application for revision. The index of the relation of superior and inferior is furnished by the fast that the judgment pronounced on the reference by is binding upon the referring authority. There is thus no escape from the conclusion that exercises, not an original but an appellate jurisdiction when it entertains a reference under Section 51 of the Indian Income Tax Act, 1918. In this connection, we must not overlook Section 106(2) of the Government of India Act, 1915, which provides that has not and may not exercise any original jurisdiction in any matter concerning the revenue or concerning any Act ordered or done in the collection thereof, according to the usage and practice of the country, or the law for the time being in force; this substantially reproduces the provision in Section 8 of 21 Geo. III, C. 70, which debarred the Supreme from exercising jurisdiction in any matter concerning the revenue. Now, , under the Indian Income Tax Act , 1918, exercises jurisdiction over the entire , as well in the Town of Calcutta, as beyond the limits of the town. A distinction may thus legitimately be drawn between a reference made in connection with an assessment on a person who resides in the town of Calcutta (that is, within the limits of the ordinary original civil jurisdiction of this ) and a reference made in connection with an assessment on a person who resides beyond the limits of the ordinary original civil jurisdiction of his . In the former class of cases, the procedure should be assimilated with that applicable to appeals front the Original Side; in the latter class of cases, the procedure should be that applicable to appeals from the in the Provinces under Clause 16 of the Letters Patent. This distinction, as is well-known, has a historical origin and cannot be ignored. It was faintly contended, however, by Mr, , as a last resort, that the jurisdiction which exercises under Section 51 of the Indian Income Tax Act is neither original nor appellate, but a new kind of jurisdiction not contemplated by the Letters Patent. It is sufficient to say that this argument, though not lacking the merit of novelty, could not be of any practical assistance to Mr. s for, while an Attorney can appear only on the Original Side, a is excluded only from the Original Side. Consequently, if the jurisdiction were neither original nor appellate, an Attorney would not be, but a would be, competent to appear. In the present case, the assessment under Section 18 was made by the Collector of Tipperah and the order under Section 22 (which ultimately came under examination by ) was made by the Commissioner of . Consequently, the procedure which governs appeals from the in the Provinces, within the meaning of Clause 16 of the Letters Patent, is applicable to the reference made by under Section 51 , and on such reference s, but not Attorneys, are entitled to appear. This view is not opposed to the procedure followed in the case of for India in Council 64 Ind. Cas. 107 : 32 C.L.J. 421; there no such question was raised, possibly for the reason that as the Company, though owning property situated at Naogaon in Assam, had its registered office at 1, Clive Street, Calcutta, and might, consequently, be deemed, under Section 2(5) , to have its principal place of business within the town of Calcutta ; the assessment was, in fact, made by the Collector of Income Tax, Calcutta. Our conclusion is also not affected by the decision in Barristers and , In re 4 Ind. Cas. 297 : 13 C.W.N. 605 : 10 Cr. L.J. 553, that s had no right of audience in in cases sent up for trial under Act XIV of 1908. No reasons were recorded in that case; but it was plain that the jurisdiction to be exercised by the was original criminal jurisdiction. Nor is any assistance to be derived from the decision in 41 Ind. Cas. 313 : 25 C.L.J. 401 : 21 C.W.N. 654 : 18 Cr. L.J. 793, where the was equally divided in opinion upon the question, whether s were entitled to be heard in a proceeding under Section 195 of the Criminal Procedure Code instituted in a Small Cause and brought up before in the exercise of its revisional jurisdiction or of its power of superintendence. Nor is any light thrown on the point before us by the practice in connection with references under Section 57 of the Indian Stamp Act, 1899; such references, so far as we have been able to discover, have hitherto been made mostly in connection with matters arising within the limits of the ordinary original civil jurisdiction of this , and, in such cases claim to a right of audience would not ordinarily be put forward by s; but in one instance at least, Reference under Stamp Act , 1899 (6), where the question arose in relation to from the , Counsel appeared with a at the hearing. ", "5. On the other hand, have always appeared in references from subordinate for disciplinary action against Pleaders and under the Legal Practitioners Act , 1879, as also in proceedings instituted in this for disciplinary action against . ", "6. We have next to consider the questions referred by to this Court for decision: ", "(1) Is selami or premium agricultural income within the meaning of Section 2(1) of the Indian Income Tax Act, 1918, when charged. ", "(a) for the settlement of waste lands or abandoned holdings? ", "(b)for recognition of a transfer of a holding from one tenant to another? ", "(2) Are illegal abwabs, such as uttarayan agricultural income within the meaning of that section? ", "7. Section 4 provides that agricultural income shall not be chargeable to income tax. Section 2(1)(a) lays down that agricultural income\" means any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue or subject to a local rate assessed and collected by officers of Government as such, The assessee contends that the incomes mentioned in the two questions are exempt from assessment as they constitute agricultural income within the meaning of the definition just given. We are of opinion that this contention is well founded in respect of selami paid for the settlement of waste lands or abandoned holdings, but cannot be supported in respect of selami paid for recognition of a transfer of a holding from one tenant to another. When a new tenancy is created in respect of unoccupied waste lands or lands which had been abandoned by previous tenants, the premium represents essentially the capitalised value of a portion of the rent. We are not unmindful that in the case of v. 13 W.R. 307 : 5 B.L.R. App.1 it was ruled that money payable by a lessee in consideration of a leaee granted, whether called nuzzur or selami, cannot be looked upon as rent, but is simply a debt due upon a contract and is recoverable by a suit in a final on the money-bond executed in that behalf by the tenant in favour of his landlord. It is not necessary to hold that such Salami is rent within the meaning of the definition given in the Bengal Tenancy Act or the Transfer of Property Act . The expression used in the Indian Income Tax Act is \"rent or revenue,\" and this is obviously wider than rent, as defined in the Bengal Tenancy Act or the Transfer of Property Act . The term \"revenue\" is defined in as follows: \"The return, yield, or profit of any lands, property, or other important source of income; that which comes in to one as a return from property or possessions, specially of an extensive kind; income from any source, specially of an extensive kind; income from any source, but specially when large and not directly earned.\" There can be little doubt that when a lease is granted, the amount fixed for periodical payment is not independent of the amount paid in a lump sum as premium. The capitalized value of the sum periodically payable, taken along with the premium, constitute in the aggregate the consideration for the grant; so that the larger the one element, the smaller the other. From this point of view, we must hold that the premium paid for the settlement of waste lands or abandoned holdings may reasonably be regarded as \"rent or revenue\" derived from land, within the meaning of that expression as used in the definition of \"agricultural income\" in Section 2(1)(a) . ", "8. But these considerations do not apply to the selami or premium paid for recognition of a transfer of a holding from one tenant to another. When the transfer is recognized, the original tenancy continues and there is no new demise. The sum paid as selami or premium in such circumstances is obviously not rent in any sense of the term; nor can it be deemed the return, yield, or profit of any land. The money is paid by the transferee to the landlord to purchase peace, so that he may not contest the validity of the transfer. We cannot hold that money so levied by the landlord can be comprised within the scope of the definition of agricultural income. ", "9. Finally, the contention that illegal abuabs, such as uttarayan, constitute agricultural income, is manifestly untenable. The item uttarayan is a voluntary payment, made by tenants, at one piece per rupee of their rent, for expenses of the Bastu Puja on the Uttarayan Sanskranti day (the list day of the Bengali month Pous) and for distribution of sweets and oranges to all servants of the estate, officers and local residents. The item consequently is an illegal exaction and cannot, on the widest interpretation which may be placed on the phrase \"rent or revenue,\" be possibly included therein; nor can it be said to be derived, that is, drawn, or obtained from the land. We do net feel pressed by the contention that, if the income from Uttarayan be treated as assessable, there would be an indirect recognition of it by ; For, all that was have to consider is, whether it is exempted from assessment, because, if not exempted, it must be taxed as included in the all comprehensive expression in Section 3(1) , namely, \"income from whatever source it is derived.\" Reference may in this connection be made to the decision in v (1886) 56 L.J.Q.B. 251 : 18 Q.B.D. 276 : 56 L.T. 208 : 35 W.R. 276. In that case, it was ruled that persons receiving profits from betting systematically carried on by them throughout the year as book makers on case courses, were chargeable with income tax on such profits, even though bets were considered null and void and not recoverable in law. , J., said that even an illegal vocation would be taxable on its income, as \"if a man were to make a systematic business of receiving stolen goods, and to do nothing else and were thereby to make a profit of, say \u00a32000 a year, would be quite right in assessing him if it were in fact his vocation.\" We hold, accordingly, that income derived from illegal abwabi, such as uttarayan, is not exempt from assessment. ", "10. The result is that Q. (1)(a) is answered in the affirmative, Q. (1)(b) and Q. 2 in the negative. ", "11. There will be no order for costs under Section 51(1) , as the Reference has been decided in part in favour of the assessee. ", "12. Let a copy of this judgment be forwarded to under Section 51(3) . ", "Fletcher, J. ", "13. I agree. ", "Walmsley, J. ", "14. I agree."], "relevant_candidates": ["0000351763", "0001423213", "0001860307"]} {"id": "0000667950", "text": [", J. ", "1. Six persons stood their trial before the Sessions Judge, Sangli, the appellant on the charge of murder of one bai and the rest under Section 201 read with Section 34, Penal Code , for causing the evidence of the said murder to disappear by burning her dead body in survey No. 178 of village arandi. Of these persons, the appellant, hereinafter referred to as accused 1 and accused 2 and 4 are the sons of accused 5, and accused 6 is his wife. The victim was the widow of one , the nephew of accused 5, who after the death of her husband was living with accused 5. The relations between the deceased and the accused were, it was said, normal on the whole, but during the past year before the alleged murder, accused 5 was insisting upon the deceased either transferring a piece of land standing in her name in favour of the accused, or adopting one of his sons. The motive for the crime alleged by the prosecution was the refusal of the accused to follow either of the two courses and the consequent fear of the accused that would at any time convey it to one of her other relations ", "2. On December 9, 1965 at about 9 a.m., started for her field to pluck ground-nut creepers. On her way, she passed through the field of and took along with her his daughter , aged about 12 years, to help her in her work. While and were pulling out the groundnut creepers from the ground, accused 1 came there armed with an axe. He asked what her plan was for that day and at once struck her on her neck with the axe he had with him. collapsed under that blow and frightened at what she had seen, ran to her father in the neighbouring field and told him of what she had seen. At that very juncture, also heard the screams of Sundarabai, the wife of accused 2, who also had seen the incident from a field nearby, where she was working at that time. On going to the place where Sundarabai was, the two of them went to the place where was lying dead. then went to the field of one nearby & told that accused 1 had killed . After a little while, the two of them saw accused 2 and 4 carrying away the dead body of in a blanket to survey No. 178 belonging to the accused. Seeing this, they went to , the brother of , who also was working in his field After telling of what had happened, and went towards the village to inform the and to find out where the village Police was went towards the accused's field and saw the dead body of having been set on fire and all the accused standing nearby, accused I being still with the axe. When went near the place, accused I threatened him with evil consequences if he proceeded to where the body was being burnt. In the meantime, some relations of came there and seeing them the accused went away. Those relations then dragged out the body of from the burning pyre. thereafter contacted the Police . Both of them went to Tasgaon Police Station about 22 miles away from the village reaching there at about sunset. The delay in reaching the police station was due to the fact that they had to wait for some conveyance to travel that distance, such a conveyance becoming available to them only in the afternoon. At the police station gave the first information report. Thereafter the police investigation commenced, during the course of which the police took charge of the charred body of the deceased and sent it for post-mortem. Dr. who performed the post-mortem, found, apart from the burn injuries, two external injuries on the body : ", "(1) a wound 2\" x 1/2\" upto the vertebral column upon the right of the neck just below the right ear, and (2) a wound 21/2\" x 1/2\" with the fracture of the vertebral column. An internal examination by him revealed that part of the occipital bone under injury No. 1 had been fractured and the : seventh cervical vertebra had been completely fractured. The brain as also several other parts of the body were either completely or partially burnt. According to the post-mortem notes made by Dr. , death was probably caused by the aforesaid two injuries on the neck resulting in the failure of the heart and respiration. On the dead body were found a silver waste band and a silver necklace chain. The police noticed signs of trampling and blood over the groundnut creepers where and had been working at the time of the assault. ", "3. At the trial, the prosecution examined claiming her to be an eye-witness of the assault by accused 1, her father to whom she had narrated the assault almost immediately and and . , the wife of accused 2, was also examined, but was declared a hostile witness since her evidence was contrary to her statement before the police. There were other witnesses also to prove their having dragged out the dead body of from the burning pyre. Besides Dr. , the prosecution examined Dr. , the Civil Surgeon at Sangli. ", "4. The accused denied any knowledge of the incident. The defence of accused I was that he was at the time working in his field where his wife's sister came and told him that had a snake bite. When he came near his house he found several persons there, who had already placed her dead body on a pyre and set fire to it. After some time , the relations of the deceased, came there armed with axe and sticks and dragged the burnt body of out of the pyre. His case was that 's evidence was false and that she was made to give such evidence on account of enmity between and the accused. That enmity arose because had often resorted to stealing the crops from the accused's lands. The other witnesses also had given false evidence against them owing to similar hostility existing between them for one reason or the other. ", "5. The Trial Judge accepted the fact that had given the first information report but refused to rely on it as had not specifically stated therein the fact of his having been told by that accused I had struck the deceased with an axe. He declined to accept the prosecution story of motive on the ground that accused 5 had earlier executed , which belied the allegation that he had insisted upon conveying her land to him or his sons or adopting one of his sons. He also declined to accept the prosecution case that the death of was homicidal as Dr. was not able to say in the condition in which the dead body was brought to him whether the two external injuries he had seen were ante-mortem or post-mortem. He doubted the claim of as an eye-witness on the ground that it was improbable that she had gone with to her field to assist her. He also found the version of unacceptable that had come running to him or that she had told him of the assault on by accused 1 with an axe or his having then gone to and telling him of what he had been told by , or the two of them having gone to and then to the Kotwal and the Police Patil and telling them that accused I had killed with an axe and accused 2 and 4 had brought the body to their field for burning it. On these findings the Trial Judge acquitted all the accused. ", "6. The approach of the Trial Judge was that because, according to him, the prosecution had failed to establish an adequate motive, the evidence of and her claim of being an eye-witness could not be accepted as true or even probable. His reasoning for such a conclusion was that it was unlikely that she had accompanied to her field to assist her in plucking out the ground-nut creepers when her father himself was busy doing similar work in his own field. He refused to accept 's evidence on the ground that being the village Ramoshi and bound as such to help the police whenever a crime took place in the village, he was likely to be under the police influence and that it was result of such influence and at the instance of the police that he and gave their evidence. Having come to the conclusion that the prosecution had not been able to prove that 's death was homicidal, the learned Judge even felt inclined to accept the defence story of snakebite and of the belief amongst village people that in such cases the victim's body should be cremated immediately and that too in the vicinity of the residence of such victim. That was how the learned Judge explained away the two circumstances : (1) the body having been sought to be done away with without informing the deceased's relations living in the village, and (2) cremating it right in front of the accused's residence. On these premises, the Trial Judge held the prosecution case not proved and acquitted all the six accused. The Trial Judge ended his judgment in the following words : ", "To summarise, therefore, that is a case where there does not seem to be any plausible motive for criminal behavior on the part of any of the accused, and if the evidence of phuba is excluded, as I have done, there is no direct evidence. The expert medical opinion is of no assistance for coming to the conclusion that the death in this case is homicidal. The report of shows that the origin of the blood which was detected at the spot shown by accused No. 1 and on his dhoti and on the axe could not be determined. Then, what we are left with are the suspicious circumstances that the dead body appears to have been hurriedly burnt at an unusual place with ornaments on its person and the accused are falsely denying their connection with the cremation. But then in view of the medical opinion and the opinion of and the absence of motive, all that could be said is that these circumstances would create a suspicion; but suspicion, is no evidence. That being the position, all the accused are entitled to an acquittal, and I order accordingly. ", "7. On appeal by the State, reversed the order of acquittal and convicted accused 1 under Section 302 and sentenced him to life imprisonment. also convicted accused 4, 5 and 6 under Section 201 of the Penal Code, but confirmed the order of acquittal so far as accused 2 and 3 were concerned. In doing so accepted as the eye-witness and found her evidence corroborated by the evidence of , the wife of accused 2, of her having drawn 's attention by her screams to the place where was attacked and was lying and , thereupon, having gone to that place and found having been already dead with axe injuries. next accepted 's version of having been informed of the assault by and , his having then gone near the accused's house, his having seen all the accused near the burning pyre and accused 1 having threatened him with the axe, which he still had in his hand, if he proceeded any further to the place where the body was being burnt. declined to accept the defence theory of the snake-bite or the alleged belief that in such cases the dead body had to be cremated immediately and at the residence of the victim or any of the two external injuries deposed by Dr. having been caused as a result of the dead body having subsequently been rolled out of the burning pyre. reached these conclusions after elaborately reappraising the entire evidence on record, which on an appeal against acquittal, it is well settled, it could, and recording correctly the principles laid down in the decisions of this Court guiding its approach in appeals against acquittal, and also examined the reasons given by the Trial Judge for non-acceptance of the prosecution evidence. ", "8. These principles are that under the CrPC has full power to review at large the evidence upon which an order of acquittal has been passed by and to reach the conclusion that upon that evidence the order of acquittal should be reversed. However, in exercising that power and before reaching its conclusion upon facts, should give proper weight and consideration to such matters, as the views of the trial judge as to the credibility of the witnesses, the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial, the right of the accused to the benefit of any doubt and the slowness of the appellate court in disturbing a finding of fact arrived at by the judge who had the advantage of seeing the witnesses. ( 61 I.A. 398). These principles were approved of and repeated in . Counsel for the appellant was not able to point out to us anything in 's judgment which would suggest that it had not followed these principles while reappraising the evidence and disagreeing with the findings of fact given by the Trial Judge. ", "9. A perusal of the judgment of the Trial Judge shows that his reluctance to accept the evidence of and her father principally stemmed from (1) his disbelief of the evidence on motive and its adequacy, (2) his view as to the improbability of having gone to the deceased's field to help the deceased, and (3) the omission by in the first information report of the fact that accused I had struck the deceased with an axe. ", "10. It is true that the deceased had been living with accused 5 and his family. It is also true that until the incident in question there had been no open rupture between the deceased and accused 5 and his family members. That fact, however, does not preclude the possibility of accused 5 having asked the deceased to settle the land held by her upon his sons, or in the alternative to adopt any one of them. Either of these two courses would have ensured the land coming to his family and not being disposed of in favour of any outsider. The evidence of in this regard showed that the deceased had refused to comply with such requests by accused 5, which were so persistant that deceased had complained to him about them. That the deceased would so complain to would not in any manner be improbable as was her brother and residing in this very village. It is difficult also to conceive that , in collusion with any of the witnesses in this case, could have invented such a story so as to afford to the prosecution evidence of motive. There is no indication in the evidence of any previous hostility between and the accused which could impel either to invest such evidence himself or to permit himself to be manoeuvered by any other person into investing such a story for a motive. The refusal by the deceased to comply with the request persistently made and the possibility of the land going out of the reach of the accused could not also be regarded as an inadequate motive. Numerous crimes have been perpetrated for reasons less adequate than the possible loss of land. ", "11. Assuming that the prosecution evidence was not sufficient or cogent enough for a motive to be spelt out of it, the fact that the prosecution was not able to discover such an impelling motive would not reflect upon the credibility of a witness, proved to be a reliable eye-witness. Was such an eye-witness ? The answer to that question must depend upon the intrinsic value of her evidence, the absence of any possibility of her having been put up as an eye-witness or tutored by any interested person or persons and the circumstances in which the incident in question had occurred, and not upon whether the prosecution was able or not to prove an adequate motive. What the Trial Judge, however, did was precisely the opposite, that is to say, he looked at her evidence not from the point of view of whether it was intrinsically genuine, but with distrust because the evidence with respect to motive was, according to him, not satisfactory. As regards the evidence relating to motive, one of the facts which weighed with him for discarding that evidence was the fact that accused 5 had earlier executed in respect of the deceased's land. We do not know what its terms were, for, it was not produced during the trial. But the very title of the document would seem to suggest that accused 5 by that document acknowledged the title of the deceased to the land for her life time. The document did not acknowledge her absolute title and her right to alienate the land during her life time or to make a bequest of it by a testamentary instrument in favour of any one. The accused must, therefore, know that would not have ensured the land to them so or prevented its alienation or transfer by . Its execution by accused 5, therefore, could not render 's evidence as to motive untrue. ", "12. As stated earlier, the fact that the prosecution in a given case has been able to discover a sufficient motive or not cannot weigh against the testimony of any eye-witness. Evidence as to motive would, no doubt, go a long way in cases wholly dependent on circumstantial evidence. Such evidence would form one of the links in the chain of circumstantial evidence in such a case. But that would not be so in cases where there are eye-witnesses of credibility, though even in such case if a motive is properly proved such proof would strengthen the prosecution case and fortify the court in its ultimate conclusion. But that does not mean that if a motive is not established the evidence of any eye-witness is rendered untrustworthy. ", "13. It is true that there was only a solitary eye-witness in the present case and that too a girl of twelve years of age, to whom the Trial Judge did not consider it expedient to give the oath, since according to him, she was not mature enough to understand the significance of the oath. At the same time there was, in the circumstances of the case, scarcely any possibility of there only because she had gone to the field with the deceased at the latter's request to her father for assistance. But there was nothing improbable in having done so, for, that was expected of her by the deceased was to pluck out from the ground groundnut creepers and collect them into heaps. The Trial Judge, however, thought this to be unlikely for he said that she had gone with her father to his field precisely for this kind of work, and therefore was not likely to leave him alone to do the entire work. There the Trial Judge was in error, for, 's evidence showed that the ground-nut creepers had already been taken out from the ground and collected in small heaps at various places and the work for which he had gone to the field that morning was to collect all these heaps at one place so as to enable him to pluck out the ground-nuts from the creepers so collected. Being teenager, perhaps would not have been of much assistance to him for that kind of work, and therefore, it was not unlikely that would, when requested by the deceased, allow to go with her for assisting in taking out the creepers from the ground. Such assistance to neighbours by children of cultivators is not uncommon in villages. There was, therefore, nothing improbable in being in the deceased's field when the incident in question occurred. ", "14. Once it was shown that was present in that field, the only question for consideration would be whether her evidence was acceptable or not Her evidence in that connection had to be scrutinised with care and caution as she was not only a teenager but the only witness claimed to be an eye-witness. The Trial Judge conceded that her evidence was not marred by any material discrepancy or contradiction. But the absence of any such infirmity according to him, was not enough, and brought in the omission of to specifically mention the fact of accused 1 having struck the deceased with an axe in the first information report as a reason for discarding 's evidence. That omission by , however, could not land any infirmity no 's testimoney, for, it was not as if had narrated the incident to and relying on such narration had lodged the first information report so that an omission by him may be said to raise a possibility that might not have told him that she had seen accused 1 striking the deceased The evidence was that she first fled to in the neighbouring field and told him of what had happened, whereupon first went to and both of them then found out and told him about the incident. The omission by , even if it can be regarded as an omission, cannot thus have any bearing on the question of 's credibility as an eye-witness. ", "15. A perusal of the FIR lodged by would seem to show that the omission was not such as would justify the claim of being an eye-witness being discarded. Before it can be held as an omission, it has to be borne in mind that according to the FIR, had been informed by and that his sister \"was killed by her cousin father-in-law and husband's brother\" and that they were about to set fire to her dead body near their residence in their field. According to 's evidence, when he went to that field on getting that information, he found that the dead body of was already set on fire. The pyre was surrounded by all the accused and accused 1 at that time was having an axe with which he threatened against corning near the dead body. It was only when the Pawars, according to the evidence, came there armed with axes and other weapons that the accused retired from the place and the body could be dragged out from the burning pyre. In this background, must have felt that all the accused were concerned in the killing of his sister and that was why they were anxious to dispose of the dead body so that it may not indicate the manner and the cause of her death. The FIR, however, did assert that \"the cousin father-in-law and husband's brother\" were responsible for killing, though it is true it did not mention specifically that accused I had struck with an axe. might not have made specific mention of it probably because he must have thought all the accused responsible for the death of from the manner in which they had surrounded the body for disposing it off quickly. If viewed from this point of view, the omission to mention expressly that accused 1 had struck the deceased with an axe cannot be said to have much importance. ", "16. 's evidence, if accepted, would corroborate 's claim of being an eye-witness in two respects, (a) her having gone to the field with and being with her when the incident occured, and (b) her having fled to in a frightened state immediately after the incident and telling him of the assault by accused 1 with an axe. The accused challenged 's veracity on the ground that he had been stealing their crops and on being scolded therefore by them being hostile to them. But barring their bare allegation, no proof whatsoever was adduced to show any such hostility between and the accused. But the Trial Judge disbelieved on the ground that being the village Ramoshi, he would be under the police influence. That could hardly be a justifiable ground for discarding his testimony. accepted his evidence and also that of Tatoba and no reason had been made out to warrant any disagreement on our part with that conclusion. ", "17. Once, therefore, was found to be an acceptable witness, his evidence corroborated in a large measure 's evidence, for, it was only on her going to him and telling him as to what had happened that the entire chain of subsequent events took place, his going first to , then the two of them going to , going to the accused's field and and contacting other villagers, the Kotwal and , and finally, rescuing the body from the pyre by the other relations of the deceased. As regards 's testimony, it has to be observed that quoted it almost verbatim in its judgment to demonstrate that it was natural and free from any material blemish in spite of a long, and what called, a gruelling cross-examination. ", "18. Counsel took us through the medical evidence, including the post-mortem notes by Dr. to show that his opinion on the two external injuries was not indefinite, but was on the contrary equivocal and shaky on the question whether the injuries were ante-mortem or post-mortem. But that was because the body was at many places charred and several internal organs were burnt or roasted. But the absence of a definite medical opinion on that question could not be very material once Phuba's evidence was found acceptable. There would, therefore, be no difficulty in coming to the conclusion that the deceased had died as a result of her having been struck with a weapon such as an axe. The defence story that she died as a result of a snake-bite and that her body had to be immediately burnt because of a belief or practice to that effect in the village has only to be stated for its rejection. No such evidence, was available. There could be no doubt, as has said, that it was set on fire so that the body would not show how the deceased had died. The two circumstances, viz., that it was sought to be disposed off without informing her parents and her brother all of them were in the village and without carrying it to the village cremation ground were tell-tale circumstances showing the desperate anxiety on the part of the accused to dispose it off as quickly as possible. ", "19. The principle upon which this in appeals of this type would act is that once it is found that the High has applied the correct principles in setting aside an order of acquittal, this would not ordinarily interfere with the High 's order of conviction in an appeal against acquittal or enter into the evidence to ascertain for itself whether the High was right in its view of the evidence. Only such examination of the evidence would ordinarily be necessary as needed to see that the High approached the question properly and applied the principles correctly. ( 1962 Supp. 1 S.C.R. 104. Counsel, nonetheless, was at pains to take us through the major part of the evidence. After having gone through that evidence, we find no reason to come to the conclusion that the High made any error in applying the principles which should guide it in an appeal against acquittal, nor has any reason been established which would make us disagree with its findings on the appreciation of evidence. ", "20. That being the position, the appeal must fail and has in the result to be dismissed."], "relevant_candidates": ["0000040914", "0000535796", "0000802260"]} {"id": "0000682224", "text": ["PETITIONER: & Vs. RESPONDENT: UNION OF INDIA & ORS. DATE OF JUDGMENT13/03/1990 BENCH: , T.K. (J) BENCH: , , SABYASACHI (CJ) SHETTY, K.J. (J) AHMADI, A.M. (J) SAIKIA, K.N. (J) CITATION: 1990 AIR 1277 1990 SCR (1) 909 1990 SCC (3) 223 JT 1990 (1) 462 1990 SCALE (1)475 CITATOR INFO : RF 1991 SC 363 (12) R 1991 SC 724 (13) RF 1991 SC1902 (16) RF 1992 SC1033 (38) ACT: Essential Commodities Act , 1955: (3-C)-- of India Notifications dated November 28, 1974 and July 11, 1975--Fixing prices of levy sugar on zonal basis--Validity of--Whether legislative in character--Whether amenable to judicial review--Determination of price--Requirement of 'having regard to' Clauses (a) to (d)--Whether mandatory--Power delegated to fix different prices for different areas, different factories or different kinds of sugar--Nature and scope of-Whether matter of economic poli- cy--Whether falls within purview of court. Judicial review of State action--Legislative, executive or quasijudicial--Nature and scope of. Administrative law--Delegation of legislative power Judicial review--Scope of--s not to interfere with matters of economic policy. Administrative Law--Administrative action--Principles of natural justice--Observance of--Even if rule of audi alteram partem not attracted reasonableness and fair play in action must be observed. Constitution of India, Article 14: Principle of equality must govern every State action. HEADNOTE: Clause (f) of sub-s. (2) of the Essential Commodities Act , 1955 empowers to require any person dealing in any essential commodity to sell the whole or specified part of such commodity to it or or to a nominee of such . Sub-section (3) provides for payment to such a seller (a) the price agreed upon consistently with the controlled price, if any, fixed under the section; (b) the price calculated with reference to the controlled price, if any; and (c) where none of these applies, a price calculated at 910 the market rate prevailing in the locality at the date of the sale. Subsection (3-A) deals with orders made with a view to controlling the rise in prices or preventing the hoarding of any foodstuff in any locality and determination of price for payment to the seller, notwithstanding anything contained in sub-s.(3). Sub-section (3-C) lays down that where any producer is required by an order made with refer- ence to cl. (f) of sub-s. (2) to sell any kind of sugar and either no notification in respect of such sugar has been issued under sub-s. (3-A) or any such notification having been issued has ceased to remain in force by efflux of time, then notwithstanding anything contained in sub-s. (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as may, by order, determine having regard to (a) the minimum price, if any, fixed for sugarcane by under this section; (b) the manufac- turing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar. The by notifications dated 28th November, 1974 and 11th July, 1975 issued in exercise of the power under sub-s. (3-C) of of the Act fixed the prices of levy sugar for 1974-75 production. The petitioners, owners of sugar mills operating in the State of Uttar Pradesh in areas classified for the purpose of determining the price of levy sugar as West and East zones, challenged the validity of the said orders on the grounds that they were ultra vires the Act and violative of their fundamental rights as the prices of levy sugar had been determined arbitrarily with reference to the average cost profiles of factories grouped together in zones without regard to their individual capacity and cost characteris- tics; that although the has the discretion to fix different prices for different areas or for different facto- ries, or for different kinds of sugar, such wide discretion has to be reasonably exercised, that the words 'having regard to' occurring in sub-s. (3-C) is a mandatory require- ment demanding strict compliance with clauses (a) to (d); that the ingredients of the said clauses should, therefore, have been examined with reference to each producer as a condition precedent to the determination of the price of sugar; that had not applied its mind to the relevant questions to which they were expected to have regard to in terms of thesub-section; and that the expression 'determine' used in sub-section (3-C) indicates 911 that the order to which that expression referred to is quasi-judicial amenable to judicial review. For the inter- veners it was contended that the cost incurred by units having lower crushing capacity should be neutralised by giving them an incremental levy price. For the respondents it was contended that the division of the country into zones and the method adopted by the in fixing price of levy sugar was fully supported by the recommendations of various expert bodies and and was upheld in Agri- cultural & Industrial Society Ltd. Etc. v. ., 2 SCR 882 and Sugar Mills\". , 2 SCR 860; that the cost of manufacturing sugar depends not only on recovery from the sugarcane, duration of crushing season, crushing capacity of the plant, the sugarcane price paid and the capital em- ployed, but also to a considerable extent on the conditions of the plant and machinery, quality of management, invest- ment policy, relations with cane growers and labour, finan- cial reputation etc.; that to group together factories having a high cost profile and to determine a price special- ly applicable to them is to put a premium on incompetence, if not mismanagement; and that the orders determining the price of sugar in terms of sub-section (3-C) were of general application and, therefore, legislative in character and the omission, if any, to consider the peculiar problems of individual producers was not a ground of judicial review. Dismissing the writ petitions, the HELD: 1. The notifications dated 28th November, 1974 and 11th July, 1975 issued under sub-s. (3-C) of of the Essential Commodities Act, 1955 are intra rites the Act. There is no merit in the challenge. [950F, 918F-G] 2.1 Sub-section (3-C) is attracted whenever any producer is required to sell sugar by an order made with reference to sub-s. (2)(f) and no notification has been issued under sub-s. (3-A) or any such notification, having been issued, has ceased to be in force. It operates notwithstanding anything contained in sub-s. (3). This means the compensa- tion payable to the seller in the circumstances attracting sub-s. (3-C) is not the price postulated in sub-s. (3). Nor is it the price mentioned under sub-s. (3-A), for that sub- section cannot be in operation when sub-s. (3-C) is attract- ed. What is payable under sub-s. (3-C) is an amount calcu- lated with reference to the price of sugar. [930F-H] 912 , 2 SCR 860, referred to. 2.2 The price of sugar is determined by having regard to the factors mentioned in cls. (a) to (d) of sub-s. (3-C). This is done with reference to the industry as a whole by a process of costing in respect of a representative cross-section of manufacturing units and not with reference to any individual seller. The order notifying the price is required by sub-ss. (5) and (6), to be notified in official gazette and laid before both Houses of Parliament. [931H, 932A, 936G, 931G] 3. The words 'having regard to' in sub-s. (3-C) are the legislative instruction for the general guidance of the in determining the price of sugar. They are not strictly mandatory, but in essence directory. They do not mean that the cannot, after taking into account the matters mentioned in cls. (a) to (d), consider any other matter which may be relevant. The expression is not \"having regard only to\" but \"having regard to\". These words are not a fetter, they are not words of limitation. [936D, 934E] ., 1 SCR 463; . 1958 A.C. 41; ., 3 SCR 439; . v. , 1 SCR 956; State of Karnata- ka & Anr. etc. v. ., 1 SCR 641; State of U. P. & Ors. v. , 4 SCC 59 and v. , 1 All E.R. 660, referred to. 4.1 In considering the reasonableness of the order made by the ' in exercise of its power under sub-s. (3-C) the will not strictly scrutinise the extent to which matters mentioned in cls. (a) to (d), or any other matters have been taken into account by the in making its estimate of the price. There is sufficient com- pliance with the sub-section if the has addressed its mind to the factors which it may reasonably consider to be relevant, and has come to a conclusion, which any reason- able person placed in the position of the , would have come to. [936E-F] 4.2 In the instant case, the material brought to the notice of the does not support the arguments at the bar that had not applied its mind to the relevant questions to which 913 they were expected to have regard in terms of the statute. Nor any data has been furnished to show that the prices determined by the would have been different had the ingredients of cls. (a) to (d) of the sub-section been examined with reference to each individual producer instead of a representative cross section of manufacturing units. [947A, 934D] 5.1 Judicial decisions are made according to law while administrative decisions emanate from administrative policy. Quasi-judicial decisions are also administrative decisions emanating from adjudication but they are subject to some measure of judicial procedure, such as rules of natural justice. Legislative orders can be distinguished from rest of orders by reference to the principle that the former are of general application. They are made formally by publica- tion and for general guidance with reference to which indi- vidual decisions are taken in particular situations, [937C, 939E, 938A-B] ' Administrative Law, 6th ed., 47, referred to. 5.2 An instruction may be treated as legislative even when it is not issued formally but by circular or a letter or the like. What matters is the substance and not the form, or the name. Where an authority to whom power is delegated is entitled to sub-delegate his power, be it legislative, executive or judicial, then such authority may also give instructions to his delegates and these instructions may be regarded as legislative. However, a judicial tribunal cannot delegate its functions except when it is authorised to do so expressly or by necessary implication. [938B-C, D-E] Griffith and Street.' Principles of Administrative Law, 5th ed., p. 65 and v. , 2 Q.B. 18 at 40, referred to. 5.3 What distinguishes legislation from adjudication is that the former affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely touched by it; while adjudication operates con- cretely upon individuals in their individual capacity. [938F] Davis.' Administrative Law Text, 3rd ed., p. 123, referred to. 5.4 A statutory instrument such as a rule, order or regulation emanates from the exercise of delegated legisla- tive power which is a 914 part of the administrative process resembling enactment of law by the legislature. It affects the rights of individuals in the abstract. [939D-E, C] Bernard Schwartz.' Administrative Law p. 144 and Davis: Administrative Law Text, p. 123, referred to. 5.5 When the function is treated as legislative, a party affected by the order has no right to notice and bearing unless, of course, the statute so requires. It is neverthe- less imperative that the action of the authority should be inspired by reason. It being of general application engulf- ing a wide sweep of powers, applicable to all persons and situations of a broadly identifiable class, the legislative order may not be vulnerable to challenge merely by reasons of its omission to take into account individual peculiari- ties and differences amongst those failing within the class. [939F, 943C, 939F-G] & Anr. v. ., 2 SCC 720 and , 1 SCR 956, referred to. 5.6 The orders in the instant case, duly published in the official gazettes notifying the prices determined for sugar of various grades and produced in various zones, and applicable without exception to all producers failing within well defined groups can be legitimately characterised as legislative. No rule of natural justice is applicable to any such order. [941H, 942A, 943B- ., 2 SCC 720; ., 4 SCC 59; v. , 1 SCR 956; etc. v. , 3 SCR 293 and v. Lord Hailsham of St. Marylebone & Ors., 3 All ER 1019, referred to. 6. It is with reference to predetermined prices of sugar that subsection (3-C) postulates the calculation of the amount payable to each producer who has sold sugar in compliance with an order made with reference to cl. (f) of sub-s. (2). The calculation of such amount is in contradis- tinction to the determination of price of sugar, a non- legislative act. The individual orders to that effect being administrative orders rounded on the mechanics of price fixation, they must be left to the better instructed judg- ment of the executive, and in regard to them the principle of audi alteram partem is not applicable- All that is 915 required is reasonableness and fair play which are in es- sence emanations from the doctrine of natural justice. [942B, 936F-G, 943A- , 2 SCR 860; A.K. Kraipak & Ors. etc. v. ., 1 SCR 457 and ., 4 SCC 59, referred to. ., 2 SCC 720, distinguished. 7.1 Any Act of the repository of power, whether legisla- tive or administrative or quasi-judicial, is open to chal- lenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it. [946C] ., 2 SCR 348; ., 4 SCC 59; , 1 SCR 956; ., 1 SCC 248; ., 3 SCR 1014; ., 1 SCC 722; , 1 SCC 305; The Barium Chemicals Ltd. & Ant. v. , Supp. SCR 311; v. , 411 US 356, 36 L. Ed. 2d 318; Kruse v. , 2 Q.B. 91; v. , 1 K.B. 223; v. , AC 426; v. , AC 735; Commissioners of Customs JUDGMENT: ", "ney v. Forde, [1971] AC 632 (H.L.); v. Commis- sioners of Works, [1943] 2 All ER 560; Col- lieries Ltd. v. Lloyd George, [1943] 2 All E.R. 546; v. Glasgow Corporation, [1899] AC 470; . City of Glasgow, [1936] AC 32; v. Commissioner, [1935] 297 US 129; v. , [1945-46] 72 CLR 37; v. , [1931] 34 WALR 18; v. City of Ottawa, [1964] 45 DLR 2d 211; Re Burns & Township of Haldimand, [1966] 52 DLR 2d 1014 and v. , 265 US 315, referred to. ", "916 ", "7.2 Where a question of law is at issue, the may determine the rightness of the decision of the authority on its own independent judgment. If the decision does not agree with that which the considers to be the right one, the finding of law by the authority is liable to be upset. Where it is a finding of fact, the examines only the reason- ableness of the findings. When the finding is found to be rational and reasonably based on evidence then judicial review is exhausted even though the finding may not neces- sarily be what the would have come to as a trier of fact. [944C-E] 7.3 Whether an order is characterised as legislative or administrative or quasi-judicial, or, whether it is a deter- mination of law or fact, the judgment of the expert body, entrusted with power, is generally treated as final and the judicial function is exhausted when it is found to have warrant in the record and a rational basis in law. [944E-F] v. United States, [1939] 307 U.S. 125, 83 L. Ed. 147; v. , [1948] 1 K.B. 223 and Chief Constable of v. , [1982] 1 WLR 1155 at 1160, referred to. ", "7.4 The orders, in the instant case, are undoubtedly based on an exhaustive study by experts. They are fully supported by the recommendations of in 1969 and 1973 and are not shown to be either discriminatory or unreasonable or arbitrary or ultra vires. [946D-E] 8.1 Judicial review is not concerned with matters of economic policy. Nor is price fixation within the province of the s. The does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The does not supplant the \"feel of the experts\" by its own views. When the legis- lature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness and are consistent with the laws of the land. [948F, 949B, 948F-G] M/s. Gupta Sugar Works v. State of U.P. & Ors., [1987] Supp. SCC 476; v. , 311 US 570-577, 85 L. ed. 358 and v. United States of America, 2.92 US 282-290, 78 L.ed 1260, referred to. ", "917 ", "8.2 In the instant case, sufficient power has been delegated to by sub-s. (3-C) to formulate and implement its policy decisions by means of statutory instruments and executive orders. Classification of sugar factories with due regard to geographical-cum-agro economic considerations for the purpose of determining the price of sugar in terms of the said sub-section is a policy decision based on exhaustive expert conclusions. Such clas- sification, cannot, in the absence of evidence to the con- trary, be characterised as arbitrary or unreasonable or not rounded on an intelligible differentia having a rational nexus with the object sought to be achieved by sub-section (3-C). [949E, 947B- , 2 SCR 860 and v. The State of TamilNadu & Ors., 3 SCR 222, applied. v. , 320 US 591; ., 2 SCC 720 and ., Supp. SCC 476, referred to. ", "8.3 If the petitioners nevertheless incur losses, such losses need not necessarily have arisen by reason of geo- graphical zoning, but for reasons totally unconnected with it, such as the condition of the plant and machinery, quali- ty of management, investment policy, labour relations, etc. These are matters on which they have not furnished data. The decisions in , [1973] 2 SCR 882 and , [1973] 2 SCR 860 do not require reconsideration. [947D-E, 950E-F] 8.4 Whether the policy should be altered to divide the sugar industry into groups of units with similar cost char- acteristics with particular reference to recovery from sugarcane, duration of the crushing season, size and age of units and capital cost per tonne of output, without regard to their location, is a matter for to decide. What is best for the sugar industry and in what manner the policy should be formulated and implemented, bearing in mind the fundamental object of the statute, is again a matter for decision exclusively within the province of . Such matters do not ordinarily attract the power of judicial review. [949E-G] Secretary of , etc. v. etc., 338 US 615-617, 94 L. ed. 391-392, referred to. ", "918 ", "& ORIGINAL JURISDICTION: Writ Petition Nos. 464 & 617 of 1977. ", "(Under Article 32 of the Constitution of India. ) , Attorney General, , , , , , , , , , , Ms. , Mrs. , , , and for the appearing par- ties. ", ", , , and for the intervener in W.P. No. 464/77. The Judgment of the Court was delivered by , J. The petitioners are owners of sugar mills operating in the State of Uttar Pradesh in areas classified for the purpose of determining the price of levy sugar as West and East Zones. They challenge the validity of notifi- cations dated 28th November, 1974 and 11th July, 1975 (Annexures 8 & 9) issued by in exer- cise of its power under sub-section (3-C) of of the Essential Commodities Act, 1955 (Act No. 10 of 1955), as amended to date (hereinafter referred to as the 'Act'). The petitioners do not, and cannot, challenge the validity of the subsection by reason of Article 3 lB of the Constitution of India. By the impugned orders, fixed the prices of levy sugar for 1974-75 production. For the purpose of determining the prices, the country is divid- ed into 16 zones, and the prices fixed for various grades of sugar in terms of (3-C) of the Act vary from ' zone to zone. Prices are determined with reference to the geographical-cum-agro-economic considerations and the aver- age cost profiles of factories located in their respective zones. Each State for this purpose constitutes a separate zone, while U.P. is divided into 3 zones and Bihar into 2 zones. The petitioners contend that these orders are ultra vires the Act and violative of their fundamental fights as the prices of levy sugar have been determined arbitrarily with reference to the average cost profiles of factories grouped together in zones without regard to their individual capacity and cost characteristics. Such prices do not re- flect the actual manufacturing cost of sugar incurred by producers like the petitioners or secure to them reasonable returns on the capital employed by them. Geographical zon- ing, for the purpose of price fixation, they point out, is an irrational' and discriminatory system of (1) Published in the Gazette of India Extraordinary dated 28.11.1974 and 11.7.1975. ", "919 ", "averaging wide cost disparities amongst producers of widely varying capacity. Cost of manufacture of sugar depends on a number of factors, such as recoveries from the sugarcanes, duration of the crushing season, crushing capacity of the plant, the sugarcane price paid and the capital employed in the manufacture of sugar. These factors vary from factory to factory. Fixation of the levy sugar prices on zonal basis without regard to these divergent factors and the compara- tive cost profiles gives the owners of bigger factories an undue advantage over producers like the petitioners whose factories are comparatively of lower crushing capacity and whose manufacturing cost is consequently higher. Clubbing of the petitioners' factories with dissimilar factories in the same zones for the purpose of price fixation is discrimina- tory, arbitrary and unreasonable. The petitioners point out that the system of geographical zoning for the purpose of price determination has been severely criticised by (The \"\") who have strongly recommended the division of the sugar industry into groups of units having similar cost characteristics with particular reference to recovery, duration, size and age of the unit and capital cost per tonne of output, and irrespec- tive of their location. ", "The respondents, on the other hand, contend that the classification of sugar industry into 15 zones (now 16) was upheld by a Constitution Bench of this Court in etc. v. ., [1973] 2 SCR 882. The conten- tion that the zonal system was discriminatory and violative of constitutional principles was pointedly urged, but cate- gorically rejected by this 'Court. The method adopted by the in fixing the price of levy sugar is fully sup- ported by the recommendations of various expert bodies. in its 1973 Report recommended division of the country into 16 zones for this purpose. The price of sugar is fixed with reference to the Cost Schedule recom- mended by that body. These recommendations are based on various factors such as cost and output of individual la- bour, cane price (accounting for about 70 per cent of the cost of sugar production), quality of sugarcane, taxes on sugarcane, cost of other material, transport charges, cost of storing the sugar produced, cane development charges and other overhead expenses, selling expenses etc. These factors are almost identical for the entire zone. ", "The cost of manufacturing sugar, the respondents con- tend, depends not only on recovery from the sugarcane, duration of crushing season, crushing capacity of the plant, the sugarcane price paid and the capital employed, as stated by the petitioners, but also to a consider- ", "920 ", "able extent on the condition of the plant and machinery, quality of management, investment policy, relations with cane growers and labour, financial reputation etc. They say: \"It is evident from the Tariff Commission Report of 1959, as also the Official Directory of , that the petitioner Company has been consistently diverting huge amounts for investments running into several lakhs elsewhere instead of ploughing back the same into the peti- tioner's sugar industry in question. Thus, the petitioner Company has been neglecting the sugar factory and for such neglect of their own they cannot blame .\" ", "Mr. , appearing for the petitioners, does not object to the factories being grouped together on the basis of factors common to them with a view to fixing the prices applicable to them as a class of producers. He does not advocate fixation of price separately for each unit. He says that the sugar factories must be grouped together, not on the basis of their geographical location, but similarity in cost characteristics. He relies upon the 1976 . The present system of fixing prices according to the regions, where the factories are located, he says, is based on \"averaging wide cost disparities\" as a result of which manufacturers like the petitioners incurring a high cost of production and others incurring a low cost of pro- duction are treated alike. Such a system works to the disad- vantage of the former and to the advantage of the latter. This, Mr. contends, is an unreasonable and invalid classification and violative of constitutional principles. While this line of argument is supported by Mr. , Mr. appearing for the interven- er in Civil Writ Petition No. 464 of 1977 advocates aboli- tion of zonal classification or grouping of any kind and supports fixation of price for each individual factory with reference to its cost and regardless of any other considera- tion. Such unit-wise determination alone, according to him, satisfies the requirements of (3-C). Any system of zoning or grouping for determination of price, he contends, will fail to meet the norms of that sub-section. Mr. , on the other hand, submits that while averag- ing and costing with reference to a representative cross- section may ordinarily be an appropriate method for deter- mining the fair price, such a method is inappropriate for a small zone like Kerala where there are only three manufac- turing units. In respect of such a zone, he says, unit-wise fixation of price is the only just and proper method. ", "921 ", "Mr. , counsel for (), on the other hand, supports the zoning system. He says that, except for a few producers like the petitioners, all the rest of them in the country have ac- cepted the principle of zoning. In his written submissions, Mr. states as follows: ", "\"As was seen during the course of hearing only 2 or 3 per- sons have come forward challenging zoning. There are 389 sugar factories in the country and the present intervener has 166 members. Besides there are 220 members with the cooperative sector. Their Association being , has also inter- vened in these petitions and have adopted the arguments of . Hence almost the entire industry has supported zoning and only a handful of people who also factually are not high-cost units have opposed zoning.\" ", "Mr. submits that the present case is squarely covered by the decisions of this Court in etc. v. ., [1973] 2 SCR 882 and , 2 SCR ", "860. He says that the petitioners have not made out a case for reconsideration of these two decisions. He refers to etc. etc. v. The State of Tamil Nadu & Ors., [1973] 3 SCR 222 at 228 to 230 and submits that this Court would not reexamine an earlier decision merely because certain aspects of the question had not been noticed in that decision. Mr. , however, advocates neutralisation of the high cost incurred by the old units having lower crushing capacity by giving them an incremental levy price as recommended by in 1980. Before we examine the provisions of (3-C) in the context of the general scheme of the Act, we shall briefly refer to the observations of this Court in Anaka- palle, 2 SCR 882 and Panipat, 2 SCR 860. , J. speaking for the Bench in Anakapalle (supra) states': ", "\"The system of fixing the prices, according to certain regions or zones, is not a new one. in 1959 favoured the formation of four zones. In the report of 1965 it was pointed out that the Government had actually fixed the prices for 22 zones which meant that from four zones the number had been increased to twenty two or more. The was of the view that there should be five zones only in addition to Assam. , 1969 however recommended the constitution of fifteen zones largely on State-wise basis with an exception only in case of Uttar Pradesh and Bihar. Uttar Pradesh was divided into three zones and Bihar into two. had been specifically requested to inquire into the working of the zonal system, the main point for inquiry being the zones into which the sugar producers should be grouped having regard to the basis of classification to be recommended by the . The view of the was that on the whole the number of price zones should be fifteen which would reduce, though not eliminate, the inter-se anomalies in the cost structure without resorting to the extreme of the fixation of price for each unit or a single or at the most two, one for the sub-tropical and other for the tropical one. hoped that in the course of time conditions would be created making the operation of the second alternative feasible.\" ", "Rejecting the contention that it was the zonal system that caused the losses allegedly incurred by some of the sugar producers, says that ordinarily these units ought to have made profits. The reasons for incurring losses can be many, such as inefficiency, failure to pursue the right policy, poor management and planning etc., but these reasons have no relation to the zonal system. That system by and large has led to efficiency and provides an incentive to cut down the cost. Healthy competition among the units in the same zone should in the normal. course result in reduc- tion of cost and greater efficiency in the operation of the units. It is proper management and planning that would lead to the success of any commercial venture. The contention of the producers that they have been incurring losses on ac- count of the zonal system is opposed to the evidence pro- duced by them. The Court has rejected the extreme contention that prices should be fixed unitwise, i.e., on the basis of actual cost incurred by each unit. Referring to this conten- tion, this Court observes: ", "\"Apart from the impracticability of fixing the prices for each unit in the whole country, the entire object and pur- pose of controlling prices would be defeated by the adoption of such a system.\" ", "923 ", " states that, during the earlier period of price control, it was on an all India basis that the price was fixed. That is still the objective. If such an objective is achieved, it would undoubtedly be conducive to conferring proper benefit on the consumers. The objective of is to have only two regions for the whole coun- try, viz., sub-tropical and tropical. ", "The has rejected as baseless the criticism against the principle of weighted average adopted in the fixation of price in each zone. Such a principle is well recognised and acted upon by various . A proper cost study is intended to do justice to the weak and strong alike. There is abundant justification for continuing and sustaining the zonal system. The varying climatic conditions of each State have been taken into account. For the same reason, Bihar is divided into 2 zones and U.P. into 3 zones, while, in the case of many other States, each State is treated as a single zone. This system of zoning is thus adopted with special reference to climatic and agro-economic conditions. Rejecting the contention that the zonal system has resulted in discriminatory treatment, this states: \"We are unable to hold that while classifying zones on geographical-cum-agro-economic consideration, any discrimi- nation was made or that the price fixation according to each zone taking into account all the relevant factors would give rise to such discrimination as would attract Article 14 of the Constitution.\" ", "Even if there is no price control, the uneconomic units would be at a great disadvantage. The states: \"Even if there is no price control each unit will have to compete in the market and those units which are uneconomic and whose cost is unduly high will have to compete with others which are more efficient and the cost of which is much lower. It may be that uneconomic units may suffer losses but what they cannot achieve in the open market they cannot insist on where price has to be fixed by the govern- ment. in its 1965 report ex- pressed the view that \"cost-plus\" basis of price fixation perpetuates inefficiency in the industry and is, therefore, against the long-term interest of the country.\" Considering the general principle involved in price fixa- tion, the states: ", "924 ", "\"It is not therefore possible to say that the principles which followed in fixing the prices for different zones are either not recognised as valid principles for fixing prices or that simply because in case of some factories the actual cost was higher than the one fixed for the zone in which that factory was situate the fixation of price became illegal and was not in accordance with the provisions of sub-section (3-C). It has not been denied that the majority of sugar producers have made prof- its on the whole and have not suffered losses. It is only some of them which assert that their actual cost is far in excess of the price fixed. That can hardly be a ground for striking down the price fixed for the entire zone provided it has been done in accordance with the accepted principles ..... \". ", "The concludes: ", "\"When prices have to be fixed not for each unit but for a particular region or zone the method employed by the Commis- sion was the only practical one and even if some units because of circumstances peculiar to them suffered a loss the price could not be so fixed as to cover their loss. That cannot possibly be the intention of the while enacting sub-section (3-C) of of the Act. If that were so the price fixation on zonal or regional basis would have to be completely eliminated. In other words, the entire system of price control which is contemplated wilt break down because fixation of price for each unit apart from being impractical would have no meaning whatsoever and would not be conducive to the interest of the consumer. ' ' This has thus in (supra) rejected the argument that the alleged loss incurred by certain sugar producers is attributable to fixation of price on a zonal basis; or the zonal system has led to inefficiency or lack of incentive, or it has resulted in unequal or unfair treat- ment. On the other hand, the zonal system has encouraged a healthy competition amongst the units in the same zone. Unit-wise fixation is impracticable. is the best judge in selecting units for cost study to determine the average cost. The fair price has to be deter- mined with reference to the conditions of a representative cross section of the industry. For all these reasons, there is ample justification in continuing and sustaining the zonal system for the purpose of price fixation. Price has to be fixed for each zone and necessarily it varies from zone to zone. There is no discrimination in the classification of zones on a geographical-cum-agro-economic consideration and any such classification is perfectly consistent with the principle of equality. ", "In Panipat, [1973] 2 SCR 860, , J. speaking for the same Constitution Bench that has decided , [1973] 2 SCR 882, referes to the norms adopted in sub-sec- tion (3-C), viz., (a) determination by the of the \"price of sugar\", and (b) payment of \"an amount\" to the manufacturer, and states that the concept of fair price which is what is referred to in sub-section (3-C) as \"price of sugar\" does not by any account mean the actual cost of production of every individual manufacturer. Such price has to be arrived at by a process of costing with reference to a representative cross section of the manufacturing units. He states: ", "\"The basis of a fair price would have to be built on a reasonably efficient and economic representative crosssec- tion on whose workings cost-schedules would have been worked out and the price to be determined by Government under sub- section (3-C) would have to be built.\" ", "So stating, , J. rejects the contention that such price has to be determined unit-wise. Any such fixation of price, he points out, would be contrary to the concept of partial control postulated by the subsection and would perpetuate inefficiency and mismanagement. But, of course, any such price, he hastens to add, has to be fixed reasona- bly and on relevant considerations. Referring to the policy of partial control, , J. states: ", "\" ..... the Central Government was confronted with two main problems (a) deterioration in the sugar industry, and ", "(b) the conflicting interests of the manufacturer, the consumer and the cane grower. The floor price of cane fixed by Government was intended to protect the farmer from ex- ploitation, but that was found not to be an incentive enough to induce him to increase his acreage. A device had to be found under which a price higher than the minimum could be paid by the manufacturer of sugar. The consumer, on the other hand, had also to be protected against the spiralling of sugar price and his needs, growing as they were, had to be satisfied at some reasonable price.\" ", "926 ", ", emphasises the need to modernise the factories which alone would yield a reasonable return. This is what he states: ", "'Both these and a larger production of sugar would not be possible unless there was a reasonable return which would ensure expansion, which again would not be possible unless new machinery for such expansion was brought in and facto- ries, particularly in U.P. and Bihar, were modernised and renovated. A fair price for sugar, therefore, had to be such as would harmonise and satisfy at least to a reasonable extent these conflicting interests.\" ", "Significantly, the 's recommendation to group indi- vidual units having homogenity in cost, irrespective of their location, was not accepted by , particularly because itself had con- sidered the question and reached the conclusion that geo- graphical-cum-agro-economic considerations demanded the grouping of factories with reference to State zones, or subzones as in the case of U.P. and Bihar. To group them on the basis of their location in various regions of the coun- try for the purpose of price fixation is a rational method reflecting economic realities. This is particularly so as conditions generally vary from State to State as regards the availability and quality of sugarcane, labour conditions and other factors, whereas within the same region like facili- ties are generally available to all factories. If the cost structure varies from factory to factory, such variation is not necessarily caused by the non-availability, or the poor quality of raw material, or the labour conditions, but probably for reasons unconnected with them, such as the age of the plant, availability of finance, management ability, etc. There is great force in the submission of the respond- ents that to group together factories having a high cost profile and to determine a price specially applicable to them is, as recognised by this in Panipat (supra) and Anakapalle (supra), to put a premium on incompetence, if not mismanagement. ", "The history of control over sugar has been set out at length in Panipat (supra) and we do not wish to burden this judgment with a narration of the circumstances which have led to the introduction of partial control under which 60% of the output of sugar is acquired and the balance left for free sale. It is in implementation of this policy that sub- section (3-C) of was inserted2 Before we examine the ", "2. For an illuminating discussion of this aspect, See , Price Policy, Lancer International (1987), p. 62-63: ", "927 ", "provisions of that sub-section under which the impugned notification have been issued, we shall refer to the statu- tory scheme. ", " The Act was, as stated in the preamble, enacted by \"to provide, in the interest of the general public, for the control of the production, supply and dis- tribution of, and trade and commerce in, certain commodi- ties\". The entire Act is devoted to the cause of the general public with a view to achieving equitable distribution of essential commodities at fair prices. ", " of the Act confers wide power upon to control production, supply, distribution, etc., of essential commodities. It reads: ", "\"3. Powers to control production, supply, distribution, etc., of essential commodities--(1) If is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regu- lating or prohibiting the production, supply and distribu- tion thereof and trade and commerce therein.\" ", "Sub-section (2) of says that, without preju- dice to the generality of the powers conferred by sub-sec- tion (1), an order made \"After many years of adverse experience a new strategy of dual pricing was introduced in sugar. The mills were asked to deliver to the public distribution system about 60 per cent of their output say at Rs.2 per Kg. and were allowed to sell the balance of 40 per cent in the free market at say Rs.6 per kg. The mills were delighted to do so as they got very much enhanced receipts from their flee- market sales. With larger receipts they offered in the following season a higher price to the farmer (the sugarcane grower) who, in turn, grew and offered more cane. In other words, the law of supply which had been held captive, as it were, was freed from bondage. With a higher price offer from the mills, the cane growers brought more land under sugar- cane, diverted land from other crops to cane, used more inputs, produced and delivered to the mills more cane and in fact diverted cane deliveries from the open-pan system to the mill system. Having thus obtained much more cane, the mills produced much more sugar and sold 30-40 per cent of it in the free market. Within a year or two, the free-market price of sugar fell from Rs.6 to Rs.3 or even Rs.2.50. At this rate consumers began to buy more in the free market, millions of ration cards remained unused and the demands on the public distribution declined substantially. Prolonged shortages of sugar got converted into a relative abundance.\" ", "928 ", "under that sub-section may provide for the matters specified in subsection (2). One of them is what is contained in clause (f) of sub-. section (2) which empowers to require any person dealing in any essential commodity to sell the whole or a specified part of such commodity to or or to a nominee of such Government. It reads: \"(2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide- ", "(a)................................................. .................................................... ", "(f) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling of any essential commodity ,-- ", "(a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or ", "(b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a speci- fied part of such commodity when produced or received by him, to or or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order.\" ", "The power contained in sub-section (1) or sub-section (2) is exercisable by an order. An 'order' is defined under section 2 to include a direction issued thereunder. Any order made under by or by an officer or authority of is re- quired by sub-section (6) of to be laid before both Houses of Parliament, as soon as may be, after it is made. Any order made under which is of a general nature or affecting a class of persons has to be notified in the official gazette. [Subsection (5) of ]. ", "929 ", "Sub-section (3) of provides that where any person has sold any essential commodity (sugar being such a commodity) in compliance with an order made with reference to clause (f) of sub-section (2), he shall be paid the price of the goods purchased from him as provided under clauses ", "(a), (b) and (c) of sub-section (3). This subsection oper- ates only where an order has been made under sub-section (1) with reference to clause (f) of sub-section (2). While clause (a) of the sub-section postulates an agreed price, consistently with the controlled price, if any, clause (b) speaks of a price calculated with reference to the con- trolled price, if any, when no agreement is reached. Where neither clause (a) nor clause (b) applies, either because there is no agreement or because there is no controlled price, the seller has to be paid, as per clause (c), a price calculated at the market rate prevailing in the locality at the date of the sale. ", "Sub-section (3-A) empowers to regulate in accordance with the provisions of the sub-sec- tion the price of any foodstuff sold in a locality in com- pliance with an order made with reference to clause (f) of sub-section (2). This power is exercisable by a direction which has to be duly notified in the official . The power to issue the direction is notwithstanding anything contained in sub-section (3). Before issuing the notifica- tion, has to form an opinion that the price of any foodstuff (including sugar) has to be regulated for the purpose of cotrolling the rise in its prices or preventing its hoarding in any locality. Any such notifica- tion will remain in force for any specified period not exceeding 3 months. The price payable in such cases is either the agreed price consistently with the controlled price, if any, or where no such agreement is possible, the price calculated with reference to the controlled price, if any, or where neither of these two methods is applicable, the price calculated with reference to the average market rate prevailing in the locality during the period of 3 months immediately prior to the date of the notification. The average market rate will be determined by an officer authorised by and the rate so deter- mined by him is not liable to be questioned in any court. Sub-section (3-C) which is the crucial provision, was inserted in 1967. It reads: ", "\"(3-C). Where any producer is required by an order made with reference to clause (f) of sub-section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Govern- ", "930 ", "ment or to any other person or class of persons) and either no notification in respect of such sugar has been issued under sub-section (3-A) or any such notification, having been issued, has ceased to remain in force by efflux ot time, then, notwithstanding, anything contained in sub- section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to-- ", "(a) the minimum price, if any, fixed for sugarcane by under this section; ", "(b) the manufacturing cost of sugar; ", "(c) the duty or tax, if any, paid or payable thereon; and ", "(d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar. ", "Explanation--For the purposes of this sub-section, \"produc- er\" means a person carrying on the business of manufacturing sugar.\" ", "(emphasis supplied) Sub-Section (3-C) is attracted whenever any producer is required to sell sugar by an order made with reference to sub-section (2)(f) and no notification has been issued under sub-section (3-A) or any such notification, having been issued, has ceased to be in force. Whenever sub-section (3- C) is attracted, it operates notwithstanding anything con- tained in sub-section (3). This means the compensation payable to the seller in the circumstances attracting sub- section (3-C) is not the price postulated in sub-section (3). Nor is it the price mentioned under sub-section (3A), for that sub-section cannot be in operation when sub-section (3-C) is attracted. What is payable under sub-sectin (3-C) is an \"amount\" calculated with reference to the \"price of sugar\" determined in the manner indicated in that sub-sec- tion. ", "931 ", "Construing sub-section (3-C), this Court in Panipat [1973] 2 SCR 860,870 says: ", "\"Sub- section 3C , with which we are presently concerned was inserted in sec. 3 by sec. 3 of Act 36 of 1967. The sub- section lays down two conditions which must exist before it applies. The first is that there must be an order made with reference to sub- section 2 cl. (f), and the second is that there is no notification under sub- section 3A or if any such notification has been issued it is no longer in force owing to efflux of time. Next, the words \"notwithstanding anything contained in sub-section\" suggest that the amount payable to the person required to sell his stock of sugar would be with reference to the price fixed under the subsection and not the agreed price or the market price in the absence of any controlled price under sub-sec. 3A. The sub-section then lays down two things; firstly, that where a producer is required by an order with reference to sub-sec. 2(f) to sell any kind of sugar, there shall be paid to that producer' an amount therefore, that is for such stock of sugar as is required to be sold, and secondly, that such amount shall be calculated with reference to such price of sugar as may, by order, determine, having regard to the four factors set out in cls. (a), (b), (c) and (d). Unlike the preceding three sub-sections under which the amount payable is either the agreed price, or the controlled price, or where neither of these prices is applicable at the market or average market price, the amount in respect of sugar required to be sold is to be calculated at the price determined by ...... \" ", "What is specially significant is that sub-section (3-C) postulates payment of an amount to the producer who has been required to sell sugar in the circumstances mentioned there- in. What is required to be paid to him is not the price of sugar, but only an amount. That amount has to be calculated with reference to the price of sugar. The \"price\" is deter- mined by by means of an order which, as required by sub-sections (5) and (6), has to be notified in the official gazette and laid before . The order notifying the \"price of sugar\" is of general application and it is the rate at which the actual \"amount\" payable to each seller is calculated. The price of sugar must be determined by the Central Govern- ", "932 ", "ment having regard to the factors mentioned in clauses (a) to (d) of sub-section (3~C). This is done with reference to the industry as a whole and not with reference to any indi- vidual seller. In contradistinction to the \"price of sugar\", the \"amount\" is calculated with reference to the particular seller. is authorised to determine different prices for different areas or for different facto- ries or for different kinds of sugar. Whether factories are required to be grouped together for a rational determination of the prices according to their location or their size, age and capacity or by any other standard is a matter for deci- sion by on the basis of relevant material. What is contemplated by the legislature in dele- gating such wide discretion to is that it must apply its mind to the manifold questions rele- vant to the determination of prices and with due regard to the norms laid down in the sub-section. What is required by sub-section (3-C) is the adoption of a valid classification of factories having a rational nexus to the object sought to be achieved, viz., determination of a fair price of sugar with reference to which the actual amounts payable to the producers, in the circumstances attracting the sub-section, are calculated. ", "Referring to the legislative background of sub-section (3-C), this in Panipat (supra) observes: \"In order to appreciate the meaning of cls. (a), (b), (c) and (d), it must be remembered that ever since control on sugar was imposed, had set up expert committees to work out cost-schedules and fairprices. Starting in the beginning with an All-India cost-schedule worked out on the basis of the total production of sugar, the factories were later grouped together into zones or regions and different cost-schedules for different zones or regions were con- structed on the basis of which fair prices were worked out at which sugar was distributed and sold. in 1958 and in 1965 had worked out the zonal cost-schedules on the basis of averaged recovery and duration, the minimum and not the actual price of cane, the averaged conversion costs and recommended a reasonable return on the capital employed by the industry in the business of manufacturing sugar. This experience was before the legislature at the time when subsec. 3C was inserted in the Act. The legislature therefore incorporated the same formula in the new sub-section as the basis for working out the price. The purpose behind enacting the new sub-section was three-fold, to provide an incentive to increase production of sugar, encourage expan- sion of the industry, to devise a means by which the cane producer could get a share in the profits of the industry through prices for his cane higher than the minimum price fixed and secure to the consumer distribution of at least a reasonable quantity of sugar at a fair price. ' ' Clauses (a) to (d) of sub-section (3-C) postulate that the price of sugar must be determined having regard to the minimum price, if any, fixed for sugarcane by the Central , the manufacturing cost of sugar, the duty or tax applicable in the zone, and the securing of a reasonable return on the capital employed in the business of manufac- turing sugar. Referring to clause (d) of sub-section (3-C), this observes in Panipat (supra): ", "\"It is clear from the reports of that a reasonable return recommended by that body at a fixed amount of Rs. 10.50 per quintal which worked out in 196667 at 12.5% per annum was not in respect of levy sugar only but on the whole, so that even if such a return was not obtain- able on levy sugar but was obtainable on the whole, it would meet the requirement of cl. (d). In this conclusion we derive a two-fold support, firstly, from the language used in cl. (d) itself, viz., a reasonable return on the capital employed in the business of manufacturing sugar, which must mean the business as a whole and not the business of manu- facturing levy sugar only, and secondly, from the fact of the having all along used the same phraseology while recommending Rs. 10.50 per quintal as an addition by way of a reasonable return on the capital employed in the industry. The cost-schedules prepared by these bodies were for determining a fair price in relation to the entire sugar produced by the industry and the return which should be granted to it on the capital employed in the industry and not with respect to that stock only required to be sold under sub-sec. 2(f). This is clear from the heading of Ch. 9 of 's report, 1969, \"Cost Structure and Price Fixation\".\" ", "The petitioners contend that although the Government has the discretion to fix different prices for different areas or for different factories, or for different kinds of sugar, such wide dis- cretion has to be reasonably exercised. It is, of course, a well accepted principle that any discretion conferred on the executive has to be reasonably exercised. Nevertheless, it is a discretion which the will not curtail unless the exercise of it is impeachable on well accepted grounds such as 'ultra vires' or 'unreasonableness'. ", "The petitioners further contend that the Act requires the to have regard to clauses (a) to (d) and, therefore, it is mandatory on the part of the to act strictly in compliance with the provisions of those clauses in determining the prices. According to them, \"having regard to\" is a mandatory requirement demanding strict compliance with the provisions to which reference is made by the legislature. They say that the ingredients of clauses (a) to (d) must be examined with reference to each producer as a condition precedent to the determination of the price of sugar. ", "We may in this connection point out that the petitioners have not furnished any data to show that the prices deter- mined by the Government would have been different had the ingredients of clauses (a) to (d) of the sub-section been examined with reference to each individual producer instead of a representative cross section of manufacturing units. Be that as it may, the expression \"having regard to\" must be understood in the context in which it is used in the stat- ute. ., 1 SCR 463 at 471. These words do not mean that the Government cannot, after taking into account the matters mentioned in clauses (a) to (d), consider any other matter which may be relevant. The expression is not \"having regard only to\" but \"having regard to\". These words are not a fetter; they are not words of limitation, but of general guidance to make an estimate. The Government must, of course, address itself to the questions to which it must have regard, and, having done so, it is for the Government to determine what it is empowered to determine with refer- ence to what it reasonably consider to be relevant for the purpose. in . 1958 A.C. 41, 49 observed with reference to the expression \"having regard to\": ", "\"The form of words used no doubt lends itself to the sugges- tion that regard should be paid only to the two matters mentioned, but it appears to their Lordships that it is impossible to arrive at a conclusion as to reasonableness by considering the two matters mentioned isolated from other relevant factors. Moreover, the statute does not say \"having regard only\" to losses previously incurred by the company and to the smallness of the profits made. No answer, which can be said to be in any measure adequate, can be given to the question of \"unreasonableness\" by considering these two matters alone ...... \" ", " ., 3 SCR 439 at 444-45. See also v. , 1 SCR 956 at 959. In State of Karna- taka and Anr. etc. v. & Anr. etc., 1 SCR 641 at 657-58 this Court stated: \"The content and purport of the expressions \"having regard to\" and \"shall have regard to\" have been the subject matter of consideration in various decisions of the Courts in England as also in this country. We may refer only to a few. In v. , 2 Q.B. 142 it was held by , to quote a few words from the judgment of at page 144: \"All that clause 2 means is that the tribunal assessing the compensation is to bear in mind and have regard to the average weekly wages earned before and after the accident respectively. Beating that in mind, a limit is placed on the amount of compensation that may be awarded ..... \"In another decision of in v. (etc. etc.), 1 K.B. 441 Cozens- Hardy M.R. observed at page 451: \"No mandatory words are there used; the phrase is simply \"regard may be had\". The sentence is not grammatical, but I think the meaning is this: Where you cannot compute you must estimate, as best as you can, the rate per week at which the workman was being remunerated, and to assist you in making an estimate you may have regard to analogous cases.\" It is worthwhile to quote a few words from the judgment of at page ", "458. Under the phrase \"Regard may be had to\" the facts which the may thus take cognizance of are to be \"a guide, and not a fetter\". This speaking through one of us (, J., as he then was), has expressed the same opinion in the case of v. Union of India, [1975] 1 SCR 956. Says the learned Judge at page 959: \"The expression \"having regard to\" only obliges the to consider as relevant data material to which it must have regard\".\" ", "936 ", " ., 4 SCC 59, one of us (, J., as he then was) observed: \"The expression \"having regard to\" only obliges the govern- ment to consider as relevant data material to which it must have regard ..... \". ", "In O'May and Ors. v. City of London Real Property Co. Ltd., [1982] 1 All E.R. 660 at 665 (H.L.), Lord stated: \"A certain amount of discussion took place in argument as to the meaning of 'having regard to' in s. 35 . Despite the fact that the phrase has only just been used by the draftsman of s. 34 in an almost mandatory sense, I do not in any way suggest that the court is intended or should in any way attempt to bind the parties to the terms of the current tenancy in any permanent form ..... \". ", "The words \"having regard to\" in the sub-section are the legislative instruction for the general guidance of the in determining the price of sugar. They are not strictly mandatory, but in essence directory. The reasona- bleness of the order made by the in exercise of its power under sub-section (3-C) will, of course, be tested by asking the question whether or not the matters mentioned in clauses (a) to (d) have been generally considered by the in making its estimate of the price, but the Court will not strictly scrutinise the extent to which those matters or any other matters have been taken into account. There is sufficient compliance with the sub-section, if the has addressed its mind to the factors mentioned in clauses (a) to (d), amongst other factors which the may reasonably consider to be relevant and has come to a conclusion, which any reasonable person, placed in the position of the , would have come to. On such determination of the price of sugar, which, as stated in Panipat (supra) is the fair price, the sub-section postu- lates the calculation of an amount, with reference to such price, for payment to each producer who has complied with an order made with reference to sub-section (2)(f). The \"price of sugar\", unlike the \"amount\" is arrived at by a process of costing in respect of a representative cross section of manufacturing units, beating, of course, in mind the legis- lative instruction contained in clauses (a) to (d). The Attorney General submits that orders determining the prices of sugar in terms of the sub-section are of general application and, therefore, legislative in character. Omis- sion, if any, to consider the peculiar problems of individu- al producers is not a ground for judicial review. The peti- tioners' counsel as well as Mr. appearing for the intervener (), do not agree. They submit that the sub- section contemplates only administrative or quasi-judicial orders of particular application and the impugned orders are not legislative. They rely upon a certain observation of this Court in ., 2 SCC 720. Mr. , however, hastens to add that his client does not seek personal heating before prices are determined. Mr. , supporting the contentions of the petitioners, points out that the expres- sion 'determine' used in sub-section (3-C) indicates that the order to which that expression refers is quasi-judicial. Judicial decisions are made according to law while administrative decisions emanate from administrative policy. Quasi-judicial decisions are also administrative decisions, but they are subject to some measure of judicial procedure, such as rules of natural justice. To distinguish clearly legislative and administrative functions is \"difficult in theory and impossible in practice\".3 Referring to these two functions, says: ", "'They are easy enough to distinguish at the extremities of the .spectrum: an Act of Parliament is legislative and a deportation order is administrative. But in between is a wide area where either label could be used according to taste, for example where ministers make orders or regula- tions affecting large numbers of people ..... ,, .4 points out that legislative power is the power to prescribe the law for people in general, while administra- tive power is the power to prescribe the law for them, or apply the law to them, in particular situations. A scheme for centralising the electricity supply undertakings may be called administrative, but it might be just as well legisla- tive. Same is the case with ministerial orders establishing new towns or airports etc. He asks: \"And what of 'directions of a general character' given by a minister to a nationa- lised industry? Are these various orders legislative or administrative?\" says that the correct (3) Comd. 4060 (1932), p. 73; see H.W.R. -Adminis- trative Law, 6th ed., p. 47 (4) Ibid p. 848. ", "938 ", "answer would be that they are both. He says:\" ..... there is an infinite series of gradations, with a large area of overlap, between what is plainly legislation and what is plainly administration\".5 Courts, nevertheless, for practi- cal reasons, have distinguished legislative orders from the rest of the orders by reference to the principle that the former is of general application. They are made formally by publication and for general guidance with reference to which individual decisions are taken in particular situations. According to , an instruction may be treated as legislative even when they are not issued formal- ly),, but by a circular or a letter or the like. What mat- ters is the substance and not the form, or the name. The learned authors say: \". .... where a Minister (or other authority) is given power in a statute or an instrument to exercise executive, as opposed to legislative, powers--as, for example, to requisition property or to issue a licence--and delegates those powers generally, then any instructions which he gives to his delegates may be legisla- tive\".6 Where an authority to whom power is delegated is entitled to sub-delegate his power, be it legislative, executive or judicial, then such authority may also give instructions to his delegates and these instructions may be regarded as legislative. However, as pointed out by , L.J., (as he then was) a judicial tribunal cannot delegate its functions except when it is authorised to do so express- ly or by necessary implication' see Bernard and . v. and ., [1953] 2 Q.B. 18 at 40. says: \"What distinguishes legislation from adjudication is that the former affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely touched by it; while adjudica- tion operates concretely upon individuals in their individu- al capacity\".7 Justice ' definition, which is what is called the \"time test\" and which describes as one which has produced many unsatisfactory practical results, reads: ", "\"A judicial inquiry investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. That is its purpose and end. Legislation, on the other hand, looks to the future and (5) Ibid. ", "(6) Principles of Administrative Law, 5th ed., p. 65 (7) Administrative Law Text, 3rd ed., p. 123-24. ", "939 ", "changes existing conditions by making a new rule, to be applied thereafter to all or some part of those subject to its power. The establishment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial ...... ", " v. , 211 US 210,226. The element of general application is often cited as a distinct feature of legislative activity. In the words of Chief Justice , \"rule-making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class\"? says: \"an adjudication, on the other hand, applies to specific individuals or situations. Rule-making affects the fights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely affected; adjudication operates concretely upon individuals in their individual capacity''9 According to , the \"time test\" and the \"applicability test\" are workable in most cases although in certain situations distinctions are indeed difficult to draw. ", "A statutory instrument (such as a rule, order or regula- tion) emanates from the exercise of delegated legislative power which is the part of the administrative process resem- bling enactment of law by the legislature. A quasi judicial order emanates from adjudication which is the part of the administrative process resembling a judicial decision by a court of law. This analogy is imperfect and perhaps unhelp- ful in classifying borderline or mixed cases which are better left unclassified .10 If a particular function is termed legislative rather than judicial, practical results may follow as far as the parties are concerned. When the function is treated as legislative, a party affected by the order has no fight to notice and heating, unless, of course, the statute so re- quires. It being of general application engulfing a wide sweep of powers, applicable to all persons and situations of a broadly identifiable class, the legislative order may not be vulnerable to challenge merely by reason of its omission to take into account individual peculiarities and differ- ences amongst those falling within the class. (8) Quoted by in 'Administrative Law' (1976), p. 144. ", "(9) Ibid (10) See Davis, Administrative Law Text, p. 123 ., 2 SCC 720 at 734-35, , J. referring to the earlier decisions of this Court states: \" ..... legislative action, plenary or subordinate, is not subject to .rules of natural justice. In the case of Parlia- mentary legislation, the proposition is self-evident. In the case of subordinate legislation, it may happen that Parlia- ment may itself provide for a notice and for a hearing .......... But where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity .......... It is true that, with the proliferation of delegated legislation, there is a tendency for the line between legislation and administration to vanish into an illusion. Administrative, quasi-judicial decisions tend to merge in legislative activity and, con- versely, legislative activity tends to fade into and present an appearance of an administrative or quasi-judicial activi- ty\". ", "Stating that rule-making is of general application to all members of a broadly identifiable class while adjudication is applicable to specific individuals or situations, the learned Judge observes: ", "\"A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a general character, not directed against a particular situation. It is intended to operate in the future. It is conceived in the interests of the general consumer public. The right of the citizen to obtain essential articles at fair prices and the duty of the to so provide them are transformed into the power of the to fix prices and the obligations of the producer to charge no more than the price fixed. Viewed from whatever angle, the angle of general application, the prospectiveness of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legisla- tive activity\". ", "The learned Judge emphasises: ", "941 ", "\"Price fixation may occasionally assume an administrative or quasi-judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the government or its nominee and the price to be paid is directed by the legislature to be determined accord- ing to the statutory guidelines laid down by it. In such situations the determination of price may acquire a quasiju- dicial character\". ", "These observations have been cited with approval by one of (, J., as he then was) in Renusagar (supra). ", "In v. , [1975] 1 SCR 956 at 961, this Court states: \"Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material. It could not, there- fore, give rise to a complaint that a rule of natural jus- tice has not been followed in fixing the price\". In . v. , [1978] 3 SCR 293 at 317, Chandrachud, J., as he then was, speaks for the majority: ", "\"We think that unless, by the terms of a particular statute, or order. price fixation is made a quasi-judicial function for specified purposes or cases, it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation. A legisla- tive measure does not concern itself with the facts of an individual case. It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class\". ", "See also the observation of , J., as he then was, in v. Lord Hailsham of St. Marylebone & Ors., [1972] 3 All ER 1019 at 1024. ", "The impugned orders, duly published in the official gazettes notifying the prices determined for sugar of var- ious grades and pro- ", "942 ", "duced in various zones, and applicable to all producers of such sugar, can, in our view, be legitimately characterised as legislative. These orders are required by Sub-section (6) to be laid before . The notified prices are applicable without exception to all persons falling within well defined groups. The prices are deter- mined in accordance with the norms postulated in the sub- section. It is with reference to such predetermined prices of sugar that the \"amount\" payable to each producer, who has sold sugar in compliance with an order made with reference to clause (f) of sub-section (2), is calculated. The calcu- lation of such amount is, in contradistinction to the deter- mination of \"price of sugar\", a non-legislative act. Thus, while individual consideration is relevant to the calculation of the \"amount\", it is not so for the determina- tion of the \"price of sugar\" which is the rate at which the amount is calculated. That price, as stated in Panipat (supra) is to be arrived at by a process of costing with reference to a reasonably efficient and economic representa- tive cross section of manufacturing units. In this connection, we must point out that at first blush a certain observation of , J. in Cyna- mide, [1987] 2 SCC 720 at 741, on which much reliance is placed by the petitioners' counsel, appears to be inconsist- ent with what we have now stated. The learned Judge says: \"The Order made under , which is not in respect of a single transaction, nor directed to a particu- lar individual is clearly a legislative act, while an Order made under (3-C) which is in respect of a particu- lar transaction of compulsory sale from a specific individu- al is a non-legislative act\". ", "It would appear that what the learned Judge had in mind was an order by which the \"amount\" was calculated in terms of sub-section (3-C) in respect of each individual producer and not an order determining the \"price of sugar\". While the former is non-legislative, the latter, by the very test adopted by the learned Judge, is legislative in character. We, therefore, understand the observation of the learned Judge on this point as applicable only to the individual order fixing the \"amount\" in terms of the sub-section and not to orders determining the \"price of sugar\" which are what the impugned orders are. Any other construction of the sub-section would conflict with what was adopted by in Panipat (supra) and would, therefore, be unsustainable. ", "943 ", "The individual orders, calculating the \"amounts\" payable to the individual producers, being administrative, orders rounded on the machanics of price fixation, they must be left to the better instructed judgment of the executive, and in regard to them the principle of audi alteram partem is not applicable. All that is required is reasonableness and fair play which are in essence emanations from the doctrine of natural justice as explained by this Court in etc. v. ., [1970] 1 SCR 457. See also the observation of , J., as he then was, in Renusagar, [1988] 4 SCC 103, 105. ", "Price fixation is in the nature of a legislative action even when it is based on objective criteria rounded on relevant material. No rule at natural justice is applicable to any such order. It is nevertheless imperative that the action of the authority should be inspired by reason. , [1975] 1 SCR 956, 961, 962. The Government cannot fix any arbitrary price. It cannot fix prices on extraneous considerations: Renusagar, (supra). Any arbitrary action, whether in the nature of a legis- lative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution. As stated in ., 2 SCR 348, \"equality and arbi- trariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch.\" Unguided and unrestricted power is af- fected by the vice of discrimination: ., 1 SCC 248 at 293-294. The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive, or quasi-judicial: ., 3 SCR 1014 at 1042; .. 1 SCC 722 and , 1 SCC 305. ", "Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. All his decisions, whether characterised as legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws of the land. They must be \"reasonably related to the purposes of the enabling legislation\". See , 411 US 356, 36 L Ed. 2d ", "318. If they are manifestly unjust or oppressive or outra- geous or directed to an unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, courts might well say, \"Parlia- ment never intended to give authority to make such rules; they are unreasonable and ultra vires\". per Lord of , C.J. in v. , [1988] 2 Q.B. 91, 99. The doctrine of judicial review implies that the reposi- tory of power acts within the bounds of the power delegated and he does not abuse his power. He must act reasonably and in good faith. It is not only sufficient that an instrument is intra vires the parent Act, but it must also be consist- ent with the constitutional principles: , 1 SCC 248, 314-315. ", "Where a question of law is at issue, the may determine the rightness of the impugned decision on its own independent judgment. If the decision of the authority does not agree with that which the considers to be the right one, the finding of law by the authority is liable to be upset. Where it is a finding of fact, the examines only the reasonableness of the finding. When that finding is found to be rational and reasonably based on evidence, in the sense that all relevant material has been taken into account and no irrelevant material has influenced the deci- sion, and the decision is one which any reasonably minded person acting on such evidence, would have come to, then judicial review is exhausted even though the finding may not necessarily be what the would have come to as a trier of fact. Whether an order is characterised as legislative or administrative or quasi-judicial, or, whether it is a deter- mination or law or fact, the judgment of the expert body, entrusted with power, is generally treated as final and the judicial function is exhausted when it is found to have \"wanant in the record\" and a rational basis in law: See v. United States, [1939] 307 U.S. 125, 83 L. Ed. 1147. See also v. , [1948] 1 K.B. 223. As stated by Lord of , (H.L.) in Chief Constable of v. , [1982] 1 WLR 1155 at 1160-61: ", "\"The function of the court is to see that lawful authority is not abused by unfair treatment and not tO attempt itself the task entrusted to that authority by the law .......... The purpose of judicial review is to ensure that the indi- vidual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised by law to decide for itself a conclu- sion which is correct in the eyes of the court\". In the same case Lord says: ", "\"Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made\". ", "A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissi- ble purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. See v. , [1948] 1 K.B. 223. In the words of Lord Mac- naghten in v. , [1905] AC 426, 430: ", "\" ..... It is well settled that a public body invested with statutory powers such as those conferred upon the must take care not to exceed or abuse its pow- ers. It must keep within the limits of the authority commit- ted to it. It must act in good faith. And it must act rea- sonably. The last proposition is involved in the second, if not in the first.....\". ", " ., Supp. SCR 311, this Court states: \" ..... Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extra- neous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts\".. ", "In Renusagar, [1988] 4 SCC 59, 104, Mukharji, J., as he then was, states: ", "946 ", "\"The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non-consideration or non-application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administra- tive) is exercised on the oasis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated\". ", "The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it The impugned orders are undoubtedly based on an exhaus- tive study by experts. They are fully supported by the recommendations of in 1969 and 1973. It is true that these recommendations in some respects were the subject matter of criticism by a subsequently appointed expert body, viz., the . Apart from the fact that the 's criticism has not been accepted by the , that criticism is not relevant in so far as the impugned orders are concerned because the latter are in regard to an earlier period. These orders are fully supported by the relevant material on record. The conclusions reached by the Central in exercise of its statutory power are expert conclusions which are not shown to be either discrim- inatory or unreasonable or arbitrary or ultra vires. The (11) See the observation of Lord in Kruse v. , [1898] 2 Q.B. 91 and that of Lord , M.R. in v. , [1948] 1 K.B. 223; See also v. Chertsey U.D.C., [1965] AC 735; Commissioners of Customs and Excise v. [1962] 1 Q.B. 340; McEldowney v. , [1971] AC 632 (H.L.); , 2 All ER 560, 564; Point of Ayr. Collieries Ltd. v. Lloyd George, 2 All ER 546; v. Glasgow Corporation, AC 470, 492; . City of Glasgow, AC 32, 42; v. Commissioner, 297 US 129, 134; v. , [1945-46] 72 CLR 37; Bailey v. , 34 WALR 18; v. City of Ottawa, 45 DLR (2d) 211; , 52 DLR (2d) 10 14 and v. 265 US 3 15,320-322. ", "947 ", "material brought to our notice by the petitioners does not support the arguments at the bar that has not applied its mind to the relevant questions to which they are expected to have regard in terms of the statute. That the sugar factories for the purpose of determining the price of sugar in terms of sub-section (3-C) should be grouped on the basis of their geographical location is a policy decision based on exhaustive expert conclusions. Factories are classified with due regard to geographi- cal-cumagro-economic considerations. Fair prices for differ- ent grades of sugar are determined for each zone with refer- ence to a reasonably efficient and economic representative cross-section of the manufacturing units. Such classifica- tion, as held in Panipat (supra) and Anakapalle (supra) cannot, in the absence of evidence to the contrary, be characterised as arbitrary or unreasonable or not rounded on an intelligible differentia having a rational nexus with the object sought to be achieved by subsection (3-C). The person assailing such classification \"carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences\" v. , 320 US 591, 602 (1944). If the petitioners nevertheless incur losses, such losses need not necessarily have arisen by reason of geographical zoning, but for reasons totally unconnected with it, such as the condition of the plant and machinery, quality of management, investment policy, labour relations, etc. These are matters on which the petitioners have not furnished data, and, in any event judicial review is hardly appropriate for their consideration. ", "In this connection we would recall the observations of , J. in . andAnr., 2 SCC 720 at p. 736: \"We do not agree with the basic premises that price fixation primarily affects manufacturers and producers. Those who are most vitally affected are the consumer public. It is for their protection that price fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer, if not more.\" ", " ., Supp. SCC 476 at p. 48 1 one of us (Jagannatha Shetty, J .) stated: ", "\"In this view of the matter, the primary consideration in the fixation of price would be the interest of consumers rather than that of the producers.\" ", "The has neither the means nor the knowledge to reevaluate the factual basis of the impugned orders. The , in exercise of judicial review, is not concerned with the correctness of the findings of fact on the basis of which the orders are made so long as those findings are reasonably supported by evidence. In the words of Justice of the U.S. Supreme in v. , 311 US 570-577, 85 L. ed. 358,362: ", "\"Nothing in the Constitution warrants a rejection of these expert conclusions. Nor, on the basis of intrinsic skills and equipment, are the federal courts qualified to set their independent judgment on such matters against that of the chosen state authorities ..... When we consider the limit- ing conditions of litigation--the adaptability of the judi- cial process only to issues definitely circumscribed and susceptible of being judged by the techniques and criteria within the special competence of lawyers--it is clear that the Due Process Clause does not require the feel of the expert to be supplanted by an independent view of judges on the conflicting testimony and prophecies and impressions of expert witnesses\". ", "This observation is of even greater significance in the absence of a Due Process Clause. ", "Judicial review is not concerned with matters of econom- ic policy. The does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The does not supplant the \"feel of the expert\" by its own views. When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonable~ ness. In all such cases, judicial in- quiry is confined to the question whether the findings of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land. As rated by , J. in , (supra): \"the court does not act like a chartered accountant nor acts like an income tax officer. The court is not concerned with any individual case or any particular problem. The court only examines whether the price determined was with due regard to considerations provided by the statute. And wheth- er extraneous matters have been excluded from determination.\" ", "Price fixation is not within the province of the courts. Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclu- sions reached by the concerned authority. As stated by Justice in v. United States of America, 292 US 282-290, 78 Led 1260, 1265: \"The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commis- sion by training and experience is qualified to form ..... It is not the province of a court to absorb this function to itself ..... The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body\". ", "It is a matter of policy and planning for to decide whether it would be on adoption of a system of partial control, in the best economic interest of the sugar industry and the general public that the sugar factories are grouped together with reference to geographi- cal-cum-agro-economic factors for the purpose of determining the price of levy sugar. Sufficient power has been delegated to to formulate and implement its policy decision by means of statutory instruments and execu- tive orders. Whether the policy should be altered to divide the sugar industry into groups of units with similar cost characteristics with particular reference to recovery, duration, size and age of the units and capital cost per tonne of output, without regard to their location, as recom- mended by the , is again a matter for to decide. What is best for the sugar industry and in what manner the policy should be formulated and imple- mented, bearing in mind the fundamental object of the stat- ute, viz., supply and equitable distribution of essential commodity at fair prices in the best interest of the general public, is a matter for decision exclusively within the province of . Such matters do not ordinarily attract the power of judicial review. We would, in this connection, recall the words of in Secretary of Agriculture, etc. v. Refining Com- ", "950 ", "pany, etc., 338 US 615-617, 94 Led 391-392: ", "\" was ..... confronted with the formula- tion of policy peculiarly with its wide swath of discretion. It would be a singular intrusion of the judiciary into the legislative process to extrapolate restrictions upon the formulation of such an economic policy from those deeply rooted notions of justice which the Due Process Clause expresses ..... \". ", "\"Suffice it to say that since fixed the quotas on a historical basis it is not for this to reweigh the relevant factors and, perchance, substitute its notion of expediency and fairness for that of . This is so even though the quotas thus fixed may demonstrably be disadvantageous to certain areas or persons. This is not a tribunal for relief from the crudities and inequities of complicated experimental economic legislation\". It is important to remember that the division of the industry on a zonal basis for the purpose of price determi- nation has been accepted without question by almost all the producers with the exception of a few like the petitioners. Even if it is true that the petitioners as individuals are at a disadvantage and have suffered losses on account of the present system--an assertion which has not been established and which by its very nature is incapable of determination by judicial review--that is not sufficient ground for inter- ference with the impugned orders. We are not satisfied that the decisions of this in Anakapalle, [1973] 2 SCR 882 and Panipat, [1973] 2 SCR 860 require reconsideration in any respect. We see no merit in the challenge against the im- pugned orders. The civil writ petitions are, in the circum- stances, dismissed. However, we do not make any order as to costs. ", "P.S.S. Petitions dismissed."], "relevant_candidates": ["0000097946", "0000827604", "0001186368", "0001220466", "0001255418", "0001281050", "0001327287", "0001329246", "0001416283", "0001646640", "0001748256", "0001766147", "0001901448", "0001963880", "0157352718"]} {"id": "0000699829", "text": ["PETITIONER: Vs. RESPONDENT: & OTHERS DATE OF JUDGMENT: 23/05/1958 BENCH: , BHUVNESHWAR P. BENCH: , BHUVNESHWAR P. IMAM, SYED JAFFER KAPUR, J.L. CITATION: 1958 AIR 886 1959 SCR 1111 ACT: Civil Procedure-Addition of parties-Declaratory suit-Claim of status as married wife Admission by husband-Right of wife and son denying plaintiff's claim, to be added as Parties- Mohammedan law-Code of Civil Procedure (Act V of 1908), O. I, r 10(2)- Specific Relief Act , ss. 42 , 43 . HEADNOTE: The appellant instituted a suit against the third respondent, inter alia, for a declaration that she was his lawfully married wife, alleging that though the fact of her marriage was known to all who knew him, he was trying to suppress the facts in such a way that the members of his family should conclude that she was not his wife, that he refused to openly acknowledge her as his legally wedded wife and that this conduct on his part had cast a cloud on her status as such wife and was affecting the rights of the issue of the marriage, her three daughters. The third respondent filed his written statement admitting the claim, but on the same date respondents i and 2 made an application under 0. i, r. 10(2), of the Code of Civil Procedure for being impleaded in the suit as defendants on the grounds that they were respectively the wife and son of the third respondent, that they were interested in denying the appellant's status as wife and the status of her children is the legitimate children of the third respondent, that the suit was the result of a collusion between the appellant and the third respondent and that if the appellant was declared to be lawfully wedded to the third respondent, the rights and interests of respondents i and 2 in the estate of the third respondent would be affected. The application was contested by both the appellant and the third respondent. The trial court allowed the application and the order was confirmed by in its revisional jurisdiction. The question was whether the lower courts did not exceed their powers in directing the addition of respondents i and 2 as parties-defendants in the action : (per and , disscenting), that in view of the averments in the plaint which showed that not only the third respondent but the other members of his family, including respondents i and 2, were interested in denying the appellant's status as a legally wedded wife, respondents i and 2 were proper parties to the suit. The question of addition of parties under O. I, r. 10, of the Code of Civil Procedure is generally not one of initial Jurisdiction of the court, but of a judicial discretion ; in a suit for a declaration as regards status or a legal character under S. 42 Of 1112 the Specific Relief Act , the rule that in order that a person may be added as a party he must have a present or direct interest in the subject-matter of the suit, is not wholly applicable, and the rule may be relaxed in a suitable case where the court is of the opinion that by adding that party it would be in a better position effectually and completely to adjudicate upon the controversy. In such suits the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon clear proof, apart from the admission. A declaratory judgment in respect of a disputed status will be binding not only upon the parties actually before the court but also upon persons claiming through them respectively, within the meaning of s. 43 Of the Specific Relief Act. The word \" respectively \" in the section has been used with a view to showing that the parties arrayed on either side, are really claiming adversely to one another, so far as the declaration is concerned. Per facts of the present case do not justify the addition of respondents i and 2 as defendants under the provisions of 0. i, r. 1O(2), of the Code of Civil Procedure, because..:- (1)There is nothing in the pleadings to suggest that respondents 1and 2 were denying the appellant's status as wife of the third respondent, and the court ought not to compel the plaintiff to add parties to the suit where on the face of the pleadings plaintiff has no cause of action against them. (2)Under the Mohammedan law a man is entitled to have four wives at one and the same time and, consequently, as the third respondent has admitted that the appellant was married to him, respondents i and 2 have no locus standi to make any representation in the suit that there was collusion between the appellant and the third respondent. (3)During the lifetime of the third respondent neither the appellant nor her children on the one hand nor respondents i and 2 on the other have any rights in his estate, under the Mohammedan law. (4)Assuming that a declaration in the suit would be binding upon respondents i and 2, which is doubtful having regard to the terms of S. 43 of the Specific Relief Act, that would be no justification for their being impleaded in the suit where the issue is not one of inheritance but one of marriage between the appellant and the third respondent. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 695 of 1957. Appeal by special leave from the judgment and order dated September 17, 1957, of in Civil Revision Petition No. 1112 of 1957 arising out of the order dated July 6, 1957, of , , Hyderabad (), made on the application under 0. 1, r. 10, (C. P. C. in Original Suit No. 43/1 of 1957. , Attorney-General for India, , Solicitor-General of India, , Additional Solicitor-General of India, , , , , , , , and , for the appellant. ", ", and , for respondent No. 1. ", "Sir , , and , for respondent No. 2. , , , , , and , for respondent No. 3. 1958. May 23. The judgment of and was delivered by J. delivered a separate judgment. ", " appeal by special leave is directed against the concurring judgments and orders of the courts below, allowing the intervention of respondents I and 2 and adding them as defendants 2 and 3 in the suit instituted by the appellant against her alleged husband, now respondent 3, who was the sole defendant in the suit as originally framed. The main question in controversy in this appeal is the true construction of sub-r. (2) of r. 10 of 0. 1 of the Code of Civil Procedure, and its application to the facts of this case which are given below:- ", "On April 12, 1957, the plaintiff-appellant in this Court- instituted the suit out of which this appeal arises against the third respondent who is the second son of His Exalted Highness the Nizam of Hyderabad, and who will, hereinafter, be referred to as the Prince. ", " ", "In the plaint she alleged that she is the lawfully married wife of the Prince, the marriage ceremony (Nikah) having been solemnized in accordance with the Shia Law by a Shia Mujtahid on October 19, 1948. The plaintiff also averred that the issue of the marriage were three daughters aged 8, 7 and 5 years; that the fact of the marriage was known to all persons acquainted with the Prince; that there was a prenuptial agreement, whereby the Prince agreed to pay Rs. 2,000 per month to the plaintiff as ; that the Prince stopped the payment of the allowance aforesaid of Rs. 2,000 per month, since January, 1953, without any reasons and in contravention of the said agreement. On these allegations, she asked for the following two declarations:- ", "(1)That the plaintiff be declared to be the legally-wedded wife (Mankuha) of the defendant, (2)That a decree be passed in favour of this plaintiff against the defendant declaring her to be entitled to receive from the defendant 1. G. Its. 2,000 per month as Kharch-e-pandan.\" ", "It may be noted that she did not make any claim for arrears of the allowance aforesaid since the date the Prince is alleged to have stopped payment of the same. Only ten days later, on April 22, 1957, the Prince filed his written statement, admitting the entire claim of the plaintiff for the two declarations aforesaid. On that very date, an application under 0. 1, r. 10, of the Code of Civil Procedure, on behalf of (1) , and (2) Prince , minor, under the Guardianship of his mother, the said , was made. They are respondents I and 2 respectively in this Court. The , respondent 1, claimed to be the \" lawful and legally wedded wife\" of the Prince, and respondent 2, the son of the Prince by the first respondent. In their petition they stated inter alia: \" The plaintiff herself has stated in the plaint that the defendant is trying to suppress the facts of his marriage with the plaintiff so that the members of his family should conclude that the plaintiff is not his Nikah wife, and the defendant is interested in denying the rights and status of the plaintiff. ", "1115 ", "The petitioners on being joined as parties to the suit will be equally interested in denying the marriage of the plaintiff and her rights and status.......... The peti- tioners have reasons to believe that the above suit is a result of collusion. The object and motive of the plaintiff in instituting the above suit is to adversely affect the relationship of the petitioners and the defendant and also to deprive the rights and interests of the petitioners in the defendant's estate.\" On June 15, 1957, the plaintiff made an answer to the petition for intervention, filed by respondents I and 2 aforesaid. She denied the right of the interveners to be impleaded in that suit, and asserted that the \" possibility of the rights of the petitioners being infringed are very remote, contingent upon their or plaintiff surviving the defendant or other circumstances which may or may not arise.\" She also founded her objection on the ground that, having regard to the admission of the defendant in his written statement, \" there is no serious controversy in the suit.\" She also added a number of legal objections which need not be specifically noticed as they have not been pressed in this Court. She further asserted that the petitioners (meaning thereby, respondents I and 2) are neither necessary nor proper parties to the suit. She anticipated the ground most hotly contested in this Court, by asserting that the \" judgment of in this suit will not be conclusive as against petitioners as they allege collusion and they will not be prejudiced by not being made parties.\" She ends her statement by making the following significant allegation:- ", "\" The alleged collusion and motive attributed to the plaintiff for instituting this suit are denied. On the other hand, the application to be added as defendants is mala fide and malicious and is evidently inspired by some strong force behind them interested in harassing the plaintiff and exposing her to the risk of a vexatious and protracted litigation.\" ", "The Prince, in his own answer to the application for intervention, stated that he admitted that the first respondent is his wife and that the second respondent is his son, and repeated his admission by saying that lie married the plaintiff in October, 1948, and the first respondent in December 1952. He added further that when he married the first respondent, he had already three daughters by the plaintiff, which fact was known to the first respondent at the time of her marriage with him. He supported the plaintiff in her objection to the intervention by asserting that the rights of respondents 1 and 2 will not be affected in any way, and by insisting upon his Muslim right of having four wives living at the same time. He also supported the plaintiff in her denial of the allegation of collusion and \" that the suit is intended to adversely affect the relationship of the petitioners and the defendant respondent and to deprive the rights and interests of the petitioners in the defendant-respondent's estate. \" He, in his turn, added the following equally significant penultmate para:- \" That the petitioners' application has been filed in order to prolong the litigation and that the defen. dant- responaent's father appears to be more interested than petitioner No. 1 herself, in creating unnecessary complications in the suit. \" On these allegations and counter allegations, after hearing the parties, the trial court, by its judgment and order dated July 6, 1957, allowed the application for intervention, and directed respondents 1 and 2 to be added as defendants. The court, after discussing all the contentions raised on behalf of the parties, observed that there were indications in the record of a possible collusion between the plaintiff and the defendant; that the relief claimed under s. 42 of the Specific Relief Act , being discretionary, could not be granted as of right ; that the presence of the interveners would help the court in unravelling the mysteries of the litigation, and that there was force in the contention put forward on behalf of the interveners that under s. 43 of the Specific Relief Act, any declaration given in favour of the plaintiff will be binding upon the interveners. It also held that in order effectually and completely to adjudicate upon and settle the present controversy, the presence of the interveners was necessary. The plaintiff moved , at Hyderabad, under s. 115 of the Code of Civil Procedure, to revise the aforesaid order of the learned trial judge. , in a wellconsidered judgment, after discussing the points raised for and against the addition of the parties, and noticing almost all the authorities quoted before us, refused to interfere with the discretion exercised by the trial court, and dismissed the revisional application. It came to the conclusion that the first respondent, the admitted wife of the defendant, and the second respondent, the admitted son by her, are interested in denying the status claimed by the plaintiff, and \" have some rights against the estate of the 3rd respondent. The learned Judge of further observed When so much sanctity is attached to the status of marriage, it would indeed be strange that persons who are so intimately related to the 3rd respondent as wife and son, should be denied the opportunity of contesting the status of the petitioner as his lawfully married wife............ It cannot be that the petitioner is seeking any empty relief carrying with it the stamp of futility and it is difficult to assume that she is fighting a vain or purposeless litigation. If what she is seeking is a relief which will carry with it certain legal incidents, are not persons interested in denying her status proper parties to the litigation ? \" The Court also observed that it was with a view to avoiding multiplicity of suits that r. 10(2) of 0. 1, had made provision foradding parties. The Court noticed the argument under s. 43 of the Specific Relief Act, but did not express any final opinion, because, in its view, it had already reached the \" conclusion that the proposed parties are persons whose presence before the court is necessary within the meaning of 0. 1, r. 10 (2), so as to ensure that the dispute should be finally determined once for all in the presence of all the parties interested.\" ", "Against the judgment of , refusing to set aside the order passed by the learned trial judge, the plaintiff moved this Court and obtained special leave to appeal. ", "In the forefront of his arguments in support of the appeal, the learned Attorney-General submitted that the court had no jurisdiction to add the first two respondents as defendants in the suit. He relied upon the words of the relevant portion of sub-rule (2) of r. 10 of O. I of the Code, which are as follows: ", "\" (2)............... and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the may be necessary in order to-enable the effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added. ", "He rightly pointed out, and there was no controversy between the parties before us, that the added defendants do not come within the purview of the words \" who ought to have been joined \", which apparently have reference to necessary parties in the sense that the suit cannot be effectively disposed of without their presence on the record. The learned Attorney-General strenuously argued that it cannot be asserted in this case that the presence of the added defendantsrespondents 1 and 2-before the court was necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the suit. He founded this argument on the legal position that the wife and the son of the Princerespondents I and 2-have no present interest in his estate. Their expectancy of succession to the estate of the Prince does not clothe them with any right vested or contingent to intervene in this action. In this connection, he pointed out that r. 10 of 0. 1 of the Code of Civil Procedure, which corresponds to portions of 0. 16, r. 11, of the Rules of the Supreme in England, has been the subject-matter of judicial interpretation in many cases. Both, in this country and in England, there have been two currents of judicial opinion, one taking what may be called the narrower view, and the other, the wider view. As illustrations of the former, that is to say, the narrower view, may be cited the cases of v. (1) and v. (No. 2) (2). In India, this view is represented by the decision in the case of for Hindu Religious Endowments, Madras (3). On the other side of the line, representing the wider view, may be cited the case of v. (4). In India, the decisions of , in the cases of (5) and (6), were cited as illustrations. But it was contended on behalf of the appellants that whether the narrower or the wider view of the interpretation of sub-r. (2) of r. 10 of 0. I of the Code of Civil Procedure is taken, the result, so far as the present controversy is concerned, would be the same. In the leading case of v. (1), has held that a party who is not directly interested in the issues between the plaintiff and the defendant, but is only indirectly or commercially affected, cannot be added as a defendant because the court has no jurisdiction, under the relevant rule, to bring him on the record even as a \" proper party \". That was a suit to restrain the alleged infringement of the plaintiff\"s patent by the defendant, . The held, reversing the order of the trial judge, that the party sought to be added had no direct interest in. the subject-matter of the litigation, and all that could have been said on behalf of the party intervening was that the judgment against the defendant would affect his interest commercially. The distinguished the previous decisions in v. Krupp(7) and v. (8), on the ground that in those cases the litigation would have affected the property of the persons not before the court. This leading case of v. (1) is clearly an authority for the proposition that the court has jurisdiction to add as a party defendant only a person (1) 1 Ch. 487. ", "(2) [1902] 1 Ch. 911. ", "(3) (1926) I. L. R. 50 Mad. 34. ", "(4) [195O] 2 All E. R. 605. ", "(5) (1881) I. L. R. 5 Mad. 5.2. ", "(6) A. I. R. 1929 Mad. 443. ", "(7) (1878) 9 Ch. D. 351 . ", "(8) (1886) 31 Ch. D. 632. ", "1120 ", "who is directly interested in the subject-matter of the litigation and not a person who will be only indirectly or commercially affected. who agreed with in that case, observed that the relevant rule of , on its proper construction, authorized the court to add only such persons as would be bound by the judgment to be given in the action, but did not authorize the court to add any persons who would not be so bound and whose interest may only indirectly be affected in a commer- cial sense. To the same effect is the decision in Re I. G. Farbeninadusrie A. G. Agreement (1). The held that in order that a party may be added as a defendant in the suit, he should have a legal interest in the subject-matter of the litigation-legal interest not as distinguished from an equitable interest, but an interest which the law recognizes. Lord Greene M. -R. giving the judgment of the , also observed that the court had. no jurisdiction to add a person as a party to the litigation if he had no legal interest in the issue involved in the case. In the case of (2), in which the wider view of the interpretation of the relevant rule was taken, delivering the judgment of the , observed that the wider interpretation which enabled the court to avoid conflicting decisions on the same question and which would finally and effectually put an end to the litigation respecting it, should be adopted. But in that case also the party added as defendant was interested in the subject- matter of the litigation, though there was no impediment to the court determining the issues between the parties originally before the court. The learned Judge, on a discussion of the English and Indian cases on the subject, came to the conclusion that a material question common to all the parties to the suit and to third parties should be tried once for all. He held that to secure this result the court bad a discretion to add parties-a discretion which has to be judicially exercised, that is, that by adding the new parties the court should not inflict injustice upon the parties already on the record, in the sense (1) 2 All E. R. 525. ", "(2) (1881) I.L.R. 5 Mad. 52. ", "1121 ", "that they would be prejudiced in the fair trial of the questions in controversy. ", "The two Madras decisions in for Hindu Religious Enclowmentg, Madras (1) and (2) appear to have taken conflicting views on the question whether could be added as a party to the litigation not because it was directly interested in the subjectmatter of the litigation, but because the law enacted by the legislature of that State had been questioned. this controversy appears to have been raised in in the case of Mst. (3). In that case the provincial legislature of the United Provinces, as it then was, had enacted the United Provinces Regularization of Remissions Act (XIV of 1938) precluding the courts from entertaining any question as to the validity of certain orders of remission of rents. The validity of that Act was questioned in a litigation between a landlord and his tenants. At the stage was added as a party to the litigation at the instance of the Advocate-General, with a view to enabling the to come up in appeal to in order to obtain a more authoritative pronouncement on the vales of the Act. In the power of the to add as a party was specifically questioned. noticed the two Madras decisions referred to above but assumed that there was jurisdiction in the in a proper case to do so, and, therefore, did not express his considered opinion in view of the fact that his two colleagues, and had agreed, though for different reasons, in the view that the had jurisdiction to implead the though it was only indirectly interested in the litigation. J. was inclined to take the view that there was a discretion in the to add the as a party. On the other hand, (1) (1926) I.L.R. 50 Mad. 34. (2) A.I.R. 1929 Mad 443. (3) F.C.R. 110. ", "1122 ", "was inclined to take the view that the did not stand on the same footing as a private third party for all purposes. He took the view that the as the guardian of the public interest should not be called upon to show some pecuniary or proprietary interest or interest in public revenue in the questions involved, to be added as a party. He also observed that in a case where the intervention was concerned, \" it must be decided on broad grounds of justice and convenience and not merely as turning on the interpretation of a particular rule in the Civil Procedure Code.\" Discussing the question whether it was a matter of discretion or of Jurisdiction in the court to make an order adding a party, the learned Judge made the following observations :- ", "\" In my opinion, there is no case here of defect of jurisdiction in the sense in which it is said that consent cannot cure a defect of jurisdiction. It is true that in v. (1), observed that the question was not one of \" discretion but of jurisdiction \". But as the antithesis shows, the learned L. J. apparently had in mind the difference between the decision of the question of joinder on the interpretation of a rule of law and a direction given by the lower court in the exercise of its discretion, because in the latter case the court of appeal would generally be reluctant to interfere. It may even be regarded as a case of excess of jurisdiction within the meaning of s. 115 of the Civil Procedure Code, but that will not make the order void in the sense that it may be ignored or treated as if it had never been passed.\" It would thus appear that the courts in India have not treated the matter of addition of parties as raising any question of the initial jurisdiction of the court. It may sometimes involve a question of jurisdiction in the limited sense in which it is used in s. 115 of the Code of Civil Procedure. It is no use multiplying references bearing on the construction of the relevant rule of the Code relating to addition of parties. Each case has to be determined on its own facts, and it has to be recognized that no decided cases have been brought to our notice which (1) [1892] 1 Ch. 487. ", "1123 ", "can be said to be on all fours with the facts and circumstances of the present case. There. ,cannot be the least doubt that it is firmly established as a result of judicial decisions that in order that a person may be added as a party to a suit he should have a direct interest in the subject-matter of the litigation whether it raises questions relating to moveable or immoveable property. In the instant case, we are not concerned with any controversy as regards property or estate. Hence, all the cases cited at the bar, laying down that a person who has no present interest in the subjectmatter cannot be added, are cases which were con- cerned with property rights. In this case, we are concerned primarily with a declaration as regards status which directly comes under the provisions of s. 42 of the Specific Relief Act. We are concerned, in this case, with the following provisions of s. 42 :- ", "\" 42. Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying. or interested to deny, his title to such character or right, and the may in its discretion make therein a declaration that he is so entitled, and, the plaintiff need not in such suit ask for any further relief.\" This section recognizes the right in any person to have a declaration made in respect of his legal character or any right to property. To such a suit for a mere declaration, any person denying or interested to deny the existence of any legal character or the alleged right to any property, would be a necessary party. The plaintiff appellant chose to implead only her alleged husband, the . There is no clear averment in the plaint that the defendant had ever denied the legal character in question, namely, the status of the plaintiff as his wife. The substance of the plaintiff's cause of action is stated in para. 3 of the plaint. From the words used in the said para. of the plaint, it is clear that the persons who are alleged to have known the existence of the relationship of husband and wife between the parties would include the respondents 1 and 2, and that the had been trying to suppress the fact of the marriage with the plaintiff so as to lead the members of his family to conclude that the plaintiff is not his wife,. The gravamenofthechargeagaiiistthe is that \" he refuses to openly acknowledge the plaintiff as his legally wedded wife, \", and that this conduct has cast a cloud oil the plaintiff's status as such wife. Such a conduct on the part of the , it is further alleged, is not only injurious and detrimental to the rights of the plaintiff, but is adversely affecting the rights of the issue of the marriage, meaning thereby, the three daughters by the plaintiff. It is thus clear, as was contended on behalf of respondents I and 2, that reading between the lines of the averments aforesaid, it is suggested that not only the defendantrespondent 3-but the other inembers of his family, including respondents I and 2, were interested ill deying the plaintiff's alleged status, and that this suit-,\",as being instituted to clear the cloud cast not, only upon the plaintiffs status as a legally wedded wife, but upon the status of the three daughters by her. It is clear, therefore, that if the plaintiff had been less disingenuous and had impleaded the first and the second respondents also, as defendants in the suit, the latter could not have been discharged from the action on the ground that they had been unnecessarily impleaded and that no cause of action bad been disclosed against them. They would certainly have been proper parties to the suit. This is a very important aspect of the case which has to be kept ill view in order to determine the question whether respondonts, 1 and 2 had been rightly added as defendants on their own intervention. It is also clear on the words of the statute, quoted above, that the grant of a declaration such as is contemplated by s. 42, is entirely in the discretion of the court. At this stage it is convenient to deal with the other contention raised on behalf of the appellant namely, that in view of the unequivocal admission of the plaintiffs claim by the in his written statement and repeated as aforesaid in his counter to the application for intervention by respondents I and 2, no serious controversy now survives. It is suggested that the declarations sought in this case would be granted as a matter of course. In this connection, our attention was called to the provisions of r. 6 of 0. 12 of the Code of Civil Procedure, which lays down that upon such admissions as have been made by the in this case the court would give judgment for the plaintiff. These provisions have got to be read along with r. 5 of 0. 8 of the (,ode with particular reference to the proviso which is in these terms:- ", "\" Provided that the may in its discrettion require any fact so admitted to be proved otherwise than by such admission.\" ", "The proviso quoted above is identical with the proviso to s. 58 of the Indian Evidence Act, which lays down that facts admitted need not be proved. Reading all these provisions together, it is manifest that the court is not bound to grant the declarations prayed for even though the facts alleged in the plaint may have been admitted. In this connection, the following passage in 's \" Actions for Declaratory Judgments \", Vol. 1, p. 340, under art. 177 , is relevant:- ", "\" A claim of legal or equitable rights and denial thereof on behalf of an adverse interest or party constitutes a ripe cause for a proceeding, seeking declaratory relief. A declaration of rights is not proper where the defendant seeks to uphold the plaintiff-, in such an action. The required element of adverse parties is absent.\" \" In others words the controversy must be between the plaintiff and the respondent who asserts an interest adverse to the plaintiff. In the absence of such a situation there is no justiciable controversy and the case must be characterized as one asking for an advisory opinion, and as being academic rather than justiciable...............\" \" i.e., there must be an actual controversy of justiciable character between parties having adverse interest.\" Hence, if the court, in all the circumstances of a parti- cular case, takes the view that it would insist upon the burden of the issue being fully discharged, and if the, court, in pursuance of the terms of s. 42 of the Specific Relief Act, decides, in a given case, to insist upon clear proof of even admitted facts, the court could not be said to have exceeded its judicial powers. That the plaintiff herself or her legal advisers did not take the view contended for on her behalf, is shown by the fact that a few days after the filing of the written statement of the Prince, on April 27, , the Mujtahid, who is alleged to have solemnized the marriage, was examined in court, and he gave his statement on oath in support of the plaintiff's claim. He also proved certain documents in corroboration of the plaintiff's case and his own evidence. This witness was not cross-examined on behalf of the defendant. It was stated before us, on behalf of respondents 1 and 2, that there were pieces of documentary evidence apart from certain alleged admissions made by or on behalf of the plaintiff, which seriously militate against the plaintiff's case and the statement of the witness referred to above. We need not go into all that con- troversy, because we are not, at this stage, concerned with the truth or otherwise of the plaintiffs case. At this stage we are only concerned with the question whether in adding respondents I and 2 as defendants in the action, the courts below have exceeded their powers. It is enough to point out at this stage that the plaintiff did not invite the court to exercise its powers under r. 6 of 0. 12 of the Code of Civil Procedure, and, therefore, we are not called upon to decide whether the trial court was right in not pronouncing judgment on mere admission. The court, when it is called upon to make a solemn declaration of the plain- tiff's alleged status as the defendant's wife, has, naturally, to be vigilant and not to treat it as a matter of course, as it would do in a mere money claim which is admitted by the defendant. The adjudication of status, the declaration of which is claimed by the plaintiff, is a more serious matter, because by its intendment and in its ultimate result it affects not only the persons actually before,the court in the suit as originally framed, but also the plaintiff's progeny who are not parties to the action, and the respondents 1 and 2. ", "1127 ", "If the declaration of status claimed by the plaintiff is granted by the court, naturally the three daughters by the plaintiff would get the status of legitimate children of the . If the decision is the other way, they become branded as illegitimate. The suit clearly is not only in the interest of the plaintiff herself but of her children also. It is equally clear that not only the is directly affected by the declaration sought, but his whole family, including respondents I and 2 and their descendants, are also affected thereby. This, naturally leads us to a discussion of the effect of s. 43 of the Specific Relief Act, which goes with and is an integral part of the scheme of declaratory decrees which form the subject-matter of Ch. VI of the Act. That section is in these terms:- \" 43. A declaration made under this Chapter is binding only oil the parties to the suit, persons claiming through them respectively, and where any of the parties are trustees, on the persons for whom, if in existence at the date of the declaration, such parties would be trustees.\" On behalf of the appellant it was contended by the learned Attorney-General that the declaration of status sought in this suit by the plaintiff will be binding only upon her and the , and being a rule of' res judicata will bind only the parties to the suit and their privies. It was further contended that respondents I and 2 are in no sense such privies. The argument proceeds thus: Section 43 lays down a rule of res judicata in a modified form, and it was so framed as to make it clear beyond all doubt by the use of the word \" only \" that a declaration under s. 42 is binding on the parties to the suit and on persons claiming through them respectively. If any question arises in the future after the inheritance to the estate of the, opens out, it could not be said that the plaintiff and respondents 1 and 2 were claiming through different persons under a conflicting title which was the core of the rule of res judicata. In this connection, reliance was placed upon the decision of 'in the case of v. (1). That case lays down that a decision in a former suit that the common ancestor of all the parties to the subsequent suit was entitled to the whole of the profit of a market in dispute in the two litigations, as against his co- sharers in the zamindari in which the market was situate, does not operate as res judicata in a subsequent dispute between those who claim under him. In this connection, reliance was also placed upon a decision of in the case of (2), to the same effect. Mr. , appearing on behalf of the ., the third respondent, supported the appellant by raising a further point that the words \" claiming through \" mean the same thing as \" claiming under in s. 11 of the Code of Civil Procedure, laying down the rule of res judicata, and that those words are not apt to refer to a declaration. of a more personal status, and that they mean the same thing as pi-ivy in estate ,is understood under the common law. He called our attention to the following passage in ' Bigelow on Estoppel', 6th Edn., at pp. 158 and 159:- ", "\" In the law of estoppel one person becomes privy to another (1) by succeeding to the position of that other as regards the Subject of the estoppel, (2) by holding in subordination to that other...................... But it should be noticed that the ground of privity is property and not personal relations To make a man a privy to an action he must have acquired an interest in the subject-matter of the, action either by inheritance, succession, or purchase from a party subsequently to the action, or he must hold property sub- ordinately.\" ", "He also drew our attention to similar observations in \" Casperz on Estoppel\". On the other hand, Mr. and Sir , appearing on behalf of respondents I and 2, respectively, contended that \" claiming through \" and \" claiming under \" have not exactly the same significance in law, and that the rule laid down in s. 43 of the Specific Relief Act does not stand on the same footing as a rule of res judicata contained in s. II of the Code of (1) (1903) L.R. 30 I.A. 71. ", "(2) (1882) I.L. R. 6 ivlad. 43. ", "1129 ", "Civil Procedure, or estoppel by judgment, as discussed in the works of and (, relied upon on behalf of the other side. On behalf of respondents I and 2 it was further contended that the suit was really intended not to bind the Prince who has shown no hostility to the claim, but to bind respondents 1 and 2. It was also contended that if the court were to grant the declaration that the plaintiff is the lawfully wedded wife of the Prince, if a controversy arises hereafter between the plaintiff and her children on the one side and respondents I and 2 on the other, this judgment will not only be admissible in evidence in that litigation, but will be binding upon thereon the plaintiff', because she is privy to the judgment, and oil her children, because they will be claiming the benefit of the declaration through her, and on respondents I and 2 because they are admittedly the wife and son of the Prince and will be manifestly claiming through him. ", "In this connection, it has to be remarked that the discretion vested in a court to grant a merely declaratory relief as distinguished from a judgment which is capable of being enforced by execution, derives its utility and importance from the objects it has in view, namely to \" prevent future litigation by removing existing causes of controversy to quiet title\" and \"to perpetuate testimony \", as also to avoid multiplicity of proceedings. This practice of granting declaratory reliefs, which originated in England in the Equity courts, has been very much extended in America by statutory provisions. In India, the law has been codified in the Specific Relief Act , in Ch. VI, and has, in a sense, extended the scope of the rule by providing for declarations not only in respect of claims to property but also in respect of disputes as regards status. From the terms of s. 42 of the Act, it would appear that the Indian courts have not been empowered to grant every form of declaration which may be available in America. In its very entire, a declaratory decree does not confer any new right, but only clears Lip mists which may have gathered round the title to property or to status or a legal character. When a court makes a declaration in respect of a disputed status, important rights flow from such a judicial declaration. Hence, a declaration granted in respect of a legal character or status in favour of a person is meant to bind not only persons actually parties to the litigation, but also persons claiming through them as laid down in s. 43 of the Act. It is, thus, a rule of substantive law, and is distinct and separate from the rule of res judicata or estoppel by judgment. The doctrine of res judicata, as it has been enunciated in a number of rules laid down in s. 11 of the Code of Civil Procedure, covers a much wider field than the rule laid down in s. 43 of the Specific Relief Act. For example, the doctrine of res judicata lays particular stress upon the competence of the court. On the other hand, s. 43 emphasizes the legal position that it is a judgment in personam as distinguished from a judgment in rem. A judgment may be res judicata in a subsequent litigation only if the former court was competent to deal with the later controversy. No such considerations find a place in s. 43 of the Specific Relief Act. Again, a previous judgment may be res judicata in a subsequent litigation between parties even though they may not have been eo nomine parties to the previous litigation or even claiming through -them. For example, judgment in a representative suit, or a judgment obtained by a presumptive reversioner will bind the actual reversioner even though he may not have been a party to it, or may not have been claiming through the parties in the previous litigation. ", "When a declaratory judgment has been given, by virtue of s. 43 , it is binding not only on the persons actually parties to the judgment but their privies also, using the term 'privy' not in its restricted sense of privy in estate, but also privy in blood. Privity may arise (1) by operation of law, for example, privity of contract; (2) by creation of subordinate interest in property, for example, privity in estate as between a landlord and a tenant, or a mortgagor and a mortgagee; and (3) by blood, for example, privity in blood in the case of ancestor and heir. Otherwise, in some conceivable cases, the provisions of s. 43 , quoted above, would become otiose. The contention raised on behalf of the appellant, which was strongly supported by the third respondent through Mr. , as stated above, is that a declaratory judgment would not bind anyone other than the party to the suit unless it affects some property, in other words, unless the parties were privy in estate. But such a contention would render the provisions of s. 43 aforesaid, applicable only to declarations in respect of property and not declarations in respect of status. That could not have been the intendment of the statutory rule laid down in s. ", "43. Sections 42 and 43 , as indicated above, go together, and are meant to be co-extensive in their operation. That being so, a declaratory judgment in respect of a disputed status, will be binding not only upon the parties actually before the court, but also upon persons claiming through them respectively. The use of the word only' in s. 43 , as rightly contended on behalf of the appellant, was meant to emphasize that a declaration in Ch. VI of the Specific Relief Act, is not a judgment in rem. But even though such a declaration operates only in personam, the section proceeds further to provide that it binds not only the parties to the suit, but also persons claiming through them, respectively. The word I respectively' has been used with a view to showing that the parties arrayed on either side, are really claiming adversely to one another, so far as the declaration is concerned. This is another indication of the sound rule that the court, in a particular case where it has reasons to believe that there is no real conflict, may, in exercise of a judicial discretion, refuse to grant the declaration asked for for oblique reasons. As a result of these considerations, we have arrived at the following conclusions:- ", "(1) That the question of addition of parties under r. 10 of ", "0. I of the Code of Civil Procedure, is generally not one of initial jurisdiction of the court, but of a judicial discretion which has to be exercised in view. of all the facts and circumstances of a particular case; but in some cases, it may raise controversies as to the power of the court, in contra distinction to its inherent jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in s. 115 of the Code; (2)That in a suit relating to property in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest in the subject matter of the litigation; ", "(3)Where the subject-matter of a litigation is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party it would be in a better position effectually and completely to adjudicate upon the controversy ; (4)The cases contemplated in the last proposition have to be determined in accordance with the statutory provisions of ss. 42 and 43 of the Specific Relief Act ; ", "(5)In cases covered by those statutory provisions the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon a clear proof apart from the admission; ", "(6)The result of a declaratory decree on the question of status such as in controversy in the instant case affects not only the parties actually before the court but generations to come, and, in view of that consideration, the rule of I present interest' as evolved by case law relating to disputes about property does not apply with full force; and (7)The rule laid down in s. 43 of the Specific Relief Act is not exactly a rule of res judicata. It is narrower in one sense and wider in another. ", "Applying the propositions enunciated above to the facts of the instant case, we have come to the conclusion that the courts below did not exceed their power in directing the addition of respondents I and 2 as parties-defendants in the action. Nor can it be said that the exercise of the discretion was not sound. Furthermore, this case comes before us by special leave and we do not consider that it is a fit case where we should interfere with the exercise of discretion by the courts below. The appeal is, accordingly, dismissed. As regards the question of costs, we direct that it will abide the ultimate result of the litigation and will be disposed of by the trial court. ", " regret I cannot agree with the opinion of my learned brethren expressed in the judgment just delivered. The appellant in her plaint had asked for a declaration that she was a legally wedded wife of respondent 3 and that she was also entitled to receive from him Kharch-e-Pandan at the rate of Rs. 2,000 per month. This respondent filed his written statement in which he unequivocally admitted that the appellant was married to him and that she was also entitled to the Kharch-e-Pandan as claimed in the plaint. He further admitted that the appellant bore him three issues out of the marriage. The appellant sought no relief or any declaration against respondents 1 and 2 as, indeed, she could not have, because she had no cause of action against them. There is nothing in the pleadings of the appellant and respondent 3 which discloses that respondents I and 2 have any cause of action against the appellant. Respondents 1 and 2, however, filed an application under 0. 1, r. 10(2), of the Code of Civil Procedure before the Judge of , Hyderabad, praying that they should be added as parties to the suit filed by the appellant. The Judge of allowed the application and his decision was affirmed by . The question for decision in this appeal is whether the J@dge of was justified in adding respondents I and 2 as parties to the suit and whether the decision of upholding his order should be affirmed. The provisions of 0. 1, r. 1, state as to who may be joined as plaintiffs in a suit and 0. 1, r. 3, states who may be joined as defendants. The parties who are to be joined as plaintiffs and defendants in a suit are persons in whom and against whom any right to relief in respect of or arising out of the same act or transaction or series of acts or transactions is alleged to exist, whether jointly, severally or in the alternative, where, if such persons were parties in separate suits, any common question of law or fact would arise. Independent of this, a court has jurisdiction under 0.1, r. 10(1), to substitute or add as plaintiff any person whom it considers necessary for the determination of the real matters in dispute. Under 0. 1, r. 10(2), the court has the power to strike off a party who has been improperly joined, whether as plaintiff or defendant, and to join, as plaintiff or defendant, any person who ought to have been joined, or whose presence before the court may be necessary in order to enable it effectually and completely to adjudicate upon and settle all the questions involved in the suit. It is quite obvious from the contents of the plaint and the written statement of respondent 3 that there was no occasion for the appellant to have joined respondents I and 2 as defendants in the suit. There remains, then, to consider whether the circumstances appearing in this case justified the Judge of to add respondents 1 and 2 as defendants under the provisions of 0. 1, r. 10(2). Respondents 1 and 2 in their application under 0. 1, r. 10(2), of the Code of Civil Procedure, in essence, relied upon the five following grounds for their plea that they should be added as defendants in the suit: ", "(1)That respondent I was the lawful and legally wedded wife of respondent 3, (2) That respondent 2 was the son of respondent 3, (3) That respondents 1 and 2 should be joined as parties to the suit because the question to be adjudicated upon would seriously affect their rights and interest in the estate of respondent 3, (4)That by adding respondents 1 and 2 as parties neither a new cause of action would be introduced nor would the nature of the suit be altered, (5)That the issue to be tried in the suit, after res- pondents I and 2 were added as parties, would still be the same as the case made by the appellant was that respondent 3 was interested in denying the appellant's marriage to respondent 3-a fact which respondents I and 2 were equally interested in denying. ", "The first two grounds afford no justification for respon- dents I and 2 being added as parties to the suit, where the only question to be decided is whether the appellant is married to respondent 3 and whether he had contracted to pay to the appellant Rs. 2,000 a month as . Even if the appellant successfully proved that she was married to respondent 3, who had contracted to pay her Rs. 2,000 per month as , the status and the rights of respondents I and 2 as wife and son of respondent 3 would remain unaffected. A Mohammedan is entitled to marry more than once and have wives to the number four at one and the same time. This is his right under his personal law and no one can question the exercise of this right by him. In the suit between the appellant and respondent 3, the question as to whether the appellant was married to respondent 3 was a matter entirely personal to the appellant and respondent 3. The appellant claimed that she was lawfully married to respondent 3. It was open to respondent 3 to either deny or admit her claim. In fact, respondent 3 had admitted the claim of the appellant that she was married to him. It is not open to anyone else in the present litigation to say that he has falsely made such an admission. It is true that respondents 1 and 2 have alleged collusion between the appellant and respondent 3. No positive facts are asserted in support of this. The suggestion is based merely on suspicion. Unless the court is justified in adding respondents 1 and 2 as defendants in the suit the suggestion made by them that there is collusion between the appellant and respondent 3 should be ignored by the court on the simple ground that respondents 1 and 2 have no locus standi to make any such representation in the present case. The 3rd, 4th and 5th grounds may be considered together as they are inter-connected. Grounds 4 and 5 suggest that there would be neither a new cause of action introduced nor would the nature of the suit be altered and the issue to be tried in the suit would still be the same even if respondents I and 2 were added as parties. The only issue in the suit filed by the appellant is whether she was married to respondent 3 and whether there was a contract by the latter to pay her Rs. 2,000 per month as . If respondents I and 2 are added as parties, questions relating to right of inheritance in the estate of respondent 3 would arise for determination in addition to the only issue stated above in the case. The main ground, upon which respondents 1 and 2 claim that they should be added as parties to the suit, is to be found in the 3rd ground which, in substance, is that if the appellant is declared to be lawfully wedded to respondent 3, then the rights and interests of respondents I and 2 in the estate of respondent 3 would be affected. In other words, in the estate of respondent 3, on his death, in addition to respondents 1 and 2, the appellant and her three children by him would have rights of inheritance. Consequently, the extent of inheritance of respondents I and 2 in the estate of respondent 3 would be considerably diminished. It was urged that if the appellant is given the declaration, which she seeks, the judgment of the court would be in the exercise of matrimonial jurisdiction and it would be a judgment in rem as stated in s. 41 of the Indian Evidence Act. Such a declaration would also be binding on respondents 1 and 2 by virtue of the provisions of s. 43 of the Specific Relief Act. The appellant asked for a declaration under s. 42 of the Specific Relief Act. This section permitted a person who claimed to be entitled to any legal character, or to any right to property, to institute a suit against any person denying, or interested to deny, such character or right. Respondents 1 and 2 was interested in denying the appellant's status as a wife and the status of her three children as the legitimate children of respondent ", "3. A declaration in her favour would be binding on respondents I and 2 and they would never be in a position to disprove the appellant's marriage to respondent 3. This was an impossible situation where the declaration had been obtained from a court as the result of collusion between the appellant and respondent 3. ", "This submission presupposes that respondents I and 2 would survive respondent 3. During the lifetime of respondent 3 neither the appellant nor her children on the one hand nor respondents 1 and 2 on the other have any right,-, whatsoever in his estate under the Mohammedan law. During the lifetime of respondent 3 respondents I and 2 would have the right to be maintained by him and, if the appellant is also his wife, then she and her children would also have the right to be maintained by him. The appellant and respondent 1 would also have rights arising out of a contract, if any, between them and respondent 3. None of these rights, however, are rights or interests in the estate of respondent 3. The submission also presupposes that on the death of respondent 3 he would have left behind some estate to be inherited by his heirs. These submissions are entirely speculative and afford no basis for the impleading of respondents 1 and 2 as parties to the appellant's suit. It was said, however, that the right to inherit is a present right in respondents 1 and 2 and if the appellant is declared to be the wife of respondent 3, then that right to inheritance is affected. This contention is erroneous and there is no legal basis to support it. If the appellant is declared to be the wife of respondent 3 such a declaration could not affect the right to inherit on the part of respondents I and 2 in the estate of respondent 3, assuming that respondent 3 on his death left an estate to be inherited and that the appellant and her children and respondents I and 2 survived him. The extent of the inheritance of each one of these may thus become less but so far as that is concerned it cannot be predicated during the lifetime of respondent 3 as to what would be the extent of the inheritance of his heirs. Under the Mohammedan law, by which the parties are governed, respondent 3 could yet validly marry two other women and have children from them, in which case, the inheritance, if any, could not be to the same extent if respondent 3 died leaving only respondents I and 2 as his heirs. The entire question raised by res- pondents I and 2 is based on the supposition that they have rights in the estate of respondent 3. Under the Mohammedan law they have no such rights. It is only in the event of their surviving respondent 3 that their rights will vest in his estate and the extent of their inheritance will be calculated on the number of persons entitled to inherit his estate at the time of his death. ", "It was urged, however, that unless respondents 1 and 2 are now given an opportunity to show that there was no valid marriage between the appellant and respondent 3, a declaration that there was a marriage between these two persons would be binding on them by virtue of the provisions of s. 43 of the Specific Relief Act. If, therefore, on the death of respondent 3 a question arose as to who were entitled to inherit his estate, respondents I and 2 would not be able to question the rights of the appellant and her children and they would be adversely affected by the declaration. It is somewhat doubtful, having regard to the terms of s. 43 , that such a declaration in the present suit would be binding on respondents I and 2 as they would not be claiming their right to inheritance through the appellant and respondent 3 respectively. Assuming, however, that such a declaration would be binding on them, that would be no justification for their being impleaded in the present litigation where the issue is not one of inheritance but one of marriage between the appellant and respondent 3. If the submission has any substance it might as well be said by any one that he should be impleaded as a party to a suit and should be allowed to contest the suit, although there was no cause of action against him, because the decree in the suit would bind him on the ground of res judicata. It is true that in a suit under s. 42 of the Specific Relief Act it is discretionary with the court to make or not to make the declaration asked for. The exercise of that discretion, however, has to be judicial. In the present case there does not appear to be any legal impediment in the way of the court refusing to make the declaration asked for since respondent 3 had acknowledged the marriage and had admitted the claim for Rs. 2,000 per month as . The appellant has not asked for any sum of money to be decreed in her favour. There is no cause of action now left to the appellant which can be the basis for the present suit. The appellant could rely upon the acknowledgement which raises a presumption under the Mohammedan law that she is married to respondent 3. There appears to be no good ground for adding respondents I and 2 as parties to the present suit. If hereafter on the happening of a certain event and the existence of certain circumstance any question arose whether the appellant was married to respondent 3, then those who were interested in disproving the marriage would be in a position to do so and rebut the presumption arising from the acknowledgement. Under O. 1, r. 10, of the Code of Civil Procedure the court has the power to pass orders regarding the adding of parties or striking off the name of a party. Whether the exercise of this power is a matter of jurisdiction or of discretion appears to have been the subject of difference of opinion in the courts of law here and in England. Whichever view may be correct it is. patent that resort to the exercise of such power could only be had if the court is satisfied that it is necessary to make an order under 0. 1, r. 10, in order to effectually and completely adjudicate upon and settle all questions involved in the suit. The court ought not to compel a plaintiff to add a party to the suit where on the face of the plaint the plaintiff has no cause of action against him. If a party is added by the court without whose ", "-presence all questions involved in the suit could be effectually and completely adjudicated upon, then the exercise of the power is improper and even if it be a matter of discretion such an order should not be allowed to stand when that order is questioned in a superior court. The plaintiff is entitled to choose as defendants against whom he has a cause of action and he should not be burdened with the task of meeting a party against whom he has no cause of action. It was, however, suggested that on the face of the plaint not only respondent 3 was interested in denying his marriage with the appellant but a legitimate inference could be drawn from the contents of the pleadings that respondents 1 and 2 were also interested in denying the marriage. No allegation made in the pleadings even remotely suggests that respondents I and 2 were interested to deny the alleged marriage of the appellant to respondent 3 or were denying the same. Under s. 42 of the Specific Relief Act a suit may be instituted against any person denying or interested to deny the plaintiffs legal character or right to any property. The plaint does not suggest that respondents 1 and 2 were denying the appellant's status as wife of respondent 3. Such an issue was raised by the appellant against respondent 3 only. In law, it cannot be said that respondents 1 and 2 are interested to deny the status of the appellant as the wife of respondent 3 because the status of respondent I as wife and respondent 2 as the son of respondent 3 is not in the least affected even if the appellant is declared to be the wife of respondent 3, as under the Mohammedan law respondent 3 is entitled to have both the appellant and respondent 1 as his wives and .children through them. The true legal position in the present suit between the appellant and respondent 3 is that respondents I and 2 have no locus standi in such a suit. There is no danger of multiplicity of suits during the lifetime of respondent 3. The suggestion that the present suit would lead to multiplicity of suits is founded on an assumption which no court of law can assume. It cannot be assumed that respondent 3 would die first. It may well be that he may survive both respondents I and 2, in which case, no question of any suit coming into existence at their instance would arise. If the order allowing respondents 1 and 2 to be added as parties in a suit of the present nature is allowed to stand it will open the way to a wider exercise of powers under 0. 1, r. 10, and in a manner which was not contemplated by the Code of Civil Procedure, or s. 42 of the Specific Relief Act or permissible under the Mohammedan law. I would, accordingly, allow the appeal as both the courts below were in error in supposing that this was a case in which the provisions of 0. 1, r. 10, applied and would set aside the orders of the courts below. The appellant is entitled to her costs throughout. ", "BY COURT: The appeal is dismissed. Costs to abide the result of litigation in the trial court. ", "Appeal dismissed. ", "1141"], "relevant_candidates": ["0000142305", "0000476231", "0001090299", "0001846280"]} {"id": "0000742753", "text": ["JUDGMENT , J. ", "At the instance of the assessees who are four in numbers, , Allahabad, by a consolidated order dated 24-3-1982, has referred the following two common questions of law under section 27(1) of the Wealth Tax Act, 1957 (hereinafter referred to as \"the Act\") for opinion to this court : ", "\" 1. Whether, on the facts and in the circumstances of the case and on a true interpretation of the trust deeds, was justified in law in concluding that the interest of each of the beneficiaries under these trusts on each of the valuation dates, was indeterminate and the beneficiaries were unknown and accordingly in holding that the assessments of the beneficial interests in the trust properties of the beneficiaries could be made on the trustees only under section 21(4) of the Wealth Tax Act, 1957 ? ", "2. Whether, on the facts and in the circumstances of the case and on a true interpretation of the provisions of section 25(2) of the Wealth Tax Act, 1957, the Commissioner had validly assumed jurisdiction and was justified in law in holding that the assessment made by the Wealth Tax Officer under section 21(2) of the Wealth Tax Act, 1957 were erroneous ?\" ", "It may be mentioned here that in respect of the wife of , the assessment years involved are 1974-75 to 1976-77 whereas in respect of the other three assessees, the assessment years involved are 1973-74 to 1977-78. ", "2. Briefly stated, the facts giving rise to the present reference are as follows:- ", "2. Briefly stated, the facts giving rise to the present reference are as follows:- ", "Each of the assessees is a private . The following is the table of relationships : ", " (deceased) Lt. Col. ", "Sukhdeo Mohan Lt. Col. (Died) Vinay Mohan Hemant Mohan Lt. Col. executed a deed dated 20-10-1973 in respect of 60,000 equity shares of for the benefit of the wife of . Under clause 2 of the said trust deed, in the event of her death or her otherwise becoming incapable of acquiring any interest in the property, the beneficiary was to be the second wife of (in case he married again) and in case his wife (first) became incapable of acquiring property, then the first son of Shri on his attaining majority. In clause 3 it was further provided that if the said Shri did not marry and/or in any manner all possibilities of his marriage disappeared, the beneficiary of the trust was to be Shri (upon his attaining majority) and failing him, to the other surviving heirs of Shri . In clause 4 it was provided that the trustee shall hold the trust property absolutely in trust for and for the benefit of the beneficiary named hereinbefore and administer the same in the manner provided therein. In clause 6 of the deed it was provided that the trust shall come to an end upon the transfer and delivery of the trust property and all the accumulation thereto to the beneficiary in the manner indicated therein whereupon the trustee shall stand discharged, otherwise the trust shall remain in full force. ", "3. Three similar trusts were earlier created on 22-5-1973 in respect of 60,000 equity shares of (i) by for the benefit of the first son of (in any circumstance), (ii) by Smt. for the benefit of the first son of and (iii) by Lt. Col. for the benefit of the first son of . In these trusts it was provided that in case the son named therein died before attaining the age of majority or otherwise became incapable of acquiring any interest in property, the beneficiary will be the next surviving male child. They also provided that if , or (as the case may be) did not beget a son and in any manner all possibilities of begetting a son disappeared and/or the male children having been born, died before attaining majority, the beneficiary would be , or himself (as the case may be). ", "3. Three similar trusts were earlier created on 22-5-1973 in respect of 60,000 equity shares of (i) by for the benefit of the first son of (in any circumstance), (ii) by Smt. for the benefit of the first son of and (iii) by Lt. Col. for the benefit of the first son of . In these trusts it was provided that in case the son named therein died before attaining the age of majority or otherwise became incapable of acquiring any interest in property, the beneficiary will be the next surviving male child. They also provided that if , or (as the case may be) did not beget a son and in any manner all possibilities of begetting a son disappeared and/or the male children having been born, died before attaining majority, the beneficiary would be , or himself (as the case may be). ", "Accordingly, the trustees named in each case, for the valuation dates as on 31-3-1973 to 31-3-1977 filed the return of wealth declaring the value of shares and accretions in regard thereto in the assessment years subsequent to 1973-74. The Wealth Tax Officer completed the assessments of these assessees in the status of individuals by invoking the provisions of section 21(1) / 21(2) of the Act on the basis that on each of the valuation dates the beneficiaries were known and that their shares were determinate. Subsequent to the making of these assessments and in view of the objection raised in the audit note the Wealth Tax Officer sought to rectify the assessments by issuing notices dated 27-8-1979 under section 35 of the Act on the ground that the status of the assessees had been wrongly adopted. However, the Wealth Tax Officer dropped the reassessment proceedings after considering the replies of the assessees. ", "4.Thereafter, the Commissioner acting under section 25(2) of the Act, issued notices to the assessees on 13-12-1979 to the effect that the assessments made by the Wealth Tax Officer under section 16(3) were erroneous insofar as they were prejudicial to the interest of the revenue inasmuch as the Wealth Tax Officer had assessed the assessees in the status of the individuals on the ground that the shares of the sole beneficiaries were determinate and had allowed exemptions under section 5(1A) . After considering the replies dated 20-10-1979 filed by each of the assessees, the Commissioner held that the beneficiaries for whom the assets were held by the trustees, were indeterminate and unknown and that the assessees should have been assessed to tax under section 21(4) of the Act. The exemption under section 5(1A) was also held to be inadmissible and, therefore, the tax was held to be leviable at the higher rate of 1.5%. He held that on the relevant valuation date had not married, and were themselves minors, and that had no son as he was married only in April, 1977. ", "4.Thereafter, the Commissioner acting under section 25(2) of the Act, issued notices to the assessees on 13-12-1979 to the effect that the assessments made by the Wealth Tax Officer under section 16(3) were erroneous insofar as they were prejudicial to the interest of the revenue inasmuch as the Wealth Tax Officer had assessed the assessees in the status of the individuals on the ground that the shares of the sole beneficiaries were determinate and had allowed exemptions under section 5(1A) . After considering the replies dated 20-10-1979 filed by each of the assessees, the Commissioner held that the beneficiaries for whom the assets were held by the trustees, were indeterminate and unknown and that the assessees should have been assessed to tax under section 21(4) of the Act. The exemption under section 5(1A) was also held to be inadmissible and, therefore, the tax was held to be leviable at the higher rate of 1.5%. He held that on the relevant valuation date had not married, and were themselves minors, and that had no son as he was married only in April, 1977. ", "5. The assessees being aggrieved preferred separate appeal before the . The after considering the submissions made by the respective parties was of the view that on each of the valuation date, there was no beneficiary named in the trust deed who could be said to have vested interest in the property of the trust and everyone named as beneficiary in the trust deed was to have a contingent interest which was incapable of getting vested on each of the valuation dates. Therefore, it was held that the assessment of beneficial interest in the trust property of the beneficiaries could be made on the trustees only under section 21(4) of the Act. The order passed by the Commissioner was upheld. ", "5. The assessees being aggrieved preferred separate appeal before the . The after considering the submissions made by the respective parties was of the view that on each of the valuation date, there was no beneficiary named in the trust deed who could be said to have vested interest in the property of the trust and everyone named as beneficiary in the trust deed was to have a contingent interest which was incapable of getting vested on each of the valuation dates. Therefore, it was held that the assessment of beneficial interest in the trust property of the beneficiaries could be made on the trustees only under section 21(4) of the Act. The order passed by the Commissioner was upheld. ", "6. We have heard , the learned senior counsel assisted by , Advocate, on behalf of the applicants, and , the learned Standing counsel appearing for the revenue. ", "6. We have heard , the learned senior counsel assisted by , Advocate, on behalf of the applicants, and , the learned Standing counsel appearing for the revenue. ", "The learned counsel for the applicants submitted that each of the trusts has been validly created. The beneficiaries and their interest was also known and determinate and, therefore, they were assessable under section 21(1) of the Act and not under section 21(4) of the Act. He further submitted that the Commissioner had initiated proceedings under section 25(2) of the Act on the basis of an audit objection to which the stand of the department was that the trust is assessable under section 21(1) of the Act and, therefore, the assessment order could not have been said to be either erroneous or prejudicial to the interest of the revenue. He submitted that the proceeding initiated under section 25(2) of the Act was wholly illegal and unwarranted. He relied upon the following decisions: ", "(i) . Kapil Mohan (2001) 252 ITR 830 (Del); ", "(ii) (2000) 243 ITR 83 (S C); ", "(iii) . (1983) 140 ITR 490 (P &H)) ", "(iv) (19971 228 ITR 195 (MP); ", "(v) (1979) 119 ITR 996 (SC) ", "(vi) CWT v. Smt. Arundhati Balkrishna Trust (1975) 101 ITR 626 (Guj); ", "(vii) Jeewanlal (1929) . CIT(1977) 108 ITR 407 (Cal.); ", "(viii) (2003)259 ITR 5025 (Guj); ", "(ix) Padmavati Jaykrishna Trust (1966) 61 ITR 66 (Guj); ", "(x) (1984) 147 ITR 5006 (Mad.); ", "(xi) (1989) 176 ITR 442 7 (Mad.); ", "(xii) v. CWT(1970) 77 ITR 6 (SC) and ", "(xiii) Aditanar Educational Institution v. Addl. CIT(1997) 224 ITR 310 (SC). ", "7. Sri , the learned counsel for the revenue, however, submitted that from a perusal of the trust deed it is clear that beneficiaries were not in existence on the relevant valuation dates in respect of each assessment years in question and, therefore, the beneficiaries were indeterminate and the provision of section 21(4) of the Act was applicable. According to him, the Wealth Tax Officer had assessed the trust under section 21(1) of the Act which order was not only erroneous but also prejudicial to the interest of the revenue and the Commissioner was within his right to exercise his jurisdiction under section 25(2) of the Act on the basis of the audit objection. He relied upon the following decisions: ", "7. Sri , the learned counsel for the revenue, however, submitted that from a perusal of the trust deed it is clear that beneficiaries were not in existence on the relevant valuation dates in respect of each assessment years in question and, therefore, the beneficiaries were indeterminate and the provision of section 21(4) of the Act was applicable. According to him, the Wealth Tax Officer had assessed the trust under section 21(1) of the Act which order was not only erroneous but also prejudicial to the interest of the revenue and the Commissioner was within his right to exercise his jurisdiction under section 25(2) of the Act on the basis of the audit objection. He relied upon the following decisions: ", "(i) (supra); and ", "(ii) CWT v. Trustee of (1977) 108 ITR 555 (SC). ", "8. Having heard the learned counsel for the parties, we find that the Wealth Tax Officer has assessed each of the applicants under section 21(1) of the Act. Subsequently, on the basis of the objection raised in the audit note, the Wealth Tax Officer sought to rectify the assessment by issuing notice under section 35 of the Act on the ground that the status of the assessees had been wrongly adopted which proceeding was subsequently dropped. Thereafter, the Commissioner initiated the proceeding under section 25(2) of the Act on the ground that the assessment order are erroneous and prejudicial to the interest of the revenue. The said action has been taken on the basis of the audit objection. ", "8. Having heard the learned counsel for the parties, we find that the Wealth Tax Officer has assessed each of the applicants under section 21(1) of the Act. Subsequently, on the basis of the objection raised in the audit note, the Wealth Tax Officer sought to rectify the assessment by issuing notice under section 35 of the Act on the ground that the status of the assessees had been wrongly adopted which proceeding was subsequently dropped. Thereafter, the Commissioner initiated the proceeding under section 25(2) of the Act on the ground that the assessment order are erroneous and prejudicial to the interest of the revenue. The said action has been taken on the basis of the audit objection. ", "9. In the case of (supra), has held that the opinion of an internal audit party of on a point of law cannot be regarded as information within the meaning of section 147(b) of the Income Tax Act, 1961 for the purpose of reopening an assessment. It has further held that although an audit party does not possess the power to pronounce on the law, it nevertheless may draw the attention of the to it. Law is one thing and its communication another. ", "9. In the case of (supra), has held that the opinion of an internal audit party of on a point of law cannot be regarded as information within the meaning of section 147(b) of the Income Tax Act, 1961 for the purpose of reopening an assessment. It has further held that although an audit party does not possess the power to pronounce on the law, it nevertheless may draw the attention of the to it. Law is one thing and its communication another. ", "10. In the case of (supra), has held that only if the order is erroneous and is likely to prejudice the interest of the revenue, the provision of section 263(1) of the Income Tax Act, 1961 which is analogous to the provision of section 25(2) of the Act, shall be attracted. ", "10. In the case of (supra), has held that only if the order is erroneous and is likely to prejudice the interest of the revenue, the provision of section 263(1) of the Income Tax Act, 1961 which is analogous to the provision of section 25(2) of the Act, shall be attracted. ", "11. In the case of (supra), has held that the prerequisite for exercise of jurisdiction by a Commissioner suo motu under section 263 of the Income Tax Act, 1961 is that the order of the is erroneous insofar as it is prejudicial to the interest of the revenue. The Commissioner has to be satisfied of the twin conditions, namely, (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the revenue. If one of them is absent, i.e., if the order of the is erroneous but is not prejudicial to the interest of the revenue or if the order of the is not erroneous but is prejudicial to the interest of the revenue, recourse cannot be had to section 263(1) of the Income Tax Act, 1961 and the provision cannot be invoked to correct each and every type of error committed by the assessing officer. It is only when an order is erroneous then the section will be attracted. has further held that the incorrect assumption of fact or incorrect assumption of law will satisfy the requirement of order being erroneous. The phrase \"prejudicial to the interest of the revenue\" is of wide import and is not confined to loss of tax. If due to an erroneous order of the , the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. has further held that every loss of revenue as a consequence of an order of the assessing officer, cannot be treated as prejudicial to the interests of the revenue, for example, when an adopted one of the course permissible in law and it has resulted in loss of revenue and where two views are possible and the has one view with which the Commissioner does not agree, it cannot be treated as erroneous order prejudicial to the interests of the revenue unless the view taken by the is unsustainable in law. ", "11. In the case of (supra), has held that the prerequisite for exercise of jurisdiction by a Commissioner suo motu under section 263 of the Income Tax Act, 1961 is that the order of the is erroneous insofar as it is prejudicial to the interest of the revenue. The Commissioner has to be satisfied of the twin conditions, namely, (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the revenue. If one of them is absent, i.e., if the order of the is erroneous but is not prejudicial to the interest of the revenue or if the order of the is not erroneous but is prejudicial to the interest of the revenue, recourse cannot be had to section 263(1) of the Income Tax Act, 1961 and the provision cannot be invoked to correct each and every type of error committed by the assessing officer. It is only when an order is erroneous then the section will be attracted. has further held that the incorrect assumption of fact or incorrect assumption of law will satisfy the requirement of order being erroneous. The phrase \"prejudicial to the interest of the revenue\" is of wide import and is not confined to loss of tax. If due to an erroneous order of the , the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. has further held that every loss of revenue as a consequence of an order of the assessing officer, cannot be treated as prejudicial to the interests of the revenue, for example, when an adopted one of the course permissible in law and it has resulted in loss of revenue and where two views are possible and the has one view with which the Commissioner does not agree, it cannot be treated as erroneous order prejudicial to the interests of the revenue unless the view taken by the is unsustainable in law. ", "12. In the case of (supra), has held that the notice under section 263 of the Income Tax Act, 1961 at the instance of without exercising his own discretion and judgment cannot be sustained. ", "12. In the case of (supra), has held that the notice under section 263 of the Income Tax Act, 1961 at the instance of without exercising his own discretion and judgment cannot be sustained. ", "13. In the case of (supra), has followed the principle laid down by in the case of (supra). ", "13. In the case of (supra), has followed the principle laid down by in the case of (supra). ", "14. In the case of (supra), has held that the power of revision conferred on the Commissioner by section 25 of the Act is not administrative but is quasi-judicial and in exercise of that power the Commissioner must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and decide the dispute according to procedure consistent with principles of natural justice. He cannot permit his judgment to be influenced by matters not disclosed to the assessee nor by direction of another authority. ", "14. In the case of (supra), has held that the power of revision conferred on the Commissioner by section 25 of the Act is not administrative but is quasi-judicial and in exercise of that power the Commissioner must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and decide the dispute according to procedure consistent with principles of natural justice. He cannot permit his judgment to be influenced by matters not disclosed to the assessee nor by direction of another authority. ", "15. In the case of Brig. (supra), has held that the first son of trust to be valid trust. ", "15. In the case of Brig. (supra), has held that the first son of trust to be valid trust. ", "16. In the case of (supra), has held that if a trust specifies the condition laid down in section 13 of the Transfer of Property Act, 1882 a trust may be created even in favour of an unborn person. ", "16. In the case of (supra), has held that if a trust specifies the condition laid down in section 13 of the Transfer of Property Act, 1882 a trust may be created even in favour of an unborn person. ", "17. In the case of (supra), has held that a valid trust can be created for prospective wives of minor sons. ", "17. In the case of (supra), has held that a valid trust can be created for prospective wives of minor sons. ", "18. In the case of (supra), has held that the language of section 10(22) of the Income Tax Act, 1961 is plain and clear and the availability of exemption should be evaluated each year to find out whether the institution existed during the relevant year solely for educational purposes and not for purposes of profit. The emphasis is that for considering the exemption evaluation should be made each year regarding the purpose for which the institution existed. ", "18. In the case of (supra), has held that the language of section 10(22) of the Income Tax Act, 1961 is plain and clear and the availability of exemption should be evaluated each year to find out whether the institution existed during the relevant year solely for educational purposes and not for purposes of profit. The emphasis is that for considering the exemption evaluation should be made each year regarding the purpose for which the institution existed. ", "19. In the case of (supra), has held that section 21(4) of the Act would apply where the shares of the beneficiaries were indeterminate or unknown, i.e., where the settler had not determined or specified the shares. ", "19. In the case of (supra), has held that section 21(4) of the Act would apply where the shares of the beneficiaries were indeterminate or unknown, i.e., where the settler had not determined or specified the shares. ", "20. In the case of (supra), was considering a case under section 161(1) of the Income Tax Act, 1961. In that case., a registered settlement deed on 26-11-1979 was executed by creating a private clause 4 of the deed dealt with the distribution. It provided that the date of distribution means the day on which shall expire the period of 20 years after execution of the settlement or such earlier or later day as the trustees may in their absolute discretion at any time appoint. The shares of the beneficiaries were also specified. had held that the beneficiaries were not required to do anything but to stand wait for something to fall to their respective shares in accordance with the settlement deed, They were merely body of individual and not an association of persons with any intention to carry on common activity to produce taxable income and, therefore, the assessment of the trust would be made under section 161(1) of the Income Tax Act, 1961. ", "20. In the case of (supra), was considering a case under section 161(1) of the Income Tax Act, 1961. In that case., a registered settlement deed on 26-11-1979 was executed by creating a private clause 4 of the deed dealt with the distribution. It provided that the date of distribution means the day on which shall expire the period of 20 years after execution of the settlement or such earlier or later day as the trustees may in their absolute discretion at any time appoint. The shares of the beneficiaries were also specified. had held that the beneficiaries were not required to do anything but to stand wait for something to fall to their respective shares in accordance with the settlement deed, They were merely body of individual and not an association of persons with any intention to carry on common activity to produce taxable income and, therefore, the assessment of the trust would be made under section 161(1) of the Income Tax Act, 1961. ", "21. In the case of (supra), was considering a case where under the term of the trust deed the income from the trust properly was made payable to the daughter, in law of the settler for. a life and thereafter the corpus was to be divided and distributed in equal shares amongst the male child or children of the settler's son. During the accounting year relevant to 'the assessment year 1958-59, the settler's son had two sons, namely, 31-12-1957, the number of beneficiaries was definite and their shares were equal, there was no question of their shares being indeterminate and unknown arid, consequently, the provisions of sub-section (4) of section 21 would not apply. It further held that the possibility of a variation in the constitution of the family in future was immaterial and the assessment would have to be made under section 21(1) of the Act. ", "21. In the case of (supra), was considering a case where under the term of the trust deed the income from the trust properly was made payable to the daughter, in law of the settler for. a life and thereafter the corpus was to be divided and distributed in equal shares amongst the male child or children of the settler's son. During the accounting year relevant to 'the assessment year 1958-59, the settler's son had two sons, namely, 31-12-1957, the number of beneficiaries was definite and their shares were equal, there was no question of their shares being indeterminate and unknown arid, consequently, the provisions of sub-section (4) of section 21 would not apply. It further held that the possibility of a variation in the constitution of the family in future was immaterial and the assessment would have to be made under section 21(1) of the Act. ", "22. In the case of Trustee of HEM 's Family (Remainder Wealth) Trust (supra), has held that the question in regard to applicability of sub-section (1) or (4) of section 21 of the Act has to be determined with reference to the relevant valuation date. The Wealth Tax Officer has to determine who are the beneficiaries in respect of the remainder on the relevant valuation date and whether their shares are indeterminate or. unknown. It is not at all relevant whether the beneficiaries may change in subsequent years before the date of distributor depending upon contingencies which may come to pass in future arid so long it is possible that the beneficiaries are known and their shares are determinate, the possibility that the beneficiaries may change by reason of subsequent events such as birth or death would not take the case out of the ambit of sub-section (1) of section 21 of the Act. It has further held that if on the relevant valuation date it is not possible to say with certainty and definiteness as to who would be the beneficiaries and whether their shares would be determinate arid specific, if the event on the happening of which the distribution is to take place occurred on that date, the case will be governed by sub-section (4) of section 21 of the Act. has further held that when the beneficiaries are indeterminate or unknown then obviously their shares would also be indeterminate and unknown and they cannot conceive of a case where the share would be determined or named while the beneficiaries are indeterminate or unknown. According to , the expression \"where the shares of the beneficiaries are indeterminate or unknown\" carries with it, by necessary implication, a situation where the beneficiaries themselves are indeterminate or unknown. ", "22. In the case of Trustee of HEM 's Family (Remainder Wealth) Trust (supra), has held that the question in regard to applicability of sub-section (1) or (4) of section 21 of the Act has to be determined with reference to the relevant valuation date. The Wealth Tax Officer has to determine who are the beneficiaries in respect of the remainder on the relevant valuation date and whether their shares are indeterminate or. unknown. It is not at all relevant whether the beneficiaries may change in subsequent years before the date of distributor depending upon contingencies which may come to pass in future arid so long it is possible that the beneficiaries are known and their shares are determinate, the possibility that the beneficiaries may change by reason of subsequent events such as birth or death would not take the case out of the ambit of sub-section (1) of section 21 of the Act. It has further held that if on the relevant valuation date it is not possible to say with certainty and definiteness as to who would be the beneficiaries and whether their shares would be determinate arid specific, if the event on the happening of which the distribution is to take place occurred on that date, the case will be governed by sub-section (4) of section 21 of the Act. has further held that when the beneficiaries are indeterminate or unknown then obviously their shares would also be indeterminate and unknown and they cannot conceive of a case where the share would be determined or named while the beneficiaries are indeterminate or unknown. According to , the expression \"where the shares of the beneficiaries are indeterminate or unknown\" carries with it, by necessary implication, a situation where the beneficiaries themselves are indeterminate or unknown. ", "23. In the case of v. (1999) 240 ITR 409 (SC), was considering the following clauses of the trust deed executed by Sri of Kadiam in East Godavari District for the benefit of his three grandchildren and daughter:-- ", "23. In the case of v. (1999) 240 ITR 409 (SC), was considering the following clauses of the trust deed executed by Sri of Kadiam in East Godavari District for the benefit of his three grandchildren and daughter:-- ", "\"18. The trustee for the time being may, at his discretion, apply the whole or any portion of the income of the trust fund for the maintenance, education or advancement in life of the beneficiary and shall accumulate all the residue by investing the same in the aforesaid manner. ", "20. On the beneficiary completing the age of 25 years, the trustee shall transfer and make over to the beneficiary all the trust funds and on so transferring, this trust deed shall stand cancelled and be of no effect. ", "21. If the object for which the trust has been created fails and cannot be fulfilled, the trustee for the lime being shall be at liberty to apply the trust property to the benefit of the other sons, daughters of my last daughter, Mrs. , in the proportion of one share for a son and half-share for a daughter'.\" (p. 414) has held that- ", "\"On the basis of the aforesaid terms and conditions, it. is apparent that the rights of the beneficiaries to get the corpus of the trust fund conic into existence at the future date when the condition regarding the survival is fulfilled. , therefore, rightly arrived at the conclusion that interest of beneficiary is indeterminate or unknown and is contingent and, therefore, held that section 21(4) would be applicable. In this view of the matter, there is no substance in the contention of learned counsel for the appellant that the trust should be assessed tinder section 21(1) of the Wealth Tax Act.\" (p. 414) ", "24. From a perusal of the notice issued under section 25(i) of the Act, it appears that the Commissioner had examined the assessment record of each of the assessees and had independently arrived at the conclusion that the orders passed under section 16(3) of the Act by the Wealth Tax Officer was erroneous and prejudicial to the interest of' the revenue. The audit objection was only a piece of opinion which might have been taken into consideration by the Commissioner but his decision is not solely based on (lie audit objection. He has also applied his independent mind and, therefore, in view of the principle laid down by in the cases of Trustee of HEM (supra) and (supra), the view taken by the Wealth Tax Officer that the assessment should have been made tinder section 21(1) of the Act is unsustainable in law. Thus, the orders are not only erroneous but also prejudicial to the interest of the revenue. In this view of the matter, the Commissioner was justified in assuming jurisdiction under section 25(2) of the Act.. ", "24. From a perusal of the notice issued under section 25(i) of the Act, it appears that the Commissioner had examined the assessment record of each of the assessees and had independently arrived at the conclusion that the orders passed under section 16(3) of the Act by the Wealth Tax Officer was erroneous and prejudicial to the interest of' the revenue. The audit objection was only a piece of opinion which might have been taken into consideration by the Commissioner but his decision is not solely based on (lie audit objection. He has also applied his independent mind and, therefore, in view of the principle laid down by in the cases of Trustee of HEM (supra) and (supra), the view taken by the Wealth Tax Officer that the assessment should have been made tinder section 21(1) of the Act is unsustainable in law. Thus, the orders are not only erroneous but also prejudicial to the interest of the revenue. In this view of the matter, the Commissioner was justified in assuming jurisdiction under section 25(2) of the Act.. ", "25. So far as the question as to whether the shares of the beneficiaries were determined or not, it may be mentioned here that each of the four trust deeds contained identical clauses with variations in the names. In the trust deed dated 20-10-1975, executed by Major , on 20-10-1975, the beneficiaries of the trust had been the wife of Sri son of late Padma Bhushan Col. . The following clauses 2 and 3 of the said trust deed are relevant and are reproduced below:- ", "25. So far as the question as to whether the shares of the beneficiaries were determined or not, it may be mentioned here that each of the four trust deeds contained identical clauses with variations in the names. In the trust deed dated 20-10-1975, executed by Major , on 20-10-1975, the beneficiaries of the trust had been the wife of Sri son of late Padma Bhushan Col. . The following clauses 2 and 3 of the said trust deed are relevant and are reproduced below:- ", "\"2. That the beneficiary of this trust is and shall be the wife of son of Padma Bhushan Lt. Col. and in case she dies or otherwise becomes incapable of acquiring any interest in property the beneficiary of this trust shall be the second wife of in case he marries again and in case his first wife becomes incapable of acquiring property, then the first male child of on the attainment of majority of such male child. ", "3. If the said does not marry and/or in any manner all possibilities of marrying shall disappear then and in that event the beneficiary of this trust shall be the first son of Sri Pankaj Mohan son of' Padma Bhushan Lt. Col. V.R. Mohan upon his attaining majority and failing him to the other surviving heirs of Sri Pankaj Mohan son of Padma Bhushan Lt. Col. V.R. Mohan.\" ", "26. It is admitted that was not married on the valuation date of each of the assessment years in question nor , and had any son on the respective valuation date. Thus, the beneficiary was unknown. Even though a trust can be created in respect of future wife or an unborn child but the position in law would be that the beneficiary is unknown. As held by in the cases of Trustee of HEM Nizam's Family (Remainder Wealth) Trust (supra) and (supra), where the beneficiaries are unknown, the shares would also be taken to be indeterminate. In this view of the matter, the provision of section 21(4) of the Act would be applicable and not section 21(1) of the Act. The has rightly applied the provisions of section 21(4) of the Act. ", "26. It is admitted that was not married on the valuation date of each of the assessment years in question nor , and had any son on the respective valuation date. Thus, the beneficiary was unknown. Even though a trust can be created in respect of future wife or an unborn child but the position in law would be that the beneficiary is unknown. As held by in the cases of Trustee of HEM Nizam's Family (Remainder Wealth) Trust (supra) and (supra), where the beneficiaries are unknown, the shares would also be taken to be indeterminate. In this view of the matter, the provision of section 21(4) of the Act would be applicable and not section 21(1) of the Act. The has rightly applied the provisions of section 21(4) of the Act. ", "27. In view of the foregoing discussion, we answer both the questions of law referred to us in the affirmative, i.e., in favour of the revenue and against the assessees. There shall be no order as to costs. ", "27. In view of the foregoing discussion, we answer both the questions of law referred to us in the affirmative, i.e., in favour of the revenue and against the assessees. There shall be no order as to costs."], "relevant_candidates": ["0000130257", "0000378998", "0000476389", "0000588869", "0000615273", "0000803844", "0001017570", "0001534038", "0001638090"]} {"id": "0000764981", "text": ["JUDGMENT , C.J. ", "1. This reference to a Full Bench has been made for a decision on the correctness of the ruling in v. [1990] 1 KLT 10. The point in issue is whether in view of the provisions of Section 96(2) and (6) of the Motor Vehicles Act , 1939, it is open to the insurer to rely on a \"reservation clause\" in the policy and then to raise all the defences open to the insured against the third party, in an action for compensation filed by the third party. The respondents-claimants contend, on the basis of the ruling in 's case 1 KLT 10, that, notwithstanding the existence of any \"reservation clause\" in the policy, it is not permissible for the insurer to either contend that there is no negligence on the part of the insured or that the quantum of compensation awarded against the insured is excessive even when the quantum is within the statutory limits in Section 95(2) . It is true that the ruling in 's case 1 KLT 10 supports the respondents' case for saying that in spite of a \"reservation clause\" the insurer cannot take such defences before the or file an appeal against the award raising such pleas. The decision states that Section 96(2) and (6) of the Act permit only certain specific defences to be taken by the insurer and that the said defences are exhaustive. It further says that it is only in the limited class of cases where Section 110C(2A) applies that the insurer can raise defences other than those stated in Section 96(2) . Section 110C(2A) permits the insurer to take all defences when it is impleaded suo motu by the upon being satisfied that there is collusion between the claimants and the insured or where the insured is ex parte. The question is whether Section 96(2) and Section 110C(2A) are exhaustive and whether the insurer can, when there is a \"reservation clause\", raise all pleas available to the insured including pleas of want of negligence of the insured or that the award is excessive. ", "2. The contention on behaif of the insurer by learned counsel, , is that Section 96(2) and Section 96(4) deal with cancellation or avoidance of a contract of insurance, He submits that when an insurer accepts the policy but denies liability under the policy, on the basis of a \"reservation clause\" in the policy, Section 96(2) and (6) cannot come in the way. It is also argued that Section 110C(2A) is only an enabling provision and that, if there is a \"reservation clause\" in the policy, the insurer can take all defences open to the insured against the claimants-even if there is no collusion between the insured and the claimants and even if the insured is not ex parte as stated in Section 110C(2A) . It is argued, therefore, that the insured could, in view of the \"reservation clause\", contend that there is no negligence on the part of the insured or his servants or that the quantum of compensation is on the high side, even though it is within the upper limit mentioned in Section 95(2) . ", "3. On the other hand, it is contended for the claimants by Sri , Sri , Sri and others that Section 96(2) bars the insurer from raising the above contentions. It is also contended that except in the cases specified in Section 110C(2A) , the insurer cannot raise defences other than those stated in Section 96(2) . Reliance is also placed on Section 96(1) , Section 96(3) and Section 96(4) to say that the insurer is bound to pay the entire award amount and is then to recover excess from the insured. It is also pointed out that in some of these cases before us, extra premium is paid by the insured to make the insurer liable for an \"unlimited\" sum and, therefore, the appeals have to be dismissed without going into any question of negligence or correctness of the quantum of compensation. ", "4. On the basis of the above contentions, the following points arise for consideration : ", "(1) Whether, in a case where the insurance policy contains a reservation clause, the insurer can raise defences, other than those mentioned in Section 96(2) , in its own name ? ", "(2) Whether, in a case where the insurance policy contains a reservation clause, the insurer can raise all defences, even though the case is not one falling under Section 110C(2A) where there is collusion between the insured and the claimants or one where the insured has remained ex parte ? ", "(3) Whether, in view of Section 96(1) and 96(3) , the third party claimants could recover the total compensation amount from the insured leaving it to the insurer to recover any excess from the insured ? ", "(4) Whether, in a case where, on account of extra premium paid by the insured to the insurer so as to make the insurer's liability \"unlimited\" and not confined to the limits in Section 95(2) , the third party could claim the benefit of the unlimited liability as against the insurer directly under Section 96(1) read with Section 96(4) and Section 110B ? ", "Point No. 1.--Before going into the point, it would be convenient to refer to the so-called \"reservation clause\". We may point out that the clause does not use the word \"reserved\". In insurance parlance, it is actually called an \"excess clause\" (see , 1984. 4th edition, page 289). The clause which is relied upon by the appellant-insurer is condition 2 of the policy of the insurance and reads as follows : ", "\"No admission, offer, promise, payment or indemnity shall be made or given by or on behalf of the insured without the written consent of the company which shall be entitled, if it so desires, to take over and conduct in the name of the insured, the defence or settlement of any claim or to prosecute in the name of the insured for its own benefit, any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the company may require.\" ", "5. As the question is whether the above clause can be operated upon by the insurer in the presence of Section 96(2) and 96(4) , it is also necessary to refer to these statutory provisions, to the extent relevant. As Section 96(1) is the only provision which creates a direct right to the claimants against the insurer and is referred to in Section 96(2) , it is also necessary to refer to the said sub-clause. ", "\"96(1). If, after a certificate of insurance has been issued under Sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, nolwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree, any sum. not exceeding the sum assured, payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.\" ", "6. The above provision in Section 96(1) thus directly creates a right in favour of the claimants against the insurer to recover the amount of such liability as is required to be covered by a policy under Section 95(1)(b) . We have held in another Full Bench case in M. F. A. No. 298 of 1987 77 Comp Cas 134 (Ker) [FBI that inasmuch as Section 95(lKb) , in its turn, refers to Section 95(2)(b) , the insurer is liable only up to the limits in Section 95(2) and not for the entire award as passed against the insured. We shall now refer to Section 96(2) and (6). ", "\"96(2). No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given, the insurer had notice through the court of the bringing of the proceedings or in respect of any judgment so long as execution is stayed thereon pending an appeal ; and an insurer to whom notice of the bringing of any such proceeding is so given, shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely :-- ", "(a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident.. . and that either the certificate of insurance was surrendered to the insurer ... or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation . . . ", "(b) that there has been a breach of a specified condition of the policy, being one of the following conditions . . . ", "(c) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.\" ", "7. Section 96(6) which limits the defences for avoidance of the policy to the defences mentioned in Section 96(2) , reads as follows : ", "\"96(6). No insurer to whom the notice referred to in Sub-section (2)... has been given, shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in Sub-section (1). . .. otherwise than in the manner provided for in Sub-section (2) . . .\" ", "8. As already stated, the point is whether the \"reservation clause\" in the policy in any manner conflicts with Section 96(2) and 96(4) so as to become ineffective. Before we go into the above aspect, we shall point out that such a clause, which is called an \"excess clause\", is a well-known clause in the law of insurance. It fell for consideration in v. (1939] 4 All ER 204 before . There the insured while driving a motor vehicle dashed against a pedal cyclist sometime before March, 1939, and injured the latter. The pedal cyclist sued for damages. The insurer, by reason of the reservation clause, entered into a settlement out of court with the pedal cyclist and paid him 45 and claimed 5 from the insured, as provided in the policy. Then the insured refused to pay 5 as agreed by him in the policy. As he refused to pay, the insurer filed an action against the insured for 5. The insured contended that the insurer had no right to settle the matter with the claimants without notice to him (the insured) and also that the settlement was not bona fide. The said contention was rejected. We shall refer to the relevant clauses in that policy. They are as follows (at p. 205) : ", "\"The company . . . shall be entitled if it so desires, to take over and conduct in the name of the insured the defence or settlement of any claim or to prosecute in the name of the insured for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the company may require.\" ", "9. Another condition stated that the insured was \"liable to pay the first 5 or any less amount for which the claim may be settled of each claim arising under this policy.\" ", "10. It was held by that the insurer was entitled to settle the claim with the claimant and that the settlement was bona fide and the insured had no right to be consulted before settlement. observed (at p. 206) : ", "\"Once it is conceded, or once it is found, that the insurance company have the power to settle the claim, then the event which is contemplated in this provision has arisen. There has been a settlement, and thereupon the assured has agreed, it is declared, that he is liable to pay the first 5 for which the claim may be settled. That seems to me to conclude the matter.\" ", "11. The significance of the above decision which related to an accident that occurred just before March, 1939, is that, by that time, the Road Traffic Act, 1934, had come into force with effect from July 31, 1934, and Section 10(2) and (3) of that Act had directed that certain limited defences as specified in Section 10(2) and (3) alone could be taken by the insurer in an action by the claimants. No contention was raised that Section 10(2) and (3) were a bar to the defence that the insurance company was entitled to enter into a settlement in view of the reservation clause. ", "12. The provisions of Section 96(2) and (6) fell for consideration in two decisions of . In British India Genera! 29 Comp Cas (Ins) 60 ; AIR 1959 SC 1331, held that the defences referred to in Section 96(2) which an insurance company could take, were exhaustive and no more defences could be added thereto, unless such a right was reserved. The passage reads thus (at page 66 of 29 Comp Cas) : ", "\"The statute (Motor Vehicles Act , 1939) has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds, and, therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him ...\" ", "13. The above decision is a clear authority that it is open to the insurer to reserve a right in the policy of insurance to defend the action in the name of the assured and, in case there is such a reservation, all defences open to the assured can be urged by him. The above decision is binding on us and has been, in fact, followed by various . ", "14. 63 Comp Cas 847 ; AIR 1988 SC 719, their Lordships referred to case 29 Comp Cas (Ins) 60 (SC) but distinguished the same. There the contention for the claimants was that the insurance company cannot file an appeal for restricting its liability to the pecuniary limits mentioned in Section 95(2) of the Act. The contention was that the same was not one of the defences mentioned in Section 96(2) of the Act. rejected the said contention and held that Section 96(2) which restricted the insurer to a limited number of defences applied only if the insurance policy was to be either \"cancelled\" as in Section 96(2)(a) or if it was to be totally \"avoided\" on the ground of misrepresentation or suppression of material facts as in Section 96(2)(c) or where as in Section 96(2)(b) , the insured had committed a breach of certain specified conditions of the policy thereby giving a right to the insurer to \"avoid\" the policy. It was held by their Lordships that when an insurer wanted to file an appeal contending that it could not be made liable for anything beyond the \"liability required to be covered under Section 95(1)(b) \", such a plea could not be described as a plea to \"avoid\" the policy itself in toto within Section 96(6) . ", "15. That case [1959] 29 Comp Cas (Ins.) 60 (SC) permits the insurer to \"reserve\" his right to defend the case on grounds available to the owner as stated above, has been rightly accepted and followed by this court earlier in v. [1989] 66 Comp Cas 818, and in 58 Comp Cas 746 and also in 67 Comp Cas 528. We are of the view that the decision to the contrary in 1 KIT 10, is not correct and it is accordingly overruled. ", "16. The view we have taken, following case [1959] 29 Comp Cas (Ins.) 60 (SC), is in accord with the view taken in regard to the effect of the \"reservation clause\" by the Madras High Court in (1974] AC) 234 ; AIR 1974 Mad 318, in ACJ 11 (Delhi), in Mangdal v. ACJ 86 (MP) (FBI, in Orissa Co-operative Insurance Society Ltd. v. ACJ 49 (Orissa) and in ACJ 470 (J & K) [FB], We may point out that a Full Bench of in ACJ 239 ; AIR 1976 Orissa 175 [FB], has also, in principle, taken the same view as regards the effect of a reservation clause but in the end it did not allow the insurer to raise the defence, on facts, on the ground that the insurer did not choose to defend the action in the name of the insurer. ", "17. We may add that we are not in agreement with the latter point of view so expressed by in the last mentioned Full Bench case in ACJ 239 (Orissa) [FB], that the reservation clause would help the insurer to raise all defences against third parties which could have been raised by the insured only in case the insurer expressly defended the action in the name of the insured. That leads us to the question as to what the rights of the insurer are, in the case of \"assignment\" by the insured, in favour of the insurer, in respect of the former's rights against third parties. For the purpose of deciding this question it is necessary to refer to the general law relating to insurance. Under that law, a distinction has been made between the cases where the insurer obtains assignment from the insured, and cases where the insurer becomes subrogated to the rights of the insured by way of paying the amount due to the insured. It is settled in the law of insurance that the insurer can avail of all the defences and grounds or remedies which the insured then has against third parties. The only difference is that in the case of assignment the insurer can take action in his own name, while in the case of subrogation, the insurer has to take action only in the name of the insured. In , 4th edition, volume 25, paragraphs 523 to 527, it is stated that the doctrine of subrogation applies to all contracts of non-marine insurance which are contracts of indemnity, sych as fire insurance, motor insurance and contingency insurance. It is further stated that in the strict sense of the term, subrogation expresses the right of the insurers to be placed in the place of the assured so as to be entitled to the advantage of all rights and remedies which the assured possesses against third parties, and that the most obvious case of subrogation arises in the law of torts. It is further stated that if an owner of a vehicle incurs third party liability, consequent to negligence of the owner's servants, then the insurer who discharges the liability of the insured gets subrogated to the rights of the insured against third parties : v. AC 555 (HL). In the absence of a formal assignment of the rights of action, as stated in . AC 250 (PC), the insurers cannot sue the third parties in their own name. v. 3 Doug KB 245. That is what is stated in . ", "18. The law is also similarly stated in MacGillivray on Insurance Law, fourth edition, 1953, paragraph 1686 (accepted in later editions also) as follows: ", "\"The legal right to compensation remains in the assured . AC 250 ; Crandall v. 16 Fed. Rep 75, and, therefore, unless there has been an express assignment of the legal right, actions at law brought for the benefit of the insurer are brought in the name of the assured v. 3 Doug KB 245 ; Wealkans v. Ont A. R. 297 ; v. 39 MC 253. In Courts of Equity or of Admiralty, the insurer has always been allowed to sue in his own name St. Louis Rly v. 139 US 223 ; v. 129 US 397 ; and v. 19 How US 312.\" ", "19. The decision in . AC 250 (PC), above referred to in fact decided that when there was assignment by the in favour of the insurer in respect of the 's rights against third parties, the insurer can sue the third parties in his own name, and avail of all the defences and remedies of the against the third parties. ", "20. The above principle laid down in English law has been accepted by various in India. The principle has been accepted recently by in a motor insurance case in . [1958-65] ACJ 527 ; AIR 1965 Mad 159. That was a case where the insured had assigned his rights (as against third party) in favour of the insurer, and the insurer was held entitled to sue the third party in his own name. In the above said decision, followed an earlier ruling of the same in v. , AIR 1916 Mad 473, and also the decision of the Calcutta in . 66 CWN 419. It was further held in case, AIR 1965 Mad 159 that such an assignment by the insured in favour of the insurer in respect of the rights covered by the motor insurance policy was not hit by Section 6(e) of the Transfer of Property Act, and that the assignment was valid as a transfer of a chose in action as defined in Section 130 of the Transfer of Property Act. In the other cases, the Madras and Calcutta also held that Section 6(e) of the Transfer of Property Act was not attracted to cases of assignment of rights by an assured in favour of the insurer. The decision of in case, AIR 1965 Mad 159, has been followed by the Karnataka in . 2 Kar LJ 521. ", "21. In the light of the above principles of law, it is, therefore, clear that the insurance company has a right to defend or take action against the third party in its own name, on the basis of the assignment by the insured in favour of the insurer in respect of the former's rights against third parties. It is not necessary in the case of assignment that the action by the insurer should be in the name of the insured. ", "22. The further question that arises is as to the meaning of the words in the reservation or assignment clause in question. We have already referred to the said clause, but we shall again refer to the relevant portion thereof. It reads : ", "\"No admission, offer, promise, payment or indemnity shall be made or given by or on behalf of the insured without the written consent of the company which shall be entitled, if it so desires, to take over and conduct in the name of the insured, the defence or settlement of any claim . . .\" ", "23. We have already noticed that in the case of assignment of rights by the insured in favour of the insurer the insurer has a right to conduct the proceedings in its own name. Therefore, we have to understand the relevant words in the above said reservation clause in the light of the said principle. In our view, the words \"if it so desires\", gain considerable importance in such a context. In our view, the insurer is given a choice \"if it so desired\" to conduct the proceedings in the name of the insured. But this does not mean that the insurer is precluded from defending or prosecuting the proceedings in his own name, and there are no words in the reservation clause which take away such a right in favour of the insurer which is available under the general law of insurance. ", "24. For the aforesaid reasons, we hold that the appellant-insurance company can take advantage of the \"reservation clause\" which is in the nature of assignment by the insured of his rights against the third party, and the insurer can defend any action filed by the third party by conducting the same in its own name (insurer). In such a case, the insurer can raise all defences which the insured could have raised, and obviously the insurer is not confined to the limited defences mentioned in Section 96(2) of the Motor Vehicles Act. Therefore, when there is a reservation or assignment clause as stated above, the insurer can even take a defence that there is no negligence on the part of the insured or that the quantum of compensation awarded to the third party is excessive, even when the said quantum is below the pecuniary limit mentioned in Section 95(2) of the Motor Vehicles Act. We hold accordingly on point No. 1. ", "Point No. 2-- It is the contention of the respondents-claimants that Section 110C(2A) of the Motor Vehicles Act, 1939, introduced by the Central Act 56 of 1969 with effect from March 2, 1970, leads to the inference that the insurer can raise all defences open to the insured against the third party, only in a case where the has chosen to implead the insurer upon being satisfied that there is collusion between the insured and the third parly or where the insured has remained ex parte. The contention is that if the said situations are not in existence, the insurer cannot raise any defences other than those specified in Section 96(2) . ", "25. For the purpose of understanding the above contention, it is necessary to refer to Section 110C(2A) . It reads : ", "\"110C(2A). Where in the course of any inquiry, is satisfied that- ", "(i) there is collusion between the person making the claim and the person against whom the claim is made, or ", "(ii) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded by it in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.\" (emphasis* supplied) ", "26. We have already held on point No. 1 that in view of the reservation or assignment clause, the insurer is vested with all the defences or grounds of the insured against the third party, and can take action in his own name. Therefore, prima facie, Section 110C(2A) cannot come in the way of the exercise of the rights under the reservation clause by the insurer. ", "27. Even otherwise, Section 110C(2A) which deals with the \"procedure\" before the , can only be treated as an enabling provision. In our view, it does not exhaust all the situations in which the insurer can raise defences open to the insured against the third party. The provisions of Section 110C(2A) may, however, govern a case where there is no reservation clause or assignment of the rights of the insured in favour of the insurer, but otherwise, it cannot help the respondents. We hold, therefore, that even if there is no collusion between the insured and the third party or even if the insured has not remained ex parte the insurer can raise all defences open to the insured against the third party, provided there is a reservation or assignment clause by the insured in favour of the insurer. For the aforesaid reasons also we overrule the decision in 1 KLT 10. Point No. 2 is found accordingly. ", "Point No. 3.--This point concerns Section 96(3) . We shall refer to the said provision. It reads as follows : ", "\"96(3). Where a certificate of insurance has been issued under Sub-section (4) of Section 95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in Clause (b) of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95 , be of no effect : ", "Provided that any sum paid by the insurer in or towards the discharge of any, liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.\" ", "28. Section 96(3) states that if there is any restriction in the insurance policy which purports to restrict the insurance of the persons insured, because of incorporation of any conditions other than those in Section 96(2)(b) , then such conditions will be of no effect, for the purpose of making the insurer discharge its liabilities as are required to be covered by a policy under Section 95(1)(b) . We should first know what the restrictions under Section 96(2)(b) are, the violation of which by the insured, permits the insurer to avoid the policy. Under Section 96(2)(b) , the insurer can avoid the policy for breach (by the insured) of (i) a condition that the insured should not use the vehicle (a) for hire or reward, where the vehicle is, on the date of the contract of insurance, a vehicle not covered by a permit to ply for hire or reward ; or (b) for organised racing or speed-testing ; or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle ; or (d) without side car being attached, where the vehicle is a motor cycle ; (ii) a condition excluding driving by a named person or unlicensed drivers, etc., (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion. Therefore, under Section 96(3) if the policy permits avoidance of the insurer's liability under Section 95(1)(b) on the basis of conditions other than the above ones specified in Section 96(2)(b) , such conditions will be of no effect as against the third party. ", "29. So far as the proviso to Section 96(3) is concerned, it states that if on account of the above disability statutorily incurred by the insured in not being able to enforce the conditions other than those in Section 96(2)(b) as against the third parties, the insurer becomes liable to pay to the third party any excess sum which, but for the said statutory disability, it was not obliged to pay, then such excess sum could be recovered by the insurer from the insured. ", "30. We fail to see how Section 96(3) can be of any help to the respondents-claimants against the insurer. If the insurer takes out a defence under the law of torts that the insured has not been negligent or if the insurer contends that the quantum of compensation awarded is high (though it is within Section 95(2) limits)--then such defences are permissible in view of the reservation clause and in view of our decision on Point No. 1, and it cannot be said that the insurer is raising defences not covered by Section 96(2)(b) , nor that the said defences are of no effect. The raising of the above defences by the insurer in the written statement or in the appeal-as permitted by the reservation clause--does not, in our view, amount to imposing conditions other than the permissible conditions specified in Section 96(2)(b) so as to become ineffective by reason of Section 96(3) . ", "31. The further contention based on the proviso to Section 96(3) that the insurance company must first pay the compensation in full cannot also be accepted inasmuch as raising defences in the written statement or in the appeal on the basis of the reservation clause--cannot be treated as imposing extra conditions (outside Section 96(2)(b) ) which are ineffective. Point No. 3 is decided accordingly. ", "32. Point No. 4.--It is not disputed by the appellant's counsel that in some of these cases, the insured has paid extra premium to make the insurer's liability an unlimited liability. But the question then arises whether the insurer is liable to pay the entire assessed liability over and above its statutory liability under Section 95(2) and whether the insurer is to recover the excess amount over and above such statutory liability, from the insured, in view of Section 96(4) of the Act. Section 96(4) reads as follows : ", "\"96(4). If the amount which an insurer becomes liable under this Section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.\" ", "33. The provisions of Section 96(4) fell for consideration in M. F. A. No. 298 of 1987 before this very Full Bench ( 77 Comp Cas 134). In that case, the insurer filed an appeal contending that the was wrong in making it liable for the entire amount payable by the insured, but that its liability should have been limited to the figure specified in Section 95(2) . It was, no doubt, not a case of extra premium. It was contended for the claimants that in view of Section 96(4) , the insurer should pay the entire amount and recover the difference from the insured. We rejected the said contention in that case. We referred to the relevant rulings of in v. A. E. Ranasinghe AC 541 (PC), the majority decision of , v. 2 Lloyd's Rep 193 and to the judgment of in the appeal from that case, viz., v. 1 Lloyd's Rep 556 (PC). In all these cases, the provisions were similar to Section 96(4) . We held that the words \"the amount which an insurer becomes liable under the section\" in Section 96(4) meant the liability to the third party covered by Section 96(1) , namely, the statutory liability under Section 95(1)(b) , as further limited by the pecuniary limits in Section 95(2) . It was held that Section 96(4) only meant that in a case where the insurer avoided the policy on grounds stated in Section 96(2) , the insurer could then recover from the insured under Section 96(4) the compensation paid by the insurer to the third party in its entirety. That would be a case of \"excess\" over \"nil\", as pointed out by Lord in 's case 1 Lloyd's Rep 556 (PC). Again, in a case where the policy, was not avoided, but the insurer paid the actual amount mentioned in Section 95(2) and interest and costs to the third party, Section 96(4) could mean that the insurer could recover from the insured, if he wanted to do so, the interest and costs, that being the sum not payable if Section 96(1) did not apply. We held that the basic principle was that the right of the third party against the insurer was limited always to the liability covered by Section 95(1)(b) and Section 95(2) in view of Section 96(1) . ", "34. In the present case, a further question arises. Here, in view of the extra premium paid by the insured, the insurer's liability to the insured is unlimited. In other words, it is more than the statutory limits prescribed in Section 95(2) . But the point is whether the third party claimant could seek the benefit of the extra premium and claim for the entire award amount, over and above the statutory limits specified in Section 95(2) , from the insurer ? ", "35. In abstract principle, in view of Section 96(1) , it must be held that the third party cannot have a remedy against the insurer for anything above the limits specified in Section 96(1) , which means, the \"amount as is required to be covered by Section 95(1)(b) \". Section 95(1)(b) , in its turn, refers to Section 95(2) . Thus the third party's rights against the insurer cannot, in the abstract, exceed Section 95(2) limits. The fact that the insured had paid extra premium might help the insured to resort to his remedies against the insurer for the amount recovered from the insured, apart from what is recovered from the insurer by the third party. In fact, this very question relating to additional premium arose before as an additional point in v. 2 (PC). That case arose under the Bermudan Motor Car Insurance (Third Party Risks) Act, 1943. Section 6(1) of that Act corresponds to Section 96(1) of our Act, while Section 6(4) corresponds to Section 96(4) of our Act. They read as follows : ", "\"6(1). If, after a certificate of insurance has been delivered under Sub-section (4) of Section 4 to the persons by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of Sub-section (1) of Section 4 (being a liability covered by the terms of the policy) . . . ", "6(4). If the amount which an insurer becomes liable under this section to pay in. respect of a liability of a person insured by a policy exceeds the amount for which he would, apart from the provisions of this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.\" (emphasis* supplied) ", "36. In that case, the respondent was injured by the negligent driving of Mr. . The car was owned by Mrs. and was insured with the appellants under a policy. The respondent claimed damages for personal injuries against Mr. , for $ 100,000 and costs by consent. The respondent-claimant wanted that the entire sum be paid by the insurer-appellant even though by virtue of the provisions of the Act of 1943, the statutory liability was restricted to $ 24,000. at Bermuda held the appellant liable for the whole amount. Allowing the appeal, their Lordships held the appellant liable only to an extent of $ 24,000. Section 3(1) of the Act is similar to Section 94 , while Section 4(1) is similar to Section 95(1)(b) . The proviso to Section 4(1) corresponds to Section 95(2) limiting the liability of the insurance company to $ 24,000 and to other amounts in various situations. Again, Section 6(1) of the Act corresponds to Section 96(1) while Section 6(4) corresponds to Section 96(4) . Their Lordships followed the decision in 's case 1 Lloyd's Rep 556 (HL) and 's case AC 541 (PC). The contention that 's case 1 Lloyd's Rep 556 (PC) was wrongly decided and that the view of Lord , M. R. in in 's case 2 Lloyd's Rep 193 was correct, was rejected. ", "37. A further point was also argued that in case [1989] 2 Lloyd's Rep 227 the policy there covered $125,000 while the statutory liability of the insurance company was only $24,000, and the award is for $ 100,000 and that 's case [1980] 1 Lloyd's Rep 556 (PC) was distinguishable. But Lord of Kinkel observed : ", "\"It is true that 's case [1980] 1 Lloyd's Rep 556 (PC) was in certain respects different in its facts from the present one. But the reasoning of Lord may nevertheless be applicable. That reasoning indicates that so far as the 1943 Act is concerned, the words in Section 6(1) - ", "'... such liability as is required to be covered by a policy under paragraph (b) of Sub-section (1) of Section 4 . . .' do not include liability in respect of any sum in excess of $ 24,000 arising out of any one claim by any one person, since by virtue of proviso (iii) to Section 4(1)(b) , such a liability is not required to be covered. It is, in their Lordship's opinion, nothing to the point, so far as the construction of Section 6 is concerned, that the insurers might under the terms of the policy be bound to indemnify the insured in respect of any excess over the statutory minimum for which an injured third party might have obtained judgment against the insured. The effect of Section 6(1) is to limit the amount which the injured third party can recover directly from the insurers.\" ", "38. Therefore, going strictly by the legal principles above stated, the third party cannot by resorting to Section 96(1) seek to recover from the insurer any amount over and above the statutory limits specified in Section 95(2) even though, as between the insurer and the insured, the limit of liability of the insured is unlimited. ", "39. But, in practice, in our country, the nationalised insurance companies have been paying directly to the third party, the amount up to the limit covered by the extra premium, even though the limit under Section 95(2) may be less. We do not want to disturb the existing procedure, whatever may be the principle in the abstract. In our view, there is not much benefit in following the strict rule laid down by in v. 2 (PC). ", "40. In our view, that may only lead to multiplicity of proceedings, namely, of the third party recovering the amount (beyond Section 95(2) limits) from the insured and the insured reimbursing himself from the insurer. We, therefore, do not want to extend the principle in v. 2 (PC), in so far as the said case relates to the amount covered by the extra premium, to Indian conditions. ", "41. We, therefore, hold that where the insured has paid extra premium, the third party can claim the award amount, over and above Section 95(2) limits, directly from the insurer. We hold accordingly on Point No. 4. ", "42. In the result, we overrule case [1990] 1 KLT 10. We hold that the insurer is entitled where there is a reservation clause to raise all defences open to the insured against the third party, in the proceedings initiated by the third party. This he could do in his own name. The insurer could plead that the insured was not negligent or that the third party was guilty of contributory negligence or that the quantum assessed was wrong or high. If there was liability in excess of the limits in Section 95(2) because of extra premium, the third party could be allowed to proceed against the insurer for the amount in excess of the limits in Section 95(2) . ", "43. We answer the reference accordingly. We send back the matters to to decide the appeals on merits."], "relevant_candidates": ["0000135147", "0000368132", "0000394116", "0000405121", "0000458151", "0000473715", "0000610134", "0000798354", "0000992616", "0001385337", "0001455092", "0001540821", "0001638886", "0001854419"]} {"id": "0000785041", "text": ["CASE NO.: Writ Petition (crl.) 237 of 1998 PETITIONER: RESPONDENT: State of Haryana & Ors. DATE OF JUDGMENT: 03/02/2006 BENCH: CJI, & JUDGMENT: ", "J U D G M E N T R.V. RAVEENDRAN, J. ", "An undated letter from the petitioner, received by this Court on 19.11.1998, alleging illegal detention, custodial torture and harassment to family members was registered as a writ petition under Article 32 of the Constitution of India. The State of Haryana and its Director General of Police, were arrayed as respondents 1 and 2 and the six Police Officers referred to in the letter-petition were arrayed as respondent Nos.3 to 8. ", "PROLOGUE (According to Police) ", "2. On 10.3.1998, at about 10 a.m. , Post Dhamtan Saheb (Narwana Tehsil, District), along with constables (, and ), while patrolling near Dhamtan Saheb Bus Stand, received information that one (son of petitioner) and his associates were conspiring in his house, to apply pressure on some tender-bidders. When the police party proceeded towards 's house, they saw two young men coming from the opposite side, on a motorcycle. On seeing the party, the motorcycle suddenly turned back. On suspicion, the party gave chase and stopped the motorcycle near a petrol-pump. The asked the motorcyclist and the pillion-rider to identify themselves. The motorcyclist gave his name as . The pillion-rider gave his name as , a Palledar at Tohana. When the asked as to whether he was the same who had jumped parole in a case, started running. When the party chased him, turned back, whipped out a pistol and fired at them. , one of the Constables, was hit and collapsed. In the ensuing confusion, both and escaped. The injured Constable succumbed to the bullet injuries. In this connection, FIR No.112 dated 10.3.1998 under Section 302 / 307 / 352 / 186 was registered in P.S., Garhi, against and . On receiving information of the death of constable, the SP and the DSP rushed to the hospital and later, went to the Dhamtan Saheb Post. In the meantime, the party which had gone to the house of , in search of him, did not find him and brought his father (Petitioner) to the Station. According to police, the SDM and the Chairman of , , were also present at the Post at that time. The petitioner denied any knowledge of the whereabouts of his son . The SP made some enquiries with the petitioner and left. After inquiries, the petitioner was released. ", "2.1) The petitioner along with his brother-in-law filed W.P. (Crl.) No.416/1998 in the Punjab & Haryana High Court on 24.3.1998 alleging harassment, torture and illegal detention for three days (from 10.3.1998 to 13.3.1998) and again for a day (15.3.1998 to 16.3.1998) and prayed for action against the concerned Police Officers and for a judicial enquiry. by order dated 27.4.1998 disposed of the petition with an observation that petitioners may file a criminal complaint in a competent court. ", "2.2) The petitioner went underground for a few months. Further enquiries by the police revealed that several cases had been registered against the petitioner and his son . was declared as 'proclaimed offender' by order dated 12.6.1998 of Narwana. The petitioner published a notice in ' dated 6.8.1998 that he had disowned his son and was not responsible for his actions. ", "2.3) The continued with their inquiries and in July, 1998, ASI and other Officers of Dhamtan Saheb Post again tried to ascertain his whereabouts by making enquiries with the petitioner and his relatives/friends. ", "The Letter (re : alleged torture and illegal detention) ", "3. The petitioner sent an undated letter to this Court (received on 19.11.1998) wherein he alleged that , In- charge of , along with some Officers, came to his house on 10.3.1998 at about 11 a.m, to enquire about the whereabouts of his son ; and that when he informed them that he was not aware of it, they started beating him. Thereafter, the took him, his wife and two minor daughters forcibly to the Post, through the bazaar. He was beaten with sticks on the way. When they reached the Post, , Superintendent of as also the Deputy Superintendent of , Narwana, were present. When informed them that the persons brought were the father, mother and sisters of , the S.P. directed that they may be brought to 'correct mental attitude'. The ASI took him inside and beat him for about 10 minutes and brought him back before the SP again. By then, his wife and daughters were made to sit in an uncomfortable posture (as students are made to sit in schools by way of punishment). When the petitioner stated that he was not aware of his son's whereabouts, the S.P. became furious and ordered his men to remove his moustache, whereupon sat on his chest (with three policemen pressing his hands and feet) and plucked his moustache. Again, they started beating him, searched his pockets and took away Rs.2,350 which he was carrying. Then the police took him back to his house and ransacked the house. broke open the lock of his trunk and seized his licensed gun, some cartridges and Arms licence, as also some jewellery found in the trunk. Thereafter, the petitioner was taken back to the Post. Though his wife and daughters were sent back to the house, he was illegally detained in custody for a day and then taken to P.S. Garhi where he was kept for 10 days and during the first 5 days of such detention, he was regularly beaten. Because of such police harassment and torture, when he was released he and his younger son fled from his house. ", "3.1) On 8.7.1998, the petitioner returned to his house. , , (who had succeeded ) and (HC) of , came to his house, with four other policemen, handcuffed him and took him to . He was tortured in by the and Head Constable by thrashing him thrice, each time continuously for 15 minutes. When he requested for water, he was forced to drink hot water with salt. The , kept him in a wooden Shikanza for 5 days and he was not allowed to sleep. Then he was taken to Jind. He also alleged that the forced him to bring money for the vehicles to conduct raids (to catch his son, ) and he was forced to accompany them on such raids and was put in wooden Shikanza at Tulvan Thana. When he begged that he should be released, he was informed that he was being taken for the raids on the instructions of , S.P., Jind, and that without the permission of the S.P., he could not be released. After three days he was again taken back to and kept there for 2 days. Thereafter, he was released with a condition to visit everyday in the morning and evening. ", "3.2) The Petitioner alleged that his friends and relatives who wanted to meet him, when he was being illegally detained, were not permitted to meet him and they were also tortured. He also alleged that (HC) of was demanding money from him. ", "3.3) He alleged that in view of such torture, he was forced to leave his house and remain outside. He prayed for a direction to the to stop the atrocities and torture. He sought compensation for himself and his wife and daughters for the social, physical and financial loss, and return of his licensed gun, gold ornaments and other belongings. He also prayed for a thorough inquiry into the atrocities and torture committed by the and imposition of punishment to those who were responsible. ", "3.4) The letter of the petitioner was registered as a writ petition and Rule was issued on 11.1.1999. On 13.9.2000, this appointed Mr. , Advocate, as Amicus Curiae, to assist the . ", "The alleged Second Round of Harassment : ", "4. was arrested in June, 1999 by . Before his arrest, he was allegedly involved in two robberies (registered on 19.3.1999 with PS, City Yamunanagar, and on 21.3.1999 with PS, Indri, Karnal District). On 25.1.2001, when he was being taken to from Ambala jail, escaped from police custody. It is further alleged by the police that on 13.2.2001, and his associates murdered two residents of Tohana. ", "4.1) According to , on 29.1.2001, the SHO, Station, Garhi along with other police officials visited the house of petitioner in search of who had escaped from custody. Again in February, 2001 after the double murder, the S.I. of Station, Tohana along with the ASI in charge of Dhamtan Saheb Post, and other officials visited petitioner's house in search of . In that connection, petitioner and his brother were taken to Station Tohana on 14.2.2001 for inquiries and were released on the same day. They were again called for inquiries on the next day. On 22.6.2001, the Officer in Charge of Post, Patiala Chowk, Jind, searched the house of (sister of ), to find out whether was hiding there. On 24.6.2001, petitioner's younger son was arrested for possessing illegal arms. ", "4.2) The petitioner filed an affidavit dated 22.2.2001 before this Court on 3.3.2001 alleging interrogation by on 26.1.2001 and 29.1.2001 in regard to escape of his son from custody. He also alleged that on 14.2.2001 he and his brother were handcuffed and taken to Tohana Station and interrogated and released on 15.2.2001. The S.P. filed a detailed reply affidavit dated 11.8.2001. A further affidavit was filed by the petitioner on 1.10.2001 wherein he alleged that his younger son was forcibly taken from his sister's house on 22.6.2001 and tortured. This brought forth a further affidavit dated 20.11.2001 from the S.P., , by way of reply denying the allegations. ", "PROCEEDINGS IN THIS COURT : ", "5. Not being satisfied with the reply-affidavit filed on behalf of the , in regard to the letter-petition, this Court on 9.11.2000 directed the Chief Secretary of the of Haryana to file a detailed affidavit in regard to the steps taken on the allegations made by the petitioner. In view of it, the got the matter inquired into by Dr. , Inspector General of Police, (), Haryana. He submitted a report dated 10.3.2001 stating that the allegations of the petitioner relating to police torture, illegal detention, harassment to wife and daughters, and removal of cash/licensed weapon/jewellery were not substantiated. The said report, however, confirmed that petitioner and his brother were called to the Police Station couple of times for interrogation regarding the whereabouts of . Not being satisfied with the said report, this Court on 17.10.2001 directed the to inquire into the matter with reference to the allegations made in the letter as also the subsequent affidavits filed by the petitioner and his relatives and the reply affidavits filed by the respondents. ", "5.1) The held a preliminary inquiry and submitted the report of the Inquiry Officer (, ASP) under cover of its letter dated 22.7.2002. The findings in the said report are arrived at, on the basis of the allegations made in the affidavits filed before this Court, and the statements made by the petitioner, his family members and others (nearly 100 witnesses) before the Inquiry Officer. The has concluded that some of the allegations of the petitioner were substantiated while several others were not substantiated. ", "5.2) On 16.9.2002, this Court directed that the State Government to take appropriate action on the report of the . In pursuance of it, an FIR was lodged in Garhi Police Station, Jind District, (FIR No.152 dated 17.10.2002 under Sections 323 , 342 , 343 , 365 and 384 ) on the basis of the report, naming the following 10 officers :- ", "1. (by then S.I.) ", "2. ASI Satyanarain 238/Jind ", "3. (by then ) ", "4. Const. , No.59/Jind ", "5. No.450/Jind ", "6. Const. No.811/Jind ", "7. Const. No.99/Jind ", "8. Const. No.704/Jind ", "9. Const. Jind ", "10. Const. 825/Jind (by then HC) The Deputy Superintendent of Police, Narwana, filed an affidavit dated 1.11.2002 confirming that FIR was lodged and that he was investigating into the matter. ", "5.3) On 11.11.2002, this Court noted that the FIR was registered and an appropriate chargesheet would be filed by the in due course, and that the officers concerned have been suspended/posted outside the district. This Court also took note of the submission of the amicus curiae that in such cases, apart from inquiry and criminal prosecution, compensation has to be awarded to the victims, and the submission of the that having regard to the facts of the case and having regard to the registration of the FIR, the matter may have to await the result of the prosecution. While adjourning the case, this Court observed that the question of awarding any compensation at that stage, did not arise. ", "5.4) The SP, , by affidavit dated 9.6.2003 informed this Court that the charge-sheet was filed in , Narwana, and that the case was fixed for 18.7.2003 for framing of charge. Thereafter, when the matter came up on 4.8.2003, the amicus curiae again submitted that compensation should be awarded. This Court directed hearing on the limited question as to whether compensation should be awarded or not. The criminal court was also directed to expedite the trial. The criminal case against the officers, we are informed, is under progress. ", "5.5) Thereafter, arguments on the question as to whether compensation should be awarded or not were heard on 6.10.2005 and written arguments were submitted by the Amicus Curiae and the on 19.10.2005 and 16.11.2005 respectively. ", "(Preliminary) Inquiry Report of : ", "6. The findings contained in the report of are summarized below :- ", "Allegations by Petitioner (and his relatives) Finding by C.B.I. ", "1. Incident on 10.3.1998 1.1. Petitioner was tortured at Dhamtan Saheb Police Post on 10.3.1998 on the directions of Mr. , Superintendent of Police, Jind and Mr. , DSP, Jind. ", "Not substantiated 1.2 On 10.3.1998 took cash of Rs.2,350/- from the pocket of the petitioner and Rs.4,700/- from the pocket of his friend . ", "Not substantiated 1.3 , , took away the licensed gun, cartridges and jewellery from the house of petitioner, on 10.3.1998. ", "Not substantiated by any independent witness. ", "1.4 , ASI, Incharge of along with other Police officials picked up the Petitioner and his friend on 10.3.1998 and took them to and beat them on the way. ", "Substantiated 1.5 (H.C., , Garhi) and , , beat petitioner on 11.3.1998. ", "Substantiated (But no injury report or medical report is available.) ", "2. Illegal detention. ", "2.1. Petitioner was arrested on 10.3.1998 and taken to on 11.3.1998 where he was illegally detained for 10 days and beaten during first 5 days. ", "Detention of petitioner at P.S. Garhi for some days was substantiated by an oral evidence of accused in an Excise Case (). ", "2.2. alias Ratna (brother in law of petitioner) was picket up on 10.3.1998 and kept illegally at P.S. Garhi and tortured for 2 days. He was again arrested on 16.3.1998, tortured for 4 days and released on 20.3.1998. ", "Picking up of a few days after 10.3.1998 is established. However, alleged torture and wrongful confinement is supported only by his self statement and not by any medical or other evidence. ", "[Note: However, in the writ petition filed by and petitioner on 24.3.1998 in , it is alleged that petitioner and were kept in illegal confinement from 10.3.1998 to 13.3.1998 and again from 15.3.1998 to 16.3.1998. There is no allegation of any torture at all. They only alleged that they apprehended harassment and torture by .) ", "3. Incidents between 8.7.1998 and 7.11.1998 3.1 (HC), in-charge of handcuffed petitioner and took the petitioner to on 8.7.1998. ", "Substantiated 3.2 , , harassed petitioner between 8.7.1998 and 7.11.1998. ", "Substantiated 3.3 , , demanded money from the petitioner and took money from petitioner, for fuel for the vehicle used to conduct raids. ", "Not Substantiated 3.4 ASI took 10 kg. of Desi Ghee from petitioner's brother . Not Substantiated 3.5 , ASI, had detained in police custody. Substantiated 3.6 , ASI, tortured and took Rs.500/- to release him. Not substantiated. 4. Re : Incidents in the year 2001 4.1 SHO, Police Station, Garhi along with other police officials raided the petitioner's house in January, 2001 and intentionally flashed a torch light on the faces of his young daughters. Not substantiated. (What is established is that SHO, PS, Garhi raided the petitioner's house on the night of 31.1.01 to check whether who had escaped from police custody was at the house. A torch light was used as there was no electricity.) 4.2 On 14.2.01, SHO, , Tohana along with other police officials had handcuffed the petitioner and his brother and detained for a day. Not substantiated. (However, what is established is that the petitioner and his brother were taken to PS City Tohana on 14.2.01, for inquiries in connection with the report that petitioner's son Singh and his associates had committed a double murder on 14.2.01. After a few hours of interrogation they were released). 4.3 On 22.6.01, , younger son of petitioner was picked up (by Constables and in a vehicle driven by Constable ). He was confined at PS City, and tortured. Substantiated only to the extent that was picked up on 22.6.01 by police party and wrongfully confined at PS City, . (In regard to alleged torture, the statement of alone is available without corroboration). 4.4 , Inspector, when he was SHO, PS forcibly picked up one on 26.7.01 and harassed him when 's house was raided on 29.7.01. Not substantiated. (What is established is had taken on the instructions of ASP, and examined him for an hour). ", "7. The report further shows that petitioner was involved in several criminal cases from 1972 and his son was involved in more number of criminal cases from the year 1991, as detailed below :- ", "Cases in respect of petitioner : ", "1. FIR No. 275 dt. 13.10.72 u/s 61/1/14 Excise Act P.S. Sadar Kaithal. ", "2. FIR No.59 dt. 13.2.78 u/s 379 IPC PS . ", "3. FIR No.231 dt. 22.7.85 u/s 25/54/59 Arms Act P.S. Sadar Kaithal. ", "4. FIR No.141 dt. 20.7.86 u/s 61/1/14 Excise Act . ", "5. FIR No.142 dt. 25.4.91 u/s 25/54/59 Arms Act read with section 5 TADA Act . ", "6. FIR No.147 dt. 25.4.91 u/s 285/336 I.P.C . P.S. Sadar Kaithal. ", "7. FIR No.219 dt. 17.7.91 u/s 324/323/506/34 IPC PS . ", "8. FIR No.367 dt. 23.11.94 u/s 323/324/148/149 IPC PS Garhi. ", "9. FIR No.277 dt. 25.6.2001 u/s 332/353/225/186/511 IPC PS City, Jind. ", "(Note: The petitioner was convicted only in the first case. He was acquitted in all other cases.) Cases in respect of : ", "a) FIR No.219 dated 17.7.91 u/s 323/324/506/34 IPC PS Sadar, Kaithal. ", "b) FIR No.395 dated 5.7.97 u/s 324/34 IPC PS Civil Lines, Hissar. ", "c) FIR No.242 dated 7.9.96 u/s 307/120-B IPC & 25/54/59 Arms Act , PS City, Tohana. ", "d) FIR No.245 dated 8.9.96 u/s 25/54/59 Arms Act , PS City, Tohana. ", "e) FIR No.112 dated 10.3.98 u/s 302/307/353/86/34 IPC & 25/54/59 Arms Act , PS Garhi.. ", "f) FIR No.57 dated 31.3.99 u/s 392/395 IPC & 25/54/59 Arms Act , PS Indri, Karnal. ", "g) FIR No.99 dated 19.3.99 u/s 393/394/397/307/452 IPC , PS City, Yamunanagar. ", "h) FIR No.94 dated 21.6.99 u/s 399/401 IPC , 25/54/59 Arms Act , PS Malanwala, Distt. Firozepur, Punjab. ", "i) FIR No.8 dated 26.1.2001 u/s 223/224 IPC , , Ludhiana, Punjab. ", "j) FIR NO.48 dated 14.2.2001 u/s 302/307/34 IPC and 25/54/59 Arms Act , PS City, Tohana. ", "k) FIR No.100 dated 16.2.2001 u/s 307/332/353/216 IPC and 25/54/59 Arms Act , PS Sadar, Fatehabad. ", "l) FIR No.38 dated 21.2.2001 u/s399/307/402 IPC and 25/54/59 Arms Act , PS City, Narwana. ", "m) FIR No.29 dated 16.3.2001 u/s 307, 120-B IPC and 25/54/59 Arms Act , PS City, Firozepur, Punjab. ", "n) FIR NO.149 dated 23.8.2001 u/s 25/54/59 Arms Act , PS Sadar, Kapurthala, Punjab. ", "(Note : was convicted in regard to FIR 242/1996 and FIR No.245/1996. Sl. No. (c) and (d) above on 31.1.2002 and sentenced to undergo RI for six years and two years respectively) Position emerging from the records/CBI Report/arguments: ", "8. A careful examination of the facts, lead to the following inferences : ", "i) All allegations (relating to petitioner and his family members being taken to Stations/ Posts and being questioned/beaten up/tortured) are in connection with the effort of to find the whereabouts of , whenever he was involved in a serious incident, that is (a) incident on 10.3.1998 when Joginder was suspected of killing a constable, (b) incident on 25.1.2001 when Joginder escaped from custody when he was being taken to court, and (c) incident on 13/14.2.2001 when Joginder was suspected of killing two persons at Tohana. ", "ii) Though there is some evidence of illegal detention and beating of petitioner and his relatives, the allegations of custodial torture are exaggerated and to a certain extent false. ", "iii) There is no medical evidence nor any visible scars/ marks/disability resulting from the alleged torture, either in the case of petitioner or his family members/relatives. ", "iv) The complaints of petitioner and his relatives are against different police officers of different police stations (totally unconnected with each other) in regard to incidents at different points of time, in March, 1998, April, 1998, July, 1998, January, 2001, February, 2001 and June, 2001. ", "v) The case of Petitioner is that he and/or his relatives were harassed, illegally confined, or tortured, to find out the whereabouts of . The police contend that the allegations by petitioner and his relatives, are by way of a well conceived plot to prevent police investigation in regard to misdeeds by and his associates and to pre-empt any action by the police against or his family members. ", "9. We will next refer to the factors which indicate that petitioner and his relatives have made false and exaggerated claims in regard to illegal detention, torture etc., apart from suppressing material facts. ", "9.1) In his letter to this Court, petitioner has alleged that he was illegally confined by the for 11 days from 10.3.1998 (one day at Dhamtan Saheb Post and 10 days at Station, Garhi). (brother in law of petitioner) in his affidavit dated 13.5.1999 alleges that he was illegally detained for 2 days and again for 4 days. But in the writ petition filed by petitioner and in on 24.3.1998, it is alleged that the petitioner and were confined by between 10.3.1998 and 13.3.1998 (three days) and again for a day between 15.3.1998 and 16.3.1998. ", "9.2) Petitioner, in the letter to this Court, alleges beating and torture at Dhamtan Saheb Post on 10.3.1998 and at Station, Garhi for five days in custody between 11.3.1998 and 16.3.1998. alleges torture for 2 days (from 10.3.1998 to 12.3.1998) and again for four days (from 16.3.1998 to 20.3.1998). But in the writ petition filed in on 24.3.1998 by petitioner and , there is no allegation of beating or torture, but only expression of an apprehension that they may be arrested, harassed and tortured (Note : Petitioner blames his counsel for not mentioning the facts properly in the writ petition filed before ). ", "9.3) In the letter petition, petitioner completely suppressed the fact that he (along with ) had filed a writ petition on 24.3.1998 in in regard to the said incident (between 10.3.1998 to 21.3.1998) and the fact that the said writ petition was disposed of on 27.4.1998 by reserving liberty to file a criminal complaint. ", "9.4) In the letter petition, the petitioner has alleged four 'misdeeds' of police on 10.3.1998 : (a) His torture at the police post at the Dhamtan Saheb Police Post by , ASI at the instance of Superintendent of Police and DSP, (b) Mistreatment of wife and daughters of the petitioner at the Dhamtan Saheb Police Post, (c) Rs.2,350/- being taken from his pocket by ASI , and (d) Licensed gun, cartridges, arms licence and gold ornaments being illegally taken by ASI on 10.3.1998. The report finds that none of these four allegations is substantiated. ", "9.5) In the letter petition, the petitioner alleged that he had told police that he was not on good terms with his son , that he had already disowned him and the family was having no connection with . He even published a notice in ' in August, 1998 stating that he has no connection with his son . In his affidavit dated 31.8.2001 (filed in this case on 1.10.2001), petitioner reiterates that he has disowned his son and alleges that he did not have any contact with him; and that in spite of it, the police were continuously harassing him and his family members seeking information about the whereabouts of and raiding his house and his relatives' houses to find out whether was hiding there. But the inquiry has categorically found that petitioner and his family members had not disowned . They were regularly meeting when he was in custody. Petitioner was traveling to meet his son whenever he was being produced in courts, in respect of different cases. In fact petitioner received money from , Tohana (Kacchi Union) of which he was a member, to meet the expenses of the travel (to meet his son) on 25.10.2000, 25.11.2000, 21.12.2000, 13.1.2001, 16.1.2001, 23.1.2001, 9.10.2001, 10.10.2001, 11.10.2001, 15.10.2001, 25.10.2001, 7.11.2001, 17.11.2001 and 20.11.2001. Further, the jail records showed that was met by petitioner's wife on 26.8.1999, petitioner's brother on 17.11.1999, 18.11.1999 and 1.3.2002, petitioner's uncle on 20.11.1999, and petitioner's brother-in-law on 5.3.2002. ", "10. There was thus reasonable cause for the to think that the family members of might know about his whereabouts. The repeated questioning of the family members of in the year 1998 and 2001, either at their houses or by calling them to the Station/Post was part of investigation process and cannot, per se, be considered as harassment or violation of Article 21. Whether the police exceeded their limits in questioning the petitioner or his relatives is of course a different aspect. The report of the shows that there is prima facie evidence about petitioner and some of his relatives being illegally detained in Station/Post and subjected possibly to some third degree methods, to extract information regarding the whereabouts of Singh. At the same time, the report makes it clear that neither the illegal detention nor the alleged torture (if true) was of an extent, alleged by the petitioner and his relatives. The claims were clearly exaggerated and many a time false also. It is quite probable that the allegations against were levelled and/or exaggerated to avoid enquiries by the in regard to . ", "11. This leads us to the question whether, in addition to directing inquiry and prosecution of the officers concerned, on the facts and circumstances of this case, compensation should be awarded to petitioner and his family members, as a public law remedy for the violation of their fundamental rights under Article 21 of the Constitution. ", "Compensation as a public law remedy : ", "12. Though illegal detention and custodial torture were recognized as violations of the fundamental rights of life and liberty guaranteed under Article 21 , to begin with, only the following reliefs were being granted in writ petitions under Article 32 or 226 : ", "a) direction to set at liberty the person detained, if the complaint was one of illegal detention. ", "b) direction to the concerned to hold an inquiry and take action against the officers responsible for the violation. ", "c) If the enquiry or action taken by the concerned department was found to be not satisfactory, to direct an inquiry by an independent agency, usually . ", "Award of compensation as a public law remedy for violation of the fundamental rights enshrined in Article 21 of the Constitution, in addition to the private law remedy under the Law of Torts, was evolved in the last two and half decades. ", "13. In the Bhagalpur Blinding case, [ (II) vs State of Bihar \u0016 1981 (1) SCC 627], , (as he then was), speaking for the Bench, posed the following question while considering the relief that could be given by a court for violation of constitutional rights guaranteed in Article 21 of the Constitution :- ", "\"... but if life or personal liberty is violated otherwise than in accordance with such procedure, is the Court helpless to grant relief to the person who has suffered such deprivation? Why should the court not be prepared to forge new tools and devise new remedies for the purpose of vindicating the most precious of the precious fundamental right to life and personal liberty.\" ", "The question was expanded in a subsequent order in Bhagalpur Blinding case [ (IV) vs State of Bihar \u0016 1981 (2) SCC ", "493), thus :- ", "\"If an officer of the acting in his official capacity threatens to deprive a person of his life or personal liberty without the authority of law, can such person not approach the court for injuncting the from acting through such officer in violation of his fundamental right under Article 21 ? Can the urge in defence in such a case that it is not infringing the fundamental right of the petitioner under Article 21 , because the officer who is threatening to do so is acting outside the law and therefore beyond the scope of his authority and hence the is not responsible for his action ? Would this not make a mockery of Article 21 and reduce it to nullity, a mere rope of sand, for, on this view, if the officer is acting according to law there would ex concessionis be no breach of Article 21 and if he is acting without the authority of law, the would be able to contend that it is not responsible for his action and therefore there is no violation of Article 21. So also if there is any threatened invasion by the of the fundamental right guaranteed under Article 21 , the petitioner who is aggrieved can move the court under Article 32 for a writ injuncting such threatened invasion and if there is any continuing action of the which is violative of the fundamental right under Article 21 , the petitioner can approach the court under Article 32and ask for a writ striking down the continuance of such action, but where the action taken by the has already resulted in breach of the fundamental right under Article 21 by deprivation of some limb of the petitioner, would the petitioner have no remedy under Article 32 for breach of the fundamental right guaranteed to him ? Would the court permit itself to become helpless spectator of the violation of the fundamental right of the petitioner by the and tell the petitioner that though the Constitution has guaranteed the fundamental right to him and has also given him the fundamental right of moving the court for enforcement of his fundamental right, the court cannot give him any relief.\" ", "Answering the said questions, it was held that when a court trying the writ petition proceeds to inquire into the violation of any right to life or personal liberty, while in police custody, it does so, not for the purpose of adjudicating upon the guilt of any particular officer with a view to punishing him but for the purpose of deciding whether the fundamental right of the petitioners under Article 21 has been violated and the is liable to pay compensation to them for such violation. This clarified that the nature and object of the inquiry is altogether different from that in a criminal case and any decision arrived at in the writ petition on this issue cannot have any relevance much less any binding effect, in any criminal proceeding which may be taken against a particular police officer. This further clarified that in a given case, if the investigation is still proceeding, the may even defer the inquiry before it until the investigation is completed or if the considered it necessary in the interests of Justice, it may postpone its inquiry until after the prosecution was terminated, but that is a matter entirely for the exercise of the discretion of the and there is no bar precluding the from proceeding with the inquiry before it, even if the investigation or prosecution is pending. ", "14. [1983 (4) SCC 141], the petitioner therein approached this Court under Article 32 of the Constitution alleging that though he was acquitted by on 3.6.1968, he was released from jail only on 6.10.1982, after 14 years, and sought compensation for his illegal detention. This Court while recognizing that Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced efficaciously through the ordinary processes of courts, civil and criminal, raised for consideration the important question as to whether in the exercise of its jurisdiction under Article 32 , this Court can pass an order for payment of money, as compensation for the deprivation of a fundamental right. This Court answered the question thus while awarding compensation:- ", "\" Article 21 which guarantees the right to life and liberty will be denuded of its significant content if the power of this Court were limited to passing orders of release from illegal detention. One of the telling ways in which the violation of that right can reasonably be prevented and due compliance with the mandate of Article 21 secured, is to mulct its violators in the payment of monetary compensation. Administrative sclerosis leading to flagrant infringements of fundamental rights cannot be corrected by any other method open to the judiciary to adopt. The right to compensation is some palliative for the unlawful acts of instrumentalities which act in the name of public interest and which present for their protection the powers of the as a shield. If civilisation is not to perish in this country as it has perished in some others too well-known to suffer mention, it is necessary to educate ourselves into accepting that, respect for the rights of individuals is the true bastion of democracy. Therefore, the must repair the damage done by its officers to the petitioner's rights. It may have recourse against those officers.\" ", " was followed in [1985 (4) SCC 677] and CITATION> [1989 (4) SCC 730]. ", "15. The law was crystallized in [1993 (2) SCC 746]. In that case, the deceased was arrested by the police, handcuffed and kept in a police custody. The next day, his dead-body was found on a railway track. This Court awarded compensation to the mother of the deceased. , (as he then was) spelt out the following principles :- ", "\"Award of compensation in a proceeding under Article 32 by this or by the High under Article 226 of the Constitution is a remedy available in public law, based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as a defence in private law in an action based on tort. ", "Enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention. ", "A claim in public law for compensation for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is 'distinct from, and in addition to, the remedy in private law for damages for the tort' resulting from the contravention of the fundamental right. The defence of sovereign immunity being inapplicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy. It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution.\" ", "[Emphasis supplied] Dr. A.S. Anand J., (as he then was) in his concurring judgment elaborated the principle thus :- ", "\"... Convicts, prisoners or under-trials are not denuded of their fundamental rights under Article 21 and it is only such restrictions, as are permitted by law, which can be imposed on the enjoyment of the fundamental rights by such persons. It is an obligation of the to ensure that there is no infringement of the indefeasible rights of a citizen to life, except in accordance with law, while the citizen is in its custody. ", "The public law proceedings serve a different purpose than the private law proceedings. The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by or under Article 226 by , for established infringement of the indefeasible right guaranteed under Article 21 is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasible rights of the citizen. The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights. Therefore, when the court moulds the relief by granting 'compensation' in proceedings under Article 32 or 226 seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalizing the wrongdoer and fixing the liability for the public wrong on the which has failed in its public duty to protect the fundamental rights of the citizen. The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends' under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights of the citizen. The compensation is in the nature of 'exemplary damages' awarded against the wrongdoer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort, through a suit instituted in a court of competent jurisdiction or/and prosecute the offender under the penal law. \" ", "16. (1997 (1) SCC ", "416), this Court again considered exhaustively the question and held that monetary compensation should be awarded for established infringement of fundamental rights guaranteed under Article 21. This Court held :- ", "\"Custodial violence, including torture and death in the lock ups strikes a blow at the Rule of Law, which demands that the powers of the executive should not only be derived from law but also that the same should be limited by law. Custodial violence is a matter of concern. It is aggravated by the fact that it is committed by persons who are supposed to be the protectors of the citizens. It is committed under the shield of uniform and authority in the four walls of a police station or lock-up, the victim being totally helpless. The protection of an individual from torture and abuse by the police and other law enforcing officers is a matter of deep concern in a free society. ", "Any form of torture or cruel, inhuman or degrading treatment would fall within the inhibition of Article 21 of the Constitution, whether it occurs during investigation, interrogation or otherwise. If the functionaries of the become law-breakers, it is bound to breed contempt for law and would encourage lawlessness and every man would have the tendency to become law unto himself thereby leading to anarchy. No civilized nation can permit that to happen. Does a citizen shed off his fundamental right to life, the moment a policeman arrests him ? Can the right to life of a citizen be put in abeyance on his arrest. ... The answer, indeed, has to be an emphatic 'No'. ", "Police is, no doubt, under a legal duty and has legitimate right to arrest a criminal and to interrogate him during the investigation of an offence but it must be remembered that the law does not permit use of third degree methods or torture of accused in custody during interrogation and investigation with a view to solve the crime. End cannot justify the means. The interrogation and investigation into a crime should be in true sense purposeful to make the investigation effective. By torturing a person and using third degree methods, the police would be accomplishing behind the closed doors what the demands of our legal order forbid. No society can permit it.\" ", "17. It is thus now well settled that award of compensation against the is an appropriate and effective remedy for redress of an established infringement of a fundamental right under Article 21 , by a public servant. The quantum of compensation will, however, depend upon the facts and circumstances of each case. Award of such compensation (by way of public law remedy) will not come in the way of the aggrieved person claiming additional compensation in a civil court, in enforcement of the private law remedy in tort, nor come in the way of the criminal court ordering compensation under section 357 of Code of Civil Procedure. ", "18. This takes us to the next question as to whether compensation should be awarded under Article 32 /226 , for every violation of Article 21 where illegal detention or custodial violence is alleged. ", "Whether compensation should be awarded for every violation of Article 21 ", "19. [1987 (1) SCC 395], a Constitution Bench of this Court while considering the question whether compensation can be awarded in a petition under Article 32 , observed thus :- ", "\"We must, therefore, hold that Article 32 is not powerless to assist a person when he finds that his fundamental right has been violated. He can in that event seek remedial assistance under Article 32. The power of the court to grant such remedial relief may include the power to award compensation in appropriate cases. We are deliberately using the words \"in appropriate cases\" because we must make it clear that it is not in every case where there is a breach of a fundamental right committed by the violator that compensation would be awarded by the court in a petition under Article 32. The infringement of the fundamental right must be gross and patent, that is, incontrovertible and ex facie glaring and either such infringement should be on a large scale affecting the fundamental rights of a large number of persons, or it should appear unjust or unduly harsh or oppressive on account of their poverty or disability or socially or economically disadvantaged position to require the person or persons affected by such infringement to initiate and pursue act in the civil courts. Ordinarily, of course, a petition under Article 32 should not be used as a substitute for enforcement of the right to claim compensation for infringement of a fundamental right through the ordinary process of civil court. It is only in exceptional cases of the nature indicated by us above, that compensation may be awarded in a petition under Article 32. .... ", "If we make a fact analysis of the cases where compensation has been awarded by this Court, we will find that in all the cases, the fact of infringement was patent and incontrovertible, the violation was gross and its magnitude was such as to shock the conscience of the court and it would have been gravely unjust to the person whose fundamental right was violated, to require him to go to the civil court for claiming compensation.\" ", "(emphasis supplied) In Nilabati Behera (supra), this put in a word of caution thus:- ", "\"Of course, relief in exercise of the power under Article 32 or 226 would be granted only (when) it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case, is possible. ....Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles. It may be necessary to identify the situations to which separate proceedings and principles apply and the courts have to act firmly but with certain amount of circumspection and self-restraint, lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law.\" ", "(emphasis supplied) In D. K. Basu (supra), this Court repeatedly stressed that compensation can be awarded only for redressal of an established violation of Article 21. This Court also drew attention to the following aspect : ", "\"There is one other aspect also which needs our consideration. We are conscious of the fact that the police in India have to perform a difficult and delicate task, particularly in view of the deteriorating law and order situation, communal riots, political turmoil, student unrest, terrorist activities, and among others the increasing number of underworld and armed gangs and criminals. Many hard core criminals like extremists, the terrorists, drug peddlers, smugglers who have organized, gangs, have taken strong roots in the society. It is being said in certain quarters that with more and more liberalization and enforcement of fundamental rights, it would lead to difficulties in the detection of crimes committed by such categories of hardened criminals by soft peddling interrogation, it is felt in those quarters that if we lay too much of emphasis on protection of their fundamental rights and human rights, such criminals may go scot-free without exposing any element or iota of criminality with the result, the crime would go unpunished and in the ultimate analysis the society would suffer. The concern is genuine and the problem is real. To deal with such a situation, a balanced approach is needed to meet the ends of justice. This is all the more so, in view of the expectation of the society that police must deal with the criminals in an efficient and effective manner and bring to book those who are involved in the crime. The cure cannot, however, be worst than the disease itself.\" ", "[Emphasis supplied] [2003 (7) SCC 749] and . [2005 (9) SCC 631], this Court warned against non-genuine claims: ", "\"But at the same time there seems to be a disturbing trend of increase in cases where false accusations of custodial torture are made, trying to take advantage of the serious concern shown and the stern attitude reflected by the courts while dealing with custodial violence. It needs to be carefully examined whether the allegations of custodial violence are genuine or are sham attempts to gain undeserved benefit masquerading as victims of custodial violence.\" ", " [1995 (3) SCC 757], this Court refused compensation where the petitioner had exaggerated the incident and had indulged in falsehood. This Court held : ", "\"Since, from the report of the and our own independent appraisal of the evidence recorded by the . we have come to the conclusion that and had been illegally detained by respondents 3 to 5 from the afternoon of 15.1.94 to 17.1.94, the must be held responsible for the unlawful acts of its officers and it must repair the damage done to the citizens by its officers for violating their indivisible fundamental right of personal liberty without any authority of law in an absolutely high-handed manner. We would have been, therefore, inclined to direct the Government of Haryana to compensate and but since has indulged in false-hood in this Court and , has also exaggerated the incident by stating that on 15.1.94 when he was way laid along with and , Advocate, two employees of respondents 6 and 7 were also present with the police party, which version has not been found to be correct by the , they both have disentitled themselves from receiving any compensation, as monetary amends for the wrong done by respondents 3 to 5, in detaining them. We, therefore do not direct the payment of any compensation to them.\" ", "[Emphasis supplied] ", "20. Cases where violation of Article 21 involving custodial death or torture is established or is incontrovertible stand on a different footing when compared to cases where such violation is doubtful or not established. Where there is no independent evidence of custodial torture and where there is neither medical evidence about any injury or disability, resulting from custodial torture, nor any mark/scar, it may not be prudent to accept claims of human right violation, by persons having criminal records in a routine manner for awarding compensation. That may open the floodgates for false claims, either to mulct money from the or as to prevent or thwart further investigation. Courts should, therefore, while jealously protecting the fundamental rights of those who are illegally detained or subjected to custodial violence, should also stand guard against false, motivated and frivolous claims in the interests of the society and to enable to discharge their duties fearlessly and effectively. While custodial torture is not infrequent, it should be borne in mind that every arrest and detention does not lead to custodial torture. ", "21. In cases where custodial death or custodial torture or other violation of the rights guaranteed under Article 21 is established, courts may award compensation in a proceeding under Article 32 or 226. However, before awarding compensation, the will have to pose to itself the following questions : (a) Whether the violation of Article 21 is patent and incontrovertible, (b) whether the violation is gross and of a magnitude to shock the conscience of the court, (c) whether the custodial torture alleged has resulted in death or whether custodial torture is supported by medical report or visible marks or scars or disability. Where there is no evidence of custodial torture of a person except his own statement, and where such allegation is not supported by any medical report or other corroboration evidence, or where there are clear indications that the allegations are false or exaggerated fully or in part, courts may not award compensation as a public law remedy under Article 32 or 226, but relegate the aggrieved party to the traditional remedies by way of appropriate civil/criminal action. ", "22. We should not, however, be understood as holding that harassment and custodial violence is not serious or worthy of consideration, where there is no medical report or visible marks or independent evidence. We are conscious of the fact that harassment or custodial violence cannot always be supported by a medical report or independent evidence or proved by marks or scars. Every illegal detention irrespective of its duration, and every custodial violence, irrespective of its degree or magnitude, is outright condemnable and per se actionable. Remedy for such violation is available in civil law and criminal law. The public law remedy is additionally available where the conditions mentioned in the earlier para are satisfied. We may also note that this Court has softened the degree of proof required in criminal prosecution relating to such matters. - 1995 (4) SCC 262, reiterated in and (supra),this Court observed :- ", "\"Rerely in cases of police torture or custodial death, direct ocular evidence of the complicity of the police personnel would be available...... Bound as they are by the ties of brotherhood, it is not unknown that the police personnel prefer to remain silent and more often than not even pervert the truth to save their colleagues.......... The exaggerated adherence to and insistence upon the establishment of proof beyond every reasonable doubt, by the prosecution, ignoring the ground realities, the fact-situations and the peculiar circumstances of a given case....., often results in miscarriage of justice and makes the justice delivery system a suspect. In the ultimate analysis the society suffers and a criminal gets encouraged. Tortures in police custody, which of late are on the increase, receive encouragement by this type of an unrealistic approach of the because it reinforces the belief in the mind of the police that no harm would come to them, if an odd prisoner dies in the lock-up, because there would hardly be any evidence available to the prosecution to directly implicate them with the torture.\" ", "Improving the present situation ", "23. Unfortunately, police in the country have given room for an impression in the minds of public, that whenever there is a crime, investigation usually means rounding up all persons concerned (say all servants in the event of a theft in the employer's house, or all acquaintances of the deceased, in the event of a murder) and subjecting them to third-degree interrogation in the hope that someone will spill the beans. This impression may not be correct, but instances are not wanting where police have resorted to such a practice. Lack of training in scientific investigative methods, lack of modern equipment, lack of adequate personnel, and lack of a mindset respecting human rights, are generally the reasons for such illegal action. One other main reason is that the public (and men in power) expect results from police in too short a span of time, forgetting that methodical and scientific investigation is a time consuming and lengthy process. Police are branded as inefficient even when there is a short delay in catching the culprits in serious crimes. The expectation of quick results in high-profile or heinous crimes builds enormous pressure on the police to somehow 'catch' the 'offender'. The need to have quick results tempts them to resort to third degree methods. They also tend to arrest \"someone\" in a hurry on the basis of incomplete investigation, just to ease the pressure. Time has come for an attitudinal change not only in the minds of the police, but also on the part of the public. Difficulties in criminal investigation and the time required for such investigation should be recognized, and police should be allowed to function methodically without interferences or unnecessary pressures. If police are to perform better, the public should support them, government should strengthen and equip them, and men in power should not interfere or belittle them. The three wings of the Government should encourage, insist and ensure thorough scientific investigation under proper legal procedures, followed by prompt and efficient prosecution. Be that as it may. ", "24. Custodial violence requires to be tackled from two ends, that is, by taking measures that are remedial and preventive. Award of compensation is one of the remedial measures after the event. Effort should be made to remove the very causes, which lead to custodial violence, so as to prevent such occurances. Following steps, if taken, may prove to be effective preventive measures: ", "a) Police training should be re-oriented, to bring in a change in the mindset and attitude of the Police personnel in regard to investigations, so that they will recognize and respect human rights, and adopt thorough and scientific investigation methods. ", "b) The functioning of lower level Police Officers should be continuously monitored and supervised by their superiors to prevent custodial violence and adherence to lawful standard methods of investigation. ", "c) Compliance with the eleven requirements enumerated in D.K. Basu (supra) should be ensured in all cases of arrest and detention. ", "d) Simple and fool-proof procedures should be introduced for prompt registration of first information reports relating to all crimes. ", "e) Computerization, video-recording, and modern methods of records maintenance should be introduced to avoid manipulations, insertions, substitutions and ante-dating in regard to FIRs, Mahazars, inquest proceedings, Port-mortem Reports and Statements of witnesses etc. and to bring in transparency in action. ", "f) An independent investigating agency (preferably the respective or ) may be entrusted with adequate power, to investigate complaints of custodial violence against Police personnel and take stern and speedy action followed by prosecution, wherever necessary. ", "The endeavour should be to achieve a balanced level of functioning, where police respect human rights, adhere to law, and take confidence building measures (CBMs), and at the same time, firmly deal with organized crime, terrorism, white-collared crime, deteriorating law and order situation etc. CONCLUSION : ", "25. In this case, there is no clear or incontrovertible evidence about custodial torture, nor any medical report of any injury or disability. The grievance of the petitioner and his relatives is against different officers in different Police Stations at different points of time. More importantly, several of the allegations are proved to be exaggerated and false. We, therefore, do not consider this to be a fit case for award of compensation. All reliefs which should be granted in such a case, have already been granted by ordering an inquiry by the and ensuring that the Police Officers named are prosecuted. The law will have to take own course. ", "26. This order will not come in the way of any civil court awarding compensation in an action in tort or the criminal court awarding compensation under section 357 CPC in the pending prosecution against any of the officers, if the charges are established. With the said observations, we dispose of this petition, as no further reliefs/directions are called for. ", "27. We record our appreciation for the effort put in by , Amicus Curiae, in presenting the matter."], "relevant_candidates": ["0000061710", "0000501198", "0000810491", "0000838507", "0001102670", "0001486969", "0001600010", "0001628260", "0001877695", "0069408974"]} {"id": "0000804932", "text": ["ORDER--Finding as to error in assessment order HELD: ", "Where the had completed assessment after discussion with the representative of the assessee in the absence of any error pointed out by the Commissioner, the assessment could not be said to be erroneous and prejudicial to the interest of the revenue. ", "Income Tax Act 1961 s.263 JUDGMENT Om Prakash, J. ", "1. These are two applications made under Section 256(2) of the Income-tax Act, 1961, relating to the assessment years 1979-80 and J980-81 by the Commissioner of Income-tax, Agra, by which is directed to state the case on the following questions for the opinion of this court : ", "\" (1) Whether, on the facts and in view of the legal position as mentioned in the statement of facts, the could be said to be legally correct in setting aside the order passed under Section 263 by the Commissioner of Income-tax ? ", "(2) Whether there is any legal basis for the hon'ble Tribunal to come to the conclusion that notice under Section 263 was issued by the Commissioner of Income-tax merely on suspicion and he had no cogent material before him for initiating the proceedings under Section 263 of the Income-tax Act, 1961 ? ", "(3) Whether, on the facts and circumstances of the case, the decision of the, Allahabad High Court reported in Srivastava (J. P.) & 111 ITR 326 has been correctly applied by the Tribunal ? ", "(4) Whether the is legally correct in not accepting the 's contention that the order under Section 263 is valid in view of decision in the case of Rampyari Devi Saraogi 67 ITR 84 and 88 ITR 323 ? ", "(5) Whether, on the facts and circumstances of the case, failure on the part of the Income-tax Officer to make proper and adequate enquiries is by itself not sufficient to meet the requirement of Section 263 which confers jurisdiction in respect of an order which is erroneous and prejudicial to the interests of the ? ", "(6) Whether the , on the facts and in the circumstances of the case, is legally correct in not giving a finding as to how the decisions given in the following cases by the High Courts and relied upon by the Commissioner in his order under Section 263 are not applicable to the facts of the assessee's case ? The cases are : ", "1. v. Addl. CIT [1975] 99 ITR 375 (Delhi) ; ", "2. 136 ITR 243 (Raj); and ", "3. 101 ITR 1 (Kar) ? \" ", "2. The assessee, , Agra, a specific trust, was created on January 24, 1973, under a trust deed by Smt. with a corpus of Rs. 500 for the benefit of the beneficiaries. The assessee filed returns for the first time for the assessment years 1979-80 and 1980-81 on February 20, 1982, showing incomes of Rs. 39,540 and of Rs. 38,420, respectively, in the status of a private specific trust. The Income-tax Officer completed the assessments for both the years on a single day, viz., November 25, 1982. Both the orders are couched in identical language. Therefore, it will suffice if only one order is reproduced for appreciation of the case. The assessment order for the assessment year 1979-80 runs as follows: ", "\"Return filed declaring an income of Rs. 39,540. In response to a notice under Section 143(2) , , CA, attended. Case discussed. This is a case of Private Family Specific Trust, in which shares of beneficiaries are specified. Therefore, income in the hands of the trust is exempt and taxable in the hands of beneficiaries. The trust has been created, vide trust deed dated January 24, 1973, a copy of which has been filed and placed on record, for the benefit of beneficiaries, Km. , Km. , Km. and Master . After discussion and scrutiny, income returned is accepted. Share of each beneficiary comes to Rs. 9,890. Assessed. Issue N. D. \" ", "3. Thereafter, notices under Section 263 were issued to the assessee by the Commissioner of Income-tax for \"both the years calling upon the assessee to show cause as to why assessment orders be not cancelled, as being erroneous and prejudicial to the interests of the . Not being satisfied with the explanation of the assessee, the Commissioner set aside the assessment orders for both the years directing the Income-tax Officer to make the assessments de novo. The Commissioner was of the view that the orders for both the years were erroneous and prejudicial to the interests of the , inasmuch as they were passed by the Income-tax Officer \"......in haste/hurry without proper and adequate enquiry...... \". The Commissioner also observed that the orders do not show \"How and in what manner and with what capital the trust conducted its business relating to handloom daris and it is not at all clear from the papers filed.\" He also added that the record shows that the books of account of the trust were never produced before the Income-tax Officer for scrutiny, that no tick marks were made on any papers filed by the trust along with the return and that the assessment was made in one hearing, without requiring the presence of the trustees. The Commissioner finally concluded : ", "\" that an assessment made in haste/hurry without proper and adequate enquiry/investigation is erroneous and prejudicial to the interest of the .... \" ", "4. On appeal, set aside the order of the Commissioner for both years by a combined order dated April 30, 1986. In paragraph 4 of the said order, the observed that the assessee had filed the trading and profit and loss account, balance-sheet and copies of the accounts of the beneficiaries before the Income-tax Officer. Having so observed, the found that there was little reason to doubt the contention of the assessee that the books of account had been produced before the Income-tax Officer. The finding that the books of account had been produced before the Income-tax Officer and that he passed the orders after having seen them is a finding of fact and no question of law arises therefrom. ", "5. In his orders, the Income-tax Officer had clearly stated that he had discussed the case with the representative of the assessee and it was only after the discussion that the Income-tax Officer held that the assessee was a private specific trust and the income thereof was exempt in the hands of the trust but that it was assessable in the hands of the beneficiaries. Having considered all these facts, the observed in paragraph 4 : \"The reasons given by the Commissioner of Income-tax for coming to the conclusion that the assessments had been made in a hurried way without any checking or scrutiny are superficial. \" Such finding of the is not without material and hence no question of law arises. ", "6. There is no finding by the Commissioner that the Income-tax Officer reached an erroneous conclusion and that, on the facts and circumstances of the case, the conclusion would have been different. The orders of the Income-tax Officer may be brief and cryptic, but that by itself is not sufficient reason to brand the assessment orders as erroneous and prejudicial to the interest of the . Writing an order in detail may be a legal requirement, but the order not fulfilling this requirement, cannot be said to be erroneous and prejudicial to the interest of the . It was for the Commissioner to point out as to what error was committed by the Income-tax Officer in having reached the conclusion that the income of the trust was exempt in its hands and was assessable only in the hands of the beneficiaries. The Commissioner having failed to point out any error, no error can be inferred from the orders of the Income-tax Officer for the simple reason that they are bereft of details. If the order is not erroneous, then it cannot be prejudicial to the interest of the . There is nothing to show in the order of the Commissioner that the Income-tax Officer would have reached a different conclusion had he passed a detailed order. So, the conclusion of the Commissioner that the orders of the Income-tax Officer are erroneous and prejudicial to the interest of the are based merely on suspicion and surmises in the absence of any enquiry having been made by him. ", "7. In the income-tax assessments, all questions boil down to this, whether income has been properly determined and whether the correct rate of tax has been applied. The Commissioner does not say that the income was higher or that it was assessed on a wrong entity or at a low rate or that any exemption was wrongly allowed. In the absence of such a finding, the assessment orders cannot be said to be erroneous and prejudicial to the interest of the . ", "8. For the above reasons, we are not inclined to direct the to state the case on any question proposed by the . The applications are, therefore, dismissed, but there will be no order as to costs."], "relevant_candidates": ["0000249589", "0001091542", "0001678889", "0001822234"]} {"id": "0000859960", "text": ["JUDGMENT , J. ", "1. The claimants in O.P. No. 225 of 1965 before , Madras, whose petition has been dismissed, are the appellants. The three appellants are the brothers and sister of one who was killed in a motor accident which occurred at about 1 P.M. on 25th August, 1965 in Gbantz Road, Madras. The lorry bearing registration No. MDJ 2172 owned by the 1st respondent is the vehicle which was involved in the accident. was actually standing on the steps of a tea shop off the pedestrian pavement east of the road and the lorry in question swerved, went over the pavement and knocked against the said tea shop, in the process jamming to death. The appellants claimed a total sum of Rs. 40,000 as compensation, making the owner of the vehicle and the insurer thereof as respondents 1 and 2 respectively. The two respondents contested the petition and the came to the conclusion that the accident was not due to any negligence or rashness on the part of the dirver of the lorry, that it was an inevitable accident due to an unforeseen mechanical defect and that therefore the claimants are not entitled to any compensation. The also gave a finding that if the claimants are entitled to compensation on the ground that the accident was a result of rash or negligent driving of the vehicle, a sum of Rs. 5,400 would be the just compensation payable to them. But the petition came to be dismissed on the abound that there was no rashness or negligence on the part of the driver of the lorry. Therefore the claimants have filed this Civil Miscellaneous Appeal pressing their claim. ", "2. The first question that arises for consideration is whether the accident was as a result of negligence. The road in question runs north to south and the width of the road as spoken to by , the police officer who visited the scene after the accident, is 28 feet 9 inches. On the eastern side of the road there is a pedestrian pavement, 4 feet wide. There is a tea shop called Gopal Tea Stall east of the pavement. (since deceased) was standing on the steps just in front of the said tea shop, facing the same (facing eastwards) and taking tea. It was then the lorry, which proceeded from north to south in the road, swerved, jumped over the pavement a ad dashed against the tea stall, in the process of which was caught between the lorry and the tea stall and crushed to death. ", "3. The accident is spoken to by (P.W.5.) on behalf of the claimants and (R.W. 1.) who was the driver of the lorry, on behalf of the respondents. We have also the evidence of the police officer who visited the scene sometime after the accident and he has drawn a plan as per Exhibit P-1 showing the tyre marks and other particulars. ", "4. P.W. 5 was also near the tea shop in question and be was also injured in the accident, but he escaped with minor injuries. All that he says is that while himself and the deceased were taking tea facing the tea stall and standing on the steps close to the same, the lorry came and hit them. He added that there was no sounding of horn by the lorry at about the time of the accident. the driver of the lorry, stated that he was driving the lorry from north to south, that the lorry was empty (i.e.) without any load, that two bullock carts were going ahead of the lorry, that he overtook the said two bullock carts by going to his right side (western side of the road), that after he so overtook the two carts, he wanted to bring the lorry to the centre of the road, that then the steering began to wobble, that the steering wheel turned left and could not be brought to the normal position, that when he applied the brakes they failed and that therefore the vehicle got over the platform on the eastern side of the road and dashed against the tea shop, only after which the vehicle came to a stop. the police officer, stated that he found tyre marks to a distance of 56 feet from the place of impact, that the said marks were straight (north to south) to a certain distance and then it took a turn across the road diagonally up to the place of impact. The left front wheel was found detached and lying on the left side of the lorry in between the steps of two adjacent shops off the pedestrian pavement. The front part of the tea shop in question, as well as the southern wall of an adjacent stall were found badly damaged. This witness also stated that the brakes of the vehicle were found to be efficient. ", "5. The respondents examined one , who is an automobile Ergineer, as R.W. 2 to give opinion evidence in order to support their case that the accident was as a result of a sudden mechanical breakdown. The witness explained as to how the left front wheel in the vehicle could have come out from its position. He stated that in case the nuts had come out of the sub-axle, the wheel would start to come out by a few inches before it finally drops out. According to him, it is possible that nuts may come out unnoticed by the driver. The sub-axle being about 6 inches long, before the wheel comes out completely and falls down, it would be rolling on the bearing even after the nuts had slipped, but in that position the brakes would not act. He added that accidents do happen due to slipping of sub-axle outs. It was also sought to be made out through his evidence that the coming out of the front left wheel was not due to the impact itself. The witness stated that had the wheel come out due to the impact, the bearings as well as the hub would have been broken and the threads of the sub-axle would be wiped away completely. As it is not in evidence that either the bearings or the hub was found broken or about the sub-axle threads having been wiped away, it was sought to be made out through the evidence of R.W. 2 that the coming out of the left front wheel of the lorry was not due to the impact but it was only due to a latent mechanical defect. ", "6. As I said, the below held that the accident was a result of the mechanical defect and the accident was not due to any negligence or rashness. But on a careful consideration, I am unable to accept the finding of the below on this paint. There are two aspects of the question. The first is whether the accident was due to rash or negligent driving by the driver of the vehicle. The second is, even if the accident was a result of mechanical defect, whether reasonable care had been taken to prevent such breakdown resulting in the accident. The lorry had admittedly gone out of the road, jumped over the pavement and attacked the deceased who was actually standing on the steps of the tea stall. Under such circumstances, the doctrine of res ipsa loquitur would come into play. It is then, the burden shifts on to the respondent to prove that the accident was not due to negligence. The doctrine of res ipsa loquitur means that an accident may by its nature be more consistent with its being caused by negligence for which the defendant is responsible than by other causes, and that in such a case, the mere fact of the accident is prima facie evidence of such negligence. Then the burden of roof is on the defendant to explain and to show that it occurred without fault on his part. I will assume in this case that the coming off of the left front wheel was not due to the impact itself but because of the sub-axle nuts breaking or slipping all of a sudden. But the respondent cannot escape liability by merely showing that the accident was as a result of a mechanical defect. He should further show that he took reasonable care to avoid such mechanical defect. There is no evidence as to whether the sub-axle nuts broke or slipped. ", "7. in Motor Claims Cases (6th Edition, page 183) points out that if an accident is due to a latent defect which is not discoverable by reasonable care, there is no negligence. Therefore it is not enough for the respondent to prove that the accident is due to latent it defect, but he must further prove that the said defect was not discoverable by reasonable care. Regarding cases of mechanical defect causing accident, it is pointed out in R. v. Spruge (1961) 2 All E.R. 688. that the defence of mechanical defect has no application where the defect is known to the driver or should have beer, discovered by him had he exercised reasonable prudence. In the present case, no doubt, there is. no evidence to show that the defective nature of the sub-axle nuts was known to the driver or the owner of the vehicle. But the matter does not rest there. It must be shown by the respondent that the defect could not be detected in spite of exercise of reasonable care. In the case of mechanical break-down unless the defendant satisfies the that he arranged periodical check-up and carried out necessary repanis regularly and that he did everything in his power to eliminate mechanical unsoundness, the break-down would be only a neutral factor and not a valid deferce. In the present case, there is absolutely no evidence to show that the 1st respondent took any care to avoid the mechanical defect. of the lorry, said that he did not know whether the mechanism was ever checked. Therefore I think the 1st respondent has not discharged his burden of rebutting the presumption arising from the doctrine of res. ipsa loquitur. ", "8. The next point to be considered is whether the appellants, who are the brothers and sister of (since deceased) are persons entitled to claim compensation under Section 110-A of the Motor Vehicles Act (hereinafter referred to as the Act). The contention on behalf of the respondents is that in view of the fact that the appellants are not dependants under Section 1-A of the Fatal Accidents Act, they cannot maintain any claim for compensation regarding the death of . Per contra, the contention on behalf of the appellants is that the provisions of the Fatal Accidents Act have no application to 3 claim before , that the provisions under the Motor Vehicles Act give a right to all legal representatives of the deceased to maintain to claim for compensatior, that the term \"legal representatives\" occurring in section 110-A of the Act would take in the brothers and sister of a deceased who died a bachelor and that therefore their claim cannot be negatived on the ground that they are not dependants as defired under Section 1-A of the Fatal Accidents Act. I am of the opinion that neither of the contentions is correct. Even in (respect of claims before , one has necessarily to look to the provisions of the Fatal Accidents Act because the provisions of the Motor Vehicles Act do not create substantive rights but they any only procedural in character. Even so, the appellants being the brothers and sister of the deceased, are not wholly without remedy. Though they are not entitled to compensation for loss of benefit as they are not dependants under Section 1-A of the Fatal Accidents Act, they would be entitled to claim compensation towards loss of estate of the deceased as persons who represent his estate. ", "9. The contention on behalf of the appellants proceed on the footing that Sections 110 to 110-F of the Act create substantive rights and that they are not merely procedural. It is on that basis it is contended that in respect of claims under Section 110-A of the Act, one should not look to the provisions in the Fatal Accidents Act in order to determine whether the claimants are entitled to compensation and if so, to what amount. On an examination of all the relevant provisions, I am quite clear that Sections 110 to 110-F of the Act do not purport to change the substantive. law under which persons can claim compensation for either death or injury caused by tortious acts. First of all, it must be noted that Sections 110 to 110-F of the Act do not say that in every case of accident (whether the accident is as a result of tortious act or not), the injured or the legal representatives of the deceased, as the case may be, are entitled to compensation. Undoubtedly the substantive right to claim compensation is only under the general law of torts. It cannot be disputed and, as a matter of fact, it is not disputed that either an injured or the legal representatives of the deceased, as the case may be, should establish that the accident was as a result of rashness or negligence on the part of the owner of the motor vehicle or his servant, before ever they can claim compensation in espect of the accident. That being so, merely because Section 110-A says that either the injured person or the legal representatives of the deceased, as the case may be, can file application for compensation and Section 110-B ' says that may make an award determining the amount of compensation which appears to be just, it cannot be claimed that any new right is created under these provisions. ", "10. The making an award \"determining the amount of compensation which appears to it to be just\" has naturally to look to the law of torts in determining such compensation. If the owner of the vehicle is not a tort-feaser, then, in spite of the accident causing either injury or death, as the case may be, no compensation can be awarded by the . Therefore, the mere fact that the section says that the would determine the amount of compensation which appears to it to be just, does not mean that any new right is created to the claimants. The claimants have necessarily to trove that the owner of the motor vehicle concerned is guilty of a tortious at t, either directly or vicariously, resulting in the accident. ", "11. It is stated that in the latest amendment of the Act, Section 95 has been so amended in order to create an absolute liability in respect of injuries caused to passengers in public service vehicles. Section 95 of the Act is the. one which specifies the requirements of the insurance policies to be taker in respect of motor vehicles. Section 95(1)(b) as it originally stood stated that the insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) against any liability which may be incurred by him or them in respect of the death of or, bodily injury to, any person caused by or arising out of the use of the vehicle in a public place. There is also a proviso to this Clause 95(1)(b) but that need not be referred to now. By Act (LVI of 1969), Section 95(1)(b) has been substituted by a new clause. As far as it is now material, it is as follows :-- ", "95. (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-- ", "(a) * * * * * ", "(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2). ", "(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; ", "(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. ", "As in the new Clause (b)(i) it is stated that the insurance is to he against any liability which may be incurred by the person or classes of persons specified in the policy but Clause (b)(ii) simply says that the insurance is to be against the death of or bodily injury to any passenger of a public service vehicle, without referring to any liability which may be incurred by the person or classes of persons insured in respect of such death of or bodily injury to any passenger, it is said that under the abovesaid clause, viz., new Clause (b)(ii), an absolute liability in respect of passengers travelling in a public service vehicle has been created. In this connection, the statement of objects and reasons for the Amending Act (LVI of 1969), which introduced the abovesaid new provision, is pointed out. In paragraph 6 of the said objects and reasons it is stated that the bill seeks to provide for covering of passenger risks for public service vehicles irrespective of the culpability of the owner or driver of such vehicle for any accident in which it may be involved, provided that there was no contributory negligence on the part of the victim. From this it is stated that even though the driver of a public service vehicle might not have been rash or negligent in respect of the accident in which any of the passengers in the vehicle is injured or dead, the insurer shall to liable to pay compensation to such victims. Though the statement of objects and reasons mentioned above supports the above view, whether the said object has been achieved or not has to he examined. ", "12. Assuming without deciding that the new Section 95(1)(b) creates an absolute liability in respect of injury or death to passengers in a public service vehicle, that has nothing to do with the present question, for two grounds, viz., this amendment comes into effect only in the year 1969 and (2) the absolute liability, if any, is only in respect of passengers in a public service vehicle. In the present case, we are not con(sic)erned with any passenger who was injured or dead in the accident. ", "13. This is a case where s lorry attacked and killed a person who was standing on the pedestrian pavement. If really the present Section 95(1)(b) creates an absolute liability in respect of passengers in a public service vehicle, that fact would only highlight the position that in respect of other claimants there is no question of absolute liability and that the claimants can succeed only by proving that the injury or the death, as the case may be was due to tortious act on the part of the owner of the motor vehicle, either directly or vicariously. ", "14. If one has necessarily to look to the law of torts, then it must be remembered that before the coining into force of the Legal Representatives Suits' Act, 1855 (XII of 1855) and the Indian Fatal Accidents Act (XIII of 1855) under the maxim of actio personalis moritur cum persona, no action could be maintained by any one in respect of the death of a person, even though the death bad been caused by the defendant by committing a tortious act. The maxim which means \"a personal claim dies with the person\" is a general rule applicable to torts and prevents representatives of the deceased from suing in his right for the suffering and pecuniary loss caused to the deceased during his lifetime by reason of the injury of which the deceased ultimately died. The result was that the person who caused the death of other cannot be sued in tort, though if death had not been caused but only injury had been caused, the injured would be entitled to sue and recover damages for the tortious act. The position was \"it was cheaper to kill than to maim or cripple\". In England, the above unsatisfactory state of law was overcome by the passing of the Law Reforms Act and of the Fatal Accidents Act , 1846, which is commonly known as Lord 's Act. ", "15. The Indian Fatal Accidents Act (XIII of 1855) followed the above English Act of 1846. Under Section 1-A of the Fatal Accidents Act, a new right is created in favour of certain defendants who are named therein, to maintain an action or suit for damages in respect of the death of a person. The dependants for whose benefit an action can be maintained under Section 1-A of the Act are the wife, husband, parents (which term includes not only father and mother but also grandfather and grandmother) and child (which term includes not only son and daughter but also grandson and grand-daughter and step-son and step-daughter). This Act viz., the Indian Fatal Accidents Act and the Legal Representatives' Suits Act of 1855 came into force on one and the same date, viz., 27th March, 1855. ", "16. Under the Legal Representatives' Suits Art (XII of 1855) which corresponds to the Law Reforms Act in England the cause of action in respect of loss to the estate of a person whose death had been caused (by tortious act) is made to survive and be available to the executors, administrators or representatives of the deceased. The long title of this Act is \" An Act to enable executors, administrators, or representatives to sue and be sued for certain wrongs\". The preamble says that whereas it is expedient to enable executors, administrators or representatives in certain cases to sue and be sued in respect of certain wrongs which, according to the present law, do not survive to or against such, executors, administrators or representatives, the law is enacted. ", "17. It must be remembered that the claim on behalf of the dependants mentioned in Section 1-A of the Fatal Accidents Act is entirely different from what is compendiously called \"loss of estate of the deceased\". Under Section 1-A , compensation is claimable in respect of loss of benefit to the dependants mentioned therein. But it is under the other Act, viz, the Legal Representatives' Suits Act , 1855 the cause of action regarding loss of estate was made to survive to the executors, administrators or representatives of the deceased. If the person wronged does not die as a result of the wrong-doing, under the general law of torts he always has the right to maintain an action for loss of estate (I will come to the question what exactly is the loss of estate, a little later). Before the passing of the Legal Representatives' Suits Act , such right to loss of estate died with the wronged and the same did not survive to the executors, administrators or representatives of the deceased. After the passing of the said Act, the executors or administrators or representatives of the deceased, as the case may be, can maintain a suit for loss of estate of the deceased. ", "18. The Fatal Accidents Act , 1855 comtemplates that there should be only one action or suit for loss of benefit in respect of a wrongful act. That is the first part of section a of the said Act which says : \"Provided always that not more than one action or suit shall be brought for, and in respect of the same subject-matter of complaint\". If a person dies of a tortious act, there could not be one action for the loss of benefit to one of the dependants as contemplated under Section 1-A of the said Act and a separate action for loss of such benefit to another dependent, though a separate suit or action for the loss of estate can be brought by the executors or administrators or representatives of the deceased, as the case may be. But the second part of the abovesaid Section 2 of the Fatal Accidents Act is an enabling provision by which in any suit or action for the less of benefit to the dependants as contemplated under Section 1-A a claim in respect of loss of estate can also be inserted by the executor, administrator or representative of the deceased, as the case may be. The second part of Section 2 of the Fatal Accidents Act says : \"Provided that in any such action or suit, the executor, administrator or representative of the deceased may insert a claim for and recover any pecuniary loss to the estate of the deceased occasioned by such wrongful act, neglect or default, which sum, when recovered, shall be deemed part of the assets of the estate of the deceased\". ", "19. In the whole of the Fatal Accidents Act , the reference to the loss of estate is only in the above provision. It may he seen that this provision contained in Section 2 of the Fatal Accidents Act itself is procedural in character as it does not create any substantive right in the executor, administrator or representative of the deceased to claim pecuniary loss to the estate of the deceased. The substantive right is always in the general law of torts. But as the law originally stood, such right to claim pecuniary loss to the estate would have died with the deceased and no action could be maintained by the deceased's executor, administrator or representative. The Legal Representatives' Suits Act altered the position and made the cause of action for such pecuniary loss to the estate of the deceased to survive to the executor, administrator or representative of the deceased. Section 2 of the Fatal Accidents Act only says that the executor, administrator or representative of the deceased may insert a claim for pecuniary loss to the estate of the deceased in a suit or action brought on behalf of the dependants of the deceased for less of benefit as contemplated under Section 1-A . Thus it is dear that Section 2 of the Fatal Accidents Act itself does not create any right, but it is only an enabling provision saying that if there is an action or suit for loss of benefit to the dependants the executor, administrator or representative of the deceased may insert a claim for pecuriary loss to the estate of the deceased in the same action. ", "20. Section 306 of the Indian Succession Act (and the corresponding provisions in the earlier Acts, viz., Probate and Administration Act of 1881 and the Indian Succession Act of 1865) says that cause of action for personal injuries does not survive to and against the executors or administrators of a deceased person. But the exception is in respect of personal injuries causing the death of the patty. In case of personal injuries causing the death of the party, the cause of action does survive to the executors or administrators of the deceased. This is in accordance with the Legal Representatives' Suits Act of 1855. But for that Act, under the maxim actio personalis moritur cum persona, the cause of action even in respect of injuries causing the death of the person would die with him. ", "21. There is no distinction between a motor accident causing fatal injuries, to a person and other accidents or any other act causing such fatal injuries regarding rights and liabilities of the parties. The liability of the defendant in all such cases, including cases of motor accidents, is founded only on the law of torts. As the motor vehicles increased and motor accidents were also on the increase, the compelled the owners of motor vehicles to have insurance cover in respect of third party risks. Under Section 110 of the Motor Vehicles Act, 1039 as it stood before the amendment of the year 1956, the State Governments had been empowered to appoint persons to investigate and report on motor accidents. But such persons so appointed were not empowered to adjudicate on the liability of the insurer or on the amount of damages to be awarded, except at the express desire of the insurance company concerned. Therefore, till the amendment of the Act in the year 1956, the claimants in respect of injury or death due to a motor accident had to go only to the civil just like in any other case of tort. ", "22. Then in the year 1956, the substituted the present Section 110 for the former section and also introduced Sections 110 A-to 110-F. The present provisions contained in Sections 110 to 110-F came into effect on 16 February, 1957. The statement of objects and reasons for substituting the present Sections 110 to 110-F in the place of the original Section 110 is significant. It is stated that the original provision had not helped persons of limited means in preferring claims on account of injury or death because a decree has to be obtained before the obligation of an insurance company to meet the claims can be enforced and it is therefore proposed to empower State Governments to appoint to determine and award damages. Thus it is clear that in respect of claims relating to motor accidents, which were being entertained by the civil s, the paved the way for the creation of a new forum in the shape of . There can be no doubt, therefore, that the provisions cortained in Sections 110 to 110-F of the Motor Vehicles Act which speak of the constitution of and how applications to such Tribunals should be made and disposed of, relate only to procedure and they have nothing to do with the substantive rights and liabilities of parties. It is needless to stress that the substantive right of a claimant and the liability of the defendant have to be determined only as per the law of torts and that but for the Legal Representatives' Suits Act and the Fatal Accidents Act (both of the year 1855), there would be no cause of action available to any ore in respect of injuries resulting in the death of the injured. ", "23. Till the recent amendment of the Act by Act (LVI of 1060), section 110 stated that is to be constituted for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles. It did not say anything about personal properties lost by the injured or the person who died in such motor accident. Under substantive law, if a person is injured owing to the defendant's tortious act, be would, among other things, be entitled to the value of damages, if any, to his personal property. If a person goes on a cycle and he is knocked down by a motor car due to the negligence or rashness on the part of the motor car driver, then the person who is so knocked down would be entitled to claim the value of the damaged cycle, apart from other damages. Even if the injured dies as a result of the injuries, his legal representatives can maintain a claim in respect of the value of damages to the cycle as part of loss to the estate of the deceased. Section no of the Act, as it stood before, the recent amendment of 1969, did not specifically provide for going into the question such damages to property. In v. (1968) 81 L.W. 386. the question arose whether the civil Court has no jurisdiction to entertain even a claim in respect of damage to property in a motor accident. That is a case where a person was injured and his cycle was damaged by a motor accident. He filed a suit in the civil Court for damages towards his personal injuries as well as damages to the cycle. As had been constituted, the civil Court returned the plaint holding that it had no jurisdiction to entertain any part of the claim. On a revision against such an order, , J. (as he then was), held that in so far as the claim in respect of personal injuries is concerned, Sections 110(1) and 110-F of the Motor Vehicles Act make it clear that the claim for bodily injury is triable only by having territorial jurisdiction, but the jurisdiction of such is limited by the terms of the statute and did not cover claims of damages to property and that therefore the civil Court had jurisdiction to try the suit in so far as that relates to the claim of compensation for demage to the property. The learned Judge was aware of the difficulty in two forums entertaining claims in respect of one and the same accident--one forum regarding personal injuries and the other regarding damages to property--for there is likely to be conflict of findings. But the learned Judge said that such difficulty would not make any difference to the limits of the jurisdiction of the statutory set by the terms of the legislation. To rectify the above unsatisfactory position the has now amended Section 110(1) of the Act by the Amending Act (LVI of 1969). In my opinion, this recent amendment makes it abundantly clear that Sections 110 to 110-F of the Act are only procedural in character and they do not deal with substantive law. Section no (1) before the recent amendment, read as follows :-- ", "A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals (hereinafter referred to as Claims Tribunals) for such area as may be specified in the notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to persons arising out of the use of motor vehicles. ", "The words \"motor vehicles\" occurring in the above sub-section have now been substituted with other words and a proviso has also been added and Section 110(1) , as amended, reads as follows :-- ", "A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals (hereinafter referred to as Claims Tribunals) for such area as may be specified in the notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damage to any property of a third party so arising, or both : ", "Provided that where such claim includes a claim for compensation in respect of damage to property exceeding rupees two thousand, the claimant may, at his option, refer the claim to a civil for adjudication, and where a reference is so made, shall have no jurisdiction to enertain any question relating to such claim. ", "It is clear that after the amendment, in respect of a motor accident which involves not only the death of, or bodily-injury to, a person but also damage to property--such damage being more than Rs. 2,000--the civil and would have concurrent jurisdiction, as it were, and the claimant in such a case would have the option to choose the forum. The provision also makes it clear that if, in such a case, the claimant chooses the civil , the jurisdiction of would be completely ousted. It must be noted that in such a case the entire claim, viz., the claim for personal injuries or death, as the case may be, and damages to property can be entertained by the civil and once the claimant chooses the civil for making his claim, the jurisdiction of would be ousted. Therefore there can be no doubt that Sections 110 to 110-F prescribe only a special forum in the place of the civil in respect of claims relating to motor accidents and those sections have nothing to do with the substantive rights and liabilities of parties. ", "24. Before dealing with the case law on the point, I would like to dispose of another aspect. has framed the Madras Motor Accidents Claims Tribunals Rules, 1961. Under Rule 2(c) of the said rules, the terms legal representative\" occurring in Section 110-A is stated to have the same meaning assigned to it under Section 2(11) of the Code of Civil Procedure. I am of the opinion that the term \"legal representative\" occurring in Section 110-A of the Act has wider import than the definition of the terms contained in Section 2(11) of the Code of Civil Procedure and that particular rule made by is beyond its rule-making power and therefore it should be struck down. The said rules are purported to be made under Section 110(1) of the Act. But Section 110(1) does not really give power to to make any rules. That only speaks of the power of to constitute Motor Accidents Claims Tribunals. It is Section 111-A that gives power to to make rules \"for the purpose of carrying into effect the provisions of Sections 110 to 110-E \". I take it that the Motor Accidents Claims Tribunals Rules, 1961 are made under the above provision, viz., under Section 111-A . Rule 2(c) of the said rules says : ", "'Legal representative ' shall have the meaning assigned to it under Clause (11) of Section 21 of the Code of Civil Procedure, 1908. ", "' Section 21 ' occurring in the above rule is an obvious mistake for ' section 2 '. ", "25. No doubt the definition of the term \"Legal representative\" under Section 2(11) of the Code of Civil Procedure is wide. It takes in not only administrators, executors and heirs but all other persons who represent the estate of the deceased. The definition says that the terms include even persons who intermeddle with the estate of the deceased. Even so, this definition would not take in all the persons who would be entitled to file claim as per the provisions contained in the Fatal Accidents Act and the Legal Representatives Suits Act . Under the Legal Representatives' Suits Act , an action can be maintained by an executor, administrator or representative of the deceased person in respect of pecuniary loss to the estate. Under the Fatal Accidents Act , a claim for loss of benefit to the dependants mentioned under Section 1-A shall be brought in the name of the executor, administrator or representative of the deceased person. Therefore both the claims, viz., the claim for loss of benefit as well as that for loss of the estate, can be brought not only by an executor or administrator but also by a representative of the deceased As already pointed out, if there is a claim for loss of benefit to the dependants mentioned in Section 1-A of the Fatal Accidents Act, a claim for loss to the estate (the cause of action for which claim is preserved by the Legal Representatives' Suits Act ) can be inserted in the same claim. ", "26. The term \"representative\" occurring in Section 1-A of the Fatal Accidents Act, in my opinion, has a different connotation than the definition of the term \"legal representative\" contained in Section 2(11) of the Code of Civil Procedure. I am also of the opinion that the term \"legal representative\" occurring in Section 110-A of the Act takes in persons covered by the term \"representative\" occurring in Section 1-A of the Fatal Accidents Act. Section 2(11) of the Cede of Civil Procedure, though wide to cover not only administrators, executors and heirs but also other persons, it would certainly not take in persons who do not represent the estate of the deceased. But in my opinion, the term \"representative\" occurring in Section 1 A of the Fatal Accidents Act has different connotations and the term takes in even persons who do not represent the estate of the deceased. ", "27. In Shwe My a v. (1923) 44 M.L.J. 732 at 734 : 49 I.A. 395 A.I.R. 1922 P.G. 359. had observed that the word \"representative\" is a term of ambiguous meaning and must be construed according to its context. In Stroud's Judicial Dictionary, it is stated that the meaning of the term \"representatives\", \"legal representatives\", \"personal representatives\" or \"legal personal representatives\" may be controlled by the context. It is pointed out that in certain contexts such terms would mean next-of-kin and not executors or administrators. In Ramanatha. Aiyar's Law Lexicon it is stated that the ordinary legal sense of the terra \"representatives\" without the addition of \"legal\" or \"personal\", is executors and administrators, but contextually \"representatives\" may be taken to mean as \"next-of-kin\" or the \"descendants\". It is said in the same book that the term \"legal representative\" ordinarily means the executor or administrator, though sometimes, when required by the context and surrounding circumstances, it is held to mean next-of-kin and, under rave and peculiar facts, may mean heirs, who themselves, in a broad sense, are often regarded as the legal representatives of the decedent. Therefore it is clear that the term \"representative\" or \"legal representative\" should ordinarily denote a person who represents the estate of the deceased, but the said terms may denote even next-of-kin if the context warrants it. We are of the opinion that the term \"representative\" occurring in Section 1-A of the Fatal Accidents Act means next-of-kin and not merely heirs or persons who represent the estate of the deceased. ", "28. It should be remembered that the claim under Section 1-A of the Fatal Accidents Act is for the benefit of certain persons who are termed as dependants of the deceased. Section 1-A says that the wife, husband, parent and child are such dependants and section 4 of the said Act interprets the term \"parent\" as to include not only father and\" mother but also grandfather and grandmother and that the word \"child\" shall include not only son and daughter but also grandson and grand-daughter and step-son and step-daughter. The claim made on behalf of them need not be as representative of the estate of the deceased. A representative of the estate of the deceased can claim on behalf of the estate only such right winch the deceased could have claimed in his own lifetime. A claim towards loss of benefit to the dependants mentioned in Section 1-A of the Fatal Accidents Act is certainly not a claim which he deceased could have possibly made during his lifetime. As I said earlier, the right to claim loss of benefit on behalf of the dependants mentioned in Section 1-A is a new light created by the statute. It is in this context we have to understand the word \"representative\" occurring in Section 1-A of the Fatal Accidents Act. ", "29. If the term \"representative\" in the above section is not to be understood as next-of-kin, then some of the dependants mentioned in that section may not be entitled to make a claim in their own name. The father of the deceased, as well as the grandfather of the deceased, is a dependant entitled to claim compensation or less of benefit, though, of course, there must be proof that but for the death of the deceased he would have been receiving some benefit from him and the quantum of compensation has to be determined in favour of each dependant separately according to the nature and extent of dependency. But such father or grandfather may not be an heir if the deceased has left a widow or mother or child and the parties are Hindus and he may not also be a person representing the estate of the deceased as contemplated under Section 2(11) of the Code of Civil Procedure. Though it is clear that for a person to be one representing the estate of the deceased, he need not necessarily be an administrator, executor or heir, still he must have something to do with the estate of the deceased. Therefore if the father or grandfather, who is not an heir, has no possession of any part of the estate of the deceased and he has nothing to do with such estate, he may not be a person representing the estate of the deceased in any sense of the term. That means if the term \"representative\" occurring in Section 1-A of the Fatal Accidents Act is understood as a person representing the estate of the deceased, a father or grandfather of the deceased may not be in a position to bring an action in his own name for loss of benefit. Under the above circumstances, I am of the opinion that the term \"representative\" occurring in Section 1-A of the Fatal Accidents Act should be understood as referring to next-of-kin who are the dependants of the deceased as contemplated under that Act. ", "30. The term \"representative\" occurring in the Legal Representatives' Suits Act need not have the same meaning because of the context. Under that Act, the cause of action for a claim of loss to the estate of the deceased is made to survive the death of the person. Therefore a claim under the Legal Representatives' Suits Act can be only the loss to the estate of the deceased. That being so, the term \"representative\" occurring in that Act should refer to persons who represent the estate of the deceased and that need not take in next-of-kin who would be dependants of the deceased under the Fatal Accidents Act but may not be persons who represent the estate of the deceased. I have already pointed out that the word \"representative\" has to be understood according to context. Therefore the word \"representative\" occurring in Section 1-A and the same term occurring in the Legal Representatives' Suits Act need not have the same meaning. In fact, the term \"representative\" occurring in Section 2 of the Fatal Accidents Act has to be understood only in the same way as in the Legal Representatives' Suits Act , (i.e.,) as a person representing the estate of the deceased, for that section speaks of claim relating to the pecuniary loss to the estate of the deceased. The above conclusion of mine would mean that the term \"representative\" occurring in different sections of the Fatal Accidents Act would have different meanings. While under Section 1-A the term \"representative\" should refer to next-of-kin who are dependants, in Section 2 the same term has to refer to persons representing the estate of the deceased. But when the term has to be understood according to context, we do not see any difficulty in placing such construction on the term which differs from one section to another. ", "31. Sections 110 to 110-F of the Act being only procedural in character and having nothing to do with the substantive rights and liabilities of parties, do not make any reference to either loss of benefit or loss to the estate as heads on which compensation can be claimed in the case of a person whose death was caused by a motor accident. The said sections do not also mention anything about the circumstances under which the owner of the motor vehicle concerned would be liable to pay compensation. As I pointed out, even though the said sections merely speak of payment of compensation, undoubtedly a claimant cannot succeed unless he proves a tortious act on the part of the owner of the vehicle, either by himself or vicariously. A claim for compensation even in respect of a motor accident is certainly governed by the law of torts and only ty virtue of the Legal Representatives' Suits Act and the Fatal Accidents Act claims for compensation in respect of the death of a person in such an accident could be made. Only compensation for loss to the estate of the deceased (the cause of action for which is preserved by the Legal Representatives' Suits Act ) and loss of benefit to the dependants (which right has been created by Section 1-A of the Fatal Accidents Act) can be claimed in case of death of a person in any accident, including a motor accident. In respect of any other accident amounting to a tortious act, the claim has to be necessarily made in the ordinary civil Court. But in respect of a motor accident similarly amounting to a tortious act, the claim has to be made before , except under certain circumstances. It was a heady noted that under the amended provisions of Section 110(i) , under certain circumstances, the claimant can choose the forum and if he opts to make the claim before the ordinary civil Court, the jurisdiction of would be completely ousted in such a case. ", "32. It is in the above context, one has to see the sense in which the term \"legal representative\" is used in Section 110-A of the Act. As I said, the relevant sections in the Act do not speak of either loss of benefit to the dependants or loss to the estate, though undoubtedly in case of death, only under those two main heads compensation can be claimed. Under Section 110-A of the Act, in the case of death of a person, compensation could be claimable not only for the loss to the estate but also loss of benefit to the dependants as contemplated under Section 1-A of the Fatal Accidents Act. The term \"legal representative\", therefore, should necessarily include not only persons who represent the estate of the deceased (who can claim loss to the estate of the deceased), and the next-of-kin who are mentioned as dependants under Section 1-A of the Fatal Accidents Act who can claim compensation for loss of benefit to themselves, whether they represent the estate of the deceased or not. In other words it should take in all persons who can maintain an action under the Legal Representatives' Suits Act (or under Section 2 of the Fatal Accidents Act, as the case may be) as well as those who can maintain an action under Section 1-A of the Fatal Accidents Act. That being so, one cannot restrict the meaning of the term \"legal representative\" occurring in Section 110-A of the Act as that in Section 2(11) of the Code of Civil Procedure. ", "33. It is true that has pointed out in . that the term \"legal representative\" as defined in the Code of Civil Procedure is not limited to administrators, executors and heirs but includes any person who, in law, represents the estate of the deceased. In so saying their Lordships of have quoted with approval the observations of in v. (1904) 8 Cal.W.N. 843. in dealing with the connotation of the term \"legal representative\" occurring in Section 234 of the Code of Civil Procedure, 1882. further points out that because of the above observations of , J. in the said case, in the subsequent Code of Civil Procedure, viz., the present Code, Section 2(11) defining the term \"legal representative\" has widened the scope of the said term. points out that as per Section 2(11) of the present Code of Civil Procedure, \"a person who in law represents the estate of a deceased person\" must include different legatees under the will and that there is no justification for holding that the \"estate\" in the context must mean the whole of the estate. It is also pointed out that a person who is in possession of a part of the estate of the deceased would be an intermeddler with the estate, coming within the scope of Section 2(11) of the Code. Even so, as I already pointed out, a legal representative as contemplated under Section 2(11) of the Code of the Civil Procedure should necessarily represent the estate of the deceased A person who is a dependant under Section 1-A of the Fatal Accidents Act need not necessarily be one who represents the estate of the deceased. Therefore the term \"legal representative.' occurring under Section 110-A of the Act cannot be equated with the term in Section 2(11) of the Code of Civil Procedure. I am clearly of the opinion that the said term occurring in Section 110-A has a wider connotation than that in the Code of Civil Procedure. ", "34. Rule 2(c) of the Madras Motor Accidents Claims Tribunals Rules, 1961 is certainly beyond the rule-making power of . First of all, Section 111-A of the Act gives power to to make rules only for the purpose of carrying into effect the provisions of Sections 110 to 110-F . Under the guise of this power, cannot possibly make a rule as to who are entitled to file an application which would touch upon the substantive rights of parties. The attempted definition under Rule 2(c) is not necessary for the purpose of carrying into effect the provisions of Sections 110 to 110-B of the Act. ", "35. Further as I already pointed out, if the term \"legal representative\" occurring in Section 110-A is to have the same meaning as in Section 2(11) of the Code of Civil Procedure, then the rights of some of the dependents under Section 1-A of the Fatal Accidents Act who may not be persons representing the estate of the deceased, would be affected and they would be out of Court. Surely Sections 110 to 110-F of the Act are not meant to affect the rights of parties under substantive law which is in force. Under all these circumstances, I hold that Rule 2(c) mentioned above is beyond the rule-making power of . ", "36. The State of Mysore had made a similar rule as Rule 2(c) of the Madras Motor Accidents Claims Tribunals Rules, 1961. A Division Bench of held that that was beyond the powers of and ultra vires the Act, in (1969)3 Mys.L.J. 264 : (1969) A.C.J. 439 : A.I.R. 1970 Mys. 67. In a later case, (1971) 2 Mys.L.J. 351 : (1971) A.G.J. 404. another Bench of the same seems to hold that the decision of the earlier Bench is not correct and that the definition of the term \"legal representative\" occurring in Section 2(11) of the Code of Civil Procedure (which definition is applied to the term in Section 110-A of the Act by the rule in de by ) would take in all the dependants mentioned under Section 1-A of the Fatal Accidents Act. That was a case where the question was whether the father of the deceased can maintain an action for compensation regarding the death of his son when the mother of the deceased is alive. Under Hindu Law, the father is not an heir of the son when the mother is alive. The contention was that the father was not a legal representative as contemplated under Section 110-A of the Act and therefore his claim should be negatived. This contention, if I may say so with respect, was rightly rejected by the Bench of . But in doing so, they seem to hold that all the dependants mentioned under Section 1-A of the Fatal Accidents Act would come under the definition of Section 2(11) of the Code of Civil Procedure. With respect, I am unable to agree with that view. As I already pointed out, under Section 2(11) of the Code of Civil Procedure, unless a person represents the estate of the deceased, he cannot be called a legal representative and some of the dependants under Section 1-A of the Fatal Accidents Act need not necessarily be persons who represent the estate of the deceased. In the case before , the father was certainly entitled to maintain the claim not because he would necessarily be a legal representative as contemplated under Section 2(11) of the Cede of Civil Procedure but because he is a legal representative under Section 110-A of the Act which is wider in scope than Section 2(11) of the Code of Civil Procedure. I am of the opinion that the decision of the earlier Bench of in (1969) 2 Mys.L.J. 264 : (1969) A.C.J. 439. A.I.R. 1970 Mys. 67. holding that the rule made by equating the term \"legal representative\" occurring in Section 110-A of the Act with Section 2(11) of the Code of Civil Procedure is beyond the rule-making' power of and ultra vires the Act, is the correct view. In v. (1970) A.G.J. 1. a Division Bench of the Madhya Pradesh held at page 8. ", "The term 'legal representative' must be construed in the context of the provisions of Section 2(11) , Civil Procedure Code, and further also in the context of the provisions of the Fatal Accidents Act . ", "With respect, I agree with the above observation. ", "37. One of the contentions raised on behalf of the appellants is that as Section 110-B of the Act speaks of the making \"an award determining the amount of compensation which appears to it to be just\", the powers of the are independent of the provisions of the Fatal Accidents Act (as well as that under the Legal Representatives' Suits Act ) and that therefore the provisions of the Act must be construed as substantive provisions and not merely procedural in character. This contention is fallacious. It is true that the has to determine \"the amount of compensation which appears to it to be just\". But the question is, compensation for what. If it is a claim by an injured person, he can certainly claim compensation for the pain, suffering, etc. loss of earning, other pecuniary loss arising out of the injury and shortening of expectation of life, if any, provided the injury or injuries had been caused by a tortious act by the owner of the vehicle, by himself or vicariously. So, even though the Claims is given power to determine the amount of compensation which appears to be just, it has necessarily to look to the law of torts in determining such 'just' compensation. Similarly, in case of death due to injuries, 'just' compensation awardable by the should naturally be only towards loss of benefit, if any, and loss of estate, if any, provided again that the death was caused by a tortious act. Therefore by the mere use of the words \"compensation which appears to it to be just\" in Section 110-B , the relevant provisions of the Act (Sections no to 110-F of the Act) cannot be said to create new rights or liabilities. It can never be contended that these provisions in the Act are in any way meant to alter or amend the pre-existing law relating to substantive rights and liabilities of the parties. ", "38. I think I have said enough to show that Sections 110 to 110-F of the Act are only procedural in character and for substantive rights and liabilities of the parties one has necessarily to look to the law of torts read with the Legal Representatives' Suits Act and the Fatal Accidents Act . The recent amendment of Section 110(1) of the Act itself puts the position beyond the pale of controversy. In the recent amendment (i.e.,) under amending Act LVI of 1969, some new sections have been added, one of which ( section 110-CC ) gives power to to award simple interest on the amount awarded from the date of the claim application. It cannot be said that that creates any new right and thereby the provisions in the Act become substantive law and not merely procedural in character, for even the civil is not incompetent to award such interest. ", "39. Now I turn to the case law on the point whether Sections 110 to 110-F are only procedural in character or not. In (1966) A.G.J. 19. of this Court had to deal with the question as to which is the proper forum in respect of an accident which occurred prior to the constitution of . The Division Bench observed at page 21 : ", "As we pointed out, section 110 provides a speeder remedy, obviously conceived as a better one from the point of view of the injured person or his unfortunate dependants. No new right or even a new remedy has beer created by that provisions; the forum alone is changed. The right to claim damages by the legal representatives of a deceased in respect of an accident, where the latter met with, his death, was actionable under the pre-existing law, in civil . The effect of the new provision is to create a new forum, thus, taking away the jurisdiction of the ordinary civil . The aggrieved person has, as before, a remedy for damages in respect of the injury. The forum alone is changed. The period of limitation has also been curtailed, but these two are matters of procedure. ", "Then at page 22, the Division Bench held that as the above provisions in the Act relate only to procedure, the law prevailing at the time of the institution of the action alone will govern such matters. The conclusion was that even in respect of accidents which occurred prior to the constitution of the , only the will have exclusive jurisdiction and the jurisdiction of the civil is ousted. With respect, I agree with the view expressed by the above Bench. ", "40. In v. (1970) A.C.J. 1. (which was referred to earlier in some other connection), has followed the above decision of this Court and held that Sections 110 to 110-F of the Act only provide a more expeditious remedy and that they do not create any new rights. (1970) A.C.J. 310 : A.I.R. 1970 M.P. 168. as well as . has taken the same view. The last decision mentioned is by a Full Bench of . A.I.R. 1968 Punj. 540. a similar view has been taken and it has been held that Sections 110 to 110-F merely deal with the subject of the substitution of in place of civil Courts for the purpose of adjudicating on claims for compensation and they do not deal with the question of substantive rights and liabilities of parties. has taken a similar view in Ariyamma v. (1972) A.G.J. 22. High. Court has also taken a similar view in two cases viz., v. (1971) A.G.J. 49. and (1972) A.G.J. 92. (1969) A.G.J. 286. has also taken a similar view. . is also of the same view. ", "41. However, there is another line or cases starting from, a Bench decision of this Court taking a different view, (1966) A. 349. is a decision of of this Court dismissing a Letters Patent . Appeal in limine. That is a case where the sister of a person who died in a motor accident claimed compensation. The claim was upheld by , J., Over that, the owner of the vehicle and the insurer thereof filed the Letters Patent Appeal. , , and , J., refused to admit the Letters Patent Appeal and dismissed it. While doing so, they have made certain observations which are not in consonance with the view expressed in Palani Ammal v. The Safe Service Limited\" (1966) A. 19. (a decision by of this Court consisting of , C.J., and , J.) and other cases. The sister of a deceased person is no doubt not a dependant as contemplated under Section 1-A of the Fatal Accidents Act, but still, if she represented the estate of the deceased, she could certainly maintain an action for claim on the ground of loss to the estate of the deceased. Therefore there is nothing wrong in awarding compensation to her towards the death of her brother. The learned Judges concluded at page 350. ", "The only point was whether the claim could be advanced by the married sister of the deceased who died as bachelor. It can certainly be so advanced, since Section 110-A definitely provides for the foundation of a claim by any legal representative of the victim of the accident. ", "This conclusion does not go counter to the view expressed by us and in v. (1966) A.G. 19. as well as other cases already referred to. But the learned Judges (, , and , ,) in the course of their order dismissing the Letters Patent Appeal in limine, have observed that Sections 110 to 110-F have no connection whatsoever with the Indian Fatal Accidents Act and that they constitute a self-contained code for the adjudication of claims to compensation on behalf of the victims of a motor accident and the provided a complete machinery for the adjudication of such claims. The learned Judges, however, did not specifically go into the question whether Sections 110 to 100-F of the Act are only procedural in character or whether they lay down substantive law. ", "42. The decision of the earlier Bench (i.e.) in v. (1966) A. 19. does not seem to have been brought to the notice of the learned Judges who decided in (1966) A. 349. It is against the judgment of , , the Letters Patent Appeal had been filed before , , and , , , , is a party to the decision in v. (1966) A. 19. which specifically holds that Sections 110 to 110-F of the Act are only procedural in character and they do not create any new rights or liabilities. Therefore , , in the judgment which was challenged in the Letters Patent Appeal before , and , , could not have expressed a different view. As I said, even , and , , have not specifically dealt with the question whether the abovesaid sections of the Act are only procedural in character or they constitute substantive law. Anyway, the decision of , and , J cannot be treated as a precedent in view of the fact that the judgment was not rendered after full arguments and it was only a dismissal of the Letters Patent Appeal even at the admission stage. had held in v. Chief Executive Officer A.I.R. 1955 Nag. 49 at 64. that an argument addressed at motion hearing is rarely full and that a decision given at such a hearing must be held to be one given by the learned Judge per incuriam and that such a decision by a Court per incuriam is not binding as a precedent. In v. Charles Leslic Norman L.R. (1924) 2 K.B. 315. and . (1950) a K.B. 466. it has been held that decisions rendered without hearing both the sides are not entitled to great weight. These decisions have been followed by one of us in (1968) 1 M.L. 9. Therefore the. decision by , , and , is not a precedent, apart form the fact that the point in question has not been specifically dealt with in that judgment. ", "43. In v. (1967) A.G.J. 297. a single Judge of observed that in fixing the quantum of compensation in respect of a motor accident, the principles enunciated by in v. . do not apply on the ground that the claim is not made under the Fatal Accidents Act but only under the provisions of the Motor Vehicles Act . This decision seems to suggest that Sections 110 to 110-F of the Act are not merely procedural in character. The earlier decision of the same , (i.e.) v. . taking the view as I do in this case, has not been considered by the Judge who decided in v. (1967) A.C.J. 297 (1968) A.G.J. 141. and Sons v. (1971) A.G.J. 324. and (1971) A.G.J. 468. are all judgments of the Delhi expressing the contrary view. The first of these three cases has followed the judgment of , G.J. and , J., ( (1966) A.G.J. 349. (1972) A.G.J. 334. the Punjab and Haryana has followed the judgment of , G.J. and , J., in (1966) A.G.J. 349. as well as the decision of the Delhi in (1968) A.G.J. 141. In these decisions, the view expressed by , C.J. and , J., in (1966) A.G.J. 19. and the other cases which take a similar view, have not been considered. For the reasons discussed earlier I am unable to follow the view contained in the above decisions. ", "44. . a Division Bench of this Court referred to the decision of ., C.J. and , J., in (1966) A.G.J. 349. with approval. The decisior of the earlier Bench of this Court viz., that of , C.J. and , J., in v. (1966) A.G.J. 19. does not seem to have been brought to the notice of the learned Judges. The amendment to Section 110(1) of the Act made by Act LVI of 1969 which, as I said earlier, strengthens the view that Sections 110 to 110-F of the Act are only procedural in character and have nothing to do with the substantive rights and liabilities of parties, also dots not seem to have been brought to the notice of the learned Judges. ", "45. That apart, though has stated that Sections 110 to 110-F of the Act are self-contained and exhaustive, has not held that they create new rights or liabilities. The claimant in the case before is the mother of the victim who would be entitled to claim loss of benefit under Section 1-A of the Fatal Accidents Act as well as loss to the estate of the deceased as a person representing his estate. Therefore the only question before was regarding the principles which are to be applied in determining the quantum. The learned Judges said in respect of the determination of the quantum that the decisions rendered under the general law of tort and under the Fatal Accidents Act will undoubtedly be relevant and constitute broad guidelines, but they would not be binding on the in the sense that the method of approach should be the same and identical as in the cases arising under the Fatal Accidents Act . I am of the view that the latter part of the above observations of the learned Judges who decided . would not have been made if the decision of the earlier Bench in v. (1966) A.G.J. 19. and the amendment to Section 110(1) of the Act made by the amending Act LVI of 1969 had been brought to their notice. ", "46. The only other decision which has to be referred to in this connection is v. (1968) A.G.J. 24. which is one by a single Judge of this Court. That was a case where the sister of a person who died in a motor accident claimed compensation. ", "47. dismissed the claim on the ground that the sister is not a dependant as contemplated under Section 1-A of the Fatal Accidents Act. The appeal filed by the sister was allowed. The sister, as a person representing the estate of her deceased brother, would certainly be entitled to claim compensation for loss to the estate of the deceased. But surely she would not be entitled to claim loss of benefit to herself because she is not a dependant under Section 1-A of the Fatal Accidents Act. In allowing the appeal, the learned Judge has observed that the Motor Vehicles Act , 1939, is a special enactment and that it excludes the general enactment, viz., the Fatal Accidents Act , 1855. This observation cannot be held to be good law. If the claim is towards loss of benefit, it should necessarily be under the Fatal Accidents Act and without invoking the provisions therein there is no scope for awarding compensation for loss of benefit. ", "48. The resulting position form the above discussion is that in respect of applications under Section 110-A of the Act for the death of a person in a motor accident, the claimants must prove that the accident amounted to a tortious act and if that is proved, compensation can be awarded for loss of benefit to the claimants if they are dependents as contemplated under the provisions of the Fatal Accidents Act and compensation can also be awarded towards loss to the estate of the deceased, whether the claimants are dependants under the Fatal Accidents Act or not. ", "49. It is unnecessary to deal with the principles that would govern the assessment of the quantum of compensation towards loss of benefit in this case because the claimants (appellants before us) are not dependants of the deceased as contemplated under Sections 1-A and 4 of the Fatal Accidents Act. However, I may mention that it is settled law that while fixing the quantum of compensation towards loss of benefit, any pecuniary advantage received by the claimants upon the death of the deceased should also be taken into consideration and compensation awarded towards loss to the estate of the deceased would also be such pecuniary advantage which should be taken into consideration in assessing the quantum towards loss of benefit. If there is pecuniary advantage to the claimants, that should go in reduction of the quantum of compensation awarded towards loss of benefit. ", "50. Any one who represents the estate of the deceased would be entitled to claim compensation towards loss to the estate. Such person who represents the estate need not necesarily be the heir of the deceased. But in this case the claimants being the brothers and sister of the deceased who was a bachelor and he having left no parents are his nearest heirs, they are undoubtedly entitled to claim loss to the estate of the deceased. ", "51. There can be no dispute that under the head \"loss to the estate of the deceased\" (which at times is called \"loss of estate\"), damages towards pain and suffering, loss of earnings and other damages actually suffered by the victim between the date of the accident and the moment of death, damages towards loss of personal property and damages for loss of expectation of life may be awarded (vide Halsbury's Laws of England, Volume 28, page 100). If a person who is injured lives for sometime but later succumbs to the injuries sustained in the accident, a person who represents the estate of the deceased can claim damages for the pain and suffering of the deceased as well as loss of earnings and other damages actually suffered by the victim between the date of the accident and the date of death. But in the present case, the man was killed instantaneously. Therefore there was no pain and suffering to the deceased or any loss of earning from the time of accident till the time of death. There is also nothing to show that the deceased suffered any other damages due to the accident. Therefore the only ground on which compensation can be claimed under the head \"loss to the estate of the deceased\" is loss of expectation of life. What exactly is loss of expectation of life, is the question. As the law of torts is not governed by any statute, Courts in our country follow the principles laid down by the Courts in England. The earliest case which recognised damage towards loss of expectation of life is v. (1935) 1 K.B. 354. That was a case not of death of the victim but only a case of injury to the victim. decided that the injured in that case, whose expectation of life had been diminished by reason of his injuries, was entitled to be compensated in damages for loss of expectation of life. The injured in that case was a man aged 61 years at the date of the accident. It was found as a matter of fact, by the trial Judge that in spite of old age, the injured had been in good health and good condition and, in the ordinary course of events, could expect to have lived for at least a further 8 or 9 years. found that as a result of the injuries, his expectation of life : had been very materially shortened. There was a compendious award of \u00a34,000 towards pain and suffering, physical disabilities and loss of expectation of life. Damages for loss of expectation had not been separately indicated. In Rase v. Ford (1937) A.G. 326. ' held that damages for loss of expectation of life could be recovered on behalf of the deceased's estate in an action under the Law Reform (Miscellaneous Provisions) Act, 1934. v. (1935) 1 K.B. 354. is referred to by and they held that the principle laid down in that case, viz., that damages can be claimed for loss of expectation of life, is not confined to the case where the injured person is alive at the date of the action and therefore the said damages can be claimed by the representative of the estate of the deceased as part of loss to the estate, as a cause of action which entitled the injured to sue for loss of expectation of life survived to the person representing the estate of the injured who died, under the Law Reform (Miscellaneous Provisions) Act, 1934. In v. (1941) A.G. 157. explained the measure of damages for loss of expectation of life. ", "52. It is pointed out that damages given for shortening of life (loss of expectation of life) should not be calculated solely, or even mainly, on the basis of the length of life that is lost but they should be fixed at a reasonable figure for the loss of a measure of prospective happiness. It is also pointed out that if the character or habits of the deceased are calculated to head him to a future of unhappiness or despondency, that would be a circumstance justifying a smaller award. It is further pointed out that damage under this ground viz., loss of expectation of life, is not on the basis of loss of future pecuniary prospects but it is only for the loss of a measure of prospective happiness. In the case before , the victim was an infant child of 21/2 years and the father of the child who died in the accident claimed compensation for loss of expectation of life. reduced the award from \u00a31,200 to \u00a3200 only. At page 166, Viscount , L.C. spoke. ", "The question thus resolves itself into that of fixing a reasonable figure to be paid by way of damages for the loss of a measure of prospective happiness. Such a problem might seem more suitable for discussion in an essay on Aristotelian Ethics than in the judgment of a of law, but in view of the earlier authorities, we must do our best to contribute to its solution. The learned Judge observed that the earlier decisions quoted to him assumed 'that human life is, on the whole, good'. I would rather say that, before damages are awarded in respect of the shortened life of a given individual under this head, it is necessary for the to be satisfied that the circumstances of the individual life were calculated to lead, on balance, to a positive measure of happiness, of which the victim has been deprived by the defendant's negligence. If the character or habits of the individual were calculated to lead him to a future of unhappiness or despondency, that would be a circumstance justifying a smaller award. It is significant that, at any rate in one case we were informed, the jury refused to award any damages under this head at all. As Lord said in v. (1937 A.G. 826. special cases suggest themselves where the termination of a life of constant pain and suffering cannot be regarded as inflicting injury, or at any rate as inflicting the same injury as in more normal cases. I would further lay it down that, in assessing damages for this purpose, the question is not whether the deceased had the capacity or ability to appreciate that his further life on earth would bring him happiness, the test is not subjective and the right sum to award depends on an objective estimate of what kind of future on earth the victim might have enjoyed, whether he had justly estimated that future or not. Of course, no regard must be had to financial losses or gains during the period of which the victim has been deprived. The damages are in respect of loss of life, not of loss of future pecuniary prospects. ", "In v. (1968) A.G. 529. the claim was towards loss of expectation of life claimed by the mother of a victim who was aged 20 years and 4 months on the date of accident. The principles stated in v. (1941) A.G. 157. were reaffirmed and said that only moderate figures should be chosen towards damages on this ground, viz., 1. loss of expectation of life. v. (1970) 2 Q.B. 541. is a case where the wife of a person who was killed in an accident claimed damages for loss of expectation of life. The deceased in that case had been leading the life of a criminal. It Was pointed out that since the Court was entitled to take judicial notice of the fact that the life of a criminal was not a happy one, damages for loss of expectation of life, which in reality were damages for loss of the element of happiness in life, should be assessed only at half of the maximum sum usually awarded. Thus it would be clear that on the ground of loss of expectation of life, compensation is to be assessed only for the loss of future happiness and such assessment should be of a moderate amount. If there are materials to show that the victim would not have led a happy life if he had not been killed in the accident, the assessment of compensation for loss of expectation of life has to be lower than in normal cases. Loss of expectation of life has nothing to do with loss of earnings during the period in which the deceased would have lived but for the accident. In Road Accident by D.W. Eliot and , at page 208 the grounds on which loss to the estate of the deceaed can be claimed are summarised thus : ", "The estate can claim damages for the loss of earnings, pain and suffering and other damage actually suffered by the victim between the date of the accident and the moment of death. held in one case that the estate could recover for the loss of future happiness of the victim, but Viscount was soon to persuade his fellow Law Lords that this claim should be strictly contained : the result is that no more than \u00a3 500 or so is recoverable by the estate for this...The estate cannot claim for loss of earnings in the period during which the victim would otherwise have lived; there is no claim for future loss of amenities or limbs and the like. These last denials do not rest on express statutory provisions; it is merely that the in practice will not countenance those claims. ", "Charlesworth on Negligence, 4th Edn., at page 571, paragraph 1236, says that loss of the wages that the deceased would have earned during the years by which his life has been reduced are to be disregarded while assessing the loss of expectation of life. I would quote the relevant passage : ", "In assessing damages under this head, regard must be had to the injured party's normal expectation of life and not to his expectation of life in his injured condition, or to the fact that his injuries are such that he does not want his life to be prolonged or does not know it has been shortened. Loss of the wages he would have earned during the years by which his life has been reduced are to be disregarded. 'The only relevance of earnings which would have been earned after death is that they are an item of damages for loss of expectation of life, in the sense that they are one of the minor elements which indicate that a person earning a reasonable livelihood is more likely to have an enjoyable life.' Nothing can be awarded for loss of prospects of making provisions for dependants. ", " . 35 of 1965. , J., had to deal with a case where loss of expectation of life had to be assessed in respect of a man aged 60 who was killed in a motor accident. The deceased was a retired Junior Superintendent of and be was drawing a pension of only Rs. 35.15 per month. There was no prospect of his earning anything more in the years to come and there was no question of his saving anything out of it. But his sons, whom he had educated earlier, were fairly well-placed in life. It was also in evidence that the deceased though aged 60, was keeping good health. Considering these facts, , J., held that the deceased could have expect d to be looked after well and maintained comfortably by his sons and that therefore by his death there was loss of prospective happiness to the deceased that the assessment of the same at Rs. 4,000 was not so excessive that called for interference and that the same could be claimed as part of loss to the estate of the deceased. ", "53. On behalf of the appellants it cannot be contended that money which the deceased would have earned in future but for his death in the accident and the possible savings therefrom should also be taken as part of loss to the estate of the deceased. Such future earnings have nothing to do with loss of expectation of life except perhaps that the possible future earnings would be an element only for the purpose of finding out whether the man's life would have been happy if he had lived. The illustration given by in (1962) 1 S.G.J. 206 : (1962) M.L.J. (Crl.) 120 : (1962) 1 S.G.R. 929 : A.I.R. 1962 S.G. 1 at 8. cannot be construed as a proposition of law to the effect that loss of future earnings of the deceased would be part of loss to the estate claimable by the legal representatives of the deceased. The case before their Lordships of was one in which a sum of Rs. 25,200 had been awarded to the claimants towards loss of benefit and a sum of Rs. 5,000 had been awarded towards loss to the estate. The question that was argued before their Lorships of was as to whether the sum of Rs. 5,000 awarded towards loss to the estate is a duplication and therefore it should go in reduction of the sum of Rs. 25,000 odd awarded for loss of benefit. Their Lordships at page 8, paragraph 13 concluded : ", "In the instant, case under Section 1 of the Act both the gave compensation to plaintiffs 2 to 7 in a sum of Rs. 25,200. This sum was arrived at by taking into consideration, inter alia, the reasonable provision the deceased, if alive, would have made for them. Under Section 2 both the awarded damages for the loss to the estate in a sum of Rs. 5,000. That figure represents the damages for the mental agony, suffering and loss of expectation of life. There was no duplication in awarding damages under both the heads. ", "Their Lordships of stress the fact that the right of action in respect of compensation for loss of benefit and that towards loss to the estate are quite distinct and independent and that there was nothing wrong in awarding compensation under both the heads even though the claimants may be the same. However there can be no dispute that any sum paid to a dependant of the deceased (who is entitled to compensation towards loss of benefit) as compensation for loss to the estate would be a pecuniary advantage to him. But for the death of the deceased, there would be no occasion for the said dependant to receive compenation towards loss to the estate as a person representing the estate of the deceased. There can also be no dispute that any pecuniary advantage, including that by way of compensation for loss to the estate, should be taken into consideration in assessing the quantum of compensation payable for loss of benefit. Their Lordships of do recognise this, for they quote with approval Rose v. Ford (1937) A.G. 826. and Ors. cases of the Courts in England which make it clear that when the claimant under both the heads is the same, the sum awarded towards loss to the estate should go in reduction of compensation for loss of benefit. It is true that upheld the award of Rs. 25,200 for loss of benefit in spite of the fact that Rs. 5,000 had been awarded under the other head, but there is nothing to show that in that case in fixing the quantum of compensation towards loss of benefit had not taken into consideration the award under the other head. A sum of Rs. 25,200 had been fixed as the compensation for loss of benefit in that case and that works out only to about 8 years' purchase of the annual dependency. Considering the age of the deceased, his earnings, the benefits that the dependants would have got and other circumstances, it is quite possible that would have fixed the compensation for loss of benefit at a higher amount but for the fact that a sum of Rs. 5,000 was being awarded towards loss to the estate. Only under such circumstances it has been held that there was no ground to reduce the sum of Rs. 25,200 awarded towards loss of benefit on the alleged ground that there was duplication in awarding damages. We are, however, not concerned with this aspect of the matter in the present case. ", "54. It is while discussing the point that the compensation awarded under the two heads, viz., one for loss of benefit and the other towards loss to the estate, are two independent claims, their Lordships of have referred to what is loss to the estate. It is pointed out that loss of expectation of life is part of loss to the estate which was recoverable under Section 2 of the Fatal Accidents Act. In the concluding paragraph which I have quoted above, their Lordships have indicated what would constitute loss to the estate. It is stated that damages for mental agony and suffering and loss of expectation of life would be part of loss to the estate. In the above concluding paragraph, their Lordships have not stated that the expected future earnings of a deceased person or the possible savings therefrom would be part of loss to the estate. It cannot also be said that their Lordships were of the view that loss of expectation of life would include the expected future earnings of the deceased. It was already noticed that loss of expectation of life is nothing but loss of the element of prospective happiness. v. (1937) A.G. 826. referred to by us earlier and some other decisions of the Courts in England have been referred to by their Lordships of with approval, though for the other aspect, viz., that the two heads of claim are independent of each other but when the claimant is the same, the amount awarded towards loss to the estate should go in reduction of compensation for loss of benefit. Those decisions make it abundantly clear that loss of expectation of life is only loss of prospective happiness. The illustration in the decision of was not for showing what is loss to the estate, for the question that was under consideration by their Lordships was not as to what was loss of estate or what is loss of expectation of life. The question that was argued before them was that the sum of Rs. 5,000 awarded towards loss to the estate should go in reduction of the sum of Rs. 25,200 awarded towards, loss of benefit. Nowhere in the judgment of there is any observation that the expected future earnings of the deceased or the savings there form is, part of 'loss of expectation of life,' or any other item of loss to the estate. Under all these circumstances, the illustration, cannot be understood as saying that the possible future earnings of the deceased or savings therefrom, are to be calculated as part of loss to the estate. ", "55. I have already said that in the present case the deceased did not undergo any pain or suffering as he had been killed instantaneously. So on the head of loss to the estate of the deceased, the only ground on which compensation can be awarded in this case is loss of expectation of life, viz., loss of prospective happiness. The deceased was a young man and a manual labourer. But for the accident he can be expected to have a happy life as happiness does not depend upon wealth or status. If the deceased had not been killed but only crippled and thereby there was shortening of his life, he himself would have been entitled to claim compensation for loss of expectation of life. He having been killed, his legal representatives are entitled to claim the said compensation as part of the estate of the deceased. I think that a sum of rupees five thousand would be a proper assessment of compensation on this ground. ", "56. Accordingly, the appeal is allowed to the extent that there will be an award in favour of the appellants (claimants before the below) for rupees five thousand, which sum is payable by the 2nd respondent the insurance company, within a month from this date. There will be no order as to costs. ", "Kailasam, J.--The facts of the case have been fully set out by nay learned brother and need not be reiterated. The questions that arise in this Civil Miscellaneous Appeal are whether the accident was due to the negligence on the part of the driver of the lorry and whether the claimants who are the brothers and sisters of the person who was killed in the accident are persons entitled to compensation under Section 110-A of the Motor Vehicles Act. I have no hesitation in concurring with the finding of my learned brother that the driver of the lorry was guilty of negligence. Regarding the question whether the brothers and the sisters of the deceased are entitled to claim compensation, there could be no difficulty in holding that they are entitled to compensation towards loss of estate of the deceased; but not as claimants under Section 1-A of the Indian Fatal Accidents Act, 1855 (VIII of 1855) ", "58. It has been held by this Court in Palani Ammal v. The Safe Service Limited (1966) A.G.J. 19. that Sections 110-A to 110-F do not create any new right or even a new remedy; but the forum alone had been changed. The case law on this subject has been fully discussed by my learned brother and I agree with the preponderance of judicial opinion and the conclusion arrived at by my learned brother that the provisions in Sections 110-A to 110-F of the Motor Vehicles Act, are only procedural and do not purport to confer any substantial right or liability on the parties. ", "59. I agree with the conclusion of my learned brother that all persons who are entitled to make an application for compensation under Section 110-A of the Motor Vehicles Act. will be legal representatives of the deceased within the meaning of the said section; but I am unable to associate myself with the view that the definition of the term 'legal representative' in Section 2(11) of the Code of Civil Procedure, would not include all persons who are entitled to apply for compensation under Section 110-A of the Motor Vehicles Act, and that Rule 2(c) of the Madras Motor Accidents Claims Tribunals Rules, 1961, which provides that the term \"legal representative\" shall have the meaning assigned to it under Clause (11) of Section 2 of. the Code of Civil Procedure, is ultra vires the rule-making powers of the Government. On our conclusion that all claimants under Section 110-A of the Motor Vehicles Act, are legal representatives of the deceased and are entitled to compensation as provided for under Section 11 o-B, strictly the question as to whether, in view of the scope of the definition of the term 'legal representative' in Section 2(11) of the Code of Civil Procedure, Rule 2(c) of the Motor Accidents Claims Tribunals Rules, 1961, is ultra vires or not does not arise in this case. But as the question had been discussed at some length by my learned brother, I would indicate my opinion briefly. ", "60. The term \"legal representative' was not defined under the old Code. Under the English law, the primary meaning of the expression is 'executor or administrator' though it may, under special circumstances be controlled by the context. In Indian law while in earlier cases a strict meaning was given to the expression 'legal representative', subsequently the term was construed to cover all persons representing the estate of the deceased person. Under the old Code, a strict meaning was given to the term 'legal representative' as in the English law. In v. (1904) 8 C.W.N. 843. the scope of the term 'legal representative' is discussed. , in repelling the contention that the term should be construed strictly and cannot include anybody except the heir, executor or administrator of the deceased as the term and the definition were taken from English law and that when the used the term \"legal representative' in the section and not the word 'representative' it must have intended to use it in the strict sense, observed, that the section appears to have been drawn for the protection of the decree-holders and to give them a right to relief against the successor in property or estate of the deceased judgment-debtor. The learned Judge held that the term 'legal representative' appears to have been used as one which would cover ordinary cases of succession. After discussing the case law on the point, the learned Judge held that both in English and Indian law cases have arisen in which the erm 'legal representative has no' been strictly confined to its primary meaning. It was held that the term 'legal representative' has been used in Section 234 , Code of Civil Procedure, to meet the circumstances of a certain event, viz., the passing of the property, the subject of the litigation, on the death of the deceased judgment-debtor to her successor and to include such successor either to her estate or to the property in suit. It was further held that it should not be so strictly interpreted as to defeat the rights of, of a decree-holder in an exceptional case for which the could not have been expected to have otherwise specially provided. , J., observing that in their strictest and most ordinary sense the words 'legal representatives' are understood to mean executors and administrators only, held that the term is yet one which is naturally capable of a more extended sense than that in which it is ordinarily and strictly employed. The definition has also been extended to the case of a person who without title as administrator, executor, heir, revensioner or surviving coparcener is the de facto possessor of the estate of the deceased Hindu it having been held that he must be treated for some purposes as his representative and that a judgment obtained against such a representative is not a mere nullity. After an elaborate review of the authorities, the learned Judge summed up the position thus :-- ", "From this review of the authorities it Will appear that judicial decisions have extended the sense of the term 'legal representative' beyond that of its ordinary meaning of administrator, executor, and heir, and though such extension has been attended with doubt and has in some cases been the subject of conflicting decisions it appears to me to be too late now to endeavour, however, convenient it might be, to secure for the term that which is perhaps its strict and legitimate sense. I agree, therefore, in holding that the term is not limited to administrators, executors and heirs and am of opinion that it must now be held to include any person who in law represents the estate of a deceased judgment-debtor. ", "The definition of the term 'legal representative' in Section 2(11) of the Code of Civil Procedure, is too wide and the has in fact given effect to the views expressed in v. (1904) 8 G.W.N. 843. and introduced the present definition of the term 'legal representative' in Section 2(11) of the Code of Civil Procedure which reads as follows :-- ", "'Legal representative' means a person who in law represents the estate of a deceased person and includes any person who intermeddless with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued. ", "According to the present definition, the term 'legal representative' is very wide in its amplitude and covers all persons who in law represent the estate of the deceased person. The words executor, administrator, etc., are all omitted and what is now required is that the person must in law represent the estate of the deceased person. ", "61. (1923) 44 M.L.J. 732 : 49 I.A. 395 : A.I.R. 1922 P.G. 359. the word 'representative' Was held to be a term of ambiguous meaning and it must be construed according to its context. In Stroud's Judicial Dictionary, it is stated that the meaning of the term ' representative', ' legal representative', ' personal representative' or ' legal personal representative' may be controlled by the context. ", "62. . after quoting with approval a passage from the judgment of , J referred to supra, held that a legatee who obtains only a part of the estate of the deceased under a will can be said to represent his estate under Section 2(11) of the Code of Civil Procedure. The Court held that the whole object of widening the scope of the expression 'legal representative' which the present definition is intended to achieve would be frustrated if it is held that legatees of different portions of the estate of a deceased do not fall within its purview. Thus, it is settled law that any person who becomes entitled to a part of the estate can be held to represent the estate and thereby a legal representative of the deceased. ", "63. The point that arises is whether a person who claims compensation on the death of a person, is a person who in law represents the estate of the deceased person. ", "64. Section 1-A of the Fatal Accidents Act, 1855, provides that a suit for compensation to the family of a person for loss occasioned to it by his death by actionable wrong is maintainable. The section provides that such a suit shall be for the benefit of the wife, husband, parent or child, if any, of the person whose death has been caused and it shall be brought by and in the name of the executor, administrator or representative of the person deceased. In such an action, the will award damages in proportion to the loss resulting from such death to the parties respectively, for whom and for whose benefit such action shall be brought. The amount shall be divided amongst the parties mentioned in such shares as the by its judgment or decree shall direct. Section 2 provides that not more than one action or suit shall be brought in respect of the same subject-matter of complaint and that in any such suit or action, the executor, administrator or representative of the deceased may insert a claim for and recover any pecuniary loss to the estate of the deceased occasioned by such wrongful act, neglect or default, which sum, when recovered, shall be deemed part of the assets of the estate of the deceased. Reading Sections 1-A and 2 of the Act as a whole, it appears that the scheme of the Act is for the administrator, executor or representative of the deceased to file a suit for the benefit of the dependants, and in such a suit to include a claim for any pecuniary loss to the estate of the deceased. Prima facie, the Act does not contemplate a suit by everyone of the dependants, but only a suit on behalf of the dependants by the executor, administrator or representative of the deceased. ", "65. The scope of Sections 1-A and 2 of the Fatal Accidents Act 1855, came up for consideration in . (1905) I.L.R. 23 Mad. 479 : 15 M.L.J. 363. The learned Judges in summing up the provisions of Sections 1-A and 2 of the Act observed as follows :-- ", "In cases where the deceased is represented by an executor or an administrator such an executor or administrator is given the power to sue for the compensation for the benefit of the specified relations. Where there is no executor or administrator or where there is one, and he fails, or is unwilling to sue, then in our opinion the suit may be instituted by, and in the name of, the representative of the person. deceased. But one suit only is allowed to enforce the claims of all the persons beneficially entitled, it being provided that the rights of each and every one of them shall be adjudged and adjusted by the in such suit. The right of each beneficiary is only to receive compensation in proportion to the loss occasioned to him by the death of his deceased relative. ", "Regarding the term \"representative\" of the deceased, the Court held that there was no reason for limiting the meaning of the word in a narrow way and found that the word meant and included all or any one of the persons for whose benefit a suit under the Act can be maintained, and that these persons are the representatives of the deceased in the sense that they are the persons taking the place of the deceased in obtaining reparation for the wrong done. This decision is an authority for the proposition that the word 'representative' of the deceased in Act XIII of 1855, would include any person who takes the place of the deceased for obtaining reparation for the wrong done. To be a 'legal representative' under Section 2(11) of the Code of Civil Procedure, a person in law must represent the estate of the deceased person. When a person is taking the place of the deceased as his representative, it would follow that he represents also the estate of the deceased. The extended meaning given to the word 'representative' of the deceased in . Co. (1905) I.L.R. 28 Mad. 479 : 15 M.L.J. 363. especially when the procedure contemplated under the Act enabled the executor, administrator or representative of the deceased to file a suit on behalf of the dependants and others, with equal force, will apply to the term 'legal representative', and the persons taking the place of the deceased for obtaining reparation for the wrong done will not only be representatives for the purpose of the Act (XIII of 1855), but also under Section 2(11) of the Code of Civil Procedure. It would be too narrow a construction that though the persons taking the place of the deceased are representatives of the deceased, they are not the representatives of the deceased's estate. The observation in . (1906) I.L.R. 28 Mad. 473 : 15 M.L.J. 363. is that the term representative would apply to any person taking the place of the deceased in a suit under Act XIII of 1855 which would include a claim for the benefit to the estate also. It follows therefore that the definition of the term 'legal representative' in the context is wide enough to cover all persons who can maintain a claim for compensation taking the place of the deceased person. The extended meaning of the word 'representative' under Act XIII of 1855 has been given following (1906) I.L.R. 28 Mad. 473 : 15 M.L.J. 363. in later cases like A.I.R. 1934 Gal. 655. ", "66. Under Sections 110-A to 110-F of the amended Motor Vehicles Act , the procedure has been made simpler and a suit by the executor, administrator or representative of the deceased on behalf of the claimants has been dispensed with and all the persons entitled to compensation are enabled to maintain an application under Section 110-A , thereby giving effect to the extended meaning of the word 'representative' in Section 1-A of the Fatal Accidents Act rendered in . (1906) I.L.R. 28 Mad. 473 : 15 M.L.J. 363. In the circumstances, the term 'legal representative' can be construed as including all claimants under Section 110-A of the Motor Vehicles Act. ", "67. The only other point that needs reference is the scope of the words 'loss of benefit to the estate'. This question has been fully dealt with by my learned brother and I do not want to add anything more except to state that taking all the circumstances, it does not appear that by its illustration given in . intended to lay down that loss of future earning of the deceased would be part of loss to the estate claimable by the legal representatives, making a complete departure from the established law in England. As in this case the question does not arise, as the deceased who was a labourer would not have accumulated any earnings for future during his life time, the petitioners would not be entitled to any increase in the compensation awarded to them on the ground of likely loss of future earnings or savings therefrom occasioned to the estate of the deceased."], "relevant_candidates": ["0000045190", "0000251519", "0000506701", "0000506712", "0000541371", "0000693296", "0000736384", "0000755015", "0000817233", "0000947881", "0001281733", "0001441202", "0001508646", "0001543835", "0001589786", "0001725452", "0001731463", "0001767518", "0001814137", "0001860221", "0001937010", "0001991214", "0066528263"]} {"id": "0000863497", "text": ["PETITIONER: SHIV KUMAR CHADHA ETC. ETC. Vs. RESPONDENT: MUNICIPAL CORPORATION OF DELHI AND ORS. DATE OF JUDGMENT04/05/1993 BENCH: BENCH: VENKATACHALLIAH, M.N.(CJ) SAWANT, P.B. CITATION: 1993 SCR (3) 522 1993 SCC (3) 161 JT 1993 (3) 238 1993 SCALE (2)772 ACT: % Code of Civil Procedure, 1908: Section 9-Civil 's jurisdiction- Ouster when. Delhi Municipal Act, 195: Sections 343 , 347E -Suits in connection with orders passed or proceedings initiated for demolition of constructions- Maintainability of-Directions of Supreme . Code of Civil Procedure, 1908: Order 39, Rule 3, proviso Temporary injunction-Granting of- When-'s duty-Reasons for grant of injunction-Mandatory to record- directions. HEADNOTE: In respect of some private dispute between two neighbors a writ application was filed in . On the material produced in the case it was treated as a Public Interest Litigation and was to rind out a solution in respect (if unauthorised constructions alleged to have been made by different owners/occupiers/builders without sanctioned plans or by making deviations from the sanctioned plans. wanted to ensure that such unauthorised constructions were not perpetuated on the basis of interim orders of injunction passed by . disposed of the petition holding that the owners/ occupiers/builders were to be given liberty to file fresh building plans and that was to examine such building plans in accordance with law and that the was to seal and to demolish those constructions which were beyond the compoundable limits. also directed that no civil suit would be entertained by any in Delhi in respect of any action taken or proposed to be taken by the with regard to the sealing and/or demolition of any building or any part thereof. directed further that person aggrieved by an order of sealing or demolition had the right to file an appeal to under the Delhi Municipal Act, 1957. 522 523 Against 's order the present appeals were filed by special leave. On the question, \"whether the jurisdiction of the has been statutorily barred in respect of suits in connection with the orders passed or proceedings initiated for demolition of constructions, which have been made without sanction or by deviating from the sanctioned plans\", allowing the appeals, this , HELD:1.1. With the increase in the number of taxing statutes, welfare legislations and enactments to protect a class of citizens,a trend can be noticed that most of such legislations confer decision making powers on various authorities and they seek to limit or exclude 's power to review those decisions. The result is that the power of the under section 9 of the Code is being denuded and curtailed by such special enactments, in respect of liabilities created or rights conferred. The ouster of the jurisdiction of the is upheld on the finding that the rights or liabilities in question had been created by the Act in question and remedy provided therein Was adequate. (535-D-F) 1.2.The situation will be different where a statute purports to curb and curtail a pre-existing common law right and purports to oust the jurisdiction of the so far remedy against the orders passed under such statute are concerned. In such cases,the courts have to be more vigilant, while examining the question as to whether an adequate redressal machinery has been provided, before which the person aggrieved may agitate his grievance. (535-G) 1.3.In spite of the bar placed on the power of the , orders passed under such statutes can be examined on \"jurisdictional question\". A suit will be-maintainable. (536-F) v. , AIR 1974 SC 1069; , AIR 1964 SC 807; v. , 1960 A.C. 260 and , 1969 2 AC 147, relied on. v. , 6 524 C.B. (N.S.) 336; v. Newspaper Limited. Appeal Cases 368; v. , Appeal Cases 615; ., AIR 1940 P.C. 105; . , Ludhiana, AIR 1963 SC 1547; , AIR 1964 SC 322; , AIR 1965 SC 1942; , AIR 1966 SC 893; and sons, AIR 1966 SC 1738; , 3 SCR 214; , 3 SCR 736; , AIR 1969 SC 78; , AIR 1975 SC 2238= 1 SCC 496; , AIR 1977 SC 955= 2 SCC 472; , AIR 1979 SC 1250= 3 SCC 83; v. Grain Panchayat, Mehal Kalan, AIR 1986 SC 2197=4 SCC 364; , AIR 1988 SC 752= SCC 681 and v. GobindRam Bohra, 1 SCC 193, referred to. 1.4. The Delhi Municipal Act purports to regulate the common law right of the citizens to erector construct buildings of their choice. This right existed since time immemorial. But with the urbanisation and development of the concept of planned city, regulations, restrictions, on such common law right have been imposed. But as the provisions of the Act intend to regulate and restrict a common law right, and not any right or liability created under the Act itself, it cannot be said that the right and the remedy have been given unoflatu e.g. \"in the same breath\". (537-E) 1.5. In spite of the bar prescribed under sub-sections (4) and (5) of section 343 and section 347E of the Act over the power of the s, under certain special circumstances,the can examine, whether the dispute falls within the ambit of the Act. But once the is satisfied that either the provisions of the Act are not applicable to the building in question or the basic procedural requirements which are vital in nature, have not been followed, it shall have jurisdiction, to enquire and investigate while protecting the common law rights of the citizens. (537-C) 1.6. The regulations and bye-laws in respect of buildings, are meant to 525 serve the public interest. But at the same time it cannot be held that in all circumstances, the authorities entrusted with the demolition of unauthorised constructions, have exclusive power, to the absolute exclusion of the power of the . In some special cases where \"jurisdictional error\" on the part of the is established, a suit shall be maintainable. (538-C) 1.7. The should not ordinarily entertain a suit in connection with the proceedings initiated for demolition by the Commissioner, in terms of section 343 (1) (of the Act . The should direct the persons aggrieved to pursue the remedy before and then before the Administrator in accordance with the provisions of the said Act. (538-D) 1.8. The should entertain a suit questioning the validity of an order passed under section 343 of the Act, only if the is of prima facie opinion that the order is nullity in the eyes of law because of any \"jurisdictional error\" in exercise of the power by the Commissioner or that the order is outside the Act. (538-E) 2.1. A party is not entitled to an order of injunction as a matter of right or course. Grant of injunction is within the discretion of the and such discretion is to he exercised in favour of the plaintiff only if it is proved to the satisfaction of the that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. (538-H) 2.2.The purpose of temporary injunction is, to maintain the status quo. The grants such relief according to the legal principles- ex debite justitiae. Before any such order is passed the must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him. (539B) 2.3. 'The should be always willing to extend its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law (or without following the procedure which are fundamental and vital in nature. But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the . (539- 1)) 526 2.4. Power to grant injunction is an extra-ordinary power vested in the to he exercised taking into consideration the facts and circumstances of a particular case. The s have to be more cautious when the said power is being exercised without notice or hearing the party who is to he affected by the order so passed. (539-E) 2.5. In spite of the statutory requirement, in order 39, Rule 3 the s have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders. It is said that if the reasons for grant of injunction are mentioned, a grievance can be made by the other side that has prejudged the issues involved in the suit. This is a misconception about the nature and the scope of interim orders. Any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party,, at the stage of the final adjudication. Apart from that now in view of the proviso to Rule 3 of Order 39, there is no scope for any argument. When the statute itself requires reasons to he recorded, the cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant (539-H, 540-H) 2.6. Proviso to Rule 3 of Order39 of the Code, attracts the principle, that if a statute requires a thing to he done in a particular manner, it should be done in that manner or not all. v. , (1875)1 Ch. D. 426; , AIR 1936 PC 253 and , AIR 1975 SC 915, relied on. 2.7. Whenever a considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an exparty order is not passed. But any such exparty order should be in force up to a particular date before which the plaintiff should be required to serve the notice on the defendant concerned. (541-C) Supreme Practice 1993, Vol. 1, at page 514, referred to. 527 2.8.The should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the or any competent authority of the and the order should be passed only after hearing the parties. (541-F) 2.9.If the circumstances of a case so warrant and where the is of the opinion, that the object of granting the injunction would be defeated by delay, the should record reasons for its opinion as required by proviso to Rule 3 of Order 39 of the Code, before passing an order for injunction. The must direct that such order shall operate only for a period of two weeks, during which notice along with copy of the application, plaint and relevant documents should be served on the competent authority or the counsel for the . Affidavit of service of notice should be filed as provided by proviso to Rule 3 of Order 39 aforesaid. If the has entered appearance, any such ex parte order of injunction should be extended only after hearing the counsel for the . (541-H, 542- A) 2.10.While passing an exparte order of injunction the shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of. (512-C) JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2531-33 of 1993. ", "From the Judgment and Order dated 19.2.1991 of in C.W.P. No. 3499 of 1989. ", ", , Ms. and Ms. for the Appellants. ", ", and for the Respondents. ", "The Judgment of the Court was delivered by Special leave granted. ", "These appeals have been filed against an order passed by directing (hereinafter referred to as \"the \") to issue appropriate notices to the owners/occupiers/builders of the building where illegal constructions have been made. A liberty has been given to the owners/occupiers/builders to file fresh buildings plans with the in conformity with the existing bye- laws. The building plans as filed are to be examined in accordance with the law. The has been directed that if it finds that the constructions are beyond the compoundable limits, then to seal the same and to demolish thereafter. ", "The appellants have no grievance so far as the aforesaid part of the order is concerned. They have sought interference of this with the other part of the order, where it has been said that \"no civil suit will be entertained by any court in Delhi in respect of any action taken or proposed to be taken by the with regard to the sealing and/or demolition of any building or any part thereof. Any person aggrieved by an order of sealing or demolition which is passed shall, however, have the right of filing an appeal to under the Municipal Act. is the only forum which has the jurisdiction to grant interim relief.\" The other part of the order in respect of which objection has been taken is where the has directed the to approach those courts which have already issued injunction \"for variation and vacation of the injunction orders in the light of\" the said order. ", "Initially a writ application was filed in respect of some private dispute between two neighbours. In due course on the material produced by one party or the other it was treated as a Public Interest Litigation and by the impugned order has purported to find out a solution in respect of unauthorised constructions alleged to have been made by different owners/ occupiers/builders in the different parts of the city without sanctioned plans or by making deviations from the plans which had been sanctioned. The Court has also purported to ensure that such unauthorised constructions are not perpetuated on the basis of interim orders of injunction passed by Civil Courts. It cannot be disputed that by the impugned order the jurisdiction of any Court in Delhi to entertain any suit in connection with demolition of any part of any building which, according to the , is unauthorised and illegal has been ousted. ", "The Delhi Municipal Act, 1957 (hereinafter referred to as \"the Act \") has made provisions for the constitution of the and has prescribed the procedure for election of the councillors, levy of taxes, sanitation and public health. Chapter XVI contains provisions regarding erection of buildings within the area. Section 331 defines the expression \"to erect a building\". Section 332 says that\" no person shall erect or commence to erect any building or execute any of the works specified in section 334 except with the previous sanction of the Commissioner\". The relevant part of section 343 is as follows:- ", "\"343. Order of demolition and stoppage of buildings and works in certain cases and appeal .................................... (2)Any person aggrieved by an order of the Commissioner made under sub-section (1) may prefer an appeal against the order to within the period specified in the order for the demolition of the erection or work to which it relates. ", "(3)Where an appeal is preferred under sub-section(2)against an order of demolition, may, subject of the provisions of sub-section (3) of section 347 C, stay the enforcement of that order on such terms, if any, and for such period, as it may think fit: ", "Provided that where the erection of any building or execution of any work has not been completed at the time of the making of the order of demolition, no order staying the enforcement of the order of demolition shall be made by unless security, sufficient in the opinion of the said has been given by the appellant for not proceeding with such erection or work pending the disposal of the appeal. ", "(4)No Court shall entertain any suit, application or order proceeding for injunction or other relief against the Commissioner to restrain him from taking any action or making any order in pursuance of the provisions of this section. ", "(5)Subject to an order made by the Administrator on appeal under section 347 D, every order made by on appeal under this section, and subject to the orders of the Administrator and on appeal. the order of demolition nude by the Commissioner shall be final and conclusive\". ", "Section 344 vests power in the Commissioner to stop the construction of the building where the erection of such building or execution of any work has been commenced or is being carried on either without sanction or contrary to sanction so granted or in contravention of any condition subject to which sanction has been accorded. Under section 345A , the Commissioner at any time, before or after making an order of demolition under section 343 or of the stoppage of the erection of any building or execution of any work under section 343 , can make an order directing the sealing of such erection or work or of the premises in which such erection or work is being carried or has been completed. A further appeal has been. provided under section 347D to the Administrator against the order of . Section 347E says:- \"347E. Bar of jurisdiction of courts. ", "(1) After the commencement of section 7 of the Delhi Municipal Corporation (Amendment) Act, 1984, no court shall entertain any suit, application or other proceedings in respect of any order or notice appealable under section 343 or section 347B and no such order or notice shall be called in question otherwise then by preferring an appeal under these sections. ", "(2)Notwithstanding anything contained in sub-section (1), every suit, application or other proceeding pending in any court immediately before the commencement of section (7) of the Delhi Municipal Corporation (Amendment) Act, 1984, in respect of any order or notice appealable under section 343 or section 347B , shall continue to be dealt with and disposed of by that court as if the said section had not been brought into force.\" ", "Because of sub-sections (4) and (5) of section 343 and section 347E aforesaid the stand of the is that the Courts have been debarred from entertaining suits, applications or proceedings for injunction, against any order or notice for demolition and the order of demolition passed by the Commissioner, subject to appeals before and Administrator shall be deemed to be final and conclusive. ", "In spite of several pronouncements of this during the last four decades, the question as to whether the jurisdiction of the has been statutorily barred in respect of suits in connection with the orders passed or proceedings initiated for demolition of constructions, which have been made without sanction or by deviating from the sanctioned plans, has to be answered. ", "531 ", "Section 9 of the Code of Civil Procedure, (hereinafter referred to as \"the Code\") says that s shall have jurisdiction to try all suits of civil nature \"except suits of which their cognizance is either express Iyor impliedly barred\".According to the once the jurisdiction of the to try a suit in which the validity of any order passed under the provisions of the Act or the notice issued thereunder has been specifically barred and an internal remedy has been provided for redressal of the grievances of the persons concerned, there is no scope for to entertain a suit. ", "In the olden days the source of most of the rights and liabilities could be traced to the common law. Then statutory enactments were few. Even such enactments only created rights or liabilities but seldom provided forums for remedies. The result was that any person having a grievance that he had been wronged or his fight was being affected, could approach the ordinary on the principle of law that where there is a right there is a remedy-ubi jus ibi remedium. As no internal remedy had been provided in the different statutes creating rights or liabilities, the ordinary s had to examine the grievances in the light of different statutes. With the concept of the Welfare State, it was realised that enactments creating liabilities in respect of payment of taxes obligations after vesting of estates and conferring rights on a class of citizens, should be complete codes by themselves. With that object in view, forums were created under the Acts themselves where grievances could be entertained on behalf of the persons aggrieved. Provisions were also made for appeals and revision to higher authorities. Then a question arose as to where a particular Act had created a right or liability and had also provided a forum for enforcement of such right or for protection from enforcement of a liability without any authority in law, whether a citizen could approach a . It may be pointed out that many statutes have created certain rights or liabilities and have also provided the remedial measures in respect thereof. But such statutes have not touched the common law rights of the citizen. But there are some statutes, which in public interest affect even the common law rights or liabilities of toe citizen, which were in the nature of existing rights. The distinction between the two types of rights or liabilities is subtle in nature but at the same time very vital. ", "In one of the earliest case of v. ", ", (1859) 6 C.B. (N.S.) 336, , J, said:- \"There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law: there, unless the statute contains words which expressly or by necessary implication exclude the common-law remedy, and the party suing has his election to pursue either that or the statutory remedy. The second class of cases is, where the statute gives the right to sue merely, but provides no particular form of remedy: there, the party can only proceed by action at common law. But there is a third class, viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. The present case falls within this latter class, if any liability at all exists. The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class.\" The same view was reiterated by in v. , (1919) Appeal Cases 368. In v. , (1897) AC 615, it was said:- ", "\"I do not think the appellant can claim to recover by virtue of the statute, and at the same time insist upon doing so by means other than those prescribed by the statute which alone confers the right.\" ", "It was further pointed out \"The right and the remedy are given uno flatu, and the one cannot be dissociated from the other.\" ", "In the well-known case of ., AIR 1940 Privy Council 105, this question was considered in connection with Sea Customs Act (1878). It was said:- \"It is settled law that the exclusion of the jurisdiction of is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principle of judicial procedure.\" ", "533 ", "But having enunciated the general principle in respect of ouster of the jurisdiction of it was said:- \"But, in their Lordships' opinion, neither Sec, 32 nor the principle involved in the decision in 401 A 48, affect the validity of an Act of the Indian Legislature which creates an obligation and provides an exclusive Code for its determination such an obligation is not covered by sub s. (2) of Section 32 .\" ", "In connection with the imposition of Terminal Tax on salt under the Punjab Municipal Act. committee. Ludhiana, AIR 1963 SC 1547, it was said that where a statute created a liability and provided a remedy, party aggrieved should pursue the remedy provided under the Act. A Constitution Bench of this Court in , AIR 1964 SC 322, considered the provisions of Madras General Sales Tax Act and the exclusion of the jurisdiction of . It was pointed out that there was an express and unambiguous prohibition and no suit could be entertained by . In connection with the Bombay Sales Tax Act the same view was reiterated by a Constitution Bench of this Court in AIR 1965 SC 1942. chand, AIR 1966 SC 893, a Constitution Bench examined the bar on the jurisdiction of in connection with the and TenantsU.P. (Temporary) control of Rent and Eviction Act , and came to the conclusion that a special statute had excluded the jurisdiction in clear and unambiguous words and it had provided an adequate and satisfactory alternative remedy to a party. That may be aggrieved by the relevant order and as such the jurisdiction of had been ousted. This very question was examined in State of Kerala v. MI s and sons, AIR 1966 SC 1738, in connection with the Travancore-Cochin General Sales Tax Act and it was held that the jurisdiction of would be deemed to have been excluded because the legislature had set up a special tribunal to determine the question relating to rights or liabilities. which had been created by the statute. Again in connection with the provisions of the Evacuee Property Act , in , 3 SCR 214 and , 3 SCR 736, it was held that complete machinery for adjudication of all claims had been provided under the Act and there being a bar on the jurisdiction of any court, the Act over-rides other laws, including Section 9 of the Code of Civil Procedure and there was no scope for to entertain any suit. ", "The Constitution Bench in v. State of Madya Pradesh, AIR 1969 SC 78, said:- ", "\"Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. ", "Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not.\" ", "In connection with the Industrial Disputes Act , in . AIR 1975 SC 2238 = 1 SCC 496, it was pointed out that \" will have no jurisdiction to try and adjudicate upon an industrial dispute, if it concerned enforcement of certain right or liability created only under the Act. \" The jurisdiction of in connection with the levy of octroi duty under the C.P. and Barar Municipalities Act, 1922 was examined by this Court in , AIR 1977 SC 955 1 9771 2 SCC 472, and held it was barred. ", "Whether the Court can hear and determine suits relating to levy of professional tax under the Punjab Municipal Act, 1971 was examined in the case of . Chheharta, AIR 1979 SC 1250 = 3 SCC 83, and it was held:- ", "Where a Revenue Statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking it are excludes.\" It was pointed out in , AIR 1986 SC 2197 = 4 SCC 364, that when by a special statute rights have been created and jurisdiction of the has been barred then the jurisdiction of the to try such suits has been taken away. In the case of , AIR 1988 SC 752 = 1 SCC 68 1, it was said:- ", "\"... Wherever a right, not preexisting in common-law is created by a statute and that statute itself provided a machinery for the enforcement of the right, both the right and the remedy having been created uno flatu and a finality is intended to the result of the statutory proceedings, then, even in the absence of an exclusionary provision the civil courts'jurisdiction is impliedly barred.\" The jurisdiction of to entertain a suit for ejectment was examined in v. GobindRam Bohra, [1990] 1 SCC 193, and it was held that the Rent Control Act was a complete Code and the jurisdiction to try a case for ejectment was exclusive under that Act. With the increase in the number of taxing statutes, welfare legislations and enactments to protect a class of citizens, a trend can be noticed that most of such legislations confer decision making powers on various authorities and they seeks to limit or exclude 's power to review those decisions. The result is that the power of the under section 9 of the Code is being denuded and curtailed by such special enactments, in respect of liabilities created or rights conferred. This in the judgments referred to above has upheld the ouster of the jurisdiction of the on examination of two questions (1) Whether the right or liability in respect whereof grievance has been made, had been created under an enactment and it did not relate to a pre-existing common law right? (2) Whether the machinery provided for redressal of the grievance in respect of infringement of such right or imposition of a liability under such enactment, was adequate and complete? The ouster of the jurisdiction of the was upheld on the finding that the rights or liabilities in question had been created by the Act in question and remedy provided therein was adequate. ", "But the situation will be different where a statute purports to curb and curtail a pre-existing common law right and purports to oust the jurisdiction of the so far remedy against the orders passed under such statute are concerned. In such cases, the courts have to be more vigilant, while examining the question as to whether an adequate redressal machinery has been provided, before which the, person aggrieved may agitate his grievance. In the case of katikara Chintamani Dora v. , AIR 1974 SC 1069, this after referring to the case of , AIR 1964 SC 807, observed:- ", "536 ", "\"It was pertinently added that this exclusion of the jurisdiction of would be subject to two limitations. First, s have jurisdiction to examine into cases where the provisions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. The second is as regards the exact extent to which the powers of statutory tribunals are exclusive. The question as to whether any particular case falls under the first or the second of the above categories would depend on the purpose of the statute and its general scheme, taken in conjunction with the scope of the enquiry entrusted to the tribunal set up and other relevant factors.\" It was held that a suit for declaration that \"the decision of the Settlement Officer/Tribunal holding certain properties to be an 'estate' under section 3(2) (d) of the 1908 Act was void, was maintainable on the ground that the suit property was not an'inam village'. In v. , A.C. 260, the appellants sought a declaration of their common law right to quarry their land without the need to obtain planning permission under the Town and Country Planning Act, 1947. In that connection it was said:- ", "\"The appellant company are given no new right of quarrying by the Act of 1947. Their right is a common law right and the only question is how far it has been taken away. They do not uno flatu claim under the Act and seek a remedy elsewhere. On the contrary, they deny that they come within its purview and seek a declaration to that effect.\" ", "In spite of the bar placed on the power of the . orders passed under such statutes can be examined on \"jurisdictional question\". To illustrate-, a special machinery has been provided for removal of the encroachments from public land' under different enactments in different states and the jurisdiction of the has been barred in respect of the orders passed by such special tribunals or authorities constituted under such Acts. Still a suit will be maintainable before a on a plea that the land in question shall not be deemed to be public land within the meaning of the definition of public land given in the Act in question, and as such provisions thereof shall not be applicable. ", "In the case of v. , (1969) 2 AC 147, a wide interpretation has been given to the word 'jurisdiction' by . It was pointed out that in many cases where although the has jurisdiction to enter upon an enquiry, it has done or failed to do something in the course of such enquiry which is of such a nature that its decision becomes a nullity. By mere reference to different provisions of the Corporation Act it shall appear that the Act does not create any right or liability. Chapter XVI of the Act only purports to regulate the erection of the buildings within the Corporation area, so that erections of the buildings within the Corporation area are systematic, planned and do not adopt the character of mushroom growth. In view of the Provisions of the Act , whenever it is discovered that erection of any building or execution of any work has been commenced or is being carried or has been completed, either without sanction or contrary to the sanction or in contravention of any condition subject to which such sanction had been accorded, the Commissioner can make an order directing that such erection or work shall be demolished. Any person aggrieved by an order has been given a right to prefer an appeal before and thereafter to the Administrator. Subject to any order passed by the Appellate and the Administrator, the order for demolition shall be deemed to be final and conclusive. ", "According to us, it cannot be urged that the provisions of the Act have created any right or liability and for enforcement thereof remedy has been provided under the Act itself. The Act purports to regulate the common law right of the citizens to erect or construct buildings of their choice. This right existed since time immorial. But with the urbanisation and development of the concept of planned city, regulations, restrictions, on such common law right have been imposed. But as the provisions of the Act intend to regulate and restrict a common law right, and not any right liability created under the Act itself, it cannot be said that the right and the remedy have become given uno flatu e.g. \"in the same breath\". Most of the cases of this Court referred to above related to statutes creating rights or liabilities and providing remedies at the same time. As such the principles enunciated therein, shall not be fully applicable in the present case. In spite of the bar prescribed under sub-sections (4) and (5) of section 343 and section 347E of the Act over the power of the , under certain special circumstances, the Court can examine, whether the dispute falls within the ambit of the Act. But once the Court is satisfied that either the provisions of the Act are not applicable to the building in question or the basic procedural requirements which are vital in nature, have not been followed, it shall have jurisdiction, to enquire and investigate while protecting the common law rights of the citizens. Can a Court hold a suit to be not maintainable, although along with the plaint materials are produced to show that the building in question is not within the limits, or that the constructions were made prior to coming into force of the relevant provisions of the Act? We are conscious of the fact that persons who make unauthorised constructions by contravening and violating the building bye-laws or regulations often run to , with pleas mentioned above, specially that no notice was issued or served on them, before the has ordered the demolition of the construction. ", "It is well-known that in most of the cities building regulations and bye-laws have been framed, still it has been discovered that constructions have been made without any sanction or in contravention of the sanctioned plan, and such constructions have continued without any intervention. There cannot be two opinions that the regulations and bye- laws in respect of buildings, are meant to serve the public interest. But at the same time it cannot be held that in all circumstances, the authorities entrusted with the demolition of unauthorised constructions, have exclusive power, to the absolute exclusion of the power of the . In some special cases where \"jurisdictional error\" on the part of the is established, a suit shall be maintainable. According to us, (1)The should not ordinarily entertain a suit in connection with the proceedings initiated for demolition, by the Commissioner, in terms of section 343 (1) of the Act . The should direct the persons aggrieved to pursue the remedy before and then before the Administrator in accordance with the provisions of the said Act. ", "(2)The Court should entertain a suit questioning the validity of an order passed under section 343 of the Act. only if the Court is of Prima facie opinion that the order is nullity in the eyes of law because of any \"jurisdictional error\" in exercise of the power by the commissioner or that the order is outside the Act. ", "TEMPORARY INJUNCTION It need not be said that primary object of filing a suit challenging the validity of the order of demolition is to restrain such demolition with the intervention of the . In such a suit the plaintiff is more interested in getting an order of interim injunction. It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course., Grant of injunction is within the discretion of the and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status quo. The grants such relief according to the legal principles--ex debite justitiae. Before any such order is passed the must be satisfied that a strong primafacie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him. Under the changed circumstance with so many cases pending in s, once an interim order of injunction is passed, in many cases, such interim orders continue for months; if not for years. At final hearing while vacating such interim orders of injunction in many cases, it has been discovered that while protecting the plaintiffs from suffering the alleged injury, more serious injury has been caused to the defendants due to continuance of interim orders of injunction without final hearing. It is a matter of common knowledge that on many occasions even public interest also suffers in view of such interim orders of injunction, because persons in whose favour such orders are passed are interested in perpetuating the contraventions made by them by delaying the final disposal of such applications. The court should be always willing to extent its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law or without following the procedure which are fundamental and vital in nature. But at the same time the judicial proceedings cannot-be. used to protect or to perpetuate a wrong committed by a person who approaches the . ", "Power to grant injunction is an extraordinary power vested in the to be exercised taking into consideration the facts and circumstances of a particular case. The s have to be more cautious when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed. That is why Rule 3 of Order 39 of the Code requires that in ail cases the shall, before grant of an injunction, direct notice of the application to be given to the opposite party, except where it appears that object of granting injunction itself would be defeated by delay. By the Civil Procedure Code (Amendment) Act, 1976, a proviso has been added to the said rule saying that \"where it is proposed to grant an injunction without giving notice of the application to the opposite party, the shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay...... ", "It has come to our notice that in spite of the aforesaid statutory requirement, the have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders. It is said that if the reasons for grant of injunction are mentioned, a grievance can be made by the other side that has prejudged the issues involved in the suit. According to us, this is a misconception about the nature and the scope of interim orders. It need not be pointed out that any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party, at the stage of the final adjudication. Apart from that now in view of the proviso to Rule 3 aforesaid, there is no scope for any argument. When the statute itself requires reasons to be recorded, the cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant. The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code. Before the Proviso aforesaid was introduced, Rule 3 said \"the shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party\". The proviso was introduced to provide a condition, where proposes to grant an injunction without giving notice of the application to the opposite party, being of the opinion that the object of granting injunction itself shall be defeated by delay. The condition so introduced is that the \"shall record the reasons\" why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party who invokes the jurisdiction of the for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the about the gravity of the situation and has to consider briefly these factors in the ex parts order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the or the authority concerned to record reasons before exercising power vested in them. In respect of some of such provisions it has been held that they are required to be complied with but non-compliance there of will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances. Such ex parte orders have far reaching effect, as such a conditions has been imposed that must record reasons before passing such order. If it is held that the compliance of the proviso aforesaid is optional and not obligatory, then the introduction of the proviso by the shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purpose. Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not all. This principle was approved and accepted in well-known cases of v. . (1875) 1 Ch. D. 426, , AIR 1936 PC 253. This has also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of , AIR 1975 SC 915. As such whenever a considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side. It must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed. But any such ex parte order should be in force upto a particular date before which the plaintiff should be required to serve the notice on the defendant concerned. In the Supreme Practice 1993, Vol. 1, at page 514, reference has been made to the views of the English saying:- \"Exparte injunctions are for cases of real urgency where there has been a true impossibility of giving notice of motion.... ", "An ex parte injunction should generally be until a certain day, usually the next motion day. . . .\" ", "Accordingly we direct that the application for interim injunction should be considered and disposed of in the following manner:- ", "(i)The Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the or any competent authority of the and the order should be passed only after hearing the parties. ", "(ii)If the circumstances of a case so warrant and where the is of the opinion, that the object of granting the injunction would be defeated by delay, the should record reasons for its opinion as required by proviso to Rule 3 of order 39 of the Code, before passing an order for injunction. The must direct that such order shall operate only for a period of two weeks, during which notice along with copy of the application, plaint and relevant documents should be served on the competent authority or the counsel for the . Affidavit of service of notice should be filed as provided by proviso to Rule 3 of order 39 aforesaid If the has entered appearance, any such exparte order of injunction should be extended only after hearing the counsel for the . ", "(iii)While passing an ex parte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of. ", "In the result, the appeals are allowed to the extent indicated above. In the circumstances of these cases, there shall be no order as to costs. ", "VPR. Appeals allowed."], "relevant_candidates": ["0000051914", "0000255020", "0000321104", "0000361106", "0000368738", "0000491315", "0000628501", "0000703197", "0000743342", "0001041496", "0001053944", "0001161831", "0001252118", "0001358640", "0001411268", "0001458789", "0001536230", "0001986616", "0001996908"]} {"id": "0000868851", "text": ["JUDGMENT , J. ", "1. This was a second appeal from a decision of the District Judge of Shahabad dated the 7th March, 1923 modifying a judgment of the Subordinate Judge of the same place dated the 18th February, 1922. The facts in this case were somewhat complicated; but it is unnecessary to refer to them in any great detail as there has been argued before us but one point at the hearing of this appeal. It is sufficient to state that the plaintiffs (who are here the appellants) were the mortgagees of certain property from defendants Nos. I and 4. These mortgages were effected by five deeds. In addition to these five mortgages there were also three other mortgages of which the plaintiffs were not the direct mortgagees but assignees from those who were the original mortgagees. It is only with the five transactions in which the plaintiffs, were the direct mortgagees that we are in this appeal at all concerned. The plaintiffs brought their suit to enforce the mortgages and in addition to joining the mortgagors they also joined certain persons, who were defendants Nos. 8 to 13 who had bought from the mortgagors the equities of redemption of the properties hypothecated by virtue of the five mortgage-deeds referred to above. In the trial Court the plaintiffs succeeded in obtaining a personal decree not only against the mortgagors but also against the purchasers of the equities of redemption. But on appeal the learned District Judge came to the conclusion that the decree, so far as it related to relief against these purchasers of the equities of redemption, could not be in law upheld. He, therefore, set aside that portion of the judgment of the Subordinate Judge and it is from that part of the decision of the District Judge that this appeal has now been brought before us. ", "2. The simple point therefore, for consideration is whether the plaintiffs could obtain a money-decree against the purchasers of the equities of redemption. It must first be pointed out that in the instruments under which the purchasers of the equities of redemption so purchased, they (the purchasers), stipulated that they would pay off the debts due under the mortgages. It is common ground that they did not do so. It is also common ground that the plaintiffs had no notice of what had taken place between the mortgagors and the purchasers of the equities of redemption and were not privy to the contract. It if important to observe that some support was lent to the argument which was put forward before us by the learned Advocate who has appeared for the plaintiffs by the rulings in the case of 36 Ind. Cas. 792 : 22 C.W.N. 279 : 27 C.L.J. 483. In that case the facts were certainly very similar to those which obtain in this appeal now before us. The defendants had borrowed a sum of money from the plaintiff for which they had given a promissory note; they subsequently transferred their property to another party who executed an agreement in their favour expressly undertaking to pay to the lender of the money under the promissory note his dues thereunder. The lender of the money under the promissory note was no party to this contract and had no notice thereof; but, having ascertained the circumstances, he proceeded to sue the borrowers as well as the individual who had purchased the borrowers' property. He claimed that, in view of the agreement entered into between the borrowers and the purchasers of the borrowers' property, he (the lender) was entitled to take advantage of that agreement. and , JJ., of held that the plaintiff was entitled to enforce his claim against the purchaser of the borrowers' property. ", "3. Had the matter rested there, one might have thought that this case would constitute an authority in favour of the proposition argued in the present instance. There are also other cases which have been quoted by the learned Advocate for the appellant which, certainly at first sight appear to support to some extent the learned Advocate's argument. In the case of 7 Ind Cas. 237 : 32 A. 410 : 14 C.W.N. 865 : 7 A.L.J. 871 : (1910) : M.W.N. 313 : 8 M.L.T. 147 : 12 C.L.J. 205 : 12 Bom. L.R. 638 : 20 M.L.J. 914 : 37 I.A. 152 (P.C.) their Lordships of held that under certain circumstances (to which I shall refer presently) it was possible for a person who was no party to an agreement to take advantage of the provisions of such an agreement which were in fact beneficial to herself. Their Lordships' decision (which was given by the \"Right Hon'ble Mr. relates the facts at some length. Put very shortly, they were as follows. A minor Muhammadan lady, prior to and in consideration of her marriage with the son of the defend, ant in the suit, was promised by the defendant under an agreement executed between the defendant and the lady's father to be-paid by the defendant the sum of Rs. 500 per mensem from the date of her reception in marriage; the defendant also charged certain specified properties for the purpose of producing the requisite funds. The lady, as I have stated, was a minor; but, eventually, after the marriage, lived with her husband for sometime; owing, however, to disagreement she, at the end of some 12 of 13 years ceased so to do. The defendant then refused to continue to pay the allowance and the lady accordingly brought the suit against him basing her claim upon the document of agreement which had been entered into between the defendant and her (the plaintiff's) father. It was maintained on behalf of the defence on the line of reasoning adopted in the well-known English case Tweddle v. (1861) 1 B. & S. 393 : 30 L.J.Q.B. 265 : 8 Jur. (N.S.) 332 : 4 L.T. 468 : 9 W.R. 781 : 121 E.R. 762 : 124 R.R. 610, that as the plaintiff was in no way an actual party to the agreement, made between her father and the defendant, she had no locus standi and was unable to sue thereunder. Mr. , however, pointed out that the case of Tweddle v. (1861) 1 B. & S. 393 : 30 L.J.Q.B. 265 : 8 Jur. (N.S.) 332 : 4 L.T. 468 : 9 W.R. 781 : 121 E.R. 762 : 124 R.R. 610, was one decided under the Common Law of England and was not in their Lordships' opinion applicable to the facts which were disclosed in the case before their Lordships. Their Lordships were of opinion that although no party to the agreement (and it must be remembered that the lady was then a minor and the document was executed by her father) she was clearly in equity entitled to enforce her claim against the defendant. The case, however, appears to me to be distinguishable from the present case in view of the fact that the benefit which was to accrue to the plaintiff was one for which the consideration was the marriage to take place between herself and the defendant's son. Then there is another case which was cited on behalf of the plaintiffs: v. 20 Ind. Cas. 630 : 41 C. 137 : 17 C.W.N. 1143 : 18 C.L.J. 603. In that case , , and , J., held that where the transferee of a debtor's liability acknowledged in the provisions of the registered instrument which conveyed to him all the original debtor's properties, his obligation Lo the creditor for the debt to be paid by him and where the acknowledgment was communicated to the creditor and accepted by him, the creditor could sue the transferee on the registered instrument. Here again their Lordships based their decision upon the equitable principle which had operated upon the minds of their Lordships of in the case which I have just quoted. Here in this case of v. 20 Ind. Cas. 630 : 41 C. 137 : 17 C.W.N. 1143 : 18 C.L.J. 603 it may indeed be said that the facts disclosed that the creditor was actually privy to and concerned in the transaction which took place between the transferee and the debtor. In fact in the judgment of , it is expressly stated that there was an arrangement between the plaintiff and defendant No. 5 by which the liability of defendant No. 5 under the transfer was acknowledged and accepted and it may also be observed that (although under the mistaken idea of their true legal effect) certain title deeds were actually handed over at that time by the purchaser to the plaintiff. Although therefore, the last two cases quoted seem to be based upon considerations some what different from those which have to be regarded in the present appeal, there is no doubt, as I have said before, that the case reported as 36 Ind. Cas. 792 : 22 C.W.N. 279 : 27 C.L.J. 483 does constitute some authority to support the argument which has been addressed to us by the learned Advocate who has appeared for the appellants. There are, however, on the other hand two: cases which appear to be conclusive authority upon the point which has been argued, in this appeal. The first of these, is 13 Ind. Cas 304 : 34 A. 63 : 16 C.W.N. 97 : 11 M.L.T. 6 : 9 A.L.J. 37 : (1912) M.W.N. 32 : 15 C.L.J. 68 : 14 Bom. L.R. 1 : 21 M. L.J. 1151 : 391. A. 7 (P.C.). It is a decision of their Lordships of and although the facts are not set out, at any great length in the report they can be found fully reported as 2 Ind. Cas. 460 : 31 A. 352 : 6 A.L.J. 427. It will be seen, from a perusal of the facts as given in that report, that the circumstances, were almost, the same as those which obtain in, the present appeal. The judgment of their Lordships of delivered by Lord is very short and very much in point here. His Lordship observes: \"This is a perfectly plain case. The action is brought by a mortgagee to enforce against purchaser of the mortgaged property, an undertaking that he entered into with his vendor.\" ", "4. I may pause here to observe that the undertaking referred to was to the effect that the purchaser would pay off the debt due to the mortgagee by the person from whom the purchaser had-purchased the property. His Lordship continues: \"The mortgagee has no right to avail himself of that. He was no party to the sale. The purchaser entered into no contract with him, and the purchaser is not personally bound to pay his mortgage debt.\" ", "5. There is still a later case in which the same proposition has been similarly set forth in another decision of their Lordships of . In that case, v. 95 Ind. Cas. 970 : 3 P.L.T. 637 : SS C.W.N. 771 : A.I.R. 1923 P.C. 54 (P.C.) the facts again are in that report but very. shortly set out. We have had the advantage, however, of seeing what, the facts were from the record of this , the case having been tried on appeal on the 7th June 1918 before and , JJ. The facts were substantially identical with those which exists in the present appeal; A mortgagor having executed a mortgage in favour of the plaintiff sold the property to a third party who, in the recitals of this sale-deed agreed to pay off the mortgage with a provision of the purchase-money which, was; for that purpose left in his hands. The mortgagee sued upon his mortgage, not only the mortgagor but also the purchaser; but this refused to grant any personal decree against the purchaser, holding that he (the mortgagee) could not avail himself of the stipulation made in the contract between the purchaser and the mortgagor. Their Lordships of uphold the decision of this , Lord in a very short judgment stating. \"Their Lordships have considered this case, and they think it is clear that no personal liability was incurred by the purchasers of the equity of redemption. Their Lordships, therefore, think that the decree of the High was right and that the point made by the appellant fails.\" It may be observed that in the judgment given by this our the 7th June 1918, the cases to which I have-referred above were mentioned and quoted. ", "6. It seems, therefore, that we are clearly bound by the authority of these two decisions of which are so directly in point. ", "7. The appeal, therefore, must be dismissed with costs. I should mention that there was a cross-objection which, however, is not pressed and has not been argued and that cross-objection also must be dismissed with costs. ", "8. It is said by the learned Advocate who has appeared for the appellants (and it may be mentioned that the question is referred to in ground No. 7 of the appellants' grounds of appeal to this Court) that there has been some arithmetical or other mistake with regard to the amount of costs which have been awarded to the defendants Nos. 8 to 13. It was suggested that, as this question had been made a ground of appeal it might be dealt with in this Court. We have, however, no materials whatever before us which would enable us to discuss or consider this point. If there has been any mistake in regard to the quantum of costs, that matter should be referred to and dealt with by the lower . ", ", ", "9. I agree. The difference between the case quoted in v. 20 Ind. Cas. 630 : 41 C. 137 : 17 C.W.N. 1143 : 18 C.L.J. 603 and the last cases quoted by my learned brother from 34 Ali. 63 and 3 Pat. L.T. 637 appears to me to be very important in connection with the facts of the present case. It is to be borne in mind that in the present case there was no notice to the plaintiff at the time of the contract. In the judgment of , we see that the promisee that is to say, the plaintiff, had a proposal made to him by the promisor, that is to say, defendant No. 5, and he accepted it. So in that case the promisee was in the position indicated in Section 2 of the Indian Contract Act. He held the benefit of a contract for consideration. In the present case the plaintiff, who claims to be the promisee, has never had a proposal made to him by the defendants against whom he is seeking a money-decree and he certainly never accepted any such proposal. Therefore, Section 2 does not bring him into the position of a person who can sue a promisor upon a contract or for consideration. That is the distinction between the two classes of cases, and I think the present case falls within the class indicated in the cases which have been quoted. There may be a third class of cases in the judgments which, we have been studying, namely, the class in which minors or other third parties sue under family or marriage settlements. In such cases as those, the plaintiff can hardly be regarded as a promisee who has accepted any proposal or promise, and such casesare probably decided on the traditional principles governing rather than by any application of the terms of Section 2 of the Indian Contract, Act. If I am correct, this third class would, I think, be exemplified by the case of v. 7 Ind Cas. 237 : 32 A. 410 : 14 C.W.N. 865 : 7 A.L.J. 871 : (1910) : M.W.N. 313 : 8 M.L.T. 147 : 12 C.L.J. 205 : 12 Bom. L.R. 638 : 20 M.L.J. 914 : 37 I.A. 152 (P.C.)."], "relevant_candidates": ["0001020411", "0001129356", "0001916066"]} {"id": "0000870563", "text": ["ORDER , Member (J) ", "1. This appeal is directed against the order-in-original dt. 28.1.1994 passed by the Collector of , Bombay, in order No. CAC/No. 25/94 CAC. By this order, the Learned Collector held that the 'Haemodialysers' (hereinafter referred to as goods) imported under Bill of Entry No. 6078 dt. 9.10.1988 are not entitled to the benefit of Notification No. 208/81-Cus. dt. 22.9.1981. He held the goods to be prohibited goods within the meaning of Section 2(33) and their export out of India, as not permissible. Since the goods had been exported out of India and not used for home consumption, they had become liable for confiscation under Section 111(o) of the Act, 1962. He held that by their actions, the goods are liable for confiscation and also they are liable for penalty under Section 112(a) of the Act, 1962. The Learned Collector passed the final orders in these terms. ", "(a) Benefit of exemption Notification No. 208/81-Cus. dt. 22.9.1981 shall be denied. The goods shall be assesseed on merits and the duty of customs amounting to Rs. 2,94,42,867/- shall be recovered from them under Section 28(1) of the Customs Act, 1962. ", "(b) The Haemodialysers are liable for confiscation under Section 111(o) of the Customs Act, 1962. But the goods have already been exported and are not available for confiscation. ", "(c) Imposed a penalty of Rs. 1,00,00,000/- (Rupees one Crore only) under Section 112(a) of the Customs Act, 1962. ", "2. Before the commencement of the proceedings in the present impugned order which was initiated by issue of the order dt. 6.4.1993, the department had proceeded against the importer in respect of the same import against the same Bill of Entry by issue of show cause notice dt. 25.3.1989 issued under Section 124 of the Customs Act, 1962 by the Deputy Collector of Customs, . The allegations in that show cause notice were that the appellants had presented for export 53 sets of Haemodialysis Machines with spare parts and accessories to USSR vide S/Bills No. F-7832 to 7839 and F-7843 to 7845 all dt. 2.12.1988 and along with the S/Bills produced documents like Contract, GR Forms, Invoices etc. Total FOB value of the goods being Rs. 3,31,21,600/-. The goods were examined and on such examination it was found that the goods were packed in wooden crates and inside the crates the machines were in polythene packing bearing import marks and nos., make and manufacture, so much so that the spare parts are also in their original packing without further processing/ manufacturing and presented for export in the same condition in which these were imported except that few wooden stands were found in containers for keeping these machines on them. These sets were found to be of West German origin. On the basis of the examination, the concerned Appraising Officer had definite doubts regarding the validity of the export to USSR. Accordingly, he called for the original import documents. The party presented the import documents and submitted a letter dt. 25.12.1988 giving the details of the consignment. From the details of the consignment, the department gathered that the appellants had cleared a consignment declared as 56 units of 'Haemafiltration Instrument/Haemodialysers (Life Saving equipments) and Accessories and Spares for above and Acetate Concentrate and Others' of West German make contained in 6 containers vide Home Consumption B/E. No. 6078/19.10.1988 imported \"MV Kathrin SIF (Marine Trans) at Bombay Port. The value of the goods declared in B/E is as follows: ", "(1) Hemafiltration Instrument/ Rs. 1,17,97,075/- Hemodialysers (2) Accessories and Spares Rs. 1,09,49,048/- (3) Acetate Concentrate & Rs. 40,746/- Others ", "3. The clearance was effected under OGL 15/88, Appendix 6, Item No. 36, List 2 which provides for importation under OGL by any person for 'Stock and Sale'. Further, the consignments of Hemafiltration Instrument/Haemodialysers were cleared free of duty in terms of Notification No. 208/81. Spares for the above consignments were also cleared free of duty under Notification No. 208/81. The Acetate Concentrate and others were cleared on payment of duty at 30% Basic duty + 45% Auxiliary duty and C.V.D. 15%. After this consignment was cleared for home consumption, the party stated vide their letter dt. 25.12.1988 that they took these goods to their unit at Ankleshwar for moisture proof packing, palletisation, fabrication of necessary/stand etc. Thereafter, the goods were brought to Kandla Port stuffed in 19 containers to be exported to USSR per vide 13 S/bills at dt. 2.12.1988. Therefore, the department alleged that the party had attempted to re-export the consignments without any processing/manufacturing or assembling. Though they cleared the goods for home consumption under Home Consumption B/E after availing themselves of duty exemption benefits and the provisions of 'Stock and Sale' under OGL without declaring at the time of clearance that the imported goods are meant for re-export, they presented the same for re-export. Such type of re-export is not covered under the provisions of Saving Clause 15(g) of the Export Control Order, 1988. Except for the imported ship stores, no re-export of imported goods are covered under the provisions of Saving Clause 11(d) of the Import Trade Control Order, 1955 meaning thereby that such re-export would require the specific approval of . The party, however, insisted for re-export of the goods and the Trade Commissioner of USSR also sent one telex stating that these goods were required for the Armenia earthquake victims and accordingly the re-export should be allowed. Keeping in view the urgency of the situation and on account of humanitarian grounds, the re-export of the consignment was allowed on execution of a Bond covering the value of the goods and cash deposit of Rs. 6,00,000/- and Bank Guarantee of Rs. 10,00,000/- safeguarding the interests. ", "4 Thereafter, a reference was made to the Ahmedabad and to New Delhi, to ascertain the legality of the re-export. A reply received from , New Delhi confirmed the stand taken by that any re-export of goods imported under OGL/AU Licence/REP Licence/Addl. Licence are entirely meant for use within India and therefore, cannot be allowed for re-export. If any import is made for 'Stock and Sale', it means that it is for home consumption and not for export purposes. Noting all these details the department in the show cause notice alleged that the importer had contravened the provisions of Saving Clause 15(g) of the Export Trade Control Order, 1988 and Saving Clause 11(d) of the Import Trade Control Order, 1955 and the conditions of OGL 15/88 of AM 1988-91 read with Import & Export Control Act, 1947 and Section 11 of the Customs Act, 1962 and accordingly these goods are liable to confiscation under Section 113(d) of the Customs Act, 1962. Since the goods were cleared for home consumption under NIL rate of duty under Custom Notification No. 208/81 but later on re-exported, the customs duty was payable on these goods at the appropriate rate. By suppressing the fact of re-export of the imported goods, the party was wrongly availed themselves of the benefit of Notification No. 208/81. with mala fide intention for the sake of getting windfall benefit. Therefore, the importers were called upon to show cause as to why the short charged customs duty of Rs. 2,94,42,867/- (Basic at 60% + Aux. duty at 40% + CVD at 15%) should not be recovered from them on these 53 sets of Haemodialysis Machines with spare which were cleared by them at nil rate of duty by wrongfully claiming the benefit of Notification No. 208/81. ", "5. The appellants filed a detailed reply. After hearing the appellants the Collector of , Kandla by his order dt. 22.10.1990 in order-in-original No. KCH/COLLR/10/90 held that the goods under export were liable to confiscation under Section 113(d) of the Act. Since the goods had already been exported they were not available for confiscation. By rendering the goods liable to confiscation, the importer had rendered themselves liable to a penalty under Section 114 of the Act. Therefore, considering the fact that the goods had already been exported, he proceeded to taken action in terms of the bond, Bank Guarantee and cash deposit furnished by the exporter. He imposed a penalty of Rs. 50 lakhs. In the said impugned order, as regards the duty, the Collector agreed with the importer that the Notification No. 208/81 exempted the goods unconditionally from the import duty. Therefore, he held that the goods were not liable to import duty. Therefore, he dropped the demand for duty. He also held that the importer imported the goods in question at the CIF value of Rs. 2.28 crores and exported them at FOB value of Rs. 3.31 crores. While the import price was paid in hard currency, the export realisation was in Indian Rupees. Thus they had made a profit of more than Rs. one crores in this transaction although it caused considerable loss of hard currency to the country. He also held that the transaction was more motivated by the huge profit rather than the desire to held the Armenian earthquake victims which was the ostensible reason given by the exporters. On the other aspect of the allegation pertaining to the ITC value, the Collector upheld the department's allegation and therefore, proceeded to impose the penalty of Rs. 50 lakhs. ", "6. The appellants agitated the matter before the . Before the , the matter was heard in great length and thereafter the rejected the importer's plea and upheld the imposition of penalty of Rs. 50 lakhs and the said judgment has since been . While the importer had appealed before the , the did not file any appeal with regard to dropping of demands for duty. After the matter was decided by the in favour of the , the appellants took the matter to Hon'ble of India. The Bench of three judges heard the matter in great length and a landmark judgment was ordered in the facts and circumstances of the case as . The after upholding the charges of the with regard to the violation of ITC value inasmuch as that the goods imported had not been utilised for home consumption but had diverted to Russia and hence upheld the imposition of fin of Rs. 50 lakhs. While determining the case, the Hon'ble in para 25 incidentally also noted that the Hon'ble was not concerned with the questions of whether the attempt of the assessee to export the goods (which has, in the event, been successful) would amount to an infringement of the conditions permitting the import so as to render either the import itself vide Section 111(o) of the Act, or the exemption from the import duty or both illegal and invalid and, if so, the consequences thereof. This was said, when the Counsel for the emphasised on the circumstances that the importer had obtained the import of the goods free of duty relying on the Notification granting exemption from customs duty. The Hon'ble also stated that it is obvious that it could not have been the intention of the legislature to grant exemption from customs duty in respect of vital goods of the nature in question in order that an importer may make profit by selling them abroad. The Hon'ble has gone into great details on other aspects of the matter and upheld the order of the . This judgment of the was rendered on 14.5.1992. When this was the position on facts, the suddenly woke up and realised that they ought to have proceeded for recovery of duty and hence issued a belated show cause notice almost after one year of the 's judgment on 6.4.1993, which is subject matter of the present proceedings. In the show cause notice dt. 6.4.1993 issued again under Section 124 of the Act, 1962, the Collector of , Bombay has narrated the facts but unfortunately without bringing in the facts of the previous proceedings, which culminated in the judgments of the . After recording the statement of the party in the matter, which had all been recorded at the initial stage, the show cause notice demanded from the importers the duty of Rs. 2,94,42,867/- in terms of proviso to Section 28(1) of the Act, 1962 and also demanded as to why the goods concerned should not be held liable to confiscation under Section 111(o) of the Act, 1962 and why a penalty should not be imposed under Section 112(a) of the Act, 1962. The Managing Directors and the Executives of the importers were also called upon to show cause as to why penal action should not be initiated against them. ", "7. The appellants by their reply dt. Nov. 19, 1993 replied to the show cause notice and spelt out in their reply various extracts of the judgments in support of their various contentions and ultimately stated that the show cause notice is based on serious misconception of law and prayed for withdrawal and dropping of the proceedings initiated against them. ", "8. The Learned Collector adjudicated the issue and passed the impugned order. The Learned Collector after dealing with the matter on the liability to pay the duty under Notification somehow has dealt with time bar aspect, without keeping in view the previous proceedings and dropping of duty demand by the Collector, . He has only dealt with the matter that the Collector of demanding duty again is not barred by res judicata. The Learned Collector has proceeded very strongly against the importers. He has held that the demands are not time barred in view of the fact that the statements recorded by the Officials make it clear that the exports were made by clearing the imported goods to USSR and had at no stage, the importers had produced any evidence of selling these goods to hospital etc. in India. Therefore, he has held that wilful suppression of facts and misstatement invoking proviso to Section 28(1) of the Act, 1962 to the extent of 5 years is legal, valid and justified. ", "9. We have heard the Learned Advocate, for the appellants and the Learned DR, for the Revenue. ", "10. We have considered the various pleas raised by the Learned Advocate in this matter both on merits as well as on time bar. The said contentions would be dealt in the finding portion of our order, so as to avoid the repetition. ", "11. The first important aspect of the matter is as to whether the can initiate the proceedings by issue of fresh show cause notice dt. 6.4.1993, months after the earlier proceedings having culminated by the judgment of rendered on 14.5.1992? As can be seen from the judgment of the Hon'ble , the had raised the arguments before that the importer had obtained import of the goods free of duty by relying on the Notification granting exemption from the customs duty. It was also pleaded that it could not have been the intention of the legislature to grant ex -emption from customs duty in respect of vital goods of the nature in question in order that an importer may make profit by selling them abroad. The Hon'ble after noting such arguments of the proceeded to say that the intention is therefore, relevant for the issue before the court to the limited extent that it lends support to the construction of List 2 of Appendix 6 in the manner the court interpreted it. Further the Hon'ble proceeded to say that they were not concerned with the question whether the attempt of the assessee to export the goods (which is, in the event, been successful) would amount to infringement of the conditions permitting the import so as to render either import itself vide Section 111(o) of the Act, or the exemption from import duty or both illegal and invalid and, if so, the consequences thereof. Therefore, it is seen that the did not make any attempt to initiate proceedings forthwith. Even if the had to initiate within 6 months of the date of the judgment, even then the matter would have been clearly time barred. It can be very clearly noticed that in the previous proceedings, the Collector dropped the demands for duty both on the ground that he did not have jurisdiction and also that the duty is not demandable as the goods were exempted under the Notification. The accepted the Collector's order to this extent and did not file any appeal before the Tribunal and therefore, the 's contention before were negatived. In the facts and circumstances, is the Collector of , Bombay justified in initiating the fresh proceedings by issue of show cause notice dt. 6.4.1993 by invoking proviso to Section 28(1) of the Act? The proviso to Section 28(1) provides for initiating proceedings for recovery of duty nor levied or having been short levied or had been erroneously refunded by reason of collusion or any misstatement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, and that the proper officer namely, the Collector of can initiate the proceedings within 5 years, from the relevant date. The relevant has also been defined in Sub-section 3 of Section 28 means: ", "(a) in a case where duty is not levied, the date on which the proper officer makes an order for the clearance of the goods; ", "(b) in a case where duty is provisionally assessed under Section 18 , the date of adjustment of duty after the final assessment thereof; ", "(c) in a case where duty has been erroneously refunded, the date of refund; ", "(d) in any other case, the date of payment of duty. ", "12. In the present case, the show cause notice dt. 25.3.1989 clearly demanded duty and also indicated as to why the goods should not be confiscated under Section 111(o) of the Customs Act, and penalty should not be imposed under Section 112 of the Act. The show cause notice clearly indicated the violation under Notification No. 208/81. As the demands had been dropped by the Collector and the matter had culminated by the judgment of vide order dt. 14.5.1992, therefore, commencing fresh proceedigns by issue of show cause notice dt. 6.4.1993 does not arise and such proceedings are totally unsustainable in the eye of the law. As observed by us the remedy available for the was to file an appeal against the earlier Collector's order or a Cross Appeal in the importer's appeal before the . The instead had initiated fresh proceedings through the Jurisdictional Collector. Such proceedings are clearly barred by time as the had all the information to initiate proceedings for recovery of duty. However, this question was not dealt by the Learned Collector in his order but merely held that doctrine of res judicata would not apply. The Collector had given a findings that duty cannot be recovered as the goods were exempted under Notification. Therefore, the contention of the Learned DR that earlier proceedings had no relevance does not stand to reason. The Collector's finding that there is no res judicata is totally erroneous and unsustainable. The in the show cause notice invoked larger period and narrated the facts and circumstances of the case for justifying such invokation but being oblivious of the fact that the department had initiated the proceedings for the recovery of duty and had dropped the same. Therefore, from the facts and circumstances of the case, it appears that on a different opinion being taken by Collector, Bombay in the matter, other than that expressed by the , and in the matter. Therefore, the basis of the proceedings is unsustainable and requires to be quashed. ", "13. In view of the findings given on the time bar and the unsustainability of the proceedings, the question of entering into the merits would not arise in the present case. However, the counsel had also argued on this aspect and had relied on several rulings and had also pointed out that had been granting benefit of the , similar circumstances, when goods were exported, without any manufacturing process carried out and the goods having been utilised for home consumption. We notice that on this aspect of the matter, has very clearly held in para 22 that although there is no express prohibition, the re-export as such of items of goods specified in List 2 and imported into India is prohibited by necessary implication by the language of, and the scheme underlying, the grant of OGL in regard to them. The court has further held that it is difficult to agree that the import-export policy envisages the re-export of goods belonging to this category. The opinion of the is also to the same effect. After analysis the various aspects held that the goods in question were prohibited goods within the meaning of Section 2(33) and that their confiscation under Section 113(d) and the penalty under Section 114 were fully justified. has held that it is obvious that it could not have been the intention of the legislature to grant exemption from customs duty in respect of vital goods of the nature in question in order that an importer may make profit by selling them abroad. ", "14. The Learned DR submitted that there is mis-declaration and that the appellants were required to have declared in the Bill of Entry, the purpose for which the imported goods are required, that they would be used in India only or would be sold in India or would be exported outside India without any process of manufacture being carried out. On this point in para 16 of the judgment has clearly held that the form of the Bill of Entry prescribed under the Act does not require any declaration from the importer as to the purpose for which the imported goods are required or that they will be used or sold only in India. The expression \"home consumption\" has also, in the context, no clear or definite meaning and raised a lot of conundrums if literally interpreted to mean that imported goods should always be consumed in India. The court raised question that is it home consumption if the importer does not use the goods himself but sells them? At what point of time should the importer make up his mind whether he proposes to sell the imported goods in India or wishes to export them outside. The Court again raised the question that is the condition infringed if a purchaser of goods from the importer sells it to buyer in a foreign country? Will it be permissible for the importer to use the imported goods in the manufacture of other goods which he proposes to export? answered that all these uncertainties in the connotation of the expression 'home consumption' preclude one from giving an interpretation to this expression that the imported goods cannot be at all exported and incline one to hold that, in the context, it is only used in contrast to the expression for warehousing'. in para 17 precisely answered that the charges raised in the present show cause notice about the importer making capital of the export and did not accept the 's interpretation and also held that it is possible to think of cases where, though economically unremunerative, the re-exports can be justified on considerations of international amity and goodwill such as for example, where the goods are exported to a country which is in dire need of help and assistance. also held that the principle is also non-acceptable on the ground of vagueness as to the extent of its application to exports made after an interval or after changing several hands inside the country by way of sale. Therefore, did not accept the 's contention on this aspect. The findings given in para 17 is relevant for our purposes and the same is noted herein. ", "17. The above general consideration apart, there are other indications in the statute which show that the Act does not prohibit the export of imported goods. The Act provides that goods which are cleared from the customs area for warehousing can be cleared from the warehouse for home consumption (S. 68) or exportation (S. 69). At first blush, this may seem to support the 's interpretation that clearance for exportation and clearance for home consumption are two different things. It is indeed suggested by counsel that, if an importer intends to export the imported goods, he should clear them for warehousing and then proceed in terms of Section 69 . But a little thought would show this interpretation cannot be correct. In the first place, where an importer, even at the time of the import purchase has decided to sell the goods in another country (as in the present case), he may, as pointed out earlier, easily ask the goods to be transitted or transhipped to the country of sale and thus avoid any necessity for their being at all cleared in India. But where, for one reason or other, he wants to import the goods into India and then sell them to the foreign country or where the importer decides on an export sale only after he has arranged for the import of the goods into India, the Act prescribes no form of a Bill of Entry under which he can clear such goods intended for re-export. It would not be correct to insist that he must clear them for warehousing and then export them by clearing from the warehouse. Whether to deposit the goods in warehouse or not is an option given to the importer. If he is able to pay the import duties and has his own place to stock the goods, he is entitled to take them away. But, where he has either some difficulty in payment of the duties or where he has no ready place to stock the goods before use or sale, he cannot clear the goods from the customs area. The warehouse is only a place which the importer, on payment of prescribed charges, is permitted to utilise for keeping the goods where he is not able to take the goods straightaway outside the customs area. There is nothing in the provisions of the Act to compel an importer even before or when importing the goods, to make up his mind whether he is going to use or sell them in India or whether he proposes to re-export them. Again, there may be cases where he has imported the goods for use or sale in India but subsequently receives an attractive offer which necessitates an export. It would make export trade difficult to say that he cannot accept the export offer as the goods, when imported, had been cleared for home consumption. Section 69 , therefore, should be only read as a provision setting out the procedure for export of warehoused goods and not as a provision which makes warehousing an imperative pre-condition for exporting the imported goods. The second reason for not reading Sections 68 and 69 as supporting the 's interpretation is even more weighty. That interpretation would mean that imported goods can be re-exported after being warehoused for sometime (even a day or a few hours) but that they cannot be exported otherwise. Such an interpretation has no basis in logic or sense and makes mincemeat of the broader principle contended for by the that imports are intended for use in the country and not for export. Incidentally, we may observe that even this principle contended for by may itself be of doubtful validity as it is based on an erroneous assumption that a re-export of imported goods will always be detrimental to the country. It is true that, in the present case, the appellant has been criticised for having utilised valuable hard currency for the purchases and reselling the goods only for rupee consideration. But, conceivably, there may be cases where an importer is able to import goods from soft-currency area and sell them in a hard-currency area earning foreign exchange for the country. It is also possible to think of cases where, though economically unremunerative, the re-exports can be justified on considerations of international amity and goodwill such as for example, where the goods are exported to a country which is in a dire need of help and assistance. The principle is also non-acceptable on the ground of vagueness as to the extent of its application to exports made after an interval or after changing several hands inside the country by way of sale. We are, therefore, unable to read Sections 68 and 69 as supporting the 's contention. ", "15. The question raised by the in the present case, are also answered by as can be clearly noted. It follows that the charges raised with regard to misdeclaration on the basis of not furnishing the details in the B/E is not sustainable. Therefore, the proceedings is totally unsustainable. The Collector of , Bombay ought to have gone through these proceedings carefully before embarking on a fresh proceedings, which does not meet the eye of the law. ", "16. In the case of as , the case made out against the importer was that they had not carried out necessary manufacturing processes before re-exporting the goods and in that context it was alleged that they were not entitled to the benefit of Notification No. 339/85-Cus. dt. 21.11.1985 and that they were also liable for recovery of duty and penalty under Sections 28 , 74 , 111(d) and 112 of the Customs Act, 1962. The upheld all the allegations. However, on the plea that since the goods were exported, the importer were entitled to duty draw-back under Section 74 of the Customs Act, 1962 was upheld by the . Therefore, it follows that where in similar circumstances when all the allegations against the importer have been held to be proved yet the upheld the importers' contention that when the goods were exported they were entitled to the benefit of drawback. In that view of the matter, it is difficult to even accept the Collector's plea that the duty amount in the present case would be recoverable. Therefore, the contention raised by the Learned DR on this aspect and the findings given by the Collector is required to be set aside and which we do so. The appeal is therefore, allowed. ", "Separate Order Sd/- () (S.L. Peeran) Member (T) Member (J) , Member (T) 17. With respect to Ld. Member (), I am writing my separate order as under: 17.1. Proviso to Section 28 of the Act provides that where any duty has not been levied or has not been short levied or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter, the provisions of Sub-section (1) will have the effect as if for the words 'Proper Officer' the words \"Collector of \" and for the words 'One Year' and \"Six Months\" the words 'Five Years\" were substituted. 17.2. Proper officer is defined under Section 2(34) as \"Proper Officer in relation to any functions to be performed under this Act, means the officer of who is assigned those functions by the Board or Collector of \". ", "18.1. Government have defined the jurisdiction of various Officers in the different regions in the country. It is only a few officers like Director General of Revenue Intelligence, Director General of Anti-evasion, etc., who have All India Jurisdiction. Collector of , Kandla, has jurisdiction only in regard to Port at Kandla and such other areas as are specified in the Notification issued by the Government. Likewise, Collector of , Bombay, has jurisdiction in regard to matters pertaining to specified Bombay region. The jurisdictions are sharply demarcated. ", "18.2. The question whether Collector of , Cochin, had jurisdiction in regard to import made at Madras, came up for consideration before in case of 1988 (14) ECR 169. held: ", " has issued notifications under Section 4 of the Act appointing Collectors of and lower officers for different jurisdictions. In terms of these notifications, the respective jurisdictions of the Collectors have been clearly spelt out (see, for example, Notification No. 36-Cus. dated 1.2.1963, as amended). Notification No. 37 dated 1.2.1963, as amended, appoints the Collector of and , Cochin, as the Collector of in his jurisdiction. Evidently, it does not extend to Madras Port for which the Collector is the Collector of , Madras, vide Notification No. 36 dated 1.2.1963. There are, of course, a few officers appointed as Collectors with all-India jurisdiction such as the Director of Revenue Intelligence but the Collector of , Cochin is not one among them. In these circumstances, we hold that the Collector of , Cochin had no jurisdiction to demand duty in the present case and, consequently, we set aside the demand. ", "It is therefore clear that Proper Officer for the purpose of import in this case was the Collector of , Bombay, and he alone was competent to issue a show cause notice demanding duty. ", "18.3. For instance, under Notification 251/93-Cus. dated 27.8.1993 as amended in exercise of powers conferred by Sub-section (1) of Section 4 of Act, 1962, have appointed officers mentioned in Column 2 of the Table appended to the Notification to be Collectors of . For the areas of , Bombay Airport, it is the Collector of , Bombay, and, for the Port and Airport of Kandla and the area under the jurisdiction of Gandhi Dam Municipality, it is Collector of , Kandla. As against this, under Notification 252/93 dated 2.7.1993 as amended, have appointed Director General of Revenue Intelligence, New Delhi, and Director General of Inspections, and Excise, New Delhi, to be Collectors of the within their respective jurisdictions. The Notification also provides that jurisdiction of these officers shall extend to the whole of India. ", "18.4. It will be clear therefore that jurisdiction of proper officer is clearly well-defined, and therefore, for the purpose of import through Bombay only Collector of , Bombay, was the proper officer to initiate proceedings under Section 28 of Act. It may not therefore be possible to hold that proceedings had already been initiated and therefore fresh proceedings could not be initiated. ", "18.5. It can therefore be seen that it was not fresh proceeding initiated by the proper officer after he had initially initiated the proceedings and dropped the demand of duty. In fact, Collector of , , while dropping the demand himself admitted that he had no jurisdiction in relation to the matter pertaining to duty. Goods were imported at Bombay and cleared duty free under exemption notification and therefore demand of duty could be issued only by the proper officer, i.e., Collector of , Bombay. In this view of the matter, therefore, we cannot say that it was a fresh proceeding initiated by the proper officer after having already dealth with the matter. It is not the case of the appellants that as soon as they were penalised at or they were issued a Show Cause Notice by , they made disclosure of these facts to the proper officer in relation to the imports, i.e., Collector of , Bombay. Collector of , Bombay, therefore, was competent to initiate proceedings against the appellants as soon as he came to know that a short-levy had indeed taken place since goods had been exported and this fact had not been disclosed to the proper officer. ", "19.1. in the case of appellants themselves in the case of held that the equipment permitted to be imported is only for the purpose of use in the country. held that the circumstances that these items are also exempt from customs duty at the time of import also lends support to the conclusion that the goods so permitted are not meant for re-export. , therefore, held: ", "We, are, therefore, of the opinion that, although there is no express prohibition, the re-export as such of items of goods specified in List-2 and imported -into India is prohibited by necessary implication by the language of, and the scheme underlying, the grant of OGL in regard to them. It is difficult to agree that the Import-Export Policy envisages the re-export of the goods belonging to this category. The opinion of is also to the same effect. This opinion also derives some binding effect from Para 24(1) of the Import Policy read with Paras 22 and 23 of the Export Policy. ", "19.2. Taking into account all the considerations, held that \"the goods in question were \"prohibited\" goods within the meaning of Section 2(33) and their confiscation under Section 113(d) and penalty under Section 114 were fully justified\". ", "20. Here we have a situation where goods have been contracted for re-export even prior to their import. In the statement dated 20.2.1992 of Shri , it is indicated that they had prior orders for exporting these items and they had to check the feasibility of import of these commodities taking into consideration the duty free import under Notification No. 208/81. In the statement of Shri , M.D. of , he has admitted that they had imported haemeodialysers from West Germany and the purpose of import of these was to meet the export order for export to Russia. It is also admitted by him that they made a gross profit of approximately Rs. 1 Crore. He also admitted to have availed benefit of notification to import goods with no import duty and that the interest was purely business interest. It has also been admitted by him that the goods were imported and cleared form with the sole purpose of exporting these to Russia with a business intention and to earn adequate profits. ", "21. It is, therefore, clear that even prior to import of goods cleared under duty exemption, the appellants had entered into Contract for re-export of these goods as such to earn profits. ", "22. Hon'ble in Para 25(2) of the judgment in case of Mis. M.J. Exports Supra held \"the goods were for use in this country, not in another\". ", "In the light of this, it is obvious that the appellants when they imported goods and claimed duty free exemption already knew that they would be exporting the goods and they knew also that they could not export these goods without subjecting them to certain processes and, therefore, as was contended by the before , they put up a facade of taking the goods to Ankleshwar after their import allegedly for being subjected to some processes. ", "23. In these circumstances, therefore, considering the intent of the appellants, extended period as provided under Proviso 2 to Section 28(i) of the Customs Act, 1962, is sustainable. in case of 1991 (33) ECR 225 (SC) held that extended period is applicable where there was wilful mis-statement and suppression of facts by the importer. That was a case where goods imported claiming benefit of Project Import were transferred to another company instead of being used for the purpose for which the import was authorised as Project Import. held: ", "9. In the instant case, the appellant had obtained the import licence dated February 14, 1979 for expansion of its business on the recommendation of the Director of Industries, Kerala State and the said import licence contained specific endorsement of \"Project Import\", When the goods arrived at the port in India the appellant filed a Bill of Entry on November 12, 1979, with the customs authorities which contained a declaration signal by a partner of the appellant. In addition, the appellant submitted an application form dated November, 21, 1979, before the customs authorities for Registration under Project Import (Registration of Contracts) Regulations, 1965 wherein it was stated that the goods to be imported were for substantial expansion of an existing plant and that the existing installed capacity of the plant of the appellant was 25,000 sq. mtr. per annum and that the capacity after expansion would be 10,98,000 sq. mtr. decorative Veeners per annum. In the said application form, it was also stated that no industrial licence for installation or substantial expansion was required by the appellant, since it is a Small Scale Unit. There is nothing on the record to show that the appellant had informed the customs authorities that the machinery to be imported would be transferred by the appellant to the and the would install the same. On the other hand, the endorsement on the import licence submitted with the Bill of Entry which contained a declaration by a partner of the appellant and the statements contained in the application from for Registration dated November 21, 1979, indicated that the appellant would be using the imported machinery for substantial expansion of its existing unit and on that basis the appellant was assessed for duty at a concessional rate under Head -ing No. 84.66 of the Customs Tariff. Since the appellant did not install the said machinery for the expansion of its existing unit, but transferred it to the after it had been cleared from the customs, the appellant cannot claim the benefit of the concessional rate of duty under Heading No. 84.66 of the Customs Tariff and is liable to pay such duty at the normal rates prescribed in the Customs Tariff. This was, therefore, a case of short levy of customs duty which is dealt with the Section 28 of the Act. In Sub-section (1) of Section 28 it is prescribed that a notice shall be served on the person chargeable with the duty requiring him to show cause why he should not pay the amount specified in the notice. The said notice has to be served within one year of the relevant date in cases when import is made by an individual for his personal use or by or by an educational, research or charitable institution or hospital and the period for service of such notice is six months in other cases. The proviso to Sub-section (1) of Section 28 enhances the aforementioned periods for service of the notice to five years in cases where any duty has not been levied or has been short-levied or erroneously refunded by reasons of collusion or any wilful misstatement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter. Here the relevant date was December 7, 1979, the date on which the duty was paid and the enhanced period of five years prescribed under the proviso to Sub-section (1) of Section 28 was invoked by the customs authorities to issue the show cause notice dated June 4, 1982, to the appellant. The present case falls within the ambit of the said proviso because the appellant had cleared the goods from the customs on payment of concessional rate of duty under Heading No. 84.66 of the Customs Tariff by making a misstatement in the application form dated November 21,1979, for registration under the Project Import (Registration of Contracts) Regulations, 1965, that the machinery that had been imported was for substantial expansion of the existing industrial unit of the appellant and by suppressing the fact that under Agreement dated July 31, 1979, the appellant had agreed to transfer the said machinery to the . In the circumstances the Collector was justified in directing that the goods in question should be re-assessed to duty on merits under the appropriate heading of the Customs Tariff without giving the benefit of the assessment under Heading 84.66 and to collect the short levy from the appellant. The demand for the additional amount of Rs. 1,26,163.45 paise made on the basis of such re-assessment in pursuance of the aforesaid direction given by the Collector, does not, therefore, suffer from any legal infirmity. ", "24. Considering goods had been contracted for export even prior to import and yet they claimed exemption when they knew such exemption could not be availed of in case goods were for re-export as such, extended period for demanding duty was sustainable. ", "25. I, therefore, uphold the impugned order and reject the appeal. ", "Sd/- ", "() Member (T) ", "26. In view of difference of opinion between the Members, the following question arises for determination by Third Member on reference of the matter by Hon'ble President. ", "Whether the appeal is required to be allowed in terms of findings given by Member () in his order. ", "or The appeal is required to be rejected in terms of the order recorded by Member (Technical) in his order. ", "Sd/- Sd/- () () Member (T) Member J) Dt. 26.12.1997 Hon'ble President , Member (T) 27.I have heard both sides on difference of opinion. The facts are set out in the first eight paragraphs of the order of the judicial member's order and therefore I do not propose to repeat them. ", "28. It is first contended by the advocate for the appellant that the demand is barred by limitation. The notice issued in April, 1993 for goods imported in 1988, invokes the extended period provided in Section 28 of the Act on the ground that the importer did not declare on the bill of entry, till investigation commenced that the goods were intended to be exported to the USSR. Advocate for the appellant contends that there has been no wilful misstatement, wilful suppression of facts, fraud or collusion so as to justify invocation of Section 28 of the Act. The Collector, he says, while recording the arguments on limitation, has not dealt with them. He points out that has clearly held that the demand is barred by limitation. ", "29. On merits he contends that when the goods were imported in 1988, the appellant was under the bonafide impression that notification 201/88 would apply and the goods were for stock and sale. Going by the plain meaning of the policy and the notification, the appellant had every reason to believe that the goods were intended to be imported under OGL and were exempt from duty when they were imported. Even if the intention was to export them subsequently, it is only after judgment that it has been held that was not permissible. Prior to this, the subsisting law was in judgment in reported in 1990 (40) ELT 339 and 1978 (2) ELT 350 : ECR C 274 SC. This view was confirmed by the appellant have not earlier imported the goods under notification exported without their being any objection from the . ", "30. He further contends that once the Collector of at Kandla had dropped the proceedings, the only course open to the department was to get his order reviewed. Since this has not been done, the matter has become final and the Collector of could not reopen the proceedings once again. ", "31. It is next contended that the Collector's order denies the exemption benefit only on the ground that the goods had been exported. The appellant's act of export had been found by the Collector in Kandla to be illegal and the appellant has been imposed a penalty. The point if any in export has been wiped out and there is no reason to deny the importation. To do so is to penalise the appellant twice. ", "32. The departmental representative contends that the appellant did not disclose to the department that the goods could not be used in any hospital in India which is contrary to the terms of the notification. In fact a claim was made to the contrary. There has been a clear misdeclaration. It is not correct to say that the Collector of , Bombay came to know about the import from the order of the Collector of , Kandla. There is no material to show this and the order itself says that he came to know from intelligence. He contends that Member (Technical) rightly relied upon judgment in Jackson and 1991 (33) ECR 225 that in the absence of a declaration that the goods were to be exported, the extended period could be rightly invoked. He says that it is not possible to say whether the earlier exports were of goods disclosed to be imported goods and they may have been declared as goods manufactured in India. He contends that, in addition to the goods described in Lists A and B to the table to the notification, List C extends the exemption to goods that may be certified by in each individual case to the life saving drugs, medicines or equipments. This emphasis on certification in each individual case\" is clearly to establish the use of the goods by the importer and this requirement applies for all goods covered by the notification. in the judgment says that the goods are not entitled to be exported and confirmed the penalty imposed for such export. It had also observed in para 25(1) that it would not have been the intention of the legislature to grant exemption from duty in respect of vital goods and in order that the importer may make profit by selling them abroad. Reliance by the appellant on the judgment in is therefore misplaced. ", "33. The reason advanced by the Collector for invoking the extended period is that by not indicating in the bill of entry that the goods were not meant for use in India but were imported for export to Russia, the appellant had contravened the conditions of the notification. In that the notification was issued in the public interest, which means the interest of the public in India. Member (Judicial) has found that the proceedings were barred by limitation, because the full facts were known to the Collector of , Kandla when he issued the demand for duty and subsequently dropped it. Therefore, he says, \"the revenue had all the information to initiate proceedings for recovery of duty.\" The view of the Member Technical is that there are clear territorial division with which each Collector exercise his jurisdiction and it does not follow that merely because the Collector of , Kandla initiated and dropped the proceedings for duty, the Collector of at Mumbai was aware of the imported goods sought to be re-exported. ", "34. The import took place in October, 1988 and the notice was issued in April, 1993 i.e. four years and six months after the importation. The extended period had been invoked on the ground that there has been wilful suppression of facts and mis-statement. The reason for this, the Collector says, is that the importer did not indicate during the importation that the goods were not meant for use in India but for export to Russia. The Collector also says that the appellant took the goods to Ankleshwar ostensibly for processing, although no such processing has been carried out. However, taking the goods to Ankleshwar would have been done after they were cleared from charge and could not have been influenced in coming to the decision by acts subsequent to the clearance of the goods. What we have to see is whether the failure to declare that the goods were meant to be re-exported amounts to suppression. For that to be held, we would have to see whether the situation required the appellant to specifically declare, while claiming the notification that the goods were to be exported. ", "35. The notification itself contains no express requirement that the goods imported must be used in India; nor does it require that any importer claiming its benefit must declare that the goods are intended to be used in India. ", "36. The departmental representative's argument relating to the List C to the table of the notification is not convincing. List A contains a list of life saving drugs or medicine, List B contains a list of life saving equipments and List C the residuary list covers drug, medicine or equipment including accessories or spares of such equipment certified by the specified officials of in each individual case to be a life saving drug, medicine, equipment, accessories or spare part. The words \"in each individual case\" refers, in my opinion, to life saving drug, medicine or equipment which is to be imported. List C obviously has been incorporated so as to provide for exemption to goods which may have been omitted in the Lists A and B and which may be developed or available for use or for sale subsequent to the notification. To prevent duty free import of such goods it is obvious that an expert body certify that the goods are in fact a life saving drug, medicine or equipment. The words of List C do not postulate directly, or by implication, that the goods must be used only in India any more than the goods in Lists A or B. The form in which the certificate by the authority of is to be given only requires it to certify that the goods are a life saving drug, medicine or equipment and to recommend grant of exemption from duty. The attribute of the goods being a life saving drug, medicine or equipment would continue, whether the goods are utilised for that purpose in India or elsewhere. ", "37. in its judgment in the proceedings arising out of the order of the Collector of , Kandla said that it could not have been the intention of the legislature to grant exemption from duty in respect of vital goods in order that the importer may make a profit by selling them abroad. However, this judgment was passed in 1992, after the import. Prior to that the judgment of in 1978 (2) ELT (350) (SC) : ECR C 274 SC and v. the Court itself held in the MJ Exports v. that the principle enunciated in these decisions is that the Court should construe the terms of statutory provision or instrument before it and should not supply or introduce words which are not found therein to give effect to possible intention behind the provision or instrument which is not borne out by the language used. It relied on its judgment in to construe the provision of the OGL. ", "38. The importer, going by the judgments then prevailing could not be in a position to conclude that the public interest leading to issue of notification require that a life saving drug, medicine or equipment etc. must be used in India and that if so not exemption would not be available. The judgment cited above, show that the importer could bonafide take such a view. ", "39. Going by the plain reading of Section 28 and the notification thereof, it is not possible for me to agree that when the goods were imported, the importer knew or could reasonably be expected to know that the exemption would not be available for the goods, they were to be re-exported. ", "40. The members of the bench also decided the matter have approached the question of limitation from a different perspective. Member finds the notice was barred by limitation \"as the revenue had all the information to initiate proceedings for recovery of duty.\" Member says (in para 8) that extended period is applicable because the goods have been contracted for export and the appellant knew that exemption could not be availed in case of goods were to be re-exported. ", "41. in MJ Exports v. CEGAT (in para 17) itself noted that there nothing in the provisions of the Act to compel an importer even before or when importing the goods, to make up his mind whether he is going to use or sell them in India or whether he proposes to re-export them. Again, there may be cases where he has imported the goods for use or sale in India but subsequently receives an attractive offer which impels prior to export them. It would make export trade difficult to say that he cannot accept such an offer as the goods, when imported, had been cleared for home consumption. The , in making its observation, was interpreting the provisions of Sections 68 and 69 of the Act and answering the contention of the revenue before it that the goods cleared for home consumption are prohibited for export. However, this observation does suggest that it is possible for an importer to import the goods and thereafter export them without contravening the provisions. It could be possible for the appellant to cause genuinely import the goods for stock and sale in India but subsequently on clearance from choose to export them. In that situation, obviously the extended period could not be invoked on the ground that there was suppression of facts or mis-statement. The converse is also possible. Even if the appellant knew, when goods, imported were imported, they were to be exported to Russia. It is however possible that he may have changed his mind, and decided to keep the goods in India say, that if the deal with Russia fell through or was cancelled because of it is more profitable to sell the goods in India. These observations indicate that it may not always be possible for an importer to say while importing the goods, whether they will be used in India or exported. It is also to be noted that the Madras High in , specifically held that there was no bar to export of goods imported under OGL with the benefit of exemption under notification 208/81. This would also lend support to the plea that there was no bar to export of such goods. ", "42. For the extended period provided in the proviso to Section 28(1) to apply in the facts of this case, it must be shown that the appellant, while being aware that the benefit of the notification would not be available for the reason that export of goods subsequent to import under and clearance under the notification was not permissible suppressed from the department the fact that the goods were to be exported. The facts, as I have discussed above, do not establish this state of affairs. It cannot be said that, given the state of law at the relevant time the appellant ought to have known that import under OGL and clearance under notification was not permissible for goods which were to be subsequently exported. In any event it has not been shown that the appellant being aware of the illegality of its action suppressed the facts from the department, thus leading to extend the provisions of the notification which it otherwise would not have done. The judgment of in and v. CCE (SO to the effect that it must be shown, before the extended period under the proviso to Section 11 Ad) of the Central Excises and Salt Act , 1944 to apply that there was wilful suppression or mis-statement, would equally apply to the extended period under Section 28(1) of the Customs Act, 1962. The words of both the provisos relating to suppression, mis-statement, collusion in both are identical. I therefore agree with the Member (Judicial) that the demand is barred by limitation as the extended period will not apply. ", "43. Both the members also disagreed on whether the proceedings are barred by res judicata, Member Judicial holding that they are and the Member Technical that they are not. Although notice had been issued by demanding duty, Collector of , declined to confirm the demand for duty. He agreed with the submission that he had no jurisdiction to demand on the goods imported through Bombay. He added that even otherwise notification 208/81 exempts the goods unconditionally from import duty. When once the Collector of , admits that he has no jurisdiction and says so, his subsequent observation that the demand for duty is unsustainable cannot be binding. It would therefore be incorrect to say that the Collector of , Bombay was estopped from demanding duty. On this point I agree with the views expressed by the Member Technical. ", "44. The third reason given by the Judicial Member is that the goods having been exported, the benefit of drawback would be available. The order of Member Technical does not discuss this at all. There is therefore no difference of opinion on this aspect. ", "45. On the specific question posed therefore I hold that the appeal is to be allowed as found by Member . ", "Sd/- ", "(' Member (T) Dt. 5.5.1999 In view of the majority opinion, the appeal is allowed."], "relevant_candidates": ["0000027215", "0000092456", "0000436913", "0000774655", "0001117717", "0001123085", "0001433474", "0001548346", "0001788955", "0114464453"]} {"id": "0000871220", "text": ["PETITIONER: M/S MOTILAL PADAMPAT SUGAR MILLS . Vs. RESPONDENT: STATE OF UTTAR PRADESH AND ORS. DATE OF JUDGMENT12/12/1978 BENCH: , P.N. BENCH: , P.N. TULZAPURKAR, V.D. CITATION: 1979 AIR 621 1979 SCR (2) 641 1979 SCC (2) 409 CITATOR INFO : F 1980 SC 768 (1) O 1980 SC1285 (40) R 1983 SC 848 (8) E&R 1985 SC 941 (4) R 1986 SC 806 (9,10,11,12,13,14) RF 1986 SC 872 (181,182) F 1987 SC 590 (7) RF 1987 SC2414 (22,23) RF 1988 SC1247 (3) RF 1989 SC1933 (28) R 1989 SC2138 (64) C 1991 SC 14 (11) D 1991 SC 818 (18) RF 1992 SC1075 (3) RF 1992 SC2169 (28) ACT: Waiver doctrine of-Waiver is a question of fact and it must be properly pleaded and proved. Public law-Doctrine of Promissory Estoppel, its contours and parameters, explained. Estoppel-Estoppel in pais-Promissory Estoppel- Applicability of the doctrine against the and extent threreof-Doctrine of executive necessity whether could be a valid defence and if so under what circumstance. Representations de futureo by public body if enforceable ex-contractu by a person who acts upon such representation or promise intended to be acted on-Burden of proof-Degree of standard of proof in such cases. HEADNOTE: The appellant is a limited company which is primarily engaged in the business of manufacture and sale of sugar and it has a cold storage plant and a steel foundry. With reference to a news item dated 10th October 1968 in in which it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under section 4A of the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them \"to come on firm footing in developing stage\", the appellant addressed a letter dated 11th October 1968 to stating that in view of the sales tax holiday announced by the the appellant intended to set up a Hydrogenation plant for manufacture of and sought for confirmation that this industrial unit which it proposed to set up, would be entitled to sales tax holiday' for a period of three years from the date it commenced production. The Director of by his letter dated 14th October 1968, confirmed that \"there will be no sales tax for three years on the finished product of your proposed factory from the date it gets power connection for commencing production\". Thereafter when the appellant's representative met the 4th respondent, who was at that time the Chief Secretary to the as also Advisor to the Governor and apprised the latter that the appellant was setting up the factory solely on the basis of the assurance given on behalf of the that the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of commercial production at the factory, the 4th respondent reiterated the assurance made. Again the appellant, by its letter dated 13th December 1968, requested the 4th respondent \"to please confirm that we shall be allowed sales tax holiday for a period of three years on the sale of from the date we start production\". The 4th respondent replied on 22nd December 1968 that \" will be willing to consider your request for grant of exemption from U.P. Sales Tax for a period of three years from the date of 642 production\" and asked the appellant to obtain the requisite application form and submit a formal application to the Secretary to the in the department, and in the meanwhile \"to go ahead with the arrangements for setting up the factory\". The appellant in the meantime had submitted an application dated 21st December 1968 for a formal order granting exemption from sales tax under section 4A of the U.P. Sales Tax Act. The appellant was also subsequently informed by the letter dated 23rd January 1969 of the 4th respondent categorically that the proposed factory of the appellant \"will be entitled to exemption from U.P. Sales Tax for a period of three years from the date of going into production and that this will apply to all sold during that period in Uttar Pradesh itself\". The appellant, on the basis of these unequivocal assurances, went ahead with the setting of the factory and made much progress. By the middle of May 1969, started having second thoughts on the question of exemption and the appellant was requested to attend a meeting \"to discuss the question of giving concession in Sales Tax on products\". The appellant immediately by its letter dated 19th May 1969 pointed out to the 5th respondent that so far as the appellant was concerned, had already granted exemption from sales tax by the letter of the Chief Secretary dated 23rd January, 1969, but still, the appellant would be glad to send its representative to attend the meeting. The appellant's representative did attend the meeting held on 3rd June 69 and reiterated that so far as the appellant was concerned, it had already been granted exemption from sales tax and stood committed to it , however, went back upon the assurance and a letter dated 20th January 1970 was addressed by the 5th respondent intimating that the had taken a policy decision that new units in the State which go into commercial production by 30th September 1970, would be given only partial concession in Sales Tax at different rates on each year of production. The appellant, by its letter dated 25th June 1970, pointed out to the Secretary to the that the appellant proposed to start commercial production of with effect from 1st July 1970 and stated that, as notified in the letter of 20th January 1970, the appellant would be availing of the exemption granted by and would be charging Sales Tax at the rate of 3 1/2% instead of 7% on the sales of manufactured by it for the period of one year commencing from 1st July 1970. The factory of the appellant thereafter went into production from 2nd July 1970 and the appellant informed the Secretary to the about the same by its letter dated 3rd July 1970. , however, once again changed its decision and on 12th August 1970, a news item appeared in stating that the had decided to rescind the earlier decision i.e. the decision set out in the letter dated 20th January 1970, to allow concession in the rates of Sales Tax to new Units. The appellant thereupon filed a writ petition in asking for a writ directing to exempt the sales of manufactured by the appellant from Sales Tax for a period of three years commencing from 2nd January 1970 by issuing a notification under section 4A of the U.P. Sales Tax Act from the appellant for the said period of three years. The plea based on the 643 doctrine of promissory estoppel was, however rejected by of principally on the ground that the appellant had waived the exemption, if any, by accepting the concessional rates set out in the letter of the respondent dated 20th January 1970. Allowing the appeal by certificate, the , ^ HELD: 1. The view taken by , namely, that even if there was an assurance given by the 4th respondent on behalf of and such assurance was binding on on the principle of promissory estoppel, the appellant had waived its right under it by a accepting the concessional rates of sales tax set out in the letter of the 5th respondent dated 20th January, 1970 is not correct. [656 D-E] 2. Waiver is a question of fact and it must be properly pleaded and proved. No plea of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings. [656 E-F] In the instant case: (a) the plea of waiver was not taken by in the affidavit filed on its behalf in reply to the writ petition, nor was it indicated even vaguely in such affidavit. It was raised for the first time at the hearing of the writ petition. That was clearly impermissible without an amendment of the affidavit in reply or a supplementary affidavit raising such plea. [656 F] (b) It was not right for to have allowed the plea of waiver to be raised against the appellant and that plea should have been rejected in limine. If waiver were properly pleaded in the affidavit in reply, the appellant would have had an opportunity of placing on record facts showing why and in what circumstances the appellant came to address the letter dated 25th June 1970 and establishing that on those facts there was no waiver by the appellant of its right to exemption under the assurance given by the 4th respondent. But in the absence of such pleading in the affidavit in reply, this opportunity was denied to the appellant [656F-H] 3. Waiver means abandonment of a right and it may be either express or implied from conduct, but its basic requirement is that it must be \"an intentional act with knowledge\". There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it. [657A, B] In the instant case, on the facts, the plea of waiver could not be said to have been made out by : There was nothing to state that at the date when the appellant addressed the letter dated 25th June 1970, it had full knowledge of its right to exemption under the assurance given by the 4th respondent and that it intentionally abandoned such right. It is not possible to presume in the absence of any material placed before the , that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June 1970. It is difficult to speculate what was the reason why the appellant addressed the letter 25th June 1970 stating that it would avail of the concessional rates of sales tax granted under the letter dated 20th January 1970. [657 D-E] 644 Earl of Darnley v. (Proprietors etc.), [1867] L.R. 2 H.L. 43 @ 57 Craine v. 28 C.L.R. 305; v. [1846] 2 Q.B. 706; quoted with approval. 4. The doctrine called 'promissory estoppel', 'equitable estoppel', 'quasi estoppel', and 'new estoppel' is a principle evolved by equity to avoid injustice where a promise is made by a person knowing that it would be acted on and it is person to whom it is made and in fact it is so acted on and it is inequitable to allow the party making the promise to go back upon it. Though commonly named promissory estoppel it is neither in the realm of contract nor in the realm of estoppel. The basis of the doctrine is the inter position of equity, which has always true to its form stepped in to mitigate the rigours of strict law. [658 E-G] 5. The true principle of promissory estoppel is that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relationship effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is infact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any pre- existing relationship between the parties or not. Equity will in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights even where they arise, not under any contract, but on his own title deeds or under statute. [662 B-D] To the applicability of the doctrine of promissory estoppel it is not necessary that there should be some contractual relationship between the parties. Nor can any such limitation, namely, that the doctrine of promissory estoppel is limited in its operation to cases where the parties are already contractually bound and one of the parties induces the other to believe that the strict rights under the contract would not be enforced be justifiably introduced to curtail the width and amplitude of the doctrine. The parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel take its origin. The doctrine would apply even where there is no pre-existing legal relationship between the parties, but the promise is intended to create legal relations or affect a legal relationship whish will arise in future. [660 G-H, 661 A, F-G]. , [1854] 5 H.L. 185, Hughes v. , [1857] 2 A.C. 439, Birmingam & District Land Co. v. , ]1888] 40 Ch. D. 268; discussed and questioned. v. , [1947] K.B. p. 130:: [1956] 1 All. E.R. 256; explained. Evenden v. Guildford City Association Football Club Ltd., [1975] 3 All. E.R. 269 @ 272 :: [1975] 3 W.L.R. 251 @ 255; Crabb v. Arun District Council. [1975] All E.R. 865 @ 875:: [1975] 8 W.L.R. 847 @ 858 CA; quoted with approval. 645 6. The doctrine of promissory estoppel cannot be inhibited by the same limitation estoppel in the strict sense of the term. It is an equitable principle evolved by the s for doing justice and there is no reason why it should be given only a limited application by way of defence and it should only be a shield and not a sword to found a cause of action. It can be the basis of a cause of action. [662 D-E, 663 E-F]. There is no qualitative difference between 'proprietary estoppel' and 'promissory estoppel'. Both are the off springs of equity and if equity is flexible enough to permit proprietary estoppel to be used as a cause of action, there is no reason in logic or principle why promissory estoppel should also not be available as cause of action, if necessary to satisfy the equity. [665 G-H] v. . [1947]1 K.B.P. 130: [1956] 1 All. E.R. 256; Combe v. Combe [1951] 2 K.B. 215; Beesly v. Hallwood Estate Ltd. [1960] 2 All. E.R. 314; Municipal Corporation of Bombay.v Secty. of State I.L.R. 29 Bomb. 580 @ 607; v. ,s [1975] 3 W.L.R. 286; referred to. Crabb v. Arun District Council [1975] All. E.R. 865 @ 875 explained. Ramsden v. Dysen,[1866] L.R H.L. 129; Dunlop Pneuntafic Tyre Co. v. 1915 A.C. 847: discussed. 7. Law is not a mausoleum. It is not an antique to be taken down, dusted admired and put back on the shelf. It is rather like an old but vigorous tree having its roots in history, yet continuously taking new grafts and putting out new sprouts and occasionally dropping dead wood. It is essentially a social process, the end product of which is justice and hence it must keep on growing and developing with changing social concepts and values. Otherwise, there will be estrangement between law and justice and law will cease to have legitimacy Though 'continuity with the past is a historical necessity', 'conformity is not to be turned into a fetish'. [668 H, 669 A-B]. Therefore, despite the fact that allowing promissory estoppel to found a cause of action would seriously dilute the principle which requires consideration to support a contractual obligation, this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing, law closer to justice should not be held in fetters but allowed to operate in all its activist magnitude. so that it may fulfil the purpose for which was conceived and born. [668 F-G]. v Minister of Pensions. [1949] 1 K. B. 227 Evenden Guldford city Association Football Club Ltd. [1975] 3 All. E.R. p. 269. Candler v. [1951] 2 K. B. 164 @ 178; quoted with approval. 8. A promise may, in the United States, derive contractual enforceability if it has been made by the promisor knowing or intending that it would be acted on and the promisee has altered his position in reliance on it, notwithstanding that there is no consideration in the sense in which that word is used in English 646 and jurisprudence. However, the basic requirement for invoking this principle must be present namely that the fact situation should be such that injustice can be avoided only by enforcement of the promise. The doctrine of promissory estoppel has been used in the United States to reduce, if not to destroy, the prestige of consideration as an essential of valid contract and also used in diverse other situations as founding a cause of action: [670 D-E, 673 B]. v. 57 Am L. R. 980; v. [1958] 31 California 2nd 409; referred. Under the English law, the judicially formed view is that the crown is not immune from liability under the doctrine of promissory estoppel and the view taken by , in [1949] 1 K. B. 227 that the crown cannot escape its obligation under the doctrine of promissory estoppel by \"praying in aid the doctrine of executive necessity\" still holds the field. [674 D]. v. Minister of Pensions [1949] 1 K. B. 227; quoted with approval: v. The King [1921] 3 K. B. 500; referred to. v. 1951 A. C. 837; explained 10. Even in the United States, the trend in the State s, of late, has been strongly in favour of the application of the doctrine of promissory estoppel against the and public bodies \"where interests of justice, morality and common fairness clearly dictate that course\". It is being increasingly felt that \"the ought to set a high standard in its dealings and relationships with citizens and the word of a duly authorised agent, acting within the scope of his authority, ought to be as good as a bond\". The would not be estopped \"by the acts of its officers and agents who without authority enter into agreements to do what the law does not sanction or permit\" and \"these dealing with an agent of the must be held to have notice of limitations of his authority\". But if the acts of omissions of officers of the are within the scope of their authority and are not otherwise impermissible under the law, they \"will work estoppel against \". [676 F-H, 677 A-D] Federal Crop Insurance Corporarion v. 332 U.S. 380: 92 L. ed. discussed and explained. v. United States 335 Fed. Rep. 2nd p. 96; quoted With approval. 11. Where the makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the would be held bound by the promise and the promise would be enforceable against the at the instance of the promisee notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. [682 G-H, 683-A]. 647 It is elementary that in a Republic governed by the rule of law, no one, a however high or low is above the law. Every one is subject to the law as fully and completely as any other and the is no exception. It is indeed the pride of constitutional democracy and rule of law that the stands on the same footing as a private individual so far as the obligation of the law is concerned; the former is equally bound as the latter. On no principle can a committed to the rule of law, claim immunity from the doctrine of promissory estoppel. The cannot be heard to say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of 'honesty and good faith'. In fact the should be held to a high \"standard of rectangular rectitude while dealing with its citizens\". [683 A-C]. v. and Ors., I.L.R. 5 Cal. 669; . 29 Bomb. 588; approved. of rlle City of Bombay and Ors. S.C.R. 43; , 2 S.C.R. 366; followed. v. , L.R. 1HL 170; referred to. v. Minister of Pensions, 1 K. B. 227; quoted with approval as the correct law. 12. The doctrine of executive necessity, regarded as sufficient Justification for the to repudiate even its contractual obligations was emphatically negatived in the Indo-Afghan Agencies case and the supremacy of the laws was established, [683 C-D]. Therefore, it is not open to to claim immunity from the applicability of the rule of promissory estopped and thereby repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the wants to preserve its freedom of executive action from being hampered or restricted, the should not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But, if the makes such a promise and the promisee acts in reliance upon it and alters his position the would be compelled to make good such promise like any other private individual. [683 D-F]. 13. The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society. It should be the constant endeavor of the s and the legislatures to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estopped is a significant judicial contribution in that direction.[683 F-G]. Since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it could be shown the by that having regard to the facts as they have transpired, it would be inequitable to hold the to the promise made by it, the would not raise an equity in favour of the promisee and enforce the promise against the . 648 The doctrine of promissory estoppel would be displaced in such a case because on the facts, equity would not require that the should be held bound by the promise made by it. [683 G-H, 684 A] When the is able to show that in view of the facts, as they have transpired public interest would be prejudiced if the were required to carry out the promise, the would have to balance, the public interest in the carrying out a promise made to a citizen which has induced the citizen to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the and determine which way the equity lies. It would not be enough for the just to say that public interest requires that the should not be compelled to carry out the promise or that the public interest would suffer if the were required to honour it. The cannot claim to be exempt from the liability to carry out the promise 'on some indefinite and undisclosed ground of necessity or expediency', nor can the claim to be the sole judge of its liability and repudiate it 'on an exparte appraisement of the circumstances. [684 A-D] In order to resist its liability, the should disclose to the the various events necessitating its claim to be exempt from the liability and it would be for the to decide whether those events are such as to render it inequitable to enforce the liability against the . [684 D-E]. Mere claim of change of policy would not be sufficient to exonerate the from the liability: the would have to show precisely the changed policy with the reason and justification therefor, to enable the to judge for \"itself which way the public interest lies and what equity of the case demands. It is only if the is satisfied, on proper and adequate material placed by the , that over-riding public interest requires that the should not be held bound by the promise but should be free to act unfettered by it that the would refuse to enforce the promise against the . [684 E-F] The essence of the rule of law is that the would not act on the mere ipse dixit of the , for it is the which has to decide and not the , whether the should be held exempt from liability.[684 F-G] The burden would be upon the to show that the public interest in the acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the bound by the promise and the would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such over-riding public interest, it may still be competent to the to resile from the promise 'on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position' provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. [684 G-H, 685 A]. v. , 3 All. E.R. 556; referred to 649 14. So far as the doctrine of promissory estoppel is concerned, no distinction can be made between a private individual and a public body. This doctrine is also applicable against a public body like a municipal council. However, this doctrine cannot be applied in teeth of an obligation or liability imposed by law. It cannot be invoked to compel the or even a private party to do an act prohibited by law. There can also be no promissory estoppel against the exercise of legislative power. The can never be precluded from exercising its legislative function by resort to the doctrine of pro- missory estoppel. [688C, G-H 689 A]. . 3 SCR 854; . 3 S.C.R. 711; discussed & followed. . 1 SCR 51 5 @ 526; Assistant Cusrodian v. Ors. 2 SCR 359, explained and held inapplicable. . 1 S.C.R. 671 @ 688; reiterated. . A.I.R. 1976 J & K p. 41 approved. Suppl. S.C.R. 532; Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. v. Ors. 1 S R 375; A.I.R. 1977 S.C. 2149; . 3 S.C.R. 249;: 3 S.C.C. 457; explained. 15. In order to attract the applicability of the doctrine of promissory estoppel, it is not necessary that the promisee, acting in reliance on the promise, should suffer any deteriment. What is necessary is no more than that there should be alteration of his position in reliance on the promise. If detriment were a necessary element, there would be no need for the doctrine of promissory estoppel because, in that event in quite a few cases, the detriment would form the consideration and the promise would be binding, as a contract. If by deteriment is meant injustice to the promisee which would result if the promisor were to resile from his promisee, then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice sneered by the promisee acting on the promise, put the prejudice which would be caused to the promisee, if the promisor were allowed to back on the promise. It is not necessary for the promisee to show that he has acted to his detriment. All that he has to show is that he has acted to reliance on the promise and altered his position. [694 A-B, F-G, 695 E, 694 D]. V. High Trees House, K.B. p. 130:: 1 All. E.R. 256, W. J. Alan & Co. Ltd. v. 2 All. E.R. p. 127, @ p. 140, v. All. E. R. 657; 1 W. L. R. 761 Emmaulel Ayodeji 650 Ajya V. All. E. R. 556 Karnmins Ballrooms Ltd. v. 2 All. E.R. 871, Grurldt v. 59 C.L.R. 641; quoted with approval. In the instant case. The facts necessary for involving the doctrine of promissory estoppel were clearly resent and the was bound to carry out the representation and exempt the appellant from sales tax in respect of sales of effected by it in Uttar Pradesh for a period of three years from the date of commencement of the production. [693 F-G] (a) The letter dated 23rd January 1969 was a representation on behalf of the , the representation having been made by the 4th respondent in his capacity as the Chief Secretary of the categorically to the effect that the appellant would be entitled to exemption from sales tax in respect of the sale of vanaspati effected in Uttar Pradesh for a period of three years from the date of commencement of production. This representation was made by way of clarification in view of the suggestion in the appellant letter dated 2 nd January 1969 that the financial institutions were not prep ed to regard the earlier letter of the 4th respondent dated 22nd December 1968 as a definite commitment on the part of the to grant exemption from sales tax. [692 H, 693 A- B] (b) The representation made by the 4th respondent was a representation within the scope of his authority and was binding on the in as much as the 4th respondent, who was at the material time the Chief Secretary to the and also Adviser to the Governor discharging the functions of the during the President's Rule had authority to bind the Governor. Moreover the averment to this effect in the Writ Petition was not denied by the State in the affidavit in reply filed on its behalf [693 C-D]. (c) This representation was made by the knowing or intending that it would be acted on by the appellant because the appellant made it clear that it was only on account of the exemption from sales tax promised by the that the appellant had decided to set up the factory for manufacture of . In fact the appellant relying on this representation of the , borrowed moneys from various financial institutions, purchased plant and machinery from , Bombay and set up a factory at Kanpur. [693 E-F] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1597 of 1972. ", "Appeal from the Judgment and Order dated 25th January, 1972of in Civil Misc. Writ No. 3788/70. ", ", , , , and for the Appellant. ", ", and for RR 1-3 and 5. ", " for Respondent No. 4. ", "651 ", ", , and for the Intervener (M/s. Modi Rubber Ltd.). ", "The Judgment of the Court was delivered by , This appeal by certificate raises a question of considerable importance in the field of public law. How far and to what extent is the bound by the doctrine of promissory estoppel ? It is a doctrine of comparatively recent origin but it is potentially so fruitful and pregnant with such vast possibilities for growth that traditional lawyers are alarmed lest it might upset existing doctrines which are looked upon almost reverentially and which have held the field for a long number of years. The law in regard to promissory estoppel is not yet well settled though it has been the subject of considerable debate in England as well as the United s of America and it has also received consideration in some recent decisions in India and we, therefore, propose to discuss it in some detail with a view to defining its contours and demarcating its parameters. We will first state briefly the facts giving rise to this appeal. This is necessary because it is only where certain fact-situations exist that promissory estoppel can be invoked and applied. ", "The appellant is a limited company which is primarily engaged in the business of manufacture and sale of sugar and it has also a cold storage plant and a steel foundry. On 10th October, 1968 a news item appeared in in which it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under section 4A of the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them \"to come on firm footing in developing stage\". This news item was based upon a statement made by Shri the then Secretary in of the . The appellant, on the basis of this announcement, addressed a letter dated 11th October, 1968 to the Director of Industries stating that in view of the sales tax holiday announced by the , the appellant intended to set up a Hydro-genation Plant for manufacture of and sought for confirmation that this industrial unit, which it proposed to set up would be entitled to sales tax holiday for a period of three years from the date it commenced production. The Director of Industries replied by his letter dated 14th October, 1968 confirming that \"there will be no sales tax for three years on the finished product of your proposed factory from the date it gets power connection for commencing production.\" The appellant thereupon started taking steps to contact various financiers for financing the project and also initiated negotiations with manufacturers for purchase of machinery for setting up the factory. On 12th December, 1968 the appellant's representative met the 4th respondent who was at that time the Chief Secretary to the as also Advisor to the Governor and intimated to him that the appellant was setting up the factory solely on the basis of the assurance given on behalf of the that the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of commercial production at the factory and the 4th respondent reiterated the assurance that the appellant would be entitled to sales tax holiday in case the factory was put up by it. The appellant by its letter dated 13th December, 1968 placed on record what had transpired at the meeting on the previous day and requested the 4th respondent \"to please confirm that we shall be allowed sales tax holiday for a period of three years on the sale of from the date we start production.\" On the same day the appellant entered into an agreement with , Bombay for supply of plant and machinery for the factory, providing clearly that the appellant would have the option to terminate the agreement, if within 10 weeks exemption from sales tax was not granted by . The 4th respondent replied on 22nd December, 1968 confirming that \" will be willing to consider your request for grant of exemption from U.P. Sales Tax for a period of three years from the date of production\" and asked the appellant to obtain the requisite application form and submit a formal application to the Secretary to the in and in the meanwhile to \"go ahead with the arrangements for setting up the factory\". The appellant had in the meantime submitted an application dated 21st December, 1968 for a formal order granting exemption from sales tax under section 4A of the Act. It appears that the letter of the 4th respondent dated 22nd December, 1968 was not regarded as sufficient by the financial institutions which were approached by the appellant for financing the project since it merely stated that would be willing to consider the request for grant of exemption and did not convey any decision of that the exemption would be granted. The appellant, therefore, addressed a letter dated 22nd January, 1969 to the 4th respondent pointing out that the financial institutions were of the view that the letter of the 4th respondent dated 22nd December, 1968 \"did not purport to commit the for the concession mentioned\" and it was, therefore, necessary to obtain a formal order of exemption in terms of the application submitted by it. The 4th respondent, however, stated categorically in his letter in reply dated 23rd January, 1969 that the proposed Factory of the appellant \"will be entitled to exemption from U.P. Sales Tax for a period of three years from the date of going into production and that this will apply to all sold during that period in Uttar Pradesh itself\" and expressed his surprise that \"a letter from the Chief Secretary to stating this fact in clear and unambiguous words should not carry conviction with the financial institutions.\" In view of this unequivocal assurance given by the 4th respondent, who not only occupied the post of Chief Secretary to the but was also Advisor to the Governor functioning under the President's rule, the appellant went ahead with the setting up of the Factory. The appellant by its letter dated 25th April, 1969 advised the 4th respondent that , being convinced by the clear and categorical assurance given by the 4th respondent that the Factory of the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of production, had sanctioned financial assistance to the appellant and the appellant was going ahead with the project in full speed to enable it to start production at the earliest. The appellant made considerable progress in the setting up of the Factory but it seems that by the middle of May 1969 started having second thoughts on the question of exemption and a letter dated 16 May, 1969 was addressed by the 5th respondent who was Deputy Secretary to the in , intimating that a meeting has been called by the Chief Minister on 23rd May, 1969 \"to discuss the question of giving concession in Sales Tax on products\" and requesting the appellant to attend the meeting. The appellant immediately by its letter dated 19th May, 1969 pointed out to the 5th respondent that so far as the appellant was concerned, had already granted exemption from Sales Tax by the letter of the Chief Secretary dated 23rd January, 1969 but still, the appellant would be glad to send its representative to attend the meeting as desired by the 5th respondent. The proposed meeting was, however, postponed and the appellant was intimated by the 5th respondent by its letter dated 23rd May, 1969 that the meeting would now be held on 3rd June, 1969. The appellant's representative attended the meeting on that day and reiterated that so far as the appellant was concerned, it had already been granted exemption from Sales Tax and stood committed to it. The appellant thereafter proceeded with the work of setting up the plant on the basis that in accordance with the assurance given by the 4th respondent on behalf of , the appellant would be exempt from payment of Sales Tax for a period of three years from the date of commencement of production. ", "654 ", " however went back upon this assurance and a letter dated 20th January, 1970 was addressed by the 5th respondent intimating that the Government had taken a policy decision that new Vanaspati Units in the State which go into commercial production by 30th September, 1970 would be given partial concession in Sales Tax at the following rates for a period of three years: ", "First year of production 31/2% Second year of production 3% Third year of production 21/2% The appellant by its letter dated 25th June, 1970 pointed out to the Secretary to the Government that the appellant proposed to start commercial production of with effect from 1st July, 1970, and stated that, as notified in the letter dated 20th January, 1970, the appellant would be availing of the exemption granted by and would be charging sales tax at the rate of 31/2% instead of 7% on the sales of manufactured by it for a period of one year commencing from 1st July, 1970. The factory of the appellant thereafter went into production from 2nd July, 1970 and the appellant informed the Secretary to the Government about the same by its letter dated 3rd July, 1970. The State Government however once again changed its decision and on 12th August, 1970 a news item appeared in stating that the Government had decided to rescind the earlier decision i.e. the decision set out in the letter dated 20th January, 1970, to allow concession in the rates of Sales Tax to new Units. The appellant thereupon filed a writ petition in asking for a writ directing to exempt the sales of manufactured by the appellant from sales tax for a period of three years commencing from 2nd July, 1970 by issuing a notification under section 4A and not to collect or charge sales tax from the appellant for the said period of three years. It appears that in the writ petition as originally filed, there was no plea of promissory estoppel taken against and the writ petition was, therefore, amended by obtaining leave of with a view to introducing the plea of promissory estoppel. The appellant urged in the amended writ petition that the 4th respondent acting on behalf of had given an unequivocal assurance to the appellant that the appellant would be entitled to exemption from payment of sales tax for a period of three years from the date of commencement of the production and this assurance was given by the 4th respondent intending or knowing that it would be acted on by the appellant and in fact the appellant, acting in reliance on it, established the factory by investing a large amount and was, therefore, bound to honour the assurance and exempt the manufactured and sold by the appellant from payment of sales tax for a period of three years from 2nd July, 1970. This plea based on the doctrine of promissory estoppel was, however rejected by of principally on the ground that the appellant had waived the exemption, if any, by accepting the concessional rates set out in the letter of the Deputy Secretary dated 20th January, 1970. The appellant thereupon preferred the present appeal after obtaining a certificate of fitness from . ", "The principal argument advanced on behalf of the appellant in support of the appeal was that the 4th respondent had given a categorical assurance on behalf of that the appellant would be exempt from payment of sales tax for a period of three years from the date of commencement of production and such assurance was given intending or knowing that it would be acted on by the appellant and in fact the appellant, acting in reliance on it, altered its position and was, therefore, bound, on the principle of promissory estoppel, to honour the assurance and exempt the appellant from sales tax for a period of three years from 2nd July, 1970, being the date on which the factory of the appellant commenced production. The appellant assailed the view taken by that this claim of the appellant for exemption based on the doctrine of promissory estoppel was barred by waiver, because the appellant had by its letter dated 25th June, 1970 accepted that it would avail of the exemption granted under the letter of the 5th respondent dated 20th January, 1970 and charged sales tax at the concessional rate of 31/2% instead of 7% during the first year of its production. The appellant urged that waiver was a question of fact which was required to be pleaded and since no plea of waiver was raised in the affidavit filed on behalf of in opposition to the writ petition, it was not competent to to rely on the plea of waiver for the first time at the hearing of the writ petition. Even if the plea of waiver were allowed to be raised, notwithstanding that it did not find place in the pleadings, no waiver was made out, said the appellant, since there was nothing to show that were the circumstances in which the appellant had addressed the letter dated 25th June, 1970 stating that it would avail of the exemption granted under the letter dated 20th January, 1970 and it was not possible to say that the appellant, with full knowledge of its right to claim total exemption from payment of sales tax, waived that right and agreed to accept the concessional rates set out in the letter dated 20th January, 1970. on the other hand strongly pressed the plea of waiver and submitted that the appellant had clearly waived its right to complete exemption from payment of Sales Tax by addressing the letter dated 25th June, 1970. also contended that, in any event, even if there was no waiver, the appellant was not entitled to enforce the assurance given by the 4th respondent, since such assurance was not binding on and more-over, in the absence of notification under section 4A, could not be prevented from enforcing the liability to sales tax imposed on the appellant under the provisions of the Act. It was urged on behalf of that there could be no promissory estoppel against so as to inhibit it from formulating and implementing its policies in public interest. These were broadly the rival contentions urged on behalf of the parties and we shall now proceed to consider them. ", "We shall first deal with the question of waiver since that can be disposed of in a few words. held that even if there was an assurance given by the 4th respondent on behalf of and such assurance was binding on on the principle of promissory estoppel, the appellant had waived its right under it by accepting the concessional rates of sales tax set out in the letter of the 5th respondent dated 20th January, 1970. We do not think this view taken by can be sustained. In the first place, it is elementary that waiver is a question of fact and it must be properly pleaded and proved. No plea of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings. Here it was common ground that the plea of waiver was not taken by in the affidavit filed on its behalf in reply to the writ petition, nor was it indicated even vaguely in such affidavit. It was raised for the first time at the hearing of the writ petition. That was clearly impermissible without an amendment of the affidavit in reply or a supplementary affidavit raising such plea. If waiver were properly pleaded in the affidavit in reply, the appellant would have had an opportunity of placing on record facts showing why and in what circumstances the appellant came to address the letter dated 25th June, 1970 and establishing that on these facts there was no waiver by the appellant of its right to exemption under the assurance given by the 4th respondent. But in the absence of such pleading in the affidavit in reply, this opportunity was denied to the appellant. It was, therefore, not right for to have allowed the plea of waiver to be raised against the appellant and that plea should have been rejected in limine. ", "657 ", "Secondly, it is difficult to see how, on the facts, the plea of waiver could be said to have been made out by . Waiver means abandonment of a right and it may be either express or implied from conduct, but its basic requirement is that it must be \"an intentional act with knowledge\". Per Lord , L.C. in Earl of Darnley v. There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it. It is pointed out in Halsbury's Laws of England (4 d) Volume 16 in paragraph 1472 at page 994 that for a \"waiver to be effectual it is essential that the person granting it should be fully informed as to his rights\" and , J, delivering the judgment of in v. has also emphasised that waiver \"must be with knowledge, an essential supported by many authorities\". Now in the present case there is nothing to show that at the date when the appellant addressed the letter dated 25th June, 1970, it had full knowledge of its right to exemption under the assurance given by the 4th respondent and that it intentionally abandoned such right. It is difficult to speculate what was the reason why the appellant addressed the letter dated 25th June, 1970 stating that it would avail of the concessional rates of sales tax granted under the letter dated 20th January, 1970. It is possible that the appellant might have thought that since no notification exempting the appellant from sales tax had been issued by under section 4A, the appellant was legally not entitled to exemption and that is why the appellant might have chosen to accept whatever concession was being granted by . The claim of the appellant to exemption could be sustained only on the doctrine of promissory estoppel and this doctrine could not be said to be so well defined in its scope and ambit and so free from uncertainty in its application that we should be compelled to hold that the appellant must have had knowledge of its right to exemption on the basis of promissory estoppel at the time when it addressed the letter dated 25th June, 1970. In fact, in the petition as originally filed, the right to claim total exemption from sales tax was not based on the plea of promissory estoppel which was introduced only by way of amendment. Moreover, it must be remembered that there is no presumption that every person knows the law. It is often said that every one is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law. Over a hundred and thirty years ago, , J., pointed out in v. ): \"There is no presumption in this country that every person knows the law: it would be contrary to common sense and reason if it were so\". , also once said: \"It is impossible to know all the statutory law, and not very possible to know all the common law.\" But it was Lord who, as in so many other spheres, put the point in its proper context when he said in v. Bartlem(1)\"_____the fact is that there is not and never has been a presumption that every one knows the law. There is the rule that ignorance of the law does not excuse, a maxim of very different scope and application.\" It is, therefore, not possible to presume, in the absence of any material placed before the , that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June, 1970. We accordingly reject the plea of waiver raised on behalf of . ", "That takes us to the question whether the assurance given by the 4th respondent on behalf of that the appellant would be exempt from sales tax for a period of three years from the date of commencement of production could be enforced against by invoking the doctrine of promissory estoppel. Though the origin of the doctrine of promissory estoppel may be found in v. ) and v. ) authorities of old standing decided about a century ago by , it was only recently in 1947 that it was rediscovered by Mr. Justice , as he then was, in his celebrated judgment in v. ) This doctrine has been variously called 'promissory estoppel', 'equitable estoppel', 'quasi estoppel' and 'new estoppel'. It is a principle evolved by equity to avoid injustice and though commonly named 'promissory estoppel, it is, as we shall presently point out, neither in the realm of contract nor in the realm of estoppel. It is interesting to trace the evolution of this doctrine in England and to refer to some of the English decisions in order to appreciate the true scope and ambit of the doctrine particularly because it has been the subject of considerable recent development and is steadily expanding. The basis of this doctrine is the inter-position of equity. Equity has always, true to form, stepped into mitigate the rigours of strict law. The early cases did not speak of this doctrine as estoppel. They spoke of it as 'raising an equity'. Lord stated the doctrine in its earliest form-it has undergone considerable development since then-in the following words in v. (supra): ", "\"It is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results....afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.\" ", "This principle of equity laid down by Lord made sporadic appearances in stray cases now and then but it was only in 1947 that it was disinterred and restated as a recognised doctrine by Mr. Justice , as he then was, in the High Trees' case (supra). The facts in that case were as follows: The plaintiffs leased to the defendents, a subsidiary of the plaintiffs, in 1937 a block of flats for 99 years at a rent of & 2500/- a year. Early in 1940 and because of the war, the defendants were unable to find sub- tenants for the flats and unable in consequence to pay the rent. The plaintiffs agreed at the request of the defendants to reduce the rent to &. 1250/- from the beginning of the term. By the beginning of 1945 the conditions had improved and tenants had been found for all the flats and the plaintiffs, therefore, claimed the full rent of the premises from the middle of that year. The claim was allowed because the court took the view that the period for which the full rent was claimed fell out side the representation, but Mr. Justice , as he then was, considered whether the plaintiffs could have recovered the covenanted rent for the whole period of the lease and observed that in equity the plaintiffs could not have been allowed to act inconsistently with their promise on which the defendants had acted. It was pressed upon the that according to the well settled law as laid down in Jorden y. Money(1), no estoppel could be raised against plaintiffs since the doctrine of estoppel by representation is applicable only to representations as to some state of facts alleged to be at the time actually in existence and not to promises de futuro which, if binding at all, must be binding only as contracts and here there was no representa- ", "660 ", "tion of an existing state of facts by the plaintiffs but it was merely a promise or representation of intention to act in a particular manner in the future. Mr. Justice , however, pointed out: ", "\"The law has not been standing still since v. . There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made, and which was in fact so acted on. In such cases the courts have said that the promise must be honoured.\" ", "The principle formulated by Mr. Justice was, to quote his own words, \"that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply\". Now v. (supra) and v. (supra), the two decisions from which Mr. Justice drew inspiration for evolving this new equitable principle, were clearly cases where the principle was applied as between parties who were already bound contractually one to the other. In v. (supra) the plaintiff and the defendant were already bound in contract and the general principle stated by Lord , L.C. was: ", "\"If parties who have entered into definite and distinct terms involving certain legal results afterwards-enter upon a course of negotiations\". ", "Ten years later also used the same terminology in v. and (supra) that: ", "\"If persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe-----\". ", "These two decisions might, therefore, seem to suggest that the doctrine of promissory estoppel is limited in its operation to cases where the parties are already contractually bound and one of the parties induces the other to believe that the strict rights under the contract would not be enforced. But we do not think any such limitation can justifiably be introduced to curtail the width and amplitude of this doctrine. We fail to see why it should be necessary to the applicability of this doctrine that there should be some contractual relationship between the parties. In fact , pointed out in v. (1) : ", "\"Lord in his enunciation of the principle assumed a pre-existing contractual relationship between the parties, but this does not seem to me to be essential, provided that there is a pre-existing legal relationship which could in certain circumstances give rise to liabilities and penalties.\" ", "But even this limitation suggested by , ", "that there should be-a pre-existing legal relationship which could in certain circumstances give rise to liabilities and penalties is not warranted and it is significant that the statement of the doctrine by Mr. Justice in the High Trees' case does not contain any such limitation. The learned Judge has consistently refused to introduce any such limitation in the doctrine and while sitting in , he said in so many terms, in v. ) \"Counsel for the appellant referred us, however, to the second edition of book on Estoppel by Representation[(1966) pp. 340-342] by Sir , a judge of . He suggests the promissory estoppel is limited to cases where parties are already bound contractually one to the other. I do not think it is so limited : see v. It applies whenever a representation is made, whether of fact or law, present or future, which is intended to be binding, intended to induce a person to act on it and he does act on it.\" ", "This observation of Lord clearly suggest that the parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel takes its origin. The doctrine would seem to apply even where there is no pre-existing legal relationship between the parties, but the promise is intended to create legal relations or affect a legal relationship which will arise in future. of England, 4th ed. Vol. 16 p. 1018, Note 2 para 1514. Of course it must be pointed out in fairness to Lord that he made it clear in the High Trees' case that the doctrine of promissory estoppel cannot found a cause of action in itself, since it can never do away with the necessity of consideration in the formation of a contract, but he totally repudiated in 's case the necessity of a pre-existing relationship between the parties and pointed out in v. Arun District Council(1) that equity will in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights even where they arise, not under any contract, but on his own title deeds or under statue. The true principle of promissory estoppel, therefore seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any preexisting relationship between the parties or not. ", "It may be pointed out that in England the law has been well-settled for a long time, though there is some indication of a contrary trend to be found in recent juristic thinking in that country, that promissory estoppel cannot itself be the basis of an action. It cannot found a cause of action : it can only be a shield and not a sword. This narrow approach to a doctrine which is otherwise full of great potentialities is largely the result of an assumption, encouraged by it rather misleading nomenclature, that the doctrine is a branch of the law of estoppel. Since estoppel has always been traditionally a principle invoked by way of defence, the doctrine of promissory estoppel has also come to be identified as a measure of defence. The ghost of traditional estoppel continues to haunt this new doctrine and that is why we find that while boldly formulating and applying this new equity in the High Trees' case, Lord added a qualification that though in the circumstances set out, the promise would undoubtedly be held by the courts to be binding on the party making it, notwithstanding that under the old common law it might be difficult to find any consideration for it. \"the courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it\". Lord also pointed out in v. ", "663 ", "Combe(2) that \"Much as I am inclined to favour the principles stated in the High Trees' case, it is important that it should not be stretched too far, lest it should be endangered. That principle does not create new causes of action where none existed before. It only prevents a party from insisting upon his strict legal rights, when it would be unjust to allow him to enforce them, having regard to the dealings which have taken place between the parties......\" So also said , J., in the more recent case of v. ) \"The doctrine may afford a defence against the enforcement or otherwise of enforceable rights : it cannot create a cause of action.\" It is, however, necessary to make it clear that though this doctrine has been called in various judgments and text books as promissory estoppel and it has been variously described as `equitable estoppel', `quasi estoppel' and `new estoppel', it is not really based on the principle of estoppel, but it is a doctrine evolved by equity in order to prevent injustice where a promise is made by a person knowing that it would be acted on by the person to whom it is made and in fact it is so acted on and it is inequitable to allow the party making the promise to go back upon it. Lord himself observed in the High Trees' case, expressly making a distinction between ordinary estoppel and promissory estoppel that cases like the one before him were\" not cases of estoppel in the strict sense. They are really promises, promises intended to be binding, intended to be acted upon and in fact acted upon\". , C.J. also pointed out in (2) that the \"doctrine is often treated as one of estoppel but I doubt whether this is correct, though it may be a convenient name to apply\". The doctrine of promissory estoppel need not, therefore, be inhibited by the same limitation as estoppel in the strict sense of the term. It is an equitable principle evolved by the courts for doing justice and there is no reason why it should be given only a limited application by way of defence. ", "It may be noted that even Lord recognised in v. Arun Distric Council (supra) that \"there are estoppels and estoppels. Some do give rise to a cause of action. Some don't\" and added that \"in the species of estoppel called `proprietary estoppel', it does give rise to a cause of action\" The learned Law Lord, after quoting what he had said in v. Twitchings,(3) namely that the effect of estoppel on the true owner may be that : ", "664 ", "\"his own title to the property, be it land or goods, has been held to be limited or extinguished, and new rights and interests have been created therein. And this operates by reason of his conduct-what he has led the other to believe-even though he never intended it.\" ", "Proceeded to observe that \"the new rights and interests, so created by estoppel, in or over land, will be protected by the courts and in this way give rise to a cause of action\". in this case allowed a declaration of \"a right of access at point over the verge on to Mill Park Road and a right of way along that road to Hook Lane\" on the basis of an equity arising out of the conduct of . Of course, and , in their Treatise on `The Law Relating to Estoppel by Representation' have explained this decision on the basis that it is an instance of the application of the doctrine of estoppel by encouragement or acquiescence or what has now come to be known as proprietary estoppel which, according to the learned authors, forms an exception to the rule that estoppel cannot found a cause of action. But if we look at the judgments of Lord and , , it is apparent that they did not base their decision on any distinctive feature of proprietary estoppel but proceeded on the assumption that there was no distinction between promissory and proprietary estoppel so far as the problem before them was concerned. Both the learned Law Lord and the learned Lord Justice applied the principle of promissory estoppel in giving relief to . Lord , referring to what Lord had said in v. ,(1) a decision from which inspiration was drawn by him for evolving the doctrine of promissory estoppel in the High Tree's case, observed that \"- it is the first principle on which all courts of equity proceed......that it will prevent person from insisting on his strict legal rights-whether arising under a contract, or on his title deeds, or by statute-when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties\". The decision in the High Trees' case was also referred to the learned Law Lord and so also other cases supporting the doctrine of promissory estoppel. , also observed that in pursuing the inquiry as to whether there was an equity in favour of , he did not find helpful \"the distinction between promissory and proprietary estoppel\". He added that this \"distinction may indeed be valuable to those who have to teach or expound the law, but I do not think that, in solving the particular problem raised by a particular case, putting the law into categories is of the slightest assistance\". It does appear to us that this was a case deci- ", "665 ", "ded on the principle of promissory estoppel. The representative of clearly gave assurance to that they would give him access to the new road at point B to serve the southern portion of his land and in fact constructed a gate at point B, and in the belief induced by this representation that he would have right of access to the new road at point B, agreed to sell the northern portion of his land without reserving for himself as owner of the southern portion any right of way over the northern portion for the purpose of access to the new road. This was the reason why the Court raised an equity in favour of and held that the equity would be satisfied by giving \"the right of access at point B free of charge without paying anything for it\". was held bound by its promise to provide access to the new road at point B and this promise was enforced against at the instance of . The case was one which fell within the category of promissory estoppel and it may be regarded as supporting the view that promissory estoppel can be the basis of a cause of action. It is possible that the case also came within the rule of proprietary estoppel enunciated by Lord in v. Dyson(1) : ", "\"The rule of law applicable to the case appears to me to be this : If a man, under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation, created or encouraged by the landlord that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the land lord, and without objection by him, lays out money upon the land, will compel the landlord to give effect to such promise or expectation.\" ", "and and may be right in observing that that was perhaps the reason why it was held that the promise made by Arun District Council gave rise to a cause of action in favour of . But, on what principle, one may ask, is the distinction to be sustained between promissory estoppel and proprietary estoppel in the matter of enforcement by action. If proprietary estoppel can furnish a cause of action, why should promissory estoppel not ? There is no qualitative difference between the two. Both are the off- springs of equity and if equity is flexible enough to permit proprietary estoppel to be used as a cause of action, there is no reason in logic or principle why promissory estoppel should also not be available as a cause of action, if necessary to satisfy the equity. ", "666 ", "But perhaps the main reason why have been reluctant to allow promissory estoppel to found a cause of action seems to be the apprehension that the doctrine of consideration would other wise be completely displaced. There can be no doubt that the decision of Lord in the High Trees' case represented a bold attempt to escape from the limitation imposed by in v. (supra) and it rediscovered an equity which was long embedded beneath the crust of the old decisions in v. (supra) and v. (supra), and brought about a remarkable development in the law with a view to ensuring its approximation with justice, an ideal for which the law has been constantly striving. But it is interesting to note the Lord was not prepared to go further, as he thought that having regard to the doctrine of consideration which was so deeply entrenched in the jurisprudence of the country, it might be unwise to extend promissory estoppel so as to found a cause of action and that is why he uttered a word of caution in v. (supra) that the principle of promissory estoppel \"should not be stretched too far, lest it should be endangered\". The learned Law Lord proceeded to add \"seeing that the principle never stands alone as giving a cause of action in itself, it can never do away with the necessity of consideration when that is an essential part of the cause of action. The doctrine of consideration is too firmly fixed to be overthrown by a side wind.\" and also point out at page 384 of their Treatise (3rd ed) that it is difficult to see how in a case of promissory estoppel a promise can be used to found a cause of action without according to it operative contractual force and it is for this reason that \"a contention that a promissory estoppel may be used to found a cause of action must be regarded as an attack on the doctrine of consideration.\" The learned authors have also observed at page 387 that \"to give a plaintiff a cause of action on a promissory estoppel must be little less than to allow an action in contract where consideration is not shown\" and that cannot be done because consideration \"still remains a cardinal necessity of the formation of a contract.\" It can hardly be disputed that over the last three or four centuries the doctrine of consideration has come to occupy such a predominant position in the law of contract that under the English law it is impossible to think of a contract without consideration and, therefore, it is understandable that the English courts should have hesitated to push the doctrine of promissory estoppel to its logical conclusion and stopped short at allowing it to be used merely as a weapon of defence, though, as we shall point out, there are, quite a few cases where this doctrine has been used not as founding a cause of action in itself but as a part of a cause of a action. ", "The modern attitude towards the doctrine of consideration is, however, changing fast and there is considerable body of juristic thought which believes that this doctrine is \"something of an anchronism\". Prof. pointed out long ago in his History of English Law that \"the requirements of consideration in its present shape prevent the enforcement of many contracts, which ought to be enforced, if the law really wishes to give effect to the lawful intentions of the parties to them; and it would prevent the enforcement of many others, if the judges had not used their ingenuity to invest considerations. But the invention of considerations, by reasoning which is both devious and technical, adds to the difficulties of the doctrine\". Lord remarked in an article published in 49 , 1225 that the doctrine of consideration in its present form serves no practical purpose and ought to be abolished. Sir also said in his well known work of `Ganius of Common Law', p. 91 that the application of the doctrine of consideration\" to various unusual but not unknown cases has been made subtle and obscured by excessive dialectic refinement\". Equally strong is the condemnation of this doctrine in judicial pronouncements. Lord observed in the well known case of v. ) \"I confess that this case is to my mind apt to nip any budding affection which one might have had for the doctrine of consideration. For the effect of that doctrine in the present case is to make it possible for a person to snap his fingers at a bargain deliberately made, a bargain not in itself unfair, and which the person seeking to enforce it has a legitimate interest to enforce.\" The doctrine of consideration has also received severe criticism at the hands of in the United States. The reason is that promise as a social and economic institution becomes of the first importance in a commercial and industrial society and it is an expression of the moral sentiment of a civilised society that a man's word should be `as good as his bond' and his fellow-men should be able to rely on the one equally with the other. That is why the in England in its Sixth Report made as far back as 1937 accepted Prof. 's view and advocated that a contract should exist if it was intended to create or affect legal relations and either consideration was present or the contract was reduced to writing. This recommendation, however, did not fructify into law with the result that the present position remains what it was. But having regard to the general opprobrium to which the doctrine of consideration has been subjected by eminent jurists, we need not be unduly anxious to project this doctrine against assault or erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice. It may be pointed out that in its 13th Report adopted the same approach and recommended that, by way of exception to section 25 of the Indian Contract Act, 1925, a promise, express or implied, which the promisor knows or reasonably should know, will be relied upon by the promisee, should be enforceable, if the promisee has altered his position to his detriment in reliance on the promise. We do not see any valid reason why promissory estoppel should not be allowed to found a cause of action where, in order to satisfy the equity, it is necessary to do so. ", "We may point out that even in England where the judges apprehending that if a cause of action is allowed to be founded on promissory estoppel it would considerably erode, if not completely overthrow, the doctrine of consideration, have been fearful to allow promissory estoppel to be used as a weapon of offence, it is interesting to find that promissory estoppel has not been confined to a purely defensive role. Lord Denning himself said in v. (supra) that promissory estoppel \"may be a part of a cause of action\", though \"not a cause of action itself\". In fact there have been several cases where promissory estoppel has been successfully invoked by a party to support his cause of action, without actually founding his cause of action exclusively upon it. Two such cases are : v. Minister of Pensions(1) and v. ) The English courts have thus gone a step forward from the original position when promissory estoppel was regarded merely as a passive equity and allowed it to be used as a weapon of offence to a limited extent as a part of the cause of action, but still the doctrine of consideration continues to inhibit the judicial mind and that has thwarted the full development of this new equitable principle and the realisation of its vast potential as a juristic technique for doing justice. It is true that to allow promissory estoppel to found a cause of action would seriously dilute the principle which requires consideration to support a contractual obligation, but that is no reason why this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters and not allowed to operate in all the activist magnitude, so that it may fulfil the purpose for which it was conceived and born. It must be remembered that law is not a mausoleum. It is not an antique to be taken down, dusted, admired and put back on the shelf. It is rather like an old vigorous tree, having its roots in history, yet continuously taking new grafts and putting out new sprouts and occasionally dropping dead wood. It is essentially a social process, the end product of which is justice and hence it must keep on growing and developing with changing social concepts and values. Otherwise, there will be estrangement between law and justice and law will cease to have legitimacy. It is true as pointed out by Mr. Justice , that continuity with the past is a historical necessity but it must also be remembered at the same time, as pointed out by Mr. Justice that \"conformity is not to be turned into a \"fetish\". We would do well to recall the famous words uttered by Mr. Justice while closing his first lecture on \"Paradoxes of Legal Science\"; ", "\"The disparity between precedent and ethos may so lengthen with the years that only covin and chicenery would be disappointed if the separation were to end. There are many intermediate stages, mores, if inadequate to obliterate the past, may fix direction for the future. The evil precedent may live, but so sterilized and truncated as to have small capacity for harm. It will be prudently ignored when invoked as an apposite analogy in novel situations, though the novel element be small. There will be brought forward other analogies, less precise, it may be, but more apposite to the needs of morals. The weights are constantly shifted to restore the equilibrium between precedent and justice.\" ", "Was it not Lord who exhorted judges not to be timorous sours but to be bold spirits, ready to allow a new cause of action if justice so required. ( v. ) We may profitably consider at this stage what the American law on the subject is because in the United States the law has always shown a greater capacity for adjustment and growth than elsewhere. The doctrine of promissory estoppel has displayed remarkable vigour and vitality in the hands of American Judges and it is still rapidly developing and expanding in the United States. It may be pointed out that this development does not derive its origin in any way from the decision of Lord in the High Trees' case but ante-dates this decision by a number of years; perhaps it is possible that it may have helped to inspire that decision. It was long before the decision in the High Trees'case that Restatement of the Law of Contract's came out with the following proposition in Article 90 : ", "670 ", "\"A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise.\" ", "This proposition was explained and elucidated by several illustrations given in the article and one of such illustrations was as follows : ", "\"A promises to pay him an annuity during 's life. thereupon resigns a profitable employment, as A expected that he might. receives the annuity for some years, in the meantime becoming disqualified from again obtaining good employment. A's promise is binding.\" ", "It is true that the Restatement has not the same weight, as a source of law, as actual decisions of courts of high standing, yet the principle set out in Article 90 has in fact formed the basis of a number of decisions in various states and it is now becoming increasingly clear that a promise may in the United States derive contractual enforceability if it has been made by the promisor intending that it would be acted on and the promisee has altered his position in reliance on it, notwithstanding that there is no consideration in the sense in which that word is used in English and Commonwealth jurisprudence. Of course the basic requirement for invoking this principle must be present namely, that the fact situation should be such that \"injustice can be avoided only by enforcement of the promise\". There are numerous examples of the application of this principle to be found in recent American decisions. There is, for instance, the long line of cases in which a promise to give a charitable subscription has been consistently held to be enforceable at the suit of the charity. Though attempts have been made to justify these decisions by reasoning that the charity by commencing or continuing its charitable work after receiving promise has given good consideration for it, we do not think that, on closer scrutiny, the enforceability of the promise in these cases can be supported by spelling out the presence of some form of consideration and the true principle on which they are really based is the principle of promissory estoppel. This is also the view expressed in the following statement at page 657 of vol. 19 of American Jurisprudence : ", "\"A number of courts have upheld the validity of charitable subscriptions on the theory of promissory estoppel holding that while a mere promise to contribute is unenforceable for want of consideration, if money has been expended or liabilities have been incurred in reliance on the promise so that non fulfillment will cause injury to the payee, the donor is estopped to assert the lack of consideration, and the promise will be enforced.\" ", "Chief Justice , presiding over of the State of New York, explained the ratio of these decisions in the same terms in v. ): ", "\"The half-truths of one generation tend at times to perpetuate themselves in the law as the whole truths of another, when constant repetition brings it about that qualifications, taken once for granted, are disregarded or forgotten. The doctrine of consideration has not escaped the common lot. As far back as 1881, Judge in his lectures on the Common Law (p. 292) separated the detriment which is merely a consequence of the promise from the detriment, which is in truth the motive or inducement, and yet added that the courts 'have gone far in obliterating this distinction'. The tendency toward effacement has not lessened with the years. On the contrary there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled a 'promissory estoppel'. Williston, Contract, Ss. 139, 116. Whether the exception has made its way in this State to such an extent as to permit us to say that the general law of consideration has been modified accordingly, we do not now attempt to say. Cases such as 234 N.Y. 479 and 221 N.Y. 431-may be signposts on the road. Certain at least it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions. So long as those decisions stand, the question is not merely whether the enforcement of a charitable subscription can be squared with the doctrine of consideration in all its ancient rigor. The question may also be whether it can be squared with the doctrine of consideration as qualified by the doctrine of promissory estoppel\". ", "We have said that the cases in this State have recognized this exception, if exception it is thought to be. Thus, in 12 N.Y. 18 the subscription was made without request, express or implied that the church do anything on the faith of it. Later, the church did incur expense to the knowledge of the promisor, and in the reasonable belief that the promise would be kept. We held the promise binding, though consideration there was none except upon the theory of a promissory estoppel. In 74 N.Y. 72 a situation substantially the same became the basis for a like ruling. So in 103 N.Y. 600 and (1901) 167 N.Y. 96 the moulds of consideration as fixed by the old doctrine were subject to a like expansion. Very likely, conceptions of public policy have shaped, more or less subconsciously, the rulings thus made. Judges have been affected by the thought that 'defences of that character' are 'breaches of faith towards the public, and especially towards those engaged in the same enterprise, and an unwarrantable disappointment of the reasonable expectations of those interested'. in 12 N.Y. 18 and of 97 Vt. 495 and cases there cited. The result speaks for itself irrespective of the motive. Decisions which have stood so long, and which are supported by so many considerations of public policy and reason, will not be over-ruled to save the symmetry of a concept which itself came into our law, not so much from any reasoned conviction of its justice, as from historical accidents of practice and procedure. (8 , History of English Law, 7 et. seq). The concept survives as one of the distinctive features of our legal system. We have no thought to suggest that it is obsolete or on the way to be abandoned. As in the case of other concepts, however, the pressure of exceptions has led to irregularities of form.\" ", "It is also interesting to note that the doctrine of promissory estoppel has been widely used in the United States in diverse other situations as founding a cause of action. The most notable instances are to be found in what may be called the \"sub-contractor bid cases\" in which a contractor about to tender for a contract, invites a sub- contractor to submit a bid for a sub-contract and after receiving his bid the contractor submits a tender. In such cases, the sub-contractor has been held unable to retract his bid and be liable in damages if he does so. It is not possible to say that any detriment which the contractor may be able to show in these cases would amount to consideration in its strict sense and these decisions have plainly been reached on an application of the doctrine of promissory estoppel. One of such cases was v. ) where explicitly adopted as good law the text of Article 90 of the Restatement of the law of Contracts quoted above and stated in so many words that \"the absence of consideration is not fatal to the enforcement of such a promise\". There are also numerous cases where the doctrine of promissory estoppel has been applied against the Government where the interest of justice, morality and common fairness clearly dictated such a course. We shall refer to these cases when we discuss the applicability of the doctrine of equitable estoppel against the Government. Suffice it to state for the present that the doctrine of promissory estoppel has been taken much further in the United States than in English and Commonwealth jurisdictions and in some States at least, it has been used to reduce, if not to destroy, the prestige of consideration as an essential of valid contract. and (2d) page 358. ", "We now go on to consider whether and if so to what extent is the doctrine of promissory estoppel applicable against the Government. So far as the law in English is concerned, the position cannot be said to be very clear. , in an early decision in v. The King(1) held that an undertaking given by to certain neutral ship owners during the First World War that if the shipowners sent a particular ship to the United Kingdom with a specified cargo, she shall not be detained, was not enforceable against in a court of law and observed that his main reason for taking this view was that: ", "\"--it is not competent for the to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises. It cannot by contract hamper its freedom of action in matters which concern the welfare of the .\" ", "This observation has however not been regarded by jurists as laying down the correct law on the subject since it is \"very wide and it is difficult to determine its proper scope\". Anson's English Law of Contract, 22d. 174. The doctrine of executive necessity propounded by , J., was in fact disapproved by , J., as he then was, in v. Minister of Pensions (supra) where the learned Judge said: ", "The cannot escape by saying that estoppels do not bind the for that doctrine has long been exploded. Nor can the escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the cannot bind itself so as to fetter its future executive action. That doctrine was propounded by , J., in v. The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention. , J., seems to have been influenced by the cases on the right of the to dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord in -(1954) A.C. 176, 176).-In my opinion the defence of executive necessity is of limited scope. It only avails the where there is an implied term to that effect or that is the true meaning of the contract.\" ", "It is true that the decision of , in this case was overruled by in v. (1) but that was on the ground that the doctrine of promissory estoppel cannot be invoked to \"bar the from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it\". The decision of did not express any disapproval of the applicability of the doctrine of promissory estoppel against the nor did it overrule the view taken by , that the cannot escape its obligation under the doctrine of promissory estoppel by \"praying in aid the doctrine of executive necessity.\" The statement of the law by , J., may, therefore, still be regarded as holding the field and it may be taken to be a judicially favoured view that the is not immune from liability under the doctrine of promissory estoppel. ", "The courts in America for a long time took the view that the doctrine of promissory estoppel does not apply to the but more recently the courts have started retreating from that position to a sounder one, namely, that the doctrine of promissory estoppel may apply to the when justice so requires. The second edition of American Jurisprudence brought out in 1966 in paragraph 123 points out that \"equitable estoppel will be invoked against the when justified by the facts\", though it does warn that this doctrine \"should not be lightly invoked against the .\" Later in the same paragraph it is stated that \"as a general rule, the doctrine of estoppel will not be applied against the in its governmental, public or sovereign capacity\", but a qualification is introduced that promissory estoppel may be applied against the even in its governmental, public or sovereign capacity if \"its application is necessary to prevent fraud or manifest injustice\". Since 1966 there is an increasing trend towards applying the doctrine of promissory estoppel against the and the old law that promissory estoppel does not apply against the government is definitely declining. There have been numerous cases in the courts where it has been held that promissory estoppel may be applied even against the Govern- ", " ", "ment in its governmental capacity where the accommodation of the needs of justice to the needs of effective government so requires. ", "The protagonists of the view that promissory estoppel cannot apply against the or a public authority seek to draw inspiration from the majority decision of in v. Merrill.(1) But we do not think that decision can be read as laying down the proposition that the doctrine of promissory estoppel can never be invoked against the . There acting as the agent of the which was a wholly -owned corporation constituted under the Federal Crop Insurance Act, advised the respondents that their entire 460 acres of spring wheat crop which included spring wheat reseeded. On winter wheat acreage was insurable and acting upon it, the respondents made an application for insurance which was forwarded by to the Denver office of the with a recommendation for acceptance. The application did not mention that any part of the insured crop was reseeded and it was accepted by the Denver office of the . There were at this time wheat crop insurance regulations framed by the and published in which prohibited insurance of spring wheat reseeded on winter wheat acreage but neither the respondents nor s which was acting as the agent of the was aware of them. A few months later, most of the respondent's crop was destroyed by drought and on a claim being made by the respondents under the policy of insurance, the refused to pay the loss on the ground that the wheat crop insurance regulations expressly prohibited insurance of reseeded wheat. The refusal was upheld by by a majority of five to four. The majority observed: ", "\"It is too late in the day to urge that the Government is just another private litigant, for purposes of charging it with liability, whenever it takes over a business theretofore conducted by private enterprises or engages in competitions with private ventures. Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that be who purports to act for the Government stays within the bounds of his authority And this is so even though as here, the agent himself may have been unaware of the limitations upon his autho- ", "676 ", "rity.-\"Man must turn square corners when they deal with the Government\", does not reflect a callous outlook. It merely expresses the duty of all courts to observe the conditions defined by for charging the public treasury.\" ", "It will be seen that the was held entitled to repudiate its liability because the wheat crop insurance regulations prohibited insurance of reseeded wheat and the assurance given by as the agent of the that the reseeded wheat was insurable being contrary to the wheat crop insurance regulations, could not be held binding on the . It was not within the authority of to give such assurance contrary to the wheat crop insurance regulations and hence no promissory estoppel against the could be founded upon it. This decision did not say that even if an assurance given by an agent is within the scope of his authority and is not prohibited by law, it could still not create promissory estoppel against the Government. But, it may be pointed out, even this limited holding has come in for considerable criticism at the hands of jurists in the United States. See on Administrative Law (3rd d.) pages 344-345. Referring to the observation of the majority that \"Men must turn square corners when they deal with the Government\", and have poetically responded by saying: \"It is hard to see why the Government should not be held to a like standard of rectangular rectitude when dealing with its citizens.\" ( and , Hobson's Choice and Similar Practices in Federal Taxation, 48 Harv. L. Rev. 1287 at 1299). ", "There has so far not been any decision of of the United s taking the view that the doctrine of promissory estoppel cannot be invoked against the . The trend in the courts, of late, has been strongly in favour of the application of the doctrine of promissory estoppel against the and public bodies \"where interests of justice, morality and common fairness clearly dictate that course.\" It is being increasingly felt that \"that the ought to set a high standard in its dealings and relationships with citizens and the word of a duly authorised agent, acting within the scope of his authority ought to be as good as a bond\". Of course, as pointed out by the United s Court of Appeals, in v. United s, (1) the would not be estopped \"by the acts of its officers and agents who without authority enter into agreements to do what the law does not sanction or permit\" and \"those dealing with an agent of the must be held to have notice of limitations of his authority\" as held in 's case. This is precisely what also held in England in v. (supra) where Lord stated the law to be: ", "\"The illegality of an act is the same whether or not the actor has been misled by an assumption of authority on the part of a officer however high or low in the hierachy. The question is whether the character of an act done in face of a statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority. In my opinion the answer is clearly no.\" ", "But if the acts or omissions of the officers of the are within the scope of their authority and are not otherwise impermissible under the law, they \"will work estoppel against the .\" ", "When we turn to the Indian law on the subject it is heartening to find that in India not only has the doctrine of promissory estoppel been adopted in its fullness but it has been recognized as affording a cause of action to the person to whom the promise is made. The requirement of consideration has not been allowed to stand in the way of enforcement of such promise. The doctrine of promissory estoppel has also been applied against the Government and the defence based on executive necessity has been categorically negatived. It is remarkable that as far back as 1880, long before the doctrine of promissory estoppel was formulated by , J., in England, A Division Bench of two English Judges in applied the doctrine of promissory estoppel and recognised a cause of action founded upon it in v. and other(1). The doctrine of promissory estoppel was also applied against the Government in a case subsequently decided by in .(2) The facts of this last-mentioned case in (supra) are a little interesting and it would be profitable to refer to them. The Government of Bombay, with a view to constructing an arterial road, requested to remove certain fish and vegetable markets which obstructed the construction of the proposed road. The Municipal Commissioner replied that the markets were vested in but that he was willing to vacate certain municipal stables which occupied a portion of the proposed site if the Government would rent other land mentioned in his letter, to the at a nominal rent, the undertaking to bear the expenses of levelling the same and permit the to erect on such land \"stables of wood and iron with nobble foundation to be removed at six months' notice on other suitable ground being provided by Government\". The Government accepted the suggestion of and sanctioned the application of for a site for stabling on the terms set out above and thereafter entered into possession of the land and constructed stables, workshops and chawls on the same at considerable expense. Twenty-four years later the Government served a notice on determining the tenancy and requesting to deliver possession of the land within six months and in the mean time to pay rent at the rate of Rs.12,000/- per month. declined to hand over possession of the land or to pay the higher rent and the Secretary of State for India thereupon filed a suit against for a declaration that the tenancy of the stood determined and for an order directing the municipality to pay rent at the rate of Rs. 12,000/- per month. The suit was resisted by on the ground then the events which had transpired had created an equity in favour of the which afforded an answer to the claim of the Government to eject the . This defence was upheld by of and , speaking on behalf of , pointed out that, in view of the following facts, namely: ", "\"-the gave up the old stables, levelled the ground, and erected the moveable staibles in 1866 in the belief that they had against the Government an absolute right not to be turned out until not only the expiration of six months notice, but also other suitable ground was furnished: that this belief is referable to an expectation created by the Government that their enjoyment of the land would be in accordance with this belief: and that the Government knew that the were acting in this belief so created:\" ", "679 ", "an equity was created in favour of the Municipality which entitled it \"to appeal to the Court for its aid in assisting them to resist the Secretary of State's claim that they shall be ejected from the ground\". The learned Chief Justice pointed out that the doctrine which he was applying took its origin \"from the jurisdiction assumed by Courts of Equity to intervene in the case of or to prevent fraud\" and after referring to v. Dyson(1) observed that the also came within the range of this equity. This decision of is a clear authority for the proposition that it is open to a party who has acted on a representation made by the to claim that the shall be bound to carry out the promise made by it, even though the promise is not recorded in the form of a formal contract as required by the Constitution. That is how this decision has in fact been interpreted by this court in :(2) We don't find any decision of importance thereafter on the subject of promissory estoppel until we come to the decision of this Court in .(3). The facts giving rise to this case were that in 1865 called upon the predecessor in title of to remove old markets from a certain site and vacate it and on the application of the Municipal Commissioner, the passed a resolution approving and authorizing the grant of another site to the Municipality. The resolution stated further that \"the do not consider that any rent should be charged to the Municipality as the markets will be like other public buildings, for the benefit of the whole community\". gave up the site on which the old markets were situated and spent a sum of Rs. 17 lakhs in erecting and maintaining markets on the new site. In 1940 the Collector of Bombay assessed the new site to land revenue and there upon filed a suit for a declaration that the order of assessment was ultra vires and it was entitled to hold the land for ever without payment of any assessment. held that the had lost its right to assess the land in question by reason of the equity arising on the facts of the case in favour of and there was thus a limitation on the right of the to assess under section 8 of the Bom bay City Land Revenue Act. On appeal by the Collector to this Court, the majority Judges held that the was not, under the circumstances of the case, entitled to assess land revenue on the land in question because had taken possession of the land in terms of the resolution and had continued in such possession openly, uninterruptedly and of right for over seventy years and thereby acquired the limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent. , J., agreed with the conclusion reached by the majority but rested his decision on the doctrine of promissory estoppel. He pointed out that the could not be allowed to go back on the representation made by it and stressed the point in the form of an interrogation by asking: \"if we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal fraud which a court of equity must prevent being committed?\" He observed that even if the resolution of the amounted merely to \"the holding out of a promise that no rent will be charged in the future, the must be deemed in the circumstances of this case to have bound themselves to fulfil it. Whether it is the equity recognised in 's case (supra) or it is some other form of equity, is not of much importance. Courts must do justice by the promotion of honesty and good faith, as far as it lies in their power.\" This was of course the solitary view of , J., but it was approved by this Court in no uncertain terms in Indo-Afghan Agencies case (supra). ", "Then we come to the celebrated decision of this in the case (supra). It was in this case that the doctrine of promissory estoppel found its most eloquent exposition. We may briefly state the facts in order to appreciate the ratio of the decision. Ltd. who were the respondents before the , acting in reliance on the Export Promotion Scheme issued by , exported woollen goods to Afghanistan and on the basis of their exports claimed to be entitled to obtain from import entitlement certificate for the full F.O.B. value of the goods exported as provided in the scheme. The Scheme was not a statutory Scheme having the force of law but it provided that an export of woollen goods would be entitled to import raw-material of the total amount equal to 100% of the F.O.B. value of his exports. The respondents contended that, relying on the promise contained in the Scheme, they had exported woollen goods to Afghanistan and were,. therefore, entitled to enforce the promise against the Government and to obtain import entitlement certificate for the full F.O.B. value of the goods exported on the principle of promissory estoppel. This contention was sought to be answered on behalf of the Government by pleading the doctrine of executive necessity and the argument of the Government based on this doctrine was that it is not competent for the Government to fetter its future executive action which must necessarily be determined by the needs of the community when the question arises and no promise or undertaking can be held to be binding on the Government so as to hamper its freedom of executive action. Certain observations of , J., in v. The King (supra) were sought to be pressed into service on behalf of the Government in support of this argument. We have already referred to these observations earlier and we need not reproduce them over again. These observation undoubtedly supported the contention of the Government but it was pointed out by this that these observations were disapproved by , in v. Minister of Pensions (supra) where the learned Judge said that \"the cannot escape by praying in aid the doctrine of executive necessity, that is the doctrine that the cannot bind itself so as to fetter its future executive action.The defence of executive necessity is of limited scope. It only avails the where there is an implied term to that effect or that is the true meaning of the contract\" and this statement of , J., was to be preferred as laying down the correct law of the subject. , J., speaking on behalf of the , observed at p. 376: ", "\"We are unable to accede to the contention that the executive necessity releases the from honouring its solemn promises relying on which citizens have acted to their detriment. Under our constitutional set-up no person may be deprived of his right or liberty except in due course of and by authority of law; of a member of the seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law-common or statute-the will be competent to and indeed would be bound to, protect the rights of the aggrieved citizen.\" ", "The defence of executive necessity was thus clearly negatived by this Court and it was pointed out that it did not release the Government from its obligation to honour the promise made by it, if the citizen, acting in reliance on the promise, had altered his position. The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be deteated by invoking the defence of executive necessity. ", "682 ", "It was also contended on behalf of the Government that if the Government were held bound by every representation made by it regarding its intention, when the exporters have acted in the manner they were invited to act, the result would be that the Government would be bound by a contractual obligation even though no formal contract in the manner required by Article 299 was executed. But this contention was negatived and it was pointed out by this Court that the respondents \"are not seeking to enforce any contractual right: they are seeking to enforce compliance with the obligation which is laid upon the Textile Commissioner by the terms of the Scheme, and we are of the view that even if the Scheme is executive in character, the respondents who were aggrieved because of the failure to carry out the terms of the Scheme were entitled to seek resort to the Court and claim that the obligation imposed upon the Textile Commissioner by the Scheme be ordered to be carried out\". It was thus laid down that a party who has, acting in reliance on a promise made by the Government, altered his position, is entitled to enforce the promise against the Government, even though the promise is not in the form of a formal contract as required by Article 299 and that Article does not militate against the applicability of the doctrine of promissory estoppel against the Government. ", "This Court finally, after referring to the decision in v. (supra). for India (supra) and . (supra), summed up the position as follows: ", "\"Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen.\" ", "The law may, therefore, now be taken to be settled as a result of this decision that where the makes a promise knowing or intending that it would be acted on by the promises and, in fact, the promisee, acting in reliance on it, alters his position, the would be held bound by the promise and the promise would be enforceable against the at the instance of the promises, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. It is elementary that in a Republic governed by the rule of law, no one, howsoever high or low, is above the law. Every one is subject to the law as fully and completely as any other and the is no exception. It is indeed the pride of constitutional democracy and rule of law that the stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a , committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of \"honesty and good faith\"? Why should the not be held to a high \"standard of rectangular rectitude while dealing with its citizens\"? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the to repudiate even its contractual obligations, but let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Indo-Afghan Agencies case and the supremacy of the rule of law was established. It was laid down by this Court that the cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the does not want its freedom of executive action to be hampered or restricted, the need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But if the makes such a promise and the promises acts in reliance upon it and alters his position, there is no reason why the should not be compelled to make good such promise like any other private individual. The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavor of the and the legislatures must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction. ", "But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the that having regard to the facts as they have transpired, it would be inequitable to hold the to the promise made by it, the would not raise an equity in favour of the promisee and enforce the promise against the . The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the should be held bound by the promise made by it. When the is able to show that in view of the facts as have transpired, public interest would be prejudiced if the were required to carry out the promise, the would have to balance the public interest in the carrying out a promise made to a citizen which has induced the citizen to act upon it and after this position and the public interest likely to suffer if the promise were required to be carried out by the and determine which way the equity lies. It would not be enough for the just to say that public interest requires that the should not be compelled to carry out the promise or that the public interest would suffer if the were required to honour it. The cannot, as , , pointed out in the Indo-Afghan Agencies case, claim to be exempt from the liability to carry out the promise \"on some indefinite and undisclosed ground of necessity or expediency\", nor can the claim to be the sole judge of its liability and repudiate it \"on an ex-parte appraisement of the circumstances\". If the wants to resist the liability, it will have to disclose to the what are the facts and circumstances on account of which the claims to be exempt from the liability and it would be for the to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the . Mere claim of change of policy would not be sufficient to exonerate the from the liability: the would have to show what precisely is the changed policy and also its reason and justification so that the can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the is satisfied, on proper and adequate material placed by the , the over-riding public interest requires that the should not be held bound by the promise but should be free to act unfettered by it, that the would refuse to enforce the promise against the . The would not act on the mere ipse dixit of the , for it is the which has to decide and not the whether the should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the to show that the public interest in the acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the bound by the promise and the would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such over-riding public interest, it may still be competent to the to resile from the promise \"on giving reasonable notice which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position\" provided of course it is possible for the promisee to restore status quo ante. If however, the promisee cannot resume his position, the promise would become final and irrevocable. v. Briscoe.(1) The doctrine of promissory estoppel was also held applicable against a public authority like in .(2) The question which arose in this case was whether could be compelled to carry out a promise made by its predecessor municipality that the factories in the industrial area within its jurisdiction would be exempt from payment of octroi for seven years from the date of the levy. The appellant company, in the belief induced by the assurance and undertaking given by the predecessor municipality that its factory would be exempt from octroi for a period of seven years, expanded its activities, but when the municipal council came into being and took over the administration of the former municipality, it sight to levy octroi duty on appellant-company. The appellant company thereupon filed a writ petition under Article 226 of the Constitution in the High of Bombay to restrain the municipal council from enforcing the levy of octroi duty in breach of the promise made by the predecessor municipality. The High dismissed the petition in limine but, on appeal, this took the view that this was a case which required consideration and should have been admitted by the High . , , speaking on behalf of the , pointed out \"Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contracted by a person who acts upon the promise: when the law requires that a contract enforceable at law against a public body shall be in certain from or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity.\" The learned Judge then referred to the decision in the Indo Afghan Agencies case and observed that in that case it was laid down by this that \"the is not exempt from the equity arising out of the acts done by citizens to their prejudice relying upon the representations as to its future conduct made by the \". It was also pointed out by the learned Judge that in the Indo-Afghan Agencies case this approved of the observations made by Denning, in v. Minister of Pensions (supra) rejecting the doctrine of executive necessity and held them to be applicable in India. The learned Judge concluded by saying in words pregnant in the hope and meaning for democracy: ", "\"If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice.\" ", "This Court refused to make a distinction between a private individual and a public body so far as the doctrine of promissory estoppel is concerned. ", "We then come to another important decision of this in . (1) where the doctrine of promissory estoppel was once again affirmed by this . , J, speaking on behalf of the , pointed out: \"Estoppel\" is a rule of equity. \"That rule has gained new dimensions in recent years. A new class of estoppel i.e. promissory estoppel has come to be recognised by the courts in this Country as well as in England. The full implication of 'promissory estoppel' is yet to be spelled out.\" The learned Judge, after referring to the decisions in case, v. Minister of Pensions (supra) and the Indo-Afghan Agencies case, pointed out that \"the rule laid down in these decisions undoubtedly advanced the cause of justice and hence we have no hesitation in accepting it. ", "We must also refer to the decision of this in .(1) because that was a decision strongly relied upon on behalf of the for negativing the applicability of the doctrine of estoppel against the . This was a case where the appellant was appointed to a temporary post and on the post being abolished, the service of the appellant was terminated. The appellant challenged the validity of termination of service, inter alia, on the ground that the was precluded from abolishing the post and terminating the service on the principle of promissory estoppel. This ground based on the doctrine of promissory estoppel was negatived and it was pointed out by the that the appellant knew that the post was temporary, suggesting clearly that the appellant could not possibly be led into the belief that the post would not be abolished. If the post was temporary to the knowledge of the appellant, it is obvious that the appellant knew that the post would be liable to be abolished at any time and if that be so, there could be no factual basis for invoking the doctrine of promissory estoppel for the purpose of precluding the from abolishing the post. This view taken by the was sufficient to dispose of the contention based on promissory estoppel and it was not necessary to say anything more about it, but the proceeded to cite a passage from American Jurisprudence, Vol. 28 (2d) at 783, paragraph 123 and observed that the High rightly held \"that the courts exclude the operation of the doctrine of estoppel, when it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate.\" It was this observation which was heavily relied upon on behalf of the but we fail to see how it can assist the contention of the . In the first place, this observation was clearly obiter, since, as pointed out by us, there was on the facts of the present case no scope for the applicability of the doctrine of promissory estoppel. Secondly, this observation was based upon a quotation from the passage in paragraph 123 at page 783 of Volume 28 of American Jurisprudence (2 d), but unfortunately this quotation was incomplete and it overlooked, perhaps inadvertently, the following two important sentences at the commencement of the paragraph which clearly show that even in the United s the doctrine of promissory estoppel is applied against the \"when justified by the facts\": ", "\"There is considerable dispute as to the application of estoppel with respect to the . While it is said that equitable estoppel will be invoked against the when justified by the facts, clearly the doctrine of estoppel should not be lightly invoked against the \" (emphasis supplied). ", "Even the truncated passage quoted by the recognised in the last sentence that though, as a general rule, the doctrine of promissory estoppel would not be applied against the in its governmental, public or sovereign capacity, the would unhesitatingly allow the doctrine to be invoked in cases where it is necessary in order \"to prevent fraud or manifest injustice\". This passage leaves no doubt that the doctrine of promissory estoppel may be applied against the even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. It is difficult to imagine that the citing this passage with approval could have possibly intended to lay down that in no case can the doctrine of promissory estoppel be invoked against the . Lastly, a proper reading of the observation of the clearly shows that what the intended to say was that where the owes a duty to the public to act differently, promissory estoppel cannot be invoked to prevent the from doing so. This proposition is unexceptionable, because where the owes a duty to the public to act in a particular manner, and here obviously duty means a course of conduct enjoined by law, the doctrine of promissory estoppel cannot be invoked for preventing the from acting in discharge of its duty under the law. The doctrine of promissory estoppel cannot be applied in teeth of an obligation or liability imposed by law. ", "We may then refer to the decision of this Court in .(1) It is not necessary to reproduce the facts of this case, because the only purpose for which this decision was relied upon on behalf of the was to show that the view taken by in v. (Supra) was preferred by this Court to that taken by Lord in v. Minister of Pension (supra). It is true that in this case the Court expressed the opinion \"that the view taken by is the correct one and not the one taken by Lord \" but we fail to see how that can possibly help the argument of the . did not in 's case negative the applicability of the doctrine of promissory estoppel against the . What it laid down was merely this, namely, that no representation or promise made by an officer can preclude the from enforcing a statutory prohibition. The doctrine of promissory estoppel cannot be availed to permit or condone a breach of the law. The ratio of the decision was succinctly put by Lord when he said\"- neither a minister nor any subordinate officer of the can by any conduct or representation bar the from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it\". It may also be noted that promissory estoppel cannot be invoked to compel the or even a private party to do an act prohibited by law. There can also be no promissory estoppel against the exercise of legislative power. The can never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. .(1) The next decision to which we must refer is that in .(2) This was also a decision on which strong reliance was placed on behalf of the . It is true that, in this case, the Court observed that \"it is now well settled by a catena of decisions that there can be no question of estoppel against the in the exercise of its legislative, sovereign or executive powers,\" but for reasons which we shall presently state, we do not think this observation can persuade us to take a different view of the law than that enunciated in the Indo-Afghan Agencies' case. In the first place, it is clear that in this case there was factually no foundation for invoking the doctrine of promissory estoppel. When the auctioned the licence for retail sale of country liquor and the respondents being the highest bidders were granted such licence, there was in force a Notification dated 6th April, 1959, issued under section 4 of the U.P. Sales Tax Act, 1948, exempting sale of country liquor from payment of sales tax. No announcement was made at the time of the auction whether the exemption from sales tax under this Notification dated 6th April, 1959 was or was not likely to be withdrawn. However, on the day following the commencement of the licence granted to the respondents, the of U.P. issued a Notification dated 2nd April, 1969 superseding the earlier Notification dated 6th April, 1959 and imposing sales tax on the turnover in respect of country spirit with immediate effect. This notification dated 2nd April, 1969 was challenged by the respondents by filing a writ petition and amongst the several grounds of challenge taken in the writ petition, one was that \"since the did not announce at the time of the aforesaid auction that the Notification---------- dated 6th April, 1959 was likely to be withdrawn and the sales of country liquor were likely to be subjected to the levy of sales tax during the excise year and in reply to the query made by them at the time of the auction they were told by the authorities that there was no sales tax on the sale of country liquor, the appellants herein were estopped from making the demand in respect of sales tax and recovering the same from them\". It was in the context of this ground of challenge that the Court came to make the observation relied upon on behalf of the . Now, it is clear that, even taking the case of the respondents at its highest, there was no representation or promise made by the that they would continue the exemp- ", "690 ", "tion from sales tax granted under the Notification dated 6th April, 1959 and would not withdraw it, and the Notification dated 2nd April, 1969 could not, therefore, be assailed as being in breach of any such representation or promise. There was accordingly, no factual basis for making good the plea of promissory estoppel and the observation made by the court in regard to the applicability of the doctrine of promissory estoppel against the was clear obiter. That perhaps was the reason why the did not consider it necessary to refer to the earlier decisions in case and case and particularly the decision in the Indo-Afghan Agencies case where the court in so many terms applied the doctrine of promissory estoppel against the in the exercise of its executive power. It is not possible to believe that the was oblivious of these earlier decisions, particularly when one of these decisions in the Indo-Afghan Agencies case was an epoch making decision which marked a definite advance in the field of administrative law. Moreover, it may be noted that though, standing by itself, the observation made by the that \"there can be no question of estoppel against the in exercise of its legislative, sovereign or executive powers\" may appear to be wide and unqualified, it is not so, if read in its proper context. This observation was made on the basis of certain decisions which the proceeded to discuss in the succeeding paragraphs of the judgment. The first relied on the statement of the law contained in paragraph 123 at page 783, Volume 28 of the American Jurisprudence (2d), but it omitted to mention the two important sentences at the commencement of the paragraph and the words \"unless its application is necessary to prevent fraud or manifest injustice\" at the end, which clearly show that even according to the American Jurisprudence, the doctrine of promissory estoppel is not wholly inapplicable against the in its governmental, public or sovereign capacity, but it can be invoked against the \"when justified by the facts\" as for example where it is necessary to prevent fraud or injustice. In fact, as already pointed out above, there are numerous cases in the United States where the doctrine of promissory estoppel has been applied against the in the exercise of its governmental, public or executive powers. The then relied upon the decision in 's case, but that decision was confined to a case where legislation was sought to be precluded by relying on the doctrine of promissory estoppel and it was held, and in our opinion rightly, that there can be no promissory estoppel against the legislature in the exercise of its legislative function. That decision does not negative the applicability of the doctrine of promissory estoppel against the in the exercise of its governmental, public or executive powers. The decision in 's case was, thereafter, relied upon by the , but that decision merely says that the cannot be debarred by promissory estoppel from enforcing a statutory prohibition. It does not countenance an absolute proposition that promissory estoppel can never be invoked against the government. The also cited a passage from the judgment of the High of Jammu & Kashmir in v. .,(1) but this passage itself makes it clear that the courts will bind the by its promise where it is necessary to do so in order to prevent manifest injustice or fraud. The last decision on which the relied was v. (supra) but this decision also does not support the view contended for on behalf of the State. We have already referred to this decision earlier and pointed out that the in this case was held not liable on the policy of insurance, because the regulations made by the prohibited insurance of reseeded wheat. The principle of this decision was that promissory estoppel cannot be invoked to compel the or a public authority to carry out a representation or promise which is contrary to law. It will thus be seen from the decisions relied upon in the judgment that the could not possibly have intended to lay down an absolute proposition that there can be no promissory estoppel against the in the exercise of its governmental, public or executive powers. That would have been in complete contradiction of the decisions of this in the Indo- Afghan Agencies Case, case and case and we find it difficult to believe that the could have ever intended to lay down any such proposition without expressly referring to these earlier decisions and over-ruling them. We are, therefore, of the opinion that the observation made by the in case does not militate against the view we are taking on the basis of the decisions in case, case and case in regard to the applicability of the doctrine of promissory estoppel against the . ", "We may then refer to the decision of this Court in .(2) It was held in this case in paragraph 12 of the judgment that the respondent could not invoke the doctrine of promissory estoppel because he was unable to show that, relying on the representation of the Govern- ", "692 ", "ment, he had altered his position by investing moneys and the allegations made by him in that behalf were \"much too vague and general\" and there was accordingly no factual foundation for establishing the plea of promissory estoppel. On this view, it was unnecessary to consider whether the doctrine of promissory estoppel was applicable against the , but the Court proceeded to reiterate, without any further discussion, the observation in case that \"there cannot be any estoppel against the in the exercise of its sovereign, legislative and executive functions\". This was clearly in the nature of obiter and it cannot prevail as against the statement of law laid down in the case. Moreover, it is clear from paragraph 14 of the judgment that this Court did not intend to lay down any proposition of law different from that enunciated in the case because it approved of the decision in the case and distinguished it on the ground that in that case there was not enforcement of contractual right but the claim was founded upon equity arising from the Scheme, while in the case before the Court, a contractual right was sought to be enforced. There is, therefore, nothing in this decision which should compel us to take a view different from the one we are otherwise inclined to accept. ", "We may point out that in the latest decision on the subject in .(1) this Court approved of the decisions in the Indo-Afghan Agencies case and case and pointed out that these were cases where it could be held that public bodies or the are as much bound as private individuals are to carry out obligations incurred by them because parties seeking to bind the authorities have altered their position to their disadvantage or have acted to their detriment on the strength of the representations made by these authorities\". It would, therefore, be seen that there is no authoritative decision of which has departed from the law laid down in the celebrated decisions in the Indo-Afghan Agencies case and case. The law laid down in these decisions as elaborated and expounded by us continues to hold the field. ", "We may now turn to examine the facts in the light of the law discussed by us. It is clear from the letter of the 4th respondent dated 23rd January, 1969 that a categorical representation was made by the 4th respondent on behalf of the that the proposed vanaspati factory of the appellant would be entitled to exemption from sales tax in respect of sales of vanaspati effected in Uttar Pradesh for a period of three years from the date of commencement of production. This representation was made by way of clarification in view of the suggestion in the appellant's letter dated 22nd January, 1969 that the financial institutions were not prepared to regard the earlier letter of the 4th respondent dated 22nd December, 1968 as a definite commitment on the part of the to grant exemption from sales tax. Now the letter dated 23rd January, 1969 clearly shows that the 4th respondent made this representation in his capacity as the Chief Secretary of the , and it was, therefore, a representation on behalf of the government. It was faintly contended before us on behalf of the that this representation was not binding on the , but we cannot countenance this argument, because, in the first place, the averment in the writ petition that the 4th respondent made this representation on behalf of the government was not denied by the in the affidavit in reply filed on its behalf, and secondly, it is difficult to accept the contention that the 4th respondent, who was at the material time the Chief Secretary to the government and also advisor to the Governor who was discharging the functions of the . We must, therefore, proceed on the basis that this representation made by the 4th respondent was a representation within the scope of his authority and was binding on the . Now, there can be no doubt that this representation was made by the knowing or intending that it would be acted on by the appellant, because the appellant had made it clear that it was only on account of the exemption from sales tax promised by the that the appellant had decided to set up the factory for manufacture of vanaspati at Kanpur. The appellant, in fact, relying on this representation of the , borrowed moneys from various financial institutions, purchased plant and machinery from , Bombay and set up a vanaspati factory at Kanpur. The facts necessary for invoking the doctrine of promissory estoppel were, therefore, clearly present and the was bound to carry out the representation and exempt the appellant from sales tax in respect out the representation and exempt the appellant from sales tax in respect of sales of vanaspati effected by it in Uttar Pradesh for a period of three years from the date of commencement of the production. ", "The , however, contended that the doctrine of promissory estoppel had no application in the present case because the appellant did not suffer any detriment by acting on the representation made by the : the vanaspati factory set up by the appellant was quite a profitable concern and there was no prejudice caused to the appellant. This contention of the is clearly unsustainable and must be rejected. We do not think it is necessary, in order to attract the applicability of the doctrine of promissory estoppel, that the promisee acting in reliance of the promise, should suffer any detriment. What is necessary is only that the promisees should have altered his position in reliance on the promise. This position was implied accepted by , J., in the High Trees' case when the learned Judge pointed out that the promise must be one \"which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact acted an\" (emphasis supplied). If a promise is \"acted on\", \"such action, in law as in physics, must necessarily result in an alteration of position.\" This was again reiterated by Lord in x. El. Nasr Export and Import Co.(1) where the learned Law Lord made it clear that alteration of position \"only means that he (the promise) must have been led to act differently from what he would otherwise have done. And if you study the cases in which the doctrine has been applied, you will see that all that is required is that the one should have acted on the belief induced by the other party.\" Viscount also observed in v. (2) that \"the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position\". The judgment of Lord in the same case would be found to depend likewise on a fundamental finding of alteration of position, and the same may be said of that of Lord . Then again in v. (supra) Lord said: \"This equity,is however, subject to the qualification (1) that the other party has altered his position\". The same requirement was also emphasised by Lord in v. (3) What is necessary, therefore, is no more than that there should be alteration of position on the part of the promisee. The alteration of position need not involve any detriment to the promises. If detriment were a necessary element, there would be no need for the doctrine of promissory estoppel because in that event, in quite a few cases, the detriment would form the consideration and the promise could be binding as a contract. There is in fact not a single case in England where detriment is insisted upon as a necessary ingredient of promissory estoppel. In fact, in v. (supra), Lord expressly rejected detriment as an essential ingredient of promissory estoppel, saying: ", "\"A seller may accept a less sum for his goods than the contracted price, thus inducing (his buyer) to believe that he will not enforce payment of the balance; see v. and v. [1956] 3 All E.R. 837]. In none of these cases does the party who acts on the belief suffer any detriment. It is not a detriment, but a benefit to him to have an extension of time or to pay less, or as the case may be. Nevertheless, he has conducted his affairs on the basis that he has had that benefit and it would not be equitable now to deprive him of it.\" ", "We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promise to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which could result if the promisor were to recede from his promise then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise. The classic exposition of detriment in this sense is to be found in the following passage from the judgment of , J in the Australian case of v. (1): ", "\"-It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act or source of prejudice.\" ", "If this is the kind of detriment contemplated, it would necessarily be present in every case of promissory estoppel because it is on account of such detriment which the promisee would suffer if the promisor were to act differently from his promise, that the Court would consider it inequitable to allow the promisor to go back upon his promise. It would, therefore, be correct to say that in order to invoke the doctrine of promissory estoppel it is enough to show that the promisee has acting in reliance of the promise, altered his position and it is not necessary for him to further show that he has acted to his detriment. Here, the appellant clearly altered its position by borrowing moneys from various financial institutions, purchasing plant and machinery from , Bombay and setting up a vanaspati plant, in the belief induced by the representation of the that sales tax exemption would be granted for a period of three years from the date of commencement of the production. The was, therefore bound on the principle of promissory estoppel to make good the representation made by it. Of course, it may be pointed out that if the U.P. Sales Tax Act, 1948 did not contain a provision enabling the to grant exemption, it would not be possible to enforce the representation against the because the cannot be compelled to act contrary to the statute, but since section 4 of the U.P.Sales Tax Act, 1948 confers power on the to grant exemption from sales tax, the can legitimately be held bound by its promise to exempt the appellant from payment of sales tax. It is true that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the so far as the doctrine of promissory estoppel is concerned. Whatever be the nature of the function which the is discharging, the is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the can be compelled to carry out the promise made by it. We are, therefore, of the view that in the present case the was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by it in the State of Uttar Pradesh for a period of three years from the date of commencement of the production and was not entitled to recover such sales tax from the appellant. ", "Now, for the assessment year 1970-71, that is, 2nd July, 1970 to 31st March, 1971, the appellant collected from its customers sales tax amounting to Rs. 6,81,178.95 calculated at the rate of 3 1/2% on the sale price. But when the assessment was made by , sales tax was levied on the appellant at the rate of 7% and the appellant was required to pay up a further sum of Rs. 6,80,969.42. The appellant had prayed for an interim order in the present appeal staying further proceedings, but this Court, by an order dated 3rd April, 1974, granted interim stay only on the appellant paying up the amount of sales tax due for the assessment year 1970-71 before 31st July, 1974 and so far as the assessment years 1971-72, 1972-73 and 1973-74 were concerned, the Court directed that the assessments for those years may proceed, but only the final order shall not be passed. The result was that the appellant had to pay up the further sum of Rs. 6,80,949.42 for the assessment year 1970-71. The appellant collected from the customers for the assessment year 1971-72 an aggregate sum of Rs. 9,91,206.17 by way of sales tax at the rate of 3 1/2% for the period 1st April, 1971 to 1st July, 1971, 4% for the period 2nd July, 1971 to 24th January, 1972 and 7% for the period 25th January, 1972 to 31st March, 1972 and deposited this amount in the . Similarly, for the assessment year 1972-73, the appellant collected from its customers an aggregate sum of Rs. 19,36,597.23 as and by way of sales tax at the rate of 7% of the sale price and this amount was deposited by the appellant in the , and so also for the first quarter of the assessment year 1973-74 upto the end of which the exemption from sales tax was to continue, the appellant collected and paid an aggregate sum of Rs. 4,84,884.05 at the rate of 7% of the sale price. It appears that surcharge amounting to Rs. 2,83,008.09 for the period of the exemption was also paid by the appellant into the . The assessments for the assessment years 1971-72, 1972-73 and 1973-74 were, however, not completed in view of the stay order granted by this Court. Now, obviously since the Government is bound to exempt the appellant from payment of sales tax for a period of three years from 2nd July, 1970, being the date of commencement of the production, the appellant would not be liable to pay any sales tax to the in respect of sales of vanaspati effected during that period and hence the would have to refund to the appellant the amount of sales tax paid for the period 2nd July, 1970 to 31st March, 1971, subject to any claim which the may have to retain any part of such amount under any provision of law. If the has any such claim, it must be intimated to the appellant within one month from today and it must be adjudicated upon within a further period of one month after giving proper opportunity to be heard to the appellant. If no such claim is made, or, if made, not adjudicated upon within the time specified, the will refund the amount of sales tax to the appellant with interest thereon at the rate of 6% per annum from the date when such refund becomes due and if such claim is made and adjudicated upon within the specified time and it is found that a part of this amount is liable to be retained by the under some provision of law, the will refund the balance to the appellant with interest at the like rate. So far as the assessment years 1971-72, 1972- 73 and 1973-74 are concerned, will proceed to complete the Assessments for those assessment years in the light of the law laid down in this judgment and the amounts of sales tax deposited by the appellant will be refunded to the appellant to the extent to which they are not found due and payable as a result of the assessments, subject to any claim which the may have to retain those amounts under any provision of law. ", "We accordingly allow the appeal, set aside the judgment of and issue a writ, order or direction to the above effect against the respondents. The State will pay the costs of the appellant throughout. ", "S.R. Appeal allowed."], "relevant_candidates": ["0000113707", "0000146451", "0000163455", "0000336923", "0000467021", "0000521874", "0000561287", "0000630568", "0000746327", "0001002467", "0001298680", "0001880129", "0001882267", "0001913517"]} {"id": "0000877318", "text": ["JUDGMENT , C.J. ", "1. This is a reference to made in certain appeals against orders which arose under the circumstances mentioned in the order of reference. Briefly speaking, the claims of the decree-holder-purchaser of the disputed property in execution of a money decree and of his vendee having been disallowed as against the purchasers under a mortgage decree, one of them being the decree-holder himself with respect to a part of the property, the purchaser of the other part being a stranger, the question arose whether the order of the lower Court comes within the purview of Section 47 of the Code of Civil Procedure and is therefore appealable. The suit on the mortgage was instituted after the attachment in execution of the money decree and the sale under the money decree which was subject to the mortgage was made between the dates of the preliminary mortgage decree and the final decree. I shall proceed on the basis assumed in the order of reference that the question that has arisen relates to execution, discharge, or satisfaction of the decree within the meaning of Section 47, and that all that we are asked is whether such a question arose between the parties to the suit in which the decree was passed or their representatives. ", "2. As I understand the facts, the question in the appeal arose in execution of the mortgage decree; and, so far as the decree holder-purchaser is concerned, there can be no question of his position as he is a party to the suit. ", "3. But the decisions of this Court as to who are to be deemed, within the meaning of Section 47 of the Code of Civil Procedure, to be the representatives of the parties to the suit in which the decree which is being executed was passed are in a state of considerable conflict. On the question whether the purchaser can be regarded as the representative of the decree-holder in cases arising between him and the judgment-debtor or his representative, had no hesitation in (1902) I.L.R. 25 M. 529, in holding that the auction-purchaser, even if he was not the decree-holder, was the representative of the judgment-creditor, basing his opinion on the ruling in v. (1892) I.L.R. 19 C. 683, and on the full Bench ruling of in v. Beni Madhub Sirkar (1896) I.L.R. 24 C. 62, and on that of a Divisional Bench of the same Court in (1898) I.L.R. 26 C. 250. , the other learned Judge, did not express any dissent from that view, but pointed out that the order was none the less an order under Section 244(now Section 47) because it was also passed under Sections 318 and 334 of the Code of Civil Procedure (corresponding to Rules 95, 97 and 98 of Order 21 of the Code of Civil Procedure). The ruling was followed by and in v. Hussain Sahib (1904) I.L.B. 28 M. 87, by and in (1912) M.W.N. 510, and by und JJ.in v. (1907) I.L.R. 30 M. 507. But the opposite view is expressed by sitting with Miller J. in v. (1908) I.L.R. 31 M. 177, and by and in . (1910) I.L.R. 34 M. 417, and has been accepted by and in (1917) I.L.R. 41 M. 467. In this Court, therefore, the conflict of opinion on the point is such that one could not say that there is a clear preponderance of authority in support of one view rather than the other. ", "4. As regards the other it was held by Jenkins v. (1901) I.L.R. 25 B. 631 that an auction purchaser could not be regarded as the representative of the decree-holder for the purposes of an application under Section 310(A) of the Old Code but Order 21, Rule 89 of the New Code now expressly provides that person owning property which has been sold or holding an interest therein by virtue of a title acquire 1 before such sale may also apply to have the sale set aside on depositing the purchase-money. As regards Calcutta and Allahabad no express ruling on the question has been cited before us and I have not found any. ", "5. On the question whether an auction-purchaser can be treated as the representative of the judgment-debtor, we find a similar conflict in v, (1896) I.L.R. 20 M. 378 and . and in v. (1904) I.L.R. 28 M. 117 and , answered the question in the affirmative. But in , v. (1910) I.L.R. 34 M. 417 already mentioned to which was a party, held that he was not such a representative and this view has been followed by and . in (1916) 3 L.W. 377 and in (1916) 1 M.W.N. 287 at least in cases where the decree does not mention or affect the property purchased. In another case reported in v. (1909) I.L.R. 34 M. 450 both and held that the auction-purchaser would be the representative of the judgment-debtor and in an unreported judgment in v. Ramachandra Tevar A.S. No. 249 of 1916 sitting with expressly disapproved of the dictum of in (1910) I.L.R. 34 M. 417 and of the rulings in (1916) 3 L.W. 377 and (1916) 1 M.W.N. 287 and following v. Somasundara Mudali (1904) I.L.R. 28 M. 117 v. (1907) 17 M.L.J. 321 and v. (1909) I.L.R. 34 M. 450. Though on this aspect of the question also it cannot be said that the law is settled by a long current of decisions in this Court as the learned Chief Justice suggests in the unreported judgment, I agree with him so far that the view that an auction-purchaser of the judgment-debtor's interests in the property in dispute is his representative for the purposes of Section 47 of the Code of Civil Procedure has a preponderance of authority in its favour. As regards the other , both Calcutta and Allahabad See v. (1896) I.L.R. 24 Gal. 62 and v. (1901) I.L.R. 26 All. 447 have finally decided in favour of the view that the word ' representative' when taken with reference to the judgment-debtor does not mean only his legal representative that is, his heir, executor or administrator, but it means his representative in interest and includes a purchaser of his interest whether by a private sale or at court auction, who, so far as such interest is concerned, is bound by the decree. In Allahabad, v. (1884) I.L.R. 6 All. 286 and probably also in Calcutta, the purchaser would not be regarded as the representative of the judgment-debtor except in cases where the property purchased by him is involved in the decree in the course of execution of which the question has arisen. But except in (1916) 1 M.W.N. 289 this distinction does not appear to have been drawn in the rulings of our Court. A recent of in v. (1918) I.L.R. 42 Bom. 411 has ruled contrary to the view of the law as laid down by the Calcutta and Allahabad es. ", "6. Now, the Code has not defined the word ' representative ' though it has defined the phrase ' legal representative'. But that the two terms are not used in a synonymous sense is obvious, for while in Section 47 the legislature uses the word ' representative ' it uses the phrase ' legal representative ', as it were by contrast, in Sections 50 and 52 and so on. Nor can there be any doubt that the word ' representative ' was intended to have a wider meaning than 'legal representative'. ", "7. I think some light can be obtained on this question if we find out in what matters the purchaser of the interest of the judgment-debtor in property sold in execution can apply to the executing for redress or can be proceeded against in that . Under Section 64 an alienation after attachment is void as against all claims enforceable under the attachment. Under Section 74 where the purchaser has been obstructed in obtaining possession by the judgment-debtor or by any one on his behalf, the latter can be dealt with by the at the instance of the decree-holder or, purchaser. Then we find under Order XXI, Rule 35 that under a decree for delivery of immoveable property possession may be given by the executing the decree by removing any person bound by the decree which would apparently include a purchaser pendente lite. This seems to be made clear by the fact that under Rule 54 which provides for attachment of immoveable property persons are prohibited from taking any benefit under any transfer made after attachment. In the case of a person who claims a title to the property either independently of the defendant in the suit or if from the defendant, he asserts a title anterior to the institution of the suit in which the decree under execution was passed, his claim is placed on a different basis by the legislature. If such a person is in possession of the property the executing the decree cannot dispossess him and his right to establish his title by a separate suit is expressly recognised. See Order 21 Rules 58, 63, 99,100 and 101. By Rule 89 an application to set aside a sale by depositing the purchase money may be made by any person owning the property or holding an interest in the property under a title acquired before sale, and such an application would clearly be one between the judgment-debtor or a person who has acquired his interest on the one hand and the decree-holder and the purchaser under the decree on the other. It further says that the judgment-debtor's liability for costs will not be affected by such application. By Rule 90 an application to set aside the sale on the ground of irregularity may be made by the decree-holder or any person entitled to rateable distribution or a person whose interests are affected by the sale and to such an application the purchaser would clearly be a necessary party and questions arising under the application may have to be determined between him and the decree-holder or the judgment debtor as the case may be. The purchaser may himself apply to have the sale set aside on the ground that the judgment-debtor had no saleable interest and only on questions raised under Rules 89,90 or 91 being decided in favour of the purchaser that the sale will be confirmed. The purchaser can apply for the delivery of the property purchased by him as against the judgment debtor or against any person claiming under a title created by the judgment-debtor subsequently to the attachment. If the holder of a decree for possession of immoveable property or the purchaser of any such property sold in execution of a decree is obstructed in obtaining possession that is a matter to be investigated by the executing . If the resistance or obstruction is by the judgment-debtor or by a transferee from him after the institution of the suit in which the decree was passed, in that case the question is to be decided finally in execution. On the other hand if the obstructor is a bonafide claimant claiming under a title independent of the judgment-debtor then, as already mentioned, he would have a right to sue in spite of the decision in execution. ", "8. I think these provisions of the Code show that the legislature intended that all questions affecting a purchaser of the interest of the judgment-debtor in property which is either affected by the decree or is sold under a decree, are to be decided in execution between parties interested if the purchase was after the institution of the suit, whether at a private sale or at a sale in execution of a money decree against the defendant. I may here also refer to Section 146 which says that \"Save as otherwise provided by this code, or by any law for the time being in force, where any proceeding may be taken or application made by or against any person, then the proceeding may be taken or the application may be made by or against any person claiming under him.\" Under this section the claim is not confined to an interest in property. It seems to me that the purchaser of property in execution of a decree may well be said to claim under the decree-holder for the purposes of proceedings under Section 47 in which his rights are affected. It may also here be pointed out that the law, so far as the rulings of this Court and also of go is settled that not only the assignee of a decree-holder comes within the scope of Section 47 but a person attaching the decree is the representative of the decree-holder within the meaning of this section- (1892) I.L.R. 16 Mad. 20,Krishnan v. (1905) I.L.R.29 Mad. 318 (1888) I.L.R. 15 Cal 371. I do not see how the case of a purchaser in execution of a decree can well be distinguished on principle On the other hand where the interest of the purchaser of property either in execution of the same decree or of another decree is affected by any question raised in execution by the holder of the decree under execution the purchaser is entitled to defend his interest as a person claiming under the judgment-debtor. As has been pointed out time after time by as well as by , Section 47, corresponding to the old Section 244, should be interpreted in as liberal a spirit as the language would reasonably admit of. I would therefore have little hesitation in holding that the word ' representative is not intended to be confined to legal representative but is used in the wider sense indicated in (1894) I.L.R. ", "18 Mad. 13 at 18. \"It is a well-known principle that a purchaser in a -sale represents the judgment-debtor to the extent of the right, title and interest as he had in the property purchased at the date of sale and represents the execution creditor, in so far as he had a right to bring such right, title and interest to sale in satisfaction of the decree.\" This principle was laid down by and in holding that the purchaser was a party claiming under the execution creditor within the meaning of Section 13 of the old Civil Procedure Code; and there was thus privity of law between the two. No doubt the learned judges with reference to some cases cited against that proposition dismissed them with the remark that they were cases under Section 244 and not under Section 13 but they were not considering any question under the former section. I do not see why the principle should not be applied to Section 47 of the Code of Civil Procedure as well. ", "9. The question however seems to be concluded by the ruling of in v. (1892) I.L.R. 19 Cal. 683 where their Lordships say \"It is of the utmost importance that all objections to the execution sale should be disposed of as cheaply and as speedily as possible and their Lordships are glad to find that the s in India have not placed any narrow construction on the language of Section 244, and that when a question has arisen as to execution, discharge, or satisfaction, of the decree between the parties to the suit in which the decree was passed, the fact that the purchaser who is not a party to the suit, is interested in the result has never been held a bar to the application of the section \". Their Lordships in laying down the law in these terms observed that as the respondent was not represented before them they had examined the rulings of for themselves; and they also mention that Mr. who appeared for the appellant admitted before them that it was the common practice to make the auction-purchaser a party to an application for setting aside an execution-sale: in that case the appellant wanted by a suit to have the judicial sale of the Zamindari set aside on the ground of fraud on the part of the decree-holder and it was held that the question was determinable by virtue of Section 244 only by an order of the executing the decree and not by a separate suit No doubt their Lordships do not say that the auction-purchaser would be a representative of either the judgment-debtor or the decree-holder within the meaning of Section 244 but they clearly intended to lay down that as a party most interested in the result he would be entitled to be heard in any application under Section 244 and that if the question was one of the character described therein, i.e., relating to the execution, discharge or satisfaction of the decree, then it must be determined by a proceeding under that section in which the auction-purchaser must be joined. In and (1901) I.L.R. 25 B. 631 abovementioned it is observed that could not have intended to delete the words \" arising between the parties to the suit in which the decree was passed or their representatives \" from Section 244. But there seems to be no inconsistency if I may respectfully say so, in holding that that the question was one arising between the parties although an auction-purchaser who was most interested in the dispute was entitled and bound to ask for a decision by the court executing\" the decree. Otherwise the result would be that the judgment-debtor and the decree-holder would be bound to have the question settled by the executing court and so far as the purchaser was concerned a fresh decision would have to be obtained by a separate suit. ", "10. The law, therefore, in my opinion, is that a person who has bought the property of the defendant in a suit since the institution of that suit, whether at a court auction held in execution of a money-decree passed in another suit or by private purchase, is entitled and bound to have any question relating to the execution, discharge or satisfaction of the decree decided under Section 47 by the court executing the decree when his interest is affected either by the decree itself or by the sale held in execution of that decree, and the same rule applies to a purchaser of the property under such sale whether he is the decree-holder himself or a stranger Whether the purchaser in the one case or the auction-purchaser in the other is to be regarded as the representative of the judgment-debtor or the decree-holder depends upon the nature of the question raised and who the contesting party is. This is in accordance with the view of the law adopted in (1912) I.L.R. 25 Mad 529 Sandhu Taraganar v. Hussain Sahib (1907) I.L.R. 28 Mad. 87 (1912) M.W.N. 513 Manicka Odayar v. Rajagopala Pillai (1907) I.L.R. 30 Mad. 507 (1897) I.L.R. 20 Mad. 378 (1904) I.L.R. 28 Mad. 117, (1910) I.L.R. 34. Mad. 450, Krishna Satapasti v. Sarasavattula Sambasiva Rao (1908) I.L.R. 31 Mad. 177 uppanna (1910) I.L.R. 34. Mad. 417 and the un-reported judgment in appeal No. 249 ot 1916 and is opposed to (1917) I.L.R. 4l Mad. 467, (1916) 3 L.W. 377 Arasayee Ammall v. (1916) I.M.W.N. 287 and the latter rulings to that extent must be considered to be overruled. ", "Oldfield, J. ", "11. It is clear that the questions before us were framed on the assumption that the applicability of Section 47 of the Code of Civil Procedure to the cases before the Subordinate Judge can be disputed only on the ground that some of those who contested them were neither parties (that is not alleged) nor their representatives; and in particular that the stranger purchaser referred to in the third question at the Court-sale in connection with which these proceedings have arisen must be regarded as the representative of one party or other to the decree under execution, if Section 47 is to be applied. That assumption, I agree with the learned Chief Justice, must be rejected, because, as held in v. (1892) I.L.R. 19 C. 683 the auction-purchaser's inclusion in the proceedings is justifiable on the ground of his interest in their result and without reference to his possession of a representative character. In fact there was in that case, as I understand it, no attempt to decide whether he had one; and, if the judgment in v, (1901) I.L.R. 25 Bom. 631 assumes such a decision, 1 would respectfully dissent from it. The Committee regarded it as sufficient to attract the application of Section 47 that a question relating to execution had arisen between the parties to the decree, without reference to the purchaser's inclusion in the proceedings. It need only be added that in order to the arising of such question, it is not essential that all the parties to the decree should actually be \"impleaded in the proceedings, in which it is raised. For, although I deprecate the common practice, which is exemplified by the cases before us, of failing to implead in such proceedings either the decree-holder or the judgment-debtor, the nature of the question to be dealt with cannot be affected by their absence. In the cases before us the terms of the reference assume and it is evident that a question relating to the execution of the decree has arisen. It is therefore unnecessary to answer the third question referred directly or otherwise than by saying that the inclusion of the auction-purchaser as a party to proceedings relating to an auction-sale does not make Section 47, inapplicable to them. ", "12. The foregoing, of course, supplies no answer to the other questions referred, in which the representative character of the other contesting party in the cases before us, the purchaser in execution of a previous money-decree or his transferee, is in issue. For the connection of either with the proceedings in execution of the mortgage-decree, in which the dispute to be adjudicated on has arisen, is indirect and their interest in the result of these proceedings accrued to them independently of the sale, which they impugn. And accordingly, so far as they are concerned, their possession of a representative character must be established, if Section 47 is to be applied. It is not suggested that they can be regarded as the representatives of the holder of the decree under execution in the present proceedings since he had no connection with the -sale and private sale under which they claim. The conclusion will therefore depend on whether they represent the judgment-debtor in these proceedings, who is also the judgment-debtor under the money-decree in execution of which that sale was held. It appeared, it may be observed, in the course of argument that the statement of the parties' characters in my order of reference was inaccurate, in as much as in all these appeals and not only in Appeal Against Order No. 260, the contesting party was the vendee of the decree-holder purchaser under the money-decree. This however authorizes hardly any restriction of the discussion of the general principle involved. For the three alternatives have still to be considered, that the purchaser represents (1) no one or (2) the judgment-debtor or (3) the money decree-holder, either because he in fact derived title from him or on other grounds. ", "13. It does not seem to me that any detailed discussion of the numerous decisions enumerated in the judgment just delivered is called for, since the conflict between them is for the most part beyond reconciliation. On two points however there is a distinct preponderance of authority in this ; and I therefore take it as settled law that the representative mentioned in Section 47 is not to be identified with a legal representative as defined in Section 2(11) and that a purchaser at -auction represents some one, i. e., either the judgment-debtor or the decree-holder. For although the latter conclusion is contrary to the dictum of ,, in v. (1910) I.L.R. 34 M. 417 and the cases from unauthorized reports, in which it is followed, to which my order of reference refers, it is as I have pointed out there, unsupported by reference to principle and irreconcilable with another portion of the learned Judge's judgment and other earlier and later decisions. ", "14. The question is then whether the purchaser is the representative of the judgment-debtor or decree-holder; and it is sufficient for the present reference to deal with it as regards money-decrees only and without regard to the special and more difficult considerations arising in connection with sale under mortgage-decrees, by which the interest of the mortgagee-decree-holder as well as the equity of redemption is ordinarily transferred. As regards money-decrees it seems to me very difficult, if not impossible, to imagine a case, in which the purchaser can become the representative of the decree-holder. The dictum of , J., in (1901) I.L.R. Mad. 529 was obiter, the fact that the auction-purchaser was the decree-holder affording, as he points out, an alternative ground for his decision; and the sale was in execution of a mortgage-decree and was therefore subject to the considerations above referred to. In v. (1904) I.L.R. 28 Mad. 87 the question arose regarding a purchaser from the decree-holder purchaser at the sale; and in that case and v. the sale was held under the decree, in the execution of which the application of Section 47 was proposed. Of the decisions relied on by , J., in v. (1907) I.L.R. 30 Mad. 507 , v. (1892) I.L.R. 19 Cal. 683 has already been referred to, whilst v. (1896) I.L.R. 24 Cal. 62 does not, with all due deference, support him and v. (1898) I.L.R. 26 Cal. 250 deals with the transferee from a decree-holder of his decree, not of what he had purchased in execution of it. On the other hand, as the learned Chief Justice has shown' the purchaser at a sale has been regarded,so far as appears, on general grounds,as the representative of the judgment-debtor in v. (1907) I.L.R 31 Mad. 177 and Subbamma v. (1917) I.L.R. 41 Mad. 467. Apart from authority the fact recognized by , in (1910) I.L.R. 34 M. 417 that the purchaser succeeds to the judgment-debtor's rights in the property sold, would ordinarily be sufficient to constitute him his representative in interest, at least in proceedings regarding that property; and the only argument suggested to the contrary, that the purchaser and decree-holder are both interested to support the sale, at which the purchase was made, appears to assume, what is not the case, that they both have or have had in succession an identical interest in the property sold. ", "15. Holding that the purchaser in execution of a money-decree is ordinarily the representative of the judgment-debtor, I consider next whether he is so, when as in the cases before us, he is also the decree-holder and when his position comes in question in a distinct proceedings. It may be pointed out that, where his position does not so come in question, the fact that he is the purchaser does not, consistently with the reference already made to v. (1892) I.L.R. 19 C. 683 require consideration. When it does, it seems to me that his character as decree-holder in one execution can have no effect on his position in another and that there is nothing in authority or on principle to debar us from treating him like any other stranger to the latter, no reason appearing for according him any other rights than a stranger purchaser from the judgment-debtor, whether by execution or private sale, would acquire. ", "16. The foregoing entails that the purchaser from a decree-holder purchaser under a money-decree is the representative of the judgment-debtor for the purpose of enquiry into a question relating to the execution of a distinct decree affecting the same property. I would answer the second question referred accordingly. An answer to the first question is not necessary. ", ", J. ", "17. Before dealing with the questions referred a short statement of facts may not be out of place. The property in suit belongs to one . One sued him in O.S. No. 733 of 1915 and obtained a money-decree on the 6th of January 1916. In pursuance of that decree the properties were attached on the 21st of June 1916. They were sold on the 24th of October of the same year, purchased by the decree-holder, and the sale was confirmed on the 27th of November 1916. The property was delivered on the 12th of February 1917. The decree-holder purchaser sold the property privately on the 28th of March 1917 to the present appellant. That is the history of one stage of the proceedings. After the attachment under the money-decree one M.V. Nadan brought a suit on a mortgage executed by on the 14th of July 1916. He obtained a preliminary decree on the 25th of September 1916. The final decree was on the 11th of July 1917. The property was sold on the 17th of December 1917; three items out of four were purchased by the decree-holder himself, and the 4th item by one a stranger. The sale was confirmed on the 21st of January 1918. The purchasers under the mortgage-decree in endeavouring to take possession were obstructed by the purchaser under the money-decree. Thereupon they applied for the removal of the obstruction. The lower Court held that the purchase under the money-decree was affected by the doctrine of lis pendens as the sale was subsequent to the institution of the mortgage suit. The present appeals are by the representatives of the purchaser under the money-decree against the order of directing possession to be given to the purchasers under the mortgage-decree. ", "18. A preliminary objection was taken that no appeal lies because the purchaser under the money-decree cannot be regarded as a representative of any of the parties to the decree. It was under these circumstances the three questions have been referred for the opinion of . ", "19. Upon one question there was no contest. It was conceded by the counsel for the respondent that where the equity of redemption is purchased under a money decree, in matters relating to execution of a mortgage-decree, the auction-purchaser-under the money-decree will be the representative of the judgment-debtor in the mortgage-decree. This matter apart from concession has been definitely decided by the of the Calcutta High in (1896) I.L.R. 24 C. 62 and by the of in v. Madho Lal (1904) I.L.R. 26 All. 447 . In the first of these decisions it was held that the decision of in v. (1888) 15 Cal. 756 is only consistent with the view that the auction-purchaser is the representative of the judgment-debtor. Although the point was not expressly decided by the Board, I respectfully concur with the view taken in Calcutta that that decision is authority for the proposition enunciated. It is true in Bombay they have held that the auction-purchaser is the representative of neither the decree-holder nor of the judgment-debtor; and in the latest decision of that in v. (1918) I.L.R. 42 B. 411 it was held that he is not a representative of the judgment-debtor. But having regard to the decisions of and of the two cases referred to by me, I am of opinion that the auction-purchaser represents the judgment-debtor in questions relating to the execution of decree in the second suit on the mortgage. But the question whether in the same suit he would be the representative of the judgment-debtor is not quite settled. I shall not discuss the authorities bearing thereon as in the view I am taking the discussion would be unnecessary. Before proceeding further I might state that the view that the auction-purchaser is the representative of the decree-holder has not been accepted in Calcutta or in Allahabad, It is certainly not the law in Bombay. In this Presidency the weight of authority is against making him representative of the decree-holder. v. (1908) I.L.R. 31 Mad. 177 (1910) I.L.R. 34 Mad. 417 v. (1917) I.L.R. 41 Mad. 467 take that view. On the other hand, we have v. (1907) I.L.R. 30 Mad. 507 and (1912) M.W.N. 513 in favour of regarding the auction-purchaser as the representative of the decree-holder. On principle it seems to me that this latter view is wrong. He is certainly not a representative-in-interest. Because beyond being the instrument for bringing the property of the judgment-debtor to sale, ordinarily speaking, a decree-holder does not transmit any of his rights to the auction-purchaser. I can understand his legal representative standing in his shoes. I can understand his assignee or other heir prosecuting his right. But I am unable to hold that an auction-purchaser represents the decree-holder. On the motion of the decree-holder the proceeds to sell the property of the judgment-debtor and the principle of Caveat Emptor has been applied to purchases so made. The only provision in the Code of Civil Procedure which affects the decree-holder is that which provides for an application by the auction-purchaser for a refund of the money from the decree-holder in case the sale is set aside. I am therefore unable to accept those decisions which hold that he is a representative of the decree-holder, as correct. ", "20. But I think all these difficulties may be overcome by a legitimate application of the principle enunciated in v. (1892) I.L.R. 19 Cal. 683 . In that case a suit was brought by a judgment-debtor for setting aside the sale of his property on the ground that the decree-holder acted fraudulently. The auction-purchaser at the execution sale was made a defendant. When the matter finally went before their Lordships said: \"Mr. , who appeared for the appellants, admitted that the question at issue was one relating to ' execution discharge, or satisfaction of the decree.' But he argued with much ingenuity that the suit, was not barred by the provisions of Section 244, because the question concerned the auction-purchasers as much as anybody (the italics are mine) and therefore, as he contended, it could not properly be described as a question \" arising between the parties to the suit in which the decree was passed.\" Their Lordships say further on. \" It is of the utmost importance that all objections to execution sales should be disposed of as cheaply and as speedily as possible. Their Lordships are glad to find that the in India have not placed any narrow construction on the language of Section 244, and that, when a question has arisen as to the execution, discharge or satisfaction of a decree between the parties to the suit (the italics are mine) in which a decree was passed, the fact that the purchaser, who is no party to the suit, is interested in the result has never been held a bar to the application of the section.\" This statement shows that what the courts have to see is whether the issues arising for decision relate (a) to execution; (b) to deciding rival rights of the decree-holder and of the judgment-debtor, in the subject-matter. If those conditions are satisfied, the fact that others are interested in the result of the decision should not affect the jurisdiction and competency of the executing court to deal with the matter. Their Lordships lay special emphasis on the cheapness and speediness of remedies expected of an application in execution. If we turn to the language of Section 47 which corresponds to Section 244 of the Code of 1882 the same result would appear to follow. The section lays down only two conditions which have been insisted on by . It does not describe who the parties to the execution application should be. The obvious object of the legislature was that once a matter has been adjudicated upon by a regular trial, question affecting the same matter should as far as possible be dealt with in the execution department. In very many cases the same Judicial Officer may have to deal with the matters in execution: that would be a distinct advantage. Further the parties will be saved considerable expense if the question is dealt with in execution. I am therefore of opinion that as extended an application should be given to the rule enunciated by as is consistent with the language of Section 47. (1918) I.L.R. 41 Mad. 403 another decision of they reiterated the principle enunciated in v. (1892) I.L.R. 19 Cal. 683 . (1982) I.L.R. 18 Mad 13 this view seems to have found favour with the learned Judges. In v. Doshi Mulji (1901) I.L.R. 25 Bom. 631 there are observations of Sir which may be regarded as enunciating the same principle. The rule itself is so eminently a workable one and steers clear of many difficulties which have sprung round the application of Section 47 that in my opinion, both the letter of the law and the reason of it demand that this principle should be given wide effect by in this country. I would therefore answer all the questions referred to us by saying that if the points for decision in an application before the executing relate to the rival rights of the decree-holder and of the judgment-debtor and also relate to execution, discharge, or satisfaction of the decree it should be dealt with in execution and not by separate suit. The right of appeal and second appeal will be governed by the same rules as affect application under Section 47."], "relevant_candidates": ["0000059777", "0000072520", "0000165215", "0000179243", "0000728993", "0000891538", "0000912714", "0001143451", "0001178884", "0001512454", "0001548702", "0001664377", "0001752424", "0001993897", "0062722291"]} {"id": "0000882004", "text": ["JUDGMENT , J. ", "1. This application arises out of a proceeding under Section 145 of the Code of Criminal Procedure, and the point raised is whether the com-potency of , as provided in Section 146 of the Code of Criminal Procedure consists in its territorial jurisdiction alone or also in its pecuniary jurisdiction. ", "2. The facts, as stated in the order under revision, show that the value of the property in dispute was perhaps more than Rs. 4,000/- and the reference, as provided under Section 146 of the Code of Criminal Procedure, had been made by the Magistrate, before whom the proceeding under Section 145 of the Code of Criminal Procedure was originally pending, to a munsif whose pecuniary jurisdiction., admittedly extended only up to Rs. 1000/- in those circumstances a preliminary objection was raised in that as the value of the property involved in the reference was more than Rs. 1,000/- that court had no jurisdiction to hear the reference. ", "The , however, on hearing the parties came to the view that \"the word 'competent' means the competent court of territorial jurisdiction and Section 6 of the C. P. C. will apply to suits and not to a proceeding\" and accordingly held that the objection was not tenable in law. And it is against this order that the present rule has been issued. ", "3. Before however, I enter into the discussion of the question raised, I think it is necessary to set out the relevant provisions of the Code of Criminal Procedure bearing on the subject. Clause (6) of Section 145 of the Code of Criminal Procedure provides :. ", "\"145(6) If the Magistrate decides that one of the parties was or should under the second proviso to Sub-section (4) be treated as being in such possession of the said subject, he shall issue an order declaring such party to be entitled to possession thereof until evicted therefrom in due course of law and forbidding all disturbance of such possession until such eviction and when he proceeds under the second proviso to Sub-section (4) may restore to possession the party forcibly and wrongfully dispossessed.\" ", "4. Thereafter Section 146 (1), so far as is relevant for the purpose of this case, states :. ", "\"146(1): If the Magistrate is of opinion that none of the parties was then in such possession, or is unable to decide as to which of them was then in such possession of the subject of dispute, he may attach it, and draw up a statement of the facts of the case and forward the record of the proceedings to a Civil Court of competent jurisdiction to decide the question whether any and which of the parties was in possession of the subject of dispute at the date of the order as explained in Sub-section (4) of Section 145 , and he shall direct the parties to appear before on a date to be fixed by him.\" ", "And finally Sub-clause (IB) of that section directs that on the conclusion of the inquiry will \"transmit its finding together with the record of the proceeding to the Magistrate by whom the reference was made and the Magistrate shall, on receipt thereof, proceed to dispose of the proceeding under Section 145 in conformity with the decision of .\" These provisions, in my opinion, make it clear that notwithstanding the reference, if any, made to , for a finding on the point of possession, the proceeding itself at no stage is ever transferred as a whole to the civil , so much so that on receipt of the opinion from , it is again the criminal which finally disposes of that application. ", "Further, even while it is pending there it lies within the discretion of the criminal , if it so likes as is provided in the proviso to Section 146(1) of the Code of Criminal Procedure, to drop the proceeding finally and to withdraw the attachment. That means, the proceeding even on reference made to the Civil on the point of possession retains its old moorings and does not change its character from a criminal proceeding to a civil proceeding and is as such all along kept in the seizin of the criminal for its final conclusion. ", "If that is so then what is referred to under Section 146(1) of the Code of Criminal Procedure is neither a suit, as contemplated under the Code of Civil Procedure, nor a proceeding as provided in its Section 141 , for Section 141 , as interpreted by their Lordships of in v. , 22 Ind App 44 (PC) (A), is meant to include original matters in the nature of stilts, namely, matters which originate in themselves and not those which spring up from a suit or from some other proceeding or arise in connection therewith , AIR 1927 Cal 534 (B). Therefore, in coming to a true decision on the point raised here what has to be considered is whether in a proceeding like the one stated above the jurisdiction of rests exclusively on territorial consideration or both on territorial and pecuniary. ", "5. Generally speaking, no doubt, it is true that the competency of under the Code of Civil Procedure cannot be determined irrespective of its pecuniary jurisdiction. But the language of Section 6 whereunder the Code of Civil Procedure deals with the pecuniary jurisdiction of is rather limited in its scope. It says : ", "\"6. Save in so far as is otherwise expressly provided, nothing herein contained shall operate to give any Court jurisdiction over suits the amount or value of the subject matter of which exceeds the pecuniary limits (if any) of its ordinary jurisdiction.\" ", "This shows that the consideration of pecuniary jurisdiction in the case of jurisdiction oi arises in the case of suits alone or at best for that reason in the case of tho e proceedings which are in continuation of suits or arise therefrom but in no case in the case of those which are neither suits nor arise therefrom or are connected therewith. Therefore, in my opinion, a reference made under Section 146 (1) of the Code of Criminal Procedure to not being either a suit or a proceeding, as held above, cannot be put to any limitation of pecuniary jurisdiction nor there is any indication cither in that section or in Section 6 of the Code of Civil Procedure in support of any construction like that, That being so, the contention, raised in this case 011 behalf of the petitioner that the learned Munsif to whom the reference was made is not competent to hear it fails. As for the decisions relied upon in support of that contention, namely, those in under 37 CM 574 (C); , ILR 16 Cal 457 (D); v. , AIR 1922 Pat 188 (E); , AIR 1940 Cal 161 (F); , AIR 1934 All 86 (G) and v. , ILR 35 Cal 571 (H), it is enough to say that they do not apply to the facts of this case. The first four cases deal with the pecuniary jurisdiction of a to which a decree is transferred for execution either under Section 39 of the Code of Civil Procedure or some such similar provision provided in other Acts and the decision in those cases is broadly speaking based on the principle that the word 'suit' as contemplated in Section 6 of the Code of Civil Procedure is not limited only to the proceedings in cause up to the passing of the decree hut on the other hand covers all its proceedings including those in execution. Therefore, they are not of any assistance in disposing of the present case. In the case reported in AIR 1934 All 86 (G), the reference made to was by a revenue , and in those circumstances the question raised was whether the provision of the Code of Civil Procedure applied to that proceeding. In answer thereto the learned Judges held that it was a proceeding of a character as contemplated under Section 141 and therefore the procedure laid down in the Code of Civil Procedure did apply to it. So the decision in that case is not based on the consideration of jurisdiction. In the last case, namely, the one reported in ILR 35 Cal 571 (H), the reference was under Section 55 of the Land Registration Act and originally had referred it to the District Judge. The District Judge in his own turn, however, transferred it to whose pecuniary jurisdiction was less than Rs. 2000/-. But as the value of the property involved in the proceeding was more than Rs. 2,000/- an objection was taken in that that it was not competent to hear the reference. The objector having failed there brought that question to . But unfortunately by the time the case came up for decision in the , became functus officio in that matter and so the proceeding in the had to be finally disposed of without any relief to the objector. Yet in the course of discussion, their Lordships expressed the view that the objection taken on the ground of pecuniary jurisdiction was a valid one. But the discussion on this point is rather scanty and is based on the general proposition that the competency of a consists both in territorial and pecuniary jurisdiction without any detailed discussion on the consideration as to whether the provisions of Section 6 of the Code of Civil Procedure did at all apply to a case like that. Therefore, these cases do not throw any light on the point raised here. ", "6. Lastly, our attention has also been drawn by the petitioners to the difficulties, which may arise in cases where Civil of different grades having the same territorial jurisdiction are found situated in the same area. In that case no doubt a ticklish question may arise as to which of the different a reference under Section 146 of the Code of Criminal Procedure will have to be made. The section, as it stands, is silent, on that point and this certainly may give rise to some unnecessary controversy. Therefore, perhaps it is better if the removes this lacuna as early as possible. But on the language as it stands at present, it has to be held that in such cases all these will have concurrent jurisdiction and in law the reference to any of them shall be a valid reference. So it will be open to the referring Magistrate to choose either of them for the matter of reference. Generally, however, I think it would be better if the Magistrate in making the reference avoid in over-crowding the of higher grade with unnecessary burdens. That means, in cases of proceedings under Section 145 of the Code of Criminal Procedure it would be better if the reference to be as a rule, made to a Court of the lowest grade unless otherwise the Magistrate is of opinion that the reference to a Court of higher grade is necessary in the circumstances of the case. ", "7. For the reasons stated above, I think it has to be held that this application is one without substance. It is accordingly dismissed but in the circumstances of the case there will be no order as to costs. ", ", ", "8. I agree. In my opinion, the question of pecuniary jurisdiction of in order to make it of competent jurisdiction within the meaning of Section 116 (1) of the Code of Criminal Procedure cannot reasonably arise. It is plain that pecuniary jurisdiction is out of place under Section 145 and for that matter under Section 146 of the Code of Criminal Procedure which is exclusively concerned with territorial jurisdiction. The legislature while amending the Code of Criminal Procedure under the 1955 Act and introducing these words hat not defined 'competent jurisdiction'. It has no doubt introduced some ambiguity. But to import the notion of pecuniary jurisdiction along with territorial in construing the scope of this expression is not warranted. The cases relied upon by learned counsel for the petitioner are all of them of a character which could be finally disposed of by to which they were referred either for execution or under the Bengal Land Registration Act of 1876 or under the Revenue Law. My learned brother has already pointed out that it is not so in respect of the reference under Section 146 (1) of the Code of Criminal Procedure. A finding by on the dispute as to which party is in possession is again sent back to which has to pass the final order. ", "9. The appears to have adopted this procedure in view of the fact that is in a better position to record a finding in such contentions disputes than . acts thus for a limited purpose in aid of as a friendly , as an amicus curiae, of that . This conclusion is further fortified by the fact that the legislature has carefully excluded any right of appeal, review or revision to the aggrieved party against the finding of on such reference under Sub- section 1 (c) of that section. There is yet another pertinent question of practical value. If this expression 'Civil of competent jurisdiction' were to include pecuniary jurisdiction as well, the referring Magistrate in every case will have to determine the value of the subject matter in dispute before him which may necessitate the recording of fresh evidence. It will, in any case, give rise to a new proceeding of an incidental character which may be open to challenge in a superior . If the Civil to which the reference is made has to determine the issue, the position, is worse still as that after recording evidence on the point may have to transmit back the record to me Magistrate making the reference if it finds that it is beyond its pecuniary jurisdiction. ", "10. In my opinion, therefore, any consideration of pecuniary jurisdiction which is relevant when after the case is transferred to it for execution of a decree or for other matters to record a final decision disposing of the rights of the parties in so far as it is concerned does not arise in the reference under Section 146 (1) of the Code of Criminal Procedure."], "relevant_candidates": ["0000162877", "0000370259", "0000804139", "0000944064", "0001129034"]} {"id": "0000884513", "text": ["PETITIONER: TATA CELLULAR Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT26/07/1994 BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) VENKATACHALLIAH, M.N.(CJ) PUNCHHI, M.M. CITATION: 1996 AIR 11 1994 SCC (6) 651 JT 1994 (4) 532 1994 SCALE (3)477 ACT: HEADNOTE: JUDGMENT: ", "The Judgement of the Court was delivered by J.-- Leave granted. ", "2.All these appeals can be dealt with under a common judgment since one and same issue requires to be decided. The brief facts are as under. ", "3.The , , invited tenders from Indian Companies with a view to license the operation of \"\" in four metropolitan cities of India, namely, Delhi, Bombay, Calcutta and Madras. Cellular mobile telephone means a telecommunication system which allows two-ways tele- communication between a mobile or stationary telephone to another mobile or stationary unit at a location. It may be within or outside the city including subscriber-cum-dialling and international subscriber-cum-dialling calls. The last date for submission of tender was 31-3-1992. The tender process was in two stages. First stage involved technical evaluation and the second involved financial evaluation. Those who were short-listed at the first stage were invited for the second stage. ", "4.Thirty bidders participated initially at the first stage. The first was constituted consisting of senior officers of . ", " was constituted on 6-4-1989 comprising a Chairman and four full-time Members: ", "1. Member (Production) ", "2. Member (Services) ", "3. Member (Technology) ", "4. Member (Finance) It short-listed 16 companies, 12 of which were eligible without any defect. However, in the case of 4 the recommended condonation of certain defects. Those four were : ", "1. ", "2. ", "3. Mobile Telecom Services ", "4. Between 19-5-1992 and 27-5-1992 the recommendations were submitted to . The matter came up for discussion among the members of the . On 27-5- 1992 accepted the recommendations of . The Chairman recommended that the short-list of bidders, the recommendations of and the proposal for financial bids be placed before at the earliest. ", "659 ", "6.It requires to be noted, at this stage, that a Selection Committee also described as comprising the Principal Secretary to the Prime Minister and three other Secretaries to the Government of India had been set up by the Minister for final evaluation of the bid. ", "7.Mr , a Member (Budget) of came to be appointed as Member (Services) on 29-5-1992. It appears met a number of times and discussed the matter with the Minister. He submitted an interim report on 16-7-1992. During this time the not only de novo exercised but also modified the short-list prepared by the Technical Evaluation and approved 14 companies. The Selection also met the representatives of equipment manufacturers for the selection of the licensees. On 20-7-1992, the revised financial bid and the short-list approved by the were put up before the Minister for approval. On 24-7-1992, further meetings of were held and the financial bid document was revised. On 28-7-1992, submitted its final report. Two bidders, namely, and were dropped from the short-list of 16 bidders. On 29- 7-1992, Mr was appointed as Director General of . He was authorised to exercise all powers of under Section 3 of the Telegraph Act. The Minister approved the issue of financial bids with modification to the short-listed companies as recommended by on 29-7-1992. The approval took place on 30-7-1992. ", "8.On 30-7-1992, the financial tenders were issued. It contained seven criteria which had been approved by . However, no marks were earmarked for any of the criteria. 17-8-1992 was the cut-off date for financial bid document. On this date the bids received from 14 companies were opened and read out to the bidders, who were present. As per the conditions, the quoted rental ceilings and the cities for which the bids were made, were read out. ", "9.Another consisting of senior officers examined the financial bids of the 14 short-listed companies. It adopted some parameter and devised the marking system which was not done by . On 2-9-1992, the second submitted its recommendations. However, the matter was referred back to it for a fresh gradation on the basis of 21.75 per cent interest rate in respect of 13 per cent rate which it had earlier adopted. On 7-9-1992 the recommendations were re-submitte. The operations recommended only 4 operators based on the evaluation and financial bids. was recommended as a first choice for all the four cities, as the second choice for both Delhi and Bombay, and as second choice for Calcutta and Madras. This was done since in his view no other bidder qualified for licence. On 10-9-1992 the Chairman of the directed that all the documents and recommendations be sent to for its consideration and for making final recommendations to the Government. When the file was put up to the Minister on 9-10-1992 he made three important notings : ", "1. In view of the time taken by the selection process be completed by internally; ", "2. Only one party may be granted licence for one city; and ", "3. The actual selection of the licensee should be made primarily on the consideration of rentals and the marks obtained in respect of foreign exchange inflow and outflow criterion and experience of the licensee. ", "10. On 9-10-1992, in accordance with this note, a list of 8 short-listed companies was prepared. The reasons for rejection of the 6 companies were recorded. The Chairman, in his final recommendation, made on 9-10-1992, noted that , and did not fulfil the conditions provided in clause 2.4.7 of Chapter 11 of the financial bid which requires that foreign exchange requirement be met by foreign collaborator. With regard to rejection of 6 bidders was rejected because some investigation against them was pending before the . However, the Minister reversed that decision as to the exclusion of and from the list of finally approved bidders and directed that the same be considered. ", "11.On 10-10-1992, the list was recast. was provisionally selected for the city of Madras. On 12-10-1992, the selected bidders were notified of their provisional selection subject to the acceptance of rentals and other terms as might be advised. ", "12.It is under these circumstances, four writ petitions were preferred bearing CWP Nos. 4030, 4031, 4032 and 163 of 1992. The petitioners were ", "1. (Petitioner in CWP No. 4030 of 1992) ", "2. (Petitioner in CWP No. 4031 of 1992) ", "3. (Petitioner in CWP No. 4032 of 1992) ", "4. (Petitioner in CWP No. 163 of 1992) ", "13.It was urged before that the decision of the in selecting 8 parties, two for each of the cities, was bad on the following grounds- ", "(i) bias ", "(ii)invoking certain hidden criteria ", "(iii)irrelevant considerations ", "(iv)bypassing ", "(v) selecting otherwise underqualified parties ", "(vi)marketing system which was evaluated by for grading various bidders. ", "14.So manipulated thereby a criterion was evolved which was tailormade to knock out the petitioners before or resulting in knocking out of the petitioner in the case of and . urged that it was the highest in the gradation. Its bid was not considered for a technical and flimsy reason; in that, the compliance statement required to be furnished with the bids was not complete. contended that its technical bid was left out on certain wrong premise. ", "15.Lengthy arguments were advanced before . On a consideration of those arguments the writ petitions of and were dismissed. CYR No. 4030 of 1992 filed by was allowed. A mandamus was issued to consider afresh the grant of licence to the petitioner therein, after evaluating marks for the rental on the basis the figures of deposits from subscribers given for Delhi and Bombay were accumulated. Similarly, CWP No. 163 of 1992 in which the petitioner was , was allowed. A direction was issued to reconsider the case of the petitioner, on the basis the compliance filed by it, as it was in order. To that extent the order granting licence to 8 parties (2 for each of the cities) was set aside. This judgment was pronounced on 26-2-1993. ", "16.After the judgment of , the matter was reconsidered in the light of the said judgment. A revised list of provisionally selected bidders was prepared on 27-8-1993. That is as follows : ", "Position as on 12-10-1992Position as on 27-8-1993 Bombay Bombay Max BPL Delhi India Telecomp Ltd. BPL Tata ", " ", "It could be seen from the above that TataCellular which was originally selected for Delhi has been left out. ", "Therefore, it has preferred SLP (Civil) Nos. 14191-94 of 1993. /s Hutchison ax Private Limited has apprehended that if the judgment of is not accepted it is likely to be displaced from the provisional selection list for Delhi. preferred SLP (C) No. 17809 of 1993. preferred SLP (C) No. 14266 of 1993. ", "17. Mr , learned counsel for the appellant, , argues that this is a two-staged tender. In the first stage, the evaluation had to be made on the basis of technical and commercial considerations. The bidders short-listed at the first stage would then compete in the second stage, namely, the financial bid. Chapter 11 contains general conditions framed into the bid. In paragraph 2.4.7 the financial projection of the proposed cellular mobile service was prescribed. The notes mentioned three criteria : ", "(i) Entire foreign exchange requirement shall be met by the foreign collaborator. ", "(ii) Minimum reliance on Indian public financial institutions will be preferred. ", "(iii) Debt equity ratio should not be more than 2 : 1. ", "18. It is borne out by records that out of the seven criteria in evaluating the financial bid, six parameters alone were taken into consideration. For rental parameter the evaluation committee took into account the equity rental ceiling, security deposits installation and other charges indicated in the bid which were the same in the case of all the bidders. This was done in order to arrive at an equated or effective figure of monthly rental for each bidder. It is not open to the to totally ignore this criterion when the Chairman's note dated 9-10-1992 specifically states that the companies would be asked to comply with the conditions of financial bid in clause 2.4.7 of Chapter II while granting licences. When this is the position, strangely, the appellant is informed as follows : ", "\" (Telecom Commission) New Delhi - 11 000 1 No. /92-TM Dated: 27-8-1993 To, (Kind attention Subject:Tender No. 44-21/9 1 -MMC (FIN) for franchise for Cellular Mobile Telephone Service for Bombay, Delhi, Calcutta and Madras. ", "Sir, Kindly refer letter of even No. dated 12-10- 1992 informing you that you have been provisionally selected for franchise for providing cellular mobile telephone service at .... on a nonexclusive basis. ", "2. The matter has been reconsidered in the light of the judgment delivered by in this case. .......... have now been provisionally selected for franchise for providing cellular mobile telephone service at in place of ........... on a non-exclusive basis. The other franchise selected for is with of.......as their foreign partner.3. The details of the rental, deposits and other terms fixed for the franchise will be intimated to you shortly. ", "663 ", "4.Kindly get necessary formalities completed by 30-9-1993. Yours faithfully, ) DDG (TM)\" ", "19. The second ground of attack is bias. In that, Mr , Member of Production in , who was appointed as Member (Service) on 29-5-1992, participated. From the Adviser the file went to Member (Service). The note of Mr is dated 21-5-1992. He agreed with the recommendation of that four firms which had some deficiencies should be included in the short-list. They were , , and . Therefore, was approved by Mr . Admittedly, Mr 's son is employed in . ", "20. in dealing with the allegations of bias made against Mr held: \"Nexus of father and son in the chain of decision-making process is too remote to be of any consequence. It is quite interesting to note that of the four companies which were having some deficiencies in their tender documents in the first stage and were recommended for consideration by the first , three companies including made it to the final list of eight. Plea of bias is not alleged in the selection of other two companies. In the circumstances it is not possible for us to hold any allegation of bias made against .\" ", " concluded: ", "\"We do not think in a case like this the mere fact that was part of the machinery to make selection was enough to show that there could be reasonable suspicion or real likelihood of bias in favour of BPL.\" ", "This finding is wrong. Mr 's participation from the beginning would constitute bias. In support of this submission, the learned counsel relies on (and particularly the passage occurring at SCR p.587), v. (SCR at p. 334: SCC p. 112) and (SCC paragraph 16 at p. 440 and 441). The English decision on this aspect which will support the contention is: v. . ", "21. In law, there is no degree of bias. Even otherwise in the implementation of the judgment of , if this appellant is to be eliminated, it ought to have been afforded an opportunity. Had that been done it would have pointed out several factors, namely, the omission to consider relevant material, namely, parameter seven, the prejudice caused by the award of marks after the bids were opened. The was obliged to disclose the maximum marks for each criterion at the threshold of the 1 1957 SCR 575: AIR 1957 SC 425 2 (1984) 4 SCC 103, 112: (1985) 1 SCR 322 3 (1985) 4 SCC 417: 1986 SCC (L&S) 88 4 (1968) 3 All ER 304, 310: (1969) 1 QB 577: (1968) 3 WLR financial bid in the interest of transparency and to ensure a non-arbitrary selection. ", "22.In the case of most of the bidders the foreign exchange is not met by the foreign collaborator. In the case of the debt equity ratio is 1 : 1. Their total project cost is stated to be Rs 101 crones. This means Rs 50.50 crores represent equity and the other Rs 50.50 crores represent external commercial borrowing. In this case, the entire foreign exchange is not met by the foreign collaborator. Therefore, there is a breach of the fundamental condition of the bid. This would constitute a disqualification which is a bar at the threshold. Had this condition been strictly applied , , , , would have been eliminated. Likewise, also did not fulfil this condition. ", "23.It was a mandatory condition that a foreign collaborator indicated at the first stage-of tender, could not be changed thereafter. Inter alia on the strength of credentials of foreign collaborators the bid is considered. If a change is allowed it would amount to technical violation of the bid. Yet in the case of one of its foreign collaborators, namely, withdrew from the collaboration. In spite of this, the breach was disregarded. The bidder had to famish proof that he had obtained the approval of foreign collaboration or filed application before the competent authority. had not even filed an application before the competent authority yet its tender was considered and approved. On the very same ground, while had been disqualified, equally it should have been applied to . ", "24. had been rejected at various stages of consideration on the ground that there was criminal complaint/investigation pending against it. The Minister had also agreed but reversed that decision on the last day and directed its consideration for inclusion in Madras on the purported ground that Madras was the least popular of the stations and that if any delay is caused due to complications on account of investigation would have the least adverse effect for lack of competition. noted that no material had been brought on record to show that there was any complaint against . But, factually, to the knowledge of the , a criminal case stood registered against in June 1993, before making the final selection. The , instead of rejecting on that ground, upgraded it from Madras to Delhi in disregard of the decision of the Minister. ", "25. Any foreign collaboration has to be approved by an inter-ministerial committee called . No proposal for foreign collaboration could be evaluated by the without receiving the approval from the . Even under the tender documents the bidders were required to show that they had applied for such approval. ", "26. Having regard to all these, the selection is vitiated by arbitrariness or unfairness. ", "665 ", "27. Mr , learned counsel, appearing for attacks the selection as arbitrary on the following three grounds : ", "1. Bypassing and entrusting to a which did not follow the norms. ", "2. Certain hidden criteria which were not disclosed earlier, were applied not as parameters, but for elimination. ", "3. There are five glaring errors in the selection. One such error is in the case of . It supports its bid on the strength of the foreign exchange that may be obtained from foreign tourists. This is something incomprehensible. ", "Elaborating these points it is urged that after short- listing, the selection committee did not select at all. The counter-affidavit filed on behalf of does not mention that there was a delay by , as held by . On the contrary, the facts disclose there was no delay whatever. ", "28. Two hidden criteria were postulated. (i) Persons having less than one lakh experience will not be considered. (ii) If two bidders have the same collaborator in relation to foreign exchange that bid will not be considered. These criteria were evolved after 18-8-1992. When one looks at the conditions of tender, paragraph 2.2.1 talks of subscriber's capacity. That does not mention about the nature of experience. Equally, paragraph 2.4.5 makes no mention about one foreign collaborator for each bidder. In the case of it was having only eighty-one thousand lines. The criterion of 80 thousand GSM was prescribed only to favour . ", "29. If no change of foreign collaborator is allowed at the stage of financial assessment after the technical committee has passed its bid, in the case to permit such a change to BPL, is clearly arbitrary. ", "30. was excluded because it has the same foreign collaborator, namely, . However, in the case of , that test was not applied. Its collaborator is . The same has been the collaborator with . This would amount to adopting double standards. ", "31. As against BPL the attack is as under: ", "1. BPL did not apply to but to (). ", "2. The foreign collaborator was changed in the middle, as submitted above, inasmuch as withdrew. The joint venture is gone when was given up. ", "3. Mr was biased in favour of . ", "4. Total marks awarded are five. The idea is indigenous equipment whereas what has been done by is to quote higher customs duty. ", "32. Insofar as is preferred for Delhi that again is arbitrary. There is a inquiry pending against it. Secondly, the foreign exchange is sought to be procured by international roaming and it is awarded 10 marks out of 10. ", "33. Mr , learned counsel, appearing for submits, firstly, the limits of judicial review in the matter of this kind will have to be examined. Such limits could be gathered from .5 and .6 which lay down the methods of reaching conclusion. ", "34. Generally speaking, in entering into contracts, the public authority is not like a private person. The question to be asked is, have the guidelines been laid down, if so laid down, have they been observed? In this case, was originally allotted Delhi. By reason of reconsideration pursuant to the judgment of , it has now been allotted Calcutta. This is wrong. ", "35. In clause 7 of the General Conditions it is stipulated that there can be no change of foreign collaborator. In clause 13, a certificate requires to be produced. In a number of cases no such certificate has been produced. Paragraph 2.4.5 of Chapter 11 of General Conditions lays down one of the parameters is the experience of foreign operating partner. In the case of , has no experience. 's sole function is service. Therefore, its experience should not have been added. In paragraph 1.4 the nature of services is listed. These are not the services offered by . did not produce any certificate likewise . ", "36. The argument on behalf of , petitioner in Transferred Case No. 49 of 1993 is that it was an eligible bidder but has never been communicated the reason as to why it came to be rejected. On 29-9-1992, the records that reasons must be given. Yet no reasons are furnished to the petitioner. Even though the Tender Evaluation held the petitioner to be qualified yet its bid had been rejected without communicating any reason whatever. .7 (SCC at p. 763, paragraph 18) this Court has held that there is an obligation to communicate the reasons. ", "37. Mr , learned counsel appearing for , in opposing the arguments advanced on behalf of the appellants, submits that service operation should not be read in a narrow sense. In telephone industry there could be operation as well as service. While defining the service, relying on paragraph 2.1 is wrong because services are defined in paragraph 1.4 whereas paragraph 21 refers only to obligations of licensee. Besides, the services are also essential, they should be regarded as a part of operation. ", "38. Mr , learned counsel, appearing for states that his client has been awarded Madras city. It is submitted that in the absence of mala fides the individual marking system should not have been 5 (1993) 1 SCC 445 6 (1993) 3 SCC 499 7 (1990) 3 SCC 752 interfered with as far as foreign exchange is concerned. In the case of his client regarding the foreign exchange sourcing, inflow is more than the out flow. ", "39. Mr , learned counsel appearing for submits that though this respondent supports the judgment of , insofar as it is allowed the writ petition filed by , the same ought to be reconsidered. The bid of was rejected since it had filed an incomplete compliance report. has chosen to accept the bid of on four grounds : ", "1. The approach of the was hyper-technical. ", "2. Compliance statement is akin to verification in a pleading. It cannot be placed on a higher pedestal than verification. ", "3. The ought to have allowed rectification since it was purely a mistake unintentionally made. ", "4. Inasmuch as the had allowed a favourable treatment in the case of and the same treatment ought to have been accorded to as well. ", "These findings are attacked on the following grounds. The tender documents both technical and commercial bid as well as the financial bid clearly lay down the manner of compliance. Clause 3 of the technical bid states, in the event of the compliance report not being enclosed with the offer, the offer shall not be considered. Equally, in relation to financial bid, Chapter I states that any offer received after the due date and time shall be rejected. The various other clauses also postulate a strict compliance. If, therefore, the bid is incomplete the offer ought to have been rejected. Hence, there is no question of condoning the defect. If the view of is to prevail it would amount to allowing a post tender modification on a select basis, that is, on the basis whether the mistake was intentional or unintentional. Where the has chosen to reject, cannot sit in judgment. To state it is like verification of pleading is to overlook that the pleadings are governed by the verification. That is not the case here. The comparison with and is also incorrect. In the case of there is an unconditional compliance. Only in the covering letter a view has been expressed about the economic viability of the services and the bidders' preference. Hence, it cannot be contended that the bid was conditional, in any manner. Similarly, was not accompanied in this regard. ", "40. The allegation against this respondent that the foreign exchange requirement has not been met is incorrect. The documents filed by the respondent clearly show that there is a surplus of approximately three crore rupees, available from the foreign collaborator, in the first year. The allegation of that the bidder was responding on the basis of one party per city and the proposal for licence for a period of 20 to 25 years is factually incorrect. Equally, to state that this respondent quoted a lower customs duty and thereby got higher marks is incorrect. The financial bid of the respondent shows that this had taken customs duty at 95 per cent for the first year when the backlog of the equipment is to be imported. For the subsequent years, the projection was made on a reduced customs duty in view of the announced policy of the Government to reduce customs duty and to bring them in line with international levels. ", "41. The argument that there is a common collaborator of and proceeds on the footing that is collaborating with . That has a service privately in agreement with . Thus, is the common foreign collaborator of and . This is not correct. has its foreign partner for the purpose of setting up a leading cellular network cooperator of U.K., namely, . as network operator is the owner of Cellular Network. It is responsible for the setting up of the network in U.K. where cellular network operator can also be a service provider. has been issued a licence as the cellular network operator under Section 7 of the U.K. Telecommunications Act of 1984. It is known as a public telecommunication operator. has about 30 service providers in U.K. including . It has no equity in . There are no common directors on the boards of two companies. is the foreign collaborator of . It has no collaboration agreement with . In regard to it has only a collaboration agreement with which is a mere service provider. ", "42. Arguing on behalf of Mr , learned counsel submits that the technical competency and capacity to execute the contract by this respondent with its joint venture partner is not in doubt. was short-listed by itself. It was amongst the 12 tenderer short-listed in the first list. The joint venture collaborator of , namely, is a reputed international company having large-scale operation in U.S.A. As regards the foreign exchange inflow and outflow it is submitted that has projected its stand that the foreign exchange inflow will be from foreign tourists and business travelers visiting the city of Delhi. The expression \"international roaming\" has been used in relation to such foreign tourists and business travellers. Internationally, cellular phones are used by two categories of persons, (1) subscribers residing in the city who would use the phone on a permanent basis, (2) the tourists and business travellers visiting the city who would use the phone on a temporary basis. Inasmuch as the foreign tourists and foreign business travellers make the payment in foreign currency it will be a source of foreign exchange. What is required under the tender condition is the projection of foreign exchange inflow and outflow relating to the cellular phone contract. This means inflow in foreign exchange as a result of the operation of cellular phone system. Hence, the bearing from tourists and business travellers is a very relevant consideration. Like this respondent, selected for the Bombay city also projected for the foreign exchange openings by the use of cellular phone by tourists and business travellers. The argument that the foreign tourists and business travellers are not likely to use cellular telephone is not correct since the calls made through the cellular telephones are not only cheaper but also available as a 24 hours' companion. That, of course, is a greater facility. In the note made by the Minister it has been mentioned that the respondent has undertaken to be bound by conditions contained in the tender documents to the effect that the entire foreign exchange requirement shall be met by the foreign collaborator. In fact, the foreign collaborator has also confirmed this. ", "43. As regards the allegation of inquiry, it is submitted that the learned Judges of perused the note of the Chairman, . It was only after this the Court held that there were no strictures against holding company of by the name , in v. . It was further held that it appears to have been punished for no sin of it. There was no inquiry on the date of the above judgment. It was after the judgment dated 10-7-1993, the FIR was filed which has been allowed to be proceeded with by way of directions in petition under Section 482 of the Criminal Procedure Code. This Court in .9 has laid down that pending investigation blacklisting cannot be permitted. The said 1 ratio will apply to this case. ", "44. Mr , learned counsel appearing for submits that this respondent was rejected by the committee. That was questioned in the writ petition. directed reconsideration of its bid. With regard to compliance statement it was stated that the company agrees to fully comply with all paragraphs of Chapter II of the General Conditions and Chapter V : Tariffs of Document No. 44-21/91-MMC(FIN) without any deviation and reservation. No doubt, there is a failure, in the first instance, to state about compliance with Chapters 11 and IV This is an accidental omission. It amounts to a clerical error as laid down in v. City of Rochester10. If it is a mistake in relation to non- essential or collateral matter it could always be condoned. in has held that it is always a matter of form and not of substance. Other argument is advanced that there is a defect in the compliance statement. ", "45. The alternate submission is, the question of error does not arise since the compliance statement was filed on 11-9- 1992 while the contract came to be awarded only on 12-10- 1992. In such a case the question would be what is the scope of judicial review? The court could interfere in the following three categories of cases ", "1. Quasi-judicial 8 (1992) 4 DLT 24 9 (1975) 1 SCC 70: (1975) 2 SCR 674 10 44 L Ed 373 : 178 US 1108 (1899) 11 AIR 1932 PC 76: 59 IA 92: ILR 7 Luck 1 ", "2. Administrative, for example, price fixing ", "3. Award of contracts Here, the matter is technical in relation to award of contract. Judicial review does not mean the court should take over the contracting powers. The parameters for interference in such matters would be ", "(i) Mala fide ", "(ii) Bias ", "(iii) Arbitrariness to the extent of perversity. If none of these is present, the court should not interfere. It must be left to the authorities. The contrary arguments advanced on behalf of the appellants against this respondent are not tenable. ", "46. Mr , learned counsel appearing for in the foremost argues by way of preliminary submissions that three questions will arise at the threshold. ", "(a) The scope and ambit of judicial review with regard to decisions bona fide arrived at in tender cases (pre- contract). ", "(b) The applicability of judicial review in these cases. ", "(c) The interference under Article 136 of the Constitution where the power of judicial review has been exercised by under Article 226. ", "47. It is submitted that the reasonableness in administrative law means to distinguish between proper use or improper use of power. The test is not the court's own standard of reasonableness. This Court has reiterated this proposition in . There is a possibility of fallibility inherent in all fact- findings. To insist upon a strict compliance with each and every tender document is not the law. This Court upheld the waiver of technical, literal compliance of the tender conditions in v. 1 3. In the present case, the short-listing at the first stage, the allotment of cities at the second stage and the selection of franchisees qua cities at the third stage were after evaluating the financial bid by a collectivity of persons at different level. Therefore, possibility of elimination of arbitrariness is conceived in the system itself. Further, has analysed properly and come to the proper conclusion. That being so, this Court will not interfere by exercising its powers under Article 136 of the Constitution of India. The argument about hidden criteria would not affect or benefit this respondent directly or indirectly. Even otherwise, the hidden criteria cannot be impugned. There is no mention of any particular criterion on the basis of which the selection was to be made. At the second stage what was required to be kept in mind were the parameters mentioned in paragraph 2.4. The criteria for selection to each of the four cities had to be provided inter alia because the tenderer did not tender for one city alone but for more than one. The allegation of bias on the 12 (para 43-46) 13 part of Mr is without substance. It is submitted, whenever disqualification on the ground of personal involvement is alleged : ", "(i) the person involved (for example related) must be the decision-maker; ", "(ii) there must be sufficient nexus between the decision- maker and the party complaining in order to justify the real likelihood of bias. ", "48. After a decision is reached the standard of proof of bias is higher as laid down in v. 14. This decision has been referred to by this Court in 15. The learned counsel after referring to the relevant case law submits that cases of bias and ostensible bias had to be regarded in the light of their own circumstances. In this case Mr is only one of the officers in , which has over 5500 employees and 89 officers of his rank in 27 offices all over India. Mr was not the decision-maker at all. He was one of the recommending authorities. His involvement in the approval and selection of the tender was indispensable. He was originally the Member (Services) on 29-5-1992. Thereafter he became Director General, by a notification issued by 28-7-1992 by the President of India. As such, he was to exercise all powers of under Section 3(6) of the Act. Therefore, was right in applying the doctrine of necessity. This doctrine has come up for discussion in 16. ", "49. Whatever it may be, cannot take the point of bias. It took the chance and benefit of being short-listed despite the knowledge of Mr 's involvement. Equally, did not raise the allegation of bias in . In fact, it opposed the plea of bias. ", "50. No doubt, this respondent dropped as a foreign collaborator. That does not amount to change where one out of two or three collaborators is dropped. This foreign collaborator was required as Condition No. 7 only in financial bid documents not in tender documents. This respondent submitted financial bid on 17-8-1992 showing only two of the collaborators. was not shown as that was already dropped out. Therefore, rightly held that was not taken into consideration in awarding marks for foreign partners' experience. The object of the first stage was not to allot the franchise but to short-list the parties. ", "51. The learned Solicitor General produced the copies of the relevant documents in the file and took us through the same. It is submitted, after outlining the process of evaluation in the second stage six parameters were adopted by the Committee consisting of Telecom experts who are none other than the senior officers of . The parameters are as follows : ", "1. Quoted rental ceiling 14 AIR 1945 PC 38: 221 IC 603: 1945 All LJ 34 15 (1987) 4 SCC 611: 1988 SCC (L&S) 1: (1987) 5 ATC 11 3: (1988) 1 SCR 512 16 (1990) 1 SCC 613 ", "2. Project financing plan 3 . Foreign Exchange inflow and outflow ", "4. Project's plan for cellular equipment within the country including the tie-up with the proposed Indian manufacturers. ", "5 . Experience of foreign operating partner and ", "6. Financial strength of parameters/partner companies. These parameters were assigned marks. The evaluation report including the ranking arrived at by the tender evaluation committee was then put up to for further consideration and selection. Due to technical considerations not more than two bidders per city could be accommodated. Paragraph 14 of the bid conditions provided that each bidder must furnish a declaration in a specified form to the bid documents. The declaration given by was complete. However, its bid had to be rejected on merits in spite of securing high marks. ", " M/s secured the second place for Calcutta. Inasmuch as they had the same foreign partner as which secured a higher place than , it was rejected and the choice went to the next bidder in the marking list. After the above considerations were taken into account, the remaining companies were selected which led to the writ petition. Pursuant to the directions the matter was reconsidered and selections have been made as was done earlier. ", "53. The principal objection of is that was not justified in scrutinising the tendering process in such detail. The minute examination is unwarranted because cannot constitute itself the selecting authority. However, no appeal is preferred, as otherwise, it would have further delayed the introduction of very valuable communication facility in this country. Beyond that, it has no particular interest as to who is selected. However, it becomes necessary to answer the allegations made about the actual selection and whether there was any bias on the part of the selection committee. The selection process was dictated by the, exigencies of the situation. It is a question, as to what one could settle for, in the given circumstances. The was embarking upon a totally new technology project, for the first time. At that stage, it was impossible to predict what kind of response will there be. Therefore, it is impossible to predicate the cut-off limits which could be set or which conditions have to be relaxed or softened. The allegation of bias, it is held, must be a case of reasonable possibility or likelihood of bias. In this case, there is no such reasonable likelihood. Mr was not influenced directly, or, in any other manner, subtle or otherwise. He did not, in fact, participate in any of the significant or crucial stages in the selection process. Even otherwise, the relationship is not such as to give reasonable apprehension of bias. In support of this argument reliance is placed on and v. State of Haryana3 ( p. 441, para 16). As regards the parameter in relation to project financing it was kept in view by taking into account the estimated number of subscribers, installation charges, monthly rental, any other charges etc. They were included in the competition. The other parameters of the bidders were treated on the same footing as regards this parameter is concerned. Concerning rental, it was specifically averred in the counter before that the other charges had also been included while calculating quoted rental. ", "54. It is not correct to contend that 's experience is not relevant. In the United Kingdom the operation of is handled by the network cooperator and a proper service provider, acting together. The licensee is required to perform the combined functions of a network operator as well as service provider. The duties and functions of a licensee are not limited to making available the services as defined. In fact, the principal obligation of the licensee is expressed generally in paragraph 2. 1. 1. A reading of the other clauses makes it clear that it is incumbent upon the licensee to provide services. Therefore, the experiences of a network operator and the service provider are both important and relevant. ", "55. In the case of the attack is that the cut-off came to be reduced to 80,000 subscribers to accommodate it. mentioned in its tender, as on 31-12-1991, the name of which had 80,000 subscribers. By 31-12-1991, it would have got increased to more than one lakh. In August 1992 when the bids were submitted 's line of experience could reasonably be expected to be more than one lakh. had a GSM licence. Having regard to these facts, it would not be an unreasonable estimate, for the experts, to conclude that was having experience of over one lakh lines. ", "56. It is alleged that the debt/equity ratio of has not been properly taken. ratio was 1.5 and was correctly assigned 3 marks. ", "57. alleges that , , and have breached note (ii) under para 2.4 which provides that minimum reliance on will be preferred. The bid profess made distinction between loans from Public Financial Institutions and . The criticism of confuses this requirement with loan from . The criterion, it is submitted, was correctly applied. ", "58. In the evaluation of process open market purchase was left out of consideration. ", "59. Since bid for Madras showed that they had projected their operations in Madras for initial years, would be below profitable levels. In such a case, no dividend would have to be paid to the foreign collaborators. Accordingly, it was concluded that the foreign exchange inflow position was better. ", "60. International roaming is a relevant consideration. From the tender document it will be clear that it provides for facility of roaming to visitors. Roaming facility for a tourist is available in the GSM system. Even if this condition has been relaxed in favour of certain bidders, there is nothing wrong. Reliance is placed on . ", "61. With regard to the foreign collaborator of there was no change. is one of the foremost in the world in this technology. It remained as foreign collaborator of . Dropping out of did not violate the bid conditions which were really aimed at preventing a new and, therefore, unknown collaborator being introduced at the financial bid stage. The second did not see this as a violation. In any event, where the judgment of had been given effect to and a proper evaluation has been done, no interference is warranted. ", "62. Mr , learned counsel, in his reply, would submit that as regards the scope of judicial review the American cases cited by Mr would not apply. As laid down in judicial review is confined to decision- making process. This being an administrative action the scope of judicial review could be gathered from v. . In v. the law has been stated as to when subjective satisfaction could be interfered with under judicial review. This Court also had occasion to deal with similar contracts and stated the law relating to judicial review in .5 (SCC pp. 455 and 458, para 19) and then again, in .6 ", "63. The point against is, the defect in its tender, came to be pointed out, requiring it to comply with the same. In view of the defect came to be excluded. ", "64. Mr 's participation from the beginning would constitute bias in law. ", "65. Mr , in his reply, would state that in the case of Max the mistake was committed in the offer with regard to compliance statement. The principle of bias as laid down in R. v. Essex Justices (), ex p Perkins21 would apply. Similar passage occurs in Constitutional and Administrative Law (4th Edn.) p. 268. ", "66. Mr , in reply, would urge that the hidden criteria were evolved in relation to common foreign collaborator. This shows that there was lack of candour on the part of the . It is mentioned that was taken into consideration. It is not so, as seen from the file. The conditions were tailor-made to suit and . ", "17 (1990) 2 SCC 488 (para 18) 18 (1989) 2 SCC 505, 524: (1989) 1 SCR 176, 202 19 (1985) 1 AC 374: (1984) 3 All ER 935: (1984) 3 WLR 1174 20 1977 AC 1014: (1976) 3 All ER 665: (1976) 3 WLR 641 21 (1927) 2 KB 475: 1927 All ER Rep 393: 96 UKB 530 ", "67. Mr would urge that the rule relating to judicial review should not be applied here because it is one of selection by an a administrative process. ", "68. Having regard to the above arguments we propose to deal with the matter from the following five aspects : ", "1. The scope of judicial review in matters of this kind. ", "2. Whether the selection is vitiated by arbitrariness? ", "(a) regarding financial projection and (b) regarding rental. ", "3. Bias of Mr whether affected the selection ? ", "4. Whether has been bypassed? ", "5. Evolving of hidden criteria whether valid? ", "1. Scope of Judicial Review ", "69. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated, the following are the requisites of a valid tender : ", "1. It must be unconditional. ", "2. Must be made at the proper place. ", "3. Must conform to the terms of obligation. ", "4. Must be made at the proper time. ", "5. Must be made in the proper form. ", "6. The person by whom the tender is made must be able and willing to perform his obligations. ", "7. There must be reasonable opportunity for inspection. ", "8. Tender must be made to the proper person. ", "9. It must be of full amount. ", "70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the . It is expected to protect the financial interest of the . The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. ", "71. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justifiable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. ", "676 ", "72. Lord in Nottinghamshire County Council v. Secretary of for the Environment22 proclaimed : ", "\" 'Judicial review' is a great weapon in the hands of the judges; but the judges must observe the constitutional limits set by our parliamentary system upon the exercise of this beneficial power.\" ", "Commenting upon this and in their work Judicial Review (1992 Edn.) at p. 16 say : ", "\"If anyone were prompted to dismiss this sage warning as a mere obiter dictum from the most radical member of the higher judiciary of recent times, and therefore to be treated as an idiosyncratic aberration, it has received the endorsement of the Law Lords generally. The words of Lord were echoed by Lord of Harwich, speaking on behalf of the Board when reversing an interventionist decision of in v. 18-3- 1991.\" ", "73. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action. ", "74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself. ", "75. In Chief Constable of v. Lord Brightman said : ", "\"Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made. Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power.\" ", "In the same case Lord commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms : ", "\"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practiced at the , administrative. It is not intended to take away from those authorities the powers and 22 1986 AC 240, 251: (1986) 1 All ER 199 23 (1982) 3 All ER 141, 154 discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160).\" ", "In R. v. Panel on Takeovers and Mergers, ex p Datafin plc24, Sir , M.R. commented: ", "\"An application for judicial review is not an appeal.\" In v. Secretary of State for , Lord said: \"Judicial review is a protection and not a weapon.\" ", "It is thus different from an appeal. When hearing an appeal the is concerned with the merits of the decision under appeal. In , Re26, Lord observed that : ", "\"Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made.... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer.\" ", "76. In v. , ex p in , Lord , M. referred to the judicial review jurisdiction as being supervisory or 'longstop' jurisdiction. Unless that restriction on the power of the court is observed, the court will, under the guise of preventing the abuse of power, be itself guilty of usurping power. ", "77. The duty of the court is to confine itself to the question of legality. Its concern should be : ", "1. Whether a decision-making authority exceeded its powers? ", "2. Committed an error of law, ", "3. committed a breach of the rules of natural justice, ", "4. reached a decision which no reasonable tribunal would have reached or, ", "5. abused its powers. ", "Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under: ", "24 (1987) 1 All ER 564 25 (1989) 2 All ER 609 26 Amin v. Entry Clearance Officer, (1983) 2 All ER 864 27 (1990) 1 QB 146: (1989) 1 All ER 509 ", "(i) Illegality : This means the decision- maker must understand correctly the law that regulates his decision-making power and must give effect to it. ", "(ii) Irrationality, namely, Wednesday unreasonableness. ", "(iii) Procedural impropriety. ", "The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in for , ex Brind28, Lord refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, \"consider whether something has gone wrong of a nature and degree which requires its intervention\". ", "78. What is this charming principle of Wednesday unreasonableness? Is it a magical formula? In R. v. , Lord considered the question whether mandamus should be granted against . He expressed the relevant principles in two eloquent sentences. They gained greater value two centuries later : ", "\"It is true, that the judgment and discretion of determining upon this skill, ability, learning and sufficiency to exercise and practise this profession is trusted to and this will not take it from them, nor interrupt them in the due and proper exercise of it. But their conduct in the exercise of this trust thus committed to them ought to be fair, candid and unprejudiced; not arbitrary, capricious, or biased; much less, warped by resentment, or personal dislike.\" ", "79. To quote again, and ; in their work Judicial Review (1992 Edn.) it is observed at pp. 119 to 121 as under : ", "\"The assertion of a claim to examine the reasonableness been done by a public authority inevitably led to differences of judicial opinion as to the circumstances in which the court should intervene. These differences of opinion were resolved in two landmark cases which confined the circumstances for intervention to narrow limits. In v. Johnson3O a specially constituted divisional court had to consider the validity of a bye- law made by a local authority. In the leading judgment of Lord of Killowen, C.J., the approach to be adopted by the court was set out. Such bye-laws ought to be 'benevolently' interpreted, and credit ought to be given to those who have to administer them that they would be reasonably administered. They could be held invalid if unreasonable : Where for instance bye-laws were found to be partial and unequal in their operation as between different classes, if they were manifestly unjust, if they disclosed bad faith, or if they involved such oppressive or gratuitous interference with the rights of citizens as could find no justification in the minds of reasonable men. Lord 28 (1991) 1 AC 696 29 (1768) 4 Burr 2186 : 98 ER 139 30 (1898) 2 QB 91: (1895-9) All ER Rep 105 emphasised that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or convenient. ", "In 1947 confirmed a similar approach for the review of executive discretion generally in v. . This case was concerned with a complaint by the owners of a cinema in Wednesbury that it was unreasonable of the local authority to licence performances on Sunday only subject to a condition that 'no children under the age of 15 years shall be admitted to any entertainment whether accompanied by an adult or not'. In an extempore judgment, Lord , M.R. drew attention to the fact that the word 'unreasonable' had often been used in a sense which comprehended different grounds of review. (At p. 229, where it was said that the dismissal of a teacher for having red hair (cited by in v. Poole Corpn.32, as an example of a 'frivolous and foolish reason') was, in another sense, taking into consideration extraneous matters, and might be so unreasonable that it could almost be described as being done in bad faith; see also R. v. , ex p Chetnik Developments Ltd.33 (Chapter 4, p. 73, supra). He summarised the principles as follows: ", "\"The is entitled to investigate the action of the local authority with a view to seeing whether or not they have taken into account matters which they ought not to have taken into account, or, conversely, have refused to take into account or neglected to take into account matter which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four comers of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority has contravened the law by acting in excess of the power which has confided in them.' This summary by Lord has been applied in countless subsequent cases. ", "\"The modem statement of the principle is found in a passage in the speech of Lord in v. Minister for Civil Service19: ", "31 (1948) 1 KB 223: (1947) 2 All ER 680 32 (1926) 1 Ch 66, 91: 1925 All ER Rep 74 33 1988 AC 858, 873: (1988) 2 WLR 654: (1988) 1 All ER 961 'By \"irrationality\" I mean what can now be succinctly referred to as \"Wednesbury unreasonableness\". ( v. ) It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at.' \" ", "80. At this stage, The Supreme Court Practice, 1993, Vol. ", "1, pp. 849850, may be quoted : ", "\"4. Wednesbury principle.- A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. ( v. . 3 1, per Lord , M.R.)\" ", "81. Two other facets of irrationality may be mentioned. (1) It is open to the court to review the decision-maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in v. , the Secretary of referred to a number of factors which led him to the conclusion that a non-resident's bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. analysed the factors which led the Secretary of to that conclusion and, having done so, set it aside. , L.J. said that he could not see on what basis the Secretary of had reached his conclusion. ", "(2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On this basis in v. , ex p Johnson35 the condition imposed by a local authority prohibiting participation by those affiliated with political parties at events to be held in the authority's parks was struck down. ", "82. in Administrative Law, 2nd Edn., p. 584 has this to say : ", "\" If the scope of review is too broad, agencies are turned into little more than media for the transmission of cases to the courts. That would destroy the values of agencies created to secure the benefit of special knowledge acquired through continuous administration in complicated fields. At the same time, the scope of judicial inquiry must not be so restricted that it prevents full inquiry into the question of legality. If that question cannot be properly explored by the judge, the right to review becomes meaningless. 'It makes judicial review of administrative orders 34 (1980) 41 P & CR 255 35 (1989) 88 LGR 73 a hopeless formality for the litigant.... It reduces the judicial process in such cases to a mere feint.' Two overriding considerations have combined to narrow the scope of review. The first is that of deference to the administrative expert. In Chief Justice 's words : ", "'I have very few illusions about my own limitations as a judge and from those limitations I generalize to the inherent limitations of all appellate courts reviewing rate cases. It must be remembered that this sees approximately 1262 cases a year with five judges. I am not an accountant, electrical engineer, financier, banker, stock broker, or systems management analyst. It is the height of folly to expect judges intelligently to review a 5000 page record addressing the intricacies of public utility operation.' It is not the function of a judge to act as a superboard, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator. The result is a theory of review that limits the extent to which the discretion of the expert may be scrutinised by the non-expert judge. The alternative is for the court to overrule the agency on technical matters where all the advantages of expertise lie with the agencies, If a court were to review fully the decision of a body such as state board of medical examiners 'it would find itself wandering amid the maze of therapeutics or boggling at the mysteries of the Pharmacopoeia'. Such a situation as a state court expressed it many years ago 'is not a case of the blind leading the blind but of one who has always been deaf and blind insisting that he can see and hear better than one who has always had his eyesight and hearing and has always used them to the utmost advantage in ascertaining the truth in regard to the matter in question'. ", "The second consideration leading to narrow review is that of calendar pressure. In practical terms it may be the more important consideration. More than any theory of limited review it is the pressure of the judicial calendar combined with the elephantine bulk of the record in so many review proceedings which leads to perfunctory affirmably of the vast majority of agency decisions.\" ", "83. A modem comprehensive statement about judicial review by Lord is very apposite; it is perhaps worthwhile noting that he stresses the supervisory nature of the jurisdiction : ", "\" often entrusts the decision of a matter to a specified person or body, without providing for any appeal. It may be a judicial decision, or a quasi-judicial decision, or an administrative decision. Sometimes says its decision is to be final. At other times it says nothing about it. In all these cases the courts will not themselves take the place of the body to whom has entrusted the decision. The courts will not themselves embark on a rehearing of the matter. See v. Minister of Health36. But nevertheless, the courts will, if called upon, act in a supervisory capacity. They will see that the decision-making body acts fairly. See H.K. (an infant), Re37, and for Great Britain, ex p and . The courts will ensure that the body acts in accordance with the law. If a question arises on the interpretation of words, the courts will decide it by declaring what is the correct interpretation. See v. . And if the decision-making body has gone wrong in its interpretation they can set its order aside. See v. . I know of some expressions to the contrary but they are not correct). If the decision-making body is influenced by considerations which ought not to influence it; or fails to take into account matters which it ought to take into account, the court will interfere. See v. Minister of Agriculture, Fisheries and Food41. If the decision-making body comes to its decision on no evidence or comes to an unreasonable finding so unreasonable that a reasonable person would not have come to it then again the courts will interfere. See v. If the decision making body goes outside its powers or misconstrues the extent of its powers, then, too the courts can interfere. . And, of course, if the body acts in bad faith or for an ulterior object, which is not authofised by law, its decision will be set aside. See v. . In exercising these powers, the courts will take into account any reasons which the body may give for its decisions. If it gives no reasons in a case when it may reasonably be expected to do so, the courts may infer that it has no good reason for reaching its conclusion, and act accordingly. See case (as AC pp. 1007, 1061)41.\" ", "84. We may usefully refer to Administrative Law Rethinking Judicial Control of Bureaucracy by JR (1990 Edn.). At p. 96 it is stated thus : ", "\"A great deal of administrative law boils down to the scope of review problem; defining what degree of deference a court will accord to an agency's findings, conclusions, and choices, including choice of procedures. It is misleading to speak of a 'doctrine', or 'the law', of scope of review. It is instead just a big problem, that is addressed 36 (1955) 1 QB 221: (1954) 3 All ER 449: (1954) 3 WLR 815 37 (1967) 2 QB 617,630: (1967) 1 All ER 226: (1967) 2 WLR 38 (1970) 2 QB 417: (1970) 2 All ER 528: (1970) 2 WLR 1009 39 (1963) 1 WLR 186: (1963) 1 All ER 275 40 (1965) 1 WLR 1320: (1965) 3 All ER 371 41 1968 AC 997: (1968) 1 All ER 694 42 (1969) 2 AC 147: (1969) 1 All ER 208: (1969) 2 WLR 163 43 1925 AC 338: 1924 All ER Rep 930 piecemeal by a large collection of doctrines. has offered a condensed summary of the subject: ", "'Courts usually substitute (their own) judgment on the kind of questions of law that are within their special competence, but on other question they limit themselves to deciding reasonableness; they do not clarify the meaning of reasonableness but retain full discretion in each case to stretch it in either direction.' \" ", "85. In . v. Justice stated : ", "\"A formula for judicial review of administrative action may afford grounds for certitude but cannot assure certainty of application. Some scope for judicial discretion in applying the formula can be avoided only by falsifying the actual process of judging or by using the formula as an instrument of futile casuistry. It cannot be too often repeated that judges are not automata. The ultimate reliance for the fair operation of any standard is a judiciary of high competence and character and the constant play of an informed professional critique upon its work. Since the precise way in which courts interfere with agency findings cannot be imprisoned within any form of words, new formulas attempting to rephrase the old are not likely to be more helpful than the old. There are no talismanic words that can avoid the process of judgment. The difficulty is that we cannot escape, in relation to this problem, the use of undefined defining terms.\" ", "86. An innovative approach is made by as to why the courts should be slow in quashing administrative decisions (in his Judicial Remedies in Public Law 1992 Edn. at pp. 294-95). The illuminating passage reads as under : ", "\"The courts now recognise that the impact on the administration is relevant in the exercise of their remedial jurisdiction. ", "Quashing decisions may impose heavy administrative burdens on the administration, divert resources towards reopening decisions, and lead to increased and unbudgeted expenditure. Earlier cases took the robust line that the law had to be observed, and the decision invalidated whatever the administrative inconvenience caused. The courts nowadays recognise that such an approach is not always appropriate and may not be in the wider public interest. The effect on the administrative, process is relevant to the courts' remedial discretion and may prove decisive. This is particularly the case when the challenge is procedural rather than substantive, or if the courts can be certain that the administrator would not reach a different decision even if the original decisions were quash ed. ", "Judges may differ in the importance they attach to the disruption that quashing a decision will cause. They may also be influenced by the extent to which the illegality arises from the conduct of the administrative body itself, and their view of that conduct. 44 340 US 474, 488-89: 95 L Ed 456 (1950) The current approach is best exemplified by R. v. Monopolies and Mergers Commission, ex p . \" ", "87. Sir , M.R. in R. v. , ex p observed thus : ", "\"We are sitting as a public law court concerned to review an administrative decision, albeit one which has to be reached by the application of judicial or quasi- judicial principles. We have to approach our duties with a proper awareness of the needs of public administration. I cannot catalogue them all but, in the present context, would draw attention to a few which are relevant. Good public administration is concerned with substance rather than form. ", "of decision, particularly in the financial field. ", "consideration of the public interest. In this context, the Secretary of is the guardian of the public interest. consideration of the legitimate interests of individual citizens, however rich and powerful they may be and whether they are natural or juridical persons. But in judging the relevance of an interest, however legitimate, regard has to be had to the purpose of the administrative process concerned. and finality, unless there are compelling reasons to the contrary.\" ", "88. We may now look at some of the pronouncements of this including the authorities cited by Mr was a case in which the was concerned with the award of a contract for show of sponsored TV serial. At p. 92 in paragraphs 5 and 6 it was held thus : ", "\"It is well settled that there should be fair play in action in a situation like the present one, as was observed by this Court in . It is also well settled that the authorities like Doordarshan should act fairly and their action should be legitimate and fair and transaction should be without any aversion, malice or affection. Nothing should be done which gives the impression of favoritism or nepotism. See the observations of this Court in .48 While, as mentioned herein before, fair play in action in matters like the present one is an essential requirement, similarly, however, 'free play in the joints' is also a necessary concomitant for an administrative body 45 (1986) 1 WLR 736, 774: (1986) 2 All ER 257, CA 46 47 , 268-69 48 , 173 (para 14) functioning in an administrative sphere or quasi-administrative sphere as the present one. Judged from that standpoint of view, though all the proposals might not have been considered strictly in accordance with order of precedence, it appears that these were considered fairly, reasonably, objectively and without any malice or ill-will.\" ", "89. the concept of reasonableness in administrative law came to be dealt with elaborately by one of us, Venkatachaliah, J. (as he then was). In paragraphs 37 to 41 the Court observed thus : ", "\"It was urged that the basic concept of the manner of the development of the real estate and disposal of occupancy rights were vitiated by unreasonableness. It is a truism, doctrinally, that powers must be exercised reasonably. But as Prof. points out : ", "'The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority which appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must therefore resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. Decisions which are extravagant or capricious cannot be legitimate, But if the decision is within the confines of reasonableness, it is no part of the court's function to look further into its merits. \"With the question whether a particular policy is wise or foolish the court is not concerned; it can only interfere if to pursue it is beyond the powers of the authority\"... ", "In the arguments there is some general misapprehension of the scope of the 'reasonableness' test in administrative law. By whose standards of reasonableness that a matter is to be decided? Some phrases which pass from one branch of law to another as did the expressions 'void' and ,voidable' from private law areas to public law situations carry over with them meanings that may be inapposite in the changed context. Some such thing has happened to the words \"reasonable', ,reasonableness' etc. In v. , Justice said : ", "'A phrase begins life as a literary expression; its felicity leads to its lazy repetition; and repetition soon establishes it as a legal formula, undiscriminatingly used to express different and sometimes contradictory ideas.' Different contexts in which the operation of 'reasonableness' as test of validity operates must be kept distinguished. For instance as the 49 318 US 54: 87 L Ed 610 (1942) arguments in the present case invoke, the administrative law test of ,reasonableness' as the touchstone of validity of the impugned resolutions is different from the test of the 'reasonable man' familiar to the law of torts, whom English law figuratively identifies as the 'man on the Clapham omnibus'. In the latter case the standards of the 'reasonable man', to the extent such a 'reasonable man' is court's creation, is in a manner of saying, a mere transferred epithet. Lord observed (All ER p. ", "160) .lm15 'By this time, it might seem that the parties themselves have become so far disembodied spirits that their actual persons should be allowed to rest in peace. In their place there rises the figure of the fair and reasonable man. And the spokesman of the fair and reasonable man, who represents after all no more than the anthropomorphic conception of justice, is, and must be, the court itself....' (emphasis supplied) See v. C.50 Yet another area of reasonableness which must be distinguished is the constitutional standards of 'reasonableness' of the restrictions on the fundamental rights of which the court of judicial review is the arbiter. The administrative law test of reasonableness is not by the standards of the 'reasonable man' of the torts law. Prof. says : ", "'This is not therefore the standard of \"the man on the Clapham omnibus\". It is the standard indicated by a true construction of the Act which distinguishes between what the statutory authority may or may not be authorised to do. It distinguishes between proper use and improper abuse of power. It is often expressed by saying that the decision is unlawful if it is one to which no reasonable authority could have come. This is the essence of what is now commonly called \"Wednesbury unreasonableness\", after the now famous case in which Lord , MR. expounded it.\"' (emphasis supplied) ", "90. Referring to the doctrine of unreasonableness, Prof. says in Administrative Law (supra) : \"The point to note is that a thing is not unreasonable in the legal sense merely because the court thinks it is unwise.\" ", "91. it was observed thus : (SCC p. 76, para 7) \"In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non- ", "arbitrariness is a significant facet. There is no unfettered discretion in public law : A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'.\" ", "50 (1956) 2 All ER 145, 160: 1956 AC 696: (1956) 3 WLR 37 51 (1993) 1 SCC 71 ", "92. .5 this Court observed thus : (SCC p. 455, para 12) \"In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognised by courts while dealing with public property. It is not possible for courts to question and adjudicate every decision taken by an authority, because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi-judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice , that courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of 'play in the joints' to the executive.\" ", "93. .6 this Court held thus : (SCC p. 515, para 9) \"... the Government had the right to either accept or reject the lowest offer but that of course, if done on a policy, should be on some rational and reasonable grounds. .9 this Court observed as under: (SCC p. 75, para ", "17) 'When the Government is trading with the public, \"the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions\". The activities of the Government have a public element and, therefore, there should be fairness and equality. The need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.' ", "94. The principles deducible from the above are : (1) The modem trend points to judicial restraint in administrative action. ", "(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. ", "(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. ", "688 ", "Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. ", "(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. ", "(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. ", "Based on these principles we will examine the facts of this case since they commend to us as the correct principles. ", "2. Whether the selection is vitiated by arbitrariness? ", "95. Mr , learned counsel appearing for argued that there are clear instances of arbitrariness. Criterion No. 2.4.7 has been totally ignored and excluded. This has been so admitted. No marks have been awarded on this score under this criterion. Note II of the same General Conditions 2.4.7 says minimum reliance on will be preferred. This requirement has been breached by , , and . They have borrowed from commercial banks 4.87 per cent, 4.87 per cent, 43.48 per cent and 34.41 per cent respectively. This criterion carries 8 marks. In spite of the borrowings they have been awarded 6, 8 (full marks), 5 and 7 respectively. The company, , which had not borrowed at all from the commercial banks, has been awarded only 4 marks. It requires to be noted that borrowing from commercial banks was prohibited by . ", "96. Then again, one of the prescribed criterion is 2.4.6 which carries 12 marks, namely, the financial strength of the partner company. The annual turnover from , from Indian parameters was 12,000 crores and annual turnover of their foreign parameters was 5 1,000 crores yet what has been awarded is only 9 marks. As against this has only an annual turnover of 75 crores and Rupees 6600 crores of foreign parameters yet it has been awarded 12 marks. Equally, whose turnover according to its bid document was 77 crores; the foreign parameter is unknown, it has also been awarded 9 marks. ", "97. The cut-off date for financial bid document was fixed as 17-8-1992. To examine and evaluate the same a committee was set up. The committee adopted some parameters and devised a marking system. It is as under : ", "689 ", "Parameter Total Marks Rental 50 Project Financing 8 Foreign Exchange inflow/outflow 10 ", "Purchase plan for equipment within the country including tie-ups with the proposed Indian manufacturers 5 Experience 15 Financial strength 12 Note : No marks were allotted for the seventh criterion of financial projections of Mobile Service. The report of on this aspect states as under : ", "\"One of the parameters is about the financial projection. The discussed about the reliability of financial projections made by the bidders and came to the conclusion that it is not possible for them to verify the reliability of the projections which are based on individual postulations about the number of subscribers, traffic, tariff, financial structure etc. For this purpose we have to go by the data furnished by the bidders at its face value. In any case the financial data, having relevance to evaluation of the tender have well been covered under various parameters.\" ", "Annexure 1 to the Report of the said Committee shows the manner in which parameters and their weighers were given to each criterion. The debt/equity ratio is 1.5 for city of Bombay. It has been rightly assigned 3 marks. ", "98.The bid pro forma of , , indicates minimum reliance on financial institutions. It has alsomade distinction between loans from public financial institutions and banks. Therefore, there is a confusion on the part of about this requirement with loans from the banks. ", "99.Records reveal that in the case of while awarding marks care was taken to exclude the open market projects and foreign exchange from the evaluation process. ", "100. As regards they had projected their operation in Madras for initial years which would be below profitable levels. Therefore, no dividend would have been paid to their foreign collaborators participating in the equity of company. The foreign exchange inflow position in their case was considered to be better. The markings came to be awarded on the same basis as in the case of all the bidders. The foreign collaborators of , , , and specifically undertook to cover the foreign exchange funding by equity and loans. International roaming has been correctly taken into consideration. As submitted by the learned Solicitor General roaming is defined in paragraph 1.3.1.2of NIT as follows : ", "\"Roaming. This feature shall enable a subscriber to communicate in cellular system other than its home registered one.\" ", "690 ", "Paragraph 1.3.1.18 talks of home location registered. Paragraph 1.3.1.19 deals with Visitor Location Register (VLR) which says as follows : ", "\"Visitor Location Register (VLR). VLR shall be able to store the following information. Their functions shall also include data retrieval, data collection, update of data entry, once PLMNs are established. ", "- the IMSI - the Mobile Station International ISDN number - the Mobile Station Roaming number, if allocated at location updating - the temporary Mobile Station Identity, if applicable - the location area where the mobile station has been registered - supplementary service parameters - any other information needed for management of mobile station.\" ", "All these paragraphs will clearly establish that the system provides for facility of roaming to visitors. International roaming in GSM is well-accepted technique. ", "101. GSM is defined as a Global System for Mobile communications. The GSM specifications are highly standardised. This means that the systems that are designed as per GSM specifications will be compatible with each other and, therefore, can be easily connected together from day one. ", "102.Roaming in GSM cellular mobile systems means that a subscriber belonging to one operator can use his telephone to receive and make calls while he is in the area of another operator automatically. When a subscriber goes into the area of another operator, who has a roaming agreement with his another operator, the details of the subscriber available in the HLR (Home Location Register) of the home MSC (Mobile Switching Centre) are obtained by the visitor MSC and placed in the VLR (Visitor Location Register). The subscriber can originate and receive calls without feeling any difference. The roaming can be easily extended internationally and is already being done in parts of Europe. Since the systems are compatible, all that is required is an agreement between the operators for revenue sharing etc. ", "103.Thus, we find the argument that paragraph 2.4.7, namely, the financial projection of the proposed and the 7th criterion having been left out of consideration cannot be accepted. ", "3. Bias of Mr Whether affects the selection? ", "104.In Black's Law Dictionary, 6th Edn. at page 162, bias is defined as under : ", "\" Inclination; bent; prepossession; a preconceived opinion; a predisposition to decide a cause or an issue in a certain way, which does not leave the mind perfectly open to conviction. To incline to one side. Condition of mind, which sways judgment and renders judge unable to exercise his functions impartially in particular case. As used in law regarding disqualification of judge, refers to mental attitude or disposition of the judge toward a party to the litigation, and not to any views that he may entertain regarding the subject-matter involved. State ex rel v. 52\" ", "The rule of bias is founded on the well-known maxim nemo debet esse judex in propria causa : no person can be a judge in his own cause. ", "105. de Smith's Constitutional and Administrative Law, New Edn., at p. 583, states as follows : ", "\"First, an adjudicator must not have any direct financial or proprietary interest in the outcome of the proceedings. Secondly, he must not be reasonably suspected, or show a real likelihood, of bias.\" ", "106.In the instant case, the first aspect of the matter does not arise. As' regards the second, the law is as stated by , New Edn., at pp. 584-85 \"If an adjudicator is likely to be biased he is also disqualified from acting. Likelihood of bias may arise from a number of causes membership of an organisation or authority that is a party to the proceedings; ", "partisanship expressed in extra judicial pronouncements; the fact of appearing as a witness for a party to the proceedings; personal animosity or friendship towards a party; family relationship with a party; professional or commercial relationships with a party; and so on. The categories o f situations potentially giving rise to a likelihood of bias are not closed. ", "How should the test of disqualification for likelihood of bias be formulated?... A more common formulation of the test is : Would a member of the public, looking at the situation as a whole, reasonably suspect that a member of the adjudicating body would be biased? Another common formulation is : Is there in fact a real likelihood of bias? There is no need, on either formulation, to prove actual bias; indeed, the courts may refuse to entertain submissions designed to establish the actual bias of a member of an independent tribunal, on the ground that such an inquiry would be unseemly. In practice the test of ,reasonable suspicion' and 'real likelihood' of bias will generally lead to the same result. Seldom indeed will one find a situation in which reasonable persons adequately apprised of the facts will reasonably suspect bias but a court reviewing the facts will hold that there was no real likelihood of bias. Neither formulation is concerned wholly with appearances or wholly with objective reality. In ninety-nine cases out of a hundred it is enough for the court to ask itself whether a reasonable person viewing the facts would think that there was a substantial possibility of bias.\" ", "107. in his work on Natural Justice Principles and Practical Application, 1979 Edn., at pp. 11 8-120, states 52 157 Kan 622, 143 P 2d 652, 655 \"Personal Involvement : Whenever a decision- maker becomes personally involved with one of the parties there arises the suspicion that a determination may not be reached exclusively on the merits of the case as discussed at the hearing. Unlike allegations of bias by reason of the pecuniary interest of the decision- maker however, allegations of bias founded upon a personal involvement will only result in disqualification where there is a real likelihood that a hearing will not be fair. at pp. 232-37; @ 12.02. ", "The most obvious group of cases calling for scrutiny are those in which one of the parties has close ties of kinship with the decision- maker. A chairman of county commissioners, therefore, cannot hear a petition to build a new road which was intended to pass over land belonging to his brother-in-law, nor can a member of a zoning commission determine his wife's application for a change in zoning from residential to business. v. . In the last cited case the court was concerned with both the family sentiment that was present and with the opportunity for the wife to have what in reality a private hearing before the board with her husband acting as advocate. See p. 778. But not all family relationships will disqualify and, by way of contrast, on the circumstances of one particular case it was said that a board of adjustment could decide an application by a company for permission to develop a free parking area despite the fact that an employee of the company was the wife of one board member and the fact that a third or fourth cousin of another board member was the president of the company. v. City of University Park54. ", "Disqualification on the basis of personal involvement is not, of course, limited to the above two situations but may result whenever there is a sufficient nexus between the decision-maker and a party to justify the appearance that this nexus may influence the decision reached: of v. , ex p . , has stated the law in this respect in yet another New South Wales decision. Ex p , Re . The last cited case involved a former officer of who later sat as a member of inquiring into alleged false and scandalous allegations made by a teacher against various persons, including the officer in question, and during the course of his judgment , observed : ", "'Where bias arises not from (pecuniary) interest, the officer must have so conducted himself that a high probability arises of a bias inconsistent with the fair performance of his duties, with the result 53 60 A 2d 774 (Coun 1948) 54 278 SW 2d 912 (CT Civ App Tex 1955) 55 (1975) 1 QB 549: (1975) 2 All ER 78: (1975) 2 WLR 450 56 (1955) 72 WN (NSW) 457 that a substantial distrust of the result must exist in the minds of reasonable persons.' Put in other words, the issue is not merely whether justice has in fact been done, but whether it has manifestly and undoubtedly been seen to be done. It may, therefore, be improper for the clerk of the court to act as a solicitor for a party. Similarly, it may be unwise for a headmaster to sit in judgment upon a case involving a former pupil who had been adversely criticised in a detailed staff report signed by the headmaster some three months previously even where the existence of the report has been forgotten. v. Abingdon Justices, ex p .\" ", "108.The leading cases on bias may now be seen. In R. v. Camborne Justices,ex p Pearce58 it was held : (All ER p. ", "855) \"In R. v. Essex Justices ex p PerkinS21 , J., said 'We have here to determine, however, whether or not there might appear to be a reasonable likelihood of his being biased.' And , J., said (ibid., 490) : ", "'It is essential that justice should be so administered as to satisfy reasonable persons that the tribunal is impartial and unbiased. ", "As Lord , C.J., said in R. v. Sussex JJ., ex p McCarthy59 : \"Nothing is to be done which creates even a suspicion that there has been an improper interference with the course of justice.\" Might a reasonable man suppose that there had here been such an interference with the course of justice?' , ex p , , and , J. (ibid., 108) applied the 'reasonable likelihood' test, while , (ibid., ", "107) dissented only on the inference to be drawn from the facts. In v. 61 Sir , P. asked himself the question whether the party complaining 'might reasonably have formed the impression that Mr (the Chairman of the Bench) could not give this case an unbiased hearing.' , J., said (ibid.) 'The test which we have to apply is whether or not a reasonable man, in all the circumstances, might suppose that there was an improper interference with the course of justice....' In the judgment of this court the right test is that prescribed by , J. in v. , namely, that to disqualify a person from acting in a judicial or quasi- judicial capacity on the ground of interest 57 (1964) 108 Sol Jo 840 58 (1954) 2 All ER 850: (1955) 1 QB 41: (1954) 3 WLR 415 59 (1924) 1 KB 256: 1923 All ER Rep 233 60 (1937) 2 All ER 98: (1937) 2 KB 1 61 (1939) 2 All ER 535 62 (1866) 1 QB 230 (other than pecuniary or proprietary) in the subject-matter of the proceeding, a real likelihood of bias must be shown. This court is, further, of opinion that a real likelihood of bias must be made to appear not only from the materials in fact ascertained by the party complaining, but from such further facts as he might readily have ascertained and easily verified in the course of his inquiries. In the present case, for example, the facts relied on in the applicant's statement, under S.C., Ord. 59, 3(2), of the grounds of his application might create a more sinister impression than the full facts as found by this court, all or most of which would have been available to the applicant had he pursued his inquiries on learning that Mr was a member of , and none of these further facts was disputed at the hearing of this motion. The frequency with which allegations of bias have come before the courts in recent times seems to indicate that the reminder of Lord , , in v. Sussex JJ., ex p McCarthy59 that it is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done' is being urged as a warrant for quashing convictions or invalidating orders on quite unsubstantial grounds and, indeed in some cases, on the flimsiest pretexts of bias.\" ", "In v. it was held thus (All ER p. 3 1 0) \"... in considering whether there was a real likelihood of bias, the court does not look at the mind of the justice himself or at the mind of the chairman of the tribunal, or whoever it may be, who sits in a judicial capacity. It does not look to see if there was a real likelihood that he would, or did, in fact favour one side at the expense of the other. The court looks at the impression which would be given to other people. Even if he was as impartial as could be, nevertheless, if right- minded persons would think that, in the circumstances, there was a real likelihood of bias on his part, then he should not sit. And if he does sit, his decision cannot stand. See R. v. ; R. v. , per L.J. Nevertheless, there must appear to be a real likelihood of bias. Surmise or conjecture is not enough. See R. v. Justices, ex p ; R. v. , ex p . There must be circumstances from which a reasonable man would think it likely or probable that the justice, or chairman, as the case may be, would, or did, favour one side unfairly at the expense of the other. The court will not enquire whether he did, in fact, favour one side unfairly. Suffice it that reasonable people might think he did. The reason is plain enough. Justice must be rooted in 63 (1895-99) All ER Rep 914: (1895) 1 QB 563 64 (1901) 2 KB 357 65 (1953) 2 All ER 652: (1953) 1 WLR 1046 confidence; and confidence is destroyed when right-minded people go away thinking: 'The judge was biased.' \" ", "In v. Liverpool City Justices, ex p Topping66 it was observed : (All ER p. 494) \"In the past there has also been a conflict of view as to the way in which that test should be applied. Must there appear to be a real likelihood of bias? Or is it enough if there appears to be a reasonable suspicion of bias? (For a discussion on the cases, see Judicial Review of Administrative Action (4th ., 1980) pp. 262-264 and H.W. Wade, Administrative Law (5th ., 1982) pp. 430- ", "432.) We accept the view of Cross, L.J., expressed in v. , that there is really little, if any, difference between the two tests : ,If a reasonable person who has no knowledge of the matter beyond knowledge of the relationship which subsists between some members of the tribunal and one of the parties would think that there might well be bias, then there is in his opinion a real likelihood of bias. Of course, someone else with inside knowledge of the character of the members in question might say : \"Although things don't look very well, in fact there is no real likelihood of bias.\" But that would be beside the point, because the question is not whether the tribunal will in fact be biased, but whether a reasonable man with no inside knowledge might well think that it might be biased.' We conclude that the test to be applied can conveniently be expressed by slightly adapting in words of Lord , C.J. in a test which he laid down in R. v. Uxbridge Justices, ex p Burbridge68 and referred to by him in R. v. , ex p : would a reasonable and fair-minded person sitting in court and knowing all the relevant facts have a reasonable suspicion that a fair trial for the applicant was not possible?\" ", "In v. holds \"Cases of bias and ostensible bias had to be regarded in the light of their own circumstances. The circumstances of this case could have no relevance to other cases.\" ", "109.The Indian Law can be gathered from the following rulings. it was held thus: (SCR p. 58 1) \"But where pecuniary interest is not attributed but instead a bias is suggested, it often becomes necessary to consider whether there is a reasonable ground for assuming the possibility of bias and whether it is 66 (1983) 1 All ER 490,494 67 (1970) 2 All ER 690, 700: (1970) 1 WLR 937, 949 68 (1972) Times, 21 June 69 (1974) 139 JP 261, 266 70 1988 ICR 735, 739 likely to produce in the minds of the litigant or the public at large a reasonable doubt about the fairness of the administration of justice. It would always be a question of fact to be decided in each case. 'The principle', says , 'nemo debet esse judex in causa propria sua precludes a justice, who is interested in the subject- matter of a dispute, from acting as a justice therein'. In our opinion, there is and can be no doubt about the validity of this principle and we are prepared to assume that this principle applies not only to the justices as mentioned by but to all tribunals and bodies which are given jurisdiction to determine judicially the rights of parties.\" it was observed thus : (SCR p. 334: SCC p. 112, para 11) \"It is no answer say that an author-member is only one of the members of and that the ultimate decision rests with which may reject any book out of the list of approved books. A similar argument was rejected by this Court in case71. would normally be guided by the list approved by -. Further, to say that such author-member is only one of the members of - is to overlook the fact that the author member can subtly influence the minds of the other members against selecting books by other authors in preference to his own. It can also be that books by some of the other members ma y also have been submitted for selection and there can be between them a quid pro quo or, in other words, you see that my book is selected and in return I will do the same for you. In either case, when a book of an author-member comes up for consideration, the other members would feel themselves embarrassed in frankly discussing its merits. Such author-member may also be a person holding a high official position whom the other members may not want to displease. It can be that the other members may not be influenced by the fact that the book which they are considering for approval was written by one of their members. Whether they were so influenced or not is, however, a matter impossible to determine. It is not, therefore, the actual bias in favour of the author-member that is material but the possibility of such bias. All these considerations require that an author-member should not be a member of any such committee or subcommittee.\" ", " this Court emphasised the reasonable likelihood of bias thus : (SCC p. 441, para 16) \"This Court emphasised that it was not necessary to establish bias but it was sufficient to invalidate the selection process if it could be shown that there was reasonable likelihood of bias. The likelihood of bias may arise on account of proprietary interest or on account of personal reasons, such as, hostility to one party or personal friendship or 71 , family relationship with the other. Where reasonable likelihood of bias is alleged on the ground of relationship, the question would always be as to how close is the degree of relationship or in other words, is the nearness of relationship so great as to give rise to reasonable apprehension of bias on the part of the authority making the selection.\" ", " the law was stated by one of us, Venkatachaliah, J. (as he then was) as under : (SCR p. 520: SCC p. 618, para 17) \"As to the tests of the likelihood of bias what is relevant is the reasonableness of the apprehension in that regard in the mind of the party. The proper approach for the judge is not to look at his own mind and ask himself, however, honestly, 'Am I biased?'; but to look at the mind of the party before him.\" ", "Reference was made therein to a dictum laid down by Justice in of the District of Columbia v. which is reproduced as under: \"The judicial process demands that a judge move within the framework of relevant legal rules and the covenanted modes of thought for ascertaining them. He must think dispassionately and submerge private feeling on every aspect of a case. There is a good deal of shallow talk that the judicial robe does not change the man within it. It does. The fact is that on the whole judges do lay aside private views in discharging their judicial functions. This is achieved through training, professional habits, self- discipline and that fortunate alchemy by which men are loyal to the obligation with which they are entrusted. But it is also true that reason cannot control the subconscious influence of feelings of which it is unaware. When there is ground for believing that such unconscious feelings may operate in the ultimate judgment, or may not unfairly lead others to believe they are operating, judges rescue themselves. They do not sit in judgment.\" this Court observed thus : (SCC p. 367, para 5) \"Several points were taken in support of the application for revocation. It was sought to be urged that the petitioner had lost confidence in the sole arbitrator and was apprehensive that the arbitrator was biased against the petitioner. It is necessary to reiterate before proceeding further what are the parameters by which an appointed arbitrator on the application of a party can be removed. It is well settled that there must be purity in the administration of justice as well as in administration of quasi- justice as are involved in the adjudicatory process before the arbitrators. It is well said that once the arbitrator enters in an arbitration, the arbitrator must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness. It is 72 343 US 451, 466: 96 L Ed 1068 (1961) 73 , 367 not a question of the effect which misconduct on his part had in fact upon the result of the proceeding, but of what effect it might possibly have produced. It is not enough to show that, even if there was misconduct on his part, the award was unaffected by it, and was in reality just; arbitrator must not do anything which is not in itself fair and impartial. See Russel on Arbitration, 18th Edn., p. 378 and observations of Justice in , Re74. Lord in (De Vosci) v. Justice of Queen's Country75 observed as follows : ", "'By bias I understand a real likelihood of an operative prejudice, whether conscious or unconscious. There must in my opinion be reasonable evidence to satisfy us that there was a real likelihood of bias. I do not think that their vague suspicions of whimsical, capricious and unreasonable people should be made a standard to regulate our action here. It might be a different matter if suspicion rested on reasonable grounds was reasonably generated but certainly mere flimsy, elusive, morbid suspicions should not be permitted to form a ground of decision.\"' (emphasis supplied) this observed thus (SCC p. 667, para 161) \"But the effects and consequences of non- compliance may alter with situational variations and particularities, illustrating a 'flexible use of discretionary remedies to meet novel legal situations'. 'One motive' says Prof. 'for holding administrative acts to be voidable where according to principle they are void may be a desire to extend the discretionary powers of the '. As observed by Lord in v. ", "Borneman77 natural justice should not degenerate into a set of hard and fast rules. There should be a circumstantial flexibility.\" ", "110. In the light of this let us find out whether bias has been established? The Report of was made on 16-5-1992. In that Mr was a party. As seen above, the offer of the four companies did not fully satisfy the criteria. Their cases were recommended to be considered for condonation. The four companies are ", "1. BPL Systems and Projects, ", "2. , ", "3. , and ", "4. . ", "Mr , Member (Production) made the following note: \"I agree with the recommendations of that the four firms must be in paragraph 3 of page 1/N should be included in 74 (1910) 2 IR 84 75 (1908) 2 IR 285 76 (1991) 4 SCC 584, 667 77 1971 AC 297: (1969) 3 All ER 275: (1969) 3 WLR 706 the short-list. Thus, there would be 14 companies in the short-list instead of 16 recommended by (0).\" ", "111. On 8-9-1992, Mr , as Member of the Committee, agreed to a noting that only three companies, , and qualified for selection. After further discussion, 8 companies came to be selected and the note was accordingly put up on 9-10-1992. This recommendation is agreed to by Mr . ", "112. According to Mr , the very presence of Mr itself will amount to bias. ", "113.In this case, as noted above, the crucial test is whether there was a real likelihood of bias. As to how Mr , the son of Mr , came to be appointed in is explained in the additional affidavit filed on behalf of , Respondent 10, by Mr , Corporate Personnel Manager of , including Respondent 10-Company. The relevant portion is extracted as under : ", "\"With regard to the selection and appointment of , I state as follows : ", "That Respondent 10 Company desired to employ certain managers and executives as follows : ", "(i) Sr, Manager, (Push Button Telephone) for New Delhi, Bangalore and Bombay. ", "(ii)Manager (Communications) for Madras, Calcutta and Bangalore. ", "(iii)Territory Manager (Sales) for Delhi, Hyderabad and Madras. ", "(iv)Sales Executives for Delhi, Madras, Kanpur, Chandigarh, Baroda, Kochi, Calcutta, Bhopal, Pune and Coimbatore. These posts were advertised for in several newspapers as follows ", "(i) , Delhi and Bombay Edns. ", "(ii)The Hindustan Times, Delhi Edn. ", "(iii)Statesman, Calcutta Edn. ", "(iv)The Hindu, All India Edn. ", "(v) , Bangalore. ", "These advertisements appeared between 26-8-1991 and 29-8- 1991. The eligibility conditions for the candidates was specified and with regard to the post of Territory Manager (Sales) it was mentioned that the candidates should be an Electronics/Electrical Engineer with 5/6 years' experience of office automation products, Computer, Telecom equipments, etc. ", "In response to advertisement applied for the post of Territory Manager (Sales) vide his letter dated 28-8-1991 enclosing thereby his bio-data. ", "700 ", "As per practice of the bio-data of all the applicants were scrutinised by and thereafter by the Assistant General Manager of . Thereafter the short- listed candidates were called for interview on various dates. was called for an interview on 6-9 1991. Two other candidates were also interviewed for this post. was interviewed by the Senior Officer of the company including myself. At the conclusion of the interview as per practice, an internal assessment form was filled by the interviewers. ", "On the basis of the said interview was selected and a letter dated 21-10- 1991 was addressed to him offering him the said post. was required to report for duty on or before 2-12-1991 at Bangalore. however requested for some time to enable him to handover the charge in his previous company and this was agreed to by the company. accordingly joined Respondent 10 on 6-1-1992. ", "I state and submit that was selected by in the normal course and the selection was purely on merit.\" ", "It is to be seen that Mr is only one of the officers in , which has over 5500 employees in 27 offices all over India. There are 89 officers of his rank. ", "114.Mr was not a decision-maker at all. He was one of the recommending authorities. As Director General of Communication as well as his involvement in the approval and selection of tender was indispensable. He came to be appointed as Member (Services) on 29-5-1992. By virtue of the notification dated 28-7-1992 Mr became the Director General of Telecommunication. As such, he could exercise all the powers under Section 3(6) of the Indian Telegraphs Act of 1885. Such a has the right to grant cellular operating licences to the successful party and also reject any bids without assigning any reason. Registration fees, security deposit and other financial charges shall be fixed by the licenser in consultation with the . This is what is stated in the financial bid. Therefore, Mr could not dissociate himself from the decision-making process. It is under these circumstances rightly applied the doctrine of necessity. This Court in dealt with this doctrine which is stated as follows : (SCC p. 694, para 105) \"The question whether there is scope for being responsible or liable as joint tort-feasor is a difficult and different question. But even assuming that it was possible that might be liable in a case of this nature, the learned Attorney General was right in contending that it was only proper that should be able and authorised to represent the victims. In such a situation, there will be no scope of the violation of the principles of natural justice. The doctrine of necessity would be applicable in a situation of this nature. The doctrine has been elaborated, in Halsbury's Laws of England, 4th Edn., p. 89, paragraph 73, where it was reiterated that even if all the members of the competent to determine a matter were subject to disqualification, they might be authorised and obliged to hear that matter by virtue of the operation of the common law doctrine of necessity. An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribunal can be constituted.\" ", "Therefore, we are unable to accept the contentions of Mr and Mr . ", "115.We hold Mr involvement did not vitiate the selection on the ground of bias. Since we have reached this conclusion we are not going to the other questions argued by Mr whether or could urge this point relating to bias. ", "4. Whether has been bypassed? ", "116.After finding that only three companies qualified for selection on 8-9-1992 the following note was made by Mr , Adviser (Operations) : ", "\"The financial bid which was approved by the apex committee was given to the short-listed bidders and these were received and opened on 17-8-1992. These were evaluated by (). The evaluation report is placed below. The financial evaluation was done based upon the weightages of the various parameters namely, rental, financing, foreign exchange inflow/outflow, financial strength, experience and purchase plans. The rental was given the maximum weightage. The various guidelines made for giving the marks are at Annexure 1 (page 11, Flag 'A'). ", "So far as the rental and other allied parameters are concerned, there are wide variations of rent, deposit, registration/connection fee. In some cases rent is zero. It was considered by the that these are to be equated to one parameter as 'equated rental' and the method adopted was loading the basic rental and other charges like deposit, interest rate @ 13% per annum. Based upon these assumptions, the gradation for various bidders for each city is at page 9 of the main report. ", "The Chairman and Members of were consulted in this regard. It was felt that the rate of interest adopted by the was low, and the maximum lending rate of as on 1-8-1992 viz. 21.75% is more appropriate to adopt both for refundable and non-refundable deposits and nonreturnable charges. For the non-refundable charges the monthly a mortised value over 5 years at the lending rate, viz., 21.75% should be used for loading the rental, to get at the equivalent rental value which represents the actual monthly burden on the subscribers. As per this guideline, the gave the fresh calculations on 7-9-1992 and a new gradation list was prepared which is placed at Flag 'B'. ", "After examining the report the following points have come to light- ", "(i) Hutchison Max India Ltd. in their bid document (Annexure D) have not given proper and full compliance. The has observed : 'Compliance to Chapter III (Operative Conditions) and Chapter IV (Financial Conditions) has not been indicated by the bidder.' Thus, it clearly shows that they have not complied with these important conditions which form the very basis of the financial bid. It is evident that the bidder has serious reservations about financial conditions and operative conditions and if granted a licence, there is a possibility of litigation. ", "(ii)Since we require good operators with experience the minimum of 10 marks out of 15 for this parameter is considered a must and those bidders who have scored less than 10 for this parameter should be disqualified. This represents an experience of handling of 1 lakh cellular phones or 80,000 with a GSM licence. ", "(iii)In accordance with the policy of the for encouraging foreign exchange investment only those who do foresee the inflow of foreign exchange should be considered. For this parameter the had allocated 5 marks to those bids which were foreign exchange neutral. Those getting more than 5 indicate a net foreign exchange inflow. Thus, 5 marks or above for this parameter is considered essential and those getting below 5 marks deserve to be disqualified. ", "So with the points listed above taken into account, the following companies qualify city-wise as per the gradation- Delhi ", "1. ", "2. ", "3. ", "4. Calcutta ", "1. ", "2. ", "3. (on an exclusive basis) Bombay ", "1. ", "2. ", "3. ", "4. Madras ", "1. ", "2. ", "4. (on an exclusive basis) While making the final selection, it should be borne in mind that has got a problem which is explained in the notes of ) placed below. which is mentioned in the notes of ) flag 'C' has a tie-up with from the list of approved operators. ", "Summarizing, the following operators are recommended for giving the cellular licence- ", "------------------------------------------------------------ ", "Name of the Equated FE IN- Expe- Over- Collaborator Company rental flow rience all (1) (2) (3) (4) (5) (6) ", "----------------------------------------------------------- ", "Bombay ", "1. 37.3 7 1578.3 SFR France ", "2. & 33.2 6 ", "1. 41.0 8 1583.0SFR France Cellular ", "2. 33.8 6 1476.8 ", "1. 38.5 8 1580.0SFR ", "2. Skycell 24.6 10 1571.6 Bell South Calcutta ", "1. 27.1 8 1569.1 SFR France There is no other bidder who qualifies for giving the licence. Even though fulfils all the conditions but in bid document they have based their calculations on single operator concept. However, we may, if approved by and , make a counter-offer to operate on a non-exclusive basis. After the operators are selected, tariff fixation and other licensing terms can be negotiated by the authorities. ", "A separate note is being prepared for sending to based upon the observations that are likely to be made on this note. ", "For approval, please. ", "Member (Services) Member (Production) Member (Finance) Chairman (TC) sd/- ", "() Adviser (Operations) 8-9-1992 The proposal on pre-page with all the relevant calculation sheets and report, copy of the document, may please be sent to nominated by ) for its consideration and for making final recommendations to the Government Re selection of the licensees. sd/ 10-9-1992 Adv. (0) out of stn. ", " (TM) A brief note, copies of report, financial tender document have been sent to . The note was shown to Member (S) before dispatch. ", "(emphasis supplied) sd/ 10-9-1992 Adv. (O) sd/- ", " 14-9-1992\" ", "117.On 10-9-1992 the Chairman (TC) made the following note: \"In pursuance of the orders of the ), a Committee consisting of Principal Secretary to the Prime Minister, in his capacity as Chairman, , Secretary , Secretary and was appointed to make recommendations regarding selection of the franchisees to provide Cellular Mobile Telephone Service in the four metro cities. This Committee examined the bids received against the tenders floated on the basis of report and made recommendations to ) regarding short-listing of the bidders and the financial bids document. The financial bids from the short-listed bidders have now been received and examined in the Department. The recommendations of are being forwarded to the members of appointed by ) for examination and making recommendations to the regarding final selection of the franchisees. ", "I spoke to Principal Secretary to the Hon'ble Prime Minister with the request to expedite the process. He indicated that the Committee earlier appointed by ) stands dissolved and a fresh Committee will have to be nominated,for considering the financial bids etc. He also indicated that he proposes to put up the case to the Hon'ble Prime Minister for his clearance. It is, therefore, proposed to issue a letter to the members of as per draft placed below. The same may please be seen by ) for approval before issue. ", "In the draft letter it has been indicated that the same will also examine the bids received for provision of in 27 cities first for short-listing and finalising the financial bids and later for selection of the franchisees. The documents relating to short-listing of bidders have also been sent separately to the members of the . ", "sd/- ", "() Chairman (TC) 10-9-1992 Mos (C) 11-9-1992 D.O. to Principal Secretary with copies to ES./Electronics Secretary may issue sd/ PS. - D.O. issued pl. sd/14-9 DDG(TM)\" ", "However, the D.O. came to be issued in accordance with the note of 10-9-1992 dissolving the apex committee. Therefore, it is not correct to contend, as urged by Mr , that the apex committee had been bypassed. The learned Solicitor General is right in his submission. ", "5. Entry of Hidden Criteria - Whether valid? ", "118. In the original tender document, paragraph 2.2.1 in relation to the Subscriber's Capacity states as follows : \"Subscriber Capacity: 1000 with modular expansion up to minimum 40,000 subscribers.\" ", "In Section 11 of General Condition, clause 1(d) states \"Copy of the agreement between the Indian and the foreign partner, if any foreign partner is proposed.\" Chapter 11 of General Conditions in paragraph 2.4.5 states \"Experience of the Foreign operating partner;\" On 8-9-1992 Mr , Adviser (Operations) in his note in the file inter alia stated as follows : ", "\"Since we require good operators with experience the mini mum of 10 marks out of 15 for this parameter is considered a must and those bidders who have scored less than 10 for this parameter should be disqualified. This represents an experience of handling of 1 lakh cellular phones or 80,000 with a GSM licence.\" ", "These hidden criteria came to be evolved in the following context. indicated the parameters in which it stated that \"... the committee decided to consider foreign companies who have experience of operating a cellular system of at least five years and who have developed a reasonable sized network (25,000 subscribers).\" Inter alia it stated in the report of : \"15. The Committee, therefore, drew up the following criteria: ", "(i)The experience of the bidding company.- Since none of the Indian companies have any experience of operating a cellular service, this would necessarily apply to the foreign collaborator. Also since GSM technology is only now beginning to come into commercial operation, the decided to consider foreign companies who have experience of operating a cellular system of at least 5 years and who have developed a reasonable sized network (25,000 - 25,000 subscribers).\" ", "119.On 2-9-1992 made the recommendations. Upon these recommendations got three cities, Delhi, Bombay and Madras. Even then and Projects did not feature. Therefore, it was directed that an additional output of gradation of different bidders for the four cities by adopting inter alia the highest lending rate of for 5 years for lending of monthly rental with simple interest on deposits. As per this revised gradation got Delhi, Calcutta and Madras. However, it was eliminated from Bombay. ", "120.On 8-9-1992, the criterion of one lakh lines was introduced. It was suggested by Mr , Adviser (Operations) that those who have secured less than 10 marks for this parameter should be disqualified. This is in relation to the experience of handling of one lakh cellular phones or 80,000 with GSM line. It is submitted that criterion of experience of one lakh lines helped elimination of in Bombay and created place for . ", "121.The criterion of experience was introduced as a ground of disqualification. If the criterion of experience of one lakh lines as a principal condition to qualify for consideration for Bombay and Delhi was introduced uniformly then could be disqualified. Thus, a relaxation of 80,000 with the GSM line was introduced. It is important to note the person who evolved this criterion did not consider as 's collaborator. ", "122.As noted above, the learned Solicitor General would submit that as on 31-12-1991 had experience of 81,085 lines of and 1982 lines making a total of 83,067 lines. Added to this, had an experience of 1,70,000 subscribers. The reference to the marks awarded for comparative evaluation in this context is irrelevant. Besides, even assuming that in comparative evaluation the holding of the licence may be given some weight; cannot be made the governing factor in determining the experience of a bidder for the purpose of its eligibility. ", "123.As a result of 8-9-1992 recommendations, got all the four cities. got two out of four cities. Only got Madras. No fourth party got any city. Having realised that this decision will patently be unacceptable a relaxation was made on 9-10-1992 one day before the final decision whether those with less than one lakh lines experience could be considered for Calcutta and Madras. Even, on 9- 10- 1992, was evaluated vis-a- vis and . There was no mention of . On 10-10-1992, was again evaluated vis-a-vis its collaborators and . In the affidavit filed in the Government urged that \"one lakh lines carrying 10 points was considered equivalent to 80,000 lines with GSM licence. This, however, had no impact on . 's collaborators included which is one of the highest service providers in United Kingdom.\" ", "124.The learned Solicitor General submits that the evaluation in the case of was correct and in any event, including , was properly considered. The parameter of experience had three components : ", "1. The number of subscribers ", "2. The number of countries ", "3. GSM experience. ", "It is true that during evaluation it was noted that any bidder with less than 10 marks out of 15 for experience would stand disqualified. The cut-off of one lakh lines was in the context of minimum experience of 10 marks. had a collaborator other than , namely, . It was mentioned in 's bid in its tender on 31-12-1991 that the number of was over 80,000. By 31-12-1992 it was estimated to be 1,10,000. In August 1992 when the bids were submitted line experience could reasonably be expected to be above one lakh lines. In addition, had a GSM licence. In view of all, it would not be an unreasonable estimate on the part of experts to consider as having one lakh lines' experience. ", "125.We are not in a position to accept the contentions of Mr that these criteria were evolved as tailor- made to suit some other bidders and knock off others. In a technical matter like this where the Government of India is embarking upon new communication scheme with advance technology all the criteria cannot be postulated in the beginning itself. Where thought certain criteria have to be evolved in order to subserve the interest of the scheme it is not necessary to have all of them set out in the beginning itself. However, the important question remains after the evolution of the criteria whether they have been uniformly and properly applied, as urged by Mr ", "126.A careful perusal of the files shows that the Adviser (Operations) for franchise, with its foreign collaborators ,. The same was approved by the Chairman in his final proposal which was ultimately approved on 10-10-1992. Thus, it is clear that at no point of time ever figured as collaborator. , the foreign collaborator of had GSM Paris area (sic) 23-9-1992. As on 31-12-1991 it had 81,085 subscribers with no GSM experience. The number of subscribers was estimated to go up to 1,10,000 by 31-12-1992. On the date of submission of the bid it was expected to cross the one lakh mark. The other collaborator had only an experience of 1982 lines. In order to make qualify is also included as a foreign collaborator. This is factually wrong, as noted above, because at no point of time was thought of as foreign collaborator for . Even then, as seen from the file, is providing marketing, sales, customer care, billing services to both and under contracts with both of them. This is evident from the material produced before us. It states : ", "\"'s sole function is to distribute radiotelephone services. Unlike in France it neither sets up nor manages networks. In the U.K. these two activities have been separated by the 1984 Telecommunications Act. While two operators develop and manage the network some 20 marketing companies known as 'service providers' deal with the end-user, undertaking marketing after-sales service and billing. This original mode of organization has proved beneficial and has helped to promote the rapid development of radiotelephone in the UK. At the beginning of 1992 there were already some 1.2 million subscribers. This corresponds to a penetration rate of more than 2% of the population, against around 0.7% in France. , with a market share of about 13%, is one of the foremost service providers. It has 1,65,000 subscribers and reports annual sales of some FRF 1.4 billion.\" ", "(emphasis supplied) ", "127. In Annexure VII experience of foreign collaborators Item 10 is . The number of subscribers that is put against it is 2,53,067. This figure could be reached only by including . It is necessary to point out that what is required is either experience of handling one lakh cellular phones or 80,000 with the GSM lines. Both the learned Solicitor General and Mr would argue that service is relevant. But the nature of service that is contemplated here as per the tender document is found in Section III of Commercial Conditions at para 1.4. That reads as under: ", "\"Services refer to the scope of the services defined to be within the licence in para 4, Section IV.\" ", "Therefore, one has to obviously refer to para 4 of Section IV which sets out the following : ", "\"In the first instance the system should be capable of providing the following services Tele-services Information type Services Speech Telephone Emergency calls Data Message handling system 300 bps access Short text Communication of short Alphanumeric messages Graphics Grp. 3 Facsimile Bearer services Data transmission in Asynchronous duplex circuit mode with PSTN 300 bps (V 21) 1200 bps (V 22) Data Transmission in Synchronous duplex circuit mode with PSTN 1200 bps 2400 bps Mobile access in the Asynchronous mode to the packet assembler/disassembler of packet switching network 300 bps 1200 bps Mobile access in the synchronous mode to the packet switching network 2400 bps 4800 bps Supplementary services In the first instance the following supplementary services may be provided : ", "* Calling Number Identification Presentation * Calling Number Identification Restriction * Connected Number Identification Presentation * Connected Number Identification Restriction * Malicious Call Identification * Call Forwarding Unconditional * Call Forwarding on Mobile Subscriber Busy * Call Forwarding on No Reply * Call Forwarding on Mobile Subscriber Not Reachable * Call Transfer * Mobile Access Hunting * Call Waiting * Call Hold * Completion of Call to Busy Subscriber * Three-Party Service * Conference Calling * Closed User Group * Advice of Charge * Freephone Service * Reverse Charging (Called or Calling MS) * Barring of All Outgoing Calls * Barring of Outgoing International Call except those directed to the Home PLMN Country. ", "* Barring of All Incoming Calls * Barring of Incoming Calls when Roaming Outside the Home PLMN Country.\" ", "128. The reliance placed by Mr and learned Solicitor General on paragraph 2. 1.1 of Section III of Commercial Conditions to include services is not correct because that speaks of the obligations of the licensee. That is obvious as seen under: ", "\" 2.1 Obligations of the Licensee: ", "2.1.1 The licensee shall operate and provide the SERVICES. He will be solely responsible for the installation, networking, operation, treatment of the complaints, issue of bills to his subscribers, collection of his component of the revenue, claims, damages arising out of this operation.\" ", "129. In the judgment under appeal has observed \"Thus, one lakh lines carrying 10 marks was considered equivalent to 80,000 lines with GSM lines. Even otherwise the respondents say that this had no impact in the case of as its collaborators included who was one of the largest service providers in U.K. Experience of providing service was an important consideration and experience of in computing 's foreign collaborators was correctly included in the computations and, thus, its experience exceeded 2.51 lakh lines. The respondents say that was treated on this basis and not on the basis of 80,000 lines. In support of this argument Mr , learned Solicitor General, submitted that all services were to be provided by the licensee, and though had no operating experience it was having service experience for rendering service to subscribers which was an important factor. A subscriber is more concerned with the service than as to how operates. The service would be of any type like billing, correction of defects in hand sets, shifting of phones, etc. The operation and service though go hand in hand we do not find anything wrong in taking into account the experience of which has been done by the respondents.\" ", "130. We are unable to support this finding as it clearly ignores that never figured as a collaborator for . Further, ignoring the disjunctive clause, two qualifications were sought to be subsumed to give an undue advantage to . Besides, the nature of service is as set out in para 4 of Section IV as stated in Condition 1.4 of Section III. Thus, we hold, (borrowing the words of , v. Secretary of for Environment34 \"we could not see on what basis the had reached its conclusion\". ", "131. If, after excluding the experience of , whether still could fulfil the requisite qualification, namely, 80,000 GSM lines and whether with had that experience are matters which require to be factually analysed. The Committee may decide this factual aspect as on the date on which the offer was made i.e. 20-1-1992. If the finding is rendered in favour of it will qualify. ", "132. The other \"hidden criteria\" alleged is about the same foreign collaborator. The Chairman, , in relation to these criteria noted : \"The element of competition will get vitiated if the two JVs with a common foreign partner were to be selected to provide the service at the same location.\" ", "133. Concerning this criterion the attack against , its foreign collaborator came to be changed in the middle and yet in violation of the conditions laid down in Chapter 11, clause 7 of the General Conditions. Originally, there were the following three foreign collaborators ", "1. , France ", "2. , USA ", "3. , USA At the second stage of financial bid, the name of the third partner has come to be omitted. This is the argument of Mr and Mr . The dropping of resulted in a change of the joint venture which was not permissible. This is answered by Mr , as noted above, that the deficiencies in tender conditions could be condoned. This argument is supported by reference to and . The condition relating to change does not include the dropping out one condition of 2 or 3 collaborators. Further, this condition is not found in the tender documents but only financial bid documents. ", "134. and submitted its financial bid on 17-8-1992. In that bid was never shown. Inasmuch as the financial bid was received by and only on 31-7-1992 Condition No. 7 was inapplicable or impossible of compliance because the dropping was before Condition No. 7 was brought to the notice of and . Where, therefore, the financial bid came to be submitted on 17-81992 no question of alteration would ever arise. After all the object of the first stage was only to short-list and not to allot the franchise. Therefore, there is nothing wrong in the same. ", "135. In the financial bid clause 7 of Chapter II reads as follows \"No change can be made in the Indian or foreign partners already indicated in the first stage bid.\" ", "712 ", "It is common case between the parties that originally the foreign collaborators of and were three, as mentioned above. So this is the position at the first stage, on 16-5-1992, when the evaluation took place. Clause 7 of Chapter II, quoted above, forbids only change. (emphasis supplied) On 17-8-1992, when it submitted bid, had been dropped out. It does not amount to a change of foreign collaborator. Still, the original two remained. There is no change in joint venture. This does not violate clause 7 of Chapter 11. (emphasis supplied) ", "136. Mr F.S. has rightly placed reliance on the abovesaid two rulings; relevant passages are quoted as under. this Court inter alia observed : (SCC pp. 499-501, paras 13-15) \"... In the first place, although, as we have explained above, para V cannot but be read with para 1 and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfils the pre-qualifying requirements set out in para 1, it will be too extreme to hold that the omission to supply every small detail referred to in para V would affect the eligibility under para 1 and disqualify the tenderer. The question how far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the pre-qualifying conditions is a matter which it is for the to assess. We have seen that the documents having a direct bearing on para 1 viz. regarding output of concrete and brick work had been supplied in time. The delay was only in supplying the details regarding 'hollow cement blocks' and to what extent this lacuna affected the conditions in para 1 was for the to assess. ", "court may place on the NIT, the way in which the tender documents issued by it has been understood and implemented by the is explained in its 'note', which sets out the general procedure which the was following in regard to NITs issued by it from time to time. Para 2.00 of the 'note' makes it clear that the took the view that para 1 alone incorporated the 'minimum pre- ", "qualifying/eligibility conditions' and the data called for under para V was in the nature of 'general requirements'. It further clarifies that while tenders will be issued only to those who comply with the pre- ", "qualifying conditions, any deficiency in the general requirements will not disqualify the applicant from receiving tender documents and that data regarding these requirements could be supplied later. Right or wrong, this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along. The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract, but, on the contrary, decided to adhere to it even in regard to this contract. They only decided, in view of the contentions raised by the appellant that para V should als o be treated as part of the pre-qualifying conditions, that they would make it specific and clear in their future NITs that only the fulfillment of pre-qualifying conditions would be mandatory. If a party has been consistently and bona fide interpreting the standards prescribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe the conditions differently. We are, therefore, of opinion that was right in declining to interfere. ", "Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them. Thus, if a party does not strictly comply with the requirements of para 111, V or VI of the NIT, it is open to the to decline to consider the party for the contract and if a party comes to court saying that the should be stopped from doing so, the court will decline relief. The second consequence, indicated by this in earlier decisions, is not that the cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination.\" ", "137. this Court observed : (SCC p. 276, para 6) \"As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases.\" ", "138. observed thus : ", "\"We also do not find any error on the part of the respondents in treating the financial bid of in order if at that stage dropped one of its three foreign collaborators (which were named by it at the technical bid stage) as otherwise financial bid satisfied all the criteria and dropping of one of the collaborators made no difference.\" It further observed : ", "\"We, therefore, find that stand of the petitioner that any undue preference had been given to some of the companies cannot be upheld. We even otherwise do not find that deviation or relaxation in the standards prescribed has resulted in any arbitrariness or discrimination. (See in this connection .) We do not think it is necessary for us to go into each and every deficiency as alleged by the petitioner we find that the action of the respondents had been bona fide. Motivation is providing of best possible service to the consumers.\" ", "714 ", "We are in agreement with this finding. ", "139. Yet another attack that is made against is that it submitted its application for foreign collaborator on 22-4-1992 to beyond the cut-off date of 31-3-1992. It should not loom large because there was a confusion as to who was competent authority to receive the application. As a matter of fact did submit its application for foreign collaboration on 31-3-1992 to . When that application was returned on 20-4-1992 it came to be sent to on 22-4-1992. We do not think could be faulted on this score. Equally, the argument that the memorandum and articles do not mean cellular business does not merit acceptance at our hand. In fact, has correctly construed the main object, namely, to design, develop, fabricate, manufacture, assemble, exporting from and importing into India by self or otherwise dealing and act as consultants and render services in connection with all kinds of telecommunication equipments as including cellular telephones. ", "140. Now we go on to . It came to be rejected by the . Relevant note dated 9-10-1992 inter alia reads as follows : ", "\"Hutchison Max : Non-compliance of operative and financial conditions laid down in Chapter III at the time of opening of financial bids. They have accepted these conditions, through a letter, explaining their earlier non- compliance as typographical error.\" Section 11 , General Conditions, para 3 states as under : ", "\"3. Compliance. Point to point compliance report in respect of technical, commercial and views on financial conditions must be submitted. Deviation, if any, must be separately highlighted. In case compliance report is not enclosed with the offer, the offer shall not be considered.\" The pro forma of the compliance statement is in the following form \"This company hereby agrees to fully comply with all Technical, Commercial and General Conditions of Tender Document No. 44-24/91MMC including amendments/clarifications issued by without any deviations and reservations. ", "This company also hereby agrees to fully comply with all paragraphs of Chapter II : General Conditions, Chapter III : Operating Conditions, Chapter IV : Financial Conditions and Chapter V : Tariffs of Document No. 44-24/91-MMC (FINANCIAL) without any deviations and reservations. ", "Signature of the authorised signatory of the bidder/operating company For and on behalf of.................................. (Name of the company)\" ", "141. The compliance statement, as submitted by , is as under: ", "715 ", "\"Compliance Statement This Company hereby agrees to fully comply with all Technical, Commercial and General conditions of Tender Document No. 44-24/91MMC including amendments/clarifications issued by without any deviations and reservations. ", "This Company also hereby agrees to fully comply with all paragraphs of Chapter II : General Conditions and Chapter V : Tariffs of Document No. 44-24/91-MMC (FINANCIAL) without any deviations and reservations. ", "Signature of the authorised signatory of the bidder/operating company. ", "For and on behalf of sd/ () Director\" ", "In all the four separate tender documents similar compliance statements were filed. ", "142. Therefore, obviously, there is no reference to either Chapter III Operating Conditions or Chapter IV : Financial Conditions. It has already been noted that for the second stage the last date for filing tender document was 17-8- 1992. On 11-9-1992, wrote a letter to about the inadvertent error due to a, typographical/clerical mistake in not referring to Chapter III or Chapter IV. It is relevant to note that in the concluding paragraph of that letter it is stated : ", "\"We reiterate and reconfirm our unequivocal compliance without any reservations and deviations with the said tender conditions. Accordingly, enclosed herewith is a confected Compliance Statement duly signed by the authorised signatory of the which may kindly be taken on regard.\" ", "143. The proper Compliance Statement came to be filed later. Since it had not filed a proper Compliance Statement it had come to be excluded (which knowledge was gained by it) it made representations to the Chairman, and the Prime Minister. According to Mr it is an accidental omission amounting to a clerical error. In support of this he cites v. City of Rochester1O. The headnote reads : ", "\"A mistake in the proposals by a bidder for a contract with a city, which is promptly declared by an agent of the bidder as soon as it is discovered and before the city has done anything to alter its condition, will not bind the bidder by reason of a provision in the city charter that a bid shall not be withdrawn or cancelled until the board shall have let the contract.\" ", "716 ", "At page 11 15 it reads : ", "\"The complainant is not endeavoring 'to withdraw or cancel a bid or bond'. The bill proceeds upon the theory that the bid upo n which the defendants acted was not the complainant's bid; that the complainant was no more responsible for it than if it had been the result of agrarian or the mistake of a copyist or printer. In other words, that the proposal read at the meeting of the board was one which the complainant never intended to make, and that the minds of the parties never met upon a contract based thereon. If the defendants are correct in their contention there is absolutely no redress for a bidder for public work, no matter how aggravated or palpable his blunder. The moment his proposal is opened by the executive board he is held as in a grasp of steel. There is no remedy, no escape. If, through an error of his clerk, he has agreed to do work worth $ 1 0,00,000 for $ 1 0, he must be held to the strict letter of his contract, while equity stands by with folded hands and sees him driven into bankruptcy. The defendants' position admits of no compromise, no exception, no middle ground. (82 Fed Rep 256)\" ", "144. The alternate submission is the question of even clerical error does not arise here because one month before acceptance had sent the compliance form. Where the matter is purely technical the court should not exercise the power of judicial review. We find great force in this submission. We are clearly of the opinion that the mistake is in relation to a non-essential matter that is in relation to peripheral or collateral matter. There has been every intention to comply with the terms of the bid. For an accidental omission it cannot be punished. We concur with . ", "145. Regarding the note dated 9-10- ", "1992 inter alia states as under : ", "\"This J.V has the Indian partner which is under investigation by , in respect of their dealings with for publication of directories. has in recent judgment passed strictures on the deal. The Joint Venture has, therefore, been excluded from consideration. report is, however, yet to be received and formal blacklisting proposal in respect of the first has not been initiated so far. Exclusion has therefore to be justified.\" ", "Note dated 10- 10- 1992 reads as follows : \" (C) further discussed the case with me today, when M(S) was present. He indicated that after examining the reasons for elimination of 'He indicated that after examining the reasons for elliminition of the six short-listed parties from consideration for selection, he is of the opinion that need not be excluded outright, since report has not yet been received. The Company may be considered for selection and included in the select list on a provisional basis, if found eligible otherwise. Similarly, Indian Telecom Ltd. (Partner ) need not be eliminated just because they have desired exclusive licence. We may offer them the licence on a non-exclusive basis, if they are found eligible. It is up to them to convey acceptance to the offer. Exclusion of other four companies can stand for reasons indicated.' I have examined the case again. I recommend that if is to be selected on a provisional basis, the company may be allotted Madras for following reasons : ", "(a) Foreign exchange investment profile submitted by the company indicates that there will be a heavy F.E. outflow over 3 years if the Company were to be allotted Bombay or Delhi. ", "(b) Madras is the least popular of the stations along with Calcutta. Rentals quoted are high as pointed in our earlier note. will help bring down the rentals in Calcutta. Allotment of Sterling to Madras will achieve the same purpose. ", "(c) Any delay in allotment of licence to on account of the investigations will have the least adverse effect in Madras for lack of competition to other licensee. ", "M(S) may kindly examine them again in the light of the observations of MOS (C) and rework out the select list. The case may be put up for approval of MOS (C). sd/- ", "10- 10- 1992\" ", "Then it came to be selected on the approval of the Minister. ", "146. in upholding the selection observed thus \"The case of , however, appears to us to be rather strange. There were no strictures against the holding of this company by the name in by this Court and the strictures were only against and (UPI) and (UDI). M/s had got associated with in getting a supplementary agreement for publication of telephone directories for the cities of Bombay & Delhi. This supplementary agreement was struck down. in appeal against the judgment also did not appear to have made any strictures. There was nothing on the record of the respondents to suggest that any enquiry was pending against this company. There was no FIR and no preliminary report adverse to the company and we feel the ghost of has been unnecessarily brought into play. The company appears to have been punished for no sin of its. However, since the company has not complained we will leave the matter at that.', It is submitted by Mr that as on the date of the judgment no inquiry was pending. It was only after 10-6- 1993 an FIR was filed by when was approached for quashing the FIR under Section 482 CrPC. An order by consent was passed. was allowed to proceed with the investigation and complete the same within one year. It was also ordered that there would be no arrest or harassment. Therefore, as on the date of selection there was no adverse report against . ", "147. On the date of consideration by its position was even better. If, therefore, this aspect had been bome in mind it is not for us to reweigh the claims and come to one conclusion or another. So much for selections. ", "148. A letter dated 27-8-1993 by was addressed to the appellants as follows : ", "\" () New Delhi - 110001 Dated 27-8-1993 No. 842-2/92-TM To : ", "M/s , Bombay House, 24, Homi Modi Street, Bombay - 400 001 (Kind attention Shri Z.A. Baig) Sub : Tender No. 44-21/91-MMC (FIN) for franchise for cellular mobile telephone service for Bombay, Delhi, Calcutta and Madras. ", "Kindly refer this office letter of even No......... dated 2- 10-1992 informing you that were provisionally selected for franchise for providing cellular mobile telephone service at Delhi on a non-exclusive basis. That matter has been reconsidered in the light of the judgment delivered by in this case and a revised list of provisionally selected bidders in the cities of Bombay, Delhi, Calcutta and Madras has been prepared. The revised list does not include mobile telephone service in any of the four cities. The earlier letter of even number dated 12-10-1992 may therefore be treated as cancelled. ", "sd/ () DDG (TM) 27-8-1993\" ", "From this letter we are not able to fathom the reason for omission. As seen above, was originally selected for Delhi. By implementation of the judgment of it has been left out. Before doing so, as rightly urged by Mr , this appellant ought to have been heard. Therefore, there is a clear violation of the principle of natural justice. On an overall view we find it has two distinctive qualifications. In that ", "1. It has not borrowed from any commercial bank. ", " ", "2. It has an annual turnover from Indian parameters of Rs 12,000 crores and the annual turnover of the foreign parameters of Rs 51,000 crores. Comparatively speaking, the other companies do not possess such high credentials yet it has been awarded low marks with regard to the reliance on Indian public financial institutions and financial strength of the parameters/partner companies. These qualifications could have been validly urged had it been heard. Then, we do not know what decision could have been arrived at. ", "149. had been omitted for the following reasons as indicated in note dated 9-10-1992: \" (Partner ) Limited experience. already selected as partner of Calcutta.\" We cannot find fault with this reasoning since there can be only one foreign collaborator. It cannot have as its collaborator since has the same foreign collaborator. ", "150. In the case of , the noting, as seen above, is as under: ", "\"In both cases of (i) M/s Ashok Leyland and ", "(ii) M/s Vam Organic Chemicals Ltd. a joint venture company has not been formed as stipulated in the tender, and there is no indication of the equity structure or the extent of participation of the foreign collaborators.\" ", "We cannot interfere with the discretion of the . ", "151. In the above two cases, we are obliged to interfere on the ground of arbitrariness and violation of the principle of natural justice confining ourselves to the doctrine of judicial restraint, however, by the application of permissible parameters to set right the decision-making process. ", "(emphasis supplied) ", "152. We make it clear that we are not disturbing the other selections since the power of judicial review is not an appeal from the decision. We cannot substitute our decision since we do not have the necessary expertise to review. ", "153. Lastly, quashing may involve heavy administrative burden and lead to delay, increased and unbudgeted expenditure; more so, in a vital field like telecommunication. ", "154. In view of the foregoing, we thus reach the conclusion that could not claim the experience of . This conclusion has come to be arrived at on the basis of the parameters we have set out in relation to the scope of judicial review. We may reiterate that it is not our intention to substitute our opinion to that of the experts. Apart from the fact that the is hardly equipped to do so, it would not be desirable either. ", "720 ", "Where the selection or rejection is arbitrary, certainly this would interfere. ", "155. In the result, we hold that claim based on 's experience is incorrect. 's experience will have to be excluded. The matter will have to be reconsidered on a factual basis as on 20-1-1992, in the light of what we have observed above. The claim of will have to be reconsidered in the light of the above observations. Accordingly, civil appeals arising out of SLP (C) Nos. 14191-94 of 1993 will stand allowed. Civil Appeals arising out of SLP (C) No. 14266 of 1993, SLP (C) No. 17809 of 1993 and TC (C) No. 49 of 1993 will stand dismissed with no order as to costs. ", "722"], "relevant_candidates": ["0000061838", "0000080596", "0000143379", "0000298443", "0000299215", "0000300655", "0000465789", "0000514007", "0000616070", "0000634160", "0000639803", "0000743328", "0000830683", "0000958552", "0001238017", "0001252118", "0001572927", "0001619801", "0001747748", "0001788187", "0001794709", "0001808782", "0001929601", "0001964881", "0027098883"]} {"id": "0000889031", "text": [", J. ", "1. In 1903, the plaintiff applied to the Collector for a grant of the occupancy of Survey Nos. 46 and 47 in the village of Ajanti. The occupancy was accordingly granted to him on payment of Rs. 99, being three times the annual assessment. The grant was made on what is popularly known as \"the restricted tenure \", certain conditions being annexed prohibiting, alienation as permitted by Section 68 of the Bombay Land Revenne Code. The relevant words of the Kabulayat are as follows Neither I, nor my heirs nor any agent acting on my behalf will create any encumbrance on the land or any portion of it by way of lease, mortgage or sale or in any other manner. ", "2. On August 9th, 1915, the plaintiff made an application to the District Deputy Collector in which he stated that the two lands were taken up jointly by himself and defendant No. 2, and prayed that Survey No. 46 might be transferred to the came of defendant No. 2. On August 21, 1915, the statement of defendant No. 2 was recorded by the . He said that he had paid the price of Survey No. 43, and prayed that it should be transferred to his name. On November 3rd, 1915, the District Deputy Collector held that there was a private arrangement between plaintiff and defendant No. 2 which constituted a breach of the conditions set out above and directed that the lands should be forfeited. In pursuance of this order plaintiff was evicted on January 18th, 1916 and on February 7th, 1916 the Collector rejected the appeal made to him. The suit was filed on February 6th, 1917. ", "3. There is no dispute as to the above facts. It may be remarked that if there was in fact a breach of the conditions of the plaintiff would cease to be entitled to the occupation of the land as provided for by Section 68 of the Bombay Land Revenue Code and would, therefore, be liable to be summarily evicted by the Collector in exercise of the powers conferred by Section 79A. It is also clear that by virtue of Section 10 the District Deputy Collector was empowered in this behalf. It may further be remarked that the use of the word \"forfeiture \" in the District Deputy Collector's order is erroneous, but this is a matter of form only. What was in effect done was to evict the plaintiff summarily. ", "4. The only question of fact which is obscure is what was the exact nature of the arrangement between plaintiff and defendant No. 2. The lower Court holds that there was no agreement prior in date to the and that is probably correct. The lapse of eleven years renders this unlikely and the evidence of defendant No. 2 on the point is vague and unsatisfactory. He says: \" I do not remember if I and paid half and half the amount that was first paid to .... I asked after he got the lands to give me S. No. 46 and he consented \". The truth of the matter appears to be that defendant No. 2 from time to time advanced money to plaintiff for expenses of cultivation (the lands were originally waste) and that latterly they arranged for the transfer of one of the lands. It may be noted that this was apparently the case for defendant No. 1 in the lower Court. In Exhibit 17-the pursis of the Pleader-it is said plaintiff has broken the conditions inasmuch as he has alienated S. No. 46 to defendant 2 \". There is no evidence that any money was paid as purchase money and admittedly no document was executed. In these circumstances it is difficult of to understand in what way there has been a breach of the Condition of the . There was at most a contract for sale which of itself creates no interest in or charge on the property. Plaintiff and defendant No. 2 appear to have made false representations to the Revenue Authorities in the hope of inducing them to sanction the transfer but this can furnish no valid ground for the order of eviction. Beyond this there was nothing more than an attempt or intention to transfer which was never carried into effect. It may, however, be remarked that if there was indeed an antecedent arrangement such as was suggested by plaintiff and defendant No. 2 the case for applying b. 79A would be no stronger. The action taken was (in my opinion) premature, and not warranted by the terms of that section. The eviction was therefore wrongful. ", "5. But it has been urged in appeal that the suit is barred by limitation. The point was not taken in the lower Court, and it is urged that Order VIII, Rule 2, of the Code of Civil Procedure & precludes us from considering the point. That order cannot, I think, be read as overriding the established practice. This is a first appeal and the general rule is that effect should be given to a plea of limitation raised for the first time. It may further be noted that the facts necessary for the consideration of this plea are in substance set out in the plaint itself, which shows that the suit was filed more than a year after the date of the actual eviction. Thus it may be doubted whether, on a strict construction of Order VIII, Rull 2 it was necessary for defendant No. 1 to plead limitation (see the words \"or would raise issues of fact not arising out of the plaint \"). ", "6. It is argued for defendant No. 1 that the suit is barred by Article 14 of Schedule I of the Indian Limitation Act. The act of eviction, it is urged, was the act of an officer of Government in his official capacity, and as the suit was admittedly brought more than a year after the date of that act it must be held to be barred. The exact scope of Article 14 is a question not freo from A difficulty but I am unable to find any ground on which this case can be distinguished from v. Secretary of for India (1900) I.L.R. 24 Bom. 435. In that case it was held that if a Collector disposed of land, the property of a private individual, purporting to act under Section 37 of the Bombay Land Revenue Code, the disposition is a nullity because Section 37 does not give power to deal with the lands of private individuals. The order is in fact not one made by a public officer in his official capacity. It would appear to follow that the act of dispossession is equally a nullity-not in the sense that it is a negligible quantity but in the sense that it is not an act done by an officer in his official capacity. It, therefore, stands on no other footing than an act of dispossession by a private individual. The basic defect is that what is done is not within the statutory powers which the officer purports to exercise inasmuch as the land does not fall within that category to which alone Section 37 is applicable. In the present case as the conditions necessary for the exercise of the power of summary eviction conferred by Section 79A did not in fact exist the District Deputy Collector cannot be held to have acted in his official capacity. for India (1911) I.L.R. 36 Bom. 325 : 14 Bom. L.R. 332 the same line of reasoning is adopted. That also was a case under Section 37. The District Deputy Collector held erroneously that the plaintiff was not entitled to the possession of certain land, and the suit was filed more than a year after the order. It was held that the order gave the plaintiff a cause of action, but that as it was based on an erroneous view of the facts it was ultra vires. The District Deputy Collector did not, therefore, act in his official capacity and Article 14 had no application. It seems to me impossible to escape the conclusion that here too by parity of reasoning the act was not done by the District Deputy Collector in his official capacity. The same principle is laid down in Maharaja of Vizianagaram v. (1906) I.L.R. Mad. 280. Where an officer of Government purports to act under a statutory authority but in fact acts in excess of that authority his act should be treated as a nullity. It is perhaps simpler to say that the act is not an official act for that view brings out more clearly the reason why Article 14 is no bar. This appears to be the view hitherto taken by this Court, and no valid ground is shown for questioning it. It would appear to follow that Article 14 has no application here. It is not disputed that the suit is otherwise in time. ", "7. I would, therefore, reverse the decree of the lower Court and make a decree for possession and mesne profits under Order XX, Rule 12, of the Civil Procedure Code. Possession to be given three months after the receipt of the record in the lower Court. Plaintiff to recover his costs throughout. ", ", ", "8. I concur. I desire to add a word with reference to the point of limitation raised on behalf of defendant No. 1 for the first time in the appeal before us. In view of the allegation in the plaint, according to the provisions of Order VIII, Rule 2, limitation ought to have been pleaded. No such point was made in the written statement which was practically confined to the point as to the breach of the conditions of the grant. It is a point, which, if not raised, is likely to take the opposite party by surprise. The effect of the omission to raise this point is, as stated by in In re 's Settlement Gant v. , (1912) 1 Ch. 717, 728 with reference to the corresponding English rule, not to exclude from the consideration of the the relevant subject-matter for decision simply on the ground that it is not pleaded, but to leave the party in mercy and the will deal with him as is just. Having regard to the nature of the point, as also to the circumstance that it involves no investigation into any fresh facts, we have considered the point of limitation. It seems to me that the real question in the case is whether any breach of the conditions of the grant is established; for if that is not established under the circumstances of this case the defendant No. 1 must fail on the merits as well as on the point of limitation. That was probably the reason why the point of limitation was not separately raised in the lower . Both on the question of fact as to the alleged breach of the conditions of the grant, and on the question of law as to the effect of that finding on the point of limitation I entirely agree with my learned brother."], "relevant_candidates": ["0001982235"]} {"id": "0000891449", "text": ["ORDER and , JJ. ", "1. This is an appeal preferred by against the judgment of dated 3-6-92 in FAO No. 860/91. By the said judgment of has set aside the decree passed by the Senior Sub-Judge, Patiala, on 6-3-91. The learned Senior Sub-Judge had set aside the Award dated 10-6-88 made by the Chief Engineer, Research and Arbitration, , Chandigarh. The result of the judgment of is that the Award was held valid and was directed to be made a Rule of Court. ", "2. Aggrieved by the said judgment, and Chief Engineer have preferred this appeal. ", "3. There was a purchase order-cum-contract agreement entered into between the appellant and the respondent dated 21-7-84 under which the respondent was to supply 41,500 poles of 8 meter long @ Rs. 353.00 per pole and another set of 3750 poles each 9 meter long @ Rs. 440.00 per pole. The terms and conditions of the contract stipulated that the prices were to be firm and were subject to \"no variation whatsoever on any account\". The payment, schedule of delivery thereof was also specified. It was, however, stated that the prices would be paid and excise duty was not applicable put if excise duty was levied, the prices would be Rs. 353/- per pole subject to production of documentary proof alongwith certain certificates, under Clause-9 of the contract 95% of the contract value was to be paid against receipt and balance 5% of the contract value of each consignment should be paid within 30 days of the receipt of material/acceptance by the consignee in good condition. Clause-9 related to the mode of delivery of goods. Delivery was to commence after 45 days after the receipt of the firm order and the whole quantity was to be completed within 12 months thereafter. Clause-13 stated that during the pendency of the contract/ purchase order if any performance in whole/ part by either party was delayed for the specified cause mentioned therein, or on account of any other cause beyond their reasonable control, neither of the two parties shall be made liable for losses or damages. ", "4. The respondent, it is alleged failed to supply and that therefore the appellant deferred supplies up to 22-4-85. On 30-3-86 the respondent requested the appellant to increase the price of the poles as the prices of raw material had also increased and the respondent requested the appellant to enhance the rate of the poles of 8 meter long at Rs. 50 per pole and Rs. 75 per pole of 9 meter long. On 22-4-85 the appellant Board decided to lift the ban imposed on the respondent. On 9-5-85 the appellant wrote to the respondent that prices in the purchase order were firm and subject to \"no variation the whatsoever on any account\" and that request of respondent for enhancement in prices of poles could not be acceded to. On 17-10-85 the respondent claimed payment of excise duty as per the increase made in the budget of that year. On 7-12-87 the respondent issued a notice to the appellant on various disputes. ", "5. Thereafter, the matter was referred to the arbitration in accordance with the terms of agreement. On 16/18-1-88 the respondent filed its claim statement before the arbitrator seeking a sum of Rs. 18.75 in Claim No. 1 in respect of increase in value of the poles. There were other claims. The total claim was for Rs. 39.50 lakhs. The appellant Board filed its reply refuting the claim of the respondent and also contended that disputes were not arbitrable to there was no liability. ", "6. The Arbitrator passed an award on 10- 6-88 for a sum of Rs. 17.71 lakhs with interest. Objections were filed by the appellant to the said award. The learned Sub-Judge by his judgment dated 6-3-91 set aside the award. But allowed the respondent's appeal on 3-6-92 and directed the award to be made a rule of court. ", "7. It is this judgment against which the has preferred this appeal. ", "8. In this appeal, we have heard learned Counsel for the parties. Learned Counsel for the appellant contended that Claim No. 1 which consisted of two parts in respect of which the respondent made a claim of Rs. 16.50 lacs and Rs. 2.25 lacs, related the increase in the price of the poles and that in view of the definite Clause in the contract the arbitrator had no jurisdiction to go into the question of increase of the price or award for any excess amount. So far as Claim No. II relating to excise duty is concerned, he contended that the difference in a sum of Rs. 0.95 lacs alone was payable. So far as Claim No. III for Rs. 12.00 lacs and Claim No. IV for Rs. 4.00 lacs are concerned, counsel contended that no case is made out for grant of damages. So far as Claim No. V is concerned, counsel contended that respondent is not entitled to any relief. Claim No. VI is relating to interest. ", "9. Learned Counsel for the appellant contended that the award was not a reasoned award and that it was not possible to find out if the total amount of Rs. 17.71 lakhs as awarded by the arbitrator related to Claim No. I which according to the appellant was not within the purview of the arbitrator. It is also not known on what basis any of the other claims were awarded and whether any amount was awarded for items for which arbitrator had no jurisdiction. Learned Counsel in that connection relied upon . and contended that such an award granting a lumpsum amount without reasons where some of the items are not arbitrable, was liable to be set aside. ", "10. Learned Counsel for the respondent, however, contended that certain calculations were made by the arbitrator. Counsel produced some record of the said computations but we find that it only related to Claim No. I. It was also stated that award could be passed for Claim No. I as the clause not permitting a higher rate would have been applicable only if the original delivery schedule was not postponed by the appellant. The award is not a reasoned one and it could not be interfered with by the . ", "11. After hearing counsel on both sides, we are of the view that the award is liable to be set aside because when it is a non-speaking one, it is not known whether any part of the Award made by the arbitrator related to Claim No. I. In our view, the price of the poles was firm and not liable to be increased. The fact that the delivery schedule was changed cannot be a ground to get over the clause prohibiting increase in the price of the poles. Once Claim No. I is not tenable, the award has to be set aside inasmuch as it is not possible to say that the award did not relate to Claim No. I. This is a sufficient reason for setting aside the award and remitting the matter back to the abitrator. ", "12. We, therefore, set aside the judgment of and we also set aside the judgment of the Senior Sub-Judge, we remit the matter to the arbitrator for his decision on the other claims, i.e. other than Claim No. I. ", "13. We are of the view that the Arbitrator who is now to deal with the matter afresh, must pass a reasoned award after taking into consideration the points raised in the Claim Petition of the respondent (other than Claim No. I) and the objections raised by the appellant in its reply filed before the Arbitrator. The parties are also agreed that a retired judge of would be now appointed as a Arbitrator. ", "14. We hereby appoint Justice , retired judge of , Modern Housing Complex, Manimajra, Chandigarh, as Arbitrator to deal with the dispute between the appellant and the respondent as per the reference already made in the case earlier. ", "15. The Arbitrator is requested to complete the award expeditiously as this is an old dispute between the parties which has been pending for quite long time. We request the arbitrator as far as possible to complete the award within four months from the date of the first hearing. It will be for the arbitrator to stipulate his fee for the conduct of the arbitration proceedings and for passing the award. The award is to confine other than Claim No. I (Part I and II). The arbitrator will pass the reasoned award on the basis of the material already on record. ", "16. The appeal is allowed accordingly. There shall be no order as to costs."], "relevant_candidates": ["0001391503"]} {"id": "0000892303", "text": ["PETITIONER: STATE OF MYSORE & ORS. Vs. RESPONDENT: & ORS DATE OF JUDGMENT21/08/1975 BENCH: , KUTTYIL KURIEN BENCH: , KUTTYIL KURIEN RAY, A.N. (CJ) CHANDRACHUD, Y.V. CITATION: 1975 AIR 2190 1976 SCR (1) 369 1976 SCC (2) 895 ACT: Land Acquisition Act - Section 4 , Sec. 5-A and Section 6 . Madras Land Acquisition Rules 3(b). Mandatory or directory-Validity of notification Whether can be challenged after unreasonable lapse of time. HEADNOTE: The respondents are the owners of the land in question. the land was sought to be acquired for at the instance of of the State of Mysore. Section 4 notification was issued in the year 1960. After an enquiry into the objections filed under section 5A the land Acquisition officer sent his report to the . over-ruled the objection and issued a notification under section 6 . at whose instance the land was sought to be acquired was not given notice as required by rule (b) of Madras Land Acquisition rules. The respondents field a Writ Petition in challenging the validity or both the notifications on the ground that was not consulted. upheld the contention of' the respondents and quashed the notifications issued under sections 4 and 6 of the Act on the ground that if the concerned filed any reply pursuant to the notice issued the objector would know what the has stated by way of reply and at the stage of hearing of objection. tile objector might adduce evidence or address arguments to meet what is stated in such reply. The objector. could further urge before the that the reasons given by the department in reply to the objections should not be accepted: On appeal by Special Leave it was contended by the appellant. 1. Rule 3 (b) is inconsistent With section 5A (2) for the reasons that sub section (2) of section 5A provides for further enquiry in the discretion of the Collector and rule 3(b) if treated as mandatory would be to convert the discretionary power into a mandatory duty and is therefore, ultra vires the section. 2. The provisions of rule 3(b) were not mandatory and that therefore, failure to issue the notice to the department concerned was not fatal to the validity of the notification. ^ HELD: 1. Section 5A requires the Collector to make a report after hearing the objections. It does not mean that a rule cannot be framed which would enable the department concerned to place its view point before the Collector when considering the objection under section 5A . The proceeding of the Collector are quasi-judicial and it is only proper that he should be apprised of the attitude of the department requiring the land in the light of the objections filed. It would be helpful to the in making the decision to have before it the answer to the objection by the department in order to appreciate the riv view point. Rule 3(b) is not Ultra vires Section SA. [372F-H 373 A-C] 2. In determining the question whether a provision is mandatory or directory one must look into the subject matter. and consider the importance of the provision disregarded and the relation of. that provision to the general object intended to be secured. One has to consider the nature the design and the consequence which will follow from construing a provision in one way or the other. Rule 3(b) was enacted for the purpose of enabling the Collector to have all the 370 relevant materials before him for coming to a conclusion to be incorporated A in the report to be sent to the in order to enable the to make proper decision. was right in holding that the provision WAS mandatory. [373C-F] The notification under Section 6 was quashed but the notification under section 4 was upheld. [373-G] CIVIL APPEAL No. 1021 or 1973 The respondents raised further contention in the above appeal to the effect that notification under section 4 should be quashed since the public notice as required by section 4 is not given and the report under section 5A was not sent to the within the prescribed period. HELD: The notification under section 4 was published on 13-4- 1967. Objections were filed by the respondent under section 5A of the Act. The notification under section 6 was published in October 1968. The Writ Petition was filed in July 1969. The respondent was not entitled to challenge the validity of the notification under section 4 of the Act as Writ Petition challenging the notification was filed after an unreasonable lapse of time. The respondent should have challenged the validity of the notification under section 4 within a reasonable time of' the publication of the notification. The respondent knew of the notification and file(l objections under section 5A of the Act. There is no substance in the argument that the report under section 5A was not sent to the within the prescribed period. In any event since a fresh enquiry is directed under section 5A the Collector will in any event have to send a fresh report to the . [374D-G] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1700 & 1827 and 1021 of 1973. ", "Appeals by special leave from the judgment and orders dated the 17-7-1972, S 6 1972 and 8-8-1972 of in W.P.S NOS. 1921/1969/,2869/1967 & 3815/69 respectively. ", ", Solicitor General of India, , , for the appellants (in Civil Appeal No. 1700/73). ", ", , for respondents (1-6 & 8-10) & , for the appellant. , for respondents 1-7 , for the appellants. ", ", and , for the respondent. ", "The Judgment of the Court was delivered by Civil Appeals Nos. 1700 & 1827 of 1973 J.-We take up for consideration Civil Appeal No. 1827 f 1973. The respondents are the owners of the lands in question. ", "371 ", "They were sought to be acquired for at the instance of the Education department of the State of Mysore. In a notification under s. 4 of the Land Acquisition Act (hereinafter called the Act) dated 5-1-1960 and published in dated 5-5-1960, it was stated that in view of the urgency of the cases, the provisions of s. SA of the Act shall not apply to the case. The respondents challenged the notification in a writ petition (No. 768 of 1960). When the writ petition came up for final disposal, a memo was produced on behalf of and the , On the basis of the Memo, dismissed the writ petition. The memo was to this effect: - ", "'`The respondent agrees to modify the impugned notification issued under Section 4(1) read with Section 17 of the Land Acquisition Act and to give an opportunity to the petitioner of being heard under Section 5-A of the Act. Hence the relief sought for by the petitioner becomes unnecessary.\" ", "The Special Land Acquisition officer, Mangalore, issued notices to the respondents stating that the respondents will be given opportunity to file Objections under s. 5A of the Act pursuant to the order in Writ Petition No. 768 of 1960. The respondents filed their objections and, after an inquiry, the Land Acquisition officer sent his report to the . The considered the report and over ruled the objections. This was followed by a notification under s. 6 of the Act. The respondents challenged the above notification as well as the notification under s. 4 by a writ petition in . ", "The respondents attacked the validity of the notification on the ground that at whose instance the land was sought to be acquired was not given notice as required under rule 3(b) of the Madras Land Acquisition Rules as in force in the Madras area of the State of Mysore at the time of inquiry under s. 5A and that since the requirement of notice as enjoined by rule 3(b) was mandatory, the failure to comply with that requirement rendered the notifications under sections 4 and 6 of the Act invalid. ", " by its order upheld the contention of the respondents and quashed the notifications issued under s. 4 and s. 6 of the Act. It is against this order that the appeal has been filed by special leave by the State of Karnataka and the Special Land Acquisition officer, Mangalore. ", "The only point which arises for consideration is whether the pro visions of rule 3(b) were mandatory and therefore the failure to issue the notice to the department concerned as enjoined by the rule was fatal to the validity of the notifications under sections 4 and 6 of the Act. ", "The reasons which impelled to come to that conclusion were, if the to which a notice is issued files any reply by way of answer to the objections, the objector will know what the has stated by way of reply and, at the stage Of hearing of objections, he (the objector) may adduce evidence or A address arguments to meet what has been stated in such reply, and that the objectors will have an opportunity of urging before the Government that the reasons given by the in the reply to the objections should not be accepted. ", "Rule 3 reads: ", "\"R. 3 Hearing of objection: (a) If a statement of 13 objections (is?) filed after the due date or by a person who is not interested in the land it shall be summarily rejected. (b) If any objections are received from a person interested in the land and within the time prescribed in sub section ( 1) of s 5A, the Collector shall fix a date for hearing the objections and give notice thereof to the objector as well as to the department or company requiring the land, where such department is not ; Copies of the objections shall also be forwarded to such department or company. The department or company may file on or before the date fixed by the collector a statement by way of answer to the objections and may also depute a representative to attend the enquiry.\" l) The learned Solicitor General, appearing on behalf of the appellants submitted that rule 3(b) is inconsistent with s. 5A(2) or tilt: reason that s. 5A(2) itself provides for making further inquiry which the Collector thinks necessary after considering the objections filed by the owner or the person interested in the land and to read rule 3(b) as casting a mandatory duty upon him to give notice of the objection to the department requiring the land and to consider the answer to the objection, if any, filed by the would be contrary to the section. The argument was that when sub-section (2) of s. 5A provides for further inquiry in the discretion of the Collector a rule making it mandatory that the Deputy Commissioner (the Collector) should give notice of the objection to the department concerned and consider its answer to the objection would be to convert a discretionary power into a mandatory duty and is therefore ultra vires 1 the section. ", "We do not think that the contention is right. What the material provision of s 5A(2) says is that \"the Collector shall give the objector . an opportunity of being heard either in person or by pleader and shall after hearing all such objections and after making such further enquiry if any as he thinks necessary\". This does not mean that a rule cannot be framed by the rule-making-authority for the guidance of the Deputy Commissioner (the Collector) which would enable the concerned to place its view- point before him when considering the objection under s. 5A . The proceedings of the Collector are quasi-judicial and it is only proper that he should be apprise of the attitude of the department requiring the land in the light of the objections filed. If the department requiring the land thinks, in the light of the objection, that the land sought to be acquired is not necessary for the purpose for which it was required to be acquired or that more suitable land is available in the vicinity, it is only fair that the Deputy Commissioner (Collector) is informed about it. The answer of the department to the objection filed by the objector, even if adverse to the objector, would, at any rate, enable the Collector to bring a more informed and rational approach to the controversy before him. The Collector has to send his recommendation to government on the basis of his finding together with the record of the proceedings for the ultimate decision by the . IT would be helpful to the in making the decision to have before it the answer to the objection by the department in order to appreciate the rival view points. We do not think that rule 3(b) was ultra vires. the section. ", "We also think that the government when it framed the rule had in mind that the Deputy Commissioner (Collector) should follow it while functioning under s. 5A(2) and so the requirement of the rule was mandatory. ", "In determining the question whether a provision is mandatory or directory, one must look into the subject matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured. No doubt, all laws are mandatory in the sense they impose the duty to obey on those who come within its purview. But it does not follow that every departure from it shall taint the proceedings with a fatal blemish. The determination of the question whether a provision is mandatory or directory would, in the ultimate analysis, depend upon the intent of the law maker. And that has to he gathered not only from the phraseology of the provision but also by considering its nature, its design and the consequences which would follow from construing it in one way or the other. We see no reason why the rule should receive a permissible interpretation instead of a pre-emptory construction. As we said, the rule was enacted for the purpose of enabling the Deputy Commissioner (Land Acquisition Collector) to have all the relevant materials before him for coming to a conclusion to be incorporated in the report to be sent to the Government in order to enable the Government to make the proper decision. In v.Sub-Collector of Palghat(1) took the view that the requirement of the rule regarding the giving of notice to the department concerned was mandatory. The view of in (2)is also much the same. ", "We think that was right in its conclusion that the requirement of the rule was mandatory. We quash the proceedings of the Collector (Special Land Acquisition officer, 2nd appellant) under s. SA(2) as also the decision of the on the basis of the report of the Collector under the sub-section. The result is that the notification under s. 6 has to be quashed and we do so. But We sec no reason to quash the notification under s. 4 . ", "We direct the Collector (2nd appellant) to proceed with the inquiry on the basis of the objection already filed under s. 5A after (1) A.I.R. 1959 Kerala 343. (2) (1967) 2 Madras law Journal 422. ", "374 ", "giving notice to the department concerned viz., and after allowing it an opportunity to file an answer to the objection. We dismiss the appeal subject to the modification indicated. No costs. ", "The facts and circumstances in Civil Appeal No. 1700 of 1973 are similar to those in Civil Appeal No. 1827 of 1973, the only difference being that the rule which falls to be considered is rule 5(2) framed by under s. 55 of the Act. That rule is similar to rule 3(b) of the rule. For the reasons given in the judgment in Civil Appeal No. 1827 of 1973, dismiss Civil Appeal No. 1700 of 1973 also with the modification indicated therein and without any order as to costs. ", "Civil Appeal No. 1021 of 1973 The facts in this appeal are similar to those in the two Civil - Appeals referred to above and the decision there will govern the decision here. ", "But counsel for the respondent in this appeal said that the notification under s. 4 should be quashed in respect of properties involved in this appeal for the reasons that public notice had not been given as required in s. 4 of the Act, that the report under s. 5A was not sent to the within the prescribed period, that failed to pass upon these questions and that the case must therefore be remitted to . ", "The notification under s. 4 was published on 13- 4.1967. Objections were filed by the respondent under s. 5A of the Act. The Deputy I I Commissioner submitted his report to the . The over ruled the objections. The notification under s. 6 was published in the gazette on 19-10-1968. The Writ Petition challenging the validity of the notification was filed some time in July or August, 1969. We do not think that the respondent was entitled to challenge the validity of the notification under s. 4 of the Act as the Writ Petition challenging the notification was filed after an unreasonable lapse of time. If public notice as required by s. 4 of the Act was not given and that would per se vitiate the notification under s. 4 , the ' appellant should have challenged its validity within a reasonable time of the publication of the notification. The respondent knew of the notification and filed objection under of the Act. In these circumstances we see no reason to accept the submission of counsel. We also see no substance in the argument of the counsel that the report drawn up under s. SA(2) was not sent to the within the time prescribed and therefore the proceedings were invalid. We have directed a fresh inquiry by the Deputy Commissioner (Collector) under s. SA and therefore, the Deputy Commissioner will in any event have to send a fresh report to the . ", "In this view we do not think that there is any ground for remitting the case to , simply because failed to , consider these points. The appeal is dismissed with the modification; indicated in the two appeals referred to above. No costs. ", "P.H.P. Appeals dismissed."], "relevant_candidates": ["0001888479"]} {"id": "0000923000", "text": ["PETITIONER: , DELHI Vs. RESPONDENT: RANJIT SINGH DATE OF JUDGMENT: 07/12/1967 BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. MITTER, G.K. CITATION: 1968 AIR 933 1968 SCR (2) 548 CITATOR INFO : F 1974 SC 280 (6) R 1987 SC2055 (6) R 1989 SC1141 (19) ACT: Delhi and Ajmer Rent Control Act (38 of 1952), s. 13(1) proviso (b), (c) and (k)-Hotel premises Constituents of sub- letting-Knowledge of sub-letting, if waiver. HEADNOTE: The respondent-landlord of a hotel filed a suit for eviction of his tenant-appellant under s. 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 , 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 s. 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 s. 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 s. 13(1). [555 F-G 556 , 1 S.C.R. 368, followed. & Anr. v. and . 1 QB. 513 and v. , 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] v. , 11 C.W.N. 852, referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1249 of 1967. ", "Appeal from the judgment and decree dated July 21, 1967 of in Regular First Appeal No. 166-D of 1965. ", ", , and , for the appellant. ", ", and , for the respondent. ", "The Judgment of the Court was delivered by , 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 s. 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 ", "(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 , or 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 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 s. 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, , counsel for the appellant, made the following statement before : ", "\"The plaintiff can seek ejectment of the defendant only under section 13 of Act 38 of 1952. In case the 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 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 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 s. 13 of the Act only. The appellant's counsel made a' formal statement in 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) 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 s. 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 . 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 and also in this Court Having regard to the deliberate stand taken by the appellant in , 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 s. 13(1) is made out. ", " answered issue No. 5 in the negative. With regard to all the other issues, 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), held that the appellant was entitled to relief on certain conditions. , 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 an, appeal to . agreed with all the findings of , and dismissed the appeal. ", "The two s- concurrently found that the appellant had sub-let several rooms, counters, showcases -and garages. The two s found that the appellant had sub-let rooms to (1) , (2) , travel agents, (3) , dealers in curios and jewellery, (4) , dealers in jewellery, (5) , hairdressers, (6) , travel agents and (7) , dealers in saris and curios. The businesses of the sub- lessees were not confined to the residents of the hotel. The letting to and were before the commencement of the Act and the lettings to , , and were after the commencement of the Act. and 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 has an interesting history. It was formerly sub-let to . (1), this held by a majority on a construction of the grant to R. N. that he was a lessee and not a licensee. began to occupy this portion of the premises from February, 1955. According to the appellant, the agreements with , and , were in writing. The appellant produced several documents in 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 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 . -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 could then construe them. The appellant has not brought before the 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 . In the absence of the best evidence of the grants, the s 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 and . v. 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 v. ) and the cases referred to therein. Those cases consider what constitute rateable occupation. In the case last cited, 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, Art. 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) [1958] 1 Q.B. 513, 525. ", "(2) [1949] 2 K.B. 335. ", "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 , 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 s. 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 s. 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 s. 13 from eviction, nor can he ask for fixation of standard rent. see (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 s. 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) 1 S.C.R. 368. ", "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 s. 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 and other persons. By his letters dated November 4, 1948 and February 23, 1949, the respondent requested 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 S. 13 ( 1) is an offence punish-able under s. 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 v. ). 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 , and . 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 s. 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 s. 13(1) . ", "Clause 2(v) of the head lease granted by the 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 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 s. 13 (1), notwithstanding previous notice, dealt with the premises in a manner contrary to (1) (1907) 11 C.W.N. 848, 852. ", "558 ", "a condition imposed on the respondent by the 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. ", "(k). 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 s. 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. 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. ", " dismissed."], "relevant_candidates": ["0001719430"]} {"id": "0000949611", "text": ["JUDGMENT , J. ", "1. The following question has been referred at the instance of the assessee : ", "\"Whether, on the facts and in the circumstance of the case, the was right in holding that the profit derived from the sales of import entitlements would not be entitled to relief under section 80E of the Income-tax Act, 1961 ?\" ", "2. The assessee is a priority industry, which is entitled to a rebate under s. 80E of the I.T. Act, 1961. It manufactures forgings and stampings, which are automobile parts. In determining the income on which the rebate under s. 80E of the Act is available, the excluded a sum of Rs. 1,70,245, being the profit on sales of import entitlements. The assessee obtained the entitlements on the basis of the export performance. The excluded the same on the ground that this did not have any relation to the manufacturing operations of the assessee. This view was confirmed by the and the . Under s. 80E , in order to get the benefit of deduction, the profits and gains should be attributable to the business of manufacture or sale. The held that in order to make profits \"attributable\" to the manufacturing activity, there should be some direct nexus with the profit earned and the manufacturing activity. As in the view of the , there is no such nexus in the profit earned by sale of import entitlement, for the purpose of the relief under s. 80E the profits on sale of import entitlements had to be excluded. The Supreme Court in , while interpreting the words \"attributable to\" occurring in s. 80E , observed as follows (p. 93) : ", "\"As regards the aspect emerging from the expression 'attributable to' occurring in the phrase profits and gains attributable to the business of' the specified industry (here generation and distribution of electricity) on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression 'attributable to' and not the expression 'derived from'. It cannot be disputed that the expression 'attributable to' is certainly wider in import than the expression 'derived from'. Had the expression 'derived from' been used, it could have with some force been contended that a balancing charge arising from the sale of old machinery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor-General, it has used the expression 'derived from', as, for instance, in section 80J . In our view, since the expression of wider import namely, 'attributable to', has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity.\" ", "3. The import entitlement in this case was given to the assessee on the basis of its export of the goods manufactured by them. Certainly, therefore, the import entitlement was directly attributable to the export of goods manufactured and the business of sale of forgings and stampings. A similar question came up for consideration before of this court in .) Ltd. (T.C. Nos. 451 and 452 of 1976, dated January 8, 1980) 128 ITR 531. There it was held that the amount of incentive would qualify for the relief under s. 80-I which provisions was similar to s. 80E . The export incentive, thus, being bound up with the manufacture, sale and export, the assessee is entitled to get the relief under s. 80E even in respect of these profits and gains. ", "4. We, accordingly, answer the reference in the negative and in favour of the assessee. The assessee will be entitled to its costs. Counsel's fee Rs. 500."], "relevant_candidates": ["0000081055", "0000380817"]} {"id": "0000951761", "text": [", J. ", "1. In execution of a decree, a sale was held on June 24, 1922, which was confirmed on July 25, 1922.. An application to aside the sale was made and an order passed setting aside the sale on December 17, 1923- There was an appeal to the District Judge, a second appeal to , and a Letters Patent Appeal from the judgment in second appeal. All these appeals to which the decree-holder and the auction-purchaser were parties were dismissed; the first appeal on November 12, 192t, the second appeal on February 21, 1928, and the Letters Patent Appeal on September 13, 1929. The present application was put in under Order XXI, Rule 93, by the auction-purchaser for refund of the purchase money, as the sale had been set aside. This was on August 29, 1932. The question arises whether this application, is barred by limitation, which would depend on whether, as contended by the decree holder, three years are allowed from the date of setting aside the sale or, as contended by the auction-purchaser, three years from the dismissal of the Letters Patent Appeal on September 13, 1929. The District Munsif of held that the application was in time. Against that finding the decree-holder preferred a revision petition to this Court (C.R.P. No. 308 of 1933) and at the same time appealed to the District Judge. The District Judge transferred the appeal to the Subordinate Judge, who held that the application was barred and dismissed the application. Against that finding this appeal (C. M.S.A. No. 132. of 1934) has been preferred and this C.M.S. A. and C.R.P. No. 306 of 1933 have come on for hearing together. ", "2. One of the questions for decision is whether an appeal lay against the order passed under Order XXI, Rule 93, by the District Munsif ordering refund of the purchase money. On behalf of the appellant three cases have been quoted which directly bear on this question. The first is 3 LW 105 : 33 Iad. Cas. 235 : AIR 1917 Mad. 217 : (1916) 1 MWN 109, in which and , JJ. held that in an application under Order XXI, Rule 93, no appeal lay. Another case of this referred to is v. 9 M 437,' which was decided similarly. In both these cases no argument was adduced and I doubt whether they are any longer good law; for, they seem to have been decided on the assumption that an auction-purchaser is a stranger to the suit and that any point that arises between him and the parties to the suit did not therefore fall within the scope of Section 47. There can be no doubt from a very large number of cases decided in this and in other High s that the auction-purchaser can be looked upon as a representative of a judgment-debtor or decree-holder and, further, that when there is a matter in dispute between the decree-holder and the judgment-debtor, it makes no difference that the actual application which raises the matter is made by a stranger. The third case referred to is v. 12 A 397 : AWN 1890, 135, which is to the same effect. There is very little discussion even in that judgment; and the many cases referred to therein show that there was a very considerable conflict of authority on this point before v. 12 A 397 : AWN 1890, 135, was decided. That case is certainly no longer good law in Allahabad: for a Full Bench of the Allahabad High has given a definite finding to the contrary in 45 A 369 : 74 Ind. Cas. 873 : AIR 1923 All 394 : 21 ALJ 228. ", "3. On the other side, there is no direct decision on this point excepting 45 A 369 : 74 Ind. Cas. 873 : AIR 1923 All 394 : 21 ALJ 228, but a number of cases have been quoted in which it has been pointed out that matters in dispute between the auction purcaaser and the parties to the suit come properly under Section 47, Civil Procedure Code, it they relate to the execution, discharge, and satisfaction of the decree. 43 M 107 : 54 Ind. Cas. 209 : AIR 1920 Mad. 324 : 28 MLJ 32 : (1910) MWN 881 : 26 MLT 391 (FB), there was a conflict between the auction-purchaser in execution of a money decree, who was a stranger and the auction-purchaser (decree-holder) in execution of a mortgage decree. The stranger auction-purchaser contended that he was a purchaser for value without knowledge of the mortgage, whereas the decree-holder purchaser contended that the purchase was made lis pendens and was therefore not binding on him. It was- there held that the auction-purchaser was a representative of the judgment-debtor. The question whether the matter arose m execution was not decided by the , as a definite finding that it did so arise had been given by the referring Judges. The scope of 43 M 107 : 54 Ind. Cas. 209 : AIR 1920 Mad. 324 : 28 MLJ 32 : (1910) MWN 881 : 26 MLT 391 (FB), was explained very fully in the judgment of , J. in 41 MLJ 120 : 63 Ind Cas. 200 : AIR 1921 Mad. 420 : 14 LW 92 : (1921) MWN 491. There, the judgment-debtor, in a separate suit, contended that the auction-purchaser had trespassed on some of his lands which had not been sold: but the found that although the lands in question were not the subject-matter of the mortgage or of the decree and were not even sold: yet the had by mistake actually delivered them to the auction-purchaser and that there was no trespass. It was held, following the case, that this was a dispute in which the judgment-debtor and the decree-holder were adversely interested and that it did not matter that it was the auction-purchaser with whom the judgment-debtor was actually contending. It was therefore held that the judgment-debtor should have raised this matter in execution and that a separate suit did. not lie. 65 MLJ 253 : 143 Ind. Cas 854 : AIR 1933 Mad. 598 : 56 M 808 : Ind. Rul. (1933) Mad 339 : 38 LW 138 : (1933) MWN 1081, there was a sale: but before confirmation had been ordered, the decree itself was set aside in appeal. The sale was confirmed and an application was then put in to set aside the sale under Sections 47,151 and Order XXI, Rule 89. It was held that Order XXI, Rule 89, did not apply; and the same test was applied by in this case as was applied in 41 MLJ 120 : 63 Ind Cas. 200 : AIR 1921 Mad. 420 : 14 LW 92 : (1921) MWN 491, whether the judgment-debtor and the decree-holder were adversely interested in the point in dispute. It was held that they were and that therefore Section 47 did apply and the matter could be gone into in execution It is not difficult, 1 think, to distinguish these three cases from the present case-for in all three of them it was very clear that the matters in dispute did arise in execution. It is, however, argued that in the present case the dispute is one relating to the discharge and satisfaction of the decree: because if the auction purchaser succeeds, the decree would be un-satisfied; whereas if he fails the deeree-holder will have retained possession of the money and the decree will be satisfied. This seem to be the view taken in 45 A 369 : 74 Ind. Cas. 873 : AIR 1923 All 394 : 21 ALJ 228. After approving the decision of the of the Madras High in 43 M 107 : 54 Ind. Cas. 209 : AIR 1920 Mad. 324 : 28 MLJ 32 : (1910) MWN 881 : 26 MLT 391 (FB), that a stranger purchaser at a auction is entitled and bound to have any question relating to the satisfaction of the decree decided under Section 47, Civil Procedure Code, the judgment goes on to discuss the case, Prosonno Kumar Sanyal v. Kali Das Sanyal 19 C 683 : 19 IA 166, 6 Sar. 209 (PC), in which their Lordships remarked that s in India were right in not placing too narrow a construction on the language of Section 244 (the present Section 47). It then refers to a recent decision of the same in v. 44 A 266 : 65 Ind. cas. 813 : AIR 1922 All. 200 : 20 ALJ 105, with approval. The authority of this ruling is weakened by the fact that the Judges were undoubtedly influenced by the equities of the case before them; for they say: ", "We are entitled to treat this application as coming within the provisions of that section. Even if we were not so satisfied, we should have been,pre-pared to grant the relief asked for on the analogy of Section 144, in exercise of our inherent power under Section 151 of the Code. There is admittedly no question outstanding between the parties except that which has been decided in this appeal, and to require the question to be now tried out in a regular suit would be merely to put the parties to unnecessary expense. ", "4. However, a very definite finding has been given, and it is incumbent on me to give it the very greatest respect. Apart from 45 A 369 : 74 Ind. Cas. 873 : AIR 1923 All 394 : 21 ALJ 228, this question does seem to have been left in some uncertainty; but on a general examination of the current of cases, bearing on the interpretation of Section 47, there is certainly a very strong tendency to give it a wide application and to bring within its scope questions arising between the parties to the suit and the auction-purchaser. As has been pointed above, the matter now in dispute does, to some extent, relate to the discharge and satisfaction of the decree. I therefore find that an appeal and second appeal do lie. ", "5. When this appeal first came' up for hearing, it was admitted that the Article of the Limitation Act to be applied; was 181 but the learned Advocate for the auction-purchaser now suggests that the. appropriate Article would be 182. There is no direct authority, but the matter has been argued on the analogy of an application under Order XXI, Rule 93, Civil Procedure Code, to an application under Section 144, Civil Procedure Code, for restitution. There has been a considerable conflict of authority whether applications for restitution are governed by Article 181 or Article 182 , but the weight of authority is that they are governed by Article 181. Full Benches of the Allahabad and Patna have said so and the question has been much discussed in Calcutta, where the same conclusion was reached. ", "6. However, there is authority in Madras for the position that applications under Section 144 relate to execution and that Article 182 therefore, applies. The leading Madras case is v. Chockalingam 40 M 780 : 38 Ind. Cas. 806 : AIR 1917 Mad. 185 : 5 LW 267 and the reason given is this: ", "The language of Section 583 of the old Code was not wide enough to cover all cases of benefits arising from the reversal of a decree being fully realized by the successful party. Apart from this change, we see no ground for holding that intended to make any departure in the procedure by which restitution is to be obtained. Under the old Code restitution was by way of execution: see 31 A 551 : 3 Ind. Cas 798 : 13 OC 180 : 36 IA 197 : 10 CLJ 257 : 11 Bom.LR 1200 : 6 MLT 303 : 14 CWN 55 : 19 MLJ 599 (PC). The same rule applies to similar applications under the new Code. The language of Section 47 of the Code would cover all cases of restitution. ", "7. So that the reason why s in Madras have followed v. 40 M 780 : 38 Ind. Cas. 806 : AIR 1917 Mad. 185 : 5 LW 267 is that restitution was considered to be by way of execution under the old Code and that no change was made in the new Code. Even apart from that, it is not difficult to see that restitution does arise by way of execution: for in executing the decree of the which reverses a decree of a lower , account has necessarily to be taken of any changes in the positions of the parties that have taken place since the passing of the decree that has been reversed, For example, if one states that A should hand over possession to B and he does so in execution and the Appellate states that possession should be with A, it is in execution of the Appellate decree that possession is given back to A by B. It is difficult to apply similar reasoning to an application under Order XXI, Rule 93. Article 182 sets out the period of limitation for the execution of a decree or order but an auction-purchaser who applies for the return of the purchase money is certainly not attempting to execute any decree or order. Order XXI. Rule 93, merely gives the auction-purchaser an equitable relief by way of returning to him the money that he has already paid into because of some order passed under Order XXI, Rules 89 to 92, depriving him of land for which he has already paid. Were it not for the provisions of Order XXI, Rule 93, he would be driven to a separate suit. In a recent case decided in this by (1931) MWN 1006 an auction-purchaser claimed restitution under Section 144 (and not under Order XXI, Rule 93) by virtue of the fact that the sale was set aside because of a successful application under Order XXI, Rule 63. , J. held that Section 144 does not apply only to cases where a decree or order is reversed in appeal, but also where an order is made of no effect by virtue of other proceedings, so that when a claimant became successful in a suit filed under Order XXI, Rule 63, the was empowered under Section 144 to put all the parties, including the auction-purchaser, in the same position as they would have been if the claim had been upheld in the first instance. This case is clearly distinguishable from the present one. There are no grounds for holding that Article 182 applies to an application under Order XXI, Rule 93. ", "8. Assuming as was originally conceded that Article 181 is the provision of the Limitation Act that governs this application, it would certainly follow from a plain reading of Article 181 that time began to run from the date of the passing of the original order setting aside the sale. It is, however, argued, on the analogy of orders passed on applications under Section 144 or for the passing of a final decree, that it is from the date of the decree of the final confirming the decree of the first Court that time must be reckoned. That in the case of an application for a final decree time has to be reckoned from the preliminary decree of the final has certainly been established beyond all doubt. in 6 Pat 24 : 98 Ind. Cas. 499 : AIR 1926 PC 93 : 53 IA 197 : 24 ALJ 765 : (1926) MWN 591 : 44 CLJ 63 : 3 CWN 690 : 24 LW 394 : 7 PLT 575 : 31 CWN 58 : 51 MLJ 781 : 28 Bom. LR 1395 (FB) has approved the remarks made in 39 A 641 : 42 Ind. Cas. 93 : AIR 1917 All 163 : 15 ALJ 734 (SB) to the effect that: ", "The essential condition to the making of a final decree is the existence of a preliminary decree which has become conclusive between the parties. ", "and that: ", "when the passed the decree it was open to the plaintiff or the defendant to accept the decree or to appeal. If an. appeal is preferred, the final decree is the decree of of final jurisdiction. When that decree is passed, it is that decree and only that which can be made final between the parties. ", "9. Similar reasoning was adopted by this Court in 44 M 714 : 64 Ind. Cas. 470 : AIR 1921 Mad. 414 : 41 MLJ 117 : 14 LW 180. If there had been no decisions on applications other than those for final decrees, the position of the appellant world have been a strong one. Another group of applications, upon which there has been considerable authority, is that of applications for restitution under Section 144 , which, in the opinion of most of , comes within the scope of Article 181. As has already been pointed out, an application for restitution can be looked upon as one arising in execution of a decree and some Judges while holding that Article 181 applied, have nevertheless been of opinion than such an application was akin to one in execution and so held, on the analogy of Article 182 , that the must have intended that where there were appallate decrees the decree of the final was the decree from which time should be calculated. In view of the fact that Article 182 expressly lays down that time should be reckoned from the date of the last decree whereas Article 181 does not Bay so, it is rather difficult to argue by analogy from Article 182 to Article 181. The main current of authority on this point is undoubtedly to the effect that time does run from the date of the first decree. The matter was very fully considered by a Full Bench of in v. 57 A 26 : 150 Ind. Cas. 1096 : AIR 1934 All. 626 : (1934) AIJ 503 : 7 RA 65 and the majority of the Judges found themselves unable to accept the argument that the proceedings were akin to execution proceedings and that the same principle that time should be reckoned from the date of the final decree should be followed. has consistently held the same view. In v. 11 R 275 : 149 Ind. Cas. 889 : AIR 1933 Rang. 180 : 6 R Rang.337 a contrary view was held. 7 Pat. 794 : 114 Ind. Cas. 476 : AIR 1928 Pat. 598 : 10 PLT 49 : Ind. Rul. (1929) Pat. 156, was there referred to and the opinion was expressed that it was difficult to see in what way an application for the passing of a final decree differed in this respect in principle from an application for restitution. If it was the operative decree of the final that had to be taken into account in reckoning the time allowed for applying for a final decree, then for the same reason it would be the decree of the final Court of Appeal that should be taken into account in reckoning the time for restitution proceedings. Even if this reasoning is valid, it is very difficult to see how a mere application to return purchase money can be assimilated to an application for the passing of a final decree or even to one for restitution of the nature of an execution of a decree. ", "10. Cases dealing with certain other applications seem to me to be more analogous to the present application for a refund of purchase money. 46 C 670 : 50 Ind. Cas. 444 : AIR 1918 PC 151 : 46 IA 52 : 17 ALJ 514 : 36 MLJ 557 : 23 CWN 721 : 21 Bom.LR 632 : (1919) MWN 258 : 30 CLJ 71 : 26 MLT 131 : 10 LW 416 (PC) the provision of the Limitation Act applied was Article 97 '' for money paid upon an existing consideration which afterwards fails\". There the same question arose as to whether time had to be reckoned from the date of the decree of the lower Court or from the date of the decree of which confirmed the judgment of the lower Court. Their Lordships there pointed out that as in India an original decree is not suspended by the presentation of an appeal nor is its operation interrupted when the decree on appeal is one of dismissal, and that as consideration failed at the date of the first decree, the mere fact that an appeal had been filed did not suspend the cause of action and that throughout the pendency of the proceedings in s time was running against the plaintiff. This case is of very great importance and has been discussed in all the cases relating to applications for restitution whichever way Courts have eventually decided. It has been taken as an authority by the Allahabad and Calcutta with regard to restitution proceedings on the ground that as the section clearly says that the period of 'limitation under Article 181 is three years from the time when the right to apply accrues, time must be calculated from the date on which the right accrued, because the cause of action is not interrupted by the subsequent filing of an appeal. AIR 1933 Cal. 422 : 144 Ind. Cas. 150 : Ind. Rul. (1933) Cal. 517 a sale was set aside and money refunded to the auction-purchaser. The decree-holder appealed but the sale was confirmed. A second appeal was filed which was also dismissed. Another judgment-debtor who was not a party to the appeals then filed a suit for the return of the money which had been drawn by the auction-purchaser. The suit was filed more than three years from the date of the original decree but less than three years from the date of the appellate decree. In that case the Judges felt themselves bound by the decision just referred to. They say that: ", "In construing the provisions of the Limitation Act , equitable considerations are out of place and the strict grammatical meaning of the words is the only safe guide. In this view we are of opinion that the right to apply accrued as soon as the order of the District Judge was made in August 1925, confirming the sale and that as the present application was not made within three years from that date, it has been rightly held that the application was barred by limitation. ", "11. No doubt in that case the plaintiff was on a specially weak ground as he had not been a party to the appeals; and this was pointed out in the judgment in this case as being an a fortiori reason for dismissing the suit. There can be no doubt, however, that the case would have been decided against the plaintiff even if those special considerations had not existed. 28 C. 113 an ex parte decree was passed and execution took place. The ex parte decree was subsequently set aside and the judgment-debtor applied for a return of the money realized in execution. There, too, it was held that three years should be calculated from the date of setting aside the ex parte decree. 16 LW 285 : 70 Ind. Cas. 45 : AIR 1923 Mad. 23 : 16 LW 285 : 31 MLT 169 : (1922) MWN 561 it was found that a vendor had no saleable interest. That decree was appealed against but dismissed. A suit was then brought for damages for breach of covenant of title by the vendee and it was held, distinguishing 44 M 714 : 64 Ind. Cas. 470 : AIR 1921 Mad. 414 : 41 MLJ 117 : 14 LW 180 which contained an obiter to the effect that Juscurn Boid v. Pirthi Chand Lal 46 C 670 : 50 Ind. Cas. 444 : AIR 1918 PC 151 : 46 IA 52 : 17 ALJ 514 : 36 MLJ 557 : 23 CWN 721 : 21 Bom.LR 632 : (1919) MWN 258 : 30 CLJ 71 : 26 MLT 131 : 10 LW 416 (PC) had no application to Article 182 and that it would be strange if the basis for calculating the limitation under Article 181 differed from that under Article 182 , that time began to run, from the date of the first decree and not from the date of the appellate decree: Juscurn Boid v. Pirthi Chand Lal 46 C 670 : 50 Ind. Cas. 444 : AIR 1918 PC 151 : 46 IA 52 : 17 ALJ 514 : 36 MLJ 557 : 23 CWN 721 : 21 Bom.LR 632 : (1919) MWN 258 : 30 CLJ 71 : 26 MLT 131 : 10 LW 416 (PC) was there followed. The reason for distinguishing 44 M 714 : 64 Ind. Cas. 470 : AIR 1921 Mad. 414 : 41 MLJ 117 : 14 LW 180 was that applications under Section 144 were of the nature of applications in execution. Although none of the cases immediately referred to above Juscurn Boid v. Pirthi Chand Lal 46 C 670 : 50 Ind. Cas. 444 : AIR 1918 PC 151 : 46 IA 52 : 17 ALJ 514 : 36 MLJ 557 : 23 CWN 721 : 21 Bom.LR 632 : (1919) MWN 258 : 30 CLJ 71 : 26 MLT 131 : 10 LW 416 ( AIR 1933 Cal. 422 : 144 Ind. Cas. 150 : Ind. Rul. (1933) Cal. 517, 28 C 113 and 16 LW 285 : 70 Ind. Cas. 45 : AIR 1923 Mad. 23 : 16 LW 285 : 31 MLT 169 : (1922) MWN 561 deals with precisely the point raised in this application, yet it seems that the same principles have to be applied in this case as in those just quoted. The present application was a simple one under Order XXI, Rule 93, for the return of money and the right to make that application accrued immediately the order setting aside the sale was made. As the cause of, action was not suspended by the filing of the second appeal and , time went on running against the appellant throughout the conduct of those proceedings. As pointed out in AIR 1933 Cal. 422 : 144 Ind. Cas. 150 : Ind. Rul. (1933) Cal. 517. s are not entitled to import equitable considerations when the has made it clear what time should be allowed for filing applications. I, therefore, hold that the present application was out of time. I must mention before concluding a direct decision in favour of the appellant in v. Sital Prasad 11 A 372 : AWN 1889,113. That decision was by a Single Judge. It is moreover, a very old one, and it was decided on purely equitable considerations. It seems never to have been quoted or cited before any other and its authority at present must be very little. ", "12. An alternative argument has been put forward on behalf of the appellant that as he joined with the decree-holder in preferring the appeals, he could not at the same time apply for a refund of the purchase money and that it could not be said that the right accrued to the applicant in pursuing the strictly alternative relief to have the sale upheld. The learned Subordinate Judge in appeal disposed of this argument very summarily by saying that he was unable to follow the reasoning and that if the appellant chose to take the matter in appeal, it was his own fault and he did so at his own risk. I quite agree with. what the learned Subordinate Judge has said. The appellant had two remedies and there was no reason why he should not have adopted both at the same time, one being kept pending until the other was disposed of. He had a choice and must accept the consequences of having made the wrong one. In result the appeal is dismissed with costs. ", "13. The Civil Revision Petition was unnecessary and is dismissed without costs. (Leave granted)."], "relevant_candidates": ["0000002886", "0000353077", "0000877318", "0000917632", "0001240125", "0001511395", "0001633734", "0001665633", "0001667142", "0001890858", "0001930234"]} {"id": "0000957056", "text": ["JUDGMENT , J. ", "1. This is an appeal by special leave on behalf of two brothers, and , who have been convicted under Section 302, Penal Code and sentenced to transportation for life by the Second Additional Sessions Judge of Ferozepore. Their convictions and sentences have been upheld by of by its judgment dated 30-6-1954. ", "The petitioners had been placed on trial along with two others, named and . All these four had Been convicted and sentenced, as stated above, by the learned Sessions Judge; but on appeal, gave and the benefit of the doubt and acquitted them. ", "2. The prosecution case, shortly stated, is that on 2-9-1953 the two petitioners along with the other two accused, who were acquitted as aforesaid by , left their village called Sanghu Dhawan, all armed with 'gandasas' and were seen proceeding towards Muktsar town, about three miles away. ", "A short time after, accompanied by his son, (P. W. 2) and (P.W. 4), who also belong to the same village, left for Muktsar to purchase some chemical manure on a permit by the agriculture department. proceeded ahead and the other two were behind him at a short distance. As soon as reached a certain bridge on the way to Muktsar, about a mile from the village, the four accused, who were lying in ambush in a neighbouring 'bajra' field, came out of the field and attacked him. ", ", the first appellant, opened the attack with a 'gandasa' blow on his head. He was followed by , accused, who dealt some 'gandasa' blows on his leg. fell down and all the four accused were said to have attacked him with 'gandasas' causing as many as 27 injuries on his person. 's two companions, and aforesaid, raised an alarm but were helpless spectators, who being unarmed, could not venture to come to his rescue. ", "Further it was stated by the prosecution witnesses aforesaid that while there was life still left in , accused chopped off their victim's head from the body just above the lower jaw and wrapped the head along with the turban in the 'chaddar' of the deceased. ", " and (P. Ws.), who were returning from Muktsar, claimed to have seen the last part of the prosecution case, namely, that the four accused were seen making away with the head wrapped in a piece of cloth. (P. W. 2) hastened to the police station and lodged the first information report at 5 P. M. the same afternoon, the place of occurrence being noted as a mile and a half towards the east of the police station. ", "The time of the occurrence is not specified except saying that it was in the afternoon. In the first information report all the four accused persons were named and said to have conspired to kill . The prosecution version as laid in the first information report is substantially as stated above. As regards the motive of the crime, it is said in the first information report \"All the four culprits suspected my father of his having given a secret information against them\". ", "3. At the trial (P. W. 2) and (P. W. 4) deposed as eye-witnesses to the occurrence from beginning to end, whereas (P.W. 6) and (P. W. 7) deposed to the last part of the prosecution case as having witnessed the occurrence on hearing an alarm from about 100 to 150 yards. They claim to have seen all the four accused armed with 'gandasas' and wrapping the head in a piece of cloth. ", "4. The defence of the appellants was a denial of their participation in the occurrence and they explained their implication by alleging that they were on inimical terms with the family of the deceased . The appellant, , set up a case of 'alibi' which may best be stated in his own words in his statement under Section 342 , Criminal P. C. before the Magistrate who held the inquiry. He said: ", "\"I am a member of panchayat. I along with other members of our panchayat came to Muktsar that day at 8 a.m. Chief Minister was here that day. I left Muktsar that day after the oath taking ceremony etc., at about 2-30 p.m. When I reached the local cinema it started raining. ", "Head Constable and of Chak Bir Sarkar met me there. I remained there for about 1-1/2 hours and then went to village, when rain stopped. I was accompanied by , member village panchayat; , & were coming to the thana to make the report. , member Panchayat enquired what the matter was. They replied that their father had been killed by an unknown person. Shortly afterwards, , M.L.A. of Bir Sarkar met us. Then we went to the village. I am innocent\". ", "5. It is convenient here to dispose of this particular defence of the accused to which our attention was invited by the learned counsel for the appellants. He urged that this was a very bold defence. It was taken at an early stage of the inquiry against the appellants and it could easily have been verified with reference to the official records. ", "It has been admitted in the evidence led on behalf of the prosecution that there was a function in the forenoon of the date of the occurrence at which the Chief Minister was present and the members of the took their oath of office. According to the evidence, this function came to an end at about 12-30 p.m. The burden of proving the 'alibi' undoubtedly lay on the appellant . It is true, as urged by his counsel, that this was a bold defence, but the burden to establish that defence, however bold it may have been, lay on the accused. ", "No attempt was made to call any evidence, oral or documentary, to prove that the appellant was present at the ceremony and that it came to an end at about 2-30 p.m. as alleged by him. If that defence had been made out, certainly the appellant would have been entitled to an acquittal because the occurrence could not have taken place much later than 2-30 p.m., though the exact time of the occurrence is not known. ", "But the indication in the evidence is that it took place at about 3 p.m. As the burden of proving this special defence of alibi has not been discharged, appellant 's case stands on the same footing as that of the other appellant. ", "6. But even so, the burden of proving the case against the appellants was on the prosecution irrespective of whether or not the accused have made out a plausible defence. The case for the prosecution against the appellants rests on the testimony, as already indicated, of P. Ws. 2 and 4 who had accompanied the deceased from the village on the journey to Muktsar and P. Ws. 6 and 7 who were on their way back from Muktsar and were attracted to the scene of the occurrence by the alarm raised by those two witnesses. ", "The courts below have discussed the evidence of these four witnesses in great detail and have found it reliable notwithstanding the fact that (P. W. 2), (P. W. 6) and (P. W.7) are close relations of the deceased. On the face of it, therefore, there is no question of law involved and no grounds for interference have been made out in special appeal. ", "7. But it has been argued by the learned counsel for the appellants with his usual vehemence that did not act upon the testimony of those four witnesses in so far as it acquitted two of four accused, namely, and . The reasons for the acquittal of those two persons may be stated in the words of as follows:-- ", "\"In regard to the complicity of and , I have some doubt and I think that they must be given the benefit of the doubt. Neither nor had any motive to murder . In the first information report definite part was assigned to and inasmuch as it was said that and inflicted gandasa blows from right side while was lying down and cut off major portion of his head from the body. ", " who made the first information report stated at the trial that it was not correct that and accused had cut off the head of his father. , P. W. 4, gave evidence that chopped off the head of . ", "No particular injuries are ascribed to and . , P. W. 6, and , P. W. 7, deposed that they saw the four accused from a distance of 60 or 70 karams standing near the dead body of and that they had gandasas with them. stated that the four accused walked away towards Ude Karan. In my opinion, the evidence given by , P. W. 6, and , P. W. 7, does, not necessarily connect and with the crime\". ", "8. In this connection reliance was placed on behalf of the appellants on the recent decision of this Court dated 13-9-1955 (unreported) in the case of v. State of Punjab (Since ). In that case two persons were placed on trial on a charge of murder and convicted by the trial court. ", "On appeal, acquitted one of them giving him the benefit of the doubt but maintained the conviction of the other, as also the sentence of death passed upon him. This Court found that the positive evidence against the convicted person was not stronger than or any different from the evidence led against the acquitted person. But that was not the sole ground of the decision. ", "This Court further observed that the direct testimony against the accused persons was not free from blemish, in so far as it appeared from the evidence that the first person who originated the theory of the complicity of the accused in that case was almost a blind: person who could not see things, particularly at the dead of the night, and that the other witnesses who turned up at the alarm had readily accepted the opinion of the first witness that it was the condemned person who had been responsible for the murderous assault. ", "This Court therefore felt a reasonable doubt as to the correctness of the oral testimony and had consequently to give the benefit of the doubt to the accused. ", "9. The case in hand is similar to the case reported as in so far as it was found in that case, as we are inclined to hold in this case, that the acquittal of the other two accused by may not have been entirely correct. ", "Reference to that reported case is only by way of illustration and not by way of an appeal to precedent, because on the facts no two cases can be similar. Each case has its own peculiar facts and it is therefore always risky to appeal to precedents on questions of fact. The highest that can be or has Been said on behalf of the appellants in this case is that two of the four accused have been acquitted, though the evidence against them, so far as the direct testimony went, was the same as against the appellants also; but it does not follow as a necessary corollary that because the other two accused have been acquitted by the appellants also must be similarly acquitted. ", "In the present case differentiated the case of the two appellants from that of the other two accused whom it acquitted chiefly on the ground that whereas there was some evidence of motive against the two appellants, there was no such evidence against those two acquitted persons. On the question of motive the trial court held that it had not been established that the, deceased had given information to the police leading to the recovery of a pistol from , the first appellant, and his conviction for an offence under the Arms Act . ", "It had only been established that (P. W. 8), brother of the deceased , had given evidence against the accused in the Arms Act case. If that was the only case of animosity between the two families, the appellants could have greater reasons to be offended against himself. But it has repeatedly been pointed out by this Court that where the positive evidence against the accused is clear, cogent and reliable, the question of motive is of no importance. As regards the question who gave which blows to the deceased, the prosecution evidence was that after fell from the blows of the two appellants, all the four accused gave gandasa blows to the fallen man. ", "Be that as it may, we are no more concerned with the case against those two accused persons who have been acquitted by ; but so far as the appellants are concerned, the evidence of the four eyewitnesses referred to above is consistent and has not been shaken in cross-examination. That evidence has been relied upon by the courts below and we do not see any sufficient reasons to go behind that finding. It is true that three out of those four witnesses are closely related to the deceased . ", "But that, it has again been repeatedly held, is no ground for not acting upon that testimony if it is otherwise reliable in the sense that the witnesses were competent witnesses who could be expected to be near about the place of occurrence and could have seen what happened that afternoon. We need not notice the other arguments sought to be advanced in this bearing upon the probabilities of the case because those are all questions of fact which have been adverted to and discussed by the courts below. ", "10. In our opinion, no grounds have been made out for interference. The appeal is accordingly dismissed."], "relevant_candidates": ["0000770422"]} {"id": "0000967474", "text": ["PETITIONER: WORKMEN OF MOTIPUR SUGAR FACTORY (PRIVATE)LIMITED Vs. RESPONDENT: MOTIPUR SUGAR FACTORY DATE OF JUDGMENT: 30/03/1965 BENCH: , K.N. BENCH: , K.N. , P.B. (CJ) , M. , V. CITATION: 1965 AIR 1803 1965 SCR (3) 588 CITATOR INFO : R 1972 SC 136 (33) R 1972 SC 277 (11) R 1972 SC1031 (51,57) R 1973 SC1227 (22,42) R 1975 SC1900 (7) R 1978 SC1380 (8) R 1979 SC1652 (18) RF 1980 SC1896 (68) R 1984 SC 289 (15) ACT: Industrial Disputes--Discharge of workmen on account of go slow--Reference as to whether discharge justified--, if could decide go-slow--No enquiry before discharge--if discharge could be justified before . HEADNOTE: The workers of the respondent started a go-slow in its sugar factory. Therefore, the respondent issued a general notice to those workmen and individually to each workman notifying that unless he recorded his willingness to discharge his duties faithfully and diligently so as to give a certain minimum output, he will be no longer employed; and that he must record his willingness in the office by a certain time, failing which he shall stand discharged from the service of the respondent without any further notice. Because the appellants, who were 119 of such workmen. failed to record their willingness, the respondent issued a notice discharging their services. The respondent held no enquiry as required by the Standing Orders before dispensing with the, services of the appellants. A general strike followed resulting in a joint application by both the parties to the and the referred the question to the , whether the discharge of the workmen was justified. The came to the conclusion that there was go-slow during the period, and consequently held that the discharge of the workmen was fully justified. In appeal by the appellant contended that (i) all that the was concerned with was to decide whether the discharge of the workmen for not giving an undertaking was justified or not, and that it was no part of the duty of the to decide whether there was go-slow which would justify the order of discharge; (ii) Since the respondent held no enquiry as required by the Standing Orders, it could not justify the discharge before the and (iii) the finding of the that go-slow, had been proved was perverse and the had ignored relevant evidence in coming to the conclusion. HELD: The contentions must be rejected. (i) Taking into account the wide terms of reference, the manner in which it was understood before the , and the fact that it must b.e read alongwith the two notices, particularly because it was made soon thereafter at the joint application of the parties, the was entitled to go into the real dispute between the parties, namely whether the discharge was justified on the ground that there was misconduct in the form of go-slow by the workmen concerned. [596D] (ii) No distinction can be made between cases when the domestic enquiry is invalid and those where no enquiry has in fact been held. This Court has consistently held that if the domestic enquiry is irregular, invalid or improper, the may give an opportunity 589 to the employer to prove his case and in doing so the tries the merits itself. [598A-C] Case law referred to. (iii) As the case involved the discharge of 119 workmen, this Court went into the evidence, and the evidence showed that the decision of the was not wrong that there Was go-slow and that the discharge was fully justified. [598E] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 108 of 1964. Appeal by special leave from the Award dated May 11, 1962, of , Bihar, Patna in Reference No. 4 of 1961. ", ", , , for , for the appellants. ", ", and , for the respondent. ", "The Judgment of the Court was delivered by , J. This is an appeal by special leave against the award of , Bihar. It relates to the discharge of 119 workmen of the respondent who were employed as cane carrier mazdoors or as cane carrier supervisors or jamadars. All these were seasonal workmen. It is necessary to set out in some detail the circumstances leading to the discharge. The respondent is a sugar factory and the crushing season starts usually in the first half of November each year. We are concerned in the present appeal with November and December 1960. It appears that from the season 1956-57, the respondent introduced an incentive bonus scheme in the factory. The scheme continued thereafter from season to season with certain changes. It also appears that in the beginning of each season, the respondent used to put forward the incentive bonus scheme and consult the workmen. The same thing was done when the season 1960-61 was about to start in November 1960. But the scheme for this season proposed by the respondent contained certain changes which were apparently not acceptable to the workmen. One of the features in the scheme was that the crushing of sugar cane per day should be 32,000 maunds. The general secretary of the union of the workmen suggested certain alterations for the consideration of the respondent on November 7, 1960, and one of the main alterations suggested was that the norm for per day's crushing should be 125,000 maunds of cane and thereafter incentive bonus should be given at a certain rate. No agreement seems to have reached on the incentive bonus scheme, and the complaint of the respondent was that the secretary incited the workmen to go slow in consequence of the change in the scheme. Consequently mild go-slow in cane the carrier department which is the basic department in a sugar mill began from the very start of the season on November 10, 1960. The L/P(N)4SCI respondent's case further was that on November 27, 1960, the workmen in the cane carrier department started in combination with one another to go-slow deliberately and wilfully and in a planned manner and thus reduced the average daily crushing to 26,000 maunds cane which was much less than the average crushing in previous seasons. This conduct of the workmen was said to be highly prejudicial to the respondent and besides being technically unsafe, had brought into existence an acute shortage in the fuel position which might have resulted in the complete stoppage of the mill and a major breakdown of the machinery. When the position became serious the respondent issued a general notice on December 15, 1960 inviting the attention of the workmen concerned to this state of affairs which had been continuing of any rate since November 27, 1960. This notice was in the following terms:-- ", "\"At the instigation of , the General Secretary of your Union, you since the very beginning of this season, have been failing in your duty to ensure adequate and regular loading of the cane carrier, and with effect from the 27th November, 1960, you, in combination with each other, have deliberately and wilfully resorted to a clear 'go-slow' tactics, a fact openly admitted by the above- ", "named General Secretary of your Union in presence of the Labour Superintendent and Labour Officer , in course of discussions held on the subject in the office of the Assistant Labour Commissioner on the 6th December, 1960. You have deliberately reduced the average daily crushing to more or less 26,000 maunds out of which more than 2,000 maunds is due to the newly introduced device of direct feeding of the cane carrier by cane carts weighed during nights and not attributable to any effort on your part. Thus the actual crushing given by you is practically something between 23,000 and 24,000 maunds only which is highly uneconomical and technically unsafe for this factory with the installed crushing capacity of more than 1,200 tons a day. ", "\"About 14,000 bales of extra bagasse kept in stock as reserve have already been consumed in the past 12 days or so and now the factory is faced with a situation when at any moment its boilers may go out of steam for want of bagasse-fuel leading to an abrupt stoppage of the mills and finally resulting into a major breakdown of machineries. ", "\"It is therefore hereby notified that unless you voluntarily record your willingness individually to discharge your duties faithfully and diligently by feeding the cane carrier so as to give a minimum average daily crush of 32,000 maunds, excluding stoppages other than those due to overloading or under loading of the cane carrier, you will be considered to be no longer employed by the company. You must record your willingness in the office of the Factory Manager on or before 4 P.M. of Saturday the 17th December, 1960, failing which you shall stand discharged from the service of the company without any further notice with effect from 18-12-1960 and your place will be filled by recruiting other labour to man the cane carrier station.\" ", "This notice was put on the notice-board along with translations in Hindi and Urdu and it was also sent individually to the workmen in cane carrier department. A copy was also sent to the Secretary of the union with the workmen concerned to submit their willingness as desired by the respondent in the notice in question either individually or even collectively through the union. The secretary of the union replied to this notice on the same day and said that it was \"full of maliciously false and mischievous statements\". The secretary also denied that the workmen had adopted go-slow tactics or that he had advised the workmen to adopt such tactics. Finally the secretary said that it was simply fantastic to ask a worker to give an undertaking to crush at least 32,000 maunds per day and if the service of any workman was terminated on his not giving the undertaking, the responsibility would be that of the respondent itself. The respondent's case was that three workmen gave undertakings as required in the notice while the rest did not. Thereafter the situation in the factory deteriorated and the workmen grew more and more unruly and even started entering the factory without taking their attendance token. In consequence of this attitude of the workmen, the respondent issued a notice at 5 p.m. on December 17, 1960 which was in the following terms: ", "\"The following workers of the cane carrier station who failed to record their willingness in factory manager's office by 4 p.m. this day the 17th December, 1960, to work faithfully and diligently in accordance with the management's notice dated 15-12-1960, stand discharged from the company's service and their names have been struck off the rolls with effect from 18th December 1960. From now on, the workers concerned have forfeited their right to go to and occupy their former place of work and any action contrary to this on their part will make them liable to prosecution for criminal trespass. \"Their final account will be ready for payment by 4 p.m. on the 19th December 1960, when, or whereafter, they may present themselves at the company's Office for receiving payment of their wages and other dues, if any, during working hours\", and then mentions the names of 119 workmen of the cane carriers department. ", "592 ", "Thus the services of the workmen concerned stood discharged from December 18, 1960 under this notice. This was followed by a general strike in pursuance of the notice served on the respondent by the union on December 17, 1960. The strike continued upto December 22, 1960 when as a result of an agreement it was decided that the case of the discharged workmen and the question of wages for the strike period be referred to adjudication. Consequently a joint application by both parties was made to on December 21, 1960. The then made a reference of the following two questions to the tribunal on January 25, 1961:-- ", "1. Whether the discharge of workmen mentioned in the Appendix was justified. If not, whether they should be re-instated and/or they are entitled to any other relief? ", "2. Whether the workmen be paid wages for the period 16-00 hrs. on December 18, 1960 to 8-00 hours on December 22, 1960? ", "It may be mentioned that the respondent had held no enquiry as required by the standing Orders before dispensing with the services of the workmen concerned. Therefore, when the matter went before the tribunal, the question that was tried was whether there was go-slow between November 27, 1960 and December. 15, 1960. The respondent led evidence, which was mainly documentary and based on the past performance of the factory to show that there was in fact go-slow by the workmen concerned during this period. The appellants on the other hand also relying on the record of the respondent tried to prove that the cane carrier department had been giving normal work in accordance with what had happened in the past in connection with cane crushing. That is how the tribunal considered the question on the basis of the relevant statistics supplied by both parties and also oral evidence whether there was go-slow during this period or not. After considering all the evidence it came to the conclusion that there was go slow during this period. Consequently it held that the discharge of the workmen was fully justified. It therefore answered the first question referred to it in favour of the respondent. The second question with respect to wages for the strike period was not pressed 9n behalf of the appellants and was therefore decided against them. Thereafter the appellants came to this Court and obtained special leave; and that is how the matter has come up before us. ", "We are concerned in the present appeal only with the first question which was referred to the tribunal. Learned counsel for the appellants has raised three main contentions before us in support of the appeal. In the first place it is contended that the tribunal misdirected itself as to the Scope of the reference and that all that the tribunal was concerned with was to decide whether the discharge of the workmen for not giving an undertaking was justified or not, and that it was no part of the duty of the tribunal to decide whether there was go-slow between the relevant dates which would justify the order of discharge. Secondly, it is urged that the respondent had given no charge-sheets to the workmen concerned and had held no enquiry as required by the Standing Orders. Therefore, it was not' open to the respondent to justify the discharge before the tribunal, and the tribunal had no jurisdiction to go into the merits of the question relating to go-slow. Lastly it is urged that the finding of the tribunal that go-slow had been proved was perverse and the tribunal had ignored relevant evidence in coming to that conclusion. We shall deal with these contentions seriatim. ", "Re. (1).. ", "We have already set out the relevant term of reference and it will be seen that 'it is wide and general in terms and asks the tribunal to decide whether the discharge of the workmen concerned was justified or not. It does not mention the grounds on which the discharge was based and it is for the tribunal to investigate the grounds and decide whether those grounds justify discharge or not. So if the tribunal finds that the discharge was due to the use of go-slow tactics by the workmen concerned it will be entitled to investigate the question whether the use of go-slow tactics by the workmen had been proved or not. ", "But the argument on behalf of the appellants is that the notice of December 17 gives the reason for the discharge and the tribunal confined only to that notice and has to consider whether the reason given in that notice for discharge is justified. We have already set out-that,notice and it certainly says that the workmen mentioned at the foot of the notice had failed to record their willingness to work faithfully and diligently in accordance with the respondent's notice of December 15, 1960, and therefore they stood discharged from the respondent's services and their names had been struck off the rolls from December 18, 1960. So it is argued that the reason for the discharge of the workmen concerned was not go-slow but their failure to record their willingness to work faithfully and diligently.. The tribunal had therefore to see whether this reason for the discharge of the workmen was justifiable, and that it had no jurisdiction to go beyond this and to investigate the question of go-slow. ", "We are of opinion that there is no force in this argument. Apart from the question that both parties before the tribunal went into the question of go-slow and voluminous evidence was led from both sides either to prove that there was go-slow or to disprove the same, it appears to us that it would be taking much too technical a view to hold that the discharge was due merely to the failure of the workmen to give the undertaking and that the go-slow had nothing to do with the discharge. We are of opinion that the two notices of December 15 and December 17 have to be read together and it may be pointed out that the notice of December 17th does refer to the earlier notice of December 15th. If we read the two notices together, there can be in our opinion be no doubt that though the discharge is worded as if it was due to the failure to record their willingness to work faithfully and diligently, it was really due to the workmen concerned using go-slow tactics. Notice of December 15, is in two parts. The first part sets out the facts and states what the workmen had been doing from the very beginning of the season and particularly from November 27, 1960. It states that on the instigation of the secretary of the union, the workmen had been failing in their duty to ensure adequate and regular loading of the cane carrier from the very beginning of the season. It further charges that with effect from November 27 they had in combination with one another deliberately and wilfully resorted to a clear go-slow, a fact said to have been openly admitted by the secretary in the presence of the Labour Superintendent and Labour Officer, Muzaffarpur, in course of discussions held in the office of the Assistant Labour Commissioner on December 6, 1960. The notice then says that the average daily crushing is 26,000 maunds out of which more than 2,000 was due to the newly introduced device of direct feeding of the cane carrier by cane carts weighed during nights and not attributable to any effort on the workmen's parts; thus the actual crushing had been practically reduced to something between 23,000 to 24,000 maunds per day, which was highly uneconomical and technically unsafe for the factory which had an installed crushing capacity of more than 1,200 tons a day i.e. over 32,000 maunds a day. The notice also says that about 14,000 bales of extra bagasse kept in stock as reserve and already been consumed in the last twelve days and the factory was faced with a situation when at any moment its boilers might go out of steam for want of bagasse-fuel leading to an abrupt stoppage of the mill and finally resulting in a major break-down of machinery. ", "These facts which were given in the first part of the notice dated December 15, 1960 really show the charge which the respondent was making against the workmen concerned. Having made this charge of go-slow in the manner indicated in the first part of the notice (and it may be mentioned that this notice was not only put on the notice-board but was given to each workmen individually), the respondent then indicated in the second part what action it intended to take. In this part the respondent told the workmen concerned that unless they voluntarily recorded their willingness individually to discharge their duties faithfully and diligently by feeding the cane carrier so as to give a minimum average daily crush of 32,000 maunds, excluding stoppages other than those due to over-loading or under-loading of the cane carrier, they would be considered to be no longer employed by the respondent. They were given time up to 4 p.m. on December 17, 1960 to record their willingness failing which they would stand discharged from the respondent's service without any further notice with effect from December 18, 1960. The second part of the notice thus indicated to the workmen concerned how much they had to crush every day to avoid the charge of go-slow. It further indicated that the respondent was prepared to let bygones be bygones if the workmen concerned were prepared to give an undertaking in the manner desired. Assuming that this course adopted by the respondent was unjust and even improper, reading of the two parts of the notice of December 15, 1960 shows that in the opinion of the respondent was the normal cane crushing per day and what was the charge of the respondent against the workmen concerned in the matter of go-slow and what the respondent was prepared to accept if the workmen were agreeable to the claim of the respondent. It is clear therefore from the notice which was given on December 15, 1960 that the respondent thought that 32,000 maunds should be the normal crush every day excluding stoppages other than those due to over-loading or under- loading of the cane carrier. It also charged the workmen with producing much less than this for the period from November 27, 1960 to December 15, 1960, though it was prepared to 1st bygones be bygones, provided the workmen in future undertook to give normal production. It is in the background of this charge contained in the notice of December 15, 1960 that we have to read the notice of December 17, 1960. That notice says that the workmen had failed to record their willingness to work faithfully and diligently in accordance with the notice of December 15, 1960 and therefore they stood discharged, meaning thereby that the respondent was charging the workmen with go slow as indicated in the notice of December 15, 1960 and that as they were not prepared to give normal production even in future they were being discharged. Therefore, though in form the notice of December 17, 1960 reads as if the workmen were being discharged for not giving the undertaking as desired, the real basis of the notice of discharge of December 17, 1960 is the use of goslow which had already been indicated in the notice of December 15 given to each workman individually also. ", "The reference was made on the joint application of both parties. If all that the workmen desired in their joint application for reference was that it should only be considered whether the discharge of the workmen for refusing to give an undertaking was justified, there was nothing to prevent the workmen to insist that in the joint application this matter should be specifically mentioned. In the joint application the first matter which was specified was in these terms: ", "\"Whether the discharge of workmen mentioned in the appendix was justified? If not, whether they should be reinstated and/or they are entitled to any other relief?\" ", "Now if all that was desired was that the tribunal should go into the question whether the discharge of the workmen on the ground that they had failed to give the undertaking should be investigated, it would have been easy to put this term only in the reference in the joint application thus; \"Whether the discharges of the workmen mentioned in the appendix on the ground of their failure to give an undertaking was justified?\" The very fact that the matter specified as in dispute was put in the wide words already quoted above shows that the parties did not wish to confine their dispute only to the question whether the discharge on the ground of failure to give an undertaking was justified. Further we have already indicated that both parties understood the dispute to be whether go-slow was justified or not and that is why voluminous evidence was led before the tribunal. The wide terms in which the reference was made along with the notice of December 17th read with the notice of December 15th leave no doubt in our mind that the reference included investigation of any cause which might have led to the discharge of the workmen. There is no doubt in this case that even though notice of discharge was pharsed as if the discharge was being made on account of the failure to give an undertaking the real reason for the discharge was that the workmen had been guilty of go-slow between November 27 and December 15 and were not prepared in spite of the respondent's giving them a chance to improve to show better results. Therefore taking into account the wide terms of reference, the manner in which it was understood before the tribunal, and the fact that it must be read along with the two notices of December 15 and 17, 1960, particularly because it was made soon thereafter at the joint application of the parties, we have no doubt that the tribunal was entitled to go into the real dispute between the parties, namely whether the discharge was justified on the ground that there was misconduct in the form of go-slow by the workmen concerned between November 27, 1950 workmen therefore on this head must be rejected. ", "Re. 11). ", "Then we come to the question whether it was open to the tribunal when there was no enquiry whatsoever by the respondent to hold an enquiry itself into the question of go-slow. It was urged on behalf of the appellants that not only there was no enquiry in the present case but there was no charge either. We do not agree that there was no charge by the respondent against the workmen concerned. The first part of the notice of December 15, 1960 which was served on each individual workmen was certainly a charge by the respondent telling the workmen concerned that they were guilty of go-slow for the period between November 27 and December 15, 1960. It is true that the notice was not headed as a charge and it did not specify that an enquiry would follow, which is the usual procedure when a formal charge is given. Even so, there can be no doubt that the workmen concerned knew what was the charge against them which was really responsible for their discharge from December 18, 1960. ", "It is now well-settled by a number of decisions of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it, In such a case the employer would not have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the tribunal which will have jurisdiction not only to go into the limited questions open to a tribunal where domestic inquiry has been properly held (see v. Their workmen(1) but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified, We may in this connection refer to (2), (3) and v. Its Workman(4) There three cases were further considered by this court in . v. ), and reference was also made to the decision of in v. (6) It was pointed out that \"the import effect of commission to hold an enquiry was merely this: that the tribunal would not have to consider only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have really been made out\". It is true that three of these cases, except case(3), were on applications under s. 33 of the Industrial Disputes Act, 1947. But in principle we see no difference whether the matter comes before the tribunal for approval under s. 33 or on a reference under s. 10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. (9) was on: a reference under s. 10 , and the same principle was applied there also, the only difference being. that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper. If it is held that in cases where the employer dismisses his employee without holding an enquiry, the dismissal must be set aside by the industrial tribunal only on that ground, it would inevitably mean that the employer will immediately proceed to hold the enquiry and pass an order dismissing the employee once again. In that case, another industrial dispute would arise and the employer would be entitled to rely upon the enquiry which he had held in the mean-time. This course would mean delay and on the second occasion it will entitle the employer to claim the benefit of the domestic enquiry given. On the other hand, if in such cases the employer is given an opportunity to justify the (1) S.C.R. 667. ", "(2) [1959] Supp. S.C.R. 836. ", "(3) [1960] IS.C.R. 32. ", "(4) [1960] I.S.C.R.806. ", "(5) [1962] 3 S.C.R.684. ", "(6) [1954] L.A.C.697. ", "598 ", "impugned dismissal on the merits of his case being considered by the tribunal for itself and that clearly would be to the benefit of the employee. That is why this has consistently held that if the domestic enquiry is irregular, invalid or improper, the tribunal give an opportunity to the employer to prove his case and in doing so the tribunal tries the merits itself. This view is consistent with the approach which industrial adjudication generally adopts with a view to do justice between the parties without relying too much on technical considerations and with the object of avoiding delay in the disposal of industrial disputes. Therefore, we are satisfied that no distinction can be made between cases where the domestic enquiry is invalid and those where no enquiry has in fact been held. We must therefore reject the contention that as there was no enquiry in this case it was not open to the respondent to justify the discharge before the tribunal. Re. (iii) The question whether there was go-slow during the period from November 27 to December 15, 1960 is a question of fact and the tribunal has come to the conclusion that there was go-slow during this period. Ordinarily this does not go into findings of fact recorded by a tribunal unless there are special reasons, as, for example, where the finding is based on no evidence,--which of course is not the case here. Learned counsel for the appellants however urges that the finding of the tribunal that the workmen concerned were guilty of go-slow is perverse and that evidence which was relevant and material has been ignored. As the case involves the discharge of as many as 119 workmen we have decided to go broadly into the evidence to see whether the finding of the tribunal is patently wrong. For this purpose we may first refer to the past history of the working of the respondent factory. It appears that till this court condemned the practice of go-slow in the case of ). It was not unusual in the State of Bihar for workmen to give notice of go-slow to employers as if it was a legitimate weapon to be used in matters of dispute between the employers and the workmen. In the present case the respondent had complained as far back at 1950 that go-slow was being resorted to. In 1950 a court of enquiry was constituted to enquire into this question and it made a report that there was a slow-down on the part of the workman for several days in February-March 1950. It also came to the conclusion that the slow-down was instigated and sponsored by union leaders. In 1951, the workmen gave notice of go-slow in case their demands were not fulfilled (vide Ex. A-1) Similar notices were given in 1952 (vide Ex. A-2), In 1954 (vide Ex. A-3 and A-4) and in 1955 (vide Exs. A-5, A-6 and A-7 and on some occasions threats of go-slow did actually materialise. Besides these notices the management had occasion to complain in 1955. 1957, and 1958 more than once that go-slow was being ", "(x) [1962] 3 S.C.R,. 684. ", "599 ", "resorted to at the cane carrier. Thus it appears that resorting to go-slow was a common practice in this factory. It is in the background of this persistent attitude of the workmen that we have to see what happened in November 1960. We have already referred to the fact that the workmen were dissatisfied with the new incentive bonus scheme proposed by the respondent. It is not necessary to go into the merits of this new scheme which was proposed in September 1960. But it appears that when there was dispute in the 1959-60 season on the question of how much cane should be crushed, the secretary of the union had accepted in a conference with the Assistant Labour Commissioner that there had been a drop in the amount of cane crushed, though he maintained that it was still the average crush. He had also stated then that the workmen were dissatisfied with the incentive bonus scheme in that season and had withdrawn the extra efforts they were putting in after the introduction of the incentive scheme for the first time in 1956-57. Further it was admitted by the secretary in his evidence that when the bonus scheme was proposed in 1960-61, it was considered by the workmen in a meeting and it was decided that if the new system was introduced without the consent of the workmen they would not put in any extra effort for giving more than what was the normal crush in the mill. The evidence also shows that there were conferences about the new scheme and at one stage the respondent suggested that the norm should be 30,000 maunds crush per day while the union was agreeable to 29,500 maunds per day. But there was no agreement in this behalf and so that workmen carried out their resolve not to put in extra efforts to give more than the average normal crushing per day. Thus the season which began in November 1960 started with the withdrawal of extra efforts by the workmen which in plain terms means that the workman were not prepared to do what they had been doing in this previous season 1959-60 and were slowing down production as compared to what it was in 1959-60. It is in the background of this history and this admission that we have to look broadly into the evidence to see whether the tribunal's conclusion that there was go-slow is justified. The main contention on behalf of the respondent in this connection is that one has to see is that is called crushing speed for a day of 24 hours and it is this crushing speed which would determine whether there was go-slow during the period in dispute. It has been urged that crushing speed per 24 hours is different from the actual crushing per day or the average crushing for a period, for the actual crushing per day from which the crushing speed is arrived at depends on a number of factors, particularly it depends on the amount of stoppages that take place during the day and if there are more stoppages the actual crushing on a particular day would necessarily go down. Crushing speed per twenty- four hours on the other hand is arrived at by excluding the stoppages and then working out what would be the amount of cane crushed in 24 hours if there had been no stoppages. The case of the respondent further is that when it gave the notice on December 15, 1960 asking for a crush of 32,000 maunds per day it really meant that the workmen should work in such a way as to give a crushing speed of 32,000 maunds per day, though the words \"crushing speed\" were not actually used in the notice. It is however pointed out that the notice when it mentions 32,000 maunds as the normal crush expected per day excluded stoppages other than those due to over-loading or under-loading of the cane carrier. Therefore, the respondent wanted the workmen to give a crushing speed of 32,000 maunds per day which would exclude stoppages, the only exception being stoppages due to over- loading or underloading, which, according to the respondent, is due to the deliberate action of the cane carrier workmen to cause stoppages, We think that this explanation of what the respondent meant when it gave the notice of average daily crush of 32.000 maunds is reasonable, for it is impossible to accept that 32,000 maunds were required to be crushed irrespective of stoppages, beyond the control of the workmen. Further it is not in dispute that the labour force was more or less the same throughout these years, and therefore we have to see whether during the period from November 27 to December 15, 1960 there was any significant drop in the crushing speed. If there was such a significant drop that could only be due to go-slow tactics which have been euphemistically called withdrawal of extra efforts. It is necessary therefore to took at the charts produced in this case to determine this question. The appellants mainly relay on chart Ex. W-3. That is however a chart of actual crushing per day during the period from 1954-55 to 1960-61 and has nothing to do with crushing speed which in our opinion would be the determining factor in finding out whether there was go-slow. The actual crush may vary as we have already said due to so many factors, particularly due to stoppages for one reason or the other. The respondent produced another chart Ex. W-4 which shows the crushing speed for the entire season from 1954-55 to 1959-60. We consider that it would not be proper to take the figures for the years 1956-57 to 1959-60 in which years incentive bonus schemes were in force and which according to the workmen resulted in extra efforts on their part. But the figures of 1954-55 and 1955-56 would be relevant because in these years there was no incentive bonus scheme and no night weighment 'of carts. The workmen have also produced a chart showing cane crushed, actual crushing days and crushing per day; but this chart does not show the crushing speed and does not take into account the stoppages. It merely shows the actual number of working days and the average per day. That however would not be an accurate way of finding out whether in fact there was go-slow during the period with which we are concerned. The respondent's chart Ex. W-4 while showing the same amount of actual crushing also shows what would be the crushing speed per 24 hours after excluding stoppages. This chart in our opinion is the proper chart for determining whether there was go slow during the revelant period. Now according to this chart (Ex. W-4) the daily average crushing speed in 1954-55 was 29,784 maunds and in 1955-56, 30,520 maunds without incentive bonus and without night weighment of carts. It appears that from the middle of 1959-60 season night weighment of carts started and it is not in dispute that resulted in an increase in the daily crushing and this increase is put at over 2,000' maunds per day by the respondent; the secretary of the union admitted that this would result in an increase of about 2,500 maunds per day. We have already said that in the years 1954 and 1955 there was no incentive bonus and if these figures are accepted as giving the average crushing speed per day (when there was no incentive bonus and no weighment of carts at night) it would in our opinion be not improper to accept that the crushing speed with night weighment of carts would be in the neighbourhood of 32,000 maunds per day in view of the admission that night weighment of carts resulted in an increase of crushing by about-2,000 maunds to 2,500 maunds per day. Therefore, when the respondent gave notice on December 15, 1960 that the average crushing per day should be 32,000 maunds excluding stoppages (except those due to over-loading or underloading of the cane carrier, for which the workmen would be responsible) it Cannot be said that the respondent had fixed something which was abnormal. It is true that when negotiations were taking place in connection with the incentive bonus scheme for the year 1960-61, the respondent was prepared to accept a crushing speed of 30,000 maunds per day above which the incentive bonus scheme would apply. That is however easily understood for a proper incentive bonus scheme always fixes a norm which is slightly lower than the average in order that there may be greater incentive to labour to produce more than the average. Even so, when the incentive bonus scheme for 1960-61, was not acceptable to the workmen and they had already decided to withdraw what they called extra effort, the respondent would not be unjustified in asking for the full average crushing speed based on the production of the years 1954-55 and 1955- 56, when there was no incentive bonus scheme and no night weighment of carts. ", "It has been urged on behalf of the appellants that the crushing speed of 32,000 maunds per 24 hours is not correctly arrived at for it does not take into account half hour's rest per shift which is permissible under s. 55(1) of the Factories Act, No. 63 of 1948. Thus, according to the appellants, crushing speed should be worked out on 22 1/2 hours per day and the crushing will then be less by 1/16th and will only come to 30,000 maunds per day. Reliance in this connection is placed on s. 55(2) of the Factories Act, which lays down that \" ...... may by written order and for the reasons specified therein, exempt any factory from the provisions of sub-section (1) so however that the total number of hours worked by a worker without an interval does not exceed six. It is therefore urged that the workmen were entitled to half an hour's rest per shift in any case because the shift was for eight hours. The respondent on the other hand relies on s. 64(2) (d) for the Factories Act and its case is that had made rules under that provision in connection with sugar factories, which apply to it. Section 64(2) (d) is in these terms:-- ", "\" may make rules in respect of adult workers in factories providing for the exemption, to such extent and subject to such conditions as may be prescribed-- ", "(d) of workers engaged in any work which for technical reasons must be carried on continuously from the provisions of sections 51 , 52 , 54 , 55 and 56 ; ", "We are of opinion that this provision in s. 64(2) (d) being a special provision will over-ride both sub-ss. (1) and (2) of s. 55 , for it gives power to by making rules to exempt certain types of factories from the application of the whole of s. 55 , subject to such conditions and to such extent as the rules may provide. It appears that rules were framed in this behalf by in 1950 by which sugar factories were exempted from the application of s. 55 for purposes of handling and crushing of cane, among others. subject to the condition that the workers concerned shall be allowed to take light refreshment or meals at the place of their employment, or in a room specially reserved for the purposes or in a canteen provided in the factory, once during any period exceeding four hours. Thus cane crushing operations are exempt from s. 55(1) and s. 55(2) subject to the condition mentioned above. We may also refer to s. 64(5) which lays down that the rules made under this section shall remain in force for not more than three years. The rules to which reference has been made are of 1950; but there is nothing to show that these rules were not continued after every interval of three years and the position that the exemption applies to sugar factories even now as provided in these rules was not disputed. We shall therefore proceed on the basis that the exemption applied to sugar factories in Bihar. In view of this, the workmen cannot claim half an hour's rest per shift as urged on their behalf, though sometime must be allowed for refreshment or light meals as provided in the provision granting exemption. This means that a few minutes would be allowed to each individual in turn in each shift for light refreshment or meals in such a way that the work does not stop. If we make a total allowance of half an hour or so in this connection the average crushing speed would be reduced to slightly over 31,000 maunds per day and that is all the adjustment that the appellants can claim in view of the exemption under s. 64(2) (d). ", "Let us now turn to the actual position between November 27 and December 15, 1960. This will appear from chart Ex. W-7. ", "603 ", "That chart shows a crushing speed of 29,859 maunds per day from November 10 to 26, when, according to the respondent, there was only mild go-slow. We are however concerned with the period from November 27 to December 15, 1960 and the crushing speed for 24 hours during that period was 27,830. Now if we take the average crushing speed as 32,000 maunds per 24 hours without any adjustment or even a little over 31,000 maunds with adjustment following upon the rule relating to exemption from s. 55 , there is certainly a significant drop in average crushing speed during this period. Further we find that there is a significant drop even as compared to the period between November 10 to 26, 1960, inasmuch as the drop was over 2,000 maunds per day. Therefore it cannot be said that the tribunal was incorrect in its conclusion that there had been go-slow during the period from November 27 to December 15. It may be added that when comparisons are made on the basis of crushing speed and labour force is more or less constant, as is the ease here, other minor factors to which our attention was drawn on behalf of the appellants during argument do not matter at all. Even if we take the figure of 30,000 maunds as the crushing speed which the respondent had put forward at the time of the discussion on the incentive bonus scheme, we find that though there was not much difference during the period from November 10 to November 26, there was a significant drop of over 2,000 maunds per day from November 27 to December 15. Looking at the matter in this broad way--and that is all that we are prepared to do, for we are examining a finding of fact of the tribunal--we cannot say that its conclusion that there was go-slow between November 27 and December 15 is not justified. ", "Finally, it is urged that notice was given to the workmen on December 15 and they were discharged on December 17, 1960 without giving them a change to give the necessary production as desired in the notice. But as we have already indicated, the charge in the notice of December 15 was that the workmen had been going slow from November 27 and they were asked to give an undertaking to improve and the respondent was apparently willing to overlook the earlier lapse. Even assuming that the demand of an undertaking was unjustified, it does appear that the attitude of the workmen was that they would do no better; and in those circumstances they were discharged on December 17, 1960 on the basis of misconduct consisting of go-slow between November 27 and December 16, 1960. That misconduct has been held proved by the tribunal and in our opinion that decision of the tribunal cannot be said to be wrong. In the circumstances the tribunal was justified in coming to the conclusion that the discharge was fully justified In this view of the matter, the appeal fails and is hereby dismissed. In the circumstances we order parties to bear their own costs. ", "Appeal dismissed. ", "604"], "relevant_candidates": ["0000544869", "0001484981"]} {"id": "0000971033", "text": ["PETITIONER: Vs. RESPONDENT: THE THIRD INCOME-TAX OFFICER, MADURAI DATE OF JUDGMENT28/07/1975 BENCH: , Y.V. BENCH: , Y.V. SARKARIA, RANJIT SINGH GUPTA, A.C. CITATION: 1975 AIR 2016 1976 SCR (1) 136 1975 SCC (2) 454 CITATOR INFO : D 1981 SC1562 (17) ACT: Constitution of India- Article 246(1)-7th Schedule List 1 Entry 82- Income-Tax ,Act 1961-Sec. 2(8), 4 & 81(i)(a)- Finance Act 1963-Sec. 2(1) (a). 2(8), 3, Part 1, First Schedule-Whether tax can exceed taxable income- Finance Act - Nature and scope of-Whether can impose fresh charge- Harshness of a taxing statute if a ground for challenge- Business income of a cooperative society doing banking- Whether additional surcharge a tax-Whether additional surcharge Can be levied on income exempted from payment of tax. HEADNOTE: The appellant is engaged in the business of banking According to section 8 ] (i) (a) of the Income ' Tax Act , 1961, engaged in the business of banking is not liable to pay income tax on its business income. The Finance Act , 1963, however, by section 2(i) (a), 2(8), 3, paragraph A(ii) of Part I of the First Schedule and clause of that portion of Part I called surcharge on Income Tax provides for levy of additional surcharge for the purposes of the calculated on the amount of the residual income at the rates mentioned therein. The total income of the appellant for the assessment year 1963-64 was Rs. 10,00,098. Out of this Rs. 9,48,335 was its business income. 'The tax amounting to Rs. 23,845 was charged on Rs. 51,763 Applying the Finance Act of 1963, the residual income of the appellant was computed at Rs. 5.39,386 and a surcharge thereon was levied of Rs. 52,828 Thus, the total tax imposed on the appellant came to Rs. 76,674. The assessment order passed by the Income Tax officer levying the tax as aforesaid was challenged by the appellant in by a Writ Petition. The main grievance of the appellant before was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674 was imposed on it. The relevant provisions of the Finance Act were challenged as invalid on the ground that(i) they imposed additional surcharge on income which was exempt from tax under the provisions of the Income Tax Act and that (ii) the additional surcharge was intended as additional levy on the income tax and had no independent existence apart from it rejected these contentions. On an appeal by certificate, dismissing the appeal, ^ HELD : 1. It is indisputable that the appellant is not required to pay income tax on the banking income. In view of section 81 . It is also not liable to pay surcharge on its business income in view of section 99(1)(v) . [139C] 2. The, grievance of the appellant that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income Tax Act or the Finance Act . Harshness of a taxing statute, apart from a possible challenge to it under Art. 13 of the Constitution cannot be an invalidating circumstance. But, the grievance-on this score is misconceived. It assumes what has to be examined that no part of the income exempted from Income Tax and Super Tax under the Income Tax Act can be brought to tax by a Finance Act , [140G-H] 3. The concession of the counsel for the appellant giving up challenge to the power. of the to impose a new charge by Finance Act was Properly made. Under Art. 246(11) of the Constitution, has the exclusive power to make laws with respect ''o any of the matters in List of the Seventh Schedule. Entry 82 in List I relates to tax on income other than agricultural income. The Income Tax Act , 1961 and the annual Finance Act s are enacted by the in exercise of the powers conferred by Art 246(1) read with entry 82 of List I. Once the has the legislative competence to enact a law with respect to certain subject matter, the limits of 136 that competence cannot be judged further by the form or manner in which that power is exercised. Exigencies of the Financial year determine the scope and nature of the provisions of the Finance Act . The primary purpose of the Finance Act is to describe the rates at with the Income Tax will be charged under the Income Tax Act but that does not mean that new and distinct tax cannot be charged under Finance Act . Therefore, what is not income under the Income Tax Act can be made income by the Finance Act . An exemption granted by the Income Tax A, t can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge. [141D-E; G-H] 4. The contention of the appellant that surcharges are nothing but income tax and, therefore, expression income tax occurring in Sec. 4 and 81 of the Act includes surcharges and AS such exempted cannot be accepted. The case of the distinguished. There the essential point for determination was whether surcharge is additional mode or rate for charging income tax. The Court held there that it was so. The question before us is whether even if the surcharge is an additional mode or rate for charging income to the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income tax under the Income Tax, Act, 1961. The residual income as defined by the 1963 Finance Act is not the same as the business income of which is exempted under see. 81. The additional surcharge is a distinct charge not dependent for its leviability on the assessee's liability to pay income tax or Super Tax. The decision of Allahabad High Court in over-ruled. [143D-E] 5. The additional surcharge though levied by the Finance Act 1963 independently of the Income Tax Act is but a mode of levying tax on a portion of the assessee's income computed in accordance with the definition in section 2(8) of the Finance Act 1963. [147F] ARGUMENTS For The Appellant 1. Under section 81 read with section 4 of the Income- tax Act, 1961, income tax is not payable by the appellant. , in respect of its income from banking business. Similarly super-tax is not payable under section 99(i)(v) read with section 4 . 2. The primary purpose of the annual Finance Act s as envisaged by section 4 of the Income-tax Act is to prescribe the rates of income-tax on the total income of an assessee, and this function as contemplated by section 4 is to be \"subject to the other provisions of this Act\", namely, the Income-tax Act , 1961, which would include, inter alia, section 81 . 3. The history of Indian income-tax shows that surcharges by way of increase to the amount of income-tax, which are added to the basic amount, in view of article 271 of the Constitution of India, are nothing other than income- tax and a part of income-tax alone. Therefore the expression 'income-tax' in section 4 and 81 of the Income-tax Act, 1961, and section and Schedule I, Part 1 of the Finance Act , 1953, includes surcharges. 4. Section 2 of the Finance Act, 1963, and Schedule I, Part I, Paragraph A all clearly contemplate that the surcharge. special surcharge and additional surcharge are all only by way of increase of the amount of income-tax and not only partake of the character of income-tax but are actually a part of income tax. They are merely rates of income-tax. The main part of section 2(1) (a) says that \"Income-tax shall be charged at the rates specified in Part I of the First Schedule\" and clause (ii) of that section provides in the ease referred to therein that income-tax \"shall further be increased by an additional surcharge for the purpose of the calculated in the manner provided in the First Schedule. Similarly in Paragraph A of Part I of the First Schedule the heading to the provisions prescribing rates of surcharge is \"surcharges on income-tax\" in the plural. The main part in the heading also provides that \"the amount of 137 income-tax... shall be increased by the aggregate of the surcharges calculated as under \" Clause (c) thereafter provides for the additional surcharge for the purpose of the . Paragraph A also therefore clearly indicates that the three surcharges are only of the same nature and that all the three surcharges are only by way of increase of the amount of income-tax; in other words part of the income-tax. Is either section 2 nor paragraph A of Part I of the First Schedule can even remotely be said to contemplate any separate levy of additional surcharge other than income-tax. 5. From the assessment order it is seen that the following have been charged only on the real taxable income of the appellant namely Rs. 51,763: (i) income tax (ii) surcharge on income tax (iii) special surcharge on income- tax (iv) super-tax and (v) surcharge on super-tax. These items have not been charged on the total income of Rs. 10,00,098, because income-tax is not payable on the balance of the total income under section 81 . The Income-tax officer has sought to impose only additional surcharge under clause (c) in respect to the total income of Rs. 10,00,098. In view of section 81 no additional surcharge is payable on the total income of Rs. 10,00,098. It is payable only on the taxable income of Rs. 51,763. 6. Section 2 read with Paragraph A Part I of Schedule I to the Finance Act merely purports to lay down the method of computation where income-tax is payable. It does not either dire thy or by implication make any amendment or modification in section 81 . 7. Section 3 of the Finance Act ]963 also applies to a stage of computation only and in regard to relief, rebate etc. It does not impose any liability or any tax. It operates only where additional surcharge is payable and not other wise, and where relief, rebate etc. is to be given from the tax payable by the assessee, e.g. deduction of tax based on life insurance premia provident fund contribution. donations to charitable institution etc. Section 81 does not provide for any such relief or rebate. 8. Section 2(8) of the Finance Act, 1963, defining \"residual income\" which requires deduction from the total income of income-tax, surcharge and special surcharge to ascertain residual income also does not have the effect of imposing any liability or any tax but merely provides for computation. In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied.\" \"In a case of reasonable doubt. the construction most beneficial to the subject is to be adopted.\" The court will be very slow in reading an implied amendment in a tax law because there is no intendment. 9. Income-tax is one tax, not several taxes on several heads or several items of income: For the Respondent 1. It is open to the to pass an Act relating to more than one topic or field of operation, covered by the Entries in List 1. It is not as if there must be as many Enactments as the topics which the enactment covers. 2. The legislature has a wide range of selection and freedom in appraisal not only in the subjects of taxation and the manner of taxation but also in the determination of the rate or rates applicable. If production were always to be taken into account there will have to be a settlement for every year and the tax will become a kind of income-tax. The burden of proving discrimination is always heavy and heavier still when a taxing statute is under attack. The burden is on the person complaining of discrimination. The burden is proving not possible 'inequality' but hostile 'unequal' treatment. This is more so when uniform taxes are levied. The State cannot be asked to demonstrate equality. 3. Income which is exempt from taxation is income which is assessable to tax and therefore liable to tax but tax is not imposed on account of the exemp- 138 tion. This exemption can by subsequent legislation be wholly or partially withdrawn both as regards items of income and levies imposed for the purpose of taxation. Thus where the Income-tax Act 1961 says that business income of a co- operative society will be exempt from income-tax it would be open to the by enactment of the Finance Act of 1963 to say that this exemption shall be partially withdrawn as regards residual income and this partial exemption will operate only for the purpose of income-tax but not surcharge on residual income. The net result of the partial withdrawn of the exemption would mean that though the business income of a co-operative society will be exempt from tax the residual income which is only a part of the exempted business income could be subjected to surcharge on income- tax only. 4. Income-tax and surcharge on income-tax are two different levies though the computation of the latter is based upon a percentage of the former. The to are inclusive for the purpose of imposing tax but they are not one levy only. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1795 of 1970. ", "From the Judgment and order dated the 15th October, 1968 of in Writ Petition No. 2252 of 1965. ", " and , for the appellant. and , for the respondent. The Judgment of the Court was delivered by CHANDRACHUD,J.-The appellant filed a writ petition in under Article 226 of the Constitution to challenge an assessment order dated August 22, 1963 made by the respondent, levying additional surcharge on its residual income. dismissed the writ petition by its judgment dated October IS, 1968 but it has granted to the appellant a certificate to file an appeal to this Court under Articles 133(a) and (c) of the Constitution. ", "The appellant is a co-operative society engaged in the business of banking. Its total income for the assessment year 1963-64 was computed by the respondent at Rs. 10,00,098. Out of this, Rs. 9,48,335 was its business income while Rs. 51,763 was its income from other sources. Since, under section 81(i)(a) of the Income-tax Act, 1961 a co- operative society engaged in the business of banking is not liable to pay income-tax on its business income the tax amounting to Rs. 23,845.47 was charged on Rs. 51,763 only though for the purposes of rate the income was taken at Rs. 9,48,335 in view of section 110 of the Act. Applying the Finance Act, XIII of 1963, the respondent computed the residual income of the appellant at Rs. 5,39,386 and levied on it an additional surcharge of Rs. 52,828.60. Thus the total tax levied on the appellant came to Rs. 23,845.47 plus Rs. 52,828.60 i.e., Rs. 76,674.07. ", "The main grievance of the appellant before was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674.07 was imposed on it. The relevant provisions of the Finance Act were accordingly said to be invalid as they could not subject to additional surcharge an income which was exempt from tax under the provisions of the Income-tax Act . The additional surcharge, it was contended, was intended as an additional levy on the income tax and had no independent existence apart from it. These contentions were rejected by and hence this appeal. ", " Section 81 of the Income-tax Act, 1961 was deleted by the Finance Act , XX of 1967, with effect from April 1, 1968 but its provisions were incorporated by the same Finance Act in section 80P . Section 81 (i)(a) read thus: ", "\"81. Income of co-operative societies.-Income-tax shall not be payable by a co-operative society- ", "(i) in respect of the profits and gains of business carried on by it, if it is- ", "(a) a society engaged in carrying on the business of banking or providing credit facilities to its members;\" ", "It is indisputable that by reason of this provision, the tanking income of the appellant amounting to Rs. 9,48,335 is exempt from income tax. It is equally clear that by reason of section 99(1)(v) of the Act of 1961, the appellant is not liable to pay supertax on its business income. That section provides that where the assessee is a co-operative society, super-tax shall not be payable by it on any income in respect whereof no income-tax is payable by it by virtue of the provisions of section 81 . ", "The dispute really centers round the provisions of Finance Act , VIII of 1963. The provisions of that Act which are relevant for our purpose are sections 2(1)(a) , 2(8) , 3 , Paragraph A(ii) of Part I of the First Schedule, and clause ", "(c) of that` portion of Part 1, called `'Surcharges on Income Tax.\" ", " Section 2(1)(a) of the Finance Act, 1963 provides that: ", "2. Income-tax and super-tax-(1) Subject to the provisions of sub-section (2), (3), (4) and (5), for the assessment year commencing on the 1st day of April, 1963,- ", "(a) income-tax shall be charged at the rates specified in Part I of the First Schedule and,- ", "(i) in the cases to which paragraphs A,C,C and E of that Part apply, shall be increased by a surcharge for purposes of the Union and, except in the cases to which the said paragraph applies a special surcharge, calculated in either case in the manner provided therein; and ", "(ii) in the cases to which paragraphs A and of the aforesaid Part apply, shall further be increased by an additional surcharge for purposes of the (hereinafter referred to as additional surcharge) calculated in the manner provided in the said Schedule;\" ", " Section 2 (8) provides that: ", "For the purposes of paragraphs A and of Part I of the First Schedule, the expression \"residual income\" means the amount of the total income as reduced by- ", "140 ", "(a) the amount of the capital gains, if any, included therein; and ", "(b) the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible under any provisions of the Income-tax Act or this Act.\" ", " Section 3 provides that: ", "\"Notwithstanding anything contained in the provisions of Chapter VII or Chapter VIII-A or section 110 of the Income tax Act or sub-section (5) of section 2 of this Act, in calculating any relief rebate or deduction in respect of income-tax payable on the total income of an assessee which includes any income on which no income-tax is payable or in respect of which a deduction of income-tax is admissible under any of the aforesaid provisions, no account shall be taken of the additional surcharge.\" ", "The First Schedule of the Finance Act, 1963 consists of three parts out of which we are only concerned with Part I. Part I which is called \"Income-tax and surcharges on income- tax\" consists of Paragraphs A, B, C, and out of which we are concerned with Paragraph A only. Clause (ii) of Paragraph A prescribes rate of income-tax for incomes accruing, inter alia, to \"association of persons\". Since a co-operative society is an association of persons, Paragraph A of Part I would apply to the case of the appellant for`the purposes of section 2(1)(a)(ii) of the Finance Act oil 1963, though not for the purpose of bringing its exempted business income to income-tax. ", "That portion of Part I, Paragraph A, called \"Surcharges on Income Tax\" provides: \"The amount of income-tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under\". Clause ", "(a) provides for a surcharge for the purposes of the at the rates mentioned in sub-clauses (i), (ii) and (iii). Clause (b) provides for the levy of a special surcharge. Clause (c) with which we are concerned provides for the levy of \"an additional surcharge for the purposes of the calculated on the amount of the residual income\" at the rates mentioned therein. ", "The grievance of the appellant, which appears to have been pressed before with some earnestness, that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income tax Act or the Finance Act . Harshness of a taxing statute, apart from a possible challenge to it under Article 13 of the Constitution, cannot be an invalidating circumstance. But the grievance on this score is basically misconceived. It assumes, what has to be examined, that no part of the income exempted from income- tax and super-tax under the Income-tax Act can be brought to tax by a Finance Act . The total income of the appellant was computed at Rs. 10,00,098. By reason of sections 81 (i) (a) and 99 (1) (v) of the Income-tax Act , 1961 the appellant enjoys an exemption from income tax and super-tax in respect of its business income which amounts to Rs. 9,48,335. The balance, viz. Rs. 51,763 which was the appellant's income from other sources was alone taxable under the Act of 1961 and a tax of Rs. 23,845.47 was imposed on that income; The Finance Act of 1963 subjects 'residual income' to certain charges and such in come was computed, admittedly correctly, at Rs. 5,39,386. An additional surcharge of Rs. 52,828.60 was levied on the residual income. Thus on the assumption that the Finance Act , validly-and on a true interpretation, imposes the additional surcharge on residual income, the tax imposed on the appellant is Rs. 23,845.47 plus Rs. 52,828.60. The total tax of Rs. 76,674.07 thus imposed is far less than the. appellant's total taxable income arrived at by the addition of its non-business income and the residual income. That leads to the inquiry first as regards the scope of a Finance Act and then as regards the interpretation of the Finance Act of 1963. ", "Learned counsel for the appellant, during the course of his arguments, gave up the challenge to the power of the to impose a new charge by a Finance Act . This concession was properly made. By Article 246(1) of the Constitution, has the exclusive power to make laws with respect to any of the matters in List I of the Seventh Schedule. Entry 82 in List I relates to \"taxes on income other than agricultural income\". The Income-tax Act , 1961 and the annual Finance Act s are enacted by the in exercise of the power conferred by Article 246(1) read with Entry 82 of List I. Once the has the legislative competence to enact a law with respect to a certain subject-matter, the limits of that competence cannot be judged further by the form or manner in which that power is exercised. Accordingly, though it would be unconventional for the to amend a taxing statute by incorporating the amending provision in an Act of a different pith and substance, such a course would not be un- constitutional. ", "Much more so can the introduce a charging provision in a Finance Act . True, as said in (1), that the Income-tax Act is a permanent Act v. while the Finance Act s are passed every year and their primary purpose is to prescribe the rates at which the income-tax will be charged under the Income tax act. But that does not mean that a new and distinct charge cannot be introduced under the Finance Act . Exigencies of the Financial year determine the scope and nature of its provisions. If the has the legislative competence to introduce a new charge of tax, it may exercise that power either by incorporating that charge in the Income-tax Act or by introducing it in the Finance Act or for the matter of that in any other Statute. The alternative in this regard is generally determined by the consideration whether the new charge is intended to be more or less of a permanent nature or whether its introduction is dictated by the financial exigencies of the particular year. Therefore, what is not 'income' under the Income-tax Act can be made 'income' by a Finance Act , an exemption granted by the Income-tax Act can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge. Subject to constitutional limitations, additional tax revenue may be collected either by enhance the rate or by the levy of a fresh charge. The , through the medium of a Finance Act , may as much do the one as the other. (1), which was affirmed by this Court in 36 I.T.R. 65. delivering the judgment of observed that the Finance Act s though annual Acts are not necessarily temporary Act for they may and often do contain provisions of a general character which are of a permanent operation. ", " .(2) an assessee challenged the scheme of Annuity Deposits of the ground that the has no competence to incorporate ill the Income tax Act a provision which was substantially one relating to borrowings by from a class of tax-payers. That scheme was introduced by Finance Act 5 of 1964 which incorporated Chapter XXII-A containing section 28-A to section 28-X in the Income tax Act, 1961. The challenge was repelled by this Court on the ground that if the parliament had the legislative competence to pass an Act for collecting Annuity Deposits from tax-payers, nothing contained in the Constitution disentitled it \"as a matter of legislative arrangement to incorporate the provisions relating to borrowing from tax-payers in the Income-tax Act or any other statute\". ", "This discussion became necessary in spite of the appellant's concession on the 's legislative competence because for a proper understanding of the provisions of the Finance Act 1963, it is essential to appreciate that a Finance Act may not only prescribe rates but also introduce a new charge. ", "We will now proceed to consider the provisions of the Finance Act , 1963 under which the respondent has levied additional surcharge on the appellant's residual income. The question for consideration is whether clause (c) of the portion \"Surcharges on Income Tax\" occurring in Paragraph A of Part I introduces a new charge in the shape of additional surcharge so that the said charge, can be levied even on a part of the appellant's income which is exempt from income- tax and super-tax under sections 81(i)(a) and 99(1)(v) of the Act of 1961. ", "The history of Indian income-tax, according to appellant's counsel, shows that surcharges by way of increase in the amount of income-tax are nothing but income- tax and therefore the expression \"income-tax\" occurring in sections 4 and 81 of the Act of 1961 and in section 2 and the First Schedule of the Finance Act, 1963 includes surcharges. To put it differently, the argument is that the exemption granted by section 81(i)(a) extends to surcharges also as a result whereof a co-operative society engaged in the business of banking is neither liable to pay income-tax nor any of the surcharges on its business income. ", "143 ", " (1) on which the appellant relies, this Court has traced the history of the concept of 'surcharge' in tax laws of our country. After considering the report of , the provisions of the Government of India Act, 1935, the provisions of Articles 269, 270 and 271 of the Constitution and the various Finance Act s, this Court held, differing from , that the word \"income- tax\" in section 2(2) of the Finance Act, 1964 includes surcharges and the additional surcharge. ", "This case does not touch the point before us. In that case, the assessee's income for the accounting year ending March 30, 1964 consisted mainly of his salary. Section 2(2)(a) of the Finance Act, 1964 did not by itself refer to any surcharge but it provided that in making the assessment for the assessment year commencing on April 1, 1964 the \"income-tax\" payable by the assessee on his salary-income shall be an amount bearing to the total amount of \"income- tax\" payable according to the rates applicable under the operation of the Finance Act , 1963 on his total income, the same proportion as the salary income bears t the total income. The question which arose for consideration was under the total income. The question which arose for consideration was whether the words \"income-tax payable according to the rates applicable under the operation of the Finance Act , 1963\" included surcharges which were leviable under the Act of 1963. The question was answered by this Court in the affirmative. As the judgment shows, \"the essential point for determination\" was whether surcharge is an additional mode or rate for charging income tax\" (p. 351). The Court held that it was. The question before us is whether, even if the surcharger is but an additional mode or rate for charging income-tax, the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income-tax under the Income-tax Act , 1961 In case the Court declined to express any opinion on the distinction made by that surcharges are levied under the Finance Act while income tax was levied under the Income-tax Act (p. 351). In the instant case it is not disputed by the-revenue that a surcharge partakes of the essential characteristics of income-tax and is an increase in income-tax. What we have to determine is whether the Act of 1963 provides for the levy of additional surcharge. ", "Granting that the word \"income-tax\" includes surcharges, it may be arguable that the exemption from the payment of income-tax under section 81 (i) (a) of the 1961 Act would extend to surcharges. But the matter does not rest with what section 81 (i)(a) says. Even if that section were to grant an express exemption from surcharges on business income the could take away that exemption or curtail the benefit available under it by making an appropriate provision in the Finance Act . If while legislating on a matter within its competence the can grant an exemption, it is surely competent to it to withdraw that exemption in exercise of the self-same power. ", " The Finance Act , 1963, like its annual counterparts, contains provisions not only prescribing rates of taxation but making extensive and important modifications in the Income-tax Act itself. By sections 4 to 144 20 of the Act of 1963, various provisions of the income-tax Act have been amended. By these amendments, some of which are given retrospective effect, old provisions are deleted, new ones are added and indeed new concepts of taxation altogether are introduced. Such innovations fall within the legitimate scope of Finance Act s. Section 11 (14) of the Indian Finance Act , 1946 made in the amount of excess profits tax repaid under section 28 of the U.K. Finance Act, 1941, \"income\" for the purpose of the Indian Income tax Act and further provided that \"income shall be treated for purposes of assessment to income tax and super-tax as the income of the previous year. It was held by this Court in (1) that section 11(14) charged the amount with a liability to tax by its own force. It was further held that the particular provision, framed as it was, applied to subsequent assessment years just as it applied to the assessment year 1946-47. ", "Having seen the nature and scope of Finance Act s, the specific question which we have to consider is whether, as contended by the appellant, section 2 read with Paragraph A, Part I of the First schedule of the Finance Act , 1963 merely lays down a method of computation in cases where income-tax is in fact payable or whether, as contended by the revenue, the Finance Act provides for the levy of a new and independent charge. According to the appellant, these provisions of the Finance Act do not, directly or indirectly, bring about any amendment to section 81(i)(a) of the Income-tax Act but merely prescribe that in cases where the income-tax is payable, \"The amount of income tax.... shall be increased by the aggregate of the surcharges\". The heading \"Surcharges on income tax\" under which provision is made in the Finance Act for the calculation of a surcharge, a special surcharge and an additional surcharge is also said to bear out the contention that the levy of additional surcharge on the residual income cannot be disassociated from the main charge of income-tax. ", "We are unable to accept this contention Article 269(1) of the Constitution provides that the duties and taxes mentioned therein shall be levied and collected by but shall be assigned to the States in the manner provided in clause (2). Article 270(1) provides that Taxes on income other than agricultural income shall be levied and collected by and distributed between the and the States in the manner provided in clause (2). By Article 271 , notwithstanding anything in Articles 269 and 270, may increase any of the duties or taxes referred to in those Articles by a surcharge for purposes of the . Surcharges leviable under section 2(1) of the Finance Act. 1963 are relatable to Article 271 of the Constitution. ", " Section 2(1)(a)(ii) of that Act provides, in so far as relevant, that for the assessment year commencing on April 1, 1963 income-tax shall be charged at the rates specified in Part I of First Schedule and in cases to which Paragraph A of Part I applies, the income-tax shall further be increased by an additional surcharge for purposes of the calculated in the manner provided in the First Schedule. `Clause (c) of Paragraph prescribes the manner in which the additional surcharge is to be calculated. It provides that additional surcharge for purposes of the shall be calculated \"on the amount of the residual income'. at the rates mentioned in that clause. Thus both the purpose and concept of the additional surcharge are different from those of income-tax. The additional surcharge is leviable exclusively for purposes of the so that the entire proceeds of such surcharge may under Article 271 of the Constitution, from part of . taxes and duties mentioned in Article 269(1 ), though levied and collected by the , have to be assigned to the States in the manner provided in clause (2) of that Article. Then again, the additional surcharge levied for purposes of the is to be calculated not on total income like the income-tax but it is to be calculated on the residual income. Section 2(8) of the Act of 1963 defines residual income as total income reduced by (a) capital gains, if any, included in that total income and (b) the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible. In order that the exemption granted to co-operative banks by section 81 (i) (a) may not lose its meaning and content, section 2(8) of the Finance Act introduces the concept of residual income on which alone the additional surcharge is payable. The residual income is not the same as the business income of a co-operative bank, which is exempt under section 81(i)(a) from income tax. For ascertaining the residual income the total income is reduced by the amount of capital gains and further by the amount of tax (other than additional surcharge) which would have been charged on such reduced total income on the assumption that the whole of it was liable to be brought to tax. ", "Thus in the instant case the additional surcharge is not levied on the appellant's business income of Rs. 9,48,335 which is exempt from income-tax and super-tax. It is levied on the residual] income of Rs. 5,39,386 which is arrived at after deducting Gross taxes (exclusive of additional surcharge) amounting to Rs. 4,60,712 from the assessee's gross income of Rs. 10,00,098. By section 3 of the Finance Act of 1963 no account can be taken of the additional surcharge in calculating any relief, rebate or deduction in respect of income-tax payable on the total income of an assessee which includes any income on which no income-tax is payable or in respect of which a deduction of income-tax is admissible. Section 3 , by its terms, has precedence over anything contained in Chapter VII or Chapter VIII A or in section 110 of the Income-tax Act or section 2(5) of the Finance Act itself. Additional surcharge is treated in this way as falling in a separate category. ", "Thus, additional surcharge is a district charge. not dependent for its leviability on the assessee's liability to pay income-tax or super-tax. Such a qualification cannot be read into section 2(1)(a)(ii) of the Act of 1963 as argued by the appellant. That section uses the language that \"income-tax....shall further be increased by an additional sur- ", "146 ", "charge\", not for making the assessability to surcharge dependent upon Assessability to income tax but for the simple reason that if an assessee`s total income includes income on which no tax is payable, tax has all the same to be computed for purposes of rate Section 110 of the Income- tax Act, 1961 provides that where there is included in the total income of an assessee any income on which no income- tax is payable, the assessee shall be entitled to deduction, from the amount of income tax with which he is chargeable on his total income, of an amount equal to the income-tax calculated at the average rate of income tax on the amount on which no income-tax is payable. The income-tax computed at a certain rate is by section 2(1)(a)(ii) to be further increased by an additional surcharge for purposes of the Union. This becomes clearer still from the language of Paragraph A, under the heading ..Surcharges on Income Tax\". It says: \"The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of the surcharges,\". If the intention was to limit the liability to pay additional surcharge to income which can be brought to income tax, appropriate language could have been used to convey that simple sense. ", "The weakness of the appellant's contention becomes manifest when it is realised that were the contention right, the appellant would not be liable to pay additional surcharge even on that portion of its non-business income which is contained in the residual income. By the definition in section 2(8) of the Act of 1963, residual income means the total income as reduced and therefore, the non business income which is chargeable to income-tax must form a component of the residual income. Concededly, the appellant is liable to pay additional surcharge on its non-business income. This is so not because additional surcharge is payable by law on non-business income but because it is payable on residual income and residual income, by definition, includes non business income as reduced. In fact, it consists of the amount of total income as reduced by the amounts mentioned in clauses (a) and (b) of section 2(8) . ", "Relying on (1), (2), and (3), the appellant's counsel urged that income-tax is a single levy, that it is one tax and not so many taxes separately levied on several heads of income. This partly is the same argument in a different disguise that an assessee who is not liable to pay income-tax cannot be made liable to pay additional surcharge under the Finance Act , 1963. We have rejected that contention. Partly, the argument is designed to establish correlation with section 146 of the income tax Act, 1961 by which, when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, office has to serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. This provision presents no difficulty for, if an assessee is liable to pay additional surcharge but no income-tax or super tax, the notice of demand will mention the particular amount payable as tax due. The appellant being liable to pay tax on its non- business income and additional surcharge on its residual income, the demand notice will call for payment of the total amount due from the appellant by way of tax. ", "The interpretation put by us on the Finance Act , 1963 does no violence to section 4 of the Income-tax Act, 1961 under which income-tax at the rates prescribed by the Finance Act is to be charged \"in accordance with, and subject to the provisions of.\" the Income-tax Act . The Income-tax Act exempts the assessee's business income from income tax and super-tax. The Finance Act brings to tax its residual income. ", "The decision of in .(1) is directly in favour of the appellant and naturally, learned counsel for the appellant relies on it very strongly. But that case, in our opinion, is incorrectly decided. The learned Judges were in error in holding that section 2 of the Finance Act, 1963 does not provide for the levy of a tax other than income-tax\" and that therefore additional surcharge is not payable to the extent of the income which is exempt under section 81 of the Income-tax Act. One of the difficulties which the learned Judges felt in accepting the revenue's contention was that if \"the additional surcharge mentioned in the Finance Act of 1963 was not partake of the nature of income-tax it will not be possible to demand and realise it under the provisions of the income-tax Act, and the notice of demand and recovery proceedings would be vitiated on that account\". The very assumption of this observation is falacious because additional surcharge indubitably partakes of the nature and essential characteristics of income-tax. It is a tax on residual income and by reason of the definition contained in section 2(8) of the Act of 1963, \"residual income\" would include non-business income which under the Income-tax Act is charge able to income-tax. Thus, the additional surcharge, though levied by the Finance Act , 1963 independently of the Income-tax Act , is but a mode of levying tax on a portion of the assessee's income computed in accordance with the definition in section 2(8) of the Act of 1963. Therefore, the notice of demand under section 156 of the Income-tax Act can lawfully call for the payment of amount due from an assessee by way of additional surcharge. ", "For these reasons, we confirm the judgment of but in the circumstances there will be no order as to costs. ", "P.H.P. Appeal dismissed."], "relevant_candidates": ["0000530481", "0000668391", "0000804763", "0000856827", "0001162775", "0001436056", "0001819721", "0001901075"]} {"id": "0000971059", "text": ["JUDGMENT , J. ", "During the pendency of several petitions for winding up of the respective companies on the ground that they are unable to pay its debts (in none of which any receiver or official liquidator is appointed), it has been brought to the notice of the court that a reference under Chapter III of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as \"the Act\"), has been registered in respect of each of the respondent companies under section 16(1) of the Act by (\"the BIFR\", in short), and the matters were adjourned on more than one occasions awaiting further steps, to be taken in view of section 22 of the Act. Counsel for the petitioners in some of the cases contended that the mere registrations of a reference under section 16(1) will not attract the applicability of 22 of the Act Counsel for the petitioners in some of the cases contended that the mere registration of a reference under section 16(1) will not attract the applicability of section 22 of the Act and and, therefor, the company petitions may be proceeded with. ", "As a common question as to the effect of section 22 of the Act is involved, I have heard several counsel for the petitioners and also counsel for the respondent companies who have appeared. They have also addressed arguments on the action to be taken by the court in the event section 22 is held applicable. ", "The points that arise for consideration are : ", "(a) Whether the mere proof of a reference being registered by the under section 16(1) of the Act attracts the provisions of section 22 ? ", "(b) If section 22 is held applicable, its effect on these company petitions ? ", "The Act has received the assent of the President on January 8, 1986, and some of its Provisions were enforced from January 12, 1987, and others from May 15, 1987. Its section 2 contains a declaration and it is for giving effect to the towards securing the directive principles specified in article 39(b) and (c) of the Constitution. According to the Objects and Reasons : ", "\"......A need has, therefor, been felt to enact in public interest a legislation to provide for timely detection of sickness in industrial companies and for expeditious determination by a body of experts of the preventive, ameliorative, remedial and other measures that would need to be adopted with respect to such companies and for enforcement of the measures considered appropriate with utmost practicable despatch.\" ", "Section 32 gives overriding to the Act on other laws as mentioned in it. Section 26 bars the jurisdiction of civil courts in respect of any matter which is empowered to decide under the Act, Section 31 saves certain proceedings mentioned in it. Section 36 confers power on to make rules and in exercise of the said power, the ' for industrial and Financial Reconstruction (Secretary's powers and Duties) Rules, 1987, have been made. Section 27 of the Act empowers the to delegate certain statutory functions. The for Industrial and Financial Reconstruction Regulations, 1987, have been made, according to which some functions are assigned to the Secretary and Registrar. Section 3(o) of the Act defines a \"sick industrial company\".Chapter III which comprises sections 15 to 22 provides for references of cases to be dealt with under the Act, inquiry and the measures that may be taken by in respect of sick industrial companies. Section 15(1) casts an obligation on the management of an industrial company which has become a sick industrial undertaking to make a reference to the for appropriate action. Section 15(2) enables financial institutions, etc., make a similar reference. probably where the management of the company has itself not made it. Under section 16(1) of the Act, the may make such inquiry as it deems fit for determining whether any industrial company has become a sick industrial company. As mentioned in the said provision. such an inquiry may be taken up either on receipt of a reference under section 15 or upon information received with respect to such company or upon its own knowledge. Sections 17 to 21 provide for various measures the may adopt to revive, rehabilitate, reconstruct or take steps for winding up a sick industrial company in the circumstances mentioned in the said provisions. Section 22(1) provides for suspension of certain legal proceedings. Section 22(2) provides for some fetters on the rights of the shareholders of the sick company. Sub-section (3) enables the to pass certain orders which may suspend the operation of the contracts, etc., entered into by the company . Sub-section (4) gives overriding effect to the passed by the under subsection (3), and sub-section (5) provides for suspension of period of limitation for enforcement of any right or privilege during which its remedy for enforcement was suspended under this section. It is useful to extract some relevant statutory provisions, viz., \"16. Inquiry into working of sick industrial companies. - (1) The may make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company - ", "(a) upon receipt of a reference with respect with to such company under section 15; or ", "(b) upon information received with respect to such company or upon its own knowledge as to the financial condition of the company. ", "(2) The board may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry under sub-section (1), require by order any operating agency to inquire into and make a report with respect to such matters as may be specified in the order. ", "(3) The or, as the case may be, the operating agency shall complete its inquiry as expeditiously as possible and endeavour shall be made to complete the inquiry within days from the commencement of the inquiry. ", "(4) Where the Board deems it fit to make an inquiry or to cause an inquiry or to cause an inquiry to be made into any industrial company under sub-section (1) or, as the case may be, under sub-section (2), it shall appoint one of more persons to be a special director or special directors of the company for safeguarding the financial and other interests of the company....\" ", "\"22. Suspension of legal proceedings, contracts, etc., - (1) Where, in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company pending, then, notwithstanding anything contained in the companies Act, 1956 or any other law or the memorandum and articles of association of the industrial company or any other instruments having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for the execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in receiver in respect there of shall lie or be proceeded with further, except with the consent of the or, as the case may be, the appellate authority.\" ", "\"31. Saving of pending proceedings. - Where a receiver or an official liquidator has been appointed in any proceeding pending immediately before the commencement of this Act, in any for winding up of an industrial company, such proceeding shall not abate but continue in the that .\" ", "Regulation 19 of the for Industrial and Financial Reconstruction Regulations, 1987, empowers the Secretary or to take necessary steps under section 16(1) where a reference is received by the under section 15(1) or 15(2). In case any of these officers decline to register the reference, the final decision is of the Chairman on appeal. However, if there is a controversy as to whether the industrial company has become sick within the meaning of section 3(o). the may conduct an inquiry on that aspect keeping in view the provisions of other subsections of section 16. The consists of a chairman and members who are persons of ability, integrity and experience in these fields. The main objects of an inquiry under section 16 is to determine whether the provisions of section 3(o) apply and, therefore, it is a sick company with a view to take measures under section 16 is to determine whether the provisions of section 3(o) apply and, therefore, it is a sick company with a view to take measures under sections 17 to 20. ", "Point (a) : The commencement of an inquiry under section 16(1)(a) will be either consequent on a reference made by the sick industrial company itself or a financial institution named in section 15(2). In a reference under section 15(1), the company does not dispute that it is sick, and in a reference under section 15(2), the necessary material is furnished by the financial institution institution about its being a sick company. The question whether an industrial company is sick company or not has to be determined with reference to the criteria laid down in the definition under section 3(o) which is to be generally on the basis of documents available with the Register of companies, financial institutions or the company itself. Apparently, in a reference under section 15(1) and (2), there is no dispute about the applicability of section 3(o) and, therefore, the secretary or the Registrar has been given the authority to take action for registration under section 16(1)(a). In cases of refusal to register, probably due to some formal or technical defect, an appeal against it will be decided by the chairman. However, in cases where the company itself disputes the applicability of section 3(o) to it and , on the basis of information, has reason to believe that it is applicable, an inquiry into that aspect become necessary as contemplated by section 16(1)(b) and certain provisions to help a speedy. effective and fair inquiry have been made in the other sub-sections of sections 16. after the inquiry, if it is found that section 3(o) applies, the has to take one of the alternative measures contemplated by sections 17 to 20. ", ", learned counsel appearing for one of the petitioners contended that the mere registration of a reference under section 16(1) will not make section 22 applicable or be a ground for stopping the winding up proceedings in this court. According to him, the action of the Secretary in registering a reference is a ministerial act and it does not indicate that there has been an inquiry or any inquires pending before the . It is contended that, unless an inquiry contemplated by any the sub-sections (2) to (4) has commenced, section 22 does not become applicable. He has fairly started that there is only one reported decision in ., AIR 1988 All 178; 67 Comp Cas 412 (All), which is, prima facie, against him, according to him, has not directly dealt with this question. ", "In view of the various provisions noticed above, the inquiry contemplated by section 16 will commence either on the receipt of a reference under section 15(1) or (2) or, on the basis of any other information received by .These two situations are reflect in section 16(1)(a) and 16(b). In the case of references,the secretary is empowered to hold a preliminary inquiry and register it and, thereafter, the Board will make such inquiry as it considers necessary in with the alternative measures to be adopted under sections 17 to 20. ", "Where there is no reference and the chooses to commence an inquiry, naturally there will be a contest by the company itself and in such cases, the will conduct an inquiry keeping in view the provisions of the other sub-section 16. If the comes to the conclusion that section 3(o) applies to the company in respect of which the inquiry is being held, it will then consider one of the alternative measures under sections 17 to 20. According to the scheme of the Act, after an inquiry under section 16 has commenced and it is determined that it is a sick company within the meaning of section 3(o), the proceeding will terminate only after one of the alternative measures under sections 17 to 20 are taken, In several of the cases, large amounts (the liability for which is not disputed by the respective companies) have not been paid by the companies and the respective petitioner are suffering hardship, Probably, the petitioner or other creditor can intervene at the stage of inquiry before determination of the question of applicability of section 3(o) if they dispute it and have material to show that the industrial sickness is a device to defeat the claims and pray that some transactions of the company have to be invalidated. But this is a matter which can be examined and decided only by the . In view of the scheme of the Act, the jurisdiction of the court under the Companies Act is excluded by implication. The jurisdiction of the civil court is, however, excluded by section 26 . Therefore, the registration of a referenced by the for Industrial and Financial Reconstruction (may be by the Secretary under the powers conferred on him) is, prima facie, proof that the inquiry before the is pending and the has to take further steps for taking one of the alternative measures under section 17 to 20 . Once it is shown that a reference is registered under the Act. Section 22 becomes applicable and this is how I would answer point No. (a). ", "Point No. (b) : The next point for consideration is the effect of section 22 on these company petitions for winding up. It was contended by several counsel for the petitioners that the matters should be adjourned from time to time awaiting the further progress before . It is contended that this is necessary as the petitioners were not parties before and are not like to lose the advantage of taking benefits of the extension of the period of limitation for enforcement of some of their rights in view of sections 441 to 458A of the Companies Act, etc. Section 22(1) affects only a limited class actions like winding up petitions. After it is determined that section 3(o) applies to a company, broadly, three alternatives are possible under sections 17 to 20 , viz., (a) measures to revive a company where its net worth can be increased; (b) framing a scheme; and (c) taking steps for winding up. The is given wide powers and the petitioners can be certainly approach the for relief during this stage. At the same time, the hardship caused to the petitioners when the companies have become sick is apparent. Till the passes an order under section 22(3) , there is no restraint against the companies in alienating their properties and, probably, the petitioners may be able to move the , if considered necessary. The language of section 22(1) and that of section 31 indicates that such winding up proceeding shall not be proceeded with further. The question whether they stand abated or not was not canvassed and I do not consider it appropriate to go into it a this stage in view of the order which I propose to pass. Apart form the difference in language of section 22(1) and section 31 , it is also open to the petitioners to seek and get consent of the to continue any winding up petitions. The implication of the provisions of this new legislation pay require further examination. I, therefore, consider it appropriate to pass the following order : ", "(a) The management of respondent (i) shall, once in every six months, viz, on first January and first July of every calendar year, inform the respective petitioners and their counsel at the address shown in the company petition or to any other changed address which may be intimated, the progress of the case before by registered post; (ii) shall not alienate the assets without leave of for a period of six months; ", "(b) The winding up petitions are closed with liberty to the petitioners to make an application for reviving them in the event it becomes permissible by virtue of any subsequent of . ", "(5) The company petitions are, accordingly, closed. No orders as to costs."], "relevant_candidates": ["0001737795"]} {"id": "0000985625", "text": [", J. ", "1. These appeals arise from an order of , J., dismissing two connected petitions, one to quash a penalty of Rs. 1,000 in lieu of confiscation of goods under Section 42 (3) (a) of the Madras General Sales Tax Act, 1959 and the other for a direction to the respondents to deliver to the appellant the goods which had been seized and confiscated while on transit at Kandaigoundan Chavadi check-post, which is the border of Coimbatore district in this State, and Calicut in the Kerala State. The learned Judge declined to accept that the said provision is invalid, and held that (1965) 16 S.T.C. 708, and (1968) 1 S.C.J. 121 : (1967) 2 I.T.J. 919 :(1968) 1 An.W.R.(S.C.) 43 : (1968)1 M.L.J , (S.C.). 43 : (1967) 20 S.T.C. 453. in which this Court held, the Supreme Court agreeing with it that Section 41 (4) was invalid,were distinguishable. ", "2. The lorry K. L. R. 3919, was searched by the Check-post Officer and was found to carry at the time 85 bags of which 45 contained maida, 20 atta and 20 khandasari sugar. The lorry driver, however, carried with him a sale bill and delivery note which covered only 85 bags of atta. On the ground that the lorry attempted to transport without any sale bill or delivery note for the maida and khandasari sugar and on suspicion that there was an attempt at evasion of tax, the Check-post Officer by an order dated 2nd March, 1965 confiscated the goods, but gave an option to the appellant to pay a penalty of Rs. 1,000 in lieu of confiscation of the goods. The Check-post Officer declined to accept the explanation of the appellant which was that he had purchased in Madras 85 bags of atta, 45 bags of maida and in Nellore 20 bags of khandasari sugar, he being of the view, as we said, that there was really an attempt to suppress the sales of the maida and khandasari sugar under the cloak of the sale bill and delivery note for atta only. ", "3. Before , J., no attempt appears to have been made to challenge the validity of the penalty order on its merits and the learned Judge proceeded on the basis that in the exercise of writ jurisdiction the finding of the Check-post Officer that the explanation of the appellant was not acceptable could not be revised. No point about this has been made for the appellant before us. The appeals have therefore, been confined to the validity of Section 42 (3) (a) and the effect of (1965) 16 S.T.C. 708 and (1968) 1 S.C.J. 121 : (1967) 2 I.T.J. 919 : (1968) 1 An.W.R. (S.C.) 43 : (1968) 1 M.L.J. (S.C.)43 : (1968)2O S.T.C. 453 on that question. ", "4. (1965) 16 S.T.C. 708, decided by a Division Bench of this Court, to which one of us was a party, held that the Madras General Sales Tax Act was not a law of goods and a power to confiscate is not ancillary or incidental to a power to tax on sale or purchase of goods, though of course such power to tax undoubtedly included the power to make due provisions to prevent or check evasion of tax and make it unprofitable. On that view this Court struck down Section 41 (4) which provided for search and seizure from the premises of a dealer goods unaccounted for and for confiscation thereof. The section also provided for levy of penalty in lieu of such confiscation. agreed with the conclusion of this Court as to the invalidity of Section 41 (4), but on a different ground. Clause (a) of the second proviso to Section 41 (4) which was introduced by a latter amendment, stated that in cases where the goods are taxable under this Act, in addition to the tax recoverable, a sum of money not exceeding one thousand rupees or double the amount of tax recoverable, whichever is greater, may be levied as penalty in lieu of confiscation. , with reference to this provision, observed (at page 465): ", "But under Clause (a) of the second proviso the tax is ordered to be recovered even before the sale, in addition to the penalty not exceeding Rs. 1,000 or double the amount of tax recoverable whichever is greater. ", "Referring to the scheme of the Act, considered that in a large majority of cases covered by the Act the tax was payable at the point of first sale in the State, and that, therefore, Clause (a) of the second proviso was clearly repugnant to the general scheme of the Act. In the words of (at page 466): ", "We are, therefore, of opinion that Clause (a) of the second proviso being repugnant to the entire scheme of the Act, in so far as it provides for recovery of tax even before the first sale in this State, which is the point of time in a large majority of cases for recovery of tax, must fall on the ground of repugnancy....We therefore agree with and strike down Sub-section (4) but for reasons different from those which commended themselves to . ", "In so holding, made it clear that it did not propose to decide the general question whether a power to confiscate goods found on search and not accounted for in the books of account of the dealer was an ancillary power necessary for the purpose of stopping evasion of tax. ", "5. Section 42 (3) of the Act, with which we are concerned in the appeals before us, is substantially in pari materia, if not identical, with Section 41 (4) the only difference being that unlike the latter, which provides for goods searched and seized in the premises of the dealer, which are not accounted for, the former concerns itself with goods under transport by any vehicle or boat across the check-post or barrier, and not covered by the specified documents. Except for this difference, which is quite inconsequential from the standpoint of the question of invalidity, Clause (a) of the second proviso to Section 42 (3) is word for word identical with Clause (a) of the second proviso to Section 41 (4). The separate and independent reasoning on the basis of which this and the Supreme struck down Section 41 (4) as invalid seems, as we think, to apply with equal force to the invalidity of Section 42 (3). ", "6. , J., however, felt that there was difference between Section 41 (4) and Section 42 (3) but he did not proceed to detail the difference. As far as we are able to see, except the difference, which we mentioned, there is no other existing between the language, scheme, object and effect of the two provisions. The learned Judge having noticed the two decisions, one of this and the other of the Supreme , that the ratio or the principle of those decisions will not apply to the facts of the petitions before him, because, in his opinion, it had been established by the finding of the Check-post Officer that the taxable event had occurred and the transactions become exigible to tax. In such a case, the learned Judge was of opinion that there might be room to hold that the power to seize and confiscate the goods was ancillary to the power to tax and further the basis of the reasoning of the Supreme that a power to confiscate even before the taxable event had occurred, that is to say a sale or purchase, was inconsistent with the scheme of the Act which was to charge first sales or purchases in the State, was not present here. In our opinion, the factual position in this case has or can have no bearing on the legislative competence to enact Section 41 (4) or Section 42 (3) in their present form, or the invalidity of the provisions, because they, as they exist at the moment proceed to charge the goods to tax even before a sale or purchase thereof has occurred which is repugnant to the scheme of the Act. Legislative competency to provide for confiscation of goods entirely depends on whether such a power is ancillary or incidental to a power to check evasion of tax or to make it unprofitable which is undoubtedly a part of the power to tax on sale or purchase of goods. This held that such a power was not ancillary or incidental to the power of taxation of sale or purchase of goods. That conclusion rested entirely on the scope and ambit of Entry 54 in List II of the Constitution, not on the factual position, whether a sale or purchase had in a given case taken place. The learned Judge, as we have already mentioned, was of opinion that there might be room to hold that the power to seize and confiscate goods was ancillary to the power to tax sales, where a sale in a given case had taken place. That, we are bound to point out, was directly in conflict with the view in (1965) 16 S.T.C. 708, which is binding on us as well as the learned Judge. The view of this was untouched by the Supreme as expressly mentioned by it. Nor the fact that a sale or purchase had taken place in a given case could make any difference to the invalidity of Section 42 (3) because, that question depended on the actual language employed by the . The vice according to the Supreme which invalidated Section 41 (4) lay in the fact that it charged goods to tax even before the taxable event has occurred which is repugnant to the entire scheme of the Act. That repugnancy is not solved by stating that the Check-post Officer has found that there has been a sale or purchase in respect of the goods seized and confiscated. ", "7. Apart from what we have said, we are also unable to appreciate how the finding of the Check-post Officer that there had been a sale would at all in the present context, be relevant to Section 42 (3), proviso 2 (a). The appellant is an out of State dealer. So far as his purchase of khandasari sugar from Nellore is concerned, the transport by him has no reference to any sale or purchase, whether inter-State or intra-State, chargeable to tax in this State. It does not also appear that the sales of goods in question are subject to single point of taxation. Even so, it is nobody's case that the first sales or any sales, for that matter have been effected by the appellant. In such circumstances, two things will follow : one is if there is evasion of tax it is not on the part of the appellant. If he colluded, as the learned Judge apparently thought, that is not covered by the penal provision in Section 42 (3). Secondly it is only where the goods are chargeable to tax, so to speak, with reference to Section 42 (3), proviso 2 (a) that any occasion for seizure and confiscation of the goods can arise. That even does not appear, on the facts, to have happened. It is not any taxable event, but it is only a taxable event which is exigible to tax at the hands of the assessee and is the subject-matter of evasion, that will come within the purview of Section 42 (3). That is not the case here. ", "8. Before we leave this case, there is one other matter to which we would like to make reference. The learned Judge referred to (1967) 2 An.W.R. 71 : 19 S.T.C. 506. But this very case was noticed by in (1968) 1 S.C.J. 121 : (1967) 2 I.T.J. 919 : (1968) 1 An.W.R. (S.C.) 43 : (1968) 1 M.L.J. (S.C.) 43 : (1967) 20 S.T.C. 453, and it was pointed out that the Andhra Act did not contain a provision like Section 41 (4), proviso 2 (a). That made all the difference, as itself pointed out, because the main body of Sub-section (4) of Section 41 as was held by , ought to be read as qualified by and in the sense of the two provisos to Section 41 (4). ", "9. We hold that Section 42 (3) is unconstitutional and invalid, and strike it down. The appeals are allowed with costs throughout. Counsel's fee Rs. 100 in each case. We are informed that in obedience to an interlocutory order of this Court the relative bags of maida and atta have been returned to the appellant, but 20 bags of khandasari sugar, the subject-matter of confiscation, had been sold by the department, in open market. In the circumstances, this will be taken note of and the respondents will pay the sale proceeds of the khandasari sugar to the appellant. ", "W.P. No. 1077 of 1968.--This petition is not opposed by the . This is allowed but with no costs."], "relevant_candidates": ["0000913336", "0001296326", "0001707617"]} {"id": "0000995696", "text": ["JUDGMENT ", "1. The appellant claimed either that the attachment should be set aside in its entirety, as the decree was fraudu-lently obtained or in the alternative, that the sale under the attachment should be subject to the mortgage. In either case we think that the claim is covered by Order XXI Rule 58 of the Civil Procedure Code. Rule 62 provides for the recognition of the mortgage. Rule 61 provides for the rejection of the claim. We are unable to accept Mr. 's contention that the Code does not contemplate the rejection of a claim of a mortgagee as such; the decision in v. (1897) I.L.R 22 B. 640 shows, that claims founded on mortgages are as much within the rule as any other claim. The learned Counsel for the appellant has quoted no cases to the contrary : the decision v. (1901) I.L.R. 29 C. 25 refers to the question of possession being disturbed after sale : that has no bearing on the present question. Moreover the language of Article 11 of the Limitation Act shows that orders refusing to recognise mortgages are within the article. ", "2. Mr. 's contention that as there was no investigation, the one year rule does not apply comes too late in the day. The language of Article 11 in the new Act is more comprehen-sive than that of the previous Act and that has been construed in this Court as covering orders after full investigation as well as orders passed on default. We entirely agree with these decisions. (1897) I.L.R 22 B. 640 and (1915) 31 I.C. 205. ", "3. The second appeal must be dismissed with costs."], "relevant_candidates": ["0001969450", "0001987729"]} {"id": "0001002007", "text": ["1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.3261 OF 2011 (Arising out of Special Leave Petition (C) No.601 of 2009) (Dead) Through L.Rs. and others ......Appellants Versus State of U.P. and others ......Respondents J U D G M E N T ", ", J. ", " ", "1. Leave granted. ", " ", "2. This appeal is directed against order dated 15.12.2008 passed by of whereby the writ petition filed by the appellants questioning the acquisition of their land for planned industrial development of District Gautam Budh Nagar through (hereinafter referred to as the, \"\") by invoking Section 17(1) and 17(4) of the Land Acquisition Act, 1894 (for short, \"the Act\"), as amended by Uttar Pradesh Act No.8 of 1974, was dismissed. ", " ", "3. Upon receipt of proposal from for acquisition of 205.0288 hectares land of village Makora, Pargana Dankaur, Tehsil and District Gautam Budh Nagar, which was approved by the State Government, notification dated 12.3.2008 was issued under Section 4(1) read with Section 17(1) and 17(4) of the Act. The relevant portions of the notification are extracted below: ", " ", "\"Under Sub-Section (1) of Section 4 of the Land Acquisition Act 1894 (Act no.1 of 1894), the Governor is pleased to notify for general information that the land mentioned in the scheduled below, is needed for public purpose, namely planned industrial development in District Gautam Budh Nagar through . ", " ", "2. The Governor being of the opinion that the provisions of sub-section 1 of Section 17 of the said Act, are applicable to said land inasmuch as the said land is urgently required, for the planned industrial development in District Gautam Budh Nagar through and it is as well necessary to eliminate the delay likely to be caused by an enquiry under Section 5A of the said Act, the Governor is further pleased to direct under sub-section 4 of Section 17 of the said Act that the provisions of Section 5A of the said Act, shall not apply.\" ", " ", "4. Since the appellants' land was also included in the notification, they made a representation to the Chairman-cum-Chief Executive Officer of (Respondent No.4) with copies to the Chief Minister, Principal Secretary, Housing and Urban Development, U.P., the District Magistrate and the Special Officer, Land Acquisition, with the request that their land comprised in Khasra No.394 may not be acquired because they had raised construction 30-35 years ago and were using the property for abadi/habitation. The concerned functionaries/authorities did not pay heed to the request of the appellants and issued notification dated 19.11.2008 under Section 6 read with Section 9 of the Act. ", " ", "5. The appellants challenged the acquisition of their land on several grounds including the following: ", " ", "(i) That the land cannot be used for industrial purposes because in the draft Master Plan of Greater NOIDA (2021), the same is shown as part of residential zone. ", " ", "(ii) That they had already constructed dwelling houses and as per the policy of , the residential structures are exempted from acquisition. ", " ", "(iii) That the State Government arbitrarily invoked Section 17(1) read with Section 17(4) of the Act and deprived them of their valuable right to raise objections under Section 5-A . ", "(iv) The acquisition of land is vitiated by arbitrariness, mala fides and violation of Article 14 of the Constitution inasmuch as lands of the Member of Legislative Assembly and other influential persons were left out from acquisition despite the fact that they were not in abadi, but they were not given similar treatment despite the fact that their land was part of abadi and they had constructed dwelling units. ", "6. In support of their challenge to the invoking of Section 17(1) and (4), the appellants made detailed averments in paragraphs 11 and 16 and raised specific grounds A and F, which are extracted below: ", "\"11. That as per the scheme of the said Act, each and every section from sections 4 to 17 has an independent role to play though there is an element of interaction between them. Section 5-A , has a very important role to play in the acquisition proceedings and it is mandatory of the part of the government to give hearing to the person interested in the land whose land is sought to be acquired. It is relevant to point out that the acquisition proceedings under the Act, are based on the principal of eminent domain and the only protection given to the person whose land is sought to be acquired is an opportunity under Section 5-A of the Act to convince the enquiring authority that the purpose for which the land is sought to be acquired is in fact is not a public purpose and is only purported to be one in the guise of a public purpose. ", " ", "It is relevant to mention here that excluding the enquiry under Section 5-A can only be an exception where the urgency cannot brook any delay. The enquiry provides an opportunity to the owner of land to convince the authorities concerned that the land in question is not suitable for purpose for which it is sought to be acquired or the same sought to be acquired for the collateral purposes. It is pertinent to mention here that the respondents No. 1 & 2 without the application of mind dispensed with the enquiry on the ground of urgency invoking the power conferred by Section 17 (1) or (2) of the Act. Further, the respondent No. 1 & 2 without application of mind did not considered the survey report of the abadi of the village Makaura where the entire land is being used for the purpose of residence and grazing of cattle's in Khasra No. 394. Further, the petitioners were surprised to find that their land have not been included in the Abadi irrespective the same is in use for habitable and keeping the cattle and other uses. The petitioners have constructed their houses and using the same for their residence and keep their cattle's and agricultural produce. The survey report clearly shows that the impugned Khasra No. 394 is in use for residence. The report in respect of the land in question falling in Khasra No. 394 given by the respondent No. 4 vide communication dated 26th March, 2007 is annexed as Annexure 6. ", " ", "16. That the said notification under Section 4 of the Act issued by the respondent No. 1 and 2 is without application of mind and there was no urgency in the acquisition of land, for the planned industrial development, as the land, as per the master plan - 2021 the land of the village Makaura is reserved for \"residential\" of which the respondent No. 2 invoked Section 17 (1) and sub section 4 of the Act by dispensing with an enquiry under Section 5A of the Act. The said action on the part of the respondents are un-warranted and is in gross violation of Article 14 ,19 , 21 and 300A of the constitution. The such illegal act on the part of the respondents show mala fide and their oblique motive to deprive the owners from their houses in order to fulfill their political obligations/promise to the private builders by taking the shelter of section 17 of the Act by dispensing with the enquiry under Section 5-A of the Act as well as overlooked purpose as stipulated in the Master Plan 2021 which is any way do not require any urgent attention. ", "A. That the whole acquisition proceedings are void, unconstitutional, tainted with mala fide, abuse of authority and power, non-application of mind, and as such, liable to be quashed as violative of Articles 14,19 and 300-A of the Constitution of India. ", " ", "F. That the purpose stated in the notification under Section 4 and declaration under section 6 by invoking section 17 is presently non-existent and thus the notification is bad in law. There is no urgency for the invocation when the land is to be acquired for planned development for the purpose of setting residential colony. The impugned notification is without any authority of law and volatile of Article 300-A of the Constitution of India, which limits the power to acquire land to the authority under the Land Acquisition Act . Therefore, the notification in question is bad in law.\" ", "(emphasis supplied) ", "7. negatived the appellants' challenge at the threshold mainly on the ground that the averments contained in the petition were not supported by a proper affidavit. This is evident from the following portions of the impugned order: ", " ", "\"Here the petitioners neither have pleaded that there exist no material before to come to the conclusion that the enquiry under Section 5-A should be dispensed with by invoking Section 17(4) of the Act nor the learned counsel for the petitioners could place before us any such averment in the writ petition. Though, in para-11 of the writ petition, an averment has been made that the respondents no. 1 and 2 without the application of mind dispensed with the enquiry on the ground of urgency invoking the power conferred by Section 17(1) or (2) of the Act, but in the affidavit, the said paragraph has been sworn on the basis of perusal of record. Similarly in para 16 of the writ petition, the only averment contained therein is as under: ", "\"16. That the said notification under Section 4 of the Act issued by the respondent No.1 and 2 is without application of mind and there was no urgency in the acquisition of land, for the planned industrial development, as the land, as per the master plan-2021 the land of the village Makaura is reserved for \"residential\" of which the respondent No.2 invoked Section 17(1) and sub- section 4 of the Act by dispensing with an enquiry under Section 5-A of the Act. The said action on the part of the respondents are un-warranted and is in gross violation of Article 14 ,19 ,21 and 300A of the Constitution. The such illegal act on the part of the respondents show mala fide and their oblique motive to deprive the owners from their houses in order to fulfill their political obligations/ promise to the private builders by taking the shelter of Section 17 of the Act by dispensing with the enquiry under Section 5-A of the Act as well as overlooked purpose as stipulated in the Master Plan 2021 which is any way do not require any urgent attention.\" ", "However, in the affidavit, this para has not been sworn at all and in any case with respect to dispensation of enquiry under Section 5-A by invoking Section 17(4) of the Act nothing has been said except that the exercise of power is violative of Articles 14,19, 21 and 300-A of the Constitution. ", "We, therefore, do not find any occasion even to call upon the respondents to file a counter affidavit placing on record, the material if any for exercising power under Section 17(1) and (4) of the Act in the absence of any relevant pleading or material and the question of requiring the respondents to produce the original record in this regard also does not arise.\" ", " ", "8. distinguished the judgment of this Court in . , albeit without assigning any cogent reason, relied upon the judgments of in . 2007 (1) AWC 327, v. State of U.P. 2008 (8) ADJ 329 and Ghaziabad v. State of U.P. 2008 (9) ADJ 43 and held that the decision of the to invoke Section 17(1) cannot be subjected to judicial review. also rejected the appellants' plea that in terms of the policy framed by the State , the land covered by abadi cannot be acquired by observing that no material has been placed on record to show that the policy framed in 1991 was still continuing. To buttress this conclusion, relied upon the judgment of this Court in . ", "9. By an order dated 29.10.2010, this , after taking cognizance of the fact that the respondents did not get opportunity to file reply to the writ petition, directed them to do so. Thereupon, , Additional District Magistrate (Land Acquisition)/Officer on Special Duty (Land Acquisition) NOIDA, District Gautam Budh Nagar filed counter affidavit on behalf of respondent Nos.1 to 3. In paragraph 10 of his affidavit, has attempted to justify invoking of the urgency clause by making the following assertions: ", " ", "\"That in invoking the urgency clause has taken into consideration the following factors:- ", " ", "i) was constituted under the U.P. Industrial Area Development Act, 1976 to promote Industrial and Urban Development in the Area. The acquired land was urgently required by for planned Industrial Development of the area. ", "ii) That the land in the adjoining villages were already acquired by . Thus, the acquired land was urgently required for continuity of infrastructure services and planned . If, the proposed land was not acquired immediately and delay in this regard would lead to encroachments and would adversely affect the Planned . ", "iii) That the acquired land was required for overall development i.e. construction of roads, laying of sewerages, providing electricity etc. in the area and the said scheme has been duly approved by the state government. ", " ", "iv) That the acquired land consists of 246 plots numbers with 392 recorded tenure holders. If objections are to be invited and hearing be given to such large number of tenure holders, it would take long time to dispose of the objections thereof and would hamper the planned development of the area. ", " ", "v) That reputed industrial houses who are interested in investing in the and in case the land is not readily available, they might move to other states and such a move would adversely affect the employment opportunities in the .\" ", " ", " also controverted the appellants' plea for exemption by stating that the constructions made by them on land of Khasra Nos.101 and 399 were insignificant and the construction raised on Khasra No.394 is not part of village Abadi. ", " ", "10. , Tehsildar filed a separate affidavit on behalf of Respondent No.4 and justified the invoking of urgency clause by asserting that large tracts of land were acquired for industrial development of the district. According to him, as per the policy of industrial development of , the land is required to be allotted to industrial houses. ", " ", "11. On 8.11.2010, learned senior counsel for the made a request for permission to file additional affidavit with some documents. His request was accepted. Thereafter, the respondents filed an affidavit of , Tehsildar, Land Acquisition, along with eight documents of which seven have been collectively marked as Annexure A-1. The first of the documents marked Annexure A-1 is copy of letter dated 25.2.2008 sent by the Commissioner and Director, , U.P. to the Special Secretary, on the subject of issuance of notification under Sections 4 and 17 of the Act for acquisition of lands measuring 205.0288 hectares of village Makora. The second document is an undated letter signed by Deputy Chief Executive Officer, Greater Noida, Collector, and four other officers/officials. The next document has been described as comments/certificate on the issues raised in Government Order No.5261/77-4-06-251N/06 dated 21.12.2006 with regard to proposal for acquisition of 205.0288 hectares lands in village Makora. This document is accompanied by seven forms containing various particulars. The third document is communication dated 29.10.2007 sent by the Commissioner, Meerut Division, Meerut to the District Magistrate, conveying the consent of for the acquisition of lands of five villages including Makora. This letter is accompanied by minutes of the meeting of held on 29.10.2007. The fifth document is form No.43A- ", "1. The sixth document is communication dated 22.2.2008 sent by Collector, Land Acquisition/Special Land Acquisition Officer, Greater Noida. The last document which forms part of Annexure A-1 is form No.16 showing the list of properties having constructions etc. Annexure A-2 is copy of letter dated 31.10.2008 sent by the Director, to the Special Secretary, . ", " ", "12. , learned counsel for the appellants argued that the impugned order is liable to be set aside because failed to consider the issues raised in the writ petition in a correct perspective. Learned counsel submitted that the appellants had specifically pleaded that there was no valid ground to invoke the urgency clause contained in Section 17(1) and to dispense with the application of Section 5-A but did not even call upon the respondents to file counter affidavit and brushed aside the challenge to the acquisition proceeding on a wholly untenable premise that the affidavit filed in support of the writ petition was laconic. Learned counsel further argued that the purpose for which land was acquired i.e. planned industrial development of the district did not justify invoking of the urgency provisions and denial of opportunity to the appellants and other land owners to file objections under Section 5-A (1) and to be heard by the Collector in terms of the mandate of Section 5-A (2). In support of his argument, learned counsel relied upon the judgments in and . Another argument of the learned counsel is that misdirected itself in summarily dismissing the writ petition ignoring the substantive plea of discrimination raised by the appellants. ", " ", "13. , learned senior counsel appearing for the respondents urged that this Court should not nullify the acquisition at the instance of the appellants because the pleadings filed before were not supported by proper affidavit. argued that was justified in non-suiting the appellants because they did not produce any evidence to effectively challenge the invoking of urgency provision contained in Section 17(1) . Learned senior counsel emphasized that the satisfaction envisaged in Section 17(1) is purely subjective and the Court cannot review the decision taken by to invoke the urgency clause. He submitted that planned industrial development of District Gautam Budh Nagar is being undertaken in consonance with the policy decision taken by and the appellants cannot be heard to make a grievance against the acquisition of their land because they will be duly compensated. In support of his argument, relied upon the judgment of this Court in and . . Learned senior counsel further submitted that the appellants' land cannot be released from acquisition because that will result in frustrating the objective of planned industrial development of the district. On the issue of discrimination, argued that even if the land belonging to some persons has been illegally left out from acquisition, the appellants are not entitled to a direction that their land should also be released. ", "14. The first issue which needs to be addressed is whether was justified in non-suiting the appellants on the ground that they had not raised a specific plea supported by a proper affidavit to question the decision taken by to invoke Section 17(1) and 17(4) of the Act. We shall also consider an ancillary issue as to whether the appellants had succeeded in prima facie proving that there was no justification to invoke the urgency clause and to dispense with the inquiry envisaged under Section 5-A . ", " ", "15. At the outset, we record our disapproval of the casual manner in which disposed of the writ petition without even calling upon the respondents to file counter affidavit and produce the relevant records. A reading of the averments contained in paragraphs 11 and 16 and grounds A and F of the writ petition, which have been extracted hereinabove coupled with the appellants' assertion that the acquisition of their land was vitiated due to discrimination inasmuch as land belonging to influential persons had been left out from acquisition, but their land was acquired in total disregard of the policy of to leave out land on which dwelling units had already been constructed, show that they had succeeded in making out a strong case for deeper examination of the issues raised in the writ petition and committed serious error by summarily non- suiting them. ", " ", "16. The history of land acquisition legislations shows that in Eighteenth Century, Bengal Regulation I of 1824, Act I of 1850, Act VI of 1857, Act XXII of 1863, Act X of 1870, Bombay Act No. XXVIII of 1839, Bombay Act No. XVII of 1850, Madras Act No. XX of 1852 and Madras Act No.1 of 1854 were enacted to facilitate the acquisition of land and other immovable properties for roads, canals, and other public purposes by paying the amount to be determined by the arbitrators. In 1870, the Land Acquisition Act was enacted to provide for proper valuation of the acquired land. That Act envisaged that if the person having interest in land is not agreeable to part with possession by accepting the amount offered to him, then the Collector may make a reference to . The 1870 Act also envisaged appointment of assessors to assist . If the and the assessor did not agree on the amount then an appeal could be filed in the High . This mechanism proved ineffective because lot of time was consumed in litigation. With a view to overcome this problem, the legislature enacted the Act on the line of the English Lands Clauses Consolidation Act, 1845. However, the land owners or persons having interest in land did not have any say in the acquisition process either under pre-1984 legislations or the 1984 Act (un-amended). They could raise objection only qua the amount of compensation and matters connected therewith. The absence of opportunity to raise objection against the acquisition of land was resented by those who were deprived of their land. To redress this grievance, Section 5A was inserted in the Act by amending Act No.38 of 1923. The statement of Objects and Reasons contained in Bill No.29 of 1923, which led to enactment of the amending Act read as under: ", "\" The Land Acquisition Act I of 1894 does not provide that persons having an interest in land which it is proposed to acquire, shall have the right of objecting to such acquisition; nor is Government bound to enquire into and consider any objections that may reach them. The object of this Bill is to provide that a Local Government shall not declare, under Section 6 of the Act, that any land is needed for a public purpose unless time has been allowed after the notification under Section 4 for persons interested in the land to put in objections and for such objections to be considered by .\" ", " ", "17. The Act , which was enacted more than 116 years ago for facilitating the acquisition of land and other immovable properties for construction of roads, canals, railways etc., has been frequently used in the post independence era for different public purposes like laying of roads, construction of bridges, dams and buildings of various public establishments/institutions, planned development of urban areas, providing of houses to different sections of the society and for developing residential colonies/sectors. However, in the recent years, the country has witnessed a new phenomena. Large tracts of land have been acquired in rural parts of the country in the name of development and transferred to private entrepreneurs, who have utilized the same for construction of multi-storied complexes, commercial centers and for setting up industrial units. Similarly, large scale acquisitions have been made on behalf of the companies by invoking the provisions contained in Part VII of the Act. ", " ", "18. The resultant effect of these acquisitions is that the land owners, who were doing agricultural operations and other ancillary activities in rural areas, have been deprived of the only source of their livelihood. Majority of them do not have any idea about their constitutional and legal rights, which can be enforced by availing the constitutional remedies under Articles 32 and 226 of the Constitution. They reconcile with deprivation of land by accepting the amount of compensation offered by the and by thinking that it is their fate and destiny determined by God. Even those who get semblance of education are neither conversant with the functioning of the apparatus nor they can access the records prepared by the concerned authorities as a prelude to the acquisition of land by invoking Section 4 with or without the aid of Section 17(1) and/or 17(4). Therefore, while examining the land owner's challenge to the acquisition of land in a petition filed under Article 226 of the Constitution, should not adopt a pedantic approach, as has been done in the present case, and decide the matter keeping in view the constitutional goals of social and economic justice and the fact that even though the right to property is no longer a fundamental right, the same continues to be an important constitutional right and in terms of Article 300-A , no person can be deprived of his property except by authority of law. In cases where the acquisition is made by invoking Section 4 read with Section 17(1) and/or 17(4), should insist upon filing of reply affidavit by the respondents and production of the relevant records and carefully scrutinize the same before pronouncing upon legality of the impugned notification/action because a negative result without examining the relevant records to find out whether the competent authority had formed a bona fide opinion on the issue of invoking the urgency provision and excluding the application of Section 5-A is likely to make the land owner a landless poor and force him to migrate to the nearby city only to live in a slum. A departure from this rule should be made only when land is required to meet really emergent situations like those enumerated in Section 17(2) . If the acquisition is intended to benefit private person(s) and the provisions contained in Section 17(1) and/or 17(4) are invoked, then scrutiny of the justification put forward by the should be more rigorous in cases involving the challenge to the acquisition of land, the pleadings should be liberally construed and relief should not be denied to the petitioner by applying the technical rules of procedure embodied in the Code of Civil Procedure and other procedural laws. In this context it will be profitable to notice the observations made by this Court in , which are as under: ", " ", "\"......It is true that Judges are constitutional invigilators and statutory interpreters; but they are also responsive and responsible to Part IV of the Constitution being one of the trinity of the nation's appointed instrumentalities in the transformation of the socio-economic order. The judiciary, in its sphere, shares the revolutionary purpose of the constitutional order, and when called upon to decode social legislation must be animated by a goal- oriented approach. This is part of the dynamics of statutory interpretation in the developing countries so that courts are not converted into rescue shelters for those who seek to defeat agrarian justice by cute transactions of many manifestations now so familiar in the country and illustrated by the several cases under appeal. This caveat has become necessary because the judiciary is not a mere umpire, as some assume, but an activist catalyst in the constitutional scheme.\" ", " ", "19. We may now advert to the ancillary question whether was justified in non suiting the appellants on the ground that they failed to discharge the primary burden of proving that had invoked Section 17(1) and 17(4) without application of mind to the relevant considerations. In this context, it is apposite to observe that while dealing with challenge to the acquisition of land belonging to those who suffer from handicaps of poverty, illiteracy and ignorance and do not have the resources to access the material relied upon by the functionaries of the and its agencies for forming an opinion or recording a satisfaction that the urgency provisions contained in Section 17(1) should be resorted to and/or the enquiry envisaged under Section 5A should be dispensed with, should not literally apply the abstract rules of burden of proof enshrined in the Evidence Act . It is too much to expect from the rustic villagers, who are not conversant with the intricacies of law and functioning of the judicial system in our country to first obtain relevant information and records from the concerned authorities and then present skillfully drafted petition for enforcement of his legal and/or constitutional rights. The Court should also bear in mind that the relevant records are always in the exclusive possession/domain of the authorities of the and/or its agencies. Therefore, an assertion by the appellants that there was no urgency in the acquisition of land; that the concerned authorities did not apply mind to the relevant factors and records and arbitrarily invoked the urgency provisions and thereby denied him the minimum opportunity of hearing in terms of Section 5-A(1) and (2), should be treated as sufficient for calling upon the respondents to file their response and produce the relevant records to justify the invoking of urgency provisions. ", "20. (supra), the three-Judge Bench of this Court examined the correctness of the judgment of whereby the acquisition of land by the Government by issuing notification under Section 4 read with Section 17(1) and 17(4) for development and utilisation as residential and industrial area was quashed. held that the purpose of acquisition was a genuine public purpose but quashed the notifications by observing that the burden of proving the existence of circumstances which could justify invoking of urgency clause was on the , which it had failed to discharge. Some of the observations made by , which have been extracted in paragraphs 11 and 12 of the judgment of this Court, are reproduced below. ", " \"When the formation of an opinion or the satisfaction of an authority is subjective but is a condition precedent to the exercise of a power, the challenge to the formation of such opinion or to such satisfaction is limited, in law, to three points only. It can be challenged, firstly, on the ground of mala fides; secondly, on the ground that the authority which formed that opinion or which arrived at such satisfaction did not apply its mind to the material on which it formed the opinion or arrived at the satisfaction, and, thirdly, that the material on which it formed its opinion or reached the satisfaction was so insufficient that no man could reasonably reach that conclusion. So far as the third point is concerned, no court of law can, as in an appeal, consider that, on the material placed before the authority, the authority was justified in reaching its conclusion. The court can interfere only in such cases where there was no material at all or the material was so insufficient that no man could have reasonably reached that conclusion. ", "In the case before us the petitioner has stated in the petition more than once that the urgency clause had been applied without any valid reason. The urgency clause in respect of each of the said two notifications concerning the lands in Groups 1 and 2 is contained in the relative Section 4 notification itself. The public purpose stated in the notification is `for development and utilization of the said lands as an industrial and residential area'. To start with, this statement itself is vague, in the sense that it is not clear whether the development and utilization of the lands referred to in that statement was confined to the lands mentioned in the schedule to the notification or it applied to a wider area of which such lands formed only a part. So far as the affidavit in reply is concerned, no facts whatever are stated. The affidavit only states that the authority i.e. the Commissioner of was satisfied that the possession of the said lands was urgently required for the purpose of carrying out the said development. Even Mr conceded that the affidavit does not contain a statement of facts on which the authority was satisfied or on which it formed its opinion. It is, therefore, quite clear that the respondents have failed to bring on record any material whatever on which the respondents formed the opinion mentioned in the two notifications. The notifications themselves show that they concern many lands other than those falling in the said first and third groups. It is not possible to know what was the development for which the lands were being acquired, much less is it possible to know what were the circumstances which caused urgency in the taking of possession of such lands. We have held that the burden of proving such circumstances, at least prima facie is on the respondents. As the respondents have brought no relevant material on the record, the respondents have failed to discharge that burden. We must, in conclusion, hold that the urgency provision under Section 17(4) was not validly resorted to.\" ", "(emphasis supplied) While dealing with the argument of the that it was for the petitioner to prove that there was no material to justify invoking of the urgency clause, this Court observed: ", " ", "\"We do not think that a question relating to burden of proof is always free from difficulty or is quite so simple as it is sought to be made out here. Indeed, the apparent simplicity of a question relating to presumptions and burdens of proof, which have to be always viewed together is often deceptive. Over simplification of such questions leads to erroneous statements and misapplications of the law.\" ", " ", "The Court then referred to the judgment in v. Director Public Prosecutions, 1935 AC 462, extensively quoted from Phipson on Evidence (11th Edn), noticed Sections 101 to 106 of the Evidence Act and observed: ", " \"Coming back to the cases before us, we find that had correctly stated the grounds on which even a subjective opinion as to the existence of the need to take action under Section 17(4) of the Act can be challenged on certain limited grounds. But, as soon as we speak of a challenge we have to bear in mind the general burdens laid down by Sections 101 and 102 of the Evidence Act. It is for the petitioner to substantiate the grounds of his challenge. This means that the petitioner has to either lead evidence or show that some evidence has come from the side of the respondents to indicate that his challenge to a notification or order is made good. If he does not succeed in discharging that duty his petition will fail. But, is that the position in the cases before us? We find that, although had stated the question before it to be one which \"narrows down to the point as to the burden of proof\" yet, it had analysed the evidence sufficiently before it to reach the conclusion that the urgency provision under Section 17(4) had not been validly resorted to. ", "... ... ... ", "... We think that the original or stable onus laid down by Section 101 and Section 102 of the Evidence Act cannot be shifted by the use of Section 106 of the Evidence Act, although the particular onus of providing facts and circumstances lying especially within the knowledge of the official who formed the opinion which resulted in the notification under Section 17 (4) of the Act rests upon that official. The recital, if it is not defective, may obviate the need to look further. But, there may be circumstances in the case which impel the court to look beyond it. And, at that stage, Section 106 Evidence Act can be invoked by the party assailing an order or notification. It is most unsafe in such cases for the official or authority concerned to rest content which non- disclosure of facts especially within his or its knowledge by relying on the sufficiency of a recital. Such an attitude may itself justify further judicial scrutiny. ", "... ... ... ", "In the cases before us, if the total evidence from whichever side any of it may have come, was insufficient to enable the petitioners to discharge their general or stable onus, their petitions could not succeed. On the other hand, if, in addition to the bare assertions made by the petitioners, that the urgency contemplated by Section 17(4) did not exist, there were other facts and circumstances, including the failure of the to indicate facts and circumstances which it could have easily disclosed if they existed, the petitioners could be held to have discharged their general onus. ", "... ... ... ", "It is also clear that, even a technically correct recital in an order or notification stating that the conditions precedent to the exercise of a power have been fulfilled may not debar the court in a given case from considering the question whether, in fact, those conditions have been fulfilled. And, a fortiori, the court may consider and decide whether the authority concerned has applied its mind to really relevant facts of a case with a view to determining that a condition precedent to the exercise of a power has been fulfilled. If it appears, upon an examination of the totality of facts in the case, that the power conferred has been exercised for an extraneous or irrelevant purpose or that the mind has not been applied at all to the real object or purpose of a power, so that the result is that the exercise of power could only serve some other or collateral object, the court will interfere.\" The finally held as under: ", " ", "\"..................There is no indication whatsoever in the affidavit filed on behalf of the the mind of the Commissioner was applied at all to the question whether it was a case necessitating the elimination of the enquiry under Section5A of the Act. The recitals in the notifications, on the other hand, indicate that elimination of the enquiry under Section 5A of the Act was treated as an automatic consequence of the opinion formed on other matters. The recital does not say at all that any opinion was formed on the need to dispense with the enquiry under Section 5A of the Act. It is certainly a case in which the recital was at least defective. The burden, therefore, rested upon the to remove the defect, if possible, by evidence to show that some exceptional circumstances which necessitated the elimination of an enquiry under Section 5A of the Act and that the mind of the Commissioner was applied to this essential question. It seems to us that correctly applied the provisions of Section 106 of the Evidence Act to place the burden upon the to prove those special circumstances, although it also appears to us that was quite correct in stating its view in such a manner as to make it appear that some part of the initial burden of the petitioners under Sections 101 and 102 of the Evidence Act had been displaced by the failure of the to discharge its duty under Section 106 of the Act. The correct way of putting it would have been to say that the failure of the to produce the evidence of facts especially within the knowledge of its officials, which rested upon it under Section 106 of the Evidence Act, taken together with the attendant facts and circumstances including the contents of recitals, had enabled the petitioners to discharge their burden under Sections 101 and 102 of the Evidence Act.\" ", " ", "(emphasis supplied) ", "21. The ratio of the aforesaid judgment was recently followed by the two- ", "Judge Bench in (2010) 11 SCC ", "242. ", "22. We shall now consider whether there was any valid ground or justification for invoking the urgency provision contained in Section 17(1) and to exclude the application of Section 5A for the acquisition of land for planned industrial development of the district. Sections 4 , 5-A (as amended), 6 and 17 of the Act which have bearing on this question read as under: ", " ", "\"4. Publication of preliminary notification and power of officers thereupon.- (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company, a notification to that effect shall be published in and in two daily newspapers circulating in that locality of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality (the last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of the publication of the notification). (2) Thereupon it shall be lawful for any officer, either generally or specially authorized by such Government in this behalf, and for his servants and workmen, - to enter upon and survey and take levels of any land in such locality; to dig or bore into the sub-soil; to do all other acts necessary to ascertain whether the land is adapted for such purpose; ", "to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon; ", "to mark such levels, boundaries and line by placing marks and cutting trenches; and, where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle; ", " ", "Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwelling house (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so. 5A. Hearing of objections. - (1) Any person interested in any land which has been notified under section 4 , sub- section (1), as being needed or likely to be needed for a public purpose or for a company may, within thirty days from the date of the publication of the notification, object to the acquisition of the land or of any land in the locality, as the case may be. ", "(2) Every objection under sub-section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard in person or by any person authorized by him in this behalf or by pleader and shall, after hearing all such objections and after making such further inquiry, if any, as he thinks necessary, either make a report in respect of the land which has been notified under section 4 , sub-section (1), or make different reports in respect of different parcels of such land, to the appropriate , containing his recommendations on the objections, together with the record of the proceedings held by him, for the decision of that . The decision of the appropriate on the objections shall be final. ", "(3) For the purpose of this section, a person shall be deemed to be interested in land who would be entitled to claim an interest in compensation if the land were acquired under this Act. ", " ", "6. Declaration that land is required for a public purpose. - (1) Subject to the provisions of Part VII of this Act, when the appropriate Government is satisfied, after considering the report, if any, made under section 5A , sub-section (2), that any particular land is needed for a public purpose, or for a , a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorized to certify its orders, and different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4 , sub-section (1) irrespective of whether one report or different reports has or have been made (wherever required) under section 5A , sub-section (2): ", "Provided that no declaration in respect of any particular land covered by a notification under section 4 , sub- section (1), - ", " ", "(i) xx xx xx xx ", "(ii) published after the commencement of the Land Acquisition (Amendment) Act , 1984, shall be made after the expiry of one year from the date of the publication of the notification: ", "Provided further that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a Company, or wholly or partly out of public revenues or some fund controlled or managed by a local authority. ", "Explanation 1. - In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued under section 4 , sub-section (1), is stayed by an order of a shall be excluded. ", "Explanation 2. - Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the , such compensation shall be deemed to be compensation paid out of public revenues. ", "(2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the date of such publication and the giving of such public notice, being hereinafter referred to as the date of the publication of the declaration), and such declaration shall state the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and, where a plan shall have been made of the land, the place where such plan may be inspected. ", "(3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for a Company, as the case may be; and, after making such declaration, the appropriate Government may acquire the land in manner hereinafter appearing. ", " ", "17. Special powers in case of urgency. - (1) In cases of urgency whenever the appropriate , so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9 , sub- section (1) take possession of any land needed for a public purpose. Such land shall thereupon vest absolutely in the , free from all encumbrances. ", "(2) Whenever, owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway Administration to acquire the immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river-side or ghat station, or of providing convenient connection with or access to any such station, or the appropriate considers it necessary to acquire the immediate possession of any land for the purpose of maintaining any structure or system pertaining to irrigation, water supply, drainage, road communication or electricity, the Collector may, immediately after the publication of the notice mentioned in sub-section (1) and with the previous sanction of the appropriate , enter upon and take possession of such land, which shall thereupon vest absolutely in the free from all encumbrances: ", "Provided that the Collector shall not take possession of any building or part of a building under this sub-section without giving to the occupier thereof at least forty-eight hours' notice of his intention so to do, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such building without unnecessary inconvenience. ", "(3) In every case under either of the preceding sub- sections the Collector shall at that time of taking possession offer to the persons interested compensation for the standing crops and trees (if any) on such land and from any other damage sustained by them caused by such sudden dispossession and not excepted in section 24 ; and, in case such offer is not accepted, the value of such crops and trees and the amount of such other damage shall be allowed for in awarding compensation for the land under the provisions herein contained. ", "(3A) Before taking possession of any land under sub- section (1) or sub-section (2), the Collector shall, without prejudice to the provisions of sub-section (3)- ", " ", "(a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and ", "(b) pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31 , sub- section (2), and where the Collector is so prevented, the provisions of section 31 , sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section. ", "(3B) The amount paid or deposited under sub-section (3A), shall be taken into account for determining the amount of compensation required to be tendered under section 31 , and where the amount so paid or deposited exceeds the compensation awarded by the Collector under section 11 , the excess may, unless refunded within three months from the date of Collector's award, be recovered as an arrear of land revenue. ", "(4) In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub-section (1) or sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and, if it does so direct, a declaration may be made under section 6 in respect of the land at any time after the date of the publication of the notification under section 4 , sub-section (1). ", " Section 17 has been amended five times by the Uttar Pradesh legislature. However, the only amendment which is relevant for deciding this case is the insertion of proviso to Section 17(4) vide Uttar Pradesh Act No.8 of 1974. That proviso reads as under: ", " ", "\"Provided that where in the case of any land, notification under section 4 , sub-section (1) has been published in the Official Gazette on or after September 24, 1984 but before January 11, 1989, and the appropriate Government has under this sub-section directed that the provisions of section 5A shall not apply, a declaration under section 6 in respect of the land may be made either simultaneously with, or at any time after, the publication in the Official Gazette of the notification under section 4 , sub-section (1).\" ", " ", "23. ANALYSIS OF THE PROVISIONS: ", " ", " Section 4(1) lays down that whenever it appears to the appropriate that land in any locality is needed or is likely to be needed for any public purpose or for a company, then a notification to that effect is required to be published in and two daily newspapers having circulation in the locality. Of these, one paper has to be in the regional language. A duty is also cast on the Collector, as defined in Section 32 3(c) , to cause public notice of the substance of such notification to be given at convenient places in the locality. The last date of publication and giving of public notice is treated as the date of publication of the notification. Section 4(2) lays down that after publication of the notification under Section 4(1) , any officer authorised by the in this behalf, his servants or workmen can enter upon and survey and take levels of any land in the locality or to dig or bore into the sub-soil and to do all other acts necessary for ascertaining that land is suitable for the purpose of acquisition. The concerned officer, his servants or workmen can fix the boundaries of land proposed to be acquired and the intended line of the work, if any, proposed to be made on it. They can also mark such levels and boundaries by marks and cutting trenches and cut down and clear any part of any standing crops, fence or jungle for the purpose of completing the survey and taking level, marking of boundaries and line. However, neither the officer nor his servants or workmen can, without the consent of the occupier, enter into any building or upon any enclosed court or garden attached to a dwelling house without giving seven days' notice to the occupier. Section 5A , which embodies the most important dimension of the rules of natural justice, lays down that any person interested in any land notified under Section 4(1) may, within 30 days of publication of the notification, submit objection in writing against the proposed acquisition of land or of any land in the locality to the Collector. The Collector is required to give the objector an opportunity of being heard either in person or by any person authorized by him or by pleader. After hearing the objector (s) and making such further inquiry, as he may think necessary, the Collector has to make a report in respect of land notified under Section 4(1) with his recommendations on the objections and forward the same to the along with the record of the proceedings held by him. The Collector can make different reports in respect of different parcels of land proposed to be acquired. Upon receipt of the Collector's report, the appropriate is required to take action under Section 6(1) which lays down that after considering the report, if any, made under Section 5-A (2), the appropriate is satisfied that any particular land is needed for a public purpose, then a declaration to that effect is required to be made under the signatures of a Secretary to the or of some officer duly authorised to certify its orders. This section also envisages making of different declarations from time to time in respect of different parcels of land covered by the same notification issued under Section 5(1) . In terms of clause (ii) of proviso to Section 6(1) , no declaration in respect of any particular land covered by a notification issued under Section 4(1) , which is published after 24.9.1989 can be made after expiry of one year from the date of publication of the notification. To put it differently, a declaration is required to be made under Section 6(1) within one year from the date of publication of the notification under Section 4(1) . In terms of Section 6(2) , every declaration made under Section 6(1) is required to be published in the official gazette and in two daily newspapers having circulation in the locality in which land proposed to be acquired is situated. Of these, at least one must be in the regional language. The Collector is also required to cause public notice of the substance of such declaration to be given at convenient places in the locality. The declaration to be published under Section 6(2) must contain the district or other territorial division in which land is situate, the purpose for which it is needed, its approximate area or a plan is made in respect of land and the place where such plan can be inspected. Section 6 (3) lays down that the declaration made under Section 6(1) shall be conclusive evidence of the fact that land is needed for a public purpose. After publication of the declaration under Section 6 , the Collector is required to take order from the State for the acquisition of land to be carved out and measured and planned ( Sections 7 and 8 ). The next stage as envisaged is issue of public notice and individual notice to the persons interested in land to file their claim for compensation. Section 11 envisages holding of an enquiry into the claim and passing of an award by the Collector who is required to take into consideration the provisions contained in Section 23 . Section 16 lays down that after making an award the Collector can take possession of land which shall thereafter vest in the . Section 17(1) postulates taking of possession of land without making an award. If the appropriate decides that land proposed to be acquired is urgently needed for a public purpose then it can authorise the competent authority to take possession. Section 17(2) contemplates a different type of urgency in which, the State can authorise taking of possession even before expiry of 15 days period specified in Section 9 (1). Section 17(4) lays down that in cases where appropriate comes to the conclusion that there is existence of an urgency or unforeseen emergency, it can direct that provisions of Section 5-A shall not apply. ", " ", "24. Before adverting to the precedents in which Section 5A has been interpreted by this Court, it will be useful to notice development of the law relating to the rule of hearing. In the celebrated case of v. (1863) 143 ER 414, the principle was stated thus: ", " ", "\"Even did not pass a sentence upon , before he was called upon to make his defence. \"\" says , \"where art thou? hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat\". ", " ", "Therein had brought down the house of the plaintiff's (), because he had failed to comply with The Metropolis Local Management Act. The Act required the plaintiff to notify the board seven days before starting to build the house. argued that even though the board had the legal authority to tear his house down, no person should be deprived of their property without notice. In spite of no express words in the statute the court recognized the right of hearing before the plaintiff's house built without permission was demolished in the exercise of statutory powers. stated: ", " ", "`Although there are not positive words in a statute requiring that the party shall be heard, yet the justice of the common law shall supply the omission of the legislature'. ", " ", "25. Perhaps the best known statement on the right to be heard has come from Lord Loreburn, L.C. in (1911 AC 179 at ", "182), where he observed: ", " ", "\"Comparatively recent statutes have extended, if they have originated, the practice of imposing upon departments or offices of the duty of deciding or determining questions of various kinds...In such cases... they must act in good faith and fairly listen to both sides, for that is a duty lying upon everyone who decides anything. But I do not think they are bound to treat such questions as though it were a trial ...they can obtain information in any way they think best, always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial in their view.\" ", " ", "26. In v. 1964 AC 40 Lord emphasized on the universality of the right to a fair hearing whether it concerns the property or tenure of an office or membership of an institution. In v. 1983 2 AC 237, Lord said that the right of a man to be given a fair opportunity of hearing, what is alleged against him and of presenting his own case is so fundamental to any civilized legal system that it is to be presumed that intended that failure to observe the same should render null and void any decision reached in breach of this requirement. In v. 1987 AC 625 Lord said: ", "\"My Lords, the so-called rules of natural justice are not engraved on tablets of stone. To use the phrase which better expresses the underlying concept, what the requirements of fairness demand when any body, domestic, administrative or judicial, has to make a decision which will affect the rights of individuals depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates. In particular, it is well- established that when a statute has conferred on any body the power to make decisions affecting individuals, the courts will not only require the procedure prescribed by the statute to be followed, but will readily imply so much and no more to be introduced by way of additional procedural safeguards as will ensure the attainment of fairness.\" ", " ", "27. In the United States, principles of natural justice usually find support from the Due Process clause of the Constitution. The extent of due process protection required is determined by a number of factors; first the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural requirement would entail. ", " ", "28. The amplitude, ambit and width of the rule of audi alteram partem was lucidly stated by the three-Judge bench in in the following words: ", " ", "\"11..........This unwritten right of hearing is fundamental to a just decision by any authority which decides a controversial issue affecting the rights of the rival contestants. This right has its roots in the notion of fair procedure. It draws the attention of the party concerned to the imperative necessity of not overlooking the other side of the case before coming to its decision, for nothing is more likely to conduce to just and right decision than the practice of giving hearing to the affected parties.\" ", " ", "29. , speaking for himself, and highlighted the importance of rule of hearing in the following words: ", "\"43. Indeed, natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. It has, many colours and shades, many forms and shapes and, save where valid law excludes it, applies when people are affected by acts of authority. It is the hone of healthy government, recognised from earliest times and not a mystic testament of Judge-made law. Indeed, from the legendary days of -- and of 's -- the rule of law has had this stamp of natural justice which makes it social justice. We need not go into these deeps for the present except to indicate that the roots of natural justice and its foliage are noble and not new-fangled. Today its application must be sustained by current legislation, case-law or other extant principle, not the hoary chords of legend and history. Our jurisprudence has sanctioned its prevalence even like the Anglo-American system. ", "..... ..... ..... ", " ", "48. Once we understand the soul of the rule as fair play in action -- and it is so -- we must hold that it extends to both the fields. After all, administrative power in a democratic set-up is not allergic to fairness in action and discretionary executive justice cannot degenerate into unilateral injustice. Nor is there ground to be frightened of delay, inconvenience and expense, if natural justice gains access. For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction. It is not a bull in a china shop, nor a bee in one's bonnet. Its essence is good conscience in a given situation: nothing more -- but nothing less. The \"exceptions\" to the rules of natural justice are a misnomer or rather are but a shorthand form of expressing the idea that in those exclusionary cases nothing unfair can be inferred by not affording an opportunity to present or meet a case. Text-book excerpts and ratios from rulings can be heaped, but they all converge to the same point that audi alteram partem is the justice of the law, without, of course, making law lifeless, absurd, stultifying, self-defeating or plainly contrary to the common sense of the situation.\" ", "30. , speaking for himself and and observed: ", "\"14. ...........The audi alteram partem rule is intended to inject justice into the law and it cannot be applied to defeat the ends of justice, or to make the law \"lifeless, absurd, stultifying, self- defeating or plainly contrary to the common sense of the situation\". Since the life of the law is not logic but experience and every legal proposition must, in the ultimate analysis, be tested on the touchstone of pragmatic realism, rule would, by the experiential test, be excluded, if importing the right to be heard has the effect of paralysing the administrative process or the need for promptitude or the urgency of the situation so demands. But at the same time it must be remembered that this is a rule of vital importance in the field of administrative law and it must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. It is a wholesome rule designed to secure the rule of law and the court should not be too ready to eschew it in its application to a given case. True it is that in questions of this kind a fanatical or doctrinaire approach should be avoided, but that does not mean that merely because the traditional methodology of a formalised hearing may have the effect of stultifying the exercise of the statutory power, should be wholly excluded. The court must make every effort to salvage this cardinal rule to the maximum extent permissible in a given case. It must not be forgotten that \"natural justice is pragmatically flexible and is amenable to capsulation under the compulsive pressure of circumstances\". is not cast in a rigid mould and judicial decisions establish that it may suffer situational modifications. The core of it must, however, remain, namely, that the person affected must have a reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.\" ", "(emphasis supplied) ", "31. the majority of the three Judge Bench held that rule of audi alteram partem must be complied with even when the Government exercises power under Section 18AA of the Industries (Development & Regulation) Act , 1951 which empowers to authorise taking over of the management of industrial undertaking. speaking for himself and referred to the development of law relating to applicability of the rule of audi alteram partem to administrative actions, noticed the judgments in v. (supra), (1969) 2 SCC 262, (supra), (supra) and State of Orissa v Dr. Bina Pani Dei 1967 (2) SCR 625 and quashed the order passed by for taking over the management of the industrial undertaking of the appellant on the ground that opportunity of hearing has not been given to the owner of the undertaking and remanded the matter for fresh consideration and compliance of the rule of audi alteram partem. ", "32. , the three Judge Bench of this Court emphasised the importance of Section 5A in the following words: ", " ", "\"7. ............Sub-section (2) of Section 5-A makes it obligatory on the Collector to give an objector an opportunity of being heard. After hearing all objections and making further inquiry he is to make a report to the appropriate containing his recommendation on the objections. The decision of the appropriate on the objections is then final. The declaration under Section 6 has to be made after the appropriate is satisfied, on a consideration of the report, if any, made by the Collector under Section 5-A(2) . The legislature has, therefore, made complete provisions for the persons interested to file objections against the proposed acquisition and for the disposal of their objections. It is only in cases of urgency that special powers have been conferred on the appropriate to dispense with the provisions of Section 5-A : [See Section 17(4) of the Acquisition Act.]\" ", "33. , Krishna Iyer J. emphasized the necessity of reasonableness and fairness in the State action of invoking the urgency provision in the following words: ", "\"16..........it is fundamental that compulsory taking of a man's property is a serious matter and the smaller the man the more serious the matter. Hearing him before depriving him is both reasonable and pre-emptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons. Save in real urgency where public interest does not brook even the minimum time needed to give a hearing land acquisition authorities should not, having regard to Articles 14 (and 19), burke an enquiry under Section 17 of the Act. Here a slumbering process, pending for years and suddenly exciting itself into immediate forcible taking, makes a travesty of emergency power.\" ", " ", "34. , this Court reiterated that the compliance of Section 5A is mandatory and observed as under: ", " ", "\"10............The decision of the Collector is supposedly final unless the appropriate Government chooses to interfere therein and cause affectation, suo motu or on the application of any person interested in the land. These requirements obviously lead to the positive conclusion that the proceeding before the Collector is a blend of public and individual enquiry. The person interested, or known to be interested, in the land is to be served personally of the notification, giving him the opportunity of objecting to the acquisition and awakening him to such right. That the objection is to be in writing, is indicative of the fact that the enquiry into the objection is to focus his individual cause as well as public cause. That at the time of the enquiry, for which prior notice shall be essential, the objector has the right to appear in person or through pleader and substantiate his objection by evidence and argument.\" ", " ", "35. The ratio of (supra) has been reiterated and followed in , and (supra). ", " ", "36. The acquisition of land under Section 4 read with Section 17(1) and/or 17(4) has generated substantial litigation in last 50 years. One of the earliest judgments on the subject is (1964) 3 SCR 425. In that case, the acquisition of land for construction of tenements for the 4th phase of subsidized industrial housing scheme sponsored by , as also for general improvement and street Scheme No.XX of by issuing notification under Section 4 read with Section 17(1) , (1-A) and 17(4) was challenged. The learned Single Judge and of negatived the appellants' challenge by observing that once Section 17 is invoked, there was no necessity to hold enquiry under Section 5A . This Court set aside the order of of and held: ", " ", "\"It will be seen that Section 17(1) gives power to the Government to direct the Collector, though no award has been made under Section11, to take possession of any waste or arable land needed for public purpose and such land thereupon vests absolutely in the Government free from all encumbrances. If action is taken under Section 17(1) , taking possession and vesting which are provided in Section 16 after the award under Section 11 are accelerated and can take place fifteen days after the publication of the notice under Section 9 . Then comes Section 17(4) which provides that in case of any land to which the provisions of sub-section (1) are applicable, the Government may direct that the provisions of Section 5-A shall not apply and if it does so direct, a declaration may be made under Section 6 in respect of the land at any time after the publication of the notification under Section 4(1) . It will be seen that it is not necessary even where the Government makes a direction under Section 17(1) that it should also make a direction under Section 17(4) . If the Government makes a direction only under Section 17(1) the procedure under Section 5-A would still have to be followed before a notification under Section 6 is issued, though after that procedure has been followed and a notification under Section 6 is issued the Collector gets the power to take possession of the land after the notice under Section 9 without waiting for the award and on such taking possession the land shall vest absolutely in Government free from all encumbrances. It is only when the Government also makes a declaration under Section 17 (4) that it becomes unnecessary to take action under Section 5-A and make a report thereunder. It may be that generally where an order is made under Section 17(1) , an order under Section 17(4) is also passed; but in law it is not necessary that this should be so. It will also be seen that under the Land Acquisition Act an order under Section 17(1) or Section 17(4) can only be passed with respect to waste or arable land and it cannot be passed with respect to land which is not waste or arable and on which buildings stand.\" ", "(emphasis supplied) ", "37. (1967) 1 SCR 373, the Constitution Bench considered the legality of the acquisition of 409.6 acres of land in village Markundi Ghurma, Pargana Agori for a public purpose i.e. for limestone quarry. The State Government invoked Section 17(1) and 17(4) , dispensed with requirement of hearing envisaged under Section 5-A and directed the Collector and District Magistrate, Mirzapur to take the possession of land. dismissed the writ petition filed by the appellant by observing that the Court cannot interfere with the subjective satisfaction reached by on the issue of urgency. This Court agreed with that the acquisition was for a public purpose but held that the expression of opinion by on the issue of invoking urgency provision can be challenged on the ground of non application of mind or mala fides. ", "The Court relied upon the judgments in King Emperor v. , Criminal Appeal No.110 of 1966 decided on July 27, 1966; (1958) 1 WLR 546; v. (1914) 1 Ch 438; v. 44 1A 117 and R. v. 39 1A 133 and observed: ", "\"It is true that the opinion of which is a condition for the exercise of the power under Section 17 (4) of the Act, is subjective and a court cannot normally enquire whether there were sufficient grounds or justification of the opinion formed by under Section 17(4) . The legal position has been explained by in King Emperor v. and by this Court in a recent case - . But even though the power of has been formulated under Section 17(4) of the Act in subjective terms the expression of opinion of can be challenged as ultra vires in a court of law if it could be shown that never applied it mind to the matter or that the action of is mala fide. If therefore in a case the land under acquisition is not actually waste or arable land but has formed the opinion that the provisions of sub-section (1) of Section 17 are applicable, the court may legitimately draw an inference that did not honestly form that opinion or that in forming that opinion did not apply its mind to the relevant facts bearing on the question at issue. It follows therefore that the notification of under Section 17 (4) of the Act directing that the provisions of Section 5-A shall not apply to the land is ultra vires.\" ", "(emphasis supplied) ", "38. (supra), this Court while approving the judgment of , which quashed the acquisition made under Section 4 read with Section 17(1) and 17(4) held as under: ", " ", "\"38. Now, the purpose of Section 17(4) of the Act is, obviously, not merely to confine action under it to waste and arable land but also to situations in which an inquiry under Section 5-A will serve no useful purpose, or, for some overriding reason, it should be dispensed with. The mind of the officer or authority concerned has to be applied to the question whether there is an urgency of such a nature that even the summary proceedings under Section 5-A of the Act should be eliminated. It is not just the existence of an urgency but the need to dispense with an inquiry under Section 5-A which has to be considered. ", "40. In the case before us, the public purpose indicated is the development of an area for industrial and residential purposes. This, in itself, on the face of it, does not call for any such action, barring exceptional circumstances, as to make immediate possession, without holding even a summary enquiry under Section 5-A of the Act, imperative. On the other hand, such schemes generally take sufficient period of time to enable at least summary inquiries under Section 5-A of the Act to be completed without any impediment whatsoever to the execution of the scheme. Therefore, the very statement of the public purpose for which the land was to be acquired indicated the absence of such urgency, on the apparent facts of the case, as to require the elimination of an enquiry under Section 5-A of the Act. ", " ", "42. All schemes relating to development of industrial and residential areas must be urgent in the context of the country's need for increased production and more residential accommodation. Yet, the very nature of such schemes of development does not appear to demand such emergent action as to eliminate summary enquiries under Section 5-A of the Act.......................\" ", "(emphasis supplied) ", "39. The next judgment which deserves to be mentioned is v State of U.P. (supra). In 1976, acquired large tracts of land in different villages of Ghaziabad District including village Chhalera Banger for planned industrial development of Ghaziabad. On being approached by , invoked Section 17 (1) and 17(4) on the ground that the land was urgently required. In 1987, more lands were acquired from the same village by issuing notification under Section 4 . This time the land owners were given opportunity to file their objections and after considering the same, issued notification under Section 6 for the acquisition of 353 acres land. In 1988, submitted fresh proposal for the acquisition of land belonging to the appellants and others (total land measuring 294.26 acres). The State Government issued notification under Section 4 read with Section 17(1) and 17(4) of the Act clearly indicating therein that Section 5-A was not applicable. The writ petitions filed by the land owners were dismissed by . After noticing the arguments of the learned counsel for the parties, this Court framed the following questions. ", " ", "\"1. Whether the State authorities were justified in invoking Section 17(4) of the Act for dispensing with inquiry under Section 5-A of the Act. ", "2. In any case, whether the appellants' lands have to be treated as immune from acquisition proceedings on the ground that they were having abadi thereon and were, therefore, governed by the policy decision of the State of U.P. not to acquire such lands. ", "3. Whether this Court should refuse to exercise its discretionary jurisdiction under Article 136 of the Constitution of India in the facts and circumstances of the case. ", "4. What final orders.\" ", " ", "While dealing with question No.1, the Court noticed the scheme of Section 17 , referred to the pleadings of the parties, and the judgments in (supra), (supra), , (supra), . (supra), . , (1996) 2 SCC 365, and held that the decision to dispense with the inquiry envisaged under Section 5-A was not based on any real and genuine subjective satisfaction. In the process, the Court noted that in 1989 had not resorted to Section 17 and the acquisition proceedings were finalized after holding inquiry under Section 5-A and observed: ", " ", "\"We were informed by Senior Counsel for that even though in the earlier acquisition of 1987 pursuant to Section 4 notification, inquiry under Section 5-A was not dispensed with, by the time Section 6 notification came to be issued, Section 17(1) was resorted to as urgency had developed at least by the end of December 1989. If that be so, it was expected that pursuant to the requisition of 14-12-1989 by invoking urgency powers of , consequential notification under Section 4(1) would have seen the light of day at the earliest in connection with acquisition of the proposed 494.26 acres of land for the development of Sector 43 and other sectors. But curiously enough, nothing happened urgently and Section 4 notification which is impugned in the present case was issued on 5-1-1991. Thus despite the invocation of urgency by by its letter dated 14-12-1989, it appears that the State did not think the said proposal to be so urgent as to immediately respond and to issue notification under Section 4 read with Section 17 sub-section (4) till 5-1-1991. More than one year elapsed in the meantime. Why this delay took place and why the State did not think it fit to urgently respond to the proposal of , has remained a question mark for which there is no answer furnished by the respondent-authorities in the present cases and nothing is brought on the record by them to explain the delay. It has, therefore, necessarily to be presumed that despite the emergency powers of being invoked by , the State authorities in their wisdom did not think the matter to be so urgent as to immediately respond and promptly issue Section 4 notification read with Section 17(4) . ", " Even that apart, despite proposal to acquire this land was moved by as early as on 14-6-1988, and even thereafter when the request was sent in this communication on 14-12- ", "1989, the authorities did not think the situation to be so urgent as to respond quickly and could wait for more than one year. When the appellants in the writ petitions before raised their grievances regarding dispensing with inquiry under Section 5-A being not backed up by relevant evidence and the subjective satisfaction of the in this connection was brought in challenge, all that was stated by in its counter in para 26 was to the effect that the contents of paras 25 and 26 of the writ petition were denied and that the petitioners were not able to point out any lacunae in the proceedings under the Land Acquisition Act . The position was no better so far as the counter of the authorities was concerned. In para 24 of the counter before , all that was stated was that paras 25 and 26 of the writ petition were denied. When we turn to paras 25 and 26 of the writ petition, we find averments to the effect that the urgency of the acquisition was only for the purpose of depriving the petitioners of their rights to file objections under Section 5-A and their right to hold the possession till they got compensation for which the respondents had issued notification under Section 17(1) as well as notification Section 17(4) of the Act. But so far as the process of the acquisition was concerned, the respondents were taking their own time, which would be evident from the fact that the notification under Section 4 read with Section 17(4) was issued on 5-1-1991 but was published in the newspaper on 30-3- 1991, whereas the declaration under Section 6 of the Act was made on 7-1-1992 and that on the one hand, the respondents had deprived the petitioners of filing their objections under Section 5-A of the Act on the ground of urgency of acquisition, but on the other hand, they themselves had taken more than nine months in issuing the declaration under Section 6 of the said Act. This conduct of the respondents falsified their claim of urgency of acquisition. ", "... ... ... ", "The additional material which was produced before was by way of Annexures CA-3, CA-4 and CA-5. When we turn to these annexures, we find that AnnexureCA-3 is a letter dated 21-4-1990 written by the District Magistrate, Ghaziabad, to the Joint Secretary, , . It recites that on examination, it was found that the land was immediately required in public interest so that the development work in the said land could be carried out smoothly. What was the nature of urgency is not mentioned in the said letter. Therefore, the position remains as vague as it was earlier. When we turn to Annexure CA-4 which is dated 12-6-1990, we find that the District Magistrate, Ghaziabad wrote to the Joint Secretary, , State of U.P., that as to how many farmers were going to be affected by the proposed acquisition. It does not even whisper about the urgency of the situation which requires dispensing with Section 5-A inquiry. The last, Annexure CA-5 is the letter dated 14-12-1989 written by to the Land Acquisition Officer proposing urgent acquisition of the lands in question. We have already made a reference to the said letter. It recites that if immediate action for acquisition of the aforesaid lands adjacent to Sector 43 for development of which the acquisition was to be resorted to was not taken, then there was possibility of encroachment over the area cannot by any stretch of imagination be considered to be a germane ground for invoking urgency powers for dispensing with Section 5-A inquiry. Even if acquisition takes place urgently by dispensing with inquiry under Section 5-A and the possession is taken urgently after Section 6 notification within 15 days of issuance of notice under Section 9 sub-section (1), even then there is no guarantee that the acquired land would not be encroached upon by unruly persons. It is a law and order problem which has nothing to do with the acquisition and urgency for taking possession. Even that apart, it is easy to visualize that if objectors are heard in connection with Section 5-A inquiry they would be the best person to protect their properties against encroachers. Consequently, the ground put forward by in its written request dated 14-12-1989 for invoking urgency powers must be held to be totally irrelevant.\" ", "(emphasis supplied) ", "40. We may now notice some recent decisions. (supra), this Court interpreted Sections 5-A and 17 and observed: ", " \"32. A careful perusal of this provision which is an exception to the normal mode of acquisition contemplated under the Act shows that mere existence of urgency or unforeseen emergency though is a condition precedent for invoking Section 17(4) , that by itself is not sufficient to direct the dispensation of the Section 5-A inquiry. It requires an opinion to be formed by the concerned that along with the existence of such urgency or unforeseen emergency there is also a need for dispensing with Section 5-A inquiry which indicates that the legislature intended the appropriate to apply its mind before dispensing with Section 5-A inquiry. It also indicates that mere existence of an urgency under Section 17(1) or unforeseen emergency under Section 17(2) would not by itself be sufficient for dispensing with Section 5-A inquiry. If that was not the intention of the legislature then the latter part of sub-section (4) of Section 17 would not have been necessary and the legislature in Sections 17(1) and (2) itself could have incorporated that in such situation of existence of urgency or unforeseen emergency automatically Section 5-A inquiry will be dispensed with. But then that is not the language of the section which in our opinion requires the appropriate to further consider the need for dispensing with Section 5-A inquiry in spite of the existence of unforeseen emergency. ", " ", "33. An argument was sought to be advanced on behalf of the appellants that once the appropriate Government comes to the conclusion that there is an urgency or unforeseen emergency under Sections 17(1) and (2), the dispensation with inquiry under Section 5-A becomes automatic and the same can be done by a composite order meaning thereby that there is no need for the appropriate Government to separately apply its mind for any further emergency for dispensation with an inquiry under Section 5-A . We are unable to agree with the above argument because sub-section (4) of Section 17 itself indicates that the \"Government may direct that the p rovisions of Section 5-A shall not apply\" (emphasis supplied) which makes it clear that not in every case where the appropriate Government has come to the conclusion that there is urgency and under sub-section (1) or unforeseen emergency under sub- section (2) of Section 17 , the Government will ipso facto have to direct the dispensation of the inquiry.\" ", "(emphasis supplied) ", "41. , this Court approved quashing of the acquisition proceedings by and observed: ", " ", "\"16. Section 17 confers extraordinary powers on the authorities under which it can dispense with the normal procedure laid down under Section 5-A of the Act in exceptional case of urgency. Such powers cannot be lightly resorted to except in case of real urgency enabling the to take immediate possession of the land proposed to be acquired for public purpose. A public purpose, however laudable it may be, by itself is not sufficient to take aid of Section 17 to use this extraordinary power as use of such power deprives a landowner of his right in relation to immovable property to file objections for the proposed acquisition and it also dispenses with the inquiry under Section 5-A of the Act. The authority must have subjective satisfaction of the need for invoking urgency clause under Section 17 keeping in mind the nature of the public purpose, real urgency that the situation demands and the time factor i.e. whether taking possession of the property can wait for a minimum period within which the objections could be received from the landowners and the inquiry under Section 5- A of the Act could be completed. In other words, if power under Section 17 is not exercised, the very purpose for which the land is being acquired urgently would be frustrated or defeated. Normally urgency to acquire a land for public purpose does not arise suddenly or overnight but sometimes such urgency may arise unexpectedly, exceptionally or extraordinarily depending on situations such as due to earthquake, flood or some specific time-bound project where the delay is likely to render the purpose nugatory or infructuous. A citizen's property can be acquired in accordance with law but in the absence of real and genuine urgency, it may not be appropriate to deprive an aggrieved party of a fair and just opportunity of putting forth its objections for due consideration of the acquiring authority. While applying the urgency clause, the should indeed act with due care and responsibility. Invoking urgency clause cannot be a substitute or support for the laxity, lethargy or lack of care on the part of the administration.\" ", "(emphasis supplied) ", "42. (supra), the Court again dealt with the question whether the was justified in invoking Section 17(1) and 17(4) and dispensing with the inquiry under Section 5-A and held: ", " ", "\"53. Section 17 , no doubt, deals with special situations and exceptional circumstances covering cases of \"urgency\" and \"unforeseen emergency\". In case of \"urgency\" falling under sub-section (1) of Section 17 or of \"unforeseen emergency\" covered by sub-section (2) of Section 17 , special powers may be exercised by appropriate Government but as held by a three- Judge Bench decision before more than four decades in and reiterated by a three-Judge Bench decision in , even in such cases, inquiry and hearing of objections under Section 5-A cannot ipso facto be dispensed with unless a notification under sub-section (4) of Section 17 of the Act is issued. The legislative scheme is amply clear which merely enables the appropriate Government to issue such notification under sub-section (4) of Section 17 of the Act dispensing with inquiry under Section 5-A if the Government intends to exercise the said power. The use of the expression \"may\" in sub-section (4) of Section 17 leaves no room of doubt that it is a discretionary power of the government to direct that the provisions of Section 5-A would not apply to such cases covered by sub-section (1) or (2) of Section 17 of the Act. ", "54. In our opinion, therefore, the contention of learned counsel for the respondent authorities is not well founded and cannot be upheld that once a case is covered by sub-section (1) or (2) of Section 17 of the Act, sub-section (4) of Section 17 would necessarily apply and there is no question of holding inquiry or hearing objections under Section 5-A of the Act. Acceptance of such contention or upholding of this argument will make sub-section (4) of Section 17 totally otiose, redundant and nugatory.\" ", "(emphasis supplied) ", "43. , this Court reversed the judgment of and quashed the notification issued by the State Government under Section 4 read with Section 17(1) and 17(4) for the acquisition of land for construction of sewage treatment plant. After noticing the judgments in (supra), . (supra) and (supra), the Court observed: ", " ", "\"As indicated hereinabove in the various cases cited by Mr. and, in particular, the decision in case, in which reference has been made to the observations made by this Court in case, it has been emphasized that a right under Section 5-A is not merely statutory but also has the flavour of fundamental rights under Articles 14 and 19 of the Constitution. Such observations had been made in reference to an observation made in the earlier decision in case and keeping in mind the fact that right to property was no longer a fundamental right, an observation was made that even if the right to property was no longer a fundamental right, the observations relating to Article 14 would continue to apply in full force with regard to Section 5-A of the LA Act.\" ", " ", "44. . (supra), the two-Judge Bench considered the question whether the State Government was justified in invoking Section 17(4) for the acquisition of land for residential colony to be constructed by , Gorakhpur. The Court noted that notifications under Section 4(1) read with Section 17(1) and 17(4) were issued on November 23, 2003 and February 20, 2004 and declaration under Section 6 was issued on December 24, 2004, referred to 16 judicial precedents including those noticed hereinabove and held: ", "\"The exceptional and extraordinary power of doing away with an enquiry under Section 5-A in a case where possession of the land is required urgently or in an unforeseen emergency is provided in Section 17 of the Act. Such power is not a routine power and save circumstances warranting immediate possession it should not be lightly invoked. The guideline is inbuilt in Section 17 itself for exercise of the exceptional power in dispensing with enquiry under Section 5-A . Exceptional the power, the more circumspect the must be in its exercise. The obviously, therefore, has to apply its mind before it dispenses with enquiry under Section 5-A on the aspect whether the urgency is of such a nature that justifies elimination of summary enquiry under Section 5-A . A repetition of the statutory phrase in the notification that is satisfied that the land specified in the notification is urgently needed and the provision contained in Section 5-A shall not apply, though may initially raise a presumption in favour of the that prerequisite conditions for exercise of such power have been satisfied, but such presumption may be displaced by the circumstances themselves having no reasonable nexus with the purpose for which the power has been exercised. Upon challenge being made to the use of power under Section 17 , the must produce appropriate material before the that the opinion for dispensing with the enquiry under Section 5-A has been formed by the after due application of mind on the material placed before it. ", " ", "It is true that power conferred upon the under Section 17 is administrative and its opinion is entitled to due weight, but in a case where the opinion is formed regarding the urgency based on considerations not germane to the purpose, the judicial review of such administrative decision may become necessary. ", "As to in what circumstances the power of emergency can be invoked are specified in Section 17(2) but circumstances necessitating invocation of urgency under Section 17(1) are not stated in the provision itself. Generally speaking the development of an area (for residential purposes) or a planned development of city, takes many years if not decades and, therefore, there is no reason why summary enquiry as contemplated under Section 5-A may not be held and objections of landowners / persons interested may not be considered. In many cases, on general assumption likely delay in completion of enquiry under Section 5-A is set up as a reason for invocation of extraordinary power in dispensing with the enquiry little realizing that an important and valuable right of the person interested in the land is being taken away and with some effort enquiry could always be completed expeditiously. The special provision has been made in Section 17 to eliminate enquiry under Section 5-A in deserving and cases of real urgency. The Government has to apply its mind on the aspect that urgency is of such nature that necessitates dispensation of enquiry under Section 5-A . We have already noticed a few decisions of this Court viz. and . In this Court held that the decision in must be confined to the fact situation in those days when it was rendered and the two-Judge Bench could not have laid down a proposition contrary to the decision in . We agree. ", "As regards the issue whether pre-notification and post- notification delay would render the invocation of urgency power void, again the case law is not consistent. The view of this has differed on this aspect due to different fact situation prevailing in those cases. In our opinion such delay will have material bearing on the question of invocation of urgency power, particularly in a situation where no material has been placed by the appropriate before the justifying that urgency was of such nature that necessitated elimination of enquiry under Section 5-A .\" ", "(emphasis supplied) ", "45. In Civil Appeal No.2334 of 2011, ., decided on March 7, 2011, the acquisition of land for construction of district jails was quashed on the ground that there was no valid ground or justification to exclude the application of Section 5-A of the Act and it was observed: ", " ", "\"...Admittedly, the Land Acquisition Act , a pre-Constitutional legislation of colonial vintage is a drastic law, being expropriatory in nature as it confers on the a power which affects person's property right. Even though right to property is no longer fundamental and was never a natural right, and is acquired on a concession by the , it has to be accepted that without right to some property, other rights become illusory. This Court is considering these questions, especially, in the context of some recent trends in land acquisition. This Court is of the opinion that the concept of public purpose in land acquisition has to be viewed from an angle which is consistent with the concept of a welfare . ", "The concept of public purpose cannot remain static for all time to come. The concept, even though sought to be defined under Section 3(f) of the Act, is not capable of any precise definition. The said definition, having suffered several amendments, has assumed the character of an inclusive one. It must be accepted that in construing public purpose, a broad and overall view has to be taken and the focus must be on ensuring maximum benefit to the largest number of people. Any attempt by the to acquire land by promoting a pubic purpose to benefit a particular group of people or to serve any particular interest at the cost of the interest of a large section of people especially of the common people defeats the very concept of public purpose. Even though the concept of public purpose was introduced by pre-Constitutional legislation, its application must be consistent with the constitutional ethos and especially the chapter under Fundamental Rights and also the Directive Principles. In construing the concept of public purpose, the mandate of Article 13 of the Constitution that any pre-constitutional law cannot in any way take away or abridge rights conferred under Part-III must be kept in mind. By judicial interpretation the contents of these Part III rights are constantly expanded. The meaning of public purpose in acquisition of land must be judged on the touchstone of this expanded view of Part-III rights. The open-ended nature of our Constitution needs a harmonious reconciliation between various competing principles and the overhanging shadows of socio-economic reality in this country. ", "Therefore, the concept of public purpose on this broad horizon must also be read into the provisions of emergency power under Section 17 with the consequential dispensation of right of hearing under Section 5A of the said Act. The must examine these questions very carefully when little Indians lose their small property in the name of mindless acquisition at the instance of the . If public purpose can be satisfied by not rendering common man homeless and by exploring other avenues of acquisition, the , before sanctioning an acquisition, must in exercise of its power of judicial review, focus its attention on the concept of social and economic justice. While examining these questions of public importance, the especially the Higher , cannot afford to act as mere umpires. \" ", " ", "46. To be fair to the respondents, we may also notice the judgments in which the decision of the to invoke Section 17(1) and/or 17(4) has been upheld. (supra), this examined the justification of invoking Section 17(1) and 17(4) of the Act for the acquisition of over 662 Bighas land situated in village Mukarrabpur, District Meerut for providing housing accommodation. The two-Judge Bench distinguished the three-Judge Bench judgment in (supra), by observing that after that decision, population of India had gone up by hundreds of millions and it was no longer possible for the to take the view that the schemes of development of residential areas do not appear to demand such emergent action as to eliminate summary inquiries under Section 5-A of the Act. ", "47. (supra), this Court set aside the judgment of the majority of of , which had quashed the acquisition of 2570 bighas land by by invoking Sections 17(1) and 17(4) of the Act for the benefit of appellant and observed: ", " ", "\"The material placed before the disclosed that the found, on due verification, that there was an acute scarcity of land and there was heavy pressure for construction of houses for weaker sections and middle income group people; that had obtained a loan of Rs 16 crores under a time-bound programme to construct and utilise the said amount by March 31, 1983; that in the circumstances the was satisfied that unless possession was taken immediately, and permitted to proceed with the construction, the will not be able to adhere to the time-bound programme. In addition to the said fact, referred to certain other material also upon which the had formed the said satisfaction viz., that in view of the time-bound programme stipulated by the lender, , the had already appointed a large number of engineers and other subordinate staff for carrying out the said work and that holding an inquiry under Section 5-A would have resulted in uncalled for delay endangering the entire scheme and time- schedule of . If must be remembered that the satisfaction under Section 17(4) is a subjective one and that so long as there is material upon which the could have formed the said satisfaction fairly, the would not interfere nor would it examine the material as an appellate authority. This is the principle affirmed by decisions of this not under Section 17(4) but also generally with respect to subjective satisfaction.\" ", " ", "48. . (supra), upheld the acquisition of land under Sections 17 (1A) and 17(4) by observing that the problem of providing houses to the dalits, tribes and poor needed emergency measures and so long as the problem is not solved and the need of that segment of the society is not fulfilled, the urgency continues to subsist. ", " ", "49. , the Court upheld the acquisition of land for Calcutta Medical College under Section 17(1) and 17(4) and observed: ", "\"By no stretch of imagination, exercise of power for acquisition can be held to be mala fide, so long as the purpose of acquisition continues and as has already been stated, there existed emergency to acquire the premises in question. The premises which were under occupation of the students of , Calcutta, were obviously badly needed for the College and the appropriate authority having failed in their attempt earlier twice, the orders having been quashed by , had taken the third attempt of issuing notification under Sections 4(1) and 17(4) of the Act, such acquisition cannot be held to be mala fide and, therefore, the conclusion of in the impugned judgment that the acquisition is mala fide, must be set aside and we accordingly set aside the same.\" ", " ", "50. , the two- Judge Bench mainly considered the questions relating to constitutional validity of the Uttar Pradesh Act nos. 8 of 1974 and 5 of 1991 by which amendments were made in Section 17 of the Act. An ancillary question considered by the Court was whether the State Government was justified in invoking the urgency provision. The Bench referred to some of the precedents on the subject and refused to quash the acquisition by observing that the acquired land has already been utilized for construction of houses by third parties. ", " ", "51. , the acquisition of land for construction of Yamuna Expressway was upheld and challenge to the decision of to dispense with the inquiry was negatived by making the following observations: ", "\"We have deliberately quoted the above part of the judgment only to show the meticulous care taken by the in examining as to whether there was material before to dispense with the enquiry under Section 5- A of the Act. We are completely convinced that there was necessity in this considering the various reasons like enormousness of the , likelihood of the encroachments, number of appellants who would have required to be heard and the time taken for that purpose, and the fact that the had lingered already from 2001 till 2008. We do not see any reason why we should take a different view than what is taken by the .\" ", " ", "52. What is important to be noted is that in none of the aforementioned judgments, the was called upon to examine the legality and/or justification of the exercise of power under Section 17(1) and/or 17(4) for the acquisition of land for residential, commercial or industrial purpose. (supra), (supra) and . (supra), the invoking of urgency provision contained in Section 17(1) and exclusion of Section 5-A was approved by the keeping in view the acute problem of housing, which was perceived as a national problem and for the solution of which national housing policy was framed and the imperative of providing cheaper shelter to dalits, tribals and other disadvantaged sections of the society. (supra), the exercise of power under Section 17 was found to be justified because the land was already in the possession of the medical college and the earlier exercise undertaken by the for the acquisition of land got frustrated due to intervention of the . The factor, which influenced this to approve the judgment of the High in (supra) was that the acquired land had already been utilized for construction of houses by third parties to whom the plots had been allotted and they were not parties to the litigation. . (supra), the acquisition was upheld because the land was urgently needed for construction of Yamuna Expressway and by the time the matter was decided by this , huge amount had been spent on the project. As against this, the exercise of power under Section 17(1) and/or 17(4) for the acquisition of land for residential, industrial and commercial purposes, construction of sewage treatment plant and district jails was held to be legally impermissible in (supra), (supra), . (supra), (supra), (supra), (supra) and (supra). ", " ", "53. From the analysis of the relevant statutory provisions and interpretation thereof by this in different cases, the following principles can be culled out: ", " ", "(i) Eminent domain is a right inherent in every sovereign to take and appropriate property belonging to citizens for public use. To put it differently, the sovereign is entitled to reassert its dominion over any portion of the soil of the including private property without its owner's consent provided that such assertion is on account of public exigency and for public good. - ., AIR (1954) SC 119, AIR (1951) SC 41 and (1995) Supp. (1) SCC 596. ", "(ii) The legislations which provide for compulsory acquisition of private property by the fall in the category of expropriatory legislation and such legislation must be construed strictly - ; and v. of U.P., Civil Appeal No.2334 of 2011 decided on 7.3.2011. ", " ", "(iii) Though, in exercise of the power of eminent domain, the Government can acquire the private property for public purpose, it must be remembered that compulsory taking of one's property is a serious matter. If the property belongs to economically disadvantaged segment of the society or people suffering from other handicaps, then the is not only entitled but is duty bound to scrutinize the action/decision of the with greater vigilance, care and circumspection keeping in view the fact that the land owner is likely to become landless and deprived of the only source of his livelihood and/or shelter. ", " ", "(iv) The property of a citizen cannot be acquired by the and/or its agencies/instrumentalities without complying with the mandate of Sections 4 , 5-A and 6 of the Act. A public purpose, however, laudable it may be does not entitle the to invoke the urgency provisions because the same have the effect of depriving the owner of his right to property without being heard. Only in a case of real urgency, the can invoke the urgency provisions and dispense with the requirement of hearing the land owner or other interested persons. ", "(v) Section 17(1) read with Section 17(4) confers extraordinary power upon the to acquire private property without complying with the mandate of Section 5-A . These provisions can be invoked only when the purpose of acquisition cannot brook the delay of even few weeks or months. Therefore, before excluding the application of Section 5-A , the concerned authority must be fully satisfied that time of few weeks or months likely to be taken in conducting inquiry under Section 5-A will, in all probability, frustrate the public purpose for which land is proposed to be acquired. ", " ", "(vi) The satisfaction of the Government on the issue of urgency is subjective but is a condition precedent to the exercise of power under Section 17(1) and the same can be challenged on the ground that the purpose for which the private property is sought to be acquired is not a public purpose at all or that the exercise of power is vitiated due to mala fides or that the concerned authorities did not apply mind to the relevant factors and the records. ", " ", "(vii) The exercise of power by the Government under Section 17(1) does not necessarily result in exclusion of Section 5-A of the Act in terms of which any person interested in land can file objection and is entitled to be heard in support of his objection. The use of word \"may\" in sub- section (4) of Section 17 makes it clear that it merely enables the Government to direct that the provisions of Section 5-A would not apply to the cases covered under sub-section (1) or (2) of Section 17 . In other words, invoking of Section 17(4) is not a necessary concomitant of the exercise of power under Section 17(1) . ", " ", "(viii) The acquisition of land for residential, commercial, industrial or institutional purposes can be treated as an acquisition for public purposes within the meaning of Section 4 but that, by itself, does not justify the exercise of power by the under Section 17(1) and/or 17(4). The can take judicial notice of the fact that planning, execution and implementation of the schemes relating to development of residential, commercial, industrial or institutional areas usually take few years. ", "Therefore, the private property cannot be acquired for such purpose by invoking the urgency provision contained in Section 17(1) . In any case, exclusion of the rule of audi alteram partem embodied in Section 5-A (1) and (2) is not at all warranted in such matters. ", " ", "(ix) If land is acquired for the benefit of private persons, the Court should view the invoking of Section 17(1) and/or 17(4) with suspicion and carefully scrutinize the relevant record before adjudicating upon the legality of such acquisition. ", " ", "54. The stage is now set for consideration of the issue whether was justified in invoking the urgency provision contained in Section 17(1) and excluding the application of Section 5-A for the acquisition of land for planned industrial development of District . A recapitulation of the facts shows that upon receipt of proposal from , issued directions to the concerned authorities to take action for the acquisition of land in different villages including village Makora. The comments/certificate signed by three officers, which was submitted in the context of Government Order dated 21.12.2006 was accompanied by several documents including proposal for the acquisition of land, preliminary inquiry report submitted by the , Land Acquisition, copies of khasra khatauni and lay out plan, 10 per cent of the estimated compensation and a host of other documents. In the note dated nil jointly signed by Deputy Chief Executive Officer, Greater Noida, Collector, and four other officers/officials, the following factors were cited in justification of invoking the urgency provisions: ", " ", "(a) The area was notified under Uttar Pradesh Industrial Areas Development Act, 1976 for planned industrial development. ", "(b) If there is any delay in the acquisition of land then the same is likely to be encroached and that will adversely affect the concept of planned industrial development of the district. ", "(c) Large tracts of land of the nearby villages have already been acquired and in respect of some villages, the acquisition proceedings are under progress. ", " ", "(d) urgently requires land for overall development, i.e. construction of roads, laying of sewerages, providing electricity, etc. in the area. ", "(e) The development scheme has been duly approved by but the work has been stalled due to non- acquisition of land of village Makora. ", " ", "(f) Numerous reputed and leading industrial units of the country want to invest in the State of Uttar Pradesh and, therefore, it is extremely urgent and necessary that land is acquired immediately. ", " ", "(g) If land is not made available to the incoming leading and reputed industrial concerns of the country, then they will definitely establish their units in other States and if this happens, then it will adversely affect employment opportunities in the State and will also go against the investment policy of the Government. ", " ", "(h) If written/oral objections are invited from the farmers and are scrutinized, then it will take unprecedented long time and disposal thereof will hamper planned development of the area. ", "(i) As per the provisions of the Act, there shall be at least one year's time gap between publication of the notifications under Sections 4 and 17 and Section 6 . ", " ", "55. In our view, the above noted factors do not furnish legally acceptable justification for the exercise of power by under Section 17(1) because the acquisition is primarily meant to cater private interest in the name of industrial development of the district. It is neither the pleaded case of the respondents nor any evidence has been produced before the Court to show that and/or agencies/instrumentalities of the are intending to establish industrial units on the acquired land either by itself or through its agencies/instrumentalities. The respondents have justified the invoking of urgency provisions by making assertions, which are usually made in such cases by the executive authorities i.e. the inflow of funds in the in the form of investment by private entrepreneurs and availability of larger employment opportunities to the people of the area. However, we do not find any plausible reason to accept this tailor-made justification for approving the impugned action which has resulted in depriving the appellants' of their constitutional right to property. Even if planned industrial development of the district is treated as public purpose within the meaning of Section 4 , there was no urgency which could justify the exercise of power by under Section 17(1) and 17(4) . The objective of industrial development of an area cannot be achieved by pressing some buttons on computer screen. It needs lot of deliberations and planning keeping in view various scientific and technical parameters and environmental concerns. The private entrepreneurs, who are desirous of making investment in the , take their own time in setting up the industrial units. Usually, and its agencies/instrumentalities would give them two to three years' to put up their factories, establishments etc. Therefore, time required for ensuring compliance of the provisions contained in Section 5-A cannot, by any stretch of imagination, be portrayed as delay which will frustrate the purpose of acquisition. In this context, it is apposite to note that the time limit for filing objection under Section 5-A (1) is only 30 days from the date of publication of the notification under Section 4(1) . Of course, in terms of sub-section (2), the Collector is required to give opportunity of hearing to the objector and submit report to the after making such further inquiry, as he thinks necessary. This procedure is likely to consume some time, but as has been well said, \"Principles of natural justice are to some minds burdensome but this price-a small price indeed-has to be paid if we desire a society governed by the rule of law.\" ", " ", "56. In this case, sent proposal some time in 2006. The authorities up to the level of the Commissioner completed the exercise of survey and preparation of documents by the end of December, 2006 but it took one year and almost three months to to issue notification under Section 4 read with Section 17(1) and 17(4) . If this much time was consumed between the receipt of proposal for the acquisition of land and issue of notification, it is not possible to accept the argument that four to five weeks within which the objections could be filed under sub-section (1) of Section 5-A and the time spent by the Collector in making inquiry under sub-section (2) of Section 5-A would have defeated the object of acquisition. ", " ", "57. The apprehension of the respondents that delay in the acquisition of land will lead to enormous encroachment is totally unfounded. It is beyond the comprehension of any person of ordinary prudence to think that the land owners would encroach their own land with a view to frustrate the concept of planned industrial development of the district. 58 The perception of the respondents that there should be atleast one year's time gap between the issue of notifications under Sections 4 and 6 is clearly misconceived. The time limit of one year specified in clause (ii)) of the proviso to Section 6(1) is the outer limit for issue of declaration. This necessarily means that can complete the exercise under Sections 5-A and 6 in a shorter period. ", " ", "59. The only possible conclusion which can be drawn from the above discussion is that there was no real and substantive urgency which could justify invoking of the urgency provision under Section 17(1) and in any case, there was no warrant to exclude the application of Section 5-A which, as mentioned above, represent the statutory embodiment of the rule of . ", " ", "60. We also find merit in the appellants' plea that the acquisition of their land is vitiated due to violation of the doctrine of equality enshrined in Article 14 of the Constitution. A reading of the survey report shows that the committee constituted by had recommended release of land measuring 18.9725 hectares. Many parcels of land were released from acquisition because the land owners had already raised constructions and were using the same as dwelling units. A large chunk of land measuring 4.3840 hectares was not acquired apparently because the same belong to an ex-member of the legislative assembly. The appellants had also raised constructions on their land and were using the same for residential and agricultural purposes. Why their land was not left out from acquisition has not been explained in the counter affidavit filed by the respondents. should have treated this as sufficient for recording a finding that the respondents had adopted the policy of pick and choose in acquiring some parcels of land and this amounted to violation of Article 14 of the Constitution. Indeed it has not been pleaded by the respondents that the appellants cannot invoke the doctrine of equality because the other parcels of land were illegally left out from acquisition. ", "61. The argument of the learned senior counsel for the respondents that the may not annul the impugned acquisition because land of other villages had already been acquired and other land owners of village Makora have not come forward to challenge the acquisition of their land cannot be entertained and the cannot refuse to protect the legal and constitutional rights of the appellants' merely because the others have not come forward to challenge the illegitimate exercise of power by . It is quite possible that others may have, due to sheer poverty, ignorance and similar handicaps not been able to avail legal remedies for protection of their rights, but that cannot be made basis to deny what is due to the appellants. ", "62. In the result, the appeal is allowed. The impugned order is set aside and the writ petition filed by the appellants is allowed. Respondent No.1 is directed to pay cost of Rs. 5,00,000/- to the appellants for forcing unwarranted litigation on them. It is, however, made clear that the respondents shall be free to proceed from the stage of Section 4 notification and take appropriate action after complying with Section 5-A(1) and (2) of the Act. It is needless to say if the appellants' feel aggrieved by the fresh exercise undertaken by then they shall be free to avail appropriate legal remedy. ", " ", ".............................J. ", "[G.S. Singhvi] ..............................J. ", "[Asok Kumar Ganguly] New Delhi; ", "April 15, 2011."], "relevant_candidates": ["0000004354", "0000033396", "0000037963", "0000165105", "0000202223", "0000246911", "0000308632", "0000354241", "0000469498", "0000610740", "0000639803", "0000640323", "0000689891", "0000705558", "0000763510", "0000768110", "0000817954", "0000859161", "0000876346", "0001003330", "0001119469", "0001128835", "0001273595", "0001296240", "0001330367", "0001481537", "0001515136", "0001564044", "0001704181", "0001764789", "0001766147", "0001798267", "0001831036", "0001880952", "0001929828", "0001963266", "0001992267", "0018928039", "0035662889", "0064823282", "0160705552"]} {"id": "0001010255", "text": ["CASE NO.: Appeal (civil) 14152 of 1996 PETITIONER: STATE OF U.P. RESPONDENT: ALLIED CONSTRUCTIONS DATE OF JUDGMENT: 31/07/2003 BENCH: V.N. KHARE CJ & K.G. BALAKRISHNAN & S.B. SINHA JUDGMENT: ", "JUDGMENT 2003 Supp(2) SCR 55 The following Order of the Court was delivered : ", "Under a contract entered into by and between the appellant and the respondent, the respondent undertook construction of bridge-cum-fall at Munda Khera Scape at the estimated cost of Rs. 37.2 lakhs. While the work was in progress, the work area was flooded in the night of August 25 and 26, 1991. ", "The respondent-contractor herein filed a claim on account of loss sustained by him due to flooding of the work area. Ultimately, the matter was referred to an arbitrator. The arbitrator gave an award for payment of a sum of Rs. 12,55,365 together with interest at the rate of 18 per cent from 1.11.1991 till the date of the award and 6 per cent thereafter. The respondent filed the award for being made rule of the . The appellant herein filed a petition, inter alia, on the ground that the arbitrator has misconducted the proceedings, inasmuch as the force majeure contained in Clause 47 disentitled the respondent from making any claim which was on account of unprecedented rain. The said objection was rejected and the award was made rule of the . The appellant thereafter filed a first appeal from order before the High and the same was dismissed. It is against the said judgment, the appellant is in appeal before us. ", "Learned counsel appearing for the appellant reiterated his argument raised before . In fact, his argument based on force majeure is that because of unprecendented rain the liability of loss cannot be thrust upon the appellant. We do not find any merit in this contention. Clause 47 of the Agreement runs as under: ", "\"Neither party shall be liable to the other for any loss or damage occasioned by or arising out of act of God, such as unprecedented flood, volcanic eruption, earthquake or other convulsion of nature and other acts such as but not restricted to general strikes, invasion, the act of foreign countries; hostilities or warlike operations before or after declaration of war; rebellion, military or usurped power which prevent performance of the contract and which could not have been foreseen or avoided by a prudent person.\" ", "A perusal of Clause 47 reproduced above shows that it protected the State from liability and damage occasioned by unprecedented flood which could not have been foreseen or avoided as a prudent person. The appellant herein did not lead any evidence before the arbitrator that the rain as a result of which the loss was sustained by the respondent was unprecedented and in fact it was an act of God. In absence of such an evidence, the arbitrator as well as has recorded a finding of fact that the flood which has caused loss to the respondent was not due to the unprecedented rain and, therefore, Clause 47 of the Agreement was not attracted. ", "Any award made by an arbitrator can be set aside only if one or the other term specified in Sections 30 and 33 of the Arbitration Act, 1940 is attracted. It is not a case where it can be said that the arbitrator has misconducted the proceedings. It was within his jurisdiction to interpret Clause 47 of the Agreement having regard to the fact-situation obtaining therein. It is submitted that an award made by an arbitrator may be wrong either on law or on fact and error of law on the face of it could not nullify an award. The award is a speaking one. The arbitrator has assigned sufficient and cogent reasons in support thereof. Interpretation of a contract, it is trite, is a matter for arbitrator to determine (see , AIR (1989) SC 890). Section 30 of the Arbitration Act, 1940 providing for setting aside an award is restrictive in its operation. Unless one or the other condition contained in Section 30 is satisfied, an award cannot be set aside. The arbitrator is a Judge chosen by the parties and his decision is final. The is precluded from reappraising the evidence. Even in a case where the award contains reasons, the interference therewith would still be not available within the jurisdiction of the unless, of course, the reasons are totally perverse or the judgment is based on a wrong proposition of law. An error apparent on the face of the records would not imply closer scrutiny of the merits of documents and materials on record. Once it is found that the view of the arbitrator is a plausible one, the will refrain itself from interfering [see ., 3 SCC 397 and , 6 SCC 347]. ", "For that reason, we are of the view that the appeal has no merit and must fail. However, the parties are agreed that from the date of filing of the claim till the date of award the interest chargeable would be at the rate of 1? per cent in place of 18 per cent. For that reason, the award and judgment under challenge stand modified to that extent. ", "The appeal is disposed of in the aforesaid terms. There shall be no order as to costs."], "relevant_candidates": ["0000588099", "0001341010", "0001483262"]} {"id": "0001029775", "text": ["JUDGMENT , J. ", "1. These criminal appeals by special leave are by , alias Sri Narain and respectively from the. Judgment of by which the order of acquittal passed by the learned Judge, Kanpur is set aside and they have been convicted under Section 302 r/w Section 34, I.P.C . and sentenced to imprisonment for life. , and alias Shri Narain were accused Nos. 1 to 3 respectively in . The charge against them was that they had, in furtherance of their common intention, committed the murder of one at about 8.10 P.M on April 23, 1964 in front of the shop of a milk vendor, Chhunno, situate in Lathi Mohal P.S. Collectorganj in the City of Kanpur. ", "2. The deceased was about 22 years old and was the son of one . had two shops-one in the Generalganj Bazar bearing the name of Raj Kishore. The main business of sale and purchase was carried on in that shop. The other shop was in the Panch Kucha lane and bore the name of Dalai. This shop was mainly concerned with the maintenance of and account books. , P.W. 1 was the Munim of . ", "3. About 5 or 6 days prior to the incident the accused and were gambling in the Ahata of Sawai. , the deceased, who happened to pass by the place reprimanded them for these activities. This was not liked by and who gave a threat to . reported the matter to his father who, thereupon, instructed his employees that one or the other of them should keep company whenever he was going away from the house or the shop. ", "4. Accordingly, on the night of April 23, 1964 after closing the shop at 8.00 P.M., which was the time for all shops to close, , and started for the latter's house by the aforesaid Generalganj Bazar Street. That street appears to be a one way street and no conveyances, not even Rickshas, were allowed to ply in that street. When the two of them reached near the shop of , the milk vendor, they noticed that the three accused were near the aforesaid shop. On seeing them, they came up, addressed reminding him about the superior airs about gambling which he displayed a few days ago and told him that he now wanted to settle scores with him. retorted that he had seen many a person like whereupon asked the other two accused to finish . Thereupon and each whipped out a knife and attacked in the back. made an attempt to run but caught hold of him by his hand. fell on the ground there and became unconscious. The incident attracted a number of persons and as the miscreants were running away, shouts were uttered and they were chased by , , . P.W. 2, , P.W. 5 and one all of whom caught before he had run five or six paces while the other two accused and ran away and disappeared. had still the knife in his hand. He was disarmed by , . A large crowd had gathered on the spot and just when the captors of were thinking of taking him to the Police Station, . the brother of , came on the scene. He was coming from the shop of one in the same street after closing the shop at about 8.00 P.M. On the way he had seen a crowd and hastened to the spot. From some distance he first saw that , and two or three other persons had caught hold of and after advancing further he saw his brother lying on the road with injuries. shortly told him that had been stabbed by two or three persons and. that they were taking to the Police Station. He left it to to remove to the hospital. The captors of then took him to the Police Station of Collectorganj. The Sub-Inspector , 7 was present in the Police Station along with Head Constable , 0 who was the Head Moharrir. The later recorded 's statement as per Ext. K.I. was taken into custody. A seizure memo was made of the blood stained knife as per Ext. K. 2. It was found that there were blood stains on the shirt of and so the shirt was also seized under the Memo Ext. K. 3. The knife and shirt are Exts. 1 and 2 in the case. These were sent to the Chemical Analyser in due course who certified that whereas there was human blood on the shirt, the blood on the knife had disintegrated. ", "5. While was recording the complaint of , a telephone message was received at 20.35 hours i. e. 8.35 P.M from Sub-Inspector , P.W. 8 who was in-charge of . The message was that a man was lying injured at the crossing of . informed that a report in respect of the occurrence had been already lodged and necessary action was being taken. The necessary entries were made with regard to the progress of the investigation in the General Diary of the Police Station and went on duty at 9.00 P.M-his place being taken by Head Constable . P.W. 13. ", "6. The source of information in the Control Room that a man was lying near the gate of was . P.W. 12. is a local Advocate and has his house only 40 or 50 paces from the shop of the milk vendor. On being informed by somebody that a man was lying injured, he went to the place and saw the injured person. Nobody gave him any in formation as to who he was and what had happened and so he went back to his house and at 8.34 P.M telephoned to the Control Room informing it that a man was lying injured near the gate of and a patrol car should be sent. It was this message from which was picked by in the Control Room. On receiving that message, he sent a wireless message to patrol car No. 2 in-charge of , P.W. 9 and at the same time also sent the message to within whose jurisdiction the man was lying. That is how at 8.35 P.M. , P.W, 10 received the message from the Control Room which was duly recorded by him in the General Diary of the Station. ", "7. On receiving the message from the Control Room , P.W. 9 proceeded to the locality indicated. He reached the place at about 8.49 P.M. The man who was standing there said that he was the brother of the injured person (obviously referring to , P.W. 7) and gave the name and address of the injured. He then put the injured in the car. An Officer of and some Constables had already come there. The is under the Collectorganj Police Station. He, therefore, took Constable of that along with him in the car and though the brother of the injured wanted to go in the car to the hospital, he could not be accommodated. He left the scene of offence at about 8.54 P.M. and reached with the injured at about 8.59 P.M. Dr. , P.W. 11 who was in-charge at once examined the injured, person and found that he was, dead. He then informed the Police Station Kot-wali about his death. Message about death was transmitted from the Kotwali Police Station to the Collectorganj Police Station at about 11.30 P.M. and the same was noted by the Head Mohrrir Head Constable , P.W. 13. ", "8. In the meantime , P.W. 17 after finishing part of the investigation of the offence, which had been registered as an offence under Section 307 I.P.C. at the Police Station, had gone to the scene of occurrence for further investigation. He recovered the blood stained earth from the place where had fallen and recorded also the statements of eye witnesses who had accompanied him from the Police Station. While the investigation was proceeding, the officer received intimation from his Police Station that . had died. So he ordered , P.W. 16 the Officer incharge of Sirki Outpost, who was there at the place since about 8.30 P.M to proceed to the hospital to prepare the inquest report. He had been instructed to take the duplicate copy of the complaint from the complaint Raja Ram P.W. 1 for the purposes of the inquest. went to the hospital at about 12.30 a.m. but there was a delay in obtaining the body in. the hospital. He could actually start his inquest panchnama at about 2. O'clock. ", "9. In the meantime , P.W. 17 continued his investigation at the scene of offence. He started searching for and . The house of which was close to the shop of , his uncle was searched at about 1.00 or 1.30 a. m. but he was not found. Thereafter he went to Canal road in search of . His house was searched but was not found. The search continued till about 10. O' clock on 24-4-1964 but both and were found to have absconded. After returning to the Police Station at 10.00 A. M. he recorded the statement of and sent him to the Jail : Doctor as there were two small injuries on the little finger of the right hand. The search of and was fruitless and so he reported for proceeding against the accused under Sections 87 and 88 of the Criminal Procedure Code. Thereafter Surrendered before a court in Unnao.on 28th April 64 and since he Claimed. to be identified' in an identiflcation; parade at Unnao, a test identification parade was held in the District. Jail Unnao on 11th. June. 1964.At. this; identification parade, he was correctly picked out by , P.W. X and , P.W. 2. , P.W. 5 did not pick him out. As for , he surrendered in the court at. Lakhimpur Kheri on 4th May, 1964. ", "10. On being charged for the murder of the accused pleaded not guilty. The case of in his statement under Section 342 Criminal Procedure Code was that on the evening in question at about 7.45 p.m. he was returning home from a shop in Collectorganj and when he reached the turning of Jagannath Lane, he saw two or three unknown persons attacking with knives. As he knew , he went for his rescue but the assailants. turned on him and he received injuries; on both his hands. So leaving at the place, he rushed to the . Station Collectorganj to give information. He asked the officers to take, down his information but they said that they would make the investigation first and then record his statement. He further stated that he, had been made to sit there in the Station till about midnight and the officers asked him to give evidence against two or three persons whose names he could not recall at the time. He refused to oblige saying that though he did not know the names of the assailants, he could recognise them if shown to him. Because of this obstinacy on his part, he alleged, .he had been falsely implicated by the police. He admitted that article No. 2 - the shirt, which he was wearing at the time, contained blood stains and was seized. He, however, denied that the knife Ext. 1 had been snatched from him by P.W. 1 Raja, . Though had stated that he received injuries on both the hands, it is now established that he had only two wounds on the inner surface of the right hand little finger only - one being a slight lacerated wound and the other an incised wound above it. In the certificate given by the Doctor, however, an inadvertent mistake crept in to the effect that these two wounds were on the left hand little finger. In fact that should be the right hand little finger. The injuries were one above the other on one finger of one hand, that is the right hand and there was no injury on the left hand. We may mention here only that both the courts agree that these injuries on the little finger sustained by must have been , caused in the act of inflicting injuries on another person with a knife and not in warding off knife blows by a third person. had deliberately told a: falsehood that he had received injuries on both hands taking the cue from the error made in the medical certificate with a view to suggest that the injuries on both hands were more likely to be caused when he was warding off an assault on him. ", "11. The other two accused namely and denied participation in the incident and alleged that they had been falsely implicated because of enimity with the police. ", "12. On behalf of . D.W. 1 was examined as a witness to suggest that the story told by in court was probable. ", "13. It is not in dispute that deceased was attacked with knives at about 8.10 p.m. and he had fallen on the road hardly two or three paces away from the shop of , the milk vendor. There is no dispute also that whosoever be the assailants, it was a clear case of murder. The learned Sessions Judge on a consideration of the evidence recorded the following findings: ", "(1) The motive alleged by the prosecution was substantially proved; ", "(2) The three eye-witnesses examined in the case namely , P.W. 1, . P.W. 2 and , P.W. 5 were not reliable witnesses, since it was very probable that they were not at the scene of offence at all to witness the assault. ", "(3) , P.W. 7 must not have reached the place of occurrence till after had been removed to the hospital. ", "(4) That the story of may not be entirely trustworthy. However his case that he had by himself gone to the Police Station could not be ruled out. The story of the prosecution that he had been caught by the alleged witnesses and others did not appear to be true. ", "(5) The F.I.R. must not have been recorded at 8.25 p.m. as alleged by the prosecution. The entries made in the General Diary from 8.25 p.m. till the next morning may not have been made that night only. They might have been made on the next day as suggested by the defence. ", "(6) That both and had absconded after the incident. ", "(7) There was a great possibility that these very accused might have been involved in the affair, but, however strong the suspicion, there could be no conviction. ", "14. Accordingly, the learned Judge gave the benefit of doubt to the accused and acquitted them. ", "15. Aggrieved by the order of acquittal the went in appeal to . Being an appeal against acquittal, approached the findings of the Sessions Judge in the light of the principles laid down by in the case of (2) and by this court in and other cases. Since was of the opinion that the accused were wrongly acquitted, it recorded from place to place in the judgment how the learned Sessions Judge was palpably wrong in the consideration of the evidence. Finally observed, \"On a consideration of the evidence on record in the light of the aforesaid principles we are satisfied that the grounds on which the learned Sessions Judge acquitted the respondents (accused) were not good and reasonable, and the order of acquittal was against the weight of evidence. The learned Sessions Judge did not approach the case in the correct perspective. Before rejecting the testimony of the eve witnesses the learned Sessions Judge should have considered the question as to whether the prosecution case as to the pursuit given to the miscreants and as to the apprehension of respondent on the spot and as to his being taken in custody to the Police Station was established or not. The one grave error which he committed was that he first recorded a finding on the question as to whether the eye witnesses could have been present at the scene of occurrence or not. Having once come to a finding that they could not have been present at the scene of occurrence he could not have recorded a finding in favour of the prosecution on the question as to whether respondent was apprehended on the spot or not. The prosecution evidence should not have been considered by the learned Sessions Judge in isolated parts and a finding on the question as to whether the eye witness account was trustworthy or not should have been recorded after taking into consideration the prosecution evidence as a whole.\" ", "16. After hearing counsel on behalf of the accused and the and on a perusal of the evidence to which our attention was invited,, we have come to the conclusion that the above criticism of was fully justified. We will only add that the learned Judge failed to see the wood for the trees. ", "17. Learned Counsel for the appellants put before us in the fore-front an argument which seems to have impressed the learned Sessions Judge. The argument was that the evidence of the Advocate Mr. , P.W. 12 was the touch stone for determining. whether the prosecution case was true or not. It was submitted that Mr. was a disinterested witness and if his evidence is accepted it would be clearly established that neither , P.W. 7 nor , P.W. 1 could have been there before 8.34 P.M and hence the story now told by the prosecution that the first information had been recorded at the instance of , P.W. 1 at 8.25 P.M is demonstrably false. The argument proceeds this way (1) If , P.W. 7. had arrived at the scene within a minute or two of the stabbing and had seen and the other captors taking , it would be expected that would remain near the fallen , in which case Mr. would not have failed to learn who the deceased was, who were his assailants and as to whether one of them was caught and taken to the Police Station. And since Mr. . even after enquiry, did not learn about any of these things, it would be clearly established that , P.W. 7 must not have come there at all till was removed from the place; (2) and if , P.W. 7 was not there at all, the story told by , P.W. 1 that he had met before leaving the scene of offence was false; (3) That in all probability , P.W. 1 was also not there at the time of the incident because if he had been there and was not there, he would not have left the place leaving unattended. He would have been more anxious to take to the hospital than to take to the Police Station. There were other captors of and he could have requested the captors to take to the Police Station and remained behind to make arrangements for removing to the hospital. The very fact that he was not there when actually the police van came to take away would go to show that , P.W. 1 must not have come to the scene of offence at all at any time. Therefore, the case now put forward by the prosecution that he had , gone to the Police Station with and had filed the first information at 8.25 p.m. is false. 18. The whole argument proceeds on the assumption that if , P.W. 7 were on the scene of offence. Mr. Advocate, would not have failed to get all the particulars, since Mr. had made enquiries with regard to the person whom he had seen fallen on the ground. That assumption, however, cannot be made, in the circumstances of the case. It is an' undisputed fact that the stabbing incident could not have taken place later than 8.10 p.m. The evidence of , P.W. 1 and the other two eye witnesses is that immediately after the stabbing and the falling down of , the miscreants were chased and accused . was caught with the knife in his hand. They lost no time in taking him to the Police Station which would mean that within two minutes of the stabbing and the other captors of marched him to the Police Station. According to and the eye witnesses, arrived just when they were taking him away. did not waste time. He merely told to attend to his brother saying that he was taking to the Police Station. That is also the evidence of , P.W. 5 and , P.W. 2. The last witness does not say in so many words that the man to whom spoke was but he says that a person had come at that time and told the person that he should look after the boy and that he was going to the Police. Station. So if this evidence is believed, then it is clear that , P.W. 7, had come on the scene of offence within a couple of minutes of the stabbing. That was also not unlikely because 's evidence shows that after closing the shop at 8.00 p.m. he was coming that way to go to his house and the, scene of offence was on the way not far from the shop. When he saw a crowd . and heard about stabbing, he hastened to the spot and met just when he was preparing to go to the Police Station. The evidence of the prosecution, therefore, goes to show that was there almost immediately after the stabbing and the captors including departed thereafter. Mr. 's visit to the scene was much later. Mr. says that at about 8.15 p.m. some body told him when he was in his house that some body had fallen on the road with injuries. He therefore, went there and found that a boy was lying in the middle of the road in front of the shop of , the milk vendor. It is, therefore, clear from his evidence that Mr. had come to the place after had gone away from the place and, therefore, he could not have seen the apprehension of and his being marched to the Police Station. There is further indication in his evidence that at least 10 to 15 minutes must have passed between the stabbing and the actual arrival of Mr. on the scene. The time, can be fairly fixed from his own evidence. After returning to his house, Mr. had telephoned to the Control Room and that was at 8.34 p.m. There is record about this at the Control Room. The house of Mr. is hardly about 40 to 50 paces from the scene of offence. He further says that he was at the scene of offence for about five or six minutes. Calculating back, therefore, it is clear that Mr. must have come to the scene of offence not much earlier than 8.25 p.m. In other words, between the stabbing and the coming of the Advocate, there was a Hap of nearly 10 to 15 minutes. In the meantime a big crowd had gathered. According to the prosecution witnesses it was a crowd of about 50 or 100 people. Mr. says that there was a crowd when he went there but he says that it was a crowd of about 10 to 15 people. It is not disputed that this is a busy street and that was the time when shopkeepers were closing their shops and going away. It may be, therefore, taken that there must have been a fairly big crowd when Mr. arrived at the scene. It is not the case that Mr. had come there in his court robes or that he was in any way distinguishable from any other member of the crowd. Nor can it be said that Mr. had taken the trouble to make any serious enquiry, because if he were serious about it he could have made enquiries with the milk vendor who was admittedly in his shop and the man had fallen only two or three paces away in front of 's shop. was a man known to Mr. . But Mr. had not taken the trouble to question . It would, therefore, appear that Mr. must have casually asked the first man he met in the crowd as to who the boy was and he must not have received any answer. In fact he admits that when he put the first question, he did not receive any answer and so he did not make any further enquiry. One does not know with whom he made the enquiry. He might be just a passerby who, like the other members of the crowd, might have had only a casual interest. It is not also the case that Mr. knew or knew Mr. . For aught we know, may have been there somewhere in the crowd not necessarily close to his brother. It would be difficult to conceive that who was unaccompanied by friends at the time and who was anxious about removing his brother to the hospital would be fixed to the side of all the time. Even to get help he might have to leave the side of his brother. Assuming further that he was near enough to hear the question of Mr. , he might not have cared to answer him because to him he was just another passerby whose idle curiosity he may have ignored to satisfy through sheer tiresomeness. Further had no inducement to make himself conspicuous before the arrival of the police by declaring that he was the brother of the deceased, because he was now in ah area where his brother had been stabbed and some of the miscreants were still at large. In this state of things the assumption made in the argument that if was there Mr. would not have failed to know better particulars about the boy, is not a sound assumption. As against this, we have a large volume of evidence to show that . P.W. 7 was at the spot. We have already referred to the evidence of , P.W. 1, , P.W. 2 and , P.W. 5. Their evidence as also the evidence of clearly shows that he was at the scene of occurrence within a couple of minutes of the stabbing. Reference was made to the fact that 's name was not referred to in the First Information Report where , P.W. 1 merely stated \"people are sending him to the hospital\". It was contended that if was there, P.W. 1 would have said that was arranging to send him to the hospital and not that \"people are sending him to the hospital\". We do not think that by his particular statement wanted to exclude . It is not the case of that some un-known man in the crowd was making arrangements to take to the hospital. And since he made a definite assertion at the Police Station that people were sending him to the hospital, it only shows that was perfectly confident that arrangements were being made to send to the hospital. He could get this confidence only because ' there was present at the scene of offence. Moreover, the Investigating Officer had recorded more detailed statements of , P.W. 1, , P.W. 2 and , P.W. 5 that same night at about 10.00 P.M. and it is not elicited from their cross-examination by reference to the police statements that they had failed to mention the presence of at the time of the departure from the scene of offence at 8.10 P.M. Then again there is the evidence of Sub Inspector , P.W. 16 who says that when he came to the scene at about 8.30 P.M he had met at the place. Later, the Officer in-charge of reached the place at 8.49 P.M. and he met there and it was who furnished him the name and address of . Against all this evidence which establishes 's. presence, at the; scene of occurrence soon after the stabbing, it will be extremely improper to hold that he must not have been present there merely because Mr. , Advocate, did not receive any answer to the casual question asked by him to ascertain who that boy was. ", "19. And if was there as alleged by the prosecution, there was no difficulty in proceeding to the Police Station with leaving at the scene to make arrangements for removing to the hospital. Then again if , P.W. 1 and the other captors of proceeded to the Police Station from the scene of occurrence soon after 8.10 P.M., there is no dispute that they would be in the Police Station at about 8.25 P.M. for recording the complaint. ", "20. The. defence suggestion before the learned Sessions Judge was that till the inquest papers were prepared between 2.30.& 3.30 A.M., on the same night, had no idea of this offence at all and that the wheels of investigation started moving only thereafter. The allegation is that after the Investigating Officer found that an offence had been committed in a particular locality, he decided to falsely im plicate the accused because of some grudge against . It is not the case that or the other two eye witnesses, who were perfect strangers, had any interest in implicating falsely any of the accused in this case. But the suggestion is that the Investigating Officer had a grudge against and he, therefore, pressurised and the other two witnesses to give false evidence and it was only after he was successful in doing so that he obtained the F.I.R. from on the morning of 24-4-1964. This suggestion on behalf of the defence seems to have very much impressed the learned Sessions Judge. There were serious difficulties, however, in accepting such a defence. The First Information Report was stated to have been recorded at 8.25 P.M. The seizure memo of the knife and the shirt had been made soon after and regular entries had been posted with regard to the same in the General Diary maintained at in accordance with the regulations. Apart from entries with regard to the investigation of the offence that same night there are also other entries made in the General Diary in serial order which had nothing to do with this offence. These entries in the General Diary were fatal to the defence suggestion. The learned Sessions Judge however, brushed aside the difficulty with the facile observation that all those entries which are shown to have been made in the night in the General Diary must not have been made at all at the time and , that; after keeping some space blank in the General Diary, those entries must have, been made on the next day. after the investigating Officer had fixed up . everything. In our opinion the learned Sessions Judge was not justified in making this criticism. He has practically charged with fabricating an official Register. The General Diary at is maintained under U.P. Police Regulations. Regulation No. 294 prescribes that the General Diary . shall be written in duplicate under the superintendence of the officer-in-charge of the Station who is responsible for the entries made in it. The regulation further says that the original is to be sent to the Superintendent or Assistant or Deputy Superintendent-in-charge of the sub-division. The diary should be a complete but brief record of the proceedings of the police and of occurrences reported to them or of which they have obtained information.1 In other words, the General Diary, is to be kept from minute to minute and from hour to hour and a charge of this nature that the Officer-in-charge of the Station had not written up the General Diary in accordance with the regulation would be indeed a very serious charge which may not be countenanced unless established by strong evidence. As a matter of fact though the Officer-in-charge of . P.W. 17 and the two Head Moharrirs who were incharge of the General Diary on that night namely and had been examined in the case, there is no cross-examination of these witnesses on the charge now made. The entries till 9.00 P.M. relative to the present offence had been made by Head Constable , P.W. 10. He was off duty at 9.00 P.M. and his place was taken by Head Constable Sheodeo Prasad P.W. 13. It will be wrong to assume that these two Head Constables who were in-charge of the General Diary would keep for no known reason blank spaces in the Diary for being filled up at some future time. It was not also explained why at all these Officers would decide to leave blank spaces in the General Diary at 8.25 P.M. The defence that did not know about this offence till 3.30 A.M. would postulate that no body interested in filing a complaint with regard to this offence had approached during the night. The only intimation which had received in connection with this offence was-one received from the Control Room at 8.35 P.M. That intimation conveyed nothing more than that, a per son was injured and lying at a certain place. No names or particulars had been mentioned. It would be recalled that this intimation had been given from the Control Room by Sub Inspector , P.W. 8 as soon as he received the telephone message from Mr. . the Advocate. In the ordinary course this would be the first entry in the General Diary in connection with this offence. But what we find is that even before this intimation was received, several entries have been made in connection with this offence-the first of them being at 8.25 P.M. relating to the First Information lodged by , P.W. 1. In fact Head Constable , P.W. 10 says that when he was recording the statement of , P.W. 1 this particular message was received from the Control Room at 8.35 P.M. and at that very time he told the Control Room on the phone that a report in respect of that offence had already been lodged at and necessary action was being taken. This is confirmed by , P.W. 8 when he was specifically asked about it ,in his cross-examination. It is not suggested that who was in-charge of the Control Room had anything to do with any mischief contemplated by the officers of this Police Station and it would only show that , P.W. 10 was telling the truth when he said that when the message was received from the Control Room the investigation, of this offence was in progress. The General Diary shows that this particular message from the Control Room has been duly entered at 8.35 P.M. The suggestion is that even this message must not have been entered at the time but noted on a separate piece of paper to be posted in the General Diary sometimes afterwards. It is not easy to see why at this particular point of time should not have made the record in the General Diary in due course of official business. The message itself was innocuous and did not suggest that an offence had been committed or who the offender was or who were the assailants. Therefore, there is no reason whatsoever why the entry should not have been made at the time when the message was received. And since this entry about the message follows the entry with regard to the first information report, the normal inference would be that the several entries had been made in due course of official business. If the defence suggestion were true, we must assume that something must have occurred at 8.25 P.M. which inspired not to enter the entries in due course. If none of the persons interested in complaining about the offence had reached at that time and there was no known source of information at with regard to the offence, there could not have been any good reason at all why the entries should not be made in the usual course. The importance of this aspect of the question was not lost on the learned Sessions Judge. He got over, this difficulty also by saying that must have come at about 8.25 P.M. and must have given some information. According to the learned Judge must have given information about his companions and and that was the reason why the officers attached to stayed their hands and refrained from making any entry about the information given by . Now the case of , as disclosed in his statement under Section 342 , Criminal Procedure Code , is that he had merely seen two or three persons assaulting the deceased with knives and since he knew he went to his rescue. The assailants of , however, turned on him and he got injuries on both his hands. He, therefore, left the place and went to to make a report. He does not say that he implicated and as being the assailants. Therefore, there is no basis for the conjecture of the learned Sessions Judge that the names of and might have been' mentioned by as the assailants. Secondly if what actually says is true there could be no possible reason for the Station Officer not to record his statement in the usual course because he was reporting the commission of a cognizable offence without naming the assailants and was wanting the officers to take immediate action to save . It is impossible to believe that if such a statement of a cognizable offence being committed was reported to , the Officers would have remained absolutely indifferent and inactive. As already stated no other influence was working at at that time and, therefore, there could have been no reason at all why the information given by should not have been recorded. To suggest that the Officer delayed recording of 's statement in order to implicate and would be absurd because had not mentioned the names of and . It would be extravagant to suggest that on hearing of a stabbing case within his area, the Officer would at once think of and with a view to implicate them falsely, without ascertaining, in the first place, the circumstances of the stabbing, the availability of and on that day at the particular place and time, the probability of eye witnesses mentioning the names of other assailants and the inclination of the relations of to help the officer in his mischievous plans. It was not even considered by the learned Sessions Judge whether , in the circumstances, would have voluntarily gone to to give information. It was possible for him to phone to get immediate help to rescue . Instead of that it is supposed that he went to which was about three to four furlongs away. Secondly would be the last person to go to by himself when there were circumstances which would impel him to keep himself as far away from as possible. He could not have forgotten that only four or five days previously, he and had given a threat to - a fact of which due notice has been taken by the learned Sessions Judge. He had. blood on his shirt and injuries on the right little finger which would draw the suspicion of any experienced Police Officer at . It is, therefore, impossible to believe the story of that he had gone to by himself to report about the assault on and that though he made his report the Officer decided not to record it. ", "21. It necessarily follows from the above discussion that must have been brought to the Police Station with the blood stained knife by somebody at 8.25 P.M. and in that behalf we have a large body of evidence both of the eye witnesses , P.W. 1 etc. and the Police Officers who were in-charge of the Police Station. Immediately after the arrival of with , the investigation proceeded in the usual manner. 's F.I.R. was recorded, the necessary seizure memos were prepared, the General Diary entries were posted and thereafter we know from evidence that he went off duty at 9.00 P.M. The Investigating Officer , P.W. 17, however, took some more time at the Police Station to complete the proceedings before he went to the scene of offence. There was no particular hurry because he had already come to know that had been contacted and there were people attending to at the scene of offence. The offence which had been recorded at the time was only under Section 307 , I.P.C . and not under Section 302 , I.P.C . It was only much later when the Investigating Officer was at the scene of offence and recording the statements of the eye witnesses that the report about the death of was received by him. In our opinion, there was no sufficient basis for the learned Sessions Judge to think, that the information about this offence had not been received till early next morning and that the General Diary had not been posted with the entries in due course of official business. ", "22. Once it is established that the First Information Report was given by , P.W. 1 at 8.25 P.M. the defence which had impressed the learned. Judge completely collapses. had been brought to the Police Station with a blood stained knife and the eve witnesses were available who, had also taken part in chasing and capturing . As mentioned earlier, none of the three eye witnesses had any personal interest in implicating the three accused. In fact nothing was suggested to them in their cross-examination. One more remarkable thing which must be noted is that even , P.W. 1 had not known the other two captors , P.W. 2 and , P.W. 5 and the captors also did not know each other. Their evidence, however, shows that all these three witnesses had known the three accused since before the incident. has accepted their evidence as substantially true and we do not think that we have any good grounds to differ from assessment of the. evidence. The learned Judge having once formed the erroneous opinion that the F.I.R. must not have been recorded at 8.25 P.M. had no other alternative but to discard the evidence of eye witnesses; and. this the learned Judge has done by attaching undue importance to minor details in the evidence of these witnesses as pointed out by . was, therefore, justified in its criticism of the judgment of the learned Judge as unreasonable and palpably wrong and coming to its own conclusion as to the guilt of the accused. ", "23. In the result these appeals fail and are dismissed."], "relevant_candidates": ["0000040914"]} {"id": "0001036851", "text": ["JUDGMENT , J. ", "1. This litigation arises in connection with an ancient mosque standing on a portion of Holding No. 221 in the Government Khas Mahal of Dihi Panchannagram, near Calcutta. In a proceeding under Reg. II of 1819 between as plaintiff and one of Kalinga as defendant, the whole holding, then 3 bighas, 11 eottas and 3 chhataka in area (a portion has since been acquired under the Land Acquisition Act ), was declared by to be revenue-free as property dedicated long ago to religious uses, i. e., a wake, of which the said was the then mutwali. The mosque stood on a portion of this area and the rest of it was let out to tenants, the rents being appropriated for the expenses of the mosque. ", "2. or continued to hold this area of land as mutwali of the mosque until his death about seventy years ago, and after him his son, Sheikh , succeeded him as mutwali. died about fifty years ago, and thereafter his widow , assumed the office of mutwali. On October 27, 1802, she executed a deed whereby she purported to nominate her son Mr. as her successor in the mutwaliship. ", "3. Disputes having arisen, the heirs of instituted in 1907 a Suit No. 78 of 1907 in , on the basis that was the secular property of and asking for partition thereof. A preliminary decree for partition was actually made in that suit in 1908. On July 18, 1910, a suit No. 48 of 1910 was filed in with the sanction of the Advocate General under Section 92 of the Code of Civil Procedure of 1908 by seven ans as plaintiffs against as defendant. It was sought by that suit to obtain the removal of from the office of mutwali, for accounts and for settling a scheme for the management of the said properties. The plaint in that suit was subsequently amended on December 15, 1910 :- ", "(1) By the addition of all the heirs of as defendants, who, it was alleged, were claiming the property as their personal property; and (2) by adding a prayer for the declaration that the property in suit was wakf property and not the personal property of the defendants. ", "4. No sanction of the Advocate General was obtained for these amendments, and apparently the Advocate General had nothing further to do with that suit at any later stage. ", "5. On September 15, 1911, a petition of compromise was filed in that suit on behalf of plaintiffs Nos. 1, 2, 3, 4, 5 and 7 (i. e., all the plaintiffs except plaintiff No. 6, named Rahimbuksh). The first two paragraphs of the petition were as follows:- ", "That your petitioners have on consideration of all the circumstances and facts as disclosed in the evidence produced in the case and which the parties may produce on their behalf have decided that it would be to their best interest and in the interest of public for whose benefit the plaintiffs brought this suit to compromise the suit on the following terms and conditions :- ", "That out of the disputed property the portions shown in the plan herewith, tiled and marked A, B, C, D, measuring 1 bigha 1 cotta 8 cbhattaks, 24 sq. ft. (1 bigha 1 cotta 8 chhattfiks, and 24 square feet) should be declared a valid Mahomedan public religious and charitable endowment, a wakf. ", "6. The rest of the petition dealt with the appointment of new rautwalis and the future succession to the mutwaliship. On September 15, 1911, the following order was passed on the petition by the District Judge :- ", "The compromise has now been accepted by all parties to the suit. The terms are net out in the petition filed by the plaintiffs on September 15, to which a plan is attached. My previous order of September 5 refers to a petition filed on behalf of ten defendants. ", "A permission (petition) has now been filed on behalf of the remaining three defendants. ", "Let a decree be drawn up in terms of the petition- a copy of the plan above referred to will form a part of the decree. ", "No order is made as to costs. ", "7. It would appear that the District Judge's attention was not drawn to the fact that one of the plaintiffs was not a party to the compromise, nor is there anything on the present record to show that the learned Judge's attention was drawn to the nature of the suit as affecting a public religious trust. A decree was drawn up on the compromise petition on September 16, 1911. The effect of the consent decree was to declare by implication that, with the exception of 1 bigha 1 cotta 8 chhattaks 24 square feet, which was admitted to be wakf, the rest of the holding amounting to 2 bighas 9 cottas 10 chhattaks and 16 square feet, was secular property and as such belonged to the heirs of , who had been added as party defendants by the amendment of the plaint. ", "8. Thereafter these heirs alienated most of the latter part of the property, and the present suit was brought on March 2, 1918, by five Mahomedans of the neighbourhood against the heirs of and their alienees, as also the original plaintiffs in Suit No. 48 of 1910 or their representatives. They alleged that the partition decree in Suit No. 78 of 1907, as well as the compromise decree in Suit No. 18 of 1910, wore not binding upon them, and they also prayed that the whole of the then area of 3 bighas 8 cottas 3 chhattaks \"may be declared wakf property and the defendants restrained from obtaining possession either directly or by realising rents of the said .\" ", "9. The defence in substance was (1) that the lands in suit were not wakf; (2) that the suit was not maintainable by virtue of Section 92 , Sub-section (1), as no sanction of the Advocate General, had been obtained and the suit was not instituted in , and (3) that the plaintiffs were barred by the rule of res judicata. ", "10. By his judgment dated July 8, 1921, the Subordinate Judge held that the whole of the holding was wakf and that the plaintiffs as worshippers iu the mosque were entitled to maintain the suit in that Court without the Senction of the Advocate General and, that the compromise decree in Suit No. 48 of 1910 was without jurisdiction and not binding upon them, and he accordingly passed a, decree in favour of the plaintiffs. ", "11. on appeal set aside the judgment of the Sub-ordinate Judge. They entertained considerable doubt as to the maintainability of such a suit as this without the sanction of the Advocate General under Section 92 of the Code of Civil Procedure, having regard to Sub-section (2), which has been added to the corresponding Section 539 of the Code of Civil Procedure, but they considered it unnecessary to decide the point, as they were of opinion that the plaintiffs were bound by the rule of res judicata and the suit should be dismissed on that ground. ", "12. Two questions only have been argued before this . The first is whether the suit is maintainable in view of the provisions of Sub-section (2) of Section 92 of the Code of Civil Procedure, 1908; and the second is whether the suit is barred by the rule of res judicata under Explanation 6, Section 11 , Civil Procedure Code. ", "13. It is urged broadly on behalf of the respondents that all Buits founded upon any breach of trust for public purposes of a charitable or religious nature, irrespective of the relief sought, must be brought in accordance with the provisions of Section 92 , Civil Procedure Code. ", "14. The short answer to that argument is that the legislature has not so enacted. If it had so intended, it would have said so in express words, whereas it said, on the contrary, that only suits claiming any of the reliefs specified in Sub-section (1) shall be instituted in conformity with the provisions of Section 92 , Sub-section (1). ", "15. The reliefs specified in Sub-section (1)(a) to (h) do not cover any of the reliefs claimed in this suit unless the words \"further or other relief\" in Clause (h) can be held to cover them. It is argued that the words \"such further or other relief as the nature of the case may require\" must be taken, not in connection with the previous Clauses (a) to (g), but in connection with the nature of the suit viz., any relief other than (a) to (g) that the case of an alleged breach of an express or constructive trust may require in the circumstances of any particular case. Their Lordships are unable to accept this argument. First, because the words \"further or other relief\" must on general principles of construction be taken to mean relief of the same nature as Clauses (a) to (g), Secondly, because such construction would cut down substantive rights which existed prior to the enactment of the Code of 1908, and it is unlikely that in a Code regulating procedure the intended without express words to abolish or extinguish substantive rights of an important nature which admittedly existed at that time. ", "16. It is a sound rule of interpretation to take the words of a statute as they stand and to interpret them ordinarily without any reference to the previous state of the law on the subject or the English law upon which it may hi founded; but when it is contended that the intended by any particular amendment to make substantial changes in the pre-existing law, it ie impossible to arrive at a conclusion without considering what the law was previously to the particular enactment and to see whether the words used in the statute can be taken to effect the change that is suggested as intended. For this reason it becomes necessary to consider how the law stood prior to the enactment of Section 92 of' the Code of Civil Procedure of 1908. ", "17. The first Code of Civil Procedure, Act VIII of 1859, contained no section specially relating to the administration of public trusts of a religious or charitable nature. The Code of 1877 for the first time introduced such a special section, viz., Section 539 , where particular reliefs only were sought in such cases. This was re-enacted in the Code of 1882. ", "18. Section 92 takes the place of what was Section 539 in the Code of 1882 as well as the Code of 1877, with certain changes, the most material of which are as follows:- ", "(a) In the relief clauses under Sub-section (1), Clauses (a) and (d), which did not appear in the Codes of 1877 and 1882, are inserted, ", "(b) Sub-section (2) is altogether new. ", "19. As regards Clauses (a) and (d), it appears that there had been some divergence of opinion as to whether Section 539 authorized the removal of a trustee or the directing of accounts and inquiries. Most of held that the power to appoint a new trustee necessarily involved the power to remove an old trustee. But held to the contrary (1894) I.L.R. 17 Mad. 462, f.b. see v. Collector of Kaira (1895) I, L, R, 21 Bom. 48.-k.j.r. The in 1908 adopt' d the former view, and inserted Clause (a) expressly giving power to remove a trustee, in addition to the power to appoint new trustees (now Clause (b) ", "20. Accounts and inquiries, though not expressly mentioned in the relief clauses, had been held by some of the to be necessarily incidental to the power to remove an old trustee and appoint a new one. That power was expressly inserted by the present Clause (d). But the most important change was made by Sub-section (2) of Section 92 . ", "21. Under the Code of 1877, as well as the Code of 1882, the question had arisen whether Section 539 was mandatory and therefore all suits claiming any relief mentioned in Section 53 d should be brought as required by that section or whether the remedy provided by Section 539 was in addition to any other remedy that existed under the law for the redress of any wrongful action in connection with a public trust of a charitable or religious nature. Such rights, when claimed on behalf of the public or any section thereof, had been held to be capable of enforcement by a suit under Section 30 of those Codes (now replaced by Order I, Rule 8); and it had also been held that private persons who had individual rights under such trusts could bring suits to enforce such individual rights by an ordinary suit without being obliged to bring a suit of a representative nature, as above mentioned. Great divergence of opinion had arisen in India in this connection, not merely as between the different , but between different Benches of the same Court. The resulting uncertainty could only be removed by legislative enactment, and Sub-section (2) of Section 92 was enacted to put an end to this difference of opinion. It accepted and enacted the view which had been taken by , as opposed to the view taken by the other generally, viz., that a suit which prayed for any of the relief mentioned in Section 92 could only be instituted in accordance with the provisions of that section. The words used in Sub-section (2) are appropriate and sufficient if that was the purpose, but they are insufficient and inadequate if it was intended to make a complete change such as is suggested on behalf of the respondents. ", "22. Their Lordships see no reason to consider that Section 92 was intended to enlarge tho scope of Section 539 by the addition of any relief or remedy against third parties, i. e., strangers to the trust. They are aware that the Courts in India have differed considerably on the question whether third parties could or should be made parties to a suit under Section 539 , but the general current of decisions was to the effect that even if such third parties could properly be made parties under Section 539 , no relief could be granted as against them. In that state of the previous law, their Lordships cannot agree that the intended to include relief against third parties in Clause (h) under the general words \"further or other relief.\" ", "23. The conclusion is that, inasmuch as the suit out of which this appeal arises did not claim any such relief as is specified in Sub-section (1) of Section 92 , that section was no bar to the maintainability of the suit without the sanction of the Advocate General and in . ", "24. The only other question is whether the suit is barred by the rule of res judicata, i.e., whether the compromise decree of September 15, 1911, in Suit No. 48 of 1910 precludes the present from bringing this suit, it is said that the previous Suit No. 48 of 1910 was instituted under the provisions of Section 92 1927 with the sanction of the Advocate General, and therefore became a representative suit and the decree in that suit, whether by adjudication of the or by consent of parties, is binding upon \"that section of the public which was represented by the plaintiffs that suit, and therefore upon the plaintiffs in the present suit by virtue of Explanation 6 of Section 11 of the Code. ", "25. The learned Judges of were of opinion that the consent decree of 1911 could not be questioned on the grounds stated by the Subordinate Judge, as there was no want of jurisdiction of the Judge to entertain the suit, or to order the amendment as prayed for, or to direct a decree to be made on compromise of the suit. ", "26. Their Lordships are unable to concur in this view. It is extremely doubtful whether a decree passed under the circumstances of this case can be held to be res judicata as against any persons other than those who consented to that decree. ", "27. The case of v. (1867) I.H.L. Sc. 117 was based on Scottish law and as explained in the case of In re South American and Mexican Company : Ex part Bank of England (1895) 1 Ch. 37, appears to lay down broadly that persons instituting a suit on behalf of the public have no right to bind the public by a compromise decree, though a decree passed against them on contest would bind the public. It is not necessary for the purpose of this case to decide whether the law in India under Section 11 of. the Code of Civil Procedure is the same as so explained. Their Lordships consider that, in so far as the nature of the suit was changed by the amendments mentioned, viz.; by adding strangers to the trust as defendants and by prayers for relief not covered by Section 92 , the suit ceased to be one of a representative character and the decree based on the compromise such as it was, viz., by six only out of the seven plaintiffs in the suit, however binding as against the consenting parties, cannot bind the rest of the public. Section 11 , Explanation 6, has no application to such a case. ", "28. On both grounds, therefore, the arguments for the respondents fail, and their Lordships will humbly advise that the decree of be set aside and the judgment and decree of the Subordinate Judge restored, with costs of appeal and the costs of this appeal."], "relevant_candidates": ["0000335364"]} {"id": "0001037935", "text": ["CASE NO.: Appeal (crl.) 1092-1093 of 1998 PETITIONER: STATE OF MAHARASHTRA RESPONDENT: SURESH DATE OF JUDGMENT: 10/12/1999 BENCH: G.T. NANAVATI & K.T. THOMAS JUDGMENT: ", "JUDGMENT 1999 Supp(5) SCR 215 The Judgment of the Court was delivered by , J. A gory episode is narrated in this case the gravamen of which is a grisly perpetrated rape and murder of a four year old female child. The rapist had abducted the child from her house and decoyed her to a field at Arvi (in Wardha district of Maharashtra State). After the rape and murder the mangled body of the child was dumped in the field where pulses and cotton were cultivated. The man whom the police challaned as a culprit was convicted and condemned to death penalty by the sessions court but he now stands exonerated as a Division Bench of proclaimed him not guilty. The State of Maharashtra is not prepared to reconcile with the clean chit granted to him by and hence this appeal by special leave has been filed by the State. ", " is the name of the little child who was subjected to the beastly sexual ravishment. She was endearingly called by her kith and kin. She had a brother younger to her the children were living in the family house which is presumably a joint family house. The life of was snuffed off on 22.12.1995. ", "As per the prosecution version the accused (who is respondent in this appeal) was already an accused in another case facing ah allegation that he committed rape and murder of one eight year old female child by name . While he was in Jail in connection with that case he came into acquaintance with a prisoner (PW6-Sanjay) who is the brother of 's father (PW5-Rameshwar). Both of them were later released from prison. (We are told that respondent was acquitted in that case). ", "After such release from jail respondent visited 's house, and subsequently he paid frequent visits to the said house. During such visits he made himself familiar to . On 22:12,1995 respondent went to that house and when he was told that had gone out, he left the house. was then playing near the gate other house. Respondent would have moved away by alluring the little child to go with him. The fact remains that after respondent left the house in the afternoon no one in that house had seen alive. ", "Respondent took to the shop of , and later to the shop of , and thereafter to a farm whereon pulses and cotton were cultivated. He chose that venue For sexually ravishing that little child and smothering her to death. ", "As was not seen in the house or its precincts till nightfalls the panic-stricken member of her family began to make hectic searches for her. As all such efforts failed her uncle went to the police station and reported that was missing from that house. Next morning her father (PW-5) went to the police station and lodged Ext; 22-complaint in which he expressed strong suspicion against the respondent regarding the disappearance of his child. ", "Respondent was arrested on the evening of 23.12.95. During interrogation the police came to know that dead body of the child was concealed in a farm. Though a search was made in the night to find out the spot where the body was concealed it did not fructify due to darkness. Hence the police resumed the search operation on the next morning and the spot was pointed out by the respondent wherefrom the dead body of was traced out When autopsy was conducted on the body by two doctors of the local hospital a woeful picture of sexual molestation was etched by them. Ext. 68 (Post- mortem Report) contains the data, inter alia, that the vagina was torn down at the perennial region by 1\" with irregular lacerations and a fleshy torn portion was found protruding out therefrom. Contusions and abrasions on the labia majora of both sides besides swelling were also noticed by the doctor. There were number of contusions and abrasions on her face also. Dr. , Medical Superintendent and Dr. , Medical Officer of , Arvi, District Wardha, after completing the jointly conducted autopsy reported that death of the child was due to asphyxia by rape and smothering. ", "There is not even a speck of doubt that was kidnapped from her house and she was raped arid killed by someday on the evening of 22.12.1995. In fact and concurrently found the aforesaid point affirmatively. The whole endeavour was therefore confined to the question whether the crime was committed by the respondent. ", "The trial court and focused on the circumstances which prosecution presented through the evidence for proving that the culprit in the ghastly infanticide was the respondent himself and none else. The Sessions Judge found that all those circumstances were established and they formed themselves into a completed chain unerringly pointing to the guilt of the respondent. But of differed from the findings of regarding some of the circumstances and that resulted in exoneration of the respondent. ", "The circumstances which prosecution presented can be recast as follows (1) Respondent visited the house of at about 3.30 P.M. and after he left the house it was realised that also disappeared; (2) PW-8 Mahadeo saw the accused and a female child together in his shop at about 4.30 P.M. on the same days; (3) PW-14 Motiram saw them together in his shop at about 4.00 P.M.; (4) A little later PW-3 Sayyed Niyamat saw them walking along the road; (5) Respondent after his arrest disclosed to PW.26 (Police Inspector of Arvi Police Station) that the dead body of the child was concealed in the farm and he offered to hand it over. Pursuant thereto the spot was pointed out by the respondent wherefrom the dead body was recovered; (6) PW-20 Dr. stated that the person who caused the injuries on the vagina of the deceased child would have sustained injuries on his male organ. When respondent was medically examined on 25.12.1995 by PW-22 Dr. it was noticed that his glands penis was swollen with multiple tiny punctuated abrasions besides abrasions on the posterior aspect of both elbow joints. According to the doctor those injuries could have been caused 48 hours earlier than the time of his examination; (7) Stains of human blood and semen were detected on the under-clothes of the accused when he has arrested. ", " of was not disposed to rely on the evidence of me three witnesses who claimed to have seen me respondent and the girl together though their evidence was found reliable by the trial court. Nor did concur with finding regarding recovery of the dead body as sequel to the information supplied by the respondent. declined to take the injuries which the doctor noticed on the person of the respondent as an incriminating circumstance on the premise that it is not a conclusive circumstance. sidestepped the circumstance that semen and blood were detected on the under-clothes of the accused on the premise that there was delay in seizing those wearing apparels. ", "The evidence of PW-3 Mahadeo and (PW-14) needs scrutiny by us because acceptability of that evidence will have a decisive impact on the final conclusion of this case. ", " claimed to have seen the respondent with a. little girl at his grocery shop around 4 P.M. on 22.12.1995. He said that the man with the girl had purchased some peppermint from his shop presumably for appeasing the girl as she was then crying. His reason for remembering his purchase was that next he heard about the murder of a little girl and he visited the house of the girl on 24.12.1995, and identified the dead body as that of the same girl. In a test identification parade conducted by PW-26 Magistrate he identified the respondent as the person who accompanied the child. gave evidence that when he was returning from his Friday Namaz he saw a young man holding a crying girl around 4.00P.M. He too gave almost the same reason for remembering it that when he heard next day about the murder of a little girl he had some doubt whether it was the same crying girl. He also identified the respondent in the test identification parade. ", " Motiram has a betel shop in the locality. His evidence is that a young man wearing pant and shirt visited his shop at about 4.30 p.m. and bought some \"Kharra\" from the shop. He remembered it as a little girl was with him who was found crying then. When he heard next day about the murder he felt suspicious because the young man whom he saw the previous day in his shop was a total stranger in the locality. So he informed the police about it. He too was called in the Test Identification Parade wherein he identified the respondent as the person whom he saw with the girl. ", "If a criminal court is to view the testimony of the aforesaid three witnesses as unnatural it would be easy to brush it aside with the stereotyped reasoning that those persons had no cause to remember having seen the man with the girl accompanying him. Such a reasoning overlooks the broad aspect that a human mind, on hearing about any shocking incident, would have the tendency to recollect any previous event which could have had a connection with that incident If as a matter of fact those witnesses had occasion to see a crying girl of that age on the very day of the gruesome episode as happened in this case, there is nothing improbable in those witnesses remembering the person who was seen in the company of that girl. If they had immediately informed the police that they noticed a similarly aged girl crying in the company of an utter stranger of that locality that cannot be brushed aside as a doubtful conduct. Either the three witnesses concocted the story falsely or what they said must be true. Why should they concoct it falsely. We are not told of any reason whatsoever for those three witnesses to bother themselves to concoct such a canard. ", "It seems that a minor discrepancy in their evidence had affected their credibility before . They said that they went to the police station on 24.12.1995, whereas PW-26 Police Inspector said that they visited me police station only on 25.12.1995. We do not attach any significance to the aforesaid discrepancy as PW-26 should have been more correct because he was speaking with the help of investigation records while the witnesses would have spoken from their memory only. Another reason advanced by is that when PW-3 went to the bereaved house he did not inform anyone in that family as to what he saw earlier. But PW-3 himself gave an explanation for it that as members of that family were then in a shock he did not venture to tell them about it at that occasion. Here also the question is not whether PW-3 should have told them despite his hesitation but whether the witness had chosen to adopt such a reticence in a situation like that. It is not for the to suggest that he should have divulged it to the members of the bereaved family despite his own thinking about it At any rate we are not impressed by the aforesaid reasoning for rejecting the testimony of an important witness like PW-3. ", " then advanced a theory that there is \"an inherent incredibility in the evidence\" on the premise that a culprit kidnapping a minor girl with sinister design would normally take the precaution not to be seen by any other person on the way, but in this case the culprit along with the girl had moved from place to place in the town. We are unable to appreciate such a reasoning as proposition of human conduct. For considering that reasoning it must be remembered that would certainly have been abducted by some body (even assuming that it was not this respondent) and that person had taken the abducted girl from her house up to the farm. Unless it is suggested that there was another alternative and safer route for the culprit to take the girl unnoticed by any shopkeeper or even a pedestrian there in no rationale in the reasoning that there is \"inherent incredibility\" in the version that respondent would have taken the girl through this route. ", "The last reasoning of is based on a criticism of the modes adopted by the Executive Magistrate who held the test identification parade. The aforesaid criticism was based on the evidence of two witnesses who said that the accused were taken on foot from police station to the place where the parade was conducted and that their faces were not covered during such transit. ", "Ext 17 is the minutes of the test identification parade conducted by the Magistrate who himself was examined as PW-2. It contains the details of the steps adopted by him. Seven other persons were kept ready in the room and the witnesses were kept in another room from where they could not see the suspect Thereupon the suspect was brought from the lock up with the help of two respectable persons and all precautions were taken that the witnesses could not see the suspect during such transit. Then me suspect was permitted to stand anywhere among the 7 persons. It was thereafter that the witnesses were brought with the help of the same respectable persons and the witnesses were then asked to identify the person whom they saw on the crucial day. If potholes were to be ferreted out from the proceedings of the magistrates holding such parades possibly no test identification parade can escape from one or two lapses. If a scrutiny is made from that angle alone and the result of the parade is treated as vitiated every test identification parade would become unusable. We remind ourselves that identification parades are not primarily meant for the court. They are meant for investigation purposes; The object of conducting test identification parade is two fold. First is to enable the witnesses to satisfy themselves that the prisoner whom they suspect is really the one who was seen by them in connection with the commission of the crime. Second is to satisfy the investigating authorities that the suspect is the real person whom the witnesses had seen in connection with the said occurrence. So the officer conducting the test identification parade should ensure that the said object of the parade is achieved. If he permits dilution of the modality to be followed in a parade, he should see to it that such relaxation would not impair the purpose for which the parade is held, vide , 2 SCO 128 and , 3 SCC 86. ", "When we scanned through. Ex. 17 minutes of the test identification parade, we feel that the safeguards adopted by PW-2 Executive Magistrate were quite sufficient for ensuring that the parade was conducted in a reasonably foolproof manner. We feel that niggled on unimportant details and came to the wrong conclusion that the test identification parade was irretrievably vitiated. The reasons by which the testimony of those three witnesses had been jettisoned by were fatuous and we cannot support them. ", "One of the formidably incriminating circumstances against the accused was that the dead body was recovered as pointed out by the respondent. The statement of the respondent which led to the recovery of the dead body has been incorporated in Ext. 79 and the admissible portion of it reads thus : ", "\"Her dead body is kept concealed in the field; I will take it out and produce the same; come with me.\" ", "But unfortunately of did not rely on the above circumstance on a very fragile reasoning. The first limb of that reasoning was based on a mistake committed by PW-3 in his evidence when he said that he saw the dead body of the child on 23,12.1995. Much strain is not required in holding that what PW-3 said should have been understood as 24.12.1995. The second limb of the reasoning is that two other possibilities could not have been ruled out. Of which one is that respondent would have seen someone else placing the dead body at that spot, and the second is that respondent would have been told by somebody else that the dead body was placed there: ", "We too countenance three possibilities when an accused points out the place where a dead body or an incriminating material was concealed without stating that it was conceded by himself. One is that he himself would have concealed it Second is that he would have seen somebody else concealing it. And the third is that he would have been told by another person that it was concealed there. But if the accused declines to tell the criminal court that his knowledge about the concealment was on account of one of the last two possibilities me criminal court can presume that it was concealed by the accused himself. This is because accused is the only person who can Offer the explanation as to how else he came to know of such concealment and if he chooses to refrain from telling the court as to how else he came to know of it, the presumption is a well justified course to be adopted by the criminal court mat the concealment was made by himself. Such an interpretation is not inconsistent with the principle embodied in Section 27 of the Evidence Act. ", "It is regrettable that the Division Bench had practically nullified the most formidable incriminating circumstance against the accused spoken to by PW-22 Dr. . We have pointed out earlier the injuries which the doctor had noted on the person of the accused when he was examined on 25.12.1995. The significant impact of the said incriminating circumstance is that the accused could not give any explanation whatsoever for those injuries and therefore he had chosen to say that he did not sustain any such injury at all. We have no reason to disbelieve the testimony of PW-22 Dr. , False answer Offered by the accused when his attention was drawn to the aforesaid circumstance renders that circumstance capable of inculpating him. In a situation like this such a false answer can also be counted as providing \"a missing link\" for completing the chain. ", "It is disconcerting that a case like his in which the prosecution has presented such reliable and formidable circumstances forming into a completed chain and pointing unerringly to me irresistible conclusion mat the little girl was raped and killed by none other than the respondent himself, ended in unmerited acquittal from of unfortunately became a casualty in this case when the High Curt side-stepped all such circumstances and exonerated the culprit of such a grotesque crime. ", "We, therefore, set aside the impugned judgment and restore the conviction passed by the trial court. Regarding sentence we would have concurred with view that the extreme penalty of death can be chosen for such a crime, but as the accused was once acquitted by we refrain from imposing that extreme penalty in spite of the fact that this case is perilously near the region of \"rarest of the rare cases\" envisaged by the Constitution Bench in , 2 SCC 684. However, the lesser option is not unquestionably foreclosed and so we alter the sentence, in regard to the offence under Section 302 , to imprisonment for life. The sentences imposed by the trial court on all other counts would remain unaltered. The bail bond shall stand cancelled. We direct the respondent to surrender to bail. We also direct the Sessions Judge, to take immediate and necessary steps to put the accused in jail if he is not already in jail, for undergoing the sentence imposed on him."], "relevant_candidates": ["0000087528", "0000312114", "0001201493"]} {"id": "0001046518", "text": ["CASE NO.: Appeal (civil) 8574-8577 of 2001 PETITIONER: & Anr. RESPONDENT: . DATE OF JUDGMENT: 10/03/2003 BENCH: CJI. & AR. Lakshmanan JUDGMENT: ", ", J. ", "By these four appeals, we are called upon to consider the legality, correctness and validity of the impugned Notification dated 7.12.2000 appointing as the President of at Ahmedabad. A Notification dated 7.12.2000, in this regard, was issued by the order of Governor by of the Government of Gujarat in the Gujarat Government Gazette whereby had been appointed as the President of which was under challenge before in Special Civil Application Nos. 12665/2000, 79/2001, 80/2001 and 93/2001 filed by , , and Surat Textile Labour Union. As per the directions of the Chief Justice, the applications were placed before of . , by its judgment dated 4.5.2001, allowed the applications and quashed the said Notification dated 7.12.2000. further directed the respondents to proceed to make the appointment afresh on the post of the President of , Gujarat in the light of what has been held in the said order and in accordance with law. Aggrieved by the order passed by of , through its Registrar preferred Special Leave Petition (c) Nos. 11795-11798/2001 on the grounds raised in the special leave petitions. By order dated 14.12.2001, this Court granted leave and made the interim order absolute. ", "All these appeals involve common question of law based on same set of facts, therefore, we propose to decide these appeals by a common judgment. A Special Civil Application was filed by , a Registered Trade Union to direct the respondents therein not to make any appointments on the post of President of save and except by appointing any Member of as President and other allied reliefs. A prayer to issue a writ of quo warranto was also asked for to direct Shri - respondent No.3 in the application to state the basis of his right to be appointed as President of and to set aside and quash the appointment order dated 7.12.2000 purporting to appoint Shri as President of . ", "The brief facts leading to the filing of the applications are briefly stated as under: ", "The Bombay Industrial Relations Act, 1946 (hereinafter referred to as \"the B.I.R. Act\") governs the relationship between the employers and workmen in several industries operating in Gujarat and more particularly, the Industry of Textile, the Industry of Power in the late Bombay State area of Gujarat, the Surat Industry, the Banking Industry run by Banking Companies having no branches outside the State of Gujarat. Sections 9 and 10 of the B.I.R. Act thereof provide for setting up of and . Section 10 of the B.I.R. Act, which pertains to the setting up of to be known as , is provided to consist of three or more Members, one of whom shall be its President. Section 10(4) of the B.I.R. Act provides that every Member of the shall be a person who is or has been a Judge of or is eligible for being appointed a Judge of such Court provided, inter alia, that a person who has been a Judge not lower in rank than that of Assistant Judge, for not less than three years; or a person who has been the Presiding Officer of for not less than five years shall also be eligible for appointment as a Member of the . According to the respondents, there are twelve Members of the functioning in Gujarat State and so far as the are concerned, there are 38 Judges functioning in Gujarat, four of them are Judges who have completed more than ten years' service as Judges and several more Judges are those who have completed more than five years' service as Judges and are, therefore, eligible for being appointed as Members of the . When the post of President of the was vacant since the retirement of , , the senior-most Member of the expressed his unwillingness to be appointed as President of the , the post was, therefore, required to be filled up by a regular appointment. According to the respondents, a person for being appointed as President should be a Member of the and no one except a Member can be appointed as a President of the . It was, therefore, submitted before the that anyone from the Members of the can be considered to be eligible for being appointed as President. It was further submitted that in view of the scheme of Section 10(2) of the B.I.R. Act, no one who is not a Member of the can be directly appointed as President of the . It was further argued before the High court that for Members of the , there is no other avenue of promotion except one by way of appointment as President of the and now, if the post of President is to be filled up by bringing someone from Judicial Service, it will cause a great frustration among Members of the as their hopes of promotion at an appropriate time will be dashed to the ground. Opposing the applications, it was submitted by the respondents, appellants herein, that no illegality was committed by recommending the name of for appointment as the President of the and that under Rules 2 and 3 of the Draft Recruitment Rules, it has become necessary for the , on its administrative side, to recommend the appointment of an appropriate person by nomination on the said post under Rule 2(b) and that , whose name was recommended, is fulfilling the criteria prescribed by the as per the old Rules as well. It was submitted that considering the totality of the facts, the of Gujarat had not only acted within its rights but the same had been done in due discharge of the Constitutional duty. The petitioners, respondents herein, filed their rejoinder to the reply affidavit on behalf of the of Gujarat reiterating the contentions raised in the applications. In the rejoinder affidavit, it was submitted that neither the appointment order nor the reply affidavit filed on behalf of the shows that the appointment was made by the Governor of the State and that there is nothing to show that the Full Court was consulted by the appointing authority before making the appointment. It was further stated that assuming that the appointment by nomination can be made on the post of a President of the either under the old Rules pertaining to the post of President or under the new Rules which are at the draft stage only, the candidate concerned should have atleast for ten years either held a judicial post in India or should have been an advocate for or should have expert knowledge of Industrial matters. According to the petitioners, respondents herein, the appointee, under the impugned appointment, had not hold a judicial post for ten years and in fact he was holding the post of Joint District Judge only and he had not even completed three years on the post of Additional District Judge to which post he was directly recruited. It was, therefore, submitted that the appointment had been made without coming to the conclusion that the appointee was fulfilling the criteria for appointment as required by the Rules. An affidavit in reply was filed before the by the Law Officer of the of Gujarat giving all details as to how the matter was considered by the Standing Committee of the and as to how the decision was taken to appoint as the President of the . ", " of , by its judgment, held that a reading of Section 10 of the B.I.R. Act would show that it provides for the constitution of with three or more Members, one of whom as its President and it also provides the eligibility for appointment as Member of . While the eligibility has been prescribed under Section 10(3) and (4) of the B.I.R. Act for being a Member of , for the purpose of President of all that has been said in sub-section (2) of Section 10 of the B.I.R. Act is that one of the Members shall be its President. Therefore, being a Member of is a pre-requisite and condition precedent for being the President of and no person can be appointed as the President of unless he is a Member of . further held that the absence of any Rules with regard to the appointment on the post of President of except the existing Draft Rules framed by and the Rules as had been framed under proviso to Article 309 of the Constitution vide Gujarat Government Gazette dated 25.2.1965 being only for recruitment for the post of Member, and the Rules for appointment of President, as contained in the Hand Book (1992) that too not in consultation with , the only relevant provision which can be traced is Section 10 of the B.I.R. Act and according to Section 10(2) of the B.I.R. Act, one of the Members of has to be the President. further held that there was no lawful justification for excluding the candidates, who were holding the post of Member, and whereas they have been kept out of consideration on the basis of the proposed Draft Rules, the consideration for making the appointment to the post in question stands vitiated. Elaborating further, held : ", "\"In the first instance, there is no question of appointment by nomination on the basis of the proposed Draft Rules by holding that existing Members were not eligible because they have not completed five years as Member. In a given case when the only mode of appointment is promotion and it is found that no one is eligible for appointment by promotion, it may be open to make appointment by direct recruitment, which would mean inviting application from all eligible candidates and then making the selection. No such procedure has been followed and the consideration was kept confined to the Members of , who had conveyed their willingness for appointment as President of . We find that the procedure, which has been adopted and which has led to the impugned appointment, is not in conformity either with the general right of equality under Article 14 of the Constitution of India and with the right of equality in matters relating to employment as contemplated by Article 16 of the Constitution of India and, therefore, this appointment cannot be sustained in the eye of law. ", ".. ", ". ", "It is also not in dispute that the respondent No.3 had never been appointed as Member of and in terms of Section 10(2) of the Bombay Industrial Relations Act, without being a Member of , there is no question of his appointment as the President of either by promotion or by direct recruitment. Being a Member of is a sine qua non for consideration for the post of President of and no person who is not a Member of could be considered for appointment as such without committing violence to the recruitment of Section 10(2). ", ". ", "..In the instant case, we find that the mode of direct recruitment is not contemplated and even if any direct recruitment is held for the post of President of when no Member is eligible, such direct recruitment is required to be held after affording equal opportunity to all those, who are eligible. The proposed Draft Rules 2(a) seeks to render the Members of the to be ineligible by putting the condition of the completion of 5 years service on the post of Member. When the Act has not put any such fetter and the Act contemplates that one of the Members of the shall be the President and it is not stated that he must complete certain years of service as Member, through executive instructions such a requirement could not be pressed so as to defeat the right of consideration of the Members of the for consideration of the post of the President. Under Section 10(2) every Member of the is eligible to be considered for the post of President notwithstanding the number of years of service put in by him as a Member. ", "In our considered opinion, Section 10 of the Bombay Industrial Relations Act, 1946 is the only relevant provision to be taken note of for the purpose of appointment of the President and the only mode of appointment is by way of promotion from amongst the Members of and in this regard, if any Rules are to be framed in exercise of the powers under Chapter VI of Part VI of the Constitution of India, the same cannot be inconsistent with the requirements of the Bombay Industrial Relations Act, 1946\" ", ", for the reasons stated above, quashed the Notification which is impugned in the applications and further directed the respondents therein to proceed to make the appointment afresh on the post of the President of Gujarat in the light of what has been held in the said order and in accordance with law. ", "Aggrieved by the impugned judgment, the above four appeals, by way of special leave petitions, were preferred by . We heard , learned senior counsel, for the appellants and , learned senior counsel, for the contesting respondents. ", "Learned senior counsel appearing for the appellants submitted that the provisions of Section 10 of the B.I.R. Act clearly spells out that apart from the mode of selecting the President, by promotion from amongst the Members, the President can also directly be appointed from the sitting or retired Judges. He further submitted that the failed to appreciate that Section 10(2) of the B.I.R. Act does not envisage the mode of appointment and that the failed to appreciate that the words of Section 10(2) of the B.I.R. Act are not that the President shall be appointed from one of the current Members of and, therefore, the has erroneously read these words in Section 10(2) of the B.I.R. Act. He further submitted that the failed to appreciate that Section 10(4) of the B.I.R. Act provides for eligibility criteria and fulfills the eligibility criteria. He further submitted that the proceeded on an erroneous footing that the B.I.R. Act does not contemplate the appointment by direct recruitment and only the Members of from the zone of consideration for appointment to the post of President, . ", "Per contra, , learned senior counsel, appearing for the respondents, apart from reiterating the contentions in the applications, submitted that Section 10(2) of the B.I.R. Act clearly indicates that only Member of is eligible for becoming the President of the and that becoming Member of the is sine qua non for being considered for the post of President of the . According to him, does not fulfil any of the three eligibility conditions mentioned in Section 10(4) of the B.I.R. Act and that mandatory consultation with was not followed. He further urged that the plain and natural meaning of Section 10(2) of the B.I.R. Act is capable of only one construction and that is only Members of the could become its President. He further submitted that unless one is or has been the Judge of , the post of the President of the could be filled up only and only by way of promotion, because there exist only one post for the whole State of Gujarat. He further contended that the impugned appointment was void and stillborn since the same was not made by His Excellency, the Governor of Gujarat, but the same was purported to have been made in the name of the Governor of Gujarat. It was further contended that the appointment on a judicial post can be made only by His Excellency, the Governor, under Article 234 of the Constitution of India and the State Government cannot issue Notification appointing Judicial Officer under the business rules by and in the name of His Excellency, the Governor of the State. He further submitted that even assuming the appointment to the post of President can be made through nomination or direct recruitment, all the Members of the were qualified for being appointed as President of the by nomination in accordance with the Draft Rules that were relied upon by the Government supporting the appointment of and that the Members of the were eligible for appointment by nomination according to the Draft Rules also and that Rule 2(ii) of the Draft Rules provides, inter alia, that appointment to the post of President shall be made either (a) by promotion from amongst the Members of the on the basis of seniority-cum-merit subject to the provision that for being considered as eligible for such promotion, the Member concerned should have completed five years' service as a Member of the ; ", "(b) by nomination. Draft Rule 3, inter alia, provides that to be eligible for appointment by nomination, a candidate must have atleast ten years either held a judicial post in India or been a Advocate of or have expert knowledge of industrial matters. It was further contended that the appointment of Shri straightaway by nomination without taking into consideration the cases of nomination of existing Members of who had completed ten years' functioning as a Judicial Officer has been rightly held by the as violative of Articles 14 and 16 of the Constitution of India and that, therefore, no public appointment can be made in disregard of consideration of the cases of those who were qualified for the post. ", "Arguing further, learned senior counsel for the respondents, submitted that the appointment of a Junior Judicial Officer as President of without considering the cases of existing Members of who are senior on the basis of longer experience on equivalent post will also not be conducive to the judicial service which, according to him, will result in a Junior Judicial Officer presiding over who have Members far senior to the President and that Junior Judicial Officer will thus exercise administrative powers of control over undisputedly Senior Judicial Officers. It was further submitted that assuming that a District Judge can be directly appointed to the post of President, carrying a higher pay scale than that of the District Judges in Gujarat, and assuming that even if somebody is already a Member of the Judiciary, he can be nominated or directly appointed and that he did not pass through the channel of promotion or selection meant for those who are already in service in view of Article 234 of the Constitution, even in that case, there was no justification for on the administrative side to pick up who was 9th in the list of seniority at the relevant time. He submitted that the appointment of was also vitiated on account of the fact that if nomination or direct recruitment was a permissible course in the matter of appointment of the President of , then a large number of Judges, Advocates apart from the Members of who had completed ten years of practice or seven years of judicial work were also qualified for that appointment and, therefore, they could not be excluded from consideration. Concluding his arguments, he submitted that 's conclusion that Section 10(2) of the B.I.R. Act does not provide for nomination or direct recruitment and someone has to be appointed from amongst the Members of only is correct and that there is no other provision in the entire B.I.R. Act to provide for the mode of appointment of the President of . In that view, it is quite reasonable to read Section 10(2) of the B.I.R. Act as providing that President can be appointed only from amongst the Members. ", "We have given our thoughtful consideration on the rival submissions made by the respective counsel appearing on either side. Before proceeding to consider the rival submissions, it is useful to reproduce the relevant provisions governing the controversy which run as follows: ", "\"Section 10. Industrial Court.- (1) The State Government shall constitute . ", "(2) shall consist of three or more members, one of whom shall be its President. ", "(3) Every member of shall be a person who is not connected with the industrial dispute referred to such court or with any industry directly affected by such dispute: ", "Provided that no person shall be deemed to be connected with the industrial dispute or with the industry by reason only of the fact that he is a shareholder of an incorporated company which is connected with, or likely to be affected by such industrial dispute; but in such a case, he shall disclose to the nature and extent of the shares held by him in such company. ", "(4) Every member of shall be a person who is or has been a judge of or is eligible for being appointed a judge of such Court: ", "Provided that- ", "(a) a person who has been a Judge not lower in rank than that of Assistant Judge, for not less than three years; or ", "(b) a person who has been the presiding officer of constituted under any law for the time being in force, for not less than five years; or ", "(c) a person who holds a degree in law of a established by law in any part of India and is holding or has held an office not lower in rank than that of Assistant Commissioner of Labour under , for not less than ten years, shall also be eligible for appointment as a member of . ", "Provided further that, one member of may be a person not so eligible, if in the opinion of he possesses expert knowledge of industrial matters. ", "DRAFT RULES ", "1. These rules may be called the Recruitment Rules for the post of President, , Gujarat, 1998. ", "2. The appointment of President, , Gujarat, shall be made by the Governor of Gujarat, in consultation with and , either- ", "(a) by promotion from amongst the Members, on the basis of seniority-cum-merits provided that a person shall not be eligible to be promoted to the post of President, , unless he has completed five years' service on the post of Member, , or ", "(b) by nomination. ", "3. To be eligible for appointment by nomination, mentioned in rule 2(b), a candidate must not be connected with any industry as defined in the Bombay Industrial Relations Act, 1946 and must ", "(i) not be less than 45 years of age, and ", "(ii) have for at least 10 years either held a judicial post in India or been an Advocate for or have expert knowledge of Industrial matters. ", "4. A person appointed by direct recruitment shall normally be on probation for a period of one year and shall have to pass an Examination in Hindi and/or Gujarati, according to the Rules prescribed by the . ", "Existing Rules The Recruitment Rules for the post of President, Industrial Court ,is as under: ", "Unless the post is filled up by appointment of a serving or retired Judge of , appointment shall be made either (a) by nomination or (b) by promotion from among the Members of . ", "To be eligible for appointment by nomination, the candidate must not be connected with any industry as defined in the Bombay Industrial Relations Act, 1946 and must- ", "(i) not be less than 45 years of age; ", "(ii) have for atleast 10 years either held a judicial post in India or been an Advocate for or have expert knowledge of Industrial matters.\" ", "In the background of the facts and circumstances and the provisions of law extracted above, the following points arise for consideration by this Court :- ", "(a) What is the true scope and interpretation of Section 10(2) read with Section 10(4) of the B.I.R. Act ? ", "(b) Whether Section 10(2) of the B.I.R. Act can be read to mean that the President of must be appointed from among the existing Members of when the provision in fact is not in such terms? ", "(c) Whether the reading of the provisions of Section 10 of the B.I.R. Act clearly spells out that apart from the mode of selecting the President, by promotion from amongst the Members, the President can also directly be appointed from the sitting or retired Judges or from the Judges of , Ahmedabad and District Judges, who fulfills the eligibility requirement for appointment as Member of ? ", "(d) Whether has failed to appreciate that Section 10(2) of the B.I.R. Act does not envisage the mode of appointment? ", "Our attention was drawn to the relevant pleadings filed before and also in this Court. ", "As already noticed, the appointment of as the President of vide Notification dated 7.12.2000 issued by , , is under challenge by way of these appeals. The circumstances and the process, which had culminated in the appointment of as the President of , had been fully narrated in the affidavit in reply filed on behalf of respondent No.2 in . Since , who was working as the President of , was to retire on 31.1.2000 and, therefore, , , sent a communication dated 7.1.2000 to of Gujarat, inter alia, stating therein that, due to the retirement of , the post will fall vacant and the question of preparing recruitment Rules for the post of President of is under consideration by and till the Rules are not finalized, cannot take a decision in respect of the appointment on the said post. Under these circumstances, it was decided to place the matter for consideration of of of Gujarat, as to by which mode the post of the President, is to be filled up. Accordingly, the said matter was considered by of of Gujarat and it was decided on 8.2.2000 that the post of President, , Ahmedabad, be filled up by nomination under clause (b) of Rule 2 of the proposed Rules, as none of the present Members of is eligible to be appointed to the said post by promotion, having not completed five years' service on the post of Member, . The claim of all the incumbents of the post of Member of was examined in light of the criteria prescribed by of Gujarat for appointment on the post of President of . It was decided by to fill up the post of President of by nomination as stated above. In the light of the decision of to fill up the post of the President of by way of nomination, it was further decided to ask for the willingness of the Judicial Officers working in the cadres of City Civil Court Judges and District Judges, who are not less than 45 years of age and have put in ten years of service in judiciary including the period of practice at the for being considered for appointment in question. Pursuant to the said decision, the willingness was called for and in all, nine judicial officers had expressed willingness for being considered for the post in question, the details of which have been furnished at page 92 of the paper book. Thereafter, the said matter was placed for consideration of of of Gujarat and in the meeting of held on 30.3.2000, it was decided to direct the office to resubmit the matter along with the recruitment Rules prescribing eligibility criteria for appointment to the post of President, . Pursuant to the said decision, the matter was again considered in the light of the existing Rule provision by the office. As per the directions of , the matter was again placed before for further consideration along with the Rule stated above. In the meeting of of held on 1.5.2000, the consideration of the subject was deferred, however, in the meantime, the office was directed to resubmit the matter, pointing out the provisions of law in the matter, particularly mentioning the provisions regarding eligibility, experience and age of superannuation etc. prescribed for the post in question. Pursuant to the said direction of , a detailed note was submitted for consideration of and after considering all aspects, in the meeting held on 29.6.2000, had taken decision to the effect that the name of , Joint District Judge, Vadodara may be recommended to , , for appointment as President of , Ahmedabad by nomination provided under the Recruitment Rules for the post in question. Accordingly, the office had sent a communication to the on 5.7.2000 recommending the name of for appointment on the post of President, , Ahmedabad. Soon after the recommendation was made by to the as aforesaid, a representation was received by from , the President, , Ahmedabad in connection with the filling up of the post of President, , Ahmedabad. In this connection, was called for personal hearing on 11.8.2000 and he was heard by the Chief Justice on the issue. Again, , President (In- charge) of vide his letter dated 4.11.2000 expressed his unwillingness to be promoted as the President of . ", "On the basis of what is stated above, it is clear that the decision to fill up the post of the President of by way of nomination as provided under the Rules, was arrived at, after considering all aspects, not only that the process of selecting the person to be recommended to the Government was also undertaken transparently and before taking the decision, the matter was considered from time and again by of the High Court of Gujarat and after due consideration and deliberations, the decision was taken to recommend the name of Shri . Considering the totality of the facts, it is clear to us that there is neither illegality nor arbitrariness in taking the decision of recommending the name of Shri for appointment on the post of President, , Ahmedabad. ", "It is seen from the records that at the request of the , the eligibility criteria for appointment on the post of President, has been determined by and the same has been incorporated in the Draft Recruitment Rules. We have already extracted Rules 2 & 3 of the Draft Recruitment Rules. Shri is eligible for the post of the President, , Ahmedabad as he has completed ten years' service in judiciary including the period of practice at the . The period of practice/service of Shri is given below:- ", "\"Period of Practice/Service or Mr. ", "1.8.1978 to 30.11.1983 :- Worked as Civil Judge(JD) Resigned on :- 30.11.1983 Period of Practice :- Enrolment No.G/296/1974 on 30.10.74 Practice : 30.10.1974 to 31.7.1978 1.12.1983 to 19.2.1992 From 20.2.1992 to 22.12.1999 -Addl. Public Prosecutor, , Ahmedabad From 23.12.1999 to 21.12.2000 - Worked in the cadre of District Judge at Vadodara. From 22.12.2000 - As President, .\" - ", "In our opinion, in the case of appointment of President of by nomination, it is not necessary that he must be appointed as Member at the first instance. Section 10(2) of the B.I.R. Act deals with the composition of , which does not lay down the mode of appointment. The words of Section 10(2) of the B.I.R. Act are not that the President shall be appointed from one of the current Members of . In our view, has erroneously read these words in Section 10(2) of the B.I.R. Act. It is also seen that the proposed Recruitment Rules were framed by at the request of the and pending approval of the . We are, therefore, of the opinion that the appointment of as President of is not in breach of Section 10(2) of the B.I.R. Act and also not violative of Articles 14 and 16 of the Constitution of India. To be eligible for appointment by nomination, the candidate must not be connected with any Industry as defined in the B.I.R. Act and must (1) not be less than 45 years of age, and (2) have for atleast ten years either held a judicial post in India or been an advocate for or have expert knowledge of Industrial matters. Based on the recommendation of , on its administrative side, the of Gujarat issued the Notification on 7.12.2000 whereby had been appointed as the President of . Considering the totality of the facts, it is clear that by recommending the appointment in question, of Gujarat had not only acted within its rights but the same had been done in due discharge of the constitutional duty. ", "In our view, Section 10(2) of the B.I.R. Act cannot be read to mean that the President of must be appointed from amongst the existing Members of when the provision in fact is not in such terms. has confused the concept of the President of being from among the Members of the said Court with the erroneous concept that the said President must be from amongst the existing members of that Court. A reading of the provisions of Section 10 of the B.I.R. Act clearly spells out that, apart from the mode of selecting the President by promotion amongst the Members, the President can also directly be appointed from the sitting or retired Judges or from the Judges of , Ahmedabad and District Judges, who fulfills the eligibility requirement for appointment as Member of . , in our view, has failed to appreciate that the words of Section 10(2) of the B.I.R. Act are not \"that the President shall be appointed from one of the current Members of \". The narrow interpretation of Section 10(2) of the B.I.R. Act and the reasoning of the , in our view, completely rules out the appointment of President, through the mode of nomination. In other words, the failed to appreciate that once a person is appointed as the President of , he automatically becomes a Member. Section 10(2) of the B.I.R. Act only envisages that the President is the senior Member of and that the appointment of President of is inherent in his appointment as Member of . ", "This Court, in the case of ., , held that the Judges and the Judges of belong to Judicial service and recruitment is to be made in accordance with Article 234 of the Constitution of India. The existing Recruitment Rules did not comply with the provision of Article 234 of the Constitution of India. The State Government, therefore, referred to for consultation and approval of the Rules. The administrative side of framed the Draft Rules and the appointment offered to was in accordance with the Draft Rules. This apart, the eligibility criteria for appointment on the post of the President of has been determined by the High court and the same has been incorporated in the Draft Recruitment Rules at the request of the Government. ", "For the foregoing reasons, we are of the opinion that no illegality is committed by recommending the name of as the President of , for appointment by nomination. ", "The appeals are allowed. However, in the facts and circumstances of the case, there shall be no order as to costs."], "relevant_candidates": ["0001353604"]} {"id": "0001064244", "text": ["JUDGMENT , ", "1. This is an appeal by the plaintiff, against the order of the learned single Judge in IA 2094/94 in Suit 432/94 dated 31.10.1995. By that order, the learned Single Judge dismissed the application of the appellant for grant of temporary injunction under Order 39 Rule 1 CPC against the respondent. The dispute pertains to trade mark, emphasis being on trade dress. Though reference is made in the grounds of appeal to the carton being a piece of artistic work within Section 2(c) of the Copyright Act, arguments were mainly focussed on 'trade dress'. ", "2. The appellant sells Corn Flakes with cartons which describe the cartons as '' (the original and the best). The respondent is selling corn flakes using a carton more or less similar in size but with the title \"AIMS ARISTO CORN FLAKES\" written just at the place where appellant's display the words ''. This is done at the left hand top of the carton. The appellants grievance in the suit as well as in the IA was that the carton was likely to confuse the buyers of corn-flakes and there was every likelihood of consumers purchasing the respondent's goods in the belief that they were of the appellant. The learned single Judge after referring to the case-law pertaining to 'trade dress', of the appellant dismissed the IA observing : ", "\"If the trade dress in this case is as was found in the above case (i.e., and others v. ((1978) RPC 635). I would have had no hesitation to accept the arguments of Mr. . Applying the test laid down therein, I am of the view that the trade dress of the defendant in this case is entirely .... different from the trade dress of the plaintiff and there is absolutely no scope for any confusion.\" ", "On that basis, the learned Judge stated that the appellant had not proved prima facie case nor balance of convenience and hence no injunction could be granted. ", "3. In this appeal, we have heard learned counsel, for the appellant at the stage of admission. Learned counsel for the defendant was also present. ", "4. It was contended before us that the learned single Judge, having accepted the legal principles relied upon for the appellant in respect of 'trade dress' erred, on facts, in holding that there was no scope for confusion among the consumers. It was pointed that the size and shape of the carton was similar being rectangular, that in the words 'FLAKES' in the appellant's carton the words L and A were joined together closely or rather touch each other, that respondent also described his goods as original and the best, that both contain a picture of the corn flakes, that there was a small square on the left hand top where the words ' CORN FLAKES' were written inside the square, and that the respondent had also put a square on the left hand top with the words 'AIMS ARISTO CORN FLAKES'. It was further stated that in all the cartons of in regard to various commodities, there was a red-band at the top which took off from the square on the left top and ran horizontally across on the front top into the right and to the other sides and respondent also used a similar red band taking off horizontally from the square on the left top. It was also argued that even in regard to the square on the left side top, used an inner red border, then a white gap, and then an outer green border, running all along the sides of the square while respondent was also using the same red and green borders for the square on the left top. It was argued that these similarities in dress were so clear that purchasers were sure to be misled. It was submitted that there was a presumption that the consumer's memory was short and if a consumer had purchased a carton of appellant's at one point of time, he would easily mistake the respondent's carton for the appellant's. It was further submitted that respondent had done this with dishonest intention. ", "5. Before we go into the above aspects, it is necessary to refer to a few more facts. If we look at the appellant's carton, we find that the words ' is displayed very prominently in fairly big letters, above the words, 'CORN FLAKES' in the square on the left hand top. Then to the right of the words ' CORN FLAKES' there is the picture of the face of a hen, upto its neck. There is a bowl containing corn flakes and a cherry therein with a big spoon. Pouring of milk is shown into the plate. On the right side of the carton, it is stated prominently that the flakes are 99% fat free. ", "6. When we come to the respondent's carton, we have in the left hand top rectangle the words 'AIMS ARISTO' corn flakes prominently written. We also have ISI in a smaller rectangular bracket but shown quite prominently below the rectangle on the left-top, a plate blue in colour with corn flakes and cashew etc. There is no picture of milk pouring into the plate. ", "7. In other words, while in the rectangle on the left hand top, the words 's corn flakes are prominent for the appellant, the words 'AIMS ARISTO' corn flakes appear very prominently for the respondent, at the same place. ", "8. It is true that the appellant has referred to certain similarities in the size and shape of the carton, there being a square on the left top with word '; the words L and A being joined, border being red and green and a red band running round in the top horizontally. It is true that these similarities were not set out in the order. But in our prima facie view, the prominent display of the words '' in bold red letters in white background inside the square on the left-top appellant's carton cannot go unnoticed by any buyer. We have to understand the learned Judge's words \"trade dress of the plaintiff is entirely different\", in that light, prima facie. ", "9. The law relating to 'trade dress' is very clear. in 'Law of Trade Marks' (12th Ed. 1986, para 16.67) says that it is usually true in some degree that a trader's goods are recognised by their general appearance, or \"get-up\". Accordingly, resemblance or 'get-up' is not uncommonly an ingredient in passing-off, and it is possible for imitation of get-up alone to amount to passing-off. Such cases are rare, since few traders rely on get-up alone to distinguish their goods, so that trade names and word trade marks are ordinarily present too, and the author says : ", "\"and in these days, in this country, a difference in names is enough to warn the public that they are getting one trader's goods and not the others\" (Sapers v. ((1953) 70 RPC 173)\". ", "In v. (1976 RPC 653), the plaintiff's bag displayed the words \"Fison's Gro Bag\" while the defendant's bag contained the words ' Crop-Bag; and it was held that the prominence given to the name overshadowed the other similarities in get-up. The plastic bags were peculiar. The plaintiffs were manufacturers of the plastic bag filled with a peat-based compost from which plastic rectangles could be removed thereby exposing the compost beneath the plastic. Seedlings could then be planted in the compost so that the bag could function as containing growing element. The bag was partly over-printed with horticultural decoration and instructions and marked ' Gro Bag'. They were in market for 2 years. The defendants were peat merchants and got plastic bags produced with \"identical size\" and which bore \"over-printed\" instructions and decoration somewhat similar to those of the plaintiff's bag. While refusing injunction, observed that even accepting that the plaintiff's had a get-up reputation in their growing bags and though there were obvious similarities between the bags in issue, it was inconceivable that any one seeing the defendant's grow bag could fall to observe that it was a product of the defendants' and that a normal purchaser could not be misled. He further said that \"if the Gro-Bag had not contained the name \"\" or if the name \"\" had not been so prominently displayed, by the defendants, he might have reached a different conclusion. He doubted whether they could have done more to signify to a buyer that he was watching at a product of and not at a product of '. ", "10. (22. RPC 327), was also a case of similar 'get-up'. The plaintiff was selling, for 15 years, dried materials for soup in packets of certain size, shape and printing put in steel boxes of a peculiar kind, with the words '' displayed thereon. Later, defendants started selling similar preparations for soup which were put up in a series of similar packets and boxes, and the name ''s \"appearing at the place where \" appeared on the plaintiff's goods. The plaintiffs also complained against the wrapper of the defendants containing untrue statement as to Prize medals and awards in the same manner as the true statements of the plaintiff. refused to grant injunction and in , while confirming his order, observed that the word '' being printed prominently on the packets and the words '' printed on defendant's packets, there was no scope for confusion in spite of the similarity in the packets and boxes. ", "11. In yet another case, relating to similarity in trade-dress, , in v. ((1981) RPC 429), confirmed the judgment of of of New South Wales. In that case, the plaintiffs were selling lemon squash under the name 'Sole' in greenish-yellow cans with a medallion type label. The defendants launched a lemon squash called 'Pub Squash' and the label was of a medallion type bearing the words 'Pub Squash' on the label. The cans were of the same size and shape with colour yellow as those of plaintiff. The proceedings of the plaintiff brought on the ground of passing off, unfair trading etc. were dismissed. Judgment of is elaborate and he held that the defendants had sufficiently differentiated their product by their 'name'. On appeal to , it was observed that over emphasis on advertised description of a product might indeed lead to stifling of competition. Lord said : ", "\"But competition must remain free, and competition is safeguarded by the necessity for the plaintiff to prove that he has built up an intangible property right' in the advertised description of his product, or, in other words, that he has succeeded by such methods in giving his product a distinctive character accepts by the market. A defendant, however, does no wrong by entering a market created by another and then competing with its creator. The line may be difficult to draw; but, unless it is drawn, competition will be stifled.\" ", "Their Lordships then said that the test applied by, in the instant case was that one has to see whether the consuming public would be confused or misled by the get-up, the formula or the advertising of the respondent's product into thinking that it was the appellant's dissimilar product. held on the facts, that the public were not so decieved. ", "12. In v. ((1905) 22 RPC), the appellant was selling Soda Water in bottles, with a neck label around then, the body of the label being of chocolate colour with a white border and a red medallion in the centre of the label. The respondents, subsequently, sold soda water in bottles with a somewhat similar neck lable round them in same colour and with a central red medallion. However, appellants' labels showed ''s soda water' printed on them in white characters while respondents' contained the name ' Soda Water'. Action by plaintiffs failed. It was held by that a fraudulent intent cannot be presumed inspite of the similarities in the bottles, labels colour and medallion because the distinguishing feature of name adopted by defendants showed that they had no intention to deceive purchasers. Lord LC said : ", "\"I should have thought if you looked at the two bottles together no human being could have mistaken one for the other. If 'Royal' and 'Flag' were sufficiently distinctive in the case to which the learned counsel called our attention . (17 RPC 628), I should have thought 'Gibbens' and 'Schwappes' are equally impossible to be confounded with each other.\" ", "Lord said it was \"ridiculous\" to apply the principle of similarity in trade dress in such a situation. He said : ", "\"I can quite understand a case in which, although colourably a defendant has introduced his own name, yet the nature of the wrapping up, the nature of the package itself, or, in this case, the shape of the bottle, may all have been so closely imitated that the mere introduction of some distinctive mark, to which no ordinary observer would have applied his mind, will not get rid of the obvious intention to pass one goods off as the other; but to apply the proposition to this case appears to me to be a little short of ridiculous\". ", "It was held that the name of '' was so plainly placed upon the bottle as it could possibly be and it was in the place where 'Schweppes' was on the bottle of the appellant, and there was no intention to deceive. ", "13. The above case also answers the contention of fraudulent intent argued by the appellant's counsel before us. Similar views as to absence of fraudulent intent were expressed in . (supra), also, to which we have already referred and which came from New South Wales before (1981) RPC 429 (PC). ", "14. In the present case, in spite of any other close resemble ness in the cartons, the name '' written prominently on the respondents carton would, in our view, prima facie, as in case before Lord show that there was no intention on the part of the defendant to play fraud by misrepresenting his goods as the goods of the appellant. In that very case, Lord bury emhasized the need to see the whole description on the goods as one whole and not the individual features in isolation. He said : ", "\"Inasmuch as you and certainly not to impute fraud without proof, you are not to suggest that people are fradulently committing some commercial trick without sufficient evidence, and I cannot conceive here how anybody could gravely argue that the one thing could be mistaken for the other by anybody who looked as it. ", "**** *** *** *** *** The whole question is these cases is whether the thing - taken in its entirety, looking at the whole thing, is such that in the ordinary course of things a person with reasonable apprehension and with proper eyesight would be deceived.\" ", "Thus, the above case also lays down that the trade dress or rather the whole thing must be seen in its entirely and not parts in isolation. It is not permissible, therefore to say that the square on the left side top had a small red and green border or there was a red band horizontally and defendant's carton if examined from close quarters, showed these feature. Viewed as a whole, one can see that the words , and are prominently displayed on each and therefore there can be no confusion, prima facie. ", "15. That brings us finally to the question of the failing memory of the customer. The argument is that customer's have short memory and that if the trade dress is similar, the customers are likely to get con fused. ", "16. It has now been held that there are limitations to the theory of imperfect memory. Halsbury's Laws of England (4th Ed.) (Vol. 48, para 139) says that this principle of imperfect recollection must not be pressed too far. It says : ", "\"The must bear in mind that the marks will not normally be seen side by side and quard against the danger that a person seeing the new mark may think that it is the same as one he has seen before, or even that it is a new or associated mark of the proprietor of the formal mark. However, the doctrine of imperfect recollection must not been pressed too far v. ((1954) 71 RPC 455 at 457). Marks are often remembered by general impressions of by same essential feature ( ((1951) 68 RPC 106 (PC) 289), (on appeal 71 RPC 348. (CA). ", "In fact in case above referred to, Lord said \"and if a person is so careless that he does not look, and does not, ........... treats the label fairly but takes the bottle without sufficient consideration and without reading what is written very plainly indeed up - the face of the label on which the trade has placed his own name, then you certainly cannot say he is deceived in fact, he does not care which it is. That would be the true interference which I think a person would draw from conduct so described.\" ", "17. Having dealt with the contention of imperfect memory of the coustomer, we shall now deal with the class of purchasers, which is also an important factor. who are the persons who go to purchase ''s' Corn Flakes ? Prima facie, in our opinion, these people belong to a middle-class or upper middle class and above who are fairly educated in English and are able to distinguish \"'s\" and what is not \"\". In American Jurisprudence (2d) (Trade Marks Supp. para 19 page 178) it is said that it is necessary to note the fact : ", "\"that customers for fasteners are sophisticated and discerning, that defendant acted with goods faith. ", "The case was one where customers purchasers of fasteners in the automobile industry. ( v. (LDC III (US PU 106\")). Again , Law of Trade Marks (12th Ed. 1980) (Para 1706) says that : ", "\"If the goods are expensive and not of a kind usually selected without deliberation, and the customers generally educated persons, these are all matters to be considered (Piano list ((1906) 23 RPC 774), Claudiness Ash v. Invica ((1911) 28 RPC 597 = 29 RPC 465 (CA) (HL) (dentists), Rysta (1943) 60 RPC 87). ", "18. In Piano list's (supra) case an application was made for the registration as a trade mark of the word 'Neola' for \"piano player\" being a musical instrument included in class 9\". Coming to know of this application, the registered proprietors of the trade mark \"Pinole\" who were registered for all goods in class 9, opposed the above application for registration. The Registrar overruled the objection and ordered registration. On appeal, Justice said that having regard to the kind of customers\" for such goods and the distinction in the names, there was not likely to be any confusion and dismissed the appeal. ", "19. If that was so between 'Neole' and '', the case of and , in our prima facie view, presents no difficulty for distinct identification. in fact observed in the above case : ", "\"Of course, one knows that the persons who buy these articles are generally persons, of some education, ........ my opinion is, having regard to the nature of the customer, the article in question and the price at which it is likely to be sold, and all the surrounding circumstances, no man of ordinary intelligence is likely to be deceived ...\" ", "We are, on the facts of the case before us, prima facie of the same opinion in regard to and . ", "20. Learned counsel for the appellant placed reliance on v. , (supra). In that case, the plaintiff was selling toothpaste as \"\". The appellant used packages with colours red, white and dark blue the respondents also used red, white and blue. It was held that the defendant borrowed features from the plaintiff's packaging, tubes and labels and the ordinary purchaser of normal memory was not to be expected to examine the goods keeping them side by side, and the get-up would cause confusion. In our prima facie view, this case is clearly distinguishable because, apart from the fact that the get up was the same, the name used by the defendant was found to be deceptively similar. The question of imperfect memory was relevant there because the purchaser could be a person who would not discern whether the tooth paste was or . ", "21. We shall now deal with likewise . ((1989) (1959) RPC 83), cited for the appellant. There, no doubt, both parties sold sweet or 'fruit drops' in decorated tins. No doubt the names, fruit flavoured drops and fruit flavoured drops were somewhat different but, if one looks at the box, one can find the trade dress was too prominent and the names not that prominent. The learned Judge , J. held that it was possible that purchasers might get confused. Prima facie, the case goes against the view expressed by in the cases referred to above. Further this case has been placed in a special category by writers because here the picture of the sweets on the top of the boxes was so similar, spreading over the entire face of the box, and the learned Judge felt more impressed by that fact though the names were not so similar, this view appears from Halsbury's Law of England 4th Ed. para 168 which says that we should look at the photographs of the boxes. says (para 16.6.7) that this case was treated as a case of deliberate copying offending plaintiff's copyright. It was also held that there was infringement of registered trade mark. So far as passing off was concerned, it was seen as a case where having regard to the arrangement of the picture of the sweets on the top of the box, that a person with imperfect memory could be misled. Monday v. ((1905) 22 RPC 273), cited for the appellant is also distinguishable. The appellants mark there was of an 'ace of clubs' with the word 'club' upon bottles which were sold with label \"Club Black Enamel\", while defendants did likewise sell with 'ace of spades' and label \"hub Black Enamel\". Injunction was granted on the ground of fraudulent get up. The words 'Hub' and 'club' were treated as similar and likely to create confusion. This case is also distinguishable. ", "22. In the result, on our prima facie conclusions, we reject the plea of similarity or likelihood of confusion, we reject the plea of fraud as well as the one based on imperfect memory. We are of the view, prima facie that even though the get up is similar, the different names and prominently displayed, make all the difference and this is not a fit case for interference with the order of the learned Single Judge refusing injunction. ", "23. These are prima facie views and it is made clear that the suit will be disposed of on the basis of such evidence as may be produced therein without being influenced by anything said here. Appeal is dismissed."], "relevant_candidates": ["0000450722", "0000837072", "0001070490", "0004517240"]} {"id": "0001067634", "text": ["JUDGMENT , J. ", "1. In this application, the applicant- (hereinafter referred to as \"the \"), has made two prayers. Firstly, the applicant has prayed for modification of the order dated October 31, 1996, made in Company Petition No. 17 of 1989, to the extent this court directed the official liquidator to forthwith take charge of all the properties and effects of the first respondent, (hereinafter referred to as \"the company\"), and to exempt from the direction given in the said order in so far as it relates to the assets taken over by the pursuant to the mahazar dated December 11, 1989, prepared by the and their sale in favour of the second respondent ; and, secondly, to permit the to hand over the assets of the company to the second respondent pursuant to the sale of the assets of the company made in favour of the second respondent. ", "2. The facts, which are relevant for the disposal of this application, may be briefly stated as hereunder : ", "(a) instituted proceedings in Company Petition No. 17 of 1989, under Section 433(e) and 433(f) read with Section 439 of the Companies Act (hereinafter referred to as \"the Act\") for winding up of the company on January 21, 1989, and on the said company petition, this court directed notice on February 16, 1989, and thereafter, the company came to be wound up by this court by its order dated March 25, 1994. Subsequently, the said order was recalled on June 2, 1995. ", "(b) It is on record that the had in all advanced a sum of Rs. 76 lakhs to the company on the security of the assets of the company, which have been mortgaged/hypothecated to the . Since, the company failed to repay the loan taken from the as per the terms and conditions of the loan advanced and committed default in payment of the loan advanced by the and the company was due in a sum of Rs. 1,46,36,070 as on September 15, 1989, to the , in exercise of the power conferred on it under Section 29 of the State Financial s Act, 1951 (hereinafter referred to as \"the Financial s Act \"), took possession of the assets of the company on December 1, 1989. Thereafter, the company had raised a reference before (hereinafter referred to as \"the \"). In Case No. 28 of 1989, as provided under the provisions of the Sick Industrial Companies (Special Provisions) Act , 1985 (hereinafter referred to as \"the SIC Act\"). The , by its order dated August 26, 1993, recommended winding up of the company in the event of the failure of the company to submit a viable scheme for rehabilitation in exercise of the power conferred on it under Section 20 of the SIC Act. In the same order, the had authorised the to take steps for the sale of the assets of the company in its possession subject to the terms and conditions imposed in the said order. A copy of the order dated August 26, 1993, passed by the has been produced as annexure-H to this application. Pursuant to the order, annexure-H, the notified the sale of the assets of the company by issuing advertisements in (Calcutta Edition), dated March 13, 1994, Bangalore Edition, dated March 7, 1994, , dated March 8, 1994, Delhi Editions both dated March 9, 1994, and , dated March 7, 1994. In the advertisement issued in the papers, referred to above, it was notified, among other things, that persons interested in the purchase of the assets of the company, could inspect the land, building and machinery on March 18, 1994, between 11 a.m. and 5 p.m. and should send their sealed offers to the before March 30, 1994 (4 p.m.), along with an EMD as per the details set out in the said advertisement. It is, further, notified in the said paper publication that the offer made by the intending purchasers would be opened on March 30, 1994, itself at 5 p.m., in the office of the general manager (Operations) of the in the presence of the tenderers. The offer submitted by the second respondent being the highest, the same was placed before the for approval and the , by its order dated October 26, 1995, accorded its approval for conclusion of the sale in favour of the second respondent for a total sale consideration of Rs. 2 crorcs and 80 lakhs in terms of the conditions in Clause 10(j) of its order anneuxre-H, dated August 26, 1993. Pursuant to the approval accorded by the , the had issued sale letter dated December 28, 1995, to the second respondent, a copy of which has be'en produced as annexure-R to this application. The second respondent, by its letter dated December 28, 1995, accepted all the conditions stipulated in the letter, annexure-R, issued by the . Thereafter, the second respondent, as per the terms and conditions of the sale, had paid the entire sale consideration of Rs. 2 crores and 80 lakhs to the . ", "(c) Aggrieved by the order annexure-H dated August 26, 1993, passed by the , the company had filed an appeal before as provided under the SIC Act and , by its order dated April 25, 1995, dismissed the appeal. This court, by its order dated April 25, 1995, recalled the order dated March 25, 1994, winding up the company on the ground that the appeal filed by the company against the order annexure-H was pending consideration before on the date of the winding up order made by this court on March 25, 1994. Subsequently, on the dismissal of the appeal by on April 25, 1995, this court, by its order dated October 31, 1996, allowed Company Petition No. 17 of 1989, and ordered for winding up of the company and the official liquidator came to be appointed as liquidator of the company and he was directed to forthwith take charge of all the properties and assets of the company. ", "(d) In the meanwhile, aggrieved by the sale of the assets of the company approved by the , the company had filed Writ Petition No. 8760 of 1994, before this court and obtained an ex-parte interim order of stay of the sale on March 29, 1994. Subsequently, this court, by its order dated October 26, 1994, vacated the said ex parte interim order and the said writ petition also came to be rejected by this court, by its order dated September 25, 1996. ", "(e) Thereafter, the company had filed one more writ petition, Writ Petition No. 8025 of 1996, and again obtained an ex parte interim order of stay of the sale of the assets of the company. This court, by its order dated April 10, 1996, discontinued the ex parte interim order earlier granted and the said order was challenged in Writ Appeal No. 1825 of 1996, which came to be dismissed by the Division Bench of this court, by its order dated June 28, 1996. Further, it is also on record that one had filed a suit, O. S. No. 684 of 1996, before the court of the Principal Civil Judge, Bangalore (Rural), seeking an order of injunction restraining the and the company from disposing of the assets of the company and obtained an ex parte order of temporary injunction against the and the company. However, the learned city civil judge, by his order dated December 20, 1996, vacated the said ex parte order of temporary injunction, Thereafter, one Sri Raj Kotak, who was the director of the company, filed one more writ petitions (i.e., third in the series), Writ Petition No. 34402 of 1996, challenging the sale of the assets of the company. However, in the said writ petition, this court, by its order dated December 20, 1996, observed that the sale of the assets of the company is subject to the result of the writ petition. ", "(f) During the pendency of this application, the aforesaid had filed Company Application No. 109 of 1997, seeking permission of this court to come on record as supplemental respondent No. 3 in this application, i.e., Company Application No, 64 of 1997. The said application was allowed by this court by its order dated September 17, 1997. Further, during the pendency of this application, by means of order dated August 13, 1997, this court had directed the applicant in Company Application No. 109 of 1997, i.e., the third respondent in this application, to furnish the valuation report of the company in respect of the assets sold by the company on the date of the sale either from an approved valuer or a valuer. Pursuant to the said order, the third respondent has filed three valuation reports dated August 21, 1997, March 1, 1993, and July 11, 1996, given by one Sri , chartered engineer and approved valuer. As per the valuation report dated August 21, 1997, the total value of the assets of the company as on April/ September, 1994, was in a sum of Rs. 5,56,00,000. As per the valuation report dated March 1, 1993, the total value of the assets of the company as on March, 1993, was in a sum of Rs. 4,87,50,000. As per the valuation report dated July 11, 1997, the total value of the assets of the company as on October 1, 1995, was in a sum of Rs. 6,24,50,000. ", "I have elaborately heard , learned counsel for the applicant, , learned counsel for the official liquidator, , learned senior counsel appearing along with for respondent No. 2, and , learned counsel for respondent No. 3. ", "3. The second respondent supported the application. The submissions of , learned senior counsel, and , learned counsel for the applicant, are identical. According to them, the sale of the assets of the company cannot be treated either as illegal or void in law on the ground that the sale has been done without the leave of this court. Elaborating this submission, they, firstly, submitted that the law is firmly established that the secured creditor can stand outside the winding up proceedings and realise his security without the intervention of the court by effecting the sale of the mortgaged property by private or public sale; and leave of the court is necessary only when intervention of the court is sought for realising the security; and in this case, the sale of the assets of the company having been made in exercise of the statutory power conferred on the under Sub-section (4) of Section 20 of the Act, the sale effected is perfectly valid in law and the properties in question do not vest with the official liquidator on winding up of the company. It is their contention that since on the date of the winding up order passed by this court on October 31, 1996, in Company Petition No. 17 of 1989, the assets of the company having been sold pursuant to the proceedings initiated under the provisions of the SIC Act and the sale of the assets of the company having been approved by the and having become final, it is not permissible for the official liquidator to take possession of the said assets, which have already been sold to the second respondent. Secondly, they submitted that the SIC Act is a special enactment and the provisions contained in the said enactment will prevail over the provisions contained in the Act. In this connection, they drew my attention to Sub-section (4) of Section 20 of the Act, which confers power on the to get the assets of a sick industrial company sold in such manner as it may deem fit and forward the sale proceeds to this court for orders for distribution in accordance with the provisions of Section 529A and other provisions of the Act, and also Section 32 of the SIC Act, which provides that the provisions of the SIC Act and of any Rules or Scheme made thereunder, shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act , 1973, and the Urban Land (Ceiling and Regulation) Act , 1976, or the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any law other than the SIC Act, etc. Therefore, relying upon the said provisions, they submitted that since the assets of the company were sold after giving wide publicity and the offer made by the second respondent, which was the highest offer, having been accepted by the ; and the same also having been approved by the , there is absolutely no justification to nullify the sale or prevent the from handing over the assets of the company to the second respondent as per the terms and conditions of the sale. Thirdly, they submitted that since the sale of the assets of the company has been made prior to the order of winding up made on October 31, 1996, which has been approved by the , the provisions contained in the Act, which requires the leave of the court for the sale of the assets of the company, which is under winding up, cannot be made applicable. Fourthly, they submitted that as a matter of fact, since wide publicity in respect of the sale of the assets of the company has been given in leading newspapers, which have wide circulation in the country, and also in a daily, which has wide circulation in the State, and the sale made was approved by the , which consists of members of high reputation and vast experience, by no stretch of imagination can it be said that the interests of the company or the workmen or the creditors of the company have been jeopardised or affected in any manner on account of the sale of the assets of the company. Therefore, they submitted that so long as it is not shown that the sale of the assets of the company has resulted in serious prejudice to the company and every one interested in the company, the sale of the assets of the company made should hot be nullified by this court. Further, relying upon the orders made by this court in the writ petitions filed by the company and its directors and also the suit. O. S. No. 684 of 1996, filed by Super Sales , they submitted that every effort was made by the company and its directors to nullify the sale without any justifiable cause and if the is not permitted to hand over possession of the assets of the company pursuant to the sale made to the second respondent, as per the terms and conditions of the sale, it would result in irreparable injury to the and also to the second respondent. Sri submitted that huge money is outstanding to the , a public financial institution, and any delay in realisation of the money due to the would result in serious financial loss to the and other creditors. In the same tone, Sri also submitted that the second respondent, in terms and conditions of the sale, has already deposited Rs. 2 crores and 80 lakhs and if, at this stage, this court takes the view that the sale of the assets of the company effected is not valid, it would result in irreparable injury to the second respondent, He further pointed out that even on this date, the third respondent has not been able to get an offer from any person for a price much more than the one at which the assets of the company are sold to the second respondent. He also submitted that it is well settled that in a court sale or a distress sale, normally the real market value in respect of an asset is not secured and that cannot be a ground to nullify the sale. Learned counsel, in support of the submissions made by them, relied upon the following decisions : ", "(1) , (2) , (3) P.) .) Ltd., , (4) . 72 Comp Cas 5 (Delhi), (5) , (6) . 81 Comp Cas 50 (Raj), (7) . 81 Comp Cas 13 ; 4 SCC 159, (8) Gujarat State Financial Corporation v. Official Liquidator, 87 Comp Cas 658 ; 1 Comp LJ 503 (Guj), (9) , (10) , and (11) 42 Comp Cas 168 ; . ", "Repelling the contentions advanced by and , , learned counsel for the official liquidator, and , learned counsel for the third respondent, submitted that the proviso given to Section 529(1)(c) of the Act makes the security of every secured creditor subject to a pari passu charge in favour of the workmen to the extent of the workmen's portion therein, and where a secured creditor, instead of relinquishing his security and proving his debt, seeks to realise the security, the liquidator is entitled to represent the workmen and enforce such charge ; and any amount realised by the liquidator by way of enforcement of such charge shall be applied rateably for the discharge of workmen's dues and so much of the debt due to such secured creditor as could not be realised by him, shall rank pari passu with the workmen's dues and, therefore, whenever there is a pari passu charge over any property of a company in winding up by virtue of the proviso to Section 529 of the Act, leave of the company court is necessary for the sale of the property as the charge-holder is the official liquidator. They pointed out that admittedly, in this case, when the property in question was caused to be sold by the applicant, the proceedings for winding up had already been initiated and as a matter of fact, the company also was wound up, by the order dated March 25, 1994, though the said order was subsequently recalled on March 2, 1995, and again a winding up order was passed on October 31, 1996. They submitted that even if the secured creditor is entitled to stand outside the winding up and realise his security, the sale of the assets of the company cannot be done without the leave of the company court once the winding up proceedings are initiated. They also submitted that the decisions of , in the case of , , Gujarat State Financial Corporation v. Official Liquidator, 87 Comp Cas 658 ; 1 Comp LJ 503 ( 81 Comp Cas 19 ; 4 Comp LJ 311 (Kar), relied upon by the applicant and the second respondent have absolutely no bearing on the facts of the present case. They pointed out that the decision of in the case of 25 Comp Cas 344 was rendered before the introduction of Sections 529 and 529A in the Act. In the case of 86 Comp Cas 255, has only followed the principle in 's case 25 Comp Cas 344 (SC). They submitted that, on the other hand, the principle laid down by in the case of 82 Comp Cas 342 ; 2 Comp LJ 165 fully applies to the facts of the present case. They further pointed out that the decision of in the case of 82 Comp Cas 342 has been approved by the Division Bench of this court in the case of . . They further submitted that in the case of Karnataka State Industrial Investment and Development Corporation , the Division Bench of this court, after referring to the case of International Coach Builders Ltd. 81 Comp Cas 19 (Kar) and in the light of the direction given by in the said case, has clearly held that in 's case 25 Comp Cas 344 did not have an occasion to consider the impact of Sections 529 and 529A of the Act or Section 537 of the Act and the rest of the decisions were based merely on the decision of in 's case 25 Comp Cas 344 and, therefore, the sale of the assets of the company made during the winding up proceedings is void in law and is not binding on the official liquidator and the applicant is not entitled for the relief sought in this application. They also pointed out that there is no conflict between the provisions contained in the Act and also the SIC Act in so far as the procedure required to be adopted in the matter of sale of assets of the company in winding up. ", "4. In the background of divergent contentions advanced by learned counsel appearing for the parties, the question that would arise for consideration is as to whether the sale of the assets of the company effected by the applicant-Corporation, is void in law on the ground that the leave of the company court for the sale of the said assets has not been obtained. ", "5. It is profitable to first refer to the relevant provisions of the Act, the SIC Act and also the SFC Act , before proceeding to discuss the contentions raised by learned counsel appearing for the parties. ", "(a) Sections 446 , 456(2) , 529(1) , 529A and 537 of the Act read as under : \"446. Suits stayed on winding up order.--(1) When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or, if pending at the date of winding up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose. ", "(2) The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of- ", "(a) any suit or proceeding by or against the company ; ", "(b) any claim made by or against the company (including claims by or against any of its branches in India) ; ", "(c) any application made under Section 391 by or in respect of the company ; ", "(d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company, whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act , 1960. ", "(3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court. ", "(4) Nothing in Sub-section (1) or Sub-section (3) shall apply to any proceeding pending in appeal before or . ", "456. Custody of company's property.--(2) All the property and effects of the company shall be deemed to be in the custody of the court as from the date of the order of the winding up of the company, ", "529. (1) Application of insolvency rules in winding up of insolvent companies.--(1) In the winding up of an insolvent company, the same rules shall prevail and be observed with regard to- ", "(a) debts provable ; ", "(b) the valuation of annuities and future and contingent liabilities; and ", "(c) the respective rights of secured and unsecured creditors ; as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent : ", "Provided that the security of every secured creditor shall be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen's portion therein, and, where a secured creditor, instead of relinquishing his security and proving his debt, opts to realise his security,-- ", "(a) the liquidator shall be entitled to represent the workmen and enforce such charge ; ", "(b) any amount realised by the liquidator by way of enforcement of such charge shall be applied rateably for the discharge of the workmen's dues ; and ", "(c) so much of the debt due to such secured creditor as could not be realised by him by virtue of the foregoing provisions of this proviso or the amount of the workmen's portion in his security, whichever is less, shall rank pari passu with the workmen's dues for the purposes of Section 529A . ", "(2) All persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company, may come in under the winding up, and make such claims against the company as they respectively are entitled to make by virtue of this Section : ", "Provided that if a secured creditor instead of relinquishing his security and proving for his debt proceeds to realise his security, he shall be liable to (pay his portion of the expenses) incurred by the liquidator (including a provisional liquidator, if any) for the preservation of the security before its realisation by the secured creditor. ", "Explanation.--For the purposes of this proviso, the portion of expenses incurred by the liquidator for the preservation of a security which the secured creditor shall be liable to pay shall be the whole of the expenses less an amount which bears to such expenses the same proportion as the workmen's portion in relation to the security bears to the value of the security. ", "529A. Overriding preferential payments.-(1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company-(a) workmen's dues ; and ", "(b) debts due to secured creditors to the extent such debts rank under Clause (c) of the proviso to Sub-section (1) of Section 529 pari passu with such dues ; shall be paid in priority to all other debts. ", "(2) The debts payable under Clause (a) and Clause (b) of Sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions. ", "537. Avoidance of certain attachments, executions, etc., in winding up by or subject to supervision of court.--(1) Where any company is being wound up by or subject to the supervision of the court-(a) any attachment, distress or execution put in force, without leave of the court, against the estate or effects of the company, after the commencement of the winding up ; or ", "(b) any sale held, without leave of the court, of any of the properties or effects of the company after such commencement ; shall be void. ", "(2) Nothing in this Section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government.\" (b) Sections 20 and 32(1) of the SIC Act read as hereunder : ", "\"20. Winding-up of sick industrial company.--(I) Where the Board, after making inquiry under Section 16 and after consideration of all the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of opinion that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up, it may record and forward its opinion to the concerned , (2) The shall, on the basis of the opinion of the Board, order winding-up of the sick industrial company and may proceed and cause to proceed with the winding-up of the sick industrial company in accordance with the provisions of the Companies Act , 1956 . ", "(3) For the purpose of winding-up of the sick industrial company, may appoint any officer of the operating agency, if the operating agency gives its consent, as the liquidator of the sick industrial company and the officer so appointed shall for the purposes of the winding-up of the sick industrial company be deemed to be, and have all the powers of, the official liquidator under the Companies Act , 1956 . ", "(4) Notwithstanding anything contained in Sub-section (2) or subsection (3), the Board may cause to be sold the assets of the sick industrial company in such manner as it may deem fit and forward the sale proceeds to for orders for distribution in accordance with the provisions of Section 529A , and other provisions of the Companies Act , 1956 .\" ", "\"32. Effect of the Act on other laws--(1) The provisions of this Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act , 1973 , and the Urban Land (Ceiling and Regulation) Act , 1976 , for the time being in force or in the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any law other than this Act, (2) Where there has been under any scheme under this Act an amalgamation of a sick industrial company with another company, the provisions of Section 72A of the Income-tax Act, 1961 , shall, subject to the modifications that the power of under that Section may be exercised by the Board without any recommendation by the specified authority referred to in that section, apply in relation to such amalgamation as they apply in relation to the amalgamation of a company owning an industrial undertaking with another company.\" ", "Now, let me examine the question that would fall for my consideration in this application. ", "6. No doubt, the decision of this court in the case of [1994] 81 Comp Cas 19 and the decision of in the case of Gujarat State Financial Corporation (1996] 87 Comp Cas 658 rendered following the decision of this court in the case of [1994] 81 Comp Cas 19 relied upon by learned counsel for the applicant and the second respondent, support their contention that the secured creditor is entitled to stand outside the winding up proceedings and enforce his security and in that view of the mutter, even after the amendment of Sections 529(1) , 529A of the Act, leave of the company court is not required to be obtained by the secured creditor to enforce his security and bring the assets mortgaged to sale to realise his security. and this court, in the decisions referred to above, have taken the view that the right of the secured creditor to deal with the security and realise the same without the intervention of the court, remains unaffected notwithstanding the vesting of property coming into the custody of the court, on the principle that the right of the secured creditor does not come to the custody of the court. In the said decisions, it has been pointed out that a mortgage creates in favour of a mortgagee an interest in the mortgaged property and to the extent of the charge of mortgage, the property mortgaged does not come to the custody of the court. It is further pointed out in the case of Gujarat State Financial Corporation 87 Comp Cas 658 that by the amendment to the proviso to Section 529 of the Act and insertion of the Explanation thereto in 1985, the only change which has been made, is that the secured creditor too is liable to pay only the proportionate expenses of the preservation taking into consideration the pari passu charge in favour of the workmen's dues, but the option is still left to the secured creditor to realise the security without proving his debt in the winding up proceedings ; and where the secured creditor opts to realise his security without relinquishing his security and without proving his debt, the realisation is to be governed by the proviso to Section 529(1) and the workmen get from such realisation only that much proportion for which they rank pari passu qua the realisation of the security. The court further pointed out that even after the Companies (Amendment) Act , the principle enunciated in 's case 25 Comp Cas 344, still applies to the secured creditor, who, instead of relinquishing his security and providing his debts, opts to realise the security without intervention of the court. Though the decisions, referred to above, as pointed out by me, support the case of the applicant and the second respondent, in the light of the decision of this court in the case of Karnataka State Industrial Investment and Development Corporation 94 Comp Cas 1 which has considered the earlier decision of this court in the case of 81 Comp Cas 19 and also the decision of in the case of 25 Comp Cas 344 , and has taken the view, fairly in identical circumstances, that the sale of the assets of the company, which was the subject matter of dispute in the said case without the leave of the court, was not valid and directed for resale of the assets of the company subject to the conditions imposed in the said order, I am unable to accede to the submissions made by and . In the case of Karnataka State Industrial Investment and Development Corporation 94 Comp Cas 1, this court has followed the decisions of in the case of 82 Comp Cas 342, wherein has considered the principle laid down by in the case of 25 Comp Cas 344 and after elaborately discussing the effect of the proviso to section 529(1) and Section 529A , which was inserted into the Act by reason of the Companies (Amendment) Act , 1985, has taken the view that though Sections 529 and 529A , as amended, do not take away the rights of the secured creditor, since a pari passu charge is created in favour of the dues of the workmen on the rights of the secured creditor, the mortgagee or the secured creditor is required to join the pari passu charge-holder in the sale and he cannot sell the property ignoring the pari passu charge-holder and, therefore, the secured creditor as well as the official liquidator as the representatives of the workmen, must join in the sale. It is useful to extract the relevant portion of the said judgment of , which reads as hereunder (page 349 of 82 Comp Cas) : ", "\"The workmen's dues and the debt due to a secured creditor to the extent such a debt could not be realised by such a secured creditor because of the pari passu charge in favour of the workmen, or the workmen's portion in his security which he has lost because of the proviso to Section 529 , will rank pari passu with workmen's dues under Section 529A . In other words, the extent of his claim which a secured creditor could not realise out of his security because of the rights created in favour of the workmen because of their pari passu charge on the security, would get an overriding preference for payment in winding up along with workmen's dues. ", "Therefore, because of the proviso to Section 529 , the secured creditor is not the only mortgagee entitled to sell the security. He has a co-mortgagee (in the form of workmen) with an equivalent charge on the same security. These workmen are to be represented by the official liquidator. Therefore, when a secured creditor seeks to realise his security, he has also to contend with the official liquidator. The official liquidator is an interested party in the sale of the security in two capacities in such a situation--(1) as a representative of the pari passu charge-holder ; and (2) as an officer of the court in custody of the company's properties, who is responsible for the sale and distribution of the assets of the company in winding up. In both these capacities, he has an interest in the sale of the mortgage security by the secured creditor. ", "7. What are the rights of a pari passu charge-holder ? Can a mortgagee exercise his power of sale without the consent of a pari passu charge holder ? ", "8. The meaning of the word 'pari passu' is defined in Jowitt's Dictionary of English Law, Volume II, 1959 Edition, page 1294 as ; 'With equal step, equally, without preference'. The term is similarly defined in Black's Law Dictionary, Sixth Edition, page 1115 as, 'By an equal progress . . . used especially of creditors who, in marshalling assets, are entitled to receive out of the same fund without any precedence over each other'. ", "Prem's Judicial Dictionary, Volume III, 1964 Edition, page 1217 also defines pari passu as : \"With equal steps, that is to say, proceeding side by side at the same pace\". Therefore, the rights of an official liquidator as representing the workmen rank equally with the rights of secured creditors. ", "9. In the case of co-mortgagees, the courts have held that one co-mortgagee cannot sell or institute any proceeding for the sale of the mortgaged property without joining the other co-mortgagees, if the other co-mortgagees are not willing to join as plaintiffs they should be joined as defendants. This is because the mortgaged security is one and it must be realised as a whole by a common sale, thus, in the case of , AIR 1958 Mad 621, the court considered the case of co-mortgagees and held as a proposition of law that a mortgage is one and indivisible in regard to the amount and security. The court said that no suit can, therefore, be filed to enforce a mortgage which entails the disintegration of either the amount or the security. ", "10. That, therefore, normally all the mortgagees should join. But if some of them refuse to join, they should be included as defendants. Such mortgagees-defendants are not pro forma parties but are necessary parties in that the mortgage right vests in them along with the plaintiff-mortgagees, ", "11. in the case of , AIR 1919 PC 24, said in the case of two mortgagees holding as tenants-in-common that the right of either mortgagee who desires to realise the mortgaged property and obtain payment of the debt, if the consent of the co-mortgagee cannot be obtained, is to add the co-mortgagee as a defendant to the suit and to ask for the proper mortgage decree. It is, therefore, necessary that when a sale of a mortgaged property takes place, both the charge-holders should join in the sale. ", "12. The same ratio, in our view, would substantially apply to two charge-holders who have a pari passu charge for the recovery of their dues. It may be that unlike a co-mortgagee, a pari passu charge-holder can receive payment of his mortgage debt from the mortgagor and release his charge independently. But, when it comes to realising the security, both the pari passu charge-holders must join or realise the security simultaneously. The sale proceeds are required to be divided proportionately between them in the same proportion as their dues. Hence, when a sale takes place, it is for the simultaneous recovery of claims of all pari passu charge-holders.\" ", "13. It was further observed in paragraph 23 thus (page 355) : ", "\"Also, the statutory right which is given to financial corporations under Section 29 to sell the property has to be exercised consistently with the rights of a pari passu charge-holder in those favour a statutory charge is created by the proviso to Section 529 of the Companies Act when the company is in liquidation, Therefore, such a power can be exercised only with the concurrence of the official liquidator and the official liquidator is required to take the permission of the court before giving such concurrence, since he is an officer of the court and is required to act under the directions of the court while exercising his powers on behalf of the workers\". ", "14. Again, while referring to the contention that in view of the provisions contained in Section 46B of the SFC Act, the provisions of Section 29 of the Act would prevail observed thus (page 356 of 82 Comp Cas) : ", "\"We, however, do not see any inconsistency between the provisions of Section 29 of the State Financial Corporations Act and Section 529 of the Companies Act. Section 29 of the State Financial Corporations Act, merely confers certain powers on the mortgagee. It does not cover a situation where there is a pari passu charge-holder. Therefore, the power to sell which is given to a financial corporation under Section 29 has to be exercised consistently with the right of a pari passu charge-holder. Such a right can be exercised with the consent of the pari passu charge-holder or on orders of the court after making him a party to the proceedings to enforce the security. Since the charge-holder is the official liquidator, this power to consent is subject to the sanction of the court.\" ", "15. As stated above, the principle extracted above, laid down by has been approved by the Division Bench of this court. Further, this court, keeping in view that an appeal against the earlier decision of this court in the case of 81 Comp Cas 19, was admitted; and , while granting special leave to appeal, has directed the secured creditor to act jointly with the official liquidator, under the supervision and in accordance with the directions of the company judge for effecting the sale, distinguished the decision of this court in the case of 81 Comp Cas 19 and followed the decision of in 82 Comp Cas 342, It is relevant to extract paragraphs 21 and 22 of the said judgment, which, in my view, is a direct answer to the contentions advanced by and . The said paragraphs read as hereunder (pages 13 to 15 of 94 Comp Cas) : ", "\"Having due regard to the fact that an appeal against the decision of of this High Court in 81 Corp Cas 19 is admitted and has given certain directions while so granting special leave to appeal, directing the secured creditor to act jointly with the official liquidator under the supervision and in accordance with the directions of the learned company judge for effecting the sale, we are of the opinion that the other decisions referred to above and relied upon by Sri , learned counsel for the , the appellant, need to be distinguished firstly on the ground that in 's case 25 Comp Cas 344 did not have an occasion to consider the impact of Sections 529 and 529A of the Act on Section 537 of the Act, and, secondly, on the ground that the rest of the decisions were based mainly on the said decision of in 's case 25 Comp Cas 344. It is only Mrs. Justice of , as she then was, speaking for the Bench in 82 Comp Cas 342 who has dealt with every aspect of the matter concerning the sale of assets of a company in winding up when the secured creditor prefers to stand outside the winding up and enforces his security in exercise of the power under Section 29 of the SFC Act. We fully agree with the exposition of law as made by Mrs. Justice in this regard. ", "It is no doubt true that on July 29, 1994, the appellant- had taken over possession of the assets of the company under liquidation, acting under Section 29 of the SFC Act. It is also true that no provisional liquidator had been appointed under Section 450 of the Act. Nevertheless, by the time the appellant completed the sale transaction in favour of respondent No. 7 on September 30, 1995, the winding up order had already been passed on September 8, 1995, and the official liquidator had already come into the picture as liquidator of the company under Section 449 of the Act, There were workmen's dues to the tune of Rs. 80 lakhs. Because of the proviso to Sub-section (1) of Section 529 of the Act, the is not the only secured creditor entitled to sell the security by invoking Section 29 of the SFC Act, the has to contend with the pari passu charge in favour of the workmen's dues, the workmen being represented by the official liquidator. The official liquidator would, thus, be an interested party in the sale of security. The proviso to Sub-section (1) of Section 529 as also Section 529A of the Act, having created a pari passu charge in favour of the workmen, the same would affect the right of the appellant, the to sell the security directly by itself by invoking Section 29 of the SFC Act. The appellant is required to join the official liquidator in the sale, and the property cannot be sold ignoring the pari passu charge-holder. Similarly, though the official liquidator, by virtue of Section 457(1) of the Act has the power to sell the property of the company in winding up, and as a pari passu charge-holder under Section 529 of the Act, he has the power to sell the said property with the sanction of the court to realise the charge, he cannot sell the property all by himself ignoring the secured creditors like the . Thus, both the secured creditor, namely, the , as also the official liquidator as the representative of the workmen, are to exercise the power to sell under the directions of the court. The aspect of repugnancy between the provisions of two Acts, i.e., the SFC Act and the Companies Act , and, in that situation, the provisions of the SFC Act having overriding effect over the provisions of the Act, by virtue of Section 46B of the SFC Act, is not to be seriously considered because there is no inconsistency between the provisions of the said two Acts. Section 29 of the SFC Act merely confers certain powers on the secured creditor. It does not deal with a situation where there is a pari passu charge-holder, The power to sell which has been given to the under Section 29 of the SFC Act has to be exercised consistently with the right of the pari passu charge-holder, who in the case of a company under liquidation, would be the official liquidator, whose consent can be subject to sanction of the court. Therefore, the statutory right given to the appellant, under Section 29 of the SFC Act being required to be exercised consistently with the right of the pari passu charge-holder in whose favour a statutory charge is created by the proviso to Sub-section (1) of Section 529 of the Act when the company is in liquidation, and the said pari passu charge-holder being the official liquidator who is required to act under the directions of the court, leave of the court would be necessary, and, any sale without such leave would be void under Section 537 of the Act. The learned company judge was, therefore, right in declining to approve the sale in favour of respondent No. 7 and giving fresh directions for resale of the property by the appellant, by standing outside the winding up in association with the official liquidator right from the time of settling the terms of advertisement, and making the said resale subject to confirmation by the court.\" ", "(emphasis supplied) ", "16. This court, in paragraph 16 of the judgment, has also considered the decision of in the case of Ranganathan [1955] 25 Comp Cas 344 and has observed as follows (pages 8 and 9 of 94 Comp Cas) : ", "\" relied upon a decision of in 25 Comp Cas 344 reported in this regard. was dealing with the provisions of Section 232 of the Indian Companies Act, 1913, analogous to the provisions of Section 537 of the Act. It was held therein that the secured creditor was outside the winding up and could realise his security without leave of the court. This decision of certainly supports the case of the appellant, . But the said decision had no provision corresponding to Sections 529 and 529A of the Act. Consideration of Section 537 of the Act ( section 232 of the Indian Companies Act, 1913) in the light of Sections 529 and 529A , therefore, did not arise before in the said decision.\" ", "(emphasis supplied) ", "17. As can be seen from the discussion made by this court in the case of Karnataka State Industrial Investment and Development Corporation Limited [1998] 94 Comp Cas 1 following the decision of in the case of 82 Comp Cas 342, this court has taken the view that in view of the amendment made to Section 529(1) and Section 529A by means of the Companies (Amendment) Act , 1985, since the workmen are given a pari passu right in respect of the security of the secured creditor, leave of the company court is necessary to sell the assets of the company even at the instance of the secured creditor of the company. I am in respectful agreement with the views expressed by this court in the case of Karnataka State. Industrial Investment and Development Corporation 94 Comp Cas 1 rendered following the decision of in the case of Maharashtra State. 82 Comp Cas 342. I am also unable to accept the submission of Sri that in view of the decision of in the case of 86 Comp Cas 255 , the Division Bench decision of this court in the case of Karnataka State Industrial Investment and Development Corporation 94 Comp Cas 1 does not lay down the correct law. in the case of 86 Comp Cas 255 relied upon by Sri has only reiterated the principle laid down by it in Ranganathan 25 Comp Cas 344 which was considered by this court and also by in the cases referred to by me earlier (see : para. 2 of the judgment). Therefore, I am of the view that the sale of the assets of the company made by the applicant in favour of the second respondent without the leave of the company court is void. ", "18. At this stage, it is necessary to consider the contention of Sri and that since the sale has been effected in view of the provisions contained in Sub-section (2) of Section 20 of the SIC Act, the decision of this court in the case of Karnataka State Industrial Investment and Development Corporation [1998] 94 Comp Cas 1, which was rendered only considering the provisions of the SFC Act , has no bearing as the provisions of the SFC Act , have overriding effect over the provisions of the Act, which is a general law. It is true that, as laid down by in the case of 35 Comp Cas 755, the provisions of the special Act will override the provisions of the general Act in the event of conflict between the two enactments. Under these circumstances, the question that would arise for consideration is as to whether there is any conflict between the provisions contained in SIC Act, which is a special enactment, and the provisions of the Act ; and, in that event, the provisions of the SIC Act would prevail over the provisions of the Act as contended by Sri and . ", "19. I am of the view that there is no merit in the above submission of learned counsel. Sub-section (1) of Section 20 of the SIC Act provides for enquiry being conducted by the and it confers power on the to recommend to for winding up of the company under certain circumstances set out in the said provision. Sub-section (2) of Section 20 of the SIC Act confers power on to wind up the sick unit on the basis of the recommendation made by the . Sub-section (3) of Section 20 confers power on to appoint a liquidator for the purpose of winding up of such a company. However, subsection (4) of Section 20 of the SIC Act was relied upon by and in support of their plea that the has absolute right to get the assets of the company sold and, therefore, since the sale in question of the company was caused to be effected by the , leave of the company court was not required to be secured. No doubt, Sub-section (4) of Section 20 of the SIC Act confers power on the to get the assets of the sick industrial company to be sold in such manner as it deems fit notwithstanding anything contained in Sub-section (2) or Sub-section (3) of Section 20 of the Act in such manner as it may deem fit and forward the sale proceeds to for orders for distribution in accordance with Section 529A and other provisions of the Act. It is relevant to point out that Sub-section (4) of Section 20 of the SIC Act provides for non-obstante clause with regard to what is contained in Sub-section (2) and (3) of Section 20 of the Act, but it does not state that notwithstanding what is contained in the Act or any other law, the provisions of subsection (4) of Section 20 of the SIC Act shall prevail. However, Section 32 of the SIC Act, on which strong reliance has been placed, provides that the provisions of the SIC Act and of any rules or schemes made under the SIC Act shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act , 1973, and the Urban Land (Ceiling and Regulation) Act , 1976, for the time being in force or in the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any law other than the SIC Act. Therefore, the question that is required to be considered is whether there is any conflict between the provisions contained in Sub-section (4) of Section 20 of the Act, which gives power to the to get the assets of the sick industrial unit sold and the provisions contained in the Act, in the matter of the sale of the assets of a company, in respect of which proceedings for winding up have been commenced. It is well settled that if the provisions contained in the two enactments can be read harmoniously and if such harmonious construction would subserve the purpose or objects contained in both the enactments, the court should proceed to harmoniously construct and interpret the provisions contained in both the enactments. While the secured creditor has a right to stand outside the winding up proceedings and get his security enforced ; and when the proceedings are pending before the , the also has undoubted rights in view of Sub-section (4) of Section 20 of the SIC Act notwithstanding what is provided in Sub-section (2) of Section 20 of the SIC Act to get the assets of such company sold, the question is whether it is not necessary in view of the pendency of the proceedings before the company court, to secure leave of the court for such a sale ? The power to grant permission for sale of the assets of the court in respect of a company, in respect of which winding up proceedings have commenced, is given to the court, Under these circumstances, there cannot be any doubt that the court will take into consideration not only the interest of the secured creditor, who is entitled to enforce his security by standing outside the winding up proceedings, but also the interest of the workmen, who are also given substantial rights for which a charge is created on the security of the secured creditor and also various other creditors of the company. If a sale is to be caused by the in exercise of the power conferred under Sub-section (4) of Section 20 of the SIC Act, the may be primarily guided by the interest of the secured creditor only. Under these circumstances, while I am of the view that in view of Sub-section (4) of Section 20 of the Act, the has the undoubted right to get the assets of a sick industrial unit sold either during pendency of the proceedings before it or notwithstanding the power conferred on the court to appoint a liquidator, etc., leave of the company court would be necessary for disposal of the assets of a company in respect of which winding up proceedings have commenced. If, without the leave of the company court, the assets of the company are caused to be sold even by the , in my view, such a sale would be void. I do not find any conflict between the provisions contained in the Act and the provisions contained in Sub-section (4) of Section 20 of the SIC Act. As stated by me earlier, while power is given to the to get the assets of the company caused to be sold by it, what is required is that leave of the court has to be secured for such sale, if winding up of the company has already commenced. If such a construction is placed to the provisions contained in the Act and the SIC Act, it would protect the interest of everybody, who is interested in the affairs of the company and who has a claim against the company. Otherwise, if the assets of the company are sold for a price much less than the market value at the instance of the secured creditor through the exercise of the power by the , it would seriously affect the interest of the workmen, who are given a pari passu right and for whose benefit, a charge is also created on the security of the secured creditor. In fact, the observation of in the case of 86 Comp Cas 255 made at paragraph 6 supports my view. It is useful to refer to the said observation, which reads as hereunder (page 260) : ", "\"The aforesaid questions arise because a secured creditor who has, initiated a suit or proceeding in a civil court is interested in realisation of his debt only, whereas the company court looks after the interest of all the creditors ; so too, the workmen's dues, which rank pari passu with debts due to secured creditors. This is brought home not only by Section 529A , which was inserted by the Companies (Amendment) Act , 1985, but also by the proviso to Sub-section (1) of Section 529 inserted by the same Amendment Act . The winding-up court does these acts through a liquidator, who has been given wide powers by Section 457 of the Act. As against this, a receiver appointed by a civil court on being approached by a secured creditor would basically look after the interest of that creditor, whose interest may in many cases be in conflict with that of the liquidator, as was acknowledged in Karamelli and Barnett Ltd. 1 Ch 203. We feel no difficulty in stating that in case of such conflict, the interest of the liquidator has to receive precedence over that of the receiver inasmuch as the former looks after the interest of a large segment of creditors along with that of workmen, whereas the latter confines his concern to the interest of the secured creditor on whose approach the receiver has been appointed . . . .\" ", "(emphasis supplied) ", "20. It is, therefore, not possible to take a view that merely because the consists of highly responsible and reputed members and the secured creditor also would be interested in securing a high price, always a fair price will be secured in respect of the assets of the company, caused to be sold by the , as contended by learned counsel for the and respondent No. 2. ", "21. Therefore, in the light of the above discussion, 1 am of the view that there is no conflict between the provisions contained in Sub-section (4) of Section 20 of the SIC Act and the provisions contained in the Act. In fact, the view taken by of this court in the case of Karnataka State Industrial Investment and Development Corporation Limited [1998] 04 Comp Cas 1 following the decision of in the case of 82 Comp Cas 342 ; , while considering Section 529 of the Act and Sections 29 and 46B of the SFC Act, which confer right on the secured creditor to enforce his security, in my view, would support the view I have taken while interpreting the provisions contained in Sub-section (4) of Section 20 of the SIC Act and the provisions of the Act, referred to above. At paragraph 20 of the decision, this court has observed as follows (page 13 of 94 Comp Cas) : ", "\"Referring to the contention that because of Section 46B of the SFC Act, the provisions of Section 29 of the said Act would prevail over the provisions of Section 529 of the Companies Act, it was observed thus (page 356) : ", "'We, however, do not see any inconsistency between the provisions of Section 29 of the State Financial Corporations Act and Section 529 of the Companies Act. Section 29 of the State Financial Corporations Act merely confers certain powers on the mortgagee. It does not cover a situation where there is a pan passu charge-holder. Therefore, the power to sell which is given to a financial corporation under Section 29 has to be exercised consistently with the right of a pan passu charge-holder. Such a right can be exercised with the consent of the pari passu charge-holder or on orders of the court after making him a party to the proceedings to enforce the security. Since the charge-holder is the official liquidator, his power to consent is subject to the sanction of the court'.\" ", "22. I am also unable to accept the submission of and that since the sale of the assets of the company was made prior to the date of the winding up order, leave of the company court was not required to be obtained. It is necessary to point out that Sub-section (2) of Section 441 of the Act, in unmistakable terms, states that in the circumstances other than those set out in Sub-section (1) of Section 441 , the winding up of the company by the court shall be deemed to commence at the time of presentation of the petition for winding up. The said provision reads as follows : ", "\"441. Commencement of winding up by court.--(2) In any other case, the winding-up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.\" ", " Section 537(1)(b) of the Act provides that when a company is being wound up by or subject to the supervision of the court, any sale held, without leave of the court, of any of the properties or effects of the company after such commencement, is void. Therefore, a combined reading of Sub-section (2) of Section 441 and Clause (b) of Sub-section (1) of Section 537 of the Act, makes it clear that even in cases where winding up petitions have been presented, if the sale of the assets of the company is made, such sale would be void even though there is no order of winding up. ", "23. In so far as the contention advanced on behalf of the applicant and the second respondent that every effort was made by the company and its director to get the sale of the assets of the company nullified by repeatedly filing writ petitions before this court and this court having rejected the writ petitions, it must be held that the sale of the assets of the company has been properly done and, therefore, the applicant is entitled to deliver the assets of the company to the second respondent pursuant to the sale held, is concerned, it is no doubt true that every effort was made by the company and its director to nullify the sale by repeatedly approaching this court, as referred to by me earlier. If the conduct of the company and its director is to be examined, certainly, they will not be entitled for any indulgence from the hands of this court. But, what this court is required to consider in this case is the validity of the sale held in the light of the provisions contained in the Act, referred to by me earlier. Since, I have taken the view that the sale held was invalid, merely because the company and its director have made every effort to nullify the sale by repeatedly invoking the jurisdiction of this court under Articles 226 and 227 of the Constitution of India, cannot be a ground to approve the sale, which is invalid in law. Therefore, I am unable to accept the submission of and that since the writ petitions filed by the company and its director having been rejected, the sale of the assets of the company must be held to be valid. It is also true as pointed by and that in a distress sale, the properties sold generally do not get the fair market price. The decision of in the case of , , relied upon by , no doubt, supports their submission. But, when the validity of the sale is examined in the light of the provisions contained in the Act, in my view, the principle laid down by in the case of , , referred to by , that in a distress sale, a fair market price is not secured, and therefore, the sale cannot be set aside, cannot be applied. The said decision was rendered while considering whether there was any material irregularity or illegality in the sale conducted. ", "24. In the light of the discussion made above, I am of the view that this application is liable to be rejected and the order dated October 31, 1996, directing the official liquidator to forthwith take charge of all the properties and effects of the first respondent-company, does not call for modification. ", "25. However, it is necessary to point out that since the second respondent has complied with the terms and conditions of sale and in all, deposited a sum of Rs. 2,80,00,000 (rupees two crores and eighty lakhs) on various dates and the said money has been in deposit with the , when fresh steps are taken to sell the assets of the company, which are mortgaged/hypothecated to the , jointly by the and the official liquidator, the minimum sale price/bid amount that has to be fixed must be at least Rs. 3,00,000 (rupees three lakhs) more than Rs. 2,80,00,000 (rupees two crores and eighty lakhs), for which the assets of the company were sold to the second respondent, plus the interest that would accrue on the said amount taking into consideration the various dates of deposit made by the second respondent at the rate which is being charged by the . Further, if no one offers to purchase the assets of the company exceeding the minimum bid amount, referred to above, the assets of the company, which are already sold to the second respondent, shall be confirmed in favour of the second respondent at Rs. 2,80,00,000 (rupees two crores and eighty lakhs) only. The process of sale shall be completed within two months from today, after fully complying with the procedure prescribed. It is also necessary to place on record the submission made by Sri on behalf of the third respondent that he will bear the expenses for conducting fresh sale, to be incurred by the official liquidator and the . The said statement made by Sri is made binding on the third respondent. The official liquidator shall secure appropriate directions from this court for sale of the assets of the company immediately. ", "26. Subject to the observations made above, the application is rejected. ", "27. However, no order is made as to costs."], "relevant_candidates": ["0000095533", "0000174208", "0000396290", "0000468220", "0000499202", "0000623299", "0000959413", "0001061510", "0001069183", "0001098115", "0001126538", "0001222587", "0001806633", "0001832798", "0038825714", "0048097532"]} {"id": "0001071582", "text": [", J. ", "1. The applicants, Messrs. Allen Brothers and Co. (India), Ltd., obtained a Rule nisi on the 4th January 1921 calling upon the respondents Messrs. and Co., to show cause why an order made by the Controller appointed under the Calcutta Rent Act, 1920, should not be set aside. This Rule was issued both under Section 115 of the Code and under Clause 15 of the Letters Patent. ", "2. The applicants are tenants of certain premises in Hare Street and hold under the respondents. Their complaint is that an application made by them to the Controller under Section 15 of the Rent Act, for a certificate certifying the standard rent of the said premises, has been dismissed contrary to the terms of the section, which oblige the Controller to fix the standard rent and to certify the same. ", "3. In my opinion, upon the question of merits, there is no answer to the applicants. The judgment of the Controller is before me. It appears that in Hare Street there is a large building which is numbered 3 4, 5 and 6, and there is some confusion on the part of many people as to which part of the whole building is properly designated by one or other of these numerals. It appears, however, that there is no doubt at all as to the rooms which were let to the applicants. They are occupied by Messrs. and Co., and the three rooms in question which Messrs. occupy under the applicants and which the applicants took from Messrs. and Co. are. Easily ascertainable The Rent Controller in the course of his judgment says: \"From the above it will be seen that there is no satisfactory evidence upon the record to prove the number of the premises comprising the three rooms let out to the applicants, whether the number of the premises is 4, and 5 or 5 and 6 or 4, 5 and 6, Hare Streets On this very ground the suit fails. ", "4. He also states that there is no satisfactory evidence before him to show what the rent of these identical rooms was in November 191.8. The judgment concludes by saying that, \"in the circumstances stated above, as there is a confusion in the number of premises of which the rent is required to be standardized, I dismiss this application.\" ", "5. In my opinion, Section 15 of the Calcutta Rent Act makes it obligatory on the Rent Controller to grant a certificate certifying the standard rent. In the present case it is beyond dispute that the rooms in respect of which the application is made are perfectly certain, easily enough ascertainable, and are subject to no doubt at all. Either the Rent Controller or any Surveyor appointed by him could have been taken and shown the actual rooms which Messrs. and Co. are occupying. It is nowhere suggested and it is not the fact that the Controller required the applicant to give him further particulars and that the applicant made any default in complying with such order. In these circumstances, it matters nothing whatsoever whether the premises in question have got three numbers or one number or have got no number at all, and there is no justification for the Rent Controller's refusal to comply with Section 15 of the Calcutta Rent Act. Nor can any such justification be extracted from the fact that it may be difficult, owing to confusion of numbers, to say at what rent these very three rooms were let in any previous period. By the terms of Section 15 the Controller may fix the standard rent at such amount as he deems just in any of a series of cases, and one of the cases in which he may act in that manner is thus defined: \"where for any reason any difficulty arises in giving effect to this Act.\" For these reasons I do not think that there can be any serious question that if I have jurisdiction to do so I should send the case back to the Rent Controller with a direction to hear and determine the application according to law. ", "6. Mr. , showing cause, takes as his main point the preliminary objection that this has no power of superintendence and no revisional jurisdiction as. Regards the Controller. It is not, however, contended that such jurisdiction, if it exists in , cannot properly be excercised by a Single Judge sitting on the Original Side in a case such as this where the premises are situated within the limits of the Ordinary Original Civil Juricdiction. This point of re visional jurisdiction has been considered and adjudicated on in more than one case on the Appellate Side, and on the Original Side before now a good many applications have been entertained for a revision of orders passed by the Rent Controller. Mr. contended that the decisions, and in particular the decision which contains the fullest treatment of the matter, H. D. Chatterjee v. 68 Ind. Cas. 274 : 26 C.W.N. 78 : 49 C. 528 : (1922) A.I.R. (c) 427 can be shown to proceed upon cases which are not in point and upon principles which are not sound. He also contended that insufficient attention had been paid to the fact that is subject to a Rule making power which is vested, not in this , but in . For these reasons he asked leave to argue this question of jurisdiction, and, in the circumstances, I allowed that to be done. ", "7. The decisions of an Appellate Side Bench are, technically speaking, Sot binding upon me. This is owing to the fact that in many cases the law administered on the Original Side is not the same as the law administered with reference to cases arising in the Mofussil. The present question, however, is exactly the same on whichever side of the Court it arises. The only authority known to me as a guide upon this sort of question is the dictum of Mr. Justice in the 9 C. 604 at p. 607 : 13 C.L.R. 142 : 4 Ind. Dec. ( N.S.) 1050. The learned Judge said that he was not prepared to say that he would consider every judgment of an Appellate Bench binding upon him when sitting on the Original Side, yet every such judgment should receive respectful consideration and careful attention and should be followed unless he was very clearly of the opinion that the conclusion arrived at was an erroneous one. ", "8. The questions raised, quite properly, by Mr. are both numerous and difficult. I think it would be no recommendation of any one's opinion to say that he was very clearly of opinion that the contrary view was erroneous. I propose to deal with this matter fully and carefully both out of respect to Mr. argument and because I think his client is entitled to this but, in my opinion, it is not true that in the end the question has been decided upon a wrong footing and it is a question on which, though with some difficulty, I incline to the opinion that the decision of is right. ", "9. In the first place, it must be noted that the argument before me proceeded without either party calling into question the validity of the Calcutta Rent Act or the, validity of the Rules made thereunder The first question on this basis is as to what the local legislature has in fact done. In my opinion the Controller, in discharging his duty under Section 15 , and the President of the Tribunal, in discharging his duties under Section 18 , act as Courts of Justice. Whether they are within the meaning of any particular enactment is another question but they are both in the general sense; they ate authorised to decide judicially, and by judicial methods only, between, persons seeking their civil rights: Nilmoni Singh Deo v. 9 C. 295 at pp. 298, 301 : 12 C.L.R. 361 : 9 I.A. 174 : 5 shome L.R. 130 : 4 Sar. P.C.J. 392 : 6 Ind. Jur : 547 : 4 Ind. Dec. (N.S) 846 (P.C.) Such functions as they perform under Sections 15 . And 18 are neither administrative nor ministerial. It is written large, both over the Act and the Rules, that the procedure, to be followed is in general the procedure.\" of ", "10. By Section 18 , when the Controller has given a decision fixing the standard : rent, and in that event only, a certain right is; given to the parties. It is not called right of appeal but a right \"to apply, for revision\" of the Controller's order. As Section 24 provides that the procedure shall be that laid down in the Code for the, regular trial of suits \"as nearly as may be,\" it seems that the right is to have a re-trail before a higher . It is not what is, technically known as \"revision\" or \"reference \"and it does not seem to me exactly, the same thing as \"appeal by way, of re-hearing\" means in England. But, however the right in question is denominated or defined, its existence puts the Controller in the position of a subordinated to another , not simply as a matter of dignity or precedence, but in the sense that, the one controls the other, to confirm, very or nullify the orders of the other. If I may adopt the language used in for India 61 Ind. Cas. 112 : 48 C. 766 at P. 766 : 25 C.W.N. 80 : 32 C.L.J. 433 \"the Index of the relation of superior and inferior \" is there. The form of jurisdiction may or may not be one hitherto unknown in India as a form of appellate jurisdiction. It is by no means an unknown form elsewhere. ", "11. As regards the two classes of Courts that are mentioned in Section 18 , two features are clear: first, that the decision shall be final, secondly, in addition to a general power to make Rules \"to carry out the purposes of the Act\" has a particular power to make Rules regulating the procedure of these Courts. This power must doubtless be read with Section 24 . ", "12. By Section 15 of the Indian High, Act , 1861 now replaced by Section 107 of the Government of India Act, power of superintendence is given over all subject to the appellate jurisdiction. By the respective Sections 9 and 106 of the same Statutes the several High have such appellate jurisdiction as is vested in them by letters Patent. On turning to the fetters Patent to find what is the appellate jurisdiction one finds that it is \"from the Civil of the Bengal Division of the Presidency of Fort William\" and \"from all other subject to its superintendence.\" These last Words appear to make a vicious circle but are explained by the fact that Section 9 of the Act, 1861, had transferred to every power and authority vested in the Which superseded. As neither the Rent Controller nor the President of the Tribunal were , known in 186, a right of superintendence can only be made out under the Letters Patent in one or other of two ways by establishing that it or some other form of appellate jurisdiction has been since granted with reference to the Rent Controller or the President; or, secondly, by establishing that inherited a general jurisdiction over all of civil jurisdiction established or to be. Established. \",\" as has been stated, \"has superintendence where it has appellate jurisdiction, and has appellate jurisdiction where it has superintendence \" 27 B. 575 at P. 582 : 5 Bom. L.R. 562. But some jurisdiction must be shown before the rest can be inferred. ", "13. In my opinion the position is in no way altered if the question be considered upon the language of the Code. The word \"subordinate\" is not defined by the Code because Section 3 is not a definition. This section does not claim to be and is not intended to be exhaustive : 17 Ind. Cas. 676 : 37 B. 114 : 14 Bom. L.R. 947. Though not defined, the word \"subordinate\" plays an important part in the Code as may be seen from Sections 23 , 24 , 100 , 115 , 133 136 and 137 . There are also in the Code several phrases that may be contrasted and compared, thus : of a grade inferior ( Section 3 ); of highest grade ( Section 63 ); any ( Section 113 ); subject to their superintendence, ( Section 122 ); any of Civil jurisdiction ( Section 141 ). The words \"Civil \" in the Code appear to have a \"special meaning though this again is nowhere defined. I take them to mean exercising all the powers of as distinguished from s Which only exercise powers over Civil Matters of a special class or classes, e.g. under Act X of 1859, and the Land Acquisition Judge. The two broadest phrases in the Code are to be found in Sections 113 and 141 . The latter in no way touches upon questions of subordination; the former does, because reference is a form of appellate jurisdiction for India 61 Ind. Cas. 112 : 48 C. 766 at P. 776 : 25 C.W.N. 80 : 32 C.L.J. 433. But Order XLVI cuts down its application and it does not apply to the Rent Controller or the President. It may be argued that has superintendence over \"any \" because it has power to alter the order and so to give a power of reference to \"any .\" Beyond this argument, which in reference to special statutory s unknown to the Code seems very precarious, I can see nothing in the Code which even promises to be of any assistance on the present question unless it be that a comparison between Sections 23 and 24 appears to show that a may be subordinate within the meaning of the Code in a purely administrative sense. ", "14. Mr. in support of the Rule that all other of civil jurisdiction are subordinate to and under its appellate jurisdiction in a wide sense unless the has expressly provided to the contrary contended it. I assume that, for the purposes of this proposition, some form of territorial, limit is presupposed and I pass over the difficulty that arises from the fact that such a limit may be imposed in various ways. The proposition may mean that if a new was established for a new purpose and nothing was said to the contrary, then there would be an unlimited right of appeal in the narrow sense as well as subordination in other ways. But if this is not meant, then I think the proposition is seen to be indefinite and to stand in need of support and definition by authority. As a general proposition applicable to Bengal, it seems to me that on the face of the Act of 1861 and the Letters Patent no proposition so pimple and wide can possibly be correct. It is nowhere expressed and the several jurisdictions carefully defined and conferred are not to be extended or enlarged indefinitely upon general principles to the rigor of which His Majesty is in no way committed. The simple proposition is always tempting, yet I know of no case decided on this simple principle. In many of the decided cases it would have been a complete answer to the problem, yet the have made heavy weather before arriving at another answer. As the present case arises within the Ordinary Original Jurisdiction it may be said that this principle was implicit in the authority of the Supreme and that, if so, it is continued by Section 9 of the Act of 1861 and; by the, Government of India Act, ", "15. This has not been argued before me. My own consideration of the matter leads to reject the argument. This depends upon the Charter of the Supreme Court of 1774. As Clause 21 applies only to the Courts and Magistrates therein specified as having been established or appointed by the Charter of 1753 it has no application here. The only other clause that can be founded on is Clause 4. As to this clause, both , C.J., and , J., in v. Amrita Bazar Patrika. In the matter of 20 Ind. Cas. 81 : 17 C.W.N. 1253 at pp. 1272, 1289 : 14 Cr.L.J. 321 12 C.L.J. 452 : 41 C. 713 were of opinion that it refers to the individual Judges and not to the Course. The frame of the Charter when the purview of its successive clauses is examined strongly supports this reading. I would say that nothing that I am. Now stating is intended to abridge by a single inch the doctrine laid down with reference to cases which are within the revisional power, that, there is no form of judicial injustice which this Court, if need be, cannot reach.\" v. 12 C.W.N. 678 at P. 680 : Cr.L.J. 499. ", "16. It remains; therefore, to enquire what is the Calcutta Rent a Controller as a Court is under in any one of in which appellate jurisdiction can be exercised. The decisions of , in particular the case already cited H.D. Chatterjee v. 68 Ind. Cas. 274 : 26 C.W.N. 78 : 49 C. 528 : (1922) A.I.R. (c) 427. Deal with the problem in this way, in no way proceeding upon any more general principle. ", "17.The position under the Calcutta Rent Act of 1920 is this. The Act , to begin with, applies only to Calcutta in the sense of Municipal Calcutta, and the word \"Calcutta\" throughout the Act has that particular meaning. So far as I can find, the area to which the Act extends has never been enlarged since the Act was passed. The appointment of is to be found in of 5th May 1920, No. 24 T.M., and is \"as Controller for Calcutta for the purposes of the said Act.\" The Rules made by under the Act are dated 13th July 1020: the only amendment is dated 8th September 1921 and in no way affects the present question. The result is, therefore, that at present, taking the institution as it exists, no decision of the only Rent Controller appointed is in fact subject to revision by . If ever the Act is extended to another area it will be in the option of to appoint another officer as Controller for the new area or to appoint the same officer either as a separate office or by way of extension of the area over which his present jurisdiction holds. No doubt mere extension of his area by an administrative Act would put him within the control of , As matters stand, the only facts connecting him in any manner with the appellate jurisdiction of are these : that he is, as I think, subordinated to the President; that Awards of the made under the Calcutta Improvement Act (Bengal Act V of 1911) are appeasable to this Court under Act XVIII of 1911; that in some. Cases the President himself gives decisions which are deemed to be decisions of the ; and that where the word \"Judge,\" as distinct from \"Court\" appears in the I and Acquisition Act of 1894, the President is deemed to be the Judge. As between on the one hand and on the other, the question is, is this a link or a gap? ", "18. Certain lines of decisions have been thought to touch this question. I will refer first to the cases under the Rent Act (Act X of 1859). By that Act certain suits were made cognizable only by the Collector's and upou the terms of the Act. In certain suits the judgment of the Collector was to be final; and in these, if the Deputy Collector tried them, an appeal lay to the Collector whose decision was to be final. In other suits an appeal lay to the Zilla Judge or the Sudder according as the amount in the dispute was under or over Rs. 5,000. In 1861, therefore, the Sudder possessed appellate jurisdiction over the Collector's by the terms of the Act of 1859 itself and the High inherited there with a power of superintendence. The cases were fully discussed in 11 Ind. Cas. 207 : 38 C. 832 : 15 C.W.N. 863 : 14 C.L.J. 284. ", "19. They show that a right of appeal however limited, will let in the full general power of super intendence, but the right of appeal in those cases is clearly given by the special Code itself and applies to cases within the special jurisdiction conferred thereby, I may observe here that in dealing with a long line of decisions the important point to observe is the principle upon which the authorities in the end settle down. That is far more important than general language used in the earliest cases. The earliest case was apparently a Full Bench case, v. 7 W.R. 520 : B.L.R. Sup. Vol. 714 where the order assailed was made under Section 151 of Act X. There was no complaint that the of limited jurisdiction had exceeded its authority. The point was that the had refused to do something on the ground that it had no power. In that case the judgment of Mr. Justice showed by its reference to \"cases in which no appeal lies to the Judge\" that there is no reason to attribute the decision to any wider principle than I have mentioned; wider language was used in v. 10 W.R. 341. Where the Collector had in fact exceeded his jurisdiction but I do not read that allaying down that every of limited jurisdiction must be under the superintendence of the High ; the true basis of the 's interference under the Act of 1859 was considered in v. 23 Ind. Cas. 896 : 19 C.L.J. 300 : 18 C.W.N. 782 where it is rested on the provision for appeals. Perhaps, the neatest illustration of this reasoning is afforded by the case of 20 Ind. Cas. 420 : C. 518 : 17 C.L.J. 593 a decision under the Chota Nagpur Tenancy Act (Bengal Act VI of 1908) where a general power of revision was based on the fact that by Section 224 Sub-clause (2), a second appeal lay to this in certain cases. These cases deal also with difficulties as to whether the Acts expressly or impliedly vested power of superintendence elsewhere or took it away. They show that the Rule making power or even greater powers vested elsewhere do not avail to take away those powers of the which follow from its position as a of Appeal. Though a provision that the Commissioner shall be the High has this effect Darbari Panjiara v. Bhathi Roy 23 Ind. Cas. 883 : 41 C. 915 : 18 C.W.N. 575 : 19 C.L.J. 294 as also a provision that the appeal shall be to the Commissioner v. 23 Ind. Cas. 896 : 19 C.L.J. 300 : C.W.N. 782 These cases, therefore, are in my opinion, as Mr. argued, of no very direct application to the case of the Rent Controller. ", "20. By the Land Acquisition Act of 1894 an appeal lies to from any award of the established by the Act. Leaving on one side the cases in which the Collector's duty was not a judicial duty, I come to those in which it has been held that, in acting under Section 18 , the Collector is a and his proceedings are subject to revision. Administrator-General of Bengal v. Land Acquisition Collector 12 C.W.N. 241 and 13 Ind. Cas. 470 : 16 C.W.N. 927 : 16 C.L.J. 165 The later case simply followed the earlier and not without doubt. In the earlier case attention was almost entirely devoted to the question whether the Collector's function was judicial. The, reasoning on that assumption is very condensed but if this is a of Appeal from the award it would certainly seem to have superintendence over judicial proceedings for the initiation of the reference. ", "21. It is clear enough that, under all these special Statutes, appeal lies to . \"For the purposes of the application of the power of superintendence it is not necessary that an appeal should lie to this in the very proceeding in which the power of superintendence is invoked\" v. 23 Ind. Cas. 896 : 19 C.L.J. 300 : C.W.N. 782 If a case should arise by reason of an extension of the are under the Calcutta Rent Act, 1920, in which should have jurisdiction a question would then emerge which the cases I have been referring to do not answer. That question, but for the specific right of appeal conferred by the Land Acquisition Act , would have arisen under it also. The question is this when a new and special jurisdiction is conferred upon so as to make it for certain limited purposes a of special jurisdiction, the powers and duties of which are defined by Statute, has , in the absence of any special provision conferring appellate jurisdiction in any form, as regards those purposes, a right of superintendence arising out of the ordinary relationship between the two s? As I understand the view of in v. 68 Ind. Cas. 274 : 26 C.W.N. 78 : 49 C. 528 : (1922) A.I.R. (c) 427 {supra) they answer this question in the affirmative, aid I am in no way prepared to dissent. But the question at present is not solved by any reference even to this principle. From the Act of 1861, from the Letters Patent, and from the decisions, I draw this conclusion that it is not enough for the purposes of the Code or the Letters Patent which deal on definite principles with a regular order of s, that from the limited nature of the powers conferred, or from a mere comparison with other s, or from possible relationships there to not yet subsisting, a new may be styled an \"inferior \". An actual leadership to this must be established: an existing thread of connecting authority must be disclosed. The President of the is the person who is set up as a by Section 18 of the Rent Act of 1920. Under the Calcutta Improvement Act of 1911, \"\" is set up but that \"\" is the and not the President ( Section 70 ) The Act of the Governor-General in Council of the same year deals with appeals from, awards of the as the preamble shows. For the purpose of determining what is the award of the the President's decision is in certain cases the only thing that matters, and in certain cases he is entitled to sit alone and to exercise all powers of the ( Section 77 ). In addition to that the Calcutta Improvement Act has made the President the \"Judge\" in the sense of the Land Acquisition Act wherever the word \"Judge\" occurs. Now, superintendence is over s, not over jurisdictions. The present question must, it seems to me, be decided ultimately upon consideration whether the giving of a new jurisdiction to the President is to be regarded as a new jurisdiction conferred on an existing or to be regarded as the setting Up of a new for a new purpose. On that question I have entertained much doubt. The position is not quite the same as where a new jurisdiction is given to the Civil s. The or the President have no general jurisdiction at all. On the question whether there is one. from which in one jurisdiction an appeal lays to this or two s, which should be regarded-as absolutely, separate, I have come to the conclusion that the decision of has all the common sense of the matter even if it may be doubted whether it has all the strict logic on its side. After all, the President for some purposes is \"the Judge\" and is \"the ;\" appeals within the Calcutta Improvement Act lie mostly from his decisions; and in view of he fact that appeals from a Rent Controller's decisions may come as occasion arises either the Civil s of the District or, in Calcutta, to the President, I am in no way prepared to hold that an opinion which has been entertained by some four or five Judges of this is not the better opinion. ", "21. For these reasons or, perhaps, I should say, in these circumstances, the Rule-will be made absolute with costs."], "relevant_candidates": ["0000239791", "0000660982", "0001353567", "0001396941", "0001739201", "0001819006", "0001871184"]} {"id": "0001085477", "text": ["JUDGMENT , J. ", "1. The question referred by , Bangalore Bench, for the opinion of this court, at the instance of the assessee is this: ", "\"Whether, on the facts and in the circumstances of the case, the was right in holding that in computing the actual cost for the purpose of calculating development rebate under Section 33 no upward adjustment of Rs. 2,64,24,737 which the assessee had to bear as a result of devaluation of the rupee should be made ?\" ", "2. The assessee, a resident shipping company, returned a loss of Rs. 13,31,088 for the assessment year 1967-68, claiming a development rebate of Rs. 7,32,79,891 at the rate of 40 per cent. on the cost of two ships after taking into account the effect of devaluation of the rupee on June 6, 1966. The allowed development rebate to the extent of only Rs. 5,71,94,305 which alone, according to him, represented the development rebate on the actual cost of the imported ships on the ground that while Section 43A(1) of the I.T. Act provides for extra depreciation allowance on account of the effect of devaluation, there is no provision in the Act for allowing development rebate on the increased liability arising out of devaluation, and Section 43A(2) expressly forbids such a provision. The decided to allow the development rebate of Rs. 5,71,94,305 in the year in which a reserve is created in view of the fact that in the year in question there was a loss. ", "3. On the assessee's appeal to the , it was found that the ships in respect of which development rebate was claimed by the assessee had been purchased from a foreign country on January 25, 1966, and April 21, 1966, during the accounting year ending December 31, 1966. The original rupee cost of these two ships \"Chennai Penimai\" and \"Chennai Ookkam\" was Rs. 2,88,65,083 and Rs. 2,87,40,787, respectively. Due to devaluation of the rupee on June 6, 1966, the revised rupee cost of the ships came to Rs. 4,21,17,856 and Rs. 4,19,12,751. The was of the view that Section 43A(1) applies where as a result of the change in the exchange rate there is an increase or reduction in the liability of the assessee in terms of the rupee to pay the price of any asset in foreign currency or to repay monies borrowed in foreign currency specially for the purpose of acquiring the asset, and that the section does not apply unless, (i) the asset is acquired, and (ii) the liability existed before the change in the exchange rate took effect, that Section 43A(1) restricts the allowance to depreciation, etc., and does not refer to Section 33 dealing with development rebate and that Sub-section (2) of Section 43A specifically excludes development rebate being allowed under Section 33 in cases where the cost of the assets has increased due to devaluation. The submission made on behalf of the assessee before the was that even, apart from Section 43A , on general principles, extra liability incurred in respect of the capital assets has to be added to the cost of the assets. The relied upon the decision in 24 ITR 566 ( 45 ITR 602 (Mad) and declined to accept the submission on the ground that general principles cannot be applied where special provisions are applicable. The agreement dated August 6, 1964, between the foreign ship building yard which built the two ships and the assessee provided for payment of 15 per cent. of the cost of the ships on the signing of the agreement and the balance of 85 per cent. in equal half-yearly instalments, the first of them commencing six months after the delivery of the ships, and also for the ship building yard having a right to negotiate with a first class German bank and/or banking syndicate to have credit for the 85 per cent, extended to it subject to the approval of the purchaser of the ships. In accordance with that clause in that agreement a loan agreement was entered into between the assessee and the consortium of West German banks with whom the ship building yard had entered into an agreement, and the consortium of West German banks disbursed the 85 per cent, of the cost of the two ships amounting to DM 94,095,000 to the ship building yard on January 25, 1966, and April 21, 1966, before the devaluation of the rupee took place. The was, therefore, of the view that what remained at the time of the devalution was only the liability of the assessee to discharge its debt due to the consortium of West German banks and not any portion of the price of the ships and that the increased liability due to devaluation of the rupee cannot be added to the original cost of the ships for the purpose of claiming development rebate. In that view, the dismissed the assessee's appeal. ", "4. In the assessee's further appeal to the it was found that the assessee's system of accounting is mercantile. The cost of the fleet of ships of the assessee referable to the payment up to December 31, 1965, was shown in the balance-sheet of the assessee-company as on December 31, 1965, as Rs. 2,76,71,863. But in the balance-sheet as at December 31, 1966, the additions to the fleet were shown as Rs. 18,31,99,728 on the ground that due to the devaluation of the rupee the assessee's liability to the consortium of the West German banks for the ships acquired before the date of devaluation had gone up by Rs. 3,92,16,681 and that the additional liability had been included as addition to the cost of the fleet. The held that the increased liability to the consortium of the West German banks due to devaluation of the rupee, which took place after the two vessels had been acquired by the assessee, cannot be considered to be indirect expenditure laid out for the purpose of acquiring the assets and that though the actual cost of the ships would include the excess payable due to the devaluation of the rupee, there is a specific prohibition in Section 43A(2) of the Act against adopting the adjusted actual cost due to the devaluation for the purpose of development rebate allowable under Section 33 of the Act, and accordingly dismissed the appeal. ", "5. The facts established are that 15 per cent. of the total cost of the two ships had been paid by the assessee to the foreign ship building yard by the date of signing the agreement entered into between the foreign ship building yard and the assessee on 6th August, 1964, and credit for the balance of 85 per cent. had been given to by the consortium of West German banks with whom had entered into an arrangement in pursuance of the arrangement entered into for that purpose between the assessee and the consortium of West German banks. The payment of the entire cost of the two ships to had been completed on January 25, 1966, and April 21, 1966, and the ships had been acquired before the devaluation of the rupee took place on June 6, 1966. The additional liability as a result of the devaluation had accrued to the assessee which had to discharge its debt to the consortium of West German banks incurred before the date of the devaluation for the purpose of acquiring the ships. It was conceded by the learned counsel for the revenue that on general principles the additional liability arising out of the devaluation of the rupee would become part of the cost of the ships as it had been done by the assessee in revising the cost of the fleet in the balance-sheet as at December 31, 1966, as Rs. 18,31,99,728 while it had been shewn in the balance-sheet as at December 31, 1965, as Rs. 2,76,71,863 as being due to the devaluation of the rupee and the consequent increase in the assessee's liability to the consortium of West German banks incurred for the acquisition of the ships before the date of the devaluation of the rupee. ", "6. Our attention was drawn to the decision of a Bench of this court in Addl. . 109 ITR 646 (Mad), where the assessee's claim for development rebate was based on the fact that the actual cost of the machinery had increased by Rs. 48,342 consequent on the increase in the rate of exchange on the devaluation of the rupee, as the machinery was acquired before the date of the devaluation. The learned judges have observed that the effect of Sub-section (2) of Section 43A is to exclude the applicability of Section 43A(1) and, therefore, for the purpose of computing the actual cost of an asset for the purpose of deduction on account of development rebate under Section 33 the only statutory provision relevant is Section 43A(1) , defining the expression \"actual cost\". The learned judges upheld the assessee's right to development rebate on the actual cost as defined in Section 43A(1) which admittedly included the sum of Rs. 48,342. That decision will not apply to the facts of the present case for, in that case, the actual cost of the machinery had increased due to the devaluation of the rupee even before the date of the acquisition, unlike the present case. The learned counsel for the assessee invited our attention to the decision of a Bench of in I.T. Ref. No. 30 of 1975 [ --since reported in 112 ITR 64], where the question was whether the additional liability which the assessee incurred on account of the devaluation of the rupee in the midst of the relevant previous year in. relation to the repayment of the loan which it had borrowed for acquiring the imported machinery during the said year constituted an element in the actual cost of such machinery to the assessee for the purpose of allowing development rebate under Section 33 . The learned judges answered that question in favour of the assessee. This decision also will not apply to the facts of the present case for, in that case, the increased liability on account of devaluation was within the contemplation of the parties as an integral part of the original transaction and it was held by the learned judges that the assessee must be held to have incurred such liability in respect of each instalment, no sooner it started drawing upon the loan account, since the assessee maintained its accounts according to the mercantile system. The learned judges have observed in their judgment (pp. 84, 85) that cases like the one before them: ", "\"where the increased liability is in fact incurred prior to acquisition of the asset and it, therefore, becomes part of the cost of acquisition in its ordinary signification, are not within the ambit of the said section. The said section may be attracted in cases such as, for example, when an assessee maintains his accounts on cash receipt basis and the increased liability in respect of repayment of instalments of purchase price or loan accrues or arises for the first time after the acquisition and installation of the asset.\" ", "7. Section 33(1)(a) provides that in respect of a new ship which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section and of Section 34 , be allowed a deduction in respect of the previous year in which the ship was acquired, a sum by way of development rebate as specified in Clause (b). According to Clause (b), in the case of a ship, the develop ment rebate shall be forty per cent, of the actual cost thereof to the assessee. According to Section 43 , in Sections 28 to 41 and in that section, \"actual cost\" means the actual cost of the assets to the assessee reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority. Section 43A(1) lays down that: ", "\"Notwithstanding anything contained in any other provision of this Act, where an assessee has acquired any asset from a country outside India for the purposes of his business or profession and, in consequence of a change in the rate of exchange at any time after the acquisition of such asset, there is an increase or reduction in the liability of the assessee as expressed in Indian currency for making payment towards the whole or a part of the cost of the asset or for repayment of the whole or a part of the moneys borrowed by him from any person, directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset (being in either case the liability existing immediately before the date on which the change in the rate of exchange takes effect), the amount by which the liability aforesaid is so increased or reduced during the previous year shall be added to, or, as the case may be, deducted from, the actual cost of the asset as defined in Clause (1) of section 43 or the amount of expenditure of a capital nature referred to in Clause (iv) of Sub-section (1) of section 35 or in Section 35A or in Clause (ix) of Sub-section (1) of Section 36 or, in the case of a capital asset (not being a capital asset referred to in Section 50 ), the cost of acquisition thereof for the purposes of Section 48 , and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset as aforesaid.\" The Sub-section restricts the effect of devaluation to, (1) the expenditure of a capital nature on scientific research related to the business carried on by the assessee covered by Section 35(1)(iv) ; (2) expenditure on acquisition of patent rights or copyrights covered by Section 35A ; (3) expenditure bona fide incurred by a company for the purpose of promoting family planning amongst its employees covered by Section 36(1)(ix) ; and (4) capital asset (not being a capital asset referred to in Section 50 ) the cost of acquisition thereof for the purpose of Section 48 . Section 50 deals with a capital asset in respect of which a deduction on account of depreciation has been obtained by the assessce in any previous year either under the I.T. Act , 1961, or the Indian I. T. Act, 1922, or under executive orders issued when the I.T. Act (II of 1886) was in force. Section 48 relates to the mode of computation of income chargeable under the head \"Capital gains\". But Section 43A(2) speci fically lays down that: ", ".\"The provisions of Sub-section (1) shall not be taken into account in computing the actual cost of an asset for the purpose of the deduction on. ", "account of development rebate under Section 33 .\" ", "Therefore, it is clear that the legislature has clearly intended not to take the variation in the cost of acquisition of an asset arising out of the. ", "devaluation of the rupee for the purpose of granting development rebate under Section 33 of the Act. In these circumstances, we are of the opinion that the general principles, according to which the increase in the cost of the asset arising out of devaluation of the rupee must be treated as part of the cost of the asset, cannot be applied for the purpose of granting develop- ment rebate under Section 33 of the Act in view of the definite provision against it in Section 43A(2) of the Act, referred to above. \" Accordingly, we hold that the was right in holding that in computing the actual cost for the purpose of calculating development rebate under Section 33 no upward adjustment of Rs. 2,64,24,737, which the assessee had to bear as a result of the devaluation of the rupee, should be made and answer the question in the affirmative and against the assessee and in favour of the revenue. The assessee will pay the costs of the revenue. Advocate's fee Rs. 250. 8. A copy of this judgment under the signature of the Registrar and the seal of this court shall be forwarded to the I. T. A. concerned."], "relevant_candidates": ["0000500094", "0000564491", "0001205917", "0001207302"]} {"id": "0001090657", "text": ["PETITIONER: THE STATE OF PUNJAB Vs. RESPONDENT: BARKAT RAM DATE OF JUDGMENT: 30/08/1961 BENCH: , RAGHUBAR BENCH: , RAGHUBAR KAPUR, J.L. SUBBARAO, K. CITATION: 1962 AIR 276 1962 SCR (3) 338 CITATOR INFO : R 1964 SC 828 (9,15,26,53) F 1965 SC 481 (9) F 1966 SC1746 (5,11) R 1970 SC 940 (6) R 1970 SC1065 (4,9,11,12,13) R 1974 SC2136 (20) E 1981 SC 379 (16,40,45,47,50,53,62) F 1991 SC 45 (10,12) ACT: customs officer--If a police officer----Offences under the Sea Act--Confessions made to Officers--Conviction on the basis of such confessions--Validity-- Act, 1924 (19 of 1924), s.9(1)-- Foreign Exchange Regulation Act , 1947 , s. 23(1)--Sea Act, 1878, ss. 6 , 167(8) -- Police Act , 1861 , s. 1- - Indian Evidence Act , 1872 s. 25 . HEADNOTE: On receipt of information that some gold would be smuggled from Pakistan to India by the engine crew of the train coming from Lahore, the staff searched the engine on the arrival of the train at Amritsar and recovered a quantity of gold kept hidden underneath the coal in the tender of the engine. The driver of the engine, the respondent, who was arrested and taken to for interrogation, made statements before the officials admitting his , guilt. On the complaint of the Assistant Collector- of , the respondent was tried for offences under s. 23(1) of the Foreign Exchange Regulation Act, 1947, and s. 167(8) of the Sea, Act , 1878, and convicted by the Magistrate, but on revision set aside the conviction on the. grounds inter alia that Officers were police officers within the meaning of that expression in s. 25 of the Indian Evidence Act, 1872, 339 that confessional statements made to them were consequently inadmissible in evidence and that if they be excluded from consideration there was no other evidence to sustain the coviction. Held (, J., dissenting), that Officers are not police officers for the purpose of s. 25 of the Indian Evidence Act, 1872, and that the conviction of the respondent on the basis of his statements to the officers was maintainable. Per and duties of officers are very much different from those of the police officers and their possessing certain powers, which may have similarity with those of police officers, for the purpose of detecting the smuggling of goods and the persons responsible for it, would I not make them police officers. per , J.-- officers under the Sea Act, 1878, have the powers, and they also discharge the functions of police officers and, therefore, they are police officers for the purpose of the Indian Evidence Act , 1872, in so far as they exercise or discharge such powers and functions. A customs officer is a police 'officer qua his police functions, and a confession made to him cannot be provided against a person accused of an offence. Case-law Reviewed. JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 45 of 1959. ", "Appeal by special leave from the judgment and order dated October 9, 1958, of in Criminal Revision No. 599 of 1958. ", " and , for the appellant. ,, for the respondent. ", "1961. August 30. The judgment of and JJ. was delivered by , J., delivered a separate judgment. ", "RAGHUBAR DAYAL, J. -This appeal, by special leave, raises the question whether a Officer, either under the Land Act, 1924 (Act XIX of 1924) or under the Sea, Act , 1878 (Act VIII of 1878), is a:. police officer within the meaning of that expression in' s. 25 of the Indian Evidence Act. ", "340 ", ", respondent in this appeal, was the engine driver of 78 Down Train which reached Amritsar at about 4-15 P.m., on June 8, 1957. The train came from Pakistan. In consequence of information received with respect to the smuggling of gold by the engine crew, the staff boarded the engine at Atari and other staff of the surrounded the engine on its arrival at Amritsar. The engine was searched and a quantity of gold was recovered, having been found lying concealed underneath the coal in the front part of the coal tender in the engine. The respondent was further interrogated at the Customs Station and, as a result of further search, another quantity of gold was recovered from the rear part of the coal tender. A document, Ex. P.E., dated June 5, 1957, was also recovered. This document was shown to the respondent on June 9.. 1957, and the respondent inscribed on this document the note Ex. P. D1 to the effect \"... the letter is the same which had given to me yesterday. The same to be delivered to . who has come from Pakistan and has stayed at Grand Hotel.\" ", "On June 9, 1957, , the respondent, made certain other statements, Ex. P. K., to , Inspector of , stating therein : ", "\"As usual on the 8th June, 1957, I took two bundles of Indian Currency from . at Amritsar to Pakistan and when I brought 65 bars of gold from , from Pakistan, the Customs Officers recovered these 65 bars o f gold from the engine at the Railway Station, Amritsar. I had kept concealed these 65 bars of gold in the engine in the presence , of and , my two Firemen, at the Loco Shed. Lahore. I was to deliver this gold to . at Amritsar.\" ", "341 ", "A second statement was; made to the same Inspector on June 17, 1957, Ex. P. G. On this occasion too, he made a similar statement, adding that he was to get Rs. 200 against the delivery of gold. ", "On the complaint of the Assistant Collector of Land , Amritsar, tried for offences punishable under s. 23 (1) of the Foreign Exchange Regulation Act , 1947, and under s. 167(81) of the Sea Act, 1978, as amended in 1955. He was convicted by the Magistrate. The conviction was confirmed by the appellate Court, but was set aside on revision by which held that Officers were police officers within the meaning of that expression in s. 25 of the Evidence Act, that confessional statements made to them were consequently inadmissible in evidence and that if they be excluded from consideration, there was no other evidence to sustain the conviction. It further held that s. 27 of the Evidence Act did not apply to the facts of the case, as the recovery of gold was the result of search made by the Officers and not the result of' inter- rogating the respondent. The State of Punjab has filed this appeal against the acquittal order. ", "The only contention raised for the appellant in the appeal is that the Officers to whom the confessional statements were made were not police officers within the meaning of that expression in s. 25 of the Evidence Act. It was contended that the mere fact that powers to arrest certain persons, to make searches and to record evidence having a bearing on the alleged contravention of the legal provisions, are conferred on certain officers of the Department, is not sufficient to make them 'police officers' contemplated by s. 25 of the Evidence Act, even if it be assumed correct. as held by certain , that, officers on' whom the powers of the- Officer-in-charge of a Police Station under Chapter XIV of the Code of Criminal Procedure have been conferred, were police officers for the purpose of s. 25 of the Evidence Act. The contention for the respondent is that officers on whom such powers are conferred are really police officers, though they are not so called and that the difference in nomenclature is of no effect in considering them police officers for the purposes of s. 25 . We are of opinion that the contention for the appellant is sound and that the Officers are not police officers within the meaning of that term in s. 25 of the Evidence Act. ", "We may mention, at this stage, that the Officers to whom the respondent made confessional statements, were Land Customs Officers appointed under the Land Customs Act. Section 9(1) of this Act reads: ", "\"The Provisions of the Sea Customs Act, 1878 (VIIT of 1878), which are specified in the Schedule, together with all notifications, orders, rules or forms issued,, made or prescribed, thereunder, shall, so far as they are applicable, apply for the. purpose of the levy of duties of land customs under this Act in like manner as they apply for the purpose of the levy of duties of customs on goods imported or exported by sea.\" ", "Among the sections of the Sea Customs Act, made applicable by sub-s. (1) of s. 9 of the, Land Customs Act, are included all the sections in Chapters XVI and XVIT of the Sea ' Customs Act viz., ss. 167 to 193 . In view of these provisions, we have really to consider whether the Customs Officers under the Sea Customs Act., in view of the various powers conferred on them under the. Sea Customs Act, are police officers contemplated by s. 25 of the Evidence Act. If they are Police officers, the Land Customs Officers appointed under the Land Customs Act will also be police officers in view of similar power being conferred- on. them.' Before we come to the interpretation of the expression 'police officer', we would like to express what we consider to be the duties and powers of a police officer and of customs officers. ", "The Police Act , 1861 (Act V of 1861),is described as an Act for the regulation of police, and is thus an Act for tile regulation of that group of officers who come within the word. 'Police' whatever meaning be given to that word the preamble of the Act further says: 'whereas it is expedient to reorganise the police and to make it a more efficient instrument for the prevention and detection of crime, it is enacted as follows'. This indicates that the police is the instrument for the prevention and detection of crime which can be said to be the main object and purpose of having the police. Sections 23 and 25 lay down the duties of the police officers and s. 20 deals with the authority they can exercise. They can exercise such authority as is provided for a police officer under the Police Act and any Act for regulating criminal procedure. The authority given to police officers must naturally be' to enable them to discharge their duties efficiently. of the various duties mentioned in s. 23 , the more important duties are to collect and communicate intelligence affecting the public peace, to prevent the commission of offences and public nuisances and to detect and bring offenders to justice and to apprehend all persons whom the police officer is legally authorised to apprehend. It is clear, therefore, in view of the nature of the duties imposed on the police officers, the nature of the authority conferred and the purpose of the police Act, that the' powers which the police officers enjoy are powers' for the effective prevention and detection of crime in order to maintain law and order. ", "The powers of customs officers are really not for such purpose. Their powers are for the purpose of checking. the smuggling of goods and the due realisation of customs duties and to determine the action to be taken in the interests of the revenues of the country by way of confiscation of goods on which no duty had been paid and by imposing penalties and fines. Reference to s. 9 (1) of the Land- Act may be usefully made at this stage. It is according to the provisions of this sub-section that the provisions of the Sea Act and the orders, rules etc., prescribed thereunder, apply for the purpose of levy of duties of and customs under the Land Act in like manner as the apply for the purpose of, levy of duties of customs on goods imported or exported by sea. This makes it clear that the provisions conferring various powers on the Sea Officers are for the purpose of levying and realization of duties of customs on goods and that those powers are conferred on the customs officers also for- the same purpose. Apart from such an expression in s. 9 (1) of the, Land Act, there are good reasons in support of the view that the powers conferred on the Officers are different in character from those, of the police officers for the detection and prevention of crime and that the powers conferred on them are merely for the purpose of ensuring that dutiable goods do not enter, the country without payment of duty and that articles whose entry is prohibited are not brought in. It is with respect to the detecting and preventing of the smuggling of goods and preventing loss to the Central Revenues that Officers have been given, the power to search the property and person and to detain them and to summon persons to give evidence in an enquiry with respect to the smuggling of goods. ", "The preamble of the Sea Act says \"Whereas it is expedient to consolidate and amend the law relating to the levy of Sea -duties\". Practically all the provisions, of the Act are enacted to achieve this object. Section. 167 gives a long list of offences, but it is to be noticed that with- the exception of certain offences, all the others are to be dealt with by the Officers in view of s. 182 . The Officers are given the power to confiscate, to fix the duty and to impose penalties which can, in certain cases, be of enormous amounts. The offences mentioned in s. 167 , which are to be dealt with by a Magistrate, are mostly of the type in which the Officers have nothing to investigate. Offences at items Nos. 23 to 28 are with respect to certain acts committed by a pilot or a master of a vessel. The staff has merely to report the conduct for trial before a Magistrate. They have nothing to investigate about it. Similarly the offence at item 72 relates to a person's making a false declaration. Offences at items Nos. 74, 75 and 76 are with respect to the conduct of the Officers themselves. Items Nos. 76-A, 76-B and 78 deal with the obstruction by smugglers to the performance of duty by the Officer. The offence at item No. 77 relates to an offence where a police officer neglects to do his duty. Item 81 creates an offence with respect to a person doing certain things to defraud the . The Officer, therefore, is not primarily concerned with the detection and punishment of crime committed by a person, but is mainly interested in the detection and prevention of smuggling of goods and safeguarding the recovery of customs duties. He is more concerned with the goods and customs duty, than with the offender. ", "Similar view was expressed by this Court in Case(1). It was said at p. 741 : ", "\"It is clear on a perusal of the above pro- visions that the powers of search, arrest and detention are given to the Customs Authorities for the levy of sea customs duties an,. provision is made at the same time for a reference to the Magistrate in all cases where (1) [1953] S.C.R. 730. ", "346 ", "search warrants are needed and detention of arrested person is required\". ", "In v. The estate of Punjab (1)it was \"There are as many as 81 entriesin the ", "Schedule to s. 167 , besides those added later, but each one of those 81 or more entries, though an Offence, being an act infringing certain provisions of the sections and rules under the Act, is not a criminal offence They (i.e., Officers) have been only given limited powers of search. Similarly, they have been given limited powers to summon persons to give evidence or to produce documents.\" ", "Further it was observed at p. 291 \"It is true that the petitioners were dealt with by the Collector of , for the offence' of smuggling ; ", "were, found \"guilty', and a deterrent 'punish- ment was imposed upon them, but as he had' not been vested with the powers of a Magistrate or a criminal court, his proceedings against the petitioners were in the nature of proceedings, with a view to detecting the infringement of the provisions of the Sea Customs Act, and imposing penalties when it was found that they had been guilty of those infringements. Those penalties, the Collector had been empowered to impose in order not only to prevent a recurrence of such infringements, but also to recoup the loss of such revenue resulting from such infringements.\" ", "We are therefore of opinion that the duties of the Officers are very much different from those of the police officers and that their Possessing certain powers, which may have similarity with those of police.officers, for the purpose of detecting (1) [1959] Supp. 1 S.C.R. 274,289. ", "347 ", "the smuggling of goods and the persons responsible for it would not make them police officers. ", "There seems to be no dispute that a person who is a member of the police force is a police officer. A person is a member of the police force when he holds his office under any of the Acts dealing with the police. A person may be a member of the police in any other country. Officers of the police in the erstwhile Indian States and an officer of the police of a foreign country have been held in certain decided cases to be police officers within the meaning of s. 25 of the Evidence Act. There is no denying that these persons are police officers and are covered by that expression in s. 25 . That expression is not restricted to the police officers of the police forces enrolled under the Police, Act of 1861. The word 'police' is defined in s. I and is said to include all persons who shall be enrolled under the Act. No doubt this definition is not restrictive as it uses the expression 'includes', indicating thereby that persons other than those enrolled under that Act can also be covered by the, word 'Police'. ", "Sections 17 and 18 of the Police Act provide for the appointment of special police officers who are not enrolled under the Act but are appointed for special occasions and have the same Powers, privileges and protection and are liable to perform the same duties as the ordinary officer of the police. ", "Section 21 also speaks of officers who, are not enrolled as police officers and in such categories mentions hereditary or other village police officers. ", "The words 'police officer' are therefore not to be construed in a narrow way, but have to be construed in a wide and popular sense, as was remarked in, v. (1) where a Deputy Commissioner of police who wits actually a (1) (1876) I.L. I Cal. 207. ", "348 ", "police officer and was merely invested with certain Magisterial powers was rightly held to be a police officer within the meaning of that expression in s. 25 of the Evidence Act. ", "There has, however, arisen a divergence of opinion about officers on whom some powers analogous to those of police officers have been conferred being police officers for the purpose of s. 25 of the Evidence Act. The view which favours their being held police officers, is based on their possessing powers which are usually possessed by the police and on the supposed intention of the legislature at the time of the enactment of s. 25 of the Evidence Act to be that the expression 'police officer' should include every one who is engaged in the work of detecting and preventing crime. The other view is based on the plain meaning of the expression and on the consideration that the mere fact that an officer who, by no stretch of imagination is a police officer, does not become one merely because certain powers similar to the powers of a police officer are conferred on him. We now refer to certain aspects which lead us to consider that the expression \"police officer' has not such a wide meaning as to include persons on whom certain police powers are conferred. The object of enacting s. 25 of the Evidence Act, whose provisions formerly formed part of the Code of Criminal Procedure, was to exclude from evidence confessions made to the regular police which had a very bad reputation for the methods it employed in investigation, especially in forcibly extracting confessions with the object of securing a conviction. The past conduct of the members of the police organization justified the provision. It is too much to suppose that the did intend that all persons, who may have to investigate or arrest persons or seize articles in pursuance of any particular law of which at the time it had no conception, should be considered to be so unreliable that any confession made to them must be excluded just as a confession made to a regular police officer. If it could not contemplate the later creation of offences or of agencies to take action in respect to them under future legislation, it could not have intended the expression \"police officer' to include officers entrusted in future with the duty of detecting and preventing smuggling and similar offences with the object of safeguarding the levying and recovery of duties. If the had intended to use the expression (police officer' for such a wide purpose, it would have used a more comprehensive expression. It could have expressed its intention more clearly by making any confession made to any officer whose duty is to detect and prevent the commission of offences inadmissible in evidence. ", "The police officer referred to in s. 25 of the Evidence Act, need not be the officer investigating into that particular offence of which a person is subsequently accused. A confession made- to him need not have been made when he was actually discharging any police duty. Confession made to any member of the police. of whatever rank and at whatever time, is inadmissible in evidence in view of s. 25 . Officers can, even if the respondent's contention be accepted, be considered to be police officers only when they are exercising the limited powers which are similar to the powers of the police officers. This is clear from the observations in the cases relied upon on behalf of the respondent. ", "In v. Emperor (1) , J., made the following observations in this connection, at p. 630 \"As militating against the view which I am inclined to take as stated above, two points have been raised........... And the other (1) (1934) I. L. R. 61 Cal. 607. ", "350 ", "is that in section 25 of the Act, in respect of an officer of the police, there is a personal disability implied irrespective of the question whether be-is holding an investigation or not, while no such disability can be said to have been intended in the case of an excise officer. ......... And as regards the second point, I need only observe that, whereas police officers, by reason of section 22 of Act V of 1861, are always to be considered on duty for the purposes of the Act, all revenue officers, on the other hand, are not police officers and it is only such of them as may be exercising the powers of police officers and only when exercising such powers that they may be regarded as police officers.\" Similar views were expressed in (1) and (2). But, in our opinion, merely because similar powers in regard to detection of infractions of laws have been conferred on Officers of the Department as are conferred on Officers of the Police is not a sufficient ground for holding them to be police officers within the meaning of s. 25 of the Evidence Act. The powers of search etc. conferred on the former are as was observed in case (3) of a limited character and have a limited object of safeguarding the revenues of the . ", "It is also to be noticed that the Sea Act itself refers to police officer in contradistinction to the Officer. Section 180 empowers a police officer to seize articles liable to confiscation under the Act, on suspicion that they had been stolen. Section 184 provides that the officer adjudging confiscation shall take and hold posses- sion of the thing confiscated and every officer of police, on request of such officer, shall assist him in taking and holding such possession. This leaves (1) A. I. R. 1944 Lah. 57. ", "(2) A. I. R. 1953 Mad. 91 (3) [1959] Supp. 1 S.C.R. 274, 289. ", "351 ", "no room for doubt that a Customs Officer is not an officer of the Police. ", "Section 171-A of the Act empowers the Officer to summon any person to give evidence or to produce a document or any other thing in any enquiry which he be making in connection with the smuggling of any goods. It is well-settled that the Officer. when they act under the Sea Act to prevent the smuggling of goods by imposing confiscation and penalties, act judicially: , , Amritsar(1); (2). Any enquiry under s.171-A is deemed to be a judicial proceeding within the meaning of as. 193 and 228, Indian Penal Code , in view of its sub s.(4). It is under the authority given by this section that the Officers can take evidence and record statements. If the statement which is recorded by a Officer in the exercise of his powers under this Section be an admission of guilt, it will be too much to say that that statement is a confession to a police officer, as a police officer never acts judicially and no proceeding before a police officer is deemed, under any provision so far as we are aware, to be a judicial proceeding for the purpose of ss.193 and 228, Indian Penal Code or for any purpose. It is still less possible to imagine that the would contemplate such a person, whose proceedings are judicial for a certain purpose, to be a person whose record of statements made to him could be suspect if such statement be of a confessional nature. ", "It would be highly incongruous that moat of the offences under s.167 be disposed of by the Officers themselves and that such confessional statements recorded by Officers be good material for them to take action and to (1) [1958] S.C. R. 822, 826. ", "(2) [1959] S. C. R. 821, 830, penalize the offender to any amount of fine and yet the and statements be held to be not admissible in evidence if they have to be used at a trial for a criminal offence in a regular Court of law. ", "We therefore hold that the Officers are not police officers for the purpose of s. 25 of the Evidence Act. We further hold that the conviction of the respondent for the offences under s. 23(1) of the Foreign Exchange Regulation Act, 1947, 'and under s.167(81) of the Sea Act, 1878, on the basis of his statements to the Officers, was legal and was wrongly set aside by . We therefore allow the appeal, set aside the order of acquittal of the respondent for the aforesaid offences and restore the order of conviction passed by the Magistrate and confirmed by the Sessions Judge. We make it clear, however, that we do not express any opinion on the question whether officers of departments other than the police, on whom the powers of an Officer-in- charge of a Police Station under ch. XIV of the Code of Criminal Procedure, have been conferred, are police officers or not for the purpose of s. 25 of the Evidence Act, as the learned counsel for the appellant did not question the correctness of this view for the purpose of this appeal. regret my inability to agree. I cannot bring myself to hold that, while a confession made by an accused to a police officer is not admissible in evidence in a Court of law, the same if made, under exactly similar circumstances, to a customs officer can be relied and acted upon. The reasons for excluding the one from evidence would equally apply to the other. ", "Briefly stated, the case of the prosecution is as follows : On June 8, 1957, the Superintendent, , Amritsar, received information that some gold would be smuggled from Pakistan to India by the engine crew of the train coming to Amritsar from Lahore that evening. On enquiry by the officials, the engine crew stated that 100 tolas of gold was kept hidden underneath the coal in the tender of the engine. After recovering the said gold, , the respondent, who was the driver of the engine, was arrested and taken to the office for interrogation. On interrogation, it was disclosed that the gold was for delivery to one . Two days later . was also arrested at Amritsar. During the enquiry., and . made statements before the officials on different occasions admitting their guilt. In due course, the Assistant Collector, , Amritsar filed a complaint against the said two persons before the Additional District Magistrate Amritsar, and the said Magistrate convicted and sentenced them under s. 23 of the Foreign Exchange Regulation Act 1947 (Act No. 7 of 1947) and also under s. 167 (81) of the Sea Act, 1878 (Act No. 8 of 1878). On appeal, the Additional Sessions Judge, Amritsar, confirmed the said order of conviction and sentence. Against the said order, the accused filed revisions to . Apart from the confessions alleged to have been made by the accused, there was no other evidence to prove that they were guilty of the offence with which they were charged. It was contended before that the said confessional statements were hit by s. 25 of the Evidence Act and, therefore, they were inadmissible in evidence. , accepting the contention, held that, if the statements were excluded, there was no other evidence to sustain the conviction. On that finding, set aside the conviction of the accused. The State has preferred the present appeal against the acquittal of . ", "Learned counsel for the contended that officials are not police officers within the meaning of s. 25 of the Evidence Act, and, therefore, the statements made by the respondents confessing their guilt were admissible in evidence and the convictions based thereon were sustainable. ", "Before considering the decisions cited at the , let us look at the material provisions of the relevant Acts. The Indian Evidence Act , 1872 Section 25 No. confession made to a police officer shall be proved as against a person accused of any offence. ", "Code of Criminal Procedure, 1898. ", " Section 5 . (1) All offences under the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions hereinafter contained. ", "(2) All offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner of place of investigating, inquiring into, trying or otherwise dealing with such offences. ", "Police Art', 1861. ", " Section 1 ............ the word \"police\" shall include all persons who shall be. enrolled under this Act. ", "Sea Customs Act, 1878. ", " Section 6 . may appoint such persons as it thinks fit to be officers of , and to exercise the powers conferred, and perform the duties imposed, by this Act on such officers. ", "355 ", "The question is whether a customs officer is a police officer within the meaning of s. 25 of the Evidence Act. The Evidence Act does not define the term \"police officer\". The Sea Customs Act does not designate any officers appointed thereunder as police officers. The police Act of 1861 gives an inclusive definition of the word \"Police\" and therefore, it is not exhaustive; and \"it comprehends not only such things as it' signifies according to its natural import, but also enlarges the meaning of the said word so as to take in other things Section 5 .(2) of the Code of Criminal Procedure also contemplates investigation of, or inquiry into, offences under other enactments regulating the manner or place of investigation, that is, if an act creates an offence and regulates the manner and place of investigation or inquiry in regard to the said offence, the procedure proscribed by the Code of Criminal Procedure will give place to that provided in that Act. If the said Act entrusts investigation to an officer other than one designated as police officer, he will have to make the investigation and not the police officer. In this situation, the mere use of the words police officer\" in s. 25 of the Evidence Act does not solve the problem, having regard to permissible' rules of interpretation of the term \",police officer\" in that section. It may mean any one of the following categories of officers (i) a police officer who is a member of the police force constituted under the Police Act ; (ii) though not a member of the police force constituted under the Police Act , an officer who by statutory fiction is deemed to be a police officer in charge of a police station under the Code of Criminal Procedure; and (iii) an officer oh whom a statute confers powers and imposes duties of a police officer under the Code of Criminal Procedure, without describing him as a police officer or equating him by fiction to such an officer. Now, which meaning is to be attributed to the term \"police Officer\" in s. 25 of the Evidence Act ? In the absence of a definition in the Evidence Act it is permissible to travel beyond the four corners of the statute to ascertain the legislative intention. What was the meaning which the legislature intended to give to the term \"police officer\" at the time the said section was enacted ? That section was taken out of the Criminal Procedure Code , 1861 (Act 25 of 1861) and inserted in the Evidence Act of 1872 as s. 25 . in his Introduction to the Evidence Act states at p. 171 thus : ", "\"I may observe, upon the provisions relating to them, that sections 25 , 26 and 27 were transferred to the Evidence Act verbatim from the Code of Criminal Procedure, Act XXV of 1861. They differ widely from the law of England, and were inserted in the Act of 1861 in order to prevent the practice of torture by the police for the purpose of extracting confessions from persons in their custody.\" So too, , J., in Queen Empress v. (1) gave the following reasons for the enactment of s. 25 of the Evidence Act at p. ", "523. \"I the legislature had in view the malpractices of police officers in extorting confessions from accused persons in order to gain credit by securing convictions, and that those malpractices went to the length of positive torture; nor do I doubt that the , in laying down such stringent rules, regarded the evidence of police officers as untrustworthy, and the object of the rules was to put a stop to the extortion of confession, by taking .%way from the police officers as the advantage of proving such exported confessions during the trial of accused persons.\" ", "(1) (1884) I. L. R. 6 All. 509. ", "357 ", "It is, therefore, clear that s.25 of the Evidence Act was enacted to subserve a high purpose and that is to prevent the police from obtaining confessions by force, torture or inducement. The salutary principle underlying the section would apply equally to other officers, by whatever designation they may be known, who have the power and duty to detect. and investigate into crimes and is for that purpose in a position to extract confessions from the accused. ", "In the Oxford Dictionary, the word \"police\" is defined thus : ", "\"The department of government which is concerned with the maintenance of public order and safety, and the enforcement of the law; the, extent of its functions varying greatly in different countries and at different periods. ", "The civil force to which is entrusted the duty of maintaining public order, enforcing regulations for the prevention and punishment of breaches of the law, and detecting crime; construed as plural, the members of a police, force; the constabulary of a locality.\" ", "Shortly, stated, the main duties of the police are the prevention and detection of crimes. A police officer appointed under the Police Act of 1861 has such powers and duties under the Code of Criminal Procedure, but they are not confined only to such police officers. As the State's power and duties increased manifold, acts which were at one time considered to be innocuous and even praiseworthy have become offences, and the police power of the State gradually began to operate, on different subjects. Various Acts dealing with Customs, Excise Prohibition.. Forest, Taxes etc., came to be passed, and the prevention, detection and investigation of offences created by those Acts came to be entrusted to officers with nomenclatures appropriate to the subject with reference to which they functioned. It is not the garb under which they function that matters, but the nature of the power they exercise or the character of the function they perform is decisive. The question, therefore, in each case is, does the officer under a particular Act exercise the powers and discharge the duties of prevention and detection of crime ? If lie does, he will be a police officer. ", "There is a conflict of judicial opinion on the question raised. The earliest decision, which was followed by other later decisions, is that of in (1). The decision in that case was given in 1876. It indicates in a way how the courts understood the term \"Police officer\" in. or about the time when s. 25 was inserted in the Evidence Act : There the question was whether a Deputy Commissioner of Police before whom a prisoner made a statement was a police officer within the meaning of s. 25 of the Evidence Act. It was argued that the term \"police officer\" comprised only that class of persons who are called under the Bengal Police Act the members of the police force. Answering that question, the learned Chief Justice observed at p. 215 thus : ", "\"......... in construing the 52th section of the, Evidence Act of 1872, I consider that the term \"police officer\" should be read not in any technical sense but according to its 'more comprehensive and popular meaning. In common parlance and amongst the generality of people, the Commissioner and Deputy Commissioner of are understood to be officers\", of , or in other words \"police officers\", quite as much as the more ordinary members of the force.........\" ", "It is true that in that case I the court was concerned with the question whether the Deputy Commissioner of Police was a police officer. But that decision laid (1) (1876) 1.L.R. I Cal. 207. ", "359 ", "down that to be police officer within the meaning of s. 25 of the Evidence Act one need not be a, member of the police force under the Act of 1861. This- decision stood the test of time and indeed it represented the contemporaneous judicial opinion of the time. In 1926 a full bench of in (1) held that an Abkari Officer under the Bombay Abkari Act, who, in the conduct of investigation of an offence punishable under the Bombay Abkari Act exercised the powers conferred by the Code of Criminal Procedure', 1898, upon an officer in charge of a police station for the investigation of a cognizable offence, was a police officer within the meaning of s. 25 of the Indian Evidence Act. , after considering the ,relevant provisions and the case law on the subject came to the following conclusion, at p. 94 : ", "\"After giving then my best attention to the arguments, which have been addressed to us, in my judgment, we should hold that as has deliberately conferred upon these Abkari officers substantially all the powers of a Police officer, they have- thereby in effect made them Police officers within the meaning of s. 25 .............\" ", ", J., stated much to the same effect at p. 97 : ", "\"It seems to me a perfectly fair interpretation of section 25 to say that the officer within the meaning of that section is an officer, who exercises the powers of police conferred upon him by law, whether he is called a officer or he is called by any other name and exercises other functions also under other provisions of law. He is a officer within the meaning of section 25 , if in the investigation of offences under particular Act he exercises the powers of an, officer in charge of a police station for the investigation of a cognizable offence conferred upon him by that Act.\" ", "(1) (1927) 1. L. R. S. Bom. 78. ", "360 ", "This decision, therefore, accepted the principle that nomenclature given to a particular officer was not decisive of the question whether he was a police Officer, but the powers conferred upon him.afforded the criterion. It is true that s. 41 of the Bombay Abkari Act stated, \"Every such officer shall in the conduct of such investigation exercise the powers conferred by the Code of Criminal Procedure, 1898, upon an officer in charge of a police- station for the investigation of a cognizable offence.\" ", "But conferment of power on an officer by reference to another Act in only one of the legislative devices and such conferment also could be made by specific provisions in an Act without reference to another Act. A full Banch of in v. Emperor(1) adopted the same test for deciding whether an officer was a police officer or not. That decision related to an excise officer, and the Bengal Excise Act conferred powers on the excise officers similar to those conferred by s. 41 of the Bombay Abkari Act on the Abkari Officers. , who delivered the leading judgment, after scrutinizing the relevant provisions and the cases concluded his discussion thus at p. 629 : ", "\"It is the nature of the duties performance of which was likely to give occasion for improper influences being exercised or felt, and not any particular aversion for a particular department of public service that must have moved the legislature in enacting the provision. I am, therefore, of opinion that if matterrs which previously did not fall within the category of crime subsequently came to be recognized as such and on that' officers have been appointed to discharge or have been vested with powers of discharging duties (1)(1934) 1. L. R. 61 Cal. 60 7. ", "361 ", "which a police officer had to discharge in 1872, then whatever may be the name of the department to which such officers may have been attached, such officers must be, regarded as coming within the term \"police officer\", with regard to whom section 25 of the Evidence Act was intended to be applied\" ", "This passage neatly summarises the law on the subject, and I entirely agree with it. , J., in a separate judgment came to the same conclusion and he stated at p. 654 thus \"Since 1872, not only have new off(-noes been created by later Acts, but new bodies of officers have been created who are vested with powers of police with regard to these offenses.\" ", "Then the learned Judge posed the question, \",Would that make any difference to the application of the section to these officers ?\" and answered it thus at 656 : ", "\"The words \"police officer\" may be plain, but they are not defined in the Evidence Act . The contention that the term applies only to members of the police force is not borne out by authority. On the other band, it is quite consistent with the scheme of the Act that t person, who exercises the powers of a police officer, should be hit by the prohibitive provision of section 25 .\" ", "Turning to Madras decisions, it would be enough if only one decision of is noticed, for the other decisions were made by single Judges and were also considered in the said decision. A division bench of in (1) was considering the status of an excise officer under the Opium Act . The learned Judges held that an excise officer invested with the powers of an officer in charge of a police station for investigation of offences under (1) A.I.R. 1953 Mad. 917. ", "362 ", "s.20 A of the Opium Act w as a \"police officer\" coming within the purview of s. 25 of the Evidence Act. , J., made the following observations at p. 918 \"There is no exhaustive definition of the expression 'Police Officer' in any of our statutes........... In the absence of a statutory definition, and, apart from all authority, one would be tempted to say that a police officer is a person whom any statute or other provision of law calls such or, on whom it confers all or substantially all the powers and imposes the duties of a police officer. If he is expressly called a police officer there is no difficulty whatsoever. If he is not so called then the next step is to ask : ", "what does the law require him to do ? What are the ditties imposed on him ? and what are the powers conferred on him ? If these are substantially those of a police officer there need be no qualms in regarding him as one. If his powers and duties are confined to a particular extent of territory or to a particular subject matter he will be a police officer only in respect of that territory or that subject-matter. The material thing to consider would be not the name given to him, nor the colour of the uniform be is required to wear, but his functions, powers and duties. A police officer does not cease to be such merely because he is put into a white, khadder uniform instead of one in khaki drill; a medicine will be just the same whether it is packaged in a glass jar or a plastic container,\" ", "This passage, in my view lays down with clarity the real test for determining whether a particular officer is a police officer or not within the meaning of a statute. I am in full accord with the said statement. ", "363 ", "A full bench of in v. King Emperor, (1) struck a different note. That Court swung to the other extreme and held that \"the distinction between a person who is nothing but a Police Officer and one who is primarily not a Police Officer but merely invested with the powers of a Police Officer is material and cannot be ignored for the purpose of Construing section 25 of the Evidence Act.\" on the basis of the said principle, it came to the Condition that an Excise Officer was not a \"Police Officer\" within the meaning of s. 25 of the Evidence Act. With at respect to the learned Judges, who decided that case, I think that \"they looked too narrowly at the appearance of things and declined to look at the substance behind the appearance\". If that interpretation be correct, an officer, who is simply designated as a police officer, will come under the mischief of s. 25 of the Evidence Act, whereas an officer, who is not described as a police officer but who is entrusted with all the police powers and duties would not be hit by it. This adherence to the letter in derogation of the spirit of t statute would defeat the object of the statute itself. I, therefore, cannot accept this judgment as correct. ", "It is not necessary to multiply decisions discussing the general principles. But I would notice a few decisions relating to Officer. , J., in In re Mayalavahanam (2) expressed the view that an Assistant Inspector of was not a police officer within the meaning of s. 25 of the Evidence Act. In coming, to that conclusion, the learned Judge distinguished a decision of a division bench of on the ground that the Ordinance on which that decision turned specifically mentioned that in conducting the investigation particular officers would have all the powers, duties, privileges and liabilities of an officer in charge of a police station under the Criminal Procedure Code . ", "(1) (1932) I.L.R. 12 Pat. 46. ", "(2) I.L.R. [1947] Mad. 788. ", "364 ", "I do not see how that circumstance makes a difference in the application of s. 25 of the Evidence Act. The fact that that Ordinance, by reference to the Code of Criminal Procedure, conferred powers on the Commercial Tax Officers, but the Sea Act conferred similar powers not by reference to any Code, but by express enactment, could not make any difference in the application of the principle. I shall consider at a later stage the scope of the powers conferred by the Sea Act on a Officer in the matter of prevention, detection and investigation of crimes. , on the other hand, in (1) held that a Officer under the Sea Act had powers analogous to police powers relating to prevention or detection of crimes and, therefore, he was a police officer within the meaning of s. 25 of the Evidence Act. in . v. (2 ) held that a Officer was a police officer within the meaning of s. 25 of the Evidence Act, whereas in (3) took a contrary view. The conflicting views were mainly based upon the alleged circumstance that under the Sea Act,. though powers of prevention and detection were conferred on a Officer, no powers of investigation was given to him. I shall consider this aspect at a later stage. The foregoing consideration of the case law and the statutory provisions yields the following results : The term \"police officer\" is not defined in the Evidence Act , or, as a matter of fact, in any other contemporaneous or subsequent enactment. The question, therefore, falls to be decided on a fair construction of the provisions of s. 25 of the Evidence Act, having regard to the hi-story of the legislation and the meaning attributed to that (1) A.I.R. 1959 Punjab 1 13. (2) A.I.R. 1953 Cal. 219. ", "(3) A.I.R, 1961 Mysore 7. ", "365 ", "term in and about the time when s. 25 of the Evidence Act came to be inserted therein. If a literal meaning is given to the term \"police officer\" indicating thereby an officer designated as police officer, it will lead to anomalous results. An officer designated as a police officer, even though he does not discharge the well understood police functions, will be hit by s. 25 of the Evidence Act, whereas an officer not so designated but who has all the powers of a police officer would not be hit by that section; with the result, the object of the section would be defeated. The intermediate position, namely, that an officer can be a police officer only if powers and duties pertaining to an officer in charge of a police station within the meaning of the Code of Criminal Procedure are entrusted to him, would also lead to an equally anomalous position, for, it would exclude from its operation a case of an officer on whom specific powers and functions are conferred under specific statutes without reference to the Code of Criminal Procedure. The Code of Criminal Procedure does not define a \"Police officer\" and is 5(2) thereof makes the procedure prescribed by the Code subject to the procedure that may be prescribed by any specific Act. This construction would make the provisions of s. 25 of the Evidence Act otiose in respect of officers on whom specific and incontrovertible police powers are conferred. But the third position would not only carry out the intention of the , but would also-make the section purposive and useful without doing any violence to the language of the section. A police officer within the meaning of s. 25 of the Evidence Act may be defined thus : An officer, by whatever designation he is called, on whom a statute substantially confers the powers and imposes the duties of the police is a police officer within the meaning of s. 25 of the Evidence Act. With this background let us scrutinize the provisions. of the Sea Act to ascertain whether such powers have been conferred and duties imposed on a officer. Section 167 of the Sea Act opens out with the following words: \"The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference 'to such offences respectively:\" Chapter XVI of the Act deals with offences and penalties. Section. 167 provides penalties for offences in a tabular form. The first column gives the particulars of offences, the second column gives the section to which the offence has reference and the third column gives the penalties in respect of each offence. Apart from the facts that the statute itself, in clear terms, describes the acts detailed in the first column of s. 167 as offences against particular laws, the acts described theorem clearly fall within the definition of \"offences\" in the General Clauses Act and the Indian Penal Code , Therefore, any contravention of any of the provisions of the Act mentioned in s. 167 of the Sea Act is an offence. Chapter XVII prescribes the procedure relating to Offences, appeals, etc. Section 169 confers on an officer of , duly employed in the prevention of smuggling, the power to search on reasonable suspicion any person on board of any vessel in any port in India or within the Indian customs waters or any person who has landed from any vessel. Section 170A enables the said officer, for detecting secreted goods to have the body of a person suspected of smuggling X-rayed after obtaining the order of a Magistrate. Section 171 empowers such officer to board a vessel for searching it an order to ascertain whether any breach of the Act or any other law relating to customs has been or is being or is likely to be committed. Section 171A , which was inserted by Act 21 of 1955 gives power to the said officer to summon persons to give evidence and produce documents, presumably to facilitate investigation of the offence. Under s. 173 367 an officer of may arrest a person against whom a reasonable suspicion exists that he has been guilty of ,in offence under the Sea Act. Under s. 178 , anything liable to confiscation under the Act may be seized in any place by a officer. The said sections, therefore, create offences, and, for the purpose of prevention and detection of such offences, confer specific powers on the officers to search persons or places, to arrest persons suspected of such offences and to make necessary investigation in respect thereof. The officers under the Act have the powers, and they also discharge the functions, of police officers and, therefore, they are police officers for the purpose of the Evidence Act in so far as they exercise or discharge such powers and functions. I, therefore, hold that a officer is a police officer qua his police functions. If so, it follows that a confession made to him cannot be proved against a person accused of an offence. ", "In the present case, it is not disputed that if the confession made by the respondent to the officers was excluded, there would be no other evidence on which the conviction could be sustained. Therefore,, the order of is correct. ", "In the result, the appeal fails and is dismissed. By COURTIn accordance with the opinion of the majority,the appeal is allowed. ", "Appeal allowed. ", "368"], "relevant_candidates": ["0000138167", "0000970561", "0001055970", "0001251810", "0001823043", "0001827447", "0001882646", "0001961189"]} {"id": "0001104022", "text": ["JUDGMENT , J. ", "1. These four references have been submitted by the in respect of the same assessee raising identical issues arising out of the same facts relating to asst. yrs. 1967-68, 1968-69, 1969-70 and 1970-71. ", "2. The relevant facts appearing from the statement of the case in IT Ref. No. 336 of 1982 are that the assessee had entered into an agreement with Basle w.e.f. 1st Jan., 1956 onwards and was getting assistance in the manufacture of wide range of products listed in the agreement as well as vide supplementary agreement from time to time. Tinopal was one such product the assessee was licensed to manufacture under the provisions of this agreement. In the manufacture of Tinopal cyanuric chloride is one of the raw materials and was being consumed in large quantities. Until the assessee decided to manufacture the said raw material by himself, the same was bought from the market. The assessee entered in another supplementary agreement on 14th July, 1965 for manufacturing cyanuric chloride. Under this agreement the assessee had to pay certain amounts in five equal instalments to for acquiring technical know-how. The first instalment was payable on the commission of the cyanuric plant on 31st March, 1966. The second instalment was payable in the financial year 1966-67 and each subsequent instalment was payable in the following financial years. Towards payment of these instalments in each year, which was paid in foreign currency and its rupee value was claimed as a deduction for the asst. yr. 1967-68, and subsequent assessment years. The first payment in respect of which was made in financial year 1966-67. The rupee value of these instalments was Rs. 1,51,500. The assessee claimed deduction thereof as business expenditure of manufacturing cyanuric chloride commencing from financial year 1966-67 as a revenue expenditure. The rejected the contention of the assessee by taking the view that because the payments were made for getting sub-licence to manufacture cyanuric chloride for a period not less than 10 years, it could not be claimed as a revenue expenditure. The CIT(A) held that the payment in question represented normal revenue expenditure which should have been allowed as a deduction by the . The confirmed the order. It held that the agreement dt. 14th July, 1965 was entered into for manufacture of raw material for the purpose of production of Tinopal. It is also held that on termination of agreement there would be no useful knowledge left which would help the assessee in manufacturing cyanuric chloride. It also noticed that under clause 22 of agreement dt. 1st Jan., 1956 the assessee had to refrain from using any of the 's patents. ", "3. In the first instance the having rejected the application under s. 256(1) of the IT Act submitted the question of law arising out of its order, the applied under s. 256(2) before this Court and as per the direction contained in the order dt. 22nd Sept., 1981 in IT Ref. No. 233 of 1981 the following question of law has been referred to this Court for its opinion : ", "\"Whether, on the facts and in the circumstances of the case, the has been right in law in holding that the amount of Rs. 1,51,500 being the instalment payable by the assessee to under the agreement dt. 14th July, 1965 is allowable as revenue expenditure ?\" ", "For subsequent years also the same question has been referred. However, the amount claimed in each case is different. ", "4. We have heard the learned counsel for the parties. ", "5. , learned counsel appearing for the applicant-Revenue, contended that under the agreement dt. 14th July, 1965, the assessee was granted sub-licence which goes to show that with whom the assessee had collaboration agreement w.e.f. 1st Jan., 1956 had acquired the right to manufacture in India cyanuric chloride under the licence from (\"\" for brevity) under or according to 's patents processes, know-how and improvements under a supplemental agreement dt. 22nd April, 1963. Likewise, has also obtained licence from a German company \"\" to manufacture in India cyanuric chloride under or according to 's patents, processes, know-how and improvements. ", "Under this right to manufacture the said product in India from the said two companies. had a right to sub-licence 's associates in India for manufacture of the said products. In exercise of that right had entered into the agreement with the assessee on 14th July, 1965. The sub-licensed the assessee to manufacture cyanuric chloride under 's as well as 's patents processes, know-how and improvements. In consideration of the said sub-licence permitting the assessee to manufacture cyanuric chloride under the said two processes, the assessee was to pay a fee of 50,000 US $ in five equal annual instalments of 10,000 US $ each to . On these precincts , learned advocate, contends that the assessee has acquired an advantage or benefit of enduring nature. Under the said agreement by which cyanuric chloride was required to be manufactured by the assessee. Once technical know-how disclosed to the assessee, permanently with the assessee and even after the expiry of the agreement the knowledge of the process of manufacturing cyanuric chloride whether by or by will not be obliterated. Even on returning of the designs, etc. The plant for manufacturing cyanuric chloride would not be discontinued even after the expiry of the period, but continue to manufacture the same under the process already made known to the assessee, inasmuch as there was no stipulation under the agreement either principal or supplementary that on termination of the agreement, the assessee would discontinue the manufacture of cyanuric chloride. ", "6. On the other hand it was contended by the learned counsel for the assessee that the technical know-how acquired under the said agreement was operational cost for the running the business and the amount paid to the collaborator of technical know-how was only paid for the use of the process developed by or for manufacturing cyanuric chloride in India and acquisition of right to use is distinct from acquisition to the right itself. Expenditure for regularly operating the business cannot be considered to be the capital expenditure. Mere right to use technical know-how without having proprietary right therein cannot be considered capital in the hands of the assessee. He relied on the decision of the Hon'ble Supreme Court in . (1987) 165 ITR 51 (SC). ", "7. We have given careful consideration to the rival contentions. Under s. 37 of the IT Act, 1961 all expenditure laid out wholly and exclusively for the purpose of business or profession are to be allowed as deduction while computing the income provided the same are not in the nature of capital expenditure or personal expenses of the assessee, apart from the condition that the same may not be governed by any other express provision of the Act. In the present case the only question that arises for consideration is other condition being satisfied that the expenses are wholly and exclusively for the purpose of business and are not governed by any other express provision, whether the expenses claimed are of capital nature. ", "8. The expression \"capital expenditure\" has not been defined in the statute, nor the words in the 'nature of capital expenditure' has been subject to any definition clause. Therefore, the expression has to be construed in ordinary business term. The , in the course of determining this question have evolved various tests to determine as to when any expenditure can be said to be a capital and when a particular expenditure can be said to be of revenue nature. ", "9. In some cases it has been held that expenditure which brings into existence asset or advantage of enduring benefit is to be considered as capital expenditure. A disbursement, when it is referable to fixed capital or capital asset is treated as capital expenditure, but when it relates to circulating capital or stock in trade it is treated as revenue. Yet another test that has been applied is that where an expenditure relates to the framework of the assessee's business, it is to be treated as capital as opposed to revenue when it is related to running of the business. Initial expenditure for commencement of a business is ordinarily considered a capital outlay. So also money spent on acquiring goodwill has been held to be capital outlay. But no one test is of universal application. in (1989) 177 ITR 377 (SC) quoted with approval following observation of Lord in vs. Commr. of Taxation of the Commonwealth of Australia (1966) AC 224 : ", "\"The solution to the problem is not to be found by any rigid test or description. It has to be derived from many aspects of the whole set of circumstances some of which may point in one direction and some in the other. One consideration may point so clearly that it dominates other and vague indications in the contrary directions. It is a common sense appreciation of all the guiding factors which must provide the ultimate answer.\" ", "10. Test which was laid by Viscount in the case of (1925) 10 Tax Cases 155. \"When an expenditure is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of trade. I think that there is good reason (in the absence of special circumstances leading to an opposite conclusion) for treating such expenditure attributable not to revenue but to capital.\" ", "11. The opinion was quoted with approval by in (1951) 20 ITR 475 (SC) and in catena of cases thereafter. ", "12. Lord in vs. (1910) Tax Cases 529 opined that the capital expenditure is a thing which is going to be spent once and for all income expenditure is a thing which is going to be recur every year. In the same case Lord in his concurring opinion said : ", "\"It is also not essential that the word \"asset\" be confined to something material.\" ", "What is meant by expression 'once and for all' ? However, the test is as was explained in (1955) 27 ITR 34 (SC) the expression \"once and for all\" in Viscount 's test does not mean that the payment should be made in a single sum and at one time. The expression \"once and for all\" is used to denote an expenditure which is made once and for all for procuring an enduring benefit to the business as distinct from recurring expenditure in the nature of operational expenses. It was said : ", "\"If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand, it is made not for the purpose of bringing into existence any such asset or advantage for but for running the business or working it with a view to produce the profit, it is a revenue expenditure. ", "The aim and object of expenditure would determine the character of expenditure whether it is a capital expenditure or a revenue expenditure.\" ", "13. Another test evolved was to find out as to whether the expenses incurred are part of the working expenses or the expenditure laid out as part of the process of profit earning. In other words, it is capital outlay if such expenditure is necessary for the acquisition of property or of rights of a permanent character, the possession of which is a condition of carrying on its trade at all. This was said by the Lord in vs. (1924) 8 Tax Cases 671. ", "\"Is it part of the company's working expenses ? Is it expenditure laid out as part of the process of profit making ? Or on the other hand is it a capital outlay; is it expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which is a condition of carrying on its trade at all ?\" ", "14. The test was quoted with approval by in (1980) 124 ITR 1 (SC). Further principle which their Lordships of the Hon'ble Supreme Court in (supra) quoted with approval from the case of vs. Federal Commr. of Taxation 72 CLR 634 is that - \"What is an outgoing of capital and what is an outgoing on account of revenue depends on what the expenditure is calculated to effect from a practical and business point of view rather than upon the juristic classification of the legal rights, if any secured, employed or exhausted in the process.\" ", "15. said that \"when dealing with cases of this kind where the question is whether expenditure incurred by an assessee is capital or revenue expenditure, the question must be viewed in the larger context of business necessity or expediency. If the outgoing expenditure is so related to the carrying on or the conduct of the business that it may be regarded as an integral part of profit earning process and not the acquisition of asset or right of a permanent character, the possession of which is a condition of carrying on business, the expenditure may be regarded as revenue expenditure.\" ", "16. Another test which was laid out that the advantage which is secured must be in the capital field that the expenditure would be disallowed. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably by leaving the fixed capital untouched, the expenditure would be on revenue account even though the advantage may endure for an indefinite future. That was the view expressed by in IRC vs. Carron Co. (1968) 45 Tax Cases 18 (HL) and was approved and applied by in (supra). ", "17. This test invariably lead to another inquiry. What is meant by enduring or advantage of permanent nature. The words \"permanent\" and \"enduring\" are not the words of art, but are only relative terms. They are not synonymous. What is the degree of durability of permanence always depends upon the facts of each case. Another test which has been applied while considering the nature of expenses is that if it is made for initiation of business or extension of business or substantial replacement of equipment. The outlay is deemed to be the capital. This is so because initial expenditure is incurred not for earning profit, but for setting it in motion. However, it is now well settled that no one test dealt with in various cases distinguishing between the capital and revenue expenditure is of permanent or conclusive nature or of universal application. ", "18. Here it will be appropriate to notice another decision of . . (1968) 69 ITR 692 (SC), the assessee was Indian subsidiary of , a Swiss company. The pharmaceutical section of in India was taken over by the assessee in 1948. Under an agreement, the undertook to deliver to the assessee all processes, formulae, scientific data, working rules and prescriptions pertaining to the manufacture or processing products discovered and developed in the 's laboratories and to forward to the assessee as far as possible all scientific and bibliographic information, pamphlets or drafts which might be useful to introduce the licensed preparation and to promote their sale in India, it granted to the assessee full and sole rights and licence under patent listed in the agreement to make use of the same and also a licence to use certain specified trade marks in the territory subject to any existing licence to third parties held at the date of the agreement or the may grant to third party thereafter. In consideration of that right to receive scientific and technical assistance, payments were to be made to the Repelling the 's contention that the contribution made to the was not entitled to deduction under s. 10(2)(xv) because expenses were capital in nature, the Court said : ", "\"The assessee did not under the agreement become entitled exclusively even for the period of the agreement, to the patents and trade marks of ; it had merely access to the technical knowledge and experience in the pharmaceutical field which commanded. The assessee was on that account mere licensee for a limited period of the technical knowledge of with the right to use the patents and trade marks of that company. The assessee acquired under the agreement merely the right to draw, for the purpose of carrying on its business as a manufacturer and dealer of pharmaceutical products, upon the technical knowledge of for a limited period; by making that technical knowledge available did not part with any asset of its business, nor did the assessee acquire any asset or advantage of an enduring nature for the benefit of its business.\" ", "19. . (supra) lump sum payment was made to a distributor chosen by the foreign collaborator as a condition of the agreement under which the assessee became entitled to the benefit of using trade marks and specialised process of the collaborator. The sought to disallow the said expenses treating it to be the capital in nature. The Court said applying tests that aim and object for incurring expenses is one of the guiding factors and as the expenses in the case was for the acquisition of the know-how as it was a condition on which the collaboration agreed to part with the technical knowledge to the assessee, it was treated to be the revenue expenditure on commercial principle. ", "20. (supra), the assessee-company was engaged in manufacture of antibiotics and pharmaceuticals. It was granted licence for manufacture of penicillin. Until 1963 it has already made substantial investment of over Rs. 66 lakhs for setting up plants, etc., for production of penicillin. Initially, the appellant was able to achieve only moderate yield. With a view to increasing the yield the appellant negotiated with , a reputed Japanese enterprise whereunder in consideration for once for all payment of 50,000 US $ it agreed to supply the assessee pilot plant, technical information, know-how and written description of 's process for fermentation of penicillin with a flow sheet of the process on pilot plant and to arrange for the training of appellant's representatives in various plants in Japan at assessee's expenditure and advise the assessee in large scale manufacture for a period of 2 years. The assessee was to get technical know-how confidentially and secretly and not to seek any patent for the processes. Assessee's claim for deduction of the sum paid to the Japanese company as revenue expenditure was disallowed by the holding that the expenses were capital in nature. For the purpose of setting up of new plant and new process and that the for complete replacement of the business inasmuch as the new process and new establishment of plant was to be put up in place of old process and old plant. also rejected the assessee's claim. Reversing the decision of , Hon'ble Supreme Court observed that there was no material before the to come to the finding that the appellant had obtained under the agreement a completely new plant with a completely new process and completely new technical know-how. The business of the appellant was to manufacture penicillin. Even after the agreement the product continued to be penicillin. There was no material before the that the area of improvisation was not part of the existing business. ", "21. There was no material to hold that it amounted to a new or fresh venture. What was stipulated was improvement of operation of existing business and its efficiency and profitability not removed from the area of day to day business of the appellants' established enterprise. The financial outlay under the agreement for the better conduct and improvement of the existing business and as revenue in nature and was allowable deduction in computing the business profit of the appellant. ", "22. In coming to this conclusion the also noticed the principles which should govern while deciding such issues by the s. ", "23. The most important aspects relevant for the present purpose which can be culled out from above discussion is that where expenses are incurred in areas which supplement the existing business and is not a fresh or new venture and agreement of acquiring technical know-how pertain to product already in the line of the established business which was intended to improve the operations of the existing business, its efficiency and profitability from the area of day to day business of the appellant's established enterprise's expenses be treated as revenue and not capital. On the other hand, if the technical know-how is acquired for the purpose of establishing altogether a new or fresh venture, launching of a new enterprise, the same expenditure may be treated as capital and not revenue. In such cases the test of enduring benefit might break. That to say the argument that knowledge having become once the part of knowledge bank of the acquirer, cannot be taken back in a sense and will always remain with the assessee and is enduring. But looking to the business realities, namely, the purpose of which knowledge has been enduring knowledge acquired becomes determining true character of the expenditure. ", "24. In view of the aforesaid, looking to the facts of the present case the mere fact that the knowledge to the Musashino, the process of manufacturing cyanuric chloride would become permanent part of the assessee's knowledge bank and will remain with the assessee even after expiry of the agreement and will not be determinative of the character of the expenditure. ", "25. The principal agreement with the was to last for 20 years commencing from 1st Jan., 1956. The supplementary agreements in furtherance of the principal agreement were co-terminus with the principal agreement. In fact, the agreement was terminated even before the expiry of the period of the agreement. Under the principal agreement (clause 14) the assessee was though free to purchase raw materials and intermediaries from any source, but the purchase of products manufactured by or from those who produce and manufacture raw material and intermediaries under the patent, there was a prohibition to purchase such raw material from any source manufacturing the intermediary products in violation of patent. From the agreement under which the assessee was licensed to manufacture in India cyanuric chloride as per the process developed by or , was the person authorised under respective patent orders to manufacture that product in India. It was also permissible for to sub-licence its associates in India for the manufacture of the said product in India. However, himself was not the proprietor of the patents, nor it could transfer proprietary rights in such patents to any of his associates in India. From this it is apparent that the period for which the agreement was to operate was barely 11 years which in fact lasted less than that. The assessee was purchasing raw materials, namely, cyanuric chloride from the market. However, the same was not being produced under a licence from . Once having licensed to manufacture cyanuric chloride which was through or process in India had decided to start manufacturing that product either by himself or through his associates, the assessee was under obligation to purchase that raw material required for its principal product - Tinopal from such manufacturer only under clause 14 of the principal agreement. It is in the light of these circumstances the case has to be examined. The question will be whether such knowledge was for establishing the business or for running the business. In the former it shall be capital, in the latter it is revenue. ", "26. From the statement of the case, we find that Tinopal was one of the products which was manufactured by the assessee under the provisions of the principal agreement. Cyanuric chloride was one of the raw materials used in the manufacture of Tinopal which was consumed in large quantities. The object of the assessee undertaking manufacture of cyanuric acid was stated to be manufacturing raw materials for the purpose of production of Tinopal. If, therefore, applying the test laid down in case (supra), which in our opinion does apply to the facts of the present case, the assessee's existing business was the business of manufacturing Tinopal, the product which the assessee intended to manufacture, namely, cyanuric chloride was one of the raw materials which until it started manufacturing was being purchased in large quantities from the market, the purpose of production of cyanuric chloride was found by the to be the manufacture of raw material or production of Tinopal, that is to say, the purpose was in the area of existing business of the assessee for carrying on the existing business with more profitability and was not for the purposes of entering into a new adventure for operating in a new area of business. If that be so, the expenses incurred for acquiring the technical know-how to manufacture raw material necessary for the principal product of the assessee to cut down the cost of producing raw materials from the market was the operational cost of the existing business incurred for the purpose of cutting down the day to day cost of the business and not for the purpose of installing a new business, the expenses had to be held to be revenue in nature and not capital though we observe that the was not correct in observing that there would be no useful knowledge left which would help the assessee in manufacturing cyanuric chloride after the agreement is concluded. As a result of operation of clause 22 which required the assessee to return all documents put at the assessee's disposal and relating to manufacturing of engineering plants, designs, etc., in respect of the patents and the assessee was refrained from using patents and trade marks which knowledge was acquired in respect of patents vesting in a third party. But, the knowledge bank of the assessee and production is already in process, according to that method, ordinarily it would not come to an end with the expiry of the agreement and would remain with the assessee. However, as we observe in the present case particularly, in the matter of acquisition of the technical know-how it is of great importance that for what purpose technical know-how was acquired. ", "27. In this connection concerning expenses incurred for acquiring the right to acquire raw material for the purpose of running business the matter was examined by their Lordships of in (supra); by way of illustration it is said : ", "\"Take a case where acquisition of raw material is regulated by quota system and in order to obtain more raw material the assessee purchases the quota right of another. Now, it is obvious that by purchase of such quota right, the assessee would be able to acquire more raw material and that would increase the profitability of his profit making apparatus, but the amount paid for purchase of such quota right would indubitably be revenue expenditure, since it is incurred for acquiring raw material and is part of the operating cost.\" ", "The principle fully applies to the facts found by the in the present case, according to which the assessee had entered into an agreement on 14th July, 1965 for manufacturing raw material for the purpose of production of Tinopal. ", "28. Even applying the test of \"acquisition of assets\" it can be said that under the agreement the assessee did not acquire the capital asset itself, namely, the technical know-how as a proprietor thereof. What it acquired under the agreement on 14th July, 1965 was only the right to use technical knowledge available with or . It had right only to use that knowledge for the purpose of manufacturing cyanuric chloride within India. Therefore, what the assessee has acquired was not the capital asset, but only the access to the knowledge to the method. The finding that said two companies had developed process of manufacturing cyanuric chloride does not mean that these were only two methods known for manufacturing cyanuric chloride and the assessee could not at all have been able to commence production, but for acquisition of technical know-how from the said two concerns. Therefore, mere right of use of the technical knowledge of others has to be distinguished from the acquisition of right as proprietor to the knowledge in the sense that no one else could use that knowledge except with the permission or at the wish of the owner. A patent holder is the proprietor or the owner of the knowledge so long as that right remains with the proprietor and his permission is required by the users thereof, when such owner permits to use that knowledge under that name with condition of confidentiality/secrecy, what is transferred is not the capital asset, but only the right to use. So far as knowledge of such process is concerned that always remains with the acquirer and can never be recalled back. But it cannot be said that by such acquisition of knowledge the assessee has acquired any capital asset. So far as question as to whether it amounts to acquisition of advantage/benefit of enduring nature is concerned as we have already discussed, it depends upon the object with which such advantage or benefit has been acquired. If the advantage or benefit had been acquired to facilitate running of the existing business, it should be treated as the expenditure on revenue account. If the advantage or benefit acquired for establishing a fresh venture it may be treated as part of expenditure on capital account. As in the present case the finding of the reveals that the advantage was acquired for the purpose of manufacturing raw material for production of Tinopal which was the existing business of the assessee, we have no hesitation in coming to conclusion that the expenditure incurred was rightfully held to be on revenue account. ", "29. Accordingly we answer the question referred to us in affirmative in all the four cases in favour of the assessee and against the . There shall be no order as to costs."], "relevant_candidates": ["0000594383", "0000888361", "0000923991", "0001671648", "0001805387", "0001990557"]} {"id": "0001114923", "text": ["JUDGMENT Dixit, ", "1. This is a reference under Section 66 (1) of the Indian Income-tax Act , 1922, at the instance of the assessee, Bhopal. The question, which has referred to us for decision, is : ", "\" Whether on the facts and in the circumstances of the case, the disallowance of the claims in the sum of Rs. 75,000 and Rs. 1,75,000 for earned leave wages and retrenchment compensation respectively by the is justified in law ? \" ", "2. The material facts are that the assessee is a private limited company engaged in the business of manufacture of textiles at Bhopal. It was incorporated in January 1956. In the assessment year 1957-58 on which the accounting period ended on 28-2-1957, the assessee claimed that in the computation of its profits and gains for the accounting period it was entitled to a deduction of Rs. 75,000 being the amount set apart as a reserve fund in its balance-sheet as on 28th February 1957 for the payments it may have to make to its workers in the next year on account of holiday wages under Section 79 of the Factories Act, 1948. Similarly, it claimed a deduction of Rs. 1,75,000 on account of the compensation it may be required to pay under Section 25F of the Industrial Disputes Act, 1947, to those of its workmen who may he retrenched in the following year. ", "The Income-tax Officer rejected the claim of the assessee on account Of both the deductions taking the view that the assessee's liability for holiday-wages under the Factories Act , 1948, and for payment of retrenchment compen. sation under the Industrial Disputes Act , 1947, was only a contingent liability and not an actual liability in praesenti and, therefore, the amounts of Rs. 75,000 and Rs. 1,75,000 which the assessee set apart for meeting these contingent liabilities could not be regarded as \" expenditure deductible for income-tax purposes \"; and that the \"expenditure deductible for income-tax purposes\" was one for meeting a liability actually existing at the time, but (he setting aside of an amount which would become expenditure on the happening of an event was not such a one. This decision of the Income-tax Officer was upheld in appeal by the Appellate Assistant Commissioner, as well as in second appeal by the . ", "3. In our opinion, the was right in upholding the decision of the taxing authorities in disallowing the deduction claimed by the assessee. The assessee obviously made the claim under Clause (xv) of Section 10 (2) of the Indian Income-tax Act , 1922. But it is now well settled that under this clause a deduction is not permissible for a contingent liability. They reason is that this clause allows deduction only in respect of \"expenditure\" and a contingent liability is not \"expenditure\" and, therefore, cannot be the subject of deduction even under the mercantile system of accounting; under the mercantile system a debit can bs equated with actual expenditure provided a liability has been incurred (see (1959) 37 ITR 66 : (AIR 1959 SC 1049) and , (1957) 32 ITR 138 (Mad), In the case of , 1959-37 ITR 66: (AIR 1959 SC 1049) (supra), , after explaining the meaning of the word \" expenditure\" as that which is paid out or away and is something which is gone irretrievably, has held that expenditure, which is deductible for income-tax purposes, is one which is towards a liability actually arising at the time, but that the putting aside of money which may become expenditure on the happening of an event is not \" expenditure \". ", "It has further been held in that case that the income-tax law makes a distinction between an actual liability in praesenti and a liability de futuro which for the time being is only contingent; and that the former is deductible but not the latter. The distinction between a legal liability which is deductible and a liability which is future or contingent and for which no deduction can be made has been pointed out also in (1959) 37 ITR 1 : (AIR 1959 SC 1165). In that case, has quoted with approval the statement contained in paragraph 230, at page 203, of Simon's \" Income-tax \" which is as follows : ", "\" In computing the profits of a trade it is the normal accountancy practice to allow as an expense any sum in respect of liabilities which have accrued over the accounting period, and to make a deduction of such sums from the profits. Following the decision in v. (1948) 30 Tax Cas 496 however, it appears that the nature of liabilities which may be deducted on business and accountancy principles does not accord with the nature of liabilities deductible for income-tax purposes. For income-tax purposes it was held that a distinction must be drawn between an actual, i.e., legal, liability, which is deductible, and a liability which is future or contingent and for which no deduction can be made.\" ", "The above passage makes it very clear that if an assessee out of prudence sets aside a part of the profits in one year to meet a contingency then he cannot claim any deduction on account of the money so set apart for the simple reason that the sum set apart does not amount to \" expenditure \". ", "4. Now, it is clear from an examination of Section 79 of the Factories Act, 1948, that the liability of the assessee for holiday-wages under that provision is a contingent liability. Under Section 79 , every worker who has worked for a period of 240 days or more in a factory during a calendar year is allowed during the subsequent calendar year leave with wages for a number of days calculated at the rate specified in Sub-section (1) thereof. If a worker fails to avail himself of the whole of the holidays allowed to him during any period of twelve months, the leave not taken by him is added to the leave to be allowed to him in the succeeding calendar year subject, however, to the limit that the total number of days of leave that can be carried forward to a succeeding year does not exceed thirty in the case of an adult or forty in the case of a child. A worker is paid for the leave period to which be may be entitled only if (i) he takes the leave, or (ii) if he is discharged, or (iii) if being refused leave he quits his employment before the holidays are allowed to him. ", "Now, it is clear that it is impossible for an employer to know in advance in any one year as to how many of his employees will go on leave next year and at what rate wages would have to be paid to them for the period of leave. The question of payment of wages for leave to a worker would arise only if the worker goes on leave, or if he is discharged, or on being refused leave he quits his employment. Till these circumstances arise, the liability that rests on the employer to pay to a worker wages in accordance with Section 79 for leave period remains a contingent liability which the employer may or may not be called upon to discharge. That being so, any sum set apart by an employer in any year for meeting the contingency of some of his workers going on leave the next year cannot be regarded as a permissible expenditure under Section 10 (2) (xv) of the Indian Income-tax Act , 1922. ", "5. The view that the liability of the assessee under Section 79 of the Factories Act, 1948, is a contingent liability is fully supported by the decision of in (1955) 2 Cal 13. In that case also, the assessee, which was a company, asked for a deduction of Rs. 6,800 which it had debited to its expenses account; the assessee claimed that this amount was allowable to it because it had incurred a liability for a corresponding amount to the employees on account of holiday-wages which would have to be paid to them sometime in the following year in accordance with Section 49B of the Factories Act, 1934. agreed with the Tribunal that the assessee was not entitled to the deduction claimed both for the reason that no expenditure had been actually incurred and also for the reason that the amount could not be claimed even as an account representing a certain liability. After examining the provisions of Section 49-B of the Factories Act, 1934, the learned Chief Justice of said : ", "\" It should be clear from what I have stated above that such statutory liability for holiday wages as the Factories Act creates is only a contingent liability which may or may not have to be discharged and, secondly the measure of that liability can never be known in advance. It cannot be so known, because it cannot be known in advance how many employees will avail themselves or how many holidays and when and, necessarily, at what rate, holdiay wages would be payable. In these circumstances it is perfectly clear that not only is the amount claimed not allowable as an item of expenditure, because in fact, no expenditure had been incurred and not a pice had gone out of the funds of the company, but also that the amount does not even represent a certain liability which will have to be discharged in any event. It may be that although a particular amount is not actually expended during the currency of a particular accounting year, the assessee will still be entitled to a deduction if a certain liability for its payment has arisen so that it may be said that the expenditure is as good as made. The amount claimed in the present case is certainly not even of that character and, as I have already pointed out, it is not an amount which was actually spent.\" ", "Thus it was held by that the liability under Section 49-B of the Factories Act, 1934, to pay holiday-wages depended on the arising of the circumstances specified therein, and since they might or might not arise, the liability was only a contingent and uncertain liability which might or might not have to be discharged. As there is no material difference between Section 49-B of the Factories Act, 1934 and Section 79 of the Factories Act, 1948, the decision of must be taken as supporting the view that the liability of an employer under Section 79 of the Factories Act, 1948, to pay to his workers holiday-wages is a contingent liability. ", "6. The deduction of Rs. 1,75,000 claimed by the assessee on account of \"retrechment compensation\" is not different in character. It is also a deduction for a contingent liability. The assessee's liability to pay retrenchment compensation to a worker who has been retrenched rests on Section 25F of the Industrial Disputes Act, 1947. That section provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched until he has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid, in lieu of such notice wages for the period of the notice, and further until the workman has been paid at the time of retrenchment, compensation equivalent to fifteen days' average pay for every completed year of service or any part thereof in excess of six months. Section 25F thus laid down the conditions precedent for the retrenchment of workmen, and if these conditions are not complied with, then the retrenchment becomes illegal and improper. ", "But Section 25F does not cast on the employer a statutory obligation to retrench a particular number of employees in any particular year. It is for the employer to decide whether at any given moment because of business exigencies or vicissitudes of business it is necessary to retrench any of the workmen employed in the industry. It is plainly impossible for an employer to say in advance the number of employees he will be required to retrench at a subsequent point of lime having regard to the state of business then existing. Much less is it possible for him to evaluate his liability for payment of retrenchment compensation in the event of his being required to retrench some workmen. When, therefore, in any year of account the assessee claims a deduction of a sum which he may be required to pay as retrenchment compensation the next year or sometime later, then the deduction that is claimed is not on account of a liability in praesenti but on account of a liability which may arise in future on the happening of a particular contingency. As pointed out earlier, such a deduction is clearly not permissible under Section 10 (2) (xv) of the Indian Income-tax Act , 1922. ", "7. , learned counsel for the assessee, relied on a decision of in v. , 1957 AC 334: (1957) 32 ITR 737, to support his contention that the possibility of retrenchment being effected in any running business was something which was usual and ordinarily incidental to the carrying on the business, that it was not a remote possibility; and that, therefore, if under Section 25F of the Industrial Disputes Act, 1947, a particular compensation on a particular basis had to be paid to the retrenched staff, then a provision made for payment of the anticipated retrenchment compensation would only amount to making a provision for meeting a liability in praesenti and not a contingent liability. In our opinion, the decision in the case of 1957 AC 334: (1957) 32 ILR 737 (supra) is not in point here. In that case, there was a statutory obligation on an English Company operating in Peru to pay compensation on the termination of services of its employees depending on the length of service subject, however, to certain contingencies where the employee would forfeit the benefits. ", "The company claimed to deduct an estimated liability for this retirement compensation based on a proportion of the period of service of the employees at the end of the period of account though the employees had not retired and were in service. It was contended by the that no deduction could be made there since there was no liability till the employees retired and that the whole of the compensation was deductible in the year of payment. held that the company was eft-titled to charge each year in respect of its prospective lump-sum liabilities provided such deduction could be fairly estimated or otherwise satisfactorily assessed. The deduction claimed by the assessee was, however, disallowed on the ground that in calculating the amount which it claimed to deduct in each year the assessee had ignored the factor of discount and the estimation made by it was not reasonable. ", "The decision in the case of , 1957 AC 334 : 1957-32 ITR 737, (supra) is distinguishable by the fact that here the assessee is not under any definite obligation in any relevant year to pay to its employees any retrenchment compensation; the liability to pay retrenchment compensation depends on the existence and fulfilment of certain conditions, and that makes the assessee's prospective liability, contingent until the services of any employees arc terminated by way of retrenchment. The principle laid down by in the case of , 1957 AC 334 : 1957-32 ITR 737 (supra) is, therefore, not applicable to the present case. The decision that is relevant here, and which fully supports the view we have taken, is the decision of in , 1964-51 ITR 240 (Mad). In that case, it has been ruled that the liability of an employer assessee in respect of retrenchment compensation under Section 25F of the Industrial Disputes Act, 1947, is not a liability in praesenti but is only a contingent liability which cannot be taken into account as an accrued liability, even though the assessee has been maintaining his account books on the mercantile system. ", "8. For the foregoing reasons, our answer to the question referred to us for decision is in the affirmative. The assessee shall pay costs of this reference. Counsel's fee is fixed at Rs. 200."], "relevant_candidates": ["0000159485", "0000263647", "0000661111", "0000791231", "0001315236"]} {"id": "0001118045", "text": ["JUDGMENT , C.J. ", "1. I have bad the advantage of perusing the judgment prepared by my learned brother and I am in entire agreement with his reasoning and conclusion. If I add a few words it is because the question raised in the case is not covered by decided authority. ", "2. and were undivided brothers. died on 17-8-1943 leaving behind him his widow . She sold a house which was a part of the joint family property to the first appellant in this second appeal. In the ordinary course would have become entitled to the entire joint family property on the death of his brother . But the appellant relied on the right conferred on a widow by Section 3(2) of the Hindu Women's Rights to Property Act , 1937 (hereinafter referred to as the Act). To meet this claim based on that Act, the plea was raised on behalf of the contesting respondent that at the time of the death of her husband was leading an unchaste life and lived in adultery with a person at Kumbakonam. This fact has been found by both the Courts below and the claim of the appellant based on the Act negatived on the ground that by reason of her un-chastity the widow was disqualified from acquiring any interest under the Act. The contention on behalf of the appellant before us was that Section 3 (2) of the Act conferred upon the widow an unrestricted and unqualified right to take the property of the husband in the same interest as the husband himself had and her unchastity would not disqualify her from acquiring that interest, 'The material provisions of the Act run as follows : ", "\"2. Notwithstanding any rale of Hindu law or custom to the contrary, the provisions to Section 3 shall apply where a Hindu dies intestate. ", " Section 3 . (1) When a Hindu governed by the Dayabhag School of Hindu law dies intestate leaving any property, and when a Hindu governed by any other school of Hindu law or by customary law dies intestate leaving separate property, his widow, or if there is more than one widow all his widows together, shall, subject to the provisions of Sub-section (3), be entitled in respect of property in respect of which he dies intestate to the same share as a son; ", "(2) Where a Hindu governed by any school of Hindu law other than the Dayabhag school or by customary law dies having at the time of his death an interest in a Hindu joint family property, his widow shall, subject to the provisions of Sub-section (3) have in the property the same interest as he himself had.\" ", "3. The appellant's contention is based upon the language of Section 2 which declares that the provisions of Section 3 shall apply notwithstanding any rule of Hindu law to the contrary and on the fact that no disqualification is expressly mentioned in Section 3 . The learned Editor of the 10th Edition of Mayne on Hindu Law and Usage expressed the following opinion at page 722 : ", "\" As the Act confers upon the widow a right of succession notwithstanding any rule of Hindu law, in unchaste widow will not be disqualified from inheritance. Similarly the rights of succession of the widowed daughter-in-law will not be subject to the condition of chastity even in the Dayabhaga school. For the same reason the widow will be entitled to succeed, notwithstanding any ground of disqualification under Hindu law in either School.\" The learned editor of the subsequent edition has added the remark : \"It may be stated that this is perhaps an unintended result\". ", "The question is whether we are compelled to form the same opinion having regard to well established principles of construction of statutes. ", "4. The dominant purpose in construing a statute is to ascertain the intention of the . No doubt, the meaning of a statute is primarily to be sought in the terms as enacted, but the terms must be construed with due regard to the subject matter and object of the statute. The intention of the must be first sought in the statute itself, then in other legislation and contemporaneous circumstances and finally by ascertaining what was the law before the Act, what was the mischief or defect for which the common law did not provide, what remedy the have provided to cure the defect and tile true reason of the remedy. When the enactment is in the nature of an amending provision, that is to say, a provision which amends the general law on the subject in any particular it should not be interpreted so as to alter completely the character of the principal law, unless clear language is found indicating such intention. Statutes which introduce new principles into any branch of the law should be expressed in clear unambiguous terms (, vol. 81, pp. 477, 491, 493 and 504). There is always a presumption that the \" does not intend to make any substantial alteration in the law beyond what it expressly declares, either in express terms or by clear implication, or in other words, beyond the immediate scope and object of the statute.\" (Maxwell on Interpretation of Statutes, Edn. 9, p. 85). ", "\"Statutes regulating heirship or descent, or giving force to wills and to the devises contained in wills should be read as not intended to affect paramount questions of public policy or depart from well settled principles of jurisprudence.\" ", " v. , 48 Bom. 569 at p. 575. ", "\"The words of the statute are to be construed so as to ascertain the mind of the from the natural and grammatical meaning of the words which it has used, and in so construing them the existing state of the law, the mischiefs to be remedied, and the defects to be amended, may legitimately be looked at together with the general scheme of the Act.\" ", "(In re,Viscountess 's claim, 1922-2 A. 0. 839 at p. 365). ", "\". . . . general words are to be construed so as to pursue the intent of the makers of statutes and so as to import all these implied exceptions which arise from a close consideration of the mischiefs sought to be remedied and of the state of the law at the moment when the statute was passed\" ", "(1922) 2 A. C. 339 at p. 869. ", "5. The Act with which we are concerned is described as \"an Act to amend the Hindu law governing Hindu women's rights to property.\" The object is stated in the preamble thus: ", "\"Whereas it is expedient to amend the Hindu law to give better rights to women in respect of property.\" ", "The Hindu law as it stood before the passing of the Act gave certain rights to women in respect of property. The object of the Act was to give \"better rights\" to them. Inter alia under the law as it stood before the Act, a Hindu widow who was not unchaste was entitled to inherit to the separate property of her husband when he died intestate and leaving no son (or son's son or son's son's son), if there was a son she was entitled to claim maintenance against the son and if the property was joint family property against the coparceners of her husband, provided she was not unchaste. Unchastity was a disqualification which prevented her from claiming rights to which she was otherwise entitled under the law. If the object of the Act was to remove the disqualification on the ground of unchastity, then, in my opinion the appropriate language would have been different, vide, for instance, the Hindu Inheritance (Removal of Disabilities) Act XII [l2] of 1928, which is described as an Act to amend the Hindu law relating to exclusion from inheritance of certain classes of heirs and to remove certain doubts. An Act designed to remove the bar of unchastity cannot be properly called an Act to confer a right. If the contention of the appellant is to be accepted the object of the Act would be among other things, to confer rights on unchaste women. ", "6. There is another aspect of the matter which, in my opinion, throws considerable light on the scope of the Act. If the object of this enactment was inter alia to abrogate the rule of Hindu law as regards unchastity and to remove the disability from inheritance on that ground, then, it is impossible to comprehend why the should have removed that bar only in the cases provided for by the Act and not in cases where a Hindu dies intestate and sonless. There can be no imaginable reason why an unchaste widow shall be disqualified from inheriting to her husband's property when he did not leave a son behind but should be permitted to take an interest in her husband's property along with a son. It appears to me to be clear that this Act has not expressly or by implication removed the disqualification on the ground of unchastity which is based on ethical foundations and the sentiment of the people. It was argued for the appellant that Section 3 did not make any exception or impose any restriction on the right conferred on the widow. The answer to this contention is that if by any rule of law in force at the time of the enactment, there is a disqualification or disability from acquiring any right, unless such disqualification or disability is expressly or by necessary intendment removed by the Act, the provisions of the Act must be read subject to such general rules of law. To give an instance, there is a rule of Hindu law which is also a rule of general public policy that a murderer is disqualified from inheriting to the estate of the murdered man. Can it be successfully contended that a wife who has murdered her husband would be entitled to the rights conferred on her by S 3 of the Act ? The learned advocate for the appellant was not prepared to go this length and I believe, rightly. An interesting case which illustrates this principle is Queen v. , (1872) 7 Q B. 361. 32 and 33 Vict. ch. 55 enacted (s. 9) that in the Municipal Corporation Acts, words importing the masculine gender shall include females for all purposes connected with the right to vote at the election of Councillors, auditors and assessors. Nevertheless, it was held that a married woman was not entitled to vote because of the disability by reason of the status of coverture. It was contended that the statute did not contain any exception in regard to married women and, therefore, even married women were entitled to vote. The provisions of the Married Women's Property Act were also relied upon, but the contention was overruled. observed : ", "\"The 32 and 33 Vict. Ch. 55 .... enacted that where-ever men were entitled to vote, women, being in the same situation, should thereafter be entitled; but this only referred to women possessed of the necessary qualification in respect of property and the payment of rates, and I cannot believe that it was intended to alter the status of married women. It seems quite clear that this statute had not married women in its contemplation.\" ", " said that the Act only removed the disqualification by reason of sex and left untouched the disqualification by reason of status. The other learned Judge , disposed of the contention based on the Married Women's Property Act thus: ", "\"The Married Women's Property Act was intended to protect married women in the enjoyment of the rights of property and was not intended to extend in any way to the political rights of the women, and we must not by a side mind give an extension to its effect which we can clearly see was not intended.\" ", "This is what we would be doing if we imported into the Hindu Women's Eights to Property Act a provision removing the disqualification on the ground of unchastity. In my opinion, if the intended to confer rights on even widows who were otherwise disqualified under the general rule of Hindu law, then it would have given expression to that intention. If I could borrow the language of in the Viscountess 's case, 1922-2 A. C. 839, I would say that it would require a convincing demonstration to satisfy me that the intended to effect a change so momentous and far- reaching by so furtive a process. ", "7. Much reliance was placed on Section 2 which declares that the provisions of Section 3 shall apply notwithstanding any rule of Hindu law or custom to the contrary. It is important to note that the language is not \"Notwithstanding any rule of Hindu law or custom\" but \"Notwithstanding any rule of Hindu law or custom to the contrary.\" If there is any rule of Hindu law or custom which is contrary to the provisions of Section 3 , then it is such a rule that is abrogated and not every rule of Hindu law which is not directly contradicted by the provisions of Section 8 . As pointed out by , it is the general rule of Hindu law that a son excludes the widow in respect of separate property and the surviving coparceners exclude the widow in respect of joint family property that are contrary to the provisions of Section 3 ; and Section 2 declares that notwithstanding these rules of Hindu law, the provisions of Section 3 shall apply. ", "8. I have, therefore, come to the conclusion that we are not obliged to hold that the effect of the enactment is to bring about something not intended by the , as the learned Editor of Edn. 11 of Mayne's Hindu Law opined. On the finding of fact that was unchaste at the time of her husband's death, she was disqualified from acquiring any interest under the Hindu Women's Eights to Property Act . The second appeal fails and is dismissed with costs. ", "9. The point for determination is whether a Hindu married woman living in adultery at the time of her husband's death is disqualified by reason of her unchastity from succeeding to his interest in joint family property under Section 8 , Hindu Women's Eights to Property Act (XVIII of 1937) hereinafter referred to as \"the Act.\" The problem presented by this case is one of a type which occasionally confronts of applying an enactment to circumstances not within the contemplation of the Legislature. The learned Editors of Edns. 10 and 11 of Mayne's Hindu Law, have expressed the opinion based on the language of Section 2 of the Act, that a widow is not disqualified by reason of her unchastity from succeeding to her husband's estate under Section 3 of the Act, and this opinion has been accepted as correct by a learned Judge of in . (1941) Bom. 438. I am unable to agree with this interpretation of the Act. ", "10. In construing the Act, it must be remembered that it is not an enactment codifying the Hindu Law of Inheritance or even the topic of Hindu women's right to succession to property. The legislature is piecemeal and deals only with particular cases where, under the pre-existing law, a Hindu widow was excluded from succession to her husband's self scquired or separate property or interest in joint family property. The draftsman of the Act has assumed a knowledge of the existing state of Hindu law on the part of those who have to interpret it. The hardships which the Act was intended to remedy and the extent of legislative interference considered to be necessary for that purpose must be borne in mind in construing the enactment. ", "11. I might indicate at the outset what I consider to be the proper mode of approach to the construction of the Act. The might well be presumed to have left the previous law unaltered except to the extent to which a departure therefrom has been specifically enacted. . (1938) Bom. 502 P. C., observed, \"A statute is prima facie to be considered as changing the law to no greater extent than its words or necessary intendment require.\" In Maxwell on Interpretation of Statutes, 9th Edn. ", "at pages 85 and 86 the rule of construction applicable to cases like the present is thus stated: ", "\"It is in the last degree improbable that the would overthrow fundamental principles, infringe rights or depart from the general system of law, without expressing its intention with irresistible clearness and to give any such effect to general words, simply because they have a meaning that would lead thereto when used in either their widest, their usual, or their natural sense, would be to give them a meaning other than that which was really intended ...... In construing the words of the Act of Parliament we are justified in assuming that the did not intend to go against the ordinary rules of law unless the language they have used obliges the to come to the conclusion they did so intend.\" ", "It has been observed by and this Court that though the Act conferred new rights of succession upon widows yet, in view of its far-reaching consequences on other branches of the Hindu law, the Act should be so construed, as to make no further inroad into the Hindu law than is warranted by its plain terms. In all other respects the might be presumed to have left the Hindu law unaffected. , 1945-1-M. L. J. 108 at p. 116, , 1950-l-M. L. J. 399, , 1949-2 M. L. J. 536 and Seethamma v. , 1950-2-M. L. J. 21. This is also the view of the learned Editors of Mayae's Hindu Law, 10th and 11th Edns. as regards the scope and effect of the Act. ", "12. It is a well settled rule of Hindu law--a rule that is in conformity with popular sentiment--that unchastity disqualifies a widow from succession to her husband's estate. The textual authorities on this point will be found assembled in the judgment in v. , 13 Beng. L. B. 1. The text requires that the widow must be chaste not only when the inheritance of her deceased husband opens but also thereafter. A text attributed to says: ", "\"The wife alone, being sonless and keeping the bed of her lord unsullied and leading a life of religious observance, may take his entire estate.\" ", " also declares: ", "\"Let the sonless widow, preserving unsullied the bed of her lord and bidding with her venerable protector, enjoy with moderation the (husband's) property until her death.\" ", "Other texts state that as \"half the body\" of her deceased husband the widow takes his property in default of male issue. The above texts show that not only that the sonless widow's right in her husband's property is a mere right of enjoyment but that the exercise of that right is dependent on her chastity. The use of the present participle form implies that chastity is imposed as a permanent condition of the widow's enjoyment of her husband's estate and that a violation of that condition would involve a forfeiture of the right. But European writers like and English Judges who had to administer the Hindu law, in their concern for ensuring certainty of titles to property and their leanings against a divestiture of estates once vested, declared the law to be that a sonless widow who was chaste at the time of her husband's death inherited his estate and that a widow who had once inherited the estate of her husband was not liable to forfeit it by reason of her subsequent unchastity. The law was thus settled by in , 5 Cal. 776 P. C. and this has been the accepted rule of Hindu law ever since. Unchastity disentitles a Hindu widow to maintenance. Maintenanee being a recurring right her continued chastity is a condition of her right to receive maintenance and she would forfeit her right by reason of her unchastity even though maintenance has been decreed to her by a Court. v. Mt. Anandi, 57 ALL. 672 P. c., , 19 Mad. 6 and , 17 Mad. 392. If there has been a lapse from chastity the widow would be entitled only if she reforms her ways, and even then only to a starving maintenance, v. , 39 Mad. 658. The widows of coparceners in a joint Hindu family are in fact and in law members of the family with rights in or over the family property by way of maintenance. v. , 1 Mad. 69 at p. 81; . (1937) l Cal. 653 (P. c.) and v. Commissioner of Income-tax, 66 Mad. 1 at pp. 4, 5. The requirement of chastity as a condition of their maintenance from the family property is therefore intelligible. ", "13. The Act was doubtless intended to \"give better rights to women in respect of property\" as stated in the preamble. But in what cases and to what extent ? The rights of a Hindu widow in relation to the property or interest of her husband, as they stood before the Act, and as they now stand, have to be considered. A Hindu widow Succeeded to the self-acquired property of her husband or the property held by him as the last surviving coparcener or as the holder of a share on partition if he happened to die without leaving sons (including in that term grandsons and great grandsons) The sonless widow was disqualified from inheriting her husband's separate or self acquired property if she was unchaste or living in adultery at the time the inheritance opened. The Act did not touch this class of cases and did not abrogate the rule of Hindu law as to disqualification of a widow arising out of her unchastity in such eases. If in the oases abovementioned the husband had left sons (in the comprehensive sense) the widow would before the Act have been excluded by the sons from inheriting her husband's estate and would only be entitled to maintenance for her life out of that estate. If her husband had died as a member of a joint Hindu family owning property, his interest in the family property ceased on his death. The widow would but for the Act, be excluded from succession to the undivided interest of her husband which passed by survivorship to the remaining coparceners. She would have had a right, however, to be maintained from the joint family property in the hands of the surviving coparceners, who might be her son or her husband's uncles, brothers, nephews or other agnatie relations. With reference to these two classes of cases above specified, Section 3 of the Act conferred new rights of succession on widows in supersession of the above mentioned rules of Hindu law. The rule that a widow succeeded only on failure of male issue was abrogated and she was given the same share as a son in her husband's separate or self acquired property. Where the husband died a member of an undivided Hindu family, his undivided interest in the family property passed to his widow even if he left male issues. The rule of survivorship was to this extent abrogated. The interest taken by a widow in her husband's estate by virtue of Section 3 of the Act was the same as the interest which she took in her husband's separate or self-acquired property in the absence of male issue, that is to say a Hindu widow's estate with all the incidents attached by law to that estate. The liability to forfeiture on remarriage would attach to that estate from its commencement and continue throughout the Widow's life. The condition of chastity however attaches to the estate only at its commencement. Though the Act conferred new rights of succession on Hindu widows in the two classes of cases referred to above, it did not purport to abrogate the pre-existing rule of Hindu law excluding an unchaste widow from succession to the property of her husband. It would be a queer state of law that a sonless widow has to be chaste in order to inherit her husband's separate or self acquired property but a widow need not be chaste if she happens to have sons or other coparceners of her husband in competition with whom she claims to take her husbands estate. This, however, would be the result of the argument of the appellant as regards the construction of Sections 2 and 3 of the Act. ", "14. The Act does not provide for the devolution of her interest after the widow's death in cases where she is given a right of inheritance by the Act. This is left to be determined by the general law. The right of maintenance possessed by a widow now enlarged by the Act into a right of succession, is not abrogated by the Act, but having regard to the principle of Hindu law that maintenance is awarded to a widow because of her exclusion from inheritance and a share on partition, it is to be inferred that the right of maintenance would not be available to the widow in such cases. I refer to these matters to show that the Act is not exhaustive oc self-contained, and must be fitted into the context of the existing Hindu law except to the extent forbidden by its plain terms. The Hindu law as to the grounds of axclusion from inheritance has been considerably modified by Hindu Inheritance (Removal of Disabilities) Act , 1928. But even after this Act congential idiocy or lunacy is a ground of exclusion from inheritance. Unchastity is a ground of exclusion of Hindu widows from inheritance to their husband's estate has not been removed by that Act which removed many other grounds of disqualification imposed by Hindu law. Is it to be said that the disqualification from inheritance based on congenital idiocy or lunacy, which has not been removed by the Act of 1928, has now been removed by the Act not under consideration, not directly but inferentially? This is, however, what the appellant's argument amounts to. A murderer is disqualified from succeeding to the estate of the person murdered on grounds of public policy. v. , 48 Bom. 569 at p. 576 (P. C.). Is it to be said that this disqualification attaches only to a sonless widow who murders her husband and claims to succeed to his separate or self-acquired property, and not to a widow who claims her husband's estate in competition with her sons or other coparceners of her husband? The Caste Disabilities Removal Act (XXI of 1850) set aside the provisions of Hindu law which penalised renunciation of religion or exclusion from caste. But it wag held that the Act did not get rid of any conditions or restrictions to which the converts were originally subject under the Hindu law , 19 Cal. 289 (F. B.) and , 44 Mad. 891. For instance, this enactment would not remove the disqualification based on the widow's unchastity imposed by the Hindu law though it removed the disqualification arising from apostacy. , 5 Cal. 776 (P. C.) and v. , , 32 Cal. 871 at pp. 873 4. That the did not take the view that adulterous conduct or unchastity in a married woman was a minor or negligible misdemeanour not affecting her rights to property ia clear from Section 2 , Hindu Married Women's Rights to Separate Residence and Maintenance Act 1946 which disentitles an unchaste wife to maintenance. I find it difficult to hold that the Act now in question has expressly or by necessary intendment done away with the personal disqualification like unchastity imposed by Hindu law on widows claiming to succeed to the estate of their deceased husband. ", "15. Reliance has been placed by the learned counsel on the language of Section 2 of the Act which runs thus: ", "\"Notwithstanding any rule of Hindu law or custom to the contrary, the provisions of Section 3 shall apply when a Hindu dies intestate.\" ", "It is said that the disqualification of a Hindu widow to inherit her husband's estate arising from her unchastity is a rule of Hind law which stands abrogated as a result of Section 2 . I cannot agree. The \"rule of Hindu law to the contrary,\" ", "referred to in Section 2 is the rule of Hindu law excluding a widow from succession to her husband's estate if he had left a son, grandson or great grandson, or if he had died as a member of a joint Hindu family leaving his coparceners. It is this rule of Hindu law that was superseded by Section 3 of the Act. To this extent, but no further, Section 3 is contrary to and therefore, supersedes the rule of Hindu law. The significance of the words \"to the contrary\" following the words \"Notwithstanding any rule of Hindu law\" in Section 2 is that it is only such rules of Hindu law as are contrary to the provisions of Section 3 of the Act that stand abrogated. The disqualification of a Hindu widow from succession to her husband's estate based on her unchastity was not even touched upon by the Act, and there is nothing in 8. 3 prescribing a rule contrary to the well established rule of Hindu Law that the chastity of a widow is a condition precedent to her inheriting her husband's estate. ", "16. The object of the Act according to the preamble, was to give ' better rights to women\" and not to confer rights on unchaste women. The object has been amply achieved by Section 3 which gives Hindu widows rights of succession to their husband's estate in supersession of the rules of Hindu law which in the circumstances specified in the section gave them a mere maintenance out of that estate. The family a pivotal institution extolled by depended for its unsullied cohesiveness and continuity, upon the sanctity of marital relationship with its attendant obligation of chastity I consider it improbable that the would have overthrown the well-established and fundamental principle of Hindu law founded in the deep rooted sentiments of the people that chastity is a condition precedent to a widow's right to inherit her husband's estate, without expressing its intention with irresistible clearness I also venture to think that it could not have been the intention of the Act to give a charter of unchastity to married women or to abrogate the inhibitions of a law designed to preserve the purity and sanctity of family life. Unless there is no reasonable way of escape I must decline to attribute to the legislature so wayward an intention. ", "17. For these reasons the second appeal fails and is dismissed with costs. ", "18. have had the advantage of going through the judgments of my brother and my Lord the Chief Justice. I unhesitatingly agree with their conclusions that the Hindu Women's Eights to Property Act (Act XVIII of 1937) has not abrogated either expressly or impliedly the Hindu law rule that a wife who is unchaste cannot succeed to her husband's property, whether joint family property or self-acquired property and that the opinion to the contrary expressed by the learned authors of Mayne's Hindu Law (Edns. 10 and 11) and by a single Judge of in . (1941) Bom. 488 is wrong and unwarranted. ", "19. Chastity is considered by all schools of Hindu law, and by all Hindus as Truth in Action, and this is a land where it is proclaimed that God is Truth and Truth is God. For the Hindus, chastity in a wife is the first thing required, all other qualities paling into insignificance beside it. The Vedas say: ", "\"\" (She .........the wife.........is born as half of the self.) In the hoary past leaped across death with chastity as her sole armour and shield, and got back the life of her husband, , from who had to yield her husbund's body, the submerged half of the wand of life of the couple, when it was pulled by her, his half standing out of the waters of death. Only in the background of this thrilling tale can we understand the lawgiver 's words: ", "\"Amnaye Smriti tantre Cha Lekachare cha sooribhi Sareerardham Smrita Jaya Punyapunyaphala Sama Yasya noparate bharya dehardham tasya jeevati Jeevatyardhasareerartham Kathamanyah Samapnuyat.\" ", "(In the Vedas and Smritis and popular usage, the wife is declared to be half the body of her husband and to be sharing equally the fruits of her husband's good and bad acts. Of him whose wife is not dead, half the body survives. When half his body survives, how can any one else inherit his property?) ", "20. expressly says that only the sonless widow who keeps the bed of her lord unsullied is entitled to her husband's property. also expressly says that she must be chaste (Yasyadavyab icharinee) if she is to succeed to her husband's properties. This idea of an unchaste wife's being disqualified to inherit her husband's property was taken for granted so much so that several law-givers, like , and , often omit it as urderstood. Thus, says:\" Patneeduhitaraschaiva Pitaram Bhratarastatha\" (the wife, the daughter, the parents and the brothers succeed to the property of a sonless man). says: \"Anapatyasya Prameetasya Dhanam Patnyabhigami'' (the wife takes the property of her sonless husband). And says: \"Bharya Sutaviheenasya Purushasya Mritasyatu\" (the wife takes the property of her sonless husband.) By such omission they do not intend to say that the disqualification of unchastity is removed. For it is the very same who says: ", "\"Vrateenavasadirata Brahmacharya Vyavasthita Dharmadanarata nityam aputrapai divam Vrajet.\" ", "(Performing religious ceremonies and observing fasts, chaste, virtuous, and always making gifts for the benefit of her husband's soul, even a childless widow goes to heaven.) ", "21. That the Hindus of South India (the widow in this second appeal comes from Trichinopoly district) did not attach less importance to chastity in a wife is clear from the following verses from the Kural of Sage Tiruvalluvar, the authoritative book of Dharma of the South: ", "\"Is there anything greater than a wife with the armour and shield of chastity? She worships no other God than her husband. Verily, at her bidding the rain will fall. Her chastity is her armour and her shield. A home with a chaste wife lacks nothing. If a wife lacks chastity, the home is doomed.\" ", "So, the North and South, East and West in Hindu India, did not differ in the least on this vital point. And this was only natural, seeing that the patriarchal Hindu law, of Sapindas and Samanodhakas, depended on the chastity of the cornerstone of its edifice. ", "22. With this background of a fanatical insistence on chastity in a wife and its being an essential pre-requisite for inheriting the husband's property, it is obvious that its omission by , and is only because of the disqualification being taken for granted. The omission is therefore similar to the omission of the disqualification in the Hindu Women's Eights to Property Act , 1937 by which expressly mentions the disqualification in the Hindu Married Women's Eight to Separate Residence and Maintenance Act of 1946, nine years later showing that it never intended to abrogate it for the purposes of the 1937 Act which conferred far more valuable rights. India is one of the few civilized countries where adultery is still a criminal offence, showing the great importance placed on the chastity of wives by the people and their and the feeling against men who interfere with it. The Hindu members of the , who formed the vast majority in both the , which passed the 1937 Act could never have intended to interfere with this deep-rooted feeling of the race. Nowhere in the Act or Preamble or objects do we have any whisper about removing this cornerstone of Hindu law about a wife's capacity to inherit. It is unthinkable that such a revolutionary change was made without any demand from the public or mention in the objects or preamble or body of the Act, and still more unthinkable that if the deliberately did away with it in 1937 it would keep it in 1946 for a lesser right, for that would be swallowing a camel and straining at a gnat. The 1937 Act was intended only to amend the Hindu law to give better rights to women in respect of property, and not to take away any established disability, like congenital idiocy, congenital lunacy, living in adultery, murdering the husband, etc., and the phrase \"notwithstanding any rule of Hindu law or custom to the contrary\" in Section 2 must be read as meaning only notwithstanding any rule of Hindu law or custom to the contrary of what Section 8 says, and not as abrogating all disqualifications, especially when the Act never mentioned such an object or intention at all. ", "23. Nor can the argument that the 1937 Act is a self-contained Act and therefore effect must be given to Section 3 despite all pre existing disqualifications under Hindu law be accepted. It is only a piecemeal legislation regarding a small corner of Hindu law. It is not a codifying Act, like the Hindu Code now before , nor even a general amendment of the Hindu law of Inheritance. has said in , 1945-1 M. L. J. 108 (P. C.) at p. 116 : ", "\"But it must be remembered that the Act was not a codifying Act or even a genera] amendment of the Hindu Law of Inheritance. It will help us to ascertain the precise scope of the Act if we can ascertain the defects which it set out to remedy,\" ", "Even the learned authors of Mayne's Hindu Law, Edns. 10 and 11 are well aware of this. They say: ", "\"Where the provisions of the Act are clear, effect of course, must be given to them. But the may well be presumed to have left Hindu law unaltered in other respects. The Act must therefore be so construed as not to create a greater departure from Hindu law than it necessarily implies.\" ", "In holding that the disqualification of chastity was abrogated, they overlooked their own observations quoted above and construed the Act so as to create a greater departure from Hindu law than it necessarily implies. The well known rules of construction given in . (1938) Bom. 502 (P. C.) and v. , 48 Bom. 569 (P. C.) and by acknowledged authorities like Maxwell on Interpretation of Statutes, were ignored by them in arriving at their conclusion. They also observed, rather illogically, that a murderous wife could not inherit as public policy retained that disqualification. There is nothing against public policy in retaining the disqualification of unchastity for a wife seeking to inherit her husband's property. The various anomalies pointed out by , if this disqualification is taken, as removed by implication by the 1937 Act, also show the erroneous nature of such a conclusion. ", "24. It was urged that commonsense requires the removal of the disqualification as there is no divesting of the estate from a widow who was chaste when she inherited it and began to live in adultery later on. I cannot agree. This rule of law is only the result of the application of English rules of fixity of property rights and a desire not to divest what has vested. The rule need not be extended further in the name of commonsense. Often, an unsuitable marriage which is only contemplated will be prevented by a by issuing an injunction, but, once it is celebrated a will be slow to annul it. So, this will be a case falling within 's famous rule : \"A hundred texts cannot annul a settled fact\". In other words, it is only a rule of prudence recognising a fait accompli and cannot be applied before the fact occurs. ", "25. Nor do justice, equity and good conscience require the abrogation of the disqualification. ", "There is nothing unjust in requiring chastity in a wife before she seeks to inherit her husband's property. It is only a quid pro quo. Nor is Equity offended by the disqualification. \"He who seeks equity must do equity\" is the well known rule of equity. A wife who seeks to inherit her husband's property should not be indulging in iniquitous conduct. Here, the widow left her husband and eloped with a paramour, , and lived with him in adultery. went and took her back, condoning her adultery. But, after a few days, she again left and went back to and lived with him in adultery in Kumbakonam till her husband 's death. Neither equity nor good conscience can be invoked on behalf of such a wife for inheriting the property of her husband she had wronged so grievously. ", "26. For all these reasons I have no hesitation whatever in agreeing with the conclusions of , and my Lord the Chief Justice. This second appeal must be dismissed with costs."], "relevant_candidates": ["0000026737", "0000210798", "0000378398", "0000529360", "0000649226", "0000692347", "0000814692", "0000909738", "0000935914", "0001646305", "0027391014"]} {"id": "0001120005", "text": [", J. ", "1. In view of the finding as to the nature of the discharge set up by the 1st defendant, the only question is, whether there is any objection to a suit by the plaintiff for his share. In the circumstances of the case, I think, there is no objection. As the plaintiff's partners refused to join as plaintiffs, the plaintiff did all he could when he made them defendants, and in view of their collusion with the 1st defendant, who contended that nothing was due to the partnership, the plaintiff was justified in confining the suit to his own share of, what he contended was due to, the partnership. The petition is dismissed with costs. ", ", J. ", "2. I think the case is concluded by the findings of fact. The 2nd and 3rd defendants, acting in collusion with the 1st defendant and fraudulently, gave the 1st defendant a full discharge for the amount due to the partnership of which the plaintiff, and the 2nd, 3rd and 4th defendants were members. It also appears upon the evidence that the 1st defendant knew that the plaintiff was, as partner, entitled to a one-quarter share of the debt. That being so, the only question is, whether the plaintiff's suit, for his share of the debt, can be sustained, he having made his co-partners defendants in the action? No doubt the general rule is that one partner can give a valid discharge of a debt due to his partnership but that rule has no application, if the discharge so given is in fraud of the aggrieved partner and is the result of collusion between the partner giving a discharge and the debtor. To hold otherwise would be acting in contravention of every principle of honesty as pointed out in Piercy v. Fynney L.R. 12 Eq. 69 at p. 74 in a case, of which the facts were some what similar. Nor does Section 45 of the Contract Act lay down any thing to the contrary. The cases relied on by the petitioner, viz., v. Manni Ram 1 A. 297, and 17 M. 12, have no relevant bearing on the present question. This petition must be dismissed with costs."], "relevant_candidates": ["0001515519"]} {"id": "0001129467", "text": ["PETITIONER: Vs. RESPONDENT: THE STATE OF MADHYA PRADESH& OTHERS. DATE OF JUDGMENT: 08/08/1996 BENCH: , B.P. (J) BENCH: , B.P. (J) SEN, S.C. (J) CITATION: JT 1996 (7) 216 1996 SCALE (5)793 ACT: HEADNOTE: JUDGMENT: ", "J U D G M E N T B.P.JEEVAN REDDY.J. ", "Leave granted. ", "These appeals are preferred against the judgment of of the Madhya Pradesh. allowing the Letters Patent Appeal preferred by the State of Madhya Pradesh against the judgment of a learned Single Judge who had allowed the writ petition filed by the appellant. While we agree fully with the reasoning and conclusion of , we think it necessary at the same time to emphasise a few aspects relevant in the case of such contracts. First, the relevant facts briefly. ", "For the excise year 1994-95, the appellant was the highest bidder for certain number of liquor shops. His bid in a sum of Rs.11,67,00,000/- was accepted, payable in monthly instalments of Rs.97,25,000/- each. After making the necessary deposits and after complying with other conditions, licences were granted to him and he commenced the business with effect from 1.4.1995. He failed to pay the monthly rental (licence fee) for the months of July and August, 1994. Thereupon a notice dated 9.8.94 (exhibit R-3) was issued by the authorities intimating him that he was in arrears of the licence fee for the months of July and August and that if he does not pay the same, the shops would be reauctioned. The appellant was asked to be present personally on 23.8.1994 for showing cause. Though the appellant received the said notice, he did not appear before the specified authority. He thus filed to avail of the opportunity of personal hearing afforded to him. (Though the appellant disputed this fact, has accepted the respondent's contention and has found as a fact that the appellant did fail to appear on the date of hearing. We accept the said finding.) On 2.9.94, a notification was issued - communicated to a large number of excise officers and other departments and a copy of which was also sent to the appellant stating that if the appellant did not clear the arrears on or before 12.9.94, the shops would be sold by reauction to be held at 2.00 p.m. on 12.9.94. The said notification is marked exhibit R-12. It was also published in the daily newspaper, , The notification mentioned the precise amount of arrears due from the appellant and stated that on the reauction being held, the existing licence in favour of the appellant shall stand cancelled. Since the appellant failed to pay, reauction was held on 12.9.94, whereafter, a demand was made upon the appellant for loss of revenue resulting from reauction, as provided by sub-section (4)(b) of Section 31 of the Madhya Pradesh Excise Act. We may set out sub-section (4) of Section 31 this stage: ", "\"(4) Where a licence is cancelled or suspended under Clause (a), clause (b), clause (c) or clause ", "(e) of sub-section (1), ", "(a) the fee payable for the balance of the period for which such licence would have been current but for such cancellation or suspension, may be recovered from the ex- licensee as excise-revenue; ", "(b) the Collector may take the grant under management or resell it at the risk and loss of the ex-licensee, but any profit realised by such management or resale which is not in excess of the amount recovered under clause (a) for such period shall be paid to the ex-licensee.\" ", "The appellant questioned the said demand by way of a writ petition in . He submitted that he was not given due opportunity before cancelling the licence as required by sub-section (1-A) of Section 31, that there was no order of cancellation of licence as such and that there was no proper publicity for the reauction conducted. He submitted that on account of lack of due publicity, only one bidder was present at the reauction and that the shops were sold at a low price. The learned Single Judge was impressed by the said contentions and allowed the writ petition. On appeal, however, rejected all of them. Before we set out the reasoning of , it would be appropriate to set out sub- section (1-A) of Section 31. It reads: ", "\"(1-A) Before making an order cancelling ok suspending a licence, permit or pass under sub-section (1), the authority aforesaid shall record in writing the reasons for the proposed action, furnish to the holder thereof a brief statement of the same and afford him a reasonable opportunity of being heard.\" ", " held that as held by that in an earlier decision, \"the court cannot take a hypertechnical view of the provisions and must understand the same in a reasonable manner. Substantial compliance with the requirements of the provisions would meet the ends of justice. Where a specific order of cancellation of licence is not passed but if the requirements are substantially complied with, the court under Article 226 of the Constitution would not ordinarily interfere.\" referred to the notice exhibit R-3 and found as a fact that it was received by the appellant. The Bench also found that the notification (R-12) was duly communicated to all the Excise Officers, other departments, and to the appellant besides being published in the newspaper, . After referring to the contents of exhibit R-12, the Bench held that the said notification was both an order of cancellation of the appellant's licence as well as notice of reauction. It also found that there was adequate publicity of the said notification and the fact that only one bidder appeared at the reauction was no ground for holding that there was no proper publicity. It gave reasons why bidder generally do not attend reauctions. also found as a fact that the appellant failed to appear on the date of hearing specified in notice (R-3). In the light of the said findings, held, and in our opinion rightly, that the learned Single Judge way in error in allowing the writ petition. We fully approve the reasoning of . ", "It has been held by a Constitution Bench of this in & Other etc. etc. v. Deputy Excise and Taxation Commissioner and Others etc. [A.I.R. 1975 S.C. 1121] that \"(T)he writ jurisdiction of under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.\" At the same time, it was observed that the licences are not precluded from seeking to enforce the statutory provisions governing the contract. must, however, be remembered that we are dealing with parties to a contract, which is a business transaction, no doubt governed by statutory provisions. While examining complaints of violation of statutory rules and conditions, it must be remembered that violation of each and every provision does not furnish a ground or the to interfere. The provision may be a directory one or a mandatory one. In the case of directory provisions, substantial compliance would be enough. Unless it is established that violation of a directory provision has resued in loss and/or prejudice to the party, no interference is warranted. Even in the case of violation of a mandatory provision, interference does not fellow as a matter of course. A mandatory provision conceived in the interest of a party can be waived by that party, whereas a mandatory provision conceived in the interest of public cannot be waived by him. In other wards, wherever a complaint of violation of a mandatory provision is made, the should enquire- in whose interest is the provision conceived. If it is not conceived in the interest of public, question of waiver and/or acquiescence may arise - subject, of course, to the pleadings of the parties. This aspect has been dea with elaborately by this in ", "------------------------------------------------------------ *Reference may also be made to the decision of this Court in [1994 (4)S.C.C. 104]. ", " [1996 (3) S.C.C 364] and in v. State of Jammu and Kashmir [1994 (4) S.C.C. 422] on the basis of a large number of decision on the subject. Though the said decisions were rendered with reference to the statutory Rules and statutory provisions (besides the principles of natural justice) governing the disciplinary enquiries involving government servants and employees of statutory corporation, the principles adumbrated therein are of general application. It is necessary to keep these considerations in mind while deciding whether any interference is called for by the whether under Article 226 or in a suit. The function of the is not a mechanical on. It is always a considered course of action. ", "There is yet another fact. The contract provides for payment of monthly rental on or before a, particular date. If the amount of monthly rental not paid before the due date, the licence is liable to be cancelled as provided by sub-section (1) of Section 31. It is true that before cancelling the licence, an opportunity of hearing should be given as provided by sub-section (1-A). While the opportunity to be given should be reasonable, the reasonableness or otherwise of the opportunity given must be judged keeping in view the time-frame available. It is a case of a contract stipulating monthly payments. If there is a default in paying a month's rental, notice proposing cancellation may follow. The time given to the licencee to show cause would naturally be a short one for the reason that soon thereafter the next month's rental (licence fee) falls due and if that is not paid, another show cause notice may have to follow. (It must be remembered that in this case, the default was for two consecutive months, July and August. The authorities evidently did not act in haste. Even after one month's default, they waited hoping that he should pay. But when he defaulted for the next month also, they issued the notice proposing cancellation.) What we wish to emphasise is that the opportunity contemplated by sub- section (1-A) cannot be operated in a leisurely manner. A realistic view has to be taken while determining whether the opportunity given was reasonable or not. The object of all excise laws is two-fold viz., to raise revenue and to regulate the trade in liquors which is a noxious substance. There is no fundamental right to trade in liquor ( 1995 (1) S.C.C. ", "574). The only right of the licencee is to seek to enforce the terms of contract (which is statutory in nature) and the statutory provisions governing the contract. The considerations aforementioned should be kept in mind while examining complaints of violation of statutory Rules, conditions add terms of contract as well as complaints of jack of reasonable opportunity. ", "Lastly, it is urged the before forfeiting the advance amount or the security deposit, a fresh opportunity of hearing ought to have been provided. From a perusal of the judgment under appeal, however, we do not find that any such contention was urged before it. For this reason, we decline to entertain this plea, which may involve investigation of factual aspects. ", "The appeals accordingly fail and are dismissed with costs. Advocate's fee Rs.5,000/-."], "relevant_candidates": ["0000675008", "0001865791", "0001974738"]} {"id": "0001141174", "text": ["CASE NO.: Appeal (civil) 4092 of 2001 PETITIONER: State of U.P. RESPONDENT: & Others DATE OF JUDGMENT: 16/12/2005 BENCH: S.B. Sinha & P.P. Naolekar JUDGMENT: ", "JUDGMENT W I T H CIVIL APPEAL NOS. 3872, 3873, 4038, 4093-4102, 7545-7646, 7647-7748 of 2001, CIVIL APPEAL NO. 6810 of 2005 and CIVIL APPEAL NO. 6814 of 2005 , J : ", "The jurisdiction of to issue a direction for framing a scheme for regularisation of the employees of (for short \"the \") is in question in this batch of appeals which arise out of judgments and orders passed by of Judicature at Allahabad in the writ petitions filed by the private respondents either dismissing or allowing the same. ", "ACT The legislature of the State of Uttar Pradesh enacted The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (for short \"the Act\"). The has been established under Section 26-A of the Act. Section 26-B provides for the constitution of the . In exercise of its power conferred upon it by Section 25-A and 26-X of the Act, regulations have also been framed by the laying down the terms and conditions of the service of the employees of the Market Committees known as the Uttar Pradesh Agricultural Produce Market Committees (Centralised) Services Regulations, 1984 (for short \"Services Regulations\"). Similar regulations have also been framed by the in respect of its own employees being the Uttar Pradesh Agricultural Produce Markets (Officers and Staff Establishment) Regulations, 1984 (for short \"Establishment Regulations\"). ", "BACKGROUND FACT In the of Uttar Pradesh, there are 244 Market Committees. 3395 posts were sanctioned but indisputably 5600 appointments have been made. We are herein concerned with the orders of appointments and orders of terminations issued in respect of about 1021 employees who were appointed between the period 1.4.1996 and 30.10.1997. A resolution was passed by the on or about 30th September, 1996 proposing regularisation of the services of those employees who have completed one thousand days of service. The had also its construction divisions. The said proposal was, however, confined to the employees working in the construction divisions against contingency funds. Approval having been sought for from in relation to framing of appropriate rules, in this behalf, informations were sought for from various departments including in regard to the appointments made in past six months by a letter dated 20th November, 1997. Relevant informations were furnished by the Director of the whereafter the sought for further informations and details regarding the appointments made in the and by a letter dated 17.3.1998. Such informations were sought for by the again by a letter dated 18.5.1998. On or about 12.2.1999, an order was issued by the directing that services of all such employees who had been irregularly appointed during the period 1.4.1996 to 30.10.1997 be cancelled on last-come-first-go-basis stating: ", "\"1. The irregular appointment made in the Mandi Parishad and Mandi Samities during the period w.e.f. 1.4.96 to 30.10.97 should be cancelled immediately. The following course should be adopted to terminate such appointments: ", "(a) There is no legal impediment in terminating the service of the employee concerned after cancelling the appointments which have been made without any created/ sanctioned post but the reason therefor shall have to be recorded in the order. ", "(b) There is no legal impediment in terminating the service after cancelling the appointments of such persons as did not have educational qualifications prescribed for the post concerned but the reason therefor should be recorded in the order. ", "(c) The termination of service of such persons, as have been appointed in relation to some post and also have educational qualification prescribed for that post, should be made in accordance with the procedure mentioned in their appointment order. In case, no procedure is mentioned in the appointments order, their service should be terminated after giving either notice or pay in lieu thereof. ", "(2) In this regard I have to inform this thing also that after making intensive examination in respect of irregular appointments made in the Mandi Parishad and Mandi Samities before 1.4.96, kindly furnish clear report alongwith detailed statement by 20.2.99. ", "(3) Kindly make available in each case by 18.2.99 your proposal with clear recommendation to the . for action against the officers responsible for the said irregular appointments.\" ", "Further directions were issued on 17.3.1999 in the following terms: ", "\"In regard to the appointed subject and Semi . Letter No. Dire-Camp/99-468 dt. 8.3.99, I have been directed to say that keeping in view, the decision taken by . in regard to irregular appointments made on the post of various categories in , there has been no requirement of prescribed procedure rules. In such circumstances, the proposal sent to . vide letter 1418/Camp dt. 18.10.96 of is rejected by the . after due consideration.\" ", "Pursuant thereto or in furtherance of such directions, the services of a large number of employees were terminated on or about 20th March, 1999. ", "On 27.1.1998, the Director of the Board informed the Secretary, that all appointments are unauthorized/ irregular and, thus, void ab initio and, therefore, their appointments should be terminated following the rules. In the said letter, the opinion of the Chairman of the Board was quoted stating: ", "\"As the action, whatsoever, taken in this matter will create wide ranging ramifications (both political and administrative) therefore it will be proper to send the factual report of the whole case to Govt. for guidance. It will be expedient to take further action after consulting the department of justice and obtaining orders from the Hon'ble Minister for Agriculture and the Hon'ble Chief Minister.\" ", "Photocopies of the notesheets and photocopies of the details of all appointments and the report received from the Deputy Director (Administration) were annexed thereto. ", "It may be noticed that the in the meantime had also refused to approve the proposed rules framed by the for regularisation of its employees. ", "PROCEEDINGS BEFORE THE HIGH COURT Questioning the aforementioned directions of the State, one filed a writ petition before of in April, 1999. By a judgment and order dated 11.8.2000, a learned Single Judge of allowed the same holding that the orders of termination issued pursuant to the orders of dated 12.2.1992 were illegal. A Division Bench of , , put its seal of approval to the order of the learned Single Judge by a judgment and order dated 5.9.2000 in similar writ petitions filed by other dismissed employees. A writ petition filed by one , however, was dismissed by another Division Bench of at Lucknow upholding the said order of . ", "The parties are, thus, before us. ", "SUBMISSIONS On behalf of the Board: ", "Submission of Mr. , learned senior counsel appearing on behalf of the Board are: ", "(i) In terms of the statutory mandate contained in Section 26-M of the Act, the Board was bound by the directions issued by the . ", "(ii) The appointments having been made in utter disregard of the mandatory provisions of the Services Regulations and the Establishment Regulations, the employees did not derive any legal right to continue in the said posts. ", "(iii) Such appointments having been made on a pick and choose method and on an adhoc basis, the judgments of cannot be sustained. ", "(iv) Indisputably the provisions of U.P. Industrial Disputes Act and the rules framed thereunder relating to retrenchment of workmen were complied with and in that view of the mater it cannot be said that the orders of termination passed against the employees were illegal. ", "(v) In any view of the matter, the remedy of the employees, if any, was to approach the industrial courts. ", "(vi) It is not a case, it was urged, where principles of natural justice were required to be complied with. ", "On behalf of the Mr. , learned senior counsel appearing on behalf of the of Uttar Pradesh submitted that from the records it would appear that the adopted a known criterion for cancellation of appointment of such employees who were in the last slots, namely, 1.4.1996 to 30.10.1997. Such orders of termination ensured that the principles of last-come-first-go basis are followed and the employees are paid one month's salary in lieu of notice as also 15 days wages for each completed year of service by way of compensation. No appointment having been made after 30.10.1997, the impugned judgment of cannot be sustained. ", "On behalf of the Writ Petitioners Mr. , learned senior counsel appearing on behalf of the Respondents, on the other hand, urged: ", "(i) that the appointments of the employees cannot be said to be illegal as the provisions contained in the respective regulations apply to appointments in regular cadre. ", "(ii) There is no embargo in appointing employees on adhoc basis in exigency of service or on work charge basis recognised in the regulations in view of the fact that such employees do not derive the benefits which are granted to the regular employees. ", "(iii) Section 26-M of the Act had no application in the facts of the case in view of the fact that appointment of adhoc employees is not a matter which would come within the purview of the functions of the as envisaged under Section 26-F and 26-L of the Act. In any event, so far as the appointments of employees employed in the Market Committees are concerned, the same being governed by Section 23 of the Act, Section 26-M thereof will have no application. ", "(iv) By reason of purported directions issued under Section 26-M, the rights and privileges granted to the employees under other statutes cannot be taken away. ", "(v) In view of the decision of this Court in [1992 Supp (2) SCC 343] and [], the statutory power of appointment being vested in the , the State could not interfere therewith. ", "(vi) In any view of the matter, the purported policy decision adopted by the must be held to be wholly illegal and without jurisdiction as prior thereto the requirements of each of the samities had not been taken into consideration. It was pointed out that even by 1998 full reports had not been submitted by the Board as regards the financial position of vis-a-vis the strength of the employees and, thus, the policy decision must be held to have been made without any application of mind. ", "(vii) A policy decision of a cannot be communicated by a demi- official letter without complying with the constitutional norms. ", "(viii) One set of adhoc employees and/ or daily wagers should not be replaced by another set of adhoc employees/ daily wagers. ", "(ix) The Board having adopted a resolution to regularise the services of its employees, there was no need to obtain any approval from the . ", "(x) As admittedly no appointment whatsoever was made in terms of the statutory regulations since the inception of constitution of , the could not have ignored the past practice particularly in a case of this nature where the employees concerned have requisite educational qualifications. ", "(xi) The court in such a situation can be said to have the requisite jurisdiction in directing a within the meaning of Article 12 of the Constitution of India to make a scheme of regularisation. ", "Mr. , learned senior counsel appearing on behalf of another writ applicant submitted that institutions of the market committees and the having their activities principally in rural areas, the human problem should not be ignored as without such daily wagers or adhoc employees functions of the statutory body may have to be stopped. ", "The learned counsel submitted that the appointments being not void ab initio and of no effect, the could not have issued directions for termination of their services. As the appointments were made having regard to the necessity felt by and the , this Court should not exercise its discretionary jurisdiction under Article 136 of the Constitution of India. ", "Mrs. , learned senior counsel appearing on behalf of supplemented the arguments of Mr. and Mr. contending that there was no material before the government for issuing the impugned instructions. It was submitted that the Market Committees having regard to Section 19 of the Act had their own funds, the case of each Committee should have been considered separately. ", " A learned Single Judge of in his order dated 11.8.2000, which has been approved by of in its judgment dated 5.9.2000, held that: ", "(i) the normal functions of the Board pertain to establishment or construction of new Market yards; control over Market Committees, direction to the Committees to ensure efficiency, etc., it could not have interfered in the functioning of the Market Committees. ", "(ii) The procedures prescribed were to be applied in relation to selection of regular employees and not adhoc employees or daily wagers. ", "(iii) No principle has been laid down as to why adhoc employees engaged before 1.4.1996 and after 30.10.1997 should be retained in service and, thus, the action of the was discriminatory in nature. ", "(iv) The Government instead of formulating any policy resorted to an arbitrary method of issuing a 'Tugalaki' order in terminating the services of the employees recruited between 1.4.1996 and 30.10.1997 were also terminated. ", "(v) Although such irregular appointments have been made by several directors but only those made by two of them, namely, Shri and Dr. , having been picked up for being cancelled, the same being discriminatory and mala fide, the order impugned in the writ application were unsustainable. ", "(vi) An employee should not be continued to be kept as adhoc employee for more than 240 days. ", "(vii) The resolution of the Board to regularise services of such employees who have completed one thousand days of service was valid. As the writ petitioners have been working in various Committees for a long period ranging from six to nine years, termination of their services was arbitrary. ", "(viii) The principles of natural justice have been ignored in terminating the services of such employees and, thus, the orders terminating the services of the writ petitioners were bad in law. ", "It was directed: ", "\"Having regard to the discussions made above, I am inclined to hold that written and verbal termination orders of the petitioners issued by the authorities at the direction of the as contained in letter dated 12.2.99 are arbitrary, unreasonable and discriminatory and, therefore, all such termination orders along with the irrational impugned letter of source dated 12.2.99 are hereby quashed. A writ of certiorari is issued accordingly. Further, a writ of mandamus is also issued commanding the opposite parties to allow the petitioners to resume their duty with immediate effect. They shall be deemed to have continued in service and as such, they shall be relegated to their original position. However, they will not get their back wages. shall within six months resolve and formulate a policy to deal with the terms of their service by giving due consideration to its earlier resolution regarding regularization of their services. The Board will also take stern step to ensure that such an odd situation to the embarrassment of the competent authorities does not arise in future.\" ", "However, as noticed supra, of the same Court in its judgment dated 13.11.2000 opined that the appointments having been made in violation of the statutory regulations, the appointees must be held to have entered into service through backdoor and in that view of the matter, the has the requisite jurisdiction to issue a direction in terms of Section 26-M of the Act. ", "The judgment of dated 5.9.2000 passed in v. State of U.P. was made in ignorance of an earlier division bench decision in and, thus, was rendered per incuriam. ", "RELEVANT PROVISIONS OF THE STATUTES Before adverting to the rival contentions, we may briefly notice the provisions of the said Act. ", "Market s are incorporated and constituted in terms of Sections 12 and 13. Section 19 of the said Act provides for establishment of a Market Fund. Sub-section (2) of Section 19 mandates that all expenditure incurred by the committee shall be defrayed out of the said fund and the surplus, if any, shall be invested in such a manner as may be prescribed. Sub-section (3) of Section 19 inter alia illustrates as to how such funds are to be utilised including salaries, pensions and allowances, etc. and other expenses, as may be prescribed, as specified in clause (ii). The proviso appended thereto mandates that annual expenditure in respect of matters specified in clause (ii) shall not exceed 10% of the total annual receipts of the excluding loans raised by it and advances or grants made to it except with the prior approval of the . ", "Section 23 of the Act occurring in Chapter IV provides for appointments of officers and servants of and their conditions of services. The appointments of such officers who may be appointed for carrying out the purpose of the Act must be done in terms of the bye-laws framed by it. Sub-section (2) of Section 23 envisages that every shall have such number of Secretaries and such other officers as may be considered necessary by the for the effective discharge of the functions of the , appointed by the on such terms and conditions as may be provided for in the regulations made by it. ", "Chapter V of the Act deals with external control. Establishment and constitution of the are envisaged under Sections 26-A and 26-B. Section 26-A empowers the to appoint such officers and servants as it considers necessary for efficient performance of its functions on such terms and conditions, as may be provided for in the regulations made by the . Section 26-L provides for the powers and functions of the . Functions of the are provided for in Sub-section (1) thereof stating: ", "\"(i) superintendence and control over the working of the Market Committees and other affairs thereof including programmes undertaken by such Committees for the construction of New Market Yards and development of existing Markets and Market Areas; ", "(ii) giving such direction to Committees in general or any Committee in particular with a view to ensure efficiency thereof; ", "(iii) any other function entrusted to it by this Act; ", "(iv) such other functions as may be entrusted to the Board by by notification in the .\" ", "The powers of the have been enumerated under Sub-section (2) of Section 26-L of the Act which includes: ", "\"(x) to do such other things as may be of general interest to Market Committees or considered necessary for the efficient functioning of the Board as may be specified from time to time by .\" ", "Section 26-M of the Act empowers to issue directions in the following terms: ", "\"(1) In the discharge of its functions, the Board shall be guided by such directions on question of policy, as may be given to it by . ", "(2) If any question arises whether any matter is or is not a matter as respects which may issue a direction under sub- ", "section (1), the decision of shall be final.\" ", "Section 26-V of the Act provides for accounts and audit. Section 26- X thereof empowers the to make regulations with the previous approval of which shall be subject to the said Act and the rules made thereunder. Section 32 of the Act confers power upon the to call for the proceedings of a for the purpose of satisfying itself as regard legality or propriety of a decision or an order or orders and pass order thereon as it may deem fit if it is of the opinion that the decision or order of the should be modified, annulled or reversed. Section 33-B of the Act reads as under: ", "\"Powers of the State Government.-(1) The State Government with a view to satisfying itself that the powers, functions and duties of the or a by or under this Act are exercised or performed by it properly, may require the Commissioner or the Collector or any other person or persons to inspect or cause to be inspected any property, office, document or any work, of the or the or to make inquiries into all or any of the activities of the or the in such manner as may be prescribed and to report to it the result of such inquiry within such period as may be specified. ", "(2) The or the , as the case may be, shall give to the Commissioner or the Collector, or other person or persons, all facilities during inspection and for the proper conduct of the inquiry and shall produce any document or information in its possession, when so demanded for the purpose of such inspections or inquiry, as the case may be.\" ", "Section 39 of the Act provides for the bye-laws making power in . Proviso appended to Section 33 provides that no bye- law other than a bye-law made by adopting draft or model bye-law suggested by the shall be valid unless approved by it. Section 40 of the Act provides for rule making power. ", " framed rules known as \"The U.P. Krishi Utpadan Mandi Niyamavali, 1965 (for short \"the Rules\") in terms of Section 40 of the Act. The functions, duties and powers of the in terms of Sections 16 and 17 of the Act have been laid down in Rule 46. Rule 60 states that the qualification, designations, grades, salaries and allowance of the posts of officers and servants whose appointing authority is the shall be approved by the Director. Such appointment made by the under sub-section (1) of Section 23 of the Act for those posts wherefor the is the appointing authority shall be intimated within 30 days of the date of such appointments to the Directors or to such officer as may be authorised by the Director in this behalf. Sub-rule (3) of Rule 60 mandates that the Market shall maintain service records and character rolls in such forms as are prescribed for government servants and those records shall be kept in the custody of the Market Secretary. Rule 63 provides for the functions, powers and duties of the Secretary. ", "In exercise of its regulation making power, as noticed hereinbefore, Services Regulations and the Establishment Regulations have been made. ", "Regulation 2(e) defines \"Employee\" to mean 'every person appointed on whole time basis in Classes A, B, C and D mentioned in Regulation 5, whether on contract basis, on deputation or otherwise but does not include persons employed on daily wages, work charged and on part-time basis. Chapter IV of the Establishment Regulations provides for recruitment and appointment. Regulation 9 specifies the appointing authority in respect of the posts shown in Column 1 of the table. Regulation 10 provides for the source of recruitment inter alia providing that 85 per cent posts in lowest grade in Class C shall be filled by direct recruitment and 15 per cent by promotion from Class D and all the posts in Class D shall be filled by direct recruitment. Regulation 11(1) provides for constitution of for the purpose of recruitment to Class A and B posts whereas Regulation 11(2) provides for constitution of for recruitment to Class C and D posts. Regulation 12 empowers the appointing authority to determine the number of vacancies in all the classes to be filled during the course of the year as also the number of vacancies to be reserved for candidates belonging to Schedules Castes and Scheduled Tribes and other categories under Regulation 8. The other sub-regulations contained in Regulation 12 provides for the mode and manner in which such vacancies shall be filled up. Chapter V lays down the conditions of service by way of appointment, probation, confirmation and seniority. Chapter VI provides for superannuation, pay, allowances and other service conditions. ", "The Services Regulations contain similar provisions. Part III of the said Regulations deal with recruitment and procedure. Regulation 10 lays down that recruitment may be made either from the open market or from promotion. Regulation 11 provides for reservation. Constitution of Selection Committee is contained in Regulation 12. Regulation 14 provides for determination of vacancies whereas Regulation 16 provides for the procedure of selection by direct recruitment. Chapter V of the said Regulations lays down the mode and manner in which the appointment, probation, confirmation and seniority would be made. ", "LEGALITY OF THE APPOINTMENTS The is a 'State' within the meaning of Article 12 of the Constitution of India. It was constituted in terms of the provisions of the said Act. The powers and functions of the as also the State in terms of the provisions of the statute having been delineated, they must act strictly in terms thereof. It is a statutory authority. Its powers, duties and functions are governed by the statute. It is responsible for constitution of for the purpose of overseeing that the agriculturists while selling their agricultural produce receive the just price therefor. It not only regulates sale and purchase of the agricultural produce but also controls the markets where such agricultural produces are bought and sold. The is entitled to levy market fee and recover the same from the buyers and sellers through . Indisputably, and the have power to appoint officers and servants. Although, the power of the in this respect is not circumscribed, that of is. can appoint only such number of secretaries and other officers as may be necessary for efficient discharge of its functions. Terms and conditions of such services are to be provided by it. Section 19 of the Act, however, imposes further restriction on the power of by limiting the annual expenditure made in this regard not exceeding 10% of the total annual receipt of the . ", "The appointments for different classes of employees are to be made by the and the officers, as the case may be, in terms of the provisions of the regulations. ", "Both the Services Regulations and the Establishment Regulations, as noticed hereinbefore, are applicable respectively to the employees of the as also the Market Committees. The said regulations provide for detailed procedure for appointment and the terms and conditions therefor. No appointment, thus, can be made in violation of the provisions of statute and statutory rules. ", "Submission of the learned counsel appearing on behalf of the employees is that the procedures prescribed by reason of the Regulations are applicable to the regular employees. It is so. The question which, however, falls for consideration is as to whether any appointment can be made de'hors the provisions of the Act and the rules. Our attention has been drawn to the definition of 'employee' which does not include persons employed on daily wages, work charged and/ or part-time basis. If the expression \"employee\" does not bring within its fold any person employed on daily wages, work charged or on part- time basis, the same would mean that the persons so appointed would not be the employees within the meaning of the said regulation. It would, therefore, not be correct to contend that or the have the jurisdiction to appoint anybody on daily wages, work charged or on part-time basis de'hors the rules. The power to make appointments by the committee or the board whether contained in Section 23 or Section 26-F of the Act are statutory in nature. In absence of any provisions conferred upon them to appoint any employee de'hors the provisions of Sections 23 and 26-F and the regulations framed thereunder, indisputably would mean that such appointments are de'hors the Act and the rules. The Rules also provide that any appointment made by the under Sub-section (1) of Section 23 shall be intimated within 30 days of such appointment to the Director or to such other officer as may be authorised by the Director in this behalf. It implies that although may have power to make appointments, such appointments can be made in relation to the posts created therefor by the wherefor requisite intimation has to be given to the Director or the officer authorised in this behalf. We may assume that for meeting the exigencies of situations it may be possible for the or the to appoint a person on adhoc basis. Such adhoc employees, however, being not employee within the meaning of the provisions of the Act and the Regulations, a legal relationship between the employer and the employee would not come into being. As no legal relationship of employer and employee comes into being, evidently, such persons do not derive any status. They a fortiori derive no legal right to continue in service subject, of course, to the compliance of the provisions of any other Act or the rules conferring certain benefits to them. [ ] Sections 23 and 26-F of the Act categorically mandate that all appointments must be made in terms of the provisions of the regulations. The terms and conditions of such services are also required to be prescribed by the regulations, the logical corollary whereof would be that permanent status is required to be given to a person who is not otherwise an employee of the or the Market committee, as the case may be. It is required to be done in terms of the regulation only. ", "The is entitled to take a decision which is within its powers and functions delineated by the Act. A decision by way of resolution or otherwise cannot be taken by the which is beyond the scope and purview of the Act and the regulations framed thereunder. ", "The , therefore, was bound to make a regulation if it intended to put the respondents on its rolls. , as noticed hereinbefore, however, was of the opinion that it was not necessary so to do. For the reasons aforementioned, we do not agree. ", "POWER OF STATE TO ISSUE DIRECTIONS The in exercise of its power conferred upon it could issue directions. The power of the Government is confined to issue directions on question of policy. It cannot, however, interfere in the day to day functionings of the . Such policy decision, however, must be in relation to the activities of the under the Act and not de'hors the same. [See (supra), (supra) and 2005 (8) SCALE 80] Such a decision on the part of the Government must be taken in terms of the constitutional scheme, i.e., upon compliance of the requirement of Article 162 read with Article 166 of the Constitution of India. In the instant case, the directions were purported to have been issued by an officer of the . Such directions were not shown to have been issued pursuant to any decision taken by a competent authority in terms of the Rules of Executive Business of the framed under Article 166 of the Constitution of India. ", " , [], this Court held: ", "\"The said circular letter has not been issued by the State in exercise of its power under Article 162 of the Constitution of India. It is not stated therein that the decision has been taken by the or any authority authorized in this behalf in terms of Article 166(3) of the Constitution of India. It is trite that a circular letter being an administrative instruction is not a law within the meaning of Article 13 of the Constitution of India. ( )\" ", "However, it is not correct that the power of the to issue directions must be confined to the matters enumerated in Sub-section (1) of Section 26-L of the Act. Section 26-L is subject to the provisions of the Act. The functions of the enumerated in Section 26-L of the Act are, therefore, not exhaustive. Appointment of servants and officers are also one of the functions of the . The also has right to supervise and control the activities of the officers and . In that view of the matter, if a policy decision is taken by the in regard to the appointment or terms and conditions of the servants, in the event, regulations made in this behalf do not contain any provisions, such policy decision must conform to the directions of the issued in that behalf, if any. The further is empowered to do such other things as are specified in clause ", "(x) of Section 26-L of the Act. ", "The , however, in law could not have abdicated its power in favour of . ", "We are, therefore, of the opinion that the direction by the was strictly not in accordance with law. ", "The directions of the were, therefore, although not binding on the , the same cannot be said to be wholly irrational. In his report dated 7.1.1998, the Chairman of the sought for advice of the . The had the power of supervision over the activities of the officers of the and the itself. While granting such advice, the had taken into consideration the last segment of employment. The was not expected to direct the and the in turn could not have directed to dismiss all the employees who have been illegally appointed. If such directions had been confined to the period 1.4.1996 to 30.10.1997 on following certain basic principles like last-come- first-go-basis, we do not see any reason as to why the same would be termed to be arbitrary or discriminatory. ", "NATURAL JUSTICE If the employees are workmen within the purview of the U.P. Industrial Disputes Act, they are protected thereunder. Rules 42 and 43 of the U.P. Industrial Disputes Rules provide that before effecting any retrenchment in terms of the provisions of Section 6-N of the U.P. Industrial Disputes Act, the employees concerned would be entitled to a notice of one month or in lieu thereof pay for one month and 15 days wages for each completed year service by way of compensation. If such a retrenchment is effected under the Industrial Disputes Act , the question of complying with the principles of natural justice would not arise. The principle of natural justice would be attracted only when the services of some persons are terminated by way of a punitive measure or thereby a stigma is attached. [ , para 16, , , paras 4 and 5 and , paras 4 and 5] [], it was held: ", "\"The principle of natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an empty formality. Even the principle of estoppel will apply. [ principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case.\" ", ", therefore, must be held to have erred in law in holding that the principles of natural justice were required to be complied with. ", "DIRECTIONS OF The directions of , in our opinion, were not justified. It may be that in implementing the advice of the , some of the officers of the became overzealous in terminating services of the employees who were appointed prior to 1.4.1996. The learned Single Judge of was not, therefore, correct in describing a decision of the an arbitrary or a discriminatory one. No sufficient or cogent reason has been assigned by the learned Single Judge to arrive at a finding that such period has been picked up out of the hat. With a view to judge the correctness or otherwise of such a decision, it was necessary to consider the backdrop thereof. We have noticed hereinbefore the contents of the correspondences passed between the parties. When the advice of the Chief Minister and/ or the was sought for, the Chief Minister wanted the details of such appointment made within the last six months. However, at a later stage, the validity or otherwise of the appointments made by the Directors of the on different periods had been taken into consideration. It is only upon application of mind on the facts and circumstances of this case that a direction was issued on 17.3.1999 by the . ", "REGULARISATION The direction of to frame scheme for regularisation of the employees as also the resolution of the Board to regularise the services of the employees who had completed one thousand days of service must be considered having regard to the aforementioned legal position in mind. ", "When questioned, Mr. and Mr. submitted that regularisation would mean permanence. Regularisation of the services of an employee would, therefore, mean that the concerned persons who had no status within the purview of the definition of 'employee' would become employee. Thus, a change in the status would be effected. ", "An attempt to induct an employee without following the procedure would be a backdoor appointment. Such backdoor appointments have been deprecated by this Court times without number. [See for example v. (1992) 4 SCC 99, para 23] Even in [], whereupon the learned counsel for the parties relied upon, it is stated: ", "\"Ordinarily speaking, the creation and abolition of a post is the prerogative of the . It is the again that lays down the conditions of service subject, of course, to a law made by the appropriate legislature. This power to prescribe the conditions of service can be exercised either by making rules under the proviso to Article 309 of the Constitution or (in the absence of such rules) by issuing rules/instruct-ions in exercise of its executive power. The court comes into the picture only to ensure observance of fundamental rights, statutory provisions, rules and other instructions, if any, governing the conditions of service. The main concern of the court in such matters is to ensure the rule of law and to see that the acts fairly and gives a fair deal to its employees consistent with the requirements of Articles 14 and 16\u0005\" ", "A 3-Judge Bench of this Court upon taking into consideration a large number of decision in [] held that illegal appointments cannot be regularised. It was further held: ", "\"No regularisation is, thus, permissible in exercise of the statutory power conferred under Article 162 of the Constitution if the appointments have been made in contravention of the statutory rules.\" ", "The power to frame regulations is expressly conferred on the Board in terms of Section 26 of the Act. Such regulations are to be made with the previous approval of . Indisputably, by its letter dated 17.3.1999 refused to accord permission in relation thereto. ", "If no appointment could be made by the in exercise of its power under Article 162 of the Constitution of India as the same would be in contravention of the statutory rules, there cannot be any doubt whatsoever that the or for that matter cannot make an appointment in violation of the Act and the Regulations framed thereunder. ", "In Executive Engineer, ZP Engg. Divn. [], it was held: ", "\"It may not be out of place to mention that completion of 240 days of continuous service in a year may not by itself be a ground for directing an order of regularisation. It is also not the case of the respondents that they were appointed in accordance with the extant rules. No direction for regularisation of their services, therefore, could be issued. ( , and v. State of J&K) Submission of Mr to the effect that keeping in view the fact that the respondents are diploma-holders and they have crossed the age of 40 by now, this Court should not interfere with the impugned judgment is stated to be rejected.\" ", "[See also , ] [], it was categorically held: ", "\"The question, therefore, which arises for consideration is as to whether they could lay a valid claim for regularisation of their services. The answer thereto must be rendered in the negative. Regularisation cannot be claimed as a matter of right. An illegal appointment cannot be legalised by taking recourse to regularisation. What can be regularised is an irregularity and not an illegality. The constitutional scheme which the country has adopted does not contemplate any back-door appointment. A before offering public service to a person must comply with the constitutional requirements of Articles 14 and 16 of the Constitution. All actions of the must conform to the constitutional requirements. A daily-wager in the absence of a statutory provision in this behalf would not be entitled to regularisation. ( and .)\" ", " [], (supra) was followed holding that in law 240 days of continuous service by itself give rise to permanence which reason has weight with the opinion of learned Single Judge of . ", "It is, therefore, not correct to contend that only because in the correspondences between the and the the appointments of such persons have been described to be irregular, the same would not mean that they are not illegal. ", "In any event, no temporary or permanent status can be granted to an employee by way of regularisation. [ and ]. ", "PRECEDENTS Mr. has relied upon a large number of decisions to contend that this Court has directed framing of such schemes. ", " [], the writ petitioners were appointed as trainee engineers pursuant to an advertisement issued therein. Representations have been made to them that after their training was completed, they would be absorbed in regular employment of the . Some employees who were getting age-barred for government employment and had left the were told to come back under the temptation of getting permanently employed under the . When the was reeling under a strike of its employees, these trainee engineers stood by the to keep up the generation and distribution of electricity and had been assured of absorption. The had decided to absorb them on permanent basis but initially on a probation of two years without conducting any further examination. It was in aforementioned situation, this Court applied the principles of promissory estoppel and observed that the should have regularized the services of the trainee engineers. The Court did not lay down any law that regularization would be directed despite the fact appointments had been made in violation of the rules. ", "In (supra), this Court was beset with the scheme framed by the to regularize the services of its employees. The Bench did not go into the question of validity or otherwise of such a scheme. We have, however, noticed hereinbefore that even such a scheme would be impermissible in law. ", "In and Others etc. v. and Others [AIR 1988 SC 2133], this Court was dealing with a matter where the State Government had come forward with orders from time to time for absorption of work charged employees. The Court was of the opinion that the benefits conferred thereunder were available to them. ", " [] yet again no law has been laid down. No decision other than (supra) has been referred to. Before this Court, a scheme was submitted in terms whereof the scheme had undertaken to regularize work- charged employees employed prior to 19.9.1985. This Court besides the proposals made therein issued certain other directions. ", "Strong reliance has been placed by Mr. on . [(1972) 2 SCR 799] for the proposition that irregular employees can be regularized. Therein it was held: ", "\"The contention on behalf of the that a rule under Article 309 for regularisation of the appointment of a person would be a form of recruitment read with reference to power under Article 162 is unsound and unacceptable. The executive has the power to appoint. That power may have its source in Article 162. In the present case the rule which regularised the appointment of the respondent with effect from February 15, 1958, notwithstanding any rules cannot be said to be in exercise of power under Article 162. First, Article 162 does not speak of rules whereas Article 309 speaks of rules. Therefore, the present case touches the power of the to make rules under Article 309 of the nature impeached here. Secondly when the Government acted under Article 309 the Government cannot be said to have acted also under Article 162 in the same breath. The two articles operate in different areas. Regularisation cannot be said to be a form of appointment. ", "Counsel on behalf of the respondent contended that regularisation would mean conferring the quality of permanence on the appointment whereas counsel on behalf of the contended that regularisation did dot mean permanence but that it was a case of regularisation of the rules under Article 309. Both the contentions are fallacious. If the appointment itself is in infraction of the rules or if it is in violation of the provisions of the Constitution illegality cannot be regularised. Ratification or regularisation is possible of an act which is within the power and province of the authority but there has been some non-compliance with procedure or manner which does not go to the root of the appointment. Regularisation cannot be said to be a mode of recruitment. To accede to such a proposition would be to introduce a new head of appointment in defiance of rules or it may have the effect of setting at naught the rules.\" ", "The said decision has been noticed in various judgments referred to hereinbefore. It instead of helping the Respondents goes directly against them. ", " [1991 Supp (2) SCC 643], this Court was confronted with various interim orders passed by from time to time in several writ petitions. It was observed that if the direct recruitment takes place on one hand and substituted teachers are also directed to be regularized subsequently, it would create an enormous problem for the department to accommodate both the categories of persons and in the aforementioned situation, in exercise of its power under Article 142 of the Constitution of India, this Court with a view to avoid further litigation and also to avoid seemingly conflicting interim orders issued by gave certain directions. Such directions having evidently been issued by this Court in exercise of its power under Article 142 of the Constitution of India do not constitute a binding precedent. Even therein, the scope and ambit of this Court's jurisdiction under Article 142 vis-`-vis existence of the statue and statutory rules and the constitutional mandate contained in Articles 14 and 16 of the Constitution of India had not been taken into consideration. ", "On the other hand, in a series of decisions, which we have noticed hereinbefore, this has now firmly laid down the law that regularization cannot be a mode of appointment. ", "OTHER CONTENTIONS Mr. has placed strong reliance upon the provisions of the U.P. Regularisation of Adhoc Appointments (on Posts Outside the Purview of the Public Service Commission) Rules, 1979 purported to have been framed by the State in pursuance of the provisions of Clause (3) of Article 348 of the Constitution of India. Rule 4 of the said Rules reads, thus: ", "\"4. Regularisation of ad hoc appointments \u0016 (1) Any person who \u0016 ", "(i) was directly appointed on ad hoc basis on or before June 30, 1998 and is continuing in service as such on the date of commencement of the Uttar Pradesh Regularisation of Ad hoc Appointments (On Posts Outside the Purview of the Public Service Commission) (Third Amendment) Rules, 2001. ", "(ii) possessed requisite qualifications prescribed for regular appointment as the time of such ad hoc appointment; and ", "(iii) has completed or, as the case may be, after he has completed three years service shall be considered for regular appointments in permanent or temporary vacancy, as may be available, on the basis of his record and suitability before any regular appointment is made in such vacancy in accordance with the relevant rules or orders. ", "(2) In making regular appointments under these rules reservations for the candidates belonging to the Scheduled Castes, Scheduled Tribes, Backward Classes and other categories shall be made in accordance with the orders of the in force at the time of recruitment. ", "(3) For the purpose of sub-rule (1) the appointing authority shall constitute . (4) The appointing authority shall prepare an eligibility list of the candidates, arranged in order of seniority, as determined from the date of order of appointment and if two or more persons are appointed together from the order in which their names are arranged in the said appointment order, the list shall be placed before along with the character rolls and such other records of the candidates as may be considered necessary to assess their suitability. (5) shall consider the cases of the candidates on the basis of their records referred to in sub-rule (4). ", "(6) shall prepare a list of the selected candidates, the names in the list being arranged in order of seniority, and forward it to the appointing authority.\" ", "Apart from the fact that such contention has not been raised before as also in the counter-affidavit filed before us, the provisions of the said rules by no stretch of imagination can be said to be applicable in the instant case. ", "Submission of Mr. to take recourse to Regulation 29 of the Establishment Regulations providing that in regard to the matters not specifically covered by the rules persons appointed to the services of the shall be governed by the regulations applicable generally to the employees is misconceived. ", "The said submission of Mr. is furthermore inconsistent with his submissions, as noticed supra, that even in terms of Section 26-M of the Act, had no power to issue any direction governing appointment in respect of terms and conditions of the services of the employees. Persons who may be appointed to the services of the Board, furthermore, even according to the learned Counsel appearing on behalf of the Respondents, are those who are regular employees having been appointed in terms of the provisions of the Act and the Regulations framed thereunder. We have, therefore, no doubt in our mind that Regulation 29 of the Establishment Regulations which is in Chapter VII of the Act refers to only such regulations and orders which would be applicable to the regular employees. ", "The fact that all appointments have been made without following the procedure or services of some persons appointed have been regularised in past, in our opinion, cannot be said to be a normal mode which must receive the seal of the court. Past practice is not always the best practice. If illegality has been committed in the past, it is beyond comprehension as to how such illegality can be allowed to perpetrate. The and the were bound to take steps in accordance with law. Even in this behalf Article 14 of the Constitution of India will have no application. Article 14 has a positive concept. No equality can be claimed in illegality is now well- settled. [ ,, para 8, , para 13 and , para 30]. ", "In the instant case, furthermore, no post was sanctioned. It is now well-settled when a post is not sanctioned, normally, directions for reinstatement should not be issued. Even if some posts were available, it is for the or to fill-up the same in terms of the existing rules. They, having regard to the provisions of the regulations, may not fill up all the posts. ", "It may be that from the very inception the provisions of the Act and the Regulations framed thereunder had been given a complete go-by. It, furthermore, may be that the had adopted resolution for purported regularization of the services of its employees and employees of Market Committees appointed prior to 1.10.1988. We have, however, noticed hereinbefore that such a resolution on the part of the was beyond its domain. It is also true, as has been contended by Mr. and Mr. , that the power to create posts was with the but the did not exercise its power nor the competent authorities of proceeded to appoint employees on the sweet will of the concerned authorities without in any way bothering for the provisions of the Act and the Rules framed thereunder. It is interesting to note that claimed themselves to be local authorities for the purpose of obtaining exemption from payment of income tax. The officers of the local authorities had a bounden duty not only to act within the four-corners of the statute but having regard to the constitutional scheme in mind. They failed and/ or neglected to do so. As appointments had been made de'hors the rules and without following the procedures known in law and in flagrant violation of constitutional scheme as laid down in Articles 14 and 16 of the Constitution of India, the appointments although might have been made in exigencies of services, they must be held to be wholly illegal and without jurisdiction. An attempt has been made by the Respondents to show that the income of has increased from Rs. 1.92 crore to Rs. 210.88 crores and the quantum of construction work has also increased from Rs. 65.8 crores to Rs. 128.4 crores. It has also been suggested that in November, 2005, the income has increased in the year 2004-05 to Rs. 400 crores and the annual budget of which has been sanctioned is approximately Rs. 350 crores. The availability of funds is not and cannot be a valid ground to make the appointments of persons without proper sanction and creation of posts and cannot be taken to be an excuse to perpetuate illegalities. ", "A contention has been raised by Mrs. that there was no material before the for issuing the impugned instructions insofar as the financial position vis-`-vis the strength of the employees had been taken into consideration. It is not necessary for us to go into the aforementioned question inasmuch as we are herein concerned with the legality and/ or validity of the impugned orders of termination of services and the same having not been done, the appointment of the concerned employees were wholly illegal and without jurisdiction and, thus, void and of no effect. ", "CONCLUSION The upshot of our aforementioned discussions is: ", "(i) The and the Market Committees were bound by the Act, the Rules and Regulations framed thereunder in making appointments. Statutory provisions as also the constitutional requirements were required to be complied with. ", "(ii) The had no jurisdiction to frame any scheme for regularization in the pith of the statutory regulations operating in the field. Any legislation involving appointment or laying down the conditions of service of the employees would require prior sanction of the . ", "(iii) The State of Uttar Pradesh in exercise of its purported power under Section 26-M of the Act could not have issued the directions as it has been done but such a direction cannot be said to be wholly unreasonable. ", "(iv) The State although could not exercise a statutory power beyond the provisions of the statute but the same although might have been done under a misconception of law but was not otherwise arbitrary or mala fide. ", "(v) Availability of vacancies and/ or the fund by themselves would not allow or the to make appointments in flagrant violation of the statutory provisions. Although the direction of the State of U.P. which had been acted upon by the did not have a statutory backing, could not have issued a writ of or in the nature of mandamus as the writ petitioners \u0016 Respondents did not have any legal right. ", "(vi) We are not oblivious of the fact that there may be some employees whose services have been terminated without any rhyme or reason. Mr. appearing on behalf of the has assured us that the shall look into cases of such employees whose termination has been effected beyond the policy decision taken by the although we do not intend to express any opinion as regards such employees. ", "We, however, direct the and to fill up all existing vacancies strictly in accordance with law as expeditiously as possible and preferably within six months from date. While doing so, amongst other eligible candidates, the candidature of the employees whose services have been terminated should also be taken into consideration and in the event, the appropriate authority of or the can relax the age-bar, the same would be done. The respective , however, in the meanwhile, if for exigencies of the work, intend to appoint any person, it may do so. However, post facto approval therefor should be obtained from the . In the offers of appointment which may be issued to such temporary or ad hoc employees it shall be made clear that their appointments would be ad hoc in nature and the same shall be co-terminus with the appointment of regular employees. ", "In view of our findings aforementioned, we are of the opinion that the judgment and order dated 11.8.2000 passed by the learned Single Judge which has been upheld by the Division Bench by its order dated 5.9.2000 does not lay down the law correctly and the judgment and order dated 13.11.2000 passed by a Division Bench of the Lucknow Bench of in Writ Petition No. 1093 (S/B) of 1999 lays down the law correctly. In the result, Civil Appeal arising out of SLP(C) No. 15797 of 2001 is dismissed and other civil appeals filed by the and the State of Uttar Pradesh as also civil appeal arising out of SLP(C) No. 15677 of 2003 filed by the are allowed. However, there shall be no order as to costs."], "relevant_candidates": ["0000013482", "0000013774", "0000026873", "0000033580", "0000037919", "0000093828", "0000219931", "0000307651", "0000499423", "0000507731", "0000571645", "0000574510", "0000662212", "0000732151", "0000763236", "0000804199", "0000947592", "0001031875", "0001271427", "0001305957", "0001354953", "0001374934", "0001463760", "0001637163", "0001867627", "0001890502", "0001923688", "0001932169", "0198954261"]} {"id": "0001150387", "text": ["PETITIONER: STATE OF ANDHRA PRADESH & ANR. ETC. Vs. RESPONDENT: R.V. RAYANIM ETC. ETC. DATE OF JUDGMENT15/01/1990 BENCH: , (CJ) BENCH: , (CJ) PUNCHHI, M.M. REDDY, K. JAYACHANDRA (J) CITATION: 1990 AIR 626 1990 SCR (1) 54 1990 SCC (1) 433 JT 1990 (1) 57 1990 SCALE (1)47 CITATOR INFO : R 1992 SC 232 (30) ACT: Arbitration Act , 1940: Sections 14 , 17 , 30 and 33- -Award-Challenge of--Error apparent on face of record--Arbitrator exceeded jurisdiction--Only in speaking award can look into reasons. HEADNOTE: The respondent-contractor had entered into an agreement with the petitioner for formation of an earth dam. Disputes and difference arose between the parties. A reference was made to the arbitrator wherein the respondent made eleven claims out of which one claim was later withdrawn. The arbitrator gave a non-speaking award in favour of the re- spondent amounting to a consolidated sum of Rs.19.39 lakhs. The respondent flied a proceeding before the to make the award rule of the . The petitioner preferred an application for setting aside the award which was dis- missed. The High dismissed the appeal and the revision of the petitioner. Before this it was contended inter alia that the award purported to grant damages on the basis of escalation of cost and prices, and such escalation was not a matter within the domain of the bargain between the parties. It was also contended that the fact that the arbitrator had taken into consideration the question of escalation would make the award bad because it was not discernible whether he had awarded any amount on account of excalation. Dismissing the special leave petition, this , HELD: (1) In matters of challenging an award, there are often two distinct and different grounds. One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction. In the latter case the can look into the arbitration agreement but under the former It cannot, unless the agreement was incorporated or recited In the award. [58A- ., 2 SCC 38, referred to. 11 55 (2) Only in a speaking award the court can look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. [58D] (3) It is not discernible on the face of the record that the arbitrator has exceeded his jurisdiction in awarding damages on account of escalation. All that the award states is that he has considered the claim on the basis of escala- tion. Such a consideration does not make the award, on the race of it, bad on the ground of error apparent on the face of the record.' [58G-H; 59A-B] (4) The Arbitrator does not state that he has awarded any amount on that account. There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did. [59B-C] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 8094 of 1988. ", "From the Judgment and Order dated 16.3.88 of in (A.A.O.) No. 1152/86 & C.R.P. No. 2728 of 1986. ", " and for the Petitioners. , and for the Respondent. ", "The Judgment of the Court was delivered by , CJ. The respondent was, at all material times, a Class I contractor who had entered into an agreement with for formation of earth dam in gorge portion from chainage 3360 to 3380-M of Raiwada Reservoir Project near Devarapalli village, Chodavaram Taluk, Distt. Visakhapatnam, Andhra Pradesh. Disputes and differences arose between the parties in respect of the aforesaid agreement. A reference was made to the arbitrator as per the arbitrator clause in the agreement between the parties. The respondent made eleven claims claiming various amounts, particulars whereof have been set out by the arbitrator as follows. ", "56 ", "\"I.Payment for forming cross (Rs. in lakhs) 15.89 bund and refund of the (subsequently reduced amount recovered. to Rs.14.89 lakhs) II.Refund of Seigniorage 2.071 (withdrawn) Charges III.Escalation and damages 14.00 IV.Extra load for sand 1.075 (subsequently reduced to Rs.0.575 lakhs). ", "V.Payment for excavation 1.030 under water for probing diaphram wall VI. Compensation for loss 1.500 suffered due to partial prevention by the department. VII. Compensation for loss 2.015 suffered due to non-payment for the work done. VIII.Refund of excess hire 0.730 charges recovered. IX. Overheads 0,960 X. Costs O. 100 ", "XI. (a) Interest on II and VIII at 24% from the date of recovery. ", "(b) On Rs.8.30 lakhs at 24% p.a. from 30.11.81 to 12.5. 3982. ", "(c) Interest at 24% on the award amount except II and VIII from the date of petition.\" ", "The arbitrator gave a non-speaking award dated 27th July, 1985 in favour of the respondent, amounting to Rs.19.39 lakhs, wherein he stated as follows: \"Claim II has been withdrawn by the petitioner himself on the ground it was subsequently refunded by the respondents. On the balance claims (I and III to X) according to my assessment, I award a consolidated amount of Rs.19.39 lakhs to the extent of the claims judged admissible. The respond- ents shall pay Rs.Nineteen lakhs and thirty nine thousand to the petitioner.\" ", "It is, therefore, apparent the claim No. II as mentioned above, had been withdrawn. On the balance claims I and III the arbitrator had awarded a consolidated amount of Rs.19.39 lakhs 'to the extent of the claims judged admissible'. The respondent filed a proceeding before the to make the award rule of the . The petitioner preferred an appli- cation for setting aside the award. By a common judgment dated 21st April, 1985, the Second Additional Judge, City Civil , Hyderabad, dismissed the petition of the peti- tioner for setting aside the award and allowed the judgment in terms of the award. The petitioner preferred an appeal and a civil review petition before the High of Hydera- bad. By a judgment dated 16th March, 1988 the division bench of the High dismissed the appeal and the revision of the petitioner. It held that the non-speaking award of the arbitrator was not liable to be set aside by the . The petitioner has preferred this special leave petition challenging the said decision of the High . The main contention which was sought to be urged on this case was that the award was a nonspeaking award and, as such, was bad. On this ground, on or about 9th December, 1988 this directed that the matter should be taken up along with civil appeal No. 5645 and 5645A of 1986 pending before a larger bench. At that time, the question was pending consid- eration by the Constitution Bench of this . This further directed on 9th December, 1988 that the entire amount of award, if not deposited in the trial court, should be deposited in the trial court within two months from that date, and upon the deposit being made the respondent will be at liberty to withdraw 50% of the amount which has not been withdrawn on furnishing security to the satisfaction of the trial court. It was further recorded that 50% had already been withdrawn. ", "As mentioned hereinbefore, the main contention sought to be urged was that the award being a non-speaking award, was bad in law. In view of the decision of this in etc. v. , Jmt. Today 2 SC 285, this contention is no longer sustainable. It was then contended that the award has pur- ported to grant damages on the basis of escalation of cost and prices; and such escalation was not a matter within the doman of the bargain between the parties and having taken that factor into consideration the award was bad. We have set out the relevant portion of the award. From reading the award, as set out hereinbefore, it is clear that the arbi- trator has considered the claim made on the basis of 'esca- lation and damages' but he has awarded a total sum of Rs.19.39 lakhs insofar as he finds admissible in respect of the claims which the arbitrator has adjudged. It speaks no further. In such a situation it is not possible to contend that there was any exercise of jurisdiction by the arbitrator beyond his competence. It is well-settled that in matter of challenging the award, there are often two distinct and different grounds. One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction. In the latter's case the can look into the arbitration agree- ment but under the former it cannot, unless the agreement was incorporated or recited in the award. An award may be remitted or set aside on the ground that the arbitrator, in making it, had exceeded his jurisdiction and evidence of matters not appearing on the face of it, will be admitted in order to establish whether the jurisdiction had been exceed- ed or not, because the nature of the dispute is something which has to be determined outside the award--whatever might be said about it in the award or by the arbitrator. See the observations of this in ., 2 SCC 38. Only in a speaking award the court can look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator; as to what impelled the arbitrator to arrive at his conclusion. ", "In the instant case the arbitrator has not awarded any amount on account of escalation of costs and expenses. At last the arbitrator has not expressly awarded any amount on the ground of such escalation and if so, what amount, is not apparent on the face of the record. In these circumstances, in our opinion, on the basis of well-settled principles of law such an award, especially in view of the fact that excluding item No. III the remaining items would also be well over Rs.19.33 lakhs, it is not discernible on the face of the record that arbitrator has exceeded his jurisdiction in awarding damages on account of escalation of charges and expenses which were beyond the arbitration ambit. The fact that the arbitrator has considered the claim made by the respondent on account of escalation, does not make per se the award to be bad. ", "Mr. , learned counsel appearing for the appellant contended that the fact that the arbitrator has taken into consideration the question of escalation would make the award bad because it is not discernible whether he has awarded any amount on account of escalation. We are of the opinion that this argument is not open. In case of an error apparent on the face of the record, it has to be established that an item or an amount which the arbitrator had no jurisdiction to take into consideration, has been awarded or granted. That is not apparent on the face of the award in this case. All that the award states is that he has considered the claim on the basis of escalation. Such a consideration does not make the award on the face of it, bad on the ground of error apparent on the face of the record. Indeed, the arbitrator, when a claim is made, has to take that into consideration either for acceptance or rejection of the claim made. The award states that he has taken the claim made, into consid- eration. The award does not state that he has awarded any amount on that account. There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did. ", "In that view of the matter the special leave petition has no merit made must, therefore, fail, and is accordingly dismissed. The petitioners were allowed to withdraw the awarded sum on furnishing security but in view of the deci- sion now rendered, they will be entitled to take back the security. We order accordingly. The application is dismissed with aforesaid directions. ", "R.S.S. Petition dismissed."], "relevant_candidates": ["0000588099"]} {"id": "0001166174", "text": ["PETITIONER: AND CO. Vs. RESPONDENT: SALES TAX OFFICER, HYDERABAD DATE OF JUDGMENT: 21/02/1964 BENCH: , K.N. BENCH: , K.N. GAJENDRAGADKAR, P.B. GUPTA, K.C. DAS SHAH, J.C. AYYANGAR, N. RAJAGOPALA CITATION: 1964 AIR 922 1964 SCR (6) 867 CITATOR INFO : R 1968 SC 445 (7) R 1971 SC 946 (5,6,7,9) F 1973 SC1333 (1,4) RF 1975 SC 198 (10) F 1975 SC1991 (9) RF 1977 SC2279 (57) D 1985 SC 218 (16,19) RF 1986 SC 178 (2) O 1987 SC 27 (3) ACT: Sales Tax-Tax Collected otherwise than In accordance with the Act-Provision enabling the to recover such tax collected-Not within the competence of Legislature--Constitution of India, Schedule VII, Entry 26 and 54 of List II-Hyderabad General Sales Tax Act, 1950 (XIV of 1950), s. 11. 868 HEADNOTE: The appellant collected sales tax from the purchasers of betel leaves in connection with the sales made by it. But it did not pay the amount collected to the . The directed the appellant to pay the amount to the and it thereupon filed a writ petition in questioning the validity of s. 11(2) of the Hyderabad General Sales Tax Act 1950. The main contention of the appellant before was that s. 11(2) of the Act which authorises the to recover a tax collected without the authority of law was beyond the competence of because a tax collected without the authority of law would not be a tax levied under the law and it would therefore not be open to the to collect under the authority of a law enacted under the Entry 54 of List II of the VII Schedule to the Constitution any such amount as it was not a tax on sale or purchase of goods. held that a. 11(2) was good-as an ancillary provision with regard to the collection of sales or purchase tax and therefore incidental to the power under Entry 54, List II. also held that even if s. 11(2) cannot be justified under that entry it could be justified under Entry 26, List II and in the result the writ petition was dismissed. The present appeal is by way of special leave granted by this Court. Held: (i) It cannot be said that was directly legislating for the imposition of sales or purchase tax under Entry 54, list II when it made the provisions of a. 11(2) for on the face of the provisions the amount, though collected by way of tax was not exigible as tax under the law. (ii) It is true that the heads of legislation in the various lists in the Seventh Schedule should be interpreted widely so as to take in all matters which are of a character incidental to the topic mentioned therein. Even so there is a limit to such incidental or ancillary powers These have to be exercised in aid of the than topic of legislation, which in the present case is a tax on sale or purchase of goods. The ambit of ancillary or incidental powers does not so to the extent of permitting the legislature to provide that though the amount collected, may be wrongly, by way of tax is not exigible under the law as made under the relevant taxing entry, it shall still be paid over to the Govern- ment as if it were a tax. Therefore the provision contained in a. 11(2) cannot be made under Entry 54, List II and cannot be justified as incidental or ancillary provisions permitted under that Entry. (iii) Section 11(2) cannot be justified as providing for a for the breach of any provision of the Act. (iv) Entry 26, List II deals with trade and commerce and has nothing to do with taxing or recovering amount realised wrongly as tax. There is no element of regulation of trade and commerce in a provision like s. 11(2) and therefore that section cannot be justified under Entry 26. List II. 869 (v) The provision in s. 20(c) is also invalid as it is merely consequential to s. 11(2). , 1 S.C.R. 549, distinguished. ., S.C.R. 1069, referred to. , (1962) XIII Sales Tax Cases 967. held to be wrongly decided. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 760 of 1962. Appeal by special leave from the judgment and order dated July 16, 1959 of in Writ Petition No. 1123 of 1956. ", ", for the appellant. ", " and , for the respondent. ", "February 21, 1964. The Judgment of the Court was delivered by an appeal by special leave against the order of . The appellant filed a writ petition in questioning the validity of s. 11 (2) of the Hyderabad General Sales Tax Act, No. XIV of 1950, (hereinafter referred to as the Act). The material facts on which the petition was based were these. The appellant acted as agent in the then State of Hyderabad to both resident and non-resident principals in regard to sale of betel leaves. Under the Act betel leaves were taxable at the purchase point from May 1, 1953, by virtue of a notification in that behalf. We are here concerned with the assessment period from May 1, 1953 to March 31, 1954, covered by the assessment year 1953-54. The appellant collected sales tax from the purchasers in connection with the sales made by it on the basis that the incident of the tax lay on the sellers and assured the purchasers that after paying the tax to the appellant, there would be no further liability on them. After realising the tax, however, the appellant did not pay the amount realised to the but kept it in the suspense account of its principals, namely, the purchasers. When the accounts were scrutinized by , this was discovered and thereupon the appellant was called upon to pay the amounts realised to the . The appellant however objected to the payment on the ground that it was the seller and the relevant notification for the relevant period imposed tax at the purchase point, i.e. on the purchaser. This objection was over-ruled and the appellant was directed to pay the amount to . ", "The main contention raised on behalf of the appellant in was that s. 11 (2) of the Act, which authorised the to recover from any person, who had collected or collects, after May 1, 1950, any amount by way of tax otherwise than in accordance with *.he provisions of the Act, as arrears of land revenue, was beyond the legislative competance of the State legislature. The argument was that the Act was passed under Entry 54 of List 11 of the Seventh Schedule to the Constitution, which enables the State legislature to enact a law taxing transactions of sale or purchase of goods. The entry therefore vests power in the State legislature to make a law for taxing sales and pur- chases of goods and for making all necessary incidental provisions in that behalf for the levy and collection of sales or purchase tax. But it was urged that that entry did not empower the State legislature to enact a law by which a dealer who may have collected a tax without authority is required to hand over the amount to , as any collection without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect under the authority of a law enacted under Entry 54 of List II any such amount as it was not a tax on sale or purchase of goods. held s. 11 (2) good as an ancillary provision with regard to the collection of sales or purchase tax and therefore incidental to the taxing power under Entry 54 of List 11. Further took the view that assuming that Entry 54 of List II could not sustain s. 11 (2), it could be sustained under Entry 26 of List H. Consequently the writ petition was dismissed. having refused a certificate to appeal to this Court, the appellant obtained special leave and that is how the matter has come up be-fore us. ", "871 ", "It is necessary to read s. II of the Act in order to appre- ciate the point urged on behalf of the appellant. Section 11 is in these terms:- ", "1 1 (1) No person who is not registered as a dealer &hall collect any amount by way of tax under this Act nor shall a registered dealer make any such collection before the 1st day of May, 1950, except in accordance with such conditions and restrictions, if any, as may be prescribed Provided that Government may exempt persons who are not registered dealers from the provisions of this sub-section until such date, not being later than the 1st day of June, 1950, as Government may direct. ", "(2) Notwithstanding to the contrary contained in any order of an officer or tribunal or judgment, decree or order of a Court, every person who has collected or collects on or before 1st May, 1950, any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so collected by him. and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue.\" It will be seen that s. 11 (1) forbids an unregistered dealer from collecting any amount by way of tax under the Act. That provision however does not apply in the present case, for the appellant is admittedly a registered dealer. Further s. II (1) lays down that a registered dealer shall not make any such collection before May 1, 1950, except in accordance with such conditions and restrictions, if any, as may be prescribed. This provision again does not apply, for we are not concerned here with any collection made by the appellant before May 1, 1950. The prohibition therefore of s. 11 (1) did not apply to the appellant. Then comes s. 11 (2). It applies to collections made after May 1, 1950 by any person whether a registered dealer or otherwise and lays down that any amount collected by way of tax otherwise than in accordance with the provisions of the Act shall be paid over to the Government and in default of such payment, the said amount shall be recovered from such person as if it were arrears of land revenue. It is clear from the words \"other- wise than in accordance with the provisions of this Act\" that though the amount may have been collected by way of tax it was not exigible as tax under the Act. Section 11 (2) thus provides that amounts collected by way of tax though not exigible as tax under the Act shall be paid over to Government, and if not paid over they shall be recovered from such person as if they were arrears of land revenue. Clearly therefore s, 11 (2) as it stands provides for recovery of an amount collected by way of tax as arrears of land revenue though the amount was not due as tax under the Act. ", "The first question therefore that falls for consideration is whether it was open to the State legislature under its powers under Entry 54 of List II to make a provision to the effect that money collected by way of tax, even though it is not due as a tax under the Act, shall be made over to Government. Now it is clear that the sums so collected by way of tax are not in fact tax exigible under the Act. So it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under Entry 54 of List II when it made such a provision, for on the face of the provision, the amount, though collected by way of tax. was not exigible as tax under the law. The provision however is attempted to be justified on the ground that though it may not be open to a State legislature to make provision for the recovery of an amount which is not a tax under Entry 54 of List 11 in a law made for that purpose, it would still be open to the legislature to provide for paying over all the amounts collected by way of tax by persons, even though they really are not exigible as tax, as part of the incidental and ancillary power to make provision for the levy and collection of such tax. Now there is no dispute that the heads of legislation in the various Lists in the Seventh Schedule should be interpreted widely so as to take in all matters which are of a character incidental to the topics mentioned therein. Even so, there is a limit to such incidental or ancillary power flowing from the legislative entries in the various Lists in the Seventh Schedule. These incidental and ancillary powers have to be exercised in aid of the main topic of legislation, which in the present case, is a tax on sale or purchase of goods. All powers necessary for the levy and collection of the tax concerned and for seeing that the tax is not evaded are comprised within the ambit of the legislative entry as ancillary or incidental. But where the legislation under the relevant entry proceeds on the basis that the amount concerned is not a tax exigible under the law made under that entry, but even so lays down that though it is not exigible under the law, it shall be paid over to Government, merely because some dealers by mistake or otherwise have collected it as tax, it is difficult to see how such provision can be ancillary or incidental to the collection of tax legitimately due under a law made under the relevant taxing entry. We do not think that the ambit of ancillary or incidental power goes to the extent of permitting the legislature to provide that though the amount collectedmay be wrongly-by way of tax is not exigible under the law as made under the relevant taxing entry, it shall still be ", "-)aid over to Government, as if it were a tax. The legisla- turd cannot under Entry 54 of List II make a provision to the effect that even though a certain amount collected is not a tax on the sale or purchase of goods as laid down by the law, it will still be collected as if it was such a tax. This is what s. 11 (2) has provided. Such a provision cannot in our opinion be treated as coming within incidental or ancillary powers which the legislature has got under the relevant taxing entry to ensure that the tax is levied and collected and that its evasion becomes impossible. We are therefore of opinion that the provision contained in s. 1 1 (2) cannot be made under Entry 54 of List 11 and cannot be justified even as an incidental or ancillary provision permitted under that entry. ", "An attempt was made to justify the provision as providing for a penalty. But as we read s. 11 (2) we cannot find anything in it to justify that it is a penalty for breach of any prohibition in the Act. Penalties imposed under taxing statutes are generally with respect to attempts at evasion of taxes or to default in the payment of taxes properly levied (see ss. 28 and 46 of the Indian Income Tax Act. 1922). The Act also provides for penalties, for example s. 19 and s. 20 . The latter section makes certain acts or omissions of an assessee offences punishable by a magistrate subject to com position under s. 21 . Section 11 (2) in our opinion has nothing to do with penalties and cannot be justified as a penalty on the dealer. Actually s. 20 makes provision in cl. (b) for penalty in case of breach of s. II (1) and makes the person committing a breach of that provision liable, on conviction by a Magistrate of the first class, to a fine. We are therefore of opinion that s. 11 (2) cannot be justified under Entry 54 of List II either as a provision for levying the tax or as an incidental or ancillary provision relating to the collection of tax. In this connection we may refer to cl. (c) of s. 20 , which provides that any person who fails \"to pay the amounts specified in sub-section (2) of section 11 within the prescribed time\" shall on a conviction by a Magistrate be liable to fine. It is remarkable that this provision makes the person punish- able for his failure to pay the amount which is not authorised as a tax at all under the law, to Government. It does not provide for a penalty collecting the amount wrongly by way of tax from purchasers which may have been justified as a penalty for the purpose of carrying out the objects of the taxing legislation. If a dealer has collected anything from a purchaser which is not authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the dealer. But unless the money so collected is due as a tax, the cannot by law make it recoverable simply because it has been wrongly collected by the dealer. This cannot be done directly for it is not a tax at all within the meaning of Entry 54 of ,List II, nor can the legislature under the guise of incidental or ancillary power do indirectly what it cannot do directly. We are therefore of opinion that s.11 (2) is not within the competence of the legislature under Entry 54 of List II. ", "The respondent in this connection relies on the decision of this Court in (\"). That case in our opinion has no application to the facts of the present case. In that case the dealer had been assessed to tax and had paid the tax. Later in view of the judgment of this Court in (2) the amounts paid in (1) 1 S. C. R. 549. (2) S. C. R. 1069. ", "875 ", "respect of goods despatched for consumption outside the were held -to be not taxable. The dealer then applied for refund of tax, which was held to be not exigible. The refund was refused and and the dealer went to by a writ petition claiming that it was entitled to refund under s. 14 of the Orissa Sales Tax Act (which was the law under consideration in that case). allowed the petition in part and there were appeals to this Court both by the dealer and the . In the meantime, the Orissa legislature amended the law, by introducing s. 14A , in the principal Act, which provided that refund could be claimed only by a person from whom the dealer had actually realised the amount as tax. That provision was challenged in this Court but was upheld on the ground that it came within the incidental power arising out of Entry 54 of List ", "11. That matter dealt with a question of refund and it cannot be doubted that refund of the tax collected is always a matter covered by incidental and ancillary powers relating to the levy and collection of tax. We are not dealing with a case of refund in the present case. What s. II (2) provides is that something collected by way of tax, though it is not really due as a tax under the law enacted under Entry 54 of List II must be paid to the . This situation in our opinion is entirely different from the situation in case(\"). The respondent further relies on a decision of in (2). That decision was with respect to s. 8-B of the Madras General Sales Tax Act of 1939 as amended by Madras Act 1 of 1957. Though the words in s. 8-B (2) were not exactly the same as the words in s. 11 (2), with which we are concerned here, the provision in substance was to the same effect as s. 11 (2). In view of what we have said above, that decision must be held to be incorrect. Lastly, we come to the contention of the respondent that s. 11 (2) is within the legislative competence of the legislature in view of Entry 26 of List 11. That entry deals with \"trade and commerce within the subject to the provisions of entry 33 of List III\". It is well settled that (1) 1 S.C.R. 549. ", "(2) [1962] XIII S.T.C. 967. ", "876 ", "taxing entries in the legislative Lists I and II of the Seventh Schedule are entirely separate from other entries. Entry 26 of List 11 deals with trade and commerce and has nothing to do with taxing or recovering amounts realised wrongly as tax. It is said that s. 11 (2) regulates trade and commerce and the legislature therefore was competent under Entry 26 of List II to enact it. We have not been able to understand what such a provision has to do with the regulation of trade and commerce; it can only be justified as a provision ancillary to a taxing statute. If it cannot be so justified-as we hold that it cannot-we are unable to uphold it as regulating trade and commerce under Entry 26 of List II, There is in our opinion no element of regulation of trade and commerce in a provision like s, 11 (2). ", "We are therefore of opinion that the State legislature was Incompetent to enact a provision like s. 11 (2). We may also add that the provision contained in s. 20(c) , being consequential to s. 11 (2) will fall along with it. In consequence it was not open to the Sales Tax Officer to ask the appellant to make over what he had collected from the purchasers ,wrongly as sales tax. It is not disputed, as appears from the final assessment order of the Sales Tax Officer, that the appellant was not liable to pay the amount as sales tax for the relevant period. We therefore allow the appeal and quash the assessment order dated September 27, 1956 insofar as it is based on s. II (2). The appellant will get his costs in this as well as in the High . ", "Appeal allowed."], "relevant_candidates": ["0000424874", "0001218527", "0001222961"]} {"id": "0001166898", "text": ["JUDGMENT , J. ", "1. 'C. M. A. No. 210 of 1946:-- 'This is an appeal by the plaintiff against the judgment and order in I. A. No. 18 of 1945 in O. S. No. 91 of 1941 on the file of of Devakottah, setting aside an award. O. S. No. 91 of 1941 is a suit for partition instituted by the appellant against his brother defendant 1 and his sons, defendants 2 to 5. The parties belong to community and the family is an affluent one having extensive money lending business in Burma. the father of the plaintiff and defendant 1 died on 20-8-1926 and at that time the plaintiff was an infant aged about six years, ho having been born on 26-9-1920. The 1st defendant who was already associated with his father in the conduct of the business became the manager of the joint family and was in charge of its affairs. On 6-9-1941, the plaintiff sent a notice to defendant 1 calling upon him to effect a division and to render accounts. The demand not having been complied with, the plaintiff instituted the present suit for partition on 24-9-1941. ", "2. According to the plaint the assets of the family consisted of immovable properties in British India and Pudukottai being items 1 to 12 and item No. 13 respectively in schedule A to the plaint; of jewels and moveables described in schedule B and two money lending firms at Minla and Sitkwin in Burma mentioned in schedules D and E. It was further alleged in the plaint that the father of the plaintiff and defendant l had entered large amounts belonging to the. joint family in the names of the members of the family male and female in what are called the 'Thanathu maral accounts', that these amounts were invested in various firms or with individuals and that those investments would come to about 15 lakhs. This was the subject of schedule C to the plaint, and the plaintiff claimed a half share therein. It may be noted that the assets mentioned in schedules C, D and E included also immoveable properties in Burma. The family had endowed various properties for performing charities and these are mentioned in schedule F. The plaintiff prayed that in the scheme of partition provision should be made for the management of the charities by all the parties according to their rights. The plaintiff also charged that defendant 1 had in the course of his management manipulated accounts and misappropriated large amounts and secreted them and it was prayed that he should be called upon to account for them. ", "3. The 1st defendant filed a written statement on 10-11-1941 on behalf of himself and as guardian of his minor sons, defendants 3 to ", "5. He admitted the relationship of the plaintiff and the share to which he was entitled and raised various contentions only with reference to the properties available for division. With reference to immoveable properties mentioned in schedule A he pleaded that items 10 and 11 were dedicated to charity and were, therefore, not divisible and that item No. 3 was being. used as a school. He also mentioned some more properties as available for partition in schedule 1-A to the written statement. As regards the jewels and moveables mentioned in schedule B the defendants contended that it contained several items not belonging to the family and not in existence and a list of the articles which were available for division was set out in Schedule (2). There was a further plea that some of the jewels mentioned in the plaint belonged to the several defendants, to the wife of defendant 1 and to his daughters and as their own and that they were, therefore, not liable for partition. They are separately set out in schedule 2-B to the written statement. With reference to the 'Thanathu maral' accounts, the defendants set out in some detail the history of the amounts and their investments, in para 6 of the written statement. In paras. 8 and 9 it was admitted that these amounts belonged to the family in whosoever's name the investments might stand and it was added that the true value of these assets\" would not be 15 lakhs as mentioned in the plaint but only 9 lakhs including lands purchased in Burma and of the value of 2 1/4 lakhs. Defendants denied that there was any manipulation of accounts or misappropriation of amounts and contended that accounts should be taken only of the assets as they stood on the date of the partition. They also pleaded that the court had no -jurisdiction to divide the immoveable properties situate in Burma. Two other pleas put forward by the defendants may also be mentioned. One is \"that according to the usual practice obtaining among the families of Nattukottai Chettiar community the 1st defendant is entitled to a decent remuneration for the management of the joint family business and properties.\" ", "and the other is that provision should be made for future \"seer murais\" for the sisters and that the remaining assets alone should be divided between the parties. The 2nd defendant who was a major filed a written statement putting the plaintiff to strict proof of the allegations in the plaint and otherwise adopting the written statement of defendant 1. ", "4. The plaintiff then filed a reply statement in answer to the contentions put forward by the defendants. Of the several matters mentioned therein, it is sufficient to refer to one plea which alone is material to the present appeals. The plaintiff pleaded that there was a custom in the Nattukottai Chettiar community for a member of the joint family \"setting up separate family\" after marriage, that monies drawn by him thereafter would be entered in a separate account called 'Pathuvazhi', that at the time of the partition the amounts appearing in the 'Pathuvazhi' account would be debited against the member and that in accordance with this custom the amounts shown in the 'Pathuvazhi' account of defendant 1 should be debited against his share. On those pleadings issues were framed on 13-12-1941 and the suit was posted for trial on 6-2-1942. It underwent several adjournments and on 2-4-1943 the trial actually commenced. It was then referred to arbitration on 6-4-1943 but that proved abortive and the suit was posted peremptorily for trial on 10-12-1943 and the hearing actually commenced on 11-12-1943. Meantime defendant 2 filed on 6-12-1943 an application under Order 8, Rule 9, C. P. C., for leave to file additional written statement. That was numbered as I. A. No. 988 of 1943. Therein defendant 2 alleged \"that the deceased the father of the plaintiff and defendant 1 herein set apart on 25-3-1925 two sums Of money of Rs. 2,10,251-4-0 each separately in the name of the plaintiff and defendant 1 so as to vest the same in them forthwith\" and that these amounts and their accretions were not \"the property of the family liable to division in this suit.\" This application was opposed by the plaintiff on the ground that these allegations were inconsistent with the admissions in the written statement that all monies standing in the '' accounts were joint family properties available for division, that the petition was belated and not bona fide and that the real object of the defendants was merely to drag on the proceedings. ", "5. On 14-12-1943 the Subordinate Judge dismissed this application on the ground that it sought to raise a new and inconsistent plea and that it was really inspired by defendant 1. ", "6. Meantime the trial of the suit went on front day to day and was concluded on 15-12-1943 and judgment was delivered on 29-12-1943. The Subordinate Judge held that the claim of defendant 1 for remuneration for management based upon the practice of the community was not well founded; that the custom pleaded by the plaintiff that amounts drawn by members of the joint family and entered in 'Pathuvazhi' accounts should be debited against them was also not established; that, on the question of the jewels available for partition, the commissioner should determine whether the gifts in favour of the several members pleaded by the defendants were true and were reasonable; that the payment of 'seer murais' was not legal but a moral obligation and that no provision need be made therefor at the division; that items 3, 30 and 11 had not been dedicated to charity and were available for division and that defendant 1 was liable to account only for the assets existing on the date of the division but that accounts should be taken on the principles applicable to accounting by managers of joint Hindu families and that provision should also be made for a proper scheme for the management of the family charities. It was also held on issue No. 13 that the Court had no jurisdiction to direct a division of immoveable properties not situated in British India. With these findings the suit was referred to the Commissioner for ascertainment of the properties available for division and for taking of accounts. Against this judgment appeals were preferred to this Court by all the parties, A. S. No. 115 of 1944 by defendant 2. A. S. No. 199 of 1944 by defendants 1, 3 and 5 and A. S. No. 499 of 1944 by the plaintiff. In A. S. No. 115 of 1944 defendant 2 applied in C. M. P. No. 1402 of 1944 for stay of further proceedings in O. S. No. 91 of 1941 pending disposal of the appeal. On this petition an order was passed on 12-4-1944 that there was no need to stay all proceedings in O. S. No. 91 of 1944 and that it was sufficient if the passing of the final decree alone was stayed. Interim stay which had been granted 'ex parte' was also vacated. The result then was that the stage had been set for an enquiry being proceeded with before the Commissioner and for defendant 1 rendering accounts before him. In fact the Commissioner commenced the enquiry and there were preliminary skirmishes before him, resulting in an order Ex. P. 22 dated 9-6-1944 and the filing of a memo by the defendants on 24-6-1944, Ex. P. 23. ", "7. On 5-7-1944 the plaintiff filed I. A. No. 356 of 1944 for the appointment of a Commissioner for seizing certain account books which. were stated to have been secreted by defendant 1 at his residence. It was ordered on the same day in the presence of the Advocate for defendant 1 and the Commissioner actually went to the place for executing the warrant. At this stage the parties entered into an agreement that the disputes in the suit should be settled by arbitration and that a sum of Rs. 2 lakhs should be paid to the plaintiff on account. That amount was actually paid on 12-7-1944, Ex. P. 9 and a joint application for referring matters in dispute to arbitration was made to the on 18-7-1944, I. A. No. 427 of 1944. That application was signed by the plaintiff, defendant 2 and defendant 1 for himself and as guardian of minor defendants 3 to 5. There was also a petition under Order 32, Rule 7, C. P. C., that the might grant leave to refer the matters to arbitration on behalf of the minor defendants 3 to 5 as it was beneficial to them. On 21-7-1944 the passed an order \"that all matters in dispute in this suit and all matters and proceedings connected therewith\" be referred to the arbitration of of Kandanur and of Kothamangalam. ", "The arbitrators entered on their duties and passed an interim award on 1-8-1944. It is staled therein that all the parties have agreed to the award and signed it in token of their acceptance. In fact the award is signed not only by the arbitrators but also by the plaintiff, defendant 2 and defendant 1 for himself and as guardian of defendants 3 to 5. The final award which is an amplification of the interim award was made on 6-12-1944 & filed into on that date. The defendants being dissatisfied with the award filed I. A. No. 18 of i945 to set it aside under Sections 30 and 31, Arbitration Act . They complained that the agreement dated 18-7-1944 to refer to arbitration was brought about by coercion and undue influence, that there was no proper enquiry, that the arbitrators were partial and biassed and that the award was unjust. The validity of the award was also attacked on two grounds which requires special mention. One was based on the fact that the joint family owned immoveable properties in Burma; and on the principle of private international law that s in one country would have no jurisdiction to adjudicate on title to immoveable property situated in a foreign country or to direct their division. It was urged that as the reference to arbitration comprised all the matters in dispute in the suit and as division of the immoveable properties in Burma was prayed for in the plaint the reference comprehended a subject over which the had no jurisdiction and that, therefore, it was illegal and that in consequence the award was void. Secondly it was contended that the reference to arbitration was opposed to the orders of the High in C. M. P. No. 1402 of 1944. The argument was that stay of passing of the final decree was ordered in A. S. No. 115 of 1944 because defendant 2 had raised a dispute about the partibility of a sum of Rs. 2,10,251-4-0 separately entered in the name of the 1st defendant and that the High intended that this controversy should be settled before the final decree was passed and it was contended that as the reference and the award included this item also it was in contravention of the order in C. M. P. No. 1402 of 1944. ", "The plaintiff opposed this application. He pleaded that there was proper enquiry and that the charges of misconduct were unfounded. He also contended that the reference to arbitration was not open to any objection, that the interim award was consented to by the defendants and that the final award was not liable to be set aside. He accordingly prayed that a decree might be passed in terms of the award. At the hearing of this petition no oral evidence was tendered by the defendants. They were content to rest their case on the documentary evidence and on their legal contentions. The Subordinate Judge held that there was no basis for the charges of misconduct levelled against the arbitrators, that there was due and proper enquiry and that the award was not open to objection on the merits but he agreed with the defendants that the reference to matters in dispute in the suit comprised also questions relating to immoveable properties in Burma and that it was without jurisdiction and that it also included the dispute relating to the sums of Rs. 2,10,251-4-0 entered in the '' account of defendant 1 and the plaintiff, and that that was in contravention of the order of in C. M. P. No. 1402 of 1944 and that therefore the reference was illegal and the award following thereon was void. It is against this order that the plaintiff has preferred C. M. A. No. 210 of 1946. (8) In this apart from supporting the judgment of the below on the two grounds aforesaid, Mr. the learned counsel for the respondents raised a further contention that under Section 21 , Arbitration Act , the power of the to refer matters in a suit to arbitration could be exercised only so long as judgment has not been delivered and that where judgment has been pronounced, as it was in this case on 29-12-1943, that power comes to an end and there is no jurisdiction in the thereafter to refer the dispute to arbitration and that, therefore, the reference dated 21-7-1944 is without jurisdiction. It was also argued that, even if this contention is to be held to be too wide, the reference to arbitration should at any rate be limited to matters still remaining to be decided and could not include what had been already decided by the and as the reference on 21-7-1944 was not so limited it was illegal and so was the award passed thereon. As a branch of the same argument it was contended that before which the appeals against the preliminary decree were pending has seisin of the cause, that that alone had power to refer to arbitration and that the reference by the Subordinate Judge was without jurisdiction. The judgment of the lower was also sought to be supported on the ground that the agreement to refer to arbitration was obtained by coercion, that there was no proper enquiry by the arbitrators and that the award was liable to be set aside on the merits. ", "9. On these contentions four questions arise for determination: ", "1. Is the reference bad on the ground that it involved the determination of title to immovable properties situated in foreign jurisdiction? ", "2. Is the reference bad as being in contravention of the order of in C. M. P. No. 1402 of 1944? ", "3. Is the reference bad on the ground that the Subordinate Judge had lost the power to refer matters in dispute to arbitration by reason of judgment having been delivered on 29-12-1943 or on the ground that the reference comprehended matters which had been decided by the preliminary judgment or that the Court had no jurisdiction by reason of the appeals against the preliminary judgment having been pending in , and, ", "4. Is the award vitiated by any misconduct or irregularity? ", "We shall deal with the above questions in the order mentioned above. ", "10. On the first question the contentions of the respondent will be found on analysis to resolve themselves into three propositions of law. The first proposition is that the have no jurisdiction to determine questions of title to immoveable properties in foreign countries or to effect a division thereof. This rule has long been well established and is not open to question. In -- 'Nachiappa v. Muthukaruppan', AIR 1946 Mad 398 (A), this Court had occasion to consider this question elaborately and the substance of the decision is correctly set out in the headnote which runs as follows: ", "\"Neither under Section 16(b) , C. P. C., nor under the rules of private international law has a jurisdiction to entertain a suit for partition of immoveable properties situate outside British India (for instance in Ceylon) especially where the partible nature of such properties is disputed. It has no jurisdiction even to declare that the said properties are partible joint family properties. Nor has it power to take such properties into its calculation in adjusting the equities between the parties.\" ", "This rule is thus stated in Dicey's Conflict of Laws, (6th Edn., page 141). Rule 20: ", "\"Subject to the exceptions hereinafter mentioned, the has no jurisdiction to entertain an action for (1) the determination of the title to, or the right to the possession of any immoveable property situate out of England (foreign land); or (2) the recovery of damages for trespass to such immoveable.\" ", "There are three exceptions to this rule: Whore there is a contract or an equity between the parties with reference to immoveable property; where the action is one for the administration of an estate or trust and, where the action is for enforcing a maritime lien on a ship, or for damage done to an immoveable property situate out of England. ", "11. The learned advocate for the appellants does not contend that would have jurisdiction either to decide the question of disputed title with reference to foreign immoveable property or to direct division thereof. ", "12. The second proposition is that a which has no jurisdiction to determine any matter in controversy in a suit has no jurisdiction to refer it for determination by arbitrators. This stands to reason because the award becomes effective only when a decree is passed thereon and as the is bound to pass a decree in terms of the award when it is not open to any objection, to recognise a power to refer the dispute relating to foreign immoveables to arbitration would be to assume jurisdiction to pass a decree with reference to such properties. It will be illogical to hold that what a cannot do directly it can do indirectly through the machinery of arbitration. ', AIR 1932 Mad 462 (B) the point for determination was whether an award dealing with the immoveable properties both in British India and in Travancore could be filed in a British Indian under Section 20 of Schedule 2, Civil P. C., which provides that where any matter has been referred to arbitration without the intervention of the and award has been made thereon any person interested in the award may apply to any having jurisdiction over the subject-matter of the award and that the award be filed into . It was held that the subject matter of the award must be wholly within the jurisdiction of the where it is sought to be filed and as a portion thereof was in Travancore, the sub- at Palghat had no jurisdiction to entertain the application. That no doubt was a case of an award pronounced in an arbitration without the intervention of the whereas in the present case the reference is by in a pending action but on principle this cannot make a difference because the award in either case would become valid only when a decree of the is passed thereon. ", "The following observations of would be equally applicable to the present case: ", "\"When an application is made under para. 20, notice is given to the other parties to the arbitration; and under para. 21, when a is satisfied of certain particulars mentioned therein, the shall order the award to be filed and shall proceed to pronounce judgment according to the award. Upon judgment so pronounced, a decree shall follow, and no appeal shall lie from such decree except in so far as the decree is in excess of or not in accordance with the award. Thus the judgment should be in accordance with the award; and the decree that should follow should be in accordance with the judgment. Therefore the decree should be in accordance with the award. The award deals with immoveable property outside British India. The decree also, therefore, should deal with immoveable property outside British India. Has the in British India jurisdiction to pass such a decree? 'Prima facie', not.\" ", "In -- 'Ladharam v. Rallaram', AIR 1928 Lah 730 (C) it was held: ", "\"If a is not initially competent to entertain a suit in respect of the dispute which is the subject matter of reference to arbitration, it cannot pass a decree on an award made as a result of such reference by the parties whether before the suit was instituted or during its pendency. In the latter case the is incompetent to refer the matter to arbitration.\" ", "The appellant did not seriously contest the soundness of this position. ", "13. The third proposition of law is that where the reference is invalid in part it is invalid 'in toto' and the award based on such a reference cannot be split up into two parts and upheld in so far as it relates to what could be validly referred, and rejected only as regards what could not be. The decision in--' ', AIR 1935 Mad 1053 (D) is relied on in support of this position. In that case the reference to arbitration comprised matters in dispute in suit as well as matters outside the suit. It was held that the reference was illegal and that, therefore, the entire award must be rejected, and the decision reported in -- ' ', AIR 1921 Mad 709 (E) wherein it was held that \"an award under an invalid reference being itself invalid gives no rights either as an award or as a compromise\" was followed. The reason for this rule is not quite obvious. It may be that it will be difficult to disentangle the valid portions from the invalid portions in an award in a partition action or partnership suit. In such a case the award must fail in its entirety. That was the case in -- ' ', AIR 1925 PC 293 (F) which was a partnership action and the reference comprised matters in dispute in suit and other matters. The award was found to be inseparable and was, therefore, rejected. After quoting the observations of as he then was, that the arbitration cannot at the same time relate to matters within the jurisdiction of the and matters without jurisdiction, Lord observed as follows: \"Their Lordships desire to reserve their opinion upon the question whether there may not be exceptions to that comprehensive statement.\" ", "It does not appear why if the reference and the award consist of distinct and severable parts the valid portions should not be upheld. It is unnecessary to deal with this aspect of the matter further because the learned advocate for the appellant is prepared to argue his case on the footing that if the reference includes matters beyond the jurisdiction of the it should be rejected 'in toto'. His contention is that all these propositions of law have no application to the facts of the present case because there was no dispute about title to immoveable properties in Burma and there was no claim for their partition at the date of reference to arbitration. It has already been mentioned that the title of the plaintiff to a half share in the Burma assets including immoveable properties was unequivocally admitted by the defendants in their written statement and, therefore, there was no question of title in dispute to be adjudicated by the s. As for division of the immoveable properties in Burma, it is true that the plaintiff prayed generally for partition of the joint family properties but the defendants contended that the had no jurisdiction to divide the properties in Burma and on that contention issue 13 was raised. It runs as follows: ", "\"Whether this has jurisdiction to divide immoveable properties of the joint family in Burma?\" ", "The Court held by its judgment dated 29-12-43 that it had no jurisdiction. Against the preliminary decree, the plaintiff filed A. S. No. 499 of 1944 but in the appeal he did not challenge the correctness of the finding on issue 13. The decision on this issue had thus become final. The plaintiff had accepted the decision of the trial Court and was content to leave it at that. Thus the position at the date of the reference was that the title to immoveable properties had been admitted and the question of actual division had been finally ruled out. Therefore the reference to arbitration of all the matters In dispute did not comprehend any matter which the Court could not have determined. It involved no adjudication of title to foreign immoveable properties; nor was there any subsisting prayer for division thereof. We are, therefore, of opinion that the reference cannot be held to be illegal on the grounds urged by the respondent. ", "14. It is next contended that apart from the reference the award settled questions of title to immovable properties in Burma and that it was, therefore, void. Paragraphs 1 and 2 of the award relate to properties in Burma including immoveables while para. 3 of the award relates to the immoveable properties in Pudukottah. Paragraph 1 runs as follows: ", "\"After communications are restored to Burma, the plaintiff and the defendants have to divide the firms in Burma at the places Minhla and Sitquin belonging to them and the lands, godowns, homes, gardens and other properties, items, bank deposits, jewels, moveables, all assets, etc., and the subsequent income attached thereto into two halves and the plaintiff has to take one half and the defendants the other half.\" ", "The award, it will be seen, does not purport to divide the immoveable properties in Burma. It expressly reserves the division for a future and a convenient date. It merely records that the plaintiff has to take one half share and the defendants the other half. In para. 2 are set out the various adjustments to be made in the final settlement of accounts with reference to the Burma assets but they do not as such relate to any immoveable properties. It is merely provided that the assets are to be taken equally by the plaintiff and by defendants 1 to 5. Paragraph 3 deals with the immoveable properties in Pudukottah and the award expressly states, \"since the aforesaid property is situated in Pudukottah state, it has not been divided having regard to the good and bad qualities of the soil. If necessary the plaintiff and the defendants shall have it divided in equal halves later on when required.\" ", "It also provides that the plaintiff and the defendants shall enjoy them in equal halves. It is argued on behalf of the respondents that the award purports to give a half shape each to the plaintiff and to the defendants in all the Burma assets including the amounts entered in the ' account of the plaintiff and defendant 1 and their accretions; that these assets included also immoveable properties; that I. A. No. 988 of 1943 raised the question of the divisibility of these assets and though it was rejected on 14-12-1943 by the Subordinate Judge it was pending decision in A. S. No. 115 of 1943 in and that, therefore, the question of title to the immoveable property in Burma was in dispute at the date of the reference. ", "That would be correct if the question of the divisibility of the assets raised in I.A. No. 988 of 1942 could be regarded as a matter in dispute in the suit but I. A. No. 988 of 1943 had been dismissed and so long as that order stood the question sought to be raised therein was not a matter in controversy in the suit. The pleadings in the suit contain an admission of the plaintiff's title to these assets and unless and until the additional written statement of defendant 2 is ordered to be received there was no dispute in the suit with reference to foreign immoveables. The fact that the order in I. A. No. 988 of 1943 was challenged in appeal has not the effect of altering or enlarging the scope of the suit so as to comprehend a dispute in respect of title to foreign immoveables. The question in appeal was not whether those properties are divisible but whether defendant 2 should be permitted to raise that question. There is, therefore, no force in this objection. ", "15. It is further contended that under the terms of the award the title of the plaintiff as well as that of the defendants to a half share in the foreign assets including immoveables has been recognised and declared; that such a decision has a force and operation independent of the admissions of the parties on which it is based; that, unlike admissions, the effect of the declaration is to conclude the rights of the parties and that, therefore, it is hit by the rule of private international law, that there is no jurisdiction to declare title to foreign immoveable properties. But it is only a declaration following upon adjudication by the , of disputed title to foreign immoveables, that is beyond its jurisdiction and where there is no adjudication, there is no declaration such as is prohibited by the principles of private international law. It is not incompetent either to the arbitrator or to the to record an admission of title to foreign properties by the parties and to incorporate it in the award or in the decree. In this connection it will be, useful to refer to decisions under Section 17(b) , Registration Act , which provides that non-testamentary instruments which purport to declare title to immoveable properties should be registered. The precise meaning of the word \"declare\" in that section has frequently come up for judicial consideration. In -- 'Sakharam Krishnaji v. Madan Krishnaji', 5 Bom 232 (G) the question arose whether a deed which acknowledged that there had been a partition required registration under Section 17(b) , Registration Act , on the ground that it declared the rights of the parties. Holding that it did not come within Section 17(b) observed as follows: ", "\"It implies a declaration of will not a mere statement of fact and thus a deed of partition, which causes a change of legal relation to the property divided amongst all the parties to it, is a declaration in the intended sense; but a letter containing an admission, direct or inferential, that a partition once took place does not 'declare' a right within the meaning of the section. It does in one sense declare a right; that is, the existence of the right is directly or indirectly stated by the writing, but it is not the expression or declaration of will by which the right is constituted.\" ", "This passage was cited with approval by in -- ' ', AIR 1932 P C 55 (H). After observing that the decision in -- '5 Bom 232' (G) had been followed in -- 'Jiwan Ali Beg v. Basamal', 9 All 103 ( ', AIR 1923 Mad 621 (J), Viscount observed as follows: ", "\"Their Lordships have no doubt that this track of decisions is right. Though the word \"declare\" might be given a wider meaning, they are satisfied that the view originally taken by West J. is right. The distinction is between a mere recital of fact and something which in itself creates a title.\" ", "16. In -- ' v. ', AIR 1947 P C 117 (K) there was an award in respect of a claim of under a mortgage deed and it provided that in default of payment of the amount due the amount might be realised through civil by the sale of all the properties. This award was made a rule of and a decree was passed in terms thereof. The decree was not registered and the question was raised in execution that as it declared rights to immoveable property it was not admissible under Section 17(b) , Registration Act . held that the provision in question in the award merely declared the legal consequences and did not by itself create any right in the immoveable properly and that, therefore, it did not require to be registered under the Act. ', AIR 1943 Mad 811 (L) the parties to the suit entered into a compromise on the basis of the rights under a will and a decree was passed in terms of the compromise. It was held by that the decree did not declare any right within the meaning of Section 17(b) , Registration Act and that it was admissible without registration. We are of opinion that on the some principle it should be held that the award in question did not declare any rights to immovable properties in Burma. Mr. argued that even if there was in the award an affirmation of title to foreign immoveable properties that was only incidental and that such incidental declarations are not opposed to any principle of private international law. He is supported in this contention by the following passage from Halsbury's Laws of England, Vol. VI, page 220, para 269. The passage runs as follows: ", "\"Where, however, it is only necessary to determine the question of title incidentally an action relating to rights in respect of a foreign immoveable will lie in England.\" ", "We are satisfied that the award in this case does not adjudicate upon any disputed title to foreign immoveables and that its validity cannot be impugned on this account. ", "17. We may add that it was also suggested that the reference comprised not merely matters in difference in the suit but also \"all matters and proceedings connected therewith\" and that that went beyond the scope of the suit. This is clearly untenable as the other \"matters and proceedings\" are merely in relation to the matter in dispute in the suit, and is in the nature of the final prayer for general relief in the plaint. ", "18. We shall now deal with the second question whether the reference to arbitration contravenes the order in C.M.P. No. 1402 of 1944. It is not easy to discover the basis for this contention. The order of stayed only the passing of the final decree in the action. The reference to arbitration is in no sense the passing of the final decree or even the making of the award. The utmost that could be said is that before passing a decree in terms of the award the order in C. M. P. No. 1402 of 1944 might have to be withdrawn. That, however, does not bar the jurisdiction of the to refer the matters to arbitration or the jurisdiction of the arbitrators to make an award. It is, therefore, not liable to be set aside as in contravention of the order in C.M.P. No. 1402 of 1944. That order far from staying all proceedings in the below directed that they should go on and the interim stay was also vacated for that purpose. There is nothing to prevent the parties themselves settling the matters by compromise notwithstanding this order, and likewise there is nothing to prevent them from agreeing to have their disputes settled by arbitration. As for inclusion of 'Thanathumaral' accounts of defendant 1 find the plaintiff within the scope of the arbitration that would be in accordance with the pleadings in the suit &, therefore, within the jurisdiction of the arbitrators. The filing of A. S. No. 115 of 1944 did not as already stated affect the scope of the suit or of the reference to arbitration. Moreover the order in C. M. P. No. 1402 of 1944 such as it was, was for the benefit of defendant 2 and possibly of the other defendants. That could be waived by them and they having expressly agreed to the reference on 18-7-1944 and again to the interim award on 1-8-1944 it is not open to them to raise any objection on this score. For all the above reasons this objection must be overruled. ", "19. The third objection which is the one that has been most strenuously pressed on us is based on the language of Section 21 , Arbitration Act . which is in these terms: \"Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the for an order of reference.\" ", "20. The argument for the respondents is that the possess no inherent jurisdiction to refer disputes in pending actions to arbitration, that it is a power which must be expressly conferred by statute, that Section 21 , Arbitration Act , is the enactment which confers such a power on the ; that under the terms of that section the power to refer to arbitration can be exercised only \"at any time before judgment is pronounced\"; that it cannot be exercised thereafter; that in this case on the pronouncement of the judgment on 29-12-1943 the power of the Subordinate Judge to make a reference came to an end. This position is sought to be reinforced by a reference to Section 23(2) , Arbitration Act , which enacts that the shall not deal with matters which have been referred to arbitration except in the manner and to the extent provided in the Act and this, it is argued, indicates that the matter is still capable of adjudication by the and would be inappropriate at a stage when there has been a decision by the . ", "21. It may be conceded that the power to refer to arbitration must he expressly conferred by statute. In -- 'Abani Bhusan v. Hemchandra', AIR 1947 Cal 93 (M) where the point for determination was whether an appellate Court had the power to refer disputes to arbitration, there is the following observation in the judgment of : ", "\"Whatever the proper view might be, we are bound to apply the law as it stands and as the power of referring a case to arbitration is not one that is inherent in a , we must hold that in the absence of any express provision the appellate is not competent to exercise it.\" ", "The question, therefore, is whether on the terms of Section 21 the reference dated 21-7-1944 is 'intra vires', of the powers of the and that has to be decided on a construction of the language of Section 21 in the light of well established principles. ", "22. That section provides that where 'in a suit' all the parties agree that matters in difference 'in the suit' shall be referred to arbitration that might be done at any time before judgment is pronounced. What is the meaning of the word judgment in this context? Judgment is defined in Section 2(9) , C. P. C. as the statement given by the Judge of the grounds of a decree or order; and that is wide enough to cover judgments on applications for injunction, appointment of a receiver and so forth; and also judgments in the suit on such questions as court-fees payable on the plaint. It is not contended before us that these are judgments within the meaning of Section 21 , Arbitration Act . It is, therefore, clear that judgment in Section 21 does not bear the same sense which it has in the Civil Procedure Code. To ascertain its true import we must turn to the language of the section itself. Section 21 contemplates that \"any matter\" in dispute in the suit can be referred to arbitration; and therefore a judgment which bars the jurisdiction of the to refer \"any matter\" to arbitration must be a judgment which does not leave \"any matter\" undecided. In this context, therefore, it can only mean a judgment which finally decides all matters in controversy in the suit; it does not mean an interlocutory judgment which still leaves any of the matters in dispute undecided. Findings on issues, though called judgments are not judgments in this sense; nor are preliminary judgments, even though they decide some of the matters finally, because there are still matters to be decided in the suit. For the purpose of Section 21 , Arbitration Act , nothing is a judgment which does not put an end to the suit and so long as an action is pending there can be reference under that section. ", "23. It is well settled that a preliminary decree does not put an end to the action. The suit continues until the final decree is passed, the preliminary decree being only a step in the process of the passing of the final decree. ", "This is clearly enacted in the explanation to the definition of decree in Section 2 , C. P. C., which runs as follows: ", "\"A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. ", "It is final when such adjudication completely disposes of the suit.\" ", "It has been repeatedly held that the provisions of the Civil Procedure Code applicable to pending suits apply to suits in which there has been a preliminary but not a final decree. In -- 'Jadunath Roy v. Parameswar Mallick', AIR 1940 P. C. 11 (N) had to deal with a partition suit in which a party applied to be impleaded after the preliminary decree and to have his rights adjusted in the final decree. In holding that the application was maintainable, observed as follows: ", "\"Their Lordships fully agree with the observation made by the learned Subordinate Judge who passed the final decree in his order of 8th May 1934 whereby he allowed the objections of the appellants to the Commissioner's report on the ground that a partition suit in which a preliminary decree has been passed is still a pending suit and the rights of parties who are added after the preliminary decree have to be adjusted at the time of final decree.\" ", "The appellant also relied on the following observations occurring in -- ' ', 22 Cal 425 at p. 432 (O), \"In the present case what the parties applied for was a partition by metes and bounds of the property which was the subject-matter of the suit. The partition has not yet been made and until the partition has been made and the final decree pronounced it could not be said that any decree in terms of the last paragraph of Section 396 has been passed in the case. The order that is made and which was made in this case under the first paragraph of Section 396 has no doubt the force of a decree but the question that we have to consider is whether the proceedings that are taken subsequent to such order being passed for the purpose of effecting a partition are proceedings in the suit itself, or proceedings in execution of the decree. We think that they are proceedings in the suit itself, & not proceedings in execution of the decree.\" ", "The question has frequently come up as to whether Order 23, Rule 3 is applicable to adjustments made after the preliminary and before a final where a suit has been adjusted the shall decree in a suit. Order 23, Rule 3 provides that order such adjustment to be recorded and, for this provision to apply, there must be a suit pending. In -- ' v. ', AIR 1945 P C 152 (P), the question was raised whether an adjustment made after the preliminary decree in a mortgage suit came within Order 21, Rule 2 which provides that the adjustment of the decree should be certified and if not certified within time it could not be taken into account. held that the case was governed by Order 23, Rule 3 which applies to pending suits and not by Order 21, Rule 2 which applies to execution of decrees. Lord observed: ", "\"Their Lordships see no qualification to the wide terms of the Order (Order 23, Rule 3) nor any grounds for limiting its application. Admittedly the suit continues until the final decree is passed and there is no time for recording the agreement arrived at as there is under Order 21. Rule 2.\" ", "In -- ' v. ', AIR 1935 Pat 385 (Q) which was also a case of an adjustment after the preliminary decree in a mortgage suit had been passed the following observations occur; ", "\"As I have already said, it was conceded by Mr. that, if Order 21, Rule 2 has no application the application is within the jurisdiction of the Subordinate Judge under Order 23, Rule 3 and in my opinion he was right in making that concession. The word \"suit\" in that rule is not used in any narrow sense but having regard to the division of the subject matter in the various orders and rules the word \"suit\" is applied to the proceedings from the beginning of the plaint up to the time when an executable decree has been obtained.\" ", "' ', AIR 1936 All 9 (R) is also a case of adjustment in a mortgage suit after the preliminary decree was passed. ", "In applying Order 23, Rule 3 the observed as follows: ", "\"This is a necessary corollary of the view taken by this Court that a preliminary decree does not terminate the suit, which continues till a final decree is passed. Once a suit is finally disposed of, Order 23, Rule 3 cannot have any application; but so long as the suit is pending it is open to the parties to enter into a compromise or otherwise adjust their differences.\" ", "24. The position being well established that the action is pending until a final decree is passed, it follows, that there is jurisdiction in the to refer the matters in dispute to arbitration until the final judgment is pronounced. ", "25. Mr. contended that there were reasons of policy why the should not have the power to refer matters in dispute to arbitration after a preliminary judgment is pronounced. He argued that it would be inconsistent with the dignity of a that its decision should be reviewed by a tribunal of laymen. He relies on certain observations occurring in -- 'Juggeswur Das v. Kritartha Moyee Dossee', 12 Beng L R 266 (FB) (S). There the question was whether under the Civil Procedure Code, Act 8 of 1859, the appellate had the power to refer disputes to arbitration. Under Section 312 of that Act the parties may apply to a \"at any time before the final judgment for an order of reference.\" of the Calcutta High held that the appellate had no power under this section to refer disputes to arbitration. The decision as such is not material to this case but the following observations occurring in the judgment of are relied on for the respondents: ", "\"As pointed out by the Chief Justice, if parties are allowed to refer matters to arbitration after a case has been finally disposed of by such a proceeding might tend to bring the lower into contempt.\" ", "It may be noted that observed at page 271 that the word final judgment was used in antithesis to the preliminary judgment in the suit, which means that there could be a reference to arbitration after a preliminary judgment. ", "In this Court it was held in -- 'Sankaralingam Pillai', 3 Mad 78 (T) that the appellate Court could refer the matter to arbitration with the consent of the parties. That no doubt was a decision under Act 10 of 1877 but the following observations occurring in that judgment are relevant for the purpose of this question. ", "\"Entertaining all respect for the opinions of the learned Judges of at Calcutta by whom the case in '12 Beng L R 266 (S)' was decided, we are not convinced by the reasons given by them for holding that an appellate Court might not, with consent of the parties, refer the matters in dispute in the appeal to arbitration.\" ", "The decision in '3 Mad 78 (T)' was followed in -- ' v. ', 12 Cal 173 (U) and -- ' v. ', 18 Cal 507 (V) and until the enactment of the Arbitration Act of 1940 the jurisdiction of the appellate to refer disputes to arbitration was not disputed. Thus it is impossible to discover any principle of public policy in negativing the power to refer matters which had been decided by a , to arbitration. It is true that under the Arbitration Act , 1940, there is authority for holding that the appellate has no power to refer disputes to arbitration. Vide -- ' v. ', AIR 1947 All 304 (W) and 'AIR 1947 Cal 93 (M)'. That, however, does not affect the point now for consideration. ", "26. On the other hand it has been the longstanding practice of the to refer partition suits and partnership actions to arbitration even after the preliminary decree is passed. It would cause a revolution in the existing practice if it is to be held that there is no power in the to refer such matters to arbitration. ", "27. Mr. the learned advocate for the appellant referred to a number of cases in which there was reference to arbitration after preliminary decree had been passed and he relied on them as supporting the position that the power to refer to arbitration could be exercised until the suit terminated by the passing of a final decree. In the case in '22 Cal 425 (O)' already referred to there, was a reference to arbitration in a partition suit after the preliminary decree and that was relied on as saving limitation. ', AIR 1939 Pat 526 (X) the facts were that in a partition suit there was a preliminary decree and thereafter an award was made by certain arbitrators effecting a division of the properties. A decree was passed in terms of that award. The question that arose for determination was whether the appeal against that decree was competent. In holding that the appeal did not lie observed as follows: ", "\"It is next contended that the present ease did not fall within the second schedule of the Civil Procedure Code at all because this schedule is intended to apply to those cases only where a decree is based wholly upon the award of the arbitrators, whereas in the present case the final decree is based partly upon a preliminary decree and partly upon the award of the arbitrators. This contention must be negatived on the short ground that there is nothing in the Code to prevent the parties from referring the matter in difference between them to arbitration at any stage of the suit and that it is not quite correct to say that the final decree which has been passed in the suit is not wholly based upon the award of the arbitrators. It is true that the parties agreed among themselves as to their respective shares and this agreement was incorporated in the preliminary decree but the division of the properties which is the subject of the final decree was wholly based upon the award of the arbitrators.\" ", "In -- 'Ramlal v. ', AIR 1922 All 173 (Y) the facts were that a decree passed by the Subordinate Judge of Ajmer was taken up in appeal to and was there confirmed. Thereafter under Section 17 , Ajmer Courts Regulation the case was referred to and it was there pending. At this stage the parties filed an application in tae asking for a reference of the disputes to arbitration. That was done and resulted in an award. The question was whether there was a valid reference to arbitration. The fallowing observations occurring at page 94 are relied on by the learned counsel for the appellant as supporting his contention: ", "\"In our view the best analogy is that of a preliminary decree and a final decree, and pending the final order of On receiving the answers of to the reference, the suit was still, to adopt the language of the arbitration schedule in the Civil Procedure Code 'pending judgment'..... In our opinion, in spite of the reference to and not in any way because of the reference to , or because of anything which said, this was an arbitration in a suit in which the parties agreed that the matters between them should be referred to arbitration. By para. 1 of Schedule II, Civil P. C., they were, at any time before judgment was pronounced, at liberty to apply to the which ordered the order of reference.\" ", "28. ', AIR 1944 P C 83 (Z) which was cited on behalf of the appellant there was a reference to arbitration by the appellate Court and in upholding the validity of the award passed thereon observed as follows: ", "\"Their Lordships are of opinion that the subject of the submission to arbitration clearly was the whole dispute and not merely the matter of the appeal, and the order of the referring the matter confirms this view. In their Lordships' opinion there is no ground for impugning the validity of this award.\" ", "That was not a case of a reference of a suit to arbitration after the passing of a preliminary decree and the observations quoted above are, therefore, not apposite to the present case. ", "29. The learned advocate for the appellant also called in aid the analogy of Order 23, Rule 3. C. P. C., under which it has been held that there can be a compromise of the matters in the suit after the passing of a preliminary decree. The decision in 'AIR 1936 All 9 (R)' has already been referred to. ", "30. In -- 'Lalta Prasad v. Kedarnath', AIR 1936 Oudh 320 (ZA) the facts were that there was a preliminary decree in a partition suit and against that there was an appeal pending. Then there was a compromise between the parties and the of first instance passed a decree in terms thereof under Order 23, Rule 3. It was held that as the suit was pending in that until a final decree was passed it had jurisdiction to pass the decree under Order 23, Rule 3 C. P. C. There is no reason why the same principle should not apply to references to arbitration, It must, therefore, be held that the order of reference dated 21-7-1944 was within the jurisdiction of the Sub and that the award could not be impeached on the ground that it was without jurisdiction. ", "31. It is next argued that in any event the reference should have been limited to the matters still remaining to be decided and that as it included all the matters in the suit including those already decided it was illegal. It is contended on behalf of the appellant that the award is confined to the matters not decided by the preliminary decree that the decisions of the that foreign immoveables could not be divided, that defendant 1 was not entitled to remuneration, that no contribution need be made for 'Seer murais' had all been adopted in the award and that the objection of the respondents had no foundation on the facts of the case and that, therefore, the question did not arise for decision. But it is clear from the award that the arbitrators intended to & did decide all the matters in dispute in the suit. The interim award sets out the several proceedings pending between the parties including A. S. No. 115 of 1944. In para. 43 the award deals with the subject-matter of I. A. No. 988 of 1943 and A. S. No. 115 of 1944. Paragraph 54 provides that A. S. No. 115 of 1944, A. S. No. 119 of 1944 and A. S. No. 499 of 1944 should not be prosecuted and it also decides the question of costs in the appeals. It cannot, therefore, be said that only those matters which were not decided by the preliminary decree were dealt with by award. The reference is certainly general. ", "32. Even on the basis that the reference and the award were not limited to matters left undecided by the preliminary judgment, the question still remains whether they are for that reason illegal. No authority has been cited in favour of such a contention. Nor is there anything in the language of Section 21 , Arbitration Act , to support it. Under that section all the matters in dispute in the suit could be referred to arbitration without any limit or qualification, provided the three conditions mentioned there-in are satisfied, namely, that the reference relates to matters in dispute in the suit, that all the parties interested agree to the reference and the suit has not been disposed of by judgment which, as already held by us, must mean that the suit is pending. There is no further limitation under the section that only those matters in dispute could be referred which have not been decided by the . Once the conditions laid down in the section are satisfied the jurisdiction of the to refer the entire subject-matter of the suit to arbitration is absolute and unqualified. The reference is accordingly not open to objection on this ground. ", "33. It is finally argued that as appeals against the preliminary decree were pending in it was only that that could refer the dispute to arbitration and that the Subordinate Judge had no jurisdiction \"to make the reference. This contention again is not sought to be supported either by reference to the language of Section 21 , Arbitration Act , or by any authority. There is nothing in Section 21 to limit the power of the to refer matters to arbitration because of the pendency of an appeal; so long as the action is pending in that its jurisdiction to refer is complete. It is contended that it would be inconvenient for two s to have concurrent jurisdiction to refer the same matters to arbitration; that it will result in a conflict of jurisdiction, and that there might even be inconsistent awards. But if it is a question of deciding which of two s has the power to refer disputes to arbitration there is no reason why the choice should fall on the appellate and not on the trial . It is contended that in respect of matters decided by the preliminary judgment the jurisdiction vests only with the appellate and not with the of first instance but it can equally be contended that in respect of matters not covered by the preliminary judgment the jurisdiction is exclusively vested in the trial and not in the appellate . Mr. on behalf of the respondents relied on certain observations occurring in -- '. v. ', 7 All 523 at p. 526 (ZB) as supporting his contention. There the suit had been finally disposed of by the Subordinate Judge and an appeal against that decision was pending in the District . The appellate made an order calling upon the Subordinate Judge to submit revised findings on certain issues and the hearing on those issues was pending in the sub-court. Then there was a reference to arbitration and the question was whether it was valid. Holding that it was invalid, observed as follows: \"I am of opinion that when a has disposed of a case and passed a decree upon it, the jurisdiction assigned to the ceases, so far as that case is concerned, and can be revived only in the manner and to the extent which the law prescribes.\" This observation could have no application when the suit itself has not been finally disposed of. If anything it supports the position of the appellant. Mr. referred to the following passage in the judgment of in -- ' ', AIR 1915 Mad 1223 at p. 1230 (ZC) \"When, therefore, a suit had been disposed of by the first and an appeal is preferred, the of appeal is seized of the cause and has the powers and duties of the first .\" ", "When once it is conceded that the action is pending until it is finally disposed of by a final decree, the where it is pending has the power under Section 21 , Arbitration Act , to refer the matters in dispute to arbitration. This objection must also be overruled. 34. It now remains to deal with the last objection of the respondents that the award is bad on the merits on account of coercion on the part of the plaintiff and misconduct of the arbitrators. 35. The respondents put forward five charge under this heading: ", "1. It was argued that defendant 1 was not a free agent in consenting to the reference to the arbitration and that he signed Ex. P. 12 under coercion and undue influence. The only basis for the charge is that defendant 1 had fixed the marriage of his daughter for 25-8-1944, that the plaintiff having obtained an order for the appointment of a Commissioner to take possession of papers in the possession of defendant 1 on 5-7-1944, defendant 1 consented to the arbitration with a view to avoid humiliation and disgrace. It is difficult to see how any charge of coercion or undue influence could be laid on these facts. The 1st defendant has not gone into the box. The interim award which was pronounced on 1-8-1944 was signed by all the defendants. There were also repeated extensions by the of the time for the filing of the award by the arbitrators. Vide Ex. D. 15 series. This charge must, therefore, be rejected as not made out. ", "2. The second charge relates to the decision in para. 50 of the award that defendants 1 and 2 should pay Rs. 1,75,000 to the plaintiff on account of charges of mismanagement by defendant 1. The contention of. the respondents is that the judgment decided that the plaintiff was not entitled to call for general accounts and that, therefore, the decision of the arbitrators was opposed to the finding of the . But a reading of the preliminary judgment shows that though the held that defendant 1 was not liable to render an account generally nevertheless he would have to account for monies traced into his hands and not proved to have been spent for the joint family purpose in accordance with the principles laid down in -- ' ', AIR 1924 Mad 458 ( ', AIR 1037 Mad 127 at p. 129 (ZE). There is no basis for the contention that the plaintiff was not entitled to relief if misappropriation was established and the award of the arbitrators is, therefore, within their province and further this finding was embodied in para. 17-A of the interim award, Ex. P. 15, which recites that defendants 1 and 2 agreed to this and this award is signed by them. The final award only incorporates what had been decided in para, 17-A of the interim award, with the consent of the parties. There is no substance in this objection. ", "3. The next objection is that the decision of the arbitrators on the question of jewels was opposed to the judgment in the suit which had declared that the Commissioner should decide whether the gifts of the jewels in favour of the several members of the family pleaded by the defendants was true and was binding on the plaintiff. In para. 19 of the award the arbitrators state, \"We have determined that all the jewels comprised in Schedules 2, 2-a and 2-b belong to the family in common and no one has any separate right to them.\" ", "That is to say they have rejected the story of the gifts of the jewels to the several members of the family. This is within the directions given in the preliminary judgment. Moreover it is stated in the award that both the parties have accepted this decision. This statement of the arbitrators has not been controverted by any evidence on behalf of the defendants and must be taken to be correct. -- 'In re: ', AIR 1924 Mad 274 (ZF). There were some complaints about the valuation of the jewels but that is not a ground for setting aside the award. ", "4. The next complaint is about the directions in para. 56 of the award. It is provided therein that in respect of taxes payable by the family in Burma and in India the accounts had been taken till that date; that if there is any refund of the taxes with reference to the prior period the plaintiff will be entitled to half share therein and if any further tax is payable for that period the defendants alone shall be liable to pay the same and that in respect of this obligation the defendants should execute an indemnity bond in favour of the plaintiff. It was contended that the arbitrators whose authority extended to only to effect a division exceeded the same by providing for indemnity bond being executed. The Subordinate Judge has rightly held that this is incidental to effecting a partition and that the arbitrators had not exceeded their authority. Vide para. 28, We agree with this finding. It may also be noted that it is recited in para. 56 that the defendants consented to it. ", "5. The last objection raised by the defendants is with reference to the award of interest on the amount payable to the plaintiff from 15-8-1944 to 5-12-1944. The arbitrators state that they have settled the accounts as on 15-8-1944 and the award of interest from that date is within their authority. This objection must, therefore, fail. ", "36. Mr. appearing on behalf of defendants 3 to 5 argued that the award was not binding on defendants 3 to 5 because defendant 1 who acted as their guardian 'ad litem' in the suit did not protect their interests; that he was negligent in not raising the plea that the amounts entered in the '' account of defendant 1 belonged only to him and to his branch and that, therefore, the award was not binding on them. The interests of defendant 1 were not adverse to that of defendants 3 to 5 and there is no sound reason for holding that defendants 3 to 5 are not bound by the action of defendant 1. ", "37. Thus all the objections put forward by the defendants to the validity of the award fail and there should accordingly be a decree in terms of the award. The order of the lower Court is, therefore, set aside and this appeal is allowed and it is directed that a decree be passed in terms of the award. The appellant is entitled to his costs throughout. The memo of objection is dismissed without costs. ", "38. On our finding that the award is valid and that a decree be passed in terms thereof it would be really unnecessary to discuss the questions arising in A. S. No. 115 of 1944, A. S. No. 199 of 1944 and 499 of 1944 and C. M. P. Nos. 3273 and 3274 of 1944 and C. M. A. Nos. 661 and 49 of 1947, and C. R. P. No. 1247 of 1946. But as the matter is one which might be taken in appeal to we have considered it desirable to hear all these appeals and record our findings thereon. ", "39. 'A. S. No. 115 of 1944':-- This is an appeal preferred by defendant 2 in O. S. No. 91 of 1941 on the file of , Devakottah, against the- preliminary judgment and decree dated 29-12-1943. The facts leading up to this' appeal have been set out in our judgment in C. M. A. No. 210 of 1946. The only point that arises for decision in this appeal apart from the contention in A. S. No. 199 of 1944 is about the correctness of the order in I. A. No. 988 of 1943 whereby the Subordinate Judge declined to receive the additional written statement sought to be filed by defendant 2. The plaintiff had alleged in paras. 6 and 8 of the plaint that his father had invested joint family funds in the vilasams of the members of the family, male and female and claimed his half sharp in these amounts and in the accretions thereto. The 1st defendant who is the father of the appellant and manager of the joint family admitted this claim. The 2nd defendant filed a written statement adopting that of defendant 1. After the suit had been pending long and had been posted peremptorily for trial, defendant 2 filed I. A. No. 988 of 1943 seeking to raise a new and inconsistent plea. In the additional written statement which was proposed to be filed it was alleged that the two sums of money of Rs. 2,10,251-4-0 each were separately set apart in the name of the plaintiff and defendant 1 and that \"by reason of the said transactions the said two sums constituted the individual and separate monies of the respective branches of the plaintiff and the 1st defendant and that they are not the property of the family, liable to division in this suit.\" ", "This is inconsistent with the admission made by defendant 1 that those amounts with their accretions are divisible among all the members of the family and that the plaintiff is entitled to a half share therein. The plaintiff opposed this application on the ground that it was inconsistent with the previous statement, that it was belated and that it was defendant 1 who was behind this application. The Subordinate Judge accepted this contention and dismissed the application. ", "The only point for determination in this appeal is whether there is ground for permitting defendant 2 to put forward his present case. It may be mentioned that even the additional written statement does not disclose any legal plea. The parties belong to a family which has been carrying on hereditarily money lending business & all the assets in the hands of would be joint family properties. That being the position, merely setting; them apart in the '' accounts would not destroy their character as joint family funds. No partition is pleaded for the obvious reason that this formed only a small portion of the joint family assets and all the other properties continued to be joint. No gift is pleaded; of course gift of joint family properties would he void. In fact monies were set apart not merely in the names of the plaintiff and defendant 1 but also in the names of the female members of the family. The additional written statement is open to the objection that it contains really no substantial plea and that it is sought to be filed only with the object of delaying the hearing of the suit. ", "40. The 2nd defendant was a minor, a few years old in 1925, when the 'Thanathumaral' accounts were opened. He could have had no personal knowledge about this matter. It is not stated how he came by any new materials throwing fresh light on the question. It is obvious that defendant 1 finding himself concluded by his own admissions has set up defendant 2 to put forward a plea which is as unsubstantial as it is belated. It may also be mentioned that defendant 2 has endorsed his consent to the interim award, Ex. P. 15, in which it is expressly stated that the parties agreed to divide all the 'Thanathumaral' amounts which were the subject-matter of I. A. No. 988 of 1943 and A. S. No. 115 of 1944. We are satisfied that there is no substance in the contentions sought to be raised in I. A. No. 988 of 1943 and that the Subordinate Judge has exercised a sound discretion in dismissing this application. There is no other point in this appeal and it is accordingly dismissed with costs. ", "41. 'A. S. No. 199 of 1944':-- This is an appeal preferred by defendants 1 and 3 to 5 against the preliminary decree in O. S. No. 91' of 1941, , Devakottai. Four contentions were urged in this appeal. ", "1. The 1st defendant pleaded in para 22 of the written statement that according to the usual practice obtaining in the Nattukottai Chetti community the manager is entitled to a decent remuneration for managing the joint family business and the properties. Issue No. 10 relates to this question. The witnesses examined on the side of the plaintiff deny the existence of any such custom. D. W. 1 and D. W. 2 are examined on the side of the appellants for proving the custom. D. W. 1 stated that he received some amount as remuneration for the management of a business under an agreement with his brother. He does not speak to any custom prevalent in the community. D. W. 2 merely stated that at a partition between him and his brothers the panchayatdars gave him three jewels towards his remuneration. The custom pleaded is a very unusual one and runs counter to the fundamental conceptions of joint family. The evidence in support of this is absolutely worthless and was rightly rejected by the lower . This point must be found against the appellants. ", "2. It is next contended that the plea of the appellants with reference to the jewels should have been accepted. The Subordinate Judge did not negative the claim of the appellants to the jewels but only directed the commissioner to enquire into the truth of the gifts and about their reasonableness if they were true. The learned advocate for the appellants has been unable to urge anything against the soundness of this finding. It will accordingly be confirmed. ", "3. The next contention of the appellants relates to item No. 3 in schedule A. There is a school which is being conducted at that place and the appellants want that this charity might be continued. This is opposed by the plaintiff. There is not even a plea in the written statement that this property had been dedicated to charity. This contention must accordingly be rejected. ", "4. Lastly it is contended that it is customary for members of the family to make presents to sisters and that joint family properties, sufficient for that purpose might be set apart and the balance alone be divided. This is not a legal obligation and the parties might be left to make their own presents as and when occasion arise in accordance with their willingness and ability. has rightly rejected this claim. In the result this appeal fails and is dismissed with costs. ", "(42) 'App. No 499 of 1944': This is the appeal of the plaintiff against the preliminary decree in O. S. No. 91 of 1941 on the file of , Deyakottai. The contention raised in this appeal is again a question of custom. It is pleaded in para. 5 of the reply statement filed by the plaintiff in these terms: ", "\"The plaintiff states that according to the usage and custom of the Nattukottai Chettiars the drawings made by or the expenses incurred on behalf of the individual members of the family after setting up separate family by such member are debited to his individual account so as to equalise the shares of the members of the family in the joint family properties and to be adjusted at the time of the partition.\" ", "The separate accounts in the names of the members are called 'Pathuvazhis' and the point for determination is whether there is a custom that the amounts standing as debits in the 'Pathuvazhi' accounts could be debited against the shares of the particular members at the time of the partition. The evidence in the case shows that there is a practice in the Nattukottai Chettiar community for a member of the family to live separately after marriage and whatever he draws from the joint family is thereafter entered in a separate account called 'Pathuvazhi'. The custom as pleaded by the plaintiff is that all the amounts drawn by him and entered in the 'Pathuvazhi' account should be debited against him. The 'Pathuvazhi' account includes amounts drawn by the members for their maintenance. If the custom pleaded by the plaintiff is to be accepted in its entirety it would mean that in a joint family members have no right of maintenance after marriage, a position which is inconsistent with the fundamental character of the joint family. The evidence adduced on behalf of the plaintiff does not, however, go so far. ", "43. In Castes and Tribes of Southern India by , (Vol. V page 253) there is the following extract from an article of late \". bearing on this custom: ", "\"The first and chiefest aim of is to make as much money as possible. He does not regard usury as a sin.....As soon as he marries, his father gives him a separate home, or rather compels him to live separately, though often in the same house as his parents. This makes him self-reliant, and produces in him a desire to save as much money as possible. He is given a certain allowance out of the paternal estate, but if he spends more, he is debited with the excess amount.\" ", "The existence and scope of this custom came up for decision in 'A. S. Nos. 212 and 214 of 1928' on the file of this . held that the custom was not made out. With reference to the evidence adduced in support of this custom he observed: ", "\"This bold bid at revolutionising the law of partition among Nattukottai Chetties by giving a novel meaning to their thrifty method of upkeeping family accounts failed miserably.\" ", "He went on to hold that the monies spent for the maintenance, marriage and other legitimate joint family expenses could not be debited against the members though they were entered in the 'pathuvashi' accounts. , however, differed. On this difference of opinion the matter came before who proceeded to decide the case on the footing that the custom had not been made out and granted a decree on the basis of an agreement of the parties. ", "44. The next document relied on is Ex. P. 4(a) which is an award of the panchayatdars in O. S. No. 3 of 1936 on the file of , Devakottah. There is a provision in the award that the 'Thanathu' drawings off each party should be debited against them. P. W. 7 is examined in connection with this but he is unable to remember what amounts were drawn in the 'Pathuvazhi' account. If amounts unrelated to joint family expenses had been entered they could be rightly debited against the members. The same criticism applies to Ex. P. 6 which is the report of the commissioner appointed in O. S. No. 73 of 1937. The evidence is not clear as to whether the amounts drawn on the 'Pathuvazhi' account were legitimate joint family expenses or not. The report of the commissioner in O. S. No. 64 of 1935 Ex. P. 8 does not appear to be a case of 'Pathuvazhi' at all and is of no help in determining the point now at issue. The real evidence in support of this custom is vague, indefinite and discrepant. P. W. 1 stated that certain amounts were adjusted by agreement. He also deposed that the eldest member of the family who manages the properties of the family is not entitled to any remuneration. P. W. 3 stated that when amounts are spent on individual needs they would be drawn on 'Pathuvashi' account and debited to individuals; they would be in accordance with Hindu law. His evidence does not support the contention that even monies spent for maintenance could be debited against the member. P. W. 4 also stated that whenever monies were required by a member the purpose would be mentioned, that it it is a joint family purpose it would be shown as expenses and if it is a personal expense it would be debited to personal account. This completely destroys the case of the plaintiff. P. W. 5 deposed to his having settled several disputes but he is unable to remember the nature of the disputes or other details. ", "45. It will be seen, therefore, that there is no definiteness or certainty about the custom pleaded. According to one version the manager will fix the amount payable to each member when he begins to live separately and it is only the balance that will be debited against him. According to another version the whole of it will be debited. Them again according to one version the joint family expenses would not be debited but only the personal expenses. ", "According to another version all of them will be debited. In this state of evidence and having regard to the fact that the custom is one which is radically opposed to the fundamental conception of Hindu joint family it must be held that the plaintiff has not discharged the burden which lies heavily on him of establishing the custom. That is the conclusion of the Subordinate Judge and we agree with it. In the result this appeal also will be dismissed with costs. ", "46. 'C. M. P. Nos. 3274 and 3273 of 1946': -- In A. S. No. 115 of 1944 the plaintiff has filed C. M. P. No. 3274 of 1946 under Order 23, Rule 3, C. P. C., for an order that the interim award, Ex. P. 15, dated 1-8-1944 be treated as a compromise and a decree passed in terms thereof. It was held in -- ' v. '. AIR 1928 Mad 1025 (ZG) by a Full Bench of this Court that an award in respect of which a decree could not be passed could be treated as a compromise and a compromise decree passed under Order 23, Rule 3, C. P. C. This was followed in a case arising out of the Arbitration Act of 1940-- ', AIR 1945 Mad 294 (ZH). In -- 'Indramani v. ', (ZI), the decision in -- 'Arumugha v. ', AIR 1945 Mad 294 (ZH) has been dissented from and it has been held that unless the award is assented to after it is pronounced it cannot be treated as a compromise under Order 23, Rule 3, C. P. C., but defendant 2 having consented to the interim award, the plaintiff argues that a decree may he passed as against him under Order 23, Rule 3, C. P. C. In our opinion he is entitled to such a decree. ", "47. 'C. M. P. No. 3273 of 1946': This is for a similar decree in A. S. No. 199 of 1914. For the reasons already given the plaintiff is entitled to a decree against defendant 1. But as defendants 3 to 5 were minors at the time when the interim award was pronounced and as no sanction of the was obtained under Order 32, Rule 7, C. P. C., for sanctioning the compromise on their behalf, no decree could be passed as against them under Order 23, Rule 3, C. P. C. There can be an order in C. M. P. No. 3273 of 1946 only in these terms. ", "48. 'C. M. A. No. 661 of 1948 and 49 of 1947': These two appeals are against application filed in O. S. No. 91 of 1941 for passing a decree under Order 23, Rule 3 on the ground that the defendants had consented to the interim award. For the reasons given in C. M. P. Nos. 3274 and 3273 of 1946 these appeals will have to be allowed and a compromise decree passed in terms of the award under Order 23, Rule 3 against defendants 1 and 2. ", "49. 'C. R. P. No. 1247 of 1946':--The only order that need be passed on this revision is that defendant 1 do put into copies of the correspondence for inspection by the plaintiff. He is not bound to show them to the plaintiff before despatching them. ", "50. There will be no order for costs in C. M. P. No. 3274 of 1946; C. M. P. No. 3273 of 1946: C. M. A. No. 661 of 1946; C. M. A. No. 49 of 1947 and C. R. P. No. 1247 of 1946. No orders are necessary in C. M. P. No. 7076 of 1947 and C. M. P. No. 1122 of 1947. C. M. P. No. 5329 and 5330 of 1948 are ordered."], "relevant_candidates": ["0000071061", "0000144022", "0000146082", "0000340907", "0000412295", "0000602698", "0000931634", "0000956415", "0001145991", "0001176710", "0001567557", "0001802048", "0001873470", "0001909076", "0001986979"]} {"id": "0001173221", "text": ["CASE NO.: Appeal (civil) 2158 of 1999 PETITIONER: RESPONDENT: AND ORS. DATE OF JUDGMENT: 08/04/1999 BENCH: S. SAGHIR AHMAD & R.P. SETHI JUDGMENT: ", "JUDGMENT 1999 (2) SCR 518 The Judgment of the Court was delivered by , J, Leave granted. ", "Notice was issued to the respondent to show cause why the compensation amount in favour of the appellant be not further enhanced. Respondent No. 3-New India Insurance Company has filed the counter affidavit submitting therein that there is not documentary evidence to show that the appellant was at all employed anywhere at the time of the accident and in the absence of proof regarding his income; the amount of compensation cannot be enhanced. It is submitted that as the appellant had claimed Rs. 2,90,919.15 and was awarded Rs. 2,25,000 with interest, there is no justification for him to claim enhancement of the compensation amount. ", "The facts giving rise to the filling of the present appeal are that the appellant who was 23 years of age had met with an accident and received severe injuries causing damages to his spinal cord. He remained under treatment for about 90 days and became permanently disabled. He had preferred a claim for Rs. 63,00,9i19.15 from the owner, driver and the insurer of the vehicle for injuries suffered by him in the motor accident. (hereinafter referred to as `the ') after appreciating the evidence led in the case held that the appellant was travelling as an agent of the construction firm when he met with the accident and awarded him a compensation of Rs. 1,64,037 with interest at the rate of 10 per cent per annum. Both the appellant and the insurance company preferred appeals before which were disposed by the impugned judgment holding the appellant entitled to Rs. 2.25.000 as compensation payable with interest at the rate of 12 per cent per annum instead of 10 per cent as awarded by the tribunal. It is not disputed that the appellant had met with a road accident in which he was seriously injured, underwent operations of his spinal cord/ kidney number of times and has become invalid for all \u0007practical purposes for the rest of his life. The appellant had claimed that his income was Rs. 2,000 per month at the time of accident when he was 23 years of age. Me had prayed for applying the multiplier of 55 for granting him compensation in lieu of loss of income which he would have earned in the absence of accident in which he has admittedly been totally incapacitated. The learned counsel appearing for the insurance company submitted that there was no proof of his income and that he was not proved to have been employee Of his father in the work where the vehicle was begin utilised at the time of the accident. It is however, hot disputed that at the time of the accident, the appellant was assisting his father in the construction work of at Deposit No. 40 in Township of Kailash Nagar for renewing of fencing m front of residential and non-residential quarters providing C.C. coping with glasses for compound walls of Kailash Nagar when he met with the accident. He has claimed his income to be Rs. 2,000 per month. The appellant, a young man cannot be disputed to be contributing and augmenting the income of his father. Some guess work has to be applied while assessing the loss. This Court in ) pvt. Ltd & Ors., 1 SCC 551 had held :\u0007 \"Broadly speaking while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which is capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant: (i) medical attendance; (ii) loss of earning of profit up to the date of trial; (iii) other material loss. So far non-pecuniary damages are concerned, they may include: (i) damages for mental and physical shock, pain suffering, already suffered or likely to be suffered in future; (ii) damages to compensate for the loss of amenities of the life which may include a variety of matters, i.e. on account of injury the claimant may not be able to walk, ran or sit; (iii) damages for the loss of expectation of life, i.e., on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.\" ", "It was further held that whenever a tribunal or court is required to fix the amount of compensation in cases of accident, it involves some quash work, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused. However all such elements are required to be viewed with objective standards. White assessing damage, the court cannot base its opinion merely on speculation or fancy though conjectures to some extent or inevitable. ", "In the instant case, the appellant has been awarded Rs. 94,037 as expenses incurred on medical care, Rs. 20,000 for special diet and expenses for attendant during treatment. For his becoming permanently disabled and paraplegic on account of the injury and damages caused to his spinal cord, the appellant, who admittedly has been held permanently incapacitated has been granted only Rs. 1,00,000. We are of the opinion that the appellant was right in claiming his income at Rs, 2,000 per month while working with his father at the time of the accident and even if we apply the multiplier of 16, he is entitled to the claim of Rs. 3,84,000 on account of loss of expectation to life besides disappointment, frustration and mental stress particularly when he has to keep a permanent attendant to look after him in his rest of life. Adding this amount to the amount of Rs. 1,14,000 to which the appellant has rightly been held entitled on account of expenses incurred on medical care and for the pain sufferings during the period of treatment, the appellant is entitled to a total sum of Rs. 4,98,000 which we round up to Rs. 5,00,000 inclusive of costs of litigation. The aforesaid amount is liable to be paid by the respondent-insurance company as was held by In the result, this appeal is allowed by modifying the order impugned holding the appellant entitled to a compensation of Rs. 5,00,000 with interest at the rate of 12 percent per annum as awarded by No further costs."], "relevant_candidates": ["0001794525"]} {"id": "0001197053", "text": ["JUDGMENT , J. ", "(1) What arises-for consideration in this case is the nature and extent of rights of the plaintiff in printed pencil boxes/cartons in which the pencils are being sold by the plaintiff. ", "(2) In this suit as well as in this application it is contended that the plaintiff is the registered owner of trademark bearing registration No. 324515-B dated 13th April, 1977. It is asserted that the said trade mark is valid, subsisting full legal force. Thattrade'rnark is in reject of fountain pens, pencils, ball pens and refills therefore, 'the registered trade mark in terms of the certificate, of registration in two words . ", "(3) It is also asserted in the application, as also in the suit that the plaintiff is the owner of copyright in the floral design that appear on its printed cartons/boxes and that the design. thereon, in \"original artistic work\". It is also asserted that the respondents are passing off their goods as goods, of the plaintiff. ", "(4) It is asserted that the plaintiff is one of the largest manufacturer of art and stationery materials in India and have been exclusively marketing the goods of its manufacture for the past 40 years; that since the year 1977, the plaintiff has been manufacturing and selling their Camlin Flora Pencils in distinctive and artistic cartons. ", "(5) That distinctiveness, which is claimed, is that the pencil in question has got colour combination of white, pink and green,. that there are .two' strips of while and green next to each other at the rear portion of the pencil, that here is a floral design on the skin of the pencil, which is unique. The unique design comprises of array of pink flowers with a green leaf on the white background. It is also asserted that the same repetitive floral pattern, appears on the cartons. . ", "(6) The cartons, which .have been annexed Along with the plaint, as stated above, is a printed carton made of some kind of paper board. ", "(7) It .is also asserted that on account. of extensive, use of the words Camlin Flora on the pencil and the. carton /box vast reputation has been acquired, which denote .a high quality product originating exclusively from the applicant/plaintiff. ", "(8) It is asserted that the defendants are using deceptively similarly decorated pencil and carton,, which are deceptively similar to .the pencil-decorated with the flowers, and the-cartons which are, and have been in use, ofthe applicant/plaintiffs. ", "(9) It is asserted that the applicant had got a copyright in the artistic logo script of trade mark Flora as original artistic work. ", "(10) It is also asserted the application that that Camlin 's the house mark 'of the applicant, regarding Camlin being the house mark of the petitioner there have 'been no arguments urged during the course of hearing, and this question does not need consideration in this application. It may however be mentioned that Trade and Merchandise Act does riot define the word 'House Mark'. The concept of House Mark is not to be found anywhere except in an administrative orders of Comptroller General in 47RPC, 37, 43 L. 34 which cannot be given any recognition in India, in view of absence of such a concept in the statutory provisions. If is possible that at a future date when the industrialisation of India has resulted in Mega Corporations conglomerates that House Mark may need statutory/legal recognition by Courts. . ", "(11) The defendants contended that the application is not maintainable on account of unreasonable delay and laches on the part of the applicant/plaintiff and that the defendants' cartons bearing the word Captain Elora with numbers 1180 in connection with their pencil have been in use since 1-4-1981, and that the suit filed in 1985 is without any explanation of the delay Of four years. It is also asserted by the defendants that they are the registered owners of the carton \"entitled\" Captain Elora which is (registered at No. A-36907/82 under the Copyright Act , 1957 and that registration is still valid. It is asserted that- Elora and Flora are distinctive words. The word Flora indicates flowers. The word Elora refers to the famous caves. ", "(12) It is also asserted that the cartons used by the defendants and the plaintiff are absolutely distinct and different and there is no similarity between the two. . ", "(13) It is asserted that the defendants hold. registration of the .cartoons under-the Copyright Act but the plaintiff do not hold any such copyright. ", "(14) It is also asserted that the suit. which has been Sled, 58 false, frivolous and vexatious and is an attempt on the part of the plaintiff to put the defendants out of business and the market. ", "(15) What is required to be determined in this case is whether any copyright can exist in 'the subject-matter in which the same. is claimed. That is to say whether there is any copyright in the printed cartons in which the pencils of the plaintiff and defendants are sold (16) In order to determine whether copyright exists in the cartons, it is necessary to keep in view the legally .accepted meaning of 'copyright'. In essence. in law, copyright means the exclusive right to make copies of any copyrightable subject- matter in any tangible material form. Section 13 of the Copyright Act, 1957 which deals with subject-matter of copyright reads as under : ", "\"1.Works in which copyright subsists: (1) Subject to the provisions of this section and the other, provisions of this Act, copyright shall subsist throughout India in the following classes, of work, that is to say (a) original literacy, dramatic, musical and artistic works; (b) cinematograph films; and (c) records. (2) Copyright shall not subsist in any work specified m sub-section(1), other than work 'to which the provisions of section 40 gr Section 41 apply, unless (i) in the case of a published work, the work is first published in India, or where the work is first published outside India, the. author is at the date of such publication or in a case where the author was dead at that date, was at the time of his death, a citizen of India; (ii) in the case of an unpublished work other than an architectural work of art, the author is at the date of the making of the work a citizen of India or domiciled in India; and (iii) in the case of an .architectural work of art, the work is located in India. Explanation. In the case of a work of joint authorship, the conditions conferring copyright specified in this sub-section shall be satisfied by all the authors of the work. ", "(3)Copyright shall not subsist:- (a) in any cinematograph film a substantial part of the film is an infringement of the copyright in any other work; (b) in any record made in respect of a literary dramatic or musical work, if in making the record, copyright in such work. has been infringed. (4) The copyright is a cinematograph film or a record, shall not affect the separate copyright in any work in respect of which or a substantial part of which, the file, or as the case may be, the; record is made. (5) In the case of an architectural work of art, copyright shall subsist only in the artistic character and design and shall not extent to processes or methods of construction. ", "(17) In this case, it is contended that the machine printed carton which are in question in which pencils are sold is covered by Section 13 of the Copyright Act, inasmuch as the carton is an \"original artistic work\"; it is further contended that being a original artistic work copyright subsists, therein, and the plaintiff is entitled to sue for infringement of the copyright in the cartons. . ", "(18) An examination of the carton would show that it is made out of some cardboard like material which has got printed matter thereon, the printed matter is .printed on the carton in different colours. The colours which are visible on the carton are green, white, red and black. Besides the printed colours on the cartons, what is also visible to the eye, is some printed words which have been impressed upon the carton. The printing of the carton has-been done by utilising any of the various printing processes by which multicolor impression can be applied to cardboard like paper. ", "(19) A look at the plaintiff's cartons also indicates that it contains the following words: - \"FROM The Makers Of Camel Art Materials Contents of this box marked with price. Flora 72HV Hexagonal Unbreakable Pencils Product NO. 1130\" It is also written on the carton that the (an illusturstration) referred to indicate a perfect bond of lead and wood to give an unbreakable point in normal use. (20) A look at the carton of the defendant shows that in addition to the various colours printed thereon there are the following words printed on it: \" Hb Hexagonal Deluxe Pencils Product No. 1180\" ", "(21) It is clear that both the cartons are printed products, produced by a printing machine. My view that the carton is product of some kind of printing machine is strengthened by the fact that even in the plaint, it is asserted, the goods which are manufactured by the plaintiff are produced in very large quantities and the statement of sales of Camlin Flora Pencil indicate that pencil worth Rs. 1,24,65,552.00 were sold in the year 1982. Since each carton contains a small number of pencils it would riot b.e possible to accept that any process other than a printing process involving skilful use of hands, alone lias been utilised ia the making up of these multicolored cartons in which the pencils are being sold. ", "(22) In any case, it 'is clear to me that the cartons/boxes filed Along with the plaint could not have been made by an. artist utilising his skills with a paint and brush, (in addition to calligraphic skill). What is, therefore, to be determined Is whether sufficient skill and labor has been expended upon the cartons/ boxes to enable it to be covered by Section 13 of the Copyright Act. ", "(23) I had conveyed it' to counsels, during 'the coarse of arguments, that the card board appeared to be mechanically reproduced article, and that in order to qualify for being covered under the Copyright Act , the carton had to be 'original artistic work, that is to say, the carton must originate from an author who must-have expended his skill and labor upon it. This was put to the counsel for the plaintiff, in view ofthe judgment in 1964 Volume I All England Law Reports, 465 (equal to 1964 (1) Weekly Law Reports, 273) .(1). In that case , relying upon the observations in an earlier judgment, said that in Copyright law, -'original' means that which originates from the athor. The observations relied upon by contained in (1894) Ac 335 which reads as under:--- \"THE word 'original' does not in this connexion mean that the work must be the expression of original or incentive thought, Copyright Act s are not concerned with the originality of ideas, but with the expression of -thought, and in the case of literary work. with in print or writing. The originality which the expression of thought in .print or writing. The originality is required relates to the expression of the thought. But the Act dots not require that expression must be in an original or novel from but that the work must not be copied from another work that it should originate from the. author. ", "(24) In order, therefore, to be covered by the Copyright Law, any work in which copyright is claimed .must originate-from the author. It also necessarily means, as indicated in the aforesaid passage, that the work in which, copyright is claimed must be something which has not been copied by the author from any one else. It is only when the work has not been copied, that it can be said that it has 'originated' from the author. ", "(25) As .1 have observed above, the cartons/boxes in question winch have been filed Along with the plaint, appear to be mechanically reproduced one. Because it is mechanically reproduced, I and of the view that it cannot be said that any skill or \"labor has been expended upon the allegedly artistic carton which has been-filed in , as the same has sheen produced by mechanical actions of.a printing machine, and not by skill and labor having been expended upon them by any natural person. It is .only natural persons who are, because of expenditure of their personal skill and labor upon any work, entitled to protection under the Copyright Law. [1924 75; 1960 (13 53(2). ", "(26) Because of the provisions of Order 7 Rule 14 (1) of the Civil Procedure Code, it is essential that the documents sued upon be filed with the plaint, in ; and 'document' in this case is printed boxes/cartons, filed in In view of Order 7 Role 14, necessarily, the document sued upon is the machine printed carton which is filed in by plaintiff. Inasmuch as the only document which has been filed is the machine printed carton, it must be taken, that the document produced in is the original, and, it, has to be determined whether copyright can subsist therein under the Copyright Act . ", "(27) The counsel for the plaintiff relied upon a number of judgments wherein it was held that labels are copyrightable. It was urged on a parity of reasoning, that mechanically' printed boxes/cartons are copyrightable. He has referred to 1971 R.P.C. 57 (3): Charles & Co. Ltd. v. , wherein .it was said that there was a copyright in a label. In that case, it was contended by counsel for the plaintiff company that \"the label is an artistic work within the meaning of Section 3 of the Copyright Act\". Justice , who, decided the case, said that the label was an artistic work. He found \"that label is admittedly an engraving, the design and layout of the label seems to me to be sufficiently distinctive to merit the description \"original\" within the meaning of Section 3 \". The learned Judge relied upon a judgment reported as 1959 R.P.C. 83 (4).: . .it appears to me that there was an admission in 1961 R.P.C. 57 (5) that .the label in question in that suit was an \"engraving\". By virtue of the provisions of Section 2(1) of the Indian Copyright Act, 1957, engraving is an artistic work. The label in that case, if it was an \"engraving\" would also be covered by the protection available to \"engraving\" under the Indian Copyright Act . According to to engrave is \"to cut with a graver on wood, steel etc.; to cut into, to impress deeply to form on represent by engraving\". The boxes/cartons in question in this suit are not an \"engraving\". It was stated by counsel for the plaintiff that carton in the instant suit was printed by \"Silk spinning process' and look and feel of the carton.shows that nothing has been \"engraved\" thereon. A product of silk printing process cannot 'be an engraving or a print from engraving. In my view, any print obtained from either an offset printing process or by a letter press or in combination of the various printing cess including silk printing process cannot amount to an engraving. In any case, the printed product like the one in question in the instant suit is not the result of any engraved material within the meaning of the word 'engraving as contained in Section 2 of the Copyright Act. The prints which are contemplated in that Section are the prints from an engraving, like artistic works like lithography, wood-cuts etc. (28) For the reason that in 1961 R.P.C. 57 supra the label was admitted to be an engraving, whereas the carton in question admittedly is not admitted to be an engraving, that case does not hep the petitioner as it does not apply to a printed carton reproduced by a mechanical process, which is the subject matter of this case. ", "(29) Counsel for the. plaintiff next referred to 1959 Rpc 83 (supra) that case, what was in question was a \"sweet tin\". The \"sweet tins\" were printed tins on which was reproduced the original, design made up by some artist What had happened was that had copied the printed design/representation which was to be found on the tins of in which they had sold sweets. The Court found, at page 87, that the plaintiff's design (which must refer to the original artistic work, and not what was reproduced on the tins was an \"artistic work\" within the meaning of Copyright Act . The Court found that the plaintiff's artistic work had been copied by the defendant's artist that the differences between the two were small differences, which did not create any substantial difference when examined as a whole. The Court came to the conclusion that \"two designs in question were almost exactly similar. The arrangement is almost precisely the same, and the colours though in some cases perhaps slightly darker in the Defendants' design, are exactly similar otherwise, to the plaintiff's, and the series in which they appear in different colours is completely in accordance with the plaintiffs own arrangement. It became obvious to me, and it is now .accepted, that an artist. who was employed by to produce a design to the defendants' whether goaded by the defendants or not, did in fact copy the plaintiff's design. It is quite incredible that the result should have been reached in any other way, and, therefore, the defendants' design is a copy of the plaintiff's design, with merely trifling additions in addition to the different background, done, it would appear, with the idea of trying to give the effect that it, was somebody else's effort'. ", "(30) It is not clear from the reported judgment whether original sketch/painting done by the plaintiffs' artist was produced in or not. It, however, appears from the observations, which have been made, by Justice , (reproduced above) that the original painting/sketch/drawing made by the plaintiff's artist was produced in . No support can be derived by the counsel from this case. Inasmuch as 1959 Rpc 83 (supra.) appears to have proceeded on the basis-.of an original artistic work, which comprised of copyrightable subject matter, was relied upon by the plaintiff and filed in . ", "(31) The counsel next relied upon 1961 Rpc 387 (6); v. In that. case, what was in question was the shape of 'Coca Cola' bottles, and the action was a passing off action. A penis' of the case- indicates that the said 'passing off' case was decided on the basis of concession made before the . A case decided on concession can not be of any assistance to the plaintiffs herein, in any case, that matter related to, What was a design of bottle. and not an artistic work. ", "(32) The counsel then relied upon 1984 Fsr 210 (7): LTD. and others v, . The question in that case was labels on bottles. The label in quotation was the label of a soft mineral water drink, known as SCHWEPPES. What was allege to be an imitation of it, was. a label of Mineral water. In that case it was conceded is apparent from what is stated at page 211, that copyright subsisted in the labels, and that the plaintiff had the copyright in those labels. There is no such concession in the instant case. In any event, a case based on the concession is of no binding authority and of no help to the plaintiff. In case there was no consideration of the question whether a mechanically reproduced label is by itself, a good subject matter of copyright or not. It appears to have been assumed in that case, that there was in existence an original copyrighted design executed by an artist; where's, in this case, we have to proceed on the basis that the printed carton placed before the is the only \"original\". . ", "(33) It is significant that the printed cartons en their face, contain no notice of existence of any copyright therein. Further even on the pencils there is no indication of claim to copyright whether with respect to the pattern on its 'skin' or otherwise. ", "(34) The counsel next relied on 1970 R.P.C.259; which related to the shape of the bottle of 's Dimple Scotch Whisky Bottle. This case can be of no help to the plaintiff for the reason that the Dimple Scotch Whisky bottle is a three dimensional object having, peculiar features of shape and configuration. and may have had protection under the Design Laws. The reason for grant of injunction therein was, because the bottle, used by the plaintiff was of a shape which was copied by the defendants, and the defendant's bottle led to confusion between the defendants' bottles and the plaintiffs' bottlts. ", "(35) Counsel for the plaintiff also referred to 1977 R.P.C. 255(8), Karo Step Trade Mark. That case was a \"rectification\" proceeding for the purposes of removal of a trade mark from the register. The trade mark, which was sought to be removed, was a four pointed star device. In that case. the four pointed star device was designed by a commercial artist who had assigned the copyright to . The question was, whether it was an artistic work within Section 3 of the English Copyright Act. The Court held : \"It (the mark) is a drawing, and Section 3(i)(a) expressly classifies drawings on proper subject matter of artistic copyright, irrespective of artistic quality. No doubt a drawing may be so simple 'that it cannot be said to be \"a work\". For example, a. straight line or a circle for the word \"work\" itself carries with it t^e idea of the exercise of some degree of skill and labor, but I am unable to accept the submission of counsel for Mrs. that the artistic part of this device is go simple a nature that no copyright can reside in it.\" ", "(36) If is clear from , part of the judgment reproduced above, that the had before it the original drawing, and the deed assigning copyright in the Drawing, and the had come to the conclusion that some degree of skill and labor required in producing the design/drawing of the four pointed star composed in a circle within the circle. It is clear from the report that the two words 'Karo Step' were not even suggested to have become subject matter of a literary copyright. This case reiterates that the skill and labor expanded upon a work is the sine qua non for existence of copyright in any work. 'This test has. been applied by s for long. See :- 1925, 75 (9), and 1960(1) 53 (.10). ", "(37) This case, therefore, does not help the-counsel for the plaintiff as in the instant: case, what is before the is a mechanically reproduced article and not the original article on which skill and labor of an artist, has been 'expended. As slated above, the carton relied upon by the counsel doss not say upon its face, by. any of tiles recognised symbol/words., that the subject matter of the carton is copyrighted and that copyright thereof vest in the plaintiff. ", "(38) The counsel also referred to on Copyright, 1980 84 and Modern Law of Copyright by Laddie & Ors; .107. Both of these are commentaries and the comment is based upon the judgments which have been already referred to above, which judgments are. found not to, give any support to the contention which has been raised in this... case that a mechanically printed carton is good subject matter of copyright. In fact, none of the above cases -has even consider. the matter from this angle. ", "(39) The counsel for the plaintiff referred to 1978 Delhi 250 at 252(11) and particularly the passage at page 252, in support of the proposition that a person who is the first user of the mark is entitled to a right therein. The Mark in question there was 'Raja Rani' and the prior use thereof was held to confer a right to restrain others from using it. In the instant case, the question is not of the first user or the prior user, but whether a right covered by the' law of copyright subsists in the mechanically printed carton. For this proposition 1978 Delhi 250, 252 (Supra) does not have anything to say. It does not give any support to the paintiff. It cannot ev.en be suggested in the instant. case, that the words \"CAMLIN FLORA\" which are found in the carton are used by the defendants. The words used by the defendants are inter-alia 'NATIONAL ELORA'. There is dear distinction between 'CAMLIN FLORA' and 'NATIONAL ELORA'. The. two sets of word combinations only have to he written to make it evident. It cannot possibly be said that 'CAMLIN FLORA' is same as, or-similar to 'NATIONAL ELORA'. ", "(40) Another case cited by the counsel is 19.60 R.P.C.page 150 (12). In this case, what was in question was the artistic design impressed upon the plastic container of blankets. In that. case the Court assumed that the plastic container bearing a representation .of the head and shoulders of a woman was an artistic work within the meaning of Copyright Act and it was so conceded (page 151 line 42). That case, based upon a concession, does not help the plaintiff, as there is no such concession. in the instant case, (41) The counsel cited 1977 page 41 (13) for the preposition that the certification from the copyright register bearing seal of a prima facie evidence of existence of copyright. There is no force in this contention as the judgment does not say so. What the judgment says is that the certificates under the Copyright Act only prima facie, show that the particulars mentioned in the certificate are entered, in the copyright register I am of the view that the mere fact that something is entered in the Copyright Register, does not as, a matter of law establish that what. is registered is in fact and in law copyrightable subject matter. This is so because, the sine qua non to the existence of copyright, is the expenditure of skill and labor on any work which originated from its author and unless the original work, on which skill and labor has been expended by its author is produced in Court to prima facie show that the work has originated from an author, it cannot be said that there is copyright in any work. The existence of artistic merit in any original artistic work is not a matter which determines the existence of copyright therein. The copyrightable matter is that which has originated from the author who has expended skill and labor upon them. In 1977 41 (Supra) there was no finding of fact, that the matter ton the containers was a copyrightable artistic work and the case seems to have proceeded upon the copyright certificate only, arid if that judgment can be said to say that what is printed on tins by a printing process, (Printing process essentially not involving any skill or labor of a natural person) then I respectfully disagree from-that judgment. lt is too well settled in copyright law that without expenditure of skin and labor on a work which has originated from the author, no copyright can come into existence. [1924 and 1960(1) Madras Law Journal 53)(Supra). It is also to be kept in view that the judgment in. 1977 41 (Supra) is on an interim application and not a final judgment after trial. ", "(42) The counsel has referred to 1975 Delhi 130 (14). That case related to Trade and Merchandise Marks Act and the questions which were considered in that case related to assignment of copyright and vesting of copyright and the duration of copyrights. The question decided in that case was not whether a mechanically reproduced printed paper carton can be said to be copyrightable. This case also does not help the petitioner. I am of the view that a mechanically printed card board carton is not copyrightable, there is no skill and labor involved in its production, and. no copyright subsists in it. No suit can be maintained on the basis of any alleged copyright in a printed card board carton. ", "(43) It was next contended by the counsel for the plaintiff that the words 'FLORA' and 'ELORA' to be found on the respective cartons of the plaintiff and the defendants should be seen ant on an examination it would be seen that the attempt has been made to write the word 'ELORA' in the same calligraphics style. That the alphabet 'E' in the word 'ELORA', and the alphabet 'F' in the word 'FLORA' have been. in the same calligraphic style. It is also asserted that the alphabet 'R' found in both Flora & EL.ORA, are in the same calligraphic style. ", "(44) There is no doubt that the alphabet 'F' and alphabet 'E' in the plaintiff's Flora as appearing on the carton of the plaintiff, has been written in the same calligraphic style as the alphabet 'E' and 'R' in 'ELORA' on the defendants' carton. With respect to this contention, I am of the view that the maxim : Demonisms Non Curat Lex applies with full force. ", "(45) This is too minute a comparison. The alphabets F & R in the plaintiff's carton and the alphabet 'E' and 'R' in the defendants' carton are a very small part of the entire carton and in my view, this similarity in the two alphabets is not sufficient to establish an attempt to pass off of the defendants' carton as the plaintiffs carton, for the reason that .the alphabets occupied only a small area of the carton. Another reason why I am of the view that there is no passing off of the defendants. cartons, is that on the defendants carton very prominently printed is a famous sculpture of India \"Woman writing a letter\". The suggestion . given by the defendants' carton is that this sculpture is from the, Elora Caves. This suggestion may be a misleading one. The sculpture exists at Khujuraho. But the word 'ELORA' Coupled with the figure of 'woman writing a letter', indicates that the defendants' carton has no relationship to flowers, but to a place famous for its painting and sculpture the Elora caves. ", "(46) The word Flora is used in Botany to mean flowers in general, as a class. The counsel for the plaintiff stated that the phonetics of Elora and Flora are similar and, therefore, relying upon 1970 1649; (15) (Rustom-Ruston) and 1970 Supreme- Court 146 at 148; (16) (Ambal-Andal). it should be held that there is an attempt to pass off the goods. ", "(47) In my view, flowers do not necessarily represent something which is relatable to art or artists whereas Elora brings clearly to the mind of all Indians something connected with art or artists. Pencils are what are used by artists, and in this case mere phonetics similarity are not so obvious so as to pass nil one for the other. The defendants seek to identify their pencils with artists, and the plaintiff with botanists. ", "(48) It is also asserted by counsel that some colour combinations are used on the cartons. I am of the view that the two cartons have different colour combinations, and there are differences in the colour. There are differences in the composition on the printed matter and, therefore, carton of the defendant cannot, on the basis of similarity of colour combination, be said to an attempt to pass off the defendants' carton as cartons of the plaintiff. The counsel for the plaintiff relied upon 1972 Delhi. 41 , for the proposition that normally people have imperfects and fading memory. No doubt it is so but this principle does not apply in this case as the difference in the cartons sufficiently distinguish the two cartons. ", "(49) Mr. did not make any submission at all regarding the copy-right ability of printed cartons as defendants themselves claim copyright in 'such mechanically printed cartons. ", "(50) His only submission related to passing off only. .Mr. contended that there is no similarli.y at all. whether phonetic or visual between the two words Camlin Flora the registered mark of the plaintiff, and National Elora which is used on the cartons of the defendants. In view of the fact that the device of a 'woman writing a letter is to be found on the carton of the defendants, I agree with Mr. that on the visual examination of whole of the cartons of the plaintiff, and whole of the carton of the defendant, there is no like hood of confusion. ", "(51) Mr. also asserts that the beginning of the words, which are alleged to cause confusion are important, and that the words have to be viewed as a whole and not merely some of its alphabets. Only the alphabets which go to make up the words are not to be taken into account .in isolation and he refers J970 Supreme Court 2062: (17) case clearly holds that it is the entire word which has' to be seen; that ail the alphabets have to be pronounced when phonetics are to be taken into account, and no alphabets used in a word can be slurred over. ", "(52) The other judgments referred to by Mr. are 1974, Vol. Ii Delhi 151, (18) Mis. , and 1969 (19) Punjab 290, v, , and Another. In the formal case. it was held that the words arc label of \"Panghat Ghee\" was distinct and different from the word and label \"Gopi\". In the latter case, the words in question were Elephant and .'Jagjit Hathi', which were found to distinct. ", "(53) Mr. in reply said that: the misspelling of the word Ellora as Ellora by the defendant and copying of the call-graphical style of writing the alphabet 'E' and alphabet 'R' show an intention to deceive and to passing off. ", "(54) I am of the view that there is no precedent binding on me to hold that a mechanically reproduced printed carton is capable of being subject matter of copyright. In the instant case, what has been produced in is only a mechanically reproduced printed card board carton and I find that copyright does Hot subsist therein. In my view, copyright does not subsist therein for the reason that it is impossible to determine who is the \"author\" of the mechanically reproduced printed carton. Copy right is conferred only upon \"authors\" or those who are natural person from whom the wort; leas originated or the authors may be legal persons to whom copyright has been assigned in accordance with law. by the authors from whom the work had originated (55) In the circumstances, I hold that plaintiff can not claim any copyright in any carton that has been mechanically reproduced by a printing process as the work cannot said to have 'originated from the author. I am of the view that a machine cannot be \"author\" of an artistic work, nor can it have copyright therein. ", "(56) As regards the contention of the plaintiff that defendants have attempted to pass of their cartons as cartons of the plaintiff, I hold that taking into 'account the entirety of the carton, its colour scheme, the subject matter printed thereon, and keeping view the similarities in the caligraphic style of the alphabets, E, F and R, and the apparent differences, it can not be said that there is any likelihood of confusion between the cartons of the defendants and the cartons of the plaintiff as the differences, mentioned earlier, outweight the similarities. ", "(57) .IN view of what is stated herein above, and in view of my finding that there is non-copyrightable subject matter in mechanically produced printed cartons the only right being claimed in the suit being on the basis that the mechanically reproduced printed carton has copyrightable subject matter in it, the instant suit for infringement of copyright is not maintainable. ", "(58) As regards the infringement of the plaintiff's trade mark Camlin Flora, I am of the view that the words National Elora in no view of the matter can be said to infringe the trade mark Camlin Flora, nor can the words National Elora be passed of as the words Camlin FLORA. ", "(59) In my view the suit for infringement of alleged copyright or the alleged infringement of the trade mark of for the alleged passing of can not be maintained. I am further of the view that the use of the word National Elora on the cartons of the defendants do not give any cause of action to the plaintiffs' as they do not infringe the alleged trade mark. . In view of my findings, not only the plajnliff's are not entitled to the injunction which they have prayed for but they are not entitled to maintain the suit as brought and framed. The suit as filed, and the documents field Along with the plaint do not dispose a cause of action against the defendants and the plaint is liable to be rejected. The injunction prayed for is refused and the plaint is rejected under provisions of order 7 Rule 11 of the Code of Civil Procedure, as the same discloses no cause of action. I.A. 2209/85 and Suit No. 662/85 are disposed off."], "relevant_candidates": ["0000067255", "0001070490", "0001389940"]} {"id": "0001201177", "text": ["JUDGMENT , C.J. ", "1. This appeal originally came on before , who considered it desirable that it should be heard by in view of the conflict between decisions of this . ", "2. The appeal is against an order of the Subordinate Judge of Ottapalam remanding a suit to the District Munsiff of Chowghat for disposal on the merits. The suit was filed by the first respondent for eviction of the appellant (first defendant) from a building that had been leased to him by the first respondent's predecessor in 1936. There were also prayers for arrears of rent and for recovery of damages in respect of an annexe to the building constructed by the first respondent. The appellant deposited into Court the entire arrears of rent and interest claimed in the suit, and therefore that part of the plaintiff's claim was satisfied. Following the decision in . (1945) 1 M.L.J. 44 the District Munsiff held that the suit, so far as it related to eviction, was not maintainable, because of the provisions of the Madras Non-Residential Buildings Rent Control Order, 1942, hereinafter referred to as the Rent Control Order. On appeal, the learned Subordinate Judge, following certain decisions of this Court subsequent to . (1945) 1 M.L.J. 44 held that the suit was maintainable and passed an order of remand as mentioned above. ", "3. The relevant provision of the Rent Control Order is Clause 8, the material portions of which are as follows: ", "* * * * * * (i) A tenant in possession of a non-residential building shall not be evicted therefrom, whether in execution of a decree, or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this clause. (2) A landlord wishing to evict a tenant in possession shall apply to the Controller for a direction in that behalf. ", "The Controller shall make an order of eviction only if he is satisfied that one or other of the conditions mentioned is satisfied. These conditions briefly are, non-payment of rent, absence of readiness and willingness to pay a fair rent in future, sub-letting except under certain circumstances and user of the building for a purpose other than that for which it was leased, and absence of occupation of the building for a continuous period of four months without reasonable cause. Then follow provisions for execution of an order for eviction passed by the Controller. ", "4. Before dealing with the several decisions on the effect of this clause, let us examine its plain language. Sub-clause (1) lays down that a tenant shall not be evicted from a non-residential building of which he is in possession. \"Evict\" literally means \"expel by legal process\". Eviction consists in the physical act of throwing out the tenant from the building which he is occupying. This sub-clause therefore, prevents the tenant from being thrown out. One of the methods of such eviction is by the process of execution of a decree for possession. The sub-clause makes it clear that even this method is prohibited. The eviction can only be in accordance with the provisions of Clause 8. There is nothing in this clause, or in any of the other clauses of the Order expressly prohibiting the institution of a suit for possession, or prohibiting from passing a decree for possession. No doubt, even though a decree for possession is passed, it may be not be capable of execution by . But the passing of the decree itself is not in terms prohibited. ", "5. Is there any such prohibition which can be necessarily implied? Is there anything in this clause which takes away, by necessary intendment, the ordinary jurisdiction of to entertain a suit by a landlord for recovery of possession of his property in the occupation of a tenant ? As their Lordships of the Judicial Committee pointed out in Secretary of State for . (1940) 2 M.L.J. 140 : L.R. 67 I.A. 222 : I.L.R. 1940 Mad. 599 at 614 (P.C.) It is settled law that the exclusion of the jurisdiction of is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. ", "I fail to see any such clear implication to oust the jurisdiction of the civil . ", "6. The earliest decision dealing with this question is that of , J., in . (1945) 1 M.L.J. 44 where the learned Judge held that there was an ouster of the jurisdiction of Civil Courts. His reasoning was as follows: ", "Mr. ingeniously contended that there could be no objection to a decree being passed in this suit though after the decree it might be that he might have to go before the Controller to get possession. This argument fails to take note of two answers. One is that when a special tribunal is indicated for obtaining a particular relief, it is that tribunal that has got exclusive jurisdiction to grant that relief, and to that extent the jurisdiction of Civil Courts is ousted. Secondly, even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen and which cannot be carried into effect without resort being had to other persons or tribunals in whom a discretion is vested to decide if eviction is to be ordered or not. The remedy of the plaintiff is to go before the Controller. ", "Neither of the two grounds on which the learned Judge based his conclusion commends itself to me. No doubt, when a special tribunal is indicated for obtaining a particular relief, that tribunal has got exclusive jurisdiction to grant that relief. But then that relief must be a relief not available to a party under general law. Further, the relief for which the special tribunal, namely, the Controller, is indicated, is the relief of eviction, that is, the actual throwing out of the tenant. That may only mean that a which passed the decree may not have jurisdiction to execute the decree for possession. But I fail to see how the jurisdiction of the Civil to entertain a suit and to pass a decree for possession is necessarily ousted. I cannot agree with the learned Judge that a decree for eviction which cannot be executed for a certain time, in this case during the continuance of the Rent Control Order, can be called brutum fulmen or that, passing a decree for eviction which cannot be at once executed, would be indulging in a mere pastime. One can easily give instances of cases in which the decrees duly passed by competent cannot be immediately executed. But that fact has never been understood to mean that there is an implied ouster of jurisdiction of the to entertain and dispose of the suit. This decision of the learned Judge was expressly dissented from by , J., in the two decisions in In re (1946) 1 M.L.J. 134, and (1945) 1 M.L.J. 135. He held that the language was not such as to-deprive the Civil of their power to entertain suits for eviction and to adjudicate upon them. His conclusion is thus tersely expressed: ", "It cannot be said that these words are wide enough to deprive of their jurisdiction to pass decrees; all that the rule contemplates is the control of the relief of eviction. ", "Apparently, it was in view of these latter decisions that , J., observed as follows in a recent decision, vide (1948) 2 M.L.J. 359. ", "It must now be taken to be well settled that a decree in ejectment could be passed by and all that the order provides is that during the subsistence of the order, cannot execute the decree but the landlord will have to take appropriate steps under the provisions of the order. ", "There are certain general considerations which, in our opinion, support this view, namely, that the order does not take away the jurisdiction of to entertain a suit by a landlord against the tenant and pass a decree therein for possession. Many of these considerations are found set out in an unreported decision of Wadsworth, J., in v. Fathima Bibi Saheba S.A. No. 80 of 1946. These are such considerations : (1) The cause of action for an application to the Controller would be quite different from the cause of action for a suit in ; (2) The grounds on which the Controller can order an eviction may be quite different from those on the strength of which would grant a decree; (3) The failure by the plaintiff to claim a decree for eviction in on grounds which would not justify eviction by the controller might result in grave complications by way of limitation for a suit filed after the Control order ceases to operate; (4) The period during which the execution of a decree is prohibited is limited. The order itself is only for a short duration; and when it is repealed or it expires, a decree of can be executed in the ordinary way immediately I hereafter. ", "7. Having regard to all these considerations and to the language of Clause 8 of the order, I am of opinion that the jurisdiction of to entertain and pass a decree in a suit for eviction by a landlord against his tenant is not expressly or impliedly taken away by the provisions of the Rent Control Order. ", "8. The Civil Miscellaneous Appeal is therefore dismissed with costs. ", ", J. ", "9. I respectfully agree with my Lord in his reasoning as well as in his conclusion. I wish only to add a few words with reference to one particular view-point expressed by , J., in . (1945) 1 M.L.J. 44. Possibly, the learned Judge had in mind the observation of Lord in (1888) L.R. 15 I.A. 211 : I.L.R. 11 All. 47 at 56 (P.C), which I shall presently refer to, in making his observations in the case of . (1945) 1 M.L.J. 44 that even if it is held that the Court has jurisdiction to grant a decree for eviction it cannot be called upon to indulge in a mere pastime and pass orders which would be brutum fulmen. The observation of Lord that: ", "It would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not. ", "was made in connection with the discussion of a question of limitation which arose in the case before their Lordships of and has since been considered in a number of later decisions of in India. According to the interpretation placed upon that observation of the learned Lord by these later decisions it will be too much for any litigant to contend that where the rights as between himself and his adversary have been subjected to adjudication by a competent , limitation for other suits between the parties based on such rights should be computed from the date of their final determination. It has been further ruled by these later decisions of as well as by decisions of , that Courts have, in fact, no power on considerations of hardship or equity to invent new grounds of exemption from the bar of limitation not recognised by the statute. It seems to me, therefore, that the principles laid down by these decisions are a fortiori applicable to a question of limitation which may arise, as pointed out by , J., in his unreported decision in S. A. No. 80 of 1946, in relation to a suit in the ordinary based on grounds of eviction under the general law, which are by no means identical with the grounds constituting the cause of action for an application to the Controller."], "relevant_candidates": ["0000137324", "0000994019", "0001371397", "0001682326", "0001901354"]} {"id": "0001206320", "text": ["PETITIONER: , ENGINEERING KAMGAR SANGH Vs. RESPONDENT: , & . DATE OF JUDGMENT: 05/05/1998 BENCH: S. SAGHIR AHMAD, M. JAGANNADHA RAO ACT: HEADNOTE: JUDGMENT: ", "THE 5TH DAY OF MAY, 1998 Present: ", "Hon'ble Mr. Justice Hon'ble Mr. Justice , Attorney General of India, , Sr. Adv. and , Adv. with them for the Appellants in C.A. Nos. 2572 and 2573/98 S. and , Advs. for the appellant in C.A. No. 2574/98 , Additional Solicitor General, , Ms. , , Advs. with him for the Respondent in C.A. No. 2572/98 , Adv. for the Respondents in C.A.No. 2573/98 and C.A. No.2574/98 J U D G M E N T The following Judgment of the Court was delivered: ", "WITH CIVIL APPEAL NO .... 2573 ................. /1998 (Arising out of S.L.P. (C) No. 14750/1997) AND CIVIL APPEAL NO ........2574 .............../1998 (Arising out of S.L.P (C) No. 15736/1997) J U D G M E N T M. JAGANNADHA RAO, J. ", "Special leave granted in all the Special leave petitions. ", "Civil Appeal arising out of SLP (C) No. 14327/1997 is filed by ' against order of dated 28.7.1997 passed by a Division Bench in an interlocutory appeal appointing a Receiver to take formal possession of the mortgaged properties which are subject matter of suit No. 82 of 1997 pending before a learned Single Judge of the said on the Original Side. The respondent , which is the plaintiff in the suit is claiming in consortium with a sum of Rs. 23.67 crores (approximately) as due to it as on 24.12.1996. Earlier the Single Judge of the Bombay in his order dated 10.1.1997 had disallowed the application for appointment of Receiver in view of the stay of appointment of provisional Liquidator granted by a Division Bench of the Bombay in winding up proceedings on 20.12.1996. ", "Civil Appeal (arising out of SLP (C) No. 14750 of 1997) is filed by the appellant against the order passed by another Division Bench of dated 8.8.1997 in Appeal No. 1193 of 1996 by which the order of the learned Single Judge on Side appointing a provisional Liquidator on 18.10.1996 was affirmed. Thereby an earlier order of stay dated 20.12.96 (granted by the Division Bench in respect of the Judge's order dated 18.10.96) stood vacated. The respondents are , the creditors, who filed the winding up petition 415/1996 on 6.8.1996 against the appellant in . ", "Civil Appeal (arising out of SLP (C) NO. 15736/1997) is filed by the workmen (Engineering Kamgar Sangh) against the order dated 8.8.1997 passed by in winding up proceedings confirming the order of the Single Judge appointing provisional Liquidator. They are supporting the appellant company. ", "That is how these three appeals have arisen and have come before us. The appellant company had, after taking some adjournments before the Division Bench in the Company Appeal ", "- which was filed against the order of the learned Single Judge appointing provisional liquidator - submitted a reference before (hereinafter called the `') on 17.7.1997 under the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter called the `Act'). The said reference was registered 24.7.1997 as Case No.97 of 1997. The point raised in these appeals is that once the reference was registered by the on 24.7.1997, the Division Bench of ought not to have passed orders on 8.8.1997 vacating the interim stay granted by it on 24.12.1996 and ought not to have confirmed the order of the learned Company Judge dated 18.10.1996 appointing provisional liquidator, in view of the mandate of section 22 of the Act. Likewise, it is argued that the order of dated 28.7.1997 appointing a Receiver in the interlocutory appeal arising out of the Civil Suit is also had in view of section 22 of the Act. ", "We may state that the order of in proceedings arising out of suit - appointing Receiver on 28.7.1997 was stayed by this Court on 5.8.1997 in SLP 14327/1997. Similarly the order of , in proceedings arising out of winding up proceedings, dated 8.8.1997 vacating the stay and confirming the Company Judges order appointing provisional Liquidator was stayed on 12.8.1997 in SLP 14750/1997 and it was further ordered that the provisional Liquidator shall not take any further steps. ", "One other important fact to be noted is that on 10.11.1997 in SLP 14327/1997, this Court passed an order, - after hearing both sides, adjourning the SLPs \"to enable the to come to a decision'. This Court, however, directed the appellant- not to dispose of or alienate or create any third party interests in any of the assets of the except with the previous approval of the and that before passing any orders, the will give hearing to . This Court also recorded an assertion by the that the Receiver had taken formal possession of the properties. This assertion was no doubt denied by the . This Court also noticed that had, in its order dated 8.8.97 accepted as true the serious allegations made by against the appellant . ", "At this stage, it is necessary to refer to the conduct of the Company, already adverted to, which came up for severe criticism by in its order dated 8.8.1997. What happened was that after securing a stay order from on 20.12.1996 - in respect of the order of the learned Single Judge appointing a provisional Liquidator, - the Company obtained adjournments before on 4.11.1996, 2.12.1996, 9.12.1996, 18.12.1996, 20.12.1996. On 20.12.1996 the case was adjourned to 22.7.1997 when an affidavit was filed - without disclosing that the Company had approached the on 17.7.1997 - and the matter was got adjourned to 29.7.1997 and again to 8.8.1997. The factum of registration of the reference by the on 24.7.97 was not disclosed to till 8.8.1997. The Bench, therefore, rightly criticised the conduct of the appellant for not disclosing these facts to before 8.8.1997. Further, in the Company was opposing the appointment of provisional Liquidator on the plea that it was a viable unit but when it approached the , it was claiming that it was a sick industry. These contradictory pleas also came up for adverse comment by . The Bench referred to section 22 and section 16 of the Act and felt that the mere registration of the reference under Section 15 did not amount to \"pendency of any inquiry\" under Section 16 and that, therefore, section 22 was not attracted and, therefore, the Bench was well within its powers in vacating the stay and confirming the appointment of provisional liquidator or in appointing a Receiver. In that context, followed a decision of of in [1991 (72) Com. Cases 146 (Cal.)] in preference to the Judgments of other High Courts which had taken a contrary view. The Bench then gave several findings to the effect that the Company had indulged in various \"irregularities\" or \"misconduct\" in its accounting procedures etc. with a view to show that it was a viable unit and to show that it was not liable to be wound up. Having enumerated the alleged financial irregularities as pointed by the and the suppression of facts, in its order dated 8.8.1997 vacated the stay order dated 20.12.1996 and confirmed the appointment of provisional Liquidator. It also issued a contempt notice to the officers of the Company. ", "It is necessary to refer to certain subsequent events which have since taken place after the orders under appeal were passed by . These events relate mainly to three orders passed by the . ", "(i) On 9.9.1997, the passed orders, after hearing the representatives of the appellant - and and the (which was also to get around Rs. 38 crores from the company), directing the under Section 16(2) of the Act to examine and analyse the audited balance sheets of the upto 30.6.1997 and submit a status report. The was also directed to submit its reaction or comments to the . The contentions raised by the 's representatives were elaborately set out. ", "(ii) On 24.11.1997 the passed orders recording that the had submitted a report and that on that basis and on the basis of the submissions made, \"the was to be declared as a sick industry' under section 16 read with section 3(o) of the Act. It then said that it is necessary in the public interest to adopt the measures specified in Sections 18 and 19 of the Act in relation to the . It accordingly appointed as the Operating Agency under Section 16(2) of the Act and directed it under section 17(3) to prepare a rehabilitation Report. The was directed under Section 22-A, not to alienate any of its assets. ", "(iii) A notice was issued by fixing 15.12.1997 as the date on which the allegations of against the Company would be heard. On 15.12.1997, the passed further orders after hearing the 's representatives observing that the allegations made by the against the Company had been considered by the and that the had prepared a status report and that the was satisfied that the allegations of the against the company - in regard to the change in the accounting year and provision for depreciation and interest and in regard to the preparation of the balance sheet - could not be accepted inasmuch as these actions \"were permissible under the various provisions of the Companies Act , 1956 and as such these were valid under law\". The matter was adjourned to enable the company to submit its revival/rehabilitation proposals. These are the three orders passed by the subsequent to the impugned orders of . ", "It was contended before us by and , appearing for the in the two appeals filed by the and by the counsel for the workmen in the third appeal that ought not have vacated the stay dt. 20.12.96 nor confirmed the appointment of provisional Liquidator dated 18.10.96 by its order dated 8.8.1997 when by that date, Section 22 of the Act had come into play on account of the registration of the reference dated 17.7.1997 by the on 24.7.1997. For the same reasons, it was contended that could not have appointed a Receiver on 28.7.1997 in the interlocutory appeal filed in the suit proceedings. It was contended that the appeals should, therefore, be allowed and the impugned orders vacated in view of the mandate under Section 22 . Sri cited several rulings of to contend that registration of the reference was sufficient for purposes of the applicability of Section 22 . It was argued that now the matters have reached the stage of section 17(3) of the Act before the and, therefore, no orders can be passed restoring the Receiver or the provisional liquidator. It was also brought to our notice that had dropped the contempt proceedings by its order dated 13.2.1998 pursuant to the apology tendered. ", "On the other hand, the learned Additional Solicitor General, contended that while the contention of the appellants in relation to Section 22 could be correct, the appellant was guilty of suppression of facts before of as pointed in the order dated 8.8.1997. It took adjournments before without informing the Court that it was either approaching or that it had approached the and got its reference registered. The Company also took contradictory pleas before and before the , in regard to its viability. This conduct was wholly unbecoming. On account of its suppression of facts and mutually contrary pleas, the reference to the must be treated as vitiated and as amounting to `fraud' and, therefore, all consequential orders of the must be ignored. ", "On the basis of the above contentions, the following points arise for consideration: ", "(1) Could it be said that the conduct of the appellant Company before on account of the contrary pleas taken by it before and the and on account of the suppression of facts, - would render the reference under section 15 and the registration of the reference and the subsequent orders of the bad? (2) Whether, once the had registered the reference dated 17.7.97 on 24.7.97 under section 15 of the Act read with the Regulations, it was permissible for of to pass orders on 8.8.97 vacating the stay order dated 20.12.96 and confirming the appointment of provisional liquidator on the company side and also whether it was permissible for of the High court to appoint a Receiver on 28.7.97 in the proceedings arising out of the suit, in view of section 22 of the Act? ", "Point 1: ", "It is true that in the winding up proceedings and in the civil suit, the appellant company contended that it was a viable unit and that neither a Receiver nor a provisional liquidator could be appointed. The appellant was, on the one hand seeking adjournments before while on the other hand it had approached the on 17.7.97 and got its reference registered on 24.7.97 seeking to be declared a sick company. It is also true that in the affidavit filed on its behalf in on 22.7.97 seeking an adjournment, it had not disclosed to that it had moved the on 17.7.97. The Company sought an adjournment to 29.7.97 and then again to 8.8.97. Neither on 22.7.97 nor on 29.7.97 was informed about the application filed before the nor about its registration. A disclosure of these facts was made only on 8.8.97. ", "This conduct of the appellant, in our view, was certainly very unfair to and, therefore, had rightly depreciated the same. In our view, there was a clear attempt to keep the in the dark. ", "But the question is whether, on that account, the reference application to the would become bad. It is clear from the application filed before the that the was informed about the proceedings taken against the company in both on the company side and on the original side. So far as the was concerned, there was no suppression of facts before it. We are at a loss to understand as to how any conduct of the appellant company before of Bombay could make the registration of the reference before the bad. If any orders were obtained by the from by way of fraud it was certainly open to the respondent to ask to recall such orders. No such thing was done. We, therefore, cannot accept the contention of the respondents that the reference under section 15 of the Act and the registration thereof by the became bad because of any conduct of the before . It follows that equally the subsequent orders passed by the on the reference cannot, on that account, be said to be invalid. This contention of the respondents is rejected. Point 1 is held against the respondents. ", "Point 2: ", "The legal issue under this point is of considerable importance in proceedings arising under this Act. ", "We shall, therefore, refer to the relevant provisions of the Act and Regulations and the headings of the Chapters in the Act and the headings of the Chapters in the Regulations. ", "Chapter III of the Act contains section 15 to section 22A and bears the heading \"Reference, Inquiries and Schemes\". Section 15 of the Act refers to the `Reference to Board' either by the industrial Company under sub-clause (1) of Section 15 or by or or or by a public financial institution or by local institutions or . Section 16 refers to `Inquiry into the working of Sick Industrial Companies' and to the declaration of the unit as a sick industry, after inquiry. Section 17 deals with `Powers of Board to make suitable orders on the completion of inquiry' to the company so as to make its net worth exceed its accumulated losses within a reasonable time or to direct the operating agency to prepare a scheme in the manner provided in section 18 . Section 19 deals with `Rehabilitation by the giving financial assistance'. Section 20 refers to the winding up of the industrial unit if it is not likely that the Company will be able to make its net worth exceed its accumulated losses. Section 22 of the Act with which we are concerned here, deals with `Suspension of legal proceedings, contracts etc.' where `an inquiry under section 16 is pending or any scheme under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 before the appellate authority () is pending. ", "The point which has, in this context, been raised in several is that the mere registration of a reference by the under the Act, would not result in the automatic cessation of all proceedings which are pending either in civil courts or in etc. as against its assets. It is argued that in order that section 22 of the Act can come into operation, the must - subsequent to the registration of the reference under section 15 - apply its mind and consider it necessary under section 16 to make an inquiry and issue notices on the reference to the affected parties who are required to be heard, and that only then it can be said that an `inquiry' is pending. Unless an inquiry is pending there cannot be a statutory stay of proceedings etc. as contemplated by section 22 of the Act. ", "For the purpose of understanding the above point, it is necessary to refer to sub-clauses (1) to (4) of section 16 and section 22(1) of the Act. They read as follows: ", "\"S. 16: Inquiry into working of sick industrial companies - (1) The Board may make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company- ", "(a) upon receipt of a reference with respect to such company under Section 15 ; or ", "(b) Upon information received with respect to such company or upon its own knowledge as to the financial condition of the company. (2) The Board may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry under sub-section (1), require by order any operating agency to enquire into and make a report with respect to such matters as may be specified in the order. ", "(3) The or as the case may be, the operating agency shall complete its inquiry as expeditiously as possible and endeavour shall be made to complete the inquiry within sixty days from the commencement of the inquiry. Explanation - For the purposes of this sub-section, an inquiry shall be deemed to have commenced upon the receipt by the of any reference or information or upon its own knowledge reduced to writing by the . ", "(4) Where the Board deems it fit to make an inquiry or to cause an inquiry to be made into any industrial company under sub- section (1) or, as the case may be, under sub-section (2), it may appoint one or more persons to be a special director or special directors of the company for safeguarding the financial and other interests of the company or in the public interest. ", "\" Section 22(1) : suspension of legal proceedings, contracts etc.: Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act , 1956 , or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company) shall lie or be proceeded with further, except with the consent of the or, as the case may be, .\" ", "It is to be noticed that according to section 22 , in case an \"inquiry under section 16 \" is pending, then, notwithstanding anything in the Companies Act or any other instrument etc., no proceedings for the winding up of the company or for execution or distress or the like against the property of the company or for the appointment of a receiver and no suit for recovery of money or enforcement of any security or of any guarantee - shall lie or be proceeded with further, except with the consent of the or, as the case may be, by the appellate authority. Section 22A permits the pass certain conditional orders. ", "It is also to be noticed that sub-clause (1) of section 16 says that the `may' make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial unit - (a) upon receipt of a reference under section 15 or (b) upon information received by it or upon its own knowledge as to the financial condition of the company. Under sub-clause (2) of section 16 , the `may', if it deems it necessary or expedient, require any operating agency to inquiry and report to it. Under sub-clause (3), the or the operating agency is to endeavour to complete the inquiry within 60 days from the date of commencement of the inquiry. Explanation below sub- clause (3) explains that for purposes of sub-clause (2), that is to say, for computing the period of 60 days, an inquiry shall be deemed to have commenced upon the receipt by the or any reference or information or upon its own knowledge reduced to writing by the . Under sub-clause (4), when the deems it fit to make an inquiry under sub-clause (1) or (2) of section 16 , it may (the word `shall' has been omitted by Act 12 of 1994) appoint one or more directors etc. Relying on the use of the word `may' in section 16(1) of the Act it has been contended in some High Courts that the word `may' in that section shows that the has power to reject a reference summarily without going into merits and that it is only when the takes up the reference for consideration on merits under section 16(1) that it can be said that the `inquiry' as contemplated by section has commenced. It is argued that if the reference before the is only at the stage of registration under section 15 , then section 22 is not attracted. This contention, in our opinion, has no merit. In our view, when section 16(1) says that the can conduct the inquiry \"in such manner as it may deem fit\", the said words are intended only to convey that a wide discretion is vested in the in regard to the procedure it may follow for conducting an inquiry under section 16(1) and nothing more. In fact, Once the reference is registered after scrutiny, it is, in our view, mandatory for the to conduct an inquiry. If one looks at the format of the reference as prescribed in the Regulations, it will be clear that it contains more than fifty columns regarding extensive financial details of the 's assets, liabilities, etc. Indeed, it will be practically impossible for the to reject a reference outright without calling for information/documents or without hearing the or other parties. Further, the Act is intended to revive and rehabilitate sick industries before they can be wound up under the Companies Act , 1956. Whether the seeks a declaration that it is sick or some other body seeks to have it declared as a sick , it is, in our opinion, necessary that the be heard before any final decision is taken under the Act. It is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the for in the case the 's assets are sold, or the company wound up it may indeed become difficult later to restore the status quo ante. Therefore, in our view, in . [1990 67 Comp. Cases 412 (All)], in . [1990 68 Comp. Cases 201 (AP)], in . 78 Comp. Cases 264] are right in rejecting such a contention and in holding that the inquiry must be treated as having commenced as soon as the registration of the reference is completed after scrutiny and that from that time, action against the 's assets must remain stayed as stated in section 22 till final decisions are taken by the . ", "The other view that mere registration does not amount to \"commencement of inquiry under section 16(1) \" for purposes of section 22(1) has been taken by in Bengal Lamps Case (supra), and by in . [1995 82 Comp. cases 485 (Raj)]. This view is mainly based upon the provisions of the Regulations made under the Act. ", "We shall refer to these Regulations briefly. Chapter II of the Regulations framed under section 13 of the Act bears the heading `Reference under section 15 ' and contains Regulation 19. Chapter III deals with `General provisions regarding Inquiries' and contains Regulation 20 while Chapter IV which bears the heading \"Inquiry under section 16 \" contains Regulations 21 to 25. Chapter V deals with proceedings under section 17 and contains Regulation 26. For the present purpose, we are not referring to the other Chapters which are not very relevant. ", "The Division Bench of in Bengal Lamps Ltd Case (supra) - which case has been relied upon by in the impugned order dated 8.8.1997, ", "- has held that at the stage of registration of the Reference under section 15 of the Act read with Regulation 19 (in Chapter II of the Regulations which refers only to section 15 ), there can be no question of commencement of any `inquiry' referable to section 16 of the Act. Such an inquiry can be treated as having commenced only at the stage of section 16 read with Regulation 21 (in Chapter IV of the Regulations which refers to section 16 ). On that reasoning it held that there can be stay as contemplated by section 22 only when section 16(1) stage of inquiry has arrived and not at the stage of section 15 dealing with registration of the reference. It further held that it is only when the , i.e. the Bench of the issues notices under section 16(1) for inquiry or asks the operating agency to inquire, - that the `inquiry' can be said to have commenced. This line of reasoning has been applied by also and by in the judgment under appeal. Question is whether this view is correct? ", "Now, Regulation 19(4) which is concerned with section 15 requires that upon receipt of a reference, an acknowledgement is to be issued stating expressly that the reference has been received `subject to verification that the reference is in order'. If on scrutiny, the reference is in order, then it will be registered under Regulation 19(5). Regulation 19(5) has been amended recently with effect from 24.3.1994 which is of a date very much subsequent, in point of time, to the date of Judgment of . The new Regulation 19(5) as substituted w.e.f. 24.3.1994 is in two parts and reads as follows: ", "\"Reg. 19(5): If on scrutiny, the reference is found to be in order, it shall be registered, assigned a serial number and submitted to the Chairman or assigning it to a Bench. Simultaneously, remaining information/documents required, if any, shall be called for from the informant.\" ", "The first part says that the reference, if it is in order, will be registered. The second part says that simultaneously notice shall be issued calling for information or documents from the informant. The effect of the amended Regulation 19(5) is that even before any Bench of the can think of calling for information under Regulation 20(1) or under Regulation 21 read with section 16 , it is now mandatory after the amendment that as soon as a reference is registered, information/documents shall be called for from the informant straightaway. The point is whether when such information/documents are required to be simultaneously called for at Regulation 19(5) stage, can it be said that an `inquiry' under section 16(1) has commenced? ", "The above question depends upon what is meant by the word `inquiry' used in section 16(1) of the Act. According to the New Standard Dictionary, the word `inquiry' includes `investigation' into facts, causes, effects and relations generally; `to inquire', according to the same dictionary means `to exert oneself to discover something. Chamber's 20th Century Dictionary lays down that the meaning of the term `to inquire' is \"to ask, to seek\" and the meaning of the term `inquiry' is given as: \"search for knowledge; investigation : a question\". ", "Inasmuch as under the latter part of Regulation 19(5) it is necessary that simultaneously with the registration of the reference, information/documents are to be called for from the informant - the `inquiry' must, in our opinion, be deemed to have commenced under section 16 of the Act at that stage itself, namely, at stage of the second part of Regulation 19(5) and it is no longer permissible to say that such a stage is reached only when the issues notices and starts an inquiry under Regulation 20 calling for additional information `in relation to the inquiry' or only when orders are passed by the under Regulation 21, read with section 16(1) . The result is that strictly speaking, after the amendment of Regulation 19(5) on 24.3.1994 the latter part of Regulation 19(5) falls into Chapters III and IV of the Regulations which are referable to `Inquiries' under section 16 of the Act, rather than into Chapter II which deals with `References' under section 15 . The Chapter headings cannot, in out opinion, be treated as rigid compartments. ", "There can, therefore, be no difficulty in holding that after the amendment to Regulation 19 w.e.f. 24.3.1994, once the reference is registered and when once it is mandatory simultaneously to call for information/documents from the informant and such a direction is given, then inquiry under section 16(1) must - for the purposes of section 22 - be deemed to have commenced. Section 22 and the prohibitions contained in it shall immediately come into play. In that view of the matter, we need not go into the correctness of the view expressed by the Calcutta, Rajasthan and Bombay which relied upon the unamended Regulation 19. Point 2 is decided accordingly. ", "On the facts of this case, the impugned orders dated 28.7.1997 and 8.8.1997 of have been passed after the BIFR proceedings reached the stage of second part of Regulation 19(5) on 24.7.1997 that is to say, when proceedings, as per the amended Regulation 19(5) reached the stage of inquiry under section 16(1) . It must, therefore, be deemed that the said orders are illegal and are in violation of the prohibition contained in section 22 of the Act. ", "For the aforesaid reasons, the order passed by the Division Bench on 28.7.97 appointing Receiver and the order passed by another Bench of on 8.8.97 restoring the provisional liquidator, are set aside. The Civil appeals are accordingly allowed. There will be no order as to costs. The respondents are free, if need be, to approach the under section 22 and section 22A of the Act for further orders, if any, in addition to the orders already passed by the in this behalf."], "relevant_candidates": ["0000451152", "0000971059", "0001229840", "0001629574", "0001737795"]} {"id": "0001216757", "text": ["PETITIONER: RAI RAMKRISHNA & OTHERS Vs. RESPONDENT: THE STATE OF BIHAR DATE OF JUDGMENT: 11/02/1963 BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. WANCHOO, K.N. HIDAYATULLAH, M. GUPTA, K.C. DAS SHAH, J.C. CITATION: 1963 AIR 1667 1964 SCR (1) 897 CITATOR INFO : R 1964 SC 925 (30) F 1964 SC1667 (9) R 1966 SC 764 (28) RF 1968 SC1138 (24) E 1968 SC1227 (4) R 1970 SC 169 (11,12) R 1972 SC2455 (6,10) R 1973 SC1034 (13) E&R 1974 SC 436 (38,39,40,42) F 1976 SC 182 (25) RF 1976 SC 997 (4) F 1980 SC 271 (43,49) E 1984 SC1194 (32) MV 1985 SC 921 (74) RF 1988 SC 191 (30) ACT: Taxing Statute-Tax on passengers and goods-Retrospective operation-Validity-Restrictions, if unreasonable-Fundamental rights, if infringed-State's power of taxation--Constitution of India, Arts. 19(1)(f) and (g), (5), (6), 304(b), Seventh Schedule, List II, Entry 56-Bihar - Finance Act , 1950 (Bihar 17 of 1950)-Bihar Taxation on Passengers and Goods (Carried by Public Service Motor, Vehicles) Act , 1961, (Bihar 17 of 1961) as. 1 (3), 23(b). HEADNOTE: On March 30, 1950, passed the Bihar Finance Act, 1950. That Act levied a tax on passengers and goods carried by public service motor vehicles in Bihar. The appellants challenged the validity of the Act and certain provisions of the Act were struck down by this Court. The respondent then issued the Bihar Ordinance No. 11 of 1961 on August 1, 1961. By that Ordinance, the provisions of the Act of 1950 which had been struck down by this Court were validated and brought into force retrospectively from the date when the earlier Act purported to come into force. Later on, the provisions of the said Ordinance were incorporated in the Bihar 898 Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961. As a result of the retrospective operation of the Act of 1961, its material provisions were deemed to have come into force from April 1, 1950, the date on which the Act of 1950 came into force. The appellants challenged the validity of the Act of 1961 but their writ petitions were dismissed by which held that the Act in its entirety was valid. The appellants came to this Court by special leave. The appellants conceded in this Court that the Act of 1961 in its prospective operation was perfectly valid and s. 23 (a) which validated the acts done under the Act of 1950 was valid. What was contended by the appellants was that the provisions of s. 23(b) in so far as they referred to proceedings commenced under the Act of 1950 but not completed before the Act of 1961 came into force were invalid. It was also contended that the retrospective operation prescribed by s. 1(3) and a part of s. 23(b) so completely altered the character of the tax proposed to be retrospectively recovered that it introduced a serious infirmity in the legislative competence of itself and the retrospective operation was, so unreasonable that it could not be saved either under Art, 304(b) or Art. 19(5) and (6) of the Constitution of India. Held, that if in its essential features a taxing statute is within the competence of the which passed it by reference to the relevant entry in the List, its character is not necessarily changed merely by its retrospective operation so as to make the said retrospective operation outside the legislative competence of the said legislature. The challenge to the validity of the retrospective operation of the Act on the ground that the provision was beyond the legislative competence of , must be rejected. Held, also that the restriction imposed on the fundamental rights of the appellants under Art. 19(1)(f) and (g) by the retrospective operation of the Act was reasonable within the meaning of Arts. 19(5) and (6) and Art. 304(b). The test of the length of time covered by the retrospective operations cannot by itself be treated as a decisive test. Where the legislature can make a valid law, it can provide not only for the prospective operation of the material provisions of the said law, but it can also provide for ;he retrospective operation of the said provisions. The legislative power includes the subsidiary or the auxiliary power to validate law which is found to be, invalid. If a law passed by the legislature 899 is struck down by the Courts, it is competent to the appropriate legislature to pass a validating law so as to make the provisions of the earlier law effective from the date when it was passed. The power of taxing people and their property is an essential attribute of Government and the Government can legitimately exercise the said power by reference to the objects to which it is applicable to the utmost extent to which Government thinks it expedient to do so. The objects to be taxed so long as they happen to be within the legislative competence of the legislature, can be taxed by the legislature according to the exigencies of its needs, because there can be no doubt that the State is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the legislature. , 1 S.C.R. 809, , 1 S.C.R. 491, United Provinces v. Mst. Atiqa Begum F.C.R. 110, , S.C.R. 587, , S.C.R. 12, , 3 S.C.R. 77, , 1 S.C.R. 220, , S.C.R. 1355, , S.C.R. 1422, , 2 S.C.R. 1, and , Supp. 2 S.C.R. 1, referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 16 and 17 of 1962. ", "Appeals by special leave from the judgment and order dated September 5, 1962, of in Misc. judl. Cases Nos. 916 and 918 of 1961. ", ", , , and for the appellants. ", ", , , , and , for the respondent. ", "900 ", "1963. February 11. The judgment of the Court was delivered by GAJENDRAGADKAR,J.-The short question which these two appeals raise for our decision is in regard to the validity of the retrospective operation of the Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961 (No. 17 of 1961) (hereinafter called \" The Act '). It is true that the two writ petitions Nos. 916/1961 and 918/1961 filed by the appellants and respectively in at Patna along with 18 others under Articles 226 and 227 of the Constitution had challenged the validity of the whole of the Act. has held that the Act is valid both in its prospective as well as its retrospective operation. In their appeals brought to this Court by special leave against the said judgment, the appellants do not challenge the conclusion of that the Act is valid in so far as its prospective operation is concerned; they have confined their appeals to its retrospective operation. Eighteen other petitioners who had joined the appellants in have accepted the decision of and have not come to this Court in appeal. ", "Before dealing with the points raised by the appellants, it is necessary to set out briefly the background of the present dispute : On March, 30, 1950, passed the Bihar Finance Act, 1950 (Bihar Act 17 of 1950); this Act levied a tax on passengers and goods carried by public service motor vehicles in Bihar. Nearly a year after this Act came into force, the appellants challenged its validity by instituting a suit No. 60/1951 in at Gaya on May 5, 1951. In this suit, the appellants prayed that the provisions of Part III of the said Act were unconstitutional and asked for an injunction restraining the respondent, the State of Bihar, from levying and realising the said tax. It appears that a similar suit was instituted (No. 57/1951) on behalf of the passengers and owners of goods for obtaining similar reliefs against the bus operators. This latter suit was filed by the passengers and owners of goods in a representative capacity under O. 1 r. ", "8. Both these suits were transferred to for disposal. A special Bench of which heard the said two suits dismissed them on May 8, 1952. found that the said Act of 1950 did not contravene Art. 301 of the Constitution and so, its validity was beyond challenge. The appellants then preferred an appeal to this Court No. 53/1952. Pending the said appealin this Court, a similar question had been decided by this Court in the case of (1), In consequence, when the appellants' appeal came for disposal before this Court, it was conceded by the respondent that the said appeal was covered by the decision of this Court in the case of , and that in accordance with the said decision, the appeal had to be allowed. That is why the appeal was allowed and the appellants were granted the declaration and injunction claimed by them in their suit. This judgment was pronounced on December 12, 1960. ", "The respondent then issued an Ordinance (Bihar Ordinance No. II of 1961) on August 1, 1961. By this Ordinance' the material provisions of the earlier Act Of 1950 which had been struck down by this Court were validated and brought into force retrospectively from the date when the earlier Act had purported to come into force. Subsequently, the provisions of the said Ordinance were incorporated in the Act which was duly passed by and received the assent of (1) [1961] 1 S.C.R. 809. ", "902 ", "the President on September 23, 1961. As a result of the retrospective operation of this Act, its material provisions are deemed to have come into force on April 1, 1950, that is to say, the date on which the earlier Act of 1950 had come into force. That, in brief, is the background of the present legislation. ", "The appellants and the other petitioners who had joined by filing several petitions in had challenged the validity of the Act on several grounds. has rejected all these grounds and has taken the view that the Act in its entirety is valid. has found that the provisions of the Act no doubt take it within the purview of Part XIII of the Constitution; but it has held that the Act has been passed with the previous sanction of the President and the restrictions imposed by it are otherwise reasonable, and so, it is saved under Art. 304 ", "(b) of the Constitution. The plea made by the respondent that the taxing provisions of the Act were compensatory in character and were, therefore, valid, was rejected by . held that the principle that a taxing statute which levies a compensatory or regulatory tax is not invalid which has been laid down by the majority decision of this Court in the case of (1), was not applicable to the provisions of the Act. The argument that the Act was invalid because it required the appellants to act as the Agents of the respondent for collecting the tax from the passengers and from the owners of the goods without payment of any remuneration, was rejected by . It was also urged that the Act contravened the provisions of Art. 199 (4) of the Constitution, but was not impressed with this argument; and the plea that the matters in dispute between the appellants and-the respondent are really concluded by res judicata, (1) 1 S.C.R. 491. ", "903 ", "appeared to without any substance. That is how the writ petitions filed by the appellants failed, and so, they have come to this Court confining their challenge only to the validity of the restrospective operation of the Act. ", "At this stage, it is necessary to refer to the material provisions of the earlier Acts and examine the scheme of the Act impugned. The Finance Act of 1950 was an amending Act; it was passed because it was thought expedient by to amend the earlier Bihar Sales Tax Act, 1947, and the Bihar Agricultural Income-Tax - Act, 1948. Section 12 of the said Act levied a tax on passengers and goods carried or transported by public service vehicles and public carriers. Section 12 (1) prescribed the rate of the said taxation @ As.-/2/-in a rupee on all fares and freights payable to owners of such motor cabs, stage carriages, contract carriages or public carriers,, as carried the goods and passengers in question. Sub-section (2) dealt with the cases where any fare or freight was charged in a lump sum either for carrying goods or by way of contribution for a season ticket, or otherwise; and sub-section (3) provided that every owner of the public vehicle shall pay into the full amount of the tax due from him under sub-section (1) or sub-section (2) in such a manner and at such intervals as may be prescribed and shall furnish such returns by such dates and to such authority as may be prescribed. ", "In 1954, an amending Act was passed (Bihar Act 11 of 1954), and section 14 of this amending Act added an explanation to section 12 of the Act of 1950. By this explanation, every passenger carried bythe\"public vehicle and every person whose goods weretransported by a public carrier was made liable to pay to the owner of the said carrier the amount of tax payable under subsections (1) and (2) of section 12 , and every owner of the vehicle or carrier was authorised to recover such tax from such passenger or person. In other words, whereas before the passing of the amending Act, the owners of public vehicles may have been entitled to raise their fares or freight charges in order to enable them to pay the tax levied under s. 12 of the Act of 1950, after the amending Act was passed, they became entitled to recover the specific amounts from passengers and owners of goods by way of tax payable by them under the said section. ", "After the Act as thus amended was struck down by this Court on December, 12, 1960 an Ordinance was passed and its provisions were included in the impugned Act which ultimately became the law in Bihar on September 25, 1961. The Act consists of 26 sections. Section 1 (3) expressly provides that the Act shall be deemed to have come into force on the first day of April, 1950. Section 2 defines, inter alia, goods, owners, passenger and public service motor vehicle. Section 3 is the charging section. Section 3 (1) provides that on and from the date on which this Act is deemed to have come into force under sub-section (3) of section 1 , there shall be levied and paid to a tax on all passengers and goods carried by a public service motor vehicles Then the sub-section prescribes the rate at which the said tax has to be paid. There is a proviso to this sub-section which it is unnecessary to set out. Sub-section (2) lays down that every owner shall, in the manner prescribed in section 9 , pay to the amount of tax due under this section, and sub-section (3) -adds that every passenger carried by a public service motor vehicle and every person whose goods are carried by such vehicle shall be liable to pay to the owner the amount of tax payable under this section and every owner shall recover such tax from such passenger or person, as the case may be. There are three more sub-sections to this section which need not detain us. It would be noticed that, the effect of s. 3 is that the passengers and the owners of goods are made liable to pay the tax to the owner of the public service motor vehicle and the latter is made liable to pay the tax to , and both these provisions act retrospectively by virtue of s. 1 (3). In other words, the tax is levied on passengers and goods carried by the public vehicles, and the machinery devised is that the tax would be recovered from the owners of such vehicles. Section 4 requires the owners of public service motor vehicles to register their vehicles. Under s. 5 , security has to be furnished by such owners; and returns have to be submitted under s. 6 . Section 7 deals with the procedure for the assessment of tax. Section 8 provides for the payment of fixed amount in lieu of tax, and under s. 9 provision is made for the payment and recovery of tax. Section 10 deals with the special mode of recovery. Section 11 deals with cases of transfer of public service motor vehicle and makes both the transferor and the transferee liable for the tax as prescribed by it. Refund is dealt with by s. 12 ; and appeal, revision and review are provided by ss. 13 , 14 and 15 respectively. Under s. 16 , power is given, subject to such rules as may be made by to the Commissioner or the prescribed authority to secure the production, inspection and seizure of accounts and documents and search of premises and vehicles. Section 17 makes the Commissioner and the prescribed authority public servants ; and section 18 deals with offences and penalties. Section 19 deals with compounding of offences. Section 20 prescribes the usual bar to certain proceedings, and section 21 refers to. the limitation of certain suits and prosecutions. Section 22 confers power on to make rules. Section 23 is important. In effect, it provides that the acts done under Bihar Act 17 of 1950 shall be deemed to have been done under this Act. ", "906 ", "It reads thus :- ", "\"Notwithstanding any judgment, decree or order of any , tribunal or authority- ", "(a) any amount paid, collected or recovered or purported to have been paid, collected or recovered as tax or Penalty under the provisions of Part III of the Bihar Finance Act, 1950 (Bihar Act XVII of 1950), as amended from time to time (hereinafter referred to as the \"said Act\") or the rules made thereunder during the period beginning with the first day of April, 1950 and ending on the thirty-first day of July, 1961, shall be deemed to have been validly levied, paid, collected, or recovered under the provisions of this Act ; and ", "(b) any proceeding commenced or purported to have been commenced for the assessment collection or recovery of any amount as tax or penalty under the provisions of the said Act or the rules made thereunder during the period specified in clause (a) shall be deemed to have been commenced and conducted in accordance with the provisions of this Act, and, if not already completed, shall be continued and cornpleted of this Act.\" in- ", "accordance with the provisions There is a proviso to this section which is not relevant for our purpose. Sections 24 and 25 deal with repeals and savings; and section 26 provides that if any difficulty arises in giving effect to the provisions of the Act - the State Government may pass an order in that behalf, subject to the limitations prescribed by the said section. That, broadly stated, is the scheme of the Act. ", "907 ", "In order to appreciate the merits of the contentions raised by Mr. on behalf of the appellants, it is necessary to specify clearly the limited character of the controversy between the parties in appeal. The appellants concede that the Act in its prospective operation is perfectly valid. They also concede that s.23(a) which validates the acts done under the earlier Act of 1950 is valid. It would be noticed that apart from the general retrospective operation of the Act for which a provision has been made by s.1(3), s. 23 itself makes a clear retrospective validating provision and it is not disputed that the acts validated by s.23(a) have been properly validated. With regard to the validating provision contained in s. 23 (b), it has been urged that the said provision in so far as it refers to proceedings commenced under the earlier Act but not completed before the impugned Act came into force, is invalid. The rest of the provisions of s. 23 (b) are also not challenged. In other words, it is not disputed that in its prospective operation, the Art has been validly passed by exercising its legislative power under Entry 56 in List II of the Seventh Schedule of the Constitution. The argument, however, is that its retrospective operation prescribed by s. 1 (3) and by a part of s. 23 (b) so completely alters the character of the tax proposed to be retrospectively recovered that it introduces a serious infirmity in the legislative competence of itself. Alternatively, it is argued that the said retrospective operation is so unreasonable that it cannot be saved either under Art. 304 ", "(b) or Art. 19 (5) and (6). It is these two narrow points which call for our decision in the present appeals. ", "In dealing with this controversy, it is necessary: to bear in mind some points on which there, is no dispute. The entries in the Seventh Schedule conferring legislative power on the legislatures in question must receive the widest denotation. This position is not disputed. Entry 56 of the Second List refers to taxes on goods and passengers carried by road or on inland waterways. It is clear that the State Legislatures are authorised to levy taxes on goods and passengers by this entry. It is not on all goods and passengers that taxes can be imposed under this entry; it is on goods and passengers carried by road or on inland waterways that taxes can be imposed. The expression \"carried by road or on inland waterways\" is an adjectival clause qualifying goods and passen gers, that is to say, it is goods and passengers of the said description that have to be taxed under this entry. Nevertheless, it is obvious that the goods as such cannot pay taxes, and so taxes levied on goods have to be recovered from some persons, and these persons must have an intimate or direct connection or nexus with the goods before they can be called upon to pay the taxes in respect of the carried goods. Similarly, passengers who are carried are taxed under the entry. But, usually, it would be inexpedient, if not impossible, to recover the tax directly from the passengers and so, it would be expedient and convenient to provide for the recovery of the said tax from the owners of the vehicles themselves. That is why it is not disputed by Mr. that in enacting a law under en\", 56 in respect of taxes imposed on passengers carried by road or on inland waterways, it would be perfectly competent to the legislature to devise a machinery for the recovery of the said tax by requiring the bus operators or bus owners to pay the said tax. ", "The other point on which there is no dispute before us is that the legislative power conferred on the appropriate legislatures to enact laws in respect of topics covered by several entries in the three Lists can be exercised both prospectively and retrospectively. Where the legislature can make a valid law, it may provide not only for the prospective operation of the material provisions of the said law, but it can also provide for the retrospective operation of the said provisions. Similarly, there is no doubt that the legislative power in question includes the subsidiary or the auxiliary power to validate laws which have been found to be invalid. If a law passed by a legislature is struck down by the Courts as being invalid for one infirmity or another, it would be competent to the appropriate legislature to cure the said infirmity and pass a validating law so as to make the provisions of the said earlier law effective from the date when it was passed. This position is treated as firmly established since the decision of in the case of . (1). It is also true that though the can pass a law and make its provisions, retrospective, it would be relevant to consider the effect of the said retrospective operation of the law both in respect of the legislative competence of the legislature and the reasonableness of the restrictions imposed by it. In other words, it may be open to a party affected by the provisions of the Act to contend that the retrospective operation of the Act so completely alters the character of the tax imposed by it as to take it outside the limits of the entry which gives the legislature competence to enact the law; or, it may be open to it to contend in the alternative that the, restrictions imposed by the Act are so unreasonable that they should be struck down on the ground that they contravene his fundamental rights guaranteed under Art. 19 (1) (f) & (g). This position cannot be, and has not been, disputed by Mr. who appears for the respondent, vide (2 ), and (3). ", "In view of the recent decisions of this Mr. also concedes that taxing statutes are not beyond the pale, of the constitutional limitations (1) [1940] F.C.R. 110. ", "(2) [1954] S.C.R. 587, 626. ", "(3) [1954] S.C.R. 12, 1390 prescribed by Articles 19 and 14, and he also concedes that the test of reasonableness prescribed by Art. 304(b) is justiciable. It is, of course, true that the power of taxing the people and their property is an essential attribute of the Government and Government may legitimately exercise the said power by reference to the objects to which it is applicable to the utmost extent to which Government thinks it expedient to do so. The objects to be taxed so long as they happen to be within the legislative competence of the legislature can be taxed by the legislature- according to the exigencies of its needs, because there can be no doubt that the is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the legislature, and in dealing with the contention raised by a citizen that the taxing statute contravenes Art. 19 , courts would naturally be circumspect and cautious. Where for instance, it appears that the taxing statute is plainly discriminatory, or provides no procedural machinery for assessment and levy of the tax, or that it is confiscatory.. s would be justified in striking down the impugned statute as unconstitutional. In such cases, the character of the material provisions of the impugned statute is such that the would feel justified in taking the view that, in substance, the taxing statute is a cloak adopted by the legislature for achieving its confiscatory purposes. This is illustrated by the decision of this in the case of (1), where a taxing statute was struck down because it suffered from several fatal infirmities. On the other hand, we may refer to the case of (1), where a challenge to the taxing statute on the ground that its provisions were unreasonable was rejected and it was observed that unless the infirmities in the (1) 3 S.C.R, 77, (2) 1 B.C.R. 220, impugned statute were of such a serious nature as to justify its description as a colourable exercise of legislative power; the would uphold a taxing statute. It is in the light of these principles of law which are not in dispute between the parties before us that we must proceed to examine the arguments urged by Mr. in challenging the validity of the retrospective operation of the Act. Mr. contends that one has merely to read the provisions of s. 3(3) to realise that the character of the tax has been completely altered by its retrospective operation. It would be recalled that s. 3(3) , inter alia, provides that every passenger carried by a public service motor vehicle shall be liable to pay to the owner thereof the amount of tax payable under the said sub-section because the scheme of the Act is that the tax is paid by the passenger to the owner and by the owner to the ; and both these provisions are retroactive. However, in respect of passengers carried by the owner between 1.4.1950 and the date of the Act, how can the owner recover the tax he is now bound to pay to the , asks Mr. ? Prima facie, the argument appears to be attractive, but a closer examination would show that the difficulty which the owner may experience,in recovering the tax from the passengers will not necessarily alter the character of the tax. If the scheme of s. 3 for the levy and recovery of the tax is valid under entry 56 of List II so far as future recoveries are concerned, it is not easy to see how it can be said that the character of the tax is radically changed in the present circumstances, because it would be very difficult, if not impossible, for the owner to recover the tax from the passengers whom he has carried in the past. The tax recovered retrospectively like the one which will be recovered prospectively still continues to be a tax on passengers and it adopts the same machinery for the recovery of the tax both as to the past as well as to the future. In this connection, we ought to bear in mind that the incidence of the tax should not be confused with the machinery adopted by the statute to recover the said tax. Besides, as we will point out later, it is only during a comparatively short period that the owners' difficulties assume a significant form. d generally, it may not be unreasonable to assume that from the time when the Act of 1950 was brought into force it was known to all the owners that the legislature had imposed a tax in respect of passengers and -goods carried by them and since then, and particularly after the amendment of 1951, they may have raised their fares and freights to absorb their -liability to pay the tax to the . But apart from that, it seems to us that the nature of the tax in the present case is the same both in regard to prospective and retrospective operations, and so, it is difficult to entertain the argument that the tax has ceased to be a tax on passengers and is, therefore, outside Entry 56. The argument that the retrospective operation of the Act is beyond the legislative competence of must, therefore, be rejected. In this connection, we cannot ignore the fact that prior to the passing of the impugned Act there was in operation a similar statute since April 1, 1950 which was struck down as unconstitutional on the ground of want of assent of the President. This aspect of the matter, no doubt, will have to be further examined in the context of the appellants' case that tile retrospective operation of the Act introduces a restriction which is unreasonable both under Art. lb (1) (f)\"& (g) and Art. 304 ", "(b); but it has no validity in challenging the legislative competence of in that behalf. We may, in this connection, incidentally refer to some decisions of this Court where a similar argument was urged in regard to the retrospective operation of some Acts. It appears that in those cases, the argument proceeded on a distinction between direct and indirect taxes. It is well-known that made a pointed distinction between direct and indirect taxation and this distinction was reflected in s. 92 (11) of the British North America Act which gave to the Legislatures of the Provinces exclusive power to make laws in relation to direct taxation within the Province. No such distinction can be made in regard to the legislative power conferred on the appropriate legislatures by the respective entries in the Seventh Schedule of our Constitution, and so, it is unnecessary for us to consider any argument based on the said distinction in the present case. However, this argument was urged before this Court in challenging the validity of some Acts by reference to their retrospective operation. , (1), where this Court was called upon to examine the validity of the Bihar Sales Tax Act, 1947 as amended by the Amendment Act of 1948, one of the points urged before this Court was that whereas sales-tax is an indirect tax on the consumer inasmuch as the idea in imposing the said tax on the seller is that he should pass it on to his purchaser and collect it from him, the retrospective operation of the Act made the imposition of the said tax a direct tax on the seller and so, it was invalid. This argument was rejected. A similar objection against the retrospective' operation of the Madras General Sales Tax Act, 1939 as adapted to Andhra by the Sales Tax Laws Validation Act , 1956 was rejected in the case ( 2) (3), the argument that the character of the sales-tax as enacted by the U. P. Sales Tax Act, 1948, was radically altered in its retrospective operation, was likewise rejected. The same argument (1) S.C.R. 13.55,1377. ", "(2) [1958] S.C.R, 1422. ", "(3) [1962] 2 S.C.R. 1. ", "914 ", "in respect of an excise tax raised before this Court in the case of (1), was for similar reasons rejected. The position, therefore, appears to be well settled that if in its essential features a taxing statute is within the legislative competence of the legislature which passed it by reference to the relevant entry in the List, its character is not necessarily changed merely by its retrospective operation so as to make the said retrospective operation outside the legislative competence of the said legislature, and so, we must hold that the. challenge to the validity of the retrospective operation of the Act on the ground that the provision in that behalf is beyond the legislative competence of , must be rejected. That takes us to the question as to whether the restriction imposed on the appellants' right under Art. 19 (1) (f) add (g) by the retrospective operation of the Act is reasonable so as to attract the provisions of Art. 19 (5) and (6). The same question arises in regard to the test of reasonableness prescribed by Art. 304 (b). Mr. contends that since it is not disputed that the retrospective operation of a taxing statute is a relevant fact to consider in determining its reasonableness, it may not be unfair to suggest that if the retrospective operation covers a long period like ten years, it should be held to impose a restriction which is unreasonable and as such, must be struck down as being unconstitutional. In support of this plea, Mr. has referred us to the observations (2) made by . \"Tax statutes\", says , \"may be retrospective if the legislature clearly so intends. If the retrospective feature of a law is arbitrary and burdensome, the statute will not be sustained. The reasonableness of each retroactive tax statute will depend on the circumstances of each case. A statute retroactively (1) Supp. 2 S.C.R. 1. ", "(2) Sutherland on Statutes and Statutory Construction, 1943 Ed, Vol. 2 Paragraph 2211 pp. 131-133. ", "915 ", "imposing a tax on income earned between the adoption of an amendment making income taxes legal and the passage of the income-tax act is not unreasonable. Likewise, an income-tax not retroactive beyond the year of its passage is clearly valid. The longest period of retroactivity yet sustained has been three years. In general, income taxes are valid although retroactive, if they affect prior but recent transaction.\" Basing himself on these observations, Mr. contends that since the period covered by the retroactive operation of the Act is between April, 1, 1950 and September 25, 1961, it should be held that the restrictions imposed by such retroactive operation are unreasonable, and so, the Act should be struck down in regard to its retrospective operation. ", "We do not think that such a mechanical test can be applied in determining the validity of the retrospective operation of the Act. It is conceivable that cases may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional; but the test of the length of time covered by the retrospective operation cannot by itself, necessarily be a decisive test. We may have a statute whose retrospective operation covers at comparatively short period and yet it is possible that the nature of the restriction imposed by it+ may be of such a character as to introduce a serious infirmity in the retrospective operation. On the other hand, we may get cases where the period covered by the retrospective operation of the statue, though long, will not introduce any such infirmity. Take the case of a Validating Act . If a statute passed by the legislature is challenged in proceedings before a , and the challenge is ultimately sustained and the statute is struck down, it is not unlikely that the judicial proceedings may occupy a fairly long period and the legislature may well decide to await the final decision in the said proceedings before it uses its legislative power to cure the alleged infirmity in the earlier Act. In such a case, if after the final judicial verdict is pronounced in the matter the legislature passes a validating Act, it may well cover a long period taken by the judicial proceedings in and yet it would be inappropriate to hold that because the retrospective operation covers a long period, therefore, the restriction imposed by it is unreasonable. That is why we think the test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test. Take the present case. The earlier Act was passed in 1950 and came into force on April 1, 1950, and the tax imposed by it was being collected until an order of injunction was passed in the two suits to which we have already referred. The said suits were dismissed on May 8, 1952 but the appeals preferred by the appellants were pending in this until December 12, 1960. In other words, between 1950 and 1960 proceedings were pending in court in which the validity of the Act was being examined, and if a Validating Act had to be passed, the legislature cannot be blamed for having awaited the final decision of this in the said proceedings. Thus the period covered between the institution of the said two suits and their final disposal by this cannot be pressed into service for challenging the reasonableness of the retrospective operation of the Act. ", "It is, however, urged that the retrospective operation of the Act during the period covered by the orders of injunction issued by in the said two suits must be held to be unreasonable, and the argument is that in regard to the said period the retrospective operation should be struck down. Similarly,- it is urged that the said retrospective operation should be struck down for the period between December 12, 1960 when this Court struck down the earlier Act and August 1, 1961 when Ordinance 11 of 1961 was issued. We do not think it would be appropriate in the present case to examine the validity of the retrospective operation by reference to particular periods of time covered by it in the manner suggested by Mr. ; and so, we are not prepared to accept his argument that the retrospective operation of the Act is invalid so far as the period between December 12, 1960, when the earlier Act was struck down by this Court, and August 1, 1961, when the Ordinance was issued, is concerned. It would be realised that in such a situation there 'would always be some time lag between the date when a particular Act is struck down as' unconstitutional and the date on which a retrospective validating Act is passed. Besides, the circumstances under which the orders of injunction were passed by cannot be altogether ignored. Mr. contends that the two suits filed by the appellants and the passengers and the owners of goods respectively disclose a common design and can be treated as friendly suits actuated by the same motive, and we do not think that this contention can be rejected as Wholly unjustified. Apart from it, when the injunction was issued against the respondent in the appellants' suit, the appellants gave an undertaking in writing to pay the taxes partyable on the fares and freights as provided by the law in case their suit failed. As we have already seen their suit was dismissed by on May 8, 1952, so that it was then open to the respondent to call upon the appellants to pay the taxes for the period covered by the orders of injuction and to require them to pay future taxes because the earlier Act under which the taxes were recovered was held to be valid by . It is no doubt suggested by Mr. that the spirit of the undertaking required that no recovery should be made until the final disposal of the proceedings between the parties. We do not see how this argument about the spirit of the undertaking can avail the appellants. As soon as their suit against the respondent was dismissed, the respondent was at liberty to enforce the provisions of the Act and the dismissal of the suit made it possible for the respondent to claim the taxes even for the period covered by the order of injunction. We do not think that in the context, the dismissal of the suit can legitimately refer to the final disposal of the appeal filed by the appellants before this Court. In any event, having regard to the agencies, of the two suits, the nature of the orders of Injunction issued in them and the character of the undertaking given by the appellants, we do not think it would be possible to sustatain Mr. 's argument that for the period of the injunction the restrospective operation of the Act should be held to be invalid. In this connection, it would be relevant to refer to another fact which appears on the record. Along with the appellants, other bus owners had filed writ petitions challenging the validity of the Act. These petitioners have not appealed to this Court presumably because their cases fall under the provisions of s. 23 (a) of the Act. It is likely that they had paid the amounts, and since the amounts paid under the provisions of the earlier Act are now deemed to have been paid under the provisions of this Act, they did not think it worthwhile to come to this Court against the decision of . Apart from that, it is not unlikely that other bus owners may have made similar payments and the appellants have, therefore, come to this Court because they have made no payments and so, their cases do not fail under s. 23 (a), or may be, their cases fall under s. 23 (b). The position, therefore, is that the retrospective operation of s. 23 (a) & (b) cover respectively cases of payments actually made under the provisions of the earlier Act, and cases pending inquiry, and the retrospective operation of s. 3 (3) read with s. 1 (3) only applies to cases of persons who did not pay the tax during the whole of the period, or whose cases were not pending ; and it is this limited class of persons whose interests are represented by the appellants before us. Having regard to the somewhat unusual circumstances which furnish the background for the enactment of the impugned statute, we do not think that we could accept Mr. 's argument that the retrospective operation of the Act imposes restrictions on the appellants which contravenue the provisions of Art. 19 (1) (f) & (g). In our opinion, having regard to all the relevant facts of this case, the restrictions imposed by the said retrospective operation must be held to be reasonable and in the public interest under Art. 19 (5) and (6) and also reasonable under Art. 304 ", "(b). ", "There is only one more point to which reference must be made. We have already noticed that has rejected the argument urged on behalf of the that the tax imposed by the Act is of a compensatory or regulatory character and therefore, is valid. Mr. wanted to press that part of the case of the before us. He urged that according to the majority decision of this Court in the case of (1), it must now be taken to be settled that \"regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301 and such measures need not comply with the requirements of the proviso to Art. 304 (b) of the Constitution.\" (p. 1424). On the other hand, Mr. has argued that this doctrine of compensatory or regulatory or taxation which is mainly based on Australian decisions cannot be extended to the present case, and he contends that if the doctrine of regulatory or compensatory taxes is very (1) 1 S.C.R. 491. ", "920 ", "liberally construed, it would tend to cover all taxes, because in a -loose sense, all taxes raised by the State can ultimately be said to be compensatory in a farfetched manner, and in that way, the well-recognised constitutional difference between a tax and a fee will be obliterated and the provisions of Part XIII of the Constitution will lose all their significance. Part XIII contains provisions which constitute a self-contained 'Ode and we need not really travel outside the said provision in determining the validity of the tax imposed by the Act. Since we have come to the conclusion that the challenge to the validity of the retrospective operation of the Act cannot be sustained, we do not think it necessary to pursue this matter any further. In the result, the appeals fail and are dismissed with costs. ", "Appeal dismissed."], "relevant_candidates": ["0000258508", "0000304499", "0000514162", "0000973363", "0001157189", "0001291316", "0001404351", "0001629177", "0001660833", "0001781444"]} {"id": "0001217539", "text": [", Acting C.J. ", "1. This is an appeal under Clause 15 of the Letters Patent from the judgment of Mr. Justice in a suit for recovery of possession of land upon declaration of title, The subject-matter of the litigation is an occupancy holding which belonged to one . the plaintiff purchased it in 1910 in execution of a decree, and the sale was made expressly subject to a mortgage in favour of one . subsequently sued to enforce his security; but in that suit the original mortgagor alone was joined as a party; the plaintiff, for some unexplained reason, was not joined as a defendant. A. decree was obtained in due course by the mortgagee and at the execution sale, which followed, the mortgagee became the purchaser. Subsequently he transferred the property to the third defendant, from whom the plaintiff now seeks to recover possession. ", "2. The of first instance held that the plaintiff was entitled to a decree for possession without redeeming the purchaser at the mortgage sale. Upon appeal, the District Judge reversed that decision and held that although the title of the plaintiff as the holder of the equity of redemption might be declared, his claim for possession must be rejected as he had not offered to redeem the purchaser at the mortgage-sale. On appeal to this Mr. Justice has reversed the decision of the District Judge and has restored the decree of the of first instance on the authority of the decisions in the cases of v. 4 C.W.N. 452 and v. 6 C.L.J. 609. We are of opinion that this decree cannot be supported. ", "3. On the facts stated, it is plain that the plaintiff is the purchaser of the equity of redemption while the contesting defendant is the purchaser at the mortgage-sale. The plaintiff, as holder of the equity of redemption, is not entitled to recover possession, after the mortgage sale has taken place, The fact that he was left out of the mortgage suit does not nullify the decree in that litigation. The true result is, as was pointed out, upon a review of the earlier decisions, in v. 6 C.L.J. 612 : 12 C.W.N. 107 that the omission to make the plaintiff a party to the mortgage-suit leaves unaffected his right to redeem [of. Brojonath Koondco Chowdry V. Khelut Chunder Ghose 14 M.I.A. 144 : 8 B.L.R. 104 (P.C.) : 16 W.R. 33 (P.C.) : 2 Suth. P.C.J. 480 : 2 Sar. P.C.J. 711 : 20 E.R. 740, Umes Chunder Sircar v. Zahur tatima 18 C. 164 : 17 I.A. 201 : 5 Sar. P.C.J. 507 : 9 Ind. Dec. (N.S.) 110; anam Misser 21 C. 70 : 20 I.A. 165 : 16 Ind. Jur. 536 : 6 Sar. P.C.J. 356 : 10 Ind. Dec. (N.S.) 679; the Hnyin v. 5 Ind. Cas. 151 : 37 C. 239 : 14 C.W.N. 214 : 11 C.L.J. 166 : 3 Bur. L.T. 27 : 12 Bom. L.R. 234 : 20 M.L.J. 153 : 37 I.A. 19 (P.C.). It is not necessary for our present purpose to consider whether the mortgagee can still sue the plaintiff on his mortgage [of. v. 30 C. 599 : 7 C.W.N. 766 (F.B.); 9 Ind. Cas. 513 : 21 M.L.J. 213 : 9 M.L.T. 431 : (1911) 1 M.W.N. 165 . It is abundantly clear that he need not sue again on his mortgage Ganga Das Bhattar v. 5 C.L.J. 315 : 11 C.W.N. 403 and is not bound to deliver up possession to the plaintiff till he has been redcemed by the latter on the footing of the mortgage decree. This view is supported by the decisions in 32 C. 891 : 9 C.W.N. 728 : 1 C.L.J. 371; v. 4 C.W.N. 266 and 44 Ind. Cas. 52 : 22 C.W.N. 543 : 28 C.L.J. 256. The cases of v. 4 C.W.N. 452 and v. 6 C.L.J. 609 may perhaps be difficult to reconcile with those just mentioned, but their correctness is open to doubt. ", "4. The plaintiff respondent has at this stage offered to redeem the defendant but for this, we would have directed that the decree should declare his right to redeem and disallow his claim for recovery of possession. ", "5. The result is that this appeal is allowed, the decree made by Mr. Justice set aside, and the case remitted to the District Judge so that a decree may be made in favour of the plaintiff as if this were framed as a suit for redemption. An account will betaken by the District Judge of the amount due on the mortgage decree, including interest thereon up to the date when the mortgagee purchaser was placed in possession by the , The interest due thereafter will be set off against the profits received from the land by the mortgagee purchaser. v. 5 C.L.J. 315 : 11 C.W.N. 403. The plaintiff must pay the contesting defendants their costs in all the s, which will be added to the sum due under the mortgage decree. If the aggregate sum so calculated is deposited by the plaintiff in to the credit of the contesting defendants, within six months from the date when the decree is drawn up by the District Judge pursuant to this judgment, the plaintiff will recover possession upon redemption. If the plaintiff fails to make the deposit as directed, the suit will stand dismissed with costs in all the s. ", "Fletcher, J. ", "6. I agree."], "relevant_candidates": ["0000524481", "0000561008", "0001009782", "0001690181"]} {"id": "0001225724", "text": ["PETITIONER: & Vs. RESPONDENT: STATE OF KERALA DATE OF JUDGMENT12/11/1975 BENCH: , HANS RAJ BENCH: , HANS RAJ BHAGWATI, P.N. FAZALALI, SYED MURTAZA CITATION: 1976 AIR 182 1976 SCR (2) 690 1976 SCC (3) 219 CITATOR INFO : R 1977 SC1459 (7) R 1980 SC 614 (40) D 1985 SC1211 (41) RF 1986 SC 649 (29) F 1989 SC1949 (7,8A) R 1990 SC1637 (33) ACT: Kerala Luxury Tax on Tobacco (Validation) Act, 1964 (9 of 1964) -if competent to enact-if could enact a taxation law retrospectivly. Constitution of India- Art. 304(b)- reasonable restriction-public interest-colourable legislation tests to decide. Entry 84 of List I and Entry 62 of List II Luxury- meaning of HEADNOTE: The Finance Act 1950 extended the Central Excise and Salt Act , 1944 to the Part of' Travancore Cochin and repealed the Cochin Tobacco Act, 1909 and the Tobacco Act (Travancore Act I of 1087). Thereafter a system of licensing was introduced by which the licensees were required to pay a specified fee in respect of tobacco imported into the . The appellants challenged unsuccessfully in the collection of the licence fee for the period between August 1950 and December 1957. The Act and rules having been declared by this Court as invalid ab initio, the refunded a portion of the licence fee collected. but the appellants filed writ petitions claiming refund of the remainder of the licence fee paid by them. During the pendency of the writ petitions the Kerala Luxury Tax on Tobacco (Validation) Act of 1964 (Act 9 of 1964) was passed by the legislature to provide for the levy of a luxury tax on tobacco and validate the levy and collection of fees for licences for the vend and stocking of tobacco for the period between August 17, 1950 and December 31, 1957 and it received the assent of the President. The appellants then challenged the validity of the 1964 Act, but the on the other hand demanded payment of the part of the fee earlier refunded to the parties The validity of the demand notice was questioned by the appellants on the question of validity of the 1964 Act, held that (1) the levy being in respect of goods produced outside the , was not an excise duty falling within Entry 84 of the Union List; (2) the tax clearly answers the description of luxury tax falling within entry 62 of , List; (3) however, the payment of the tax being a condition precedent to the bringing of the goods into the taxing territory, it was a direct impediment on the free flow of goods, and (4) even so, it is saved by Article 304(b) being n reason able tax levied in public interest. Dismissing the appeals, ^ HELD. (1) The judgment of this Court in . Supp. 2 S.C.R. 741 does not operate as res. judicata regarding the points in controversy in these appeals. What was held in that case was that the Cochin Tobacco Act and the similar Travancore Act taken along with the rules framed under those Acts were in substance law corresponding to the Central Excise and Salt Act . The Cochin Tobacco Act and the similar Travancore Act stood repealed on April 1, 1950 and there would be no power in the Government thereafter to frame new rules in August 1950 and January 1951 for there would be no law to support the new rules. In the instant case what is questioned is the constitutional validity of Act 9 of 1964 which was enacted subsequent to the above decision of this Court. [698 C-G] (2)(a) The argument that the provisions of the Act fell under Entry 84 of List I of the Seventh Schedule is bereft of force. The liability to pay the tax is on stocking and vending of tobacco. There is no provision in the Act which is concerned with production or manufacture of tobacco or which links the tax under its provisions with the manufacture or production of tobacco. [699-D-E] 691 (b) Excise duty is a tax on articles produced or manufactured in the taxing country. Generally speaking, the tax is on the manufacturer or producer, yet laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production. [698H, 699A] . Supp. 2 S.C.R. 741 referred to. (c) Where, however, the levy imposed or tax has no nexus with the manufacture or production of an article, the impost or tax cannot be regarded to be B one in the nature of excise duty. [699-B-C] (3) The word `luxury' has not been used in the sense of something pertaining to the exclusive preserve of' the rich. The connotation of the word `luxury' is something which conduces enjoyment over and above the necessaries of life. There is nothing static about what constitutes an article of luxury. The luxuries of yesterday could well become the necessities of today. Likewise, what constitutes necessity for citizens of one country or for those living in a particular climate may well be looked upon as an items of luxury for the nationals of another country or for those living in a different climate. A number of factors may have to be taken into account in adjudging the commodity as an article of luxury. [699 G, 701B] (4) (a) was right in its view that the levy of tax was violative of Article 301 of the Constitution. But while the can impose restrictions on the freedom of trade, commerce or intercourse between one and another or within any part of the territory of India as may be required in the public interest, so far as the legislatures are concerned, restrictions must satisfy two requirements, firstly they must be in public interest, and secondly, the restrictions should be reasonable. [701, F, 702DE] 3 S.C.R. 829 referred to, (b) To some extent every tax imposes an economic impediment to the activity taxed as compared with others not taxed. But that fact by itself would, not make it unreasonable. The law of taxation in the ultimate analysis is the result of' the balancing of several complex considerations. The legislatures have a wide discretion in the matter. [702G, 703-AB] (c) In considering the question whether the restriction is reasonable in public interest the Court will have to balance the importance of freedom of trade as against the requirement of public interest. [703- S S.C.R. 975 referred to. (d) The onus of showing that the restrictions on the freedom of trade, commerce or intercourse in the public interest are reasonable is upon the . [703D] In the present case the levy of luxury tax relates to tobacco the consumption of which is a health hazard. Regulation of the sale and stocking of such an article and treating it as an article of luxury by imposing a licence fee is a permissible restriction in public interest within Art. 304(b) of the Constition. [703-F] (e) The fact that the operation of the Act was confined to a particular area, and did not extend to the entire was due to historical reasons. The object of the Act was to validate the recoveries already made. [704-B] etc. v. of Andhra Pradesh JUDGMENT: ", "(f) The levy of tax is protected by Article 304(b) of the Constitution as the requirement of the proviso regarding the sanction of the President has been satisfied. Though the assent of the President was given subsequent to the passing or the Bill by , that fact would not affect the validity of the impugned Act in view of the provisions of Article 255 of the Constitution. [702 AB] (5)(a) Where a topic is not included within the relevant List dealing with the legislative competence of , , by making a law cannot attempt to confer such legislative competence on the State legislatures This principle would, however, have no application where what is sought to be done is to validate the recovery of licence fee for stocking and vending of tobacco. The impugned provisions have nothing to do with the production and manufacture of tobacco. The levy is sought to be made as luxury to which is within the competence of State legislature and not as excise duty which is beyond the legislative competence of the State legislature. If the levy in question could be justified under a provision which is within the legislative competent of the State legislature, the levy shall be held to be validly imposed and cannot be considered to be impermissible. [705-B-D] ", "(b) The impugned Act cannot be said to be a colourable piece of legislation. Where a challenge to the validity of a legal enactment is made on the ground that it is a colourable piece of legislation what is to be proved is that though the Act ostensibly is within the legislative competence of the legislature in substance and reality it covers a field which is outside its legislative competence. In the present case, in enacting the impugned provisions the legislature has exercised power of levying luxury tax in the shape of licence fee on the vend and stocking of tobacco. The enactment of a law for levying luxury tax is unquestionably within the legislative competence of the State legislature in view of Entry 62 in List II of the Seventh Schedule to the Constitution. [705- . 1 S.C.R. 523 and . 3 S.C.R. 242 distinguished. ", "(c) The State legislature has sought to validate the recovery of the amounts already made by treating those amounts as luxury tax. The fact that the validation of the levy entailed converting the character of the collection from an impermissible excise duty into permissible luxury tax would not make it an Inconstitutional. The only conditions are that the levy should be of a nature which can answer to the description of luxury tax and that the State legislature should be competent to enact a law for recovery of luxury tax. Both these conditions are satisfied. [706-FG] (6)(a) Where the State legislature can make valid law it can provide not only for the prospective operation of the material provisions of the law but can also provide for the retrospective operation of the provisions. [706-G] ", "(b) In judging the reasonableness of the retrospective operation of law for the purpose of Article 304(b ), the test of length of time covered by the retrospective operation could not by itself be treated as decisive. [706H, 707A] ", "(c) It is not correct to say that the legislation should be held to be invalid because its retrospective operation might operate harshly in some cases. [707A] 1 S.C.R. 897 and , Proprietor, Epari Chinna Moorthy & Sons. 7 S.C.R. 185 applied. ", "(d) If a provision regarding the levy of luxury tax is within the competence of the State legislature, the said legislature would be well within its competence to enact a law for recovery of an amount which though already refunded to a party, partakes of the nature of a luxury tax in the light of that law. [707-C] & CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1689- 1690 and 1692-1705 of 1972. ", "From the Judgment and order dated the 15th October, 1970 of at Ernakulam in O.P. Nos. 934 and 944 and W.A. ", "693 ", "Nos. 15, 17, 18, 20, 22, 24, 27, 31, 32, 51-55 of 1965 and W.A. No. 170 of 1965 respectively. ", ", and for the Appellants in C.As. Nos. 1689, 1962 and in C.As. 1694 to 1705 of 1972 and for the appellants in C.As. Nos. 1690 and 1693. ", " and for Respondents in all the appeals. ", "The Judgment of the Court was delivered by , J. Whether the provisions of the Luxury Tax on Tobacco (Validation) Act, 1964 (Act 9 of 1964) (hereinafter referred to as the Act) enacted by are void on the grounds that (1) lacked the legislative competence to enac that Act, and (2) the provisions of the Act contravened article 301 of the Constitution and were not protected by article 304 is the main question which arises for determination in these 16 civil appeals Nos. 1689, 1690 and 1692 to 1705 filed on certificate against the judgment of . A Division Bench of has up held the validity of the Act. ", "We may set out the chequered history giving rise to civil appeals 1689 and 1692. Learned counsel for the parties are agreed that it is not necessary to set out the facts of the other cases and that the decision in the above two appeals would also govern those other cases. The appellants were dealers in tobacco and tobacco preparations in Mattancherry in erstwhile Cochin State. In 1909 Cochin Tobacco Act (Act 7 of 1084 M.E.) was enacted by the Maharaja of Cochin. Section 4 p of that Act prohibited the transport, import or export, sale and cultivation of tobacco, except as permitted by the Act and the rules framed thereunder. In pursuance of the power given by that Act the Diwan of Cochin made rules relating to matters specified in the Act. Under the rules it became necessary to obtain a licence for cultivation of tobacco plant. Drying, curing, manufacturing and the storing of tobacco cultivated in the State was to be done under the supervision of an officer in licenced manufacturing yards and store houses. The system which was in force for the collection of tobacco revenue up to August 1950 was to auction what were called A class and class shops. In addition, there were class shops, the licence for which was granted either on the recommendation of or in consultation with class licensees. A somewhat similar law was in operation in the erstwhile Travancore State. On April 1, 1950 after the Constitution had come in force and Travancore-Cochin had become a Part State Finance Act (No. 25 of 1950) extended the Central s and Salt Act (No. 1 of 1944) to Part State of Travancore-Cochin by section 11 thereof. Section p 13 (2) of the Finance Act provided that \"if immediately before the 1st lay of April 1950, there is in force in any State other than Jammu and Kashmir a law corresponding to, but other than, an Act referred to in r sub-sections (1) or (2) of section 11 , such law is hereby repealed with effect from the said date. . . \". In consequence of this provision in 3-L 159SCI/176 Finance Act , 1950, the rules which were in force on April 1, 1950 were changed in the Cochin area by notification dated August 3, 1950 and the system of auction sales of A class and class shops was done away with and instead graded licence fees were introduced for various classes of licensees, including class licensees. Similar change was made for the Travancore area. Notification dated January 25, 1951 was issued in this context. A class licensees under the new rules were called stockists, class licensees were wholesale sellers and class licensees were retailers. A class licensees were to pay a specified minimum fee for a fixed maximum quantity of tobacco and tobacco goods possessed by them and an additional fee for an additional quantity. The fee was to be levied only in respect of the tobacco imported into the State collected licence fee from the appellants for the period from August 17, 1950 to December 31, 1957. In 1956 the appellants, who were A class licensees, filed writ petitions in for refund of the licence fee collected from them on the ground that the Cochin and Travancore Tobacco Acts stood repealed by the Finance Act of 1950 because of the extension of the Central s and Salt Act to Part State of Travancore-Cochin. The petitions were opposed on behalf of the State and it was contended that the Cochin Act or the similar Travancore Act did not stand repealed from April 1, 1950. It was urged that the State was competent to frame new rules under the Cochin Tobacco Act and the corresponding Travancore Act. It was further stated that the tax in question could be validly levied under entry 60 or 62 of List II of the Seventh Schedule to the Constitution. dismissed the petitions holding that the laws under which the new rules were framed were in force and were valid under entry 62 of List II of the Seventh Schedule. The 13: appellants then came up in appeal to this Court. It was held by this Court in its judgment dated January 24, 1962 reported in (1962) Supp. 2 SCR 741 that the Cochin Tobacco Act of 1084 and the rules framed thereunder as also similar provisions in Travancore, requiring licences to be taken out for storage and sale of tobacco and for payment of licence fee in respect thereof were law corresponding to the provisions of the Central s and Salt Act , 1944 and hence stood repealed on April 1, 1950 by virtue of section 13(2) of the Finance Act, 1950. It was further held that as the parent Acts, namely, the Cochin Tobacco Act and corresponding Travancore Act had stood repealed, the new rules framed in August 1950 and January 1951 under those Acts for the respective areas of Cochin and Travancore for the issue of licences and payment of fee therefore for storage of tobacco were invalid ab initio. ", "After the above decision of this Court the appellants made a demand to the respondent-State that the amounts of Rs. 1,14,750 collected by the State from them by way of licence fee under the invalid rules might be refunded to them. The respondent-State refunded. 73,500 to the appellants on April 29, 1963. On July 10, 1963 the appellants filed original petition No. 1268 of 1963 in for issue of a writ to the respondent State to pay the balance amount of Rs 41.250 which along with interest came to Rs. 52,800 to the appellants. During the pendency of the above petition on December 16, 1963 the Governor of Kerala promulgated ordinance No. 1 of 1963 which was later replaced by Kerala Luxury Tax on Tobacco (Validation) Act of 1964 (Act of 1964). This Act received the assent of the President on March 3, 1964. Original petition No. 1268 of 1963 was thereupon amended with a view to challenge the validity of the above mentioned Act. In the meanwhile, on January 21, 1964 demand was made in view of the ordinance by calling upon the appellants to pay the amount of Rs. 73,500 which had been refunded to them by . Original petition No. 934 of 1964 was filed by the appellants in to challenge the validity of demand notice dated January 21, 1964 as also the vires of the Act. ", "At this stage it may be appropriate to refer to the relevant provisions of the Act. The preamble of the Act reads as under: ", "\"PREAMBLE: WHEREAS it is expedient to provide for the levy of a luxury tax on tobacco for the period beginning with the 17th day of August, 1950 and ending on the 31st day of December 1957, and the validation of the levy and collection of fees for licences for the vend and stocking of tobacco for the aforesaid period: BE it enacted in the Fifteenth Year of the Republic of India as follows:-\" ", "Section 2(ii) of the Act defines tobacco to include leaf of the tobacco plant, snuff, cigars, cigarettes, beedies, beedi tobacco, tobacco powder and other preparations or admixtures of tobacco. Section 3 is the charging section and provides that \"for the period beginning with the 17th day of August 1950 and ending on the 31st day of December, 1957, every person vending or stocking tobacco within any area to which this Act extends shall be liable and shall be deemed always to have been liable to pay a luxury tax on such tobacco in the form of a fee for licence for the vend and stocking of the tobacco, at such rates as may be prescribed, not exceeding the rates specified in the Schedule\". Section 4(1) of the Act gives power to to make rules by publication in the gazette to carry out the purposes of the Act. According to sub-section (3) of section 4 of the Act, 'the rules and notifications specified below purported to have been issued under the Tobacco Act of 1087 (Travancor Act 1 of 1087) or the Cochin Tobacco Act, VII of 1084, as the case may be, in so far as they relate or purport to relate to the levy and collection of fees for licences for the vend and stocking of tobacco, shall be deemed to be rules issued under this section and shall be deemed to have been in force at all material times.\" Along the rules and notifications specified in subsection (3) of section 4 are rules published on August 3, 1950 and January 25, 1951. Sections 5 and 6 read as under: ", "\"5. Validation-Notwithstanding any judgment, decree or order of any court, all fees for licences for the vend or stocking of tobacco levied or collected or purported to have been levied or collected under any of the rules or notifications specified in sub-section (3) or s. 4 for the period beginning with the 17th day of August, 1950 and ending on the 31st day of December, 1957, shall be deemed to have been validly levied or collected in accordance with law as if this Act were in force on and from the 17th day of August, 1950 and the fees for licences were a luxury tax on tobacco levied under the provisions of this Act, and accordingly,- ", "(a) no suit or other proceeding shall be maintained or continued in any court for the refund of any fees paid or purported to have been paid under any of the said rules or notifications; and ", "(b) no court small enforce a decree or order directing the refund of any fees paid or purported to have been paid under any of the said rules or notifications. ", "6. Recovery of licence fees refunded- Where any amount paid or purported to have been paid as a fee for licence under any of the rules or notifications specified in sub-section (3) of s. 4 has been refunded after the 24th day of January, 1962, and such amount would not have been liable to be refunded if this Act had been in force on date of the refund, the person to whom the refund was made shall pay the amount so refunded to the credit of the in any treasury on or before the 16th day of April, 1964, and, where such amount is not so paid, the amount may be recovered from him as an arrear of land revenue under the Revenue Recovery Act for the time being in force.\" ", "According to the appellants, the label given to the tax imposed by the charging section was only a cloak to disguise its real nature of being an excise duty. , as such, was stated to be in competent to levey excise duty on tobacco. It was also stated that the provisions of the Act were violative of the provisions of article 301 of the Constitution. In the meanwhile, a single Judge of dismissed on July 20, 1964 original petition No. 1268 of 1963 which had been filed by the appellants. The appellants thereupon filed appeal before of against the judgment of the learned single Judge. The learned Judges of allowed original petition No. 963 of 1964 and quashed demand notice dated January 21 1964 issued by the asking for refund of Rs.73,500. relied upon a decision of this Court in the case of v. state of Orissa(1) and held that in the absence of any production or manufacture of tobacco inside the appellant- it was not competent for the Legislature to impose a take on tobacco imported from outside the . The provisions of Act 9 of 1964 were held to violate article 301 of the Constitution and not protected by article 304. The learned Judges also set aside the judgment (1) 1 S.C.R. 865. ", "697 ", "Of the single Judge and allowed the appeals against that judgment in original petition No. 1268 of 1963. ", "The State of Kerala thereafter came up in appeal to this . As per judgment dated July 30, 1969 reported in (1970)1 SCR 700 this held that had not correctly appreciated the import of the decision in Kalyani Stores (supra). It was held that only such restrictions or impediments which directly and immediately impeded the free flow of trade, commerce and intercourse fell within the prohibition imposed by article 301. This further observed that unless first came to the finding whether or not there was the infringement of the guarantee under article 301 of the Constitution, the further question as to whether the statute was saved under article 304 (b) did not arise. The case was accordingly sent back to with the direction to take further affidavits in the matter. The left it open to the parties to argue as to whether the levy in question was in substance a duty of excise and as such whether it was not competent for to enact the provisions in question. ", "After remand affidavits were filed on behalf of the appellants and the respondent-State. The learned Judges of as per judgment under appeal gave the following findings: ", "\"(1) The levy being in respect of goods produced out side the State, it cannot be, and is not, an excise duty falling within entry 84 of the Union List. (2) The tax is on tobacco, an article of luxury, consumed within the taxing territory, levied on the occasion of its stocking and vending by the importers into the taxing territory. It clearly answers the description of luxury tax falling within entry 62 of the State List. ", "(3) There being no competing internal goods, the mere fact that the levy is only on imported goods can only have, like any other tax, the economic effect of reducing the demand by reason of increasing the price. The consequent diminution in the quantity of goods imported into the taxing territory is too remote an effect to be a direct impediment to the free flow of trade offending article 301 of the constitution. (4) However, the payment of the tax in the shape of a licence fee being a condition precedent to bringing the goods into the taxing territory, there would appear to be a direct impediment on the free flow of goods and therefore of trade into that territory notwithstanding that the taxable event is not the movement of the goods but the stocking after completing their journey and reaching their destination, the levy in advance being only for convenience of collection. (5) Even assuming that the levy offends article 301 , it is saved by article 304(b) being a reasonable tax levied in the public interest, the condition in the proviso thereto being satisfied by the assent of the President in view of article 255. ", "(6) The guarantee in article 301 and the saving in article 304(b) being in respect of both inter- and inter trade, the fact that the taxing territory is only a part of the is of no consequence.\" ", "On behalf of the appellants, their learned counsel Mr. has at the outset contended that the question as to whether the levy of the licence fee upon the appellants constitutes excise duty is concluded by the decision of this Court of January 24, 1962 and the same operates as res judicata. As against that, Mr. on behalf of the respondent-State submits that the question decided by this Court on January 24, 1962 was different from that which arises in these appeals and that the said decision does not operate as res judicata. The above submission of Mr. , in our opinion, is wellfounded. What was decided by this Court in its judgment dated January 24, 1962 was that the Cochin Tobacco Act r and the similar Travancore Act taken along with the rules framed under those Acts by the respective were in substance law corresponding to the Central Excises and Salt Act . The Cochin Tobacco Act and the similar Travancore Act, it was further held, stood repealed on April 1, 1950 by virtue of section 13(2) of the Finance Act, 1950. So far as the rules are concerned which were issued on August 3, 1950 and January 25, 1951, this Court held that as the parent Acts under which those rules were issued stood repealed on April 1, 1950, there would be no power in the State Government thereafter to frame new rules in August 1950 and January 1951 for there would be no law to support the new rules. The above question does not arise for determination in these appeals before us. What we are concerned with is the constitutional validity of the Kerala Act 9 of 1964. This Act was enacted subsequent to the above decision of this Court rendered on January 24, 1962. No question relating to the validity of the above mentioned Act in the very nature of things could arise at the time of the earlier decision in 1962. We, therefore, are of the view that the judgment dated January 24, 1962 of this Court does not operate as res judicate regarding the points of controversy with which we are concerned in these appeals. ", "It has next been argued on behalf of the appellants that the levy for the licence fee for stocking and vending of tobacco, even though described as luxury tax in charging section 3 of the Act, is in reality and substance an excise duty on tobacco. Excise duty on tobacco under entry 84 of List I of the Seventh Schedule to the Constitution can only be levied by and, as such, according to the learned counsel for the appellants, was not competent to enact the impugned Act 9 of 1964. This; contention. in our opinion, is equally devoid of force. Excise duty, it is now well-settled, is a tax on articles produced or manufactured in the taxing country. Generally speaking, the tax is on the manufacturer or the producer, yet laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production [see p. 750-51 of the judgment of this Court delivered on January 24, 1962 in the case between these very parties, reported in (1962) Supp. 2 SCR 741]. ", "The fact that the levy of excise duty is in the form of licence fee would not detract from the fact that the levy relates to excise duty. It is, however, essential that such levy should be linked with production or manufacture of the excisable article. The recovery of licence fee in such an event would be one of the modes of levy of the excise duty. Where, however, the levy imposed or tax has no nexus with the manufacture or production of an article, the impost or tax cannot be regarded to be one in the nature of excise duty. ", "In the light of what has been stated above, we may now turn to the provisions of the impugned Act 9 of 1964. The charging section 3 of this Act creates a liability for payment of luxury tax on the stocking and vending of tobacco. There is no provision of this Act which is concerned with production or manufacture of tobacco or which links the tax under its provisions with the manufacture or production of tobacco. The same is the position of the rules issued on August 3, 1950 and January 25, 1951 and Mr. on behalf of the appellants has frankly conceded that those rules are in no way concerned with the production or manufacture of tobacco. It would, therefore follow that the levy of tax contemplated by the provisions of section 3 of the Act has nothing to do with the manufacture or production of tobacco and, as such, cannot be deemed to be in the nature of excise duty. Argument that the provisions of the Act fall under entry 84 of List I of the Seventh Schedule to the Constitution must, therefore, be held to be bereft of force. ", "The next argument which has been advanced on behalf of the appellants is that the tax on the vending and stocking of tobacco cannot be considered to be luxury tax, as contemplated by entry 62 of List II of the Seventh Schedule to the Constitution. According to that entry, can make laws in respect of \"taxes on luxuries, including taxes on entertainments, amusements, betting and gambling\". Question, therefore, arises as to whether tobacco can be considered to be an article of luxury. The word \"luxury\" in the above context has not been used in the sense of something pertaining to the exclusive preserve of the rich. The fact that the use of an article is popular among the poor sections of the population would not detract from its description or nature of being an article of luxury. The connotation of the word \"luxury\" is something which conduces enjoyment over and above the necessaries of life. It denotes something which is superfluous and not indispensable and to which we take with a view to enjoy, amuse or entertain ourselves. An expenditure on something which is in excess of what is required for economic and personal well-being would be expenditure on Luxury although the expenditure may be of a nature which is incurred by a large number of people, including those not economically well off. According to , luxury tax is \"a tax on commodities or services that are considered to be luxuries rather than necessities. Modern examples are taxes levied on the purchase of jewellery, perfume and tobacco\". It has further been n said: ", "\"In the 19th and 20th centuries increased taxes have been placed on private expenditure upon alcohol, tobacco, entertainment and automobiles. Such expenditure is superfluous in the sense that a large part of it may be said to be in excess of what is required for economic efficiency and personal well- being, although the expenditure affects large numbers of people.\" ", "In Re The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938(1) while dealing with excise duty described spirits, beer and tobacco as articles of luxuries. ", "It is no doubt true that for those who have been lured by the charms and blandishments of Lady Nicotine there are few things which are so soothing to the distraught nerves and so entertaining as tobacco and its manifold preparations. One of them has gone to the extent of saying that he who doth not smoke hath either known no great griefs, or refuseth himself the softest consolation, next to that which comes from heaven ( He do with It ?). in \"A Farewell to Tobacco\" observes: \"For thy sake, tobacco, I would do anything but die\". The fact all the same remains that the use of tobacco has been found to have deleterious effect upon health and a tax on tobacco has been recognized as a tax in the nature of a luxury tax. One of the earliest indictments of tobacco is in Anatomy of Melancholy wherein he says: ", "\"It's a plague, a mischief, a violent purger of goods, lands, health, hellish, devilish, and damned tobacco, the ruin and overthrow of body and soul.\" ", "Another indictment is from of England (Counterblaste to Tobacco) when it is said: ", "\"A custom (smoking) loathsome to the eye, harmful to the brain, dangerous to the lungs, and in the black stinking fume thereof, nearest resembling the horrible Stygian smoke of the pit that is bottomless.\" ", "The taxation of the objects or procedures of luxurious consumption has aimed at two purposes, on the surface contradictory: the suppressing or limiting of this consumption and the deriving of a public (1) [1939] F. C. R. 18. ", "701 ", "income from it. On closer inspection a good deal of this contradiction vanishes when it is seen that prohibition and taxation of luxury tend equally to fix certain levels and standards of living, as against economic and social progress, which is tending to \"level\" such differences (see page 634 of the Encyclopaedia of the Social Sciences Volumes IX-X, 14th Printing). ", "It may be added that there is nothing static about what constitutes an article of luxury. The Luxuries of yesterday can well become the necessities of today. Likewise, what constitutes necessity for citizens of one country or for those living in a particular climate may well be looked upon as an item of luxury for the nationals of another country or for those living in a different climate. A number of factors may have to be taken into account in adjudging a commodity as an article of luxury. Any difficulty which may arise-in borderline case would not be faced when we are dealing with an article like tobacco, which has been recognised to be an article of luxury and is harmful to health. ", "The learned Judges of were of the opinion that the levy of tax in question was violative of article 301 of the constitution, according to which subject to the provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. The learned Judges in this connection took the view that the levy of tax as a condition preceding to the entry of goods into a place directly impeded the flow of trade to that place. The conclusion arrived at by in this respect, in our opinion, was correct and sound. The appellants were A class licensees. According to rule 16 of the rules issued on January 25, 1951, A class licensees shall be entitled to purchase tobacco from any dealer within or without the without any quantitative restriction. This class of licensees could sell only to other A class licensees or class licensees. It was also mentioned in that rule that the licence fee would be realised only for the quantities brought in from outside. Perusal of the rules shows that it was imperative for the A class licensees to pay the licence fee in advance before they could bring tobacco within the taxable territory. We agree with the learned Judges of that such levy directly impedes the free flow of trade and as such is violative of article 301 of the Constitution. ", "The next question which arises for consideration is whether the levy of tax is protected by article 304(b) of the Constitution. Article 3041b ) reads as under `\"304. Notwithstanding anything in article 301 or article 303 , the Legislature of a State may by law- ", "(a) .... .... .... ", "............. ", "(b) impose such reasonable restrictions on the freedom of trade. commerce or intercourse with or within that State as may be required in the public interest; ", "702 ", "Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the of a State without the previous sanction of the President.\" ", "We may observe that the requirement of the proviso regarding the sanction of the President has been satisfied. It is no doubt true that the assent of the President was given subsequent to the passing of the Bill by the legislature but that fact would not affect the validity of the impugned Act in view of the provisions of article 255 of the Constitution. ", "Clause (b) of article 304 empowers the of a State notwithstanding anything in article 301 or article 303 but subject to the sanction of the President to impose reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest. Article 302 confers power upon to impose by law such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Perusal of article 302 and article 304 shows that while can impose restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest, so far as the State s are concerned, restrictions must satisfy two requirements, firstly, they must be in the public interest and, secondly the restrictions should be reasonable. Shall speaking for the majority of in the case of (1) observed that the exercise of the power to tax may normally be presumed to be in the public interest. The above observations though made in the context of article 302 have equal relevance under article 304. Not much argument is needed to show that the power to tax is essential for the maintenance of any governmental system. Taxes are levied usually for the obvious purpose of raising revenue. Taxation is also resorted to as a form of regulation. In the words of Justice , \"every tax is in some measure regulatory\" v. . According to , the taxing power \"becomes an instrument available to government for accomplishing objectives other than raising revenues\" [The Federal Taxing Process, page 410 (Quoted on page 263 of American Constitutional Law by and , 3rd Ed.]. To some extent every tax imposes an economic impediment to the activity taxed as compared with others not taxed, but that fact by itself would not make it unreasonable. It is well-settled that when power is conferred upon the legislature to levy tax, that power must be widely construed; it must include the power to impose a tax and select the articles or commodities for the exercise of such power; it must likewise include the power to fix the rate and prescribe the machinery for the recovery of tax. This power also gives jurisdiction to the legislature to make such provisions as, in its (1) 3 S.C.R. 829. (2) 300 US 506 (1937) Opinion, would be necessary to prevent the evasion of the tax. As observed by Chief Justice in v. Maryland (1), \"the power of taxing the people and their property is essential to the very existence of Government, and may be legitimately exercised on the objects to which it is applicable to the utmost extent to which the Government may choose to carry it\". There can also be no doubt that the law of taxation in the ultimate analysis is the result of the balancing of several complex considerations. The legislatures have a wide discretion in the matter. ", "In considering the question as to whether the restriction is reasonable in public interest, the court will have to balance the importance of freedom of trade as against the requirement of public interest. Article 304(b) necessarily postulates that considerations of public interest may require and justify the imposition of restrictions C` on the freedom of trade provided they are reasonable. In determining the reasonableness of the restriction, we shall have to bear in mind the importance of freedom of trade and the requirement of public interest. It is a question of weighing one relevant consideration against another in the context of the larger public interest [see (2)]. ", "We agree with Mr. that the onus of showing that the restrictions on the freedom of trade, commerce or intercourse in the public interest are reasonable, is upon the . It is also true that no effort was made in the affidavit filed on behalf of the in this case to show as to how the restrictions were reasonable, but that fact would not necessarily lead the court to hold that the restrictions are unreasonable. If the court on consideration of the totality of facts finds that the restrictions are reasonable, the court would uphold the same in spite of lack of details in the affidavit filed on behalf of the . In judging the question of reasonableness of restriction in the present case, we must bear in mind that the levy of luxury tax relates to tobacco, the consumption of which involves health hazard. Regulation of the sale and stocking of an article like tobacco which has a health hazard and is considered to be an article of luxury by imposing a licence fee for the same, in our opinion, is a permissible restriction in public interest within article 304(b) of the Constitution. The material on record shows that except for cultivation of tobacco on experimental basis, no tobacco is grown in the area with which we are concerned. The levy of luxury tax is bound to result in raising the price of tobacco in the area of erstwhile s of Travancore and Cochin. Once of the likely effects of the enhancement of the price of a commodity entailing health hazards is to lower its consumption. ", "The fact that there is no commercial production of tobacco in the area with which we are concerned would show that there is no discrimination between tobacco brought from outside that area and the locally grown tobacco because in fact there is no tobacco of the latter category, except that grown on experimental basis. ", "4 Ed.579, 607. (2) [1964] 5 S.C.R.9 75. ", "704 ", "Argument has been advanced on behalf of the appellants that the provisions of the Act do not apply to the entire State of Kerala but apply only to those areas which were parts of erstwhile States of Travancore and Cochin. The restriction of the operation of the Act to only a part of the area of the State would show, it is urged, that the restriction is unreasonable. This contention, in our opinion, is not well founded. The fact that the operation of the Act is confined to a particular area and does not extend to the entire State is due to historical reasons. The object of the Act was to validate the recoveries already made. In the case of etc. v. & Anr.(1), the appellants, who were motor transport operators, challenged the increase in surcharge of the fares and freights imposed by the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods) Amendment and Validation S Act, 1961. It was urged that the Act fell within the mischief of article 301 of the Constitution and was not protected by article 304(b) and article 19(1)(f) of the Constitution. Contention was also advanced that the provisions of the said Act were violative of article 14 of the Constitution. In support of the above contentions, reference was made to the fact that the Act had been made applicable to the Andhra area and had not been made applicable to the Telengana area. Some other grounds were also relied upon to challenge the validity of the Act. This Court upheld the validity of the Act and repelled the contentions. No doubt this Court referred to the circumstance that the levy of tax was confined only to the Andhra area and was not operative in the Telengana area in the context of the argument that the Act was violative of article 14 of the Constitution, the fact all the same remains that one of the grounds advanced with a view to assail the validity of the Act was that its provisions were not applicable to the Telengana area. We are unable to accede to the submission that this Court lost sight of the fact that the Act was not applicable to the Telengana area in holding that its provisions were protected by article 304(b) of the Constitution. ", "It is also true that the levy of tax relates only to the period from August 17, 1950 to December 31, 1957, but that too was due to the historical reason that the licence fee had been realised only during that period and the object of the impugned Act was to validate the recovery already made. ", "Argument has also been advanced by Mr. that the impugned Act is a colourable piece of legislation because what is sought to be done is to validate the levy made under provisions of law which were found to have been repealed. It is further pointed out that those provisions of law were found by this Court to be similar to the provisions of the Central Execises and Salt Act and as such, those provisions were beyond the competence of . Any levy made under those provisions cannot, according to the learned counsel, be validated by . The above argument has a seeming plausibility, but, on deeper examination, we find it to be not tenable. It is no doubt true, as stated by (1) 2 S.C.R. 52 this Court in the case of ..(1) that when an Act passed by is invalid on the ground that did not have legislative competence to deal with the topics covered by it, in that event even cannot validate such an Act, because the effect of such attempted validation, in substance, would be to confer legislative competence on in regard to a field or topic which, by the relevant provisions of the schedules to the Constitution, is outside its jurisdiction. Where a topic is not included within the relevant List dealing with the legislative competence of , , by making a law cannot attempt to confer such legislative competence on s. The above principle would, however, have no application where, as in the present case, what is sought to be done is to validate the recovery of licence fee for stocking and vending of tobacco. The impugned provisions under which that levy is sought to be made with a retrospective effect have nothing to do, as already pointed out above, with production and manufacture of tobacco. The levy is sought to be made as luxury tax which is within the competence of and not as excise duty which is beyond the legislative competence of . If the levy in question can be justified under a provision which is within the legislative competence of , the levy shall be held to be validly imposed and cannot be considered to be impermissible. ", "Where a challenge to the validity of a legal enactment is made on the ground that it is a colourable piece of legislation, what has to be proved to the satisfaction of the court is that though the Act ostensibly is within the legislative competence of the legislature in question, in substance and reality it covers field which is outside its legislative competence. In the present case we find that in enacting the impugned provisions, , as already pointed out above, has exercised a power of levying luxury tax in the shape of licence fee on the vend and stocking of tobacco. The enactment of a law for levying luxury tax is unquestionably within the legislative competence of in view of entry 62 in List II of the Seventh Schedule to the Constitution. As such, it cannot be said that the impugned Act is a colourable piece of legislation. In the case of access was levied under the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act , 1958 on sugarcane. This Court in the earlier case of ) had held that such a levy was not valid. Following the above decision struck down section 23 which was the charging section of the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act , 1958. There were similar Acts in- several other States which suffered from the same infirmity and to meet that situation, passed the Sugarcane Cess (Validation) Act , 1961. The Act made valid by section 3 all the assessments and collections made before its commencement under the various State Act s and laid down that all the provisions of the (1) 1 S.C.R 523. (2) 3 S.C.R 242. ", "706 ", "State Act s as well as the relevant notifications, rules, etc., made under the State Act s would be treated as part of section 3 . It was further provided that the said section shall be deemed to have existed at all material times when the cess was imposed, assessed and collected under the State Act s. The appellant, a sugar factory, was asked to pay the cess for the years 1959-60 and 1960-61. The appellant challenged the levy. having dismissed the petition, the appellant came to this Court. Among the various contentions which were advanced on behalf of the appellant in the case were: (1) What the validation of the Act had done was to attempt to cure the legislative incompetence of s by validating State Act s which were invalid on the ground of absence of legislative competence in the respective State Legislatures; (2) lrad passed the Act in question not for the purpose of levying a cess of its own, but for the purpose of enabling the respective States to retain the amounts which they had illegally collected. The Act was, therefore, a colourable piece of legislation; and (3) The Act had not been passed for the purposes of the Union of India and the recoveries of cesses which were retrospectively authorised by it were not likely to go into . The of this Court speaking through CJ. repelled all the above contentions. It was held by this Court that if collections are made under statutory provision which are invalid because they deal with a topic outside the legislative competence of , the can in exercise of its undoubted legislative competence, pass a law retrospectively validating the said collections by converting their character into collections made under its own statute operating retrospectively. So far as the present case is concerned, we have already pointed out above that it was within the competence of to make a law in respect of luxury tax and to recover that tax in the shape of licence fee for vend and stocking of tobacco. has sought to validate the recovery of the amounts already made by treating those amounts as luxury tax. The fact that the validation of the levy entailed converting the character of the collection from an impermissible excise duty into permissible luxury tax would not render it unconstitutional. The only conditions are that the levy should be of a nature which can answer to the description of luxury tax and that should be competent to enact a law for recovery of luxury tax. Both these conditions as stated above are satisfied. ", "As regards the power of the legislature to give retrospective operation to a tax legislation, we may also refer to the case of (1) wherein it was held that where the legislature can make a valid law, it can provide not only for the prospective operation of the material provisions of the said law but can also provide for the retrospective operation of the said provisions. The legislative power was held to include the subsidiary or the auxiliary power to validate law which had been found to be `H invalid. It was also observed that in judging the reasonableness of the retrospective operation of law for the purpose of article 304(b ), (1) [1964] 1 S.C.R 897. ", "707 ", "The test of length of time covered by the retrospective operation could nob by itself be treated as decisive. Again, in the case of (1) of this Court repelled the argument that a legislation should be held to be invalid because its retrospective operation might operate harshly in some cases. ", "As a result of the above, we would hold that the impugned provisions are protected by article 304(b) of the Constitution. ", "Lastly, it has been argued that section 6 of the impugned Act is invalid because it provides for payment of an amount which had been refunded in pursuance of the order of this Court. Section 6 is thus stated to be an encroachment by the legislature upon a judicial field. This contention, in our opinion, is bereft of force. If a provision regarding the levy of luxury tax is within the competence of , the said would be well within its competence to enact a law for recovery of an amount which, though already refunded to a party, partakes of the nature of luxury tax in the light of that law. If an amount can answer to the description of luxury tax, there would be no legal impediment to recovering the same as luxury tax, even though initially it was recovered or sought to be recovered as something different from luxury tax. ", "As a result of the above, we dismiss these appeals, but, in the circumstances, leave the parties to bear their own costs. ", "P.B.R Appeals dismissed. (1) [1964] 7 S.C.R. 185."], "relevant_candidates": ["0000563752", "0000777743", "0000934856", "0001142824", "0001216757", "0001377254", "0001673787", "0001811199"]} {"id": "0001225747", "text": ["JUDGMENT ", "(1) Sri , Sri , Sri and Sri have brought this appeal against the order of Sri , Sub-Divisional Officer, Sadar and Magistrate First Class, Manipur dated 12-10-1953 sentencing the convict appellants to 6 months' rigorous imprisonment each, on each of the charges Under Sections 124A and 153A, IPC But the sentences have been ordered to run concurrently. The appellants had also been charged Under Section 120-B , IPC but they were acquitted under the aforesaid charge. ", "This appeal should, under the provisions of the Code of Crimnial Procedure, 1898, have been filed in , Manipur, but as the Code of Criminal Procedure has not been enforced in Manipur under the Merged States (Laws) Act , 1949 and Part C States (Laws) Act, 1950, the provisions of Manipur State Courts' Act, 1947, are applicable where they are against the provisions of the Code of Criminal Procedure and as Under Section 15 of the Manipur State Courts' Act, 1947, which has been amended by Manipur State Courts (Amendment) Order, 1950, it has been provided that when any person is convicted by a Magistrate of an offence Under Section 124A of the Indian Penal Code, the appeal shall lie to (now , Manipur), the present appeal has been filed under this exception provided in Section 15 of the Manipur State Courts' Act, 1947, enabling the appellants to come to this Court instead of filing their appeal in , Manipur. ", "(2) The facts of the case are practically admitted that a public meeting was organised at the Polo-ground, Imphal at 3 p.m. on Sunday 19-4-1958 and the appellants published and circulated among the Manipuri public 3 leaflets Exs. P/A, P/B and P/C and according to the prosecution these leaflets were distributed with a view to exciting disaffection towards the Government established by law in India, and also in order to promote feelings of enmity or hatred between Manipuri and non-Manipuri citizens of the Indian Republic residing in Manipur. The resolution Ex. P/T was passed in this meeting in which about 3,000 people had assembled and according to the prosecution no reasonable demands were put forward by means of this resolution and a threat of launching 'Satyagraha' movement and formation of independent buffer State in Manipur under the , was held out if the demands mentioned in the resolution were not met within 15 days of the meeting. ", "The appellant No. 4 read out the written speech of the appellant No. 3 in the meeting as the latter was suffering from some throat trouble. The speeches of the appellant No. 1 were recorded in a reel and notes were taken from the speeches of the appellants by Sri P.W. 2 vide Ex. P/F. The complaint Ex. P/G was lodged against the appellants by Sri , Officer of , P.W. 1 on 6-5-1953. ", "On 22-6-1953 the 4 appellants moved a transfer application No. 4 of 1953 in this Court, and the case was transferred from the Court of the District Magistrate, Manipur, to the Court of some other competent Magistrate on 26-6-1953 and so the former got the Sub-Divisional Officer, , invested with powers to try cases Under Section 124A , IPC and then this case was transferred to that Court. ", "(3) Besides Sri and Sri the procesution examined and Pandit as the former was present in the meeting on 19-4-1953 at the Pologround, Imphal, and the latter searched the premises on 24-4-1953 on the basis of a search warrant Ex. P/H and he recovered the speeches Exs. P/J, P/K and P/L along with the printed leaflets Exs. P/O, P/Q and P/R, vide recovery list Ex. P/S. The leaflets Exs. P/D and P/E were published by the appellants Nos. 1, 2 and 3 in the paper \"\" on 17th and 19th April 1953. ", "(4) The appellants denied that they ever, in any way, excited or attempted to excite disaffection against the Government and they further denied that they ever promoted or attempted to promote class hatred among different classes of people residing in Manipur. The appellants produced no witness in defence, but they filed written statements Exs. D/B, D/D and D/E and the written speech of the appellant No. 2 was also filed by Ex. D/C, while the chit Ex. D/A has been produced to show that Sri 2 could not properly write out the speeches swiftly as he writes by left hand and he wrote out the words \"Action for that was taken properly\" in probably very slowly. ", "(5) It has been contended on behalf of the appellants that the present proceedings were void because no prosecution Under Section 124A or Section 153-A , IPC could be taken cognisance of by any Court unless a complaint with regard to these allegations had been made by an order or under authority from or some officers empowered by in this behalf. Section 196 , Criminal P. C, clearly lays down: ", "No Court shall take cognizance of any offence punishable under Chapter VI (or IX-A) of the Indian Penal Code (except Section 127 ), or punishable Under Section 108A , or Section 153A , cr Section 294A for Section 295A or Section 505 of the same Code, unless upon complaint made by order of, or under authority from or some officer empowered by in this behalf. ", "(6) The intention of the is to ensure that no prosecution for an offence specified in Section 196 , Criminal P. C, should be lodged except on a complaint authorised by the . Section 196 , Criminal P. C, is a disenabling section and must be construed strictly vide 'In to, Varadarajulu Naidu' AIR 1919 Mad 968 (A). The object of this section is to prevent unauthorised persons from intruding in matters of a State by instituting State prosecution and to ensure that such prosecution shall only be instituted under the authority of the vide 'Queen Empress v. ', 22 Bom 112 at p. 125 (B). ", "The ruling reported in ' ' AIR 1922 Cal 298 (C), lays down that sanction must be signed by the Chief Secretary to the Government and order signed by the Deputy Secretary on behalf of the Chief Secretary in this connection is not legal. In the present appeal the learned Government Advocate has frankly admitted that no sanction Under Section 196 , Criminal P. C, was obtained from the Central Government, as required by law under Clause 60 of of the General Clauses Act, 1897, which clearly provides that as respects anything done or to be done after the commencement of the Constitution, the \"State Government\" shall mean in a Part C State the Central Government. ", "It has been held in 'Barjndra Kumaj v. Emperor', 37 Cal 467 at p. 493 (D) that absence of sanction Under Section 196 , Criminal P. C, vitiates the whole proceedings. In 'Varada Rajalu v. Emperor' AIR 1920 Mad 928 at p. 929 (SB) (E) and 'In re, Venkataramiah' AIR 1938 Mad 138 (P), it was laid down that even a subsequent sanction given for filing the complaint does not fulfill the requirements of Section 196 , Criminal P. C, as the law clearly says that it is a condition precedent to the prosecution that sanction shall be obtained from the local Government and it is not open to any subordinate authority to override the provisions of law by saying that the offence falls in any section of the Indian Penal Code and that no sanction is necessary for prosecution under that section, vide ' ' AIR 1925 All 230 (G). ", "The object of sanction Under Section 196 , Criminal P. C, is to ensure prosecution only when after due consideration, the appropriate sanctioning authority is satisfied that there is a proper case to put the party on trial, and also to save time of the criminal Court being wasted by needless prosecution without conviction, vide 'Tuck Saw v. Hain Kee', 4 Low Bur Rul 234 (H), 'In re, Parameswara Nambudri' AIR 1916 Mad 72 (I). As already pointed out above, no attempt was made in the present case to obtain sanction of the appropriate authority for launching the present prosecution and the proceedings were started by an officer of , P. W, 1. ", "(7) The learned Government Advocate has urged that it was held on 19-11-1951 by this Court in 'State v. (J)' that in Manipur obtaining of previous sanction under Section 196 , Criminal P. C, from was not necessary and so no sanction was obtained in this case. I find trom the judgment in 'the State v. ' (Manipur) (J) that no reasons were given for this view, but it was mentioned in passing judgment that it was not necessary to obtain sanction from Under Section 196 , Criminal P. C. It can be presumed that this order has been supported on the ground that the Code of Criminal Procedure had not been extended to Manipur and so tile question of sanction was, therefore, to be governed by the provisions of the corresponding Jaw in force in Manipur State. ", "The word 'corresponding' has been given a meaning in the Universal English Dictionary by as-, \"standing in a similar relation, agreeing with, being equivalent to\". , 1947, does not lay down detailed provisions regarding procedure in criminal cases and so practically all the provisions of the Code of Criminal Procedure are applied here in criminal cases except when there is a special provision in the , 1947, which goes clearly against some provisions in the Code of Criminal Procedure on any particular subject. I have already pointed out above that there is only one provision in the , 1947, in connection with the trial of cases under S; 124-A, IPC and it is with regard to the filing of appeal in instead of in the Court of the Sessions Judge and as no special provision has been made in the regarding sanction, it becomes clear that the provision of Section 196 , Criminal P. C, should govern cases like the present. For these reasons I respectfully disagree with the observation referred to above in 'State v. (Manipur) (J)' by Hon. , Judicial Commissioner. ", "The prosecution in this case arrested the present appellants on 24-4-1953 under the provisions of the Code of Criminal Procedure and later on the complaint Ex. P/G was filed against them on 6-5-1953. Searches were made in this case under the provisions of the Code of Criminal Procedure and In all these stages of the case provisions of the Code of Criminal Procedure have been followed. Once the prosecution elected to follow provisions of the Code of Criminal Procedure even though this Code was not extended to Manipur and it exercised all the powers which were conferred on various officers by the Code , it seems very unjust to allow the prosecution to urge that any particular provision which was meant to safeguard the legitimate rights and interests of the accused, could be circumvented simply because special provisions of the Manipur State ' Act would be applicable where such provisions were at variance with the provisions of the Code of Criminal Procedure, The law of sanction though it forms part of procedure, in reality contains the provision of substantive law and crimes, vide ' ' AIR 1927 Sind 10 at pp. 15, 16 (K), and so I think the contention put forward by the prosecution that the prosecution was not bound to obtain sanction in the present case, because no provision for obtaining sanction is to be found in the Manipur State , Act, 1947, cannot be accepted, as by not obtaining sanction under 8. 196, Criminal P. C, the appellants were seriously prejudiced, as their case was not examined by the appropriate sanctioning authority and it was not held to be a fit case for being sent to any Court for trial. The result must be unfortunate for the-prosecution, but it is essential that the rules of procedure designed to secure to ensure justice should be scrupulously followed and all should be jealous in seeing that there is no breach. of them. I am, therefore, clearly of opinion that the present appeal should succeed on the ground that no sanction was obtained Under Section 196 , Criminal P. C, before the launching of the present prosecution. ", "(8) The next contention put forward by the-learned Counsel for the appellants is that the prosecution Under Section 124A is void and ultra vires. as being repugnant to Article 19(1) of the Constitution and they are not saved by Clause (2) of Article 19. Section 124-A runs as follows: ", "Whoever by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards Government established by law in British India, shall be punished with transportation for life or any shorter term, to which fine may be added, or with imprisonment which may extend to 3 years, to which fine may be added, or with fine.\" ", "Explanation (1): The expression 'disaffection\" includes disloyalty and all feelings of enmity. ", "Explanation (2): Comments expressing disapprobation of the measures of the with a view to obtain their alteration by lawful means, without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section. ", "Explanation (3): Comments expressing disapprobation of the administrative or, other action of the Government without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section. ", "(9) Sedition thus embraces all those practices whether by word, deed or writing which are calculated to disturb the tranquillity of State and lead ignorant persons to endeavour to subvert the Government and the laws of the country. In '22 Bom 112 (B)', it was pointed out that an offence of sedition consisted in exciting or attempting to excite in others certain bad feelings towards the Government & not exciting or attempting to excite mutiny or rebellion or any sort of actual disturbance great or small. Similarly in ' ' AIR 1918 PC 31 (L), it was held that Section 4 of the Indian Press Act, 1910, was similar in language to Section 124A , IPC which had been subject to careful consideration in ''s case (B)'. ", "In 'Wallace-Johnson v. King', 1940 AC 231 (M) \"seditious intention\" was defined as an inten- tion \"to bring into hatred or excite disaffection against... as by law established\". in ' ' AIR 1942 FC 22 (N) held that in order to constitute seditious acts, words complained of must either incite to disorder or must be such as to satisfy a reasonable man that those were the intentions or tendency. ", "Section 124-A , Penal Code , thus clearly shows that sedition does not necessarily involve any crea-ition of disorder. overruled the decision in ''s case (N) in ' ' AIR 1947 PC 82 (O) and it was held that the law laid down in ''s case (B)' relating sedition was good law; vide also ' ' AIR 1S40 Cal 244 (PB) (Sic); ' ' AIR 1936 Cal 524 (P & Q). ", "(10) It is now to be seen whether Article 19(a) of the Constitution renders Section 124A , Penal Code , void on account of its being inconsistent with the aforesaid provisions of the Constitution. Article 19 of the Constitution runs as follows: ", "19(1) All citizens shall have the right ", "(a) to freedom of speech and expression; ", "(b) to assemble peaceably and without arms; ", "(c) to form associations or unions; ", "(d) to move freely throughout the territory of India; ", "(e) to reside and settle in any part of the territory of India; ", "(f) to acquire, hold and dispose of property; and ; ", "(g) to practice any profession or to carry on any occupation, trade or business. ", "(2) Nothing in Sub-clause (a) of Clause (1) shall affect the operation of any existing law, or prevent the 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 , friendly relations with foreign s, public order, decency or morality, or in relation to contempt of Court, defamation or incitement to an offence.... ", "(11) The present Clause (2) is substituted by Constitution (First Amendment) Act of 1951, Section 3(1) (a). The said clause is to be deemed always to have been enacted in the form given above and therefore its substitution the clause was as follows: ", "(2) 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, as well as defamation, contempt of or any matter which offends against decency or morality or to undermine security or tends to overthrow the State. ", "(12) It has been held in ' ' AIR 1951 Punj 27 (R) that Section 124A , Penal Code , has become void as contravening the right of freedom of speech and expression guaranteed by Article 19(a) of the Constitution. The section is not saved by Article 19(2) as the limitation placed by Article 19(2) interferes with freedom of speech, which is a real & substantial right in a democracy. The offence Under Section 124A consists in exciting or attempting to excite in others certain bad feelings 'towards the Government and in some instances at least the unsuccessful attempt to excite, will not| undermine or attempt to overthrow the State. ", "(13) ' AIR 1950 EC 124 (S), it was also held that the Constitution in formulating varying criteria for permissible legislation imposing restrictions on the fundamental rights enumerated in Article 19(1) has placed in a distinct category those offences against public order, which aim at undermining the security of the or overthrowing it, and made their prevention the sole justification for legislative abridgment of freedom of speech and expression. Thus, nothing less than endangering the foundation of the or threatening its overthrow could justify curtailment of the rights of freedom of speech and expression. It has further been held that the deletion of the word sedition from the draft Article 13(2 ), before the Article was passed as Article 19(2) shows that criticism of Government exciting disaffection or bad feelings towards it is not to be regarded as a justifying ground for restricting freedom of expression and of the press unless it is such as to undermine the security or tend to overthrow the . ", "(14) ' , which was a case under the East Bengal Public Safety Act, 1949, it was laid down that the imposition of precensorship on the journal the \"Organiser\" of Delhi was undoubtedly a restriction on the liberty of the press which is essential part of the right to freedom of speech and expression declared by Article 19(1)(a) and for reasons indicated in the judgment in ' )', such a restriction fell outside the reservation of Article 19(2) and as such was void. ", "(15) These rulings no doubt support the contention of the present appellants, but as has already been stated above, Article 19 of the Constitution was amended in 1951 and the amended clause is to be deemed always to be enacted in the form in which it now is. It is, therefore, to be seen very carefully whether Section 124A , Penal Code , is void under the amended Clause (2) of Article 19 of the Constitution. In the former Clause (2) the could make any law relating to any matter which undermines the security or tends to overthrow the . But under the amended para. 2 the can make any law imposing reasonable restriction on the exercise of right conferred by Clause (1), Sub-clause (a) of Article 19 of the Constitution \"in the interest of the security of the , public order, incitement to an offence...\". ", "(16) The words used in the amendment are no; doubt wider in scope, but it will have to be seen whether Section 124A , Penal Code , would be operative and binding in view of the amendment. It is for the State to show how the provisions of Section 124A , Penal Code , are reasonable and otherwise satisfy the conditions which would make it valid under Clause (2) of Article 19 of the Constitution; vide ' ' . ", "(17) Under Clause (2) of Article 19 of the Constitution reasonable restriction may be imposed by law in the interest of the security of the , friendly relation with foreign s, public order, decency or morality or in relation to contempt of Court defamation or incitement to an offence. Unless the restriction is for one of the purposes mentioned in the clause and is also reasonable, it would be ultra vires. ", "(18) A careful perusal of Article 19(2) of the Constitution makes it clear that reasonable restriction on freedom of speech and expression can be imposed in the interest of the security of the State and so it is to be considered whether if by mere spoken or written words or signs or visible representation or otherwise disaffection towards the Government is brought about or attempted to be brought about, any restriction can be placed under Clause (2) of Article 19 of the Constitution. The question would come to this whether any attempt to excite disaffection would amount to working against the interest of the security of the State. Even though \"Public order\" has been added it can hardly be expected that mere criticism of Government without inciting to any offence would be punishable in the interest of \"Public order\". ", " )', it was held that mere criticism or even ridicule of the Government is no offence unless it is calculated \"to undermine respect for the Government In such a way as to make people to cease to obey it and obey the law, so that anarchy can follow... ", "Public order or the reasonable consequence of likelihood of public disorder, was held to be the gist of the offence. I am, therefore of opinion that the restriction of the right of freedom and expression of speech in so far as a speech merely tends to excite disaffection towards the Government would not be reasonable and to this extent Section 124A , Penal Code , must be held to be ultra vires and inoperative as being repugnant to Article 19(1) (a) and (2) of the Constitution. ", "But so far as the question of imposing restriction on speeches or other representations which tend to bring the into hatred or contempt as distinct from mere criticism or even ridicule the position appears to be different. Even honest criticism can sometimes cause disaffection, but by bringing the into hatred or contempt the interests of the securtiy of the are likely to be jeopardised. As the restriction of freedom of speech or expression on a person who brings or tends to bring into hatred or contempt the established by law in India is for one of the purposes mentioned in the amended Clause (2); of Article 19 of the Constitution and it is also reasonable, it cannot, in my opinion, be held ultra vires. I, therefore, hold that the entire Section 124A cannot be deemed to be ultra vires. Only the portion which seeks to impose restriction on exciting mere disaffection or attempts to cause disaffection is ultra vires, (19) I now proceed to see whether Section 153A , Penal Cod, has been rendered inoperative by Article 19(2) of the Constitution. Section 153A runs as follows: ", "Whoever by words, either spoken or written, or by signs, or by visible representations, or otherwise, promotes, or attempts to promote feelings of enmity or hatred, between different classes of the citizens of India, shall be punished with imprisonment which may extend to two years, or with fine, or with both. ", "Explanation: It does not amount to an offence-within the meanings of this section to point out, without malicious intention and with an honest view to their removal, matters which are producing, or have a tendency to produce, feelings of enmity or hatred between different classes of citizens of India. ", "(20) A careful reading of the section shows that a reasonable restriction has been imposed in this section for whosoever promotes or attempts to promote the feelings of enmity or hatred between different classes of citizens of India to the extent of endangering public order cannot be protected by Clause (2) of Article 19 and so this section can also be deemed not to be wholly ultra vires in view of the amended Clause (2) of Article 19 of the Constitution. I hold that the rulings mentioned above which were given before the Amendment Act of 1951 came into force, cannot render Sections 124A and 153A , Penal Code , ultra vires. ", "(21-22) (The Judicial Commissioner after examing & holding that the evidence produced by the prosecution did not go to establish that the appellants committed any offence Under Sections 124A and 153A , Penal Code , proceeds to state:) Now the question remains whether the three leaflets Exs. P/A, P/B and P/C are sufficient for conviction of the present appellants and whether the resolution published in the 'Mother Manipur' on 21-4-1953 Ex. P/T is sufficient to establish the case against the appellants Under Section 124A , Penal Code . ", "The following extracts from pamphlets Exs. P/A to P/C have been objected to: ", "1. Today many Mayangs of all ranks and file have come into Manipur one after another. Not only pieces of earthen pots are shown again and again but enmity is caused among those persons who do not see save their interest and thereby causing disunity among the people, (from Ex. P/A) ", "2. Today not only the outsiders are trying to suppress us but also some of our country men are trying to produce washermen, barbers and coolies, (from Ex. P/C) ", "3. But unfortunately today we have been kept in such miserable condition as if putting in a frying pan in the hands of one or two refugees who have been turned out by the Mohammadans. ", "4. Every State has its own self-government while we have been entrusted in the hands of two or three refugees. The price of rice rises upto Rs. 40/- or Rs. 50/-. It is not yet 10 months from that time that the price was reduced to Rs. 20/- or Rs, 22/- per maund.\" (from the reel Ex. P/P held to be not proved.) (23) I have been taken through these 3 pamphlets at the time of arguments and various translations have been given of these pamphlets and the main controversy centres round the word 'Mayang'. On behalf of the prosecution it has been urged that the word 'Mayang' means non-Manipuri and so by using this word in the context referred to above the appellants sought to promote feelings of enmity or hatred between different classes of citizens of India. The learned Counsel for the appellants has urged that the word 'Mayang' only means an inhabitant of thickly populated part of our country, i.e. (West Bengal or U. P.) and it is not synonymous to non-Mani-puri. As such it has been contended that the word 'Mayang' does not form any class, and simply because the appellants felt that Manipuris should have a hand in the Government of their State, it cannot be inferred that the present appellants intended to excite feelings as between Manipuris and non-Manipuris, It has been laid down in 'Jang-I-Azad, Lahore, in the matter of AIR 1948 Lah 6 (SB) (V) that a general criticism of certain officer or officers cannot be deemed to be a criticism of Government established by law and order in British India, and as it has not been shown to me by the prosecution conclusively that the word 'Mayang' defines any particular class of people, I think the present appellants cannot be deemed to be guilty Under Sections 124A and 153A , IPC simply because they used the word 'Mayang' in the leaflets Exs. P/A to P/C. ", "In 'Newspaper \"Daily Pratap\" an Urdu Daily of New Delhi, in the matter of AIR 1950 East Punj 150 (SB) (W), it was held that the similarity of phraseology employed in Section 124A , I.P.C ., Rule 34(6) (e), Defence of India Rules, and Clause (d) of Section 4(1) , Press (Emergency Powers) Act, shows that the offence of sedition described in the Penal Code has for its ingredients the same elements which constitute a prejudicial act within the meaning of the Rule 34(6), Defence of India Rules, and these ingredients are also common to the mischief envisaged by Clause (d) of Section 4(1) of the Press Act. The first section taken and read as a whole is not to be regarded as intended to minister to the mere vanity or susceptibilities of or its officers, but permits reasonable criticism, comments and ventilation of grievances although the same may generate and excite some amount of resentment or disapprobation against the provided that such resentment or disapprobation does not generate or excite mere passion or hatred or contempt or disaffection. ", "In 'Sodhi Pindi Das v. Emperor' AIR 1938 Lah 629 (X), it was held that the speeches which amounted to exhortation to the hearers to join Communist or Bolshevik party is not in itself seditious within the meaning of Section 124A , IPC vide also ' ' AIR 1935 Cal 636 (Y). In view of these rulings and also in view of the fact that on taking into consideration the reasonable and natural effect of Exs. P/A to P/C as contemplated in 'AIR 1936 Cal 524 ( ' AIR 1927 Cal 215 (Z), I think these pamphlets do not show that the present appellants ever brought or attempted to bring the Government established by law in India into hatred or contempt, and that they did anything to disturb the security of the or public order. ", "(24) Regarding the question whether the present appellants preached creation of independent buffer State under in Manipur, a glance at the paper 'Mother Manipur' dated 21-4-1963 shows that this contention is not well founded and all that they mentioned in the paper was that some peace and democracy loving sections of the people were on the verge of launching movement to establish an independent buffer State. This clearly does not mean that the present appellants wanted anybody to establish any Independent buffer State. ", "This paper clearly shows that the following 4-resolutions Ex. P-i were passed at the meeting: ", "1. To immediately take all necessary actions to- prevent the threat of famine and to reduce the prices of rice and paddy to Rs. 8/- and Rs. 5/- per maund respectively. ", "2. To announce to the effect that the full responsible form of Government based on adult franchise should be immediately established in Manipur by a declaration within 15 days from this day (19-4-1953). Further this meeting strongly protests against the setting up of a nominated . ", "3. As a step to responsible Government a popular Ministry elected by the members of be transformed into a , may be suggested. Along with this, is strongly demanded to immediately replace non-Manipuri officers holding the key posts of heads of Departments, by the local talents. ", "4. To cause an immediate completion of the pavment of the compensation of the war damaged people of Manipur. ", "(25) Even if any non-violent movement was to be started by other groups and it was to be started by some members of the public, the present appellants could not legally be deemed to be guilty either Under Section 124A or Under Section 153A , IPC in view of what I have said above. ", "(26) Even if it be believed for a moment that the present appellants criticised some of the officers in a strong language and they could not appreciate that for running of administration, able and experienced officers are required, the appellants could not be deemed to have intentionally attempted to bring the established by law into hatred or contempt nor they can be held to have promoted enmity between different classes of citizens of the Indian Republic. ", "(27) The offence Under Section 120B was held to be not proved against any of the appellants and so they were acquitted by the learned Magistrate under that section. The prosecution should have proved in the present case specifically which particular appellant committed offence Under Sections 124A and 153A by laying stress on particular passages or words, but this also had not been done. ", "(28) In view of my findings above the charges Under Sections 124A and 153A , IPC were not established against the present appellants beyond all reasonable doubts, and so I allow this appeal and I set aside the conviction of the appellants and as well as the sentences which have been imposed ou them under these sections. The appellants are already on bail. They need not surrender as their bail bonds are discharged."], "relevant_candidates": ["0000043023", "0000184190", "0000256394", "0000456839", "0000639309", "0000748350", "0000982406", "0001373432", "0001912825"]} {"id": "0001239058", "text": ["PETITIONER: Vs. RESPONDENT: ISHWAR SINGH PUNlA DATE OF JUDGMENT22/08/1988 BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S. CITATION: 1988 AIR 2031 1988 SCR Supl. (2) 528 1988 SCC (4) 284 JT 1988 (3) 745 1988 SCALE (2)658 CITATOR INFO : E&F 1990 SC 897 (11,14) RF 1992 SC 573 (33) ACT: Haryana Urban [Control of Rent and Eviction] Act, 1973: Sections 1 [3] and 13 [1]-Exemption from applicability of Rent Control Act-Period of 'ten years' exemption-Expiring during pendency of eviction suit-Effect of-Once rights crystallise adjudication to be in accordance with law. % Statutory Constitution: Purposive interpretation in a social amelioration-An imperative of anything else. Words and Phrases:'Actus curiam neminem gravabit'- Meaning of. HEADNOTE: The appellant-landlord filed a civil suit against the respondent-tenant for possession of a shop which had been rented out by him in 1978. The suit was filed on the basis that the respondent was in arrears of rent from lst December, 1981 to 31st May,1982, that the tenancy had been terminated by giving a suit notice, and that section 1(3) of the Haryana Urban (Control of Rent and Eviction) Act , 1973_exempted the building from the purview of the Act. On or about 15th February, 1983, the respondent-tenant filed his written statement, and in November, 1984, moved an application for dismissal of the suit stating that the shop in question was constructed in June 1974 and as such, the period of 10 year had elapsed by June 1984 in terms of section 1 of the Act and as such, the immunity from the application of the Act having expired, the suit under the Act is not maintainable, and that the jurisdiction of was barred. The Sub-Judge held that the decree was not necessary, to be passed within the exemption period of 10 years under section 1 (3) of the Act, and accordingly dismissed the respondent's application. The respondent preferred a revision petition to , which held that as the suit had not been decreed within the period of 10 years, the building in question came within the operation of the Act and as such, PG NO 528 PG NO 529 the rent Act was applicable and had no jurisdiction. allowed the petition and consequently dismissed the suit pending before the Sub- Judge. The landlord appealed to this by Special Leave. Allowing the appeal and remanding the case, HELD: l.(a) The rights of the parties will have to be determined on the basis of the rights available to them on the date of the suit. The Judgment and Order of set aside, and order of the Sub-Judge restored. The suit to proceed in accordance with law. {533G-535F] (b) Section 13 of the Act provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of the said Section. Those provisions world not be applicable under Section 1(3) to a suit instituted within 10 years from the date of the completion of the building in question. {534B} (c) It is well-settled that no man should suffer because of the fault of the or delay in the procedure. \"Actus curiam neminem gravabit''-an act of shall prejudice no man. [534E] (d) Having regard to the time normally consumed for adjudication, the 10 years exemption or holiday from the application of the Rent Act would become illusory, if the suit has to he filed within that time and be disposed of finally. [534F] (e) It is common knowledge that unless a suit is instituted soon after the date of letting, it world never be disposed of within 10 years and even then within that time it may not be disposed of. That will make the 10 years holiday from the Rent Act illusory and provide no incentive to the landlords to build new holiday to solve problem of shortages of houses. The purpose of the legislation would thus be defeated. [534G] (f) Bearing in mind the well-settled principle, that the rights of parties crystallise on the date of the institution of the suit, the meaningful construction must be that the exemption world apply for a period of 10 years and will continue to be available until the suit is disposed of or adjudicated. Such suit or proceedings must be instituted within the stipulated period of 10 years. Once rights crystallise the adjudication must be in accordance with law. [535E] PG NO 530 , 3 S.C.C. 352; , 4 S.C.C. 382; . Vijendrapal Gupta, 3 S.C.R. 491; , 3 S.C.C. 452, referred to. 2.(a) Purposive interpretation in a social amelioration legislation is an imperative irrespective of anything else. [534G] (b) Judicial time and energy is more often than not consumed in Finding what is the intention of the or in other words, the will of the people. The fairest and most rational method to interpret the will of the legislator is by exploring his intentions at the time when the law was made, by signs most natural and probable and these signs are either the words, the context, the subject matter, the effects and consequences or the spirit and reasons of the law. [534H-535A] (c) Each word, phrase or sentence has to be construed in the light of the purpose of the Act itself but words must be construed with imagination of purpose behind them. Though the is concerned with seeking of intention, it is rather looking to the meaning of the word that the legislator has used and the true meaning of the words used. {535B} , [1953} SCR 677 and v. , {1975] A.C. 591 at 613. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3081 of 1988. ", "From the Judgment and Order dated 25. 10. 1985 of in Civil Revision No. 2457 of 1985. ", " and Ms. for the Appellant. and for the Respondent. The Judgment of the Court was delivered by , Special leave granted. The appeal is disposed of herein after hearing counsel for both the parties. ", "The appellant-landlord filed a suit for possession in in Haryana. The respondent is the tenant in the shop situated at Raj Guru Market which had PG NO 531 been rented out to the respondent in 1978. The suit was filed on the basis that the respondent was in arrears of rent from lst December, 1982 to 3lst May, 1982 and the tenancy of the respondent had been terminated by giving him notice. The suit was filed for recovery of possession on the termination or expiry of the period of tenancy. It was filed because of Section 1(3) of the Haryana Urban (Control of Rent and Eviction) Act , 1973 (hereinafter referred to as 'the Act'). The Act was passed with the object to control the increase of rent of certain buildings and rented land situated within the limits of urban areas and the eviction of tenants therefrom. For our present purpose, it would suffice if we bear in mind two relevant provisions. Section 1(3) of the Act provides as follows : ", "\"Nothing in this Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date its completion. \" ", " Section 13 of the Act deals with the eviction of tenants and sub-section (1) thereof provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of that section. The section thereafter enumerates the statutory grounds for eviction upon which eviction is permitted which incidentally are more or less similar statutory ground all over the country. ", "On or about 15th February, 1983, the respondent-tenant filed his written statement. In November, 1984, the respondent-tenant moved an application for dismissal of the suit of the appellant stating that the shop in question was constructed in June, 1974 as such the period of ten years had elapsed by June, 1984 in terms of section l(3) of the Act. and, as such, the immunity from the application of the had expired. The suit under the Act is not maintainable and the Jurisdiction of stands barred. The learned Sub-Judge, . held that the decree was not necessary to be passed within the exemption period of ten years under section 1(3) of the Act. the learned Sub-Judge accordingly dismissed the respondent's application. Aggrieved thereby, the tenant-respondent preferred a revision to and Haryana. held that as the suit had not been decreed within the period of ten years, the building in question came within the operation of the Act and as such the Rent Act was applicable and had no jurisdiction. In the PG NO 532 premises, the learned Judge of dismissed the suit pending before the Sub-Judge. Aggrieved thereby the appellant has come up in appeal to this Court. More or less identical provisions of the U. P. Act had come up for consideration before this Court in the case of , [l984] 3 S.C.C. 352. The only point that was urged before this Court in that decision was whether the premises which was not ten years' old on the date of the suit and was exempted from the operation of the new Rent Act , could be governed by it if ten years expired during the pendency of the litigation. The relevant provisions of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act , 1972 provided as follows: ", "\"20. Bar of suit for eviction of tenant except on specified grounds. (1) Save as provided in sub-section [2). no suit shall be instituted for the eviction of a tenant from a building, notwithstanding the determination of his tenancy by efflux of time or on the expiration of a notice to quit or in any other manner. ", "Provided that nothing in this sub-section shall bar a suit for the eviction of a tenant on the determination of his tenancy by efflux of time where the tenancy for a fixed term was entered into by or in pursuance of a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding, which is either recorded in court or otherwise reduced to writing and signed by the tenant.\" ", " , [supra], the respondent-landlord filed a suit for eviction and for arrears of rent and damages, inter alia, on the grounds that the building in question was not covered by the U.P. Urban Buildings [Regulation of Letting, Rent and Eviction] ct, 1972 in view of the exemption granted to new buildings under section 2 of the said Act and that the defendant- appellant had defaulted in payment of rent. The tenant had resisted the claim on the ground that having regard to the date of construction of the building, it was covered' by the Act, that the plaint having not been amended so as to bring the suit under the Act, it was barred by section 20 and that term was no default in payment of rent. As mentioned hereinbefore, during the pendency of the litigation the exemption granted under section 2 expired. The question was whether the premises which was not ten years' old on the PG NO 533 date of the suit and was exempted from the operation of the Rent Act , would be governed by it if ten years expired during~, the pendency of the litigation. Allowing the appeal, this Court held that the appellant must get benefits of the Act which became applicable to the premises in question during the pendency of the litigation. That would not affect the cause of action in that case. It was held that the contention that the Court had to decide the case on the basis of cause of action that accrued prior to the date of filing the suit and not on a new cause of action was not sustainable. It was further held that normally amendment in plaint is not allowed if it changes the causes of action. However, where the amendment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already, on the record, the amendment would be allowed even after the statutory period of limitation. This Court observed that processual justice required that the events and developments subsequent to the institution of proceedings must be taken into consideration in appropriate cases to promote substantial justice. case (supra] was discussed and explained by this Court in Nand Kishore Marwah und , 4 S.C_'.C. 382. This Court held that in view of section 2(2) of the 1972 Act, if an assessment is made of the newly built house then the date of completion of the building, the date from which 10 years have to be computed will be the date on which the first assessment was made. Therefore, the period of 10 years have to be computed from October. 1976. This Court further hold that if a tenant is entitled to the advantage of sections 39 and 40 of the Act and the period of 10 years elapses during the pendency of the eviction suit or appeal before this Court (which is the continuation of the suit), then the tenant would be entitled to the benefits of the Act. This Court further held that within 10 years as provided for in section 2(2) restriction on the institution of suit as provided for in section 20 (1) will not be applicable. It was held that during the pendency of the litigation even if 10 years expired the restriction under section 20 will not be attracted as the suit had been instituted within 10 years. It is well-settled that the rights of the parties will have to be determined on the basis of the rights available to them on the date of the suit. This Court pointed out that the attention of the Court had not been drawn to the decision of this Court in . , 3 S.C.R. 491. This Court referred to the words used in section 20 of the said Act which emphasised that \"no suit shall be instituted for eviction.\" 'This clearly indicates that the restriction put under section 20 of the said Act is to the institution of the suit itself and, therefore, it is clear that if the provision of PG NO 534 this Act applies then no suit for eviction can be instituted except on the grounds specified in the sub-sections of that section of the Act. This applies more so in the instant case where the section 13 of the Act provides that the tenant in possession of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of this section. Those provisions would not be applicable to a suit instituted within 10 years from the date of the completion of the building in question. That is the plain meaning of the expression \"use\". It was further to be borne in mind that in finding out the plain meaning of the expression \"use\"z the language, the background, the context, the purpose, these all have to be borne in mind. , 3 S.C.C. 452, , J. has explained the section 2(2) of the U. P. Act as follows ; ", "\"The legislature found that rent control law has a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackle of legislative restriction, 'new constructions' for a period of ten years. So much so, a landlord who had let out his new building could recover possession with-out impediment if he instituted such proceedings within ten years of completion ?' It is well-settled that no man should suffer because of the fault of the or delay in the procedure. has stated the maxim \"actus curiam neminem gravabit\"-an act of shall prejudice no, man. Therefore, having regard to the time normally consumed for adjudication, the 10 years exemption or holiday from the application of the Rent Act would become illusory, if the suit has to be filed within that time and be disposed of finally. It is common knowledge that unless a suit is instituted soon after the date of letting it would never be disposed of within 10 years and even then within that time it may not be disposed of. That will make the 10 years holidays from the Rent Act illusory and provide no incentive to the landlords to build new houses to solve problem of shortages of houses. The purpose of legislation would thus be defeated. Purposive interpretation in a social amelioration legislation is an imperative irrespective of anything else. Judicial time and energy is more often than not consumed in finding what is the intention of the or in other wards, the will of the people. tells us that the fairest and most rational method to interpret the will of the legislator is by exploring his inten tions at PG NO 535 the time when the law was made, by signs most natural and probable. And these signs are either the words, the context, the subject matter, the effects and consequence, or the spirit and reason of the law. (Underlined by the ). See Commentaries on the Laws of England (facsimile of lst edition of 1765, , 1979 Vol. 1, p. 59). , J. as the learned Chief justice then was, in , SCR 677 said that each word, phrase or sentence was to be construed in the light of purpose of the Act itself. But words must be construed with imagination of purpose behind the said Judge , long time ago. It appears, therefore, that though we are concerned with seeking of intention, we are rather looking to the meaning of the words that the legislator has used and the true meaning of what words as was said by Lord in v. , Appeal Cases 591 at 613. We are clearly of the opinion that having regard to the language we must find the reason and the spirit of the law. If the immunity from the operation of the Rent Act is made and depended upon the ultimate disposal of the case within the period of exemption of 10 years which is in reality ability, then there would be empty reasons. In our opinion,bearing in mind the well-settled principle that the rights of the parties crystallise on the date of the institution of the suit as enunciated by this in , (supra), the meaningful construction must be that the exemption would apply for a period of 10 years and will continue to be available until suit is disposed of or adjudicated. Such suit or proceeding must be instituted within the stipulated period of 10 years. Once rights crystallise the adjudication must be in accordance with law. ", "In that view of the matter, we are of the opinion that was in error in the view it took. The judgment and order of are set aside and the order of the learned Sub-Judge is restored. The suit will now proceed in accordance with law in the light of the observations herein as expeditiously as possible. The costs of the appeal will be the costs of the suit. ", "N.V.K. Appeal allowed."], "relevant_candidates": ["0000400509", "0000806710", "0000863948", "0000948575", "0001266379", "0001732740"]} {"id": "0001257548", "text": ["PETITIONER: Vs. RESPONDENT: STATE OF MADHYA PRADESH DATE OF JUDGMENT: 25/07/1996 BENCH: : , A.S. (J) CITATION: JT 1996 (6) 652 1996 SCALE (5)467 ACT: HEADNOTE: JUDGMENT: ", "THE 25TH DAY OF JULY, 1996 Present : ", "Hon'ble Dr. Justice Hon'ble Mr. Justice and , Adv. for the appellants. , Adv. for the Respondent J U D G M E N T The following Judgment of the Court was delivered: ", "State of Madhya Pradesh (With Criminal Appeal No. 252 of 1984) J U G M E N T THOMAS, J. ", "A youngman, by name , was murdered on 23.8.1980, near Government Degree College Dhar. The police arraigned five persons for the said murder and the Sessions Judge, after trial, convicted the first two among them (-first accused and second accused) of the offence under Section 302 , and acquitted the remaining three persons. State filed an appeal challenging the acquittal and the convicted persons filed another appeal. of Madhya Pradesh while confirming the conviction and sentence reversed the order of acquittal of 5th accused ( and convicted him also of the offence under Section 302 . Sentence of imprisonment for life was awarded to all the convicts. We have before us two appeals by special leave, one jointly filed by and and the other separately filed by . ", "Prosecution set up the following case against five accused. Around 3.30 P.M. deceased , PW-1 and PW-5 were proceeding on bicycles along Dhar-Indore Road. Their cestination was 's house at Jetpura. As they reached near , all the five accused emerged from the roadside and made a blits on . and were armed with Dhariya. 3rd accused had a pistol and 4th and 5th accused () had sickles with them. Deceased tried to escape but was again attacked by the assailants with their cutting weapons. PW-1 and PW-5 cried for help and thus Peon of the College rushed to their rescue. But by then had sustained a number of serious wounds on his head and he fell down dead at the spot itself. ", "Sessions court framed a charge against the accused for offences under Sections 302 and 148 read with Section 149 of the Indian Penal Code. The accused denied having participated in the occurrence. After trial learned sessions Judge concluded that prosecution has failed to prove that there was an unlawful assembly, but found that (first accused) and (second accused) have inflicted cut injuries or the deceased with Dhariyas and convicted them under Section 302 and sentenced them each to imprisonment for life. ", "Out of the four eye witnesses examined by the prosecution (PW-4) did not support the case and the other three witnesses spoke to the prosecution version. Learned sessions Judge found the evidence of (PW-6) quits acceptable and hence the conviction was based on his testimony. Nonetheless the trial judge was not inclined to convict (5th accused) on the strength of the evidence of (PW-6). Evidence of the other eye witnesses was found to be not very reliable. ", " on a re-evaluation of the evidences felt that the trial court to have placed reliance on the testimony of (PW-1) and (PW-5) also. Learned judges expressed the view that sessions judge has given undue importance to certain discrepancies and contradictions noted in their evidence. This is what the said about it: ", "\"The discrepancies and contradictions are not in regard to the fact that the accused participated in the incident put in regard to the sequence of events and minor and inconsequential details of the occurrence and other collateral facts which do not make their testimony untrustworthy.\" ", "Thus relying on the evidence of PW-6 (Naruram) as corroborated by PW-1 and PW-2 found also guilty of murder and convicted him and sentenced him as aforesaid. ", "Learned counsel for the appellants contended that committed a basic error in seeking the aid of Section 34 for confirming the conviction of the appellants for the offence under Section 302 . So long as the charge framed against them did not mention Section 34 of . was not Justified in using the said provision for convicting the appellants, according to the learned counsel. ", " found that there was no unlawful assembly as the strength of the assembly was insufficient to constitute it into \"unlawful assembly\". But if the court enters upon a finding that any of the remaining persons who participated in the crime had shareo common intention with the main perpetrators of the crime, the court is not helpless in seeking the aid of Section 34 () to enter a conviction against such persons arraigned as accused. This is despite the difference between the scops of Section 34 and Section 149 , yet they have some resemblance between each other and are to some extent overlapping ( , 1925 PC 1). ", "Legal position on this aspect remained uncertain for a time after this court rendered a decision in . 1955 (1) SCR 1201. But the doubt was cleared by a constitution bench of this court in ., AIR 1956 SC 116. Where this court observed at para 86, thus: ", "\" Sections 34 , 114 and 149 of the Indian Penal Code provide for criminal liability viewed from different angles as regards actual participants, accessories and men actuated by a common object or a common intention: and the charge is a rolled-up one involving the direct liability and the constructive liability without specifying who are directly liable and who are sought to be made constructively liable. In such a situation, the absence of a charge under one or other of the various heads of criminal liability for the offence cannot be said to be fatal by itself, and before a conviction for the substantive offence, without a charge, can be set aside, prejudice will have to be made put. In most of the cases of this kind, evidence is normally given from the outset as to who was primarily responsible for the act which brought about the offence and such evidence is of course relevant.\" ", "It is, therefore, open to the court to take recourse to Section 34 of even if the said section was not specifically mentioned in the charge and instead Section 149 has been included. Of course a finding that the assailant concerned had a common intention with the other accused is necessary for resorting to such a course. This view was following by this court in later decisions also, ( . AIR 1973 SC 2221. or Punjab, AIR 1974 SC 1256). The first submission of the learned counsel for the appellant has no merit. ", "While dealing with the case of appellant , we may point out that chose to believe the evidence of PW-1 and PW-2 and found that their evidence supports the testimony of PW-6 who said that was also a participant in the crime. In this context it is to be remembered that learned sessions judge was disinclined to convict because PW-6 Naruram did not mention anything about in his statement recorded under Section 161 of the Code of Criminal Procedure for short the Code ). When cross- examined, PW-6 was asked this omission and he had no explanation to offer. PW-14, the Investigating Officer who interrogated PW-6, had stated that 's name was not mentioned by (PW-6) when the latter was questioned during investigation. Learned sessions Judge found it difficult to convict accused on the above evidence of PW-6, but the chose to act on the said evidence. Learned counsel for the appellant - seriously assailed the aforesaid course adopted by the and contended that it is not open to the appellant court to interfere with the finding made by the trial court in favour of an accused so lightly as that. Learned counsel further contended that in an appeal against acquittal there must be compelling reasons to disturb a fact finding made by the trial court and that unless the view of the trial court is perverse or at least unreasonable no interference shall normally be made. ", "Though the Code does not make any distinction between an appeal from acquittal and an appeal from conviction so far as powers of the appellate court are concerned, certain unwritten rules of adjudication have consistently been following by Judges while dealing with appeals against acquittal. No doubt, has full power to review the evidence and to arrive at its own independent conclusion whether the appeal is against conviction or acquittal. But while dealing with an appeal against acquittal the appellate court has to bear in mind: first, that there is a general presumption in favour of the ignorance of the person accused in criminal cases that presumption is only strengthened by the acquittal. The second is, every accused is entitled to the benefit of reasonable doubt regarding his guilt and when the trial court acquitted him. He would retain that benefit in the appellate court also. Thus, appellate court in appeals against acquittals has to proceed more cautiously and only if there is absolute assurance of the guilt of the accused, upon the evidence on record, that the order of acquittal is liable to the interfered with or disturbed. ( , AIR 1966 SC 1775, . Goa, AIR 1977 SC 135, , AIR 1987 SC 1083, . , AIR 1988 SC 1158, , AIR 1990 SC 2134). ", "Trial court which relied on the evidence of (PW-6) pointed out that the witness did not refer to any role played by when he gave statement to the police during investigation and hence a conviction for the offence of murder cannot be passed against on the strength of improvement made at the trial. The said sound reasoning should not have been sidelined by without providing sufficient and convincing reasons. None has been given. We have scrutinized the evidence and we too are satisfied that PW-6 has, in fact, omitted to mention anything about when PW-6 was questioned by police and has later on tried to give an improved version. ", "We are, therefore, of the opinion that the order of acquittal passed by the trial court in favour of should have been maintained by . So far as the case of and is concerned, the appreciation of evidence by the courts below is sound and proper. We agree with the findings recorded by the courts below and are of the opinion that their conviction and sentence are well merited. There is no merit in their appeal. ", "In the result, we dismiss Criminal Appeal No. 252/84 filed by and , but we allow Criminal Appeal No. 170A/84, filed by . We set aside the conviction and sentence passed on and restore the order or acquittal passed by in his favour."], "relevant_candidates": ["0000042334", "0000079786", "0000548015", "0000653650", "0000867186", "0001000760", "0001079194", "0001210284", "0001347962", "0001749633"]} {"id": "0001262826", "text": [", Accountant Member ", "1. This Special Bench was constituted to consider the question whether provisions of Section 40A(8) of the Income-tax Act, 1961 ('the Act') are applicable to assessment year 1976-77, irrespective of previous year followed by the assessee. A Bombay Bench had expressed the opinion that it would, while a Madras Bench had held that Section 40A(8) would apply only to expenditure on interest incurred after 1-4-1976. ", "2. The assessee-company manufactures Pharmaceuticals, drugs and milk products. Its accounting year ended on 30-6-1975 which is relevant for the assessment year 1976-77 (year under consideration). The had disallowed under Section 40A(8) Rs. 3,11,040. The only discussion in the assessment order as per paragraph 10 is that (assessee) has correctly shown disallowance at the rate of 15 per cent of Rs. 20,73,598 (out of interest paid) amounting to Rs. 3,22,040. Before the Commissioner (Appeals), the assessee raised an additional ground challenging the disallowance under Section 40A(8) on the ground that Section 40A(8) , having been introduced with effect from 1-4-1976, would, therefore, be applicable to expenditure incurred on payment of interest on deposits from that date and not to interest paid prior to that date and as the assessee's previous year relating to the assessment year 1976-77 ended on 30-6-1975, provisions of Section 40A(8) were inapplicable to this year. The assessee relied on the Tribunal ras Bench 'D' decision in A.P.P. Ltd. [IT Appeal No. 952 (.) of 1980] for the assessment year 1976-77. The Commissioner (Appeals), without discussing the matter, rejected the assessee's contention and confirmed the 's order. ", "3. At the hearing before us, the learned counsel for the assessee again relied on the aforesaid decision of the Tribunal Madras Bench 'D' and emphasized that provisions of Section 40A(8) operate only in respect of expenditure on interest incurred after 1-4-1976. In the case, the accounting year ended on 30-4-1975, while in the case before us the accounting year ended on 30-6-1975. It was thus urged that the decision squarely applied in the assessee's case. ", "4. The learned departmental representative urged that Section 40A(8) had been introduced by the Finance Bill, 1975 with effect from 1-4-1976- 98 ITR (St.) 129. He also referred to memorandum explaining the provisions of the Finance Bill, 1975 at 98 ITR (St.) 184 (paragraphs 9-11) where it was indicated that 'the proposed amendment will take effect from 1st April, 1976 and will accordingly apply in relation to the assessment year 1976-77 and subsequent years'. Similar were the observations under 'Notes on clauses' in 98 ITR (St.) 168. It was emphasized by the departmental representative that there was nothing in the aforesaid amendment or the Notes on clauses or in the memorandum to suggest that previous year had any relevance and that it was clear that disallowance of 15 per cent of the interest was to be made out of expenditure on interest incurred in the assessment year 1976-77 irrespective of different previous years followed by the diverse assessees. It was further urged that it was an elementary principle of income-tax law that the law to be applied is that in force in the assessment year and it is immaterial what previous year the assessee follows. It was urged that any amendment which is in force at the beginning of the relevant assessment year must govern the case after the income under assessment is earned. It was also urged that the had given one year's advance notice of the applicability of the new provision [ Section 40A(8) ]. ", "5. The revenue's case is supported by good authority. Kanga & Palkhivala in Law & Practice of Income-tax, Seventh edn., Vol. 1 at p. 83 under the head 'Law to be applied is that in force in assessment year' observed : \"Though the subject of the charge is the income of the previous year, the law to be applied is that in force in the assessment year, unless otherwise stated or implied.\" These observations are based on 1.1951] 20 ITR 572, 577 (SC) and M.KR. Deivanayagam Pillai v. Second Addl. ITO 35 ITR 549, 551 (Mad.). The learned commentators further observed : \"Any amendment which is in force at the beginning of the relevant assessment year must govern the case though the amendment is made after the income under assessment is earned. In other words, the Income-tax Act as it stands amended on the 1st April of a financial year must apply to the assessment for that year.\" These observations are again based on a number of decisions given in footnotes 12-13 on the same page. We will refer to these decisions later. ", "6. Similar are the observations by in Law of Income-tax, Seventh edn., Vol. 1 at pages 450-451 under the head \"14. Levy of charge according to the provisions of the Income-tax Act as they stand on the first day of April each year.\" The learned commentator, relying on case (supra) observed that pointed out that \"It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. But, it has been held, the subject of charge is not the income of the year of assessment, but the income of the previous year. As the Finance Act s come into force on the first day of April each year, therefore, the law to apply is the law in force at the commencement of the year of assessment, i.e., the first day of April each year.\" The commentator relied on 13 ITR 221 (PC) as also on case (supra). The commentator further observed in the same para : \"Thus, as a charge on the income of the previous year, the substantive law of that year must be applied.\" The commentator relied on 111 ITR 525 (Cal.). The commentator further observed that \"applying the above rule, in . 42 ITR 589 declined to allow retrospective operation to be given to fourth proviso to Section 10(2)(vii) inserted by the Income-tax (Amendment) Act , 1946 which had been brought into force on 5-5-1946\". ", "7. Similar are the observations of and in Income-tax Law, Third edn., Vol. 1 at p. 193 under the head 'Law applicable to income-tax assessments'. These commentators have also relied on a number of decisions. ", "8. in case (supra) at p. 577 clearly observed : \"The first question to be answered is whether these dates [1-4-1940 when amendment to Section 10(2)(vii) of the Indian Income-tax Act, 1922 took effect and 1-4-1939 mentioned in the amended proviso] are to apply to the accounting year or the year of assessment. They must be held to apply to the assessment year, because in income-tax matters, the law to be applied is the law in force in the assessment year unless otherwise stated or implied,\" ", "9. Earlier, in Maharajah of Pithapuram's case (supra) observed that under the express terms of Section 3 of the Indian Income-tax Act, 1922 ('the 1922 Act') the subject of charge is not the income of the year of assessment but the income of the previous year. In that case, Section 16(1)(c) of the 1922 Act, which was amended by the Income-tax (Amendment) Act , 1939, was held to apply to the assessment year 1939-40 although the subject of charge was the income of the accounting year 1938-39. Section 16(1)(c) applied to revocable transfers of assets- whether they were effected before or after the commencement of the Income-tax (Amendment) Act . The assessee by certain deeds of trust and settlement dated 5-4-1933 had settled properties on his daughters with a provision reserving to himself powers to revoke the settlements and the question was whether for the assessment year 1939-40, the income of accounting year 1938-39 derived from such assets was assessable under Section 16(1)(c) and the assessee urged that only transfers effected after 1-4-1939 were hit by Section 16(1)(c) but repelled that contention and held that the law as amended would apply to the assessee. ", "10. To the same effect is the decision of in CIT v. [1940] 8 ITR 467 where it was held that law and statutory rules applicable for determining an assessment are the law and statutory rules in force for the year of assessment and not those which were in force during the (accounting) year the income of which is sought to be assessed. Thus, for the assessment year 1936-37, the notifications of 2-11-1935 and 4-4-1936, limiting the exemption of interest on securities purchased through the post offices was applicable though the income assessable was for the accounting year ending 31-3-1936. ", "11. 9 ITR 137 (Pat.), the question was whether the provisions of Section 16(3)(a)(iii) inserted by Section 2 of the Income-tax (Amendment) Act, 1937 applied to the assessment year 1937-38 in respect of income from assets transferred by husband to his wife otherwise than for adequate consideration before 1-4-1937 and it was held that the said provision applied to the transfers made before 1-4-1937. The , thus, repelled the contention that the amending Section would not apply to transactions entered into before the amendment. ", "12. There is thus a catena of decisions laying down, what has by now become a well established rule of interpretation, that any amendment which is in force at the beginning of the relevant assessment year must govern the case though the amendment is made after the income under assessment is earned in the accounting year which has since closed. in case (supra) followed the earlier decisions mentioned above and reaffirmed the said principle of construction of statutes. Similar view had been taken by in 72 ITR 637. ", "13. in case (supra) while dealing with double taxation relief under India & Burmah Income-tax Relief Order, 1936, held that the law to apply to the claim of the assessee in this case was the law as it stood in the year of assessment, namely, 1947-48. It was observed that only where there was a change in law even within the course of the assessment year, it was the law in force at the commencement of the assessment year that should apply in the absence of any statutory provision to the contrary. ", "14. in 84 ITR 661 observed that it was well recognized that specific dates in the 1961 Act and the Finance Act , 1955, had reference to assessment years and had nothing to do with the accounting years of an assessee which might differ from person to person. Thus, the amendment contained in the Finance Act was held applicable to the assessment year 1955-56. ", "15. in .) Ltd. 119 ITR 830 observed at p. 834 that it was a well settled proposition in the income-tax law that in income-tax matters, the law to be applied is the law in force in the assessment year unless otherwise stated or implied. followed the decision in case (supra). ", "16. in ' 120 ITR 921 reiterated that it was a cardinal principle of tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. They followed their decisions in case (supra) and 60 ITR 262 (SC). ", "17. in 25 ITR 58 was considering the applicability of the Finance Act , 1950 to 'United States of Rajasthan' for the assessment year 1950-51 and they observed that the income for the assessment year 1950-51 became assessable to Indian income-tax in respect of the previous year 1949-50. They rejected the contention that as the Constitution of India had come into force only on 26-1-1950, the income of the previous year before 26-1-1950 was not taxable to Indian Income-tax. At page 70, they observed that \"The case is thus one where the statute purports to operate only prospectively, but such operation has, under the scheme of the Indian Income-tax law, to take into account income earned before the statute came into force. Such an enactment cannot, strictly speaking, be said to be retroactive legislation, though its operation may affect acts done in the past. ", "18. in 's case (supra) observed : \"It is well settled that the Income-tax Act as it stands amended on the first day of April of any financial year must apply to the assessment of that year.\" However, dealing with amendment coming into force after 1st April, they observed \"Any amendments in the Act which comes into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force.\" explained that its earlier decision in case (supra) had laid down that the amended Act as on 1st April applied to assessment year and accounting year had no relevance and that though subject of charge was income of the previous year, law to be applied was that in force in the assessment year. ", "19. in CIT were dealing with the assessability to capital gains of sale of ornaments in the financial year 1972-73 in view of amendment of Section 2(14)(ii) of the Act made effective from 1-4-1973 by including jewellery in the definition of 'capital assets'. Question before the Court was whether the said amendment governed the assessment year 1973-74. Following case (supra), held that the sale of jewellery in the financial year 1972-73 was assessable in the assessment year 1973-74. thus rejected the assessee's contention that as the sale of jewellery was made before the amendment, the amendment did not apply to his case. ", "20. In v. [1973] 91 ITR 513 (Mad.), while dealing with voluntary disclosure under the Finance (No. 2) Act, 1967, observed that it was a well settled rule of interpretation that in construing the scope of legal fiction, it would be proper and even necessary to assume all those facts on which alone the fiction can operate and a construction which defeats the very object sought to be achieved by the must, if possible, be avoided. ", "21. Applying the aforesaid ratio to the facts of the case before us, the having declared that Section 40A(8) would operate from the assessment year 1976-77, it has to be assumed as a necessary corollary that the said Section would operate for the previous year relevant for the assessment year 1976-77 and to hold that the said Section would operate only in respect of expenditure incurred on or after 1-4-1976, as contended by the assessee, would nullify the 's intention to apply the said Section with effect from the assessment year-1976-77. We may observe that arguments advanced regarding interpretation of Section 64 of the Act, similar to those urged before us by the assessee-company, that the taxing provisions would apply only prospectively and would not affect transactions already completed, were rejected in a number of decisions where it was held that Section 64(1) concerns the income from transferred assets and not the date of transfer and if the income from transferred assets (to the wife or minor child without adequate consideration) arose in the accounting year relevant to the assessment year, the income was assessable. A number of cases are enumerated at page 1835 of Chaturvedi and Pithisaria's Income-tax, Third edn., Vol. 2. Similar are the observations at p. 2379 of Law of Income-tax, Seventh edn., Vol. 3. ", "22. In this context, we have to refer to .) Ltd. 76 ITR 84 (Cal.) on which the assessee has relied in support of his proposition that only the law in force in the accounting year should be applied. In that case, the company's accounting year had ended on 30-6-1959 and it had declared dividend in March 1960 when the statutory percentages of total income under Section 23A of the 1922 Act for declaration of dividend (within 12 months of close of previous year) were 45 per cent in the case of manufacturing, processing, etc. and 60 per cent in the case of trading. However, by Section 11 of the Finance Act, 1959, the said statutory percentages were amended to 50 per cent and 65 per cent respectively, with effect from 1-4-1960. ", "23. The controversy was whether the revised percentages would apply in the assessee's case in respect of assessment year 1960-61 for which the had made the assessment on 17-3-1961. held that as the dividend was to be declared within 12 months following the expiry of the previous year, the statutory percentages operative in the previous year only have to be considered and not the revised percentages. The came to this conclusion on analysing the language of Section 23A as well as the amendment introduced by the Finance Act , 1959 which, according to , intended the revised percentages to be applicable only prospectively from 1-4-1960. The further observed that tax cannot be levied by implication. The , therefore, was of the opinion that the revised percentages would not be applicable and only the percentages operative in the previous year would be operative in that case. ", "24. Thus, the said case was decided on the language of Section 23A of the 1922 Act and of the Finance Act , 1959 and does not lay down any general proposition regarding the applicability of law as on 1st April to the assessment year (irrespective of the previous year followed by the assessee). ", "25. .) Ltd. 71 ITR 380 (Mad.), it was held that the amended Section 23A which had become applicable from 1-4-1954 would apply in the assessee's case whose accounting year ended on 31-5-1954 (relevant for the assessment year 1955-56). Thus, view is different than that of . ", "26. The scheme of levy of additional income-tax on undistributed profits of private limited companies under Section 104 of the 1961 Act (and Section 23 A of the 1922 Act) is entirely different from levy of income-tax on income or allowance of expenditure. Under the aforesaid provisions, a private company must distribute out of its total income statutory percentages as dividend within 12 months of expiry of its previous year, otherwise, it will have to pay additional income-tax. Thus, the law applicable would be as obtaining immediately on close of the previous year. The proposition regarding applicability of income-tax laws as on 1st April being applicable in assessment year would, therefore, not be applicable while considering the special provision of levy of income-tax on undistributed income. That is why the case law relevant to the controversy before us, namely, of law existing on 1st April being applicable to assessment year was neither cited nor considered by in 's case (supra). We may point out that the assessee had to take positive action of declaring dividend within a time framework, i.e., immediately after the close of accounting year and in any case before the expiry of 12 months thereafter so as to avoid levy of additional income-tax. If the assessee did not declare dividend of statutory percentages of total income, then additional income-tax was to be levied by the . However, in the case before us, no positive action on the part of the assessee is contemplated and only at the time of computation of the total income, the has to disallow part of certain expenditure (on payment of interest) in the light of law obtaining as on 1st April of the assessment year in question. ", "27. Let us now analyse the assessee's arguments based on case (supra). The first argument is that though there is nothing in Section 40A(8) to say that the amount disallowed under that Section shall be deemed to be the income of the assessee but the said Section by implication treated the disallowed expenditure on interest as part of the income. Thus, there was implied deeming of the disallowed interest as income and the implied deeming of income did not have any retrospective effect as the 's usual practice was of giving the assessee a chance to arrange its affairs. It was admitted that Section 40A(8) was introduced by the Finance Act , 1975 with effect from the assessment year 1976-77, thus, giving one year's advance notice, still it was claimed that sufficient notice was not given to the assessees to arrange their affairs. Though the revenue contended that the was competent even to retrospectively amend the law and, thus, assess income which had already accrued in the earlier years, the assessee urged that for retrospective legislation, there must be specific intention expressed by the and that in the present case, there was no express declaration of such intention by the . It was urged that holding that Section 40A(8) operated from the assessment year 1976-77, irrespective of the previous year, would lead to absurd and anomalous results and applying the modern 'purposive approach' by considering the policy behind the enactment of curbing credits by non-banking concerns, the curb could only be on taking fresh interest-bearing deposits after 1-4-1976. ", "28. We have given very careful and anxious consideration to this matter and we find ourselves unable to accept the assessee's contentions. There is no warrant for equating the disallowed expenditure on interest with deemed income. Income and expenditure are two different and diametrically opposite concepts. Income is what comes in, while expenditure is what goes out. Thus, to treat income as interchangeable with expenditure would be confusing the issue. We, therefore, cannot accept the proposition that disallowed expenditure becomes deemed income. ", "29. Regarding giving the assessee a chance to arrange its affairs, we are unable to find any such rule of construction of statutes. When the has full and plenary powers even to make laws retrospective in operation, we do not see anything wrong with the introducing Section 40A(8) by the Finance Act , 1975 and making it effective only one year later, i.e., from 1-4-1976 which would thus be operative in the assessment year 1976-77. in of 's case (supra) at p. 223 observed \"under the express terms of Section 3 of the Indian Income-tax Act, 1922, the subject of charge is not the income of the year of assessment, but the income of the previous year. This is in direct contrast with the English Income-tax Acts, under which the subject of assessment is the income of the year of assessment, though the amount is measured by yardstick based on previous years\". Similarly, in case (supra) at p. 665 observed : \"It was contended by the learned counsel for the assessee that Section 2(6C)(iii) came into force on April 1, 1955, while the previous year relevant to the assessment year in question was from October 1, 1953 to September 30, 1954. Section 2(6C)(iii) , therefore, did not apply to the case. The contention is not well founded Further, it is well recognized that the specific dates which are mentioned in the Income-tax Act have reference to the assessment years and have nothing to do with the accounting years of an assessee which may differ from person to person. The amendment contained in the Finance Act , 1955, in respect of Section 2(6C)(iii) was thus applicable to the assessment year 1955-56 and was rightly invoked by the Income-tax Officer.\" ", "30. We are unable to accept contention that there was any ambiguity regarding the applicability of provisions of Section 40A(8) or that the applicability of the said provisions to the assessment year 1976-77 would lead to manifestly absurd and anomalous results. When the intention of the is clear and unequivocal, there is no room for trying to go behind the clear language of the Section. ", "31. on Interpretation of Statutes, Twelfth edn. observes at p. 28 under Chapter 2 while discussing the general principles of interpretation that the primary rule is of literal construction. The rule of construction is 'to intend the to have meant what they have actually expressed'. \"Where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise.\" ", "32. Odgers' Construction of Deeds and Statutes, Fifth end. at p. 260 under the head '8. Statute, if clear, must be enforced' observes \"if the language of a statute is clear, it must be enforced though the result may seem harsh or unfair and inconvenient\". Reliance is placed on Re. 's Contract [1941] Ch. 463 at p. 478 per Lord Greene M.R. ", "33. Craies on Statute Law, Seventh end. at p. 64 under Chapter 'Construction where the meaning is plain' under the heading 'Meaning and legal effect distinguished' observes : \"There is no place for interpretation or construction except where the words of the statute admit of two meanings.\" As said : \"Where the words of an Act of are clear, there is no room for applying any of the principles of interpretation which are merely presumptions in cases of ambiguity in the statute.\" Under the heading 'Construction according to intention' (on the same page) the author observed : \"The cardinal rule for the construction of Acts of the is that they should be construed according to the intention expressed in the Acts themselves. If the words of the statute are themselves precise and unambiguous, then no more can be necessary than to expound those words in their ordinary and natural sense. The words themselves alone do in such a case best declare the intention of the law-giver.\" It was further observed (on p. 65) that the primary rule is the literal rule and that the intention of the is not to be speculated on. ", "34. Bindra on Interpretation of Statutes, Fifth edn. at pages 552-553 under the heading 'Rule to determine tax liability' noted that the Lord observed in v. Attorney General [1869] LR 4 HL 100 : \"As I understand the principle of all fiscal legislation, it is this : if the person sought to be taxed comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be\". Similarly, in Attorney General v. Earl of said : \"Therefore, the fails if the case is not brought within the words of the statute, interpreted according to their natural meaning\". At p. 554 under the head 'Literal construction of words used', the author observed : \"It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax, one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the revenue satisfies the that the case falls strictly within the provisions of the law, the subject can be taxed.\" At p. 559, under the head 'Considerations of reason and justice not material', it was noted that in v. Hall,;Tounten, J. observed with reference to stamp law that it \"imports nothing of reason and justice but depends entirely upon the language of the \". The author further observed on the basis of AIR 1957 AP 706, 710. \"In case of a taxing statute, the should be guided by the general scope of the enactment and the express provisions of the statute and not by considerations which might weigh in a case arising under the statute of frauds or similar statutes\". At p. 560, the author noted that in the case of a fiscal enactment, one has to look at what is clearly said. There is no room for any 'intendment'. No argument based on hardship or inconvenience can be entertained. Rule of strict construction does not mean that the language of the provisions should be tortured into meaning something artificial, if its natural meaning is not repugnant to reason. Thus, the rules of interpretation of statutes are quite emphatic that where the language of a statute is clear, effect should be given to it, however, hard the case of the taxpayer may appear to be. ", "35. Applying the said rules to the case before us, we do not see how the provision for disallowance of interest under Section 40A(8) is not applicable to the assessment year 1976-77. We are, therefore, unable to accept argument that literal construction of Section 40A(8) would lead to absurd and anomalous results. has not spelt out what absurd or anomalous results he visualised and we are unable to see any such results. According to us, the provisions of Section 40A(8) do not lead to any absurd or anomalous results and the intention of the is quite clear that the said provisions are to apply in the assessment year 1976-77 and, therefore, the said provisions would apply, irrespective of the fact as to which previous year the particular assessee follows and so long as the previous year followed by the assessee would be relevant for the assessment year 1976-77, the provisions of Section 40A(8) would apply to that particular assessee. We have already noted that the had given the assessees one year's notice by introducing the said provision in the Finance Act , 1975 though it. was applicable for the assessment year 1976-77. Therefore, the submission of that an assessee should be given adequate notice to arrange his affairs, though legally not correct, is still factually invalid because the did give one year's advance notice to the assessees to arrange their affairs. The has plenary powers to legislate prospectively as well as retrospectively and there is no limitation on the 's power to direct from which date a particular fiscal provision would operate. It is true that in some cases the does specify a date from which date the said provision is to come into force, For example, under Section 40A(3) in respect of disallowance of payment of Rs. 2,500 or more not paid by a crossed cheque, the did specify that payments made after 31-3-1969 would be hit by the said provision. However, the\" has also specified in respect of a number of other fiscal provisions, particularly annual amendments to the 1961 Act brought through the Finance Act s that certain provisions would be applicable with effect from specified assessment years. This is a well recognized and much used method of amendment of the Act. We cannot arrogate to ourselves the power to sit in judgment over the wisdom of introducing a particular fiscal provision with effect from a particular assessment year and we have to give effect to the clear legislative intention as expressed by the through the amendment to the Act. It is not for us to twist the fiscal provision on the ground that literal construction of the fiscal provision would result in hardship or that the particular assessee did not get sufficient advance notice to arrange his affairs in the light of the amendment. Nor can we import 'purposive approach' to hold that though Section 40A(8) was clearly directed to be operative with effect from 1-4-1976 for the assessment year 1976-77, yet, according to us, it would apply only to expenditure on interest incurred after 1-4-1976. For the foregoing reasons, we are, therefore, anable to accept the assessee's contentions based on the view taken by the Madras Bench. ", "36. In the result, we uphold the Commissioner (Appeals)'s order that Section 40A(8) was applicable in the assessment year 1976-77 and, therefore, the disallowance made by the stands upheld. ", "37. We now deal with the other grounds raised in this appeal. ", "38. Ground Nos. 2-3 are regarding assessability of reimbursement of medical expenses and applicability of Sections 40A(5) / 40(c) of the Act. The in paragraph 3 of the assessment order observed as under : ", "3. Disallowance under Section 40A(5) and under Section 40(c) .-Assessee has worked out this disallowance at Rs. 2,60,659 without taking into account reimbursement of medical expenses. The same has been considered as perquisites while arriving at the above disallowance. The correct disallowance works out to Rs. 2,84,151. ", "The Commissioner (Appeals) in paragraph 7 noted the assessee's grievance against the 's treating reimbursement of medical expenses as perquisite. He upheld the 's action in applying Section 40A(5) which finding, according to us, was unnecessary as there was no controversy regarding the disallowance of expenses of Rs. 2,60,659 and the only controversy before the Commissioner (Appeals) was regarding the treatment of reimbursement of medical expenses as perquisite by the . Hence, ground No. 2 raising the point whether Section 40A(5) or Section 40(c) applied to director employees being academic is rejected. Salaries of all the directors were above Rs. 72,000 and, therefore, it is immaterial whether Section 40(c) or proviso to Section 40A(5) applies in the case of director employees. ", "39. The Commissioner (Appeals) further held that cash reimbursement of expenses constituted a distinct addition to the salary of the director employees. He thus varied the 's findings because the had treated the reimbursement of medical expenses as perquisite. The assessee-company as per Annexure XIII (paper book, page 31) had worked out the disallowance under Section 40A(5) in respect of directors at Rs. 2,28,424 (as exceeding Rs. 72,000 in each case) and in respect of other employees at Rs. 32,235 and the total disallowance at Rs. 2,60,659 and had given a note that the medical expenses reimbursed to the employees and directors had not been considered as perquisite while computing the aforesaid disallowance. The company furnished details of medical expenses (PB 32) of directors at Rs. 13,608 and all other employees at Rs. 10,233 totalling Rs. 23,841 and it is this amount which the added as 'disallowance under Section 40A(5) and 40(c) '. ", "40. Thus, the controversy before us is whether the Commissioner (Appeals) was right in treating the reimbursement of medical expenses as part of salary. ", "41. We may straightaway note that the matter is covered squarely by a decision of in 3 SOT 72, where in paragraph 19 the Bench noted that Explanation 2 to Section 40A(5) defined not only 'perquisites' but also defined 'salary' by stating that 'salary' has the meaning assigned to it in Section 17(7) , read with Section 17(5) , of the Act subject to certain modifications, namely, that perquisite was omitted from Section 17 (/)(iv). The Bench noted that 'profits in lieu of or in addition to salary or wages' was not omitted from the same Clause and that Section 17(3)(ii) defining 'profits in lieu of salary' included 'any payment . . . received by an assessee from an employer'. ", "42. The Special Bench observed that \"the words 'any payment' again is wide enough to cover every payment made by the employer to the employee irrespective of the context in which or the purpose for which the payment is made.... In other words, it would also include a payment made by the employer to the employee which is in the nature of payment made for reimbursement of expenses. (p. 77) ", "43. The Bench then arrived at the conclusion that 'salary as defined in Explanation 2 includes every cash payment due to or received by an employee'. The Bench was considering reimbursement by the employer to the employee of medical expenses and lunch expenses (paragraph 8). ", "44. At the hearing before us, the learned counsel for the assessee urged for reconsideration of the aforesaid decision. He relied on 's order in the assessee's case for the assessment year 1977-78 where the Bench had held in paragraphs 10 and 10(a) that cash reimbursement made by the assessec-company to its employees was not hit by Section 40A(5) in case of employees and by Section 40(c) in the case of directors and employee-directors. The Bench in paragraph 8 noted the assessee's contention that medical reimbursement was a perquisite but in view of expression 'whether convertible into money or not' qualifying perquisite in Section 40A(5)(a)(ii) , cash payments could not be covered by. the said sub-clause. Support was taken from .) Ltd. 132 ITR 125 (Bom.) where, following . 119 ITR 431 (Cal.) and . 125 ITR 150 (Mad.), held that amount paid by way of bonus and commission in cash by the assessee-company to employees was not a perquisite within the meaning of Section 40(c) (/7i) in view of the said term 'whether convertible into money or not' used in the said Section (which was operative in the assessment year 1964-65). The Bench accepting this contention held that medical reimbursement paid in cash was not a perquisite, as Section 40A(5)(a)(ii) contemplated disallowance of payment in kind only by the employer to the employee. The Bench noted that similar view had been taken in . 137 ITR 285 (Cal.) which had followed its earlier decision in case (supra) while interpreting provisions of Section 40(c)(iii) in respect of motor car allowance paid in cash to employees. ", "45. For holding further that the reimbursement of medical expenses was not even part of salary, the said Bench 'A' relied on the , decision in IT Appeal Nos. 676-679 (.) of 1980 dated 30-3-1981 (PB 33-34). ", "46. We have perused the said decision of where for holding that the cash allowances are not perquisites, reliance was placed on 's case (supra) and . 125 ITR 341 (Kar.). However, further observed that medical reimbursement was not a 'remuneration' within the meaning of Section 40(c) nor was a 'benefit or amenity'. The Bench for taking this view relied on some earlier decision which has not been made available to us. Thus, 's decision is no authority for holding that cash reimbursements by the employer to the employee are not part of salary. We have already noted above detailed discussion by in 's case (supra) for holding that cash payments by the employer to the employee are covered by salary. ", "47. The learned counsel for the assessee next urged that the expression 'whether convertible into money or not' occurring in Section 40A(5)(a)(ii) qualifying 'perquisite' excludes cash payment as was held in 's case (supra). It is next urged that the definition of 'perquisite' in Explanation 2(b) to said Section is exhaustive and that Clauses (i) to (v) thereof do not contemplate cash payment. ", "48. Accepting the above argument of the assessee should imply that cash payments being not covered by the definition of 'perquisite' under Explanation 2(b), should fall under 'salary' under Explanation 2(a) in view of inclusive definition of 'salary' as per Section 17(1) which has been adopted by Explanation 2(a) but the learned counsel for the assessee even disputes this proposition on the ground that the ordinary meaning and connotation of 'perquisite' should not be ignored and while ordinary meaning of 'salary' does not include reimbursement of expenses, ordinary meaning of 'perquisite' would take in reimbursement of expenses. For the proposition, he refers to discussion under the head 'Perquisite' in Kanga & Palkhivala's Law and Practice of Income-tax, Seventh edn. under Section 17 which reads as follows : ", "'Perquisite'.-'Perquisite' is defined in the Oxford English Dictionary as 'any casual emolument, fee, or profit, attached to an office or position in addition to salary or wages'. 'Perquisite' denotes a personal advantage ; it is something that benefits a man by going 'into his own pocket' : it does not cover a mere reimbursement (be it by way of allowance) of travelling or other expenditure incidental to the employment. Thus, transport facilities made available to an employee for going from home to office and back, should not be regarded as a perquisite. (p. 311) ", "49. The assessee relied on CGT v. [1971] 82 ITR 599 where approved the following observations of Craies on Statute Law, Sixth edn. at p. 213 : ", "...An interpretation Clause which extends the meaning of a word does not take away its ordinary meaning. An interpretation Clause is not meant to prevent the word receiving its ordinary, popular and natural sense whenever that would be properly applicable, but to enable the word as used in the Act, when there is nothing in the context or the subject-matter to the contrary, to be applied to some things to which it would not ordinarily be applicable. (p. 605) Reliance was also placed on CGT v. Dr. [1974] 95 ITR 476 at p. 481 where extracted the observations of in v. AIR 1957 SC 121 to the effect that there must be compelling words in the statute to show a meaning different from or in excess of the ordinary meaning was intended and where within the framework of the ordinary acceptation of a word, every single requirement of the definition Clause was fulfilled, it would be wrong to take the definition as destroying the 'essential meaning' of that word. ", "50. The revenue's contention was that the purpose of introduction of Section 40A(5) was given in the Finance Minister's Budget Speech for 1971-72 in 80 ITR (St.) 96 which reads : ", "I am firmly of the view that the fiscal instrument must be deployed to discourage payment of high salaries and remunerations which go ill with the norms of egalitarian society. I accordingly propose to impose a ceiling on the remuneration of company employees which would be deductible in the computation of taxable profits. The ceiling is being set at Rs. 5,000 per month. Together with the existing ceiling of Rs. 1,000 per month in the case of perquisites, the allowable overall ceiling on remuneration and perquisites, for purposes of taxation, will be at Rs. 6,000 per month.... ", "It was, therefore, urged for the revenue that Section 40A(5) was a complete code covering the payments by the company to its employees in the form of salary, remuneration and perquisites and, therefore, no item could be said to fall outside these categories. It was emphasized that while 'perquisite' was given an exhaustive definition by Explanation 2(b) to Section 40A(5) by using the expression 'perquisite means', the term 'salary' was not given an exhaustive definition by Explanation 2(b) and only the inclusive definition of Section 17(1) was grafted in the said Explanation and, therefore, whatever does not fall under the head 'Perquisite' would be covered under the inclusive definition of 'salary'. It was urged that in this context the ordinary meaning of the word 'perquisite' cannot take away the force of an enactment nor defeat its object. Reliance was also placed on Notes on Clauses in the Finance (No. 2) Bill, 1971 in 80 ITR (St.) 147 where dealing with Clause 10 it was observed : ", "... 'salary' is being defined broadly on the lines of the provision in Section 17 of the Income-tax Act subject to certain modifications. The expression 'salary' will include wages ; any annuity or pension ; any gratuity, any fees, commissions or profits in lieu of or in addition to any salary or wages;... It will, however, not include perquisites.... ", "It was, therefore, urged that reimbursement of medical expenses having been held to be not perquisite in view of the expression 'whether convertible into money or not' governing the expression 'perquisite' in Section 40A(5)(a)(ii) and thus restricting its ordinary meaning, the cash reimbursement would necessarily fall under 'salary' in view of the inclusive and wide definition of 'salary' in Section 17(1) , read with Section 17(3) and in view of the clear enunciation of law by the , Special Bench, Bombay in case (supra). ", "51. We see merit in the revenue's contentions. While definitions of 'sary' and 'perquisite' in Section 17(1) are inclusive, in Expnation 2 to Section 40A(5) an exclusive and exhaustive definition of 'perquisite' was given as per Cuse (b) covering only five categories enumerated therein, but in respect of 'sary', the inclusive definition of Section 17(7) was adopted, which means that what is not covered by five categories of 'perquisite' would fall in the net of 'sary' in view of 'sary's' inclusive definition in Section 17(1) . We have already noted that Section 17(5) defining 'profits in lieu of sary' includes under Sub-cuse (ii) any payment due to or received by the employee from the employer. Thus, all payments by the employer to the employee, which are held to be not perquisite like reimbursement of medical expenses, would necessarily be covered under 'sary'. In this connection, the revenue is right in relying on the Finance Minister's speech as well as notes on cuses to show the 's intention in introducing Section 40A(5) to put a curb on saries, remunerations and perquisites paid by companies to its high executives. The 'mischief rule' as enunciated in Heydoris Case 3 Co. Rep. , of , Twelfth edn. is : ", "...that for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered: (1st) What was the common law before the making of the Act. (2nd) What was the mischief and defect for which the common law did not provide. (3rd) What remedy the hath resolved and appointed to cure the disease of the commonwealth. And, (4th) The true reason of the remedy ; and then the office of all the Judges is always to make such construction as shall suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for continuance of the mischief and pro privato commodo and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico.... (p. 40) ", "52. Thus, in view of the declared intention of the to curb the high salaries and perquisites of senior executives of the companies, we have to interpret Section 40A(5) so as to advance the remedy and to suppress subtle inventions and evasions for continuance of the mischief and to add force and life to the cure and remedy, according to the true intent of the makers of the Act. Thus, to hold that reimbursement of medical expenses would neither be covered under 'salary' nor under 'perquisite' would be to defeat the purpose of the legislation. ", "53. on Interpretation of Statutes under the head 'Construction ut res magis valeat quam pereaf observed : ", "'If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that would legislate only for the purpose of bringing about an effective result.' 'Where alternative constructions are equally open, that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating ; and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system'. (p. 45) Applying the above principle, we have to avoid an interpretation which would make the provisions of Section 40A(5) ineffective in curbing the mischief which the intended. ", "54. in Law of Income-tax, Seventh edn., Vol. 1 under Section 17 under the head \"4. 'Perquisites' Sub- section (2).--'Perquisite', meaning of\", observed : ", "Formerly, the word 'perquisite' was used to denote emoluments not fixed generally and granted mostly ex gratia, whether in cash or in kind, it denoted a benefit, amounts or advantage mostly in kind enjoyed by the employee at the cost of the employer, generally in addition to the salary or wages to which he is entitled. Perquisites are, in many cases, in the nature of voluntary payments attached to an office or employment, such as the fee of any clerk serving under a barrister, but in some cases, there may also be legal obligation to pay, though, in common parlance, one rarely used the term 'perquisites' where the payment is claimable as of right. Voluntary or not, when actually paid, they fall to be taxed. Their characteristic is that they are payable only during the continuance of employment and are directly dependent upon service. They cease when the employment ceases. (p. 970) ", "55. At the same page, the commentator noted that 'the grant or allowance of perquisites...has become a regular feature of almost all employment,... The statutory definition of salary and wages had, therefore, to be enlarged as to comprehend the most common forms of advantages and benefits enjoyed by an employee....' ", "56. While dealing with 'profits in lieu of salary' under Section 17(5) at page 983 under paragraph 14(c) 'other payments received from employer-clause (ii)', the commentator noted that \"any payment due to or received by an asscssee from his employer...is taxable as 'profits in lieu of salary'. ", "... This is a comprehensive provision by virtue of which all payments made by an employer to an employee whether made in pursuance of a legal obligation or voluntarily are brought under 'profits in lieu of salary'. ", "57. We further note that in [l985] 153 ITR 444 observed at p. 455 that cash payment made by the employer to the employee as cash allowance was not covered under definition of 'perquisite' as per Clause (b)(iv) of Explanation 2 to Section 40A(5) and that the said expenditure was expenditure or payment coming under Section 40A(5)(a) (0 which covers any expenditure which results directly or indirectly in the payment of any salary to employee. The Court, therefore, held that car allowance was, thus, a cash payment periodically made in addition to salary, and, therefore, partook of the nature of salary. ", "58. In this context, we also note that (P.) 149 ITR 457 was dealing with disallowance under Section 40(a)(v) of reimbursement by employer company of medical expenses incurred by managing director in the assessment years 1969-70 and 1970-71 when the said provision was in force. [ Section 40(a)(v) was deleted and substituted by Section 40A(5) with effect from 1-4-1972.] dissented from the Full Bench decision of in . 135 ITR 19 where it was held that house rent allowance paid by the employer company to its employee was a perquisite and the words 'whether convertible into money or not' qualifying the words 'beneftt, amenity or perquisite' would not exclude cash payments by the employer to the employee and a contrary construction accepted by the Karnataka, Calcutta and Madras High Courts was irrational defeating the very purpose of Section 40(a)(v) -The Kerala High Court, therefore, held that house rent allowance received by an employee from an employer was covered by Section 40(a)(v) . ", "59. , however, fell in line with the aforesaid three , who, in case (supra), case (supra) and 's case (supra) had taken the view that the expression 'whether convertible into money or not' qualifying the words 'benefit, amenity or perquisite' excluded cash payments made by the employer to the employee. in this context had noted at page 462 the contentions by the assessee's counsel : 'According to him, any cash payment made by the company to its employee would be part of the salary'. at page 465 observed : 'Any cash payment could well be part of the salary as given in Section 17 of the Act'. accordingly held that reimbursement of medical expenditure of the managing director was not a 'benefit, amenity or perquisite', whether convertible into money or not, and, therefore, Section 40(a)(v) did not apply to cash payments by the employer to the employee. [The question regarding medical reimbursement expenses being part of salary was not referred to as under Section 40(a)(v) fell only expenditure on provision of benefit, amenity or perquisite]. We may elucidate by referring to legislative changes. Section 40(c)(iii) , as amended by the Finance Act , 1964, put a ceiling of one-fifth of salary, on all expenditure on employees resulting in benefit, amenity or perquisite. This Clause was substituted by Section 40(a)(v) with effect from 1-4-1969 which put a further ceiling of Rs. 1,000 per month on expenditure on benefit, amenity or perquisite to an employee. Section 40(a)(v) was substituted by Section 40A(5) with effect from 1-4-1972 which put a ceiling on salary to employees of Rs. 5,000 per month, besides ceiling on perquisites of Rs. 1,000 per month and one-fifth of salary. Similarly, on the directors of the company, overall ceiling of Rs. 72,000 was imposed with effect from 1-4-1972 under Section 40(c) in respect of expenditure on remuneration, benefit, amenity, etc. Thus, before 1-4-1972, there was no controversy whether an expenditure was covered by salary or perquisite. In case of an employee of a company, the was concerned only with curbing perquisites, benefits or amenities. The was not concerned about quantum of salary of employees. In respect of a director of a company, the was concerned only with reasonableness of total expenditure on director as remuneration, benefit, amenity or expenditure or allowance in respect of company's assets. ", "60. In this context, we may also note that the head-note in 's case (supra) is incorrect insofar as it is indicated that house rent allowance is not a perquisite 'or part of salary'. All that held at page 342 was that payment of house rent allowance or bonus is not a perquisite because of the expression 'whether convertible into money or not' qualifying the words 'benefit, amenity or perquisite'. ", "61. We are, therefore, of the view that the reimbursement of medical expenses being a cash payment by the employer to the employee would fall under 'salary' in view of the very wide and inclusive definition of 'salary' as per Section 17(1) which is adopted by Clause (a) of Explanation 2 to Section 40A(5) , in contradistinction to only five enumerated categories being covered under 'perquisites' as per Clause (b) of said Explanation 2 to Section 40A(5) . Thus, salary would cover any perquisite not falling in the said five categories of perquisites and particularly a cash payment [being hit by the expression 'whether convertible into money or not' qualifying 'perquisite' in Section 40A(5)(a)(ii) ]. We have already noted above the view taken by in 's case (supra) that Section 17(3) by giving inclusive definition of 'profits in lieu of salary' [appearing in Section 17(7)(iv) ] covered in its Sub-clause (ii) any payment due to or received by an employee from an employer. We note that the said Sub-clause excluded from purview of salary, following payments : ", "(A) death-cum-retirement gratuity-Section 10(70) of the Act (B) payment in commutation of pension-Section 10(10A) (C) compensation on retrenchment received by workmen under the Industrial Disputes Act , 1947-Section 10(10B) (D) payment from a provident fund to which Provident Funds Act , 1925 applies- Section 10(1) (E) accumulated balance in provident fund becoming payable to employee- Section 10 (/2) (F) house rent allowance- Section 10(13A) . ", "However, under the said sub-clause, payments from provident fund or other fund (not being approved superannuation fund) are included under salary to the extent it does not consist of contributions by employee or interest on such contributions. ", "62. From the above narration, it would be clear that but for the exclusion provided in the said sub-clause, the said payments would have been treated as salary though taking ordinary meaning of payments 'in lieu of salary', nobody would consider such payments to be in lieu of or instead of or in substitution of salary. This shows that the said Section 17(3)(ii) was very wide in its sweep, despite its rather deceptive or inelegant descriptions as 'profits in lieu of salary'. ", "63. We further observe that Clause (iv) of Section 17(i) besides taking in its sweep 'profits in lieu of salary', also covers 'profits in addition to any salary'. Thus, any payments received by an employee from his employer under terms of service contract or otherwise would be fully caught in the net of 'profits in addition to any salary'. [Emphasis supplied] ", "64. We further note that Clause (i) of Section 40A(5)(a) covers 'any expenditure which results directly or indirectly in the payments of any salary'. [Emphasis supplied] Salary is recompense for the services rendered. While salary (paid periodically) is the direct payment : any benefit or advantage or amenity received by the employee from employer would be the indirect payment of salary and would thus be clearly covered by the said Clause (0 of Section 40A(5)(a) . ", "65. For the above reasons, we see no ground to depart from the view taken by , Bombay, in case (supra). We would accordingly hold that reimbursement of medical expenses being a cash payment was rightly treated as part of salary for computing the disallowance under Section 40A(5) . Position is different while assessing perquisite of medical reimbursement in hands of employee under Section 17 in view of the circulars. Circular No. 336 dated 16-4-1982 [See Taxmann's Direct Taxes Circulars, Vol. 1, 1985 edn., p. 163] directed that only medical reimbursement in excess of one month's salary is to be included in hands of employee. Circular No. 376 dated 6-1-1984 [See Taxmann's Direct Taxes Circulars, Vol. 1, 1985 edn., p. 163] clarified that only reimbursement in excess of Rs. 5,000 was includible. However, Circular No. 445 dated 31-12-1985- 24 Taxman (St.) 111 exempted all expenditure in a recognised public hospital in India. ", "66. We may further observe that the position under Section 40(c) is clearly against the assessee as the above argument is not available to the assessee because the word 'perquisite' does not appear in Section 40(c)(i) which only uses the words 'remuneration or benefit or amenity'. Further, the restrictive phrase 'whether convertible into cash or not' is missing in the said clause. Under these circumstances, the reimbursement of medical expenses to a director by employer company would clearly be hit by Section 40(c)(i) because it is an expenditure which results directly or indirectly in the provision of 'remuneration or benefit or amenity' to a director. ", "67. Thus, both under Section 40A(5) as well as under Section 40(c) , reimbursement of medical expenses by the employer company to the employee would form part of the remuneration of the employee and in case of a director, any payment in excess of Rs. 72,000 would have to be disallowed. In case of employees simpliciter, provisions of Section 40A(5) would apply and, therefore, considering the medical reimbursement as part of the salary, perquisites in excess of one-fifth of salary have to be disallowed. As from the computation given to us, it is not clear how the disallowance has been computed by the ITO, we direct the ITO to examine if any recomputation of disallowance is called for in the light of our directions above. ", "Ground No. 1 : ", "68. The assessee is aggrieved against disallowance of depreciation on assets used by the assesssee for conducting scientific research. These assets were installed in the earlier years for which deduction equivalent to full cost has already been allowed to the assessee under Section 35 of the Act. The rejected the assessee's claim for depreciation and the Commissioner (Appeals) upheld it in view of the amendment of Section 35(2)(iv) by the Finance (No. 2) Act, 1980. Under similar circumstances, in . 149 ITR 771 has held that depreciation cannot be granted for the subsequent year on the assets on which the relief under Section 35(2) equivalent to the full cost has already been allowed. The assessee, however, contends that the constitutionality of the aforesaid amendment in 1980 is under challenge before and, therefore, the be directed to abide by the decision of . We direct accordingly. ", "Ground No. 4 : ", "69. Foreign travel expenses of Rs. 19,783 of Mrs. , wife of chairman of board of directors of the assessee-company, was disallowed by the after observing that the assessee was unable to produce any resolution of board of directors to sanction the said visit by the wife who accompanied her husband on the foreign visit and, thus, according to the , there was no evidence that her visit served the business interest of the assessee-company. The Commissioner (Appeals) vide paragraph 9 noted the assessee's contention that Mr. had gone abroad for business discussion with the assessec-company's British Associates and had also visited France and Italy where the assessee-company had also its associates and that on such, visits it was customary for meeting at social level that the chairman should be accompanied by his wife. The Commissioner (Appeals), however, rejected the assessee's contention on the ground that the business connection of the wife's visit was too far-fetched. ", "70. At the hearing before us, our attention was drawn to the company's application to for release of foreign exchange for the chairman and his wife and the application form indicated that they were proceeding abroad for business purposes. sanctioned on 7-5-1975 foreign exchange of \u00a3 840 for Mr. and \u00a3 210 for his wife for their stay of 40/42 days in UK, Italy and France. The learned counsel for the assessee reiterated that the wife accompanying the husband (chairman) was in business interest. Reference was made to company's application dated 18-4-1975 to the Assistant Controller, , , indicating, that chairman and chief executive of ' extended invitation to Mr. & Mrs. and that the wife was accompanying her husband as a number of social engagements were included in the programme. was placed on Taxes & Planning dated 15-7-1984 a decision of the Bombay Bench in v. [IT Appeal Nos. 2606 and 2607 (Bom.) of 1982] where in paragraph 22 the Bench upheld the Commissioner (Appeals)'s order that wife accompanying the husband abroad (who is a director of the company) was in business interest. ", "71. The revenue relied on . 153 ITR 422 (Mad.) and (P.) 153 ITR 437 (Guj.). In the first case, wife had accompanied the husband on foreign tour. The husband was a partner of the firm and the wife had accompanied him because of the husband's indifferent health. held that the wife's travelling expenses were in the nature of personal expenses and even assuming that the expenditure related to business purposes, the expenditure had a dual and twin purpose and served not only purposes of business but also a personal or private purpose and as the expenditure did not exclusively serve the business, it was not allowable under Section 37(1) of the Act. In the second case, was considering the case of a director of a company keeping indifferent health and his wife accompanying him on the foreign tour. It was urged before that in case the wife had not accompanied the husband, the company would have had to engage a nurse. still held that expenses being personal, were not allowable as the wife was not a qualified or trained nurse. ", "72. In both the above cases, the asscssees were unable to prove that the wife accompanied the husband for business considerations. The case before us is, therefore, entirely different where it is claimed that the wife accompanied the husband because of business considerations. In the modern age and more so in the Western countries, the senior executives are, as a matter of social custom, accompanied by their wives when the visit, though for business purposes, has necessarily some social aspects also. Under these circumstances, we hold that the expenditure of Rs. 19,783 which includes air-fare of Rs. 15,656 and foreign exchange of Rs. 4,022 equivalent to \u00a3 210 is an allowable expenditure. ", "Ground No. 5.: ", "73. The rejected the assessec's claim of deduction of surtax and the Commissioner (Appeals), following the Tribunal Special Bench, Bombay decision in v. [1983] 3 SOT 384, upheld the disallowance. 144 ITR 317 (Cal.), 159 ITR 431 (Ker.) and 26 Taxman 187 (Mad.), similar view has been taken. We, accordingly, uphold the orders of lower authorities on this point. ", "74. In the result, the appeal is partly allowed."], "relevant_candidates": ["0000097788", "0000165529", "0000208673", "0000308296", "0000375925", "0000416340", "0000428028", "0000485405", "0000537027", "0000565623", "0000621499", "0000691088", "0000823444", "0000873220", "0000963833", "0000993745", "0001002323", "0001009696", "0001106830", "0001181032", "0001201179", "0001270260", "0001340757", "0001476134", "0001479353", "0001527327", "0001560985", "0001647347"]} {"id": "0001270113", "text": ["PETITIONER: Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT: 01/11/1957 BENCH: , BENCH: , AIYYAR, T.L. VENKATARAMA , S.K. SARKAR, A.K. BOSE, VIVIAN CITATION: 1958 AIR 36 1958 SCR 828 ACT: Union Service-Employee's Protection under the Constitution- Availability-\"Dismissed or removed or reduced in rank,\" Meaning of-Railway Servant reverted to substantive post in lower class, if reduced in rank-Constitution of India, Arts. 311, 31O. HEADNOTE: The appellant, , was appointed to as a Signaller (Telegraphist) in 1924 and was promoted to the post of Chief Controller in 1950, both the posts being in class III Service. On July 2, 1951, he was appointed to officiate in class II Service as Asst. Superintendent Railway . On certain adverse remarks made against him in his Confidential Report for the year ending March 31, 1953, the General Manager on June 21. 1953, remarked as follows-\"I am disappointed to read these reports. He should revert as a subordinate till he makes good the short-coming noticed in this chance of his as an officer. Portions underlined to be communicated to him.\" Thereupon the appellant made a representation, but on (I) [1953] S.C.R. 730. 829 August 19, 1953, the General Manager issued a notice as follows:-\"Shri , , Saharnpur, is transferred to Headquarters office and appointed to officiate in Class II service as Assistant Signal and Tele-Communication Engineer () vice Shri who on relief reverts to Class III T appointment.\" Against this order the appellant moved under Art. 226 of the Constitution. The single judge who heard the matter held that the order was invalid as the provisions of Art. 311(2) of the Constitution had not admittedly been complied with. on appeal, however, set aside the order of the Single judge and dismissed the appellant's writ application. The question for decision was whether the order of the General Manager amounted to a reduction in rank within the meaning of Art. 311(2) of the Constitution and the appellant was entitled to a reasonable opportunity of showing cause against the order. Held (per , , , S. K. , , , dissenting) that the order of reversion made against the petitioner did not amount to a reduction in rank within the meaning of Art. 311(2) Of the Constitution and he was not entitled to the protection of that Article. Like Art. 31O of the Constitution, which makes no distinction between persons holding permanent or temporary posts in the matter of their tenure being dependent on the pleasure of the President or the Governor, Art. 311 which is in the nature of a proviso to Art. 310 , also makes no distinction between permanent and temporary posts and extends its protection equally to all servants holding permanent or temporary posts or officiating in any of them. v. , I.L.R. (1955) Nag. 893; , A.I.R. (1957) Punj. 42 ; , A.I.R. (1957) Punj. 191 and v. , A.I.R. (1957) Raj. 81, overruled. But the protection of Art. 31I can be available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise. These were the major punishments evolved by the Service Rules and Rules of the Railway Code, and well-understood as such, against which protection was sought to be provided by the Rules. These protections were in due course incorporated in s. 240 of the of India Act, 1935, and reproduced in Art. 311 of the Constitution, thus qualifying the principle embodied in Art. 310(1). , (1954) S.C.R. 1150, referred to. jayanti , A.I.R. (1951) All. 793 ; , A.I.R. (1956) Bom. 455; , A.I.R. (1954) 830 Cal. 383 ; Rabindra Nath v. The General Manager, Eastern Railway, (1955) 59 C.W.N. 859 ; jatindra , (1957) 61 C.W.N. 815; , A.I.R. (1957) J. & K. 11; Ganesh Balkrishna Deshmukh v. The of Madhya Bharat, A.I.R. (1956) M.B. 172; , A.I.R. (1957) Mys. 8; M. V. Vichoray v. The of Madhya Pradesh, A.I.R. (1952) Nag. 288; v. Post Master General, A.I.R. (1955) Pat. 381 and v. , A.I.R. (1955) Tr. CO. 12, approved. One test for determining whether the termination of service was by way of punishment or otherwise is to ascertain whether under the Service Rules, but for such termination, the servant has the right to hold the post. In the three cases of (1) substantive appointment to a permanent post, (2) temporary appointment for a fixed term and (3) a temporary appointment which has ripened into a quasi- permanent status under the Temporary Service Rules, where such a right exists, the servant will be entitled to the protection of Art. 311. Conversely, where no such right can exist, as in the case of a probationary or officiating appointment to a permanent or temporary post or where the service has not ripened into a quasi-permanent status, and under the general law the service can be terminated on reasonable notice, the termination of service cannot amount to a punishment and attract the Article. Broadly speaking, Art. 311(2) can apply to those cases where the servant, if in private employment, could maintain an action for wrongful dismissal, removal or reduction in rank. So where the has, by contract, express or implied, or under the Rules, the right to terminate the service at any time, such termination, in the manner provided in the contract or under the Rules, cannot attract the provisions of Art. 311. That does not, however, mean that the termination of service of a servant who has no right to the post can never be a dismissal or removal by way of punishment. Although in such a termination the actual motive of the must be wholly irrelevant, where it expressly chooses to penalise the servant for misconduct, negligence, inefficiency or the like by inflicting on him the punishment of dismissal, removal or reduction, the requirements of Art. 311 must be complied with. , (1953) S.C.R. 655 , (1955) 1 S.C.R. 26 and . 58 Bom. 673, referred to. A reduction in rank must, similarly, be a punishment if it carries penal consequences with it and the two tests to be applied are (1) whether the servant has a right to the post or the rank or (2) whether evil consequences such as forfeiture of pay or allowances, loss of seniority in his substantive rank, stoppage or postponement of future chances of promotion, follow as a result of the order. Where either of these tests applies, the reduction in 831 rank mast be one within the meaning of Art. 311 (2) of the Constitution and attract its protection. In the instant case, the appellant was holding an officiating post and had no right under the rules of the Railway Code to continue in it. Under the general law such appointment was terminable at, any time on reasonable notice, and the reduction could not operate' as a forfeiture of any right. The order of the General Manager visited him with no evil consequences. Consequently, he was not reduced in rank by way of punishment. Per there can be no doubt that Art. 311 applies to all classes of Servants whether permanent, quasipermanent, officiating, temporary or on probation and that the words dismissal, removal and reduction in rank used therein have a special meaning, that Article, properly construed, cannot be confined to the penalties prescribed by the Service Rules. The gist of it is neither the form of the action nor the procedure nor what operated in the mind of the competent authority. The real test is whether evil consequences over and above those that would ensue from a \"contractual termination\" are likely to ensue. If they are, Art. 311 is attracted even though such evil consequences are not prescribed as \"penalties\" under the Rules. Though the conditions of service prescribed by the Rules can be varied unilaterally in some cases because of the \"pleasure\" of the President, they cannot be ignored as long as they stand, and if they are infringed while in force, Art. 311 will be attracted in an appropriate case. , (1953) S.C.R. 655 and , (1955) S.C.R. 26, referred to. Nor can the protections afforded by Art. 311 be nullified by a splitting up of the order. In the present case the General Manager's remarks in the confidential file, which formed a part of the operative order and was its real foundation, clearly indicated the mischief, that the appellant was not to be promoted to a like post until in the opinion of some competent Officer he had made good his previous short-comings. That was an evil consequence, over and above that which would follow from a mere \"contractual termination\" of his engagement in the higher post, and so was sufficient to attract the protection of Art. 311. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 65 of 1957. Appeal from the judgment and order dated January 1, 1956, of (Circuit Bench) at Delhi in Letters Patent Appeal No. 28 of 1955, arising out of the judgment and order dated April 15, 1955, of the Single Judge, of the Circuit Bench of in Civil Writ No. 36-D of 1955. ", " and , for the appellant. and , for the Respondent. and , for the intervener. 1957. November 1. The judgment of , , and . was delivered by Bose J. delivered a separate judgment. ", "DAS C. J.-This appeal has been filed with a certificate of fitness granted by the Punjab High court on August 20. 1956. It is directed against the judgment and order passed by a Division Bench of that court on January 19, 1956, in Letters Patent Appeal No. 28 of 1955, reversing the judgment and order of Mr. Justice pronounced on April 15, 1955, whereby his Lordship had allowed the appellant's application being Civil Writ No. 36-D of 1955 and set aside the order passed by the General Manager, on August 19, 1953, reverting the petitioner from the post of Signal and Tele-communication Engineer, () in Class II service where the appellant was officiating to his substantive post in Class III service. This appeal raises a very important question about the construction of art. 311 of the Constitution. ", "The facts are shortly as follows:-In August 1924 the appellant joined the railway service as a Signaller (Telegraphist). As a result of selection, he was promoted as Section Controller in 1942 and as Deputy Chief Controller in 1947 and as the Chief Controller in 1950. All these posts were in Class III service. On March 31, 1951, seven candidates, including the appellant, appeared before a selection board constituted for selecting a candidate for the post of Assistant Superintendent Railway Telegraphs, which was a gazetted post in Class 11 Officer's cadre. The appellant was selected out of the seven candidates for this post. On July 2, 1951, a notice of appointment was issued from the headquarters of , Delhi, notifying that \" Mr. , Officiating Chief Controller, is appointed to officiate in Class II service as Asstt. Spdt. Rly. Telegraphs, Headquarters Office vice Mr. whose term of temporary re-employment expires on the afternoon of 3rd July, 1951 \". The applicant actually relieved Mr. in the afternoon of July 3, 1951. It appears that on April 28, 1953, one . made certain adverse remarks against the appellant in his confidential report for the year ending March 31, 1953. This confidential report came before , C.S.T.E., on May 25,1953, who confirmed the views expressed by and added his own opinion which was also adverse to the appellant. According to the usual practice obtaining in the office the aforesaid remarks were placed before the General Manager, , who on June 11, 1953, remarked thereon as follows: \" I am disappointed to read these reports. He should revert as a subordinate till he makes good the short-comings noticed in this chance of his as an officer. Portions underlined red to be communicated.\" ", "The adverse remarks against the appellant in the confidential report for the year ending March 31, 1953, which were communicated to the appellant for his information by a confidential letter No. E-106/180 dated June 29, 1953, were as follows: ", "\"............ He is, however, inclined to be hasty in his decisions. His office work is scrappy and does not show attention to detail. His relations with staff as well as officers have not been happy. He has displayed a tendency to resort freely to transfers and punishment of staff, as a means of correcting their faults and in regard to officers has not maintained the proper tone and approach in official notings, discussions and letters to Divisions. The above short-comings have been brought to his notice on a number of occasions both in person and in writing, without any improvement.\" ", "Remarks of , C.S.T.E. ", "\". ............... This officer suffers from an inflated idea of self importance. His ways and manners require radical change if he desires to have a successful career as an officer.\" ", "Remarks of the General Manager. ", "\"I am disappointed to read these reports ...............\" On July 24, 1953, the appellant, who had by this time earned two increments on July 4, 1952 and July 4, 1953, made a representation against the remarks made against him. On August 19, 1953, however, notice No. 940-E/14 (E.I.A.) was issued by the General Manager (P) to the following effect: \" , , Saharnpur, is transferred to Headquarters office and appointed to officiate in Class 11 service as Assistant Signal and Tele-communication Engineer (Telegraphs) vice Shri , who on relief reverts to Class III appointment.\" ", "The appellant on August 20, 1953, appealed to the General Manager for reconsideration and thereafter on October 19, 1953, appealed to and made a representation also to the President of India. On February 2, 1955, wrote to the General Manager as follows: ", "With reference to your letter No. 3780 dated the 30th December, 1953, the desires that you should inform that his reversion for generally unsatisfactory work will stand, but that this reversion will not be a bar to his being considered again for a promotion in the future if his work and conduct justify. He should also be informed that he has, in his representation, used language unbecoming of a senior official, and that he should desist from this in future. ", "You may watch his work up to the end of March, 1955 and judging from his work and conduct, you may treat him as eligible for being considered for promotion as Assistant Transportation Superintendent in the Selection that may be made after March 1955.\" This was communicated to the petitioner on February 17, 1955. ", " ", "In the meantime the petitioner had on February 9, 1955, filed his writ petition under Art. 226 of the Constitution. Mr. Justice took the view that the petitioner had been punished by being reduced in rank without being given an opportunity to show cause against the action proposed to be taken in regard to him and that consequently the order was invalid for non-compliance with the provisions of Art. 311 (2) of the Constitution. On a Letters Patent Appeal filed by , ( and ) reversed the order of J. and dismissed the petitioner's writ application. having subsequently certified that it was a fit case for appeal to this Court, the petitioner has now come up on appeal before us and the question for our decision is whether the order passed by the General Manager on August 19, 1953, amounted to a reduction in rank within the meaning of Art. 311 (2) of the Constitution, for if it did then the order must be held to be invalid as the requirements of that article had admittedly not been compli- ed with. ", "Under the English Common Law all servants of the held office during the pleasure of the and were liable to be dismissed at any time and without any reason being assigned for such dismissal. No action lay against the in respect of such dismissal, even though it were contrary to the express term of the contract of employment, for the theory was that the could not fetter its future executive action by entering into a contract in matters which concerned the welfare of the . A servant of the could not at Common Law sue the even for the arrears of his salary, and his claim could be only on the bounty of the . The established notion was that the implied condition between the and its servant was that the latter held his office during the pleasure of the , no matter whether it had been referred to when the engagement had been made or not and that public policy demanded this qualification. (See per Lord in v. The Admiralty(1). This rule was applied in full force in for India (2), where it was held that the sterling overseas pay of an Indian Civil Servant was not a debt which could be attached in satisfaction of an order for the payment of alimony. In the of Bihar v, (3), however, this Court held, for reasons stated in the judgment delivered by that the Indian Law has not adopted the rule of English Law on the subject in its entirety. Turning to our Statute Law, we find that in the Government of India Act, 1915 (5 & 6 Geo. V. Ch. 61)' as originally enacted, there was no reference to this doctrine of the English Common Law. By s. 45 of the Government of India Act, 1919 (9 & 10 Geo. V. Ch. 101) read with Part I of the second schedule to that Act several sections, including s. 96-B, were introduced into the Government of India Act, 1915 (hereinafter called the \" 1915 Act\"). The relevant portion of s. 96-B was as follows: ", "\" 96-B (1). Subject to the provisions of this Act and the rules made thereunder, every person in the civil service of the in India holds office during His Majesty's pleasure, and may be employed in any manner required by a proper authority within the scope of his duty, but no person in that service may be dismissed by any authority subordinate to that by which he was appointed and the Secretary of in Council may (except so far as he may provide by rules to the contrary) re-instate any person in that service who has been dismissed.\" ", "Sub-section (2) of that section empowered the Secretary of in to make rules for regulating the classification of the Civil Services in India, the method of recruitment, the conditions of service, pay and allowances and discipline and conduct and sub-section (4) declared that all service rules then in force had been duly made and confirmed the same. The point to be noted is that s. 96-B for the first time gave a statutory recognition and force to the English Common (1) (1926) S.C. 842. ", "(3) [1954] S.C.R. 786. ", "(2) L.R. (1943) P. 68. ", "837 ", "Law rule that the servants of the Crown held their Offices during the pleasure of the Crown and at the same time imposed one important qualification upon the exercise of the Crown's pleasure, namely, that a servant might not be dismissed by an authority sub- ordinate to that by which he had been appointed. ", "Section 96-B (1) was reproduced as sub-ss. (1) and (2) of s. 240 of the Government of India Act, 1935 (26 Geo. V. Ch.II), (hereinafter referred to as the 1935 Act) and a new sub- section was added to s. 240 as sub-s. (3). The relevant portions of s. 240 of the 1935 Act are set out below: \" 240 (1) Except as expressly provided by this Act, every person who is a member of a Civil service of the in India, or holds any civil post under the in India, holds office during His Majesty's pleasure. (2) No such person as aforesaid shall be dismissed from the service of His Majesty by any authority subordinate to that by which he was appointed. ", "(3) No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him; ", "Then followed a proviso which made sub-s. (3) inapplicable to certain persons and then came sub-s. (4) providing for compensation for premature termination% of employment in certain cases which it is not necessary to set out here. The rule making power given by s. 96-B (2) of the 1915 Act was reproduced in s. 241 of the 1935 Act. Section 276 of the 1935 Act, like s. 96-B (4) of the 1915 Act, continued in force all the rules made under the last mentioned- Act, while the existing laws were continued by s. 292. It should be noted that the opening words of s. 96-B (1), namely, ,,Subject to the provisions of this Act and the rules made thereunder \" were substituted by the words \" Except as expressly provided by this Act.\" The effect of this will be discussed hereafter. Subsection (1) adopted the English Common Law rule regarding the pleasure of the but imposed on it two qualifications by two separate sub-sections. Subsection (2) reproduced the qualification which had been imposed by s. 96-B (1), namely that a servant of the class therein mentioned must not be dismissed by an authority subordinate to that by which he had been appointed and sub-s. (3) introduced a still more important qualification on the exercise of the 's pleasure, namely, that no such servant must be dismissed or reduced in rank until he had been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Reduction in rank was not referred to in s. 96-B (1) but was for the first time added to dismissal in sub-s. (3). Then came our Constitution on January 26, 1950. Part XIV deals with \" Services under the and the s\". Chapter I contains seven sections grouped under the heading \" Services\". Section 240(1) of the 1935 Act has been substantially reproduced in Art. 310 (1) and sub-ss. (2) and (3) of s. 240 have become Art. 311(1) and (2 ), while s. 276 of the 1935 Act, which continued the existing rules in force, has been embodied in Art. 313. Article 310(1) and Art. 311 omitting the proviso to cl. (2) are as follows: \" 310 (1) Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the or of an all-India Service or holds any post connected with defence or any civil post under the , holds office during the pleasure of the President, and every person who is a member of a civil service of a or holds any civil post under a holds office during the pleasure of the Governor of the . ", "311 (1) No person who is a member of a civil service of the or an all-India service or a civil service of a or holds a civil post under the or a St-ate shall be dismissed or removed by an authority subordinate to that by which he was appointed. ", "(2) No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him: ", "povided ................................................ ", "839 ", "(3) If any question arises whether it is reasonably practicable to give any person an opportunity of showing cause under clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final.\" To summarise: As under s. 96-B(1) of the 1915 Act and s. 240(1) of the 1935 Act, the persons specified therein held office during the pleasure of the , so under Art. 310(1) they hold their office during the pleasure of the President or of the Governor, as the case may be. The opening words of Art. 310(1 ), namely, Except as expressly provided by this Constitution reproduce the opening words of s. 240(1) of the 1935 Act, substituting the word \" Constitution \" for the word \" Act \". The exceptions contemplated by the opening words of Art. 310(1) quite clearly refer, inter alia, to Arts. 124, 148, 218 and 324 which respectively provide expressly that the Judges, the Auditor-General, the Judges and the Chief Election Commissioner shall not be removed from his office except by an order of the President passed after an address by each House of , supported by the requisite majority therein specified, has been presented to him in the same session for such removal on the ground of proved misbehaviour or incapacity. These are clearly exceptions to the rule embodied in Art. 310(1 ), that public servants hold their office during the pleasure of the President or the Governor, as the case may be. Subject to these exceptions our Constitution, by Art. 310(1 ), has adopted the English Common Law rule that public servants hold office during the pleasure of the President or Governor, as the case may be and has, by Art. 31 1 , imposed two qualifications on the exercise of such pleasure. Though; the two qualifications are set out in a separate article, they quite clearly restrict the operation of the rule embodied in Art. 310(1). In other words the provisions of Art. 311 operate as a proviso to Art. 310(1). All existing laws have been continued by Art. 372 , some of which, e.g., the Code of Civil Procedure make, it possible for a public servant to enforce his claims against the . It has accordingly been held by this Court in the (supra) that the English Common Law rule regarding the holding of office by public servants only during the pleasure of the has not been adopted by us in its entirety and with all its rigorous implications. Passing on to Art. 311 we find that it gives a two fold protection to persons who come within the article, namely, (1) against dismissal or removal by an authority subordinate to that by which they were appointed and (2) against dismissal or removal or reduction in rank without giving them a reasonable opportunity of showing cause against the action proposed to be taken in regard to them. Incidentally it will be noted that the word removed \" has been added after the word \"dismissed\". in both cls. (1) and (2) of Art. 311. Upon Art. 311 two questions arise, namely, (a) who are entitled to the protection and (b) what are the ambit and scope of the protection ? ", "Re (a): Articles 310 and 311 are two of the articles which have been grouped under the heading \"Services\" in Chapter I of Part XIV which deals with the \"Services under the Union and the States\". It is well known that there are different species of services. In the absence of a contract to the contrary the terms of employment of persons in different services are governed by rules made by the appropriate authorities to which reference will hereafter be made. The strength of a service or a part of a services actioned as a separate unit is, in the Fundamental Rules, s. 111, ch. 11, r. 9(4), called the cadre. Each cadre consists of a certain number of posts. According to r. 9(22) of the Fundamental Rules, a permanent post means a post carrying a definite rate of pay sanctioned without limit of time. In each cadre there may be and often is a hierarchy of ranks. Due to rush of business or other exigencies some \"temporary posts\" are often created. A temporary post is defined in r. 9(30) to mean a post carrying a definite rate of pay sanctioned for a limited time. These temporary posts are very often outside the cadre and are usually for one year and are renewed from year to year, although some of them may be created for a certain specified period. The conditions of service of a servant appointed to a post, permanent or temporary, are regulated by the terms of the contract of employment, express or implied, and subject thereto, by the rules applicable to' the members of the particular service. ", "The appointment of a servant to a permanent post may be substantive or on probation or on an officiating basis. A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a \"lien\" on the post. This \"lien\" is defined in Fundamental Rule s. 111, ch. 11, r. 9(13) as the title of a servant to hold substantively a permanent post, including a tenure post, to which he has been appointed substantively. The cannot terminate his service unless it is entitled to do so (1) by virtue of a special term of the contract of employment, e.g., by giving the requisite notice provided by the contract or (2) by the rules governing the conditions of his service, e.g., on attainment of the age of superannuation prescribed by the rules, or on the fulfilment of the conditions for compulsory retirement or, subject to certain safeguards' on the abolition of the post or on being found guilty after a proper enquiry on notice to him, of misconduct negligence, inefficiency or any other disqualification' An appointment to a permanent post in service on probation means, as in the case of a person appointed by a private employer, that the servant so appointed is taken on trial. The period of probation may in some cases be for a fixed period, e.g., for six months or for one year or it may be expressed simply as \"on probation\" without any specification of any period. Such an employment on probation, under the ordinary law of master and servant, comes to an end if during or at the end of the probation the servant so appointed on trial is found unsuitable and his service is terminated by a notice. An appointment to officiate in a permanent post is usually made when the incumbent substantively holding that post is on leave or when the permanent post is vacant and no substantive appointment has yet been made to that post. Such an officiating appointment comes to an end on the return of the incumbent substantively holding the post from leave in the former case or on a substantive appointment being made to that permanent post in the latter case or on the service of a notice of termination as agreed upon or as may be reasonable under the ordinary law. It is, therefore, quite clear that appointment to a permanent post in a service, either on probation, or on an officiating basis, is, from the very nature of such employment, itself of a transitory character and, in the absence of any special contract or specific rule regulating the conditions of the service, the implied term of such appointment, under the ordinary law of master and servant, is that it is terminable at any time. In short, in the case of an appointment to a permanent post in a service on probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on proba- tion or on an officiating basis can do, if his service is terminated at any time. Likewise an appointment to a temporary post in a service may be substantive or on probation or on an officiating basis. Here also, in the absence of any special stipulation or any specific service rule, the servant so appointed acquires no fight to the post and his service can be terminated at any time except in one case, namely, when the appointment to a temporary post is for a definite period. In such a case the servant so appointed acquires a right to his tenure for that period which cannot be put an end to unless there is a special contract entitling the employer to do so on giving the requisite notice or, the person so appointed is, on enquiry held on due notice to the servant and after giving him a reasonable opportunity to defend himself, found guilty of misconduct, negligence, inefficiency or any other disqualification and is by way of punishment dismissed or removed from service or reduced in rank. The substantive appointment to a temporary post, under the rules, used to give the servant so appointed certain benefits regarding pay and leave, but was otherwise on the same footing as appointment to a temporary post on probation or on an officiating basis, that is to say, terminable by notice except where under the rules promulgated in 1949 to which reference Will hereafter be made, his service had ripened into what is called a quasi- permanent service. ", "The position may, therefore, be summarised as follows: In the absence of any special contract the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years' service or the post is abolished and his service cannot be terminated except by way Of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him. An appointment to a temporary post for a certain specified period also gives the servant so appointed a right to hold the post for the entire period of his tenure and his tenure cannot be put an end to during that period unless he is, by way of punishment, dismissed or removed from the service. Except in these two cases the appointment to a post, permanent or temporary, on probation or on an officiating basis or a substantive appointment to a temporary post gives to the servant so appointed no right to the Post and his srvice 'may be terminated unless his service had ripened into what is, in the service rules, called a quasi-permanent service. The question for our consideration is whether the protections of Art. 311 are available to each of these several categories of servants. A number of decisions bearing on the question of construction of Arts. 310 and 311 have been cited before us which indicate that there is some difference of opinion between the Judges of the different and in some cases amongst the Judges of the same . Thus it has been held in some cases that Arts. 310 and 311 do not make any distinction between servants who are employed in permanent posts and those who are employed in temporary posts. (1), 0. (2) v. The of Madhya Bharat (3), (4), (5) and v. Province of the Punjab(6). On the other hand it has been held in some cases that a servant cannot be deemed to be a member of a service unless he is permanently absorbed therein, nor can he be deemed to be a holder of such post unless he holds it permanently and that such a servant is not entitled to claim the benefit of Art. 311. See v. (7), (8), (9) and v. (10). The cases cited before us also indicate that the preponderance of view is that only a dismissal or removal or reduction in rank by way of penalty attracts the operation of Art. 311 (2 ), but that a termination of service brought about otherwise than by way of punishment, e.g., by the exercise of the right under the terms of employment or under the relevant rules regulating the conditions of service which form part of the terms of employment does not. (supra), (11); (12), v. (13), v. (15), v. The of Madhya Bharat (16), (17), v. The of Madhya Pradesh (18), v. Post Master General (19) and v. (\"). The cases, (I) A.I.R. (1951) All. 793.(2) A.I.R. (1957) Bom. 175. (3) A.I.R. (1956) M B. 1oo.(4) A.I.R. (1955) Pat.372. (5) A.I.R. (1957) Pat. 357(6) A.I.R. (1950) Lah. 59. (7) 1.1,.R. (1955) Nag. 803;A. I. R. (1956) Nag.(8) A.I.R. (1957)Punj. 42. ", "(9) A.I.R. (1957) Punj. 191.113.(10) A.I.R. (1957) Raj. 81. ", "(11) L.R. 58 Bom. 673; A.I.R. (1956) Bom. 455.(12) A.I.R. (1954) Cal. 383. ", "(13) (1955) 59 C.W.N. 859. (14) (1957) 611C.W.N. ", "815. (15) A.I.R. (1957) J. & K. xi.(16) A.I.R. (1956) M.B. ", "172. (17) A.I.R. (1957) Mys. 8. (18) Al.R. (1952) Nag. ", "288. (19) A.I.R. (1955) Pat. 381.(2o) A.I.R. (1955) Tr. Co. 12, however, do not lay down or clearly indicate any test for ascertaining whether in any particular case a termination of service is inflicted by way of penalty so as to amount to dismissal, removal or reduction in rank within the meaning of Art. 311 (2) or is brought about by the exercise of the right to terminate it arising out of the terms of employment agreed upon between the parties or contained in rules regulating the conditions of service subject to which the employment was made. Further a certain amount of confusion arises because of the indiscriminate use of the words \"temporary\", provisional \", \" officiating \" and \" on probation \". We, therefore, consider it right to examine and ascertain for ourselves the scope and effect of the relevant provisions of the Constitution. ", " Article 311 does not, in terms, say that the protections of that article extend only to persons who are permanent members of the services or who hold permanent civil posts. To limit the operation of the protective provisions of this article to these classes of persons will be to add qualifying words to the article which will be. contrary to sound principles 'of interpretation of a Constitution or a statute. In the next place, el. (2) of Art. 311 refers to \"such person as aforesaid\" and this reference takes us back to cl. (1) of that article which speaks of a \" person who is a member of a civil service of the or an all-India service or a civil service of a or holds a civil post under the or a \". These persons also come within Art. 3 10(1) which, besides them, also includes persons who are members of a defence service or who hold any post connected with defence. Article 310 also is not, in terms' confined to persons who are permanent members of the specified services or who hold permanent posts connected with the services therein mentioned. To hold that that article covers only those persons who are permanent members of the specified services or who hold posts connected with the services therein mentioned will be to say that persons, who are not permanent members of those services or who do not hold permanent posts therein, do not hold their respective offices during the pleasure of the President or the Governor, as the case may be-a proposition which obviously cannot stand scrutiny. The matter, however, does not rest here. Coming to Art. 31 1 , it is obvious that if that article is limited to persons who are permanent members of the services or who hold permanent civil posts, then the constitutional protection given by cls. (1) and (2) will not extend to persons who officiate in a permanent post or in a temporary post and consequently such persons will be liable to be dismissed or removed by an authority subordinate to that by which they were appointed or be liable to be dismissed, removed or reduced in rank without being given any opportunity to defend themselves. The latter classes of servants require the constitutional protections as much as the other classes do and there is nothing in the language of Art. 311 to indicate that the Constitution makers intended to make any distinction between the two classes. There is no apparent reason for such distinction. It is said that persons who are merely officiating in the posts cannot be said to \" hold \" the post, for they only perform the duties of those posts. The word \" hold \" is also used in Arts. 58 and 66 of the Constitution. There is no reason to think that our Constitution makers intended that the disqualification referred to in cl. (2) of the former and cl. (4) of the latter should extend only to persons who substantively held permanent posts and not to those who held temporary posts and that persons officiating in permanent or temporary posts would be eligible for election as President or Vice- President of India. There could be no rational basis for any such distinction. In our judgment, just as Art. 310 , in terms, makes no distinction between permanent and temporary members of the services or between persons holding permanent or temporary posts in the matter of their tenure being dependent upon the pleasure of the President or the Governor, so does Art. 311 , in our view, make no distinction between the two classes, both of which are, therefore, within its protections and the decisions holding the contrary view cannot be supported as correct,. Re: (b) :-Clause (1) of Art. 311 is quite explicit and hardly requires discussion, The scope and the ambi of that protection are that Government servants of the kinds referred to therein are entitled to the judgmen of the authority by which they were appointed or some authority superior to that authority and that the should not be dismissed or removed by a lesser authority in whose judgment they may not have the same faith. The underlying idea obviously is that a provision like this will ensure to them a certain amount of security of tenure. Clause (2) protects Government servant: against being dismissed or removed or reduced in rank without being given a reasonable opportunity of showing cause against the action proposed to be taken in regard to them. It will be noted that in cl. (1) the words \" dismissed \" and \" removed \" have been used while in cl. (2) the words \" dismissed \", \" removed \" and \" reduced in rank \" have been used. The two, protections are (1) against being dismissed or removed by an authority subordinate to that by which the appointment had been made and (2) against being dismissed, removed or reduced in rank without being heard. What, then, is the meaning of those expressions \" dismissed \", \" removed \" or \" reduced in rank\" ? It has been said in (supra) that these are technical words used in cases in which a person's services are terminated by way of punishment. Those expressions, it is urged, have been taken from the service rules, where they were used to denote the three major punishments and it is submitted that those expressions should be read and understood in the same sense and treated as words of art. This leads us to embark upon an examination of the service rules relating to punishments to which the Government servants can be subjected. Rule 418 of the Civil Service Regulations of 1902 (hereinafter called the 1902 Rules) provide, inter alia, that the removal of public servants from the service for misconduct, insolvency, inefficiency not due to age or failure to pass a prescribed examination entailed forfeiture of past services. Those 1902 Rules, however, did not Bay under what circumstances or in what manner and by which authority public servants could be removed. ", "In exercise of the powers conferred by s. 96-B(2) of ,he 1915 Act the Secretary of in Council framed the Civil Service (Governor's Provinces) Classification Rules (hereinafter referred to as the 1920 Classification Rules) which came into force in December, 1920 and were applicable to servants serving in the Governor's Provinces. Rule X of these 1920 Classification Rules laid down that a local might for good and sufficient reasons (1) censure, (2) reduce to a lower post, (3) withhold promotion from or (4) suspend from service, any officer of an all- India service, provided that no head of the department appointed with the approval of the Governor General in Council would be reduced to a lower post without the sanction of the Governor General in Council. Likewise r. XIII provided that, without prejudice to the provisions of any law for the time being in force, the local might for good and sufficient reasons (1) censure, (2) withhold promotion from, (3) reduce to a lower post, (4) suspend, (5) remove, or (6) dismiss any officer holding a post in a provincial or subordinate service or a special appointment. Rule XIV laid down the procedure in cases of dismissal, removal or reduction in the following terms: \" Rule XIV-Without prejudice to the provisions of the Public Servants Inquiries Act , 1850, in all cases in which the dismissal, removal or reduction of any officer is ordered, the order shall, except when it is based on facts or conclusions established at a judicial trial, or when the officer concerned has absconded with the accusation hanging over him, be preceded by a properly recorded departmental enquiry. At such an enquiry a definite charge in writing shall be framed in respect of each offence and explained to the accused, the evidence in support of it and any evidence which he may adduce in his defence shall be recorded in his presence and his defence shall be taken down in writing. Each of the charges framed shall be discussed and a finding shall be recorded on each charge. \" Thus we find that these 1920 Classification Rules enumerated the different kind-, of punishments that could be inflicted on the different classes of servants and elaborately prescribed the procedure which had to be followed before those punishments could be inflicted. The Secretary of in Council also promulgated, with effect from January 1, 1922, what are known and what will hereafter be referred to as the Fundamental Rules governing the conditions of service, leave, pay and pension of all servants whose pay was debitable to civil estimates in India and to any other class of servants in India to which the Secretary of in Council might by general or special order declare them to be applicable. Like r. 418 of the 1902 Rules, r. 52 of the Fundamental Rules provided that the pay and allowances of servants, who were dismissed or removed from service, would cease from the day of such dismissal or removal. Thus the penal consequences of loss of pay and allowances continued to follow dismissal or removal. On May 27, 1930, the Secretary of for India in Council, in exercise of the powers conferred by s. 96 B(2) of the of India Act, 1919, made the Civil Services (Classification, Control and Appeal) Rules, (hereinafter called the 1930 Classification Rules) which superseded the 1920 Classification Rules. The 1930 Classification Rules, by r. 3, applied to every person in the whole time civil employment of a in India (other than a person so employed only occasionally or sub- ject to discharge at less than one month's notice) except certain classes of persons therein specified which included, inter alia, railway servants. Under r. 14 the public services in India were classified under six heads, namely, (1) All-India Services, (2) Central Services Class I, (3) Central Services Class II, (4)Provincial Services, (5) Specialist Services and (6) the Subordinate Services. Under r. 15 read with sch. I the following were the all-India services:-(I) , (2) , (3) , (4) , (5) , (6) , (7) , (8) , (9) and (10) . Service was not included in the list. Rule 49, as originally framed, provided as follows: ", "\"The following penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the class (1) to (5) specified in rule 14, namely:-(i) Censure, (ii) Withholding of increments or promotion, including stoppage at an efficiency bar, (iii) Reduction to a lower post or time-scale, or to a lower stage in a time scale, (iv) Recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders, (v) Suspension, (vi) Removal from the civil service of the Crown which does not disqualify from future employment, (vii) Dismissal from , which, ordinarily disqualifies from future employment. ", "Explanation, The discharge- ", "(a) of a person appointed on probation, during the period of probation, (b) of a person appointed otherwise than under contract to hold a temporary appointment, on the expiration of the period of the appointment, (c) of a person engaged under contract, in accordance with the terms of -his contract, does not amount to removal or dismissal within the meaning of this rule.\" ", "The Explanation to r. 49 was amended on March 28, 1948, on February 28, 1950, and finally on January 28, 1955, when the Explanation was numbered as Explanation I and the words in cl. (ii) of r. 49, namely, \" including stoppage at an efficiency bar\" were deleted and Explanation II was added. So amended the Explanations read as follows: \" Explanation I-The termination of employment--(a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or ", "(b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or ", "(c) of a person engaged under a contract does not amount to removal or dismissal within the meaning of this rule or of rule 55. ", "Explanation II : Stopping a Government servant at an efficiency bar in the time scale of his pay on the ground of his unfitness to cross the bar does not amount to withholding of increments or promotion within the meaning of this rule. \" ", "Like r. XIV of the 1920 Classification Rules, r. 55 of the 1930 Classification Rules, as originally framed in 1930, provided that, without prejudice to the Public Servants Enquiries Act, 1850, no order of dismissal, removal or reduction should be passed on a member of a service (other than an order passed on facts which had led to his conviction in a criminal court or by a court martial) unless he had been informed in writing of the grounds on which it was proposed to take action and had been afforded an adequate opportunity of defending himself Detailed provisions were made as to the grounds on which it was proposed to take action being reduced to the form of a definite charge or charges and for the communication thereof to the officer together with a statement of the allegations on which each charge was based and further provisions were made as to the procedure relating to the filing of the defence, the right to cross-examine and to give evidence in person or to have such witnesses called as he might wish to examine in his defence. Thus in the 1930 Classification Rules, as in the 1920 Classification Rules, were enumerated the different kinds of punishments which could be inflicted on the Government servants of the class to which those rules were applicable and out of those varieties of punishments mentioned in r. 49, three of them, namely, dismissal, removal and reduction in rank, were treated as major punish- ments and some special procedural protection was prescribed in the interest of the Government servants. At the date of the commencement of the Constitution the railway servants were governed by a separate set of rules collected in the two volumes of the Indian Railway Establishment Code. The petitioner is a railway servant and as such is governed by the rules of the Indian Railway Code. Chapter XVII, which is in Volume I, regulated the conduct and discipline of the railway servants and the Railway Fundamental Rules collected in Volume 11 regulated their conditions of service, pay and deputation. These are similar to and are in pari materia with the 1930 Classification Rules. Rule 1702 of Chapter XVII prescribes eleven distinct penalties which may for good and sufficient reasons be imposed upon railway servants, namely, (1) censure, (2) withholding of the privilege of passes and/or privilege ticket order, (3) fines, including forfeiture or reduction of running allowances in the case of train and running staff, (4) withholding of increments or promotion including stoppage at an efficiency bar, (5) reduction to a lower post or time-scale or to a lower stage in a time scale, (6) recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders, (7) suspension, (8) removal from the service, (9) dismissal from the service, (10) withholding of the whole or part of Provident Fund and Gratuity Rules (Chapters XIII and XV) and (11) reducing or withholding the maximum pension admissible in accordance with the provisions of the rules governing the grant of pensions. There is a Note below this rule to the effect that the discharge (a) of a person appointed on probation, during the period of probation, (b) of a person engaged under contract for a specific period, on the expiration of such period in accordance with the terms of his contract, (c) of a person appointed in a temporary capacity otherwise than under a contract, in accordance with the general conditions of service applicable to temporary employment and of some other persons enumerated therein, do not amount to removal or dismissal within the meaning of r. 1702. Rule 1703 states that while dismissal from service disqualifies a railway servant from future employment, removal from service is not to be considered an absolute disqualification. Rule 1704 specifies the , authority competent to impose penalties. Rule 1706 enumerates the causes for which a railway servant may be dismissed from service, namely, (1) conviction by a criminal court or by a court martial, (2) serious misconduct, (3) neglect of duty resulting in or likely to result in loss to Government or to a Railway administration, or danger to the lives of persons using the railway, or (4) insolvency or habitual indebtedness, and (5) obtaining employment by the concealment of his antecedents, which would have prevented his employment in railway service had they been known before his appointment to the authority appointing him. Procedure for dismissal is set out in r. 1707. \"Removal from Service\" is dealt with by r. 1708 and the procedure for removal is regulated by r. 1709. \"Suspension\" is the subject matter of r. 1711 and the procedure for imposing the other penalties is contained in r. 1712. \"Reduction to lower post\" is governed by r. 1714 which enjoins that when a railway servant is reduced for inefficiency or misconduct to a lower post in timescale or to a lower grade or to a lower stage in a time-scale the authority ordering the reduction must state the period for which it will be effective and whether, on the expiry of that period, it will operate to postpone future increments or to affect the railway servant's seniority and, if so, to what extent. Rule 2310 provides that no pension is to be granted to an officer dismissed or removed for misconduct, insolvency or inefficiency although compassionate allowances may be granted in deserving cases. Thus the Indian Railway Establishment Code also, like the 1930 Classification Rules, provides for different punishments and the procedure to be followed for inflicting the same and the three graver punishments of dismissal, removal and reduction are dealt with separately, and special provisions are made regulating the procedure which must be followed before those graver forms of punishments can be inflicted. ", "In exercise of the powers conferred by sub-s. (2) of s. 241 of the 1935 Act, the Governor-General made certain rules called the Central Civil Service (Temporary Service) Rules, 1949 (hereinafter referred to as the 1949 Temporary Service Rules). These rules applied to all persons who held a civil post under and who were under the rulemaking control of the Governor-General, but who did not hold a lien on any post under or any Provincial Government, but they did not apply to several categories of persons, including the railway servants. By those rules some protection had been given even to persons who did not substantively hold permanent posts. Thus under r. 6 the services of those persons whose services had ripened into what was therein defined as quasi-permanent service could only be terminated in the same circumstances and in the same manner as those of Government servants in permanent service could be terminated or when the appointing authority certified that reduction had occurred in the number of posts available to Government servants -not in temporary service. Further protection was given by the two provisos to that rule. By r. 5, however, the employment of persons holding temporary service could be terminated at any time by a month's notice. ", "Just to complete the history of the service rules reference may be made to the all-India Service (Discipline and Appeal) Rules, 1955 which were promulgated by in September, 1955, after consultation with the State Governments. For our present purpose it is enough to say that rr. 49 and 55 of the 1930 Classification Rules were substantially reproduced in rr. 3 and 5 respectively of these 1955 Rules except that the Explanation to r. 49 has been elaborated and the results of the judicial decisions have been incorporated therein. In exercise of powers conferred by Art. 309 and Art. 148 (5) of the Constitution the President, on February 28, 1957, made the Central Civil Services (Classification, Control and Appeal) Rules 1957. Rule 13 of these Rules corresponds to r. 49 of the 1930 Classification Rules, and r. 3 of the 1955 Rules and r. 15 substantially reproduces r. 55 of the 1930 Classification Rules and r. 5 of the 1955 Rules. ", "The scheme of the Service Rules may now be broadly summarised as follows: They enumerated different punishments which, for good and sufficient reason, might be inflicted on servants and they prescribed special procedure which had to be followed before the three major punishments, of dismissal, removal or reduction in rank could be meted out to the servants. Thus rr. X and XIII of the 1920 Classification Rules prescribed several kinds of punishments to which the different classes of servants could be subjected and r. XIV of those rules laid down certain special procedure for cases in which the three major punishments of dismissal, removal or reduction of an officer were contemplated. Likewise r. 49 of the 1930 Classification Rules reproduced with some additions the punishments prescribed in rr. X and XIII and r. 55 of the 1930 Classification Rules provided similar procedural protection as had been prescribed by r. XIV of the 1920 Classification Rules before the punishments of dis- missal, removal or reduction in rank could be inflicted. The scheme of the rules applicable to the railway servants was similar in substance. Thus rr. 1702 to 1714 and 2310 of the Indian Railway Code substantially reproduce the provisions of rr. 49 and 55 of the 1930 Classification Rules. In short, the service rules, out of the several categories of punishments, selected the three graver punishments of dismissal, removal and reduction in rank and laid down special procedure for giving protection to the servants against the infliction of those three major punishments. ", "It will be recalled that the opening words of s. 96-B (1) of the 1915 Act were-\" Subject to the provisions of this Act and the Rules made thereunder \" and subs. (4) confirmed the service rules that were then in force. In spite of this it was held in for India (1) with reference to the rules made under s. 96-B of the 1915 Act that, while that section assured that the tenure of office, though at pleasure, would not be subject to capricious or arbitrary action but would be regulated by the rules, it gave no right to the appellant, enforceable by action, to hold his office in accordance with those rules. It (I) (1936) L.R. 64 I.A. 55. ", "856 ", "was held that s. 96-B of the 1915 Act and the rules made thereunder only made provision for the redress of grievances by administrative process. As if to reinforce the effect of that decision, the opening words quoted above were, in s. 240(1) of the 1935 Act, replaced by the words \" Except as expressly otherwise provided by this Act\". The position of the Government servant was, therefore, rather insecure, for his office being held during the pleasure of His Majesty under the 1915 Act as well as under the 1935 Act the rules could not over-ride or derogate from the statute and the protection of the rules could not be enforced by action so as to nullify the statute itself. The only protection that the Government servant had was that, by virtue of s. 96- B(1), they could not be dismissed by an authority subordinate to that by which they were appointed. The position, however, improved to some extent under the 1935 Act which, by s. 240(3), gave a further protection in addition to that provided in s. 240(2) which reproduced the protection of s. 96-B(1) of the 1915 Act. In other words the substance of the protection provided by r. 55 of the 1930 Classification Rules which required a special procedure to be followed before the three major punishments of dismissal, removal or reduction in rank out of the several punishments enumerated in r. 49 was bodily lifted, as it were, out of the Rules and embodied in the statute itself so as to give a statutory protection to the Government servants. These statutory protections have now become constitutional protections as a result of the reproduction of the provisions of s. 240 in Arts. 310 and 311 of our Constitution. ", "It follows from the above discussion that both at the date of the commencement of the 1935 Act and of our Constitution the words \" dismissed \", \" removed \" and \" reduced in rank \", as used in the service rules, were well understood as signifying or denoting the three major punishments which could be inflicted on Government servants. The protection given by the rules to the Government servants against dismissal, removal or reduction in rank, which could not be en. forced by action, was incorporated in sub-ss. (1) and (2) of s. 240 to give them a statutory protection by indicating a procedure which had to be followed before the punishments of dismissal, removal or reduction in rank could be imposed on them and which could be enforced in law. These protections have now been incorporated in Art. 311 of our Constitution. The effect of s. 240 of the 1935 Act reproduced in Arts. 310 and 311, as explained by this Court in (1), has been to impose a fetter on the right of the Government to inflict the several punishments therein mentioned. Thus under Art. 311(1) the punishments of dismissal, or removal cannot be inflicted by an authority subordinate to that by which the servant was appointed and under Art. 311(2) the punishments of dismissal, removal and reduction in rank cannot be meted out to the Government servant without giving him a reason. able opportunity to defend himself. The principle embodied in Art. 310(1) that the Government servants hold office during the pleasure of the President or the Governor, as the case may be, is qualified by the provisions of Art. 311 which give protection to the Government servants. The net result is that it is only in those cases where the Government intends to inflict those three forms of punishments that the Government servant must be given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. It follows, therefore, that if the termination of service if; sought to be brought about otherwise than by way of punishment, then the Government servant whose service is so terminated cannot claim the protection of Art. 311(2) and the decisions cited before us and referred to above, in so far as they lay down that principle, must be held to be rightly decided. The foregoing conclusion, however, does not solve the entire problem, for it has yet to be ascertained as to when an order for the termination of service is inflicted as and by way of punishment and when it is not. It has already been said that where a person is appointed substantively to a permanent post in (1) S.C.R. 1 I50- ", "858 ", "Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired and in the absence of a contract, express or implied, or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with Art. 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant's rights and brings about a premature end of his employment. Again where a person is appointed to a temporary post for a fixed term of say five years his service cannot, in the absence of a contract or a service rule permitting its premature termination be terminated before the expiry of that period unless he has been guilty of some misconduct, negligence, in. efficiency or other disqualifications and appropriate proceedings are taken under the rules read with Art. 311(2). The premature termination of the service of a servant so appointed will prima facie be a dismissal or removal from service by way of punishment and so within the purview of Art. 311(2). Further, take the case of a person who having been appointed temporarily to a post has been in continuous service for more than three years or has been certified by the appoint- ing authority as fit for employment in a quasipermanent capacity, such person, under r. 3 of the 1949 Temporary Service Rules, is to be deemed to be in quasi-permanent service which, under r. 6 of those Rules, can be terminated ", "(i) in the circumstances and in the manner in which the employment of a servant in a permanent service can be terminated or (ii) when the appointing authority certifies that a reduction has occurred in the number of posts available for servants not in permanent service. Thus when the service of a servant holding a post temporarily ripens into a quasi-permanent service as defined in the 1949 Temporary Service Rules, he acquires a right to the post although his appointment was initially temporary and, therefore, the termination of his employment otherwise than in accordance with r. 6 of those Rules will deprive him of his right to that post which he acquired under the rules and will prima facie be a punishment and regarded as a dismissal or removal from service so as to,. attract the application of Art. 311. Except in the three cases just mentioned a servant has no right to his post and the termination of service of a servant does not, except in those cases, amount to a dismissal or removal by way of punishment. Thus where a person is appointed to a permanent post in a service on probation, the termination of his service during or at the end of the period of probation will not ordinarily and by itself be a punishment, for the servant, so appointed, has no right to continue to hold such a post any more than the servant employed on probation by a private employer is entitled to do. Such a termination does not operate as a forfeiture of any right of the servant to hold the post, for he has no such right and obviously cannot be a dismissal, removal or reduction in rank by way of punishment. This aspect of the matter is recognised in the Explanation to r. 49 of the 1930 Classification Rules which correspond to the Note to r. 1702 of the Indian Railway Code and r. 3 of the 1955 Rules and r. 13 of the 1957 Rules, for all those rules expressly say that the termination of such an appointment does not amount to the punishment of dismissal or removal within the meaning of those rules. Likewise if the servant is appointed to officiate in a permanent post or to hold a temporary post other than one for a fixed term, whether substantively or_on probation or on an officiating basis, under the general law, the implied term of his employment is that his service may be terminated on reasonable notice and the termination of the service of such a servant will not per se amount to dismissal or removal from service. This principle also has been recognised by the Explanations to r. 49 of the 1930 Classification Rules correspoding to the Note to r. 1702 of the Indian Railway Code and r. 5 of the 1949 Rules and r. 3 of the 1955 Rules and r. 13 of the 1957 Rules. Shortly -put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment, express or implied, or under ,,the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto. But if the servant has no right to the post as where be is appointed to a post, permanent or temporary either on probation or on an officiating basis and whose temporary service has not ripened into a quasi- permanent service as defined in the Temporary Service Rules, the termination of his employment does not deprive him of any right and cannot, therefore, by itself be a punishment. One test for determining whether the termination of the service of a servant is by way of punishment is to ascertain whether the servant, but for such termination, had the right to hold the post. If he had a right to the post as in the three cases hereinbefore mentioned, the termination of his service will by itself be a punishment and he will be entitled to the protection of Art. 311. In other words and broadly speaking, Art. 311 (2 ), will apply to those cases where the servant, had he been employed by a private employer, will be entitled to maintain an action for wrongful dismissal, removal or reduction in rank. To put it in another way, if the has, by contract, express or implied, or, under the rules, the right to terminate the employment at any time, then such termination in the manner provided by the contract or the rules is, prima facie and per se, not a punishment and does not attract the provisions of Art. 311. ", "It does not, however, follow that, except in the three cases mentioned above,, in all other cases, termination of service of a Government servant who has no right to his post, e.g., where he was appointed to a post, temporary or permanent, either on probation or on an officiating basis and had not acquired a quasi. ", "861 ", "permanent status, the termination cannot, in any circumstance, be a, dismissal or removal from service by way of punishment. Cases may arise where the may find a servant unsuitable for the post on acconut of misconduct, negligence, inefficiency or, other disqualification. If such a servant was appointed to a post, permanent or temporary, either on probation or on an officiating basis, then the very transitory character of the employment implies that the employment was terminable at any time on reasonable notice given by the . Again if the servant was appointed to a post, permanent or temporary, on the express condition or term that the employment would be terminable on say a month's notice as in the case of (1), then the might at any time serve the requisite notice. In both cases the may proceed to take action against the servant in exercise of its powers under the terms of the contract of employment, express or implied, or under the rules regulating the conditions of service, if any be applicable, and ordinarily in such a situation the will take this course. But the may take the view that a simple termination of service is not enough and that the conduct of the servant has been such that he deserves a punishment entailing penal consequences. In such a case the may choose to proceed against the servant on the basis of his misconduct, negligence, inefficiency or the like and inflict on him the punishment of dismissal, removal or reduction carrying with it the penal consequences. In such a case the servant will be entitled to the protection of Art. 311(2). The position may, therefore, be summed up as follows: Any and every termination of service is not a dismissal, removal or reduction in rank. A termination of service brought about by the exercise of a con'. tractual right is not per se dismissal or removal, as has been held by this Court in (supra). Likewise the termination of service by compulsory retirement in terms of a (1) S.C.R. 655. ", "862 ", "specific rule regulating the conditions of service is not tantamount to the infliction of a punishment and does not attract Art.; 311(2), as has also been held by this Court in ). ,In either of the two abovementioned cases the termination of the service did not carry with it the penal consequences of loss of pay, or allowances under r. 52 of the Fundamental Rules. It is true that the misconduct, negligence, inefficiency or other disqualification may be the motive or the inducing factor which influences the to take action under the terms of the contract of employment or the specific service rule, nevertheless, if a right exists, under the contract or the rules, to terminate the service the motive, operating on the mind of the is, as has said in (supra), wholly irrelevant. In short, if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so Art. 3 1 1 is not attracted. But even if the has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank, the may, nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Art. 311 must be complied with. As already stated if the servant has got a right to continue in the post, then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. A termination of the service of such a servant on such grounds must be a punishment and, therefore, a dismissal or removal within Art. 311 , for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances. It puts an indelible stigma on the officer (1) I S.C.R. 26. ", "863 ", "affecting his future career. A reduction in rank likewise may be by way of punishment or it may be an innocuous thing.' If the servant has a right to a particular rank, then the very reduction from that rank will operate as a penalty, for he will then lose the emoluments and privileges of that rank. If, however, he has no right to the particular rank, his reduction from an officiating higher rank to his sub-: stantive lower rank will not ordinarily be a punishment. But the mere fact that the servant has no title to the post or the rank and the has, by contract, express or implied, or under the rules, the right to reduce him to a lower post does not mean that an order of reduction of a servant to a lower post or rank cannot in any circumstances be a Punishment. The real test for determining whether the reduction in such cases is or is not by way of punishment is to find out if the order for the reduction also visits the servant with any penal consequences. Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or, the stoppage or postponement of his future chances of promotion, then that circumstance may indicate that although in form the bad purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and reality the has terminated the employment as and by way of penalty. The use of the expression \" terminate \" or \" discharge \" is not con, elusive. In spite of the use of such innocuous expressions, the court has to apply the two tests mentioned above, namely, (1) whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to ? If the case satisfies either of the two tests then it must be held that the servant has been punished and the termination of his service must be taken as a dismissal or removal from service or the reversion to his substantive rank must be regarded as a reduction in rank and if the requirements of the rules and Art.311 , which give protection to servant have not been complied with, the termination of the service or the reduction in rank must be held to be wrongful and in violation of the constitutional right of the servant. Applying the principles discussed above it is quite clear that the petitioner before us was appointed to the higher post on an officiating basis, that is to say, he was appointed to officiate in that post which, according to Indian Railway Code, r. 2003 (19) corresponding to F.R. 9 (19) means, that he was appointed only to perform the duties of that post. He had no right to continue in that post and under the general law the implied term of such appointment was that it was terminable at any time on reasonable notice by the and, therefore, his reduction did not operate as a forfeiture of any right and could not be described as reduction in rank by way of punishment. Nor did this reduction under Note 1 to r. 1702 amount to his dismissal or removal. Further it is quite clear from the orders passed by the General Manager that it did not entail the forfeiture of his chances of future promotion or affect his seniority in his substantive post. In these circumstances there is no escape from the conclusion that the petitioner was not reduced in rank by way of punishment and, therefore, the provisions of Art. 311 (2) do not come into play at all. In this view of the matter the petitioner cannot complain that the requirements of Art. 311 (2) were not complied with, for those requirements never applied to him. The result, therefore, is that we uphold the decision of , although on somewhat different grounds. This appeal must, therefore, be dismissed with costs. ", "BosE. J.-With great respect I cannot agree that Art. 311 is not attracted in this case. ", "I agree with my Lord that Art. 311 applies to all classes of servants mentioned in it and that it makes no difference whether they are permanent, quasi-permanent, officiating, temporary or on probation. There may be good reasons for having all these shades of difference in the civil services and among those who bold civil posts in the Union and the States but I am clear that the protections afforded by Art. 311 and other parts of the Constitution cannot be nullified or whittled down by clever phrasing and subtle ingenuity. I am also clear that \" Except as expressly provided by this Constitu- tion, every person etc............ holds office during the pleasure of the President............... \" These words are absolute and leave no room for inference or deduction. The \" pleasure \" can only be controlled by some express provision in the Constitution. One of them is in Art. 310(2 ), another in Art. 31 1. There are also others, such as Arts. 124(4) and 217(1)(b), but it is not necessary to enumerate them because I am only concerned with the broad principle here. ", "I also agree with my Lord that the words, dismissal, removal and reduction in rank, used in Art. 311 have special meaning. I would not have said this had it not been for ambiguities that arise otherwise. We were faced with that in (1), where we had to construe the words \" dismissal \" and \" removal \" and to determine whether they were merely tautologous or bad been introduced to emphasise a difference in meaning. According to the dictionary, they mean the same thing or, at any rate, have subtle shades of distinction that are meaningless in the context in which they are used. It was therefore necessary to look to the surrounding circumstances and determine whether they had acquired special technical significance at the date of the Constitution. For that purpose, it was necessary to examine the history of the conditions of service under the and look to the various statutes and rules then in force. Except for that, I do not think it would have been proper to look at the rules for I cannot agree that the Constitution can be construed by reference to Acts of the Legislature and rules framed by some lesser authority and, in particular, to rules made and Acts passed after the Constitution. (1) S. C. R. 655. ", "866 ", "I agree with my Lord that Art. 311 applies when penal consequences ensue from the dismissal or removal or reduction in rank, though I prefer to phrase this in wider terms and say that the Article is attracted whenever a \" right \" is infringed in the way in which I shall proceed to explain, for a right can be infringed in that sort of way even when no penal consequences follow. ", "I have used the word \" right\" but must hasten to explain that I use it in a special sense. The \" right \" need not necessarily be justiciable nor need it necessarily amount to a contract but, broadly speaking, it must be the sort of \"right \" which, even when not enforceable in the courts, would form a good foundation for a \"Petition of Right\" in England. ", "It is as difficult to speak of \"rights \" (except those expressly conferred by the Constitution) when one holds at \" pleasure \" as to speak of \"contracts.\" But they are convenient expressions to convey a particular thought, provided the limitations imposed by the context are not forgotten. ", "The word \" contract\" is used in Art. 310(2 ), but as these \" contracts \" are as much subject to \"pleasure\" as any other engagement of service (except as otherwise provided by the Constitution) they are not contracts in the usual sense of the term; nor are the conditions of service that apply to Government servants who do not serve under a special \"contract\". A contract that can be determined at will despite an express condition to the contrary (and that is what Art. 310(2) contemplates) is not a contract as usually understood; nor are conditions of service that can be unilaterally varied without the consent of the other it contracting party \", and even behind his back. But they are convenient terms to convey a thought and that is the sense in which \" contract \" is used in Art. 310(2) and the sense in which it has been used in some rulings. Now these \" conditions of service \" (and of course special \" contracts \" as well) confer \" rights \" and though the conditions can be varied unilaterally because of the \" pleasure \", they cannot be ignored so long as they are in force ; and if a dismissal, or removal, or reduction in rank infringes one of these rights \", then, in my judgment, Art. 311 is attracted. ", "I said in case (1), that the President and are as free to enter into special contracts as any other person provided they are consistent with the Constitution. That also applies to conditions of service where there are no special \" contracts \". Anything else would be anomalous especially as anyone who serves under the or under a serves at \" pleasure \". It is, therefore, possible for the President to make \" contracts \" that are terminable in a particular way or at a particular time or on the happening of a given event, provided, they do not offend the Constitution ; and when they are so determined, they can, broadly speaking, be called contractual terminations\". ", "Two such cases have already been before this court. In case (supra), it was a special \" contract \" terminable with a month's notice on either side. (2) it was a condition of service that permitted compulsory retirement at a particular age. Any other variation that does not offend the Constitution would be equally permissible. These conditions confer a \" right\" on one side and correspondingly reduce the ambit of the \" rights \" conferred by the \" contract \" on the other. Therefore, when exercises one of their \" rights \" there is no infringement of the other party's \" rights \" because to that extent he has none. It follows that when, in a given case, has an option to adopt one of two courses as, for example, to \" dismiss \" or \" reduce \" for misconduct and at the same time to terminate or alter the service under a term of the \" contract \" or because of a condition of the service, then, if it chooses to act under the right conferred by the \" contract \", Art. 311 is not attracted even though misconduct is also present and even though that is the real reason for the action taken. But, if chooses to adopt such a course, it must be careful to see that no evil consequences (1) S.C.R. 655. (2) 1 S.C.R. 26. ", "110 ", "868 ", "will ensue over and beyond those that would ordinarily follow from a normal termination or alteration when there is no misconduct or blame on the part of the person affected. But I repeat that any such condition must be, consistent with the Constitution and that no clever artifice or juggling with words can destroy or whittle down the guarantees of Art. 311 , or any other Article for that matter. ", "To my mind, the test must always be whether evil consequences over and above those that would ensue from a \" contractual termination \" are likely to follow. Were it otherwise, the blameless man against whom no fault can be found would be at a disadvantage. It would be anomalous to bold that a man who has been guilty of misconduct should have greater protection than a blameless individual. But any man who is visited with evil consequences that would not ensue in the case of another similarly placed, but free from blame, can, in my opinion, claim the protection of Art.311. Now what happened in this case? The appellant was appointed to an service of the Union in August, 1924. He has not been removed or dismissed from service, so he is still a member of an service. ", "On July 2, 1951, he was appointed Assistant Superintendent of Railway Telegraphs in class II service. On August 19, 1953, he was relieved of this appointment and reverted to his substantive post in a class III appointment. There can be no doubt that this was a reduction in rank. The only question is whether it was so within the meaning of Art. 311 for, as I said earlier, these words have special meaning and do not apply in every case where a person is removed from a higher to a lower post. ", "The argument on behalf of is that the higher post to which the appellant was appointed was temporary and that the appellant was only officiating in it; and rules were cited to show that had the right, under those rules, to shift the appellant from a higher to a lower post. I need not consider this argument because we are all agreed that Art. 311 applies even when the appointment is temporary, or officiating and, on the view I take, it does not matter whether had what I might call a \" contractual right \" to reduce because even if it had, it exercised it in a way that evoked evil consequences over and above those that would have ensued in a similar case where there was neither misconduct nor blame. ", "Our attention was directed to remarks in the appellant's confidential reports and to various administrative notings on his files. All these are, in my opinion, irrelevant. We are only concerned with the operative order made by the proper authority competent to make it and with the consequences that ensue from that order. ", "In this case, the order of reversion dated August 19, 1953, is non-committal. It merely says that is appointed to officiate in the appellant's place and that on relief the appellant will revert to a lower rank. That in itself might be harmless but the order does not stand alone and though the various administrative notings are irrelevant, the General Manager's remarks on them, which form the real foundation of the order, cannot be ignored because the sting lies there and the evil con- sequences of which I speak flow from them. They are really part and parcel of the order and the two must be read together. I say this because, quite obviously, the constitutional guarantees of Art. 311 cannot be evaded by passing a non-committal order that is innocuous and at the same time making another order in secret that would have attracted Art. 311 had it been made openly. I am not suggesting that that was done here or that the object was to evade Art. 311 by a secret manoeuvre. All I am pointing out is that the consequences of Art. 311 cannot be evaded by cleverly splitting up an order into two parts. Now what were those remarks? They were endorsed on the appellant's file on June 11, 1953. The General Manager said: ", "\" I am disappointed to read these reports. He should revert as a subordinate till he makes good the ,short-comings noticed in this chance of. his as an officer.\" ", "What does that mean ? In plain English it means that ,he is not to be promoted to a like post until some competent officer chooses to think he has made good his previous short-comings. That is an evil consequence over and above that which would ensue in the case of what I may call again a \" contractual termination \" of the engagement in. the higher post. ", "It was virtually admitted in the arguments before us that a man who is reduced in rank for misconduct for a particular period, say, one year or two years, is being \" punished \" and therefore Art. 311 will apply. What difference is there if the reduction is for an unspecified period instead of for one that is certain ? In both cases, the possibility of promotion is stayed and whether that is a \" punishment\" or a \"penalty\" it is, in my judgment, an evil consequence over and above that which would ensue in a case where the man \"reduced\" is faultless. ", "In view of the almost frivolous resort that is sometimes made to Art. 311 1 want to guard against too wide an interpretation of what I have said. I do not mean to imply that the reasons that lead to an order of reduction are relevant when there is a \"contractual right\" to act in a particular way; nor do I mean to imply that a mere recording of disappointment or dissatisfaction would attract Art. 311 even if it is followed by a contractual termination of the engagement. All that is not of the essence. The real test is whether additional evil consequences are implicit in the order. ", "It is here that I venture to dissent, with the very greatest respect, from my Lord's construction of Art. 311. If I read his judgment aright, I gather that his view, and that of my learned brothers, is that Art. 311 is confined to the penalties prescribed by the various rules and that one must look to all the relevant rules to determine whether the order is intended to operate as a penalty or not. With deep respect, I do not think that the gist of the matter is either the form of the action or the procedure followed; nor do I think it is relevant to determine what operated in the mind of a particular officer. The real hurt does not lie in any of those things but in the consequences that follow and, in my judgment, the protections of Art. 311 are not against harsh words but against hard blows. It is the effect of the order alone that matters ; and in my judgment, Art. 311 applies whenever any substantial evil follows over and above a purely \"contractual one\". I do not think the article can be evaded by saying in a set of rules that a particular consequence is not a punishment or that a particular kind of action is not intended to operate as a penalty. In my judg- ment, it does not matter whether the evil consequences are one of the \"penalties\" prescribed by the rules or not. The real test is, do they in fact ensue as a consequence of the order made ? ", "I would allow the appeal with costs. ", "BY THE COURT.-In accordance with the opinion of the majority, the appeal is dismissed with costs. Appeal dismissed."], "relevant_candidates": ["0000016718", "0000018848", "0000070419", "0000113785", "0000480602", "0000513155", "0000569036", "0000617715", "0000717821", "0000885678", "0001074365", "0001262738", "0001466885", "0001640660", "0001684235", "0001700381", "0001703576", "0165172619"]} {"id": "0001284785", "text": ["JUDGMENT , C.J. ", "1. In this case the plaintiff, as assignee, claims Rs. 2,000, which is alleged to have been due by way of commission to who has died since the suit was instituted. ", "2. The defendant being the owner of certain oil mills was anxious to sell them. They were mortgaged to a Bank for Rs. 35,000, and at the end of May or the beginning of June 1911, the mills were advertised for sale in . On the 13th June 1911, the defendant gave a letter in the following terms and signed by the defendant, I agree to allow you to sell my above oil mill at Rs. 40,000 only. You will get brokerage 5 per cent, on the same when the mill will be sold through you. This condition to be in force till a fortnight (15 days) from date.\" Then there were certain words which, it was agreed between the parties, were added at the time that letter was written, in Guzrati, and the correct translation was in these terms, On the sale-proceeds being received in hand, brokerage will be paid.\" ", "3. The first question is as to the meaning of the letter. To my mind, the meaning is pretty plain. In order to earn his brokerage was to introduce a purchaser who Would be willing to give Rs. 40,000, He had the opportunity of introducing such a purchaser and thus qualifying for his brokerage, for 15 days only. I do not think that the. letter means that the sale had to be completed within 15 days, but it was essential for , if he was to earn his commission, that he was to introduce within 15 days a person who would be ready and willing to purchase for Rs. 40,000. In other words, if he did so introduce a purchaser, the mere fact that the purchase was not completed until September would not deprive the broker of his commission. ", "4. Now, there is no question as to the law which governs such a matter as this. In my judgment, it is correctly stated by Mr. Justice at the bottom of page 75 of the paper-book. There he says, quoting from Lord 's Laws of England, \"In order to entitle the agent to receive hisremuneration, he must have carried out that which he bargained to do, or at any rate must have substantially done so, and all conditions imposed by the contract must have been fulfilled.\" ", "5. The main question, therefore, in this case is whether substantially carried out what he had bargained to do. This is a question of fact mainly dependent upon the evidence of the witnesses. The case was evidently tried with great care, and the learned Judge reserved his judgment. After due consideration he has accepted the evidence of , the purchaser, and rejected that of the defendant : and, in a case such as this, where the matter depends to a large extent upon the verbal evidence of the witnesses, in my judgment, this Court ought not to interfere with the decision of the learned Judge save on very clear grounds; in other words, unless it is clear that a miscarriage of justice has taken place. The Judge who tried the case has had the advantage, which we have not had, of seeing and hearing the witnesses, an advantage which, in my experience, it is almost impossible to overestimate. In this case I am not prepared to say that the learned Judge has decided wrongly; on the contrary, I think there is sufficient evidence to justify the decision at which he arrived. On the material points he has accepted the evidence of and rejected that of the defendant; and, in passing, I may say that the comments made upon the evidence of the defendant by the learned Counsel for the plaintiff were not without justification. 's evidence was to the effect that it was who introduced him to the defendant, and his evidence on one point is very significant; he says he did not want to pay more than Rs. 35,000, but he was persuaded by to offer Rs. 40,000, which was the price eventually agreed upon. Some of the passages in his evidence are at pages 36 and 37 of the paper-book, as for instance, where he says in cross-examination. ", "Q. \"Do you say it was Judah who introduced you to Lallji Mahomed?\" ", "A. \"Yes, that is true.\" ", "Q. \"You wanted to pay Rs. 35,000 not 40,000.\" ", "A. \"Yes, that is true, I first offered Rs. 35,000 and used to come and see me often and he got me into this scrape.\" Then he is asked what is the scrape. ", "\"A. What could I do, I did not. I am telling you the truth, it was who introduced me to the defendant; it was through whom everything was settled in respect of this matter, and it was who got me into this trouble.\" \"The trouble is this: I was made to agree to pay Rs. 40,000 for the mill, it was not worth Rs. 13,000\" * * * I did not want to buy it, but persuaded me to take it. He introduced me to the defendant, pressed me to take it, and at last got me into this trouble. ", "6. That being so, the plaintiff's case is proved on one of the material points, namely, that it was through the instrumentality of that the purchase price, Rs. 40,000, was obtained. But it is said that there is nothing to show that introduced the purchaser and performed his part of the contract within the specified time, 15 days. In my judgment if 's evidence is accepted, as it was by the learned Judge, that it was through that he was persuaded to offer Rs. 40,000, there is evidence that this must have been done within the time limit, because we find that on the 26th June, 13 days from the date of the broker's letter, wrote to the defendant in the following terms: 'As per our conversation with your Mr. we intend to purchase the above mills together with the land connected with it at a cost price of Rs. 35,000 on the following condition.\" Then he set out the condition. The letter closed as \"The alternative arrangement for payment is as follows : Rs. 10,000 in cash at the time of sale. Rs. 30,000 to be paid after one year,\" containing an offer, though it was an alternative offer, of Rs. 40,000 which, he said, he would never have made but for the instrumentality of . He must have seen the defendant that day, and such letter contains an offer of Rs. 40,000. It is true that the payment of part was to be deferred for one' year, but that offer was the one which with a slight variation of the terms was eventually accepted in August. Consequently, 's evidence having been accepted by the learned Judge, the performance of contract by was within the time. ", "7. I am aware that the letters in the case provide matter of comment on 's evidence, as, for instance, the letter of the 25th of June refers to his having seen the advertisement in . This is a legitimate comment, but it is not conclusive that did not introduce the purchaser. The matter had been advertised and it was quite possible that it was who brought the advertisement to the attention of the purchaser in the first instance. Again, the receipt for Rs. 200 where the payment is stated to be \"brokerage\" is a legitimate subject of comment, but I think the learned Judge's remarks on that transaction are not unreasonable, and, in any event, as between vendor and purchaser, the use of the word brokerage\" is quite unsuitable, whatever the nature of the transaction was. The main reason, however, which weighs with me is that the learned Judge has had to deal with conflicting verbal evidence on a question of fact; and after seeing and hearing the witnesses he has come to the conclusion that the truth lies on the side of and not on the side of the defendant: and, in such a case, in my judgment, this Court should not interfere, unless it is clear that he has come to a wrong conclusion. This I am not prepared to say. ", "8. A further point has been raised, namely, that the plaintiff in any event cannot recover more than the commission on the amount actually received by the defendant in cash. In my judgment, this is not correct. The brokerage was to be paid when the sale-proceeds\" were received. The purchase was completed on the 27th of September 1911, when the purchaser paid Rs. 10,000 in cash and gave hundis for Rs. 30,000. I agree with the learned Judge that the words in added to the letter of the 13th June 1911 do not mean that the commission was only to be payable if and when the whole Rs. 40,000 were received in cash; and, if the defendant chose to agree with the purchaser that the 'sale-proceeds\" should be partly cash and partly hundis, I do not think that can affect the plaintiff's right to commission. ", "9. In my judgment this appeal should fee, dismissed. ", ", ", "10. The plaintiffs as the assignees of one sue to recover commission alleged to be due to him under a written agreement dated 13th June 1911 for having effected through his agency the sale of certain oil mills. It must be shown that the conditions of the contract have been complied with. The onus of proving this is on the plaintiffs. This is of importance in the present case, for in regard to the particular question on which I mainly rest my judgment, viz.., whether it has been shown that obtained the purchaser within 15 days of and in terms of the agreement, it has been argued by Mr. for the respondent that this was not at issue in the lower Court. There is no finding on this particular point. It was, however, not necessary to put this specifically in issue, since the onus of proving all facts necessary to establish the claim was on the plaintiffs and the defendant put in issue the allegation that the purchase was effected by in terms of the agreement, according to the conditions of which alone he was entitled to a commission. ", "11. Several questions arise upon the construction of the agreement. It has been argued for the respondent that it is sufficient if a purchaser was secured within 15 days even if the actual purchase was completed later. This the appellant denies, contending that commission was payable only in the event of the transaction being completed (which it was not) within 15 days : and nextly that brokerage was only payable on the sale-proceeds being received in cash (which was not the case) within this period. ", "12. The appellant's contention is not without force on both these grounds, but it is not necessary to go into this matter for whatever be the true construction of the document on these points, it is clear and is indeed conceded that whenever or in what way the sale was concluded the purchaser at such sale must have been secured by the broker within 15 days of the agreement. Now the agreement was dated the 13th June 1911 and admittedly the first proved date at which vendor and purchaser were in communication was the 25th June, when 12 days under the agreement had already run by. It must be shown then that within the remaining 3 days found the purchaser. Has this been shown? In cross-examination the purchaser was asked whether his letter of the 25th June was written before or after his introduction to the defendant and whether asked him to write to the defendant or not. He was again asked about this matter in re-examination and he replied that he did not remember the date nor even the month when spoke to him about this letter and that he could not say whether it was before or after this letter that spoke to him. Had it been the fact that it was due to 's intervention that the first letter was written, it does not seem to me possible that the witness could have forgotten it. His answer must have been in that case that he must have seen first, for before seeing him he had known nothing of the defendant or of his property. He will not commit himself to this and, I think, for the reason that he had not then seen but had learnt about the property through an advertisement in the . This is indicated by the words in the letter of the 25th, \"I see in the Exchange that you are going to sell.\" The purchaser also in his evidence says, \"I saw the Exchange and then I wrote that letter,\" not that he had seen meanwhile or at all. Though the omission of 's name from the letter may not be conclusive, it is certainly evidence against the plaintiffs for a reference to the broker, through whom it is suggested that the purchaser came to know of the property, might have been expected. There is no specific evidence that secured the purchaser between the 26th and 28th or the conclusion of the period allowed to him. There is some general evidence that he introduced the purchaser, which in any case is scarcely accurate if the first communication of the 25th to which I have referred was without his intervention. The evidence, however, is not such as I can accept. Doubtless, in a case of this kind great weight must be attached to the judgement of the learned Judge who heard the case; but, in the present instance, we have no finding on the specific point and the uncorroborated evidence of the purchaser on which the learned Judge has relied is, upon the most favourable view, consistent with the fact of work done after the limited period and is, in my opinion, in conflict with and unsupported by the documentary evidence in the case and the inferences to be derived there from. As stated the first letter of the 25th indicates that it was the advertisement which first put the parties in communication. There is no mention of as broker in any of the letters until we get to the letter of 15th November 1911, which is of doubtful admissibility against the appellant. But on the merits the letter comes too late to be of value and is open to the suspicion that evidence was then being made for the claim by , which followed it in January. ", "13. It is remarkable also that there is no letter or other document by the broker which establishes his claim. Had he earned his commission in terms of the agreement, I think he would have been careful to put it on record. The Solicitor Mr. , who acted in the sale as attorney for the vendor, states that he never heard that was the broker in the transaction. The purchaser also in his evidence says he never mentioned the matter to any one. Finally, there is evidence that the purchaser took a commission of 1/2 per cent, on the entire sale-proceeds of Its. 40,000 on the ground that there had been no broker in the sale. He further granted a receipt for the same, on which express reference is made to \"amount of brokerage.\" The purchaser knows some English and though asked to give an explanation of this circumstance was unable to do so. Mr. Justice has held that this was a rebate, an explanation which the witness himself has not ventured to give. But, assuming that it was, the point is that it was allowed because no broker had been employed. If so, then this directly contradicts the purchaser witness when he says that was to his knowledge the broker. Nor is it likely that the defendant would have agreed to make a further payment for '\"brokerage\" if he was already indebted for considerable brokerage to . For these reasons, I would allow this appeal. It is possible that what may have happened is that the defendant advertised his property and then coming in this way to know of it got the agreement of agency from the defendant. After that, and independently of , the purchaser learnt from the that the property was for sale and entered into communication with the vendor. , who may have heard of this, may, sometime between June and August (for it is to be observed that the sale was not concluded till the latter date), have pressed the purchaser to buy in the hopes of putting forward a claim for commission. But this would not be sufficient. It is, however, not necessary for me to hold anything more than that the plaintiffs have not established that earned his commission within the terms of the agreement and I would, therefore, decree this appeal with costs and dismiss this suit with costs, As regards the question whether we should interfere in appeal with questions of fact, I will only say this, that if after argument the Court has a conviction that the judgment under appeal is erroneous it should not be affirmed, and this is not the less so because the judgment raised a question of fact. The mode in which the conviction is brought about in matters of law and fact is a question into which I do not enter, it being sufficient in the present case to say that, in my opinion, the appellant has shown us circumstances under which the judgment under appeal should be reversed. ", ", J. ", "14. This is an appeal, by the defendant in an action by an agent against his principal for recovery of commission. The defendant employed the plaintiff to sell his oil mill; the agreement was made on the 13th June 1911 and was embodied in a letter in the following terms: I agree to allow you to sell my above oil mill at Rs. 40,000 only; you will get brokerage 5 per cent, on the same, when the mill will be sold through you; this condition in force till fortnight (15 days) from this date.\" There was a postscript to the effect that on the sale-proceeds being received in hand brokerage will be paid.\" On the 25th June 1911 one Bhatuknath Boodhnath wrote to the defendant: ' I see in that you (are) going to sell your oil mill at Narikeldanga. I went thrice to your office, but unfortunately could not find you there. I shall, however, call at your oil mill tomorrow, with an expert engineer's opinion, and will give you offer for the same. I may buy for myself or sell to my friends.\" On the next day, the intending purchaser again wrote to the defendant. The letter referred to a conversation which the writer had with the defendant and contained two alternative offers. The first alternative was the purchase of the mill for Its. 35,000 cash, Rs. 1,000 to be deposited there out as earnest money, and the balance to be paid after one month, if on trial working meanwhile, the mill turned out to be satisfactory. The second alternative was the purchase of the mill on payment of Rs. 10,000 in cash at the time of sale, and Rs. 30,000 to be paid after one year. It may be observed parenthetically that neither of these offers accorded with what the seller expected, namely, Rs. 40,000 in cash. What followed, does not transpire from the correspondence, but we find that on the 8th August 1911 the purchaser wrote to the defendant and confirmed an arrangement made on the day previous for the sale of the mill for Rs. 40,000; Rs. 10,000 to be paid in cash on registration of the conveyance, Rs. 20,000 by a hundi payable one year after that date, and the balance of Rs. 10,000 by another hundi payable 18 months after the date of the registration of the conveyance. On the 15th November 1911, nearly two months after the sale had been completed on the 27th September, the purchaser is said to have written a letter to the plaintiff and authorised him to negotiate for the appointment of managing agents of the mill, which is described as purchased through you.\" On the 26th January 1912, the Solicitors of the plaintiff wrote to the defendant and demanded immediate payment of Rs. 2,000 as brokerage due or the sale of the mill, which was alleged to have been effected through their client. The Solicitor of the defendant promptly replied on the next day. He pointed out that the letter of authority of the 13th June 1911 was limited to 15 days from the date thereof. He asserted that the plaintiff had failed to secure a purchaser within the prescribed time and that the mill had been sold without any concern with him; and he added that the seller had already paid brokerage on the transaction. This referred to a payment of Rs. 200 by the defendant to the purchaser, who had granted a receipt therefor as paid on account of brokerage. The plaintiff thereupon instituted this suit on the 13th June 1912. The defendant asserted that the sale had taken place without the intervention of the plaintiff as broker and repudiated the claim as entirely unfounded. Mr. Justice has held on the evidence that the sale was effected through the instrumentality of the plaintiff and has decreed the suit. On the present appeal, the defendant has contended that this finding is not supported by the evidence on the record, and that even if the finding is maintained it is not sufficient to justify the decree. ", "15. It is an elementary principle that where an agent has been appointed for a fixed term, the expiration of the term puts an end to the agency, whether the purpose of the agency has been accomplished or not; consequently, where an agency for sale has expired by express limitation, a subsequent execution thereof is invalid, unless the term has been extended. It is thus plain that the plaintiff could be entitled to the commission, only if he found a purchaser on or before the 28th June 1911. I do not hold that the plaintiff was bound to complete the transaction within this period; in my view of the contract, the plaintiff would be entitled to the commission, if, within the time prescribed he produced a person able, ready and willing to enter into the transaction with the defendant on the terms prescribed by the latter, and the plaintiff must within that period notify his principal that he had secured such a person. It is also indisputable, I think, that the burden lies upon the plaintiff to establish that he has earned the commission he claims. If these principles are borne in mind, there is no escape from the conclusion that the plaintiff cannot be awarded a decree, merely on the finding that the sale was effected through his instrumentality. If the case were before a Jury, the Court would have to instruct them that to find a verdict for plaintiff, they must find that plaintiff procured a purchaser able and willing to buy on the terms stated in the writing, that he notified defendant of the fact and that this was done within the 15 days prescribed. The vital question, consequently, is, did the plaintiff bring the purchaser to the defendant on or before the 28th June 1911. There is no trace in the correspondence already summarised that he had done so. The first letter of the purchaser to the defendant mentions that he had learnt from about the proposed sale of the mill. This, no doubt, is not conclusive proof that he had not met the broker on or before the 25th June; but there is no specific evidence upon which I can act that the two had met before that date. The letter of the 26th June also, taken by itself, does not assist the plaintiff. No doubt, it recites a conversation between the defendant and the purchaser, but it does not show that the plaintiff was present at that interview. I do not overlook that the purchaser asserts that he was introduced to the defendant by the broker, and his version has been accepted as true by Mr. Justice ; but this does not carry matters far enough. The purchaser could not pledge his oath that his first letter was written after the broker had informed him of the proposed sale of the mill. I am not unmindful that the purchaser asserts that he first offered Rs. 35,000 and that the broker used to come and see him often and got him into the scrape, that is, induced him to pay Rs. 40,000. This statement, even if accepted and taken along with the letter of the 26th June, does not conclusively prove that introduced the purchaser to the defendant on or before the 26th. There can be no dispute that if such introduction did not take place on or before the 26th June, the evidence does not show that it was brought about either on the 27th or 28th June; indeed, the evidence is entirely silent with regard to these two dates. ", "16. Mr. , in the course of his able argument for the respondent, properly emphasised the fact that Mr. Justice , who had the opportunity to see the witnesses, which we have not, has believed the purchaser in preference to the defendant; and he has argued that in a case of this description, where there is a conflict of oral testimony, should not reverse the finding of . This contention raises a question of considerable importance as to the duty and functions of in this country. As was stated by , in v. Empress 11 C.L.R. 25 and by , , in 23 C. 347, the sound rule to apply in trying an appeal in a civil case is that the must be convinced, before reversing a finding of fact by a lower , that the finding is wrong; in other words, the burden lies upon the appellant to satisfy the that the finding he assails is not supported by the evidence on the record: Wise v. 20 E.B. 68 : 11 M.T.A. 177 at p. 181 : 7 W.R. 13 (P.C.) : 1 . P.C. 667 : 2 Sar. P.C. 249 : Tahboonissa Bibee v. 15 W.R. 228 : v. 25 W.R. 30 : v. 25 W.R. 26 : v. 25 W.R. 50; v. 25 W.R. 363. : Musammat Hoymobutty Dossee v. 14 W.R. 58 : Munsoob Bibee v. Ali Miah 17 W.R. 358. When such evidence consists entirely or even principally of the oral testimony of witnesses, the appellant is at a special disadvantage. Reference may in this connection be made to the observation of Lord in 3 Ind. Cas. 799 : 36 I.A. 185 : 32 M. 400 : 11 Bom. L.R. 1206 (P.C) : 10 C.L. 276 : 6 M.L.T. 304: \"No doubt it is always difficult for Judges who have not seen and heard the witnesses to refuse to adopt the conclusions of fact of those who have; but that difficulty is greatly aggravated where the Judge who heard them has formed the opinion, not only that their inferences are unsound on the balance of probability against their story, but that they are not witnesses of truth.\" The reasons for this rule of practice are too obvious to require elucidation. But it is worthy of note that Lord refers with approval to the judgment delivered by , M.R., in in the case of v. (1898)1 Ch. 704 : 67 L.Ch. 402 : 78 L.T. 540, which sets out the limitations of the rule: Even where, * * * the appeal turns on a question of fact, has to bear in mind that its duty is to rehear the case, and the must reconsider the materials before the Judge with such other materials as it may have decided to admit. The must then make up its own mind, not disregarding the judgment appealed from, but carefully weighing and considering it; and not shrinking from overruling it if on full consideration the comes to the conclusion that the judgment is wrong. When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross-examined before the Judge, the is sensible of the great advantage he has had in seeing and hearing them. It is often very difficult to estimate correctly the' relative credibility of witnesses from written depositions; and, when the question arises which witness is to be believed rather than another, and that question turns on manner and demeanour, always is, and must be, guided by the impression made on the Judge who saw the witnesses. But there may obviously be other circumstances, quite apart from manner and demeanour, which may show whether a statement is credible or not: and these circumstances may warrant the in differing from the Judge, even on a question of fact turning on the credibility of witnesses whom the has not seen. \" In the case in which these observations were made, (, M.R., Rigby, L., and , L.), allowed the appeal, although the appeal turned on a question of fact. It is obviously impossible to frame a formula, to define the impression which must be produced on the minds of the Judges of , so that they may not shrink, in the words of , M.R., from overruling the judgment of the Trial : and the cases in the books employ various expressions which are really of little assistance, such as that the judgment is 'clearly wrong' [Khoorshedjee Manikjee v. 1 M.I.A. 431 at p. 442 : 5 W.R. 57 (P.C) : 1 . P.C. 73 : 1 Sar. P. C. 138 : 18 E.R. 173], that the decision is irresistibly erroneous' [ v. (1876) 2 H.L.Sc. 53 followed in Pandurang Vasudeo v. 5 Bom. L.R. 956 and 9 Bom. L.R. 393,], that ' ought never to reverse the judgment of an inferior unless quite confident that the judgment giver, in the below is wrong' [ () v. (1853) 3 Cl. & F. 479 at p. 512 : 9 Bligh. (N.S.) 532 : 6 E.R. 1517 followed in Yemunabai v. 5 Bom. L.R. 584], that the will not reverse the decision except in cases of extreme and overwhelming pressure [The Julia, Bland v. (1860) 14 Bom. P.C. 210 : Lush. 224 : 15 E.R. 284 : 134 R.R. 43, The Alice and the Princess Alice (1868) 2 P.C. 245 : 19 L.T. 678 : 17 W.R. 209 : 38 L. Adm. 5], that ' will hesitate long before it disturbs the findings of a Trial Judge based on verbal testimony' [Khoo Sit Hoh v. (1912) App. Cas. 323 : 81 L.P.C. 176 : 106 L.T. 470], or that the finding 'is so clearly against the weight of the testimony as to amount to a manifest defeat of justice' : [ v. as (1899) 2 I.R. 1 at p. 18 : 32 I.L.T.R. 33 : 4 Ir.L. Rep. 630]. We may also bear in mind the observation of Lord Chelmsford in Tayammaul v. Sashachalla Naikar 10 M.I.A. 429 at p. 436 : 2 Sar. P.C. 139 : 19 E.R. 1034, \"the advantage the Judge of possesses in forming a correct opinion of the credit due to the witnesses, does not relieve from the duty of examining the whole evidence and forming for itself an opinion upon the whole case.\" To the same effect are the observations of , A., in Glannibanta, The (1876) 1 P.D. 283 at p. 287 : 34 L.T. 934 : 24 W.R. 1033 : 3 Asp. M.C. 339. Indeed, if the conclusion of the Trial in a case of conflict of oral testimony were held practically unassailable, that would in essence be constituted the final on questions of fact. But the parties to the cause are entitled, as well on questions of fact as on questions of law, to demand the decision of , though, as James L., said in Bigsby v. (1876) 4 Ch. D. 24 at p. 29 : 35 L.T. 679 : 25 W.R. 89 : 46 L.Ch. 280, if we are to accept as final the decision of the of first instance in every case where there is a conflict of evidence, our labours would be very much lightered.\" The matter is obviously simpler where the conclusion is merely an inference of fact [Lord in Smith v. (1884) 9 App. Cas. 187 at p. 194 : 53 L.Ch. 873 : 50 L.T. 697 : 32 W.R. 687 : 58 P. 644.] or where the evidence whereon the decision of the Trial Judge is based, has been taken on commission [Lord in v. 6 Ind. Cas. 981 : 14 C.W.N. 842 : 12 Bom. L.R. 419 : 7 M.L.T. 414 (P.C.) : 32 A. 241]. But, even in other cases, it is undoubtedly the duty of to weigh conflicting evidence and to draw its own inferences and conclusions, though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. Cases are by no means rare where an Indian Appellate has reversed the decision of based on conflicting oral testimony and the conclusion of the Appellate has been ultimately affirmed by : 25 I.A. 109 : 25 C. 824 : 2 C.W.N. 321 : 33 C. 537 : 3 C.L. 349 : 10 C.W.N. 522 : 8 Bom. L.R. 375 : 1 M.L.T. 131 : 16 M.L. 161 : Musammat Bulli Kunwar v. Mnsammat Bhagirathi 9 C.W.N. 649 : 15 M.L. 265 : 22 C. 519 : 22 I.A. 12 : Secretary of State for 4 Ind. Cas. 448 : 36 C. 967 : 10 C.L. 281 (P.C) : 11 Bom. L.R. 1197 : 14 C.W.N. 134. : Jeolal Mahton v. 15 Ind. Cas. 184 : 16 C.W.N. 466 (decided by on the 23rd January 1912). I am not unmindful that there are other instances where has reversed the decision of the local Appellate and restored the decree of the Trial Judge, but that has been done because their Lordships were satisfied, upon a scrutiny of the entire evidence, that the view of the latter was more consistent therewith than that of the former, v. Rajani Kant Mukerji 21 C. 1 : 23 C. 1 : 22 I.A. 171 : 27 C. 521 : 27 I.A. 10 : 4 C.W.N. 501 : Khoo Sit Hoh v. Lim Thean Tone (1912) App. Cas. 323 : 81 L.P.C. 176 : 106 L.T. 470 : . 130 : 29 A. 29 : 17 M.L. 32 : 5 C.L. 4 : 9 Bom. L.R. 80 : 1 M.L.T. 429 (P.C). We may also bear in mind the fact that, although as an ordinary rule does not interfere with concurrent judgments of the s below on questions of fact, instances are by no means rare where their Lordships have examined the whole evidence, formed for themselves an opinion on the entire case and reversed the unanimous decision of the two s in India on a question of fact: v. 4 M.I.A. 1 : 7 W.R. 57 (P.C.) : 1 . P.C. 197 : 1 Sar. P.C. 313 : 18 E.R. 600 : Huradhun Mookurjia v. Muthoranath Mookurjia 4 M.I.A. 414 : 7 W.R. 71 (P.C.) : 1 . P.C. 213 : 1 Sar. P.C. 375 : 18 E.R. 758; Mndhoo Soodun Sundial v. 4 M.I.A. 431 : 7 W.R. 73 (P.C) : 1 . P.C. 216 : 1 Sar.P.C. 378 : 18 E.R. 764 : Tayammaul v. Sashachalla Naikar 10 M.I.A. 429 at p. 436 : 2 Sar. P.C. 139 : 19 E.R. 1034 : Charles Seton Guthrie v. 14 M.I.A. 53 : 15 W.R. (P.C.) 50 : 7 B.L.R. 630 : 2 . P.C. 429 : 2 Sar. P.C. 660 : 20 E.R. 706 : Baboo Lekraj Roy v. 14 M.I.A. 393 : 17 W.R. 117 : 10 B.L.R. 35 : 2 . P.C. 536 : 3 Sar. P.C. 43 : 20 E.R. 833 : Hay v. Gorden (1872) I.A. Sup. 106 : 10 B.L.R. 301 : 18 W.R. 480 : Venkatesivara lyan v. Shekhari Vanna 8 I.A. 143 : 3 M. 384 : Muhammad Mumtaz Ahmad v. Jan 16 I.A. 205 : 11 A. 460 : 5 Sar. P.C. 433. : 11 Ind. Cas. 399 : 15 C.W.N. 648 (P.C) : 13 C.L. 588 : 8 A.L. 587 : 13 Bom. L.R. 440 : 21 M.L. 652 : 10 M.L.T. 335 : (1911) I.M.W.N. 418 It is not necessary for the present purpose to consider whether any general principle is deducible from the expressions used by their Lordships as to the circumstances under which they will depart from the rule ordinarily observed by them, such as 'that the very clearest proof is shown that the decision is erroneous, that 'the is clearly satisfied that there has been miscarriage in the appreciation of evidence,' that it is manifestly clear from the probabilities that the below was wrong,' that 'the case is very extraordinary,' that a strong case must be made out before the would recommend reversal,' that 'it must very clearly appear that the conclusion is very plainly erroneous,' that 'there has been some miscarriage in respect of a presumption to which too much weight was given,' that very definite and explicit grounds must be assigned for interference,' that there is so strong a preponderance of testimony that the can confidently pronounce the decision to be wrong,' and other expressions of like import. But it is obvious that if reversal of concurrent findings of fact is permissible, the of first Appeal should not be deemed fettered to a larger extent. ", "17. In the present case, as I have already stated, the finding that the sale was effected through the instrumentality of the plaintiff does not justify a decree in his favour. The purchaser does not make an explicit statement that the plaintiff introduced him to the defendant on or before the 28th June 1911, but even if this much be deemed to be implied in his statements, I cannot accept his testimony. The correspondence does not show any trace of the presence of in the negotiations; one would have expected some mention of his name in the first or the second letter. It is also remarkable that no written communication appears to have passed between the plaintiff and the defendant, although the plaintiff had taken the precaution to accept the agency by a written instrument. There is further the unexplained fact that the purchaser received Rs. 200 as brokerage; he cannot explain why the sum was described by this obviously inappropriate term; it is extremely improbable that the defendant would have made a present of this sum to the purchaser, if he had really to pay Rs. 2,000 to plaintiff as broker. There is the further significant fact that the claim for brokerage was not put forward till the 26th January 1912, though, if the plaintiff is to be believed, he had earned it before the 26th June 1911 and the sale had been actually completed on the 27th September 1911. Finally, the case for the plaintiff is certainly not improved by the letter alleged to have been written on the 15th November 1911, which plainly bears the appearance of an attempt to create evidence for future use. After the most careful and anxious consideration of the entire evidence on the record and the circumstances of the case, I have arrived at the conclusion that the plaintiff has failed to establish that he has earned the commission claimed in terms of the contract and that the decree in his favour cannot be supported. In my opinion, the appeal should be allowed and the suit dismissed with costs throughout. ", ", ", "18. The result is that, in view of the opinion expressed by the majority of the , this appeal will be allowed, the judgment of the of first instance set aside, and the plaintiff's suit dismissed with costs both of the of first instance and of this appeal."], "relevant_candidates": ["0000003757", "0000037279", "0000408122", "0000425913", "0000809415", "0000848773", "0000871378", "0001373355", "0001575831", "0001972968", "0017051540"]} {"id": "0001285713", "text": ["JUDGMENT , J. ", "1. The claimants have filed the present appeal for enhancement of compensation awarded by , Karnal dated 8.9.1987 vide which a compensation of Rs. 15,000/- was awarded to the claimants under Section 92-A of the Motor Vehicles Act on account of death of and her minor daughter . ", "2. Briefly the facts of the case are that on 25.2.1987 at about 7.00 P.M. along with her infant girl child who were sitting on the carrier of a cycle, which was being driven by her son and was going from Chhajpur Khurd to village Chhajpur Kalan. The cycle was being driven by on the correct side and when they reached the Chhajpur crossing, slowed down his cycle and gave a signal with his right hand indicating that he was to turn towards Chhajpur Kalan which was on the right hand side. At that time, a Haryana Roadways Bus, bearing registration No. HRQ-4452 which was coming from the Panipat side i.e. the same side on which the cycle was going and being driven by , respondent No. 4 rashly and negligently, struck against the cycle as a result of which and her infant daughter died on the spot. who was riding the cycle suffered injuries. ", "3. The claimants who are the husband of as well as 5 other minor children, have filed the claim petition wherein they have claimed compensation for the deaths of as well as to the tune of Rs. 3,50,000/-. It was averred in the petition that was earning a sum of Rs. 1500/- per month by doing the work of tailoring and stitching. ", "4. Reply to the claim petition was filed by the respondents, in which it was admitted that the accident took place. However, , the driver of the Haryana Roadways Bus averred that the accident has took place due to negligence of the cyclist and he was not responsible for the accident. Thus the question in the present case is whether. and had died in an accident with Bus No. HRQ-4452 due to rash and negligent driving of bus driver, , and if so then how much amount of compensation, the claimants are entitled to ? ", "5. The claimants in order to support their case, examined PW-1 , PW-2 and PW-3 . PW-2 stated that at about 7.00 P.M. on 25.2.1987, while he was coming from his fields, he had halted at Chhajpur Khurd bus stand to take water and to relax, that in the meanwhile cyclist was seen coming from the side of village Nimbri. He has further stated that and infant child were sitting on the carrier of the cycle and Singh was going on the left side of the road. It was further stated by this witness that turned to the right hand side after giving a signal by hand and while he had reached the middle of the road, a Haryana Roadways bus, bearing registration No. HRQ-4452 which was coming from village Nimbri and was being driven in rash and negligent manner, struck against the cycle and as a result of which and her daughter were died on the spot. , who was riding the cycle, also appeared as PW-3 and stated that he had given a signal with his right hand for turning to the right hand side and at that time, the offending vehicle was at a distance of 100 yards. It is further submitted that the bus came straight and struck against the cycle as a result of which, his mother and infant sister died. Both the witnesses were cross-examined at length by the counsel for the and the respondents have tried to make much capital with regard to the time of the accident. RW-1 , who is the driver of the Haryana Roadways bus also appeared in the witness box and stated that it was the cyclist, who was at fault as the cyclist took a sudden turn towards the right hand side without giving any signal. One RW-2 stated that he was sitting in the front seat of the bus and said that the accident had taken place due to negligence riding of the cyclist and not the bus driver and thus the bus driver is not responsible. ", "6. After going through the evidence on record, it is clear that when who was riding the cycle, he had given a signal, at that time the bus was approximately 100 yards away. There was sufficient time for the bus driver to slow down and apply brakes as the distance of 100 yards is good enough to take a evasive action. Moreover, the bus had struck against the cycle from the rear portion, which shows that it is the bus driver who is responsible for the accident. ", "7. Even assuming that the bus was at high speed at 80/100 k.m. per hour still 100 yards is sufficiently long distance to stop the bus and to take evasive action in case any cyclist or pedestrian is crossing the road even without giving signal. In the present case, the cyclist had given a signal before turning and the headlights of the bus were on and it was 100 yards away. Therefore, in these circumstances, it is held that the accident took place because of the rash and negligent driving of , driver of the bus. ", "8. The next question that arises in the present case is as to what amount of compensation the claimants are entitled to. It has come in the evidence of husband of deceased that the deceased used to do the work of tailoring and stitching. He has stated that she used to earn a sum of Rs. 50/- to 60/- per day i.e. Rs. 1,500/- per month. However, in the statement of , her income is mentioned as Rs. 700/-. Apart from the statement of , there is also a statement of had stated that his wife had got suits stitched from the deceased and she used to earn approximately Rs. 15/16 per kurta/piece. It can easily be assumed that the deceased earned a sum of Rs. 900/-. If one third is deducted towards the expenses then the total dependency of the claimants was Rs. 600/- per month which comes to Rs. 7200/- per annum. was 35 years of age at the time of her death. She had five minor children and therefore, in these circumstances, I am inclined to apply a multiplier of 15. Accordingly, claimants are entitled to compensation of Rs. 1,08,000/- on account of death of . ", "9. As far as the death of the minor child is concerned, it would be appropriate to award a lump sum amount of Rs. 75,000/-. The entire amount of compensation shall be apportioned in equal shares between all the claimants. The claimants shall also be entitled to interest at the rate of seven and a half per cent instead of 12 percent, as awarded by the . . (2005-2)140 P.L.R. 650 (S.C.). The Hon'ble Supreme Court of India has held that taking note of the prevailing rate of interest in bank deposits, the interest is liable to be fixed at the rate of seven and a half per cent per annum. ", "10. The entire amount shall be paid by the respondents after deducting the amount already paid. The claimants shall be entitled to the interest from the date of filing of the claim petition, till realisation. The judgment of the M.A.C.T., Karnal is modified to the extent above"], "relevant_candidates": ["0000636367"]} {"id": "0001296130", "text": ["PETITIONER: Vs. RESPONDENT: AND ORS. DATE OF JUDGMENT17/07/1974 BENCH: , BENCH: , SARKARIA, RANJIT SINGH CITATION: 1974 AIR 1728 1975 SCR (1) 534 1974 SCC (2) 323 CITATOR INFO : RF 1986 SC1370 (69,77,80) RF 1988 SC 782 (65) RF 1988 SC1353 (3) ACT: Transfer of Property Act , 1882 ss. 6 , 122 and 123- -Gift of shares in companies by registered gift deed--Transfers not effected before donor's death--No question of competing equities--Whether rights of ownership can be split into right to corpus and usufruct. Indian Companies Act , 1913--S. 28--Reg. 18 of Table A \"title to get on the register\" and \"the full property in the shares in a company\"--Distinction. Interpretation--Harmonious interpretation. HEADNOTE: By a registered deed, a donor gifted to the appellant shares in various limited companies. Before her death the donor had signed several blank transfer forms to enable the done to obtain transfer of the shares in the register of companies and share certificates in his name. She had signed at the correct places showing that she meant to sign transfer of shares but the transfer could not be effected before the donor's death. The respondent claiming the shares filed an administration suit. A single Judge of held that the appellant was entitled to shares covered by the gift deed to which blank transfer forms could be related. A division bench of reversed the decision of the Single Judge on the ground that the gift was incomplete for failure to comply with the formalities prescribed by the Indian Companies Act , 1913 for transfer of shares. It further held that there was no equity in favour of the appellant so that he may claim the right to complete what was left incomplete by the donor in her life-time. On appeal it was contended in this Court (1) that since the donor had signed the blank transfer forms and handed them over to the done, the gift deed and the signed blank forms had to be read together and (2) that the transfer was complete with the registration of the gift deed and even delivery of share certificates to the done was not necessary in view of s. 122 of the Transfer of Property Act. Allowing the appeal, HELD:(1) The respondent has not made out a case for defeating the clearly expressed intentions of the donor, coupled with the authority with which the donor was armed by reason of the signed blank transfer forms. On a correct interpretation of the gift deed and other material the right to obtain a transfer of shares was clearly and completely obtained by the donee appellant. There was no question of competing.equities because the donee appellant was shown to have obtained a complete legal right to obtain shares under the gift deed and an implied authority to take steps to get his name registered. [549B-D] The fact that the relevant provisions of the Transfer of Property Act and the Companies Act must be interpreted harmoniously does not mean that a provision of one Act could be nullified by any provision of the other Act. It means that the provision of the two Acts should be read consistently with each other so far as it is reasonably possible to do so. This end can be best achieved by examining the objects and the subject-matter of each enactment and by viewing each relevant provision as a limb of an integrated whole meant to serve the underlying purposes. In this way their separable spheres of operation will be clarified so as to avoid possibilities of conflict between them or any unnecessary overflow of what really appertains to one field into another. [539H-540B] (2) The Transfer of Property Act is an enactment meant for defining certain basic types of transfers and lays down the requirement both of substance and of form for their legal recognition and effectiveness. Section 5 of the Act gives a wide connotation to \"transfer of property\". Section 6 of the Act lays down that \"property of any kind may be transferred\" subject to certain exceptions. Shares in a company are certainly a form of property. Section 28 of the Companies 535 Act, 1913 says that they \"shall be movable property, transferable in the manner provided by articles of the Company\". A wide definition of \"property\" in s. 6 of the Transfer of Property Act includes not merely shares as transferable, movable property. but would cover as a separate form of property a right to obtain shares which may be antecedent to the accrual of rights of a shareholder upon the grant of a share certificate in accordance with the articles of association of a company. [540B-E] There is a distinction between \"the title to get on the register\" and \"the full property in the shares in a company\". The first is acquired by mere delivery, with the required intention of the share certificate and a blank form signed by the transfer. The second is only obtained when the transferee, in exercise of his right to become a shareholder, gets his name on the register in place of the transferor. This antecedent right in the person to whom the share certificate is given with a signed blank transfer form under a transaction meant to confer right or title upon him to become a shareholder is enforceable so long as no obstacle to it is shown to exist in any of the articles of association of a company or a person with a superior right or title, legal or equitable, does not appear to be there. Section 6 of the T.P. Act justifies such a splitting up of rights constituting property in shares just as it is well recognised that rights of ownership of property may be split up into a right to the \"Corpus\" and another to the \"usufruct\" of the property and then separately dealt with. [541C- . 53 Indian Appeals P. 92 @ 97-98, relied on. Section 122 of the Transfer of Property Act defines a \"gift\". Section 123 of the T. P. Act prescribes the mode of transfer by gift. No special mode of delivery is specified in the section. On the other hand it is indicated that the delivery \"may be made in such a way as the goods sold are delivered\". [541E-G] In the instant case the registered document was signed both by the donor and donee and is attested by witnesses. The donor specified and gave particulars of the shares meant to be gifted. The donor delivered the registered gift deed together with the share certificates to the donee. On these facts the donation of the right to get share certificates made out in the name of the donee became irrevocable by registration as well as by delivery. The actual transfers in the registers of the companies concerned were to constitute mere enforcement of this right. They were necessary to enable the donee to exercise the rights of the shareholder. The mere fact that such transfers had to be recorded in accordance with the Company Law did not detract from the completeness of what was donated. [541G-542B] The broadly indicated requirements of regulation 18 of Table A of 1st Schedule to the Companies Act , 1913 were also complied with by the contents of the gift deed. It is immaterial that the gift deed deals with a number of items so long as the requirements of Regulation 18 are fulfilled. The observance of a form whether found in the Transfer of Property Act or in the Companies Act is meant to serve the needs of the substance of the transaction which were undoubtedly shown to have been completely fulfilled here. There is nothing in Regulation 18 to indicate that without strict compliance with some rigidly prescribed form, the transaction must fail to achieve its purpose. The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed, savors of archaic and outmoded jurisprudence. [543G-544A] Re Nose, Midland Bank Executer & Trustee Co. Ltd. v. . 1949 Ch. D. 78, Re , v. , 1932 (1) Ch.D. 499, , Supp. (2) SCR 448 @ 453 referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2515 of 1973, (From the judgment and Decree dated the 11th/12th July, 1972 of in L.P. A. No. 40 of 1969.) , and for the appellant. , and for respondent No. 1. ", "536 ", "The Judgment of the Court was delivered by This appeal, after certification by of fitness of the case for it, I rises in the following circumstances: ", ", a flourishing lawyer, made a will, on 10-6-1945 and died childless on 20-8-1946. His widow, , obtained, under the will, inter alia, certain shares the right and title to which are disputed before us. On 6-3-1948, executed a registered gift deed purporting to donate the disputed shares in various limited companies, of which details were given in the gift deed, to her brother, , the appellant before us (hereinafter referred to as \"\"). On 18-4- 1948, also expired. But, before she died, she had signed several blank transfer forms,apparently intended to be filled in by donee so as to enable him. to obtain the transfer of the donated shares in the registers of the various companies and share certificates in his own name. She had put her signatures in the correct places showing that she meant sign as the transferor of the shares. The shares could not, however, be transferred in the registers of the various companies, in accordance with the relevant provisions of Company law, before the lady's death. Therefore, the respondent before us, , a nephew of the late , disputed the claim of the appellant Vasudev Ramchandra to these shares in an administration suit which came up before a learned Judge of in second appeal together with other matters. The learned Single Judge held that was entitled to the shares covered by the registered gift deed to which the blank transfer forms could be related but not to others said to have been orally gifted with which we are not concerned here. The learned Judge having granted leave to file a Letter's Patent Appeal, of , which considered the rival claims, reversed the decision of the learned Single Judge even with regard to the shares covered by the registered gift deed on the ground that the gift was incomplete for failure to comply with the formalities prescribed by the Companies' Act for \"transfer\" of shares. It held-that there was no equity in favour of so that he may claim a right to complete what was left incomplete by the donor in her lifetime even though there could be no doubt that had intended to donate the shares to . ", "We think Mr. , learned Counsel for the appellant , rightly pointed out that every material finding on questions of fact, given in favour of the appellant, was upheld by . After indicating the terms of the gift deed, held: ", "\"Thus, it is undoubtedly true that the deed of gift discloses a clear and unequivocal intention on the part of that should become the owner of these shares and he should for all future time enjoy the fruits thereof. it is a well settled position in law that unless the gift it completed as required by law, mere intention to make a gift cannot pass any title to the donee and does not make the donee the owner of the property gifted by the donor. The registered gift deed itself cannot create any transfer and so it was not competent to the donor to divest the title in her merely by the execution of the gift deed. She was required to execute the regular transfer deeds or instruments of transfer in favour of Shelat and hand them over to the donee, Shelat, together with the share certificates.\" ", "It went on to say: ", "\"The circumstances as they clearly emerge and the facts as found by the Courts below, go to show that the deed of gift was executed on March 6, 1948, and, at the same time, the re- levant share-certificates were handed over by the donor to the donee; and, sometime between March 6, 1948, when the gift deed was executed, and April 18, 1948, when died blank transfer forms signed by were handed over by to , the donee.\" ", "The appellant's submissions, on facts found, may be summarised as follows: ", "(1) As between the donor and the donee the transfer was complete with the registration of the gift deed; and, as there was a registered document, even delivery of share certificates to the donee was not necessary in view of Section 122 Transfer of Property Act. ", "(2) Assuming, without conceding that the donor had to do something more than to execute a registered document, this too was done when the shares certificates and the signed \"blank transfer\" forms were handed over to the donee by the donor. It did not matter if the name of the donee and other particulars are wanting in these blank forms. All necessary particulars of shares involved were expressly mentioned in the gift deed which specifies and identifies each individual share meant to be donated. The gift deed and the signed blank forms had to be read together. The donor had done all that reasonably lay with- in her power to complete the donation. ", "(3)The conduct of the donor, in handing over the share certificates to the donee and the blank transfer forms, read in the context of the expressly laid down intentions of the donor in the gift deed, raised the presumption of an implied authority to fill in the details and to submit to the companies concerned the forms given by the donor to before her death. ", "(4) There was no evidence whatsoever in the case to repel the irresistible inference of an implied authority given to the donee to fill in and submit the transfer forms so as to obtain the necessary entries in the registers of the various companies concerned. ", "(5) had, after giving all the necessary findings of fact in favour of the appellant, misdirected itself by resorting to the doctrine that there is no equity to complete an incomplete transaction, as there is when a bonafide purchaser for value comes before the . ", "538 ", "There was no question of any equity involved here. The simple question was one of fact. Did the inference of an implied authority of the donee to fill in the forms and take other steps necessary to get his name entered in the registers of shareholders arise or not? Instead of considering and deciding whether such an inference arose, had failed to decide the real issue on the erroneous view that equity debars it from inferring an implied authority because the donee, unlike a bona fide purchaser for value, had paid nothing for the rights he could get from the donor. ", "All that could be urged on behalf of the respondent may be summed up as follows : ", "(1) The facts found make out, at best, an intention of to donate but not the completion of a donation required by law for divesting the donor of interest in the property under consideration which consisted of shares. (2) Although shares are goods, as defined by the Sale of Goods Act , yet, they are 'goods' of a special kind. Their transfer is not completed merely by the execution of a registered document or by delivery but the correct mode of transfer is determined by the character of these \"goods\" Sec. 123 of the Transfer of Property Act lays down only a general mode of transfer by gift for goods in 'general but not for the transfer by gift of shares which are a special type of 'goods' capable of transfer only in accordance with a special mode prescribed by the Companies Act of 1913, which was applicable at the relevant time. In other words, an adoption of the prescribed form of transfer is of the essence of a transfer for all purposes and not merely as between the shareholder and the company concerned. (3) Sections 122 & 123 of the Transfer of Property Act had to be read harmoniously with Sections 28 and 34 of the Companies Act, 1913. ", "(4) Since material portions of the transfer form given in regulation 19 of Table A of the first Schedule of the Companies Act of 1913 were never filled in, the doctrine of \"substantial compliance\" with the required form could not come to the aid of the appellant. ", "(5) The gift deed itself does not empower the donee to take any of those steps which remained to be taken to complete the 'transfer', so that the doctrine of implied authority would be excluded by the ex. press terms of the gift deed which not only do not confer any such authority Upon the donee but indicated that the donor was to take the necessary steps herself. ", "(6) Inasmuch as acceptance of the gift \"during the life- time of the donor\" is a condition precedent to the validity of the gift as a transaction, and the appellant did not apply for the transfer of shares, so as to indicate his acceptance of the gift before the dono died, the purported donation was frustrated by reason of Sec. 122 of of the Transfer of Property Act . ", "539 ", "(7) Even if we were to assume that the facts proved disclosed that the appellant donee was armed with an implied authority to obtain a transfer, yet that authority not having been acted upon during the life-time of the donor, lapsed with the donor's death. The result was that the donation, even if intended, was imperfect or infructuous in the eye of law and could not be perfected or completed. Equity does not aid a merely purported donee who has given no consideration to obtain any right. In other words, equitable considerations would not be irrelevant in deciding the question before us. ", "(8)Even apart from equity, under the law of agency, found in sec. 201 of our Contract Act , the Principal's death terminates the agency, so that the doctrine of implied authority does not help the appellant. ", "(9) Section 202 of the Contract Act could not apply to a case where the subject-matter of the alleged agency is the taking of steps to complete a transfer and not the rights which could only accrue after the necessary steps are taken. Hence, the appellant donee could not be said to have an interest in the \"subject-matter of the agency\" which is distinct from rights which could have arisen if the object of the agency had been fulfilled. ", "(10) Section 202 of the Contract Act could apply to a case where an agent has an actual or existing interest in the subject-matter of the agency. Even if the subject-matter of the agency could be said to be \"Property\", consisting of shares, there could be no question of applying Section 202 of the Contract Act before an \"'merest\" in the shares arose. Such \"interest\" could only arise after a completed transfer. (11) Section 202 of the Contract Act contemplated cases of termination of agency in ways other than death. It meant that, so long as a Principal is alive, he could not terminate an agency so as to injure the interests of the agent in \"the subject matter of the agency\". But, in the case of the death of the Principal, the relationship terminated ipso facto or automatically by death. (12) A resort to the very concept of agency in this case presupposes that some interest of the Principal or the donor in the property said to be donated continued,-or, in other words, the assumption behind it was that the donation of shares was not complete in the eye of law. Its completion was not possible after the death of the donor. We think that questions to be really decided in the case before us have tended to become needlessly clouded by references to statutory provisions and to doctrines or concepts which really operate in separate and distinct fields of their own. It is true that the relevant provisions of the Transfer of Property Act and the Companies Act must be interpreted harmoniously. But, this certainly does not mean that a provision of one Act could be nullified by any provisions of the other Act. It means that the provisions of the two Acts should be- read consistently with each other so far as it is reasonably possible I to do SO. ", " ", "We think that this end can be best achieved here by examining the objects and the subject-matter, of each enactment and by viewing each relevant provision as a limb of an integrated whole meant to serve the underlying purposes. In this way, their separable spheres of operation will be clarified so as to avoid possibilities of conflict between them or any unnecessary overflow of what really appertains to one field into another. ", "No doubt the Transfer of Property Act is not exhaustive. It does not deal with every kind of transfer of property which the law permits. Nor does it prescribe the mode for every legally recognised transfer. Nevertheless, it is an enactment meant for defining certain basic types of transfer and it lays down the requirements both of substance and of form for their legal recognition and effectiveness. Section 5 of this Act gives a wide connotation to \"transfer of pro- perty\". All that it requires is that the transferor must be living at the time of the transfer recognised by the Act. Section 6 of the Act lays down that \"property of any kind may be transferred\" subject to certain exceptions. Shares in a company are certainly a form of property. Section 28 of the Companies Act, 1913, says that they \"shall be movable property, transferable in the manner provided by the articles of the company\". Both sides accept as correct the view of of -that the shares are \"goods\" within the meaning of the Sale of Goods Act . The point which, however, deserves to be noted here is that wide definition of \"property\" in Section 6 of the Transfer. of Property Act includes not merely shares as transferable, movable property, but would cover, as a separable form of property, a right to obtain shares which may be antecedent to the accrual of rights- of a shareholder upon the grant of a share certificate in accordance with the articles of . ", " .(1) which was a case of handing over share certificates together with blank signed transfer forms, said (at p. 97-98): ", "\"But\" further, there seems to their Lordships a good deal of confusion arising from the prominence given to the fact that the full property, in shares in a company is only in the registered holder. That is quite true. It is ture that what had was not the perfect right of property, which he would have had if he had been the registered holder of the shares which he was selling. The company is entitled to deal with the shareholder who Is on the register, and only a person who is on the register is in the full sense of the the word owner of the share. But the title to get on the register consists in the possession of a certificate, together with a transfer signed by the registered holder. This is what had. He had the certificates and blank transfers, signed by the registered holders. It would be an upset of all transactions if it were suggested that a broker who sold shares by general description (1) 53 Indian Appeals P. 92 @ P. 97-98. ", "541 ", "did not implement his bargain by supplying the buyer with certificates and blank transfers, signed by the registered holders of the shares described. sold what he had got. He could sell no more. He sold what in England would have been chooses in action, and he delivered chooses in action. But in India, by the terms of the Indian Contract Act , these chooses in action are goods. By the definition of goods as every kind of movable property it is clear that not only registered shares, but also this class of chooses in action, are goods. Hence, equitable considerations not applicable to goods do not apply to shares in India.\" ", "Thus, we find that, in 's case (supra), a distinction was made between \"the title to get on the register\" and \"the full property in the shares in a .,' The first was held to have been acquired by mere delivery, with the required intention, of the share certificate and a blank form signed by the transferor. The second is only obtained when the transferee, in exercise of his right to become a shareholder, gets his name on the register in place of the transferor. This antecedent right in the person to whom the share certificate is given with a signed blank transfer form under a transaction meant to confer right or title upon him to become a shareholder, is enforceable so long as no obstacle to it is shown to exist in any of the articles of association of a company or a person with a superior right or title, legal or equitable does not appear to be there. We think that Section 6 of the Transfer of Property Act Justifies such a splitting up of rights constituting \" property\" in shares just as it is well recognised that rights of ownership of a property may be split up into a right to the \"corpus\" and another to the \"usufruct\" of the property and then separately dealt with. Sec. 122 of the Transfer of Property Act defines a \",gift\". its substantial requirements are : (1) the donor must transfer \"property\", which is the subject-matter of the gift, voluntarily and without consideration; (2) and, the donee must accept it during the life-time of the donor or while the donor's competence to give exists. Section 123 of the Transfer of Property Act prescribes the mode of transfer by gift. It lays down that \"the transfer may be effected either by registered instrument signed by the donor and attested by at least two witnesses or by delivery\". No special mode of delivery is specified. On the other hand, it is indicated that the delivery \"may be made in such a way as the goods sold are delivered\". ", "In the case before us, the registered document was signed by the donor as \"the giver\" as well as by the donee as \"the acceptor\" of the gift, and it is attested by six witnesses. In it, the donor specified and gave particulars of the shares meant to be gifted and undertook to get the name of the donee put on to the registers of the companies concerned. The donor even said that she was, thenceforth, a trustee for the benefit of the donee with regard to the income she may get due to the fact that her name was still entered in the registers of the companies concerned as a shareholder. The donor delivered the registered gift deed together with the share certificates to the donee. We think that, on these facts, the donation of the right to get share certificates made out in the name of the donee became irrevocable by registration as well as by delivery. The donation of such a right, as a form of property, was shown to be complete so that nothing was left to be done so far as the vesting of such a right in the donee is concerned. The actual transfers in the registers of the companies concerned were to constitute mere enforcements of this right. They were necessary to enable the donee to exercise the rights of the shareholder. The mere fact that such transfers had to be recorded in accordance with the company law did not detract from the completeness of what was donated. We think the learned Counsel for the appellant rightly contended that, even in the absence of registration of the gift deed, the delivery of the documents mentioned above to the donee with the clear intention to donate, would be enough to confer upon the donee a complete and irrevocable right, of the kind indicated above, in what is movable property. He relied upon : .(1); ;(2) Firm Sawan Mat Gopi Chand v. ). ", "The requirements of form or mode of transfer are really intended to ensure that the substantial requirements of the transfer have been satisfied. They subserve an object. In the case before us, the requirements of both Section 122 and Section 123 of the Transfer of Property Act were completely met so as to vest the right in the donee to obtain the share certificates in accordance with the provisions of the Company law. We think that such a right is in itself \"property\" and separable from the technical legal ownership of the shares. The subsequent or \"full rights of ownership\" of shares would follow as a matter of course by compliance with the provisions of Company law. In other words, a transfer of \" 'property\" rights in shares, recognised by the Transfer of Property Act , may be antecedent to the actual vesting of all or the full rights of ownership of shares and exercise of the rights of shareholders in accordance with the provisions of the Company law. ", "The Companies Act of 1913 was meant \"to consolidate and amend the law relating to trading companies and other associations\". It is concerned with the acts and proceedings relating to the formation, running, and extinction of companies, with rights, duties, and liabilities of those who are either members or officers of such companies, and of those who deal with companies in other capacities. Its subject-matter is not transfer of property in general. It deals with transfers of shares only because they give certain rights to the legally recognised shareholders and imposes some obligations upon them with regard to the companies in which they hold shares. A share certificate not merely entitles the shareholder whose name is found on it to interest on the share held but also to participate in certain proceedings relating to the company (1) 54 I. A. 89. ", "(2) ILR 52 Bom. 313. ", "(3) AIR 1924 Lab. 173. ", "543 ", "concerned. It is for this purpose that Section 34 of the mpanies Act, 1913 enables the making of \"an application for the registration of the transfer of shares in a ......... either by the transferor or the transferee\". A share certificate is a prima facie evidence, under Sec. 29 of the Act, of the title to a share. 'Sec. 34 of the Act does not really prescribe the mode of transfer but lays down the provisions for \"registration\" of a transfer. In other words, it presupposes that a transfer has already taken place. The manner of transfer of shares, for the purposes of mpany law, has to be provided, as indicated by Sec. 28, by the articles of the mpany, and, in the absence of such specific provisions on the subject, regulations contained in Table 'A' of the 1st Schedule of the mpanies Act apply. ", "Table 'A' of the 1st Schedule to the Companies Act of 1913 gives regulation 19 as follows \"19. Shares in the company shall be transferred in the following form, or in any usual or common form which the directors shall approve : ", "1, A. B. of in consideration of the sum of rupees paid to me by (hereinafter called \"the said transferee\"), do hereby transfer to the said transferee the share (or shares) numbered in the undertaking called , to hold unto the said transferee, his executors, administrators and assigns, subject to the several conditions on which I held the same at the time of the execution thereof, and I (the said transferee) do hereby agree to take the said share (or shares) subject to the conditions aforesaid. As witness our hands the day of Witness to the signatures of, etc.\" ", "Apparently, the form given here is only for sales. In the case of a gift the more general provisions of regulation 18 would apply. This regulation says : ", "\"The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof.\" We find from the gift deed that both the donor and the. donee have signed the document, under two headings respectively : \"giver of the gift\" and \"acceptor of the gift\". Hence, we think that the broadly indicated requirements of regulation 18 were also complied with by the contents 'of the gift deed.- It is immaterial that the gift deed deals with a number of items so long as the requirements of regulation 18 are fulfilled. After all, the observance of a form, whether found in the Transfer of Property Act or in the Companies Act , is meant to serve the need of the substance of the transaction which were undoub- tedly shown to have been completely fulfilled here. There is nothing in regulation 18 or anywhere else in our Company law to indicate that, without strict compliance with some rigidly prescribed form the transaction must fail to achieve its purpose. The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed savors of archaic and outmoded jurisprudence. on the Companies Act s (XIII-Edn. p. 813) was cited before us for the proposition-that \"non registration of a transfer of shares made by a donor does not render the gift imperfect\". Considerable argument was advanced by both sides on the correct interpretation of the leading English case mentioned there : Re Nose, Midland Bank Executor & Trustee Co. Ltd. v. Rose,(1) where after an exhaustive discussion of the English case law on the subject, held that when a testator had done everything that lay in his power to divest himself of his Fights in preference shares \"completion of the legal title by registration could only be the act of a third party which did not affect the efficacy of the gift of shares inter- vivos\". upheld this decision in : In Be Rose V. Inland Revenue Commissioners.(2) It held that \"the deceased was in the position of. a trustee of the legal title in the shares for the transferees\", pending the entry of the names of the donees in a company's register and the issue of share certificates to them. In the case before us, we find that had actually stated in the gift- deed that her position, vis-a-vis the donee, who had accepted the gift, was that of a trustee for the benefits received by her from the gifted shares until the completion of the legal formalities so that appropriate entries are made in' the registers of companies concerned and fresh share certificates are issued to the donee. We, therefore, think that this case helps the appellant. (3), considering a case of blank transfers, , speaking for this Court, said (at p. 453) : ", "\"In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferee, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer', and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee. These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of (1) [1949] Ch. D. 78. (2) [1932] (1) Ch. D. 499. ", "(3) [1959] Supp. (2) SCR 448 @ 453. ", "545 ", "members can be made against the company, if the transferor retains the money in his own hands and fails to pay to it to him.\" ", "This case also makes a distinction between an antecedent right and title of the transferee under a blank transfer and the fully blossomed rights and title of such a transferee after the due registration of a transfer. Another case cited before us was : R. Subba Naidu v. Commis- sioner of Gift Tax, Madras,(1) where a distinction was made between a transfer of the antecedent right to the shares which operated with full force between a donor and the donee, \"notwithstanding that, vis-a-vis the company, the donor continued to be holder of the shares in the absence of transfer of shares\". In other words, the fields of operation of the provisions of Sections 122 and 123 of the Transfer of Property Act and the provisions of the Companies Act 1913 were different. Each had different objects and legal consequences. The Companies Act did not prevent the completion of a gift of the right to obtain the shares which could, in common parlance or loosely speaking, be spoken of as a gift of shares themselves even before the gift is acted upon so that the donee obtains share certificates in his own name. The Transfer of Property Act could not enable the donee to exercise the rights of a shareholder, vis-a-vis the company, until a transfer of shares is made in accordance with the Company law. ", "other cases cited on behalf of the appellant, which we will only mention without discussion, were ", "1. v. Hepworth(2); ", "2. In Re. Tahiti Cotton Company ex-parte Sargent(3); ", "3. In Re. ); ", "4. In the matter of ); ", "5. - yana Rao & Ors.(6); ", "6. &.Ors. v. (7); ", "7. v. & Anr.(8). ", "Learned Counsel for the respondent cited the following passage from the Palmer's Company Law (21st edition-1968, p. ", "334). ", "A transfer is incomplete until registered. Pending registration, the transferee has only an equitable right to the shares transferred to him. He does not become the legal owner until his name is entered on the, register in respect of these shares.\" ", "(1) [1969] (Vol. 73) I.T.R. 794. ", "(2) [1887] (36) Ch. D. 36. ", "(3) [1873] (17) Equity Cases 273@ 279. ", "(4) [1904] (1) Ch. D. 815, (5) AYR 1942 Cal. 461 @ 464. ", "(6) RR [1957] Mad 1958 @ 1072. ", "(7) AIR 1956 Pat. 32. ", "(8) 16 C.W.N. 666. ", "546 ", "This statement of the law in England is correct. The transferee, under a gift of shares, cannot function as a shareholder recognised by company law until his name is formally brought upon the register of a company and he obtains a share certificate as already indicated above. indeed, there may be restrictions on transfers of shares either by gift or by sale in the articles of association. Thus\" we find in Palmer's Company Law (at p. 336) : ", "\"There is nothing to limit the restrictions which a company's articles may place on the right of transfer. The articles may give the directiors power to refuse to register a transfer in any specified cases, for instance, where calls are in arrear, or where the company has a lien on the shares-and some such provisions are usually inserted. Thus article 24 provides that the directors may decline to register any transfer of a share (not being a fully paid share) to a person of whom they do not approve, and may also decline to register any transfer of shares on which the company has a lien. But the articles in many cases go far beyond this. They may prohibit, for example, the transfer of a share to any person who is not a member of a specified class, or provide, as they often do in private com- panies, that before transferring to an outsider the intending transferor must first offer the shares to the other members, and give them a right of pre-emption. Such provisions, though permanent, do not contravene the rule against perpetuities.\" ", "In the type of cases contemplated above, where there are special restrictions on the transfer of shares imposed by the articles of association, the difficulty or defect is inherent in the character of such shares. In such cases, the donee or purchaser cannot get more than what the transferor possesses. Therefore, in such cases, it is possible to hold that even the right and title to obtain shares, which we have viewed as separable from the legal right and title to function as a shareholder, is incomplete because of a defect in the nature of shares held due to some special restrictions on their transferability under the articles of association of the company concerned. But, such is not shown to be the case at all with any of the shares which formed the subject-matter of the gift in favour of . Hence, in our opinion, cases which deal with inchoate rights to shares do not assist the respondent because at least a gift of the right to obtain the transfer of shares in the books of the companies concerned was shown to be complete on the terms of the gift deed of coupled with the handing over of the share certificates and the subsequent signing of the blank transfer forms. It was not a ease of a bare expression of an intention to donate. The donor had done everything which she could reasonably be expected to do to divest herself of her rights in the shares donated. ", "Ireland v.. Hart'(1) relied upon by the respondent, was a case in which a prior equitable title of a wife, for whom the husband was a (1) [1902] (1) C.D. p. 522 @ 529. ", "547 ", "trustee, took precedence over the claim of a subsequent mortgagee. This case was cited in Palmer's Company Law as an instance of how delay in registration may endanger the claims of a transferee when some already existing prior equity comes to light In upholding the wife's claim of a prior equitable right the said (at p. 529) : ", "\"It is established by Societe Generale de Paris v. (11 App. Case 20), v. (38 Ch. D. 485); and v. ", "North Western Bank [1891(2) Ch. 599] that, where the articles are in the form in which they are in the present case, a legal title is not acquired as against an equitable owner before registration, or at all events until the date when the person seeking to register has a present absolute and unconditional right to have the transfer registered. I am not called upon to define the meaning of a present absolute and unconditional right, but, as it appears to me, I am not sure that anything short of registration would do except under very special circumstances. At all events, I am of opinion that in this case, prior to the date of the injunction, the defendant had not a 'present absolute and unconditional right' to the registration of the transfer of these shares, and that the prior equitable right of the plaintiff, Mrs. , must prevail.\" ", "Thus, what was disputed there was the right to obtain registration of a transfer of shares. The husband's power to mortgage was itself circumscribed by his position as a trustee. It was also pointed out in Palmer's Company Law (at p. 334) \"It has never been clearly decided in what circumstances the `present, absolute, unconditional right to have the transfer registered' to which Lord refers arises. It is thought that in many instances the test is that indicated by in Re. Rose. ", "'I was referred on that to the well known case of v. and also the recent case of Re. , Chase National Executors & Trustees Corpn. v. . Those cases, as I understand them, turn on the fact that the deceased donor had not done all in his power, according to the nature of the property given, to vest the legal interest in the property in the donee. In such circumstances it is of course, well settled that there-is no equity to complete the imperfect gift. If any act remained to be done by the donor to complete the gift at the date of the donor's death the court will not compel his personal representatives to do that act and the gift remains incomplete and fails. In V. the imperfection was due to the fact that the wrong form of transfer was used for the purpose of transferring certain bank shares, The document was not the appropriate document to pass any interest in the property at all. In Re the flaw in the transaction, Which was a transfer or transfers of shares in a certain company, was failure to obtain the consent of the which in the circumstances surrounding the transfers in question was necessary under the Defence (Finance Regulations) Act 1939, and, as appears from the head-note, what was held was that the donor's executors ought not to execute confir- ", "matory transfers. In this case, as I understand it, the testator had done ", "everything in his power to divest himself of the shares in question to Mr. . He had executed a transfer. It is not suggested that the transfer was not in accordance with the company regulations. He had handed that transfer together with the certificates to Mr. . There was nothing else the testator could do.... Therefore it seems to me that the present case is not in pari materia with the two cases to which I have been referred. The real position, in my judgment, is that the question here is one of construction of the will. The testator says \"if such preference shares have not been transferred to him previously to my death.\" The position was that, so far as the testator was concerned, they had been so transferred.\" ", "Respondent's learned Counsel also relied on Re v. ) which has been referred to by in the passage quoted above. In that case, apart from other distinguishing features, the flaw in the purported transfer was that it contravened the Defence (Finance Regulation) Act, 1939, which prohibited an acquisition of interest in the shares without a licence from the . Hence, the purported transfer was really illegal. No such illegality is shown to exist in the case before us. ", "Respondent's learned Counsel cited , (2) where, after a husband had executed a document in favour of his wife, the parties had done nothing to get the transfer registered for nearly 2 years during which the dividend was received sometimes by the wife and sometimes retained by the husband with the permission or implied consent of the wife. The Court held that the purported gift being an intended \"transfer\" only could not operate as a \"declaration of trust\". Another ground for the decision was that \"the disposition of the shares failed as being imperfect voluntary gift\". Here, purported to follow v. , (3) and, v. Delbridge(4). No such facts are present in the case before us. Moreover, we seriously doubt the correctness of this decision of . It seems to conflict with the law declared in the cases cited by the appellant which we approve. ", "Another case relied upon by the respondent was: . (supra), where the refused,. to direct rectification of a register of member s (1) 1946 (2) All. E.R. 106. ", "(2) ILR [1921] Cal. 986. ", "(3) 1862 (4) DEG. F. & J. 264. ", "(4) 1874 LR. 18 Eq. II. ", " ", "because the articles of association vested an absolute discretion in the company to recognise or refuse to recognise a transfer. The Company's consent to a transfer had been refused because the company did not accept the correctness of the form of transfer deeds. In other words, this was a case in which the provisions of articles of association stood in the way of rectification of the register. Such is not the case before us. The result is that We do not think that the respondent has made out a case for defeating the clearly expressed intentions of the donor coupled with the authority with which the donee was armed by reason of the signed blank transfer forms. We think that the implied authority was given with regard to a subject matter in which had acquired an interest. On a correct interpretation of the gift deed and the other facts mentioned above, we are of opinion that the right to obtain a transfer of shares was clearly and completely obtained by the donee appellant. There was no question here of competing equities because the donee appellant was shown to have obtained a complete legal right to obtain shares under the gift deed and an implied authority to take steps to get his name registered. This right could only be defeated by showing some obstacle which prevented it from arising or which could defeat its exercise. No such obstacle having been shown to us to exist, the rights of the donee appellant would prevail as against any legal rights which could have accrued to others if the donee had not already acquired the legal right which, as held by us above, had become vested in him. We, therefore, allow this appeal with costs and set aside the judgment and decree of of and restore that of the learned Single Judge. Appeal allowed ", "3-MI85 Sup. CI/75"], "relevant_candidates": ["0000613419", "0000771267", "0001036372", "0001339876", "0001600808", "0001974675"]} {"id": "0001298255", "text": ["PETITIONER: GULABCHAND CHHOTALAL PARIKH Vs. RESPONDENT: STATE OF BOMBAY (NOW GUJARAT) DATE OF JUDGMENT: 14/12/1964 BENCH: , K. BENCH: , K. SARKAR, A.K. DAYAL, RAGHUBAR AYYANGAR, N. RAJAGOPALA MUDHOLKAR, J.R. CITATION: 1965 AIR 1153 1965 SCR (2) 547 CITATOR INFO : R 1965 SC1325 (62) R 1968 SC1370 (5,6) RF 1977 SC1680 (7) RF 1981 SC2198 (13) ACT: Practice and Procedure-Decision on writ application under Art. 226- suit for same relief-If barred by res judicata. HEADNOTE: The appellant prayed for the issue of a writ of mandamus and a writ of prohibition against the respondent- in a writ application filed in , on the ground that his liability as surety for some contractors stood discharged on account of a particular action of the . dismissed the petition on merits after full contest. He thereupon filed a suit against the respondent and raised the same plea that he was discharged from liability as surety on the same grounds. The trial court, the first appellate Court and Held that the suit was barred by res judicata in view of the judgment of on the writ petition. In appeal to , HELD (Per , , and .) : On general principles of res judicata, the decision of on a writ petition under Art. 226 of the Constitution, on the merits, on a matter, after full contest, will operate as res judicata in a subsequent regular suit between the same parties with respect to the same matter. [574 E-F] The provisions of s. 11, Civil Procedure Code, 1908, are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit and, on the general principle of res judicata, any previous decision on a matter in controversy decided after full contest or after affording fair opportunity to the parties to prove their case by a court competent to decide it, will operate as res judicata in a subsequent regular suit. It is not necessary that the court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter. The nature of the former proceeding is immaterial. There is, therefore, no good reason to preclude such decisions on matters in controversy in writ proceedings under Arts. 226 or 32 from operating as res judicata in subsequent regular suits on the same matters in controversy, between the same parties, and thus to give limited effect to the principle of finality of decisions after full contest [573 B-E] Case law reviewed. Per , J. (dissenting) : The decision given by in the writ petition would not preclude the court, before which the suit was filed, from deciding the same question an merits in the suit. [576 F] This view, while it does not make s. 11 of the Code an unnecessary provision, does not lead to any practical difficulties, for, the decision of on a question of law will be binding as an authority on Subordinate Courts and its decision on a question of fact will rarely be differed from by the said courts. [576 E-F] Case law considered. 548 JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal No. 670 of 1963. Appeal by special leave from the judgment and decree dated March 31, 1958 of in of 1957. ", " and for the appellant. and , for the respondent. The Judgment of , , and , JJ. was delivered by , J. delivered a dissenting Opinion. , J. This appeal, by special leave, raises the question whether a decision of on merits on a certain matter after contest in a writ petition under Art. 226 of the Constitution operates as res judicata in a regular suit with respect to the same matter between the same parties. ", "The facts leading to the appeal are these. The appellant stood surety for a number of contractors who had taken contracts in 1947 for felling timber trees and removing timber in various forests in the erstwhile of Baria. The contracts were taken as a result of auctions which took place under the 'Conditions of Auction Sale of Forests in the Baria in the Samvat year 2002' corresponding to 1945-46 A.D., though in the plaint these conditions were referred to as Forest Auction Rules. On April 7, 1948, the appellant presented an application to the Baria stating therein that certain brokers owed money to the various contractors mentioned in the application and praying that they be restrained to pay the amount due to the contractors until further orders and that those brokers and contractors be also restrained from directly removing the contractors' jungle goods stored in the godowns at Piplod, Baria and Limkheda without the permission of . It was further mentioned in the application that if those contractors would arrive at an arrangement with him and carry out the vahivat, be would do the needful in that behalf. On this application, it appears, issued notices to the contractors stating therein that the surety, i.e., the appellant, had moved, under cl. 8 of the Conditions of the Auction Sale of jungle goods for attachment of their goods that be lying in the godowns at Baria, Piplod and Limkheda in the and the debts or other movable or immovable property belonging to them and for delivering the same to him and directed the contractors not to sell, mortgage, gift away or otherwise dispose of whatever movable or immovable property they had in the without the permission of the . ", "Subsequently, the State of Baria merged with the State of Bombay on June 10, 1948. Thereafter, the contractors were allowed by the to remove the materials on certain conditions. ", "The appellant presented a writ petition under Art. 226 of the Constitution to of Bombay. That petition is not printed in the appeal record. It was Civil Application No. 261 of 1952. It, along with two other applications, C.As. Nos. 260 and 376 of 1952, was disposed of by a common judgment in C.A. 260 of 1952 which is Exhibit P. 194. The parties agree that what was alleged and what was prayed for by the appellant in his petition could be gathered from the order Exhibit P. 194. The reply filed by the parties in that petition is Exhibit P. 196 and gives the case of the opposite party with respect to the allegations of the appellant in his petition. It however appears from the order of on that writ petition that the reliefs claimed were a direction to the respondents i.e., the State of Bombay and the of Baria Taluka to raise the attachment levied' on Municipal Nos. 728 and 642 of Deogad Baria, the issue of a writ of mandamus or directions under Art. 226 of the Constitution prohibiting them from selling those Municipal numbers and: from proceeding with the auction sale of properties on February ", "15. 1952 or on any other date. The appellant had alleged in that petition that the attached properties of the contractors were allowed to be sold by the contractors without the knowledge and consent of the appellant, that the sale was unauthorised and contrary to the terms of the attachment levied by the and that therefore it bad put an end to the liability of the appellants under their surety bonds. ", "It was urged for the appellant at the hearing of that petition that since the State allowed the contractors to sell their own properties the appellant had been discharged from his suretyship in respect of the said contractors and that the State could no longer claim to recover from him the balance due from the said contractors. The writ application was presented because, in default of the contracts to pay the balance amount due from them the Forest Officers of had moved the Revenue Officers to recover the said amount from the appellant who was the surety as an arrear of land revenue. The revenue authorities took steps to attach the immovable properties of the appellant and that led the appellant to present that petition. ", "550 ", "The contentions for the State of Bombay and the in the writ proceedings were : ", "1.The petition was misconceived as not maintainable and there was no case for the issue of a writ of mandamus because the proper course for the appellant was to redress his so called grievance by proceeding according to the ordinary law through . ", "2.There were no Baria State Forest Auction Rules. What laid down were the conditions of such auction sales and the appellant's reference to those conditions as rules was not correct. ", "3.The contractors had to furnish a surety who also had to execute a separate and independent agreement with the in the Form approved by it. The appellant stood surety for the contractors and executed the necessary agreements. ", "4.The said agreements stipulated three important conditions : (i) that the surety will pay the installment amount as stipulated; ", "(ii) that if the instalments were not paid on due dates, he will pay interest at one pie per rupee per day and (iii) that if he fails to pay the instalment amounts and the interest, the will be at liberty to recover the same from any of his properties and from his successors and assignees. ", "5.Condition No. 8 of the conditions for auction sales of forests was \"So long as the contractor has not paid the deposit or the confirmed sale price in full into the or to the , the shall, at any time present an application to the Officer for the recovery of an amount required to discharge his liability in connection with the confirmed sale price or of the amount paid by him without filing a suit for the same in a civil Court. In that case the property, effects and debts of the contractor that may be within the territory of the shall, as in the case of land revenue, be attached and auctioned at the cost and risk of the contractor and out of the sale proceeds realised at the auction, the amount due to the surety or an amount equivalent to the amount required to discharge his liability shall be paid to the .\" ", " ", "6.The appellant had not applied for attachment and sale of all the properties and outstandings of the contractors but had requested the to see that the brokers did not pay their dues to the contractors that the materials in the depots were not directly disposed of by the contractors and that the contractors carried on the business after settling with the petitioner. ", "7.The issued the necessary injunction orders of attachment, even though the appellant's request dated April 7, was not at all consistent with the provisions of sale condition No. 8. ", "8.In order to obviate the complete hold up of the timber trade, a system was devised whereby the contractors were allowed to dispose of the stock of timber, if the sureties consented to its removal and the contractors guaranteed to pay the price realised to the sureties concerned. ", "9.According to the record, the appellant had requested the to release the goods of certain contractors by his letters dated May 19, and 22, of 1948. This scheme adopted by the of Baria was solely motivated in view of the inevitable delay on account of the sureties first realising the amount and then depositing the amount in the Government treasury and the appellant was aware of that slight modification in the procedure. ", "10.At a meeting convened by , Panchmahals, Godhra, on August 1, 1948, the appellant was present and it was decided that the contractors be permitted to remove the material on payment of the price of the materials sold. ", "11. It was denied that as a result of the alleged action of the Forest Officers, the petitioner's security was considerably disminished and the eventual remedy of the petitioner against the contractors was very much impaired and the petitioner was discharged from his suretyship in respect of the said contracts. ", " dismissed the writ petition on July 22, 1952 holding that there was no substance in the contention that the petitioners had been discharged from their liability as sureties. The sole basis on which the contention was raised was that the contractors were permitted by the to sell their properties which were under attachment contrary to the terms of the attachment, in view of the sales being held without the knowledge and consent of the appellant. held that it was a wrong assumption of the appellant that the attached goods were not to be sold without his knowledge and consent. The prayer made by the appellant in his application dated April 7, 1948 did not include a prayer to the effect that the attached goods be not sold without his knowledge and consent. therefore held that the plea that the sales absolved the appellant from his liability as surety could not be accepted. We are no more concerned with the other point raised by the writ petition to the effect that the revenue authorities were not entitled to recover the amount due from the appellant under the summary procedure prescribed by the Land Revenue Code. did not accept this contention. ", "On August 29, 1952, the appellant instituted the suit which has given rise to this appeal. It was alleged that the Baria State had its own laws and rules and regulations, that the contractors of that State were bound to act according to them, that the Baria State had rules known as Forest Auction Rules for the auction of timber of the forests and auctions were held according to those rules and that the people acted on the understanding that the auctions and the surety bonds were in pursuance of the said Rules. Auctions were held in September-October 1947. The appellant stood surety with respect to the 1 1 contracts mentioned in para 2 of the plaint. The alleged rude No. 8 (condition No. 8 of the Forest Auction Conditions) was quoted in the plaint. The appellant executed all the surety bonds on the understanding that the Baria State Forest Auction Rules were the basis of the auction sales and that the surety bonds were in accordance with those rules. Due to certain reasons mentioned in para 5 of the plaint, the appellant. on or about April 13, 1948, applied to the Baria State praying for the assets and properties of the contractors to be taken in attachment and sold and for facilities being made available to him to fulfill his liabilities under the surety bonds. The Baria State authorities attached the assets and properties of the Contractors as prayed. It may be mentioned here that in his deposition the appellant admitted the application, Exhibit 195, dated April 7, 1948 to be the application be had presented for the aforesaid purpose. It was further alleged in the plaint that subsequent to the merger of the Baria State with the Bombay State on October 6, 1948, , without asking the plaintiff or without his consent, allowed the said contractors to remove and sell their respective teak and sundry goods which were taken in attachment and thus behaving in contravention of the attachment made in his interest and put an end to his security and that according to law the plaintiff thus became discharged of liability as surety for the said contractors. Another reason for his alleged discharge from liability was alleged to be that even fresh sureties had been obtained from some contractors. It was also mentioned in the plaint that the appellant had to make a petition to in order to prevent his property from being sold and that he had been informed that the said petition had been dismissed on the ground that he could lawfully get his reliefs in . ", "On the above facts the appellant prayed inter alia as follows \"1. It may be declared that have become is charged from all liability as surety for the contractors mentioned in para 2 of this plaint and a decree may be passed against the defendant No. 2 and defendant No. 1 herein and their servants, officers and agents, in the form of a permanent injunction prohibiting them for all times from attaching my property, selling or causing it to be sold. ", "2.A permanent injunction may be issued to the defendant No. 1 herein and their servants, agents and officers that these defendants, under the facts mentioned in this plaint shall not, unless in execution of a decree in their favour obtained from a proper and authorised court, attach any property of this plaintiff and sell it in the revenue manner or cause it to be sold.\" ", "The State of Bombay contested the suit mostly repeating what they had urged in their reply affidavit filed in the proceedings on the writ application. It did not admit that the writ application filed by the plaintiff was dismissed by because another remedy was open and stated that his contentions were not upheld. ", "Several issues were framed. Issue No. 8A was \"Is the suit barred by res judicata in view of judgment in Civil Applications No. 260, 261 and 376 of 1952 ?\" ", " held on this issue that judgment operated as res judicata in the suit. It recorded its findings on the other issues as well, but we are not concerned with those findings. It dismissed the suit. ", "On appeal by the appellant, the District Judge agreed with that the suit was barred by res judicata in view of the judgment of on the writ petition. He accordingly dismissed the appeal. He also recorded his findings on the other points urged before him. On second appeal, the learned Single Judge of agreed with the courts below that the decision of on the question whether the plaintiff was absolved from liability under the surety agreement must be regarded as res judicata and could not be opened in the suit. He further considered the question whether in the circumstances of the case the appellant was entitled to the injunction prayed for and held that it was open to the appellant to maintain the suit for the determination of the amount due from him as that had not been considered and determined in the writ petition. He therefore allowed the appeal, set aside the order of the District Judge and passed a decree in favour of the appellant declaring that he was liable to pay the amount due under the surety agreement less the amount paid by the contractor and such amount as had been recovered by the by sale of the property of the contractor attached under condition No. 8. He further ordered issue of an injunction restraining the from enforcing the liability for the amount in excess of the amount declared to be due from the appellant. ", "The appellant's application for leave to file an appeal under cl. 15 of the Letters Patent of was rejected. Thereafter, the appellant filed this appeal after obtaining special leave from this Court. Mr. , for the appellant, has urged two points. The first is that a decision in a writ application under Art. 226 for the issue of a writ of mandamus does not operate as res judicata in a regular suit subsequently filed for a declaration of the plaintiff's rights and for the issue of an order of injunction against the defendant. The other is that the doctrine of constructive res judicata cannot be applied when the dispute was first decided in a writ petition and is to be later decided in a regular suit. It has been said that it would be very dangerous to hold that the decision in the writ application operates as res judicata in the regular suit even if identical reliefs on identical grounds were prayed for in a writ petition, with those prayed for in the later regular suit. ", "555 ", "The first question is really the main question for decision in this appeal as it is not a case for the application of the principle of constructive res judicata. It is clear from what has been stated above that the appellant prayed for the issue of a writ of mandamus and a writ of prohibition in the writ application on the ground that his liability as surety for the several contractors stood discharged on account of the , without the knowledge and consent of the appellant, allowing the contractors to dispose of the goods which had been attached on the application of the appellant, an application which he could present in view of Condition 8 of the Conditions of Auction Sale. The reliefs sought in the plaint are the same and are sought on the same grounds. had to determine in the writ petition whether the appellant's liability as surety stood discharged in view of what he had alleged. The same, point has to be directly and substantially decided in the suit also. The orders to be passed if the appellant's contention is upheld would be the same as that which would have been passed if his contention had been accepted in the writ petition. In both cases, on both occasions, the had first to hold that his liability as a surety stood discharged, and that as a consequence of such a finding, it had, in the writ proceedings, to issue a writ of mandamus and a writ of prohibition as prayed for in the writ peti- tion, directing the of Bombay not to enforce any liability which the appellant had undertaken under the agreements executed as a surety and not to proceed with the realisation of any amount the alleged to be due from him and in the suit to pass a decree prohibiting the defendants by a permanent injunction for all time from attaching his property selling or causing it to be sold and also a permanent injunction to the of Bombay restraining them from attaching and selling any proper of the appellant unless a proper decree is obtained from the in the manner provided for the recovery of land revenue. ", "It is urged for the appellant that in the writ petition the contention about the appellant's liability as a surety having come to an end was based on the terms of the contract, which was based on the conditions of auction sales, between the appellant and the State of Baria while in the present suit the contention with respect to the cession of his liability as a surety was based on the auction rules. The distinction sought to be made has no substance. It is denied in the reply affidavit filed on behalf of the respondent in the writ petition that there were any Baria State Forest Auction Rules. We have not been referred to any rules, In fact, when we asked for the rules, we were provided by learned counsel for the appellant with a booklet by the name 'Conditions for the Auction Sale of Forests'. Further, the order of on the 'writ petition mentions in the early part of the order : ", "\"It would appear that the Baria State had auctioned the teak wood trees ... on the terms and conditions contained in the said Forest Auction Rules.\" ", "It may be said that these conditions for the auction sale of forests have been referred to sometimes as rules, probably in view of their binding nature. ", "It cannot therefore be disputed that if the decision which had been given in a writ petition had been given in a regular suit that decision would have operated as res judicata in the later suit. The question which arises for consideration is whether such a decision in a writ petition can also bar a later suit on account of its operating as res judicata. ", "Before we deal with the question, we may dispose of the short points urged for the appellant. It is urged that if a decision in a writ application on merits be held to operate as res judicata in a regular suit, the provisions of 0.2, r. 2 C.P.C. would also be applicable to the institution of the subsequent suit with respect to such part of the cause of action for which no relief was sought in the writ petition. The contention is not sound as the provisions of r. 2, 0.2 apply only to suits. Sub-r. (1) requires that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any . Sub-rule (2) then provides that where a plaintiff omits to sue in respect of or intentionally relinquishes any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. By its very language, these provisions do not apply to the contents of a writ petition and consequently do not apply to the contents of a subsequent suit. Such a view was indicated by this in (l) when it was said at p. 324 : ' \"The bar of 0.2, r. 2 of the Civil Procedure Code on which the High apparently relied may not apply to a petition for a high prerogative writ under Art. 226 of the Constitution, but the High having disallowed the claim of the appellant for salary prior to the date of the suit, we do not think that we would be justified in (1) Supp. 1 S.C.R. 315. ", "557 ", "interfering with the exercise of its discretion by .\" ", "The contention that a decision on a writ petition even on merits should not operate as res judicata as it is discretionary for the Court to pass any order it considers fit on a writ petition and not to decide it after considering all the points urged by the parties, was negatived in v. The State of U.P.(1) With regard to the point that the issue of a writ by was discretionary as it may refuse to exercise its jurisdiction under Art. 226 as for instance when the party applying for the writ was guilty of laches but could not refuse to issue the appropriate writ once it was shown that a fundamental right had been infringed, it was said, at p. 589 : ", "\" and that may be said to constitute a difference in the right conferred on a citizen to move under Art. 226 as distinct from the right conferred on him to move this Court. This difference must inevitably mean that if has refused to exercise its discretion on the ground of laches or on the ground that the party has an efficacious alternative remedy available to him then of course the decision of cannot generally be pleaded in support of the bar of res judicata. If, however, the matter has been considered on the merits and has dismissed the petition for a writ on the ground that no fundamental right is proved or its breach is either not established or is shown to be constitutionally justified there is no reason why the said decision should not be treated as a bar against the competence of a subsequent petition filed by the same party on the same facts and for the same reliefs under Art. 32.\" ", "In this connection, reference may be made to what was said, about the contention that a previous judgment was not to operate as res judicata against a party as it was based on certain statements recorded before that party was impleaded, in v. ) \"It was suggested by Mr. that the former judgment ought not to be binding, because certain witnesses having been examined before the present Appellant intervened in the suit, he was refused the opportunity of cross- examining them. Their Lordships think that (1)[1962]1 S.C.R. 574. ", "(2) L.R. 2 I.A. 283, 286 Sup.C.1./65 2 such an objection is no answer to the defence arising from the former judgment. If there had been any miscarriage of that kind, the matter was one for appeal in that suit. The objection does not appear to have been raised in the appeals which were successively made in that suit to the Civil Judge and to ; but whether it was so raised or not, their Lordships think that that cannot affect the operation of the final judgment, which must be taken to have been rightly given.\" Another reason urged in support of the contention is that the petitioner in a writ petition had no right to apply for the issue of the appropriate writ and it is a matter of discretion for to entertain any application or to grant it and that a decision in one proceeding can operate as res judicata in a subsequent proceeding only when the party initiating the first proceeding had a right to initiate both the proceedings when the nature of both the proceedings be the same. This is the same contention as the earlier one, put in a different form, and does not merit further consideration. ", "It is further submitted for the appellant that a writ of mandamus, according to its nature, is to be issued mainly to compel the performance by a public servant of his duty of a public nature, while in a suit the plaintiff prays for the enforcement of his personal rights. The declaration of a personal right is not an essential characteristic in the issue of a writ of mandamus. The difference in the nature of the two proceedings is immaterial if the matter decided inter parties in one proceeding is the same which is to be determined in the subsequent proceedings and the parties to the suit were also parties to the writ petition. It has also been contended, and support is sought from the case reported as L. Janakirama lyer v. ) that the general principles of res judicata are not to be applied in considering whether a decision in a previous suit bars a later suit on the ground of res judicata. ", "On the other hand, it is contended for the respondent that the doctrine of res judicata is not confined to the provisions of S. II C.P.C. but is of a general application on grounds of public policy, that the fact that the proceedings on a writ petition are conducted summarily is no reason to reduce the value of the decision arrived at in those proceedings especially when a solemn decision is given after affording an opportunity to the parties to put before the (1) [1962] Supp. 1 S.C.R. 206. ", " ", " all the relevant matters and after fully considering the merits of the matter in controversy and that it would be really dangerous if it be held that a decision so arrived at in proceedings in a writ petition does not bar a subsequent suit for the decision of the same matter in controversy. It is pertinently pointed out that if the writ application presented by the appellant had been allowed by on a finding of fact that the liability of the appel- lant as a surety stood discharged and a writ of prohibition had been issued against the as prayed for by the appellant in the writ proceedings, the could not have sued for a declaration that these orders of were bad and that a decree be passed in its favour declaring that the appellant's liability as the surety still continued and that the was free to take any action open to it under law for the recovery of the amount due from him. It is not necessary to consider in any detail whether all orders made on a writ petition would bar a subsequent suit. We would limit the consideration of the contentions raised before us to two main points : whether S. 11 C.P.C. is exhaustive with respect to the application of the principle of res judicata in a suit and whether in a subsequent suit general principles of res judicata can bar the consideration of matters directly in issue and identical with. those which had been earlier and after full contest, decided on merits by a competent in any other proceeding including proceedings on a writ petition. ", "Before discussing the law of res judicata as laid down in the Code of Civil Procedure, we may refer to the opinion of the Judges expressed in 1776 in the Duches of Kingston's Case(1) to which reference has been invariably made in most of the cases to be considered by us. It was said in that case : ", "\"From the variety of cases relative to judgments being given in evidence in civil suits, these two deductions seem to follow as generally true : first that judgment of a of concurrent jurisdiction, directly upon the point. is as a plea, a bar, or as evidence conclusive, between the same parties, upon the same matter, directly in question in another ; secondly that the judgment of a of exclusive jurisdiction, directly upon the point, is, in like manner, conclusive upon the same matter, t between the same parties, coming incidentally in question in another , for a different purpose. But neither the judgment of a concurrent or exclusive jurisdiction is (1) 2 smith's L.C. 13th edn. 644, 645. ", "560 ", "evidence of any matter which came collaterally in question, though within their jurisdiction, nor of any matter incidentally cognizable, nor of any matter to be inferred by argument from the judgment.\" ", "It is to be noticed that the opinion does not take into account whether the earlier judgment was in a suit or any other proceeding and whether it was used as res judicata in another suit or proceeding. The emphasis is that the judgment be of a and that it is relied upon as res judicata in another . Of course, the essential conditions that the judgment be directly upon the same point which is for determination in the subsequent suit and be between the same parties are also to be satisfied. It is obvious that the judgment of a of exclusive jurisdiction is to be treated as res judicata upon the same matter in another which will not be a having jurisdiction over the matter. ", "It would be helpful to consider how the various Codes of Civil Procedure have dealt with the question of the second suit being barred on account of an earlier decision by a Court. The first Code of Civil Procedure was Act VIII of 1859. Its section 1 gave jurisdiction to the civil courts over all suits of a civil nature with the exception of those of which cognizance was barred by any Act of Parliament or by any Regulation of the Codes of Bengal, Madras and Bombay or by any Act of the Governor General of India in Council. Since then Civil Courts had jurisdiction to try all suits of a civil nature except those whose cognizance was barred by any enactment in force. Section 2 provided that would not take cognizance of any suit brought on a cause of action which had been heard and determined by a Court of competent jurisdiction in a former suit between the same parties or between parties under whom they claimed. The bar to the second suit was based on the identity of it, cause of action with that of the earlier suit which had been heard and determined by a court of competent jurisdiction between the same parties. ", "The language of s. 2 of the Code of 1859 seems to be in pursuance of the principle recognised in common law that a cause of action on which a decree has been based merges in the decree and ceases to be a cause of action for any future suit. said in King v. (1) at p. 2 1 0 of the English Reports : ", "\"If there be a breach of contract, or wrong done, or any other cause of action by one against another, and judgment be recovered in a court of record, the judgment (1) 153 E.R. Exch. 206,13 M & W 494. ", "561 ", "is a bar to the original cause of action, because it is thereby reduced to a certainty, and the object of the suit attained, so far as it can be at that stage; and it would be useless and vexatious to subject the defendant to another suit for the purpose of obtaining the same result. Hence the legal maxim, 'transit in rem judicatam the cause of action is changed into matter of record, which is of a higher nature, and the inferior remedy is merged in the higher. This appears to be equally true where there is but one c ause of action, whether it be against a single person or many. The judgment of a court of record changes the nature of that cause of action, and prevents its being the subject matter of another suit, and the cause of action, being single, cannot afterwards be divided into two.\" ", "This principle had the approval of in v. Hamilton.(1) It may be noticed that, in special cases, this principle is applied when even parties to the subsequent suit are not. the same who were parties in the first suit. The finality of the judgement is based on the fact that the cause of action had merged in a decree and therefore no other action can be based on the same cause of action. ", "In Khugawlee Sing v. Hossein Bux Khan(1) , after quoting the opinion in Duchess of Kingston's Case(3) said : ", "\"There is nothing technical or peculiar to the law of England in the rule as so stated. It was recognised by the civil law, and it is perfectly consistent with the second section of the Code of Procedure under which this case was tried.... \" ", "In v. ) held that the term 'cause of action' in s. 2 of Act VIII of 1859 be construed with reference rather to the substance than to the form of action, and that even if such an interpretation of the expression be not correct, the provisions of S. 2 of the Code would by no means prevent the operation of the general law relating to res judicata and observed at p. 218 \"This law has been laid down by a series of cases in this country with which the profession is familiar, and has probably never been betterlaid down than in a case which (1) (1879) 4 A.C. 504. (2) (1871) 7 Beng. ", "L.R. 673, 678. ", "(3) Smith's L.C. 13th edn. 644.(4) (1872-73) I.A. Supp. 212. ", "562 ", "was referred to in the 3rd volume of (Gregory v. Molesworth), in which Lord held that where a question was necessarily decided in effect though not in express terms between parties to the suit, they. could not raise the same question as between themselves in any other suit in any other form; and that decision has been followed by a long course of decisions, the greater part of which will be found noticed in the very able notes of Mr. to the case of the Duchess of .\" ", "In Case(1) again stated that the expression 'cause of action' in s. 2 of Act VIII of 1859 could not be taken in its literal and most restricted sense, and observed at p. 285 : ", "\"But however that may be, by the general law where a material issue has been tried and determined between the same parties in a proper suit, and in a competent , as to the status of one of them in relation to the other, it cannot, in their opinion, be again tried in another suit between them.\" ", "It appears that s. 13 of the Code of Civil Procedure of 1877 was enacted in view of what was said about the general law of res judicata in Case. (1) That section reads \"No shall try any suit or issue in which the matter directly and substantially in issue has been heard and finally decided by a of competent jurisdiction, in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title.\" ", "In v. ) had to construe s. 13 of the 1877-Code (Act X of 1877). It referred to S. 2 of Act VIII of 1859 and then observed at p. 202 : ", "\"It is clear that this section would not have applied to the present case, the causes of action in the two suits the non-payment of interest in one and the non-payment of principal in the other being different. In fact, when the first suit was brought the cause of action in the second had not arisen. But independently of this provision in the Code of Procedure, the Courts in India have adopted the rule laid down in the Duchess of Kingston's (1) L.R. 21. A. 283. ", "(2) (1882) L.R. 9 I.A. 197. ", "563 ", "Case(1), and have applied it in a great number of cases. It was recognized as the law in India by in v. (2) . . . . \" ", "The expression 'Court of competent jurisdiction' was construed to mean 'a Court which had jurisdiction over the matter in the subsequent suit in which the decision was used as conclusive' or, in other words 'a Court of concurrent jurisdiction. In considering this matter, referred to the fact that in this country there were Courts of various grades with different pecuniary limits of jurisdiction, that a suit had to be instituted in the Court of the lowest grade competent to try it and that it would be improper if a judgment of an inferior Court was to operate as res judicata in a suit in a superior Court, and observed at p. 203 \"By taking concurrent jurisdiction to mean concurrent as regards the pecuniary limit as well as the subject matter, this evil or inconvenience is avoided; and although it may be desirable to put an end to litigation, the inefficiency of many of makes it advisable not to be too stringent in preventing a litigant from proving the truth of his case. It appears to their Lordships that if this case had arisen before the passing of Act X of 1877, in India would have rightly held that the decision of the Extra Assistant Commissioner in the first suit was not conclusive as to the amount of the principal sum due on the bond.\" and, after quoting s. 13, said : ", "\"The intention seems to have been to embody in the Code of Procedure, by sects. 12 and 13, the law then in force in India, instead of the imperfect provision in sect. 2 of Act VIII of 1859. And, as the words of the section do not clearly shew an intention to alter the law, their Lordships do not think it right to put a construction upon them which would cause an alteration.\" ", "This shows that the general law of res judicata was applied to suits in this country despite a specific provision about it in S. 2 of Act VIII of 1859. ", "The scope of the bar was extended by the Code of Civil Procedure, 1882 (Act XIV of 1882). Its s. 13 dealt with res judicata. ", "(1) 2 's L.C. 13th edn. 644. ", "(2) (1871) 7 Beng. L.R. 673. ", " ", "Section II of the present Code of Civil Procedure (Act V of 1908) deals with res judicata and is in these terms : ", "\"No shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a competent to try such subsequent suit or the suit in which such issue has been subse- quently raised, and has been heard and finally decided by such .\" ", "The above quoted main part of s. 11 is identically the same as the corresponding part of S. 13 of the Code of 1882. Section 11, by its terms, can be applicable only to a subsequent suit when the same matter in controversy had been heard and decided in an earlier suit by a competent to try the subsequent suit. There is nothing, however, in its language to exclude the application of the general principles of res judicata to suits. ", "The general principle of res judicata, has been applied to suits even though the decision on the same matter in controversy had been previously given by a competent Court in proceedings which were not suits under the Code of Civil Procedure. The case law on the subject will be discussed later. It is urged that there seems to be no good principle behind applying the general principles of res judicata to suits in circumstances which do not bring the previous decision within the language of s. 11, and that the legislature's restricting the application of the general principles of res judicata to the circumstances mentioned in s. 11 must be deemed to indicate that the general principle of res judicata be not applied to bar a subsequent suit if the earlier decision of the same controversy between the same parties had been arrived at in proceedings other than suits and in which the entire procedure provided for the decision of the dispute in a regular suit might not have been followed. It appears to us that the reason for the specific provisions of S. 11 is not that the legislature intended to bar the application of the general principles of res judicata to suits when the previous decision is arrived at in proceedings other than suits. The legislature was providing in the Code of Civil Procedure for the trial of suits over which was given jurisdiction under the provisions of the Code. The preamble of the Code of 1908 reads \"Whereas it is expedient to consolidate and amend the laws relating to the procedure of ; It is hereby enacted as follows :-\" ", "The Code was dealing with procedure of the civil s only and had therefore not to consider what would be the effect on the trial of suits in view of the provisions of other enactments or of general principles of res judicata or of any other kind. It had to restrict its provision about res judicata to the effect of decisions in a civil suit on a subsequent civil suit and therefore enacted s. 11 in the form in which we find it. It made one of the condition-, for the application of a previous decision to operate as res judicata to be that the previous decision is made not only by a competent to make it but by a which be competent to try the subsequent suit. This condition must have been considered necessary in view of the observations of in Case(1) on account of the hierachy of s under the various Acts constituting s of civil judicature and it could have been felt that a decision by a which is not competent to decide the subsequent suit be not treated of a binding nature. Such an exceptional procedure seems to have been provided as a matter of precaution as the not competent to try the subsequent suit must necessarily be a of inferior jurisdiction and therefore more liable to go wrong. Whatever the reason may be, the provisions of s. 1 1 will govern a previous decision in a suit barring a subsequent suit with respect to the same matter in controversy and general principles of res judicata in such particular circumstances will neither be available to bar a subsequent suit nor will be needed. It is in such context that the remarks of this in Case(2) at p. 224 are to be considered. In that case, the decision in a previous suit could not operate as res judicata in accordance with the provisions of s. 11 of the Code, because the parties in the two suits could not be said to be the same parties or parties who claimed through one another. It was then said : ", "\"Where s. 11 is thus inapplicable it would not be permissible to rely upon the general doctrine of res judicata. We are dealing with a suit and the only ground on which res judicata can be urged against such a suit can be the provisions of s. 11 and no other.\" ", "The observations are to be read in the context in which they are made, the context being that the question of res judicata was (1) (1882) L.R. 9 I.A. 197. (2) [1962] Supp. 1 S.C.R. 206. ", "566 ", "being considered in connection with the decision in a previous suit and the parties in the two suits being not the same. In fact, general principles of res judicata also require that the earlier decision be between the same parties. A decision not inter parties cannot, even on general principles of res judicata, operate as res judicata in a subsequent suit. ", "We may now refer to some of the decided cases having a bearing on the applicability of the general principles of res judicata to suits, when the previous decision is not in a suit but in other proceedings. ", " (1) the question was whether a previous order in an administration suit could operate as res judicata with respect to matters which had been decided in the subsequent administration suit instituted for decision of certain matters left open in the previous suit. It was said at p. 193 : ", "\"The question as to the perpetuity had been definitely and properly before him on the former hearing, and was, in fact, decided without any reservation, as is made plain by the terms of the judgment itself, which show that the determination of the dispute as to the perpetuity was the foundation of the whole judgment ... It is not, and indeed it cannot be, disputed that, if that be the case, the matter has been finally settled between the parties, for the mere fact that the decision was given in an administration suit does not affect its finality : see v. (22 Ch. D. 182). , however, took a different view, and regarding the question as still open decided it against the appellant, but the error in their judgment is due to the fact that they regarded the question as completely governed by s. 11 of the Code of Civil Procedure.\" ", "and then reference was made to what has been said in v. ) : ", "\"The binding force of such a judgment depends not upon sect. 13, Act X of 1877, but upon general principles of law. If it were not binding there would be no end to litigation.\" (3) the question arose about the decision about the title to compensation under (1) L.R. 48 I.A. 187. ", "(3) L.R. 49 I.A. 129. ", "(2) L.R. 11 I.A. 37, 41. ", "567 ", "proceedings in operating as res judicata in a subsequent suit with respect to the rights of the parties. It was said at p. 136 : ", "\"When once the award as to the amount has become final, all questions as to fixing of compensation are then at an end; the duty of the Collector in case of dispute as to the relative rights of the persons together entitled to the money is to place the money under the control of the , and the parties then can proceed to litigate in the ordinary way to determine what their right and title to the property may be. That is exactly what occurred in the present case. How the proceedings were commenced is a matter that is not material provided that they were instituted in the manner that gave the jurisdiction, for they ended in a decree made by the High and appealable to this Board.\" ", "The Court then referred to what was said in v. (1) and in 's Case(1) and said that the principle which prevents the same case being twice litigated is of general application, and is not limited by the specific words of the Code in this respect. (3) held that a decision in contentious proceedings under the Probate and Administration Act , 1881, was binding in a subsequent suit upon the parties to the earlier suit, including a party whose name had been omitted from the formal order made and reiterated that the terms of S. 11 were not to be regarded as exhaustive in regard to what decisions could operate as res judicata. ", "In Mst. v. Mst. (4 ) a decision about title in Land Acquisition Act proceedings was held to be res judicata in a subsequent suit about the title between the same parties. ", "These decisions of well lay down that the provisions of s. 11 C.P.C. are not exhaustive with respect to an earlier decision in a proceeding operating as res judicata in a subsequent suit with respect to the same matter inter parties, and' do not preclude the application to regular suits of the general principles of res judicata based on public policy and applied from ancient times. (1) (1909) A.C. 615, 623. ", "(3) L. R. 57 I.A. 24. ", "(2) L.R. 48 I.A. 187. ", "(4) L.R. 66 I.A. 145. ", "568 ", "In v. ) it was said \"But in view of the arguments addressed to them their Lordships desire to emphasize that the rule of res judicata, while founded on ancient precedent, is dictated by a wisdom which is for all time. 'It hath been well said,' declared Lord , 'interest reipublicae ut sit finis litium, otherwise great oppression might be done under colour and pretence of law' : 6 , 9a. Though the rule of the Code may be traced to an English source, it embodies a doctrine in no way opposed to the spirit of the law as expounded by the Hindu commentators. and Nilakantha include the plea of a former judgment among those allowed by law, each citing for this purpose the text of , who describes the plea thus : \"If a person though defeated at law sue again he should be answered, 'You were defeated formerly. This is called the plea of former judgment.\" [See the Mitakshara (Vyavahara), bk. II, ch. 1 edited by , p. 14, and the Mayuka, ch. 1., s. 1 , p. 11 of 's edition]. And so the application of the rule by the in India should be influenced by no technical considerations of form, but by matter of substance within the limits allowed by law.\" ", "This Court had to consider the question of the applicability of the general principles of res judicata in several cases and has repeatedly held that this principle is not based on a rule of technicality but is based on high public policy to bring about an end to litigation by giving finality to judgments inter parties and to save a litigant from harassment a second time. The principles laid down by have been generally accepted. (2) this Court approved of what was said by in 's Case(3); Case(4) and Mst. 's Case(5) and said at p. 166 \". . . and in these circumstances it has to be held that the question of title to the four anna share was necessarily and substantially involved in the land acquisition proceedings and was finally decided by a court having jurisdiction to try it and that decision thus operates as res judicata. . . ", "(1) L.R. 43 I.A.91, 98. ", "(2) [1953] S. C. R. 154. ", "(3) L.R. 48 I.A. 187. ", "(4) L.R. 49 I.A. 129. ", "(5) L.R. 66 I.A. 145. ", " ", " (1) the question arose for the first time about applying the principle of res judicata in writ applications under Art. 32 of the Constitution and this Court said at p. 103 : ", "\"This Court has laid it down in the case of (2) that the principle underlying res judicata is applicable in respect of a question which has been raised and decided after full contest, even though the first Tribunal which decided the matter may have no jurisdiction to try the subsequent suit and even though the subject- matter of the dispute was not exactly the same in the two proceedings. In that case the rule of res judicata was applied to litigation in land acquisition proceedings. In that case the general principles of law bearing on the rule of res judicata, and not the provisions of s. 1 1 of the Code of Civil Procedure, were applied to the case. The rule of res judicata is meant to give finality to a decision arrived at after due contest and after hearing the parties interested in the controversy.\" ", "This case made the decision in a former petition under Art. 32 of the Constitution res judicata in the subsequent petition under the same article with respect to the same matter. ", "In 's Case(3) this had again dealt with the question of the applicability of the principle of res judicata in writ proceedings. The matter was gone. through very exhaustively and the final conclusions are to be found at p. 592. We may summarise them thus : ", "1. If a petition under art. 226 is considered on the merits as a contested matter and is dismissed, the decision would continue to bind the parties unless it is otherwise modified or reversed by appeal or other appropriate proceedings permissible under the Constitution. ", "2. It would not be open to a party to ignore the said judgment and move this Court under art. 32 by an original petition made on the same facts and for obtaining the same or similar orders or writs. ", "3. If the petition under art. 226 in is dismissed not on the merits but because of the laches of the party applying for the writ or because it is held that (1) S.C.R. 96. ", "(2) [1953] S.C.R. 154. ", "(3) [1962] 1 S.C.R. 574. ", "570 ", "the party had an alternative remedy available to it, the dismissal of the writ petition would not constitute a bar to a subsequent petition under art. 32. ", "4. Such a dismissal may however constitute a bar to a subsequent application under art. 32 where and if the facts thus found by be themselves relevant even under art. 32. ", "5. If a writ petition is dismissed in limine and an order is pronounced in that behalf, whether or not the dismissal would constitute a bar would depend on the nature of the order. If the order is on the merits, it would be a bar. ", "6. If the petition is dismissed in limine without a speaking order, such dismissal cannot be treated as creating a bar of res judicata. ", "7. If the petition is dismissed as withdrawn, it cannot be a bar to a subsequent petition under art. 32 because, in such a case, there had been no decision on the merits by the . ", "In arriving at the above quoted conclusions the made certain observations which are helpful in determining the question in this case about the decision on a writ petition operating as res judicata in a subsequent regular suit. The basis for the rule is described thus at p. 582 : ", "\"But, is the rule of res judicata merely a technical rule or is it based on high public policy ? If the rule of res judicata itself embodies a principle of public policy which in turn is an essential part of the rule of law then the objection that the rule cannot be invoked where fundamental rights are in question may lose much of its validity. Now, the rule of res judicata as indicated in s. 11 of the Code of Civil Procedure has no doubt some technical aspects, for instance the rule of constructive res judicata may be said to be technical; but the basis on which the said rule rests is founded on considerations of public policy. It is in the interest of the public at large that a finality should attach to the binding decisions pronounced by Courts of competent jurisdiction, and it is also in the public interest that individuals should not be vexed twice over with the same kind of litigation.\" ", "571 ", "Again, it was said at p. 584 : ", "\"The binding character of judgments pronounced by courts of competent jurisdiction is itself an essential part of the rule of law, and the rule of law obviously is the basis of the administration of justice on which the Constitution lays so much emphasis.\" ", "Limitations to the applicability of this general rule of res judicata are indicated at P. 585 : ", "\"It is true that the general rule can be invoked only in cases where a dispute between the parties has been referred to a court of competent jurisdiction, there has been a contest between the parties before the court, a fair opportunity has been given to both of them to prove their case, and at the end the court has pronounced its judgment or decision. Such a decision pronounced by a court of competent jurisdiction is binding between the parties unless it is modified or reversed by adopting a procedure prescribed by the Constitution. In our opinion, therefore, the plea that the general rule of res judicata should not be allowed to be invoked cannot be sustained.\" ", "The also said earlier at p. 585 \"In other words, an original petition for a writ under Art. 32 cannot take the place of an appeal against the order passed by the High in the petition filed before it under Art. 226.\" ", "It can be said with equal force that a regular suit for the determination of the matter which had been decided on merits by or this on a writ petition cannot be given the status of a de facto appeal against the order of or of this . A solemn declaration and order by the in its extra-ordinary jurisdiction is not to be set at nought by a of ordinary jurisdiction whose decisions are subject to the appellate or revisional jurisdiction of that . ", "The contention that the remedies available to the petitioners to move under art. 226 and this under art. 32 are alternate remedies and so the adoption of one remedy cannot bar the adoption of the other, which was urged in the aforesaid case, was negatived, and it was observed at p. 591 \"In such a case the point to consider always would be what is the nature of the decision pronounced by a of res judicata altogether in dealing with writ petitions filed by citizens alleging the contravention of their fundamental rights. Considerations of public policy cannot be ignored in such cases, and the basic doctrine that judgments pronounced by this are binding and must be regarded as final between the parties in respect of matters covered by them, must receive due consideration.\" These remarks can apply with greater force when in a regular suit a party desires to obtain an order which may be at variance with the orders pronounced by in a writ petition on matters not concerning fundamental rights under the Constitution. ", "The appellant relies on the case reported as Smt. v. ) in support of its contention that a decision on a writ petition cannot operate as res judicata on the points in dispute between the parties in the civil suit. The decision was based on two grounds : (1) that the jurisdiction of under art. 226 and of under art. 32 is almost co-extensive, while the jurisdiction of under art. 226 and of the civil in a regular civil suit cannot be said to be almost co-extensive and (2) that in disposing of writs is not required to go into the detailed examination of facts while in regular civil suits facts can be examined meticulously. It was further held that the plaintiff can take such grounds in the civil suit which he could take in a writ petition. A decision of the in a writ petition can be res judicata only with respect to the matters which have been decided on merits by or by this . s do not usually enter into disputed questions of fact but there is no bar to their doing so if they feel disposed to enter into such facts and arrive at a conclusion with respect to them. We do not see why all the grounds which can be urged in support of or against a matter raised for decision in a writ petition cannot be urged in the proceedings on it. It is true that the jurisdiction of the civil and or this cannot be said to be Co-extensive, but it is plain that the civil , in the exercise of its jurisdiction, is subject to the appellate or revisional jurisdiction of and this . We do not consider the reasons for holding that a decision in a writ-petition cannot operate as res judicata in a subsequent regular suit to be sound' (1)(1963) 65 Punj. L.R. 945. ", "Sup./65-3 and are of opinion that the Punjab Case has been wrongly decided. ", "On the other hand, has held in (\") that a decision on merits in a writ petition would operate as res judicata in a subsequent suit. As a result of the above discussion, we are of opinion that the provisions of s. 11 C.P.C. are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit and that on the general principle of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a competent to decide it, will operate as res judicata in a subsequent regular suit. It is not necessary that the deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter. The nature of the former proceeding is immaterial. We do not see any good reason to preclude such decisions on matters in controversy in writ proceedings under arts. 226 or 32 of the Constitution from operating as res judicata in subsequent regular suits on the same matters in controversy between the same parties and thus to give limited effect to the principle ,of the finality of decisions after full contest. We therefore hold that on the general principle of res judicata, the decision of the High on a writ petition under art. 226 on the merits on a matter after contest will operate as res judicata in a subsequent regular suit between the same parties with respect to the same matter. ", "We may make it clear that it was not necessary, and we have not considered, whether the principles of constructive res judicata can be invoked by a party to the subsequent suit on the ground that a matter which might or ought to have been raised in the earlier proceeding was not so raised therein. We therefore dismiss this appeal with costs. J. I have persued the judgment prepared by my learned brother , J. I regret my inability to agree. I shall briefly give my reasons. ", ", J., has stated the facts fully in his judgment. I need not restate them. The few facts relevant to the question (1) A.I.R. 1960 Bom. 196. ", "575 ", "raised are these : The appellant filed a petition in under Art. 226 of the Constitution raising the question that he was discharged as surety, and negatived his contention. In the suit from which the present appeal arises he again raises the plea that he was discharged as surety : in other words, he seeks to reopen in the present suit the finding given by in the writ petition. The question is whether the appellant is barred by res judicata to raise the said question in the suit. ", "Section 11 of the Code of Civil Procedure deals with the doctrine of res judicata in the context of a suit. It says, inter alia, that no shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit. To invoke this doctrine, the section lays down many conditions. The most essential condition is that the matter in question should have been directly and substantially in issue in a former suit. The expression \"suit\" has not been defined in the Code, but S. 26 thereof says that every suit shall be instituted by the presentation of a plaint or in such other manner as may be prescribed. It is not argued that an application under Art. 226 of the Constitution is a suit within the meaning of s. 26 or S. 11 of the Code. It follows, and indeed it is not disputed, that s. 11 of the Code does not bar the appellant from raising the question of the discharge of his suretyship again in the present suit. But it is said that under the general principles of res judicata the would be barred to try his suit on the said issue. When the Code of Civil Procedure enacted s. 1 1 prescribing precisely when an earlier decision would be res judicata in a suit, it is not open to invoke the general principles of res judicata in the context of a subsequent suit, though the conditions laid down in the section were not satisfied, for otherwise the section would become nugatory : it would also introduce anomalies. A decision in a previous suit would not be res judicata in a subsequent suit unless the stringent conditions laid down in s. 11 of the Code were satisfied; whereas a decision in a proceeding which was not a suit would be res judicata whether or not the said conditions were complied with. If the fundamental requisites of res judicata were satisfied, a decision, if it fell under s. II of Code, would be res judicata in a subsequent suit; and even if it did not fall thereunder, it would equally be res judicata. That could not have been the intention of the . ", "576 ", "The cases cited at the do not compel me to accept the construction which would lead to that result. The decisions of in (1) and Mst. v. Mst. Ram Kali(2) and of this Court in (3) may be explained on the ground that the proceeding under s. 18 of the Land Acquisition Act in wherein the title of the claimants would be put in issue were in substance a suit. The decision of this Court in (4 ) , v. The State of U.P.(5), , Chhindwara(6) and (7) can be distinguished on the footing that the question of res judicata arose in an application either under Art. 226 or Art. 32 of the Constitution and not in a suit., On the other hand, in v. ) this Court definitely ruled : ", "\"Where s. 11 is thus inapplicable it would not be permissible to rely upon the general doctrine of res judicata. We are dealing with a suit and the only ground on which res judicata can be urged against such a suit can be the provisions of S. 1 1 and no other.\" ", "These observations, in my view, correctly represent the law on the subject. This view, while it does not make S. 1 1 of the Code of Civil Procedure an unnecessary provision, does not also lead to any practical difficulties, for the decision of on a question of law will be binding as an authority on subordinate and its decision on a question of fact will rarely be differed from by the said . ", "I would, therefore, hold that the decision given by in the writ petition would not preclude the from deciding the same question on merits in the present suit. The order of is set aside and the appeal is remanded to for disposal on merits in accordance with law. Costs will abide the result. ", "ORDER In accordance with the Opinion of the Majority the Appeal is dismissed with costs. ", "(1) [1922] L.R. 49 I.A. 129. ", "(2) L.R. 66 I.A. 145. ", "(3) [1953]1 S.C.R. 154. ", "(4) [1961] 1 S.C.R. 96. ", "(5) [1962] 1 S.C.R. 574. ", "(6) [1963] Supp. (1) S.C.R. 172. ", "(7) [1965] 1 S.C.R. 686. ", "(8) [1962] Supp. 1 S.C.R. 206. ", "577"], "relevant_candidates": ["0000811277", "0000933844", "0000996317", "0001465492", "0001481962", "0001495268", "0001542335", "0001776911", "0001992789"]} {"id": "0001300023", "text": ["JUDGMENT , ", "1. Rule. By consent of learned Counsel for the parties, rule made returnable forthwith and matter is taken up for final disposal. Heard learned Counsel for the petitioner and learned APP for the Respondent. ", "2. Both matters can be considered and disposed of, by common order, because the issue involved in both the matters, is common. ", "3. The Petitioner has approached this court, feeling aggrieved by the orders passed by the learned Chief Judicial Magistrate, Aurangabad, (\"\" for short) on 4.3.2008 in Criminal M.A. Nos. 231 and 232 of 2008. Suffice it to say that the petitioner-bank had approached the with applications under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (\" NPA Act \" for brevitys sake). The applications are rejected by learned with common line of reasons and we quote the observations: ", "...Therefore, by this application, Petitioner has prayed for assistance in taking possession of secured assets. Heard learned Counsel for the applicant. He relied on 2007 (1) Bom. C.R. (Cri.) 783. On perusal of judgment cited it is seen that there was decree passed by D.R.T. in favour of said Petitioner, who had prayed for such assistance in taking possession of secured assets by filing application before C.M.M. Admittedly, in our case nowhere Petitioner has come with the case that, he has obtained decree in his favour from competent court D.R.T. and in execution of same he is in need of assistance of this criminal Court. ", "4. Because of the writ petitions filed by the petitioner, we are required to consider the issue; ", "Whether, a creditor requesting assistance under Section 14(1) of the NPA Act is required to be armed with a decree for recovery of dues from the borrower, from competent court or D.R.T.? ", "It appears that the judgment rendered by at Bombay of this High Court, in the matter of . 2007 (1) Bom. C.R. (cri.) 783, was placed before the learned and reading the facts from that judgment, the learned has taken a view that in the reported matter, there was a decree passed by in favour of the creditor therein (respondent in that writ petition) and because the present writ petitioner, who is creditor and seeking assistance from the for taking possession of secured assets as under Section 14(1)(a) of the NPA Act, is not armed with a decree against the borrower, from the competent court or , the learned felt that the present petitioner is not entitled to assistance of the for taking possession of the secured assets. At present, we are concerned with these observations of the learned . ", "5. During the course of his submissions, Advocate Shri , has submitted that on going through the entire judgment in the matter of Trade Well (supra), it appears that the court has not laid down a ratio as understood by the i.e. assistance under Section 14(1) of the NPA Act cannot be availed by a creditor, unless he is armed with a decree of competent court/DRT. Learned APP , upon going through the judgment, has accepted this position. ", "Even on going through opening part of the judgment, we can gather as to what question court was dealing with. We quote: ", "The question which arises in these writ petitions is whether while dealing with written request made by a secured creditor under Section 14 of Financial Assets and Enforcement of Security Interest Act (for short, \"the NPA Act \"), the Chief Judicial Magistrate or the District Magistrate as the case may be is required to give notice to the borrower or any person who may be in possession of secured asset and give him a hearing? ", "As the court was seized only of this question and no other issue, the observations of the court on any other issue will have to be treated as \"obiter dictum\" and not \"ratio decidendi\". ", "The court has recorded its ten conclusions in paragraph 90 and first four conclusions (1 to 4) pertain to Section 14 , which we reproduce and to which we shall advert little later. ", "(1). The bank or financial institution shall, before making an application under Section 14 of the NPA Act, verify and confirm that notice under Section 13(2) of the NPA Act is given and that the secured asset falls within the jurisdiction of before whom application under Section 14 is made. The bank and financial institution shall also consider before approaching for an order under Section 14 of the NPA act, whether Section 13 of the NPA Act excludes the application of Sections 13 and 14 thereof to the case on hand. ", "(2). CMM/DM acting under Section 14 of the NPA Act is not required to give notice either to the borrower or to the 3rd party. ", "(3). He has to only verify from the bank or financial institution whether notice under Section 13(2) of the NPA Act is given or not and whether the secured assets fall within his jurisdiction. There is no adjudication of any kind at that stage. ", "(4). It is only if the above conditions are not fulfilled that the CMM/DM can refuse to pass an order under Section 14 of the NPA Act by recording that the above conditions are not fulfilled. If these two conditions are fulfilled, he cannot refuse to pass an order under Section 14 . ", "Even on going through all ten conclusions, we do not find the court laying down ratio as understood by learned CJM, Aurangabad. ", "In fact, in taking a view as recorded by learned CJM, Aurangabad, he has practically set the provisions of the NPA Act , at knot. ", "6. We may simply reproduce the statement of objects and reasons and certain provisions from the NPA Act which clearly indicate that this is a special legislation enabling the creditor to recover his dues by taking measures as provided in the NPA Act and in the manner as prescribed in the said Act, without getting entangled in the legal process and the delay or time consumption that occurs when a party is required to recover its dues through legal proceedings. ", "Statement of Objects and Reasons:- The financial sector has been one of the key drivers in Indias efforts to achieve success in rapidly developing its economy. While the banking industry in India is progressively complying with the international prudential norms and accounting practices, there are certain areas n which the banking and financial sector do not have a level playing field as compared to other participants in the financial markets in the world. There is no legal provision for facilitating securitisation of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting level of non-performing assets of banks and financial institutions. and II and constituted by for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas. These Committees, inter alia, have suggested enactment of a new legislation for securitisation and empowering banks and financial institutions to take possession of securities and to sell them without the intervention of the . Acting on these suggestions, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was promulgated on the 21st June, 2002 to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. The provisions of the Ordinance would enable banks and financial institutions to realise long term assets, manage problem of liquidity asset liability mismataches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. ", "Section 13 , whichis regarding enforcement of security interest and more particularly Sub-section (1) of it, reads thus; ", "13. Enforcement of security interest: ", "(1). Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882 , any security interest created in favour of any secured creditor may be enforced, without the intervention of the or tribunal, by such creditor in accordance with the provisions of this Act. ", "Sub-section (2) of Section 13 of the Act, requires the creditor to give a notice to borrower whose debt is classified by the secured creditor as NPA, inviting the borrower to discharge, in full; his liabilities to the secured creditor, within sixty days from the date of notice and failing which, the secured creditor is held entitled to exercise all or any of the rights under Sub-section (4). ", "Sub-section (3) requires the secured creditor to give details regarding amount due from the borrower and the secured assets against which the secured creditor desires to proceed, in case of failure on the part of the borrower to comply with notice under Section 13(2) . ", "Again we may refer to some part of text of Sub-section (4) of Section 13 , and the opening part reads; ", "In case the borrower fails to discharge his liability in full within the period specified in Sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely: ", "(a). take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; ", "(b). take over the management of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured asset; ", "(c). appoint any person (hereinafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; ", "(d). require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. ", "Sub-section (12) of Section 13 reads: ", "The rights of a secured creditor under this Act may be exercised by one or more of his officers authorised in this behalf in such manner as may be prescribed. ", "Sub-section (13) practically operates as injunction against the borrower, either from alienating or transferring or creating encumbrance against the secured assets. ", "On going through the entire Section 13 of the NPA Act, it is clear that it makes no reference to any judicial forum which the secured creditor is required to approach before taking steps, as permitted by Sub-section (4). The only condition required to be fulfilled by secured creditor, is serving of a notice under Section 13(2) . By virtue of insertion of amended Sub-section (3-A), the secured creditor is also required to communicate reasons to the borrower as to why representation of the borrower is not acceptable to the creditor. By reference to text of Sub-section (3-A), it is evident that mere rejection of the representation of the borrower, does not give the borrower a cause of action to approach under Section 17 . It is only after the secured creditor takes steps under Section 13(4) that the borrower can approach , by an appeal against such an action by secured creditor. On going through the text of the NPA Act , it is evident that no judicial forum comes into picture till that stage. ", "7. We feel that the statement of objects and reasons in enacting the NPA Act and the provisions quoted hereinabove, are self-eloquent and clearly indicate that the secured creditor is not required to obtain a decree from a competent court/DRT, before being entitled to take steps as permitted by NPA Act for the purpose of enforcement of recovery, by taking steps against the secured assets. We must, therefore, say that the learned CJM, Aurangabad, was completely on wrong foot in observing that the assistance cannot be sought unless there is a decree in favour the secured creditor. ", "In fact, we may also usefully reproduce Sub-section (1) of Section 14 and more particularly its opening part, just to confirm that even this Sub-section does not speak of requirement of decree in favour of secured creditor. ", "Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset: ", "(1). Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate, within whose jurisdiction any such secured asset.... ", "Later half of Sub-section (1) states that the Chief Metropolitan Magistrate (\"CMM\") or the District Magistrate (\"DM\"), on such request being made, may take possession of such assets and documents relating thereto and forward such assets and documents to the secured creditor. ", "Even Section 14 , which can be availed of, by a secured creditor for the purpose of taking possession of secured assets, under the provisions of this Act, which is referable to Section 13(4) , does not speak regarding requirement of any decree of a competent court in favour of the secured creditor. The Act is a special enactment, enabling the secured creditors to stand on their own, so far as the purpose of recovery of the loans is concerned. ", "8. On reading the text of Section 14(1) repeatedly, during the course of submissions of learned Counsel for the petitioner and learned , a new question has struck our mind and that is why we had adjourned the matter on the last occasion. We have drawn attention of learned Counsel for the petitioner to the titles of the authorities referred to in Section 14 . It refers to Chief Metropolitan Magistrate or District Magistrate. Reference to Chief Judicial Magistrate is conspicuously absent. The terminal portion of Section 14(1) reads: ", "...the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him...take possession. ", "The authorities are referred thrice in Sub-section (1) of Section 14 . They are also referred in Sub-section (2) and Sub-section (3) of Section 14 , but every time, reference is made to the designations \"Chief Metropolitan Magistrate\" and \"District Magistrate\". There is no reference to \"Chief Judicial Magistrate\". We have, therefore, posed a question to Advocate for the Petitioner that Section indicates assistance from and , within whose territorial limits the secured assets or documents relating thereto are situated at the time secured creditor desires taking possession of the secured assets. There is no reference to the CJM. We have, therefore, expressed that it would be the , so far as metropolitan area is concerned and where there is a appointed and posted. So far as other area is concerned, there being no post and appointment of , secured creditor desirous of availing benefit of Section 14(1) , will have to approach . ", "Advocate has not been able to point out any provision in the NPA Act , or Cr.P.C . which will compel us to accept his proposition that, although words used in the section are \"CMM/DM\", sofar as area beyond metropolitan area is concerned, the words \"CMM\" can be read as \"CJM\". The legislature does not seem to have intended to entrust the function to CJM outside the metropolitan area, although the function is entrusted to CMM, a judicial officer, in metropolitan area. ", "Even on going through Section 3 of the Code of Criminal Procedure, relating to construction of reference and more particularly Sub-sections (2) and (3) of the same, any reference to Judicial Magistrate is required to be read as \"Metropolitan Magistrate\", insofar as metropolitan area is concerned by virtue of Sub-section (2), but this is only for the purpose of Cr.P.C . and Section 3(2) is not applicable to any other Acts. Sub-section (3) of Section 3 of . relates to other Acts, but which are passed before commencement of the Cr.P.C . Reference in any such enactment to Presidency Magistrate/Chief Presidency Magistrate is required to be construed as reference to Metropolitan Magistrate/Chief Metropolitan Magistrate. This change is necessitated because under Cr.P.C . 1898, the Magistrates in the metropolitan area, which was then called as \"Presidency Town\", were designated as Presidency Magistrate/Chief Presidency Magistrate and were so referred in the enactments which were passed before coming into force, the Code of Criminal Procedure, 1973. ", "9. Our attention could not be drawn by either Counsel to demonstrate that the words \"CMM\" in Section 14 of the NPA Act, can be read as \"CJM\", sofar as non metropolitan area is concerned, by any stretch of imagination. ", "We are, therefore, inclined to confirm the order of , Aurangabad, rejecting assistance to the petitioner to recover possession of secured assets, although for different reasons. We have arrived at a conclusion that, sofar as non metropolitan area is concerned, powers vest in and not with , or Judicial Magistrate. Sofar as metropolitan area is concerned, the two authorities are available to the secured creditor, namely, and . But, so far as non metropolitan area is concerned, the secured creditor will have to approach the only, for assistance under Section 14(1) of the Act. ", "10. While upholding the order passed by the , Aurangabad, we have recorded our views on merits and we only record that the could not have rejected assistance to the petitioner, if he () otherwise had jurisdiction to entertain such a request, on the ground that the secured creditor is required to be armed with a decree from the competent court. We may say that assistance cannot be refused either by or , on this ground. ", "What is required to be done by or , while considering the request of secured creditor for assistance to take possession of secured assets, is evident from the conclusions at serial Nos. 1 to 4 drawn by at Bombay in the matter of Trade Well (supra) and which we have already reproduced in earlier part of this judgment. To state in brief, or acting under Section 14 , will not be required to serve a notice upon the borrower or a third party. But, the authority will have to verify from the bank/financial institution/secured creditor that the notice under Section 13(2) of the NPA Act is served; that the secured assets are within territorial jurisdiction of the authority concerned; that the borrower has not discharged liability as indicated in the notice under Section 13(2) and that the secured creditor has communicated reasons for rejection of representation, if any, of the borrower. If all these things are fulfilled by the secured creditor, / will not be in a position to refuse assistance under Section 14(1) to the secured creditor. ", "11. We, therefore, dispose of the writ petitions, by confirming refusal by , Aurangabad, of assistance under Section 14(1) , not because the petitioner-creditor was not armed with a decree of a competent court, but because the does not have power to render such assistance. We clarify that it will be open for the petitioner to approach the and refusal of assistance under Section 14(1) of the Securitization Act, by , Aurangabad, will not be an impediment in providing such assistance to the petitioner/secured creditor upon demonstration by the secured creditor, of fulfilment of requirement as under Section 13(2) and 13 (3- A) of the Act . ", "12. Writ Petitions are disposed of and rule made absolute, in above terms."], "relevant_candidates": ["0000013540"]} {"id": "0001309482", "text": ["PETITIONER: Vs. RESPONDENT: STATE OF BIHAR DATE OF JUDGMENT: 19/01/1967 BENCH: SIKRI, S.M. BENCH: SIKRI, S.M. HIDAYATULLAH, M. VAIDYIALINGAM, C.A. CITATION: 1967 AIR 1167 1967 SCR (2) 423 CITATOR INFO : R 1977 SC1172 (17) R 1978 SC1568 (4) R 1979 SC 339 (3,10) ACT: Code of Criminal Procedure (Act 5 of 1898), ss. 190(1) (b) and 2O7-Magistrate taking cognizance of offence on police report-Jurisdictlion to proceed against accused not sent up by police. Discharge of accused-Whether possible, when accused not included in the charge-sheet. HEADNOTE: The police investigated into a complaint against the appellant and others, accepted the appellant's plea of alibi and filed a charge sheet against the others for offences, under ss. 302 , 201 and 149 I.P.C., before the Sub-Divisional Magistrate. The Magistrate recorded that the appellant was discharged -and transferred the case for enquiry to another Magistrate, who, after examining two witnesses, ordered the issue of a non-bailable warrant against the appellant, for proceeding against him along with the other accused under s. 207-A Cr. P.C. The order was confirmed by and . In appeal to this Court, HELD:(1) There could be no discharge of the appellant when he was not included as an accused in the charge-sheet submitted by the police. [426 C] (2)The appellant could be proceeded against along with the other accused under S. 207-A . [426 B] The Sub-divisional Magistrate had taken cognizance of the offence upon the written report of the police, that is, under s. 190(1)(b) , Cr. P.C Therefore, the proceeding was instituted under s. 207(a) and not under s. 207(b) . The cognizance, however, was of the offence only and not of the offenders. Having taken cognizance of the offence, he had to find out who the real offenders were, and if he came to the conclusion that apart from the persons sent up by the police some other persons were involved. It was his duty to proceed against those persons also. The summoning of the appellant as an additional accused was part of the proceeding initiated by his taking cognizance of the offence. [427 B-C, 4Z8 . 1 S.C.R. 269, followed. JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 189 of 1964. ", "Appeal by special leave from the judgment and order dated April 10, 1964 of in Criminal Revision No. 896 of 1961. ", " and , for the appellant. , for the respondent. ", "424 ", "The Judgment of the Court was delivered by , J. This appeal by special leave is directed against the judgment of dismissing Criminal Revision No. 896 of 1961 filed by the appellant . The relevant facts for appreciating the points raised before us are as follows :- The appellant was one of the 15 persons mentioned as assailants in the First Information Report dated July 29, 1959, lodged by one . The police investigated the case and during the investigation the appellant set up an alibi. The police accepted the alibi and did not include his name as an accused in the final report under s. 173 of the Code of Criminal Procedure. His name was, however, mentioned in column No. 2 of the Charge Sheet under the heading \"not sent up\". On April 5, 1961, the Sub-divisional Magistrate passed the following order \"C. S. No. 12 dated 234-3-61 u/s 149/302/201 ", "1. P. C. received against the accused noted in col. 3 and 4 of C. S. ", "Cog. taken u/s 149/302/201 1. P. C. and case transferred to Sri ........ class for enquiry under Chapter XVIII Cr. P. C. Accused not sent up for trial is discharged.\" ", "On transfer, , Magistrate, took up the hearing of the case on May 1961. In the meantime a petition had been filed on April .1, 1961, praying that the appellant be summoned by the Magistrate. On May 2, 1961,. , P. W. 1, was examined and in his examinations he implicated the appellant as one of the persons who were present in the mob which is alleged to have killed . On the same day , P. W. 2, also implicated the appellant in his examination-in-chief. It appears that the counsel for , the person who lodged the F.I.R., requested the Magistrate to summon the appellant as well for trial, as prayed for in the petition dated April 11, 1961, The Magistrate, after hearing the Assistant District Prosecutor as well as the counsel for the informant and the accused, passed the following order \" is named in F. I. R. and as submitted by A. D. P. 5 witnesses have named him before police and P. W. 1 examined before me has also named him. So in my opinion it is , proper to add . also in this enquiry as accused. 'At this stage one petition has been filed by lawyer of accused that cross-examination of s be allowed to be done after appearance of . This contention is quite reasonable otherwise cross-examination will have to be done again after appearance of and so prayer .of defence is allowed. Examined in chief. He has also named to be a member of the mob of these accused at the time of occurrence. So issue non-bailable W/A against according to address given by today as the allegation against be very serious one. Send the process peon returnable by 3-6-1961. Other accused will reattend.\" ", "The appellant challenged this order before the Sessions Judge. it was urged before him that the Magistrate had no jurisdiction to summon the appellant because the Sub- divisional Magistrate had already dismissed a protest petition on merits. The Sessions Judge rejected the argument and held that it was open to the Magistrate to summon any person against whom he found sufficient evidence in the case. ", "The appellant then filed a criminal revision before . Before it was urged, first, that the petition dated April 11, 1961, was';, a petition of complaint and, therefore, summoning the appellant on the basis of a petition of complaint would result in a separate complaint case and he could not be tried along with the other accused under s. 207A of the Code of Criminal Procedure. Secondly, it was urged that the order of the Magistrate was irregular as he had summoned the appellant on the same grounds on which the Sub.divisional Magistrate had discharged him. On the first point held that the order of the Magistrate did not result in a separate complaint case against the appellant as \"the present case was instituted when the sub-divisional Magistrate took cognizance of an offence reported by the Police, and therefore, the case shall be deemed to have been instituted oft the police report.\" further observed that \"it is' therefore, clear from the language of section 190 of the Code that the Magistrate takes cognizance of an offence made out in the police report or in 1 the petition of complaint and there, is nothing like taking cognizance of the offenders at that stage. It has to be decided on the materials on record as to who actually the offenders may be only after cognizance of the offence has been taken. On the facts of the instant case, therefore, cognizance of the offence has been taken on a police report, and the order of the transferee Magistrate summoning does not amount to taking cognizance of an offence.\" On the second point held that the Magistrate did not summon the appellant only on those grounds which were before the Sub-divisional Magistrate as the materials before the two Magistrates were not identical. The Sub-divisional Magistrate had acted on the Police report alone but the Magistrate took into consideration the evidence of the two prosecution witnesses examined in court as well. The learned counsel for the appellant, Mr. , raises two points before us; first that the discharge of the appellant by the order dated April 5, 1961, by the Sub- divisional Magistrate was final, and secondly, that the proper procedure to be observed on the facts of this case was not under s. 207A but under the subsequent sections in Chapter XVIII of the Criminal Procedure Code . We see no force in these points. ", "Regarding the first point NV. urges that judicial refusal to summon amounts to discharge. There is no force in, this contention because there cannot be any question of discharge when the appellant was not sent' up upon the charge-sheet submitted by the police. Coming to the second point the learned counsel for the ap- pellant contends that no proceeding was instituted against the appellant on a police report within the meaning of s. 207A of the Code because the appellant's name was not included in the charge sheet. He says that although cognizance might have been taken of an offence under s. 190(1)(b) no proceeding as such was instituted against the appellant at this stage; the proceeding was instituted when a non-bailable warrant was issued against the appellant and this proceeding was instituted not on the basis of a police report but on the basis of evidence taken before the Ma- gistrate, and, therefore, he says, t is a proceeding falling within s. 207(b) . ", " Section 190(i) and 207 of the Code read as follows \" 190(1) Except as hereinafter provided, any Presidency Magistrate, District Magistrate or Sub-divisional Magistrate, and any other Magistrate specially empowered in this behalf, may, take cognizance of any offence- ", "(a) upon receiving a complaint of facts which constitute such offence; ", "(b) upon a report in writing of such facts made by any police officer; ", "(c) upon information received from any person other than a police-officer, or upon his own knowledge or suspicion, that such offence has beer. committed.\" ", "\"207. In every inquiry before a Magistrate where the case is triable exclusively by a court of Session or , or, in the opinion of the Magistrate, ought to be tried by such Court, the Magistrate shall- ", "(a)in any proceeding instituted on a police report, follow the procedure specified in s. 207A ; and ", "(b)in any other proceeding, follow the procedure specified in the other provisions of this Chapter.\" It seems to us that s. 207(a) refers back to s. 190(1)(b) ; in other words, the police reportmentioned in s. 207(a) is the report mentioned in s. 190(1) (b), and once cognizance is taken under s. 190(1)(b) , a proceeding is instituted within s. 207(a) . , J., speaking for the , while considering the interpretation of s. 251-A of the Code of Criminal Procedure in () observed as follows \"In our judgment the meaning which is sought to be given to a 'police report' is not correct. In s. 190 , a distinction is made between the classes of persons who, can start a criminal prosecution. Under the three clauses of s. 190(1) , to which we have already referred, criminal prosecution can be initiated (i) by a police officer by a report in writing, (ii) upon information received from any person other than a police officer or upon the Magistrate's own knowledge or suspicion, and (iii) upon receiving a complaint of facts. If the report in this casefalls within (i) above, then the procedure under s. 251A , Criminal Procedure Code , must be followed. If it falls. in (ii) or (iii) then the procedure under s. 252 , Criminal Procedure Code , must be followed. We are thus concerned to find out whether the report of the police officer in writing in this case can be described as a 'complaint of facts' or as 'information received' from any person other than a police officer.' That it cannot be the latter is obvious enough because the information is from a police officer. The term 'complaint' in this connection has been defined by the Code of Criminal Procedure and it 'means the allegation made orally or in writing to a Magistrate, with a view to his taking action under the Code , that some person, whether known or unknown, has committed an offence, but it does not include the report of a police officer.' [see s. 4(1) (h]. ", "It, therefore, follows that s. 252 , Criminal Procedure Code , can only apply to those cases which are instituted otherwise than on a police report, that is to say, upon complaints which are not reports of a police officer or upon information received from persons other than a police officer.\" ", "(1) [1965]1 S.C.R. 269. ", "428 ", "Similarly S. 207(b) Can Only apply if the case was instituted ,otherwise than on a police report. On the facts of this case it is quite clear that the case does not fall within s. 190(1)(a) or s. 190(1)(c) because the Sub- divisional Magistrate had taken cognizance of the offence on April 5, 1961. But, says Mr. , that though it is true that cognizance was taken on April 5, 1961, the cognizance was taken of the offence as far as the other accused were concerned and not as far is the appellant was concerned, as a Matter of fact the appellant had been rightly or wrongly discharged. in our opinion once cognizance has been taken by the Magistrate, he takes cognizance of an offence and not the offenders; once he takes cognizance of an offence it is his duty to find out who the offenders really are and once he comes to the Conclusion that apart from the persons sent up by the police 'Some other persons are involved it is his duty to proceed against those persons. The summoning of the additional accused is part of the proceeding initiated by his taking cognizance of an offence. As pointed out by this Court in (1) the term \"complaint\" would include allegations made against persons unknown. If a Magistrate takes -cognizance under s. 190(1)(a) on the basis of a complaint of facts he would take cognizance and a proceeding would be instituted ,even though persons who had committed the offence were not 'known at that time. The same position prevails, in our view, under s. 190(1)(b). ", "Mr. , the learned counsel for the respondent brought ", "-to our notice some decisions which have taken the same view. in ( ), following the decision of the Judicial Commissioners, Sind, in v. ( ), held that when a Magistrate takes 'Cognizance under s. 190(1) b) on a police report he takes cognizance of the offence and not merely of the particular persons named in the charge sheet, and therefore, the Magistrate is entitled ,to summon additional accused against whom he considers that there was good evidence, after perusal of the statements recorded by the police under s. 161 and the other documents referred to in s. 173 even without examination of witnesses in court. in (4) and the ", "-Allahabad High Court in v. The State(5) also expressed a :similar view. ", "In the result the appeal fails and is dismissed. ", " dismissed. ", "(1) [1965] 1 S.C.R. 269. (2) A.I.R. 1962 Cal. 133. (3) A.I.R. 1924 Sind 7 1. (4) A.I.R. 1964 Pun. 351. (5) [1963] 1 Cr. L.J. 66. ", "429"], "relevant_candidates": ["0000166714", "0000320814", "0001655670"]} {"id": "0001312126", "text": ["CASE NO.: Appeal (crl.) 20 of 2003 PETITIONER: RESPONDENT: State of Jharkhand DATE OF JUDGMENT: 28/11/2003 BENCH: & . JUDGMENT: ", "J U D G M E N T ARIJIT PASAYAT,J One (hereinafter referred to as the deceased) paid price for changing his loyalty from one trade union to another and (hereinafter referred to as the 'accused') was said to be instrumental in taking away his life. Four persons faced trial for alleged commission of offence punishable under Section 302 read with Section 34 of the Indian Penal Code, 1860 (for short the ' IPC '). convicted them accordingly. The matter was carried in appeal before which by the impugned order dismissed the appeal filed by the accused appellant and held that accusations under Section 302 have been made out against him who was accused No.4 before the trial Court. (A-1) died during the pendency of the appeal before . (A-2) and (A-3) were given the benefit of doubt and their acquittal was directed. ", "Prosecution version as unfolded during trial is as follows: ", "At about 9.30 a.m. on 1.8.1995 the deceased and his son (PW-4) had gone to take tea near the shop of one (PW-5). (PW-1) and (PW-2) were also sitting near the shop. Suddenly, the four accused persons came from the side of the road. Accused came towards the informant (PW-4) and the deceased and directed that the deceased should be assaulted. On hearing this, accused appellant took out a pistol from his waist and fired at the deceased. The bullet hit left eye of the deceased. After such firing all the four accused persons fled away. On receiving the bullet injury, deceased fell down and became unconscious. The informant with the help of others took him to nearby hospital where he was declared dead. According to the information given at the police station on which investigation was started, the four accused persons were working in the Katras Colliery. The deceased was a labour leader. Since he left the union to which the accused persons belonged and joined another union, this has caused annoyance to the accused persons and because of this, the murder was committed. After completion of investigation charge sheet was placed. The accused persons pleaded false implication. ", "Placing reliance on the evidence of the eye-witnesses, convicted the accused persons and the conviction was maintained by so far as only the accused appellant is concerned. judgment is under challenge in this appeal. ", "Learned counsel for the appellant submitted that the information given by the informant cannot be treated as a first information report as the police officials had already received information about the incident. Therefore, the statement made was hit by provisions of Section 162 of the Code of Criminal Procedure, 1973 (in short the ' Cr.P.C .'). The place of occurrence has been changed as no blood was seized from the cot where the deceased was purportedly sitting at the time of attack. The so-called eye witnesses had stated that blood had spilled over to the cot. Though the prosecution case is that one bullet was fired, the investigating officer at certain stages in his statement in Court has stated that he recovered a pellet. Bullet and pellet are different things. The prosecution has suppressed the actual scenario and this is evident from the different types of ammunition deposed about. The bullet which was found embodied on the body of the deceased was extracted by the doctor who had handed it over to the police officials. The same was not sent for chemical examination. Therefore, the conviction cannot be maintained. Additionally, the investigating officer had accepted that the accused appellant was found at a distance of about 50 feet from the place of occurrence in an injured and unconscious stage which necessitated his admission to hospital. The injuries on the accused were not explained by the prosecution and the investigation was perfunctory as is evident from the accepted fact that the medical report of the accused-appellant was not even collected and seized bullet was not sent for ballistic examination. Strong reliance was placed on the decision of this Court in (AIR 1995 SC 1601) to contend that same was fatal to the prosecution case. In the statement under Section 313 of the . the accused appellant had taken a definite stand that a shot was fired by the deceased which did not hit him and the deceased and , , and assaulted him and made him senseless. The injuries were of serious nature. The defence version was more probable and therefore the conviction should be set aside was the plea. ", "In response, learned counsel for the submitted that three eye-witnesses specifically deposed regarding the place of occurrence, the manner of assault and gave detailed description of the entire scenario. and have analysed their evidence and found to be credible, cogent and trustworthy. That being the position, there is no scope for interference in this appeal. Further, there was a confusion between bullet and pellet which has been clarified by the investigating officer. Merely because the bullet which was extracted by the doctor was not sent for chemical examination, it would not be a factor which would outweigh the testimonial worth of the eye-witnesses. The injuries have not been established by the accused to have been sustained in course of the incident as per the prosecution version. There was not even any suggestion about the defence version to any of the prosecution witnesses and for the first time while giving statement under Section 313 . the plea has been taken. ", "We shall first deal with the question regarding non-explanation of injuries on the accused. Issue is if there is no such explanation what would be its effect? We are not prepared to agree with the learned counsel for the defence that in each and every case where prosecution fails to explain the injuries found on some of the accused, the prosecution case should automatically be rejected, without any further probe. (1968 (3) SCR ", "525), it was observed: ", "\"...In our judgment, the failure of the prosecution to offer any explanation in that regard shows that evidence of the prosecution witnesses relating to the incident is not true or at any rate not wholly true. Further those injuries probabilise the plea taken by the appellants.\" ", "In another important case (1976 (4) SCC 394), after referring to the ratio laid down in case (supra), this observed: ", "\"Where the prosecution fails to explain the injuries on the accused, two results follow: ", "(1) that the evidence of the prosecution witnesses is untrue; and (2) that the injuries probabilise the plea taken by the appellants.\" ", "It was further observed that: ", "\"In a murder case, the non-explanation of the injuries sustained by the accused at about the time of the occurrence or in the course of altercation is a very important circumstance from which the Court can draw the following inferences: ", "(1) that the prosecution has suppressed the genesis and the origin of the occurrence and has thus not presented the true version; ", "(2) that the witnesses who have denied the presence of the injuries on the person of the accused are lying on a most material point and, therefore, their evidence is unreliable; ", "(3) that in case there is a defence version which explains the injuries on the person of the accused assumes much greater importance where the evidence consists of interested or inimical witnesses or where the defence gives a version which competes in probability with that of the prosecution one.\" ", "In case (supra) it is made clear that failure of the prosecution to offer any explanation regarding the injuries found on the accused may show that the evidence related to the incident is not true or at any rate not wholly true. Likewise in case (supra) it is observed that any non-explanation of the injuries on the accused by the prosecution may affect the prosecution case. But such a non- explanation may assume greater importance where the defence gives a version which competes in probability with that of the prosecution. But where the evidence is clear, cogent and creditworthy and where the can distinguish the truth from falsehood the mere fact that the injuries are not explained by the prosecution cannot by itself be a sole basis to reject such evidence, and consequently the whole case. Much depends on the facts and circumstances of each case. These aspects were highlighted by this in . (AIR 1990 SC 1459). ", "Non-explanation of injuries by the prosecution will not affect prosecution case where injuries sustained by the accused are minor and superficial or where the evidence is so clear and cogent, so independent and disinterested, so probable, consistent and creditworthy, that it outweighs the effect of the omission on the part of prosecution to explain the injuries. As observed by this in (AIR 1972 SC 2593) prosecution is not called upon in all cases to explain the injuries received by the accused persons. It is for the defence to put questions to the prosecution witnesses regarding the injuries of the accused persons. When that is not done, there is no occasion for the prosecution witnesses to explain any injury on the person of an accused. In and . v. State of Bihar (AIR 1988 SC 863), it was observed that the obligation of the prosecution to explain the injuries sustained by the accused in the same occurrence may not arise in each and every case. In other words, it is not an invariable rule that the prosecution has to explain the injuries sustained by the accused in the same occurrence. If the witnesses examined on behalf of the prosecution are believed by the in proof of guilt of the accused beyond reasonable doubt, question of obligation of prosecution to explain injuries sustained by the accused will not arise. When the prosecution comes with a definite case that the offence has been committed by the accused and proves its case beyond any reasonable doubt, it becomes hardly necessary for the prosecution to again explain how and under what circumstances injuries have been inflicted on the person of the accused. It is more so when the injuries are simple or superficial in nature. In the case at hand, trifle and superficial injuries on accused are of little assistance to them to throw doubt on veracity of prosecution case. ", "So far as the non seizure of blood from the cot is concerned, the investigating officer has stated that he found blood stained earth at the place of occurrence and had seized it. Merely because it was not sent for chemical examination, it may be a defect in the investigation but does not corrode the evidentiary value of the eye-witnesses. The investigating officer did not find presence of blood on the cot. and have analysed this aspect. It has been found that after receiving the bullet injury the deceased leaned forward and whatever blood was profusing spilled over to the earth. ", "So far as the effect of the bullet being not sent for chemical examination, it has to be noted that case (supra) is not an authority for the proposition as submitted that whenever a bullet is not sent for chemical examination the prosecution has to fail. In that case one of the factors which weighed with this for not finding the accused guilty was the prosecution's failure to send the weapon and the bullet for ballistic examination. In the instant case, the weapon was not seized. That makes a significant factual difference between case (supra) and the present case. ", "It has to be noted that there was not even a suggestion to any of the prosecution witnesses that the injuries were sustained by the accused-appellant in the manner indicated by him, as stated for the first time in the statement under Section 313 . ", "So far as the confusion relating to bullet and pellet is concerned, the same has been clarified by the doctor's evidence. In his examination the doctor (PW-3) has categorically stated that there was only one injury on the body of the deceased and no other injury was found anywhere on the person of the deceased. Therefore, the question of the deceased having received any injury by a pellet stated to have been recovered by the investigating officer is not established. The investigating officer has clarified that the bullet embodied was given to the police officials by the doctor which was initially not produced as it was in the Malkhana but subsequently the witness was recalled and it was produced in Court. ", "Though it may not be having any determinative value, certain suggestions given to the witnesses make interesting reading. A question was put to PW-4 in cross examination which reads as follows: ", "\"x x x x x It is not correct that Hira, Ravindra did not run to catch the accused persons, rather they themselves ran away\". ", "This in a way probabilises the prosecution version and does not in any way establish the defence version as is indicated for the first time in the statement under Section 313 . and has pleaded before this Court to be a ground for doubting the veracity of the prosecution version. ", "The well reasoned judgments of and do not need any interference. The appeal is without any merit and is dismissed."], "relevant_candidates": ["0000169580", "0000807023", "0000900679", "0001060754", "0001935279"]} {"id": "0001316576", "text": ["PETITIONER: Vs. RESPONDENT: & OTHERS DATE OF JUDGMENT: 17/10/1969 BENCH: ACT: Waiver-Need not be found on contract or agreement, Pre- emption Bengal Tenancy Act, s. 26(f). HEADNOTE: The appellant filed an application under s. 26(f) of the Bengal Tenancy Act claiming right of preemption over the land purchased by the respondent. The respondent took up the position that the appellant was not a co-sharer in the land which had been purchased by her and that he along with his uncle had acted as brokers in the transaction and received brokerage; the appellant had thus waived his right of preemption. The trial Judge allowed the application. The appeal Court held that the appellant's claim was barred owing to waiver on his part. A revision to was unsuccessful. In appeal to this Court it was urged that waiver could be brought about only by a contract and since no consideration had passed it could not be said that there had been any waiver. HELD, : Under the Indian Law neither consideration nor an agreement would be necessary to constitute waiver. A waiver signifies nothing- more than an intention not to insist upon the right. It is well known that in the law of preemption the general principle which can be said to have been uniformly adopted by the Indian courts is that acquiescence in the sale by any positive act amounting to relinquishment of a preemptive right has the effect of forfeiture of such a right. So far as the law of preemption is concerned the principle of waiver is based mainly on Mohammedan Jurisprudence. The contention that the waiver of the appellant's right under s. 26F of the Bengal Tenancy Act must be founded on contrast or agreement cannot therefore be acceded to. [927 ., Supp. 2, S.C.R. 217, 226 and Dawson's , 62 I.A. 100, 108 referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2170 of 1967. Appeal from the judgment and order dated September 5, 1963 of in Civil Rule No. 2864 of 1952. and , for the appellant. ", " and , for respondent No. 1. The Judgment of the Court was delivered by This is an appeal by certificate from a judgment of arising, out of a petition filed by the appellant under s. 26F of the Bengal Tenancy Act, 1885 claiming a right of preemption over certain lands purchased by respondent No. 1. ", "926 ", "The facts may be briefly stated. On July 23, 1950, the ap- pellant purchased certain portion of land in C.S. No. 3605 of Monza Kasba from the occupancy raiyats respondents Nos. 2 and 3 and one deceased. By another deed the appellant purchased from the said vendors another plot of land measuring 31 acres. By a Kabala dated October 8, 1950 the said vendors sold 10 acres of land in the same number to respondent No. 1 for Rs. 2,700. The appellant filed an application before the Second Subordinate Judge, district 24 Parganas under s. 26F of the Bengal Tenancy Act claiming the right of preemption over the land purchased by respondent No. 1. The latter took up the position that the appellant was not a co-sharer in the land which had been purchased by her and that he along with his uncle had acted as brokers in the transaction and received Rs. 300 as brokerage; the appellant had thus waived his right of preemption. The learned trial Judge disbelieved the case set up by respondent No. 1 and allowed the application of the appellant for preemption. Respondent No. 1 filed an appeal in the court of,the Additional District Judge, . He held that the appellant's claim for preemption was barred owing to waiver on his part. The appellant filed a petition for revision in but the same was dismissed on the ground that it was open to the appellant to waive his right and that there had been actual waiver. ", "The main point which was sought to be raised before us was that waiver could be brought about only by a contract and since no consideration had passed it could not be said that there had been any waiver in the present case. Moreover waiver could not be proved by estopped. Learned counsel for the appellant relied on the observations of Lord of Killowen in 's (1). While stating the distinction between estopped and waiver, it was said, that \"waiver is contractual, and may constitute a cause of action; it is an agreement to release or not to assert a right.\" According to the appellant all that had been found was that by his act and conduct he had waived his right of preemption. It was pointed out that there was no evidence for any consideration having moved from respondent No. 1 in the matter of abandonment of the appellant's right of preemption. In the well-known work of Sir \"Principles of the English Law of Contract\", 22nd Edn., it has been stated at p. 107 that at Common Law the waiver of existing obligations does not appear to require the presence of detriment in order to make it effective. ", "(1) 62 I.A. 100, 108. ", "927 ", "In India the general principle with regard to waiver of contractual obligations is to be found in s. 63 of the Indian Contract Act. Under that section it is open to a promise to dispense with or remit, wholly or in part, the performance of the promise made to him or he can accept instead of it any satisfaction which he thinks fit. Under the Indian law neither consideration nor an agreement would be necessary to constitute waiver. This Court has already laid down in .(1) that waiver is the abandonment of a right which normally everybody is at liberty to waive. \"A waiver is nothing unless it amounts to a release. It signifies nothing more than an intention not to insist upon the right.\" It is well known that in the law of preemption the general principle which can be said to have been uniformly adopted by the Indian courts is that acquiescence in the sale by any positive act amounting to relinquishment of a preemptive right has the effect of the forfeiture of such a right. So far as the law of preemption is concerned the principle of waiver is based mainly on Mohammedan Jurisprudence. The contention that the waiver of the appellant's right under s. 26F of the Bengal Tenancy Act must be founded on contract or agreement cannot be acceded to and must be rejected. ", "A faint attempt was made to assail the finding of that on the facts which had been proved waiver had been established. We find no reason or justification for interfering with the conclusion of on the point. ", "The appeal fails and it is dismissed with costs. ", "R.K.P.S. Appeal dismissed. (1) [1959] Supp. 2 S.C.R. 217, 226."], "relevant_candidates": ["0000351394", "0001613617"]} {"id": "0001325588", "text": ["JUDGMENT , ", "1. In this case at the instance of the assessee the following two questions have been referred to us for our opinion : ", "\"(1) Whether, on the facts and circumstances of the case, conclusion reached by the in holding that the assessee did not commence its business prior to June 26, 1965, and consequently not entitled to expenditure incurred by it amounting to Rs. 58,600 from January 1, 1965, to June, 26, 1965, was correct in law ? ", "(2) If the answer to the first question is in the affirmative, whether the was justified in disallowing the claim of loss of Rs. 46,970 for the assessment year 1965-66 ?\" ", "2. We are concerned in the instant case with assessment years 1965-66 and 1966-67. The assessee is a private limited company and its year of account is the calendar year. The relevant previous years are January 1, 1964, to December 31, 1964, and January 1, 1965, to December 31, 1965. The assessee-company was incorporated on November 4, 1963. For assessment year 1965-66, it submitted its return for the period November 4, 1963, to December 31, 1964, showing a loss of Rs. 46,970. This amount of loss was made up of various items of expenses, such as, salaries, wages, rates and taxes, postage, printing, travelling, interest, etc. The object of the company is to manufacture aluminium and copper conductors. On a scrutiny of the various statements as well as the directors' report, came to the conclusion that the company had not started its business during the year of account and, therefore, the loss as claimed was not allowable. The company actually started production of conductors on June 27, 1965, and for the period from January 1, 1965, to June 26, 1965, the company claimed a loss of Rs. 58,600. For assessment year 1966-67, disallowed the claim of loss of Rs. 58,600 for the period prior to the date on which the production was commenced. According to the assessee-company commenced its business on June 27, 1965, and, therefore, the expenditure incurred prior to that date from January 1, 1965, onwards was not allowable. ", "3. The assessee took the matter in appeal but the Appellate Assistant Commissioner confirmed the view of the Income-tax Officer and dismissed the appeal. The matter was taken in further appeal before the . According to the , the point which required decision in this case was whether the assessee-company could be said to have commenced its business activities from the beginning of the accounting period, viz., November 4, 1963, so as to enable the assessee to claim the expenditure incurred by it from that date as business expenditure. The revenue did not dispute the fact that the business had commenced on June 27, 1965. Therefore, a portion of the expenditure incurred during the accounting year relevant to assessment year 1966-67 was allowable as business expenditure. The held that the decision of the Income-tax Officer and the Appellate Assistant Commissioner was correct, namely, that the assessee did not commence its business prior to June 26, 1965, and hence there was no necessity to change that conclusion. Thereafter, at the instance of the assessee, the questions set out hereinabove have been referred to us for our opinion. ", "4. Section 3(1)(d) of the Income-tax Act, 1961, defines what is meant by \"previous year\" so far as the facts of this case are concerned. According to that section, for the purposes of the Act, \"previous year\" means - ", "\"(d) in the case of a business or profession newly set up in the said financial year, the period beginning with the date of the setting up of the business or profession and ending with the said financial year, or if the accounts of the assessee have been made up to a date within the said financial year, then, at the option of the assessee, ending on that date.... as the case may be.\" ", "5. It is undoubtedly true that since the company was incorporated on November 4, 1963, and the business of the assessee was newly set up, it would be the date of the setting up of the business which would be material. In this connection there are several decisions specifying what can be said to be the date of setting up of the business. Under the Indian Income-tax Act , 1922, also, section 2(11)(c) defined \"previous year\" in the same manner and there also it was the period from the date of the setting up of the business or profession which was the material date. ", "6. 26 ITR 151 (Bom) pointed out that there was a clear distinction between a person commencing a business and a person setting up a business and for the purposes of the Indian Income-tax Act , 1922, the setting-up of the business and not the commencement of the business was to be considered. It is only after the business is set up that the previous year of that business commences and any expense incurred prior to the setting up of a business would not be a permissible deduction. When a business is established and is ready to commence business then it could be said of that business that business is set up; but before it is ready to commence business it is not set up. There may, however, be an interval between the setting up of the business and the commencement of the business and all expenses incurred during that interval would be permissible deductions. Mr. for the revenue has pointed out that in that decision did not follow the decision of in Birmingham and v. Commissioner of Inland Revenue 12 TC 92 (KB) because the language with which was concerned was \"commencing of the business\" and not \"setting up of the business\". At page 158, observed : ", "\"It seems to us, that the expression 'setting up' means, as is defined in , 'to place of foot'or 'to establish', and in contradistinction to 'commence'. The distinction is this that when a business is established and is ready to commence business then it can be said of that business that it is set up. But before it is ready to commence business it is not set up. But there may be an interregnum, there may be an interval, between a business which is set up and a business which is commenced......\" ", "and the test which laid down was that the company was ready to commence business on a particular date if that date can be ascertained, that is, the date from which the business was set up though actual production might have started later on. ", "7. . 63 ITR 478 (SC) referred to the decision of Chagla C.J. in 's case 26 ITR 151 (Bom). in that case was concerned with the words \"in a new and separate unit set up after the commencement of the Act by way of substantial expansion of its undertaking\". At page 482 of the report, , delivering the judgment of , observed : ", "\"The words 'set up' in the principal clause, in our opinion, is equivalent to the word 'established', but operations for establishment cannot be equated with the establishment of the unit itself or its setting up. The applicability of the proviso has, therefore, to be decided by finding out when the company commenced operations for establishment of the unit, which operations must be antecedent to the actual date on which the company is held to have been set up for purposes of the principal clause. This is also the meaning that derived in the case in [1954] 26 ITR 151 (Bom), where that court was concerned with the interpretation of the expression 'set up' as used in section 2(11) of the Income-tax Act... The criterion for determining the period of exemption is based on the commencement of the operations for the establishment of the unit. These operations for establishment of the unit cannot be simultaneous with the setting up of the unit, as urged on behalf of the Commissioner, but must precede the actual setting up of the unit. In fact, it is the operations for 'establishment of a unit which ultimately culminate in the setting up of the unit.\" ", "8. . 90 ITR 318 (Guj), a Division Bench of this High Court has held there is a clear distinction between commencing a business and setting it up. For the purpose of section 3(1)(d) of the Act of 1961 what is required to be considered is the setting up of a business. When a business is established and is ready to start business it can be said to be set up. The business must be put into such a shape that it can start functioning as a business or a manufacturing organization. In that case before the assessee, a private limited company, decided to start a new business for the manufacture of scientific instruments and communication equipment. It placed orders for machinery and equipment in January, 1966, and some of the machinery was received in February, 1966. It also placed orders for raw materials and stores and took on lease premises from an industrial estate. These preparations went on and in July, 1966, the machinery was installed and production was commenced. The assessee claimed to deduct a sum of Rs. 16,237 spent in connection with the new business during the period ending March 31, 1966, for the assessment year 1966-67. On these facts it was held that the new business could not be said to be ready to discharge the function for which it was established, namely, the manufacture of scientific instruments and communication equipment until the machinery necessary for the purpose of manufacture was installed. Obtaining land on lease, placing orders for machinery and raw materials, were merely operations for the setting up of the business. In the case before the business could not be said to be set up until July, 1966, when the machinery had been installed and the factory was ready to commence business. The revenue expenditure incurred before that date would not be a permissible deduction in the assessment for assessment year 1966-67. arrived at these conclusions in the light of the decision of in 's case 26 ITR 151 (Bom) and the decision of in 's case 63 ITR 478 (SC). held that it was only when the machinery was installed that business could be said to be put into such a shape that it could start functioning as a business or a manufacturing organisation. It was not sufficient that the assessee obtained the land on lease from or appointed Dr. as the General Manager or placed orders for purchase of raw materials and stores or ordered out the necessary machinery and equipment. These were merely operations for the setting up of the business and the business could be set up only as a culmination of these operations when all that was necessary for the setting up of the business was done and it was only after the machinery was installed and the factory was ready to commence business that it could be said that the new business was set up by the assessee. ", "9. The three decisions to which we have referred above were again considered by a of this court in 91 ITR 170 (Guj). The same, which delivered the judgment in 's case 90 ITR 318 (Guj) delivered the judgment in and Chemical Industries case 91 ITR 170 (Guj) as well. In this case it has been pointed out that \"business\" connotes a continuous course of activities. All the activities which go to make up the business need not be started simultaneously in order that the business may commence. The business would commence when the activity which is first in point of time and which must necessarily precede all other activities is started. The facts before the in and Chemical Industries case 91 ITR 170 (Guj) were as follows : A company was formed in 1956 for the manufacture and sale of cement. As part of its business the assessee obtained a mining lease for quarrying lime-stone and started the mining operations in 1958. It claimed the expenditure incurred for the purpose of extracting limestone as also depreciation and development rebate for the machinery installed for that purpose for assessment years 1960-61 and 1961-62. On these facts it was held that the activities which constituted the business of the assessee were divisible into three categories : the first category consisted of the activity of extraction of limestone by quarrying the leased area of land. This activity was necessary for the purpose of acquiring the raw material to be utilised in the manufacture of cement. The second activity comprised the activity of manufacture of cement by use of the plant and machinery set up for that purpose and the third category consisted of selling manufactured cement. These three activities combined together constituted the business of the assessee. The activity of quarrying the leased area of land and extracting limestone from it was as much an activity in the course of carrying on the business as the other two activities of manufacture of cement and sale of manufactured cement. This activity came first in point of time and laid the foundation for the second activity and the second activity when completed laid the foundation for the third activity. Hence, the assessee commenced its business when it started the activity of extraction of limestone. Since extraction of limestone commenced in 1958, the assessee was carrying on business during the relevant years of account. The expenditure incurred by the assessee in carrying on the activity of extraction of limestone as also depreciation allowance and development rebate in respect of machinery employed in extracting limestone were deductible in computing the trading profits of the assessee for assessment years 1960-61 and 1961-62. At page 175 of the report, , delivering the judgment of the , observed : ", "\"It is necessary in order to determine this question to consider what constituted the business of the assessee. Loosely, it may be said that the business of the assessee was manufacture and sale of cement. But, in determining questions arising under fiscal legislation, loose use of expression often tends to confound the real issue. To determine what was the business of the assessee, we must consider what are the activities which constituted such business without being misguided by loose expressions of vague and indefinite import...... It may be that the whole business was not set up when the activity of quarrying the leased area of land and extracting limestone was started. That would be set up only when the plant and machinery was installed, the manufacture of cement started and an organisation for sale of manufactured cement was established. But, as pointed out above, business is nothing more than a continuous course of activities and all the activities which go to make up the business need not be started simultaneously in order that the business may commence. The business would commence when the activity which is first in point of time and which must necessarily precede the other activities is started. Take, for example, a case where an assessee engages in the business of trader which consists of purchasing and selling goods. The assessee must necessarily purchase goods in order to be able to sell them and purchase of goods must, therefore, necessarily precede their sale. Can it be said in such a case that when the assessee purchases goods for the purpose of sale, he does not commence his business ? Is it necessary that he must start the activity of selling goods before he can be said to have commenced his business ? We have to consider the question as to when an assessee can be said to have commenced business from a common sense point of view. We have to ask ourselves the question as to when a businessman would regard a business as being commenced ? Would he not consider a business as having commenced when an assential activity of that business is started ? The argument of the revenue seeks to confound the commencement of a business with the estabment of the business as a whole and carrying on of all the activities of the business. This confusion is the result of a loose description of the business of the assessee as a business of manufacture and sale of cement.\" ", "10. The test which was laid down was of the starting of an activity which is an essential activity in the course of carrying on the business, or, in other words, is a business activity and the moment that activity started, the assessee must be held to have commenced the business. To take any other view would not only be illogical but also irrational. ", "11. 102 ITR 25 (Guj) we were dealing with the following facts. The assessee was a private limited company. The main object of the company was to acquire immovable property and to give it out either on leave and licence basis or on lease as residential or, in the alternative, business accommodation, with all appurtenant amenities including the amenities of storage, watch and ward facilities, canteens, refreshment rooms, etc. A bungalow together with the appurtenant compound at Ahmedabad was purchased by the company on March 28, 1964, under a registered sale deed for over Rs. 8 lakhs. Thereafter, building repairs, rewiring, installation of lift, etc., were carried on by the company for the purpose of converting the residential accommodation to business and storage accommodation and to render the premises more serviceable to its prospective licensees or lessees. The assessee claimed that it was in a position to offer services to licensees on and from October, 1964, and, therefore, claimed that expenditure of Rs. 48,004, which was incurred by it between October 1, 1964, and March 31, 1965, was a business expenditure for assessment year 1965-66. The Income-tax Officer, the Appellate Assistant Commissioner and all held that the company could not be said to have been ready to commence business prior to May 1, 1965, the day on which it gave on leave and licence part of the said building, and certainly not by October 1, 1964, and disallowed the deduction claimed. held on reference that the business activities of the company could be said to fall into three broad categories. The first business activity was to acquire, either by purchase or by any other manner, immovable property, so that the property could be ultimately given out either on leave and licence basis or on lease to others together with the appurtenant services. The second category of the business activity was to put the building accommodation and lands and gardens in proper shape and set up the appurtenant services so that ultimately the property could be given out on leave and licence basis. The third business activity was to actually give out accommodation on lease or on leave and licence basis. The property was acquired on March 28, 1964. Thereafter, for some time, various types of alterations and additions were being carried out and the activity of getting the property ready for its licensees and making it serviceable for its licensees was attended to and it was in the process of making this accommodation available to the intended lessees or licensees that the garden staff and other staff were engaged, pieces of equipment and gadgets. etc., were acquired by purchase or otherwise, lift was installed and ultimately with effect from May 1, 1965, a portion of the accommodation was actually given out on licence basis. Thus, though the company actually let out on leave and licence a portion of the building with effect from 1st May, 1965, the earlier and preceding part of its activities were also business activities to ensure that everything was in shape for the use of the occupier. Under these circumstances it was held that, at any rate from October 1, 1964, the assessee could be said to have commenced its business activity of the second category and, therefore, the assessee-company had commenced business on that date and all expenses incurred by the assessee between October 1, 1964, and March 31, 1965, namely, the amount of Rs. 48,004, could be said to have been incurred by it as business expenditure. ", "12. Thus, it is clear in the light of the decisions of in case [1973] 91 ITR 170 (Guj) and 's case [1976] 102 ITR 25 (Guj) that what the court has to consider is, whether the business of the assessee consists of different categories and whether the activity which was started earlier than the actual commencement of the production in the instant case could be said to have been an essential part of the business activity of the assessee. The company can be said to have set up its business from the date when one of the categories of its business activity is started and it is not necessary that all the categories of its business activities must start either simultaneously or that the last stage must start before it can be said that the business was set up. Again, as has emphasized in case [1973] 91 ITR 170 (Guj), the test to be applied is as to when a businessman would regard a business as being commenced and the approach must be from a commonsense point of view. ", "13. In the instant case, we find from the memorandum and articles of association of the company that under the objects clause of the company, the object of the company is to carry on the business of manufacture, buy or otherwise acquire, sell, import, export, distribute, deal in and dispose of and turn to account, produce ACSR, all aluminium and copper conductors, aluminium and copper binding wires, strips, covered conductor, and all types of wires, cables, telephonic and telegraphic cables and underground cables, and all other materials used in the manufacture of the above items as dealers in or manufacturers of any other articles or things of a character similar or analogous to the foregoing or any of them or connected therewith. One of the objects of the company was also to acquire, purchase and take over any concern engaged in the manufacture of electrical cables, conductors and accessories and to start such new concerns also in any area of the Indian Union and abroad. Article 3 of the articles of association is included in the articles dealing with capital and the marginal note is \"Taking over a concern\". The article is in these terms : ", "\"The directors after the incorporation of the company shall enter into an agreement between the company on one part and at Ahmedabad on the other part to acquire, purchase and take over as a going concern the business, properties, assets and the undertaking carried on under the name of '' at Ahmedabad and all or any of the belongings, stock-in-trade, funds, assets, rights, privileges, liabilities, obligations and contracts of the said concern with all its advantages, goodwill and licence providing for reimbursing for the services rendered by the said concern as the promoters and for the out of pocket expenses incurred by them for formation and promotion of the company and providing for utilising by the company the licence obtained by them from for manufacturing aluminium conductors, etc., which licence the said company had obtained for the purpose of such manufacture by and the extent of expenses incurred by them in the matter of investigating the possibilities and the desirability of such manufacture and negotiating with other firms.\" ", "14. As stated above, the company was incorporated on November 4, 1963. The board of directors of the assessee-company at their meeting held on April 6, 1964, took a note of the report of two of the directors about the value and particulars of machinery, stock and raw materials, stores purchase, furniture, and a statement of expenses incurred by , Ahmedabad. After taking note of that report, the directors unanimously resolved that the abovementioned details regarding the stock and value of machinery, raw materials, stores, furniture of , Ahmedabad, and the expenses incurred by them were verified and confirmed by the board. Two of the directors were authorised to take over the possession and make payments of all the expenses, rights, privileges, obligations towards know-how agreement and contracts of with all its advantages and licence providing for reimbursing for the services rendered by the said concern as the promoters and for the out of pocket expenses incurred by them for formation and promotion of the company, the licence obtained by them from for manufacturing aluminium conductors, etc. It is thus clear that the articles of association in terms referred to the taking over the business and assets of Messrs. , Ahmedabad. The assessee-company also, as part of the assets of that firm, acquired the know-how for the manufacture of aluminium conductors and other conductors and it got the benefit of the licence which was issued by in favour of . ", "15. Mr. has contended before us that the assessee-company was formed for the purpose of taking over the business of the going concern of , Ahmedabad, and it actually took over some of the contracts which had entered into with of different States in India. The assessee-company took over the raw materials in the shape of the aluminium wires worth Rs. 1 lakh or so and it also got the benefit of some contracts which the had entered into even before the assessee-company was incorporated. It seems that prior to June 26, 1966, the assessee-company had canvassed for and secured orders for the supply of aluminium conductors worth more than Rs. 1 crore. These orders were with different . The balance-sheet for the year ending December 31, 1964, shows that the company had secured loan from against mortgage of lands, buildings, plants and machinery, furniture and fixtures and other fixed assets of the company to the extent of Rs. 1,85,018. The balance-sheet disclosed that the company had given a counter-guarantee to , for guarantee given by bank for Rs. 4,000 for purchase of two cars and a further counter-guarantee to Central , for guarantee given to various of Rs. 58,750 against which margin deposit of Rs. 5,875 was paid. Thus, it is clear that long prior to the actual commencement of the manufacture of aluminium conductors, the assessee-company had acquired raw materials, had acquired know-how, the licence and also orders against which subsequently it supplied goods after the manufacturing activities started. Annexure \"L\" to the statement of the case shows that purchases of aluminium had commenced prior to June, 1965, and different quantities of aluminium and steel had been purchased and kept ready before the actual manufacture of aluminium conductors was started by the company. It is true that in the auditors' report it was stated that depreciation was not claimed but, as Mr. explained, since there was no production depreciation could not be claimed. This is not a case where altogether new machinery is installed after purchasing the same. The company was taking over the business of a going concern, namely, Messrs. , Ahmedabad. It got readymade the know-how, some part of the machinery, some stock of aluminium wire and some orders which had been secured by Messrs. from different electricity boards. The details of the contracts, annexure \"G\" to the statement of the case, shows that the first contract dated October 24, 1963, was from , Madras, and the company was actually incorporated on November 4, 1963. Thus, the promoters of the company, Messrs. , passed on the benefit of this contract to the assessee-company and that contract was worth Rs. 60,00,000. Over and above these contracts, other contracts were also secured by the company before it actually started production, as shown in annexure \"G\" to the statement of the case and by the time it was ready to commence the business, it had already secured orders worth Rs. 1,10,00,000. ", "16. The business of the company was to manufacture aluminium and other conductors and to sell them. In the instant case, the company has started securing orders well in advance of the date on which it actually started production of aluminium conductors. The selling of aluminium conductors manufactured by it is as much a part of the business activity of the assessee-company as the manufacture of the aluminium conductors. The orders acquired by the assessee-company from the different ensured ready market for the company when the company actually went into production and it purchased raw materials and stock in advance so that it could go into production on an appropriate scale and supply the goods against the orders which it had already received. As has been pointed out by in case [1973] 91 ITR 170 (Guj), even the activity of acquiring raw materials can be part of the business activity of manufacturing unit because, unless the raw materials are ready, the production cannot start and unless the production has started, the goods cannot be actually sold. All the time we have to bear in mind that the test is of commonsense and what in the eye of a businessman can be said to be the commencement of the business. Since selling the goods manufactured by the assessee-company is an important part of the business activity, it can be said that the assessee-company in the instant case commenced its business and its business was set up when it started securing orders against further production. One business activity may precede the other. What is required to be seen is, whether one of the essential activities for the carrying on of the business of the assessee-company as a whole was or was not commenced. In this case the assessee-company has commenced its business by securing orders first and going to production later on. While the orders were being secured simultaneously, the installation of machinery, putting up of the buildings, etc., was being attended to and when the company was ready to go into production, it actually started production and supplied goods against the orders which it had already booked. In view of this particular special feature of this case, namely, that the business activity of securing orders had practically started since the very date of incorporation of the company, it is obvious that the business activity of this assessee-company started from the day of its incorporation and not from the day when the production of aluminium conductors commenced. The was, therefore, in error in not analysing the activities of the assessee-company in the instant case into the essential components of that business activity and ascertaining whether one or the other of those component activities had commenced before the actual date of going into production. As pointed out in case [1976] 102 ITR 25 (Guj) what is material is the date when the company went into one or the other business activity and started one or the other component business activities of the company. In the instant case that was certainly done from the very date of the incorporation of the company. Under these circumstances, the assessee-company was entitled to have the loss of Rs. 46,970 for assessment year 1965-66 treated as business loss and also to have the loss of Rs. 58,600 incurred by it during the period January 1, 1965, to June 26, 1965, in the previous year relevant to assessment year 1966-67, treated as a business loss. The was in error when it overlooked this distinction between the component business activity and the business activity as a whole and the was in error in holding that the assessee had not commenced its business prior to June 26, 1965. ", "17. In the light of the above discussion, our answer to the questions referred to us is as under : ", "Question No. 1. - In the negative as to both the parts, that is, in favour of the assessee and against the revenue as to both the parts. ", "Question No. 2. - In the negative, that is, in favour of the assessee and against the revenue. ", "18. The Commissioner will pay the costs of this reference to the assessee."], "relevant_candidates": ["0000518848", "0000583481", "0000902937", "0001687667", "0001941378"]} {"id": "0001345052", "text": ["PETITIONER: S. GOVINDA MENON Vs. RESPONDENT: THE UNION OF INDIA & ANR. DATE OF JUDGMENT: 02/02/1967 BENCH: , V. BENCH: , V. WANCHOO, K.N. CITATION: 1967 AIR 1274 1967 SCR (2) 566 CITATOR INFO : R 1971 SC 823 (11) E 1972 SC 554 (15,16,17,62) RF 1979 SC1022 (11) ACT: All India s (Discipline and Appeal Rules), 1955--rr. 4(1), 5(2), 7(1). Madras Act XIX of 1951, ss. 20 , 29 , 80 , 81 , 99 , 100 (2) (m). servant acting in capacity of 'Corporation sole'--Allegations of misconduct in discharge of duties- Whether disciplinary proceedings can be taken against him under r. 4(1)--Or whether his decisions can only be questioned in appeal or revision-Whether suspension under r. 7(1) can be ordered only after framing of charges under r. 5(2)-Whether leases for over five years required to be by public auction-Whether Commissioner can himself initiate proposals of leases. HEADNOTE: While the appellant, who was a member of and the First Member of , Kerala State, was holding the post of Commissioner of , certain complaints were made against him relating to the grant of certain leases. instituted disciplinary proceedings against him and placed him under suspension under Rule 7 of the All India s (Discipline and Appeals) Rules, 1955. An Enquiry Officer was thereafter appointed under Rule 5 to investigate the charges. The appellant filed a petition for the grant of a writ of certiorari to quash the proceedings initiated against him and for a writ of mandamus calling upon to permit him to function as the First Member of . In the meantime, the Enquiry Officer having submitted a report to finding the appellant guilty of some of the charges. a show cause notice was issued to him. At this stage the appellant applied for and obtained an amendment of his writ petition and by the amended petition sought a writ of prohibition restraining from proceeding further upon and for quashing the show cause notice. The writ petition was dismissed by . In appeal to this Court, it was contended, inter alia for the appellant (i) that in view of s. 80 of Madras Act XIX of 1951 which provides that the Commissioner shall be a Corporation sole, a person acting in the capacity of a Commissioner is not a servant and there was therefore no jurisdiction to take disciplinary proceedings against him under Rule 4(1); (ii) that the Commissioner was exercising aquasijudicial function in sanctioning leases under the Act which were the subject matter of the complaints against him : his orders could therefore only be questioned in appeal as provided under s. 29(4) of the Act or examined by the in revision under s. 99 and not by the executive al through disciplinary proceedings; (iii) that the main charge against the appellant was not sustainable : there was nothing improper in his having sanctioned leases for over five, years without auction or in his having initiated proposals for leases in favour of specified individuals; (iv) that the proceedings under Rule 4(1) were invalid as there was no formal order 567 instituting these proceedings and (v) that the appellant could not be suspended until after charges had been framed against him. HELD : No case had been made out for the grant of a writ of prohibition under Art. 226. The King v. 1 K.B. 491; v. Comptroller- General of Patents and Designs 2 W.L.R. 760, 765; v. 59 C.L.R. 369, referred to. (i) Even if the appellant was not subject to the administrative control of the when he was functioning as Commissioner, his act or omission as Commissioner could form the subject-matter of disciplinary proceedings under Rule 4(1) provided the act or omission would reflect upon his reputation for integrity or devotion to duty as a member of the . [574 B] v. 17 Q.B.D. 536, 542; referred to. There was no force in the contention that the Commissioner has a separate legal personality as corporation sole and is therefore exempt from disciplinary proceedings. [575 F] (ii) The allegations against the appellant were to the effect that in exercising his powers as Commissioner, he acted in abuse of his powers and it was in regard to such misconduct that he was being proceeded against. Therefore, although the propriety and legality of the sanction to the leases may be questioned in appeal or revision under the Act, the was not precluded from taking disciplinary action for misconduct if this was called for. [577 H] (iii) The contention that the main charge against the appellant was not sustainable must be rejected. The Commissioner has no authority to sanction any leases without auction. Rule 1 requiring public auction framed under s. 100(2)(m) covers all leases and there is no exception in respect of leases exceeding 5 years failing within the scope of s. 29(1) . Furthermore, the Commissioner has no power under s. 20 to initiate specific proposals for lease of the trust properties. [579 A--C] (iv) The contents of the order instituting disciplinary proceedings under Rule 4(1) showed that the had accepted the proceedings :taken up to then and decided to go forward with the-disciplinary proceedings. There was therefore no formal order necessary to initiate disciplinary proceedings under Rule 4(1) of the Rules and the order passed by must be deemed to be an order under Rule 1 of the Rules initiating disciplinary proceedings. [580 F; 581 E, F] (v) It cannot be said that the suspension of the appellant under Rule 7 'Could only be ordered after- charges had been framed against him in :accordance with Rule 5(2). The framing of the charges under Rule 5(2) is necessary to enable the member of the service to, meet the case against him-whereas under s. 7(1) the may place him under suspension if satisfied that this is necessary having regard to the nature of the charges -and the circumstances of the case. The word \",charges\" in Rule 7(1) should be given a wider meaning as denoting the accusations or imputations against the member of the . [582 D-F] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1366 of 1966. ", "568 ", "Appeal from the judgment and order dated January 5, 1966 of in Original Petition No.1 of 1964. The appellant appeared in person. ", " and , for respondent No. 1. , , , and , for respondent No. 2. ", "The Judgment of the Court was delivered by , J. This appeal is brought, by certificate, against the judgment of dated January 5, 1966 dismissing Original Petition No.1 of 1964 filed by the appellant. ", "The appellant, is a member of . He was the First. Member of , Kerala State and was holding the post of Commissioner of . On the basis of certain petitions containing allegations of misconduct against the appellant in the discharge of his duties as Commissioner instituted certain preliminary enquiries and thereafter started disciplinary proceedings against the appellant and also placed him under suspension under rule 7 of the All India Services (Discipline and Appeal) Rules, 1955, hereinafter called the 'Rules'. A copy of the charges together with a statement of certain allegations was served on the appellant who thereafter filed a written statement of defence. After perusing the written statement the Government passed orders that his explanation was unacceptable and that the charges should be enquired into by an Enquiry Officer to be appointed under rule 5 of the Rules. Accordingly Sri a retired I.C.S. Officer was appointed to hold the inquiry. The appellant then filed the present writ petition before Kerala praying for grant of a writ of certiorari to quash the proceedings initiated against, him and for a writ of mandwmus calling upon. respondent No. 2, State of Kerala, to allow him to function as the. First Member of . As no application for stay was made and as no order of stay Was passed by Sri proceeded with the inquiry and submitted his report to finding the appellant guilty of charges 1 to 4 and 9. The union of India, after consideration of the report, issued a 'Show Cause Notice' Ex. P-9. The appellant thereafter filed an application before for amendment of the writ petition. The prayer in this amended petition was for the issue of a writ of prohibition restraining the first respondent -from proceeding further in pursuance of the 'Show Cause Notice' and also for quashing the same. The application for amendment was allowed by . The main contention of the appellant was that the proceedings initiated against him were entirely without jurisdiction as no disciplinary proceedings could be taken against him for acts and omissions with regard to his work as Commissioner under the Madras Act , 1951 (Madras Act XIX of 1951), hereinafter called the 'Act' and that the orders made by him being of quasi-judicial character can be impugned only in appropriate proceedings taken under that Act. After hearing the arguments advanced on both sides, rejected the objections raised by the appellant regarding want of jurisdiction and held that the, respondents had power to proceed with the inquiry into the charges. , J. on the other hand, took the view that quasi judicial decisions became final and conclusive if they were not set aside or modified in the manner prescribed by the statute and if the decisions are not so challenged, their correctness or legality must be taken to be conclusive, and such quasi judicial decisions cannot form the subject-matter of charges in disciplinary proceedings against the appellant. J. held that had therefore no jurisdiction to proceed with the inquiry on the first part of charge 1, charge 2, the first part of charge 3 and charge 4, but had jurisdiction to proceed with the inquiry with regard to the second part of charge No. 1, the second part of charge No. 3 and charge No. 9. In view of this difference of opinion the matter was placed before who agreed with the view taken by and in the result the writ petition of the appellant was dismissed. ", "It is necessary at this stage to set out the charges leveled against the appellant. Charges 1 to 4 relate mainly to the conduct of the appellant in sanctioning 30 leases regarding the private forest lands of 5 and charge No. 9 concerns the refusal by the appellant to attend a conference convened by the Chief Secretary to consider certain important matters connected with the national emergency. In 17 of the leases relating to the first charge the period of the lease is 36 years. In one case the period is 96 years and in the rest of the leases the period of lease is 99 years. The total area covered by all the leases comes to over 50,000 acres. Charges 1 to 4 and 9 read as follows: ", "\"1. That you, Shri , I.A.S., while employed in the Government. Service as member, and Commissioner, from 1- 2-1957 to 19-10-1962 issued sanctions granting leases of extensive and valuable forest lands belonging to the Devaswoms under your control as Commissioner such as (1) Pulpally Devaswom, (2) Kallaikulangara Emoor Bhagavathi Temple, (3) Nadivilla Vallathu Devaswom, (4) Kottiyor Devaswom, (5) Mundayanparamba Devaswom etc., in utter disregard of the provisions in the Madras Hindu Religious and Charitable Endowment Act, 1951 and the rules issued thereunder. In several cases you had yourself initiated the proposals for leases which should have been made by the trustee and acted in judgment on them by sanctioning the leases. In many cases of the leases aforesaid and otherwise generally in regard to the control and supervision exercised by you over the administration of endowments, your, conduct has been such as to render you unfit for the performance of your statutory duties under the Madras Hindu Religious and Charitable Endowments Act or as a responsible Officer of the Government. ", "2. That you had fixed the premium for lease, the rental and the timber value arbitrarily disregarding whether they were beneficial to the institutions as you were required to do under the Act and you there by caused wrongful gain to the lessees and wrongful loss to the . ", "3. That you not only initiated proposals for the leases and sanctioned them yourself, but also took further action for putting the lessees in possession of the lands and to fell the trees thereon for which you had no authority under the Act and the Rules. In particular you attempted to influence the Collector of Kozhikode, the statutory autho- rity for the sanctioning of leases of private forests under the M. P. P. F. Act by causing your Personal Assistant to write to the Personal Assistant to the Collector thereby bringing the weight of your Official position as his official superior in your capacity as 1st Member, to bear upon him and influence the Collector in the performance of his statutory duty. ", "4. That you sanctioned the lease of extensive forest lands with valuable tree- growth belonging to various Devaswoms to your relations, neighbours and friends contrary to the provision in Rule 3 of the All India Services (Conduct) Rules 1954, which enjoins every member of the service to maintain absolute integrity in all official matters. ", "9. That on 29-10-1962 you refused to attend a conference of the Members of and the Inspector General of Police which was called together by the Chief Secretary in the Secretariat to discuss important matters connected with the national emergency and was thereby guilty of gross dereliction of duty and of discourtesy to the Chief Secretary.\" ", "Section 20 of the Act provides that the administration of all religious endowments shall be subject to the general superintendence and control of the Commissioner; and that such superintendence and control shall include the power to pass any orders which may be deemed necessary for the proper administration of the endowments. Section 29 of the Act states that any sale, exchange or mortgage and any lease for a term exceeding five years of any immovable property belonging to any religious institution shall be -null and void unless it is sanctioned by the Commissioner as being necessary or beneficial to the institution, and the Commissioner shall, before according sanction, publish particulars of the proposed transaction, invite objections and consider them. Sub-section (3) provides for communicating a copy of the order granting sanction to the and to the trustee. Sub-section (4) provides for an appeal against the order of the Commissioner to the by the trustee or any person having interest. Section 99(1) states: ", "\"99. (1) The Government may call for and examine the record of the Commissioner or any Deputy or Assistant Commissioner, of any Area Committee or of any trustee in respect of any proceeding, not being a proceeding in respect of which a suit or an appeal to a Court is provided by this Act, to satisfy themselves as to the regularity of such proceeding or the correctness, legality or propriety of any decision or order passed therein; and, if, in any case, it appears to the Government that any such decision or order should be modified, annulled, reversed or remitted for reconsideration, they may pass orders accordingly: ", "Provided that the Government shall not pass any order prejudicial to any party unless he has had a reasonable opportunity of making his representations.\" ", "The jurisdiction for grant of a writ of prohibition is primarily supervisory and the object of that writ is to restrain courts or inferior tribunals from exercising a jurisdiction which they do not possess at all or else to prevent them from exceeding the limits of their jurisdiction. In other words, the object is to confine courts or tribunals of inferior or limited jurisdiction within their bounds. It is well-settled that the writ of prohibition lies not only for excess of jurisdiction or for absence of jurisdiction but the writ also lies in a case of departure from the rules of natural justice (See Halsbury's Laws of England, 3rd Edn., Vol. II, p. 114). It was held for instance by in that as the order of the judge of the consistory court of July 24, 1925 was made without giving the vicar an opportunity of being: heard in his defence, the order was made in violation of the principles of natural justice and was therefore an order made without jurisdiction and the writ of prohibition ought to issue. But the writ does not lie to correct the course, practice or procedure of an inferior tribunal, or a wrong decision on the merits of the proceedings. It is also well-established that a writ of prohibition cannot be issued to a court or an inferior tribunal for an error of law unless the error makes it go outside its (1) [1927] 1 K.B. 41 1. ", "572 ", "jurisdiction (See v. Comptroller-General of Patents and Designs,(1) and v. Whyte(2). A clear distinction must therefore be maintained between want of jurisdiction and the manner in which it is exercised. If there is want of jurisdiction then the matter is coram non Judice and a writ of prohibition will lie to the court or inferior tribunal forbidding it to continue, proceedings therein in excess of its jurisdiction. ", "The first proposition put forward by the appellant is that the Commissioner is a corporation sole and not a servant of the Government and against a person acting in the capacity of a Commissioner the Government have no jurisdiction to take disciplinary proceedings. Reference was made to s. 80 of the Act which states that \"the Commissioner shall be a corporation sole and shall have perpetual succession and a common seal and may sue and be sued in his corporate name.\" It was argued that the acts and omissions of the appellant in his capacity as Commissioner cannot be questioned in any disciplinary proceedings as the Commissioner is not a servant of the Government subject to its administrative control. Before examining this proposition it is necessary to consider rule 4 of the Rules which states: ", "\"4. Authority to institute proceedings and to impose penalty:- ", "(1) Where a member of the Service has committed any act or omission which renders him liable to any penalty specified in rule 3 ", "(a) if such act or omission was committed before his appointment to the service, the Government under whom be is for the time being serving shall alone be competent to institute disciplinary proceedings against him and, subject to the provisions of sub-rule (2), to impose on him such penalty specified in rule 3 as it thinks fit. ", "(b) if such act or omission was committed after his appointment to the Service, the Government under whom such member was serving at the time of the commission of such act or omission shall alone be competent to institute disciplinary proceedings against him and subject to the provisions of sub-rule (2), to impose on him such penalty specified in rule 3 as it thinks fit and the Government under whom he is serving at the time of the institution of such proceedings shall be bound to render all reasonable facilities to the Government instituting and conducting such proceedings. (1) [1953] 2 W.L.R. 760,765. ", "(2) 59 CL.R. 369. ", "573 ", "(2) The penalty of dismissal, removal or compulsory retirement shall not be imposed on a member of the Service except by an order of . ", "It is not disputed that the appropriate has power to, take disciplinary proceedings against the appellant and that he could be removed from service by an order of , but it was contended that I.A.S. Officers are governed by statutory rules, that 'any act or omission' referred to in rule 4(1) relates only to an act or omission of an officer when serving under the , and that \"serving under the \" means subject to ,the administrative control of the and that disciplinary proceedings should be, therefore, on the basis of the relationship of master and servant. It was argued that in exercising statutory powers the Commissioner was not subject to the administrative control of the and disciplinary proceedings cannot, therefore, be instituted against the appellant in respect of an act or omission committed by him in the course of his employment as Commissioner. We are unable to accept the proposition contended for by the appellant as correct. Rule 4(1) does not impose any limitation or qualification as to the nature of the act or omission in respect of which disciplinary proceedings can be instituted. Rule 4(1)(b) merely says that the appropriate competent to institute disciplinary proceedings against a member of the would be the under whom such member was serving at the time of the commission of such act or omission. It does not say that the act or omission must have been committed in the discharge of his duty or in the course of his employment as a servant. It is therefore open to the to take disciplinary proceedings against the appellant in respect of his acts or omissions which cast a reflection upon his reputation for integrity or good faith or devotion to duty as a member of the . It is not disputed that the appellant was, at the time of' the alleged misconduct, employed as the First Member of and he was at the same time performing the duties of Commissioner under the Act in addition to his duties as the First Member of . In our opinion, it is not necessary that a member of the should have committed the alleged act or omission in the course of discharge of his duties as a servant of the in order that it may form the subject-matter of disciplinary proceedings. In other words, if the act or omission is such as to reflect on the reputation of the officer for his integrity or good faith or devotion to duty, there is no reason why disciplinary proceedings should not be taken against him for that act or omission even though the act or omission relates to an activity in regard to which there is no actual master and servant relationship. To put it differently, the test is not whether the act or omission was committed by the appellant in the course of the discharge of his duties as servant of the ; The -test is whether the act or omission has some reasonable connection with the nature and condition of his service or whether the act or omission has cast any reflection upon the reputation of the member of the for .integrity or devotion to duty as a public servant. We are of the opinion that even if the appellant was not subject to the administrative control of the when he was functioning as Commissioner under the Act and was not the servant of the subject to its orders at the relevant time, his act or omission as Commissioner could form the subject-matter of disciplinary proceedings provided the act or omission would reflect upon his reputation for integrity or devotion to duty as a member of the . ,In this context reference may be made to the following observations ,of , L. J. in v. Foster(1) : ", "\"If a servant conducts himself in a way inconsistent with the faithful discharge of hip duty in the service, it is misconduct which justifies immediate dismissal. That misconduct, according to my view, need not be misconduct in the carrying on of the service or the business. It is sufficient if it is conduct which is prejudicial or is likely to be prejudicial to the interests or to the reputation of the master, and the master will be justified, not only if he discovers it at the time but also if he discovers it afterwards, in dismissing that servant.\" ", "It was also contended by the appellant in this connection that as the Commissioner was made a sole under s. 80 of the Act as a separate and independent personality, he was not subject to the control of the Government and no disciplinary proceedings 'Could be initiated against him. We do not think there is any substance in this argument. It is true that the Commissioner has been made a sole under s. 80 of the Act which states that the ,Commissioner shall have perpetual succession and a common seal and may sue and be sued in his corporate name. Section 81(1) of the Act provides for the establishment of a Fund called '' and further states that the Fund shall vest in the Commissioner. It was argued for the appellant that the corporate entity created by s. 80 of the Act has a separate legal personality. But there is a juristic distinction between a sole and a ; aggregate and the sole is not endowed with a separate legal personality as the aggregate. As said: ", "\"If our corporation sole really were an artificial person created by the policy of man we ought to marvel at its incompetence. Unless custom or statute aids it, it cannot (1) 17 Q.B.D. 536, 542. ", "575 ", "(so we are told) own a chattel, not even a chattel real. A different and an equally inelegant device was adopted to provide an owning 'subject' for the ornaments of the church and the minister thereof-adopted at the end of the Middle Ages by lawyers who held themselves debarred by the theory of corporations from frankly saying that the body of parishioners is a corporation aggregate. And then, we are also told that in all probability a corporation sole 'Cannot enter into a contract except with statutory authority or as incidental to an interest in land .......... Be that as it may, the ecclesiastical corporation sole is no juristic person'; he or it is either natural man or juristic abortion.\" (See 'Selected Essays of' Maitland\" pp. 100 & 103). ", " has also observed as follows \"It was a device for transmitting real property to a, succession of persons without the necessity for periodic. conveyances. It was never intended that this device should' be erected into a psychological person with a developed existence of its own In dealing with a corporation sole, the courts have never treated it as a conception similar in essential characteristics to a corporation aggregate. They have restricted its utility to the transmission of real, or exceptionally, by custom, as in v. , and now by statute, personal property from one holder of an office, lay or ecclesiastical, to his successor\" (See 'Elementary Principles of Jurisprudence' by , 2nd Edn. pp. 155 & ", "162).\" ", "We accordingly reject the contention of the appellant that the Commissioner has a separate legal personality as corporation sole under s. 80 of the Act and that he is exempt from disciplinary proceedings for any act or omission committed in his capacity as. Commissioner. In our opinion, the object of the legislature in enacting ss. 80 and 81 of the Act was to constitute a separate and to provide for the vesting of that in the Commissioner as a corporation sole and thereby avoid the necessity of periodic conveyances in the transmission of title to that . ", "We next proceed to examine the contention of the appellant that the Commissioner was exercising a quasi-judicial function in sanctioning the leases under the Act and his orders cannot therefore be questioned except in accordance with the provisions of the Act. The proposition put forward was that quasi-judicial orders, unless vacated under the provisions of the Act are final and binding and cannot be questioned by the executive Government through disciplinary proceedings. It was argued that an appeal is provided under s. 29(4) of the Act against the order of the Commissioner granting. ", "576 ", "sanction to a lease and that it is open to any party aggrieved to file such an appeal and question the legality or correctness of the order of the Commissioner and that the Government also may in revision under S. 99 of the Act examine the correctness or legality of the order. It was said that so long as these methods were not adopted the Government could not institute disciplinary proceedings and re-examine the legality of the order of the Commissioner granting sanction to the leases. ", "The first part of charge No.1 was that the appellant in utter disregard of the provisions of the Act and the Rules made thereunder, passed orders sanctioning the leases, in the cases mentioned in the statement of allegations. The relevant portion of the allegation reads as follows: ", "\"You were the Commissioner from 1-2-1957 to 19-10-62. Under section 29 of the Madras Hindu Religious and Charitable Endowments Act of 1951, any exchange, sale or mortgage and any lease for a term exceeding 5 years of any immovable property belonging to or given or endowed for the purpose of any religious institution shall be null and void unless it is sanctioned by the Commissioner as being necessary or beneficial to the institution. Under the proviso to the section, the particulars of the proposed transactions shall be published at least in one daily newspaper inviting objections and suggestions with respect. to the proposals and the suggestions and objections, if any, received should be considered by the Commissioner before the sanction is accorded. By the rules made under section 29 , clauses (1) and (3) of the Act, notice of the proposals for a lease for a period exceeding five years of immovable property belonging to a religious institution shall contain particulars of the nature of the proposed transaction, the correct description of the properties and information regarding the survey number, extent and boundaries, the probable price or the rental as the case may be. The rules made under section 100(2) of the Act provide that all leases of lands, buildings, sites or other immovable properties and rights belonging to a religious institution shall be made by public auction. Leases otherwise than by public auction should not be resorted to except with the previous sanction of the Deputy Commissioner. It follows from the above that the proposals for leasing out the lands have to be initiated by the Trustee or the 'Fit Person' and that such leases have ordinarily to be granted only by auction. in exceptional cases, lands may be leased out by the trustee without auction subject to the previous sanction of the Deputy Commissioner. This provision does not, however, authorise the Commissioner, to dispose of lands without auction. His duty is to give notice of the proposal which may be received from the trustee, to call for objections and suggestions and to accord sanction if he is satisfied that the transaction is beneficial to the . After the Commissioner accords sanction further steps for leasing out the lands have to be taken by the trustee who is the lessor and the proposed lessee. Contrary to the above provisions leases were sanctioned by you in the following cases. ", "It is apparent that the first part of charge No.1 read with the relevant allegations is that in utter disregard of the provisions of s. 29 of the Act and the Rules and without being satisfied that the leases were beneficial to the the appellant sanctioned them and this action of the appellant discloses misconduct, irregularity and gross recklessness in the discharge of his official duties. The charge is therefore one of misconduct and recklessness disclosed by the utter disregard of the relevant provisions of s. 29 and the Rules thereunder in sanctioning the leases. On behalf of the respondents it was argued both by Mr. and Mr. that the Commissioner was not discharging quasi-judicial functions in sanctioning leases under s. 29 of the Act, but we shall proceed on the assumption that the Commissioner was performing quasi- judicial functions in granting leases under s. 29 of the Act. Even upon that assumption we are satisfied that the Government was entitled to institute disciplinary proceedings if there was prima facie material for showing recklessness or misconduct on the part of the appellant in the discharge of his official duty. It is true that if the provisions of s. 29 of the Act or the Rules are disregarded the order of the Commissioner is illegal and such an order could be questioned in appeal under s. 29(4) or in revision under s. 99 of the Act. But in the present proceedings what is sought to be challenged is not the correctness or the legality of the decision of the Commissioner but the conduct of the appellant in the discharge of his duties as Commissioner. The appellant was proceeded against because in the discharge of his functions he acted in utter disregard of the provisions of the Act and the Rules. It is the manner in which he discharged his functions that is brought up in these proceedings. In other words, the charge and the allegations are to the effect that in exercising his powers as Commissioner the appellant acted in abuse of his power and it was in regard to such misconduct that he is being proceeded against. It is manifest therefore that though, the propriety and legality of the sanction to the leases may be questioned in appeal or revision under the Act, the Government is not precluded from taking disciplinary action if there is proof that the Commissioner had acted in gross recklessness in the discharge of his duties or that he failed to act honestly or in good faith or that he omitted to observe the prescribed conditions which are essential for the exercise of the statutory power. We see no reason why the Government cannot do so for the purpose of showing that the Commissioner acted in utter disregard of the conditions prescribed for the exercise of his power or that he was guilty of misconduct or gross negligence. We are accordingly of the opinion that the appellant has been unable to make good his argument on this aspect of the case. We pass on to consider the next contention of the appellant that the first part of charge No.1 is not sustainable because the only rules said to have been violated was the rule regarding auction. It was argued that the rule regarding auction did not apply to long-term leases falling within the scope of s. 29(1) of the Act and the first part of charge No.1 was therefore not sustainable. We are unable to accept this argument as correct. The statement of allegations in respect of charge No.1 sets out the provisions of s. 29 of the Act, the rules made under cls. (1) & (3) of that section and the rules made under s. 100(2)(m) of the Act and it says that contrary to the above provisions leases were sanctioned. Rule 1 of the Rules framed under s. 100(2)(m) of the Act reads as follows: ", "\"All leases of lands, buildings, sites and other immovable properties and rights belonging to a religious institution shall be made by public auction held in the places in which the properties are situate or the rights exist. The Deputy Commissioner may if he is satisfied that in any case the holding of an auction at a place other than the one in which, the properties proposed to be leased are situated will not be detrimental to securing a proper bid, permit such auction, but no auction shall be held in a village situated in a district other than the one in which the property is situate.\" ", "It was argued on behalf of the respondents that all leases had to be made by public auction and the Commissioner had no authority to sanction any leases without auction and that the power to waive the public auction is given to the Deputy Commissioner and not to the Commissioner under rule 9. In this connection reference was made by the appellant to rule 2(2) which provides that auction is to be conducted in the case of a lease for a period of one year or more within one month, and in the case of a lease for a period of less than one year, within 15 days after the date of the trustee's decision regarding the period for which the lease should be given. It was said that it would be impossible to conduct an auction in such a case within one month of the date of the trustee's decision because a minimum period of 30 days is prescribed between the notice and hearing of objections under s. 29 . It was said that some more time will necessarily have to be allowed for the trustees to send an application after they decide the period of the lease and for the Commissioner to issue the notice himself and to communicate his ,sanction to the trustees.' We do not think there is any substance in this argument because it is open to the trustee to hold the auction in the first place under Rule 1 even in the -case of a lease for a period over 5 years and then send the proposal to the Commissioner for sanction. We are accordingly of the opinion that Rule 1 made under s. 100(2)(m) of the Act providing for auction applies to leases for over 5 years under s. 29 of the Act and the Commissioner had therefore no authority for sanctioning any leases without auction under s. 29(1) of the. Act. In other words, Rule 1 requiring public auction framed under s. 100(2)(m) covers all leases and there is no exception in respect of leases exceeding 15 years falling within the scope of s. 29(1) of the Act. We accordingly reject the argument of the appellant on this aspect of the case. ", "As regards the second part of charge No. 1, it was argued by the appellant that there was no prohibition in the Act for the Commissioner to himself initiate the proposal for leases and therefore the charge cannot be sustained. The question for consideration is whether the Commissioner could initiate a proposal for lease in favour of a specified individual with all the terms and conditions. It is not disputed by the appellant that the trustee is the proper person to initiate a proposal for lease of the trust properties, but it is argued that under s. 20 of the Act the Commissioner can make specific proposals for leases and that he (:an himself sanction them under s' 29. The first part of s. 20 speaks of the general superintendence and control of the Commissioner over the administration of all religious endowments. The section goes on to state that. such superintendence and control shall include. the power to pass an order which may be necessary to ensure that such endowments are properly administered and their income is really appropriated for the purpose for which they were founded. In our opinion, the language of this section does not suggest that the Commissioner himself is vested with the power to make specific proposals for leases of trust properties. Under s. 29 of he Act the Commissioner is given a specific power to accord sanction in for any alienation and for leases for a term exceeding 5 years. That section implies that the proposals for leases must originate from the trustees and not from the Commissioner himself and that the only function of the Commissioner is to accord sanction to' such proposals. If the language of s. 20 is understood as suggesting that the Commissioner has power to initiate proposals it would mean that the Commissioner himself may sit in judgment over the proposals initiated by him. It cannot be supposed that the legislature contemplated such a consequence. In this context it is necessary to remember that under the general law the trustee is the person competent to make alienation or grant lease of properties. It is true that the Sup Cl/67-8 legislature has put a restriction on the power of alienation and the power of granting leases by s. 29 of the Act, but the statutory restriction on the power of the trustee should not be interpreted in such a way as to abrogate all his power in respect of alienation or. lease. We are accordingly of the opinion that the Commissioner has no power to initiate specific proposal for lease of the trust properties and the argument of the appellant on this point must be rejected The third part. of charge No.1 is not a separate charge but could be enquired. into along with other parts of charge No, ", "1. As regards charges 2, 3 and 4 it is not shown on behalf of the appellant that there is any defect of jurisdiction and that the respondents-cannot proceed with the inquiry. The next question to be considered is whether the disciplinary proceedings against the appellant were validly instituted as required by Rule 4(1)(b) of the Rules. It was submitted by the. appellant that there was no formal order of the Government for instituting these proceedings. For the respondents it was contended that the question is barred by res judicata by reason of the decision of in .(1). In that case, the order of suspens on was challenged by the appel- lant by a writ petition in O. P. No. 485 of 1963 -which was dismissed by , J. Against that decision the appellant 'preferred an appeal which was dismissed by the Division Bench. It was contended by the appellant that the only issue considered in that case was whether the appellant could be suspended before the charges were framed and the rule of res judicata was not applicable. We shall assume in favour of the appellant that the question is not barred by res judicata. Even so, we are of the opinion that to there is no substance in the contention of the appellant that there was no valid institution of the disciplinary proceedings under rule 4(1). A perusal of the order of the Government, Ex.P-1 'would itself indicate that disciplinary proceedings had been initiated against the \"appellant. Exhibit P-1 reads as follows: ", "\"The Government have received several petitions con-' taining serious alleptions of official misconduct against Shri , I.A.S. First Member, and formerly Commissioner, Hindu Religious and Charita-. ble Endowments (Administration). Preliminary enquires, caused to be conducted into the allegations have shown prima facie, that the officer is guilty of corruption,, nepotism and other irregularities of a grave nature. had also occasion to comment on the conduct of the officer in their judgment in O.P. 2306/62 delivered on - 12th February 1963. The judgment begins with the (1) [1963] K.L.T. 1162. ", "581 ", "observation that 'this case, if it has served little else, has served to expose a disquieting state of affairs regarding the disposal of valuable forest lands belonging to a religious institution known as of which I trust due notice will be taken by the competent authority in the interests of the public administration and the preservation of our forest wealth no less than in the interests of this particular institution'. ", "The judgment in the above case and the preliminary report of the X- police have disclosed the following, grave charges of serious irregularity and official misconduct on the part of the accused or The detailed enquiry into the charges by the X- is in progress. The evidence in the case has to be collected from a large number of officers who are subordinate to the accused officer in his capacity as First Member of . In the interest of the proper conduct of the enquiry it is necessary that the officer should not be allowed to continue in that post. Having regard to the nature of the charges against the officer and the circumstances the proper course would be to place him under suspension. , is therefore placed under suspension under Rule 7 of the All India Services (Discipline and Appeal) Rules 1955 till the disciplinary proceedings initiated against him are completed.\" ", "A perusal of this document shows that the had accepted the proceedings taken in, the matter uptil that date and had decided to go forward with the disciplinary proceedings. In our opinion, there is no formal order necessary to initiate disciplinary proceedings under Rule 4(1) of the Rules and the order of the State under Ex. P-1 must be deemed to be an order under Rule 4(1) of the Rules initiating disciplinary proceedings. It was lastly submitted, that the order of suspension of the appellant dated March 8,1963 is not in compliance with Rule 7 of the Rules which states: ", "\"7. Suspension during disciplinary proceedings ", "(1) If having regard to the nature of the charges and the circumstances in any case, the Government which initiates any disciplinary proceeding; is satisfied that it is necessary or desirable to place under suspension the member of the Service against whom such proceedings are started that Government may- ", "582 ", "(a) if the member of the Service is serving under it pass an order placing him under suspension, or It was pointed out that definite' charges were framed on June 6, 1963 and the Government had not authority to suspend, the appellant before the date of framing charges. Reference was made to Rule 5(2) which states: ", "\"5..(2) The grounds oil which it is proposed to take action shall be reduced to the form of a definite charge or charges, which shall be communicated to the member of the Service charged together with a statement of the allegations on which each charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case.\" ", "It was argued by the appellant that the word \"charges\" which occurs in Rule 5(2) and Rule 7 should be given the same meaning and no order of suspension could be passed under Rule 7 before the charges are framed under Rule 5(2) against the appellant. We do not think there is any substance in this argument. Rule 5(2) prescribes that the grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges. Under rule 5(3) a member of the is required to submit a written statement of his defence to the charge or charges. The framing of the charge under Rule 5(2) is necessary to enable the member of to meet the case against him. The language of rule 7(1) is however different and that rule provides that the may place a member of the under suspension \"having regard to the nature of ", "-the charge/charges and the circumstances in any case\" if the Government is satisfied that it is necessary to place him under suspension. In view of -,he difference of language in Rule 5(2) and Rule 7 we are of the )pinion that the word \"charges\" in rule 7(1) should be given a wider meaning as denoting the accusations or imputations against the member of the . We accordingly reject the argument of the appellant on this aspect of the case For the reasons already expressed we hold that the appellant has made out no case for the grant of a writ of prohibition under Art. 226 of the Constitution and the majority judgment of dated January 5, 1966 is correct and this appeal must be dismissed. In the circumstances of the case we do not make any order as to costs. ", "R.K.P.S. Appeal dismissed."], "relevant_candidates": ["0001502244"]} {"id": "0001355522", "text": ["PETITIONER: AND ANOTHER Vs. RESPONDENT: THE STATE OF MADHYA PRADESH. DATE OF JUDGMENT: 14/05/1954 BENCH: , (CJ) BENCH: , (CJ) MUKHERJEA, , VIVIAN BHAGWATI, , T.L. VENKATARAMA CITATION: 1954 AIR 465 1955 SCR 313 CITATOR INFO : R 1957 SC 478 (11) R 1957 SC 510 (14) RF 1957 SC 896 (12) R 1960 SC 475 (4,9,13,16) RF 1961 SC 4 (4,15) R 1961 SC 705 (17) R 1961 SC1602 (12) F 1961 SC1731 (13) RF 1964 SC 381 (38) R 1965 SC1107 (60) R 1966 SC1788 (10,14) RF 1967 SC 212 (27) RF 1967 SC 669 (21) RF 1968 SC1232 (15,53,82,95) RF 1970 SC 564 (185) RF 1973 SC 106 (147) RF 1973 SC1461 (227,450,566,1847,1848,1998) R 1974 SC 366 (56) E&D 1974 SC 543 (13) R 1974 SC1660 (18) R 1978 SC 851 (39) RF 1978 SC1296 (12) E 1980 SC 350 (4) R 1982 SC1126 (10,11) RF 1983 SC1019 (29,30) F 1987 SC1802 (9) R 1990 SC 560 (13,31) RF 1991 SC 672 (29) ACT: Constitution of India- Art. 19(1)(f) and (g)- Cotton Textile, (Control of Movement) Order, 1948, cl. 3- Promulgated under s. 3 of Essential Supplies (Temporary Powers) Act, 1946-PermitRequirement of-to dispose of or transport cotton textiles-Whether violation of Art. 19(1)(f) and (g)- Essential Supplies (Temporary Powers) Act, 1946 (XXIV of 1946) ss. 3, 4,6-Whether ultra vires the on ground of delegation Of legislative powers-s. 6-Whether repeals or abrogates-pre-existing laws-Effect of the section -Delegation-Essential power of legislation- Whether can be, delegated-Principles underlying it- Requirements.of permit by clauses 3 and 4 of the Control Order--Whether in conflict with ss. 27 , 28 , 41 of the Railway Act. 381 HEADNOTE: Clause 3 of the Cotton Textile (Control of Movement) Order, 1948, promulgated by under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, does not deprive a citizen of the right to dispose of or transport cotton tex- B tiles purchased by him. It requires him to take a. permit from the Textile Commissioner to enable him to transport them. The requirement of a permit in this respect cannot be regarded as an A unreasonable restriction on the citizen's right under sub-clauses (f) and (g) of article 19(1) of the Constitution. The policy underlying the Control Order is to regulate the transport of cotton textiles in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or a refusal of a permit is to be governed by the policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of power there is ample power in Courts to undo the mischief. Messrs. (( S.C.R. 803) distinguished. It was settled by the majority judgment in the Delhi Laws Act case ('S.C.R. 747) that the essential powers of legislation cannot be delegated. The must declare the policy of the law and the legal principles which are to control any -given cases and must provide a standard to guide the officials or the body in power to execute the law. The has laid down such a principle in the Act and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at given prices. The preamble and the body of the sections in the Essential Supplies (Temporary Powers) Act, 1946, sufficiently formulate the legislative policy and the ambit and the character of the Act is such that the details of that policy can only be worked out by delegating that power to a subordinate authority within the framework of that policy. Therefore section 3 of the Act is not ultra vires the on the ground of delegation of legislative power. Section 4 of the Act enumerates the classes of persons to whom the power could be delegated or sub-delegated by and it is not correct to say that the instrumentalities have not been selected by the itself. Accordingly section 4 of the Act is not ultra vires on the ground of excessive delegation of legislative powers. v. ( A.C. 708) applied. 382 The requirements of a permit by clause 3 and the provisions of clause 4 of the Central Order which empower the Textile Commissioner to direct a carrier to close booking or transport of cloth apparel, etc., are not in conflict with sections 27 , 28 and 41 of the Railways Act. These clauses merely supplement the relevant provisions of the Railways Act and do not supersede them.' Section 6 of the Act does not either expressly or by implication repeal any of the provisions of the preexisting laws ; nor does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means that the repealed statute must be regarded as if it had never been on the statute book. The effect of section 6 is not to repeal those laws or abrogate them but simply to by-pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) Act, 1946 or the orders made thereunder. Even assuming that the existing law stands repealed by implication, such abrogation or repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under - section 3 . Accordingly there is no delegation involved in the provision of section 6 and it cannot be held uncon- stitutional on that ground. JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 7 of 1953. ", "Appeal by Special Leave from the Judgment and Order of the High Court of Judicature at Nagpur dated the 15th. September, 1952, in Criminal Case No. 45 of 1951 from Hoshangabad, in Criminal Case No. 75 of 1949. ", ", and for the appellants. ", ", Advocate-General of Madhya Pradesh ( and , with him) for the respondent. 1954. May 14. The Judgment of the Court was delivered by facts giving rise to this appeal are these: The appellant, , and his wife, Smt. , were arrested at Itarsi, by on the 29th November, 1948, for contravention of section 7 of the Essential Supplies (Temporary Powers) Act, 1946, read with clause (3) of the Cotton Textiles (Control of Movement) Order., 1948, having been found in possession of new cotton cloth \" weighing over six maunds which cloth, it was alleged,was being taken by them from Bombay to Kanpur without any permit. After various vicissitudes through which the chalan passed the case was eventually withdrawn by to itself on the 3rd of September,'1951, as it involved a decision of constitutional issues. By its order dated the 15th September, 1952, upheld the provisions of sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, as constitutional. It also upheld the constitutionality of the impugned Order. Section 6 of the Act was held to be inconsistent with the provisions of the Railway Act but it was held that its unconstitutionality did not affect the prosecution in this case. directed that the prosecution should proceed and the records sent back to for being dealt with in accordance with law. Leave to appeal was given both to the appellants and the respondent and requisite certificates under articles 132 and 134 of the Constitution were granted. This appeal along with the connected appeal No. 6 of 1953 is before us on the basis of the said certificates. ", "Mr. , who appeared in this and the connected appeal, urged the following points for our consideration and decision: ", "(1) That sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, and the provisions of the Cotton Cloth Control Order contravened the fundamental right of the appellants guaranteed by article 19(1)(f) and (g) of the Constitution; ", "(2) That section 3 of the Essential Supplies (Temporary Powers) Act, 1946, and in particular section 4 were ultra vires, the on the ground of excessive delegation of legislative power; ", "(3) That section 6 having been found ultra vires, section 3 was inextricably connected with it and that both the sections should have been declared ultra vires on that ground; and (4) That the impugned Control Order contravened existing laws, viz., the provisions of section 27 , 28 and 384 41 of the Indian Railways Act, and was thus void in its entirety. ", "The respondent challenged the judgment of that section 6 of the Act was unconstitutional. In our judgment, none of the points raised by Mr. have any validity. On the other hand, we are of the opinion that was in error in declaring section 6 of the Act unconstitutional. ", "Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, provide as follows:- ", "\"3. (1) The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity, or for socuring their equitable distribution and availability at fair prices, may by order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide- ", "(a) for regulating by licences, permits or otherwise the production or manufacture of any essential com- modity;......... ", "(d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity; ", "4. may by notified order direct that the power to make orders under section 3 shall,in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by- ", "(a) such officer or authority subordinate to the Central Government, or ", "(b) such State Government or such officer or authority subordinate to a State Government as may be specified in the direction.\" ", "Section 6 runs thus: ", "\"6. Any order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act.\" ", "Under powers conferred by section 3 promulgated on 10th September, 1948, Cotton Textiles (Control of Movement) Order, 1948. Section'2 of this order defines the expressions \"apparel,\" \" carrier,\" \" hosiery,\" \" cloth \" and \" textile commissioner.\" Section 3 of the order runs as follows:- ", "\"3. No person. shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth, yarn or apparel except under and in accordance with- ", "(i) a general permit notified in the Gazette of India by the Textile Commissioner, or ", "(ii) a special transport permit issued by the Textile Commissioner.\" ", "Section 8 provides that the Textile Commissioner may, by notification in , prescribe the manner in which any application for a special transport permit under this Order shall be made. has prescribed forms for application for obtaining permits and the conditions under which permits can be obtained. The first question canvassed by Mr. was that the provisions of section 3 of the Control Order infringed the rights of a citizen guaranteed in subclauses (f) and (g) of article 19(1) of the Constitution. These sub-clauses recognise the right of a citizen to dispose of property and to carry on trade or business. The requirement of a permit to transport by rail cotton textiles to a certain extent operates as a restriction on the rights of a person who is engaged in the business of purchase and sale of cotton textiles. Clause (5) of article 19 however permits such restrictions to be placed provided they are in the public interest. During the period of emergency it was necessary to impose control on the production, supply and distribution of commodities essential to the life of the community. It was for this reason that the passed the Essential Supplies (Temporary Powers) Act authorising to make orders from time to time controlling the production, supply and distribution of essential commodities. Clause 3 of the Control Order does not deprive a citizen of the right to dispose of or transport cotton textiles purchased by him. It requires him to take a permit from the Textile Commissioner to enable him to transport them. The requirement of a permit in this regard cannot be regarded as an unreasonable restriction on the citizen's right under sub-clauses (f) and (g) of article 19(1). If transport of essential commodities by rail or other means of conveyance was left uncontrolled it might well have seriously hampered the supply of these commodities to the public. Act XXIV of 1946 was an emergency measure and as stated in its preamble, was intended to provide for the continuance during a limited period of powers to control the production, supply and distribution of, and trade and commerce in, certain commodities. The number of commodities held essential are mentioned in section 2 of the Act, and the requirement of a permit to transport such commodities by road or rail or other means of transport cannot, in any sense of the term, be said, in a temporary Act, to be unreasonable restriction on the citizen's rights mentioned in clauses (f) and (g) of article 19(1). was therefore right in negativing the contention raised regarding the invalidity of the Control Order as abridging the rights of the citizen under article 19(1) of the Constitution. ", "Mr. further argued that the Textile Commissioner had been given unregulated and arbitrary discretion to refuse or to grant a permit, and that on grounds similar to those on which in (1), this Court declared void section 4(3) of the Uttar Pradesh Coal Control Order, section 3 of the Control Order in question should also be declared void. This argument again is not tenable. In the first place, the appellants never applied for a permit and made no efforts to obtain one. If the permit had been applied for and refused arbitrarily they might then have had a right to attack the law on (1) A.T.R. 1954 S.C. 225 ; S.C.R. 80o3. ", "387 ", "the ground that it vested arbitrary and unregulated power in the textile commissioner. The appellants were not hurt in any way by any act of the textile commissioner as they never applied for a permit. They were transporting essential goods by rail without a permit and the only way they can get any relief is by attacking the section which obliges them to take a permit before they can transport by rail essential commodities. It may also be pointed out that reference to the decision of this in case(1) is not very opposite and has no bearing on the present case. Section 4(3) of the Uttar Pradesh Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withhold or cancel licences in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Section 4(3) of the Uttar Pradesh Coal Control Order was in these terms: \" may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded. Provided that every power which is under this Order exercisable by shall also be exercisable by the State Coal Controller, or any person authorized by him in this behalf In the present Control Order there is no such provision as existed in the Uttar Pradesh Coal Control Order. Provisions of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the Order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion ", "(i) A.I.R. 1954 S.C. 225; [1954] S.C.R. 803. ", "388 ", "cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief Presumably, as appears from the different forms published in the Manual, there are directions and rules laid down by for the grant or refusal of permits. ", "The next contention of Mr. that section 3 of the Essential Supplies (Temporary Powers) Act, 1946, amounts to delegation of Legislative power outside the permissible limits is again without any merit. It was settled by the majority judgment in the Delhi Laws Act case (1) that essential powers of legislation cannot be delegated. In other words, the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. In the present case the legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to in exercising its powers under section 3 . Delegation of the kind mentioned in section 3 was upheld before the Constitution in a number of decisions of their Lordships of , vide v. The (2), v. The (3), and v. (4)and since the coming into force of the Constitution delegation of this character has been upheld in a number of decisions of this Court on principles enunciated by the majority in the Delhi Laws Act case (1). As already. pointed out, the preamble and the body of the sections sufficiently formulate the legislative policy and the ambit and character of I I) S.C.R. 747. ", "(2) 7 A.C. 829. ", "(3) 9 A.C. II7. ", "(4) [I938] A.C. 708. ", "389 ", "the Act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the framework of that policy. Mr. could not very seriously press the question of' the invalidity of section 3 of the Act and it is unnecessary therefore to consider this question in greater detail. Section 4 of the Act was attacked on the ground that it empowers to delegate its own power to-make orders under section 3 to any officer or authority subordinate to it or or to any officer or authority subordinate to as specified in the direction given by . In other words, the delegate has been authorized to further delegate its powers in respect of the exercise of the powers of section 3 . Mr. contended that it was for the itself to specify the particular authorities or officers who could exercise power under section 3 and it was not open to the to empower to say what officer or authority could exercise the power. Reference in this connection was made to two decisions of of the United States of America- v. (1) and v. United States (2). In both these cases it was held that so long as the policy is laid down and a standard established by a statute, no unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the is to apply. These decisions in our judgment do not help the contention of Mr. as we think that section 4 enumerates the classes of persons to whom - the power could be delegated or sub-delegated by and it is not correct to say that the instrumentalities have not been selected by the itself. The decision of their Lordships of in 's case (3), completely negatives the contention raised regarding the invalidity of section 4 . ", "(1) 293 US 388. (3) [1938] A.C. 708. ", "(2) 295 U.S. 495. ", "390 ", "In that case the Lt.Governor in was-given power to vest in a marketing board the powers conferred by section 4A(d) of the Natural Products Marketing (British Columbia) Act, 1936. The attack on the Act was that without constitutional authority it delegated legislative power to the Lt.Governor in . This contention was answered by their Lordships in these terms: \" The third objection is that it is not within the powers of ' to delegate so-called legislative powers to the Lt.-Governor in , or to give him powers of further delegation This objection appears to their Lordships subversive of the rights which enjoys while dealing with matters falling within the classes of subjects in relation to which the Constitution has granted legislative powers. Within its appointed sphere is as supreme as any other ; and it is unnecessary to try to enumerate the innumerable occasions on which , Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act.\" The next contention that the provisions of the Textile Control Order operate as an implied repeal of sections 27 , 28 and 41 of the Indian Railways Act and are therefore invalid is also not well founded. The requirement of a permit by clause (3) and provisions of clause (4) of the Order which empower the Textile Commissioner to direct a carrier to close the booking or transport of cloth, apparel, etc., are not in direct conflict with sections 27 , 28 and 41 of the Railways Act. The Railways Act does not exclude the placing of a disability on a railway administration by the or any other authority. This clause merely supplements the relevant provisions of the Railways Act and does not supersede them. Similar observations apply to clause (5) which enables the Textile Commissioner to place an embargo on the transport of certain textiles from one area to another. There is nothing in the provisions of the order which in any way overrides or supersedes the provisions of the different sections of the Railways Act referred to above. ", "391 ", "The last contention of Mr. that section 6 having been declared invalid, section 3 is inextricably mixed with it and should also have been declared invalid is also not valid, because apart from the grounds given by for holding that the two sections were not so interconnected that the invalidity of one would make the other invalid, was in error in holding that section 6 was unconstitutional. Section 6 of the Act cited above declare, that an order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. In other words it declares that if there is any repugnancy in an order made under section 3 with the provisions of any other enactment, then notwithstanding that inconsistency the provisions of the Order will prevail in preference to the provisions of other laws which are thus inconsistent with the provisions of the Order. In the view of the power to do something which may have the effect of repealing, by implication, an existing law could not be delegated in view of the majority decision of this Court in In Re: Delhi Laws Act (1), where it was held that to repeal or abrogate an existing law is the exercise of an essential legislative power. The learned Judges of thought that the conferment of power of the widest amplitude to make an order inconsistent with the pre- existing laws is nothing short of a power to repeal. In our opinion the construction placed on section 6 by is not right. Section 6 does not either expressly or by implication repeal any of the provisions of pre-existing laws; neither does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means as if the repealed statute was never on the statute book. It is wiped out from the statute book. The effect of section 6 certainly is not to repeal any one of those laws or abrogate then;. Its object is simply to by-pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) (I) [1951) S.C.R, 747. ", "392 ", "Act, 1946, or the orders made thereunder. In other words, the orders made under section 3 would be operative in regard to the, essential commodity covered by the Textile Control Order wherever there is repugnancy in this Order with the existing laws and to that extent the existing laws with regard to those commodities will not operate. By-passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the order made under section 3 it does not operate in that field for the time being. The ambit of its operation is thus limited without there being any repeal of any one of its provisions. Conceding, how- ever, for the sake of argument that to the extent of a repugnancy between an order made under section 3 and the provisions of an existing law, to the extent of the repugnancy, the existing law stands repealed by implication, it seems to us that the repeal is not by any Act of the delegate, but the repeal is by the legislative Act of the itself. By enacting section 6 itself has declared that an order made under section 3 shall; have effect notwithstanding any inconsistency in this order with any enactment other than this Act. This is not a declaration made by the delegate but the itself has declared its will that way in section 6 . The abrogation or the implied repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under section 3 . The power of the delegate is only to make an order under section 3 . Once the delegate has made that order its power is exhausted. Section 6 then steps in wherein the has declared that as soon as such an order comes into being that will have effect notwithstanding any inconsistency therewith contained in any enactment other than this Act. being supreme, it certainly could make a law abrogating or repealing by implication provisions of any pre-existing law and no exception could be taken on the ground of excessive delegation to the Act of the itself. There is no delegation involved in the provisions of section 6 at all and that section could not be held to be unconstitutional on that ground, The result therefore is that in our opinion the provisions of sections 3, 4 and 6 of the Essential Supplies (Temporary Powers) Act, 1946, are constitutional and. the impugned order is also constitutional. Accordingly' this appeal is dismissed, and is directed to proceed expeditiously with the case in accordance with law. Appeal dismissed."], "relevant_candidates": ["0001466885"]} {"id": "0001358918", "text": [" ", "1. This has come up before us exercising jurisdiction over matrimonial causes under Section 17 of the Indian Divorce Act (Act IV of 1869), hereinafter referred to as the Act, for confirmation of a decree nisi passed by the learned Additional District Judge, 24 Parganas, dissolving the marriage. ", "2. It was a wife's petition under Section 10 of the Act. The grounds were adultery with the other aggravated circumstance, viz., cruelty. The petitioner has two minor children, born out of the wedlock living with her. The learned Judge passed the decree mentioned above and also directed custody of the children to the petitioner. The husband (respondent) was further directed to pay a monthly sum of Rs. 250/- to the wife (petitioner) as alimonv pending the suit. ", "3. I have reviewed the entire evidence. All pertinent facts are brought out to prevent the blinding of our eyes. The parties profess Christian religion. They were legally married. They were of Indian domicile at the date of the presentation of the petition They last resided within the jurisdiction of the below. There is no collusion between the parties. The petitioner has not been in any manner consistently accessory to or conniving at the adultery. There is no proof of connubial intercourse after the adultery, which would be a prima facie evidence of condonation. The petitioner has not slumbered in sufficient comfort and there is no unreasonable delay in presenting the petition. It is not a motion on behalf of the guilty party being adulterous herself. ", "Neither the petitioner is guilty of cruelty to the respondent or of separating herself from him or oi any wilful neglect or misconduct towards him. The husband on the other hand is held to be cruel. The said cruelty is such, as without adultery it would have entitled the wile a divorce from bed and board (a mensa et toro). The notice was properly served. Statutory six months have elapsed from August 1, 1961, the date of signing of the decree by the learned Judge but the records were only sent up by him to this Court on an application being moved by the petitioner specially for that purpose and not earlier. I regret to record that the said state of affairs is not very much creditable to the Court concerned. ", "4. The guilt of adultery in the present case is held to be proved, but circumstantially. There is a letter of the husband to the wife in the present case (Ext. 4) admitting the adultery but this letter stands in isolated glory. There is no other letter. There is no other item of the conduct of-the husband which is admitted and which is consistent with the contents of the said letter. Hence we would have to consider whether the proof by circumstantial evidence would be sufficient in such cases. ", "5. It is not necessary that there should be direct evidence of adultery; as it is not easily available, rather direct proof is very rare. It has been pointed out in a number of cases that rarely the parties are surprised in a direct act of adultery (Rayden on Divorce, 7th Edn. pp. 135, 136). But circumstantial evidence must be sufficiently strong and conclusive. Association coupled with opportunity, illicit affection, undue familiarity, guilty attachment are some of the instances which create an inference upon which the can act. There is an old legal maxim in Scotland which runs as follows : \"Solus cum sole in suspecto loco non presumitur dicere pater noster\", which being translated means that when a man and a woman are found together under suspicious circumstances, it cannot be presumed that they are saying their prayers. It would also be difficult to ascribe the theory of \"platonic love\" in such circumstances hut then again the circumstances must be such as would lead \"the guarded discretion of a reasonable and just man to the conclusion\" or \"fair inference as a necessary conclusion\". (See the observations of Sir , determined in the Consistory of London, in the classic case of v. , (1810) 161 ER 648. Though the said discretion is held to be unfettered in some cases but the same must not be exercised capriciously but cautiously and with utmost care. ", "6. In the case of an adultery, no higher proof of a fact is demanded than that it is established beyond all reasonable doubt. ( , (1823) 37 ER 1049). \"But what is reasonable doubt, is always difficult to decide and varies in practice according to the nature of the case and the punishment which may be awarded\", Lord pronounces in v. , 1951 (1) All ER 124. In my opinion, Lord 's dictum in v. , (1945) 2 All ER 190 that the same strict proof is required in the case of matrimonial offence as required in connection with criminal offence has been widely expressed. Tn my judgment the correct approach has been laid down by in v. , (1950) 1 All ER 804 that the should not be irrevocably committed to the view that a charge of adultery must be regarded as a criminal charge. The statute lays down a standard and puts adultery on the same footing as Cruelty, desertion or unsoundness of mind. The rule as to the standard of proof, laid down at p. 138 by Lord in in the case of ,. (1951) 1 All ER T24 (supra) has been accepted by their Lordships in the Supreme in the case of v. , . Their Lordships observed that the said rule should be followed by the Indian s under Section 7 of the Act. It is held that it is the duty of the s to pronounce a decree, only when it is satisfied that the case has been proved beyond reasonable doubt as to the commission of a matrimonial offence. The evidence must be clear and satisfactory beyond mere balance of probabilities. In that eventuality the provisions o; Section 14 of the Act would be taken to be satisfied. The evidence in the present case satisfies the above tests. ", "7. I am not unmindful of the general notions that the proceeding under Section 17 of the Act has no exact parallel in other countries; that the petition for divorce is not of the nature of an undefended civil suit; that such cases are not to be decided on ground of sympathy; and that it is also not enough for one of the parties to come forward and say exactly following the terms of the Act but it seems to me repugnant that should be so little in accord with the common notions of mankind that it should require the evidence to displace fantastic suggestions. As so often occurs in human affairs, however, the difficulty lies in drawing the line. But the , while exercising its discretion in matrimonial causes, must have regard not only\" to the rights and liabilities of the matrimonial persons wronged and of the wrongdoer respectively inter se but also to the interest of society and public morality, and to discourage vice and immorality. ", "8. Reluctant as I am, as a matter of general principle, to dissolve a union, unless it becomes impossible to allow it to continue and there are compelling circumstances in favour of dissolution; in all the circumstances of this case I think I should be going far beyond any other authorities and should be ignoring altogether the paramount consideration applicable to such cases, viz., the interest of public morality. I find that there is sufficient legal evidence to support the decree, ", "9. For all these reasons I am of opinion that the decree nisi should be confirmed and I order accordingly. There will be no order for costs. ", ", J. ", "10. I agree. ", ", J. ", "11. I agree."], "relevant_candidates": ["0194178068"]} {"id": "0001362835", "text": ["JUDGMENT , J. ", "1. This appeal raises a question of subrogation. The facts necessary for the disposal of the same lie in a narrow compass. The plaintiff sued to recover a sum of Rs. 8,000 on a mortgage dated 3rd October, 1925, executed by defendants 1 to 4 and their father late in her favour. There was a prior mortgage on the said property dated 1st August, 1914. In execution of a decree obtained thereon the property mortgaged was about to be sold. To discharge the said decree debt the mortgagors - late and his sons - agreed to sell a part of the said property, namely, plaint items 3 to 7, 9 and 15 to defendants 6 and 7. In pursuance of the said contract, the defendants 6 and 7 obtained a sale-deed dated 2nd November, 1933, and advanced the money with which the said decree debt was satisfied. They therefore claim a right of subrogation in respect of the said sum on the ground that by their having discharged the said decree debt they are subrogated to the rights of the mortgagee under the deed dated 1st August, 1914. The learned Subordinate Judge refused to give them the said relief on the ground that there is no registered instrument reserving the right as required by Section 92(iii) of the Transfer of Property Act. It is this view that is now canvassed in this appeal by Mr. on their behalf. ", "2. It is conceded that the matter is governed by Section 92 of the Transfer of Property Act, but it is contended that defendants 6 and 7 have a right of subrogation under Clause (i) of the said section. This contention is directly opposed to the interpretation placed on the said section by the decision in (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 at 375 (F.B.). But it is contended that the observations regarding the interpretation of that section are obiter and that a different note was struck in a recent judgment by their Lordships and , JJ., in v. Damodarasami A.I.R. 1938 Mad. 779. (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 at 375 (F.B.), I observed as follows: ", "The first clause enunciates no new principle (vide Section 74 of the Transfer of Property Act since repealed). It applies to all persons who have an interest in the equity of redemption and are under no personal obligation to discharge prior encumbrances. The third clause has been enacted to confer a benefit on persons who advance money to discharge an incumbrance only 'if the mortgagee has by a registered instrument agreed that such persons shall be subrogated.' The clause is intended to apply to all persons who acquire an interest in the mortgaged property by advancing moneys to discharge prior incumbrances and there is no warrant for restricting the scope of that clause to persons other than purchasers or mortgagees as contended by Mr. . The distinction between the two classes of cases aforesaid, namely, those who have an existing interest in the property and those who acquire an interest therein by advancing money, is well recognised in the law relating to subrogation. ", "3. This is also the view taken by pages 367 and 368 and by (page 362). Since the date of this decision the matter was considered by a Full Bench of and a Full Bench of . The Full Bench decision of is reported in v. Jai Singh sI.L.R. (1937) All. 880 (F.B.). , C.J., after considering the decision in (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 (F.B.) and the previous Full Bench decision in (1932) I.L.R. 54 All. 897 (F.B.), which was dissented from in (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 (F.B.) affirmed the view taken by us. In that case certain properties were sold for discharging the prior encumbrances and as there was no registered instrument in the case, the right of subrogation was refused. The learned Chief Justice concluded his judgment thus: ", "Having paid the amounts which under their contracts of sale they were bound to pay as part of their sale consideration, and not having obtained any agreement in writing registered that they would be subrogated to the rights of the prior mortgagee, they are not entitled to any such benefit. ", "4. The Full Bench decision of is reported in v. I.L.R. (1938) Nag. 206 (F.B.). The actual decision in that case is that: ", "A purchaser of a property with whom is left part of the consideration of the sale in his favour for paying off a mortgage but in whose favour there is no express agreement of subrogation in writing registered is not entitled to claim subrogation against a later mortgagee under Section 92 of the Transfer of Property Act as amended by Act XX of 1929. ", "5. It also affirms the view taken by us in our decision. Mr. canvasses the reasoning in both the above judgments. What he contends for is that the interpretation placed on Section 92 (iii) of the Transfer of Property Act was based upon a principle which according to him was not well founded. In the course of the judgment in (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 (F.B.), Varadachariar,. J., observed thus: ", "There is a well-established distinction between cases in which a person who has a pre-existing interest in property pays off a prior charge on that property for the protection of his own interest and cases in which a person acquires an interest in property only by reason of his advancing money to pay off an existing mortgage debt. It seems to me that the first clause of Section 92 must be held to relate to the first type of cases above referred to and the third clause to the second type. ", "6. This is also the view which I took. It is this view which Mr. questions and in support thereof relies upon the observations of , J., in v. Damodarasami I.A.R. 1938 Mad. 779. The learned Judge remarks thus at page 783: ", "We must say we find it difficult to follow the distinction adverted to. between a person with a pre-existing right and a person acquiring a right by reason of the advance he makes. Not the slightest support is to be found for this supposed distinction in any of the rulings of ; on the contrary, as already shown, it finds no countenance in them. ", "7. But the learned Judge did not however express any opinion on the interpretation placed by us. The learned Judge again remarks: ", "To construe Clause (i) and (iii) of the new Section 92 is not within our purview. It is not therefore for us to say whether the construction adopted in (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 (F.B.) is right or not, whatever may be our own view on the matter. ", "8. Mr. contends that the observations of , are well founded in principle and the distinction sought to be made in (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 (F.B.) does not exist and that on a proper construction of Section 92 , a person who advances money to a mortgagor and takes a mortgage or sale would come within Clause (i) of Section 92 . Considerable reliance was placed upon certain decisions of and the interpretation placed upon them by our and other s. Those decisions are v. (1883) L.R. 10 I.A. 62 : I.L.R. 9 Cal. 961 (P.C.), v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 (P.C.), v. (1901) 12 M.L.J. 73 : L.R. 29 I.A. 9 : I.L.R. 29 Cal. 154 (P.C.) (1912) 22 M.L.J. 468 : L.R. 39 I.A. 68 : I.L.R. 39 Cal. 527 (P.C.) and v. Jugal Kishore A.I.R. 1932 P.C. 99 (P.C.). I shall now proceed to examine the soundness of the contention and the scope of the said decisions. The cases in v. (1883) L.R. 10 I.A. 62 : I.L.R. 9 Cal. 961 (P.C.) and v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 (P.C.) were decided before the Transfer of Property Act (1882) was enacted and the other cases were decided after the enactment of the Act but before the recent amendment in 1929 and 1930. Both in 9 and 10 Calcutta cases, their Lordships applied certain rules of English Law as rules of justice, equity and good conscience. They approved \"of the rule in v. (1877) 5 Ch. ", "D. 634 and disapproved of the rule in v. (1817) 3 Mer. 210 : 36 E.R. 81, the one on the ground that it was in consonance with the rules of justice equity and good conscience and the other, on the ground that it was not. I shall first explain the scope of the rule in v. (1817) 3 Mer. 210 : 36 E.R. 81. It is well settled that a mortgagor who has created more than one encumbrance cannot set up a prior encumbrance which he has discharged against a later encumbrance. This is on the principle that a person who borrows money cannot be his own creditor and he would be derogating from his own grant. But v. (1817) 3 Mer. 210 : 36 E.R. 81 carried the principle a step further and applied the same principle to a person who acquired an equity of redemption. The soundness of the decision was always questioned in English Courts though it was not overruled. Its application was limited as far as possible. The limit of the rule as enunciated therein is thus explained by Lord in v. (1895) A.C. 18: ", "A purchaser who took a conveyance purporting to be free from encumbrances could not set up a mortgage which had been paid off out of the purchase money against an encumbrance subsequent in date of which he had constructive notice. The authority of that case cannot nowadays be treated as going beyond the actual decision. ", "9. This rule was considered by their Lordships of as not being in accordance with justice, equity and good conscience. They further stated that they were not prepared to extend that doctrine to India. ", "10. I shall now deal with the rule in v. (1817) 3 Mer. 210 : 36 E.R. 81. In that case, , M.R., after laying down the general proposition that the mere fact of a charge having been paid off does not decide the question whether it is extinguished, proceeded to explain in what cases it could be said to have extinguished and in what cases, not. He instanced the case of a charge paid off by a tenant for life without any expression of his intention and in such a case he observed that it was presumed that his intention was to keep it alive. He then proceeded to instance the case of an owner of an estate in fee or tail. In dealing with, this, he observed the presumption was the other way remarking that if there was no reason for keeping it alive, equity, would, in the absence of any declaration of his intention, destroy it, but if there was a reason for keeping it alive, equity would not destroy it. He then took the case of a purchaser and observed that if he paid off a charge, he might have it assigned to a trustee for himself or might have a declaration inserted in the deed that the charge should be treated as remaining on foot for the purpose of protecting him against any encumbrances. The learned Master of the Rolls then wound up thus: ", "The intention, therefore, if expressed, governs the case, but if no intention is expressed, then v. (1817) 3 Mer. 210 : 36 E.R. 81 says that in the incumbrance which is paid off is merged, and the subsequent incumbrancers let in. ", "11. On the actual facts of that case, he found that the intention was clearly shown not to let in the subsequent incumbrancer. According to v. (1877) 5 Ch. D. 634, a purchaser who pays off a charge must show an intention to keep it alive if he wishes to prevent its merger and such an intention was shown in that case. (This is also how Lord Justice understood the case.) See v. (1896) 1 Ch. 726 at 734. Let us see how applied the rule. In 9 case the right of subrogation was negatived. In that case one as the agent of an executed a mortgage in favour of one . During that time one was the . After the death of disputes arose between and another as to succession. In 1872 purporting to act as the proprietor executed a mortgage in favour of one and a part of the consideration for the mortgage was utilised in discharging the prior mortgage in favour of . Their Lordships of after citing the rule in v. (1877) 5 Ch. D. 634 as enunciated by , , proceeded to apply the said rule in the following words: ", "Applying that rule to the present case, it must be presumed, in the absence of any expression of intention to the contrary, that , who when he borrowed the money to pay off 's mortgage, claimed to be the owner of the estate, and was stated on the face of the bond to be so, intended that the money should be applied in paying off that mortgage, and in extinguishing the charge, there being no intermediate encumbrance. Although the money was paid by the plaintiff's gumastha to 's estate, it was paid with money borrowed from the plaintiff by , and for wfeich was liable to him. The mortgage was therefore paid off by and not by the plaintiff. ", "12. It will be seen that was treated as the owner in fee and the amount borrowed by him and paid in discharge of the prior mortgage was treated as money paid by the owner in fee. Though the money was expressly borrowed for the purpose of paying off the prior mortgage, their Lordships negatived the right of subrogation. The principle is this, that money received in consideration of a mortgage or sale of a property will be the property of the mortgagor or a vendor. Prima facie therefore the money that goes in discharge of the prior mortgage will be the money of the mortgagor or the vendor and therefore it will be payment by the owner in fee. Though in that case it was paid by the mortgagee's gumastha, still their Lordships observed that the mortgage was paid by and not by . Their Lordships remarked that as there was no intermediate encumbrance, the charge must be deemed to be extinguished and they declined to raise an equity in favour of . In order to have this equity there must be a declaration of his intention and in the absence of such a declaration for keeping it alive, their Lordships observed that it was extinguished. ", "13. I shall now take the 10 Calcutta case and see how the rule was applied. In that case, a person in execution of a money decree purchased in auction a certain property which was admittedly subject to more than one mortgage. As purchaser of the equity of redemption, after the purchase he discharged the first mortgage and was held entitled to the right of subrogation in respect thereof against the later mortgage. After referring to v. (1877) 5 Ch. D. 634 and v. (1817) 3 Mer. 210 : 36 E.R. 81, Sir formulates the question thus and answers it: ", "The obvious question to ask in the interests of justice, equity and good conscience is, what was the intention of the party paying off the charge? He had a right to extinguish it and a right to keep it alive. What was his intention? If there is no express evidence of it, what intention should be ascribed to him? In the familiar instance of a tenant for life paying off a charge upon the inheritance, he is assumed, in the absence of evidence to the contrary, to have intended to keep the charge alive. It cannot signify whether the division of interests in the property is by way of life estate and remainder or by way of successive charges. In each case it may be for the advantage of the owner of a partial interest to keep on foot a charge upon the corpus which he has paid. ", "14. Their Lordships therefore treated the case of a purchaser of an equity of redemption in exactly the same position as a life tenant, that is, a person having an existing interest in the property and discharging a prior mortgage by reason of such an existing interest and not being under a personal liability to pay the charge or being under a contractual liability to pay the encumbrance. The expression \"the owner of a partial interest\" would take in the case of a second and every subsequent mortgagee. The money that is paid by the second mortgagee or the purchaser in such a case would be his own money and cannot in any sense be considered to be the money of the mortgagor because the money is paid as owner of an existing interest, that is, the purchaser as owner of equity of redemption. Where a mortgagor mortgages or sells a property for discharging a subsisting mortgage, whether the mortgagor discharges by receiving the money or the mortgagee or vendee discharges by covenanting to do so retaining the consideration money for the mortgage or sale, it will in either case be a discharge by the mortgagor. Where the mortgagee or vendee covenants with the mortgagor to discharge a particular incumbrance, he assumes the duty of the mortgagor. Prima facie therefore as stated by in his book on 'Mortgages', Section 258 : ", "If the money be paid by one who has assumed the duty of paying the debt, either by contract with the mortgagor or with those who may have succeeded to his rights, this must be taken, as regards other subsequent interests, as a payment and as the payment was in pursuance of his agreement, it may be regarded as made with the mortgagor's money. ( Section 864 .) ", "15. In dealing with the case of a mortgagee who purchases an equity of redemption, Vice-Chancellor in v. (1877) 5 Ch. D. 634 states the principle thus at page 642: ", "A mortgagee who purchases an equity of redemption from a vendor liable to pay the mortgage debt, ought, it would seem, in the absence of contract to the contrary, ordinarily to be considered as giving up his claim as creditor against the estate, and not merely his personal remedy against the mortgagor. The parties can well arrange to the contrary, but not doing so, it seems reasonable that the debt satisfied for one purpose should be deemed satisfied for all purposes. That this involves a second mortgagee being placed in a better position than he previously was, does not seem to me to affect the question. Indeed the improved position of the second mortgagee would seem, after all, to be only consistent with his contract, if such contract be considered (as it reasonably maybe) to have been a contract that he should have a security on the property, but subject to a prior charge so long as the creditor having that charge remained unpaid. ", "16. It will be seen from this passage that it is open to the parties to arrange to the contrary. Of course, where no such arrangement is made, the English law modified the rule in v. (1817) 3 Mer. 210 : 36 E.R. 81, where a person advancing the money had no notice of an intermediate encumbrance or other circumstances which would raise equity in his favour. Even in such cases where from the terms of the mortgage deed or purchase deed it is clear that the intention to keep alive a charge is inconsistent with the real intention of the parties it would not be kept alive because the mortgagee or purchaser finds it would have been better for him to have kept the charge alive. Vide the observations of Lord Justice in v. (1896) 1 Ch. 726 at 734. v. (1883) L.R. 10 I.A. 62 : I.L.R. 9 Cal. 961 (P.C.) illustrates this rule very clearly. That case was one in which the mortgagee had not an existing interest but acquired an interest in consideration of certain money paid to the mortgagor and prima facie the money so paid to the mortgagor would be the money of the mortgagor with which the prior mortgage would have been redeemed. Both these cases illustrate the distinction between the case of a person having an existing interest and the case of a person acquiring an interest. As I said, these cases arose before the Transfer of Property Act was enacted. ", "17. Now let us see how the matter stood under the Act. Sections 74 and 75 of the Act enacted that every second or subsequent mortgagee on discharging a prior mortgage will be entitled to all his rights. The sections gave effect to the recognition of the principle that a person having an existing interest and not being under personal or contractual liability to pay an encumbrance is entitled to be subrogated to the rights of a prior encumbrance which is discharged. Section 95 provides for the case of a co-mortgagor. Section 101 provides for the case of a union of interests, that is, the case of an incumbrancer becoming owner of the property. It was applied also to the case of a purchaser of equity of redemption discharging a prior encumbrance. It will be seen from the language of Section 74 that it is a statutory right and the do not go into the question whether it was for the benefit of the subsequent mortgagee to keep the prior mortgage alive or not; the presumption which was automatically raised in such cases in England was recognised as a statutory right. ", "18. In the case of a person who advances money for the purpose of paying off a mortgage and takes a mortgage or sale, the principle would be that prima facie the prior mortgage is discharged unless there is an agreement that it should be kept alive or the mortgagee or the vendee shows that there is some reason for presuming or implying such an agreement in his favour as the subsistence of an intermediate incumbrance, that is, the onus is on him to prove it. The presumption and onus are not the same as in the two classes of cases, that is, in the case where a person having an existing interest discharges a prior mortgage and a person acquiring an interest discharges a mortgage. The result of the case-law in regard to presumption and onus in cases where a charge is not discharged by a mortgagor and in the absence of an expression of intention or an express agreement to have the charge kept alive may be summarised thus: ", "(1) If a charge is paid off by a tenant for life, he retains the benefit of it against the inheritance. The presumption is that he intends to keep it alive. v. (1877) 5 Ch. D. 634 and In re: v. (1905) 2 Ch. 587 at 602. The burden of proof is upon those who allege that in paying off the charge he intended to exonerate the estate. v. Earl of Egremont (1844) 7 Beav. 205 : 49 E.R. 1043. This is irrespective of any existence of an intermediate encumbrance. v. (1783) 2 Ch. 587 at 602 and v. (1818) 36 E.R. 751 at 784. ", "(2) Where a second or a subsequent mortgagee discharges a first or prior mortgage, the same presumption and onus are raised as in the case of a tenant for life. As remarks in v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 at 1046 (P.C.): ", "It cannot signify whether the division of interests in the property is by way of life estate and remainder, or by way of successive charges. ", "Section 74 of the Transfer of Property Act. ", "It would seem that applied the principle applicable to cases coming under this class to the case of a purchaser of an equity of redemption discharging a mortgage apparently on the ground that the charge was by an owner of an existing interest. v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 at 1046 (P.C.). It appears to me that it would more appropriately come under the next class of cases. ", "(3) Where the owner of an estate in fee pays off a charge, the presumption is the other way. Equity would in the absence of any declaration of his intention destroy it, but if there was a reason for keeping it alive such as the existence of another encumbrance, equity would not destroy it. v. (1877) 5 Ch. D. 634 at 645; also , In re: v. (1905) 2 Ch. 587 at 602. ", "As the learned Editor of the Article on 'Mortgages' in Hailsham's Edition of Halsbury's Laws of England, Vol. 23, points out in the footnote at page 516: ", "When a tenant in fee simply pays off a charge, the original presumption is in favour of merger. Where under the circumstances it is for his advantage to keep the charge alive, there may be a rebutting presumption which prevents merger. ", "Take the case of a person who becomes entitled to an equity of redemption by descent or devise. If he pays the charge created by his predecessor, the presumption is merger but he can keep it alive or if there is an intermediate incumbrance or other circumstances which will have to be proved, a rebutting presumption will be made in his favour. Vide the observations of Sir in v. (1851) 14 Beav. 542 : 51 E.R. 394 at 397, the case of an heir discharging an encumbrance created by his predecessor. The onus of proving such circumstances is on him, though admission of them might dispense with proof in some cases. ", "Under this category, in my opinion, would come the case also of a purchaser of an equity of redemption discharging a mortgage. The presumption would be merger but where there is an expression of an intention or an intermediate encumbrance or such a continuance would be for his benefit, a rebutting presumption will be made in his favour. This is the rule embodied in Section 101 of the Transfer of Property Act before the Amendment. ", "(4) Where a person advances money to discharge a mortgage and takes a mortgage or sale, the presumption is that the mortgage is extinguished. But if it is shown that there is an intermediate encumbrance or other circumstances which raise equity in his favour, the presumption shifts or is rebutted and an agreement with the borrower that the mortgage was to be kept alive is presumed or implied. The agreement is often implied from such circumstances as an arrangement with the mortgagor that after the discharge of the mortgage the mortgage deed should be surrendered to him and a new document would be executed in his favour or a sale free from encumbrance. Vide Dinabandhu Shaw Chowdhry v. (1901) 12 M.L.J. 73 : L.R. 29 I.A. 9 : I.L.R. 29 Cal. 154 (P.C.) and (1912) 22 M.L.J. 468 : L.R. 39 I.A. 68 : I.L.R. 39 Cal. 527 (P.C.). The onus is on him to prove them. (1897) 7 M.L.J. 198 : I.L.R. 20 Mad. 486 at 487. ", "Where there is no intermediate incumbrance or any other circumstances which would raise an equity in his favour, the original presumption that the mortgage is extinguished will not give place to a rebutting presumption in his favour and the onus is on him to prove that there was an express agreement to keep the mortgage alive. This principle is exemplified by the cases in v. (1883) L.R. 10 I.A. 62 : I.L.R. 9 Cal. 961 (P.C.) and (1910) 21 M.L.J. 180. ", "(5) Where one advances money to another for paying off a mortgage without stipulating for any security, the presumption is that the mortgage is discharged unless by an agreement with the borrower he is subrogated to the mortgage security. v. (1875) L.R. 2 I.A. 131 (P.C.). The rule in English law appears to be different. v. (1879) 11 Ch. D. 1 at 18, which appears to treat him as an equitable transferee of the debt. ", "19. Whether it is a case of an original presumption as in (1) and (2) or a case of rebutting presumption as in (3) and (4), the theory on which the presumption and onus are rested is that an intention in favour of a gift will not be presumed. Vide the observations of Lord Justice in v. (1912) 1 Ch. 735 at 764. This judgment was upheld in v. (1914) A.C. 132. ", "20. Both v. (1901) 12 M.L.J. 73 : L.R. 29 I.L.R. 9 : I.L.R. 29 Cal. 154 (P.C.) and (1912) 22 M.L.J. 468 : L.R. 39 I.A. 68 : I.L.R. 39 Cal. 527 (P.C.) are cases of mortgages and not purchases. In the 29 Calcutta case, one advanced a sum of Rs. 40,000 for the purpose of discharging two prior mortgages. The mortgages were discharged with the amount. A question arose whether the mortgage in favour of had priority over an attachment of property which came into effect before the date of the mortgage. Their Lordships from the nature of the transaction inferred an agreement that the mortgages intended to be discharged should be kept alive. After referring to v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 (P.C.), they remarked thus: ", "Here the mortgagor was paying off his own debts, but he was doing so for the benefit of and in performance of the agreement with him. ", "21. Therefore their Lordships recognised that though the money would prima facie become the money of the mortgagor as in the 9 Calcutta case, as the money was paid in performance of an agreement with the mortgagee, it should be kept alive. This their Lordships inferred from the fact that it was intended that the mortgagee should have an unencumbered property and the charge in his favour should have priority over all other charges. It would have been very easy for their Lordships to apply the rule under Section 74 of the Transfer of Property Act by treating as a second mortgagee; but they would not apply that section because that section was intended to relate only to a person having an existing interest in the property and discharging a prior mortgage out of his own money without being under a stipulation with the mortgagor to discharge it from and out of the consideration money for his mortgage. Therefore the distinction between a person having an existing right and the person acquiring an interest was kept in view by their Lordships of . Again, in (1912) 22 M.L.J. 468 : L.R. 39 I.A. 68 : I.L.R. 39 Cal. 527 (P.C.), there was a mortgage in favour of one on 17th February, 1888, which was effected for the purpose of discharging a zerpeshgi debt dated 20th November, 1874. Their Lordships gave the benefit of subrogation to in respect of the zerpeshgi deed dated 20th November, 1884, by inferring an agreement that that mortgage should be kept alive. At page 554 this is what their Lordships observe: ", "The Rs. 12,000 lent by were in accordance with the agreement between and applied in paying off the zerpeshgi debt, that on payment of that debt the zerpeshgi deed of the 20th November, 1874, was handed over to , and that when she lent her Rs. 12,000 intended to keep alive for her benefit and protection the charge which had been created by the zerpeshgi deed of the 20th November, 1884. ", "22. After referring to v. (1883) L.R. 10 I.A. 62 : I.L.R. 9 Cal. 961 and v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 (P.C.), they observe that applying the rule of justice, equity and good conscience, the charge was kept alive. It is also significant that their Lordships did not apply Section 74 of the Transfer of Property Act but invoked the principle of equity, thus again illustrating the distinction between a person having an existing interest and a person acquiring an interest. This principle was again illustrated in v. Jugal Kishore A.I.R. 1932 P.C. 99 (P.C.), where in respect of half of the purchase money their Lordships did not give the benefit of subrogation by implying an agreement because there was no intermediate encumbrance. does recognise that 29 and 39 Calcutta cases were based on conventional subrogation and that Section 74 of the Transfer of Property Act would not apply to cases where a person is under a contractual liability to discharge a mortgage. ", "23. In order therefore to avoid questions of intention and onus being gone into by and with a view to place the right of subrogation on a statutory basis the enacted Section 92 of the Transfer of Property Act. As remarked by , Section 92(i) deals with the case of a person having an existing interest and Section 92(iii) deals with the case where under the previous state of the law the right of subrogation was invoked on the doctrine of conventional subrogation. This follows from the plain language of the section and there is very good reason why the adopted this view. In the case of a person having an existing interest, there is no need to resort to any agreement express or implied and Section 74 of the Transfer of Property Act before the amendment gave partial recognition in favour of second and subsequent mortgagees and Section 92(i) only extended the said principle. In other cases the had to go into questions of intention, in certain cases coming to the conclusion that there was an intention to keep the mortgage alive and in certain other cases, that there was no such intention. The therefore enacted the rule in Section 92(iii) as it is always open to a person who advances money to enter into an agreement. I do not see any injustice in enacting such a rule. The legislature does give the benefit of the principle of subrogation even in such cases but the legislature requires that the person intended to take advantage of the benefit must comply with certain requirements, the requirements being a registered instrument for keeping alive the prior mortgage which can always be done even by the very transaction--sale or mortgage - under which the money was advanced by making a declaration that it was agreed between the parties that the prior mortgage was intended to be kept alive. ", "24. It is contended by Mr. that the words in Clause (iii), \"a person who has advanced money to a mortgagor money with which the mortgage has been redeemed\", are only intended to cover the case of a person who merely lends money without stipulating for any security as such a person cannot in law acquire any right of subrogation but for the statutory provision. There is no warrant for placing such a narrow construction. The words are wide enough to cover the case of a mortgagee or a vendee who advances money in consideration of a mortgage or sale. All that the section requires is that money must have been received by the mortgagor from the person who advances it and with which the mortgage must have been redeemed. What is contemplated by the section is the receipt of money by a mortgagor for the discharge of a mortgage and the redemption of such a mortgage with that money. The money may have been received by the mortgagor either by raising a loan by a mere personal security or by a transfer of the mortgaged, property by way of a mortgage or sale. In such cashes the money with which the mortgage is redeemed will be the money of the mortgagor obtained by him in any of the modes indicated above. Prima facie therefore the redemption of the mortgage being with the mortgagor's money, the mortgage is discharged. But as and by way of equity an agreement was inferred in cases where there is no express agreement for keeping the mortgage alive. As the inference of such an intention is dependent upon a number of circumstances and to avoid going into them, Clause (111) was enacted to confer a statutory right in such cases, provided the person seeking the benefit of it fulfils the conditions mentioned in the section. ", "25. I am therefore of the opinion that the vendees in this case not having obtained a registered agreement stipulating that they should be subrogated to the rights of the mortgage which they have discharged, they are not entitled to set up any claim of priority over the plaintiff's mortgage. In the result, the appeal fails and is dismissed with costs. ", ", J. ", "26. This was a suit on a mortgage dated 3rd October, 1925, executed by a Hindu father and his four major sons. Defendants 6 and 7 purchased seven items of the hypotheca on 2nd November, 1933. The sale of these items to defendants 6 and 7 was expressly stated to be in order to avoid at sale in execution of a decree based on a prior mortgage of the same property dated August, 1914. The question is whether defendants 6 and 7 are by virtue of their purchase subrogated to the rights of the mortgagee whose mortgage was redeemed with their money. The Court below has answered this question in the negative. ", "27. The law to be applied is admitted to be found in Sections 91 and 92 of the Transfer of Property Act. ", "28. In order to be subrogated to the rights of a mortgagee whose mortgage you redeem you must be either ", "(a) a person entitled to sue for redemption [Clause (i) of Section 92 ]; or ", "(b) a person who has advanced money to a mortgagor for redeeming a mortgage and a person who has contracted for subrogation with the mortgagor by a registered instrument [Clause (iii) of Section 92 ]. ", "29. Section 91 tells us who are persons entitled to sue for redemption. The mortgagor, of course, but the equitable doctrine of subrogation obviously does not apply to mortgagors. Persons entitled to institute a suit for redemption fall into three classes only: ", "(1) any person who has an interest in or charge upon the property mortgaged or an interest in or charge upon the right to redeem; ", "(2) any surety for payment of the mortgage debt or a part thereof; ", "(3) any creditor of the mortgagor who in a suit for administration of his estate has, obtained a decree for sale of the mortgaged property. ", "30. Excluding the mortgagor, this is an exhaustive list of the persons entitled to sue for redemption. The question is whether defendants 6 and 7 fall into one or other of these categories. The answer is that they obviously do not. They were not persons entitled to sue for redemption when they purchased property burdened with a mortgage-debt. They did not therefore by their purchase 'redeem' a mortgage. Since they were not persons entitled to sue for redemption their purchase cannot be deemed in equity to be a redemption. That is the principle laid down in the first clause of Section 92 . A rule of equity has been given statutory recognition, and it has been strictly confined and limited to persons entitled to sue for redemption. A person not entitled to sue for redemption who purchases property subject to mortgage becomes ipso facto a person entitled to sue for redemption which is the very reverse of saying that he is subrogated to the rights of the mortgagee. A person not entitled to sue for redemption who buys mortgaged property (that is, advances money to the mortgagor with which the mortgage is redeemed) may however contract with the mortgagor for the right to be subrogated to the mortgagee whose mortgage has been redeemed. But the contract must be in writing and registered. That is the gist of Clause (iii) of Section 92 . It is an extension of the principle \"caveat emptor\". A would-be purchaser of property subject to more than one mortgage must protect himself by a registered instrument. He must contract with the mortgagor for discharge of the prior mortgagee or mortgagees and for the rights of the prior mortgagee or mortgagees, and he can only do so by a registered instrument. Where a statute is as clear as Sections 91 and 92 are, authority is strictly speaking superfluous. The state of the law on the subject of subrogation before the Amending Act (XX of 1929) is a matter of academic interest, but as a matter of fact the Amending Act merely gave effect to a simple rule of equity, the application of which to the various classes of persons who claimed its benefits was difficult. The application of this rule of equity has now been placed on a statutory and easily intelligible basis. The rule has been defined and the persons to whom the rule is applicable have been classified. Conflict of opinion has been clarified and stilled. ", "40. I agree with my learned brother that this appeal fails and must be dismissed with costs. ", "41. The decree that we pass herein will be without prejudice to the right of the mortgagors and the purchasers of the equity of redemption to claim any relief under the Madras Agriculturists' Relief Act. The application that has been filed here for this purpose will be remitted to the lower for being dealt with on its merits. ", "42. The Memorandum of Cross-objections is dismissed. No costs."], "relevant_candidates": ["0000345775", "0000400190", "0000588924", "0000819496", "0001668648"]} {"id": "0001365874", "text": ["JUDGMENT , J. ", "1. This second Civil Appeal arises out of a suit for ejectment from a house and recovery of arrears of rent. The suit was decreed by and an appeal from the judgment and decree of was dismissed. ", "2. The suit was instituted by (respondent in this appeal) against Smt. (appellant in this appeal) claiming that he had terminated the tenancy by notice to quit and had obtained the permission of the District Magistrate under Section 3 of the U. P. (Temporary) Control of Rent and Eviction Act , 1947 to get over the bar to the institution of the suit created under that section. Admittedly the appellant's husband was originally the tenant of the house on a monthly rent of Rs. 35 from its former owner . The house was sold by to one Smt. . The latter in turn sold it to the respondent. After the purchase of the house, which professedly was for the purpose of his own residence, the respondent obtained the District Magistrate's permission dated 8-8-1966 to sue the tenant for eviction. He had already given a notice dated 24-3-1966 to the appellant terminating the tenancy and asking for vacation of the premises. The plaintiff filed a revision before the Commissioner but the same was dismissed on 20-1-1967. The suit was instituted the same day. ", "3. The suit was contested by the defendant-appellant on various grounds. The notice was said to be invalid since it was not given after grant of permission, and the permission to be invalid as the purchase was with full knowledge of the tenancy. , who had died about 10 years before suit, had left, besides his widow (appellant), three sons and daughters from her as also two sons from an earlier wife. Since permission had been obtained to file a suit against the widow and not the sons and daughters of and the notice terminating the tenancy had also been addressed to, and served upon, the widow alone, it was pleaded that the notice was bad for that reason and the permission was also illegal and without jurisdiction. The suit was also said to be not maintainable on the ground of the State Government having passed a stay order on the filing of a revision application by the defendant under Section 7-F of the aforesaid Act. ", "4. As to the plea of the notice being invalid on the ground that it was not given after the grant of permission by the District Magistrate, not again after the confirmation of the District Magistrate's order by the Commissioner, the learned Additional who tried the suit held that it was not necessary to give the notice after the grant of permission and that it could be given before that. The plea has not been pressed again at least in this Court, and for obvious reasons, as it has been held in several decisions of this Court that it is not necessary that the notice under Section 106 of the Transfer of Property Act be given only after the permission to evict has been obtained. About the additional ground (raised by an amendment of the written statement) that the notice was bad because it had been both addressed to and served upon the appellant alone though had left other, heirs and the tenancy devolved upon those other heirs also, the learned held that the appellant alone had been acting as, and asserting herself to be, the tenant and had for all practical purposes been recognised as the tenant and she was thus the sole tenant He was further of the opinion that even if the sons and daughters had inherited the tenancy rights they had impliedly surrendered those rights in favour of their mother. For these reasons he held the notice to have been rightly given to the appellant alone. ", "5. Regarding the plea of invalidity of the permission, it was conceded before the learned on the defendant's side that permission granted against one co-tenant held good against all the co-tenants. He held that the defendant had failed to show in what respect otherwise the permission was illegal and without jurisdiction. On the plea that had stayed the operation of the order of the lower authorities granting permission and the suit was therefore, not maintainable, the learned found that no order of stay of was on the record and so he rejected the plea. ", "6. After deciding also the minor controversies which related to the arrears of rent and damages, decreed the suit for ejectment and for recovery of a lesser amount as arrears of rent besides damages for use and occupation. ", "7. In the appeal filed by the defendant Smt. the second Additional Civil Judge who disposed the same held that it being undisputed that a tenancy is heritable in the absence of a contract to the contrary and that had left surviving him not only the appellant but also sons and daughters, those sons and daughters also became co-tenants of the house with the widow. However, relying on the decision of in , AIR 1963 SC 468 he held that the notice to the widow alone to determine the tenancy was sufficient and the suit for ejectment filed against her alone was also good at law. In regard to the permission, he too held that nothing had been shown as to how the permission was illegal or without jurisdiction and that so far as the ground that it was obtained against one of the co-tenants only was concerned, the decision in the case , 1958 All LJ 573 = (AIR 1959 All 33) showed that the permission obtained against one co-tenant was good against the entire body of the class designated as 'the tenant'. The plea based on an alleged stay order by was not seriously pressed in the appeal. Reiving upon the Full Bench case , 1965 All LJ 58 = (AIR 1965 All 498) (FB) the learned Judge held that the proceedings under Section 7-F aforesaid could have no effect on the suit already instituted. It may be stated that this position, has since been confirmed by the decision of in , AIR 1970 SC 763 = 1968 All WR (HC) 892. The appeal was accordingly dismissed. ", "8. In the second appeal the same legal pleas have been reiterated and argued. Learned counsel for both the sides have been heard at length. It may be noted here that another second civil appeal No. 152 of 1967 with a similar plea about invalidity of notice given to one co-tenant only was also tacked with this appeal under decision after it had been heard in part and this appeal is being decided after hearing also learned counsel for both the sides in that other second appeal. ", "9. On the side of the appellant it has been urged that the decisions of in India have no doubt been that a notice served on one of the co-tenants is a good notice to the other co-tenants but that is only where the notice is addressed to all. It is said that the notice in the instant case was addressed only to the appellant and was served only on her. For that reason the notice is said to be not in accordance with law and therefore, invalid for the purpose of terminating the tenancy. In regard to the decision aforesaid, the argument is that the same is distinguishable because it relates to a case of \"joint tenants\" as distinct from \"tenants-in-common\" which is the position of the appellant and the other heirs of who succeeded to the tenancy by inheritance. ", "Now the expression \"joint tenants\" has very often been used in those earlier cases too which have been cited on the appellant's side and on which reliance is placed for the argument that in order to be effective under Section 106 of the Transfer of Property Act, the notice must be addressed to all the co-tenants but it has not been urged that in those decisions also the expression \"joint tenants\" was intended to refer to co-tenants holding as \"joint tenants\" as distinguished from \"tenants-in-common\". It has also not been disputed that the expression \"joint tenants\" was used in those cases as a substitute for \"co-tenants\" and not with a view to indicate the nature of the estate held by the co-tenants. It therefore, needs to be examined whether the decision referred to above was peculiar to any \"joint tenancy\" estate held by the co-tenants in the tenancy and whether the same is not applicable to co-tenants who got the rights of a tenant in the tenancy on his death by inheritance. ", "10. At the outset it may be stated that there is no controversy on the proposition that even in the case of a monthly tenancy, the tenancy is inherited by the heirs of the tenant on his death. It was so held in , AIR 1940 Cal 89; v. , AIR 1966 Cal 447 and , AIR 1937 Nag 321. It is also not in controversy that except in the case of coparceners in a joint Hindu family under the Hindu Law, property under various inheritance laws in this country is taken by inheritance from a deceased owner by his heirs as \"tenants in common\" and not as \"joint tenants\" as between themselves. So it cannot be doubted that as between themselves the interest which the heirs of a deceased tenant inherit will itself be heritable and will not pass by survivorship and in that sense they cannot be said to hold it as \"joint tenants.\" That is why the expression \"joint tenants\" used in dealing with a case of more than one person holding together the tenancy either by original lease in their favour or by inheritance from a deceased tenant is meant to convey nothing more than the idea that such persons hold the tenancy as one entity and not that they hold that kind of estate which is governed by the rule of passing by survivorship. If the decision in AIR 1963 SC 468 can be said to be in relation to a case of joint tenants in such ordinary sense of the expression, then it would be directly relevant to the instant case, but if it laid down law of sufficiency of notice to determine lease by being given to one of the co-tenants to a case where the co-tenants were holding the tenancy by way of an estate of \"joint tenancy\", then the decision would be distinguishable, though the point would still require decision whether in other cases of joint tenancy also notice to one of the joint tenants will not be good and effective in law for the purpose of terminating the tenancy. This calls for an examination of the facts of case. AIR 1963 SC 468. ", "11. case, AIR 1963 SC 468 decided by arose out of a suit filed by the Trustees of for ejectment of and one from a piece of land. The land had been leased by the Trustees of on a monthly tenancy to two persons. Those two persons later assigned their rights in the lease to and and the assignment appeared to have been accepted by the lessors. Some years later, the Trustees of sent a notice to and requiring them to vacate the premises and deliver vacant and peaceful possession on a certain date. On non-compliance with the notice the suit was instituted against both the persons. It however, turned out that had died much earlier to the institution of the suit and the plaintiff therefore, amended the plaint by deleting the name of . The suit was contested, inter alia, on the ground that the notice of termination of tenancy was Invalid inasmuch as it had been served only upon one of the lessees (that is, ) and not upon the heirs and legal representatives of , who were also said to be necessary parties to the suit. The suit was decreed by by holding that the tenancy was a joint tenancy and notice to one of the joint tenants was sufficient and that the suit was also not bad for non-joinder of the legal representatives of . An appeal to was dismissed summarily. The dispute was taken to by upon having obtained from that Court special leave to appeal. In paragraph 7 of the judgment of it was observed:-- ", "\"The argument about notice need not detain us long. By the deed of assignment dated February 28, 1947, the tenants took the premises as joint tenants. The exact words of the assignment were that '.....the assignors do and each of them doth hereby assign and assure that the assignee as joint tenants.....'. The deed of assignment was approved and accepted by the Trustees of , and and the appellant must be regarded as joint tenants. The trial Judge, therefore, rightly held them to be so. Once it is held that the tenancy was joint, a notice to one of the joint tenants was sufficient and the suit for the same reason was also good, Mr. , in arguing the case of the appellant, did not seek to urge the opposite, In our opinion, the notice and the frame of the suit were, therefore, proper, and this argument has no merit.\" ", "12. It can very well be argued that the expression \"joint tenants\" used in the deed of assignment and used in the above paragraph by their Lordships of was meant to convey no other sense than that and did not take separate and exclusive interests under the assignment and that they were joint tenants in the sense that they were to hold the lease jointly and not with separate Interests therein. In the Kerala High Court case , AIR 1968 Ker 229 a angle Judge of that Court interpreted 's case, AIR 1963 SC 468 to be one relating to a tenancy held by two persons as \"joint tenants\" in the other sense. It was observed at page 229, column 2 of the report:-- ", "\"That is clear from the emphasis placed by their Lordships on the circumstance that the tenants took the premises as joint tenants, the deed of assignment by which they acquired the lease expressly providing that they were taking as joint tenants. Where joint owners are joint tenants there is unity of title, unity of interest and the right of survivorship in addition to unity of possession so that it might be said that any one of the joint tenants represents the entire estate--indeed in the case already referred to it would appear that one of the two joint tenants had died and the lease had vested solely in the other by survivorship before notice to quit was served on the other so that there was no question of the legal representatives of the deceased joint tenant having any interest whatsoever in the lease so as to require that notice should go to them.\" ", "The learned Judge proceeded further to observe at page 230 column 1:-- ", "\"Where, however, the joint owners are only tenants in common there is only unity of possession, not of title or interest, and to determine a tenancy so held in accordance with Section 106 of the Transfer of Property Act notice must be addressed to all the tenants though proof of service on one will be prima facie proof of service on all. , AIR 1918 PC 102 and , AIR 1925 Cal 752. In the words of the section, notice must go to every party intended to be bound by it, and if it is not issued to any of the joint owners of the lease there is no determination of the lease so far as he is concerned. A lease cannot be determined piecemeal and hence it follows that there is no determination even so far as the others are concerned.\" ", "The argument in the second quotation will be discussed later on, but the observation in the latter part of the first quotation itself would indicate that their Lordships of had not in their mind the consideration, that and were owners of the tenancy as \"joint tenants\" in the special sense, with the right of survivorship as an incident thereof, for in that case it would have been enough for their Lordships to dispose of the controversy by merely saying that upon the death of his interest passed to and he became the sole lessee, with no necessity in consequence of any notice going to the heirs of or of their impleadment as defendants in the suit. On the other hand, their Lordships proceeded to lay down that a notice to one of the joint tenants was sufficient and the suit against one joint tenant was for the same reason also good. However, reference to an old well-known case relied upon on the respondent's side may also be made. That case is AIR 1918 PC 102 in which it was laid down that in the case of joint tenants each is intended to be bound and service of a notice to quit upon one joint tenant is prima facie evidence that it has reached the other joint tenants. There was a suit by the landlords of a piece of land against the tenants and sub-tenants who were actually in possession. The set of defendants who were the tenants consisted of seven persons some of whom were members of a joint Hindu family of which the others were once such members but had ceased to be so. This fact is significant in so far as it shows that all the seven tenants were not, as between themselves, bound by any rule of passing of their interest by survivorship. It may also be stated that they had come to possess what was formerly the tenancy holding of one and that they were being treated as tenants in place of who was treated as dead. In that case notice was sent to all the seven persons separately but a contest was entered into as to whether some of them who had not been personally served with notice could be regarded as duly served. It was in the context of this contest that their Lordships of the observed at page 110, column 2 of the report at the very commencement of their discussion on this controversy:-- ", "\"Next and lastly as to the service of the notice to quit. The 106th section of the Transfer of Property Act , 1882, only requires that such a notice should be tendered or delivered to the party intended to be bound by it either personally or to one of his family or servants at his residence, or if such tender or delivery be not practicable, affixed to a conspicuous part of the property. The per-sonal tender or delivery may take place anywhere; the vicarious tender or delivery must take place at the residence of the person intended to be bound by the notice. Well in the case of joint tenants, each is intended to be bound, and it has long ago been decided that service of a notice to quit upon one joint tenant is prima facie evidence that it has reached the other joint tenants. Doe d. Macartney v. , (1805) 5 Esp 196 = 8 RR 848, Doe d. v. , (1806) 7 East 551 = 8 RR 670 = 3 Smith KB 517, v. , (1856) 6 Ir CLR 367\". ", "13. About this case it has been argued on the appellant's side that as a matter of fact notice was issued to all the seven co-tenants and the notice was also held to have been sufficiently served on each one of them and in the circumstances the observation that in the case of joint tenants each is intended to be bound and service of a notice to quit upon one joint co-tenant (is evidence that it has reached the other joint tenants?) is prima facie an obiter dicta. In this connection reliance was placed on the case, , AIR 1967 SC 997 in which it was observed that a decision made on a concession made by parties, even though principle conceded was accepted by without discussion, cannot be given the same value as a decision given upon a careful consideration of pros and cons of the question raised. The judgment in the case no doubt did not discuss the grounds for the rule enunciated, but that appears to be because the rule was taken to be well recognised. There were three English cases cited in that connection. At any rate, the service of a notice addressed to all the co-tenants upon one of them only has been held to be sufficient service for terminating the tenancy in a number of decisions of various following this case. Some of these cases are Pt. v. L. , 1956 All LJ 650; , AIR 1964 All 52; v. , AIR 1965 All 287; , AIR 1929 Cal 651; ., AIR 1966 Cal 63; in Coun-cil, AIR 1945 Nag 255; , AIR 1935 Bom 247 and Mst. v. , AIR 1964 Bom 96. ", "In none of these cases, however, the question arose whether a notice addressed to one or some only of the joint tenants and served upon him or some was sufficient to terminate the tenancy, since the notice was addressed to all. It was in the case, AIR 1925 Cal 752 that It was specifically decided that the notice must be addressed to all and the same view has been taken in the Kerala High Court case. AIR 1968 Kerala 229. In the Calcutta case the case cited above was distinguished on the ground that the notices were addressed to all the joint tenants by being sent to all of them. The rases (1805) 5 Esp 196 = 8 RR 848 and (1806) 7 East 551 = 8 RR 670 = 3 Smith KB 517 referred to in the case were also considered. The first case was said to have no value because in India the matter is governed by the provisions of the Transfer of Property Act About the other case it was said that the matter was left to the Jury. It cannot be supposed that their Lordships of the had not in mind the statutory provision in Section 106 of the Transfer of Property Act when they laid down the rule that \"in the case of joint tenants each is intended to be bound, and it has long ago been decided that service of a notice to quit upon one joint tenant is prima facie evidence that it has reached the other Ioint tenants\". Indeed they were specifically considering Section 106 of the Transfer of Property Act and the use of the words \"each is intended to be bound\" was with reference to the language of the section. The relevant part of Section 106 is in the following words:-- ", "\"Every notice under this section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party or to one of his family or servants, at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.\" ", "14. One requirement under the above quoted provision is about the form of the notice, namely, that it should be in writing and signed by or on behalf of the person giving it. The other is about service of the notice. ", "15. It has not been laid down in the: section that the notice should be addressed to all co-tenants or to every one of them. In regard to service of notice, it is required that it be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party or to one of his family or servants at his residence, or, if such tender or delivery is not practicable affixed to a conspicuous part of the property. If the words \"party who is intended to be bound by it\" are interpreted to mean each one of the co-tenants where the tenancy is held by more than one person jointly, then notice must be served on each one of the co-tenants and that would be in direct conflict with the rule about which there is no controversy that service of a notice on one of the co-tenants would be sufficient service in respect of all (provided it is addressed to all). The fact of its being addressed to all will be immaterial if the notice must be served on each co-tenant individually in order that all of them may be bound. The rule of sufficiency of service of notice on one co-tenant in the case of co-tenancy can be in conformity with the requirement of the section only if the co-tenants are taken to constitute one \"party\" so that service on any one only of them will be service on the party intended to be bound. It must be in this background that it was laid down by in case, AIR 1918 PC 102 that \"well in the case of joint tenants, each is intended to be bound\"; in other words, if a notice is given to one of the joint tenants, it means that the joint tenants as a whole are intended to, be bound by the notice. It is an incident of 'tenancy' that it is one and even though more than one person may hold it they hold it together as one. It is well recognized that a landlord cannot terminate the tenancy piecemeal, nor can some out of the several co-tenants terminate it for themselves only. Co-tenants who come to hold a tenancy by inheritance may, for the purposes of succession have an estate as \"tenants in common\" and not \"joint tenants\", but the special incidents attaching to a tenancy will not be changed upon the tenancy passing to more than one person by inheritance. In so far as their relationship with the landlord is concerned, they hold the tenancy jointly and for the landlord they constitute one unit. So even if a notice is addressed to one or some of the co-tenants, it must be effective as against all, the only limitation to this being that there is nothing to show that the tenancy is intended to be terminated piecemeal and it is clear that the intention is to terminate the tenancy as a whole. It appears that it is by way of this safeguard that while laying down the rule in the several decisions mentioned above that service of notice on one co-tenant will be sufficient service of notice for terminating the tenancy that the qualification has been added that the notice should be addressed to all the co-tenants. There does not appear to be any sanctity otherwise behind this qualification. In this connection the following passages from the report of AIR 1964 Bom 96 which, if I may say so with respect, contain also my line of thinking, may be usefully reproduced:-- ", "\"(11) In this connection it is contended by the learned counsel for the appellants that the provisions of Section 11 of Hindu Succession Act in terms lay down that, property acquired by heirs who inherit by intestate succession is acquired by them as tenants-in-common and not as joint tenants. In this context reference is also invited to paragraph 31 of Mulla's Hindu Law, page 99, 12th edition. In my judgment, the phrase \"tenants-in-common\" or \"joint tenants\" used in Section 19 of the Hindu Succession Act or in other texts, when considering the rights of owners of property inter se cannot be confused with the right to hold land as joint tenant in the sense as joint lessees or co-lessees or co-tenants of property such as the subject-matter of the suit. The word \"tenant\" in Section 19 is not used in the sense of lessees. That word is used in the sense of owners of property whether they are joint owners of property or holding in defined shares. It is an incident of ownership that has been referred to in Section 19 and that incident in the case of persons holding as tenants-in-common is that the devolution in the case of each of these tenants-in-common would be according to the personal law while in the case of persons holding as joint tenants it will be by survivorship. The expression is not germane in deciding whether the leasehold is held as joint tenants. That expression may have led to some confusion and it is preferable to refer to rights of more than one person holding under the leasehold vis-a-vis the landlord as co-tenants or co-lessees. If understood in that sense, there will be no difficulty in holding that all the co-lessees or co-tenants held as joint tenants in the sense that they have a single tenancy relationship with the landlord and they are not different tenants vis-a-vis the landlord. ", "(12) If this is the correct interpretation of the position of persons even succeeding under Section 19 to a leasehold interest of the deceased Hindu, there would be no difficulty in holding that notice to one of the joint tenants in this case should be held to be a valid and good notice provided notice is intended to be notice to all these joint tenants. It is in that sense that the decision of in ILR 46 Cal 458 = (AIR 1918 PC 102) has been applied in several Courts.\" ", "16. In contrast, the view taken in the Kerala case, on the one hand, that the expression \"party intended to be bound by it\" means in the case of co-tenants, each co-tenant individually and, on the other hand, that notice can be served on one of them to bind all, would appear to be self-contradictory and also in conflict with the provisions of Section 106 about service of notice with the said interpretation of that expression. ", "17. I accordingly hold that both on the authority of case, AIR 1963 SC 468 aforesaid and otherwise (i.e., if it applies only to joint tenants with right of survivorship) the notice served on the appellant was sufficient to terminate the tenancy since on the facts of this case, it must be inferred that by the notice it was intended to terminate the tenancy as a whole and not in part. ", "18. It may be noted that the appellant was for all practical purposes acting as the tenant. She admitted the averment in the plaint that the house was in her tenancy. It was for the first time in her written statement that she referred to the existence of her sons and daughters. The plea of those sons and daughters being also tenants was raised by an amendment of the written statement. She has deposited rent under Section 7-C of the U.P. (Temporary) Control of Rent and Eviction Act describing herself as the tenant. The notice required the vacation of the house which meant house as a whole and not in part. In the permission proceedings also personal necessity for the house as a whole and not in part was disclosed. ", "19. As has already been stated, it was conceded in the first appellate Court that the permission was not invalid on the ground of having been obtained against the appellant alone. Though no grounds were put forward in the courts below for the permission being invalid otherwise or without jurisdiction, it has been argued in this Court that the permission is invalid and without jurisdiction for want of considering the needs of the tenant as well as required according to the Full Bench case of this Court, v. , 1968 All WR (HC) 572 = (AIR 1969 All 474) (FB). It is however incorrect to suggest that in the case under consideration the District Magistrate did not consider whatever case was put up by the appellant. On her behalf it was only said that she was a poor lady and had no source of income to make her both ends meet during these hard days. That did not mean that she required the house in dispute in particular for her residence. She was only interested in refuting the case of personal needs advanced by the respondent before the District Magistrate. Accordingly the plea of invalidity on the new ground taken in this Court has also no substance. ", "20. In the result the appeal must fail. It is dismissed with costs and the order of stay against execution is vacated"], "relevant_candidates": ["0000025576", "0000123740", "0000139594", "0000342651", "0000349744", "0000380642", "0000495339", "0000647655", "0001283552", "0001472953", "0001568071", "0001788626"]} {"id": "0001373058", "text": ["JUDGMENT and , . ", "1. The question raised in this appeal is whether the plaintiff, suing for arrears of rent, and having been a minor at the time when one portion of the arrears accrued due, is entitled to the benefit of Section 7 of the Limitation Act; and to bring his suit to recover those arrears after the period prescribed by the law for such suits in general. ", "2. The lower has held that the plaintiff is not entitled to the benefit of Section 7 . The Subordinate Judge was of opinion that Section 7 of the Limitation Act was not applicable to suits for rent under Bengal Act VIII of 1869, under which this suit was brought, because that Act provides a special period of limitation for suits brought to recover arrears of rent, and the schedule to the Limitation Act provides no period for such suits. Section 7 of that Act allows a minor such further time after he has attained his majority as would otherwise have been allowed from the time prescribed for such suit in the third column of the second schedule annexed to that Act. As suits for rent do not come within that schedule, the held that that section was not applicable: and it appears to us that it was correct in the view which it took. ", "3. There is one authority pointed out to us by the pleader for the appellant as being against him. That is a case of v. 5 W.R. (Act X Rul.), 41. On the other hand, the learned pleader relies upon later rulings of this Court, and upon a ruling of , in which it was held that in certain other cases, not for arrears of rent, but still as to which special limitation was provided by other Acts, the plaintiff was entitled to the benefits conferred upon plaintiffs by Sections 5 to 25 of the present Limitation Act . He also relied upon a Privy Council case, Phoolbas Koonwur v. Lalla Joyeshur Sahoy L.R. 3 I.A. 7 : I.L.R. 1 Cal. 226, in regard to Section 11 of Act XIV of 1859, the former Limitation Act . ", "4. The last case decided by was a suit brought by a minor to establish his right to property in respect of which his claim had been rejected under Section 246 of the old Code of Procedure, Act VIII of 1859. By that section one year's limitation was provided for the institution of a suit. This Court held, and affirmed the decision, that the principle of Section 11 of Act XIV, which is much the same as Section 7 of the present Act, would apply. In the cases of . 5 Cal. 110 and . 5 Cal. 314, cited to us, it was held that the plaintiff's, suing under special Acts providing special periods of limitation, were nevertheless entitled to the benefit of Section 5 of the Limitation Act, which provides that if the Court is closed when the period of limitation expires, a plaintiff may file his suit upon the first day the Court re-opens. And in the case of v. Gonesh Butt I.L.R. 7 Cal. 690, a similar doctrine was laid down. So also in the case of v. Dinabashy Saha I.L.R. 10 Cal. 265, the late Chief Justice applied the provisions of Section 14 of the Limitation Act to a suit brought under the provisions of the Registration Act , which provide a special limitation for such suits. ", "5. These decisions may at first sight appear to conflict with the provisions of Section 6 of the Limitation Act, which provides: \"When, by any special or local law, a period of limitation is specially prescribed for any suit, appeal or application, nothing herein contained shall affect or alter the period so prescribed.\" But so far as Section 5 is concerned, we think that the decisions cited do not conflict at all with Section 6 , for those decisions did not extend the period of limitation. All they did was to prevent the period of limitation from being curtailed by the closing of the : and Mr. Justice observes in his judgment in Khoshelal Mahton v. Gonesh Dutt I.L.R. 7 Cal. 690 that the days the is closed must be considered as non-existent, or what are called dies non, and therefore they are not counted. ", "6. As regards the case of v. Dinabashy Saha I.L.R. 10 Cal. 265, the decision of this Court is not easily to be reconciled with Section 6 , for the effect of that decision was undoubtedly to alter the period prescribed by the special Limitation Act . We do not, however, consider ourselves bound by that decision, for the present case is an entirely different one. And as regards the suit to establish the right of the unsuccessful claimant under Section 246 of the old Code of Procedure, we observe that since the decision in that case, new Limitation Act s have been passed, and also a new Code of Procedure, and now the corresponding section (280) does not prescribe a period of limitation, whereas the present Limitation Act does prescribe a period of limitation for such suits in it's third schedule. On the other hand the present Limitation Act does not prescribe a period of limitation for suits brought under the old Rent Act of 1869, under which the present suit was brought. That Act still contains a special period of limitation for suits to recover arrears of rent as well as other matters. ", "7. It seems to us, therefore, that upon the strict construction of Section 7 put upon it by the lower Court, as well as upon the provisions of Section 6 of the same Act, it is right to hold that the plaintiff' in this suit was not entitled to a fresh period of limitation on his attaining majority. ", "8. Another argument was addressed to us in favour of the plaintiff based on these facts: that a former ex parte decree was obtained when there was no bar of limitation, but which ceased to have effect, it is said, because it was found after decree that the had no jurisdiction to pass it; and though the sale held under that decree was set aside or not confirmed, the defendant, it was argued, recovered his property saddled with a charge for the rent covered by that decree. We are unable to recognize the cogency of this argument, or the existence of any such charge, certainly not as existing after the rent had become barred by limitation. ", "9. We therefore think that the appellant has rightly failed to recover the rent of 1287, and must be content with the decree obtained for the rent of the subsequent years. ", "10. The appeal must be dismissed with costs."], "relevant_candidates": ["0000022151", "0000587343"]} {"id": "0001373432", "text": [", J. ", "1. These are two appeals for which the appellant, Mrs., , obtained special leave from His Majesty in Council against two decisions of at Madras. ", "2. They arise in the following circumstances :There are in India two legislative Acts of the Governor-General of India in Council relating to printing, one being The Printing Presses and Newspapers Act No. XXV of 1S67. and the other being Act No. I of 1910 entitled \" An Act to provide for the better control of the Press, \" and shortly \" The Indian Press Act, 1910. \" Under the first Act, Section 4 , the person who keeps in his possession a printing press must make and subscribe a declaration before a Magistrate, stating that he has a press for printing, and where it is situated. And by Section 5 no printed periodical work containing public news, or comments on public news, shall be published without the printer and publisher making a declaration stating that he is the printer or publisher, the name of the periodical and the place where the printing or publishing is conducted. ", "3. Under the second Act, Section 3 , Sub- section 1 , the person making the declaration is required to deposit before a Magistrate in money, or in certain securities, a sum not being leas than Rs. 500, or more than Rs. 2,000, as the Magistrate may think fit to require. ", "4. But the Magistrate may, for special reasons which ho is to record, dispense with the deposit, and he has certain powers of canceling or varying any order made under this sub-section. ", "5. By Section 4 of the Act the local Government, when it appears to it that any printing press in respect of which any security has been deposited, is used for the purpose of printing any newspaper which contains words, signs or visible representations of a nature deemed to be objectionable under the detailed provisions of the section which will be hereinafter specifically set forth, may by notice in writing addressed to the keeper of the press, declare the security and all copies of the newspaper wherever found forfeited to His Majesty, and after the expiry of ten days from the date of the issue of the notice of forfeiture, the declaration required of every keeper of a press is to be deemed to be annulled, ", "6. By Section 17 : ", "Any person having an interest in any property in respect of which an order of forfeiture has been made under Section 4 \" ...[or under certain other sections not material to the present Appeal] \"may, within two months from the date of such order, apply to to set aside such order on the ground that the newspaper...in respect of which the order was made did not contain any words, signs, or visible representations of the nature described in Section 4 , Sub- section 1 . ", "7. And by Section 18 : ", "Every such application shall be heard and determined by a Special Bench of composed of throe Judges.... ", "8. By Section 23 , anyone who keeps in his possession a press without making a deposit under Section 3 when required so to do, shall be liable to the same penalty as if he had failed to make the declaration required by the first Act. ", "9. On the 2nd December, 1914, the appellant being the owner and keeper of a printing press, and printer and publisher of a newspaper called at that time, and thereafter, \"New India,\" made the declaration required of her under the Act of 1867, and the Magistrate before whom it was made using the power of dispensation given to him by Section 3 of the Act of 1910, thought fit to dispense with the deposit of the security which under the provisions of the same section she would otherwise have had to give. The document in which the dispensation was embodied is not contained in the record of these appeals, and their Lordships have not before them the reasons which the Magistrate recorded as the grounds for granting this dispensation. ", "10. On the 28th May, 1916, the appellant received a notice from the Magistrate dated the 22nd May, in which it was stated that he, under Sub-section 1 of Section 3, cancelled the order dispensing with the security and required her within fourteen days to deposit Rs. 2,000 as security. ", "11. In accordance with this order the appellant, under protest, as she says in one of her affidavits, deposited the security. ", "12. On the 28th August, 1916, she was served with an order dated the 25th August and made by the Governor in Council reciting that twenty passages published in the newspaper and identified in the order were of the nature described in Sub-section 1 of Section 4 of the Act of 1910, and declaring that the security which the appellant had deposited and all copies of \" New India\" wherever found were to be forfeited to the . ", "13. The appellant thereupon purporting to avail herself of the provisions of Section 17 of the Act presented her petition to a Special Bench of at Madras praying that both the order of the Magistrate requiring security and the order of the Governor in Council should be revised and set aside. It being, however, obvious that the procedure under Section 17 was not available for questioning any act of the Magistrate, the appellant the next day presented what is called a Criminal Revision Petition under Sections 106 and 107 of the Government of India Act (5 & 6 Geo. V. c. 61) and Section 435 of the Code of Criminal Procedure. This application, also described in the course of the proceedings as an application for a certiorari, was also heard by the Special Bench. ", "14. After argument, both applications were refused; all the Judges agreeing that they should be refused, but not being in agreement as to the grounds on which the revision petition failed, and not being wholly in agreement as to all the articles in the newspaper which might merit condemnation. ", "15. The petitioner thereupon applied to for leave to appeal in both cases, and on this leave being refused by applied to His Majesty in Council for special leave to appeal, and this leave having been given (as already stated) in respect of both orders, both matters are now before their Lordships. ", "16. It will be convenient to consider first the application to quash the order of the Magistrate. This question divides itself into two parts: was the procedure adopted a competent and suitable method of reviewing the order, and if it be open to review is it to be deemed an illegal and unwarranted order ? ", "17. It is convenient to consider first the nature of the order, or supposed order. The Statute contemplates that in ordinary cases security shall be deposited, and the only duty of the Magistrate is to fix the amount, having regard to the two limits, and to receive it. ", "18. Then follows the proviso : ", "Provided that the Magistrate may, if he thinks fit, for special reasons to be recorded by him, dispense with the deposit of any security or may from time to time cancel or vary any order under tins Sub-section. ", "19. It was contended before their Lordships that to read this proviso as enabling the Magistrate to cancel or vary an order of dispensation would be to make a proviso upon a proviso, and to collect a positive enactment out of that which was only a qualifying provision. But it is well settled that there is no magic in words of proviso, and that the plain meaning must be given to the words of the legislature, and those words enable the Magistrate to cancel or vary any order made under the sub-section, which should mean among other orders of dispensation. ", "20. If the Magistrate having fixed the minimum security may vary his order by imposing the maximum, there is no reason why he should not, as time goes on, think fit to require security when at first he thought fit to require none. Under the second sub-section a power of requiring a deposit, where none up to that moment had been required, is given in certain cases to the local Government, and it is natural to suppose that what the local Government may do in a proper case under Sub- Section 2 , may be done in a proper case by the Magistrate under Sub- section 1 . It is somewhat difficult to find any case, other than this one, to which the word cancel would be properly applicable. If the normal course is adopted, and a deposit is required, and if the Magistrate thereafter thinks it too much or too little, the appropriate word for the now order is that it is one varying the old. But if he were to cancel simpliciter liciter an order fixing the deposit at a particular sum, it is difficult to see what would happen. There must be a deposit unless there is a positive order of dispensation; the canceling of an order fixing the deposit at say Rs. 2,000, would leave the keeper of the printing press in the position of having to apply to the Magistrate to make some further order, either fixing a new sum or dispensing with any; and till such new order had been made and complied with, the Keeping of the printing press would apparently be an unlawful act, so that the cancellation of the order fixing the deposit at Rs. 2,000 would be injurious instead of beneficent to the keeper of the press. But if the Magistrate had originally thought fit to dispense with security and afterwards changed his mind, the right phrase to use would be that he had cancelled his order of dispensation. ", "21. Their Lordships are, therefore, of opinion that the Magistrate has power under the section to cancel an order of dispensation, the necessary consequence of which will be that security will have to be deposited according to the amount thereupon fixed by him within the limits prescribed, as would be done in normal course on the first making of a declaration. ", "22. Their Lordships are in agreement in this respect with the opinion of , and in disagreement with the view of The Officiating Chief Justice, agreed in principle with and so expressed himself in his judgment upon the other application. ", "23. It is next contended on behalf of the appellant that the act of the Magistrate in canceling the dispensation was a judicial order, and was bad, because she was given no opportunity of being heard before an adverse order was made against her. ", "24. To this argument several answers have been given ; that the order might be treated as an ex parte order which it would have been open to her to move to discharge instead of complying with it as she did under protest; that as a judicial order it was still one made by the Magistrate within the exercise of his jurisdiction, and that the omission to hear her was only an irregularity which could not be reviewed, or at any rate could not be reviewed by process of certiorari; and lastly, that the act was not a judicial act but one done in the exercise of administrative functions. ", "25. It was on this last ground that all three Judges in decided the point against the appellant; and without pronouncing any opinion on the other grounds their Lordships agree that this one furnishes a sufficient answer. ", "26. The Magistrates to whom this power is entrusted by the Act are the District Magistrates and the Chief Presidency Magistrates. Those to whom power was entrusted by the Act of 1867 were \"any person exercising the full powers of a Magistrate,\" and were to include \"Magistrates of Police and Justices of the Peace.\" At that time there were no Chief Presidency Magistrates. ", "27. It was argued before their Lordships that the change in the second Act, that is in especial the substitution of the Chief Presidency Magistrate for territory within his jurisdiction, showed an intention on the part of the to make the action of the Magistrate judicial and not administrative. But their* Lordships do not think that this change alters the nature or character of the action of the Magistrate. It is true that the duties of the Chief Presidency Magistrate are primarily judicial; but the Magistrates outside the Presidency town exercise both judicial and administrative functions, and the District Magistrate is principally an administrative officer. These two considerations appear to balance one another. The action of the Magistrate under Sub-section 1 of Section 3 is (like the action of the Magistrate under Sub-section 1 of Section 8) analogous to the action of the local Government under the second sub-section in the same clauses, and the action of the local Government is clearly administrative. ", "28. It being once established that the normal course is to have a deposit, the action of the Magistrate in increasing or diminishing, withdrawing or imposing, is a pure matter of administrative discretion. It is only in one case that he is to record his reasons and that is when there is a departure from the normal, and the object of recording them is, as the Officiating Chief Justice rightly said, for the information of his superiors in the . ", "29. Further, in this connection the provisions of Section 22 , upon which comment will shortly be made, must not be left out of sight. If a declaration of forfeiture by the local Government can only be questioned in one respect and by one methodit is not unreasonable to suppose that the legislature did not intend to open to enquiries as to the exercise of so comparatively unimportant an official act, discretionary and in some respect facultative as it is. ", "30. The act of the Magistrate is after all only the withdrawal of a privilege which need never have been granted. It is not like a condemnation in which case justice requires that the person to be condemned should first be heard. It would have been in their Lordships' opinion more discreet, and it would have removed an occasion for comment and complaint, if the Magistrate had given the appellant some opportunity for making her observations before the privilege was withdrawn ; it might have been a wiser discharge of his duty as an officer. But having said this, their Lordships are unable to go any further. ", "31. It results, therefore, that if the order of the Magistrate was open to examination, either upon process of certiorari or by a way of revision, the consequence of an examination would be to leave the order as it stands; and this consequence is not without its bearing upon the question, which is prior in order of reasoning, whether it was competent to the to enter upon any such examination. The appellant based her demand partly upon the Code of Criminal Procedure and partly upon the supposed common law power to grant a writ of certiorari. She did not rely upon the power of revision given by the Code of Civil Procedure. ", "32. It is not easy to gee how these proceedings could be deemed criminal proceedings within the Code of Criminal Procedure, They are not proceedings against the appellant as charged with an offence. They are at the utmost proceedings which rendered the appellant if she should thereafter commit a criminal or forbidden act, open to a particular form of procedure for a penalty. ", "33. In any view, as their Lordships have intimated their opinion that the Magistrate in withdrawing the order of dispensation was not acting judicially, it follows that this is not a case for revision under the Code of Criminal Procedure. ", "34. As to certiorari it was contended on behalf of the respondent in , that there is no power in to issue a writ of certiorari, or alternatively that the provisions of Section 22 forbid recourse to this writ in cases which come under the Press Act . ", "35. As to the first point it would seem that at any rate the there of Calcutta, Madras and Bombay, possessed the power of issuing this writ: Section 71 re the Justices of the Supreme Court of Judicature at Bombay(1829) 1 Knapp. 1, 49, 51, 55; and for the Town of Calcutta (1885) I.L.R. 11 Cal 275 Whether any of the other Courts which are by definition for purposes of this Act have the power to issue writs of certiorari is another question. ", "36. Supposing that this power once existed, has it been taken away by the two codes of procedure? No doubt these codes provide for most cases a much more convenient remedy. But their Lordships are not disposed to think that the provisions of Section 435 of the Criminal Procedure Code and Section 115 of the Civil Procedure Code of 1908 are exhaustive. Their Lordships can imagine cases, though rare ones, which may not fall under either of these sections. For such cases their Lordships do not think that the powers of the High Courts which have inherited the ordinary or extraordinary jurisdiction of , to issue writs of certiorari can be said to have been taken away. ", "37. But assuming that the power to issue the writ remains, and that it might be exercised notwithstanding the existence of procedure by way of revision, Section 22 has still to be considered. ", "22. Every declaration of forfeiture purporting to be made under this Act. shall, as against all persons, be conclusive evidence that the forfeiture therein referred to has taken place, and no proceeding purporting to be taken order this Act shall be called in question by any Court, except on such application as aforesaid, and no civil or criminal proceeding, except as provided by this Act, shall be instituted against any person for anything done or in good faith intended to be done under this Act. ", "38. As to this section it was contended on behalf of the appellant that as the writ of certiorari was not in terms said to be taken away the right to it remained, notwithstanding the very express but still general words of this section. ", "39. However that might be according to English Law where there is no such revision procedure as in India, their Lordships see no reason for narrowing the express words of the Indian Act . Certiorari according to the English rule is only to be granted where no other suitable remedy exists. If the order of the Magistrate were a judicial order, it would have been made in the exercise either of his civil or of his criminal jurisdiction, and procedure by way of revision would have been open. ", "40. Even were it to be said that the order was of that quasi-judicial kind to which certiorari has sometimes been applied in England or in India, the Press Act may quite reasonably have intended to take it away, and there is no reason why full effect should not be given to its language. ", "41. It was contended in and before this Board that it was beyond the competency of to enact Section 22 and possibly even to enact the Press Act . This argument which was mainly founded upon the language of in the case of In the matter of ) 6 B.L.R. 392, 451 received some encouragement from the Officiating Chief Justice. But their Lordships find themselves unable to appreciate it. ", "42. The order of dismissing this application was therefore right, and the appeal from it must be dismissed. ", "43. If their Lordships thought that the appellant had made any way, they would have had to consider whether she was not, according to the practice prevailing in cases of certiorari, too late in making her application. Indeed, what advantage the appellant would have gained if she had succeeded upon this application is not very apparent. The power of the local Government to make a forfeiture under Section 4 no doubt depends upon there being a deposit to forfeit. But at the time the order was made, 25th August, 1916, there had been in fact a deposit since 5th June; and the appellant had taken no steps to get herself relieved from the order made on the 22nd May directing the deposit, or to get it back. ", "44. Even were it contended that the deposit ought to be regarded as having been so unwarrantably exacted that it ought to count as non-existent, there was nothing to show that the local Government was or ought to have been aware of this. Further, Section 22 makes the declaration of the local Government conclusive as to there being a forfeiture. ", "45. Lastly, the appellant made no application by way of certiorari or otherwise to quash the declaration of forfeiture; and the only way in which it was attacked was by using the procedure under Section 17 , which as pointed out in is available only for one purpose, that is of showing on the merits that the published articles were not deserving of forfeiture. ", "46. Their Lordships have now to deal with the other appeal. Section 4 , Sub- section 1 , of the Indian Press Act is in so far as it is material in the following terms: ", "(1) Whenever it appears to that any printing-press in respect of which any security has been deposited as required by Section 3 is used for the purpose of printing or publishing any newspaper, book, or other document containing any words, signs, or visible representations which are likely or may have a tendency, directly or indirectly, whether by inference, suggestion, allusion, metaphor, implication or otherwise .... ", "to bring into hatred or contempt His Majesty or the Government established by law in British India or the administration of justice in British India or any Native Prince or Chief under the suzerainty of His Majesty, or any class or section of His Majesty's subjects in British India, or to excite disaffection towards His Majesty or the said Government or any such Prince or Chief; or.... ", "(e) to encourage or incite any person to interfere with the administration of the law or with the maintenance of law and order.... ", " may, by notice in writing to the keeper of such printing-press, stating or describing the words, signs or visible representations which in its opinion are of the nature described above, declare the security deposited in respect of such press and all copies of such newspaper, book or other document wherever found to be forfeited to His Majesty. ", "EXPLANATION IIn Clause (c) the expression 'disaffection' includes disloyalty and all feeling's of enmity. ", "EXPLANATION II.Comments expressing disapproval of the measures of the or of any such Native Prince or Chief as aforesaid with a view to obtain their alteration by lawful means, or of the administrative or other action of the or of any such Native Prince or Chief or of the administration of justice in British India without exciting or attempting to excite hatred, contempt or disaffection do not come within the scope of Clause (c). ", "47. The notice of forfeiture issued on the 25th August, 1916, stated that in the opinion of the Governor in Council twenty passages published in the appellant's newspaper on various dates from the 7th June to the 17th August were of the nature described in Section 4 , Sub- section 1 and declared the security deposited by the appellant to be forfeited. The articles in question were numbered consecutively from 1 to 14, seven articles being numbered 4 and marked with consecutive letters of the alphabet. Thereupon the appellant availed herself of the remedy given to her by Sections 13 and 18 and applied to a Special Bench of to set aside the order on the ground that the newspaper did not contain \" any words, signs or visible representations\" of the nature described in Section 4 , Sub- Section 1 , ", "48. This application as already stated was heard by the same Judges as those who sat upon the application for a certiorari. In the unanimous opinion of the Bench, the articles numbered 2, 11 and 13 were within the terms of Section 4 , Sub- section 1 , Clause (c). thought that article 11 was also obnoxious to Clause (e). The majority of the Bench, that is to say, the Officiating Chief Justice and articles 1, 6, 10 and 12 obnoxious to Clause (c). article 7 obnoxious to Clause (e), and articles 9 and 14 obnoxious to Clause (c). thought article 8 obnoxious to Clause (c). In accordance with these conclusions the dismissed the application made by the appellant. ", "49. The balancing of important political considerations which is effected by adding explanation No. 2 to the enacting words which are found in the earlier part of the section has its analogy in Sections 124A and 153A of the Indian Penal Code. The language is not precisely the same, but there is the same delicate balancing of two important public considerations, the undesirability of anything tending to excite sedition or to excite strife between classes and the undesirability of preventing any bona fide argument for reform. ", "50. It is perhaps not easy to see how explanation 2 with its qualifications, adds to, or detracts from the direct language of Clause (c). A similar observation might be made upon Section 124A of the Penal Gode. The utmost that can be said is that the addition of the explanation with its apparent repetition of the positive enactment in the guise of a qualification of the explanation shows an almost meticulous care by the to balance the two considerations, prominence being given to the first consideration in the first part of the section, and to the second in the explanation. ", "51. In applying these balancing principles it is inevitable that different minds may come to different results, one mind attaching more weight to the consideration of freedom of argument, and the other to the preservation of law and order or of harmony. ", "52. The Section 124A of the Indian Penal Code has been the subject of careful consideration in the cases of the Queen-Empress v. (1897) I.L.R. 22 Bom. 112, 528 (in which case this refused leave to appeal. See v. Quecn-Em-press (1897) L.R. 25 I.A. 1; the Queen-Empress v. (1897) I.L.R. 22 Bom. 152 and the (1897) I.L.R. 20 All. 55, F.B. and though as already stated the language of this section is not precisely the same as the language in the Press Act these judgments are of considerable assistance towards the construction of Section 4 . ", "53. In substance the question under Clause (c) of Section 4 , Sub- section 1 , comes to this; are the passages such as in fact to excite, or do they disclose an attempt ( which implies intention ) to excite hatred, contempt or disaffection towards the or of any class or section of His Majesty's subjects in India; and in judging the question of intent the publisher must be deemed to intend that which is the natural result of the words used having regard, among other things, to the character and description of that part of the public who are to be expected to read the articles. ", "54. As regards the question of hatred or contempt of a class of section, it was argued that the object of the article was to attack the system, not a class or section. It may be assumed, for the purposes of this case, that there may be reference to a class or section of His Majesty's subjects so couched as to show that the attack is merely upon a school of opinion, and that unless the language is such as to excite hatred or contempt of persons, it may escape condemnation. But assuming this, the appellant remains face to face with the difficulty that there is language used in certain of the articles which may legitimately be construed as tending by inference or suggestion to excite hatred or contempt in such a fashion that it may become personal. ", "55. It may well be that the primary object was a legitimate attack upon a system, but unless care is taken it becomes difficult to make a fierce attack upon a system without conveying some imputation upon the class which the system makes or which carries the system into practice. And it must be remembered that those words in Clause (c) which refer to the hatred or contempt of a class or section are not limited by explanation 2, and that there has been in this respect some departure from the policy of the Penal Code , which superadded a qualifying explanation which has not found place in the Press Act . ", "56. As to Clause (c) the majority of the Judges in were brought to the conclusion that the attacks on Anglo-India or Anglo-Indians or the bureaucracy as the case may be, were calculated, whatever might have been the primary object of the writer, to bring into hatred or contempt persons forming a class or section of His Majesty's subjects, namely, English Civil Servants in India, in some cases Englishmen in India generally. ", "57. All the Judges thought that several passages were calculated to bring the Government into hatred and contempt, and this after giving due weight to explanation 2. There were also as already stated findings by and bringing some of the articles under Clause (e), a clause which it should be noted is not qualified by any explanation. ", "58. Upon careful perusal of the several judgments their Lordships find that weight has been properly given to the several portions of the section. They do not find that the section has been misconstrued. There remains only the question of application in detail of the principles of the Law to the language of the various articles. ", "59. When their Lordships have progressed so far, the question becomes one which partakes so much of the nature of a question of fact, that it would be difficult for their Lordships, even if they were inclined to construe the natural tendency of the words differently, to interfere with the conclusions arrived at by the in India. For when it sits to advise His Majesty in the exercise of his prerogative in criminal cases, does so under constitutional limitations which, as has often been explained, and notably in the case of v. ), (and in 's case already quoted) preclude it from exercising the full functions of a of Criminal Appeal. ", "60. It should be added that for the purpose of considering, not the intention to excite, but the fact whether the articles are such as to excite, the Judges in India with a far closer knowledge of the character of the people likely to read the articles, have better means of judging than their Lordships in England. ", "61. Here the matter might rest. But in the particular circumstances of this case, and after the elaborate argument at the , their Lordships think it well to go further, and to say that if they considered it proper to look into the matter in detail, they would hold that the articles which were the subject of unanimous condemnation, and at least some of those which came under the censure of Judges in , were obnoxious to the provisions of Clause (c), and possibly in some cases to those of Clause (e), and that the was right in supporting the declaration of forfeiture. Their Lordships will therefore humbly recommend His Majesty that both these appeals should be dismissed with costs."], "relevant_candidates": ["0000818106", "0001328023"]} {"id": "0001378773", "text": ["PETITIONER: Vs. RESPONDENT: COLLECTOR OF CENTRAL EXCISE, BELGAUM DATE OF JUDGMENT17/02/1987 BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH PATHAK, R.S. (CJ) CITATION: 1987 AIR 1161 1987 SCR (2) 309 1987 SCC (2) 93 JT 1987 (1) 469 1987 SCALE (1)361 CITATOR INFO : R 1988 SC1236 (5) ACT: Central Excises and Salt Act , 1944 section 11A and Explanation thereto, scope of--Limitation of six months' period--No order of the court staying the service of notice--Whether a show cause notice issued beyond the limi- tation, period specified under section 11A is valid. HEADNOTE: A show cause notice dated 29.1.1976 issued by the re- spondent to the appellant calling upon him to explain as to why excise duty treating his product as \"fabric\" and not as \"yarn\" may not be levied, was challenged in in Writ Petition No. 2632/ 1976. Pending final disposal of the writ petition, an interim order staying the collection of excise duty as a \"fabric\" for the period 1.4.1975 to 18.8.75 alone was passed with a specific direc- tion that the appellant should continue to pay excise duty as \"yarn\". Finally the writ petition was dismissed on 16.2.1981. On 20th May, 1982, another notice No. 913 to show cause was issued to the appellant simultaneously seeking to raise a demand for the period from 20.6.1976 to 28.2.1981 apart from for the period between 1.4.1975 to 18.8.1975 challenged in the earlier writ petition. having rejected the plea of bar of limitation under section 11A of the Central Excises and Salt Act , 1944 raised in the writ petition challenging the said second show cause notice and demand, the appellant has come in appeal by way of special leave. Allowing the appeal, the Court, HELD: 1.1 Section 3 of the Act which contains the charg- ing provision clearly shows that levy and collection are two distinct and separate steps. [312H] 1.2 The provision of section 11A(1) and (2) of the Central Excises and Salt Act , 1944 make it clear that the statutory scheme is that in the situations covered by the sub-section(1), a notice of show cause has to be issued and sub-section(2) requires that the cause shown by way of representation has to be considered by the prescribed au- thority and then 310 only the amount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition prece- dent to a demand under sub-section(2). In the instant case, compliance with this statutory requirement has not been made, and, therefore, the demand is In contravention of the statutory provision. [313E-G] 2. Explanation to section 11A of the Central Excises and Salt Act , 1944, which incorporates a well known principle of law, in clear terms refers to 'stay of service of notice'. The order did not at all refer to service of notice. The having directed stay of collection of duty as 'fabric' has not issued any interim direction in the matter of issue of notice of levy of the duty. Therefore, the benefit of Explanation to section 11A of the Act is not available to the Respondent. [313C- ., SCR 1287; and As- sistant Collector of . v. , 3 SCR 506, 514 referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 161 Of 1986. ", "From the Judgment and Order dated 17.9.85 of , New Delhi in Appeal No. ED(SB) (T) 463/84-D. ", ", , , and for the Appellant. ", ", Additional Solicitor General, Mrs. and Ms. for the Respondent. The Judgment of the Court was delivered by , J. The fate of this appeal under sec- tion 35(L) of the Central Excises and Salt Act , 1944, de- pends upon the meaning and scope of the Explanation appear- ing in section 11A of the Act. ", " by its order dated 4.6.1976 in Writ Petition No. 2632 of 1976 gave the following direc- tion: ", "311 ", "\"Pending disposal of the aforesaid writ Peti- tion, it is ordered by this Court that collec- tion of excise duty as a fabric be and the same is hereby stayed. It is further ordered that the petitioner shall however continue to pay exercise duty as yarn and shall further maintain an account in square metres for future clearance.\" ", "The said Writ Petition was ultimately dismissed by on 16.2. 1981. The operative part of the 's final order ran thus: ", "\"For the reasons aforesaid, we make the fol- lowing order:- ", "(i) Rule discharged; ", "(ii) We decline to interfere at this stage leaving open to the petitioner to urge all the contentions in reply to the show cause notices.\" ", "On 20th May, 1982, a notice to show cause was issued to the appellant by the Assistant Collector, being Notice No. 913, and with this the Collector sought to raise a demand for the period from 20th June, 1976 to 28th February, 1981 apart from for the period between 1.4. 1975 to 18.8.1975 in respect of which an earlier show cause notice dated 29.1. 1976 had already been issued. ", "It is not disputed by the that the appropriate period of limitation to apply to the facts of the case is six months as provided in section 11A of the Act and that the Notice issued on 20th of May, 1982 was beyond that period. Reliance was placed on the Explanation for obtaining extension of that period. The Explanation reads thus: ", "\"Where the service of the notice is stayed by an order of a , the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be.\" ", "The provision in the Explanation incorporates a well-known principle of law. Section 15 of the Limitation Act of 1908 (also of Section 15 of the Limitation Act of 1963) incorpo- rates the same principle. This in , SCR 1287 dealt with the effect of an order of injuc- tion in the matter of computation of limitation. At page 1302 of the Reports, , J. as he then was, spoke for the thus. ", "312 ", "\"It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit. And so in cases falling under Section 15 , the party instituting the suit would by such institution be in contempt of court. But in our opinion, there would be no justifi- cation for extending the application of s. 15 on the ground that the institution of the subsequent suit would be inconsistent with the spirit or substance of the order passed in the previous litigation ........ \" ", "In the instant case, the order of stay passed by had only stayed the collection of the excise duty, which is a stage following levy under the scheme of the Act. Obviously there was no interim direction of in the matter of issue of notice for the purpose of levy of duty. The relevant portion of Section 11A provid- ed. ", "\"(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erro- neously been made, requiring him to show cause why he should not pay the amount specified in the notice: ", "(2) The Assistant Collector of Central Excise shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of.excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. ' ' Reference to Section 3 of the Act which contains the charg- ing provision clearly shows that levy and collection are two distinct and separate steps. This Court in ., 3 SCR 506, at page 514 stat- ed: ", "\" .... The charging provision section 3(i) specifically says \"there shall be levied and collected in such a manner as may be pre- scribed the duty of excise ..... \"It is to be noted that sub-section (i) uses both the expressions \"levied and collected\" and that clearly shows that the expression \"levy\" has not been used in the Act or the Rules as meaning actual collection.\" ", " having directed stay of collection had, therefore, not given any interim direction in the matter of issue of notice or levy of the duty. The Explanation in clear terms refers to stay of service of notice. The order of did not at all refer to service of notice. Therefore, there is force in the submission of the appellant that the benefit of the Explanation is not available in the facts of the case. ", "No notice seems to have been issued in this case in regard to the period in question. Instead thereof an out- right demand had been served. The provisions of Section 11A (1) and (2) make it clear that the statutory scheme is that in the situations covered by the sub-section (1), a notice of show cause has to be issued and sub-section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the mount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition precedent to demand under sub-section (2). In the instant case, compliance with this statutory requirement has not been made, and, there- fore, the demand is in contravention of the statutory provi- sion. Certain other authorities have been cited at the hearing by counsel for both sides. Reference to them, we consider, is not necessary. ", "The appeal has to be allowed and the demand raised for the period 19.8.1975 to 23.2.1981 has to be set aside. There shall be no order for costs. The tax paid, if any, shall be refunded to the appellant. ", "S.R. Appeal al- lowed."], "relevant_candidates": ["0000599322", "0001143216"]} {"id": "0001385734", "text": ["PETITIONER: Vs. RESPONDENT: THE STATE OF MADHYA PRADESH AND OTHE DATE OF JUDGMENT: 16/03/1954 BENCH: , MEHAR CHAND (CJ) BENCH: , MEHAR CHAND (CJ) MUKHERJEA, B.K. DAS, SUDHI RANJAN BOSE, VIVIAN HASAN, GHULAM CITATION: 1954 AIR 403 1954 SCR 1122 CITATOR INFO : F 1955 SC 661 (5,8,60,123,145) R 1955 SC 765 (5) R 1957 SC 397 (14) R 1957 SC 790 (10) RF 1958 SC 578 (228) RF 1959 SC 725 (10) D 1960 SC 424 (14) RF 1961 SC 65 (5) R 1961 SC1615 (11) R 1962 SC 123 (12) RF 1962 SC1006 (77) R 1962 SC1621 (10,12,39,44,45,46,110) R 1967 SC1401 (8) D 1971 SC2280 (11) F 1975 SC1443 (6) ACT: Constitution of India, arts, 19(1)(g), 226, 286(1)(a)- Central Provinces and Berar Sales Tax Act (Act XXI of 1947), as amended by, Act XVI of 1949-Explanation II to section 2(g)-Whether ultra vires the Constitution-Threat to use coercive machinery of Act for realising tax-whether infringement of fundamental rights under art. 19(1)(g) of the Constitution. HEADNOTE: Held, (i) that explanation II to s. 2(g) of the Central Provinces and Berar Sales Tax Act (Act XXI of 1947) as amended by Central Provinces and Berar Act (Act XVI of 1949) is ultra vires . (ii) A threat by the to realize tax from the assesses without the authority of law by using the coercive machinery of the impugned Act is a sufficient infringement of his fundamental right under art. 19(1)(g) and gives him a right to seek relief under art. 226 of the Constitution. The impugned Act, requiring the assesses to-deposit the whole of the tax before he can get the relief provided by it, cannot be said to provide an adequate alternative remedy. . ( s C.R. 1069); in council (L.R. 74 I.A. 50); ( S.C.R. 572) referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal No, 20 of 1952. Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the 25th April, 1952, of at Nagp ur in Miscellaneous Petition No. 1623 of 1951. ", " Engineer ( and off, with him) for the appellant. ", ", Advocate-General of Madhya Pradesh, , with him) for respondent No. 1. ", "1123 ", ", Advocate-General of Madras (, with him) for the intervener. ", "1954. MArch 16. The Judgment of, the Court was delivered by is an appeal by leave from a judgment of at Nagpur dated the 25th of April, 1952, dismissing a petition under article 226 of the Constitution of India filed by the appellant questioning the vires of certain provisions of the Central Provinces and Berar Sales Tax Act 1947. ", "The appellant represents a concern , a company registered under' the Indian Companies Act , 1913, having its head office at Bombay, and several branches in . the State of Madhya Pradesh. The main business of the appellant company is that of cotton. The head-office of the appellant at Bombay sells cotton bales to several mills and individuals under the control and the system regulated by the Textile Commissioner at Bombay, and upon a contract of sale being completed the goods after being ginned and pressed are sent from Khamgaon and other places in the State of Madhya Pradesh and are actually delivered in Bombay and such other places outside the State of Madhya Pradesh as directed by the head office. The cotton bales are sent by rail under an insurance in favour of the appellant, and are delivered to the buyer by tender of railway receipt against the payment of price in Bombay. Under the Central Provinces and Berar Sales Tax Act, 1947 (Act I XXI of 1947), cotton was declared liable to sales tax on the 11th of April, 1949, and since that date the appellant commenced paying the tax in respect of the purchases made by it, and continued to pay it till the 31st of December, 1950. For the quarter ending on the 31stof March, 1951, the appellant declined to pay the tax in respect of the purchases made during that quarter, realizing that it could not be made legally liable for the payment of this tax in the State of Madhya, Pradesh, the transactions done or effected in Madhya Pradesh not being \" sales\" within that State. Apprehending that the company may be subjected to the payment of the tax without authority of law, an application was preferred in at Nagpur praying for an appropriate writ or writs which may secure to the company protection from the impugned Act and its enforcement by the State. It was alleged that Explanation II to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947, as further amended by Act XVI of 1949 was ultra vires and illegal. This petition, along with a refer eence in another case (Miscellaneous Civil Case No. 258 of 1951: A.I.R. 1952 Nag. ", "378), was heard by a Division Bench of and it was held that Explanation II to section 2(g) of the Act was not enforceable because under the Constitution sales tax could only be collected, in the State where the goods were delivered for consumption. It was further held that Explanation 11 as amended by the C.P. & Berar Act XVI of 1949 was not validly enacted because it made drastic changes in the rules of the Sale of Goods Act . Without obtaining the assent of the Governor-General as required by section 107 of the Government of India Act, 1935. 'It was observed that the mere p reduction of the goods in a State is not enough to make the tax payable unless the goods are appropriated to a particular contract, and that to impose the tax at that stage would be tantamount to charging an excise duty and not a tax on the sale of goods. In spite of these findings declined to issue a writ and dismissed. the petition made to it under article 226 of the Constitution on the ground that a mandamus issues only to compel an authority to do or abstain from doing some act, that it is seldom anticipatory and certainly never issues where the action of the authority is dependant on some action of the petitioner and that in the present case the petitioner had not even made his return and no demand for the tax could be made from him. ", "In this appeal it was argued, by , learned counsel for the appellant, that an illegal and unjust imposition operates as an illegal restraint on trade and violates fundamental rights, that having held that the Constitution by article 286 thereof made delivery of the goods for consumption the decisive factor for determining which State should have the right of taxing such sales, and having thus found the provision of the Explanation to the definition of \"sale\" unconstitutional, should have issued a writ of mandamus restraining the respondent State from enforcing that part of the Act. ", "To appreciate the contentions of the learned counsel it is necessary to set out the relevant provisions of the Act which, has declared ultra vires . Act XXI of 1947 defines the expression \"sale\" in section 2(g) of the Act in these terms:- \" 'Sale' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payments or other valuable consideration including transfer of property in goods made in the course of the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge \". \" Explanation.(I)-\" A transfer of goods on hirepurchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale. \" ", "Explanation (II)-\" Notwithstanding anything to the contrary in the Indian Sale of Goods Act , 1930, the sale of any goods which are actually in the Central Provinces and Berar at the time when the contract of sale as defined in that Act in respect thereof is made, shall, wherever the said contract of sale is made, be deemed for the purpose of this Act to have taken place in the Central Provinces and Berar. \" ", "This provision was amended by the Central Provinces and Berar Act XVI of 1949 which came into force on the 11th of ApriL 1949, by which Explanation II of section 2(g) was amended as follows:- ", "Explanation (II)-,' Notwithstanding anything to the contrary in the Indian Sale of Goods Act , 1930, the sale or purchase of any goods shall be deemed for the purposes of this Act, to have taken place in this Province-wherever the contract of sale or purchase might have been made ", "(a) If the goods were actually in this Province at the time when the contract of sale or purchase in respect thereof was made, or ", "(b) In case, the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced or found in this Province at any time after the contract of sale or purchase in respect 'thereof was made. \" ", "Certain amendments were made in the Act, by Act IV of 1951 which came into force on the 1st of April. 1951, but these are not relevant to the present' inquiry. As pointed out above, held that the new Explanation II was ultra vires and that the mere production of goods was not enough to make the tax payable unless the goods were appropriated to a particular contract. The correctness of this view can no longer be questioned by reason of the majority decision of this court in .(1), wherein it was held that article 286(1) (a) of the Constitution read with the Explanation thereto and construed in the light of article 301 and article 304 prohibits the taxation of sales or purchases involving inter-State elements, by all States except the State in which the goods are delivered for the purpose of consumption therein and that the view that the Explanation does not deprive the State, in which the property in the goods passed, of its taxing power and that consequently both the State in which the property in the goods passes and the State i n which the goods are delivered for consumption have the power to tax, is not correct. ", "The learned Advocate-General of the did not in this situation, and very properly, challenge the correctness of the decision of on this point, and conceded that the Explanation was clearly ultra vires the Legislature. He however contended that on the principle enunciated by the Privy (1) [1953] S.C.R. 1069. ", "1127 ", " in in (1), jurisdiction to question assessment otherwise than by use of the machinery expressly provided by the Act, was inconsistent with the statutory obligation to pay, arising by virtue of the assessment and that the liability to pay the sales tax under the Act is a special liability created by the Act itself which at the same time gives a special and particular remedy which ought to be resorted to, and therefore the remedy by a writ ought not to be allowed to be used for evading the provisions of the Act, especially a fiscal Act. It was also said that the con- ditions requisite for the issue of a writ of mandamus were not present in the case and that it was not within the scope and purpose of article 226 of the Constitution to decide an academic question. ", "In our opinion, the contentions raised by the learned Advocate-General are not well founded. It is plain that the State evinced an intention that it could certainly proceed to apply the penal provisions of the Act against the appellant if it failed to make the return or to meet the demand and in order to escape from such serious consequences threatened without authority of law, and infringing fundamental rights, relief by way of a writ of mandamus was clearly the appropriate relief. (2), it was held by this court that a licence fee on a business not only takes away the property of the licensee but also operates as a, restriction on his fundamental right to carry on his business and therefore if the imposition of a licence fee is without authority of law it can be challenged by way of an application under article 32 , a fortiori also, under article 226. These observations have apposite application to the circumstances of the present case. Explanation II to section 2(g) of the Act having been declared ultra vires, any imposition of sales tax on the appellant in Madhya Pradesh is without the authority of law,, and that being so a threat by the State by using the coercive machinery of the impugned Act to (1) 74 I.A. 5o. ", "(2) [1952] S.C.R. 572, I46 realize it from the appellant is a sufficient infringement of his fundamental right under article 19(1) (g) and it was clearly entitled to relief under article 226 of the Constitution. The contention that because a remedy under the impugned Act was available to the appellant it was disentitled to relief under article 226 stands negatived by the decision of this court in .(1), above referred to. There it was held that the principle that a court will not issue a prerogative writ when an adequate alternative remedy was available could not apply where a party came to the court with an allegation that his fundamental right had been infringed and sought relief under article 226. Moreover, the remedy provided by the Act is of an onerous and burdensome character. Before the appellant can avail of it he has to deposit the whole amount of the tax. Such a provision can hardly be described as an adequate alternative remedy. ", "For the reasons given above, we are of the opinion that , having held that the Explanation II to section 2(g) of the Act was ultra vires, was in error in dismissing the application on the ground that it was not entitled to relief under the provisions of article 226 of the Constitution. In the result therefore we &How this appeal with costs and direct an appropriate writ to issue restraining the first respondent from imposing or authorising imposition of a tax on the appellant in exercise of its authority under Explanation 11 held void. ", "Appeal allowed. ", "(I) [1953] S.C.R. 1069. ", "1129"], "relevant_candidates": ["0000154519", "0000332955", "0000424874"]} {"id": "0001390531", "text": ["CASE NO.: Appeal (civil) 5041 of 2005 PETITIONER: & Ors. RESPONDENT: State of Maharashtra & Ors. DATE OF JUDGMENT: 12/08/2005 BENCH: CJI R.C. LAHOTI Y.K. SABHARWAL D.M. DHARMADHIKARI ARUN KUMAR,G.P. MATHUR,TARUN CHATTERJEE & P.K. BALASUBRAMANYAN JUDGMENT: ", "J U D G M E N T JUDGMENT GIVEN BY CJI R.C. LAHOTI,Y.K. SABHARWAL,D.M. DHARMADHIKARI,ARUN KUMAR,G.P. MATHUR,TARUN CHATTERJEE & P.K. BALASUBRAMANYAN (Arising out of Special Leave Petition (C) No.9932 of 2004) WITH Civil Appeal No. 5042 of 2005 (@ SLP(C) No.9935/2004); Civil Appeal No. 5043 of 2005 (@ SLP(C) No. 9936/2004); W.P. (C) No. 276/2004; W.P. (C) No. 330/2004; W.P. (C) No. 357/2004; I.A. NOS. 26, 27, 30, 31 AND 33 IN W.P. (C) No.350/1993; Civil Appeal No. 5035 of 2005 (@ SLP(C) No.11244/2004; W.P.(C) No. 302/204; W.P. (C) No. 347/2004; W.P. (C) No. 349/2004; W.P. (C) No. 350/2004; W.P. (C) No. 387/2004; W.P. (C) No. 423/2004; W.P. (C) No. 480/2004; W.P. (C) No. 19/2005; W.P. (C) No. 261/2004; W.P. (C) No. 265/2004; W.P. (C) No. 380/2004; W.P. (C) No. 358/2004; W.P. (C) No. 359/2004; W.P. (C) No. 360/2004; W.P. (C) No.361/2004; W.P. (C) No. 362/2004; W.P. (C) No. 363/2004; C.A. No. 5257-5258/2004; C.A. No. 5259/2004; C.A. No. 5260-5261/2004; C.A. No. 5262- 5263/2004; C.A. No. 5996/2004; C.A. No. 5992/2004; C.A. No. 5997-5998/2004; C.A. No. 7969-7971/2004; C.A. No. 7972/2004; C.A. No. 7973/2004; C.A. No. 7974/2004; C.A. No. 7975/2004; W.P. (C) No. 371/2004; W.P. (C) No. 368/2004; C.A. No. 7117-7119/2004; C.A. No. 7124- 7126/2004; CONMT.PET. (CIVIL) No. 561-563/2004 In C.A. No. 7117-7119/2004; CONMT. PET. (Civil) No. 564-566/2004 in C.A. No. 7124-7126/2004; W.P. (C) No. 251/2004; Civil Appeal No. 5036 of 2005 (@ SLP (C) No. 17464/2004); Civil Appeal No. 5037 of 2005 (@ SLP (C) No. 17549/2004); W.P. (C) No. 318/2004; Civil Appeal No. 5038 of 2005 (@ SLP(C) No. 17930/2004; Civil Appeal No. 5039 of 2005 (@ SLP (C) No. 17931/2004); Civil Appeal No. 5040 of 2005 (@ SLP (C) No. 17326/2003); W.P. (C) No. 386/2004; W.P. (C) No. 397/2004 , CJI Preliminary Leave granted in all SLPs. ", "A Coram of 11 Judges, not a common feature in , sat to hear and decide (hereinafter '', for short). It was expected that the authoritative pronouncement by a Bench of such strength on the issues arising before it would draw a final curtain on those controversies. The subsequent events tell a different story. A learned academician observes that the decision in is a partial response to some of the challenges posed by the impact of Liberalisation, Privatisation and Globalisation (LPG); but the question whether that is a satisfactory response, is indeed debatable. It was further pointed out that 'the decision raises more questions than it has answered' (see : Annual Survey of Indian Law, 2002 at p.251, ", "254). The Survey goes on to observe \"the principles laid down by the majority in are so broadly formulated that they provide sufficient leeway to subsequent courts in applying those principles while the lack of clarity in the judgment allows judicial creativity \u0005\" (ibid at p.256). ", "The prophecy has come true and while the ink on the opinions in was yet to dry, were flooded with writ petitions, calling for settlements of several issues which were not yet resolved or which propped on floor, post . A number of Special Leave Petitions against interim orders passed by and a few writ petitions came to be filed directly in this Court. sat to interpret the 11-udge Bench decision in which it did vide its judgment dated 14.8.2003 (reported as - ., ; \"\" for short). The 11 learned udges constituting the Bench in delivered five opinions. The majority opinion on behalf of 6 udges was delivered by , C. , (as His Lordship then was) delivered a separate but concurring opinion, supporting the majority. , , , and , (for himself and , ) delivered three separate opinions partly dissenting from the majority. too handed over two opinions. The majority opinion for 4 learned udges has been delivered by V.N. , C. , , has delivered a separate opinion. The events following judgment show that some of the main questions have remained unsettled even after the exercise undertaken by in in clarification of the 11-udge Bench decision in . A few of those unsettled questions as also some aspects of clarification are before us calling for settlement by this Bench of 7 udges which we hopefully propose to do. ", " and have set out the factual backdrop of the issues leading to the formulation of 11- Judge and 5-Judge Benches respectively. For details thereof a reference may be made to the reported decisions. A brief summary of the past events, highlighting the issues as they have travelled in search of resolution would be apposite. II BACKDROP Education used to be charity or philanthropy in good old times. Gradually it became an 'occupation'. Some of the dicta go on to hold it as an 'industry'. Whether, to receive education, is a fundamental right or not has been debated for quite some time. But it is settled that establishing and administering of an educational institution for imparting knowledge to the students is an occupation, protected by Article 19(1)(g) and additionally by Article 26(a ), if there is no element of profit generation. As of now, imparting education has come to be a means of livelihood for some professionals and a mission in life for some altruists. ", "Education has since long been a matter of litigation. Law reports are replete with rulings touching and centering around education in its several aspects. Until , there were four oft quoted leading cases holding the field of education. They were , (1992)1 SCC 558, (1974)1 SCC 717 and In Re: Kerala Education Bill, 1957, (1958) SCR 995. For convenience sake, these cases will be referred to as Unni Krishnan, , and Kerala Education Bill respectively. All these cases amongst others came up for the consideration of this Court in . ", "Correctness of the decision in was doubted during the course of hearing of Writ Petition No. 350 of 1993 filed by . As is a pronouncement of 5-Judge Bench, the matter was directed to be placed before 7-Judge Bench. ", "An event of constitutional significance which had already happened, was taken note of by . \"Education\" was a State Subject in view of the following Entry 11 placed in List II ___ State List:- ", "\"11. Education including universities, subject to the provisions of entries 63, 64, 65 and 66 of List I and entry 25 of List III.\" ", "By the Constitution (42nd Amendment) Act 1976, the abovesaid Entry was directed to be deleted and instead Entry 25 in List III \u0016 Concurrent List, was directed to be suitably amended so as to read as under:- ", "\"25. Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; ", "vocational and technical training of labour.\" ", " felt that the matter called for hearing by . felt that it was not bound by the ratio propounded in Kerala Education Bill and and was free to hear the case in wider perspective so as to discern the true scope and interpretation of Article 30(1) of the Constitution and make an authoritative pronouncement. ", "Eleven Questions and Five Heads of Issues in In , 11 questions were framed for being answered. Detailed submissions were made centering around the 11 questions. The dealt with the questions by classifying the discussion under the following five heads: ", "1. Is there a fundamental right to set up educational institutions and if so, under which provision? ", "2. Does require reconsideration? ", "3. In case of private institutions, can there be government regulations and, if so, to what extent? ", "4. In order to determine the existence of a religious or linguistic minority in relation to Article 30 , what is to be the unit __ the or the country as a whole? ", "5. To what extent can the rights of aided private minority institutions to administer be regulated? ", "Having dealt with each of the heads, the through the majority opinion expressed by , CJ, recorded answers to the 11 questions as they were framed and posed for resolution. The questions and the answers as given by the majority are set out hereunder: ", "\"Q.1. What is the meaning and content of the expression \"minorities\" in Article 30 of the Constitution of India? ", "A. Linguistic and religious minorities are covered by the expression \"minority\" under Article 30 of the Constitution. Since reorganization of the s in India has been on linguistic lines, therefore, for the purpose of determining the minority, the unit will be the and not the whole of India. Thus, religious and linguistic minorities, who have been put on a par in Article 30 , have to be considered wise. ", "Q.2. What is meant by the expression \"religion\" in Article 30(1)? Can the followers of a sect or denomination of a particular religion claim protection under Article 30(1) on the basis that they constitute a minority in the State, even though the followers of that religion are in majority in that State? ", "A. This question need not be answered by this Bench; it will be dealt with by a regular Bench. ", "Q.3 (a) What are the indicia for treating an educational institution as a minority educational institution? Would an institution be regarded as a minority educational institution because it was established by a person(s) belonging to a religious or linguistic minority or its being administered by a person(s) belonging to a religious or linguistic minority? ", "A. This question need not be answered by this Bench; it will be dealt with by a regular Bench. ", "Q.3(b) To what extent can professional education be treated as a matter coming under minorities' rights under Article 30? ", "A. Article 30(1) gives religious and linguistic minorities the right to establish and administer educational institutions of their choice. The use of the words \"of their choice\" indicates that even professional educational institutions would be covered by Article 30. ", "Q.4. Whether the admission of students to minority educational institution, whether aided or unaided, can be regulated by or by the university to which the institution is affiliated? ", "A. Admission of students to unaided minority educational institutions viz. schools and undergraduate colleges where the scope for merit-based selection is practically nil, cannot be regulated by the or university concerned, except for providing the qualifications and minimum conditions of eligibility in the interest of academic standards. ", "[emphasis by us] The right to admit students being an essential facet of the right to administer educational institutions of their choice, as contemplated under Article 30 of the Constitution, the State Government or the university may not be entitled to interfere with that right, so long as the admission to the unaided educational institutions is on a transparent basis and the merit is adequately taken care of. The right to administer, not being absolute, there could be regulatory measures for ensuring educational standards and maintaining excellence thereof, and it is more so in the matter of admissions to professional institutions. ", "[emphasis by us] A minority institution does not cease to be so, the moment grant-in-aid is received by the institution. An aided minority educational institution, therefore, would be entitled to have the right of admission of students belonging to the minority group and at the same time, would be required to admit a reasonable extent of non-minority students, so that the rights under Article 30(1) are not substantially impaired and further the citizens' rights under Article 29(2) are not infringed. What would be a reasonable extent, would vary from the types of institution, the courses of education for which admission is being sought and other factors like educational needs. concerned has to notify the percentage of the non-minority students to be admitted in the light of the above observations. Observance of inter se merit amongst the applicants belonging to the minority group could be ensured. In the case of aided professional institutions, it can also be stipulated that passing of the common entrance test held by the agency is necessary to seek admission. As regards non-minority students who are eligible to seek admission for the remaining seats, admission should normally be on the basis of the common entrance test held by the agency followed by counselling wherever it exists. ", "Q.5(a) Whether the minorities' rights to establish and administer educational institutions of their choice will include the procedure and method of admission and selection of students? ", "A. A minority institution may have its own procedure and method of admission as well as selection of students, but such a procedure must be fair and transparent, and the selection of students in professional and higher education colleges should be on the basis of merit. The procedure adopted or selection made should not be tantamount to mal-administration. Even an unaided minority institution ought not to ignore the merit of the students for admission, while exercising its right to admit students to the colleges aforesaid, as in that event, the institution will fail to achieve excellence. ", "Q.5(b) Whether the minority institutions' right of admission of students and to lay down procedure and method of admission, if any, would be affected in any way by the receipt of State aid? ", "A. While giving aid to professional institutions, it would be permissible for the authority giving aid to prescribe bye __ rules or regulations, the conditions on the basis of which admission will be granted to different aided colleges by virtue of merit, coupled with the reservation policy of the State qua non-minority students. The merit may be determined either through a common entrance test conducted by the university or the concerned followed by counselling, or on the basis of an entrance test conducted by the individual institutions \u0016 the method to be followed is for the university or the to decide. The authority may also devise other means to ensure that admission is granted to an aided professional institution on the basis of merit. In the case of such institutions, it will be permissible for the or the university to provide that consideration should be shown to the weaker sections of the society. ", "Q.5(c) Whether the statutory provisions which regulate the facets of administration like control over educational agencies, control over governing bodies, conditions of affiliation including recognition/withdrawal thereof, and appointment of staff, employees, teachers and principals including their service conditions and regulation of fees, etc. would interfere with the right of administration of minorities? ", "A. So far as the statutory provisions regulating the facets of administration are concerned, in case of an unaided minority educational institution, the regulatory measure of control should be minimal and the conditions of recognition as well as the conditions of affiliation to a university or board have to be complied with, but in the matter of day-to-day management, like the appointment of staff, teaching and non-teaching, and administrative control over them, the management should have the freedom and there should not be any external controlling agency. However, a rational procedure for the selection of teaching staff and for taking disciplinary action has to be evolved by the management itself. ", "For redressing the grievances of employees of aided and unaided institutions who are subjected to punishment or termination from service, a mechanism will have to be evolved, and in our opinion, appropriate tribunals could be constituted, and till then, such tribunals could be presided over by a judicial officer of the rank of District Judge. ", "The or other controlling authorities, however, can always prescribe the minimum qualification, experience and other conditions bearing on the merit of an individual for being appointed as a teacher or a principal of any educational institution. ", "Regulations can be framed governing service conditions for teaching and other staff for whom aid is provided by the , without interfering with the overall administrative control of the management over the staff. ", "Fees to be charged by unaided institutions cannot be regulated but no institution should charge capitation fee. ", "Q.6(a) Where can a minority institution be operationally located? Where a religious or linguistic minority in State A establishes an educational institution in the said State, can such educational institution grant preferential admission/reservations and other benefits to members of the religious/linguistic group from other States where they are non-minorities? ", "A. This question need not be answered by this Bench; it will be dealt with by a regular Bench. ", "Q. 6. (b) Whether it would be correct to say that only the members of that minority residing in State A will be treated as the members of the minority vis-`-vis such institution? ", "A. This question need not be answered by this Bench; it will be dealt with by a regular Bench. ", "Q.7. Whether the member of a linguistic non-minority in one State can establish a trust/society in another State and claim minority status in that State? ", "A. This question need not be answered by this Bench; it will be dealt with by a regular Bench. ", "Q.8. Whether the ratio laid down by this in St. Stephen's case (St. Stephen's , ) is correct? If no, what order? ", "A. The basic ratio laid down by this in case (supra) is correct, as indicated in this judgment. However, rigid percentage cannot be stipulated. It has to be left to authorities to prescribe a reasonable percentage having regard to the type of institution, population and educational needs of minorities. ", "Q. 9. Whether the decision of this Court in ., (except where it holds that primary education is a fundamental right) and the scheme framed thereunder require reconsideration/modification and if yes, what? ", "A. The scheme framed by this in case (supra) and the direction to impose the same, except where it holds that primary education is a fundamental right, is unconstitutional. However, the principle that there should not be capitation fee or profiteering is correct. Reasonable surplus to meet cost of expansion and augmentation of facilities does not, however, amount to profiteering. ", "Q. 10. Whether the non-minorities have the right to establish and administer educational institution under Articles 21 and 29(1) read with Articles 14 and 15(1), in the same manner and to the same extent as minority institutions? and Q. 11. What is the meaning of the expressions \"education\" and \"educational institutions\" in various provisions of the Constitution? Is the right to establish and administer educational institutions guaranteed under the Constitution? ", "A. The expression \"education\" in the articles of the Constitution means and includes education at all levels from the primary school level up to the postgraduate level. It includes professional education. The expression \"educational institutions\" means institutions that impart education, where \"education\" is as understood hereinabove. ", "The right to establish and administer educational institutions is guaranteed under the Constitution to all citizens under Articles 19(1)(g) and 26, and to minorities specifically under Article 30. ", "All citizens have a right to establish and administer educational institutions under Articles 19(1)(g) and 26, but this right is subject to the provisions of Articles 19(6) and 26(a). However, minority institutions will have a right to admit students belonging to the minority group, in the manner as discussed in this judgment.\" ", "The majority led by , CJ, in did say that the expression \"minorities\" in Article 30 of the Constitution of India, whether linguistic or religious, has to be determined by treating the and not the whole of India as unit. Questions such as: (i) what is religion, (ii) what is the indicia for determining if an educational institution is a minority institution, ", "(iii) whether a minority institution can operate extra-territorially extending its activities into such states where the minority establishing and administering the institution does not enjoy minority status, (iv) the content and contour of minority by reference to territories, were not answered in and were left to be determined by the regular Benches in individual cases to be heard after the decision in . We also do not propose to involve ourselves by dealing with these questions except to the extent it may become necessary to do so for the purpose of answering the questions posed before us. ", " explained in Judgment was delivered on 31.10.2002. , various State Governments and , each understood the majority judgment in its own way. The State Governments embarked upon enacting laws and framing the regulations, governing the educational institutions in consonance with their own understanding of . This led to litigation in several s. Interim orders passed therein by came to be challenged before this . At the hearing, again the parties through their learned counsel tried to interpret the majority decision in in different ways as it suited them. The parties agreed that there were certain anomalies and doubts, calling for clarification. The persons seeking such clarifications were unaided professional educational institutions, both minority and non-minority. The formulated four questions as arising for consideration in view of the rival submissions made before the in : ", "\"(1) whether the educational institutions are entitled to fix their own fee structure; ", "(2) whether minority and non-minority educational institutions stand on the same footing and have the same rights; (3) whether private unaided professional colleges are entitled to fill in their seats, to the extent of 100% , and if not, to what extent; and (4) whether private unaided professional colleges are entitled to admit students by evolving their own method of admission.\" ", "We could attempt at formulating the gist of the answers given by the Constitution Bench of the Court as under: ", "(1) Each minority institution is entitled to have its own fee structure subject to the condition that there can be no profiteering and capitation fees cannot be charged. A provision for reasonable surplus can be made to enable future expansion. The relevant factors which would go into determining the reasonability of a fee structure, in the opinion of majority, are: ", "(i) the infrastructure and facilities available, (ii) the investments made, (iii) salaries paid to the teachers and staff, (iv) future plans for expansion and betterment of the institution etc. J, defined what is 'capitation' and 'profiteering' and also said that reasonable surplus should ordinarily vary from 6 per cent to 15 per cent for utilization in expansion of the system and development of education. ", "(2) In the opinion of the majority, minority institutions stand on a better footing than non-minority institutions. Minority educational institutions have a guarantee or assurance to establish and administer educational institutions of their choice. State Legislation, primary or delegated, cannot favour non- minority institution over minority institution. The difference arises because of Article 30 , the protection whereunder is available to minority educational institutions only. The majority opinion called it a \"special right\" given under Article 30. ", "In the opinion of , J, minority educational institutions do not have a higher right in terms of Article 30(1); the rights of minorities and non-minorities are equal. What is conferred by Article 30(1) of the Constitution is \"certain additional protection\" with the object of bringing the minorities on the same platform as that of non-minorities, so that the minorities are protected by establishing and administering educational institutions for the benefit of their own community, whether based on religion or language. ", "It is clear that as between minority and non-minority educational institutions, the distinction made by Article 30(1) in the fundamental rights conferred by Article 19(1)(g) has been termed by the majority as \"special right\" while in the opinion of , J, it is not a right but an \"additional protection\". What difference it makes, we shall see a little later. ", "(3)&(4). Questions 3 and 4 have been taken up for consideration together. A reading of the opinion recorded in shows that paras 58, 59 and 68 of were considered and sought to be explained. It was not very clear as to what types of institutions were being dealt with in the above referred to paragraphs by the majority in . Certainly, distinction was being sought to be drawn between professional colleges and other educational institutions (both minority and unaided). Reference is also found to have been made to minority and non-minority institutions. At some places, observations have been made regarding institutions divided into groups only by reference to aid, that is whether they are aided or unaided educational institutions without regard to the fact whether they were minority or non- minority institutions. It appears that there are a few passages/sentences wherein it is not clear which type of institutions the majority opinion in was referring to thereat. However, the majority opinion in has by explaining held as under: ", "(1) In professional institutions, as they are unaided, there will be full autonomy in their administration, but the principle of merit cannot be sacrificed, as excellence in profession is in national interest. ", "(2) Without interfering with the autonomy of unaided institutions, the object of merit based admissions can be secured by insisting on it as a condition to the grant of recognition and subject to the recognition of merit, the management can be given certain discretion in admitting students. ", "(3) The management can have quota for admitting students at its discretion but subject to satisfying the test of merit based admissions, which can be achieved by allowing management to pick up students of their own choice from out of those who have passed the common entrance test conducted by a centralized mechanism. Such common entrance test can be conducted by the or by an association of similarly placed institutions in the . ", "(4) The can provide for reservation in favour of financially or socially backward sections of the society. ", "(5) The prescription for percentage of seats, that is allotment of different quotas such as management seats, 's quota, appropriated by the for allotment to reserved categories etc., has to be done by the in accordance with the \"local needs\" and the interests/needs of that minority community in the , both deserving paramount consideration. The exact concept of \"local needs\" is not clarified. The plea that each minority unaided educational institution can hold its own admission test was expressly overruled. The principal consideration which prevailed with the majority in for holding in favour of common entrance test was to avoid great hardship and incurring of huge cost by the hapless students in appearing for individual tests of various colleges. ", "The majority opinion carved out an exception in favour of those minority educational professional institutions which were established and were having their own admission procedure for at least 25 years from the requirement of joining any common entrance test, and such institutions were permitted to have their own admission procedure. The State Governments were directed to appoint a permanent Committee to ensure that the tests conducted by the association of colleges is fair and transparent. ", ", J, in his separate opinion, agreed with the majority that the merit and merit alone should be the basis of selection for the candidates. He also agreed that one single standard for all the institutions was necessary to achieve the object of selection being made on merit by maintaining uniformity of standard, which could not be left to any individual institution in the matter of professional courses of study. However, the merit criterion in the opinion of , J, was required to be associated with the level of education. To quote his words: \"the merit criterion would have to be judged like a pyramid. At the kindergarten, primary, secondary levels, minorities may have 100% quota. At this level the merit may not have much relevance at all but at the level of higher education and in particular, professional education and postgraduate-level education, merit indisputably should be a relevant criterion. At the postgraduation level, where there may be a few seats, the minority institutions may not have much say in the matter. Services of doctors, engineers and other professionals coming out from the institutions of professional excellence must be made available to the entire country and not to any particular class or group of people. All citizens including the minorities have also a fundamental duty in this behalf.\" ", "Before we part with the task of summing up the answers given to the four questions in , we would like to make a few observations of ours in this regard. First, the majority opinion spread over 30 printed pages, and the minority opinion spread over 60 printed pages, both though illuminating and instructive, have nonetheless not summed up or pointedly answered the questions. We have endeavoured to cull out and summarize the answers, noted above, as best and as briefly as we could from the two opinions. We would, therefore, hasten to add that in order to fully appreciate the ratio of the two opinions, they have to be read in detail and our attempt at finding out and placing in a few chosen words the ratio decidendi of the two separately recorded opinions, is subject to this limitation. However, we shall make a reference to relevant passages from the two opinions as and when it becomes necessary. A point of significance which we would like to briefly note here itself, a detailed discussion being relegated to a later part of this judgment, is that the opinion of , has examined in detail, the scope of protection conferred on minority institutions by reference to their right to seek recognition or affiliation, an aspect of wider significance which does not seem to have received consideration with that emphasis either in or in the majority opinion in . We shall revert to this aspect a little later. III Issues herein A Few Preliminary observations Before we embark upon dealing with the issues posed before us for resolution, we would like to make a few preliminary observations as a preface to our judgment inasmuch as that would outline the scope of the controversy with which we are actually dealing here. At the very outset, we may state that our task is not to pronounce our own independent opinion on the several issues which arose for consideration in . Even if we are inclined to disagree with any of the findings amounting to declaration of law by the majority in , we cannot; that being a pronouncement by 11- Judge Bench, we are bound by it. We cannot express a dissent or disagreement howsoever we may be inclined to do so on any of the issues. The real task before us is to cull out the ratio decidendi of and to examine if the explanation or clarification given in runs counter to and if so, to what extent. If we find anything said or held in in conflict with , we shall say so as being a departure from the law laid down by and on the principle of binding efficacy of precedents, over-rule to that extent the opinion of in . ", "It is pertinent to note, vide paras 2, 3 and 35 of , that most of the petitioners/applicants therein were unaided professional educational institutions (both minority and non-minority). The purpose of constituting , as noted at the end of para 1, was \"so that doubts/anomalies, if any, could be clarified.\" Having answered the questions, treated all interlocutory applications as regards interim matters as disposed of (see para ", "23). All the main matters (writ petitions, transfer petitions and special leave petitions) were directed to be placed before the regular Benches for disposal on merits. ", " in addition to giving clarifications on Interlocutory Applications, directed setting up of two committees in each State: one committee \"to give effect to the judgment in \" and to approve the fee structure or to propose some other fee which can be charged by minority institutions (vide para 7), and the other committee __ to oversee the tests to be conducted by the association of institutions (vide para 19). ", "Since the direction made in for appointment of the Committees has been vehemently assailed during the course of hearing before us, we would extract from the judgment in the following two passages wherein, in the words of , CJ, the purpose and the constitution of the Committees, the powers conferred on and the functions enjoined upon them are given: ", "\"\u0005..we direct that in order to give effect to the judgment in case the respective State Governments/concerned authority shall set up, in each State, a committee headed by a retired Judge who shall be nominated by the Chief Justice of that State. The other member, who shall be nominated by the Judge, should be a Chartered Accountant of repute. A representative of (in short \"\") or (in short \"AICTE\"), depending on the type of institution, shall also be a member. The Secretary of in charge of or , as the case may be, shall be a member and Secretary of the . The should be free to nominate/co-opt another independent person of repute, so that the total number of members of the shall not exceed five. Each educational institute must place before this , well in advance of the academic year, its proposed fee structure. ", "Along with the proposed fee structure all relevant documents and books of accounts must also be produced before the for their scrutiny. The shall then decide whether the fees proposed by that institute are justified and are not profiteering or charging capitation fee. The will be at liberty to approve the fee structure or to propose some other fee which can be charged by the institute. The fee fixed by the shall be binding for a period of three years, at the end of which period the institute would be at liberty to apply for revision. Once fees are fixed by the , the institute cannot charge either directly or indirectly any other amount over and above the amount fixed as fees. If any other amount is charged, under any other head or guise e.g. donations, the same would amount to charging of capitation fee. The Governments/appropriate authorities should consider framing appropriate regulations, if not already framed, whereunder if it is found that an institution is charging capitation fees or profiteering that institution can be appropriately penalised and also face the prospect of losing its recognition/affiliation. (para 7) We now direct that the respective Governments do appoint a permanent which will ensure that the tests conducted by the association of colleges is fair and transparent. For each a separate shall be formed. The would be headed by a retired Judge of . The Judge is to be nominated by the Chief Justice of that . The other member, to be nominated by the Judge, would be a doctor or an engineer of eminence (depending on whether the institution is medical or engineering/technical). The Secretary of the in charge of , as the case may be, shall also be a member and act as the Secretary of the . The will be free to nominate/co-opt an independent person of repute in the field of education as well as one of the Vice-Chancellors of the University in that so that the total number of persons on the do not exceed five. The shall have powers to oversee the tests to be conducted by the association. This would include the power to call for the proposed question paper(s), to know the names of the paper-setters and examiners and to check the method adopted to ensure papers are not leaked. The shall supervise and ensure that the test is conducted in a fair and transparent manner. ", "The shall have the powers to permit an institution, which has been established and which has been permitted to adopt its own admission procedure for the last, at least, 25 years, to adopt its own admission procedure and if the feels that the needs of such an institute are genuine, to admit, students of their community, in excess of the quota allotted to them by . Before exempting any institute or varying in percentage of quota fixed by the , must be heard before the . It is clarified that different percentage of quota for students to be admitted by the management in each minority or non-minority unaided professional college(s) shall be separately fixed on the basis of their need by the respective Governments and in case of any dispute as regards fixation of percentage of quota, it will be open to the management to approach the . It is also clarified that no institute, which has not been established and which has not followed its own admission procedure for the last, at least, 25 years, shall be permitted to apply for or be granted exemption from admitting students in the manner set out hereinabove. (para 19)\" ", ", has not specifically spoken of the . Nevertheless he made a reference to these in his opinion and thus impliedly recorded his concurrence with the constitution of these . ", "Vide para 20, has made it clear that the setting up of two sets of Committees in the States has been directed in exercise of the power conferred on this by Article 142 of the Constitution and such Committees \"shall remain in force till appropriate legislation is enacted by \". Although the term 'permanent' has been used, but it appears to us that these Committees are intended to be transitory in nature. ", "Reference for constituting a Bench of a coram higher than Constitution Bench These matters have been directed to be placed for hearing before a Bench of seven Judges under Orders of the Chief Justice of India pursuant to Order dated July 15, 2004 in ., and Order dated July 29, 2004 in Pushpagiri Medical Society v. State of Kerala and Ors., (2004) 8 SCC ", "135. The aggrieved persons before us are again classifiable in one class, that is, unaided minority and non-minority institutions imparting professional education. The issues arising for decision before us are only three: ", "(i) the fixation of 'quota' of admissions/students in respect of unaided professional institutions; ", "(ii) the holding of examinations for admissions to such colleges, that is, who will hold the entrance tests; and ", "(iii) the fee structure. ", "The questions spelled out by Orders of Reference In the light of the two orders of reference, referred to hereinabove, we propose to confine our discussion to the questions set out hereunder which, according to us, arise for decision:- ", "(1) To what extent the can regulate the admissions made by unaided (minority or non- minority) educational institutions? Can the enforce its policy of reservation and/or appropriate to itself any quota in admissions to such institutions? ", "(2) Whether unaided (minority and non-minority) educational institutions are free to devise their own admission procedure or whether direction made in for compulsorily holding entrance test by the or association of institutions and to choose therefrom the students entitled to admission in such institutions, can be sustained in light of the law laid down in ? ", "(3) Whether could have issued guidelines in the matter of regulating the fee payable by the students to the educational institutions? ", "(4) Can the admission procedure and fee structure be regulated or taken over by the Committees ordered to be constituted by ? ", "The issues posed before us are referable to headings 3 and 5 out of 'five headings' formulated by , CJ in . So also speaking by reference to the 11 questions framed in , the questions and answers relevant for us would be referable to question Nos. 3 (b), 4, 5 (a) (b) (c) and (9). ", "IV Submissions made A number of learned counsel addressed the at the time of hearing raising very many issues and canvassing different view-points of law referable to those issues. We propose to place on record, as briefly as we can, the principal submissions made confined to the issues arising for decision before us. ", "The arguments on behalf of the petitioners were led by senior counsel . Extensively reading various relevant paragraphs and observations in different opinions in , learned counsel contends that the directions for setting up permanent committees for regulating admissions and fixing fee structure in unaided minority and non-minority institutions issued in the case of are contrary to the ratio of judgment in . According to learned counsel, the directions clearly run counter to all earlier decisions of this in , and Kerala Education Bill. ", "It is argued that in the judgment of the eleven judges in which deals with several diverse issues of considerable complexity, every observation has to be understood in its context. Paragraph 68 in has wrongly been read as the ratio of the judgement by the Bench of five judges in the case of . It is submitted that paragraph 68 in the majority opinion in has to be read and understood in the context of the constitutional interpretation placed on Articles 29 & 30 of the Constitution. Reading thus, the directions for setting up permanent committees, for fixing quota and fee structure seriously impinge on the constitutional guarantee of autonomy to minority institutions under Article 30 and to unaided non-minority institutions under Article 19(1)(g). It is submitted that taking over the right to regulate admission and fee structure of unaided professional institutions is not a 'reasonable restriction' within the meaning of Article 19(6) of the Constitution. Such restriction is virtual negation of the constitutional protection of autonomy to minorities in running educational institutions 'of their choice' as provided in Article 30 of the Constitution. ", "Elaborating his legal propositions, learned senior counsel argued that establishing and running an educational institution is a guaranteed fundamental right of 'occupation' under Article 19(1)(g) of the Constitution. Article 19(6) permits to make regulations and place reasonable restrictions in public interest upon the rights enjoyed by citizens under Article 19(1)(g) of the Constitution. Any imposition of a system of selection of students for admission would be unreasonable if it deprives the private unaided institutions of the right of rational selection which it has devised for itself. Subject to the minimum qualifications that may be prescribed and to some system of computing the equivalence between different kinds of qualifications like a common entrance test, it can evolve a system of selection involving both written and oral tests based on principle of fairness. Reference is made to paragraph 40 of the judgment in . ", "It is submitted that the can prescribe minimum qualifications and may prescribe systems of computing equivalence in ascertaining merit; however, the right of rational selection, which would necessarily involve the right to decide upon the method by which a particular institution computes such equivalence, is protected by Article 19 and infringement of this right constitutes an unreasonable encroachment upon the constitutionally guaranteed autonomy of such institutions. ", "It is further argued that where take over the right of the institution to grant admission and/or to fix the fees, it constitutes nationalization of educational institutions. Such nationalization of education is an unreasonable restriction on the right conferred under Article 19. Reliance is placed on paragraph 38 of the judgment in . ", "Learned counsel further argues that schemes framed relating to grant of admission and fixing of fees in has been held to be unconstitutional by the 11-Judge Bench in . [Reference is made to paragraph 45 of the judgment in ] It is submitted that the directions to set up committees for regulation of admission and fee structure in virtually do the same exercise as was done in and disapproved in the larger Bench decision in . The submission in substance made is that was disapproved in and has wrongly been re-introduced in . ", "It is argued that necessity cannot be a ground to curtail the right of a citizen conferred under Article 19(1)(g) of the Constitution. The Constitution casts a duty upon the s to provide educational facilities. The is obliged to carry out this duty from revenue raised by the . The shortfall in the efforts of the is met by the private enterprise, that however, does not entitle the to nationalize, whether in the whole or in part, such private enterprise. This, it is submitted, is the true ratio of in so far as Article 19 of the Constitution is concerned. ", "It is next argued that as held in and re- affirmed in the right to establish and administer educational institutions by minorities under Article 30 of the Constitution is not an absolute right meaning thereby that it is subject to such regulations that satisfy a dual test that is : the test of 'reasonableness' and 'any regulation regulating the educational character of the institutions so that it is conducive to making the institution an effective vehicle of education for the minority community and for the others who resort to it'. Any regulation which impinges upon the minority character of the institutions is constitutionally impermissible. It is submitted that between the right of minorities to establish and administer the educational institutions and the right of the to regulate educational activities for maintaining standard of education, a balance has to be struck. The regulation in relation to recognition/affiliation operates in the area of standard of excellence and are unquestionable if they do not seriously curtail or destroy the right of minorities to administer their educational institutions. Only in maintaining standards of education, can insist by framing regulations that they be followed but in all other areas the rights of minority must be protected. It is conceded that mal-administration is not protected by Article 30 of the Constitution. Similarly, secular laws with secular object that do not directly impinge upon the right of minority institutions and operate generally upon all citizens do not impinge upon Article 30 of the Constitution. This has been the constitutional interpretation of Article 30 not because Article 30 admits no exception like Article 19(6) but because the right conferred under Article 30 does not extend to these areas. The laws that serve national interest do not impinge upon Article 30. ", "Learned counsel in elaborating his argument tried to make a distinction between the rights of aided institutions and unaided institutions. Article 29(2) places a limitation on the right of an aided institution by providing that if aid is obtained, 'no citizen shall be denied admission on grounds only of religion, race, caste, language or any of them'. It is submitted that as a necessary corollary, no such limitation can be placed while regulating admission in an unaided minority institution which may prefer to admit students of minority community. So far as unaided minority educational institutions are concerned, the submission made is that government has no right or power, much less duty, to decide as to which method of selection of students is to be adopted by minority institutions. The role of the government is confined to ensuring that there is no mal- administration in the name of selection of students or in the fixation of fees. No doubt, the is under a duty to prevent mal-administration, that is to control charging of capitation fees for the seats regardless of merit and commercializing education resulting in exploitation of students, but to prevent mal- administration of the above nature or on the ground that there is likelihood of such mal-administration, the cannot take over the administration of the institutions themselves into its own hands. The likelihood of an abuse of a constitutional right cannot ever furnish justification for a denial of that right. An apprehension that a citizen may abuse his liberty does not provide justification for imposing restraints on the liberty of citizens. Similarly, the apprehension that the minorities may abuse their educational rights under Article 30 of the Constitution cannot constitute a valid basis for the to take over those rights. ", "Learned senior counsel appearing on behalf of unaided (through its ) of both categories of minority and non-minority has questioned the correctness of the directions in the case of for setting up permanent committees for fixation of quota and determination of fees. According to him, as held in , in the name of controlling capitation, there cannot be indirect nationalization and complete control of unaided professional institutes. In the case of , the ratio of that autonomy of unaided non-minority institutions is an important facet of their right under Article 19(1)(g) and in case of minority under Article 19(1)(g) read with Article 30 of the Constitution has been ignored. ", "On behalf of unaided private professional colleges, learned counsel further submitted that there are many private educational institutes which have been set up by people belonging to a region or a community or a class in order to promote their own groups. As long as these groups form an unaided minority institution, they are entitled to have transparent criteria to admit students belonging to their group. For instance, scheduled castes and scheduled tribes have started ; Lingayaths have started in Belgaun and people belonging to Vokalliga community have started . Similarly, Edava community in Kerala has started its own colleges. Sugar cooperatives in Maharashtra have started their own colleges. Learned counsel also highlighted an instance of a college opened in Tamil Nadu by for the education of their children on the engineering side. He submitted that if the is allowed to interfere in the admission procedure in these private institutions set up with the object of providing educational facilities to their own group, community or poorer sections, the very purpose and object of setting up a private medical college by a group or community for their own people would be defeated. ", "According to learned counsel, the State control in unaided private professional colleges can only be to the extent of monitoring or overseeing its working so that they do not indulge in profiteering by charging capitation fees and sacrifice merit. According to the learned counsel, in the directions contained in , the main ratio of that the unaided institutions should have autonomy in the matter of admission and fees structure has been totally forgotten. The learned counsel raised very serious objections to the manner in which the various permanent committees set up in several States on the directions of are conducting themselves and forcing their decisions on private institutions. The proposed fee structure is required to be placed before the in advance of the academic year by the institute. It is the which has to decide whether the fees proposed by the institute are justified and do not amount to profiteering or charging of capitation fees. The has been given liberty to approve the fee structure of the institute or to propose a different fee structure. The fee fixed by the is binding for a period of three years and at the end of the said period the institute would be at liberty to apply for revision. Learned counsel gave in writing certain illustrations of decisions of the Fee in few unaided colleges in the State of Karnataka and pointed out that without proper financial expertise and without studying the relevant documents and accounts, the determined the fee structure by only taking into account the affordability of the parents of the students with no regard whatsoever to the viability of the institute on the basis of finances so generated. It is argued as to why private professional institutes should not be allowed to modernize its facilities and provide better professional education than government institutes. It is pointed out that in the case of non-minority unaided , Bangalore, the Fee initially fixed annual fee at Rs.2.55 lacs for MBBS course as against the justification shown by the institute for demanding Rs. 3.90 lacs. The decision of the Fee led to the filing of writ petition by the institute in and agitation and demonstrations by the students' union. The under the pressure of the student community reduced the annual fee to Rs.1.6 lacs which was re- affirmed after directed that the management of the unaided college should be heard before reducing the annual fee. ", "Thus the learned counsel on behalf of questioned the correctness of the directions of the in . It is submitted that as decided in by a larger , the essence of private educational institutions is the autonomy that the institution must have in its management and administration. The 'right to establish and administer' particularly comprises the right a) to admit students and b) to set up reasonable fee structure. The autonomy of the institution, therefore, predicates that all seats would be filled by the management and there can be no reservations or quotas in favour of the . In , the only observations made were that some colleges may be required to admit a small percentage of students belonging to weaker sections of the society by granting them freeships or scholarships. It is conceded that autonomy of a private educational institution to admit students of its choice does not mean that there can be no insistence on transparency in the admission procedure and on merit being the criterion for admission. It is submitted that autonomy of a private educational institution could mean that they can, according to the objects and purposes of their institutions, give preference to a particular class or group of students like in , students from backward area in Bijapur college and transport employees' children in Madras Corporation Employees' College or the children of employees of in a college established by that company. The right to charge fees so as to run the college and to generate sufficient funds for its betterment and growth cannot be controlled by the . That would seriously encroach upon the autonomy of the private unaided institution. It is submitted, by quoting Dr. , the then Chairman of , that interests of democracy lie with the resistance of the trend towards governmental domination of the educational process. In conclusion, learned counsel representing private unaided colleges in Karnataka submits that the decision in and the directions made therein go far beyond the law laid down by the larger in . The in virtually reviewed the larger decision in in guise of implementation of the said decision and on the basis of later developments. In , the accepted that there could be no rigid fee structure fixed by the government for private institutions. An institute should have the freedom to fix its own fee structure for day-to-day running of the institute and to generate funds for its further growth. Only capitation and diversion of profits and surplus of the institute to any other business or enterprise was prohibited. It is submitted that contrary to the legal position explained in , could not set up in each permanent committees headed by retired Judges with the power to decide on the justification of the fee proposed by the institute and propose any other fees. It could also not make the fee fixed by the binding for a period of three years. Learned counsel submits that once the college infrastructure and hospital facilities attached to the medical college have been approved by in accordance with its regulations, the total expenses of college and hospital could be taken into account by the institute to decide upon its own fee structure. Learned counsel, in criticizing the directions in , submitted that although the scheme formulated in has been expressly overruled in on the ground that it virtually nationalized education and resulted in surrendering total process of selection to the , the in 's case, in an attempt to take up preventive measures to ensure merit and check profiteering in private unaided professional institutions, cannot re-introduce quota system for the management and the and thus infringe upon the autonomy of the institute. Such an attempt, learned counsel contends, would be unconstitutional and violative of Article 19(1)(g) of the Constitution in the case of non-minority unaided institutions and also violative of Article 30 in the case of minority unaided professional institutions. Learned counsel argued that constitutionally, as held in , it is not permissible for the to impose a quota, its own reservation policy, a lower scale of fees etc. on a private unaided non- minority and unaided minority professional institutions, only by taking into consideration the interests of students. In the of Karnataka for the academic year 2004-2005, by illustration, it is shown that 75% of the intake capacity is the quota in which are included 5% quota for sports, defence and NCC; 50% quota for Scheduled Castes/Economically backward classes/Scheduled Tribes/OBC, there is total 55% reservation quota in 75% of the government quota. The remaining 25% quota left for the management is also to be taken over by the insisting on admitting students from the select list prepared on the common entrance test conducted by the . ", "Learned senior counsel also supported the submissions made by other counsel on behalf of the unaided professional institutions and added that the observations of the in clearly go far beyond anything said by eleven judges in . It is submitted that the question of quota 50:50 for and management as referred to in was in respect of aided minority educational institutions and in , the never suggested fixation of quota for and management in case of unaided professional institutions. Learned senior counsel particularly pointed out that in , the observations that different percentage of quota for students to be admitted by the management in each minority and non-minority unaided professional institutions shall be separately fixed on the basis of their need by the respective Government, was a totally new direction, nowhere to be found or supported by any of the observations in any of the opinions of the 11-Judge in . With regard to the most controversial observations contained in paragraph 68 of the opinion prepared by Justice (the then CJI) in , learned counsel contended that the decision in having been overruled by 11-Judge in , the observations in paragraph 68 which are more in tune with should not be read as the ratio of the case. Senior counsel was also critical of all the observations in fixing quota for the in unaided institutions on the basis of local needs and not the needs of the community for which the institution was set up. Learned counsel also criticized the directions in which according to him are contrary to the findings in that certain unaided private educational institutions which had been adopting its own admission procedure for the last 25 years be allowed to continue to do so. It is submitted that as a part of autonomy of the private unaided institution, the quantum of fees to be charged must be left to the institution and except for checking profiteering and capitation fees, the can have no say in fixation of fees. The scheme of setting up permanent committees for even unaided minority and non-minority institutions was not at all envisaged in . The which was the case before a smaller could not do anything beyond and contrary to what has been stated in . ", "Learned senior counsel in supporting the argument advanced against the directions in submitted that any interference with the autonomy of the institution, other than to prevent mal-administration, would not be saved by Article 19(6) of the Constitution. The concept of administration includes choice in admitting students and fixing a reasonable fee structure. In the matter of admission, if objective criteria are adopted so as to reflect the merit, it would be unexceptionable. So far as fee structure is concerned, no institution can be allowed to charge capitation fees which only means something taken over and above what the institution needs by way of revenue and capital expenditure plus a reasonable surplus. Once was overruled, private education cannot be allowed to be nationalized. It is submitted that it may be possible for the to scrutinize the expenditure of revenue and capital expenditure of an aided and unaided institution to ensure good administration but the cannot devise its own admission procedure and determine in advance a fee structure for the unaided private institutions. On the question of deducing ratio in , learned counsel referred to Halsbury Laws of England Vol. 37 page 378 in which the meaning of ratio decidendi has been explained. It is submitted that it is only the essence of the reason or principle upon which the question before a court has been decided which is alone binding as a precedent. It is dangerous to take one or two observations out of a long judgment and to treat them as if they give the ratio decidendi of the case. ", "Dr. , learned senior counsel in assailing directions issued in for setting up permanent committees to fix quota and fee structure highlighted that the State of Maharashtra has encroached upon the rights of unaided institutions by directing in one of its Government Memoranda dated 13.02.2003 that even in the quota of seats fixed for management, the unaided non-minority institutions should implement the rule of reservation (communal reservation) of . ", "Learned senior counsel contends that the net result of such illegal directions is that the reservation policy for schedule castes, schedule tribes and OBCs is to be applied not only for 50% seats of government quota but also for the remaining 50% of management quota of unaided non-minority institutions. Virtually, the management of non-aided institutions has been completely taken over by the state and as a result of communal reservations, the quota of seats fixed for government and quota fixed for the management may be filled by granting admissions to students of non-minority communities . ", "Learned senior counsel contends that in , maximum autonomy is conceded in favour of unaided institutions. The only insistence is on maintenance of transparency in method of admission and fixation of such fee structure that does not permit charging of capitation fee. Interpreting provisions of Article 19(6) and Article 30 it is contended that constitutional limitation necessarily would vary in imposing reasonable restriction where the institution is unaided or aided. ", "On the issue of constitutional protection to the unaided minority institutions, the contention advanced that general restrictions permissible under Article 19(6) can also be applied to unaided minority institutions, it is submitted, is misconceived. The submission is that education is a recognized head of charity. The object of establishing educational institution is not to make profit. Imparting education is essentially charitable in nature. The charitable nature of the occupation of establishing and running an educational institution has been recognized in . Therefore, all restrictions, which are permissible under Article 19(6) in case of other kind of professions and occupations, cannot apply to educational activities. It is submitted that restrictions imposed should satisfy the requirements of Article 30 and not only of Article 19(6). ", "In , for determining linguistic and religious minorities, the unit to be taken is . Therefore, when Tamilians, who are in majority in Tamil Nadu, establish an institution for Tamil students in Karnataka, it would be a minority institution in Karnataka. What would be the rights of such an institution of linguistic minority has not been answered either in or in . Therefore, this Bench should decide what are the rights of such cross- border institutions. ", "In short, the submission made by Sr. Counsel Dr. is that there is nothing in , which permits fixation of quotas for government seats, fixation of fee structure by the , imposition of its reservation policy and imposition of candidates on the basis of common entrance test conducted by the . In , the can have some controlling influence on unaided institutions for the purpose of ensuring transparency in admissions and checking the collection of capitation fee. In , no preemptive action by setting up permanent committees by the was envisaged or even indirectly approved. ", "The decision in , it is submitted, is contrary to the decision by the larger in , and deserves therefore to be so declared by this . ", "Learned senior counsel appears for the sole established by Muslims in the State of Maharashtra. Apart from supporting the contention advanced by other counsel against the scheme of committees evolved in , learned counsel submitted that the judgment of against which they have filed an appeal before this court has resulted in a situation where affluent students are getting admission at lesser fee and poorer students are kept out of college. It was submitted that the petitioner institute being the sole institute set up for Muslim community, their desire to cater to the educational needs of Muslim students from all over cannot be discouraged. Objecting to the fee structure prescribed by the committees in Maharashtra, the suggestion made on behalf of the institute is as under :- ", "(a) 25% students will be charged five times of the average fee, which was in vogue before judgment. ", "(b) 50% students will be charged average fee. ", "(c) Remaining 25% will be charged 1/4th of the average fee. ", "It is submitted that in the above proposed fee structure, meritorious students coming from all sections of society will be able to take admissions. At the same time, the educational institutions will be able to recover the amount required for running the educational institution in the best possible manner. It is, therefore, prayed that judgment dated 23.08.2003 prescribing uniform fee structure for all the students be set aside and minority educational institutions be allowed in the exercise of their fundamental right, to prescribe fee under a three-tier system subject to the rider of non-profiteering and not charging capitation fee. ", "In reply, on behalf of the respondents, senior counsel, , who appeared for the States of Kerala led the arguments. It may be noted at this stage that after the decisions in and , in the States of Kerala, Karnataka, Maharashtra and Tamil Nadu, their respective legislatures have passed Acts regulating admissions and charging of fee in both aided and unaided minority and non- minority private educational institutions engaged in imparting education in professional, medical, engineering and allied courses. ", "On behalf of the State of Kerala, it is pointed out that only 25% seats in private professional colleges have been reserved to be filled on the basis of central entrance test and remaining 75% seats are to be filled by the management. It is submitted that the group of paragraphs starting with 67 and ending with 70 in the majority opinion in carries the title \"Private Unaided Professional Colleges.\" This heading covers both unaided minority and non-minority professional colleges. Since paragraph 68 in the majority opinion in has been differently understood by Karnataka and Kerala, an occasion has arisen to resolve the controversy by a Bench of the present combination of seven judges. ", "To justify fixation of quota for seat sharing between and the private management and fixing a reasonable fee structure to avoid profiteering and capitation, the learned counsel highlighted certain illicit practices, which are being resorted to, by the private institutions to exploit the student community. It is submitted both the judgments in and , profiteering, commercialization of education and the collection of capitation fee have been condemned. This court had expressly held that it would be open to the government to make regulations for the purpose of preventing commercialization of professional education. It is on the line suggested by this court that had made regulations both for the purpose of admissions as well as for fixing reasonable fee which will cover not only the expenditure incurred by the institution but also give them a reasonable revenue surplus for further growth and betterment of the institution. ", " by its judgment of 23.08.2003 has fixed rupees 1.50 lacs provisionally per annum as the fee. The Government has fixed 1.76 lacs. What is being disclosed by itself is that they had collected rupees 4.38 lacs and rupees 22 lacs from different students. The explanation given is that these collections are for the whole period of five years to prevent the students from leaving the college mid-way. This explanation on the face of it is disingenuous as rupees 22 lacs was not collected uniformly from all the students. Despite the students leaving the course mid- way, the seats would still be filled. It is due to this menace and evil practice of exploiting parents and students that a Committee was required to be set up for restricting admissions in proportion to the need of the peculiar character of the institution and to check profiteering. ", "It is submitted that if the scheme as evolved in of setting up of permanent Committees is not allowed, education which is already commercialized to some extent would be wholly inaccessible to students coming from middle classes, lower-middle classes and poor sections of the society. To provide access to professional education even to weaker sections of the society in fifty percent quota of seats to be filled by the government, the reservation policy of the government has been applied. The fifty-fifty percent quota between government and management fixed by the government has been changed to twenty five-seventy five per cent by the court. Similarly, the court has struck down Regulation 11 framed by the on the ground that the cannot foist fee of students on the institution and it would be left to the management to make provisions for poorer sections of the society through free-ships or scholarships. ", "In the above-mentioned background, learned counsel submits that this Bench is not considering the correctness of judgment in . It will not and cannot go into the question of correctness of judgment in which is of a larger Bench. This Bench has a limited jurisdiction to examine whether the decision in is in any manner inconsistent with judgment in . It is submitted that if there are certain inherent inconsistencies between various paragraphs particularly 59 and 68 of the judgment in , they have to be resolved and that was exactly what was done by the five judges in . ", "In , observation in paragraph 68 under the heading \"Private Unaided Professional Colleges\" read with para 69 indicates appropriate machinery to be evolved to regulate admissions in both categories of private institutions to check exploiters who are charging capitation fee. ", "It is submitted that if the attempt by the in to resolve the apparent inconsistency in the judgment of , indicated a reasonable and plausible interpretation of the 11-Judge judgment in , this court should refrain from substituting another interpretation. ", "It is for the first time in that the question of application of Article 30 to minority professional colleges arose. All earlier judgments of this court were only concerning education in schools and colleges other than those imparting professional education. For the first time in , the court held that running an educational institution is an 'occupation' and Article 19(1) (g) guarantees it as a fundamental right. ", "It is submitted that regulation of non-minority unaided professional institution is permissible under Article 19(6) of the Constitution to prevent profiteering, levy of capitation fee and selection of non-meritorious candidates. Such regulation also does not violate right of minority professional institutions under Article 30 , which this has repeatedly held, is not an absolute right but is merely a protection extended to minorities against oppression by the majority. ", "The issue relating to reservation of seats for schedule castes, schedule tribes or OBCs, either in management quota or in quota did not come up for consideration either in or . This has to be separately dealt with by the present Bench Similarly, it is submitted that right of minority institutions to admit students from all over the country, irrespective of their religion and community and also from abroad such as NRIs never arose directly for consideration either in or . In this respect, it is submitted that the status of minority both religious and linguistic is to be determined at the state level. The minority institutions cannot claim a right to cater to the educational needs of their community from all over the country and even from abroad. ", "In paragraph 68 of the judgment in the use of the phrase 'certain percentage based on local needs' and further phrase 'different percentages can be fixed' for minority unaided and non-minority unaided professional colleges' clearly convey that quotas can be fixed based on local needs for management and for the . Meritorious students from weaker sections are not to be sidelined from higher and professional education. It is argued that the phrase 'local need' as used in paragraph 68 in the judgment of cannot be read to mean the needs of the institution concerned. So far as the selection based on merit is concerned, common entrance test has been suggested both for aided and non-aided professional colleges. When there is no common entrance test, merit becomes the casualty and the rich and the affluent corner the seats. ", "So far as the right to fix a fee structure for unaided minority or non-minority colleges or institutes is concerned, the argument that pre-fixation of fee is a serious encroachment on the rights of minority and non-minority, it is submitted, is not valid as full discretion is given to the management in fixing their fee structure. However, they would not be allowed to fix such high fee as would deny many meritorious students a chance of admission only because they come from economically weaker sections. It would be of no consolation to them to find that after admissions are over and classes have started, the fee has been lowered by the monitoring committee. If the committee is allowed to scrutinize the justification of fee fixation after the admissions and the fee is lowered, it would not be possible for the meritorious students to again seek admission. Through the Committees set up in , the fee structure would be known before hand and would serve the interest of the institution as also the students seeking admission. The Committee has to fix fee for each college depending upon its peculiar conditions and its assets and availability of funds. Coming to the question of cross subsidy, it is submitted that in , cross-subsidizing the weaker sections by the more affluent ones has not been held to be impermissible. The Bench in overruled the judgment in . The latter provided for \"marginally less merited rural or poor students bearing the burden of rich and urban students.\" The learned counsel suggests that solution can be to set apart fifteen percent of total seats in a local college to be filled by NRI/ person of independent origin/ foreign students who would volunteer to fill up the allotted seats on the management quota but on inter se merit. Each NRI student would subsidize two other students belonging to the economically and socially weaker sections based on an annual income of say less than rupees 2.5 lacs. This would cater to the financial needs of at least 30 out of 50 students selected on merit forming part of the quota and this would be a constitutionally permissible solution. ", "To streamline and further improve the admission procedure and fixation of fee structure, learned counsel has made the following proposals in writing submitting that they may be of practical value to the Committees directed to be set up by ", "A. ADMISSION: ", "Six months prior to the commencement of the academic year, the would fix the percentage of students to be admitted by a minority (religious/linguistic) professional college (other than engineering ), taking into account the local needs of the , the region as well as that of the minority- community. It would be a huge and cumbersome exercise in practice, to fix a percentage for each one of the institutions separately and it would be a pragmatic approach to have a fixed percentage for all the minority institutions which is fair and reasonable. A practical approach to the problem would require a very definite percentage to be fixed for minority institutions, say, 50% so that even if candidates of their choice, belonging to the minority institutions, are only 25% they would still have the right to select non-minority students to make up the 50%, of course, from the held by the . ", "1. The held by would ensure that the various devices adopted by professional colleges to secretly demand capitation fees and take the same in black money, thus resulting in merit being the casualty, would not take place. No prejudice will be caused to the management of the professional colleges as they could select the minority students based on inter se merit in the held by the . ", "2. There would equally be no disadvantage to any particular section or to Government if the same 50% rule is applied even to unaided non-minority professional colleges as well. ", "3. The result of following this procedure is that a consortium holding the tests for admissions is done away with and a monitoring committee, preferably headed by a retired or judge would ensure fairness and transparency both in the minority and non-minority professional institutions. ", "4. ............ ", "5. .............. ", "B. FEES: ", "The Committee suggested by and the procedure mentioned therein, appears to be the only safe method of ensuring that extortionate fees are not charged by the medical colleges. At the same time, it would be wrong to deny expenditure which the institution undertakes for ensuring excellence in education. Equally, a reasonable surplus should be permitted so that the fees charged cover the entire revenue expenditure and in addition leaves a reasonable surplus for future expansion. This alone would prevent the clandestine collection of capitation fees and would result in entrepreneurs investing in new medical colleges. ", "The Committee suggested by appears to be the ideal one consisting of a chartered accountant, a representative of the or as the case may be, with a retired judge of or as the head. ", "The fee is to be fixed on the proposal of the institution supported by documents and the procedure of fee finalization should commence at least 6 months in advance of the commencement of the academic year. ", "These proposals should all be by way of an interim arrangement as held by in para 20 with the bringing in a law, as suggested by without dragging its feet any longer.\" ", "With regard to the ambit of the constitutional guarantee of protection of educational rights of minorities under Article 30 , learned counsel submits that both religious and linguistic minority, as held in , are to be determined at the State level. On this understanding of the concept of 'minority', Article 30 has to be harmoniously construed with Article 19(1)(g) and in the light of the Directive Principles of the State Policy contained in the Articles 38, 41 and 46. Rights of minorities cannot be placed higher than the general welfare of the students and their right to take up professional education on the basis of their merit. ", "The real purpose of Article 30 is to prevent discrimination against members of the minority community and to place them on an equal footing with non-minority. Reverse discrimination was not the intention of Article 30. If running of educational institutions cannot be said to be at a higher plane than the right to carry on any other business, reasonable restriction similar to those placed on the right to carry on business can be placed on educational institutions conducting professional courses. For the purpose of these restrictions both minorities and non-minorities can be treated at par and there would not be any violation of Article 30(1 ), which guarantees only protection against oppression and discrimination of the minority from the majority. Activities of education being essentially charitable in nature, the educational institutions both of non-minority and minority character can be regulated and controlled so that they do not indulge in selling seats of learning to make money. They can be allowed to generate such funds as would be reasonably required to run the institute and for its further growth. ", "On behalf of the of Karnataka, learned senior counsel supported the judgment in of setting up permanent Committees for regulating admission and fee structure. Learned senior counsel submitted that relevant parts of paragraphs 58, 59 and 68 and answer to question no. 4 in have to be read and reconciled. They cannot be ignored simply as obiter. A combined reading of the relevant paragraphs and the answer to question no.4 makes it clear that regulations can be made by the for admission in minority and non-minority private educational institutions and more so in professional institutions. The merit for admission to professional courses is generally determined by agencies. In the reservation on certain percentage of seats by the to be filled up by counseling by state agency, is held permissible. ", "With regard to the quota fixation, learned counsel submits that paragraph 68 in allows reservation of quota for management and for the for available seats. It is submitted that the educational institutions cannot merely read the answer to question no.4 given by judgment in and ignore the other observations in other paragraphs of the judgment. ", "So far as the case of minority and non-minority unaided institutions is concerned, learned counsel submits that the balancing act has been performed in the judgment of by regulating the economy of educational institutions moderated by necessary legislation. Observation in paragraph 68 in does not amount to permitting nationalization or takeover of the private institutions which was the main feature found foul in the decision in and was consequently overruled. The observation in in paragraph 68 strikes the balance between the academy and education. To read paragraph 68 as merely giving an instance would be to ignore the concern of the in of providing reservation to poorer or backward sections of society even in private institutions. The description of percentage of reservation in paragraph 68 is different from reservation policy of the for institutions and in quota. ", "It is submitted that the reservation spoken of in paragraph 68 of is to cater to the needs of poorer and weaker sections and also other students depending upon the local needs. ", "So far as the regulation of fee structure is concerned, it is submitted that in paragraph 69 in there is a mention of \"appropriate machinery to be devised by the or University to ensure that no capitation fee is charged and profiteering is checked.\" The judgment in merely implements the legal position explained by by providing a fee determination committee. In reply to the argument that post-fixation audit may be permitted to check profiteering and capitation, the learned counsel answers that if the role of the is limited to supervisory post fixation audit, it would amount to denying credible restriction to the charging of capitation fee. It is chimerical to suggest that the student should first pay the exorbitant fee fixed by the institution and later on complain about it to the post audit machinery to recover the excess through court of law. The controlling of the fee fixing machinery is necessarily to be done before it is charged otherwise it is meaningless to the benefit of the students for whom it is suggested in paragraph 69. The general principle for scrutinizing the fee structure is two-fold; (1) that education is a charity, (2) that educational institutions cannot charge such fee as is not required for the purpose of fulfilling that object which means cost plus reasonable surplus for expansion and growth of the institution. These are the parameters before the whose decisions, in any case, are subject to judicial review. ", "So far as the admissions based on common entrance test are concerned, it is submitted that paragraphs 58 and 59 of permit regulations to be framed for admission in professional institutions by agency to ensure admission on merit. In the absence of and centralized counseling, private educational institutions would pick and choose candidates ignoring merit, as has been evident from the Karnataka experience. If the private professional educational institutions conceive that merit cannot be ignored in granting admission, direction to make selection based on does not in any manner adversely affect the character of the minority institution. The regulation providing for is a reasonable restriction and it will pass the test of Article 19(6) both in respect of aided and unaided non-minority institutions. Private unaided institutions have also to admit students on the basis of merit in a fair and transparent manner in the interest of student community. Right of private educational institutions to admit students can be regulated. Such regulations if in national and public interest do not in any manner impinge on the right of minority. ", "Learned counsel points out that so far as the State of Karnataka is concerned, no reservation policy is being insisted upon in the seats or quota given to the management. ", "Arguments were also advanced supporting the directions in by learned senior counsel appearing for the of Tamil Nadu. It is submitted that already a statement had been made in that the of Tamil Nadu would not be insisting on communal reservation based on policy in the minority institution. ", "Learned counsel pressed into service Article 51-A(j) providing for Fundamental Duties in the Constitution. It is submitted that fundamental duty is enjoined on citizens to so direct their individual and collective activities that the nation constantly rises to higher levels of endeavour and achievement. This duty implies that the on its part is to facilitate discharge of duties by the citizen in relation to the professional education. The is bound to ensure admission to colleges that are made purely on relative merit to be objectively assessed by a responsible agency. The decisions of this court rendered from time to time consistently and unanimously held that regulation could be made for achieving standards of excellence in education. Reliance is placed on at 153 and 155; Professor v. of Chhattisgarh at 79 paragraph 90. ", "V A few concepts There are a few concepts which should be very clear in our minds at the very outset, as these are the concepts which flow as undercurrents in the sea of issues surfacing for resolution in all educational cases. These concepts are referable to : (i) What is 'education'? (ii) What is the inter-relationship of Articles 19(1)(g), 29 and 30 of the Constitution? (iii) In the context of minority educational institutions, what difference does it make if they are aided or unaided or if they seek recognition or affiliation or do not do so? (iv) Would it make any difference if the instructions imparted in such educational institutions relate to professional or non-professional courses of study? Education 'Education' according to Chambers Dictionary is \"bringing up or training; strengthening of the powers of body or mind; culture.\" ", "In Advanced Law Lexicon (P. Ramanatha Aiyar, 3rd Edition, 2005, Vol.2) 'education' is defined in very wide terms. It is stated : \"Education is the bringing up; the process of developing and training the powers and capabilities of human beings. In its broadest sense the word comprehends not merely the instruction received at school, or college but the whole course of training moral, intellectual and physical; is not limited to the ordinary instruction of the child in the pursuits of literature. It also comprehends a proper attention to the moral and religious sentiments of the child. And it is sometimes used as synonymous with 'learning'.\" ", " ., , the term 'education' was held to mean __ \"the systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received\u0005. What education connotes is the process of training and developing the knowledge, skill, mind and character of students by formal schooling.\" ", "In 'India \u0016 Vision 2020' published by , it is stated (at p.250) __ \"Education is an important input both for the growth of the society as well as for the individual. Properly planned educational input can contribute to increase in the Gross National Products, cultural richness, build positive attitude towards technology and increase efficiency and effectiveness of the governance. Education opens new horizons for an individual, provides new aspirations and develops new values. It strengthens competencies and develops commitment. Education generates in an individual a critical outlook on social and political realities and sharpens the ability to self- examination, self-monitoring and self-criticism.\" ", "\"The term 'Knowledge Society', 'Information Society' and 'Learning Society' have now become familiar expressions in the educational parlance, communicating emerging global trends with far-reaching implications for growth and development of any society. These are not to be seen as mere clichi or fads but words that are pregnant with unimaginable potentialities. Information revolution, information technologies and knowledge industries, constitute important dimensions of an information society and contribute effectively to the growth of a knowledge society.\" (ibid, p.246) \" (1980) has advanced the idea that power at the dawn of civilization resided in the 'muscle'. Power then got associated with money and in 20th century it shifted its focus to 'mind'. Thus the shift from physical power to wealth power to mind power is an evolution in the shifting foundations of economy. This shift supports the observation of who said 'knowledge itself is power'; stressing the same point and upholding the supremacy of mind power, in his characteristic expression, said, \"the Empires of the future shall be empires of the mind\". Thus, he corroborated and professed the emergence of the knowledge society.\" (ibid, p.247) , has well put it in his opinion in (para 287) ___ \"Education plays a cardinal role in transforming a society into a civilised nation. It accelerates the progress of the country in every sphere of national activity. No section of the citizens can be ignored or left behind because it would hamper the progress of the country as a whole. It is the duty of the to do all it could, to educate every section of citizens who need a helping hand in marching ahead along with others\". ", "According to Dr. , a great statesman with democratic credentials, a secularist and an educationist, a true democracy is one where each and every citizen is involved in the democratic process and this end cannot be achieved unless we remove the prevailing large-scale illiteracy in our country. Unless universal education is achieved which allows every citizen to participate actively in the processes of democracy, we can never claim to be a true democracy. Dr. sought to ensure that the seeds of knowledge were germinated in the minds of as many citizens as possible, with a view to enabling them to perform their assigned roles on the stage of democracy. [Dr. , as quoted by Justice , the then Chief Justice of India, (1996) 2 SCC (J) 1, at 2-3.] Under Article 41 of the Constitution, right to education, amongst others, is obligated to be secured by the by making effective provision therefor. Fundamental duties recognized by Article 51A include, amongst others, (i) to develop the scientific temper, humanism and the spirit of inquiry and reform; and (ii) to strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement. None can be achieved or ensured except by means of education. It is well accepted by the thinkers, philosophers and academicians that if JUSTICE, LIBERTY, EQUALITY and FRATERNITY, including social, economic and political justice, the golden goals set out in the Preamble to the Constitution of India are to be achieved, the Indian polity has to be educated and educated with excellence. Education is a national wealth which must be distributed equally and widely, as far as possible, in the interest of creating an egalitarian society, to enable the country to rise high and face global competition. 'Tireless striving stretching its arms towards perfection' (to borrow the expression from ) would not be successful unless strengthened by education. ", "Education is \"\u0005continual growth of personality, steady development of character, and the qualitative improvement of life. A trained mind has the capacity to draw spiritual nourishment from every experience, be it defeat or victory, sorrow or joy. Education is training the mind and not stuffing the brain.\" (See Eternal Values for A Changing Society, Vol. III Education for Human Excellence, published by , Bombay, at p. 19) \"We want that education by which character is formed, strength of mind is increased, the intellect is expanded, and by which one can stand on one's own feet.\" \"The end of all education, all training, should be man-making. The end and aim of all training is to make the man grow. The training by which the current and expression of will are brought under control and become fruitful is called education.\" ( as quoted in , at p.20) Education, accepted as a useful activity, whether for charity or for profit, is an occupation. Nevertheless, it does not cease to be a service to the society. And even though an occupation, it cannot be equated to a trade or a business. ", "In short, education is national wealth essential for the nation's progress and prosperity. ", "Articles 19(1)(g), 29(2) and 30(1): inter-relationship between The right to establish an educational institution, for charity or for profit, being an occupation, is protected by Article 19(1) ", "(g). Notwithstanding the fact that the right of a minority to establish and administer an educational institution would be protected by Article 19(1)(g) yet the Founding Fathers of the Constitution felt the need of enacting Article 30. The reasons are too obvious to require elaboration. Article 30(1) is intended to instill confidence in minorities against any executive or legislative encroachment on their right to establish and administer educational institution of their choice. Article 30(1) though styled as a right, is more in the nature of protection for minorities. But for Article 30 , an educational institution, even though based on religion or language, could have been controlled or regulated by law enacted under Clause (6) of Article 19 , and so, Article 30 was enacted as a guarantee to the minorities that so far as the religious or linguistic minorities are concerned, educational institutions of their choice will enjoy protection from such legislation. However, such institutions cannot be discriminated against by the solely on account of their being minority institutions. The minorities being numerically less qua non-minorities, may not be able to protect their religion or language and such cultural values and their educational institutions will be protected under Article 30 , at the stage of law making. However, merely because Article 30(1) has been enacted, minority educational institutions do not become immune from the operation of regulatory measure because the right to administer does not include the right to mal-administer. To what extent the regulation can go, is the issue. The real purpose sought to be achieved by Article 30 is to give minorities some additional protection. Once aided, the autonomy conferred by the protection of Article 30(1) on the minority educational institution is diluted as provisions of Article 29(2) will be attracted. Certain conditions in the nature of regulations can legitimately accompany the aid. ", "As an occupation, right to impart education is a fundamental right under Article 19(1)(g) and, therefore, subject to control by clause (6) of Article 19. This right is available to all citizens without drawing a distinction between minority and non- minority. Such a right is, generally speaking, subject to laws imposing reasonable restrictions in the interest of the general public. In particular, laws may be enacted on the following subjects: (i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business; (ii) the carrying on by the , or by a corporation owned or controlled by the of any trade, business, industry or service whether to the exclusion, complete or partial of citizens or otherwise. Care is taken of minorities, religious or linguistic, by protecting their right to establish and administer educational institutions of their choice under Article ", "30. To some extent, what may be permissible by way of restriction under Article 19(6) may fall foul of Article 30. This is the additional protection which Article 30(1) grants to the minorities. ", "The employment of expressions 'right to establish and administer' and 'educational institution of their choice' in Article 30(1) gives the right a very wide amplitude. Therefore, a minority educational institution has a right to admit students of its own choice, it can, as a matter of its own freewill, admit students of non-minority community. However, non-minority students cannot be forced upon it. The only restriction on the freewill of the minority educational institution admitting students belonging to non-minority community is, as spelt out by Article 30 itself, that the manner and number of such admissions should not be violative of the minority character of the institution. ", "Aid and affiliation or recognition, both by , bring in some amount of regulation as a condition of receiving grant or recognition. The scope of such regulations, as spelt out by 6-Judge Bench decision in Rev. case AIR 1963 SC 540 and 9-Judge Bench case in must satisfy the following tests: (a) the regulation is reasonable and rational; (b) it is regulative of the essential character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it; (c) it is directed towards maintaining excellence of the education and efficiency of administration so as to prevent it from falling in standards. These tests have met the approval of . However, Rev. 's case and go on to say that no regulation can be cast in 'the interest of the nation' if it does not serve the interest of the minority as well. This proposition (except when it is read in the light of the opinion of , J.) stands overruled in where , CJ, speaking for majority has ruled (vide para 107) ___ \"any regulation framed in the national interest must necessarily apply to all educational institutions, whether run by the majority or the minority. Such a limitation must necessarily be read into Article 30. The right under Article 30(1) cannot be such as to override the national interest or to prevent the Government from framing regulations in that behalf\". (Also see, paras 117 to 123 and para 138 of where , CJ has dealt with in details). No right can be absolute. Whether a minority or a non- minority, no community can claim its interest to be above the national interest. ", "'Minority' And 'Minority Educational Institutions' The term 'minority' is not defined in the Constitution. Chief Justice , speaking for the majority in , took clue from the provisions of the Reorganisation Act and held that in view of India having been divided into different linguistic s, carved out on the basis of the language of the majority of persons of that region, it is the , and not the whole of India, that shall have to be taken as the unit for determining linguistic minority viz-a-viz Article 30. Inasmuch as Article 30(1) places on par religions and languages, he held that the minority status, whether by reference to language or by reference to religion, shall have to be determined by treating the as unit. The principle would remain the same whether it is a legislation or a legislation dealing with linguistic or religious minority. , (as His Lordship then was), , and & , J in their separate concurring opinions agreed with , C According to , , take the population of any as a unit, find out its demography and calculate if the persons speaking a particular language or following a particular religion are less than 50% of the population, then give them the status of linguistic or religious minority. The population of the entire country is irrelevant for the purpose of determining such status. , opined that the word 'minority' literally means 'a non-dominant' group. Ruma Pal, defined the word 'minority' to mean 'numerically less'. However, she refused to take the as a unit for the purpose of determining minority status as, in her opinion, the question of minority status must be determined with reference to the country as a whole. She assigned reasons for the purpose. Needless to say, her opinion is a lone voice. Thus, with the dictum of , it cannot be doubted that minority, whether linguistic or religious, is determinable only by reference to the demography of a and not by taking into consideration the population of the country as a whole. ", "Such definition of minority resolves one issue but gives rise to many a questions when it comes to defining 'minority educational institution'. Whether a minority educational institution, though established by a minority, can cater to the needs of that minority only? Can there be an enquiry to identify the person or persons who have really established the institution? Can a minority institution provide cross-border or inter-State educational facilities and yet retain the character of minority educational institution? ", "In Kerala Education Bill, the scope and ambit of right conferred by Article 30(1) came up for consideration. Article 30(1) does not require that minorities based on religion should establish educational institutions for teaching religion only or that linguistic minority should establish educational institution for teaching its language only. The object underlying Article 30(1) is to see the desire of minorities being fulfilled that their children should be brought up properly and efficiently and acquire eligibility for higher university education and go out in the world fully equipped with such intellectual attainments as will make them fit for entering public services, educational institutions imparting higher instructions including general secular education. Thus, the twin objects sought to be achieved by Article 30(1) in the interest of minorities are: (i) to enable such minority to conserve its religion and language, and (ii) to give a thorough, good general education to the children belonging to such minority. So long as the institution retains its minority character by achieving and continuing to achieve the above said two objectives, the institution would remain a minority institution. ", "The learned Judges in Kerala Education Bill were posed with the issue projected by Article 29(2). What will happen if the institution was receiving aid out of funds? The apparent conflict was resolved by the Judges employing a beautiful expression. They said, Article 29(2) and 30(1 ), read together, clearly contemplate a minority institution with a 'sprinkling of outsiders' admitted in it. By admitting a member of non-minority into the minority institution, it does not shed its character and cease to be a minority institution. The learned Judges went on to observe that such 'sprinkling' would enable the distinct language, script and culture of a minority being propagated amongst non-members of a particular minority community and that would indeed better serve the object of conserving the language, religion and culture of that minority. ", "Chief Justice , speaking for in State of Kerala, Etc. v. Very Rev. Mother Provincial, Etc., (1970) 2 SCC 417, has not used the expression 'sprinkling' but has explained the reason why that was necessary. He said ___ \"It matters not if a single philanthropic individual with his own means, founds the institution or the community at large contributes the funds. The position in law is the same and the intention in either case must be to found an institution for the benefit of a minority community by a member of that community. It is equally irrelevant that in addition to the minority community others from other minority communities or even from the majority community can take advantage of these institutions. Such other communities bring in income and they do not have to be turned away to enjoy the protection\". (para 8) Much of controversy can be avoided if only the nature of the right conferred by Articles 29 and 30 is clearly understood. The nature and content of these articles stands more than clarified and reconciled inter se as also with other articles if only we understand that these two articles are intended to confer protection on minorities rather than a right as such. In , their Lordships clearly held (vide para 28) that Article 30(1) is \"a protective measure only\" and further said (vide para 59) that Article 30(1) implied certain 'privilege'. Articles 29 and 30 can be better understood and utilized if read as a protection and/or a privilege of minority rather than an abstract right. ", "In this background arises the complex question of trans- border operation of Article 30(1). has clearly ruled in favour of the (or a province) being the unit for the purpose of deciding minority. By this declaration of law, certain consequences follow. First, every community in India becomes a minority because in one or the other of the country it will be in minority ___ linguistic or religious. What would happen if a minority belonging to a particular establishes an educational institution in that and administers it but for the benefit of members belonging to that minority domiciled in the neighbouring where that community is in majority? Would it not be a fraud on the Constitution? In St. Stephen's, their Lordships had ruled that Article 31 is a protective measure only for the benefit of religious and linguistic minorities and \"no illfit or camouflaged institution should get away with the constitutional protection\" (para 28). The question need not detain us for long as it stands answered in no uncertain terms in . Emphasising the need for preserving its minority character so as to enjoy the privilege of protection under Article 30(1 ), it is necessary that the objective of establishing the institution was not defeated. \"If so, such an institution is under an obligation to admit the bulk of the students fitting into the description of the minority community. Therefore, the students of that group residing in the in which the institution is located have to be necessarily admitted in a large measure because they constitute the linguistic minority group as far as that is concerned. In other words, the predominance of linguistic students hailing from the in which the minority educational institution is established should be present. The management bodies of such institutions cannot resort to the device of admitting the linguistic students of the adjoining in which they are in a majority, under the fagade of the protection given under Article 30(1).\" (para 153). The same principle applies to religious minority. If any other view was to be taken, the very objective of conferring the preferential right of admission by harmoniously constructing Articles 30(1) and 29(2), may be distorted. ", "It necessarily follows from the law laid down in that to establish a minority institution the institution must primarily cater to the requirements of that minority of that else its character of minority institution is lost. However, to borrow the words of Chief Justice (in Kerala Education Bill) a 'sprinkling' of that minority from other on the same footing as a sprinkling of non-minority students, would be permissible and would not deprive the institution of its essential character of being a minority institution determined by reference to that as a unit. Minority educational institutions: classifiable in three To establish an educational institution is a Fundamental Right. Several educational institutions have come up. In Kerala Education Bill, 'minority educational institutions' came to be classified into three categories, namely, (i) those which do not seek either aid or recognition from the ; (ii) those which want aid; and (iii) those which want only recognition but not aid. It was held that the first category protected by Article 30(1) can \"exercise that right to their hearts' content\" unhampered by restrictions. The second category is most significant. Most of the educational institutions would fall in that category as no educational institution can, in modern times, afford to subsist and efficiently function without some aid. So is with the third category. An educational institution may survive without aid but would still stand in need of recognition because in the absence of recognition, education imparted therein may not really serve the purpose as for want of recognition the students passing out from such educational institutions may not be entitled to admission in other educational institutions for higher studies and may also not be eligible for securing jobs. Once an educational institution is granted aid or aspires for recognition, the may grant aid or recognition accompanied by certain restrictions or conditions which must be followed as essential to the grant of such aid or recognition. This Court clarified in Kerala Educational Bill that 'the right to establish and administer educational institutions' conferred by Article 30(1) does not include the right to mal-administer, and that is very obvious. Merely because an educational institution belongs to minority it cannot ask for aid or recognition though running in unhealthy surroundings, without any competent teachers and which does not maintain even a fair standard of teaching or which teaches matters subversive to the welfare of the scholars. Therefore, the may prescribe reasonable regulations to ensure the excellence of the educational institutions to be granted aid or to be recognized. To wit, it is open to the to lay down conditions for recognition such as, an institution must have a particular amount of funds or properties or number of students or standard of education and so on. The dividing line is that in the name of laying down conditions for aid or recognition the cannot directly or indirectly defeat the very protection conferred by Article 30(1) on the minority to establish and administer educational institutions. Dealing with the third category of institutions, which seek only recognition but not aid, their Lordships held that 'the right to establish and administer educational institutions of their choice' must mean the right to establish real institutions which will effectively serve the needs of the community and scholars who resort to these educational institutions. The dividing line between how far the regulation would remain within the constitutional limits and when the regulations would cross the limits and be vulnerable is fine yet perceptible and has been demonstrated in several judicial pronouncements which can be cited as illustrations. They have been dealt with meticulous precision coupled with brevity by in his opinion in . The considerations for granting recognition to a minority educational institution and casting accompanying regulation would be similar as applicable to a non-minority institution subject to two overriding considerations: (i) the recognition is not denied solely on the ground of the educational institution being one belonging to minority, and (ii) the regulation is neither aimed at nor has the effect of depriving the institution of its minority status. ", " Article 30(1) speaks of 'educational institutions' generally and so does Article 29(2). These Articles do not draw any distinction between an educational institution dispensing theological education or professional or non-professional education. However, the terrain of thought as has developed through successive judicial pronouncements culminating in is that looking at the concept of education, in the backdrop of constitutional provisions, the professional educational institutions constitute a class by themselves as distinguished from the educational institutions imparting non- professional education. It is not necessary for us to go deep into this aspect of the issue posed before us inasmuch as has clarified that merit and excellence assume special significance in the context of professional studies. Though merit and excellence are not anathema to non-professional education, yet at that level and due to the nature of education which is more general, merit and excellence do not stand in need of that degree thereof, as is called for in the context of professional education. ", "Difference between professional and non-professional education institutions Dealing with unaided minority educational institutions, holds that Article 30 does not come in the way of the stepping in for the purpose of securing transparency and recognition of merit in the matter of admissions. Regulatory measures for ensuring educational standards and maintaining excellence thereof are no anathema to the protection conferred by Article 30(1). However, a distinction is to be drawn between unaided minority educational institution of the level of schools and undergraduate colleges on one side and the institutions of higher education, in particular, those imparting professional education on the other side. In the former, the scope for merit based selection is practically nil and hence may not call for regulation. But in the case of latter, transparency and merit have to be unavoidably taken care of and cannot be compromised. There could be regulatory measures for ensuring educational standards and maintaining excellence thereof. (See para 161, Answer to Q.4, in ). The source of this distinction between two types of educational institutions referred to hereinabove is to be found in the principle that right to administer does not include a right to mal-administer. ", ", J. has, in his separate opinion in , described (in para 199) the situation as a pyramid like situation and suggested the right of minority to be read along with fundamental duty. Higher the level of education, lesser are the seats and higher weighs the consideration for merit. It will, necessarily, call for more intervention and lesser say for minority. ", "Educational institutions imparting higher education, i.e. graduate level and above and in particular specialized education such as technical or professional, constitutes a separate class. While embarking upon resolving issues of constitutional significance, where the letter of the Constitution is not clear, we have to keep in view the spirit of the Constitution, as spelt out by its entire scheme. Education aimed at imparting professional or technical qualifications stand on a different footing from other educational instructions. Apart from other provisions, Article 19(6) is a clear indicator and so are clauses (h) and (j) of Article 51A. Education upto undergraduate level aims at imparting knowledge just to enrich mind and shape the personality of a student. Graduate level study is a doorway to admissions in educational institutions imparting professional or technical or other higher education and, therefore, at that level, the considerations akin to those relevant for professional or technical educational institutions step in and become relevant. This is in national interest and strengthening the national wealth, education included. Education up to undergraduate level on one hand and education at graduate and post-graduate levels and in professional and technical institutions on the other are to be treated on different levels inviting not identical considerations, is a proposition not open to any more debate after . A number of legislations occupying the field of education whose constitutional validity has been tested and accepted suggest that while recognition or affiliation may not be a must for education up to undergraduate level or, even if required, may be granted as a matter of routine, recognition or affiliation is a must and subject to rigorous scrutiny when it comes to educational institutions awarding degrees, graduate or post-graduate, post-graduate diplomas and degrees in technical or professional disciplines. Some such legislations are found referred in paras 81 and 82 of , 's opinion in . ", "Having so stated and clarified these principles which would be germane to answering the four questions posed before us, now we take up each of the four questions seriatim and answer the same. ", "And yet, before we do so, let us quote and reproduce paragraphs 68, 69 and 70 from to enable easy reference thereto as the core of controversy touching the four questions which we are dealing with seems to have originated therefrom. These paragraphs read as under: ", "\"68.(I) It would be unfair to apply the same rules and regulations regulating admission to both aided and unaided professional institutions. It must be borne in mind that unaided professional institutions are entitled to autonomy in their administration while, at the same time, they do not forego or discard the principle of merit. It would, therefore, be permissible for the university or the , at the time of granting recognition, to require a private unaided institution to provide for merit-based selection while, at the same time, giving the management sufficient discretion in admitting students. This can be done through various methods. ", "(II) For instance, a certain percentage of the seats can be reserved for admission by the management out of those students who have passed the common entrance test held by itself or by the /university and have applied to the college concerned for admission, while the rest of the seats may be filled up on the basis of counselling by the agency. This will incidentally take care of poorer and backward sections of the society. The prescription of percentage for this purpose has to be done by the according to the local needs and different percentages can be fixed for minority unaided and non-minority unaided and professional colleges. The same principles may be applied to other non-professional but unaided educational institutions viz. graduation and postgraduation non-professional colleges or institutes. ", "69. In such professional unaided institutions, the management will have the right to select teachers as per the qualifications and eligibility conditions laid down by the /university subject to adoption of a rational procedure of selection. A rational fee structure should be adopted by the management, which would not be entitled to charge a capitation fee. Appropriate machinery can be devised by the or university to ensure that no capitation fee is charged and that there is no profiteering, though a reasonable surplus for the furtherance of education is permissible. Conditions granting recognition or affiliation can broadly cover academic and educational matters including the welfare of students and teachers. ", "70. It is well established all over the world that those who seek professional education must pay for it. The number of seats available in government and government-aided colleges is very small, compared to the number of persons seeking admission to the medical and engineering colleges. All those eligible and deserving candidates who could not be accommodated in government colleges would stand deprived of professional education. This void in the field of medical and technical education has been filled by institutions that are established in different places with the aid of donations and the active part taken by public-minded individuals. The object of establishing an institution has thus been to provide technical or professional education to the deserving candidates, and is not necessarily a commercial venture. In order that this intention is meaningful, the institution must be recognized. At the school level, the recognition or affiliation has to be sought from the educational authority or the body that conducts the school-leaving examination. It is only on the basis of that examination that a school-leaving certificate is granted, which enables a student to seek admission in further courses of study after school. A college or a professional educational institution has to get recognition from the university concerned, which normally requires certain conditions to be fulfilled before recognition. It has been held that conditions of affiliation or recognition, which pertain to the academic and educational character of the institution and ensure uniformity, efficiency and excellence in educational courses are valid, and that they do not violate even the provisions of Article 30 of the Constitution; but conditions that are laid down for granting recognition should not be such as may lead to governmental control of the administration of the private educational institutions. ", "In the majority has (vide para 12) paraphrased the contents of para 68 by dividing it into seven parts. has read the same para 68 by paraphrasing it in five parts (vide para 172 of his opinion). However, we have reproduced para 68 by dividing it into two parts. A reading of the majority judgment in in its entirety supports the conclusion that while the first part of para 68 is law laid down by the majority, the second part is only by way of illustration, tantamounting to just a suggestion or observation, as to how the may devise a possible mechanism so as to take care of poor and backward sections of the society. The second part of para 68 cannot be read as law laid down by the Bench. It is only an observation in passing or an illustrative situation which may be reached by consent or agreement or persuasion. ", "A Comment It was submitted at the that a flourish of language or just a flow of thoughts placed on paper when read in isolation gives an impression as if such is the law laid down though in reality even the author of the judgment had not intended to do so. A mere observation or a reasoning leading to formulation of ultimate opinion on a disputed question of law cannot be read as a ratio of the decision. Such submissions forcefully advanced at the , have been kept in view by us while reading the several opinions in and . In the petitioners-applicants were private unaided institutions (minority and non-minority both) and the petitioners- applicants before us are also private unaided institutions, non- minority and minority (religions and linguistic) both. It was submitted that the majority opinion in has, while embarking upon clarifying the law laid down in , not only reiterated some of the propositions of law laid down in but has also added something more which was not said in and the two have been so intertwined as to become inseparable and that has been the reason for a spate of litigation post . , J., writing his separate opinion in , has not himself chosen to say whether his is a concurring opinion or a dissenting one. However, it was pointed out that , J's opinion is analytical, clear and more in consonance with the majority opinion of . It was urged that the task was difficult and unwittingly, for the sake of aiming at brevity, certain omissions have taken place. Illustratively it was pointed out that vide para 59 of , CJ, has said ___ \"Merit is usually determined, for admission to professional and higher education colleges, by either the marks that the student obtains at the qualifying examination or school-leaving certificate stage followed by the interview, or by a common entrance test conducted by the institution, or in the case of professional colleges, by government agencies.\" ", "(emphasis by us) In , vide para 70, sub-para (2)(i)(a), the abovesaid passage has been quoted as under:- \"Admission to professional colleges should be based on merit by a common entrance test conducted by the government agencies\". ", "(emphasis by us) It was pointed out that vide para 59 was just making a note of what is 'prevailing as the usual systems' for admitting students but vide para 70 gives an impression that the view taken in is to confine to common entrance test conducted by the government agencies as the only source of admission to professional colleges. ", "While expressing their appreciation of the task performed in of attempting resolution of several issues raised post , the learned counsel addressing us have tried to put across and demonstrate several such anomalies which read in juxta position with has raised. ", "Having generally dealt with the several legal propositions, relevant for our purpose, now we come to specifically dealing with the questions before us. ", "Q.1. Unaided educational institutions; appropriation of quota by and enforcement of reservation policy First, we shall deal with minority unaided institutions. ", "We have in the earlier part of this judgment referred to Kerala Education Bill and stated the three categories of minority educational institutions as classified and dealt with therein. The 7-Judge Bench decision in Kerala Education Bill still holds the field and has met the approval of 11-Judge Bench in . We cull out and state what has to say about such category of institutions:- ", "(i) Minority educational institution, unaided and unrecognized is unanimous on the view that the right to establish and administer an institution, the phrase as employed in Article 30(1) of the Constitution, comprises of the following rights: (a) to admit students; (b) to set up a reasonable fee structure; (c) to constitute a governing body; (d) to appoint staff (teaching and non-teaching); and (e) to take action if there is dereliction of duty on the part of any of the employees. (para 50) A minority educational institution may choose not to take any aid from the and may also not seek any recognition or affiliation. It may be imparting such instructions and may have students learning such knowledge that do not stand in need of any recognition. Such institutions would be those where instructions are imparted for the sake of instructions and learning is only for the sake of learning and acquiring knowledge. Obviously, such institutions would fall in the category of those who would exercise their right under the protection and privilege conferred by Article 30(1) \" to their hearts content\" unhampered by any restrictions excepting those which are in national interest based on considerations such as public safety, national security and national integrity or are aimed at preventing exploitation of students or teaching community. Such institutions cannot indulge in any activity which is violative of any law of the land. ", "They are free to admit all students of their own minority community if they so choose to do. (para 145, ) ", "(ii) Minority unaided educational institutions asking for affiliation or recognition Affiliation or recognition by the or the or the competent to do so, cannot be denied solely on the ground that the institution is a minority educational institution. However, the urge or need for affiliation or recognition brings in the concept of regulation by way of laying down conditions consistent with the requirement of ensuring merit, excellence of education and preventing mal-administration. For example, provisions can be made indicating the quality of the teachers by prescribing the minimum qualifications that they must possess and the courses of studies and curricula. The existence of infrastructure sufficient for its growth can be stipulated as a pre- requisite to the grant of recognition or affiliation. However, there cannot be interference in the day-to-day administration. The essential ingredients of the management, including admission of students, recruiting of staff and the quantum of fee to be charged, cannot be regulated. (para 55, ) Apart from the generalized position of law that right to administer does not include right to mal-administer, an additional source of power to regulate by enacting condition accompanying affiliation or recognition exists. Balance has to be struck between the two objectives: (i) that of ensuring the standard of excellence of the institution, and (ii) that of preserving the right of the minority to establish and administer its educational institution. Subject to reconciliation of the two objectives, any regulation accompanying affiliation or recognition must satisfy the triple tests: (i) the test of resonableness and rationality, (ii) the test that the regulation would be conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it, and (iii) that there is no in-road on the protection conferred by Article 30(1) of the Constitution, that is, by framing the regulation the essential character of the institution being a minority educational institution, is not taken away. (para 122, ) ", "(iii) Minority educational institutions receiving State aid Conditions which can normally be permitted to be imposed on the educational institutions receiving the grant must be related to the proper utilization of the grant and fulfillment of the objectives of the grant without diluting the minority status of the educational institution, as held in (See para 143 thereof). As aided institutions are not before us and we are not called upon to deal with their cases, we leave the discussion at that only. ", "So far as appropriation of quota by the and enforcement of its reservation policy is concerned, we do not see much of difference between non-minority and minority unaided educational institutions. We find great force in the submission made on behalf of the petitioners that the s have no power to insist on seat sharing in the unaided private professional educational institutions by fixing a quota of seats between the management and the . The cannot insist on private educational institutions which receive no aid from the to implement 's policy on reservation for granting admission on lesser percentage of marks, i.e. on any criterion except merit. ", "As per our understanding, neither in the judgment of nor in the decision in , which was approved by , there is anything which would allow the to regulate or control admissions in the unaided professional educational institutions so as to compel them to give up a share of the available seats to the candidates chosen by the , as if it was filling the seats available to be filled up at its discretion in such private institutions. This would amount to nationalization of seats which has been specifically disapproved in . Such imposition of quota of seats or enforcing reservation policy of the on available seats in unaided professional institutions are acts constituting serious encroachment on the right and autonomy of private professional educational institutions. Such appropriation of seats can also not be held to be a regulatory measure in the interest of minority within the meaning of Article 30(1) or a reasonable restriction within the meaning of Article 19(6) of the Constitution. Merely because the resources of the in providing professional education are limited, private educational institutions, which intend to provide better professional education, cannot be forced by the to make admissions available on the basis of reservation policy to less meritorious candidate. Unaided institutions, as they are not deriving any aid from funds, can have their own admissions if fair, transparent, non-exploitative and based on merit. ", "The observations in paragraph 68 of the majority opinion in , on which the learned counsel for the parties have been much at variance in their submissions, according to us, are not to be read disjointly from other parts of the main judgment. A few observations contained in certain paragraphs of the judgment in , if read in isolation, appear conflicting or inconsistent with each other. But if the observations made and the conclusions derived are read as a whole, the judgment nowhere lays down that unaided private educational institutions of minorities and non-minorities can be forced to submit to seat sharing and reservation policy of the . Reading relevant parts of the judgment on which learned counsel have made comments and counter comments and reading the whole judgment (in the light of previous judgments of this , which have been approved in ) in our considered opinion, observations in paragraph 68 merely permit unaided private institutions to maintain merit as the criterion of admission by voluntarily agreeing for seat sharing with the or adopting selection based on common entrance test of the . There are also observations saying that they may frame their own policy to give free-ships and scholarships to the needy and poor students or adopt a policy in line with the reservation policy of the state to cater to the educational needs of weaker and poorer sections of the society. ", "Nowhere in , either in the majority or in the minority opinion, have we found any justification for imposing seat sharing quota by the on unaided private professional educational institutions and reservation policy of the or quota seats or management seats. ", "We make it clear that the observations in in paragraph 68 and other paragraphs mentioning fixation of percentage of quota are to be read and understood as possible consensual arrangements which can be reached between unaided private professional institutions and the . ", "In , it has been very clearly held at several places that unaided professional institutions should be given greater autonomy in determination of admission procedure and fee structure. State regulation should be minimal and only with a view to maintain fairness and transparency in admission procedure and to check exploitation of the students by charging exorbitant money or capitation fees. ", "For the aforesaid reasons, we cannot approve of the scheme evolved in to the extent it allows to fix quota for seat sharing between management and the on the basis of local needs of each , in the unaided private educational institutions of both minority and non-minority categories. That part of the judgment in , in our considered opinion, does not lay down the correct law and runs counter to . ", " seats Here itself we are inclined to deal with the question as to seats allocated for Non-Resident Indians ('', for short) or seats. It is common knowledge that some of the institutions grant admissions to certain number of students under such quota by charging a higher amount of fee. In fact, the term '' in relation to admissions is a misnomer. By and large, we have noticed in cases after cases coming to this Court, neither the students who get admissions under this category nor their parents are s. In effect and reality, under this category, less meritorious students, but who can afford to bring more money, get admission. During the course of hearing, it was pointed out that a limited number of such seats should be made available as the money brought by such students admitted against quota enables the educational institutions to strengthen its level of education and also to enlarge its educational activities. It was also pointed out that people of Indian origin, who have migrated to other countries, have a desire to bring back their children to their own country as they not only get education but also get reunited with Indian cultural ethos by virtue of being here. They also wish the money which they would be spending elsewhere on education of their children should rather reach their own motherland. A limited reservation of such seats, not exceeding 15%, in our opinion, may be made available to s depending on the discretion of the management subject to two conditions. First, such seats should be utilized bona fide by the s only and for their children or wards. Secondly, within this quota, the merit should not be given a complete go-by. The amount of money, in whatever form collected from such s, should be utilized for benefiting students such as from economically weaker sections of the society, whom, on well defined criteria, the educational institution may admit on subsidized payment of their fee. To prevent misutilisation of such quota or any malpractice referable to quota seats, suitable legislation or regulation needs to be framed. So long as the does not do it, it will be for the Committees constituted pursuant to direction to regulate. ", "Our answer to the first question is that neither the policy of reservation can be enforced by the nor any quota or percentage of admissions can be carved out to be appropriated by the in a minority or non-minority unaided educational institution. Minority institutions are free to admit students of their own choice including students of non-minority community as also members of their own community from other s, both to a limited extent only and not in a manner and to such an extent that their minority educational institution status is lost. If they do so, they lose the protection of Article 30(1). Q.2. Admission procedure of unaided educational institutions. ", "So far as the minority unaided institutions are concerned to admit students being one of the components of \"right to establish and administer an institution\", the cannot interfere therewith. Upto the level of undergraduate education, the minority unaided educational institutions enjoy total freedom. ", "However, different considerations would apply for graduate and post-graduate level of education, as also for technical and professional educational institutions. Such education cannot be imparted by any institution unless recognized by or affiliated with any competent authority created by law, such as a , , or the like. Excellence in education and maintenance of high standards at this level are a must. To fulfill these objectives, the can and rather must, in national interest, step in. The education, knowledge and learning at this level possessed by individuals collectively constitutes national wealth. ", " has already held that the minority status of educational institutions is to be determined by treating the States as units. Students of that community residing in other States where they are not in minority, shall not be considered to be minority in that particular State and hence their admission would be at par with other non-minority students of that State. Such admissions will be only to a limited extent that is like a 'sprinkling' of such admissions, the term we have used earlier borrowing from Kerala Education Bill, 1957. In minority educational institutions, aided or unaided, admissions shall be at the State level. Transparency and merit shall have to be assured. ", "Whether minority or non-minority institutions, there may be more than one similarly situated institutions imparting education in any one discipline, in any State. The same aspirant seeking admission to take education in any one discipline of education shall have to purchase admission forms from several institutions and appear at several admission tests conducted at different places on same or different dates and there may be a clash of dates. If the same candidate is required to appear in several tests, he would be subjected to unnecessary and avoidable expenditure and inconvenience. There is nothing wrong in an entrance test being held for one group of institutions imparting same or similar education. Such institutions situated in one State or in more than one State may join together and hold a common entrance test or the State may itself or through an agency arrange for holding of such test. Out of such common merit list the successful candidates can be identified and chosen for being allotted to different institutions depending on the courses of study offered, the number of seats, the kind of minority to which the institution belongs and other relevant factors. Such an agency conducting Common Entrance Test (, for short) must be one enjoying utmost credibility and expertise in the matter. This would better ensure the fulfillment of twin objects of transparency and merit. is necessary in the interest of achieving the said objectives and also for saving the student community from harassment and exploitation. Holding of such common entrance test followed by centralized counseling or, in other words, single window system regulating admissions does not cause any dent in the right of minority unaided educational institutions to admit students of their choice. Such choice can be exercised from out of list of successful candidates prepared at the without altering the order of merit inter se of the students so chosen. ", " has held that minority unaided institutions can legitimately claim unfettered fundamental right to choose the students to be allowed admissions and the procedure therefor subject to its being fair, transparent and non- exploitative. The same principle applies to non-minority unaided institutions. There may be a single institution imparting a particular type of education which is not being imparted by any other institution and having its own admission procedure fulfilling the test of being fair, transparent and non-exploitative. All institutions imparting same or similar professional education can join together for holding a common entrance test satisfying the abovesaid triple tests. The can also provide a procedure of holding a common entrance test in the interest of securing fair and merit-based admissions and preventing mal- administration. The admission procedure so adopted by private institution or group of institutions, if it fails to satisfy all or any of the triple tests, indicated hereinabove, can be taken over by the substituting its own procedure. The second question is answered accordingly. ", "It needs to be specifically stated that having regard to the larger interest and welfare of the student community to promote merit, achieve excellence and curb mal-practices, it would be permissible to regulate admissions by providing a centralized and single window procedure. Such a procedure, to a large extent, can secure grant of merit based admissions on a transparent basis. Till regulations are framed, the admission committees can oversee admissions so as to ensure that merit is not the casualty. ", "Q. 3 Fee, regulation of To set up a reasonable fee structure is also a component of \"the right to establish and administer an institution\" within the meaning of Article 30(1) of the Constitution, as per the law declared in . Every institution is free to devise its own fee structure subject to the limitation that there can be no profiteering and no capitation fee can be charged directly or indirectly, or in any form (Paras 56 to 58 and 161 [Answer to Q.5(c)] of are relevant in this regard). ", "Capitation Fees Capitation fee cannot be permitted to be charged and no seat can be permitted to be appropriated by payment of capitation fee. 'Profession' has to be distinguished from 'business' or a mere 'occupation'. While in business, and to a certain extent in occupation, there is a profit motive, profession is primarily a service to society wherein earning is secondary or incidental. A student who gets a professional degree by payment of capitation fee, once qualified as a professional, is likely to aim more at earning rather than serving and that becomes a bane to the society. The charging of capitation fee by unaided minority and non-minority institutions for professional courses is just not permissible. Similarly, profiteering is also not permissible. Despite the legal position, this cannot shut its eyes to the hard realities of commercialization of education and evil practices being adopted by many institutions to earn large amounts for their private or selfish ends. If capitation fee and profiteering is to be checked, the method of admission has to be regulated so that the admissions are based on merit and transparency and the students are not exploited. It is permissible to regulate admission and fee structure for achieving the purpose just stated. ", "Our answer to Question-3 is that every institution is free to devise its own fee structure but the same can be regulated in the interest of preventing profiteering. No capitation fee can be charged. ", "Q.4. Committees formed pursuant to Most vehement attack was laid by all the learned counsel appearing for the petitioner-applicants on that part of which has directed the constitution of two committees dealing with admissions and fee structure. Attention of the Court was invited to paras 35,37, 38, 45 and 161 (answer to question ", "9) of wherein similar scheme framed in was specifically struck down. Vide para 45, Chief Justice has clearly ruled that the decision in insofar as it framed the scheme relating to the grant of admission and the fixing of the fee, was not correct and to that extent the said decision and the consequent directions given to , , , the and etc. are overruled. Vide para 161, upheld to the extent to which it holds the right to primary education as a fundamental right, but the scheme was overruled. However, the principle that there should not be capitation fee or profiteering was upheld. Leverage was allowed to educational institutions to generate reasonable surplus to meet cost of expansion and augmentation of facilities which would not amount to profiteering. It was submitted that has once again restored such Committees which were done away with by . ", "The learned senior counsel appearing for different private professional institutions, who have questioned the scheme of permanent Committees set up in the judgment of , very fairly do not dispute that even unaided minority institutions can be subjected to regulatory measures with a view to curb commercialization of education, profiteering in it and exploitation of students. Policing is permissible but not nationalization or total take over, submitted , the learned senior counsel. Regulatory measures to ensure fairness and transparency in admission procedures to be based on merit have not been opposed as objectionable though a mechanism other than formation of Committees in terms of was insisted on and pressed for. Similarly, it was urged that regulatory measures, to the extent permissible, may form part of conditions of recognition and affiliation by the university concerned and/or and for maintaining standards of excellence in professional education. Such measures have also not been questioned as violative of the educational rights of either minorities or non- minorities. ", "The two committees for monitoring admission procedure and determining fee structure in the judgment of , are in our view, permissive as regulatory measures aimed at protecting the interest of the student community as a whole as also the minorities themselves, in maintaining required standards of professional education on non- exploitative terms in their institutions. Legal provisions made by or the scheme evolved by the for monitoring admission procedure and fee fixation do not violate the right of minorities under Article 30(1) or the right of minorities and non-minorities under Article 19(1)(g). They are reasonable restrictions in the interest of minority institutions permissible under Article 30(1) and in the interest of general public under Article 19(6) of the Constitution. ", "The suggestion made on behalf of minorities and non- minorities that the same purpose for which have been set up can be achieved by post-audit or checks after the institutions have adopted their own admission procedure and fee structure, is unacceptable for the reasons shown by experience of the educational authorities of various States. Unless the admission procedure and fixation of fees is regulated and controlled at the initial stage, the evil of unfair practice of granting admission on available seats guided by the paying capacity of the candidates would be impossible to curb. ", "Non-minority unaided institutions can also be subjected to similar restrictions which are found reasonable and in the interest of student community. Professional education should be made accessible on the criterion of merit and on non-exploitative terms to all eligible students on an uniform basis. Minorities or non-minorities, in exercise of their educational rights in the field of professional education have an obligation and a duty to maintain requisite standards of professional education by giving admissions based on merit and making education equally accessible to eligible students through a fair and transparent admission procedure and on a reasonable fee-structure. ", "In our considered view, on the basis of judgment in and various previous judgments of this which have been taken into consideration in that case, the scheme evolved of setting up the two Committees for regulating admissions and determining fee structure by the judgment in cannot be faulted either on the ground of alleged infringement of Article 19(1)(g) in case of unaided professional educational institutions of both categories and Article 19(1)(g) read with Article 30 in case of unaided professional institutions of minorities. ", "A fortiori, we do not see any impediment to the constitution of the as a stopgap or adhoc arrangement made in exercise of the power conferred on this by Article 142 of the Constitution until a suitable legislation or regulation framed by the steps in. Such cannot be equated with which were supposed to be permanent in nature. ", "However, we would like to sound a note of caution to such . The learned counsel appearing for the petitioners have severely criticised the functioning of some of the so constituted. It was pointed out by citing concrete examples that some of the have indulged in assuming such powers and performing such functions as were never given or intended to be given to them by . Certain decisions of some of the were subjected to serious criticism by pointing out that the fee structure approved by them was abysmally low which has rendered the functioning of the institutions almost impossible or made the institutions run into losses. In some of the institutions, the teachers have left their job and migrated to other institutions as it was not possible for the management to retain talented and highly qualified teachers against the salary permitted by the . Retired Judges heading the are assisted by experts in accounts and management. They also have the benefit of hearing the contending parties. We expect the , so long as they remain functional, to be more sensitive and to act rationally and reasonably with due regard for realities. They should refrain from generalizing fee structures and, where needed, should go into accounts, schemes, plans and budgets of an individual institution for the purpose of finding out what would be an ideal and reasonable fee structure for that institution. ", "We make it clear that in case of any individual institution, if any of the is found to have exceeded its powers by unduly interfering in the administrative and financial matters of the unaided private professional institutions, the decision of the being quasi-judicial in nature, would always be subject to judicial review. ", "On Question-4, our conclusion, therefore, is that the judgment in , in so far as it evolves the scheme of two Committees, one each for admission and fee structure, does not go beyond the law laid down in and earlier decisions of this Court, which have been approved in that case. The challenge to setting up of two Committees in accordance with the decision in , therefore, fails. However, the observation by way clarification, contained in the later part of para 19 of which speaks of quota and fixation of percentage by is rendered redundant and must go in view of what has been already held by us in the earlier part of this judgment while dealing with Question No.1. ", "Epilogue We have answered the four questions formulated by us in the manner indicated hereinabove. All other issues which we leave untouched, may be dealt with by the regular Benches which will take up individual cases for decision. ", "We have placed on record in the earlier part of this judgment and, yet, before parting we would like to reiterate, that certain recitals, certain observations and certain findings in are contradictory inter se and such conflict can only be resolved by a Bench of a coram larger than . There are several questions which have remained unanswered and there are certain questions which have propped up post and . To the extent the area is left open, the hearing individual cases after this judgment would find the answers. Issues referable to those areas which are already covered by and yet open to question shall have to be answered by a Bench of a larger coram than . We leave those issues to be taken care of by posterity. ", "We are also conscious of the fact that admission process in several professional educational institutions has already commenced. Some admissions have been made or are in the process of being made in consonance with the schemes and procedures as approved by Committees and in some cases pursuant to interim directions made by this Court or by . This judgment shall not have the effect of disturbing the admissions already made or with regard to which the process has already commenced. The law, as laid down in this judgment, shall be given effect to from the academic year commencing next after the pronouncement of this judgment. ", "It is for the Government, or for , in the absence of a legislation, to come out with a detailed well thought out legislation on the subject. Such a legislation is long awaited. States must act towards this direction. Judicial wing of the State is called upon to act when the other two wings, the and the , do not act. Earlier and act, the better it would be. The Committees regulating admission procedure and fee structure shall continue to exist, but only as a temporary measure and an inevitable passing phase until the Government or are able to devise a suitable mechanism and appoint competent authority in consonance with the observations made hereinabove. Needless to say, any decision taken by such Committees and by the or , shall be open to judicial review in accordance with the settled parameters for the exercise of such jurisdiction. Before parting, we would like to place on record our appreciation of the valuable assistance rendered by all the learned senior counsel and other counsel appearing in the case and who have addressed us, highlighting very many aspects of the ticklish issues in the field of professional education which have propped up for decision in the light of the decision in and decision in . But for their assistance, the issues would have defied resolution. ", "All the petitions, Civil Appeals and IAs shall now be listed before appropriate Benches for hearing."], "relevant_candidates": ["0000512761", "0000703393", "0001045974", "0001491022", "0001775396", "0001892430", "0001978528", "0013862901"]} {"id": "0001396529", "text": ["PETITIONER: THE COMMISSIONER OF INCOME-TAX, BOMBAY Vs. RESPONDENT: . DATE OF JUDGMENT: 05/04/1961 BENCH: , T.L. VENKATARAMA BENCH: , T.L. VENKATARAMA DAS, S.K. KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C. CITATION: 1961 AIR 1633 1962 SCR (1) 788 CITATOR INFO : RF 1963 (121) R 1963 SC1484 (9) R 1965 SC1636 (18) R 1966 SC1385 (11) R 1966 SC1466 (7) F 1967 SC 509 (6) F 1967 SC 657 (6) F 1967 SC1554 (7) R 1967 SC1626 (10) F 1968 SC 139 (4) E 1968 SC 779 (9) F 1969 SC 917 (16) F 1969 SC1068 (6) R 1970 SC2067 (11) R 1977 SC1259 (13) R 1980 SC 769 (8) RF 1986 SC 421 (24) F 1988 SC1305 (6) R 1990 SC1451 (11) ACT: Income-tax-Reference-Scope-\"Any question of law arising out of such order\", Meaning of Indian Income Tax Act, 1922 (11 1922), as amended by Income-tax (Amendment) Act , 1946 (VIII of 1946),ss. 66, 10(2)(vii) proviso. HEADNOTE: By s. 66 (1) of the Indian Income-tax Act , 1922 \"the assessee or the Commissioner may, by application in the prescribed form ...... require to refer to any question of law arising out of such order and shall ... draw up a statement of the case and refer it to 789 .\" The respondents, who received compensation from the as owners of a requisitioned steamship lost in enemy action, were assessed to tax under the fourth proviso to S. 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 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 or dealt with by it. The question that was referred to 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 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 but 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 in answering a reference under s. 66 could decide a question not raised or argued before the . Held (per , , and , jj.), that the jurisdiction of under s. 66 of the Indian Income-tax Act is purely advisory and therefore different from its ordinary jurisdiction as . It is of the essence of such a jurisdiction that can decide only such questions as are referred to it and that implies that the questions must necessarily be those that the had occasion to consider. The words \"any question of law arising out of such order\" in s. 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 but only such questions as were raised before, or decided by the . The Indian Income-tax Act , I 922, is not in Pari materia with the British Statute and in view of the difference between s. 66(i) and the corresponding provisions of the British Statute no useful purpose can be served by referring to English decisions for interpreting s. 66 of the Indian Act. ., (1932) L.R. 59 I.A. 2o6, referred to. Attorney-General v. & Co., 1 K.B. 86, considered. 790 The power 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 under s. 66(i) of the Act. . Ar. S. Ar. Arunachalam Chettiar, (1953] S.C.R. 463, New jehangir , 1 S.C.R. 249, , S.C.R. 4I7 and , 1 S.C.R. 210, referred to. , 16 I.T.R. 227, disapproved. Case-law reviewed. The jurisdiction of in deciding a reference under s. 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 has jurisdiction in a reference to decide questions of law arising out of the order of the , that is question of law raised and decided by the , or question of law raised before the but not decided by it or question of law decided by , though not raised before it, but not questions not raised or decided by the even though it may arise from its findings. A question of law may have more than one aspect and s. 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 must have been in issue before the . It does not further require that the reference should be limited to those aspects of the question which had been argued before the . . I S.C.R. 185 and , 1 S.C.R. 210, approved. In the instant case, the question referred to was wide enough to cover the contention raised by the respondent and was right in holding that the fourth proviso to S. 10(2)(Vii) Of the Act, not being retrospective in operation, bad no application. Per , J.- Section 66 of the does not contemplate that the question which tire may refer, or which may call upon the to refer, must be one that is raised and argued before the at the hearing under s. 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 or dealt with by it, would be not only to impose fetters upon the jurisdiction of the High 791 which were plainly not intended by the statute and in certain cases might involve gross injustice to the parties. , 16 I.T.R. 227, approved. Under s. 66(5) Of the Act, the court has to record its opinion on the questions arising out of the order of the and not on the arguments advanced before it. In the instant case , on the question arising out of the order of the and referred to it, had jurisdiction to decide that the proviso which made the amount taxable was not in operation at the material date. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 501 of 1957. Appeal by special leave from the judgment and order dated September 13, 1954, of in Income-tax Reference No. 13 of 1954. ", " and , for the appellant. and , for the respondent. 1961. April 6. The Judgment of , , and JJ. was delivered by , , 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 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 s. 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, had directed that for the purpose of Rule 4, Schedule II, of the Excess Profits Tax Act, 1940, the amount payable as 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, observed in its Order dated July 15, 1953, that the concession which 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 held that the amount was liable to be included in the total income of the company. ", "The respondent then filed an application before the , under s. 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 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 consisting of Chagla, C.J., and , J., and then the respondents raised the contention that the proviso to s. 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 , 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 , 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 in the present reference to go into the question as to the applicability of the proviso to s. 10(2)(vii) , as it was neither raised before the nor considered by it, and could not therefore be said to be a question arising out of the order of the , which alone could be referred for the decision of the court under s. 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 in its order can properly be said to arise out of its order, and that in making a reference under s. 66(l) , the 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 s. 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 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 in the prescribed form to refer any question of law arising out of its order for the decision of . If the 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 . But if it considers that no question of law arises on its order, and dismisses the application under s. 66(l) , then the assessee or the Commissioner, as the case may be, has a right to move the court under s. 66(2) , and if the court is not satisfied about the correctness of the decision of the , it can require it to state the case and refer it to its decision. Under s. 66(4) can, for the purpose of disposing of the reference which comes to it under s. 66(l) and (2), call for additional statement from the . Under s. 66(5) is to decide the question of law raised in the case and send a copy of its judgment to the and the latter is to pass appropriate orders for giving effect to it. Section 59 of the Act confers on power to make rules for carrying out the purpose of the Act and under sub-section (5), the rules 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 to refer to 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 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 .\" ", "On these provisions, the question that arises for decision is whether in a reference under s. 66 , can consider a question which had not been raised before the 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 s and that turns on the meaning to be given to the words, \"any question of law arising out of\" the order of the . There is no pronouncement of this which concludes this ques- tion, though there are decisions which afford guidance in the determination thereof. These decisions will now be considered. ", " (1), an order of assessment made by the income-tax officer was corrected by not in an appeal under s. 33(4) but in a miscellaneous application presented to it under (1) (1953] S.C.R. 463 471. ", "797 ", "s. 35. The Commissioner being dissatisfied with the order applied for a reference under s. 66(l) . The -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 s. 66(l) . declined to answer it on the ground that as the order was not one passed in an appeal, the reference under s. 66(l) was incompetent, as under that provision the power of the 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 and of is conditional on there being an order by the Appellate 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 to make, and of to hear, a reference must be strictly sought within the four corners of s. 66. ", " . , Glass Works Ltd. (1), the question referred by the under s. 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 s. 4(l)(a) of the Act. 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 or decided by it and that therefore it did not arise out of its order as required by s. 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).. 1 S.C.R. 185, 197. ", "798 ", "been properly referred under s. 66(l) , it could be decided under s. 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 '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. ", " - tax (1) the point under discussion wag whether the High Court was competent under s. 66(4) to call for additional statement with reference to a question which had not been referred to it under s. 66(l) or s. 66(2) . This Court held that the scope of a reference under s. 66(2) was coextensive with that of one under s. 66(l) of the Act, that therefore the court had no power under s. 66(2) to travel beyond the ambit of s. 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 s. 66(4) was to enable the court to obtain additional statements only for the purpose of deciding questions referred under s. 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 s. 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 . ", " (2), the question actually referred 'under s. 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 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) 1 S.C.R. 249. ", "(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 was in error in not deciding the question which was actually referred. This Court accepted this contention and remanded the case to 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 or referred under s. 66(l) . In agreeing with this contention, this Court observed:- ", "\" Section 66 of the Income-tax Act which confers jurisdiction upon only permits a reference of a question of law arising out of the order of the . It does not confer jurisdiction on 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 may amplify the question to take in all the approaches. But the question must still be one which was before the 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 to decide the question that was referred to it. ", " (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 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. remanded the case to the Tribunal under s. 66(4) for a supplemental statement observing that (1) 1 S.C. It. 210. ", "800 ", "\"it would be necessary for 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 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 (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 , and (b) to the question which would arise from the '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 on the precise meaning of the words \"any question of law arising out of\" the order of the , we must examine the decision of the High s on the question, and as already stated they are in a state of conflict. ", " (2), the application of the assessee under s. 66(l) required the to refer a question of res judicata to the court. The declined to do so on the ground that question had not been argued before it. The assessee then moved the court under s. 66(2) for an order requiring the to refer that question. Dismissing that application, , J., as be then was, observed as follows:- ", "\" Mr. for the petitioner contends that a question, though not raised before , 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) [1960] 1 S.C.R. 249. ", "(2) [1947] 15 I.T.R. 442,444. ", "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 only if such order discloses that the question was raised before the .\" ", "Adverting to the contention that had in v. (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 s. 66 of the Indian Income-tax Act has to be determined with reference to the language of the statute\". This decision was followed by in ., (2) and in The Trustees, Nagore Durgah v. Commissioner of Incometax (3). (4), followed the decision in (5) and observed that a question not raised before the \"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 \", and that further the order of the should disclose that the point of law was raised before it. The same view was adopted by in -(ax (6). There, discussing the question with reference to the language of s. 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 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 to decide any specific question of law which (1) I.L.R. 10 Rang. 242. ", "(3) [1954] 26 I.T.R. 805. ", "(5) [1947] 15 I.T.R. 442, 444. ", "(2) [1951] 20 I.T.R. 588. ", "(4) [1958] 34 I.T.R. 576. ", "(6) [1954] 26 I.T.R. 79, 86. ", "802 ", "has been raised between the assessee and the before 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 or actually dealt with by it could be referred under s. 66(1) . This is also the view consistently held by , . (1), it was held, agreeing with the decision in (2), that a question of law not raised before the 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. ,-tax (3), the assessee had applied under s. 66(1) of the Act to refer the question whether a sum of Rs. 2,20,887 was on a true construction of s. 14(2)(c) of the Act assessable to tax. The 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 and was therefore not one which arose out of its order. The question having been brought up before the court under s. 66(2) , , J. held that under s. 66(1) it was only a question that arose out of the 's order that could be referred, and that that must be some question which was actually raised before the and dealt with by it; and that under s. 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 could not require the 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 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) [1951] 20 I.T R. 39. ", "(2) [1947] 15 I.T.R. 443,444. ", "(3) [1951] 20 I.T. R. 484, 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 on the other regarding some specific question or questions of law. If, on an application under section 66(2) , finds that the question which the applicant required the to refer was not a question that arose out of the 's appellate order, it ought, in my view, to refuse to require the to refer any such question.\" ", "The same view was taken in (1) and in (2). ", " (3), a Full Bench of had to consider the true character of the jurisdiction under s. 66 . Therein Kapur, J., as he then was, held, on an examination of the section and on a review of the authorities that under s. 66(1) it is only questions which had been raised before and dealt with by the that could be referred to , that the power of under s. 66(2) to direct a reference is limited to questions which could be referred under s. 66(1) and which the applicant required it to refer, that the has no power to raise a question suo motu, and likewise cannot raise any question which had not been referred to it either under s. 66(1) or s. 66(2) , but when once a question is properly raised and referred to , is bound to answer that question. In this view, it was held that a reference to on a question which was not raised before or considered by the was not compe- tent. , 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 had not been dealt with by it owing to mistake or (1) 21 I.T.R. 169. (2) 31 I.T.R 545. (3) 30 I.T.B. 388. ", "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 s. 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 . ", "We must now consider the decisions which have taken a somewhat different view. (1) was a case under s. 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 (2), the question that was referred under s. 66(1) was whether taxes paid on urban immovable property by the assessee were an allowable deduction under s. 9(1)(iv) and s. 9(1)(v) of the Indian Income-tax Act. An objection was raised before the court that the question as to the application of s. 9(1)(iv) had not been argued before the and therefore it could not be referred. Repelling this contention, , 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 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 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 (1) 3 I.T.R. 152. ", "(2) [1947] 15 I.T.R. 319. ", "805 ", "that-could be referred under s. 66(1) , and that is clear from the observations of the learned Judge that the decisions of in (1) and (2), deprecating the practice of raising new questions in the, stage of argument on the reference in did not stand in the way of the case being referred back to the . ", " (3), the referred under s. 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 , but the itself referred it because it considered that it arose out of its order. The reference was heard by , C. J. and , J. Before them an objection was raised that the could not refer this question under s. 66(1) as the same had not been raised before it. , C. J., observed: ", "\"In my opinion it is necessary clearly to re- state the jurisdiction of this court. This is not . This court merely exercises an advisory jurisdiction. Its judgments are in the nature of advice given on the questions submitted to it by the . ", "Its advice must be confined to questions referred by the to this court and those questions must be questions of law which must arise out of the order made by the . 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 if such a question was apparent on the order itself or it could be raised on the facts found by the (1) [1933] 1 I.T. R. 94. (2) [1936] 4 I.T.R. 44- (3) [1948] 16 I.T.R. 227, 233, 234. ", "806 ", " 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 or are dealt with by the . 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 . If the 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 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 .\" ", "Expressing next his disagreement with the decision of in (1), the learned Judge observed: ", "\"The decision of would also result in this extraordinary situation. An assessee may raise a question and argue it before the , but if the 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 to refer that question of law to . 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.\" ", " (2) a Bench of , hearing a reference under s. 66(1) , held that on the statement of the case by the , the question of law as framed was not correct. Then observing that in view (1) 15 I.T.R. 442. ", "(2) [1952] 22 I.T.R. 448, 452-453. ", " ", "of the decision of in (1), it could not itself resettle it, called for a fresh statement from the under s. 66(4) . Thus far the judgment is on the same lines as - tax (2) and an earlier decision of in (3). When the case came back on the further statement under s. 66(4) , criticising certain remarks therein, that the court had no power to direct the to refer a question not argued before it, the Court observed that they were made under a misconception, and quoted the observations of , in (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 s are agreed that s. 66 creates a special jurisdiction, that the power of the to make a reference and the right of the litigant to require it, must be sought within the four corners of s. 66(1) , that the jurisdiction of to hear references is limited to questions which are properly referred to it under s. 66(1) , and that such jurisdiction is purely advisory and extends only to deciding questions referred to it. The narrow ground over which s differ is as regards the question whether it is competent to the to refer, or to decide, a question of law which was not either raised before the 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 signify that the question must have been raised before the 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 . The 1latter is the view (1) 1 I.T.R. 94 (3) 16 I.T.R. 433. ", "(2) [1947] 15 I.T. R 319. ", "(4) [1948] 16 I.T.R. 227, 233. 234. ", " ", "taken by in (1), and approved by in (2). The former is the view held by all the other . Now the argument in support of the latter view is that on the plain grammatical construction of s. 66(1) , any question of law that could be raised on the findings of fact given by the , 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 and decided by it, would be to read into the section words which are not there. ", "In support of this contention , 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 , L. J., in Attorney-General v. & 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 s. 66(1) of the Act, the has to refer not only questions of law arising out of its order, but also a statement of the case, that under s. 66(2) the court can likewise require the to state the case and refer it and that under s. 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 . (1) 16 I.T.R. 227. (2) 22 I.T.R. 448. (3) 1 K.B. 86. ", "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 s. 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. . Ar. S. Ar. Arunachalam Chettiar (1), this Court has decided that the requirements of s. 66(1) are matters affecting the jurisdiction to make a reference under that section. The attempt of the respondents to equate the position under s. 66(1) of the Act with that under the British statute on the ground that the 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 s. 66(1) that calls for decision under s. 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 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 . (2). In view of the difference between s. 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 s. 66 . But the main contention still remains that the language of s. 66(1) is wide enough to admit of questions of law which arise on the facts found by the and that there is no justification for cutting (1) S.C.R. 463, 471. ", "(2) (1932) L.R. 59 I. A. 206.102 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 s. 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 s. 66 is a special one, different from its ordinary jurisdiction as a civil court. , hearing a reference under that section, does not exercise any appellate or revisional or supervisory jurisdiction over the . It acts purely in an advisory capacity, on a reference which properly comes before it under s. 66(1) and (2). It gives the s 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 (2); (2) and (3). If the true scope of the jurisdiction of is to give advice when it is sought by the , it stands to reason that the 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 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 to refer a question of law under s. 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) 1 S.C.R. 249. (2) 3 S.C.R. 417. (3) 1 S.C.R. 210. ", " ", "confers on the court a power to direct a reference only where the was under a duty to refer under s. 66(1) , and it is, therefore, subject to the same limitations as s. 66(1) . That has been held by this court in (1) and in (2). Moreover, the power of the court to issue direction to the under s. 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 s. 66(2) is subject to two limitations the question must be one which the was bound to refer under s. 66(1) and the applicant must have required the to refer it. R(T) is the form prescribed under Rule 22A for an application under s. 66(1) , and that shows that the applicant must set out the questions which he desires the to refer and that further, those questions must arise out of the order of the . It is, therefore, clear that under s. 66(2) , the court cannot direct the to refer a question unless it is one which arises out of the order of the and was specified by the applicant in his application under s. 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 s. 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 s. 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 s. 66(1) , as it now stands, there is no power in the to refer a question of law suo motu for the decision of the court. If, as contended (1) 1 S.C.R. 249. ", "(2) [1961] 1 S.C.R. 210. ", "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 , its jurisdiction under s. 66(5) must be held to be wider than under s. 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 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 to refer and one which the is not competent to refer to the court, cannot be entertained by the court under s. 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 . ", "One of the reasons given by , C. J., in (1) for differing from the decision in (2) that it is only a question which was raised before the 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 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 must be deemed to have decided the question against the appellant, as , J. was disposed to do in (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 , J. held in (4) that, in the circumstances stated above, the court could call upon (1) 16 I.T.R. 227, 233, 234. ", "(3) [1956] 30 I.T.R. 388. ", "(2) [1947] 15 I.T.R. 442. ", "(4) [1947] 15 I.T.R. 319. ", " ", "the to state a supplemental case after giving its own decision on the contention. That was also the procedure adopted in - tax(1). Such cases must be exceptional and cannot be founded on for putting a construction different from what the language of s. 66(1) would otherwise warrant. There was also some argument as to the position under s. 66(1) when the 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 s. 66(1) . ", "The result of the above discussion may thus be summed up: (1) When a question is raised before the 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 but the 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 but the 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 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 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 was one which arose out of the order of the , 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) [1952] 22 I.T.R. 448. ", " ", "account 1945-46. That having been decided against the respondents, the referred on their application under s. 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 . 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 s. 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 . 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 s. 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 . 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 . 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 s. 66(1) of the Act. That was the view taken by this Court in . (1) and in (2), and we agree with it. As the question on which the parties were at issue, which was referred (1) 1 S.C.R. 185. ", "(2) [1961] 1 S.C.R. 210. ", "815 ", "to the court under s. 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 was one which was within the scope of the question, and 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 s. 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 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 . 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 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 shows that the 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 , 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 s. 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 at Bombay under s. 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 for loss in 1944 by enemy action of their ship \"El Madina.\" The assessees maintained before the taxing authorities and the 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 s. 10 , sub-s. (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 s. 10 , sub-s. (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 s. 10 , sub-s. (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 s. 10 , sub-s. (2), el. (7), proviso IV because the amount sought to be taxed was received before the year of account relevant for the assessment year 1946-47. The tribunal held, negativing the contention, that it was taxable under s. 10 , sub-s. (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 . under s. 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, 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 arid 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 under s. 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 under s. 66 , and the nature of the jurisdiction which exercises. ", " ", "\"(1) Within sixty days of the date upon which he is served with notice of an order under sub-s. (4) of s. 33 the assessee or the Commissioner may, by application in the prescribed form require to refer to any question of law arising out of such order and shall draw up a statement of the case and refer it to : ", "Provided......... ", "(2) If on any application being made under sub-s. (1) 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 , and may, if it is not satisfied of the correctness of the decision of , require to state a case and to refer it,, and on receipt of any such requisition shall state the ease and refer it accordingly. (3).............. ", "(4) If 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 to make such additions thereto or alterations therein as the court may direct in that behalf. ", "(5) 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 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. indisputably exercises a special advisory 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 s. 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 to call upon the tribunal to state a case and 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 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 s. 33 , el. (4)) but on the application under s. 66(1) is erroneous. If the tribunal is not called upon to refer a question, 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 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 s. 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 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 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, 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, 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 is by statute not expressly circumscribed to recording its opinion on arguments advanced before the tribunal, and the nature of the jurisdiction exercised by 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 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' -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 within the meaning of s. 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 (1) and (2). This view has been adopted with some variations in the norms of expression in the following cases: - tax (3), (4) and Commissioner of Income-tax, Punjab (5). ", "On the other hand is the view expressed by , C. J. in (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 if such a question was apparent on the order itself or it could be raised on the facts found by the and which were stated in the order. I see no reason to confine the jurisdiction of this to such questions of law as have been argued before the or are dealt with by the . 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) [1947] 15 I.T.R. 442. ", "(3) [1954] 26 I.T.R. 79. ", "(5) [1952] 22 I.T.R, 232. ", "(2) [1951] 20 I.T.R. 39. ", "(4) [1958] 34 I.T.R. 576. ", "(6) [1948] 16 I.T.R. 227. ", "823 ", "ordinary grammatical construction of that expression.\" For the reasons already set out, in my view, the interpretation placed by , C. J. on the expression \"arising out of such order\" is the correct one. ", "Appeal dismissed."], "relevant_candidates": ["0000032100", "0000086313", "0000127231", "0000322427", "0000324332", "0000397076", "0000641256", "0000740721", "0000783120", "0000818283", "0000868062", "0000911300", "0000942480", "0001072049", "0001203520", "0001285772", "0001333873", "0001500215", "0001870253", "0001886356", "0001916297", "0001954329", "0001956089"]} {"id": "0001418391", "text": ["PETITIONER: & . Vs. RESPONDENT: UNION OF INDIA & ORS. DATE OF JUDGMENT30/10/1987 BENCH: , : , , (CJ) MISRA RANGNATH CITATION: 1988 AIR 191 1988 SCR (1) 700 1987 SCC Supl. 350 JT 1987 (4) 421 1987 SCALE (2)903 ACT: Levy of excise duty on yarn obtained at an intermediate stage in the process of manufacture of fabrics-Amended rules 9 and 49 of the Rules, 1944 1nterpretation thereof. HEADNOTE: % The appellant No. 1, , has a composite mill wherein it manufactures fabrics of different types, for which yarn is obtained at an intermediate stage, and the yarn is processed in an integrated process in the said composite mill for weaving the same into fabrics. issued a Circular dated September 24, 1980, purporting to interpret the rules 9 and 49 of the Rules, 1944 (the Rules) and directing the subordinate excise authorities to levy and collect excise duty in accordance therewith. The Board further directed vide the said Circular that the use of the goods in the manufacture of another commodity even within the place premises specified in this behalf by the officers in terms of the powers conferred under rule 9 of the Rules, would attract duty. As the implementation of the Circular worked to the prejudice of the appellants, they filed a writ petition in , challenging the validity of the Circular. During the pendency of the said writ petition, issued a Notification dated February 20, 1982, amending the rules 9 and 49 of the Rules, with section 51 of the Finance Act, 1982, providing that the amendments in the rules 9 and 49 shall be deemed to have, and to have always had, the effect with retrospective effect from the date on which the Rules came into force i.e. February 28, 1944. Upon the amendments of the rules 9 and 49, with retrospective effect of the amendments, the appellants amended their writ petition above-said to challenge the constitutional validity of Section 51 of the Finance Act abovementioned and the amendments to the rules 9 and 49. 701 allowed the writ petition in part. It held (i) that section 51 and the rules 9 and 49 as amended were valid, (ii) the retrospective effect allowed by section 51 would be subject to the provisions of sections 11A and 11B of the s and Salt Act , 1944 (the Act), (iii) the yarn produced at an intermediate stage in the mill of the appellants and subjected to the integrated process of weaving into fabrics, would be liable to payment of excise duty in view of the amended provisions of the rules 9 and 49, but the sized yarn actually put into the integrated process would not again attract excise duty. The appellants then filed this appeal (Civil Appeal No. 297 of 1983) before this by certificate. Dismissing the Appeal, the , ^ HELD: The decisions of various High s cited, deal with the rules 9 and 49 of the Rules, 1944, as they stood before they were amended by the Government Notification dated February 20, 1982. In this case, what is involved is the interpretation of the said two rules after their amendment and the constitutional validity of the rules as amended. The amendments to the rules 9 and 49 are quite legal and valid. Section 51 of the Finance Act, 1982, giving retrospective effect to the said amendments is also legal and valid. The apprehension of the appellants that the amendments to rules 9 and 49 having been made retrospective from the date the rules were framed, that is, February 28, 1944, the appellants may be called upon to pay enormous amounts of duty in respect of the intermediate goods which have come into existence and again consumed in the integrated process of manufacture of another commodity, is not right. In view of section 11A of the Finance Act, there is no cause for such an apprehension. Under Section 11A(1) , the excise authorities cannot recover duties not levied or not paid or short-levied or short-paid or erroneously refunded beyond the period of six months, the proviso to section 11A not being applicable in the present case. Thus though section 51 has given retrospective effect to the amendments of rules 9 and 49, it must be subject to the provision of section 11A of the Act. Section 51 does not contain any non-obstante clause, nor does it refer to the provision of section 11A , and it is difficult to hold that section 51 overrides the provision of section 11A . [712F-H; 714D-F] The appellants are liable to pay excise duty on the yarn obtained at an intermediate stage and, thereafter, further processed in an integrated process for weaving the same into fabrics. Although it has been alleged that the yarn is obtained at an intermediate stage of an 702 integrated process of manufacture of fabrics, it appears to be not so. After the yarn is produced, it is sized, and thereafter, subjected to a process of weaving the same into fabrics. As the has held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty. [720G- H: 721A-B] has rightly held that the appellants are not liable to pay excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics. No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. The judgment of affirmed. [721B-C] In view of the decision of the in the Civil Appeal No. 297 of 1983, the Civil Appeals Nos. 2658 and 4168 of 1983 also dismissed. [721D] -AIR 1942 F.C. 33; Caltex oil . E.L.T. 581, , E.L.T. 121; , E.L.T. 320; , E.L.T. 675, , E.L.T. 33; , E.L.T. 327, , E.L.T. 927, , E.L.T. 618; ; Assistant Collector & Ors. In Misc. 491 of 1964, unreported judgment of Bombay High , dated April 30, 1970, ., 1 S.C.R. 890; , 1 S.C.R. 897, officer, Ernakulam, 1 S.C.R. 629 and , 3 S.C.R. 146, referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 297 of 1983. Etc. ", "From the Judgment and order dated 11 1.1983 of in C.W No 1858 of 1981 , , . ", "703 ", " and Appellant-in-person (in C.A. No. 2658 of 1983) for the Appellants , Attorney General, , and for the Respondents The Judgment of the Court was delivered by , J. This appeal is directed against the judgment of allowing in part only the petition of the appellants under Article 226 of the Constitution of India The appellant No. 1, , has a composite mill wherein it manufactures fabrics of different types. In order to manufacture the said fabrics, yarn is obtained at an intermediate stage. The yarn so obtained is further processed in an integrated process in the said composite mill of the appellant No. 1 for weaving the same into fabrics. The appellants do not dispute that the different kinds of fabrics which are manufactured in the mill are liable to payment of excise duty on their removal from the factory. They also do not dispute their liability in respect of yarn which is also removed from the factory. It is the contention of the appellants that no duty of excise can be levied and collected in respect of yarn which is obtained at an intermediate stage and, thereafter, subjected to an integrated process for the manufacture of different fabrics. Indeed, on a writ petition of the appellants, by its judgment dated October 16, 1980 held that yarn obtained and further processed within the factory for the manufacture of fabrics could not be subjected to duty of excise. It is the case of the appellants that in spite of the said decision of , has wrongly issued a circular dated September 24, 1980 purporting to interpret rules 9 and 49 of the Rules, 1944 (hereinafter referred to as 'the Rules') and directing the subordinate excise authorities to levy and collect duty of excise in accordance therewith. In the said circular, the Board has directed the subordinate excise authorities that \"use of goods in manufacture of another commodity even within the place/premises that have been specified in this behalf by the officers in terms of the powers conferred under rule 9 of the Rules, will attract duty\". As the said circular was being implemented to the prejudice of the appellants, they filed a writ petition before , inter alia, challenging the validity of the circular. ", "During the pendency of the writ petition in , by a Notification No . 20/82- C. dated 20.2.1982 amended rules 9 and 49 of the Rules. Section 51 of the Finance Act, 1982 provides that the amendments in rules 9 and 49 of the Rules shall be deemed to have, and to have always had the effect on and from the date on which the Rules came into force i.e. February 28, 1944. After the said amendments of the Rules with retrospective effect, the appellants amended the writ petition and challenged the constitutional validity of section 5 1 of the Finance Act, 1982 and of the amendments to rules 9 and 49 of the Rules. ", " came to the conclusion that section S I and rules 9 and 49 of the Rules, as amended, were valid. It has, however, been held that the retrospective effect given by section S I will be subject to the provisions of sections 11A and 11B of the Central Excises and Salt Act , 1944 (hereinafter referred to as 'the Act') Further, it has been held that the yarn which is produced at an intermediate stage in the mill of the appellants and subjected to the integrated process of weaving the same into fabrics, will be liable to payment of excise duty in view of the amended provisions of rules 9 and 49 of the Rules. But the sized yarn which is actually put into the integrated process will not again be subjected to payment of excise duty for, the unsized yarn, which is sized for the purpose, does not change the nature of the commodity as yarn. The writ petition was, accordingly, allowed in part. Hence this appeal by the appellants upon a certificate granted by . F At this stage, we may refer to rules 9 and 49 before and after amendment of the same. The relevant portion of rule 9 before the same was amended is as follows:- ", "\"Rule 9. Time and manner of payment of duty.-(1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf whether for consumption, export, or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require, and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form: \" [The remaining provisions of rule 9 which are not relevant for our purpose are omitted. ] By a Notification No. 20/82 C.B. dated 20.2.1982 of , rule 9 was amended by the addition of the following A Explanation thereto:- ", "\"Explanation.-For the purposes of this rule excisable goods produced, cured or manufactured in any place and consumed or utilised- ", "(i) as such or after subjection to any process or processes; or ", "(ii) for the manufacture of any other commodity, whether in a continuous process or otherwise, in such place or any premises appurtenant thereto, specified by the Collector under sub-rule (1), shall be deemed to have been removed from such place or premises immediately before such consumption or utilisation.\" ", "Rule 49 before its amendment was as follows:- ", "\"Rule 49. Duty chargeable only on removal of goods from the factory premises or from an approved place of storage.-(1) Payment of duty shall not be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under rule 9 or are about to be removed from a store-room or other place of storage approved by the Collector under rule 47:\" [The remaining provisions of rule 49 which are not relevant for our purpose are omitted . ] By the said Notification rule 49 was amended by the addition of an Explanation thereto as follows:- ", "\"Explanation.-For the purposes of this rule, excisable goods made in a factory and consumed or utilised- ", "(i) as such or after subjection to any process or processes; or ", "(ii) for the manufacture of any other commodity, whether in a continuous process or otherwise, in such factory or place or premises specified under rule 9 or store- ", "706 ", "room or other place of storage approved by the Collector under rule 47, shall be deemed to have been issued out of, or removed from such factory, place, premises, store-room or other place of storage, as the case may be, immediately before such consumption or utilisation.\" ", "It has been already noticed that by section 5 1 of the Finance Act, 1982, amendments made to rules 9 and 49 have been given retrospective effect from the date on which the Rules came into force, that is to say, from February 28, It is not disputed before us that under section 3(1) of the Act, the taxing event is the production or manufacture of the goods in question. Indeed, section 3 provides that there shall be levied and collected in such manner as may be prescribed, duties of excise on all excisable goods other than salt which are produced or manufactured in India and at the rates set forth in the First Schedule. It is, therefore, clear that as soon as the goods in question are produced or manufactured, they will be liable to payment of excise duty. ", "While section 3 lays down the taxable event, rules 9 and 49 provide for the collection of duty. There is a distinction between levy and collection of duty. , A.I.R. 1942 FC 33 it has been observed by as follows:- ", "\"There is in theory nothing to prevent from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, destroyed or given away. A taxing authority will not ordinarily impose such a duty, because it is much more convenient administratively to collect the duty (as in the case of most of the Excise Act s) when the commodity leaves the factory for the first time, and also because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, for example, been destroyed in the factory itself. It is the fact of manufacture which attracts the duty, even though it may be collected later.\" ", "Relying upon the aforesaid observation of , it has been urged by Mr. , learned Counsel appearing on behalf of the appellants, that although it is true that as soon as the commodity is manufactured or produced it is liable to the payment of excise duty, the duty will not, however, be collected unless the commodity leaves the factory. It is submitted by him that the commodity must be removed from one place to another either for the purpose of consumption in the factory or for sale outside it before excise duty an be claimed. Counsel submits that rules 9 and 49, as they stood before they were amended, and even the main part of these two rules after amendment, indicate in clear terms that so long as the goods which are manufactured in the factory are not removed, there is no question of payment of excise duty on the goods. ", "Several decisions have been cited on behalf of the appellants to show that also have taken the view that removal is the main criterion for the collection of excise duty on the commodity produced or manufactured inside the factory or the place of manufacture. We shall presently refer to these decisions. It may, however, be noticed that the decisions are not also uniform on the interpretation of rules 9 and 49, as they stood before amendment. We are, however, really concerned with the interpretation of these two rules after amendment, but as much submissions have been made by the parties in the light of the decisions of on the interpretation of these two rules, we would like to refer to the same. ", "In oil , E.L.T. 581 it has been held by that there can be removal only if the product goes out of one stream of production into another stream of production or if the product is issued out of or taken out or consumed if no further processing of that product is to be done. Further, it has been observed that there can be no removal of a product within the plant itself so long as the product is in the process of manufacture. According to this decision, if the product, which is obtained at an intermediate stage of an integrated and uninterrupted process of manufacture, there is no removal of such product. But, if the intermediary product is transferred from one plant to another for the manufacture of another commodity, there will be removal for the purpose of collection of duty. ", "In an earlier decision in , E.L.T. 121 had taken a different view. In that case calcium carbide manufactured in the factory in one plant was used to generate acetylene gas by the transfer of the article from one plant to another in the same factory. The question that came up for consideration of was whether there was removal of calcium carbide for the purpose of levy and collection of excise duty. relied upon the definition of 'factory' under section 2(e) of the Act and took the view that the definition was not restricted to only the part in which the excisable goods were manufactured. It was, accordingly, held that it could not, therefore, be said that calcium carbide made by the petitioner-Company was removed from the factory in which it was produced. This decision lays down that so long as a commodity is not removed from the factory premises, there is no removal within the meaning of rules 9 and 49. A similar view has been taken by in a later decision in , E.L.T. 320 where has expressed the view that o excise duty can be levied and recovered on 'sliver' obtained by the petitioners, if it is consumed within the very premises in which it is manufactured because in such cases there is no removal of sliver from the place of manufacture as envisaged by rules 9 and 49 More or less a similar view has been taken by in another decision in , [19801 E.L.T. 675. In that case, the petitioner manufactured Bentol, a mixture of Benzene and Toluene, in the factory, which was again used for the manufacture or rubber took the view that it was not a case of removal under rules 9 and 49 and, as such, no excise duty was payable on Bentol. ", "We may notice another decision of in , [ 1982] L.T 33 In that case it has been held that since the impugned resins (polyester or phenolic resins) are not removed from the place of manufacture but are used for the manufacture of end product (Varnish) within the plant itself, there is no removal of goods within the meaning of rule 9 read with rule 49 of the Rules. ", "Thus it appears that there is a conflict of opinion in the decisions of as to what is meant by the word 'removal' for the purpose of payment of excise duty. Two views have been expressed by . One view is that so long as any product manufactured in the factory is not actually removed from the factory premises, there is no removal and, accordingly, no excise duty is payable on the product, even if the product is used for the manufacture of another commodity inside the factory. The other view is that if at one stage a commodity known to the market is produced and is transferred, within the factory for the manufacture of another commodity, there is removal within the meaning of rules 9 and 49. ", " ", "Apart from the above two views, there is a third view which has A also been expressed by , namely, that if an intermediate product is obtained in an integrated process of manufacture of a commodity, there is no removal and, therefore, such intermediate product although known to the market and comes under a particular tariff item yet, as there is no removal, there will be no question of payment of excise duty on such intermediate product. ", "The Nagpur Bench of in , [ 1980] L.T. 327 has adopted the second and third views. It has been held that if the purpose of removal of excisable goods is consumption in the same place where the excisable goods are manufactured or cured or if such excisable goods are used in the manufacture of any other goods in the same place, this cannot be done without payment of excise duty at the place and in the manner prescribed. Further, it has been held that where the plant of production is treated as a composite plant and where the process of manufacture is an integrated, continuous and uninterrupted process, a transfer of a produce which is a component of the final produce from one part of the plant to another, does not amount to removal as contemplated by rule 9. According to this decision, a process of onward movement of a component for being converted into a final product is not covered by the concept of removal contemplated by the provision of rule 9 of the Rules. ", " , E.L.T 927 has taken more or less the same view as that of . It has been observed that an intermediate product which by itself is goods known to the market and is used in captive consumption for bringing out altogether a new goods not by an integrated process, but by a distinct and separate process, is liable to excise duty before its removal. ", "So far as captive consumption is concerned, has taken the same view as that of in , E.L.T. 618 where it has been held by that excise duty is payable when yarn is removed from the spinning department to the weaving department for the manufacture of fabrics All the above decisions relate to rules 9 and 49 before they were amended. Leaving aside the question of specification for the time being. rule 9 before its amendment prohibits the removal of excisable goods whether for consumption, export or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid. It is manifestly clear from rule 9 that it contemplates not only removal from the place where the excisable goods are produced, cured or manufactured or any premises appurtenant thereto, but also removal within such place or premises for captive consumption or 'home consumption', as it is called. Thus if a commodity which is manufactured in such place or premises and is used for the manufacture of another commodity, then it will be a case of removal for the purpose of payment of excise duty. This view which we take clearly follows from the expression \"whether for consumption, export or manufacture of any other commodity in or outside such place\". Thus consumption of excisable goods may be within such place or outside such place. The decisions which have taken the view that if a commodity manufactured within the factory in one plant is transferred to another plant for the purpose of production of another commodity will be removal for the purpose of payment of excise duty are, in our opinion, correct. It is not easily understandable why the definition of expression 'factory' under section 2(e) of the Act has been taken resort to in some of the decisions for the purpose of interpretation of rule 9. There can be no doubt that if a commodity is taken outside the factory it will be removal, but rule 9 does not, in any manner, indicate that it is only when the goods are removed from the factory premises it will be removal and when the excisable goods manufactured within the factory is removed from one plant to another it will not be a case of removal. On the contrary, as noticed already, rule 9 clearly embraces within it captive consumtion of excisable goods, that is to say, when excisable goods manufactured in the factory are used for production of another commodity. ", "Now the question is whether rule 9 before it was amended also envisaged a case of an intermediate product obtained in an integrated and continuous process of manufacture of another commodity, that is, the end product. It must be admitted that prima facie rule 9 does not show that it also covers a case of integrated, continuous and uninterrupted process of manufacture producing a commodity at an intermediate stage which again is utilised in such continuous process for the manufacture of the end product The learned Attorney General, appearing on behalf of , submits that rule 9 and rule 49 also envisaged such a case of integrated process of manufacture of the end product using a product produced at an intermediate stage In support of his contention he has placed reliance on an unreported decision of in Misc. 491 of 1964, dated April, 30, 1970 ( v. Shri , Assistant Collector & Ors.) The learned Single Judge of took the view that a continuous or integrated process of manufacture was not initially contemplated by rule 9 or rule 49, but after the addition of a new set of rules being rules 173A to 173K to the Rules by the Notification dated May 11, 1968 a continuous and integrated process of manufacture came to be contemplated by the scheme of the Act and the Rules. Reliance has been placed by the learned Judge on the Explanation to rule 173A as added by the said Notification dated May 11, 1968. The Explanation is as follows:- ", "\"Explanation-The expression 'home use' means the consumption of such goods within India for any purpose and includes use of such goods in the place of production or manufacture or any other place or premises (whether by continuous process or not), for manufacture of any commodity. ", "Reliance has also been placed on rule 173G which provides for the procedure to be followed by an assessee who is a manufacturer of matches or cigarettes or cheroots. The relevant portion of rule 173G is a proviso thereto which is as follows:- ", "\"Provided that the duty due on the goods consumed within the factory in a continuous process may be so paid at the end of the factory day.\" ", "From the above provisions of the Explanation to rule 173A and the proviso to rule 173G, the learned Judge has taken the view that a continuous or integrated process of manufacture has come to be contemplated by the scheme of the Act and the Rules framed thereunder for the first time only in May, 1968, the scheme having been brought into force with effect from June 1, 1968 and prior thereto such a continuous or integrated manufacturing process was never contemplated by the Act or the Rules. ", "The. learned Attorney General gets inspiration from the said unreported case of and submits that atleast since after May, 1968, rule 9 and rule 49 envisage the case of an integrated and continuous process of manufacture involving the use or utilisation of a commodity produced at an intermediate stage of such process for the manufacture of an end product or commodity. It is submitted by him that if the interpretation as given by the learned Single Judge of in the above unreported decision is accepted, in that case, it will not be necessary to consider the effect of amended rule 9 or rule 49, that is to say, the Explanations that have been added to these two rules. ", "It may be that the concept of continuous or integrated process of manufacture has been recognised in the Explanation to sub-rule (2) of rule 173A and in the proviso to rule 173G but we do not think that rule 9 or rule 49 should be interpreted in the light of provisions of the Explanation to sub-rule (2) of rule 173A or the proviso to rule 173G Moreover, we are not concerned with the interpretation of rule 9 and rule 49, as they stood before the amendment. In the instant case, the appellants have challenged rule 9 and rule 49 as amended by the Notification dated February 20, 1982 We are, therefore, concerned with the interpretation of these rules as amended, particularly the question of validity of these rules. ", "Before we proceed to consider the contentions made on behalf of the parties, it may be stated that in view of the divergence of judicial opinions as to the interpretation of rules 9 and 49, before they were amended, the Explanations to rules 9 and 49 have been added so as to obviate any doubt. The Explanations to rule 9 and rule 49, inter alia, provide that commodity obtained at an intermediate stage of manufacture in a continuous process shall be deemed to have been removed from such place or premises as mentioned in sub-rule (1) of rule 9 This deeming provision has been given retrospective effect by virtue of section S l of the Finance Act 1982. ", "It is urged by Mr. , learned Counsel for the appellants, that the amended rule 9 and rule 49 are arbitrary and unreasonable inasmuch as the goods which, in fact, are not removed from the factory and which are incapable of removal because of the nature and construction of the plant or the nature and character of the manufacturing process, are fictionally treated as having been removed. It is submitted that as a result of the amendment of these rules the appellants are exposed to excessive hardship for not complying with the statutory provisions In view of the length of the retrospective operation of the amendments, namely 38 years from the date of the commencement of the Act, that is, February 28, 1944 the appellants would be called upon to pay enormous amount of duty in respect of the entire quantity of goods which have come into existence and have been captively consumed within the factory premises. The appellants will not, however, be able to pass on this burden to consumers and will have to bear the same themselves It is submitted that in view of the arbitrariness and unreasonableness of the amendments and the hardships that will be caused to the appellants and other manufacturers of excisable goods, the amendments should be struck down as violative of the provisions of Article 14 and Article 19(1)(g) of the Constitution of India. ", "It is not disputed that the is competent to make laws both prospectively and retrospectively But, as pointed out by this Court in , [ 19661 I S.C. R. 890, the cases may conceivably occur where the court may have to consider the question as to whether excessive retrospective operation prescribed by a taxing statute amounts to the contravention of the citizens' fundamental rights; and in dealing with such a question the court may have to take into account all the relevant and surrounding facts and circumstances in relation to the taxation. Again in , [ 1964] I S C.R 897 this Court has pointed out that if the retrospective feature of a law is arbitrary and burdensome, the statute will not be sustained and the reasonableness of each retrospective statute will depend on the circumstances of each case; and the test of the length of time covered by the retrospective operation cannot, by itself, necessarily be a decisive test. ", "The apprehension of the appellants is that the amendments to rules 9 and 49 having been made retrospective from the date the Rules were framed, that is from February 28, 1944, the appellants and others similarly situated may be called upon to pay enormous amounts of duty in respect of intermediate goods which have come into existence and again consumed in the integrated process of manufacture of another commodity There can be no doubt that if one has to pay duty with retrospective effect from 1944, it would really cause great hardship but, in our opinion, in view of section I IA of the Act, there is no cause for such apprehension. Section I IA(I) of the Act provides as follows:- ", "\"Section l1A.-(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short- paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: ", "714 ", "Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words \"six months\", the words \"five years ' were substituted. ", "Explanation.-Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be \" ", "Under section 11A ( I) the excise authorities cannot recover duties not levied or not paid or short-levied or short-paid or erroneously refunded beyond the period of six months, the proviso to section l IA not being applicable in the present case. Thus although section 5 l of the Finance Act , 1982 has given retrospective effect to the amendments of rules 9 and 49, yet it must be subject to the provision of section 11A of the Act. We are unable to accept the contention of the learned Attorney General that as section 5 1 has made the amendments retrospective in operation since February 28, 1944, it should be held that it overrides the provision of section 11A . If the intention of the was to nullify the effect of section 11A , in that case, the would have specifically provided for the same Section 5 1 does not contain any non-obstante clause nor does it refer to the provision of section 1 IA. In the circumstances it is difficult to hold that section 5 l overrides the provision of section 1 IA. ", "It is, however, contended by the learned Attorney General that as the law was amended for the first time on February 20, 1982, the cause of action for the excise authorities to demand excise duty in terms of the amended provision, arose on that day, that is, on February 20, 1982 and, accordingly, the authorities are entitled to make such demand with retrospective effect beyond the period of six months. But such demand, though it may include within it demand for more than six months, must be made within a period of six months from the date of the amendment. ", "There is no provision in the Act or in the Rules enabling the excise authorities to make any demand beyond the periods mentioned in section 11A of the Act on the ground of the accrual of cause of action. The question that is really involved is whether in view of section 5 1 of the Finance Act, 1982, section 11A should be ignored or not. In our view section S I does not, in any manner, affect the provision of section 11A of the Act. In the absence of any specific provision overriding section 1 IA, it will be consistent with rules of harmonious construction to hold that section 51 of the Finance Act, 1982 in so far as it gives retrospective effect to the amendments made to rules 9 and 49 of the rules, is subject to the provision of section 11A . ", "In the circumstances, there is no question of the amended provision of rule 9 and rule 49 being arbitrary, unreasonable or violative of the provision of Article 14 and Article 19(1)(g) of the Constitution of India. ", "We may now deal with the challenge made to the retrospective operation of amendments of rules 9 and 49 on another ground. In order to appreciate the ground of such challenge, we may once more refer to section 51 of the Finance Act, 1982. The Explanation to section 5 1 provides as follows:- ", "\"Explanation.-For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force.\" ", "Under the Explanation, although rules 9 and 49 have been given retrospective effect, an act or omission which was not punishable before the amendment of the Rules, will not be punishable after amendment. The Explanation does not however, provide for the penalties and confiscation of goods. It is the contention of the appellants that as the appellants had not complied with the requirements of the amended rules 9 and 49, they would be subjected to penalties and their goods would be confiscated under the amended rules 9 and 49 read with rule 173Q of the Rules with retrospective effect. It is, accordingly, submitted on behalf of the appellants that the amendment of these two rules with retrospective effect is arbitrary and unreasonable and should be struck down as violative of Article 14 of the Constitution. ", "Attractive though the argument is, we regret we are unable to accept the same. It is true that the Explanation to section 51 has not mentioned anything about the penalties and confiscation of goods but H we do not think that in view of such non-mention in the Explanation excluding imposition of penalties for acts or omissions before amendment. such penalties can be imposed or goods can be confiscated by virtue of the amended provisions of rules 9 and 49. It will be against all principles of legal jurisprudence to impose a penalty on a person or to confiscate his goods for an act or omission which was lawful at the time when such act was performed or omission made, but subsequently made unlawful by virtue of any provision of law. The contention made on behalf of the apellants is founded on the assumption that under the Explanation to section 5 1 , the penalties can be imposed and goods can be confiscated with retrospective effect. In the circumstances, the challenge to the amendments of rules 9 and 49, founded on the provision of the Explanation to section 51 of the Finance Act, 1982, is without any substance and is rejected The appellants have also challenged the prospective operation of the Explanation to rules 9 and 49 introduced by amendments of the same. It is strenuously uged by Mr. , learned Counsel for the appellants, that even after amendment there must be removal of the goods from one place to another for the purpose of collection of excise duty. Our attention has been drawn on behalf of the appellants to clause (b) of sub-section (4) of section 4 of the Act, which defines \"place of removal\" as follows:- ", "\"Sub-section (4)-For the purpose of this section,- ", "(a)..................................... ", "(b) \"place of removal\" means- ", "(i) a factory or any other place or premises of production or manufacture of the excisable goods; or ", "(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed. ", "It is submitted on behalf of the appellants that the Explanations to rule 9 and rule 49 are ultra vires the provision of clause (b) of sub-section (4) of section 4 of the Act inasmuch as \"place of removal\" as defined therein, does not contemplate any deemed removal, but a physical and actual removal of the goods from a factory or any other place or premises of production or manufacture or a warehouse etc. A This contention is unsound and also does not follow from the definition of \"place of removal . Under the definition \"place of removal\" may be a factory or any other place or premises of production or manufacture of the excisable goods etc The Explanation to rules 9 and 49 do not contain any definition of \"place of removal\", but provide that excisable goods produced or manufactured in any place or premises at an intermediate stage and consumed or utilised for the manufacture of another commodity in a continuous process, shall be deemed to have been removed from such place or premises immediately before such consumption or utilization. Clause (b) of sub-section (4) of section 4 has defined \"place of removal\", but it has not defined 'removal'. There can be no doubt that the word 'removal contemplated shifting of a thing from one place to another. In other words, it contemplates physical movement of goods from one place to another It is well settled that a deeming provision is an admission of the non-existence of the fact deemed. Therefore, in view of the deeming provisions under Explanations to rules 9 and 49, although the goods which are produced or manufactured at an intermediate stage and, thereafter, consumed or utilised in the integrated process for the manufacture of another commodity is not actually removed, shall be construed and regarded as removed. The is quite competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not really exist. It has been already noticed that the taxing event under section 3 of the Act is the production or manufacture of goods and not removal The Explanations to rules 9 and 49 contemplate the collection of duty levied on the production of a commodity at an intermediate stage of an integrated process of manufacture of another commodity by deeming such production or manufacture of the commodity at an intermediate stage to be removal from such place or premises of manufacture. The deeming provisions are quite consistent with section 3 of the Act As observed by in 's case (supra) there is in theory nothing to prevent the central legislature from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it after- wards, whether it be sold, consumed or destroyed or given away. It is for the convenience of the taxing authority that duty is collected at the time of removal of the commodity. There is, therefore, nothing unreasonable in the deeming provision and, as discussed above, it is quite in conformity with the provision of section 3 of the Act The contention that the amendments to rules 9 and 49 are ultra vires clause H ", "(b) of sub-section (4) of section 4 of the Act, is without substance and is overruled. ", "It is next contended on behalf of the appellants that even assuming that there can be fictional removal as provided in the Explanation to rules 9 and 49, there cannot be such fictional or deemed removal without the specification of the place where the excisable goods are produced, cured or manufactured or any premises appurtenant thereto. Rule 9(1), inter alia provides that no excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf until the excise duty leviable thereon has been paid. The Explanations to rules 9 and 49 refer to the specification that has been made by the Collector under sub- rule (1) of rule 9. It is submitted on behalf of the appellants that as no specification has been made by the Collector of such place or premises appurtenant thereto, the provision of deemed removal with regard to the commodity produced at the intermediate stage and consumed or utilised in the continuous process of manufacture of the end product, is inapplicable. It is contended that so long as such specification is not made by the Collector of the place of manufacture or of any premises appurenant thereto, the provision of deemed removal as contained in the Explanations to rule 9 and 49 cannot be given effect to. ", "On the other hand, it is contended by the learned Attorney General that specification of the place of manufacture and other places for the storage of the goods, is made in the licence which is required to be obtained under rule 174 of the Rules. Rule ]78 provides for the form. of licence. Clause (b) of rule 178(1) provides that every licence granted or renewed under rule 176 shall have reference only to the premises, if any, described in such licence. Form A L.-IV is the form of an application for licence under rule 176. In the Schedule to the Form, description of the premises intended to be used as a factory and of each main division or sub-division of the factory has to be given. Further, the detailed description of store-room or other place of storage and the purpose of each has also to be given in the application form for the grant of licence for the manufacture of excisable goods. Again under rule 44 of the Rules, the Collector may require any manufacturer to make a prior declaration of factory premises and its equipments. Such a declaration has to be given in Form D-2 in respect of buildings, rooms, vessel, etc. In view of the particulars which are required to be given by a licensee for the manufacture of excisable goods, it is submitted by the learned Attorney General that the specification that is required to be made under rule 9(1), is made in the licence and in the declaration that has to be furnished by the manufacturer in Form D-2. ", "It is true that under rule 9(1) there is a provision for specification by the Collector, but the question is what has to be specified by the Collector. It is the contention of the appellants that the Collector has to specify the place of manufacture and also any premises appurtenant thereto. We are, however, unable to accept this contention. The place where the goods are to be manufactured by a manufacturer, that is to say, the site of the factory cannot be specified by the Collector. It is for the manufacturer to choose the site or the place where the factory will be constructed and goods will be manufactured. Rule 9(1), in our opinion, does not require the Collector to specify the place where the excisable goods are produced, cured or manufactured. The words \"which may be specified by the Collector in this behalf\" occurring in rule 9(1) of the Rules do not qualify the words \"any place where they are produced, cured or manufactured', but relate to or qualify the words \"any premises appurtenant thereto\". In other words, if the place of removal is not the place where the goods are produced, cured or manufactured, but any premises appurtenant to such place, in that case, the Collector has to specify such premises for the purpose of collection of excise duty. Thus the contention of the appellants that the Collector has to specify the place of manufacture and also any premises appurtenant thereto under rule 9(1) of the Rules, is without any substance. ", "Our attention has, however, been drawn to the impugned circular dated September 24, 1980 issued by . In clause 3 of the circular, it is stated as follows:- ", "\"Mere approval of the ground plan in a routine manner will not suffice for purposes of rule 9 as under the said rule the place of production etc. Or premises appurtenant thereto have also to the specified separately \" ", "Under the circular, the Collector is required to specify under rule 9(1) both the place of production and premises appurtenant thereto, if any. In view of this direction given in the circular, the learned Counsel for the appellants submits that it is not only binding on the Collector and the other officers of , but also the circular is in the nature of contemporanea exposito rendering useful aid in the construction of the provision of rule 9(I) of the Rules. This contention finds support from the decision of this Court in K.P. Var- ", "720 ", "ghese v. The Income-Tax officer, Ernakulam, [1982] I S.C.R. 629 relied on by the learned Counsel of the appellants. Indeed, it has been observed in that case that the rule of construction by reference to contemporanea exposito is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the 13 statute is plain and unambiguous. In our opinion, the language of rule 9(1) admits of only one interpretation and that is that the specification that has to be made by the Collector is of any premises appurtenant to the place of manufacture or production of the excisable goods. The specification is not required to be made and, in our view, cannot be made of the place of manufacture or production of the excisable goods. Apart from that, as observed by , upon a review of all the decisions on the point, in an earlier decision of this Court in the , 3 S.C.R. 146, the maxim contemporanea exposito as laid down by was applied to construing ancient statutes but not to interpreting Acts which are comparatively modern. Further, it has been observed that in a modern progressive society it would be unreasonable to confine the intention of a to the meaning attributable to the word used at the time the law was made and, unless a contrary intention appears, an interpretation should be given to the words used to take in new facts and situations, if the words are capable of comprehending them. Most respectfully we agree with the said observation of In the circumstances, we do not agree with the direction of given in the impugned circular that both the place of manufacture and the premises appurtenant thereto must be specified by the Collector under rule 9 1(1) of the Rules. Thus, there being no question of specification of the place of manufacture, the contention of the appellants that without such specification there cannot be any deemed removal, fails. ", "In view of the discussion made above, we hold that the amendments to rules 9 and 49 are quite legal and valid. Further, section S 1 of this Finance Act , 1982 giving retrospective effect to the said amendments is also legal and valid. ", "In the instant case, the appellants are liable to pay excise duty on the yarn which is obtained at an intermediate stage and, thereafter, further processed in an integrated process for weaving the same into fabrics. Although it has been alleged that the yarn is obtained at an intermediate stage of an integrated process of manufacture of fabrics, it appears to be not so. After the yarn is produced it is sized and, thereafter, subjected to a process of weaving the same into fabrics. Be that as it may, as we have held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty. In our view, by the impugned judgment has rightly held that the appellants are not liable to pay any excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics. No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. ", "For the reason aforesaid, the judgment of is affirmed and this appeal is dismissed. There will. however, be no order as to costs. ", "Civil Appeal Nos. 2658 and 4168 of 1983. ", "In view of the judgment passed in Civil Appeal No. 297 of 1983, these appeals are also dismissed. There will, however, be no order as to costs. ", "S.L. Appeals dismissed."], "relevant_candidates": ["0000131411", "0000399708", "0000495433", "0000702832", "0000795047", "0000799826", "0000838066", "0000882976", "0001103984", "0001216757", "0001560316", "0001793943", "0001799780"]} {"id": "0001430396", "text": ["PETITIONER: THE COMMISSIONER, HINDU RELIGIOUS ENDOWMENTS, Vs. RESPONDENT: SRI LAKSHMINDRA THIRTHA SWAMIAR OF SRI SHIRUR MUTT. DATE OF JUDGMENT: 16/04/1954 BENCH: , B.K. BENCH: , B.K. HASAN, GHULAM BHAGWATI, NATWARLAL H. AIYYAR, T.L. VENKATARAMA MAHAJAN, (CJ) DAS, , VIVIAN CITATION: 1954 AIR 282 1954 SCR 1005 CITATOR INFO : R 1954 SC 388 (9,21) RF 1954 SC 400 (4) F 1955 SC 493 (4,5) RF 1956 SC 432 (5,12) RF 1957 SC 645 (4) R 1957 SC 846 (13) R 1958 SC 255 (16,27,30) R 1959 SC 860 (7) F 1959 SC 942 (12,13,14) F 1961 SC 284 (6) R 1961 SC 459 (10,42) R 1961 SC1402 (33) R 1962 SC 853 (8,18,22,34) RF 1962 SC1371 (37,78) D 1963 SC 540 (7) R 1963 SC 864 (26) R 1963 SC 966 (19) RF 1963 SC1638 (45,47,48,56,62,74) R 1965 SC1107 (14,48,50) R 1965 SC1874 (28) R 1966 SC1603 (7) R 1968 SC1119 (6) R 1968 SC1408 (7) R 1970 SC 181 (5,9,10) R 1970 SC 564 (176) R 1970 SC1114 (1) E 1971 SC1182 (4,14) F 1971 SC1691 (8) RF 1971 SC1737 (17) RF 1972 SC 845 (5) R 1972 SC1586 (12) RF 1973 SC 724 (33,34,43,44) RF 1974 SC2098 (28) R 1975 SC 706 (20,40) R 1975 SC 846 (14) R 1975 SC1121 (44,56) MV 1975 SC1146 (62) F 1975 SC2037 (19) R 1978 SC1393 (9) E 1980 SC 1 (3,12,13) R 1980 SC1008 (8,9,10,11,22) RF 1981 SC1863 (24,29) D 1983 SC 1 (78,92,94) R 1983 SC 617 (4) R 1983 SC1246 (15,26,30,31) R 1984 SC 51 (8A,9,10) R 1985 SC 218 (7) R 1986 SC 726 (7,10) F 1986 SC1930 (19) RF 1986 SC2094 (16,17) R 1987 SC 748 (19) RF 1989 SC 100 (14,17,18) RF 1989 SC 317 (34) RF 1992 SC1256 (13) RF 1992 SC1383 (14) ACT: Constitution of India, arts. 19(1)V), 25, 26, 27-Madras Hindu Religious and Charitable Endowments Act , 1951 (Madras Act XIX of 1951), ss. 21 , 30(2) , 31 , 55 , 56 and 63 to 69 , 76- -Whether ultra vires the Constitution-- Word \"property\" in art. 19(1)(f) meaning of--Tax and fee, meaning of- Distinction between. HEADNOTE: Held, that ss. 21, 30(2), 31, 55, 56 and 63 to 69 of the Madras Hindu Religious and Charitable Endowments Act , 1951 (Madras Act XIX of 1951) are ultra vires arts. 19(1)(f), 25 and 26 of the Constitution of India. Section 76(1) of the Act is void as the provision relating to the payment of annual contribution contained in it is a tax and not a fee and so it was beyond the legislative competence of to enact such a provision. That on the facts of the present case the imposition under a. 76(1) of the Act, although it is a tax, does not come within the latter part of art. 27 because the object of the contribution under the section is not the fostering or preservation of the Hindu religion or any denomination under it but the proper administration of religious trusts and institutions wherever they exist. 130 1006 The word \" property \" as used in art. 19(1)(f) of the Constitution should be given a liberal and wide connotation and should be extended to all well-recognized types of interest which have the insignia or characteristics of proprietary right. The ingredients of both office and property, of duties and personal interest are blended together in the rights-of a and the has the right to enjoy this property or beneficial interest so long as he is entitled to hold his office. Therefore he is entitled to claim the protection of art. 19(1)(f). A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered. It is not possible to formulate a definition of fee that can apply to all cases as there are various kinds of fees. But a fee may generally be defined as a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the in rendering the service, though in many cases such expenses are arbitrarily assessed. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is a payment for a special benefit or privilege.\" Scope of arts. 25 and 26 discussed. Meaning of the term \" Mathadhipati \" and religion explained. (48 I.A. 302), v. (60 Cal. 452), (63 I.A. 448), v. (70 I.A. 57), ( S.C.R. 1125), v. Benson,(133 U.S. 333), (civil Appeal No. 107 of 1952 decided by on the 17th December, 1953), v. The (67 C.L.R. 116, 127), , etc. v. (310 U.S. 586), West Virginia State v. (319 U.S. 624), v. (319 U.S. 105), v. (316 U.S. 584), 's (60 C.L.R. 263, 276), v. ( A.C. 168) referred to. (Findlay Shirras on Science of Public Finance, Vol. I. p. 203). JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 38 of 1953. Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the 13th December, 1951, of , Madras, in Civil Miscellaneous Petition No. 2591 of 1951. ", "1007 ", ", Advocate-General of Madras (, with him) for the appellant. ", " and ( and , with them) for the respondent. , Advocate-General of Travancore- Cochin ( and with him) for the Intervener (State of Travancor,Cochin). 1954. March 16. The Judgment of the Court was delivered by MUKHERJIA J.-This appeal is directed against a judgment of of , dated the 13th of December, 1951, by which the learned Judges allowed & petition, presented by the respondent under article 226 of the Constitution, and directed a writ of prohibition to issue in his favour prohibiting the appellant from proceeding with the settlement of a scheme in connection with a Math, known as the Shirur Math, of which the petitioner happens to be the head or superior. It may be stated at the outset that the petition was filed at a time when the Madras Hindu Religion Endowments Act (Act II of 1927), was in force and the writ was prayed for against constituted under that Act, which -was the predecessor in authority of the present appellant and had initiated proceedings for settlement of a scheme against the petitioner under section 61 of the said Act. ", "The petition was directed to be heard along with two other petitions of a similar nature relating to the temple at Chidambaram in the district of South Arcot and questions were raised in all of them regarding the validity of Madras Act 11 of 1927, hereinafter referred to as the Earlier Act. While the petitions were still pending, the Madras Hindu Religious and Charitable Endowments Act ,, 1951 (hereinafter called the New Act), was passed by and came into force on the 27th of August, 1951. In view of the Earlier Act being replaced by the new one,, leave was given to all the petitioners to amend their petitions and challenge the validity of the. New Act as well. ", " ", "Under section 103 of the New Act, notifications, orders and acts under the Earlier Act are to be treated as notifications, orders and acts issued, made or done by the appropriate, authority under the corresponding provisions of the New Act, and in accordance with this -provision, the Commissioner, , Madras, who takes the place of the President, \" Board under the Earlier Act, was added as a party to the proceedings. ", "So far as the present appeal is concerned, the material facts may be shortly narrated as follows: The Math, known as Shirur Math, of which the petitioner is the superior or , is one of the eight situated at Udipi in the district of South Kanara and they are reputed to have been founded by , the well-known exponent of dualistic theism in the Hindu Religion. Besides these eight , each one of which is presided over by a Sanvasi or Swami, there exists another ancient religious institution at Udipi, known as , also established by which is supposed to contain an image of originally made by and miraculously obtained from a vessel wrecked at the coast of Tulava. There is no in and its. affairs are managed by the superiors of the other eight by turns and the custom is that the Swami of each of these eight presides over in turn for a period of two years in every sixteen years. The appointed time of change in the headship of is the occasion of a great festival, known as Pariyayam, when a vast concourse of devotees gather at Udipi from all parts of Southern India, and an ancient usage imposes a duty upon the to feed every Brahmin that comes to the place at that time. ", "The petitioner was installed as in the year 1919, when he was still a minor, and he assumed management after coming of age some time in 1926. At that time the was heavily in debt. Between 1926 and 1930 the succeeded in clearing off a large portion of the debt. In 1931, however, came the turn of his taking over management of the Shri Krishna and he had had to incur debts to meet the heavy expenditure attendant on the Pariyayam ceremonies, The financial position improved to some extent during the years that followed, but troubles again arose in 1946, which was the year of the second Pariyayam of the . Owing to scarcity and the high prices of commodities at that time, the had to borrow money to meet the expenditure and the debts mounted up to nearly a lakh of rupees. , functioning under the Earlier Act of 1927, intervened at this stage and in exercise of its powers under section 61 - A of the Act called upon the to appoint a competent manager to manage the affairs of the institution. The petitioners case is that the action of the was in stigated by one , a lawyer of Udipi, who wanted to have control over the affairs of the . It appears that in pursuance of the direction of the , one was appointed an agent and a Power of Attorney was executed in his favour on the 24th of December, 1948. The agent, it is alleged by the petitioner, wanted to have his own way in all the affairs of the and paid no regard whatsoever to the wishes of the . He did not even submit accounts to the and deliberately flouted his authority. In this state of affairs the ,, on the 26th of September, 1950, served a notice upon the agent terminating his agency and calling upon him to hand over to the all account papers and vouchers relating to the institution together with the cash in hand. Far from complying with this demand, the agent, who was supported by the aforesaid , questioned the authority of the to cancel his agency and threatened that he would refer the matter for action to the . On the 4th of October, 1950, the petitioner filed a suit against the agent in for recovery of the account books and other articles belonging to the , for rendering an account of the management and also for an injunction restraining the said agent from interfering with the affairs of the under colour of the authority conferred by which the plaintiff had cancelled. The said anticipating this suit filed an application to the on the 3rd of October, 1950, complaining against the cancellation of and his management of the . The on the 4th October, 1950, issued a notice to the proposing to inquire into the matter on the 24th of October following at 2 p.m. at Madras and requesting the either to apppear in person or by a pleader. To this the sent a reply on 21st October, 1950, stating that the subject-matter of the very enquiry was before the court in the original suit filed by him and as the matter was sub judice the enquiry should be put off. A copy of the plaint filed in that suit was also sent along with the reply. The , it appears, dropped that enquiry, but without waiting for the result of the suit, initiated proceedings suo moto under section 62 of the Earlier Act and issued a notice upon the on the 6th of November, 1950, stating that it had reason to believe that the endowments of the said were being mismanaged and that a scheme should be framed for the administration of its affairs. . The notice was served by affixture on the and the 8th of December, 1950, was fixed as the date of enquiry. On that date at the request of the counsel for the , it was adjourned to the 21st of December, following. On the 8th of December, 1950, an application was filed on behalf of the praying to the to issue a direction to the agent to hand over the account papers and other documents, without which it was not possible for him to file his objections As the lawyer appearing for the was unwell, the matter was again adjourned till the 10th of January, 1951. The was not ready with his objections even on that date as his lawyer had no t recovered from his illness and a telegram was sent to the on the previous day requesting the latter to grant a further adjournment. The did not accede to this request and as no explanation was filed by the , the enquiry was closed and orders reserved upon it. On the 13th of January, 1951, the , it appears sent a written explanation to the , which the latter admittedly received on the 15th On the 24th of January, 1951, the received a notice from the stating inter alia that the was satisfied that in the,, interests of proper administration of the and its endowments, the settlement of a scheme was necessary. A draft scheme was sent along with the notice and if the petitioner had any objections to the same, he was required to send in his objections on or before the 11th of February, 1951, as the. final order regarding the scheme would be made on the 15th of February, 1951. On the 12th of February, 1951, the peti- tioner filed the petition, out of which this appeal arises, in Madras, praying for a writ of prohibition to prohibit the from taking further steps in the matter of settling a scheme for the administration of the . It was alleged inter alia that the was actuated by bias against the petitioner and the action taken by it with regard to the settling of a scheme was not a bona fide act at all. The main contention, however, was that having regard to the fundamental rights guaranteed under the Constitution in matters of religion and religious institutions belonging to particular religious denominations, the law regulating the framing of a scheme interfering with the management of the and its affairs by the conflicted with the provisions of art- icles 19(1) (f) and 26 of the Constitution and was hence void under article 13. It was alleged further that the provisions of the Act were discriminatory in their character and offended against article 15 of the Constitution. As has been stated already, after the New Act came into force, the petitioner was allowed to end his petition and the attack was now directed against the constitutional validity of the New Act which replaced the earlier legislation. The learned Judges, who heard the petition, went into the matter with elaborate fullness, both on the constitutional questions involved in it as well as on its merits. On the merits, it was held that in the circumstances of the case the action of the was a perverse exercise of its jurisdiction and that it should not be allowed to proceed in regard to the settlement of the scheme. On the constitutional issues raised in the case, the learned Judges pronounced quite a number of sections of the New Act to be ultra vires the Constitution by reason of their being in conflict with the fundamental rights of the petitioner guaranteed under articles 19(1)(f), 25, 26 and 27 of the Constitution. In the result, the rule nisi issued on the petition was made absolute and the Commissioner, , Madras, was prohibited from proceeding further with the framing of a scheme inregard to the petitioner's . The Commisioner has now come up on appeal before us on the strength of a certificate granted by under article 132(1) of the Constitution. ", "The learned Advocate-General for Madras, who appeared in support of the appeal, confined his arguments exclusively to the constitutional points involved in this case. Although he had put in an application to. urge grounds other than the constitutional grounds, that application was not pressed and he did not challen the findings of fact upon which based its decision on the merits of the petition. The position, therefore, is that the order of issuing the writ of prohibition against the appellant must stand irrespective of the decision which we light arrive at on the constitutional points raised before us. ", "It is not disputed that is competent to enact laws on the subject of religious and charitable endowments, which is covered by entry 28 of List III in Schedule VII of the Constitution. No question of legislative incompetency on the part of to enact the legislation in question has been raised before us with the exception of the provision, relating to payment of annual contribution contained in section 76 of the impugned Act. The argument that has been advanced is, that the contribution is in reality a tax and not a fee and consequently had no authority to enact a provision of this character. We will deal with this point separately later on. All the other points canvassed before us relate to the constitutional validity or otherwise of the several provisions of the Act which have been held to be invalid by on grounds of their being in conflict with the fundamental rights guaranteed under articles 19(1) (f), 25, 26 and 27 of the Constitution. In order to appreciate the contentions that have been advanced on these heads by the learned counsel on both sides, it may be convenient to refer briefly to the scheme and the salient provisions of the Act. ", "The object of the legislation, as indicated in the preamble, is to amend and consolidate the law relating to the administration and governance of Hindu religious and charitable institutions and endowments in the State of Madras. As compared with the Earlier Act, its scope is wider and it can be made applicable to purely charitable endowments by proper notification under section 3 of the Act. The Earlier Act provided for supervision of Hindu religious endowments through a statutory body known as . The New Act has abolished this and the administration of religious and charitable institutions has been vested practically in a department of the , at the head of which is the Commissioner. The powers of the Commissioner and of the other authorities under him have been enumerated in Chapter II of the Act. Under the Commissioner are the Deputy Commissioners, Assistant Commissioners and s. The Commissioner, with the approval of the , has to divide the State into certain areas and each area is placed in charge of a Deputy Commissioner, to whom the powers of the Commissioner can be delegated. The State has also to be divided into a number of divisions and an Assistant Commissioner is to be placed in charge of each division. Below the Assistant Commissioner, there will be in charge of all the temples situated within a division or part of a division. Under section 18 , the Commissioner is empowered to examine the records of any Deputy Commissioner, Assistant Commissioner, or , or of any trustee not being the trustee of a, Math, in respect of any proceeding under the Act, to satisfy himself as to the regularity, correctness, or propriety of any decision or order. Chapter III contains the general provisions relating to all religious institutions. Under section 20 , the administration of religious endowments is placed under the general superintendence and control of the Commissioner and he is empowered to pass any orders which may be deemed necessary to ensure that such endowments are properly administered and their income is -duly appropriated for the purposes for which they were founded or exist. Section 21 gives the Commissioner, the Deputy and Assistant Commissioners and such other officers asmay be authorised in th is behalf, the power to enter the premises of any religious institution or any place of worship for the purpose of exercising any power conferred, or discharging any duty imposed, by or under the Act. The only restriction is that the officer exercising the power must be a Hindu. Section 23 makes it obligatory on the trustee of a religious institution to obey all lawful orders issued under the provisions of this Act by the , the Commissioner, the Deputy Commissioner, the or the Assistant Commissioner. Section 24 lays down that in the administration of the affairs of the institution, a trustee should use as much care as a man of ordinary prudence would use in the management of his own affairs. - Section 25 deals with the preparation of registers of all religious institutions and section 26 provides for the annual verification of such registers. Section 27 imposes a duty on the trustee to furnish to the Commissioner such accounts, returns, reports and other information as the Commissioner may require. Under section 28 , power is given to the Commissioner or any other officer authorised by him to inspect all movable and immovable properties appertaining to a religious institution. Section 29 forbids alienation of all immovable properties belonging to the trust, except leases for a term not exceeding five ", "-,,ears, without the Sanction of the Commissioner. Section 30 lays down that although a trustee may incur expenditure for making arrangements for securing the health and comfort of pilgrims, worshippers and other people, when there is a surplus left after making adequate provision for purposes specified in section 79(2) , he shall be guided in such matters by all genera or special instructions which he may receive from the Commissioner or . Section 31 deals with surplus funds which the trustee may apply wholly or in part with the permission in writing, of the Deputy Commissioner for any of the purposes specified in section 59(1) . Chapter IV deals specifically with Maths. Seetion 52 enumerates the grounds on which a suit would lie to remove a trustee. Section 54 relates to what is called \" dittam \" or scale of expenditure. The trustee has got to submit to the Commissioner proposals for fixing the \"dittam\" and the amounts to be allotted to the various objects connected with the institution. The proposals are to be published and after receiving suggestions, if any, from persons interested in the instution, they would be scrutinised by the Commissioner. If the Commissioner thinks that a modification is necessary, he shall submit the case to the and the orders of the would be final. Section 55 empowers the trustee to spend at his discretion and for purposes connected with the Math the \"Pathakanikas \" or gifts made to him personally, but he is required to keep regular accounts of the receipts and expenditure of such personal gifts. Under section 56 , the Commissioner is empowered to call upon the trustee to appoint a manager for the administration of the secular affairs of the institution and in default of such appointment, the Commissioner may make the appointment himself. Under section 58 , a Deputy Commissioner is competent to frame a scheme for any religious institutions if he has reason to believe that in the interests of the proper administration of the trust any such scheme is necessary. Sub-section (3) of this section provides that a scheme settled for a Math may contain inter alia a provision for appointment of a paid executive officer professing the Hindu religion, whose salary shall be paid out of the funds- of the institution. Section 59 makes provision for application of the \"cy pres\" doctrine when the specific objects of the trust fail. Chapter VI of the Act, which comprises sections 63 to 69 , deals with the notification of religious institutions. A religious institution may be notified in accordance with the provisions laid down in this chapter. Such notification remains in force for five years and the effect of it is to take over the administration and vest it in an executive officer appointed by the Commissioner. Chapter VII deals with budgets, accounts and audit and Chapter VIII relates to finance. Section 76 of Chapter VIII makes it compulsory for all religious institutions to pay annually to the a contribution not exceeding 5 per cent. of their income on account of the services rendered to them by the and their officers functioning under this Act. Chapter IX is not material for our purpose, and Chapter X deals with provisions of a miscellaneous nature. Section 89 in Chapter X prescribes the penalty for refusal by a trustee to comply with the provisions of the Act. Section 92 lays down that nothing contained in the Act shall be deemed to confer any power or. impose any duty in contravention of the rights conferred on any religious denomination under clauses (a), ", "(b) and (c) of article 26 of the Constitution. Section 99 vests a revisional jurisdiction in the Government to call for and examine the records of the Commissioner and other subordinate authorities to satisfy themselves as to the regularity and propriety of any proceeding taken or any order or decision made by them These, in brief, are the provisions of the Act material for our present purpose. The learned Judges of have taken the view that the respondent as has certain well defined rights in the institution and its endowments which could be regarded as rights to property within the meaning of article 19(1)(f) of the Constitution. The provisions of the Act to the extent that they take away or unduly restrict the power to exercise these rights are not reasonable restrictions within the meaning of article 19(5) and must consequently be held invalid. has held in the second place that the respondent, as the head and representative of a religious institution, has a right guaranteed to him under article 25 of the Constitution to practise and propagate freely the religion of which he and his followers profess to be adherents. This right, in the opinion of , has been affected by some of the provisions of the Act. has held further that the in question is really an institution belonging to Sivalli Brahmins, who are a section of the followers of and hence constitutes a religious denomination within the meaning of article 26 of the Constitution. This religious denomination has a fundamental right under article 26 to manage its own affairs in matters of religion through the who is their spiritual head and superior, and those provisions of the Act, which substantially take away the rights of the in this respect, amount to violation of the fundamental right guaranteed under article 26. Lastly, has. held that the provision for compulsory contribution made in section 76 of the Act comes within the mischief of article 27 of the Constitution. This last point raises a wide issue and We propose to discuss it separately later on. So far as the other three points are concerned, we will have to examine first of all the general contentions that have been raised by the learned Attorney-General, who appeared for as an intervener in this and other connected cases, and the questions raised are, whether these articles of the Constitution are at all available to the respondent in the present case and whether they give him any protection regarding the rights and privileges, of the infraction of which he complains. ", "As regards article 19(1)(f) of the Constitution, the question that requires consideration is, whether the respondent as has a right to property in the legal sense,, in the religious institution and its endowments which would enable him to claim the -protection of this article ? A question is also formulated as to whether this article deals with concrete rights of property at all ? So far as article 25 of the Constitution is concerned, the point raised is, whether this article which, it is said, is intended to protect religious freedom only so far as individuals are concerned, can be invoked in favour of an institution or Organisation ? With regard to article 26 , the contention is that a does not come within the description of a religious denomination as provided for in the article and even if it does, what cannot be interfered with is its right to manage its own affairs in matters of religion only and nothing else. It is said, that the word it religion \", as used in this article, should be taken in its strict etymological sense as distinguished from any kind of secular activity which may be connected in some way with religion on but does not form an essential part of it. Reference is made in this connection to clause (2)(a) of article 25 and clause (d) of article 26. We will take up these points for consideration one after another. As regards the -property rights of a , it may not be possible to say in view of the pronouncements of , which have been accepted as good law in this country ever since 1921, that a holds the property as a lifetenant or that his position is similar to that of a Hindu widow in respect to her husband's estate or of an English BishoP holding a benefice. He is certainly not a trustee in the strict sense. He may be, as ), says, a manager or custodian, of the institution who has to discharge the duties of a trustee and is answerable as such; but he is not a mere manager and it would not be right to describe as a mere office.\" A superior of a has not only duties to discharge in connection with the endowment but he has a personal interest of a beneficial character which is sanctioned by custom and is much larger than that of a in the debutter property. It was held by a Full Bench of ), that ship. itself is property, and this decision was approved of by in v Lal Behary(3), and again in (4). (1) , 48 I. A. 302 (2) Vide Monahai v. , 60 Cal. 452. ", "(3) 63 I.A. 448. ", "(4) 70 I.A. 57. ", "1019 ", "The effect of the first two decisions, as pointed out in the last case, was to emphasise the propriet ary element in the right and to show that though in some respects an anomaly, it was an anomaly to be accepted as having been admitted into Hindu ,law from an early date. This view was adopted in its entirety by this court in (1), and what was said in that case in respect to right could, with equal propriety, be applied to the office of a . Thus in the conception of ship, as in Shebaitship, both the elements of office and property, of duties and personal interest are blended together and neither can be detached from the other. The personal or beneficial interest of the in the endowments attached to an institution is manifested in his large powers of disposal and administration and his right to create derivative tenures in respect to endowed properties; and these and other rights of a similar character invest the office of the with .the character of proprietary right which, though anomalous to some extent, is still a genuine legal right. It is true that the ship is not heritable like ordinary property, but that is because of its peculiar nature and the fact that the office is generally held by an ascetic, whose connection with his natural family being completely cut of, the ordinary rules of succession do not apply. ", "There is no reason why the word \"property\", as used in article 19(1) (f) of the Constitution, should not be given a liberal and wide connotation and should not be extended to those well recognised types of interest which have the insignia or characteristics of proprietary right. As said above, the ingredients of both office and property, of duties and personal interest are blended together in the rights of a and the has the right to enjoy this property or beneficial interest so long as he is entitled to hold his office. To take away this beneficial interest and leave him merely to the discharge of his duties would be to destroy his character as a altogether. It is true that the beneficial interest which he enjoys is appurtenant to his duties (1) S.C.R. 1125. ", "1020 ", "and as he is in charge of a public institution, reasonable restrictions can always be placed upon his rights in the interest of the public. But the restrictions would cease to be reasonable if they are calculated to make him unfit to discharge the duties which he is called upon to discharge. A 's duty is not simply to manage the temporalities of a Math. He is the head and superior of spiritual fraternity and the purpose of Math is to encourage and foster spiritual training by maintenance of a competent line of teachers who could impart religious instructions to the disciples and followers of the Math and try to strengthen the doctrines of the particular school or order, of which they profess to be adherents. This purpose cannot be served if the restrictions are such as would bring the Mathadhipati down to the level of a servant under a department. It is from this standpoint that the reasonableness of the restrictions should be judged. ", "A point was suggested by the learned AttorneyGeneral that as article 19(1) (f) deals only with the natural rights inherent in a citizen to acquire, hold and dispose of property in the abstract without reference to rights to any particular property, it can be of no real assistance to the respondent in the present case and article 3l of the Constitution, which deals with deprivation of property, has no application here. In the case of . 107 of 1952, decided by this court on the 17th December, 1953), an opinion was expressed by that article 19(1) (f) of the Constitution is concerned only with the abstract right and capacity to acquire, hold and dispose of property and that it has no relation to concrete property rights. This, it may be noted, was an expression of opinion by the learned Chief Justice alone and it was not the decision of the court ; for out of the other four learned Judges who together with the Chief Justice constituted the Bench, two did not definitely agree with this view, while the remaining two did not express any opinion one way or the other. This point was not raised before us by the Advocate- General for Madras, who appeared in support of the appeal, nor by any of the other (1) (1954] S.C.R. 587 counsel appearing in this case. The learned Attorney. General himself stated candidly that he was not prepared to support the view taken by the late Chief Justice as mentioned above, and he only raised the. point to get an authoritative pronouncement upon it by the court. In our opinion, it would not be proper to express any final opinion upon the point in the present case when we had not the advantage of any arguments addressed to us upon it. We would prefer to proceed, as this court has proceeded all along, in dealing with similar cases in the past, on the footing that article 19(1) (f) applies equally to concrete as well as abstract rights of property. ", "We now come to article 25 which, as its language indicates, secures to every person, subject to public order, health and morality, a freedom not only to entertain such religious belief, as may be approved of by his judgment and conscience, but also to exhibit his belief in such outward acts as he thinks proper and to propagate or disseminate his ideas for the edification of others. A question is raised as to whether the word \"persons\" here means individuals only or includes corporate bodies as well. The question, in our opinion, is not at all relevant for our present purpose. A is certainly not a corporate body; he is the head of a spiritual fraternity and by virtue of his office has to perform the duties of a religious teacher. it is his duty to practise and propagate the religious tenets, of which he is an adherent and if any provision of law prevents him from propagating his doctrines, that would certainly affect the religious freedom which is guaranteed to every person under article 25. Institutions as such cannot practise or propagate religion; it can be done only by individual persons and whether these person propagate their personal views or the tenets for which the institution stands is really immaterial for purposes. of article 25. It is the propagation of belief that is protected, no matter whether the propagation takes place in a church or monastery, or in a temple or parlour meeting. As regards article 26 , the first question is, what is the precise meaning or connotation of the expression \"religious denomination\" and whether a could come within this expression. The word \"denomination\" has been defined in to mean 'Ca collection of individuals classed together under the same name: a religious sect or body having a common faith and Organisation and designated by a distinctive name. It is well known that the practice of setting up as centres of the logical teaching was started by and was followed by various teachers since then. After , came a galaxy of religious teachers and philosophers who founded the different sects and sub-sects of the Hindu religion that we find in India at the present day. Each one of such sects or sub-sects can certainly be balled a religious denomination, as it is designated by a distinctive name,-in many cases it is the name of the founder,-and has a common faith and common spiritual organization. The followers of , who are known by the name of , undoubtedly constitute a religious denomination; and so do the followers of and other religious teachers. It is a fact well established by tradition that the eight were founded by himself and the trustees and the beneficiaries of these profess to be followers of that teacher. has found that the in question is in charge of the Sivalli Brahmins who constitute a section of the followers of . As article 26 contemplates not merely a religious denomination but also a section thereof, the or the spiritual fraternity represented by it can legitimately come within the purview of this article. ", "The other thing that remains to be considered in regard to article 26 is, what is the scope of clause (b) of the article which speaks of management \" of its own affairs in matters of religion ?\" The language undoubtedly suggests that there could be other affairs of a religious denomination or a section thereof which are not matters of religion and to which the guarantee given by this clause would not apply. The question is, whereas the line to be drawn between what are matters of religion and what are not It will be seen that besides the right to manage its own affairs in matters of religion, which is given by clause ", "(b), the next two clauses of article 26 guarantee to a religious denomination the right to acquire and own property and to administer such property in accordance with law. The administration of its property by a religious denomination has thus been placed on a different footing from the right to manage its own affairs in matters of religion. The latter is a fundamental right which no legislature can take away, whereas the former can be regulated by laws which the legislature can validly impose. It is clear, therefore, that questions merely relating to administration of properties belonging to a religious group or institution are not matters of religion to which clause (b) of the article applies. What then are matters of religion ? The word \"religion \" has not been defined in the Constitution and it is a term which is hardly susceptible of any rigid definition. In an American case(1), it has been said \" that the term religion has reference to one's views of his relation to his Creator and to the obligations they impose of reverence for His Being and character and of obedience to His will. It is often confounded with cultus of form or worship of a particular sect, but is distinguishable from the latter.\" We do not think that the above definition can be regarded as either precise or adequate. Articles 25 and 26 of our Constitution are based for the most part upon article 44(2) of the Constitution of Eire and we have great doubt whether a definition of \"religion\" as given above could have been in the minds of our Constitution-makers when they framed the Constitution. Religion is certainly a matter of faith with individuals or communities and it is not necessarily theistic. There are well known religions in India like Buddhism and Jainism which do not believe in God or in any Intelligent First Cause. A religion undoubtedly has its basis in a system of beliefs or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it would not be correct to say that religion is nothing else, but a (1) Vide v. 133 U.S 333 at 342. ", "1024 ", "doctrine or belief. A religion may not only lay down a code of ethical rules for its followers to accept, it might prescribe rituals and observances, ceremonies and modes of worship which are regarded as integral parts of religion, and these forms and observances might extend even to matters of food and dress. ", "The guarantee under our Constitution not only protects the freedom of religious opinion but it protects also acts done in pursuance of a religion and this is made clear by the use of the expression \" practice of religion \" in article 25. of while dealing with the provision of section 116 of the Australian Constitution which inter alia forbids the to prohibit the \"free exercise of any religion\" made the following weighty observations(1) : \" It is sometimes suggested in discussions on the subject of freedom of religion that, though the civil Government should not interfere with religious opinion&, it nevertheless may deal as it pleases with any acts which are done in pursuance of religious belief without infringing the principle of freedom of religion. It appears to me to be difficult to maintain this distinction as relevant to the interpretation of section 116 . The section refers in express terms to the exercise of religion, and therefore it is intended to protect from the operation of any laws acts which are done in the exercise of religion. Thus the section goes far beyond protecting liberty of opinion. It protects also acts. done in pursuance of religious belief as part of religion.\" These observations apply fully to the protection of religion as guaranteed by the Indian Constitution. Restrictions by the upon free exercise of religion are permitted both under articles 25 and 26 on grounds of public order,. morality and health. Clause (2)(a) of article 25 reserves the right of the to regulate or restrict any economic, financial, political and other secular activities which may be associated with religious practice and there is a further right given to the by sub-clause (b) under which the can (1) Vide Adelaide Company V. The 67 C.L.R. 116, 127 legislate for social welfare and reform even though by so doing it might interfere with religious practices. The learned Attorney-General lays stress upon clause (2)(a) of the article and his contention is that all secular activities, which may be associated with religion but do not really constitute an essential part of it, are amenable to regulation. ", "The contention formulated in such broad terms cannot, we think, be supported. In the first place, what constitutes the essential part of a religion is primarily to be ascertained with reference to the doctrines of that religion itself. If the tenets of any religious sect of the Hindus prescribe that offerings of food should be given to the idol at particular hours of the day, that periodical ceremonies should be performed in a certain way at certain periods of the year or that there should be daily recital of sacred texts or ablations to the sacred fire, all these would be regarded as parts of religion and the mere fact that they involve expenditure of money or employment of priests and servants or the use of marketable commodities would not make them secular activities partaking of a commercial or economic character; all of them are religious. practices and should be regarded as matters of religion within the meaning of article 26(b). What article 25(2)(a) contemplates is not regulation by the of religious practices as such, the freedom of which is guaranteed by the Constitution except when they run counter to public order, health and morality, but regulation of activities which are economic, commercial or political in their character though they are associated with religious practices. We may refer in this connection to a few American and Australian cases, all of which arose out of the activities of persons connected with the religious association known as \".\" This association of persons loosely organised throughout Australia, U.S.A. and other countries regard the literal interpretation of the Bible as fundamental to proper religious beliefs. This belief in the supreme Authority of the Bible colours many of their political ideas. They refuse to take oath of allegiance to the king or other Constituted human authority and even to show respect to the national flag, and they decry all wars between nations and all kinds of war activities. In 1941 a company of \" \" incorporated in Australia commenced proclaiming and teaching matters which were prejudicial to war activities and the defence of the and steps were taken against them under the National Security Regulations of the . The legality of the action of the was questioned by means of a writ petition before and held that the action of the was justified and that section 116 , which guaranteed freedom of religion under the Australian Constitution, was not in any way infringed by the National Security Regulations(1). These were undoubtedly political activities though arising out of religious belief entertained by a particular community. In such cases, as Chief Justice pointed out, the provision for protection of religion was not an absolute protection to be interpreted and applied independently of other provisions of the Constitution. These privileges must be reconciled with the right of the to employ the sovereign power to ensure peace, security and orderly living without which constitutional guarantee of civil liberty would be a mockery. ", "The courts of America were at one time greatly agitated over the question of legality of a State regulation which required the pupils in public schools on pain of compulsion to participate in a daily ceremony of saluting the national flag, while reciting in unison, a pledge of allegiance to it in a certain set formula. The question arose in , , etc. v. ). In that case two small children, and , were expelled from the public school of Minersville, Pennsylvania, for refusing to salute the national flag as part of the daily exercise. The family were affiliated with \"Jehova's Witnesses\" and had been (1) v. The , 67 C.L.R., 116, 127. ", "(2) 310 U.S. 586. ", "1027 ", "brought up conscientiously to believe that such a gesture of respect for the flag was forbidden by the scripture. The point for decision by was whether the requirement of participation in such a ceremony exacted from a child, who refused upon sincere religious ground, infringed the liberty of religion guaranteed by the First and the Fourteenth Amendments ? The court held by a majority that it did not and that it was within the province of the legislature and the school authorities to adopt appropriate means to evoke and foster a sentiment of. national unity amongst the children in public schools. , however, changed their views on this identical point in the later case of v. Barnette(1). There it was held overruling the earlier decision referred to above that the action of a in making it compulsory for children in public schools to salute the flag and pledge allegiance constituted a violation of the First and the Fourteenth Amendments. This difference in judicial opinion brings out forcibly the difficult task which a court has to perform in cases of this type where the freedom or religious convictions genuinely entertained by men come into conflict with the proper political attitude which is expected from citizens in matters of unity and solidarity of the organization. As regards commercial activities, which are prompted by religious beliefs, we can cite the case of v. Pennsylvania(2). Here also the petitioners were \"Jehova's Witnesses\" and they went about from door to door in the city of Jeannette distributing literature and soliciting people to purchase certain religious books and pamphlets, all published by . A municipal ordinance required religious colporteurs to pay a licence tax as a condition to the pursuit of their activities. The petitioners were convicted and fined for violation of the ordinance. It was held that the ordinance in question was invalid under the Federal Constitution as constituting a denial of freedom of speech, press and religion; ", "(1) 319 U.S. 624. ", "(2) 319 U.S. 105. ", "1028 ", "and it was held further that upon the facts of the case it could not be said that \"'s Witnesses\" were engaged in a commercial rather than in a religious venture. Here again, it may be pointed out that a contrary view was taken only a few years before in the case of v. ), and it was held that a city ordinance, which required that licence be procured and taxes paid for the business of selling books and pamphlets on the streets from house to house, was applicable to a member of a religious Organisation who was engaged in selling the printed propaganda, pamphlets without having complied with the provisions of the ordinance. ", "It is to be noted that both in the American as well as in the Australian Constitutions the. right to freedom of religion has been declared in unrestricted terms with. out any limitation whatsoever. Limitations, therefore, have been introduced by courts of law in these countries on grounds of morality, order and social protection. An adjustment of the competing demands of the interests of Government and constitutional liberties is always a delicate and a difficult task and that is why we find difference of judicial opinion to such an extent in cases decided by the American courts where questions of religious freedom were involved. Our Constitution-makers, however, have embodied the limitations which have been evolved by judicial pronouncements in America or Australia in the Constitution itself and the language of articles 25 and 26 is sufficiently clear to enable us to determine without the aid of foreign authorities as to what matters come within the purview of religion and what do not. As we have already indicated, freedom of religion in our Constitution is not confined to religious beliefs only; it extends to religious practices as well subject to the restrictions which the Constitution itself has laid down. Under article 26(b ), therefore, a religious denomination .or organization enjoys complete autonomy in the matter of deciding as to what rites and ceremonies are essential according to the tenets of the religion they hold and no outside authority has any jurisdiction to (1) 316 U.S. 584. ", " ", "interfere with their decision in such matters. Of course, the scale of expenses to be incurred in connection with these religious observances would be a matter of administration of property belonging to the religious denomination and can be controlled by secular authorities in accordance with any law laid down by a competent legislature; for it could not be the injunction, of any religion to destroy the institution and its endowments by incurring wasteful expenditure on rites and ceremonies. It should be noticed, however, that under article 26(d ), it is the fundamental right of a religious denomination or its representative to administer its properties in accordance with law; and the law, therefore, must leave the right of administration to the religious denomination itself subject to such restrictions and regulations as it might choose to impose. A law which takes away the right of administration from the hands of a religious denomination altogether and vests it in any other authority would amount to a violation of the right guaranteed under clause (d) of article 26. Having thus disposed of the general contentions that were raised in this appeal, we will proceed now to examine the specific grounds that have been urged by the parties before us in regard to the decision of so far as it declared several sections of the new Act to be ultra vires the Constitution by reason of their conflicting with the fundamental rights of the respondent. The concluding portion of the judgment of where the learned Judges summed up their decision on this point stands as follows: ", "\" To sum up, we hold that the following sections are ultra vires the State Legislature in so far as they relate to this Math: and what we say will also equally apply to other Maths of a similar nature. The sections of the new Act are: sections 18 , 209 21 , 25(4) , section 26 (to the extent section 25(4) is made applicable), section 28 (though it sounds innocuous, it is liable to abuse as we have already pointed out earlier in the judgment), section 29 , clause- (2) of section 30 , section 31 , section 39(2) , section 42 , section 53 (because courts have ample powers to meet these contingencies), , section 54 , clause (2) of section 55 , section 56 , clause (3) of section 58 , sections to 69 in Chapter VI, clauses (2), (3) and (4) of section 70 , section 76 , section 89 and section 99 (to the extent it gives the virtually complete control over the Matadhipati and Maths). It may be pointed out at the outset that the learned Judges were not, right in including sections 18 , 39(2) and 42 in this list, as these sections are not applicable to Maths under the Act itself This position has not been disputed by Mr. , who appears for the respondent. ", " Section 20 of the Act describes the powers of the Commissioner in respect to religious endowments and they include power to pass any orders that may be deemed necessary to ensure that such endowments are properly administered and that their income is duly appropriated for the purposes for which they were founded. Having regard to the fact that the occupies the position of a trustee with regard to the , which is a public institution, some amount of control or supervision over the due administration of the endowments and due appropriation of their funds is certainly necessary in the interest of the public and we do not think that the provision of this section by itself offends any fundamental right of the . We do not agree with that the result of this provision would be to reduce the to the position of a servant. No doubt the Commissioner is invested, with powers to pass orders, but orders can be passed only for the purposes specified in the section and not for interference with the rights of the as are sanctioned by usage or for lowering his position as the spiritual head of the institution. The saving provision contained in section 91 of the Act makes the position quite clear. An apprehension that the powers conferred by this section may be abused in individual cases does not make the provision itself bad or invalid in law. ", "We agree, however, with in the view taken by it about section 21 . This section empowers the Commissioner and his subordinate officers and also persons authorised by them to enter the premises of any religious institution or place of worship for the purpose of exercising any power conferred, or any duty imposed by or under the Act. It is well known that there could be no such thing as an unregulated and unrestricted right of entry in a public temple or other religious institution, for persons who are not connected with the spiritual functions thereof. It is a traditional custom universally observed not to allow access to any outsider to the particularly sacred parts of a temple as for example, the place where the deity is located. There are also fixed hours of worship and rest for the idol when no disturbance by any member of the public is allowed. Section 21 , it is to be noted, does not confine the right of entry to the outer portion of the premises; it does not even exclude the inner sanctuary the Holy of Holies\" as it is said, the sanctity of which is zealously preserved. It does not say that the entry may be made after due notice to the head. of. the institution and at such hours which would not interfere with the due observance of the rites and ceremonies in the institution. We think that as the section stands, it interferes with the fundamental rights of the and the denomination of which he is head guaranteed under articles 25 and 26 of the Constitution. Our attention has been drawn in. this connection to section 91 . of the Act which, it is said, provides a sufficient -safeguard against any abuse of power under section 2 1 . We cannot agree with this contention. Clause (a ) of section 91 excepts from the saving clause all express provisions of the Act within which the provision of section 21 would have to be included. Clause (b) again does not say anything about custom or usage obtaining in an institution and it does not indicate by whom and in what manner the question of interference with the, religious and spiritual functions of the would be decided in case of any dispute arising regarding it. In our opinion, section 21 has been rightly held to be invalid. Section 23 imposes a duty upon the trustees to obey all lawful orders issued be the Commissioner or any subordinate authority under the, provisions of the Act. No exception can be taken to the section if those provisions of the Act, which offend against the fund&mental rights of the respondent, are left out of account as being invalid. No body can make a grievance if he .is directed to obey orders issued in pursuance of valid legal authority. The same reason would, in our opinion, apply to section 24 . It may be mentioned here that sections 23 and 24 have not been specifically mentioned in the concluding portion of the judgment of set out above, though they have been attacked by the learned Judges in course of their discussion. ", "As regards section 25 , has taken exception only to clause (4) of the section. If the preparation of registers for religious institutions is not wrong and does not affect the fundamental rights of the ,one fails to see how the direction for addition to or alteration of entries in such registers, which clause (4) contemplates and which will be necessary as a result of enquiries made under clause (3), can, in any sense, be held to be invalid as infringing the fundamental rights of the . The enquiry that is contemplated by clauses (3) and (4) is an enquiry into the actual state of affairs, and the whole object of the section is to keep an accurate record of the particulars specified in it. We are unable, therefore, to agree with the view expressed by the learned Judges. For the same reasons, section 26 , which provides for annual verification of the registers, cannot be held to be bad. According to section 28 is itself innocuous. The mere possibility of its being abused is no ground for holding it to be invalid. As all endowed properties are. ordinarily inalienable, we fail to see why the restrictions placed by Section 29 upon alienation of endowed properties should be considered bad. In our opinion, the provision of clause (2) of section 29 , which enables the Commissioner to impose conditions when he grants sanction to alienation of endowed property, is perfectly reasonable and to that no exception can be taken. ", "The provision of section 30(2) appears to us to be somewhat obscure. Clause (1) of the section enables a trustee to incur expenditure out of the funds in his charge after making adequate provision . for the purposes referred to in section 70(2) , for making arrangements for the health, safety and convenience of disciples, pilgrims, etc. Clause (2), however, says that in incurring expenditure under clause (1), the trustee shall be guided by such general or special instruction as the Commissioner or might give in that connection. If the trustee is to be guided but not fettered by such directions, possibly no objection can be taken to this clause; but if he is bound to carry out such instructions, we do think that it constitutes an encroachment on his right. Under the law, as it stands, the has large powers of disposal over the surplus income and the only restriction is that he cannot spend anything out of it for his personal use unconnected with the dignity of his ,office. But as the purposes specified in sub-clauses (a) and (b) of section 30(1) are beneficial to the institution there seems to be no reason why the authority vested in the to spend the surplus income for such purposes should be taken away from-him and he should be compelled to act in such matters under the instructions of the Government officers. We think that this is an unreasonable restriction on the 's right of property which is blended with his office. ", "The same reason applies in our opnion to section 31 of the Act, the meaning of -which also is far from clear. If after making adequate provision for the purposes referred, to in section 70(2) and for, the arrangements mentioned in section 30(2) there is still a surplus left with the trustee, section 31 enables him to spend it for the purposes specified in section 59(1) with the previous sanction of the Deputy Commissioner. One of the purposes mentioned in section 59(1) is the propagation of the religious tenents of the institution, and it, is not understood why sanction of the Deputy Commissioner should be necessary for spending the surplus, income for the propagation of the religious tenets of the order which is one of the primary duties of a to discharge. The next thing that strikes one is, whether sanction is necessary if the trustee wants to spend the money for purposes other than those specified in section 59(1) ? If the answer is in the nega- tive, the whole object of the section becomes meaningless. If, on the other hand, the implication of the section is that the surplus can be spent only for the purposes specified in section 59(1) and that too with the permission of the Deputy Commissioner, it undoubtedly places a burdensome restriction upon the property rights of the which are sanctioned by usage and which would have the effect of impairing his dignity and efficiency as the head of the institution. We think that sections 30(2) and 31 have been rightly held to be invalid by . Sections 39 and 42 , as said already, are not applicable to and hence can be left out of consideration,., Section 53 has . been condemned by merely on the ground that the court has ample jurisdiction to provide for the contingencies that this section is intended to meet. But that surely cannot prevent a competent legislature from legislating on the topic, provided it can do so without violating\" any of the fundamental rights guaranteed by the Constitution. We are unable to agree with on this point. There seems to be nothing wrong or unreasonable in section 54 of the Act which provides for fixing the standard, scale of expenditure. The proposals for this purpose would have to be submitted by the trustee ; they are then to be published and suggestions invited from persons having interest in the amendment. The Commissioner is to scrutinise the original proposals and the . suggestions received and if in his opinion a modification of the scale is necessary, he has to submit a report to the , whose decision will be final. This we consider to be -quite a reasonable and salutary provision. ", " Section 55 deals with a 's power over Pathakanikas or personal gifts. Ordinarily a has absolute power of disposal over such gifts, though if he dies without making any disposition, it is reckoned as the property of the and goes to the succeeding . The first clause of section 55 lays down that such Pathakanikas shall be spent only for the purposes of the . This is an unwarranted restriction on the property right of the . It may be that according to customs prevailing in a particular institution, such personal gifts are regarded as gifts to the institution itself and the receives them only as the representative of the institution; but the general rule is otherwise. As section 55(1) does not say that this rule will apply only when there is a custom of that nature in a particular institution, we must say that the provision in this unrestricted form is an unreasonable encroachment upon the, fundamental right of the . The same objection can be raised against clause (2) of the section; for if the Pathakanikas constitute the property of a , there is no justification for compelling him to keep accounts of the receipts and expenditure of such personal gifts. As said already, if the dies without disposing of these personal gifts, they may form part of the assets of the , but that is no reason for -restricting the powers of the over these gifts so long as he is alive. Section 56 has been rightly invalidated by ., It makes provision of an extremely drastic ,character. Power has been given to the Commissioner to require the trustee to appoint a manager for administration of the secular affairs of the institution and in case of default, the Commissioner can make the appointment. himself. The manager thus appointed -though nominally a servant of the trustee, has practically to do everything according to the directions of .the Commissioner and his subordinates. It is to be noted that this power can be exercised at the mere option of the Commissioner without, any justifying necessity whatsoever and no pre-requisites like mis- management of property or maladministration of trust funds are necessary to enable the trustee to exercise such drastic power. It is true that the section contemplates the appointment of a manager for administration of the secular affairs of this institution. But no rigid demarcation could be made as we have already said between the spiritual duties of the and his personal interest in the trust property. The effect of the section really is that the Commissioner is at liberty at any moment he chooses to deprive the of his right to administer the trust property even if there is no negligence or maladministration on his part. Such restriction would be opposed to the provision of article 26(d) of the Constitution. It would cripple his authority as altogether and reduce his position to that of an ordinary priest or paid servant. ", "We find nothing wrong in section 58 of the Act which relates to the framing of the scheme by the Deputy Commissioner. It is true that it is a officer and not the court who is given the power to settle the scheme, but we think that sample safeguards have been provided in the Act to rectify any error or unjust decision made by the Deputy Commissioner. Section 61 provides for an appeal to the Commissioner, against the order of the Deputy Commissioner and -there is a right of suit given to a party who is aggrieved by the order of the Commissioner ,with a further right of appeal to . ", "The objection urged against the provision of clause (3)(b) of section 58 does not appear to us to be of The executive officer mentioned in much substance that clause could be nothing else but a manager of the properties of the , ad the cannot possibly be empowered to exercise the functions of the adhipati himself. In any event, the trustee would have his remedy against such order of the Deputy Commissioner by way of appeal to the Commissioner and also by way of suit as laid down in sections 61 and 62 . Section 59 simply provides a scheme for the application of the cy pres doctrine in case the object of the trust fails either from the inception or by reason of subsequent eve*. Here again the only complaint that is raised is, that such order could be made by the Deputy Commissioner. -We think that this objection has not much substance. In the first place, the various objects on, which the trust funds could be spent are laid down in the section itself and the jurisdiction of the Deputy Commissioner is only to make a choice out of the several heads-. ", "1037 ", "Further an appeal has been provided from an order of the Deputy Commissioner under this section to the Commissioner. We, therefore, cannot agree with that sections 58 and 59 of the Act are invalid. ", "Chapter VI of the Act, which contains sections 63 to 69 , relates to notification of religious institutions The provisions are extremely drastic in, their character and the worst feature of it is that no access is allowed to the court to set aside an order of notification. The Advocate- General for Madras frankly stated that he could not support the legality of these provisions. We hold therefore, in agreement with that these sections should. be hold to be void. ", " Section 70 relates to the, budget of religious institu- tions. Objection has been taken- only to clause (3.) which empowers the Commissioner and to make any additions to or alterations in the budget as they deem fit. A budget is indispensable in all public institutions and we do not think that it is per be unreasonable to provide for the budget of a religious institution being prepared under the supervision of the Commissioner or . It is to be noted that if the order is made by under clause (3), clause (4) provides an appeal against it to the Deputy Commissioner. ", " Section 89 provides for penalties for refusal by the trustee to comply with the provisions of the Act. If the objectionable portions of the Act are eliminated, the portion that remains will be perfectly valid and for violation of these valid provisions, penalties can legiti- mately be -provided. Section 99 vests an overall revisional power in the . This, in our opinion, is beneficial to the trustee, for he will have an opportunity to approach, the in case of an irregularity, error or omission made by the Commissioner or any other subordinate officer. ", "The only other point that requires consideration is the constitutional validity of section 76 of the Act which runs as follows: ", "\"76. (1) In respect of the services rendered by the Government and their officers, every religious institution shall, from the income derived by it, pay to the Government annually such contribution not exceeding five per centum of its income as may be prescribed. ", "(2)Every religious institution, the annual income of which for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under sub- section (1), is hot less than one thousand rupees, shall pay to the Government annually, for meeting the cost of auditing its accounts, such further sum not exceeding one and a half per centum of its income as the Commissioner may determine. (3)The annual payments referred to in sub-sections (1) and (2) shall be made, notwithstanding anything to the contrary contained in any scheme settled or deemed to be settled under this Act for the religious institution concerned. ", "(4)The Government shall pay the salaries, allowances, pensions and other beneficial remuneration of the Commissioner, Deputy Commissioners, Assistant Commissioners and other officers and servants (other than executive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred for such purposes, including the expenses of Area Committees and the cost of auditing the accounts of religious institutions.\" ", "Thus the section authorises the levy of an annual contribution on all religious institutions, the maximum of which is fixed at 5 per cent. of the income derived by them. The - is to frame rules for the purposes of fixing rates within the permissible maximums and the section expressly states that the levy is in respect of the I services rendered by the and its officers. The validity of the provision has been attacked on a two-fold ground: the first is, that the contribution is really a tax and as such it was beyond the legislative competence of to enact such provision. The other is, that the contribution being a tax or imposition, the proceeds of which are specifically appropriated for the maintenance of a particular religion or religious denomination, it comes within the mischief of article 27 of the Constitution and is hence void. ", " ", "So far as the first ground is concerned, it is not disputed that the legislation in the present case is covered by -entries 10 and 28 of List III in Schedule VII of the Constitution. If the contribution payable under section 76 of the Act is a \"fee\", it may come under entry 47 of the Concurrent List which deals with \" fees\" in respect of any of the matters included in that list. On the other hand, if it is a tax, as this particular tax has not been provided for in any specific entry in any of the three lists, it could come only under entry 97 of List I or article 248(1) of the Constitution and in either view alone would be competent to legislate upon it. On behalf of the appellant, the contention raised is that the contribution levied is a fee and not a tax and the learned Attorney General, who appeared for as intervener in this as well as in the other connected appeals made a strenuous attempt to support this, position. The point is certainly not free from doubt and requires careful consideration. ", "The learned Attorney-General has argued in the first place that our Constitution makes a clear distinction ,between taxes and fees. It is true, as has pointed out, that there are a number of entries in List I of the Seventh Schedule which relate to taxes and duties of various sorts; whereas the last entry, namely entry 96, speaks of \"fees\" in respect of any of the matters dealt with in the list. Extractly the same is with regard to entries 46 to 62 in List II all of which relate to taxes and here again the last entry deals only with \"fees\" leviable in respect of the different matters specified in the list. It appears that: articles II 0 and 1 19 of the Constitution which deal with \"Money Bills\" lay down expressly that a bill will not be deemed to be a \"Money Bill\" by reason only that it provides for the imposition of fines......... or for the demand or payment of fees for licences or fees for services rendered, whereas a bill dealing with imposition or regulation. of a tax will always be a Money Bill. Article 277 also mentions taxes, cesses and fees separately. It is not clear, how- ever, whether the word \"tax\" as used in article 265 has not been used in the wider sense as including all other impositions like ceases and fees; and that at least seems to he implication of clause (28) of article 366 which defines taxation as including the imposition of any tax or impost, whether general, local or special. It seems to us that though levying of fees is only a particular form of the exercise of the taxing power of the , our Constitution has placed fees uder a separate category for purposes of legislation and at the end of each one of the three legislative lists, it has given a power to the particular legislature to legislate on the imposition of fees in respect to every one of the items dealt with in the list itself. Some idea as to what fees are may be gathered from clause (2) of articles 110 and 119 referred to above which speak of fees for licences and for services rendered. The question for our consideration really is, what are the indicia or special characteristics that distinguish a fee from a tax proper ? On this point we have been referred to several authorities by the learned counsel appearing for the different parties including opinions expressed by writers of recognised treatises on public finance. ", "A neat definition of what \"tax\" means has been given by of ,in v. ). A tax\", according to the learned Chief Justice, \"is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered\". This definition brings out, in our opinion, the esential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. It is said that the essence of taxation is compulsion, that is to say, it is imposed under statutory power without the taxpayer's consent and the payment is enforced by law(2). The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax.This is expressed by saying that the levy of tax is for the purposes of general revenue, which when collected revenues of the . As the (1) 60 C.L.R. 263, 276. ", "(2) Vide Lower Mainland Dairy v. Crystal Dairy Ltd. [1933] A.C. 168. ", "1041 ", "object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority(1). Another feature of taxation it; that as it is a part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay. Coming now to fees, a 'fee' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the vary abilities of different recipients to pay(2). These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. ", "As regards the distinction between a tax and a fee, it, is argued in the first place on behalf of the respondent that a fee is something voluntary which a person has got to pay if he -wants certain' services from the Government; but there is no obligation on his part to seek such services and if he does not want the services, I he can avoid the obligation. The example given is of a licence fee. If a man wants a licence that is entirely his own choice and then only he has to pay the fees, but not otherwise. We think that a careful examination will reveal that the element of compulsion or coerciveness is present in all kinds of imposition. though in different degrees and that it is not totally absent in fees. This, therefore, cannot be made the sole or even a material criterion for distinguishing a tax from fees. It is difficult, we think, to conceive of a tax except it be something like a poll tax, the incidence of which falls on all persons within a State. The house tax has to be paid only by those who own houses, the land tax by those who possess lands, municipal taxes or rates will fall on those who have properties within a (1) see on \"Science of Public Finance\", Vol. 1, P. 203. ", "(2) Vide Lutz on \"Public Finance\" p. 215. ", "1042 ", "municipality. Persons who do not have houses,land or Properties within municipalities, would not have to pay these taxes, but nevertheless these impositions come within the category of taxes and nobody can say that it is a choice of these people to own lands or houses or specified kinds of properties so that there is no compulsion on them to pay taxes at all. Compulsion lies in the fact that payment is enforceable by law against a man in spite of his unwillingness or want of consent ; and this element is present in taxes as well as in fees. Of course, in some cases whether a man would come. within the category Of a service receiver may- be a matter of his choice, but that by itself would not constitute a major test which can be taken as the criterion of this species of imposition. The distinction between a tax and a fee lies primarily in the fact that a tax is levied he a part of a common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special capacity, although the special advan- tage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest(1). Public interest seems to be at the basis of all impositions but in a fee it is some special benefit which the individual receives. As says it is the, special benefit accruing to the indivitual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it; exists at all is an incidental result of action(2). ", "If, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be co-related to the expenses incurred by in rendering the services. As indicated in article 1 10 of the Constitution ordinarily there are two classes of cases where imposes fees upon persons. In the first class of cases, simply grants a permission or privilege to a person to do something, which otherwise that person would not be competent to do and extracts fees either (1) on \"Science of Public Finance\" Vol. 1, P. 202 (2) Essays on Taxation, P. 408. ", "1043 ", "heavy or moderate from that person in return for the privilege that is conferred.; A most common illustration of this type of cases is furnished. by the licence fees for motor vehicles. Here the costs incurred by the in maintaining an office or bureau for the granting of licences may be very small and the amount of imposition that is levied is based really not upon the costs incur. red by the but upon the benefit that the individual receives. In such cases, according to all the writers on public finance, the tax element is predominant(1), and if the money paid by licence holders goes for the upkeep of roads and other matters of general public utility, the licence fee cannot but be regarded as a tax. ", "In the other class of cases,- the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered. If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public,, it could be counted as fees and not a tax. There is really no generic difference between the tax and fees and as said by , the taxing power of a State may manifest itself in three different forms known respectively as special assessments,fees and taxes(2). . Our Constitution has, for legislative purposes, made a distinction between a tax and a fee and while there are various entries in the legislative lists with regard to various forms of taxes there is an entry at the end of each one of the three lists as regards fees which could be levied in respect of any of the matters that is included in it. The implication seems to be that fees have special reference to governmental action undertaken in respect to any of these matters. ", "Section 76 of the Madras Act speaks definitely of the contribution being levied in respect rendered by the Government; so far it has the appearance of fees. It is true that religious institutions do not want these services to be rendered to them and it (1) Vide Spligman's Essays on Taxation, p. 409 (2) lbid, P. 406, may be that they do not consider the interference to be a benefit at all. We agree, however, with the learned Attorney-General that, in the present day concept of a , it cannot be said that services could be rendered by the only at the request of those who require these ", "-services. lf in the larger,interest of the public, a considers it desirable that some special service should be done for certain people, the people must accept these services, whether willing or not(1) It may be noticed, however, that the contribution that has been levied under section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution. Further the institutions,, which come under the lower income group and have income less than Rs. 1,000 annually, are excluded from the liability to pay the additional charges under clause (2) of the section. These are undoubtedly some of the characteristics of a 'tax' and the imposition bears a close analogy to income-tax. But the material fact which negatives the theory of fees in the present case is that the money raised by levy of the contribution is not ear-marked or specified for defraying the expenses that the has to incur in performing the services. -All the collections go to the consolidated fund of the and all the expenses have to be met not out of these collections but out of the general revenues by a proper method of appropriation as is done in case of other expenses. That in itself might not be conclusive, but in this case there is total absences of any co-relation between the expenses incurred by the and the amount raised by contribution under the provision of section 76 and in these circumstances the theory of a return or counter-payment or quid pro quo cannot have any possible application to this case. In our opinion, therefore, was right in holding that the contribution levied under section 76 is a tax and not a fee and consequently it was beyond the power of the Legislature to enact this provision. ", "(1) Vide Findlay Shirras on \"Science of Public Finance\" Vol. 1, P. 202. ", "1045 ", "In view of our decision on this point, the other ground hardly requires consideration. We will indicate, however, very briefly our opinion on the second point raised. The first contention, which has been raised by Mr. in reference to article 27 of the Constitution is that the word \"taxes\", as used therein, is not confined to taxes proper but is inclusive of all other impositions like cesses, fees, etc. We do not think it necessary to decide this point in the present case, for in our opinion on the facts of the present case, the imposition, although it is a tax, does not come within the purview of the latter part of the article at all. What is forbidden by the article is the specific appropriation of the proceeds of any tax in payment of expenses for the promotion or maintenance of any particular religion or religious denomination. The reason underlying this provision is obvious. Ours being a secular State and there being freedom of religion guaranteed by the Constitution, both to individuals and to groups, it is against the policy of the ,Constitution to pay out of public funds any money for the promotion or maintenance of any particular religion or religious denomination. But the object of the contribution under section 76 of the Madras Act is not the fostering or preservation of the Hindu religion or any denomination within it. The purpose is to see that religious trusts and institutions,, wherever they exist, are properly administered. It is a secular administration of the religious legislature seeks to control and the in the Act, is to ensure that the institutions that the object, as enunciated endowments attached to the religious institutions are properly administered and their income is duly appropriated for the purposes for which they were founded or exist. There is no qustion of favouring any particular religion or religious denomination in such cases . In our opinion, article 27 of the Constitution is not attracted to the facts of the present case.The result, therefore, is that in our opinion sections 21 , 30(2) , 31 , 55 , 56 and 63 to 69 are the only sections which should be declared invalid as conflicting with the fundamental rights of the respondent as adhipati of the in question and section 76(1) is void as beyond the legislative competence of . The rest of the Act is to be regarded as valid. The decision of will be modified to this extent, but as the judgment of is affirmed on its merits, the appeal will stand dismissed with costs to the respondent. ", "Appeal dismissed."], "relevant_candidates": ["0000242776", "0000973363", "0000987299", "0001012363", "0001652416"]} {"id": "0001432437", "text": [", J. ", "1. This appeal is brought by leave of , from a judgment of that Court (, and .) dated August 31, 1943, dismissing eight appeals by the against orders and judgments of a divisional bench of three Judges ( and Sen ., J., dissenting) of at Fort William in Bengal, dated June 3, 1943. ", "2. The orders and judgments of were made upon applications under Section 491 of the Criminal Procedure Code, 1898, for directions in the nature of habeas corpus on behalf of nine persons, detained in various jails in pursuance of orders made under Rule 26 of the Defence of India Rules, 1939, on various dates from October 24, 1940, to March 8, 1943. These orders and judgments directed the release of the applicants. Of the nine original applicants eight are called as respondents in the present appeal, but their Lordships were informed that two of the respondents had been released, namely, , respondent No. 4, on a date before the judgment of , and , respondent No. 2, after the judgment of . The remaining six respondents, with whom this appeal is now concerned, are under detention by virtue of orders made under Bengal Regulation III of 1818. ", "3. Having regard to the known and well-settled principle of the English law that a discharge, or an order directing discharge, under a writ of habeas corpus, is final and not subject to appeal, and the importance of preserving safeguards of the liberty of the subject, their Lordships asked for arguments of counsel on the competency, in the present case, of the appeals by the from to , which might equally affect the competency of this further appeal to this . It is sufficient to refer to the decision of in v. (1890) 15 App. Cas. 506 where the law of England on this matter is fully dealt with. ", "4. In the present case, the appeals have proceeded under Sections 205 and 208 of the Government of India Act, 1935. Section 205 provides as follows:- ", "205. (1) An appeal shall lie to from any judgment, decree or final order of a High 'Court in British India, if certifies that the case involves a substantial question of law as to the interpretation of this Act or any Order in Council made thereunder, and it shall be the duty of every in British India to consider in every case whether or not any such question is involved and of its own motion to give or to withhold a certificate accordingly. ", "(2) Where such a certificate is given, any party in the case may appeal to on the ground that any such question as aforesaid has been wrongly decided, and on any ground on which that party could have appealed without special leave to His Majesty in Council if no such certificate has been given, and, with the leave of , on any other ground, and no direct appeal shall lie to His Majesty in Council, either with or without special leave. ", "On the application of the granted certificates under Section 205(1) for leave to appeal to . After the decision of , leave was given by them under Section 208(b) to appeal to His Majesty in Council. ", "5. Their Lordships have come to the conclusion that, in view of the special terms of Section 205 , the appeals in the present case were competent. ", "6. In v. it was held that the right of appeal given by Section 19 of the Judicature Act, 1873, did not include an appeal against an order of discharge made upon a writ of habeas corpus. Lord says (p. 517): ", "My Lords, I have insisted at some length upon the peculiarities of the procedure, because I think one cannot suppose that the intended to alter all the procedure by mere general words without any specific provision as to the practice under the writ of habeas corpus or the statutes which from time; to time have regulated both its issue and its consequences. My Lords, I do not deny that the words of sect. 19 literally construed are sufficient to comprehend the case of an order of discharge made upon an application for discharge upon a writ of habeas corpus; but it is impossible to contend that the mere fact of a general word being used in a statute precludes all enquiry into the object of the statute or the mischief which it was intended to remedy. ", "In their Lordships' opinion, the condition of the law of habeas corpus in India, and the purpose and express words of Section 205 of the Government of India Act, 1935, afford a contrast to the condition of the English law and the object and general terms of Section 19 of the Judicature Act of 1873. The history of the matter is shortly stated by Sir , then Chief Justice, in his admirable judgment in (1927) I.L.R. 54 Cal. 727 from which the following quotation may be made (p. 749): ", "I proceed therefore to enquire whether according to the law in India as it now stands there is or is not power in to grant the writ of Habeas Corpus at common Jaw independently of Section 491 of the Criminal Procedure Code. Now in 1870 in the case of In the matter of (1870) 6 Ben. L.R. 392 Mr. Justice held that could issue the Habeas Carpus outside the orginal jurisdiction to the Superintendent of the jail at Ali-pore, In 1872 the Code of Criminal Procedure (Act X of 1872) was enacted which gave the right to European British subjects detained in custody whether within the limits of 's original jurisdiction or outside those limits to apply for an order directing the person detaining him to bring him before , in other words for an order under Section 81 in the nature of Habeas Corpus. Section 82 provided that ' Neither s nor any Judge of such shall issue any writ of habeas corpus, mainprise, de homine replegiando, nor any other writ of the like nature beyond the Presidency towns.' This prohibition cannot in my opinion be confined to the case of European British subjects nor has this been contended before us. In 1875, s' Criminal Procedure Act (X of 1875) in Section 148 set out various purposes for which an order in the nature (A Habeas Corpus might be made and it gave power to s to make5 such orders in the case of persons within the limits of their original jurisdiction. It went on to say that 'neither nor any Judge thereof shall hereafter issue any writ of Habeas Corpus for any of the above purposes'. Certain particular matters were excepted, it being stated that nothing in this section applies to a person detained under Bengal Regulation III of 1818 and certain other Regulations. . But it is quite clear that for the purposes provided for by Section 148 , the intention was that relief should be granted under the section arid recourse should not be had to the old prerogative writs... The subsequent history of the matter is shortly this that when the Code of Criminal Procedure was amended in 1882 the Acts of 1872 and 1875 were comprised in Schedule I as enactments repealed by Section 2 'but not so as to restore any jurisdiction or form of procedure not existing or followed' on the 1st January 188S (Act X of 1882). The matter remained very much in the same position until 1923, when a right was given to everybody within the appellate jurisdiction of this Court to make an application under Section 491 of the present Criminal Procedure Code . ", "The question which arises is whether for any of the purposes mentioned in what is now Section 491 , it is open to an applicant still to say that he will make his application independently of that section altogether for the prerogative writ of Habeas Corpus on the civil side of . I observe that it has been stated in certain cases that if there is to be any question of the abolition of this right then the must say so in the most specific terms. Whether that be a correct view in a matter of procedure of this kind need not be discussed for the. has used the most specific terms; and it is plain that the Indian never intended that the in giving relief of this character should for any of the purposes mentioned in Section 491 be at liberty to act under it or under the old procedure. ", "In the recent case of (1939) L.R. 66 I.A. 222: s.c. 41 Bom. L.R. 1119 this judgment was approved by the Board, and it was held that, in cases covered by a 491, the power to issue a common law writ of habeas corpus in British India had been taken away by legislation, and the powers conferred by Section 491 substituted therefor. The present applications were under Section 491 . Under Section 404 of the Criminal Procedure Code no appeal lies from any judgment or order of a criminal Court except as provided for by the Code or by any other law for the time being in force. There is no provision in the Code for an appeal from an order made under Section 491 ; there is no conviction or acquittal in such proceedings, and Section 417 , which taken along with the new Section 411A (2) enacted by Section 2 of the Amending Act of 1943 (Act XXVI of 1943) allows an appeal on behalf of the only from an order of acquittal is equally inapplicable. Accordingly, as regards appeal, the position under the Criminal Procedure Code as to proceedings under Section 491 is in effect the same as the position stated in v. . ", "7. Turning again to Section 205 of the Government of India Act of 1935, their Lordships are clearly of opinion that the section relates to both the civil and criminal jurisdiction of ; the terms of Sub-section (2) of Section 210 appear to put this beyond doubt, and their Lordships agree with the decision of to this effect in v. The Crown F.C.R. 159. Further, the width of the language used is striking, viz. \" any judgment, decree or final order of ,\" and \" it shall be the duty of in British India to consider in every case.\" The purpose of the provision is to confer a right of appeal in every case that involves a substantial question of law as to the interpretation of the Act or any Order in Council made thereunder. The object is clearly to secure uniformity of decision in by the determination of a superior to them all. On the most moderate view of the matter, the securing of that object is at least as important in cases of habeas corpus, in which such questions are very apt to arise, as in other cases. In the absence of an express exception of habeas corpus cases, and having in view the terms and purpose of the section, their Lordships are unable to limit the terms of the section by mere construction so as to exclude these cases from its operation. Accordingly Section 205 of the Act of 1935 provides one of the exceptions referred to in Section 404 of the Criminal Procedure Code. ", "8. Their Lordships are therefore of opinion that the appeals from were competent, and it follows that the appeal to His Majesty in Council was also competent, and they will proceed to deal with the appeal on the merits. ", "9. The present applications under Section 491 of the Criminal Procedure Code were filed on April 24, 1943, two days after the decision of in v. King Emperor F.C.R. 49: S.C. (1943) 46 Bom. L.R. 22 under which it was held\", reversing the decision of refusing to make an order under Section 491 for release of the applicants, that Rule 26 of the Defence of India Rules was ultra vires, and was not warranted by the Defence of India Act, 1939. ", "10. On April 28, 1943, the Governor General made and promulgated Ordinance No. XIV of 1943 under Section 72 of the Ninth Schedule of the Government of India Act, 1935. By Section 2 of the Ordinance a new clause was substituted for Clause (x) of Section 2(2) of the Defence of India Act, 1939. Section 3 of the Ordinance provided: ", "that no order heretofore made against any person under Rule 26 of the Defence of India Rules shall be deemed to be invalid or shall be called in question on the ground merely that the said rule purported to confer powers in excess of the powers that might at the time the said rule was made be lawfully conferred by a rule made or deemed to have been made under Section 2 of the Defence of India Act, 1939. ", "The amendment effected by Section 2 of the Ordinance removed the grounds on which had pronounced Rule 26 to be ultra vires. The terms of Rule 26 were not altered by the Ordinance. ", "11. In the present applications, 's case was taken as binding on them by both and and the new Ordinance No. XIV was the main object of challenge by the applicants. But before this , the has placed in the forefront a challenge of the correctness of the decision in 's case, and success in that contention would vindicate the validity of Rule 26 and would supersede any consideration of Ordinance No. XIV. It is therefore necessary to dispose of this question first. ", "12. The material portions of Section 2 of the Defence of India Act. 1939 (Act XXXV of 1939), as amended by Section 2 of the Defence of India (Amendment) Act, 1940 (Act XIX of 1940), are as follows:- ", "\"2. (i) The Central Government may, by notification in the official , make such rules as appear to it to be necessary or expedient for securing the defence of British India, the public safety, the maintenance of public order or the efficient prosecution of war, or for maintaining supplies and services essential to the life of the community. ", "(2) Without prejudice to the generality of the powers conferred by subjection (i), the rules may provide for or may empower any authority to make orders providing for, all or any of the following matters, namely:- ", "* * * * ", "(v) preventing the spreading without lawful authority or excuse of false reports or the prosecution of any purpose likely to cause disaffection or alarm, or to prejudice His Majesty's relations with foreign powers or with States in India or to prejudice the maintenance of peaceful conditions in the tribal areas,, or to promote feelings of enmity and hatred between different classes of His Majesty's subjects; ", "* * * * ", "(x) the apprehension and detention in custody of any person reasonably suspected of being of hostile origin or of having acted, acting or being about to act, in a manner prejudicial to the public safety or interest or to the defence of British India, the prohibition of such person from entering or residing or remaining in any area, and the compelling of such person to reside and remain in any area, or to do, or abstain from doing anything. ", "The material part of Rule 26, as it has stood since 1940, is as follows:- ", "26. (J) The Central Government or , if it is satisfied with respect to any particular person that with a view to prevent him from acting in any manner prejudicial to the defence of British India, the public safety, the maintenance of a public order, His Majesty's relations with foreign powers or Indian States, the maintenance of peaceful conditions in tribal areas or the/ efficient prosecution of the war it is necessary so to do, may make an order; ", "(a) ... ", "(b) directing that he be detained; ", "13. In 's case the judgment of was delivered by Gwyer who first dealt with the main argument of the appellant, which had been rejected by , and proceeded (p. 61): ", "We, therefore, reject the main argument addressed to us on behalf of the appellant, and, if there were nothing more in the appeal, we should dismiss it without further discussion. There) is however another aspect of the case, which was not argued until the itself drew the attention of counsel to it; for it seemed to us that it was open to question whether rule 26 itself in its present form was within the rule-making powers conferred by the Defence of India Act. If it is not within those powers, then it must be hold void arid inoperative, either in whole or in part; and orders made under it will be similarly open to challenge.'' The learned Judge then proceeded to discuss paragraphs (v) and (x) of Section 2(2) of the Act, and for reasons fully stated by him, he came to the conclusion that Rule 26 was not within the powers conferred by Sub-section (2) of Section 2 and he stated (p. 68): ", "The , having set out in plain and unambiguous language in paragraph (x) the scope of the rules which may be made providing for apprehension and detention in custody it is not permissible to pray in aid the more general words in Section 2(1) in order to justify a rule which so plainly goes beyond the limits of paragraph (x); though if paragraph (x) were not in the Act at all, perhaps different considerations might apply... We are compelled therefore to hold that rule 26 in its present form goes beyond the rule-making powers which the has thought fit to confer upon and is for that reason invalid. ", "14. Their Lordships are unable to agree with the learned Chief Justice of on his statement of the relative positions on Sub-sections (J) and (2) of Section 2 of the Defence of India Act, and counsel for the respondents in the present appeal was unable to support that statement, or to maintain that Rule 26 was invalid. In the opinion of their Lordships, the function of Sub-section (2) is merely an illustrative one; the rule-making power is conferred by Sub-section (1), and \"the rules\" which are referred to in the opening sentence of Sub-section (2) are the rules which are authorised by, and made under, Sub-section (1); the provisions of Sub-section (2) are not restrictive of Sub-section (1), as indeed is expressly stated by the words \"without prejudice to the generality of the powers-conferred by Sub-section (1).\" There can be no doubt-as the learned Judge himself appears to have thought-that the general language of Sub-section (J) amply justifies the terms of Rule 26, and avoids any of the criticisms which the learned Judge expressed in relation to Sub-section (2). ", "15. Their Lordships are therefore of opinion that 's case was wrongly decided by , and that Rule 26 was made in conformity with the powers conferred by Sub-section (J) of Section 2 of the Defence of India Act. It is, accordingly, unnecessary for their Lordships to consider whether Rule 26 was not also within paragraphs (v) and (x) of Sub-section (2) of Section 2 , contrary to the opinion of , and their Lordships express no opinion on the matter. As already stated), their Lordships are also relieved from any consideration of Ordinance XIV of 1943. ", "16. As regards the remaining questions, counsel for the stated them under two main heads, viz. first, whether the orders of detention can be questioned in view of the provisions of Section 59(2) of the Government of India Act and Section 16 of the Defence of India Act, and, secondly, assuming that they can be so questioned, whether there were materials on which the below could properly decide that the orders were not made in conformity with Rule 26. ", "17. The order for detention of respondent No. 1, which is typical of the other cases, is as follows:-- ", "Calcutta, the 27th October, 1942. ", "Whereas the person known as , M.L.A., son of late of 3|1 Kali Banerjee Lane, Howrah, is detained in the Howrah Jail under the provision in rule 129 of the Defence of India Rules; ", "And whereas the Governor is satisfied that, with a view to preventing the said person from acting in any manner prejudicial to the Defence of British India, the public safety, the maintenance of public order or the efficient prosecution of the war, it is necessary to make the following orders to continue his detention; ", "Now, therefore, in exercise of the powers conferred by Clause (6) of Sub-rule (1) and sub-rule (5) of rule 26 of the Defence of India Rules, the Governor is pleased to direct- ", "(a) that the said person shall until further orders be detained; ", "(b) that until further orders the said person shall continue to be detained in the Howrah Jail; and ", "(c) that during such detention the said person shall be subject to the conditions laid down in the Bengal Security Prisoners Rules, 1940. ", "By order of the Governor, , , to the Govt. of Bengal. ", "18. Except that in the case of respondent No. 6, , there -was no previous arrest under Rule 129, and that in some cases the order was signed on behalf of the Governor by '\" , Addl. Secy, to the Govt. of Bengal\" there is no material difference from the above order in the case of the remaining orders. ", "19. The maintained that the orders being on their face regular and in conformity with the language of the rule, it was not open to the to investigate their validity any further, and relied on the statutory provisions already referred to. It should, however, be stated that Rule 3(i) of the Defence of India Rules provides that the General Clauses Act , 1897, is to apply to the interpretation of these rules as it applies to the interpretation of a Central Act , and that, under of the General Clauses Act. ", "(43a) 'Provincial Government', as respects anything done or to be done by the ' Provincial Government' after the commencement of Part III of the Government of India Act, 1935, shall mean- ", "(a) in a Governor's Province, the Governor acting or not acting in his discretion, and exercising or not exercising his individual judgment, according to the provision in that behalf made by and under the said Act... ", "20. Section 59 |(2) of the Government of India Act, on which the relies, provides: ", "Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor. ", "21. In the opinion of their Lordships, the contention of the goes too far, as the sub-section only, relates to one specified ground of challenge, namely, that the order or instrument was not made or executed by the Governor. Their Lordships agree with the statement by the learned Chief Justice of , viz.: ", "It is quite a different thing to .question the accuracy of a recital contained in a duly authenticated order, particularly where that recital purports to state as a fact the carrying: out of what I regard as a condition necessary to the valid making of that order. In the normal case the existence of such a recital in a duly authenticated order will, in the absence of any evidence as to its inaccuracy, be accepted by a : as establishing that the necessary condition was fulfilled. The presence of the recital in the order will place a difficult burden on the detenue to produce admissible) evidence sufficient to establish even a prima facie case that the recital is not accurate. ", "On this point was unanimously against the . The other statutory provision relied on by the before the was not, it appears, brought before ; it was Section 16 of the Defence of India Act, which provides as follows: ", "16. (1) No order made in exercise of any power conferred by or under this Act shall be called in question in any Court. ", "(2) Where an order purports to have been made and signed by any authority in exercise of any power conferred by or under this Act, a Court shall, within the meaning of the Indian Evidence Act , 1872, presume that such order was so made by that authority. ", "22. Sub-section (1) assumes that the order is made in exercise of the power, which clearly leaves it open to challenge on the ground that it was not made in conformity with the power conferred, heavily though the burden of proof may lie on the challenger, as stated by the Chief Justice in the passage just cited. Sub-section (2) raises a presumption of fact, which may be displaced, though here again the burden is likely to be heavy. Section 4 of the Indian Evidence Act provides: ", "Whenever it is directed by this Act that the Court shall presume a fact, it shall regard; such fact as proved unless and until it is disproved.... ", "Accordingly, the contention of the that the has no jurisdiction to investigate the validity of the orders fails. ", "23. On construction of Rule 26, the majority of the Judges of held that the Governor must be personally satisfied as to the matters therein set out, and that, in view of the admission by the that in none of the cases before them had the Governor himself considered the case, the orders for detention were not in conformity with the rule. They based their conclusion mainly on the power of delegation (which has admittedly not been exercised in the present case) conferred by Sub-section (5) of Section 2 of the Defence of India Act, which provides as follows: ", "(5) A Provincial Government may by order direct that any power or duty which by rule made under Sub-section (i) is conferred or imposed on the Provincial Government or which, being by such rule conferred or imposed on , has been directed1 under Sub-section (4) to be exercised or 'discharged by the Provincial Government, shall, in such circumstances and under such conditions, if any, as may be specified in the direction be exercised or discharged by any officer or authority, not being (except in the case of a Chief Commissioner's Province) an officer or authority subordinate to . ", "24. The learned Chief Justice disagreed, holding that Sub-section (5) was merely supplementary, and afforded no ground for excluding the ordinary methods by which executive business was authorised to be carried on by Chapter II of Part III of the Government of India Act, 1935. ", "25. Their Lordships are of opinion that the learned Chief Justice was right. ", "26. It will be remembered that the definition of Provincial Government in of the General Clauses Act refers one to the provisions of the Government of India Act for the action or non-action of the Governor, and this takes one to Chapter II of Part III, which is headed \" The Provincial Executive--The Governor\". The material sections are as follows:- ", "49.-(I) The executive authority of a Province shall be exercised on behalf of His Majesty by the Governor, either directly or through officers subordinate to him, but nothing in this section shall prevent the or from conferring functions, upon subordinate authorities, or be deemed to transfer to the Governor any functions conferred by any existing Indian law or any court, judge, or officer or any local or other authority. ", "(2) Subject to the provisions of this Act, the executive authority of each Province extends, to the matters with respect to which has power to make laws. ", "50-(1) There shall be a council of ministers to aid and advise the Governor in the exercise of his functions, except in so far as he is by or under this Act required to exercise his functions or any of them in hi9 discretion; ", "Provided that nothing in this sub-section shall be construed as preventing' the Governor from exercising his individual judgment in any case where by or under this Act he is required so to do. ", "(2) The Governor in his discretion may preside at meetings of the council of ministers. ", "(3) If any question arises whether any matter is or is not a matter as respects which, the Governor is by or under this Act required to act in his discretion or to exercise his individual judgment, the decision of the Governor in his discretion shall be final, and the Validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in his discretion, or ought or ought not to have exercised' his individual judgment. ", "52.- (1) In the exercise of his functions the Governor shall have the following special responsibilities, that is to say:- ", "(a) the prevention of any grave menace to the peace or tranquillity of the Province or any part thereof... ", "(3) If and in so far as any special responsibility of the Governor is involved, he shall,, in the exercise of his functions, exercise his individual judgment as to the action to be taken. ", "59.-{1) All executive action of shall be expressed to be taken in the name of the Governor. ", "(Sub-section (2) already quoted). ", "(3) the Governor shall make rules for the more convenient transaction of the business of , and for the allocation among ministers of the said business in so far as it is not business with respect to which the Governor is by or under,' this Act required to act in his discretion. ", "(4) The rules shall include provisions requiring ministers and secretaries to Government to transmit to the Governor all such information with respect to the business of as may be specified in the rules, or as the Governor may otherwise require to be so transmitted, and in particular requiring a minister to bring to the notice of the Governor, and the appropriate secretary to bring to the notice of the minister concerned, and of the Governor, any matter under consideration by him which involves, or appears) to him likely to involve, any special responsibility of the Governor. ", "(5) In the discharge of his functions under Sub-sections (2), (3) and (4) of this section the Governor shall act in his discretion after consultation with his ministers. ", "27. Rules of business have been framed by the Governor of Bengal under Section 59 , under which it is not disputed that questions of detention fall to be transacted in . Under Rule 12 all orders or instruments made or executed by or on behalf of are to be expressed to be made by or by order of the Governor of Bengal; and under Rule 13 save in cases of special authorisation, every order or instrument of is to be signed by either a Secretary (an Additional Secretary), a Joint Secretary, a Deputy Secretary, an Under-Secretary, or an Assistant Secretary to , and such signatures are to be deemed to be the proper authentication of such orders or instruments. ", "28. In the first place, their Lordships observe that the provisions of Chapter II of Part III of the Act of 1935 as to and its executive authority use the term \" executive\" in the broader sense as including both a decision as to action -and the carrying out of such decision. ", "29. Counsel for the respondents submitted a contention, which the majority of the learned Judges in had accepted, based on Sub-section (2) of Section 49 of the Act of 1935, to the effect that the sub-section limited the operation of the section to matters with respect to which has power to make laws, and that the subject-matter of was not within those powers. The learned Judges, in confirmation of this view, referred to Sub-section (2) of Section 124 , which provides that An Act of the Federal Legislature may, notwithstanding that it relates to a matter with respect to which has no power to make laws, confer powers and impose duties or authorise the conferring of powers and the imposition of duties upon a Province or officers and authorities thereof. ", "Their Lordships are unable to agree with such a narrow reading of these provisions, which would involve the necessity of making provision in each case for the executive machinery to carry out the powers and duties so imposed, instead of using the existing Provincial machinery. This view is supported by Sub-section (4) of Section 124 , which provides inter alia that where an Act; of , by virtue of Sub-section (2), confers powers and imposes duties upon a Province or officers and authorities thereof in relation to a matter with respect to which has no power to make laws, the is to pay to the Province such sum as is agreed, or determined by arbitration, in respect of any extra costs of administration incurred by the Province in connection with exercise of those powers and duties. This appears to contemplate extra costs incurred by the existing machinery of . Their Lordships construe Sub-section (2) of Section 49 as providing an extensible limit and not a maximum limit, and the provisions of Sub-section (2) of Section 124 as affording a means of such extension. But, further, their Lordships construe the incorporation of the General Clauses Act , both: in the Defence of India Act, and in the. Defence of India Rules, with its reference in to the provisions of Part III of the Act of 1935 as to the acting or non-acting of the Provincial Governor, as necessarily embodying the relevant provisions of Chapter II of Part III, including in particular Section 49 . ", "30. It is for the same reasons that their Lordships are unable to accept the respondents' contention, also agreed to by the majority Judges in , that the provision of Sub-section (5) of Section 2 of the Defence of India Act provides the only means by which the Governor can relieve himself of a strictly personal function. Their Lordships would also add, on this contention, that Sub-section (5) of Section 2 provides a means of delegation in the strict sense of the word, namely, a transfer of the power or duty to the officer or authority defined in the sub-section, with a corresponding divestiture of the Governor of any responsibility in the matter, whereas under Section 40(1) of the Act of 1935 the Governor remains responsible for the action of his subordinates taken in his name. ", "31. The respondents next contended that, assuming that a 49 did apply, this question was one which involved a special responsibility of the Governor within the meaning of Section 52(2) , (a) of the Act of 1935, and therefore required the individual judgment of the Governor. In their Lordships' opinion, they are excluded from considering the somewhat debatable question whether the present matter does fall within head (a) of Section 52(2) , by the provisions of Section 50(3) , as the contention of the respondents is that the Governor should have exercised his individual judgment. Nor is it necessary for their Lordships to consider whether \" individual judgment\" excludes the operation of Section 49(2) .. So far as it is relevant in the present case, their Lordships are unable to accept a suggestion by counselor the respondents that the Home Minister is not an officer subordinate to the Governor within the meaning of Section 49(1) , and so far as the decision in 2 Cal. 411 decides that a minister is not such an officer their Lordships are unable to agree with it. While a minister may have duties to the , the provisions of Section 91 as to the appointment, payment and dismissal of ministers, and Section 59(3) and (4) of the Act of 1935, and the business rules made by virtue of Section 59 , place beyond doubt that the Home Minister is an officer subordinate to the Governor. ", "32. Their Lordships are therefore in agreement with the learned Chief Justice of that such matters as those which fell to be dealt with by the Governor under Rule 26 could be dealt with by him in the normal manner in which the executive business of was carried on under the provisions of Chapter II of Part III of the Act of 1935, and in particular, under the provisions of Section 49 and the rules of business made under Section 59 . ", "33. There remain the criticisms on .the manner in which the individual cases of detention have been dealt with. The six cases with which this appeal is concerned are the cases of respondents Nos. 1, 3, 5, 6, 7 and 8. In view of the opinions already expressed by their Lordships, the orders for detention in each of these cases must be taken as ex facie regular and proper, and it follows, as already stated, that there is a heavy burden on the respondents to displace the presumption enacted by Section 16(2) of the Defence of India Act. The respondents were enabled to raise the question as to whether the Governor was bound to give his personal consideration to the matter, by reason of the 's admission that he had not in fact done so in any of these cases. They were also able to raise a question as to the so-called routine order of October 1, 1942, because of Mr. 's admission in his affidavit. The majority of held all the detention orders to be bad because of the first of these admissions, though they also deal with the routine order, and criticise adversely the whole procedure. The learned Chief Justice agreed with the majority as to the cases which were subject to the routine order; he disagreed as to the necessity for the personal satisfaction of the Governor, holding that the procedure authorised by Section 49 was available to the Governor, but he held that the routine order vitiated the orders as to which it operated. One of these three eases-that respondent No. 2, , is not before the , as he was released shortly after the judgment of . On the other hand, as regards the cases of the present respondents Nos. 3, 6, 7 and 8, he stated that he was unable to find in the evidence anything which established even a prima facie case that the orders under Rule 26 had been improperly made or to contradict the accuracy of the narrative of the orders. Thereby he differed from the majority of the as regards these cases. ", "34. The evidence before consisted of affidavits by the respondents, the counter-affidavit by Mr. , Additional Home Secretary to , and certain statements and answers regarding detention under Rule 26 given by the Home Minister, Bengal, in . In common with the Chief Justice of , their Lordships have been unable to find anything-apart from the routine order-in these statements and answers of the Home Minister which affords evidence of improper procedure in the individual cases before the , even assuming that such evidence was admissible, which, in the opinion of their Lordships, was at least open to doubt. It is the evidence of Mr. that establishes the application of the routine order in some of these individual cases. Further, there is nothing in the affidavits filed by the respondents which establishes such a prima facie case, and they were not so founded on at the hearing before the . The respondents' case was founded on the statements and answers by the Home Minister, as to which their Lordships have expressed their view above, and Mr. 's counter-affidavit, which their Lordships will now consider. ", "35. In paragraph 8 of his affidavit Mr. states that on October 1, 1942, the Home Minister directed that, on receipt of the report of arrest under Rule 129 of the .Defence of India Rules together with a recommendation by the for detention under Rule 26 in respect of persons arrested in connection with the disturbances or suspected of being so connected, orders of detention under Rule 26(I) (b), should at once be issued as a matter of course subject to review by on receipt of further details to be supplied in each case by . That clearly meant the substitution of the recommendation by the in place of the satisfaction of the Governor prescribed by Rule 26, and equally rendered any order under Rule 26 in conformity with the Home Minister's direction, to which their Lordships have already referred as the routine order, ab initio void and invalid as not being in conformity with the requirements of Rule 26. Their Lordships now turn to the cases before them, to which the routine order applied, and they quote the statement of Mr. with regard to the first of these two cases, that of respondent No. 1. ", "10. : He was arrested by the Police under Rule 129 of the Defence of India Rules on 20th October, ,1942. On 27th October, 1942, I considered the materials before me and in accordance with the general order of Government directed the issue of an order of detention under Rule 26(1) (b) of the Defence of India Rules. On receipt of fuller materials the case was later submitted for consideration of the Honourable Home Minister.. Bengal, from whom no order directing withdrawal or modification of the order of detention was received. ", "36. Their Lordships are unable to read Mr. 's statement that he had considered the materials before him as involving anything more than that he had considered the report of the arrest and the recommendation of the. Police to see if there was material sufficient to justify the issue of an order under the routine order. It cannot mean that, in spite of the direction of the Home Minister in the routine order, he considered the materials before him so as to satisfy himself, independently of the police recommendation, that an order under Rule 26 should be issued. That would not be in accordance with the requirement of the routine order that-the police having recommended it-the order of detention should be issued as a matter of course. Further, the inaction of the Home Minister on the later submission of the fuller materials to him could not cure the invalidity of the order of October 27, 1942. ", "37. The case of , Despondent No. 5, is stated in paragraph II of Mr. 's affidavit, and is substantially the same as that of respondent No. 1. The order in his case was issued by Mr. on March 8, 1943, and no further materials had been received at the date of the affidavit, May 24, 1943. ", "38. Their Lordships agree with the unanimous conclusion of that the orders of detention in the cases of the present respondents Nos. 1 and 5 are invalid. ", "39. There remain the cases of respondents Nos. 3, 6, 7 and 8. The orders of detention in these cases were earlier in date than the routine order of October 1, 1942, and are not affected thereby, As their Lordships have already stated, there is no evidence in these cases sufficient to rebut the presumption as to their regularity. There is only one point on which their Lordships desire to add an observation. In paragraphs 2, 3 and 4 of his affidavit Mr. states that in the cases of , present respondent No. 3, , present respondent No. 8, and , present respondent No. 7, he himself considered the materials supplied and, in fact, the orders of detention were signed by him. In the case of , present respondent No. 6, Mr. , in paragraph 6 of his affidavit, does not say by whom the case was considered. The order of detention is signed by , Deputy Secretary to . This is a case typical -of the application of the presumption, and, if the respondents had wished to probe the matter, in case the consideration might have been by someone not qualified as an officer subordinate to the Governor within the terms of 9. 49 of the Act of 1935, they should not have let the matter rest there, but proceeded either by counter affidavit or by cross-examination of Mr. on his affidavit. As they did not take such a course, the presumption remains; undisturbed. ", "40. Accordingly, their Lordships agree with the Chief Justice of that the orders of detention in the cases of respondents Nos. 3, 6, 7 and 8 were valid, and the appeal of the will be allowed in the case of these four respondents. Counsel for the stated to their Lordships that, without prejudice to any further action under Rule 26 that the may find it expedient or necessary to take, it was not intended that any further action should be taken against these four respondents under the particular orders which are before the in this appeal. ", "41. Their Lordships will therefore humbly advise His Majesty that the appeal should be allowed as respects respondents Nos. 3, 6, 7 and 8, and the judgments and orders of the below should be set aside, and that it should be declared that the order of detention under Rule 26 of the Defence of India Rules in each of these cases was a valid and proper order; that in the case of respondents Nos. 1 and 5 the appeal should be dismissed and the judgments and orders of the below should be affirmed. There will be no order as to costs."], "relevant_candidates": ["0000721271", "0001515320", "0001788368"]} {"id": "0001442890", "text": [" ) ", "1. According to the appellants they manufacture pilfer proof caps falling under T.I. 12 CET as also aluminium tear-off vial seals and aluminium tear-down vial seals, falling under T.I.-68 CET. In respect of the pilfer proof caps they were claiming exemption under notification 83/83 and in respect of the other aluminium vial seals they were claiming exemption under notification 77/83. In respect of these aluminium vial seals the department had a doubt on the classifiability under TI 68 but, subsequently, the Assistant Collector under order dated 8-10-1980 settled their classification under TI 68 CET. ", "2. After a visit to their factory on 21-1-1985 during the course of which 3,31,000 pieces of tear-off and tear-down vial seals were seized under the belief that they are classifiable under TI 42 CET and not under TI 68 CET, action was initiated by issue of notice dated 6-6-1985. It was alleged that as these seals had been manufactured and cleared without payment of duty under TI 42 CET the appellants had contravened various rules and had made themselves liable for penalty, confiscation and demand of duty. After the appellants had sent their reply an adjudication was held by the Collector of (Now Bombay-Ill on reorganisation) in which he held that the vial seals were classifiable as pilfer proof caps under TI 42 CET and the charges against the appellants were therefore made out. But he restricted the demand to the normal period under Section 11-A of the Central Excises and Salt Act . It is against the said order of the Collector dated 24-12-1985 that the present appeal has been preferred. ", "3. We have heared , Advocate for the appellants and , JCDR for the department. ", "4. Samples drawn of the products in question as manufactured by the appellants as also by another manufacturer were also produced for our perusal during the course of our hearing. ", "5. The contentions of the appellants stated in short are that :- ", "(i) The aluminium vial seals in question are not caps at all but only seals and therefore there is no question of these products being pilfer proof caps; ", "(ii) These seals are not known as pilfer proof caps in the trade; ", "(ill) Reliance of the Collector on two earlier decisions of this Tribunal is misplaced since in one of them the party was not represented and the other did not deal with a product similar to the product in question; ", "(iv) the classification of the product having been approved by the Assistant Collector the same cannot in law be disturbed by the Collector except by way of proceeding in review; ", "(v) the Collector had no jurisdiction to confirm the demand under Section 11-A of the Act as it then stood; ", "(vi) the confiscation of the goods was in any event not called for; and ", "(vii) the demand as confirmed was in any event in excess of the period prescribed in Section 11-A of the Act. ", "6. As mentioned earlier there is no dispute regarding the classifiability under TI 42 CET of the screw down caps manufactured by the appellants which they themselves have classified under TI 42 as pilfer proof caps. The dispute relates to tear-off and tear-down aluminium Seals manufactured by them. The tear-off seals are to be used in injection glass vials, the tear-down seals being used in other glass or plastic bottles meant to contain tablets, powder, capsules etc. Shri contended that the function to be performed in case of tear-down seals are (i) to hold the plastic cap in position; (ii) to provide decorative packaging and (iii) to prevent accidental spilling of the contents or cap during handling. In respect of the tear-off seals he claimed that the functions were (i) to hold the rubber plug in position; (ii) to prevent spillage of the contents during handling and (iii) to prevent contamination of the plug or the contents. Therefore in effect he stated that while these tear-off and tear-down seals may contribute towards safety from pilferage, their main function was not that and that these being in the nature of seals only and not caps they could never be classified as pilfer proof caps. ", "7. The relevant tariff entry reads \"pilfer proof cap for packaging, all sorts, with or without washers or other fittings of cork, rubber, polythene, or any other material\". ", "8. Before the Collector as well as before us the appellants have relied on the definition of pilfer proof caps in the Glossary of terms relating to metal containers trade published by (IS: 1394-1973). It will be convenient at this stage to extract the definition of not merely pilfer proof caps but other definitions also therein. They are :- ", "Bung - A fitting used to seal a sheet-metal container, usually a metal plug provided with threads to fit a screwed flange. ", "Cap - A light gauge metal or plastic cover used to seal the neck or opening of a container. ", "Inner Seal - Refers to paper, foil or cork used to line the inside of a general line cap closure. ", "Lid - The detachable closure component defined precisely by qualification, for example, slip lid, screw, cap, etc. Pilfer proof caps - Screwed on closure with integral pilfer proof arrangements. ", "Plug - A metal stamping fitted into a neckor orifice. ", "Screw Cap - A screw-on (rolled thread) cap incorporating a sealing wad or liner and used in conjunction with an appropriate screwed neck. ", "Washer - A disk or cork or other soft material inserted in the cap to ensure leak-proof seal. ", "9. Thus so far as pilfer proof caps are concerned the definition makes it clear that these are screw on closures with integral pilfer proof arrangement. It is explained for the appellants that these are caps that get separated into the bottom and top portions when the caps are opened so that telltale evidence is left behind of the fact of the cap having been opened to get at the contents. Further a cap would be a metal or plastic object to seal the opening of the container and the same would be available for use time and time again for the same purpose, whereas a tear-off or tear-down seal would get destroyed the moment the seal is broken and could not be used again for preserving the contents thereafter. That is to say they would be of one time use only and cannot be reused periodically. This very circumstance, it appears to us, would establish that these seals are not caps much less pilfer proof caps. ", "10. contends that these seals safe-guard and, evidently, provide protection against tampering and they would therefore be pilfer proof caps. This argument overlooks the fact that in order that the product may be described as a pilfer proof cap it must first be a cap. A seal would not be a cap since it cannot be reused after opening. contends that in view of the words used in the entry such an argument cannot be accepted. He says that as T.I. 42 is worded the presence or absence of washer and other fittings would not be material and therefore the seal even without the rubber plug beneath the same would still be a pilfer proof cap. We are unable to accept this contention. The washer or other fittings referred to in the entry, in our opinion, refer to the inner seals of paper, foil, or cork used to line the inside of a cap closure. In the case before us the rubber plug beneath the seal would be the cap itself and not the washer or other fitting. ", "11. relies upon two earlier decisions of this , both of which have been referred to and relied upon by the Collector also in his order. They are in the case of (1983 ELT 2506) and (1983 ELT 1163). It is pointed out for the appellants that the assessee went unrepresented in the case of and therefore the arguments now advanced were not put before the and had therefore not been considered. On the perusal of the judgment we find that this aspect of the case, that seals would not be caps at all, had not been raised by the assessee and had therefore not been considered by the . So far as the case of it is clear that the product concerned in that case was not the product in issue before us. That case dealt with cap-seals used for sealing of drums and not vial seals. The definition of the cap seal in 1S:1394-1973 is as follows :- ", "\"Capseal (Drums) - A light gauge metal closure component fitted over the primary seal (for example, inner plug, lever cap or cork shives); may be paper lined on the underside, usually applied by rolling-on with special tool\". ", "No doubt reference has been made in that judgment to the definition of pilfer proof caps in 15:1394-1973 but it has been observed that in the absence of any definition of the terms pilfer proof cap in the tariff entry the entry has to be given widest meaning particularly in the context of the qualifying word \"all sorts\". But in the light of the discussion earlier, especially that relating to the fact that a seal would never be a cap, it appears to us that the ratio of the said decision, which dealt with cap-seals for drums, should not be taken to apply to the facts of the instant case. ", "12. In the light of the above discussion we are satisfied that the tear-off and tear-down vial seals manufactured by the appellants, and which are the subject matter of the present appeal, would not be pilfer proof caps for the purposes of levy of duty under Tl 42 CET. ", "13. Shri further contended that in any event the order of the Collector must fail on two other grounds. The first was that the Collector had no jurisdiction to go into the matter since the Assistant Collector had already once gone into the matter and given a finding that these seals are to be classified under Tl 68 GET and, in the absence of any further or better material, the Collector was not entitled to come to a different conclusion except by way of review under the provisions of Section 35-A of the Central Excises and Salt Act as it then stood. ", "From the order of the Collector we find that no other material than was available to the Assistant Collector earlier had been placed before the Collector. The process of manufacture continued to be the same and the use to which the product was being put also continued to be the same. In view of the said circumstances we agree with the learned counsel that the Collector had no jurisdiction to differ from the earlier conclusion of the Assistant Collector except by way of taking proceeding for review of the earlier order under Section 35-A . ", "14. Shri further contends that so far as the demand for payment of duty is concerned the Collector had no jurisdiction under Section 11-A to do so. As pointed out by him, Section 11-A conferred jurisdiction on the Assistant Collector to determine the amount of duty in terms of notice issued earlier by the proper Central Excise Officer. The jurisdiction was thus conferred on the Assistant Collector only as the Section stood at the relevant time. It was only on and after 20-12-1975 (20-12-85 ?) that, under the provisions of Section 3 of Act 79 of 1985, the said power of the Assistant Collector could have been exercised by the Collector also. It is true that under Rule 6 of the Central Excise Rules the Collector may perform all or any of the duties or exercise all or any of the powers assigned to an Officer under the Central Excise Rules. This empowering of the Collector would relate only to powers exercisable by any other Officer under the Rules and not under the Act. contends that it is a well recognised principle of administrative law that what a subordinate could do his superior could always do. He therefore contends that what an Assistant Collector could do under the provisions of the Act the Collector as his superior could also do. We are unable to accept this proposition in the absence of any provision in the Act itself, as distinguished from the provision in the Rules, to this effect. Therefore, we are convinced that so far as demand for duty is concerned the Collector had no power in the instant case. ", "15. in this connection refers to the fact that the demand had been raised under Rule 9(2) also. But we are satisfied that no demand could have been raised under Rule 9(2) since the manufacture and clearances were in pursuance of an earlier order of the Assistant Collector in terms of which the goods in question were classifiable under TI 68 CET and under that classification the goods were exempt since the exemption limit of clearances had not been crossed. In the absence of any suppression or mis-statement of facts the demand could not be raised under Rule 9(2). ", "16. contends that the order for confiscation of the seized goods was also not proper. As already seen, the manufacture and clearances were in terms of the earlier order of the Assistant Collector under which the goods were classifiable under TI 68 CET and were exempt in view of the clearances not having crossed the exemption limit. In view of the above circumstances there had been no case made out of wilful infraction of any statutory provision making the goods liable for confiscation. We therefore hold that the order for confiscation was also not proper. ", "17. In the light of the above discussion we hold that the order of the Collector is liable to be set aside on the several grounds discussed earlier. Accordingly this appeal is allowed and the order of the Collector is set aside with consequential relief, if any. ", "Sd./- ", "New Delhi (V.T. Raghavachari) 11-12-1986 Member 11-12-1987 , Vice President ", "18. I have carefully perused the order written by learned brother . 1 agree with his conclusion and finding (reference paragraph 12 of his order) that the tear-off and tear-down vial seals manufactured by the appellants would not be pilfer-proof caps for the purpose of levy of excise duty under Item No. 42 of the Central Excise Tariff Schedule. ", "19. In the above view of the matter, it does not appear to be necessary, in my opinion, to consider the other contentions raised by , Counsel for the appellants (and discussed in para 13 and 14 of 's order) and I do not propose to go into them. ", "20. I also agree that Rule 9(2) has, in any event, no application to the facts of the present case. Further, the confiscation ordered by the Collector was not proper in the instant case. ", "21. I, therefore, agree that the appeal should be allowed setting aside the order of the Collector with consequential relief, if any. ", "Sd./- ", "New Delhi (G. ) 11-12-1986 Vice-President , Member (T) 22. I agree with brother . 23. Appeal be allowed with consequential relief. Sd./- () Dated : 26-3-1987 Member FINAL ORDER ", "\"The Order bearing No. 954/86-D, dated 11-12-1986 issued by the as disposing of this appeal had been recalled vide Misc. Order No. 93/1987-D, dated 26-3-1987. Thereafter, the present order is being issued by the Bench disposing of the appeal.\""], "relevant_candidates": ["0027391014"]} {"id": "0001444937", "text": ["ORDER , J. ", "1. This petition under Article 226 of the Constitution of India presents yet another dimension of the doctrine of estoppel -- which as the judicial decisions demonstrate, has many facets. ", "2. The petitioner, the owner of , Cannanore, approved by of the Government, seeks to compel the respondents to pay Rs. 5.03 lakhs of subsidy under the Central Investment Subsidy Scheme, promised under the letter No. FC.F3/32598/89 dated 28-9-1989 (Ext. P2) written on behalf of the respondents 1 and 2, who are respectively, the State of Kerala, and the General Manager of . The respondent No. 3 is the Union of India. The facts are set out in paragraphs 3 to 6 below. ", "3. According to the petitioner, the respondents 1 and 2 .by their letter No. FC.F3/ 32598/89 dated 28-9-1989 (Ext. P2) and acting under the Scheme promised that the amount of Rs. 5.03 lakhs will be released to the petitioner through , Cannanore, towards the aforesaid subsidy. ", "4. The 10-15% Central Investment Subsidy Scheme of 1991 (Ext. R3(c)) -- the Scheme -- came into force on 26th August, 1971 and the valid during the period of the Fourth Five-Year plan. Thereafter it was extended from time to time. The last such extension of its duration was from 1st April, 1988 to 30th Sept. 1988. (Ext. R3(b) Notification). The scheme ceased to exist from 1st October, 1988. The object of the scheme was to encourage development of industries in certain backward areas. ", "The substance of the scheme in so far as is relevant to this case is as under: ", "The industrial units duly registered with the concerned department of the , may apply for grant of subsidy based on their project reports, submission of the details of the project, assets required, letter of sanction from the financial institution, sanctioning the loan and so on. ", " constitutes a committee known as -- for short -- consisting of the Secretaries to in and and other officers. The authority to decide whether the industrial unit qualifies for the grant of subsidy belongs to the It is the that determines the quantum of the subsidy. The limit of the authority of the to determine the quantum is 15% of the value of investment up to a maximum of Fifteen lakhs rupees. The has the over all authority over the disbursing agencies, like the respondent No. 2, who disburse the amount of subsidy sanctioned by the After disbursing the amount of subsidy, the agency prefers a claim with the for reimbursement of the amount disbursed. The respondent No. 2 is such a disbursing agency. ", "It is the Central Government that finally disburses the amount of subsidy to the S.L.C. ", "The sanctions and the disbursing agency pays the amount of subsidy to the industrial unit. It is only, thereafter, that disburses to the agency the amount paid by it. ", "5. The petitioner applied for grant of central subsidy under the scheme. The application was made before 30th Sept. 1988 while the scheme was in force. It was scrutinised by . But the did not sanction the subsidy while the scheme was in force. The \"sanction\" was accorded by the letter No. FC.F3/32598/89 dated 28-9-1989, when the scheme was not in force. The who \"sanctioned\" the central subsidy, was a creature of the scheme. When the scheme ceased to be in force on 1st October, 1988, the too ceased to exist. ", "6. Counsel for the petitioner based his case on the \"promise\" contained in the letter No.FC.F332598/89 dated 28th Sept. 1989, written by the By this letter the informed the petitioner that the at its IVth meeting of 1989 held on 27-9-1989 sanctioned a subsidy of Rs. 5.03 lakhs payable through , Cannanore. ", "The only point urged by learned counsel for the petitioner is that the respondents 1 and 2 and their agency, the , on whose promise, the petitioner acted, are estopped from withholding or denying to the petitioner of the amount of subsidy. ", "7. The undisputed facts are these: ", "(i) The petitioner relied upon the scheme and expected that he would be granted the subsidy. ", "(ii) Acting on the letter dated 28-9-1989 (Ext. P2) the petitioner executed the requisite agreements and deposited Rs. 25,000=00 in account as required by the respondents Nos. 1 and 2. ", "The arguments proceeded on the assumption that the petitioner, acting on the aforesaid letter, altered his position. ", "8. The basic principles of the doctrine of estoppel may be summarised. ", "Where a promise is made with the intention that the other party should act upon it, the promisor can be compelled to keep his word, if the promisee has acted upon the promise. The promise need not prove that, acting on the promise, he suffered prejudice, detriment or damage, ., : (AIR 1979 SC 621). However, the indispensable requirement of the rule of estoppel is that the promise altered his position , AIR 1987 SC 2414. The doctrine applies to all public authorities including public corporations. Such corporation can be compelled to perform their obligations arising from a promise made by them. ., AIR 1983 SC 848. ", "In the application of the doctrine of estoppel the limitations of its application cannot be lost sight of. The doctrine is not applicable irrespective of the circumstances in which the promise was made and the situations which it was intended to meet. In public law the most obvious limitation on the doctrine of estoppel is that it cannot be invoked so as to give an authority powers which it does not, in law, possess. In other words, no estoppel can legitimise action which is ultra vires Administrative Law --, Fifth Edition, Page 233. For instance, where an electricity authority, by misreading a meter, undercharged its customer, it was held that the accounts it delivered did not estop it from demanding payment in full. The reason is that the authority had statutory duty to collect the full amount and had no power to release the customer, expressly or otherwise. Administrative Law -- , Fifth Edition, page 233. Secondly, the promisor cannot be compelled to perform his promise if it is inequitable to do so. ., (1979)2 SCC 409 : (AIR 1979 SC 621). Since the doctrine is an equitable doctrine the promisor will not be bound to fulfil the promise if it is shown that equity lies in his favour ., : (AIR 1979 SC 621). Thirdly, promisory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is prohibited by law or which was devoid of the authority or power in the officer of the Government or the public authority to make ., : (AIR 1979 SC 621); (b) Vasanat kumar , AIR 1991 SC 14). ", "A fifth limitation arises where Government's policy is concerned. Where Government changes its policy resulting in refusal to fulfil the promise, no estoppel arises. Many people may be victims of such reversal of policy. But estoppel cannot be allowed to hinder the formation of policy, v. , (1977 QB 643, ). ", "9. In considering whether the respondents 1 and 2 are estoppel from denying the payment of subsidy, two striking facts about the promise contained in the letter by the dated 28-9-1989 (Ext. P2) must be borne in mind: ", "(i) The scheme under which the derived its authority to sanction subsidies to Hotel Industry ceased to exist on 1st October, 1988. Consequently, the a creature of the Scheme ceased to exist with effect from 1 st October, 1988. ", "(ii) As a corollary, it follows that the sanction of the subsidy -- the promise -- was made by a body which had no authority to make it. ", "10. In view of the two facts set out in paragraph 9 above, the promise by the becomes without authority and estoppel cannot be invoked to legitimate action which is ultra vires. Realising that the had no legal existence after 1st October, 1988 making its promise unauthorised, learned counsel for the petitioner called in aid the judgment in v. Minister of Pensions (1949) 1 KB 227. The circumstances in which the doctrine of estoppel was applied explain the rationale of the judgment. , a colonel in the suffered a permanent physical disability during the war in 1940. Two departments of the , and , were concerned with the grant of pension to . based his claim on the certificate of disability issued by the Medical Board. The Director of of , on 8th April, 1941 wrote to that \"your case has been duly considered and your disability has been accepted as attributable to military service.\" The acceptance of attribut-ability of the disability to military service entitled to pension. But the letter dated 8th April, 1941 was written without even consulting the Department of Pensions who declined to pay. If the war office were to hold that the disability was not attributable to war service, would have obtained independent medical opinion which he did not do. He thus altered his position, acting on the letter from the Director of . made these findings: ", "(i) , an officer in the who naturally dealt with the war office was entitled to assume that the war office had issued the letter after consulting . ", "(ii) The war office assumed authority over the matter and made the assurance contained in the letter dated 8th April, 1941, which, in the circumstances, was authoritative decision intended to be binding and intended to be acted upon. ", "(iii) The citizen is not expected to know the limits of the authority to make the promise. ", "(iv) If in its dealings with a subject takes upon itself to assume authority upon a matter with which he is concerned, he is entitled to rely upon it. ", "(v) The war office is an agent of the . Its letter binds the through whom it also binds . ", "11. There are clear features which distinguish 's case with the case which I am called upon to decide. The assurance by the war office was held authoritative, as , an officer in naturally looked to the war office to whom he was subordinate. The relation was of employer and employee. In the present case, there is no such relationship between the petitioner and the Secondly, the was held bound by the promise by the Director of Personnel Services, irrespective of whether the latter acted within his authority. In this case which provides the funds for disbursement of the subsidy is not bound by the sanction by the unless it acts within the scheme. Thirdly, it has not been held in that a promise by a department who lacks the authority to certify attributability to military service, by itself estops the . , construed the circumstances such as the relationship between the Minister of War, and the Minister of Pensions or. the one hand, and the on the other, and read in the letter an authority in the war office to make the promise. A fourth distinguishing feature is that whether the Ministry of Pension had authorised it or not, the was held bound by what the war office promised. ", "While these distinguishing features are sufficient to make, , v. Minister of Pensions, (1949) 1 KB 227 inapplicable to the facts of the case before me they do not end the matter. The question of authority of the promisor continues to raise its head and demands an answer. The assumption of authority by the Director of Personnel Services of the war office, was the dominant feature of the case. By analogy, it has been urged that too assumed such authority when it sanctioned the subsidy. But this argument is not tenable. The war office has continued authority to deal with cases of the members of the armed forces. Its authority did not flow from a temporary scheme nor was It limited by time, as in this case. Secondly, the war office was not altogether without authority to determine the cases of pensions of the army personnel. Its letter would have been authoritative if had concurred with it. In , the question of authority arose because the letter was written without the concurrence of or consultation with who was concerned with the payment of pensions. In the case of , it cannot be said that it would have acquired the authority to sanction the subsidy, if it had consulted any other department of the . A close scrutiny of the case of and this original petition shows that the rule laid down in is not applicable, to the circumstances of this case. ", "12. I will now examine the validity of the principle laid down in , v. Minister of Pensions, (1949) 1 KB 227. For this purpose I will examine whether the principle is accepted in England. The basic postulate of was that where wrongfully assumes authority to perform some legal act, the citizen is entitled to assume that it has that authority Adminsitrative Law -- , Fifth Edition Page 342. The British judicial decisions have not accepted this proposition. When the same proposition was repeated by in a later case, repudiated it in these words: ", "\"..... I know of no such principle in our law nor was any authority for it cited. The illegality of an act is the same whether, or not the actor has been misled by an assumption of authority on the part of the Government officer however high or low in the hierarchy\" ", " v. ,(1951 AC 837). ", "If the promise by an official who has no legal power is given the force of law, ultra vires acts will gain legitimacy which is a negation of the fundamental canons of administrative law Administrative Law -- , Fifth Edition, Page 345. Where a public authority without having real or ostensible authority sold the property of the , it was held that the was not bound by the sale. The burden of ascertaining whether the officer has such authority is on the purchaser A.G. For Ceylon v. , (1953 AC 461 at page 480). ", "In , Ltd. v. , ((1981) 2 All ER 204), the planning officer without having the authority, stated that had the existing user right in respect of the site in question and that the District council who had the statutory authority would grant planning permission. Acting on the planning officer's statement proceeded to renovate and rebuild the old buildings. in exercise of its statutory authority rejected the applications for established use certificates and issued stop notices. It was held that since there was nothing apart from the position held by the Planning Officer on which the could have assumed that the officer could bind the council, the council was not estopped by anything the planning officer had said, from refusing the applications by . ", "13. The analysis of the law in England made in the last paragraph may be summed up. ", " in , v. , 1951 AC 837, expressly and emphatically rejected the proposition laid down in , v. Minister of Pensions, (1949) 1 KB 227. In A.G. for Ceylon, A.G. For Ceylon v. , 1953 AC 461 at page 480, the sale of 's property by an officer having no authority was held not binding on the . This judgment is a rejection of the claim of legitimacy by ultra vires acts. , Ltd. v. D.C., (1981) 2 All ER 204 also demonstrates that unauthorised promises do not create estoppel. ", ", J. assumed that the citizen is not expected to know the limits of the authority to make promises. Considerations of hardship to the citizen led him to this conclusion. But in A.G. for Ceylon, A.G. For Ceylon v. , 1953 AC 461 at page 480 this very proposition was rejected. ", "I therefore conclude that , v. Minister of Pensions, (1949) I KB 227 which has been rejected in England does not lay down the correct law. Its assumption that an unauthorised promise creates estoppel is contrary to the fundamental principle of administrative law that estoppel cannot be invoked to legitimise ultra vires actions. Again the proposition that a citizen is not expected to know the limits of the authority of an officer to make the promise tends to legitimise unauthorised promises. To hold that a citizen, acting on an unauthorised promise without enquiring into the limits of such authority, can bind a public authority, is to create a power which does not exist. ", "14. In the present case the wrote the letter dated 28-9-1989 (Ext. P2) at a time when the scheme which created the was not in force. The termination of the scheme with effect from 1-10-1988, automatically terminated the The \"promise\" or \"sanction\" contained in the letter dated 28-9-1989 (Ext. P2) was therefore an assurance by a non-existent body. Even if the existence of the is assumed, the letter dated 28-9-1989 (Ext. P2) was without the authority of the scheme. The \"sanction\" or \"promise\" was ultra vires of the authority of the and therefore no estoppel arises out of such a promise. The submission of the petitioner that the respondents are estpped from denying the payment of the subsidy is without merit. ", "15. In view of my conclusions recorded above it is not necessary to consider whether equity lies in favour of either of the parties. ", "16. The petition is dismissed."], "relevant_candidates": ["0000517737", "0000871220", "0001348961", "0001635654"]} {"id": "0001472953", "text": ["PETITIONER: PURSHOTTAM DAS Vs. RESPONDENT: SMT. RAJ MANI DEVI DATE OF JUDGMENT: 30/10/1968 BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SIKRI, S.M. CITATION: 1970 AIR 763 1969 SCR (2) 588 ACT: U.P. (Temp.) Control of Rent and Eviction Act 1947, ss. 3 and 7F--Rent Control Officer permitted institution of suit for ejectment--Suit filed--Commissioner revokes permission--State Government allows filing of suit--Defence for ejectment passed--Effect. HEADNOTE: The respondent-landlord obtained permission to institute a suit from the Rent Control & Eviction Officer under s. 3(1) of the U.P. (Temp.) Control of Rent and Eviction Act , 1947, for ejecting from his house the Appellant-tenant. The respondent filed a suit for eviction against the appellant. Later the Commissioner acting under s. 3(3) revoked the permission But on March 30, 1963 acting under s. 7F set aside the Commissioner's order and gave leave to the respondent to file the suit after 4 months of the date of the order i.e., July 30. 1963. On July 11, 1963 the trial court decreed the suit. The appellant filed an appeal. The appellate court set aside the trial court's decree and remanded the suit for fresh trial. On remand, the trial court decreed the suit on March 2, 1964 holding that the permission granted by became effective from July 30, 1963 and as the suit was. still pending a decree could be passed in the suit. This decision was affirmed by the first appellate court, and also by . Dismissing the .appeal this Court. HELD: If acting under s. 7F sets aside the order of the Commissioner revoking the permission. the order under s. 3(1) granting permission is revived. The 'result is that there is an effective permission to institute the suit under s. 3(1) and the suit is validity instituted. [578 D] The direction of the 'State 'Government to file the suit after four months of the order meant that the permission under s. 3(1) would become effective on the expiry of 4 months i.e. from July 30, 1963. The landlord had thus an effective permission to institute the suit under s. 3(1) from July 30, 1963. The decree in the suit was passed on March 2. 1964. On that date the landlord had a valid permission to institute the suit. The suit was therefore maintainable. [578 , 2 S.C.R. 297, distinguished. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1449 of 1966. ", "Appeal by special leave from the judgment and decree dated April 28, 1966 of in Second Appeal No. 289 of 1965. ", ", and , for the appellant. ", ", , and , for the respondent. ", "577 ", "The Judgment of the Court was delivered by , J. The appellant is the tenant and the respondent is the landlord of House No. 5B, Old 122 Maya Mirganj, Allahabad. The appeal arises out of a suit for ejectment by the landlord against the tenant from the house. On October 11, 1961, the landlord obtained permission to institute the suit from the Rent Control and Eviction Officer under s. 3 (1) of the U.P. (Temp.) Control of Rent and Eviction Act , 1947. On October 14, 1961 the landlord instituted the present suit for eviction against the tenant. On March 27, 1962 acting under s. 3 (3) revoked the permission to institute the suit. On March 30, 1963 acting under s. 7F set aside the Commissioner's order and gave leave to the landlord to file the suit with effect from July 30, 1963. On July 11, 1963 decreed the suit. The tenant filed an appeal against the decree. On November 4, 1963 the appellate court set aside the decree and remanded the suit for fresh trial. After the suit went back on remand decreed the suit on March 2, 1964. held that the permission granted by became effective from July 30, 1963 and as the suit was still pending a decree could be passed in the suit. An appeal against the decree was dismissed on November 28, 1964. A second appeal was dismissed by on April 28, 1966. The present appeal has been filed by the tenant after obtaining special leave. The sole question in the appeal is whether in the circumstances there was a valid permission to institute the suit under s. 3 (1 ). ", " (1) this Court held that a suit validly instituted after obtaining permission of the Commissioner under s. 3(3) did not become incompetent if the State Government acting under s. 7F revoked the permission after the institution of the suit. In that case the District Magistrate refused to give permission under s. 3 (1) to. institute the suit. The Commissioner acting under s. 3 (3) set aside the order and granted permission to institute the suit. The suit was decreed by on November 2, 1960. The tenant filed an appeal against the decree. During the pendency of the appeal the State Government acting under s. 7F revoked the permission granted by the Commissioner. The Court held that though the order under s. 3(3) was subject to an order under s. 7F the Government's power under s. 7F to revoke the permission granted by the Commissioner became exhausted once the suit was validly instituted. ", "In support of his contention that the present suit is not maintainable, the appellant relies on the following observations of , J. :- ", "[1969] 2 S.C.R. 297. ", "578 ", "\"When the Commissioner sets aside the order passed by the District Magistrate granting permission to file a suit for ejecting a tenant, the order of the Commissioner prevails. If he cancels the permission granted by the District Magistrate there is no effective permission left and the suit instituted by the plaintiff without a- waiting his decision must be treated as one filed without any valid permission by the District Magistrate.\" ", "Having regard to these observations the present suit though validly instituted after obtaining the permission under s. 3 (1) became incompetent when the permission was revoked by the Commissioner under s. 3 (3). But the order under s. 3 (3) itself was set aside by under s. 7F during the pendency of the suit. The question is what is the effect of this order under s. 7F . Now, s. 3(4) provides that the order of the Commissioner under s. 3(3) subject to an order passed by under s. 7F . If acting under s. 7F sets aside the order of the Commissioner revoking the permission, the order under s. 3 (1) granting permission is revived. The result is that there is an effective permission to institute the suit under s. 3 (1) and the suit is validly instituted. ", "In Case (1) the suit was validly instituted after obtaining permission from the Commissioner under s. 3 (3). could not render such a suit incompetent by any order under s. 7F . In the present case the suit was validly instituted after obtaining permission from the Rent Control and Eviction Officer under s. 3 (1). The effect of the order of the Commissioner revoking the permission was that the suit became incompetent. acting under s. 7F had power to revise and set aside the Commissioner's order and restore the permission granted under s. 3 (1) so as to make the suit competent. ", "The order of after stating that in the interest of justice the house should be available to the landlord for his use, set aside the Commissioner's order under s. 3(3) . The result was that the order of the Rent Control and Eviction Officer passed .under s. 3 (1) stood restored. The further direction in the order that the landlord \"is advised to file a suit for eviction from the house in dispute against the opposite party in a civil court under s. 3 of the Act, which will be applicable four months after the date of the order\" really means that the permission under s. 3(1) would become effective on the expiry of 4 months. The landlord had thus an effective permission to institute the suit under s. 3(1) on the expiry of four months from March 30, 1963, that is to say, as from July 30, 1963. The (1) 2 S.C.R. 297. ", " ", "decree in the suit was passed on March 2, 1964. On that date the landlord had a valid permission to institute the suit. The suit was therefore maintainable. ", "In the result, the appeal is dismissed. There will no order as to costs. ", " dismissed."], "relevant_candidates": ["0000404039"]} {"id": "0001474532", "text": [", J. ", "1. The plaintiff and the defendant first party were so-sharers in an estate in which one had an occupancy holding Sometime in 1899 or 1900 defendant No. 1 brought a suit against and purchased the occupancy holding and has continued to be in possession of the holding which has belonged to . There has recently been a Collectorate partition between the plaintiff and defendant No.. 1 and on such partition the lands in question have been allotted to the share of the plaintiff. The plaintiff, taking the view that upon the purchase of the occupancy holding by defendant No. 1 that holding became the bakasht of the plaintiff and defendant No. 1, claimed to be put in possession of the land in dispute. The below, agreeing with the view of the plaintiff, have decreed his suit. ", "2. It is necessary to remember that in dealing with the question we are governed by the Bengal Tenancy Act of 1885 and we have nothing whatever to do with the amendment of the Act in 1907. Now Section 22, Clause (2), of the Bengal Tenancy Act as it existed before the amendment in 1907 ran as follows: ", "If the occupancy right in land is transferred to a person jointly interested in the land as proprietor or the permanent tenure-holder, it shall cease to exist;but nothing in this sub-section shall prejudicially affect the rights of any third person. ", "3. The question was debated so far back as the year 1896 as to the position of a co-sharer proprietor purchasing an occupancy holding. It was ruled in the case of 24 C. 143 : 1 C.W.N. 166 : 12 Ind. Dec. (N.S.) 761 that there is no law which prevents one of the several co-proprietors from holding the status of a tenant under the other co-proprietors of land which appertains to the common estate and that the effect of the purchase by one co-owner of land of the occupancy right is, not that the holding ceases to exist, but only the occupancy right which is an incident of the holding. ", "4. According to decision of , there was nothing in the sub-section inconsistent with the continuance of the holding divested of this right of occupancy which attached to it. ", "5. The point again came up for consideration before in the case of v. Sheikh Kachu 33 C. 386 : 1 C.L.J. l; 9 C.W.N. 249 (F.B.). The Full Bench in that case agreed with the decision of 24 C. 143 : 1 C.W.N. 166 : 12 Ind. Dec. (N.S.) 761. Mr. Justice in the course of his judgment pointed out that since the Bengal Tenancy Act contemplated a class of raiyats different from raiyats with right of occupancy, namely, non-occupancy raiyats, and since Section 22 of the Bengal Tenancy Act deliberately stated that the occupancy right shall cease to exist, it followed that the holding did not cease by virtue of the purchase by the co-sharer landlord. In his view the holding still continued notwithstanding the purchase by the co-sharer landlord. ", "6. Now if this be correct, then something must happen subsequent to the acquisition of the holding by the co-sharer landlord to put an end to the holding. It is suggested that the partition between the co-sharer landlord puts an end to the holding; but in my judgment there is no foundation for this argument in the Bengal Tenancy Act and we have not been referred to any cases which support the argument put before is by the learned on behalf of the respondent. I do not desire to express any opinion on the question as to what the position will be tinder the Amending Act of 1907. In my judgment the view taken by the below is incorrect, and I would allow the appeal, set aside the judgments and decrees of the below and dismiss the plaintiff's action with costs throughout. ", ", ", "7. I agree."], "relevant_candidates": ["0001479692"]} {"id": "0001482259", "text": ["PETITIONER: UJAGAR PRINTS ETC. Vs. RESPONDENT: UNION OF INDIA & ORS. ETC. DATE OF JUDGMENT04/11/1988 BENCH: VENKATACHALLIAH, M.N. (J) BENCH: VENKATACHALLIAH, M.N. (J) RANGNATHAN, S. PATHAK, (CJ) MUKHARJI, SABYASACHI (J) NATRAJAN, S. (J) CITATION: 1989 AIR 516 1988 SCR Supl. (3) 770 1989 SCC (3) 488 JT 1988 (4) 330 1988 SCALE (2)1115 CITATOR INFO : RF 1991 SC 999 (8) F 1991 SC1784 (7,9) ACT: Central Excises and Salt Act , 1944- Sections 2(f) , 4 and Schedule Items 19 and 22--`Manufacture' meaning of-- Processors carry out operations on `grey fabrics' on job work basis--Whether `manufacture'--Central Excise and Salt Additional Duties Excise (Amendment) Act, 1980-Effect of. % Taxation--Under the Act is the rule--Benefit and exemption--The exception--Excise duty of goods--Levied upon manufacturer--lmposed on production/manufacture/producer in accordance with the relevant rules. Constitution of India, 1950, Article 245 , 246 and Schedule VII Lists I Entries 84, 97, Lists 11 and 111--\"With respect to\"--Inter-pretation of--`ManuJacture'--Concept of Entries in legislative lists--Not sources of legislative power--Merely topics or fields of legislation--Legislation could be `composite legislation'--`Rag-bag' legislation-- Familiar in taxation--Competent legislature can always validate law---Retroactivity of legislation---Test of validity how applied. Statutory Interpretation--Referential legislation--- Types of--Effect of--Legislation could be composite legislation--`Rag-hag' legislation--What is--Competent legislature can always validate a law. Words and phrases---`Manufacture'--'In respect of-- Meaning of. HEADNOTE: Section 2(f) of the Central Excise Act defines `manufacture', to include any process incidental or ancillary to the completion of a manufactured product. The President of India promulgated an Ordinance called the Central Excises and Salt and Additional Duties of Excise (Amendment) Ordinance 1979, which was later replaced by Central Act VI of 1980, called the Central Excises and Salt and Additional Duties of Excise (Amendment) Act, 1980. The PG NO 770 PG NO 771 Amending Act became effective from 24th February, 1979. By section 2 of the Amending Act, Section 2 (f) of the Excise Act was amended by adding three sub-items in the definition of `manufacture' so as to include activities like bleaching, dyeing, printing etc. which were held not covered by two decisions of . Similar amendments were made in items 19 and 22 of the First Schedule with retrospective effect. Section 5(2)(b) of the Amending Act provided that no suit or other proceedings shall be maintained or continued in any other Court for the refund of the duty collected and no enforcement shall be made by any Court of any decree or order directing the refund of such duties of excise which have been collected and which may have been collected, as if the provisions of Section 5 of the Act had been in force on and from the appointed day as defined in the Act. Prior to the Amending Act , 1980, the levy an the processors, was challenged before in the case of vijay nd Real Honest Textile v. Union of India, 4 E.L.E.J. 181. held that cotton fabric subjected to bleaching, dyeing and printing could not be subjected to excise duty under items 19 and 22 of the First Schedule to the Central Excises and Salt Act , 1944, and that processors were liable to pay duties under tariff-entry 68 only on the value added by that processor. Following this judgment a large number of similar claims of ,processing-houses were allowed by by its judgment dated 13.3 1979. However, , took a different view and held that even under the concept of manufacture' envisaged in section 2(f) even prior to its amendment, the operations carried on by the professors amounted to `manufacture' and that, at all events, the matter was placed beyond any controversy by the Amendment Act of 1980. The judgment of in the case of and was considered by a Bench consisting of three judges of this Court in Supp. 1 SCR 292 and it was held not to have been decided correctly. The view taken by in . ELT 1736. was approved. The present appeals, by special leave, preferred against the judgments of of Gujarat and of Bombay, and the batch of writ petitions under Article 32 of the Constitution of India, involve common PG NO 772 questions of law concerning the validity of the levy of duties of excise under tariff-items 19 and 22 of the Schedule to the Central Excises and Salt Act 1944 (\"Central Excise-Act\") as amended by the Central Excises and Salt Additional Duties Excise (Amendment) 1980 Act (\" Amending Act \") treating as `manufacture' the process of bleaching, dyeing, printing, sizing, mercerising, water-proofing, rubberising, shrink-proofing, organdie processing etc. done by the processors who carry out these operations in their factories on job-work basis in respect of `cotton-fabric' and `Man-made fabric' belonging to their customers. The facts in all the cases are indenticl. The petitioners/appellants carry out the operations of bleaching dyeing, printing sizing, finishing etc. of grey fabric on job-work against payment of processing charges to it by the customers who are the owners of the grey-fabric. The machinery and equipment installed in the petitioners' factories are suited for and appropriate to the processing of grey-fabric and are not capable to manufacturing grey- fabric. The man-made grey-fabric, such as, Art Silk Grey- fabric is manufactured in mills and on power looms and that latter is exempt from excise duty on its manufacture. The Art Silk Grey-fabrics which are processed in the petitioners/appellants factories are those manufactured on power looms and not by the mills and that the Art Silk Grey- fabric received do not come from the manufacturers of the grey-fabric through the manufacturing-stream but from the various trader through the sales-stream. The present writ petitions/appeals also include cases where the grey-fabric is also purchased by some of the processing houses and are sold by them, after processing. In some cases, the manufacturers of the grey-fabric subject it to captive consumption and process them in their own composite establishments. At the time of hearing, the correctness of the view taken in the case on certain aspects having been doubted by another Bench of this Court, these appeals/writ petitions were referred to a Bench of five judges on two questions namely (1) whether the processing of grey-fabric amounted to `manufacture' within the meaning of Section 2(f) as it stood prior to its amendment, and (2) whether, even if such processing did amount to `manufacture' what should be the proper basis for determining the assessable value of the processed fabrics. In the petitions and appeals, the following points arise for determination. PG NO 773 A(i) Whether the process of bleaching, dyeing, printing, sizing, shrink-proofing etc. carried on in respect of cotton or man-made `grey-fabric' amount to `manufacture' for purposes, and within the meaning of Sect;on 2(f) of the Central Excises and Salt Act 1944 prior to the amendment of the said Section 2(f) by section 2 of the Amending Act VI of 1980. A(ii) Whether the decision in Limited JUDGMENT: ", "that these operations amount to `manufacture' is wrongly decided and requires reconsideration. ", "(B) Whether the amendment brought about by the Act of 1980 of Section 2(f) and to tariff-items 19 and 22 of the Central Excise Act is ultra-vires Entry 84 List 1 and, therefore, beyond the competence of . Whether, at all events, even if the expended concept of manufacture introduced by the Amendment is beyond the scope of Entry 84 List 1, whether the impost is, at all events, referable to and supportable by the residual Entry 97 of List 1. ", "(C) Whether, at all events even if the amendments to Central Excise Act are valid, the levy under the Additional Duties Act is unsupportable and without the authority of law as there is no corresponding enlargement of the definition of `manufacture' under the Additional Duties Act. (D) Whether the retrospective operation of the Amending Act is an unreasonable restriction on the fundamental right of the `processors' under Article 19(1)(g) of the Constitution. ", "(E) Whether, even if the levy is justified, at all events, the computation of the assessable-value of the processed grey-fabric on the basis of the whole-sale cash selling-price declared under classification list under Rule 173(b) is unjustified and illegal in respect of the assessable value of the processed grey-fabric done on job- work-basis. ", "Allowing the appeals preferred by , HELD: (Per Majority) The appeals preferred by are allowed and the Judgment of under appeal is PG NO 774 set-aside. The appeals preferred by the processors against the judgment of and the Writ Petition filed by the processors directly in this Court are dismissed. and its authorities shall be entitled to take necessary steps to seek the enforcement of the bank guarantees, if any for the recovery of the arrears. [810C-D] Per Sabyasachi Mukharji, J. (Concurring with Venkatachaliah. J.) (1) A statutory charge should be measured by the method of its computation as laid down in the statute and not by any other method of computation. The circumstances that thereby the benefit of any computation granted by the legislation may be lost and that in some cases hardship might result are not matters which would influence courts on the Instruction of the statute. A tax payer is entitled only to such benefit as is granted by the legislature [811C-D] (2) (i) Where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at the arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise. But the price received by he wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealers would be irrelevant for determination of the value of the goods and the goods would be charged on that basis. [812E-F] (2) (ii) The valuation must be on the basis of wholesale cash price at the time when the manufactured goods enter into the open market. The value of the trade-marks is not to be taken into account in computing the assessable value as the affixation of the trade-marks of a particular brand was extraneous to manufacture. The values of such extraneous on additional factors do not enter into the computation of assessable value and as such the wholesale cash price at which the goods enter into the wholesale market would be independent of the value of the trade-marks. [812G-H:8134A- B] (2)(iii) The assessable value would, therefore, include the value of the grey cloth in the hands of the processors plus the value of the job-work done plus manufacturing profits and manufacturing expenses whatever would be included in the price at the factory gate. The correct assessable value must be the value of the fabric at the factory gate, that is to say, the value at which the manufactured goods leave the factory and enter the main stream. [813E] PG NO 775 ", "3. Computation of the assessable-value is one question and as to who should be liable for the same is another. Duties of excise are imposed on production or on manufacture of goods and are levied upon the manufacturer or the producer in accordance with the relevant rules. This is quite independent of the ownership of goods. It is, there- fore, necessary to reiterate that the value for, the assessment under Section 4 of the Act will not be the processing charge along but the intrinsic value of the processed fabric which is the price at which the fabrics are sold for the first time in the wholesale market. The rules are clear on the computation of that value.[813F- . Collector of Central Excise and Ors., 3 S.C.R. 563; etc. etc. v. etc. etc., 1 S.C.R. 347 at 375; ., Suppl. 3 S.C.R. 95 and ., 11985] Suppl. 3 S.C.R. 165, followed. ", "Per , J. (for himself and on behalf of , and S. , J.) 1(i) The prevalent and generally accepted test to ascertain that there is `manufacture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes. [797E-F] 1(ii) The view taken in the Empire Industries case that `grey-fabrics' after they undergo the various processes of bleaching, dyeing sizing, printing, finishing etc. emerges as a commercially different commodity with its own price- structure, custom and other commercial incidents and that there was in that sense a `manufacture' within the meaning of Section 2(f) , even as unamended, is an eminently plausible view and is not shown to suffer from any fallacy. [798A- , Supp. 1 S.C.R. 536 at 597; , 2 S.C.R. 14; , 3 S.C.R. 1271 at 1275; Sterling Foods v. State of Karnataka, PG NO 776 3 S.C.C 469 at 475 & 476; ., 8 S.T.C. 358; Deputy Commissioner sales , 42 S.T.C. 2 (Kerala); , E.L.T. 164 (Gujarat); , 25 S.T.C. 122 (Allahabad); , 32 S.T.C. 322 (Andhra Pradesh); , E.L.T. 380 (Gujarat); In Health & Milligan Manufacturing Company, , etc. v. Director of ; ., 8 S.T.C. 358; Commissioner of Sales Tax, U.P. (Lucknow) v. , 21 S.T.C. 17; , 8 S.T.C. 325 at 326 and ., 10 E.L.T. 253, referred to. ", "2(i) Entries in the legislative lists. are not sources of the legislative power but are merely topics or fields of legislation and must receive a liberal construction inspired by a broad and generous spirit and not in a narrow pedantic sense. The expression \"with respect to\" in Article 246 brings in the doctrine of \"Pith and Substance\" in the understanding of the exertion of the legislative power and wherever the question of legislative-competence is raised, the test is whether the legislation, looked at as a whole, is substantially `with respect to' the particular topic of legislation. If the legislation has a substantial and not merely a remote connection with the entry, the matter may well be taken to be legislation on the topic. [799B-D] 2(ii) Competence to legislate flows from Articles 245. 246 and the other Articles following in Part XI of the Constitution. In defending the validity of a law questioned on ground of legislative-incompetence, the can always show that the law was supportable under any other entry within the competence of the legislature. Indeed in supporting a legislation sustenance could be drawn and had from a number of entries. The legislation could be a composite legislation drawing upon several entries. Such a \"rag-bag\" legislation is particularly familiar in taxation. [800F-G] Diamond Sugar Mills v. of IJ.P., 3 S.C.R. 242 at 248; Statutory Interpretation, at page 644 and ., 2 S.C.R. 22, referred to. ", "PG NO 777 2(iii) So far as, the exclusive competence of to legislate is concerned, all that is necessary is to find out whether the particular topic of legislation is in List 11 or List 111. If it is not, it is not necessary to go any further or search for the field in List 1. has exclusive power to legislate upon that topic or field. Of course, it has concurrent power also in respect of the subjects in List 111. [801E-F] 2(iv) Even if the impost on process is not one under Entry 84, List 1, but Is an impost of `processing' distinct from `manufacture' the levy could yet be supported by Entry 97, List 1, even without the aid of the wider principle recognised and adopted in 's case AIR 1972 SC 1061. [799F] ", "3. Section 4 of the Amending Act VI of 1980 has amended the relevant items in the schedule to the Additional Duties Act, the expressions' `produce' or `manufacture' in Section 3(1) of the Additional Duties Act must be read along with the entries in the Schedules. What appears, therefore, clear is that what applies to the main levy, applies to the additional duties as well. [803F] ., S.C.R. 664 at 673; Macbath & Com. v. Chisletr, AC 220 at 224; , [19671 2 S.C.R. 720 at 725-26; ., 1 S.C.R. 822 at 835; Att.-Gen. v. 3 Ex. D. 214, 299; Interpretation of States, 11th ed. p. 156 and Bennion's Statutory Interpreation, p. 568-569, referred to. 4(i) A Competent legislature can always validate a law which has been declared by court to be invalid provided the infirmities and vitiating factors noticed in the declaratory-judgment are removed for cured. Such a validating law can also be made retrospective. If in the light of such validating and curative exercise made by the legislature---granting legislative--competence--the earlier judgment becomes irrelevant and unenforceable, that cannot be called an impermissible legislative overruling of the judicial decision. All that the legislature does is to usher in a valid law with retrospective effect in the light of which earlier judgment becomes irrelevant. Such legislative expedience of validation of laws is of particular significance and utility and is quit often applied, in taxing statutes. It is necessary that the legislature should be able to cure defects in statutes. No individual can PG NO 778 acquire a vested right from a defect in a statute and seek a wind-fall from the legislature's mistakes. [804G-H; 805A- ., 1 S.C.R. 388, referred to. 4(ii) Validity of legislations retroactively curing defects in taxing statutes is well recognised and courts, except under extraordinary circumstances, would be reluctant to override the legislative judgment as to the need for and wisdom of the retrospective legislation. [805C] 4(iii) In testing whether a retrospective imposition of a tax operates so harshly as to violate fundamental rights under article 19(1)(g ), the factors considered relevant include the context in which retroactivity was contemplated such as whether the law is one of validation of taxing statute struck-down by courts for certain defects; the period of such retroactivity, and the decree and extent of any unforeseen or unforeseenable financial burden imposed for the past period etc. Having regard to all the circumstances of the present case, this court in case rightly held that the retroactivity of the Amending provisions was not such as to incure any infirmity under Article 9(1)(g). [805E-G] 5(i) Section 4 of the ` Central Excise Act ' envisages that the value of an article for the purposes of duty shall be deemed to be; (a) the wholesale cash price for which an article of the like kind and quality was sold or was capable of being sold at the time of removal of the article from the factory or premises of manufacture for delivery at the place of manufactures or (b) where such price was not ,ascertainable the price at which an article of the like kind and quality as sold or capable of being sold al the time of removal of the article chargeable with duty [808F-G] 5(ii) Consistent with the provisions of Section 4 and the Central Excise (Valuation) Rules, 1975, framed under sec. 37 of the Act, it cannot be said that the assessable- value of the processed fabric should comprise only of the processing-charges. this extreme contention, if accepted, would lead to and create more problems than it is supposed to solve, and produce situations which could only be characterised as anomalous. The incidence of the levy should be uniform, uninfluenced by fortuitous considerations. The view taken in the matter in case does not call for reconsideration. [809C-D] PG NO 779 5(iii) The question whether the producer or the manufacturer is or is not the owner of the goods is not determinative of the liability. The essential and conceptional nature of the tax is to be kept clearly distinguished from both the extent of the power to impose and the stage at which the tax is imposed. Though the levy is on the production or manufacture of the goods, the imposition of the duty could be at the stage which the law considers most convenient to impose as long as a rational relationship with the nature of the tax is maintained. [806B-D] 5(iv) The nature of the excise duty is not to be confused with, or tested with reference to, the measure by which the tax is assessed. The standard adopted as the measure of assessment may throw light on the nature of the levy but is not determinative of it. When a statutory measure for assessment of the tax is contemplated, it \"need not contour along the lines which spell out the levy itself', and \"a broader based standard of reference may be adopted for the purposes of determining the measure of the levy\". Any statutory standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the tax. [808G-H; 809A- ., 3 S.C.R. p. 563 and etc. v. etc.. 1 S.C.R. p. 347 at 375, referred to. ", "Per , J. (Concurring with , J. 1(i) v. , The HMM case) [1980] ELT 480, was based not on the scope of legislative entry 97 in List I but on the language and scope ot the amendment actually effected. It was considered not necessary or possible to stretch the language of the definition in S. 4 beyond the ambit of the provision as delineated in the earlier decisions. The question decided was not that the legislature could not, but that it did not make any redical change in the nature of the levy. [815F-G] 1(ii) There is nothing in the decision HMM case that supports the contention of the petitioners here that the amendment of the definition of `manufacture' cannot be sustained by reference to entry 97 of List 1 in the Seventh Schedule to the Constitution of India, if it cannot be upheld as falling under the purview of Entry 84. [816H; 817A] PG NO 780 2(i) The words `levied' is a wide and generic expression. One can say with as much appropriateness that the Income Tax Act levies a tax on income as that the Income Tax Officer levies the tax in accordance with the provisions of the Act. It is an expression of wide import and takes in all the stages of charge, quantification and recovery of duty, though in certain contexts it may have a restricted meaning. In the context of sub-section (I) the word 'levied' admittedly means `charged as well as assessed'. The words `levy and collection' in sub-section (3) cannot be construed differently from the words `levied and collected' used in sub-section (1). Section 3(3) , therefore. also covers the entire gomut of s. 3(1) and cannot be construed as becoming operative at some what later stage. Its operation cannot be excluded in determining the scope of the charge. [818F-H] 2 (ii) Having regard to the nature and content of the levy indicated in s. 3(1) , it is obvious that s. 3(3) has to have the effect of attracting not only the purely procedural and machinery provisions of the 1944 Act but also some of its charging provisions. It is, therefore, difficult to consider section 3(1) of the 1957 Act--in contrast to the Finance Act of 1965--as covering the entire ambit of the charge imposed. In short, the language of s. 3(3) has to be given a wider meaning than under the Finance Act , 1965. A provision similar to that in s. 80 of the Finance Act, 1965 is also found in other Finance Act s. On perusal of these provisions, it will be found that a like position exists there also. These provisions are all self-contained and completely specify the scope of the charge either as a percentage of the excise duty normally chargeable under the Central Excises & Salt Act , 1944 or as a percentage of the `assessable value determined under s. 4 of the 1944 Act. This is very important reason why the observations in the s, case 2 S.C.C. 719 cannot be of application in the context of the 1957 Act. [821E-H] M/s Mahendra Pratap Rama Chandra v. & Others. A.I.R. 1965 Cal. 203, referred to. 3(i) Legislatures sometimes take a short cut and try to reduce the length of statutes by omitting elaborate provisions where such provisions have already been enacted earlier and can be adopted for the purpose on hand. While, on the one hand, the prolixity of modern statutes and the necessity to have more legislations than one on the same or allied topics render such a course useful and desirable, the attempt to legislate by reference is sometimes overdone and brevity is achieved at the expense of lucidity. However this legislative device is quite well known and the principles applicable to it fairly well settled. [823C-D] PG NO 781 3(ii) Referential legislation is of two types. One is where an earlier Act or some of its provisions are incorporated by reference into a later Act. In this event, the provisions of the earlier Act or those so incorporated, as they stand in the earlier Act at the time of incorporation, will be read into the later Act. Subsequent changes in the earlier Act or the incorporated provisions will have to be ignored because, for all practical purposes the existing provisions of the earlier Act have been re- enacted by such reference into the later one, rendering irrelevant what happens to the earlier statute thereafter. On the other hand, the later statute may not incorporate the earlier provisions. It may only make a reference of a broad nature as to the law on the subject generally or contain a general reference to the terms of an earlier statute which are to be made applicable. In this case any modification, repeal or re-enactment of the earlier statute will also be carried into in the later, for here, the idea is that certain provisions of an earlier statute which become applicable in certain circumstances are to be made use of for the purpose of the later Act also. [823E-H] 3(iii) Whether a particular statute falls into the first or second category is always a question of construction. [824B] In the present case, the legislation falls into the second category. S. 3(3) of the 1957 Act does not incorporate into the 1957 Act any specific provisions of the 1944 Act. It only declares generally that the provisions of the 1944 Act shall apply 'so far as may be\"'. that is, to the extent necessary and practical, for the purposes of the 1957 Act as well. [824B- A.I.R. 1941 P.C. 149; , A.I.R. 1975 S.C. 17; , A.I.R. 1979 S.C. 798; v. , 3 S.C.R. 561; , 3 S.C.R. 786; , 2 S.C.R. 92; Special Land Acquisition Officer v. , 1 S.( referred to. ", "3(iv) The legislation presently in question is clearly in pari materia with the 1944 Act. It is also merely supplemental. While the 1944 Act imposes a general levy of excise duty on all goods manufactured and produced, and aim of the present Act is to supplement the levy by an additional duty of the same nature on certain goods. ", "PG NO 782 The duration of the applicability is underfined but the statute is clearly enforceable as long as it is in the statute book side by side with the normal excise duties. The clear intention is that the same provisions shall govern both the levies except that the duty under the later Act is confined to certain goods only und its distributability among the States may perhaps follow a different pattern from the principal duty. [825B-C] 3(v) The Finance Act s which levied special or regular or additional excise duties contained in themselves all the elements of charge or duty. T he goods were mentioned and the duty has to be levied either at a percentage of the normal excise duty payable under the 1944 Act or at a percentage of the value of the assessable goods as determined under the 1944 Act. All that was further needed was the applicability of the procedural provisions of the 1944 Act. However, the 1957 Act is incomplete as to the basis of the charge and its provisions would become totally unworkable unless the concepts of 'manufacture' and 'assessable value' as determined under the 1944 Act are carried into it. [825D-F] & ORIGINAL JURISDICTION: Writ Petition No. 12183 of 1985 etc. etc (Under Article 32 of the Constitution of India) . Attorney General, , , , , Mrs. , Mrs. , Ms. , , , Ms. , , , , . . , , , , , Mrs. , Mrs. , , Mrs. , . . Ms. , , Mrs. , Ms. . , , , , . Mrs , , , , , , , , , . , , , Ms. , and for the appearing parties. ", "The following Judgments of the Court were delivered These appeals, by Special Leave, preferred against the Judgments of and and the batch of writ-petitions under Article 32 of the Constitution of India are heard together and disposed of by this common judgment as they all involve questions--common to them--concerning the validity of the levy of duties of excise under tariff-items 19 and 22 of the Schedule to the Central Excises and Salt Act 1944 (\"Central-Excise-Act\") as amended by the Central Excise and Salt Additional Duties Excise (Amendment) 1980 Act ( '\" Amending Act \") treating as \"Manufacture\" the process of Bleaching. Dyeing, Printing, Sizing, Mercerising, water- proofing, rubberising, Shrink-Proofing Organdie, Processing, etc done by the processor who carry out these operations in their factories on Job-work basis in respect of Cotton- fabric' and 'Man-made fabric belonging to their customers The Amending Act which became effective from 24.12.1979 sought to render the processes of Bleaching, Dyeing, Printing Sizing, Mercerising etc \"Manufacture within the meaning of the Section 2(f) of the Central Excise Act The amendment was necessitated by the Judgment of which has declared the levy on such 'processing as illegal as, according to the processing did not bring into being a new and commercially different article with a distinctive character and use and did not therefore constitute 'manufacture' for purposes, and within the meaning, of the charging section. ", "The processors who carry-out these operations on cotton fabrics or \"man-made fabrics which are popularly go by the name 'Grey-fabric in the particular trade also challenged the levy of the additional duties of excise under the provisions of the additional Duties of Excise goods (of special importance) Act 1957 (Additional Duties Act) on the ground, first. that if the processes carried on by them do not amount to \"manufacture\" under Section 2(f) as it originally stood, then, consistent with the impermissibility of main impost. the levy of additional duties also fails and, that at all cvents, even after the amendment the concept of manufacture under the said Additionl Duties Act had not been correspondingly widened by an appropriate amendment. ", "2. The present hatch of appeals and writ-petitions comprise of a large number of cases It is not, having regard to the questions requiring to be decided in these matters, necessary to go into, in any particular detail, the fact- situation of each individual case. The processors in these PG NO 784 cases, who may conveniently be referred to as the processors\" or \"jobbers ', mainly carry out these operations of Bleaching, Dyeing, Printing, Sizing, Finishing etc. of 'Grey-fabric' on 'job-work' against payment of processing charges to them by the customers who are the owners of . The ownership of the cloth rests with the customers who get these processes done to their specifications from these processing-houses on payment of processing charges. The Grey-fabric, after processing, is returned by the processing-house to the customers. The facts of W P. No. 12 183 of 1985 ' .), in which the petitioner has challenged the levy by a petition under Article 32 of the Constitution are typical and representative of all other similar cases The petitioner is a firm of partners with its Head Office at 51, Sheikh Memon Street, Bombay. It has a factory at Sunder Baug, Deonar, Bombay, which is equipped with machinery and plants for processing of man-made grey- fabric The machinery and equipment installed in the petitioners factory? it is averred---and that is not disputed either--are suited for and appropriate to the processing of Grey-fabric and are not capable of manufacturing Grey-fabric The man-made grey-fabric such as Art Silk Grey--fabric, it is stated, is manufactured in mills and on power looms and that letter- is exempt from excise duty on its manufacture Petitioners further over that the Art Silk (Grey-fabrics which are processed in the petitioner' factory are those manufactured on power looms and not by the mills and that the Art Silk (Grey-fabric received do not come from the manufacturers of the grey- fabric through the manufacturing-stream but from the various traders through the sales stream. The point that the petitioners seek to made is that the processing of the grey-fabric is not a part, a continuation, of the process of manufacture in the manufacturing-stream, but is an independent and distinct operation carried out in respect of , after it has left manufacturing-stage and has become part of the common-stock of goods in the market. It is also averred that the firm does not purchase but is only engaged in processing it for charges and that in many cases would have passed on from trader to trader with the attendant increase in the prices with each successive change of hands and is entrusted to the petitioner by the last purchaser for processing against stipulated processing-charges on job work basis. ", "It is contended that these job work processing operations do not amount to \"manufacture\" as the petitioners do not carry out any spinning or weaving operations; that what they receive from their customers for processing is PG NO 785 therwise fully manufactured man-made fabric and that what is returned to the customers after processing continues to remain man-made fabric. The imposition of excise duty on the processor on the basis of the full-value of the processed material, which reflects the value of grey-fabrics, the processing-charges, as well as the selling profits of the customers is, at once unfair and anamolous, for, in conceivable cases the duty itself might far exceed the processing-charges that the processors stipulate and get. ", "3. The batch of cases also includes cases where the grey-fabric is also purchased by these processing-houses and are sold by them, after processing In some cases the manufacturers of the grey-fabric subject it to captive consumption and process them in their own compositeestablishments . ", "The essential question is whether these situational- differences have a bearing on the principles of determination of the assessable-value of processed grey- fabric and whether the assessable value could be different in the different fact-situations which would be the logical corollary if the contention of the processing-houses which do not processing work for charges on the goods not their own, is accepted and the assessable value determined on the basis of mere processing-charges. ", "But the main questions that arise are whether \"processing\" of the kind concerned in these cases amounts to manufacture\", whether the provisions of section 2 of the Amending Act which impart an artificial-dimension to the concept of \"manufacture\" is ultra-vires Entry 84 List l; whether at all events, the imposition of a tax on such 1processing is referable to Entry 97 List l; and if the import on the processors is justified under tariff-items 19 and 22, according as whether the Grey-fabric is cotton or 'man-made, what should be the assessable-value for purposes of levy of duty so far as processors are concerned. ", "4. Prior to the Amending Act of 1980, the levy on the processors was challenged before by its judgment dated 24.1.1979 in the cases of and v. Union of India held that the processes that the processing-houses imparted to the Grey-fabric did not amount to 'manufacture' and did not attract ad-valorem duty under tariff-items 19 and 22, and that processors were liable to pay duty under tariff-entry 68 only on the value added by the processing. ", "PG NO. 786 ", "Following this judgment a large number of similar claims of processing-houses were allowed by by its judgment dated 13.3.1979. Civil Appeals 1685 to 1766 of 1979 are preferred by challenging this view of . ", "5. on the contrary by its judgment,dated 16th June, 1983 in writ petition 1623 of 1979 . took a view different from the one that commended itself to . held that even under the concept of \"manufacture' envisaged in Section 2(f) even prior to its amendment, the operations carried on by the processors amounted to \"manufacture\" and that, at all events, the matter was placed beyond any controversy by the mending Act i.e. Act of 1980. The aggrieved processors have come up in appeal by Special Leave in Civil Appeal No 6396 of 1983. ", "6. Some of the processors have, as stated earlier, filed writ-petitions under Article 32 directly in this court challenging the impost on grounds that commended themselves for acceptance to . ", "7. Before its amendment by the Amending Act Central Act VI of 1980) Section 2(f) of the Central Excise ACt, defined 'manufacture' in its well accepted legal-sense--nomen-- juris--and not with reference to an artificial and statutorily expanded import \"2(f) 'manufacture ' includes any process, incidental or ancillary to the completion of a manufactured product; and ", "(i) ] ", "(ii) ] Omitted as unnecessary\" ", "The reasoning of was on these lines \"In the instant case, the excise duty claimed on the basis of the market value of the processed cotton fabrics or manmade fabrics cannot be levied because, assuming that process amounts to manufacture, all that they have done is to manufacture processed cloth, processed fabric, either cotton or man-made and that not being a taxable event in the light of Section 3 read with section 2(d) of the Act and PG NO 787 Items 19 and 22 levy of excise duty on this basis was ultra vires and contrary to law .. \" ", "This view, according to the , was incorrect and caused serious prejudice to the legitimate financial interests of the State. Accordingly the President of India promulgated an Ordinance called the 'Central Excise and Salt and Additional Duties of Excise (Amendment) Ordinance', 1979 (Central Ordinance No. 12 of 1979)--sub-sequently replaced by Central Act VI of 1980 of the same name with retrospective effect from 24.2.1979--amending Section 2(f) of the Central Excise Act and tariff-items 19(1) and 22(1). The relevant entries in the Schedule to the 'Additional Duties Act' were also amended. So far as amendment to Section 2(f) was concerned, Section of the Amending Act introduced three sub-items in the definition of 'manufacture'. Two of them are material for the present purpose: ", "\"(v) in relation to goods comprised in Item No. 19(1) of the First schedule, includes bleaching, mercerising, dyeing, printing, water-proofing, rubberising. shrink-prcofing, organdie processing or any other process or any one or more of these processes. ' \"(vii) in relation to goods comprised in Item No 22(1) of the First Schedule, includes bleaching. dyeing, printing, shrink-proofing, tentering, heat-setting, crease resistant processing or any other process or any one or more of these processes.\" ", "Similarly, amendments were affected by Section 3 of the Amendment Act which amended the original tariff-items 19 and 22 by sub-stituting the following provisions in their respective places: ", "\" 1 Cotton fabrics other than (i) embroidery in the piece. strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials ", "(a) cotton fabrics. not subjected to any process Twenty per cent ad-valorem ", "(b) cotton fabrics, subjected to the process of bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink-proofing, organdie processing or any other process or any two or more of these processes. Twenty per cent ad-valorem PG NO 788 XXX XXX XXX\" ", "\"22(1) Man-made fabrics other than (i) embroidery in the piece, in strips or in motifs, (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials-- ", "(a) man-made fabrics, not subjected to any process: Twenty per cent ad-valorem plus rupees five per square metre. ", "(b) man-made fabrics, subjected to the process of bleaching, dyeing, printing, shrink-proofing, tentering, heat-setting, crease resistant processing or any other process or any two or more of these processes Twenty per cent ad-valorem plus rupees five per square metre.\" ", " Section 4 of the Amending Act amended the relevant entries in the Schedule to the Additional Duties Act. Section-5(2) of the Amending Act provided: ", "\"5 Special provisions as to duties of excise on cotton fabrics, woollen fabrics, man-made fabrics, etc during a certain past period and validation:- ", "(1).................... ", "(2) Any rule or notification or any action or thing made issued, taken or done or purporting to have been made. issued, taken or done under a Central Act referred to in sub-section (I) before the date of commencement of this Act, with respect to or in relation to the levy of duties of excise on-- ", "(a) 'cloth\", \"cotton cloth\" or, as the case may be. cotton fabrics,\" ", "(b) woollen fabrics\", ", "(c) \"rayon or artificial silk fabrics\" or, as the case may be, \"man-made fabrics\", shall for all purposes be PG NO 789 deemed to be and to have always been, as validly and effectively made, issued taken or done as if the provisions of this section had been in force at all material times and, accordingly, notwithstanding any judgment, decree or order of any court, tribunal or other authority-- ", "(a) all duties of excise levied, assessed or collected or purported to have been levied assessed or collected before the date of commencement of this Act, on-- ", "(i) \"cloth\", \"cotton cloth\" and \"cotton fabrics\" subjected to any process, ", "(ii) \"woollen fabrics\" subjected to any process, ", "(iii) \"rayon or artificial silk fabrics\" and \"man-made fabrics\" subjected to any process, under any such Central Act shall be deemed to be, and shall be deemed always to have been, as validly levied, assessed or collected as if the provisions of this section had been in force on and from the appointed day; ", "(b) no suit or other proceeding shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of, any such duties of excise which have been collected and which would have been validly collected if the provisions of this section had been in force on and from the appointed day; ", "(c) .................... ", "(d) ....................\" ", "8. Indeed, the correctness of the judgment of in the cases of and Real Honest Textiles were considered by a Bench consisting of three judges of this court in , SUPP. I SCR 292 by the judgment dated 6.5.1985, one of us ( ) speaking for the Court upheld the validity of the impost , (1979] 4 ELTJ 181, was held not to have been PG NO 790 decided correctly. The view taken by in . was approved. ", "The pronouncement of this court in case otherwise covers, and is a full answer to, the contentions raised in this batch of cases. However, the correctness of the view taken in the ' case on certain aspects was doubted by another Bench of this court and the matter was, accordingly, referred to a Bench of five judges. ", "9. It is, perhaps, necessary to refer to the order dated 9.12.1986 made by referring the cases to a larger bench. What came before were WP 12183/1985 ( .) and CA Nos. 1685-1766/1979 ( v. .). Two questions arose before and were examined by . The first was whether the processing of Grey-fabric amounted to 'manufacture' within the meaning of Section 2(f) as it stood prior to its amendment. The second question was whether, even if such processing did amount to 'manufacture' what should he the proper basis for determining the assessable- value of the processed fabrics. Both these questions had earlier been examined and answered in the case. It is necessary to ascertain as to the precise points on which the ' decision was required to be reconsidered. did not disagree with the decision in ' case on the question whether processing' did amount to 'manufacture'. Indeed, appears to have proceeded on the premise that the view taken in case on the point was the correct one. Referring Bench said this on the point: ", "\".... So far as the first question is concerned it was agitated before this Court in v and this Court held that the processes of bleaching, mercerising, dyeing, printing. water-proofing. etc. carried out by the processors on job-work basis amount to manufacture both under the Act as it stood prior to the amendment as also under the Act subsequent to the amendment and the processed fabrics are liable to be assessed to excise duty in the hands of what may be called jobbers'. Since this was a decision given by a Bench of three Judges, the petitioners and appellants who are carrying on business of processing on job-work basis could not contend that these PG NO 791 processes do not amount to manufacture and that the processed fabrics are not liable to be assessed to excise duty in the hands of the jobbers. But, it was the second question which provoked serious controversy before us . . It is only on the second question touching valuation that it expressed some doubts. Nevertheless, in par. 6 of the order, made a further observation to this effect: ", "\".... Of course, when. ,n se writ petitions and appeals are referred to the larger Bench it will be open to the larger Bench to consider not only the question of determination of the assessable value but also the other question, namely, whether processing of grey fabric by a processor on job work basis constitutes manufacture, because the judgment in case which has decided this question in favor of the revenue and against the processor is a judgment of a Bench of only three Judges and now the present writ petitions and appeals will be heard by a Bench of five Judges .\" ", "10. This is how the first question which is, otherwise concluded by the pronouncement in case is sought to be reagitated before us Out of deference to the learned counsel who vigorously argued this aspect at great length and we though we should examine the submission on this point also, though, the matter could by no means be considered to have been referred to a larger bench. On the second question also the matter is within a short compass. The Referring Bench clearly excluded any possibility of the assessable-value being limited to the mere processing-charges. It contemplated the alternative possibilities of valuation thus: ", "\"It was common ground between the parties that the procedure followed by the authorities was that the trader, who entrusted cotton or man made fabrics to the processor for processing on job-work basis would give a declaration to the processor as to what would be the price at which he would be selling the processed goods in the market and that would be taken by the authorities as the assessable value of the processed fabrics and excise duty would be charged to the processor on that basis. This may be illustrated by giving the following example: ", "PG NO 792 ", "(i) Value of grey cloth in the hands of the processor: Rs. 20.00 (2) Value of job-work done: Rs.5.00 Value of finished cloth returned to the trader ( 1+2): Rs.25.00 (3) Trader's selling price inclusive of his selling profits, etc.: Rs.30.00 The assessable value in the case given in this example would be taken by the Excise authorities at Rs.30 which was the sale price of the trader . . .'' The view of the Referring Bench on the point was this: \"We cannot accept the contention of the learned counsel on behalf of the petitioners and the appellants that the value of the grey cloth which is processed by the processor should not be included in the assessable value of the processed fabric since the grey cloth is one of the raw materials which goes into the manufacture of the processed fabric and the value of the processed fabric cannot be computed without including the value of the raw material That goes into its manufacture. The assessable value of the processes fabric cannot therefore be limited merely to the value of the job-work done but it must be determined by reference to the wholesale cash price of the processed fabric gate of the factory of the processor . . . The Referring Bench was of the view that the correct assessable-value should be: ", "\"..... Thus in the example given above the assessable value of the processed fabric must be taken to be Rs. 20 + 5 that is Rs. 25 and the profit of Rs.5 which the trader may make by selling the processed fabric cannot be included in the assessable value. The element of selling profit of the trader would be entirely an extraneous element and it cannot be taken into account for the purpose of determining the assessable value of the processee fabric which would comprise the value of the grey cloth and the PG NO 793 job-work charges but exclude the profit at which the trader may sub-sequently sell the processed fabric.\" ", "11. We have heard , , Dr. and , learned Senior Advocates in the appeals and writ-petitions preferred by the processors; and , learned Attorney-General and , learned Senior Advocate for and its authorities. On the contentions urged, the points that fall for determination are: ", "(a) (i) Whether the processes of Bleaching, Dyeing, Printing, Sizing, Shrink-proofing etc. carried on in respect of cotton or man-made 'Grey-fabric' amount to 'manufacture' for purposes, and within the meaning of Section 2(f) of the Central Excises and Salt Act 1944 prior to the amendment of the said Section 2(f) by Section 2 of the Amending Act VI of 1980. ", "(a) (ii) Whether the decision in , Suppl. 1 SCR 282 holding that these operations amount to a manufacture is wrongly decided and requires reconsideration. ", "(b) Whether the amendment brought about by the Amending Act of 1980 of Section 2(f) and to tariff-items 19 and 22 of the Central Excise Act is ultra-vires Entry 84 List I and, therefore, beyond the competence of . Whether, at all events, even if the expanded concept of manufacture introduced by the Amendment is beyond the scope of Entry 84 List l, whether the impost is, at all events, referable to and supportable by the residual Entry 97 of List I. ", "(c) Whether, at all events, even if the amendments to Central Excise Act are valid, the levy under the Additional Duties Act is unsupportable and without the authority of law as there is no corresponding enlargement of the definition of 'manufacture' under the Additional Duties Act. ", "(d) Whether the retrospective operation of the Amending Act is an unreasonable restriction on the fundamental right of the 'processors' under Article 19(1)(g) of the Constitution. ", "PG NO 794 ", "(e) Whether, even if the levy is justified, at all events, the computation of the assessable-value of the processed Grey-fabric on the basis of the whole-sale cash selling-price declared under classification list under Rule 173(b) is unjustified and illegal in respect of the assessable-value of the processed Grey-fabric done on job- work-basis. ", "12. Re: Contention (a) The essential condition to be satisfied to justify the levies, contend counsel, is that there should be 'manufacture' of goods and in order that the concept of 'manufacture' in Entry 84 List I is satisfied there should come into existence a new article with a distinctive character and use, as a result of the processing. It is contended that nothing of the kind happens when 'Grey fabric' is processed; it remains 'grey fabric'; no new article with any distinctive character emerges. A number of authorities of this Court and of were cited. Particular reference was made to , Supp. ( I) SCR 586 at 597; 1961] ? SCR 14; , 3 SCR 1271 at 1275; , 3 SCC 469 at 475 & 476; ., 8 STC 358; , 42 STC 201 (Kerala); , E.L.T 164 (Gujarat). v Assistant Sales Tax Officer, 25 STC 122 '(Allahabad); , 32 STC 322 ( , [19791 ELT 380 (Gujarat ). ", "13. The following observations of this Court in , AIR 1963 SC p. 791 at 794 were emphasised: ", "\"According to the learned counsel \"manufacture is complete as soon as by the application of one or more processes. the raw material undergoes some change. To say this is to equate \"processing to manufacture and for this we can find no warrant in law. The word \"manufacture\" used as a verb is generally understood to mean as \"bringing into existence a new substance ' and does not mean merely to produce some change in a substance. however minor in consequence the change may be. ' PG NO 795 These observations in , , etc. v. , Director of which were referred to with approval by this Court in the case of supra, was relied upon: ", "\"At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been \"manufactured\". ", "(Emphasis Supplied) The following observations of in case were cited: ", "\" ..... manufacture is the end result of one or more processes through which the original commodity is made to pass .... Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that in one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it MUSt be regarded as still retaining its original identity.\" ", "(Emphasis Supplied) The observations of this ('court in ., 3 STC 358 made while repelling the contention of the revenue urged in that case that when cloth is printed and coloured it gets transformed to sorne other material and that therefore when such printed and coloured cloth is exported what was exported was not the same cloth and that by such printing and dyeing the original cloth got transformed into different material were relied on: ", "The cloth exported is the same as the cloth sold with this variation or difference that the colour has change by printing and processing. In view which we take the cloth exported is the same as the cloth sold by the petitioners, there can be no question above the exemption clause not applying to it . . ", "(Emphasis Supplied) The following passage in the permanent Edition of 'Words and Phrases' referred to with approval in AIR 1963 SCp. 791 at 795 case was referred to: ", "PG NO 796 \"Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use.\" ", "Further, learned counsel placed reliance upon case where it was held that ground- nut oil after the process of hydrogenation which improved its keeping-qualities and shelf life yet remained basically ground-nut oil and that the quality of the oil had been improved by the processes it was subjected to, did not detract from its continuing identity as ground-nut oil. The change brought about in the oil, it was observed by this Court, rendered it more acceptable to the customers by improving its quality, but did not render the oil a commodity other than ground-oil which still continued to be \"groundnut oil\" notwithstanding the processing which was merely for the purpose of rendering the oil more stable thus improving its keeping qualities for those who desire to consume ground-nut oil. Likewise the processing such as bleaching, dyeing. printing, finishing etc., it was urged, merely improved the quality of Grey-fabric and rendered it more acceptable to the customers while not shedding its basic character as 'cotton fabric' or 'man-made fabric'. It was also urged that the affidavits filed by person engaged in and familiar with the textile-trade indicated that the finished fabric was not a commercially different commodity. ", "14. We have carefully considered these submissions. In the case, this court considered similar submissions in an almost identical context and situation. Learned judges referred to the observations of this Court in Commissioner of Sales Tax UP (Lucknow) v. , 21 STC 17 in which the view expressed by of in , 8 STC 325 at 326 was held supportable on the reasoning that: ", "\" . . . The decsion of might perhaps be justified on the ground that a printed or dyed cloth is commercially different article from the cloth which is purchased and printed or dyed.\" ", "PG NO 797 The Division Bench also referred to, with approval, the decision of in ., 10 ELT 253. The Division Bench noticed the question arising for decision: ", "\"Fabric itself means woven materials. It was contended that processing the manufactured fabric does not bring into existence any new woven material but the question is: does new and different goods emerge having distinctive name, use and character?\" ", "Answering, the Bench said: ", "\"It appears in the light of the several decisions and on the construction of the expression that the process of bleaching, dyeing and printing etymologically also means manufacturing processes .. ' ", "15. It is strenuously urged for the processors that the view taken by in the case suffers from fallacies both of reasoning and conclusion and requires to be reconsidered. ", "The prevalent and generally accepted test to ascertain that there is 'manufacture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where, commercially, it can no longer be regarded as the original commodity but is, instead, recognised as a distinct and new article that has emerged as a result of the processes. The principles are clear. But difficulties arise in their application in individual cases. There might be border-line case where either conclusion with equal justification be reached. Insistence on any sharp or intrinsic distinction between processing' and 'manufacture, we are afraid, results in an over simplification of both and tends to blur their interdependence in cases such as the present one. The correctness of the view in the case cannot be tested in the light of material--in the form of affidavit expressing the opinion of persons said to be engaged in or connected with the textile-trade as to the commercial identity of the commodities before and after the processing- ", "-placed before the court in a sub-sequent case. These opinions are, of course, relevant and would be amongst the various factors to be taken into account in deciding the question. ", "PG NO.798 ", "16. On a consideration of the matter, we are persuaded to think that the view taken in the case that 'Grey fabric' after they undergo the various processes of bleaching, dyeing, sizing printing, finishing etc. emerges as a commercially different commodity with its own price-structure, custom and other commercial incidents and that there was in that sense a 'manufacture' within the meaning of Section 2(f) , even as unamended, is an eminently plausible view and is not shown to suffer from any fallacy. Indeed, on this point the Referring bench did not disagree or have any reservations either. It is to be noticed that if the amending law is valid, this aspect becomes academic. We think, we should reject Contention (a). ", "17. Re: Contention (b) The concept of manufacture' embodied in Entry 84 of List I, it is urged, should be construed not in an artificial sense, but in its recognised legal sense and so construed artificial dimensions sought to be imparted to it by the amendment would be impermissible. Learned counsel drew attention to the following observations of this Court in , 3 SCR 242 at 248. ", "\"..... we have, on the one hand, to bear in mind the salutary rule that words conferring the right of legislation should be interpreted liberally and the powers conferred should be given the widest amplitude; on the other hand we have to guard ourselves against extending the meaning of the words beyond their reasonable connotation, in an anxiety to preserve the power of the legislature. ", "(Emphasis supplied) Though entries in the legislative lists are to be construed liberally and the widest possible amplitude given to them, however, no artificial or arbitrary extensions of the meaning of the words in the entry. it is urged, are permissible. It is submitted the concept manufacture in Entry 84 List I has a well accepted legal connotation and in construing the entry the precise connotation which it possesses and conveys in law must be kept in mind. There is in law no 'manufacture' unless as a result of the process a new and commercially distinct product with distinct use emerges. The idea of manufacture might imply change, but every change is not necessarily manufacture. It is. accordingly, contended that the amendment which seeks to equate \"processing \"with \"manufacture\" is beyond the scope of Entry 84 List I. ", "PG NO. 799 ", "18. In case a similar argument was urged but without success. Learned Judges were persuaded to the view that such processes which were referred to by the amendment were not so alien or foreign to the concept of 'manufacture' that they could not come within that concept. Entries to the legislative lists, it must be recalled, are not sources of the legislative power but are merely topics or fields of legislation and must receive a liberal construction inspired by a broad and generous spirit and not in a narrow pedantic sense. The expression \"with respect to\" in Article 246 brings-in the doctrine of \"Pith and Substance\" in the understanding of the exertion of the legislative power and wherever the question of legislative- competence is raised the test is whether the legislation, looked at as a whole, is substantially 'with respect to' the particular topic of legislation. If the legislation has a substantial and not merely a remote connection with the entry, the matter may well be taken to be legislation on the topic. ", "In case, it was held: ", "\"As has been noted processes of the type which have been incorporated by the impugned Act were not so alien or foreign to the concept of \"manufacture ' that these could not come within that concept.\" ", "19. At all events, even il the impost on process is not one under Entry 84, list l, but is an impost on 'processing' distinct from \"manufacture\" the levy could yet be supported by Entry '97. List l, even without the aid of the wider principle recognised and adopted in 's case AIR 1972 SC l061. It was, however, contended that the levy of tax on an activity which cannot reasonably be regarded as an activity of 'manufacture' cannot be described as a levy of duties of excise under Entry 84, List I. If it is a non- descript tax under Entry 97, the , it is urged, has not chosen1 to enact any such law in this case. The charging section does not, it is urged. bring such a taxable-event to charge. This argument was noticed in case thus: ", "\" .. It was then argued that if the legislation was sought to be defended on the ground that it is a tax on activity like processing and would be covered by the powers enumerated under Entry 97 of List I of the Seventh Schedule PG NO 800 then it was submitted that there was no charging section for such an activity and as such the charge must fail, and there cannot be any levy .. \" ", "The contention was rejected holding: ", "\".... This argument proceeds on an entire misconception. The charging section is the charging section 3 of the Central Excises and Salt Act , 1944. It stipulates the levy and charge of duty of excise on all excisable goods produced or manufactured. \"Manufactured\" under the Act after the amendment would be the 'manufacture' as amended in section 2(f) and Tariff item 19-I and 22 and the charge would be on that basis. Therefore it is difficult to appreciate the argument that the levy would fail as there will be no appropriate charging section or machinery for effectuating the levy on the activity like the method of processing even if such an activity can be justified under Entry 97 of List l of Seventh Schedule. We are, therefore, of the opinion that there is no substance in this contention We respectfully agree. ", "20. If a legislation purporting to be under a particular legislative entry is assailed for lack of legislative- competence, the can seek to support it on the basis of any other entry within the legislative competence of the legislature. It is not necessary for the to show that the legislature, in enacting the law, consciously applied its mind to the source of its own competence. Competence to legislate flows from Article 245 , 246 , and the other Articles following, in Part XI of the Constitution. In defending the validity of a law questioned on ground of legislative-incompetence, the can always show that the law was supportable under any othe entry within the competence of the legislature. Indeed in supporting a legislation sustenance could be drawn and had from a number of entries. The legislation could be a composite legislation drawing upon several entries. Such a \"rag-bag\" legislation is particularly familiar in taxation. ", "Bennion in his \"Statutory Interpretation\" (at page 644) refers such a composite legislation, though the observations must be under-stood in the context of the supremacy of and one of unlimited powers and which is, under no inhibitions unlike a federal polity, of PG NO 801 distribution of legislative powers. Learned author refers to: ", "\" 'Ragbag' Acts: Some Act s are 'rag bag' Acts, covering many areas. The annual Finance Act is an extreme example. It is divided into Parts, dealing respectively with customs and excise duty, value added tax, income tax, capital gains tax, stamp duty, capital transfer tax and so on. Even within a Part of a Finance Act the various provisions havnuite different aims....\" ", " ., 2 SCR 22, this Court said: ", "\"........ There is no prohibition against the enacting in a single statute, matters which call for the exercise of power under two or more entries in List I of the Seventh Schedule. Illustrations of such legislation are not wanting in our statute book, and the fact that one of such entries is the residuary entry does not also attract any disability .. ..\" ", "21. So far as, the exclusive competence of to legislate is concerned all that is necessary is to find out whether the particular topic of legislation is in List II or List III. If it is not, it is not necessary to go any further or search for the field in List I. has exclusive power to legislate upon that topic or field. Of course, it has concurrent power also in respect of the subjects in List III. ", "Contention (b) is, therefore, insubstantial. ", "22. Re: Contention (c) This pertains to the validity of levy of additional duties. The contention proceeds on the pre-supposition that processing does not amount to 'manufacture' under Section 3(1) of the Additional Duties Act. If it does, as has been held on point (a), this argument does not survive at all. The point, however, sought to be put across is that, even if the concept of 'manufacture' for purposes of levy of excise duty under the ' Central Excise Act ' is validly expanded or that a tax on processing is, otherwise, PG NO 802 supportable under Entry 97(1), the position under the 'Additional Duties Act' ;s quite different. The 'Additional Duties Act' does not expressly invoke or attract the definition of 'Manufacture' in Section 2(f) of the ' Central Excise Act '; nor does the 'Additional Duties Act' itself contain a definition of 'manufacture' in the broad terms in which Section 2(f) , as amended, contains. The result is, it is urged, that the ordinary legal connotation of 'manufacture', contained in the charging Section 3(1) of the 'Additional Duties Act' can alone support the levy. It is not, it is urged, permissible to import the artificial and expanded definition of 'manufacture' containing in Section 2(f) , as amended, into Section 3(1) of the Additional Duties Act. ", "The following observations of this court in ., l1956] SCR 664 at 673 are pressed into service: ", "\".....It was rightly pointed out that it is no sound principle of construction to interpret expressions used in one Act with reference to their use in another Act ....\" ", "Again, the observations in Macbeth & Co. v. Chisten, [1910] AC 220 at 224 referred to with approval by this court in , 2 SCR 720 at 725-26 were relied upon: ", "\".....It would be a new terror in the construction Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone'.....\" ", "It is further contended that a mere amendment of the schedules to the 'Additional Duties Act' purported by Section 4 of the Amending Act VI of 1980 would be inadequate to serve the purpose of a valid levy on the activity of processing. It was also urged that Section 3(3) of the 'Additional Duties Act' which provides that the provisions of ' Central Excise Act ' and the rules made thereunder shall, so far as may be, apply in relation to the 'levy and collection\" of the Additional Duties would not also enable the wider definition of 'manufacture' in Section 2(f) to be imported into Section 3(1) of the Additional Duties Act to justify levy of Additional Duties on 'processing'. ", "23. The contention was neatly and attractively presented and appeared, at first blush, to merit a serious PG NO 803 consideration of the validity of the levy of additional duties. But on a closer examination of the concept of, and the scheme for, levy and collection of the additional duties and the specific statutory provisions, the tensile strength of the argument breaks down. There are at least two circumstances which render the definition of 'manufacture' under Section 2(f) attracted to the additional levies. Section 3(3) of the Additional Duties Act provides: ", "\".....Ievy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (l) . \" ", "It is plain that the statute expressly makes the provision in the \" Central Excise Act \" apply in relation to 'levy and collection' of the additional duties. The question is whether this provision is sufficient to attract Section 2(f) of the main Act as amended. This, in turn, depends upon what the expression \"levy\" connotes and carries with it. The term 'levy' it is held, is an expression of wide import. It includes both imposition of a tax as well as its quantification and assessment. ., [ 1973] I SCR 822 this Court held: ", "\"The term \"levy\" appears to us to be wider in its import than the term \"assessment\". It may include both of a tax as well as assessment. The term imposition\" is generally used for the levy of a tax or duty by legislative provision indicating the subject matter of the tax and the rates at which it has to he taxed ..... ", "24. That apart, Section 4 of Amending Act VI of 1980 has amended the relevant items in the schedule to the Additional Duties Act. The expressions 'produce' or 'manufacture' in Section 3(1) of the Additional Duties Act must be read along with the entries in the schedules. In Att. -Gen v. , [1878] 3 Ex. D. 214, 229 it is observed: ", "'A schedule in an Act is a mere question of drafting, a mere question of words. The schedule is as much a part of the statute, and is as much an enactment, as any other part.\" ", "PG. NO. 804 ", " says (in Interpretation of Statutes 11th ed. p. ", "156): ", "\" ....if an enactment in a schedule contradicts an earlier clause it pevails against it.\" ", " (in 's Statutory Interpretation, p. 568-569) referring to the place of schedules in statutes observes: ", "\"The Schedule is an extension of the section which induces it. Material is put into a Schedule because it is too lengthy or detailed to be conveniently accommodation in a section, .....\" ", "\"A Schedule must be attached to the body of the Act by words in one of the sections (known as inducing words]. It was formerly the practice for the inducing words to say that the Schedule was to be construed and have effect as part of the Act. (See, e.g. Ballot Act 1872 s. 28 .) This is no longer done, being regarded as unnecessary. If by mischance the inducing words were omitted, the Schedule would still form part of the Act if that was the apparent intention. \" ", "\" ....The schedule is as much a part of the statute, and is as much an enactment, as any other par. (See also. to the like effect, v. [19633] 1 QB 275; R v. I [London] Legal Aid Area. ex p. Rondel, [1967] 2 QB 482 and metropolitan Police Commr. v. ., [1976] WLR 87.]\" ", "What appears. therefore, clear is that what applies to the main levy, applies to the additional duties as well, we find no substance in Contention [c] either. ", "25. Re: Contention [d] There is really no substance in the grievance that the retroactivity imparted to the amendments is violative of Article 19 [ l] (g). A Competent legislature can always validate a law which has been declared by courts to be invalid, provided the infirmities and vitiating infactors noticed in the declaratory-judgment are removed or cured. Such a validating law can also be made retrospective. If in the light of such validating and curative exercise made by the -granting legislative competence--the earlier judgment becomes irrelevant and unenforceable, that cannot PG NO 805 be called an impermissible legislative overruling of the judicial decision. All that the legislature does is to usher in a valid law with retrospective effect in the light of which earlier judgment becomes irrelevant. ( ., 1 SCR, 388) Such legislative expedience of validation of laws is of particular significance and utility and is quite often applied, in taxing statutes. It is necessary that the legislature should be able to cure defects in statutes. No individual can acquire a vested right from a defect in a statute and seek a windfall from the legislature's mistakes. Validity of legislations retroactively curing defects in taxing statutes is well recognised and courts, except under extraordinary circumstances, would be reluctant to override the legislative judgment as to the need for and wisdom of the retrospective legislation. In & v. Union of India & , [ 19851 l Supp. 292 at 327 this court observed: ", "\"..... not only because of the paramount governmental interest in obtaining adequate revenues, but also because taxes are not in the nature of a penalty or a contractual obligation but rather a means of apportioning the costs of government amongst those who benefit from it\". In testing whether a retrospective imposition of a tax operates so harshly as to violate fundamental rights under Article l9(1)(g), the factors considered relevant include the context in which retroactivity was contemplated such as whether the law is one of validation of taxing statute struck-down by courts for certain defects; the period of such retroactivity, and the degree and extent of any unforeseen or unforseable financial burden imposed for the past period etc. Having regard to all the circumstances of the present case, this court in case held that the retroactivity of the Amending provisions was not such as to incur any infirmity under Article 19( l)(g). We arc in respectful agreement with that view. There is no merit in contention (d) either. ", "26. Re: Contention (e) This concerns the question of the correctness of the determination of the assessable-value. The processors say that they have filed classification lists under rule 173 B PG NO 806 of the Central Excises and Salt Rules 1944 as they had no other choice and that if the proper principles of determination of the assessable-value do not legally justify the consequences flowing from the classification, it is open to them to contend against the validity of the determination and they are not estopped from doing so. Duties of excise are imposed on the production or manufacture of goods and are levied upon the manufacturer or the producer in respect of the commodity taxed. The question whether the producer or the manufacturer is or is not the owner of the goods is not determinative of the liability. The essential and conceptual nature of the tax is to be kept clearly distinguished from both the extent of the power to impose and the stage at which the tax is imposed. Though the levy is on the production or manufacture of the goods, the imposition of the duty could be at the stage which the law considers most covenient to impose as long as a rational relationship with the nature of the tax is maintained. ", "27. The processors contend that, the assessable-value could only be the job-work charges received by them for the processing of 'Grey-fabric' and cannot be the selling-price at which the customer who entrusts the Grey fabric for processing ultimately sells it in the market. Such a sale- price, it is said, would, quite painly. include the value of the Grey fabric, the processing-charges and also the selling-profit of the customer. Even in regard to the price of the Grey fabric itself which comes to the processing- houses in fully manufactured condition would again depend upon how many hands it has changed before reaching the particular customer who brings them for processing. The determination of assessable-value at the actual or hypothetical selling-price of goods of like nature and quality in the wholesale market would include the post- manufacturing profits of the trader which cannot legitimately be regarded as part of the assessable-value. ", "28. This contention was considered in detail in case [ 1985] 1 Supp. SCR 293 at 327 wherein it was held: ", "\"When the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc. by independent processes, whether on their own account or on job charges basis, the value of the purposes of assessment under section 4 of the Central Excise Act will not be the processing charges alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold PG NO 807 for the first time in the wholesale market. That is the effect of section 4 of the Act. The value would naturally include the value of grey fabrics supplied to the independent processors for the processing. However, excise duty, if any, paid on the grey fabrics will be given pro forma credit to the independent processors to be utilised for the payment on the processed fabrics in accordance with the Rules 56A or 96D of the Central Excise Rules, as the case may be.\" ", "Even the Referring Bench did not doubt the correctness of the inclusion in the assessable-value the cost of the Grey- fabric and the processing charges. held: ", "\"We cannot accept the contention of the learned counsel on behalf of the petitioners and the appellants that the value of the grey cloth which is processed by the processor should not be included in the assessable value of the processed fabric ...... \" ", "29. In the argument, as presented, that the assessable- value would include what is referred to as the \"post- manufacture profits\", there is an obvious fallacy. . Collector of Central Excise and ., [ 1975] 3 SCR p. 563 speaking for the Court said: ", "\"The value of the goods for the purpose of excise must take into account only the manufacturing cost and the manufacturing profit and it must not be loaded with post- manufacturing cost or profit arising from post-manufacturing operation ..... \" ", "\" .... It may be noted that wholesale market in a particular type of goods may be in several tiers and the goods may reach the consumer after a series of wholesale transactions. In fact the more common and less expensive the goods, there would be greater possibility of more than one tier of wholesale transactions.....\" ", "\" ......If excise were levied on the basis of second or subsequent wholesale price, it would load the price with a post manufacturing element, namely, selling cost and selling profit of the wholesale dealer. That would be plainly contrary to the true nature of excise as explained in the PG NO 808 Voltas' case (supra). Secondly, this would also violate the concept of the factory gate sale which is the basis of determination of value of the goods for the purpose of excise......\" ", "\"There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise .... \" ", "Explaining what really is the idea of \"post- manufacturing profit\" referred to in 's case this court in etc. etc. v etc. etc., [ 1984] l SCR, p. 347 at 375 aid: ", "\".....When it refers to post-manufacturing expenses and post-manufacturing profit arising from post-manufacturing operations, it clearly intends to refer not to the expenses and profits pertaining to the sale transactions effected by the manufacturer but to those pertaining to the subsequent sale transactions effected by the wholesale buyers in favour of other dealers.\" ", "(Emphasis Supplied) The principles for the determination of assessable-value are laid down under section 4 of the Act. Section 4 of the Central Excise Act' envisages that the value of an article for the purposes of duty shall be deemed to be; (a) The wholesale cash price for which an article of the like kind and quality was sold or was capable of being sold at the time of removal of the article from the factory or premises of manufacture for delivery at the place of manufacture or; ", "(b) Where such price was not ascertainable, the price at which an article of the like kind and quality was sold or capable of being sold at the time of removal of the article chargeable with duty. ", "The nature of the excise duty is not to he confused with, or tested with reference to, the measure by which the tax is assessed. The standard adopted as the measure of assessment may throw light on the nature of the levy but is not determinative of it. When a statutory measure for assessment of the tax is contemplated, it \"need not contour PG NO 809 along the lines which spell out the levy itself.\", and \"a broader based standard of reference may be adopted for the purposes of determining the measure of the levy.\" Any statutory standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the tax. ", "30. In the case of processing-houses, they become liable to pay excise duty not because they are the owners of the goods but because they cause the 'manufacture' of the goods. The dimensions of the Section 4(1)(a) and (b) are fully explored in number of decisions of this Court. Reference may be made to the case of . Consistent with the provisions of Section 4 and the Central Excise (Valuation) Rules, 1975, framed under Section 37 of the Act it cannot be said that the assessable-value of the processed fabric should comprise only of the processing- charges. This extreme contention if accepted, would lead to and create more problems than it is supposed to solve; and produce situations which could only be characterised as anomalous. The incidence of the levy should be uniform, uninfluenced by fortuitous considerations. The method of determination of the assessable-value suggested by the processors would lead to the untenable position that while in one class of Grey-fabric processed by the same processor on bailment, the assessable-value would have to be determined differently dependent upon the consideration that the processing-house had carried out the processing operations on job-work basis, in the other class of cases, as it not unoften happens, the goods would have to be valued differently only for the reason the same processing-house has itself purchased the Grey-fabric and carried-out the processing operations on its own. ", "It is to solve the problem arising out of the circumstances that goods owned by one person are \"manufacture ' by another that at a certain stage under rule 174A, a notification was issued by exempting from the operation of the rule 174A: ", "\".... every manufacturer who gets his goods manufactured on his account from any other person, subject to the conditions that the said manufacturer authorises the person, who actually manufactures or fabricates the said goods to comply with all procedural formalities under Central Excises and Salt Act , 1944 ( l of 1944) and the rules made thereunder, in respect of the goods manufactured on behalf PG NO 810 of the said manufacturer and, in order to enable the determination of value of the said goods under section 4 of the said Act, to furnish information relating to the price at which the said manufacturer is selling the said goods and the person so authorised agrees to discharge all liabilities under the said Act and the rules made thereunder.\" ", "31. On a consideration of the matter, the view taken in the matter in the case does not call for reconsideration. Contention (e) is also held and answered against the petitioner. ", "32. In the result the appeals preferred by are allowed and the Judgment of under appeal is set-aside. The appeals preferred by the processors against the judgment of and the writ petitions filed by the processors directly in this court are dismissed. There will, however, be no orders as to costs in the appeals and the writ-petitions. and its authorities shall be entitled to recover the amounts due by way of arrears of excise-duty and shall be entitled to take necessary steps to seek the enforcement of the bank guarantees, if any, for the recovery of the arrears. ", ", J. I have had the advantage of reading in draft the judgment proposed to be delivered by my learned brother , J. I respectfully agree with him. There is, however, one aspect of the matter in respect of which I would like to say a few words. Contention (e) as noted by my learned brother in his judgment deals with the determination of the assessable-value. The processors in the cases before us say that they have filed classification lists under rule 173B of the Central Excises and Salt Rules, 1944 as they had no other choice and that if the proper principles of determination of the assessable-value do not legally justify the consequences flowing from the classification it is open to them to contend against the validity of the determination and they are nOt estopped from doing so. The processors are right in contending that the true principle should be followed in determining the assessable-value. Then what is the true principle? Section 4 of the Act deals with the valuation of excisable goods for purposes of charging of duty of excise. Section 4 [l] (a) of the Act stipulates that the value should be subject to other provisions of the Section the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer PG NO 811 is not a related person and the price is the sole consideration for the sale. For the present purpose, we are not concerned with the provisos nor the situation where the normal price of goods is not ascertainable for any reason. In Empire & Others etc. v. , L Suppl. S.C.R. 292, it was held that where for the purpose of calculating assessable value, a notional sum is laid down by the legislature to be arrived at one a certain basis, it is not permissible for the courts to engraft into it any other deduction or allowance or addition or read it down on the score that unless the said deduction or allowance or addition is authorised elsewhere in the Act or in the Rules. A statutory charge should be measured by the method of its own computation as laid down in the statute and not by any other method of computation. The circumstances that thereby the benefit of any exemption granted by the legislation may be lost and that in some cases hardship might result are not matters which would influence courts on the construction of the statute. A tax payer is entitled only to such benefit as is granted by the legislature. It was emphasised that the taxation under the Act is the rule and the benefit and exemption, the exception. And it was held that there was no hardship in these cases. It was further reiterated that when the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc. by independent processes, whether on their own account or on job charges basis, the value for the purposes of assessment under section 4 of the Central Excise Act will not be the processing charge alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold for the first time in the wholesale market. That is the effect of section 4 of the Act. The value would naturally include the value of grey fabrics supplied to the independent processors for the processing. However excise duty, if any, paid on the grey fabrics will be given proforma credit to the independent processors to be utilised for the payment on the processed fabrics in accordance with the relevant rules. ", " , Supp. S.C.C. 652 hed that the processes of beaching, dyeing, printing, mercerising etc. carried on by a processor on job-work basis in respect of grey cotton fabrics and manmade fabrics beonging to the customer and entrusted by him for processing amount to manufacture with the meaning of the Act prior to its amendment so as to attract evy of excise duty on the processed fabrics and in any event, after the Amendment Act , these processes amount to manufacture and excise duty is eviabe on the processed fabrics. The earned Chief Justice aso deat with the other PG NO 812 question, namey, what is the vaue of the processed fabrics iabe to be assessed. Referring to the aforesaid decision of , (supra), he iustrated the probem by reference to the exampe set out in the judgment (Page 654 of the report at para 2). In that exampe iustrated by him the vaue of the grey coth in the hands of the processor was Rs.20. The vaue of the job-work was Rs.5. B Trader's seing price incusive of his seing profits etc. was put at Rs.30. at page 655 of the report observed that the assessabe vaue of the processed fabric must obviousy be taken to he the whoesae cash price of the processed fabric at the factory gate that is when the processed fabric eaves the factory of the processor and it cannot possiby incude the seing profit of the trader who subsequenty ses the processed fabrics. The earned Chief Justice reiterated that it is at the point when the processed fabric eaves the factory of the processor that its assessabe vaue has to be determined and that assessabe vaue cannot incude the seing profit of the trader. , (supra) did not say that the post-manufacturing profits or post-manufacturing costs coud be incuded in the assessabe-vaue of the processed fabric. If the trader who entrusted cotton or man-made fabrics to the processor for processing on job-work basis, woud give a decaration to the processor as to what woud be the price at which he woud be seing the processed goods in the market that woud be taken by the Excise authorities as the assessabe-vaue of the processed fabrics and excise duty woud be charged to the processor on that basis. Where a manufacturer ses the goods manufactured by him in whoesae to a whoesae deaer at the arms ength and in the usua course of business, the whoesae cash price charged by him to the whoesae deaer ess trade discount woud represent the vaue of the goods for the purpose of assessment of excise But the price received by the whoesae deaer who purchases the goods from the manufacturer and in his turn ses the same in whoesae to other deaer, woud be irreevant for determination of the vaue of the goods and the goods woud not be charged on that basis. This has been expained in . Asstt. Coector of Centra Excise and Ors., [ 1975] 3 S.C.R . 563. This has aso been expained in etc. v. etc. etc. . S.C.R. 347 at 375. It has to he reiterated that the vauation must be on the basis of whoesae cash price at the time when the manufactured goods enter into the open market. See in this connection the ratio of this Court in ., [ 1985] Supp 3 SCR 95 and the ., 11985] Supp 3 SCR 165. It was emphasised in v. , (supra) that the vaue of the trade-marks was not be taken into account PG NO 813 in computing the assessabe vaue as the affixation of the trade-marks of a particuar brand was extraneous to manufacture. The vaues of such extraneous or additiona factors do not enter into the computation of assessabe vaue and as such the whoesae cash price at which the goods enter into the whoesae market woud be independent of the vaue of the trade-marks. So that cannot be taken into the computation of the assessabe vaue. Simiary, in the case of ., (supra), it was hed that the vaue of 's trade marks coud not be to the whoesae price charged by the deaer to 's for the purpose of computing the vaue of the goods manufactured. The goods in both these cases were manufactured independenty of the addition of the trade-marks. The price thereof at the factory gate was not after taking into account the vaue of the trade-marks. If that was the position the vaue of the trade-marks cannot be added to the whoesae cash price charged by the deaer. Affixation of trade-marks for enhancement of the vaue thereof is extraneous to and independent of the process of manufacture. The charges for the same are not part of the assessabe vaue and cannot enter into computation of the whoe-sai cash price on the basis of which excise duties ae to be evied. In the aforesaid view of the aw and tor the reasons mentioned by my earned brother, agree with his answer to this contention. The assessabe vaue woud. therefore. incude the vaue of the grey coth in the hands of the processors pus the vaue of the job-work done pus manufacturing expenses whatever woud be incuded in the price at the factory gate. The correct assessabe vaue must be the vaue of the fabric at the factory gate, that is to say, the vaue at which manufactured goods eave the factory and enter the main stream. ", "One more aspect will have to be reiterated. Computation of the assessable-value is one question and as to who would be liable for the same is another. Duties of excise are imposed on production or the manufacture of goods and are levied upon the manufacturer or the producer in accordance with the relevant rules. This is quite independent of the ownership of goods. It is, therefore. necessary to reiterate that the value for the assessment under section of the Act will not be the processing charge alone but the intrinsic value of the processed fabrics which is the price at which the fabrics are sold for the first time in the wholesale market. The rules are clear on the computation of that value. If the valuation is made according to the rules as adumbrated in (supra) and as clarified by my learned brother in this judgment no difficulty should arise. ", "PG NO 814 RANGANATHAN, J. I agree but I should like to add a few words on two of the points argued before us. First, I should like to clarify the nature of the decision in v. , (the case) 1980 E.L.T. 480 (to which I was a party), since learned counsel for the petitioners sought to rely on my judgment in that case as supporting his contention that the cannot seek to uphold the amendment presently in question by reference to Entry 97 of List I in the Seventh Schedule to the Constitution. In that case, was concerned with the interpretation of the amendment to S. 4 of the Central Excises and Salt Act , 1944 by Act 22 of 1975. The pre-amendment section postulated the determination of excise duty on the basis of the wholesale cash price of the excisable goods at \"the factory gate\"; and, an explanation provided that, in determining this price, no abatement or deduction shall be allowed in respect of trade discount and the amount of duty payable at the time of the removal of the goods from the factory. The post- amendment section made certain changes in the concept of sale at the factory gate by excluding therefrom sales effected in favour of a category of persons defined as \"related persons\" with which we are not concerned here. The amendment also defined the assessable \"value\" so as to include packing charges but to exclude the amount of excise duty, sales tax and other taxes as well as trade discount. The question was whether this amendment precluded the deduction, from the wholesale factory gate price, of post- manufacturing expenses and profits. The question had been answered by several in the negative principally on the ground that the duty sought to be levied under the Act was an excise duty, the very nature of which required a proximate connection with production or manufacture and that what had passed beyond this region and entered the domain of sale could not pass as excise duty. Counsel for the of lndia. with a view to overcome these decisions, had contended that since Entry 97 of List I in the Seventh Schedule to the Constitution enabled to enact a legislation even beyond the purview of an excise duty covered by Entry 84 of that list, the should not read into the amended section the limitations that had been considered inherent in the section before its amendment. It was in repelling this contention that certain observations were made by me in paras 30 to 32 of the judgment to which Sri drew our attention. It will, however, be clear from the discussion in the paragraphs referred to that the contention was repelled not on the ground that the legislature could not make a wider levy by reference to Entry 97 but only on the ground that the history, context and language of the amendment did not warrant the wider interpretation. This will be clear from the following two sentences in para 31 where I said: ", "PG NO 815 \"Mr. 's contention .. that the language of the new section should be given an enlarged scope and interpretation by relating it to Entry 97 of List I of Seventh Schedule cannot, in our opinion, be accepted. We do not think, in considering this amendment, that it is necessary for us to discuss whether, if were to enact a law imposing on goods manufactured or produced a duty based not only on the manufacturing cost/profits, but also including in the dutiable value the whole or some part, post manufacturing cost/profits, such a law would be intra vires or not: because it appears to us that no such law has been enacted in this case. We shall assume with Mr. , that in view of Entry 97 in the Union List under the Constitution, it is open to and competent for the legislature to expand or even modify the nature of the levy. The question, however, will be whether it has done so.\" It was concluded, after referring to the previous position as well as the statement of objects and reasons for the amendment, that there was nothing to show that the legislature had intended to make ally change and that the rule against a presumption of implicit alteration of the law should be invoked in the context. In other words, the decision was based not on the scope of legislative Entry 97 in List 1 but on the language and scope of the amendment actually effected. It was considered not necessary or possible to stretch the language of the definition in s. 4 beyond the ambit of the provision as delineated in the earlier decisions. The question decided was not that the legislature could not, but that it did not, make any radical change in the nature of the levy. ", "The position considered in the case may be illustrated by an analogy. Entry 82 in List I of the Seventh Schedule to the Constitution permits the enactment, by , of a law relating to taxation of 'income. The entry does not restrict such laws only to the income of a 'previous year', though this was the pattern of the prevelent Income Tax Act s activated by annual Finance Act s. Between 1948 and 1955, however, the Finance Act s purported to impost a tax on \"excess dividends\" which, in brief, was a tax on dividends declared out of profits of past years. The effect of these enactments was considered by as well as this . ., 3 SCR 953, this held that the language of the relevant provision in the Finance Act s was so framed that it could not be read as an independent charging section. It will be appreciated that the Finance Act s were also enactments of and a taxation of profits, even of past years, by an independent and specific enactment could certainly have been brought within the scope of Entry 97, if not Entry 82 itself. Nevertheless, the enactments were held ineffective not because they could not but because they did not contain the words necessary to effectuate the result. The position in the case was somewhat similar. The legislature retained the levy on the basis of the wholesale cash price at the factory gate as before and only introduced a definition of the expression 'value' in terms a little more elaborate but basically not very different from what had been contained in the earlier section. The saw no reason to read into the language of the amended provision a meaning much wider that had been attributed to the provision before its amendment. The amendment gave no indication that, contrary to what had been decided earlier, it was the intention of the legislature to bring into the assessable value even an element of post manufacturing cost/profit. ", "PG NO 816 But here the position is entirely different. The amendment has specifically enlarged the meaning and concept of the word \"manufacture\". If such extended concept is within the range of duties of excise as envisaged under Entry 84-and I agree that with my learned brothers that is-, there is no difficulty. But, if, as contended for by Sri Sri , that legislative entry permits a duty levied with on the process of 'manufacture\", stricto sensu, and the processing in this case cannot be brought within that definition then this expended definition cannot be fitted into that entry. Nevertheless the specific statutory definition cannot be ignored and it it cannot be held valid by reference to Entry 84, its validity has to be considered with reference to the residuary Entry 97. The definition of manufacture in a limited sense. It explictly enlarges the scope of the levy of excise duty and, if it is not permissible to bring it within the scope of Entry 84, a resort to Entry 97 cannot be ruled out. In my view, therefore, there is nothing in the decision in the case that supports the contention of the petitioners have that the amendment of the definition of \"manufacture\" cannot be PG NO 817 sustained by reference to Entry 97 of List I in the Seventh Schedule to the Constitution of India, if it cannot be upheld as falling under the purview of Entry 84. The second point, on which I feel inclined to add a few words is in regard to the contention on behalf of the petitioners that the definition of the term \"manufacture\" enacted in the Central Excises & Salt Act , 1944 as enlarged by Amendment Act 6/80, cannot be read into the provisions of the Additional Duties of Excise Act (No. 58), 1957. The argument is in three phases and runs thus: ", "(i) S. 3 of the 1957 Act, which is the charging section, fastens the charge of duty at the state of 'manufacture out this e expression is deliberately left undefined, though the statute takes special care in s. 2 to adopt, for its purposes, the definition of the specified goods as contained in the 1944 Act. This excludes the definition of 'manufacture' enacted in s. 2(f) of the 1944 and enlarged from time to time . ", "(ii) S. 3(3) cannot help the in this regard, as its only purpose and effect is to avoid a repetition. in this Act of the procedural provisions of the 1944 Act. The charge or imposition of the tax having been said under S. 3 , the purpose of .S. 3(3) is only to say that this charge shall be qualified, demanded of the 1944 Act. This sub- section cannot be read as having the effect of incorporating the substantive definition of \"manufacture\" in the 1944 Act particularly when s. 2 chose to incorporate only the definition of the specified goods as contained in the 1944 Act. ", "[iii] Even if the language of S. 3 ( 3 ) is construed more liberaly, it will be effective with only to incorporate the definitions contained in the 1944 Act as on the date of commencement of the 1957 Act but not its subsequent legislative expansions. ", "In my opinion. there is no warrant or justification for giving such a narrow interpretation to the wide language of s. 3[3] of the 1957 Act. Learned counsel for the petitioner, in advancing this argument, apparently has in mind the famous dictum of Lord in v. , [1927] A.C. .7 echoed in several decisions of this Court and of the various in India: ", "PG NO 818 \"Now, there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That, ex hypothesi, has already been fixed. But assessment particularizes the exact sum which a person liable has to pay. Lastly come the methods of recovery, if the person taxed does not voluntarily pay.\" ", "The argument, founded on the above figurative analysis, seeks to equate the expressions \"levy and collection\" used in s. 3(3) with the stages of assessment and collection concerned with the procedure for quantification and recovery of a duty that has already been imposed. The first stage of \"charge\", according to counsel, has already been dealt with in the first sub-section of s. 3 , which has fastened a charge on the production of manufacture of specified goods. The third sub-section, it is said, only relates to the quantification or recovery of the charge imposed under s. 3(1) . I do not see any force in this argument. In the first place, even s. 3(1) which, according to the counsel, is the charging section, uses the same words \"levied and collected. These are the same as the words used in Article 265 of the Constitution, which have been interpreted as comprehending the entire process of taxation commencing from the imposition of the tax by enacting a statute to the actual taking away of money from the pocket of a citizen. They take in every stage in the entire process of taxation. The words \"levied\" is a wide and generic expression. One can say with as much appropriateness that the Income tax Act levies a tax on income as that the the Income Tax Officer levies the tax in accordance with the provisions of the Act. It is an expression of wide import and takes in all the stages of charge, quantification and recovery of duty, though in certain contexts it may have a restricted meaning. In the context of sub-section (1) the word \"levied\" admittedly means \"charged \" as well as \"assessed. The words \"levy and collection' in sub-section (3) cannot be construed differently from the words levied and collected used in sub-section (1). S. 3(3), therefore, also covers the entire gomut of s. 3 (1) and cannot be construed as becoming operative at a somewhat later stage. Its operation cannot be excluded in determining the scope of the charge. ", "PG NO 819 In this context, reference has to be made to a decision of this Court which had to consider a provision, almost identical with S. 3(3) of the 1957 Act, appearing in the Finance Act 1965, in a somewhat indirect manner, as the decision contains some observations, which, at first sight, appear to support the line of argument of the petitioner herein. Such a provision has been annually repeated in all Finance Act s--vide, the Finance Act from 1963 to 1983--and imposes what has been described as \"special\", \"regular\" or \"auxiliary\" duties of excise and customs. The decision I am referring to is that of this Court in , 2 SCC 7 19. This decision was really concerned with s. 280 ZD of the Income Tax Act, 1961, which in turn called for a reference to s. 80 of the Finance Act, 1965 which is in the following terms: ", "\"(I) When goods of the description mentioned in this section chargeable with a duty of excise under the Central Excises Act .... are assessed to duty, there shall be levied and collected-- ", "(a) as respects (certain) goods ............ , a special duty of excise equal to 10 per cent of the total amount so chargeable on such goods; ", "(b) as respects (certain other) goods ...... ..., a special duty of excise equal to 20 per cent . . .: and ", "(c) as respects (certain other) goods ...... ..., a special duty of excise equal to 33- 1/3 per cent . . . (2) xxx xxx (3) The duties of excise referred to in sub-section ( l) chargeable on such goods under the Central Excise Act or any other law for the time being in force . .. ", "(4) The provisions of the Central Excises Act and the rules thereunder. including those relating to refunds and exemptions from duty, shall. so far as may be. apply in relation to the levy and collection of the duty of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or rules.\" ", "PG NO 820 Section 280 ZD of the Income Tax Act, 1961 enabled an assessee, in certain circumstances, to obtain a \"tax credit\" certificate in respect of a percentage of the amount of \"duty of excise payable by him.\" \"Duty of excise\" was defined by the section to mean \"the duty of excise leviable under the Central Excises & Salt Act \". The question was whether the tax credit could also be given in respect of the amount of the special duty of excise levied and collected under the Finance Act . This Court held that, obviously, the special duty levied under s. 80 could not be regarded as having been levied under the Central Excise Act . It said: ", "\"It is true that the expression 'leviable' is an expression of wide import and includes stages of quantification and recovery of the duty but in the context in which that expression has been used in clause (b) of sub- section (6) of s. 280 ZD, it is clear that it has been used in the sense of chargeability to duty. In other words, the duty of excise in respect whereof tax credit is available would be in respect of such duty of excise as is chargeable under the Excise Act and clearly the Special excise duty in respect whereof additional tax credit is sought by the appellant company is not chargeable under the Excise Act but chargeable under the Excise Act .\" ", "Having said this, the added: ", "\"'Sub-clauses [3] and (4) of s. 8 () of the Finance Act on which reliance has been placed by counsel for the appellant company in terms refers to the procedural aspect such as the qualification and collection of the special duty and simply because the qualification and collection of the special duty under the Finance Act is to he done in accordance with the provisions of the Excise Act such duty does not become leviable that is to say chargeable, under the Excise Act .\" ", "The above observations no doubt lend some support to the contention of the petitioner, as the wording of s. 80(4) of the 1965 Finance Act is identical with that of s. 3(3) and has been interpreted as attracting only the procedural aspect of the Central Excise Act . But in my opinion, while that may have been true of s. 80(4) of the Finance Act, 1965, it will not be correct to draw the same conclusion about the 1957 Act. For, s. 80(1) of the Finance Act, 1965 fully exhausted the aspect of charge of the special duty. It PG NO 821 specified the goods to be taxed and also laid down that the special duty was to be a percentage of the normal excise duty chargeable on those goods. Nothing else remained except the quantification and the collection. But here the position is different. There are three ingredients of the charging provision viz. s. 3(1). The additional duties are charged ", "(a) on manufacture, storage of production (b) of certain named goods (c) at the rates specified in the first schedule. Of these, only aspect (b) finds mention in the t957 Act but in relation to the definitions contained in the 1944 Act. Aspect (c), clearly is not complete without a reference to the main Act. For, turning to the First Schedule of the Act, originally it specified rates on the basis of length, weight or number on all items except \"cigarettes\" where the duty was to be ad valorem. The Amendment Act , No. 6 of 1980, substituted the rate per metre specified under the original schedule in respect of the items with which we are concerned to ad valorem rates. Now the assessable value is to be determined on the basis of which the special duty will have to be worked out cannot be found out from the 1957 Act which contains no definition or indication in this regard. The statute cannot be worked atleast in respect of goods where an ad valorem rate is prescribed unless s. 3(l) is read with s. 3 (3 ) and the definition of \"assessable value\" in s. 14 of the 1944 Act is read with the Finance Act . In like manner, I think. the content of aspect (a) cannot be understood differently from, or independently of, the definition in the main enanctment. Having regard to the nature and content of the levy indicated in s 3(1), it is obvious that s. 3(3) has to have the effect of attracting not only the purely procedural and machinery provisions of the 1944 Act but also some of its charging provisions. It is, therefore difficult to consider section 3(1) of the 1(1957 Act--in contrast to the Finance Act of 1965---As covering the entire ambit of the charge imposed. In short, the language of s. (3) has to he given a wider meaning than under the Finance Act , 1985. I have referred to the fact that a provision similar to that in s. 80 of the Finance Act, 1965 is also found in other Finance Act s. On perusal of these provisions, it will be found that a like position exists there also. These provisions are all self-contained and completely specify the scope of the charge either as a percentage of the excise duty normally chargeable under the Central Excises & Salt Act , 1944 or as a percentage of the 'assessable value determined under s. 4 of the 1944 Act.' This, in my view, is a very important reason why the observations in 's case (supra) cannot be of application in the context of the 1957 Act. ", "A question has been raised as to why, if it were the intention of the to take in all the provisions PG NO 822 including definitions from the 1944 Act, it was considered necessary to make a specific reference to the definitions of the various goods on which additional duty was being imposed as contained in the schedule to the 1944 Act. Counsel says that this enactment of specific definitions drawn from the 1944 Act should lead to an inference that no other definitions from that Act were intended to be incorporated in the 1957 Act. A careful examination will, however. show that this is not the effect. Actually, s. 2 is not much of a 'definition' section. Cl. (a) is not strictly necessary and cl. (b) is only intended to clarify that the proceeds of the duties are not be distributed to Union Territories. So far as clause (c) is concerned, it is necessary to make a reference to s. 7 of the Act, which reads thus: ", "\"7. It is hereby declared that the following goods, namely, subject, tobacco, cotton fabrics, rayon or artificial fabrics and woolen fabrics, are of special importance in inter-state trade of commerce and every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of the declared goods, he subject, as from the 1st day of April, 1958, to the restrictions and conditions specified in s. 15 of the Central Sales Tax Act , 1956.\" ", "The effect of this provision, as held in M/s v. Commercial Tax Officer & Others, AIR 1965 Cal. 203 is that \"the contents of s. 15 became a part of section 7 from the moment when s. ', was enacted.'' S. 15 of the Central Sales Act applies to \"declared\" goods as defined in s. 2(c) and enumerated in s. 14 of that Act as being of special importance in inter-state trade and commerce. S. 14 of the Central Sales Tax Act , 1956. enumerates various items of goods among which arc the six items specified in s. 3(1) of the 1957 Act and this list further specifies that they shall have the same meaning as is attached to the respective items in the First Schedule to the Central Excises & Salt Act , 1944 vide items (ii-a), ", "(vii), (viii), (ix). (x) and (xi). Thus, it was always clear that the specified goods have to be understood in the way they were defined in the Central Excises & Salt Act , 1944. The idea in 1956 was to restrict the powers of the States to levy sales tax in respect of such goods and other goods. In 1958, the idea was conceived of the levying an additional excise duty on these goods and distributing the same to the States subject to the condition specified in Schedule II that such States did not impose any sale or purchase tax on these commodities. Subsequently, perhaps. it was realised that s. 7 served no specific purpose under the Act except that of the definitions which was an aspect PG NO 823 already covered by s. 2(c) . In these circumstances, not much significance need be attached to s. 2(c) much less can it be construed as negativing the import of other definitions from the 1944 Act. ", "The next question that arises for considerion is, whether, even assuming that the terms of s. 3(3) are applicable, its terms are wide enough to take in not merely the provisions of the Central Excises and & Salt Act , 1944 and, in particular its definition clauses, as they stood in 1957 on the date when the 1957 Act came into force but also the amendments effected therein from time to time. The answer to this question depends upon the general principles applicable to what is described as 'referential legislation' of which this is an instance. Legislatures sometimes take a short cut and try to reduce the length of statutes by omitting elaborate provisions where such provisions have already been enacted earlier and can be adopted for the purpose on hand. While, on the one hand, the prolixity of modern statutes and the necessity to have more legislation then one on the same or allied topics render such a course useful and desirable, the attempt to legislate by reference is sometimes everdone and previty is achieved at the expense of lucidity. However, this legislative device is quite well known and the principles applicable to it fairly well settled. ", "Referential legislation is of two types. One is where an earlier Act or some of its provisions are incorporated by reference into a later Act. In this event, the provisions of the earlier Act or those so incorporated, as they stand in the earlier Act at the time of incorporation, will be read into the later Act. Subsequent changes in thc earlier Act or the incorporated provisions will have to be ignored because, for all practical purposes, the existing provisions of the earlier Act have been re-enacted by such reference into the later one, rendering irrelevant what happens to the earlier statute thereafter. Examples of this can be seen in , AIR 1931 P.C. 149; , AIR 1975 S.C. 17 and , AIR 1979 S.C.798. On the other hand, the later statute may not incorporate the earlier provisions. It may only make a reference of a broad nature as to thc law on a subject generally, as in v. . 3 SCR 561; or contain a general reference to the terms of an earlier statute which are to be made applicable. In this case any modification, repeal or re-enactment of the earlier statute will also be carried into in the later, for here, the idea is that certain provisions of an earlier statute which become applicable in certain circumstances are to be made use of for the purpose of the latter Act also. Examples of PG NO 824 this type of legislation are to be seen in , 3 SCR 786; , 2 SCR 92 and Special Land Acquisition Officer v. , 1 SCR 569. Whether a particular statute falls into the first or second category is always a question of construction. In the present case, in my view, the legislation falls into the second category. S. 3(3) of the l957 Act does not incorporate into the 1957 Act any specific provisions of the 1944 Act. It only declares generally that the provisions of the 1944 Act shall apply \"so far as may be\", that is, to the extent necessary and practical, for the purposes of the 1957 Act as well. That apart, it has been held, even when a specific provision is incorporated and the case apparently falls in the first of the above categories, that the rule that repeals, modifications or amendments of the earlier Act will have to be ignored is not adhered to incertain situations. These have been set out in . [ 1976] 1 SCR 6. In that case. was considering the question whether the amendment of s. 21 of the Penal Code by the Criminal Law Amendment Act . 195X, was also applicable for purposes of the Prevention of Corruption Act , 1947, which by section 2 incorporates, for the purposes of that Act, the definition of `public servant' in s 2l of the Penal Code . Answering thc (question in the affirmative, the outlined the following proposition: ", "\"Where a subsequent Act incorporates provisions of a previous Act. then the borrowed provisions become an integral and independent part of the subsequent Act and are totally uneffected by any repeal or amendment in the previous Act This principle. however will not apply in the following, cases: ", "(a) where the subsequent Act and the previous Act are supplemental to each other; ", "(b) where the two Acts are in pari materia: ", "(c) where the amendment in the previous Act, if not imported into the subsequent Act also, would render the subsequent Act wholly unworkable and uneffectual; and ", "(d) where the amendment of the previous Act, either PG NO 825 expressly or by necessary intendment, applies the said provisions to the subsequent Act. \" ", "The present case falls within the scope of these exceptions, even if s. 3(3) is construed as incorporating certain specific provisions of the 1944 into itself. The legislation presently in question is clearly in pari materia with the 1944 Act. It is also merely supplemental. While the 1944 Act imposes a general levy of excise duty on all goods manufactured and produced, and aim of the present Act is to supplement the levy by an additional duty of the same nature on certain goods. The duration of the applicability is undefined but the statute is clearly enforceable as long as it is in the statute book side by side with the normal excise duties. The clear intention is that the same provisions shall govern both the levies except that the duty under the later Act is confined to certain goods only and its distributability among the States may perhaps follow a different pattern from the principal duty. There is no reason or logic why all the incidents attaching under the earlier legislation, in so &r as they are not clearly inconsistent with the later one should not be extended to the later legislation as well. As has been pointed out earlier, the Finance Act s which levied special or regular or additional excise duties contained in themselves all the elements of charge of duty. The goods were mentioned and the duty as to be levied either at a percentage of the normal excise duty payable under the 1944 Act or at a percentage of the value of the assessable goods as determined under the 1944 Act. All that was further needed was the applicability of the procedural provisions of the 1944 Act Here, however, the 1957 Act is incomplete as to the basis of the charge and its provisions would become totally unworkable unless the concepts of \"manufacture\" and \"assessable value?' as determined under the 1944 Act are carried into it. In the circumstances, I agree that we should give full and literal effect to the language of s. 3(3) and hold that it has the effect not only of attracting the procedural provisions of the 1944 Act but also all its other provisions, including those Containing the definition. M.L.A."], "relevant_candidates": ["0000006759", "0000039750", "0000091201", "0000194832", "0000290613", "0000547717", "0000578191", "0000634002", "0000736278", "0000766438", "0000777743", "0000814624", "0000838980", "0000882769", "0000887203", "0000903306", "0000923724", "0001000517", "0001018531", "0001029775", "0001043701", "0001092578", "0001193965", "0001334697", "0001364847", "0001370552", "0001498531", "0001517094", "0001612528", "0001683667", "0001721191", "0001818078", "0001901075", "0001905585", "0001943218"]} {"id": "0001487227", "text": ["JUDGMENT , J. ", "1. This is an appeal by special leave from the judgment of confirming the death sentence imposed upon each of the three appellants under Section 302 read with Section 34 of the Penal Code for the murder of five persons belonging to one family. Because of the family disputes and rivalry, a serious occurrence took place at about sun set time on the 2nd of December, 1975 resulting in the death of five members of the same family. The appellants are also very close agnation relations of the deceased. ", "2. , and were brothers. was unmarried and used to live with . The three brothers had divided their properties at a private partition. Appellant and are sons of who is dead. Appellant and his brother (since acquitted) are the sons of appellant . 's wife was . They had three sons and a daughter. Their names being , , and . A few months before the occurrence, raised a sum of Rs. 3,000/ at the instance of his brother mortgaging four Kanals of his land. Appellants and wanted a share in that money as they could not reconcile themselves with the fact that the branch of alone should enjoy the property or the money of . They being the sons of another brother of wanted to lay a claim on the property and money of . It appears that it was not known to the prosecution as to how and to what extent the family disputes and rivalry went on gradually aggrava ting and what was the immediate cause of the occurrence. The two brothers amely and who could throw light on this aspect of the atter are both killed in the occurrence. But that is of consequence in this case. ", "3. According to the prosecution case on the day and at the time of the occurrence the four accused went to the house of armed with deadly eapons. had a spear and the other three had Kripans. The three appellants attacked with their respective weapons while he was sitting in a room in his house. (since acquitted) was standing at the oor as a guard. tried to escape but stopped him injuring him on the left shoulder with his The others also attacked him and he fell down. , and ran out of the house. They were chased by was given a injury on the head of and she fell down. All the accused surrounded and nd caused injuries to them. They fell down. The accused raised a Lalkara aying that and should also be done away with. Saying o they went towards a well and the fields of where and were. There they are said to have attacked, with their respective weapons, and . ", "4. , P.W. 6, a close neighbour of , could see only a part of the occurrence and in the company of (not examined) he rushed to at Chheharta and gave a report Ext. P/E to , P.W. 28, the Assistant Sub-Inspector of Police, Incharge of the Out Post. Since did not notice as to whether any person was dead or alive and himself had seen the attack on only, in the report which he lodged he mentioned only that part of the occurrence which he had seen with his own eyes. On that report a case under Section 307 of the Penal Code was instituted at the Police Station Sadar. The report was lodged at at 6.45 P.M. the same day i.e. the 2nd December, 1975 and it was registered in the Police Station 7.20 P.M. P.W. 28 proceeded to the village of occurrence with a Head Constable and two Constables. They learnt there that and had died and was lying unconscious in the house and that , and and had been taken to the Hospital at Amritsar. died on the way when he was being removed to the Hospital sometime later. died in the Hospital on the 11th December, 1975 and died there on the 13th December. ", "5. The learned Additional Sessions Judge, Amritsar, who tried the four accused for the ghastly murder of five persons and for causing injuries to , PW 8 and , PW 9 acquitted as his name was not mentioned in the First Information Report as also for some other reasons. He, however, convicted the three appellants under Section 302 read with Section 34 of the Penal Code imposing death sentence on each of them as also a fine of Rs. 2,000/ separately for each of the five murders. They were also convicted under Section 324 of the Penal Code for causing hurt to and . dismissed their appeal, accepted the death reference and confirmed the death sentence. ", "6. Mr. , learned Counsel for the appellants, made several submissions to persuade us to acquit them or in any event to commute the death sentence imposed upon each of them. We have considered all the submissions made, many of them were of such a nature that we had no hesitation in rejecting them outright. They do not merit any detailed discussion in our judgment as in an appeal on grant of special leave under Article 136 it is not necessary to deal with all of them. We shall, however, proceed to deal with some of them. ", "7. At the outset it may be mentioned that the prosecution had also led evidence of recoveries of certain articles said to have been made at the instance of the accused But finding infirmities in that evidence did not rely upon them. Apart from the fact that accused was a lad of about 12 years of age at the time of the occurrence, the evidence against him was not free from doubt. He, was therefore, acquitted The three appellants were convicted for the murder of , and chiefly upon the evidence of , PW 8, , PW 9 and partly upon the evidence of , PW 6. Mr. asked us to reject the evidence of and in its totality because they had implicated also. On the facts and in the circumstances of this case we find no substance in this argument The two courts of fact have rightly believed theirevidence. The other criticism was that Sarpanch and another Sarpanch named to whom one of the prosecution witnesses had gone were not examined They were not eye witnesses and it is not possible for us to take the view that their non examination in any way affected the prosecution case. The third criticism against the evidence of these two witnesses was that they were tutored witnesses and had given the prosecution version parrot like. Both of them were teenaged children of and their version was so truthful that it was rightly believed by the courts below. ", "8. There were two dying declarations of one oral and the other written which was recorded by the Assistant Sub Inspector of Police, PW 28 on 12-12-75. The oral dying declaration was made to PW 11 . Neither of the dying declarations was relied upon by because he had named also. We may also add although a dying declaration recorded by a Police Officer during the course of investigation is admissible under Section 32 of the Indian Evidence Act in view of the exception provided in Sub-section (2) of Section 162 of the CrPC, 1973, it is better to leave such dying declaration out of consideration until and unless the prosecution satisfies the court as to why it is not recorded by a Magistrate or by a Doctor. As observed by this Court in the practice of the Investigating Officer himself recorded a dying declaration during the course of investigation ought not to be encouraged. We do not mean to suggest that such dying declarations are always untrustworthy, but, what we want to emphasize is that better and more reliable methods of recording a dying declarations of an injured person should be taken recourse to and the one recorded by the Police Officer may be relied upon if there was no time of facility available to the prosecution for adopting any better method. ", "9. There is a dying declaration of , Ext. PFF recorded by , PW 10 He was the Head Constable of the Police Post Chhenarta. At the direction of the Assistant Sub Inspector of Police PW 28 he recorded the statement of at the spot. This dying declaration has been relied upon by the High Court. It could not be rejected on the ground that it was recorded by a Police Officer as he was in a critical condition and no other person could be available in the village to record the dying declaration of . But we find that there is a difficulty in relying upon this dying declaration. and were attacked by the appellants after having raised a Lalkara at the house of to murder them. No body actually saw them murdering either of them. The place where the said two persons were murdered was about a furlong away from the house of . in his statement recorded by PW 10 Ext. PFF which is also signed by the Assistant Sub-Inspector stated:- ", ", , sons of and , son of , who are from our brotherhood have caused injuries to me and the male and female members of my family and my elder brother with Kirpans, and spears on account of dispute over the property of . They have murdered and by inflicting injuries to them. ", "The dying declaration seems to be otherwise truthful but for the fact that it could not be within the knowledge or vision of that was murdered by the appellants. His saying so in the dying declaration makes his statement a bit doubtful. It is, therefore, safe to leave out of consideration this dying declarations. It is important to remember that if the dying declarations both oral and written of are discarded so also the dying declaration of , then no direct evidence remains on the record in regard to the murder of and by the appellants. In all probability they had committed the murder of these two person also because after having raised the Lalkara they went towards the field where and were. But in absence of a direct evidence on the point and also for want of conclusive chain of circumstantial evidence, legally it is not possible to hold that the three appellants were responsible for committing the murder of and . ", "10. We are not impressed with the argument advanced on behalf of the appellants that the occurrence did not take place at about sun set time or that the First Information Report was ante-timed merely because the Illaqa Magistrate received the said report late by a few hours. It is difficult to accept the suggestion in this case that the appellants were falsely implicated and some unknown two persons had committed the murder of so many family members of . The evidence of the two stamped witnesses, and , is so truthful that absolutely there cannot be any doubt about the commission of the ghastly crime by the appellant in the murder of three of the five persons. Regarding the other two, a definite finding may not be possible to be recorded for lack of legal evidence. ", "11. For the reasons stated above, we maintain the conviction of all the three appellants under Section 302 read with Section 34 of the Penal Code for the murder of , and . We also maintain their other convictions. gave an opportunity to the appellants of hearing argument on the question of sentence. That was a sufficient compliance with the law, Argument on the question of sentence was also advanced in . There is no infirmity on that account at all. Special reasons have been given by both the courts for imposing the extreme penalty of death on each of three appellants. While generally agreeing with those reasons we feel persuaded to take a somewhat lenient view in the case of . We could not find with certainty for lack of legal evidence that he alongwith the other two appellants was responsible for causing the death of and . and are nephews of and they had demanded a share in the sum of Rs. 3,000/- received by on execution of the mortgage. was a young man in his twenties at the time of the occurrence. He is a grand nephew of . We, therefore, feel that in his case ends of justice would be met by sentencing him to life imprisonment instead of the imposition of the extreme penalty of death. We further do not feel persuaded to uphold the imposition of fine of Rs. 2,000/- on any of the appellants because after imposing a sentence of death it was not necessary on the facts of this case to impose any sentence of fine on any of them. In the result we uphold the conviction of all the appellants under various counts to the extent and in the manner indicated above. We uphold the sentence of death awarded to appellants and but set aside the imposition of fine of Rs. 2,000/ on each of them. We commute the sentence of death imposed upon and instead sentence him to undergo imprisonment for life. Sentence of fine of Rs. 2,000/- imposed upon him is also knocked down. The appeals are dismissed subject to the modification in the sentence as made above."], "relevant_candidates": ["0001940450"]} {"id": "0001494598", "text": ["JUDGMENT , J. ", "1. This is an application by the Sholapur Municipality against the order of the learned District Judge of Sholapur purporting to act under Section 198 of the Bombay City Municipalities Act, XVIII of 1925, and directing the Sholapur Municipality to pay compensation for 2997 square feet at the rate of Rs. 1-12-0 per square foot to opponent No. 1 alone, and holding that opponent No. 2 's mortgage was vitiated by the doctrine of lis pendens, inasmuch as he took the mortgage with notice of a prior agreement by the owner with Tuljaram during the pendency of a suit by the latter. ", "2. Opponent No. 1 was the owner of the land in suit, and demanded compensation from the Municipality for the land encroached upon by the Municipality at the rate of Rs. 2-8-0 per square foot. The Chief Officer with the consent of referred the matter to arbitration under Section 198, Sub-section (1), of the Bombay City Municipalities Act, 1925. The arbitrators gave an award allowing Rs. 1-12-0 per square foot. The award did not specify the number of square feet but the area mentioned in the proceedings related to 2997 square feet. then made the present application to the District Court demanding the amount as determined by the panchas, and prayed for an order compelling the Municipality to pay the amount due to the applicant at Rs. 1-12-0 per square foot as determined by the panchas with regard to the area of 2997 square feet. The general body subsequently resolved that 860 square feet covered by the drain were to be acquired, and deposited in Court the amount due in respect of the 860 square feet resolved to be acquired. Opponent No. 2 claimed the money as the mortgagee of the property from the predecessor-in-title of the applicant . ", "3. The learned District Judge held that at the time when the negotiations were going on and when the panchayat was constituted, the intention of the was to acquire an area of 2997 square feet in order to open up and widen the roads in the locality, that it was impossible to say that the applicant's acceptance of the rate fixed by the panchas was not induced by the consideration of the resulting improvements to his remaining property, and that it was not open to the to withdraw from the acquisition of 2997 square feet, and that the award was binding on both the parties not only in respect of the rate but also in respect of the area. With regard to opponent No. 2 the learned District Judge held that Gangappa had both actual and constructive notice of the agreement in favour of Tuljaram and that the mortgage of Gangappa was affected by the doctrine of lia pendena, and ordered interest at the rate of six per cent for the remaining portion of the compensation until payment or deposit in the and ordered the to bear the coats of Tuljaram. ", "4. It is urged on behalf of the Municipality that the application made by Tuljaram for compelling the Municipality to pay compensation for the whole of the land is not warranted by any of the provisions of Section 198 of the Bombay City Municipalities Act, 1925, and, therefore, had no jurisdiction to entertain the application and the order passed by is a nullity and should be set aside. It is urged, on the other hand, that the order passed by is not appealable according to the decision in (1911) I.L.R. 36 Bom. 47, s.c. 13 Bom. L.R. 958, and that an application for revision is also incompetent according to the decision in (1916) I.L R. 40 Bom. 509, s.c. 18 Bom. L.R. 340. ", "5. Under Section 198, Sub-section (1), of the Bombay City Municipalities Act, 1925, if an agreement is not arrived at with respect to any compensation directed to be paid by the Act, the amount and the apportionment of the same, if necessary, shall be determined by a panchayat of five persons, of whom two shall be appointed by the , two by the party, and one, who shall be sirpanch, shall be selected by the members appointed. Under Sub-section (2), if both parties fail to appoint the panchas or if the members fail to select the sirpanch, the members can be appointed by the District Judge at the instance of either party. Under Sub-section (8), in the event of the panchayat not giving a decision within one month the matter shall be determined by according to the procedure provided by the Land Acquisition Act , 1894. Under Sub-section (4), either party, if dissatisfied with the decision of the panchayat, may apply to which shall determine the matter in accordance with Sub-section (3), i.e. according to the procedure prescribed by the Land Acquisition Act , In the present case the panchayat gave the decision in favour of Tuljaram, and it cannot be said that he was dissatisfied with the decision of the panch. The application, therefore, of Tuljaram to to compel the defendant to pay compensation for the whole area of 2997 square feet does not fall under Sub-section (4) of Section 198 . Under Sub-section (5), the has power, after the award has been made by the panchayat or , to take possession of the land after paying the amount of compensation to the party to whom such compensation may be payable, and if the party refuses to accept such compensation, or it there is no person competent to alienate the land, or if there is any dispute as to the title to the compensation or as to the apportionment, the may deposit the amount of the compensation in , It is clear from the provisions of Section 198 that the application made by Tuljaram to to compel the to pay compensation for the whole land is not maintainable under any of the provisions of the section. The decision of the panchayat was in favour of Tuljaram, and if the was dissatisfied with the decision, it could have applied to under Sub-section (4) of Section 198 . It appears that the section has failed to make provision for compelling the to pay the amount determined by the panchayat, though provision has been made in favour of the to take possession of the property after paying compensation to the party entitled to it or depositing it in Court. ", "6. It is, therefore, clear that had no jurisdiction in this case to entertain the application made by , It had also no jurisdiction to determine the right of opponent No. 2 who was a mortgagee from the predecessor-in-title of . The question of apportionment of the compensation had not been referred to the panchayat under Sub-section (1) of Section 198 , and the determination by of the right of to the compensation was illegal and without jurisdiction, Mr. , appearing on behalf of the opponent , was constrained to admit that the application made by his client to the lower Court was not justified by the provisions of Section 193 . , therefore, clearly had no jurisdiction to decide the question submitted for its consideration and the decision is null and aoid. ", "7. The next question is whether has power to interfere with the order of . it was held that no appeal lay from the decision of under Clause (3) of Section 160 of the Bombay District Municipal Act (Bom. Act III of 1901), which corresponds to Section 198 of the Bombay City Municipalities Act, 1925, that though a right of appeal is given by Section 54 of the Land Acquisition Act, no appeal is provided by Section 160 of the Bombay District Municipal Act corresponding to Section 198 of the Bombay City Municipalities Act, and that the order of is not a decree because it is made not under the ordinary civil jurisdiction but under the special jurisdiction created by the special Act. ", "8. , it was held that no application can be made under the revisional jurisdiction of from the decision of under Clause (3) of Section 160 of the Bombay District Municipal Act, III of 1901. In that case it was held that as no appeal lay from the decision of the. under that section, it would be anomalous to hold that an application for revision lay, and further it was held, following the decision in the case of v. (1895) I.L.R. 21 Bom. 279, that though the words occurring in Section 160 are \"\", the distinction was not sufficient to support an application for revision to . Section 198 of the Bombay City Municipalities Act of 1925 refers to \"District Judge\" in Sub-section (2) and refers to \"\" in Sub-sections (3), (4) and (6), just as in Sub-section (2) and Sub-section (3) of Section 160 of the Bombay District Municipal Act of 1901. It is difficult to under-stand why \"District Judge\" is mentioned in Sub-section (2) of Section 198 and \"\" in Sub-sections, (8), (4) and (5). The differentiation in the phraseology may be explained if the District Judge is considered a persona designata so far as Sub-section (2) is concerned, and the as distinguished from the District Judge is to determine the rights of the parties under Sub-sections. (3), (4) and (5). ", "9. In v. it was held that a District Judge acting under Section 23 of the Bombay District Municipal Act was not a Court within the meaning of the word in Section 622 of the Civil Procedure Code, 1882, corresponding to a, 115 of the present Code, and had no jurisdiction to revise his order, and it was held that a District Judge as distinguished from is a persona designata. The decision in 's case was followed in (1925) I.L.R. 50 Bom. 357, s.c. 28 Bom. L.R. 519. ", "10. (1913) I.L.R. 38 Mad. 594 it was held by that an order made by under Section 10 of the Religious Endowments Act was an order revisable by the High under Section 115 of the Civil Procedure Code, Reference was made to the decision in the case of v. and the decision that the District Judge was a persona designata under Section 23 of the Bombay District Municipal Act was held to be correct on the ground that the District Judge was a persona designata for a specific purpose and not an officer exercising judicial functions under the Act, but it was held that under the Religious Endowments Act was not a persona designata but a civil exercising jurisdiction under the Act. The case went on appeal to in v. (1917) L.R. 44 I.A. 261, s.c. 19 Bom. L.R. 715, where it was observed by their Lordships of :\" Moreover it is to and not to the individual Judge who may preside in or constitute that jurisdiction is given.\" The decision in the case of was referred to in the Madras case which went up to , and the remark of their Lordships appears to have been made in reference to the designation of the person who had to decide an election under Section 23 of the Municipal Act as a District Judge as distinguished from , Their Lordships of confirmed the view of that , under Section 10 of the Religious Endowments Act, XX of 1863, empowering a civil to fill up the vacancy in , was acting in a judicial capacity as a and not merely in an administrative capacity, and that though no appeal lay under the Civil Procedure Code from such an order, the matter in which the order of was made was a \"case\" within the meaning of Section 115 of the Civil Procedure Code. ", "11. It appears, therefore, that where a Judge or the presiding officer of a as distinguished from the itself is directed to perform any function of an authority created by a statute, such a Judge may be considered as a persona designata and not a , but where a civil subordinate to the High is constituted an authority to decide the rights between the parties and is directed to perform judicial functions, it is difficult to hold that such a is a persona designata and not a subordinate to the High . ", "12. In , v. Postmaster General [1913] A.C. 5446 it was held that , which as regards England consisted of one ex officio and two appointed ers, was established as and an appeal lay from the to except upon questions of fact and locus standi. Lord of Waddington observed as follows (p. 562): ", "Where by statute matters are referred to the determination of a of record with no further provision, the necessary implication is, I think, that the will determine the matters, as a . Its jurisdiction is enlarged, but all the incidents of such jurisdiction, including the right of appeal from its decision, remain the same. ", "13. The question was fully discussed by the full bench of in v. (1925) I.L.R. 3 Ram. 560, F.B., where a distinction is made between the entrustment of the determination of any question concerning rights to a Judge or the presiding officer of a as distinguished from the itself. The same reasoning was adopted in (1923) I.L.R. 50 Mad. 121, 128. ", "14. The decision in proceeds on two grounds, first, that it would be anomalous to hold that an application for revision would lie when no appeal would lie, When the determination of the rights of parties is entrusted by statute to a civil which has to act judicially, the decision of that will be subject to appeal if the right is given by the statute, but the fact that no appeal is provided by the statute is not a sufficient basis for concluding that the is not subordinate to the High and that an application for revision would not lie. Ordinarily an application for revision would lie only when no appeal is provided. The question, therefore, is whether the which decides the rights between the parties according to the provisions of any statute is a subordinate . Though in Sub-section (2) of Section 198 reference is made to the District Judge, whereas in Sub-sections. (3)(4) and (5) reference is made to the District , the District under Sub-sections (3) and (4) has to act according to the procedure provided by the Land Acquisition Act of 1894. Though the District Judge may be a persona designata so far as Sub-section (8) is concerned as being empowered to appoint the members of the panchayat, it does not necessarily follow that the District mentioned in Sub-section (3) and (4) is not a but a persona designati under the Act. I feel some difficulty in agreeing with the view taken in the case of . The case of can be distinguished on the ground that the order of the District in that case was passed under clause 0) of Section 160 of Bombay Act III of 1901, whereas in the present case the application made by Tuljaram does not fall under any of the provisions of Section 198 of Bombay Act XVIII of 1925, and the conditions necessary to invest the District with jurisdiction to decide the matter in controversy do not exist. Even the Collector performing judicial functions under the Mamlatdars' s Act is a subordinate within the meaning of Section 115 according to the decision in (1912) I.L.R. 37 Bom. 114. s.c. 14 Bom. L.R. 947, though the Collector is not ordinarily a subject to the jurisdiction of the High . It is difficult to hold that the District when exercising judicial functions is not subject to the superintendence and control of the High though ordinarily subject to the superintendence and control of the High . In my opinion, the District exercising judicial functions in accordance with the procedure laid down in the Land Acquisition Act according to Sub-section (3) and (4) of Section 198 of the Bombay City Municipalities Act of 1925 is a subordinate under Section 107 of the Government of India Act if not under Section 115 of the Civil Procedure Code. ", "15. In the present case, the application made to to compel the Municipality to pay the compensation for the whole area was not maintainable under any of the provisions of a 198 of the Bombay City Municipalities Act. The decision, therefore, of in such an application is ultra vires. The question as to the area was not referred to the panchayat, though it was assumed, and not disputed that the area to be acquired consisted of 2997 square feet. The determination of the apportionment of the compensation between opponent No. 1 and opponent No. 2 by in the absence of any reference to arbitration of the panchayat under Sub-section (i) of Section 198 is also without jurisdiction, I think, therefore, that the decision of though purporting to be made under Section 198 of the Bombay City Municipalities Act, 1925, does not fall within the ambit of that section and is ultra vires, and cannot be allowed to stand. ", "16. where there was no right of appeal to His Majesty in Council and where it appeared that the order of was passed without jurisdiction, as the matter could not come in appeal to , under Section 47 of the Civil Procedure Code, the orders made by were vacated by their Lordships of . (1925) 28 Bom. L.R. 64 it was held that no appeal lay to from the order passed by the District Judge as persona designata under a scheme for management of a charitable institution, but at page 67 it was observed as follows:- ", "We are not concerned with hypothetical oases which have been suggested be us, such as, the District Judge declining to exercise the functions imposed upon him by the scheme, or in the exercise of those functions entirely failing to exercise any discretion in the matter, When such oases arise, we have no doubt that will be competent to deal with them. ", "17. I think, on the whole, that was not competent to deal with the application made by Tuljaram and its order is illegal and must be vacated. I would, therefore, set aside the order of the lower Court. ", "18. As this point was not raised by the before the lower and the action of the is not free from blame in the present case, we think that the ought to bear their own costs and pay separate sets of costs of the opponents in this and in the lower . ", "Broomfield, J. ", "19. The short facts necessary for deciding this revisional application are these:The present applicant, the Sholapur Municipality, desired to acquire some land belonging to , opponent No. 1. It was agreed between the parties that 2997 square feet should be acquired, and as the Municipality considered that the compensation demanded by Tuljaram was exorbitant, the matter was referred to arbitration as provided by Section 198 of Act XVIII of 1925. The panchas decided that compensation should be paid at the rate of Rs. 1-12-0 per square foot. The area to be acquired was not settled by the panchas, because at the time there was no dispute on that point, But afterwards the Municipality changed its mind and proposed to acquire 860 square feet only at the same rate per square foot. Tuljaram having failed to obtain payment made an application to , Miscellaneous Application No. 87 of 1928, described as an application under Section 198 of the Act, in which he prayed that the Municipality should be compelled to pay compensation at Rs. 1-12-0 per square foot for 2997 square feet. At the hearing of this application the District Judge considered two principal issues: (1) whether the Municipality was bound to acquire the whole area originally agreed upon, (2) whether the compensation should be paid to Tuljaram or to one , who claimed an interest in the property as mortgagee. This is opponent No. 2. He was not a party to the arbitration proceedings but was made a party to the proceedings before at the instance of the Municipality. The District Judge decided (1) that the Municipality was bound to pay compensation at Rs. 1-12-0 per square foot for the whole area, and (2) that the compensation should be paid to , and payment was ordered accordingly. The Municipality has applied to this Court for revision of this order. ", "20. A preliminary question arises as to whether the application is competent, that is to say, whether has any power to revise the order of purporting to have been made under Section 198 of Act XVIII of 1925. Prima facie it would appear that must possess this power. Section 115 of the Civil Procedure Coda gives power to to revise the proceedings of any subordinate to in a case in which no appeal lies. Section 4 , Clause. (1), of the Code provides as follows: ", "In the absence of any specific provision to the contrary, nothing in this Code shall be deemed to limit or otherwise affect any special or local law now in force or any special jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time being in force. ", "21. This has been interpreted to mean that the provisions of the Code apply to proceedings under special Acts unless there is some provision in the special Act which shows a contrary intention. (1886) I.L.R. 13 Cal. 221. Velli Peviya Mira v. (1886) I.L.R. 9 Mad. 332 was a case under the Madras Rent Recovery Act which contained an express provision that orders passed under it should not be liable to revision except by . It was held, therefore, that had no power of revision, the implication being that but for this provision would have had that power. There is no provision in Act XVIII of 1925 such as there was in the Act dealt with in v. , which excludes the revisional jurisdiction of . It would appear, therefore, that Section 115 must apply and give this power to revise the order of the District Judge, if it can be regarded as an order of a subordinate to . ", "22. Then there is Section 107 of the Government of India Act which gives powers of superintendence over all subject to its appellate jurisdiction. The power of superintendence here referred to includes the power of revision: v. (1882) I.L.R. 9 Cal. 295, P.C. and (1925) I.L.R. 3 Ran. 410, 429, 430, F.B. The words \"subject to its appellate jurisdiction\" do not mean, of course, subject to the appellate jurisdiction in that particular matter, for revision would not be necessary if an appeal lay, but subject to its appellate jurisdiction normally, or even in certain specific cases only: v. King-Emperor (1918) 3 P.L.J. 581, F.B. . therefore, has power to revise the order in question under Section 107 of the Government of India Act if it is an order of a normally subject to the appellate jurisdiction of . ", "23. That in the present case we are concerned with an order of a is clear from the language of Section 198 . Under Clause (2) the District Judge is given power to appoint arbitrators in certain circumstances, but when it is a question of the determination of any dispute between the parties, whether on failure of the panchayat to give a decision, Clause (3), or in case either party is dissatisfied with the decision of the panchayat, Clause (4), it is the District which is empowered to deal with the matter, and the procedure to be followed is that laid down in the Land Acquisition Act for proceedings referred for the determination of the . That being so, the ratio decidendi of such cases as v. (1907) I.L.R. 30 Mad. 326, v. (1925) I.L.R. 3 Ran. 410, 429, 430, F.B., , In re (1917) I.L.R. 42 Bom. 119, s.c. 19 Bom. L.R. 926, and v. King-Emperor (1918) 3 P.L.J. 581, F.B., where it was held, respectively, that the High has no power to revise the orders of a District Registrar, a Rent Collector under the Rangoon Rent Act, a District Judge acting departmentally as the head of an office, and a Commissioner appointed under the Defence of India Act, has little or no application in the present case. Lastly, Section 3 of the Code provides in terms that the District is subordinate to the High for the purposes of the Code. So that for the purposes of Section 107 of the Government of India Act the District must be regarded as generally subject to the appellate jurisdiction of the High . ", "24. If the matter were res integra, there could be no question, in my opinion, that this application for revision is competent. The difficulty arises owing to the decision in v. , where it was held that no application for revision lies against the decision of under Clause (3) of Section 160 of the Bombay District Municipal Act III of 1901, which corresponds to Clause (3) of Section 198 of the present Act, The first point to be noted in connection with this case is that the application had been properly made to under Clause (3) of Section 160 . In that case the panch had failed to deliver their award and was, therefore, empowered to determine the dispute as to the amount of compensation. It is true that the Judge in that casehe happened to be an Assistant Judgedid not decide the dispute, because he was of opinion that he had no jurisdiction to do so until certain other matters had first been submitted to arbitration. Nevertheless it was possible for this to hold in the circumstances that the order was one which was intended to be final and should not, therefore, be revised. It was not a case like the present where was applied to for an order which it was not empowered to makethere is nothing in Section. 198 which gives power to enforce an award on the application of a party who relies upon itand where moreover the has determined a dispute, viz., that between Tuljaram and , which had not been submitted to arbitration and was not within the jurisdiction of the at all. ", "25. The judgment of Batchelor J. in (1916) I.L.R. 40 Bom. 539, s.c. 18 Bom. L.R. 340 is a short one and I quote the material part of it (p. 511):- ", "In the case of it has been decided by a Bench of this that no appeal lies from the decision of under Clause (3) of Section 160 of the Bombay District Municipalities Act. The object of this application is to obtain from the a decision that although no appeal would lie, yet an application in revision does lie. Such a decision would, in our opinion, be seriously anomalous, and we do not think that the words of the Statute require us to make such a pronouncement, The only decision which seems to us fairly consistent with that already recorded in case, is the decision that no application for revision is competent. In v. this has held that it has no jurisdiction to revise the order of a District Judge acting under Section 23 of the Bombay District Municipalities Act of 1884. And although the words occurring in that section are 'District Judge,' whereas the words occurring in Section 160 , last clause, are 'District ,' we do not think that the distinction is sufficient to support the argument that an application for revision is competent, although admittedly no appeal would lie. ", "26. In case it was decided that no appeal lies from the decision of under Clause (3) of Section 160 of the Bombay District Municipal Act. The fact that there is no appeal does not ordinarily imply that there is no remedy by revision either. In fact revision only lies under Section 115 of the Code in cases where there is no appeal, So that evidently what meant when he said that any other decision would be seriously anomalous was this, viz., that the particular grounds on which it had been decided that there was no appeal would apply equally in the case of a revision application. This appears to be the main ground of decision. A subsidiary ground was that in v. it was decided that had no jurisdiction to revise the order of a District Judge under Section 23 of the Bombay District Municipal Act of 1884, on the ground that the District Judge was not a but a persona designata. apparently considered that it made no material difference whether the powers under a special Act were assigned to the District Judge or to the District . ", "27. It is, therefore, necessary to refer to and v. , and see exactly what was decided in those cases and what the basis for the decisions was. The facts in case were that an application had been properly made to under Section 160 , Clause (3), for the determination of the compensation due to the applicant after failure of the panchayat to determine the amount. made an order determining the amount and the applicant appealed, view was that only came in as a substitute for the panchayat where adjudication by the latter had failed, and, therefore, 's order could not be questioned any more than the award of the panchayat could be questioned by way of an appeal. The learned Judge also referred to the provisos to Section 160 , Clause (3), which are the same as the provisos to Section 193 , Clause (3), of the present Act, namely, \"(a) no application to the Collector for a reference shall be necessary\", and \"(b) the Court shall have full power to give and apportion the costs of all proceedings in any manner it thinks fit\". These provisos were relied upon as indicating that the decision of was intended to be final. This, so far as I can see, is the only reason in the judgment which can in any way be said to negative the power of to revise 's order The additional reason given for holding that there was no appeal, namely, that the order could not be regarded as a decree, would not affect the question of revision at all. ", "28. Now, if the decision in this case is to be considered not with reference to the question which was decided in the case itself, namely, the question whether there was an appeal, but with reference to the question whether a revision application lies, there are two important points of difference which, I think, must affect the decision. In the first place, though the award of a panchayat is no doubt final in the sense that it is not open to appeal, it is not final in the sense that it can be executed as it stands. It can only be made executable apparently by being filed as a decree as provided by the Civil Procedure Code or by means of a suit to enforce it. On the other hand, the order of is itself enforceable in execution as held in (1923) I.L.R. 47 Bom. 654, s.c. 25 Bom. L.R. 305. In that very important respect, therefore, the award of a panchayat and the order of do not stand on the same footing, and the argument that the intended that there should be no interference with 's order is, in my opinion, very materially weakened. The second argument baaed on the intention of the to give finality to orders passed under Section 198 can only apply with any force to orders contemplated by the provisions of that section, As I have mentioned, in , it was possible to hold that 's order came within the purview of the section. But what the has decided and ordered in the present case is outside the purview of the section altogether. It would be impossible to hold that the was functioning simply as a substitute for the panchayat when it dealt with matters not referred to the panchayat at all. The main line of reasoning in case appears, therefore, to have no application. ", "29. As regards v. , that was a case under the Bombay District Municipal Act, 1884, Section 23 of which Act empowered the District Judge to pass an order for confirming or amending the declared result of an election or for setting the election aside. The section also provided that the District Judge might exercise any of the powers of a civil Court and that his decision should be conclusive. In the particular case the District Judge had refused to set aside an election and had ordered the applicant to pay the costs of the other party. It was this order for payment of costs which was asked to revise, and it was held that the District Judge acting under Section 23 was not a Court and that could not interfere. ", "30. Two points are to be noted in connection with this case. In the first place, the powers under Section 23 of the Act of 1884 were given to the District Judge and not to . in no doubt expressed the view that that made no difference. But that view, it would appear, is no longer tenable having regard to the judgment of in v. (1917) I.L.R. 40 Mad. 793, s.c. 19 Bom. L.R. 715, P.C., The reasoning of Lord in that case was that in determining whether an order is that of a ."], "relevant_candidates": ["0000278608", "0000373129", "0000637056", "0000781420", "0000971297", "0001117322", "0001396941", "0001604944", "0001652166", "0001696297"]} {"id": "0001497372", "text": ["PETITIONER: FIRM A. T. B. MEHTABMAJID AND CO. Vs. RESPONDENT: STATE OF MADRAS AND ANOTHER DATE OF JUDGMENT: 22/11/1962 BENCH: , RAGHUBAR BENCH: , RAGHUBAR DAS, S.K. KAPUR, J.L. SARKAR, A.K. HIDAYATULLAH, M. CITATION: 1963 AIR 928 1963 SCR Supl. (2) 435 CITATOR INFO : RF 1964 SC1006 (9,14) R 1964 SC1729 (4,8,10,13,32) E 1968 SC 599 (14) R 1969 SC 147 (8,18,26) F 1969 SC 504 (6) R 1971 SC 870 (13) RF 1974 SC2344 (1) D 1977 SC 548 (4,6) RF 1977 SC 879 (13,14,19,23) R 1986 SC 63 (36) D 1986 SC 515 (104,106) F 1987 SC1922 (7,10,12) RF 1988 SC 740 (19) R 1988 SC1814 (6) R 1988 SC2038 (4) D 1989 SC1949 (12) R 1989 SC2015 (8) E&D 1990 SC 820 (14,18) ACT: Sales Tax-Tanned hides and skin imported from outside and sold inside the State-Hides and skins tanned and sold inside the State-Sales Tax higher on the latter-If discriminatory- Old rule Substituted by new rule-Old rule does not revive when new rules declared invalid-Constitution of India, Arts.301, 304-Madras General Sales Tax Act (IX Of 193), ss. 3,5, 19.Madras General Sales Tax Rules, r. 16. HEADNOTE: This is a petition under Art. 32 of the Constitution, the petitioners are dealers in hides and skins in the State of Madras. The impugned sales tax assessment relates to turn- over of sales of tanned hides and skins which had been obtained from outside the State of Madras. The main contention of the petitioners is that the tanned hides and skins imported from outside and sold inside the State are, under r. 16 of the Madras General Sales Tax Rules, subject to a higher rates of tax than the tax imposed on hides and skins tanned and sold within the State and this discriminatory taxation offended Art. 304 (a) of the Constitution. The respondents contentions were (a) sales tax doe,; not come within the purview of Art. 304 (a)' as it is not a tax on the import of goods at the point of entry, (b) the impugned 436 rule is not a law made by the State legislature, (c) the impugned rule by itself does not impose the tax but fixes the single point at which the tax is imposed by ss. 3 and 5 of the Act is to be levied. (d) The impugned rule was not made with an eye on the place of origins of the goods. Held, that it is 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 regulating measures. Sales Tax, of the kind under consideration, 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 Art. 301 and will be valid only if it comes within the terms of Art. 304 (a). , 1 S. C. R. 809, , 1 S. C. R. 491, followed. Article 304 (a) allows the legislature of a State to impose taxes on goods imported from other States and does not support the contentions that the imposition must be at the point of entry. Section 19 (5) of the Madras General Sales Tax Act provides that the 'rules made thereunder shall have effect as if enacted in the Act and r. 16 of the Madras General Sales Tax Rules would fall within a law made by . What that rule provides is a step necessary fur the imposition of tax in view of ss. 3 and 5 and therefore the impugned rule is a part of the enactment which imposes the tax. The fact that the impugned rule was made in view of ss. 385, in order to prescribe the single point in series of sales does not justify its discriminatory character, Rule 16 (2) discriminates against the imported hides or skins which had been purchased or tanned outside and therefore it contravenes Art. 304 (a) of the Constitution. Once an old rule has been substituted by a new rule, it ceases to exist and it does not get revived when the new rule is held invalid. The tax imposed in the present case has not been imposed by misconstruing the provisions of a valid Act but it has been imposed without jurisdiction by reason of the invalidity of r. 16. 437 Ujjam Bai v. State of U. P., 1 S.C. R. 778, distinguished. JUDGMENT: ", "ORIGINAL JURISDICTION : Petition No. 147 of 1959. (Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights). ", " and , for the petitioner. and , for respondents Nos. 1 and 2. ", ", for the intervener. ", "1962. November, 22. The judgment of the was delivered by RAGHUBAR DAYAL, J.-This petition under Art. 32 of the Constitution raises the question of the validity of r. 16 of the Madras General Sales Tax (Turnover & Assessment) Rules, 1939, hereinafter called the rules. The impugned rule was published on September 7, 1955, and was substituted in the place of old r. 16. The new rule was to be effective from April 1, 1955. ", "The petitioner is a dealer in hides and skins. He sells hides and skins tanned outside the State of Madras, as well as those tanned inside the state. The Deputy Commercial Tax Officer, 1, Moore Market Division, Madras, assessed the petitioner to sales tax for the year 1955-56 on a turnover of Rs. 29,89,624-15-11. Out of this a turnover of Rs. 28,10,625-2-0 represented sales of tanned hides and skins which had been obtained from outside the State of Madras. Sales tax was levied on hides and skins under the provisions of the Madras General Sales Tax Act, 1939 (Act IX of 1939), hereinafter called the Act. Section 3 is the charging section and its relevant portions read: \"3. (1) Subject to the provisions of this Act, (a) every dealer shall pay for each year a tax on his total turnover for such year; and ", "(b) the tax shall be calculated at the rate of three pies for every rupee in such turnover :- ", "x x x x x\" ", "Section 5 of the Act provides for exemptions and reductions of tax in certain cases. Clause (vi ) thereof provides that the sale of hides and skins, whether tanned or untanned, shall be liable to tax under section 3, sub-section (1), only at such single point in the series of sales by successive dealers as may be prescribed. Section 19 empowers to make rules to carry out the purposes of the Act. ", "The new rule 16, whose validity is challenged for the petitioner, reads : ", "\"16.(1) In the case of untanned hides and/or skins the tax under section 3(1) shall be levied from the dealer who is the last purchaser in the State not exempt from taxation under section 3(3) on the amount for which they are bought by him. ", "(2) (i) In the case of hides or skins which have been tanned outside the the tax under section 3(1) shall be levied from the dealer who in the is the first dealer in such hides or skins not exempt from taxation under section 3(3) on the amount for which they are sold by him. ", "439 ", "(ii)In the case of tanned hides or skins which have been tanned within the State, the tax under section 3(1) shall be levied from a person who is the first dealer in such hides or skins not exempt from taxation under section 3(3) on the amount for which they are sold by him: ", "Provided that, if he proves that the tax has already been levied under sub-rule (1) on the untanned hides and skins out of which the tanned hides and skins had been produced, he shall not be so liable. ", "(3)The burden of proving that a transaction is not liable to taxation under this rule shall be on the dealer.\" It is contended for the petitioner that the effect of this rule is that tanned hides or skins imported from outside the and sold within the are subject to a higher rate of tax than the tax imposed on hides or skins tanned and sold within the -, inasmuch as sales tax on the importer] hides or skins tanned outside the is on their sale price while the tax on hides or skins tanned within the , though ostensibly on their sale price is, in view of the proviso to cl. (ii) of sub-r. (2) of r. 16. really on the sale price of these hides or skins when they are purchased in the raw condition and which is substantially less than the sale price of tanned hides or skins. Further, for similar reasons, hides or skins imported from outside the after purchase in their raw condition and then tanned inside the are also subject to higher taxation than hides or skins purchased in the raw condition in the and tanned within the , as the tax on the former is on the sale price of the tanned hides or skins and on the latter is on the sale price of the raw hides or skins. Such a discriminatory taxation is said to offend the provisions of Art. 304(a) of the Constitution. Similar are the contentions for the interveners in the case. The contentions for the respondents are Sales tax does not come within the purview of Art. 304(a) as it is not a tax on the import of goods at the point of entry. (2) The impugned rule is not a law made by the Legislature. (3) The impugned rule, by itself, does not impose the tax, but fixes the sin-ale point at which the tax imposed by ss. 3 and 5 of the Act is to be levied. (4) The impugned rule was not made with an eye on the place of origin of the goods but as a matter of necessity, in view of the requirements of the statutory provisions to the effect that hides or skins, raw or tanned, came within one category and that the tax on them could be levied at a single point only. The impugned rule, therefore, fixed that single point with respect to the sale of raw hides or skins at the last purchase by the dealer in the and with respect to the sale of tanned hides or skins at the first sale of such tanned hides or skin$ by the dealer in the . In the former case, the tax was levied on the price the purchaser paid while in the latter case it was on the price at which the seller sold. ", "Article 301 of the Constitution which provides for trade, commerce and intercourse throughout the territory of India to be subject to the other provisions of Part XIII, has been construed by this Court in (1) and in v. The State of Rajasthan and Ors.(2) : ", "The majority view in the Atiabari Tea Co. Case (1) which has been accepted in the Automobile Transport Case (2) is, as expressed by , J., at p. 860 : \"Thus considered we think it would be reasonable and proper to hold that restrictions freedom (1) [1961] 1. S.C.R. 809. ", "(2) [1963] 1 S.C.R. 491, from which is guaranteed by Art. 301 , would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Art. 301......... We arc therefore satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by Art. 301 a rational and workable test to apply would be : Does the impugned restriction operate directly or immediately on trade or its movement ?...... Our conclusion therefore is that when Art. 301 provides that trade shall be free throughout the territory of India it means that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves. It is the free movement or 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 restrictions on the very movement of such goods it attracts the provisions of Art. 301 , and its validity can be sustained only if it satisfies the requirements of Art. 302 or Art. 304 of Part XIII.\" In the majority judgment in the Automobile Transport Case (1) it was said at p. 1424 : ", "\"The interpretation which was accepted by the majority in the Case is correct, but subject to this clarification. Regulatory measures or measures imposing Compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Art. 301.\" ", "Earlier in the judgment it was observed, at p. 1422: \"Such regulatory measures as do not impede (1) [1963] 1 S.C.R. 491. ", "442 ", "the freedom of trade, commerce and intercourse and compensatory taxes for the use of trading facilities are not hit by the freedom declared by Art. 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and intercourse but rather facilitate them.\" , concurred in this view and said at p. 1436 : \"(1) Art. 301 declares a right of free movement of trade without any obstructions by way of barriers, inter- or, intrastate, or other impediments operating as such barriers. (2) The said freedom is not impeded, but, on the other hand, promoted, by regulations creating conditions for the free movement of trade, such as, police regulations, provision for services, main- tenance of roads, provision for aerodromes, wharfs etc., with or without compensation.\" 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 consideration 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 and goods of another, may affect the free flow of trade and it will then offend against Art. 301 and will be valid only if it comes within the terms of Art. 304 (a). Article 304(a) enables a to make laws affecting trade, commerce and intercourse. It enables the imposition of taxes on goods from other s if similiar goods in the are subjected to similiar taxes, so as not to discriminate between the goods manufactured or produced in that and the goods which are imported from others s. This means that if the affect of the sales-tax on tanned hides or skins imported from outside is that the latter becomes subject to a higher tax by the application of the proviso to sub-rule of r. 16 of the Rules, then the tax is discriminatory and unconstitutional and must be struck down. We do not agree with the contentions for the respondents. The contention that Art. 304 (a) is attracted only when the impost is at the border, i.e., when the goods enter the on crossing the border of the , is not sound. Art. 304(a) allows a to impose taxes on goods imported from other s and does not support the contention that the imposition must be at the point of entry only. ", "Section 5 (vi) provides that the sale of hides or skins, whether tanned or untanned, shall be liable to tax under s. 3(1) only at such single point in the series of sales by successive dealers as may be prescribed. 'Prescribed' means 'Prescribed by rules made under the Act.' Rule 16 prescribes such single point. This rule was made by the Governor in the exercise of power confer-red on him under s. 19 of the Act and would therefore have statutory force. In fact, sub- s. (5) of s. 19 provides that the rules shall have effect as if enacted in the Act. We therefore do not agree that r. 16 is not a law which would fall within a law made by . ", "It is true that the impugned rule, by itself, does not impose the tax, but fixes the single point at which the tax imposed by ss. 3 and 5 is to be levied. What the rule provides is a step necessary for the imposition of the tax, in view of ss. 3 and 5 and therefore the impugned rule is a part of the enactment which imposes the tax. ", "444 ", "The fact that the impugned rule was made in order to prescribe the single point in the series of sales by successive dealers at which the tax on sale of hides or skins was to be levied, in view of ss. 3 and 5 of the Act, does not justify the making of such a rule which discriminates between the tax imposed on goods imported from outside the State and the goods produced or manufactured in the State. ", "Now, the only question that remains for consideration is whether this rule discriminates between hides or skins imported from outside the State and those manufactured or produced in the State. ", "Sub-rule (1) of the rule deals with the sale of raw hides and skins. The tax is levied from the dealer who is the last purchaser in the . Its vires is not challenged. Clause (i) of sub-r. (2) provides for the levying of tax on the sale of hides and skins which had been tanned outside the . The tax is levied from the dealer who.. in the , is the first seller of such hide or skins. The result is that a dealer in hides or skins which have been tanned outside the has to pay the tax on the amount for which such hides or skins are sold by him. Clause (ii) of this sub-rule is in identical terms with respect to the sale of tanned hides or skins which have been tanned within the . The tax is to be levied from the person who is the first dealer in such hides or skins and is levied on the amount for which they are sold. The descrimination. it is argued, comes in on account of the proviso to this sub-cl. ", "(ii). The proviso is to the effect that if the dealer of hides or skins which had been tanned within the proves that tax had already been levied on those hide or skins in their raw condition, in accordance with sub-r. (1)., he will not be liable to the tax under sub-cl. (ii) of sub-r. (2). The result therefore is that the sale of hides or skins which had been purchased in the and then tanned within the is not subject to any further tax. Hides and skins tanned within the are mostly those which had been purchased in their raw condition in the and therefore on which tax had already been levied on the price paid by the purchaser at the time of their sale in the raw condition. If the quantum of tax had been the same, there might have been no case for grievance by the dealer of the tanned hides and skins which had been tanned outside the . The grievance arises on account of the amount of tax levied being different on account of the existence of a substantial disparity in the price of the raw hides or skins and of those hides or skins after they had been tanned, though the rate is the same under s. 3 (1) (b) of the Act. If the dealer has purchased the raw hide or skin in the , he does not pay on the sale price of the tanned hides or skins, he pays on the purchase price only. If the dealer purchases raw hides or skins from outside the and tans them within the , he will be liable to pay sales-tax on the sale price of the tanned hides or skins. He too will have to pay more for tax even though the hides and skins are tanned within the , merely on account of his having imported the hides and skins from outside-, and having not therefore paid any tax under sub-r. (1). It is true that dealers, though few, selling hides and skins which had been tanned within the will also have to pay similar tax if no tax had been paid previously, they having not purchased the raw hides and skins at all as they were from the carcasses of animals owned by them; but this does not affect the discriminatory nature of the tax as already indicated. It is urged for the respondent that to consider discrimination between the imported goods and goods produced or manufactured in the , circumstances and situations at the taxable point must be similar and that the circumstance of hides or skins tanned within the and on which tax had been paid earlier at the time of their purchase in the raw condition is sufficient to consider such hides or skins to be different from the hides or skins which had been tanned outside the . We do not consider that the mere circumstance of a tax having been paid on the sale of such hides or skins in their raw condition justifies their forming goods of a different kind from the tanned hides or skins which had been imported from outside. At the time of sale of those hides or skins in the tanned state, there was no difference between them as goods and the hides or skins tanned outside the as goods. The similarity contemplated by Art. 304 (a) is in the nature of the quality and kind of the goods and not with respect to whether they were subject of a tax already or not. ", "We are therefore of opinion that the privisions of r. 16 (2) discriminate against the imported hides or skins which had been purchased or tanned outside the and that therefore they contravene the provisions of Art. 304 (a) of the Constitution. ", "It has been urged for the respondent that if the impugned rule be held to be invalid, old r. 16 gets revived and that the tax assessed on the petitioner will be good. We do not agree. Once the old rule has been substituted by the new rule, it ceases to exist and it does not automatically get revived when the new rule is held to be invalid. Lastly, we may refer to the Preliminary objection raised on behalf of the respondent to the maintainability of this petition, in veiw of the decision of this Court in (3). This petition does not come within that decision. This is not a case in which the tax has been levied by the Deputy Commercial Tax Officer by misconstruing certain provisions of a valid Act, but is a case where the taxing officer had no juris- (1) 1. S.C.R. 778. ", "447 ", "diction to assess the tax on account of the invalidity of the rule under which the tax was assessed. We therefore allow this petition with costs holding the impugned rule 16 (2) invalid and order the issue of a writ of mandamus to the State of Madras and under the Act to refrain from, enforcing any of the provisions of r. 16 (2) and direct them to refund the tax illegally collected from the petitioner. Petition Allowed."], "relevant_candidates": ["0000304499", "0000514162", "0000673012"]} {"id": "0001502516", "text": ["JUDGMENT , J. ", "1. The plaintiffs are a firm of carrying-on banking business in Singapore and other places. They allege in the plaint that they appointed the defendant as their agent to conduct business in Singapore for a period of 3 years and as his conduct was found not to be satisfactory they sent another agent after the expiry of the 3 years' period and wrote to the defendant to hand over the business with the account books, documents and cash on hand to the new agent, that the defendant refused to hand over charge of the business to the new agent until and unless the accounts between him and the plaintiffs were settled and the letter containing the terms of the agency written by him to the plaintiffs, called the salary chit, was returned to him and a release deed was executed in his favour releasing him from all claims against him with reference to his agency, that as the defendant was obdurate and as the plaintiffs feared that they might suffer heavy loss by the stoppage of business they consented to authorise their new agent to give a release to him, that : the defendant after getting the. release deed and the return of the salary chit handed over the account books, vouchers and cash on hand to the new agent and that the release deed was obtained under coercion and is : therefore voidable at their instance. They further allege that the defendant had improperly debited them with the loss sustained by him in his own private transactions in dollars and that he lent large sums of money without proper security and contrary to orders. The plaintiffs pray that the release deed be declared void as having been obtained under coercion and that the defendant be directed to render an account of the transactions during the period he was their agent. The defendant in his written statement denies that the release deed was obtained under coercion and avers that he acted honestly and diligently in his capacity as agent, that he did not wrongly debit the plaintiffs with his losses, that he did not improperly lend money to the customers and that the plaintiffs are estopped by their conduct from denying the validity of the release deed. ", "2. Two preliminary issues were framed by the Subordinate Judge: ", "(1) Whether the acquittance granted to the defendant was done under the circumstances detailed in the plaint and hence voidable; and are the plaintiffs entitled to call for an account of the defendant? ", "(2) Whether the allegations in paragraphs 29 and 30 of the written statement are true, and does it estop the plaintiffs from doing so? ", "3. The Subordinate Judge held that the release deed was obtained from the plaintiffs' agent under coercion and that they did not ratify the release deed and directed an account to be taken. The defendant has preferred this appeal. ", "4. The first question for decision is whether Ex. IV, the release deed, was obtained under coercion and as such voidable at the instance of the plaintiffs. The admitted facts are : the plaintiffs appointed the defendant as their agent to conduct their business at two places in Singapore and the defendant, according to the custom obtaining among the Nattukottai Chetties, executed what is popularly known as \"salary chit\" (Ex. K) on 4th March, 1918, setting out the terms on which he undertook to work as the plaintiffs' agent. He went to Singapore and worked as their agent without any hitch till the beginning of 1920. He did not send the kurippu for Masi corresponding to February-March, 1920, as he should have done about the beginning of Panguni. He sent the kurippu for Masi and Panguni on the 3rd of Chitrai corresponding to the 15th of April, 1920. See Ex. H (2). He wrote to the plaintiffs Ex. F on 24th May, 1920, making a special reference to the loss sustained in exchange transactions and promising to make good the loss in some other transactions. The 1st plaintiff on the receipt of Ex. F sent to the defendant the following-telegram (Ex. F-l) on 10th June, 1920: ", "Deal with money-lending; don't have other transactions, see letter and wrote Ex. F (2) on 12th June, 1920, charging the defendant with having debited them with losses sustained by him in exchange transactions on his own private account and saying that if he had done the business for the firm he would have taken their permission before embarking upon speculation in the exchange market. The defendant continued to manage the plaintiffs' business at Singapore for more than a year after the date of Ex. F (2). ", "5. The plaintiffs appointed another agent one in the place of the defendant and wrote to the defendant Ex. D-5 on 27th November, 1921 and informed him of their having sent to take charge of the business, that he should get the accounts prepared and closed and that he should come away without delay. The following passage in the letter is important: ", "As soon as he arrives, get the accounts prepared and closed and come without delay.... If there is something more to be collected, better get it collected and make out a copy of the items that can be copied and come away after getting the accounts closed. If in both the said firms any items are not collected and will have to be realised slowly, have them entered as old accounts and come away... Please also intimate to me about the arrival of there. ", "6. From this letter it is clear that the plaintiffs appointed a new agent and asked the defendant to come away from Singapore; in other words, they asked him to cease to be their agent at Singapore as soon as went there and took charge of the business. The defendant did not hand over charge to and insisted upon the accounts being settled in Singapore contrary to the custom prevailing among the and contrary to the terms of Ex. K and insisted upon his being given a release deed in respect of any claim that the plaintiffs might make in respect of any of the transactions conducted by him as agent. Ex. C written by on 30th December, 1921, to the plaintiffs shows the attitude of the defendant at the time. He writes: ", "When was asked to prepare and give accounts in the order of dates, he said : 'I cannot prepare and give account. I shall prepare the ayinthogai (balance sheet) as matters stand and give the same. I should be relieved (of my duties) here and my salary chit should be given and the account settled. ", "7. When he was told that it was not the proper course and that he might prepare and give the accounts as matters stood and that the accounts might be settled on going to the headquarters as usual he said definitely: ", "It cannot be done. My account should be settled here alone and I should be relieved of my duties. ", "8. appealed to the defendant not to be obstinate and asked the other to persuade him to hand over charge of the business to him with the account books, etc. The friends of the defendant and the plaintiffs tried to induce the former to hand over the business to and to have the accounts settled at the ' place in Madura. The plaintiffs wrote Ex. D-2 on 5th January, 1922, complaining of his attitude as being \"unusual, novel, indecent and improper\" and asking him without allowing the business to get spoiled to write up and deliver the accounts and to let them know about it. The defendant wrote Ex. E-l on 19th January, 1922, to the plaintiffs in which he stated: ", "You should send my salary chit to who has come here for the new account together with a letter signed by yourself and and directing that the accounts, documents, etc., of our shop and A. R. K. R. shop should be taken charge of in accordance with the balance sheet, my salary account, etc., looked into and a receipt granted (to me) so as not to have any further claim upon me. ", "9. The plaintiffs wrote Ex. D-3 on 1st February, 1922, complaining of his not having handed over the account books to who had been waiting there from 25th Karthigai and informing him that as requested by him they had sent the salary chit to and that he should after getting the salary chit deliver to the new account, the accounts relating to the firm as well as the cash items, documents, box, packets, etc., and also execute the necessary power, assignment and all other documents without any further delay. The defendant insisted upon a release deed being executed in his favour before he could hand over the charge to . From Exs. D, C and E series it is clear that the plaintiffs found themselves in as helpless state and reluctantly consented to do as the defendant wished. Ex. III written by the 2nd plaintiff to the 1st plaintiff on 19th March, 1922, shows the state of the mind of the plaintiffs. strongly advised the plaintiffs to consent to give a release deed to the defendant as otherwise the plaintiffs might sustain heavy loss owing to stoppage of business and that if so advised they might take steps against him afterwards. Ex. IV was executed by in favour of the defendant on 21st April, 1922, whereupon the defendant handed over the account books, cash, etc., to . ", "10. The question is do the above facts make out that the defendant got the release, Ex. IV from the plaintiffs under circumstances which amount to coercion. He was in possession of the documents, account books and cash belonging to the plaintiffs. After he was asked to hand over charge to he had no right to withhold from the plaintiffs' new agent their property. remained there for about 4 months before he could get possession of the account books, etc., in order to carry on the business. The stoppage of the business was likely to cause heavy loss to the plaintiffs. Coercion is defined in Section 15 of the Contract Act, as \"committing, or threatening to commit, any act forbidden by the Indian Penal Code or the unlawful detaining, or threatening to detain, any property to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement\". The defendant, having withheld from the plaintiffs their property which they asked to hand over to , has brought himself within Section 15 of the Contract Act, and the release deed he obtained under the circumstances is voidable at the instance of the plaintiffs. We therefore agree with in finding the first issue against the defendant. ", "11. It is unnecessary in this view to consider now the charges made by the plaintiffs against the defendant of having debited the loss sustained in his own private transactions against the plaintiffs in their accounts and of having lent large sums of money to impecunious customers. We may, however, observe in passing that from the correspondence it is not at all clear that the plaintiffs instructed the defendant not to dabble in exchange speculation. On the other hand the letters go to show that some of the firms including the plaintiffs were speculating in exchange transactions and the defendant also did business in dollars on behalf of the plaintiffs. As regards the loan to one Tirupathi it is not suggested that the defendant acted with a corrupt motive; on the other hand it is clear from the evidence that he lost about Rs. 18,000 the amount lent by him to Tirupathi . ", "12. Issue II.--Though the defendant in para. 31 of his written statement uses the word 'estoppel', what is pleaded is not an estoppel in the ordinary sense, but ratification of the arrangement under Ex. IV. No doubt, even a ratification may amount to an estoppel; but it would be more correct to put the question in the following form : whether the plaintiffs ratified the arrangement under Ex. IV; and, if so, whether they could go behind it. After the execution of Ex. IV the account books, cash on hand and the vouchers were handed over to by the defendant and he executed a power-of-attorney in favour so as to enable him to collect the loans outstanding on mortgages. died in August and the plaintiffs sent a third agent named . It was necessary that should get a fresh power-of-attorney from the defendant in order to realise the loans outstanding on mortgages. Ex. O was written by the solicitors of the plaintiffs to on 5th April, 1923, in which they informed him of the death of in August, 1922 and asked him whether he was \"willing to execute a fresh power-of-attorney in favour of the present agent to enable him to deal with the mortgages and any other matters that may arise\". The defendant's solicitors wrote Ex. Q on 13th April that their client had no objection to executing transfers of the mortgages in the names of the proprietors meaning the plaintiffs and that before agreeing to do so he required the plaintiffs to personally execute a release deed in his favour and that he was not satisfied with the release executed by in his favour. The plaintiffs' solicitors answered Ex. Q on 14th April that everything had been done at the defendant's request and there was no reason why he should require a fresh release and that their clients were unwilling to accede to that request. The defendant's solicitors wrote to say that their client regretted that he could not see his way to execute a transfer of the mortgages unless the proprietors personally executed a release in his favour. An originating summons was then taken out by the plaintiffs' solicitors for a vesting order in respect of the mortgages standing in the name of the defendant, and the vesting order Ex. V was made by . ", "13. A difficulty arose as regards the mortgage property within the State of Johore as according to the law of Johore a mere vesting order would not entitle the plaintiffs to sue on the mortgages obtained in the name of their agent, the defendant. The plaintiffs' solicitors wrote to the defendant's solicitors on 15th August, 1923: ", "We find that there are certain difficulties in connection with the making of a vesting order in Johore and that it would therefore be necessary to sue for a declaration and an order to execute the transfer. ", "14. The defendant's solicitors replied: ", "that in view of the position he (the defendant) has taken up with regard to the Singapore property he regrets he is unable to execute transfers of the mortgage properties in Johore, and that he will not oppose any order in the action if they undertake not to ask for any costs. ", "15. The defendant seems to have changed his mind as is clear from the letter of the plaintiffs' solicitors to his solicitors dated 24th September, 1923. He seems to have insisted that the counsel for the plaintiffs should make a statement that the plaintiffs ratified the arrangement under Ex. IV before he could undertake not to contest the claim and to facilitate the passing of a decree in plaintiffs' favour. As a mere vesting order on originating summons would not satisfy the requirements of the law obtaining in Johore the plaintiffs' solicitors filed Suit No. 817 of 1923 in praying for an order directing the defendant to execute in the name of in manner conforming with the law in Johore such memoranda or other documents as may be necessary according to the laws of Johore to transfer each of the said charges to the plaintiffs or their present agent , son of . ", "16. The defendant through his solicitors agreed to accept service of notice and the stipulation was that the draft judgment should be approved by the defendant's solicitors. In accordance with the arrangement the draft judgment was submitted to the defendant's solicitors as appears from the correspondence printed on page 102 of the printed papers. The defendant's solicitors made certain alterations and the plaintiffs' solicitors approved of the alterations. This was on 28th September, 1923. On 10th October, 1923 they sent the transfers in duplicate to the defendant's solicitors for his signature. The plaintiffs' counsel ratified the arrangement under Ex. IV as appears from the order of , dated the 2nd October, 1923. The relevant passage is as follows: ", "and the plaintiffs by their counsel acknowledging that the said release was and is in full force and of full effect and by consent, it is this day adjudged and ordered by consent, that the defendant do execute in the name of . ", "17. The question is whether this statement amounts to a ratification of Ex. IV by the plaintiffs and whether the plaintiffs are bound by the statement of their counsel that the release was and is in full force and of full effect. The defendant knew or had reason to believe that the plaintiffs would challenge the validity of Ex. IV and he evidently consulted his solicitors as to the best course to be adopted and on their advice he insisted upon a second release deed from the plaintiffs failing which upon a clear statement that the plaintiffs ratified the arrangement evidenced by Ex. IV. It is clear from the correspondence that it was finally arranged that the defendant should not contest the suit and that the plaintiffs' counsel should make a statement ratifying the release deed Ex. IV and that the draft judgment should be approved by the defendant's solicitors and thereupon the plaintiffs' counsel made the statement above extracted. ", "18. It is contended by Mr. for the plaintiffs that the counsel had no authority to make the statement that \"the plaintiffs acknowledge that the said release was and is in full force and of full effect\" and that it is for the defendant to show that the counsel was specially authorised to make it. The Subordinate Judge has dealt with this point in an unsatisfactory manner. He observes in para. 60: ", "From the correspondence to which I have referred above Ex. O series, it was seen that first defendant wanted to have Ex. IV established by the execution of a fresh release deed by the principals in person. That was not agreed to and the 1st defendant, I think, has been able to get reference made to the release deed somehow and he holds that the admission contained in the judgment does not affect the plaintiffs as an affirmance of the transaction of release. ", "19. That the plaintiffs' counsel made the statement contained in the order of cannot be seriously disputed. The only question is whether he had authority to bind his clients by the statement he made. Mr. contended on the authority of v. (1911) 17 CWN 156, (1900) ILR 27 C 428 (FB) and v. (1856) 1 CBNS 364 : 140 ER 150, that the counsel had no authority to make the statement and that the statement would not bind the plaintiffs. In v. (1911) 17 CWN 156 it was held that although a pleader has no power to compromise a suit unless he is specially authorised in that behalf he can bind his client by an admission of a question of fact provided that question of fact falls within the scope of the suit in which he has been retained. (1900) ILR 27 C 428 (FB) the counsel retained in one case consented to a compromise which affected other suits in which he was not retained. The compromise was objected to and before the decree was drawn up one of the parties applied for an order to stay the drawing up of the compromise decree and to have the alleged compromise set aside and the suit retried. , J., dismissed the application; and on appeal , , and two other Judges allowed the application. The learned Chief justice observes at page 438: ", "There cannot, I think, be any reasonable doubt at the present day that counsel possesses a. general authority--an apparent authority which must be taken to continue until notice be given to the other side by the client that it has been determined--to settle and compromise the suit in which he is actually retained as counsel, and in the exercise of his discretion to do that which he considers best for the interest of his client in the conduct of the particular case in which he is so retained. Here, however, the compromise extended to collateral matters, to matters quite outside the scope of the particular case in which Mr. way retained as counsel, and, in order to bind the client, it must be shown that Mr. had, from his client, a special authority to compromise, and compromise upon the definite terms which are set up by the present respondents and refers to v. (1866) LR 1 QB 379, v. (1856) 1 CBNS 364 : 140 ER 150 and v. (1877) LR 20 QBD 141 for the authority of a counsel to compromise on behalf of his client. This case is distinguishable on the facts. Here, there was no settlement of collateral matters. It was necessary to prove to the that the mortgages which were standing in the name of the defendant were taken for the benefit of the plaintiffs, that the defendant was a trustee of the plaintiffs and that the agency having terminated he was bound to make over the mortgage deeds to the plaintiffs. It cannot therefore be said that the ratification of the release deed, Ex. IV was a matter collateral to the subject-matter of the suit in which the statement ratifying the deed was made. The defendant insisted upon his being given a full discharge as regards the agency and he was not satisfied with the release executed by the agent of the plaintiffs, and it was necessary for obtaining the order prayed for to make out that the defendant . had ceased to be the plaintiffs' agent; and if for obtaining the relief therein prayed the statement insisted upon by the defendant with reference to the agency during the currency of which the mortgage deeds were obtained is made, it cannot be said that the counsel settled a matter collateral to the suit. In v. (1856) l CBNS 364 : 140 ER 150 the power of a counsel for compromising matters in dispute was considered at length. These are some observations of , which may be taken as lending support to Mr. 's contention. He observes at p. 461: ", "I am not aware that any counsel engaged in making terms ever supposed for a moment that his opponent had power to bind his client without express instruction. ", "20. There are a number of cases which take a liberal view of the authority of a counsel to compromise suits in which he is engaged. In v. (1824) 38 : 48 ER 16 Sir , M. R., observes: ", "In the absence of evidence a Court will conclude that he had authority, for it is not to be presumed that counsel would enter into an agreement without authority. There is in this case evidence on both sides, but after duly considering it I come to the conclusion that counsel had authority which would bind his client. ", "21. In B.N. Sen & Bros. v. (1923) ILR 51 C 385 the plaintiffs instituted a suit for the recovery of the price of goods sold and delivered to the defendants and for damages in respect of goods, of which it was alleged the defendants had refused to take delivery, making a total claim of Rs. 25,508. The defendants admitted that there was due from them to the plaintiffs a sum of Rs. 12,611 in respect of goods sold and delivered but claimed that there was due to them from the plaintiffs a sum of Rs. 58,000 in respect of various transactions between the parties. At the hearing of the suit the defendants' counsel in the absence of the defendants and without their express authority assigned a decree in favour of the plaintiffs for Rs. 22,117, without prejudice to the right of the defendants, if any, to proceed with their claim in their own suit. It was admitted that the attorney for the defendants who was present in never asked the learned Counsel to settle the suit, nor did he put any limitation on the authority or discretion of the learned Counsel in any respect to compromise the suit. , C. J, and , held that the settlement was a matter within the apparent general authority of the counsel and was binding on the defendants. The following observation of the learned Chief Justice may well be applied to the present case: ", "In my judgment there is no evidence in this case that there was any limitation placed upon the authority of the learned Counsel.... I have a strong suspicion that the course which the learned Counsel took on behalf of the defendants was a wise one, having regard to the nature of the suit and the admissions which the defendants made in the suit. At all events I am satisfied that the settlement was made within the authority of the learned Counsel. ", "22. There are numerous cases, English and Indian, on the question of a counsel's power to make admissions in, or to refer to arbitration or compromise, suits in which he is instructed. A mere reference to the following cases would be sufficient as it is neither profitable nor necessary to consider them all in detail, v. (1900) 6 CWN 82 at 87, v Lord (1859) F & F 619 : 29 LJ Ex. 382, v. (1858) 5 CBNS 59, v. (1866) LR 1 QB 379, (1898) 3 CWN 222 and v. (1871) 5 IR 368 goes the length of laying down that the compromise made by a solicitor or counsel is binding on the client though it may have been made against his express directions unless the client has revoked the authority of the counsel or solicitor to compromise on his behalf and communicated the revocation to the other side. This must be done before the decree or order is sealed. ", "23. The following propositions are deducible from the authorities: ", "(1) A counsel has authority to make admissions in Court on behalf of his client on matters of fact relevant to the issues in the case in which he is engaged. Admissions on questions of law would not bind the client. ", "(2) A counsel has authority to confess judgment, withdraw or compromise, or refer to arbitration the suit in which he is instructed if his doing so is for his client's advantage or benefit even though he has no express authority from his client. ", "(3) A counsel cannot without express authority agree to compromise or refer to arbitration matters unconnected with the subject-matter of the suit in which he is instructed (4) Where in the course of a suit a counsel makes an admission as to a collateral matter or gives up a doubtful claim which is not a subject-matter of the suit, there is a presumption that the counsel acts under instructions if the admission or the giving up of the doubtful claim is for the benefit of the client. ", "(5) It is a question of fact in each case whether the counsel acts under instructions when he compromises or refers to arbitration matters not involved in the suit and the Court on a consideration of the probabilities and the circumstances of the case can find that the counsel acted on instructions even though there is no direct evidence on the point. ", "(6)A counsel has no power to make an admission in, or compromise or refer to arbitration, a suit if he is instructed not to do so, without express authority from his client. ", "24. The plaintiffs were anxious to have the mortgage deeds in order to enforce the right under them without delay as the fall in the price of rubber made the securities doubtful and they probably acted upon the principle of the apothegm \"a bird in the hand is worth two in the bush\" and consented to ratify the release deed and thereby secure the mortgage deeds without delay rather than pursue a doubtful remedy against the defendant. All the circumstances of the case and the evidence on record, the non-examination by the plaintiffs of their agent, , who instructed the counsel in the proceedings before , the absence of any statement in the 2nd plaintiff's deposition that he or his brother, the 1st plaintiff, did not empower to make the statement as to ratification contained in the judgment of , the urgency with which the mortgage deeds were required by the plaintiffs and the speedy manner in which the suit was decreed in plaintiffs' favour owing to the defendant's consent to accept service and remain ex parte and the readiness with which the defendant executed the transfer deed within a fortnight of the approval of the draft judgment by his solicitors lead to the irresistible conclusion that the plaintiffs' counsel was specially authorised to make the statement that the plaintiffs acknowledged that the said release was and is in full force and of full effect. Even if the counsel was not specially instructed, to make the statement, we hold that the circumstances of the case and the evidence on record fully justify the conclusion that he acted within his authority in making the above statement. A decree has been passed embodying the statement by and in pursuance of that decree the defendant signed the transfer deeds. But for the statement the plaintiffs would not have got speedily, and in the manner they got, what they wanted. We have therefore no hesitation in holding that the plaintiffs by their counsel ratified the arrangement evidenced by and they cannot now sue to set it aside. ", "25. In the result, the appeal is allowed and the plaintiffs' suit dismissed. But considering the conduct of the defendant we think he ought not to get his costs. We therefore direct that each party do bear his costs throughout. ", "Devadoss, J. ", "26. I agree and have nothing useful to add."], "relevant_candidates": ["0000993470", "0001512454"]} {"id": "0001502681", "text": ["PETITIONER: Vs. RESPONDENT: AND ANOTHER DATE OF JUDGMENT16/02/1984 BENCH: , D.A. BENCH: , D.A. PATHAK, R.S. REDDY, O. CHINNAPPA (J) SEN, A.P. (J) ERADI, V. BALAKRISHNA (J) CITATION: 1984 AIR 718 1984 SCR (2) 914 1984 SCC (2) 500 1984 SCALE (1)239 CITATOR INFO : R 1984 SC 991 (3,4) RF 1986 SC2045 (36) R 1987 SC 877 (14) D 1988 SC1531 (192) R 1992 SC 1 (62) RF 1992 SC 248 (44) RF 1992 SC 604 (121) RF 1992 SC1701 (7,8,55) ACT: Interpretation of Statutes-Construction of Penal Laws- Rules for. Criminal Procedure Code , 1973 (Act II of 1974) Sections 4, 6, 190, 200, 202, 238 to 250-Special Judge, taking cognizance of offence under the Prevention of Corruption Act , 1947 (Act 2 of 1947) on a private complaint in respect of the said offences committed by Public Servants, legality of- Criminal Law Amendment Act (XLVI of 1952) Section 6 to 8 , Scope of- of Special Judge is a of Original Criminal Jurisdiction and shall have all powers except those specifically excluded. Legislation by in corporation, doctrine applied. HEADNOTE: Respondent filed a private complaint against the appellant, alleging that the appellant has, as a public servant committed certain offences under ss. 5, 5A and 7A of the Prevention of Corruption Act (Act II of 1947), and section 161-165 of the Indian Penal Code before the learned Special Judge, Shri . The Special Judge took cognizance of the said offences and adjourned the case to October 12, 1982 on which date, the appellants' counsel moved an application questioning the jurisdiction of the court on two specific counts: (i) that the of special Judge act up under s. 6 of the Criminal Law Amendment Act, 1952 ('1952 Act' for short) cannot take cognizance of any of the offences enumerated in s. 6 (1) (a) & (b) upon a private complaint of facts constituting the offence and (ii) that where there are more special Judges than one for any area, in the absence of a specification by the State Government in this behalf, specifying the local area over which each special Judge would have jurisdiction, the special Judge (Mr. ) had no jurisdiction to take cognizance of the offences and try the case. The learned special Judge rejected both the contentions. The appellant filed Criminal Revision Application No. 510 of 1982 in . On a reference made by the learned Single Judge, this revision application was heard by of . The learned Judges by two separate but concurring judgments held that special Judge is competent and is entitled to take cognizance of offences set out in s. 6 (1) (a) & (b) upon a private complaint of facts constituting the offence and consequently rejected the first contention. In reaching this conclusion the learned Judges held that a prior investigation under s. 5A of the Prevention of Corruption Act, 1947 ('1947 Act' for short) by a police officer of the designated rank is not a condition precedent to 915 the special Judge taking cognizance of the offences under s. 8 (1) of 1952 Act, and taking notice of the Notification dated January 15, 1983 issued by the Maharashtra State under sub-s. (2) of s. 7 of 1952 Act, specifying , Special Judge for Greater Bombay for trying the Special Case No. 24 of 1982 rejected the second contention and therefore, the revision petition as well. Hence this appeal by special leave. Dismissing the appeal, the , ^ HELD: 1. It is a well established cannon of construction that the court should read the section as it is and cannot rewrite it to suit its convenience; nor does any cannon of construction permit the court to read the section in such manner as to render it to some extent otiose. [936D- E] 2:1. A private complaint filed in respect of the offences committed by public servants as enumerated in s. 6 (1) and (b) of the Criminal Law (Amendment) Act , 1952 can be entertained by the special Judge and taken cognizance of. The same is perfectly legal. [936B] . 3 S.C.R. 928; , A.I.R. 1962 Bom 205; , A.I.R. 1966 Patna 15; referred to. 2:2. It is a well recognised principle of criminal jurisprudence that anyone can set or put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary. The Scheme of the Code of Criminal Procedure envisages two parallel and independent agencies for taking criminal offences to court. Even for the most serious offence of murder, it was not disputed that a private complaint can, not only be filed but can be entertained and proceeded with according to law. Locus Standi of the complaint is a concept foreign to criminal jurisprudence save and except that where the statute creating an offence provides for the eligibility of the complaint, by necessary implication the general principle gets excluded by such statutory provision. [923D-F] While s. 190 of the Code of Criminal Procedure permits anyone to approach the Magistrate with complaint, it does not prescribe any qualification the complaint is required to fulfil to be eligible to file a complaint. But where an eligibility criterion for a complaint is contemplated specific provisions have been made such as to be found in ss. 195 & 199 of the Cr. P. C. These specific provisions clearly indicate that in the absence of any such statutory provisions, a locus standi of a complaint is a concept foreign to criminal jurisprudence. In other words the principle that anyone can set or put the criminal law in motion remains intact unless contraindicated by a statutory provision. [923G-H; 924A] This general principle of nearly universal application is founded on a policy that an offence i.e. an act or omission made punishable by any law for the time being in force (See s. 2 (n) Cr. P. C.) is not merely an offence committed in relation to the person who suffers harm but is also an offence 916 against society. The society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the state representing the people which would exclude any element of private vendatta or vengeance. If such is the public policy underlying penal statutes, who brings an act or omission made punishable by law to the notice of the authority competent to deal with it, is immaterial and irrelevant unless the statute indicates to the contrary. Punishment of the offender in the interest of the society being one of the objects behind penal statutes enacted for larger good of the society, right to initiate proceedings cannot be whittled down, circumscribed or fettered by putting it into a straight jacket formula of locus standi unknown to criminal jurisprudence, save and except specific statutory exception. To hold that such an exception exists that a private complaint for offences of corruption committed by public servant is not maintainable, the court would require an unambiguous statutory provision and a tengled web of argument for drawing a far fetched implication, cannot be a substitute for an express statutory provision. [924A-E] It is no answer to this fairly well-established legal position that for the last 32 years no case has come to the notice of the court in which cognizance was taken by a special Judge in a private complaint for offences punishable under the 1947 Act. If something that did not happen in the past is to be the sole reliable guide so as to deny any such thing happening in the future, law would be rendered static and slowly whither away. [925C] The Scheme underlying Code of Criminal Procedure clearly reveals that anyone who wants to give information of an offence may either approach the Magistrate or the officer in charge of a Police Station. If the offence complained of is a non-cognizable one, the Police Officer can either direct the complaint to approach the Magistrate or he may obtain permission of the Magistrate and investigate the offence. Similarly any one can approach the Magistrate with a complaint and even if the offence disclosed is a serious one, the Magistrate is competent to take cognizance of the offence and initiate proceedings. It is open to the Magistrate but not obligatory upon him to direct investigation by police. Thus two agencies have been set up for taking offences to court. One would therefore, require a cogent and explicit provision to hold that s. 5A displaces this scheme. [925D-F] 2:3. Section 8(1) of the 1952 Act which confers power on the special Judge to take cognizance of offences set out in s. 6(1) (a) (b) does not directly or indirectly, expressly or by necessary implication indicate that the only method of taking cognizance is the police report under s. 173(2) of the Code of Criminal Procedure submitted by a police officer of the designated rank or permissible rank as set out in s. 5A of the Prevention of Corruption Act, 1947. [932G-H] 2:4. In the absence of a specific provision made in the statute indicating that offences will have to be investigated, inquired into, tried and otherwise dealt with according to that statute, the same will have to be investigated, inquired into, tried and otherwise dealt with according to the Code of Criminal Procedure. In other words, Code of Criminal Procedure 917 is the parent statute which provides for investigation, inquiring into and trial of cases by criminal courts of various designations. [935A-B] 2:5. If of special Judge is a criminal court, which atleast was not disputed, and jurisdiction is conferred upon the presiding officer of the of special Judge to take cognizance of offences simultaneously excluding one out of the four recognised modes of taking cognizance, namely, upon commitment of by a Magistrate as set out in s. 193 , the only other method by which the of special Judge can take cognizance of an offence for the trial of which it was set up, is any one of the remaining three other methods known to law by which a criminal court would take cognizance of an offence not as an idle formality but with a view to initiating proceedings and ultimately to try the accused. If the language employed in s. 8(1) is read in this light and in the background that a special Judge may take cognizance of offence without the accused being committed to him for trial, it necessarily implies that the of special Judge is armed with power to take cognizance without commitment by the Magistrate. Thus the special Judge can take cognizance of offences enumerated in s. 6(1) (a) and (b) upon a complaint or upon a police report or upon his coming to know in some manner of the offence having been committed. The provisions of the Criminal Procedure Code have to be applied to the of special Judge in such manner and to such extent as to retain the separate identity of the of special Judge and not that he must either fulfil a role of a Magistrate or a Session . Section 8(1) of 1952 Act says that the special Judge shall take cognizance of an offence and shall not take it on commitment of the accused. The provided for both the positive and the negative. It positively conferred power on special Judge to take cognizance of offences and it negatively removed any concept of commitment. It is not possible there fore, to read s. 8(1) that cognizance can only be taken upon a police report and any other view will render the safeguard under s. 5A illusory. [935D-F; 936B; C; E] 2:6. Section 5A is a safeguard against investigation, by police officers lower in rank than designated officer, of offences against public servants. This has no hearing either directly or indirectly with the mode and method of taking cognizance or trial by the special Judge. Therefore, an investigation under s. 5A is not a condition precedent before cognizance can be taken of offences triable by a special Judge, who acquires power under s. 8(1) to take cognizance of offences enumerated in s. 6(1) (a) and (b) of the Prevention of Corruption Act , with this limitation alone that it shall not be upon commitment to him by the Magistrate. [941A-B] 2:7. Once s. 5A is out of the way in the matter of taking cognizance of offences committed by public servants by a special Judge, the power of the special Judge to take cognizance of such offences conferred by s. 8(1) with only one limitation, in any one of the known methods of taking cognizance of offences by courts of original jurisdiction remains undented. One such statutorily recognised well-known method of taking cognizance of offences by a court competent to take cognizance is upon receiving a comp- 918 laint of facts which constitutes the offence. And s. 8(1) says that the special Judges has the power to take cognizance of offences enumerated in s. 6(1) (a) & (b) and the only mode of taking cognizance excluded by the provision is upon commitment. It therefore, follows that the special Judge can take cognizance of offences committed by public servants upon receiving a complaint of facts constituting such offences [941F-H] There is no warrant for an approach that on receipt of the complaint, the special Judge must direct an investigation under s. 5A . [942C] , S.C.R. 1150; ; Supp. 2 S.C.R. 201; ; 3 S.C.R. 71; ; 3 S.C.R. 563; P. Sirajuddin etc. v. State of Madras etc.; 3 S.C.R. 931; Union of India v. Madhya Bhara; A.I.R. 1957 Madhya Bharat, 43 v. , (1875-76) 1 Ch. Divn. 426; Nazir Ahmed v. King Emperor; A. I. R. 1936 P. C. 253(2) ; 3 S.C.R. 839; referred to. 2:8. In order to give full effect to s. 8(1) , the only thing to do is to read special Judge in s. 238 to 250 wherever the expression 'Magistrate' occurs. This is what is called legislation by incorporation. Similarly, where the question of taking cognizance arises, it is futile to go in search of the fact whether for purposes of s. 190 which conferred power on the Magistrate to take cognizance of the offence, special Judge is a Magistrate? What is to be done is that one has to read the expression special in place of Magistrate, and the whole thing becomes crystal clear. [945E-F] 2:9. The wherever it found the grey area clarified it by making specific provision such as the one in sub-s. (1) of s.8 and to leave no one in doubt further provided in sub-s. (3) that all the provisions of the Code of Criminal Procedure shall so far as they are not inconsistent with the Act apply to the proceedings before a special Judge. At the time when the 1952 Act was enacted what was in operation was the code of Criminal Procedure, 1898. It did not envisage any of a special Judge and the never wanted to draw up an exhaustive Code of Procedure for this new criminal court which was being set up. Therefore, it conferred power (taking cognizance of offences), prescribed procedure (trial of warrant cases by a Magistrate), indicated authority to tender pardon (s.338) and then after declaring its status as comparable to a of Sessions proceeded to prescribe that all provisions of the Code of Criminal Procedure will apply in so far as they are not inconsistent with the provisions of the 1952 Act. The net outcome of this position is that a new court of original jurisdiction was set up and whenever a question arose as to what are its powers in respect of specific questions brought before it as court of original criminal Jurisdiction, it had to refer to the Code of Criminal Procedure undaunted by any designation clap-trap. When taking cognizance, a of special Judge enjoyed the powers under s. 190 . When trying cases, it is obligatory to follow the procedure for trial of warrant cases, by a Magistrate though as any by way of status it was equated with a of Sessions. [945F-H; 946A-D] 919 2:10. The deeming fiction enacted in s.8 (3) is confined to the limits of its requirement in that the person conducting a prosecution before a special Judge is to be deemed to be a public prosecutor. On the contrary, conscious of the position that a private complaint may be filed before a special Judge who may take cognizance of the offences on such a complaint, the wanted to clothe the person in charge of the prosecution before a special Judge with the status of a public prosecutor for the purposes of the Code of Criminal Procedure. [949A-C] Shwe Pru v. The King; A. I. R. 1941 Rangoon 209; Amlesh Chandra & Ors. v. The state, A.I.R. 1952 Cal. 481; ; A.I.R. 1969 Cal 321; Re. Bhupalli Malliah and Ors. A.I.R. 1959 A.I.R. A.P.477; ; A.I.R. 1955 A.P. 659; referred to. 2:11. It is not a condition precedent to the issue of process that the court of necessity must hold the inquiry as envisaged by s.202 or direct investigation as therein contemplated. The power to take cognizance without holding inquiry or directing investigation is implicit in s.202 of the Code . Therefore the matter is left to the judicial discretion of the whether on examining the complainant and the witnesses if any as contemplated by s.200 to issue process or to postpone the issue of process. This discretion which the court enjoys cannot be circumscribed or denied by making it mandatory upon the court either to hold the inquiry or direct investigation. Such an approach would be contrary to the statutory provision. Therefore, there is no merit in the contention that by entertaining a private complaint, the purpose of speedy trial would be thwarted or that a pre-process safeguard would be denied. Further when cognizance is taken on a private complaint or to be precise otherwise than on a police report, the special Judge has to try the case according to the procedure prescribed for trial of warrant cases instituted otherwise than on police report by a Magistrate (ss. 252 to 258 of 1898 Code of Criminal Procedure). This procedure provides more adequate safeguard than the investigation by police officer of designated rank and therefore, search for fresh or additional safeguard is irrelevant. [951A-F; H] 2:12. Prior to 1955, the procedure for trial of warrant cases instituted on a police report and otherwise than on police report was the same and the Act of 1952 set up the court of special Judge to try cases under the 1947 Act and the trial was to be held according to the procedure prescribed for trial of a warrant case. It necessarily follows that between 1952 to 1955, the of special Judge would have followed the same procedure for trial of a case instituted upon a police report or otherwise than on a police report. If in 1955, the prescribed two different procedures and left the one for trial of warrant cases instituted otherwise than on police report intact and the position remained unaltered even after the introduction of s.7A, it is not suggestive of such a grave consequence that a private complaint is not maintainable.[953A-C] 3:1. The entire argument inviting the court to specifically decide whether a court of a special Judge for a certain purpose is a court o Magis- 920 trate or court of Sessions revolves round a mistaken belief that a special Judge has to be one or the other, and must fit in the slot of a Magistrate or a of Sessions. Such an approach would strangulate the functioning of the court and must be eschewed. Such of all embellishment, the of a special Judge is a of original criminal jurisdiction. As a court of original criminal jurisdiction in order to make it functionally oriented some powers were conferred by the statute setting up the court. Except those specifically conferred and specifically denied, it has to function as a court of original criminal jurisdiction not being hide bound by the terminological status description of Magistrate or a of Sessions. Under the Code it will enjoy all powers which a court of original criminal jurisdiction enjoys save and except the ones specifically denied. [946C-E] 3:2. The of a special Judge, once created by an independent statute, has been brought as a court of original criminal jurisdiction under because s. 9 confers on all the powers conferred by Chapter XXXI and XXXIII of the Code of Criminal Procedure, 1898 on a High as if the court of Special Judge were a of Sessions trying cases without a jury within the local limit of the jurisdiction of . Therefore is no gainsaying the fact that a new criminal court with a name, designation and qualification of the officer eligible to preside over it with powers specified and the particular procedure which it must follow has been set up under the 1952 Act. The has to be treated as a court of original criminal jurisdiction and shall have all the powers as any court of original criminal jurisdiction has under the Code of Criminal Procedure except those specifically excluded. [946G-H; 947A-B] JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION : CRIMINAL APPEAL NO. 247 OF 1983 From the judgment and order dated 7.3. 83 of in Criminal Revision Application No. 510 of 1982. ", ", , , , , , , , , , and , for the appellant. ", ", , Ms. , , , , for the respondents. ", "The Judgment of the court was delivered by , J. This appeal by special leave is directed against the decision of of in Criminal Revision Application No. 510 of 1982, which was preferred by the appellant against the rejection of his application by the learned special Judge as per his order dated October 20, 1982. ", "921 ", "The various stages through which Special Case No. 24 of 1982 progressed upto and inclusive of October 18, 1982 have been set out in our Judgment rendered today in cognate Criminal Appeal No. 356 of 1983 and they need not be recapitulated here. After the learned special Judge took cognizance of the offences upon a complaint of , the first respondent (Original complainant), the case was adjourned to October 18, 1982 for recording the evidence of the complainant. On that day, learned counsel appearing for the appellant in the trial court moved an application questioning the jurisdiction of the court on two specific counts; (i) that set up under Sec. 6 of the Criminal Law Amendment Act , 1952 ('1952 Act' for short) cannot take cognizance of any of the offences enumerated in Sec. 6 (1) ", "(a) and (b) upon a private complaint of facts constituting the offence and (ii) that where there are more special Judges than one for any area, in the absence of a specification by in this behalf, specifying the local area over which each special Judge would have jurisdiction, the special Judge (Mr. ) had no jurisdiction to take cognizance of the offences and try the case. The learned special Judge rejected both the contentions. The appellant filed Criminal Revision Application No. 510 of 1982 in . On a reference made by the learned Single Judge, this revision application was heard by of . The learned Judges by two separate but concurring judgments held that special Judge is competent and is entitled to take cognizance of offences set out in Sec. 6 (1) (a) and (b) upon a private complaint of facts constituting the offence and consequently rejected the first contention. In reaching this conclusion the learned Judges held that a prior investigation under Sec. 5 A of the Prevention of Corruption Act , 1947 ('1947 Act' for short) by a police officer of the designated rank is not a condition precedent to the special Judge taking cognizance of the offences under Sec. 8 (1) of 1952 Act. The learned Judges also held that by the time the matter was heard by them, the Government of Maharashtra had issued a notification dated January 15, 1983, under sub-s. (2) of Sec. 7 of 1952 Act specifying , special Judge for Greater Bombay for trying Special Case No. 24 of 1982, After taking note of this notification and the statement of , learned counsel for the respondent, the second contention of the learned counsel for the appellant was also rejected. The learned Judges accordingly rejected the revision petition. Hence this appeal by special leave. ", "922 ", "On behalf of the appellant, the pivotal point canvassed was that a private complaint cannot be entertained by the special Judge in respect of all or any of the offences enumerated in Sec. 6 (1) (a) and (b) of the 1952 Act. In support of this submission, it was very vehemently urged that the provision contained in Sec. 5 A of the 1952 Act has been repeatedly held to be mandatory in character and if its non-compliance is brought to the notice of the superior court at a stage anterior to the conclusion of the trial the proceeding would be vitiated. It was urged that Sec. 5A incorporates a safe guard against frivolous, speculative and tendentious prosecutions and therefore, it must not only held to be mandatory but it must be so interpreted as to make an investigation under Sec. 5A a condition precedent to the taking of the cognizance of an offence or offences committed by a public servant by the special Judge. A number of subsidiary points were submitted in support of this principal contention which need not be enumerated, but would be dealt with in the course of the judgment. ", "On behalf of the respondent-complainant it was urged that it is one of the fundamental postulates of the administration of criminal justice that anyone can set the criminal law into motion unless the statute enacting the offence makes a special provision to the contrary both with regard to the locus standi of the complainant, the manner and method of investigation and the person competent to investigate the offence, and the court competent to take cognizance. It was submitted that in Sec. 8 (1) which specifically confers power on the special Judge to take cognizance of an offence without commitment of the case to it there is nothing which would preclude a complainant from filing a private complaint or which would deny jurisdiction of the special Judge to take cognizance of the offences on such a private complaint. It was submitted that even if Sec. 5A is treated as mandatory and incorporates a safeguard, it is a safeguard against investigation of offences committed by a public servant by police officers of lower rank and nothing more. It was lastly urged that on a comprehensive view of the provisions of 1952 Act, it does not transpire that any of its provisions and more specifically Sec. 5A denies the power to the special Judge to take cognizance of offences enumerated in Sec. 6 (1) (a) and (b) upon a private complaint. It was also contended that before taking such a drastic view of blocking the access to justice by holding that a private complaint cannot be entertained by the special Judge, the court must insist on specific and positive provision of such incontrovertible character as to supplant the scheme of Code of Criminal Procedure which permits two parallel and independent agencies to take criminal offences to court. An incidental submission was that the clearly expresses itself when it requires a certain qualification for filing the complaint, and to specify a certain court competent to take cognizance and the method and manner of taking cognizance of those specified offences. To substantiate this submission our attention was drawn to a number of statutes which we will presently mention. ", "The contention put in the forefront was that Sec. 5A upon its true interpretation and keeping in view that it enacts a mandatory safeguard in favour of public servants, investigation therein contemplated is a condition precedent to taking cognizance of offences enumerated in Sec. 6 (1) ", "(a) and (b) and as a corollary a private complaint would not lie and cannot be entertained by a special Judge under Sec. 8 (1) of 1952 Act. The contention may be examined on principle and precedent. ", "It is a well recognised principle of criminal jurisprudence that anyone can set or put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary. The scheme of the Code of Criminal Procedure envisages two parallel and independent agencies for taking criminal offences to court. Even for the most serious offence of murder, it was not disputed that a private complaint can, not only be filed but can be entertained and proceeded with according to law. Locus standi of the complainant is a concept foreign to criminal jurisprudence save and except that where the statue creating an offence provides for the eligibility of the complainant, by necessary implication the general principle gets excluded by such statutory provision Numerous statutory provisions, can be referred to in support of this legal position such as ", "(i) Sec. 187 A of Sea Customs Act , 1878 (ii) Sec. 97 of Gold Control Act, 1968 (iii) Sec. 6 of Import and Export Control Act, 1947 (iv) Sec. 271 and Sec. 279 of the Income Tax Act , 1961 (v) Sec. 61 of the Foreign Exchange Regulation Act , 1973,(vi) Sec. 621 of the Companies Act , 1956 and (vii) Sec. 77 of the Electricity Supply Act . This list is only illustrative and not exhaustive. While Sec. 190 of the Code of Criminal Procedure permits anyone to approach the Magistrate with a complaint, it does not prescribe any qualification the complainant is required to fulfil to be eligible to file a complaint. But where an eligibility criterion for a complainant is contemplated specific provisions have been made such as to be found in Secs. 195 to 199 of the Cr. P. C. These specific provisions clearly indicate that in the absence of any such statutory provision, a locus standi of a complainant is a concept foreign to criminal jurisprudence. In other words, the principle that anyone can set or put the criminal law in motion remains intact unless contra-indicated by a statutory provision. This general principle of nearly universal application is founded on a policy that an offence i. e. an act or omission made punishable by any law for the time being in force (See Sec. 2 (n), Cr. P. C.) is not merely an offence committed in relation to the person who suffers harm but is also an offence against society. The society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the representing the people which would exclude any element of private vendatta or vengeance. If such is the public policy underlying penal statutes who brings an act or omission made punishable by law to the notice of the authority competent to deal with it, is immaterial and irrelevant unless the statute indicates to the contrary. Punishment of the offender in the interest of the society being one of the objects behind penal statutes enacted for larger good of the society, right to initiate proceedings cannot be whittled down, circumscribed or fettered by putting it into a straight jacket formula of locus standi unknown to criminal jurisprudence, save and except specific statutory exception. To hold that such an exception exists that a private complaint for offences of corruption committed by public servant is not maintainable, the court would require an unambiguous statutory provision and a tangled web of argument for drawing a far fetched implication, cannot be a substitute for an express statutory provision. In the matter of initiation of proceeding before a special Judge under Sec. 8 (1), the while conferring power to take cognizance had three opportunities to unambiguously state its mind whether the cognizance can be taken on a private complaint or not. The first one was an opportunity to provide in Sec. 8 (1) itself by merely stating that the special Judge may take cognizance of an offence on a police report submitted to it by an investigating officer conducting investigation as contemplated by Sec. 5A. While providing for investigation by designated police officers of superior rank, the did not fetter the power of special Judge to take cognizance in a manner otherwise than on police report. The second opportunity was when by Sec. 8 (3) a status of a deemed public prosecutor was conferred on a private complainant if he chooses to conduct the prosecution. The being aware of a provision like the one contained in Sec. 225 of the Cr. P. C., could have as well provided that in every trial before a special Judge the prosecution shall be conducted by a Public Prosecutor, though that itself would not have been decisive of the matter. And the third opportunity was when the while prescribing the procedure prescribed for warrant cases to be followed by special Judge did not exclude by a specific provision that the only procedure which the special Judge can follow is the one prescribed for trial of warrant cases on a police report. The disinclination of the to so provide points to the contrary and no canon of construction permits the court to go in search of a hidden or implied limitation on the power of the special Judge to take cognizance unfettered by such requirement of its being done on a police report alone. In our opinion, it is no answer to this fairly well-established legal position that for the last 32 years no case has come to the notice of the court in which cognizance was taken by a special Judge in a private complaint for offences punishable under the 1947 Act. If something that did not happen in the past is to be the sole reliable guide so as to deny any such thing happening in the future, law would be rendered static and slowly whither away. ", "The scheme underlying Code of Criminal Procedure clearly reveals that anyone who wants to give information of an offence may either approach the Magistrate or the officer in charge of a Police Station. If the offence complained of is a non-cognizable one, the Police Officer can either direct the complainant to approach the Magistrate or he may obtain permission of the Magistrate and investigate the offence. Similarly anyone can approach the Magistrate with a complaint and even if the offence disclosed is a serious one, the Magistrate is competent to take cognizance of the offence and initiate proceedings. It is open to the Magistrate but not obligatory upon him to direct investigation by police. Thus two agencies have been set up for taking offences to court. One would therefore, require a cogent and explicit provision to hold that Sec. 5A displaces this scheme. ", " The Prevention of Corruption Act , 1947 ('1947 Act' for short) was put on the statute book in the year 1947. Sec. 5A did not form part of the statute in 1947. Sec. 5A was first introduced in the Act in the year 1952. Prior thereto, Sec. 3 of the 1947 Act which made the offences under Secs. 161 and 165 IPC cognizable had a proviso engrafted to it which precluded investigation of the offences under the Prevention of Corruption Act by a police officer below the rank of Deputy Superintendent of Police except without the order of a Magistrate of the first class. There was an identical provision in sub-s. (4) of Sec. 5 for investigation of the offence of criminal misconduct. Sec. 5A makes a provision for investigation by police officers of higher rank. Sec. 5A starts with a non-obstante clause that: 'Notwithstanding anything contained in the Code of Criminal Procedure, 1898, no police officer below the rank... ' Assuming that Sec 5A did not make it obligatory to conduct investigation by police officer of a certain rank, what would have been the position in law. ", "Chapter XII of the Code of Criminal Procedure, 1973 bears the heading 'Information to the police and their powers to investigate.' Sec. 154 provides for information to police in cognizable cases. It casts a duty on the officer in charge of a police station to reduce to writing every information relating to commission of a cognizable offence given to him and the same will be read over to the informant and the same shall be signed by the informant and a copy thereof shall be given to him. If information given to an officer in charge of a Police Station disclosed a non- cognizable offence, he has to enter the substance of the information in a book to be kept by such officer in such form as may prescribe in this behalf and to refer the informant to the Magistrate (Sec. 155 (1) Sub-s. (2) puts an embargo on the power of the police officer in charge of the police station to investigate a non-cognizable offence without the order of a Magistrate having power to try the case or commit the case for trial. Sec. 156 sets out the powers of the officer in charge of police station to investigate cognizable cases. Sub-s. (2) of Sec. 156 may be noticed. It says that 'no proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under the section to investigated Sub-s. (3) confers power on the Magistrate empowered under Sec. 190 to take cognizance of an offence, to order an investigation as set out in sub-ss.(1) and (2) of Sec. 156. Sec 167 enables the Magistrate to remand the accused to Police custody in the circumstances therein mentioned. Sec. 173 provides that 'every investigation under Chapter XII shall be completed without unnecessary delay and as soon as it is completed, the officer in charge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by , setting out various things enumerated in the section. Sub-s. (8) of Sec. 173 provides that despite submission of the report on completion of the investigation, further investigation can be conducted in respect of the same offence and further evidence so collected has to be forwarded to the same Magistrate. The report of this further investigation shall by and large conform with the requirements of sub-ss. (2) to (6). Fasciculus of sections in Chapter XIV prescribed conditions requisite for initiation of proceedings. Sec. 190 provides that subject to the provisions of the Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub-sec. (2), may take cognizance of any offence-(a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts; and (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. Sec. 191 obliges the Magistrate when he takes cognizance of an offence under clause (c) of sub-sec. (1) of Sec. 190, to inform the accused when he appears before him, that he is entitled to have the case inquired into or tried by another Magistrate, Sec. 193 provides that 'except as otherwise expressly provided in the Code or by any other law for the time being in force, no court of Session shall take cognizance of any offence as a court of original jurisdiction unless the case has been committed to it by a Magistrate under the Code ' Cognizable offence has been defined in Sec. 2 (c) of the Cr. P. C. to mean 'an offence for which, and \"cognizable case\" means a case in which, a police officer may, in accordance with the First Schedule or under any law for the time being in force, arrest without warrant.' Complaint is defined in Sec. 2 (d) to mean 'any allegation made orally or in writing to a Magistrate, with a view to his taking action under the Code , that some person, whether known or unknown, has committed an offence, but does not include a police report.' There is an explanation appended to the section which has some relevance. 'A report made by a police officer in a case which disclosed, after investigation, the commission of a non-cognizable offence shall be deemed to be a complaint; and the police officer by whom such report is made shall be deemed to be the complainant.' Sec. 2 (e) defines 'non-cognizable offence' to mean 'an offence for which' and \"non-cognizable\" case means a case in which, a police officer, has no authority to arrest without warrant.' Police report is defined in Sec. 2 (r) to mean 'a report forwarded by a police officer to a Magistrate under sub-sec. (2) of Sec. 173.' 'Officer in charge of a police station' has been defined in Sec. 2 (o) to include any police officer present at the station house who is next in rank to such officer and is above the rank of constable or, when so directs, any other police officer so present.' In other words, a Head-constable of Police that is one step higher from a constable can be in charge of a police station. ", "It may now be mentioned that offences under Secs. 161, 162, 163, 164, 165, 165A IPC and Sec. 5 (2) of the 1947 Act are cognizable offences. If they are cognizable offences, anyone can go to a police station under Sec. 154 IPC , give information of the offence and an officer of the level of a Head-constable of Police can start investigation to the chagrin and annoyance of a public servant who may be a highly placed officer. It must also be recalled that prior to 1947, offence under Sec. 161 IPC was a non-cognizable offence meaning thereby that a Magistrate under Sec. 190 of the Code of Criminal Procedure would take cognizance upon a private complaint and initiate a proceeding. By Sec. 3 of the 1947 Act, offences under Sec. 161 and 165 were made cognizable. being aware that once these two offences are made cognizable, a police officer of the rank of Head-constable would be entitled to initiate investigation against the public servant who may as well be highly placed officer in police, revenue, taxation or other departments. In order to guard against this invidious situation, while making offences under Secs. 161 and 165 cognizable by Sec. 3, as it stood in 1947, care was taken to introduce a proviso to Sec. 3 which reads as under: ", "\"Provided that a police officer below the rank of Deputy Superintendent of Police shall not investigate any such offences without the order of a Magistrate of the First Class or make any arrest therefor without a warrant.\" ", "While investigating a cognizable offence, the investigating officer who is an officer in charge of a police station has a right to arrest the accused without a warrant. On these offences being made cognizable, in order to protect public servant from being arrested by a petty police officer as well to avoid investigation of an offence of corruption being conducted by police officers below the specified rank the proviso was enacted thereby depriving low level police officers from exercising this drastic power. However, was aware that an officer of a rank of Deputy Superintendent of Police may not always be available and to guard against offences going, undetected, a further power was conferred that although ordinarily the offence by public servant under the aforementioned sections shall not be investigated by an officer below the rank of Deputy Superintendent of Police, the Magistrate of the first class can grant permission to an officer of the lower rank to investigate the offence in teeth of the statute. Therefore, two safeguards were sought to be incorporated in the predecessor provision of the present Sec. 5A, being the proviso to Sec. 3, namely, these offences having become cognizable shall not be investigated by an officer of a rank below that of a Deputy Superintendent of Police but it if becomes so necessary, it shall not be done without the order of a Magistrate of the first class. Left to police, investigation by the designated officer of superior rank guaranteed a protection against frivolous investigation. In larger public interest non-availability of such higher officers was catered to by conferring power on the Magistrate of the first class to grant permission to an officer of the rank lower than the designated officer to investigate such offences. Two conclusions emerge from this situation, that investigation by a police officer of the higher rank on his own may tend to curb frivolous or speculative prosecution but even if an officer of a rank lower than the designated officer is to undertake the investigation for the reasons which he must convince the Magistrate of the first class, the considered courts' intervention as adequate safeguard against investigation by police officer of a lower rank. It may be mentioned that Sec. 5A was first introduced by the Prevention of Corruption (Second Amendment) Act, 1952 but was substituted by the present Sec 5A by Act 40 of 1964 which was enacted to give effect to the recommendations of . Sec. 5A specifies the officers of superior rank in police force on whom the power to investigate offences under Secs. 161, 165, 165A IPC and Sec. 5 of the 1947 Act is conferred. Simultaneously power was conferred on the Presidency Magistrate or a Magistrate of the first class, as the case may be, to permit an officer inferior in rank to the designated officer to undertake investigation and to make an arrest without a warrant. The Legislative intention is further manifested by the proviso to Sec. 5A which enables to authorise police officer not below the rank of an Inspector of Police by general or special order to investigate the aforementioned offences without the order of the Presidency Magistrate or a Magistrate of the first class, and may make an arrest without a warrant. Again while specifying officers of higher rank in clauses (a) to (d) of Sec. 5A (1) who would, by virtue of office, be entitled to investigate the aforementioned offences as cognizable offences and could also make arrest without warrant power was conferred on the Presidency Magistrate or the Magistrate of the first class to remove this umbrella of protection by giving an authority to investigate such offences to a police officer of rank lower than the officers of designated rank, and the proviso makes a further dent in the safeguard in that by general or special order can bring down the designated rank to the level of Inspector of Police to investigate these offences. ", "The whole gamut of argument is that Sec. 5A of 1947 Act incorporates such a safeguard in favour of the accused that upon its true interpretation it is not open to the special Judge to take cognizance of an offence except upon a police report that may be submitted by officers of the designated rank or officers authorised by the Presidency Magistrate or the Magistrate of the first class or the Inspector of Police authorised by the State Government by a general or special order, and therefore a fortiori, it must exclude cognizance being taken by the special Judge upon a private complaint because that would completely render illusory the safeguard prescribed in Sec. 5A. It was said that where a person is threatened with the deprivation of his liberty and the procedure prescribed incorporates statutory safeguards, the court should be very slow to dilute or do away with the safeguards or render the same ineffective. It was said that if the courts were to hold that a private complaint can be entertained by the special Judge and the latter is under no obligation to direct investigation of the same by an officer of the designated rank, the safeguard incorporated in Sec. 5A becomes illusory and that is impermissible. ", "Before we proceed further, it is now necessary to take notice of salient provisions of the Criminal Law Amendment Act , 1952. The Act was enacted as its long title shows to amend the Indian Penal Code and the Code of Criminal Procedure, 1898 and to provide for a more speedy trial of certain offences. Sec. 1A is the dictionary clause. Sec. 2, 3, 4 and 5 have been repealed by various amendments. Then comes Sec. 6. It reads as under: ", "\"6. (1) The State Government may, by notification in the official Gazette, appoint as many special Judges as may be necessary for such area as areas as may be specified in the notification to try the following offences, namely:- ", "(a) an offence punishable under Sec. 161, Sec. 162, Sec. 163, Sec. 164, Sec. 165 or Sec. 165-A of the Indian Penal Code or Sec. 5 of the Prevention of Corruption Act , 1947. ", "931 ", "(b) any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in Cl. (a). ", "(2) A person shall not be qualified for appointment as special Judge under this Act unless he is, or has been, a Sessions Judge or an Additional Sessions Judge or an Assistant Sessions Judge under the Code of Criminal Procedure, 1898.\" ", "Sec.7 confers exclusive jurisdiction on the special Judge appointed under Sec. 6 to try the cases set out in Sec. 6 (1) (a) and 6 (1) (b). Sub-sec. (2) of Sec. 7 provides that \"Every offence specified in sub-section (1) of Sec.6 shall be tried by the special Judge for the area within which it was committed, or where there are more special Judges than one for such area, by such one of them as may be specified in this behalf by .\" Subsec. (3) enlarges the jurisdiction of the special Judge not only to try offences set out in Sec. 6 (1) (a) and (b) but also to try offences other than those mentioned therein with which the accused may, under the Code of Criminal Procedure, be charged at the same trial. Three things emerge from Sec. 7. The special Judge has exclusive jurisdiction to try offences enumerated in Sec. 6 (1) (a) and (b). Where there are more than one special Judge for the same area, is under an obligation to specify the local jurisdiction of each special Judge, it may be case-wise, it may be area-wise. Sub-sec. (3) enlarges the jurisdiction to try other offences which have been committed in the course of the same transaction and for which the accused could be charged at the same trial. Then comes Sec. 8. It reads as under: ", "\"8 (1): A special Judge may take cognizance of offences without the accused being committed to him for trial, and in trying the accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898, for the trial of warrant cases by Magistrates. ", "(2) A special Judge may, with a view to obtaining the evidence of any person supposed to have been directly or indirectly concerned in, or privy to, an offence, tender a pardon to such person on condition of his making a full and true disclosure of the whole circumstances within his knowledge relating to the offence and to every other person concerned, whether as principal or abettor, in the commis- ", "932 ", "sion thereof; and any pardon so tendered shall, for the purposes of Secs. 339 and 339A of the Code of Criminal Procedure, 1898, be deemed to have been tendered under Sec. 338 of that Code. ", "(2) Save as provided in sub-section (1) or sub- section (2), the provisions of the Code of Criminal Procedure, 1898, shall, so far as they are not consistent with this Act, apply to the proceedings before a special Judge; and for the purposes of the said provisions, shall be deemed to be trying cases with out a jury or without the aid of assessors and the person conducting a prosecution before a special Judge shall be deemed to be a public prosecutor. (3A) In particular, and without prejudice to the generality of the provisions contained in sub-section (3), the provisions of the Code of Criminal Procedure, 1898 shall, so far as may be, apply to the proceedings before a special Judge, and for the purposes of the said provisions, a special Judge shall be deemed to be a Magistrate. ", "(4) A special Judge may pass upon any person convicted by him any sentence authorised by law for the punishment of the offence of which such person is convicted.\" ", "It may be mentioned that Sec. 8 does not apply to the State of West Bengal. This has some relevance to the understanding of some of the decisions bearing on the subject arising from the State of West Bengal. Sec. 9 provides for the subordination of the special Judge to in the matter of appeal, revision and other incidental powers which exercises over subordinate courts. Sec. 10 provided for transfer of certain cases, which were pending at the commencement of the 1952 Act. ", "Before we undertake a detailed examination of the submission that Sec. 5A incorporates a condition precedent to the taking of the cognizance of an offence by a special Judge, it is necessary to state with clarity and precision that Sec. 8 (1) which confers power on the special Judge to take cognizance of offences set out in Sec. 6 (1) (a) and ", "(b) does not directly or indirectly, expressly or by necessary implication indicate that the only method of taking cognizance is the police report under Sec. 173 (2) of the Code of Crimi- ", "933 ", "nal Procedure submitted by a police officer of the designated rank or permissible rank as set out in Secs. 5A. It merely says 'A special Judge may take cognizance of offences without the accused being committed to him for trial, and in trying the accused person, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898 for the trial of warrant cases by Magistrates.' The Code of Criminal Procedure has prescribed four known methods of taking cognizance of offences by the courts competent to try the same. The court has to take cognizance of the offence before initiation of the proceeding can be contemplated The court called upon to take cognizance of the offence must apply its mind to the facts placed before it either upon a police report or upon a complaint or in some other manner the court came to know about it and in the case of upon commitment of the case by the Magistrate. ", "Sec. 6 of the Code of Criminal Procedure provides for setting up of criminal courts under in every State. They are (i) Courts of Session: (ii) Judicial Magistrates of the first class and, in any metropolitan area, Metropolitan Magistrate, (iii) Judicial Magistrates of the second class, and (iv) Executive Magistrates. These are to be the criminal courts in every State. The Code made detailed provision for powers of police officers entitled to investigate offences, procedure of investigation, powers of various courts to take cognizance of offences which that particular court is entitled to try under the Code . Sec. 190 Cr. P. C. confers power on the Magistrate to take cognizance of an offence in one of the manners therein prescribed. The expression `Magistrate' in Sec. 190 is a compendious term which includes Judicial Magistrate of the first class, Metropolitan Magistrate, Judicial Magistrate of the second class and Executive Magistrate, All the three are comprehended in Sec. 190. But then there is another court of original jurisdiction, namely, also being set up under Sec. 6. Can take cognizance directly upon a complaint filed before it ? The answer is obviously in the negative. Sec. 193 provides that except as otherwise expressly provided by the Code or by any other law for the time being in force, no shall take cognizance of any offence as a Court of original jurisdiction unless the case has been committed to it by a Magistrate. In other words, can take cognizance of an offence only upon an order of commitment made by the Magistrate and in no other manner. This necessitated conferring power on the Magistrate to commit cases to the . Code of Criminal Procedure makes ample provisions specifying offences which are triable by Magistrate of the first class and Metropolitan Magistrate, those triable by a Judicial Magistrate of the second class and those exclusively triable by the . Column 6 in the First Schedule annexed to the Code of Criminal Procedure specifies which court can try a particular offence under the Indian Penal Code . Accordingly, provision was made in Sec. 209 for commitment by the Magistrate of a case brought to him either upon a private complaint or upon a police report provided that the offence is exclusively triable by the . If the Magistrate took cognizance of an offence upon a complaint, which appears to be exclusively triable by he has to proceed according to Sections 202 (2), 208 and ", "209. Chapter XVIII incorporates provisions prescribing procedure for the trial before . Sec. 226 says that the case comes to the Court in pursuance of a commitment of the case under Sec. 209. Sec. 209 caters to a situation where the case was instituted before the Magistrate on a police report or otherwise. In both the cases, if it appears to him that the offence which is alleged against the accused is exclusively triable by there is no option but to commit the case to . thus takes cognizance of the offence upon commitment by the Magistrate. And any other mode of taking cognizance is specifically barred under Sec. 193. ", "Sec. 4 of the Code of Criminal Procedure provides as under: ", "\"4 (1)-All offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. ", "(2) All offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.\" ", "Sec. 4 (1) provides for investigation, inquiry or trial for every offence under the Indian Penal Code according to the provisions of the Code . Sec. 4 (2) provides for offences under other law which may be investigated, inquired into, tried and otherwise dealt with according to the provisions of the Code of Criminal Procedure but subject to any enactment for the time being in force regulating the manner or place of investigation, inquiring into, trying or otherwise dealing with such offences. In the absence of a specific provision made in the statute indicating that offences will have to be investigated, inquired into, tried and otherwise dealt with according to that statute, the same will have to be investigated, inquired into, tried and otherwise dealt with according to the Code of Criminal Procedure. In other words, Code of Criminal Procedure is the parent statute which provides for investigation, inquiring into and trial of cases by criminal courts of various designations. ", "Now the Code of Criminal Procedure prescribed only four methods of taking cognizance of an offence whether it be a Magistrate or is for the time being immaterial. The Code prescribes four methods for taking cognizance upon a complaint, or upon a report of the police officer or where the Magistrate himself comes to know of the commission of offence through some other source and in the case of upon a commitment by the Magistrate. There is no other known or recognised mode of taking cognizance of an offence by a criminal court. Now if is a criminal court, which atleast was not disputed, and jurisdiction is conferred upon the presiding officer of the to take cognizance of offences simultaneously excluding one of the four recognised modes of taking cognizance, namely, upon commitment by a Magistrate as set out in Sec 193, the only other method by which the can take cognizance of an offence for the trial of which it was set up, is any one of the remaining three other methods known to law by which a criminal court would take cognizance of an offence, not as an idle formality but with a view to initiating proceedings and ultimately to try the accused. If the language employed in Sec. 8 (1) is read in this light and in this background that a special Judge may take cognizance of offence without the accused being committed to him for trial, it necessarily implies that the is armed with power to take cognizance of offences but that it is denied the power to take cognizance on commitment by the Magistrate. This excludes the mode of taking cognizance under Sec. 193. Then remains only Sec. 190 which provides various methods of taking cognizance of offences by courts. It is idle to say that Sec. 190 is confined to Magistrate and special Judge is not a Magistrate. We shall deal with the position of a special Judge a little later. The fact however remains that as the expression is used in sub-sec. (3) of Sec. 8 is a criminal court and in view of Sec. 9 it is under the appellate and administrative control of . It must take cognizance of offences with a view to trying the same but it shall not take it on commitment of the accused to the court. As a necessary corollary, it must appear that the special Judge can take cognizance of offences enumerated in Sec. 6 (1)(a) and (b) upon a complaint or upon a police report or upon his coming to know in some manner of the offence having been committed. With regard to the last of the modes of taking cognizance, it was urged that there is inherent evidence to show that Sec.190 (1)(c) cannot be availed off by special Judge because Sec. 191 is not available to him so as to transfer the case. A little while later, we shall point out that the provisions of the in such manner and to such extent as to retain the separate identity of the and not that he must either fulfil a role of a Magistrate or a Session Court. ", "It is a well-established canon of construction that the court should read the section as it is and cannot rewrite it to suit its convenience; nor does any canon of construction permit the court to read the section in such manner as to render it to some extent otiose. Sec. 8 (1) says that the special Judge shall take cognizance of an offence and shall not take it on commitment of the accused. The provided for both the positive and the negative. It positively conferred power on special Judge to take cognizance of offences and it negatively removed any concept of commitment. It is not possible therefore, to read Sec. 8 (1) as eanvassed on behalf of the appellant that cognizance can only be taken upon a police report and any other view will render the safeguard under Sec. 5A illusory. ", "It appears well-established that an investigation contemplated by Sec. 5A must ordinarily be undertaken by the police officers of the designated rank and except with the permission of the Magistrate bars investigation by police officers of lower rank. It may be that in a given case permission granted by the Magistrate for investigation by a police officer of a rank lower than the designated rank may be judicially reviewable. If in cases where any illegality or irregularity in the process of investigation under Sec. 5A has been brought to the notice of the court at an early stage, a direction has been given for a fresh investigation by a police officer of the designated rank. But this is subject to a well recognised legal position that the court would not attach any importance to any illegality in the matter of investigation if it is relied upon at the conclusion of a trial in the absence of prejudice pleaded and proved. The question is whether these aspects are sufficient to provide an exception to the well recognised general principle apart from the specific power conferred under Sec. 8(1) of the 1952 Act on the special Judge to take cognizance of the offences, the only exception being not upon a commitment to him that anyone can set the criminal law into motion ? ", "Let us therefore, turn to some of the decisions to which our attention was drawn to substantiate the submission that Sec. 5A incorporates a safeguard in favour of the accused. In fact, it is really not necessary to analyse these decisions in detail to arrive at the ratio of each of them because it is not controverted that Sec.5A does incorporate a safeguard but the parameters of the safeguard are against investigation by police officers of fairly lower rank once the offences enumerated in Sec. 6 (1) (a) and (b) were made cognizable. The limit of the safeguard is that ordinarily investigation of such offences shall be undertaken only by officers of the designated rank save and except with the permission of the Magistrate or as per the first proviso to Sec. 5A The submission is that upon its true evaluation, the safeguard clearly points in the direction of a prior investigation before cognizance of the offences can be taken by the special Judge and any other view would dilute the safeguard or render it illusory. It was also submitted that if defective investigation can vitiate the proceedings a fortiori the total absence of and investigation whatsoever as contemplated by Sec. 5A, which would be the position if a private complaint can be directly entertained by the special Judge, would of necessity vitiate the proceeding. ", "The sheet anchor of the supmission was the decision of this in .(') In that case the question posed was whether the provision Sec. 5A of the 1947 Act requiring that the investigation into the offences specified therein shall not be conducted by any police officer of a rank lower than a Deputy Superintendent of Police without the specific order of a Magistrate, is directory or mandatory ? The rendered the opinion that Sec. 5A is mandatory and not directory, and that an investigation conducted in violation thereof bears the stamp of illegality. Thus so far as investigation of a case is concerned, this has recorded a definite opinion that investigation by a police officer in contravention of the provision contained in Sec. 5A bears the stamp of illegality. What is the effect of this illegality on the outcome of a concluded trial does not arise for our consideration but there are certain observations which were relied upon to urge that a prior investigation under Sec. 5A being held to be mandatory and as a special Judge can take cognizance of an offence upon a police report submitted at the end of a valid and legal investigation in consonance with Sec. 5A, by necessary implication, taking cognizance of an offence by a special Judge under Sec. 8(1) of 1952 Act upon a private complaint is excluded. We must frankly say that we find nothing in this judgment even remotely to bear out the submission. Sec. 5A is a safeguard against investigation by police officers lower in rank than designated officers. In this connection at page 1159, the has observed as under: ", "\"The underlying policy in making these offences by public servants non-cognizable appears to be that public servants who have to discharge their functions- often enough in difficult circumstances-should not be exposed to the harassment of investigation against them on information levelled, possibly, by persons affected by their official acts, unless a Magistrate is satisfied that an investigation is called for, and on such satisfaction authorises the same. This is meant to ensure the diligent discharge of their official functions by public servants, without fear or favour. When, therefore, the thought fit to remove the protection from the public servants, in so far as it relates to the investigation of the offences of corruption comprised in the Act, by making then cognizable it was considered necessary to provide a substituted safeguard from undue harassment by requiring that the investigation is to be conducted normally by a police officer of a designated higher rank.\" ", "This observation will leave no room for doubt that the safeguard incorporated in Sec. 5A is one against investigation by police officer of a rank lower than the designated rank and that the Magistrate con permit investigation by police officer of lower rank. It was however, urged that the three vital stages relevant to initiation of proceedings in respect of offences enumerated in Sec. 6(1) (a) and (b) have been clearly delineated in this judgment when at page 1162 it is observed; 'trial follows cognizance and cognizance is preceded by investigation.' This is the basic scheme of the Code in respect of cognizable offences but that too where in respect of a cognizable offence, the informant approaches an officer in charge of a police station. When in the case of a cognizable offence, a police officer on receipt of information of an offence proceeds under Chapter XII, he starts with investigation and then submits his report, called the police report, upon which cognizance is taken, and then follows the trial. And these three stages in that chronology are set out with regard to an investigation by an officer in charge of a police station or a police officer entitled to investigate any particular offence. This sentence cannot be read in isolation or torn out of the context to lend support to the submission that in no case cognizance can be taken without prior investigation under Sec. 5A. In fact the proceeded to make it abundantly clear that 'a defect or illegality in investigation however serious, has no direct bearing on the competence or the procedure relating to cognizance or trial.' The examined the scheme of Secs 190, 193 and 195 to 199 of the Code of Criminal Procedure and observed: that 'the language of Sec. 190 is in marked contrast with that of the other sections of the group under the same heading i.e. Sections 193 and 195 to 199 . These latter sections regulate the competence of the and bar its jurisdiction in certain cases excepting in compliance therewith, Section 190 does not.' The concluded by observing 'that where the cognizance of the case has in fact been taken and the case has proceeded to termination, the invalidity of the precedent investigation does not vitiate the result, unless miscarriage of justice has been caused thereby.' Having minutely read this judgment on which firm reliance was placed on behalf of the appellant, we find nothing in it to come to the conclusion that an investigation under Sec. 5A is a condition precedent before cognizance can be taken of offences triable by special Judge. Reliance next was placed upon the decision of this in held that Sec 5A was inserted in the 1952 Act to protect the public servants against harassment and victimization. If it was in the interest of the public that corruption should be eradicated, it was equally in the interest of the public that honest public servants should be able to discharge their duties free from false, frivolous and malicious accusations. To achieve this object, Sections 5A and 6 introduced the following two safeguards; (1) no police officer below the rank of a designated police officer, shall investigate any offence punishable under Sec. 161, Sec. 165 or Sec. 165A of the Indian Penal Code or under sub-Sec. (2) of Sec. 5A of the 1947 Act without the order of a Presidency Magistrate and (2) no court shall take cognizance of offences hereinabove enumerated except with the previous sanction, of the appropriate . The held that these statutory safeguards must be complied with, for they were conceived in public interest and were provided as a guarantee against frivolous and vexatious prosecutions. The further observed that the was prepared to believe an officer of an assured status implicity, and it prescribed an additional guarantee that in the case of police officers below the rank, the previous order of a Presidency Magistrate or a Magistrate of the first class as the case may be. Comes thereafter a pertinent observation 'that the Magistrate's status gives assurance to the bonafides of the investigation. 'This would rather show that while on the one hand conferred power on the police officers of the designated rank to take upon themselves the investigation of offences committed by public servants, it considered intervention of the Magistrate as the real safeguard when investigation was permitted by officers lower in rank then the designated officers. In other words, the was a safeguard and it ought to be so because the judicially trained mind is any day a better safeguard then any police officer or any rank. the observation of the in case was affirmed. .(2) this held that the order of the Magistrate giving permission to to investigate the case did not give any reasons and there was thus a violation of Sec. 5A. Yet this 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 proceeded to termination the invalidity of the preceding investigation does not vitiate the result unless the miscarriage of justice has been caused thereby, and in reaching this conclusion reliance was placed on the case of M.N. Rishbud In P. Sirajuddin etc. v. State of Madras etc.(3) it was held that' the Code of Criminal Procedure is an enactment designed inter alia to ensure a fair investigation of the allegations against a person charged with criminal misconduct. This is undeniable but has hardly any relevance. Some guidance is given to the enquiry officer and the means to be adopted in investigation of offences. This has no bearing on the issue under discussion. Reference was also made to (4) which does not advance the case at all. Having carefully examined these judgments in the light of the submissions made, the only conclusion that unquestionably emerges is that Sec. 5A is a safeguard against investigation of offences committed by public servants, by petty or lower rank police officer. It has nothing to do directly or indirectly with the mode and method of taking cognizance of offences by the court of special Judge. It also follows as a necessary corollary that provision of Sec. 5A is not a condition precedent to initiation of proceedings before the special Judge who acquires power under Sec. 8(1) to take cognizance of offences enumerated in Sec. 6(1) (a) and (b), with this limitation alone that is shall not be upon commitment to him by the Magistrate. ", "Once the contention on behalf of the appellant that investigation under Sec. 5A is a condition precedent to the initiation of proceedings before a special Judge and therefore cognizance of an offence cannot be taken except upon a police report, does not commend to us and has no foundation in law, it is unnecessary to refer to the long line of decisions commencing from v , (1) v. King Emperor (2) and ending with ., (3) laying down hitherto uncontroverted legal principle that where a statute requires to do a certain thing in a certain way, the thing must be done in that way or not at all Other methods of performance are necessarily forbidden. ", "Once Sec. 5A is out of the way in the matter of taking cognizance of offences committed by public servants by a special Judge, the power of the special Judge to take cognizance of such offences conferred by Sec. 8(1) with only one limitation, in any one of the known methods of taking cognizance of offences by courts of original jurisdiction remains undented. One such statutorily recognised well-known method of taking cognizance of offences by a court competent to take cognizance is upon receiving a complaint of facts which constitutes the offence. And Sec. 8(1) says that the special Judge has the power to take cognizance of offences enumerated in Sec. 6(1)(a) and (b) and the only mode of taking cognizance excluded by the provision is upon commitment. It therefore, follows that the special Judge can take cognizance of offences committed by public servants upon receiving a complaint of facts constituting such offences. ", "It was, however, submitted that even if it be held that the special Judge is entitled to entertain a private complaint, no further steps can be taken by him without directing an investigation under Sec 5A so that the safeguard of Sec. 5A is not whittled down. This is the self same argument under a different apparel. Accepting such a submission would tantamount to saying that on receipt of the complaint the special Judge must direct an investigation under Sec. 5A. There is no warrant for such an approach. Astounding as it appeared to us, in all solemnity it was submitted that investigation of an offence by a superior police officer affords a more solid safeguard compared to a court. Myopic as this is, it would topsy turvy the fundamental belief that to a person accused of an offence there is no better safeguard than a court. And this is constitutionally epitomised in Art. 22 that upon arrest by police, the arrested person must be produced before the nearest Magistrate within twenty-four hours of the arrest. Further, numerous provisions of the Code of Criminal procedure such as Sec. 161, Sec 164, and Sec. 25 of the Indian Evidence Act would show the 's hesitation in placing confidence on police officers away from court's gaze. And the very fact that power is conferred on a Presidency Magistrate or Magistrate of the first class to permit police officers of lower rank to investigate these offences would speak for the mind of the that the court is a more reliable safeguard than even superior police officers. ", "It was urged that there is inherent evidence in other provisions of the 1952 Act and the Code of Criminal Procedure which would buttress the submission that the special Judge cannot take cognizance upon a private complaint. Even if Sec. 8(1) confers specific powers of taking cognizance of offences without the necessity of the accused being committed for trial and prescribes the procedure for trial of warrant cases by Magistrates to be adopted by a special Judge, it is necessary to determine with accuracy whether a special Judge is a Magistrate or a Sessions Judge. After referring to Sec. 8(3) which provides that save as provided in sub-sec. (1) or sub-sec. (2), the provisions of the Code of Criminal procedure, 1898 shall so far as they are not inconsistent with the 1952 Act apply to the proceedings before a special Judge; and for the purposes of the said provisions, the Court of a special Judge shall be deemed to be trying cases without a jury or without the aid of assessors and the person conducting a prosecution before a special Judge shall be deemed to be a public prosecutor; it was urged that for the purpose of procedure to be followed by a special Judge in the trial of the case before him, he is a Magistrate as provided in Sec. 8(1) but not a Sessions Judge because can take cognizance of offences without commitment while a special Judge has to take cognizance of offences without accused being committed to him for trial yet the provisions of sub-Secs. (2) and (3) leave no one in doubt that for all other purposes he is to be treated as a Sessions Judge or . Proceeding along it was urged that if a special Judge has all the trappings of , he cannot take cognizance as provided by Sec. 190, Cr. P. C. because it confers power on Magistrate to take cognizance of any offence in any one of the three modes therein prescribed. Therefore, it was submitted that a private complaint cannot be entertained. ", "For more than one reason it is not possible to accept this submission. If Sec. 190 cannot be availed, we fail to see how a special Judge would be entitled to take cognizance on a police report. If Sec. 190 is not attracted all the three modalities of taking cognizance of offences would not be available. One cannot pick and choose as it suits one's convenience. Either all the three modalities are available or none. And Sec. 8(1) which confers power of taking cognizance does not show any preference. On this short ground, the submission must be rejected. ", "It is, however, necessary to decide with precision and accuracy the position of a special Judge and the over which he presides styled as the of a special Judge because unending confusions have arisen by either assimilating him with a Magistrate or with a Sessions . The Prevention of Corruption Act , 1947 was enacted for more effective prevention of bribery and corruption. Years rolled by and experience gathered showed that unless a special forum for the trial of such offences as enumerated in the 1947 Act is created, the object underlying the 1947 Act would remain a distant dream. This led to the enactment of the Criminal Law Amendment Act , 1952. The Statement of objects and Reasons accompanying the Bill refers to the recommendations of the chaired by Dr. appointed to review the working of and to make recommendations for improvement of laws relating to bribery and corruption. To take the cases of corruption out of the maze of cases handled by Magistrates, it was decided to set up special courts. Sec. 6 conferred power on the State Government to appoint as many special Judges as may be necessary with power to try the offences set out in clauses (a) and (b). Now if at this stage a reference is made to Sec. 6 of the Code of Criminal Procedure which provides for constitution of criminal courts, it would become clear that a new court with a new designation was being set up and that it has to be under the administrative and judicial superintendence of the High . As already pointed out, there were four types of criminal courts functioning under the High . To this list was added the court of a special Judge. Now when a new court which is indisputably a criminal court because it was not even whispered that the of special Judge is not a criminal court, is set up, to make it effective and functionally oriented, it becomes necessary to prescribe its powers, procedure, status and all ancillary provisions. While setting up a court of a special Judge keeping in view the fact that the high dignitaries in public life are likely to be tried by such a court, the qualification prescribed was that the person to be appointed as special Judge has to be either a Sessions Judge, Additional Sessions Judge or Assistant Sessions Judge. These three dignitaries are above the level of a Magistrate. After prescribing the qualification, the proceeded to confer power upon a special Judge to take cognizance of offences for the trial of which a special court with exclusive jurisdiction was being set up. If a special Judge has to take cognizance of offences, ipso facto the procedure for trial of such offences has to be prescribed. Now the Code prescribes different procedures for trial of cases by different courts. Procedure for trial of a cases by different courts. Procedure for trial of a case before a of Sessions is set out in Chapter XVIII, trial of warrant cases by Magistrates is set out in Chapter XIX and the provisions therein included catered to both the types of cases coming before the Magistrate, namely, upon police report or otherwise than on a police report. Chapter XX prescribes the procedure for trial of summons cases by Magistrates and Chapter XXI prescribes the procedure for summary trial. Now that a new criminal court was being set up, the took the first step of providing its comparative position in the hierarchy of courts under Sec. 6 Cr. P.C. by bringing it on level more or less comparable to the of Sessions, but in order to avoid any confusion arising out of comparison by level, it was made explicit in Sec. 8 (1) itself that it is not a of Sessions because it can take cognizance of offences without commitment as contemplated by Sec. 193 Cr. P. C. Undoubtedly in Sec. 8 (3) it was clearly laid down that subject to the provi- ", "945 ", "sions of sub-Sec. (1) and (2) of Sec. 8, shall be deemed to be trying cases without a jury or without the aid of assessors. In contra-distinction to this new court was to be a court of original jurisdiction. The then proceeded to specify which out of the various procedures set out in the Code , this new court shall follow for trial of offences before it. Sec 1 (1) specifically says that a special Judge in trial of offences before him shall follow the procedure prescribed in the Code of Criminal Procedure for trial of warrant cases by Magistrates. The provisions for trial of warrant cases by the Magistrate are to be found in Chapter XXI of 1898 Code. A glance through the provisions will show that the provisions therein included catered to both the situations namely, trial of a case initiated upon police report (Sec. 251A) and trial of cases instituted otherwise than on police report (Sec 252 to ", "257). If a special Judge is enjoined with a duty to try cases according to the procedure prescribed in foregoing provisions he will have to first decide whether the case was instituted upon a police report or otherwise than on police report and follow the procedure in the relevant group of sections. Each of the Secs. 251A to 257 of 1898 Code which are in pari materia with Secs 238 to 250 of 1973 Code refers to what the Magistrate should do. Does the special Judge in Secs 238 to 250 wherever the expression 'Magistrate' occurs. This is what is called legislation by the incorporation. Similarly, whether the question of taking congnizane arises, it is futile to go in search of question of taking congnizance arises, it is futile to go in search of the Magistrate to take cognizance of the offence, special Judge is a Magistrate? What is to be done is that one has to read the expression 'special Judge' in place of Magistrate, and the whole thing becomes crystal clear. The wherever it found the grey area clarified it by making specific provision such as the one in sub-s (2) of Sec. 8 and to leave no one in doubt further provided in sub-s. (3) that all the provisions of the Code of Criminal Procedure shall so far as they are not inconsistent with the Act apply to the proceedings before a special Judge. At the time when the 1952 Act was enacted what was in operation was the Code of Criminal Procedure, 1898. It did not envisage any Court of a special Judge and the never wanted to draw up an exhaustive Code of Procedure for this new criminal court which was being set up. Therefore, it conferred power (taking cognizance of offences), prescribed procedure (trial of warrant cases by a Magistrate), indicated authority to tender pardon (Sec 338) and then after declaring is status as comparable to proceeded to pres- ", "946 ", "cribe that all provisions of the Code of Criminal Procedure will apply in so far as they are not inconsistent with the provisions of the 1952 Act. The net outcome of this position is that a new court of original jurisdiction was set up and whenever a question arose as to what are its powers in respect of specific questions brought before it as court of original criminal jurisdiction, it had to refer to the Code of Criminal Procedure undaunted by any designation claptrap. When taking cognizance, enjoyed the powers under Sec. 190. When trying cases, it is obligatory to follow the procedure for trial of warrant cases by a Magistrate though as and by way of status it was equated with . The entire argument inviting us to specifically decide whether a court of a special Judge for a certain purpose is or revolves round a mistaken belief that a special Judge has to be one or the other, and must fit in the slot of a Magistrate or . Such an approach would strangulate the functioning of the court and must be eschewed. Shorn of all embellishment, the court or a special Judge is a court of original criminal jurisdiction. As a court of original criminal jurisdiction in order to make it functionally oriented some powers were conferred by the statute setting up the court. Except those specifically conferred and specifically denied, it has to function as a court of original criminal jurisdiction not being hide bound by the terminological status description of Magistrate or . Under the Code it will enjoy all powers which a court of original criminal jurisdiction enjoys save and except the ones specifically denied. ", "Sec 9 of the 1952 Act would equally be helpful in this behalf. Once court of a special Judge is a court of original criminal jurisdiction, it became necessary to provide whether it is subordinate to , whether appeal and revision against its judgments and orders would lie to and whether would have general superintendence over a Court of special Judge as it has over all criminal courts as enumerated in Sec. 6 of the Code of Criminal Procedure. The court of a special Judge, once created by an independent statute, has been brought as a court of original criminal jurisdiction under because Sec. 9 confers on all the powers conferred by Chapters XXXI and XXXIII of the Code of Criminal Procedure, 1898 on as if the court of special Judge were a court of trying cases without a jury within the local limits of the jurisdiction of . Therefore, there is no gainsaying the fact that a new criminal court with a name, designation and qualification of the officer eligible to preside over it with powers specified and the particular procedure which it must follow has been set up under the 1952 Act. The court has to be treated as a court of original criminal jurisdiction and shall have all the powers as any court of original criminal jurisdiction has under the Code of Criminal Procedure, except those specifically excluded. ", "Once the position and power of a special Judge in the hierarchy of criminal courts under is clearly and unambiguously established, it is unnecessary to roam into an enquiry examining large number of decisions laying down in the context of each case that a special Judge is and the contrary view taken in some other decisions. Reference to those judgments would be merely adding to the length of this judgment without achieving any useful purpose. ", "It was submitted that there is further internal evidence pointing in the direction that a private complaint cannot be entertained by a special Judge. Sec. 225 in Chapter XVIII containing provisions prescribing procedure of trial before provides that 'in every trial before ' the prosecution shall be conducted by a Public Prosecutor.' Last part of Sec. 8 (3) of the 1952 Act provides that'.... the person conducting a prosecution before a special Judge shall be deemed to be a public prosecutor. It was urged that public prosecutions are ordinarily launched in the name of the because in matters of serious offences the society is interested in punishing the anti-social elements who may be a menace to society and that such prosecution is not for satisfying private lust or sense of vengeance. Proceeding along, it was stated that the scheme of Criminal Procedure Code clearly shows that serious offences are exclusively triable by and that even if a commitment to is made upon an inquiry held by a Magistrate taking cognizance of the offence on a private complaint, once the case is committed to , the role of the private complainant becomes insignificant. The takes over the prosecution and the public prosecutor shall necessarily be in charge of the prosecution. And it was pointed out that public prosecutor is appointed by the or the Government. It was urged that appointment of a public prosecutor under Sec. 24 of the Code of Criminal Procedure is a solemn duty to be performed by the or the Government, as the case may be, and that too after consultation with . ", "948 ", "And it is such public prosecutor who shall alone be entitled to conduct the trial before . In order to acquaint us with the role, the dignity and the responsibility of a public prosecutor, attention was drawn to v. The King(1) & Ors. v. The State, (1) .(2) In Re and Ors (3) and (4) These decisions purport to indicate the objectivity and the fairness with which a public prosecutor in charge of the case shall conduct the prosecution and it is no part of his duty to attempt to obtain a conviction at all costs. His duty is to fairly analyse the evidence for and against the accused and that he should not withheld any evidence which has a bearing on the issues before the court. In other words, he must be fair and objective in his approach to the case animated by a desire to vindicate justice and no more. It was urged that if this be the well-recognised role of a public prosecutor, how horrendous it would appear if a private complainant motivated by a desire to wreck vengeance against the accused is to be deemed to be a public prosecutor. It was said that such a private complainant cannot be elevated to the status of a public prosecutor but the deeming fiction enacted in latter part of Sec. 8 (3) would clothe him with such a status of a public prosecutor which he was hardly qualified to enjoy. As a second string to the bow, it was said that Sec. 321 of the Code of Criminal Procedure generally confers power on a public prosecutor to withdraw the prosecution subject to limitations therein prescribed. The submission is that if a private complainant who chooses to conduct his case and thereby enjoys the status of a deemed public prosecutor he would be able to poute the fountain of justice by initiating some frivolous prosecution and then withdraw it if his palms are greased. It was also said that the accused may put up a bogus complainant and make a pretence of trial and escape a serious prosecution upon high level investigation. These are wild imaginings, irrelevant for the purpose of construction of a provision in a statute. Further this submission overlooks the vital role that the court has to play before any prosecution can be withdrawn at the instance of a public prosecutor. That a public prosecutor may abuse his office is not determinative as to who should be a public prosecutor. The deeming fiction enabled in Sec. 8 (3) is confined to the limits of its requirement in that the person conducting a prosecution before a special Judge is to be deemed to be a public prosecutor. In fact, this fiction created by Sec. 8 (3) would rather negative the argument of the appellant that a private complaint is not maintainable, inasmuch as the could have inserted a provision analogous to Sec. 225 that a prosecution before a special Judge shall be conducted by a public prosecutor. On the contrary, conscious of the position that a private complaint may be filed before a special Judge who may take cognizance of the offences on such a complaint, the wanted to clothe the person in charge of the prosecution before a special Judge with the status of a public prosecutor for the purposes of the Code of Criminal Procedure. This is an additional reason why the contention of the appellant that a private complaint is not maintainable cannot be entertained. ", "It was then submitted that if the object underlying 1952 Act was to provide for a more speedy trial of offences of corruption by a public servant, this laudable object would be thwarted if it is ever held that a private complaint can be entertained by a special Judge. Developing the argument it was pointed out that assuming that a private complaint is maintainable before taking cognizance, a special Judge will have to examine the complainant and all the witnesses present as enjoined by Sec. 200. The Judge thereafter ordinarily will have to postpone issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer and in cases under the 1947 Act by police officers of designated rank for the purpose of deciding whether or not there is sufficient ground for proceeding. (Sec. 202(1)). If the Judge proceeds to hold the inquiry himself, he is obliged to take evidence on oath but it was said that if is , the case would be governed by proviso to sub-s (2) of Sec. 202, Cr P.C. and that therefore, he will have to call upon the complainant to produce all his witnesses and examine them on oath. This would certainly thwart a speedy trial was the apprehension disclosed and therefore, it was said that there is internal contra-indication that a private complaint is not maintainable. We find no merit in the submissions. As has been distinctly made clear that is a court of original criminal jurisdiction and that it can take cognizance of an offence in the manner hereinbefore indicated, it may be that in order to test whether the complaint disclosed a serious offence or that there is any frivolity involved in it, the Judge may insist upon holding an inquiry by postponing the issue of process. When a private complaint is filed, the court has to examine the complainant on oath save in the cases set out in the proviso to Sec. 200 Cr.P.C . After examining the complainant on oath and examining the witnesses present, if any, meaning thereby that the witnesses not present need not be examined, it would open to the court to judicially determine whether a case is made out for issuing process. When it is said that court issues process, it means the court has taken cognizance of the offence and has decided to initiate the proceeding and as a visible manifestation of taking cognizance, process is issued which means that the accused is called upon to appear before the court. This may either take the from of a summons or a warrant, as the case may be. It may be that after examining the complainant and his witnesses, the court in order to doubly assure itself may postpone the issue of process, and call upon the complainant to keep his witnesses present. The other option open to the court is to direct investigation to be made by a police officer. And if the offence is one covered by the 1947 Act, the investigation, if directed, shall be according to the provision contained in Sec. 5A But it must be made distinctly clear that it is neither obligatory to hold the inquiry before issuing process to direct the investigation of the offence by police. The matter is in the judicial discretion of the court and is judicially reviewable depending upon the material disclosed by the complainant in his statement under oath under Sec. 200, called in the parlance of criminal courts verification of the complaint and evidence of witnesses if any. It was however, urged that if Sec. 5A can be dispensed with by holding that a private complaint is maintainable, the court atleast should ensure pre-process safeguard by insisting upon the examination of all witnesses that the complainant seeks to examine and this will be counter-productive as far as the object of a speedy trial is concerned. Viewed from either angle, there is no merit in this submission. Primarily, examination of witnesses even at a preprocess stage by special Judge is not no the footing that case is exclusively triable by as contemplated by Sec. 202(2) proviso. There is no commitment and therefore, Sec. 202(2) proviso is not attracted. Similarly, till the process is issued, the accused does not come into the picture He may physically attend but is not entitled to take part in the proceeding. ( . (1)) Upon a complaint being received and the court records the verification, it is open to the court to apply its mind to the facts disclosed and to judicially determine whether process should or should not be issued. It is not a condition precedent to the issue of process that the court of necessity must hold the inquiry as envisaged by Sec. 202 or direct investigation as therein contemplated. The power to take cognizance without holding inquiry or directing investigation is implicit in Sec. 202 when it says that the Magistrate may if he thinks fit, postpone the issue of process against the accused and either inquire into the case himself or direct an investigation to be made by a police officer..... for the purpose of deciding whether or not there is sufficient ground for proceeding.' Therefore, the matter is left to the judicial discretion of the court whether on examining the complainant and the witnesses if any as contemplated by Sec. 200 to issue process or to postpone the issue of process. This discretion which the court enjoys cannot be circumscribed or denied by making it mandatory upon the court either to hold the inquiry or direct investigation. Such an approach would be contrary to the statutory provision. Therefore, there is no merit in the contention that by entertaining a private complaint, the purpose of speedy trial would be towarted or that a pre-process safeguard would be denied. ", "Further when cognizance is taken on a private complaint or to be precise otherwise than on a police report, the special Judge has to try the case according to the procedure prescribed for trial of warrant cases instituted otherwise than on police report by a Magistrate (Sec. 252 to 258 of 1898 Code of Criminal Procedure). Sec. 252 requires that when accused is brought before a court, the court shall proceed to hear the complainant and take all such evidence as may be produced in support of the prosecution. Accused has a right to cross examine complainant and his witnesses. If upon considering the evidence so produced, the court finds that no case against the accused has been made out which, if undebutted, would warrant his conviction, the court shall discharge the accused (Sec. 253 ibid). If, on the other hand, the court is of the opinion that there is ground for presuming that the accused has committed an offence, which the court is competent to try, a charge shall be framed in writing against the accused (Sec. 254 ibid). After the accused pleads not guilty to the charge, all prosection witnesses examined before the charge shall be recalled for further cross examination. Prosecution may examine additional witnesses whom the accused would be entitled to cross examine. Thereafter the accused may enter on his defence and may examine witness in defence. This procedure provides more adequate safeguard than the investigation by police officer of designated rank and therefore, search for fresh or additional safeguard is irrelevant. ", "It was however urged that while making the provisions of the Code of Criminal Procedure, 1898 applicable to an Proceeding in relation to an offence punishable under Secs. 161, 165 and 165 IPC and under Sec. 5 of the 1947 Act, modification was considered necessary in sub-s. (8) of Sec. 251A which prescribed procedure for trial of warrant cases instituted upon a police report while no corresponding amendment was made in any of the provisions contained in the same Chapter which prescribed procedure for warrant cases instituted otherwise than on police report and that this wold show that a private complainant which will be required to be tried according to the procedure prescribed for trial of warrant cases instituted otherwise than on a police report was not within the contemplation of the . The modification made in sub-s. (8) of Sec. 251A is marginal and minimal. It is to the effect that instead of the words 'the accused shall then be called upon' the words 'the accused shall then be required to give in writing at once or within such time as the Magistrate may allow, a list of persons (if any) whom he proposes to examined as his witnesses and all the documents (if any) on which he proposes to rely, and he shall then be called upon to enter his defence' shall be substituted. It was urged that no corresponding amendment was made in Sec. 256 of the Code of Criminal Procedure, 1898 and that this glaring omission would clearly indicate that the procedure prescribed for trial of warrant cases otherwise than on police report was not within the contemplation for the trial of offences under the 1947 Act. Sec. 251A came to be introduced in the Code of Criminal Procedure, 1898 in 1955. Prior thereto there was uniform procedure for trial of warrant cases by Magistrate irrespective of whether the case was instituted on a police report or otherwise than on a police report. By the Amending Act , 1955, two different procedures came to be prescribed for trial of warrant cases (i) under Sec. 251A in respect of cases instituted on a police report and (ii) Sec. 252 to 258 in cases instituted otherwise than on a police report. This distinction with some modification has been retained in the Code of Criminal Procedure, 1973. The made certain modifications in the procedure applicable to warrant cases instituted otherwise than on police report, but left the other provisions applicable to trial of warrant cases instituted otherwise that on police report intact. The in its wisdom may have considered it necessary to make changes in one procedure and not in the other. It should not be forgotten that prior to 1955, the procedure for trial of warrant cases instituted on a police report and otherwise than on police report was the same and the Act of 1952 set up to try cases under the 1947 Act and the trial was to be held according to the procedure prescribed for trial of warrant case. It necessarily follows that between 1952 to 1955, would have followed the same procedure for trial of a case instituted upon a police report or otherwise than on a police report. If in 1955, the prescribed two different procedures and left the one for trial of warrant cases instituted otherwise than on police report intact and the position remained unaltered even after the introduction of Sec 7A. it is not suggestive of such a grave consequence that a private complaint is not maintainable. Therefore, this additional limb does not advance the case any further. ", "The learned Judges composing of by their separate judgments negatived the contention of the appellant holding that for the purpose of taking cognizance of an offence under the 1947 Act, special Judge was a Magistrate and can take cognizance as provided by Sec, 190 of the Code of Criminal Procedure. In reaching this conclusion, the learned Judges were largely influenced by the decision in ., (1) in which this Court held that the special Judge functioning under Sec. 8 (1) is a Magistrate for the purposes of Sec. 167 of the Code of Criminal Procedure. They also relied upon the decision in (2) wherein a Division Bench of held that a report submitted upon an investigation, which is found to be defective, can be treated as a private complaint of the police officer submitting the report and if congnizance is taken on such complaint, it would not be invalid. It was said that these decisions run counter to some decisions of this Court. It is not necessary to examine this aspect because as pointed out by us, a court of special Judge is a court of original criminal jurisdiction and it is not necessary to treat him either a Magistrate or save and except in respect of specific provision wherein it is so provided. There is the third decision in this context, which may be briefly referred to here. , (3) a Division Bench of held that the special Judge can take cognizance upon receiving a complaint of facts which constitute the offence or even upon information received from any person other than a police officer or upon his own knowledge of suspicion that the offence has been committed. This was treated as so obvious by the court that there is no discussion in support of the conclusion. However, we are satisfied that these decisions lay down the correct law on the point of maintainability of private complaint. ", "Having examined the matter from all the different angles, we are satisfied that the conclusion reached both by the learned special Judge and of that a private complaint filed by the complainant was clearly maintainable and that the cognizance, was properly taken, is correct. Accordingly, this appeal fails and is dismissed. ", "S.R. Appeal dismissed"], "relevant_candidates": ["0000056823", "0000608411", "0000632600", "0000656976", "0000667953", "0000707829", "0001136935", "0001256432", "0001361495", "0001391021", "0001710467", "0001804557"]} {"id": "0001508893", "text": ["ORDER , J. ", "1. This revision has been filed under Article 227 of the Constitution India for striking off the suit in O.S.No. 288 of 2004 from the file of , Valliyur, on the ground that the suit is not maintainable. ", "2. The respondents 1 & 2 filed the above suit for an interim injunction, restraining the third respondent from alienating the suit property till the sale agreement is subsisting and restraining the petitioner from commissioning the wind energy electrical generator. Pending suit, respondents 1 and 2 prayed for an interim injunction, restraining the petitioner from commissioning the Wind Mill mentioned above. The Court below gave an interim injunction only with regard to operation of the wind generator. Against this the petitioner herein has filed this revision without filing an appeal which is there remedy against an order passed in an application under Order 39, Rules 1 & 2 and 151 of the Civil Procedure Code. ", "3. The learned counsel appearing for the petitioner would submit that though there is an appeal remedy, the petitioner have not availed of it because the suit itself is an abuse of process of law and must be struck off from the file. According to the learned counsel, the basis on which the respondents 1 & 2 have filed the suit is the agreement referred to above and even in the; agreement it is clear that possession was not handed over to the respondents 1 and 2. The pleadings also indicate that the third respondent with whom respondents 1 and 2 entered into an agreement were put in possession of the property. The learned, counsel for the petitioner submitted that an agreement holder had no right to seek interim injunction and he was; barred under Section 41(h) of ha Specific Relief Act and therefore, suit must be struck off from the file. He further submitted that if at all the respondents 1 and 2 had a remedy, it was to file a suit for specific performance. ", "4. The learned counsel for the respondents 1 and 2 submitted that there is an another suit pending, in which, an interim injunction has been obtained restraining the third respondent from alienating the property and for this reason, the respondents 1 and 2 could not file a suit for specific performance. Further it is submitted that under the agreement, six months' time was given and therefore that was another reason why they could not file the, suit for specific performance. The learned counsel admitted that respondents 1 and 2 were not in possession. He submitted further that if interim injunction is not granted, the respondents 1 and 2 would suffer irreparable loss and hardship and would be left with no other remedy. ", "5. The learned counsel for the respondents relied on the following judgments and 4 Ors. v. and ., 2004 (1) L.W. 803, where this refused to set aside an order refusing to reject the plaint on an application filed under Order 7, Rule 11, CPC. That case arose in some what similar circumstances. There also the agreement holder has filed the suit for permanent injunction. It was contended by the defendants that in view of the bar contained in Section 41(h) of the Specific Relief Act, the plaint must be rejected. The revision further was dismissed on the ground that the question whether Section 41(h) would apply cannot be decided at that stage. ", "6. The learned counsel for the respondent also relied on , , where the Full Bench of held that a suit for permanent injunction by an agreement holder who is in possession of the property is not barred by Section 41(h) . ", "7. Both the above cited decisions will not help the respondents, since in both the cases, the agreement holder was put in possession pursuant to the agreement. In fact, in the judgment of it has been held, that even though the plaintiffs plea for specific performance may be barred by Law of Limitation, they are entitled to continue in possession, since Section 53-A of the Transfer of Property it creates equity in his favour. In the judgment cited supra and 4 Ors. v. Baskaran and ., 2004 (1) L.W. 803 also, the agreements holders were put in possession. ", "8. The learned counsel for the petitioner relied on the decision , , where this Court came to the conclusion that while considering the grant of temporary injunction, if the Court feels that prima facie the suit itself is not maintainable, since the decree for permanent injunction cannot be granted in view of the bar under Section 41(h) of the Specific Relief Act it cannot be said that the plaintiff has got a prima facie case. ", "9. The learned counsel for the petitioner also relied on the judgment ., , where a Division Bench of held that, the person who alleges that he has purchased a property under an agreement has to get his relief by filing a suit for specific performance and not by filing a suit for injunction and interim injunction cannot be granted. ", "10. The Learned counsel also relied on the decision ., , where it was held that a suit for permanent injunction by a person, who claims to have an agreement in his favour is not maintainable. ", "11. If the petitioner is aggrieved by the order passed under Order 39, Rules 1 and 2, there is an appeal remedy and he can avail, of it. If the petitioner's; case is that the plaint should be rejected, even then, he has his remedy. But unless, the circumstances warrants and the abuse of process of law stares in the face, Article 227 cannot be invoked for striking of a case from the file. It is in these circumstances, the is dismissed. It is open to the petitioner to raise his objections, in respect of the maintainability of the suit and the bar of Section 41(h) of the Specific Relief Act and since the dismissal of this is not on merits, it shall not be held against the petitioner. When such objections are raised, it will be dealt with by the in accordance with law."], "relevant_candidates": [""]} {"id": "0001518758", "text": ["CASE NO.: Appeal (civil) 5478 of 2004 PETITIONER: RESPONDENT: & Ors. DATE OF JUDGMENT: 25/08/2004 BENCH: , & JUDGMENT: ", "J U D G M E N T (Arising out of S.L.P. ) No. 12019 of 2003) S.B. SINHA, J: ", "Leave granted. ", " aggrieved by and dissatisfied with a judgment and order dated 28th March, 2002 passed by at Hyderabad in AAO No. 216 of 1997 is in appeal before us. ", "The respondents herein are heirs and legal representatives of one . The said (the deceased) used to carry on business in vegetables. He purchased 5 bags of vegetables on 24.11.1991 in a village known as Ayyapareddipalem and loaded the same in a trailer of a tractor bearing No. MH33-8109. He was traveling therein. He wanted to buy some more vegetables at a village known as Peddapadu. While the tractor approached the said village, a bus was seen coming from opposite direction. Because of rash and negligent driving on the part of the driver of the said tractor, and which was driven at a very high speed, it went to the extreme left side of road margin and because of heavy jerks, the deceased fell down and received serious injuries. He was immediately shifted to Peddapadu where he breathed his last. ", "A claim petition was filed by the respondents herein before , Nellore claiming a sum of Rs. 1,00,000/-. The Appellant herein denied and disputed its liability to pay any amount to the Respondents by way of compensation inter alia on the ground that the deceased was traveling in the said tractor as a 'paid passenger'. ", "The learned inter alia held that carrying the goods, i.e., vegetables, by the deceased as owner thereof would entitle the Applicants to receive compensation from the Appellant. ", "The learned observing that a person who is not a party to contract of insurance would be the 'third party' and in that view of the matter the respondents would be entitled to the amount of compensation even if the vehicle was only having third party insurance (Act policy). It was further held that the was empowered to grant compensation over and above the amount claimed. A sum of Rs. 1,53,000/- was awarded by way of compensation in favour of the Respondents. by reason of the impugned judgment has dismissed the appeal preferred by the Appellant herein from the said judgment and award holding that as the deceased was traveling in the trailer alongwith his goods being vegetables, it was liable to pay compensation. ", "Mr. , learned counsel appearing on behalf of the appellant would submit that as this Court in Vs. and Others [(2003) 2 SCC 223] overruled its earlier decision in Vs. [(2000) 1 SCC 237] holding that the insurance company would not be liable for paying compensation to a passenger in a goods vehicle, whether he was travelling as an owner of the goods when that vehicle meets with an accident, the impugned judgment is not sustainable. ", "Mrs. , learned counsel appearing on behalf of the respondents, on the other hand, would submit that a tractor is not a 'goods carriage' vehicle and as carrying of vegetables in a tractor would be for agricultural purpose, the appellant cannot be absolved from its liability to pay the amount of compensation. ", " Section 147(1) of the Motor Vehicles Act, 1988 is in pari materia with the provisions of Section 95(1) of the Motor Vehicles Act, 1939. In the year, 1994, Section 147 was amended by reason of Act 54 of 1994 with effect from 14.11.1994 in terms whereof the words \"including owner of the goods or his authorized representative carried in the vehicle\" were added after the words \"against any liability which may be incurred by him in respect of the death of or bodily injury to any person\". ", "In (supra), this overruling its earlier decision in (supra) observed: ", "\"9. In case (supra) the Court assumed that the provisions of section 95(1) of Motor Vehicles Act, 1939 are identical with section 147(1) of the Motor Vehicles Act, 1988, as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the amendment of 1994 it was not necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in a goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of the goods or his authorised representative when being carried in a goods vehicle the accident occurred.\" ", "One of us in a supplemental judgment in Asha Rani (supra) opined: ", "\"25. Section 147 of 1988 Act, inter alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of \"public service vehicle\". Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen's Compensation Act . It does not speak of any passenger in a 'goods carriage'. ", "26. In view of the changes in the relevant provisions in the 1988 Act vis-a-vis the 1939 Act, we are of the opinion that the meaning of the words \"any person\" must also be attributed having regard to the context in which they have been used i.e. 'a third party'. Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor. ", "27. Furthermore, sub-clause (i) of clause (b) of sub-section (1) of section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. ", "28. An owner of a passenger carrying vehicle must pay premium for covering the risks of the passengers. If a liability other than the limited liability provided for under the Act is to be en- hanced under an insurance policy, additional premium is required to be paid. But if the ratio of this 's decision in 1 SCC 237 is taken to its logical conclusion, although for such passengers, the owner of a goods carriage need not take out an insurance policy, they would be deemed to have been covered under the policy wherefor even no premium is required to be paid. ", "29. We may consider the matter from another angle. Section 149(2) of the 1988 Act enables the insurers to raise defences against the claim of the claimants. In terms of clause (c) of sub-section (2) of section 149 of the Act one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used. Such a statutory defence available to the insurer would be obliterated in view of the decision of this Court in case (supra).\" ", " (supra) was followed by this Court in Vs. and Others [(2003) 2 SCC 339] holding: ", "\"10. The inevitable conclusion, therefore, is that provisions of the Act do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods carriage and the insurer would have no liability therefore.\" ", "Yet again in Vs. and . [JT 2003 (7) SC 520] this Court held: ", "\"11. The difference in the language of \"goods vehicle\" as appearing in the old Act and \"goods carriage\" in the Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression \"in addition to passenger\" as contained in definition of \"goods vehicle\" in the old Act. The position becomes further clear because the expres- sion used is \"goods carriage\" is solely for the \"carriage of goods\". Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to clause (ii) of the proviso appended to section 95 of the old Act prescribing requirement of insurance policy. Even section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of \"public service vehicle\". The proviso makes it further clear that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under the Workmen's Compensation Act , 1923 (in short 'WC Act'). There is no reference to any passenger in \"goods carriage\".\" ", "The effect of 1994 amendment came up for consideration before a 3- Judge Bench of this Court in Vs. and Others [(2004) 2 SCC 1] wherein again it was held: ", "\"19. In Asha Rani (supra), it has been noticed that sub-clause (i) of clause (b) of sub-section (1) of Section 147 of the 1988 Act speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. Furthermore, an owner of a passenger-carrying vehicle must pay premium for covering the risks of the passengers travelling in the vehicle. The premium in view of the 1994 Amendment would only cover a third party as also the owner of the goods or his authorised representative and not any passenger carried in a goods vehicle whether for hire or reward or otherwise. ", "20. It is therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons other than the owner of the goods or his authorized representative remains the same. Although the owner of the goods or his authorized representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time the contract of insurance was entered into, nor was any premium paid to the extent of the benefit of insurance to such category of people.\" ", "(Emphasis supplied) An insurance for an owner of the goods or his authorized representative travelling in a vehicle became compulsory only with effect from 14.11.1994, i.e., from the date of coming into force of Amending Act 54 of 1994. ", "Furthermore, a tractor is not even a goods carriage. The \"goods carriage\" has been defined in Section 2(14) to mean \"any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods\" whereas \"tractor\" has been defined in Section 2(44) to mean \"a motor vehicle which is not itself constructed to carry any load (other than equipment used for the purpose of propulsion); but excludes a road-roller\". The \"trailer\" has been defined in Section 2(46) to mean \"any vehicle, other than a semi-trailer and a side-car, drawn or intended to be drawn by a motor vehicle\". ", "A tractor fitted with a trailer may or may not answer the definition of goods carriage contained in Section 2(14) of the Motor Vehicles Act. The tractor was meant to be used for agricultural purposes. The trailer attached to the tractor, thus, necessarily is required to be used for agricultural purposes, unless registered otherwise. It may be, as has been contended by Mrs. , that carriage of vegetables being agricultural produce would lead to an inference that the tractor was being used for agricultural purposes but the same by itself would not be construed to mean that the tractor and trailer can be used for carriage of goods by another person for his business activities. The deceased was a businessman. He used to deal in vegetables. After he purchased the vegetables, he was to transport the same to market for the purpose of sale thereof and not for any agricultural purpose. The tractor and trailer, therefore, were not being used for agricultural purposes. However, even if it be assumed that the trailer would answer the description of the \"goods carriage\" as contained in Section 2(14) of the Motor Vehicles Act, the case would be covered by the decisions of this Court in Asha Rani (supra) and other decisions following the same, as the accident had taken place on 24.11.1991, i.e., much prior to coming into force of 1994 amendment. ", "For the reasons aforementioned, the impugned judgments cannot be sustained which are set aside accordingly. This appeal is allowed. In the facts and circumstances of this case, there shall be no order as to costs."], "relevant_candidates": ["0000887114"]} {"id": "0001540511", "text": ["PETITIONER: THE STATE OF UTTAR PRADESH AND OTHERS Vs. RESPONDENT: BABU RAM UPADHYA DATE OF JUDGMENT: 25/11/1960 BENCH: , K. BENCH: , K. GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N. MUDHOLKAR, J.R. CITATION: 1961 AIR 751 1961 SCR (2) 679 CITATOR INFO : F 1961 SC 773 (5,7) RF 1964 SC 600 (57,63,18) F 1965 SC 868 (4) R 1967 SC 356 (7) RF 1968 SC 224 (3) RF 1969 SC 903 (30) RF 1969 SC1108 (8) D 1970 SC 122 (12) D 1970 SC1244 (29) RF 1971 SC1403 (7) F 1971 SC2111 (7) E 1973 SC 883 (19) RF 1974 SC 794 (13) O 1974 SC2192 (50,51,53) R 1975 SC 446 (10) RF 1976 SC2433 (6) R 1977 SC 747 (6) R 1979 SC 52 (13) R 1979 SC1149 (19) RF 1980 SC2181 (104) RF 1981 SC 711 (11) F 1982 SC1407 (24) R 1983 SC 494 (8) RF 1983 SC 558 (20) O 1985 SC1416 (43,56, TO 58) RF 1986 SC 555 (6) RF 1988 SC 805 (10) D 1989 SC 811 (3,10) RF 1989 SC1160 (30) RF 1990 SC 820 (31) RF 1992 SC1033 (54) ACT: Public Servant--Police Officer, dismissal of--Police Regula- tions, whether mandatory--Disregard of, if invalidates disciplinary action--Authorities empowered to take action--If exercise Powers of Governor--Police Act, 1861 (V of 1861), s. 7--U. P. Police Regulations, para. 486--Constitution of India, Arts. 154, 309, 310, 311. HEADNOTE: The respondent was a sub-Inspector of Police. A complaint was received by the Superintendent of Police that the com- plainant was carrying currency notes of Rs. 650 in a bundle when he was stopped by the respondent and his person was searched, that the respondent opened the bundle of notes and handed over the notes one by one to one , who was with him and that returned the notes to him but on reaching home he found the notes short by Rs. 250. Proceedings under s. 7 of the Police Act were taken against the respondent on the charge of misappropriation of Rs. 250 and he was dismissed from service by an order of the Deputy Inspector General of Police. The respondent filed a writ petition before challenging the order of the dismissal on the ground that the authorities had acted in violation of Rule I of Para. 486 of the U. P. Police Regulation. This rule required that every information received by the police relating to the commission of a cognizable offence by a Police Officer shall be dealt with in the first place under Ch. XIV, Code of Criminal Procedure. held that the provisions of para. 486 of the Police Regulations had not been observed and that the proceedings taken under S. 7 of the Police Act were invalid and illegal and accordingly quashed the order of dismissal. The appellant contended (i) that the complaint did not make out any cognizable offence against the respondent and r. I of Para. 486 was not applicable in this case, (ii) that r. III of Para. 486 enabled the authorities to initiate departmental proceedings without complying with the provisions of r. I, (iii) that the Police Regulations made in exercise of the power conferred on the Government under the Police Act delegating the power of the Governor to dismiss at pleasure to a subordinate officer were only administrative directions for the exercise of the pleasure in a reasonable manner and any breach of the regulations did not confer any right or give a cause of action to the public servant, and (iv) that the regulations were only directory and the non-compliance with the rules did not invalidate the order of dismissal. 680 Held, (per , and , .) that the order of dismissal was illegal as it was based upon an enquiry held in violation of r. I of Para 486 of the Police Regulations. The facts alleged in the complaint made out a cognizable offence under s. 405 Indian Penal Code against the respondent, and the provisions of r. I of Para . 486 were applicable to it. A Police Officer making a search of a person was 'entrusted' with the money handed over by the person searched. Rule III of Para. 486 did not deal with cognizable offences, it dealt with offences falling only under s. 7 Police Act and to non-cognizable offences. Rule III did not provide an alternative procedure to that prescribed under r. I. The position with regard to the tenure of public servants and to the taking of disciplinary action against them under the present Constitution was as follows: (i) Every person who was a member of a public service described in Art. 310 of the Constitution held office during the pleasure of the President or the Governor. (ii) The power to dismiss a public servant at pleasure was outside the scope of Art. I54 and, therefore, could not be delegated by the Governor to a subordinate officer, and could be exercised by him only in the manner prescribed by the Constitution. (iii) This tenure was subject to the limitations or qualifi- cations mentioned in Art. 311. (iv ) or could not make a law abrogating or modifying this tenure so as to impinge upon the overriding power conferred upon the President or the Governor under Art. 310 , as qualified by Art. 311. (v) or could make a law regulating the conditions of service of such a member which included proceedings by way of disciplinary action, without affecting the powers of the President or the Governor under Art. 310 read with Art. 311. (vi) and the also could makea law laying down and regulating the scope and content of the doctrine of \"reasonable opportunity\" embodied in Art. 311 but the said law was subject to judicial review. (vii) If a statute could be made by within the foregoing permissible limits, the rules made by an authority in exercise of the power conferred thereunder would likewise be efficacious within the said limits. N. W. F. Province v. , A.I.R. 1949 P. C. 112, v. , (1895) A.C. 229, v. , (1896) A.C. 575, v. The King, (1934) A.C. 176, v. Secretary of , (1953) 2 All E.R. 490, , S.C.R. 786, , 681 S.C.R. 828, for India, (1936) L.R. 64 I.A. 40 and High Commissioner for India and High Commissioner for , (1948) L.R. 75 I.A. 225, referred to. The Police Act and the rules made thereunder constituted a self-contained code providing for the appointment of police officers and prescribing the procedure for their removal. Any authority taking action under the Police Act or the rules made thereunder must conform to the provisions thereof and if there was any violation of those provisions the public servant had a right to challenge the order of the authority if the rules were mandatory Paragraph 486 of the Police Regulations was mandatory and not directory. The rules were made in the interests of both the department and the police officers. The word used in para 486 was \"shall\" and in the context it could not be read as \"may\". , S.C.R. 104, , S.C.R. 533 and v , L.R. (1917) A.C. 170, referred to. Subject to the overriding power of the President or the Governor under Art. 310 , as qualified by Art. 311 , rules governing disciplinary proceeding could not be treated as administrative directions, but had the same effect as the provisions of the statute whereunder they were made, in so far as they were not inconsistent with the provisions thereof. The Governor did not exercise his pleasure through the officers specified in S. 7 of the Police Act, and the Governor's pleasure. could not be equated with the statutory power of the officers specified An inquiry under the Act had to be made in accordance with the provisions of the Act and the rules made thereunder. for India, L.R. 64 I.A. 40, High Commissioner for India and High Commissioner for , (1948) L.R. 75 I.A. 225, for India, (1936) L.R. 64 I.A. 55, , S.C.R. 1150 and , S.C.R. 1080, referred to. Per and , .-The provisions of para 486 were merely directory and a non-compliance therewith did not invalidate the disciplinary action taken against the respondent. All public servants, other than those excepted expressly by the Constitution, held office during the pleasure of the President or the Governor, and no law or rule framed under Art. 300 or Art. I54(2)(b) could cut down the content of the pleasure tenure in Art. 310 subject to Art. 31i. The Police Act could not stand higher than a law passed under Art. 309 or Art. 154(2)(b) and could not cut down the content of the pleasure tenure in Art. 310 682 The Police officers held office during the pleasure of the Governor and the only protection they could claim was the two guarantees contained in Art. 311. The rules framed under s. 7 Police Act would be of two kinds, namely (1) those which defined the jurisdiction of the four grades of officers specified in s. 7 to inflict particular kind of punishment on particular police officers of the subordinate ranks-such rules would be mandatory but they could not go against the provisions of Art. 311 , and (2) procedural rules. The procedural rules could be of two kinds: (i) those that prescribed the manner in which the guarantee contained in Art. 311(2) May be carried out-such rules would be mandatory, and (ii) other merely procedural rules-they could only be directory. The power of the Governor to dismiss was executive power of the and could be exercised under Art. 154(i) by the Governor himself directly or indirectly through officers subordinate to him. The officers specified in s. 7 of the Police Act were exercising the powers of the Governor to dismiss at pleasure and their powers were subject to the same limitations to which the Governor was subject. Whether it was delegation by the Governor himself or whether it was delegation by law under Art. 154(2)(b) or by the existing law, which must be treated as analogous to a law under Art. 154(2)(b ), the officer exercising the power of dismissal was only indirectly exercising the Governor's power to dismiss at pleasure. His order also was subject to the two fetters under Art. 311 and could not be subjected to any more fetters by procedural rules other than those framed for carrying out the objects of Art. 311(2). for India in Council, 64 I.A. 55, referred to. Paragraph 486 was not meant for the purpose of carrying out the object of Art. 311(2) and could not be mandatory and could not add a further fetter on the exercise of the power to dismiss at the pleasure of the Governor over and above the fetters contained in Art. 311. This rule was only meant to gather materials for the satisfaction of the authority concerned, whether to take action or not. As such para 486 was merely directory and a failure to comply therewith strictly or otherwise did not vitiate the disciplinary action. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 119 of 1959. Appeal by special leave from the judgment and order dated January 9, 1958, of (), Lucknow, in Civil Misc. Application No. 115 of 1955. ", "683 ", " and , for the appellants. , , , , and for the respondent. 1960. November, 25. The Judgment of , and , ., was delivered by , J., and that of and , ., was delivered by , J. ", "SUBBA RAO, J.-This is an appeal by special leave against the judgment of at Allahabad, Lucknow Bench, allowing the petition filed by the respondent under Art. 226 of the Constitution. ", "The respondent was appointed a Sub-Inspector of Police in December, 1948, and was posted at Sitapur in June, 1953. On September 6, 1953, the respondent went to village Madhwapur in connection with an investigation of a case of theft. On the evening of the said date when he was returning, accompanied by one , an ex-patwari of Mohiuddinpur, he saw one coming from the side of a canal and going hurriedly towards a field. As the movements of appeared to be suspicious and as he was carrying something in the folds of his dhoti, the respondent searched him and found a bundle containing currency notes. The respondent counted the currency notes and handed them over to for being returned to , who subsequently got them and went his way. Subsequently when counted the currency notes at his house, he found that they were short by Rs. 250. 's case is that the bundle when taken by the respondent contained notes of the value of Rs. 650, but when he counted them in his house they were only of the value of Rs. 400. On September 9, 1953 filed a complaint to , Sitapur, to the effect that the respondent and one had misappropriated a sum of its. 250. There is dispute in regard to the interpretation of the complaint. On receipt of the said complaint, made enquiries and issued a notice to the respondent to show cause why his integrity certificate should not be withheld, upon which the respondent submitted his explanation on October 3, 1953. Thereafter forwarded the file of the case to the Deputy Inspector General of Police, Central Range, U. P., who directed to take proceedings under s. 7 of the Police Act against the respondent. The departmental proceedings were started against the respondent; on November 2, 1953, a charge-sheet was served upon the respondent under s. 7 of the Police Act stating that there were strong reasons to suspect that the respondent misappropriated a sum of Rs. 250 from the purse of ; the respondent filed his explanation to the charge made against him; and ultimately held an enquiry and found on the evidence that the respondent was guilty of the offence with which he was charged. On January 2, 1954, the Superin- tendent of Police issued another notice to the respondent to show cause why he should not be reduced to the lowest grade of Sub-Inspector for a period of three years. In due course the respondent showed cause against the action proposed to be taken against him on a consideration of which , Sitapur, by his order dated January 16, 1954 reduced the respondent to the lowest grade of Sub-Inspector for a period of three years. When this order came to the notice of , U. P., on a consideration of the entire record, he came to the con- clusion that the respondent-should be dismissed from service and on October 19, 1954 he made an order to that effect. On February 28, 1955 the Inspector General of Police confirmed that order; and the revision filed by the respondent against that order to was also dismissed in August 1955. Thereafter the respondent filed a petition under Art. 226 of the Constitution before at Allahabad, Lucknow Bench, for quashing the said orders and the same was heard by a division bench consisting of and , JJ. The learned judges held that the provisions of para. ", "685 ", "486 of the Police Regulations had not been observed and, therefore, the proceedings taken under s. 7 of the Police Act were invalid and illegal. On that finding, they quashed the impugned orders; with the result that the order dismissing the respondent from service was set aside. The State Government, the Deputy Inspector General of Police, Lucknow, and the Inspector General of Police, Uttar Pradesh, Lucknow, have preferred the present appeal against the said order of . ", "We shall now proceed to consider the various contentions raised by learned counsel in the order they were raised and argued before us. ", "At the outset Mr. , learned counsel for the appellants, contended that there was no breach of the provisions of para. 486 of the Police Regulations. If this contention be accepted, no other question arises 'in this case; therefore, we shall deal with the same. The material part of para. 486 of the Police Regulations reads thus: ", "\"When the offence alleged against a police officer amounts to an offence only under section 7 of the Police Act, there can be no magisterial inquiry under the Criminal Procedure Code . In such cases, and in other cases until and unless a magisterial inquiry is ordered, inquiry will be made under the direction of the Superintendent of Police in accordance with the following rules: ", "I.Every information received by the police relating to the commission of a cognizable offence by a police officer shall be dealt with in the first place under Chapter XIV, Criminal Procedure Code , according to law, a case under the appropriate section being registered in the police station concerned................. This provision expressly lays down that every information received by the police relating to the commission of a cognizable offence by a police officer shall be dealt with in the first place under Ch. XIV of the Criminal Procedure Code . This provision will not apply if the information received by the police does not relate to the commission of a cognizable offence. Learned counsel contends that the information received in the present case does not relate to any offence committed by the respondent, much less to a cognizable offence. This is a point raised before us for the first time. This does not find a place even in the statement of case filed by the appellants. In it was not contended that the information did not disclose any offence committed by the respondent. Indeed, it was common case that the information disclosed an offence committed by the respondent, but it had been contended by the appellants that the misappropriation of the part of the money amounted to an offence under s. 403 of the Indian Penal Code, which is not a cognizable offence; and it was argued on behalf of the respondent that it amounted to an offence under s. 409 of the Indian Penal Code. The learned judges accepted the contention of the respondent. Even so, it is said that whatever might been the contentions of the parties, the information given by to clearly disclosed that no offence was alleged to have been committed by the respondent and that this Court would, therefore, be justified, even at this very late stage, to accept the contention of the appellants. But the contents of the said information do not in any way support the assertion. Paragraph 3 of the application given by to , Sitapur, reads thus: \"That on Sunday last dated 6th September, 1953 the applicant had with him the currency notes of Rs. 650. The opposite party as well as met the applicant on the west of Rampur near the Canal. The opposite-party said to the Sub-Inspector \"This man appears to be clad in rags but is possessed of considerable money.\" After saying this the person of the applicant was searched. The Sub-Inspector, having opened the bundle of notes, handed over the (notes) one by one to the opposite party.\" This statement clearly indicates that either the Sub-. Inspector or both the Sub- Inspector and searched the person of , that the Sub-Inspector took the bundle of notes and handed the same over, one by one, to for being returned to the applicant, and that out of Rs. 650 a sum of Rs. 250 was not returned to him. The facts alleged make out an offence against both the Sub-Inspector as well as . The mere fact that the respondent is not shown as one of the opposite parties in the application does not affect the question, for the information given in the application imputed the commission of an offence to both the respondent and . The notice issued by the Supe- rintendent of Police on November 2, 1953 to the respondent also charges him with an offence of misappropriation. It is stated that the said notice only says that had good reasons to suspect that the respondent misappropriated the sum of money and that it does not aver that he committed the offence of misappropriation. But what matters is 'that also understood from the information given and the enquiry conducted by him that the respondent had committed the offence. Reliance is placed upon paragraph 3 of the writ petition wherein the respondent herein stated that filed a complaint against and not against the respondent. As a fact that is correct in the sense that the respondent was not shown in that application as the opposite -party though in the body of that application definite allegations were made against the respondent. In the counter-affidavit filed by on behalf of the State it was clearly averred that on September 9, 1953 appeared before him and filed a petition to the effect fiat one and the respondent had misappropriated a sum of Rs. 250. Whatever ambiguity there might have been in the information ", "-we do not find any-this allegation dispels it and it is not open to the appellants at this stage to contend that the petition did not disclose any offence against the respondent. In the circumstances, we must hold that the information received by the police related to the commission of an offence by the respondent. ", "Even so, it is contended that the said offence is not a cognizable offence. It is said that there was no entrustment made by to the respondent and that, therefore, the offence did not fall under s. 409 of the Indian Penal Code, which is a cognizable offence, but only under s. 403 of the Indian Penal Code, which is not a cognizable offence. Section 405 of the Indian Penal Code defines \"criminal breach of trust\" and s. 409 thereof prescribes the punishment for the criminal breach of trust by a public servant. Under s. 405 of the Indian Penal Code, \"Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any person so to do, commits \"criminal breach of trust\". To constitute an offence under this section, there must be an entrustment of property and dishonest misappropriation of it. The person entrusted may misappropriate it himself, or he may wilfully suffer another person to do so. In the instant case the respondent, being a police officer, was legally entitled to search a person found under suspicious circumstances; and in handing over the bundle of notes to the police officer must have done so in the confidence that he would get back the notes from him when the suspicion was cleared. In these circumstances, there cannot be any difficulty in holding that the currency notes were alleged to have been handed over by to the respondent for a specific purpose, but were dishonestly misappropriated by the respondent or at, any rate he wilfully suffered to misappropriate the same. We, therefore, hold that if the currency notes were taken by the respondent in discharge of his duty for inspection and return, he was certainly entrusted with the notes within the meaning of s. 405 of the Indian Penal Code. If so, the information discloses a cognizable offence. We reject the first contention. ", "The second objection of learned counsel for the appellants is that sub-para. (3) of para. 486 of the Police Regulations enables the appropriate police authority to initiate the departmental proceeding without complying with the provisions of sub-para. (1) of para. 486. The ", "-relevant portion of para. 486 of the Police Regulations reads: ", "\"When the offence amounts to an offence only under section 7 of the Police Act, there can be no magisterial inquiry under the Criminal Procedure Code . In such cases, and in other cases until and unless a magisterial inquiry is ordered, inquiry will be made under the direction of the Superintendent of Police in accordance with the following rules:......... \" ", "Rule I relates to a cognizable offence, r. II to a non- cognizable. offence, including an offence under s. 29 of the Police Act, and r. III to an offence under s. 7 of the Police Act or a non-cognizable offence, including an offence under s. 29 of the Police Act. Rule III says: \"When a Superintendent of Police sees reason to take action on information given to him, or on his own knowledge or suspicion, that a police officer subordinate to him has committed an offence under section 7 of the Police Act or a non-cognizable offence (including an offence under section 29 of the Police Act) of which he considers it unnecessary at that stage to forward a report in writing to the District Magistrate under rule II above, he will make or cause to be made by an officer senior in rank to the officer charged, a departmental inquiry sufficient to test the truth of the charge. On the conclusion of this inquiry he will decide whether further action is necessary, and if so, whether the officer charged should be departmentally tried, or whether the District Magistrate should be moved to take cognizance of the case under the Criminal Procedure Code ...\" The argument is that the words \"an offence under s. 7 of the Police Act\" take in a cognizable offence and that, therefore, this rule provides for a procedure alternative to that prescribed under r. I. We do not think that this contention is sound. Section 7 of the Police Act empowers certain officers to dismiss, suspend or reduce any police officer of the subordinate rank whom they shall think remiss or negligent in the discharge of his duty, or unfit for the same. The grounds for punishment are comprehensive: they may take in offences under the Indian Penal Code or other penal statutes. The commission of such offences may also be a ground to hold that an officer is unfit to hold his office. Action under this section can, therefore, be taken in respect of, (i) offences only under s. 7 of the Police Act without involving any cognizable or noncognizable offences, that is, simple remissness or negli- gence in the discharge of duty, (ii) cognizable offences, and (iii) non-cognizable offences. Paragraph 486 of the Police Regulations makes this clear. It says that when the offence alleged against a police officer amounts to an offence only under s. 7 of the Police Act, there can be no magisterial inquiry under the Criminal Procedure Code . This part of the rule applies to an offence only under s. 7 of the Police Act i. e., the first category mentioned above. Rule I refers to a cognizable offence i. e., the second category, rule 11 to a non-cognizable offence i. e., the third category, and rule III applies to an offence under s. 7 of the Police Act and to a noncognizable offence. Though the word \"only\" is not mentioned in rule 111, the offence under s. 7 of the Police Act can, in the context, mean an offence only under s. 7 of the said Act i.e., an offence falling under the first category. So understood, the three rules can be reconciled. We, therefore, hold that, as the offence complained of in the present case is a cognizable offence, it falls under rule I and not under rule 111. We, therefore, reject this contention. ", "The third contention advanced by learned counsel for the appellants raises a constitutional point of considerable importance. The gist of the argument may be stated thus: In England, the service under the is held at the 's pleasure, unless the employment is for good behaviour or for a cause. But if there is a statute prescribing the terms of service and the mode of dismissal of the servant of the , the statute would control the pleasure of the . In India, the Constitution as well as the earlier Constitution Act s of 1915, as amended in 1919, and 1935 embodied the incidents of \"tenure at pleasure\" of His Majesty, or the President or the Governor, as the case may be, but did not empower the Legislatures under the earlier Acts and the and the Legislatures under the Constitution to make a law abrogating or modifying the said tenure; therefore, any law made by appropriate authorities conferring a power on any subordinate officer to dismiss a servant must be construed not to limit the power of His Majesty, the President or the Governor, as the case may be, but only to indicate that they would express their pleasure only through the said officers. The rules made in exercise of a power conferred on a -under a statute so delegating the power to a subordinate officer can only be administrative directions to enable the exercise of the pleasure by the concerned authorities in a reasonable manner and that any breach of those regulations cannot possibly confer any right on, or give a cause of action to, the aggrieved servant to go to a court of law and vindicate his rights. ", "Mr. , learned counsel for the respondent, in countering this argument contends that the constitution Acts in India embodied the incidents of the tenure of the 's pleasure in the relevant provisions and what the can do in England, the appropriate in India also can do, that is, \"the tenure at pleasure\" created by the Constitution Act s can be abrogated, limited or modified by law enacted by the appropriate legislative bodies. Alternatively he contends that even if the Police Act does not curtail the tenure at pleasure, the validly made that law and the validly made statutory rules in exercise of the powers confered under that Act and that, therefore, the appropriate authorities can only dismiss the respondent in strict compliance with the provisions of the Act and the Rules made thereunder. To appreciate the problem presented and to afford a satisfactory answer it would be convenient to consider the relevant provisions. The Act we are concerned with in this case is the Police Act , 1861 (Act V of 1861). Its constitutional validity at the time it was ,made was not questioned. Under s. 7 of the Police Act, as it originally stood, \"the appointment of all police officers other than those mentioned in B. 4 of this Act shall, under such rules as the local shall from time to time sanction, rest with the Inspector-General, Deputy Inspectors-General, Assistant Inspectors-General and District Superintendents of Police, who may, under such rules as aforesaid, at any time, dismiss, suspend or reduce any police-officer.\" That section was substituted by the present section in 1937 and later on some appropriate amend- ments were made to bring it in conformity with the Constitution. Under the amended section, \"Subject to such rules as the State may from time to time make under this Act, the Inspector-General, Deputy Inspectors- General, Assistant Inspectors-General and District Superintendent of Police may at any time dismiss, suspend or reduce any police officer of the subordinate ranks whom they shall think remiss or negligent in the discharge of his duty, or unfit for the same\". In exercise of the powers conferred on the by s. 46 of the Act, the made the U. P. Police Regulations prescribing the procedure for investigation and inquiry. We shall' deal with the Regulations at a later stage. ", "In the Government of India Act, 1915, as amended by the Act of 1919, for the first time, the doctrine of \"tenure at pleasure\" was introduced by s. 96-B . In exercise of the power conferred under sub-s. (2) certain classification rules were framed by the local Government. This Act was repealed by the Government of India Act, 1935, and the section corresponding to s. 96-B was s. 240(1) in the latter Act. Section 241(2) empowered, except as expressly provided by the Act, the Governor-General and the Governor to prescribe the conditions of service of the servants they were empowered to appoint. ", "The main difference between the Act of 1919 and that of 1935 was that in the former Act there was only one limitation on the 's pleasure, namely, that no person in the service might be dismissed by an authority subordinate to that by which he was appointed, whereas in the latter Act a second limitation was imposed, namely, that no such person should' be dismissed or reduced in rank until he had been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him: see s. 240 , sub-ss. (2) and (3). Another difference between the said two Acts was that while under the former Act all the services were placed in the same position, -under the latter Act special provision was made for the police force prescribing that the conditions of service of the subordinate ranks of the various police forces should be such as might be determined by or under the Acts relating to those forces respectively-vide s. 243 . By the Constitution, the Act of 1935 was repealed, and, with certain changes in phraseology, cls. (1) and (2) of Art. 310 took the place of sub-ss. (1) and (4) of s. 240 respectively, and Art. 309 took the place of s. 241(2) . Under Art. 313 , \"Until other provision is made in this behalf under this Constitution, all the laws in force immediately before the commencement of this Constitution and applicable to any public service or any post which continues to exist after the commencement of this Constitution, as an all-India service or as service or post under the or a shall continue in force so far as consistent with the provisions of this Constitution\". The result is that the Police Act and the Police Regulations, made in exercise of the powers conferred on the under that Act, which .were preserved under s. 243 of the of India Act, 1935, continue to be in force after the Con- stitution so far as they are consistent with the provisions of the Constitution. ", "It is common case, as the contentions of learned counsel disclose, that the Act and the Regulations framed thereunder were constitutionally valid at the inception and that they are also consistent with the provisions of the Constitution. The difference between the two contentions lies in the fact that according to one His Majesty's pleasure cannot be modified 88 by a statute, according to the other it is subject to statutory provisions. The relevant provisions of the Constitution read thus: ", "Article 309: \" Subject to the provisions of this Constitution, Acts of the appropriate may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any : Provided that it shall be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a or such person as he may direct in the case of services and posts in connection with the affairs of the , to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the appropriate under this article, and any rules so made shall have effect subject to the provisions of any such Act.\" Article 310: \" Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service or holds any post connected with defence or any Civil Post under the Union holds office during the pleasure of the President, and every person who is a member of a civil service of a or holds any civil post under a holds office during the pleasure of the Governor of the .\" ", "Under Art. 309 the appropriate may regulate the recruitment and conditions of service of persons appointed to public services. Under Art. 310 every person who is member of a public service described therein holds office during the pleasure of the President or the Governor, as the case may be. The words \"conditions of service\" in Art. 309 in their comprehensive sense take in the tenure of a civil servant: see v. (1). Therefore, \"the tenure at pleasure\" is also one of the conditions of service. But Art. 309 opens out with a ", "(i) A.I.R. (1949) P.C. 112. ", "695 ", "restrictive clause, namely, \"Subject to the provisions of this Constitution\", and if there is no restrictive, clause in Art. 310 , there cannot be any difficulty in holding that Art. 309 is subject to the provisions of' Art 310; with the result that the power of the to lay down the conditions of service of persons appointed to public services would be subject to \"the tenure at pleasure\" under Art. 310. In that event, any law made by the could not affect the over-riding power of the President or the Governor, as the case may be, in putting an end to the tenure at their pleasure. Would the opening words of the clause in Art. 310 , namely, \"Except as expressly provided by this Constitution\", make any difference in the matter of interpretation? It should be noticed that the phraseology of the said clause in Art. 310 is different from that in Art. 309. If there is a specific provision in some part of the Constitution giving to a Government servant a tenure different from that provided for in Art. 310 , that Government servant is excluded from the operation of Art. ", "310. The said words refer, inter alia, to Arts. 124, 148, 218 and 324 which provide that the Judges of , the Auditor General, the Judges of the High Courts and the Chief Election Commissioner shall not be removed ", "-from their offices except in the manner laid down in those Articles. If the provisions of the Constitution specifically prescribing different tenures were excluded from Art. 310 , the purpose of that clause would be exhausted and thereafter the Article would be free from any other restrictive operation. In that event, Arts. 309 and 310 should be read together, excluding the opening words in the latter Article, namely, \"Except as expressly provided by this Constitution\". Learne counsel seeks to confine the operation of the opening words in Art. 309 to the provisions of the Constitution which empower other authorities to make rules relating to the conditions of service of certain classes of public servants, namely, Arts. 146(2), 148(5) and 229(2). That may be so, but there is no reason why Art. 310 should be excluded therefrom. It follows that while Art. 310 provides for a tenure at pleasure of the President or the Governor, Art. 309 enables the or the executive, as the case maybe, to make any law or rule in regard, inter alia, to conditions of service without impinging upon the overriding power recognized under Art. 310. ", "Learned counsel for the respondent contends that this construction is inconsistent with that prevailing in the English law and that the intention of the framers of the Constitution could not have been to make a radical departure from the law of England. The law of England on the doctrine of \"tenure at pleasure\" has now become fairly crystallized. In England, all servants of the hold office during the pleasure of the ; the right to dismiss at pleasure is an implied term in every contract of employment of the , this doctrine is not based upon any prerogative of the , but on public policy; if the terms of appointment definitely prescribe a tenure for good behaviour or expressly provide for a power, to determine for a cause, such an implication of a power to dismiss at pleasure is excluded, and an Act of Parliament can abrogate or amend the said doctrine of public policy in the same way as it can do in respect of any other part of common law. The said propositions are illustrated in the following decisions: v. (1), v. (2), v. The King(3), v. Secretary of (4). This English doctrine was not incorporated in its entirety in the Indian enactments-vide of Bihar v. (5), (6). Section 96-B of the Government of India Act, 1915, for the first time in 1919, by amendment, statutorily recognized this doctrine, but it was made subject to a condition or s qualification, namely, that no person in that service might be dismissed by any authority subordinate to that by which he was appointed. Section 240 of the Act of 1935 imposed another limitation, namely, that a reasonable opportunity of showing cause against the action proposed to be taken in ", "(i) [1895] A.C. 229. ", "(3) [1934] A.C. 176. ", "(5) [1954] S.C.R. 786. ", "(2) [1896] A.C. 575. ", "(4) (1953) 2 All E R. 490. ", "(6) [1958] S.C.R. 828. ", "697 ", "regard to a person must be given to him. But neither of the two Acts empowered the appropriate to make a law abolishing or amending the said doctrine. The Constitution of India practically incorporated the provisions of ss. 240 and 241 of the Act of 1935 in Arts. 309 and 310. But the Constitution has not made \"the tenure at pleasure\" subject to any law made by the appropriate . On the other hand, as we have pointed out, Art. 309 is expressly made subject to \"the tenure at pleasure\" in Art. 310. Nor the attempt of learned counsel for the respondent to discover such a power in the in the Entries of the appropriate Lists of the Seventh Schedule to the Constitution can be legally sustained. He referred, inter alia, to Entry 70 of List I and Entry 41 of List II. It is not disputed that can make law for the organization of the police and for the prevention and detection of crime. But under Art. 245 of the Constitution such a power is subject to the provisions of the Constitution and, therefore, is subject to the provisions of Art. 310. ", "Nor can we imply such a power in or the from Art. 154(2)(b) of the Constitution. Under Art. 154 , \"the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution\", and under el. 2(b) thereof, \"nothing in this Article shall prevent or the of the State from conferring by law functions on any authority subordinate to the Governor.\" The argument is that a power to terminate the service at pleasure under Art. 310 is a part of the executive power of the State, that power under Art. 154 can be exercised by the Governor directly or through officers subordinate to him, and that under Art. 154(2)(b) the or the of the State can confer the same power on any authority subordinate to the Governor or, at any rate, can make a law prescribing that the Governor shall exercise the said pleasure through a particular officer. ", "698 ", "We cannot agree either with the premises or the conclusion sought to be based on it. The first question is whether the power of the Governor under Art. 310 to terminate the services of a Government servant at pleasure is part of the executive power of the under Art. 154 of the Constitution. Article 154 speaks of the executive power of the vesting in the Governor; it does not deal with the constitutional powers of the Governor which do not form part of the executive power of the . Article 162 says that, subject to the provisions of the Constitution, the executive power of the shall extend to matters with respect to which the of the has power to make laws. If the of the has no power to make a law affecting the tenure at pleasure of the Governor, the said power must necessarily fall outside the scope of the executive power of the . As we will presently show, the has no such power and, therefore, it cannot be a part of the executive power of the . That apart, if the said power is part of the executive power in its general sense, Art. 162 imposes another limitation on that power, namely, that the said executive power is subject to the provisions of the Constitution and therefore, subject to Art. 310 of the Constitution. In either view, Art. 310 falls outside the scope of Art. 154 of the Constitution. That power may be analogous to that conferred on the Governor under Arts. 174, 175 and 176. Doubtless the Governor may have to exercise the said power whenever an occasion arises, in the manner prescribed by the Constitution, but that in itself does not make it a part of the executive power of the or enable him to delegate his power. ", "Even on the assumption that the power under Art. 310 is executive power within the meaning of Art. 154 , it does not make any difference in the legal position so far as the present case is concerned. Article 310 of the Constitution says that unless expresssly provided by the Constitution to the contrary, every civil servant holds office during the pleasure of the Governor subject to the limitations prescribed under Art. 311. Can it be said that Art. 154(2)(b) expressly provides for a different tenure? Can it be said that the said Article confers on the or the a power higher than that conferred on them under Art. 245 of the Constitution ? It only preserves the power of the , which it has under the Constitution, to make a law conferring functions on an authority subordinate to the Governor. That power under Art. 245 is not unlimited, but is subject to the provisions of the Constitution and there- fore subject to Art. 310 thereof. ", "It is then said that if the appellants' contention were not accepted, it would lead to conflict of jurisdiction: while the Governor has the power under Art. 310 to dismiss a public servant at his pleasure, a statute may confer a power on a subordinate officer to dismiss a servant only subject to conditions; a subordinate officer functioning under an Act may not be able to dismiss a servant, but the Governor may be able to do so under similar circumstances; a subordi- nate officer may dismiss a servant, but the Governor may order his continuance in office. ", "This argument is based upon the misapprehension of the scope of Art. 309 of the Constitution. A law made by the appropriate or the rules made by the President or the Governor, as the case may be, under the said Article may confer a power upon a particular authority to remove a public servant from service; but the conferment of such a power does not amount to a delegation of the Governor's pleasure. Whatever the said authority does is by virtue of express power conferred on it by a statute or rules made by competent authorities and not by virtue of any delegation by the Governor of his power. There cannot be conflict between the exercise of the Governor's pleasure under Art. 310 and that of an authority under a statute, for the statutory power would be always subject to the overriding pleasure of the Governor. ", "This conclusion, the argument proceeds, would throw a public servant in India to the mercy of the executive Government while their compeers in England can be protected by legislation against arbitrary actions of the . This apprehension has no real .basis, for, unlike in England, a member of the public service in India is constitutionally protected at least in two directions: ", "(i) he cannot be dismissed by an authority subordinate to that by which he was appointed; (ii) he cannot be dismissed, removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. A condition similar to the first condition in Art. 311 found in s. 96-B of the Government of India Act, 1919, was hold by in for India (1) to have a statutory force, and the second condition, which is only a reproduction of that found in sub-section (2) of s. 240 of the Government of India Act, 1935, was held in High Commissioner for India and High Commissioner for (2) as mandatory qualifying the right of the employer recognized in sub- section (1) thereof. These two statutory protections to the Government servant are now incorporated in Art. 311 of the Constitution. This Article imposes two qualifications on the exercise of the pleasure of the President or the Governor and they quite clearly restrict the operation of the rule embodied in Art. 310(1)- vide the observations of , , in 's case (3). The most important of these two limitations is the provision prescribing that a civil servant shall be given a reasonable opportunity of showing cause against the -action proposed to be taken in regard to him. As this condition is a limitation on the \"tenure at pleasure\", a law can certainly be made by defining the content of \"reasonable opportunity\" and prescribing the procedure for giving the said opportunity. The appropriate and can test the validity of such a law on the basis whe- ther the -provisions prescribed provide for such an opportunity, and, if it is valid, to ascertain whether the reasonable opportunity so prescribed is really given to a particular officer. It may be that the (1) (1936) L.R. 64 I.A. 40. (2) (1948) L.R. 75 1.A. 225. (3) S.C.R. 828, 839. ", "701 ", "framers of the Constitution, having incorporated in our Constitution the \"tenure at pleasure\" unhampered by legislative interference, thought that the said limitations and qualifications would reasonably protect the interests of the civil servants against arbitrary actions. The discussion yields the following results: (1) In India every person who is a member of a public service described in Art. 310 of the Constitution holds office during the pleasure of the President or the Governor, as the case may be, subject to the express provisions therein. (2) The power to dismiss a public servant at pleasure is outside the scope of Art. 154 and, therefore, cannot be delegated by the Governor to a subordinate officer, and can be exercised by him only in the manner prescribed by the Constitution. (3) This tenure is subject to the limitations or qualifications mentioned in Art. 311 of the, Constitution. (4) The or the of States cannot make a law abrogating or modifying this tenure so as to impinge upon the overriding power conferred upon the President or the Governor under Art. 310 , as qualified by Art. 311. (5) The or the of States can make a law regulating the conditions of service of such a member which includes proceedings by way of disciplinary action, without affecting the powers of the President or the Governor under Art. 310 of the Constitution read with Art. 311 thereof. (6) The and the also can make a law laying down and regulating the scope and content of the doctrine of \"reasonable opportunity\" embodied in Art. 311 of the Constitution; but the said law would be subject to judicial review. (7) If a statute could be made by within the foregoing permissible limits, the rules made by an authority in exercise of the power conferred thereunder would likewise be efficacious within the said limits. ", "What then is the effect of the said propositions in their application to the provisions of the Police Act and the rules made thereunder? The Police Act of 1861 continues to be good law under the Constitution. Paragraph 477 of the Police Regulations shows that the rules in Chapter XXXII thereof have been framed under s. 7 of the Police Act. Presumably, they were also made by the Government in exercise of its power under s. 46(2) of the Police Act. Under para. 479(a) the Governor's power of punishment with reference to all officers is preserved; that is to say, this provision expressly saves the power of the Governor under Art. 310 of the Constitution. \"Rules made under a statute must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act, and are to be judicially noticed for all purposes of construction or obligation\": see \"On the Interpretation of Statutes\", 10th edn., pp. 5051. The statutory rules cannot be described as, or equated with, administrative directions. If so, the Police Act and the rules made thereunder constitute a self-contained code providing for' the appointment. of police officers and prescribing the procedure for their removal. It follows that where the appropriate authority takes disciplinary action under the Police Act or the rules made thereunder, it must conform to the provisions of the statute or the rules which have conferred upon it the power to take the said action. If there is any violation of the said provisions, subject to the question which we will presently consider whether the rules are directory or mandatory, the public servant would have a right to challenge the decision of that authority. ", "Learned counsel for the appellants relied upon the following decisions of and this Court in support of his contention that the said rules are administrative directions: for India (1), for India (2), High Commissioner for India and High Commissioner for (3), (4), and (5). In (1) (1936) L.R. 64 I.A. 40. ", "(3) (1948) L.R. 75 I.A. 225. ", "(2) (1936) L.R. 64 I.A. 55. ", "(4) [1954] S.C.R. 1150. ", "(5) [1958] S.C.R. 1080. ", "703 ", "case (1) a reader of was dismissed and in the suit filed by him against the Secretary, of for India he complained, inter alia, that the dismissal was contrary to the statute inasmuch as it was not preceded by any such inquiry as was prescribed by rule XIV of the Civil Services Classification Rules made under s. 96B(2) of the Government of India Act. Under s. 96B of the said Act, every person in civil service holds office during the pleasure of His Majesty. Sub-section (2) of that section empowers the Secretary of for India to make rules laying down, among others, the conditions of service, and sub-s. (5) declares that no rules so made shall be construed to limit or abridge the power of the Secretary of in to deal with the case of any person in the civil service of the in India in such manner as may appear to him to be just and equitable. - On a construction of these provisions held that His Majesty's pleasure was paramount and could not legally be controlled or limited by the rules. Two reasons were given for the conclusion, namely, (i) s. 96B in express terms stated that the office was held during the pleasure and there was no room for the implication of a contractual term that the rules were to be observed; and (ii) sub-s. (2) of s. 96B and the rules made careful provisions for redress of grievances by administrative process and that sub-s. (5) reaffirmed the superior authority of the Secretary of in over the civil service. It may be noticed that the rules framed in exercise of the power conferred by the Act was to regulate the exercise of His Majesty's pleasure. The observations were presumably coloured by the doctrine of \"tenure at pleasure\" obtaining in England, namely, that it could only be modified by statute, influenced by the princi- ple that the rules made under a statute shall be consistent with its provisions and, what is more, based upon a construction of the express provisions of the Act. These observations cannot, in our opinion, be taken out of their context and applied to the provisions of our Constitution and the Acts of our Legislatures in derogation of the well settled principles of (1) (1936) L. R. 64 I. A. 55. ", "704 ", "statutory construction. In 's case (1) a police officer was dismissed by an authority subordinate to that by which he had been appointed. The appeal was heard along with that in case (2) and the judgments in both the appeals were delivered on the same day. distinguished case (2) with the following observations at p. 53: ", "\"It is manifest that the stipulation or proviso as to dismissal is itself of statutory force and stands on a footing quite other than any matters of rule which are of infinite variety and can be changed from time to time.\" These observations do not carry the matter further an our remarks made in connection with case (2) would equally apply to this case. case (3) turns upon sub-s. (3) of s. 240 of the Government of India Act, 1935. Again made a distinction between the rules and the provisions of the Act and ruled that sub-ss. (2) and (3) of s. 240 indicated a qualification or exception to the antecedent provisions in sub-s. (1) of s. 240 . This decision only adopted the reasoning in the earlier decision. The remarks made by us in connection with case (2) would equally apply to this decision. This Court in case (4) incidentally noticed the observations of in case (2) and observed that the rules, which were not incorporated in a statute, did not impose any legal restriction upon the right of the to dismiss its servants at pleasure. This Court was not laying down any general proposition, but was only stating the gist of the reasoning in case (2). , C.J., if we may say so, correctly stated the scope of the rule in case (2) in the decision in case (5), when he stated at p. 1091- \"The position of the Government servant was, therefore, rather insecure, for his office being held during the pleasure of the under the Government of India Act, 1915, the rules could not override (1) (1936) L.R. 64 I.A. 40. ", "(3) (1948) L.R. 75 I.A. 225. ", "(2) (1936) L.R. 64 I.A. 55. ", "(4) [1954] S.C.R. 1150. ", "(5) [1958] S.C.R. 1080. ", "705 ", "or derogate from the statute and the protection of the rules could not be enforced by action so as to nullify the statute itself.\" ", "To state it differently, the of India Act, 1915, as amended in 1919, and that of 1935 expressly and clearly laid down that the tenure was at pleasure and therefore the rules framed under that Act must be consistent with the Act and not in derogation of it. These decisions and the observations made therein could not be understood to mark a radical departure from the fundamental principle of construction that rules made under a statute must be treated as exactly as if they were in the Act and are of the same effect as if contained in the Act. There is another principle equally fundamental to the rules of construction, namely, that the rules shall be consistent with the provisions of the Act. The decisions of on the provisions of the earlier Constitution Act s can be sustained on the ground that the rules made in exercise of power conferred under the Acts cannot override or modify the tenure at pleasure provided by s. 96B or s. 240 of the said Acts, as the case may be. Therefore, when the paramountcy of the doctrine was conceded or declared by the statute, there might have been justification for sustaining the rules made under that statute in derogation thereof on the ground that they were only administrative directions, for otherwise the rules would have to be struck down as inconsistent with the Act. In such a situation, if the statute was valid-it would be valid in so far as it did not derogate from the provisions of Art. 310 , read with Art. 311-the rules made thereunder would be as efficacious as the Act itself. So long as the statute and the rules made thereunder do not affect the power of the Governor-in the present case the Governor's pleasure is expressly preserved- they should be legally enforceable. In this context the decisions of the different in India are cited at the . It would not serve any purpose to consider every one of them in detail. It would suffice if their general trend be noticed. They express two divergent views: one line relies upon the observations of in case (1) and lays down that all statutory rules vis-a-vis the disciplinary proceedings taken against a servant are administrative directions, and the other applies the well settled rules of construction and holds that the appropriate authority is bound to comply with the mandatory provisions of the rules in making an inquiry under a particular statute. A close scrutiny of some of the decisions discloses a distinction implied, though not expressed, between statutory rules defining the scope of reasonable opportunity and those governing other procedural steps in the disciplinary process. In our view, subject to the overriding power of the President or the Governor under Art. 310 , as qualified by the provisions of Art. 311 , the rules governing disciplinary proceedings cannot be treated as administrative directions, but shall have the same effect as the provisions of the statute whereunder they are made, in so far a,-, they are not inconsistent with the provisions thereof We have already negatived the contention of learned counsel that the Governor exercises his pleasure through the officers specified in s. 7 of the Police Act, and therefore, it is not possible to equate the Governor's pleasure with that of the specified officers' statutory power. If so, it follows that the inquiry under the Act shall be made in accordance with its provisions and the rules made thereunder. ", "Then learned counsel contends that even if the said rules have statutory force, they are only directory and the non- compliance with the rules will not invalidate the order of dismissal made by the appropriate authority. Before we consider the principles governing the question whether the rules are mandatory or directory, it would be convenient at this stage to notice broadly the scope and the purpose of the inquiry contemplated by the rules. Section 2 of the Police Act constitutes the police establishment; s. 7 empowers specified officers to (1) L.R. 64 I.A. 55. ", "707 ", "punish specified subordinate officers who are remiss or negligent in discharge of their duties or unfit for the same; s. 46 enables the Government to make rules. to regulate the procedure to be followed by the magistrate and police officers in discharge of any duty imposed on them by or under the Act; under s. 7 , read with s. 46 of the Police Act, the Police Regulations embodied in chapter XXXII were framed. Paragraph 477 of the Regulations says that the rules in that chapter have been made under s. 7 of the Police Act and apply only to officers appointed under s. 2 of the Police Act and that no officer appointed under that section shall be punished by executive order otherwise than in the manner provided in that chapter. Paragraph 478 prescribes the nature of the punishment that can be imposed on the delinquent officers. Paragraph 479 empowers specified officers to punish specified subordinate officers. Paragraph 483 gives the procedure to be followed in the matter of the inquiry against a police officer. It reads: \"Subject to the special provision contained in paragraph 500 and to any special orders which may be passed by the Governor in particular cases a proceeding against a police officer will consist of- ", "A-A magisterial or police inquiry, followed, if this inquiry shows the need for further action, by B-A judicial trial, or C-A departmental trial, or both, consecutively.\" Paragraph 484 declares that the nature of the inquiry in any particular -case will vary according to the nature of the offence. If the offence is cognizable or non-cognizable, the inquiry will be according to Schedule II of the Criminal Procedure Code . If the information is received by the District Magistrate, he may in exercise of his powers under the Criminal Procedure Code either, (1) make or order a magisterial inquiry; or (2) order an investigation by the Police. Paragraph 485 reads: ", "\"When a magisterial inquiry is ordered it will be made in accordance with the Criminal Procedure Code and the Superintendent of Police will have no direct concern with it until the conclusion of judicial proceedings or until and unless the case is referred to him for further disposal, but he must give any assistance to the inquiring magistrate that he may legally be called upon to give and he must suspend the accused should this become necessary under paragraph 496.\" Paragraph 486 says that there can be no magisterial inquiry under the Criminal Procedure Code when the offence alleged against a police officer amounts to an offence only under s. 7 of the Police Act, and it provides further that in such cases, and in, other cases until and unless a magisterial inquiry is ordered, inquiry will be made under the direction of the Superintendent of Police in accordance with the rules given thereunder. Under rule I thereof, \"Every information received by the police relating to the commission of a cognizable offence by a police officer shall be dealt with in the first place under Chapter XIV, Criminal Procedure Code , according to law, a case under the appropriate section being registered in the police station concerned\". There are six provisos to that rule. Rule II provides for the inquiry of a non-cognizable offence; and rule III prescribes the procedure in regard to an offence only under s. 7 of the Police Act or a non- cognizable offence of which the Superintendent of Police considers unnecessary at that stage to forward a report in writing to the District Magistrate. Paragraph 488 deals with a judicial trial and para. 489 with a departmental trial. Paragraph 489 says: ", "\"A police officer may be departmentally tried under section 7 of the Police Act- ", "(1) after he has been tried judicially; ", "(2) after a magisterial inquiry under the Criminal Procedure Code ; ", "(3) after a police investigation under the Criminal Procedure Code or a departmental enquiry under paragraph 486,III above.\" ", "There are other provisions dealing with the manner of conducting the inquiries and other connected matters. The rules provide for the magisterial and police inquiry followed, if the inquiry showed the need for further action, by a judicial trial or a departmental trial, or both, consecutively. In the case of cognizable offences the Superintendent of Police is directed to investigate under chapter XIV of the Criminal Pro- p, cedure Code and in the case of non-cognizable offences in the manner provided in rule II of para. 486, and in the case of an offence only under s. 7 of the Police Act or a non- cognizable offence in the manner provided under rule III of para. 486. After one or other of the relevant procedure is followed, the Superintendent of Police is empowered to try a police officer departmentally. ", "The question is whether rule I of para. 486 is directory. The relevant rule says that the police officer shall be tried in the first place under chapter XIV of the Criminal Procedure Code . The word \"shall\" in its ordinary import is \"obligatory\"; but there are many decisions wherein the courts under different situations construed the word to mean \"may\". This Court in (1) dealt with this problem at p. 1125 thus: \"It is well established that an enactment in form mandatory might in substance be directory and that the use of the word \"shall\" does not conclude the matter.\" ", "It is then observed: ", "\"They (the rules) are well-known, and there is no need to repeat them. But they are all of them only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context.\" ", "The following quotation from \"On the Construction of Statutes\", at p. 516, is also helpful in this connection: \"The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the (1) [1955] 1 S.C.R. 1104. ", "90 ", "710 ", "consequences which would follow from construing it the one way or the other......\" ", "This passage was approved by this Court in (1). In Craies on Statute Law, 5th edition, the following passage appears at p. 242: \"No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the by carefully attending to the whole scope of the statute to be construed.\" A valuable guide for ascertaining the intention of the is found in on \"The Interpretation of Statutes\", 10th edition, at p. 381 and it is: \"On the other hand, where the prescriptions of a statute relate to the performance of a public duty and where the invalidation of acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and government of those on whom the duty is imposed, or, in other words, as directory only. The neglect of them may be penal, indeed, but it does not affect the validity of the act done in disregard of them.\" ", "This passage was accepted by in the case of v. (2 ) and by this Court in (1). ", "The relevant rules of interpretation may be briefly stated thus: When a statute uses the word \"shall\", prima facie, it is mandatory, but the may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the the may consider, inter alia, the nature and the design of the statute, and the consequences which (1) [1958] S.C.R. 533, 545. ", "(2) L.R. [1917] A.C.770. ", " ", "would follow from construing it the one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstance, namely, that the statute provides for a contingency of the non-compliance with the provisions, the fact that the non-compliance 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. Now what is the object of rule I of para. 486 of the Police Regulations? In our opinion, it is conceived not only to enable to gather information but also to protect the interests of subordinate officers against whom departmental trial is sought to be held. After making the necessary investigation under chapter XIV of the Criminal Procedure Code , may as well come to the conclusion that the officer concerned is innocent, and on that basis drop the entire proceedings. He may also hold that it is a fit case for criminal prosecution, which, under certain circumstances, an honest officer against whom false charges are framed may prefer to face than to submit himself to a departmental trial. Therefore,the rules are conceived in the interest of the department as well as the officer. From the stand point of the department as -well as the officer against whom departmental inquiry is sought to be intiated, the preliminary inquiry is very important and it serves a real purpose. Here the setting aside of the order of dismissal will not affect the public in general and the only consequence will be that the officer will have to be proceeded against in the manner prescribed by the rules. What is more, para. 487 and para. 489 make it abundantly clear that the police investigation under the Criminal Procedure Code is a condition precedent for the departmental trial. Paragraph 477 emphasizes that no officer appointed under s. 2 of the Police Act shall be punished by executive order otherwise than in the manner provided under chapter XXXII of the Police Regulations. This is an imperative injunction prohibiting inquiry in non-compliance with the rules. Paragraph 489 only empowers the holding of a departmental trial in regard to a police officer only after a police investigation under the Criminal Procedure Code . When a rule says that a departmental trial can be held only after a police investigation, it is not permissible to hold that it can be held without such investigation. For all the foregoing reasons, we hold that para. 486 is mandatory and that, as the investigation has not been held under chapter XIV of the Criminal Procedure Code , the subsequent inquiry and the order of dismissal are illegal. ", "For the foregoing reasons we hold that, as the respondent was dismissed without complying with the provisions of para. 486(1), the order of dismissal is illegal and that is right in setting aside the order of dismissal. In the result, the appeal fails and is dismissed with costs. WANCHOO, J.-We regret we are unable to agree that the appeal be dismissed. ", " (respondent) was a sub-inspector of police who was appointed in December, 1948. In 1953, he was posted at Sitapur. On September 6, 1953, he was returning from a village called Madhwapur, when he saw a man who was subsequently found to be coming from the side of a canal and going hurriedly into a field. The movements of roused his suspicion. One , an ex-patwari, was also with the sub-inspector. was called and searched, and a bundle containing currencynotes was found on him. The sub-inspector took the bundle and counted the notes and handed them over to . in his turn handed over the notes to . Thereafter , who is an old-man, almost blind, went away. When he reached his house, he found that there was a shortage of Rs. 250. He then made a complaint to the Superintendent of Police on September 9, 1953, in which he gave the above facts. An inquiry was made by the Superintendent of Police and ultimately, departmental proceedings under s. 7 of the Police Act were taken against the respondent. These proceedings resulted in his dismissal and thereupon the respondent applied to under Art. 226 of the Constitution. ", "The main contention of the respondent was that r. 486 of the Police Regulations framed under s. 7 of the Police Act was not observed and therefore the departmental proceedings taken against him were illegal. The reply of the appellant was two-fold: in the first place, it was urged that r. 486 did not apply as there was no report of a cognizable offence against the sub-inspector; and in the next place, it was urged that the rules contained in the Police Regulations were only administrative rules and even if there was non- compliance with any of them, it would not affect the departmental proceedings taken against the respondent, provided there was no breach of the guarantees contained in Art. 311 of the Constitution. ", " held that there was a report of a cognizable offence under s. 409 of the Indian Penal Code against the respondent and therefore the procedure provided by r. 486 ought to have been followed. It further held that r. 486 had been framed under s. 7 of the Police Act and was a statutory provision, which had the force of law. As such, following the earlier view taken by in two other cases it held that a dismissal as a result of departmental proceedings which took place without complying with r. 486 would be illegal. In consequence, the writ petition was allowed. The appellant then applied for a certificate to enable it to appeal to this , which was refused. Thereupon special leave was prayed for from this , which was granted; and that is how the matter has come up before us. ", "Mr. on behalf of the appellant urges the same two points before us. So far as the first point is concerned, we are of opinion that there is no force in it. There is no doubt that in the complaint made by , the name of the respondent was not shown in the heading; but from the facts disclosed in the body of the complaint it is clear that the sub-inspector searched the person of and recovered a bundle containing currency-notes. He did so obviously under the authority vested in him as a police officer. When therefore he was satisfied that there was no reason to take any further action against , it was his duty to see that the entire amount taken by him from on search was returned to him (). was right in the view that where property is taken away with the intention that it will continue to be the property of the person from whose possession it has been taken away, there will be an entrustment of the property to the person taking it away, and if. subsequently the person taking it away converts it to his own use or suffers some other person to do so, there will be criminal breach of trust and not merely criminal misappropriation. Thus an offence under s. 409 of the Indian Penal Code appears to have been committed prima facie on the facts of this case. As an offence under s. 409 is a cognizable offence, r. 486 of the Police Regulations would apply. This brings us to the main point in the present appeal. ", "Sec. 7 of the Police Act under which r. 486 has been framed is in these terms:- ", "\"Subject to such rules as the State Government may from time to time make under this Act, the Inspector-General, Deputy Inspectors-General, Assistant Inspectors-General and District Superintendents of Police may at any time dismiss, suspend or reduce any police-officer -of the subordinate ranks whom they shall think remiss or negligent in the discharge of his duty or unfit for the same; or may award any one or more, of the following punishments to any police-officer of the subordinate ranks, who shall discharge his duty in a careless or negligent manner, or who, by any act of his own shall render himself unfit for the discharge thereof, name- ", "(a) fine to any amount not exceeding one month's pay; (b) confinement to quarters for a term not exceeding fifteen days, with or without punishment, drill, extra guard, fatigue or other duty; ", "(c) deprivation of good-conduct pay; ", "715 ", "(d) removal from any office of distinction or special emolument;\". ", "It gives power to four grades of police officers to dismiss, suspend or reduce any police officer of the subordinate ranks whom they think remiss or negligent in the discharge of his duty or unfit for the same. It also provides for infliction of four other kinds of punishment by these four grades of officers on any police officer of the subordinate ranks who discharges his duty in a careless or negligent manner or who by any act of his own renders himself unfit for the discharge thereof. In the present case we are concerned with dismissal and what we shall say hereafter should be taken to be confined to a case of dismissal. Sec- tion 7 shows that the power of dismissal conferred by it on the four grades of police officers is to be exercised subject to such rules as may from time to time make under the Police Act . The contention on behalf of the respondent is that the power of dismissal has to be exercised subject to rules and therefore, when r. 486 of the Police Regulations (framed under s. 7 ) provided a certain procedure to be followed with respect to cases in which a cognizable offence was involved it was not open to the authority concerned to disregard that procedure. In effect, it is urged that r. 486 is a mandatory provision and non- compliance with it would invalidate the departmental proceedings. It is not in dispute in this case that the procedure provided by r. 486 was not followed. That procedural provision is that where a report of a cognizable crime is made against a police officer belonging to the subordinate ranks, it has to be registered as provided in Chapter XIV of the Code of Criminal Procedure and investigated as provided thereunder. Thereafter the authority concerned has to decide whether to send the case for trial before a court of law or to take departmental proceedings. In this case no report was registered as provided under Chapter XIV of the Code of Criminal Procedure and no investigation was made as provided in that Chapter. All that happened was that the Superintendent of Police to whom had complained inquired into the complaint of and thereafter decided to hold a departmental inquiry under s. 7 of the Police Act against the respondent. ", "The main contention on behalf of the appellant is that the Rules framed under s. 7 of the Police Act are administrative rules and in any case they are only directory and non- compliance with them would not vitiate the subsequent proceedings unless there is a breach of the guarantee contained in Art. 311 of the Constitution, as all public servants hold their office at the pleasure of the President or the Governor, as the case may be, other than those expressly excepted under the Constitution. Reliance in this connection is placed on the case of for India in (1). This brings us to a consideration of the tenure on which public servants hold office. The position in England is that all public servants hold office at the pleasure of His Majesty, that is to say, their service was terminable at any time without amuse: (see v. (2 )). By law, however, it is open to to prescribe a different tenure and the King being a party to every Act of is understood to have accepted the change in the tenure when he gives assent to such law: (see v. (3)). This principle applied in India also before the Government of India Act, 1915, was amended by the addition of s. 96-B therein. Section 96-B for the first time provided by statute that every person in the civil service of the held office during His Majesty's pleasure, subject to the provisions of the Government of India Act and the rules made thereunder and the only protection to a public servant against the exercise of pleasure was that he could not be dismissed by any authority subordinate to that by which he was appointed. It was this section, which came for consideration before the Privy in case (1) and the Privy held that in spite of the words \".subject to the rules made under the Government of India Act,\" employment was not of a (1) (1936) L.R. 64 I.A. 55 (2) A.C. 229. (3) A.C. 575. ", "717 ", "limited and special kind during pleasure with an added contractual term that the procedure prescribed, by the Rules must be observed; it was by the express terms of s. 96-B held \"during His Majesty's pleasure\" and no right of action as claimed by existed. further held that the terms of s. 96-B assured that the tenure of office, though at pleasure, would not be subject to capricious or arbitrary action but would be regulated by the rules which were manifold in number, most minute in particularity and all capable of change; but there was no right in the -public servant enforceable by action to hold his office in accordance with those rules and he could therefore be dismissed notwithstanding the failure to observe the procedure prescribed by them. The main point which was urged in 's case (1) was that under r. XIV of the Civil Services Classification Rules no public servant could be dismissed, removed or reduced in rank except after a properly recorded departmental inquiry. In 's case (1) the departmental inquiry prescribed by the rules was found not to have been held. Even so, held that the words used in s. 96-B could not and did not cut down the pleasure of His Majesty by rules though it was observed that the terms of the section contained a statutory and solemn assurance, that the tenure of office, though at pleasure., would not be subject to capricious or arbitrary, action, but would be regulated by rule. It was further added that supreme care should be taken that this assurance is carried out in the letter and in the spirit. further held that in' the case before it, there had been a serious and complete failure to adhere to important and indeed fundamental rules, and mistakes of a serious kind had been made and wrongs had been done which called for redress; even so; they were of the view that as a matter of law that redress was not obtainable from courts by action..,. ", "This was the position under the Government of India Act 1915. There was however a material change in the Government of India Act, 1935. So far, there (1) (1936) L.R. 64 I. A. 55. ", "91 ", "718 ", "was one protection to a public servant, namely, that he could not be dismissed by an authority subordinate to that by which he was appointed. In the Government of India Act, 1935, s. 240(1) laid down that-- ", "\" except as expressly provided by this Act, every person who is a member of a civil service of the in India...... holds office during His Majesty's pleasure.\" The words of this section are different from those of s. 96- B and the tenure of all public servants other than those expressly provided for was to be during His Majesty's pleasure. There were, however, two safeguards provided by sub-ss. (2) and (3) of s. 240 . The first was the same (namely, that no public servant will be dismissed by an officer subordinate to that who appointed him); but a further exception was added to the pleasure tenure, namely, no public servant shall be dismissed until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. This protection came to be considered by in High Commissioner for India and High Commissioner for Pakistan v. 1. M. Lall (1) and it was held that it was a mandatory provision and qualified the pleasure tenure and provided a condition precedent to the exercise of power by His Majesty provided by sub-s. (1) of s. 240 . Thus by the Government of India Act, 1935, there were two statutory guarantees to public servants against the exercise of the pleasure of his Majesty; but it is clear from s. 240 of the Government of India Act, 1935, that the pleasure of His Majesty to dismiss was not otherwise subject to rules framed under the subsequent provisions of the Government of India Act appearing in Chapter 11 of Part X dealing with public services. ", "This position continued till we come to the Constitution. Article 310(1) of the Constitution provides for what was contained in s. 240(1) of the Government of India Act, 1935, and is in these terms: ", "\"(1) Except as expressly provided by this Constitution, every person who -is a member of a defence (1) (1948) L.R. 75 I.A. 225. ", " ", "service or of a civil service of the or of an all India service or holds any post connected with defence, or any civil post under the , holds office during the pleasure of the President, and every person who is a member of a civil service of a or holds any civil post under a holds office during the pleasure of the Governor of the .\" ", "It will be clear therefore that all public servants except as expressly provided by the Constitution hold their office during the pleasure of the President or the Governor, as the case may be. Article 311 then provides for two guarantees and is similar in terms to s. 240(2) and (3) of the Government of India Act, 1935 and the two guarantees are the same, (namely, (i) that no person shall be dismissed or removed by an authority subordinate to that by which he was appointed, and (ii) no such person shall be dismissed or removed or reduced in rank until he has been given a reason- able opportunity of showing cause against the action proposed to be taken in regard to him). (1), this Court held that Art. 311 was in the nature of a proviso to Art. 310 , that it provides two constitutional guarantees cutting down the pleasure of the President or the Governor, as the case may be, and that it was a mandatory provision which had to be complied with before the pleasure provided in Art. 310 can be exercised. Mr. for the respondent urges that in view of the words of Art. 310 statute or statutory rules can also cut down the nature of the pleasure tenure provided by Art. 310 in the same way as in England an Act of cuts down the ambit of His Majesty's pleasure in the matter of dismissal. He relies on the words \"as expressly provided by this Constitution\" and urges that it is open to the legisla- ture to cut down the pleasure tenure by law or to provide for its being affected by statutory rules. In this connection he relies on Art. 309 as well as Art. 154 of the Constitution. Now, Art. 309 begins with the words \"subject to the provisions of this Constitution\" land lays down that \"Acts of the appropriate may regulate the recruitment, and conditions of (1) S.C.R. 828. ", "720 ", "service of person appointed, to public services and posts in connection with the affairs of the or of any State\". The proviso to Art. 309 lays down that \"it shall be competent for the President or the Governor as the case may be to make rules relating to recruitment and conditions of service until provision in that behalf is made by or under an Act of the appropriate \". It will be clear immediately that Art. 309 is subject to the provisions of the Constitution and therefore subject to Art. 310 and therefore, any law passed or rules framed under Art. 309 must be subject to Art. 310 and cannot in any way affect the pleasure-tenure laid down in Art. 310. The words \"except as expressly provided by this Constitution\" appearing in Art. 310 clearly show that the only exceptions to the pleasure tenure are those expressly contained in the Constitution and no more. These exceptions, for example, are contained inter alia in Arts. 124. 148, 280 and 324 and also in Art. 310 (2). Therefore, unless there is an express provision in the Constitution cutting down the pleasure tenure, every public servant holds office during the pleasure of the President or the Governor, as the case may be. We cannot accept the argument that a law passed under Art. 309 prescribing conditions of service would become an express provision of the Constitution and would thus cut down the pleasure tenure contained in Art. 310. As pointed in case (1), the rules framed under Art. 309 or the laws passed thereunder amount to a statutory and solemn assurance that the tenure of office though at pleasure will not be subject to capricious or arbitrary action but will be regulated by rule. But if the rules or the law define the content of the guarantee contained in Art. 311 (2) they may to that extent be mandatory but only because they carry out the guarantee contained in Art. 311 (2). Excepting this, any law or rule framed under Art. 309 cannot cut down the pleasure tenure as provided in Art. 310. ", "The same in our opinion applies to a law passed under Art. 154 (2)(b) which authorises or the legislature of a State to confer functions on any (1) (1936) L.R. 64 I.A. 55. ", "721 ", "authority subordinate to the Governor. If any law is passed conferring on any authority the power to dismiss or remove or reduce in rank, that law cannot cut down the content of the pleasure tenure as contained in Art. 310; that law would be passed under Art. 245 and that article also begins with the words \"subject to the provisions of this Constitution\". Therefore, the law passed under Art. 154 (2) (b) would also in the same way as the law under Art. 309 be subject to the pleasure tenure contained in Art. 310 and cannot cut down the content of that tenure or impose any further fetters on it except those contained in Art. 311. The position therefore that emerges from the examination of the relevant Articles of the Constitution is that all public servants other than those who are excepted expressly by the provisions of the Constitution hold office during the pleasure of the President or the Governor, as the case may be, and that no law or rule passed or framed under Art. 309 or Art. 154 (2) (b) can cut down the content of the pleasure tenure as contained in Art. 310 subject to Art. 311. With this basic position in our Constitution, let us turn to the Police Act with which we are concerned. Section 7 thereof lays down that four grades of officers will have power to dismiss, suspend or reduce any police-officer of the subordinate ranks subject to such rules as may from time to time make under the Police Act . Though the Police Act is a pre-constitutional law which has continued under Art. 372 of the Constitution, it cannot in our opinion stand higher than a law passed under Art. 309 or Art. 154 (2) (b) and out down the content of the pleasure tenure as contained in Art. 310. The police officers of the subordinate ranks are not expressly excluded from the operation of the pleasure tenure by any provision of the Constitution; they, therefore, hold office during the pleasure of the Governor and the only protection that they can claim are the two guarantees contained in Art. 311. It is true that s. 7 lays down that the four grades of officers empowered to dismiss will act according to rules framed by ; but that does not in our opinion mean that these rules could introduce any further fetter on the pleasure tenure under which the police officers of the subordinate ranks are in service. It was necessary to provide for the framing of rules because the section envisages conferment of, powers of punishment of various kinds on four grades of officers relating to various cadres of police officers in the subordinate ranks. It was left to the rules to provide which four grades of officers would dismiss police officers of which subordinate rank or would give which punishment to a police officer of which subordinate rank. Such rules would in our opinion be mandatory as they go to the root of the jurisdiction of the four grades of police officers empowered to act under s. 7 . But further rules may be framed under s. 7 to guide these police officers how to act when they proceed to dismiss or inflict any other punishment on police officers of the subordinate ranks. These rules of procedure, however, cannot all be mandatory, for if they were so they would be putting further fetters than those provided in Art. 311 on the pleasure of the Governor to dismiss a public servant. of course, if any of the rules framed under s. 7 carry out the purposes of Art. 311(2 ), to that extent they will be mandatory and in that sense their contravention would in substance amount to contravention of Art. 311 itself. If this were not so, it would be possible to forge further fetters on the pleasure of the Governor to dismiss a public servant and this in the light of what we have said above is clearly not possible in view of the provisions of the Constitution. On the other hand, it will not be possible by means of rules framed under s. 7 to take away the guarantee provided by Art. 311(1 ), which lays down that no public servant shall be dismissed by an authority subordinate to that by which he was appointed. If any rule under s. 7 , for example, lays down otherwise it will clearly be ultra vires in view of Art. 311(1). The rules therefore that are framed under s. 7 would thus be of two kinds, namely (1) those which define the jurisdiction of four grades of officers to inflict a particular kind of punishment on a particular police officer of the subordinate rank-they will be mandatory for they go to the root of the jurisdiction of the officer exercising the power, but even these rules cannot go against the provisions of Art. 31 1 (1); and (2) procedural rules, which again may be of two kinds. Some of them may prescribe the manner in which the guarantee contained in Art. 311 (2) may be carried out and if there are any such rules they will be mandatory. The rest will be merely procedural and can only be directory as otherwise if they are also mandatory further fetters on the power of the Governor to dismiss at his pleasure contained in Art. 310 would be forged and this is not permissible under the Constitution. It is from this angle that we shall have to consider 486. ", "Before, however, we come to r. 486 itself, we may dispose of another argument, namely, that the four grades of officers who have the power to dismiss under s. 7 are exercising the statutory authority vested in them and are not exercising the Governor's pleasure of dismissal under Art. 310 and therefore their action in dismissing an officer is subject to all the rules framed for their guidance. We are of opinion that this argument is fallacious. Article 310 defines the pleasure tenure and by necessary implication gives power to the Governor to dismiss at pleasure any public servant subject to the exceptions contained in Art. 310 and also subject to the guarantees contained in Art. ", "311. This power of the Governor to dismiss is executive power of the State and can be exercised under Art. 154(1) by the Governor himself directly or indirectly through officers subordinate to him. Thus it is open to the Governor to delegate his power of dismissal to officers subordinate to him; but even when those officers exercise the power of dismissal, the Governor is indirectly exercising it through those to whom he has delegated it and it is still the pleasure of the Governor to dismiss, which is being exercised by the subordinate officers to whom it may be delegated. Further though the Governor may delegate his executive power of dismissal at pleasure to subordinate officers he still retains in himself the power to dismiss at pleasure if he thinks fit in a particular case in spite of the delegation. There can be no question that where a delegation is made, the authority making the delegation retains in itself what has been delegated. Therefore, even where a subordinate officer is exercising the power to dismiss he is indirectly exercising the power of the Governor to dismiss at pleasure and so his power of dismissal can only be subject to the same limitations to which the power of the Governor would be subject if he exercised it directly. ", "But it is said that in the present case the power has not been delegated by the Governor under Art. 154(1) and that it had been conferred on those police officers by law. In our opinion, that makes no difference to the nature of the power, which is being exercised by these four grades of officers under the Police Act . As we have already said Art. 154(2)(b) gives power to or the legislature of a State by law to confer functions on any authority subordinate to the Governor. When the function of dismissal is conferred by law on any authority subordinate to the Governor it is nothing more than delegation of the Governor's executive power to dismiss at pleasure by means of law and stands in no better position than a delegation by the Governor himself under Art. 154(1). Whether it is delegation by the Governor himself or whether it is delegation by law under Art. 154(2)(b) or by an existing law, which must be treated as analogous to a law under Art. 154(2)(b ), the officer exercising the power of dismissal is only indirectly exercising, the Governor's power to dismiss at pleasure and his order of dismissal has the same effect as the order of the Governor to dismiss at pleasure. Therefore, his order also is only subject to the two fetters provided in Art. 311 of the Constitution and cannot be subjected to any more fetters by procedural rules other than those framed for carrying out the object of Art. 311(2). Therefore, when the four grades of officers proceed to dismiss any police officer of the subordinate rank under s. 7 of the Police Act, they are merely exercising. the power of the Governor to dismiss at pleasure indirectly; and the only fetters that can be placed on that power are those contained in the Constitution, namely, Art. 311. ", "725 ", "We may in this connection refer once again to the case of (1) where the dismissal was by an, officer subordinate to the Governor of Madras; but' that dismissal was also held to be an indirect exercise I of His Majesty's pleasure to dismiss, and that is why it was held that if r. XIV of the Classification Rules was not complied with, a public servant had no right of action against an order dismissing him at His Majesty's pleasure. Therefore, whenever a subordinate officer exercises the power to dismiss, whether that power is delegated by the Governor, or is delegated under a law made under Art. 154(2)(b) or under an existing law analogous to that, he is merely exercising indirectly the power of the Governor to dismiss at pleasure and his action -is subject only to the two guarantees contained in Art. 311. The fact therefore that the police officer in this case made the order of dismissal by virtue of s. 7 will make no difference and he will be deemed to be exercising the power of the Governor to dismiss at pleasure by delegation to him by law of that power. We may add that even where there is delegation by law of the power of the Governor to dismiss at pleasure, the power of the Governor himself to act directly and dismiss at pleasure cannot be taken away by that law, for that power he derives from Art. 310 of the Constitution. The present case therefore must be judged on the same basis as any case of dismissal directly by the Governor and would only be subject to the two limitations contained in Art. 311. ", "We now come to r. 486. This rule, as we have already indicated, provides that if there is any complaint of the commission of any cognizable crime by a police officer, it must be registered in the relevant police station, under Chapter XIV of the Code of Criminal Procedure and investigated in the manner provided by that Chapter. After the investigation is complete, it is open to the authority concerned, be it the Superintendent of Police or the District Magistrate, to decide whether to proceed in a court of law (1) (1936) L.R. 64 I.A. 55. ", "92 ", "726 ", "or to hold a departmental inquiry or do both, though in the last case the departmental inquiry must take place only after the judicial trial is over. The first question then that arises is whether r. 486 is meant to carry out the purpose of Art. 311(2). As we read r. 486, we cannot see that it is meant for that purpose; it only provides for a police investigation under Chapter XIV of the Code of Criminal Procedure. The police officer making an investigation under Chapter XIV is not bound to examine the person against whom he is investigating, though there is nothing to prevent him from doing so. Nor is the person against whom an investigation is going on under Chapter XIV bound to make a statement to the police officer. In these circumstances, the purpose of an investigation under Chapter XIV is not relevant under Art. 311(2) which says that a public servant shall not be dismissed without giving him a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Therefore, r. 486 not being meant for the purpose of carrying out the object of Art. 311 (2) cannot be mandatory and cannot add a further fetter on the exercise of the power to dismiss or remove at the pleasure of the Governor over and above the guarantees contained in Art. 311. ", "It appears to us that the object of r. 486 is that the authority concerned should first make a preliminary inquiry to find out if there is a case against the officer complained against either to proceed in a court or to take departmental action. The investigation prescribed by r. 486 is only for this purpose. Incidentally it may be that after such an investigation, the authority concerned may come to the conclusion that there in no case either' to send the case to court or to hold a departmental inquiry. But that in our opinion is what would happen in any case of complaint against a public servant in any department of Government. No authority entitled to take action against a public servant would straightaway proceed to put the case in court or to hold a departmental inquiry. It seems to us axiomatic if a complaint is received against any public servant of any department, that the authority concerned would first always make some kind of a preliminary inquiry to satisfy itself whether there is any case for taking action at all; but that is in our opinion for the satisfaction of the authority and has nothing to do with the protection afforded to a public servant under Art. 311. Rule 486 of the Police Regulations also in our opinion is meant for this purpose only and not meant to carry out the object contained in Art. 311(2). The opportunity envisaged by Art. 311(2) will be given to the public servant after the the authority has satisfied itself by preliminary inquiry that there is a case for taking action. Therefore, r. 486 which is only meant to gather materials for the satisfaction of the authority concerned, whether to take action or not, even though a statutory rule cannot be considered to be mandatory as that would be forging a further fetter than those contained in Art. 311 on the power of the Governor to dismiss at pleasure. We are therefore of opinion that r. 486 is only directory and failure to comply with it strictly or otherwise will not vitiate the subsequent proceedings. We may incidentally indicate two further aspects of the matter. In the first place, if the argument is that the Governor must exercise the pleasure himself so that only the two limitations provided in Art. 311 may come into play; it appears that the Governor has exercised his pleasure in this case inasmuch as he dismissed the revisional application made to him by the respondent. There appears no reason to hold that the Governor exercises his pleasure only when he passes the original order of dismissal but not otherwise. Secondly the fact that r. 486 contains the word \"shall\" is not decisive on the point that it is mandatory: (see Crawford on Statutory Construction, p. 519, para. 262). In view of what we have said already, the context shows that r. 486 can only be directory. If so, failure to observe it strictly or otherwise will not invalidate the subsequent departmental proceedings. ", "This brings us to the last point which has been urged in this case; and that is whether there was substantial compliance with r. 486. We have already pointed out that there was no strict compliance with r. 486 as no case wag registered on the complaint of and no investigation was made under Chapter XIV of the Code of Criminal Procedure. But there is no doubt in this case that before the Superintendent of Police gave the charge- sheet to the respondent in November, 1953, which was the beginning of the departmental proceedings against the respondent, he made a preliminary inquiry into the complaint of and was satisfied that there was a case for proceeding against the respondent departmentally. In these circumstances it appears to us that the spirit of r. 486 was substantially complied with and action was only taken against the respondent when on a preliminary inquiry the Superintendent of Police was satisfied that departmental action was necessary. Even if r. 486 had been strictly complied with, this is all that could have happened. In these circumstances we are of opinion that r. 486 which in our opinion is directory was substantially complied with in spirit and therefore the subsequent departmental proceedings cannot be held to be illegal, simply because there was no strict compliance with r. 486. therefore in our opinion was wrong in holding that the subsequent departmental inquiry was illegal and its order quashing the order of dismissal on this ground alone cannot be sustained. We would therefore allow the appeal. ", "BY COURT-In accordance with the opinion of the majority, this appeal is dismissed with costs. ", "729"], "relevant_candidates": ["0000070419", "0000174941", "0000480602", "0000546415", "0001135972", "0001270113", "0001450722", "0001483878", "0001640660"]} {"id": "0001540821", "text": ["JUDGMENT , J. ", "1. , the third respondent in O. P. (M.V.) No. 774/1981 before , Ernakulam is the appellant. ", "2. On a perusal of the memorandum of appeal it is clear that the grounds urged therein are gounds which can be availed of only by the insured. ", "3. The counsel for the claimant therefore argued that the appeal was not maintainable. Dilating on this argument the counsel submitted that was not entitled to take any defence which is not specified in Sub-section (2) of Section 96 of The Motor Vehicles Act, 1939, for short, The Act . Before we consider this case of the claimant we shall briefly state the arguments advanced by the counsel for the appellant. The counsel submits that the appeal may be treated as one filed on behalf of the insured and that is possible in view of Section 110-C(2A) of Chapter VIII of the Act. Had that not been the position there was no need for the to allow the appellant to cross-examine the witnesses 'with permission', the counsel submits. He has a further case that in any event, in view of Clause (2) of the conditions incorporated in the policy, the 'appellant has every right to take up the defence, the insured ordinarily can take in a case like this. ", "4. We shall now consider the argument based on Section 110-C(2A) . Section 110-C(2A) reads:-- ", "\"Where in the course of any inquiry, is satisfied that-- ", "(i) there is collusion between the person making the claim and the person against whom the claim is made, or ", "(ii) the person against whom the claim is made has failed to cbntest the claim, it may, for reasons to be recorded by it in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made\". ", "This section provides that where in the course of any enquiry is either satisfied that there was collusion between the claimant and the person against whom the claim was made or the person against whom the claim was made had failed to contest the claim; then, the , for reasons to be recorded in writing, can direct that the insurer who will be liable in respect of the claim shall be impleaded as a party to the proceeding and the insurer so impleaded has the right to contest the claim on all or any of the grounds that are available to the insured. ", "5. This sub-section would suggest that an order under this section enabling an insurer to contest the claim on all or any of the grounds that are available to the insured, can be passed by the only as a sequel to the order directing impleadment of the insurer, he would pass on his being satisfied that either there is collusion between the claimant and the insured or the insured has failed to contest the claim, the counsel representing the con-testing respondents submit. We are not impressed by this argument. This sub-section, in our view, was introduced to safeguard the interests of the insurer which, going by Section 96(2) is not entitled to take any defence which is not specified therein. Apart from Section 96(2) , an insurer had no right to get itself impleaded as a party to the action by the claimant against the insured causing the injury. This right is a statutory right. While conferring this right, Sub-section 2 of Section 96 has imposed certain restrictions in regard to the defences, the insurer can take. The insurer is not entitled to take any defence which is not specified in that sub-section. In short the only method of avoiding the liability provided for under Sub- section 2 is setting up the defences enumerated therein. ( . AIR 1959 SC 1331). The restriction thus imposed on the defences made it impossible for the insurer to contest the claim not properly contested by the insured. The intention of the legislature thus is clear that the sub-section is meant to safeguard the interest of the insurer. The objective of the sub-section could be achieved only if the insurer is allowed to contest the claim on all or any of the grounds available to the insured. However a literal adherence to the words used in the section namely that \"an insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest\" would result in the insurer who had already been impleaded under Section 96(2) , not getting a chance to contest the claim on all or any of the grounds [available to the insured even if it is established that the insured is hand and glove with the claimant and as such not contesting the claim. A grammatical or literal interpretation of these words, in our view, would lead to manifest absurdity. In such circumstances a construction not quite strictly grammatical or literal can be adopted. (See Craies on Statute Law, 17th Edn., pages 87-88). We therefore are of the view that the insurer who is already a party to the claim petition (having been impleaded under Section 96(2) can also avail of this defence. Such an insurer accordingly can move the under this sub-section and obtain the requisite permission to contest the ;claim on all or any of the grounds, the insured would take. If the insurer makes an application in this regard, the shall consider the same on merits after notice to the claimant and insured and pass appropriate orders in writing enabling the insurer to contest the claim on the grounds available to |the insured. In the present case there is nothing on record to show that the insurerappellant has obtained such permission from the and if that be so the insurer-appellant is not entitled to contest the claim on the grounds that are available only to the, insured. The above argument of the learned counsel therefore is rejected. ", "6. We, nonetheless are constrained to consider yet another argument of the learned counsel namely, that in any event the appellant is entitled to contest the claim raising the grounds the insured alone can raise, in view of Clause (2) of the conditions incorporated in the policy. Clause (2) reads :-- ", "\"No admission offer promise payment or indemnity shall be made or given by or on behalf of the insured without the written consent of the Company which shall be, entitled if it so desires to take over and conduct in the name of the the defence or settlement of any claim or to prosecute in the name of the for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the Company may require\". ", "Construing an identical clause, of this Court in v. , (1987) 2 Ker LT 817 no doubt, has observed that the said clause enables the Insurance company to contest the claim on all or any of the grounds, the insured alone could raise, notwithstanding the restrictions imposed by Sub-Section (2) of Section 96 . This observation of is based on a decision of in . , 1974 Acc CJ 234: (AIR 1974 Madras 318). while holding so, has made reference to the decision of in , AIR 1959 SC 1331, On going through the following observation of this court we are of the view that the above observation is obiter: ", "\"There is some force in this argument of the learned counsel for . ", "However, we do not go into that question since we feel that the decision reported in , AIR 1959 SC 1331, may not be applicable to the case in hand\". ", "In our view the decision of does not lend support to the view taken by which provides the basis for the above observation of . A reference in this connection to the following observations of in case, is profitable (at p. 1335):-- ", "\"There is another ground on which the learned Solicitor-General supported the contention that all defences are open to an insurer excepting those taken away by Sub-section (3). He said that before the Act came into force, an injured person had no right of recourse to the insurer and that it was Section 96(1) that made the judgment obtained by the injured person against the assured binding on the insurer and gave him a right against the insurer. He then said that that being so, it is only fair that a person sought to be made bound by a judgment should be entitled to resist his liability under it by all defences which he can in law advance against the passing of it. Again, we find the contention wholly unacceptable. The Statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship .. . \". ", " thereafter stated as follows (at p. 1335):-- ", "\"We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do\". ", " made the above observation (underlined portion of the excerpt) at a time when Section 110-C(2A) was not there. Whatever that be, the positive declaration of namely \"the Statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship\" disentitles the appellant to rely on Clause (2) of the Insurance policy, and contend for the position that the said clause reserves its right to contest the claim on all or any of the grounds that are available to the insured. Sub-section 2A of Section I10-C, as construed by us, entitled the insurer to contest the claim on all or any of the grounds available to the insured provided the grants the requisite permission in terms of the said subsection to the insurer to take up the said defence, There is another aspect that should be borne in mind while considering this question and it is this: The policy issued by the insurer is a policy of insurance in respect of Third-party risk, arising out of the use of motor vehicles, such as complies with the requirements of Chapter VIII of the Act and includes unless the context requires otherwise, a cover note. The policy therefore should be one that complies with the requirements Chapter VIII of the Act. That means any clause or condition in the policy can have force only subject to the provisions contained in Chapter VIII of the Act. Clause 2 of the policy extracted above therefore should be read and understood in the light of Sub-section 2A of Section 110-C. This clause, to the extent to which it runs counter to the above subsection is liable to be ignored. It therefore follows that an insurer with the permission of the alone can contest the claim on all or any of the grounds, the insured can raise against the claim. ", "In the light of what is stated above we are of the view that the appeal is not maintainable. ", "The appeal fails. Accordingly the same is dismissed. No costs."], "relevant_candidates": ["0000135147", "0000473715"]} {"id": "0001541615", "text": ["REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.6228-6229 OF 2002 ...Appellant Versus and others ...Respondents JUDGMENT ", " J : ", " ", "1. As all the cases involve similar questions of fact and law, they were taken up for hearing together and are being disposed of by this common judgment. ", " ", "2. We may, however notice the fact of the matter involved in Civil Appeal Nos.6228-6229 of 2002. ", " Appellant is (). It is engaged in the business of generation of electricity. It, for the purpose of setting up of a Thermal Power Station at Village Sarna in the District of Ghaziabad in the State of Uttar Pradesh, submitted a proposal to the State of Uttar Pradesh for acquisition of lands situated in Village Dadri, Tehsil Ghaziabad, District Ghaziabad. ", " ", "3. Pursuant or in furtherance of the said request, a Notification was issued in terms of Section 4 of the Land Acquisition Act, 1894 (for short `the Act') notifying the intention of to acquire 105 Bighas 2 Biswas and 16 Biswanis (equivalent to 65.7125 acres) of lands situated at the aforementioned village. It was published in on 8th September, 1984 ", "4. On the premise that generation of electricity was extremely urgent and National Capital Region faced acute shortage of electricity, the emergency provisions contained in Sections 17(1) and 17(4) of the Act were invoked. A declaration in terms of Section 6 of the Act was issued on 26th September, 1984. As the provisions of sub-section (4) of Section 17 of the Act were applied, notices were issued on 27th October, 1984 under Section 9 of the Act to the claimants for payment of compensation in respect of the acquired land. ", " ", "5. However, admittedly prior to taking over possession of land under the emergency powers, the Collector disbursed 80% of the amount of compensation determined in terms of Section 17(3A) of the Act. A possession certificate was issued by the Collector on 16th January, 1984, which reads as under :- ", " ", "\" POSSESSION CERTIFICATE LAND PERMANENT REQUIRED FOR THE PLANNED Industrial Construction of NTPC Plant, District Ghaziabad through , Ghaziabad Certified that I on behalf of the Collector, Ghaziabad have on this day the 16.11.1984 taken over the possession of the land detailed below comprising an area 105 B - 2Bs-16B or 6751.3 acres and (not legible (name not ligible) of D.L.A.O's Office to hand over the possession of the same land to , Ghaziabad. ", "Through Sri. D.V. (not ligible), village Sarna, Muradnagar, Pargana Jalalabad, District, Ghaziabad. ", "Sd/- ", "(District Land Acquisition Officer, Ghaziabad) Notification u/s. 6 :- 7574/P-3-84-23-26 Land P-84__264-84 published on 29.9.84. ", "Certified that I on behalf of the Manager, , Ghaziabad have to take over possession of the abovementioned land through ______________________ today.\" ", "Khasra numbers and area of the plots, possession whereof had been taken, were specified therein. ", " ", "6. Despite the same, the appellant contended that it had obtained the requisitioned physical possession of land admeasuring 10.215 acres only and the rest of the land continued to remain in possession of the land owners. ", "It is stated that made recommendations that the choice of place for setting up a Thermal Power Station, having regard to its proximity to the National Capital being incorrect, the site thereof should be shifted. Pursuant thereto or in furtherance thereof, the site of the plant was shifted from Sarna, Murad Nagar to Dadri Tehsil. However, the Land Acquisition Officer despite the same proceeded to determine the amount of compensation payable for the acquisition of land. ", "7. An Award was made on 24th September, 1986. ", "A reference in terms of Section 18 of the Act was made which was answered by the learned Additional District Judge, Ghaziabad by a order dated 22nd October, 1993 determining the amount of compensation @ Rs.155/- per sq. yards and Rs.115/- per sq. yds. in respect of two references made separately before it. . ", " ", "8. First appeals were preferred thereagainst in February, 1984 by before . Inter alia on the premise that possession of the entire land of 65.713 acres had not been obtained, the District Magistrate was approached for issuance of a notification denotifying the acquisition of the balance area i.e. for withdrawal of acquisition of land admeasuring 55.498 acres. ", " ", "9. By its letter dated 24th February, 1986, submitted a proposal as regards denotification of the land, which reads as under :- ", "\" Kindly refer to our letter No.08/GM/13 dated January 8, 1986, on the above subject, addressed to District Land Acquisition Officer and copy endorsed to you (copy enclosed for ready reference). In continuation of para 2 of that letter this is to inform you that there are five cases in which delivery of possession is shown to have been given. These are of villages Sarna, Khurrampur, Sultanpur, Jalalpur and Mohiuddinpur. In Sarna, advance compensation has been paid to most of the persons affected while in Khurrampur only a few persons have been paid the advance compensation. In cases of Sultanpur, Jalalpur and Khurrampur villages - we did not get physical possession and the land owners continue to be in possession their lands even now. In many cases, their crops are standing on the land in question. Further, it may be added that the Land Acquisition Amendment Act 1984 came into force w.e.f. 24.9.1984. As per sub-section (3A) to Section 17 of the Land Acquisition Act it is made obligatory that before taking possession of any land the Collector shall pay 80% of the compensation to the interested persons. This mandatory provision not having been complied with, the delivery of possession on paper has no legal force and that is why land owners did not allow to take possession of these lands. Any possession without such 80% compensation are likely to be vitiated even if the land is proposed to be acquired. Similarly, in the village of Mohiuddinpur Hissali, no compensation has been paid. ", "It is understood that some mutations in respect of lands of these villages in favour of have been made in the revenue records. ", "Obviously there appears to be some discrepancy. Since no legally valid possession has been given to nor land owners have allowed to take possession of these lands, mutations in revenue records made need to be set right by necessary correction proceedings. ", "It is, therefore, requested that the possession certificates of these villages may please be cancelled and original entries in the revenue records may be ordered to be restored..\" ", " ", "10. The said proposal was forwarded to the Commissioner and Director (Land Acquisition), by the District Magistrate by his letter dated 11th August, 1994. issued a clarification to the Commissioner and Director, , by its letter dated 13th August, 2004. On or about 18th August, 1994 an inspection was carried by the Land Acquisition Amin, together with the representatives of and as per the report submitted pursuant thereto, the appellant is said to have been found in possession of only 10.215 acres of land. ", " ", "11. On 11th November, 1994 the State of U.P. issued a Notification in terms of Section 48 of the Act. ", " ", "Aggrieved, respondents filed a writ application before on or about 29th August, 1995 and a Division Bench of stayed the consequential effect of the Notification dated 11th November, 1994. On or about 9th September, 1997 the appellant filed an application for vacating the stay which having been refused, a Special Leave Petition was filed before this Court, which was dismissed by an order dated 14th October, 1997. ", " ", "By reason of a judgment and order dated 21st July, 1998 the said writ petition was allowed. ", " ", "12. Indisputably on the same day, the same Bench passed judgment in preferred by appellant () against the order of dated 22nd October, 1993. We shall deal with the said matter separately. ", " ", "13. Mr. , learned senior counsel appearing on behalf of the would contend that although in the event possession had been taken by the Collector from the land owners, Section 48 of the Act will have no application but in view of the fact that possession of 55.498 acres of land had not been delivered in favour of and merely a symbolic possession had been delivered, must be held to have committed a serious error in passing the impugned judgment. ", "14. Mr. , learned senior counsel appearing on behalf of the respondents, on the other hand, would contend :- ", "(i) Having regard to the provisions contained in Section 17(1) of the Act, as the vesting of the acquired land takes place immediately, the impugned Notification dated 1th November, 1994 has rightly been held to be illegal and without jurisdiction. ", " ", "(ii) Having regard to the certificate of possession issued by the Collector on 16th November, 1984 under the provisions of the Act, stating possession of entire land had been taken and the details thereof having been mentioned in the said certificate itself, it is too late in the day for the appellant/ to contend that possession of a major portion of the land had was not taken over. ", "(iii) The fact that the possession of the entire land had been taken over not only would appear from the materials brought on record during the land acquisition proceedings culminating in passing of the Award but also from the award of as also the judgment of in the First Appeals and in that view of the matter, it would not be correct to contend that could not have entered into such disputed questions of fact, particularly when the validity or otherwise of the proceedings is not in question. ", " ", "15. A Notification under Section 4 of the Act was issued. Emergency provisions contained in Section 17 of the Act were resorted to. Sub-sections (1), (3A) and 4 of the Act read as under :- ", " ", " ", "(1) In cases of urgency, whenever the Appropriate so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9 , sub-section (1), 1 [take possession of any waste or arable land needed for a public purpose]. Such land shall thereupon vest absolutely in the , free from all encumbrances. ", "(2) .... .... .... (3) .... .... .... ", "(3A) Before taking possession of any land under sub-section (1) or sub-section (2), the Collector shall, without prejudice to the provisions of sub- section (3),-- ", "(a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and ", "(b) pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31 , sub-section (2), and where the Collector is so prevented, the provisions of section 31 , sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section. ", "(4) In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub-section (1) or sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and, if it does not so direct, a declaration may be made under section 6 in respect of the land at any time 4 [after the date of the publication of the notification under section 4 , sub-section (1).\" ", " ", "16. Indisputably the said provisions were been taken recourse to and, thus, the lands under acquisition vested absolutely in the Government. ", "17. Concedingly, a declaration in terms of Section 6 of the Act was issued whereafter notices to persons interested under Section 9 thereof had also been issued. Award had also been published. ", " Section 16 of the Act providing for taking over possession of the land after making the Award would not be applicable in this case as possession is said to have already been taken over in terms of sub-section (1) of Section 17 thereof. ", " ", "It is in the aforementioned backdrop of factual matrix, the power of the to withdraw the Notification of acquisition as envisaged under Section 48 of the Act falls for our consideration. ", "The said provision is as under :- ", " ", "\" Section 48 - Completion of acquisition not compulsory, but compensation to be awarded when not completed (1) Except in the case provided for in section 36 , the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken. ", " ", "(2) Whenever the government withdraws from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder, and shall pay such amount to the person interested, together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land. ", "(3) The provisions of Part III of this Act shall apply, so far as may be, to the determination of the compensation payable under this section.\" ", "18. It is a well settled proposition of law that in the event possession of the land, in respect whereof a Notification had been issued, had been taken over, the State would be denuded of its power to withdraw from the acquisition in terms of Section 48 of the Act. ", "19. Whether actual or symbolic possession had been taken over from the land owners is essentially a question of fact. Taking over of possession in terms of the provisions of the Act would, however, mean actual possession and not symbolic possession. The question, however, is as to whether the finding of fact arrived at by that physical possession, indeed, had been taken over by the Collector is correct or not. ", "20. We have noticed hereinbefore the background facts. The emergency provisions were resorted to. Even 80% of the compensation had been paid way back in 1984. Had possession of the vacant land been not taken, the question of payment of 80 % of compensation would not have arisen. All other legal requirements to invoke the said provision have been complied with. ", " ", "21. Mr. , however, would draw our attention to a letter dated 24.2.1986 issued by the appellant to the District Magistrate to contend that even payment of 80% of the compensation had not made and, thus, the purported delivery of possession was merely a papr transaction. Our attention had further been drawn to the written statement filed on behalf of the appellant before the reference court, which reads as under : ", "\"That out of the total acquired area in question the respondent utilized only a portion of the land by construction of their Satellite building while remaining area could not be put into use by the respondent, since the land is in actual physical possession of the land owners and they are deriving all the benefits from the land thereof and the respondent is having only a symbolic possession over the same.\" ", "22. We, however, have not been able to persuade ourselves to agree with the aforementioned submissions. The Officers of the appellant themselves were parties in regard to the process of actual physical possession obtained on its behalf by the Collector. ", " ", "23. Even in the award made by the Special Land Acquisition Collector, the invocation of the provisions of Section 17 of the Act as also obtaining of possession of the land in question had clearly been found. ", "We may notice some of the statements recorded therein : ", "\"10. Whether Sec.17 is in force : Yes 11. Date of the right : 16.11.84 XXX XXX XXX 18. Amount of Interest : 9% payable from 16.11.84 i.e. from the date of acquisition 15% further from that date payable to and owner.\" ", "We may quote hereinbelow the relevant portions from the said award : ", "\"4. 12% additional from 8.9.84 i.e. from the date of notification till date of possession i.e. on 16.11.84 : Rs.1,46,531.69\" ", "24. From a perusal of the award, therefore, it is evident that not only the provisions of Section 17 of the Act were found to have been implemented but even interest had been granted from the date of acquisition, namely, from the date of taking over of possession. Interest had also been granted in terms of Section 23A of the Act from the date of notification till the date of actual taking over of possession. also, in its judgment, held : ", " ", "\"(2) The petitioners will get 12% per annum as additional amount on the above market value for the period commencing from the date of publication of the notification u/s. 4(1) dated 6.9.84 to the date of possession dated 16.11.84.\" ", "25. In the memo of appeal preferred by the appellant before a statement was made that the possession of the land was taken by invoking Section 17 of the Act on 16.11.1984 and, thus, interest at the rate of 15% per annum on the excess amount under the provisions of Section 28 of the Act would be payble only in the case where such excess payment had not been made before the expiry of one year period from the date on which the possession has been taken and as determined by the . In view of the stand taken by the appellant before as also the reference court and , in our opinion, it is estopped and precluded from raising a plea contra. The Reference , in paragraph 4 of its judgment, also noticed that the possession of the land has been taken over on 16.11.1984. No objection was taken before the Reference that possession had not been taken and, thus, interest was not payable. No issue was also framed in that regard. ", " ", "Even before us, the only ground taken was that the land could not be put to use which is a non-issue. ", " ", "26. Strong reliance has been placed upon a decision of this Court in , [ AIR 1975 SC 1967 = ], wherein it has been held :- ", "\"We think it is enough to state that when the proceeds to take possession of the land acquired by it under the Land Acquisition Act , 1894, it must take actual possession of the land, since all interests in the land are sought to be acquired by it. There can be no question of taking \"symbolical\" possession in the sense understood by judicial decisions under the Code of Civil Procedure. Nor would possession merely on paper be enough. What the Act contemplates as a necessary condition of vesting of the land in the is the taking of actual possession of the land. How such possession may be taken would depend on the nature of the land. Such possession would have to be taken as the nature of the land admits of. There can be no hard and fast rule laying down what act would be sufficient to constitute taking of possession of land. We should not, therefore, be taken as laying down an absolute and inviolable rule that merely going on the spot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking of possession of land in every case. But here, in our opinion, since the land was lying fallow and there was no crop on it at the material time, the act of the Tehsildar in going on the spot and inspecting the land for the purpose of determining what part was waste and arable and should, therefore, be taken possession of and determining its extent, was sufficient to constitute taking of possession. It appears that the appellant was not present when this was done by the Tehsildar, but the presence of the owner or the occupant of the land is not necessary to effectuate the taking of possession. It is also not strictly necessary as a matter of legal requirement that notice should be given to the owner or the occupant of the land that possession would be taken at a particular time, though it may be desirable where possible, to give such notice before possession is taken by the authorities, as that would eliminate the possibility of any fraudulent or collusive transaction of taking of mere paper possession, without the occupant or the owner ever coming to know of it.\" ", " ", "This decision, therefore, itself is an authority for the proposition that no absolute rule in this behalf can be laid down. ", " . [] and . [], the same view has been reiterated. ", " ", "27. These decisions, as noticed hereinbefore, do not lay down an absolute rule. The question as to whether actual physical possession had been taken in compliance of the provisions of Section 17 of the Act or not would depend upon the facts and circumstances of each case. ", "28. When possession is to be taken over in respect of the fallow or Patit land, a mere intention to do so may not be enough. It is, however, the positive stand by the appellant that the lands in question are agricultural land and crops used to be grown therein. If the lands in question are agricultural lands, not only actual physical possession had to be taken but also they were required to be properly demarcated. If the land had standing crops, as has been contended by Mr. , steps in relation thereto were required to be taken by the Collector. Even in the said certificate of possession, it had not been stated that there were standing crops on the land on the date on which possession was taken. We may notice that delivery of possession in respect of immoveable property should be taken in the manner laid down in Order XXI Rule 35 of the Code of Civil Procedure. ", "29. It is beyond any comprehension that when possession is purported to have been taken of the entire acquired lands, actual possession would be taken only of a portion thereof. The certificate of possession was either correct or incorrect. It cannot be partially correct or partially incorrect. Either the possession had actually been delivered or had not been delivered. It cannot be accepted that possession had been delivered in respect of about 10 acres of land and the possession could not be taken in respect of the rest 55 acres of land. When the provisions of Section 17 are taken recourse to, vesting of the land takes effect immediately. ", "30. Another striking feature of the case is that all the actions had been taken in a comprehensive manner. The Collector in his certificate of possession dated 16th November, 1984 stated that the possession had been taken over in respect of the entire land; the details of the land and the area thereof had also been mentioned in the certificate of possession; even in its letter dated 24th February, 1986 stated that possession had not been delivered only in respect of land situated in four villages mentioned therein. Indisputably got possession over 10.215 acres of land. It raised constructions thereover. It is difficult to comprehend that if the had paid 80% of the total compensation as provided for under sub-section (3A) of Section 17 of the Act, out of 65.713 acres of land it had obtained possession only in respect of about 10.215 acres of land and still for such a long time it kept mum. Ex-facie, therefore, it is difficult to accept that merely symbolic possession had been taken. ", " [(1970 (2) SCC 149], this Court has stated the law, thus : ", "\"But these observations do not assist the case of the appellant. It is clearly implicit in the observations that after possession has been taken pursuant to a notification under Section 17(1) the land is vested in the , and the notification cannot be cancelled under Section 21 of the General Clauses Act, nor can the notification be withdrawn in exercise of the powers under Section 48 of the Land Acquisition Act. Any other view would enable the State to circumvent the specific provision by relying upon a general power. When possession of the land is taken under Section 17(1) , the land vests in the . There is no provision by which land statutorily vested in the reverts to the original owner by mere cancellation of the notification.\" ", "19 ", "The said view was affirmed in . [], in the context of applicablility of Section 11A of the Act, it was stated : ", " ", "\"When Section 17(1) is applied by reason of urgency, takes possession of the land prior to the making of the award under Section 11 and thereupon the owner is divested of the title to the land which is vested in the . Section 17(1) states so in unmistakable terms. Clearly, Section 11-A can have no application to cases of acquisitions under Section 17 because the lands have already vested in the and there is no provision in the said Act by which land statutorily vested in the can revert to the owner.\" ", " ", " . [], a Three Judge Bench of this Court opined as under : ", "\"12. The provisions of sub-section (4) of Section 52 are somewhat similar to Section 17 of the Land Acquisition Act, 1894. Just as publication of a notification under Section 52(1) vests the land in the , free from all encumbrances, as provided by Section 52(4) , similarly when possession of land is taken under Section 17(1) the land vests absolutely in the free from all encumbrances. A question arose before this Court that if there is a non-compliance with the provisions of Section 5-A and an award is not made in respect to the land so acquired, would the acquisition proceedings lapse. . this Court held that once possession had been taken under Section 17(1) and the land vested in the then the could not withdraw from acquisition under Section 48 and the provisions of Section 11- A were not attracted and, therefore, the acquisition proceedings would not lapse on failure to make an award within the period prescribed therein. It was further held that non-compliance of Section 17 (3- A), regarding part payment of compensation before taking possession, would also not render the possession illegal and entitle the to withdraw from acquisition. The aforesaid principle has been reiterated by this Court in . and . In view of the aforesaid ratio it follows that the provisions of Section 11-A are not attracted in the present case and even if it be assumed that the award has not been passed within the stipulated period, the acquisition of land does not come to an end.\" ", " ", " . [], it was held : ", "\"... .6, the question arose: whether notification under Section 4(1) and the declaration under Section 6 get lapsed if the award is not made within two years as envisaged under Section 11-A ? A Bench of three Judges had held that once possession was taken and the land vested in the , title to the land so vested in the State is subject only to determination of compensation and to pay the same to the owner. Divesting the title to the land statutorily vested in the and reverting the same to the owner is not contemplated under the Act. Only Section 48(1) gives power to withdraw from acquisition that too before possession is taken. That question did not arise in this case. The property under acquisition having been vested in the appellants, in the absence of any power under the Act to have the title of the appellants divested except by exercise of the power under Section 48(1) , valid title cannot be defeated. The exercise of the power to quash the notification under Section 4(1) and the declaration under Section 6 would lead to incongruity.\" ", "31. Yet again, in ) by Lrs. [], this has categorically laid down that when the accepted mode of taking possession of the acquired land is resorted to, that would constitute taking possession of the land. ", "The said principle has been reiterated in . [], in the following terms : ", " ", "\"43. In our considered view, has erred in holding that could release the lands in exercise of its power under Section 48 of the Land Acquisition Act, 1894 from the acquisition.\" ", "It has further been held : ", "\"46. The possession of the land in question was taken in the year 1966 after the passing of the award by the Land Acquisition Officer. Thereafter, the land vested in the which was then transferred to , predecessor-in-interest of the appellant. After the vesting of the land and taking possession thereof, the notification for acquiring the land could not be withdrawn or cancelled in exercise of powers under Section 48 of the Land Acquisition Act. Power under Section 21 of the General Clauses Act cannot be exercised after vesting of the land statutorily in the State .\" ", "{See also . []}. ", "32. , therefore, in our opinion, was correct in its view. ", "33. We may now consider the question as to whether the issue as to whether possession of the acquired land had actually been taken over or not being a disputed question of fact could not have gone into by . It is not a case where oral evidence was required to be taken. There is no law that is denied or debarred from entering into a disputed question of fact. The issue will have to be determined keeping in view the fact situation obtaining in each case. If a disputed question can be determined on the basis of the documents and/or affidavit, may not ordinarily refuse to do so. In a given case, it may also examine witnesses. ", " . [], it was held : ", " ", "\"14. observed that they will not determine disputed question of fact in a writ petition. But what facts were in dispute and what were admitted could only be determined after an affidavit in reply was filed by the State. , however, proceeded to dismiss the petition in limine. is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right to relief questions of fact may fall to be determined. In a petition under Article 226 has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account is of the view that the dispute may not appropriately be tried in a writ petition, may decline to try a petition. Rejection of a petition in limine will normally be justified, where is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be in appropriate to try it in the writ jurisdiction, or for anologous reasons. ", " ", "15. From the averments made in the petition filed by the appellants it is clear that in proof of a large number of allegations the appellants relied upon documentary evidence and the only matter in respect of which conflict of facts may possibly arise related to the due publication of the notification under Section 4 by the Collector. ", "16. In the present case, in our judgment, was not justified in dismissing the petition on the ground that it will not determine disputed question of fact. has jurisdiction to determine questions of fact, even if they are in dispute and the present, in our judgment, is a case in which in the interests of both the parties should have entertained the petition and called for an affidavit in reply from the respondents, and should have proceeded to try the petition instead of relegating the appellants to a separate suit.\" ", "Such a direction has been issued, as noticed hereinbefore, even in a land acquisition matter. ", " ", "Yet again, in [], this Court has held : ", " ", "\"10. It is not necessary for this case to express an opinion on the point as whether the various provisions of the Code of Civil Procedure apply to petitions under Article 226 of the Constitution. ", " ", "Section 141 of the Code, to which reference has been made, makes it clear that the provisions of the Code in regard to suits shall be followed in all proceedings in any court of civil jurisdiction as far as it can be made applicable. The words \"as far as it can be made applicable\" make it clear that, in applying the various provisions of the Code to proceedings other than those of a suit, the court must take into account the nature of those proceedings and the relief sought. The object of Article 226 is to provide a quick and inexpensive remedy to aggrieved parties. Power has consequently been vested in to issue to any person or authority, including in appropriate cases any government, within the jurisdiction of , orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari. It is plain that if the procedure of a suit had also to be adhered to in the case of writ petitions, the entire purpose of having a quick and inexpensive remedy would be defeated. A writ petition under Article 226 , it needs to be emphasised, is essentially different from a suit and it would be incorrect to assimilate and incorporate the procedure of a suit into the proceedings of a petition under Article 226. is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right of relief, questions of fact may fall to be determined. In a petition under Article 226 has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is no doubt discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises complex questions of fact, which may for their determination require oral evidence to be taken, and on that account is of the view that the dispute should not appropriately be tried in a writ petition, may decline to try a petition (see ). If, however, on consideration of the nature of the controversy, decides, as in the present case, that it should go into a disputed question of fact and the discretion exercised by appears to be sound and in conformity with judicial principles, this Court would not interfere in appeal with the order made by in this respect.\" ", " In (supra), it has been observed :- ", "\"4. It is seen that the entire gamut of the acquisition proceedings stood completed by 17-4- 1976 by which date possession of the land had been taken. No doubt, Shri has contended that the appellant still retained their possession. It is now well-settled legal position that it is difficult to take physical possession of the land under compulsory acquisition. The normal mode of taking possession is drafting the panchnama in the presence of panchas and taking possession and giving delivery to the beneficiaries is the accepted mode of taking possession of the land. Subsequent thereto, the retention of possession would tantamount only to illegal or unlawful possession.\" ", "34. Recently the question came up for consideration before a Division Bench of this Court in , [ ], wherein it was held :- ", " ", "\"9. On the facts pleaded it is doubtful whether the Government can withdraw from the acquisition, since the case of the and is that possession has been taken and plans finalised to fulfil the purpose for which the acquisition was made. There is no plea in the writ petition that a request for reconveyance was made in terms of Section 48-B of the Act as amended in the of Tamil Nadu.\" ", "It was furthermore held :- ", "\"15. We may also notice that once a piece of land has been duly acquired under the Land Acquisition Act , the land becomes the property of the . ", "The can dispose of the property thereafter or convey it to anyone, if the land is not needed for the purpose for which it was acquired, only for the market value that may be fetched for the property as on the date of conveyance. The doctrine of public trust would disable the from giving back the property for anything less than the market value. in a similar situation, this Court observed: ", "\"The question emerges whether the can assign the land to the erstwhile owners? It is settled law that if the land is acquired for a public purpose, after the public purpose was achieved, the rest of the land could be used for any other public purpose. In case there is no other public purpose for which the land is needed, then instead of disposal by way of sale to the erstwhile owner, the land should be put to public auction and the amount fetched in the public auction can be better utilised for the public purpose envisaged in the Directive Principles of the Constitution. In the present case, what we find is that the executive order is not in consonance with the provision of the Act and is, therefore, invalid. Under these circumstances, is well justified in declaring the executive order as invalid. Whatever assignment is made, should be for a public purpose. Otherwise, the land of the should be sold only through the public auctions so that the public also gets benefited by getting a higher value.\" ", "35. Furthermore the Collector under the Act was acting as a statutory authority. When possession has been shown to have been taken over not only in terms of sub-section (1) of Section 17 of the Act but also by grant of the certificate and other documents, illustration (e) of Section 114 of the Evidence Act 1872, must be held to be applicable. Once such a presumption is drawn the burden would be on the to prove the contra. The burden of proof could be discharged only by adducing clear and cogent evidence. Not only the aforementioned documents but even the judicial records clearly show that the possession had in fact been taken. ", "36. Mr. , however, made an alternative submission before us that this , in exercise of its jurisdiction under Article 142 of Constitution of India, may issue necessary directions so as to put a quietus to the entire matter. This cannot foresee all the eventualities. ", "37. However, before us Mr. , learned senior counsel appearing on behalf of the respondents, when questioned, categorically stated that in view of the statement made in the counter affidavit, the positive case of the respondents is that they had not been in possession. ", "If the aforementioned statement made by the respondents is found to be incorrect, legal steps as is permissible in law may be taken. Furthermore, if the respondents and/or any other person are found to be in possession of the lands which were the subject matter of acquisition in terms of the notification under Section 4 of the Act, appropriate steps for eviction therefor can be initiated. It goes without saying that the authorities of the State of Uttar Pradesh shall render all cooperation to the appellant in this behalf. ", " ", "38. It is furthermore neither in doubt nor in dispute that the initiation of the acquisition proceedings at the instance of the appellant was for setting up of a thermal power station. It had to be shifted to another site only because asked it to do so keeping in view the ecological perspective in mind. It is, therefore, permissible for the appellant to put the land in question which has vested in it for another purpose which would come within the purview of any public purpose as has been noticed by this Court in (supra) and for any other purpose as has been noticed by this Court in Keerwani Ammal (Supra) Yet again in [], this Court has held : ", " ", "\"12. If the land was not used for the purpose for which it was acquired, it was open to to take action but that did not confer any right on the respondents to ask for restitution of the land. As already noticed, in this regard has already initiated proceedings for resumption of the land. In our view, there arises no question of any unjust enrichment to the appellant Company.\" ", " ", " . [], it was contended : ", " \"16. The learned Additional Solicitor General appearing on behalf of the respondents submitted that having regard to the authorities on the subject the question is no longer res integra. It is not as if lands acquired for a particular public purpose cannot be utilised for another public purpose. He contended that as long as the acquisition is not held to be mala fide, the acquisition cannot be invalidated merely because the lands which at one time were proposed to be utilised for a particular public purpose, were later either in whole or in part, utilised for some other purpose, though a public purpose. He, therefore, submitted that some change of user of the land, as long as it has a public purpose, would not invalidate the acquisition proceeding which is otherwise valid and legal.\" ", "It was held : ", " ", "\"23. Referring to the facts of the instant case, it cannot be disputed that the planned development of Delhi for which purpose the land was acquired under Section 4 of the Act is wide enough to include the development and expansion of an airport within the city of Delhi. Thus it cannot be said that the land is actually being utilised for any purpose other than that for which it was acquired. ", " ", "The only difference is that whereas initially the development work would have been undertaken by or any other agency employed by it, after the constitution of , the said development work had to be undertaken by the newly constituted authority. Thus there has been no change of purpose of the acquisition. All that has happened is that the development work is undertaken by another agency since constituted, which is entrusted with the special task of maintenance of airports. Since the said authority was constituted several years after the issuance of the notification under Section 4 , the acquisition cannot be invalidated only on the ground that the public purpose is sought to be achieved through another agency. This, as we have noticed earlier, was necessitated by change of circumstances in view of the creation of the authority i.e. . Moreover, since there is no change of public purpose for which the acquired land is being utilised, the acquisition cannot be invalidated on that ground. The purpose for which the lands are being utilised by a governmental agency is also a public purpose and as we have noticed earlier, would come within the ambit of the public purpose declared in Section 4 notification. Therefore, the acquisition cannot be challenged on the ground that the acquired lands are not being utilised for the declared public purpose. Having regard to the facts of the case it cannot be contended, nor has it been contended, that the notification under Section 4 of the Act was issued mala fide.\" ", " ", "39. For the reasons aforementioned, the appeals, being devoid of any merit, are dismissed subject to the observations made hereinbefore with costs. Counsel fee assessed at Rs.50,000/- in each of these appeals. ", ".....................................J. [S.B. Sinha] .....................................J. [Cyriac Joseph] New Delhi; ", "July 16, 2009"], "relevant_candidates": ["0000022699", "0000054770", "0000522631", "0000542856", "0000617498", "0000943108", "0001141333", "0001271427", "0001285565", "0001295746", "0001375132", "0001407555", "0001537954", "0001653863", "0001716456", "0001788830", "0014706235", "0063447541"]} {"id": "0001563511", "text": ["PETITIONER: STATE OF ORISSA & ANR. Vs. RESPONDENT: DATE OF JUDGMENT: 11/04/1969 BENCH: SIKRI, S.M. BENCH: SIKRI, S.M. BACHAWAT, R.S. HEGDE, K.S. CITATION: 1969 AIR 1249 1970 SCR (1) 255 1969 SCC (2) 149 CITATOR INFO : R 1972 SC2350 (14) RF 1975 SC2045 (7,13) RF 1977 SC 965 (14) RF 1991 SC 471 (10,13) ACT: The (Regulation of Seniority) Rules, 1954, r. 3(3) (b), second proviso-Select List, Meaning of- Whether second proviso governs main rule or first proviso- Whether choice of date for fixing seniority arbitrary and discriminatory. HEADNOTE: In pursuance of an agreement dated October 21, 1946, between the Central and Provincial Governments regarding the constitution of an , certain draft 'rules were framed and the appellant constituted a under the draft rules for preparing a list of Police Officers who are considered suitable for promotion. The prepared a list of officers 'fit for trial to promotion posts' in the and the list was approved by the on September 6, 1951. On October 29, 1951, the All India Services Act , 1951, came into force and the (Regulation of Seniority) Rules, 1954 and the Indian Police. Service (Appointment by Promotion) Regulation, 1955, were framed under the Act. Rule 3 (3) (b) of the Seniority Rules provides that the year of allotment of an officer appointed to the service by promotion shall be the Year of allotment of the junior most direct-recruit who officiated continuously in a senior post from a date earlier than the date of commencement of continuous officiation by the promotee. The second proviso to, the rule provides that an officer shall be deemed to have officiated continuously in a senior post prior to the date of the inclusion of his name in the Select List if the period of such officiation was approved by . The respondent was appointed as a Dy. S.P. in the appellant- in 1947. In 1950, he was confirmed as D.S.P. and he was officiating continuously from 1951 to 1957 in senior officiating appointments of the His name was included in the List of officers considered suitable for pro. motion which was approved by the on September 6, 195 1, and in similar 'fit for trial' lists prepared for the years 1952 and 1954. On November 10, 1955, , set up in accordance with Regulation 3 of the Promotion Regulation, selected and recommended officers for officiating appointment in the and the respondent's name was included in that list also. That list was approved by the on February 10, 1956. On December 1, 1956, consulted the as to whether this list of November 10, 1955 could be treated as the 'Select List' within the meaning of the second proviso to r. 3(3)(b) of the Seniority Rules. The wrote back saying that it could not be so considered, because, the only recommended officers who were considered suitable to hold posts in an officiating capacity and not for appointment to The Selection of the appellant-, therefore, on February 15, 1957, prepared a 'Select List' for substantive posts in the and included the respondent's name in it. decided that the officiation in the senior posts of the officers included in the 'fit for trial' lists could not be counted for the purpose of determining the seniority of such officers under the Seniority Rules. On July 10, 1957 the respondent was appointed to the , and on July 22, 1958, wrote to the appellant- that the approved continuous officiation of the 256 respondent for seniority commenced from February 10, 1956 the date on which the approved the 'fit for continuous officiation list' containing the respondent\"s name, and, on that basis, the respondent was allotted the year 1951 as his year of allotment for purposes of seniority under r. 3 (3) (b) of the Seniority Rules. The respondent filed a writ petition in contending that : (1) Rule 3 (3) (b)is not governed by its second proviso, 'that his case was governed by the main r. 3 (3) (b) and on the basis of his continuous officiation in a senior post as an officer included in the Select List of the years 1952 and 1954 approved by the and accepted by his year of allotment should be 1948 which was the year of allotment of a junior most direct-recruit officer who officiated continuously in a senior post from a date earlier than the date of commencement of the officiation by the respondent; (2) Even if the second proviso governed the main r. 3(3)(b) and only the list of February 15, 1957 was the Select List his year-of allotment should be 1948, on the basis that his continuous officiation throughout from 1951 to 1957 was approved by by inclusion in the approved lists; (3). The choice of February 10, 1956 mentioned in communication dated July 22, 1958 was arbitrary; and (4) There was discrimination between him and another officer. allowed the writ petition. In appeal to this Court, HELD : (1) The object of the second proviso is to cut down the period of officiation which could be taken into consideration under r. 3 (3) (b). Therefore, the second proviso governs r. 3 (3) (b). The Promotion Regulation and the draft rules acted upon before the Promotion Regulation came into force, show that the preparing the Select Lists should think of substantive appointments in the service and not officiating appointments. In the present case when the lists of 1951, 1952 and 1954 were prepared the names were not selected for the purpose of substantive appointment but only for the purpose of officiation. Therefore, the 'fit for trial' lists could not be deemed to be 'Select Lists' and hence the respondent's officiation was not continuous officiation of -an officer in the 'Select List'. Only the List of February 15, 1957. could be deemed to be such Select List. Though in the letter of July 22, 1958, there was a reference to a list called 'fit for continuous officiation list', there was in fact no such list and the expression referred only to the list of November 10, 1955, of officers for promotion in an ,officiating capacity. [264 C, E; 265 A, C-D, G-266 A] (2) Since the 'second proviso governs the main r. 3(3)(b), it was for to approve or not to approve, the period of officiation prior to the date of inclusion of the respondent in the Select List of February 15, 1957. In the present case, , after applying its mind to the problem, approved the period from February 10, 1956 to July 10, 1957; and there was no evidence to show that the period of officiation prior to February 10, 1956, of the respondent was approved by . Such approval had to be accorded after the appointment to the [265 E-,G; 266 , 2 S.C.R. 325, referred to. (3) The date February 10, 1956, was not arbitrarily chosen. It has -a definite relation to the question of approved period of officiation, becaue, it was on that date that the approved the inclusion of 257 the respondent in the list for officiating appointment for the first time after the Promotion Regulation had come into force. [266 B-C] (4) There was no discrimination between the respondent and the. other officer, because, the latter was appointed on June 1, 1955, after the Seniority Rules had come into force and was governed by the first proviso to r. 3(3)(b). [266 E- F] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION Civil Appeal No. 2162 of 1968. ", "Appeal from the judgment and order dated October 23, 1967, of in O.J.C. No. 156 of 1965. , Attorney-General, and , for the appellants. ", ", and , for the respondent. ", "The Judgment of the Court was delivered by , J. This is an appeal by certificate granted by under art. 133 (1) (c) of the Constitution from the judgment and order of in Writ Petition O.J.C. No. 156 of 1965 filed by , I.P.S., hereinafter-referred to as the petitioner, against the State of Orissa and the Union of India. In this petition the petitioner had prayed for a writ of mandamus directing the respondents to fix the petitioner's seniority and year of allotment as 1948 instead of the year 1951 fixed by . quashed the order of , dated July 22, 1958, and directed to fix the year of allotment and, seniority of the petitioner in accordance with its judgment and, the law. In order to appreciate the points raised before us it is necessary to set out the facts somewhat in detail. The petitioner was appointed as Deputy Superintendent of Police in the State of Orissa on January 1, 1947. On January 1, 1950, he was confirmed as D.S.P. In the mean time an agreement had been arrived at between and some State Governments, including Orissa, regarding the constitution of . This agreement is printed as annexure to the Indian Police Cadre Rules, 1950. This agreement provided for various matters such as the strength, including both the number and' character of posts of , the method of recruitment to the Service, framing of rules regarding conditions of service, the penalties which could be imposed, etc. We are concerned, in particular, with para 2(e) and para 7 which are as under \"2 (e) The rules regulating the promotion of Provincial Police Service Officers to shall be framed by the Provincial Government concerned in consultation with and shall provide that no Provincial Police Service Officer shall be appointed to hold a superior post included in the Schedule for a period of more than one year unless have certified that the officer is in every way fit to hold a superior post in . ", "7. In order to ensure that the conditions of service applicable to officers of are as uniform as possible, rules regulating pay and other conditions of services will be framed by to such extent as may be considered necessary. Provincial s will, however, be consulted before the rules are framed, and before they are amended in any manner. In respect of matters not covered by the said rules, an officer of will be governed by such rules as may be framed by the, under which he is for the time being serving and, if no such rules are framed, by the rules applicable to the Central Service/Provincial Police Service Class 1, as the case may be.\" The s Act , 1951, came into force on October 29, 1951. Section 3 enabled to make rules for the regulation of recruitment and conditions of service, of persons appointed to an which was defined to include, among others, . Section 4 provided : ", "\"All rules in force immediately before the commencement of this Act and applicable to shall continue to be in force and shall be deemed to be rules made under this Act.\" ", "On April 30, 1951, wrote to the Secretary, , that they proposed 'to hold a meeting of the committee (to be constituted in accordance with rule 2 of the Draft Rules) sometime in June- 1951 with a view to prepare a select list of officers suitable for promotion to . The was asked -to depute one of its members to preside over the said meeting in accordance with rule 3 of the Draft Rules. On September 6, 1951, the approved the recommendation of the above committee which met to prepare the select list for promotion to , and agreed to the select list as drawn up by the . The petitioner's name appears at No. 5 of Part 11 of the list which is in the following form \"1. List of Officers fit for confirmation in promotion post. ", "2. ", "3. ", "4. ", "11. List of officers fit for trial to promotion posts. ", "1. ", "2. ", "3. ", "4. ", "5. ", "6. \". ", "On May 14, 1952, the petitioner was promoted as Additional Superintendent of Police in the cadre. On August 21, 1952, his name again appeared in the list which we may call \"fit for trial list\". His name also appeared in a similar list on July 12, 1954, One of the questions which has to be decided in this case is whether these lists can come within the expression \"select list\" used in the second proviso in r. 3 (3) of the Indian Police Service (Regulation of Seniority) Rules, 1954, hereinafter referred to as the Seniority Rules, which came into force on September 8, 1954. ", "On November 10, 1955, the first meeting of set up in accordance with Regulation 3 of the Indian Police Service (Appointment by Promotion) Regulation, 1955, hereinafter referred to as the Promotion Regulations, was held at Cuttack. In this meeting the selected and recommended officers for officiating appointment in the and the petitioner's name appeared as No. 2 in the List. ", "On February 10, 1956, approved the recommendations of the above selection com- mittee. On December 1, 1956, wrote to requesting for its advice as to whether the list prepared by could be treated as \"Select List\" as recommended by the State Government. On January 10, 1957, the replied as follows \"I am directed to refer to ", "'s letter No. 5/l/56-AIS(I), dated the 10th Dec. 1956 and to say that which met at Cuttack on the 10th Nov. 1955 did not recommend any officer for appointment to . The Committee only recommended officers who were considered suitable to hold cadre posts in an officiating capacity. Lists of such officers are made to avoid frequent references to the in making interim arrangements in cadre posts till cadre officers become available and these lists cannot be considered as Select Lists. I am to suggest that the State . may be advised to place the cases of all these officers before when- it meets again in Orissa sometime in the, month of Feb. 1957, for preparation of the Select List.\" ", "On February 15, 1957, met. and placed the petitioner, including some others, in the \"Select List\" for substantive appointment to . The Committee also recommended some persons for holding cadre posts in an officiating capacity. Reiterating the view that it had already expressed on Janu- ary 23, 1957, on March 27, 1957, the wrote to stating : ", "\"(i) that the 'fit for trial' list is intended merely in order to avoid specific references to the for casual appointments to senior /Indian Police Service Posts. ", "(ii) that the have advised in para 2 of their letter No. F.950/55-R.III, dated the 25th Sept. 1956, that the 'fit for trial' list being not a list envisaged under the Indian Administrative Service/ Indian Police Service (Appointment by Promotion) Regulations, any officiation of an officer included in the 'fit for trial' list cannot be taken as approved officiation for purposes of seniority and...... ", "On May 7, 1957, wrote to the State Governments and observed : ", "\"The question whether the officiation in senior posts of the State Civil Service/State Police Officer after in- ", "261 ", "clusion of their names in the 'fit for trial list' should or should not be taken into account for the purpose of seniority, on their subsequent appointment to , , has been engaging the attention of for some time past. As s are aware, the Indian Administrative/Police Service (Appointment by Promotion) Regulations do not provide for the preparation of any such fit for trial list. Such a list has been devised merely to enable to try out a few officers irrespective of their seniority with a view to test their suitability for senior posts and is intended only to avoid specific reference to for casual short term appointments of the State Civil Service/State Police Service officers to senior / posts. , who were consulted in this respect, have advised that any officiation of State Civil Service/State Police Service officers included in the fit for trial list should not be taken into account to determine their seniority in /.\" further stated : \"The Government of India have accordingly decided that wherever such lists have been, prepared in some States, the officiation in the senior posts of the State Civil Service/State Police Service officers included in the 'fit for trial' list cannot be. counted for the purpose of determining the seniority of such officers, under / (Regulation of Seniority) Rules, 1954. ", "On July 10, 1957, the petitioner was appointed to . On July 22, 1958, wrote to regarding the seniority of the petitioner. It stated \"The approved continuous officiation of these officers counting for seniority commenced from the 10th February, 1956-the date on which approved the 'fit for continuous officiation list containing their names. This date being later than the date i.e. 7-9-55 on which (1951 R.R.) started officiating in the senior posts but earlier than the date on which regular recruits of 1952 started officiating it has been decided that these officers may be finally allotted to 1951 and placed L13SupCI69-3 en-bloc below (1951-R.R.) and above (1952-R.R.).\" ", "It is this order which has been quashed by . The learned Attorney General, who appears for the appellant, urges that the case of the petitioner is covered by the second proviso to r. 3 (3) of the Seniority Rules and is not governed only by r. 3 (3) (b). He urges that the lists of 1951, 1952 and 1954, mentioned above, were not Select Lists within the meaning of the second proviso, and it is only the Select List which was made on February 15, 1957, which is the Select List within the second, proviso, and that there has been no discrimination or breach of art. 14 , as held by . ", "The learned counsel for the petitioner on the other hand contends that the second proviso does not govern r. 3 (3) ", "(b) but in fact governs the first proviso only. He says that the Select List of 1951 was a Select List within the meaning of the second proviso and the seniority of the petitioner should be counted from that date' In the alternative he contends that the petitioner's officiation in senior posts prior to July 10, 1957, had in fact been approved and was approved officiation within the second proviso. He further contends that the date, February 10, 1956, mentioned in the order dated July 22, 1958, is an arbitrary date and the Government has, in fact, not applied its mind to the question. He further says that there has been discrimination and one has been given benefit which has been denied to the petitioner. The main point that arises in this case is whether the Select Lists of 1951, 1952 and 1954 can be deemed to be treated as Select Lists within the second proviso. It is necessary to set out rule 3 of the Seniority Rules in order to deal with this point. ", "Rule 3 reads thus : ", "\"3. Assignment of Year of Allotment-(1) Every officer shall be assigned a year of allotment in accordance with the provisions hereinafter contained in this rule. ", "(2) The year of allotment of an officer in service, at the commencement of these rules shall be the same as has been assigned to him or may be assigned to him by in accordance with the orders and instructions in force immediately before the commencement of these rules: ", "Provided that where the year of allotment of an officer appointed in accordance with rule 9 of the Re- ", "263 ", "cruitment Rules has not been determined prior to the commencement of these Rules, his year of allotment shall be determined in accordance with the provision in clause (b) of sub-rule (3) of this rule and for this purpose such officer shall be deemed to have officiated in a senior post only if and for the period for which he was approved for such officiation by in consultation with the . ", "(3) The year of allotment of an officer appointed to the Service after the commencement of these rules, shall be- ", "(a) where the officer is appointed to the Service on the results of a competitive examination, the year following the year in which such examination was held; ", "(b) where the officer is appointed to the Service by promotion in accordance with rule 9 of the Recruitment Rules, the year of allotment of the junior-most among the officers recruited to the Service in accord- ance with rule 7 of those Rules who officiated continuously in a senior post from a date earlier than the date of commencement of such officiation by the former; ", "Provided that the year of allotment of an officer appointed to the Service in accordance with rule 9 of the Recruitment Rules who started officiating continuously in a senior post from a date earlier than the date on which any of the officers recruited to the Service, in accordance with rule 7 of those Rules, so started officiating shall be determined ad hoc by in consultation with con- cerned; ", "Provided further that an officer appointed to the Service after the commencement of these Rules in accordance with rule 9 of the Recruitment Rules shall be deemed to have officiated continuously in a senior post prior to the date of the inclusion of his name in the Select List prepared in accordance with the recruitment. of the Indian Police Service (Appointment by Promotion) Regulations framed under rule 9 of the Recruitment Rules, if the period of such officiation prior to that date is approved by in consultation with the Commission. Explanation 1-An officer shall be deemed to have officiated continuously in a senior post from a certain date if during the period from that date to the date of his confirmation in the senior grade he continues to hold without any break or reversion a senior post otherwise than as a purely temporary or local arrangement. ", "Explanation 2.-An officer shall be treated as having officiated in a senior post during any period in respect of which concerned certifies that he would have so officiated but for his absence on leave or appointment to any special post or any other exceptional circumstance.\" ", "It seems to us that the 1951, 1952 and 1954 lists cannot be deemed to be Select Lists within the second proviso because, as a matter of fact, did not select names for the purpose of substantive appointment but only selected names for the purpose of officiation in the senior posts of . Regulation 5(1) of the Promotion Regulations inter alia provided : ", "\"5. Preparation of a list of suitable officers.-(1) The committee shall prepare a list of such members of as satisfy the condition specified in regulation 4 and as are held by the committee to be suitable for promotion to the Service. . . . \" ", "Now this clearly means that the should think of substantive appointments in the service and not officiating appointments. ", "Similarly, the draft rule 2, which was being acted upon before the Promotion Regulations came into force, provided : ", "\"A committee shall be constituted by composed.... (for ) of the Chief Secretary, the Inspector General of Police and Deputy Inspectors General of Police. This Committee shall prepare a select list of .... Police Service Officers who are considered suitable for promotion. The list will be renewed and revised annually.\" . ", "Draft rule 3 provided that \" should invite to depute one of their members to preside at the meetings of the .\" Draft rule 4 provided that \"in preparing this list, the shall be guided by the suitability of the officers for appointment to . No officer shall be included in the list who has not definitely proved his fitness for such appointment. . . . It seems to us that and were quite right in deciding that the 'fit for trial' lists could not be deemed to be select lists made within the draft rules or the Promotion Regulations. In view of this conclusion it is not necessary to decide the question, which was raised by the learned Attorney General, that in any event the second proviso is only dealing with select lists made after the Promotion Regulations came into force and not with select lists made under the so-called draft rules. We are assuming, without deciding, that if a proper select list had been made under the draft rules it would be a select list within the meaning of the second proviso. ", "This takes us to the next point whether the petitioner is governed by the main portion of rule 3 (3) (b) and not by the second proviso. In our opinion, the object of the second proviso is to cut down the period of officiation which would be taken into consideration under rule 3 (3) ", "(b). It is common ground that the case of the petitioner is not covered by the first proviso. We are unable to agree with the learned counsel for the petitioner that the only object of the second proviso is to Emit the operation of the first proviso. ", "Explanation I really explains the expression \"officiated continuously\" occurring in rule 3 (3) (b). But it does not mean that where Explanation I applies the second proviso does not apply. The object of Explanation I is to deal with the problem arising in the case of officers holding appointments as a purely temporary or local arrangement. If the second proviso applies, as we hold it does, it was for to approve, or not to approve, the period of officiation prior to the date of inclusion of the petitioner in the Select List. As observed by this Court in (1) \"the first period (i.e. period before the date of inclusion of an officer in the Select List) can only be counted if such period is approved by in consultation. with the .\" They have approved the period from February 10, 1956 to July 10, 1957. No material has been brought to our notice to show that did not apply its mind to the problem. ", "The learned counsel for the petitioner contends that in the letter dated July 22, 1958, a list called the \"fit for continuous officiation list\" is mentioned which is said to have been approved by . The learned counsel rightly points out that no such list exists. Apparently this is an expression coined by the draftsman to express the views of which clearly stated in the letter dated February 10, 1956, that they approved the recommendation of (1) [1967] 2 S.C.R. 325, 329. ", "266 ", " which met at Cuttack for the selection of police officers for promotion to in an officiating capacity. There is no doubt from the correspondence we have set out above that were quite aware of the requirements of a list. ", "We are unable to agree with the learned counsel that Febru- ary 10, 1956, is an arbitrary date. It has definite relation to the question of approved period of officiation because it is on this date that approved the inclusion of the petitioner in the list for officiating appointment for the first time after the Promotion Regulations had come into force. The next point which we may now consider is whether the officiation period prior to February 10, 1956, was, as a matter of fact, approved by . The learned counsel has taken us through the correspondence. He has been able to point out some letters written by on the point but no letter from has been shown which could possibly be read as approving his period of officiation prior to February 10, 1956. At any rate the approval of has to be accorded after the appointment to and not before. ", "The only point that remains now is the question of discrimi- nation. was an officer who wag appointed on June 1, 1955, after the Seniority Rules had come into force and he seems to be, governed by the first proviso. We have not been able to appreciate how this case has any relationship to the case of the petitioner. ", "The learned Attorney General had raised the point that all the officers who were likely to be affected by the decision of the writ petition had not been impleaded as parties to the petition, and he referred to us the decision of this in v. Union of India(1), where , J., speaking for the observed : ", "\"But we are unable to investigate the question whether there has been infringement of the rules governing fixation of seniority, for a majority of those who were placed above the appellant in the seniority list are not impleaded in the petition before the Judicial Commissioner and are not before this Court. ", "It is impossible to pass an order, assuming that the appellant is able to convince us that a breach of the rules was committed, altering the list of seniority, unless those who are (1) Civil Appeal No. 405 of 1967; Judgment dated August 14, likely to be affected thereby are before the and have an opportunity of replying to the case set up by the appellant.\" ", "This is a salutary rule and should be observed. But the learned counsel for the petitioner says that he wag concerned with his year of allotment and in that question no body else was interested directly. Each officer has to have a year of allotment and no other officer is directly interested in it. But as we are allowing the appeal it is not necessary to finally decide whether the petition should have been dismissed only on this ground. In the result the appeal is allowed, the judgment and order of set aside and the petition dismissed, but there will be no order as to costs here and in . ", "V.P.S. Appeal allowed."], "relevant_candidates": ["0001964132"]} {"id": "0001565247", "text": [" . ", "1. Respondent No.1 is Deputy Chief Engineer (General) in , , Secunderabad. He joined in in Group-C on 11-11-1964. By 1979 he was selected as Assistant Engineer Group-B through a limited departmental examination. Later he came to be promoted to Senior Time Scale (STS) Group-B on 29-6-1987. Next promotion of Officers of STS Group-B is to Indian (), which is a selection post. Respondent No.1 became eligible for the post of Junior Scale (JS) Group-A by 27-10-1982 after completion of three years in However, he could not be considered as he fell out of zone of consideration. By 1989 his seniority in moved up and he allegedly came within the zone of consideration. As per the rules and procedure of () has to consider all the eligible candidates who are within the zone of consideration and recommend for promotion to . It is admitted that the was not constituted from 1988-91. Be it, however, noted that though the was constituted in 1991 in relation to vacancies of 1988, the respondent No. 1 was not in the zone of consideration. In December, 1992 he was considered by the and promoted as Deputy Chief Engineer (JS) Group-A in with effect from 24-12-1992. ", "2. The petitioner was given five years weightage from the date of his promotion i.e., 24-12-1992 in accordance with the principles laid down for fixation of seniority. He was fixed in the seniority list below three directly recruited officers who were respondents 3 to 5 before and who were recruited against the vacancies, which arose prior to 1989. Aggrieved by such action, respondent No. 1 filed an original application being No.495 of 1997 under Section 19 of the Administrative s Act, 1985 ('the Act' for brevity). He prayed for quashing the letter of the -respondent No.l dated 8-12-1995 in which the seniority of un-official respondent Nos.3 to 5 was fixed from the date of initial time scale (DOITS) in 1984. He also prayed for a direction to the petitioner to refix his DOITS in 1984 counting weightage of five years from the year of vacancy. The disposed of the directing the petitioner to dispose of the representation dated 22-7-1996 made by respondent No.1. The representation was duly disposed of by letter dated 3-10-1997. Aggrieved by the same, respondent No.1 again filed No.590 of 1998 before the Central praying to quash the 's letter dated 8-12-1995 wherein his seniority was fixed with effect from 24-12-1987 and for quashing the tetter dated 4-10-1997 of the Secretary, , which was the basis for passing the order on 3-10-1997 by respondent No.2, rejecting the representation made by the first respondent on 22-7-1996. The learned allowed the in the following terms : ", "In view of what is stated above, we have no hesitation to come to the conclusion that the applicant should be shown as having been promoted to in the vacancies that arose for promotion from Group 'B' to Group 'A' service in the year 1989. On that basis he should also be given antedated seniority in accordance with the principles laid down by order dated 30-11-1976. The applicant is also entitled for other consequential benefits arising out of that seniority. ", "3. While doing so the also placed reliance on the judgment of the Central Administrative , Bombay Bench in CP No.5 of 1991 in OA No.177 of 1986 dated 20-9-1991 wherein it was observed that the delay in holding shall not deprive the claim of the incumbent for seniority and date of time scale anterior to the date of promotion. ", "4. , learned Counsel for the petitioners submits that allowing promotion to respondent No.1 in Group-A (JS) of prior to 1989 is in contravention of the principles of approved by the President of India. If the principle laid down by the is allowed to stand whenever there is delay in constitution of , the subsequent promotions in accordance with the recommendations of , would have to be dated back which would result in violation of Articles 14 and 16 of the Constitution of India. He also submits that the view taken by the is contrary to the principles laid down by in , , , 2000 (4) , , , , 2000 (1) , , and , 2000 (4) Supreme 710. ", "5. The learned Counsel for the respondent No.l Sri C.V. Mohan Reddy submits that though respondent No.l was eligible for promotion to Group-A even in 1982 his case could not be considered as he was not within the zone of consideration. Though there were vacancies in 1989 the petitioners did not hold in relation to the vacancies whiclx arose in 1989 and respondent No.1 was only considered in 1992, and therefore, the petitioners are bound to give weightage of five years and refix the DOITS five years anterior to 1989 i.e., 1984. He also submits that when is required to fill up vacancies in the ratio of 60:40 by direct recruitment and by promotion filling up vacancies from only one source is against rules and cannot be sustained. As respondent Nos.3 to 5 were directly recruited in the examination years 1983, 1985 and 1984 respectively. If the first respondent is not given weightage of five years to be reckoned from 1989, he would become junior to 1984 direct recruits which violates the fundamental right under Article 16 of the Constitution of India. As the petitioners held in December, 1992 for the examination years of 1989, 1990 and 1991 and made separate panels for three years, the petitioners are bound to give weightage of five years from 1989, the examination year and not from the date of promotion as otherwise, respondent No. 1 would stand to loose three years of seniority. He also further submits that those officers who are promoted for the examination years of 1991 in view of the fact that there is only one year delay in conducting , they would lose only year's seniority, and therefore, respondent No. 1 meted out with discrimination. He also submits that the petitioners have not followed the principles of determination of seniority vide 's letter dated 30-11-1976, and therefore, the was justified in allowing the OA. He placed strong reliance on the judgments of in , 1994 (4) SLR 20 (SC), v. State of Bihar, , , 1997 (1) SLJ 69, , 1997 SCC (L&S) 1194 and , 1998(1) SLJ 259. ", "6. In the light of the rival contentions presented before us, the point that arises for consideration is whether the first respondent is entitled for weightage from the date of appointment to of Group-A of with effect from 24-12-1992 or is he entitled for such weightage anterior to the year of allotment i.e., 19-8-1997. ", "7. It is one of the principles of fixation of seniority that whenever there is recruitment to a particular service from two sources i.e., direct recruitment and promotion the seniority of promotees is fixed by giving wcightage in the form of seniority in the service subject to certain conditions. Weightage principle is generally applied also in a situation when persons in a feeder category come from two different lower categories and are required to fulfil two different kinds of eligibility criteria weightage of service means that though a promotee is given promotion to a cadre post or higher post in the non-cadre post, his seniority will be reckoned from a date anterior to the date of promotion, because in every year of recruitment, the rule obligates to maintain the ratio of recruitment between direct recruits and promotees. This is done to maintain the efficiency of service as well as to balance the competing interests. The weightage principle generally contemplates considering the service rendered in the cadre from which the promotion is given or for officiating service rendered on promotion prior to substantive appointment. Cases have come up with regularity where the question mostly involved the application of the rules than the vires of the rules. Further, cases involving weightage principle in fixing the seniority are by and large arose in relation to like , , etc. It also arose in relation to fixation of seniority of service holders who came to hold such post from two different sources. The principle of giving weightage has been held to be not unreasonable in , and , . ", "8. The question however before this Court is not as to the validity of the principle of weightage in fixation of seniority, but only as to how such weightage is to be reckoned. Therefore, it is necessary to examine the controversy in a nutshell and the purport of the various Orders as approved by the President of India. ", "9. It is not denied before us that respondent No. 1 was promoted in a vacancy earmarked for promotees with reference to 1989. It is also not denied before us that till 1991 respondent No.1 did not come up within the zone of consideration though he became eligible for being promoted to of cadre October, 1982. Further, a perusal of the order impugned before the dated 8-12-1995 shows that by virtue of notification No.E (GP)92/ 1/49 dated 3-11-1995 issued by , respondent Nos. 1 and 111 other officers were substantively appointed to the JS () of with effect from 24-12-1992. According to the impugned letter/seniority list the inter se seniority of all the 112 officers who were substantively appointed to of was prepared giving DOITS by applying principle (vi) of the principles for determining the relative seniority vide letter No.E(O)l-72/ SR-6/29 dated 30-11-1976 as amended by letter dated 23-4-1991 and all other relevant factor. As per the annexure to the said letter 112 officers will rank below one whose DOITS was with effect from 4-12-1987 and above one whose DOITS was with effect from 15-3-1988. The said S.R. Paul was junior most officer in the seniority list issued vide \" letter dated 24-12-1993 and was the senior most direct recruit in 1986 batch and the inter se seniority position was circulated vide letter dated 26-2-1983. This means that respondent No.l and all others who were appointed substantively to JS () with effect from 24-12-1992 were placed above senior most of direct recruits of 1986 batch and junior most officer in the already finalised seniority list with reference to allotment year of 1987. Applying this principle, the petitioner was given DOITS with effect from 24-12-1987 whereas the said Paul was given DOITS with effect from 4-12-1987. Between these two dates there was no officer who was given DOITS with reference to 1984 which is now claimed by respondent No.1. All the 112 officers of were appointed to vide dated 3-11-1995 and their inter se seniority was fixed accordingly giving all of them DOITS as 24-12-1987. This was done by applying seniority principles contained in the letter dated 30-11-1976 as amended by another letter dated 23-4-1991. ", "10. As per Rule 209(B)(1) of Indian Railway Establishment Code Vo.1 read with Rule 4, recruitment for 40% of the posts from promotion from Group-B to Group-A Junior Scale which is based on selection on merit. For filling up the promotion quota is held by and as per the procedure followed in Officers coming within the zone of consideration and those who have Bench mark grading 'good' are considered. Even among these officers, the officers with grade as 'outstanding' rank en bloc seniority to those who have grade as 'very good' and those who have graded as 'very good' rank en bloc senior to those who have graded as 'good' and get place in the select list accordingly. The officers placed in the panel were promoted to Group-A JS with the approval of the President with effect from the date of communication of approval of the and recommendations of the . ", "11. By letter dated 30-11-1976 in Ministry of Railways with the approval of the President of India circulated principles for determining the seniority of officers appointed to various Class-I services from different sources (for short 'the principles'). Principle (i) states that the seniority of officers appointed to class-I shall be determined on the basis of 'date for increment on time scale' (DOITS) to be specifically determined in each case in accordance with the principles laid down therein. Principle (ii) is to the effect that all such officers promoted to class-I shall count their seniority from the date they commence earning increments in the regular scale as Assistant Officers subject to condition that inter se seniority of officers in each service recruited as probationers in a particular year will be regulated by their place in order of merit. Principle (vii) with which we are concerned reads as under: ", "Principle (vii):- In the case of Class II Officers permanently promoted to Class I Services, if two are more than two officers are promoted on the same date their relative seniority will be in the order of selection. Subject to the aforesaid provision the seniority of officers, permanently promoted from Class II to Class I services, shall be determined by giving weightage based on: ", "(a) the year of service connoted by the initial pay on permanent promotion to Class-I Service; or ", "(b) Half the total number of years of continuous service in Class-11, both officiating and permanent; ", "Whichever is higher, subject to a maximum weightage of five years. ", "12. The above principle (vii) contemplates giving wieghtage based either on the year of service connoted by the initial pay on permanent promotion to Class-1 or half of the total number of continuous officiating and permanent service in Class-II subject to maximum service of weightage of five years. These principles were amended subsequently by letter dated 23-4-1991. Principle (vii) in the letter dated 30-11-1976 was renumbered as principle (vi) and after amendment, it reads as follows: ", "Principle (vi): In the case of Group 'B' officers permanently promoted to Group 'A' services, if two or more officers are promoted on the same date, their relative seniority will be in the order of selection, subject to the aforesaid provision, the seniority of officers, permanently promoted from Group 'B\" to Group 'A' service shall be determined by giving weightage based on: ", "(a) the year of service connoted by the initial pay on permanent promotion to Group 'A' service; or ", "(b) half the total number of years of continuous service in Group 'B' both officiating and permanent; ", "whichever is more, subject to a maximum of 5 years; provided that the weightage so assigned does not exceed the total non-fortuitous service rendered by the officer in Group 'B'. ", "13. As per the amendment contained in letter dated 23-4-1991 the same is applicable to all selections of officers for substantive appointment to for which selections are held after 23-4-1991. It is not denied that in the case on hand the selections were held on 24-12-1992 and therefore the principle (vi) as amended by letter dated 23-4-1991 is applicable. This principle (vi) was subject-matter in two cases before being 's case (supra) and 's case (supra). While upholding these principles as satisfying tests of equity and fairness, applied these principles therein. As seen from the principle, the weightage subject to a maximum of five years is with reference to the year of service connoted by initial pay on permanent promotion to or half the total number of years of continuous service in including officiating and permanent service. As respondent No.l I was substantively appointed w.e.f. 24-12-1992 to Junior Scale of IRSE (DOITS) with effect from 24-12-1992 can only be given weightage of five years with reference to that date and therefore the impugned order insofar as the same reckons weightage from 24-12-1987 is in accordance with principle (vi)(a) of the amended principles for determination of seniority. For all purposes, admittedly respondent No.l's year of service is 1992 and though he is shown against vacancy of 1989 a reasonable reading of the principle shows that he is entitled for weightage of five years with effect from 24-12-1992 and certainly not from 1989. If the contention of respondent No.1 is accepted he would be given DOITS with effect from 1984 in which year admittedly he was not even within the zone of consideration. He came within the zone of consideration only in 1989 and it is not permissible to read the 'principle' as suggested by the learned Counsel for respondent No.l. Further, he was appointed as Assistant Engineer in 1979 and to () on 29-6-1987. If the weightage principle is given from 1989, he would have reckoned his seniority from 1984 when he was not even in () post, which is feeder category to posts in IRSE. ", "14. The principle of giving weightage is subject to two conditions. First, under no circumstance the service shall be determined by giving weightage upto a maximum period of 5 years. Secondly, the weightage so assigned does not exceed the total non-fortuitous service rendered in In our considered opinion, if respondent 's contention is accepted that he is entitled for weightage of five years from 1989, the same would violate the second condition, in the sense that admittedly the petitioner was promoted to on 29-6-1997, and he had worked for a little more than five years in STS If his seniority is considered from 1984, the same would exceed the total non-fortuitous service rule of 5'/2 year's which is impermissible. ", "15. In 's case (supra) the appellants who belong to (RBSS) claimed weightage of being substantively appointed by promotion to Junior Scale Group-A of (IRPS) on 15-12-1984 against 50% promotion quota reserved for Class-II Officers. By applying the relevant principle for determining the relative seniority of the Class-I Officers of (for reckoning weightage of seniority) DOITS worked out to 15-2-1979 that is to say five years weightage from the date of substantive appointment by promotion on 15-2-1984. Accordingly, they were given weightage in the JS Grade-I from 15-2-1979 and seniority was reckoned from that 'date of substantive appointment. Later as they were completed five years of service by 15-2-1984 in JS Grade-I they were posted in Senior Scale Grade-A of IRPS immediately after their joining in their respective in JS Grade-I. They were also promoted to Junior Administrative Grade with effect from 14-5-1987 by reckoning their service from 15-2-1979 as they have completed eight years of service and eligible for consideration to Junior Administrative Grade and their seniority was circulated which was the subject-matter of challenge by before , Principal Bench. allowed the OA and hence the appellants carried the matter to . Placing reliance on principle (vi) of the principles for determining the relative seniority of Class-I (Group-A) officers, found fault with the order of . It was observed therein as under; ", "It is settled law that the appointing authority or the appropriate can frame rules governing seniority which are reasonable keeping in mind the divergent claims that can be put forward by the various categories of the members of the service. It is, however, necessary that there should be no discrimination, that is, persons placed in the same group must be treated similarly and, further, that any principle which is made the basis of determination of seniority should, if applicable to others, be applied to them also. In other words, if seniority is to depend purely upon the date of confirmation or the date of appointment, that rule should be applicable to all; but if the promotees and special recruits are being given weightage, the principles applicable to the members of the service should be kept in mind while determining the weightage to be given or while laying down rules for determination of seniority. ", "16. It is therefore clear that while granting weightage of five years to a promotee officer it is always five years backwards from the date of substantive appointment and not from the year of allotment. This judgment which is relied on by Sri in fact goes against the first respondent. As observed by in 's case (supra) in working out weightage of promotee officers, one cannot ignore the principles of seniority applicable to other members and cannot ignore other principles for determination of seniority. ", "17. case (supra) involved the interpretation of (Regulation of Seniority) Rules, 1954 and the case was decided on the facts peculiar to it and no principle or ratio was laid down therein. It is not an authority on the question of giving weightage with which we are concerned and the same cannot be considered an authority. case (supra) arose out of IAS (Appointment by Promotion) Regulations. Having regard to Regulation 5 of the said regulations it was held that if for any reason is not able to meet in a particular year the when it meets next, should, while making selection, prepare a separate list for each year keeping in view the number of vacancies in that year after considering the Civil Service Officers who were eligible and fall within the zone of consideration for selection in that year. The relevant interpretation of the regulations is as under: ", "It must, therefore, held that in view of the provisions contained in Regulation 5, unless there is a good reason for not doing so, is required to meet every year for the purpose of making the selection from amongst Civil Service Officers who fulfil the conditions regarding eligibility on the first day of the January of the year in which the meets and fall within the zone of consideration as prescribed in clause (2) of Regulation 5. The failure on the part of to meet during a particular year would not dispense with the requirement of preparing the Select List for that year. If for any reason is not able to meet during a particular year, the when it meets next, should, while making the selection prepare a separate list for each year keeping in view the number of vacancies in that year after considering the Civil Service Officers who were eligible and fall within the zone of consideration for selection in that year. ", "18. In 's case (supra) the controversy involved the promotion to the post of Senior General Manager in under Service Rules. It was held: ", "It is true that filling up of the posts are for clear or anticipated vacancies arising in the year. It is settled law that mere inclusion of one's name in the list does not confer any right on him/her to appointment. It is not incumbent that all posts may be filled up. But the authority must act reasonably, and in public interest and omission thereof should not be arbitrary. , had held that inclusion of the name of a candidate in a merit list does not confer any right to be selected unless the relevant recruitment rules so indicate. The State is under no legal duly to fill up all or any of the vacancies even though the State Act s in an arbitrary manner. In v. of Bihar, [1993 Supp (3) 268 - 1993 SCC (L&S) 1076 = (1993) 25 ATC 598] it was held that mere inclusion of one's name in the panel does not confer on him/her any indefeasible right to appointment. It is further held that the purpose of making a panel was to finalise the list of eligible candidates for appointment. The preparation of the panel should be the exact to the notified or anticipated vacancies.....However, in the light of the above principles and in the light of the clear rules extracted therein before, it is seen that the exercise of preparation of the panel is undertaken well in advance to fill up the clear vacancies or anticipated vacancies. The preparation and finalisation of the yearly panel, unless duly certified by the appointing authority that no vacancy would arise or no suitable candidate was available, is a mandatory requirement. If the annual panel could not be prepared for any justifiable reason, year-wise panel of the eligible candidates within the zone of consideration for filling up the vacancies each year should be prepared and appointment made in accordance therewith. ", "19. 's case (supra), which is concerned with the seniority of officers in the rank of Commandant/Security Officer in . In relation, thereto the circular letter dated 30-11-1976 containing principles of seniority which was modified by in accordance with the recommendations of the was also considered. Having regard to the policy of , observed after referring to 's case (supra) and 's case (supra) that the two letters of containing principles of reckoning inter se seniority between Groups-A and B Officers was fair and equitable. This judgment of refers to the principles of seniority contained in letter dated 30-11-1976 of on two earlier cases and having regard to the principles laid down in the cases of and (supra) came to the conclusion that the principle of weightage which is also proposed by in their letters was unassailable. ", "20. In case (supra) the question was whether the respondent could be deemed to have been promoted from a date anterior to actual date of promotion. directed that the respondent shall be deemed to have been promoted with effect from 17-1-1989 with all consequential benefits though in its proceedings dated 13-9-1995 found the respondent unfit for promotion upto 16-1-1994. held that an employee who is declared unfit initially but given ad hoc promotion cannot count his seniority from the date of ad hoc promotion and that his seniority shall be reckoned/ determined wilh reference to the date of regular promotion only. ", "21. The decisions of in , Maharashtra Vikrikar Karmachari Sanghatan and Shanmukham cases (supra) cited by petitioner's Counsel did not deal with the principle of weightage while fixing seniority of the promotccs and they deal with the question of consideration of period of ad hoc promotion for the purpose of reckoning seniority and therefore it is not necessary to refer to these judgments. ", "22. In case (supra) the question was as to whether the delay in filling up the vacant posts would confer any right on the person promoted subsequently to claim seniority from the date when the vacancy arose or from the year the vacancy was available. dealing with Indian Administrative Service (Cadre) Rules and IAS (Fixation of Cadre Strength) Regulations, 1955 held that even when the vacancy exists to be filled up by promotion from non-cadre service holders, the is not bound to fill up those vacancies. Placing reliance on the earlier judgments in , , observed as under: ", "This however does not, in our opinion, confer any right on the petitioners to seek a mandamus for encadring those ex-cadre/temporary posts, for any such mandamus would run counter to the statutory provisions governing the creation of cadre and fixation of cadre strength. The basis of the petitioners' right to be selected for is traceable in case of Civil Service Officers to Rule 8 of the Recruitment Rules which says that may recruit 1AS persons by promotion from amongst the members of the civil service. This Rule itself puts a ceiling on the number of posts that could be filled in IAS from such promotions, which are limited to not more than 33 1/3% of the posts enumerated therein. The prayer of the petitioners for encadrement of the ex-cadre/temporary posts in reality amounts to asking to create more posts. The question then arises whether there is any such right in the petitioners to seek such creation of additional posts. It is a well-settled principle in service jurisprudence that even when there is a vacancy, the is not bound to fill up such vacancy nor is there any corresponding right vested in an eligible employee to demand that such post be filled up. This is because the decision to fill up a vacancy or not vest with the employer who for good reasons, be it administrative, economical or policy, can decide not to fill up such post(s). ", "23. From the various authorities cited before us, the following principles would emerge: ", "(i) Even when vacancies arises/exists it is not incumbent on the part of the authorities to fill up the vacancies. The officers may have a legitimate expectation, but they cannot have any enforceable right either to compel constitution of or to seek promotion with retrospective date; for valid reasons may be postponed; ", "(ii) The principle of weightage has to be applied having regard to other principles of seniority and cannot be construed or applied in a straight jacket formula; ", "(iii) The principle of weightage has to be applied by giving due weightage of service of five years from the date of substantive appointment and not from the year of allotment; ", "(iv) The principle of giving weightage of five years from the date of substantive appointment is fair and equitable procedure and cannot be held to violate Articles 14 and 16 of the Constitution of India; ", "(v) The principle of giving weightage subject to condition that weightage assigned shall not exceed the total non-fortuitous service rendered by the officer in the lower category; and ", "(vi) If the principle of giving five years of weightage in service in the promoted category is reckoned with reference to year of allotment, the same would violate the principle of equity in Articles 14 and 16 of the Constitution of India, in that, even a person whose claims were rejected earlier or who was not qualified or who was not within the zone of consideration would get the benefit of weightage of five years of service which is illogical and illegal. ", "24. The learned in the impugned judgment while holding that the first respondent is entitled for weightage from the year in which vacancy occurred placed reliance on the principles contained in the letter dated 30-11-1976 and did not notice the subsequent amendment by letter dated 23-4-1991. Apart from this as observed by in 's case (supra) five years weightage can only be given from the DOITS i.e., the date on which the substantive appointment is made and not from the year in which the vacancy occurred. Be it noted that the year of service is always connoted by initial pay on permanent promotion and not promotion with reference to a panel year. In this view of the matter, the impugned judgment of the suffers from error and is liable to be set aside which requires to be rectified by us in this petition for judicial review. ", "25. In the result, for the aforesaid reasons, we allow the writ petition and dismiss OA No.590 of 1998 filed by the first respondent herein. There shall be no order as to costs."], "relevant_candidates": ["0000038597", "0000282592", "0000470118", "0000492752", "0000517477", "0000765491", "0000909297", "0000982107", "0001463760", "0001628165", "0137734242", "0172442656"]} {"id": "0001568071", "text": ["JUDGMENT , J. ", "1. I think the lower appellate court was right in holding that the notice, Ext. A3 dated 22-10-19-38, issued by the plaintiff to defendants 1. 2 and 3 but not to the 4th defendant was not effective to determine the under-lease which, by reason of the surrender of the lease by Ext. A-2 dated 12-3-1945, must, for all intents and purposes, be regarded as a direct lease under the plaintiff. Both according to the plaint and the written statements, the 4th defendant also was an under-lessee, whether along with defendants 1, 2 and 3 as an heir with them of the original under-lessee as alleged in the plaint, or along with defendants 1 and 2 only as a donee with them under Ext. B-2 dated 4-7-1945 from a legatee of the original under-lessee, is a matter of no consequence. ", "In either case, the 4th defendant and her co-tenants could have taken only as tenants in common and not as joint tenants--defendants 1 and 2 are sons, the 3rd defendant, the daughter and the fourth defendant, the widow of the original under-lessee, and, while on the one hand there is no averment that they constituted a joint family and took the property as such, on the other, there is nothing in the gift deed Ext. B-2 to show that a joint tenancy was intended to be created thereby -- and in the absence of notice to quit to the 4th defendant there was no effective determination of the lease. The observation in . AIR 1963 SC 468 (in paragraph 7 of the report) that notice to one alone of several Joint tenants is sufficient applies only to a case where the several tenants hold as joint tenants and not where, as in this case, they hold as tenants in common. ", "That is cleat from the emphasis placed by their Lordships on the circumstance that the tenants took the premises as joint tenants, the deed of assignment by which they acquired the lease expressly providing that they were taking as joint tenants. Where joint owners are joint tenants there is unity of title, unity of interest and the right of survivorship in addition to unity of possession so that it might be said that any one of the joint tenants represents the entire estate -- indeed in the case already referred to it would appear that one of the two joint tenants had died and the lease had vested solely in the other by suivorship before notice to quit was served on the other so that there was no question of the legal representatives of the deceased joint tenant having any interest whatsoever in the lease so as to require that notice should go to them. ", "Where, however, the joint owners are only tenants in common there is only unity of possession, not of title or interest, and to determine a tenancy so held in accordance with section 106 of the Transfer of Property Act notice must be addressed to all the tenants though proof of service on one will be prima facie proof of service on all. See v , AIR 1918 P. C. 102 -- and , AIR 1925 Cal 752. In the words of the section, notice must go to every party intended to be bound by it, and if it is not issued to any of the joint owners of the lease there is no determination of the lease so far as he is concerned. A lease cannot be determined piecemeal and hence it follows that there is no determination even so far as the others are concerned. ", "2. I dismiss this appeal with costs."], "relevant_candidates": ["0000380642", "0000647655"]} {"id": "0001579664", "text": ["JUDGMENT , C.J. ", "1. The question for determination in these appeals is whether, in the circumstances to be presently stated, the plaintiffs, who were formerly co-sharer landlords with the defendants and others in Mauza Sawas Khurd, are entitled to a raiyati interest in certain lands in that village, they having purchased an occupancy holding from the tenants, many years ago before 1885, and having remained in possession thereof paying to their co-sharers their proportionate amount of the rent up to the year 1913, when they sold their proprietary interest to other co-sharers pending partition proceedings which were finally completed in 1918. Four suits in all were instituted, two by whose father , deceased, sometime before 1885 had purchased the raiyati jote in the lands now claimed by him, and two by , who had himself purchased a similar raiyati jote at about the same time. ", "2. On partition of the mauza in 1918, the lands in question in each case were allotted to the takhtas of two other sets of co-sharers who are the defendants in the respective suits and who contend that the lands in question were the bakasht of all the co-sharers and that the tenancy interest of the plaintiffs came to an end on partition. As the lands claimed by each of the plaintiffs fell partly to the share of one set of co-sharers on partition and partly to the shara of another, each plaintiff brought two suits. The facts in each case are precisely similar and the cases were heard together in the trial Court, and in the lower , and the further appeals to this Court have also been heard together. In referring to the plaintiffs and defendants the reference will be to each of them unless otherwise indicated. ", "3. The of Jamui before whom the suits came for trial found in favour of the plaintiffs and passed a decree for possession in each case. ", "4. On appeal the Subordinate Judge of Monghyr agreed with the conclusions of the and dismissed the appeals. The defendants have preferred these second appeals to this . ", "5. The material facts found by the lower are that some time before 1885, the ancestor of the plaintiffs in the one case and the plaintiff himself in the other purchased the raiyati jote of certain tenants, the purchaser being at that time co-sharer proprietors in the village. The plaintiffs, or their predecessors, remained in possession paying a proportionate part of the rent to their co-sharers from the date of the purchase until 1913, when a suit for partition was instituted before the Subordinate Judge of Monghyr by some of the co-sharers. The final partition was made in 1918, and separate possession of their interests was directed to be given to the respective co-sharers according to their takhtas. Before that date, however, namely, in 1913, shortly after the partition proceedings were instituted, the plaintiffs sold their proprietary interest to other co-sharers, who are not parties to this suit and whose names are immaterial. By the partition made in 1918, the lands in question were included in the takhtas of the defendants who endeavoured to obtain possession but found the plaintiffs still in possession with the result that proceedings under Section 145 of the Criminal Procedure Code were instituted and, in January, 1922, terminated in favour of the defendants who dispossessed the plaintiffs. ", "6. When the plaintiffs transferred their proprietary interest to other co-sharers in 1913, by an agreement then come to between them and their transferees, they were permitted to remain in cultivating possession of the lands in suit as formerly, and they were not in fact dispossessed until 1922. It has been found as a fact in the Courts below that the lands were not the bakasht of the co-sharers originally but raiyati jote land acquired by the plaintiffs or their predecessors, and this is corroborated by the Record of Rights published in 1909 which, whilst describing the lands as bakasht of the plaintiffs or their predecessors, states that they were formerly an occupancy raiyati jote acquired by them as share-holding proprietors and gives the amount of rent which the other co-sharers were entitled to under Section 22(2) of the Bengal Tenancy Act. It was argued on behalf of the appellants that the plaintiffs having been parties to the partition suit originally were bound by the decision in that suit in But far as it treated the land as bakasht. But even if they are to be treated as parties to the partition suit, notwithstanding that they sold their proprietary interest shortly after the suit was instituted and ceased to be interested any longer as proprietors, still it has not been shown that there was any issue in the suit as to the nature of the land in question. In any case if the lands were treated as bakasht in the partition, the sense in which that term was used must be explained by reference to the Record of Rights on which the partition was founded, and this clearly shows that the lands were subject to the plaintiffs' possessory right under Section 22(2) of the Bengal Tenancy Act: see 65 Ind. Cas. 586 : 3 P.L.T. 13; A.I.R. 1922 Pat. 193. Moreover a new situation arose when the plaintiffs sold their proprietary interest to other co-sharers in 1913 and took a subordinate interest from them. It is not shown that they took any further part in the partition proceedings, and in their absence their successors could not by their action deprive them of the rights, if any, which they acquired at the time when they sold their proprietary interest, In my opinion was right in holding that the lands were not the bakasht of the joint body of maliks but were originally a raiyati jote purchased by the plaintiffs or their predecessors and subject to the plaintiffs' right to hold the same on paying rent to their co-sharer and they did not by the partition cease to be lands of this nature. ", "7. The question then arises whether by the transfer of their proprietary interest to other co-sharers the plaintiffs lost their tenancy right in the land. If one regards the rights of the parties as governed by the Bengal Tenancy Act, as amended in 1907, then the interest of the plaintiffs, being a peculiar tenancy right of a co-proprietor, as pointed out in the judgment of , J., in 89 Ind. Cas. 232 : 7 P.L.T. 87 : 3 Pat. L.R. 138; A.I.R. 1925 Pat. 547 would pass to the purchasers on transfer of the proprietary right. The purchasers, however, allowed the plaintiffs to remain in possession as cultivators by an arrangement come to at the time of the transfer. That transaction was, in my opinion, tantamount to a sub-lease within the meaning of Section 22(2) of the Bengal Tenancy Act and the plaintiffs thereupon became raiyats of the holding. Under the Act as it now exists merger of interest no doubt takes place where the entire interest of the raiyat and his immediate landlord, who is either a proprietor or a permanent tenure-holder, become united in the same person but it is quite different where the occupancy right of a tenant is transferred to a fractional proprietor. In the latter case, although no occupancy right can vest in the fractional proprietor, he still acquires a separate interest in the raiyati holding paying to his co-proprietors their share of the rent. This interest passes to his transferee with the transfer of the proprietary interest and the holder can sub-let the same to another who thereupon becomes a raiyat of the holding. ", "8. It is contended, however, that the Bengal Tenancy Act has no application to the present case as the interest of the plaintiffs was originally acquired before 1885 when the first Bengal Tenancy Act was passed, and that we must consider the law then existing. Even so I am clearly of opinion that the doctrine of merger had no application in Bengal in such a case under the old law before 1885: see v. (3); v. 25 W.R. 503 and 2 Ind. Cas. 654 : 13 C.W.N. 913 and in fact it is not disputed that the plaintiffs for many years, both before and after 1885, although co-proprietors, remained in possession of the holding on payment of proportionate rent to their co-owners. It is clear, therefore, that even if the occupancy right ceased to exist the holding did not merge in the larger interest. This is also in accordance with the decisions under the Act of 1885: see 21 C. 869 : 10 Ind. Dec. (N.S.) 1211; Jawaaul Hug v. 24 C. 143 : 1 C.W.N. 166 : 12 Ind. Dec. (N.S.) 761 and 65 Ind. Cas. 281 : 3 P.L.T. 22; (1922) Pat. 55; A.L.R. 1822 Pat. 62. It follows then that if the interest acquired before 1885 did not merge it remained alive at all events up to 1913 when the plaintiffs sold their proprietary interest. I can see no reason why under the old law any more than under the present Bengal Tenancy Act this right should cease to exist because the co-sharer transfers his interest to another proprietor. It would pass, in my opinion, even before the Act of 1885 to the transferee of the (3) 10 w. R. 5. proprietary interest. Whether before the amending Act of 1907 the co-owner or his transferee could sever the interest by subletting to a tenant may be a question of some difficulty and no authority has been drawn to our attention on the subject but in my opinion, it is unnecessary to determine this point; for whatever may be said as to the retrospective effect of the first Sub-section of Section 22 , which limits the rights of a proprietor, the second sub-section, in so far as it refers to the rights of a sublessee which come into operation after the Act must, I think, apply to all cases where such a sub-lease is effected after the passing of the amending Act, whether the occupancy right was acquired before or after the passing of that Act, or the Act of 1885. The language of the sub-section seems to me to demand this construction. No vested rights are interfered with. The sub-section merely gives the holder of such a right power to sub-let his interest and defines the nature of the interest of the sub-lessee as that of a raiyat. The plaintiffs are, in my opinion, raiyats of the land claimed and were improperly dispossessed and should be restored to possession. ", "9. Whether the sub-lessee in such a case can acquire by twelve years' occupation an occupancy right it is unnecessary to determine. He is clearly not an under raiyat as he does not hold under a raiyat and there seems to be no reason why he should not in the course of time acquire an occupancy right. The point, however, does not arise for decision for such a right had not matured by twelve years' possession when the suit was instituted, and I prefer to reserve my decision on this point until the question arises. ", "10. In my opinion the conclusion arrived at by the lower Courts was right in the particular circumstances of the case and these appeals should be dismissed with costs to the contesting respondents together with interest at the usual rate. ", ", ", "11. I agree."], "relevant_candidates": ["0000185481", "0000884309", "0001474532", "0001827662"]} {"id": "0001586918", "text": ["PETITIONER: Vs. RESPONDENT: & ANR. DATE OF JUDGMENT17/04/1986 BENCH: , P.N. (CJ) BENCH: , P.N. (CJ) MISRA RANGNATH CITATION: 1986 AIR 2045 1986 SCR (2) 621 1986 SCC (2) 716 1986 SCALE (1)745 CITATOR INFO : RF 1988 SC1531 (143) RF 1992 SC1701 (9) ACT: Criminal Procedure Code , 1973 Sections 245(1) and 246 - Whether a charge should be framed against the accused or not - Test of 'prima facie' case to be applied. Sections 227 , 239 and 245 - Comparison between. Indian Penal Code , 1860 Sections 161 and 165 - Scope and difference between - Motive or reward for abuse of office - Relevancy of. Sections 415 and 420 - Ingredients of Cheating explained. Sections 383 and 384 - \"extortion\" - Ingredients of. Prevention of Corruption Act , 1947, s. 4 - Presumption raised under s. 4 is a presumption of law - It will have to be drawn against an accused once acceptance of a valuable thing by him is proved. HEADNOTE: The respondent was at the relevant time Chief Minister of the State of Maharashtra. The appellant lodged a complaint on August 9, 1982 alleging commission of offences by the respondent punishable under ss. 161 , 165 , 384 and 420 read with s. 120B , Indian Penal Ccie as also s. 5(2) read with s. 5(1)(d) of the Prevention of Corruption Act. It was alleged in the complaint that the respondent, as the Chief Minister of the State, had created seven Trusts, one of them being shown to be a Trust and that he extended favours to those who made donations to the said trusts. In all the trusts, except , the respondent, his wife, close relations and friends were associated as trustees. 622 The complaint was registered as Special Case No. 24/82 and was transferred to for trial under an order of this dated Feb. 16, 1984. Fifty- seven witnesses for prosecution were examined before the Trial Judge and 43 draft charges were placed for his consideration. The prosecution examined specific witnesses with reference to the allegations supporting the draft charges and documents were also produced to support the allegations. The Trial Judge framed 21 charges against the respondent and discharged him in respect of the remaining 22 charges relating to the offence of cheating, extortion and conspiracy. The appellant, aggrieved by the order refusing to frame charges on 22 heads by the Trial Judge, filed the present Criminal Appeal by Special Leave. Allowing the appeal in part, ^ HELD : (By the ) 1.1 A prima facie case has been established by the prosecution in respect of the allegations for charges under ss. 120B , 161 and 165 and 420 , IPC , as also under s. 5(1) read with s. 5(2) of the Act. So far as the three draft charges relating to the offence punishable under s. 384 , IPC are concerned, the learned Trial Judge was right in holding that the prosecution failed to make out a prima facie case. Therefore, except in regard to the three draft charges under s. 384 , IPC , charges in respect of the remaining 19 items shall be framed. The appeal is allowed to that extent. [696 D-F] 1.2 It is still open to the Trial Judge to consider on the material available, if anyone has to be proceeded against as a co-conspirator when the charge of conspiracy punishable under s. 120-B , IPC is framed. Under s. 319 of the Code de novo trial would be necessary, but it is in the discretion of to take a decision as to whether keeping all aspects in view any other person should be brought in as an accused to be tried for any of the offences involved in the case. This is a matter in the discretion of the trial court. [697 F-H] Per , J. (Bhagwati, C.J. Concurring) 2.1 The Code of Criminal Procedure contemplates 623 discharge of the accused by under s. 227 in a case triable by it, cases instituted upon a police report are covered by s. 239 and cases instituted otherwise than on police report are dealt with in s. 245 . The three sections contain somewhat different provisions in regard to discharge of the accused. Under s. 227 , the trial Judge is required to discharge the accused if he \"considers that there is no sufficient ground for proceeding against the accused.\" Obligation to discharge the accused under s. 239 arises when \"the Magistrate considers the charge against the accused to be groundless.\" The power to discharge is exercisable under s. 245(i) when \"the Magistrate considers for reasons to be recorded, that no case against the accused has been made out which, if unrebutted, would warrant his conviction.\" [677 B-E] 2.2 Sections 227 and 239 provide for discharge being ordered before the recording of evidence and the consideration as to whether charge has to be framed or not is required to be made on the basis of the record of the case, including documents and oral hearing of the accused and the prosecution or the police report, the documents sent along with it and examination of the accused and after affording an opportunity to the two parties to be heard. The stage for discharge under s. 245 , on the other hand, is reached only after the evidence referred to in s. 244 has been taken. Notwithstanding this difference in the position there is no scope for doubt that the stage at which the Magistrate is required to consider the question of framing of charge under s. 245(1) is a preliminary one and that the test of \"prima facie\" case has to be applied. In spite of the difference in the language of the three sections, the legal position is that if is satisfied that a prima facie case is made out, charge has to be framed. Therefore, in order to decide whether the order of discharge should be sustained or set aside, has to consider whether on the material on record, a prima facie case has been made out on behalf of the prosecution. [677 ., A.I.R. 1971 S.C. 834; , 1 S.C.R. 257; ., 2 S.C.R. 66; , 3 S.C.R. 629; ., 2 S.C.R. 229 and Superintendent and Remembrancer 624 of ., 4 S.C.C. 274, relied upon. In the instant case, the oral evidence is backed up by documentary evidence. Some of the relevant documents have interpolations and the inquiry relating to interpolation has not become final. It is indeed difficult at this stage to say that the evidence as a whole is inadequate to establish the prima facie case. The learned Trial Judge, extracted at great length both the oral evidence as also the contents of documents but there was not much of analysis to justify rejection of the material. The learned Trial Judge adopted two different standards in the matter of weighing the same evidence when he agreed to frame 21 charges which were inter-linked and interconnected with the rest of the prosecution story with reference to which the draft charges had been given. If the evidence was accepted for half the number of charges relating to similar offences, there could hardly be any scope to reject the 22 draft charges. Similarly in regard to the charge of conspiracy the facts were inter-connected and there could be no justification to reject the charge even if the other persons implicated were not before the court. The reasoning given by the learned Trial Judge in support of his order of discharge in regard to the draft charges relating to ss. 161 and 165 , IPC and s. 5(2) read with s. 5(1) of the Act, concerning these transactions cannot, therefore, be sustained. [683 D-H; 684 A-B] 3.1 Under s. 245(i) of the Code the requirement is that the evidence must be such which if not rebutted would warrant conviction of the accused. Under the law of evidence the concept of rebuttable presumption is well-known. Rebuttable presumptions of law are a result of the general experience of a connection between certain facts or things one being usually bound to be companion or effect of the other. The connection, however, in this class is not so intimate or so uniform as to be conclusively presumed to exist in every case; yet, it is so done that the law itself without the aid of a jury infers one fact from the crude existence of the other in the absence of opposing evidence. In this mode, the law advances the nature and amount of the evidence which is sufficient to establish a prima facie case and throws the burden of proof upon the other party; and if no opposing evidence is offered, the jury are bound to find in favour of the presumption. A contrary verdict 625 might be set aside as being against evidence. The rules in this class of presumptions as in the former have been adopted by common consent from motives of public policy and for the promotion of the general good; yet not as in the former (conclusive proof) class forbidding all further evidence but only dispensing with it till some proof is given on the other side to rebut the presumption raised. Thus, as men do not generally violate the Penal Code , the law presumes every man to be innocent; but some men do transgress it; and therefore, evidence is received to repel this presumption. [684 B-G] 3.2 The presumption raised under s. 4 of the Prevention of Corruption Act is a presumption of law which a court is bound to draw, once it is proved that the accused servant received or obtained a valuable thing in the circumstances mentioned in that section. [685 E] In the instant case, the learned Trial Judge should have proceeded to scan the evidence keeping in view the concept of rebuttable presumption. He also failed to take note of s. 4 of the Act while dealing with the charges under ss. 161 and 165, IPC as also s. 5(1)(a) and (b) of the Act. It is hoped that while dealing with the case after the framing of the charges, the learned Trial Judge will keep this legal position in mind and act accordingly. [685 , S.C.R. 580 and , 2 S.C.R. 592, referred to. 4.1 The main ingredients of the charge under s. 161 , IPC are : (i) that the accused was a public servant, (ii) that he must be shown to have obtained from any person any gratification other than legal remuneration; and (iii) that the gratification should be as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or disfavour to any person. [685 H; 686 A- C] Ordinarily, when the first two ingredients are established by evidence, a rebuttable presumption arises in respect of the third. [686 C] 626 4.2 For an offence under s. 165 , IPC , the essential ingredients are : (i) the accused was a public servant ; (ii) he accepted or obtained or agreed to accept or obtain a valuable thing without consideration or for an inadequate consideration knowing it to be inadequate ; (iii) the person giving the thing must be a person concerned or interested in or related to the person concerned in any proceeding or business transacted or about to be transacted by the government servant or having any connection with the official of himself or of any public servant to whom he is subordinate; and (iv) the accused must have knowledge that the person giving the thing is so concerned or interested or related. [686 C-G] 4.3 Section 165 is so worded as to cover cases of corruption which do not come within ss. 161 , 162 or 163. Indisputably the field under s. 165 is wider. If public servants are allowed to accept presents when they are prohibited under a penalty from accepting bribes, they would easily circumvent the prohibition by accepting the bribe in the shape of a present. The difference between the acceptance of a bribe made punishable under s. 161 and 165 , IPC is that under the former section the present is taken as a motive or reward for abuse of office; under the latter section the question of motive or reward is wholly immaterial and the acceptance of a valuable thing without consideration or with inadequate consideration from a person who has or is likely to have any business to be transacted, is forbidden because though not taken as a motive or reward for showing any official favour, it is likely to influence the public servant to show official favour to the person giving such valuable thing. [686 G-H; 687 A-C] 4.4 The provisions of ss. 161 and 165 as also s. 5 of the Act are intended to keep the public servant free from corruption and thus ultimately ensure purity in public life. [687 C] In the instant case, the evidence, therefore, should have been judged keeping these aspects in view. [687 C] 5. The main ingredients of the offence of extortion in s. 383, IPC are : (i) the accused must put any person in fear of injury to that person or any other person; (ii) the putting of a person in such fear must be intentional ; (iii) the 627 accused must thereby induce the person so put in fear to deliver to any person any property, valuable security or anything signed or sealed which may be converted into a valuable security; and (iv) such inducement must be done dishonestly. [690 E-H] Before a person can be said to put any person to fear of any injury to that person, it must appear that he has held out some threat to do or omit to do what he is legally bound to do in future. If all that a man does is to promise to do a thing which he is not legally bound to do and says that if money is not paid to him he would not do that thing, such act would not amount to an offence of extortion. [691 , A.I.R. 1924 All 197, relied upon. In the instant case, there is no evidence at all to show that the managements of the sugar co-operatives had been put in any fear and the contributions had been paid in response to threats. Merely because the respondent was Chief Minister at the relevant time and the sugar co-operatives had some of their grievances pending consideration before the and pressure was brought about to make the donations promising consideration of such grievances, possibly by way of recipro-city, there is no justification that the ingredients of the offence of extortion have been made out. The evidence led by the prosecution falls short of the requirements of law in regard to the alleged offence of extortion. [691 C-D] 6.1 Cheating is defined in s. 415 of the and the ingredients for that offence are : (i) there should be fraudulent or dishonest inducement of a person by deceiving him; (ii) the person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or (iii) the person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived; and (iv) in cases covered by the second part of the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property. [695 C-F] 6.2 Section 415 actually consists of two parts, each part dealing with one way of cheating - 628 (i) Where, by deception practised upon a person the accused dishonestly or fraudulently induced that person to deliver property to any person or to consent that any person shall retain any property; (ii) Where, by deception practised upon a person, the accused intentionally induces that person to do or omit to do anything which he would not do or omit to do, if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. [695 G-H; 696 A] In the instant case, the learned Trial Judge failed to analyse the evidence which he had at great length extracted keeping the proper angle of approach in view. Therefore, his conclusion is not made on a proper assessment and is not sustainable. The evidence, oral and documentary, taken together does justify the framing of a charge for the offence under s. 420 , IPC . However, the position is a presumptive one open to rebuttal by the respondent. A charge under s. 420 , IPC , should, therefore, be framed by the learned Trial Judge against the respondent. [696 B-D] 7. There must be an assumption that whatever is published in the owned paper correctly represents the actual state of affairs relating to al business until the same is successfully challenged and the real state of affairs is shown to be different from what is stated in the publication. [693 , 1 S.C.C. 560, relied upon. Per Bhagwati, C.J. (, J. concurring) 8.1 When the court is considering under s. 245 sub-s. (1) of the Code of Criminal Procedure whether any case has been made out against the accused which, if unrebutted, would warrant his conviction, it is difficult to understand as to how the court can brush aside the presumption under s. 4 of the Prevention of Corruption Act, 1947. Sub.s. (1) of s. 4 of that Act provides that where in any trial of an offence 629 punishable under 8. 161 or 165 of the Indian Penal Code or of A an offence referred to in cl. (a) or cl. (b) of sub-s. (1) of 8. 5 of that Act it is proved that an accused has accepted or obtained or has agreed to accept or admitted to obtain for himself or for any other person, any gratification (other than legal remuneration) or any valuable thing from any person, it shall be presumed, unless the contrary is proved, that he accepted or obtained or agreed to accept or admitted to obtain, that gratification or that valuable thing as a motive or reward such as is mentioned in s. 161 or as the case may be, without consideration or for a consideration which he knows to be inadequate. When the is called upon to consider whether a charge should be framed or not the question to which the has to address itself is whether the evidence led on behalf of the prosecution is such that, if unrebutted, it would justify the conviction of the accused and the court has, therefore, to examine the evidence as it stands without rebuttal and come to a conclusion whether on the basis of such evidence the court would convict the accused and where the offence charged against the accused is under s. 161 or s. 165 or cl. (a) or clause (b) or sub-s. (1) or 8. 5, the court must necessarily apply the presumption under 8. 4 while considering whether on the basis of the unrebutted evidence which is before it the court would convict the accused. Therefore, even for the purpose of considering whether a charge should be framed or not the presumption under 8. 4 must be taken into account. [632 A-G] 8.2 Sections 161 and 165 of the have been enacted by the with a view to eradicating corruption in public life. The court must therefore interpret 8. 165 according to its plain language without in any manner being anxious or astute to narrow down its interpretation. Section 165 must be construed in a manner which would advance the remedy and suppress the mischief which is intended to be curbed. [634 , 3 S.C.R. 800, relied upon. 8.3 Section 165 is wider than 8. 161 and an act of corruption not falling within s. 161 may yet come within the wide terms of s. 165 . What 8. 161 envisages is that any 630 gratification other than legal remuneration should have been accepted or obtained or agreed to be accepted or attempted to be obtained by the accused for himself or for any other person as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or disfavour to any person, or for rendering or attempting to render any service or disservice to any person, while s. 165 does not require taking of gratification as a motive or reward for any specific official action, favour or service but strikes at obtaining by a public servant of any valuable thing without consideration or for a consideration which he knows to be inadequate from any person whom he knows to have been or to be or likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant or having any connection with the official functions of himself or of any public servant to whom he is subordinate or from whom any person whom he knows to be interested in or related to the person so concerned. Whereas under s. 161 it is necessary to establish that the taking of gratification must be connected with any specific official action, favour or service by way of motive or reward, no such connection is necessary to be proved in order to bring home an offence under s. 165 and all that is necessary to establish is that a valuable thing is accepted or obtained or agreed to be accepted or attempted to be obtained by a public servant from any person whom he knows to have been or to be likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant or having any connection with the official function of such public servant and such valuable thing has been accepted or obtained without consideration or for a consideration which such public servant knows to be inadequate. [634 F-H; 635 A- E] The reach of s. 165 is definitely wider than that of s. 161 . Moreover, it is clear from illustration (c) to s. 165 that money or currency is regarded by the as a valuable thing and if it is accepted or obtained by a public servant without consideration or for inadequate consideration in the circumstances set out in s. 165 , such public servant would be guilty of an offence under that section. [635 E-F] JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 658 of 1985. ", "631 ", "From the Judgment and Order dated 23/24/29/30th April, 1985 of in Special Case No. 24 of 1982. ", ", , , , and for the Appellants , , , , , , , , , , , and for the Respondents. ", "The following Judgments of the Court were delivered C , I agree with the judgment about to be delivered by my learned brother , but there are some two or three charges in regard to which I should like to make more detailed observations since they have not been dealt fully by my learned brother and he has left it to me to consider them in some detail. Since the genesis of this appeal has been set out by my learned brother at length I do not propose to repeat what has been so ably said by him and I will confine myself only to the facts relating to the charges which are going to be dealt with by me But I may be permitted to say a few words in regard to two points which have been discussed by my learned brother in his judgment since they are of some importance and can without impropriety bear further discussion. ", "The first point arises out of a contention raised by the learned counsel appearing on behalf of the first respondent (hereinafter referred to as the 'respondent') that the presumption under Section 4 of the Prevention of Corruption Act 1947 applies only after a charge is framed against an accused and has no application at the stage when the court is considering the question whether a charge should be framed or not. It is said in geometry that a point has position but no magnitude, but we are constrained to observe that this point raised on behalf of the first respondent has not only no magnitude but has even no position. It is wholly without substance and indeed it is surprising that it should have been raised by the learned counsel appearing on behalf of the first respondent. When the court is considering under Section 245 sub-section (1) of the Code of Criminal Procedure whether any case has been made out against the accused which if unrebutted would warrant his conviction, it is difficult to understand as to how the court can brush aside the presumption under Section 4 of the Prevention of Corruption Act, 1947. Sub-section (1) of Section 4 of that Act provided that where in any trial of an offence punishable under Section 161 or Section 165 of the Indian Penal Code or of an offence referred to in clause (a) or clause (b) of sub- section (1) of Section 5 of that Act it is proved that an accused has accepted or obtained or has agreed to accept or admitted to obtain for himself or for any other person, any gratification (other than legal remuneration) or any valuable thing from any person, it shall be presumed, unless the contrary is proved, that he accepted or obtained or agreed to accept or submitted to obtain, that gratification or that valuable thing as a motive or reward such as is mentioned in Section 161 or as the case may be, without consideration or for a consideration which he knows to be inadequate. When the court is called upon to consider whether a charge should be framed or not the question to which the court has to address itself is whether the evidence led on behalf of the prosecution is such that if unrebutted it would justify the conviction of the accused and the has, therefore, to examine the evidence as it stands without rebuttal and come to a conclusion whether on the basis of such evidence the court would convict the accused and where the offence charged against the accused is under Section 161 or Section 165 or clause (a) or clause (b) of sub-section (1) of Section 5 the must necessarily apply the presumption under Section 4 while considering whether on the basis of the unrebutted evidence which is before it the court would convict the accused. We do not therefore see any substance in the contention raised on behalf of the first respondent and we must proceed to dispose of this appeal on the basis that even for the purpose of considering whether a charge should be framed or not the presumption under Section 4 must be taken into account. ", "The second point on which considerable controversy was raised before us related to the scope and ambit of Section 165 of the Indian Penal Code. I agree with my learned brother that it may not be desirable at this stage to define the precise ambit and coverage of Section 165 because that is a matter which will have to be considered by in depth when the case goes back before and the first respondent is called upon to face his trial on the charges framed against him. But it is necessary to indicate the broad parameters of Section 165 and to emphasize the basic distinction which exists between that Section and Section ", "161. It may be pointed out straight away that these two sections have been enacted by the with a view to eradicating corruption in public life. We may usefully quote here the following pertinent observations made by this Court in Re Special Courts Bill which came by way of Presidential Reference and which is reported in 1979 (2) S.C.R. 476 \"....As I read it, this measure is the embryonic expression of a necessitous legislative project, which, if full-fledged, will work a relentless break-through towards catching, through the compulsive criminal process, the higher inhabitants of Indian public and political decks, who have in practice, remained 'untouchable' and 'unapproachable' to the rule of law. 'Operation Clean Up' is a 'consummation devoutly to be wished', although naive optimism cannot obfuscate the obnoxious experience that laws made in terrorem against those who belong to the top power bloc prove in action to be paper tigers. The pathology of our public law, with its class slant, is that an unmincing ombudsman or sentinel on the qui vive with power to act against those in power, now or before, and offering legal access to the informed citizen to complain with immunity does not exist, despite all the bruited umbrage of political performers against peculations and perversions by higher echelons. Law is what law says and the moral gap between word and deed menaces people's faith in life and law. And then, the tragedy - democracy becomes a casualty.\" \"The impact of 'summit' crimes in the Third World setting is more terrible than the Watergate syndrome as perceptive social scientists have unmasked. Corruption and repression-cousins in such situations-hijack developmental processes. And, in the long run, lagging national progress means ebb ing 's confidence in constitutional means to social justice. And so, to track down and give short shrift to these heavy-weight criminaloids who often mislead the people by public moral weight lifting and multipoint manifestoes is an urgent legislative mission partially undertaken by the Bill under discussion. To punish such super offenders in top positions, sealing off legalistic escape routes and dilutory strategies and bringing them to justice with high speed and early finality, is a desideratum voiced in vain by and Committees in the past and is a dimension of the dynamics of the Rule of Law..... \" ", "The must therefore interpret Section 165 according to its plain language without in any manner being anxious or astute to narrow down its interpretation. Section 165 must be construed in a manner which would advance the remedy and suppress the mischief which is intended to be curbed. This was the canon of construction which was adopted by this in interpreting Section 165 in , 3 S.C.R. 800. There are a few decisions of ancient vintage which have dealt with the interpretation of Section 165 but since we are not finally laying down the true scope and ambit of Section 165 we do not propose to discuss these decisions. Suffice it to point out at the present stage that on its plain terms Section 165 is wider than Section 161 and that an act of corruption not falling within Section 161 may yet come within the wide terms of Section 165 . What Section 161 envisages is that any gratification other than legal remuneration should have been accepted or obtained or agreed to be accepted or attempted to be obtained by the accused for himself or for any other person as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or disfavour to any person, or for rendering or attempting to render any service or disservice to any person, while Section 165 does not require taking of gratification as a motive or reward for any specific official action, favour or service but strikes at obtaining by a public servant of any valuable thing without consideration or for a consideration which he knows to be inadequate, from any person whom he knows to have been or to be or likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant or having any connection with the official functions of himself or of any public servant to whom he is subordinate or from whom any person whom he knows to be interested in or related to the person so concerned. Whereas under Section 161 it is necessary to establish that the taking of gratification must be connected with any specific official action, favour or service by way of motive or reward, no such connection is necessary to be proved in order to bring whom an offence under Section 165 and all that is necessary to establish is that a valuable thing is accepted or obtained or agreed to be accepted or attempted to be obtained by a public servant from any person whom he knows to have been or to be likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant or having any connection with the official function of such public servant and such valuable thing has been accepted or obtained or agreed to be accepted or attempted to be obtained without consideration or for a consideration which such public servant knows to be inadequate. The reach of Section 165 is definitely wider than that of Section 161 . Moreover, it is clear from illustration (c) to Section 165 that money or currency is regarded by the as a valuable thing and if it is accepted or obtained by a public servant without consideration or for inadequate consideration in the circumstances set out in Section 165 , such public servant would be guilty of an offence under that Section Having said this much on the interpretation of Section 165 we now proceed to examine the facts on the basis of which the High has declined to frame certain charges against the first respondent. ", "We will first deal with the 35th, 36th and 37th of the draft charges which were submitted by the learned counsel for the appellant before and on the basis of which was invited by him to frame charges against the first respondent These charges related to a transaction in which according to the appellant, a sum of Rs. 8 lakhs was paid by one and his partners by way of contribution to Pratibha Pratishthan on 16th April 1981 as a motive for the granting of no objection certificate by the first respondent for letting out of certain premises by M/s Nanubhai Jewellers of which and some others were partners to . The facts giving rise to these charges in so far as relevant may be briefly stated as follows. ", "There was a firm called which was in possession of certain ground floor premises situate at 113/ 115, Mahatma Gandhi Road, Fort, Bombay as a tenant. There were various changes in the constitution on this firm from time to time but we are not concerned with these changes in the present appeal. What is material to note is that at the relevant time this firm consisted of , , his father and two other partners. The rent payable by this firm was originally Rs. 3000 per month but under a new agreement of lease dated 27th September 1979 the rent was raised to Rs. 15000 per month in consideration of the landlords giving to the tenant power to sub-let the premises. It seems that since 1979-80 this firm was incurring losses and was not in a position to make use of the premises for its own purposes and hence it decided to sub-let the entire premises barring about 500 sq. ft. to at a monthly rent of Rs. 1,24,120 and an agreement of lease was entered into between them on 12th December 1980. But it was not possible for this firm to sub- let the premises to without a no objection certificate from the Controller of Accommodation in view of the Bombay Land Requisition Act 1948. The partners of this firm therefore made an application to the Controller of Accommodation on 13th January 1981 pointing out that had approached them with a request to allow them to use the premises for the purpose of opening their branch office in Bombay and that it would be advantageous to the country to make it possible for the to open a branch office and requesting the Controller of Accommodation \"to grant the necessary permission........... to permit the to use the premises on sub-lease basis\". Though this application was dated 13th January 1981, it appears from the endorsement made on the application that it was received in the office of the Controller of Accommodation on 11th February 1981. Thereafter on 19th February 1981 an officer from the office of the Controller of Accommodation visited the premises and certain documents relating to the partnership of were handed over by and the father of to such officer. They also handed over to such officer copies of the rent receipts for November, 1973 and November, 1980 as also a copy of the registration certificate of the firm under the Bombay Shops and Establishments Act . several times went to the office of the Controller of Accommodation for no- objection certificate but he was told that the application was under process. Now the record shows that on 14th February, 1981 a noting was made in the file seeking a direction whether suppressed vacancy inquiry should be made to ascertain whether the premises could be requisitioned as a suppressed vacancy or whether the no objection certificate should be granted. Further inquiry was thereupon made for the purpose of determining whether there was a suppressed vacancy in respect of the premises and after such inquiry was completed a further noting was made on 2nd March 1981 recommending that in view of the facts set out in that noting \"it is for orders whether we may consider the request and grant\" the no objection certificate in this case. , who was an Accommodation Officer, made an endorsement on the foot of his further noting pointing out that according to the inquiry made by the office no vacancy had actually occurred at any time in the premises and there was accordingly no suppressed vacancy and moreover only a part of the premises was proposed to be sub-let by the firm of and hence the premises could not be requisitioned as a suppressed vacancy and consequently no objection certificate might be granted. The file containing these notings thereafter went to the Additional Chief Secretary who also placed his signature below that of indicating his agreement with the endorsement made by . The date below the signature of the Additional Chief Secretary is a little doubtful but we can safely take it to be 2nd March F 1981 since there is an endorsement at the bottom of the page showing that the file was received in the Secretariat of the Additional Chief Secretary on 12th March 1981 and obviously it must have gone to the Secretariat to the Chief Minister after making of the endorsement by the Additional Chief Secretary. The page of the file containing the endorsement of also contains in red ink an endorsement made by the first respondent and this endorsement reads \"in view of \"lA\", \"B\" may be done\" and below this endorsement is the signature of the first respondent and below that is the date which presently reads 16/3. We shall revert to this endorsement of the first respondent a little later when we examine the arguments urged on behalf of the parties. ", "638 ", "Now according to the evidence of he came to know from the staff of the office of the Controller of Accommodation in the first week of April, 1981 that file rebting to their application for no objection certificate had been forwarded to the first respondent. knew the first respondent quite-well since he and his father had been stitching clothes for the first respondent. therefore, after consulting his partners, went to the residence of the first respondent a day or two after he received the above information that the file had been forwarded to the first respondent. stated in his evidence that he told the first respondent about the application for permission made on behalf of the firm of and requested the first respondent to sanction grant of no objection certificate stating that he and his father were partners in that firm. The first respondent stated that he knew that the file of the firm of had been forwarded to him and that Lf the premises were to be given to a there could be no objection to grant of a no objection certificate. The first respondent, however, asked \"to make a handsome donation to \" and when asked the first respondent as to how much he would like them to donate, the first respondent asked to donate Rs. 10 lakhs. thereupon pointed out to the first respondent that there was a registered agreement between and the Government of France whereunder the Government of France had permitted the State of India to open its Branch at Paris and had consequently permitted Indo- Suez to open its Branch at Bombay and he accordingly requested the first respondent \"to name a reasonable amount for donation\". The first respondent, according to the evidence of considered his request sympathetically and asked him to donate Rs. 8 lakhs. thereupon told the first respondent that he would consult his other partners and let him know. thereafter contacted and other partners and told them that he had met the first respondent in connection with the grant of no objection certificate and the first respondent had demanded Rs. 10 lakhs for the no objection certificate but it was ultimately agreed that the firm of would pay Rs; 8 lakhs by way of donation to a Government Trust namely . and other parties agreed to donate the amount of Rs. 8 lakhs to and a cheque for Rs. 8 lakhs was accordingly issued by the partners of the firm of . took this cheque to the first respondent at his residence on 16th April 1981 and on being informed that a cheque had been brought the first respondent called one of his secretaries and asked to hand-over the cheque to him. accordingly handed over the cheque for Rs. 8 lakhs to the Secretary. was at this stage in his evidence asked the following question by the learned counsel appearing on behalf of the appellant. ", "What did the accused tell you about the ? and to this question the following answer was given by : ", "\"The accused told me that the needful would be done in the matter.\" ", " reiterated in cross-examination by the learned counsel appearing on behalf of the first respondent: ", "\"After I handed over the cheque the accused stated that he will do the needful in the matter.\" ", "The no objection certificate was thereafter issued by the office of the Controller of Accommodation on 18th April 1981. On these facts the learned counsel appearing on behalf of the appellant submitted that offences under Section 161 , 165 of the Indian Penal Code and Section 5(2) read with Section 5(1) (d) of the Prevention of Corruption Act 1947 were clearly made out on behalf of the prosecution so as to warrant the framing of charges for the said offences against the first respondent. ", "It is clear from the cross-examination of by the learned counsel on behalf of the first respondent that the case of the first respondent was that had not gone to visit the first respondent on either at the two occasions depose to by him nor had offered the cheque of Rs. 8 lakhs to the Chief Minister but that the cheque of Rs. 8 lakhs was sent by the father of directly to the Secretary, along with a letter dated 16th April 1981. The learned counsel for the first respondent contended that the donation of Rs. 8 lakhs by the partners of the firm of to had nothing to do with the grant of no objection certificate and that the two were totally distinct transactions not having any connection with each other. The order of grant of no objection certificate to the firm of had according to the learned counsel for the first respondent already been made by the first respondent on 16th March 1981 and for this purpose he relied on the endorsement in red ink made by the first respondent in the file relating to the grant of no objection certificate at the bottom of the page containing the endorsement of Shri . The argument of the learned counsel for the first respondent was that if the order for grant of no objection certificate had already been made by the first respondent on 16th March 1981 there could possibly be no connection between the grant of no objection certificate and the donation of Rs. 8 lakhs which came to be independently made on 16th April 1981. This argument is prima facie specious and does not appeal to us. We do not see any reason why for the purpose of considering whether a charge should be framed or not we should disbelieve the evidence of and . What we have to consider is whether the evidence led on behalf of the complainant in regard to this transaction is such that if unrebutted that would warrant the conviction of the first respondent. We are clearly of the view that a prima facie case has been made out on behalf of the prosecution and the evidence led before the court is such as to warrant the conviction of the first respondent unless satisfactorily rebutted. ", "The first question that we must consider is whether the endorsement sanctioning the grant of no objection certificate to the firm of Nanubhai Jewellers was made by the first respondent on 16th March 1981 or it was made on 16th April 1981 but the figure \"16/4\" below the endorsement of the first respondent was at some stage tempered with and altered to \"16/3\" by overwriting the figure \"3\" over the original figure \"4\". This is not the stage to come to any definite finding on this question because after the charges are framed, evidence may have to be led on behalf of the prosecution for the purpose of establishing overwriting of the figure \"4\" by the figure \"3\" and the first respondent may also lead the evidence to show that there is no overwriting and the original figure always was \"3\". But while we are considering the prima facie case made out against the first respondent we cannot help observing that it does appear from the original endorsement in red ink made by the first respondent at the bottom of the relevant page in the file (Ex. 815(D) that figure \"3\" has been thickly written over another figure which was presumably \"4\". The possibility cannot be ruled out that the original date below the endorsement was \"16/4\" and the figure \"4\" was overwritten by figure \"3\" with a view to showing as if the endorsement was made on 16th March 1981. This possibility does seem to receive support from the circumstance that, as appearing from the stamped endorsement on the last page of the file (Ex. 815(D), the file was received back in the office of on 18th April 1981. It is a little difficult to understand that, if the first respondent made his endorsement in red ink sanctioning the grant of no objection certificate on 16th March 1981, the file should not have gone back to until 18th April 1981. It is perhaps more probable that the endorsement in red ink was made by the first respondent on 16th April 1981 and immediately thereafter the file was sent back and received in the office of on 18th April 1981. There is also one other endorsement at the bottom of the page (Ex. 815(D) which says \"Secretary has seen it\" and it bears the date \"18/4\". All these circumstances do go to indicate prima facie that the endorsement in red ink sanctioning the grant of no objection certificate was made by the first respondent on 16th April 1981. And, if that be so, it lends considerable support to the oral testimony of and . ", " clearly stated in his evidence that when he met the first respondent at his residence \"\" on 11th or 12th April 1981 - perhaps the date was 14th April 1981 - the first respondent stated that since the premises were to be sub-let to there should be no difficulty in granting no objection certificate but he asked to make a handsome donation to Pratibha Pratishthan. The context in which the demand for a handsome donation was made by the first respondent left in no doubt that a handsome donation would have to be given by his firm in consideration of getting the no objection certificate. When asked as to how much he would like the firm of to donate, the first respondent asked to donate Rs. 10 lakhs and when pointed out that have permitted the to open its branch in Bombay and the premises were being sub-let to and requested him to name a reasonable figure for the donation, the first respondent considered the request of sympathetically and asked him to donate Rs. 8 lakhs. The circumstance that had to request the first respondent to name a reasonable amount for the donation and that the first respondent considered this request reasonably, does go to show that pressure was exercised on to make a handsome donation as consideration for the grant of no objection certificate and the ultimate figure demanded was Rs. 8 lakhs. If the donation was being made voluntarily why should any request have been made by to the first respondent to name a reasonable amount and where could be the question of such a request being considered sympathetically by the first respondent. Moreover, when contacted and his other parterns after this meeting with the first respondent, he clearly told them that the first respondent had demanded Rs. 10 lakhs for the no objection certificate but it was ultimately agreed that the firm of M/s would pay Rs. 8 lakhs by way of donation to Pratibha Pratisthan. There is no reason to disbelieve the evidence given by to this effect. Since the rent which the firm of M/s. was to get from was phenomenal and it was more than eight times the rent payable by it to the landlord, the partners of the firm of M/s. obviously did not mind paying the donation of Rs. 8 lakhs for getting the no objection certificate. The cheque for Rs. 8 lakhs was made out and according to the evidence of , he went to the residence of the first respondent \"\" on the same day, namely 16 April 1981 and handed over the cheque to the Secretary as directed by the first respondent. It is significant to note that the Order sanctioning the grant of no objection certificate was made by the first respondent on the file on 16th April 1981, i.e. on the same date on which the cheque for Rs. 8 lakhs was received from the firm of M/s. and the no objection was issued within two days after the receipt of the cheque. These are tell-tale circumstances which prima facie go to show that the grant of no objection certificate and the donation of Rs. 8 lakhs were closely related transactions and that one was in fact the consideration for the other. It may also be noted that the firm of M/s. had been incurring losses for the last more than two years and if that be so, it is difficult to understand why the partners of this firm should have voluntarily decided to make a donation of Rs. 8 lakhs. What altruistic motive could have inspired them to have made such a handsome donation when they themselves were incurring losses. Prima Facie, the inference to be drawn from these circumstances is irresistible and unless the first respondent can rebut this evidence, it is difficult to reject the contention of the prosecution that a prima facie case has been made out against the first respondent in respect of this transaction. It is undoubtedly true that in cross-examination by the learned counsel for the first respondent stated that no objection certificate has been granted on the merits of the application and not as a favour to the firm of M/s but this statement cannot make any difference to the correct evaluation of the evidence because whatever be the view of as to whether the no objection had been granted to him on merits or not, it is the totality of the evidence which has to be considered and even if the firm of M/s were entitled to obtain no objection certificate on merits, still the first respondent could bargain for a handsome donation as quid pro quo for granting the no objection certificate which was entirely within his power to do so. ", "We are, therefore, of the view that a prima facie case was made out on behalf of the prosecution against the first respondent in respect of the transaction of no objection certificate and 35th, 36th and 37th charges should have been framed against the first respondent. ", "That takes us to draft charges 29, 30, and 31 arising out of the donations made by and to Pratibha Pratishthan. It is necessary to state briefly the facts relating to this transaction in order to be able to decide whether a prima facie case has been made out on behalf of the prosecution against the respondent in regard to this transaction and evidence led on behalf of the prosecution is such that if unrebutted it would warrant the conviction of the respondent on these charges. These draft charges are sought to be made good on the basis of the oral evidence of the sole witness the documentary evidence produced in the course of his deposition. We will begin by first referring to the evidence of and whilst we consider that evidence we shall refer to the various documents produced in the case. ", " was known to the respondent for more than 15 years and in fact the respondent was a family friend of , having been a patient of the father of who is a leading Ear, Nose, and Throat specialist in Bombay. In 1974-75 entered the construction business and started a limited company called . We are not concerned with this company in the present appeal. There were also two other concerns started by in 1979 in course of the construction business but these are also not relevant for our purpose except that we may state the names of these two concerns, namely, Constructions and . In January, 1981 started a partership in the name of Enterprises. It is this firm which figures prominently in the history of this case. There were also four other partnership firms started by in the same year and these were , Developers, and . There was also a private limited company floated by in the name of Constructions Private Limited. These various concerns of undertook construction contracts which were started sometime in 1980 and 1981. One of the construction works undertaken by was in the name of Enterprises and this construction work was undertaken under an agreement with . It appears that in respect of the construction work undertaken by the various concerns of there was a stalemate in or about April 1981 and the construction works were held up for want of cement. The concerns of had received some small quantities of cement but the quantities received were wholly inadequate and no further quantities of cement were available because cement was a controlled item and unless allotment of quota of cement was made by , it was not possible for any builder to obtain cement. Now the record shows that the entire control over allotment of quota of cement was retained by the respondent with himself in his capacity as Chief Minister and no allotment could be made without his sanction or approval. Since the concerns of were starved of cement and they could not proceed with the construction works undertaken by them without cement they made applications to the respondent from time to time for allotment of quota of cement. We have on record four applications dated 28th April 1981, one being Ex. 355 and 355A made by Construction Private Limited, the second being Ex. 356 and 356A addressed by , the third being Ex. 357 and 357A addressed by and the fourth being Ex. 358 and 358A addressed by . All these applications were addressed to the respondent in his capacity as Chief Minister. The application of Constructions Private Limited Ex. 355 and 355A pointed out that until the date of the application the company had been allotted only 30 metric tonns of cement and requested the respondent to allot at least 250 metric tonns of cement. Similarly the application of Ex. 356 and 356A complained that the firm had not received any supply of cement at all and requested the respondents to allot at least 250 metric tonns of cement. So also the application of Ex. 357 and 357A stated that the firm had received until the date of the application only 50 metric tonns of cement and requested the respondent to allot at least 250 metric tonns of cement. And lastly the application of Enterprises Ex. 358 and 358A also pointed out that no allotment of cement had been received by them and requested the respondent that at least 100 metric tonns of cement should be allotted to them. The record shows that pursuant to the application of Construction Private Limited Ex. 355 and 355A allotment of 200 metric tonns was made to the company but this allotment lapsed and the company could not obtain delivery of any quantity of cement under this allotment. Subsequently, however, another order of allotment was made on 23rd July 1981 Ex. 693 under which 100 metric tonns of cement was allotted and the company could obtain delivery of 100 metric tonns of cement under this order of allotment. The allotment of 200 metric tonns of cement was also made on the application of Ex. 356 and 356A but the firm could obtain only 74 metric tonns of cement under this letter of allotment and the balance lapsed. Thereafter another order of allotment was made on 23rd July, 1981 granting 25 metric tonns of cement and this quantity of cement was lifted by the firm . Similarly 200 metric tonns of cement was lifted on the application of and 357A but this allotment also lapsed and could not obtain the delivery of any quantity out of 200 metric tonns allotted to them but in this case also a subsequent order of allotment was made on 23rd July, 1981 alloting 50 metric tonns of cement and this quantity of 50 metric tonns was lifted by . The same position obtained in regard to Messrs Enterprises. In the case of this concern also allotment of 100 metric tonns was made on the application Ex. 358 and 358A but this allotment lapsed because it was made in such a manner that this concern could not obtain delivery of any quantity out of 100 metric tonns allotted to it. Subsequently on the same date as in the case of the other three concerns, that is, on 23rd July, 1981 an order was made alloting 50 metric tonns of cement to Enterprises and delivery of 50 metric tonns of cement was taken by this concern pursuant to the order of allotment. It will thus be seen that in the case of these four concerns, namely, Construction Private Limited, , and Enterprises, only 74 metric tonns of cement could be obtained prior to 4th July, 1981 and it was admitted by in the course of his evidence that it was correct that till 15th June, 1981, that he had not received more than 400 metric tonns of cement against the four applications dated 28th April, 1981 Exs. 355 and 355A to 358 and 358A. It was only when as a result of further representations made to the respondent, new orders of allotment were issued on 23rd July, 1981 that some quantities of cement could be obtained by these four concerns of . ", "We have already referred to the fact that had undertaken construction work under the agreement with . On account of want of cement this construction work had almost come to a stand-still in June, 1981. had also not been able to obtain any quantity of cement in respect of the other construction work undertaken by them at Villa Parle (East) despite the application dated 28th April, 1981 made by them to the respondent. The two applications were accordingly made to the respondent on 24th June, 1981, one by , marked as Ex. 354, pointing out that in respect of the construction work at Villa Parle (East) they had till then received only 50 metric tonns of cement and requesting the respondent to allot atleast a further quantity of 50 metric tonns and the other by , marked as Ex. 353, pointing out that the Society had till then received only 478 metric tonns of cement and requesting the respondent to arrange to allot atleast another 250 metric tonns. It is not clear from the record whether 50 metric tonns of cement stated in the application of to have been received by them had in fact been received or that merely on the basis of the allotment made and the price paid, a statement was made that 50 metric tonns had been received. But it is not necessary for the purpose of the present appeal to come to a finding whether 50 metric tonns had in fact been actually received by before the application Ex. 354 was made by them. It is sufficient to state that both these applications Exs. 353 and 354 were granted by the respondent and two permits were issued on 4th July, 1981, one for 50 metric tonns in favour of and the other for 200 metric tonns in favour of . Now it is common ground between the parties that one metric tonn of cement would comprise 20 bags and 50 metric tonns would be equivalent to 1000 bags while 200 metric tonns would be equivalent to 4000 bags. The record shows that on 4th July, 1981 being the same date on which the two permits were issued for 50 metric tonns and 200 metric tonns respectively, two donations were made to , one for Rs. 30,000 made by and the other for Rs. 1,20,000 made by both being concerns of . The donations of Rs. 30,000 by Construction Private Limited was made by means of a cheque dated 22nd June, 1981 while the donation of Rs.1,20,000 by was made by a cheque dated 4th July, 1981. It was admitted by that though the cheque for Rs. 30,000 dated 22nd June, 1981 was given to alongwith the cheque dated 4th July, 1981 for Rs. 1,20,000. On these facts the prosecution contended that by obtaining for the benefit of the two donations of Rs. 30,000 and Rs. 1,20,000 in consideration of the grant of the two permits in favour of and the first respondent had committed offences under sections 161 and 165 of the Indian Penal Code, sub- sections 1(d) and (2) of section 5 of the Prevention of Corruption Act, 1947. ", "We shall presently proceed to consider whether these charges could be said to have been prima facie made out on behalf of the prosecution. But at this stage, it is necessary to refer to two other applications made by and , both being concerns of . It seems that has started a new project at in May, 1981 and they needed cement for this project and they accordingly made an application dated 15th June, 1981 Ex. 648 and 648A for allotment of at least 500 metric tonns of cement. also made another application dated 23rd June, 1981 Ex. 649 and 649A for allotment of at least 250 metric tonns of cement and though this application was in the name of it was in respect of the same project. Now according to the evidence of was at the relevant time Secretary, , the respondent mentioned to him on 24th June 1981 that one would be giving to him i.e. to on 25th June 1981 a set of applications for cement indicating the quantity to be sanctioned and that these proposals had his approval and therefore the should take action on these cases and thereafter report to the first respondent for confirmation. On the next day i.e. 25th June 1981 saw and handed over to him three sets of applications each with a covering statement showing the quantity asked for and the quantity to be sanctioned and according to these statements the total quantity to be sanctioned came to 9700 metric tonns. thereupon made a note in the file on the same day i.e. 25th June 1981 setting out the above facts and stating that \"necessary action may be taken and thereafter the papers may be submitted to through Secy. F & C.S.D and Min. F &CS.\" This note made by in the file is Ex. 420. The endorsement at the foot of this note shows that it was addressed to the Deputy Secretary with a copy to the Minister, Food and Civil Supplies for information. It was recorded there by that he had also \"submitted a note separately to for confirmation of the action being taken by the \". A note addressed to the respondent was accordingly made by simultaneously and it was in the following terms : ", "\" may kindly recall that he had mentioned to me yesterday (24th June 1981) that will be giving to me to-day applications for cement indicating the quantity to be sanctioned observed that the cases had his approval and the should take necessary action thereon and report to for confirmation ", "2. saw me to-day (25/6/81) and gave me 3 sets of applications with statements indicating the quantity applied for and the quantity to be sanctioned. In all there are 58 applications and the total quantity to be sanctioned comes to 9,700 metric tonns. ", "3. A copy of the 3 statements is annexed to this note. ", "4. Necessary action is being taken separately on the applications. The main papers will be submitted to after issue of allotment orders. may kindly see for confirmation of action being taken by the .\" ", "This note was submitted to the respondent and it is marked Ex. 421. It is the evidence of that the file containing this note was returned to him on the same day, that is, 25th June 1981 and when the file came back to him, this note bore the signature of the respondent and the date in his hand-writing and thereupon noted on the reverse of the note \"Please keep with papers dealing with these cases\" and addressed this note to the Deputy Secretary. Now the note Ex. 421 as exhibited contained the following endorsement made by the respondent : ", "\"'A' - Is it ? Where is 'B' ? Secy. to withdraw action and to decide on merit as usual. I am indeed surprised at such notings.\" ", "650 ", "just above his signature and date. The evidence of is that this endorsement which has been marked Ex. 421A was not there at the time when the file was received by from the respondent on 25th June 1981 and it was for the first time in September 1982 when , who was then Chief Secretary, called to his office and showed him the note Ex. 421 along with another note Ex. 419A that he saw the above endorsement of the respondent. The suggestion therefore clearly was that this endorsement was made by the respondent some time between 25th June 1981 and September 1982, presumably when a writ petition was filed in challenging the allotment of quotas for cement. It is not necessary for the purpose of deciding the present appeal to come to a definite finding on the question whether this endorsement was in fact made by the respondent on 25th June 1981 or it was subsequently interpolated by him. But we are constrained to make some observations in regard to this endorsement, since the learned Judge has adversely commented on in regard to his role in this affair. We do not think the learned Judge was justified in making adverse comments against . If the respondent had not mentioned to that would be giving him a set of applications for cement indicating the quantity to be sanctioned and that these proposals had his approval and therefore the should take action on these cases and thereafter report to the first respondent for confirmation, it is extremely difficult to believe that would have made the note Ex. 420 on the file. It would be foolhardy on the part of , a senior and experienced Officer, to make a false endorsement on the file attributing to the Chief Minister of the something which he never said. The note made by also proceeded to state that had given him 3 sets of applications each with a covering statement showing the quantity asked for and the quantity to be sanctioned and that necessary action should be taken and thereafter the papers should be submitted to the first respondent through Secretary, and Minister, . If the first respondent had not given him the instructions set out in the note, would , if he were in his senses, ever direct the that the papers should be submitted to the first respondent after taking necessary action. That would be the easiest way for him to secure his exposure. Then again, if no such instructions had been given to him by the first respondent, is it possible that he would have prepared the note Ex. 421 and submitted it to the first respondent on the same day. If had decided to allot 9700 metric conns of cement to different applicants on his own, presumably with a view to obliging these applicants for consideration or even otherwise, and to palm it off on the first respondent by falsely attributing the authority to do so to the first respondent, it passes one's comprehension as to why he should have on the same day submitted note Ex. 421 to the first respondent which would expose his deception and fraud and provide an opportunity to the respondent to immediately contradict and expose him. would in that event be inviting his own ruination. It is indeed difficult to attribute such irrationality and foolishness to a senior Officer like . Moreover, it is interesting to note that if the note Ex. 421 submitted by to the respondent was wrong and the respondent had not given to the instructions set out in that note, would the respondent have rested content with merely making an endorsement at the foot of the note saying that he was surprised at such notings. The first respondent would have been shocked at the statement contained in the note falsely involving the respondent and dishonestly attributing to him authority which he had not given and he would have immediately called upon to explain his conduct in making the note and taken action against him besides stopping the allotments of cement referred to in the the statements accompanying the note. But nothing of this sort was done by the first respondent. It it also significant to note that on 1st July 1981 two allotments orders were issued and on 2nd July 1981 a third allotment order was made allotting in the aggregate the precise quantity of 9700 metric tonns referred to in the note Ex. 421. It is unfortunate that the statements which accompanied the note Ex. 421 were not available and could not be exhibited in evidence. The case of the prosecution was that the original of Ex. 421 and the three statements accompanying that note were abstracted at some stage by the first respondent or someone on his behalf and that is the reason why Ex. 421 as produced and exhibited in court was not the original but the photostat copy which had been taken out in the secretariat before the original was lost. It is not necessary for the purpose of the present appeal to resolve this controversy raised on behalf of the prosecution and to come to a definite finding upon it. But even on the material on record, there is reason to believe that the three statements which accompanied the note Ex. 421 must have formed the basis of the three allotment orders dated 1st July, 1981 and 2nd July, 1981 part of Ex. 421, because like the statements, the allotment orders were also three in number and the aggregate quantity allotted under the three allotment orders was 9,700 metric tonns which is the same as the aggregate quantity shown in the three statements. Moreover, the application dated 15th June, 1981 Ex. 648 and 648A made by and the application dated 23rd June, 1981 Ex. 649 and 649A made by figured in the first allotment order dated 1st July, 1981 and in respect of these two applications, it was stated in the allotment order that it had been decided to allot 300 metric tonns of cement to and 250 metric tonns of cement to . ", "Obviously, therefore these two applications formed part of the applications which were handed over by to , as mentioned in Exs. 420 and 421 and the fact when it was put to that these two applications were in the possession of , found it difficult to deny it. Furthermore the record shows that in respect of these two applications, letters of allotment of 300 metric tonns of cement to Builders and 250 metric tonns of cement to were issued on the same day, namely, 1st July, 1981 on which the first order of allotment, part of Ex. 421 in respect of 21 applicants, including Builders and , was made by . It would thus appear prima facie that Builders and obtained 300 metric tonns and 250 metric tonns respectively of cement on applications submitted by them through the intervention of . ", "We may now revert to the dontions of Rs. 30,000 and Rs.1,20,000 made by and respectively. The case of the prosecution was that these two donations were made by the two concerns of in order to obtain allotment of cement which was badly needed for the construction works undertaken by the various concerns of . This was disputed on behalf of the respondent who contended that these two donations had been made by Construction Private Limited and voluntarily and they had nothing to do with the allotment of cement to the concerns of . Now there are certain salient features in regard to this transaction which in our opinion go to show prima facie that these two donations were connected with the allotment of cement to the concerns of . In the first place, there is no reason why any of the concerns of should have made such large donations to . It was admitted by that none of his concerns had made any profit and in fact he conceded in evidence that the donations made by his two concerns to the \"had no connection with the profits of the two concerns or of any of his other concerns.\" He also admitted in evidence that Construction Private Limited had made a donation of only Rs. 2,422 in the calander year 1980 and a donation of only Rs. 2, 251 in the calander year 1981 and so far as are concerned, they had not made any donation at all and apart from this the only donations made by Construction Private Limited and were the donations of Rs. 30,000 and Rs. 1,20,000 to . It is in these circumstances prima facie difficult to understand as to what prompted Construction Private Limited and to make the donations of Rs. 30,000 and Rs. 1,20,000 respectively to when they were not making any profits at all and they had not made any substantial donations to any other charities, despite large and frequent demands on the family. Moreover it is not without significance that the two donations of Rs. 30,000 and Rs. 1,20,000 were handed over to on the same day, namely, 4th July, 1981 on which the permits were issued by the authorities alloting 50 metric tonns to Enterprises and 200 metric tonns to . When was asked as to how it happened that he paid the two cheques of Rs. 30,000 and Rs. 1,20,000 on 4th July, 1981 which was also the date of the two permits, the answer given by him was that it was purely coincidental. It is true that sometimes coincidences do happen but a coincidence of this kind is sufficient to prima facie support the inference that the two donations of Rs. 30,000 and Rs. 1,20,000 were connected with the grant of the two permits. It is interesting to note that prima facie one other correlation can also be perceived between the two donations of Rs. 30,000 and Rs. 1,20,000 made by on behalf of his two concerns and the quota of cement allotted under the two permits. The donation of Rs.30,000 could be said to have been worked out at the rate of Rs. 30 per bag for the permit of 50 metric tonns, that is, 1000 bags of cement while the donation of Rs. 1,20,000 could be said to have been arrived at by applying the same rate of Rs. 30 per bag in respect of the permit of 200 metric tonns, that is, 4000 bags of cement. When was asked to explain how it was that for the permit of 50 metric tonns, that is, 1000 bags, he made a payment of Rs. 30,000 which worked out to Rs. 30 per bag and for the permit of 200 metric tonns, that is, 4,000 bags he made payment of Rs. 1,20,000 which worked out to the same rate of Rs. 30 per bag, the only answer which could give was that it was a coincidence. It is indeed strange that coincidences should take place in this transaction. It may also be noted and this too is not a factor without significance that the cheque for Rs. 30,000 was made out on 22nd June, 1981 but it was retained by until 4th July, 1981 and it was only on 4th July, 1981 when the two permits were issued alloting quota of cement that both the cheques of Rs. 30,000 and Rs. 1,20,000 were handed over by . ", "We, therefore, reach the conclusion that on the evidence led on behalf of the prosecution a prima facie case must be held to have been made out against the respondent in respect of the transaction of the donations of Rs. 30,000 and Rs.1,20,000 and 29th, 30th and 31st charges ought in the circumstances to have been framed against the respondent. ", "Then we go on to consider 23rd, 24th, 25th, 41st, 42nd and 43rd of the draft charges relating to the transactions of (hereinafter referred to as \"\"). was started sometime prior to 1968 as a for promotion and engagement of the performing arts. granted land to from Block III Backbay Reclamation area in two phases on leasehold basis. First, an area admeasuring 5 acres, that is, 20,200 sq. metres was granted under Government resolution dated 10th May 1968 and then subsequently additional area admeasuring about 3 acres, that is, 10219.4 sq. metres was granted under Government resolution dated 15th May 1970. Both the grants were on the same terms and conditions and the ground rent payable by was Re.1 per annum in respect of each of these two areas of land. It was provided that will construct on the plot necessary buildings and structures for carrying out its performances including residential quarters for essential staff working in the and for visiting artists and students provided the would be at liberty to make available these facilities to outside parties at such compensation as it may deem fit so long as the income from the land and buildings was appropriated for the objects of the and further a sum equal to 25% of the net annual profits of the was credited to . was given a right to nominate two representatives on the Council of the . Thus, a plot of about 8 acres in the Backbay Reclamation area was granted to for the purpose of carrying on its activities. The Minister of Culture and the Chief Secretary to were both nominated ex-officio Member on the Council of . ", "Subsequently, with a view to enabling it to meet its operating expenses made an application to by its letter dated 4th March 1971 requesting the for permission to utilise upto one-fourth of the area granted to it for the purpose of putting up high grade shops and offices. This request of was granted by . By a resolution dated 31st October 1972, the granted permission to to use one-fourth area of the land for putting up high grade shops and offices on condition that 50% of the net income accruing out of the commercial user of this area would be payable to subject to certain conditions which are not material for the purpose of the present appeal. But, since it would take sometime for high grade shops and offices to be put up on one-fourth area of the land, applied to the of India for a bridging loan of Rs. 3 crores and this loan was sanctioned by the of India in February 1974 on the security of mortgage of three-fourths of the plot and the buildings constructed thereon. This necessitated the sub-division of the plot approximately into one fourth and three fourth and the of Mahrashtra accordingly agreed to grant one lease in respect of 23689.90 sq. metres of area on which auditoriums and schools of were to be built and another lease in respect of 7892.59 sq. metres on which the commercial complex might be put up. thereafter drew the first instalment of loan of Rs. 80 lakhs from the of India in March 1976 and carried on construction of its building on three-fourth area of the plot. ", "The result was that could use three-fourth area of the plot for carrying out its own purposes subject to payment of 25% of the net income of the to while one-fourth area of the plot could be developed by for the commercial complex with a view to generating income. Now, at this time F.S.I. was 3.5 and applying it to the entire plot of about 8 acres, was entitled to build with a fairly large rentable area and on this basis prepared plans of a commercial building with rentable area of 400,000 sq. ft. But, to the great dismay and consternation of the Directors of , a Government resolution was passed an 23rd March 1978 providing that since two separate leases were given to in respect of 7,892.59 sq. metres and 23,689.90 sq. metres, that is, approximately 1/4 and 3/4 area of the plot, the construction to be carried \"on the land should be with reference to the F.S.I. permissible for each individual plot separately\". The consequence of this Government resolution was that on the basis of F.S.I. of 3.5, could build a commercial building having a net rentable area of only 240,000 sq. ft. instead of 400,000 sq. ft. Moreover, prior to the issue of this Government resolution, a notification was issued by (hereinafter referred to as \"\") on 19th June, 1977 reducing the F.S.I. from 3.5 to 1.33. On the basis of this new F.S.I of 1.33, the net rentable area of the commercial building which could be put up by was still further reduced to 90,000 sq. ft. instead of the required 400,000 sq. ft. These developments which took place in 1977- 1978 jeopardized the very existence of . ", "One was at all material times Managing trustee of and apart from him there were ten other trustees including . When found itself in this difficult situation where it would be almost impossible for it to carry out its activities, addressed a letter dated 1st January 1979 to the then Chief Minister requesting him to permit to construct a commercial building with a rentable area of 400,000 sq.ft. This letter was followed by meetings with various officers in which participated alongwith one . Now, was not in any way officially connected with . He was the Managing Director of as also Chairman of the Board of Directors of and which are admittedly concerns. Though did not hold any official position in , he took an active part in the negotiations with the various officers of in 1979 for the purpose of obtaining relaxation of the notification dated 19th June 1977 and resolution dated 23rd March 1977 so as to enable to construct a commercial building of net rentable area of 400,000 sq.ft. The fact that and both participated in these negotiations is clearly established by the Note dated 20th July 1979 addressed by to (part of Ex. 247)and the letter dated 18th July 1979 addressed by to Minister, (part of Ex. ", "247). It is obvious that both of them acted in unison in carrying on the negotiations for the purpose of rescuing from the precarious position in which it found itself. But, their efforts did not succeed. ", "When the respondent came to power as Chief Minister, efforts were renewed on behalf of to obtain the necessary relaxation which would enable it to put up a commercial complex which would generate sufficient income. was obviously on very good terms with the respondent. He was appointed by the respondent as Chairman of to deal with the problem of slums and dilapidated houses and he was given an office in Mantralaya. He was also appointed a trustee of on 18th October 1980. He started negotiations with in February- March 1981 and put forward a scheme under which the entire plot of 8 acres would be treated as covered by one lease so that the net rentable area available to for building purposes would be determinable by applying to the F.S.I. to the whole of the area of the plot instead of applying it separately to each of the two areas into which the plot was decided. The scheme provided that the commercial development of the plot would be confined to one-fourth of the area of the plot, the F.S.I. used for such development would not exceed 450,000 sq.ft., that is 1.33 for the entire plot and shops and office would be restricted to 50% of this area and the balance would be used for a hotel and the construction on the remaining three-fourth area though in excess of 1.33 for the whole plot, would be exempted from BMRDA Notification and would be \"approximately 1.00 for the whole plot\" so that the total F.S.I. used would be approximately 2.33 and the income of would be \"restricted to 50% of the net income from the commercial-cum-hotel development after meeting all expenses of .\" The scheme also provided for making of donations to . The discussions in this regard were carried on by with (Chief Secretary), (Special Secretary Finance) (Secretary, Finance) and (Secretary, Urban Development) as also with the respondent. But, these discussions did not yield any positive results until 24th March 1981 when prepared a Note (Ex. 229) and handed it over to in his chamber on the same day. This note set out the scheme proposed by but it did not make any mention of the donations to be made to . Some reliance was placed on behalf of the respondent on the fact that this note did not make any reference to donations to be made to and it was sought to be argued that there was in fact no such talk prior to the date of this note. But this argument is futile because clearly admitted in his evidence that in February 1981 he had discussed this scheme with the respondent, , , and and that he had made it clear to the respondent and these officers that the donee of the scheme was . There can therefore be no doubt that in February 1981 the question of donations to be made to was discussed between on the one hand and the respondent and other officers on the other hand. Now as mentioned above the note Ex. 229 was handed over by to on 24th March 1981 and following upon this note there was discussion between and in the presence of on 25th March 1981 when the scheme put-forward by was discussed. It was agreed between on behalf of and on behalf of that the entire plot of 8 acres would be covered under one lease on condition that the mortgage in respect of 3/4th area of the plot is redeemed, the commercial development of the plot would be confined to 1/4th area of the plot and full FSI at the rate of 1.33 in respect of the entire area of the plot would be available to and this would give almost 4,50,000 sq. ft. of floor space area for construction of buildings including the existing construction already made by to the extent of 95,000 sq. ft. and intimated to that it may not be possible to override BMRDA Notification restricting FSI to 1.33, but that floor space area available on the basis of 1.33 FSI in respect of the entire area of the plot should be sufficient for for construction. and pointed out that on 1/4th area of the plot, could build a residential hotel in addition to high-grade shops and offices for which permission was already given. agreed to this suggestion provided \"not less than 50% of the area is allotted to be utilised for hotel and the balance for the purpose of shops and offices\". This condition proposed by was found acceptable to and . It was also agreed that the condition providing for payment of 25% of the net profit of the to would remain unchanged and so also would the provision that 50% of the net income from the commercial complex should be paid by to . ", "Now at this meeting held on 25th March 1981 the question of making donations to was also discussed as a part of the negotiations and stated that the following donations would be made by either by itself or through others : ", "i) Initial donation of Rs. 1 crore within 6 months of 's confirmation. ", "ii) After 3 years i.e. on completion and commissioning of the commercial complex - Rs. 25 lakhs per year. ", "660 ", "iii) After 8 years i.e. 5 years after the completion of the commercial complex - Rs. 50 lakhs per year. ", "But he requested that these donations should be considered as deductible expenses while computing the net income so that 50% of the net income payable to should be arrived at after deducting the donations from the net income. But this request for deductibility of the donations in computation of the net income was not acceptable to and . ", "Immediately, after the aforesaid discussion between on the one hand and and on the other, they all went to the respondent and informed him of the agreement arrived at with . The respondent approved and confirmed the agreement but it was made clear to and it was agreed by him that the donations made to would not be deductible as expenses of while computing its net income. Thus it was clearly agreed that donations would be made to by by itself or through others but that they would not be deductible in computing the net income of the commercial complex of . The argument urged on behalf of the respondent which found favour with the learned Trial Judge was that when the respondent declined the request of to permit deductibility of the donations made to the entire scheme foundered and thereafter there was no question of making any donations to . This contention of the respondent appears prima facie to be unsustainable for the following reasons. ", "In the first place there is a noting made by in the Government file relating to on 29th April 1981 part of Ex. 230 where it has been clearly recorded by him; ", "\"It needs to be recorded that in the meeting held first by with and latter when and explained the agreement reached to C.M. both on 25-3-81, it was clearly stated and agreed that the payments to would be after 's net income was computed and were not to be considered as 's expenses while computing net income.\" ", "This noting made at a time when no controversy had arisen at all must prima facie be accepted as correct. Moreover, its correctness was deposed to by when he was in the witness box. of course disputed that any such agreement was arrived at between him on the one hand and Gavai and the respondent on the other but prima facie we are inclined to accept the testimony of to this effect because we would prefer documentary evidence to oral evidence in case of conflict between the two. It is a trite saying that witnesses may lie but documents do not. ", "Secondly, it is significant to note that a donation of Rs. 1 crore was made by four concerns to which was a in which the respondent, his wife, , his wife and were trustees. This donation of Rs. 1 crore was made up of four cheques, one dated 31st July, 1981 for Rs. 30 lakhs issued by , the second also dated 31st July, 1981 for Rs.60 lakhs drawn by , the third dated 17th August, 1981 for Rs. 50 lakhs drawn by and the fourth dated 1st September, 1981 for Rs. 10 lakhs drawn by , all four being concerns. It is interesting to note that these four cheques making up in the aggregate a donation of Rs. 1 crore were paid over to within six months of the order dated 6th May, 1981 issued by granting relaxation asked for by , thus apparently complying with the scheme put forward by under which the initial donation of Rs. 1 crore was to be made to but, as admitted by himself in paragraph 35 of his evidence, \" did not make the proposed donation to the because the did not agree to exempt the entire amount as deductible expense...... We agree to pay the donations to the because the trust agreed to exempt the entire amount under the Income Tax Act \". It is thus obvious that the donation of Rs. 1 crore which was to be made to within six months of the 's confirmation under the agreement arrived at on 25th March, 1981 was diverted to in which the respondent and his wife were trustees alongwith and his wife and . It is indeed difficult to understand as to why these four concerns should have decided to make donations of an aggregate sum of Rs. 1 crore to which was a newly set up without any charitable activity to its credit. It also strains one's credulity to believe that it was a mere co- incidence that the donation made to was of Rs. 1 crore which was the identical figure of the donation agreed to be made to . When was asked as to how he happened to fix the figure of Rs. 1 crore for the donation made to , his answer was : \"I cannot say who suggested the figure of Rs. 1 crore. There was no particular reason why the figure of Rs. 1 crore had been arived at.\" It is also strange that to make the figure of Rs. 1 crore a post-dated cheque for Rs. 10 lakhs was issued by . This cheque was sent to on 23rd August, 1981 and it was dated 1st September, 1981. It is difficult to understand why should have given a donation of Rs. 10 lakhs to by a post-dated cheque when on the date of handing over of the cheque, it did not have sufficient funds in the bank. The only answer which could give in explanation, which is rather strange conduct, was that \"expected that sufficient funds would be deposited in its account by 1.9.1981\". There is another circumstance which is of a baffling character - indeed it defies any rational conduct - and this circumstance is that the four cheques representing the aggregate donation of Rs. 1 crore were handed over by these four concerns to by way of donation without any resolution being passed by the Borad of Directors in that behalf and strangely enough these four cheques paid by way of donation were credited as deposits in the books of . When examined on this point, stated, \"Initially all the four amounts were to be treated as deposits and were to be treated later as donations after obtaining the sanction of \". This is indeed a strange explanation which is prima facie difficult to believe. What would happen if of any of these four concerns were to refuse to sanction the donation. would then have to return the amount of the donation but if this amount was already spent by for purchasing land for the purpose of building a hospital, how would be able to return the amount of the donation and even if the amount of the donation were returned, it would be without interest because there was admittedly no provision for payment of interest and a concern making the donation would lose interest on the amount of the donation for the period during which the amount remained with . Prima facie the entire episode relating to this donation of Rs. 1 crore to appears to be bizarre. Obviously - and here again we are expressing our prima facie view this donation of Rs. 1 crore to was co-related to the donation of Rs. 1 crore agreed to be made to and lends support to the evidence of supported by his noting dated 29th April, 1981 part of Ex. ", "230. We would not on this material be unjustified in taking the view that it was in pursuance of the agreement arrived at on 25th March, 1981 that the donation of Rs. 1 crore was made and since income tax exemption was not available in case of donation to , this donation of Rs. l crore was made to . ", "It is therefore clear that though , and the respondent did not agree to the deductibility of the donations to be made to in computing the net income of from its commercial complex, it was definitely agreed on 25th March, 1981 that donations, as stated above, would be made by by itself or through others to . It appears that since the Government of Maharashtra was not agreeable to override notification restricting FSI to 1.33 as also to permit the donations to to be deducted in computing the income of , informed , as stated by him in paragraph 19 of his deposition that his scheme was not acceptable to the Government and that should therefore move in the matter. accordingly addressed a letter dated 1st April, 1981 Ex. 216 to . mis letter was collected from 's office by , Executive Assistant of in order that should be able to personally hand over to and pursue the matter with the Government. The letter dated 1st April, 1981 Ex. 216 was accompanied by a note prepared by . When got this letter dated 1st April, 1981 Ex. 216 alongwith the note, he dictated to an endorsement to be made at the foot of the note and his endorsement was written out by in his own handwriting as per the dictation of . This endorsement was written down by in the morning of 10th April, 1981 and it is marked 'B' at the foot of Ex. 216. It is significant to note what this endorsement said : ", "\"The by itself or through others, will arrange to make the following donations to , an allied organisation involved in giving similar support to the performing and non performing acts; one time within six months of .'s confirmation Rs. 1 crore three years after i.e. On completion and commissioning of the commercial complex. RS. 25 lakhs per year eight years after five years after the completion of the commercial complex, RS. 50 lacs per year. The above donations may be considered as 's expenses, while computing 's net income.\" ", " again tried to persuade that the above donations to be made to should be considered as expenses of while computing its net income. But obviously this effort also did not succeed. Indeed it would have been difficult for to agree to allow the donations to to be considered as expenses of while computing 50 per cent of the net income of payable to the Government for two very good reasons. Firstly, it would be a fraud on the Government because than 50 per cent of the donations to would be really paid by the Government and secondly it would have to be expressly stated in the official documents that the donations were deductible in computing the net income of and that would have exposed the real nature of the transaction, namely, that the donations were paid for getting a favour from the respondent. Neither and nor the respondent therefore accepted this suggestion of . But the other part of the agreement reached on 25th March, 1981 was placed before the alongwith the Note and it was approved by the . The draft of the Government resolution embodying this agreement was submitted by the Under Secretary alongwith his note which was approved by , Deputy Secretary. This note which is dated 16th April, 1981 and which is part of Ex. 230 referred to letter dated 1st April, 1981 Ex. 216 and apointed out that in that letter had undertaken that it would itself or through others arrange to make donations to , as set out in the endorsement marked 'B' Ex. 216. It was stated in this note that had requested that these donations may be considered as expenses of while computing its net income. Obviously reference was made by in this note to the request made by in the letter of dated 1st April, 1981 Ex. 216 because was seeking instructions of his superiors in regard to this request which was rejected on 25th March, 1981 but restored on 10th April, 1981. It was when this note of came to that he recorded the note dated 29th April, 1981 marked 'B' to which we have referred in some detail. The note of dated 29th April, 1981 marked 'B' supported by the oral evidence of clearly establishes that had agreed to make donations set out in the endorsement marked 'B' in Ex. 216 to and that it was agreed that the donations so made would not be treated as deductible expenses. ", "It seems that and , representatives of again made another effort to persuade and to agree that donations to be made to Pratibha Pratishthan should be allowed to be deducted as expenses before determining the net income of the commercial complex of . But as appears clearly from the note of dated 30th April, 1981 part of Ex. 230, and clearly pointed out to and that would have to pay these donations after 50 per cent of the net income was paid to the Government and that such donations cannot be treated as expenses. This note of also establishes beyond doubt that had agreed to pay donations to Pratibha Pratishthan and their request for treating the donations as deductible expenses was turned down by the Government of Maharashtra. The draft Government resolution for giving effect to the decision of 10th April, 1981 was approved by the Chief Secretary and the Government resolution dated 6th May, 1981 was issued by the Government of Maharashtra directing that : ", "i) The entire plot of land admeasuring 30,419 sq. mtrs. should be covered under one single lease provided that the mortgage in respect of 3/4th of the plot is redeemed. will also have option to extend the existing mortgage with to cover the entire property. ", "ii) be allowed to utilise the at the currently permissible rate of 1.33 over the entire plot. The area so covered would, however be inclusive of the existing construction already made by the to the extent of about 95,000 sq.ft. ", "iii) The be permitted to build a hotel of international standard in the complex and offices and shops ancilary and germane to such Hotel Establishment only. They may by themselves or through any other parties develop and operate the commercial complex. ", "iv) The will be required to pay to 25% of the net annual profits of the and also 50% of the net income from the properties put to commercial use, in terms of original Resolution. had to admit in his evidence that by reason of this resolution the impediment in the way of was completely removed and according to the evidence of , the benefit which received by reason of this resolution could be estimated to be in the neighbourhood of several crores. ", "We must also refer to the donations aggregating to Rs. 26 lakhs made by on 31st March, 1981. These donations were made to three trusts floated by the respondent namely , and . Rs. 6 lakhs were donated to , Rs. 10 lakhs to and Rs. 10 lakhs to . There was also one other trust floated by the respondent namely . These four trusts were drafted by PW-16 and in all these four trusts the respondent, his wife and were the only trustees and it was provided in each of these four trusts that any vacancy arising the office of trustee would be filled up from the family of the respondent. It is the evidence of that the drafts of these four trust deeds were prepared by him on the basis of the trust deed of Pratibha Pratishthan and the respondent had not examined these four trust deeds but merely the broad features were explained to the respondent. Now the trust deeds in respect of these four trusts were executed by the trustees on 20th March 1981 and they were lodged with the Charity Commissioner on 23rd March 1981. On the application of compliance with Rule 7A of the Maharashtra Public Trusts Rules was dispensed with even though it was legally not permissible to do so. also obtained certificates from the Income-tax Authorities exempting donations made to these four trusts. explained in his evidence that all this had to be rushed through in order to enable donations to be taken from the potential donor companies before 31st March 1981. He admitted that was the company which was expected to give donations before 31st March 1981. He went on to say that the respondent had sent to him one who was a labour leader in in Bombay and he heard from that intended to make donations before 31st March 1981. accordingly by a Resolution of its dated 31st March 1981 approved of donation of Rs. 6 lakhs to , Rs. 10 lakhs to and Rs. 10 lakhs to and cheques were paid to on behalf of these three trusts. ", "Now it does appear prima facie that these 3 donations aggregating Rs. 26 lakhs were paid by pursuant to some understanding reached in the course of negotiations leading to the agreement dated 25th March 1981. We fail to appreciate what possible reason could have prompted to make these donations aggregating to a large figure of Rs. 26 lakhs to the three trusts of the respondent. It is significant to note that these three trusts along with the 4th trust of were executed and registered and income-tax exemption certificates were obtained in the course of just 10 days before the donations came to be made to them by . The extra ordinary speed with which these four trusts were created followed immediately after the making of donations by clearly show prima facie of course, that there must have been some understanding between and the respondent. ", "The only explanation offered by for the making of these donations to the three trusts was that who was a labour leader in was pressing him to do something for improving the conditions in the Konkan Region. also relied on a letter dated 15th January 1981 said to have been addressed to him by . The case of was that it was on account of the pressure exerted by on behalf of over 600 employees working in who hailed from Konkan Region that decided to make these donations to the three trusts of the respondent. This story put forward by prima facie does not appear to be true. If was pressing on behalf of the employees of for doing something for the families of the employees in the Konkan Region it is difficult to see why no donations or contributions were made by to any other trusts such as prior to 25th March 1981. Moreover we fail to appreciate why the employees in should be so keen in securing development of the Konkan Region instead of demanding improvement in their own living conditions in Bombay. Moreover, the minutes of the meeting of of held on 31st March 1981 do not bear out the story put forward by that it was at the instance of that these donations came to be made. What is stated in the minutes of the meeting is as follows : ", "\"The Managing Director reported to the Board that over 600 employees working in Grades I to V in , Bombay, and who hail from the Konkan Region, had A approached the Managing Director to contribute amounts to certain public charitable trusts recently established for the purpose of undertaking programmes of rural development in the rural areas of the Konkan Region. The Managing Director further reported that the Trustees of the were very eminent public personalities and the trusts had been issued certificate of exemption of tax under Sec. 15CCA of the Income- tax Act, 1961, pursuant to which donations to the would be fully exempt from tax in the hands of the donors. The names of the are under : ", "(i) Ambet Pratishthan ", "(ii) ", "(iii) \". ", "It is difficult to understand as to how over 600 employees working in suddenly came to know must a little prior to 31st March 1981 that three trusts had been floated by the respondent when they were executed and registered only a few days before that. How is it that within 4 or 5 days over 600 employees of came to know about the existence of these trusts and how did they come to know that these 3 trusts were established for the purpose of undertaking programmes of rural development in the rural areas of Konkan Region. It is also stated in the minutes that in his capacity as the Managing Director reported that the trustees of these 3 trusts were very eminent public personalities. We wonder whether the respondent's wife and could be said to be \"very eminent public personalities\". It Is also strange that though a large sum of Rs. 26 lakhs was being paid by way of donations, did not even bother to inquire as to who were the eminent public personalities who were trustees of these three trusts. It is prima facie difficult to accept the explanation offered by . We do not think we would be unjustified, on the material on record, to take the prima facie view that these donations of Rs. 26 lakhs were also connected with the negotiations which took place on 25th March 1981 between on the one hand and and the respondent on the other. ", "670 ", "We must therefore hold that a prima facie case has been made out on behalf of the prosecution for framing 23rd, 24th, 25th, 41st, 42nd and 43rd draft charges against the respondent. The learned Trial Judge in our opinion fell into an error in discharging the respondent in respect of these charges. ", "Before we close we may make it clear that we have examined the evidence on record merely for the purpose of deciding whether the evidence is of such a nature that, if unrebutted, it would warrant the conviction of the respondent. It will be open to the respondent to rebut this evidence and to make out his defence when the trial proceeds against him on the charges already framed by the learned Trial Judge and the additional charges which we have directed to be framed against him. ", "RANGANATH MISRA, J. This appeal by special leave is directed against the order of a learned Single Judge of dated April 30, 1985, refusing to frame charges on 22 heads while framing charges under 21 other heads This litigation has had a chequered career. A short account of the events relevant for the disposal of this appeal may now be indicated. ", "The appellant, , filed a petition of complaint on September 11, 1981, in , Esplanade, Bombay, alleging commission of several offences by the respondent and some other persons. The learned Chief Metropolitan Magistrate declined to take cognizance of the offences punishable under sections 161 and 165 , I.P.C . and Section 5(2) of the Prevention of Corruption Act (II of 1947) ('Act' for short) without appropriate sanction as the respondent was, at the relevant time, holding the office of Chief Minister of the State of Maharashtra. Several legal proceedings were taken thereafter in regard to the necessity of sanction. Ultimately, however, the appellant lodged a fresh complaint on August 9, 1982, alleging commission of offences by the respondent punishable under ss. 161 , 165 , 384 and 420 read with s. 120B , I.P.C . as also s. 5(2) read with s. 5(1)(d) of the Act. This complaint came to be registered as Special Case No. 24/82 and was transferred to for trial under an order made by a Constitution Bench of this Court on February 16, 1984, in , 2 S.C.C. 183. This Court directed : ", "\"Therefore, Special Case No. 24/82 and Special Case No. 3/83 (a similar complaint filed by one against the respondent) pending in , Greater Bombay, , are withdrawn and transferred to with a request to the learned Chief Justice to assign these two cases to a sitting Judge of \" ", "This Court in a separate judgment delivered on the same day in ., 2 S.C.C.500, held : ", "\".... When cognizance is taken on a private complaint or to be precise, otherwise than on a police report, the Special Judge has to try the case according to the procedure prescribed for trial of warrant cases instituted otherwise than on police report by a Magistrate ( sections 252 to 258 of 1898 Code of Criminal Procedure) Section 252 requires that when accused is brought before a , the shall proceed to hear the complainant and take all such evidence as may be produced in support of the prosecution. Accused has a right to cross-examine complainant and his witnesses. If upon considering the evidence so produced, the finds that no case against the accused has been made out, which, if unrebutted, would warrant his conviction, the shall discharge the accused ( section 253 ibid). If, on the other hand, is of the opinion that there is ground for presuming that the accused has committed an offence, which the is competent to try, a charge shall be framed in writing against the accused........ \" ", "(emphasis supplied) Pursuant to these judgments the case was posted for trial before , of . The trial opened before , on April 9, 1984, and 16 witnesses were examined before him by July 27, 1984. Then followed the dispute relating to fabrication of the public records, produced in the . , ordered inspection of the files as also an inquiry into the allegations. By an order dated April 23, 1984, he found that the prosecution allegations against the respondent of tampering with the files by removing and interposing certain documents and interpolating endorsements on some other documents were not well-founded. The prosecution, thereupon, applied for transfer of the case to some other Judge. That was refused but on the request of , that he may be relieved of trying the case, the learned Chief Justice nominated , , another Judge of that court as the trial Judge. Fortyone more witnesses were examined before , and after examination of 57 witnesses in all for the prosecution, the trial Judge was invited to consider the framing of charges. ", "Fortythree draft charges were placed for his consideration. By the impugned order the learned Trial Judge framed 21 charges and refused to frame the remaining 22 charges proposed by the prosecution and made an order of discharge in respect of those charges. It is this order of discharge relating to 22 charges which is assailed by the complainant in this appeal. ", "The respondent, a Barrister by profession, entered into politics and was for some time Minister of Law in the State of Maharashtra and following the general election in 1980, came to be the Chief Minister of that State up to January 20, 1982. The appellant in his complaint petition named the respondent as the 1st accused and mentioned \"others known and unknown\" as the remaining accused persons. He alleged in the petition of complaint that between August 1980 and September 1981 when respondent was functioning as Chief Minister, he retained to himself the power to deal with the following matters : ", "(1) The allotment of cement quota and distribution of cement; ", "(2) Supply and sale of industrial alcohol, issue of licenses for wholesalers and retailers dealing in country liquor and Indian made foreign liquor; ", "673 ", "(3) Control of co-operatives and in particular the sugar co-operatives; ", "(4) Administration of urban land ceiling law, restriction of F.S.I. and exemptions therefrom and in fact he himself exercised these powers of the . ", "During this period seven Trusts were created by the respondent as per the following particulars : Serial No. Name of the Trust Date of Registration ", "1. Pratibha Pratishthan(IGPP) 18.10.80 ", "2. (NSPP) 29.12.80 ", "3. () 17.03.81 ", "4. (RZP) 25.03.81 ", "5. Sangh 25.03.81 (SMSP) ", "6. (MTP) 25.03.81 ", "7. (AP) 25.03.81 It is the prosecution case - and there is no dispute that Srivardhan located in the District of Raigad was the Assembly Constituency of the respondent. Konkan is the region in which the District of Raigad is located. The respondent belonged to village Ambet which is part of Mhasale Taluka in Raigad District. The five s appearing against items 3-7 above were thus intended to place ample funds at the disposal of the respondent and provide means and resources for his political aggrandisement. was created in the name of a friend of the respondent. In all these six s the respondent, his wife, close relations and friends were associated as ees. So far as is concerned, the respondent represented that had taken a decision on October 6, 1980, to create the same. On October 7, 1980, the respondent at a Press Conference made a declaration to this effect and in official publications also this fact was duly publicised. It is the prosecution case that the late Smt. , the then Prime Minister, had never agreed to have her name associated with the which came to be registered with the Charity Commissioner on October 18, 1980. Though it was not a Government and Smt. had not agreed to her name being associated with it, the respondent personally and through others gave a lot of publicity representing as if these were facts with a view to inducing people to believe that was a Government and the late Prime Minister had agreed to associate her name with that . These representations were made with a view to creating an appropriate impact on the mind of the people at large. According to the prosecution, as a fact, Mrs. had not consented to associate her name with the and that fact was disclosed on the floor of by the then Minister on behalf of the Prime Minister. It is on record that her name was deleted and the later came to be known only as . ", "As already stated, 43 draft charges were placed before the learned Trial Judge on the basis of the evidence of 57 prosecution witnesses and a large volume of documents. 43 draft charges were divided into six groups for convenience of consideration by the learned Trial Judge. These six heads with reference to the specific allegations and the particulars of the draft charges are shown below: Serial No. Allegation Offence alleged Charge No. ", "1. Conspiracy 120B, IPC 1 ", "2. With reference to Sugar Co-operatives : ", "(a) Shetkari Sahakar 165,384,420, IPC 2-4 Sakhar Karkhana (b) Warna -do- 5-7 (c) Panjara -do- 38-40 3. (a) (NCPA) 161 & 165, IPC 23-25 5(2) read with 5(1) of the Prevention of Corruption Act . (b) 161 & 165, IPC ; 41-43 5(2) read with 5(1) of the Prevention of Corruption Act . 4. Nanubhai Jewellers (F.S.I) 161 & 165, IPC ; 33,35 5(2) read with 5(1), Prevention of Corruption Act . 5. Industrial Alcohol -do- 32,34 6. Cement Allotments -do- 8-22, 7.transactions 26-31. ", "The prosecution examined specific witnesses with reference to the allegations supporting the draft charges. Similarly, documents were also produced to support the allegations. The learned Trial Judge, who was required in law to state the reasons if he discharged the accused, in an unusually long order extracted the evidence of witnesses at length as also the contents of the documents and framed 21 charges while discharging the respondent in respect of the remaining 22. The prosecution filed an application on July 5, 1984, Ext. 214-A, disclosing the names of the other accused persons and those names were : ", "1. Mr. , PW. 44; ", "2. Mr. , Chief Secretary to at the relevant time and a Trustee of the ; ", "676 ", "3. All officers of who participated in the issue of various Government orders knowing that the same were being issued for a consideration; ", "4. Officers of who used official pressure for collection of money from the Sugar Co-operatives and under instructions of the respondent; ", "5. Mr. , since dead, who negotiated several transactions relating to alcohol and cement allocations ; ", "6. Mr. , Minister of Co-operation. ", "Admittedly, by July 5, 1984, the trial had already begun and several witnesses for the prosecution had already been examined. ", "The learned Trial Judge did not accept the prosecution case regarding the offence of cheating and extortion. Similarly, the charge of conspiracy was not accepted. The learned Trial Judge framed 21 charges in respect of six transactions relating to cement and one relating to industrial alcohol for offences under ss. 161 and 165 , IPC and s. 5(2) read with s. 5(1)(d) of the Act. For these 7 transactions, 21 charges in all were framed, 3 charges for each transaction. ", "As pointed out by in the judgment to which reference has been made, the relevant sections of the Code of Criminal Procedure ('Code' for short) for the trial of a case of this type are sections 244 , 245 and 246 . Section 245(1) provides : ", "\"If upon taking of the evidence referred to in s. 244 , the Magistrate considers, for reasons to be recovered, that no case against the accused has been made out which, if unrebutted, would warrant his conviction, the Magistrate shall discharge him.\" ", "While section 246(1) , on the other hand, requires : ", "677 ", "\"If when such evidence has been taken or at any previous stage of the case the Magistrate is of opinion that there is ground for presuming that the accused has committed an offence triable under this Chapter which such Magistrate is competent to try and which in his opinion should be adequately punished by him, he shall frame in writing a charge against the accused.\" ", "The Code contemplates discharge of the accused by under s. 227 in a case triable by it; cases instituted upon a police report are covered by s. 239 and cases instituted otherwise than on police report are dealt with in s. 245 . The three sections contain some what different provisions in regard to discharge of the accused. Under s. 227 , the trial Judge is required to discharge the accused if he 'considers that there is not sufficient ground for proceeding against the accused.' Obligation to discharge the accused under s. 239 arises when \"the Magistrate considers the charge against the accused to be groundless.\" The power to discharge is exercisable under s. 245(1) when \"the Magistrate considers, for reasons to be recorded, that no case against the accused has been made out which, if unrebutted, would warrant his conviction...\" It is a fact that ss. 227 and 239 provide for discharge being ordered before the recording of evidence and the consideration as to whether charge has to be framed or not is required to be made on the basis of the record of the case, including documents and oral hearing of the accused and the prosecution or the police report, the documents sent along with it and examination of the accused and after affording an opportunity to the two parties to be heard. The stage for discharge under s. 245 , on the other hand, is reached only after the evidence referred to in s. 244 has been taken. Not-withstanding this difference in the position there is no scope for doubt that the stage at which the Magistrate is required to consider the question of framing of charge under s. 245(1) is a preliminary one and the test of \"prima facie\" case has to be applied. In spite of the difference in the language of the three sections, the legal position is that if is satisfied that a prima facie case is made out, charge has to be framed. ", "678 ", " ., A.I.R. 1971 S.C. 834, this Court in case instituted on complaint applied the prima facie test. , 1 S.C.R. 257, this Court again pointed out that the standard of test and judgment which is to be finally applied before recording a finding regarding guilt or otherwise of the accused, is not to be applied at the stage of deciding the matter under s. 227 . It was further observed : ", "\"If the evidence which the prosecution proposes to adduce to prove the guilt of the accused even if fully accepted before it is challenged in cross- examination or rebutted by the defence evidence, if any, cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial. An exhaustive list of circumstances to indicate as to what will lead to one conclusion or the other is neither possible nor advisable. We may just illustrate the difference of the law by one more example. If the scales of pan as to the guilt or innocence of the accused are something like even at the conclusion of the trial, then, on the theory of benefit of doubt the case is to end in his acquittal. But, if on the other hand, it is so at the initial stage of making an order under s. 227 or s. 228 , then in such a situation ordinarily and generally, the order which will have to be made will be one under s. 228 (charge to be framed) and not under s. 227 (of discharge)\". ", ", J. who spoke for the in that case, quoted with approval the view expressed by , J. in ., 2 S.C.R. 66, and what had been said in yet another earlier decision of the in , 3 S.C.R. 629. In the case of ., 2 S.C.R. 229, (a decision to which the trial referred), this was dealing with a case involving allegations relating to offences punishable under s. 5(2) read with s.5(1)(d) of the Act and s. 120-B , IPC as here. , J. indicated that the has power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. ., 4 S.C.C. 274, a three Judge Bench of this said: ", "\"At this stage, as was pointed out by this Court in , (supra), the truth, veracity and the effect of the evidence which the prosecution proposes to adduce are not to be metieulously judged. The standard of test, proof and judgment which is to be applied finally before finding the accused guilty or otherwise is not exactly to be applied. At this stage, even a very strong suspicion founded upon materials before the Magistrate which leads him to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged may justify the framing of charge.. \" ", "The language of sub-s. (1) of s. 245 also places the matter beyond dispute by using the same test as suggested by , in the case of , (supra). ", "The use of the words \"if, upon taking of the evidence referred to in s. 244 \" in sub-s. (1) of s. 245 is suggestive of the statutory intention that until \"all such evidence as may be produced in support of the prosecution\" is taken, the stage for judicial consideration as to whether charge is to be framed is not reached. Now it is a fact that several witnesses named by the prosecution still remain to be examined in the instant case but no grievance was made before us by the appellant's counsel that the trial Judge had acted wrongly in taking up the question of framing of charges prematurely.Obviously this complaint could not be made since after 57 witnesses had been examined it was the prosecution itself which invited the learned Trial Judge to take up the matter of framing of charges. ", "Admittedly, the witnesses examined for the prosecution have been cross-examined and in the case of some, at great length. There is no scope for doubt that the rebuttal case envisaged in s. 245(1) of the Code is fairly clear from the cross-examination of prosecution witnesses as also from the documents exhibited before the , apart from direct evidence being led by the defence independently. Under the scheme of the Code there is no scope for the accused to lead defence evidence until the prosecution is closed and the examination of the accused under s. 313 of the Code is over. With the amendment of the Code of 1898 in 1955 and under the new Code of 1973 the procedure relating to all varieties of criminal trials, excepting warrant cases on private complaints, has been simplified. The procedure in respect of trials according to warrant procedure in private complaints, however, continues to be cumbersome and time-taking and it is for to simplify the procedure for such cases keeping all aspects in view. ", "Lengthy arguments were advanced both by Mr. for the appellant and Mr. for the respondent with reference to the evidence. When an attempt was made by learned counsel on both sides to present an analysis of the evidence and criticism was advanced by Mr. against the reasons given by the trial Judge and support was indicated by Mr. to such reasons, we indicated to Mr. that if we went into the matter at length even for the prima facie purpose and indicated conclusions it might embarrass the respondent in, his defence even in respect of the charges framed by . In view of these observations made in course of the hearing, a written statement on behalf of the respondent was filed on November 5, 1985, signed by the respondent and his counsel. The relevant portion of the said statement reads thus : ", "\"Since some charges have already been framed by learned Trial Judge with respect to offences under ss. 161 and 165 , I.P.C . and s. 5(1)(d) read with s. 5(2) of the Prevention of Corruption Act and the ingredients of the offence under s. 165 , I.P.C . have not been specifically adverted to in the main judgment and the respondent has in any event to argue before the trial Court regarding the scope as well as the ingredients of the offences under ss.161 and 165, I.P.C . On which there is not much of case law and it involves appreciation of the scheme of the relevant provisions of the I.P.C . as well as of the Prevention of Corruption Act , the respondent is willing to face trial straightaway in respect of A not only the charges already framed but also on the draft charges in so far as they involved the offences alleged under ss. 161 and 165 , I.P.C . and s. 5(1)(d) read with s. 5(2) of the Prevention of Corruption Act and the charge of conspiracy relating thereto......... \" ", "When such a statement was filed, we pointed out to Mr. that while in on the basis of such a stand charges could straightaway be framed in regard to those offences named in the statement in the appeal unless the order 3 of discharge made by is vacated and the reasons advanced by the trial Judge are set aside, it would not be proper for this Court in exercise of its appellate jurisdiction to direct that charges be framed. It was further pointed out that a direction to frame charges on the basis of the statement filed has to be on the footing that the prosecution evidence in support of the charges was such that unless rebutted, the respondent would liable to be convicted. This observation made by us was merely a restatement of the legal position and was not meant to prejudice the respondent in any manner. But it cannot be disputed that in order to decide whether the order of discharge should be sustained or set aside, we have to consider whether on the material on record, a prima facie case has been made out on behalf of the prosecution. ", "As hearing proceeded, at one stage we were inclined to lay down generally the para-metres of the provisions of s. 165 , I.P.C . Mr. for the respondent while making his submissions in regard to the actual scope of the offence covered by s. 165 , I.P.C . pointed out on more than one occasion that the respondent might be prejudiced in his defence if while laying down the parametres of that offence, we indicated a straightjacket formula. He also suggested that the matter should be left to be argued and the learned Trial Judge should be free to come to his conclusion in law with reference to the facts of the case about the scope and ambit of that provision that if any party was aggrieved by the decision it would still be open to be corrected in the appellate forum. Taking these submissions into consideration and on further deliberation, we are inclined to accept the view that it may not be appropriate at this stage to lay down the ambit and scope of the offence under s. 165 , I.P.C . at any great length. It would be sufficient in our view to generally point out the distinction between sections 161 and 165 , I.P.C . and simultaneously deal with the provisions of s. 5(1) read with s. 5(2) of the Act. But before doing so, we would briefly refer to the evidence in support of the charges which the respondent has agreed to be framed for the purpose of showing that the learned Trial Judge had prima facie taken a wrong view and it was a fit case where these charges should have also been framed. ", "The complainant 4 is a member of . He was elected as a legislator in 1978 and from 1980 onwards he was General Secretary of the Bombay City unit of the said . He has supported the prosecution allegations in general. According to him, the was publicised as a Trust. A statement of the respondent at the Press Conference held immediately after the decision and repetition of that in contemporaneous publications led people to believe that was a Trust. The publications have been exhibited. Though an attempt has been made while cross-examining the witness to bring out the position that what was published in the publications was not known to the respondent, that has yet to be established. , a colleague of the respondent and now a sitting Member of who has close association with one of the major sugar co-operatives as also Directors of the other sugar co-operatives, has spoken about the demand of contribution and the raising of contribution taking a bag of sugar produced as the unit. There is considerable evidence in regard to allotment of cement under instructions of the respondent. Contemporaneous record prepared by responsible public officers prima facie supports the position that the respondent had directed allotments to be made in a manner said to be not strictly in accordance with the prevailing procedure. The persons to whom allotments of cement have been made have in many cases contributed large sums of money to the Trust funds. In regard to the there is contemporaneous documentary evidence as also oral evidence to show that certain concessions were extended by and payments had been received which have gone into the Trust funds. While the prosecution has alleged that the payments of money were a consideration for the favour shown to , the defence has A come out with the version that the payments made and stipulated were unconnected and the large sum of money agreed to be paid was for the purpose of improving the lot of the people of Konkan region. Similarly, in regard to the grant of 'No Objection Certificate' in respect of the premises of , there is evidence from the side of the prosecution to support its allegation that the power of the was exercised for a consideration while there is no denial regarding receipt of the payment but the link is denied and disputed. Similarly, in regard to industrial alcohol at least so far as are concerned, there is the evidence of PW. 50 and payment of Rs. 2,25,000 which has gone into the funds of the has been alleged and is claimed to have been proved. The record shows that the allotment of alcohol was restored. ", "The oral evidence in this case is backed up by documentary evidence. Some of the relevant documents have interpolations and the inquiry relating to interpolation has not become final. It is indeed difficult at this stage to say that the evidence as a whole is inadequate to establish the prima facie case. The learned Trial Judge, as already pointed out, extracted at great length both the oral evidence as also the contents of documents but there was not much of analysis to justify rejection of the material. It may be pointed out that there is substance in Mr. 's submission that the learned Trial Judge adopted two different standards in the matter of weighing the same evidence, when he agreed to frame 21 charges which were inter-linked and inter-connected with the rest of the prosecution story with reference to which the 22 draft charges had been given. In fact it is this position which, when properly considered by his counsel, led the respondent to file his statement suggesting that charges for the other offences excepting under ss. 384 and 420 , IPC , may also be framed. If the evidence was accepted for half the number of charges relating to similar offences, there could hardly be any scope to reject the 22 draft charges. Similarly, in regard to the charge of conspiracy the facts were interconnected and there could be no justification to reject the charge even if the other persons implicated were not before the . The reasoning given by the learned trial Judge in support of his order of discharge in regard to the draft charges relating to ss. 161 and 165 , IPC and s. 5(2) read with s. 5(1) of the Act, concerning these transactions cannot, therefore, be sustained. We are, in the circumstances, inclined to take the view that the statement filed by the respondent was justified and the order of discharge made by the learned trial Judge is not sustainable. ", "It is appropriate at this stage to take note of the fact that under s. 245(1) of the Code the requirement is that the evidence must be such which if not rebutted would warrant conviction of the accused. Under the law of evidence the concept of rebuttable presumption is well-known. As pointed out by in his Treatise on Evidence, \"rebuttable presumptions of law are a result of the general experience of a connection between certain facts or things one being usually bound to be the companion or affect of the other. The connection, however, in this class is not so intimate or so uniform as to be conclusively presumed to exist in every case; yet, it is so done that the law itself without the aid of a jury infers one fact from the crude existence of the other in the absence of opposing evidence. In this mode, the law advances the nature and amount of the evidence which is sufficient to establish a prima facie case and throws the burden of proof upon the other pary; and if no opposing evidence is offered, the jury are bound to find in favour of the presumption. A contrary verdict might be set aside as being against evidence. The rules in this class of presumptions as in the former have been adopted by common consent from motives of public policy and for the promotion of the general good; yet, not as in the former (conclusive proof) class forbidding all further evidence but only dispensing with it till some proof is given on the other side to rebut the presumption raised. Thus, as men do not generally violate the Penal Code , the law presumes every man to be innocent; but some men do transgress it; and therefore, evidence is received to repel this presumption.\" ", "(emphasis supplied by us). ", "The learned trial Judge should have proceeded to scan the evidence keeping this aspect of the legal position in view which he has missed. There is another aspect which has also to be noticed here. One of the allegations against the respondent is the commission of offences punishable under s. 5(1) read with s. 5(2) of the Act. Section 4 of that Act provides : ", "'Where in any trial of an offence punishable under s. 161 or section 165 of the Indian Penal Code, or of an offence referred to in clause (a) or clause ", "(b) of sub-s. (1) of s. 5 of this Act punishable under sub-section (2) thereof, it is proved that an accused person has accepted or obtained, or has agreed to accept or attempted to obtain, for himself or for any other person, any gratification (other than legal remuneration) or any valuable thing from any person, it shall be presumed unless the contrary is proved that he accepted or obtained or agreed to accept or attempted to obtain, that gratification or that valuable thing, as the case may be, as a motive or reward such as is mentioned in the said section 161 , or, as the case may be, without consideration or for a consideration which he knows to be inadequate.\" ", "The presumption raised under s. 4 is a presumption of law which a Court is bound to draw, once it is proved that the accused Government servant received or obtained a valuable thing in the circumstances mentioned in the section (see , S.C.R. 580 and , 2 S.C.R. 592). The learned Judge failed to take note of this statutory provision while dealing with the charges under ss. 161 and 165 , IPC as also s. 5(1)(a) and (b) of the Act. We do not intend to say anything more at this stage. But we do hope that while dealing with the case after the framing of the charges, the learned trial Judge will keep this legal position in mind and act accordingly. ", "In the face of the pronounced view of this Court that the Minister is a public servant, no attempt was made either before or before us to argue that to the Chief Minister, ss. 161 and 165 of the Indian Penal Code would not apply. The main ingredients of the charge under s. 161 , IPC , are : ", "686 ", "(1) that the accused was a public servant; (2) that he must be shown to have obtained from any person any gratification other than legal remuneration; and (3) that the gratification should be as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or disfavour to any person. ", "Ordinarily, when the first two ingredients are established by evidence, a rebuttable presumption arises in respect of the third. For the offence under s. 165 , IPC the essential ingredients are : ", "(i) the accused was a public servant; ", "(ii) he accepted or obtained or agreed to accept or obtain a valuable thing without consideration or for an inadequate consideration knowing it to be inadequate; ", "(iii) the person giving the thing must be a person concerned or interested in or related to the person concerned in any proceeding or business transacted or about to be transacted by the government servant or having any connection with the official of him self or of any public servant to whom he is subordinate; and ", "(iv) the accused must have knowledge that the person giving the thing is so concerned or interested or related. ", "It has been pointed out by this in case () that s. 165 is so worded as to cover cases of corruption which do not come within ss. 161 , 162 or ", "163. Indisputably the field under s. 165 is wider. If public servants are allowed to accept presents when they are prohibited under a penalty from accepting bribes, they would easily circumvent the prohibition by accepting the bribe in the shape of a present. The difference between the acceptance of a bribe made punishable under s. 161 and 165 , IPC , is this : under the former section the present is taken as a motive or reward for abuse of office, under the latter section the question of motive or reward is wholly immaterial and the acceptance of a valuable thing without consideration or with inadequate consideration from a person who has or is likely to have any business to be transacted, is forbidden because though not taken as a motive or reward for showing any official favour, it is likely to influence the public servant to show official favour to the person giving such valuable thing. The provisions of ss. 161 and 165 , IPC as also s. 5 of the Act are intended to keep the public servant free from corruption and thus ultimately ensure purity in public life. The evidence in the case, therefore, should have been judged keeping these aspects in view. ", "We shall now proceed to consider the charge relating to extortion punishable under s. 384 , IPC . The allegation in respect of this alleged offence is to be found in paragraph 18 of the petition of complaint which reads thus : ", "\"That on the facts mentioned above, the accused is also guilty of an offence under s. 384 , I.P.C . When a Chief Minister demands moneys from persons officially transacting business with him or who are likely to transact business with him in the future, it is implicit in the situation that a veiled threat is conveyed that the request or demand will not be attended to and there will either be denial or delay in the matter of granting to them what they are entitled to or that they will be harassed by a large number of pink- pricks by which bureaucracy and the Government make anyone's life miserable if the Chief Minister's demands are not complied with. Moneys are, therefore, obtained by extortion and payments called donations are the direct result of fear of injury. The accused has thus been guilty of the offence under s. 384 , I.P.C .\" ", "The learned Judge considered framing of charge relating to extortion, in paragraphs 97-107 of his order. According to him, the evidence of PW. 1 did not establish that the accused or anybody on his behalf held out any threat either personally to her or to the Sangli Karkhana. According to the learned counsel, the learned Judge fell into an error in confining his consideration of the issue by referring to the deposition of PW. 1 alone. The evidence of PW.51, , was equally relevant and germane to the issue of extortion according to him and should have been referred to and relied upon while dealing with the consideration of the charge. Mr. next contended that the following features which had been established should have led the learned Judge to hold that there was material for the view that a case in respect of the charge had been made out by the prosecution. ", "(i) The respondent had decided to raise Rs. 10 crores for the out of which a moiety was to be raised during the crushing season of 1980-81 and the remainder during the following season; ", "(ii) The IGPP between the date of its formation and 31.3.81 had been able to secure a very small amount compared to the target and bulk of that small amount had come from ; ", "(iii) Considering the pomp and publicity with which had been brought into existence, the financial position appeared to be ridiculous for want of sufficient funds. The respondent had assured at the meeting of the 6th May 1981 that the sugar cooperatives at his instance had agreed to immediately make payment of their contribution; ", "(iv) The statement of the respondent was based upon the fact that at the meeting on 25th April, 1981, of the ministerial committee held in his Secretariat Chamber, he had extracted promises from the managements of the sugar co-operatives for payment of contributions to in lieu of an assurance to them of agreeing to their pending demands with Government; ", "(v) After obtaining the promise of donations, the respondent adjourned consideration of the demand of the industry to the next meeting to be held on the 28th May 1981 and insisted upon compliance of the promise of donations before their demands could be acceded to; ", "(vi) The entire official machinery, particularly of , was utilised to bring about pressure on and its component members for extracting contributions. Pressure was, therefore, brought about of , P.W. 5, through , P.W.7, and the telegram under Ext. 81 was sent to the members of the ; ", "(vii) P.W.1, Shalinitai, rightly described the conduct of the respondent as one of pestering and in answer to such extortion to which she yielded, she advised to make the payment in the interest of the society. According to Mr. , the position came to this that if the factory had not paid, the legitimate demands pending consideration of Government would have suffered a setback: ", "(viii) The donations in the instant case were the outcome of pressure and were not voluntary in character. The fact that had issued a cheque of Rs. 2 Lakhs in spite of its strained financial circumstances and while it had a bank balance of less than Rs. 6,000 and had to arrange for a duplicate cheque as the original cheque had been left at and had not reached the respondent in time, were indicative of the volume of pressure that must have been brought about for collecting the donations; ", "(ix) Mr. pointed out that it was the respondent's own case that if the management had made payments which were illegal, they themselves abetted the offence of cheating. This suggestion had been put to three relevant prosecution witnesses. The fact that these witnesses closely connected with the sugar co-operatives had committed even a criminal offence goes to show that their act was not at all voluntary and the fiscal interest of the factories must have been their sole and primary consideration for such conduct. ", "On the basis of these facts and circumstances, learned counsel for the appellant argued that the three charges of extortion had been prima facie established and the learned trial Judge was, therefore, not justified in refusing to frame charges for the offence under s. 384 , IPC . ", "Mr. for the respondent relied upon the definition of 'extortion' in s. 383 in the Indian Penal Code and contended that the ingredients of the offence had not been prima facie established so as to justify framing of a charge for the said offence. ", "'Extortion' is thus defined in s. 383 , I.P.C . : \"whoever intentionally puts any person in fear of any injury to that person J or to any other, and thereby dishonestly induces the person so put in fear to deliver to any person any property or valuable security, or anything signed or sealed which may be converted into a valuable security, commits extortion.\" ", "The main ingredients of the offence are : ", "(i) the accused must put any person in fear of injury to that person or any other person; ", "(ii) the putting of a person in such fear must be intentional; ", "(ii1) the accused must thereby induce the person so put in fear to deliver to any person any property, valuable security or anything signed or sealed which may be converted into a valuable security; and ", "(iv) such inducement must be done dishonestly. ", "691 ", "Before a person can be said to put any person to fear of any injury to that person, it must appear that he has held out some threat to do or omit to do what he is legally bound to do in future. If all that a man does is to promise to do a thing which he is not legally bound to do and says that if money is not paid to him he would not do that thing, such act would not amount to an offence of extortion. We agree with this view which has been indicated in v. King Emperor, A.I.R. 1924 All 197. There is no evidence at all in this case that the managements of the sugar co- operatives had been put in any fear and the contributions had been paid in response to threats. Merely because the respondent was Chief Minister at the relevant time and the sugar co-operatives had some of their grievances pending consideration before the Government and pressure was brought about to make the donations promising consideration of such grievances, possibly by way of reciprocity, we do not think the appellant is justified in his contention that the ingredients of the offence of extortion have been made out. The evidence led by the prosecution falls short of the requirements of law in regard to the alleged offence of extortion. We see, therefore, no justification in the claim of Mr. that a charge for the offence of extortion should have been framed. ", "The only other allegation in respect of which there is an order of discharge is relating to cheating. In the petition of complaint detailed factual allegations were made in paragraphs 19 to 30 in regard to this aspect. The complaint alleged : ", "\"That in the specific cases of contributions received by the the accused is further guilty of committing an offence of cheating under s. 427 of the Indian Penal Code. The accused embarked upon a systematic campaign to associate the name of the Prime Minister of India, Mrs. with this Trust in order that the contributions to this Trust would be easily forthcoming. This was, in fact, intended to strengthen the impression that not only Mr. 's Government but also Mrs. was actively involved in his operations. That such an impression was sought to be created is further borne out by the fact that for inaugurating the said trust, a function was held at the Raj Bhavan, in Bombay on 11th October 1980. The Prime Minister especially flew in to perform the inauguration ceremony. A picture of the Prime Minister and the accused standing by her side while the former is signing documents connected with the Trust appeared in most of the leading newspapers in their issues dated 12th October 1980.\" ", "The allegations in regard to this offence are two- ", "fold: (i) though was not a State Government Trust, publicity was given by the respondent himself and through his agents as also through news media owned by and the public press to the fact that was a Government trust; and (ii) though Mrs. had never agreed to the Trust being named after her, the respondent associated her name for the purpose of creating an impression in the mind of the people at large that the then Prime Minister, Mrs. lndira had associated herself with the respondent's trust. The fact that Mrs. had not consented was stated on the floor of the . The correct position was always known to the respondent and yet he either directly or through others misrepresented these two aspects with a view to making people part with money by way of contribution to this Trust. ", "The evidence in regard to these allegations is both oral and documentary. The met on October 6, 1980, and it is the prosecution case that the respondent gave out a Press Conference on the following day that on the 6th October the had decided to create a by the name of . The news relating to the Press Conference was reported in several newspapers, a few among them being , , , and . The report appearing in has been marked as Ext. 190. That was shown to , the Secretary of the and on reading the Report he admitted it to be more or less correct. A reference to the newspaper publication shows that the respondent had announced that the creation of the was the decision of . Exhibit 48 is the October- November 1980 issue of a publication titled 'Maharastra Shasana Che Nirnay\" (decisions of ). Therein there is reference to and a reading of it prima facie shows that the establishment of was the decision of . PW.8 the Director-General of Information and Public Relations of at the relevant time has accepted this publication. It is true that he has taken the stand that there is no ministerial approval at the pre-publication stage of the contents. That may not at all be material because there must be an assumption that whatever is published in the owned paper correctly represents the actual state of affairs relating to al business until the same is successfully challenged and the real state of affairs is shown to be different from what is stated in the publication. mis position would get support from the decision of this Court in , 1 S.C.C. 560. The prosecution has also relied on publication ''. The English and Marathi versions of this publication for October 1980 have been proved as Exts. 179-180 respectively. Similarly, there is another of Maharashtra publication known as \"Maharashtra Marches Ahead,\" Ext. 181, which is a publication of December 1980. These documents, according to the prosecution, give an impression that was a created . The Deed of the is Ext. 208 and it clearly shows that it is not a nor was it created by the . Even the respondent was not a ee qua Chief Minister. As a fact was registered as a public trust with the charity commissioner. ", "PW.1, an erstwhile colleague of the respondent has deposed that on the 11th October, 1980, when she attended the function at the Raj Bhavan to which we shall presently advert, she came to know the actual state of affairs, viz., though the respondent was trying to create an impression that was a Government Trust, yet the same was not; but on account of her being in the she did not dispute the position anywhere publicly. The Resolution has not yet seen the light of the day. was specifically questioned as to whether there was a decision in respect of creation of as a Govt. Trust. She declined to answer the question by saying that she was bound by the oath of secrecy and she would not be in a position to disclose that information. The prosecution attempted to cause production of the decision but privilege was claimed and the claim has succeeded. Therefore, the document has not been produced before the learned trial Judge and is not a part of the record. The propriety of the claim of privilege is subjudice before this Court and we do not intend to say anything more about it. The core of the prosecution allegation in regard to this part of the matter is with reference to the sugar co-operatives. Several witnesses have been examined to support this aspect of the prosecution case. ", "So far as the second aspect, i.e. relating to the association of the name of Mrs. is concerned, Mr. for the respondent has admitted the position that Mrs. had at no stage given her consent to her name being associated with . It is not disputed that under the law, without appropriate sanction or authority, the name of the Prime Minister was not available to be associated. There has been a denial of any such consent having been given by the then Minister on the floor of . Respondent made a similar statement on the floor of on September 9, 1981, wherein, apart from endorsing the statement in , he took the responsibility on himself of assuming Mrs. 's consent. Yet, on 16th October, 1980, in - a publication - a picture of the accused standing by the side of the late Prime Minister was reproduced with the following inscription below the photograph : ", "\"Prime Minister affixing her signature on the documents giving her consent to name Trust for promoting talent in literature and fine arts as ' Pratibha Pratishthan' at Raj Bhavan on Saturday. Watching keenly is Chief Minister .\" ", "The learned trial Judge devoted a substantial part of the impugned order to deal with the charge under s. 420 , IPC . He referred to the statement of PW 1 that she had actually known the real state of affairs before the contribution was made to the . He ultimately took the view that the material placed on record did not justify a charge under 8. 420 IPC being framed. We do not propose to refer to every item of evidence on record relating to the allegation of cheating. We are afraid that if we follow that procedure and express our opinion one way or the other with reference to each item of evidence, either party is likely to be prejudiced when the matter goes for trial notwithstanding our statement that we were doing so only for the purpose of finding out whether a prima facie case had been made out. We would, therefore, not refer to the evidence any further. ", "Cheating is defined in 8. 415 of the IPC and the ingredients for that offence are : ", "(i) there should be fraudulent or dishonest inducement of a person by deceiving him; ", "(ii) (a) the person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or ", "(b) the person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived; and ", "(iii) in cases covered by the second part of (ii), the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property. ", "( ., 2 F S.C.R. 178.) Section 415 actually consists of two parts, each part dealing with one way of cheating - ", "1. Where, by deception practised upon a person the accused dishonestly or fraudulently induces that person to deliver property to any person or to consent that any person shall retain any property ; ", "2. Where, by deception, practised upon a person, the accused intentionally induces that person to do or omit to do anything which he would not do or omit to do, if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. ", "The question is whether these ingredients are satisfied by the prosecution evidence. We must point out that the learned trial Judge failed to analyse the evidence which he had at great length extracted keeping the proper angle of approach in view. Therefore, his conclusion is not made on a proper assessment and is not sustainable. We are inclined to agree with Mr. that the evidence, oral and documentary, taken together does justify the framing of a charge for the offence under s.420, IPC . Here again, we would like to reiterate that the position is a presumptive one open to rebuttal by the respondent. We are, therefore, of the view that a charge under s. 420 , IPC , should be framed by the learned trial Judge against the respondent. ", "The net result of the aforesaid discussion, therefore, is that a prima facie case has been established by the prosecution in respect of the allegations for charges under ss.l20B, 161, and 165 and 420, IPC , as also under s.5(1) read with s.5(2) of the Act. So far as the three draft charges relating to the offence punishable under s. 384 , IPC , are concerned, we agree with the learned trial Judge that the prosecution failed to make out a prima facie case. Therefore, except in regard to the three draft charges under s.384, IPC , charges in respect of the remaining 19 items shall be framed. The appeal is allowed to that extent. ", "Lot of argument has been made by Mr. that other persons who have been named in the application of the complainant Ext. 214-A, should also be proceeded against, particularly in regard to the charge of conspiracy punishable under s.l20-B, IPC . As we have already pointed out, is dead. One of the other persons shown in Ext. 214-A is also dead as indicated therein. Excepting , the Minister of Co-operation, , PW. 13, and , PW. 44, and a few other public officers who have been specifically named in Ext. 214-A, names of others were not disclosed and a prayer was made that all other officers who were involved in the matter may be proceeded against. It may be that some of these officers or outsiders have not behaved in an independent manner and have failed to act up to the expectation of the office they held. But that by itself may not be sufficient justification for prosecuting them criminally. Again, as pointed out by the learned trial , if that is to be done at this stage, the trial which has already been sufficiently protracted would have to be de novo and would required further time to be spent. It appears that some of these officers like have already retired and are no more in service. Almost five long years have intervened between the events and now. These are relevant aspects to be taken into consideration. So far as is concerned, the learned trial Judge has examined his conduct with reference to the matter relating to and has come to the conclusion one which may not be immediately rejected that he was anxious to watch the interests of the and, therefore, did not agree with the concessions proposed by the . We are inclined, therefore, to take the view that so far as is concerned, the trial Judge was justified in holding that he was not liable to be proceeded against as a co-conspirator. While dealing with this aspect of the matter, the learned Judge indicated that superior's direction was a germane consideration. We agree with Mr. 's submission that the superior's direction is no defence in respect of criminal acts, as every officer is bound to act according to law and is not entitled to protection of a superior's direction as a defence in the matter of commission of a crime. It is relevant to point out that the other persons alleged against were not before the as accused persons. There was, therefore, no question of discharging them. An application had been made to the trial and it is still open to the trial Judge to consider on the matterial available if anyone has to be proceeded against as a co-conspirator when the charge of conspiracy punishable under s. 120-B , IPC is framed. It is true that under s. 319 of the code de novo trial would be necessary. It is in the discretion of the trial to take a decision as to whether keeping all aspects in view any other person should be brought in as an accused to be tried for any of the offences involved in the case. We do not express any definite view in this regard and we consider it sufficient to indicate that this is a matter in the discretion of the trial court. ", "698 ", "There is one other aspect which required to be dealt with. The learned trial Judge while dealing with , PW. 41, in paragraph 653 observed. ", "\"There appears to be no doubt that is a disgruntled subordinate. The manner in which he came out with the suggestion of substituting his note, Exhibit 421, the manner in which volunteered his answers, would indicate that he had harboured an animus against . mis aspect of 's evidence, therefore, cannot be said to be reliable evidence against .\" ", "These observations against appear to be totally unwarranted and the learned trial Judge should not have, on the facts before him, come to this conclusion and castigated the public officer in the manner referred to above. We are somewhat surprised that the learned trial Judge did not even refer to the contents of the document, Ext. 421, with reference to which considerable evidence had been led. In this connection the evidence of PWs. 46, 47 and 49 should also have been considered by the learned trial Judge. These observations must, therefore, be expunged. The learned trial Judge will consider the entire evidence in its proper perspective when he finally disposes of the case. ", "We have no intention to make anything final at this stage except that the prosecution for the offence under 8. 384, IPC , must fail. Any observation made by us in any part of our Judgment is confined to the question as to whether charges should be framed and/or the order of discharge should be upheld. Even where we have said that a charge is to be framed the position is that a frime facie case has been made out which is open to be rebutted by the 1st respondent. The learned trial Judge is, therefore, free to come to his own conclusions on the basis of the evidence which is already on record and which may be led before him by the parties when the trial proceeds after the framing of the charges and he will decide whether the charges against the 1st respondent are made out or not on the basis of the entire evidence. ", "At the hearing Mr. for the appellant had prayed that we should give a direction to the learned Chief Justice to nominate a Judge other than , to take up A the further trial of the case and this prayer has been opposed by Mr. for the respondent. It is too well settled that litigants can have no say in regard to the choice of the judge before whom their lis must be heard. We have no doubt that , had dealt with the matter in a fair way and there is no warrant on the facts of the case for shifting the case from him to another learned Judge for trial. Recording of the prosecution evidence is almost over and but for a few more witnesses and some documents which might come, the prosecution has already laid its entire cards before the and , has, with reference to all this material, taken a view which we have reversed. Though we have no doubt in our mind that , acted fairly and impartially in disposing of the case in the manner he did, it cannot be said that there is no scope for apprehension in the appellant's mind that his complaint may not receive adequate and proper treatment at the hands of the same learned Judge who has already expressed himself one way. In these circumstances, while reiterating our opinion that we have no doubt that , acted fairly and impartially and without casting any reflection whatsoever on the learned Judge, we would, following the well known dictum that justice should not only be done but must also appear to be done, request the learned Chief Justice of the High to nominate another learned Judge to take up the matter from the stage at which , made the impugned order. We hope the learned Chief Justice will take prompt steps to nominate a learned Judge to take up the trial and once such nomination is made, the learned trial Judge will proceed expeditiously to dispose of the case finally. ", "M.L.A. Appeal allowed in part."], "relevant_candidates": ["0000151821", "0000198782", "0000481711", "0000646524", "0000927359", "0000943850", "0001360078", "0001379027", "0001398781", "0001502681", "0001712228", "0001758785", "0001802902", "0001807066", "0001985622"]} {"id": "0001595685", "text": [", J. ", "1. The facts which have given rise to the present appeal are briefly these: Defendants 1 and 3 are two brothers and defendant 2 is their mother. The father of defendants 1 and 3, who was the husband of defendant 2, left a will by which the whole of his properties vested in defendant 2. After his death defendant 2, the widow, managed for some time the properties, and thereafter defendant 1 managed the family affairs till May 1921, when he separated from his mother and the other brother. In the course of his management various loans were contracted. Some of the loans were taken by defendants 1 and 2 jointly and others were taken by defendant 1 alone. After the separation, two of the senior pleaders of were appointed arbitrators by defendants 1 and 2 to decide who, among the two defendants, was liable for the debts contracted. The arbitrators gave their award holding inter alia that defendant 2, that is to say, the mother, was liable for a debt of about Rs. 900 due to the plaintiff in the present case. On these allegations the plaintiff instituted the present suit for recovery of the money due on the hand-note executed in his favour by defendant 1 on 13th November 1921 against all the defendants. The defence of defendant 2 inter alia was that the plaintiff had no cause of action as against her. The of first instance decreed the suit against defendants 1 and 2 and dismissed the plaintiff's claim as against defendant 3. Against this decision defendant 2 preferred an appeal to the lower appellate . This appeal was however dismissed by the learned Additional District Judge of Pabna. Against the decree of the learned Additional District Judge, defendant 2 has come up to this on appeal. ", "2. On behalf of the appellant, defendant 2, it was contended in the first place that the plaintiff's claim against her, based as it was on the arbitration award was not maintainable, inasmuch as the plaintiff was not a party to the arbitration between defendants 1 and 2. This contention seems to me to be well founded. No doubt, it is true that the general rule as enunciated in Tweddle v. (1861) 1 B&S 393 that a stranger cannot enforce a contract between two other people, is not applicable in this country and that in India such a contract in certain circumstances can be enforced by a stranger thereto. But the circumstances in which it can be thus enforced have been enumerated in a Full Bench decision of in AIR 1930 Mad 382. In this case , J., after a full survey of all the case-law on the subject has held that the exception to the general rule that a contract cannot be enforced by a person who was not a party thereto, arises from the following circumstances: (1) where one of the parties to the contract afterwards agrees with the stranger to pay him direct; (2) where the contract creates a trust in favour of the stranger; (3) where the contract charges the money to be paid out of some immovable property; and (4) whore the money is due to the stranger under a marriage settlement, partition or other family arrangement. None of these circumstances existed in the present case. Defendant 2 never agreed with the plaintiff to pay him the money. No trus't was created in favour of the plaintiff and it was never arranged that the money due to the plaintiff was to be paid out of some immovable property and the money was not held to be due to the plaintiff under any marriage settlement, partition or other family arrangement. ", "3. On behaf of the respondent some reiance was paced upon three decisions of this Court: Protap Narain v. (1901) 5 CWN 386, AIR 1914 Ca 129 and (1918) 36 IC 792. As regards the case (1901) 5 CWN 386, I am of opinion that it is ceary distinguishabe. In that case a person was hed entited to sue for recovery of the money on the basis of a compromise to which she was no party, but she was so hed on the ground that the compromise of doubtfu rights, the case of some of the parties in the suit that was compromised being that a partition was invaid and inoperative whie the others maintained that it had been duy effected. In the present case there was no itigation which was terminated by the arbitration award; and it is not known whether there was any rea contest between defendant 1 and defendant 2, over the particuar debt due to the paintiff which I may mention again was a oan contracted on 13th November 1921, some months after the termination of defendant 's management of the famiy affairs. As regard's the other two decisions I mean the decisions reported in Debnarayan Dutt v. Chuni La AIR 1914 Ca 129 and (1918) 36 IC 792 a that I need say is that the rue enunciated in these two decisions was not foowed by two other ater decisions of this Court, viz., in AIR 1926 Ca 1009, and . ", "4. I would therefore hold, following the Pull Bench decision of reported in AIR 1930 Mad 382, that the plaintiff in the present case was not entitled to lay any claim against defendant 2 on the basis of the arbitration award, and that being so his claim against her ought to have been dismissed. The result therefore is that this appeal succeeds. The plaintiffs' claim against defendant 2 will stand dismissed. Defendant appellant 2 will get her costs in all the . ", ", ", "5. I agree."], "relevant_candidates": ["0000295165", "0000386480", "0000862612", "0001572011", "0001916066"]} {"id": "0001597981", "text": ["JUDGMENT , J. ", "1. This is a suit by a mortgagor against his mortgagees to prevent them from exercising their power of sale. Although in the plaint several averments are made in respect of the sale intended to be held on May 8, 1941, the relief asked for is not in respect of that particular sale. The plaintiff contends that the power of sale contained in the mortgage deed is invalid and inoperative and it should be declared that the defendants are not entitled to exercise the same. These two. prayers are followed by a prayer for injunction. No other relief is sought in the suit. ", "2. The mortgage was executed by the plaintiff on April 18, 1940, and the due date was July 18, 1940. From the pleadings it is clear that the due date has expired and the mortgagor (plaintiff) has failed to pay the mortgage debt. There has been no offer to redeem the mortgage. ", "3. The first contention raised on behalf of the defendants is that the suit as framed is not maintainable. It was argued that a mortgagor must file a suit for redemption and offer to pay the mortgage debt after the due date has expired if he wants any relief against the mortgagees who are acting under the mortgage deed. The plaintiff relied on three cases, (1877) I.L.R. 2 Bom. 252, (1920) 23 Bom. L.R. 1241 and (1940) 43 Bom. L.R. 553. The Advocate General for the plaintiff strongly relied on the last case where it was observed that a mortgagor can ask for an injunction in the event of the mortgagee attempting to exercise his power of sale improperly or irregularly. In the first case the suit was filed for redemption and the Court held that even after such a suit was filed the mortgagee could exercise the power of sale contained in the mortgage deed and cannot be restrained from exercising his power of sale merely because of the redemption suit. , in the course of his judgment, observed (p. 256): ", "The mortgagor is entitled to have the sale of the property suspended only if he can shew either that he has paid off the mortgage lien or that he has made a legal tender of the amount due which has been refused. ", " the due date had not arrived and the mortgagee had threatened to sell the property although the mortgage debt had not become due. That is clearly a different set of facts from what is found here. . in the course of his judgment expressly stated (p. 557): ", "No case was cited before me to show that if the right to redeem had not accrued to the mortgagor he could not bring in a suit for an injunction restraining a wrongful sale, but that his only remedy was either to pay or tender the moneys and allow the property to be sold, and then pursue his remedy in damages if any. ", "The facts there clearly show that the mortgage debt was alleged by the mortgagee to be due, while it was contended by the mortgagor that the event on which the due date was accelerated either had not happened or that the mortgagee had not exercised his option to call in his mortgage amount on the happening of such an event. It was therefore contended by the mortgagor that the mortgage debt had not become due. ", "4. The observations in each individual judgment have to be read in the light of facts found in the case, and under the circumstances it does not appear to me that any of the three cases relied upon by the plaintiff sustains the contention that after the mortgage debt has become due the mortgagor is entitled to file a suit to restrain the mortgagee from exercising the power of sale without offering to redeem and tendering the amount. I have already pointed out that in this case the plaintiff does not suggest that the mortgage debt has not fallen due. The plaint admits that it has fallen due. ", "5. The contract between the parties is found in the indenture of mortgage. By that document the plaintiff had stipulated that he would pay the mortgage amount on July 18, 1940, to the mortgagees. The present demand on the part of the plaintiff is to enforce his right under that contract although he has committed a breach of one of the most important terms of the same. The argument of the defendants is that as the plaintiff has committed a breach of the contract he has no right to come to and seek to enforce it against the defendants. It is argued that relief by way of injunction is granted on the same principles on which the will order specific performance, and in this case if the plaintiff had asked for specific performance of this contract the would have refused it because the plaintiff himself had committed a breach thereof. The should similarly refuse the relief by way of injunction. In my opinion there is considerable force in this contention. The relief by way of injunction is always discretionary and the will be slow to grant such a relief to a party who admits that he has committed a breach of the contract and at the same time wants to prevent the opposite party from enforcing his rights under the contract. Moreover the relief by way of injunction should in this case be very well and properly accompanied by a prayer for redemption. If the plaintiff chooses to refrain from carrying out his obligations and prays only for an injunction, it is difficult for the to exercise a discretion in his favour. To permit the plaintiff to do so would mean that the plaintiff can persist in his breach and prevent the defendants from enforcing their rights under the contract. Moreover in this case the express terms of the contract contained in the mortgage deed show that if the power of sale was exercised improperly or irregularly or that the same was unnecessary, the remedy of the plaintiff in respect of any breach of the proviso was to be in damages only. That is the usual clause in a mortgage deed and is inserted for the benefit of the mortgagor as well as the mortgagees. Without such a clause if an objection is taken to the sale at the time of the auction, the purchaser may be scared away and may not offer a proper price. In order, therefore, that the purchaser may give a proper value this clause is found in mortgage deeds. By that clause it is clear that the parties had stipulated that in the event of an improper, irregular or unnecessary exercise of the power of sale the remedy of the aggrieved party was to be only in damages. Having regard to this clause the will be most reluctant to give an injunction to the mortgagor. In my opinion, the suit as framed is not maintainable and the mortgagor should pray for redemption before asking the to intervene and grant an injunction restraining the defendants from exercising their power of sale. This leaves the question whether the power of sale is wholly illegal. ", "6. On the merits an interesting argument was advanced on behalf of the plaintiff. It was contended that by Section 69 of the Transfer of Property Act the legislature had provided that in certain cases only a mortgage deed might contain a power of sale. Relying on the words of Section 69 it was argued that the power of sale should be without any additions, limitations or ancillary rights. The power of, sale in this case is in the following terms:-- ", "...And it is hereby agreed and declared that notwithstanding anything contained in the Trustees and Mortgagees Powers Acticle 1886, it shall be lawful for the mortgagees or any person acting on their behalf at any time or times hereafter as well before as after the due date without any further consent on the part of the mortgagor to sell or to concur in the sale of the mortgaged premises hereby mortgaged and granted or expressed so to be or any part or parts thereof without the intervention of the and either together or in parcels or lots and either by public auction or private contract and either with or without any special conditions or stipulations relative to title or evidence of commencement of title or otherwise which may be deemed proper by the mortgagees with power to postpone such sale from time to time and to buy in the said hereditaments and premises or any part thereof at any sale by public auction or to rescind or vary any contract for the sale thereof and to resell the same from time to time being not answerable or responsible for any loss or diminution occasioned thereby and for the purposes aforesaid or any of them to make agreements execute assurances give effectual receipts or discharges for the purchase money and do all other acts and things for completing the sale which the person or persons exercising the power of sale shall think proper AND the aforesaid power shall be deemed to be a power to sell or in selling without intervention of the within the meaning of section 69 of the Transfer of Property Act, 1882. ", "It was contended that this was not authorised by Section 69 of the Transfer of Property Act and therefore the power was invalid. It was argued that this power was one and indivisible and as it was bad the mortgagees had no right to sell the property without the intervention of . In this connection it was pointed out that the draftsman of the indenture of mortgage had committed the error of borrowing the form from English forms and precedents. It was argued that the law in England was different and therefore this form could not be properly adopted for mortgages in India having regard to the provisions of the Transfer of Property Act . ", "7. In my opinion this contention of the plaintiff is unsound. The first statute enacted in England incorporating the rights of the mortgagees was 23 & 24 Vic. Clause 145 (Lord Cranworth's Act) of 1860. Even before that in Davidson's Conveyancing Precedents of 1858 (Vol. II, p. 760) a form of mortgage with a power of sale worded exactly as in this case is shown to be the usual form. The Act of 1860 recognised that this power was commonly inserted in mortgages. This is made clear by the preamble to that Act. By the Act it was presumed to exist. Next came the Conveyancing Act of 1881 (44 & 45 Vic. Clause 41). Section 19 of that Act recognised this as an implied power of sale in the mortgagee. At present the Law of Property Act of 1925 (15 Geo. V, Clause 20), Section 101 , governs the rights of the parties in England. By Section 101(1)(i) it is provided that such a power of sale is implied in favour of a mortgagee. The expression \"power of sale\" thus appears to be a well-known expression in conveyancing. In printed in 1858 the marginal note against a clause worded as here is \"power of sale.\" In India the same expression is known and has been understood in the same way so far back as 1875 in (1875) I.L.R. 2 Bom. 1. ", "8. On behalf of the plaintiff it was argued that this is an incorrect way of approaching the case. The English law should not be looked at and a reference to the precedents there is not relevant. The has to consider only Section 69 of the Transfer of Property Act. I concede that in interpreting Section 69 English statutes cannot govern the plain meaning of the words used in it. But I am unable to find anything in Section 69 which in any way is in conflict with or different from the English Act . The words \"power of sale\" are not defined anywhere in the Act. If it is a technical expression it would not be improper for the to find out its meaning as judicially interpreted. was decided before the Transfer of Property Act of 1882 was enacted and can therefore be safely relied upon to construe the words \"power of sale\" in connection with a mortgage. The words used in Section 69 are \". . . a mortgagee . . . . shall, subject to the provisions of this section, have power to sell\" &c. and the insertion of a clause giving such a power when the property is situate in one of the Presidency towns or the towns mentioned in Sub-section (c) is valid. It may be noted that in Sub-section (c) the words used are \"Where a 'power of sale' without the intervention of the is expressly conferred on the mortgagee . . .\" The words \"power of sale.\" used in Sub-section (c) refer to a clause to be expressly included in the mortgage. They must be understood therefore to mean what is ordinarily known and understood in conveyancing by that expression. ", "9. The argument of the plaintiff based on the construction of the words used in this case is also unsound. A power of sale must include all steps which are necessary to be taken in that connection. In order to make the power bad words must be pointed out in the section which render the whole power invalid according to law. It should be remembered that as between adults the law permits the greatest freedom of contract unless it is expressly taken away. Therefore if the plaintiff contends that this particular clause restricts in any way the power of the parties to enter into a contract, the burden is on him to show that the words of the section prevent an agreement between the parties as embodied in the document. I am unable to find any words in Section 69 which prevent the parties from entering into the contract found in this mortgage deed. It was argued that under Section 69 a mortgagee had no power to postpone the sale. I am unable to accept that contention. A power to sell must necessarily include a power to postpone the sale. It is a power to sell either now or at a later date. I do not think that expression is against the words used in Section 69 . It was contended that the power to buy in, or rescind or vary any contract for sale was bad and against the words of Section 69 . This argument is based on a misapprehension. The words used are not \"buy out\" but \"buy in.\" No mortgagee has a right to buy the mortgage premises without an express authority from the . If he attempted to buy directly or indirectly, on proof that the transaction was of that nature, the s have always held that the mortgage subsisted and the transaction of sale was a nullity. I do not think the expression \"buy in\" has ever been intended to give the mortgagee that right. It should be realised that if at an auction sale there are several intending purchasers and the highest bid is very inadequate, a way has to be found by which the property is not sold to the highest bidder and cause a tremendous loss both to the mortgagor and the mortgagee. The expression \"buy in\" is therefore used so that in effect the party at whose instance the auction is held takes the property out of the auction. The only way in which the auction can be closed is by such an offer being given and the property not being knocked down to an outsider. The expressions used after the words \"buy in\" make this position very clear. The mortgagee is given a right to buy in or to rescind i.e. to set aside the contract of buying or vary any contract for sale and to resell the same. Therefore when an auction sale is found not to result in realising the proper value, the mortgagee may either postpone the sale, or if he finds that he is unable to do so because the auction sale had started, he has to resort to the second way to prevent the property being knocked down at an undervalue and to resell the same. I do not think, on a true interpretation, the clause relating to the power of sale gives the mortgagees a right to buy the property for themselves. Unless that construction is put on this clause there is nothing to violate the words \"power to sell\" used in Section 69 . In my opinion, therefore, this clause does not violate Section 69 in any manner and the power is valid. ", "10. It was argued that if a portion of the power is bad the whole power is bad because it is one and indivisible. Having regard to the view which I have taken, I do not think it necessary to discuss this aspect of the case. ", "11. My findings on the issues are: No. 1 in the negative; No. 2: The power is valid; No. 3 in the affirmative and No. 4 in the negative. The suit is, therefore, dismissed with costs. The interim injunction granted on May 8, 1941, is dissolved. Costs to include costs reserved. The mortgage deed provides that if the mortgagees' rights have to be defended in any manner the mortgagees will be entitled to claim their costs when taxed as between attorney and client. Ordinarily I am reluctant to award costs taxed otherwise than between party and party, but in the present case the mortgagor himself has challenged the mortgagees' title and has attacked the right found in the contract. I, therefore, award the defendants costs against the plaintiff when taxed as between attorney and client."], "relevant_candidates": ["0000901146", "0001125147", "0001301800", "0001883222"]} {"id": "0001625974", "text": ["JUDGMENT , J. ", "1. These three writ cases involve common question of law and hence they have been heard together and are being disposed of by a common judgment. ", "2. The authority concerned, i.e., respondent No. 2, has held that the petitioners were liable to pay sales tax on wheat bran (chokar). ", "3. Whether wheat bran (chokar) is a cattle feed or not and whether the petitioners are liable to pay sales tax on the sale of wheat bran are the intricate and significant questions involved in these writ cases. ", "4. Admittedly the period in question is the period before 29th June, 1985 (the date on which Notification No. S.O. 611 dated 29th June, 1985, came into force). ", "5. The petitioners claim that no sales tax was payable on the sales of wheat bran as, according to the petitioners, it was exempted under item No. 35 of the Notification No. Bikrikar/San/1026/77-14547 dated 26th December, 1977 (annexure 1 to C.W.J.C. No. 2725 of 1984), as a cattle feed; whereas, in short, the submission advanced on behalf of the is that the effect of exemption notification dated 26th December, 1977, is taken away because a retroactive notification (with effect from 26th December, 1977) was issued on 9th March, 1978 (Notification No. 3320), which made \"bran\" exigible to tax. ", "[It will be most pertinent to note that in annexure 1 to C.W.J.C. No. 2725 of 1984; in item No. 35, explanation (i) to (iii) has been wrongly typed as this explanation was inserted by Notification No. 3322 dated 9th March, 1978 retrospectively from 26th December, 1977.] In other words, the submission on behalf of the is that the retroactive notification of 9th March, 1978 (No. 3320) inferentially and by implication taxes bran by superseding the exemption notification. The submission on behalf of the also was that an evidence of intention to tax bran should be read or inferred by implication by allowing the notification of rate of tax or exigibility in order to override the exemption. ", "6. The petitioners claim (in C.W.J.C. No. 2725 of 1984), by a petition dated 29th March, 1984, that no sales tax was leviable on the sale of wheat bran which, according to the petitioners, was a cattle feed, was rejected by the Deputy Commissioner of Commercial Taxes, Circle, (respondent No. 2), by his order dated 4th May, 1984 (annexure 5 to C.W.J.C. No. 2725 of 1984) (wrongly mentioned as order dated 29th March, 1984, in paragraph 1 of the writ petition and also in the prayer portion). The petitioners also challenged annexure 5(1). ", "Similar orders as in annexures 5 and 5-A were passed by the Assistant Commissioner of Commercial Taxes, Singhbhum Circle, Jamshedpur (respondent No. 3) in C.W.J.C. No. 5637 of 1985 and by the Deputy Commissioner of Commercial Taxes, Bokaro Circle, Bokaro Steel City (respondent No. 2), in C.W.J.C. No. 1918 of 1984 as in annexure 4. ", "Thus, the impugned annexures are annexures 5 and 5-A in C.W.J.C. No. 5637 of 1985 and annexure 4 in C.W.J.C. No. 1918 of 1984. The orders passed in these two writ cases are of different dates, as would appear from the impugned annexures. ", "7. The answer to the significant questions rests upon the interpretations of the two notifications referred to above and also the notification dated 29th June, 1985 (S.O. 611). These notifications will be referred to hereafter. ", "8. The petitioner in C.W.J.C. No. 2725 of 1984 is a registered partnership firm and runs a flour mill which is engaged, inter alia, in producing various products, namely, bran out of wheat crushing, atta, maida and sujji. ", "Similarly, the petitioner in C.W.J.C. No. 5637 of 1985 is a private limited company and is engaged, inter alia, in the very same products. ", "Similarly, the petitioner in C.W.J.C. No. 1918 of 1984 is a limited company and is engaged, inter alia, in producing the very same products. ", "(We are not concerned in the present writ cases with regard to the products, namely, atta, maida and sujji, as the present writs have been confined only to the question of the product, namely, \"wheat bran\".) ", "9. Before I deal with the question involved in these writ cases, it is most pertinent to quote the three notifications, referred to in the aforesaid paragraphs. ", "In the notification dated 26th December, 1977, it would not be pertinent to quote any other item except item No. 35. (This notification has been marked annexure 1 to C.W.J.C. No. 2725 of 1984.) (A) Notification dated 26th December, 1977, has been made annexure 1 to the writ case, C.W.J.C. No. 2725 of 1984, which is quoted as below : ", "No. Bikrikar/San. 1026/77-14547 dated the 26th December, 1977. ", "In exercise of the powers conferred by Clause (a) of Sub-section (3) of Section 6 of the Bihar Sales Tax Fifth Ordinance, 1977 (Bihar Ordinance No. 257 of 1977), the Governor of Bihar, in supersession of all previous notifications in this regard, is pleased to exempt the sale of goods specified in the second column of the Schedule annexed hereto from the levy of 'sales tax' subject to the conditions and restrictions, if any, set out in the corresponding entry in the third column thereof. ", "SCHEDULE ", "------------------------------------------------------------- ", "Serial No. Description of goods Conditions and restri- ", "ctions subject to which exemption has been allowed ", "-------------------------------------------------------------- ", "1 2 3 ", "------------------------------------------------------------- ", "* * * 35. Cattle feed and poultry feed. * * * ------------------------------------------------------------- 2. This notification shall come into force with effect from 26th December, 1977. (B) Notification dated 9th March; 1978, on which the submission on behalf of the respondent () is based, as follows : ", "Before I quote these notifications, it is pertinent to mention that in the Bihar Gazette (Extraordinary) dated 13th March, 1978, there were two notifications dated 9th March, 1978 and they are as follows : ", "(i) \"No. BikrikarlBB/12215/77-3320 dated the 9th March, 1978. ", "In exercise of the powers conferred by the proviso to Sub-section (1) of Section 11 of the Bihar Sales Tax Fifth Ordinance, 1977 (Bihar Ordinance No. 257 of 1977), the Governor of Bihar is pleased to make the following amendments in the Schedule appended to the Government of Bihar, Finance (Commercial Taxes) Department Notification No. Bikrikar/San/1026/77-14545 dated the 26th December, 1977, as amended from time to time, namely :- ", "Amendments.-1. In the said Schedule, for serial No. Hand its corresponding entries in columns 2 and 3, the following serial number and its corresponding entries shall, respectively, be substituted, namely :- ", "---------------------------------------------------- ", "1 2 3 ", "---------------------------------------------------- ", "11. Atta, maida, sujji and bran. 3 per cent. ", "2. In the said Schedule, the words 'excluding atta, maida, sujji and paddy' appearing within bracket in column 2, against serial No. 12, shall be substituted by the words 'excluding atta, maida, sujji, bran and paddy'. ", "3. This notification shall be deemed to have come into force with effect from 26th December, 1977. ", "By order of the Governor of Bihar, Commissioner of Commercial Taxes and ex officio Special Secretary to Government. ", "(This notification has been marked annexure B in the counter-affidavit filed on behalf of the respondents in C.W.J.C. No. 5637 of 1985.) ", "(ii) San Vi. Kar/BB/12215/77-3322, 9 March, 1978. ", "Bihar vikri kar pancham adyadesh 1977 (Bihar adyadesh sankya 257/1977) ki dara ki updara (3) ke kand (ka) dwara padat shaktiyon ka prayog karte huye Bihar Rajyapal samay-samay par yatha samshdith Bihar sarkar, vith (vanijya kar) vibagh ki adhisuchna sankya ki kar/sankya/1026/77-14547, dinank 26 December, 1977 se samlagan anusuchi me nimna samshodan karte hain:- ", " ", "1. Ukta anusuchi ki kram sankya 35 ke stamba 2 me ankath pravishtiyon ke stan par nimna pravishtyan pratisyapith ki jayegi:- ", "-------------------------------------------------------------- ", "1 2 3 ", "-------------------------------------------------------------- ", "\"Pashuchara thatha kukutchara\" Spashtikaran :-Pashuchara thatha kukutchara se abhipret hai- (1) Gayayon ke liye pelets yevam mash concentrates (2) Sugar maash yevam pelets. (3) Layers, growers cheeks, yevam bierlers ke liye kukut maash yevam pelets. ", "(4) Kukut kadya concentrates. ", "2. Yah adhisuchna 26 December, 1977 se prabavi samji jayegi. ", "Bihar Rajyapal ke aadesh se kar aayukth-saha-paden vishesh sachiv. ", "------------------------------------------------------------------ ", "San Vi. kar/BB-12215177-3323, 9 March, 1978. ", "Adhisuchna sankya 3322, dinank 9 March, 1978 ke angrezi me nimnalikith anuvad Bihar Rajyapal ke pradikar se iske dwara prakashit kiya jatha hai jo Bharat Savdan ke anuched 348 ke kand (3) ke adin angrezi bhasha me uska pradikrit pat samja jayega. ", "Bihar Rajyapal ke aadesh se kar aayukth-saha-paden vishesh sachiv. ", "No. Bikrikar \\BB\\12215\\77-3322 dated the 9th March, 1978. ", "In exercise of the powers conferred by Clause (a) of Sub-section (3) of Section 6 of the Bihar Sales Tax Fifth Ordinance, 1977 (Bihar Ordinance No. 257 of 1977), the Governor of Bihar is pleased to make the following amendments in the Schedules appended to the Government of Bihar, Notification No. Bikrikar/San/1026/77-14647 dated the 26th December, 1977, as amended from time to time, namely :- ", "Amendments.-1. In the said Schedule, for the entry in column 2 against serial No. 35, the following entry shall be substituted, namely :- ", "'Cattle feed and poultry feed. ", "Explanation.-(1) Pellets and mash concentrates for cattle. ", "(2) Pig mash and pellet. ", "(3) Poultry mash and pellets for layers, growers, chicks and broilers. ", "(4) Poultry feed concentrate.' ", "2. This notification shall be deemed to have come into force with effect from 26th December, 1977. ", "By order of the Governor of Bihar, Commissioner of Commercial Taxes and ex officio Special Secretary to Government. ", "(This notification has been marked annexure A in the counter-affidavit filed on behalf of the respondents in C.W.J.C. No. 5637 of 1985.) I have purposely quoted this notification which was published in both the j languages, i.e., in Hindi and in English, as the learned counsel for the respondents has in support of his submission, argued that if the notification is published in both the languages (Hindi and English) and in the English translation of the Hindi notification if an omission to translate a word has occurred then it would be the Hindi version of the notification which will prevail. ", "(iii) Then remains the notification dated 29th June, 1985 (S.O. 611) which needs to be quoted. ", "I would omit other items from this notification which are not necessary for the purpose of the present case. ", "No. S.O. 611 dated the 29th June, 1985. ", "In exercise of the powers conferred by Sub-section (3) of Section 7 of Part I of the Bihar Finance Act, 1981 (Bihar Act No. 5 of 1981), the Governor of Bihar is pleased to make the following amendments in the Schedule appended to the Government of Bihar, Finance (Commercial Taxes) Department Notification No. Bikrikar/San/1026/77-14547 dated the 26th December, 1977, as amended from time to time, namely :- ", "Amendments.-1. In the said Schedule, serial Nos. 43 and 63 and their corresponding entries in columns 2 and 3 shall be omitted. ", "2. In the said Schedule, for serial Nos. 9, 21 and 35 and their corresponding entries in columns 2 and 3, the following entries shall be substituted :- ", "--------------------------------------------------------- ", "1 2 3 ", "--------------------------------------------------------- ", "* * * 35. (1) Pellets and mash concentrates for cattle. (2) Pig mash and pellets. (3) Poultry mash and pellets for layers, growers, chicks and broilers. (4) Poultry feed concentrates. 3. This notification shall come into force with effect from 1st July, 1985. ", "[I must mention here that neither of the parties made this notification of 29th June, 1985 (S.O. 611) an annexure either to the writ petition or to the counter-affidavit, but this notification was produced before the court at the time of argument.] ", "10. Thus, a look at the Notification No. 14547 dated 26th December, 1977, shows that, amongst others, \"cattle feed\" and \"poultry feed\" were exempted from levy of sales tax without any condition or restriction being imposed as per column 3 of the Schedule to the notification and the said notification came into force with effect from 26th December, 1977. ", "Thereafter on 9th of March, 1978, came two of the notifications-one being No. 3320 and the other being 3322. These notifications were also published in English version simultaneously. By Notification No. 3320 dated 9th March, 1978, rate of tax (3 per cent) was introduced on \"bran\" and by Notification No. 3322 dated 9th March, 1978, an explanation to the words \"Pashuchara tatha kukutchara\" was added and in the explanation it was said as below : ", "Spashtikaran :-Pashuchara tatha kukutchara se abhipret hai:- ", "(1) ... ", "(2) ... Details already referred to in (3) ... paragraph 9 of the judgment. (4) ... ", "Whereas, in the English (Notification No. 3322) translation of this Hindi notification the words \"pashuchara tatha kukutchara se abhipret hai\" were omitted to be translated. ", "11. The stand taken on behalf of the respondents was that the extent and scope of the words \"cattle feed\" was fully explained by Notification No. 3322 dated 9th March, 1978 and no item other than the four items mentioned therein classified for the exemption under entry No. 35 of Notification No. 14547 dated 26th December, 1977 (as amended by Notification No. 3322 dated 9th March, 1978). Further stand taken on behalf of the respondents was that \"\" was included in the Notification No. 3320 for fixing the rate of tax (3 per cent) and hence it was submitted that as the rate of tax was fixed by the Notification No. 3320 issued on the same date (i. e., 9th March, 1978), (chokar) was exigible to tax under the specific entry made in this regard in that notification. On behalf of respondents it was further submitted that if the intention of the legislature was to exempt it () from taxation, it would have been included to the category of cattle feed in the amended entry 35 of Notification No. 3322 of the same date, i. e., 9th March, 1978. ", "12. Though, from the period 26th December, 1977, the petitioner (in C.W.J.C. No. 2725 of 1984) effected sale of wheat bran obtained by it in the manufacturing process, the petitioner paid sales tax including additional taxes thereon under a mistaken impression that it was liable to tax; however, on realising the mistake the petitioner (of C.W.J.C. No. 2725 of 1984) filed a petition (annexure 2 of Writ Case No. 2725 of 1984) before respondent No. 2 (the Deputy Commissioner of Commercial Taxes, Barh Circle, Barh) claiming refund of the same which was refused by the impugned annexures [annexures 6 and 5(1) of C. W. J. C. No. 2725 of 1984]. ", "13. As already stated above. Notification No. 14547 dated 26th December, 1977, does exempt \"cattle feed and poultry feed\" from the levy of sales tax. ", "The learned counsel for the petitioners submitted that wheat bran was essentially a cattle feed and as such came under item 35 of the list of exemptions-vide Notification No. 14547 dated 26th December, 1977 and hence was not exigible to any sales tax. ", "The learned counsel for the petitioners submitted that the explanation put by by Notification No. 3322 dated 9th March, 1978, only explained the words \"cattle feed and poultry feed\" and it neither restricted nor extended the meaning of the words \"cattle feed and poultry feed\". In short, the submission was that the purpose of adding the explanation was only to explain the word \"cattle feed and poultry feed\" and hence no tax was leviable on the sale of the aforesaid goods. ", "14. Earlier to Notification No. 14547 dated 26th December, 1977, \"cattle feed\" was liable to be taxed under the sales tax but the notification dated 26th December, 1977, exempted it from the leviability of any sales tax. What is apparent is that by the subsequent Notification No. 3322 dated 9th March, 1978, only an explanation in serial No. 35 of the original notification (dated 26th December, 1977), was inserted and there was no amendment in column 3 of the original notification dated 26th December, 1977 which had exempted \"cattle feed and poultry feed\" from the purview of sales tax. ", "15. Thus, the significant question to be decided is whether chokar (wheat bran) was a cattle feed ? ", "I will take up this question first as this is the main question. ", "16. The learned counsel for the petitioners has submitted that chokar (wheat bran) was essentially a cattle feed not only in commercial parlance but also in technical, common and legislative parlance. Learned counsel for the petitioners has drawn my attention to the materials on the record including unambiguous admissions by the authorities of the to the effect that chokar was essentially a cattle feed and has referred to various annexures appended to the supplementary affidavit filed on behalf of the petitioners (of C.W.J.C. No. 2725 of 1984). Learned counsel for the petitioners has drawn my attention to the averment made by the petitioners to the effect that chokar (bran) was essentially a cattle feed. As a fact this averment has not been traversed/repudiated by the respondents in their counter-affidavit and thus chokar (bran) being essentially a cattle feed stands admitted by the respondents. ", "In order to strengthen the submission further, the learned counsel for the petitioners has drawn my attention to a letter dated 14th October, 1985 (annexure 7 to the supplementary affidavit filed on behalf of the petitioners in C.W.J.C. No. 2725 of 1984). This letter is from the Joint Secretary to , Patna, addressed to , Patna and is in reply to the letter dated 10th October, 1985, sent by the President by the aforesaid association. This letter (annexure 7) from clarifies as to what a wheat bran is. It is pertinent to quote this letter : ", "To The President, Bihar Roller Flour Millers Association, Kaveri Apartment, Bandar Bagicha, Patna. ", "Sub: Certification of wheat bran as cattle feed. ", "Sir, I am directed to refer to your letter No. 6/85-43 dated 10th October, 1985, on the subject and to say that wheat bran is essentially a cattle feed. ", "Yours faithfully, Sd/- ", "14/10. ", "Joint Secretary to Government. ", "My attention was also drawn to another letter of dated 15th October, 1985 (annexure 8 to the supplementary affidavit filed by the petitioners). The petitioner itself had, by its letter dated 14th October, 1985, asked for a clarification on the subject and through its Joint Director, Cattle feed, Animal Husbandry Department, clarified that to the following effect by his letter dated 15th October, 1985. ", "It is again pertinent to quote reply by itself by way of clarification sought for. ", "Upayukth vishayak aapke patrank dinank 14-10-85 ke prasang men soochit karna hai ki chokar pasu aahar hai. ", "17. My attention was further drawn to another letter (annexure 9 of the supplementary affidavit filed by the petitioners) from the Director, , dated 17th February, 1986, addressed to the Executive Director of The learned counsel for the petitioners, while drawing my attention to this letter submitted that the , New Delhi, was an incorporate body of and was highly technical body from whom a clarification about wheat bran and their use in India was called for and the reply from them (annexure 9) was as follows : ", "U.S. Wheat Associates, Representing Wheat Grower Organizations of the United States. ", "New Delhi February 17, 1986. ", "The Executive Director, , P.O. Shree Madhav Mills, Patna-800 008. ", "Dear Sir, With reference to your letter No. 195 of February 05, 1986; we wish to inform you that wheat bran is the coarse outer covering of the wheat kernel as separated from clean and scoured wheat in the usual process of commercial milling. Bran constitutes about 14 1/2 per cent of the wheat kernel included in whole wheat flour but more often removed and used in animal or poultry feed. Of the nutrients in whole wheat, the bran, in addition to indigestible cellulose material contains about: 86 per cent of the niacin, 73 per cent of the pyridoxcins, 50 per cent of the pantothenic acid, 42 per cent of the riboflavin, 33 per cent of thiamine, 10 per cent of the protein. The above nutrients are also available in animal and poultry feed and to a lesser extent in whole wheat products. In human diet, indigestible cellulose material of the bran, also known as \"dietry fibre\" tends to add bulk to intestinal contents, mainly through its absorption of water and other liquids present in the digestive tract. ", "In most countries wheat bran which is separated in commercial milling process is used as animal and poultry feed and not for human consumption. In our knowledge wheat bran in India is also used for animal feed and not for human consumption. ", "In case we can be of any further assistance, please feel free to write to us. Thanking you for your interest in us. ", "Very truly yours, for Sd/-L. (L. ) Director. ", "18. Again my attention was drawn to a certificate dated 1st March, 1986 (annexure 10 to the supplementary affidavit filed by the petitioners), granted by the Director-in-charge, , New Delhi. This certificate dated 1st March, 1986, certified as follows: ", "1-3-86 To whomsoever it may concern: ", "This is to certify that brown bread is manufactured from whole wheat flour only. Bread cannot be made out of wheat bran only. Wheat bran is only used as a cattle feed. ", "Sd/- . ", "(Dr. ) The learned counsel for the petitioners also referred to a letter dated 3rd February, 1986, written by , Private Secretary to the Minister of Revenue and Land Reforms and Relief Rehabilitation Department, . This letter is dated 3rd February, 1986 and has been marked as annexure 11 to the supplementary affidavit filed by the petitioners. ", "It is again pertinent to quote this letter : ", "Dinank 3-2-86 , , Patna City, Patna. ", "Mantri rajasva evam bhumi sudhar ke pas kayi gaye aur bachde hai jinke kane ke liye chokar ki avasyakta hai. ", "Kripaya pratimah panch bora chokar mulya lekar dene ki vyavastha ki jai. ", "Sd/-Sarayu Sinha; 3-2-86. ", "(Sarayu Sinha) In support of the submissions that in common commercial parlance also wheat bran was understood and was known as \"cattle feed\", my attention was drawn to an affidavit (annexure 12 to the supplementary affidavit filed by the Accountant of one , Patna City). This affidavit is dated 21st January, 1986 and it is again pertinent to quote the relevant extract of this affidavit: ", ".... ", ", Kila Road, Patna City men lekapal ke pad par sthapit hun aur goshala ke karya kalapon se poorna avagath hun. ", "Shri Krishna Goshala men gayon ko gehu ka chokar kilaya jatha hai. Mai goshit kartha hun ki gehu ka chokad pasuwon ke liye ek mukya aahaar hai aur yeh padarth mavesiyon ko kilane ke kam me aatha hai. ", "The learned counsel for the petitioners also drew my attention to an affidavit sworn by the proprietor of the firm , at North Market Road, Ranchi, which deals mainly in cattle feed. This affidavit has been marked as annexure 13 and is dated 22nd February, 1986. It is again pertinent to quote this affidavit (annexure 13 to the supplementary affidavit filed by the petitioners): ", "In , Ranchi. ", "Affidavit I, , son of Sri , resident of North Market Road, P.O., P.S. and District Ranchi, do hereby solemnly declare as under: ", "1. That I am the proprietor of the firm , located at North Market Road, Ranchi. ", "2. That my firm is mainly dealing in cattle feed only. ", "3. That I on behalf of my firm use to purchase wheat bran (chokar) from various flour mills and sell the same to the customers who purchase it for the purpose of feeding their cattle. ", "4. That in the market also chokar is understood as cattle feed. ", "5. That to my knowledge the use of chokar (wheat bran) is to feed the cattle like cows and buffaloes, etc. ", "6. That the statements made above has been read by me and I have understood the same and they are true to my knowledge. ", "Sworn & signed this affidavit this the 22nd day of February, 1986, at Ranchi. ", "Deponent. ", "Sd/- . ", "Sd/- Illeg. ", "Identified by me 22-2-86. ", "The learned counsel for the petitioners also referred to two other affidavits, i.e., annexures 14 and 15 of the supplementary affidavit filed by the petitioners, which are to the same effect as that of annexure 13. It would be pertinent to quote those two affidavits also: ", "(a) Affidavit I, , aged about 36 years, resident of Bodam Bazar, P.O., P.S. and District Hazaribagh, do hereby solemnly affirm and declare as follows: ", "1. That I am the partner of the firm , Hazaribagh. ", "2. That my firm is mainly dealing in cattle feed and food grain items. ", "3. That I on behalf of my firm use to purchase wheat bran (chokar) from various flour mills and sell the same to the customers who purchase it for the purpose of feeding their cattle. ", "4. That in the market also chokar is understood as cattle feed. ", "5. That to my knowledge the use of chokar (wheat bran) is to feed the cattle like cows and buffaloes, etc. Sd/- Bishwanath Agrawal. ", "Verification I, do hereby declare that the statements made above are true to the best of my knowledge, information and belief, signed and verified on this the 22nd day of February, 1986, at Hazaribagh. ", "(b) Before Notary Public, . ", "Affidavit I, , s/o , resident of Giridih P.S. Giridih Dist. Giridih, do hereby solemnly affirm and declare as follows : ", "1. That I am the proprietor of the firm M/s. Shree Mahabir Khadya Bhandar, Giridih. ", "2. That my firm is mainly dealing in cattle feed. ", "3. That I on behalf of my firm use to purchase wheat bran (chokar) from various flour mills and sell the same to the customers who purchase it for the purpose of feeding their cattle. ", "4. That in the market also chokar is understood as cattle feed. ", "5. That to my knowledge the use of chokar (wheat bran) is to feed the cattle like cows and buffaloes, etc. Sd/- . ", "Verification I, , do hereby declare that the statements made above have been read by me and I have understood the same and they are true to my knowledge, information and belief, verified at Giridih dated 18th day of February, 1986. ", "19. It would be relevant to mention here that the respondents, in their counter-affidavit, have not traversed or contradicted these materials on the record and thus the fact that bran (chokar) is commercially used as \"cattle feed\" and is commonly sold for that purpose, has not been denied by the respondents in their counter-affidavit. ", "20. In the case of , reported in 43 STC 386, a Bench of at Ahmedabad, interpreting the words \"cattle feed and poultry feed\", held as follows: ", "...on a true and correct interpretation of the words 'cattle feed' and 'poultry feed', those terms must include not only that food which is supplied to domestic animals or birds as an essential ration for the maintenance of life but also that feed which is supplied over and above the maintenance requirements for growth or fattening and for production purposes, such as for reproduction, for production of milk, eggs, meat, wool or feathers and, in the case of animals, also for efficient output of work. In modern times, 'cattle feed' and 'poultry feed' include a large variety of concentrates, in addition to roughages, that have a high value because they are rich in easily digested nutrients and feed supplement. Amongst the feeds which are considered essential for the proper nutrition of animals and birds; which are to be kept in a state of efficient production, are included vitamins and, more particularly, vitamins A and D, which have been found to have a profound effect upon live-stock farming by increasing the efficiency of animal production and preventing serious nutritional diseases. Vitamin A, which is required for growth, reproduction, production and even for maintenance and vitamin D, which is needed to enable the animal to assimilate and use other important elements of its feed, are most apt to be lacking in natural live-stock feeds and that they are included as additives in mixed feeds so as to make good the deficiency. ", "Whichever way one looks at the matter, therefore, whether one looks at it from the angle of the etymological meaning of the word in the context in which it is used here along with fodder and concentrates, or whether one looks at it from the angle of a person conversant with the industry or trade of live-stock farming or poultry raising, the words 'cattle feed' and 'poultry feed' cannot any longer be considered as meaning only that conventional food which is necessary for the bare maintenance of cattle or birds, as the case may be Such feed must consist of both the elements, namely, ration for maintenance and ration for production purpose. ", "As to what a wheat bran is has been explained in a letter dated 17th February, 1986 (annexure 9 of the supplementary affidavit filed by the petitioners) from the Director, , representing at New Delhi, which may be referred to in paragraph 17 of the judgment. ", "21. Again in the case of reported in 42 STC 470, a Bench of (even though it was a case of rice bran) held that as rice bran is used primarily for feeding cattle and, as in common parlance, it would be classified as a cattle fodder, it would not go outside the purview of \"cattle fodder\" in Notification No. ST-3471/X dated 16th July, 1956, issued under the U.P. Sales Tax Act, 1948, only on account of the special use of extracting oil to which it is put by some consumers. It further held that commodities had to be classified in accordance with their normal use and the words in a notification have to be interpreted as understood in common parlance. ", "22. Learned counsel for the respondents has not cited any decision to show that bran (chokar) was not a cattle feed. In fact, at the cost of repetition, the respondents, in their counter-affidavit, have not repudiated the claim of the petitioners that wheat bran (chokar) was essentially a cattle feed and that in the common commercial parlance also the wheat bran was understood and was known as cattle feed. ", "23. Thus, in view of the fact that the claim of the petitioners that wheat bran (chokar) was essentially a cattle feed and was not used for any purpose other than feeding the cattle having not been repudiated by the respondents in their counter-affidavit-I hold that wheat bran (chokar) is a cattle feed and is as such not only in common parlance but also in technical and commercial parlance. The respondents have not placed any material in rebuttal of the materials filed by the petitioners (i.e., annexures 7 to 15 of the supplementary affidavit) in C.W.J.C. No. 2725 of 1984. These unimpeachable documents placed on the record by the petitioners are sufficient to hold that wheat bran is used primarily for feeding the cattle and, in common parlance, it would be classified as a cattle fodder and hence it is not possible to take a view that it would go outside the purview of cattle fodder only on account of some special use to which it may be put to by some consumers. ", "I further agree to the views taken in the cases of 43 STC 386 ( 42 STC 470 (All.) and for the reasons as given in those decisions also I hold that wheat bran (chokar) is a cattle feed. ", "24. Then remains the only other question to be consideredi i.e., whether the petitioners are liable to pay sales tax on the sale of wheat bran ? ", "As already stated above, in the earlier part of the judgment, the stand of the respondents was that the effect of the exemption Notification No. 14547 dated 26th December, 1977, is taken away because a retroactive notification (with effect from 26th December, 1977) was issued on 9th March, 1978 (Notification No. 3320), which made \"bran\" exigible to tax. Notification No. 3320 dated 9th March, 1978 (already quoted earlier) was issued under the Bihar Sales Tax Fifth Ordinance, 1977 and 3 per cent tax was levied on bran (along with atta, maida and sujji) and this notification was made retrospective with effect from 26th December, 1977. In that view of the matter, the submission advanced by the learned counsel for the respondents was that because of the retroactive notification dated 9th March, 1978 (No. 3320) the effect of exemption Notification No. 14547 dated 26th December, 1977, was taken away and hence the \"bran\" was exigible to tax. The learned counsel for the respondents also submitted that an evidence of intention to tax bran should be read/inferred by implication by allowing a notification of rate of tax in order to override the exemption. In my opinion, there is no force in this submission. The exemption Notification No. 14547 dated 26th December, 1977, with regard to \"cattle feed\" and \"poultry feed\" could be withdrawn but that was not done until 29th June, 1985, by Notification No. S.O. 611 (quoted in para 9 above). This Notification No. S.O.611 of 29th June; 1985, came into force with effect from 1st July, 1985 and as this was not brought on the record by either of the parties, a copy of the notification was produced in the court at the time of argument and by this notification in item No. 35 of the exemption Notification No. 14547 of 26th December, 1977, the words \"cattle feed\" and \"poultry feed\" were withdrawn and only four specific items were mentioned. In fact, earlier item No. 35 of exemption Notification No. 14547 dated 26th December, 1977, was for the first time substituted by item No. 35 of this notification (S.O. 611) dated 29th fune, 1985. Thus, in my opinion, the exemption was taken away only with effect from 1st July, 1985, by Notification No. S.O. 611 of 29th June, 1985. The position would still be clear that \"cattle feed\" and \"poultry feed\" were exempted from levy of additional tax by Notification No. S.O. 1613 dated 28th October, 1981 and by this notification items 1 to 35 were exempted from levy of additional tax and item No. 52 was \"cattle feed and poultry feed\" (reference of this notification be made at page 254 and for item No. 52 at page 257 of the Bihar Sales Tax Law by S. (1984 Edition). ", "25. It is well-settled that the taxing notification prescribing a rate of tax by itself will not have the overriding effect on the exemption notification. The pith and the substance of the submission of the learned counsel for the respondents was that as a rate of tax on bran was put by Notification No. 3320 of 9th March, 1978, it made bran exigible to tax. There is no substance in this submission of the learned counsel for the respondents. In column 3 of the exemption Notification No. 14547 of 26th December, 1977, no condition or exception was specified and cattle feed and poultry feed were exempted from payment of sales tax without any condition or exception. In the case of reported in 49 STC 295 (All.) a similar question was under consideration. The question was whether \"kulfi\" and \"lassi\" were \"milk products\" and exempted by notification under Section 4 , U.P. Act and whether subsequent fixing of rate of tax on \"kulfi\" and \"lassi\" by notification under Section 3-A of that Act had the overriding effect on the exemption notification. The learned Judge of (Lucknow Bench) in the case of 49 STC 295 held as follows : ", "The operating fields of the two Sections, namely, Sections 3-A and 4 , are distinct and separate. Section 3-A by itself cannot override the power under Section 4 . On the other hand, if certain goods have been classified for purposes of Section 3-A and the point of tax has also been declared by , if such goods had been exempted from sale, the department cannot contend that the exemption should not be construed in favour of the assessee. ", "Similarly, in the case of reported in 49 STC 297 (All.), similar question was under consideration. This was a Bench decision of and it was a case under the U. P. Sales Tax Act. Under similar situation, as in the present case, it was held that \"even though ice-cream and lassi have been made taxable under Section 3-A , on account of the notifications issued under Section 4 , the turnover of these items could not be included in the net taxable turnover. Thus, the view taken by the revising authority that the sale of ice-cream was not taxable in view of the exemption granted under the notification issued under Section 4 in respect of milk products appears to be correct\". It was further held that \"transactions or sales which enjoy exemptions have to be included in the gross turnover, but they are exempted when the net turnover is calculated. ", "Similar view, under similar situation, was taken in the case of 52 STC 110 (All.). ", "Yet a Bench decision of (at Jodhpur) in the case of reported in 61 STC 88 under similar situation, took the same view and held on the facts (similar to the present case) that \"Notification No. F. 5(24) FD/CT/72-14 dated 19th May, 1972, issued under Section 5 of the Act (Rajasthan Sales Tax Act) prescribing the rate of tax on gowar will not have overriding effect on entry 9 of the Schedule appended to the Act which deals with exemption\". It further held that \"the notification will not nullify entry 9 of the Schedule so far as the exclusion of gowar from cattle feed is concerned\". ", "Yet in the case of v. State of Bihar reported in 1981 BRLJ 156, a similar view, under similar situation, was taken. This was a Bench decision of and it dealt with a case under the Bihar Sales Tax Act itself and it held that \"where under Section 4 a particular commodity is exempted from liability of the payment of sales tax, any notification relating to the rate of tax payable on any commodity must be subjected to the governing provision of Section 4 . It further held that Section 6 postulates before the rate is made applicable, i. e., liable to sales tax\". It was further held that \"if, however, under Section 4 , there is also an exemption, the question of applying any rate of tax obviously does not arise and where in the notification issued under this section any commodity is included which runs counter to express exemption under Section 4 , Section 4 shall prevail over the incidental inclusion of such a commodity under Section 6 which must be taken to be without the necessary sanction\". ", "A similar view, in almost a similar situation was taken by in the case of reported in 46 STC 375. ", "26. In the case of reported in 8 STC 561, observed as follows at page 574 : ", "There is a broad distinction between the provisions contained in the statute in regard to the exemptions of tax or refund or rebate of tax on the one hand and in regard to the non-liability to tax or non-imposition of tax on the other. In the former case, but for the provisions as regards the exemptions or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are prima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed. In the latter case, the sales or purchases are exempted from taxation altogether. The legislature cannot enact a law imposing or authorising the imposition of a tax thereupon and they are not liable to any such imposition of tax. If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all. The very fact of their nonliability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed. ", "27. Thus, on a review of the aforesaid decisions, I hold that the taxing notification fixing a particular rale of tax on a particular item has no overriding effect on the exemption notification which expressly exempted the particular item from levy of tax. I further hold that Notification No. 3320 issued on 9th March, 1978, making bran exigible to tax retrospectively with effect from 26th December, 1977, on which much reliance has been placed on behalf of the respondents, does not nullify entry No. 35 of the exemption notification (No. 14547) dated 26th December, 1977, so far as exclusion of cattle feed and poultry feed from sales tax is concerned-for the simple reason that fields of operation of the two notifications, referred to above, under the different sections of the Act are altogether different. ", "Reference to the case of 52 STC 110 (All.) has already been referred to above and in that Bench decision of it was also held that \"if once an exemption is granted under Section 4 of the Act in respect of any class of goods or class of persons, then unless such exemption is withdrawn it shall remain in force.\" ", "I fully agree with the aforesaid view taken by and I hold that if once the exemption is granted in respect of any class of goods then unless such exemption is withdrawn, it shall remain in force. ", "Having held as such I hold that there is no force in the submission advanced by the learned counsel for the respondents that because of the retroactive notification dated 9th March, 1978 (No. 3320) the effect of exemption Notification No. 14547 dated 26th December, 1977, was taken away and thus this submission of the respondents also fails. ", "For the aforesaid reasons I further hold that an evidence of intention to tax bran cannot be read in the retroactive notification (No. 3320) dated 9th March, 1978, or inferred by implication in order to override the exemption Notification No. 14547 dated 26th December, 1977. It is well-settled that there can be no tax by implication and thus the submission advanced on behalf of the respondents that the retroactive notification (No. 3320) dated 9th March, 1978, inferentially and by implication taxed bran by superseding the exemption notification also fails, I further hold that as exemption from tax on \"cattle feed and poultry feed\" (item No. 35 of the exemption Notification No. 14547 of 26th December, 1977) was withdrawn only on 29th June, 1985, by Notification No. S. O. 611 (which came into force with effect from the 1st July, 1985), the exemption notification with regard to \"cattle feed and poultry feed\" (No. 14547 dated 26th December, 1977) remained in force till 30th June, 1985. ", "28. Then remains other important limb of the submission advanced by the learned counsel for the respondents to be considered, i. e., the stand taken by the learned counsel for the respondents was that the Notification No. 3322 issued oh 9th March, 1978, restricted the meaning of cattle feed and poultry feed by adding an explanation to the effect that: ", "Spashtikaran:-Pashuchara tatha kukutchara se abhipret hai- ", "(1) ... ", "(2) ... ", "(3) ... ", "(4) ... ", "Hence it was exhaustive and therefore it excluded any other item except the four mentioned in the explanation. It will be pertinent to mention here that this notification (No. 3322) dated 9th March, 1978, was also published in English language which was to be taken as one under Clause (3) of Article 348 of the Constitution of India and in the notification in English language the aforesaid words, i. e., Pashuchara tatha kukutchara se abhipret hai, were omitted to be translated. ", "29. Thus, though it would bear repetition, on 9th March, 1978, simultaneously two notifications were published and both were made retrospective from 26th December, 1977-one was No. 3320 by which rate of tax on bran was fixed (reference of which has already been made in earlier paragraph) and the other being No. 3322 published in both languages, i. e., Hindi and English. ", "The learned counsel for the respondents submitted that the explanation to Notification No. 3322 dated 9th March, 1978, published in Hindi, was exhaustive and it explains as to what cattle feed and poultry feed were and hence it excluded bran, as bran was not included in the four items of the explanation ; in short, the submission was that the explanation limited the categories enumerated therein and as bran was not mentioned therein, it cannot be taken to be still under exemption. On the other hand, Notification No. 3320 (already referred to above) made bran exigible to tax. ", "30. On the other hand, the submission advanced by the learned counsel for the petitioners was that the explanation does not restrict the meaning of the expression sought to be explained. The exemption notification of 26th December, 1977, used the expression \"cattle feed\" and \"poultry feed\" and the explanation inserted by Notification No. 3322 dated 9th March, 1978 (published both in English and Hindi languages) very much retained the expression \"cattle feed\" and \"poultry feed\". ", "Thus the submission was that; firstly, the explanation, in law, does not restrict the meaning of the expression sought to be explained nor could it restrict the expression while explaining nor did it even purport to do so. The learned counsel for the petitioners further submitted that there may be some cases in which an explanation can widen the meaning of the expression but, in no case, it can restrict in the eye of law. ", "31. In order to appreciate the aforesaid submissions advanced on behalf of the parties, it would be most pertinent to mention just here that the Notification No. S. O. 611 published on 29th June, 1985, the expressions \"cattle feed\" and \"poultry feed\" (of item No. 35 in the exemption Notification No. 14547 dated 26th December, 1977) were dropped and only those four items, as mentioned in the explanation to the expression \"pashuchara tatha kukutchara\" in the Notification No. 3322 dated ,9th March, 1978, were retained. Even the word \"explanation\" and the words thereafter, i.e., \"pashuchara tatha kukutchara se abhipret hai\" were dropped. ", "Can it then be said, as submitted by the learned counsel for the respondents ? At the outset the answer to the submission advanced on behalf of the respondents is in the negative. ", "32. It is well-settled that the proper function of an explanation is to make plain or elucidate what is enacted and not to add to or substract from it. An explanation does not either restrict or extend the enacting part; it does not enlarge or narrow down the scope of the provision that it is supposed to explain. (Reference be made to the Full Bench case of in the case of In re H.V. reported in AIR 1966 AP 35.) It is true that in some cases an explanation can widen the scope of the expression sought to be explained but in such cases effect must be given to the legislative intent and the courts have to find out the true intention of the legislature. It is also well-settled that even if the explanation is not very happily worded but if the intention of the legislature is clear and unambiguous, in that case effect must be given to the legislative intent. (Reference be made to the case of v. Sales Tax Officer, Section III, Kanpur, reported in AIR 1973 SC 1034.) In view of the aforesaid well-settled principles in interpreting an explanation-as the generic words \"cattle feed and poultry feed\" (used in the exemption Notification No. 14547 of 26th December, 1977) were factually retained till before the Notification No. S.O. 611 dated 29th June, 1985, I hold that the true intention was to retain the cattle feed and poultry feed excluded from sales tax and the true intention by the Notification No. 3322 of 9th March, 1978 was not to restrict the cattle feed and poultry feed only to the four items mentioned in the explanation. As already stated above, it is well-settled that an explanation does not restrict the enacting part nor narrows down the scope of the provision that it is supposed to explain. The intention of restricting the cattle feed and poultry feed only to the four items mentioned in the explanation to Notification No. 3322 of 9th March, 1978 cannot be read by any stretch of imagination ; firstly, because the generic terms \"cattle feed\" and \"poultry feed\" were retained; and secondly, even in latter Notification of 28th October, 1981 (S.O. 1613) \"cattle feed\" and \"poultry feed\" were exempted from levy of additional tax in item No. 62 of the notification. (Reference of this notification has already been made in paragraph 24 above.) Thus, the submission advanced by the learned counsel for the respondents, in my opinion, is clearly untenable, as it proceeds on a misconception of the scope of an explanation and hence it is without any substance and fails. (Reference of the case of reported in 8 STC 561 (SC) has already been made in paragraph 26 above.) The same case is also reported in AIR 1957 SC 657 and by it has further been held in that case as follows: ", "It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to assessment as contended by the sales tax authorities. ", "It is also well-settled that if in construing taxing statutes if two interpretations are possible, effect must be given to one that favours the citizen and not to one that imposes a burden on him. (Reference be made to the case of AIR 1958 SC 341.) ", "33. Then remains the only other part of the submission advanced by the learned counsel for the respondents to be considered. ", "As already stated above, in the early part of the judgment, the learned counsel for the respondents submitted that if the notification is published in both the languages (Hindi and English) and in the English translation of the Hindi notification if an omission to translate a word has occurred resulting in inconsistency then it would be the Hindi version of the notification which will prevail. ", "On the other hand the learned counsel for the petitioners has submitted that under Article 348(1)(b)(iii) of the Constitution of India, the notification which is in English language must prevail. ", "It is pertinent to quote Article 348(1)(b)(iii) of the Constitution of India : ", "348. (1) Notwithstanding anything in the foregoing provisions of this Part, until by law otherwise provides- ", "(b) the authoritative texts- ", "(iii) of all orders, rules, regulations and bye-laws issued under this Constitution or under any law made by or , shall be in the English language. ", "34. It is well-settled that if the inconsistency/contradiction between the notification issued in English and the notification issued in Hindi does not affect the substance of the matter, it is the notification published in English language which must prevail in view of the provisions of the Constitution of India (just referred to above) over the notification published in Hindi. (Reference be made to a Bench decision of in the case of v. Government of Uttar Pradesh reported in AIR 1954 All. 257). ", "For the reasons already detailed in the earlier paragraphs of my judgment, I hold that, in fact, there is no contradiction/inconsistency between the notification issued in Hindi and the notification issued in English (both the notifications being of 9th March, 1978). Hence I hold that in view of the provisions of the Constitution, referred to above, the notification appearing in English must prevail over the notification appearing in Hindi. ", "Even if there was divergence between the two versions, i. e., Hindi version of the notification and the English version of the notification by virtue of Article 348 of the Constitution of India (referred to above), it is the English version that will prevail. (Reference be made to a Full Bench case of in the case of reported in AIR 1974 All. 106.) (Reference be also made to a Bench decision of , in the case of reported in AIR 1976 Pat 392.) ", "35. It is also true that a State which has prescribed Hindi as the language for the official use in the State, both the Hindi version as also the English translation of the notification (Bill, Act, etc.), published in the official Gazette are valid and authorised and both of them can be looked into and put to official use. There is no competition between the two. It is only in case of conflict or divergence between the two versions that the English version may reign supreme and supersede the Hindi one. (Reference be made to a Full Bench case of reported in AIR 1962 All. 240.) ", "36. I have already held above that in the present case there is no conflict/ inconsistency/divergence between the two notifications (one published in Hindi and the other in English) of 9th March, 1978. There being no ambiguity in the English version of the notification dated 9th March, 1978, resort cannot be had to a Hindi version of the notification and under Article 348(1)(b)(iii) of the Constitution of India the version in English language must prevail. ", "It is also pertinent to quote Clause (3) of Article 348 of the Constitution of India, which is as follows : ", "(3) Notwithstanding anything in Sub-clause (b) of Clause (1), where the Legislature of a State has prescribed any language other than the English language for use in Bills introduced in, or Acts passed by, the or in Ordinances promulgated by the Governor (***) of the State or in any order, rule, regulation or bye-law referred to in paragraph (iii) of that sub-clause, a translation of the same in the English language published under the authority of the Governor (***) of the State in the Official Gazette of that State shall be deemed to be the authoritative text thereof in the English language under this article. ", "37. On the other hand, learned counsel for the respondents, in view of the Bihar Official Language Act, 1950, read with Article 348(3) of the Constitution, submitted that the original notification being in Hindi the proper course was to look at the publication in Hindi principally for the purpose of properly interpreting the provision of the enactment and not the English version of the notification which merely gives the status of an authoritative text. ", "The learned counsel for the respondents, in support of the submission, has relied upon the case of reported in 1979 (3) SLR 369. In that case a Hindi version of the notification was published on 18th June, 1975; whereas, the English version was published on 2nd July, 1975 and by inadvertence clause regarding suspension was omitted in the English version of the notification. On the facts of that case a great conflict/inconsistency/contradiction existed between the two versions of the notification and on the facts and in the circumstances of that case it was held that \"it is just and proper that Hindi version should prevail\". ", "In the present case, I have already held above that there is no conflict/ inconsistency between the two versions of the notification of 9th March, 1978. The case of 1979 (3) SLR 369, relied upon by the learned counsel for the respondents, is quite distinguishable. ", "Learned counsel for the respondents, in support of his submission, also placed reliance upon the case of reported in AIR 1974 SC 2125. This case also is quite distinguishable. This was a case under the Maintenance of Internal Security Act (1971) and the order of detention was under challenge. The order of detention was in Hindi (the official language of the ) but there was also an English version of the order of detention. ", "At the time of arrest, the Hindi as well as English versions of the order of detention were served on detenu together with the grounds of detention which were also in Hindi and English versions. The English version of the grounds of detention recited that the District Magistrate was satisfied that if the detenu was allowed to remain at large he would indulge in activities prejudicial to the maintenance of public order or security of the . The words \"or security of the \" were absent in the Hindi version. However, there was no material difference between Hindi and English versions of the order of detention. The satisfaction which was recited in the order of detention and on which the order of detention was manifestly and avowedly based, was that it was necessary to detain the petitioner with a view to preventing him from acting in any manner prejudicial to the maintenance of public order. There was no reference to the security of the in the recital of the satisfaction contained in the order of detention either in Hindi version or in English version. In such circumstances, it was held that the addition of the words \"security of the \" in the recital of the satisfaction of the District Magistrate in the English version was the result of inadvertence and the order of detention could not be invalidated on the basis of such an obvious error, ignoring the order of detention in both its Hindi and English versions, Hindi version of grounds of detention and the totality of the context so far as English version was concerned. On the facts of that case it was further held that Hindi being the official language of the , it was Hindi version of the grounds of detention which was to be regarded as authentic and the validity of detention, on the facts of that case, was to be judged with reference to the Hindi version of the grounds of detention. Article 348(1)(b)(iii) and Clause (3) of Article 348 of the Constitution were not under consideration in the case of AIR 1974 SC 2125 and thus reliance placed by the learned counsel for the respondents on this case, in support of his submission, was under a misconception. Secondly, on facts, too, the case is distinguishable. ", "Learned counsel for the respondents also relied upon the case of ) reported in 1984 (1) SLR 315. ", "The facts of this case also are clearly distinguishable. There was apparent inconsistency between the amending statute (admittedly in Hindi) and the English version of that amendment [i.e., Section 57A(3)(a) of the Bihar State Universities Act, 1976, as amended in 1980] and hence the ratio decided in this case was on the particular facts and circumstances of that case. This case, too, does not support the submission advanced by the learned counsel for the respondents. ", "38. Thus, in view of the weighty pronouncement as referred to above, I hold that in view of the provisions as contained in Article 348(1)(b)(iii) of the Constitution of India, the notification dated 9th March, 1978, appearing in English must prevail over the notification of the same date appearing in Hindi. ", "39. I further hold that though it is true that Hindi has been adopted as the official language of the State of Bihar under the Bihar Official Language Act, 1950, there was no conflict/inconsistency/contradiction in the Hindi and English versions of the notification dated 9th March, 1978 and hence it was the English version of the notification dated 9th March, 1978, which must prevail over the Hindi notification of the same date. I further hold that even if there was some inconsistency/conflict (which there is none), in the two notifications, they did not affect the substance of the matter in the present case and, in that view of the matter also, it was the notification in English which must prevail under Article 348(1)(b)(iii) of the Constitution of India. ", "Before concluding this point, to me it appears that it is of importance that in the matter of issuing and publishing notifications which are now issued in Hindi and it may be noted that it is only that Hindi version of the that is available to the general public, great care should be taken and the people concerned with making these notifications should have taken greater care in having them published in Hindi. ", "Thus, all the submissions advanced by the learned counsel for the respondents fail as being without any substance. ", "40. In the result, all the three writ cases are allowed and the impugned annexures-annexure 5 and 5(1) of C.W.J.C. No. 2725 of 1984, annexures 5 and 5-A of C.W.J.C. No. 5637 of 1985 and annexure 4 of C.W.J.C. No. 1918 of 1984 are quashed only in so fat as they relate to wheat bran (chokar). ", "41. However, in the facts and circumstances of the case, there will be no order as to costs. ", "S.S. Sandhawalia, C.J. ", "42. I agree."], "relevant_candidates": ["0000041217", "0000413768", "0000469863", "0000541212", "0000768963", "0000973037", "0001201809", "0001350547", "0001432129", "0001451408", "0001931233"]} {"id": "0001628260", "text": ["PETITIONER: SMT. NILABATI BEHERA ALIAS LALIT BEHERA (THROUGH THE Vs. RESPONDENT: STATE OF ORISSA AND ORS. DATE OF JUDGMENT24/03/1993 BENCH: , (J) BENCH: , (J) ANAND, VENKATACHALA N. (J) CITATION: 1993 AIR 1960 1993 SCR (2) 581 1993 SCC (2) 746 JT 1993 (2) 503 1993 SCALE (2)309 ACT: Constitution of India, 1950- Article 32- Letter of a mother informing death of her son in custody-Writ petition-Appreciation of evidence-Whether the death of petitioner's in in police custody due to police brutality. Constitution of India, 1950-Articles 32, 226-Death in police custody-Power of /High to award compensation for contravention of fundamental tight to life guaranteed under Article 21- Purpose of public law proceedings-Remedy in public law proceedings-Role of s- Payment of Compensation-Fixation-Directions of on mode of payment and appropriate actions against individuals responsible for custodial death. HEADNOTE: Petitioner's son, aged about 22 years was taken from his home In police custody at about 8 a.m. on 1.12.1987 by respondent No.6, Assistant Sub-Inspector of in connection with the investigation of an offence of theft. He was detained at the outpost On 2.12.1987, at about 2 p.m. the petitioner came to know that the dead body of her son was found on the railway track There were multiple injuries on the body and his death was unnatural, caused by those injuries. The petitioner alleged in her letter dated 14.9.1988, which was treated as a writ petition under Article 32 of the Constitution, that it was a case of custodial death since her son died as a result of the multiple injuries inflicted to him while he was in police custody and thereafter his dead body was thrown on the railway track. It was prayed in the petition that award of compensation be made to her, for contravention of the fundamental right to life guaranteed under Article 21 of the Constitution. The defence of the respondents was that petitioner's son managed to 582 escape from police custody at about 3 a.m. on 2.12.1987 from the . Outpost, where he was detained; that thereafter he could not be apprehended in spite of a search and that his dead body was found on the railway track on 2.12.1987 with multiple injuries, which indicated that he was run over by a train. The respondents denied the allegation of custodial death and their responsibility for the unnatural death of petitioner's son. On 4.3.1991, this directed the District Judge to hold an inquiry into the matter and to submit a report. After hearing the parties and appreciating the evidence the District Judge submitted the Inquiry Report dated 4.9.1991. The District Judge found that petitioner's son died on account of multiple injuries inflicted to him while he was in police custody at the Outpost. The correctness of the finding of the District Judge in his report was assailed in this . The respondents contended that petitioner's son managed to escape from police custody at about 3 a.m. on 2.12.1987; that he was run over by a passing train and sustained the fatal injuries; that the responsibility of the respondents for his safety came to an end the moment he escaped from police custody; and that the factual foundation for 's liability for payment of compensation for violation of the fundamental right to life under Article 21 was absent. Allowing the petition, this , HELD: (per LS. , J. on his behalf and on behalf of , J) 1.01. There is no cogent independent evidence of any search made by the police to apprehend petitioner's son, if the defence of his escape from police custody be true. On the contrary, after discovery of the dead body on the railway track in the morning by some railwaymen, it was much later in the day that the police reached the spot to take charge of the dead body. This conduct of the concerned police officers is also a significant circumstance to assess credibility of the defence version. [591 G-H] 1.02. The medical evidence comprising the testimony of the doctor, who conducted the postmortem, excludes the possibility of all the injuries to the deceased being caused in a train accident while indicating that all of 583 them could result from the merciless beating given to him. [594 H-595 A] 1.03. An inquiry under Section 176 . is contemplated independently by a Magistrate and not jointly with a police officer when the role of the police officers itself is a matter of inquiry. [595 F] 1.04. There was hand-cuff on the hands of the deceased when his body was found on the railway track with rope around it. It is significant that the Report dated 11.3.1988 of mentions that the two cut ends of the two pieces of rope which were sent for examination do not match with each other in respect of physical appearance. This finding about the rope negatives the respondents' suggestion that the petitioner's son managed to escape from police custody by chewing off the rope with which he was tied. 1595 G-H] 1.05. It is a case of custodial death, and the deceased died as a result of the injuries inflicted to him voluntarily while he was In police custody at the Outpost. [596 A] 2.01. Award of compensation in a proceeding under Article 32 by this or by the High under Article 226 of the Constitution is a remedy available in public law, based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as a defence in private law in an action based on tort. This is a distinction between the two remedies to be borne in mind which also indicates the basis on which compensation is awarded in such proceedings. [596 G] 2.02. Enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention. [602 A] 2.03.. A claim in public law for compensation for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection, of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is distinct from, and in addition to, the remedy in private law for damages for the tort resulting from the contravention of the fundamental right. The defence of sovereign immunity 584 being inapplicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy. It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaran- teed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution. [602 B-D] 2.04. The is not helpless and the wide powers given to this by Article 32 , which itself is a fundamental right, imposes a constitutional obligation on this to forge such new tools, which may be necessary for doing complete justice and enforcing the fundamental rights guaranteed in the Constitution, which enable the award of monetary compensation In appropriate cases, where that is the only mode of redress available. [603 D] 2.05. The power available to this under Article 142 is also an enabling provision in this behalf The contrary view would not merely render the court powerless and the constitutional guarantee a mirage, but, may, in certain situations, be an incentive to extinguish life, if for the extreme contravention the court is powerless to grant any relief against the , except by punishment of the wrongdoer for the resulting offence, and recovery of damages under private law, by the ordinary process. [603 E- F] 2.06. If the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law, is to be real, the enforcement of the right in case of every contravention must also be possible in the constitutional scheme, the mode of redress being that which is appropriate In the facts of each case. [603 F] 2.07. This remedy in public law has to be more readily available when invoked by the havenots, who are not possessed of the wherewithal for enforcement of their rights in private law, even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies, where more appropriate. [603 G] 2.08. The principle of which the 's power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for 585 contravention of a fundamental right. [604 , 3 S.C.R. 508; , 1. S.C.R. 904 and 3 S.C.R. 544; , Supp. S.C.C. 504 and 4 S.C.C. 677; , A Women's , 1 S.C.C. 422; , 2 S.C.C. 373; v. Attomey-General of Trinidad and Tobago, (No.2), (1978) 3 All.E.R. 670;, Khatri and Others (IV) v. of Bihar and Others, 2 S.C.C. 493 and , 4 S.C.C. 584, referred to. 1 S.C.R. 375, distinguished. Ratanlal & Dhirajlal's Law of Torts, 22nd Edition, 1992, by Justice , at pages 44 to 48, referred to. 2.09. In the present case, on the finding reached, It Is a clear case for award of compensation to the petitioner for the custodial death of her son. [604 D] 2.10. The deceased was aged about 22 years and had a monthly income between Rs.1200 to Rs.1500. A total amount of Rs.1,50,000 would be appropriate as compensation, to be awarded to the petitioner in the present case. [604 E] 2.11. The respondent- of Orissa is directed to pay the sum of Rs.1,50,000 lo the petitioner as compensation and a further sum of Rs.10,000 as costs to be paid to the Legal Aid Committee. The mode of payment of Rs.1,50,000 to the petitioner would be, by making a term deposit of that amount in a scheduled bank in the petitioner's name for a period of three years, during which she would receive only the Interest payable thereon, the principal amount being payable to her on expiry of the term. The Collector of the District will take the necessary steps in this behalf, and report compliance to the Register (judicial) of this within three months. [604 H, 605-A] 2.12.The of Orissa is expected to take the necessary further action to ascertain and fix the responsibility of the Individuals responsible 586 for the custodial death of petitioner's son and also take all available appropriate actions against each of them. [605 C] Per Dr. A.S. Anand, J. (Concurring) 1.01. Convicts, prisoners or under-trials are not denuded of their fundamental rights under Article 21 and It is only such restrictions, as are permitted by law, which can be imposed on the enjoyment of the fundamental rights by such persons. It is an obligation of the , to ensure that there is no infringement of the indefeasable rights of a citizen to life, except in accordance with law while the citizen is in its custody. [607 E] 1.02. The precious right guaranteed by Article 21 of the Constitution of India cannot be denied to convicts, under- trials or other prisoners in custody, except according to procedure established by law. [607 E] 1.03. There is a great responsibility on the police or prison authorities to ensure that the citizen in its custody is not deprived of his right to life. His liberty is in the very nature of things circumscribed by the very fact of his confinement and therefore his interest in the limited liberty left to him is rather precious. The duty of care on the part of the is strict and admits of no exceptions. [607 F] 1.04.The wrongdoer is accountable and the is responsible if the person in custody of the police is deprived of his life except according to the procedure- established by law. [607 G] 1.05.The death of petitioner's son was caused while he was in custody of the police by police torture. A custodial death is perhaps one of the worst crimes in a civilised society governed by the Rule of Law. 1.06. The defence of 'sovereign immunity\"in such cases is not available to the . [607 G] 2.01. Adverting to the grant of relief to the heirs of a victim of custodial death foe the infraction or invasion of his rights guaranteed under Article 21 of the Constitution of India, it is not always enough to relegate him to the ordinary remedy of a civil suit to claim damages for the tortious act of the as that remedy in private law indeed is available to the aggrieved party. [608 A] 587 2.02. The citizen complaining of the infringement of the indefeasable right under Article 21 of the Constitution cannot be told that for the established violation of the fundamental right to life, he cannot get any relief under the public law by the courts exercising writ jurisdiction. [608-B] 2.03. The primary source of the public law proceedings stems from the prerogative writs and the courts have, therefore, to evolve 'new tools' to give relief in public law by moulding it according to the situation with a view to preserve and protect the Rule of Law. [608 C] 2.04. The old doctrine of only relegating the aggrieved to the remedies available in civil law limits the role of the courts too much as protector and guarantor of the indefeasable rights of the citizens. The courts have the obligation to satisfy the social aspirations of the citizens because the courts and the law are for the people and expected to respond to their aspirations. [608 H, 609 A] 2.05. The public law proceedings serve a different purpose than the private law proceedings. The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by this or under Article 226 by the High s, for established infringement of the indefeasable right guaranteed under Article 21 of the Constitution is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasable rights of the citizen. [609 B] 2.06. The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights. Therefore, which the court moulds the relief by granting\" compensation in proceedings under Article 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the which has failed in its public duty to protect the fundamental rights of the citizen. 1609 C] 2.07. The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends' under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights 588 of the citizen. [609 D] 2.08.The compensation is in the nature of the exemplary damages' awarded against the wrong-doer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort, through a suit instituted in a court of competent jurisdiction or/and prosecute the offender under the penal law. [609 E] 2.09. This and the High s, being the protectors of the civil liberties of the citizen, have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the to repair the damage done by its officers to the fundamental rights of the citizen, notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings. [609 F-G] 2.10. The , of course, has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law through appropriate proceeding. Of course, relief in exercise of the power under Article 32 or 226 would be granted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case, is possible. [609 H, 610 A] 2.11. Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles. It may be necessary to identify the situations to which separate proceedings and principles 'apply and the courts have to act firmly but with certain amount of circumspection and self restraint, lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law. [610 D-E] \"Freedom under the Law. By Lord Denning First Hamlan Lecture, 1949, referred to. ., 3 S.C.R. 508, referred to. 2.12. In the facts of the present case the mode of redress which 589 commends appropriate is to make an order of monetary amend, in favour of the petitioner for the custodial death of her son by ordering payment of compensation by way of exemplary damages. [610 F] 2.13. The of Orissa should pay a sum of Rs.1,50,000 to the petitioner and a sum of Rs.10,000 by way of costs to the Legal Aid Committee. [610 G] JUDGMENT: ", "ORIGINAL JURISDICTION: Writ Petition (Crl.) No. 488 of 1988. (Under Article 32 of the Constitution of India). for the Petitioner. ", ", Addl. Solicitor General, and for the Respondents. ", "The Judgments of the Court were delivered by , J. A letter dated 14.9.1988 sent to this Court by Smt. alias , was treated as a Writ Petition under Article 32 of the Constitution for determining the claim of compensation made therein consequent upon, the death of petitioner's son , aged about 22 years, in police custody. The said was taken from his home in police custody at about 8 a.m. on 1.12.1987 by respondent No.6, , Assistant Sub-Inspector of Police of Jaraikela Police Outpost under Police Station Bisra, Distt. Sundergarh in Orissa, in connection with the investigation of an offence of theft and detained at the Police Outpost. At about 2 p.m. the next day on 2.12.1987, the petitioner came to know that the dead body of her son was found on the railway track near a bridge at some distance from the Jaraikela railway station. There were multiple injuries on the body of when it was found and obviously his death was unnatural, caused by those injuries. The allegation made is that it is a case of custodial death since died as a result of the multiple injuries inflicted to him while he was in police custody; and thereafter his dead body was thrown on the railway track. The prayer made in the petition is for award of compensation to the petitioner, the mother of , for contravention of the fundamental right to life guaranteed under Article 21 of the Constitution. ", "The State of Orissa and its police officers, including , Assistant Sub-Inspector of Police and Constable No.127, of Police Outpost Jeraikela, Police Station Bisra, are impleaded as respondents in this petition. The defence of the respondents is that managed to escape from police custody at about 3 a.m. on the night between the 1st and 2nd December, 1987 from the Police Outpost Jeraikela, where he was detained and guarded by Police Constable ; he could not be apprehended thereafter in spite of a search; and the dead body of was found on the railway track the next day with multiple injuries which indicated that he was run over by a passing train after he had escaped from police custody. In short, on this basis the allegation of custodial death was denied and consequently the respondents' responsibility for the unnatural death of . In view of the controversy relating to the cause of death of , a direction was given by this Court on 4.3.1991 to the District Judge, in Orissa, to hold an inquiry into the matter and submit a report. The parties were directed to appear before the District Judge and lead the evidence on which they rely. Accordingly, evidence was led by the parties and the District Judge has submitted the Inquiry Report dated 4.9.1991 containing his finding based on that evidence that had died on account of multiple injuries inflicted to him while he was in police custody at the Police Outpost Jeraikela. The correctness of this finding and Report of the District Judge, being disputed by the respondents, the matter was examined afresh by us in the light of the objections raised to the Inquiry Report. ", "The admitted facts are, that was taken in police custody on 1.12.1987 at 8 a.m. and he was found dead the next day on the railway track near the Police Outpost Jeraikela, without being released from custody, and his death was unnatural caused by multiple injuries sustained by him. The burden is, therefore, clearly on the respondents to explain how sustained those injuries which caused his death. Unless a plausible explanation is given by the respondents which is consistent with their innocence, the obvious inference is that the fatal injuries were inflicted to in police custody resulting in his death, for which the respondents are responsible and liable. To avoid this obvious and logical inference of custodial death, the learned Additional Solicitor General relied on the respondent's defence that had managed to escape from police custody at about 3 a.m. on the night between the 1st and 2nd December, 1987 and it was likely that he was run over by a passing train when he sustained the fatal injuries. The evidence adduced by the respondents is relied on by the learned Additional Solicitor General to support this defence and to contend that the responsibility of the respondents for the safety of came to an end the moment escaped from police custody. The learned Additional Solicitor General, however, rightly does not dispute the liability of the for payment of compensation in this proceeding for violation of the fundamental right to life under Article 21 , in case it is found to be a custodial death. The argument is that the factual foundation for such a liability of the is absent. , who appeared as amicus curiae for the petitioner, however, contended that the evidence adduced during the inquiry does not support the defence of respondents and there is no reason to reject the finding of the learned District Judge that died in police custody as a result of injuries inflicted to him. The first question is: Whether it is a case of custodial death as alleged by the petitioner? The admitted facts are: was taken in police custody at about 8 a.m. on 1.12.1987 by , Asstt. Sub-Inspector of Police, during investigation of an offence of theft in the village and was detained at Police Outpost Jeraikela; and , another accused, were handcuffed, tied together and kept in custody at the police station; 's mother, the petitioner, and grand-mother went to the Police Outpost at about 8 p.m. with food for which he ate and thereafter these women came away while continued to remain in police custody-, Police Constable and some other persons were present at the Police Outpost that night; and the dead body of with a handcuff and multiple injuries was found lying on the railway track at Kilometer No.385/29 between Jeraikela and Bhalulata railway-stations on the morning of 2.12.1987. It is significant that there is no cogent independent evidence of any search made by the police to apprehend , if the defence of his escape from police custody be true. On the contrary, after discovery of the dead body on the railway track in the morning by some railwaymen, it was much later in the day that the police reached the spot to take charge of the dead body. This conduct of the concerned police officers is also a significant circumstance to assess credibility of the defence version. ", "Before discussing the other evidence adduced by the parties during the. inquiry, reference may be made to the injuries found on the dead body of during postmortem. These injuries were the following:- ", "\"Extemal injuries (1) Laceration over with margin of damaged face. ", "(2) Laceration of size 3\" x 2\" over the left temporal region upto bone. (3) Laceration 2' above mastoid process on the right-side of size 1 1/2\" x 1/4\" bone exposed. ", "(4) Laceration on the forehead left side of size 1 1/2\" x 1/4\" upto bone in the mid-line on the forehead 1/2\" x 1/4\" bone deep on the left lateral to it 1\" x 1/4\" bone exposed. (5) Laceration 1\" x 1/2\" on the anterior aspect of middle of left arm, fractured bone protruding. ", "(6) Laceration 1\" x 1/2\" x V2\" on medial aspect of left thigh 4\" above the knee joint. (7) Laceration 1/2\" x 1/2\" x 1/2\" over left knee joint. ", "(8) Laceration 1\" x 1/2\" x 1/2\" on the medial aspect of right knee joint. (9) Laceration 1\" x 1/2\" x 1/2\" on the posterior aspect of left leg, 4\" below knee joint. ", "(10) Laceration 1\"' x 1/4\" x 1/2\" on the plantar aspect of 3rd and 4th toe of right side. ", "(11) Laceration of 1\" x 1/4\" x 1/2\" on the dorsum of left foot. ", "Injury on the neck (1) Bruises of size 3\" x 1\" obliquely alongwith sternocleidomastoid muscle 1\" above the clavical left side (2) lateral to this 2\" x 1\" bruise (3) and 1\" x 1\" above the clavial left side (4) posterial aspect of the neck 1\" x 1' obliquely placed right to mid line. Right shoulder ", "(a) Bruise 2\" x 2\", 1\" above the right scapula. ", "(b) Bruise 1\" x 1' on the tip of right shoulder. ", "(c) Bruise on the dorsum of right palm 2\" x 1\". ", "(d) Bruise extenses surface of forearm left side ", "(e) Bruise on right elbow 4\" x 1\" ", "(f) Bruise on the dorsum of left palm 2\" x 1\". ", "(g) Bruise over left patela 2\" x 1\". ", "(h) Bruise 1\" above left patel 1\" x 1\". ", "(i) Bruise on the right illiac spine 1\" x 1/2\". ", "(j) Bruise over left scapula 4\" x 1\". ", "(k) Bruise 1\" below right scapula 5\" x 1\". ", "(l) Bruise 3\" medial to inferior angle of right scapula 2\"x 1\". ", "(m) Bruise 2\" below left scapula of size 4\" x 2\". ", "(n) Bruise 2\" x 6\" below 12th rib left side. ", "(o) Bruise 4\" x 2\" on the left lumber region. ", "(p) Bruise on the buttock of left side 3\" x 2\". ", "(q) On dissection found ", "(l) Fracture of skull on right side parietal and occipital bone 6\" length. ", "594 ", "(2) Fracture of frontal bone below laceration 2\" depressed fracture. (3) Fracture of left temporal bone 2\" in length below external injury No.2 i.e. laceration 2\" above left mastoid process. (4) Membrane ruptured below depressed fracture, brain matter protruding through the membrane. ", "(5) Intracraneal haemorrhage present. (6) Brain lacerated below external injury No.3, 1\" x 1/2\" x 1/2\". ", "(7) Bone chips present on temporal surface of both sides. ", "(8) Fracture of left humerous 3' above elbow. ", "(9) Fracture of left femur 3\" above knee joint. ", "(10) Fracture of mendible at the angle mendible both sides. ", "(11) Fracture of maxillary. ", "The face was completely damaged, eye ball present, nose lips, cheeks absent. and a portion of mendible absent. ", "No injury was present on the front side of body trunk. There is rupture and laceration of brain.\" The doctor deposed that all the injuries were caused by hard and blunt object the injuries on the face and left temporal region were postmortem while the rest were ante-mortem. The doctor excluded the possibility of the injuries resulting from dragging of the body by a running train and stated that all the ante-mortem injuries could be caused by lathi blows. It was further stated by the doctor that while all the injuries could not be caused in a train accident, it was possible to cause all the injuries by lathi blows. Thus, the medical evidence comprising the testimony of the doctor, who conducted the postmortem, excludes the possibility of all the injuries to being caused in a train accident while indicating that all of them could result form the merciless beating given to him. The learned Additional Solicitor General placed strong reliance ore the written opinion of Dr. , Professor & Head of , , Cuttack, given on 15.2.1988 on a reference made to him wherein he stated on the basis of the documents that the injuries found on the dead body of could have been caused by rolling on the railway track in-between the rail and by coming into forceful contact with projecting part of the moving train/engine. While adding that it did not appear to be a case of suicide, he indicated that there was more likelihood of accidental fall on the railway track followed by the running engine/train. In our view, the opinion of Dr. , not examined as a witness, is not of much assistance and does not reduce the weight of the testimony of the doctor who conducted the postmortem and deposed as a witness during the inquiry. The opinion of Dr. is cryptic, based on conjectures for which there is no basis, and says nothing about the injuries being both anti-mortem and post- mortem. We have no hesitation in reaching this conclusion and preferring the testimony of the doctor who conducted the postmortem. ", "We may also refer to the Report dated 19.12.1988 containing the findings in a joint inquiry conducted by the Executive Magistrate and the Circle Inspector of Police. This Report is stated to have been made under Section 176 . and was strongly relied on by the learned Additional Solicitor General as a statutory report relating to the cause of death. In the first place, an inquiry under Section 176 . is contemplated independently by a Magistrate and not jointly with a police officer when the role of the police officers itself is a matter of inquiry. The joint finding recorded is that escaped from police custody at about 3 a.m. on 2.12.1987 and died in a train accident as a result of injuries sustained therein. There was hand-cuff on the hands of the deceased when his body was found on the railway track with rope around it. It is significant that the Report dated 11.3.1988 of (Annexure 'R-8', at p. 108 of the paper book) mentions that the two cut ends of the two pieces of rope which were sent for examination do not match with each other in respect of physical appearance. This finding about the rope negatives the respondents' suggestion that managed to escape from police custody by chewing off the rope with which he was tied. It is no necessary for us to refer to the other evidence including the oral evidence adduced during the inquiry, from which the learned District Judge reached the conclusion that it is a case of custodial death and died as a result of the injuries inflicted to him voluntarily while he was in police custody at the Police Outpost Jeraikela. We have reached the same conclusion on a reappraisal of the evidence adduced at the inquiry taking into account the circumstances, which also support that conclusion. This was done in view of the vehemence with which the learned Additional Solicitor General urged that it is not a case of custodial death but of death of caused by injuries sustained by him in a train accident, after he had managed to escape from police custody by chewing off the rope with which he had been tied for being detained at the Police Outpost. On this conclusion, the question now is of the liability of the respondents for compensation to 's mother, the petitioner, for 's custodial death. ", "In view of the decisions of this in , 3 S.C.R. 508, , 1 S.C.R. 904 and 3 S.C.R. 544, Supp. S.C.C. 504 and 4 S.C.C. 677, Saheli, A Women's , 1 S.C.C. 422 and , 2 S.C.C. 373, the liability of the of Orissa in the present case to pay the compensation cannot be doubted and was rightly not disputed by the learned Additional Solicitor General. It ,would, however, be appropriate to spell out clearly the principle on which the liability of the arises in such cases for payment of compensation and the distinction between this liability and the liability in private law for payment of compensation in an action on tort. It may be mentioned straightaway that award of compensation in a proceeding under Article 32 by this court or by under Article 226 of the Constitution is a remedy available in public law, based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as a defence in private law in an action based on tort. This is a distinction between the two remedies to be borne in mind which also indicates the basis on which compensation is awarded in such proceedings. We shall now refer to the earlier decisions of this as well as some other decisions before further discussion of this principle. ", "597 ", "In (supra), it was held that in a petition under Article 32 of the Constitution, this Court can grant compensation for deprivation of a fundamental right. That was a case of violation of the petitioner's right to personal liberty under Article 21 of the Constitution. , C.J., dealing with this aspect, stated as under:- ", "\"It is true that Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced effecaciously through the ordinary processes of Courts, Civil and Criminal A money claim has therefore to be agitated in and adjudicated upon in a suit instituted in a court of lowest grade competent to try it. ", "But the important question for our consideration is whether in the exercise of its jurisdiction under article 32 , this Court can pass an order for the payment of money if such an order is in the nature of compensation consequential upon the deprivation of a fundamental right. The instant case is illustrative of such cases........ ordinary remedy of a suit if his claim to compensation was factually controversial, in the sense that a civil court may or may not have upheld his claim. But we have no doubt that if the petitioner files a suit to recover damages for his illegal detention, a decree for damages would have to be passed in that suit, though it is not possible to predicate, in the absence of evidence, the precise amount which would be decreed in his favour. In- these circumstances, the refusal of this Court to pass an order of compensation in favour of the petitioner will be doing mere lip-service to his fundamental right to liberty which the State Government has so grossly violated. Article 21' which guarantees the right to life and liberty will be denuded of its significant content if the power of this Court were limited to passing orders to release from illegal detention. One of the telling ways in which the violation of that right can reasonably be prevented and due compliance with the mandate of Article 21 secured, is to mulct its violaters in the payment of monetary compensation. Administrative sclerosis lead- ", "598 ", "ing to flagrant infringements of fundamental rights cannot be corrected by any other method open to the judiciary to adopt. The right to compensation is some palliative for the unlawful acts of instrumentalities which act in the name of public interest and which present for their protection the powers of the state as shield. If Civilisation is not to perish in this country as it has perished in some others too well-known to suffer mention, it is necessary to educate ourselves into accepting that, respect for the rights of in- dividuals is the true bastion of democracy. Therefore, the State must repair the damage done by its officers to the petitioner's rights. It may have recourse against those officers\" ", "(pp.513-14) (emphasis supplied) It does appear from the above extract that even though it was held that compensation could be awarded under Article 32 for contravention of a fundamental right, yet it was also stated that 'the petitioner could have been relegated to the ordinary remedy of a suit if his claim to compensation was factually controversial' and ' Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced efficaciously through the ordinary processes'. These observation may tend to raise a doubt that the remedy under Article 32 could be denied 'if the claim to compensation was factually controversial' and, therefore, optional not being a distinct remedy available to the petitioner in addition to the ordinary processes. The later decisions of this Court proceed on the assumption that monetary compensation can be awarded for violation of constitutional rights under Article 32 or Article 226 of the Constitution, but this aspect has not been adverted to. It is, therefore, necessary to clear this doubt and to indicate the precise nature of this remedy which is distinct and in addition to the available ordinary processes, in case of violation of the fundamental rights. ", "Reference may also be made to the other decisions of this Court after . , (1), 1 S.C.R. 904, it was indicated that in a petition for writ of habeas corpus, the burden was obviously on the respondents to make good the positive stand of the respondents in response to the notice issued by the court by offering proof of the stand taken, when it is shown that the person detained was last seen alive under the surveillance, control, and command of the detaining authority. ., (11), 3 S.C.R. 544, in such a writ petition, exemplary costs were awarded on failure of the detaining authority to produce the missing persons, on the conclusion that they were not alive and had met an unnatural death. The award was made in -II apparently following , but without indicating anything more. , 4 S.C.C. 677, illegal detention in police custody of the petitioner was held to constitute violation of his rights under Articles 21 and 22(2) and this Court exercising its power to award compensation under Article 32 directed the to pay monetary compensation to the petitioner for violation of his constitutional right by way of exemplary costs or otherwise, taking this power to be settled by the decisions in and . In , 1 S.C.C. 422, the was held liable to pay compensation payable to the mother of the deceased who died as a result of beating and assault by the police. However, the principle indicated therein was that the is responsible for the tortious acts of its employees. , 2 S.C.C. 373, the award of compensation by for violation of the fundamental right under Article 21 of an undertrial prisoner, who was handcuffed and taken through the streets in a procession by the police during investigation, was upheld. However, in none of these cases, except , anything more was said. In , reference was made to the 's liability for tortious acts of its servants without any reference being made to the decision of this Court in v. The of Uttar Pradesh, 1 S.C.R. 375, wherein sovereign immunity was upheld in the case of vicarious liability of the for the tort of its employees. The decision in is, therefore, more in accord with the principle indicated in . ", "In this context, it is sufficient to say that the decision of this in upholding the State's plea of sovereign immunity for tortious acts of its servants is confined to the sphere of liability in tort, which is distinct from the State's liability for contravention of fundamental rights to which the doctrine of sovereign immunity has no application in the constitutional scheme, and is no defence to the constitutional remedy under Articles 32 and 226 of the Constitution which enables award of compensation for contravention of fundamental rights, when the only practicable mode of enforcement of the fundamental rights can be the award of compensation. The decisions of this in and others in that line relate to award of compensation for contravention of fundamental rights, in the constitutional remedy under Articles 32 and 226 of the Constitution. On the other hand, related to value of goods seized and not returned to -he owner due to the fault of Government servants, the claim being of damages for the tort of conversion under the ordinary process, and not a claim for compensation for violation of fundamental rights. is, therefore, inapplicable in this context and distinguishable The decision of in v.'Attomey-General of Trinidad and Tobago, (No.2), [1978] 3 All ER 670, is useful in this context. That case related to Section 6 of the Constitution of Trinidad and Tobago 1962, in the chapter pertaining to human rights and fundamental freedoms, wherein Section 6 provided for an application to the High for redress. The question was, whether the provision permitted an order for monetary compensation. The contention of the Attorney-General therein, that an order for payment of compensation did not amount to the enforcement of the rights that had been contravened, was expressly rejected. It was held, that an order for payment of compensation, when a right protected had been contravened, is clearly a form of 'redress' which a person is entitled to claim under Section 6 , and may well be the 'only practicable form of redress'. Lord who delivered the majority opinion, at page 679, stated.:- ", "\"It was argued on behalf of the Attorney- General that s.6(2) does not permit of an order for monetary compensation despite the fact that this kind of redress was ordered in v. Attorney-General of Guyana, [1971] SC 972. Reliance was placed on the reference in the subsection to 'enforcing, or securing the enforcement of, any of the provisions of the said foregoing sections' as the purpose for which orders etc. could be made. An order for payment of compensation, it was submitted, did not amount to the enforcement of the rights that had been contravened. In their Lordships' view an order for payment of compensation when a right protected under s.1 'has been' contravened is dearly a form of 'redress' which a person is entitled to claim under s. 6(1) and may well be the only practicable form of redress, as by now it is in the instant case. The jurisdiction to make such an order is conferred on by para (a) of s.6(2), viz. jurisdiction 'to hear and determine any application made by any person in pursuance of sub-section (1) of this section. The very wide powers to make orders, issue writs and give directions are to this.' Lord further stated at page 680, as under:- ", "\"Finally, their Lordships would say something about the measure of monetary compensation recoverable under s.6 where the contravention of the claimant's constitutional rights consists of deprivation of liberty otherwise than by due process of law. The claim is not a claim in private law for damages for the tort of false imprisonment under which the damages recoverable are at would include damages for loss of reputation. It is a claim in public law for compensation for deprivation of liberty alone . ...... . ", "(emphasis supplied) Lord while dissenting from the majority regarding the liability for compensation in that case, concurred with the majority opinion on this principle and stated at page 687, thus:- ", "expression 'redress' in sub-s(1) of s.6 and the expression 'enforcement' in sub-s(2), although capable of embracing damages where damages are available as part of the legal consequences of contravention, do not confer and are not in the context capable of being construed so as to confer a right of damages where they have not hitherto been available, in this case against the state for the judicial errors of a judge. ...\" ", "602 ", "Thus, on this principle, the view was unanimous, that enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention. ", "It follows that 'a claim in public law for compensation' for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is 'distinct from, and in addition to, the remedy in private law for damages for the tort' resulting from the contravention of the fundamental right. The defence of sovereign immunity being inap- plicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy. It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution. This is what was indicated in and is the basis of the subsequent decisions in which compensation was awarded under Articles 32 and 226 of the Constitution, for contravention of fundamental rights. A useful discussion on this topic which brings out the distinction between the remedy in public law based on strict liability for violation of a fundamental right enabling award of compensation, to which the defence of sovereign immunity is inapplicable, and the private law remedy, wherein vicarious liability of the in tort may arise, is to be found in & 's Law of Torts, 22nd Edition, 1992, by Justice , at pages 44 to 48. This view finds support from the, decisions of this Court in the Bhagalpur blinding cases: Kharti and Others (II) v. of Bihar and Others, [1981] 1 S.C.C. 627 and TV) v. of Bihar and Others, [1981] 2 S.C.C. 493, wherein it was said that the court is not helpless to grant relief in a case of violation of the right to life and personal liberty, and it should be prepared to forge new tools and devise new remedies' for the purpose of vindicating these precious fundamental rights. It was also indicated that the procedure suitable in the facts of the case must be adopted for conducting the inquiry, needed to ascertain-the necessary facts, for granting the relief, as the available mode of redress, for enforcement of the guaranteed fundamental rights. More recently in , 4 S.C.C. 584, Misra, C.J. stated that 'we have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future...... there is no reason why we should hesitate to evolve such principle of liability .... . To the same effect are the observations of , J. (as he then was), who rendered the leading judgment in the Bhopal gas case, with regard to the court's power to grant relief. ", "We respectfully concur with the view that. the court is not helpless and the wide powers given to this by Article 32 , which itself is a fundamental right, imposes a constitutional obligation on this to forge such new tools, which may be necessary for doing complete justice and enforcing the fundamental rights guaranteed in the Constitution, which enable the award of monetary compensation in appropriate cases, where that is the only mode of redress available. The power available to this under Article 142 is also an enabling provision in this behalf The contrary view would not merely render the court powerless and the constitutional guarantee a mirage but may, in certain situations, be an incentive to extinguish life, if for the extreme contravention the court is powerless to grant any relief against the , except by punishment of the wrongdoer for the resulting offence, and recovery of damages under private law, by the ordinary process. It the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law, is to be real, the enforcement of the right in case of every contravention must also be possible in the constitutional scheme, the mode of redress being that which is appropriate in the facts of each case. This remedy in public law has to be more readily available when invoked by the have not, who are not possessed of the wherewithal for enforcement of their rights in private law, even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies, where more appropriate. ", "We may also refer to Article 9(5) of the International Covenant on Civil and Political Rights, 1966 which indicates that an enforceable right to compensation is not alien to the concept of enforcement of a guaranteed right. Article 9(5) reads as under:- ", "\"Anyone who has been the victim of unlawful arrest or detention shall have an enforceable right to compensation.\" ", "The above discussion indicates the principles on which the 's power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for contravention of a fundamental right. This was indicated in and certain further observations therein adverted to earlier, which may tend to minimise the effect of the principle indicated therein, do not really detract from that principle. This is how the decisions of this in and others in that line have to be understood and distinguished therefrom. We have considered this question at some length in view of the doubt raised, at times, about the propriety of awarding compensation in such proceedings, instead of directing the claimant to resort to the ordinary process of recovery of damages by recourse to an action in tort. In the present case, on the finding reached, it is a clear case for award of compensation to the petitioner for the custodial death of her son. The question now, is of the quantum of compensation. The deceased was aged about 22 years and had a monthly income between Rs.1200 to Rs.1500. This is the finding based on evidence recorded by the District Judge, and there is no reason to doubt its correctness. In our opinion, a total amount of Rs.1,50,000 would be appropriate as compensation, to be awarded to the petitioner in the present case. We may, however, observe that the award of compensation in this proceeding would be taken into account for adjustment, in the event of any other proceeding taken by the petitioner for recovery of compensation on the same ground, so that the amount to this extent is not recovered by the petitioner twice over. Apart from the fact that such an order is just, it is also in consonance with the statutory recognition of this principle of adjustment provided in Section 357(5) . and Section 141(3) of the Motor Vehicles Act, 1988. ", "Accordingly, we direct the respondent-State of Orissa to pay the sum of Rs.1,50,000 to the petitioner and a further sum of Rs.10,000 as to be paid to . The mode of payment of Rs.1,50,000 to the petitioner would be, by making a term deposit of that amount in a scheduled bank in the petitioner's name for a period of three years, during which she would receive only the interest payable thereon, the principal amount being payable to her on expiry of the term. The Collector of the District will take the necessary steps in this behalf, and report compliance to. the Registrar (Judicial) of this Court within three months. We clarify that the award of this compensation, apart from the direction for adjustment of the amount as indicated, will not affect any other liability of the respondents or any other person flowing from the custodial death of petitioner's son . We also expect that the State of Orissa would take the necessary further action in this behalf, to ascertain and fix the responsibility of the individuals responsible for the custodial death of , and also take all available appropriate actions against each of them, including their prosecution for the offence committed thereby. ", "The writ petition is allowed in these terms. DR. , (CONCURRING) The lucid and elaborate judgment recorded by my learned brother Verma obviates the necessity of noticing facts or reviewing the case law referred to by him. I would, however, like to record a few observations of my own while concurring with his Lordship's judgment. This was bestirred by the unfortunate mother of deceased through a letter dated 14.9.1988, bringing to the notice of the the death of her son while in police custody. The letter was treated as a Writ- Petition under Article 32 of the Constitution. As noticed by Brother Verma , an inquiry was got conducted by this through the District Judge who, after recording the evidence, submitted his inquiry report containing the finding that the deceased had died on account of multiple injuries inflicted on him while in police custody. Considering, that it was alleged to be a case of custodial death, at the hands of those who are supposed to protect the life and liberty of the citizen, and which if established was enough to lower the flag of civilization to fly half-mast, the report of the District Judge was scrutinized and analysed by us with the assistance of Mr. , appearing amicus curiae for the Supreme Legal Aid Committee and Mr. , the learned Additional Solicitor General carefully. ", ", while dealing with the first question i.e. whether it was a case of custodial death, has referred to the evidence and the circumstances of the case as also the stand taken by the about the manner in which injuries were caused and has come to the conclusion that the case put up by the police of the alleged escape of from police custody and his sustaining the injuries in a train accident was not acceptable. I respectfully agree.A strenuous effort was made by the learned Additional Solicitor General by reference to the injuries on the head and the face of the deceased to urge that those injuries could not be possible by the alleged police torture and the finding recorded by the District Judge in his report to the contrary was erroneous. It was urged on behalf of the that the medical evidence did establish that the injuries had been caused to the deceased by lathi blows but it was asserted that the nature of injuries on the face and left temporal region could not have been caused by the lathis and, therefore, the death had occurred in the manner suggested by the police in a train accident and that it was not caused by the police while the deceased was in their custody. In this connection, it would suffice to notice that the Doctor, who conducted the postmortem examination, excluded the possibility of the injuries to being caused in a train accident. The injuries on the face and the left temporal region were found to be post-mortem injuries while the rest were ante-mortem. This aspect of the medical evidence would go to show that after inflicting other injuries, which resulted in the death of , the police with a view to cover up their crime threw the body on the rail-track and the injuries on the face and left temporal region were received by the deceased after he had died. This aspect further exposes not only the barbaric attitude of the police but also its crude attempt to fabricate false clues and create false evidence with a view to screen its offence. The falsity of the claim of escape stands also exposed by the report from dated 11.3.1988 (Annexure R-8) which mentions that the two pieces of rope sent for examination to it, did not tally in respect of physical appearance, thereby belying the police case that the deceased escaped from the police custody by chewing the rope. The theory of escape has, thus, been rightly disbelieved and I agree with the view of Brother that the death of was caused while he was in custody of the police by police torture. A custodial death is perhaps one of the worst crimes in a civilised society governed by the Rule of Law. It is not our concern at this stage, however, to determine as to which police officer or officers were responsible for the torture and ultimately the death of . That is a matter which shall have to be decided by the competent court. I respectfully agree with the directions given to the by Brother , in this behalf. On basis of the above conclusion, we have now to examine whether to seek the right of redressal under Article 32 of the Constitution, which is without prejudice to any other action with respect to the same matter which way be lawfully available, extends merely to a declaration that there has been contravention and infringement of the guaranteed fundamental rights and rest content at that by relegating the party to seek relief through civil and criminal proceedings or can it go further and grant redress also by the only practicable form of redress by awarding monetary damages for the infraction of the right to life. It is exiomatic that convicts, prisoners or under-trials are not denuded of their fundamental rights under Article 21 and it is only such restrictions, as are permitted by law, which can be imposed on the enjoyment of the fundamental right by such persons. It is an obligation of the , to ensure that there is no infringement of the indefeasible rights of a citizen to life, except in accordance with law while the citizen is in its custody. The precious right guaranteed by Article 21 of the Constitution of India cannot be denied to convicts, under trials or other prisoners in custody, except according to procedure established by law. There is a great responsibility on the police or prison authorities to ensure that the citizen in its custody is not deprived of his right to life. His liberty is in the very nature of things circumscribed by the very fact of his confinement and therefore his interest in the limited liberty left to him is rather precious. The duty of care on the part of the is strict and admits of no exceptions. The wrongdoer is accountable and the is responsible if the person in custody of the police is deprived of his life except according to the procedure established by law. I agree with Brother , that the defence of \"sovereign immunity' in such cases is not available to the and in fairness to Mr. it may be recorded that he raised no such defence either. ", "608 ", "Adverting to the grant of relief to the heirs of a victim of custodial death for-the infraction or invasion of his rights guaranteed under Article 21 of the Constitution of India, it is not always enough to relegate him to .the ordinary remedy of a civil suit to claim damages for the tortuous act of the State as that remedy in private law indeed is available to the aggrieved party. The citizen complaining of the infringement of the indefeasible right under Article 21 of the Constitution cannot be told that for the established violation of the fundamental right to fife, he cannot get any relief under the public law by the courts exercising writ jurisdiction. The primary source of the public law proceedings stems from the prerogative writs and the courts have, therefore, to evolve 'new tools' to give relief in public law by molding it according to the situation with a view to preserve and protect the Rule of Law. While concluding his first Hamlyn Lecture in 1949 under the title 'Freedom under the Law' Lord in his own style warned: ", "\"No one can suppose that the executive will never be guilty of the sins that are common to all of us. You may be sure that they will sometimes do things which they ought not to do: and will not do things that they ought to do. But if and when wrongs are thereby suffered by any of us what is the remedy? Our procedure for securing our personal freedom is efficient, our procedure for preventing the abuse of power is not. Just as the pick and shovel is no longer suitable for the winning of coal, so also the procedure of mandamus, certiorari, and actions on the case are not suitable for the winning of freedom in the new age. They must be replaced by new and up to date machinery, by declarations, injunctions and actions for negligence... This is not the task for ..... the courts must do this. Of all the great tasks that lie ahead this is the greatest. Properly exercised the new powers of the executive lead to the welfare state; but abused they lead to a totalitarian state. None such must ever be allowed in this Country.\" ", "The old doctrine of only relegating the aggrieved to the remedies available in civil law limits the role of the courts too much as protector and guarantor of the indefeasible Fights of the citizens. The courts have the obligation to satisfy the social aspirations of the citizens because the courts and the law are for the people and expected to respond to their aspirations. ", "The public law proceedings serve a different purpose than the private law proceedings. The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by this or under Article 226 by , for established infringement of the indefeasible right guaranteed under Article 21 of the Constitution is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasible rights of the citizen. The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights. Therefore, when the court molds the relief by granting \"compensation\" in proceedings under Article 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the which has failed in its public duty to protect the fundamental rights of the citizen. The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends' under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights of the citizen. The compensation is in the nature of exempellary damages' awarded against the wrong doer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort, through a suit instituted in a court of competent jurisdiction or/and persecute the offender under the penal law. This and , being the protectors of the civil liberties of the citizen, have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the to repair the damage done by its officers.to the fundamental rights of the citizen, notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings. The , of course has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law through appropriate proceedings. Of course, relief in exercise of the power under Article 32 or 226 would be granted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case, is possible. The decisions of this in the line of cases starting with ., 3 SCR 508 granted monetary relief to the victims for deprivation of their fundamental rights in proceedings through petitions filed under Article 32 or 226 of the Constitution of India, notwithstanding the rights available under the civil law to the aggrieved party where the courts found that grant of such relief was warranted. It is a sound policy to punish the wrongdoer and it is in that spirit that the s have molded the relief by granting compensation to the victims in exercise of their writ jurisdiction. In doing so the courts take into account not only the interest of the applicant and the respondent but also the interests of the public as a whole with a view to ensure that public bodies or officials do not act unlawfully and do perform their public duties properly particularly where the fundamental rights of a citizen under Article 21 is concerned. Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles. It may be necessary to identify the situations to which separate proceedings and principles apply And the courts have to act firmly but with certain amount of circumspection and self restraint, lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law. Some of those situations have been identified by this in the cases referred to by Brother , J. In the facts of the present case on the findings already recorded, the mode of redress which commends appropriate is to make an order of monetary amend in favour of the petitioner for the custodial death of her son by ordering payment of compensation by way of exemplary damages. For the reasons recorded by Brother , J., I agree that the of Orissa should pay a sum of Rs.1,50,000 to the petitioner and a sum of Rs.10,000 by way of costs to the Supreme Legal Aid Committee Board. I concur with the view expressed by Brother , J. and the directions given by him in the judgment in all respects. ", "V.P.R. ", "Petition allowed. ", "611"], "relevant_candidates": ["0000061710", "0000467223", "0000810491", "0001199558", "0001448303", "0001543073", "0185157692"]} {"id": "0001629479", "text": ["PETITIONER: Vs. RESPONDENT: THE UNIVERSITY OF KERALA & ORS. DATE OF JUDGMENT: 15/07/1968 BENCH: , K.S. BENCH: , K.S. , J.M. CITATION: 1969 AIR 198 1969 SCR (1) 317 CITATOR INFO : R 1970 SC 150 (20) E 1970 SC1896 (22) R 1973 SC1124 (11,12) RF 1975 SC2045 (6,7) R 1976 SC2002 (3) F 1977 SC1627 (2) R 1978 SC 597 (61) E&R 1978 SC 851 (45) R 1985 SC1416 (96,98) RF 1986 SC 555 (6) ACT: Kerala Act, 1957,-Rules framed by delegating power to Vice-chancellor to hold inquiries on malpractices during examinations-rules not followed-if inquiry invalid. Natural Justice-principles of-if require that inquiry report must be furnished with show-cause notice. HEADNOTE: As certain preliminary reports indicated that the appellant had indulged in malpractices during an examination, the Vice-Chancellor of the respondent appointed the second respondent to conduct an enquiry. The second respondent submitted a report holding the appellant guilty of the malpractice and on the basis of this report, a show cause notice was issued to the appellant by the Vice- Chancellor. After the appellant had submitted his explanation in response to the notice, and not being satisfied with his explanation, the Vice-chancellor passed an order debarring the appellant from appearing in any examination for a year. This order was subsequently approved by the of the . The appellant challenged the Vice-Chancellor's order by a writ petition under Article 226 contending inter alia that (i) the rules framed by the delegating its powers to the Vice-Chancellor required that for conducting the inquiry should have appointed an officer designated by the principal of the college in which the appellant appeared for his examination; this was not done in the present case and hence there was no proper inquiry; and (ii) the impugned order was invalid inasmuch as no copy of the report made by the second respondent was made available to the appellant before he was called upon to submit his explanation in response to the show cause notice. A Single Bench of the High Court allowed the petition, but his decision was reversed in appeal by ,. On appeal to this Court, HELD : Dismissing the appeal. (i) The rules made by the of the under which the inquiry was ordered were not statutory rules but merely rules framed for guidance. The rule under which the Vice-Chancellor was required to request the principal of the concerned college to appoint -an Inquiry Officer merely laid down a convenient procedure. Hence the Vice-Chancellor cannot be said to have contravened any law in appointing the Inquiry Officer not designated by the principal. Furthermore. the principal in the present case was the father of the appellant; the Vice-Chancellor was therefore right in not appointing him but an independent person as the Inquiry Officer. [321 B-C, F-H] (ii) There was no breach of the principles of natural justice in the appellant not being furnished with a copy of the report of the second respondent before he was called upon to give his explanation. The appellant had been duly informed of the charge against him long before the inquiry began; the inquiry was held after due notice to him and in 12 Sup C.I./68-6 318 his presence; he was allowed to cross-examimne the witnesses examined in the case and he was permitted to adduce evidence in rebuttal of the charge. No rule, either statutory or otherwise, required th Vice-Chancellor to make available to the appellant a copy of the report submitted by the Inquiry Officer. [322 B-C] Russel v. of Norfolk and others, 1 All E.R. 108 (at 118); v. , A.C. 120, ., A.C. 557; v. , All E.R. 579; . and Ors., 3 S.C.R. 767 (775), referred to. v. , A.C. 322; v. , 2 All E. Reports, 337; ., S.C.R. 98; distinguished. There is an erroneous impression evidently influenced by the provisions in Art. 311 of the Constitution particularly as they stood before the amendment of that Article that every disciplinary proceeding must consist of two inquiries, one before issuing the, show cause notice to be followed by another inquiry thereafter. Such is not the requirement of the principles of natural justice. Law may or may not prescribe such a course. Even if a show cause notice is provided by law from that it does not follow that a copy of the report on the basis of which the show cause notice is issued should be made available to the per-,on proceeded against or that another inquiry should be held thereafter. [326 G-327 A] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal No. 990 of 1968. Appeal by special leave from the judgment and order dated October 16, 1967 of in Writ Appeal No. 128 of 1967. ", ", and , for the appel- lant. ", ", for , for respondents Nos. 1 and 3. ", "The Judgment of the was delivered by This appeal by special leave from the decision of of arises from the disciplinary action taken by against the appellant. He was a student in the I st year Degree Course of the Five Year Integrated Course of Engineering, in , Trichur during the academic year 1964-1965. The Vice Chancellor of the said came to the conclusion that he was guilty of malpractice during the examination held in April 1965 and consequently debarred him from appearing in any examination till April, 1966. In the examination in question the appellant bad to appear in two papers in Mathematics. In this case we are concerned with the Mathematics I paper. The Additional Examiner who valued that paper awarded the appellant 14% marks but the Chief Examiner gave him 64% in that paper. The appellant had answered questions Nos. 1(a), 5(a), 9(a) and 4(a) in the main answer book and secured 0.2 out of 6.0 and 0 marks respectively from the Additional Examiner. Pages 611 of his main answer book were left blank. There were some additional answer books, certain pages of which were also left blank. Two of the additional answer books were also unused and left blank. In the used additional answer book questions 1(a) and 9(a) which the appellant had already answered in the main answer book and for which he had secured 0 marks from the Additional Examiner were found re- answered and for these he Secured 100% marks from the Chief Examiner. The Chairman of , notic- ing this unusual feature reported the matter to . The Board suggested that the should take up the matter. The thereafter called for the answer books of the appellant and the same was handed over to the Dean of who is the Convener of for scrutiny. That official suspected that the additional books must have been inserted after the Additional Examiner had valued the paper and therefore suggested to the that a high powered committee should be constituted to go into the matter. Accordingly a committee consisting of the Chairman of who is the Dean of , Chairman of the Mathematics Section of , the Dean of who is the Convener of , and the Registrar of the was constituted to go into the matter. That committee after inquiry in which the Additional Examiner, the Chief Examiner as well as the appellant were examined came to the conclusion that the appellant was guilty of malpractice which called for disciplinary action. Consequently the Vice Chancellor ordered a formal inquiry as required by rules. He appointed the second respondent, a retired Principal of the College, Trivandrum as Inquiry Officer for conducting the inquiry. After inquiry the second respondent submitted a report holding the appellant guilty of malpractice during the examination in question. He opined that subsequent to the valuation of the paper by the, Additional Examiner, the appellant had inserted additional answer books with the collusion of the Chief Examiner. On the basis of that report a show cause notice was issued to the appellant by the Vice Chancellor. The appellant submitted his explanation in response to that notice. Not being satisfied with that explanation the Vice Chancellor passed an order debarring the appellant from appearing for any examination till April, 1966. The same was subsequently approved by the . The Order of the Vi Chancellor was impugned before in a Petition under Art. 226 of the Constitution. A Single Judge of the who heard the matter at the first instance allowed the, petition and set aside that order but his decision was reversed in appeal by of that High . The appellant appeals to the against that decision. ", "Before as well as in this court the impugned order was assailed on two grounds viz.-(1) the formal inquiry required under the rules should have been conducted by an officer designated by the Principal of the College in which the appellant appeared for his examination i.e. and hence there was no proper inquiry and (2) the impugned order was invalid inasmuch as no copy of the report made 'by the second respondent was made available to the appellant before he was called upon to submit his explanation in response to the show ,cause notice issued to him by the Vice Chancellor. ", "Those contentions appealed to, the learned Single Judge but the Judges of found no merit in them. Those very contentions have again been repeated before us. Before examining those contentions, it is necessary to men- tion a few more facts. is governed by Kerala University Act, 1957. , Trichur is affiliated to . Under s. 19(N) of Act, the control over the discipline of the students is vested with the of the University. Cl. (V) of that section empowers the to delegate any of its powers to the Vice Chancellor. Cl. 3(xxvii) of Chapter VII of the 1st Statutes says : ", "\"The shall, in addition to the powers and duties conferred and imposed on it by the Act and subject to the provisions thereof, have and exercise the following powers and functions :- ", "......... ", "(xxvii) subject to the provisions in the laws, to take cognizance of any misconduct by any student in a college or institution or in a hostel or approved lodging, or by any student who seeks admission to a U niversity course of study, or by any candidate for any University Examination, brought to the notice of the by the head of the institution or by a member of any Authority of the University or by the Registrar of the University or by a Chairman of a Board of Examiners or by a Chief Superintendent at any centre of examination and to punish such misconduct by exclusion from any University examination or from any University course in a college or in the University or from any Convocation for the purpose of conferring degrees, either permanently or for a specified period, or by the cancellation of the Uni- versity examination for which he appeared or by the deprivation of any University scholarship held by him or by cancellation of any University prize or medal awarded to him or by such other penalty as it deems fit.\" Admittedly the delegated the above power to the Vice Chancellor under Exh. R. 5, a set of rules framed by the . These rules are not statutory rules. They are merely rules for guidance. They could not have been framed under s. 28 of the Kerala University Act. No other provision in that Act empowers the to frame rules. But the delegation of powers made under those rules is valid as no fixed procedure is prescribed in that regard. Those rules provide that on the receipt of a complaint against a student the Vice Chancellor should get an inquiry made in respect of that complaint by an officer designated by the Principal of the College in which the concerned student appeared for his examination. They further provide that on receipt of the report of the Inquiry Officer the Vice Chancellor after consultation with the sub-committee on discipline should take a provisional decision, that decision should be communicated to the student who should be called upon to show cause against the provisional decision and after receiving his representation, if any, the Vice Chancellor should pass appropriate final orders. In this case the Principal of the College in which the appellant appeared for his examination was not requested to appoint an Inquiry Officer. The Inquiry Officer was directly appointed by the Vice Chancellor himself. The reason for this course is obvious. The Principal in question was the father of the appellants The Vice Chancellor, therefore, thought it proper that be himself should appoint some independent person as the Inquiry Officer. We have earlier seen that the rule under which the Vice Chancellor was required to request the Principal of the concerned college to appoint an Inquiry Officer is not a statutory rule. That rule merely laid down a convenient procedure. Hence the Vice Chancellor cannot be said to have; contravened any law in appointing the Inquiry Officer. It cannot be said and it was not said that the steps taken by the Vice Chancellor were in contravention of the principles of natural justice. The second respondent as mentioned earlier is a retired Principal of , a responsible person and highly qualified for the task entrusted to him. His disinterestedness was never challenged at any stage of the inquiry. In our opinion, of rightly negatived the contention that by appointing the second respondent as the Inquiry Officer, the Vice Chancellor had either breached any statutory rule or contravened any principle of natural justice. ", "322 ", "The only other contention that was taken before and repeated in this Court was that inasmuch as the Vice Chancellor did not make available to the appellant a copy of the report submitted by the second respondent before he was called upon to make his representations against the provisional decision taken by him, there was breach of the principles of natural justice. The appellant had been duly informed of the charge against him long before the inquiry began; the inquiry was held after due notice to him and in his presence; he was allowed to cross-examine the witnesses examined in the case and he was permitted to adduce evidence in rebuttal of the charge. No rule either statutory or otherwise was brought to our notice which required the Vice Chancellor to make available to the appellant a copy of the report submitted by the Inquiry Officer. It is not the case of the appellant that he asked for a copy of that report and that was denied to him. 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 and the rules under which it functions. ", "In v. Duke of and others(1), , observed : ", "\"There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the c ase, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth. ", "Accordingly, I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his- case.\" ", "In v. Alridge(2) Viscount observed \"My Lords, when the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially. They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made. The decision must become to in the spirit and with the sense of responsibility of a tribunal whose duty (1) [1949](1) All E.R. p. 108 (at 118). ", "(2) [1915] A.C. p. 120. ", "323 ", "it is to mete, out justice. But it does not follow that the procedure of every such tribunal must be the same. In the case of a of law tradition in this country has prescribed certain principles to which in the main the procedure must conform. But what that procedure is to be in detail must depend on the nature of the tribunal. In modem times it has become increasingly common for to give an appeal in matters which really pertain to administration rather than to the exercise of the judicial functions of an ordinary , to authorities whose functions are administrative and not in the ordinary sense judicial. Such a body as has the duty of enforcing obligations on the individual which are imposed in the interests of the community. Its character is that of an organization with executive functions. In this it resembles other great departments of the . When, therefore, entrusts it with judicial duties, must be taken, in the absence, of any declaration to the contrary, to have intended it to follow the procedure which is its own and is necessary if it is to be, capable of doing its work efficiently. I agree with the view expressed in an analogous case by my noble and learned friend . In v. Rice(1) he laid down that, in disposing of a question which was the subject of an appeal to it, the was under a duty to act in good faith, and to listen fairly to both sides, inasmuch as that was a duty which lay on everyone who decided anything. But he went on to say that he did not think it was bound to treat such a question as though it were a trial. The had no power to administer an oath, and need not examine witnesses. It could. he thought, obtain information in any way it thought best, always giving a fair opportunity to those who were, parties in the controversy to correct or contradict any relevant statement prejudicial to their view. If the failed in this duty, its order might be the subject of certiorari and it must itself be the subject of mandamus.\" ", "In the above case acted solely on the basis of a report submitted by one of the Housing Inspectors of the Board after a public inquiry. held that the procedure adopted did not contravene the principles of natural justice. .(2) observed while considering the scope of the powers of the Governor under s. 2 of the Immigration Ordinance of Trinidad (1) A. C. 179. (2) A.C. 557. ", "324 ", "\"Their Lordships are of opinion that in making such an inquiry there is, apart from special circumstances, a duty of giving to any person against whom the complaint is made a fair opportunity to make any relevant statement which he may desire to bring forward and a fair opportunity to correct or controvert any relevant statement brought forward to his prejudice.\" ", "In and anr. v. ) Lord observed: ", "\"What, then, are the requirements of natural justice in a case of this kind ? First, I think that the person accused should know the nature of the accusation made; secondly that he should be given an opportunity to state his case; and thirdly, of course, that the tribunal should act in good faith. I do not think that there really is anything more.\" The decision of in (2 ) appears to go much further than what was laid down in the aforementioned cases. For the purpose of this case it is not necessary to take assistance from the ratio of that derision. Suffice it to say that in the case before us there was a fair inquiry against the appellant; the officer appointed to inquire was an impartial person- he cannot be said to have been biassed against the appellant; the charge against the appellant was made known to him before the commencement of the inquiry; the witnesses who gave evidence against him were examined in his presence and he was allowed to cross-examine them and lastly he was given every opportunity to present his case before the Inquiry Officer. Hence we see no merit in the contention that there was any breach of the principles of natural justice. It is true that the Vice Chancelor did not make available to the appellant a copy of the report submitted by the Inquiry Officer. Admittedly the appellant did not ask for a copy of the report. There is no rule requiring the Vice Chancellor to provide the appellant with a copy of the report of the Inquiry Officer before he was called upon to make his re- presentation against the provisional decision taken by him. If the appellant felt any difficulty in making his representation without looking into the report of the Inquiry Officer, he could have very well asked for a copy of that report., His present grievance appears to be an after thought and we see no substance in it. ", "Mr. , the learned counsel for the appellant, in support of his contention that the failure of the Vice Chancellor to make available to the appellant a copy of the report submitted by the Inquiry Officer is an infringement of the principles of natural justice, placed strong reliance on the decision of the Judicial (1) [1958] All E.R. 579. (2) [1960] (1) All E.R. 631. ", "325. Committee in v. Government of the Federation of Malaya(1). Therein, at the instance of the Commissioner of Police, a preliminary inquiry was held against . Thereafter a formal inquiry was ordered On the basis of the conclusions reached at the formal inquiry was dismissed. challenged his dismissal in an action brought in . During the pendency of that proceeding, it came to light that the report made by the Board which held the preliminary inquiry, a report which was highly pre- judicial to had been placed in the hands of the officer who held the formal inquiry but neither the copy of that report nor its substance had been made available to . That report was likely to have prejudiced the Inquiry Officer against . Under those circumstances came to the conclusion that the inquiry held was not fair and consequently quashed the order dismissing . The ratio of that decision has no application to the present case. The decision of in v. ( 2 ) does not bear on the question under consideration. Therein held that was not right in declining an opportunity being given to Dr. to show that the conclusion of that he was guilty of infamous conduct was not correct. In that case took action against Dr. solely on the basis of the conclusions reached by in v. . Dr. wanted to negative the court's finding of adultery by tendering evidence which though available was not called in the divorce proceedings. held that the 's refusal to take fresh evidence prevented their being the due inquiry required by s. 29 of the Medical Act, 1858 and therefore an order of certiorari was granted. The scope of the principles of natural justice as explained by was adopted by this Court in a large number of cases. .(3) and (4 ). ", "Before closing this case we would like to recall the observations made by (as he then was) speaking for the in .(5). His Lordship observed : ", "\"In dealing with petitions of this type, it is necessary to bear in mind that educational institutions like the (1) [1962] A.C. 322. (2) [1943] (2) All E. R. 337. ", "(3) [1957] S.C.R. 98. (4) [1958] S.C.R. 1240 (1261). ", "(5) [1963] (3) S.C.R. 767 (775). ", "326 ", " or appellant No. 1 set up Enquiry Committees to deal with the problem posed by the adoption of unfair means by candidates, and normally it is within the jurisdiction of such domestic tribunals to decide all relevant questions in the light of the evidence, adduced before them. In the matter of the adoption of unfair means, direct evidence may sometimes be available, but cases may arise where direct evidence is not available and the question will have to be considered in the light of probabilities and circumstantial evidence. This problem which educational institutions have to face from time to time is a serious problem and unless there is justi- fication 'Lo do so, courts should be slow to interfere with the decisions of domestic appointed by educational bodies like the . In dealing with the validity of the impugned orders passed by under Art. 226 , is not sitting in a appeal over the decision in question; its jurisdiction is limited and though it is true that if the impugned order is not supported by any evidence at all, would be justified to quash that order. But the conclusion that the impugned order is not supported by any evidence must be reached after considering the question as to whether probabilities and circumstantial evidence do not justify the said conclusion. Enquiries held by domestic in such cases must, no doubt, be fair and students against whom charges are framed must be given adequate opportunities to defend themselves, and in holding such enquiries, the , must scrupulously follow rules of natural justice; but it would, we think, not be reasonable to import into these enquiries all considerations which govern criminal trials in ordinary courts of law. In the present case, no animal is suggested and no mala fides have been pleaded. The enquiry has been fair and the respondent has bad an opportunity of making his defence. That being so, we think was not justified in interfering with the order passed against the respondent.\" ", "There seems to be an erroneous impression in certain quar- ters evidently influenced by the provisions in Art. 31 1 of the Constitution particularly as they stood before the amendment of that article that every disciplinary proceeding must consist of two inquiries, one before issuing the show cause notice to be followed by another inquiry thereafter. Such is not the requirement of the principles of natural justice. Law may or may not prescribe such a course. Even if a show cause notice is provided by law from that it does not follow that a copy of the report on the basis of which the show cause notice is issued should be made available to the person proceeded against or that another inquiry should be held thereafter. ", "For the reasons mentioned above the appeal fails and is dismissed with costs. ", "R.K.P.S. ", "Appeal dismissed. ", "328"], "relevant_candidates": ["0000185233", "0000568069", "0001471864", "0001514049"]} {"id": "0001633933", "text": ["JUDGMENT ", "1. The plaintiff had preferred a claim under Section 278 of the Civil Procedure Code and his claim was disallowed under Section 281 of the Civil Procedure Code. Within a year of the order disallowing the present plaintiff's claim, the judgment-debt was satisfied otherwise than by the sale of the attached property. The present suit is now brought to establish the plaintiff's right to the properties as usufructuary mortgagee and for recovery of possession from the defendants. It has been held that the suit is barred under Article 11 of schedule II of the Limitation Act. ", "2. Mr. , appearing for the plaintiff who is the appellant before us, contends that the order under Section 283 enures in favour of or against the decree-holder or the claimant and not the judgment-debtor, The judgment-debtor, according to this contention, is not a party within the meaning of Section 283 and this contention would seem to be supported by the decisions in v. (1888) I.L.R. 15 Calc. 574 and v. (1905) 3 C.L.J. 381 where the proposition is laid down that, in proceedings under Section 278, the real question for decision is not whether the title to the property belongs to the judgment-debtor or the claimant but whether the property should be released from attachment or not. We may also point out that the observations of their Lordships of in v. (1888) I.L.R. 15 Calc. 521 at p. 525 would indicate that, besides the claimant, the only other party within the meaning of Section 280 is the judgment-creditor. (1906) I.L.R. 29 Mad. 225 and (1902) I.L.R. 25 Mad. 721 proceed upon the view that if the judgment-debtor be made a party to the proceedings and there has been an adjudication between him and the claimant, the suit of the claimant would be barred as against him if not brought within a year. Even supposing that to be the correct interpretation of the section of the Code in question--and we do not think that the respondent can properly put her case any higher--we find that in the present case the respondent, who was judgment-debtor in the claim proceedings, neither appeared nor was there adjudication of the claim as between her and the present plaintiff. We may point out that the decision in (1869) M.H.C.R. 472 proceeds upon the Code of 1857 where the language employed is different from that of the code of 1882. ", "3. We therefore hold that the view taken by the lower on the question of application of Article 11 of the ' Limitation Act is wrong. The decree of lower will be set aside and the case will be remanded to it for disposal on the other issues. Costs will abide the result."], "relevant_candidates": ["0000026873", "0001074949", "0001227114"]} {"id": "0001639888", "text": [", J. ", "1. This order shall govern the disposal of M.P. No. 1297 of 89 ( and ) and M.P. No. 682 of 1991 ( and 3 Ors.). ", "2. M.P. No. 1297 of 1989 has been filed by the petitioners against the respondents under Articles 226 and 227 of the Constitution of India seeking the relief of quashing the show cause notice Annexure-P19 being without jurisdiction and barred by limitation hence being illegal and biased. During the pendency of this petition the petitioners in M.P. No. 682 of 1991 started the manufacture of the same product which was the subject matter of the earlier petition. They, therefore, submitted a classification list for suitable classification of the Ayurvedic product 'SWAD' for treating it as an Ayurvedic preparation, whereupon the respondent No. 4, Superintendent, , issued a show cause notice dated 8-1-1991 to the petitioner Company that why the product SWAD be not classified as confectionery instead of Ayurvedic medicine. Thereafter a corrigendum was also issued by the Superintendent, . Then the Assistant Collector, , Indore issued a notice of show cause to the petitioner Company as to why the product be not classified as a confectionery. The petitioner Company requested the Authorities to extend the time for submission of reply in view of the pendency of a similar petition on similar grounds before this Court. But the Assistant Collector refused to stay the proceedings. Hence a writ petition was filed by the petitioner seeking the issuance of a writ restraining the Assistant Collector, and the Superintendent, , Indore from taking any further action on the show cause notices Annexures P-6, P-7 and P-8 being illegal and without jurisdiction. ", "3. As the main petition which was pending before this Court is M.P. No. 1287 of 1989, the facts leading to this petition may be briefly stated. The petitioner manufactures an Ayurvedic product at their factory at Niran-janpur. As a part of their preparation they manufacture a product called SWAD tablets. According to the petitioners the SWAD tablet is used as therapeutic prophylactic purposes and is an Ayurvedic product and as such the product falls under Chapter 30 of pharmaceutical products, Heading 30.03, sub-heading 3003.30. SWAD tablets are medicaments as defined in note 2(i) to Chapter 30. These tablets have been prepared in accordance with the ingredients mentioned in the authoritative text book of Ayurved called Bhavprakash. There are two commentaries on this book by well-known Ayurvedic experts, which have also been stated in the petition. The petitioner Company after taking the ingredients from the book, evolved its own formula and got it patented in the name of SWAD tablets from the Drug Controller of M.P. under the Drugs and Cosmetics Act . The formula of the tablet was filed before Bhopal on 6-6-1986 and it was approved on 18-7-1986. The approval letter is Ex. P-2. A classification list was filed by the petitioner firm before the Superintendent, on 25-8-1986 (Annexure-P3). On demand by the Authorities the necessary papers of purchase etc. were submitted by the petitioners, vide Annexure-P4. The licence issued by the Controller, was also submitted on 26-9-1986 by Annexure-P5. Thereafter the Assistant Collector, provisionally approved the classification list on 15-10-1986 under Rule 9B of the Rules, 1944. Thereafter enquiries were made by respondents Nos. 3 and 4 under Rule 173B of the Rules regarding the final approval of the classification list, wherein the formula of the tablet was also sought. The petitioner firm sent all the necessary details, vide Annexure P-8. As such, after making due enquiry the classification was approved by the letter dated 9-1-1988, vide Annexure P-9. ", "4. However, the enquiries continued and a query about the glucose sugar was made by Annexure P-10 which was replied by Annexure P-11. Again, vide Annexure P-12 the quantity of sugar was asked to which letter Annexure P-13 was sent by the petitioners. Thereafter the production of sugar syrup and its value was asked for by letter Annexure P-14. The petitioner filed reply to the said letter, vide Annexure P-15. Thereafter the Inspector of , Range 5, took the sugar syrup and the SWAD tablet for test on 26-12-1988 and 6-2-1989, respectively vide Annexures P-16 and P-17. Other documents were also sought by the Inspector, whereupon all the necessary documents sought were supplied. As such, all through there has been no mis-statement or suppression of any material facts in relation to the process and manufacture of SWAD by the petitioner. ", "5. The Collector, , respondent No. 2, issued a show cause notice under Section 11A of the Act to the petitioner firm to show cause why the SWAD tablet be not classified under sub-heading 1704.90 relating to sugar confectionery instead of sub-heading 3003.30 relating to pharmaceutical products and why an amount of over one crore be not recovered under Rule 9(2) of the Rules, 1944 read with Section 11A of the s and Salt Act , 1944 and why penalty under Rules 9(2), 52A(5) and 173B(2) of Rules be not imposed for contravention of the said Rules. The notice is Annexure P-19, which is challenged in this petition on various grounds. ", "6. Firstly it has been contended by the petitioners that the classification list was finally approved on 9-1-1988 after due enquiry under sub-rule (2) of Rule 173-B. The Assistant Collector acts as a quasi judicial authority. The power to modify classification list is provided in sub-rule (5) of Rule 173B. As such without modification of the classification list show cause notice for recovery under Sections 11A and 173B of the Central Excise Act and Rules, is illegal. ", "7. Secondly it has been stated that the classification list once approved finally cannot be received because the approval of the classification is a quasi judicial function and there is no power of review under the Act. Thirdly it has been stated that Section 11A applies to recovery of duty not paid/not levied or short paid/short levied and not to change a classification list. The- classification list can be changed only under sub-rule (5) of Rule 173B after affording an opportunity of hearing to the other party. It is only after the change of the classification list that a notice for recovery can be made. ", "8. Fourthly it has been contended that the duty can be recovered only prospectively after the order modifying classification list and not retrospectively. ", "9. On merits it has been submitted that the product is an Ayurvedic preparation and the greater proportion of glucose is no ground to hold that it is a confectionery. It has also been stated that in many medical syrups, which are known and treated as medicines, the glucose base is over 90 per cent and still they are treated as medicines. The license was obtained by the petitioners from the Drug Controller, M.P. and the license has been issued after ascertaining that the product is an Ayurvedic product. It has also been stated that as the Assistant Collector approved the classification list, the review can be made only by him and not the Collector. It has also been stated that the show cause notice is barred by limitation as Annexure P-l to Annexure P-18 clearly show that there was full disclosure of all the facts by the petitioners. It has also been submitted that the Collector has already made up his mind in respect of changing the classification of the product and, therefore, the notice, is biased. ", "10. The petition was resisted on the ground that the petitioners have used liquid glucose in the manufacture of their product SWAD from the very beginning but there is no mention of this in the ingredients either in their said drug licence or on the wrapper of the product. The second ground is that the weight of the tablet has been declared as 250 milligrams containing total 104 mg of Kala Namak, Sendha Namak, Nimbu Ka Sar, Kali Mirch, lira, Ajwain, Sounth, Pipla Mul and Lendi Pipal, whereas in fact each tablet of SWAD weighs 3350 mg containing the same quantity i.e. 104 mg of the said 9 Ayurvedic ingredients. The Book mentioned in the Drug licence has not been followed. As such by mis-statement and suppression of fact the petitioners have managed to classify their product SWAD as an Ayurvedic Patent or Proprietary Medicine 'with intent to evade Central Excise duty, but in fact it is not an Ayurvedic product for the following reason: ", "(i) Liquid glucose is an Allopathic ingredient and it has not been mentioned as ingredient in any Ayurvedic, Sidha or Unani Tibb system of medicine specified in the first Schedule of the Drugs and Cosmetics Act , 1940. ", "(ii) The weight of each tablet is 3.35 grams instead of 250 mgs., whereas the total weight of the Ayurvedic ingredients is only 104 mg. Thus, the overall percentage of the ingredients has come down from 42 per cent to only 33 per cent, and the percentage of sugar is 97 per cent instead of 58 per cent. As such by inclusion of such higher percentage of sugar the product has lost the characteristics of Ayurvedic medicine. As such the preparation is against the very book of Ayurvedic system which was followed by the notices. As such it has got no therapeutic or prophylactic uses. Further more no specific doses have also been mentioned. ", "As such the plea of the respondents is that the product SWAD has not been recognised as Ayurvedic medicine in a standard Ayurvedic work and has not been so proved by clinical trials and also has not been recognised so by the like Director General of Health Services. It has also been stated that () in an identical case against , has held the product as a confectionery. The Deputy Chief Chemist of has also, after visiting the factory of the petitioner and examining the goods and the process of manufacture, opined that the SWAD is a sugar confectionery. In any case the classification has to be resolved by the quasi judicial authorities themselves and, therefore, a writ under Article 226 of the Constitution does not lie. As the classification has been obtained by the petitioner by mis-statement and suppressing the material facts and the petitioner has also changed the proportion of the ingredients, therefore, the notice under Section 11A and Rule 173B is a valid notice. In any case this is not the stage wherein the should adjudicate on the validity of the notice because the petitioner has a chance to show cause before the . ", "11. M.P. No. 682 of 1991 has also been opposed on the aforesaid grounds and it has been stated by the respondents in that petition that they have filed detailed replies in M.P. No. 1297 of 1989 and those facts may be treated as reply in this petition also along with the annexures. ", "12. Before considering the respective contentions of the parties it is also necessary to briefly state the various rejoinders and the documents filed in M.P. No. 1297 of 1989. In the rejoinder of the petitioner dated 25-10-1989 it is stated that on the basis of the circular of Collector, Ex. P-20, it is manifest that the respondent No. 3 is biased against the petitioner. Ex. P-20 shows that the respondent No. 3 has already made up his mind before hearing the petitioner. Therefore, the objection of the respondents about the tenability of the petition cannot be looked into for this reason also. In reply to the rejoinder the respondents submitted that the show cause notice is legal because the Collector is the proper officer to modify the classification list and it could be so modified in view of the fresh facts being brought on record. Although the modification in classification has to be prospective, the differential duty for past period arising out of the wrong classification can be demanded under Section 11A . ", "13. Thereafter the petitioners, vide rejoinder dated 13-3-1990, submitted that on complaint of Collector and , the Drug Controller had issued a show cause to the petitioner firm under Section 18(a)(1) of the Drugs and Cosmetics Act , 1940 (hereinafter called the Cosmetics Act ) read with the Rules framed thereunder asking the petitioner as to why permission to manufacture the drug be not withdrawn and why all the manufacturing licenses be not suspended or cancelled. The copy of these notices are Annexure P-20A and Annexure P-21. ", "14. The petitioner No. 1 obtained the report of two Experts appointed by under Rule 154(2) of the Cosmetics Rules, who were appointed by gazette notification dated 12-7-1985. The Experts have opined that the quantity of base material sugar and the preservative and binding agent liquid glucose does not affect the therapeutic value of the tablet SWAD. The Drug Controller and , after enquiry passed an order discharging the show cause notice and held that the Drug is an Ayurvedic drug and the quantity of the sugar as against the quantity of the active ingredients does not change the nature of the Ayurvedic medicine. Annexures P-25 and P-26 are also filed which are the supplementary show cause notices dated 1-11-1989 and 31-1-1990. ", "15. A reply to the rejoinder was filed by the respondents wherein the order of the Drug Controller dated 19-3-1990 was challenged by being faulty, erroneous, biased and void abinitio. It is also contended that because SWAD tablet is manufactured under the licence issued by the Drug Controller, does not prove that it deserves to be classified under Clause 30 of CET. Actually for the classification, Excise Tariff has to be considered and not the Cosmetics Act . In common parlance also the product is not known to have a curative power. The earlier averments were also reiterated along with a submission that since liquid glucose is an ingredient even if it is said to be preservative, SWAD cannot be treated as Ayurvedic medicine as defined in Section 3(h)(1) of the Cosmetics Act. ", "16. The petitioner gave further clarification on 9-4-1990, wherein it has been stated that Dr. is an Expert under the Rules framed under the Cosmetics Act and the respondents have no jurisdiction to criticise the order of the Drug Controller. The place of the sale of the medicine has also been clarified whereupon the respondent again stated that the Experts appointed under Rule 154(2) of the Rules framed under the Cosmetics Act and are only for the purposes of giving consultation before grant of licence and not thereafter. The opinion is in general terms and the liquid glucose is one of the ingredients. The petitioner again reiterated their earlier stand and said that an expert can give an opinion either before issue of licence or thereafter. The opinion has been given after the test analysis report has been received. According to expert opinion liquid glucose is not an active ingredient and therefore need not be mentioned in the label. Even in respect of Allopathic drugs under Rule 96 only the contents of active ingredients are to be mentioned on the label. The Director of Allopathic Services, under the Act or the Rules can not be held to be an Expert of Ayurvedic medicines. The provisions of the various authorities stated by the petitioners and the respondents were also stated in the reply. ", "17. During the course of the arguments both the learned counsel for the parties have argued in accordance with their pleadings as above, because the pleadings in view of the rejoinders and replies to the rejoinders actually had become argumentative. Therefore, nothing specific was added during the oral arguments, except the synopsis filed before us. In view of the aforesaid contention of both the parties the first and crucial point which arises for determination is whether the tablet SWAD can be classified as an Ayurvedic medicine or a confectionery. For answering this question various other aspects and the provisions of the Act and the authorities cited by the parties have to be taken into consideration. However, before considering the respective arguments of the parties on this crucial issue, on merits, let us first examine whether the petitioner could approach this Court on the show cause notice itself. ", "18. According to the learned counsel for this petition is not tenable because an alternative efficacious remedy by way of appeal is available to the present petitioners after decision on the show cause notice. In support of his argument the petitioners have cited the judgment of - AIR 1983 SC 603, wherein has held that when an efficacious alternative remedy is available the writ petition does not lie. Same is the view taken in the case of . -AIR 1985 SC 330. ", "19. On the other hand the learned counsel for the petitioners has placed reliance on number of authorities, including the judgment of - AIR 1987 SC 2186. ", "20. We may refer to the latest authority wherein it has been held that although an alternative remedy may be available for challenging the impugned order by referring the question under the statutory provision to the appropriate authority, but it is well established that an alternative remedy is not an absolute bar to the maintainability of a writ petition. When an authority has acted wholly without jurisdiction should not refuse to exercise its jurisdiction under Article 226 of the Constitution on the ground of existence of an alternative remedy. According to the petitioners the authorities cited by the 's case (supra) and case (supra) do not oust the jurisdiction of in case of availability of an alternative remedy. The first case was the case of - AIR 1958 SC, 86, wherein it has been held that it is a well established principle that if there are existence of requisite grounds certiorari will lie although a right of appeal has been conferred by the Statute. 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. In the same case it is also held that if an inferior or of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts proceedings before it in a manner contrary to rules of natural justice and accepted rules of procedure and which offends superior 's sense of fair play, the Superior may exercise its powers to issue prerogative writ of certiorari to correct the error of the or of first instance, even if an appeal to another inferior or was available. This authority was referred to in case (supra) and case has been followed In 's case (supra) and the same principle has been reiterated in Dr. 's case (supra). Now, according to the petitioners have issued the notices challenged in the two petitions without any jurisdiction and without any basis, therefore, they can approach this directly. ", "21. Another point pertaining to the limitation has also been raised and the jurisdiction of the Collector, Central Excise, under Section 11A of the Central Excise Act has been challenged on the ground that it was not a case of suppression, mis-statement of facts, fraud, collusion or contravention of the provisions of the Excise Act . As such the extended period of five years is inapplicable. For deciding both the aforesaid points pertaining to the jurisdiction of the show cause notice and availability of the limitation granted under Section 11A of the Central Excise Act, the fact of the case have to be examined and it has to be ascertained whether the petitioners by suppression of fact obtained the classification of their product and whether the product has been rightly classified by the authorities. The crucial point which falls for consideration is whether the product SWAD is an Ayurvedic preparation or a confectionery in view of the facts and circumstances of the case. ", "22. The basis of the challenge of the classification by is that the product is not in accordance with the standard Ayurvedic work nor is supported by any clinical trials. The liquid glucose, which is added in the tablet is nowhere provided as an ingredient in the preparation of the Ayurvedic medicines. By adding the liquid glucose the product falls out of the ambit of the definition of Ayurvedic medicine stipulated in Section 3(h)(i) of the Cosmetics Act, 1940. Thirdly it has been stated that it does not prescribe the specific doses. The proportion of the Ayurvedic ingredients in the medicine is only 3 per cent, wheres the contents of sugar are 97 per cent. As such the curative effect, if any, of the medicine is lost and actually branding it as an Ayurvedic medicine is for the sole purpose of evading excise duty. Strong reliance has been placed on the judgment of the Full Bench of in the case of (42) E.L.T. 33, wherein in the similar facts the Bench of has held that the Halls Icemint tablets are confectionery and not an Ayurvedic Medicine. It has also been argued that the fact that the petitioner has obtained a license to manufacture the Ayurvedic medicine and the approval of the formula by the Drug Controller is of no avail. The classification has to be done according to the Central Excise Tariff and not on the basis of the license issued by the Drug Controller. ", "23. On the other hand it has been argued by the petitioner that the product SWAD was considered an Ayurvedic medicine on the basis of the Drug License No. 25D/24/83. The formula was approved by the Drug Controller on 18-7-1986. The classification list was thereafter filed by the petitioner on 25-8-1986. It was provisionally approved on 15-10-1985 and final approval was given on 9-1-1988. As per formula a mixture of sugar is prepared in manufacturing process. Therefore, the respondent No. 4 gave a notice on 26-11 -1987 to the petitioner stating that sugar syrup prepared during the course of manufacture is classifiable under sub-heading 1702.30. A reply was given by the petitioner to this notice on 11-2-1987 that Sugar Syrup is not excisable. Thereafter the respondent, vide letter dated 11-1-1988 asked for the details of production and value of sugar Syrup, vide Annexure P-12. The petitioners, vide Annexure P-13 gave the quantity of the sugar consumed from August 1986 to November, 1987 and the Inspector Central Excise, Range 5, took samples of sugar syrup and SWAD tablet for test on 26-12-1988 and 6-2-1989. The purchase invoices of raw material was also furnished, vide Ex. P-l 8. As such the petitioners have never refused to disclose any fact from the Authorities and acting upon approved classification list did not collect additional price from the customers on account of the excise duty now demanded. ", "24. It is also the case of the petitioners that the Collector Customs & Central Excise had sent complaint to about the suppression of facts by the petitioner and obtaining the license fraudulently, whereupon had issued a show cause notice to the petitioner firm under Section 18(a)(i) of the Cosmetics Act on the ground that the drug is misbranded and show cause notice was issued under the Rules framed, why permission to manufacture the drug be not withdrawn and why the manufacturing license be not suspended or cancelled. Along with the notice, a copy of the Drug Analysts report was also enclosed. The petitioner No. 1 obtained the report of two experts appointed by under Rule 154(2) of the Cosmetics Act and they have opined that the quantity of base material sugar is the preservative and binding agent liquid glucose does not affect the therapeutic value of the tablet SWAD. A report was filed along with the opinion of the Experts Annexure P-22 before . The Drug Controller, after holding the enquiry, vide Annexure P-24 passed on order in favour of the petitioner discharging the notice wherein it held that the medicine is an Ayurvedic preparation despite the presence of liquid glucose and the variation in the weight and the ratio of the glucose and the active ingredient would not change the nature of the medicine. had no authority to challenge or criticise the order of , which is and an Expert competent to give a finding on the nature of a drug for which a license for manufacture has been issued. ", "25. In the light of the above arguments, let us first see the relevant judgments relied on the points raised before us. In the case of . (supra) , New Delhi, has held that for any formulation to be considered as Ayurvedic medicine, the same should be either recognised so in a standard Ayurvedic work or should be so proved by clinical trials or should be recognised so by an authority like . The appellant's case for considering the goods described as Halls Icemint tablets, as medicine is only based on one fact that active ingredients, namely Pudina and Eucalyptus oil are Ayurvedic in nature and these have medicinal properties. The certificate given by Dr. is not based on first hand information and besides, being a Professor of Surgery of , he cannot be considered as a specialist in the field of medicine. The certificate, which could be taken note of is the one issued by the competent authority, which, in the instant case could only be the . Therefore, the case of the appellant that the product is a medicine is not established and, therefore, the held the product as confectionery. In the aforesaid judgment the certificate of the socalled Expert Dr. was considered and it was found that the information was based on the opinion of Dr. , but it was not clear before the as to who this Dr. is and what information is supplied to Dr. . As such the certificate is not based on the first hand information. It is also not shown whether the certificate is based on the clinical trials. The manufacturer also was not in a position to give any further details. Therefore, after considering all the facts and circumstances of the case and the contents of the product the was of the view that the above said product could not be treated as an Ayurvedic medicine but can be classified as a sugar confectionery as it has a cooling and soothing effect on the throat as described in the literature. ", "26. Now, in respect of classification of goods it has been the consistent view that the general principle of interpretation of tariff entries occurring in a Taxing Statute is a commercial nomenclature and understanding between persons in the trade. But it is also a settled legal position that the said doctrine of commercial nomenclature and trade understanding should be departed from in a case where the statutory content in which the tariff entry appears, requires such a departure. As such in cases where the application of commercial meaning or trade nomenclature runs counter to the statutory context in which the said word was used then the said principle of interpretation should not be applied. Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a tariff entry and there is no conflict between the tariff entry and any other entry requiring to reconcile and harmonise that tariff entry with any other entry. has reiterated the aforesaid view in a recent case of - 1990 (47) E.L.T. 161. In the same judgment has held that although it is the settled position of law that the words used in Taxing Statute have to be understood in the common parlance or commercial parlance but such a trade understanding or commercial nomenclature can be given only in cases where the word in the Tariff Entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the Tariff Entry and any other entry in the Tariff Schedule. In the aforesaid case took into consideration the various entry items and held that the calcareous stone as mentioned in ITC Schedule has to be taken in scientific and technical sense as therein the said stone has been described as of an apparent specific gravity of 2.5 or more. Therefore, the word 'marble' has to be interpreted in the scientific or technical sense and not in the sense commercially understood or as meant in the trade parlance. ", "27. A Division Bench of the M.P. High Court in (6) E.L.T. 598 (M.P.) : 1980 M.P.L.J. 479, has sought the aid of Section 3(b) of the Drugs and Cosmetics Act to consider the classification under the Central Excise Tariff. To ascertain whether a particular product is a medical preparation or not on the basis of the definition of 'drug' in Section 3(b) of the Cosmetics Act it was held that the glucose repacked by the petitioner could not be taxed under Item No. 14E of the Tariff. ", "28. in the case of (36) E.L.T. 369A, has held that although it is well settled that generally, while interpreting the fiscal statutes, the scientific meaning of a product is not relevant but one has to consider its popular understanding or its understanding in the commerce or in the trade. But it is obvious that this trade understanding should be the understanding of those who are actually dealing with that particular product or goods. The Drugs and Cosmetics Act is a comprehensive piece of legislation which deals with drugs and provides not only for the standards of quality, misbranded and adulterated drugs but also for the safeguards for the manufacture, sale and distribution of drugs as well as cosmetics. The Act makes it abundantly clear that only those drugs which are manufactured under a valid licence issued under the Act and in compliance with its provisions can be lawfully sold, exhibited for sale or distributed. After considering the various aspects of the Act the Court was of the view that the definition of 'drug' given in the said Act is most relevant for determining its meaning in the trade. Therefore, the true and real meaning which a drug has in the trade or in commerce is the meaning given to it in the Drugs and Cosmetics Act . In this case has also taken the view that the order of the Assessment Officer has to stand or fall on its own grounds and cannot be supplemented by affidavits. ", "29. Now, in the light of the aforesaid authorities it has to be seen as to how the medicine in question i.e. SWAD is known in the common parlance or in commercial use. There is not an iota of evidence to show that this product is sold as a confectionery and is commonly used as a confectionery by the consumers. In Tariff Entry 3003.30 the medicaments including those in Ayurvedic, Unani, Sidh and Homoeopathy system have been mentioned as the goods falling within that entry. Therefore, for ascertaining whether a product is an Ayurvedic product or not the facts on the record have to be perused and in the light of the decisions of in case (supra), 's case (supra) and the case of (supra), this Court has to look to the scientific and technical aspect of the product with the aid of the Cosmetics Act , 1940. ", "30. Now it is not indispute that the petitioners in both the petitions are manufacturing SWAD tablets and the ingredients have been taken from the Ayurvedic text books with certain modifications evolving a formula of their own. The petitioners have considered the commentaries of the scholars Dr. and Dr. . The Hindi translation of the original books is and another commentary is by of , Lucknow. The formula so prepared with the aid of the aforesaid text books was patented and an application to for obtaining the license for manufacture of this drug was made, which was granted to them. The classification list was filed before which was provisionally approved and later on finally approved. Now, the objection of is that firstly the liquid glucose, which is used in the medicine, is not an Ayurvedic ingredient and nowhere mentioned in the Ayurvedic book of medicines and the contents of the so-called curative medicines is only 3 per cent whereas the percentage of glucose 97 per cent. It has further been stated that there is deviation in the weight proportion of the active ingredients of the product and the liquid glucose has taken the product out of the purview of medicine. There is absence of dosage in the wrapper. However, it is manifest that the classification submitted by the petitioner was approved by on the strength of the license issued by of M.P. who has given the license after his due satisfaction that the product is an Ayurvedic product. ", "31. In the instant case a further development has taken place wherein had made a complaint to the Drug Controller that the license has been wrongly issued on the grounds which have been enumerated in the show cause notice. Therefore, a show cause notice was issued under Section 18(a)(o) of the Cosmetics Act and the Rules by the Drug Controller to the petitioner and a copy of the test laboratory report was also sent with the show cause notice. In the reply the petitioners submitted that the product SWAD is for digestion it contains ingredients commonly used for creating appetite and help in digestion. To make it tasty and eatable like other medicine, the manufacturers used the sugar base. The liquid glucose is used as preservative and binding agent like other medicines just to preserve the properties of the drug and in general practise there is no need to mention about the preservatives and binding agents. In the labels of other products of the same brand which are treated as drugs, the binding agent and preservative is not mentioned. The opinion of two experts was obtained and was also submitted along with the reply. The first opinion is by the Divisional Officer, , who is declared as an Expert and according to him the medicine used in the product is Ayurvedic medicines. According to the opinion the addition of and proportion of sugar and liquid glucose would not change the quality of the active agents in the product. ", "32. The Divisional Director, , has been declared as an Expert by , vide Gazette Notification dated 20th April, 1985 in exercise of the powers under Rule 154(2) of the Drug and Cosmetic Rules, 1945 and the other expert Dr. has also been so declared as an Expert. According to Dr. also liquid glucose is used in Ayurvedic medicines as preservative material and binding agent and the increase or decrease in the quantity of the binding agent or preservative does not change the nature of the medicine. In both the Expert opinions it has been said that the product is a medicine containing the Ayurvedic properties. ", "33. , M.P. vide Annexure P-24 has dropped the notice and in a detailed order has considered the grievance of the Collector of , Indore whereupon a sample of the drug was drawn by the Drug Inspector, Indore and analysed by the Government Analyst . This report dated 13-6-1989 has not given any opinion that the Drug is of a standard quality or not, but the drug contains liquid glucose without label declaration. However, the Drug Controller agreed with the contention of the petitioner that the liquid glucose is a preservative in Ayurvedic as well in Allopathic drugs. A letter of the Director Indigenous System of Medicines Dr. , dated 23-12-1989 was also produced, which says that liquid glucose is commonly used as preservative and binding agent and its presence has no effect on the active ingredient and the further opinion of the Expert that despite the presence of liquid glucose the character of the drug shall remain Ayurvedic, has also been considered by the Drug Controller. Finding the aforesaid opinion and the argument sound and comparing the various ingredients in and tablets and their preparation as compared to SWAD which are licenced as Ayurvedic medicines by the State of Maharashtra and Andhra Pradesh, the Controller of , discharged the notice against the petitioner and held that the product is an Ayurvedic product. As such the fact that the Drug Controller, agreeing with the opinion of the two Experts, has reiterated its earlier finding while issuing the licence of manufacture that the product SWAD is an Ayurvedic product, supports the case of the petitioner and the aforesaid fact cannot be brushed aside simply because the assessment has to be made independently in accordance with the Central Tariff. ", "34. It is true that the classification of the goods has to be made according to Tariff. But as discussed above Tariff does not specifically define the product, but speaks of the Ayurvedic preparation. As such as held by , and in the aforementioned cases the Court has to resort to the provisions of the Cosmetics Act for ascertaining the nature of the product and when the experts in the field is available. It cannot be brushed aside lightly only because there is an averment that it is a confectionery. The deviations in the preparation as pointed out by were dealt with and considered by , Government of M.P. and there is no contrary opinion of any Ayurvedic Expert to hold that the product is simply a confectionery and not a Ayurvedic product. Even in case (supra) decided by the , on which much reliance is placed by the learned counsel for , the has considered the Expert opinion and thereafter gave a finding that the expert opinion is of no avail to the manufacture in that case because the opinion of Dr. was a second hand information and the qualifications of Dr. were also not known to ascertain whether he was an Expert or not, coupled with the fact that there was no clinical test of the product. In the instant case the clinical test was made of the aforesaid product and after considering the result of the clinical test and the opinion of the Experts the finding of the product being an Ayurvedic product has been given. It has already been held above that there is no evidence on record that in common parlance, the product is known as a confectionery. Therefore, the scientific and technical meaning of the product are most relevant for ascertaining whether a product is an Ayurvedic product or a confectionery. ", "35. , after filing of the report of the Director. Food and Drugs, in favour of the petitioner discharging the notice issued to them have filed a rejoinder wherein it has been stated that the opinion of the Director is erroneous and should not be acted upon. We fail to understand as to how the opinion of the Experts and that of the Drug Controller can be held to be erroneous in absence of any contrary opinion of Experts being on record. Much emphasis has been laid that according to the definition of Ayurvedic preparation there is a clear interdict on the use of any ingredient than the one shown in the text and that is why the word 'only' has been used in the definition. It is manifest that the word 'only' has been used in respect of the ingredients of the product and the preservative items in a particular product cannot be treated as active ingredients. Consequently we hold that the product of the petitioner is an Ayurvedic preparation and has rightly been classified by the Assistant Collector under Item 3003.30 of the Central Excise Tariff. ", "36. As regards the tenability of the petition it has been strenuously argued that the petition is premature. But as discussed above the law on the point is practically settled that the should not interfere in a matter at the stage on show cause notice as a general rule. But can always interfere when the notice is without jurisdiction, arbitrary or illegal. About invoking of the provisions of Section 11A also, it is the settled principle that the provisions of Section 11A are available to the authorities provided the assessee has been guilty of misrepresentation, fraud or suppression of fact etc. In view of the aforesaid discussion we do not find it either a case of fraud, misrepresentation or suppression of fact. The classification was done on the basis of the license issued by the Controller of Drugs, Govt. of M.P. and he has found that the product is an Ayurvedic product even after holding an enquiry on a show cause notice. have also made enquiries as discussed above before the classification. Therefore, the extended period of five years of limitation under Section 11A is not available to the Collector, and . The notice Annexure P-19 in M.P. No. 1297 of 1989, is therefore, without jurisdiction and as such this could very well entertain a petition in a case where the notice is without jurisdiction. The notice Annexure P-19 is, therefore, quashed. The notices Ex. P-6, P-7 and P-8 issued by the authorities are as a sequal of the notice issued in M.P. No. 1297 of 1989 and in view of the finding given by us that the product is an Ayurvedic medicine, these notices also cannot be allowed to stand which were issued during the pendency of the first petition. Accordingly these notices also deserve to be quashed and are accordingly quashed. ", "37. In the result both the petitions M.P. No. 1297 of 1989 and M.P. No. 682 of 1991 are allowed. The notices issued in the aforesaid petitions are quashed. There shall be no order as to costs."], "relevant_candidates": ["0000023675", "0000074936", "0000096932", "0000274194", "0000352610", "0001107029", "0001239734", "0001590667", "0001610615", "0001672252"]} {"id": "0001646640", "text": ["PETITIONER: UNION OF INDIA & . Vs. RESPONDENT: & . DATE OF JUDGMENT10/04/1987 BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) SINGH, K.N. (J) CITATION: 1987 AIR 1802 1987 SCR (2) 841 1987 SCC (2) 720 JT 1987 (2) 107 1987 SCALE (1)728 CITATOR INFO : F 1987 SC2351 (3) APL 1988 SC 686 (9) D 1988 SC1301 (8) R 1988 SC1737 (75) R 1990 SC 334 (102) E 1990 SC1277 (31,38,43) R 1990 SC1851 (30) ACT: Drugs (Prices Control) Order, 1979: Paragraphs 3, 12, 13 & 27: Bulk Drugs--Price fixation of--Whether legislative activity--Principles of natural justice whether applicable to-Cost of production-----Whether can be determined by a subordinate legislating Body--Price fixation-Review--Nature of--Formulations--Fixation of retail prices--Whether to await the result of review application. Constitution of India, Articles 32 & 226--Essential Commodities-Price fixation of---Whether matter for investi- gation and interference by . Practice and Procedure: Essential Commodities--Price fixation of--Interim order staying implementation of notifi- cation fixing prices--s not to pass orders which would be against public interest. Constitution of India, Article 39(b)-- Material resources of the community--Distribution of to sub-serve common good--Obligations of . HELD: Paragraph 3 of the Drugs (Prices Control) Order, 1979 made by the Central in exercise of powers under s. 3(2)(c) of the Essential Commodities. Act, 1955 empowers the , after making such enquiry as it deems fit, to fix the maximum price at which the indigenously manufac- tured bulk drug shall be sold. Clause (2) of Paragraph 3 provides that while so fixing the price of a bulk drug, the may take into account the average cost of produc- tion of such bulk drug manufactured by a efficient manufac- turer and allow a reasonable return on net worth. Paragraph 12 empowers the to fix leader prices of formula- tions of categories I and II, while paragraph 13 empowers the to fix retail prices of formulations of category III. Paragraph 27 enables any person aggrieved by any notification or order under the various paragraphs aforesaid to appeal to the for a review. The Central issued notifications under paragraph 3 842 of the 1979 Order fixing the maximum prices at which various indigenously manufactured bulk drugs could be sold. The manufacturers first filed review applications under para- graph 27 of the Order and thereafter writ petitions under Art. 226 of the Constitution challenging the notifications. quashed those notifications on the ground of failure to observe the principles of natural justice. Since prices of formulations are primarily dependent on prices of bulk drugs, the notifications fixing the retail prices of formulations issued during the pendency of review petitions were also quashed. In the appeal by , it was contended that the fixation of maximum price under paragraph 3 of the Order was a legislative activity and, therefore, not subject to any principle of natural justice, that paragraph 27 of the Order gave a remedy to the manufacturers to seek a review of the order fixing the maximum price under paragraph 3, that such review did not partake the character of a judicial or quasi,judicial proceedings, and that at the time of the hearing of the review application the matter under- went thorough and detailed discussion between the parties and the as well as , and that the prices had not been fixed in an arbitrary manner. For the respondents, it was contended that unlike other price control legislations, the Drugs (Prices Control) Order was designed to induce better production by providing for a fair return to the manufacturers; that the provision for an enquiry proceeding the determination of the price of a bulk drug, the prescription in paragraph 3, clause 2 that the average cast of production of the bulk drug manufactured by an efficient manufacturer should be taken into account and that a reasonable return on net worth should be allowed, and the provision for a review of the order determining the price, established that price fixation under the Order was a quasi-judicial activity obliging the observance of the rules of natural justice; that the review, for which provision is made by paragraph 27, was certainly of quasi-judicial char- acter and, therefore, it was necessary that the manufactur- ers should be informed of the basis for the fixation of the price, that the price had been fixed in an arbitrary manner and the was not willing to disclose the basis on which the prices were fixed on the pretext that it may involve disclosure of matters of confidential nature; that since the price of formulations were dependent on the prices of bulk drugs, these should not have been prescribed until the review application was disposed of, that the undertaking given by the parties before while obtaining ex-parte interim order to main- 843 tain the stanus-quo on the prices of bulk drugs and formula- tions prevailing before the issue of notifications, and in case of dismissal of their petitions to deposit the differ- ence in the prices of the formulations in the , lapsed with the disposal of the writ petition and it could no longer be enforced; and that the delay in filing special leave petitions against other manufacturers should not be condoned as the was well versed litigant as compared to private litigants. Allowing the appeal, the , HELD: 1. Price fixation is neither the function nor the forte of the . The is concerned neither with the policy nor with the rates. But it has jurisdiction to en- quire into the question, in appropriate proceedings, whether relevant considerations have gone in and irrelevant consid- erations kept out of the determination of the price. For example, if the legislature has decreed the pricing policy and prescribed the factors which should guide the determina- tion of the price, the will, if necessary, enquire into the question whether the policy and factors were present to the mind of the authorities specifying the price. Its examination would stop there. The mechanics of price fixation are not concern of the executive. The will not revaluate the considerations even if the prices were demonstrably injurious to some manufacturers or producers. It will, of course, examine if there was any hostile dis- crimination. [852E-H] Secretary of Agriculture v. , 338 604; , 3 SCC 459 and , 4 SCC 575, referred to. 2. Profiteering, by itself, is evil. Profiteering in the scarce resources of the community, much needed life-sustain- ing food stuffs and fife saving drugs is diabolic. It is a menace which has to be lettered and curbed. The Essential Commodities Act , 1955 is a legislation towards that end, in keeping with the duty of the enshrined in Art. 39(b) of the Constitution towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. [851E-F] The right of the citizen to obtain essential articles at fair prices and duty of the to provide them are thus transformed into the power of the to fix prices and obligation of the producer to charge no more than the price fixed. [854F] 844 , 1 SCC 468; Hari Shankar Bagla v. of Madhya Pradesh, 1 SCR 380; , 2 SCR 627; ), (unreported), and Mithamal, SCR 982; , 2 SCR 375, , 1 SCC 129; , 3 SCC 435 and , 2 SCR 526, referred to. 3.1 A price fixation measure does not concern itself with the interests of an individual manufacturer or produc- er. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a general character not directed against a particular situa- tion. It is intended to operate in future. It is conceived in the interest of the general consumer public. [854E-F] 3.2 Price fixation is more in the nature of a legisla- tive activity than administrative. A legislative act is the creation and promulgation of a general rule of conduct without reference to particular cases; an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in ac- cordance with the requirements of policy. Legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future; administration is the process of performing particu- lar acts, of issuing particular orders or of making deci- sions which apply general rules to particular cases. [853F- H; 854A] Secretary of Agriculture v. , 338 US 604, and , 2 SCC 630, referred to. 3.3.1 Price fixation may occasionally assume an adminis- trative or quasi-judicial character when it relates to acquisition or requisition of goods or property from indi- viduals and it becomes necessary to fix the price separately in relation to such individuals. Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the or its nominee and the price to be paid is directed by the legislature to be deter- mined according to the statutory guidelines laid down by it. In such situations the determination of price may acquire a quasi-judicial character. [854G-H; 855A] 3.3.2 of the Essential Commodities Act enables the 845 Central to make an order requiring any person engaged in the production of any essential commodity to sell the whole or a specific part of the quantity produced by him to the or its nominee. provides for the determination of the price to be paid to such a person. If the provisions of , under which the price of an essential commodity may be controlled, are contrasted with under which payment is to be made for a commodity required to be sold by an individual to the , the distinction between a legislative act and a non-legislative act will at once become clear. The order made under , which is not in respect of a single transaction, nor directed to a particular individual, is clearly a legislative act, while an order made under , which is in respect of a particular transaction of compulsory sale from a specific individual, is a nonlegisla- tive act. [860B-H; 861A-B] 3.3 The order made under controlling the price of an essential commodity may itself prescribe the manner in which price is to be fixed but that will not make the fixation of price a non-legislative activity, when the activity is not directed towards a single individual or transaction but is of a general nature, covering all indi- viduals and all transactions. The legislative character of the activity is not shed and an administrative. or quasi- judicial character acquired merely because guidelines pre- scribed by the statutory order have to be taken into ac- count. [861B-C] 3.4 Legislative action, plenary or subordinate, is not subject to rules of natural justice. In the case of Parlia- mentary legislation, the proposition is self evident. In the case of subordinate legislation, it may happen that Parlia- ment may itself provide for a notice and for a hearing, in which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. But where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity. [852H; 853A- , 2 SCC 293; , 2 SCC 600; , 2 SCC 722; Bates v. Lord , of St. Marylebone, 1 WLR 1973; v. Wauchope Per Lord Brougham, 8 CI & F 700, 720; Brit- ish Railways Board v. , 1 All ER 609, , 846 4 SCC 471 and v. , 1 SCC 102, referred to. 3.5 Nothing in the scheme of the Drugs (Prices Control) Order, 1979 leads to the inference that price fixation under that Order is not a legislative activity but a quasi-judi- cial activity which would attract the observance of the principles of natural justice. Nor is there anything in the scheme or the provisions of that Order which otherwise contemplates the observance of any principle of natural justice or kindred rule, the non-observance of which would give rise to a cause of action to a suitor. [871G-H; 872A-B] 4.1 Occasionally the legislature directs the subordinate legislating body to make 'such enquiry as it think fit' before making the subordinate legislation. In such a situa- tion, while such enquiry by the subordinate legislating body as it deems fit is a condition precedent to the subordinate legislation, the nature and the extent of the enquiry is in the discretion of the subordinate legislating body and the subordinate legislation is not open to question on the ground that the enquiry was not as fur as it might have been. The provision for such an enquiry is generally an enabling provision, intended to facilitate the subordinate legislating body to obtain relevant information' from all and whatever source considered necessary. It is the sort of enquiry which the legislature itself my cause to he made before legislating, an enquiry which will not confer any right an anyone other than the enquiring body. It is differ- ent from an enquiry in which an opportunity is required to he given to persons likely to he affected. The former is an enquiry leading to a legislative activity while the latter is an enquiry which ends in an administrative or quasi- judicial decision. [853D-F] 4.2 In the present case, paragraph 3 of the Drugs (Prices Control) Order, 1979 is an enabling provision. \"Such an enquiry as it thinks fit\" contemplated by it is an en- quiry of the former character to he made for the purposes of fixing the maximum price at which a bulk drug may he sold, with a view to regulating its equitable distribution and making it available at a fair price for the benefit of the ultimate consumer in consonance with Art. 39(b) of the Constitution. It is primarily from the consumer public's point of view that the is expected to make its enquiry. The need of the consumer public is to he ascer- tained and making the drug available to them at a fair price is its ultimate aim. The enquiry is to he made from that angle and directed towards that end. Information may he gathered from whatever source considered desirable by the . [872B-E] 847 4.3 In fixing the price of a bulk drug, the is expressly required by the Order to take into account the average cost of production of such bulk drug manufactured by 'an efficient manufacturer' and allow a reasonable return on 'net worth'. For this purpose too, the may gather information from any source including the manufacturers. Here again the enquiry by the need not be re- stricted to 'an efficient manufacturer' or some manufactur- ers; nor need it be extended to all manufacturers. What is necessary is that the average cost of production, by 'an efficient manufacturer' must be ascertained and a reasonable return allowed on 'net worth'. Being a subordinate or dele- gated legislative activity, the enquiry must necessarily comply with the statutory conditions, if any, no more and no less, and no implications of natural justice can be read into it unless it is a statutory condition. [866B-D] 5.1 The review provided by paragraph 27 of the Order, of the order made under paragraph 3 fixing maximum price of indigenously manufactured drugs, and under paragraphs 12 and 13 fixing leader and retail prices of formulations, is akin to a post-decisional hearing which is sometimes afforded after the making of some administrative orders, but not truly so. It is a curious amalgam of a hearing which occa- sianally precedes a subordinate legislative activity such as the fixing of municipal rates etc. and a post decisional hearing after the making of an administrative or quasi- judicial order. it is a hearing which follows a subordinate 'legislative activity intended to provide an opportunity to affected persons such as the manufacturers, the industry and the consumer public to bring to the notice of the subordi- nate legislating body the difficulties or problems experi- enced or likely to he experienced by them consequent on the price fixation, whereupon the may make appropri- ate orders. More precisely it is a review of subordinate legislation by a legislating body at the instance of an aggrieved person. [873B; 874C-D] 5.2 The reviewing authority has the fullest freedom and discretion under paragraph 27 of the Order to prescribe its own procedure and consider the matter brought before it so long as it does not travel beyond the parameters prescribed by paragraph 3 in the case of a review against an order made under that paragraph and the respective other paragraphs in the case of other orders. But whatever procedure is adopted, it must be a procedure tuned to the situation. [873H; 874A- ., 7 SCR 97; ., 2 SCR 775; , 2 SCR 621; Swadeshi Cotton Mills v. 848 Union of India, 2 SCR 533 and , 3 SCR 676, distinguished. 6.1 So long as the method prescribed and adopted by the subordinate legislating body in arriving at the cost of production of bulk drugs was not arbitrary and opposed to the principal statutory provisions, it could not legitimate- ly be questioned. [878F] 6.2 It is open to the subordinate legislating body to prescribe and adopt its own mode of ascertaining the cost of production and the items to be included and excluded in so doing. Such a body is under no obligation to follow the method adopted by the Income-tax authorities in allowing expenses for the purpose of ascertaining income and assess- ing it. There may be many items of business expenditure which may be allowed by Income-tax authorities as legitimate expenses but which can never enter the cost of production. It is open to such an authority to adopt a rough and read but otherwise not unreasonable formula rather than a need- lessly intricate so-called scientific formula. [878D-H] It could not therefore, be said in the instant case, that the subordinate legislating authority acted unreasona- bly in prescribing the norms in the manner it has done. 7.1 From the legislative nature of the activity of the , it is clear that it is under no obligation to make any disclosure of any information received and consid- ered by it in making the order but in order to render effec- tive the right to seek a review given to an aggrieved per- son, the , if so requested by the aggrieved manu- facturer, is under an obligation to disclose any relevant information which may reasonably be disclosed pertaining to 'the average cost of production of the bulk drug manufac- tured by an efficient manufacturer' and 'the reasonable return on net worth'. [874C-E] 7.2 In the instant case, the procedure followed by the in furnishing the requisite particulars at the time of the hearing of the review applications and discuss- ing across the table the various items that hod been taken into account was sufficient compliance with the demands of fair play in the case of the class of persons claiming to by affected by the fixation of maximum price under the Drugs (Prices Control) Order. It cannot, therefore, be said that there was anything unfair in the procedure adopted by the . [876D-E] 8. This cannot constitute itself into a court of appeal over 859 the in the matter of price fixation. The ques- tions that obsolete quantitative usages had been taken into consideration, proximate cost data had been ignored, and the data relating to the year ending November 1976 had been adopted as the basis; that there were errors in totalling, errors in the calculation of prices of utilities, errors in the calculation of 'net worth' and many other similar er- rors, were questions to be raised before the in the review application under paragraph 27. [877A-C] 9.1 It is the necessary duty of the to pro- ceed to fix the retail price of a formulation as soon as the price of the parent bulk drug is fixed. Though the price fixation of formulations is dependent on the price of the bulk drug, it is not to await the result of a review appli- cation which in the end may turn out to be entirely without substance. In view of the public interest, therefore, it is necessary that the price of formulation should be fixed close on the heels of the fixation of bulk drug price. [879D-E; G] 9.2 The ups and downs of commerce are inevitable it is not possible to devise a fool proof system to take care of every possible defect and objection. It is certainly not a matter at which the court could take a hand. All that court may do is to direct the to dispose of the review application expeditiously according to a time bound pro- gramme. [879F-G] 10. Though the price of a bulk drug is dependent on innumerable variables, it does not follow that the notifica- tion fixing the maximum price must necessarily be struck down as obsolete by the mere passage of time. The applica- tions for review must be dealt with expeditiously and when- ever they are not so dealt with, the aggrieved person may seek a mandamus from the court to direct the to deal with the review application within a time frame-work. [880B-C] 11. Where prices of essential commodities are fixed in order to maintain or increase their supply or for securing their equitable distribution and availability at fair prices, the court should not make any interim order staying the implementation of the notification fixing the prices. Such orders are against the public interest and ought not to be made by a court unless it is satisfied that no public interest is going to suffer. In matters of fixation of price, it is the interest of the consumer public that must come first and any interim order must take care of that interest. [880D-F] 850 In the instant case, the order made by has the manufacturers on terms, but the consumer public has been left high and dry. [881D] 12. Apart from the fact that an appeal is ordinarily considered to be a continuation of the original proceeding, in the present case, further orders of the Supreme were also in contemplation and such further orders could only be made if appeals were preferred to the Supreme . There was no doubt in anyone's mind that the matter would be taken up in appeal to the Supreme whichever way the writ petitions were decided. The undertakings given by the parties in the present cases, were thus intended to and do continue to subsist. [881E-F] [The is directed to dispose of the review applications after giving notice of hearing to the manufac- turer. The hearing to be given within two months and the review applications disposed of within two weeks after the conclusion of the hearing.] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1603 of 1985 etc. From the Judgment and Order dated 17.12.1984 of in C.W.P. No. 820 of 1981. ", ", Additional Solicitor General um, and for the Appellants. , , , , , Mrs. and for the Respondents. ", "The Judgment of the Court was delivered by , J. It was just the other day that our brothers and , JJ. had to give directions in a case ( ) where a public spirited litigant had complained about the unscrupulous exploitation of the Indian Drug and Pharma- ceutical Market by multinational Corporations by putting in circulation low-quality and even deleterious drugs. In this group of cases we are faced with a different problem of alleged exploitation by big manufacturers of bulk drugs. The problem is that of high prices, bearing, it is said, little relation to the cost of production to the manufacturers. By way of illustration, we may straightaway mention a glaring instance of such high-pricing which was brought to our notice at the very commencement of the hear- ing. 'Barlagan Ketone', a bulk drug, was not treated as an essential bulk drug under the Drugs (Prices Control) Order, 1970 and was not included in the schedule to that order. A manufacturer was, under the provisions of that Order, free to continue to sell the drug at the price reported by him to at the time of the commencement of the order, but was under an obligation not to increase the price without the prior approval of . The price which the manufacturer of Barlagan Kotone, report- ed to in 1971 was Rs.24,735.68 per Kg. After the 1979 Drugs (Prices Control) Order came into force, the distinction between essential and non-essential bulk drugs was abolished and a maximum price had to be fixed for Barlagan Ketone also like other bulk drugs. The manufac- turer applied for fixation of price at Rs.8,500 per Kg. The Government, however, fixed the price at Rs.1,810 per Kg. For the moment, ignoring the price fixed by the Government, we see that the price of Rs.24,735 per Kg. at which the manu- facturer was previously selling the drug and at which he continues to market the drug to this day because of the quashing of the order fixing the price by , is so unconsciously high even compared with the price claimed by himself that it appears to justify the charge that some manufacturers do indulge in 'profiteering'. Profiteering, by itself, is evil. Profiteering in the scarce resources of the community, much needed life-sustain- ing food-stuffs and lifesaving drugs is diabolic. It is a menance which had to be lettered and curbed. One of the principal objectives of the Essential Commodities Act , 1955 is precisely that. It must be remembered that Art. 39(b) enjoins a duty on the towards securing 'that the ownership and control of the material resources of the community are so distributed as best to subserve the common good'. The Essential Commodities Act is a legislation to- wards that end. of the Essential Commodities Act enables , if it is of opinion 'that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair price', to 'provide for regulating or prohibiting by order, the production, supply and distribution thereof and trade and commerce therein'. In particular, enables , to make an order providing for controlling the price at which any essential commodity may be bought or sold. It is in pursuance of the powers granted to by the Essential Commodi- ties Act that first the Drugs (Prices Control) Order, 1970 and later the Drugs (Prices Control) Order, 1979 were made. ", "852 ", "Armed with authority under the Drugs (Prices Control) Order, 1979 issued notifications fixing the maximum prices at which various indigenously manufactured bulk drugs may be sold by the manufacturers. These notifica- tions were questioned on several grounds by the manufactur- ers and they have been quashed by on the ground of failure to observe the principles of natural justice. Since prices of 'formulations' are primarily de- pendent on prices of 'buli drugs', the notifications fixing the retail prices of formulations were also quashed. The manufacturers had also filed review petitions before the under paragraph 27 of the 1979 Order. The review petitions could not survive after the notifications sought to be reviewed had themselves been quashed. Nevertheless gave detailed directions regarding the manner of disposal of the review petitions by . has preferred these appeals by Special leave of this Court against the judgment of . The case for was presented to us ably by , the learned Additional Solicitor General and the manufacturers were represented equally ably by . ", "Before we turn to the terms of the Drugs (Prices Con- trol) Order, 1979 we would like to make certain general observations and explain the legal position in regard to them. ", "We start with the observation, 'Price-fixation is nei- ther the function nor the forte of the '. We concern ourselves neither with the policy nor with the rates. But we do not totally deny ourselves the jurisdiction to enquire into the question, in appropriate proceedings, whether relevant considerations have gone in and irrelevant consid- erations kept out of the determination of the price. For example, if the has decreed the pricing policy and prescribed the factors which should guide the determina- tion of the price, we will, if necessary, enquire into the question whether the policy and the factors are present to the mind of the authorities specifying the price. But our examination will stop there. We will go no further. We will not deluge ourselves with more facts and figures. The assem- bling of the raw materials and the mechanics of price fixa- tion are the concern of the executive and we leave it to them. And, we will not revaluate the considerations even if the prices are demonstrably injurious to some manufacturers or producers. The will, of course, examine if there is any hostile discrimination. That is a different 'cup of tea' altogether. ", "The second observation we wish to make is, legislative action, plenary or subordinate, is not subject to rules of natural justice. In the case of legislation, the proposition is self-evident. In the case of subordinate 'legislation, it may happen that may itself provide for a notice and for a hearing-there are several instances of the legislature requiring the subordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal rate--,in which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. The right here given to rate payers or others is in the nature of a concession which is not to detract from the character of the activity as legislative and not quasijudi- cial. But, where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity. ", "Occasionally, the legislature directs the subordinate legislating body to make 'such enquiry as it thinks fit' before making the subordinate legislation. In such a situa- tion, while such enquiry by the subordinate legislating body as it deems fit is a condition precedent to the subordinate legislation, the nature and the extent of the enquiry is in the discretion of the subordinate legislating body and the subordinate legislation is not open to question on the ground that the enquiry was not as full as it might have been. The provision for 'such enquiry as it thinks fit' is generally an enabling provision, intended to facilitate the subordinate legislating body to obtain relevant information from all and whatever source and not intended to vest any right in any one other than the subordinate-legislating body. It is the sort of enquiry which the legislature itself may cause to be made before legislating, an enquiry which will not confer any right on anyone. ", "The third observation we wish to make is, price fixation is more in the nature of a legislative activity than any other. It is true that, with the proliferation of delegated legislation, there is a tendency for the line between legis- lation and administration to vanish into an illusion. Admin- istrative, quasi-judicial decisions tend to merge in legis- lative activity and, conversely, legislative activity tends to fade into and present an appearance of an administrative or quasi-judicial activity. Any attempt to draw a distinct line between legislative and administrative functions, it has been said, is 'difficult in theory and impossible in practice'. Though difficult, it is necessary that the line must sometimes be drawn as different legal fights and conse- quences may ensue. The distinction between the two has usually been expressed as 'one between the general and the particular'. 'A legislative act is the creation and promulgation of a general rule of conduct without refer- ence to particular cases; an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in accordance with the requirements of policy'. 'Legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future; adminis- tration is the process of performing particular acts, of issuing particular orders or of making decisions which apply general rules to particular cases.' It has also been said \"Rule making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class\" while, \"an adjudication, on the other hand, applies to specific individuals or situa- tions\". But, this is only a bread distinction, not neces- sarily always true. Administration and administrative adju- dication may also be of general application and there may be legislation of particular application only. That is not ruled out. Again, adjudication determines past and present facts and declares rights and liabilities while legislation indicates the future course of action. Adjudication is determinative of the past and the present while legislation is indicative of the future. The object of the rule, the reach of its application, the rights and obligations arising out of it, its intended effect on past, present and future events, its form, the manner of its promulgation are some factors which may help in drawing the line between legisla- tive and non-legislative acts. A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transac- tions. It is a direction of a general character, not direct- ed against a particular situation. It is intended to operate in the future. It is conceived in the interests of the general consumer public. The right of the citizen to obtain essential articles at fair prices and the duty of the to so provide them are transformed into the power of the to fix prices and the obligation of the producer to charge n6 more than the price fixed. Viewed from whatever angle, the angle of general application the prospectivity of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legislative activity. Price- fixation may occasionally assume an administrative or quasi-judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the or its nominee and the price to be paid is directed by the legislature to be determined accord- ing to the statutory guidelines laid down by it. In such situations the determination of price may acquire aquasi-judicial character. Otherwise, price fixation is generally a legislative activity. We also wish to clear a misapprehension which appears to prevail in certain circles that price-fixation affects the manufacturer or producer primarily and therefore fairness requires that he be given an opportunity and that fair opportunity to the manufacturer or producer must be read into the procedure for price-fixa- tion. We do not agree with the basic premise that price fixation primarily affects manufacturers and producers. Those who are most vitally affected are the consumer public. It is for their protection that price-fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer, if not more. The three observations made by us are well-settled and wellfounded on authority. The cases to which we shall now refer, will perhaps elucidate what we have tried, unfelici- tously, to express. ", " , 1 SCC 468 a notification fixing the ex-factory price of certain counts of cotton yarn was questioned on the ground that the price had been arbitrarily fixed. After referring to v. State of Madhya Pradesh, 1 SCR 380; , 2 SCR 627; ), (unreported); and , SCR 982; , 2 SCR 375; , 1 SCC 129; , 3 SCC 435 and , 2 SCR 526 a constitution bench of the court observed that the dominant object and the purpose of the legislation was the equitable distribution and availability of commodities at fair price and if profit and the producer's return were to be kept in the forefront, it would result in losing sight of the object and the purpose of the-legislation. If the prices of yarn or cloth were fixed in such a way to enable the manufacturer or producer recover his cost of production and secure a reasonable margin of profit, no aspect of infringe- ment of any fundamental right could be said to arise. It was to be remembered that the mere fact that some of those were engaged in the industry, trade or commerce alleged'that they were incurring loss would not render the law stipulating the price unreasonable. It was observed, \"The control of prices may have effect either on maintaining or ,increasing supply of com- modity or securing equit- ", "856 ", "able distribution and availability at fair prices. The controlled price has to retain this equilibrium in the supply and demand of the commodity. The cost of production, a reasonable return to the producer of the commodity are to be taken into account. The producer must have an incentive to produce. The fair price must be fair not only from the point of view of the consumer but also from the point of view of the producer. In fixing the prices, a price line has to be held in order to give preference or pre-dominant consideration to the interest of the consumer or the general public over that of the produc- ers in respect of essential commodities. The aspect of ensuring availability of the essen- tial commodities to the consumer equitably and at fair price is the most important considera- tion. ", "The producer should not be driven out of his producing business. He may have to bear loss in the same way as he does when he suf- ", "fers losses on account of economic forces operating in the business. If an essential commodity is in short supply or there is hoarding, concerning or there is unusual demand, there is abnormal increase in price. If price increases, it becomes injurious to the consumer. There is no justification that the producer should be given the benefit of price increase attributable to hoarding or cornering or artificial short supply. In such a case, if an \"escalation\" in price is contem- plated at intervals, the object of controlled price may be stultified. The controlled price will enable both the consumer and the producer to tide over difficulties. therefore, any restriction in excess of what would be neces- sary in the interest of general public or to remedy the evil has to be very carefully considered so that the producer does not perish and the consumer is not crippled.\" ", "The cases of and were distinguished on the ground that they were governed by sub-section (3C) of sec. 3 of the Essential Commodities Act and therefore, had no relevance to the case before the Constitution Bench. The case of was distinguished on the ground that the deci- sion was rendered by invitation and on the agreement of the parties irrespective of technical and legal questions. The Court quoted with approval a passage from Secretary of v. , 330 US 604, stating, \"Suffice it to say that since fixed the quotas on a historical basis it is not for this Court to reweigh the relevant factors and, per chance, substitute its notion of expediency and fairness for that of . This is so even though the quota thus fixed may demonstrably be disadvantageous to certain areas or persons. This Court is not a tribunal for relief from the crudities and inequities of complicated experimental economic legisla- tion \". ", " , 2 SCC 630; the observed, \"Price-fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material. It could not, there- fore, give rise to a complaint that a rule of natural justice has not been followed in fixing the price. Nevertheless, the criterion adopted must be reasonable. Reasonableness, for purposes of judging whether there was an \"excess of power\" or an \"arbitrary\" exercise of it, is really the demonstration of a rea- sonable nexus between the matters which are taken into account in exercising a power and the purposes of exercise of that power.\" ", "It was also reiterated that the decision in case was based on a special agreement between the parties and therefore, had no relevance to the question before them. ", " , 3 SCC 459 a Constitution Bench of seven judges of this court had to consider the validity of the Mustard Oil (Price Control) Order, 1977, an Order made in exercise of the powers con- ferred upon Central Government by the Essential Commodities Act . , J. speaking for the court approved the observation of , CJ. in that it was enough compliance with the Constitutional man- date if the basis adopted for price fixation was not shown to be so patently unreasonable as to be in excess of the power to fix the price. He observed \"In the ultimate analysis the mechanics of price fixation has necessarily to be left to the judgment of the Executive and unless it is patent that there is hostiled discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid.\" ", "Referring to , the learned CJ. reaf- firmed the approval accorded to the statement in Secretary of Agriculture v. (supra) that could not be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation. and were again referred to and it was pointed out that those cases turned on the language of of the Essential Commodities Act. was consid- ered and it was affirmed that the judgment in that case could not be treated as precedent and could not afford any appreciable assistance in the decision of price fixation cases as it proceeded partly on agreement between the par- ties and partly on concessions made at the bar. , CJ. who delivered a separate opinion for himself and for , J. agreed that the judgment in was not to provide a precedent in price fixation case. He also reaf- firmed the proposition that price fixation was in the nature of a legislative measure and could not give rise to a com- plaint that natural justice was not observed. He indicated the indicia which led him to the conclusion that price fixation was a legislative measure. He observed: ", "\"We think that unless, by the terms of a 'particular statute, or order, price fixation is made a quasi-judicial function for speci- fied purposes or cases, it is really legisla- tive in character in the type of control order which is now before us because it satisfies the tests of legislation. A legislative meas- ure does not concern itself with the facts of an individual case. It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class. In the case before us, the Control Order applies to sales of mustard oil anywhere in India by any dealer. Its validity does not depend on the observance of any procedure to be complied with or particular types of evi- dence to be taken on any specified matters as conditions precedent to its validity. The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed, or in other words by reasonableness judged by possible or probable consequences.\" ", " , 2 SCC 293 there was an indication though it was not expressly so stated that the question of observing natural justice did not arise in cases of price fixation. , 2 SCC 600 it was held that the Sugar Cane Control Order, 1966 was a legislative measure and therefore, rules of natural justice were not attracted. , 2 SCC 722 it was observed that legislative activity did not invite natural justice and that making of a declara- tion that a certain place shall be a principal market yard for a market area under the relevant Agricultural Produce Markets Acts was an act legislative in character. The obser- vation of , J. in v. Lord , of St. Marylebone 1 WLR 1973 that the rules of natural justice do not run in the sphere of legislation, primary or delegated, was cited with approval and two well known text books writers and were also quot- ed. The former had said, \"There is no doubt that a minister, or any other body, in making legislation, for example, by statutory instrument or by law, is not subject to the rules of natural justice-- v. Lord m of St. Marylebone (supra)--any more than is itself; Edinburgh and Dalkeith Rv. v. per Lord , 8 CL & F 700, 720; v. , 1 All ER ", "609. The latter had said, \"There is no right to be heard before the making of legislation, whether primary or dele- gated, unless it is provided by statutes.\" , 4 SCC 471; it was pointed out that the amendment of the Madhya Pradesh Food Stuffs Distribution Control Order was a legis- lative function and there was, therefore, no question of affording an opportunity to those who were to be affected by it. ", " , 4 SCC 575 the observations of , CJ. in Prag Ice and Oil Mills were quoted with approval in connection with the fixation of prices of food stuffs served in restaurants. In Tharoe Mal v. , 1 SCC 102 one of the questions was regarding the nature of the hearing to be given before imposing municipal taxes under the Uttar Pra- desh Municipalities Act , 1916. It was held, \" ....... the procedure for the imposition of the tax is legislative and not quasi- ", "judicial ...... The right to object, howev- er, seems to be given at the stage of propos- als of the tax only as a concession to re- ", "quirements of fairness even though the procedure is legisla- tive and not quasi-judicial.\" ", "We mentioned that the Panipat and the Anakapalle eases were distinguished in Shree Meenakshi, and Prag Ice. Pani- pat and Anakapalle were both cases where the question was regarding the price payable to a person who was required to sell to the a certain percentage of the quantity of sugar produced in his mill. The Order requiring him to sell the sugar to the was made under of the Essential Commodities Act under which was enabled to make an order requiring any person engaged in the production of any essential commodity to sell the whole or specified part of the quantity produced by him to the or its nominee. It will straight-away be seen that an order under if a specific order directed to a particular individual for the purpose of enabling to purchase a certain quan- tity of the commodity from the person holding it. It is an order for a compulsory sale. When such a compulsory sale is required to be made under , the question naturally arises what is the price to be paid for the commodity pur- chased? provides for the ascertainment of the price. It provides that in calculating the amount to be paid for the commodity required to be sold regard is to be had to--(a) the minimum price, if any, fixed for sugarcane by under this section; (b) the manufac- turing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar. It is further prescribed that different prices may be determined, from time to time, for different areas or for different factories or for different kinds of sugar. It is to be noticed here that the payment to be made under is not necessarily the same as the controlled price which may be fixed under of the Act. of the Act, we have already seen, enables to make an order controlling the price at which any essential commodity may be bought or sold, if is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or in securing their equitable distribution and availability at fair prices. provides for the determination of the price to be paid to a person who has been directed by by an Order made under to sell a certain quantity of an essential commodity to the or its nominee. While s. 3(2)(c) contemplates an Order of a general nature, contemplates a specific transaction. If the provisions of under which the price of an essential commo- ", "861 ", "dity may be controlled are contrasted with under which payment is to be made for a commodity require to be sold by an individual to the Government, the distinction between a legislative act and a non-legislative act will at once become clear. The Order made under , which is not in respect of a single transaction, nor directed to particular individual is clearly a legislative act, while an Order made under which is in respect of a particu- lar transaction of compulsory sale from a specific individu- al is a non-legislative act. The Order made under controlling the price of an essential commodity may itself prescribe the manner in which price is to be fixed but that will not make the fixation of price a non-legislative activ- ity, when the activity is not directed towards a single individual or transaction but is of a general nature, cover- ing all individuals and all transactions. The legislative character of the activity is not shed and an administrative or quasi-judicial character acquired merely because guide- lines prescribed by the statutory order have to be taken into account. ", "We may refer at this juncture to some illuminating passages from 's book on 'Administrative Law'. He said: ", "\"If a particular function is termed \"legisla- tive\" or \"rulemaking\" rather than \"judicial\" or \"adjudication,\" it may have substantial effects upon the parties concerned. If the function is treated as legislative in nature, there is no right to notice and hearing, unless a statute expressly requires them. If a hearing is held in accordance with a statutory requirement, it normally need not be a formal one, governed by the requirements discussed in Chapters 6 and 7. The characterization of an administrative act as legislative instead of judicial is thus of great significance.\" ", "XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX X \"As a federal court has recently pointed out, there is no \"bright line\" between rule-making and adjudication. The most famous pre-APA attempt to explain the difference between legislative and judicial functions was made by Justice in v. \"A judicial inquiry,\" said he, \"investigates, declares and enforces liabili- ties as they stand on present or past facts and under laws supposed already to exist. That is its purpose and end. Legislation on the other hand looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power.\" The key factor in the analysis is time: a rule prescribes future patterns of conduct; a decision determines liabilities upon the basis of present or past facts.\" ", "\"The element of applicability has been empha- sized by others as the key in differentiating legislative from judicial functions. According to Chief Justice , \"Rulemaking is nor- mally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class.\" An adjudication, on the other hand, applies to specific individuals or situations. Rulemaking affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely affected; adjudication operates conceretly upon individuals in their individual X X capacity.\" ", "We may now turn our attention to the two Drugs (Prices Control) Order of 1970 and 1979, both of which were made by in exercise of its powers under of the Essential Commodities Act. ", "The Drugs (Prices Control) Order, 1970 defined 'Bulk Drugs' as follows: \"Bulk drugs\" means \"any unprecessed phamaceu- tical, chemical, biological and plant product or medicinal gas conforming to pharmacopocial or other standards accepted which is used as such or after being processed into formula- tions and includes an essential bulk drug.\" ", "Bulk drugs were divided into essential bulk drugs which were included in the schedule and bulk drugs which were not so included. In the case of essential bulk drugs, paragraph 4 of the order enabled to fix the maximum price at which such essential bulk drugs should be sold. In the case of bulk drugs, which were not included in the schedule, a manufacturer was entitled to continue to market the product at the same price at which he was market- ing the products at the time of the commencement of the order. He was required to report this price to within two weeks of the commencement of the order and was further prohibited from increasing the price without obtaining the approval of . ", ", popu- larly known as was appointed by to enquire into the various facets, of the Drug Industry in India. One of the terms of reference was 'to examine the measures taken so far to reduce prices of drugs for the consumer, and to recommend such further measures as may be necessary to rationalise the prices of basic drugs and formulations.' noticed that 'in a country like India where general poverty and the wide disparities in levels of income between different sections existed' it was particularly important to emphasise 'the social utility of the industry and the urgent need for extending as rapidly as possible certain minimum facilities in terms of preventive and curative medicines to the large mass of people both urban and rural'. It was said, \"The concern about drug prices, therefore, really arises from the fact that many of them are essential to the health and welfare of the community; and that there is no justification for the drug industry charging prices and having a production pattern which is based not upon the needs of the community but on aggres- sive marketing tactices and created demand.\" accepted the report of and announced in Parlia- ment the 'Statement on Drug Policy' pursuant to which the Drugs (Prices Control) Order, 1970 was repealed and the Drugs (Prices Con- trol) Order, 1979 was made. Paragraph 44 of the Statement on Drug Policy in 1978 dealt with 'pricing policy' and it may be usefully extracted here. It was as follows:- ", "\" had recommended that a return post tax between 12 to 14% on equity that is paid up capital plus reserves, may be adopted as the basis for price fixation, depending on the importance and complexity of the bulk drug. In the case of formulations, felt that the principle of selectivity could be introduced in terms of ", "(a) the size of the units, (b) selection of items; and (c) controlling the prices only of market leaders, in particular, of products for which price control is contemplated. considered that units (other than MRTP units) having only turnover of less than Rs.1 crore may be exempted from price control. Alternatively, all formulations (other than those marketed under generic names) which have an annual sale in the coun- try in excess of Rs.15 lakhs (inclusive of excise duty) may be subjected to price con- trol, irrespective of whether or not the total annual turnover of the unit is in excess of Rs.1 crore. The ceiling price will be deter- mined taking into account the production costs and a reasonable return for the units which are the market leaders. Yet another variant of a selectivity, according to , would be to identify product groups which individually are important and which collec- tively constitute the bulk of the output of the industry. In respect of each item of this list, it would be possible to identify the leading producers who account for about 60% of the sales between them. On the basis of cost analysis in respect of those units, maximum prices may be prescribed and all other units may be free to fix their prices within this ceiling. On balance, was of the view that this particular variant selectivity may be administratively simpler.\" The Drugs (Prices Control) Order, 1979 was made pursuant to this Statement of Policy. Paragraph 2(a) of the Drugs (Prices Control) Order, 1979 defines 'bulk drug' to mean \"any substance including pharmaceutical, chemical, biological or plant product or medicinal gas conforming to pharmacological or other stand- ards accepted under the Drugs and Cosmetics Act , 1940, which is used as such or as in ingredient in any formulations.\" \"Formulation\" is defined as follows:- ", "\"Formulation means a medicine processed out of, or containing one or more bulk drugs or drugs, with or without the use of any pharma- ceutical aids for internal or external use for, or in the diagnosis, treatment, mitiga- tion or prevention of disease in human beings or animals, but shall not include-- ", "(i) any bona fide Ayurvedic (including ) or Unani (Tibb) Systems of medicine; ", "(ii) any medicine included in the Hom- ", "oeopathic system of medicine; ", "865 ", "(iii) any substance to which the provi- ", "sions of the Drugs and Cosmetics Act , 1940 (XXIII of 1940), do not apply\" ", "The expressions \"free reserve\", \"leader price\", \"net-worth\", \"now bulk drug\", \"pooled price,\" \"pre-tax return\", \"retention price\" are defined in the following manner: \"\"Free reserve\" means a reserve created by appropriation of profits, but does not include reserves provided for contingent liability, disputed claims, goodwill, revaluation, and other similar reserves\". ", "\"'leader price' means a price fixed by the for formulations specified in Category I, Category II or Category III of the Third Schedule in accordance with the provi- sions of paras. 10 and 11, keeping in view the cost of or efficiency, or both, of major manufacturers of such formulations.\" ", "\"'net-worth' means the share capital of a company plus free reserve, if any.\" ", "\"'new bulk drug' means a bulk drug manufac- tured within the country, for the first time after the commencement of this Order.\" ", "\"'Pooled price' in relation to a bulk drug, means the price fixed under para 7.\" ", "\"'pre-tax return' means profits before payment of incometax and sur-tax and includes such other expenses as do not form part of the cost of formulations.\" ", "\"'retention price' in relation to a bulk drug means the price fixed under paras 4 and 7 for individual manufacturers, or importers, or distributors, or such bulk drugs.\" ", "The distinction between an essential bulk drug included in the schedule and a bulk drug not so included in the sched- ule, which was made in 1970 Drugs (Prices Control) Order was abandoned in the 1979 Order. Bulk drugs were, however, broadly divided into indigenously manufactured bulk drugs, imported bulk drugs and hulk drugs which were both manufactured indigenously as also imported. Paragraph 3 of the 1979 Order enables the , with a view to regulating the equitable distribution of any indigenously manufactured bulk drug specified in the first or the second schedule and making it available at a fair price and after making such enquiry as it deems fit, to fix from time to time by notification in the official gazette, the maximum price at which the bulk drug shall be sold. Clause (2) of Paragraph 3 provides that while so fixing the price of a bulk drug, the may take into account the average cost of production of such bulk drug manufac- tured by an efficient manufacturer and allow a reasonable return on net worth. By way of an explanation efficient manufacturer is defined to mean \"a manufacturer-(i) Whose production of such bulk drug in relation to the total pro- duction of such bulk drug in the country is large, or (ii) who employs efficient technology in the production of such bulk drug.\" We have already noticed that 'net worth' is defined to mean 'the share capital of a company plus free reserve, if any'. \"Free reserve\" itself is separately de- fined. It is then prescribed by clause (3)-- ", "\"No person shall sell a bulk drug at a price exceeding the price notified under sub-para- graph 1, plus local taxes, if any payable: provided that until the price of bulk drug is so notified, the price of such bulk drug shall be the price which prevailed immediately before the commencement of this order and the manufacture of such bulk drug at a price exceeding the price which prevailed as afore- said.\" ", "This means that until the maximum sale price of an indige- nously manufactured bulk drug is fixed under paragraph 3 of the 1979 Order, the price fixed under paragraph 4 of the 1970 order or the price permitted under paragraph 5 of the 1970 order was to be maximum sale price. Paragraph 3(4)(a) requires a manufacturer commencing production of the bulk drug specified in the First or Second Schedule, the price of which has already been notified by the , not to sell the bulk drug at a price exceeding the notified price. Paragraph 3(4)(b) provides that where the price of a bulk drug has not been notified by the , the manufac- turer shall, within 14 days of the commencement of the the production of such bulk drug, make an application to the in Form I and intimate the the price at which he intends to sell the bulk drug and the may, after making such an enquiry as it thinks fit, by order, fix a provisional price at which such bulk drug shall be sold. Paragraph 4 of the 1979 order provides that notwith- standing anything contained in paragraph 3, the may, if it considers necessary or expedient so to do for increasing the production of an indigenously manufactured bulk drug specified in the first or second schedule, by order, fix-- ", "\"(a) a retention price of such bulk drug, ", "(b) a common sale price for such bulk drug taking into account the weighted average of the retention price fixed under clause ", "(a).\" ", "Paragraph 4 is thus in the nature of an exception to para- graph 3. It is meant to provide a fillip to individual manufacturers of bulk drugs whose production it is necessary to increase. Retention price, by its very definition per- tains to individual manufacturers. Common sale price, we take it, is the price at which manufacturers whose reten- tions are fixed may sell the bulk drug despite the maximum sale price fixed under paragraph 3. ", "Paragraph 5 deals with the power of the to fix maximum sale price of new bulk drugs. Paragraph 6 ena- bles the to fix the maximum sale price of import- ed bulk.drugs specified in First and Second Schedules. Paragraph 7 deals with the power of the to fix retention price and pooled price for the sale of bulk drugs specified in the First and Second Schedules which are both indigenously manufactured and imported. Paragraph 9 empowers the to direct manufacturers of bulk drugs to sell bulk drugs to manufacturers of formulations. Paragraph 10 prescribes a formula for calculating the retail price of formulations. The formula is: ", "\"R.P. = (M.C.+C.C.+P.M.+P.C.) x (1+MU)+ E.D. ", "100 ", "\"R.P.\" means retail price. ", "\"M.C.\" means material cost and includes the cost of drugs and other pharmaceutical aids used including overages, if any, and process loss thereon in accordance with such norms as may be specified by the from time to time by notification in the official in this behalf. \"C.C.'? means conversion cost worked out in accordance with such norms as may be specified by the from time to time by notifi- cation in the official e in this be- half. ", "\"P.M.\" means the cost of packing material including process loss thereon worked out in accordance with such norms as may be specified by the from time to time by notifi- cation in the official in this behalf. \"P.C.\" means packing charges worked out in accordance with such norms as may be specified by the from time to time by notifi- cation in the official in this behalf. \"M.U.\" means make-up referred to in para. 11. \"E.D.\" means excise duty.\" ", "Paragraph 11 explains what 'Mark-up' means. Paragraph 12 empowers the to fix leader prices of formulations of categories I and II specified in the third schedule. Paragraph 13 empowers the to fix retail price of formulations specified in category III of third schedule. Paragraph 14 contains some general provisions regarding- prices of formulations. Paragraph 15 empowers the to revise prices of formulations. ", "Paragraph 16 provides that where any manufacturer, importer or distributor of any bulk drug or formulation fails to furnish information as required under the order within the time specified therein, the may, on the basis of such information as may be available with it, by order, fix a price in respect of such bulk drug or formu- lation as the case may be. Paragraph 17 requires the Govern- ment to maintain the Drugs Prices Equalization Account to which shall be credited, by the manufacturer, among other items, \"the excess of the common selling price or, as the case may be, pooled price over his reten- tion price.\" ", "It is provided that the amount credited to the Drugs Prices Equaliza- ", "869 ", "tion Account shall be spent for paying to the manufacturer, \"the shortfall between his retention price and the common selling price or as the case may be, the pooled price.\" ", "Paragraph 27 enables any person aggrieved by any notifi- cation or order under paragraphs 3, 4, 5, 6, 7, 9, 12, 13, 14, 15 or 16 to apply to the for a review of the notification or order within fifteen days of the date of the publication of the notification in the official , or, as the case may be, the receipt of the order by him. Bulk drugs constituting categories I and II are enumer- ated in the First Schedule. Bulk drugs constituting category III are enumerated in the Second Schedule. Formulations constituting categories I, II and III are enumerated in the Third Schedule. The Fourth Schedule prescribes the various forms referred to in the different paragraphs of the Drugs (Prices Control) Order. Form No. 1 which is referred to in paragraphs 3(4), 5 and 8(1) is titled \"Form of application for fixation or revision of prices of bulk drug\". The sever- al columns of the Form provide for various particulars to be furnished and item 18 requires the applicant to furnish ,\"the cost of production of the bulk drug as per proforma (attached) duly certified by a practising Cost/Chartered Accountant\". The 'proforma' requires particulars of cost- data, such as, raw materials, utilities, conversion cost, total cost of production, interest on borrowings, minimum bonus, packing, selling expenses, transport charges, transit insurance charges, total cost of sales, selling price, existing price or notional or declared prices, etc. to be furnished. A note at the end of the proforma requires the exclusion from cost certain items of expenses, such as, bonus in excess of statutory minimum, bad debts and provi- sions, donations and charities, loss/gain on sale of assets, brokerage and commission, expenses not recognised by income tax authorities and adjustments relating to previous years. , learned Additional Solicitor General on behalf of , submitted that the fixation of maximum price under paragraph 3 of the Drugs (Prices Control) Order was a legislative activity and, therefore, not subject to any principle of natural justice. He urged that relevant information was required to be furnished and was indeed furnished by all the manufacturers in the pre- scribed form as required by paragraph 3(4) of the Drugs (Prices Control) Order. This information obtained from the various manufacturers was taken into account and a report was then obtained from , a high-powered expert body specially constituted to undertake the study of industrial cost struc- ", " ", "tures and pricing problems and to advise the . It was only thereafter that notifications fixing the prices were issued. He further submitted that paragraph 27 of the Central Order gave a remedy to the manufacturers to seek a review of the order fixing the maximum price under paragraph ", "3. The review contemplated by paragraph 27 in so far as it related to the notification under paragraph 3, it was sub- mitted by the learned Additional Solicitor General, did not partake the character of a judicial or quasi-judicial pro- ceeding. He urged that the manufacturers had invoked the remedy by way of review, but before the applications for review could be dealt with, they rushed to the court with the writ petitions out of which the appeal and the special leave petitions arise. He urged that the had always been ready and wilting to give a proper hearing to the parties and in fact gave them a heating in connection with their review applications. The grievance of the manu- facturers in the writ petitions that they were not furnished the details of the basis of the price fixation was not correct since full information was furnished at the time of the hearing of the review applications when the matter underwent thorough and detailed discussion between the parties and the as well as . ", "The submission of , learned counsel for the respondents was that unlike other price control legisla- tions, the Drugs (Prices Control) Order ,was designed to induce better production by providing for a fair return to the manufacturer. Reference was made to the report which had recommended a return of 12 to 14% post tax return on equity, that is, paid up capital plus reserves and the 'Statement on Drug Policy' which mentioned that ceiling prices may be determined by taking into account production costs and a reasonable return. Great emphasis was laid on the second clause of paragraph 3 of the 1979 Order which provides that in fixing the price of a bulk drug, the Gov- ernment may take into account the average cost of production of such bulk drug manufactured by an efficient manufacturer and allow a reasonable return on networth. It was submitted that the provision for an enquiry preceding the determina- tion of the price of a bulk drug, the prescription in para- graph 3 clause 2 that the average cost of production of the drug manufactured by an efficient manufacturer should be taken into account and that a reasonable return on networth should be allowed and the provision for a review of the order determining the price, established that price-fixation under the Drugs (Prices Control) Order 2979 was a quasi- judicial activity obliging the observance of the rules of natural justice. The suggestion of the learned counsel was that the nature of the review under paragraph 27 was so apparently quasi-judicial and that the need to know the reasons for the order sought to be reviewed was so real if the manufacturer was effectively to exercise his right to seek the quasijudicial remedy of review, that by necessary implication it became obvious that the Order fixing the maximum price must be considered to be quasi- judicial and not legislative in character. The provision for enquiry in the first clause of paragraph 3 and the prescrip- tion of the matters to be taken into account in the second clause of paragraph 3 further strengthened the implication, according to the learned counsel. It was contended that in any case, whatever be the nature of the enquiry and the order contemplated by paragraph 3, the review for which provision made by paragraph 27 was certainly of a quasi- judicial character and, therefore, it was necessary that the manufacturers should be informed of the basis for the fixa- tion of the price and furnished with details of the same in order that they may truly and effectively avail themselves of the remedy of review. If that was not done, the remedy would become illusory. It was argued with reference to various facts and figures that the price had been fixed in an arbitrary manner and the Government was not willing to disclose the basis on which the prices were fixed on the pretext that it may involve disclosure of matters of confi- dential nature. It was stated that the applications of the manufacturers for review of the notifications fixing the prices had not been disposed of for years though time was really of the very essence of the matter. The prices of formulations were dependent on the prices of drugs and it was not right that prices of formulations should have been fixed even before the applications for review against the notifications fixing the price of bulk drugs were disposed of. It was suggested that the delay in disposing of the review applications had the effect of rendering the original notifications fixing the prices unreal and out of date and liable to be struck down on that ground alone. We are unable to agree with the submissions of the learned counsel for the respondents either with regard to the applicability of the principles of natural justice or with regard to the nature and the scope of the enquiry and review contemplated by paragraphs 3 and 27 while making our preliminary observations, we pointed out that price fixation is essentially a legislative activity though in rare circum- stances, as in the case of a compulsory sale to the Govern- ment or its nominee, it may assume the character 'of an administrative or quasijudicial activity. Nothing in the scheme of the Drugs (Prices Control) Order induces us to hold that price fixation under the Drugs (Prices Control) Order is not a legislative activity, but a quasi-judicial activity which would attract the observance of the princi- ples of natural justice. ", "872 ", "Nor is there anything in the scheme or the provisions of the Drugs (Prices Control) Order which otherwise contemplates the observance of any principle of natural justice or kin- dred rule, the non-observance of which would give rise to a cause of action to a suitor. What the order does contemplate however is 'such enquiry' by the 'as it thinks fit'. A provision for 'such enquiry' as it thinks fit' by a subordinate legislating body, we have explained earlier, is generally an enabling provision to facilitate the subordi- nate legislating body to obtain relevant information from any source and it is not intended to vest any right in any body other than the subordinate legislating body. In the present case, the enquiry contemplated by paragraph 3 of Drugs (Prices Control) Order is to be made for the purposes of fixing the maximum price at which a bulk drug may be sold, with a view to regulating its equitable distribution and making it available at a fair price. The primary object of the enquiry is to secure the bulk drug at a fair price for the benefit of the ultimate consumer an object designed to fulfil the mandate of Art. 39(b) of the Constitution. It is primarily from the consumer public's point of view that the is expected to make its enquiry. The need of the consumer public is to be ascertained and making the drug available to them at a fair price is what it is all about. The enquiry is to be made from that angle and directed towards that end. So, information may be gathered from whatever source considered desirable by the . The enquiry, obviously is not to be confined to obtaining infor- mation from the manufacturers only and indeed must go be- yond. However, the interests of the manufacturers are not to be ignored. In fixing the price of a bulk drug, the Govern- ment is expressly required by the Order to take into account the average cost of production of such bulk drug manufac- tured by 'an efficient manufacturer' and allow a reasonable return on 'net worth'. For this purpose too, the may gather information from any source including the manu- facturers. Here again the enquiry by the need not be restricted to 'an efficient manufacturer' or some manu- facturers; nor need it be extended to all manufacturers. What is necessary is that the average cost of production by 'an efficient manufacturer' must be ascertained and a rea- sonable return allowed on 'net worth'. Such enquiry as it thinks fit is an enquiry in which information is sought from whatever source considered necessary by the enquiring body and is different from an enquiry in which an opportunity is required to be given to persons likely to be affected. The former is an enquiry leading to a legislative activity while the latter is an enquiry which ends in an administrative or quasi-judicial decision. The enquiry contemplated by para- graph 3 of the Drug (Prices Control) Order is an enquiry of the former charac- ", "873 ", "ter. The legislative activity being a subordinate or dele- gated legislative activity, it must necessarily comply with the statutory conditions if any, no more and no less, and no implications of natural justice can be read into it unless it is a statutory condition. Notwithstanding that the price fixation is a legislative activity, the subordinate legisla- tion had taken care here to provide for a review. The review provided by paragraph 27 of the order is akin to a post decisional hearing which is sometimes afforded after the making of some administrative orders, but not truly so. It is a curious amalgam of a hearing which occasionally precedes a subordinate legislative activity such as the fixing of municipal rates etc. that we mentioned earlier and a post-decision hearing after the making of an administra- tive or quasi-judicial order. It is a hearing which follows a subordinate legislative activity intended to provide an opportunity to affected persons such as the manufacturers, the industry and the consumer public to bring to the notice of the subordinate legislating body the difficulties or problems experienced or likely to be experienced by them consequent on the price fixation, whereupon the Government may make appropriate orders. Any decision taken by the Government cannot be confined to the individual manufacturer seeking review but must necessarily affect all manufacturers of the bulk drug as well as the consumer public. Since the maximum price of a bulk drug is required by paragraph 3 to be notified any fresh decision taken in the proceeding for review by way of modification of the maximum price has to be made by a fresh notification fixing the new maximum price of the bulk drug. In other words, the review if it is fruitful must result in fresh subordinate legislative activity. The true nature of the review provided by paragraph 27 in so far as it relates to the fixation of maximum price of bulk drugs under paragraph 3 leader price and prices of formulations under paragraphs 12 and 13 is hard to define. It is diffi- cult to give it a label and to fit it into a pigeon-hole, legislative, administrative or quasi-judicial. Nor is it desirable to seek analogies and look to distant cousins for guidance. From the scheme of the Control Order and the context and content of paragraph 27, the Review in so far as it concerns the orders under paragraph 3, 12 and 13 appears to be in the nature of a legislative review of legislation, or more precisely a review of subordinate legislation by a subordinate legislating body at the instance of an aggrieved person. Once we have ascertained the nature and character of the review, the further question regarding the scope and extent of the review is not very difficult to answer. The reviewing authority has the fullest freedom and discretion to prescribe its own procedure and con- ", "874 ", "sider the matter brought before it so long as it does not travel beyond the parameters prescribed by paragraph 3 in the case of a review against an order under paragraph 3 and the respective other paragraphs in the case of other orders. But whatever procedure is adopted, it must be a procedure tuned to the situation. Manufacturers of any bulk drug are either one or a few in number and generally they may be presumed to be well informed persons, well able to take care of themselves, who have the assistance of Accountants, Advocates and experts to advise and espouse their cause. In the context of the Drug industry with which we are concerned and in regard to which the Control Order is made we must proceed on the basis that the manufacturers of bulk drugs are generally persons who know all that is to be known about the price fixed by the . From the legislative nature of the activity of the , it is clear that the is under no obligation to make any disclosure of any information received and considered by it in making the order but in order to render effective the right to seek a review given to an aggrieved person we think that the , if so requested by the aggrieved manufacturer is under an obligation to disclose any relevant information which may reasonably be disclosed pertaining to 'the average cost of production of the bulk drug manufactured by an efficient manufacturer' and 'the reasonable return on net worth'. For example, the manufacturer may require the Gov- ernment to give information regarding the particulars de- tailed in Form No. 1 of the Fourth Schedule which have been taken into account and those which have been excluded. The manufacturer may also require to be informed the elements which were taken into account and those which were excluded in assessing the 'free reserves' entering into the calcula- tion of 'net worth'. These particulars which he may seek from the are mentioned by us only by way of illustration. He may seek any other relevant information which the shall not unreasonably deny. That we think is the nature and scope of the review contemplated by Paragraph 27 in relation to orders made under Paragraphs 3, 12 and 13. ", "On the question of the scope of a Review, the learned counsel for the respondents invited our attention to ., 7 SCR 97; ., 2 SCR 775; , 2 SCR 621; , 2 SCR 533; and ., 3 SCR 676. We are afraid none of these cases is of any assistance to the correspondence since the court was not concerned in any of those cases with a review of subordinate legislation by the subordinate legislating body. ", " . (supra) the court held that the Union of India when dispos- ing of an application for review under Rule 59 of the Mines Concession Rules functioned as a quasi-judicial authority and was bound to observe the principles of natural justice. The decision rendered without disclosing the report of and without affording reasonable opportuni- ty to the appellants to present their case was contrary to natural justice was therefore, void. ., (supra) it was decided by the court that the power of review granted to under Rule 54 of the Mineral Concession Rules required the authority to act judicially and its decision would be a quasi-judicial act and the fact that Rule 54 gave power to to pass such order as it may deem 'just and proper' did not negative the duty to act judicial- ly. In case where , J. while ex- pounding on natural justice pointed out that in appropriate cases where a pre-decisional hearing was impossible, there must atleast be a post-decisional hearing so as to meet the requirement of the rule audi alteram partem. In , it was observed that in cases where owing to the compulsion of the fact situation or the necessity of taking speedy action, no pre-decisional hearing is given but the action is followed soon by a full post-decisional hear- ing to the person affected, there is in reality no exclusion of the audi alteram partem rule. It is no adaptation of the rule to meet the situational urgency. , (supra) the question arose whether clause 8B of the Import Control Order which empowered or the Chief Controller to keep in abeyance applications for licences or allotment of imported goods where any investigation is pending into an imported goods where any investigation is pending into an allegation men- tioned in clause 8 excluded the application of the princi- ples of natural justice. The court pointed out that it would be impermissible to interpret a statutory instrument to exclude natural justice unless the language of the instru- ment left no option to the court. As we said, these cases have no application to a review of subordinate legislation by the subordinate legislating body at the instance of a party. ", "We mentioned that the price fixed by the may be questioned on the ground that the considerations stipu- lated by the order as relevant were not taken into account. It may also be questioned on any ground on which a subordi- nate legislation may be questioned, such as, being contrary to constitutional or other statutory provisions. It may be questioned on the ground of a denial of the right guaranteed by Art. 14 if it is arbitrary, that is, if either the guidelines prescribed for the determination are arbitrary or if, even though the guidelines are not arbitrary, the guidelines are worked in an arbitrary fashion. There is no question before us that paragraph 3 prescribes any arbitrary guideline. It was, however, submitted that the guidelines were not adhered to and that facts and figures were arbitrarily assumed. We do not propose to delve into the question whether there has been any such arbitrary assumption of facts and figures. We think that if there is any grievance on that score, the proper thing for the manufacturers to do is bring it to the notice of the in their applications for review. The learned counsel argued that they were unable to bring these facts to the notice of the as they were not furnished the basis on which the prices were fixed. On the other hand, it has been pointed out in the counter-affida- vits filed on behalf of the that all necessary and required information was furnished in the course of the hearing of the review applications and. there was no justi- fication for the grievance that particulars were not fur- nished. We are satisfied that the procedure followed by the in furnishing the requisite particulars at the time of the hearing of the review applications is sufficient compliance with the demands of fair play in the case of the class of persons claiming to be affected by the fixation of maximum price under the Drugs (Prices Control) Order. As already stated by us, manufacturers of bulk drugs who claim to be affected by the Drugs (prices Control) Order, belong to a class of persons who are well and fully informed of every intricate detail and particular which is required to be taken into account in determining the price. In most cases, they are the sale manufacturers of the bulk drug and even if they are not the sole manufacturers, they belong to the very select few who manufacture the bulk drug. It is impossible to conceive that they cannot sit across the table and discuss item by item with the reviewing authority unless they are furnished in advance full details and particulars. The affidavits filed on behalf of show that the procedure which is adopted in hearing the review applications is to discuss across the table the various items that have been taken into account. We do not consider that there is anything unfair in the procedure adopted by the . If necessary it is always open to the manu- facturers to seek a short adjournment of the hearing of the review application to enable them to muster more facts and figures on their side. Indeed we find that the hearing given to the manufacturers is often protected. As we said we do not propose to examine this ques- ", "877 ", "tion as we do not want to constitute ourselves into a court of appeal over the in the matter of price fixa- tion. ", "The learned counsel argued that there were several patent errors which came to light during the course of the hearing in . He said that obsolete quantita- tive usages had been taken into consideration, proximate cost data had been ignored and the data relating to the year ending November, 1976 had been adopted as the basis. It was submitted that there were errors in totalling, errors in the calculation of prices of utilities, errors in the calcula- tion of net-worth and many other similar errors. As we pointed out earlier, these are all matters which should legitimately be raised in the review application, if there is any substance in them. These are not matters for investi- gation in a petition under Art. 226 of the Constitution or under Art. 32 of the Constitution. Despite the pressing invitation of to go into facts and figures and his elaborate submissions based on facts and figures, we have carefully and studiously refrained from making any reference to such facts and figures as we consider it out- side our province to do so and we do not want to set any precedent as was supposed to have been done in though it was not so done and, therefore, needed explanation in later cases. ", "One of the submissions of was that in calcu- lating \"net-worth\" the cost of new works in progress and the amount invested outside the business were excluded from 'free reserves' and that such exclusion could not be justi- fied on any known principle of accountancy. We think that the question has to be decided with reference to the defini- tion of 'free reserve' in paragraph 2(g) of the Control Order and not on any assumed principle of accountancy. This is also a question which may be raised before the in the review application. Referring to the 'proforma' attached to Form No. 1 of the Fourth Schedule in which are set out several items which have to be taken into account in assessing the cost of production, the learned counsel at- tacks the notes at the end of Item No. 14 which mentions the various items of expenses to be excluded in ascertaining the cost. The notes is as follows:- ", "\"Notes:-(i) Items of expenses to be excluded from costs-- ", "a) Bonus in excess of statutory minimum. ", "(b) Bad debts and provisions. ", "878 ", "(c) Donations and charities. ", "(d) Loss/Gain on sale of assets. ", "(e) Brokerage and commission. ", "(f) Expenses not recognized by Income-tax authorities (salary/prequisities, advertisements, etc.). ", "(g) Adjustments relating to previous years.\" ", "In particular, he argued that Item (a) 'bonus in excess of statutory minimum' should not have been excluded so also items of expenditure coming under the other heads (b) to (g) which had been allowed by Income-tax authorities as legiti- mate expenses. His submission was that where bonus in excess of statutory minimum was payable under the provisions of the Bonus Act there was no option left to the manufacturer not to pay the excess bonus. Similarly where expenses have been legitimately incurred and allowed by Income-tax authorities, there was no justification for excluding those items of expenditure from the cost. We do not agree with the submis- sion. It was open to the subordinate legislating body to prescribe and adopt its own mode of ascertaining the cost of production and the items to be included and excluded in so doing. The subordinate legislating body was under no obliga- tion to adopt the method adopted by the Income-tax authori- ties in allowing expenses for the purpose of ascertaining income and assessing it. There may be many items of business expenditure which may be allowed by Income-tax authorities as legitimate expenses but which can never enter the cost of production. So long as the method prescribed and adopted by the subordinate legislating body is not arbitrary and op- posed to the principal statutory provisions, it cannot be legitimately questioned. Another submission of the learned counsel relating to the norms for conversion costs, packing charges and process loss of raw materials and packing mate- rials required to the notified for the purpose of calculat- ing retail prices of formulations. The argument, for exam- ple, was that there should be a more scientific formula in regard to conversion cost and not, as was done, so many rupees and paise per thousand capsules or one litre of liquid. We do not agree with the submission. It is open to the subordinate legislating authority to adopt a rough and ready but otherwise not unreasonable formula rather than a needlessly intricate so-called scientific formula. We are unable to say that the subordinate legislating authority acted unreasonably in prescribing the norms in the manner it has done. ", "879 ", "While on the question on formulations, we would like to refer to the \"Oration\" of Dr. at the 24th Annual Convocation of the National Academy of Medical Sciences where he posed the question: ", "\"Why do we produce 60,000 formulations of drugs worth Rs.2,500 crores which reach only 20% of the population when recommends only 258 drugs and Rs.750 crores worth would suf- fice for all our people if used in an ethical manner?\" ", "A general submission of the learned counsel was that the price of formulations should not have been prescribed until the review application filed by the manufacturer in regard to the patent bulk drugs was disposed of. He submitted that the price of a formulation was dependant on the price of the bulk drug and it was, therefore, not right to fix the price of formulation when the price of bulk drug was in question in the review application and there was a prospect of the price of the bulk drug being increased. We do not see any force in the submission. We think that it is the necessary duty of the Government to proceed to fix the retail price of a formulation as soon as the price of the parent bulk drug is fixed. Price fixation of a formulation is no doubt de- pendant on the price of the bulk drug, but it is not to await the result of a review application which in the end may turn out to be entirely without substance. If a review application is allowed and the price of the bulk drug is raised and if in the meanwhile, the formulation had been ordered to be sold at a low price, it may result in consid- erable loss to the manufacturer. But on the other hand, if the review application turns out to be entirely without substance and has to be rejected and if in the meanwhile the formulation is allowed to be sold at a higher price, the consumer public suffers. Thus, the ups and downs of commerce are inevitable and it is not possible to devise a fool proof system to take care of every possible defect and objection. It is certainly not a matter at which the court could take a hand. All that the court may do is to direct the Government to dispose of the review application expeditiously according to a time-bound programme. All that the Government may do is to dispose of the review application with the utmost expedi- tion. But as we perceive the public interest, it is neces- sary that the price of formulation should be fixed close on the heels of the fixation of bulk drug price. Another submission of was that there was considerable delay in the disposal of the review applica- tions by the Govern- ", "880 ", "ment and that even now no orders had been passed in several cases. Accordingly to the learned counsel, the very delay in the disposal of review applications was sufficient to viti- ate the entire proceeding and scheme of price fixation. According to the learned counsel, the price of a bulk drug is dependant on many variable factors which keep changing very fast. If time is allowed to lapse whatever price is fixed, it soon becomes out of date. If review applications are not disposed of expeditiously the notifications fixing the prices must be struck down as having become obsolete. It is difficult to agree with these propositions. It is true that the price of a bulk drug is dependent on innumerable variables. But it does not follow that the notification fixing the maximum price must necessarily be struck down as obsolete by the mere passage of time. We agree that applica- tions for review must be dealt with expeditiously and when- ever they are not so dealt with, the aggrieved person may seek a mandamus from the court to direct the to deal with the review application within a time framework. We notice that in all these matters, granted stay of implementation of the notifications fixing the maximum prices of bulk drugs and the retail prices of formulations. We think that in matter of this nature, where prices of essential commodities are fixed in order to main- tain or increase supply of the commodities or for securing the equitable distribution and availability at fair prices of the commodity, it is not right that the court should make any interim order staying the implementation of the notifi- cation fixing the prices. We consider that such orders are against the public interest and ought not to be made by a court unless the court is satisfied that no public interest is going to be served. In the present case, on ex-parte interim order was made on April 20, 1981 in the following terms: ", "\"In the meanwhile on the petitioners' giving an undertakings to maintain prices both for bulk and formulation, as were prevailing prior to the impugned notification we stay implemen- tation of the impugned bulk drug prices as well as formulation prices.\" ", "Thereafter on November 25, 1981, a further order was made to the following effect: ", "\"After hearing learned counsel and with their consent, and arrangement has been worked out as on interim measure. We, there- fore, confirm till further orders the interim order made by us on April 20, 1981. The terms of the said order, that is on the undertaking given on behalf of the petitioners to maintain status quo on the prices prevail- ing prior to the issue of the impugned notifi- cation, the petitioners, through their counsel further given an undertaking to this court that, in case the petition is dismissed and the rule is discharged, the petitioners shall within eight weeks of the dismissal of the petition by this court, deposit in this court the difference in the prices of the formula- tions in question for being ...... equaliza- tion account. The petitioners, through their counsel further given an undertaking that in this court the petitioners would not contend or challenge the said amount if deposited, is not liable to be deposited under any law whatsoever. It is made clear that the under- taking is without prejudice to the petition- ers' right to take appropriate directions from if so advised in this re- gard.\" ", "No doubt the order as made on November 25, 1981 has the manufacturers On terms, but the consumer public has been left high and dry. Their interests have in no way been taken care of. In matters of fixation of price, it is the interest of the consumer public that must come first and any interim order must take care of that interest. It was argued by the learned counsel that the undertaking given by the parties lapsed with the disposal of the writ petition by and that it could no longer be enforced. We do not agree with this submission. Apart from the fact that an appeal is ordinarily considered to be a continuation of the original proceeding, in the present case, we notice that further orders of were also in contempla- tion and such further orders could only be if appeals were preferred to . We do not think that there was any doubt in anyone's mind that the matter would be taken up in appeal to whichever way the writ petitions were decided. We are of the view that the undertakings given by the parties in the present cases were intended to and do continue to subsist. ", "On the conclusions arrived at by us we have no doubt that the appeal must be allowed and the writ petition in dismissed. However, we think that it is necessary to give a direction to the Government to dispose of the review applications after giving a notice of hearing to the manufacturer. The hearing may be given within two months from today and the review application disposed of within two weeks after the conclusion of the hearing. Any information sought by the manufacturer may be given to him at the hearing in terms of what we have said in the judgment. is entitled to the costs of the appeal and the writ petition in . ", "It appears that although several writ petitions filed by different manufacturers were disposed of by by a common judgment, filed an appeal within the prescribed period of limitation against one of the manufacturers, only. This was apparently done under some misapprehension that it would be enough if a single appeal was filed. Later when it was realized that separate appeals were necessary, filed petitions for special leave to appeal against the other manufacturers also. As these petitions were filed beyond the prescribed period of limitation, petitions for condoning the delay in filing the petitions for special leave to appeal had to be and were filed. These applications are strenuously opposed by the manufacturers who contend the ordinary rule which is enforced in cases of delay namely that everyday's delay must be properly explained should also be rigorously enforced against the . It is con- tended that the is a well verse litigant as compared with private litigants and even if there is justi- fication of adopting a liberal approach in condoning delay in the case of private litigants there was no need to adopt such approach in the case of the . In cases like the present where parties have acted on the assumption that no appeals had been filed against them and have proceeded to arrange their affairs accordingly it would be unjust to condone the delay in filing the appeals at the instance of the . Though we see considerable force in the submission of , we think that the circumstances of the instant cases do justify the exercise of our discretion to condone the delay. Two important features have weighed with us in condoning the delay. One is that all the writ petitions were disposed of by a common judgment and an appeal had been filed in the principal case. The other is that it is a 'matter of serious concern to the public inter- est. We, therefore, condone the delay, grant special leave in all the petitions for special leave and direct the ap- peals to be listed for hearing on May 1, 1987. ", "P.S.S. Appeal allowed."], "relevant_candidates": ["0000064976", "0000086577", "0000260702", "0000342680", "0000345808", "0000391498", "0000549062", "0000720893", "0000751036", "0000801909", "0000827604", "0000913471", "0001074998", "0001276331", "0001305721", "0001758272", "0001766147", "0001960099", "0001963880", "0178640246"]} {"id": "0001666932", "text": ["JUDGMENT , J. ", "1. In this case the plaintiff, as purchaser of the equity of redemption, sued to redeem and recover possession of certain thikans originally mortgaged with possession by the plaintiff's vendors to the ancestors of defendants 2-6, who, on 12th April, 1893, had by Exhibit 55 transferred their rights to defendants 7--10, for Rs. 1,275. ", "2. The defendants contended that plaintiff could not recover possession without redeeming three bonds (Exhibits 57, 58 and 59) as well as the original mortgage of 1837 (Exhibit 56). The of first instance and the lower held that this contention was correct, but while the first mentioned limited the interest payable by applying the rule of damdupat the lower decided that full interest on the three bonds was payable by plaintiff at the rates in those bonds specified. Exhibit 55, the registered instrument whereby defendants 2-6 transferred their rights to defendants 7--10, recited that the property in question was held in mortgage from one under the mortgage bond of 1837 (Exhibit 56), and added that 's direct heirs had received more moneys from the original mortgagee and passed separate documents on stamped paper, and that if accounts were taken of the whole the amount would be very large, but that Ra, 1,275 had been accepted by the original mortgagees from defendants 7--10 and that in consideration of that sum all the mortgaged rights were accordingly sold to defendants 7--10. ", "3. The original mortgage deed of 1837 (Exhibit 56) was for Ra. 645-12-3, and possession was given thereunder to tine mortgagees, profits being taken by them in lieu of interest. This mortgage deed (Exhibit 56) is stated by the lower to be admitted by all parties as the mortgage referred to in the document (Exhibit 55) which transferred the original mortagee's rights to defendants 7--10. ", "4. The later documents (Exhibits 57, 58 and 59) were not specifically described in the defendant's assignment. They were not handed over by the original mortgagees to the defendants 7--10 either at date of Exhibit, 55 or at any time before suit; nor were they specifically described in the written statements put in for the defence. The written statement of defendant 2 refers only to a further charge on the mortgaged property made by the son of the original mortgagor, while defendants 7--10 in their joint written statement alleged that the original mortgagor's sons and daughters had passed other money bonds to , the original mortgagee. These s Exhibits 57 to 59 were not produced by defendants 7--10, but by the defendants 2-6. ", "5. Exhibit 57 purports to have been executed in March, 1864, by one , son of the original mortgagor, for Rs. 57-8-0. It is unregistered. It recites the fact that the mortgage of 1837 for Rs. 645-12-3 (Exhibit 56) had been executed by the obligor's father and purports to confirm it by an undertaking to pay the amount thereof together with the sum of Rs. 57-8 0, which is stated to have been advanced on the same security, and with interest on the Rs. 57-8-0 at 12 per cent. per annum. Exhibit 58 purports to have been executed by the said for Rs. 95 \"advanced on the same security \" in February, 1865, contains recitals and undertakings similar to those in Exhibit 57 with regard to the mortgage of 1887, and adds, \"I will not interfere with the land for twenty-five years.\" ", "6. Exhibit 59 purports to have been executed in March, 1866, by one , the daughter-in-law of the original mortgagor, for Rs. 90 as a charge on the same land, bearing interest at Rs. 18 per cent, and to refer to and confirm Exhibits 56 and 58. ", "7. All these three documents purporting to be more than thirty years old, the question arose whether they were admissible as produced from proper custody. ", "8. For the appellants it is contended that these Exhibits 57 to 59 required more proof than had been adduced, and could not be accepted merely on the ground of their alleged antiquity and of their production by defendants 2--6; that Section 90 of the Indian Evidence Act, 1872, was therefore inapplicable to them, and that under the ruling in (1880) 6 Cal. 209 Exhibit 59 at least required proof of execution by the person , whose mark alone purports to have been affixed thereto, and further that all the three documents, as purporting to extend the interests created by Exhibit 56, were compulsorily registrable and inadmissible for want of registration, and in any case were ineffectual by reason of Section 50 of the Registration Act, 1877, as against the registered deed under which the plaintiff claims, and that plaintiff as a bona Me purchaser without notice could not be affected thereby. ", "9. In support of the first of these contentions, viz., that the documents were not sufficiently proved by evidence of production from proper custody, the rulings in v. (1872) 18 Cal. W.R. 435 and v. (1873) 21 Cal. W.R. 20 were cited for the appellants. The first of these decisions was passed only a few days after the present Evidence Act of 1872 came into force, makes no reference to that enactment and refers to the rule relating to ancient documents as one of English Law to be applied subject to conditions and precautions which are suggested in English text books, such as Pitt Taylor and , and which have not boon embodied in Section 90 of the modern Indian Evidence Act . The later ruling practically accepts as Sufficient the test required by Section 90 of the Indian Evidence Act, which, however, is, not there cited. ", "10. Now, the section itself admits a presumption of the genuineness of documents purporting to be thirty years old, if produced from custody proved to have had a legitimate origin or an origin the legitimacy of which the circumstances of the case render probable (vide explanation 2 to Section 90 ). It is not necessary that the document should be found in the best and most proper place of deposit Bishop of Meath v. Marquis of (1836) 3 . N.C. 183 p.p. 201, 202, and the section read with the explanation attached thereto seems be insist only on a satisfactory account of the origin of the custody and not on the history of its continuance. Possibly the origin of the custody was alone regarded as material, because it is intelligible that ancient documents may be overlooked and left undisturbed notwithstanding a transfer of old, or creation of new, interests. In the present instance, it is true, Exhibits 57,58 and 59 ware not mere links in the chain of title, but the basis of rights alleged to have been transferred, and it might have been expected that they would have been handed over at the transfer of the mortgagee's rights. But the circumstance that they were, not so handed over affects rather the history of the subsequent transactions than the probabilities as to the origin of the custody. The question of proper custody is no doubt one which would in England be left to the Judge and not be the jury: on Evidence, Section 22 . But this does not prevent the question from being one entirely dependent upon findings of fact, for, as stated by (p. 37) \"the question of admissibility must be exclusively decided by the Judge, however complicated the circumstances may be, and though it may be necessary to weigh the conflicting testimony of numerous witnesses in order to arrive at a just conclusion.\" Whether it were credible or not that the documents in question were originally left in the custody of the mortgagee in whose favour they were executed appears to me to be as much a question of fact as the question whether they were executed by the alleged obligors or not and even if it were a question of law, it would, I think, be impossible to hold that the origin of the mortgagees' custody was not both legitimate and probable. The further question whether the alleged subsequent history of those documents was sufficient to throw suspicion on their authenticity and rebut any presumption arising under Section 90 was, I think, undoubtedly one of fact with which it is impossible to interfere on second appeal regard being had to the decision of in v. (1890) 18 Cal. 23. In these circumstances, I think, there is no alternative but to accept the finding of the lower that these Exhibits 57 to 59 were produced from custody which is proper within the meaning of Section 90 of the Evidence Act, and that they were duly executed by the persons by whom they purport to have been executed. The objection that Exhibit 59 bears only the mark of the alleged obligor appears to have no weight in face of the concluding words of the section, for it is not contended that the document does not purport to have been executed by the person whose mark it purports to bear, and this, in the case of a document falling under Section 90 , is sufficient, although had it been necessary to prove execution, it would have been necessary to prove the identity of the executing party. ", "11. The question whether , who purports to have executed Exhibit 59, was competent to create a charge upon the property to be affected thereby, does not appear to have been specifically raised in the memorandum of this appeal or in the lower or even in instance, and should not 1 think, be entertained now. ", "12. Next it is contended that none of the documents in question are admissible, as they were all compulsorily registrable. ", "13. So far as Exhibit 57 is concerned this contention must necessarily fail, inasmuch as it purports to have been executed in March, 1864, and the Registration Act XVI of 1864 did not come into operation in this Presidency (vide Section 71 ) until 1st January, 1865. ", "14. The other two documents, Exhibits 58 and 59, being respectively dated February, 1865, and March, 1866, both come within the operation of Act XVI of 1864 and, it is urged, are both compulsorily registrable under Section 13 thereof, as though the consideration appearing on the face of the documents is in each case under Rs. 100, each of them undertakes liability for the previous deed and provides for the redemption of that mortgage for Rs. 645. In this connection appellants rely on the unpublished case of (1883) P.J. p. 34 which distinguishes the case of an agreement undertaking a liability for a mortgage not otherwise binding, from the case of a mere recital or declaration of a fact such as in et al. v. (1881) 5 Bom. 232 wag held not to render registration necessary. The case of v. (1883) P.J. p. 95 was further relied on as showing that Exhibit 58, which postpones the date at which the original mortgage of 1837 should be redeemable, limited the equity of redemption under that mortgage, and therefore required to be registered, and being unregistered could not affect the equity of redemption. As to the first of these cases v. , it is to be noted that the mortgages therein related to lands that were wakf and were not effected for musjid repairs, so that \"it was admitted, under these circumstances, the mortgages could not be supported against the religious endowments.\" And it was for this reason that it was sought to charge the sons of the original mortgagor by the agreement entered into by them subsequently in an unregistered writing to pay off the mortgages, and it was also endeavoured to use that agreement as an estoppel which would prevent the plaintiffs from pleading that they were not bound by the first mortgage. It was because the plaintiffs were not, ex concessis, bound by the first mortgage, as it could not be supported against the religious endowment, that it was necessary to prove the agreement against them, and for this purpose it was inadmissible in evidence inasmuch as it was not registered. But in the present instance there is no plea that the plaintiff is not bound by the first mortgage. He sues to redeem it and has never disputed liability to pay it off. The subsequent documents, Exhibits 58 and 59, were not required as evidence to prove that liability and are not inadmissible to establish the liability for the sums respectively secured by them, viz., Rs. 95 and Rs. 90. They do not, therefore impose or create, or in any way affect, the undisputed liability for the mortgage of 1837 which arises aliunde, and are a mere declaration of the fact of a liability which the plaintiff has throughout made no attempt to dispute. In the case of v. (1883) P.J. p. 95 cited above, the liability of the for their father's mortgage was unquestioned, but their father's agreement to pay o off a subsequent money bond for Rs. 175 before paying off the mortgage was held inadmissible as an unregistered document. And in holding it inadmissible the case of Govind v. (1884) P.J. p. 254 was cited. A reference to that last cited case shows that the reason for holding such subsequent document inadmissible was that it had the effect of limiting 2 the interest of the mortgagor to the extent of Rs. 100, and therefore required to be registered. This ground cannot apply to Exhibits 58 and 59, all of which limit the mortgagor's interest to an extent less than Rs. 100. These cases appear, therefore, inapplicable for the purpose of showing that these documents were compulsorily registrable. They did not operate to impose liability for the mortgage of 1837, which liability plaintiff admits, while he disputes the existence of the agreements which Exhibits 58 and 59 purport to evidence. And they do not limit the rights of redemption under the mortgage of 1837 to the extent of Rs. 100. It is possible that under the recent rulings in v. (1902) A.C. 24 and v. (1902) 2 Ch. 479 the agreement in Exhibit 59 to postpone the time for redemption of the mortgage of 1837 for twenty-five years might have been regarded as void on the ground that it clogged the equity of redemption. But no such point has been taken and the time has long passed at which it might have been taken. The documents Exhibits 57, 58 and 59 all purport to be fresh charges on the same security, and are therefore otherwise free from such objection. ", "15. The next point taken for appellant is that the provisions of Section 50 of the Registration Act, 1877, apply to these documents Exhibits 57, 58 and 59, viz., that every registered document of the kind mentioned in Clauses (a), (b), (c) and (d) of Section 17 , and therefore Exhibit 56 which falls within that description, shall take effect as regards the property comprised therein, against every unregistered document relating to the same property, and therefore as against such documents as Exhibits 57, 58 and 59. To this contention respondents objected that 10 had not been raised in the below or in the memorandum of appeal in this . The objection is met by appellant citing the case of v. (1892) 17 . 100 and v. (1892) 17 . 303 as the new point is purely a question of law, arising on the findings of the below and not affected by any facts outside these findings. The point was, therefore, allowed to be fully argued. And the wording of the section is so clear that the respondents were unable seriously to contend that its provisions would not be fatal to their attempt to charge the property with liability in respect of the unregistered documents (Exhibits 57, 58 and 59) apart from the operation of the equitable doctrine of notice. This grave ground of objection, indeed forms the really important matter of contest in this appeal. The appellant contends that he is a purchaser bona fide without notice, and on its being objected that Exhibit 55 is a registered document containing a recital of incumbrances, it is urged for appellant that registration is at most constructive notice, and that the doctrine of constructive notice cannot be so extended as to cover unregistered documents under which the holders of registered documents derive title, and v. (1896) 22 . 213 is cited, as authority. In that case the plaintiffs were out of possession and had purchased under a registered deed from a vendor whose title deed was unregistered, and it was held that plaintiff and his grantors were mere strangers be the land, unless they could rely on the unregistered conveyance which could take no effect upon the property when brought into competition with the registered conveyance to the defendant. And when it was argued that the defendant had notice of the unregistered document through the registered document, the held that it would be pushing the doctrine of constructive notice beyond all bounds to held that it is notice of the unregistered documents under which the holders derived their title. If, then, in this case the question rests merely on the competition between registered and unregistered documents, the ruling in v. (1896) 22 . 213 would be decisive against the defendants. Appellant relied also on (1876) 2 All. 851 a Full Bench ruling of the Allahabad High , where the plaintiff sued unsuccessful to recover money by sale of properties hypothecated on unregistered bonds against a defendant to whom the same property had been transferred by registered deed. The case of (1885) 1 Cal. 661 also cited for appellant, is essentially to the same effect. v. (1888) 13 . 229 v. (1881) 5 . 442 and v. bhamabai (1882) 6 . 490 were also cited, but appear irrelevant. The appellant further cites the case of v. (1892) 16 Mad. 301 and the case there quoted of v. (1881) 17 Ch. D. 353, 2 pp. 357-358 as authority for the position that constructive notice of a deed is constructive notice of its contents, provided the deed is a deed relating to the title and forming part of the chain of title. The case of v. (1881) 17 Ch. D. 353, 2 pp. 357-358 however, on a careful perusal appears to me in no way to support the appellant's argument. For that case relates to the duty of a purchaser or lessee to look into the chain of his vendor's or lessor's title, and with special reference to the cases of v. (1841) 1 Here 43 and v. (1870) L.R. 9 Eq. 678 appears to exonerate the purchaser or lessee from the duty of enquiry as to a document of which he has contructive notice, only in cases where he might get a complete chain of title without any notice of that document where he would be justified in resting assured that it could not affect him. But , , was careful to say, \"that line of cases has no bearing at all on a case where you know the deed does affect the land.\" For reasons to be stated below, however, the cases of (1892) 16 Mad. 301 and v. (1881) 17 Ch. D. 353, 2 pp. 357-358 appear to me lay down no principle on which the plaintiff in this case could be relieved from the duty of enquiry. The arguments for the appellant throughout assume that the plaintiff was affected only by the constructive notice which might have been afforded by Exhibit 55, the registered documents under which the defendants claimed. Thus they rely upon (1881) 7 Cal. 199 which is a case in which the held that the circumstances wore not sufficient to fix the plaintiff with constructive notice or to put him upon enquiry. And the case is spoken of as falling within the language of in v. (1872) 11 Beng. L.R. 53 : 18 Cal. W.R. 166 wherein the principle appropriate rested upon the equity that \"where, one man allows another to hold himself out as the owner of an estate, and a third person purchases it, for value, from the apparent owner, in the belief that he is the real owner, the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title,\" unless he can show direct notice, constructive notice or circumstances putting the purchaser on an enquiry. It is clear that such a case can have no bearing in the present instance. In the case cited there was no actual notice, and the vendors had been placed in such a position 2 as to be the apparent owners, and it was with reference to those circumstances that the Calcutta High held that unless there is wilful or fraudulent turning away from enquiry, the doctrine of constructive notice would not apply. The case Re Bright's Trusts (1856) 21 Beav. 430 was also referred to. That relates to a charge without notice on a chose in action, and it appears that except so far as the actual notice was given, subsequent incumbrancers could have no knowledge whatever of the existence of any prior charge. In that case the charge was one on a fund in the hands of trustees, and notice was given only of one of two charges created in the same deed, that for the life policy being anmentioned, and that the express notice given implied that no other charge was alleged. It is clear that the principles of that case apply only to the duty of enquiry arising in cases where, apart from constructive notice, there is nothing to put the purchaser on enquiry. In the present instance the appellant has put his case as if there were nothing but the constructive notice furnished by the registered deed of assignment to the defendants 7-10 (Exhibit 55), and they rely, therefore on the inadequacy of such notice as an all-sufficient protection. For this purpose they lay stress on the cases already cited of v. (1896) 22 . 213 and v. (1892) 16 Mad. 301 and on the ruling in Inderdawan Pershad v. Gobind Lall Chowdhry (1896) 23 Cal. 790 where approving . it was held, notwithstanding bay decisions, that mere registration is not notice within the meaning of Section 81 of the Transfer of Property Act such as to put on a purchaser responsibility for abstention from enquiry. And if the present case rested only upon the question whether Exhibit 55 was constructive notice of Exhibits 57, 58 and 59, I think that the authorities cited on behalf of appellant would be ap(1891) 15 Mad. 268posite on the point whether the plaintiff was bound by the incidental reference to those documents. But the case does not rest there. For, the defendants were admittedly in possession. And it has been held in a long series of cases in this that possession is notice, sea especially v. (1880) 6 . 168, v. (1883) 9 . 427, v. (1879) 4 . 129, v. (1882) 6 . 193 at p. 201, v. (1872) 9 , v. (1867) 4 . H.C. Rep. 69 (a.c.), v. (1869) 6 at p. 62, v. (1872) 9 . H.C. Rep. 151 f.n., v. Ibid p. 147. ", "16. The case of (1888) 12 Bom. 569, it may be noted, is not really opposed 'to this principle, for the ratio decidendi there proceeded upon the fact that the plaintiff, the prior unregistered mortgagee, was not in actual possession and that his mortgagor was, and that person subsequently dealing with the property had no reason to suppose that he was in possession otherwise than as owner. But in the present instance the mortgagee was in possession and apparently had been continuously from 1837. And therefore the plaintiff had every reason to suppose that there was an incumbrance on the property and does not profess to have supposed that there was not \"Possession,\" according to the ruling in v. (1880) 6 Bom. 168 has been deemed by Hindu and Mahomedan laws, as interpreted in this Presidency, to amount to notice of such title as the person in possession may have and any other person who bakes a mortgage or other charge upon, or purchases, immoveable property, without ascertaining the nature of the claim of him in possession, does so at his own risk. This is so in England also. See v. (1811) 17 Vesey 433 and the other cases in which its authority has been recognised, collected in (page 1052, edition 11th) and 2 White and Tad or a Loading Cases in Equity, page 61 et seq.\" This principle is quite distinct from that which was adopted in the same case, on the authority of American cases, as to registration being in itself notice to subsequent purchasers and mortgagees, and appears from note 2 on page 188 of the judgment so be based on the remark of , V.C. in v. (1841) 1 Here 43 vide p. 60 that \"possession is prima facie evidence of a seisin in fee.\" In the passage preceding that remark the Vice-Chancellor stated as a proposition which he did not dispute, \"that if a person purchases an estate which he knows to be in the occupation of another than the vendor, he is bound by all the equities which the person in such occupation may have in the land.\" v. (1811) 17 Vesey 433 then spoken of \"as an extreme case,\" has, as observed in v. (1869) Bom. H.C. Rep. 59 at p. 62, been repeatedly acted upon. The Full bench case of v. (1880) 6 Bom. 168 was followed by Sir and Mr. Justice in v. (1883) 9 Bom. 427, where it was said (pages 428-9), \"assuming that the defendant was in possession when the mortgage deed was executed be plaintiff or that plaintiff had otherwise notice of defendant's purchase, it is dear, that the latter could derive no advantage from the registration of his mortgage.\" This was with special reference to Section 50 of the Registration Act of 1877 and does not rest on the doctrine of constructive notice by registration. v. (1882) 6 Bom. 515, dealing with Section 50 of Act XX of 1866, was cited as to similar effect. v. was followed in v. (1885) 10 Bom. 105, v. (1882) 6 Bom. 193 is another ruling laying down that possession is notice to all subsequent intending mortgagees or purchasers of the title of the party in possession. Of the earlier oases--prior to the Registration Act of 1877- v. (1872) 9 BOm. H.C. 121 was apparently approved in v. (1867) 4 Bom. 89 at p. 92, though distinguished from a case where the prior unregistered document being compulsorily registrable was not admissible in evidence at all. In all the Bombay decisions cited above, the reason for withholding preference from the subsequent registered purchase was based, not on the doctrine that registration was constructive notice, for the prior alienation was in most of them unregistered, but upon the long established and undisputed principle that a purchaser is always bound by all the equities of a third party in possession, because possession presupposes bible and therefore is notice which ought to puts a purchaser on enquiry. In all the cases relied on by appellant as to the inadequacy of constructive notice of documents mentioned in a registered deed, this element of the prior purchaser being in possession was wanting, and in such cases mere registration, as held in Inderdawan Pershad v. Gobind Lal (1896) 23 Cal. 790 and Shan 2 . (1891) 15 Mad. 268, was therefore deemed insufficient. The principle on which possession is recognised as an element for consideration in cases of competing purchasers, appears to be quite independent of the now discredited doctrine as to the necessity of possession to the validity of a sale under Hindu and Mahomedan laws. For that principle rests on the English equitable doctrine of notice. It seems hardly necessary to observe that in v. (1893) 18 Bom. 332 possession failed to give priority because it was obtained with constructive notice of a prior registered incumbrance, so that the decision in no way questions the effect to be given to possession under a deed prior to that of a rival purchaser. The operation of registration as constructive notice has been questioned by the other High Courts. (1892) 16 Mad. 148 and the cases there cited of Nani Bibee v. and Ors. (1884) 10 Cal. 1073 show that the doctrine of notice by possession has been regarded as standing on another and a sounder footing. regards possession as \"very cogent evidence of notice\" ( case), and in (1886) 8 All. 540 refused possession to a mortgagee under a registered possessory mortgage, as against a prior unregistered mortgage accompanied with possession, notwithstanding the provisions of Section 50 of the Registration Act, 1877. This ruling has been more recently referred to in the Allahabad case of v. (1896) 19 All. 145, which cites with apparent approval the Bombay case of v. (1885) 10 Bom. 105, which is based on v. (1882) 6 Bom. 515 and (1886) 13 Cal. 667, which accepts the principle laid down in v. (1885) 11 Cal. 667, v. (1880) 6 Cal. 534, and by in v. (1879) 4 Bom. 126. ", "17. It is true that the notice referred to in these cases does not in each instance appear to have consisted solely in possession. But the general consensus of opinion of all the , following English decisions, appears to be that possession is at least very cogent evidence of notice which a purchaser cannot with safety disregard, and that Section 50 of the Registration Act, 1877, does not do away with the effect of notice, in favour of the registration to which ceteris paribus it gives preference. It appears to be the result of the Bombay decisions that no purchaser can protect himself merely. by registering his document of title, against the title of a person in possession of the subject-matter, and if he ignores that possession and fails to make inquiry into its nature and origin, he will be affected by all the equities which the person in possession is proved to have. This being the case, I think that when the plaintiff found that the property of which he bought the equity was in the possession of the defendants, it was for him to enquire into the nature of his vendor's title and the extent of the liabilities to which he was subject. It was contended for respondents that he had actual notice in the shape of direct information. That contention was not substantiated. But he had full knowledge that there was some incumbrance apart from the registered assignment (Exhibit 55), to defendants 7-10. He contends that at most he had constructive notice through that registered document, and that it was not explicit or binding as to Exhibits 57, 58 and 59. But the question is whether he can shield himself under that document as affording him misleading information with regard to his vendor's title. I do not think he can. For the document (Exhibit 55), though not explicit, does mention the further charges and could not relieve the plaintiff from further inquiry. Moreover, it was not the basis of his vendor's title and if there had been no such document in existence, and if defendants 2-6 had never assigned their mortgage rights, the plaintiff rinding them in possession would have been no less bound to inquire as to the title of his vendor and the manifest incumbrance on it. And this duty would not have been fulfilled by his assuming, on the discovery of one of the liabilities attaching to the property, that there were No. others to support the claim of the person in possession. That is to say, he was not entitled, merely because he may have known of the mortgage of 1837, to abstain from all further inquiry and profess that he could not be bound by any other title deed, however genuine, in favour of the person in possession. The recent case of v. (1902) 1 Ch. 428, 433 seems to make this clear in the passage which says: \"If a purchaser or mortgagee has notice that the vendor is not in possession of the property, he must make inquiries of the person in possession, of the tenant who is in possession, and find out from' him what Ms rights are, and, if he does not choose to do that, then whatever title he acquires as purchaser or mortgagee will be subject to the title or right of the tenant in possession.\" And it seems to me that if the Exhibits 57, 58 and 59 are genuine, as the lower has found as a fact they are, the plaintiff is no more exonerated in respect of those documents than he would have been if they had been the only liabilities justifying the possession of the defendants. In the face of Exhibit 55 it would be difficult (if the plaintiff relied on that document as excusing him from further inquiry) to say that the plaintiff had no reason, because he had notice of Exhibit 55, to make any further inquiry. It showed at least that a charge very largely in excess of Rs. 645 was alleged in favour of those in possession, and was, therefore, no excuse for stopping all the inquiry which, had no such document existed, the plaintiff would have been bound to make. The case has been obscured, I think, by arguments as to constructive notice given by Exhibit 55. But it was defendants' possession which gave the real ground for inquiry, and Exhibit 55 would not entitle plaintiff to dispense with any inquiry which he would have been bound to make if that document had never been passed. The case, therefore, seems a very simple one when reduced to its ultimate issues. The lower has found that \"on the 3rd December, 1897, plaintiff purchased the equity of redemption from defendant 1 for Rs. 50,\" and \"that the defendant 1 had \"mortgaged with possession.\" It was then for the plaintiff to find out what the state of the title was, and if he did not do so, he would be bound by all the rights proved in favour of the defendants in possession. The lower has found as a fact what those rights were, holding Exhibits 57, 58 and 59 genuine. That finding on second appeal is, I think, binding, and though the non-delivery to, and non-production by, the assignees of those exhibits may be ground for suspicion, the finding cannot be interfered with, and it is conceivable that the defendants 2-6 being descendants of the original mortgagees may not at first have been able to lay their hands on those documents, which were of minor importance, and were possibly disregarded at date of the assignment when no question of redemption had been mooted. Had the plaintiff insisted on information being furnished, they might possibly have been brought forward earlier. But there is no allegation that he ever made inquiry and was refused information as to their existence. They have been found genuine. And I think the plaintiff could escape liability for them only by showing that he had made inquiry and had no reason on inquiry to believe in their existence. He cannot now urge that defendants could not or would not have disclosed them on inquiry made. The utmost he can claim is to show that they ware actually suppressed or that he was misled on his applying to the defendants in possession for information. This is not a point which seems to have been considered to the s below. The lower appears to have treated the case as one in which no such suggestion had been raised in argument. And neither has dealt with the case at all with reference to the liability of the plaintiff as a purchaser, who having notice of defendants' possession had abstained from inquiry into the title. The question of limitation as to Exhibits 57, 58 and 59 does not appear to have been urged, those documents being payable according to their tenour, it would seem, only when redemption was claimed, so that till redemption was sought time would not begin to run in respect thereof under Article 132 , and the point does not seem to have been taken in the lower s. The only real questions in the case appear to be (a) whether the defendants' possession was notice which bound plaintiff to inquire, (6) whether if this be so, he could rely on Section 50 of the Registration Act as giving him an absolute priority which could not be affected by the equitable doctrine of notice arising from possession in the defendants, and (c) whether, if the plaintiff cannot rely on Section 50 of the Registration Act as giving him absolute priority, but was also bound by the possession of the defendants to inquire into the nature and extent of their rights, he had made due inquiry and been misled, or put of his guard or been refused information altogether. This last question is one of fact, which, owing to the view the lower s took of the case, was not inquired into and decided, and I would, therefore, send the case back to the lower for a decision on the above question, viz., whether the plaintiff did inquire and, if so, whether he was misled, put off his guard or refused information. Return to be made in two months. ", "Aston, J. ", "18. The main question in this case is whether appellant (original plaintiff) should be treated as fixed with knowledge of the contents of Exhibits 57, 58 and 59 when he purchased the plaint lands in 1897 from defendant II. But certain features in the case require preliminary consideration: ", "On the 17th December, 1837, the grandfather of defendant 1 mortgaged the plaint lands to one , the ancestor of descendants 2-6, for Rs. 648-12-8, the mortgage being usufructuary and the profits to be enjoyed in lieu of interest. ", "19. The plaintiff , on 3rd December, 1897, by registered deed (Exhibit 78) purchased she plaint lands from defendant 1 and became owner of the equity of redemption. He brought this suit to redeem this one mortgage and recover possession on payment of Rs. 645-12-3, the amount of the said mortgage which ha Bought to redeem. ", "20. Defendants 2-6, descendants of , replied that they had transferred their rights to defendants 7-10. ", "21. Defendants 7-10 disputed the plaintiff's purchase of the equity of redemption, and replied farther that the original mortgagor's sons and daughters had passed other \"money bonds\" to and that they ought to be parties to this suit: and defendants 7--10 further pleaded that they had purchased the plaint lands from defendant 2 on 12th April, 1893 (under Exhibit 55, a registered document), for Rs. 1,275 and had spent Rs. 1,225 on improving the land, and that the total money due to them on the said mortgage was Rs. 2,500 which ought to be paid to them. ", "22. It will be observed that Rs. 2,500 is exactly Rs. 1.275 plus Rs. 1,225 and that there is no mention, in this defence of defendants 7--10, of any claim in respect of any other mortgage or charge. There is no mention of the number, dates or amounts of the other bonds vaguely referred to: they are expressly called \"money\" bonds, and the plea raised in respect of them is not any claim to increase the redemption money payable, but a plea that the sons and daughters of the original mortgagor should be made parties. ", "23. Nor is there any mention in the issues framed in the suit of any mortgage other than the one which the plaintiff sued to redeem, that is, the mortgage of 17th December, 1837, for Rs. 695-12-3. ", "24. The issues framed were: ", "1. Whether or not the plaintiff's assignment is proved? ", "2. It not, whether or not the plaintiff has a right to bring this suit? ", "3. What amount is due on the mortgage sought to be redeemed, including cost of repairing and improving the property and the payment of dast thereon by ? ", "4. If redemption is to be allowed, on what terms can it be allowed? ", "5. To what relief, if any, is the plaintiff entitled? ", "25. The Subordinate Judge first decided that the plaintiff 's purchase of the equity of redemption (Exhibit 78) was not proved, and dismissed the suit. This decree was reversed in appeal on the finding that \"the plaintiff is entitled to redeem the mortgage in question,\" and the suit was remanded for findings on the other issues and a fresh decision according to law. ", "26. After this remand the Subordinate Judge decided, under the third issue already repeated above, that \"Rs. 1,130-12-3 are due on account of the mortgage sought to be redeemed,\" and decreed redemption on payment of this sum with coats in proportion to defendants 7--10. ", "27. The above amount, Rs. 1,130-12-3, is in fact made up of Rs. 645-12-3 on account of the mortgage sought to be redeemed and Rs. 242-8-0 plus interest Rs. 242 8-0 on account of three other mortgages not mentioned in the pleadings or issues, disputed by the plaintiff and introduced into the case in the following manner. ", "28. The deed (Exhibit 55) of 12th April, 1893, under which the defendants 7--10 purchased from defendant 1, , the rights of the original mortgagee for Rs. 1,275, has been translated and runs as follows: ", "Sale-dead. The 11th of Chaitra Vadya in Shake 1815, the 12th of April, 1899, the cyclical name of the year being Vijaya, On this day (this) sale-deed is passed in \"writing to , , and , Chambhars, residing at Panchanadi, by , residing at Kalthare, taluka Dapoli, at present at Ratnagiri, I give in, writing as follows: I have this day taken from you Rs. 1,275, namely, twelve hundred and seventy-five in cash. (In consideration) for the same (1) sell the following property situate at the village of Kashe Panchanadi, sub-district Dapoli, district Ratnagiri. The said property has been with me (i.e., my grandfather) for vahivat under a mortgage by a deed dated the 9th of 1759 (21st December, 1887) from the deceased Bhaudin valad Kutubudin Mukadam of Kolthare for the principal sum of Rs. 645-12-3 and on the security of the same (property) his direct heirs took (i.e., borrowed) from me (from my father) further sums of money and executed documents in respect thereof on stamped papers. In addition to this I made repairs, &c, to the said for which money is due to me under the terms of the original deed on account of expenses. Making up the whole account including this (last) item, a very large sum becomes due to me. However, on receiving from you now the amount above mentioned, I have sold to you my right as mortgagee of this property.. The said property is as follows.--Survey No. 87, sub. No. 1, area 2 acres and 21 gunthas, assessment Rs. 16-8. I have sold the mortgage right of this property to you as stated above. You should therefore carry on the vahivat thereof from generation to generation through sons, grandsons, &c., pay the Government assessment and take the hot season and rainy season profits in lieu of interest. The profit or loss is yours. Should the owner come to you to pay the mortgage amount within the period prescribed by law, you should receive the amount in accordance with terms of the deed executed by him, and make over the property to him. If thereby you receive an amount more or less than the amount now received by mo, the same shall be yours. Neither myself nor my kinsmen have anything to do with the same. Should any obstruction be caused by my kinsmen as regards the said property, I will remove the same. Also, I shall get the khata in respect of assessment transferred (to you). I have duly executed this sale deed, of my own free will and pleasure. The handwriting of , inhabitant of Ratnagiri. ", "29. It will be seen that there is mention of further sums having been borrowed on the security of the same property, bat the further documents as to which no particulars are given as to number, date or amount are not called mortgage-bonds, but are called \"documents on stamped papers.\" Mention is made of an account being made up which by including expenses for repairs (since 1837) amounted to a \"very large sum.\" There is no express statement that the debts subsequently incurred were assigned to the persons in whose favour Exhibit 55 was passed, and the words \"I have sold to you my right as mortgagee of this property,\" read with the express mention of the mortgage of 1837 and the passage later on. \"Should the owner come to you to pay the mortgage amount within the period prescribed by law, you should receive the amount in accordance with the terms of the deed executed by him and make over the property to him,\" are sufficiently general to leave room for contention that this was a sale of the mortgage rights under the mortgage deed Exhibit 56 of 1837, and nothing more. It was contended for the appellant (original plaintiff) that this was clearly what defendants 7--10 understood as shown by their written statement and defence to this Suit, already described above, as well as by the fact that none of these further bonds called \"money bonds\" by defendants 7--10 were made over by defendant 1 to defendants 7--10. ", "30. It appears, however, that-at the hearing of the suit; there were produced from the custody of defendant 2, (who, it will be remembered, was the person who executed Exhibit 55), three bonds purporting to be more than thirty years old but unregistered. ", "31. they are Exhibits 57, 58 and 59. They purport to create further charges on the property mortgaged in 1837, and to be dated March 1864, February 1865, and March 1866, and two of them to have been executed by , father of defendant 1, and the third by , a daughter of the original mortgagor, the grandfather of defendant 1. The first is for Rs. 57-8-0, the second for Rs. 95 and the third for Rs. 90--in all Rs. 242-8-0--and the rate of interest fixed in each is twelve per cent. ", "32. The Subordinate Judge, without discussing the custody from which these three unregistered documents had come into considered them proved by the evidence of witness 61 and because defendant 2 (who has no interest in the plaint property) admits all these mortgages in his examination (Exhibit 60). ", "33. The Assistant Judge who decided the appeal does not mention the evidence of witness Exhibit 61, but held these three bonds (Exhibits 57, 58, 59) to be genuine, and to be in the identical bonds mentioned in Exhibit 55 without number, dates or amounts. His reasons for coming to this conclusion as far as can be gathered from his judgment recorded are: first, that defendants 7--10 are illiterate men of the lowest caste, while defendants 2-6 are educated Brahmins who probably took advantage of the ignorance of defendants 7-10, and therefore retained Exhibits ,57, 58, 59 for some purpose of their own instead of handing them over to defendants 7--10, as they must have known perfectly well that they should have done; secondly, because Exhibit 55 makes mention of other stamped documents passed by direct heirs of the original mortgagor, and the evidence that there were any improvements which could have raised the purchase value of the mortgage rights from Rs. 645-12-3 to Rs. 1,275 in Exhibit 55 is unsatisfactory. ", "34. The Assistant Judge, holding that the rule of damdupat does not apply where the original mortgagor was a Mahomedan, varied the decree in the cross appeal of defendants 7--10 by raising the Rs. 485 calculated by the Subordinate Judge as due under these three bonds to Rs. 1,192-7-7, making the total amount payable by plaintiff for redemption Rs. 1,838-5-10 instead of Rs. 1,130-12-3. ", "35. It has been contended for the appellant (original plaintiff) that the lower appellate Court's finding of fact that Exhibits 67, 58, 59 are genuine documents is vitiated by the method by which this conclusion is arrived at, beause the Assistant Judge seems to have dispensed with formal evidence as to their execution by treating them as ancient documents coming from proper custody and by drawing the presumption permissible under Section 90 of the Evidence Act (I of 1873) as to handwriting, execution and attestation. ", "36. This contention would be sound if the Assistant Judge had really adopted such a presumption, under Section 90 of the Evidence Acts, as the basis of his decision that Exhibits 57, 58, 59 are genuine. Illustration (a) to Section 90 says: ", "A has been in possession of landed property for a long time. He produces from his custody deeds relating to the land showing his titles to it. The custody is proper. ", "37. The \"particular case\" in the present suit is the exact converse. The defendants 7--10, under the new case they set up at a later stage of the suit, claimed to have become assignees under Exhibit 55 passed by defendant 2 of the three several debts charged upon the plaint property by Exhibits 57, 58, 59, and they produced the latter three documents from the custody of defendant 2 when, according to the case for defendants 7--10, these three documents (Exhibits 57, 58, 59) ought to have been produced from their own custody if these particular charges became assigned to them under Exhibit 55 by defendant 2 in April, 1893. ", "38. But though the Assistant Judge describes the custody of defendant 2 as \"not improper,\" he seams to have merely meant that he preferred to s believe that defendant 2 had overreached defendants 7--10 and had improperly retained documents he should have handed over to defendants 7--10, rather than believe that Exhibits 57, 58 59 are fabricated or that other bonds--simple money bonds--have been suppressed by defendants 7-10. ", "39. In fact, the judgment says that Exhibits 57, 58, 59 should have been handed over by defendant 2 to defendants 7--10 when Exhibit 55 was passed: in other words, the proper custody in this particular case for Exhibits 57, 58, 59 is the custody of defendants 7--10 from which they were not produced. There cannot, I think, be two different proper custodies for any document at a given time in any particular case. I agree, therefore, with the view of the lower that if Exhibits 57, 58, 59 had been produced in this particular case from the custody of defendants 7--10 they would have come from proper custody. They did not come from the custody of defendants 7--10, who, therefore, cannot obtain advantage from the provisions of Section 90 of the Evidence Act. The explanation suggested by the Assistant Judge as to why they came from defendant 2 may help to remove suspicion as to their being genuine, but it does not relieve defendants 7--10 of the necessity of proving Exhibits 57, 58, 59 independently of the provisions of the said section. Nevertheless, I read the judgment of the lower as recognising this and as basing the finding of fact, that these unregistered Exhibits 57, 58, 59 are genuine and are the identical documents on stamped papers referred to in Exhibit 55 and were assigned by defendant 2 to defendants 7--10 upon the evidence actually recorded in the suit, such as it is. ", "40. There remains the question whether it was rightly decided that the appellant is bound to pay the charges created by Exhibits 57, 58, 59 in addition to the mortgage debt of Rs. 645-12-3 before he can recover possession of the plaint property from defendants 7--10. ", "41. The plaintiff's purchase from defendant 1 of the equity of redemption in 1897 by Exhibit 78 is registered, whilst Exhibits 57, 58, 59 are not registered. Section 50 of the Registration Act (III of 1877) \"confers priority on documents required to be registered and accordingly registered since Act III of 1877 was passed over all prior unregistered documents of an antagonistic character\" : v. (1895) 20 Bom. 158. But \"in spite of the large words of the exacting part this Court has consistently limited them to the cases where the subsequent purchaser has no notice of the prior unregistered conveyance\": v. (1893) 18 Bom. 355. The respondent's pleader, relying, therefore, on the equitable doctrine of notice, contended that by reason of the registration of the deed of assignment (Exhibit 55) passed by defendant 2 in April, 1893, the appellant-plaintiff had notice of the transactions set out in the unregistered documents (Exhibits 57, 58, 59), so far as they can be taken to be dealt with by Exhibit 55. This contention is sufficiently met by the decision in v. (1896) 22 Bom. 213 where it was said by , , \"the register may be notice, and in most cases under the rulings of this Court doubtless is, of the registered documents which it contains, but it would be pushing the doctrine of constructive notice beyond all bounds to hold that it is notice of the unregistered documents under which the holders of registered documents B derive their title.\" ", "42. But possession being equivalent to notice of such title as the person in possession may have, both under Hindu, Mahomedan and English laws see v. (1882) 6 Bom. 168, and the respondents being in possession as assignees of the usufructuary mortgage of 1837 when appellant bought the equity of redemption from defendant No. 1 in 1897, the point has been raised, without, however, any argument being specially directed to it at the hearing, whether such possession was notice to appellant of the subsequent charges purporting to be created by the unregistered Exhibits 57, 58, 59. ", "43. In equity it is sufficient to charge a man with knowledge that he had that before him which, if he had used due diligence, would have afforded the knowledge he desires: per Lord St. Leonards in v. (1868) 3 E. and 1 App. 171 at p. 221 quoted by , , in v. (1869) 6 Bom. H.C. 59, where, on the English authorities cited, the duty to make inquiry into the title when the vendor is not in possession is insisted upon. In the case of v. there was neglect to make such inquiry. In the case of v. (1883) 7 Bom. At p. 145 it was said by , J.: \"Had he taken up another line of defence we might perhaps have given him an opportunity of showing that at the time of his purchase he did make inquiries and was informed and believed that the mortgage had been foreclosed.\" ", "44. In v. (1881) 17 Ch. D. 353, where it was held that a purchaser or lessee having notice of a deed passing part of his vendor's or lessor's title has constructive notice of the contents of such deed, it was said by , : \"Supposing you are buying land of a married man, as in v. (1841) 1 Hare 43, and you are told at the same time that there is a marriage settlement but the deed does not affect the land in question, you have no constructive notice of its contents, because although you know there is a settlement you are told it does not affect the land.\" And again at page 358: \"Therefore I think there was sufficient to pub the lessee off his guard.\" ", "45. (1881) 17 Ch. D. at p. 442 it was said by , J.: These questions of notice and of the effect of notice are some of the most difficult questions which has to deal with, and I cannot help feeling that we must be very careful not to strain the doctrine of notice too far and to make it involve consequences of liability to persons who may be practically innocent.\" And again at page 448: \"If a man has notice that there is a deed or document and at the same time, has notice that that deed or document is entirely worthless or does not affect the property with which he is going to deal, he is put so completely off his guard that does not treat him as fixed with knowledge of the document or the effect of it.\" ", "46. Under Section 3 of the Transfer of Property Act (IV of 1882) a person is said to have \"notice\" of a fact when he actually knows that fact, or when but for wilful abstention from an inquiry or search which he ought; to have made, or gross negligence, he would have known it, or when information of the fact is given to or obtained by his agent, under the circumstances mentioned in the Indian Contract Act , 1872, Section 229 . ", "47. Now in the present case though defendants 1 and 2 after parting 2 with all their respective interest in the plaint land have shown a readiness to support the belated claim of defendants 7-10 to hold the plaint land subject to the charges purporting to be created by Exhibits 57, 58, 59 after the mortgage of 1887, it does not follow that this was the attitude adopted by defendants 1 and 2 all along. ", "48. The reference in Exhibit 55 to other documents on stamped paper is vague and the written statement of defendants 7-10 does not suggest any belief on the part of these defendants that they held the plaint land subject to any such further charges. They in fact resisted redemption until they were paid Rs. 1,275, the price paid to defendant 2, and Rs. 1,225 for improvements, and they described the later bonds as \"money bonds\" without basing any claim upon them. ", "49. There is nothing on the record to show that the plaintiff made no inquiry when he purchased the equity of redemption from defendant 1, nor does the written statement of defendants 7-10 suggest that any such inquiry would have led to an assertion by defendants 7-10 in 1887 of any claim under Exhibits 57, 58, 59 or to the production of those documents which were not in the custody of defendants 7-10 at any time. ", "50. The claim pat forward under Exhibits 57, 58, 59 is, as already pointed out, a later development of the defence. The point whether was fixed with knowledge of the contents of Exhibits 57, 58, 59 by means of the possession of defendants 7--10 is a still-later development, and , the appellant-plaintiff, has not been given a proper opportunity to meet the new case thus brought forward for the defendants 7--10. For the above reasons I concur entirely in the view that this appeal cannot be decided on the ground that plaintiff was at the time of his purchase fixed with the knowledge of the charges purporting to be created by Exhibits 57, 58, 59 until the plaintiff has been given the opportunity to show whether at the time of his purchase from defendant 1 he did make inquiries as to the possession of defendants 7--10, and with what result, so that it may be ascertained whether he was offered the same information as that given in the written defence of defendants 7--10 and was misled or put off his guard as to the nature and extent of the rights of defendants 7--10."], "relevant_candidates": ["0000084747", "0000383250", "0000547298", "0001250985", "0001289075", "0001371536", "0001384214", "0001510199", "0001804296", "0001911635", "0001945180", "0177177597"]} {"id": "0001667142", "text": [" Dunedin, J. ", "1. In this case the plaintiffs were mortgagees under a registered mortgage bond granted by the defendant. They raised action for the sum of Rs, 52,000 odd, said to be due under the mortgage. The defendant denied that the whole sum was due, as he said the plaintiffs had not given him credit for two sums of Rs. 11,000 odd and Rs. 8,000 odd, which he had paid, such payments having originally been endorsed on the bond, but the endorsations having been erased by the plaintiffs. ", "2. The Subordinate Judge gave effect to this contention, but made the ordinary preliminary decree for the sum of Rs. 19,000, being the sum due, with proper computation of interest, after allowing credit for the above-mentioned two sums. The date of this decree was February 22, 1915. The six months of grace for payment would, therefore, expire on August 22, 1915. The mortgagees appealed against the decree. The appeal was heard, and the appeal dismissed on May 21, 1917. ", "3. On February 21, 1919, application was made for a final decree. The defendants opposed the application on the ground that it was time-barred under Article 181 of the Schedule to the Limitation Act , 1908. The terms of that Article of the schedule are : \"Applications for which no period of limitation is provided elsewhere in this Schedule; period of limitation three years; time from which period begins to run, when the right to apply accrues.\" ", "4. The three years had expired or had not expired according as computation fell to be made, as the defendants urged, from the time fixed for payment by the original decree, or, as the plaintiffs urged, from the date of the dismissal of the appeal. The Subordinate Judge gave effect to the contention of the plaintiffs. ", "5. On appeal upheld the decision of the Subordinate Judge. The present appeal is against that judgment. The point, therefore, is simply whether the time runs from the expiry of the time fixed by the original preliminary decree or from the date when on appeal against that decree the appeal was dismissed. ", "6. The appellant's counsel strenuously urged that the appeal was not against the decree, but only against the items in the decree. This is a complete misunderstanding. An appeal must be against a decree as pronounced, It may be rested on an argument directed to special items, but the appeal itself must be against the decree, and the decree alone. Which date is then to be preferred ? Their Lordships agree entirely with what was said by in the case of (1917) I.L.R, 39 All. 641, F. b. (p. 643):- ", "It seems to me that this rule [the rule regulating application for final decrees in mortgage notions] contemplates the passing of only one final decree in a suit for upon a mortgage. The essential condition to the making of a final decree is the existence of a preliminary decree which has become conclusive between the parties. When an appeal has been preferred, it is the decree of the appellate court which id the final decree in the cause ", "7. These words are all the more weighty that previously the learned Judge had in the case of (1915) I.L.R. 33 All. 21 held that when there had been an appeal against a preliminary decree, the limitation period applicable to an application for final decree ran from the expiry of the time for payment fixed by the original decree, and not from the disposal on appeal, a view which he candidly confessed in this case was erroneous. The point is put with admirable brevity by (p. 645) :- ", "When the passed the decree, it was open to the plaintiff, or the defendant, to accept that decree or to appeal. If an appeal is preferred, the final decree is the decree of the appellate court of final jurisdiction. When that decree is passed, it is that decree, and only that, which can be made final in the cause between the parties. ", "8. The same view was incidentally taken without comment by this Board in the case of . (1914) I.L.R. 38 All. 350 : s.c. 10 Bom. L.R. 395, P.C. ", "9. Their Lordships will, therefore, humbly advise His Majesty to dismiss the appeal with costs."], "relevant_candidates": ["0000353077", "0001250363", "0001841230"]} {"id": "0001667490", "text": ["CASE NO.: Appeal (civil) 1729 of 1998 PETITIONER: ENGINEERING LAGHU UDYOG EMPLOYEES' UNION RESPONDENT: JUDGE, AND INDUSTRIAL TRIBUNAL AND ANR. DATE OF JUDGMENT: 25/11/2003 BENCH: V.N. KHARE CJ & S.B. SINHA & DR. AR. LAKSHMANAN JUDGMENT: ", "JUDGMENT 2003 Supp(6) SCR 253 The Order of the Court was delivered : ", "One Smt. was an employee of , Ajmer. It appears that she committed certain misconduct as a result of which her services were terminated by the employer on 20th December, 1989. The charge against the workman was that the Manager has entered into conspiracy to get her kidnapped through one by offering her Rs. 10,000. Such an allegation was made against the Manager in front of other workmen and on Manager's asking as to why she had been casting, such false allegations against him and despite his efforts to pacify her, she became violent and took off her chappal and threatened to beat him, but on intervention of some other workmen, she could not reach him. She despite the Manager's asking her to behave herself, continued to make allegations against him in the most filthy language. ", "Having regard to the said misconduct as also her other past misconducts, the workman was dismissed from service. She did not even acknowledge the receipt of the order of dismissal as a result whereof the same had to be sent to her by registered post along with a covering letter in respect thereof. She even refused to accept the dues as admissible to her and the same was sent by Money Order on 21.12.1989. ", "The appellant herein espoused the cause of Smt. (workwoman). As the conciliation proceedings failed, the matter was referred to under Section 10 of the Industrial Disputes Act (for short 'the Act'). One of the issues framed before was whether the order .terminating the services of Smt. was contrary to the principles of natural justice as no domestic inquiry proceedings were held for the said purpose. Under such circumstances, the employer opted to lead evidence to prove the charges as a result of which the services of Smt. were terminated. permitted the employer to lead evidence. After examining the evidence adduced by the employer, found that the charges levelled against Smt. are proved. Consequently, gave its award on 19.2.1996 against the workman holding that the charges are proved. Aggrieved, the appellant who espoused the cause of the workman filed a petition under Article 226 of the Constitution before . A learned Single Judge of dismissed the writ petition A letters patent appeal filed by the appellant also met with the same fate. Aggrieved, the appellant is in appeal before us by way of special leave. ", "Learned senior 'counsel appearing for the appellant urged that the view taken by to the extent it held that the order of termination would relate back to the date of the original order of termination, is erroneous and relied upon a 3-Judge Bench decision of this Court in , 2 SCR 146 at page 215. ", "Having heard the matter, we are of the view that the said submission cannot be accepted as this question stands concluded by a decision of this in , 2 SCR 104. In case (supra), it was held by the that where a domestic inquiry is found defective and the employer leads evidence before and subsequently gives its approval that the charges are proved, the order of termination would relate back to the date of original order of termination. This decision was followed in and Another v. and Others, 6 SCC 159 wherein it was said that the decision in case (supra) and the decision in , l SCC 9 have held that when records a finding that the domestic inquiry was defective and opportunity was given to the management and the workman to adduce evidence and upholds dismissal order passed by the management, the dismissal order would relate back to the date of order of original dismissal and not from the date of award of . ., [ 1997] 3 SCC 713, this however, observed that some of the decisions rendered by this subsequent to case (supra) require a relook as the same are not in consonance with the decision. The same Bench in , 2 SCC 159 held that where an order of termination is found defective having been passed contrary to the principles of natural justice and the employer before has adduced evidence to prove the charges and comes to the conclusion that the charges are proved, in such a situation the order of dismissal will relate back to the original order of termination. , Suppl (4) SCC 157, it was held that the effective date of dismissal after domestic inquiry if finds the inquiry to be unfair and as such gives the employer an opportunity to prove the charge and finally upholds the dismissal, will relate back to the date of original order. This has been the consistent view of this . ", "Section 11A of the Industrial Disputes Act, 1947 (for short 'the Act') confers a wide power upon , or the National to give appropriate relief in case of discharge or dismissal of workmen. While adjudicating on a reference made to it, , or the National , as the case may be, if satisfied that the order of discharge or dismissal was not justified, it may, while setting aside the same, direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require. Thus, only in a case where the satisfaction is reached by or the , as the case may be, that an order of dismissal was not justified, the same can be set aside. So long as the same is not set aside, it remains valid. But once whether on the basis of the evidences brought on record in the domestic inquiry or by reason of additional evidence the employer makes out a case justifying the order of dismissal, we fail to understand as to how such order of dismissal can be given effect to only from the date of the award and not from the date of passing of the order of punishment. The distinction r-ought to be made by this in some of the matters including Gujarat Steel Tubes (supra), in our opinion, is not based on a sound premise, particularly when the binding decisions of this in case (supra) and (P.) ., 3 SCR 587, have not been taken note of. ", "In the present case, we find that the charges were proved before and, thus, was correct in holding that the order of termination would relate back to the date of original order. ", "Learned senior counsel then urged that case (supra) . is dissimilar as it was a case of defective inquiry. According to the learned senior counsel, there is a difference between a termination which is not followed by an inquiry and where inquiry is found to be defective on account of procedural breach. ", "It is not in dispute that in a proceeding for obtaining approval of an order of dismissal from or , as the case may be, in terms of Section 33(2)(b) of the Act or where a reference has been made under Section 10 thereof, if it is found that an inquiry has been conducted in violation of the principles of natural justice, the employer is entitled to raise the said question in its written statement by way of preliminary issues and pray for grant of such an opportunity to prove the charges levelled against him. ", " , 3 SCR 588, this Court held : ", "\"It is now well-settled by a number of decisions of this Court that where an employer has failed to make enquiry before dismissing or discharging a workmen it is open to him to justify the action before the tribunal by leading all relevant evidence before it. In such a case the employer would not have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the tribunal which will .have jurisdiction not only to go into the limited questions open to a tribunal where domestic inquiry has been properly held (see , SCR 667) but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified. We may in this connection refer to M/s. Sasa Musa sugar Works (P) Limited \\. Shobrati Khan, Supp. SCR 836, , l SCR 32 and the , l SCR 806. These three cases were further considered by this Court in , 3 SCR 684, and reference was also made to the decision of in v. , (1954) LAC 697. It was pointed out that \"the import effect of commission to hold an enquiry was merely this : that the tribunal would not have to consider only whether there was a prima fade case but would decide for itself on the evidence adduced whether the charges have really been made out.\" It is true that three of these cases, except case, were on applications under s. 33 of the Industrial Disputes Act, 1947. But in principle we see. no difference whether the matter comes before the tribunal for approval under s. 33 or on a reference under s. 10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if no enquiry has been held as required by Standing orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. was on a reference under s. 10 , and the same principle was applied there also, the only difference being that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper.\" The employer, thus, has got a right to adduce evidence before the justifying its action, even where no domestic inquiry whatsoever has been held. ", "Yet again in ., 3 SCR 587, this Court while interpreting the provision of Section 11A of the Act held that in terms thereof, the management need not necessarily rely on the materials on record as while introducing Section 11A of the Act, the must have been aware of the decisions of this Court which are operating in the field for long time. This Court enunciated several principles bearing on the subject and, therefore, it held that it was difficult to accept that the expression materials on record; used in the proviso to Section 11A was set at naught. The Court formulated the propositions of law emerging from the decisions rendered by this Court, the relevant portions whereof are as under: ", "\"From those decisions, the following principles broadly emerge: ", "(1) ... (2) ... (3) ... (4) Even if no enquiry has been held by an employer of if the enquiry ", "held by him is found to be defective, the in order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer and employee to adduce evidence for the first time justifying his action; and it is open to the employee to adduce evidence contra. ", "(5) ", "(6) The gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective. ", "(7) It has never been recognized that the should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective. ", "(8) .....\" ", "Even in 's case (supra), no distinction, thus, has been made between a defective inquiry and no inquiry. ", "In Gujarat Steel Tubes Ltd. Case (supra), [1980] 2 SCR 146, sought to make a distinction between an approval which is required to be made under Section 33 of the Act and a reference under Section l O thereof stating : ", "\" was cited to support the view of relation back of the Award to the date of the employer's termination orders. We do no agree that the ratio of corroborates the proposition propounded. Jurisprudentially, approval is not creative but confirmatory and therefore relates back. A void dismissal is just void and does not exist. If the , for the first time, passes an order recording a finding of misconduct and thus breathes life into the dead shall of the Management's order, predating of the nativity does not arise. The reference to Sasa Musa enlightens this position. The latter case of (supra) specifically refers to 's case and case and holds that where the Management discharges a workmen by an order which is void for want of an enquiry or for blatant violation of rules of natural justice, the relation-back doctrine cannot be invoked. The jurisprudential difference between a void order, which by a subsequent judicial resuscitation comes into being de novo, and an order, which may suffer from some defects but is not still born or void and all that is needed in the law to make it good is a subsequent approval by a tribunal which if granted, cannot be obfuscated.\" ", "When in terms of the proviso appended to clauses (b) of Section 33 of the Act, an approval is sought for and is refused, the order of dismissal becomes void. If an approval is not obtained still, the order of punishment cannot be given effect to. It is, therefore, not correct to contend that the in a reference under Section 10 of the Act, when passes an order recording a finding of misconduct, brings life into the dead. Unfortunately, the Court did not take notice of the binding decisions in case (supra) and 's case (supra). ", "We may further notice that case (supra) has also recently been followed by another Constitution Bench in , 2 SCC 224. ", "We may, however, observe that although in certain contingencies an employer may in a case of grave nature of misconduct dismiss a workman without holding an enquiry but ordinarily such an enquiry will not be dispensed with. In the event it is found ultimately by that the employer had taken recourse to unfair labour practice or the order of termination has been passed malafide or by way of victimization, it will be open to the to pay compensation even in a case where ultimately charges are proved, despite holding that the order of termination is valid for the reason that principles of natural justice have not complied with. ", "For the aforesaid reasons, we do not find any merit in this appeal. It is, accordingly, dismissed There shall be no order as to costs."], "relevant_candidates": ["0000018269", "0000034445", "0000609478", "0000694154", "0000774563", "0000794955", "0000967474", "0001065826", "0001333489", "0001395554", "0001484981", "0001747159", "0001919374", "0093906983"]} {"id": "0001672668", "text": ["JUDGMENT , J. ", "1. The sole question for disposal in this appeal is one of limitation. Appellant is the decree-holder in Original Suit No. 174 of 1916 on the file of the District Munsif of Tiruvadi and the Appeal arises out of his Execution Petition No. 368 of 1919 filed on 8th October 1919. The decree is dated 2nd May 1916; and the only prior execution petition presented by appellant was dismissed on 7th September 1916. The present application is admittedly time barred, unless appellant can claim a new starting point for limitation under Article 182(5) of the Indian Limitation Act by showing that he applied within three years of the prior execution petition \"to take some step in aid of execution.\" There are two petitions [Exhibits E and F and a plaint in another suit, (Exhibit C) which, as appellant contends, should be regarded as such applications]. I shall deal with them in order beginning with Exhibit E. ", "2. On 3rd January 1918 the judgment-debtor (respondent) filed a petition, Execution Application No. 16 of 1918, for entering satisfaction of the decree, which lie claimed to have discharged. On this appellant filed a \"counter-statement,\" Exhibit E, dated 1st February 1918, denying receipt of the decree amount, and asking that the petition should be dismissed. (It was eventually dismissed on 16th August 1918 owing to respondent's default). ", "3. It is argued that the entry of satisfaction asked for by respondent would have effectively prevented the execution of the decree and that for this reason the counter-statement, Exhibit E, should be treated as an application to take a step in aid of execution of the decree. ", "4. The argument really amounts to this: that any application which, if successful, would facilitate execution or prevent an obstacle being raised to the execution of a decree, whether an application for execution is pending or not, should be treated as coming within the words quoted. Such a construction seems to me altogether unwarranted and to fail to give effect to the words of the article. The article classes together an application for execution and an application to take some step in aid of execution: and the latter words appear to be intended to cover an application which is not an initial application for execution, but is an application to take some step to advance an execution proceeding, which is already pending, e.g., application to bring to sale properties already under attachment. ", "5. The petition, Exhibit E, may tend to prevent the placing an obstacle in the way of future execution of the decree: but it does not ask the to take any step in aid of execution. Supposing it to be successful, execution of the decree is not further, advanced than it was before the petition was presented. ", "6. This is the view which has been consistently taken by vide . v. (1889) I.L.R. 16 Calc. 747, (1890) I.L.R. 17 Calc. 268 and (1896) I.L.R. 23 Calc. 690 and it is one in which I respectfully concur, as based on the only natural interpretation of the article. ", "7. We have been referred by the learned on, both sides to numerous other cases in which the inters, pretation of this article has been in question. Some of these call fax consideration; but I propose to at once eliminate the class which deals with applications made in, the course of a pending execution petition, of which (1915) I.L.R. 38 Mad. 695 is a fair example, dealing with an application by the decree-holder for adjournment of execution proceedings in order to enable him to produce further evidence. Which of such applications should be treated as falling within the article has become a very difficult question to decide, if effect is to be given to all the views expressed in the different judgments. It seems to me, if I may say so with respect, that in some cases the in their anxiety to prevent decree-holders being deprived of the fruits of their decrees by the \"technical\" plea of limitation have stretched the article to such a point that it has become difficult for the most experienced lawyer (to say nothing of layman) to gay when many decrees will become time-barred. In a matter like limitation certainty is the first desideratum: it matters comparatively little whether a decree-holder is allowed 3 years or 10 to execute his decree as long as he knows for certain when the time allowed him will come to an end. ", "8. But whatever case may be made out for an application made in connexion with a pending execution petition as one for taking a step in aid or furtherance of it, an application made at a time when no execution petition is pending stands on an obviously different footing. A man cannot be said to take some step in aid of a petition which has not been initiated. ", "9. The main case relied on by appellant is (1915) I.L.R. 39 Bom. 20, in which it was held that an appeal against an order adjudging the judgment-debtor an insolvent was a step in aid of execution. As a matter of fact in that case an execution petition filed by the objector apparently was pending at any rate at the time the insolvency petition was filed: but apart from this it seems to me, with all respect, that the reasoning of the learned Judges does not justify such an extension of the article, and I observe that they expressly say they do not seek to lay down any general principle, and desire to confine their judgment to the unusual facts before them. ", "10. In the other case, (1922) I.L.R. 45 Mad. 202 Ramesam, J., certainly says there is no warrant for the view that an application to take a step is aid of execution should be made \"in execution,\" meaning apparently while an execution is pending. But he gives no reasons and does not discuss the point: and) with all respect, I feel compelled to dissent. ", "11. I must therefore hold that the counter-petition, Exhibit E, is not an application to take a step in aid of execution. ", "12. Exhibits F and C may be more briefly disposed of. Exhibit F is merely a petition by both parties to hear Execution Application No. 16 of 1918 along with another suit between the parties (Original Suit No. 452 of 1917): and it is conceded that if Exhibit E cannot be relied on to save limitation, Exhibit F stands in no better position. Nor does Exhibit C. This is the plaint filed by appellant in the last-mentioned suit seeking to set aside a settlement deed executed by respondent in respect of certain immovable properties as void under Section 53 of the Transfer of Property Act. The present execution petition is for attachment and sale of moveable property, to which that suit had no application. I cannot see how by any stretch of reasoning the presentation of this plaint could be treated as an application to take a step in aid of execution of the decree in Original Suit No. 174 of 1916. ", "13. An alternative contention put forward by appellant is that he is entitled to ask that the time during which Execution Application No. 16 of 1918 was pending should not be counted against him. This plea does not profess to be based on anything in the Limitation Act , but reliance is placed on the decision of a Bench of three Judges of : v. (1908) I.L.R. 35 Calc. 209, approved on appeal to in v. (1916) I.L.R. 43 Calc. 660 (P.C.), in which it appears to have been held that the relaxations of the ordinary law of limitation provided in the Limitation Act are not exhaustive and that in the case then under consideration the plaintiffs were entitled to count in their favour the period during which they were precluded from bringing their suit by reason of the existence of a decree in a previous suit which covered the same matter. The authority on, the first point may be allowed: but in considering whether any concession should be allowed to the appellant before us, the difference in the facts of the two cases deprives the decision of all force. In that case stress was laid on the fact that the prior decree. ", "so long as it stood undischarged was susceptible of execution at the hands of the present appellants (plaintiffs) and whilst that decree existed it was not open to them in the circumstances to institute a fresh suit for the attainment of the very object which had been successfully attained by them in the previous suit. ", "14. For this reason, because the plaintiff's right to bring the action was absolutely suspended as long as the prior decree remained in force, this period was not allowed to count against him for purposes of limitation. ", "15. In the present case no such consideration arises. The pendency of Execution Application No. 16 of 1918 was no bar to the institution of execution proceedings by appellant. He may have deemed it good policy not to start fresh proceedings until Execution Application No. 16 of 1918 was disposed of (which happened on 16th August 1918) but that is a very different matter. If relief against limitation is to be allowed in cases not provided for in the Limitation Act , surely this should only be done in cases where justice and equity clearly require it. It is not so here. ", "16. Our attention was also drawn to (1920) I.L.R. 43 Mad. 185 (F.B.). The decision in that case turned on a construction of Article 180 , Limitation Act with which we have no concern: bat the principle of \"suspension\" and the question of whether intended to lay down any rule as to the exhaustiveness of the exemptions contained in the Limitation Act were no doubt discussed and were in fact the points raised in the reference. It is sufficient to say that the judgments o\u00a3 all the learned Judges except , tend against appellant's contention: and that none of them militate against the view I have expressed above, viz., that even if it is open to us to allow a suspension of time not provided for in the Limitation Act , there is no justification for doing so here. I would dismiss the Appeal with costs. ", ", J: ", "17. I agree."], "relevant_candidates": ["0000358457", "0000669113", "0000974296", "0001333573", "0001806797", "0001852954"]} {"id": "0001673820", "text": [" . : ", "These are appeals by the and the as well as a cross objection by the . All of them relate to the same assessment year, they are, therefore, being disposed of by this common order. ", "2. The Departments appeal in ITA No. 5447/Bom/88 will be taken up first. ", "3. Ground No. 1 is reproduced below : ", "\"1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in restricting the disallowance under r. 6D of the IT Rules to Rs. 43,792 as against Rs. 49,450 disallowed in the assessment order.\" ", "4. We find that the matter is covered in favour of the assessee by the decision of the in the case of (1983) 4 ITD 583 (Bom). This ground is accordingly allowed. ", "5. Ground No. 2 is reproduced below : ", "\"On the facts and in the circumstances of the case and in law the learned CIT(A) erred in directing to allow a sum of Rs. 13,041 being expenditure incurred on consultation and feasibility study by the assessee as revenue expenditure.\" ", "6. The Assessing Officer noticed that a sum of Rs. 13,041 was paid for consultation and feasibility study which ultimately did not materialise. He treated the same as capital expenditure relying on the decision of in the case of . (1986) 53 CTR (Guj) 273 and accordingly disallowed the assessees claim for deduction. Thereafter, the CIT(A) observed that the assessee had got a computerised feasibility study which recommended that the assessee had no need for immediate in house installation of computer and certain alternatives were suggested. Thereafter, he accepted that it was for the purpose of improving the normal running of the assessees business and would be allowable as revenue expenditure. He made no reference to the case relied upon by the Assessing Officer. The is now in appeal before us. ", "7. We have heard the rival submissions. Our attention has been invited to the report of computerisation feasibility study a copy of which is available in the paper book. It is seen that the principal recommendations were that there was no need for immediate in house installation of computer and it may be deferred for two years. There was immediate need for thorough systems study and setting up of a cell for this purpose. Further there was a need to advance long term strategy before going into the detailed designing work. These recommendations were made after carrying out study of the various functional areas of the assessee-company and the attributes of the information which have a bearing on the equipment configuration. Thus, we find that the study was carried out in relation to the assessees existing business and only to manage the affairs better. The facts are, therefore, distinguishable from the facts in the case of (supra), where they were considering a study report for expansion of the business into a new line. In the facts of the present case, we accept the assessees claim that the expenditure was of a revenue nature. This ground is also rejected. ", "8. Ground No. 3, in reproduced below : ", "\"On the facts and in the circumstances of the case and in law the learned CIT(A) erred in directing the Assessing Officer to allow assessees claim of write off of bad debt of sum of Rs. 1,31,607.\" ", "9. We find that the matter is covered in favour of the assessee by the decision of the in the assessees own case for asst. yr. 1985-86 in ITA No. 9132/Bom/88 dt. 20th June, 1993 in para 7. The facts in the present case are similar. Concurring with the above decision, this ground is rejected. ", "10. Ground No. 4 is reproduced below : ", "\"On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to allow assessees claim of extra shift allowance in proportion of actual number of days during which the factory worked in the relevant previous year.\" ", "11. The assessee made a claim that extra shift allowance should be given at the rate of 100% of normal depreciation. Altogether the actual number of days on which manufacturing operations were carried on in three shifts was only 99 days, which is less than 240 days. It was provided in the IT Rules that for the purpose of granting extra shift allowance, the normal number of working days during the previous year shall be deemed to the number of days on which the concern actually worked during the previous year or 240 days, whichever is greater. 99 days is less than 240 days. However, the assessee claimed that the minimum number of days of 240 days stipulated in the IT Rules, should be reduced to 80 days only, since, the previous year of the assessee for this assessment year comprised of only 4 months, This claim was rejected by the Assessing Officer. The CIT(A) discussed the matter in the appellate order and thereafter, at the end gave a decision that \"extra shift allowance in this case will be allowed to the appellant in proportion to the actual number of days during which the factory worked\". The CIT(A) has not clarified whether the assessees appeal was being allowed or rejected on this ground, and the has apparently filed this appeal before us as a measure of precaution. ", "12. After hearing both sides, we are satisfied that the assessees claim cannot be upheld and the computation by the Assessing Officer must be upheld. We uphold this view since there is no satisfactory basis for reducing the stipulated 240 days to 80 days in the IT Rules, as claimed by the assessee. We hold accordingly and allow this ground. ", "13. Ground No. 5 reads as under : ", "\"On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the assessees claim of write off of bad debt of a sum of Rs. 41,700 as allowed.\" ", "14. The Assessing Officer examined details of assessees claim of bad debt totalling to Rs. 41,700. It was an admitted fact that the assessee had not taken any steps to recover this debt. However, Assessing Officer allowed individual claims where the amounts were Rs. 1,000 or lesser on the ground that benefit should be given for smaller amounts upto the above limit as held by the in (1985) 11 ITD 443 (Hyd). The sum allowed by him was Rs. 10,027. The balance amount where individual sums exceeded Rs. 1,000 was disallowed by him. The CIT(A), however, allowed the entire claim with an observation that he had gone through the details but without any reference to the order of the relied upon by the Assessing Officer. ", "15. We have heard the rival submission and according to the learned counsel for the assessee approach should be same as for the other amounts of bad debts totalling to Rs. 1,34,607 discussed in ground No. 3. However, we do not find any merit in this contention. In the present case no efforts were made for recovery at all and allowance had already been made for smaller amounts of Rs. 1,000 or less each totalling at Rs. 10,027 by the Assessing Officer in accordance with the decision cited by him. We concur with the same and accordingly direct that only Rs. 10,027 should be allowed and the balance should be disallowed. This ground is accordingly treated as allowed. ", "16. In the result, the appeal is partly allowed. ", "17. The assessees appeal in ITA No. 5001/Bom/88 will now be taken up. ", "18. Ground No. 1 is reproduced below : ", "\"1. The CIT [hereinafter referred to as CIT(A)] has erred in law and on facts in confirming the disallowance under S. 40A(5) made by the by considering : ", "(a) rent allowance as forming part of salary. ", "(b) Entire medical expenses reimbursed to the employee as forming part of salary. ", "(c) 25% of the expenditure on motor car as attributable for personal use and hence, perquisite to that extent. ", "(d) Expenditure on repairs and maintenance of leased flats allotted to its employees as perquisite. ", "(e) Entire expenditure incurred on provision of gas and electricity for both official and personal use as perquisite. ", "(f) Entire expenditure on provision of sweepers for both official and personal use as perquisite.\" ", "19. Regarding ground No. 1(a) the learned counsel for the assessee accepted that house rent allowance paid formed apart of salary, but not to the extent to which it was exempt under S. 10(13A) of the IT Act. Reliance was placed on the decision of in the case of . (1991) 187 ITR 1 (Bom) where a decision was given that gratuity in excess of the amount exempt under S. 10(10) only should be considered for disallowance under S. 40A(5) . We accept the contention. This ground is partly allowed. ", "20. Ground No. 1(b) is covered in favour of the by the decision of the Special Bench of the Tribunal in the case of (1986) 26 TTJ (Bom) 214 (SB) : (1986) 18 ITD 226 (Bom) (SB). This ground is accordingly rejected. ", "21. Ground No. 1(c), (d), (e) and (f) were considered by the in the assessees own case for asst. yr. 1983-84 in ITA No. 6 to 9/Bom/1987 dt. 29th Sept., 1992. The learned counsel for the assessee very fairly accepted that they were decided against the assessee for that year. Concurring with the same, these grounds are rejected for this year also. ", "22. Ground Nos. 2.1 and 2.2. are reproduced below : ", "\"2.1 The CIT(A) has erred in law and on facts in confirming disallowance under S. 43B made by the . ", "2.2 CIT(A) has erred in law and on facts in stating that appellant has already been allowed benefit for sales-tax set off, hence, no further adjustment is necessary.\" ", "23. During the hearing before us the learned counsel for the assessee submitted that to the extent sales-tax has been allowed as a deduction in the next year the claim for deduction was not being pressed. For the balance amount he submitted that deduction should be allowed in light of the decision of in the case of (1991) 189 ITR 70 (Pat), wherein, it was held that proviso below S. 43B will have retrospective effect being clarificatory in nature, and similar decision of in . (1991) 191 ITR 676 (Cal). ", "24. The learned Departmental Representative on the other hand relied on the decision of in the case of (1991) 187 ITR 703 (Del), wherein it was held that the first proviso below S. 43B introduced w.e.f. 1st April, 1988 could not be given retrospective effect w.e.f. 1st April, 1984, and a similar decision of in the case of (1991) 189 ITR 81 (Del). The Benches of the Tribunal at Bombay have been following the decision in the case of (supra) and concurring with the same, we restore the matter to the Assessing Officer with the direction to consider the deduction under the first proviso to S. 43B , according to law after giving an opportunity of being heard to the assessee. However, no deduction will be allowed for the amounts of sales-tax already deducted in the next year, as conceded by the learned counsel for the assessee before us. ", "25. Ground No. 3.3 is reproduced below : ", "\"3.1 - CIT(A) has erred in law and on facts in confirming disallowances made by IAC under S. 37(3A) / (3B) of the Act, thereby erred in considering : ", "(a) expenditure incurred on payments of restaurants as payments to hotels; ", "(b) expenditure incurred on payments of salaries to drivers as expenditure on running and maintenance of motor cars.\" ", "26. The only point pressed before us during the hearing by the learned counsel for the assessee was that 1/3rd of the expenses incurred on payments to restaurants were held in asst. yr. 1983-84 to be attributable to the assessees own employees and, therefore, not includible in the computation for disallowance under S. 37(3A) . ", "27. After hearing rival submissions, we accept this contention and direct that 1/3rd of the expenditure on restaurants may be taken outside the purview of S. 37(3A) on the basis that they were incurred on the assessees own employees. ", "28. The assessee has filed an additional ground of appeal according to which the CIT(A) erred in holding that repairs to vehicles ought to be considered for disallowance under S. 37(3A) of the Act. Since a legal question has been raised, the additional ground has been admitted by us. ", "29. After hearing the rival submissions, on merits we find merit in the contention of the assessee, which is supported by the decision of in the case of . (1989) 177 ITR 124 (Bom), wherein, it was held that expenditure deductible under S. 31 is outside the purview of S. 37(3A) . We direct accordingly. ", "30. Ground No. 4 is reproduced below : ", "\"The CIT(A) has erred in law and on facts in confirming disallowance made by in respect of customs penalty of Rs. 1,20,000.\" ", "31. The Assessing Officer observed that the assessee paid customs penalty of Rs. 1,20,000 during this year, and the same was inadmissible as a deduction in the light of the decision of Madhya Pradesh High Court in the case of (1986) 53 CTR 445 (MP). The CIT(A) confirmed the disallowance in light of the decision of in the case of (1986) 161 ITR 492 (Bom). He noticed that as per order of the Addl. Collector of dt. 8th March, 1983, the import of goods to the extent of Rs. 2,58,484 was without proper licence and unauthorised. He, therefore, confirmed the disallowance. ", "32. The learned counsel for the assessee invited our attention to a copy of the order of the Addl. Collector of dt. 8th March, 1983, according to which the CIF value of goods was Rs. 3,58,484 as against Rs. one lakh available for debit in licence produced. It was, therefore, held that importation to the extent of Rs. 2,58,484 was unauthorised. It was ordered by the Addl. Collector of that the goods shall be confiscated. However, the importer was given an option in lieu of such confiscation of a fine of Rs. 1,20,000 under S. 125 of the Act, 1962. The learned counsel submitted before us that the goods had been imported in good faith and it was only a matter of interpretation that they were not covered by the licence and in any case the assessee was allowed to redeem the goods in question. According to him the payment of fine of Rs. 1,20,000 was admissible deduction in view of the decision of in the case of . (1968) 67 ITR 667 (Bom), which had been followed by the Bombay Bench of the Tribunal in the case of . by an order dt. 25th June, 1984 reported in (1985) 22 TTJ (Bom) 494 : (1984) 10 ITD 398 (Bom). ", "33. The learned Departmental Representative relied on the order of the CIT(A). ", "34. We have considered the rival submissions. In the case of (supra), which is an order dt. 12th Sept., 1985, considered its earlier decision in . (supra) and found that the facts were altogether different. In that case in the course of its business the assessee had purchased bills of lading, etc., from certain parties in respect of import of some goods. It was found at the time of customs clearance that the imports were unauthorised and liable to be confiscated and a penalty was imposed. The assessee paid the penalty for saving the goods being confiscated. It was held by that on the facts and circumstances, the actual cost of the goods to the assessee was not only what it had paid to the importers but in addition thereto what it had to pay by way of penalty in order to save the goods from being confiscated. However, the facts in the case of (supra) were that it was the assessee who had got the import licence and imported the goods and it was the fault of the assessee if the goods imported did not conform to the licence. The penalty was levied on the assessee for the default of the assessee itself, and not on the ground of any other persons default. ", "35. We find that the facts in the present case are similar to the facts in the case of (supra), and in the circumstances, we hold that the ratio of the decision had been rightly applied by the CIT(A). This ground of appeal is, therefore, rejected. ", "36. Ground No. 5 is reproduced below : ", "\"The CIT(A) has erred in law and on facts in restricting the claims of bad debts only to the extent of Rs. 41,700.\" ", "37. This ground has been considered alongwith ground No. 5 of the appeal and we have found that the order of the CIT(A) was to be modified, inasmuch as, claim of bad debts individually amounting to Rs. 1,000 only should be allowed. In the light of the same, this ground is rejected. ", "38. Ground Nos. 6.1 and 6.2 are reproduced below : ", "\"6.1 - CIT(A) has erred in law and on facts in stating that the payments made to customers out of excise duty refund received from Asst. Collector are not deductible. ", "6.2 - CIT(A) ought to have given clear direction to the to allow as deduction the repayment made to customers during the accounting period of four months ended 30th April, 1983 on account of excise duty received from Asstt. Collector.\" ", "39. The (A) observed that the assessee had made claim for deduction in respect of repayment made by them during the accounting period of 4 months ended to 30th April, 1983 to the customers on account of excise duty received from the Asstt. Collector. The claim had been made, as a result of an order under S. 263 passed by the . The (A) observed further that the question did not arise out of the assessment order for asst. yr. 1984-85 since no such claim had been made in the course of assessment. He, therefore, declined to consider this additional ground filed before him. ", "40. The learned counsel for the assessee very fairly admitted before us that the order under S. 263 in question had been quashed by the in appeal and in application under S. 256(1) had also been rejected. The issue, therefore, does not survive for consideration any more. For statistical purpose this ground is rejected. ", "41. In the result, assessees appeal is partly allowed. ", "42. We now come to C. O. No. 489/Bom/88 filed by the assessee. The only ground taken is that the CIT(A) erred in confirming the interest under S. 216 levied by the Assessing Officer. The CIT(A) observed that the assessee was not able to elaborate its stand that interest under S. 216 was excessive, the ground was, therefore, rejected. No further elaboration was made before us either. We are, therefore, unable to interfere with the order of the CIT(A) in this regard. The cross objection is rejected."], "relevant_candidates": ["0000040124", "0000624350", "0000944188", "0001000149", "0001262826", "0001627634", "0001722031", "0001880845", "0001901025", "0001902609", "0001910861"]} {"id": "0001679719", "text": ["JUDGMENT Mrs. , J. ", "1. This is a reference under section 256(1) of the Income-tax Act, 1961, at the instance of the assessee-company. The relevant assessment year is 1969-70, for which the previous year was from April 1, 1968, to March 31, 1969. During the relevant previous year, the assessee had valued its opening stock on the basis of costs plus overheads which was the method adopted by the assessee in the years prior thereto, so that the value of the closing stock for the year ending March 31, 1968, was carried forward as the value of the opening stock on April 1, 1968. The assessee, however, decided to change its method of valuation by valuing the stock at cost price only excluding the overheads. The assessee accordingly valued it closing stock for the assessment year in question, i.e., as on March 31, 1969, at cost price. The Income-tax Officer increased the gross profit rate in view of the difference in the method of valuation of opening stock and closing stock. ", "2. The assessee took the matter in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner recalculated the valuation of the closing stock by adding over heads to cost and determined the profit accordingly. In appeal before the , the held that the correct profit can only be arrived at by valuing the opening stock and closing stock at cost price excluding overhead expenses. It, however, directed the Income-tax Officer to redetermine the value of the opening stock at cost price after excluding all overheads. ", "3. From the decision of the , the following question is referred to us : ", "\"Whether the tribunal was right in directing to revise and determine the value of the opening stock as on April 1, 1968, by excluding all overhead expenses ?\" ", "4. It is not in dispute that under section 145 of the Income-tax Act, 1961, the assessee can adopt a method of valuation which has to be followed by it regularly. It is an accepted principle of accountancy that the value of the stock can be determined at cost price or market price, whichever is lower. In the present case, the assessee had adopted the cost price as a basis for valuing its stock. For the earlier previous years, however, the assessee determined the cost price by adding overheads to the cost of the stock, while in the relevant assessment year, it decided to change this methods by determining the cost price without taking into account overheads. ", "5. We are not here concerned with whether this is the correct method or an acceptable method for determining cost price. At no stage of the proceedings was the question ever raised as to whether it was permissible for the assessee to revalue its stock by not including in the cost price overhead expenses. The has not dealt with this aspect, viz., the manner in which the closing stock has been valued in the present case. Therefore, the decision of in the case . , is not attracted to the question before us for consideration. The decision of the is on the footing that since the closing stick was valued by adopting a certain method, the same method should be adopted in valuing the opening stock. In other, words, the change in the method of valuation, according to the , should commence with is to be adopted for valuing the opening stock of nay previous year by the new method which is to be adopted for valuing the closing stock as well. The assumption so made by the appears to be contrary to the normally accepted accounting principles. Mr. has drawn our attention to a booklet called \"Valuation of stock and Work-in-Progress - Normally Accepted Accounting Principles\" - brought out by and written by . At page 4 of this booklet there is a discussion about change from one valid basis to another valid basis. It states : ", "\"2. Where a change from one valid basis to another valid basis as accepted certain consequences normally follow. The opening stock of the base year of valued on the same basis as the closing stock whether the change is to a higher level or to a lower level, the normally does not seeks to revise to valuation of earlier years. It neither seek to raise additional assessment, nor does it admit relief under the error or mistake provisions. ", "3. It is not possible to define with precision what amounts to a change of basis. It is a convenience, both to the taxpayer and to the , not to regard every change in the method of valuation as a change of basis. In particular, the encourage the view that change which involves no more than a greater degree of accuracy, or a refinement, should not be treated as a change of basis, whether, the change results in a higher or a lower valuation. In such cases the new valuation is applied at the end of the year without amendment of the opening valuation.\" ", "6. The same principle has been adopted by in . . It has said (headnote) : ", "\"The two principles applicable with regard to the valuation of stock are that the assessee is entitled to value the closing stock either at cost price or market value, whichever is lower, and that the closing stock must be the value of the opening stock in the succeeding year. It is thus, clear, that irrespective of the basis adopted for valuation in the earlier years, the assessee has the option to change the method of valuation of the closing stock at cost or market price, whichever is lower, provided the change is bona fide and followed regularly thereafter.\" ", "7. Thus, the value of the closing stock of the preceding year must be the value of the opening stock of the next years. The change, therefore, has to be effected by adopting the new method for valuing the closing stock which will, in its turn, become the value of the opening stock of the next year. If, instead, a procedure is adopted for changing the value of the opening stock, it will lead to a chain reaction of changes in the sense that the closing value of the stock of the year preceding will also have to change and correspondingly the value of the opening stock of that year and so on. This was pointed out by in the case of . . In the case before also the valuation of opening stock had been done by the company on the basis of valuation for the closing stock to \"direct cost\", i.e., cost without overheads. This change in method was made bona fide and the assessee said that it would be adopting this method consistently in the future just as in the present case. The court in that case held : ", "\"The change was a bona fide one and was a permanent arrangement which was to be followed year after year, the change would have to be accepted notwithstanding the fact that during the assessment year in question, which was the first year when the change of method was brought about, a prejudice or detriment might be caused to the revenue, because the opening stock was valued at total cost while stock was valued at direct cost.\" ", "8. It said (headnote) : ", "\"If the assessee is called upon to apply the new method of valuation to the opening stock of the accounting year as well, the value of the closing stock of the year previous to the accounting year will also have to get altered which is result in a modification of the assessment of that previous year.\" ", "9. The same reasoning has been adopted by in the case of . . Before also, the assessee was valuing its closing stock, in the past years, by what is known as total cost method in which the proportionate over heads for administrative expenses, selling expenses and interest in stock valuation, were taken into account, for the assessment year in question, the assessee adopted the works cost system where the administrative overheads were not taken into account. The court held : ", "\"Change in the method had to be effected with change in the at valuation of the closing stock of the first year and that the was right in holing that opening stock should be revalued, was incorrect.\" ", "10. Similar question was dealt with by in the case of , in a similar manner. ", "11. Reliance was placed by the on a decision of in the case of . . In the case before both the opening and closing stock were undervalued. The Privy council observed in this connection : ", "\"Mistake cannot be rectified by raising valuation of closing stock only, the valuation of both the opening and closing stock had to be raised.\" ", "12. This decision has no application to the question before us which deals with the change method of valuation and the manner in which such change has to be brought about. Whenever, there is a change in the method of valuation. There is bound to be some distortion in the calculation of profit in the year in which the change takes place. But if the change is brought about bona fide and is no reason why such a change should not be permitted. Undoubtedly, the proviso to section 145 of the Income-tax Act, 1961, lays down that : ", "\"Provided that in any case where the accounts are correct and complete to the satisfaction of the assessing Officer but the method employed is such that, in the opinion of Assessing Officer, the income cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Assessing officer may determine.\" ", "13. This is not such a case. The only question is whether the opening stock is also required to be revalued by excluding all overhead expenses when the assessee has been permitted to revise the method of valuing the closing stock for that year, as the assessee has decided to adopt this new method of valuation henceforth. ", "14. For the reason set out above, the direction given by the to revise and determine the value of opening stock also by excluding all overhead expenses, is not justified. We are not called upon to decide whether the method adopted for valuing the closing stock is in accordance with law and/or accounting practice. The question referred to us is, therefore, answered in the negative and in favour of the assessee. No order as to cost. ", "15. Certified copy be expedited."], "relevant_candidates": ["0000485657", "0001483559", "0001522783", "0001732098", "0001847433", "0001929182"]} {"id": "0001679740", "text": ["JUDGMENT , J. ", "1. This is an appeal by certificate granted by . The facts of this case are almost indentical to those in the case of General Manager, and Anr. etc, v. A.V.R. and etc. respondents in this case relevant time, as in the other case, were the employees of in this case the After the closing of , all the respondents allotted to with the formation of that zone. belonged to either one or the other of the three categories of the different sources from which the staff for the temporary grain shop complex was drawn. In the case of (supra) the employees had prayed under Article 226 of the Constitution in for the issue of a writ of mandamus directing the authorities to fix the inter as seniority of the writ petitioners as per original proceedings dated October 16, 1952 of the Board and not to give effect to the subsequent proceedings dated November 2, 1957 and January 13, 1961 of the Board issued by way of modifications and clarifications of its earlier proceedings of 1952. A learned single Judge of in 's case had allowed the writ petition. The Letters Patent Appeal was dismissed by a Division Bench. The decision of was affirmed by this Court with slight modification and it was held \"`that the discrimination envisaged in the impugned directions dated November 2, 1957 and January 13, 1961, excepting in so far as they pertain to personnel of category (1) is arbitrary and violative of Articles 14 and 16 of the Constitution,\" ", "2. In the present case also the learned single judge allowed the writ application and following the Bench decision of in 's case the writ appeal was dismissed in this case also. ", "3. We do not consider it necessary to narrate the facts of this case except in regard to a few respondents, as by and large, the facts are also identical to those in 's case. The judgment of is affirmed except to the extent indicated in the judgment of this Court in 's case and subject to the clarification made below. ", "4. With respect to the case of respondent No. 10 who was petitioner No. 10 in the writ petition, it was pointed out before the learned single judge on behalf of the appellant that he was originally appointed as a peon in regular department on 26 6-1942 and was confirmed as such. He was then transferred to on 13-10-1944 on promotion as a clerk. It was also pointed out that after reverting from the tenth respondent was working in his substantive post of a peon. ", "5. As respects the cases of respondents 4, 5 and 33 who were respectively petitioners 4, 5 and 34 in the writ petition the appellants case was that they had been drafted into other cadres. They were originally given their seniority in the cadre of as it was given to the other Shop Clerks. But later they volunterred for promotion as Assistant Station Masters in the years 1955 and 1956 earlier to the receipt of the revised instructions of in the years 1957 and 1961. They were confirmed as Assistant Station Masters and thereupon they ceased to have any lien in the cadre of . As regards respondent No. 27 who was petitioner No. 28 in the writ petition, certain other facts were pleaded showing that he had also gone to a differrent cadre. The learned single judge did not make any clarification or distinction in the application of the instructions issued in the year 1952 in cases of respondents 10, 4, 5, 27 and 33. Argument put forward by learned Counsel for the appellant is that determination of seniority on the basis of the decision of this in 's case would be only applicable in the cadre of clerks and not in any other cadre lower and higher. The grievance is justified to some extent. Primarily the instructions issued in the year 1952 which were held to govern the cases of the employees like the respondents were for determination of seniority in the cadre of clerks. It was not meant to override any other instruction, rule or directions concerning the determination of seniority in any other cadre. For instance if a person had become a confirmed Assistant Station Master earlier than any of the respondents 4, 5 and 34, the latter could not count his entire period of working in the clerk's post for getting seniority over the; former. If, however, the seniority determined on the basis of the decision of this in 's case was to be reflected in determination of the seniority in any other cadre to which any of the respondents might have gone, then the seniority in the cadre of the clerk will have to be determined on the principles laid down in 's case. ", "6. We accordingly dismiss this appeal but subject to the clarifications made above. There will be no order as to costs."], "relevant_candidates": ["0001992471"]} {"id": "0001688372", "text": [", J. ", "1. (hereinafter referred to as ) announced a scheme called the registration scheme on New Pattern 1979 of intending purchasers of flats to be constructed by the . The object of the scheme was to reduce the sale price of /Lower Income Group (for short MIG/LIG) and flats so as to be within the reach of the common man. To facilitate the payment by such registrants the mode was also made easier. The registration scheme was opened on 1st September, 1979 and was closed on 30th September, 1979. Annual income of MIG category in a financial year 1978-79 was to be taken at Rs. 7201/- to Rs. 18,000/-. An applicant was required to deposit Rs. 4500 / -. The areas where flats were likely to be constructed were mentioned in the scheme and the likely cost of a flat was indicated at Rs. 42,000/-. constructed flats at different times. According to the term for allotment of petitioners came in 1991. Draw of lots were held from 1983-84 onward for allotment of specific flats to the registrants. ", "2. According to the petitioners on 18th February, 1991 draw of lots in respect of allotment of flats under the scheme took place for them. Clause 9 of the scheme is important and is reproduced here below :-- ", "\"The allotment of flats under this scheme will be by draw of lot like that of . All the applicants who register between September 1, 1979 and September 30, 1979 will have equal seniority.\" ", "Another salient feature of this scheme was that 40 per cent of the flats were to be allotted on cash down basis and 60 per cent of the flats on hire-purchase basis. flats were to be disposed of on the basis of 25 per cent on cash down basis and 75 per cent on hire-purchase basis. In case of flats allotted under hire-purchase basis, the cost of the land plus 20 per cent of the balance cost of the flat was to be recovered as initial deposit at the time of allotment and balance amount was to be recovered in monthly Installments spread over a period of 7 years in case of , 10 years in case of LIG and 15 years in case of flats, though in this writ petition the challenge is not on cash down or hire-purchase scheme or its non-implementation by . ", "3. The petitioners in this writ petition numbering 33 have challenged the quashing of the demand made by the respondent-DDA vide their letter of demand received by the petitioners in September 1991. According to the impugned demand letter the cost of MIG flat on the first floor was Rs. 3,45,300/-, second floor Rs. 3,33,300/-, on ground floor Rs. 4,05,400/-. third floor Rs. 3,17,500/-. ", "4. The petitioners represented to the respondent- that the allotment of the MIG flats both at Jahangirpuri and Paschim Vihar at different floors was made by respondent- without asking for their consent/choice and in an area which was not specifically mentioned in the original scheme of 1979. The petitioners further represented that the prices of the fiats now sought to be demanded by the were astronomically high and were 10 times more than the prices which were offered by the . According to the petitioners this demand, apart from being arbitrary and illegal, was untenable in view of the fact that for registrants of 1979 scheme in draw of lots held on 13th January, 1989 an MIG fiat at Shalimar Bagh at ground floor was allotted by on payment of Rs. 1,66,500/- and on the third floor for Rs. 1,49,000/-. Similarly, in a draw of lot held on 5th April, 1989 for the registrants of 1979 scheme, at Sarita Vihar in South Delhi the price for a flat of MIG category was Rupees 2,87,000/- and Rs. 2,79,100/- respectively. It has been further alleged by the petitioners that the draw of lot held on 31st August, 1989 for the said category of registrants the has demanded in Dilshad Garden (East Delhi) for MIG flats on ground floor Rupees 2,00,600/-. ", "5. According to the petitioners there is no justification for the to ask more price in 1991 for the same category of registration at a higher price than those stated above. Even otherwise, the said increase is arbitrary, irrational and without any basis. The increase is not on account of cost of construction of change in plinth area as per the scheme, argued the counsel for the petitioners. In any event of the matter, the learned Counsel for the petitioners has argued that three times prices escalated in cost of construction which can be recovered by the . According to him this is as per rate schedule. ", "6. According to , construction of these houses under the scheme had been taken up in 1980. In 2983 flats some defects were noticed by . Since the contractor did not rectify the defects the contract was rescinded. On the other hand, learned Counsel for the petitioners argued that the petitioners had to wait for 12 years when allotted flats to them. The delay in allotting the flats for 12 years was not on account of the petitioners but solely on account of . According to the petitioners the increase in the cost of flats is illegal, arbitrary, irrational and unwarranted. According to the petitioners they had acted upon the offer made in the Scheme in 1979 and have done all that required to be done on their part and the respondent-authority cannot be allowed at this stage to go back from the scheme and unilaterally abrogate their obligation. ", "7. The learned Counsel appearing for the petitioners vehemently argued that respondent-authority is constituted under the Act of Parliament for providing amongst other things housing to the population of metropolitan city of Delhi at no profit no loss basis. The authority cannot be allowed to act in a manner of an unscrupulous private developer/builder wholly unrestrained by constraints of public welfare. Moreover, in view of the objective of the scheme to reduce the sale price of and Janta Flats, the increase in price is wholly unjustifiable. Even otherwise, the demand made by the petitioners was too exhorbitant and totally unconnected with the reality and actual circumstances let alone matters of public policy. ", "8. The counsel for the petitioners has also urged that the raising of such high demand for MIG and other categories flats for different section of the population has made the scheme and its objects nugatory as it has become out of the reach of the people who were registered under the said scheme. According to the petitioners Clause 26 of the Scheme which inter alia lays down as under :-- ", "\"The above terms and conditions will be followed generally but the reserves its right to alter any of them in its discretion as and when considered necessary.\" ", "9. According to the petitioners, the above clause was limited to the right of the respondent-authority to revise and modify terms and conditions depending upon the exigencies of layout, cost of construction but will not encompass in its fold power to disregard the scheme altogether and make exhorbitant demand as has been done in this case. Respondent- has argued that in view of Clause 26 of the brochure reserves its right to alter any terms and conditions in its discretion as and when considered necessary. According to them, the prices demanded are totally reasonable and there is nothing unreasonable about the same. In para 10 of their counter, respondent has admitted that the flats offered by the are on no loss no profit basis. They have further stated that there has been tremendous increase in the cost of land, labour, material construction etc. over the years. Therefore, it is totally unreasonable to accept the cost in 1991-92 for the flats to be allotted at the tentative prices prevailing in the year 1979. It is further argued by learned Counsel for that on account of tremendous rush under the 1979 Scheme a priority list was prepared according to which flats were allotted from time to time as per draw of lots according to seniority list. The stand of the is that prices of the flats have been arrived at after meticulous calculations and after taking into consideration all relevant considerations and there is nothing arbitrary or irrational about the same. Counsel for the has also relied upon v. ", ", and has argued that on that basis once the petitioner willingly enters into a contract with the public authority fully aware with the terms and conditions the petitioners are estopped from challenging the terms and conditions of the contract. Lastly, respondent has also contended that in view of Clause 15 of the brochure wherein some of the areas where construction was likely to be undertaken or flats were constructed were mentioned, that would not create a bar for construction being undertaken in other areas. The learned Counsel for the has also cited judgment of this Court in CW 2265/ and CW 2787/ , to support his arguments. ", "10. It is in this background that we have to examine the facts of this case. At the outset it should not be forgotten that in the Union Territory of Delhi all land for the purpose of development is the only agency. There is no private colonizer as no land is available for construction of houses in the hands of private individual. is the monopolistic monolith. Citizens of Delhi have no other option but to look at for land for residential, commercial, industrial, non-residential and non-industrial purposes. The land in Delhi has been acquired by from time to time. There is an averment by the petitioner in the present case that the land was acquired by much prior to the induction of Scheme of 1979 where the flats have been constructed. Time and again we asked the counsel for to tell us as to when the land in question was acquired where the petitioners are being allotted respective flats. This was an important factor so as to understand the objective and policy of the which time and again has stated in their counter-affidavit that the flats are offered on no profit no loss basis. Nothing was made available before us to indicate that the land was acquired in 1979 or 1980 or thereafter, or any period earlier to that. The irresistible conclusion which we draw is that the land was acquired much before the formulation of the Scheme of 1979. The stereo-type argument advanced by the counsel for that is a big organisation and acquisition of land is a continuous process does not cut much ice as the land under the scheme of the flats where the petitioners are being allotted the flats was acquired earlier than 1979. We are discussing this aspect in order to understand the basis on which the has enhanced the prices of flats in question. ", "11. There are three essential components which may have bearing in escalation of cost, the land rate which includes cost of acquisition, future cost and additional price which State has to incur on account of enhancement of compensation cost of construction and cost of administrative expenses which may include profit to the contractor if it is to be constructed by the outside agency particularly speaking these are the basic cost which are essential for determining the fixation of price apart from other incidental cost which may not vary the cost to a large extent. ", "12. The petitioners have filed the rejoinder in which specific instances were given which are :-- ", "(A) Mr. registered under the same Scheme called New Pattern Registration Scheme (NPRS) 1979. By the lot drawn on 15th December, 1989 he was allotted flat No. 55, Block 'B', Pocket 7, Sector 10, 3rd floor in Rohini. This category of flat is also M.I.G. and the demand in respect thereof was for Rs. 1,55,700/- cash down. It may be stated that the area of Rohini is a much better locality as compared to Jahangirpuri and some other areas where flats have been offered to the petitioners. A flat offered to the petitioner on 3rd floor, in ' the area of Jahangirpuri is for Rs. 3,17,600/-. The only difference is that the draw in case of the petitioner was held on 18-2-91. ", "(B) Mr. , who is also petitioner No. 10 in C.W.P. No. 3198 of 1991, was offered flat No. 289 A, Ground Floor, Pocket J & K, Dilshad Garden lots were drawn on 31-3-89 for Rs. 1,72,600/-. Mr. requested that a flat could be allotted to him somewhere in North Delhi. He deposited the balance of the amount on 28-2-90 amounting to Rs. 1,65,768.78 P. In the draw of lots on 18-2-91 flat No. 251, Ground Floor in Jahangirpuri was offered to him at Rs.4,05,400/-. ", "(C) Mr. was offered in Retired Persons Scheme (RPS Scheme) by lots drawn on 13-11-89 flat No. 61, 'D' block, C/A Shalimar Bagh, 3rd Floor for Rupees 1,66,500/-. This flat is also in M.I.G. category. Mr. protested and by demand dated 29-6-89 the authorities scaled down the price to Rs. 1,49,000/-. ", "(D) Mr. was offered on 5-4-89 under Self Financing Scheme V in Sarita Vihar flat No. 322 category 2, 3rd floor for Rs. 2,80,700/-. This flat is not only in much better locality but is of a much bigger area being 101 sq.m. i.e. about one and a half time more than that of M.I.G. flats offered to the petitioners. Even the construction in this respect is much superior. Mr. protested and revealed that the Chairman of a month earlier approved much lower price, i.e., Rupees 2,27,110/-. By demand dated 15-6-89 the flat was then offered to Mr. for Rupees 2,27,100/-.\" ", "13. The was afforded an opportunity to file additional affidavit to explain the circumstances under which aforesaid flats have been allotted, but nothing substantial was filed to controvert what has been stated by the petitioner, except that meticulous calculations were taken into consideration. The has given some figures in additional affidavit filed by them. They have shown the total expenditures on various heads and divided by number of fiats thereby arriving at the cost of one single flat. One of the major components for increase in the price of flat is the revised land rate/land premium charged by the . An interesting argument was raised that the land rate/land premium charged from the petitioner is perfectly valid and justified. According to the the revision in land rate was well considered policy decision and there is nothing arbitrary or illegal about the same. It is not for us in normal course to go through the policy regarding fixation of land rate or land premium but in the instant case fixation of land rate by the is so arbitrary and without any basis that we have to discuss this in detail. ", "14. Some statement of figures which has been filed by along with additional affidavit show that this astronomical increase in the cost of the flats is on account of revision of land rate. In this connection they relied . upon letter No. E14(4)/81/PT.III dated 6-12-90 from Financial Adviser (Housing) which is a circular and reads :-- ", "\"Lt. Governor, Delhi has approved the land rates to be charged for the flats (including left out flats as approved by Vice-Chair- man, ) and fully developed land for allotment to various registrants in respect of plots as under :-- ", "Rates of land to be charged for housing categories (Flats). ", "Rates of fully developed land for allotment to various registrants in r/o plots (excluding ) ", "1. EWS Rs. ", "500/- per sq. m ", "1. EWS Rs. 825/- ", "psm. ", "2. LIG Rs. 660/- -- ", "do-- ", "2. LIG R. ", "1075/- ", "do-- ", "3. MIG Rs. 970/- -- ", "do-- ", "3. MIG Rs. 1400/- -- ", "do ", "4. SFS Rs. 975/- -- ", "do-- ", "4. SFS Rs 1700/- -- ", "do In r/o flats, equalisation charges on plinth area at the following rates will also be charged. ", "Zones Rates ", "1. South & Central Rs. 100/- per s.m. ", "2. North and West Delhi Rs. 50/- ", "--do- ", "Category Area Pre-determined rates per sq. mtr. ", "EWS Rs. 498/- ", "LIG 32&48 Rs. 662/- ", " 69&90 Rs. 996/- ", "MIG 140& above Rs. 8486/- ", "The above rates will take effect immediately.\" ", "15. It shows that rate which has been charged from the petitioners are at the rate of Rs.996/- for MIG and Rs.662/-for LIG with effect from 6-12-90. This also finds corroboration from page 69B of the paper book where in relation to ground floor flat in Jahangirpuri the land rate has been shown at the rate of Rs. 930/- per sq.mtr. We fail to understand that when initially the in the brochure has estimated cost to be worked out as Rs. 42000/ - for MIG category this estimated cost obviously had taken into account all possible items of expenses including the land which had been acquired, cost of construction and other administrative expenses. According to the petitioner the land had been acquired much earlier and the land rate prevalent till 6th December 1990 had been Rs. 62/- per sq.mts. We cannot understand how the land premium had been raised from Rs. 62/- per sq.mtr. till 6-32-1990 to Rs. 930/- per sq.mtr. after that date. No material whatsoever in spite of our insistence as to what were the factors which were taken into consideration by Lt. Governor who happened to be the Chairman of the and the Vice-Chairman of for enhancing the land premium and before unilaterally issuing letter dated 6-12-90. Neither any reply nor any material was shown to the except on harping that it is a policy decision and the cannot go into this process. We are afraid we cannot sit with folded hands in writ jurisdiction and let the petitioners to be at the mercy of , which under the garb of its position as a wearing the hat of the power of the can exploit the citizens. It will be fallacious to assume that the citizen is not even in a position to know as to how and on what basis the revision of land premium and land rate has been applied to his case. That will make mockery of law. ", "16. The main thrust of the argument of the learned counsel for the respondent was that the petitioner was not entitled for a flat in the year 1981 as per seniority list. Secondly even though the construction of the flats may have been delayed on account of disputes between the respondent and the contractor but the amounts so spent on account of delay of construction was totally not passed on to the petitioners. Thirdly, according to the learned counsel for the respondent no allottee could claim that he has an entitlement to a particular set of land rate which was prevailing at different times. According to him, it is a matter of policy decision to be determined by respondent authority as to what rate would apply for which year and court cannot go into the method of costing. ", "17. learned counsel for the has argued that the Court cannot go into the pricing policy of the respondent as the same has been arrived at after due deliberation by respondent-authority. In his support he has cited the case , . We are afraid that this proposition cannot be of any help to the respondent as in that case the challenge was to a surcharge levied by the as part of purchase price of the flat and petitioners before were already allotted flats and observed in that case that the real purpose of the petitioners to file the petition before was to get back a . part of the purchase price of the flats paid by the petitioners after flats have been secured by them. Therefore, in paragraph 8 thus observed :-- ", "....Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject-matter of a petition under Article 32. And Art. 14 cannot camouflage the real bone of contention. Concerning for this submission that the authority has the trappings of a or would be comprehended in other authority for the purpose of Article 12 , while determining price of flats constructed by it, it acts purely in its executive capacity and \"is bound by the obligations which dealings of the with the individual citizens import into every transaction entered into in the exercise of its constitutional powers. But after the or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Art. 14 or of any other constitutional provision when the or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the in the contractual field which is apart from contract\". Petitioners were under no obligation to seek allotment of flats even after they had registered themselves. They looked at the price and flats and applied for the flats. This they did voluntarily. They were advised by the brochure to look at the flats before going in for the same. They were lucky enough to get allotment when the lots were drawn. Each one of them was allotted a flat and he paid the price voluntarily. They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat. The in its affidavit in reply in terms stated that it is willing to take back the flats and to repay them the full price. The transaction is complete, viz., possession of the fiat is taken and price is paid. At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to reopen and wriggle out of a concluded contract only partially. In a similar and identical situation this in ., has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party findings its prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this under Article 32 of the Constitution is not intended to facilitate avoiding of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained. However, as the petitions were heard on merits the contentions canvassed on behalf of the petitioners may as well be examined.\" ", " further observed :-- ", "\".....What is forbidden by Art. 14 is discrimination amongst persons of the same class and for the purposes of allotment of flats scheme-wise, allottees of flats in the same scheme, not different schemes in the same income bricket, will have each such class there is unequal treatment or unreasonable or arbitrary treatment, the complaint that Art. 14 is violated cannot be entertained.\" ", "18. In the aforesaid case was considering the levy of surcharge on the basis of the arguments advanced that is meeting out discriminatory treatment inasmuch as no surcharge was levied on the fiats in MIG Scheme constructed and allotted prior to November 1976 and the January 1977 MIG flats involved in these petitions were constructed and were available for allotment in November, 1976 and the lots were drawn in January 1977. According to the petitioners before there was another scheme of MIG fiats Munirka where allotment took place at and about the same time where no surcharge was levied. The amount of surcharge was only a couple of thousands rupees. While considering these circumstances of this case held that levy of surcharge was not violative of Article 14 of the Constitution, whereas in the present case the revision of land premium or land rate is an exercise by the under its statutory rights not depending on the terms of contract. Petitioners have, as a matter of fact, have fulfillled their objections under the contract. It is evidenced by of its obligation under the contract taking the shield of its pre-contractual position of strength emanating from its power as a statutory authority. ", "19. Learned counsel for has also cited . and . These authorities do not help the case of the respondents as was considering the validity of S. 3(3-C) notification dated 28-11-1974 regarding prices fixed for various grades of sugar with reference to geographical-cum-agro-econo-mic consideration and average cost profiles of factories located in respective zones. In that case was of the opinion that on account of exhaustive study by experts and conclusions reached by Government, it was not shown to be either discriminatory or unreasonable or arbitrary or ultra vires and price fixed on account thereof was a matter of policy and not within the province of the . further laid down that judicial function is exhausted when there is found to be a rational basis for conclusions reached by concerned authority. From the aforesaid observations in case (supra) it is dear that the scope of judicial review in cases like the present one relating to fixation of price is limited but as stated earlier it would be only when it is found that there is a rational basis for the conclusion reached by for fixation of price as has been done in the instant case, in our opinion, the respondent-authority had no basis for arriving at the rates fixed what to talk of rational basis. The authority , is not at all applicable to the case of the respondent as the question before was whether , Jalgaon could enter into an agreement with a private developer for financing and execution of project. Counsel for the respondent has also cited . We are afraid that this authority does not help the case of the respondent. Rather, it supports the case of the petitioners, as held that in fixation of prices of essential commodities should be guided by presumption of constitutionality and object of the action and effect of the action on prices a legitimate consideration in upholding the order, reasonable profit of dealer is not a sine qua non but interest of consumer a primary consideration. In this case was dealing with case of fixation of price under the Essential Commodities Act where the ultimate interest of the consumers was the primary consideration for upholding the order of fixation of prices of essential commodities. Therefore, this authority, if at all helps, helps the case of the petitioners. The benefit of fixation of price must pass to the petitioners. ", "20. . Learned counsel for the petitioners cited , and argued that DDA is estopped from charging any higher price than mentioned in the brochure when the petitioners registered themselves and he argued that the time has gone when promissory estoppel as a doctrine has to be used only as a measure of defense. According to him in view of the judgment of in that case the respondents are duty bound and they are estopped in law from charging any other price except for reasonable increase on account of cost of construction. ", "21. Learned counsel for the petitioners also cited v. (1956) 1 All ER 256 and (1854) 3 House of Lord's Cases 471 in support of his proposition. ", "22. Learned counsel for the respondent has also cited . This authority is of no help to the case of the respondent as was examining altogether different issue involved in the matter. To fortify his argument the learned counsel for the respondent has cited , (1992) 42 DLT 295, which is a short judgment and has followed another judgment of this in Civil Writ No. 2265/91 ( ). In case in paragraph 7 the while discussing the justification for escalated rates has stated as under :-- ", "\"As regards the question of payment on escalated rates, we find that Clause 14 of the Scheme specifically states that the plinth area of the flats indicated and the estimated price mentioned in the brochure are illustrative and are subject to revision/modification depending upon the exigencies of layout, cost of construction etc. The petitioner has entered into a contract with being fully aware of the terms and conditions of the contract.\" ", "23. After this the in paragraphs mentioned that the case is covered by the judgment of , , and on this short ground dismissed the petition. ", "24. Before dealing with case we would like to mention the brief facts of case in this regard. The did not take into consideration in case the true import, effect and scope of Clause 14 of the Scheme which is as follows :-- ", "\"It may please be noted that the plinth area of the flats indicated and the estimated prices mentioned in the brochure are illustrative and are subject to revision/modification depending upon the exigencies of layout, cost of construction etc.\" ", "25. The Division Bench in case did not consider the arbitrary revision of land premium rates hiked by respondent-authority from Rs. 62/- per sq. mtr. to Rs. 930/- per sq. mtr. Even the land rates are not mentioned in Clause 14 on the basis of which the authority could revise the rate of the flat in question. As a matter of fact, in case the Court was considering as to whether 40 per cent flats which were allotted on cash down basis under the scheme and 60 per cent of the flats on hire-purchase basis which were not put so. No assurance was given to any registrants that he will be allotted a flat on hire-purchase basis. Therefore, this authority is also of no help to the respondent-DDA. Another fallacy in the argument of learned Counsel for the respondent that there is no seniority of the registrants of the scheme is contrary to their own Clause 9 of the scheme which is reproduced as under : ", "\"The allotment of flats under the scheme will be by draw of lot like that of . All the applicants who register between September 1, 1979 and September 30, 1979 will have equal seniority.\" ", "26. Counsel for the respondent has argued that in view of case , the writ petition itself is not maintainable. The learned Counsel overlooked the fact that (for short ) dealt with cases where allottees after voluntarily accepting the conditions imposed by the have entered into the realm of contract purely and simple with the and hence allottees could only claim the right conferred upon them by the said contract and was bound by the terms of the contract. In the case , the note given in the brochure clearly stated that the cost shown therein is only an estimated cost and would increase or decrease in the price only at the time of completion of the house/flat. Many persons got themselves registered for allotment of flats/houses. A notice was subsequently issued by the increasing the price of houses, the amount of Installment and interest. The allottees were asked to send their written acceptance of the revised price/Installment to the . Most of the allottees except few unequivocally accepted the revised demand. It was in these circumstances that held that it was in the realm of contract pure and simple, more so the petitioner before was highly educated and has accepted the revised terms of the , therefore, and he was not entitled to any relief as the contract entered into between the and the persons aggrieved was non-statutory and purely contractual and, therefore, the rights were governed only by the terms of the contract. held that no writ or order can be issued under Article 226 of the Constitution of India. The flats were constructed within three to four years in that case. ", "27. Here we are confronted with the situation where the enhancement of one component of post is on account of land rate/land premium from Rs. 62/- per sq. mtr. to Rs. 930/- per sq. mtr. The same has been done by without notice to the registrants. No notice was issued to the petitioners informing them of the revision of prices, no acceptance was asked for by the from the petitioners as was done in the case of , rather nothing has been brought on record by as to how this land rate/land premium has been raised from 1989 to 1991 from Rs. 62/- per sq. mtr. to Rs. 930/- per sq. mtr. The revision of land rate/land premium is without any reasons, none has been disclosed to this . We cannot understand as to how, on one fine morning, the Lt. Governor of Delhi who is also the Chairman of by stroke of pen could enhance the land rate from Rs. 62/-per sq. mtr. to Rs. 930/-per sq. mtr. effecting the cost of the flats of the petitioners who registered themselves since 1979. How this revision of rales which adversely affected their rights could be notified at their back without petitioners having any say. This revision cannot be said to be in the realm of non-statutory and purely contractual matter. Can without wearing the hat of the or exercising its statutory powers enhance this huge amount without notice to the registrants is a main question. The has not asked from these unfortunate petitioners who are waiting since 1979 that is revising the land premium to such an extent, whether the petitioners are still interested in the Scheme or not. To agree with the proposition advanced by the , will amount to give license to a public authority to play havoc with the citizens of Delhi. It will amount to giving a license to to charge whatsoever amounts taking the plea of non-statutory contracts. Are courts so powerless under Article 226 of the Constitution, that when such a mischief so apparent is committed under the statutory powers, that the citizen can be non-suited on the pretext that it falls in the realm of contractual obligations and this under Article 226 of the Constitution is a silent spectator. ", "28. We once again emphasise that in Delhi it is the alone which deals with lands in Delhi. There is no other authority whether public or private which is authorised in the law to sell or dispose of land whereas in Uttar Pradesh the land does not belong to any single authority like . Even in Bareilly there are other authorities/individuals owning lands for residential, agricultural and commercial purposes. The has put further rider that once a person applies in any scheme for owning a flat/plot, he becomes disentitled for applying or owning any flat or plot of land in the Union Territory of Delhi. Look at the fate of these registrants who came from poor or middle class strata of , applied in response to the scheme of in 1979 for , and category flats. did not allot them flats till the year 1991. They could not have applied in any other scheme of allotment nor could have purchased any other flat and today they are in a situation that initially a flat which was costing to them Rs. 43,000/- as per the scheme, the is charging exhorbitant amount of over Rs. 4 lacs. Is a citizen to suffer for non-construction of flats by the or for delay in construction on account of substandard flats, or for any reason whatsoever. If this is accepted then that would be perpetuating illegalities and same cannot be sustained in the eye of law. We take strong exception to the stand of that if the petitioners are not interested to get the allotment of flats on the increased rate, they are free not to take it. It smacks of not only monopolistic arrogance but exploitative stance of public authority. We strongly deprecate these kinds of arguments advanced before us by the . Counsel for the has also brought to our notice a recent decision of the Full Bench in case in Civil Writ Petn. No. 623 of 1993, in support of his contentions. We are of the opinion that the question involved in that case is not a similar to the one raised before us. This Court had the occasion to deal with the issue raised before it in , AIR 1985 Delhi 417, which reads as under (at pp. 431 and 434 of AIR) :-- ", "\"20. We shall proceed now to consider the applicability of the above principles to the situation before us. But, for doing that, we should first try to see what exactly it is that is happening here. The is a public authority which is entrusted, inter alia, with the responsibility of providing houses to the citizens of Delhi. The statute and the regulations lay down the modalities by which the can dispose of properties by way of sale or hire. The drawing up of scheme, the modes of registration and allotment, the fixation of a price and the mode of its payment, the execution of a deed and the conditions of transfer are all provided for in these \"regulations. There is nothing in the regulations that compels the to provide houses free of cost or at concessional rates or even at the cost of construction. It is open to the to fix such price for the flats as it may deem fit. In doing so, it can keep a margin of profit for itself .take into consideration its overall working, consider the picture of town planning as a whole and off set deficits in one scheme while completing another and so on. In short, it is as free in fixing the price of flats as any private contractor will be, except only for the limitations of fair play and the need to avoid arbitrariness and discrimination that fetter the hands of a public authority which is amenable to Art. 226. So long as it conforms to these regulations, its actions cannot be challenged. But once some regulation is infringed or any arbitrariness or invidious discrimination creeps in, its action is liable to challenge under Art. 226. For example, if the does not fix a price or the principles for its determination or if properties are sought to be allotted otherwise than the lots when there are more claimants than houses or plots or there is arbitrariness in allotment, the action of the can be challenged in a writ petition. Perhaps even where the price is fixed arbitrarily and withput any basis for it, it can be challenged in writ proceedings. This is a pre-contractual statutory stage. Thereafter, when the announces a scheme in conformity with these regulations and applications are received allotments are made and accepted, the general public scheme yields place to individual contracts between the and each allottees. Now we reach the contractual stage in the domain of private law. It replaces the earlier stage of statutory obligations which was in the domain of public law. Here, any action by any one or more of the allottees to enforce the terms of the contract or to complain of their breach on the part of the will lie, at general law, by way of a suit and not by way of a writ petition. To put it in other words, any complaint or grievance pertaining to the pre-cpotractual statutory stage can be aired under Art. 226 but any complaint or grievance pertaining to the contractual stage can be agitated only in a civil suit. ", "25. But it is argued for the , this is also, at worst, only a breach of contract by the . AH that be said is that the agreed originally to give the flats at cost but now they refuse to do so and demand a higher price. For this it is open to the petitioners to sue the for specific performance of the contract on the original terms or for damages for breach of contract or for other appropriate relief. A writ wilt not be maintainable. This argument, we think, is untenable; it attaches undue importance to the form and ignores the substance of the stand taken by the . In all these matters, the should look at the real effect of what has been done. The decided cases referred to above show that, if what is done is really an enforcement of the contractual terms, the affected party cannot be allowed to camouflage its grievances in the garb of fundamental rights or by attributing to the action of the authority a statutory flavour and seek redress by means of a writ petition. It should equally follow. We think, per contra that where what the authority has done is in effect a variation of the incidents of the pre-contractual stage, it cannot be rendered immune from proceedings under Article 226 merely because it can be dressed up or described as a mere breach of contract. So, in our opinion, where the revises the earlier policy of price fixation and substitutes a new one, it is truely interfering with a step in the statutory stage amenable to writ jurisdiction and a writ petition cannot be dismissed as not maintainable merely on the ground that the result of the action also results in a breach of the original contract for which remedy is available in the ordinary civil s. Looked at in the proper perspective, this is a case where the grievance of the petitioners falls under the second category of cases referred to in case, .\" ", "29. The unilateral revision of land rate/ premium whereby affecting the price of flats without any reasons is arbitrary and unreasonable. The action of the in revising the estimate on that basis otherwise than on the terms of the original contract is, therefore, illegal and is liable to be quashed. We hold that by revising land rate/land premium the in fact has varied the terms of pre-contractual stage, therefore the respondent is not immune from proceedings under Article 226 of the Constitution. We hold that this writ is maintainable as it deals with the stage which alter the parameter of statutory stage in the contract. ", "30. Even otherwise, the income groups on the basis of which formulated the said scheme remains unchanged. That is to say, still the petitioners would fall in the same MIG/LIG categories as in the year 1979. When the petitioners applied for registration under the Scheme in 1979 they had a reasonable as well as legitimate expectation that they will be allotted the flats within a span of reasonable time. By no stretch of imagination 12 years taken by can be construed as a reasonable time for allotment of flats to the petitioners. Having come to the conclusion that the revision of land premium is irrational, arbitrary and unreasonable the next question we have to answer is as to what should be the cost which should be paid by the petitioners to the . has not produced before us the cost of the individual flat worked out by them, though they have given some details, according to them, of the total expenditures incurred by the . We feel it is not proper for us to go into this aspect of costing in this writ petition. This is the job of the . But should we allow the to work out the final cost and ask the petitioners to wait for more time, that would be unfair to , them in law as well as in equity. ", "31. Considering all the relevant circumstances including the Scheme of 1979 and the price of flats charged from various registrants under this scheme in the year 1989, we are of the opinion that the petitioners should be required to pay four and a half times the price of the flat as was mentioned in the year 1979 scheme. This demand would be on provisional basis subject to further directions as hereinafter given. Accordingly, we issue mandamus directing the to handover possession of the flats to the petitioners on their making payment at the rate of Rupees 1,89,000/- for MIG flat, Rs. 81,000/ - for LIG flat and Rs. 36,000/- for Janta flat. The demand letters issued earlier are set aside and fresh demand letters shall be issued to the petitioners who shall make payment in terms of the demand calculated on the basis of the price above mentioned. In terms of those demand letters possession shall be handed over to the petitioners forthwith. We make it clear that the terms mentioned in the demand letters except for the price fixed by us shall remain the same. ", "32. We further direct that the shall constitute an Expert Committee to go into the costing of these flats taking the land rate at Rs. 62/- per sq. mtr. The Expert Committee will take the actual cost of construction spent by the on construction of the said flats. If after working out the cost on the basis of aforesaid works out cost to be more than the price that has been provisionally fixed by us the shall give such revise cost and its intimation to the petitioners who within one month from the date of intimation shall pay the same to . We further direct that till the revised demand is paid by the petitioners, the petitioners shall not alienate, transfer or otherwise create any charge on their respective flats in question. ", "33. With these directions, the petition is allowed. The parties arc left to bear their own costs. ", "34. Petition allowed."], "relevant_candidates": ["0000682224", "0000693496", "0000871220", "0000958552", "0001060766", "0001159364", "0001646640", "0001732064", "0001893286", "0178640246"]} {"id": "0001690960", "text": [", J. ", "1. , the Appellant before us by Special Leave, purchased some lease hold land for Rs. 10,500/- from and others under a sale deed of 7-7-1958 (Exhibit B-7) and some other lands shown in a sales' certificate dated 15-7-1960, (Exhibit B-51) sold to him for Rs. 6,550/- at a public auction of immovable property held to realise the dues in respect of loans taken by under the Land Improvement Loans' Act 19 of 1883. Both and , mentioned above, were impleaded as codefendants in a partition suit, in Vellore, Madras, now before us in appeal, commenced by a pauper application dated 23-6-1958 filed by the plaintiff-respondent so that the suit must be deemed to have been filed on that date. The plaintiff respondent before us had challenged, by an amendment of his plaint on 18-9-1961, the validity of the- sales of land mentioned above, consisting of items given in Schedule 'B' to the plaint, on the ground, inter-alia, that these sales, of joint property in suit, were struck by the doctrine of lis pendens embodied in Section 52 of the Indian Transfer of Property Act. As this is the sole question, on merits, raised by the appellant before us for consideration, we will only mention those facts which are relevant for it decision. ", "2. Before, however, dealing with the above question, a preliminary objection to the hearing of this appeal may be disposed of. and the Court of first appeal having held that the rule of lis pendens applied to the sales mentioned above, the appellant purchaser had filed a second appeal in , which was substantially dismissed by a learned Judge of that Court, on 19-7-1968, after a modification of the decree. Leave to file a Letters Patent appeal was not asked for in the manner required by Rule 28, Order IV of the Rules of Madras High Court, which runs as follows : ", "28. When an appeal against an appellate decree.or order has been heard and disposed of by a single Judge, any application for a certificate that the case is a fit one for further appeal under clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered. ", "But, the appellant, after obtaining certified copies of the judgment and decree of , sent a letter to the that the case be listed again for obtaining a certificate of fitness to file a Letters' Patent appeal. The case was, therefore, listed before the learned Judge and an oral application which was then made for grant of a certificate, was rejected on 6-9-1968 on the ground that it had not been made at the proper time. ", "3. It was contended, on behalf of the respondent, that, in the circumstances stated above, the appellant must be deemed to have been satisfied with the Judgment of the High Court as his Counsel did not ask for leave to file a Letters' Patent appeal as required by Order IV Rule 28 of the Rules of the Madras High Court (that is to say, immediately after the judgment has been delivered). The following observations of this Court in . @ 52-53 were cited to contend that the appeal before us should be rejected in limine : ", "Normally, an application for\" special leave against a second appellate decision would not be granted unless the remedy of a Letters Patent Appeal has been a vaild of. In fact, no appeal against second appellate decisions appears to be contemplated by the Constitution as is evident from the fact that Article 133(3) expressly provides that normally an appeal will not lie to this Court from the judgment, decree, or final order of one Judge of . It is only where an application for special leave against a second appellate judgment raises issues of law of general importance that the Court would grant the application and proceed to deal with the merits of the contentions raised by the appellant. But even in such cases, it is necessary that the remedy by way of a Letters' Patent Appeal must be resorted to before a party comes to this Court. ", "4. In reply to the preliminary objection, Mr. , appearing for appellant, has assailed the validity of the above mentioned Rule 28 of Order IV itself. It is submitted that the rule conflicts with the provisions of Clause 15 of the Letters' Patent of the Madras High Court requiring only that the Judge who passed the judgment should declare that the case is fit one for appeal as a condition for appealing. It was urged that the period of limitation for filing an appeal should not, in effect, be cut down by a rule such as the one found in Rule 28, Order IV of the Rules of Madras High Court. It was urged that, before Article 117 of the Limitation Act of 1963 introduced a period of thirty days from a decree or order for filing a Letters' Patent appeal, the period of limitation for such appeals fell under the residuary Article 181 of the old Limitation Act . As applications for certification fell outside the provisions of the Civil Procedure Code and there was no specific provision for them in the Limitation Act could frame its own rule prescribing the mode and time for making such applications. ", "5. Rule 28 of Order IV of does not purport to affect the power to give the declaration contemplated by Clause 15 of the Letters' Patent. In some , there is no rule of the laying down that the application should be oral and made immediately after the judgment has been delivered. It is, however, evident that a rule such as Rule 28 of Order IV is most useful and necessary particularly when a period of thirty days only for filing an appeal has been prescribed in 1963. The Judge pronouncing the judgment can decide then and there, in the presence of parties or their counsel, whether the case calls for a certificate. In a suitable case, where a party is able to prove that it was prevented due to some cause beyond its control from asking for leave at the proper time, the Judge concerned may condone noncompliance by a party with Rule 28, Order IV, of , or extend time by applying Section 5 of the Limitation Act. This salutary rule could not, therefore, be held to be ultra vires (sic) invalid. ", "6. There is, however, another answer to the preliminary objection. It was contended that the case before us is covered by what was laid down by this Court in case (Supra) when it said (at page 53) :- ", "...we do not think it would be possible to lay down an unqualified rule that leave should not be granted if the party has not moved for leave under the Letters Patent and it cannot be so granted, nor is it possible to lay down an inflexible rule that if in such a case leave has been granted it must always and necessarily be revoked. Having regard to the wide scope of the powers conferred on this under Article 136 , it is not possible and, indeed, it would not be expedient, to lay down any general rule which would govern all cases. The question as to whether the jurisdiction of this under Article 136 should be exercised or not, and if yes, on what terms and conditions, is a matter which this has to decide on the facts of each case. ", "In that particular case, this had actually heard and allowed the appeal by Special leave because it he'd that there was no general inflexible rule that special leave should be refused where the appellant has not exhausted his rights by asking for a certificate of fitness of a case and because that case called for interference. ", "7. It is urged before us that the appellant had done whatever he possibly could, in the circumstances of the case, to apply for and obtain a certificate of fitness after going through the judgment of , so that the rule that alternative modes of redress should be exhausted before coming to this Court had been really complied with. Each case must, we think, be decided upon its own facts. In the case before us, although the appellant was not shown to have attempted any explanation of failure to apply for the certificate at the proper time, yet, the special leave petition having been granted, and the case having passed, without objection, beyond the stage of interim orders and printing of the records, we have heard arguments on merits, also. The merits may now be considered. ", "8. The challenge on the ground of lis pendens, which had been accepted by the Courts in Madras, right up to , was directed against two kinds of sales : firstly, there was the ostensibly voluntary sale of 7-7-1958 under a sale deed by the defendant and his major son and three minor sons , alias Thanikachalam, and in favour of the defendant appellant; and, secondly, there was the sale evidenced by the sale certificate (Exhibit B. 51) of 15-7-1960 showing that the auction sale was held in order to realise certain \"arrears under hire purchase system due to Shri O. D. \" The words \"due to\" must in the context, be read as \"due from' because \"falsa demonstration non nocet ", "9. The deed of the voluntary sale for Rs. 10,500/- showed that Rs. 7375.11/- Ans. were to be set off against the money due on a decree obtained by the purchaser against the sellers in original suit 2/56 of the Vellore Sub-Court, Rs. 538.5/- Ans. were left to liquidate the amount due for principal and interest due to the purchaser on a bond dated 14-10-1957, by , Rs. 662.9/- Ans. was to be set off to liquidate another amount due to the purchaser from on account of the principal and interest on another bond executed by , Rs. 1250.0.0/- was left to pay off and liquidate the balance of a debt due to one from , Rs. 100.0.0 /-were meant to settle a liability to the Government in respect of a purchase of cattle and for digging of some well, Rs. 51.13/- Ans. were to go towards settling a similar liability, and only Rs. 521.11 /-Ans. were paid in cash to the seller after deducting other amounts for meeting liabilities most of which were shown as debts to the purchaser himself. It may be mentioned here that, on 17-1-1944, had executed a mortgage of some of the property in Schedule 'B' of the plaint for Rs. 7,500/- in favour of , and he had executed a second mortgage in respect of one item of property of Schedule 'B' in favour of , who had assigned his rights to . A third mortgage of the first item of Schedule 'B' properties was executed on 27-5-1952 by , in favour of the appellant , was said to be necessitated by the need to pay arrears of Rs. 3,000/- income tax and for discharging a debt and a pronote in favour of a man called . In 1955, an original suit No. 124/1955 had been filed by who had obtained orders for the sale of the first item of Schedule 'B' properties shown in the plaint. The original suit No. 2 of 1956 had been filed for principal and interest due on 27-5-1952 to the appellant who had obtained an attachment on 5-1-1956 of some Schedule 'B' properties. The appellant had obtained a preliminary decree on 25-1-1956 in his suit and a final decree on 14-9-1957. All these events had taken place before .the institution of the partition suit on 23-6-1968. But, the voluntary sale to satisfy decretal amounts was executed after this date. The second sale was an involuntary sale for realisation of dues under the provisions of Section 7 of the Land Improvement Loans Act 19 of 1883 which could be realised as arrears of land revenue. There was nothing in the sale certificate to show that the due for which properties were sold were of anyone other than individually. ", "10. On the facts stated above, the appellant claims that both kinds .of sales were outside the purview of the doctrine of lis pendens inasmuch as both the sales were for the discharge of preexisting liabilities of the Hindu joint family of which was the karta. The liabilities incurred by , it was submitted, as karta of the family, had to be met, in any case, out of the properties which were the subject matter of the partition suit. It was urged that where properties are liable to be sold for payment of such debts as have to be discharged by the whole family, only those properties would be available for partition in the pending suit which are left after taking away the properties sold for meeting the pre-existing liabilities of the joint family. In the, case of the sale for discharging dues under the Land Improvement Loans Act it was also contended that they obtained priority over other claims, and, for this additional reason, fell outside the scope of the principle of lis pendens. ", "11. The defendant-respondent and the defendant-appellant had both pleaded that the properties in suit were acquired by with his own funds obtained by separate business in partnership with a stranger and that , plaintiff, had no share in these properties. The plaintiff-respondent's case was that although the properties were joint, the liabilities sought to be created and alienations made by were fraudulent and not for any legal necessity, and, therefore, not binding on the family. ", "12. had found that the properties given in Schedule 'B' were joint family properties of which the defendant-respondent was the in possession. This finding was affirmed by the first and was not touched in . It did not follow from this finding that all dealings of with joint family properties, on the wrong assumption that he was entitled to alienate them as owner and not as , would automatically become binding on the joint family. A is only authorised, to make alienations on behalf of the whole family where these are supported by legal necessity. It was no party's case that the alienations were made on behalf of, and, therefore, were legally binding on the joint family of which plaintiff-respondent was a member. ", "13. recorded a finding on which the learned Counsel for the appellant relies strongly : \"There is overwhelming documentary and oral evidence to show that the sale deed Exhibit B.7 and the revenue sale are all true and supported by consideration and that the 12th Defendant would be entitled to them, if these sales were not affected by the rule of Lis pendens within the meaning of Section 52 of the Transfer of Property Act.\" It may be mentioned here that the 12th Defendant is no other than the appellant , the son-in-law of defendant-respondent , 'who had purchased the properties covered by both the impugned sales. The plea of the plaintiff-respondent that the sales in favour of , the 12th defendant-appellant, were fraudulent and fictitious and not supported by valuable consideration was rejected. Although, decree for the partition included the properties covered by the two impugned sales evidenced by Ex. B.7 and B.51, yet, the Commissioner who was to divide the properties by metes and bounds, was directed to allot to 's share, so far as possible, properties which were covered by Exhibit B.7, and B.51. This implied that the liabilities created by the decrees for whose satisfaction the sale deed dated 7-7-58 (Exhibit B-7) was executed and the revenue sale of 16-3-1960 for loans under an agreement were treated as the separate liabilities of the defendant and not those of the joint family. ", "14. as well as had also rejected the plea that the revenue sale of 16-3-1960 to satisfy preexisting liabilities of had any priority over the rights of the plaintiff-respondent may get in the partition suit. The result was that the partition suit was decreed subject to a direction for the allotment of the properties covered by Exhibit B. 7 and B.51 so that the purchaser may retain these properties if 'they were allotted to . ", "15. had described the sale of 7-7-1958 as a \"voluntary alienation\", and, thereby, placed it on a footing different from an involuntary sale in execution of a decree in a mortgage suit. The obligations incurred before the sale of 7-7-1958, by reason of the decrees in the mortgaged suits, were not on this view, liabilities which could be equated with either transfers prior to the institution of the partition suit or with sales in execution of mortgage decrees which are involuntary. So far as the revenue sale was concerned, , after setting out the terms of Section 7 of the Land Improvement Loans Act 19 of 1883, held that only that land sold was to be excluded from the purview of the principle 'of Lis pendens /for the improvement of which some loan was taken. This meant that only that part of the loan was treated as a liability of the joint family as could be said to be taken for the joint land. It, therefore, modified the decrees of the Courts below by giving a direction that further evidence should1 be taken before passing a final decree to show what land could be thus excluded from partition. ", "16. The plaintiff-appellant has relied upon certain authorities laying down that the doctrine of lis pendens is not to be extended to cover involuntary sales in execution of a decree in a mortgage suit where the mortgage was prior to the institution of the suit in which the plea of Lis pendens is taken, because the rights of the purchase] in execution of a mortgage decree date back to the mortgage itself They are : AIR 1932 Madras 566 , and Ors. Har Prashad Lal v. ILR 32 Calcutta 891. Reliance was also placed on the principle laid down in ., to contend that, since Section 52 of the Transfer of Property Act does not protect transferors, a transfer on behalf of the whole joint 'Hindu family would be outside the purview of the principle in a partition suit. The contention advanced on the strength of the last mentioned case erroneously assumes that the impugned sales were on behalf of the joint family. ", "17. Learned Counsel for the plaintiff-respondent has, in reply, drawn our attention to the following observations of , Ag. C.J., expressing the majority opinion in . : ", "...the language of Section 52 has been held to be applicable not only to private transfers but also to sales held in execution of decrees. S. 2(d) does not make S. 52 inapplicable to Ch. 4, which deals with mortgages. This is now well-settled : vide v. (A) and ) followed in numerous cases out of which mention may be made of ). ", "(A) (1888) 15 Cal. 756,15 I.A. 97 (B) (1898) 25 Cal. 179,24 LA. 170. ", "(C) (1901) 23 All. 60, (1900) A.W.N. 199. ", "But, as we have no actual sale in execution of a mortgage decree, this question need not be decided here. Another decision to which our attention was drawn was : v. and Anr. AIR 1952 Nag. 341. ", "18. The suggestion made on behalf of the appellant, that attachment of some schedule 'B' property before judgment in the purchaser's mortgage suit could remove it from the ambit of Lis pendens, is quite unacceptable. A contention of this kind was repelled, in at 211 by this Court as clearly of no avail against the embargo imposed by Section 52 of the Transfer of Property Act. ", "19. had rightly distinguished cases cited on behalf of the appellant before it by holding that exemption from the scope of lis pendens cannot be extended to voluntary sales in any case. Obviously, its view was that, even where a voluntary sale takes place in order to satisfy the decretal amount in a mort gage suit, the result of such a sale was not the same as that of an involuntary sale in the course of execution proceedings where land is sold to satisfy the decree on the strength of a mortgage which creates an interest in the property mortgaged. had observed that, as regards the satisfaction of the mortgage decree in his favour, which was part of the consideration for the sale of 7-7-1958, the appellant purchaser decree holder could get the benefit of Section 14 Limitation Act and still execute his decree if it remained unsatisfied due to failure of consideration. ", "20. An examination of the sale deed of 7-7-1958 discloses that it is not confined to the satisfaction of the decretal amounts. Other items are also found in it. The sale deed does not purport to be on behalf of the Hindu joint family of which the plaintiff and Defendant No. 1 could be said to be members. It no doubt mentions the sons of Mudaliar but not , plaintiff, among the sellers. At most, it could be a sale binding on the shares of the sellers. As already indicated, , Defendant-Respondent, as well as , Defendant-Appellant, having denied that the properties in dispute were joint, could not take up the position that the sales were binding on the whole family. , we are unable to hold that the assumption of that the voluntary sale could not bind the whole family, of which was the karta, was incorrect. ", "21. Learned Counsel for the appellant had also relied on . S.C.R. 878 That was a case in which, before the deposit of money by the- preemptors in a suit to enforce their rights to pre-emption, the vendee had sold his rights to the appellant who had an equal right of pre-emption. It was held there that the claim for pre-emption could be defeated by such a device which fell outside the purview of the principle of lis pendens. We think that this decision turns upon its own facts and on the nature of the right of preemption which, as was observed there, is a weak right. This Court had held that this weak right could be defeated by a sale which a vendee is compelled to make for the purpose of defeating the right, provided the purchaser's superior, or equal right to pre-emption had not been barred by limitation. On the question considered there, the view of in v. (A.I.R. 1949 East Punj. 193) was preferred to the view of in . The observations made by this Court with regard to the doctrine of lis pendens when a plaintiff is enforcing a right of pre-emption must; we think, be confined to cases of sales which could defeat preemptors' claims. It has to be remembered that a technical rule of the law of pre-emption is that the preemptor, to succeed in his suit, must continue to possess the right to pre-empt until the decree for possession is passed in, his favour. ", "22. As regards the revenue sale of 16-3-1960 (Exhibit B.51) we find that the sale certificate is even less informative than the voluntary sale deed considered above. Nevertheless, the view taken by was that any land for the improvement of which loan is shown to have been, taken by would be excluded from the purview of the, doctrine of Lis pendens. It is, however, urged that had given effect to clause (c) of Section 7 of the Land Improvement Loans Act of 1883, but had overlooked clause (a). Here, the relevant part of Section 7 , Sub-section (1.) of this Apt may. be set out. It reads as follows :- ", "Recovery of loans.-(1) Subject to such rules as may be made under Section 10 , all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same shall, when they become due be recoverable by the Collector in all or any of the following modes, namely :- ", "(a) from the borrower-as if they were arrears of land revenue due by him; ", "(b) from his surety (if any) as if they were arrears of land revenue due by him; ", "(c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; ", "(d) out of the property comprised in the collateral security (if any)-according to the procedure for the realization of land revenue by the sale of immovable property other than the land on which that revenue is due : ", "Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of or persons having charges on, that interest, and where the loan is granted under Section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest. ", "23. was also placed 011 Section 42 of the Madras Revenue Recovery Act of 1864 which reads as follows : ", "All lands brought to sale on account of arrears of revenue shall be sold free of all incumbrances, and if any balance shall remain after liquidating the arrears with interest and .the expenses of attachment and sale and other costs due in respect to such arrears, it shall be paid over to the defaulter unless such payment be prohibited by the injunction of a Court -of competent jurisdiction. ", "24. It will be seen that the assumption that the dues could be realised as arrears of land revenue would only apply to the interest of the borrower so far as clause (7)(1)(a) is concerned. The proviso enacts that even recoveries falling under Section 7(l)(c) do not affect prior interests of persons other than the borrower or of the party which consents to certain loans. In the case before us, the borrower had himself taken up the case that the loan was taken by him individually for the purpose of purchasing a pumping set installed on the land. It did not, therefore, follow that this liability was incurred on behalf of (the joint family unless it amounted to an improvement of the joint land. Every transaction of or in respect of joint property in his possession could not affect rights of other members. It was for this reason that Section 7(1)(a) was not specifically applied by . But, at the same time, the direction that the properties sold should, so far as possible, be allotted to meant that the purchaser could enforce his rights to them if they came to the share of . ", "25. The question of paramount claims or rights of the Government for the realisation of its taxes or of dues which are equated with taxes was also raised on behalf of the appellant on the strength of that case, the origin of the paramount right of the to realise taxes due, which could obtain priority over other claims, was traced to the prerogatives of the British crown in India. Apart of the fact that there is no claim by the before us, we may observe that, where a statutory provision is relied upon for recovery of dues, the effect of it must be confined to what the t -statute enacts. Even under the English law, the terms of the statute displace any claim based on prerogatives of the vide Attorney General v. de Keyser's AC 508 And, in no case, can the claim, whatever its basis, justify a sale of that property which does not belong to the person against whom the claim exists. As already observed a claim under Section 7(1)(a) of the Land Improvement Loans Act of 1883 could only be made from the borrower. This meant that, unless it was proved that , in taking a loan under the Act, was acting as the karta of the joint Hindu family of which was a member, recovery of arrears could only be made from 's share in the land. That this could be done was, in our opinion, implied in the direction that the properties sold should, so far as possible, be allotted to the share of . ", "26. As some argument has been advanced on the supposed inapplicability of the general doctrine of lis pendens to the impugned sales, the nature, the \"basis, and the scope of this doctrine may be considered here. ", "27. It has been pointed out, in \"On lis pendens\", that, even before Sir framed his ordinances in 1816 \"for the better and more regular administration of justice in the chancery, to be daily observed\" stating the doctrine of lis pendens in the 12th ordinance, the doctrine was already recognized and enforced by Common law Courts. 's ordinance on the subject said : ", "No decree bindeth any that commeth in bona fide, by conveyance from the defendant before the bill exhibited, and is made no party, neither by bill, nor the order; but, where he comes in pendente lite, and, while the suit is in full prosecution, and without any colour of allowance or privity of the court, there regularly the decree bindeth; but, if there were any intermissions of suit, or the court made acquainted with the conveyance, the court is to give order upon the special matter according to justice. ", "The doctrine, however, as would be evident from 's work mentioned above, is derived from the rules of jus gentium which became embodied in the Roman Law where we find the maxim : \"Rem de qua controversia prohibemur in acrum dedicare\" (a thing concerning which there is a controversy is prohibited, during the suit from being alienated). , in his commentaries on the lows of Scotland (2 's Com. on Laws of Scotland, p. 144) said that it was grounded on the maxim : \"Pendente lite nibil innovandum\". . He observed : ", "It is a general rule which seems to have been recognized in all regular systems of jurisprudence, that during the pendence of an action, of which the object is to vest the property or obtain the possession of. real estate, a purchaser shall be held to take that estate as. it stands in the person of the seller, and to be bound by the claims which shall ultimately be pronounced. ", "29. In the Corpus Juris Secundum (Vol. LIV-p. 570), we find the following definition : ", "Lis pendens literally means a pending suit; and the doctrine of lis pendens has been defined as the jurisdiction, power, or control which a court acquires over property involved in suit, pending the continuance of the action, and until final judgment therein. ", "30. Expositions of the doctrine indicate that the need for it arises from the very nature of the jurisdiction of Courts and their control over the subject of litigation so that parties litigating before it may not remove any part of the subject matter outside the power of the court to deal with it and thus make the proceedings infructuous. ", "31. It is useful to remember this background of Section 52 of our Transfer of Property Act which lays down : ", "During the pendency in any ...of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the and on such terms as it may impose. ", "32. It is evident that the doctrine, as stated in Section 52 , applies not merely to actual transfers of rights which are subject-matter of litigation but to other dealings with it \"by any party to the suit or proceeding, so as to affect the right of any other party thereto\". Hence, it could be urged that where it is not a party to the litigation but an outside agency, such as the tax Collecting authorities of the Government, which proceeds against the subject-matter of litigation, without anything done by a litigating party, the resulting transaction will not be hit by Section 52 . Again, where all the parties which could be affected by a pending litigation are themselves parties to a transfer or dealings with property in such a way that they cannot resile from or disown the transaction impugned before the dealing with the litigation, the may bind them to their own acts. All these are matters which the could have properly considered. The purpose of Section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the which is dealing with the property to which claims are put forward. ", "33. In the case before us, the had given directions! to safeguard such just and equitable claims as the purchaser appellant may have obtained without trespassing on the rights of the plaintiff-respondent in the joint property involved in the partition suit before the . Hence, the doctrine of lis pendens was correctly applied. ", "34. For the reasons given above, there is no force in this appeal which is dismissed with costs. ", ", ", "35. I have had the advantage of perusing the judgment prepared by my brother, , but as I arrive at the same conclusion by a slightly different route I am writing a separate judgment. I may give a few facts to make the judgment self-sufficient. The following pedigree may enable us to appreciate the facts :- ", "Muniappa | ___________________________________________ | | | Doraiswamy Chidambara Govindaswamy Muda- (died on 4-9-1937) (died 1940) wife 6th Def. (died pending 10th Def. suit) | | _____________________ __________________ | | | | | Muniswami Ayyaswami Def. 7 Def, 3 Def. 9 (1st Def. died pending suit) (Plaintiff) | ________________________________________ | | | | Def. 2 Def. 3 Def. 4 Def. 5 12th Def. (Jayaram )-alinee of Def. No. 1. ", "36. On June 23,1956 (Plaintiff) filed a pauper petition No. 137/1958. In the plaint he claimed a partition of B Schedule properties which, according to him belonged to consisting of himself and the defendants. While this suit was pending, defendant No. 1--and four of his sons executed a sale deed (Ex. B7) in respect of some lands in Ozhaiyathur village in favour of on July 7, 1958. These properties comprised items 5, 15 to 19, 24 and 28 of Schedule B. On July 15, 1960 a certificate of sale (Ex. B51) was issued stating that had purchased at public auction immoveable property (described in the certificate) for Rs. 6,500/-. The property is stated to have been sold for \"pumpset arrears under Hire Purchase System due by \". Exhibit B 51. covered items 4, 18, 20, 23 to 27 and 31. It is common ground that these properties, were included in the B Schedule mentioned in the plaint. ", "37. It is stated in the judgment of that .got himself impleaded as 12th defendant. He filed a written statement inter alia alleging that the Plaint B Schedule properties were the sole and absolute properties of the 1st defendant. Additional issues were framed in the suit. ", "38. It appears that by virtue of order dated September 18, 1961, the plaint was amended and paras 24(a) and 24(b) inserted. They read : ", "24(a) The 12th defendant is a close agnate of the son-in-law of the 1st defendant. He executed the sham and nominal sale deed dated 7-7-1958 in favour of the 12th defendant to defeat the plaintiff's rights and to secrete the properties. It was not acted upon. It is the 1st defendant that continues to be in possession even now. The alleged sale deed is not supported by consideration. The mortgage itself was brought about to defeat any rights.'' In any event on the date of the alleged sale deed dated 7-7-1958 the mortgage decree debt was not subsisting. The plaint was filed in forma pauperis as O.P. 137 of 1958 on the file of on 23-6-1958. Thus in any event the sale is hit by the rule of lis pendens and the sale deed dated' 7-7-1958 cannot and does not confer any rights on the 12th defendant. ", "24(b) The revenue sale is brought about collusively and fraudulently. There was no publication. The 12th defendant never got into possession of any property. The possession still continues to be with the 1st defendant on behalf of the joint family. The sale, is also hit by the rule of lis pendens. It also does not and cannot confer any rights on the 12th defendant. ", "39. Following additional issues were raised out of the pleadings of the 12th defendant : ", "(1) Whether the plaint B Schedule properties are joint family properties ? ", "(2) Whether the plaintiff is entitled to question the alienations in favour of the 12th defendant ? ", "(3) Whether the sale deed dated 7-7-1958. by the 1st defendant in favour of the 12th defendant true, valid and binding on the plaintiff and. is affected by LIS PENDENS ? ", "(4) Whether the Revenue sale by the Collector dated 16-3-1960 is liable to be questioned by the plaintiff ? ", "(5) Is the suit without impleading the Government liable to be questioned by the plaintiff ? ", "(6) Is the sale of pump set by the 1st defendant to the 12th defendant true, valid and binding on the plaintiff ? ", "(7) Whether the plaintiff and other members became divided from the 1st defendant after 1939 ? ", "(8) To what equities, if any, is the 12th defendant entitled ? ", "(9) Is the plaintiff estopped from questioning the alienations and claiming any right in the B Schedule-properties ? ", "We are only concerned with issues 3 and 4 above. ", " held that the sale deed, Ex. B7, and the revenue sale \"are all true and supported by consideration and that the 12th defendant would be entitled to them, if these sales were not affected by the rule of lis pendens' within the meaning of Section 52 of the Transfer of Property Act\". Regarding lis pendens he held that the purchases under both Ex. B7 and Ex. B51 were affected by the rule of lis pendens. passed a preliminary decree for partition of B Schedule properties (items 2 to 31) into six equal shares. It protected the interest of the 12th defendant by stating that \"as far as possible the Commissioner to be appointed in the suit for division of the properties will allot to the plaintiff's share such of the properties which are not covered by Exs. B 7 and B 51. ", "40. The District Judge confirmed the decree. Before , in appeal by defendant No. 12, the only point considered was that of lis pendens. held that Ex. B7 was a case of voluntary alienation and was hit by lis. pendens, as the sale was not in execution of a mortgage decree. Regarding Ex. B51 , relying on A.I.R. 1939 Mad. 256 held that Ex. B51 would not be affected by lis pendens, as the loans were granted under the Land Improvement Loans Act to the extent that the loans were taken for the improvement of the properties. As it had not been considered whether all the properties which were sold in revenue sale and conveyed under Ex. B51 were lands for the improvement of which loans were taken, directed : ", "In the final decree proceedings, the trial court were to consider what were the properties for the improvement of which the loans under the Land Improvement Loans Act were taken by the first defendant, in respect of those properties alone the doctrine of lis pendens will not apply. In respect of other properties, the doctrine of lis pendens will apply. The trial court take evidence for the purpose of deciding the properties in respect of which the loans under the Land Improvement Loans Act were taken. ", "With this modification dismissed the appeal. ", "41. Defendant No. 12 applied for a certified copy of the Judgment and Decree on July 22, 1968, and these were made ready on August 9, 1968 and delivered on August 12, 1968. Defendant No. 12 moved by letter dated August 22, 1968 \"requesting the posting of the appeal for being mentioned for the purpose of the issue of the Certificate for leave to appeal under the Letter Patent\". The learned Judge who heard the appeal by his order dated September 6, 1968 refused the leave on the ground that the leave was not asked for immediately on delivery of judgment and that it could not be asked for afterwards. ", "42. Rule 28 of Order 4 of the Rules of the High Court of Madras Appellate Side, 1965 under which the leave asked for was refused reads : ", "28. When an appeal against an appellate decree or order has been heard and disposed of by a single judge, any application for a certificate that the case is a fit one for further appeal under clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered. ", "43. This granted special leave. ", "44.At the outset, Mr. raised the preliminary objection that the appeal was incompetent as Defendant No. 12 failed to ask for certificate orally and immediately after the judgment was delivered. The learned Counsel for Defendant No, 12 urged that Rule 28 of Order 4 was ultra vires. Two points thus arise out of the contentions of the parties : ", "(1) Is Rule 28 of Order 4 of the Rules of the High Court of Madras Appellate Side ultra vires ? ", "(2) Are the Sales by Ex. B7 and Ex. B51 hit by the rule of lis pendens ? ", "45. Clause 15 of the Letters Patent inter alia provides for an appeal to from a judgment of one judge made in exercise of the appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a court subject to its superintendence, where the Judge who passed the judgment declares that the case is a fit one for appeal. Clause 37 of the Letters Patent confers powers on the- High to make rules and orders for the purpose of regulating all proceedings in civil cases. This held in that under Clause. 27 of the Letters Patent which is in similar terms as Clause 37 mentioned above, of Judicature at Lahore had the power to make a rule prescribing the period of limitation in respect of appeals from Orders made by that in exercise of its original jurisdiction to of that . It seems to me that can equally frame a rule regulating the time at which and the manner in which the application for a certificate shall be made. Rule 28 of Order 4 does not take away any right conferred by Clause 15 of the Letters Patent. It only regulates the manner of the exercise of that right. It was said that the rule unduly restricts the right of the litigant to peruse the judgment and make up his mind whether to appeal or not. But if the declaration is made immediately by the Judge that the case is fit one for appeal there is nothing, to prevent the litigant from not filing the appeal if he considers it inadvisable to do so. ", "46. I need not discuss the point whether the Judge will have the right to condone a breach of the Rule because no application seems to have been made to condone the breach of the Rule. But this conclusion does not render the appeal before us incompetent. Leave was given by this Court after hearing the respondents, on October 14, 1968. On April 22, 1969 the respondents obtained an order from this Court for expediting the hearing. No application was made at that stage to raise the point of incompetency of appeal. In the circumstances I consider that the appeal should be disposed of on merits. ", "47. Coming to the second point, this Court has considered the scope of Section 52 of the Transfer of Property Act and the rule of lis pendens in a number of cases. There is no difficulty in holding that Ex. B7 falls within the provisions of Section 52 of the Transfer of Property Act. But Ex. B51 stands in a different position. It was held in , 28 that the principle of lis pendens applies even to involuntary alienations like court sales. observed : ", "The purchaser pendente lite under this doctrine is bound by the result of the litigation on the principle that . since the result must bind the party to it so must it bind the person deriving his right, title and interest from or through him. This principle is well illustrated in the facts were almost similar to those in the instant case. It is true that Section 52 strictly speaking does not apply to involuntary alienations such as court sales. But it is well-established that the principle of lis pendens applies to such alienations. [See Nilkant v. Suresh Chandra 12 I.A. 171 and Motilal v Karrabuldin (24 I.A. 170).] ", "48. These observations were referred to with approval by this Court in . If the principle of lis pendens applies to court auctions there is no reason why it should not apply to revenue sales. But the effect of the application of the principle may vary according to the nature of the pro visions under Which the revenue sale is held. The principle of lis pendens does not affect pre-existing rights. If there is a valid charge or mortgage on a property, this does not vanish because the property becomes the subject-matter of a partition suit. In this case according to defendant No. 12 a valid charge subsisted on the lands by virtue of the provisions of the Land Improvement Loans Act . Under Section 7 of the Land Improvement Loans Act loans are recoverable by the Collector in all or any of the following modes, namely : ", "(a) from the borrower as if they were arrears of land revenue due by him; ", "(b) ... ", "(c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; ", "(d) ... ", "49. The proviso to Section 7 reads : ", "Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgagees of, or persons having charges on, that interest, and where the loan is granted under Section 4 with the consent of another persons, the interest of that person, and of-mortgagees of, or persons having charges on, that interest. ", "50. Section 42 of the Madras Revenue Recovery Act provides that all lands brought to sale on account of arrears of revenue shall be sold free of all encumbrances. The liability of the land to be sold under Section 7(c) of the Act was a pre-existing charge and that subsisted as from the date of the loan. This was not affected by the institution of the suit for partition. This charge could be enforced by the notwithstanding the pendency of the partition suit. No decree in the Partition suit could have effaced the charge. Therefore, if the has sold only the property in respect of which loan was taken, the purchaser-defendant No. 12-is not prejudiced by the principle of lis pendens. Therefore, the direction of was right insofar as it directed to separate the properties for the improvement of which the loans under the Land Improvement Loans Act were taken, from the other properties. ", "51. In the result the appeal fails and is dismissed."], "relevant_candidates": ["0000105132", "0000298190", "0000419395", "0000473527", "0000476355", "0000692982", "0000707752", "0001031996", "0001127301", "0001204171", "0001869233", "0001915577", "0047177633"]} {"id": "0001696091", "text": ["REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 181 OF 2001 ...Appellant Versus and Ors. ...Respondents WITH CRIMINAL APPEAL NO.182 OF 2001 JUDGMENT ", "Dr. , J. ", " ", "1. Challenge in these appeals is to the judgment of of accepting the appeal filed by the respondents who were found guilty of offences punishable under Section 302 read with Section 34 of the Indian Penal Code, 1860 (in short the ` IPC '). held that if on taking overall view of the case right of self defence is made out or looks probable from the evidence on record, that right should not be construed narrowly because the right of self defence is a very valuable right and it has a social purpose. ", " ", "2. Background facts as projected by prosecution in a nutshell are as follows: ", " ", "The incident occurred on 12.7.1978 at about 5.30 a.m. The respondents 1 and 2 are brothers and sons of . On the aforesaid date and time the accused respondents armed with knife and lathi respectively arrived at the `Gotha' of (hereinafter referred to as the `deceased') and accused started beating the deceased with lathi and also asked his brother to kill him, whereupon assaulted the deceased with knife. On hearing the cries of deceased, his brother (PW-1) who was washing his hands at the Hand Pump installed in the east of `Gotha' of , rushed to the scene of occurrence. The cries also attracted (P.W.2), (P.W.4), and . tried to rescue the deceased but he too was assaulted by with knife. Deceased fell down on the ground. The witnesses succeeded in apprehending along with the knife with which he had assaulted the deceased and . However, accused succeeded in making good his escape. Thereafter and other witnesses proceeded to Police Station Kotwali along with and accused on tractor trolley of . Before they could reach police station, died on the way. (P.W.1) prepared F.I.R. (Ex. Ka. I) in his own handwriting and presented the same at Police Station Kotwali at 6.30 a.m. on the same day. and blood stained knife, (Ex.1) recovered from him were handed over to police at the police station, in respect of which memo Ex. Ka. 2 were prepared by (PW-6) who also prepared Check report and registered the case in general diary. (PW-5) was present at the police station when the F.I.R. was lodged. He took up investigation and recorded the statement of first information at the police station. conducted inquest on the dead body of , which had been brought to the police station by first informant and others. The dead body was then sent for postmortem examination with constable and . After recording the statements of and (P.W.4), the Investigating Officer reached the place of occurrence along with first informant and witness . He made inspection of the scene of occurrence and prepared site plan Ex. Ka.13. The place where blood was found has been shown by letter `A' in the site plan. was arrested on the same day. Injured was, however, interrogated on 13.7.1978 and after completing the investigation charge sheet Ex. Ka 15 was submitted against both the accused persons. Dr. conducted autopsy on the dead body of on 12-7-78 at 12 noon and following ante mortem injuries were found. ", "1. Incised wound 2\" 1/4\" x skin deep on right side forehead 1\" above the right eye brow and 1-1/2\" away from right ear margins clean cut, gaping present, blood clots present and wound was horizontally placed. ", "2. Incised wound l\" x 1/4\" x muscle deep on middle of left arm margins clean gaping present, blood clots present. ", "3. Punctured wound 1-1/4'' x 1/2\" x chest cavity deep on right side chest 1\" outer to mid line chest and 4\" away and above to right nipple, lying vertically, margins clean cut gaping present, blood clots present. ", "In the internal examination was found congested and cut underneath injury No.3, Right lung had also a cut Mark 3/4\" x 1/2\" pulmonary vessels had also been cut. The chest cavity contained fresh blood about 520 ml. Stomach was empty while large intestines contained gases and faecal matter. In the opinion of the doctor death was due to shock and hemorrhage as a result of ante mortem injuries. The postmortem report is Ex.Ka.4. ", "The motive for assaulting as alleged in the first information report was that on 10-7-78 had made an attempt to have carnal intercourse with , son of deceased and told this fact to his father. Deceased accosted accused whereupon the latter threatened him with dire consequences. ", "Since the accused persons pleaded innocence, trial was held. In order to substantiate the accusations six witnesses were produced. (PW-1) is the first informant and younger brother of the deceased. (PW-2) is an eye witness. It is to be noted that PW-1 was the injured witness. The accused persons took the stand that on the date of occurrence accused went to throw cow dung in the field in the morning and he was assaulted by with lathi. On hearing his cries his younger brother came there with spear in his hand to save . He assaulted the deceased. ", " ", "As noted above, found the evidence of eye witnesses to be credible, cogent and recorded conviction. In appeal, found substance in the plea of exercise of right of private defence and directed acquittal. ", "Criminal Appeal No.181 of 2001 has been filed by the complainant while State of U.P. has filed other Criminal Appeal No.182 of 2001. ", " ", "3. In support of the appeals, learned counsel for the appellants submitted that has acted on surmises and conjectures and has accepted the plea of exercise of right of private defence. conclusion as regards non-mention in the FIR that the witness managed to evade the lathi blow or about the injury on the accused are legally untenable. has not examined the question as to whether the right of private defence as claimed to have been exercised has been exceeded. It was pointed out that the witness stated about the assault by lathi but in the instant case the deceased does not appear to have received any lathi blow. Since lathi was found at the spot as claimed the defence version, probabilised that deceased had made an assault on accused by lathi. The genesis and origin of the occurrence has been suppressed and true facts have not been presented. , it is submitted, accepted the plea of right of private defence but without any material to substantiate the plea, came to an abrupt conclusion that the right has been exercised and the accused persons were acting in self defence. also came to a conclusion that the injuries on accused were not satisfactorily explained. It was pointed out that those injuries were superficial in nature. To similar effect is the stand taken by the . ", " ", "4. Learned counsel for the accused respondents submitted that in the case of acquittal if two views are possible, the view in favour of the accused has to be accepted. on analyzing the evidence came to a conclusion that the accused persons were exercising the right of private defence. ", "5. Only question which needs to be considered is the alleged exercise of right of private defence. Section 96 , IPC provides that nothing is an offence which is done in the exercise of the right of private defence. The Section does not define the expression `right of private defence'. It merely indicates that nothing is an offence which is done in the exercise of such right. Whether in a particular set of circumstances, a person legitimately acted in the exercise of the right of private defence is a question of fact to be determined on the facts and circumstances of each case. No test in the abstract for determining such a question can be laid down. In determining this question of fact, the must consider all the surrounding circumstances. It is not necessary for the accused to plead in so many words that he acted in self-defence. If the circumstances show that the right of private defence was legitimately exercised, it is open to the to consider such a plea. In a given case the can consider it even if the accused has not taken it, if the same is available to be considered from the material on record. Under Section 105 of the Indian Evidence Act, 1872 (in short `the Evidence Act '), the burden of proof is on the accused, who sets up the plea of self-defence, and, in the absence of proof, it is not possible for the to presume the truth of the plea of self-defence. The shall presume the absence of such circumstances. It is for the accused to place necessary material on record either by himself adducing positive evidence or by eliciting necessary facts from the witnesses examined for the prosecution. An accused taking the plea of the right of private defence is not necessarily required to call evidence; he can establish his plea by reference to circumstances transpiring from the prosecution evidence itself. The question in such a case would be a question of assessing the true effect of the prosecution evidence, and not a question of the accused discharging any burden. Where the right of private defence is pleaded, the defence must be a reasonable and probable version satisfying the that the harm caused by the accused was necessary for either warding off the attack or for forestalling the further reasonable apprehension from the side of the accused. The burden of establishing the plea of self-defence is on the accused and the burden stands discharged by showing preponderance of probabilities in favour of that plea on the basis of the material on record. ( (AIR 1968 SC 702), (AIR 1975 SC 1478), (AIR 1977 SC 2226), and (AIR 1979 SC ", "577). Sections 100 to 101 define the extent of the right of private defence of body. If a person has a right of private defence of body under Section 97 , that right extends under Section 100 to causing death if there is reasonable apprehension that death or grievous hurt would be the consequence of the assault. The oft quoted observation of this in . (AIR 1979 SC 391), runs as follows: ", " ", "\"It is true that the burden on an accused person to establish the plea of self-defence is not as onerous as the one which lies on the prosecution and that, while the prosecution is required to prove its case beyond reasonable doubt, the accused need not establish the plea to the hilt and may discharge his onus by establishing a mere preponderance of probabilities either by laying basis for that plea in the cross-examination of the prosecution witnesses or by adducing defence evidence.\" ", "The accused need not prove the existence of the right of private defence beyond reasonable doubt. It is enough for him to show as in a civil case that the preponderance of probabilities is in favour of his plea. ", " ", "6. A plea of right of private defence cannot be based on surmises and speculation. While considering whether the right of private defence is available to an accused, it is not relevant whether he may have a chance to inflict severe and mortal injury on the aggressor. In order to find whether the right of private defence is available to an accused, the entire incident must be examined with care and viewed in its proper setting. Section 97 deals with the subject matter of right of private defence. The plea of right comprises the body or property (i) of the person exercising the right; or (ii) of any other person; and the right may be exercised in the case of any offence against the body, and in the case of offences of theft, robbery, mischief or criminal trespass, and attempts at such offences in relation to property. Section 99 lays down the limits of the right of private defence. Sections 96 and 98 give a right of private defence against certain offences and acts. The right given under Sections 96 to 98 and 100 to 106 is controlled by Section 99 . To claim a right of private defence extending to voluntary causing of death, the accused must show that there were circumstances giving rise to reasonable grounds for apprehending that either death or grievous hurt would be caused to him. The burden is on the accused to show that he had a right of private defence which extended to causing of death. Sections 100 and 101 , IPC define the limit and extent of right of private defence. ", " ", "7. Sections 102 and 105 , IPC deal with commencement and continuance of the right of private defence of body and property respectively. The right commences, as soon as a reasonable apprehension of danger to the body arises from an attempt, or threat, to commit the offence, although the offence may not have been committed but not until there is that reasonable apprehension. The right lasts so long as the reasonable apprehension of the danger to the body continues. In v. State of Punjab (AIR 1963 SC 612), it was observed that as soon as the cause for reasonable apprehension disappears and the threat has either been destroyed or has been put to route, there can be no occasion to exercise the right of private defence. ", " ", "8. In order to find whether right of private defence is available or not, the injuries received by the accused, the imminence of threat to his safety, the injuries caused by the accused and the circumstances whether the accused had time to have recourse to public authorities are all relevant factors to be considered. Similar view was expressed by this Court in (AIR 1975 SC 87). (See: , alias represented by Inspector of Police, T.N. (2002 (8) SCC 354). ", " ", "9. As noted in (AIR 1991 SC 1316), a person who is apprehending death or bodily injury cannot weigh in golden scales in the spur of moment and in the heat of circumstances, the number of injuries required to disarm the assailants who were armed with weapons. In moments of excitement and disturbed mental equilibrium it is often difficult to expect the parties to preserve composure and use exactly only so much force in retaliation commensurate with the danger apprehended to him where assault is imminent by use of force, it would be lawful to repel the force in self-defence and the right of private-defence commences, as soon as the threat becomes so imminent. Such situations have to be pragmatically viewed and not with high-powered spectacles or microscopes to detect slight or even marginal overstepping. Due weightage has to be given to, and hyper technical approach has to be avoided in considering what happens on the spur of the moment on the spot and keeping in view normal human reaction and conduct, where self-preservation is the paramount consideration. But, if the fact situation shows that in the guise of self-preservation, what really has been done is to assault the original aggressor, even after the cause of reasonable apprehension has disappeared, the plea of right of private-defence can legitimately be negatived. The dealing with the plea has to weigh the material to conclude whether the plea is acceptable. It is essentially, as noted above, a finding of fact. ", " ", "10. The right of self-defence is a very valuable right, serving a social purpose and should not be construed narrowly. ( . (AIR 1971 SC 1857). Situations have to be judged from the subjective point of view of the accused concerned in the surrounding excitement and confusion of the moment, confronted with a situation of peril and not by any microscopic and pedantic scrutiny. In adjudging the question as to whether more force than was necessary was used in the prevailing circumstances on the spot it would be inappropriate, as held by this , to adopt tests by detached objectivity which would be so natural in a room, or that which would seem absolutely necessary to a perfectly cool bystander. The person facing a reasonable apprehension of threat to himself cannot be expected to modulate his defence step by step with any arithmetical exactitude of only that much which is required in the thinking of a man in ordinary times or under normal circumstances. ", "11. In the illuminating words of ( on Crime, 11th Edition Volume I at page 49): ", " ", "\"....a man is justified in resisting by force anyone who manifestly intends and endeavours by violence or surprise to commit a known felony against either his person, habitation or property. In these cases, he is not obliged to retreat, and may not merely resist the attack where he stands but may indeed pursue his adversary until the danger is ended and if in a conflict between them he happens to kill his attacker, such killing is justifiable.\" ", "12. The right of private defence is essentially a defensive right circumscribed by the governing statute i.e. the IPC , available only when the circumstances clearly justify it. It should not be allowed to be pleaded or availed as a pretext for a vindictive, aggressive or retributive purpose of offence. It is a right of defence, not of retribution, expected to repel unlawful aggression and not as retaliatory measure. While providing for exercise of the right, care has been taken in IPC not to provide and has not devised a mechanism whereby an attack may be a pretence for killing. A right to defend does not include a right to launch an offensive, particularly when the need to defend no longer survived. ", " ", "13. The above position was highlighted in (2005 (10) SCC 358). ", "14. In the instant case held that the lathi injuries were there but came to erroneous conclusion that the injuries appear to have been inflicted in a different manner. also came to a conclusion that if the spear was used blunt injury could not have been caused. ", "15. Unfortunately, overlooked that the categorical finding recorded by the trial Court was that one side of the weapon was blunt and other side was sharp and one blunt injury was explained. appears to have wrongly interpreted the opinion of the doctor. The genesis according to has not been established. If that be so, there was no question of exercise of right of private defence. 's conclusion as regards shifting the onus on the prosecution is also without any legal foundation. It is to be noted that nothing was found in the field as was pleaded by the defence to substantiate the right of private defence. The FIR was promptly lodged. The doctor had opined that the injury was possible with knife but without any discussion held otherwise. So far as the alleged non-explanation of injuries on the accused aspect is concerned, clearly overlooked the relevant materials. From the evidence it is clear that after the accused persons assaulted the deceased and the injured witnesses they were beaten by the villagers. In the FIR also there is mention about the beating given by villagers. held that the details of the assaults were not given in the FIR. In this context, the view expressed by this Court in (2004 (12) SCC 269) needs to be noted. In paras 7 and 8 it was observed as follows: ", "\"7. Coming to the question whether on the basis of a solitary evidence conviction can be maintained. A bare reference of Section 134 of the Indian Evidence Act, 1872 (in short `the Evidence Act ') would suffice. The provision clearly states that no particular number of witnesses is required to establish the case. Conviction can be based on the testimony of single witness if he is wholly reliable. ", " ", "Corroboration may be necessary when he is only partially reliable. If the evidence is unblemished and beyond all possible criticism and the is satisfied that the witness was speaking the truth then on his evidence alone conviction can be maintained. Undisputedly, there were injuries found on the body of the accused persons on medical evidence. That per se cannot be a ground to totally discard the prosecution version. This is a factor which has to be weighed along with other materials to see whether the prosecution version is reliable, cogent and trustworthy. When the case of the prosecution is supported by an eyewitness who is found to be truthful, as well, mere non-explanation of the injuries on the accused persons cannot be a foundation for discarding the prosecution version. ", "Additionally, the dying declaration was found to be acceptable. ", "8. Other plea emphasized related to alleged exercise of right of private defence. Merely because there was a quarrel and two accused persons sustained injuries, that does not confer a right of private defence extending to the extent of causing death as in this case. Though such right cannot be weighed in golden scales, it has to be established that the accused persons were under such grave apprehension about the safety of their life and property that retaliation to the extent done was absolutely necessary. No evidence much less cogent and credible was adduced in this regard. The right of private defence as claimed by the accused persons have been rightly discarded.\" ", " ", "16. So far as non-explanation of superficial injuries on the accused persons is concerned, in . (2004 (13) SCC 257), it was held as follows: ", "\"Non-explanation of injuries by the prosecution will not affect prosecution case where injuries sustained by the accused are minor and superficial or where the evidence is so clear and cogent, so independent and disinterested, so probable, consistent and creditworthy, that it outweighs the effect of the omission on the part of prosecution to explain the injuries. As observed by this in (AIR 1972 SC 2593) prosecution is not called upon in all cases to explain the injuries received by the accused persons. It is for the defence to put questions to the prosecution witnesses regarding the injuries of the accused persons. When that is not done, there is no occasion for the prosecution witnesses to explain any injury on the person of an accused. In and . v. State of Bihar (AIR 1988 SC 863), it was observed that the obligation of the prosecution to explain the injuries sustained by the accused in the same occurrence may not arise in each and every case. In other words, it is not an invariable rule that the prosecution has to explain the injuries sustained by the accused in the same occurrence. If the witnesses examined on behalf of the prosecution are believed by the in proof of guilt of the accused beyond reasonable doubt, question of obligation of prosecution to explain injuries sustained by the accused will not arise. When the prosecution comes with a definite case that the offence has been committed by the accused and proves its case beyond any reasonable doubt, it becomes hardly necessary for the prosecution to again explain how and under what circumstances injuries have been inflicted on the person of the accused. It is more so when the injuries are simple or superficial in nature. In the case at hand, trifle and superficial injuries on accused are of little assistance to them to throw doubt on veracity of prosecution case. ( (2003) 8 Supreme 476).\" ", "17. The basic question which was to be considered by was that even if the right of private defence was exercised, whether that was exceeded. In the instant case, the evidence clearly shows that though there may be at some point of time the exercise of right of private defence by the respondents existed, the same has been exceeded. The respondents are therefore convicted of offence punishable under Section 304 Part I . Custodial sentence of 8 years would meet the ends of justice. The appeals are allowed to the aforesaid extent. The respondents who are on bail shall surrender to custody forthwith to serve the remainder of sentence. ", " ", "................................ ", "(Dr. ) .................................J. ", "(P. SATHASIVAM) .................................J. ", "( ALAM) New Delhi, August 22, 2008"], "relevant_candidates": ["0000777448", "0000853570", "0001043321", "0001055016", "0001221178", "0001312126", "0001344060", "0001479705", "0001957166"]} {"id": "0001703516", "text": ["JUDGMENT , J. ", "1. This is an application in revision against the order of the Chief Judge of , Bombay, dismissing the plaintiff's suit in pursuance of an award under by-law 38A of . ", "2. The applicant filed a suit in at Bombay to recover a sum of Rs. 1,023-8-0, consisting of Rs. 1,000, the amount paid as deposit, together with Rs. 11 as interest, and Rs. 12 8-0 on account of profits in the transactions of sale and purchase of one hundred bales of cotton done by the defendants as the plaintiff's brokers, on December 10, 1926, and December 14, 1926. The defendants admitted the amount of the deposit and interest, and also the two contracts sued upon ; but contended that there were other contracts and several payments by them on account of the transactions which resulted in a loss to the plaintiff, and the amount of Rs. 100-10-0 was payable by the plaintiff to the defendants, and that the whole matter had been referred by the defendants to the arbitrators of , and, therefore, the Court had no jurisdiction to try the suit. ", "3. The learned Chief Judge of stayed the petitioner's suit pending the arbitration. On an application in revision, No. 148 of 1927, refused to interfere with the order of stay, and directed that all the objections to the award might be taken before the learned Chief Judge. The learned Chief Judge appreciated the force of the argument on behalf of the plaintiff that the award was null and void, as it embraced matters not recognised by law, and that the contracts on which the plaintiff sued were in sanctioned forms whereas the arbitrators in arriving at their conclusion considered other contracts which were made in contravention of the by-laws, but held that under by-law 38A, all unpaid claims, whether admitted or not, were required to be referred to the arbitration of two disinterested persons, and therefore the reference to arbitration was valid, and that if the arbitrators in investigating the dispute referred to other contracts and took into consideration the liabilities under non-sanctioned contracts, it did not amount to any judicial misconduct, and the award was binding as an adjustment of the suit according to the ruling in (1920) I.L.R. 45 Bom. 245, s. o. 22 Bom. L.R. 1048, and, therefore, dismissed the plaintiff's suit, as the arbitrators had held that instead of the amount of Rs. 1,023-8-0 being due to the plaintiff, the amount of Rs. 100-10-0 was due by the plaintiff to the defendants. ", "4. was incorporated under the Bombay Cotton Contracts Act, XIV of 1922. The order of staying the suit was not interfered with by . has power to stay the suit in order to enable the parties to it to refer to arbitration under para, 18 of Schedule II of the Civil Procedure Code, 1908, which has been made applicable to by the rules under Section 9 of the Presidency Small Cause Courts Acts, or under Section 19 of the Indian Arbitration Act, IX of 1899 according to the decision in . ", "5. The next question is, whether had jurisdiction to accept the award which was, as alleged by the applicant, illegal and void. It is urged on behalf of the applicant that, so far as the deposit of Rs. 1,000 was concerned, the arbitrators had no power to decide the question relating thereto, and that the arbitrators could only give an award in respect of the two contracts which were in the sanctioned form, and the award was illegal so far as it proceeded to take into consideration all other contracts alleged by the defendants which were not in the sanctioned form. We are unable to accept the argument on behalf of the applicant that the deposit of Rs. 1,000 was unconnected with the contracts on which the suit was based. The receipt for the deposit of Rs. 1,000 recites that the deposit was taken from the plaintiff for doing business in cotton. It represents the earnest or margin money required to be deposited for any loss that would have resulted from the contracts made by the plaintiff with the defendants brokers. The sanctioned contract form at page 68 of the rules refers to a margin to be paid and maintained by the broker until the completion of the contract. It would, therefore, follow that the amount of Rs. 1,000 deposited is closely connected with the contracts entered into by the plaintiff with the defendants which were in the sanctioned form. By-law 38 A framed under the Act provides as follows:- ", "All unpaid claims whether admitted or not and all disputes (other than those relating to quality) arising out of, or in relation to, (a) contracts (whether forward or 'ready' and whether between members or between a member and a non-member) made subject to these by-laws, or (b) the rights and/or responsibilities of commission agents, muccadums and brokers not parties to such contracts, shall be referred to the arbitration of two disinterested persons one to be chosen by each disputant... ", "6. By-law 81 runs as follows:- ", "Contracts between agents and their constituents, e.g., between a member and a non-member or between a member acting as an agent and a member acting as his constituent shall be subject to the by-laws and shall be in writing in the form given in the Appendix (pages 67, 68, 69 and 70), provided that to such contracts by-laws 130 to 166 inclusive shall not apply. ", "A member whose constituent has agreed in writing to sign the prescribed form of contract and fails or refuses to do so after terms have been arranged shall be treated in all respects as if he had done so and both parties shall have the rights and remedies accorded by these by-laws. ", "7. It is, therefore, necessary that the contracts must be in writing and signed in the sanctioned form, or in the absence of any contract in the sanctioned form there must be a written undertaking by the constituent to sign. A mere oral undertaking would be insufficient according to the decision in v. (1927) 30 Bom. L.R. 122. The contracts which are not in the sanctioned form are void under Section 5 of the Bombay Cotton Contracts Act, XIV of 1922. It would, therefore, follow that the applicant could bring a suit in on the two contracts which were in the sanctioned form to recover the deposit and also the profit accruing thereunder, and it would be open to the defendants to apply under the Indian Arbitration Act to stay the action, but it is not open to the defendants to say that the action would not lie. . referred to by-law 38 of the East India Cotton Association and observed as follows (p. 1328):- ", "I can see nothing in that clause to make arbitration a condition precedent to the right to bring an action. It seems to mo to be an ordinary provision for referring disputes to arbitration, and such a provision does not in any way oust the jurisdiction of the . If an action is brought in respect of a matter covered by the arbitration clause, the defendant can apply under the Indian Arbitration Act to stay the action, but it is not open to him to say that the action does not lie. ", "8. With regard to by-law 81, it was held that a suit could not be maintained on a contract which was not in compliance with the statutory form, unless there was an agreement in writing to sign the prescribed form of contract. ", "9. In the present case it is alleged on behalf of the applicant that there were only two contracts in writing in the sanctioned form on which the suit is based, and that the arbitrators took into consideration other contracts which were not in the sanctioned form, nor was there any agreement in writing to sign those contracts. It is urged, on the other hand, that the award (SIC) not disclose the fact that the arbitrators took into consideration contracts which were not in the sanctioned form. It is conceded on behalf of the opponents, and it is also clear from the authorities, that if a suit had been brought by the defendants on any contracts which were not in the sanctioned form in the absence of any agreement in writing to sign those contracts, it would not have been maintainable. It is, therefore, contended on behalf of the applicant that the arbitrators took into consideration contracts which were not in the sanctioned form, and that the whole award is illegal and void, as the award which is legal so far as it is based on the contracts in sanctioned forms cannot be separated from the other portion of the award which is based on contracts which were illegal and void. The remarks in the judgment of the learned Chief Judge lend support to the contention on behalf of the applicant that the arbitrators took into consideration other contracts between the parties which were not in the sanctioned form, though there is no specific and clear finding on that point. The award, if it has proceeded on contracts which were not in the sanctioned form, would be illegal and void, and if the portion of the award which is illegal and void cannot be separated from the portion of the award which is valid, the whole award would be invalid. . (1920) 34 C.L.J. 253 it was held that if in the event of an award made by arbitrators on grounds some of which did, while the others did not, justify the exercise of their jurisdiction, the Court cannot hold with certainty that the arbitrators acted exclusively on grounds within their jurisdiction, and the award is null and void on the principle that if the bad is not separable from the good, the whole is bad. See also (1915) 22 C.L.J. 237, 240. ", "10. The learned Chief Judge, however, held that the award not having been set aside, he was bound to dismiss the plaintiff's suit on the authority of (1920) I.L.R. 45 Bom. 245, s.c. 22 Bom. L.R. 1048, on the ground that the award was an adjustment of the suit. Where the parties to a suit refer their disputes to arbitration without the intervention of the and an award is made, an application to pass a decree in terms of the award is an application to record a compromise within the meaning of Order XXIII, Rule 3. It was observed by (p. 260):- ", "But when parties have been negotiating for a settlement, and one party con\" aiders a settlement has been arrived at, which the other party denies, or where there has been a settlement which one party seeks to avoid on any of the grounds on which an agreement can be avoitied, recourse is had to Order XXIII, Rule 3, so that the may determine whether an adjustment has actually been ,made or whether an adjustment made is one which can be recorded. ", "11. , however, at page 270, held that Order XXIII, Rule 3, of the Civil Procedure Code, contains provisions corresponding to the plea of \"accord and satisfaction after writ,\" and that an agreement to refer to arbitration after suit together with the award thereon is on the same footing as a direct settlement between the parties, but the award to be effective for such a plea must be a valid one according to the general rules of law governing the validity of awards in arbitration proceedings. ", "12. It would, therefore, follow that if the award is invalid or illegal, it cannot be recorded as an adjustment of the suit. If the defendants had proceeded under the Indian Arbitration Act and got a decree on the award in , or if the plaintiff had got the award set aside under the Indian Arbitration Act , the matter would have been conclusive. But where, as in the present case, the award is sought to be recorded as an adjustment of the suit, the has jurisdiction to consider whether the award is legal and enforceable. The view in has been confirmed by the full bench decision in v. (1927) I.L.R. 51 Bom. 908, s.c. 29 Bom. L.R. 1254, F.B., where it was held that where in a suit parties have referred their differences to arbitration without an order of the and an award is made, a decree in terms of the award cap be passed by the under Order XXIII, Rule 3, of the Civil Procedure Code, but not otherwise. At page 948 observed:- ", "I would only add that in my judgment the word 'lawful' in Order XXIII Rule 3, refers to the nature of the compromise arrived at, not to the procedure which the parties may have followed in bringing it about. But it is of course the duty of the to be satisfied that there has in fact been an adjustment by compromise. ", "13. Under by-law 38 A. only disputes arising out of or in relation to contracts made subject to the by-laws shall be referred to arbitration. Under by-law 81 such contracts must be in writing in the form given in the appendix. It would, therefore, follow that the arbitrators had no jurisdiction to decide disputes arising out of contracts not in the sanctioned form. In cases where an arbitrator enters upon a consideration of matters which are not referred to him or which he has no jurisdiction to try by arbitration clause or submission between the parties, the appearance of the party after objection taken and protest made, does neither give the arbitrator authority to make an award nor estop him from urging that the arbitrator has exceeded his authority. See v. (1864) 33 L.J.C.P. 337 and (1927) 29 Born. L.R. 1087, 1092. The attendance of the applicant before the arbitrators after protest would not amount to a waiver of his right to object to the jurisdiction of the arbitrators. ", "14. It is urged on behalf of the applicant that he was never prepared to refer the dispute between the parties on contracts which were not in the sanctioned form to arbitration, and the award on such contracts as were not in the sanctioned form would be illegal and void. It would, therefore, appear that if the contention of the applicant, which the arbitrators entered upon a consideration of matters when they had no jurisdiction to do so, is correct, it cannot be said that the suit has been adjusted by a lawful compromise. The view of in (1921) I.L.R. 49 Cal. 608 that where in a pending suit the parties go to private arbitration without the consent of the , the award cannot be enforced either under Order XXIII, Rule 3, or under the provisions of the Indian Arbitration Act , has not been accepted by the full bench decision in v. (1927) I.L.R. 51 Bom. 908, s.c. 29 Bom. L.R. 1254, F.B. ", "15. It would, therefore, be necessary to send the case back to the lower to decide on taking fresh evidence, if necessary, whether the arbitrators took into consideration the contracts which were not in the sanctioned form, and which were illegal and void under Section of the Bombay Cotton Contracts Act, XIV of 1922. If the comes to the conclusion that the arbitrators took into consideration contracts which were not in the sanctioned form, the award would be illegal and void and the legal part of the award would not be capable of being separated from the illegal part. The would then be entitled to disregard the award and decide the suit on the merits. ", "16. The lower , in my opinion, failed to exercise the jurisdiction vested in it by law in omitting to consider the question whether the award was a lawful compromise under Order XXIII, Rule 3. ", "17. We would, therefore, reverse the decree of the lower Court dismissing the suit, and send the case back for disposal of the suit in the light of the remarks made in this judgment. ", "18. Costs of this application will be casts in the suit. ", "Broomfield, J. ", "19. I agree. ", "20. As this is a matter of importance and we are differing from the learned Chief Judge of after the full has declined to issue a rule, I think it desirable to state my reasons. ", "21. The plaintiff filed his suit on February 12, 1927. The plaint was as follows:- ", "The plaintiff above named states the following:- ", "(1) That on December 6, 1926, the plaintiff engaged the defendants as his brokers to effect transactions in cotton on his behalf, and as required by the defendants deposited a sum of Rs. 1,000 with them the same day. The defendants agreed to pay interest at six per cent, per annum on that amount. ", "(2) That on December 10, 1926, on instructions from plaintiff the defendants effected a sale on behalf of plaintiff of one hundred bales of cotton of April-May 1927 delivery at Rs. 242 per Candy. ", "(3) That on December 14, 1926, on instructions from plaintiff, to cover the above sale, the defendants effected a purchase on behalf of plaintiff of one hundred bales of cotton of April-May 1927 delivery at Rs. 240-12-0 per Candy. ", "(4) That in respect of these transactions a sum of Rs. 12-80 became due by the defendants to the plaintiff after giving credit for brokerage to the defendants, as per memo of account hereto annexed and marked 'A.' (5) That the plaintiff several times verbally and finally by his 's letter of February 3, 1927, called upon the defendants to pay up the said sum of Rs. 1,000 and interest due thereon as mentioned in para 1 of this plaint and the sum of Rs. 12-8-0 as per para 4 hereof but the defendants have failed to pay the same or any part thereof. ", "(6) That the total amount due by the defendants to the plaintiff comes to Rs. 1,023-8-0 inclusive of interest up to date. ", "(7) The plaintiff therefore prays for judgment for Rs. 1,023-8-0 and interest thereon at six per cent till judgment and further interest on judgment at six per cent. per annum till realisation and such further and other relief as to the may seem fit. ", "22. On March 14, 1927, the defendants filed the following written statement:- ", "1. Deny plaintiff's right to sue. ", "2. Deny that plaintiff engaged the defendants as brokers. ", "3. Say it was one who was doing business in the name of by whom all the transactions mentioned in the plaint were done and all orders for the transactions given to the defendants. ", "4. Without prejudice say that plaintiff has not filed the suit on the whole account between the parties and say that the real account between the parties is given in the annexed particulars marked 'A' and on the whole account a sum of Rs. 100-10 will be found due by the said . ", "5. Without prejudice claim credit for Rs. 300 paid as under: - ", "Rs, 50 on January 10, 1927. ", "Rs. 100 on January 18, 1927. ", "Rs. 150 on January 31, 1927. ", "6. Say that disputes having arisen between the (SIC) all matters have been referred by the defendants to for their arbitration and the said Association have already appointed arbitrators and the matter is pending before the said arbitrators.\"7. Say that the suit should be stayed. ", "23. The suit was stayed sine die pending the result of arbitration on the defendants' reference. ", "24. On April 12, 1927, an award was made in the following terms:- ", "We were nominated arbitrators in a dispute between the above parties by the Deputy Chairman of . We notified both the parties to be present at a meeting convened on March 28, 1927, when Mr. representing the plaintiffs and Mr. representing the defendant with his pleader wore present. The meeting was adjourned to April 2, 1927, when also both the parties were present. ", "After hearing them fully and carefully looking into the accounts, correspondence and papers in respect of the above matter, we find that the plaintiffs' claim of Rs. 100-10-0 is fully corroborated by their books of accounts, etc., that were placed before us and by the oral evidence of independent witnesses. We therefore award the plaintiffs' claim of Rs. 100-10-0 together with interest at six per cent till the date of payment, plus Rs, 70 for cost of this arbitration against the defendant. ", "25. Against the order of stay Revision Application No. 148 of 1927 was made to this Court. The Court refused to interfere on the ground that it was an interlocutory order, and directed that the objections to the award might be taken before the Chief Judge. The suit was then again taken up in at the stage at which it was left, except that in the meantime the award had been made. ", "26. The plaintiff objected that the award was null and void because the arbitrators had taken into consideration certain transactions which were not in the prescribed contract forms as required by by-law 81 of . The terms of bylaw 81 have been set out in the judgment of my learned brother. Section 5 of Act XIV of 1922 provides that contracts in contravention of any by-law shall be void. The learned Judge said that he appreciated the force of the argument, but he held that there was a valid reference to arbitration under by-law 38A and that the award was binding on the parties as an adjustment of the suit. He cited and apparently professed to follow (1920) I.L.R. 45 Bom. 245, s.c. 22 Bom. L.R. 1048. The plaintiff's suit was dismissed and he has come to this in revision. ", "27. At the outset it should be stated that the plaintiff has all along denied that he had any dealings with the defendants other than the transactions mentioned in the plaint, and, at any rate so far as the proceedings in are con cerned, the other transactions alleged by the defendants have not been proved. On the other hand, it has not been proved that the other transactions referred to were not in the standard forms, though the plaintiff has asserted that they were not and the defendants do not appear to have ever asserted that they were. Again, it cannot be said to be apparent from the record that the arbitrators in making their award took account of any transactions not in the standard forms, although it is probable that they did so since they have awarded the defendants the exact sum claimed in their written statement. These questions, in the view we take of the case, it will be necessary for the trial to clear up. ", "28. But it appears from the judgment of the learned Chief Judge that he dealt with the case on the basis that there were some other transactions between the parties which contravened the provisions of by-law 81, and that the award covered these transactions also. For the purposes of this application we must take it that the facts are so, and consider whether on that basis the suit has been rightly dismissed. ", "29. As I have found some difficulty in analysing the learned Judge's reasoning, I quote the relevant passage from his judgment in full:- ", "The arbitration was, however, set up under by-law 38A, of the bylaws framed under the Act. It runs as follows:-' All unpaid claims, whether admitted or not, and all disputes arising out of, or in relation to, (a) contracts made subject to these by-laws, or (b) the rights and responsibilities of brokers, shall be referred to the arbitration of two disinterested persons.' The facts here are that the defendant did not admit the claim of the plaintiff. The existence of that fact is enough to give jurisdiction to the arbitrators. Plaintiff contends that the claim to the margin money and Rs. 12-8-0, for profit, was an admitted claim. Defendant disputes and denies it. But; granting that it was so, still it was an unpaid claim, and all unpaid claims are referable to arbitration, whether admitted or not. The arbitrators had therefore to determine whether the claim to Rs. 1,012-8-0 was an admitted claim or not, They had jurisdiction, even if it was admitted,-which it was not,-because it was unpaid. I think power is taken in oases of admitted but unpaid claims, deliberately by the , in respect of brokers and others, so that where they find that there are unjustifiable instances of any broker admitting claims, but not paying them, action can be taken against him, In investigating the dispute, they had, therefore, to refer to the whole account and in doing so, if they took into consideration liabilities under non-sanctioned contracts, it would not vitiate or invalidiate their award, as it would not amount to any judicial misconduct on their part. Ab initio, I find, that the reference was a valid one, as conditions calling for it under by-law 38 did exist in this case. Taking plaintiff's case at its best, there was an unpaid claim, arising under sanctioned contracts, and if there was an unpaid claim, a reference was called for, as a reference has to be made in case of ' all unpaid claims.' Really speeking, he should have referred the matter to arbitration, as defendant was not paying him his admitted claim. ", "Even if under the Limitation Act , the remedy of the parties to have the award enforced as an order of the or otherwise, is barred, it cannot be said that they have no other rights in respect of it. I need not discuss what they are. ", "I find that there was a valid reference and that there is an award published under it. It is therefore binding on parties as an adjustment of the suit, . Whether the plaintiff appeared before the arbitrators under protest or not, does not affect the submission and the award, as under the by-law there was a valid reference. ", "30. The findings appear to be: (1) There was a valid reference to arbitration under by-law 38A, and (2) as there was a valid reference and an award published under it, and as the award is not invalidated by judicial misconduct on the part of the arbitrators the fact that the arbitrators took into consideration liabilities under void contracts not being in the learned Judge's view judicial misconduct,-therefore, the award is binding as an adjustment of the suit. ", "31. As regards the reference to arbitration it is to be noted, first of all, that there has been no submission to arbitration in the ordinary sense by both parties to the dispute. I do not say that it would necessarily have made any difference if the plaintiff and the defendants had agreed that the whole series of transactions including the void contracts should be referred to the arbitrators, but it is important to bear in mind that there was no such agreement. The defendants placed before the arbitrators what they considered to be the subject-matter of the arbitration. The plaintiff appeared in the proceedings under protest, and he is only bound by them in so far as they can be held valid under by-law 38A: see (1027) 29 Bom. L.R. 1087. ", "32. The learned Judge says that the plaintiff had an unpaid claim, namely, for Rs. 1,023-8-0, arising out of, or relating to, the two contracts made subject to the by-laws, that really speaking he ought to have referred the matter to arbitration himself, and that as he did not, the arbitrators had jurisdiction to consider the claim on the defendants' reference. So far I have DO difficulty in following him. But the real question which it seems to me the learned Judge has hardly faced is this: When there is an unpaid claim or a dispute arising out of, or relating to, a series of transactions consisting partly of contracts made subject to the by-laws and partly of contracts not so made, does bylaw 38A empower one party to refer the whole matter to arbitration without the consent of the other, and if a reference is so made, have the arbitrators authority to deal with the whole series of transactions? Now, there was no agreement between the parties, as I have said, and the arbitration proceedings depend for their validity on the provisions of by-law 38A. These have been set out in my learned brother's judgment. So far as Clause (a) is concerned, it is clear that arbitration is not contemplated or made compulsory in the case of contracts not made subject to the by-laws. In Clause (b) \"such contracts\" mean contracts made subject to the by-laws, and the meaning of the clause seems to be that when commission agents or brokers are concerned in such contracts, and there is a dispute as to their rights or liabilities, the dispute shall be referred to arbitration although they were not actually parties to the contracts. It would be putting a very unnatural interpretation on the by-law as a whole, if we were to take the words \"not parties to such contracts,\" i.e., not parties to contracts subject to the by-laws, as though they meant \" parties to contracts not subject to the bylaws,\" and I may say that no such construction appears to have been put upon the words either by the learned Judge or by the learned advocate for the opponents. There is nothing in the by-law then which gives power to one of the two disputing parties to refer any matters to arbitration which do not arise out of valid contracts, and the learned Judge's finding that there was a valid reference in this case appears to me to be clearly wrong. As to the award, it is not altogether clear to me whether the learned Judge held it to be valid or not. What he says is:- ", "In investigating the dispute, they had, therefore, to refer to the whole account and in doing so, if they took into consideration liabilities under non-sanctioned contracts, it would not vitiate or invalidate their award, as it would not amount to any judicial misconduct on their part. ", "33. It seems that this might mean either that the arbitrators were justified in looking at the whole account, or that they; were not justified in doing so, but the could not interfere and must accept the award because there is nothing amounting to judicial misconduct. If, as I hold, the submission to arbitration as regards the whole series of transactions is invalid, it follows that the award based on a consideration of the whole series of transactions must also be invalid. The authority of the arbitrators is limited to the matters lawfully submitted to them. Several authorities were cited on this point. I need only refer to (1884) I.L.R. 9 Bom. 82, noting that the present is not a case in which the part of the award which is beyond the submission can be separated from that which is within it. As I have suggested it is by no mears clear that the award would have been valid if it had been entirely within the terms of the submission, for if the arbitrators were at liberty to take account of the contracts not in the prescribed form, they would be giving effect to contracts which the law has declared to be void, and that would apparently be contrary to public policy. In that connection I may refer to the cases cited in 's Commentary on Order XXIII, Rule 3, under the heading \"Lawful agreement or compromise\", 9th Edition, page 822; but I need not go into the cases in detail, because, in the view I take, the point does not actually arise in this case. ", "34. If, on the other hand, the learned Judge's view was that the award was not a lawful one, but that he had no jurisdiction to go into that question, then on that point also, I think, he was clearly wrong. If the award had been made a decree of , then, of course, no order could have been made in the plaintiff's suit inconsistent with such decree. But that course has not been followed, and it is well settled that the mere making of an award even on a valid submission does not, ipso facto, oust the jurisdiction of the : see 3 K.B. 257, cited as an authority by in v. (1929) 31 Bom. L.R. 1403, and also (1930)32 Bom. L.R. 1319, 1328. In the case of (1920) I.L.R. 45 Bom. 245, s.c. 22 Bom. L.R. 1048, which the learned Judge himself appears to have made the basis of his decision, it was held that an award could be regarded as an adjustment of the suit under Order XXIII, Rule 3, and the terms of that rule make it clear that the must first be in a position to hold that the award amounted to a lawful agreement or compromise. ", "35. For these reasons I agree with the order proposed by my learned brother."], "relevant_candidates": ["0000200713", "0000372465", "0000396793", "0000700585", "0001035490", "0001367964", "0001376906", "0001431069", "0001879039"]} {"id": "0001714839", "text": ["PETITIONER: AND . Vs. RESPONDENT: STATE OF ORISSA AND . DATE OF JUDGMENT04/04/1991 BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. KASLIWAL, N.M. (J) AGRAWAL, S.C. (J) CITATION: 1991 AIR 1617 1991 SCR (2) 105 1991 SCC Supl. (1) 430 JT 1991 (2) 439 1991 SCALE (1)617 ACT: Orissa Cess Act, 1962: Sections 5-7--Constitutional validity of. Orissa Cess Rules, 1963: Rule 6A. Bengal Cess Act (Act IX of 1880) (As applicable to of Bihar): Sections 4,5,6 and 9-- Constitutional validity of. Madhya Pradesh Upkar Adhiniyam, 1981: Part IV--Section 11--Constitutional validity of. Madhya Pradesh Karadhan Adhiniyam 1982: Part IV-- Section 9-Constitutional validity of. Madhya Pradesh Mineral Areas Development Cess Rules, 1982: Rule 3 and 10. Land Cess-Levy of cess based on royalty derived from mining lands-Nature, character and validity of- Legislatures-Legislative competence of-Whether denuded by enactment of Mines and Minerals (Regulation and Development) Act . 1957. `Royalty'--Whether tax. `Land Revenue'--Connotation of. Constitution of India, 1950: Seventh Schedule- List 1 Entries 52 and 54- List II Entries 5, 18, 23, 45, 49. 50 and 66- Law-Central law-Doctrine of occupied field- Act encrouching field occupied by Central Act -Effect of. Articles 142, 246 and 265-Cess -Constitutional invalidity-Consequences of -Refund of cess whether automatic and inevitable consequence-Declaration of invalidity and determination of relief in consequence whether two different things-Relief whether discretion of -Power of to would or restrict the relief-Doctrine of prospective overruling and doctrine of unjust enrichment-Applicability of. Article 277- Essential requirements of the Article- Discussed. Practice and procedure: Undertaking given by the parties 106 directions given by Effect of. HEADNOTE: The s of Orissa, Bihar and Madhya Pradesh levied a cess which was based on the royalty derived from mining lands. The cess was levied by these s under their respective statutes viz. Orissa Cess Act, 1962, Bengal Cess Act, 1880 (as applicable to the of Bihar), Madhya Pradesh Upkar Adhiniyam 1981 and Madhya Pradesh Karadhan Adhiniyam, 1982. The assesses challenged the constitutional validity of the cess by filing various petitions in of Orissa declared the cess unconstitutional on the ground that it was beyond the legislative competence of s, but rejected the prayer of the assessees for a direction to the to grant refund of the cess collected from the assessees. Against the decision of the assessees have filed appeal in this whereas the of Orissa has filed a cross-appeal. also declared the levy of cess unconstitutional on the ground that it was beyond the legislative competence of the legislature. Against the decision of the of Madhya Pradesh has filed an appeal in this . On the other hand dismissed the writ petition of the assessee. Against the decision of the assessee has filed an appeal in this court. In appeal to this court, it was contended on behalf of the of Orissa; that (i) the levy of cess being referable to Entries 45, 49 and 50 of the List of the Seventh Schedule of the Constitution the impugned legislation was within the legislative competence of the legislature; (ii) the limitations imposed in the statute on the modes of utilisation of cess supports a view that the cess is fee on which the legislature is competent to legislate under Entry 23 read with Entry 66 of the List; (iii) since the impugned Act was concerned with the raising of funds to enable panchayats and Samithis to discharge their responsibilities of local administration and take steps for proper development of the area under their jurisdiction, the impugned legislation was referable to Entry 5 of List; and (iv) the enactment of the Central Legislation viz. Mines and Minerals (Regulation and Development) Act , 1957 has not denuded the legislation of its competence to enact the impugned legislation since the scope and subject matter of the two legislations are entirely different and the impugned Legislation does not encroach upon the field covered by the Central Legislation i.e. 1957 Act. 107 On behalf of the assessees it was contended inter alia that (i) all the levies were ultra vires for the reasons given by this in the case; (ii) the cannot seek to sustain the levy under the Bengal Cess Act 1880 by relying on Article 277 of the Constitution; and (iii) the levy being unconstitutional the should direct the s to refund the cess collected from the assessees because (a) a refund is the automatic and inevitable consequence of the declaration of invalidity of tax and (b) the s have given undertakings before this that they would refund the amount collected in case the levy is declared invalid by this . Disposing of the appeals, this , HELD: 1. The levy of cess under sections 5 to 7 of the Orissa Cess Act, 1962 is beyond the competence of . [169B] 1.1. A royalty or the tax thereon cannot be equated to land revenue. Therefore the cess cannot be brought under Entry 45 of List II. [142D] ., 1 S.C.C. 12, followed. 1.2 A tax on royalties cannot be a tax on minerals and is outside the purview of Entry 50 of List II. Even otherwise, the competence of under the said Entry is circumscribed by \"any limitations imposed by by law relating to mineral development\". The Mines and Minerals (Regulation and Development) Act , 1957 is a law of relating to mineral development and Section 9 of the said Act empowers to fix, alter, enhance or reduce the rates of royalty payable in respect of minerals removed from the land or consumed by the lessee, Sub-Section (3) of Section 9 in terms s that the royalties payable under the Second Schedule to that Act shall not be enhanced more than once during a period of three years. This is a clear bar on the legislature taxing royalty so as, in effect, to amend the Second Schedule to the Central Act . This is exactly what the impugned Act does. Therefore the validity of the impugned Act cannot be upheld by reference to Entry 50 of List II. And if the cess is taken as a tax falling under Entry 50 it will be ultra vires in view of the provisions of the Central ACt. [144B, 153B-D, 168D] ., 1 S.C.C.12, followed. 108 ., 2 S.C.R.537, Justice 's dissent explained. 1.3 There is a difference in principle between a tax on royalties derived from land and a tax on land measured by reference to the income derived therefrom. A tax on buildings does not cease to be such merely because it is quantified on the basis of the income it fetches. But in the impugned legislation the levy is not measured by the income derived by the assessee from the land, as is the case with lands other than mineral lands. The measure of the levy is the royalty paid, in respect of the land, by the assessee to his lessor which is quite a different thing. The impugned statute only purports to levy a cess on the annual value of all land. There is a clear distinction between tax on land and tax on income arising from land. The former must be one directly imposed on land, levied on land as a unit and bearing a direct relationship to it. A tax on royalty cannot be said to be a tax directly on land as a unit. Hence the cess is outside the purview of Entry 49 List II. [148H, 149A-D] v. , 3 Ss.C.R. 47; v. The province of East Punjab, F.C.R.207; , 3 S.C.R.211; , 2 S.C.R. 808 and , 3 S.C.R. 1, referred to. , 1 S.C.R.347; Re: A reference under the Government of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934, (1963) 2 All E.R.III, cited. 2. If the levy in question cannot be described as a tax on land, it cannot be described as fee with regard to land either. [169A] 2.1 Section 10 of the Orissa Cess Act, 1962 earmarks the purposes of utilisation of only fifty per cent of the proceeds of the cess and that, too, is limited to the cess collected in respect of \"lands other than lands held for carrying on mining operations\". Therefore the levy cannot be correlated to any services rendered or to be rendered by the to the class of persons from whom the levy is collected. Accordingly the levy cannot be treated as a fee which the legislature is competent to legislate for under entry 66 of the List. [153E-F] 2.2 Even assuming that the levy is a fee, the legislature can impose a fee only in respect of any of the matters in the List. The 109 entry relied upon for this purpose i.e. Entry 23 is itself \"subject to the provisions of List I with respect to regulation and development\" of mines and minerals under the control of the . Under Entry 54 of List I, regulation of mines and mineral development is in the field of parliamentary legislation \"to the extent to which such regulation and development under the control of the is declared by by law to be expedient in the public interest\". Such a declaration is contained in Section 2 of the Mines and Minerals (Regulation and Development) Act , 1957. The validity of the impugned Act cannot be upheld by reference to Entry 23 List II. [153G-H, 154A, 168D] 3. There is a difference between the 'object' of the Act and its 'subject'. The object of the levy may be to strengthen the finances of local bodies but the Act has nothing to do with municipal or local administration. Accordingly 's reliance on Entry 5 of List II is plainly too tenuous. [164D] 4. The answer to the question whether was denuded of its competence to enact the impugned legislation because of the having enacted the Mines and Minerals (Regulation and Development) Act , 1957 depends on a proper understanding of the scope of the Act and an assessment of the encroachment made by the impugned legislation into the field covered by it. [161D] 4.1 The mere declaration of a law of that it is expedient for an industry or the regulation and development of miners and minerals to be under the control of the under Entry 52 or entry 54 of List I does not denude the legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List III. Particularly, in the case of a declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the pursuance to such declaration as spelt out by the legislative enactment which makes the declaration. The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration. [161E-F] 4.2 In assessing the field covered by the Act of in question, one should be guided not merely by the actual provisions of the Central Act or the rules made thereunder but should also take into account matters and aspect which can legitimately be brought within the scope of the said statute. Viewed in this light and in the Light of the provisions of the Bihar Cess Act the conclusion seems irresistible that the Act has trespassed into the field covered by the Central Act 110 viz. Mines and Minerals (Regulation and Development)Act, 1957.[163F] 4.3 The impugned legislation which stands impaired by the ary declaration under Entry 54, can hardly be equated to the law for land acquistion or municipal adminstration which are traceable to different specific entries in List II or List III [163G- . 2. S.C.R. 537; ., 4 S.C.R., 461 and ., 1 S.C.C. 12 followed. , 3 S.C.R. 688; . 3 S.C.R. 331 and ., 2 S.C.R.1,distinguished. Indian tobacco , Supp. 1 S.C.R. 145; 1. S.C.R. 371; ., A.I.R. (1986) M.P.33; , 3 S.C.R. 254; etc., 2. S.C.R. 742; , Suppl S.C.R. 145; , 2 Scale 256; , 1. S.C.R. 356; 2 S.C.R. 100; . 6 S.C.R.; ., S.C.R. 393; , A.I.R. 919830 Ori.210; , A.I.R. (1965) Raj. 161; A.I.R. (1969) P&H 79 and A.I.R. (1979) Guj. 180, referred to. . Suppl. S.C.C. 20, cited. 5. Section 6 of the Bengal Cess Act, 1880 specifically enacts that the cess will be on royalty from mines and quarries and on the annual net profit of railways and tramways. The further amendments to Section 6 have not changed this basic position. Though the Section referees also to the value of the mineral-bearing land, that furnishes only the maximum upto which the cess, based on royalty, could go. Therefore, the cess is levied directly on royalties from mines and quarries. The different notifications issued by the of Bihar under section 6 111 of the Act determining the rate of cess on the amount of rayalty of all minerals of the place the matter beyond all doubt. The levy is a percentage or multiple of the royalty depending upon the kind of mineral and in the case of iron ore-the method of extraction and nature of the process employed. There are no clear indications in the statute that the amounts are collected by way of fee and not tax. Section 9 indicates that only a small percentage goes to the district fund and the remaining forms part of the consolidated fund of the \" for the constrution and maintenance of other works of public utility\". However, the proviso does require at least ten percent to be spent for purposes relating to mineral development. Even the assumption that the levy can be treated, in part, as a fee and, in part, as a tax will not advance the case of the respondents. Therefore, the levy of cess sunder the Bengal Cess Act, 1880 is declared invalid. [169C-F,H,170A] ., 1 S.C.C. 12 followed. Central Coalfields Ltd. v. (CWJC 2085/89 decided on 6.11.90 by , referred to. 5.1 The attempt to sustain the tax under the Bengal Cess Act 1880 on the basis of Article 277 cannot also succeed.[171C] , Suppl. 3.S.C.R. 70; 6 S.C.R. 947, referred to. 6. The levy of cess under section 11 of the Madhya Pradesh Upkar Adhiniyam, 1981 is not covered by Entry 49 or Entry 50 of List II and is therefore, ultra vires., [172B] , A.I.R. (1989) M.P. 264 referred to. 6.1 Under Section 9 of Madhya Pradesh Karadhan Adhiniyam, 1982 the proceeds of the cess are to be utilised only towards the general development of mineral-bearing areas. Although there is no provision for the constitution of a separate fund for this purpose as is found in relation to the cesses levied under Part II or Part III of the Act yet this consideration alone does not preclude the levy from being considered as a fee. The clear ear-marking of the levy for purposes connected with development of mineral areas was rightly considered by 112 , as sufficient to treat it as a fee. was also right in holding that such a fee would be referable to item 23 but out of bounds for , after the enactment of the Mines and Minerals (Regulation and Development) Act , 1957. [171F-H] Srinivasa Traders v. , 3 S.C.R. 843, referred to. 7. The grant of refund is not an automatic consequence of a declaration of illegality i.e. where the levy of taxes is found to be unconstitutional, the is not obliged to grant an order of refund. Therefore a finding regarding the invalidity of a levy need not automatically result in direction for a refund of all collections thereof made made earlier. The declaration regarding the invalidity of a provision and the determination of the relief that should be granted in consequence thereof are two deferent things and, in the latter sphere, the has, and must be held to have, a certain amount of discretion. Once the principle that the has a discretion to grant or decline refund is recognised, the ground on which such discretion should be exercised is a matter of consideration for the having regard to all the circumstances of the case. The can grant, would or restrict the relief in a manner most appropriate to the situation before it is such a way as to advance the interests of justice. The is entitled to refuse the prayer for good and valid reasons. Laches or undue delay or intervention of third party rights would clearly be one of those reasons. Unjust enrichment of the refundee may or may not be another. Also there is no reason why the vital interest of the should not be a relevant criterion for deciding that a refund should not be granted. [185H, 186A-C, D & E 181D-E] 7.1 In the instant case though the levy of the cess is unconstitutional, yet there shall be no direction to refund to the assessees of any amounts of cess collected until the date on which the levy in question has been declared unconstitutional. This, in regard to the Bihar cases, will be the date of this judgment i.e. 4.4.1991. In respect of Orissa and Madhya Pradesh cases the relevant date will be the date on which the concerned High has declared the levy unconstitutional i.e.22.12.1989 in case of Orissa and 28.3.1986 in case of Madhya Pradesh. The dates of the judgments of the appropriate High , may not constitute a declaration of law within the scope of Article 141 of the Constitution, but it cannot be gainsaid that the cannot, on any ground of equity, be permitted to retain the cess collected on and after the date of 's judgment. Accordingly the should refund the amounts of cess collected after the relevant dates to assesses directly or in the Coalfields from whom they were collected, with 113 interest at the rate directed by this or mentioned in the undertaking from the date of the relevant judgment to the actual date of repayment. The Coalfields, when they get the refunds, should pass on the same to their customers, the assessees. [186F-G, 187B-C] & Ors. v. of Tamil Nadu & Ors, 1 S.C.C.12, followed. Linkletter, 14 L-Ed. (2d) 601; Sunburst. 77 L.Ed.310; , 4 S.C.C. 1; , 2 Suppl. S.C.R. 1; ., 6 S.C.R. 261; Tilok Chand Motichand v. , 2 S.C.R> 824; , 2 S.C.R. 216; , 3 S.C.R> 180; , 4 S.C.C.566' , 2 S.C.R.511; , 1 S.C.C. 401 and , A.I.R. (1983_ Orissa 210, referred to. , 1 S.C.R.613; , S.C.R. 930; ., S.C.R. 1422; , 2 S.C.R. 747; ., suppl. 1 S.C.C.R. 912; K.T. Moopil Nayar v. of Kerala & Anr., 3 S.C.R.77; , 2 S.C.R. 983; ., 1 S.C.R. 220; , Suppl. 1 S.C.R. 885 and ., 2 S.C.R. 762, cited. 8. The undertaking given by the parties or interim directions given by the cannot be understood in such a manner as to conflict with the 's final decision. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.4353-54 of 1983 etc. etc. From the Judgment and Order dated 7.3.1983 of in O.J.C. No. 1517 of 1978. ", ", , , Dr. ", "114 ", ", , , , , , , , Ms. , , , , , , , , , , , , , , , , Mrs. , , , , , Ms. , , , , , , Mrs. , and for the appearing parties. ", "The Judgment of the Court was delivered by RANGANATHAN, J. These are connected batches of Civil Appeals and Special Leave Petitions. We grant special leave to appeal in all the petitions (condoning the delay in the filing of the unnumbered one referred to below) and proceed to dispose of all the appeals by this common judgment. The details of the appeals and petition are, for sake of convenient reference, tabulated below: ", "----------------------------------------------------------------- ", " Date of Civil Appeal/ Name of Judgment SLP Nos. Appellant ", "------------------------------------------------------------------ ", "1. 17.4.1980 C.A.2053-2080/80 ", "7.3.1983 C.A.4353-4354/83 22.12.1989 S.L.P. 1479/90 State of Orissa 22.12.1989 S.L.P. ----/90 ", "& Anr. ", "13.7.1990 S.L.P.11939/90 -do- 2. Bihar 10.2.1986 C.A. 592/86 3. Madhya 28.3.1986 C.A. 1641-1662/86 State of M.P. Pradesh ", "We shall discuss later the manner in which these appeals and petitions have arisen. ", "115 ", "THE ISSUE The validity of the levy of a \"cess\", based on the royalty derived from mining lands, by the s of Bihar, Orissa and Madhya Pradesh is challenged in these petitions and appeals. A seven-Judge Bench of this Court in India Cement, [1990] 1 S.C.C. 12 struck down a similar levy under a Tamil Nadu Act as beyond the legislative competence of . The assessees, in the matters now before us, claim that the issue here is directly and squarely governed by the above decision. The , on the other hand, claim that the nature and character of the levies imposed by them is totally different from that of the Tamil Nadu levy and that they are entirely within the scope of the s' Legislative powers under the Constitution. This is the issue to be decided in these matters. As the impugned enactments of Bihar, Orissa and Madhya Pradesh mutually differ from one another in some respects, they will need separate consideration. However, the basic issue being the same, all these matters have been heard together and it is found convenient to dispose of them all by this common judgment. We may mention in passing that, initially, these matters were listed before a Bench of two Judges of this court. It referred the matters on 17.8.1990 to the learned Chief Justice for the constitution of a larger Bench. The matters have come up before us in pursuance of the directions of the Hon'ble Chief Justice. ", "THE LEGISLATIVE ENTRIES It will be convenient, at the outset, to refer to the various entries of the and the State Lists in the Seventh Schedule to the constitution which have a bearing on the issues to be discussed. These are: ", "List I-(Union List) Entry 52: ", "Industries, the control of which by the declared by by law to be expedient in the public interest. Entry 54: ", "Regulation of mines and mineral development to the extent to which such regulation and development under the control of is declared by by law to be expedient in the public interest. ", "116 ", "List II-(State List) Entry 18: ", "Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; improvement and agricultural land; colonization. ", "Entry 23: ", "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the . Entry 45: ", "Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues. ", "Entry 49: ", "Taxes on lands and buildings. ", "Entry 50: ", "Taxes on mineral rights subject to nay limitations imposed by by law relating to mineral development. ", "Entry 66: ", "Fees in respect of any of the matters in this List, but not including fees taken in any court. ", "EARLIER HISTORY Before proceeding to consider the provisions of the enactments impugned, and the issues debated, before us, it is necessary to set out certain earlier controversies that led to . ", " Case [1961-2 S.C.R. 537] As early as in 1960, this Court had to consider the constitutional validity of Act, 1952 (Orissa Act XXVII of 1952). S. 3 of the Act empowered to constitute mining areas whenever it appeared to the that it was necessary and expedient to provide amenities life communications, water supply and electricity for the better development of such areas or to provide for the welfare of the residents or workers in areas within which persons employed in a mine or a group of mines reside or work. S.4 empowered to impose and collect a cess or fee on the minerals extracted the rate of which was not to exceed 5% of the valuation of the minerals at the pit'smouth. S.5 provided for the constitution of . The proceeds of the cess recovered in pursuance of S.4 along with other subsidies from , local authorities and other public subscriptions were credited to the fund and the expenses for such collection debited thereto. The fund has to be utilised to meet expenditure incurred in connection with such development measures as might draw up for the purposes above mentioned as well as for the purposes specified in clauses (a) to (e) of S.5(5). The validity of this levy of cess was challenged by the petitioner coal company in the case as ultra vires the powers of because (a) the cess was not a fee but a duty of excise on coal which was a field covered by Entry 84 of List I in the Seventh Schedule and repugnant to the Local Mines Labour Welfare Fund Act, 1947 (Central Act XXXII of 1947); and (b) even if it was treated as a fee relatable to Entries 23 and 66 of List II in the Seventh Schedule, it was hit by Entry 54 of List I read with the Mines and Minerals (Development & Regulation) Act , (Central Act LIII of 1948) (`the MMRD Act' for short) or by Entry 52 of List I read with the Industries (Development and Regulation) Act (`the IDR Act' for short), 1951 (Central ACt LXV of 1951). The first of the above arguments was based on the fact that the cess was fixed at a percentage of the valuation of the mineral concerned at pit's mouth. This argument was based on two considerations. The first related to the form and the second to the extent of the levy. Repelling the argument, it was held that the extent of levy of a fee would always depend upon the nature of the services intended to be rendered and the financial obligations incurred thereby and cannot by itself alter the character of the levy from a fee into the of a duty of excise except where the correlation between the levy and services is not genuine or real or where the levy is disproportionately higher than the requirements of the services intended to be rendered. So far as the first consideration was concerned, it was observed that the method in which the fee is recovered is a matter of convenience and by itself it cannot fix upon the levy the character of a duty of excise. Though the method in which an impost is levied may be relevant in determining its character its significance and effect cannot be exaggerated. The court, therefore, came to the conclusion that the cess levied by the impugned act was neither a tax nor a duty of excise but a fee. ", "The second argument turned on the impact of the MMRD Act on the State's power to levy a fee under Entry 66 read with Entry 23 of List II as a consequence of the declaration contained in S.2 of the Central Act. The Court agreed that a declaration by in terms of Entry 54 of List I operated as a limitation on the legislative competence of itself and observed: ", "\"if by its law has declared that regulation and development of mines should in public interest be under the control of the , to the extent of such declaration the jurisdiction of is excluded. In other words, if a Central Act has been passed which contains a declaration by as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act, the impugned Act would be ultra vires not because of any repugnance between the two statutes but because had no jurisdiction to pass the law.\" ", "(underlining ours) However, the answer to the argument was easily found by the inasmuch as the declaration on the terms of Entry 54 of List I relied on for the coal company was founded on Act LIII of 1948 which was an Act of and not an Act of . However, the did not stop here. It proceeded to review the provisions of Central ACt LIII of 1948 and concluded that, if this Act were held to contain the declaration referred to in Entry 23, there would be no difficulty in holding that the declaration covered the field of conservation and development of minerals, and that the said field was indistinguishable from the field covered by the impugned Act. In coming to this conclusion the pointed out that the rule-making powers conferred on under Section 6(2) of the Act included the levy and collection of royalties, fees and taxes in respect of minerals, mines, quarried excavated or collected. The circumstance that no rules had in fact been framed by in regard to the levy and collection of any fees, it was held, would not make any difference, The observed: ", "\"What Entry 23 provides is that the legislative competence of is subject to the provisions of List I with respect to regulation and development under the con- ", "119 ", "trol of the , and Entry 54 in List I requires a declaration by by law that regulation and development of mines should be under the control of the in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to to pass an Act in respect of the subject-matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by that it is expedient in the public interest to take the regulation and development of mines under the control of the . In such a case the test must be whether the legislative declaration covers the field or not. Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948.\" ", "The Court then considered the argument based on Entry 52 of List I and the provisions of the IDR Act but came to the conclusion that the vires of the impugned Act could not be successfully challenged on this ground. ", " delivered a separate dissenting judgment. ", "He held that the levy was not a fee or a land cess but a duty of excise. He pointed out (at p-579-80) how taxes could be turned into fees on the so-called basis of quantification with the help of the device of creating a fund and attaching certain services to be rendered out of monies in the fund. In this view, he did not consider the question how far the Central Act s of 1948 and 1951 impaired the 's competence to levy the fees in question. He negatived the 's attempt to bring the levy in question (treating it as a tax) within the scope of Entry 50 of List II. He was of opinion that the expressions \"taxes on mineral rights\" referred to taxes on the right to extract minerals and not taxes on the minerals actually extracted. He held that the cess in the present case was not a tax on mineral rights but a tax on the minerals actually produced. It was no different in pith and substance from a a tax on goods produced which comes under Item 84 of List I as duty of excise. ", " case [1964] 4 SCR 461. ", "The same issue regarding the competence of to levy the very same cess came up for consideration again in the Tulloch case. The scenario had changed because the levy now challenged was in respect of the period July 1957 to March, 1958 by which time the MMRD Act, 1957 (Central Act (Central Act LIII of 1948). The 1948 Act, which had earlier provided for the regulation of mines and oil fields and for the development of minerals, was now limited only to oil fields and the 1957 Act provided for the regulation of mines and mineral development. S.2 of the 1957 Act, like the predecessor 1948 Act, contained the following declaration in terms of Entry 54 of List I. It read: ", "\"It is hereby declared that it is expedient in the public interest that the should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided\". ", "but unlike the earlier one this was a declaration contained in an Act of Parliament which had the effect of impairing the legislative competence of the under Entry 23 read with Entry 66 of the List. The hurdle which prevented from considering the provisions of the 1948 Act as a bar to the levy of the cess was therefore out of the way. The Court analysed in detail the provisions of the impugned Act as well as the two Central Act s. It referred to its conclusion in the case that the field covered by the impugned Act was covered by the 1948 Act and observed that this fully applied to the Act vis-a-vis the 1957 Act also, particularly as Ss. 18(1) and (2) of the 1957 Act were wider in scope and amplitude and conferred larger powers on than the corresponding provisions of the 1948 Act. Counsel for the attempted to distinguish the ambit of the 1957 Act from that of the 1948 Act. But the Court pointed out that the argument could not prevail. S. 13 of the 1957 Act contained an express provision for the levy of a fee. S. 25-though not as categorically as s. 6 of the 1948 Act-clearly implied a power to levy \"rent, royalty, tax, fee and other sums\" a nd, besides, S. 18 of the Central Act of 1957 were wider in scope and amplitude and conferred larger powers on than the corresponding provisions of the Act of 1948. It was reiterated, referring to and distinguishing & Ors. etc. v. The of Uttar Pradesh & Ors., S.C.R. 393 that it was incorrect to think that, until rules were made under S. 13 or steps taken under S.25 to collect fees etc., the Central Act would not cover the field. The Court observed, further: ", "121 ", "\"But even if the matter was res integra the argument cannot be accepted. Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one legislature has superiority over the other then to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. In the present case, having regard to the terms of s. 18(1) it appears clear to us that the intention of was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession of the State Act \". ", "Meeting the argument that the power to levy a fee was an independent head of legislative power under each of the three legislative lists and that the levy of tax undue the State Act could be traced to this entry, the pointed out the fallacy underlying the argument in the following words: ", "\"The materials words of the Entries are: \"Fees in respect of any of the matters in this List\". It is, therefore, a prerequisite for the valid imposition of a fee that it is in respect of a \"matter in the list\". If by reason of the declaration by the entire subject- matter of \"conservation and development of minerals\" has been taken over, for being dealt with by , thus depriving the of the power which it theretofore possessed, it would follow that the \"matter\" in the List is, to the extent of the declaration, subtracted from the scope and ambit of Entry 23 of the List. There would, therefore, after the Central Act of 1957, be \"no matter in the List\" to which the fee could be related in order to render it valid.\" ", "The result was that declared the levy of the cess to be invalid and it was held that, as and from 1.6.1958, the date on which the 1957 Act came into force, the Orissa Act should be deemed to be non-existent for every purpose. ", " case [1964-6 S.C.R 666] We now come to the third important case on the topic, , which seems to strike a somewhat different note although in both and the judgments were delivered within a few month of each other by on behalf of 5-Judge Benches which were constituted differently. ", "The erstwhile Province of Madras (later State of Tamil Nadu) had been levying, since long, a cess on land revenue under the Madras District Boards Act (Madras Act XIV) of 1920. Under S.78 of the Act, a cess was levied on the annual rent value of all occupied lands on whatever tenure held. It was a tax at two annas in the rupee of the annual rent value of all lands ins the district. The annual rent value of the land was to be calculated in the manner prescribed in S.79 of the Act. The appellant held certain lands under a mining lease (for extraction of iron ore) from the which stipulated for the payment of a stipulated amount of dead rent, a royalty on the basis of every ton of ore mined as well as a surface rent per acre of the surface area occupied or used. In the case of such lands, S.79(i) provided that \"the lease amount, royalty or other sum payable to the for the lands\" shall be taken to be the such lands, annual rent value. The appellant was, therefore, called upon to pay a cess based on the royalty paid by him to the State (of Andhra Pradesh, which had succeeded to the State of Madras in respect of the territories in question) and it was the validity of this levy which was upheld by that came up for the consideration of this Court. ", "It was contended, on behalf of the appellant, relying on Hingir-Rampur and , that the provision imposing land cess quoad royalty must be held to be repealed by MMRD Act of 1948 or, in any event, by the MMRD Act, 1957 (Central Act LXVII of 1957) and that, after the date when these enactments came into force, the land cess that could be levied must be exclusive of royalty under a mining lease. Distinguishing the decisions cited, this Court rejected the contention. It observed: ", "123 ", "\"It will be seen that there is no resemblance, whatever, between the provision of the Orissa Act considered in the two decisions and the provision for the levy of the land cess under ss. 78 and 79 of the Act with which we are concerned. Sections 78 and 79 have nothing to do and are not concerned with the development of mines and minerals or their regulation. The proceeds of the land cess are, under s.92 of the Act, to be credited to the District fund, into which, under the terms of the Finance Rules in s. V to the Act, the land-cess as well as several other taxes, fees and receipts are directed to be credited. This fund is to be used under Ch. VII of the Act with which s.112 starts \"for everything necessary for or conducive to the safety, health, convenience or education of the inhabitants or the amenities of the local area concerned and everything incidental to the administration\" and include in particular the several matters which are mentioned in those sections. It will thus be seen that there is no connection between the regulation and development of mines and collection of land-cess for which provision is made by ss.78 and 79 of the Act. There is therefore no scope at all for the argument that there is anything in common between the Act and the Central Act s of 1948 and 1957 so as to require any detailed examination of these enactments for discovering whether there is any over-lapping\" ", "A second contention raised before the was that, as the impugned land-cess was payable only in the event of the lessee winning the mineral and not when no minerals were extracted, it was in effect a tax on the minerals won and, therefore, on mineral rights. Rejecting this contention, the observed: ", "\"We are unable to accept this argument. When a question arises as to the precise head of legislative power under which a taxing statue has been passed, the subject for enquiry is what in truth and substance is the nature of the tax. No doubt, in a sense, but in a very remote sense, it has relationship to mining as also to the mineral won from the mine under a contract by which royally is payable on the quantity of mineral extracted. But that does not stamp it as a tax on either the extraction of the mineral or on the mineral right. It is unnecessary for the purpose of this case to examine the question as to what exactly is a tax on mineral rights seeing that such a tax is not leviable by but only by the and the sole limitation on the 's power to levy the tax is that it must not interfere with a law made by as regards mineral development. Our attention was not invited to the provision of any such law enacted by . In the context of ss.78 and 79 and the scheme of those provisions it is clear that the land cess is in truth a \"tax on land\" within Entry 49 of the List\". ", "(emphasis added) The Court proceeded to explain why the land cess before it was nothing else except a land tax falling within Entry 49. ", "\"Under s. 78 of the Act the cess is levied on occupied land on whatever tenure held. The basis of the levy is the \"annual rent value\" i.e., the value of the beneficial enjoyment of the property. This being the basis of the Tax and disclosing its true nature, s.79 provides for the manner in which the \"annual rent value\" is determined i.e., what is the amount for which the land could reasonably be let, the benefit to the lessor representing the rateable value \"or the annual rent value\". In the case of ryotwari lands it is the assessment which is payable to the that is taken as the rental value being the benefit that accrues to the . Where the land is held under lease it is the lease amount that forms the basis. Where land is held under a mining lease, that which the occupier is willing to pay is accordingly treated as the \"annual rent value\" of the property. Such a rent value would, therefore, necessarily include not merely the surface rent, but the dead rent, as well as the royalty payable by the licensee, lessee or occupier for the user of the property. The position then is that the rent which a tenant might be expected to pay for the property is, in the case of lease-hold interests, treated as the statutory \"annual rent value\". It is therefore not possible to accept the contention, that the fact that the lessee or licensee pays a royalty on the mineral won, which extended only to the mere use of the surface land, places it in a category different from other types where the lessee uses the surface of the land alone. In each case the rent which a lessee or licensee actually pays for the land being the test, it is manifest that the land- cess is nothing else except a land tax.\" ", "The judgment of in the case (supra) held the field from 1964 to 1990. ", " followed: ", "The above type of levy was not peculiar to the of Tamil Nadu. In fact, a cess on royalty was bound to be very remunerative to s having a wealth of mineral resources. We are informed that similar cess is being levied in several s. We have already referred to the cess levied in Orissa which came to be considered by this Court as early as 1961 and 1964 in the Hingir-Rampur and Tulloch cases. Further cases came up for consideration, on the same lines; in Bihar, v of Bihar, [1979] 27 B.L.J.R. 64 and . 30/1978 decided on 15.5.84 , the subject matter of C.A. 592/86 before us); in Orissa, v. , A.I.R. 1983 Ori. 210; in Rajasthan, v. , A.I.R. 1965 Raj. 161; in Punjab, v. , A.I.R, 1969 P & H 79; in , A.I.R. 1979 Guj. 180; and Madhya Pradesh, v. , (m.P. 410/83 decided on 28.3.1986) and ., A.I.R. 1989 M.P. 264 F.B. and, except for the last two cases from Madhya Pradesh, the others upheld the levy of a cess which depended on royalties, following . ", "India Cement case [1990] 1 S.C.C. 12 The correctness of the above line of decisions came to be tested in . The of Tamil Nadu and granted a mining lease on 19.7.1963 to the appellant for extraction of limestone and kankar for a period of twenty years. The lease deed, which was in accordance with the Mineral Concession Rules, stipulated for the payment of royalty, dead rent and surface rent and also provided that the lessee was bound to pay all dues except land revenue. At the time the lease was obtained, S.115(1) of the Madras Panchayats Act. 1958 provided for the levy, in each panchayat development block, of a local cess at the rate of 45 paise on every ruupee of land revenue payable to the in respect of any land for every fasli. S. 115(2) provided that the local cess will be deemed to be public revenue and all the lands and buildings thereon shall be regarded as security therefore. S 115(3) and (4) set out the various purposes for which the cess levied and collected under S. 115 could be utilised. S116 provided for the levy of a local cess surcharge. The maximum amount of such surcharge was originally left to be prescribed by the and was in 1970 limited to Rs.1.50 on every rupee of land revenue and in 1972 to Rs.2.50 on every rupee of land revenue. Apparently inspired by the decision in , the Tamil Nadu Panchayats (Amendment and Miscellaneous Provisions) Act (Tamil Nadu Act 18 of 1964) added, with full retrospective effect, the following Explanation to S.115(1): ", "\"Explanation: In this section and in Section 116 , `land revenue' means public revenue due on land and includes water cess payable to the government for water supplied or used for the irrigation of land, royalty, lease amount or other sums payable to the government in respect of land held direct from the government on lease or licence, but does not include any other cess or the surcharge payable under Section 116 , provided that lands revenue remitted shall not be deemed to be land revenue payable for the purpose of this section\". ", "The appellants' challenge in to this levy- which was consequent on the 1964 amendment-was unsuccessful. upheld it as a \"tax on land\" measured with reference to land revenue, royalty or lease or other amount as mentioned in the Explanation. The challenge based on Entry 54 of List I read with Entry 23 of List II and the provisions of the MMRD Act, 1957 was also repelled, applying the decision in . The appeal to this was referred to a Bench of seven Judges who came to the conclusion that dity of the levy of the cess. It may be necessary to refer, in greater detail, to some passages in the judgment later but it will be convenient,. for the present, to summarise the salient conclusions of the . These were: ", "1. The levy could not be supported under: ", "(a) Entry 45 of List II: as it is not a tax on land revenue, an expression which has a well defined connotation. `Land revenue' is separate and distinct from `royalty. The Explanation to S.115(1) itself proceeds on the basis that royalty cannot be land revenue properly so called or conventionally so known. ", "(b) Entry 49 of List II: as it is not a tax on land. A tax on land can only be levied on tax as a unit, must be imposed directly on land and must bear a definite relationship to it. There is a clear distinction between a tax directly on land and a tax on income arising from land. The cess is not a tax directly on land as a unit but only a tax on royalty which is indirectly connected with land. In the words of it is a tax not only on land but on labour and capital as well. It could have been treated as a tax on land if it had been confined to `surface rent' instead of `royalty. ", "(c) Entry 50 of List II: as a tax on royalty as it is not a tax on mineral rights and so is outside the purview of Entry 50. Even otherwise, Entry 50 is subject to the provisions of List I and is, therefore, subject to the declaration contained in, and the purview of, the MMRD Act 1957. ", "2. Even if the cess is regarded as a fee, the State's competence to levy the same can, if at all, only be justified with reference to Entry 23 and Entry 50 of List II but this recourse is not available as the field is already covered by Central Legislation referable to Entry 54 of List I. ", "3. was not rightly decided. The view of the Rajasthan, Punjab, Gujarat and Orissa decisions was overruled. In the view taken by the , i.e. Madhya Pradesh ruling was not examined n detail, particularly as it was said to be pending in appeal before the Supreme . ", "In issue before us now are the levies of cesses based on royalty from lands containing minerals by the States of Orissa, Bihar and Madhya Pradesh. Since the relevant statutes vary in detail and the parties concerned have also taken different stands, emphasising different aspects, the arguments have to be considered and dealt with separately, We may, however, mention that the appeals before us include those in the cases of (Orissa). land (Madhya Pradesh) noticed earlier. ", "THE VARIOUS ENACTMENTS ORISSA The invalidation in 1961 of Orissa Act XXVII of 1952 in Hingir Rampur apparently rendered it necessary for the State to bring in fresh legislation. The Orissa enactment with which we are now concerned is the Orissa Cess Act (Orissa Act IIof 1962) as amended by Act 42 of 1976. According to the Statement of Objects and Reasons accompanying the bill, the primary objective of the legislation is to condense and simplify the existing law on the subject by consolidating the different enactments, customs and usages relating to the levy of cess in the State, to cure defects and deficiencies therein and to introduce uniformity in the levy of cess throughout the State. The Act proposed to adopt a uniform rate of 25 paise in the rupee of the annual rental value and distribute the entire gross collection among the zilla parishads, panchayat samithis (referred to as `samithis' in the Act) and grama panchayats in the ratio 5:8:12 respectively thus providing them with enhanced revenues to enable them to discharge their statutory responsibilities more efficiently by taking up development works and providing better amenities to the people of the State. Its principal provisions are as follows: ", "(i) Under Section 4 , from and after the commencement of the Act, all lands (other than lands which were not liable to payment of rent or revenue before 1.4.77 and lands which were subject to a tax on land holdings sunder a 1950 Municipal Act) are made liable to the payment of cess (in addition to any land revenue, tax, cess rate or fee otherwise payable in respect thereof) determined and payable \"as herein provided\". A 1976 amendment makes it clear that `lands held for carrying on mining operations\" ar not exempt from the cess. ", "(ii) The \"rate of cess, assessment [and] fixation of cess year\" are dealt with by S.5 which originally read thus: ", "\"5.(1) The cess shall be assessed on the annual value of all lands on whatever tenure held calculated in the manner hereinafter appearing. (2) The rate per year at which such cess shall be levied shall be twenty five percentum of the annual value of the land. ", "Sub-section(2) was amended by Act 13 of 1970 by substituting of 50% in place of 25% but a 1982 amendment inserted S.5A to provide that for a period 1.4.1977 to 31.3.1980, the cess would be levied at 25% of the annual value in respect of lands held for carrying on mining operations. S. 5 was again amended by Act 15 of 1988 w.e.f. 26.10.1988 to read thus: ", "\"(2) The rate at which such cess shall be levied shall be. ", "a) in case of lands held for carrying on mining operations in relation to any mineral, on such percentum of the annual value of the said lands as specified against that mineral in Schedule II; and ", "b) in case of other lands fifty percentum of the annual value. ", "Clause (a) was again amended by Act 17 of 1989 to read thus: ", "\"(a) in the case of land held for carrying on mining operations in relation to any mineral, such percentum of the annual value as the State Government may, by notification, specify from time to time in relation to such mineral\". ", "It will thus be seen that, in place of a fixed rate, an elasticity was provided for, initially, by requiring the rates to be specified in the Schedule differently for different minerals. Schedule II prescribed the percentage which the cess was to bear to the annual value; the percentages varied from 650% in the case of sand, to 300% in the case of coal, 200% in respect of certain minerals such as iron ore, limestone, manganese ore (except those meant for export or cement manufacture), 150% in the case of certain other minerals and 100% in respect of the rest. Further elasticity was provided for in 1989 by leaving it to the to vary the rates by a simple notification. In consequence of this amendment, Schedule has been omitted and a notification has been issued prescribing the percentage of the royalty or the dead rent (as the case may be) that is to be levied as the cess in respect of various items of specified minerals. The rates specified are 650%, 400%, 300%, 200% and 150%. In respect of all minerals not specified in the notification, the rate of cess is to be 100% of the royalty or dead rent. ", "(iii) S.6 specifies the person by whom the cess is payable. In so far as is material for our present purposes, it directs that the cess is payable \"(c) by a person for the lands he holds for carrying on mining operations and shall be paid by him to the \". This clause was inserted in S.6 simultaneously with the amendment of S.5 by Act 42 of 1976. ", "130 ", "(iv) \"Annual value\" is defined in S.7 thus: \"7. Annual Value-(1) The annual value of lands held by a raiyat shall be the rent payable by such raiyat to the land-lord immediately under whom he holds the land: ", "x x x x x x (2) In the case of lands held as an estate the annual value shall be the aggregate of - ", "(a) the amount which the intermediary is entitled to receive on account of revenue or rent less the amount payable by such intermediary as revenue to the intermediary immediately superior to him or to the Government, as the case may be; and ", "(b) the rent, if any, payable held for carrying on mining operations, the annual value shall be the royalty or, as the case may be, the dead rent payable by the person carrying or mining operations(s) to the .\" ", "The Explanation to the section defines \"dead rent\" and \"royalty\" in terms of their definitions in the MMRD Act,1957. It also states the \"royalty\" would include \"any payments made or likely to be make to the for the right of raising minerals from the land which shall be calculated on every tone of such minerals despatched from the land at the same rate as prescribed under the said Act or such other rate as may be fixed by the but not exceeding the amount which would have been otherwise payable as royalty under the said Act\". Act 17 of 1989 also amended S.7(3) to red thus: ", "\"(3) In the case of lands held for carrying on mining operations, the annual value shall be the royalty or, as the case may be, the dead rent payable by the person carrying on mining operations(s) to the or the pit's mouth value wherever it has determined\". ", "This was apparently intended to regulate the cess on coal in respect of which the pit's mouth value had been determined. So a notification dated 14.8.89 was issued to provide that the cess in respect of coal bearing lands would be 30% of the pit's mouth value of the said mineral. ", "(v) Sections 8 to 9B provide for the assessment of the cess in respect of various cases. S.9B, inserted by the 1976 amendment, provided: ", "\"9B- Assessment of cess on lands held for mining operations: ", "(1) The cess payable in respect of lands held for carrying on mining operations shall be assessed in the prescribed manner. ", "(2) Nothing contained in Sections 8 , 9 and 9A shall apply in relation to the assessment of cess in respect of the aforesaid lands: ", "The prescribed manner of such assessment had been already set out in the Orissa Cess Rules, 1963. Rule 6A, inserted in 1977, deals with this but it is unnecessary for us to consider the details except to mention that it is assessed and collected, along with the amount of royalty or dead rent, by the Mining Officer concerned. ", "(vi) S.10 also needs to be referred to. It originally read thus: ", "\"10. Application of proceeds of the cess: (1) Notwithstanding anything contained in any other law the amount collected as cess shall be credited to the Consolidated Fund of the State and shall be utilised in the following manner, namely: ", "(a) amounts collected in respect of lands within the local limits of any Municipality or Notified Area constituted under the Orissa. Municipal Act, 1950 shall be paid to the concerned or , as the case may be; and ", "(b) amounts other than those referred to in clause ", "(a) shall be distributed in the prescribed manner among the Grama Panchayats, Samitis and Parishads in the ratio of twelve is to eight is to five. ", "132 ", "Explanation- In this section \"Grama Panchayat\" mean a Grama panchayat constituted under the Orissa Grama Panchayats Act, 1948 and \"Samiti\" and \"Parishad\" respectively mean the Samiti and Parishad constituted under the Orissa Panchayat Samiti and Zila Parishad Act, 1964 and \"Samiti\" means a panchayat samiti constituted under the Orissa Panchayat Samitis Act 1959. ", "Orissa Act 13 of 1970 substituted the following section for the above: ", "\"10 Application of proceeds of the cess. (1) Notwithstanding anything contained in any other law, the amount collected as cess shall be credited to and shell be utilised for the following purposes, namely: ", "(a) primary education; ", "(b) contribution to Grama-Panchayats; and ", "(c) contribution to . ", "Explanation-In this section\"Grama Panchayat\" means & Grama Panchayat constituted under the Orissa Panchayat Samitis Act, 1959. ", "(2) The proportion in which the amount collected as cess is to be allotted for the said purpose shall be as may be prescribed. ", "As substituted by Act 42 of 1976, it reads: ", "\"10. Application of proceeds of the cess: (1) Notwithstanding anything contained in any other law, all amounts collected as cess shall be credited fifty percentum of those which represent cess collected in respect of lands, other than lands held by carrying on mining operations, shall be utilised for the following purposes, namely:- ", "(a) primary education; ", "(b) contribution to Grama Panchayats: and ", "(c) contribution to . ", "(2) The allotment of amounts to be utilised for the pur- ", "133 ", "poses mentioned in clause (a) , (b) and (c) of sub-section(1) shall be made in such proportion as may be prescribed\" ", "BIHAR We shall now turn to the relevant provisions of the Bihar Act . Bihar is governed in this respect by the provisions of the Bengal Cess Act (Act IX of 1880). It is sufficient to refer to the provisions of Sections 4 to 6 , 9 and to certain notifications. ", "(i) A definition of `royalty' was introduced in S.4 of the Act by an ordinance of 1975. It was amended by the Bihar Finance Act, 1981 and then by the Bihar Finance Act, 1982. The definition as amended, w.e.f. 1.4.1982, by the latter reads as follows: ", "\"royalty for the purpose of this Act in respect of mines and quarries means payment (which includes dead rent) made or likely to be made to the owner of mines and minerals for the right of working the same on the quantity or value of such produce by a lessee if the land had been under a lease granted under MMRD Act, 1957, and rules made thereunder and includes any amount which may demand from the appropriation of mines and minerals belonging to the and any amount that may be paid as or in lieu of royalty for the right of working mines and quarries in areas held or acquired under any Act or agreement\". ", "At the end of the section it added the following `interpretation clause': ", "\"Valuation of mineral bearing land\" means with reference to assessment of local cess in any year on land held for working mines and quarries the value at pit's mouth of all the mineral extracted form the land in that year and the Explanation, which defines the value at pit's mouth of a mineral; ", "(ii) S.5 provided that, from and after the commencement of this Act, in any district or part of a district, all immovable property situate therein except otherwise in Section2 provided shall be liable to the payment of a local cess. ", "134 ", "(iii) Section 6 , again, is a much amended section, As substituted by Ordinance No.209 of 1975 dated 2.12.75, it read: ", "\"6. Cess has to be assessed: The local cess shall be assessed on the annual value of lands and until provision to the contrary is made by the on the royalty of mines and quarries, sale value of the other immovable properties including forest produce and annual net profits from tramways and railways as contained respectively as prescribed in this Act and the rate at which the local cess shall be levied for each other shall be- ", "(a) in the case of royalty, the rate will be determined by the government from time to time but it will not exceed the amount of royalty; ", "(b) in the case such annual net profits, fifteen paise on each rupee of such profits; ", "(c) in the case of annual value of lands, twenty paise per rupee of the annual value; and ", "(d) in the case of sale value of immovable properties including first produce, the rate will not exceed 10% and the State Government may, by notification, prescribe from time to time the commodities on the sale of which cess would be levied along with the rate at which it would be levied\". ", "It was amended by a series of Bihar Cess (Amendment) ordinances between 1975 and 1982 . It was further amended by the Finance Act , 1982 (w.e.f. 1.4.82), the Finance Act , 1984, the Finance Act , 1985 (w.e.f. 1.8.1985) and the Bihar Cess (Amendment) Ordinance, 1985, After the last of these amendments, the section stood thus: ", "\"S.6. Cess how to be assessed: The local cess shall be assessed on the annual value of the lands and, until provision to the contrary is made by the , on the royalty of mines and quarries or on value of mineral bearing land as the case may be, sale value of other immovable properties including forest produce and annual net profits from tramways and railways ascertained respectively as prescribed in the Act and the rate at which the local cess shall be levied for each year shall be- ", "(a) in the case of royalty, the rate will be determined by the Government from time to time but it will not exceed five times the amount of royalty, provided that the local cess payable in any one year shall not be less than the amount arrived at by multiplying the dead rent with the rate of cess determined undo clause (a); (aa) in the case of value of mineral bearing land, where the local cess payable in any year in respect of any mineral bearing land as assessed in clause (a) is less than 30 per cent of the value of mineral bearing land in that year, then, notwithstanding anything hereinbefore contained, may assess the local cess at such percentage of the value of the mineral bearing land, not exceeding [of] 30 per cent, as may be notified in the Official Gazette from time to time although the cess so assessed may exceed five times the amounts of royalty; ", "(b) in the case of annual net profit, fifteen paise on each rupee of such profits; ", "(c) in the case of annual value of land, twenty five paise per rupee of the annual value; and ", "(d) in the case of sale value of immovable properties including first produce, the rate will not exceed 30 per cent and the State Government may , be notification prescribe from time to time the commodities on the sale of which cess would be levied along with the rates at which it would be levied\". ", "The Bihar Cess (Amendment) Ordinance, 1987 (replaced by Act 3 of 1988) substituted 40% for 30% in clause (aa). ", "(iv) S.9 of the Act deals with the application of the proceeds of cess. It has been amended from time to time, inter alia in 1976, 1977, 1978, 1979, 1980, 1981 and 1982. After all these amendments, the section stood thus: ", "\"9. Application of the proceeds of cess: The proceeds of local cess and all sums levied or recovered as interest or otherwise shall in each district be paid in the district fund- ", "(i) at such rate as may, from time to time, be determined by in the case of local cess on annual value of land; and ", "(ii) at such rate as may, from time to time, be determined by , subject to a maximum of twenty per cent in case of local cess on royalty of mines and quarries, or value of mineral bearing land, sale value of other immovable properties, forest produce and annual net profit from tramways and railways and the remaining amount shall be deposited in the consolidated fund of the for the construction and maintenance of other works of public utility; ", "xxx xxx xxx xxx xxx Provided further that out of the remaining amount not less than ten percent of the amount of the local cess collected under clause (a) or clause (aa) of Section 6 shall be spent for purposes relating to mineral development''. ", "(v) In exercise of the powers conferred by S. 6 above, issued a notification on 20.11.80 determining the rate of cess on the amount of royalty of all minerals of the at 100% w.e.f. 1.2.1980. Our attention has also been drawn to, and some print made of, a notification dated 20.4.85 by which , modifying the earlier notification of 1.10.1981, determined the rate of cess ``on the amount of royalty of iron ore which is extracted from manually operated iron ore mines'' at 100% w.e.f. 1.10.84 which was followed up by a notification dated 20.11.85 enhancing the rate at 300% on the amount of royalty of iron ore w.e.f.21.6.85 in respect of mines other than those in which the ore is extracted manually. Other notifications were also issued determining the rate of cess in respect of other minerals as indicated below : ", "Date of Effective Mineral Rate Notification Date 20.11.85 21.6.85 Bauxite Ore, sand 500% for stowing 20.11.85 21.6.85 Copper Ore and 300% uranium 20.11.85 21.6.85 Lime stone and kynite 200% 20.11.85 21.6.85 Coal 30% of pit's mouth value or 500% on the amount of royalty whichever is greater Madhya Pradesh: ", "In Madhya Pradesh, two statutes have to be considered: The first is the Madhya Pradesh Upkar Adhiniyam, 1981 (Act 1 of 1982). It provides for the levy of an energy development cess (Part I), an urban development cess (Part II), a cess on transfer of vacant land (Part III), and a cess on storage of coal (Part IV). The Act provided that the cesses levied under Parts I and IV should first be credited to State but subsequently withdrawn and credited to a separate [Ss.3(2)] and [s. 12(1)] and that the amounts to the credit of the funds as well as the cesses collected under Parts II and III should be utilised for special purposes connected respectively with energy development [S.3(3)] development of coal bearing areas [S.12(2)] urban development [S. 7(2)] and rural development [S. 9(5)]. Act 21 of 1987 changed Part IV into a part dealing with ``cess on land held in connection with mineral rights'' with full retrospective effect. Part IV, as now substituted, deals only with ``land situate in the State and held under a mining lease for undertaking mining operations in relation to major mineral including operations for raising, winning or extracting coal''. Section 11 and 12 read thus: ", "`` Section 11 : There shall be levied and collected a cess on land held in connection with mineral rights at such rate as may be notified by per ton of major mineral raised and the rate of cess prevailing in respect of coal during the period commencing from the date of commencement of the Principal Act and ending on the date of commencement of the Madhya Pradesh Upkar (Sanshodhan) Adhiniyam, 1987, shall be deemed to be the rate of cess notified under this sub-section in respect of coal: ", "Provided the subject to the limitation mentioned above may, by notification, increase or reduce the rate of cess at an interval of not less than one year, where the rate is increased it shall not be in excess of fifty per cent of the rate for the time being in force; ", "Provided further that every notification under the above proviso shall be laid on the table of and the provisions of Section 24-A of the Madhya Pradesh General Clauses Act, 1957 (No. 3 of 1958) shall apply thereto as they apply to rule. ", "(2) The rate of cess to be notified for the first time in exercise of the powers conferred by Sub- section (1) shall be effective from the [first of] April, 1987. ", "(3) The cess levied under sub-section (1) shall, subject to and in accordance with the rules made in this behalf, be assessed and collected by such agencies and in such manner as may be prescribed. (4) The agencies prescribed under sub-section (3) shall for the purpose of assessment, collection and recovery of cess and all matters connected therewith, exercise such of the powers conferred upon the authorities specified in section 3 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) for the purpose aforesaid in respect of sales tax under said Act and the rules made thereunder, as may be prescribed as if such agencies were the authorities specified in the section 3 and the cess on land held in connection with mineral rights were the tax levied under the said Act. ", " Section 12 : The proceeds of the cess on land held in connection with the mineral rights may be utilised by for the general development of the mineral bearing areas.'' Section 12 has, however been omitted by an Amending Act of 1989, again, with full retrospective effect i.e. from 1.10.1982. ", "It appears, however, that there was in force in Madhya Pradesh w.e.f. 1.11.1982 another statute levying mineral development cess. It was Karadhan Adhiniyam, 1982 (Act 15 of 1982) as amended by M.P. Act s 1983 and 13 of 1985 which was challenged before High Court in v. and other connected cases. The Madhya Pradesh Karadhan Adhiniyam, 1982, was enacted by Legislature ``to provide for levy of school building cess, forest development cess and mineral areas development cess and matters incidental thereto''. Part II of the Act deals with the school building cess. Section 5 therein requires the holder of every holding of six hectares and above to pay the school building cess as provided therein. The proceeds of the school building cess are required by S.4 to be credited to a separate supplemented by a contribution equal to 50% thereof and utilised for construction and furnishing of primary school buildings in non-urban areas. Part III of the Act deals with the forest development cess. Section 7 imposes forest development cess on every sale or supply for forest produce by . The proceeds thereof are to be credited to a separate and utilised for social forestry, afforestation, reforestation, forest rehabilitation and other purposes connected with forest development. Then comes Part IV dealing with the mineral areas development cess, the provisions of which are relevant for the purpose of these appeals and it is the charging provision therefor contained in Section 9 which has been attacked as constitutionally invalid. The Section read thus: ", "``9. Levy of mineral areas development cess on land under mining lease''. ", "(1) There shall be levied and collected on the land held under a mining lease for undertaking mining operation a mineral areas development cess at the rate of twenty five percent of the rental value thereof. ", "(2) For the purpose of sub-section (1), rental value shall be equal to the royalty or dead rent, as the case may be, whichever is higher. (3) The mineral areas development cess shall be payable by person to whom the mining lease is granted. ", "(4) The mineral areas development cess shall, subject to and in accordance with the rules made in this behalf, be collected by such agencies and in such manner as may be prescribed and shall be applied towards development of mineral bearing areas''. ", "140 ", "The 1983 amendment substituted the following sub-section (1) in Section 9 : ", "``(1) There shall be levied and collected on the land held under a mining lease for undertaking minor operations for a major mineral, a mineral areas development cess at the rate of one hundred percentum o the rental value thereof''. ", "The 1985 amendment substituted the following sub-section in place of the above w.e.f. 1.8.1985: ", "``(1) There shall be levied and collected- ", "(a) on the land held under mining lease for undertaking mining operations for a major mineral other than coal a mineral areas development cess at the rate of one hundred percentum of the rental value thereof; ", "(b) on the land held under mining lease for undertaking mining operations for coal, a mineral area development cess at the rate of the hundred twenty five percentum of the rental value thereof''. ", "and also made a provision for payment of interest on arrears of cess. Rules have been framed under this Act called ``The Madhya Pradesh Mineral Areas Development Cess Rules, 1982''. Rule 3 provided for the collection of the cess every month along with the royalty or dividend. Rule 10 thereof is alone relevant for the purpose of these partitions and read as under: ", "``10. Application of cess: The State Government shall decide from time to time the manner in which the amount collected from cess shall be utilized for the development of mining lease areas''. ", "In 1985, an amendment substituted the words ``mineral bearing'' for the words ``mining lease'' in this rule. It will be seen that, unlike the cesses referred to in Part I and III, the Act did not provide for the creation of a separate Fund for the mineral areas development cess. The manner of utilisation thereof was also left to the discretion of though it had to be spent for development of mineral bearing areas. ", "141 ", "THE CONTENTIONS ORISSA In the historical and statutory context set out above, the attempt of Sri , learned counsel for the State of Orissa to save the impugned legislation of the State is two fold. First, he points out that in the statute, by Ss. 115 and 116, imposed a cess and surcharge on `land revenue' and the explanation to s. 115 defined `land revenue' to mean `royalties'. In other words that was a clear case of direct cess or Tax on royalties. Here, on the other hand, s.5 makes it clear that what the legislature has provided for is a tax assessed on the annual value of all lands, on whatever tenure held, calculated at a percentage of the annual value of the land. S. 7, which defines `annual value', provides for different measures for determining the annual value in respect of lands held under different kinds of tenures; and, in the case of lands held for mining operations, the measure of such annual value is the royalty or dead rent paid to the . On a proper construction of the statute, he submits, the cess levied is a cess or tax on land and the `royalty' is only taken as a measure for determining the quantum of tax. He contends that only forbids a cess or tax on royalty as such and not a cess or tax on land, which may be measured by reference to the royalty derived from it. He presses in aid of his argument the well-marked distinction between the subject matter of a tax and its measure outlined, amongst others, in case F.C.R.207 at pp. 218, 224 and v , 1 S.C.C.487 at pp. 481-4. This argument, contended, is based on the statutory language used in the Orissa Cess Act, 1962 and should prevail independently of the correctness or otherwise of , Secondly, he submitted that `royalty' is not a tax and the cess on royalty is also not a tax but only a fee. This view is supported, he said, by the limitations imposed in the statute on the modes of its utilisation. Being a fee, competence to impose it has to be determined with reference to Entry 23 read with Entry 66 of the State List. So doing, the validity of the levy has to be upheld as, in counsel's submission, the declaration contained in, and the provisions of, the MMRD Act, 1957 do not, in any way whittle down or impair this competence. ", "Basically, it will seen, two questions arise- (1) Can the cess be considered as ``land revenue'' under Entry 45 or as a ``tax on land'' under Entry 49 or as a ``tax on mineral rights'' under Entry 50 of the State List? ", "(2) If the answer to question (1) is in the negative, can the cess be considered to be a fee pertaining to the field covered by Entry 23 of the State List or has the State been denuded of the legislative competence under this Entry because of having enacted the MMRD Act, 1957? Taking up the first question, the attempt to bring the levy under Entry 45 of the State List proceeds in two steps. First, land revenue is the sovereign's share of the proceeds of the land belonging to the sovereign and is represented, in the case of land containing minerals, by the payment of royalty to the Government. Second, the cess, being an accretion to royalty, partakes of the same character. This argument, however, must fail in view of the categorical observations of in india Cement, (vide paras 20 and 21) as to the connection of the expression `land revenues'. At least, in , the statute sought to include royalty within the meaning of `land revenue' but there is no such provision in the Orissa Act and, this being so, royalty or the tax thereon cannot be equated to land revenue. The cess here cannot be, therefore, brought under Entry 45. ", "Turning next to Entry 50, though left open the question how far a levy of this nature can be considered to be a tax on mineral rights (vide page 676), has chosen to approve the contrary view of in his dissenting judgment in (para 30). Actually, it appears that the observations of have not been fully examined. The learned Judge held that the tax in the case before him was not a tax on mineral rights because it was levied on the value of the minerals extracted. If his observations in this context are read as a whole, it would seem that he also was of opinion that a tax on royalty would be a tax on mineral rights, for he observed (at pp. 582-3): ", "`The next contention on behalf of the State of Orissa is that if the cess is not justified as a fee, it is a tax under item 50 of List II of the Seventy Schedule. Item 50 provides for taxes on mineral rights subject to any limitations imposed by by law relating to mineral development. This raises a question as to what are taxes on mineral rights. Obviously, taxes on mineral rights must be different from taxes on goods produced in the nature of duties of excise. If taxes on mineral rights also include taxes on minerals produced, there would be no difference between taxes on mineral rights and duties of excise under item 84 of List I. A comparison of List I and II of the Seventh Schedule shows that the same tax is not put in both the Lists. There fore, taxes on minerals rights must be different from duties of excise which are taxes on minerals produced. The difference can be understood if one sees that before minerals are extracted and become liable to duties of excise somebody has got to work the mines. The usual method of working them is for the owner of the mine to grant mining leases to those who have got the capital to work the mines. There should therefore be no difficulty in holding that taxes on mineral rights are taxes on the right to extract minerals and not taxes on the minerals actually extracted. Thus tax on mineral rights would be confined, for example, to taxes on leases of mineral rights and on premium or royalty for that. Taxes on such premium and royalty would be taxes on mineral rights while taxes on the minerals actually extracted would be duties of excise. It is said that there may be cases where the owner himself extracts minerals and does not give any right of extraction to somebody else and that in such cases in the absence of mining leases or sub-leases there would be no way of leaving tax on mineral rights. It is enough to say that these cases also, rare though they are, present no difficulty. Take the case of taxes on annual value of buildings. Where there is a lease of the building, the annual value is determined by the lease-money; but there are many cases where owners themselves live in buildings. In such cases also taxes on buildings are levied on the annual value worked out according to certain rules. There would be no difficulty where an owner himself works the mine to value the mineral rights on the same principles on which leases of mineral rights are made and then to tax the royalty which, for example, the owner might have got if instead of working the mine himself he had leased it out to somebody else. there can be no doubt therefore that taxes on mineral rights are taxes of this nature and not taxes on minerals actually produced. Therefore the present cess is not a tax on mineral rights; it is a tax on the minerals actually produced. Therefore the present cess is not a tax on mineral rights; it is a tax on the minerals actually produced and can be no different in pith and substance from a tax on goods produced which comes under Item 84 of List I, as duty of excise. The present levy therefore under s. 4 of the Act cannot be justified as a tax on mineral rights. ", "However, the conclusion of is clear that a tax on royalties cannot be a tax on minerals and we are bound thereby. This apart, we shall also advert, while discussing the second question, to another hurdle in the way of the 's attempt to have recourse to Entry 50, which has also been touched upon by . ", "Can, then, the cess be described as a tax on land''? The Status considered in , as correctly points out, was differently worded. It purported to levy a cess on land revenue and `royalty' was brought within the definition of that expression. It was therefore, a case where they levy had no reference to land at all but only to the income from the land, in the case of lands, got by way of land revenue or otherwise. Here the Statute is different. The objective of the Cess Act as set out earlier, is to levy a cess on all land. Indeed, originally the idea was to levy a uniform cess at 25% of the annual value of all land which was subsequently raised to 50%. It is argued that the tax here is, therefore, a tax on land and it is immaterial that this tax is quantified with reference to the income yielded by the land. A tax on land may be levied, inter alia with reference to its capital value or with reference to its annual value. One realistic measure of such capital or annual value will be the income that the land will yield just as, for property tax purposes, the annual value is based on the amount for which the property can reasonably let from year to year. The income from the land may be more or less due to a variety of reasons. In the case of agricultural lands, it may depend on the fertility of the soil, the sources of irrigation available, the nature of crops grown and other such factors. Likewise, where the land is one containing minerals, naturally the value (whether annual or capital value) will be more if it contains richer minerals and can be legitimately measured by reference to the royalties paid in respect thereof. the mere fact, it is argued, that the annual value is measured with reference to the royalty, dead rent or pit's mouth value of the mineral does not mean that it ceases to have the character of a tax on land. In this context, places strong reliance on the decision of a Constitution Bench of this Court in v. , 3 S.C.R. ", "47. There a local Board was authorised to ``grant....a license for the use of any land as a market and impose an annual tax thereon''. The Court held, examining the Scheme and the language of the provision in question, that the tax imposed was a tax on land under Entry 49. The Court indicated the following approach to the issue before it: ", "``The first question which falls for consideration therefore is whether the impost in the present case is a tax on land within the meaning of Entry 49 of List II of the Seventh Schedule to the Constitution. It is well-settled that the entries in the three legislative lists have to be interpreted interpreted in their widest amplitude and therefore if a tax can reasonably be held to be a tax on land it will come within Entry 49. ", "Further it is equally well-settled that tax on land may be based on the annual value of the land and would still be a tax on land and would not be beyond the competence of the State legislature on the ground that it is a tax on income: see , F.C.R.207. it follows therefore that the use to which the land is put can be taken into account in imposing a tax on it within the meaning of entry 49 of List II, for the annual value of land which can certainly be taken into account in imposing a tax for the purpose of this entry would necessarily depend upon the use to which the land it put. It is in the light of this settled proposition that we have to examine the scheme of s. 62 of the Act which imposes a tax under challenge.'' On the other hand, it is contended for the respondents that, whatever may have been the original intention, the true and real impact of the cess is only on the royalties. It is said that, at any rate, after the amendments of 1976, when lands held for mining operations were segregated for levy of separate and steep rates of cess based on royalty, the ostensible appearance of levying a tax on all land with reference to annual value has disappeared and a direct, undisguised tax on royalties from mining lands has taken its place. it is urged that, for deciding whether the tax is really a tax on land as in or whether it is really a tax on royalties which has been struck down in , it is not the form or the statutory machinery that matters; one has to look at the real substance and true impact of the levy. If this is done, it is said, there can be no doubt that the cess impugned here suffers from the same vice that vitiated the levy in . ", "The decision of this Court in , 3 S.C.R. 211 was referred to by Sri , learned counsel for , in support of this contention. In that case, this Court was concerned with a cess levied annually. Initially S. 4(2) of the relevant statute levied the cess: ", "``(a) in respect of lands, at the rate of six paise on each rupee of development value thereof; ", "(b) in respect of coal mines, at the rate of fifty paise on each tonne of coal on the annual dispatches therefrom; ", "(c) in respect of mines other than coal mines and quarries, at the rate of six paise on each rupee of annual net profits thereof''. ", "With effect from 1.4.1981, clause (a) above was amended and clause (aa) inserted to provide for the levy of cess- ", "``(a) in respect of land other than a tea estate, at the rate of six paise on each rupee of development value thereof; ", "(aa) in respect of a tea estate at such rate, not exceeding rupees six on each kilogram of tea on the dispatches from such tea estate of tea grown therein, as the State Government may, by notification in the Official Gazette, fix in this behalf: ", "Provided that in calculating the dispatches of tea for the purpose of levy of rural employment cess, such dispatches for sale made at such tea auction centres as may be recognised by the State Government by notification in the Official Gazette shall be excluded: ", "Provided further that may fix different rates on dispatches of different kinds of tea''. ", "Sub-section (4) was added in Section 4 to enable , if it considers necessary so to do, by notification in , to exempt such categories of dispatches or such percentage of despatches from liability to pay the whole or any part of the rural employment cess or reduce the rate of rural employment cess payable thereon, under clause (aa) of sub-section (2), on such terms and conditions as may be specified in the notification. With effect from 1.10.1982, the first proviso to clause (aa) was omitted. It was contended for the tea estate, inter alia that the above levy violated the provisions of Article 301 of the Constitution and was also beyond the legislative competence of . Upholding these contentions, the observed: ", "``The question then is whether the impugned levy impedes the free flow of trade and commerce throughout the territory of India and, if it does, whether it falls within the exception carved out in article 304(b). If the levy imposes a cess in respect of tea estate, it may will be said that even though the free flow of trade is impeded in its Government throughout the territory of India, it is in consequence of an indirect or remote effect of the levy and that it cannot be said that article 301 is contravened. The contention of the petitioners is, however, that it is ostensibly only in respect of tea estate but in fact it is a levy on despatches of tea. If that contention is sound, there can be no doubt that it constitutes a violation of article 301 unless the legislation is brought within the scope of article 304(b). To determine whether the levy is in respect of tea estates or is a levy on despatches of tea, the substance of the legislation must be ascertained from the relevant provisions of the statute. It cannot be disputed that the subject of the levy, the nature of which defines the quality of the levy, must not be confused with the measure of liability, that is to say, the quantum of the tax. There is a plenitude of case law supporting that principle, among the cases, being , 1 S.C.R.347. ", "10. But what is the position here?.........Now, for determining the true nature of the legislation, whether it is a legislation in respect of tea estate and therefore of land, or in respect of despatches of tea, we must, as we have said take all relevant provisions into account and ascertain the essential substance of it. It seems to us that although the impugned provisions speak of a levy of cess in respect of tea estates, what is contemplated is a levy on despatches of tea instead. The entire structure of the levy points to that conclusion. If the levy is regarded as one in respect of tea estates and the measure of the liability is defined in terms of the weight of tea dispatched, there must be a nexus between the two indicating relationship between the levy, on the tea estate and the criteria for determining the measure of liability. If there is no nexus at all it can conceivably be inferred that the levy is not what it purports to be. The statutory provisions for measuring the liability on account of the levy throws light on the general character of the tax as observed by in Re: A Reference under the Government of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934 [1963] 2 A.E.R. III. , 3 SCR 1 this Court observed that the method of determining the rate of levy would be relevant in considering the character of the levy. All these cases were referred to in , 1 S.C.R. 347 where in the discussion on this point at page 367 this Court said: ", "Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy''. ", "Applying the above tests to the case before it, the Court reached the conclusion that, in substance the impugned levy was a levy in respect of despatches of tea and not in respect of tea estates. It was then pointed out that the question of legislative competence also turned on this issue: ", "``If this impugned legislation were to be regarded as a levy in respect of the estates, it would be referable to entry 49 in List II of the Seventh Schedule of the Constitution which speaks ``taxes on lands and buildings''. But if the legislation is in substance legislation in respect of despatches of tea, legislative authority must be found for it with reference to some other entry'' Pointing out that no such entry in List II or III had been brought o its notice and further that, under S.2 of the Tea Ct, 1953, control over the tea industry has been assumed by within the meaning of Entry 54 of List I, the Court upheld the challenge to the competence of the State legislature to levy the impugned cess. it is submitted that, likewise, here the levy is one in substance on royalties and not one on land. ", "There is force in the contention urged by Sri ", "Iyer that there is a difference in principle between a tax on royalties derived from land and a tax on land measured by reference to the income derived therefrom. That a tax on building does not cease to be such merely because it is quantified on the basis of the income it fetches is nowhere better illustrated than by the form of the levy upheld in , [1948] F.C.R. 207 followed by , [1981] 2 SCR 808 which illustrates the converse situation. (supra) also supports this line of reasoning. But here the levy is not measured by the income derived by the assessee from the land, as is the case with lands other than mineral lands. The measure of the levy is the royalty paid, in respect of the land, by the assessee to his lessor which is quite a different thing. Moreover, interesting as the argument is, we are constrained to observe that it is only a reiteration of the ratio in which has been upset in . We may point out that this is of significance because, unlike in , the statute considered in , as the one here, only purported to levy a cess on the annual value of all land. draws a ``clear distinction between tax on land and tax on income arising from land''. The former must be one directly imposed on land, levied on land as a unit and bearing a direct relationship to it. In para 23 of the judgment, the has categorically stated that a tax on royalty cannot be said to be a tax directly on land as a unit. ", " contended that all the observations and propositions in stem from the basic conclusion of the that the cess levied there was a cess on royalty in view of the Explanation to S. 115 . He also submitted that the statue under consideration in did not provide for any cess in the case of land which did not yield any royalty; in other words, the Act did not use dead rent as a basis on which land was to be valued. He drew attention to the observations of , J.In para 42 of that if the Explanation to S. 115 had used the words `surface rent' in place of `royalty' the position would have been different and that, if a cess on such `surface rent' or `dead rent' is charged, it could be justified as a tax on land falling within the purview of Entry 49, Here, however, the position is different and so, he urged, the nature of the levy is also different. We may have considered these points as furnishing some ground to distinguish the present levy from that in india but for the 's specific disapproval of . We are unable to accept the plea of that, in spite of , he can support the validity of the levy, as the statute considered in contained exactly the same features as are here emphasised by and the validity of such Levy cannot be upheld after . As to the second contention based on the observations in the judgment of J., we may point out here the levy is not one confined to dead rent or surface rent as suggested by J. but one on royalty which even according to J. cannot be described as a tax on land. ", " contended that unless the case of the assessees is that the statute is a piece of colourable legislation, it is not possible to construe the levy on mineral lands differently. He pointed out that S. 4 of the Orissa Cess Act, 1962 levies a cess on all land and that, if Sc. 7(1) and (2) measuring the cess by reference to the income of other categories of land are valid, there is no reason why S.7(3) alone should be treated differently and objected to as imposing a tax on royalties particularly when the levy also extends to dead rent. ", "The answer to this contention appears to be that the plea of the assessee need not go to the extent of saying that the levy is a colourable piece of legislation. it is sufficient to restrict oneself to the issue of a proper determination of the pith and substance of the legislation. There is no doubt an apparent anomaly in considering S. 7(1) and (2) as levying a tax on land but construing S. 7(3) as imposing a tax on royalties and this anomaly has been noticed in (vide para 42). But the question is, what is it that is really being taxed by the ? So far as mineral-bearing lands are concerned, is the impact of the tax on the land or on royalties? The change in the scheme of taxation under S.7 in 1976; the importance and magnitude of the revenue by way of royalties received by the ; the charge of the cess as a percentage and, indeed, as multiples of the amount of royalty; and the mode and collection of the cess amount along with the royalties and as part thereof are circumstances which go to show that the legislation in this regard is with respect to royalty rather than with respect to land. ", " had invited our attention to the decision of this in v Zila Parishad, [1980] 3 S.C.R. 1 which upheld the validity of a `circumstances and property tax' levied by a Zila Parishad. had held this levy could not be traced to any entry other than the residuary Entry 97 of List I. This , on appeal, pointed out the distinction between a tax of this type and a tax on income. It held that the tax was a composite one referable to Entry 49 (tax on lands and buildings), Entry 58 (taxes on animals and boats) and Entry 60 (tax as on professions, trades, callings and employments) of List II. While holding, therefore, that the ceiling of Rs.250 per annum referred to in Entry 60 would not be applicable to the tax, the uttered a ``word of caution''. ", "151 ", "``The fact that one of the components of the impugned tax, namely, the component of `circumstances' is referable to other entries in addition to Entry 60, shall not be construed as conferring an unlimited charter on the local authorities to impose disproportionately excessive levies on the assessees who are subject to their jurisdiction. An excessive levy on circumstances will tend to blue the distinction between a tax on income and a tax on circumstances. income will then cease to be a mere measure or yardstick of the tax and will become the very subject matter of the tax. Restraint in this behalf will be a prudent prescription for the local authorities to follow''. ", "While Sri sought to use this decision in support of his contention that a tax on property can be legitimately measured on the basis of the income therefrom, we think the observations extracted above are very apposite here. The manner in which the levy, initially introduced a uniform cess on all land, was slowly converted, qua mining lands, into a levy computed at multiples of the royalty amounts paid by the lesses thereof seem to bear out the contention that it is being availed of as a tax on the royalties rather than one on the annual value of the land containing the minerals. In the words of (as he then was) one can legitimately conclude that royalty has ceased to be a mere measure or yardstick of the tax and has become the very subject matter thereof. ", "For the reasons discussed above, we repel the contention of the seeking to justify the levy under Entry 45, 49 and 50 of List II of the Seventh Schedule. ", "There has been considerable discussion before us as to whether `royalty' itself is a tax or not. The controversy before us centres round the discussion contained in paras 31 to 34 of the judgement. Counsel for the assessees-respondents invite attention to the opening sentence of para 34 which runs: ``In the aforesaid view of the matter, we are of the opinion that royalty is a tax'' and argue that this clinches the issue. On the other hand, Sri submits that this purported conclusion does not follow from the earlier discussion and is also inconsistent with what follows. He points out that though there is a reference in para 27 to the conclusion of in a judgement of that royalty under S.9 of the MMRD Act is really a tax, and a reference in para 31 to the Rajasthan, Punjab, Gujarat and Orissa decisions to the effect that royalty is not a tax, there is no discussion, criticism or approval of any of the decision on this point and that, therefore, the first sentence of para 34, relied upon for the respondents, is non-sequitir. He submits that, perhaps, there is a typographical error in the first sentence of para 34 and that the sentence should really read thus: ", "``In the aforesaid view of the matter, we are of opinion that cess is a tax, and as such a cess on royalty being a tax on royalty, is beyond the competence of ........'' He also points out that the last sentence of para 34 reads thus: ", "``Royalty on mineral right is not a tax on land but a payment for the use of land''. ", "He submits, therefore, that this issue has not been decided in . He submits that, before we express any opinion on this issue, we should consider the matter afresh and places before us extracts from various lexicons and dictionaries to show that a royalty is nothing more than the rent or lease amount paid to a lessor in consideration for the grant of a lease to exploit minerals. Reference may also be made to the discussion in this respect in paras 35- , Supp. S.C.C. 20. It is therefore, neither a fee nor a tax but merely a price paid for the use of mineral-bearing land. ", "We do not think that it is necessary for us to express an opinion either way on this controversy for, it seems to us, it is immaterial for the purposes of the present case. If royalty itself were to be regarded as a tax, it can perhaps be described properly as a tax on mineral rights and has to conform to the requirements of S. 50 which are discussed later. We are, however, here concerned with the validity of the levy of not royalty but of cess. If the cess is taken as a tax, then, unless it can be described as land revenue or a tax on land or a tax on mining rights, it cannot be upheld under Entry 45, 49 or 50. On the contrary, if it is treated to Entry 23, a proposition the effect of which will be considered later. the question whether royalty is a tax or not does not assist us much in furnishing an answer to the two questions posed in the present case and set out earlier. We shall, therefore, leave this question to rest here. ", "This takes us to the second question posed by us initially and this turns on the effect of M.M.R.D. Act, 1957 and the declaration contained in S.2 thereof which has been extracted earlier. This will arise if we treat the levy as a tax falling under Entry 50 of List II or, alternatively, as a fee though it may not affect the State's competence if it can be attributed to Entry 49 of List II. ", "To take up Entry 50 first, a perusal of entry 50 world show that the competence of with respect thereto is circumscribed by ``any limitations imposed by by law relating to mineral development''. The M.M.R.D Act, 1957, is - there can be no doubt about this a law of relating to mineral development. S.9 of the said Act empowers to fix, alter, enhance or reduce the rates of royalty payable in respect of minerals removed from the land or consumed by the lessee. Sub-section (3) of Section 9 in terms states that the royalties payable under the Second Schedule to the Act shall not be enhanced more than once during a period of three years. has held that this is a clear bar on the State legislature taxing royalty so as, in effect, to amend the Second Schedule to the Central Act and that if the cess is taken as a tax falling under Entry 50 it will be ultra vires in view of the provisions of the Central Act . ", "It is possible, then, to treat the levy as a fee which the legislature is competent to legislate for under Entry 66 of the List? contends for this position particularly on the strength of S.10 of the Orissa Cess Act, 1962. There is one great difficulty in accepting this solution to the 's problem. S.10 as it stands now earmarks the purposes of utilisation of only fifty percent of the proceeds of the cess and that, too, is limited to the cess collected in respect of ``lands other than lands held for carrying on mining operations''. In other words, the levy cannot be correlated to any services rendered or to be rendered by the to the class of persons from whom the levy is collected. Whether royalty is a tax or not, the cess is only a tax and cannot be properly described as a fee. ", "This consideration apart, even assuming it is a fee, the legislature can impose a fee only in respect of any of the matters in the List. The entry in the List that is relied upon for this purpose is Entry 23. But Entry 23, it will be seen, is ``subject to the provisions of List I with respect to regulation and development'' of mines and minerals under the control of the . Under Entry 54 of List I, regulation of mines and mineral development is in the field of legislation ``to the extent to which such regulation and development under the control of the is declared by by law to be expedient in the public interest''. Such a declaration is contained in S. 2 of the M.M.R.D. Act, 1957, which has been set out earlier. It, therefore, follow that any legislation to the extent it encroaches on the field covered by the M.M.R.D. Act, 1957, will be ultra vires. The assessees contend, in this case, that the legislation in question is beyond the purview of the legislature by reason of the enactment of the M.M.R.D. Act. It would appear, prima facie that the contention has to be upheld on the basis of the trilogy of decisions referred to at the outset viz. , and . They seem to provide a complete answer to this question. The argument is, however, discussed at some length, because it has been put forward, mutatis mutandis, in support of the levy of cess by the other as well. ", "Before dealing with the contentions of the counsel for the in this behalf, a reference may be made to a difference in wording between Entry 52 and Entry 54 of List I. The languages of Entry 52 read with Entry 24 would suggest that, once it is declared by by law that the control of a particular industry by the is expedient in the public interest, the legislatures completely lose all competence to legislate with respect to such an industry in any respect whatever, indian Supp. 1 S.C.R. 145. But, even here, there are judicial decisions holding that such declaration does not divest the legislature of the competence to make laws the pith and substance of which fall within the entries in List II, (see for e.g. , 1 S.C.R. 856 and ., 3 S.C.R. 331 to which reference will also be made later, merely on the ground that it has some effect on such industry. Compared to that of Entry 52, the language of Entry 54 is very guarded. It deprives the s of legislative competence only to the extent to which the law of considers the control of to be expedient in the matter of regulation of mines and mineral development. Emphasising this difference, learned counsel for the of Orissa submits that the intent, purpose and scope of the M.M.R.D. Act is totally different and does not cross the field covered by the impugned Act. It is a law to provide for the proper exploitation and development of minerals and regulates the persons to whom, the manner in which and procedure according to which licenses for prospecting or leases for minerals should be granted. The enactment is concerned with the need for a proper exploitation of minerals from lands. The impugned Act, on the other hand, concentrates on the need for development of mineral areas as such and provides for the collection of cess to cater to these needs. The scope of the subject matter of legislation under the two Acts are entirely different and the M.M.R.D. Act cannot be considered to exclude legislation of the nature presently under consideration. ", "Before considering the above contention, it will be useful to refer to certain earlier decisions of this Court which have a bearing on this issue. , 1 S.C.R. 371 concerned the validity of an Act of proposing to acquire certain coal bearing areas in the qua certain areas vested in the itself. While upholding the general right of to legislate for the acquisition of even property vested in a , the Court pointed out that this could be done only if there is some provision in the Central Act , expressly or necessarily implying that the property of the is to be acquired by the . However, the Court held, when the requisite declaration under Entry 54 is made, the power to legislate for regulation and development of mines and minerals under the control of the , would, by necessary implication, include the power to acquire mines and minerals. ", " , 2 S.C.R. 100 was a case arising out of a 1964 amendment to the Bihar Land Reforms Act, 1950. By section 10 of the 1950 Act, all the rights of former landlords or lessors under mining leases granted by them in their \"estates\" came to be vested in the ; but the terms and conditions of those leases were made binding upon the Government. Under a second proviso to this provision and a sub-rule added by virtue of the 1964 amendment, additional demands were made to lessees, the validity of which was challenged successfully before this Court. The Court, applying and held that the whose whole of the legislative field in respect of minor minerals was covered by legislation and Entry 23 of List II was to the extent cut down by Entry 54 of List I. The old leases could not be modified except by a legislative enactment by on the lines of S.16 of the M.M.R.D. Act, 1957. ", " , 3 S.C.R., 688 the Government had declared saltpetre as a minor mineral and auctioned saltpetre mines in the under the M.M.R.D. Act, 1957 read with the Punjab Minor Minerals Concession Rules, 1964. In a writ petition filed by one of the owners, held, unless the mineral deposits were specifically mentioned in the wajib-ul-arz of the village as having vested in the , their ownership would continue to remain vested in the former proprietors according to the record of rights. To meet this difficulty and the difficulties that had been created by haphazard leases created by the erstwhile proprietors, the legislature passed the Haryana Minerals (Vesting of Rights) Act, 1973 and issued notifications thereunder again acquiring the rights to the saltpetre in the lands putting up certain saltpetre-bearing lands to auction. upheld the challenge to the validity of the notifications holding that, in view of the declaration contained in S.2 of the M.M.R.D. Act, the field covered by the impugned Act was already fully occupied by Central legislation and that, therefore, the Act was void and imperative on grounds of repugnancy. This Court, however, reversed 's decision. It held that though the stated objects and reasons of the Act showed that the acquisition was to be made to protect the mineral potentialities of the land and to ensure their proper development and exploitation on scientific lines-and this did not materially differ from that which could be said to lie behind the Central Act - the character of the Act had to be judged by the substance and effect of its provisions and not merely by the purpose given in the ment of Objects and Reasons. Analysing the provisions of the Central Act , the Court pointed out that, subject to the overall supervision of , the Government had a sphere of its own powers and could take legally specified actions under the Central Act and rules. In particular S.16(1)(b) of the Central Act showed that itself contemplated legislation for vesting of lands containing minerals deposits in the Government, a feature that could be explained only on the assumption that did not intend to touch upon the power of legislatures under Entry 18 of List II read with Entry 42 of List III.S.17 also showed that there was no intention to interfere with vesting of lands in the s by the provisions of the Central Act . The decision of , and were distinguished. In (Supra), the respondents relied upon certain observation in and of West Bengal v. , (supra). The Court, however, distinguished them saying: ", "\"In the two cases discussed above no provision of the Central Act 67 of 1957 was under consideration by this Court. Moreover, power to acquire for purposes of development and regulation has not been exercised by Act 67 of 1957. The existence of power of to legislate on this topic as an incident of exercise of legislative power on another subject is one thing. Its actual exercise is another. ", "157 ", "It is difficult to see how the field of acquisition could become occupied by a Central Act in the same way as it had been in the West Bengal's case (supra) even before legislate to acquire land ina . At least untill has so legislated as it was shown to have done by the statute considered by this Court in the case from West Bengal, the field is free for legislation falling under the express provisions of entry 42 of List III\". ", "Tulloch and Baijnath Kedia were also considered no longer applicable as Ss.16 and 17 of the M.M.R.D. Act, 1957 had been amended to get over the need for a parliamentary legislation pointed out in Baijnath Kedia. ", "A similar question whether the State legislature was competent to acquire certain sugar undertakings, when the sugar industry had become a \"declared: industry under the provisions of Entry 52 of List I read with S.2 of the I.D.R. Act, arose for consideration of ., 3. S.C.R. 331. Answering this question in the affirmative, the observed : ", "\"The argument that the legislature lacked competence to enact the impugned legislation is without force. Legislative power of the under Entry 24, List II is eroded only to the extent control is assumed by the pursuant to a declaration made by the in respect of a declared industry as spelt out by the legislative enactment and the field occupied by such enactment is measure of erosion. Subject to such erosion, on the remainder the legislature will have power to legislate in respect of a declared industry without in any way trenching upon the occupied field. legislature, which is otherwise competent to deal with industry under Entry 24, List II, can deal with that industry in exercise of other powers enabling it to legislate under different heads set out in Lists II and III and this power cannot be denied to the . ", "The contention that the impugned Act is in violation of section 20 of the Central Act had no merit. The impugned legislation was no enacted for taking over the management or control of nay industrial undertaken by the undertakings. If an attempt was made to take over the manage- ", "158 ", "ment or control of any industrial undertaking in a declared industry the bar of section 20 would inhibit exercise of such executive power. The inhibition of section 20 is on the executive power which if as a sequel to an acquisition of an industrial undertaking the management or control of the industrial undertaking stands transferred to the acquiring authority section 20 is not attracted. It does not preclude or forbid a State legislature exercising legislative power under an entry other than Entry 24 of List II and if in exercise of that legislative power the consequential transfer of management or control over the industry or undertaking follows as an incident of acquisition such taking over of management or control pursuant to an exercise of legislative power is not within the inhibition of section 20 :. ", "The decisions in the above two case were, again, applied in , 2 S.C.R. 1. Here the question was whether the enactment of the Coal Mines Nationalisation Act , 1973 and the M.M.R.D. Act 1957 precluded the State legislature from providing for the levy of a property tax by , constituted under a 1973 Act of the State legislature, in respect of lands and buildings used for the purposes of and covered by coal mines. The plea on behalf of the appellant-coalfields was that the State Act was invalid (a) as it encroached on the field vested in the by reason of the declaration of S.2 of M.M.R.D. Act and (b) as it impeded the powers and functions of the union under the Coal Mines Nationalosation Act 1973 which had been enacted by \"for acquisition of coal mines with a view to reorganising and restructuring such coal mines so to ensure the rational, coordinated and scientific development and utilisation of coal resources as best to subserve the common good\". Rejecting this contention the Court held : ", "\" Apart from the fact that there is no data before us showing that the property tax constitutes an impediment in the achievement of the goals of the Coal Mines Nationalisation Act , the provisions of the M.P. Act of 1973, under which are constituted afford an effective answer to the Attorney General's contention. Entry 23 of List II relates to \"Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the \". Entry 54 of List I relates to \"Regulation of mines and mineral development to the extent to which such regulation and development under control of the is declared by by law to be expedient in the public interest\". It is true that on account of declaration contained in S.2 of the Mines and Minerals (Development & Regulation) Act . 1957, the legislative field covered by Entry 23 of List II will pass on to by virtue of Entry 54, List I. But in order to judge whether, on that account, the State legislature loses its competence to pass the Act of 1973, it is necessary to have regard to the object and purpose of that Act and to the relevant provisions thereof, under which development Authorities are given the power to tax lands and buildings within their jurisdiction. We have set out the objects of the Act at the commencement of this judgement, one of which is to provide for the development and administration of s through Development Authorities. Section 64 of the Act of 1973, which provides for the constitution of the special areas, lays down by sub-section (4) that: Notwithstanding anything contained in the Madhya Pradesh Municipal Corporation Act, 1956, the Madhya Pradesh s Act, 1962 , , or a , as the case may be shall, in relation to the special area and as from the date of the Development Authority undertakes the function under clause (v) of clause (vi) of Section 68 ceases to exercise the powers and perform the function and duties which the Development Authority is competent to exercise and perform under the Act of 1973. Section 68 defines the function of the Development Authority, one of which as prescribed by clause (v), is to provide the municipal services as specified in sections 123 and 124 of the Madhya Pradesh Municipalities Act, 1961. Section 69 , which defines the powers of the authority, shows that those powers are conferred, inter alia for the purpose of municipal adminstration. Surely, the functions, powers and duties of Municipalities do not become an occupied filed by reason of the declaration contained in section 2 of the mines and Minerals (Development & Regulation) Act , 1957. Though, therefore, on account of that declaration, the legislative field covered by Entry 23, List II may pass on to the by virtue of Entry 54, List I, the competence of to enact laws for municipal adminstration will remain unaffected by our declaration. ", "Entry 5 of List II related to \"Local Government, that is to say, the constitution and powers of municipal corporation and other local authorities for the purpose of local self-Government\". It is in pursuance of this power that the State legislature enacted the Act of 1973. The power to impose tax on lands and buildings is derived by from Entry 49 of List II: \" Taxes on lands and buildings\". The power of the municipalities to levy tax on lands and buildings has been conferred by on . Those authorities have the power to levy that tax in order effectively to discharge the municipal functions which are passed on them. Entry 54 of List I does not contemplate the taking over of municipal functions.\" ", "The Court pointed out that provided a complete answer to the above contention. and , were referred to and distinguished. The decision of in ., A.I.R. 1986 M.P. 33 also arose out of similar facts: The question for consideration was whether the functions, powers and duties of () become an occupied field by virtue of S.2 of the MMRD Act, 1957 and the powers vested in them to regulate construction activities relating to mining areas was ultra vires. It was found that had become the local authority to discharge the functions of a municipal adminstration under a State Act and that the regulation of construction activities was one of the aspects of municipal adminstration and management. In this situation, the question posed was answered in the negative following , and . ", "Placing considerable reliance on the decisions in , and , contended that the State legislation in the present case is not vitiated by reason of M.M.R.D. Act, 1957. He also pointed out that also dies not consider in detail the reasoning in -Rampur and but only reefers to certain observations in the dissenting judgement of ( as His Lordship then was) in the former case and urged. ", "161 ", "that the entire matter requires careful consideration. He submitted that and represent two lines of cases which need reconciliation and that this task has not been attempted at all in . ", "On the other hand, learned counsel for the respondents submitted that the authority of in Western Coalfields-which endorsed -should be considered weak after -which has overruled . The present case, it is submitted, is closer to . It is submitted that the principles of have been referred to with approval in a number of cases [ , 1979-3SCR 254 at 277] , [1981] 2 SCR 742 at 746m I.T.C., [1985] Suppl. SCR 145 at 168 and are too well settled to need any reconsideration. ", "It is clear from a perusal of the decisions referred to above that the answer to the question before us depends on a proper understanding of the scope of M.M.R.D. Act 1957, and an assessment of the encroachment made by the impugned State legislation into the field covered by it. Each of the cases referred to above turned on such an appreciation of the respective spheres of the two legislations. As pointed out in Ishwari Khetan, the mere declaration of a law of that it is expedient for an industry of the regulation and development of mines and minerals to be under the control of the under Entry 52 or entry 54 does not denude the State legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List III. Particularly, in the case of a declaration under Entry 54, is extended to the extent control is assumed by the pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration. While the legislation in Hingir-Rampur and Tulloch was found to fall within the pale of the prohibition, those in Chanan Mal, Ishwari Khetan and Western Coalfields were general in nature and traceable to specific entries in the State List and did not encroach on the field of the Central enactment except by way of incidental impact. The Central Act , considered in Chanan Mal, seemed to envisage and indeed permit State legislation of the nature in question. ", "To turn to the respective spheres of the two legislations we are here concerned with, the Central Act (M.M.R.D. Act, 1957) demarcates the sphere of control in the matter of mines and mineral development. While concerning itself generally with the requirements regarding grants of licenses and leases for prospecting and exploitation of minerals, it contains certain provisions which are of direct relevance to the issue before us. S.9, which deals with the topic of royalties and specifies not only the quantum by also the limitations on the enhancement thereof, has already been noticed. S.9A enacts a like provision in respect of dead rent. Reference may also be made to S.13 and S.18, which to the extent relevant, are extracted here. ", "13. Power of to make rules in respect of minerals- ", "(1) may, by notification in the Official Gazette, make rules for regulating the grant of prospecting licenses and mining leases in respect of minerals and for purposes connected therewith. ", "(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :- ", "(i) the fixing and collection of fees for prospecting licenses or mining leases, surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable;* XXX XXX XXX XXX XXX ", "(m) the construction, maintenance and use of roads, power transmission lines, tramways, railways, aerial rope ways, pipe lines and the making of passages for water for mining purposes on any land comprised in the mining lease; ", "XXX XXX XXX XXX XXX (qq) The manner in which rehabilitation of flora and other vegetation such as trees and the like destroyed by reason of any prospecting a mining operation shall be made in the ______________________________________________________________ *Substituted by Act 37 of 1986 for the original clause (i) which read: ", "(i) the fixing and collection of dead rent, fines, fees or other charges and their collection of royalties in respect of- ", "(i) prospecting licenses, ", "(ii) mining leases, ", "(iii) minerals, mines, quarried, excavated or collected\". ", "163 ", "same area or in any other area selected by (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the prospecting license or mining lease\"* S.18, which originally laid a duty on to take all such steps as may be necessary \"for the conservation and development of minerals in India\" has been amended by Act 37 of 1986 to cover steps \"for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mining operations\" and the scope of the rule-making power under S.18(2) has likewise been enlarged. S.25(1) read thus: ", "\"25(1) Any rent, royalty, tax fee or other sum due to the Government under this Act or the rules made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such effect as may be specified by in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue\". ", "and sub-section (2) provides, further, that all such \"rent, royalty, tax, fee\" etc. shall be a first charge of the assets of the holder of the prospecting licence or mining lease as the case may be. ", "If one looks at the above provisions and bears in mind that, in assessing the field covered by the Act of Parliament in question, one should be guided (as laid down in Hingir-Rampur and ) not merely by the actual provisions of the Central Act or the rules made thereunder but should also take into account matters and aspects which can legitimately be brought within the scope of the said statute, the conclusion seems irresistible, particularly in view of Hingir-Rampur and , that the State Act has trespassed into the field covered by the Central Act . The nature of the incursion made into the fields of the Central Act in the other cases were different. The present legislation, traceable to the legislative power under Entry 23 or Entry 50 of the State List which stands impaired by the declaration under Entry 54, can hardly be equated to the law for land acquisition or municipal administration which were considered in the cases cited and which are traceable to different specific entries in List II or List III. ", "___________________________________________________________ *Newly inserted by Act 37 of 1986 contended that the object and purposes of the Orissa Act and its provisions were quite distinct and different from the object and purposes of the Central Act with the result that the two enactments could validly coexist since they do not cover the same field. It was argued that the impugned Act was concerned with the raising of funds to enable panchayats and Samitis to discharge their responsibilities of local administration and take steps for proper development of areas (including mining areas) under their jurisdiction whereas the Central Act was concerned not with any social purpose but merely with the development of mineral resources of the country and as such the State legislation in this regard may also be treated as referable to Entry No.5 of the State List as the statute in Western Coalfields (supra). ", "As to the reliance on Entry 5 of List II, it is plainly to tenuous. As pointed out by Sri , there is a difference between the `object' of the ACt and its `subject. The object of the levy of the fees may be to strengthen the finances of local bodies but the Act has noting to do with municipal or local administration. In this context, it may be pointed out that while S.10 of the Orissa Act, as originally enacted, provided for a distribution of the cess collected among local bodies, an amendment of 1970 restricted the utilisation of the cess partly for primary education and partly for the above purpose. Even this was amended in 1976 whereafter there has been no restriction regarding the cess collected in respect of mining areas which form part of the consolidated fund of the State. The levy has, therefore, ceased to be capable of being described as a fee. Even if its purpose is only to levy a fee, the fee can be described only as one with respect of `land' (Entry 18) if considered generally or with respect to mines and minerals development (Entry23) if restricted to the nature of the issue before us. We shall discuss the relevance of Entry 18 later but, so far as Entry 23 is concerned, the State's legislative competence is subject to the field covered by the Central Act . Turning therefore to the distinction sought to be made between the respective areas of operation of the two Acts the answer to this contention is provided by . first set out the scheme of the impugned Act thus : ", "\"The scheme of this Act thus clearly shows that it has been passed for the purpose of development of mining areas in the . The basis for the operation of the Act is the constitution of a mining area, and it is in regard to mining areas thus constituted that the provision of the Act come into play. It is not difficult to appreciate the intention of evidenced by this Act. Orissa is an under-developed in the Union of India though it has a lot of mineral wealth of great potential value. Unfortunately its mineral wealth is located generally in areas sparsely populated with bad communication. Inevitably the exploitation of the minerals is handicapped by lack of communications, and the difficulty experienced in keeping the labour force sufficiently healthy and in congenial surroundings. The mineral development of the , thereof, requires that provision should be made for improving the communications by constructing good roads and by providing means of transport such as tramways, supply of water and electricity would also help. It would also be necessary to provide for amenities of sanitation and education to the labour force in order to attract workmen to the area. Before the Act wa passed it appears that the mine owners tried to put up small length roads and tramways for their own individual purpose, but that obviously could not be as effective as roads constructed by the and tramway service provided by it. It is on a consideration of these facts that decided to take an active part in a systematic development of its mineral areas which would held the mine owners in moving their minerals quickly through the shortest route and would attract labour to assist the excavation of the minerals. Thus there can be no doubt that the primary and the principal object of the Act is to develop the mineral areas in the and to assist more efficient and extended exploitation of its mineral wealth\". ", "A little later, at pare 559, the provisions of Central Act LIII of 1948 which were less far reaching that those of 1957 ACt as can be seen from the observations at page 476 of Tulloch- were analysed and the Court concluded : ", "\"Amongst the matters covered by S.6(2) is the levy and collection of royalties, fees or taxes in respect of minerals mined, quarried, excavated or collected. It is true that no rules have in fact been framed by in regard to the levy and collection of any fees; but, in our opinion, that would not make any difference. If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of is subject to the provisions of List 1 with respect of regulation and development under the control of the , the Entry 54 in List 1 requires a declaration by by law that regulation and development of mines should be under the control of the in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to to pass an Act in respect of the subject matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by that it is expedient in the public interest to take the regulation and development of mines under the control of the . In such a case the test must be whether the legislative declaration covers the field or not. Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948\". ", "The following observations in Tulloch are also apposite in this context: ", "\" On the other hand, Mr. -learned counsel for the respondent-urged that the Central ACt covered the entire field of mineral development, that being the \"extent\" to which had declared by law and it was expedient that the should assume control. In this connection he relied most strongly on the terms of s.18(1) which laid a duty upon \"to take all such steps as may be necessary for the conservation and development of minerals in India and \" for that propose may, by notification, make such rules as it deems fit\". ", "If the entire field of mineral development was taken over, that would include the provision of amenities to workmen employed in the mines which was necessary in order to stimulate or maintain the working of mines. The test which he suggested was whether, if under the power conferred by s.18(1) of the Central Act , has made rules providing for the amenities for which provision was made by the Orissa Act and if had imposed a fee to defray the expenses of the provision of these amenities, would such rules be held to be ultra vires of , and this particularly when taken in conjunction with the matters for which rules could be made under s.13 to which reference has already been made. We consider there is considerable force in this submission of learned counsel for the respondent, and thus would require very detailed and careful scrutiny. We are, however, relieved from this task of detailed examination and discussion of this matter because we consider that it is concluded by a decision of the in the ., 2.S.C.R. 537 The above argument was accepted by the , vide page 476, Reference may also be made here to the recent decision of this in , 2 Scale 256. The question whether the State of Bihar had the authority to grant a lease for lifting coal slurry coming out of the appellants washeries and getting deposited on the river bed or other lands was answered in the negative the court came to the conclusion that the \"slurry\" was a \"mineral\" and that its regulation was within the exclusive jurisdiction of . The , in coming to the conclusion, held that no rules had been framed under S.18(1) or 18(2) (k)- disposal or discharge of waste, slime or tailing arising from any mining or metallurgical operations carried out but held that this was immaterial in view of the principles laid down in Hingir Rampur, Tulloch and Baijnath Kedia. These observations establish on the one hand that the distinction sought to be made between mineral development and mineral area development is not a real one as the two types of development are inextricably and integrally interconnected and, on the other, that, fees of the nature we are concerned with squarely fall with the scope of the provisions of Central Act . The object of S.9 of the Central Act cannot be ignored. The terms of S.13 of the Central Act extracted earlier empower the to frame rules in regard to matters concerning roads and environment. S.18(1) empowers to take all such steps as may be necessary for the conservation and development of minerals in India and for protection of environment. These, in the very nature of things, cannot mean such amenities only in the mines but take in also the areas leading to and all around the mines. The development of mineral areas is implicit in them. S.25 implicitly authorises the levy of rent, royalty, taxes and fees under the Act and the rules. The scope of the powers thus conferred is very wide. Read as a whole, the purpose of the control envisaged by Entry 45 and the M.M.R.D. Act 1957, is to provide for proper development of mines and mineral areas and also to bring about a uniformity all over the country in regard to the minerals specified in Schedule I in the matter of royalties and, consequently prices. , who appears for certain undertakings, points out that the prices of their exports are fixed and cannot be escalated with the enhancement of the royalties and that, if different royalties were to be charged in different States, their working would become impossible. There appears to be force in this submission. As pointed out in , the Central Act bars an enhancement of the royalty directly or indirectly, except by the and in the manner specified by the 1957 Act, and this is exactly what the impugned Act does. We have, therefore, come to the conclusion that the validity of the impugned Act cannot be upheld by reference to Entry 23 or Entry 50 of List II. ", "An attempt was made to rest the legislation of Entry 18 of List II viz. `land'. This attempt cannot succeed for the reasons whichever have set out to negative the plea that it falls under Entry 49. A similar pleas in Baijnath was rejected by in the following words : ", "\"Mr. argued that the topic of legislation concerns land and therefore falls under entry 18 of the State List and he drew our attention to other provisions on the subject of mines in the Land Reforms Act as originally passed. The abolition of the rights of intermediaries to the mines and vesting these rights as lessors in was a topic connected with land and land tenures. But after the mining leases stood between and the lessees, any attempt to regulate those mining leases will fall not in entry 18 but in entry 23 even though the regulation incidentally touches land. The pith and substance of the amendment to s.10 of the Reforms Act falls within entry 23 although it incidentally touches land and not vice versa. Therefore this amendment was subject to the overriding power of as declared in Act 67 of 1957 in S.15. Entry 18 of the State List, therefore, is no help\". ", "169 ", "It will be seen that, if the levy in question cannot be described as a tax on land, it cannot be described as fee with regard to land either. ", "For the reasons above mentioned, we hold that the levy of cess under S.5 to 7 of the Orissa Cess Act, 1962 is beyond the competence of . Bihar: ", "The relevant provisions of the Bihar statutes have been set out earlier. While S.5 only lays down that all immovable property shall be liable to a local cess and S.6 provides for the levy to be based on the annual value of lands and sale value of other immovable properties, the latter section specifically enacts that the cess will be on royalty from mines and quarries and on the annual net profit the railways and tramways. The further amendments of S.6 have not changed this basic position. Though the section refers also to the value of the mineral-bearing land, that furnishes only the maximum upto which the cess, based on royalty, could go. In other words, the cess is levied directly on royalties from mines and quarries. The case is, therefore, indistinguishable from . The notifications place the matter beyond all doubt. The levy is a percentage or multiple of the royalty depending upon the kind of mineral and - in the case of iron ore- the method of extraction and nature of the process employed. There are no clear indications in the stature that the amounts are collected by way of fee and not tax. The provisions of S.9 extracted earlier would indicate that only a small percentage goes to the district fund and the remaining forms parts of the consolidated fund of the \"for the construction and maintenance of other works of public utility\". However, the proviso does require at least ten percent to be spent for purposes relating to mineral development. We shall, therefore assume that the levy can be treated, in part, as a fee and, in part, as a tax. But even this does not advance the case of the respondents for the reasons already discussed. ", " submits that, in the original counter affidavit filed on behalf of the , no case was sought to be made out that it was a tax on land, the case was that it was a \"tax on mineral rights\". He urged that, this being out of question because of (para 23 and 30) a belated attempt is made to bring it under Entry 49. we do not need to discuss the contentions here in detail because this is a clearer case of levy on royalty than in Orissa; and, for the reasons we have outlines in our discussion in regard to the Orissa Acts, this levy has also to be declared invalid. ", " also contended that the cannot seek sustain the levy by relying of Art. 277 of the Constitution , in view of the fact that the cess is being levied since 1880. Article 277 is in these terms : ", "\"Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any or by an municipality or other authority or body for the purposes of the , municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by by law\". ", "We think, as rightly contended by Sri that a reliance on Art. 277 will be misplaced for three reasons : ", "(a) The levy that is challenged is under S.6, as amended in 1975, i.e. a post-constitution levy; ", "(b) S.6 on its own language, is operative only \"until provision to the contrary is made by the \" and, as we have held that the field is covered by the M.M.R.D. Act, is supersedes the effect of S.6 re:mineral lands; and ", "(c) Article 277 only saves taxes, duties, and cesses mentioned therein if they continue to be applied for the same purposes and until by law provides to the contrary and with the enactment of the M.M.R.D. Act, 1957, they cease to be valid. In this context, the following observations of this Court in , Supp 3 SCR 70 quoted in , 6 SCR 947 at 959 are quire apposite : ", "\"Dealing next with the import of the words `may continue to be levied' the same was summarized in these terms: ", "(1) The tax must be one which was lawfully levied by a local authority for the purpose of a local area, (2) the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilization is to take place continue to be the same, and (3) the rate of the tax is not enhanced not its incidence in any manner altered, so that it continues to be the same tax\". ", "It is obvious that if these tests were applied the attempt to sustain the tax on the basis of Art. 277 cannot succeed. Indeed, no such attempt was made before us. ", "We, therefore, hold that the levy of cess has to be struck down. It has also been brought to our notice that a Bench of two Judges of this Court has already allowed an appeal by an assessee from a judgement of to the contrary viz. CA No.1521 of 1990. It has been brought to our notice also that has recently invalidated the levy of the cess in v. , (CWJC 2085/89 and connected cases) in a judgement dated 6.11.90, following . Madhya Pradesh : ", "We now turn to the provisions of Madhya Pradesh Act 15 of 1982. We are concerned only with Part IV which levies a cess not on land in general which could be referred to Entry 18 or Entry 49 but only on land held in connection with mineral rights which, in the State, are principally in regard to coal and limestone. Under S.9 the proceeds are to utilised only towards the general development of mineral- bearing areas. Although there is no provision for the constitution of a separate fund for this purpose as is found in relation to the cesses levied under Part II or Part III of the Act this considerations alone does not preclude the levy from being considered as a fee:vide 3.SCR 843 at 873. The clear ear-marking of the levy for purposes connected with development of mineral areas was considered by , in our view rightly, sufficient to treat it as a fee. However, pointed out, such fee would be referable to item 23 and, hence, out of bounds for , after the enactment of M.M.R.D. Act, 1957. For the reasons which have already been discussed in relation to the Orissa Statute, we uphold this conclusion. ", "172 ", "The other statute viz. the Madhya Pradesh Upkar Adhiniyam (Act 1 of 1982) came up for consideration of a Full Bench of in , (and connected cases) in AIR 1989 M.P. 264. The Full Bench held that, in view of s.12 of the Act having been deleted by the 1989 amendment, the levy under s.11 of the Act ceased to be a fee and become a tax. It held further that the levy was not covered by Entry 49 or Entry 50 of List II and was, therefore, ultra vires. It observed : ", "\"It is significant to note that cess is not imposed on all land and that it is not dependent either on the extent of the land held in connection with mineral rights or on the value thereof. The subject-matter of tax, therefore, is major mineral raised from the land held in connection with mineral right. If no minerals are raised, tax is not livable. The tax is not dependent on the extent of the land held in connection with mineral rights. It is not case where all land is liable to payment of cess, that the liability is assessed on the basis of the value of the land and that the measure of the tax in so far as land held under a mining lease is concerned, is the value of the minerals produced. Under the impugned Act, value of the land or of the minerals produced does not play any part in the levy of cess. The quantity of major minerals produced from the land determines the liability to pay tax. In these circumstances, the impugned levy cannot be held to be a tax on land which is covered by Entry 49 of the State List. ", "After distinguishing v. , AIR 1965 SC 1561 and referring to . AIR 1984 SC 420 the Courted concluded : ", "\" The character of impost in the instant case is that though in form it appears to be a tax on land, in substance, it is a tax on minerals produced therefrom. The subject-matter of tax is, therefore, not covered by Entry 49 of the State List.\" ", "As for Entry 50, after referring , the Court observed : ", "\"Now from a perusal of S.11 of the Act, it would be clear that in the instant case by the charging section, tax is not imposed on the mineral rights of every holder of mining lease. The tax is levied on minerals produced in land held under mining lease. In these circumstances, the tax levied by the Act cannot be held to be a tax covered by Entry 50 of List II of the Seventh Schedule to the Constitution. In our opinion, therefore, it has not been shown that is competent to levy the impugned cess.\" ", "This conclusion is obviously correct in the light of our earlier discussion. The court, however, expressed an opinion, in paras 10 to 12 of the judgment, that in case the levy could be treated as a tax imposable under Entry 49 or 50 of List II in the Second Schedule to the Constitution, such power \"has not been taken away by the provision of the MMRD Act\". We think, as already pointed out by us that though the MMRD Act, 1957, unlike s.6(2) of the 1948 Act does not contain a specific provision for the levy of taxes, s.25 of the former does indicate the existence of such power. The above observations of , therefore, in our view, do not attach sufficient importance to s.25 of the MMRD Act and the field covered thereby. This aspect, however, is not of significance in view of the conclusion that the tax is not referable to Entry 49 or Entry 50. ", "We may add that a Bench of this Court has already dismissed the 's petition for leave to appeal from the judgment of (S.L.P. 10052/89, 12696/84 etc. disposed of on 5.2.90) in limine as squarely covered by . It is brought to our notice that , after , has reaffirment its conclusions in and v. , (M.P. No. 1547 of 1990) in the light of . ", "THE REFUND ISSUE Having thus concluded that the levy of cess under the Orissa, Bihar and Madhya Pradesh enactments is invalid,, it becomes necessary to consider the logical consequences of such a conclusion. Prima facia it would seem that the levy should be considered bad since its inception and that all cess levied under the impugned provisions should be directed to be refunded to the assessees, particularly in view of Article 265 of the Constitution. For the States, however, reliance is placed on the following observations in para 35 of the judgement in to contend to the contrary. Towards the conclusion of his judgement, , C.J. dealt with this issue thus : ", "174 ", "\"Mr. , however, submitted that, in any event, the decision in case was the decision of the Constitution Bench of this Court. Cess has been realised on that basis for the organisation of village and town panchayats and comprehensive programme of measures had been framed under the National Extension of Service Scheme to which our attention was drawn. Mr. further submitted that the Directive Principles of Policy embodied in the Constitution enjoined that the s should take steps to organise village panchayats and endow them with power and authority as may be necessary to enable them to function as units of self-government and as the amounts have been realised on that basis, it at all, we should declare the said cess on reality to be ultra vires prospective, In other words, the amounts that have been collected by virtue of the said provision,s should not be declared to be illegal retrospectively and the made liable to refund the same. We see good deal of substance in this submission. After all, there was a decision of this Court in case and amounts have been collected on the basis that the said decision was the correct position. We are, therefore, of the opinion that we will be justified in declaring the levy of the said cess to be ultra vires the power of the Legislature prospectively only\". ", "Relying on the above, observations, it is submitted for the States that they should not be directed to refund a cess which they have been levying for several years in the past on the basis of the law declared by in . Certain other circumstances have also been brought to our notice in this connection : ", "(i) Several States have preceded on the basis that they are entitled to levy a cess of the nature in question. In addition to the States referred to earlier in the judgement, Rajashtan and Andhra Pradesh have also similar statues. ", "(ii) The levy accounts for a substantial part of the s finances particularly in s which are rich in minerals. For e.g. of Madhya Pradesh accounts for a good percentage of this country's mineral resource. It produces 26.53% of the country's production in limestone. 36% in dolomite, 28.14% in coal, 21.5% in iron ore, 13% in bauxite, 21.38% in Manganese ore, 14.43% in rock phosphate, 33% in copper ore and so on. The amounts of cess run to several crores. A direction to refund the cess collected thus far will result in crying halt to all developmental activities initiated and put through and cause irreparable loss to the . ", "(iii) As pointed out (for e.g. in pars 5 to 8 in CMP Nos. 31187 to 31196 of 1984 in CA Nos. 1640 to 1643,1645,1649, 1654, 1655,1659, and 1662 of 1986) the impact of the cess has already been passed on by the assessees- which are leading industries that can easily bear the brunt of the same- to their customers. A refund granted to them will only result in their unjust enrichment and this should be safeguarded against applying the principles in ., 2 SCR 815 at page 824 and ., 3 SCR 561 at page ", "568. ", "The above request was vehemently opposed by the assessees counsel. Presenting their case on this issue, (appear for the appellants in C.A. 4353-4 of 1983 and C.A. 2053-80 of 1980) contended that we should ignore the dicta in para 35 of India Cement as per incuriam. He submitted, first, that the Court there has acted on the assumption that a doctrine of prospective overruling had been enunciated in Golaknath, [1967] 2 SCR 762. Analysing the various judgments delivered in that case, he submitted that, while and four other judges (pp 805- ", "813) approved of the applicability of this doctrine in India, five other judges spoke against it (pp 890, 897, 899- 922, 921 and 952) and the eleventh judge was neutral (p.408). He therefore, submitted that the judges who decided Golaknath were equally divided on the issue and so there is no reason disdained of the binding on us. Second, he submitted that the doctrine of prospective overruling was evolved by the Supreme of the United States in the absence of any constitutional provision militating against it, vide sunburst 77 L.Ed. 310 (at page ", "366) and Linkletter, 14 L.Ed (2d) 601 (at page 604-8). In India, however, the application of the doctrine, particularly in the context of an issue regarding the validity of a tax levy, would run counter to specific provisions contained Articles 246 and 265 of the Constitution. Where the finds that a legislation is beyond the competence of the concerned legislature, it stands uprooted altogether because Articles 246 and 265 say so. There is no scope for, and no room for the exercise of any discretion by, the to say that, there articles of the Constitution notwithstanding, they would treat the legislation to be valid for a certain period or for certain purposes. Third, he submitted that the above objection cannot be \"circumvented\" by a resort to Article ", "142. Sri referred us in this context to the observations in the following decisions of this : ", "Re: Article 246 Pesikaka 1955-1 SCR 613 at pp652,654,656 Chamarbaugwala 1857 SCR 930 at p. 940 ", "Sundararamier & Co 1958 SCR 1422 at pp 1468-1474 West Ramnad 1963-2 SCR 747 at p.764 M.L. Jain 1963 Supp 1SCR 912 at pp 530-41 Re: Article 265 Moopil Nayar 1961-3 SCR 77 at p. 89 1962-2 SCR 983 at p. 996 1962 Supp. 2 SCR 1 at pp. 29-30 1963-1 SCR 220 at p. 233 Re: Article 142 Garg 1963 Suppl. 1 SCR at pp. 896-8 It is submitted , relying on , 4 SCC 1 that a refund is the automatic and inevitable consequence of the declaration of invalidity and should be granted proved a suit within a period of limitation or a writ for declaration and consequential relief is filed. ", "Supplementing the above arguments, appearing for some of the assessees, contended that there can be no question of the exercising any discretion under Article 142 so as to destroy a fundamental right of the assessees. Learned counsel also submitted that considerations of hardship of the , in case they are called upon to refund huge amounts, can be no relevant consideration at all. He urged, that in some at least of the cases here, there is no averment, much less evidence, of any irreparable hardship that is likely to result if a refund is ordered. He also pointed out that in the converse situation where a retrospective levy is held to be valid, assessees have been held entitled to no relief from payment of back duty on grounds of hardship: vide 2 Supp. at Pp12,13 and urged that there cannot be a different rule for the State. submitted that the ruling in Murthy could not be invoked to seek prospective invalidation as, at least so far as Orissa was concerned, as the decision in Tulloch had clearly defined the limitations of the State's power to make such levies. ", "In addition to the above general arguments, reliance had also been placed by the assessees on certain specific interim orders passed in these cases and it has been contended that these orders should be given effect to, or at least taken into account, in deciding the issue of the final relief to be granted. It is therefore necessary to refer to these orders : ", "(i) In C.A. Nos. 4353-4 of 1983, there is no interim order staying recovery of the cess at all except of the arrears for the period from 1.1.1983 to 31.3.1983 and even this was made subject to the furnishing of a bank guarantee by the assessee. ", "(ii) In C.A. 2053-80 of 1980 there was initially (on 2/2/1981) an order of stay of recovery of cess on the furnishing of bank guarantees. But this was later substituted by an order of 25.3.1983 by which the amounts of cess were to be deposited in every quarter and then withdrawn by the State but this was on the undertaking buy the State's Advocate General to refund the amount \"if deposited, in the event the appeal succeeds\". This continued till 30.1.90 when the Counsel of the State of Orissa undertook, in view of the decision in , that the levy of the cess for the quarter ending December, 1989 onwards will not be enforced until further orders. Presumably, therefore, there has been no collection for cess in Orissa since that period. ", "(iii) The position in the Orissa case of is somewhat different. It is pointed out that when the levy of cess first came into force w.e.f. 1.4.1977, who supplied coal to the assessees had challenged the levy of cess by a writ petition and obtained an interim injunction order but eventually withdrew the writ petition. But simultaneously, the said company wrote to the assessee that the amounts of cess (which were collected from the assessee) would be kept in a suspense account and that, after a deci- ", "178 ", "sion is rendered by a court of law, it will be decided whether they should be deposited with the against cess or be refunded to the assessees. It was made clear that, in case the levy of cess is held invalid, \"there will be no hitch in refunding the amount\". This arrangement went on between 1977 and 1982. ", "On 21.9.1982, the assessee filed a writ petition challenging the levy as it was enahanced from 25% to 100% from 1.4.80. An interim stay was granted by restricted to be enhanced demand but even this was vacated by on 13.5.1983 in view of the decision in AIR 1983 Orissa 210 that the levy was valid. Finally, by its judgement dated 22.12.1989 followed and allowed the writ but directed that the collections so far made shall be allowed to be retained by the as was directed by in the case of (supra). This judgement is the subject matter of SLP 1479 of 1990 by the . ", "The assessee thereupon file a review petition in regard to the above direction contending ; (a) that had no jurisdiction to declare provision to the unconstitutional only \"prospectively\"; (b) that the cess in the case had been collected only by and had not been deposited in the State coffers; and (c) that the principle of `unjust enrichment' should equally apply to the State which should not be permitted to enrich itself by the levy of an illegal exaction. The application for review was dismissed by on 13.7.90. Thereupon the assessee has preferred the unnumbered SLP on 1990 and SLP 11939 on 1990 respectively against the original judgement dated 22.12.1989 and the order on the review petition dated 13.7.1990. ", "It is contended that , having regard to the circumstances set out earlier, should have directed a refund of the cess. collected. IT is stated that, subsequently, Western Coalfields have paid over the amounts of cess to the Government [vide orders of this Court referred to in sub para (v) below]. It is also submitted that the averments by the now made that the amounts collected have been utilized by the on objects enumerated in Part IV of the Constitution are the result of an afterthought and are being put forward to defeat the rightful entitlement of the assessee to the refund. ", "(iv) In the Bihar case, there was an interim order on 10.2.1986 to the following effect: ", "179 ", "\"On the stay application there will be no stay of recovery of cess but in case appellants succeed in appeal in this Court, the excess amount so recovered will bepaid to the appellants with interest at the rate of 12% from the date of recovery\" ", "This was modified on 30.1.90 in view of the judgement in which had been delivered by this time, and it was directed that the State of Bihar should not also enforce any demand for cess for the quarters ending December, 1989 and thereafter until further orders. Presumably, therefore, there has been no levy of cess in Bihar from the last quarter of 1989 onwards. Counsel for the assessees from Bihar-Sri Chidambaram and stated that they seek compliance with the order dated 10.2.86 and would not insist on refund of cess collected earlier to that date. ", "(v) Turning to the Madhya Pradesh matters, the position is this, , by its judgement dated 28.3.1986 held the levy to be invalid. In C.A. 1640 to 1662 of 1986, the initial order passed on 2.5.1986 was this : ", "\" There will be stay of refund of the cess already collected pending disposal of the appeals. Learned counsel for the states that, in the event of the appeals being dismissed the is prepared to pay interest at 12% per annum. There will, however, be no stay of operation of the judgement.\" ", "As a result of the order, there should have been no collection of cess by the subsequent to the date of the judgement and only issue could have been regarding the refund of the cess already collected from 1982 to 28.3.1986. ", "However, approached the with an application in one of the appeals (viz. C.A. 1649/86) praying that, pending disposal of the appeals, it should be permitted to collect the amount of cess and deposit the same in a separate account in the vis-a-vis each of its customers. This application was ordered on 1.8.86. When this order was passed, moved an application praying that, instead of the monies being kept in deposit in bank account by , it will be conducive to public interest if the is permitted to utilise the moneys \"in mineral areas development programs\" and that the would abide by such terms as the may impose at the time of final decision. It was, therefore, prayed that the Western Coal fields should be directed to deposit the amounts collected by it to . The found this request reasonable and passed the following order on 15.10.86 : ", "\"The order dated 1.8.86 passed in the above appeal is modified as follows : ", "The amount deposited by in a separate account in the in accordance with the directions issued by this Court on 1.8.1986 shall be paid to of Madhya Pradesh. In the event, of failing in this appeal, the amount received by under this order shall be refunded by that Government within three months from the date of the judgement to with interest at 12% per annum to disburse in favour of those who had paid it, subject to such directions which this court may give in its judgement. The amount received by shall be spent in accordance with the provisions contained in the impugned Act.\" ", "Fresh applications were filed by the in a number of the other appeals seeking similar direction as in C.A. 1649/86 but the request does not show that any such order were passed in appeal other than C.A. 1649/86. However, it seems that, in the case of coal, the cess is being collected by and other like public sector organisation (which are subsidiaries of ) from all their customers and passed on to the not only in Madhya Pradesh but also in Orissa (as indicated in sub-para (iii) above), apparently on the understanding that it should be refunded by the concerned Government with interest in case the levy is ultimately held invalid. Sri , appearing for , made it clear that this company would abide by the direction of this , in so far as the amounts of cess collected by it remain with it or are directed to be refunded by the Government to it. ", "We have given our earned consideration to these contentions and were are of opinion that the ruling in concludes the issue. There the was specifically called upon to consider an argument that, even if the statutory levy should be found invalid, the may not give directions to refund amounts already collected and the argument found favour with the bench of seven judges. We are bound by their decision in this regard. It is difficult to accept the plea that, in giving these directions, the overlooked the provisions of Article 246 and 265 of the Constitution. The was fully aware of the position that the effect of the legislation is question being found beyond the competence of the State legislature was to render it void ab initio and the collections made thereunder without the authority of law. Yet the considered that a direction to refund all the cesses collected since 1964 would work hardship and injustice. The directions, now impugned, were given in the interest of equity and justice after due consideration and we cannot take a contrary view. ", "In our view, we need enter into a discussion of the principles of prospective validation enunciated by at lease some of the Judges in Golaknath (supra) as the direction in can be supported on another well settled principle applicable in the area of the writ jurisdiction of s. We are inclined to accept the view under on behalf of the state that a finding regarding the invalidity of a levy need not automatically result in a direction for refund of all collections thereof made earlier. The declaration regarding the invalidity of a provision and the determination of the relief that should be granted in consequence thereof are two different things and, in the latter sphere, the has, and must be held to have, certain amount of discretion. It is a well-settled proportion that it is open to the to grant , could or restrict the relief in a inner most appropriate to the situation before it is insuch a way as to advance the interests of justice. It will be appreciated that it is not always possible in all situations to give a logical and complete effect to a finding. Many situations of this arise in actual practice . For instance , there are cases where a comes to the conclusion that the termination of the services of an employee is invalid, yet in refrains from giving him benefits of \"reinstatement\" (i.e. continuity in service) on \"back wages\". In such cases, the direction of the does not result in a person being denied the benefits that should flow to him as a logical consequence of a declaration inhis favour. It may be said that, in such a case, the 's direction does not violate any fundamental right as happens in a case like this were an \"illegal\" exaction is sought to be retained by the . But even in the latter type of cases relief has not been considered automatic. One of the commonest issue that arose in the context of the situation we are concerned with is where a person affected by an illegal exaction files an application for refund under the provisions of the relevant statute of files a suit to recover the taxes as paid under a mistake of law. In such a case, the can grant relief only to extent permissible under the relevant rules of limitation. Even if he files an application for refund or a suit for recovery of the taxes paid for several years, the relief will be limited only to the period in regard to which the application for refund or a suit for recovery of the taxes paid for several years, the relief will be limited only to the period in regard to which the application or suit is not barred by limitation. If even this instance is sought to be distinguished as a case where the 's hands are tied by limitations inherent in the form of forum in which the relief is sought, let us consider a very case where a petitioner seeks relief against an illegal exaction in a writ petition filed under Article 226. In this situation, the question has often arisen whether the petitioner's prayer for refund of taxes collected over an indefinite period of years should be granted once the levy is found to be illegal. To answer the question in the affirmative would result in discrimination between persons based on their choice on the forum for relief, a classification which, prima facie is too fragile to be considered a relevant criterion for the resulting discrimination. This is one of the reasons why there has been an understandable hesitation on the part of s in answering the above question in the affirmative. ", "The above aspect of the matter has been considered in several decisions of this . ., 6 SCR 261 the respondents who were dealers in tobacco in the of Madhya Bharat filed a writ petition under Article 226 of the Constitution for the issue of writ of mandamus directing the refund of sales tax collected from them on the ground that the impugned tax was violative of Article 301 (a) of the Constitution and that they had paid the same under a mistake of law. It was contended on behalf of the that even if the provision violated the fundamental rights, should not exercise its discretionary power of issuing a writ of mandamus directing refund since there was unreasonable delay in filing the petition. This contention of the was rejected by but on further appeal this tool a different view. While agreeing that the s have the power, for the purposes of enforcement of fundamental rights and statutory rights, to give a consequential relief by ordering repayment of any money realised by the government without authority of law, the said: ", "\"At the same time we cannot lose sight of the fact that the special remedy provided under Article 226 is not intended to supersede completely the modes of obtained relief by an action in a civil court or to deny defends legitimately open in such actions. It has been made clear more than once that the power to give relief under Article 226 is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the several matters which rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking the special remedy and what excuse there is for it. Another matter which can be rightly taken into consideration is the nature of the facts and law that may have to be decided as regarded the availability of consequential relief. Thus, where, as in these cases, a person comes to the for relief under Article 226 on the allegations that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, if it the , finds that the assessment was void, being made under a void provision of law, and the payment was made by mistake, it is still not bound to exercise its discretion directing repayment. Whether repayment should be ordered in the exercise of this discretion will depend in each case of its own facts and circumstances. It is not easy nor is it desirable to lay down any rules of universal application it may however be stated as a general rule that if there has been unreasonable delay, the ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus.\" ", "The further pointed out that the delay may be considered unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the court to hold that it is unreasonable. The relief given by was modified on this basis. 2 S.C.R., 824 the petitioners had collected sales tax from their customers and paid it over to the . directed a refund but on the condition that the amounts should be passed on to the customers. Since the petitioner did not comply with the condition, the sales tax officer forfeited the sum under S.21(4) of the Bombay Sales Tax Act, 1953. A writ petition was filed by the petitioner contending that S.21(4) infringed Articles 19[10(f)] and 365 of the Constitution and hence, they were not liable to repay the amount. This was dismissed on the ground that they had defrauded their customers and, therefore, not entitled to any relief even if there was a violation of fundamental rights. An appeal to was also dismissed. Subsequently, when coercive proceedings were taken for recovering the amounts as arrears of land revenue, the petitioners paid the amounts in 1959-60. Much later, there was a decision of this striking down the corresponding provision of the Bombay Sales Tax Act 1946 as ultra vires. The petitioners thereupon filed a writ petition under Article 32 of the Constitution claiming a refund of the amounts paid by them in consequence of the recovery proceedings. It was held by four of the five learned Judges of this that the writ petition should be dismissed on the ground of laches. Chief Justice held that though Article 32 gives the right to move the by appropriate proceedings for enforcement of fundamental rights and cannot place any hindrance in the way of an aggrieved person, once the matter reached this court, the extent or manner of interference was for the to decide. The learned Chief Justice pointed out that this had put itself in restraint in the matter of petitions under Article 32. For example, if a party had already moved High under Article 226 , this court would refuse to interfere. Similarly, in inquiring into belated and stale claims, this should take note of evidence of neglect of the petitioner's own rights for a long time or of the rights of innocent parties which might have merged by reason of the delay. It was possible for this to lay down any specific period as the ultimate limit of action and the case will have to be considered on its own facts. On the facts of the case before it, the majority found that the petitioner had by his own conduct abandoned his litigation years ago and could not be permitted to resume it several years later merely because some other person had got the statue declared unconstitutional. While C.J. was of the view that the should not, on the facts of the case apply for analogy of the article in the Limitation Act in cases of mistake of law give relief, and felt that even for a writ petition the limitation period fixed for a suit would be a reasonable standard for measuring delay. and dissented. . was of the view that on the facts of the case there was no delay but that the period under the Limitation Act should not be applied to such cases and that a period of one year should be taken as a period beyond which the claim would be considered a stale claim unless the delay is explained. \" Such a practice\" the learned Judge observed, \"would not destroy the guarantee under Article 32 because the article nowhere lays down that a petition however late, should be entertained. Only was emphatic that laches or limitation should be no ground to deny relief. The learned Judge observed (for brevity, we quote from head note): ", "\"Since the right given to the petitioners under Article 32 is itself a fundamental right and does not depend on the discretionary powers of this , as in the case of Article 185 226 , it is inappropriate to equate the duty imposed on this to the powers of Chancery in England or the equitable jurisdiction of s in the United States. The facts that the petitioner have no equity in their favour is an irrelevant circumstance in deciding the nature of the right available to an aggrieved party under Article 32. ", "This is charged by the Constitution with the special responsibility of protecting and enforcing the fundamental rights, and hence laches on the part of an aggrieved party cannot deprive him of his right to get relief under Article 32. In fact, law reports do not show a single instance of this refusing to grant relief on the grounds of delay. If this could refuse relief on the ground of delay , the power of the under Article 32 would be discretionary power and the right would cease to be a fundamental right. The provisions contained in the Limitation Act do not apply to proceedings under Articles 226 and 32 and if these provisions of the Limitation Act are brought in indirectly to control the remedies conferred by the Constitution, it would be a case of indirectly abridging the fundamental rights which this court, in 's case. 2 S.C.R. 752 held that cannot do. The fear that forgotten claims and discarded right against Government may be sought to be enforced after the lapse of a number of years if fundamental rights are held to be enforceable without any time limit, is an exaggerated one, for , after all, a petitioner can only enforce an existing right.\" The above principles have been applied in several subsequent cases: , 2 SCR 216; v. union of India 3 SCR 180; , 4 SCC 566; , 2 SCR 511 and . 1 SCC 401. ", "The above cases no doubt only list situations where directions for refund have been refused, or considered to be liable to be refused, on grounds of unreasonable delay or laches on the part of the petitioners in approaching the in the interests of justice and equity. The importance of these cases, however, lies not in the grounds on which refund has been held declinable but because they lay down unequivocally that the grant of refund is not an automatic consequence of a declaration of illegality. Once the principle that the has a discretion to grant or decline refund is recognised, the ground on which such discretion should be exercised is a matter of consideration for the having regard to all the circumstances of the case. It is possible that a direction for refund may be opposed by the on grounds other than laches or limitation. To give an instance, in recent years the question has often arisen whether a refund could be refused on the ground that the person who seeks the refund has already passed on the burden of the illegal tax to others and that to grant a refund to him would result in his \"unjust enrichment\". Some decisions have suggested a solution of neither granting a refund nor permitting the to retain the illegal exaction. This issue has been referred to a larger Bench of this and its is not necessary for us to enter into that question here. so far as the present cases are concerned, it is sufficient to point out that all the decided cases unmistakably show that, even where the levy of taxes is fount to be unconstitutional, the is not obliged to grant an order of refund. It is entitled to refuse the prayer for good and valid reasons. Laches and undue delay or intervention of third party rights would clearly be one of those reasons. Unjust enrichment of the refundee may or may not be another. But we see no reason why the vital interests of the , taken note of by the learned judges in should not be a relevant criterion for deciding that a refund should not be granted. We are, therefore, unable to agree with the learned counsel for the petitioners that any different criterion should be adopted and that the direction in paragraph 35 of should not be followed in those cases. ", "For the reasons discussed above, we are of opinion that, though the levy of the cess was unconstitutional, there shall be no direction to refund the assessees of any amounts of cess collected until the date on which the levy in question has been declared unconstitutional. This in regard to the Bihar cases, will be the date of this judgement. In respect of Orissa, the relevant date will be 22.12.1989 on which date, , following declared the levy by unconstitutional. In respect of Madhya Pradesh, the relevant date will be the date of the judgement in and connected cases (viz. M.P. 410/83 decided on 28.3.1986) in respect of the levy under Act 15 th 1982. Though there are the dates of the Judgement of the appropriate , which may not constitute a declaration of law within the scope of Article 141 of the constitution, it cannot be gainsaid that the cannot, on any grounds of equity, be permitted to retain the cess collected on and after the date of 's judgement. ", "187 ", "Another point that was raised, was that in many of these cases the or a Coal field Companies had given an undertaking that incase the levy is held to be invalid by this , they would refund the amount collection with interest. It is submitted that the condition imposed, or undertakings given, to this effect and recorded at the time of passing interim orders in the various cases should be given implemented. The interim undertakings or directions cannot be understood in such a manner as to conflict with out final decision on the writ petitions set out above. But we agree that, to the extend refunds of amounts of cess collected after the relevant dates are permissible on the basis indicated by us, the should refund those amounts to the assessees directly or to the from whom they were collected, with interest at the rate directed by this or mentioned in the undertaking from the date of the relevant judgment to the actual date of repayment. The , when hey get th refunds, should pass on the same to their customers, the assessees. ", "The appeals are disposed of accordingly. There will be no order as to costs. ", " disposed of."], "relevant_candidates": ["0000020762", "0000021773", "0000024818", "0000027891", "0000032134", "0000033396", "0000082588", "0000120358", "0000198371", "0000258508", "0000320843", "0000321652", "0000328927", "0000364995", "0000409321", "0000419916", "0000470241", "0000493792", "0000603736", "0000623976", "0000707735", "0000716347", "0000725224", "0000791627", "0000865455", "0000870844", "0001013581", "0001053542", "0001073516", "0001104902", "0001159177", "0001201636", "0001204286", "0001230460", "0001233720", "0001239855", "0001247047", "0001291316", "0001293816", "0001340113", "0001404351", "0001427520", "0001448438", "0001464523", "0001506108", "0001546265", "0001609886", "0001653713", "0001682508", "0001683423", "0001716282", "0001752601", "0001854752", "0001880654", "0001907321", "0001907642", "0001945293", "0001992295"]} {"id": "0001726678", "text": ["CASE NO.: Appeal (civil) 1990 of 1995 PETITIONER: MATHURAM AGRAWAL RESPONDENT: STATE OF MADHYA PRADESH DATE OF JUDGMENT: 28/10/1999 BENCH: S.P. BHARUCHA & B.N. KIRPAL & V.N. KHARE & S.S.M. QUADRI & D.P. MOHAPATRA JUDGMENT: ", "JUDGMENT 1999 ( 4 ) Suppl. SCR 195 D.P. MOHAPATRA, J. This case calls in question the vires of proviso to clause (b) of sub-section (2) of Section 127-A of Madhya Pradesh Municipalities Act, 1961 (for short the 'Act') and the levy and collection of property tax in respect of the buildings owned by the appellant. ", "The relevant facts of the case, shorn of unnecessary details, may be stated as under: ", "The appellant and respondents 4 to 7 are joint owners of 13 separate items of house properties bearing No. 56/2(1) to 56(2)/13 situated in ward No. 15 of Raigarh Municipal area. The assessment proceeding for the purpose of levying property tax was initiated under the provisions of the Madhya Pradesh Municipalities Act, 1961 (M.P. Act No. 37 of 1961) (hereinafter referred to as 'the Act') by , Raigarh, respondent no.2 herein. The Municipality purporting to invoke the proviso to the section 127-A(2) of the Act aggregated the annual letting value of all the buildings and levied property tax on the deemed annual letting value so aggregated. The assessment order was followed by the demand notice. ", "Feeling aggrieved by the levy and collection of property tax in the manner aforementioned, the appellant and respondents 4 to 7 preferred appeal under Section 139 of the Act before the Civil Judge Class-II, Raigarh. The appellate authority allowed the appeal and quashed the assessment order and the demand notice. On a revision petition being filed by the Municipality the District Judge, Raigarh allowed the revision, set aside the order of the appellate authority and confirmed the order of assessment made by the concerned authority. ", "The appellant and the respondents 4 to 7 filed the Writ Petition in challenging the order of assessment, inter alia, on the grounds that it was not in conformity with the provisions of the Act. They also challenged the constitutional validity of the proviso to sub-clause (b) of Section 127(A) (2) of the Act. By the impugned judgment of rejected the contentions raised by the petitioners including the challenge to the constitutional validity of the proviso to Section 127(A)(2) and confirmed the assessment order of the municipality and dismissed the writ petition. placed reliance mainly on the decision of this Court in ., 1 SCC 361 and its own decision in the case of , (1990) M.P.L.J. 28. Thereafter one of the petitioners in the Writ Petition, , filed this appeal challenging the judgment of . ", "When the case was taken up by a Bench of two learned Judges of this Court a submission was made on behalf of the petitioner that in the light of the decision of this Court in the case of Administrator, Municipal Corporation, Bilaspur (Supra) decided by a Bench of three learned Judges of this Court construing Section 127(1)(2) of the Act the question as to the constitutional validity of that proviso arises for consideration. Taking note of the said submission the bench passed the order dated 13.2.95, relevant portion of which reads as follows: ", "\"In view of the construction made by a Bench of three learned Judges in the above quoted decision, the question of considering the constitutional validity of the provision does arise. However, the question for consideration also is whether the alternative construction which would support the constitutional validity of the provision is to be preferred and is also available on the language of the statute. It is, therefore, appropriate that the matter is considered by a Bench of five learned Judges.\" ", "The question that arises for consideration is when several items of properties (houses, buildings or lands) within the municipality, the annual letting value of each of which dose not exceed Rs. 1,800 per annum, are owned by one person, then, is the owner liable to pay property tax for such properties. ", "Since determination of the question largely depends on interpretation of Section 127 (A) and its interaction with other relevant provisions of the Act it would be convenient to quote the relevant statutory provisions before proceeding to consider the merits of the case. ", "S.126 Definition of annual letting value - In this Chapter, the expression \"annual letting value\" shall mean: ", "(i) where any building or land is let out, the annual rent for which it is actually let out; ", "(ii) where the rent of any building has been determined under the Madhya Pradesh Accommodation Control Act, 1955 (23 of 1955), the annual rent as so determined; and ", "(iii) in any other case, the annual rent for which any building or land exclusive of furniture or machinery contained or situated therein or thereon, might reasonably be expected to let from year to year, and shall include any payment made or agreed to be made by a tenant to the owner of the building or land on account of occupation taxes, insurance or other charges incidental to the tenancy; ", "Provided that if it appears to the that the annual rent of any building or land is much lower than the annual rent for which it might reasonably be expected to let at the time of assessment, such letter rent shall be deemed to be the annual letting value in respect of such building or land.\" ", "Section 127 reads as follows: ", "\"127 Taxes which may be imposed (1) A Council may, from time to time and subject to the provisions of this Chapter, and any general or Special order which the State Government may make in this behalf, impose in the whole or in any part of the Municipality any of the following taxes, for the purposes of the Act, namely:- ", "(0 a tax payable by the owner of houses, buildings or lands situated within the limits of Municipality with reference to annual letting value of the house, building or land called property tax: ", "127(A) Imposition of property tax (1) Notwithstanding anything contained in this Chapter, as and from the financial year 1976-77, there shall be charged, levied and paid for each financial year a tax on the lands or buildings or both situate in a Municipality other than Class IV Municipality at the rate specified in the table below: ", "TABLE (0 where the annual letting value 6 per centum of the annual exceeds Rs. 1800 but does not letting value exceed Rs. 6000 (ii) where the annual letting value 8 1/3 per centum of the exceeds Rs. 6000 but does not annual letting value exceed Rs. 12000 (iii) where the annual letting value 10 per centum of the annual exceeds Rs. 12000 but does not letting value exceed Rs. 18000 (iv) where the annual letting value 15 per centum of the annual exceeds Rs. 18000 but does not letting value exceed Rs. 24000 (v) where the annual letting value 20 per centum of the annual exceeds Rs. 24000 letting value ", "(2) The property tax levied under sub-section (1) shall not be leviable in respect of the following properties, namely:- ", "(a) building and lands owned by or vesting in-(i) the Union Government ", "(ii) ; (iii) the Council; ", "(b) buildings and lands the annual letting value of which does not exceed eighteen hundred rupees: ", "Provided that if any such building or land in the ownership of a person who owns any other building or land in the same Municipality, the annual letting value of such building or land shall for the purpose of this clause, be deemed to be the aggregate annual letting value of all buildings or lands owned by him in the Municipality. ", "(Emphasis supplied) xxx xxx xxx\" ", "From the statutory provisions quoted above it is clear that the incidence of the tax is the house, building or land situated within the limits of the municipality. The tax is to be paid by the owner(s) of the house, building or land. The amount of tax to be paid by the owner(s) is to be determined with reference to the annual letting value of the house, building or land in question. The manner of determination of the annual letting value is prescribed in section 126 of the Act. The Table in Section 127 , which provides for the rate at which the tax is to be levied, starts with property the annual letting value of which exceeds Rs. 1,800 per annum but does not exceed Rs. 6,000, and in such a case the tax is to be levied at 6 per centum of the annual letting value. As the annual letting value of the property escalates the rate of tax increases. The very fact that no rate of tax is prescribed in the Table for a property the annual letting value of which is less than Rs. 1800 clearly indicates the intention of the not to levy the tax on such properties. This position is further clarified in clause (b) of subsection (1) of Section 127 in which it is laid down that house, building and lands annual letting value of which does not exceed Rs. 1800 are exempt from property tax. ", "On a fair reading of the proviso to section 127 (A)(2)(b) it is clear that in respect of any building or land whose letting value is less than Rs. 1800 which is owned by a person who owns any other building or land in the same municipality, the annual letting value of such building or land shall be deemed to be the aggregate annual letting value of all building or lands owned by him in the municipality. The provision also makes it clear that this exception is meant for the purpose of this clause i.e., clause (b) of subsection (2). It follows, therefore, that the exemption to the levy under subsection (1) of section 127(A) will not be available in a situation to which the proviso applies. ", "Then the further question for determination is whether such a building or land, annual letting value of which does not exceed Rs. 1800, automatically becomes liable for payment of tax and if so what is the rate of tax in such a case. The provision in sub-section (1) of section 127(A) , which is a charging section, makes no provision regarding the rate at which the tax is to be paid in case the building or land in question annual letting value of which is less than Rs. 1800 is to be taxed. ", "Another question that arises for consideration in this connection is whether sub-section (1) of Section 127-A and the proviso to sub- section 2 ", "(b) should be construed together and the annual letting values of all the buildings owned by a person to be taken together for determining the amount to be paid as tax in respect of each building. In our considered view this position cannot be accepted. The intention of the in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law i.e., the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the legislature to do the needful in the matter. ", "In the case of , quoted with approval the following passage from the opinion of Lord Russel of Killowen in Inland Revenue Commissioners v. Duke of Westminster, (1936) A.C. 1: ", "\"I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if in accordance with a 's view of what it considers the substance of the transaction, the thinks that the case falls within the contemplation or spirit of the statute. The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case. As Lord said many years ago in (1869) 4 H L 100(2) at p. 122: \"As 1 understand the principle of all fiscal legislation it is this\" If the person sought to be taxed conies within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand if the , seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of the law the case might otherwise appear to be.\" ", "In the case of (INSPECTOR OF TAXES) v. . 1948 The All England Law Reports page 1, Lord in his opinion at page 5 observed: ", "\"My Lords, there is a maxim of income tax law which, though it may sometimes be over-stressed, yet ought not to be forgotten. It is that the subject is not to be taxed unless the words of the taxing statute ( unambiguously impose the tax on him. It is necessary that this maxim should on occasion be reasserted and this is such an occasion.\" ", "In Administrator, , Bilaspur v.. , Advocate and another (supra) this while accepting the position that each building is a unit for the purpose of taxation and that there I is no provision for taxation in respect of a building having annual letting value less than Rs. 1800 and that the deeming proviso to clause (b) of sub- section (2) as expressly stated is \"for the purpose of this claluse\", held that since the aggregation of annual letting value of all buildings or lands is permitted, then, all such buildings or lands have to be taken as one unit for the purpose of taxation. The was of the view that any other construction would render the proviso nugatory and defeat the object of the Act. ", "This construction, in our considered view, amounts to supplementing the charging section by including something which the provision does not state. The construction placed on the said provision does not flow from the plain language of the provision. The proviso requires the exempted property to be subjected to tax and for the purpose of valuing that property alone the value of the other properties is to be taken into consideration. But, if in doing so, the said property becomes taxable, the Act does not provide at what rate it would be taxable. One cannot determine the ratable value of the small property, by aggregating and adding the value of other properties, and arrive at a figure which is more than possibly the value of the property itself. Moreover, what rate of tax is to be applied to such a property is also not indicated. ", "Take, for instance, a case where a person owns 10 buildings, 8 of which are small ones fetching annual rental value of Rs. 1,500 each and the other 2 fetch annual rental value of Rs. 60, 000 each; then applying the ratio of Administrator , Bilaspur (supra) the annual rental value of each of the small buildings will come to Rs. 1, 32,000 and the owner will have to pay tax according to the highest slab for each building. Such an intention on the part of the legislature cannot be accepted, particularly in the absence of specific provision in the charging section. ", "In view of the discussions in the foregoing paragraphs the proviso to clause (b) of sub-section(2) of section 127-A of the Act being contrary to the charging section is struck-down as ultra vires. ", "The appeal is allowed and the judgment of under challenge is set aside. There will, however, be no order as to costs. ", "V.S.S. ", "Appeal allowed."], "relevant_candidates": ["0001065786", "0001349212", "0001362508"]} {"id": "0001727920", "text": ["PETITIONER: COMMISSIONER OF SALES TAX, LUCKNOW Vs. RESPONDENT: D. S. BIST & ORS. DATE OF JUDGMENT11/09/1979 BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. PATHAK, R.S. CITATION: 1980 AIR 169 1980 SCR (1) 593 1979 SCC (4) 741 CITATOR INFO : D 1988 SC1435 (38) ACT: U. P. Sales Tax Act, 1948-S. 2(i) proviso-Tea leaves after drying and processing-Whether remained agricultural produce not exigible to sales tax under the proviso. HEADNOTE: The proviso to s. 2(i) of the U.P. Sales Tax Act, 1948 excludes from the term \"turnover\" proceeds of sale of agricultural or horticultural produce grown by a person on any land in which he has interest. The assessee, who was an agriculturist, owned tea gardens in the State. After being plucked from tea shrubs tea leaves are withered in shade in rooms, crushed by hand or foot, roasted for 15 minutes, then covered by wet sheets for the purpose of generating fermentation, graded and finally roasted again with charcoal for obtaining flavour and colour. The final product is sold in the market. Before the assessee contended that tea leaves sold by him were agricultural produce grown by him on his own land and that, therefore, the sale of tea effected by him was exempt from sales tax under the proviso to s. 2(i) of the Act. rejected the assessee's contention. answered the reference in favour of the assessee and against the revenue. Dismissing the appeal, ^ HELD: (per ): was right in holding that sales of tea leaves were not exigible to sales tax. The commodity which was sold was not different from the commodity which was produced in agriculture and, therefore, the proviso to s. 2(i) is attracted. [600 F, 602 E] 1. Almost every kind of agricultural produce has to undergo some kind of processing or treatment by the agriculturist himself either on the farm or elsewhere in order to make it non-perishable, transportable and marketable. Some minimal process is necessary to be applied to many varieties of agricultural produce. The test in these cases is to see whether in relation to that agricultural produce the process applied was minimal or was so cumbersome and long drawn out that either in common parlance or in the market or even otherwise no one would treat the produce as an agricultural produce. The mere fact that in the case of a particular product the process is a bit longer or even a bit complicated would not rob the produce of its character of being an agricultural produce. [597 B-C; F-G] 2. All the processes enumerated by were necessary for the purpose of saving the tea leaves from perishing, making them fit for transporting and marketing. The processes applied were all within the region of minimal processes and at no point of time they crossed that limit and robbed the leaves of their character of being and continuing to be agricultural produce. [598 C-E] 594 Vol. 21 Encyclopaedia Britannica (1968 edition), referred to. 17 S.T.C., 316, The State of Madras v. 19 S.T.C., 129 referred to. 7 S.T.C., 541, . 12 S.T.C. 519, . 58 I.T.R., 612 20 S.T.C., 417, Commissioner of Sales Tax, U.P., v. and Sons, 21 S.T.C., 17 approved. A.I.R. 1921 Calcutta, 40 distinguished. (, J. concurring). A.I.R. 1921 Calcutta, 40 was of opinion that while process of selecting and plucking tea leaves from the tea shrubs could be deemed to be agriculture, the subsequent process which included drying and rolling of the leaf was a manufacturing process. If could be said to have laid down that as a result of those processes the tea leaf ceased to be agricultural produce, it is not correct. The tea leaf remained what it always was. It was tea leaf when selected and plucked and it continued to be tea leaf when after the process of withering, crushing and roasting, it was sold in the market. The process applied was intended to bring out its potential qualities of flavour and colour. The potential inhered in the tea leaf from the outset when still a leaf on the tea bush. The potential surfaced in the tea leaf when the mechanical processes of withering, crushing and roasting, fermenting by covering with wet sheets and roasting again were applied. At no stag, did it change its essential substance. It remained tea leaf throughout. In its basic nature it continued to be agricultural produce. [603 B-C] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2361- 2364 of 1972. ", "Appeals by special leave from the Judgment and Order dated 17-5-72 of in Sales Tax Ref. Nos. 693 to 696/70. ", ", and for the Appellant. (In all the appeals) and for the Respondent. The following Judgments were delivered: ", "UNTWALIA, J. The Commissioner of Sales Tax, Lucknow has filed these four appeals by special leave against the judgment of given in four sales-tax references under the U.P. Sales Tax Act, 1948, hereinafter referred to as the Act. ", "595 ", "The assessee-respondent owns some tea gardens in the State of U.P. The tea-leaves grown by the respondent in his gardens are sold in the market after being processed and packed. The stand taken on his behalf before the taxing authorities was that the tea-leaves sold by the respondent are agricultural produce grown by himself and, therefore, the sales were not exigible to sales-tax. The contention of the assessee was not accepted and made four references in respect of the four periods to on the following question of law:- ", "\"Whether on the facts and circumstances of this case the article ceased to be an agricultural produce and whether the tea produced by the assessee would be exigible to sales tax?\" ", " has answered the reference in favour of the assessee and against the revenue. Hence these appeals by the department. ", "Under section 3, the charging section, of the Act it was the turn-over for each assessment year determined in accordance with the various provisions of the Act and the Rules framed thereunder, which was chargeable to sales-tax. The definition of 'turnover' given in section 2(i) of the Act at the relevant time stood as follows:- ", "\" \"Turnover\" means the aggregate amount for which goods are supplied or distributed by way of sale(or are sold), or the aggregate amount for which goods are bought, whichever is greater by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration: ", "Provided that the proceeds of the sale by a person of agricultural or horticultural produce, grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, or poultry or dairy products from fowls or animals kept by him shall be excluded from his turnover.\" ", "The above proviso was meant to exempt an agriculturist or a horticulturist from the charge of sales-tax in respect of his agricultural or horticultural produce grown by himself in his land in which he has an interest of the kind mentioned in the proviso. The short question which falls for our determination, therefore, is whether the assessee's transactions of sale came within the ambit of the proviso. Indisputably and undoubtedly the assessee was an agriculturist, the tea-leaves grown by him in his land were agricultural produce, and he had sold them after processing and packing. In other words the assessee made them marketable and fit for consumption by the consumers and then sold them. If the tea- leaves so sold substantially retained the character of being an agricultural produce, it is plain that the assessee's sales will not be exigible to sales-tax. If, on the other hand, the leaves had undergone such vital changes by processing that they lost their character of being an agricultural produce and became a different commodity then the sales made by assessee were exigible to sales-tax. ", " has extracted the primary findings of fact recorded by in its revisional order. As is well-known tea-leaves are plucked from tea- plants as green tea-leaves. The tea-leaves so plucked are not fit for consumption and are not sold in the open market. They are often purchased by big tea concerns from the owners of the gardens and after processing and packing them they (the concerns) sell them in the market. Since in their cases the proviso will not apply the sales will be exigible to sales tax. But when the producer himself does the same or similar kind of job, then the question arises whether it can be justifiably said that he also cannot take advantage of the proviso? ", "The primary facts as extracted by from the order of are the following:- ", "(1) \"The tea-leaves were first of all subjected to withering in shadow in rooms on a wooden floor for about 14 hours.\" ", "(2) \"then they were crushed-by hand or foot and were then roasted for about 15 minutes.\" (3) \"Later they were roasted on mats for about 15 minutes.\" ", "(4) And then they were \"covered by wet sheets for generating fermentation. During this process the colour of leaves was changed from green to yellowish.\" ", "(5) \"the leaves were then subjected to grading with sieves of various sizes. Fanning machines are also used in completing the grading process.\" ", "(6) \"The produce was then finally roasted with charcoal for obtaining suitable flavour and colour.\" ", "597 ", "(7) \"It is this final product which was eventually sold by the assessees.\" ", "The question for consideration is whether on the findings aforesaid it can be justifiably held in law that the leaves lost their character of being an agricultural produce and became something different. It should be remembered that almost every kind of agricultural produce has to undergo some kind of processing or treatment by the agriculturist himself in his farm or elsewhere in order to bring them to a condition of non-perishability and to make them transportable and marketable. Some minimal process is necessary to be applied to many varieties of agricultural produce. As for example, when wheat stalks are cut from the farm, threshing and winnowing have to be done. The product so obtained has to be dried for a few days. The husk and dust have to be separated. Thereafter packing the wheat in bags or other containers it is taken to the markets for sale. One can never suggest that such a wheat product becomes a commodity different from the one which was produced in the process of agriculture. To pursue that example further, if the agriculturist who produces the wheat has a flour mill and crushes the wheat produced by him in that mill and then if the flour so produced is sold by him one can never reasonably suggest that the flour sold by him is an agricultural produce, because in that event, the manufacturing process goes beyond the limit of making the agricultural produce fit for marketing as such and turns it into a different commodity altogether i.e. flour. But there may be some other kinds of agricultural produce which required some more processing to make it marketable. In the case of such a commodity what one has to judge is to find out whether in relation to that agricultural produce the process applied was minimal or was it so cumbersome and long drawn that either in common parlance, or in the market, or even otherwise, any body would not treat the produce as an agricultural produce. The mere fact that in the case of a particular product the process is a bit longer or even a bit complicated will not rob the produce of its character of being an agricultural produce. Largely the inference to be drawn from the primary facts of processing, one may say, will be an inference of fact. But it is not wholly so. In a given case it will be a mixed question of fact and law. If wrong tests are applied in drawing the inference that the agricultural produce has lost its character of being so, then it will be a question of law and will have jurisdiction in an appropriate reference, as in the present case it had, to decide whether the case came under the proviso to section 2(i) of the Act. ", "598 ", "Unlike many agricultural products tea-leaves are not marketable in the market fresh from the tea gardens. No body eats tea-leaves. It is meant to be boiled for extracting juice out of it to make tea liquor. Tea-leaves are, therefore, only fit for marketing when by a minimal process they are made fit for human consumption. Of course, the processing may stop at a particular point in order to produce inferior quality of tea and a bit more may be necessary to be done in order to make it a bit superior. But that by itself will not substantially change the character of the tea-leaves, still they will be known as tea-leaves and sold as such in the market. In my opinion all the six processes enumerated above from the primary findings of fact recorded in the order of were necessary for the purpose of saving the tea-leaves from perishing, making them fit for transporting and marketing them. The process applied was minimal. Withering, crushing and roasting the tea-leaves will be surely necessary for preserving them. The process of fermentation or final roasting with charcoal for obtaining suitable flavour or colour and also the process of grading them with seives were all within the region of minimal process and at no point of time it crossed that limit and robbed the tea-leaves, the agricultural produce, of their character of being and continuing as such substantially. In my opinion, therefore, the view expressed by is quite justified and sustainable in law. ", "In Volume 21 of Encyclopaedia Britannica (1968 edition) under the head 'Tea' are dealt with at page 739 the processes of cultivation and manufacture of tea. Under the sub-head 'Cultivation' it is found stated:- ", "\"Tea leaves are plucked either by hand or with special shears. In the tropical areas of southern India, Ceylon, and Indonesia, harvest continues throughout the year, but in the subtropical regions of northern India and China and in Japan and Formosa, the harvests are seasonal. The flavour and quality of the tea-leaves vary with the climate, soil, age of the leaf, time of harvest (even from season to season), and method of preparation.\" ", "Then comes the sub-head 'Manufacture' which enumerates the categories of three classes of teas and then it is mentioned:- ", "\"Most stages of processing are generally common to the three types, of tea. First, the fresh leaves, are withered by exposure to the sun or by heating in trays until pliable (usually 18-24 hours). Next the leaves are rolled by hand or machine in order to break the leaf cells and liberate the juices and enzymes. This rolling process may last up to three hours. Finally, the leaves are completely dried either by further exposure to the sun, over fires, or in a current of hot air, usually for 30- 40 minutes.\" ", "In making black tea, the leaves, after being rolled, are fermented in baskets or on glass shelves or cement floors under damp cloths. \"The process of fermentation, or oxidation, reduces the astringency of the leaf and changes its colour and flavour.\" About green-leaves it is mentioned- \"Green tea is made by steaming without fermentation in a perforated cylinder or boiler, thus retaining some of the green colour. The leaves are lightly rolled before drying.\" It would thus be seen that the tea-leaves as plucked have got to pass through stages of processing of one kind or the other in order to make them fit for human consumption, as in the case of paddy and many other commodities dehusking in the case of former and some other kind of process in regard to the latter has got to be done in order to make them marketable and fit for consumption. ", "There are two decisions of in (1) and (2) where a similar question arose with respect to arecanuts. At page 544 of the first case which was followed in the second occurs a passage which may be usefully quoted here:- ", "\"As we have pointed out, it was common ground that there is no market in Coimbatore or elsewhere for arecanuts as they are when plucked from the trees, and it should be remembered they are gathered when they are still unripe. The proviso to section 2(i) of the Act is obviously conceived in the interests of agriculturists. It excludes from any tax liability under the Act sale of agricultural and horticultural produce, the primary condition to be satisfied being that it must be produce of the land which either belongs to the seller or of the land in which he has an interest as specified by section 2(i). To restrict that concession to sale of arecanuts, for instance, only if those arecanuts are sold in the state in which they are immediately on being gathered from the trees, would render the statutory exclusion meaningless.\" ", "I approve of this decision. ", "600 ", "There are two decisions of given in relation to the question of sugarcane being converted into jaggery. They are:- (1) and .(2) In the former case it was observed at page 11:- ", "\"It is true that gur cannot be regarded as an agricultural produce grown on land. But if gur is prepared out of the agricultural produce which is grown on land, in the absence of any indication to the contrary suggesting that the agricultural produce must be sold in the form in which it is grown, we will be justified in holding that an agriculturist who is exclusively selling agricultural produce grown on the land either in the form in which it is grown or in the form in which it is converted for the purpose of transportation or preventing deterioration is within the exception provided by section 2(6). In the present case, with a view to prevent deterioration and for the purpose of facilitating transportation the assessee converted the sugar-cane grown by him into gur and sold it.\" ", "It appears to me that this case has gone a bit too far and on an appropriate occasion it may require further consideration. Nonetheless, in the instant case one can safely conclude, as I have done, that with a view to prevent deterioration and for the purpose of facilitating transport and making it marketable the assessee himself did some processing to the plucked tea-leaves and hence was right in holding that such sales were not exigible to sales-tax. Similar or identical principles have been applied by other High Courts also in respect of different commodities such as rubber, sole crepe, casuarina, pig bristles etc. The cases are- (3). .;(4) .;(5) Rayavarapu Mrityanjaya Rao v. ", "601 ", "The State of Andhra Pradesh(1) and Commissioner of Sales Tax, U.P., Lucknow v. and Sons. (2) Broadly speaking these cases have been decided on application of the correct principles of law. ", "Reliance on behalf of the was placed upon a few cases. None of them supports the department's contention. I may notice only two or three of them. (3) the question for consideration related to the tax liability of under the Income Tax Act , 1918. If the whole of its income was derived from agriculture, the assessee was not liable to pay income-tax. If, however, the activities of the , which produced income were attributable partly to agriculture and partly to its manufacturing activities, then the whole of the amount could not have been taxed under the Income-Tax Act . The stand of the was-\"the actual leaf of the tea plant, without the addition thereto of the processes above described, is of no value as a market commodity.\" On behalf of the it was contended \"that the manufacturing processes carried out in a modern tea factory, with scientific appliances and up- to-date machinery, are different from those ordinarily employed by a cultivator to render the produce raised by him fit to be taken to market.\" held-\"that the process in its entirety cannot be appropriately described as agriculture. The earlier part of the operation when the tea bush is planted and the young green leaf is selected and plucked may well be deemed to be agriculture. But the latter part of the process is really manufacture of tea, and cannot, without violence to language, be described as agriculture. ", "The green leaf is not marketable commodity for immediate use as an article of food, but it is a marketable commodity to be manufactured by people who possess the requisite machinery into tea fit for human consumption.\" After referring to some authoritative books on Tea, the view expressed by was \"that the entire process is a combination of agriculture and manufacture.\" Hence only a part of the income was held to be taxable. In the instant case the problem is quite distinct and different. Here we are concerned with the question whether the commodity which the assessee sold as tea was his agricultural produce or not. He had not sold his tea-leaves from his gardens to any manufacturing tea company. He had himself applied some indigenous and crude manufacturing process in order to enable him to sell his tea in the market. In such a situation I have no difficulty in holding that the sale was of his agricultural produce. ", " (1) the question before this Court was whether the respondent- firm which purchased raw tobacco and converted it by a manufacturing process into chewing tobacco and sold it in small paper packets was entitled to deduction of excise duty paid by it on the raw tobacco from the gross turnover of sales of chewing tobacco under rule 5(1)(i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. It would be found mentioned at page 318:-\"Both the advocates argued, on the basis of the factual position, that the packets of chewing tobacco were goods different from tobacco from which the said goods were manufactured.\" On that footing, by interpretation of the rule it was held that only excise duty paid on the goods sold by the assessee is deductible from the gross turnover, and not the excise duty paid on raw tobacco. This case was followed by in The State of Madras v. ) In the instant case I have held that the commodity which was sold was not different from the commodity which was produced in agriculture. ", "The view expressed by in the judgment under appeal which is reported in .(3) is on the lines of the preponderance of views expressed by different in relation to different commodities. I approve of the case and dismiss these appeals with costs- hearing fee-one set only. ", "PATHAK, J. I agree that the appeals should be dismissed. ", "But I should like to say a few words in regard to .(4) That was a case where had a tea plantation and after selecting and plucking the young green leaf from the tea bush by hand it was put through a process of drying and rolling. alleged that the process actually applied to the dry leaf was a manufacturing process carried out in a modern tea factory with scientific appliances and the latest machinery. , on a consideration of the respective cases of the parties, observed that the entire process could not be described as agriculture, and that the process applied to the tea leaf after it had been plucked was a manufacturing process. It observed that the green tea leaf was a marketable commodity to be manufactured by people who possessed the requisite machinery into tea fit for human consumption. It was of the opinion that while the process of selecting and plucking the tea leaf from the tea shrubs could be deemed to be agriculture, the subsequent process which included drying and rolling of the leaf was a manufacturing process. drew a distinction between the two processes for the purpose of apportioning the income between agricultural income and non agricultural income. The question before us is whether after the tea leaf had been put through the process of withering, crushing, roasting and fermentation it continued to be agricultural produce. If can be said to have laid down that as a result of those processes the tea leaf ceased to be agricultural produce, I am unable to agree with it. To my mind, the tea leaf remained what it always was. It was tea leaf when selected and plucked. and it continued to be tea leaf when after the process of withering, crushing and roasting it was sold in the market. The process applied was intended to bring out its potential qualities of flavour and colour. The potential inhered in the tea leaf from the outset when still a leaf on the tea bush. The potential surfaced in the tea leaf when the mechanical processes of withering, crushing and roasting, fermenting by covering with wet sheets and roasting again were applied. The tea leaf was made fit for human consumption by subjecting it to those processes. At no stage. did it change its essential substance. It remained a tea leaf throughout. In its basic nature, it continued to be agricultural produce. ", "The appeals fail and are dismissed with costs. Costs are awarded as one set only. ", "P.B.R. Appeals dismissed."], "relevant_candidates": ["0000014934", "0001243994", "0001423213", "0001532536", "0001609169", "0001644821", "0001646263", "0001664924", "0001789616", "0001803911", "0001882636"]} {"id": "0001731250", "text": ["JUDGMENT , J. ", "(1) The plaintiff () has filed the present suit for the grant of permanent injunction restraining the defendant, its servants, agents, representatives, dealers and workmen from infringing its registered copyright to \"OK Washing Soap Wrapper\" belonging to it. The plaintiff also seeks a permanent injunction restraining the above-said persons from manufacturing selling, offering for sale to dealers washing soap under 521 wrapper which is a colourful imitation of its wrapper and from giving an impression that the defendant's washing soap was that of the plaintiff or was connected with the plaintiff in any manner what soever amounting to passing off. An order for destruction of the impugned wrappers, labels, blocks, dyes and other trade literature concerning the adoption and use of the impugned wrapper mark is also sought. The plaintiff also prays for rendition of the defendant's accounts of sales of washing soap under the wrapper objected to by it and further prays that a decree for the amounts so determined be passed in its favor and against the defendant with costs. ", "(2) The case of the plaintiff is that it carries on an old established business for decades past engaged in the manufacture and sale, inter alia, of washing soaps, detergents, toilet soaps and toilet preparations including hair oils, shampee and eau de Cologne. The plaintiff alleges that one amongst its well-known products is \"OK Brand Washing 'soap\" wrapper of which consists of a distinctive colour scheme wherein the legends and description are given in red and blue colour against white background. The upper portion of the wrapper shows A Tata Product, in white colour, arranged in a blue coloured diamond device, appearing on either side with the expression Ok arranged in a shield device in red colour, appearing in the centre of the two blue diamond devices. The panels consists of two blue coloured diamond devices containing the expression Ok appearing in vernacular language. According to the plaintiff its Ok washing soap wrappers are in regular and continuous since the year 1976 in relation to its washing soap. The plaintiff claims to have built up large and important sale for its washing soap exceeding Rs. 300 lakhs. ", "(3) The plaintiff aware that it holds protection for its wrapper through Registration No. A-1 8305/77 granted to it under the Indian Copyright Act , 1957, besides registration Nos. 13573/77 and A-l 8595/77. The grievance of the plaintiff is that the defendant (, Hathroi Fort, Jaipur) has recently introduced in the market washing soap under a wrapper in respect of their washing soap whose adoption and the use of the lay-out, colour combination and artistic representation exactly resembles that of the plaintiff and that such a user by the defendant is with the deliberate intention to deceive and cause confusion to earn profits in illegal manner knowing fully well that the plaintiff's washing soap marketed under Ok wrapper has acquired a high reputation because of the excellant quality and marketting potentialities offered by the plaintiff and that their (defendant's) quality of product is inferior. The plaintiff contends that apart from infringing its Ok washing soap wrapper, the defendant is passing off and further liable to pass off their washing soap as that of the plaintiff and to cause confusion and deception by giving an impression that the washing soap so packed under the impugned wrapper is that of the plaintiff or, in any manner connected with the plaintiff and its business. ", "(4) The plaintiff in. respect of its prayer for the grant of (i) permanent injunction restraining infringement of copyright, (ii) permanent injunction restraining passing off (iii) an order for destruction of the labels, wrapper, dyes, blocks etc. and (iv) for rendition of accounts has valued each of the said reliefs for the purposes of court-fee at Rs. 200 each and has paid separately court-fee of Rs. 20 on each of the reliefs sought. For the purposes of jurisdiction plaintiff for the first three reliefs has fixed the same value as was fixed by it for the purposes of court-fees but in respect of its prayer for rendition of account, the plaintiff has fixed the value at rupees one lakh being the estimated valued of its loss due to the defendant's sale of the washing soap under the impugned wrapper. ", "(5) Along with the suit the plaintiff has filed the present application under Order 39 Rules I and 2 read with section 151 of the Code of Civil Procedure re-iterating its averments made in the plaint has prayed that during the pendency of the suit, the defendant, its servants' agents, dealers, representatives and workmen be restrained from manufacturing, selling and/or offering for sale, directly or indirectly dealing in washing soap under 521 wrapper which is a colourable imitation of the plaintiff's wrapper, 'and from giving an impression that the defendant's washing soap is that of the plaintiff or is connected with the plaintiff in any manner whatsover, amounting to passing off, and from infringing the registered copyright pertaining to Ok washing soap wrapper belonging to the plaintiff. ", "(6) The defendant in its written statement controverting the allegations of the plaintiff resists the suit, among other, on the grounds that this Court has no jurisdiction to try the suit, that the suit Is not properly valued for the purposes of court-fee and jurisdiction in that the value for the purpose of jurisdiction under section 8 of the Suits Valuation Act, 1887, has to be the same as the value adopted by the plaintiff for the purposes of court fee ; that the wrapper of the plaintiff is not distinctive as alleged or that the colour scheme adopted by the plaintiff is distinctive and/or that the plaintiff has any right thereof independently of the rest of the wrapper, and that the alleged offending wrapper is neither identical nor deceptively similar to that of plaintiff. The defendant deny that their wrapper has caused any confusion and/ or deception and/or that the plaintiff has been or is likely to be put to any loss whether in business or reputation as alleged. ", "(7) The defendant alleges that it is a partnership firm registered under the Indian Partnership Act , 1932, and that it had been in the business of manufacture and sale of soaps since 1931. It is alleged from 1931 to 1976 they were adopting the manual process of soap manufacture but from the year 1976 onward they had introduced automation in the manufacture of their soaps by installation of machines and that the wrappers used by them were first introduced by them in. January, 1977, which were subsequently changed in April, 1977. The defendants deny that they had represented in then- wrappers the layout and/or colour combination and/or artistic representation of the plaintiff's wrapper or that the defendant's wrapper had been deliberately made and/or caused to be made to appear as that of the plaintiff and/or that the defendant was motivated by any intention to deceive and/or cause confusion and/or to earn profits in an illegal manner. The defendant further deny that they are passing off and/or likely to pass off their washing soap as being that of the plaintiff or that their washing soap packed in the allegedly offending wrappers has caused or is likely to cause confusion and/or deception as being that of the plaintiff and/or as being in any manner connected with the plaintiff and/or its business. ", "(8) The defendant's stand in their reply to the interim application is practically the same as the one taken in the written statement. The same, therefore, is not required to be noted. ", "(9) It may bear mention here that subsequently to their filing the written statement and reply to the interim application, the defendant's impugned wrapper had been registered under the Copyright Act , 1957, by the Copyright office as No. A 20449/78. The defendant accordingly by I.A. No. 2861 of 1978 submit that in the interest of Justice they may be allowed to refer to and rely on the registration of the wrapper in their name. ", "(10) It would be appropriate to first deal with the preliminary objections urged against the maintainability of the suit in this Court. ", "(11) The jurisdiction of this Court was sought to be ousted on the ground that the Suit arises under Chapter Xii of the Copyright Act, 1957, and that the original jurisdiction in respect of such suits or other civil proceedings arising under the said Chapter is that of under section 62 of the said Act. Section 62 of the Copyright Act, 1957, reads as under : ", "\"62(1) Every suit or other civil proceeding arising under this chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this act shall be instituted in having jurisdiction. ", "(2)For the purpose of sub-section (1), a \"district court having jurisdiction shall notwithstanding anything contained in the Code of Civil Procedure, 1908, or any other law for the time being in, force, include within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such person, any of them actually and voluntarily resides or carries on, business or personally works for gain\". ", "(12) The learned counsel for the defendants submitted that a plain reading of the above-noted section makes it clear that every suit or other civil proceeding arising under Chapter Xii in respect of the infringement of copyright in any work or the infringement of any other right conferred by the Copyright Act , 1957, shall be instituted in having jurisdiction. I do not agree. The Copyright Act does not define the expression ''. The question, therefore, is what is meant by the said expression. Sub-section (4) of section 2 of the Code of Civil Procedure defines the term District. According to the said definition 'district' means the local limits of the jurisdiction of a principal civil court of original jurisdiction (herein- after called a \"\"), and includes the local limits of the ordinary original civil jurisdiction of . It is thus evident that by the term \"\" what is enivsaged is the principal civil court of original jurisdiction in a district. There can be no dispute that the expression \"\" by virtue of section 62(1) of the Copyright Act, has the meaning assigned to the expression in the Code of Civil Procedure, 1908. Now under sub-section (2) of section 5 of the Delhi High Court Act, 1966, notwithstanding anything contained in any law for the time being in force, in respect of the Union Territory of Delhi has the ordinary original civil jurisdiction in every suit the value of which exceeds fifty thousand rupees, as amended by section 3 of the Delhi High Court (Amendment) Act, 1969. It would, therefore, be seen that after the coming into force of Delhi High Court Act , 1966, as amended, has become the principal civil Court of original jurisdiction with respect to every suit the value of which exceeds fifty thousand rupees. [See also . (1971) I Delhi 615(1)]. ", "(13) Reference here may also be made to . In. that case the plaintiff challenged the infringement of its trade mark. Under section 2(e) of the Trade and Merchandise Marks Act , 1958, the expression \"\" has the meaning assigned to it in the Code of Civil Procedure, 1908. On May 5, 1964, when the suit was filed , within the territorial limits of which the cause of action was alleged to have arisen was closed for summer vacation and no Judge competent to exercise the powers of was functioning in on duty on that day. At the request of the plaintiff entertained the plaint and also an application for interim injunction. granted the interim injunction in terms of prayer in the application. In appeal before the defendants contended that had no jurisdiction to entertain the action instituted by the plaintiffs and had no powers to make an order issuing a temporary injunction as the action as framed could properly be instituted in . Rejecting the contention, it was observed that the expression \"\" has by virtue of section 2(e) of the Trade Mark and Merchandise Act , 1958, the meaning assigned to that expression, in the Code of Civil Procedure, 1908. Section 2(4) of the Code defines a \"District\" as meaning the local limits of the jurisdiction of a principal civil court called and includes the local limits of the ordinary original civil jurisdiction of . Their Lordships accordingly held, if was possessed of ordinary original civil jurisdiction. It would, when exercising that jurisdiction be included for the purposes of the Trade and Merchandise Marks Act , 1958, in the expression \"\". It was accordingly held that was competent to exercise original jurisdiction under section 105 of the Trade and Merchandise Marks Act , 1958, if invested with the ordinary original civil jurisdiction of a . ", "(14) having ordinary original civil jurisdiction in respect of the Union territory of Delhi in every suit the value of which exceeds fifty thousand rupees is competent to entertain and try the present suit. ", "(15) It was then contended that assuming that the suit is maintainable in this , facts necessary to give territorial jurisdiction to the are non-existent in the present suit. The contention was that the defendant neither resides nor works for gain nor carries on business in Delhi and that no part of the alleged cause of action had arisen or was alleged to have arisen within the territorial jurisdiction of this . There is no merit in this submission. The plaintiff has invoked the territorial jurisdiction of this on the allegation that it is marketing its washing soap under Ok wrapper through its office at 28, Asaf Ali Road, New Delhi, where it carries on its business and works for gain, besides averring that the washing soap under the infringing wrapper is available at Delhi and elsewhere, and so even under Common Law, this has jurisdiction to entertain the suit. Sub-section (2) of section 62 of the Copyright Act, 1957, noted above, carves out an exception to the provision of section 20 of the Code of Civil Procedure and enables a plaintiff seeking remedy for infringement of Copyright to file the suit in the within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on. business or personally works for gain. There being no traverse to the plaintiff's averment that it is marketing its washing soap under the Ok wrapper through its office at 28, Asaf Ali Road, New Delhi, where it carries on its business and works for gain, it has to be held that this has jurisdiction to entertain and try the suit. The bare denial of the defendant that no part of the alleged cause of action arose or is alleged to have arisen within the territorial jurisdiction of this is of no consequence. ", "(16) The learned counsel for the defendant then submitted that there being no allegation that the defendants are selling or causing to be sold the infringing product in Delhi, the suit for the redress of the plaintiff's grievance regarding passing off was not friable by this , more so when the defendants have categorically contended that their sales are effected mainly in the State of Rajasthan and to a very limited extent at Amritsar and Nepal. It may bear mention here that the plaintiff in paragraph 13 of the plaint had contended that the washing soap under the infringing wrapper is available at Delhi. The rival contentions of the parties at best may be said to necessitate an enquiry being made in the matter by the framing of an issue but on a prima facie view of the matter it cannot be said for the present that this has no jurisdiction to entertain and try the suit in respect of the allegation regarding \"passing off\". ", "(17) It was then contended though not specifically pleaded, that a suit for account must be founded on an obligation to render an account. The Plaintiff having not averred such an obligation, the suit for an account was not competent. Support for this argument was sought to be drawn, from v. , 1961 Klt 360(3) wherein it was observed that the mere fact that the plaintiff asks an account or brings his suit on account or that accounts have to be gone into in order to determine the account, if any. due to the plaintiff, will not make the suit for an account, and that every bill for an account must be founded upon an obligation to render an account. ", "(18) The observations in the above noted case were made in a wholly different context. The was not dealing with a case for infringement of the copyright. The argument sought to be urged has to be repelled in view of the provisions of section 55 of the Copyright Act which prescribes civil remedies that are available to the owner of the copyright for infringement of this copyright. Among other remedies that are available to the owner of the copyright is the remedy to sue for accounts. It being a statutory remedy available under law it is futile to contend that the defendant in such a suit must stand in some such \"relation to the plaintiff as that of agent, or belie or receiver or trustee or partner or mortgagee.\" ", "(19) The next submission of the learned counsel for the defendant was that the suit had not been properly valued for the purposes of jurisdiction. It was contended that the plaintiff having valued the relief for the purpose of court-fees in respect of this prayer, viz., restraining infringement of copyright, for permanent injunction restraining passing off, for an order for destruction of labels, wrappers, dyes, blocks etc. and for rendition of account at Rs. 200 each in accordance with the provision of section 7(iv) of the -fees Act, 1870, the same valuation has to be taken to be the value for the purposes of jurisdiction under section 8 of (The) Suits Valuation Act, 1887, in that the value as determinable for computation of -fees and the value for purposes of jurisdiction shall be the same. There can be no dispute to this proposition of law. Indeed their Lordships in , , have held that there can be little doubt that the defect of the provisions of section 8 of (The) Suits Valuation Act is to make the value for the purposes of jurisdiction dependent upon the value as determinable for computation of -fees. The result is that it is the moment at which the plaintiff has valued the relief sought for the purposes of court-fees that determines the value for jurisdiction in the suit and not vice versa. ", "(20) The learned counsel for plaintiff, however, contended that at Lahore had framed rules under section 9 of the Suits Valuation Act, 1957, with regard to the manner and determination of the value of certain types of suits for the twin purposes of court-fees and jurisdiction and that the said rules are applicable in by virtue of section 7 of the Delhi High Court Act, 1966, and that the valuation' placed by the plaintiff with regard to the jurisdiction was in consonance with the said rules. That being so, the suit, it was urged, is friable by this Court. The learned counsel for the defendants contest the correctness of this assertion. The question' accordingly is whether the rules framed by at Lahore were applicable in or not. ", "(21) In order to determine the respective contention of the parties, it would be appropriate to note the relevant provisions of the Suits Valuation Act and the rules made there under by at Lahore. ", "SECTION 9 of the Suits Valuation Act , 1887, reads as under : \"DETERMINATIONof value of certain suits by High Court Where the subject matter of suits of any class, other than suits mentioned in Court-Fees Act , section 7 , paragraph (v) and (vi), and paragraph, (x), clause (d) is such that in the opinion of it does not admit of being satisfactorily valued may, with the previous sanction of direct that the suits of that class shall, for the purposes of the Court- fees Act, 1870, and of this Act and any other enactment for the time being in force, be treated as if their subject- matter were of such value as thinks fit to specify in this behalf\". ", "(22) at Lahore in 1942 with the previous sanction of the State Government under the powers conferred by section 9 of the Suits Valuation Act of 1887 and all other powers in that behalf made rules regarding the manner of determining the value of suits for purposes of jurisdiction specified in section 9 of Suits Valuation Act, 1887. Rules 3 and 4 of the said, .Rules are relevant for our purposes. ", "RULE3 reads as under : ", "\"SUITSin which the plaintiff in the plaint asks for accounts only not being : ", "(I)suits to recover the amount which-may be found due to the plaintiff on taking unsettled accountes between him and the defendant (II)suits of either of the kinds described in order Xx, Rule 13 of Code of Civil Procedure' VALUE: (a) For the purposes of the Court-fees Act , 1870. . .Rs. 200.00 (B)For the purposes of the Suits Valuation Act , 1887, and the Punjab Courts Act, 1918. ...............Rs. l,000/\". ", "WHILERule 4 reads as under : ", "\"4(I)Suits in which the plaintiff in the plaint seeks to recover the amount which may be found to the plaintiff on taking unsettled accounts between him and defendant ; ", "(II)Suits of either of the kinds described in, Order Xx, rule 13 of the Code of Civil Procedure . ", "VALUEfor the purposes of court-fee.........as determined by the Court-fees Act , 1870. ", "VALUEfor the purposes of jurisdiction for the purpose of the Suits Valuation Act , 1887, and the Punjab Courts Act, 1918, as valued by the plaintiff in the plaint subject to determination by the Court at any stage of the trial\" ", "(23) The learned counsel for the plaintiff submitted that the rules framed by at Lahore and since followed in the said , the East Punjab , the Punjab and the Courts in Delhi even after the constitution of the Delhi pertain to the practice and procedure followed by the said Courts with regard to the manner and determination of the value of certain types of suits for the purposes of court-fees and jurisdiction and that the said practice and procedure, with the necessary modifications apply in relation to the of Delhi by virtue of section 7 of the Delhi Act 1966. The learned counsel accordingly submitted that the said rules are applicable to all suits friable by this . ", "(24) By virtue of sub-section (2) of section 5 of the Delhi High Court Act, 1966, notwithstanding anything contained in any law for the time being in force, has in respect of the Union Territory of Delhi ordinary original civil jurisdiction in money suit the value of which exceeds twenty five thousand rupees, since raised to fifty thousand rupees by section 3 of the Delhi High Court (Amendment) Act, 1969 (Act No. 37 of 1969). ", "(25) Section 7 of the Delhi High Court Act, 1966, deals with the practice and procedure to be followed in, . The said section reads as under : \"SUBJECTto the provisions of this Act, the law in force immediately before the appointed day with respect to practice and procedure in shall, with the necessary modifications, apply in relation to and accordingly shall have all such powers to make rules and orders with respect to practice and procedure as are immediately before the appointed day exercisable by and shall also have powers to make rules and orders with respect to practice and procedure for the exercise of its ordinary original civil jurisdiction\", (26) The question accordingly is whether the rules made by are rules pertaining to practice and procedure with regard to the manner and determination of the value of certain types of suits for the purposes of court-fees and jurisdiction as was sought to be contended by the learned counsel for the plaintiff. ", "(27) The learned counsel for the defendant contended that a matter of practice and procedure generally speaking arises in the course of am action and that practice in its larger sense denotes the mode of proceeding by which a legal right is enforced as distinguishable from the law which gives the right. He accordingly submitted that \"practice.\" in the common and ordinary sense of the word denotes the rules that guide the cursus curise and regulates the proceedings in a cause within the walls of the itself while \"procedure\" including the whole course of practice, from the issuing of the first process by which the suitors are brought before the to the execution of the last process on the final judgment. In other words, the learned counsel submitted, procedure concerning all steps necessary to be taken in litigation for the establishment of a right in order that the right may be judicially recognised and declared in such manner as will enable the party asserting the right legally to enjoy it. In the practice, the learned counsel urged that before a party approaches the , the party must ensure the provision of law under which it invokes the pecuniary and territorial jurisdiction of the which cannot be a matter of practice and procedure but embodied in statute. ", "(28) Now, what is the meaning of the words practice and procedure ? in his book on jurisprudence, 3rd Edition at page 535 slates that procedure is the body of rules that govern the process of litigation while practice regulates the proceedings in a case within the four walls and limits of the itself. ", "(29) In \"Words and Phrases\" Volume 33 published by West Publishing Company at page 188 \"practice and procedure\" are said to relate to the legal rules directing the manner of bringing parties into the , and the method of the after they are brought in, in hearing, dealing with, and disposing of, matters in dispute between them. ", "(30) JOWITT'S Dictionary of English Law, Second Edition (page 1400) describes practice as the form and manner of conducting and carrying on suits, actions, or prosecutions at law or in equity, civil or criminal, through their various stages from the commencement to final judgment and execution, according to principles and rules laid down, by the several courts. It is further stated at page 1438 that procedure is the mode in which the successive steps in litigation, are taken. ", "(31) It is, therefore, evident that practice and procedure relate to the body of rules prescribing the method for seeking the remedy and not the enforcement of a right. The object of the Suits Valuation Act is to prescribe the method of valuing certain suits for the purposes of detremining the jurisdiction of with respect thereto. Section 9 of the Suits Valuation Act deals with that class of suits which do not admit of being satisfactorily valued. The said section provides that in such suits may provide for the valuation of those suits. The rules framed under section 9 of the Suits Valuation Act by of Judicature at Lahore provide a mode for valuing the suits for the purposes of jurisdiction in suits which do not admit of being satisfactorily valued. The said rules provide a mode by which a plaintiff is to proceed for the enforcement of his legal rights. if practice and procedure relate to the body of rules directing the manner of bringing the parties into , it is not understood as to why the rules in question, cannot be said to provide a mode for bringing the parties into . ", "(32) 1922 Madras, 421(5), it was observed that the power , under which fees were levied the original side of was derived from the general powers to issue general rules for regulating the practice and procedure of the . ", "(33) If that be so, the rules in question cannot be said to be other than the one for regulating the practice and procedure of the . ", "(34) Reference here may be made to v. Minors (1881) 7 Q.B.D. 329(6). Therein Lush L.J. observed that practice in its larger sense denotes the mode of proceeding by which a legal right is enforced, as distinguished from the law which gives or defines the right, and which by means of the proceeding's the is to administer. ", "(35) It may bear mention here that 's case (supra) was considered in A.G. v. (1864)10 H.L.C. 704(7) but therein observed that \"practice\" means the same thing as procedure and denotes \"rules that make or guide cursus curise and regulate the proceedings in a case within the walls or limits of the itself\". ", "(36) Sillem (supra) was noticed in . 370 (8). The question under consideration, in case was whether the provision's of Order 6 Rule 17 of the Civil Procedure Code were applicable to proceedings before . Their Lordships approving the observations of that practice and procedure denotes \"rules that make or guide the 'cursus curise' and regulate the proceedings in a case within the walls or limits of the itself\" observed that these proceedings include' all steps, which might be taken in the prosecution or defense thereof, including an application for amendment. ", "(37) But it has to be borne in mind that the observations of their Lordships were made in, a wholly different context regarding the applicability of the provisions of Order 6 Rule 17 of the Code of Civil Procedure to a proceeding before . ", "(38) The learned counsel for the defendants, however, strenuously contended that the procedure must be in, relation to the proceedings in after it had taken seisin of the matter and that such an implication was inherent in the term procedure. Support for this argument was sought from , . Their Lordships in the above case were interpreting the term procedure appearing in section 96(l)(b) of the Employees' Estate ln,surance Act, 1948. It was in that context that it was observed that apart from the implication inherent in the term procedure appearing in section 96(l)(b) , the power to prescribe by rules any matter falling within the ambit of the term must be the \"procedure to be followed in proceedings before such \". It was further observed that the word \"in\" emphasised by them, furnished a clue to the controversy that procedure must be in relation to proceeding's in, after if had taken seisin of the matter. It would, therefore, be seen that their Lordships' observations were made only in the context of section, 96(l)(b) of the Employees' State Insurance Act , 1948. ", "(39) It may be noted here that a Full Bench of this Court in (1974) Ii Delhi 491(10) had an occasion to consider this question. The Full Ben,ch noticed the controversy between the parties regarding these rules but left the question' open to be canvassed before the lear- ned Single Judge observing that it was not determinative of the question referred to the Full Bench. However, at page 500 the Full Bench had observed that prima facie the rules are applicable to Delhi. The Full Bench further observed that if there' are rules made by under section 9 of the Suits Valuation' Act, 1887, and the same are applicable, the valuation for the purposes of court-fees under section 7(iv) of the Court-fees Act will have to be according to such rules. It was also observed that so far as the rules made by are concerned, it has to be noted that Rules 3 and 4 contemplate separate valuation for the E purpose's of court-fees an,d for the purposes of jurisdiction. It was further observed that if the said rules are applicable, the valuation for the purposes of court-fees would be separate from the valuation for the purposes of jurisdiction as provided in the said rules. ", "(40) From the observations of it is clear that Rules on a prima facie consideration were held to be applicable to Delhi. ", "(41) The learned Single Judge on the matter being remitted to him observed that these rules were made in the year 1942 by the o at Lahore under section 9 of the Suits Valuation Act, 1887, and have since been followed in the said and in, the successor s, the East Punjab , the Punjab and in Courts in Delhi even after the constitution of the Delhi . ( (1976) Ii Delhi 745(11). ", "(42) The learned counsel for the defendants strenuously con- tended that the learned Single Judge was doubtful about the appli- cability of these rules to . In support of his i submission he drew my attention to the subsequent observation of the learned Single Judge in, his judgment. ", "(43) It is no doubt true that the learned Judge in' a subsequent part of his judgment has observed that in relation to the reliefs of accounts, injunction, and recovery of money court fee has to be paid and valorem under the appropriate sub-clauses of clause (iv) of section 7 of the court-fees Act and that neither of the two suit under consideration could be said to belong to the category of suits which were exempt from the operation of section, 8 and that the value of the suits for purposes of jurisdiction in relation to these reliefs has to be the same as has been determined for the purposes of court- fees, unless there was anything in the Rules of the Lahore High Court, if applicable, which provide to the contrary. The words \"if applicable\" used by the learned Single Judge do not lend support to the argument of the learned counsel for the defendants that the learned Single Judge was doubtful about the applicability of the rules made by at Lahore to . ", "(44) in v. State of Haryana and others 1977 2nd (Delhi) 181(12) has held that the rules framed un,der section 9 of the Suits Valuation Act by at Lahore are applicable to suits filed in this Court because of section 7 of the Delhi High Court Act. I am in respectful agreement with the view of my learned brother. ", "(45) Besides the Division Bench judgment of this Court in , is an authority in support of the proposition that all the rules and orders of which were applicable in the Union Territory of Delhi on the coming into existence of continue to operate by virtue of section 7 of Act. Even on the assumption that rules made by at Lahore under section 9 of the Suits Valuation Act, 1887, are substantive law, the same remain operative in the Union Territory of Delhi as held by the Division Bench in the above-said case. ", "(46) It may be noted here that the rules as framed by at Lahore in respect of the manner of determining the value of suits for purposes specified in section 9 of the Suits Valuation Act, 1887. have been' embodied in Chapter III-C of the Rules and Orders (Volume 1) of and that the said Rules and Orders are applicable in the Union Territory of Delhi. That being so, the grievance sought to be made by the defendants is misconceived and untenable. ", "(47) It was then contended that clause 27 of the Letters Patent of the of Judicature at Lahore empowered the said to frame rules for practice and procedure and that the of East Punjab inherited this power for framing rules under clause 7 of the s (Punjab) Order, 1947. The submission was that by virtue of the said clause subject to the provisions of the said Order the law in force immediately before the' appointed day with respect to practice and procedure in the at Lahore shall, with the necessary modifications', apply in relations to the of East Punjab, and accordingly that shall have all such powers to make rules and orders with respect to practice and procedure as were immediately before the appointed day exercisable by the at Lahore with a proviso that any rules or orders which were in force immediately before the appointed day with respect to practice and procedure in the at Lahore shall, untill varied or revoked by rules or orders made by the of East Punjab apply with any necessary modifications in relation to practice and procedure in the of East Punjab as if made by that Court. ", "(48) It was accordingly contended that only such rules as had been framed in the exercise of the power under clause 27 of the Letters Patent by at Lahore and preserved under clause 7 of the High Courts (Punjab) Order, 1947, have been made applicable to under section 7 of Act. The rules in question, it was submitted, were framed under section 9 of the Suits Valuation Act and, therefore, are not attracted by section 7 of Act. I do not agree. On a proper construction of section 7 of Delhi High Court Act, it is evident that the rules in question have been made applicable to . ", "(49) Proviso to section 7 of the Delhi High Court Act envisages that any rules or orders which were in, force immediately before the appointed day with respect to practice and procedure in shall, until varied or revoked by rules or orders made by , apply with necessary modifications in relation to practice and procedure in as if made by that High Court. It is, therefore, evident that the rules or orders which were in' force immediately before the appointed day with respect to practice and procedure in have been made applicable to as if made by . Rules framed under section 9 of the Suits Valuation Act were rules in force immediately before the appointed day with regard to practice and procedure in. and would, therefore, be applicable in . This view is fortified by the judgment of of this Court in case and others (supra). ", "(50) Another contention sought to be urged was that the rules in, question were applicable only to s which enjoyed ordinary original civil jurisdiction and that there was no question of these rules being applicable to at Lahore, and as these s were not exercising ordinary original civil jurisdiction. It was because of the absence of this jurisdiction, goes the argument, that has been vested with the said jurisdiction by virtue of the section 5 of the Delhi High Act. That being so, it was submitted, the rules in question would not be applicable to as on the appointed day when came into being the rules were applicable only to s which were exercising ordinary original civil jurisdiction. It was submitted that section 7 of the Delhi High Act makes applicable to the law in force immediately before the appointed day with respect to practice and procedure in but these rules being not applicable in would not apply in relation to . The argument is without any merit and cannot be countenanced in face of section 16 of the Delhi High Act. The said section envisages that all proceedings pending immediately before the appointed day in any subordinate in the Union, Territory of Delhi in or in relation to any such civil suit as is referred to sub-section (2) of section 5 shall on, that day stand transferred to which shall proceed to try, hear and determine the matter as if it had been pending therein. Such a suit it is conceded on standing transferred to shall retain its valuation already fixed under the rules in question for the purposes of -fees and (The) Suits Valuation Act . If that be so, it is not understood as to how the rules in question would not apply to a suit filed directly in . The rules apply to all suits in which the plaintiff seeks to recover the account. which may be found due to the plaintiff on taking unsettled accounts between him and defendant. The plaintiff has been given the liberty to value his claim for the purposes of -fees in a suit where it is difficult to value the claim with any precision or definiteness with I further liberty to put such value as he may think proper for the purposes of jurisdiction subject to determination by the at any stage of the trial. ", "(51) Lastly, it was submitted that the suit is otherwise not properly valued for the purposes of court-fee and jurisdiction. The submission was that for seeking the relief for accounts the plaintiff has to seek a declaration that its copyright had been infringed and that the defendants are passing off their goods as that of the plaintiff. If that be so, it was urged, the relief for accounts would be cnsequential relief flowing from the relief of declaration sought. There is a fallacy in this submission which is wholly misconceived. Sub-section (1) of Section 55 of the Copyrigt Act, 1957, envisages that where copyright in any work has been infringed, the owner of the copyright shall except as otherwise provided by this Act, be entitled to all such remedies by way of injunction, damages, accounts and otherwise as are or may be conferred by law for the infringement of a right. The remedies available to the holder of the copyright in case of the infringment of his work are statutory remedies, independent of each other, entitling the aggrieved party to sue for any or all the reliefs available to him under the law. ", "(52) This brings me to the merits of the case. The case of the plaintiff, as already noted above, is that the defendants are committing infringement in respect of its wrapper registered against No. A- 18305/77- Apart from it, the defendants are alleged to be passing off their washing soap as that of the plaintiff by giving an impression that the washing soap packed under the impugned wrapper is that of the plaintiff, or, in, any manner connected with the plaintiff and its business. ", "(53) The defendants in denying these allegations submit that they are in the business of manufacture and sale of soaps since 1931. They submit that the wrappers used by them in respect of their brand of soap being \"521 washing soap\" which brand of washing soap was first introduced by them in January 1957 went a change in April 1957. ", "(54) With a view to appreciate the rival contentions it would be appropriate to note the law on the subject. In and another v- M/s. and another , of this Court observed that distinction between an action for infringement and for passing off is well known. The latter is a common law remedy being in substance an action for deceit, that is passing off by a person of his own goods as those of another. The former is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to those goods. The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine quo non in the case of an action for infringement. In an action for infringeroent, the plaintiff must no doubt make out that the use of the defendant's work is likely to deceive, but where the similarity between the plaintiff's and defendant's work is so close either visually, phonetically or otherwise and the Court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. In other words, if the essential features of the trade mark of the plaintiff have been adopted by the defendant the fact that the get up, packing and other writing or marks on the goods or on the packets in which the defendant offers his goods for sale show marked differences or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff. ", "SIMILARview was taken earlier by a Division Bench of this Court in . and was reiterated by this Court in . ", "(55) . (1977) Ii Delhi 709(17), it was held by a Division Bench of this Court that registration of mark in the trade mark registry would be irrelevant in an action for passing off. In deciding whether a particular mark is common to the trade, use of that mark would be extremely relevant. Mere registration would not be enough. Further, registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Priority in adoption and use of a trade mark is superior to priority in registration. For the purposes of claiming such proprietorship of a mark, it is not necessary that the mark should have been used for a considerable length of time. As a matter of fact, a single actual use with intent to continue such use co instanti confers a right to such mark as a trade mark. It is sufficient if the article with the mark upon it has actually become a ven,dable article in the market with intent on the part of the proprietor to continue its production and sales. It is not necessary that the goods should have acquired a reputation for quality under that mark. Actual use of the mark under such circumstances as showing an intention to adopt and use it as a trade mark is the test rather than the extent or the duration of the use. ", "(56) 1968 Dlt 321(18) it was observed that broadly speaking copyright is claimable only in respect of the form in which the ideas or opinions are expressed. What is protected is not original thought or information but the original expression of thought or information in some concrete form. Accordingly, it would be an infringement only if the defendant makes an unlawful use of the form in which the thought or information is expressed. ", "(57) ., . Their Lordships observed that in a passing off action the issue is, \"Is the defendant selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiffs goods\" while in an infringement action the issue is, \"Is the defendant using a mark which is colourable imitation of the plaintiffs registered trade mark?\" It was further observed that the action for infringement is a statutory right. It is dependent upon the validity of the registration and subject to other restrictions laid down in sections 30 , 34 and 35 of the Act. On the other hand the gist of the passing off action is that 'A' is not entitled to represent his goods as the goods of 'B' but it is not necessary for 'B' to prove that 'A' did this knowingly or with any intent to deceive. It is enough that the get up of 'B's' goods has become distinctive of them and that there is a probability of confusion between them and the goods of 'A'. No case of actual deception nor any actual damage need be proved. ", "(58) , , it was held by their Lordships that in order to come to the conclusion whether one mark is deceptively similar to another, the broad and essential features of the two are to be considered. They should not be placed side by side to find out if there are any differences in the design and if so, whether they are of such character as to prevent one design from being mistaken for the other. It would be enough if the impugned mark bears such an overall similarity to the registered mark as would be likely to mislead a person usually dealing with one to accept the other if offered to him. ", "(59) Let us examine the Ok washing soap wrapper of the plaintiff and the impugned wrapper of the defendants in the light of the principles enunciated in the above noted cases. ", "(60) The upper portion of the plaintiff's wrapper shows the words 'A Tata Product', in white colour arranged in a blue coloured diamond device, appearing on either side with the expression Ok arranged in a shield device in red colour, appearing in, the centre of the two blue diamond devices. The side panels consist of two blue-coloured diamond devices containing the expression Ok appearing in vernacular languages- The colour scheme of the plaintiff's wrappers consists of red and blue colours against white background- A perusal of the defendants impugned wrapper shows that it bears close resemblance to the plaintiff's wrapper, being partically of the same side, its colour scheme and design are almost the same as that of the plaintiff's wrapper- The essential features of the impugned wrapper are that the upper portion shows 'A Hansa Product' in white colour, arranged in blue diamond devices, appearing on either side with the numeral 521 in red colour arranged in a shield device- This is exactly the pattern of the plaintiff's design, except that for the words 'A Tata Product' in white colour, arranged in blue diamond devices, appearing on either side, the defendants have words 'A Hansa Product' in white colour- Further for the words 'OK' in red colour arranged in a shield device, the defendants have the numeral 521 in red colour, arranged in a shield device- The side panels, again, in the impugned wrapper comprise numeral 521 in vernacular and device of a swan instead of the word 'OK' arranged in blue diamond devices like that of the plaintiffs- On an overall view of the impugned label, there can be no doubt that it has been so designed in, its get up and in its colours that there is a likelihood of confusion being created in the mind of a purchaser- The wrapper of the defendants is calculated to lead purchasers to believe that the soap of the defendants is the plaintiff's soap- The similarity between the plaintiff's and defendants' wrapper is so close that on a visual comparison of the two, it has to be held that the wrapper of the defendants is an imitation of the plaintiff's wrapper, in that essential features of the trade mark of the plaintiff have been adopted by the defendants- The defendants, however, by indicating on their wrapper that the washing soap sold in' the said wrapper is made by ' Jaipur' seek to escape their liability in respect of passing off submitting that the added matter is sufficient to distinguish their goods from those of the plaintiff; but is the added matter enough to reject the other grievance of the plaintiff ? ", "(61) The plaintiff's other grievance is in respect of infringement of its copyright pertaining to the design of its wrapper- The plaintiff claims to be the holder of the registration No- A-1 8305/77 granted to it under the Indian Copyright Act , 1957, besides registration nos 18573/77 an,d A-l 8595/77- The defendants subsequent to their filing the written statement and the reply to the present application by an application (LA- No- 2861 of 1978) dated 8th August, 1978, have apprised this Court that their wrapper in question has also been registered under the Copyright Act , 1957, by the copyright office as No. A 20449/78. From the certified copy of the said registration it is evident that the defendants' wrapper was registered on 1st June, 1968. Does this registration exonerate the defendants of having infringed the copyright of the plaintiff ? ", "(62) The plaiatiff's copyright was registered on 7th September, 1977. The case of the plaintiff is that the defendants in October 1977 adopted the infringing wrapper of which the plaintiff came to know in November 1977. The defendants on the contrary contend that their washing soap being brand \"521 Washing Soap\" was for the first time introduced by them in the impugned wrappers in January, 1977 and that the said wrapper went a change in April 1977. Now the plaintiff does not ever categorically as to from which date it is using its wrapper which was registered with the trade mark registry on 7th September, 1977. It would, therefore, be a legitimate inference to draw that the plaintiff started using their wrapper in September, 1977. The plaintiff does not contend that it has been using its mark/design prior to its registration. The defendants on the contrary claim the user of their impugned wrapper from January, 1977, that is, prior in point of time than the plaintiff. There is no material on the record contrary to this assertion. As held by of this Court in Century Traders (supra) the trade mark exists independently of the registration which merely affords further protection under the statute, but the registration itself does not create a trade mark. Even a single actual use with intent to continue such use co instanti confers a right to such mark as a trade mark. It being not necessary that the goods should have acquired a reputation for quality under that mark, except that they have become a vendable article, the evidence on the record consisting of the supporting affidavits of the parties is not enough to clinch the issue in favor of one or the other party. In the facts and the circumstances of the case the plaintiff cannot be said to have established a prima fade case or that the balance of convenience is in its favor or that if the interim injunction is refused in terms of the prayer made by the plaintiff it would cause irreparable injury to it. However, with a view to protect the interest of the plaintiff it would be appropriate that the defendants be directed to file the accounts of their sales in the Court with a copy to the plaintiff. The defendants are accordingly directed to file the accounts of their sales from the date of filing of the suit to 31st October, 1978, within six weeks of this order besides filing regularly the monthly accounts. The accounts for the month of November, 1978, shall be filed by the middle of December, 1978, and the accounts for the subsequent months by the middle of the next succeeding month. ", "(63) The application (I.A. No. 16 of 1978) stands disposed of accordingly. The parties to bear their respective costs."], "relevant_candidates": ["0000193060", "0000494781", "0000537129", "0000880032", "0001175689", "0001181080", "0001734007", "0001787567", "0001924533", "0001925650"]} {"id": "0001732064", "text": ["PETITIONER: PREMJI BHAI PARMAR & OTHERS ETC. Vs. RESPONDENT: DELHI DEVELOPMENT AUTHORITY & OTHERS DATE OF JUDGMENT21/12/1979 BENCH: , D.A. BENCH: , D.A. KRISHNAIYER, V.R. CITATION: 1980 AIR 738 1980 SCR (2) 704 1980 SCC (2) 129 ACT: Constitution of India 1950 Articles 14 & 32 & Delhi Development Act 1957- constructing flats and selling them to public-Levy and collection of surcharge as price of flat in addition to the construction cost- to work on 'no profit no loss' basis-Such surcharge-Whether illegal-Discriminatory. HEADNOTE: The Delhi Development Act was enacted to provide for the development of Delhi through Master and Zonal Plans. The authority undertakes constructions of dwelling units for people belonging to different income groups styled as Middle Income, Low Income, and . In 1971, the authority commenced registration of intending applicants desirous of having dwelling units in different Income Groups. Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it, for allotment of flats in deposits as required by the terms and conditions for Scheme at Lawrence Road, Prasad Nagar and Rajouri Garden and made the initial deposit. The number of available flats being less in each scheme compared to the number of applicants registered, lots were drawn and the petitioners were informed that each of them should deposit the amount mentioned in the letter of allotment. The Petitioners paid the amount as intimated and consequently a flat was allotted to each of them and they entered into possession. In their writ petitions under Article 32 , the petitioners assailed the levy and collection of surcharge in addition to the cost price of the flats. It was con tended on their behalf that; (i) The treatment meted by the is discriminatory inasmuch as no surcharge was levied on flats in schemes constructed and allotted prior to November, 1976 and after January, 1977; (ii) As the authority formulates income-wise, area-wise schemes for constructing flats, there should be only income-wise classification wholly ignoring area and time factor for classification; (iii) Levying of surcharge runs counter to the object for which the authority was set-up namely to make available housing accommodation on \"no profit no loss\" basis; (iv) Surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not conform to any rational, tangible, scientific or understandable formula; (v) The Vice-Chairman had no authority to levy surcharge and that even if he has authorised the same, it runs counter to the principle of fixing disposal price incorporated in resolution No. 209 dated November 26, 1974; (vi) Even if the Vice-Chairman had such power there is nothing to show that he has exercised this power and given direction for adding the surcharge to the disposal price and that therefore, the levy of surcharge is unauthorised; and (vii) that the authority has made a, huge profit by levy of surcharge. The respondents raised a preliminary objection that the petitions were not maintainable under Article 32 of the Constitution inasmuch as the petitioners have not come to the . fol enforcement of a fundamental right conferred upon. 705 them under Part III of the Constitution but that the petitioners have invoked the jurisdiction of the for the relief of reopening concluded contracts, and that if the court accepts the contentions, the petitioners would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for Flats at a lower price. The should not therefore entertain the petitions. Dismissing the petitions, ^ HELD: 1. As the has heard the petitions on merits it is not inclined to reject them on the preliminary objections. It is undeniable that camouflage of Art. 14 cannot conceal the real purpose motivating the petitions, namely to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained. Petition to this under Art. 32 is not a proper remedy nor is the Supreme a proper forum for re-opening concluded contracts with a view to getting back a part of the purchase price paid after the benefit is taken. [712 D-E] In the instant case it is difficult to appreciate how Art. 14 can be attracted. Cost price of a property offered for Sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. The authority is under no obligation to fix price of different flats in different schemes albeit in the same income group at the same level or by any particular statutory or binding formula. Those who opt to take flats in a particular income- wise, area-wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment In the same class may attract Art. 14. But to say that the would be bound to offer flats income- group-wise according to the same price formula is to expect the to ignore time, situation, location and other relevant factors which all enter the price structure. [713 E, 715 A-F] Radhakrishna Agarwal & Ors. v. & Ors. 3 S.C.R. 249 at 255; etc. v. 3 S.C.R. 254, referred to. 2. In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide. The experts alone can work out the mechanics of price determination, can certainly not be expected to decide without the assistance of the experts. [715 F-G] Prag Ice & Oil Mills and Anr. etc. v. , 3 S.C.R, 293 at 330; 1 S.C.R. 845; , etc. 3 S.C.R 760 at 782; referred to. 3. Price of land, building, material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation. Their cost varies time-wise, place wise and availability-wise. All these uncertain factors cannot be overlooked for the purpose of classification. It is not possible therefore to hold that allottees of 706 flats in scheme at any place and executed at any time will form one class for the purpose of pricing policy. The only valid basis for classification would be income-wise, area-wise, time-wise, scheme-wise, meaning all flats constructed at or about the same time in same area in one project for particular income-group will form a class, and there is no discrimination amongst them. [716 G-H. 717 A-B] 4. Pricing policy is an executive policy. If the was set up for making available dwelling units at reasonable prices to persons belonging to different groups it would not be precluded from devising its own price formula for different income-groups. If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the undertaking, a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract Art. 14. [717 B-D] 5. It is a well recognised policy underlying tax law that the State has a wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a. violation of Art. 14. [717 , 1 S.C.R. 404. 6. The principle of \"no profit no loss\" cannot apply either to every flat or to every scheme or to every piece of land developed by the . It would be impossible for the lo function on such fragmented basis and such a policy statement has not been made by the . [718 D-E] 7. There is not the slightest or even a remote reference to \"no profit no loss\" formula for determining the cost price. A survey of the Regulations do not spell out any formula for price determination on the basis of \"no profit no loss\". Project-wise price fixation cannot be dubbed as arbitrary or discriminatory by comparing it with other projects at different places or at different times. [719 A-B JUDGMENT: ", "In the instant case after the work commenced and the actual cost estimate started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000/- which was approved by the Vice-Chairman on September 18, 1976. According to the revised estimate the approximate disposal cost for each flat. came tc Rs. 68.202/- and the cost of land per dwelling; unit was Rs. 7008/-. The revised estimate showed the disposal price of each flat as Rs. 75.200/-. The Commissioner of Income Tax who wanted to acquire 40 MIG flats in Prasad Nagar area offered the price of Rs. 75,000/- per flat which price was accepted. The difference between the cost price and the disposal price of Rs. 75,000/- per flat was treated as surcharge and the purpose was to use the extra money for extending price reduction benefit to The allottees of flats in , and schemes. It is therefore difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational. [720 B-E, E-F] 8 . The Vice-Chairman is appointed by as per Section. 3(3)(b) of the Act. He is a whole time officer and the Chief Executive of the . The composition of the as set out in section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of and representatives of . Three other persons, were to be nominated by of whom one shall be person with experience of planning. It is a high power body. Yet it completely abdicated its power and authority in favour of . The will practically supplant the . By a process of elimination the would supplant the and the Chairman could constitute the . Therefore, the Chairman enjoyed a very wide discretionary power. However once the power to delegate is given by the Regulations, the challenge to validity on the ground of delegation must fail. [720 G-H; 721 E-H, 722 A] ", "9. Resolution No. 209 is the one adopted by . It takes note of the delegation of powers to fix disposal and hire-purchase price of flats to the Vice- Chairman and further provides that if there is a marginal saving in any scheme the amount be diverted to subsidies cost of and houses. The Resolution No. 200 of the read with Resolution No. 709 of sets out clearly that the power to fix the disposal price was delegated to the Vice-Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with Section 59 clearly envisages such delegation of powers. [722 C-E] ", "10. The note of Accounts Officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000/- to the Commissioner of Income Tax for and that should be the disposal price. This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice-Chairman Even if it includes surcharge it cannot be said with confidence that the Vice-Chairman has not approved has not approved the surcharge as a component of disposal price. [722 G-H] ", "11. The contention that the has made a huge profit by levy of surcharge is without merits. On the contrary it appears that the overall working of the is deficit ridden. [723 A-B] & ORIGINAL JURISDICTION: Writ Petitions Nos. 4660/78 & 562/79 (Under Article 32 of the Constitution). ", " and for the Petitioner in W.P. No. 4660/78. ", ", , and for the Respondent No. 1 in both the Writ Petitions. ", " and and for the Petitioner in W.P. No. 562/79. ", "The Judgment of the Court was delivered by , J. Allottees of flats, constructed by ('' for short), located at Rajouri, Garden, Prasad Nagar and Lawrence Road comprised in scheme, question the decision of first respondent (Delhi Development. ) to collect surcharge as part of the sale price of each flat from each of them as unauthorized and discriminatory i character, in there two petitions under Article 32 of tho Constitution. Both the petitions raise identical contentions and i was said that Writ Petition No. 562 of 1979 is more comprehensive in character and, therefore, the facts alleged therein may be taken as representative character. They may be briefly stated. ", " was set up under the Delhi Development Act, 1957. The Act was enacted to provide for the development of Delhi according to plan and for matters ancillary thereto and for carrying out the objects underlying the Act, the has prepared Master and Zonal development plans for Delhi. With a view to easing the acute housing problems in the capital city the undertakes construction of dwelling units for people belonging to different income groups styled as ('MIG' for short), ('LIG' for short), and ('' for short). In 1971 the commenced registration of intending applicants desirous of having n dwelling unit in different income groups. Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it and made the initial deposits as required by the terms and conditions. Petitioners had applied and got themselves registered for allotment of flats in MIG scheme situated at Lawrence Road. As the number of available flats in this scheme were less than the number of allottees registered, lots were drawn and the petitioners were informed that they have been allotted flats and that each of them should deposit the amount mentioned in the letter of allotment. It appears that the petitioners paid the amount they were called upon to pay and a flat was allotted to each of them and they have entered into possession. Petitioners now contend that the being a statutory body formed with an object of working on 'no profit no loss' basis and having prescribed a formula for working out the cost price of flats has levied and collected a surcharge from each of the petitioner. According to the petitioners the cost price worked out in accordance with the formula prescribed by the cost of each flat would be between Rs. 51,800 and Rs. 55,600 depending upon the area, extra balcony etc. However, each one of them had to pay between Rs. 56,000 to Rs. 60,000 and that according to the petitioners a surcharge varying from Rs. 3,400 to Rs. 6,000 for a flat has been illegally and unlawfully collected by way of premium or profit. It is further alleged that the has not levied and collected such surcharge from other A allottees of flats in some other MIG Schemes and that this action of levying and collecting surcharge is violative of Art. 14 inasmuch as persons belonging to the same class, namely, allottees of flats in MIG Scheme have been unequally treated. It is also alleged that there was no valid or understandable justification of levying and collecting surcharge as price of flats comprised in MIG Schemes, between 1976 and 1977, and that from May 10, 1978, this unauthorised surcharge has been abolished. Petitioners also contend that the assertion of the that this surcharge was levied and collected with a view to financing housing projects for lower income groups, and dwelling units so as to provide these weaker sections of the society, houses at a price lower than cost price with a view to making them affordable by such members of the weaker sections of the society, is belied by facts undisputed and that the whole attempt of the , in violation of its avowed policy, was to make profit by levying such illegal surcharge. The petitioners, therefore, prayed for issue of a writ or order or direction declaring the levy of surcharge as illegal and unconstitutional and for a direction for refund thereof together with the interest at the rate of 12% per annum from the date of levy and collection till the date of refund. ", "In the cognate petition the petitioners are allottees of flats situated at Prasad Nagar and Rajouri Garden under MIG scheme and they complain that in their case surcharge varies from Rs. 19,200 to . 22,600. ", "Respondents to the petition are , No. 1 and Chairman and Vice-Chairman of the Authoring, Nos. 2 and 3 respectively. In Writ Petition No. 4660/78 the is respondent 1 and , respondent 2. Petitions were mainly contested by and on behalf of the . ", "The Delhi Development Act, 1957 ('Act' for short), was enacted as its long title shows with the a view to providing for the development of Delhi according to the plan and for arresting haphazard growth and for matters ancillary thereto. It envisages the setting up of an to be styled as Delhi Development which would be a body corporate by the name aforesaid having perpetual succession and a common seal with power 'o acquire, hold and dispose of property, both movable and immovable, and to contract and shall by the said name, sue and be sued. The composition of the is set out in sub-section (iii) of s. 3. Amongst others, Administrator of would be an ex-officio Chairman and a Vice-Chairman to be appointed by . The Vice-Chairman may be either a whole-time or part-time officer as may think fit. Section S contemplates the constitution of for the purpose of advising, the on the preparation of the master plan and on such matters relating to the planning of development or arising out of or in connection with the administration of the Act. Section 5A which was added by amending Act 56 of 1963 confers power on the to constitute as many committees consisting wholly of members or wholly of other persons or partly of members and partly of other persons and for such purpose or purposes as it may think fit. Chapter Ill-A which was inserted by the Amending Act of 1963 confers power for modification of the master plain once prepared. Chapter IV provides for development of lands. Chapter V confers power on to acquire land for the purposes of development or for any other purpose under the Act under the provisions to the Land Acquisition Act , 1894, and further authorises to transfer the land so acquired to he . Chapter VI provides for finances and audit of the accounts of the Chapter VII provides for supplemental and miscellaneous provisions. Section 52 confers power on the to delegate any power exercisable by it under the Act, except the power to make regulations, on such officer or local authority or committee constitued under s. 5A as may be mentioned, by a notification to be published in the Official Gazette in such cases and subject to such conditions, if any, as may be specified therein. One more section of which notice should be taken is s. 57 which confers power on the with the previous approval of by notification in the official Gazette to make regulations consistent; with the Act and the rules made thereunder to carry out the purposes of this Act. Sub-s. provides that until the is established under the Act any regulation which may be made under. sub-s. may be made by and any regulation so made may be altered or rescinded by the in exercise of its powers under sub-s. Section 58 makes it obligatory to lay every rule and regulation made under this Act before in session for a period of 30 days and subject to any alteration or modification therein the rule or regulation shall after expiry of the prescribed period mentioned have effect only in such modified form or be of no effect as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule or regulation. ", "Petitioners belong to , each of whom registered himself as an intending applicant for a flat in scheme and each of whom has been allotted a flat either in Rajouri Garden, Prasad Nagar or Lawrence Road. Number of persons desirous of having a flat registered with the far outnumbered the available flats with the result that lots had to be drawn and the lucky ones got a letter of allotment to pay the price set out in the brochure in respect of each scheme and to obtain a flat. Each petitioner had paid the price and has entered into possession of the allotted flat. All the petitioners now contend that the has levied and collected a surcharge as part o: purchase price of flat arbitrarily and without the authority of law and has collected the same from them in violation of its object of functioning on 'no profit no loss' basis and thereby made a huge profit. They further contend that they have been subjected to discriminatory treatment in contravention of Art. 14 of the Constitution inasmuch as no surcharge has been collected from allottees of flats in schemes prior to November 1976 and subsequent to January 1977 except these three schemes and one Wazirpur scheme. Further, no other scheme flats have been subjected to such unauthorised levy of surcharge. It is pointed out that the levy of surcharge has been scrapped in 1978. The petitioners contend that levy of surcharge has no nexus to the object for which the was set up namely, providing housing accommodation at reasonable price by the whose declared policy is 'no profit no loss'. It was said on behalf of the petitioners that even if the was set up for providing housing accommodation to the people in different income groups (keeping in view their financial capacity/affordability) yet a statutory body like the operating on 'no profit no, loss' basis must have a scientifically prescribed formula for working out its price structure and that must be uniformly applied to all those who apply for flats and to whom they are allotted and such a statutory cannot discriminate in working out the disposal price of the flats by including surcharge in respect of some schemes within a certain specified period, a surcharge not authorised by law and not sanctioned by the as a component of price and unknown to pricing of flats, while others similarly situated and similarly circumstanced and belonging to the same income group enjoyed the benefit cf getting flats at cost price and, therefore, petitioners have been accorded discriminatory treatment in the matter of price of flats allotted to them. Petitioners, therefore, contend that even if they applied for flats anc got registered and were offered flats and accepted the same at the price stated in the brochure and even if it has resulted in a concluded contract yet the should not turn a blind eye to such gross discrimination by a statutory authority charged with a duty to provide housing accommodation acting on the declared policy of 'no profit no loss'. It was simultaneously contended that the Vice- Chairman of the authorised to determine the prices of flats in each income group has not made any order or has not given any direction for levy of surcharge and that the levy of surcharge was wholly unauthorised. ", "A preliminary objection was raised by the that the petitions are not maintainable under Art. 32 of the Constitution inasmuch as The petitioners have not come to the for enforcement of a t fundamental right conferred upon the petitioners under Part III of the Constitution but the petitioners have invoked jurisdiction of this for a relief of re-opening concluded contracts. It was also submitted that if the accepts the contention of the petitioners they would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for flats at a lower price and, there fore, also the should not entertain the petitions. ", "Though we are not inclined to reject the petitions on this preliminary objection as we have heard them on merits it is undeniable that camouflage of Art. 14 cannot conceal the real purpose motivating these petitions, namely, to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained and petition to this under Art. 32 is not a proper remedy nor is this a proper forum for re-opening the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken. The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the, scheme. After the registration and when the flats were constructed and ready for occupation brochures were issued by the . One such brochure for ', allotment of flats in Lawrence Road residential scheme is Annexure R-1. This brochure specifies the terms and conditions including price on which flat will be offered. It also reserved the right to surrender or cancel the registration, the mode and method of paying the price and handing over the possession. There is an application form annexed to the brochure. Annexure 'A' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively. It sets out the premium amount payable for land as also the total cost in respect of the flats on the ground floor, first floor and second floor. The statement also shows the earnest money deposited at the time of the registration and the balance payable. It is on the basis of these brochures that the applicants applied for the flats in Lawrence Road and other schemes. They knew and are presumed to know the contents of the brochure and particularly the price payable. They offered to purchase the flats at the price on which the offered to sell the same. After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat, and thus sale became complete. There is no suggestion that there was a mis-statement or incorrect statement or any fraudulent concealment in the information supplied in the brochure published by the on the strength of which they applied and obtained flats. How the seller works out his price is a matter of his own choice unless it is subject to statutory control. Price of property is in the realm of contract between a seller and buyer. There is no obligation on the purchaser to purchase the flat at the price offered. Even afar registration the registered applicants may opt for other schemes. His light to enter into-other scheme opting out of present offer is not thereby jeopardised or negatived and applicants so outnumbered the available flats that lots had to be drawn. With this background the petitioners now contend that the has collected surcharge as component of price which the was not authorised or entitled to collect. Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject-matter of a petition under Art. 32. And Art. 14 cannot camouflage the real bone of contention. Conceding for this submission that the has the trappings of a or would be comprehended in 'other authority' for the purpose of Art. 12 , while determining price of flats constructed by it, it acts purely in its executive capacity and \"is bound by the obligations which dealings of the with the individual citizens import into every transacting entered into the exercise of its constitutional powers But after the or its agents have entered into the field of ordinary contract, the relations are no longer governed by the Constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Art. 14 or of any other constitutional provision when the or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the. terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the in the contractual field which is apart from contract\" (see .) Petitioners were under no obligation to seek allotment of flats even after they had registered themselves. They looked at the price and flats and applied for the flats. This they did voluntarily. hey were advised by the brochures to look at the flats before going in for the same. They were lucky enough to get allotment when the lots were drawn. Each one of them was allotted a flat and he paid the price voluntarily. They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat. I The in its affidavit in reply in terms stated that it is. willing to take back the fiats and to repay them the full price. The transaction is complete, viz., possession of the flat is taken and price is paid. At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to re-open and wriggle out of a concluded contract only partially. In a similar and identical situation in & . v. has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this under Art. 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained. However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the is discriminatory inasmuch as no surcharge was levied on flats in scheme constructed and allotted prior to November 1976 and after January 1977. flats involved in these petitions were constructed and were available for allotment in November 1976 and the lots were drawn in January 1977. There is one more scheme at Munirka where the allotment took place at or about the same time but in which case no surcharge was levied. The contention is that once for the purpose of eligibility to acquire a flat, the criterion is grounded in income brackets, , LIG, et . those in the same income bracket form one class even for the purpose of determining disposal price of flat allotable to them irrespective of situation, location or other relevant determinants which enter into price calculation and therefore, in the same income group there cannot be differentiation by levying of surcharge in some cases and charging only the cost price in other cases and that the discrimination is thus writ large on the face of the record because by levying surcharge in case of petitioners they have been treated unequally and with an evil eye. It is difficult to appreciate how Art. 14 can be attracted in the circumstances hereinabove mentioned. Cost price of a property offered for sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula. Except the submission that the has a proclaimed policy of constructing and offering flats on 'no profit no loss' basis which according to Mr. has a statutory flavour in the regulations enacted under the Act, the is under no statutory obligation about its pricing policy of the flats constructed by it. When the flats were offered to the petitioners the price in round figure in respect of each flat was mentioned and surcharge was not separately set out and this price has been accepted by the petitioners. The obligation that regulations are binding on the and have provided for a statutory price fixation formula on 'no profit no loss' basis will be presently examined but save this the is under no obligation to fix price of different flats in differed. schemes albeit in the same income group at the same level or by any particular statutory or binding formula. The having the trappings of a might be covered by the expression 'other authority' in Art. 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme. Those who opt to take flats in a particular income- wise area-wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract Art. 14. But to say that throughout its course of existence the would be bound to offer flats income-groupwise according to the same price formula is to expect the to ignore time, situation, location and other relevant factors which all enter the price structure. In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide. The experts alone can work out the mechanics of price determination; can certainly not be expected to decide without' the assistance of the experts (See and v. ) In the leading judgment it has been observed that mechanics of price fixation have necessarily to be left to the executive and unless it is patent that there is hostile discrimination against a class the processual basis of price fixation has to be accepted in the generality of cases as valid. ", "716 ", "This Court in ,(l) approved the following dictum of on Constitutional Law, page 587: ", "\"The does not have to tax everything in order to tax something. It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably . . . has been practical and has permitted a very wide latitude in classification for taxation. ", "What is forbidden by Art. 14 is discrimination amongst persons of the same class and for the purposes of allotment of flats scheme-wise, allottees of flats in the same scheme, not different schemes in the same income bracket, will have to be treated as a class and unless in each such class there is unequal treatment or unreasonable or arbitrary treatment, the complaint that Art. 14 is violated cannot be entertained. Therefore, in the , etc., , J., speaking for the observed as under: ", "\"A reasonable classification is one which includes all who are similarly situated and none who are not. The question then is what does the phrase 'similarly situated' mean ? The answer to the question is that we must look beyond the classification to the purpose of the law. A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law. The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good.\" ", "Is the classification income-wise scheme-wise violative of Art. 14 in any manner ? The formulates income- wise area-wise schemes for constructing flats. Petitioners contend that there should be only income-wise classification wholly ignoring area and time factor for classification. They say that allottees of flats in all schemes irrespective of area and location and irrespective of when the flats were constructed form one class for determining price of flats. There. is no merit in this contenting. What are price determinants ? Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation. Their cost varies time-wise, place-wise, availability-wise. All these uncertain factors cannot be overlooked for the purpose of classification. Therefore, it is not possible to hold that allottees of flats in scheme at any place and executed at any time will form one class for the purpose of pricing policy. only valid basis for classification would be income-wise, area-wise, time- wise, scheme-wise, meaning all flats constructed at or about the same time in same area in one project for particular income-group will form a class. And there is no discrimination amongst them. ", "Pricing policy is an executive policy. If the was set up for making available dwelling units at reasonable price to persons belonging to different income-groups it would not be precluded from devising its own price formula for different income-groups. If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination. In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply or can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract Art. ", "14. People in, the can be charged more than the actual cost price so as to give benefit to allottees of flats in , and . And yet record shows that those better off got flats comparatively cheaper to such flats in open market. It is a well recognised policy underlying tax law that the has wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others. It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a violation of Art. 14 , (see ). Can it be said that classification, income-wise-cum-scheme-wise is unreasonable ? The answer is a firm no. Even the petitioners could not point out unequal treatment in same class. However, a feeble attempt was made to urge that allottees of flats in scheme at Munirka which project came up at or about the same time were not subjected to surcharge. This will be presently examined but aside from that, contention is that why within a particular period, namely, November 1976 to January 1977 the policy of levying surcharge was resorted to and t-hat in schemes pertaining to period prior to November 1976 and later April 1977 no surcharge was levied. ", "718 ", "If a certain pricing policy was adopted for a certain period and was uniformly applied to projects coming up during that period, it cannot be the foundation for a submission why such policy was not adopted earlier or abandoned later. ", "It was, however, said that levying of surcharge runs counter to object for which the was set up, namely, to make available housing accommodation on 'no profit no loss' basis. The argument proceeds on the assumption that the principle of 'no profit no loss' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat. Principle of 'no profit no loss' has been explained by the respondents. It IS said that in the over- all working, planning and execution of projects which the undertakes as part of development of Delhi, the integral part of it being construction of flats for different income-groups the motives and working of it would not be profit oriented but would work on 'no profit no loss' economic doctrine. This would not for a moment suggest that the principle of 'no profit no loss' should apply either to every flat or to every scheme or to every piece of land developed by the . It would be impossible for the to function on such fragmented basis and such a policy statement has not been made by the . Of course, some public statement appears to have been made that the overall working of the is on \"no profit no loss' basis. Respondent 1 has been able to point out that the 's housing scheme, as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made. It is also shown that till Municipal authority takes over municipal services the spends for the same and incurs cost. Apart from that petitioners have not been able to show that the is actuated by commercial profit oriented approach in its overall working. ", "It is, however, necessary to examine the contention whether this 'no profit no loss' policy statement has any statutory flavour as contended by Mr . The regulations styled as the Delhi Development (Management and Disposal of Housing Estates) Regulations, 1968, ('Regulations' for short) are framed in exercise of the powers conferred by s. 57 and were laid before as required by s. 58 . Disposal price has been defined in Regulation 2(13) to mean in relation to a property such price as may be fixed by the for such property. There is not the slightest or even a remote reference to 'no profit no loss' formula for determining the cost price. A quick survey of the Regulations do A not spell out any formula for price determination on the basis of 'no profit no loss'. Whether the power to determine disposal price is in will be presently examined. Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the and as price has been fixed by the delegate of the even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the . ", "It is at this stage necessary to examine the contention that in the case of Wazirpur and Munirka LIG schemes which came up during this very period no surcharge was levied and, therefore, there is invidious discrimination amongst members of the same class. Again the argument proceeds that income- wise classification alone is valid. Here time-wise (November 1976 to January 1977) classification is relied upon. It is an admitted position that no surcharge is levied on flats at Munirka. The affidavit in reply shows that the land on which flats are constructed in Munirka scheme turned out to be very rocky with the result that the construction cost in respect of flats at Munirka scheme worked out at Rs. 456 per plinth area per metre whereas in respect of Lawrence Road it came to Rs. 401.54 p. Only. The , therefore, thought that if surcharge is levied on flats under scheme in Munirka area the disposal price would be very high and would be beyond the reach of . It is in this background of the special facts that 'no surcharge was levied in respect of any flat in in Munirka area. Project-wise price fixation cannot be dubbed as arbitrary or discriminatory in comparison with other projects at different places. ", "It was, however, pointed out that 132 flats in Rajouri Garden MIG scheme were disposed of- without levying surcharge as component of sale price. It is pointed out in affidavit in reply that those flats were handed over to for meeting their needs for staff quarters and that was done in the year 1978. It is also pointed out that the Government charged half the price of the land in respect of these 132 flats and, therefore, surcharge was not levied. There is two-fold fallacy in this submission. Government ordinarily is in a class by itself and its needs of staff quarters deserve to be met in large public interest. Government has not got any undeserved benefit at the cost and risk of petitioners. Hence their complaint in this behalf is without merits. ", "It was next contended that surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not answer any rational, tangible, scientific cr understandable formula. How the figure of surcharge has been worked out has been explained in detail in affidavit in reply. Briefly recapitulating the same, it may be mentioned that initial estimates for 304 MIG flats in Prasad Nagar area were prepared in or about 1971 and the estimated cost was Rs. 1,17,83,200 and that on March 21, 1972, an estimate of Rs 1,09,97,100 was sanctioned. After the work commenced and the actual cost started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000 which was approved by the Vice-Chairman on September 18, 1976. According to the revised estimate the approximate disposal cost for each flat came to Rs. 68,202 and the cost of land per dwelling unit was Rs. 7,008. Extracts of original notes of Financial Adviser (Housing) and the approval of the same by the Vice- Chairman have been set out in the affidavit in reply. The subsequent revised estimates show that disposal price of each flat would be Rs. 75,200. In the meantime wanted to acquire 40 MIG flats in Prasad Nagar area and the same were offered at the price of Rs. 75,000, per flat. Commissioner of Income Tax accepted the price. This became the starting point for working out the disposal price in that period. The difference between the cost price and the disposal price of Rs. 75,000 per flat was treated as surcharge and the purpose was to use the extra money for extending cost reduction benefit to the allottees of flats in , and schemes. Affidavit in reply of the Secretary of Respondent 1 provides further information which show that the cost price would be Rs. 78,000. Therefore, at best the component of surcharge would be between Rs. 1700 to Rs. 2200 in Rajouri Garden MIG flats. Similarly, with regard to MIG flats at Lawrence Road the actual cost price would be in close proximity of the disposal price would be in close proximity of the disposal price charged from the petitioners. It is, therefore, difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational. ", "The next contention is that Vice-Chairman had no authority to levy surcharge and that even if he has authorised the same it runs counter to the principle of fixing disposal price incorporated in Resolution No. 209 dated November 26, 1974. The Vice-Chairman is to be appointed by as per s. 3(3)(b) of the Act. It appears that this Vice-Chairman is whole-time officer and will be the Chief Executive of the . This becomes clear from regulation 3 of the Regulations which provides as under: ", "\"3. These regulations shall be administered by the Vice-Chairman, subject to general guidance and resolutions of the , who may delegate his powers to any officer of the \". ", "Thus the Vice-Chairman, subject to general guidance and resolutions cf the , shall administer the regulations. He can delegate the functions to any officer of the . Regulation 59 is important which reads as under:- ", "\"59. The may delegate all or any of its powers under these regulations to the Vice-Chairman or to a whole time member\". ", "Armed with this power of delegation the adopted Resolution No. 60 dated February 21, 1970 which reads as under: ", "\"Resolved that the recommendations of the be approved and all the powers of be exercised by the Housing and the Chairman, be authorised to constitute the said committee, determine the organisational set-up and take (sic) all efforts for implementing the housing and allied schemes\". ", "Serious exception was taken to this gross abdication of its powers and functions by the . The composition of the as set out in s. 3 would include such persons as Member, Engineering Member, representatives of and representatives of as and when set up. Three other persons were to be nominated by of whom one shall be person with experience of planning. It is a high power body. Yet it completely abdicated its power and authority in favour of . The will practically supplant the . But the more objectionable part of Resolution No. 60 is that such which is to enjoy all powers and functions of the was to be constituted by the Chairman at his sole discretion because he was authorised not only to constitute the but to determine organisational set up and then make all efforts for implementing the housing and allied schemes. It is really difficult to appreciate such whole-sale abdication or delegation of powers by a statutory authority in favour of a whose composition would be determined by one man, the Chairman. By a process of elimination the could supplant the and the Chairman could constitute . Therefore, the Chairman enjoyed a very wide discretionary power. Though Mr. did challenge the validity of Resolution No. 60, Mr. in cognate petition refrained from doing so. Once the power to delegate is given by the Regulations the challenge to validity on the ground of delegation must fail It is, however, necessary to examine the submission whether Vice-Chairman could have permitted levy of surcharge as a component of the price of flats in MIG schemes. In this connection it would be advantageous to refer to Resolution No. 20 dated June 18, 1968. Of the by which the recommendations of the Standing , inter alia, empowering the Vice-Chairman to approve forms of application as well as to fix the disposal and hire-purchase price were accepted. Resolution No. 209 is the one adopted by the . It takes note of the delegation of powers to fix disposal and hire-purchase price of flats to the Vice-Chairman and further provides that if there is a marginal saving in any scheme the amount is always diverted to subsidies cost of and houses. It seems the Resolution is for information of the and the has merely resolved that the information be noted. The Resolution No. 200 of the with Resolution No. 209 of the sets out clearly that the power to fix the disposal price was delegated to the Vice-Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with s. 59 clearly envisages such delegation of powers. It is, therefore, idle to contend that the Vice-Chairman had no authority to levy the surcharge as component of disposal price of flats. ", "It was next contended that even if Vice-Chairman had such power there is nothing to show that he has exercised this power and that, therefore, somewhere without any authority someone has added the surcharge to the disposal price and that, therefore, the levy of surcharge is unauthorised. The submission seems to be factually incorrect. The note of Accounts officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000 to the Commissioner of Income Tax for and that should be the disposal price This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice-Chairman. There fore, the price of Rs. 75,000 as the disposal price is approved by the Vice-Chairman. Even if it includes surcharge it cannot be said with confidence that the Vice-Chairman has not approved the surcharge as a component of disposal price. ", "723 ", "The last contention is that the has made a huge profit by levy of surcharge. In this connection statistical table was annexed to the petition and there was serious controversy about the facts and figures set out therein, by the other side. Having gone through the detailed affidavit in reply it transpires that the contention is without merits. Therefore, there is no substance in the contention that the has made a huge profit. On the contrary it appears that the overall working of the is deficit ridden. ", "These were all the contentions in these petitions and as there is no Merit in any of them the petitions are dismissed. There will be no order as to cost Petitions dismissed. ", "724"], "relevant_candidates": ["0000008308", "0000494408", "0000541216", "0000681436"]} {"id": "0001733752", "text": [", J. ", "1. The defendant in O.S.No. 454 of 1975 on the file of the City Civil Judge, Madras, is the petitioner in this revision. The respondent is the plaintiff decree-holder. The defendant admittedly was let into possession of the premises in question as a tenant. The tenancy was terminated and the plaintiff laid the suit for ejectment of the defendant. Apart from other contentions,, the defendant raised a plea that the suit for ejectment is not maintainable in view of the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 hereinafter referred to as the Act. The plaintiff counteracted this defence of the defendant by stating that the building was completed only in March, 1970 and as per Section 30(i) of the Act, nothing in the Act shall apply to any building for a period of five years from the date on which the construction is completed and notified to the local authority concerned. countenanced this case of the plaintiff. The suit came to be heard in January, 1976 and was, in fact, disposed of on 19th January, 1976, and by that time, the five year period of exemption under Section 30(i) of the Act had lapsed. Hence, the defendant put forth a contention that a decree as such could not be passed. This contention of the defendant was also rejected by the first Court. The defendant appealed in A.S.No. 247 of 1976, which Was heard and disposed of by a Bench of this Court, consisting of and , JJ. The defendant repeated the very same contention that the period of exemption had lapsed and the inhibition with regard to eviction of tenants will come into play. The learned Judges considered it unnecessary at that stage to go into the question as to whether : any decree that may be passed in the suit is executable or not in view of the provisions of Section 10 of the Act, as that question will arise only at the stage of the execution after the decree is passed. The learned Judges expressing an opinion that the first court was in error in going into that question at that stage, set aside that finding of the court below, and without going into the question of the executability of the decree, the decree for ejectment was confirmed, leaving it open to the defendant to agitate the. same at the stage of execution. The appeal was ultimately dismissed. The plaintiff has levied execution in E.P.No. 2166 of 1981. of the decree for ejectment. The defendant, apart from contesting the execution for delivery of possession, took out E.A.No. 924 of 1982 under Section 47 of the Code of Civil Procedure to declare that the decree passed in the suit is not executable in view of the provisions of the Act. The court below has dismissed E.A.No. 924 of 1982 -and consequently directed delivery of possession in E.P.No. 2166 of 1981. This revision is preferred against the order passed by the Court below in. E.A.No. 924 of 1982. The Court below relied on a pronouncement of , J. in . ", "2. Mr. , learned Counsel for the defendant, would submit that even prior to the date of the decree in the suit and pending the suit the exemption under Section 30(1) of the Act had lapsed and even though the jurisdiction of to pass a decree is not ousted, on the lapse of the exemption, the Act became applicable to the premises in question and when the execution came to be levied, the provisions of the Act squarely applied and there could not be an eviction of the defendant, who has become a tenant within the meaning of the Act, except under the provisions of the Act. Learned Counsel further submits that with or without the exemption, the jurisdiction of to pass a decree in ejectment even against a tenant within the meaning of the Act is not ousted and this proposition has emerged from the judicial precedents rendered under the Rent Control Statute, which prevailed and which is prevailing in this State and the* only inhibition is with reference to evicting the tenant in execution of such a decree or otherwise except through the processes under the Act, and on the conditions set out therein getting satisfied therefor, and when the execution came to be levied in respect of the decree, the Act had come to be applied to the premises in question and the decree could not be availed of to evict the defendant, who is a tenant within the meaning of the act. As against this, Mr. , learned Counsel appearing for the plaintiff, would heavily rely on the pronouncement of , referred to above to state that the decree obtained by the plaintiff can be executed though the period of five years under, Section 30(1) of the Act had expired by the time the decree was granted and the execution proceedings initiated. ", "3. The contentions raised by the respective counsel oblige me to bestow some serious attention on the case law on the subject including that which has arisen in similar contingencies under the Act itself or under similar statutes, current and prevailing anterior to the enactment of the Act. Before I do that, I would like to advert to the broad and general implications of the exemption provision in Section 30(1) of the Act. It says that nothing in the Act shall apply to any building for a period of five years from the date on which the construction is completed and notified to the local authority concerned. This exemption has got a peculiarity of its own. A building within the meaning of the Act comes into existence for the first time. Normally the provisions of the Act should apply. By this exemption, the application of the Act gets postponed for a period of five years, and the Act comes into force so far as this building is concerned only after the lapse of the five years. Hence the principles discussed in judicial precedents, taking note of the coming into force of provisions similar to those under the Act, for the first time before the decree or after the decree and before the levying of execution or after the levying of execution and under similar contingencies are very relevant for the purpose of deciding the implication of the present exemption provision. The first principle to construe an exemption provision is that it should be properly and strictly construed against the person who claims it. Courts are not supposed to enlarge or extend the exemption beyond the scope of the provision. But for the exemption, the Act would apply even to a new building. The application of the Act to new building gets postponed and hence on the lapse of the period of five years, the Act must be applied to even such a building. ", "4. (1954)1 M.L.J.44 : A.I.R.1945 Mad. 181 Chandrasekhara Aiyar, J. held that there was an ouster of jurisdiction of Civil Courts and the remedy of the plaintiff was to go before the Controller. ", "5. (1945)1 M.L.J.441 : 58 L.W.527 : A.I.R.1945 Mad.386, , J. dealt with a case where the landlord had, after giving notice, filed a suit for evicting a tenant and had obtained a decree therein and levied execution for delivery prior to the amendment of the House Rent Control Order prescribing that a tenant could not be evicted except under an order of the Rent Controller, and the learned Judge held that the landlord's right to execute the decree was not taken away by the amendment, which came into force subsequent to the application to execute the decree. , J. after referring to the decision of , j. summed up the proposition in the following terms: ", "and when an application for possession comes before the Controller, the Controller should apply his mind to the circumstances actually present before him to enable him to make or refuse an order, and it would be for one side or the other to point out that the application for ejectment had lost its force owing to the fact that since the application had been made, difficulties which were then not in existence had arisen or difficulties that were in existence had disappeared. I am not however concerned with any such position in this case. ", "6. In V.R.R. Sami Ayyar, In re (1946)1 M.L.J. 134 : A.I.R.1946 Mad.321, , J. dealt with the contention that a decree for eviction could not be passed by in view of Section 7(A) of the Madras House Rent Control Order, 1941. Before the learned Judge, the pronouncement of , J. in v. (1945)1 M.L.J.44 : A.I.R.1945 Mad. 181, was relied on, but the learned Judge did not accept the same and held that the wording of the section is not such as to deprive of their power to entertain the suit for eviction and to adjudicate upon it and what the Control Order prohibits is eviction outside the provisions of Section 7(A) of the Order. The very same learned Judge in v, (1946)1 M.L.J. 135 : A.I.R.1946 Mad.320 once again dealt with a similar contention and repelled the same, holding that: ", "It cannot be said that these words are wide enough to deprive of their jurisdiction to pass decrees; all that the rule contemplates is the control of the relief of eviction. ", "Even here, , J. did not follow the pronouncement of , J. ", "7. In v, (1948)2 M.L.J.359 : 61 L.W.639 : A.LR.1949 Mad.367, , J. was dealing with a case where the suit for ejectment was pending when the Madras Non-Residential Building Rent Control Order was amended. However, an ex parte decree was passed subsequently and the property itself was delivered to the plaintiff landlord in execution proceedings. But the execution application was not normally closed and the defendant/tenant applied to the for redelivery of the property and the same was ordered. The District Munsif upheld the contention of the defendant that under Section 8(1) of the Amended Non-Residential Buildings Rent Control Order, a tenant could not be evicted and accordingly held that the previous order directing delivery was wrong and the court had jurisdiction to set aside that order and to order re-delivery as the execution petition had not been closed and the proceedings were still pending before the . The decree-holder appealed and the appellate also agreed with the first on this question. A civil miscellaneous second appeal was preferred to this . , J. construed the expressions \"in execution of a decree or otherwise\" occurring in Section 8(1) of the Control Order and held that it would have reference to a decree in a suit instituted after the amendment and the learned Judge declined to construe the section retrospectively and further held as follows: ", "...If there is nothing else in the enactment to indicate that every pending legislation or pre-existing substantive rights of parties were intended to be affected by the amended Order, I must hold in accordance with the well established rules of construction of statutes \"that the amended Control Order, Section 8 , Clauses 1 and 2 had no application to the present execution petition and that the order for delivery originally made was right and proper. Reference may usefully be made in the discussif i of the questions as to how far statutes can be taken to have retrospective operation to the judgment in Mt. Atiga Begum (1940) F.C.R.I 10 : 53 L.W.397 : A.I.R. 1941 F.C. 16. , J. points out that unless either by express or by necessary intendment it is made out in the new legislation that it applies to pending proceedings as well, it ought not to be construed to have retrospective operation so as to affect the rights of parties in pending suits. , J. also refers to the same principle and explains the decision of the judicial Committee in v, Mst. (1936) L.R.63 I.A.47 : I.L.R.(1936) 15 Pat.268 : 43 L.W.336 (P.C.) : 70 M.L.J.105 : A.I.R.1936 P.C.49. ", "The learned Judge further observed that the Order itself is only for a short duration and if and when it is repealed or it expires without being renewed, the previous decree of will have to be executed by the civil court as in ordinary cases. In the result, the learned Judge allowed the civil miscellaneous second appeal. ", "8. As against the decision of J. on leave being granted by the learned Judge, a Letters Patent Appeal was preferred and the matter came up before and , JJ. in (1949)1 M.L.J.37.6 : A.I.R.1949 Mad.809. The learned Judges adverted to the fact that execution proceedings were filed long after the amendment came into force and that they are not concerned with the applicability of the new law to pending proceedings. The contention before the Bench was that the moment a person files a suit, he obtains thereby a vested right to have applied not only to the suit, but to all execution proceedings also, the law relating to execution as it existed at the time of filing the suit. The Bench repelled the said contention, observing as follows: ", "We know of no such principle; and we find no reason to think from the cases that have been cited before us that if a new law is introduced restricting the right to execute, execution proceedings can nevertheless be instituted if such a right existed on the date of the filing of the suit. ", "The Bench was not prepared to follow the Judgment of , J. in the United Province v. Mt. Atica 'Begum (1940) F.C.R.110 : 53 L.W.397 in which a reference was made to certain English cases interpreting British statutes said to be similar to the statute under consideration, and the learned Judges declared that they have not seen those decisions of statutes and they are not at all convinced that any such general principle exists. The learned Judges also referred to the Judgment of , J. in v. (1945)1 M.L.J. 441 : 58 L.W,527 : A.I.R.1945 Mad.386 and after adverting to the passage in the judgment of , (supra), opined that , J. far from thinking that a landlord had, by the institution of the application for possession in acquired an absolute right to physical possession, contemplated proceedings before the Rent Controller in which it would be contended by the tenant that in view of the new legislation actual possession could not be given. The learned Judges allowed the Letters Patent Appeal and set aside the pronouncement of J. in v. (1948)2 \" M.L.J.359 : 61 L.W.639 : A.I.R.1949 Mad.367. ", "9. (1949)1 M.L.J.452 : I.L.R. (1950) Mad. 152 : 63 L.W.1059 : A.I.R.1949 Mad.765 a Bench of this Court, consisting of , and , J. was concerned with a suit filed by the landlord for eviction of the tenant from the building, which suit was thrown out by the first Court, following the pronouncement of , J. in . (1949)1 M.L.J,44 : A.I.R.1945 Mad.181 on the ground the provisions of the Madras Non-Residential Buildings Rent Control Order (1942) prohibited the institution of a suit for possession. However, on appeal, the lower appellate court following certain decisions of this Court subsequent to the pronouncement of , J. referred to above, held that the suit was maintainable and passed an order of remand to the first Court. This order of remand was put in issue in a civil miscellaneous appeal before the Bench. The Bench expressed the view that the eviction could only be in accordance with the provisions of the Rent Control Order, there was no prohibition regarding institution and passing of a decree by , the civil court which passed the decree might not have jurisdiction to execute the decree for possession and the decree for eviction cannot be executed for some time, during the continuance of the Rent Control Order, Dissenting from the view of , J. in (1945)1\" M.L.J.44 : A.I.R.1945 Mad.181 the Bench summed up the proposition by stating that the jurisdiction of a civil court to entertain and pass a decree in a suit for eviction by the landlord against the tenant was not expressly or impliedly taken away by the provisions of the Rent Control Order and in this view, the Bench dismissed the civil miscellaneous appeal before it. ", "10. In v. , P.N. Ramaswami, J. following the earlier pronouncements in In re. V.R.R. Sami Ayyer,' (1946)1 M.L.J.134 A.I.R.1946 Mad.321 and (1949)1 M.L.J.452 observed as follows: ", "It is now well settled that a decree in ejectment can be passed by and all that the Madras Buildings (Lease and Rent Control) Act ensures is that during the subsistence of that Act, cannot execute the decree, but the landlord will have to take appropriate steps under the provisions of the said Act. There is no taking away of the jurisdiction of but only an imposition of restrictions in regard to the mode of execution. ", "11. . , C.J. and , J. dealt with the case of a decree on compromise passed in a suit instituted by the landlord against the tenant for recovery of possession of the property. The compromise decree was passed on 15th March, 1954. The order for delivery was made in execution on 12th April, 1954 directing delivery by 10th June, 1954. As against this order, there was an appeal and the order of delivery was stayed ex parte on 15th April, 1954. On 27th May, 1954, the landlord decree-holder died. On 8th July, 1954, the appeal was dismissed, upholding the order of delivery and the appellate court apparently taking the view that Section 7 of the Madras Buildings (Lease and Rent Control) Act would not make the original order for possession ipso factc invalid. but it might be that the Judgment debtor could object to actual eviction in pursuance of the order. On 12th July, 1954 the tenant applied for stay of execution. It must be pointed out that earlier on 16th June, 1954 the Rent Control Act got extended to the village where the property was situated. The legal representative of the deceased landlord decree-holder filed ah application also on 12th July, 1954 to be added as a legal representative and praying for an order directing delivery of possession. This was admittedly done after the Rent Control Act was made applicable to the village in question. ", "12. The ground taken by the tenant was that the Rent Control Act having been extended to the village in which the property was situated on and from 16th June, 1954, the legal representative of the landlord/decree-holder could not evict him. The District Munsif overruled the objection of the tenant and brought the legal representative of the landlord/decree--holder on record and passed an order for delivery of possession to the legal representative. Against this order of the District Munsif, the tenant filed an appeal, which was heard and disposed of by the Subordinate Judge, who dismissed the appeal on the ground that Section 7 of the Act could not apply to pending execution proceedings, that is to say, the prior execution petition wherein an order for eviction had already been passed. Against this order, the tenant preferred an appeal to this Court, which came up for decision before , J. The learned Judge' held that Section 7 of the Act did apply and was a complete answer to the claim of the legal representative of the landlord/decree-holder to evict the tenant and hence the appeal was allowed and the execution petition filed by the legal representative of the landlord/decree-holder was dismissed. However, on leave being granted by he learned single Judge, a Letters Patent Appeal came up before the Bench. The Bench found as per the facts above that though there was an order of eviction in a prior execution petition, the tenant could not be evicted in pursuance of that order and that was why the subsequent execution petition was filed on 12th July, 1954 and it was filed after the Rent Control Act had come into operation in the village in which the property was situated. Referring to the decision in (1949)1 M.L.J.376 : A.I.R.1949 Mad.809 the Bench observed as follows: ", "It was contended before that the moment a person files a suit, he obtains thereby a vested right to have applied not only to the suit, but to all execution proceedings also, the law relating to execution as it existed at the time of filing the suit. The learned Judges had no difficulty in rejecting this contention as they were not aware of any such principles. They found no reason to think that, if a new law is introduced restricting the right to execute, execution proceedings can nevertheless be instituted if such a right existed on the date of the filing of the suit . . . . ", "No doubt there is a reference to pending proceedings in one part of the judgment, but it was not necessary to deal with the point because they held that during the interval between the passing of the decree and the filing of the execution petition, there was no pending proceeding. The basis of the decision is certainly against the view that Clause 8 would not affect pending proceedings.... ", "Referring to the observations of , J. in v. (1945)1 M.L.J.441 : A.I.R.1945 Mad. 386 extracted supra, the Bench expressed the view as follows: ", "We must confess we are not able to fully appreciate the scope of these observations. ", "Ultimately the Bench countenanced the principle that the executing is bound to apply the provisions in the statute, which had come into force even before the date of the execution petition; which it was called upon to dispose. The Bench also took note of the fact that it was not a case where during the pendency of an already filed execution petition, the Rent Control Act came to be extended to the village in question and by the time of the filing of the concerned execution petition, the Act had already come into force. ", "13. dealt with a case where possession was delivered to the landlord from the tenant of a building even though the provisions of Mysore House Rent and Accommodation Control Order (1948) was in operation on that date. The language of Section 9(1) of the Mysore House Rent and Accommodation Control Order (1948) was more or less similar to Section 10(1) of the Act, when it stated that a tenant in possession of a house shall not be evicted therefrom whether in execution of a decree or otherwise except in accordance with the provisions of that clause. Section 16 of the Mysore House Rent and Accommodation Control Order (1948) while giving liberty to the landlord to file a suit for eviction of a tenant before a competent provided that no decree for eviction of a tenant passed by a shall be executed unless a certificate to that effect is obtained from the Controller. referring to the contention that ignoring the above provisions is no more than an error in the exercise of jurisdiction, observed as follows: ", "The contention raised that ignoring Sections 9(1) and 16 of the 1948 House Rent Control Order is no more than an error in the exercise of jurisdiction does not appear to be sound because those sections are a fetter on the executability of the decree and not merely an error in the exercise of the jurisdiction. In the present case the two sections mentioned above were a restriction on the power of the to execute the decree and therefore this argument must also be rejected. ", " confirmed the view of that the executing Court had no jurisdiction to order the eviction of a tenant because of the provisions of the Mysore House Rent and Accommodation Control Order (1948), which was in operation on the date of eviction. ", "14. dealt with a notification issued under Section 3 of the Punjab Urban Rent Restriction Act, 1949. To appreciate the ratio enunciated by in the context of the said notification, it is better that the said notification stands extracted in this order also. ", "In exercise of the powers conferred by Section 3 of the Punjab Urban Rent Restriction Act, 1949 and all other powers enabling him in this behalf, the Governor of Punjab is pleased to direct that the provisions of Section 13 of the said Act shall not apply in respect of decrees for ejectment of tenants in possession of buildings which satisfy the following conditions, namely: ", "(a) Buildings constructed during the years 1959, 1960, 1961, 1962 and 1963 are exempted from all the provisions of the said Act for a period of five years to be calculated from the dates of their completion, and. ", "(b) During the aforesaid period of exemption suits for ejectment of tenants in possession of those buildings were or are instituted in civil courts by the landlords against the tenants and decrees of ejectment were or are passed. ", "Section 13(1) of the Punjab Act stated that a tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of the Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of that section. The building in that case was completed in March, 1960 and the suit was filed on 14th January, 1963. However the decree for ejectment was obtained on 14th August, 1969. On 29th August, 1969 execution was levied, which was dismissed on the ground that the notification of exemption could not apply. in second appeal held that the decree was executable. upheld this decision of . In that case, the suit, as stated above, was filed before the lapse of the period of exemption though the decree came to be passed after such lapse. It was contended before that the decree having been passed after the lapse of the period of exemption, the exemption from the restrictions placed by Section 13 will not be available because not only the suit ought to have been filed, but the decree for eviction ought to have been obtained within the period of exemption. pointed out that this contention on the face of it would lead to incongruity, or would it accepted have the effect of nullifying the very purpose for which the exemption was being given. The language of the notification was clear and what was exempted was the decree for ejectment of a tenant from the application of Section 13 . Clause (b) of the notification prescribed a time during which a suit in which a decree could be passed should be filed. The decree passed in such suits were held by to be executable free from the fetters imposed by Section 13 . It was pointed out that the filing of the suit by itself did not confer any exemption because what was exempted from the provisions of Section 13 was the decree. took note of the fact that the buildings constructed in 1959, 1960, 1961, 1962 and 1963 had already been exempted from the provisions of Section 13 by two earlier notifications and found that the notifications granted exemption to decrees in suits filed within the period of exemption though the decrees came to be passed after the lapse of such period. ", "15. I must straightway point out that the language of Section 30(1) of the Act is different and its intendment is also different. It merely states that nothing in the Act shall apply to any building for a period of five years from the date on which the construction is completed and notified to local authority concerned. It does not speak about the institution of a suit or the obtaining of a decree in such a suit as in the case dealt with by in Firm v, . As I have initially pointed out, Section 30(1) merely postpones the application of the Act to newly constructed buildings for a period of five years, on the lapse of which the Act would apply to such buildings. This is the simple and apparent implication of the provision in Section 30(1) of the Act. As to what would be the implications and impact of the coming into force of the Act in respect of such buildings, I shall presently advert to, after completing my discussion of the case law on the subject. ", "16. In v. , Appeal No. 518 of 1973, Judgment dated 12th February, 1974 (1974)1 M.L.J.16 (S.N.) a of this Court, consisting of . dealt with a case where during the pendency of an appeal against a decree for ejectment, Section 30 of the Act was amended, limiting the exemption for new buildings for a period of five years only, in contract to the earlier permanent exemption of buildings constructed after the Act, and on the ground that the period of five years had lapsed, it was pleaded before the that the decree ought to be set aside. The learned Judge held, following the earlier pronouncements in (1949)1 M.L.J.376 : A.I.R.1949 Mad.809, (1949)1 M.L.J.452 : A.I.R.1949 Mad.765 and that the provisions of the Act do not prevent from passing a decree for possession though it might not be possible to execute the same in view of the specific provisions contained in the Act, which enables a Controller to pass an order of eviction only on stated grounds. The learned Judges felt that it was unnecessary to go into the question of executability of the decree since, the validity of the decree is one thing and its executablity is another and the court while passing the decree is not concerned with the executability. Leaving open the question of executability of the decree to the execution proceedings, the learned Judges affirmed the decree for ejectment. ", "17. In v. (1977) T.N.L.J.69 Ismail, J. (as he then was), dealt with a case where a decree was passed prior to the amendment to Section 30 of the Act and taking advantage of the amendment limiting the period of exemption to new buildings only for a period of five years, it was contended that the decree stood nullified. This contention was repelled by the learned Judge holding that the decree was validily passed, following the pronouncement of the Bench in v. (1974)1 M.L.J.16 (S.N.). The learned Judge also pointed out that It is one thing to hold that the decree passed by the Courts below was validly passed with jurisdiction and it is another thing to say whether the said decree can be executed or not, in view of the particular provision of the Act. ", "18. . dealt with a case where a decree was obtained prior to the amendment of Section 30 of the Act by virtue of which the Act became applicable to the building. The tenant contended before the executing Court that the decree for eviction cannot be executed. This objection was rejected by the executing Court and that view was confirmed by the lower appellate court. The view taken by the two courts below was challenged in appeal before the learned Judge and the learned Judge following the pronouncement of the Bench in held that the decree even though valid is not executable so long as the provisions of the Act continue to apply to the building.... ", "19. In v. dealt with a case where a suit for ejectment was filed taking advantage of Clause (iii) of Section 30 of the Act prior to the amendment in 1964, which provided that nothing contained in the Act would, apply to any non-residential building, the rental value of which on the date of the commencement of the Act as entered in the property tax assessment book of the municipal council, district board, panchayat or panchayat union council or exceeded Rs. 400 per mensem. Pending the suit, an amendment was introduced by virtue of which Clause (iii) of Section 30 was omitted, and further Section 3 of the Amendment Act provided that all proceedings instituted on the ground of exemption by virtue of Clause (iii) (deleted) shall abate. held that the suit will abate even if there was no express allegation in the plaint to the effect that the suit was instituted on the ground that the building was exempted under Clause (iii) of Section 30 of the Act and the Act as such could apply to the building in question and the tenant became a statutory tenant and he could not be evicted, except in accordance with the provisions of the Act.... ", "20. (1980)93 L.W. 202 , J. dealt with a case where execution of a decree for. ejectment came to be levied after the Pondicherry Buildings (Lease and Rent Control) Act (1969) came into force. The decree in the first was obtained on 31st May, 1972, and the first appeal was dismissed on 17th November, 1973. The second appeal was dismissed by this on 7th November, 1977. The Pondicherry Act had come to be enforced to the area in question on 17th October, 1972. A contention that the suit itself was barred and the civil had no jurisdiction to pass a decree In ejectment was negatived by this in second appeal, and the question as to whether reliance could be placed on the provisions of the Pondicherry Act was left open to the stage of execution of the decree. When the question was raised in execution, the tenant could not succeed and the executing held that the decree was one passed before the enforcement of the Act to the area in question, and that was no bar to the executability of the decree. On revision, , J. after adverting to the pronouncement of the Bench of this in and of the Supreme in held that the Pondicherry Act had come into force to the area in question long prior to the filing of the execution petition and at the time when the execution petition came to be dealt with by the executing , the bar against eviction of tenants except in accordance with the provisions of the Pondicherry Act had come into force and hence the decree in ejectment was not executable. ", "21. (1980)2 M.L.463 S. , J, was concerned with a suit for ejectment where a decree was obtained and both the first appeal and the second appeal were dismissed. However, during the pendency of the first appeal, the Act was made applicable to the town where the building was situated, and the tenant filed an application in the first court for a declaration that the decree cannot be executed. The first court dismissed the application, and on revision, S. , after adverting to the case law on the subject, held that though the decree is not null and void, yet a declaration regarding its non-executability can be given. The learned Judge observed in paragraph 6 of the Judgment as follows: ", "The resultant position therefore, is that the filing of a suit for recovery of possession of a property from a tenant or the passing of a decree therein by the in favour of the landlord, is not prohibited under the Act. But the decree cannot be executed so long as the Act remains in force. ", "22. . dealt with a case where the building was constructed in March, 1975. The suit for recovery of possession by the landlord against the tenant was filed on 4th January, 1980 when the five year period under Section 30(1) of the Act had not yet lapsed. On 28th January, 1981, the suit was decreed. On 9th November, 1981 the appeal was dismissed. On 6th January, 1982 the execution petition was filed and on 19th January, 1982 an order for delivery by 30th January, 1982 was made. However, delivery could not be effected since the building was found locked. On 30th January, 1982 the tenant filed an application that the decree is not executable, and the order of delivery obtained by the landlord was erroneous. That application was dismissed by the first court and the matter came before the learned judge by way of a revision. The learned Judge has opined that the institution of the suit before the expiry of the period of exemption would suffice the purpose and the lapse of the period by the time the decree or order in the proceedings is passed and further proceedings are taken thereafter to realise the benefits thereof, would not take away the benefit of the decree or order so obtained. The learned Judge has expressed his views in the following terms: ", "Where a new building is constructed and the construction thereof is notified to the local authority, the building would be exempt from the operation of the provisions of the Act for a period of five years therefrom. During this period of five years, if no proceedings are initiated, then the exemption will lapse on the expiry of the period of five years. But on the other hand, if within the period of five years proceedings are taken based on the exemption then even though by the time the decree or order in the proceedings is passed and further proceedings are taken thereafter to realise the benefits thereof, the five years period had lapsed, nevertheless, the benefit of the decree or order so obtained would be available to the party, who secured it. ", "*** The irremovability of the tenant from the premises in his occupation despite a decree except in accordance with an order under Section 10 or 14 to 16 of the Act, lost as a result of the exemption under Section 30(1) of the Act is not restored statutorily in a case where the decree or order is passed after the expiry of five years or the execution is levied after that period. It cannot therefore be readily assumed that in such cases the benefit of exemption or the fruits of the proceedings based on such exemption are totally lost to the party for whose benefit also the exemption was granted. ", "The learned Judge felt that the decision of in Firm A mar would lend support to his view that the exemption would operate not only to the building, but also to the decree obtained in respect of the building. ", "23. was concerned with Section 2(2) of U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act , 1972, which provided that nothing in the U.P. Act shall apply to a building during the period of ten years from the date on which its construction is completed. There the landlord filed a suit for eviction and for other reliefs on the ground that the period of ten years had not lapsed on the date of suit. The tenant contended that the period of ten years had lapsed and the Act would apply. held that the exemption would apply and the Act would not apply and decreed the suit. On revision, found that the building was not ten years old on the date of the suit and hence the Act would not apply, and that the tenant cannot get any protection. confirmed all the findings except about the arrears of rent and remanded the matter to for determination of arrears. The only point argued before on a special leave petition was whether the premises, which was not ten years old on the date of the suit and was exempted from the operation of the U.P. Act could be governed by it if ten years expired during the pendency of the litigation. A contention was put forth that the had to decide the case on the basis of cause of action that had accrued prior to the filing of the suit and not on a new cause of action. The Supreme , after adverting to its pronouncement in held that the benefit of the U.P. Act could be given to the tenant when the Act became applicable to the premises in question during the pendency of the litigation. The Supreme ruled out that the moment the building becomes ten years old to be reckoned from the date of completion, the U.P. Act would become applicable for the purpose of enabling the tenant to work out the rights under it. While setting aside the order of relating to eviction, the case was sent back to the first court for it to apply the U.P. Act and to give the protection of the said Act to the tenant. ", "24. The discussion of the case law, which has preceded and my assessment thereof, oblige me to take note of the following indisputable propositions; ", "(1) The Act as such does not oust the jurisdiction of to entertain a suit for eviction by a landlord against a tenant and the passing of a decree in such a suit. ", "(2) If the landlord succeeds in obtaining a decree for eviction in such a suit, that cannot be put into execution to evict the tenant and the eviction could be only in accordance with the provisions of the Act, so long as the Act applies to the building in question. ", "(3) The validity of a decree is one thing and executability is another thing. A decree validly passed would still be unexecutable on account of the law that is prevailing or which comes into force at the relevant point of time. The above three propositions are well-settled and well recognised ones as per the pronouncements of the Benches of this Court referred to above, (4) The exemption under Section 30(1) of the Act postpones the application and the enforcement of the Act to the newly constructed buildings for a period of five years, on the lapse of which, the Act would apply. With or without the exemption, the maintainability of the suit and the obtaining of a decree in a suit before is not taken away by the Act. It is not as if only on account of the exemption or under its cover, the civil process could be resorted to. Resort to civil process never stands prohibited even under the Act; and only the eviction, otherwise than under the Act stands prohibited. On the lapse of the period under the exemption provision, the Act would become applicable and enforceable to the building and the eviction of the tenant could only be in accordance with the provisions of the Act. The moment the ' building completes the period of exemption, the Act would become applicable to the building. This is exactly the principle countenanced by in . ", "(5) The impact and the implications of the exemption cannot survive beyond the period of exemption. On grounds of equity, inconvenience and hardship, the Court is not supposed to stretch the scope of the exemption. The filing of the suit in during the period of exemption and the obtaining of a decree in such a suit even during or after the lapse of the period of exemption is of no consequence at all and if at the time the decree is put into execution to evict the tenant, the Act has intervened and come into force, that alone would govern. The courts are not concerned with the policy of the legislature or with the result, whether injurious or otherwise, by giving effect to the language used, nor is it the function of the Court where the meaning is clear act to give effect to it merely because it would lead to hardship. The. above rule was held to be an unexceptionable one in (6) The lapse of the period of exemption automatically makes the Act applicable to the building in question. If at the time when the actual eviction is sought for, the Act had become applicable to the building in question, the fact that the proceeding in which the decree was obtained, was filed during the period of exemption, is not a relevant factor because as already noted, neither the institution of the suit nor the obtaining of the decree before a civil court stands ousted by the Act, and only the eviction of the tenant stands circumscribed as per the provisions of the Act. The ruling of in is categoric when it countenanced that the moment the building becomes ten years old and thereby the period of exemption lapsed, the U.P. Act in that case, would become applicable. This categoric pronouncement of settles the law beyond any ambiguity. ", "(7) A doubt was expressed in the earlier pronouncements of this Court as to whether, if execution had already been levied pursuant to a decree obtained prior to the coming into force of the Act, and such execution petition was pending at the time of the coming into force of the Act, such pending proceedings could be affected - (1949)1 M.L.J.376 : A.I.R.1949 Mad.809 and in the latest judgment in has applied the law which came into operation during the pendency of the litigation. In the present case, I am not called upon to decide this question specifically because it does not arise on facts. ", "25. The facts of the present case disclose that at the time when the execution came to be levied, the period of exemption under Section 30(1) of the Act had lapsed. The result is, the Act had become applicable to the building in question. If that is so, applying the ratio of in , the eviction of the defendant cannot but only be in accordance with the provisions of the Act; and admittedly the process of the Act has not yet been resorted to, to evict the defendant. In this view, this revision requires allowing and accordingly the same is allowed. I make no order as to costs. It is up to the defendant/the petitioner herein, to work out his rights on the basis of this order, if in fact, he had been dispossessed as claimed by the plaintiff. Obviously the pronouncement of referred to above was not rendered at the time , J. expressed his views in the decision in . The pronouncements of Benches of this Court and the latest pronouncement of have got to be followed and applied to the facts of the present case, and I have done it while allowing this revision. ", "ORDER ", "1. After this order was pronounced, Mr. , learned Counsel for the plaintiff, wants that restitution pursuant to this order may stand postponed for a reasonable time. Taking cognizance of this request, I direct that initiation of restitution proceedings which the defendant/the petitioner herein, may resort to, will stand postponed for a period of four weeks from today."], "relevant_candidates": ["0000101302", "0000153131", "0000252896", "0000461959", "0000498347", "0001050590", "0001169813", "0001201177", "0001732740"]} {"id": "0001737987", "text": [", Senior Vice-President ", "1. The facts of this case, which are not in dispute, as taken from the appeal are set out below :- ", "1. \"M/s. Parmali Wallace Ltd., Bhopal (hereinafter called the respondents) are manufacturers of among other goods, Wood-based and articles thereof falling under Tariff Item 16(B) of Central Excise Tariff, prior to 28-2-1982 the Wood-based and articles thereof were classifiable under the residuary head of he goods not elsewhere specified i.e. Tariff Item 68 of C.E.T. and chargeatble to duty of excise accordingly. The tariff structure of Tariff Item 16B was revised w.e.f. 28-2-1982 vide Finance Bill, 1982, so as to cover the wood-based and articles thereof within its scope. Accordingly the goods viz. Wood-based and articles thereof manufactured by the respondents have become classifiable under the new structured Tariff Item 16B of the C.E.T. w.e.f. 28-2-1982 and liable to duty of excise at the appropriate rate. ", "1.2. Due to above change in Tariff classification, Respondents, submitted an application in form AL 4 for the issue of licence in form L4 for manufacture of excisable goods falling under Tariff Item 16B of Central Excise Tariff. The respondents also filed a classification list in respect of the said goods claiming its approval w.e.f. 28-2-1982, classifying and articles thereof under Tariff Item 16B of C.E.T. with effective Basic Excise duty at the rate of 20% ad valorem. Simultaneously, they filed another classification list claiming approval of basic excise duty at the rate of 8% ad valorem under Tariff Item 68 of C.E.T. on pre-budget stock of and articles thereof. The Superintendent Central Excise, , having jurisdiction over the factory of respondents, however, rejected the respondents' claim, as inadmissible in terms of the provisions of Rule 9A of Central Excise Rules, 1944, which stipulates inter alia that in such cases the rate of duty and tariff valuation, if any, applicable to any excisable goods shall be the rate and valuation in force on the date on which duty is paid, which is apparently the date on which the clearances of goods are effected.\" ", "2. Against the above order of the Superintendent, the respondents went in appeal to the Collector of Appeals), New Delhi. The Collector allowed the appeal with the following observations :- ", "\"It is clear that the pre-budget stock of goods, which can be segregated and shown separately is liable to duty only under tariff head 68 of C.E.T. and not under 16-B into which the goods fall only with the introduction of the Finance Bill. Excise being a levy on manufacture and not on removal as has been held by the Courts including and the correct tariff heading under which the pre-budget stock should have been classified happens to be Item 68 and not Item 16-B. The order of the Superintendent is, therefore, liable to be quashed.\" ", "It is against this order that the Collector of , Indore has come up in appeal to the Tribunal. ", "3. A large number of authorities were cited by the learned representatives of both sides. Most of them were with reference to the interpretation of Section 3 of the Central Excises and Salt Act and Rule 9A of the Central Excise Rules. Some were with reference to the similar provisions in Section 15 of the Customs Act. A few were with reference to other enactments. Most of the judgments were only listed and not referred to in detail. In this order we shall refer only to such of the judgments as were actually gone into or can be said to be directly relevant to the issue before us. ", "4. The arguments of , the learned representative of the Collector, were basically with reference to the interpretation of Rule 9A of the Central Excise Rules. He submitted that in the Order-in-Original of the Superintendent, reliance had been placed on the above Rule\". However, in the order of the Collector (Appeals) there was no reference to the Rule] and it had been by-passed on general considerations, resulting in a wrong decision. ", "5. referred to the definition of \"excisable goods\" in para (d) under Section 2 of the Central Excises and Salt Act . That expression is defined as meaning \"goods specified in the First Schedule as being subject to a duty of excise ...\". According to him inclusion in the First Schedule with a rate of duty brought the goods within the scope of this definition. Admittedly the goods in this case were excisable goods both before and after introduction of the 1982 Finance Bill. The only difference was that immediately on the introduction of the Bill, together with the invocation of the Provisional Collection of Taxes Act , the excisable goods were specified under a different entry of the Schedule. ", "6. submitted that in some of the authorities reference had been made to the point of time when the goods came into existence. He submitted that the only reference which he had been able to find in the Act or in the Rules to \"coming into existence\" was in the proviso to Sub-rule (2) of Rule 224. That Rule imposed certain restrictions on the removal of goods beyond office hours, and also on the day of introduction of a Finance Bill or similar legislation. Even in this case, where \"pre-budget\" stocks were allowed to be removed with the permission of , the applicant had to undertake to pay duty at the enhanced rate applicable in terms of the Finance Bill. ", "7. therefore submitted that if excise duty was interpreted as a tax on manufacture, and this in turn was interpreted with reference to the date of the manufacture being complete, there would be no need for the provisions of Rule 9A, relating the rate of duty to different dates dependant on different sets of circumstances. No doubt Sub-section (1) of Section 3 of the Act stated that \"there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India ...\" If, however, this was interpreted to mean that the late of duty was fixed immediately the manufacture was completed, then Rule 9A would have to be taken as either ineffective or inconsistent with the provisions of Section 3 . He submitted that we should not adopt an interpretation of either the Section or the Rule which would lead to the above result. ", "8. referred to the recent judgment of in the case of v . 1984 (17) E.L.T. 217, delivered on 16-7-1984. This being a recent judgment which took into account a number of earlier judgments, no doubt, carried considerable weight. In this case had held as follows (para 26) : - ", "\"We unhesitatingly hold that the excise duty would arise the moment the manufacture or production of the commodity is complete irrespective of the fact that the assessment and collection is postponed to a later point of time when the said commodity is cleared or removed : the incidence for the impost being the manufacture or production of goods. If that be so, the petitioners are entitled to have the benefit of the exemption notification and so, the refund of the excess duty paid.\" ", " submitted that even in this judgment Rule 9A had no been struck down but only \"by-passed\". Therefore, that Rule was still before us, and it was open to us to take a view regarding its interpretation, in th light of other relevant judgments. ", "9. submitted that no doubt excise duty was a (sic) on manufacture. This, however, was a constitutional concept, derived from th provisions of the Seventh Schedule to the Constitution. For actual assessment of duty, the terms of the statute itself, namely the Central Excises an- Salt Act , would have to be taken into account. In terms of the statute-whether the Central Excises and Salt Act itself or the Rules framed there under-it was not permissible to apply for the purpose of assessment a Tari Item or a notification which was not in existence (or in existence in a amended form). further submitted that if Rule 9 were to be ignored, on the ground that the necessary provision was incoporate in Section 3 there would be left no provision to determine the rate of (sic) in the varying circumstances set out in that Rule. ", "10. submitted that under Section 3(1) , the aspect relevant for levying and collecting excise duties were (a) whether they (sic) excisable goods, (b) whether they were produced or manufactured in India and (c) what was the relevant rate in the First Schedule. The point of (sic) for determination of the rate of duty came only at the time of removal (sic) the goods. Section 3 of the Act did not contain a time element, which was provided by Rule 9A, framed under the Act. The Rule could not be considered as repugnant to Section 3 . Linking the rate of duty to the time of removal, would not make the tax a tax on removal. There was a clear next between the production and the removal of goods. At the time of removal the tariff item applicable would be that in force at that time. ", "11. From the economic angle, submitted that good which were cleared at a particular point of time should bear the same rate of duty, and this could be achieved only through Rule 9A. ", "12. The respondents had argued (as seen from para 2 of the Order-in-Appeal) that the order of the Superintendent was faulty because according to them it would make the action of the provisions of the Finance B retrospective. According to him this was not correct, as the application the provisions of the Bill at the time of removal of the goods did not amount giving retrospective effect. ", "13. submitted that in the Andhra Pradesh if judgment in the case of , the case was one where B exemption notification was rescinded (as seen from para 3 of the judgment This was not the case in the matter before us. It had been held in para 18 in the judgment that the answer to the question which fell for determination that case was found in Section 3 and not in any other Section or Rule including Rule 9A. He submitted that these observations did not take in account the pivotal role of Rule 9A. Section 3 of the Act laid down the duties of excise should be collected \"in such manner as may be prescribed This clause qualified both the levy and the collection of duty. Therefore while the \"contours of assessment and production\" were to be within t! frame work of Section 3 , the manner of levy and collection could legitimate be governed by rules in pursuance of that section. In this connection She. Raghavan Iyer referred to para 13 of the judgment of the Hon'ble Supreme in the case of . (1983 E.L.T. 1896 S.C.), where it had been observed that \"it is apparent therefore, that when enacting a measure to serve as a standard for assessing the levy the legislature need not contour it along lines which spell out the character of the levy itself\". Earlier, in para 12 of the judgment the Supreme had referred with approval to the observations of the Federal in the (1978 E.L.T. J 272) : ", "\"There is in theory nothing to prevent from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, destroyed, or given away. A taxing authority will not ordinarily impose such a duty, because it is much more convenient administratively to collect the duty (as in the case of most of the Indian Excise Acts) when the commodity leaves the factory for the first time, and also because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, for example, been destroyed in the factory itself. It is the fact of manufacture which attracts the duty, even though it may be collected later.\" ", "In para 12, it had been pointed out that while the levy of excise duty in our country has the status of a constitutional concept, the point of collection is located where the statute declares it will be. ", "14. submitted that the observations of in the case of had to be read in the light of the position set out in the judgment above. The observation of in para 19 of the judgment that the provisions of that Rule laid down the mode and manner of assessment did not take due account of the fact that these aspects were covered by Rule 52 and that Rule 9A was confined to fixing the rate of duty. ", "15. then referred to the judgment of in the case of . (1978 E.L.T. 33). That was a case where there was initially a total exemption from duty on power-driven pumps subject to certain conditions. The total exemption was modified with effect from 17-3-1972 and a concessional rate of duty made applicable. In that case it had been held that the goods which had been manufactured during the duty-free period were not liable for payment of duty at all. In that case there had been an appeal to , which had been \"dismissed on merits\". submitted that there was a clear distinction between that case and the present case where the goods were dutiable both before and after the date of introduction of the Finance Bill. ", "16. also submitted that there were a number of judicial decisions with reference to the parallel provisions of Section 15 of the Customs Act, 1962, in which the view had been taken that the rate of duty would depend not on the date of importation (corresponding to the date of manufacture in the case of excisable goods) but in the manner specified in Section 15 (corresponding to Rule 9A in the case of excisable goods). The application of the principle followed in those judgments would lead to the conclusion that Rule 9A should be applied for determining the rate of Central Excise duty, and would also lead to consistency in approach with reference to the two important indirect taxes. referred to the judgment of delivered on 16-10-1984 in the case of , wherein it had been held that the rates applicable were those in force on the date on which they were determined in terms of Section 15 , Customs Act , and that there was no substance in the contention that the rates had been applied retrospectively. ", "17. When , the learned advocate for the respondents, started his reply, the Bench suggested to him that there were two relevant aspects which he might deal with in the course of his arguments. One was the effect of the provisions of the Provisional Collection of Taxes Act , 1931, in a case like the one under consideration. The other was the view taken in a number of cases relating to Section 15 of the Customs Act, as for instance the judgment of in the case of AIR 1979 S.C. 675 . ", "18. commenced his reply by referring to the provisions of Section 3 of the Central Excises and Salt Act . Sub-section (1) of this Section delegated only the manner of the levy and collection of duties of excise, the power to impose a duty being only with . No doubt, Rule 9A laid down the manner in which duty should be collected. clarified that it was not his case that Rule 9A was not applicable here. Sub-rule (1) was obviously applicable. However, his submission was that on a true interpretation of this sub-rule, what it governed was only the rate of duty (the question of tariff valuation would not arise in this case) and not the classification of the goods based on their description. In other words, it was the description of the goods at the time of completion of manufacture which would determine their classification, in the light of the Tariff in force at that point of time. If between the date of manufacture and the date of removal there was a change in the rate of duty with reference to the classification which had already been determined, the revised rate would be applicable at the time of removal. However, if there was a change in the classification, such a change could not, in view of the wording of the Rule, be applied at the time of removal of the goods. ", "19. placed reliance on the very extensive discussion contained in the advisory opinion of in AIR 1963 S.C. 1960 (in re Sea Customs Act). He particularly referred to paras 24 and 25 of that opinion at pages 1775 and 1776 wherein it was laid down that the taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. Therefore, one would have to see under what entry any particular excisable goods fell at the time of manufacture. It was only which could vary the description of the goods, and not by invoking any rules. Even assuming that Section 3 of the Act gave certain powers to in this regard. Rule 9A as it stood did not refer to the tariff description of the goods but only to the rate of duty. ", "20. submitted that if Rule 9A were to be interpreted in the manner advocated by , anomalous and inequitable results would follow. Thus, under Rule 53, a manufacturer is required to maintain a daily stock account in a prescribed form (known as the R.G. 1). Sine? this is written up from day-to-day, the entries would be in accordance with the Tariff description as in force at the time of manufacture. If it were held that a different Tariff description would be applicable to the goods because of a change subsequent to the completion of manufacture, it would mean that the accounts properly maintained would stand falsified and an innocent manufacturer would be liable to penal action. Such a result surely could not be intended. ", "21. had referred to the provisions of Rule 224. submitted that the object of this Rule was only to ensure that a proper account of the goods manufactured was kept, and it would not justify shifting of goods already manufactured from one entry 10 another. ", "22. thereafter submitted that no provision of an Act could given retrospective effect unless this was specifically provided for. In the present case, if Tariff Item 16-B as amended were applied at the time of removal, this would amount to giving retrospective effect, which was not permissible, in the absence of a specific provision in the Finance Bill. He referred in this connection to the judgment of in the case of , etc. (AIR 1968 S.C. 223). In para 6 of that judgment had quoted with approval the observations of that: ", "\"The general rule is that all statutes, other than those which are merely declaratory, or which relate only to matters of procedure or of evidence, are prima facie prospective and retrospective effect is not to be given to them unless, by express words or necessary implication, it appears that this was the intention of the legislature.\" ", "23. Shri also referred to the case of This elated to dyes derived from coal-tar which prior to the 1961 Budget were not excisable. In the Finance Bill of that year a new Item 14D was introduced, he Provisional Collection of Taxes Act being made applicable. There was a series of judgments in this case, the final one being that of , reported in 1980 CENCUS 242D. The question which had to decide, in pursuance of\" the order of demanding the matter to it, was whether the goods sought to be taxed under he new item were manufactured before or after the midnight of the 28th February, 1961. held that it was incumbent on the respondents () to establish that the goods in question were manufactured after the midnight of 2S-2-1961 and they had failed to do so in the result, the matter was decided in favour of the manufacturers and against the . This would also show that the taxable event was the ate of completion of manufacture. In coming to this conclusion had also taken into account a trade notice issued by the which said that \"goods will not be considered as fully manufactured unless at midnight of 28th February/1st March, 1961 they were ready for delivery\". While the controversy in that case was whether in fact the goods were ready 'or delivery, the trade noted also showed that had they been taken as fully manufactured, they would not have been sought to be taxed. This was also he view taken by . ", "24. Referring to the Provisional Collection of Taxes Act , which enables the provisions of the statute to be implemented even before it is passed into law, submitted that this was an exception to the general rule against the retrospectivity of statutes. Unless there was clearly a statutory (revision authorising retrospective application, it would not be legal to apply it thus. ", "25. referred to an article in the February 1982 issue of \"The Excise and Customs Reporter\", bearing the title \"Central Excise in Easy Lessons-Budget Day instructions\" (page 11C et seq). At para 6 of this article it was stated that \"unless otherwise stated in the Budget proposals, articles which become excisable for the first time on introduction of the Finance Bill will be only those articles which are in fully manufactured condition\". He submitted that judicial notice could be taken of this article, which might be regarded as a kind of contemporanea expositio. When it was pointed out by the Bench that this was apparently an article by some practitioner and not an official publication, submitted that we could still take notice of it. ", "26. , therefore, submitted that, in the view propounded by him, Rule 9A would get full effect. By the same Finance Bill the rate of duty under Item 68 was raised from 8% to 10%, and this increase would, no doubt, be applicable to the goods under consideration. However, the change in classification from Item 68 to Item I6-B would not apply to these goods. ", "27. It was pointed out to that in the relevant clauses of the Finance Bill and the Schedule, no distinction had been made between the description and the rate of duty, whether with reference to their provisional application or their final effect. submitted that the amendment only had the effect that whatever was henceforth manufactured and fell within the amended description in Item 16-B would be classifiable under that item. Whatever had already been manufactured and had attracted the charge of duty in terms of Section 3 would not be affected by the change in description. ", "28. The Bench drew the attention of to the judgment of in the case of . (1983 E.L.T. 285 (All.), on which reliance had been placed by . That case related to molasses, which was liable to duty under Item 68 before 1980, but by the Finance Bill of that year was brought under a specific item, namely 15CC. The position, therefore, would be identical in material respects to that in the present case. The Hon'ble Allahabad High Court had held that duty in accordance with the new item was leviable even on goods manufactured before the date of introduction of the Finance Bill. This decision would, therefore, appear to be against the view advanced by . On this submitted that had assumed that the taxable event was the date of removal and not the date of manufacture of the goods. He submitted that in view of the authorities cited by him, particularly the advisory opinion of (vide para 19 above), this assumption was not correct, and since the decision in that case was based on this assumption it was also not an authority to be followed. ", "29. Replying to , submitted that the provisions of the Provisional Collection of Taxes Act were clear. Section 3 of the Act referred to the introduction of a Bill which \"provides for the imposition or increase of a duty of customs or excise\". The substance of the provision was that there should be increase in the duty leviable on a particular article. The form through which the increase was effected, whether by directly modifying the rate of duty or by modifying the description with a resulting increase in the rate of duty, was not material. Any such change had to be given effect from the midnight of that day and this would not mount to giving retrospective effect. Since the goods had not as yet been taxed and were still in the hands of the manufacturer, assessment of those goods at the time of removal in accordance with the rate of duty then in force would not amount to retrospective application. ", "30. further submitted that even if it was assumed that the application of the amended rate of duty was retrospective in nature, this was still permissible by necessary implication, because Rule 9A clearly applied, and that Rule made no exception in the case of goods manufactured prior to the change. He cited the reference at page 63 of \"The Law of Central Excise (Second Edition) by and , to the case of v. Assistant Collector of Central Excise, wherein reference was made to a decision of . This was a case where vegetable non essential oils became excisable in 1956, a new item being introduced in the Finance Bill of that year, to which the Provisional Collection of Taxes Act was applied. The Court had held that the fact that the petitioner's goods were manufactured prior to 29-2-1956 was irrelevant and that the liability to duty attached the moment an item was included in the First Schedule to the Central Excises and Salt Act . ", "31. also referred to the judgment of in the case of . (1978 E.L.T. 680). in para 13 of the judgment it had been held that \"the point of time at which we have to see whether the goods were liable to duty would be thus the date of removal of the goods from the factory or warehouse and not the date of manufacture or production, for the date when the goods were sought to be removed from the factory or warehouse they were goods of the description mentioned in one of the items in the First Schedule as being subject to a duty of excise and were goods which were manufactured or produced in India they could not be removed unless duty at the rate set-forth in the First Schedule to the Act was paid\". This would also support his contention. ", "32. also referred to the judgment of in the case of .-(1978 E.L.T. (J 355)-ECR C 281 S.C.). At para 48 of the judgment there is a quotation from Halsbury's Laws of England to the effect that where the statute provides that subordinate legislation is to have effect as if enacted in the statute such legislation may be referred for the purpose of construing a provision in the statute itself. (Since there is no such provision in Section 38 of the Act, this argument is not very relevant). He submitted that Rule 9A in no way conflicts with Section 3 . ", "33. On argument based on Rule 53 (vide para 20 above), submitted that in the R.G 1 account only the physical description of the goods had to be entered, and not necessarily the tariff description. The physical description would not undergo change with a change in the tariff. The tariff description was required only with reference to the provisions of Rule 173B, relating to the filing of classification lists, and Sub-rule (4) of that Rule specifically provided for filing a fresh list or an amendment, when there was an amendment to the First Schedule whether it related to a change in the description or in the item or sub-item number. [ intervened to say that in the RG 1 account the rate of duty and the amount of duty had to be entered, as would be seen from Sub-rule (1) (g) of Rule 53]. ", "34. We have carefully considered the submissions from both sides on the very interesting question which has been raised in this appeal. The facts are not in dispute. The goods were excisable under [tern 68. at the time of completion of manufacture (referred to for convenience as \"(he time of manufacture\"), they were classifiable under Item 68 and were not exempt from duty; at the time of removal from the factory the goods were excisable, classifiable under Item 16B (as amended), and not exempt from duty. The question is whether their tariff classification for the purpose of levy and collection of duty should be determined by the tariff as it stood at the time of manufacture or as it stood at the time of removal. ", "35. As seen from what has been stated above, detailed arguments were addressed by both sides, and several authorities relied upon. We observe that there can be a number of different situations, based on two variables. One is the point of time, i.e. whether the time of completion of manufacture or the time of removal. The other variable is the nature of duty liability : whether not excisable, excisable but fully exempt and excisable but not exempt (goods partially exempt are considered as \"not exempt\"). The various judgments which were relied upon cover one or other of the situations which would arise from combinations of the two variables. Naturally, some of these are more frequent and more important than the others. The situations which are covered by the cases cited and are relevant to the present issue appear to be the following : ", "(i) Goods excisable but fully exempt at the time of manufacture, and excisable and not exempt at the time of removal ; ", "(ii) Goods excisable and not exempt at the time of manufacture, and excisable and not exempt at the time f r oval (there being only a variation in the quantum of exemption ", "(iii) Goods not excisable at the time of manufacture and excisable and not exempt at the time of removal; and ", "(iv) Goods excisable and not exempt at the time of manufacture and excisable (under a different tariff entry) and not exempt at the time of removal. ", "We shall now refer briefly to the cases relating to each of these situations and also to cases relating to the parallel provisions in Section 15 of the Customs Act. ", "36. The first situation is covered by the judgment of (sic) Madhya Pradesh High Court in the case of . (1978 E L.T. 33). This case has been referred to in para 1 5 above. (For convenience we are referring to this as \"the first judgment\" and to the subsequent judgment rejecting the petition for a certificate of fitness for leave to appeal to , and reported in 1978 E.L.T. 690 MP, as \"the second judgment\"). In the first judgment of held that the liability for tax, namely, the excise duty, would arise no sooner the manufacture or production is completed and it is immaterial as to what machinery may be devised by under the rule-making powers for recovery of a tax. The point of recovery or any restriction on removal will not be the determining factor for grant of exemption in respect of goods manufactured during the duty-free period. In that view, the contention of the manufacturers was upheld. A petition was made to the same of for a certificate of fitness for leave to appeal to . In the second judgment the said refused a certificate of fitness for leave to appeal to (1978 E.L.T. 690). Thereafter, an application for special leave was made to , of which the result was that \"dismissed the SLP on merits\". ", "37. The second situation was before the Hon'ble Madhya Pradesh in the case of , Ujjain v Union of India and Ors. 1982 E.L.T. 97 M.P. In that case, the goods were excisable throughout but there was a partial exemption at the time of manufacture, which was modified, so that a higher rate was prevailing on the date of removal. There was a change in the statutory rate also, but this does not affect the discussion). In that case, held that Rule 9A was valid and was rightly applied with reference to the rate of duty prevailing on the date of removal. The attention of was drawn to the decisions of the same and of in the case of Brothers to which reference has been made above. The distinguished the case before it from that of Brothers, in the following terms: ", "\"When an application for leave to appeal to was made, rejected the leave application by a speaking order which is reported as 690). It appears that at the time of hearing the leave application the attention of the was drawn to Rule 9-A and the decision of in -AIR 1967 S.C. 1564. After referring to them the observed : \"There can be no doubt that as laid down by their Lordships, the rate would be as existing at the time of removal\". The , however, made a distinction where duty was imposed for the first time after manufacture by saying : \"The question will be different where the charging section, namely, Section 3 of the Act is to be considered to ascertain as to at what point of time excise duty is payable when the impost is made for the first time.\" As in that case, the goods were wholly exempt on the date of manufacture, it was held that they would not be subjected to duty even though they were not exempt on the date of removal. Special leave was applied for by in that case which was refused. By order passed on 1st September, 1977, \"dismissed the on merits\". The learned counsel for the petitioner argues that the view taken by this in Brothers' case must be taken to have been approved by as the was dismissed on merits. The order of does not give any reasons. The words \"dismissed the on merits\" are too vague for declaration of any law under Article 141 of the Constitution. Moreover, as pointed out by us earlier, this when refusing leave to appeal to made a distinction and held Rule 9-A to be not applicable because the goods in that case were wholly exempt on the date of manufacture. In the 's opinion in that case, if goods are liable to excise duty both on the date of manufacture and on the date of removal, then only the rate of duty applicable would be that prevailing on the date of removal but if the goods are wholly exempt on the date of manufacture they would not be liable to excise duty even if before the date of removal the exemption is withdrawn. All that we need say here is that Brothers' case is distinguishable on facts and the decision in that case must be confined to its own facts. In the case before us, the goods were exigible to excise duty both on the date of manufacture and on the date of removal. They were never wholly exempt. The exemptions were only partial in that the rate of duty as fixed by Tariff Item No. 18 of the First Schedule was reduced from time to time by notifications issued under Rule 8. As the goods were never wholly exempt, Brothers' case has no application here.\" ", "38. A similar case was the subject of the decision of in the case of . 1984 (17) E.L.T. 217 AP (vide para 8 above). took into account the judgments of in the cases of and also . It held that the answer was to be found in Section 3 and not in Rule 9A and held that the petitioners were entitled to the benefit of the exemption notification as in force at the time of manufacture. The Court also, evidently with reference to the observations of in the case, observed as follows : ", "\"Likewise, the contention in regard to the dismissal of the on merits by passed on September 1, 1977 against the aforesaid judgment of in 's case, it should not be taken to be really a decision on merits, also merits no consideration, as it is fairly settled by now that when the records its order as dismissal on merits, it must be taken to have been a decision on merits.\" ", "39. The third situation has been covered by the judgment of in the case of of , referred to in para 30 above. In that case, although the goods were not excisable at the time of manufacture, it was held that they would be liable to duty as applicable at the time of removal. However, as against this, there is the case of (vide para 23 above). In that case, a new tariff item was introduced. Certain goods were sought to be assessed to duty by the authorities at the time of their removal (after the introduction of the new item). It was ultimately held by that it was incumbent on the excise authorities to establish that the goods were manufactured after the midnight of 28-2-1961 (that is, when the new item had become applicable) and that they had failed to do so, and accordingly the matter was decided in favour of the manufacturers. We have seen the judgment of 1978 E.L.T. (J 429) remanding the matter to . It is a brief judgment in which the stress is on the question whether the process of manufacture of the goods could have been said to have been completed before the midnight of the 28th February, 1961. Since the material on the record was not sufficient to enable to come to a conclusion one way or the other, the matter was remanded back to to enable both parties to produce evidence on the disputed questions and decide the matter accordingly. Apparently, before , it was accepted or assumed by both parties that where the process of manufacture was completed before the date of imposition of the duty, that duty would not apply to the goods, However, even though this question was not argued, it could be said that there is the authority of to the effect that in such a case, where duty is newly levied, it would not apply to goods already manufactured. ", "40. We now come to the fourth situation, which is the one before us in the present case. The same situation was before the Hon'ble in the case of Kesar Sugar Works (vide para 28 above). As already stated, that case was identical in material respects to the present case. When this was mentioned to , he had submitted that the Hon'ble had, in reaching its conclusion, assumed that the taxable event was the date of removal and not the date of manufacture of the goods. He was apparently reading from the headnote to the judgment as reported in one journal, where is reported as having held as follows : ", "\"It is true that excise duty is on the manufacture or production of goods but the above rules leave no room for doubt that it is leviable at the time of removal of goods from the place of manufacture and not with reference to the manufacture of excisable goods. Thus, the taxable event is the date of removal and not the date of manufacture of goods.\" ", "We find, however, that there is no such observation or assumption in the judgment that the taxable event is the date of removal and not the date of manufacture of goods. What has been observed by is as follows : ", "\"These rules leave 110 room for doubt that excise duty is leviable not with reference to the date of manufacture of the excisable goods but at the time and at the rate on the date of removal of goods from the place of manufacture or from the approved place of storage. Thus, the duty is linked in point of time to the date of removal and not to the date of manufacture.\" ", "Thus, it would not be correct to say that the Hon'ble Allahabad High Court had gone contrary to the advisory opinion of which held that the taxable event is the manufacture of goods. On the other hand, had fully taken into account the judgments of in the case of (AIR 1977 S.C. 1459) and (AIR 1976 S.C. 182), which cases themselves refer to leading cases decided earlier. ", "41. In the Kesar Sugar Works case, held that duty would be leviable in accordance with the new item even on goods manufactured earlier. ", "42. There are also some decisions of the itself on some of the above situations. These decisions were taken after considering the various authorities which were cited. In its Order No. C-7/1985, dated, 31-12-1984 in the case of , Calcutta, where the situation was identical to that in the case (in respect of a commodity which though excisable was, at the time of manufacture, totally exempt from duty through an exemption notification), the Bench held by a majority judgment that no duty could be demanded, even though the goods were cleared subsequent to the withdrawal of the notification. (It is our impression that in some other similar cases other Beaches of the might have taken the opposite view, following other authorities, but it is not necessary here to detail those cases). In its Order No. C-502/84, dated 31-7-1984, in the case of , Bombay 1984 (18) E.L.T. 606, where the situation was similar to that in the case and the case before us, the followed the judgment in the case of and the judgment in the case of (1978 E.L.T. 680) and held that duty was leviable in accordance with the amended item. ", "43. Reference was also made to a number of decisions on the parallel provisions of Section 15 , Customs Act . One was the judgment of in the case of (AIR 1979 S C. 675). In that case, held that the rate of duty applicable to the imported goods had to be determined according to the law which was prevalent on the date they were actually removed from the warehouse, namely, the amended Sections 14 and 15 of the Customs Act. We may also refer to another judgment, which although not cited before us, has come to be well-known. This is the judgment of in the case of . (1984) 1 ECC 49. In this judgment, , after a very detailed discussion, held that the calculation for the purpose of rate of duty must be done with reference to the date mentioned in Section 15 in various circumstances; and that under the Customs Apt the incidence of chargeability to duty arises under Section 15 itself, and the same cannot be treated as a mere machinery provision for effectuating the assessment. There are also a number of other judgments to the same effect, differentiating the date of importation or the date of entry into the territorial waters from the date of filing of the bill of entry (or other date as mentioned in Section 15 ), and holding that it is the latter date which determines the rate of duty. ", "44. In the above discussion, we have indicated the different types of situation which can arise, and the decisions available with reference to the respective situations. The various judgments which have been referred to above contain very detailed reasoning for the conclusions reached, and we would not venture to comment on the reasoning of . What we have to observe is that different conclusions have been reached with reference to different situations (and sometimes even with reference to the same situation). It might be objected that the same conclusion should be reached in all the situations, but we do not think this objection would be valid. It is axiomatic that the law can apply differently to different situations, and that distinctions can legitimately be drawn between one situation and another. Indeed, in the case (vide para 37 above), of , headed by the Hon'ble Chief Justice of that , after taking note of the decision of the same in the Brothers case, and of the fact that the in that regard had been dismissed on merits, considered that the Brothers case was distinguishable on facts and the decision in that case must be confined to its own facts. We are in respectful agreement with that, in considering the effect of the various judgments, it is necessary to take into account the situations to which they are applicable, and to draw distinctions wherever such distinctions are justified. It is on the basis of distinctions between relevant factors that we have set out in para 35 above four different situations. We have also set out the judicial decisions relating to each situation. The situation before us is squarely covered by the judgment of the Allahabad in the case of , and no contrary decision relating to such a case has been brought to our notice. ", "45. It would appropriate here to refer to the effect of the. order in the Brothers case. The course of events in that case has been set out ia para 37 above. In the subsequent judgment in the case (vide para 37 above), of the Madhya Pradesh had observed that the order of the did not give any reasons and that the words \"dismissed the SLP on merits\" were too vague for the declaration of any law under Article 141. In the Sirpur Paper Mills case (vide para 38 above), has observed that (although detailed reasons were not recorded by the ) the 's decision must be taken to have been a decision on merits. In other words, the must be held as having endorsed the reasoning contained in the judgment of . Thus, and have adopted somewhat different approaches to the effect of the order of the . However, it appears to us that, so far as the present case is concerned, this difference in approach is really not material. From the passage in judgment in the case which has been reproduced in para 37 above, it will be seen that had recognised a distinction between the situation covered by the Brothers judgment and that in the case, and held that the judgment in the Brothers case, even though approved by the , had no application to the case. We would like to stress that the scope, for distinction was not newly introduced by which decided the case, but was found by them in the second order of in the Brothers case. One particular distinction contained in the second judgment of in the Brothers case and quoted by in the case is found in the sentence \"the question will be different where the charging section, namely Section 3 of the Act, is to be considered to ascertain as to at what point of time excise duty is payable when the impost is made for the first time\". There are further observations in judgment in the Brothers case which are of relevance to the present case. For convenience, we are reproducing below para 5 of that judgment: ", "\"The learned counsel for the petitioner further invited attention to the provision of Section 4 of the Act as also to Rules 9, 9A, 49 and Rule 224(2) of the Central Excise Rules, 1944. We may observe that the said rules relate to time and manner of payment of duty. It is, no doubt, true that the rules provide for payment of duty at the rate prevailing on the date of removal of the goods. As such, there can be no doubt that so far as the rate is concerned, the one prevailing on the date of removal of the goods from the godowns will be relevant. But the liability for payment of excise duty cannot be determined with reference to Section 4 of the Act or the Rules framed thereunder, where exemption has for the first time been revoked and an article is subject to excise duty with effect from a particular date. Excise duty being a tax on production or manufacture, the liability for tax will arise at the time the production or manufacture is completed and not at the time the goods are removed from the godowns by the producer or the manufacturer, of course, if that liability under Section 3 be established, then the matter relating to rate will be governed by the provisions of Section 4 of the Act and the relevant rules pertaining thereto. In view of this position, we do not think that the present case is a fit one for a certificate of fitness for leave to appeal to , as, in our opinion, no substantial question of law of general importance is involved in this case.\" ", "It will be seen that reference has been made above to applicable rules including Rule 9A ; it has been observed that the relevant rate will be the one prevailing on the date of removal of the goods; and that if liability under Section 3 is established, then the matter relating to rate will be governed by the provisions of Section 4 of the Act and the relevant rules pertaining thereto. The last-quoted observation would clearly indicate that where liability to duty under Section 3 is established as having existed at the time of manufacture, the actual rate of duty will be at the rate prevailing on the date of removal of the goods, in terms of the, relevant rules including- Rule 9 A. This is quite consistent with the view taken in the judgment and with' the stand of the in the present case. It goes against the stand of the respondents in this case because if in terms of Section 3 the liability to duty as well as the rate of duty is held to be established once for all at the time of manufacture, the references to the rate being the rate prevailing on the date of removal would be superfluous. ", "46. What emerges clearly from a study of the judgments is that in the first decision in this case, there was a categorical view that the liability for tax would arise no sooner the manufacture or production is completed, and the point of recovery or any restriction on removal would not be the determining factor for grant of exemption in respect of goods, manufactured during the duty-free period. In the second judgment dealing with the petition for a certificate of fitness, the observations made in the first judgment were amplified and explained as discussed above. It is relevant to note that both judgments were delivered by the same Bench headed by the then Chief Justice of and therefore, must be taken as complementary to each other. Therefore, when dismissed the special leave petition on merits without recording reasons, it can certainly be taken that it approved the reasoning of : but it would not be justified to hold that approved the reasoning only as expressed in the first judgment and not the explanation or elaboration as contained in the second judgment which, as we have mentioned, was also delivered by the learned Chief Justice who delivered the first judgment. Therefore, a close study of the judgment in the case would confirm the view that while had upheld the finding of in the situation covered by that case, it had also left open the position in regard to other situations. ", "47. The above discussion would lead to the conclusions that : ", "(i) There are a number of situations which can be distinguished and where the position m law would be different; ", "(ii) The order of in the Kirloskar Brothers case should be taken as applicable to the situation in that case, other cases having to be considered on their own merits ; ", "(iii) The order of in the case was on the basis of the assumed or admitted position in that case, and the situation there was different from that in the present case ; ", "(iv) The decisions in the case and the case on the parallel provision in Section 15 of the Customs Act are in line with the decisions in the case and the case ; and ", "(v) The situation in the present case is squarely covered by the judgment of in the Kesar Sugar Works case. Following that judgment, the stand taken by the in this case would be correct in law and consequently the appeal deserves to be allowed. Having come to this conclusion on a very careful study of the case law, it may not be necessary for us to go further. However, we still think it would be useful to refer to some of the other aspects which were argued before us. ", "48. One of these was the argument of (vide para 22 above) that the view advanced by the would involve the retrospective application of law. We would observe that, if it is held that Rule 9A applies, the question of retrospectivity does not arise, because that Rule itself fixes the relevant point of time which determines the rate of duty as the time of removal. did not contend that Rule 9A was not valid or that' it was not applicable (though he had his own explanation as to the scope of its application). Once Rule 9A is held as valid and applicable, the question of retrospectivity really should not arise. ", "49. We shall, however, examine the matter on the basis that the application of Rule 9 A in a case like the present could have an element of retrospectivity. Even in the quotation from relied upon by it is laid down that retrospective effect could be given to a provision if by express words or necessary implication it appears that this was the intention of the legislature. This is where the effect of the declaration under the Provisional Collection of Taxes Act comes in. ", "50. Sections 3 and 4(1) of the Provisional Collection of Taxes Act read as under : ", "\"3. Power to make declaration under this Act : Where a Bill, to be introduced in on behalf of Government, provides for the imposition or increase of a duty of customs or excise, the Central Government may cause to be inserted in the Bill a declaration that it is expedient in the public interest that any provision of the Bill relating to such imposition or increase shall have immediate effect under this Act. ", "4. Effect of declaration under this Act and duration thereof-(1) A declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced.\" ", "Section 49 of the Bill read as follows : ", "\"Amendment of the First Schedule-The First Schedule to the Central Excises Act shall be amended in the manner specified in the Third Schedule.\" ", "There was appended to the Bill a declaration under the Provisional Collection of Taxes Act which read as under : ", "\"It is hereby declared that it is expedient in the public interest that the provisions of clauses 33, 44, 45, 46, 47, 49, 50, 51, 52 and 53 of this Bill shall have immediate effect under the Provisional Collection of Taxes Act , 1931 .\" ", "The Third Schedule directed as follows : ", "\"In the First Schedule to the Central Excises Act , - ", "* * * * * (xv) for Item No. 16B, the following Item shall be substituted namely :- \"16B. Wood and Articles of Wood, Thirty per cent The Following, Namely :- ad valorem. [The detailed description of the Item follows, but is not reproduced as it is not necessary for the purpose of this discussion]. ", "51. The combined effect of the above provisions was that the amendment to Item 16B had the force of law from the midnight of the 2/th February, J982. It appears to us that, even if the application of the amended provision to goods manufactured earlier and cleared after 27-2-1982 could be considered as having an element of retrospectivity, it could still be held that by virtue of the provision in the Provisional Collection of Taxes Act and the further specific provisions in the Finance Bill, that effect was the specific intention of the legislation. ", "52. We may now advert to the argument of (vide para 26), namely that, in the matter of application of Rule 9A, a distinction should be made between the rate of duty and tie description. Since the same Finance Bill raised the rate of duty on Item 68 from 8% to 10%, and this provision also had immediate effect under the Provisional Collection of Taxes Act , had conceded that the increased rate of duty under Item 68 as in force at the time of removal would be applicable to the goods in question, even though they had been manufactured earlier. He, however, contended that the changed description of Item 16B, which brought these, goods within the scope of that Item, would not be applicable. We are unable to see any justification for drawing such a distinction in the matter of application of Rule 9A or of the provisions of the Finance Bill. had laid stress on the fact that Rule 9A refers to the rate of duty and not to the description. But this obviously is because what finally determines an assessment is the rate of duty : the description is only an intermediate step, a signpost so to speak, which points out the correct rate of duty. This in our view is why Rule 9A refers only to the rate of duty. We have already seen that the Fifth Schedule to the Bill did not make any distinction between the description and the rate of duty. Both were covered in one clause. Nor did the declaration under the Provisional Collection of Taxes Act make or justify any such distinction. Further, as pointed out by , the substance of the change with reference to any particular goods was in the rate of duty, and it was not material whether this change was effected by amending the rate or the description. We do not, therefore, think that the distinction between the description and the rate of duty, which sought to draw, in the matter of application of Rule 9A, can be sustained. Indeed, after conceding that Rule 9A would apply, at least so far as the rate of duty is concerned, the respondents cannot with any force contend that the effect of a change in description should be ignored. ", "53. We have covered all the salient arguments put forward by both sides. We do not consider it necessary to refer specifically to some of the other arguments put forward by , which would only go to reinforce our conclusions; or to discuss some minor points advanced by such as that based on the article contained in a journal (vide para 25 above), or en the unlikely possibility of a manufacturer's accounts being held to stand retrospectively falsified (vide para 20 above), as these would not affect the conclusions reached. ", "54. In the result, we hold that the Order-in-Appeal No. 331-CE/IND/83, dated 22-6-1984 of the Collector of Central Excise (Appeals), New Delhi, was not correct and in accordance with law. We accordingly allow the appeal, set aside the Order of the Collector of Central Excise (Appeals) and restore the Order C. No. CEX-20/Misc/16-B/82/197, dated 12-3-1982 of the Superintendent of Central Excise, Range IV, Bhopal."], "relevant_candidates": ["0000027891", "0000030721", "0000053190", "0000123653", "0000649164", "0000809949", "0000882976", "0001012382", "0001022888", "0001225724", "0001628697", "0001644913"]} {"id": "0001749406", "text": ["PETITIONER: Vs. RESPONDENT: , & ORS. DATE OF JUDGMENT19/12/1975 BENCH: SARKARIA, BENCH: SARKARIA, RAY, A.N. (CJ) BEG, , P.N. CITATION: 1976 AIR 578 1976 SCR (3) 58 1976 SCC (1) 671 CITATOR INFO : R 1977 SC 276 (9) R 1978 SC 327 (11) F 1980 SC 517 (10,11) RF 1981 SC 116 (20) R 1982 SC 149 (15,965) R 1992 SC 443 (7) ACT: Constitution of India- Art. 226- Scope of the power of writ of \"certiorari\". Rule of practice-Usefulness of English decisions and when can be considered. \"Aggrieved persons\"-Tests for deciding. HEADNOTE: \"Locus standi\"-Whether a rival in trade and an owner of an existing cinema theatre is an \"aggrieved person\" within the meaning of s. 8A of the Bombay Cinema Rules. 1954 entitling him to invoke the certiorari jurisdiction \"ex- debito justitiae ' of for quashing the order granting a \"no objection certificate\" under rule 6 of the Bombay Cinema Rules, 1954. Damnum sine injuria-Principle of. Under the Bombay Cinema Rules, 1954, the District Magistrate, after inviting the objections under r. 4 from the public and also the opinions of the District Superintendent of Police, Chairman and the Executive Engineer (), and after considering them. may grant under rule 5 a \"no objection certificate'' to the appellants for the location of a cinema theatre under his jurisdiction, or in case of his not granting the certificate, he must refer under s. 6 of the Rules, the matter to with his reasons therefor. In respect of the application of the respondents, not being satisfied of the opinions of the District Superintendent of Police, Chairman, Executive Engineer () favouring the grant of certificate to the appellants herein, the District Magistrate personally visited the site and submitted a report to to the effect that the proposed site was not fit for the location of a cinema house. On the directions of , which did not agree with the report submitted by him, the District Magistrate granted the certificate to the respondents. The appellant being a rival in the cinema trade, though he did not prefer any objections at the time when they were called for, filed a writ petition in alleging that (i) the impugned certificate issued by the District Magistrate was not in the exercise of his own discretion and with due regard to the principles in the Bombay Cinematographic Act, 1918 and the Rules and (ii) Since as , the power has not be objectively exercised in a quasi judicial manner, the grant of the certificate suffered from lack of jurisdiction. , dismissed the writ petition on the ground that no right vested in the appellant, had been infringed or prejudiced or adversely affected as direct consequence of the order impugned by him, and as such, he was not an \"aggrieved person\" having a locus standi in the matter. On appeal by special leave to this , the appellant contended that (i) apart from a right in common with the general public to object to the grant before the District Magistrate, the appellant being a rival in the same trade had a particular commercial interest to see that the permission was not granted to another in contravention of law to start the same business, entitling him to a writ of certiorari ex-debito justitiae; and (ii) The concept of \"aggrieved person's being wide, any one who is personally interested and genuinely grieved by an act of usurpation of jurisdiction or lack of jurisdiction on the part of an administrative tribunal or body would fall within the category of an \"aggrieved 59 person\" even if such usurpation or lack of jurisdiction had not resulted in infringement of a legal right or legal interest vested in him; nor would such a person be denied \"locus standi\"' for me purpose of \"certiorari\" merely because he had not lodged any objection or joined the proceedings before the tribunal. Dismissing the appeal, the , ^ HELD: (1) The founding fathers of the Constitution have designedly couched Article 226 in comprehensive Phraseology to enable to reach injustice, wherever it is found. In a sense, the scope and nature of the power conferred by the Article is wider than that exercised by the writ courts in England. 3 SCR 563, referred to. (2) The adoption of the nomenclature of English writs with the prefix \"nature of\" superadded, indicates that the general principles grown over the years in the English courts, can shorn of unnecessary technical procedural restrictions, and adapted to the special conditions of this vast country, in so far as they do met conflict with any provision of the Constitution, or the law declared by this court be usefully considered in directing the exercise of this discretionary jurisdiction in accordance with well recognised rules of practice. [64 D-F] (3) According to most English decisions, in order to have the locus standi to invoke certiorari jurisdiction the petitioner should be an \"aggrieved person\", and in a case of defect of jurisdiction, such a petitioner shall be entitled to a writ of certiorari as a matter of course,, but if he does not fulfil that character and is a \"stranger\" the court will, in its discretion, deny him this extraordinary remedy, save in exceptional circumstances. [64 F-G] (4) The expression \"aggrieved person\" denotes an elastic and to an extent an elusive concept. It cannot be confined within the bounds of a rigid, exact and comprehensive definition. At best, its features can be described in a broad tentative manner. Its scope and meaning depends on diverse, variable factors such as the content and intent` of the statute of which contravention is alleged the specific circumstances of the case, the nature and extent of the prejudice or injury suffered by him. English courts have sometimes put a restricted and sometimes a wide construction on the expression, \"aggrieved person\". [64 H. 65 Al (5) In order to have the 'locus standi' to invoke the extraordinary jurisdiction under Art. 226 an applicant should ordinarily be one who has a personal or individual right in the subject matter of the application, though in the case of some of the writs like habeas corpus or quo warranto, this rule is relaxed or modified. The expression \"ordinarily\" indicates that this is not a cast-iron rule. It is flexible enough to take in those cases where the applicant has been prejudicially affected by an act or omission of an authority, even though he has no propriety or even a fiduciary interest in the subject matter. That apart in exceptional cases even a stranger or a person who was not a party to the proceedings before the authority, but has a substantial and genuine interest in the subject matter of the proceedings will be covered by this rule. [10 A, C-D] (6) In the context of locus standi to apply for a writ of certiorari, an applicant may ordinarily fall in any of these categories: (i) person aggrieved. (ii) stranger. (iii) busybody or meddlesome interloper Persons in the last category are easily distinguishable from those coming under the first two categories inasmuch as they interfere in things which do not concern them, masquerading as crusaders for justice in the name of pro bono publico, though they have no interest of the public or even of their own to protect The distinction between the first and second categories though real, is not always well demarcated. The first category has, as it were, two concentric zones; a solid central zone of certainty and a grey outer circle of lessening certainty in a sliding centrifugal scale with an outermost nebulous fringe of uncertainty. Applicants falling within the central zone are those whose legal rights have been infringed. Such applicants undoubtedly stand in the category of \"persons aggrieved'. In the grey outer-circle the bounds which separate the first category 60 from the second, intermix, interfuse and overlap increasingly in a centrifugal direction. All persons in this outerzone may not be \"persons aggrieved\". [71 A-C, D-E] (7) To distinguish such applicants from \"strangers\" among them, some broad tests may be deduced from case law, the efficacy of which varies according to the circumstances of the case, including the statutory context in which the matter falls to be considered. These are: (1) Whether the applicant is a person whose legal right has been infringed ? (2) Has he suffered a legal wrong or injury, in the sense that his interest recognised by law has been prejudicially and directly affected by the act or omission of the authority complained of ? (3) Is he a person who has suffered a legal grievance, a person against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something or wrongfully affected his title to something ? (4) Has he a special and substantial grievance of his own beyond some grievance or inconvenience suffered by him in common with the rest of the public ? (5) Was he entitled to object and be heard by the authority before it took the impugned action ? If so, was he prejudicially affected in the exercise of that right by the act of usurpation of jurisdiction on the part of the authority ? (6) Is the statute, in the context of which the scope of the words \"person aggrieved\" is being considered, a special welfare measure designed to lay down ethical or professional standards of conduct for the community? (7) or is it a statute dealing with private rights of particular individuals ? [71 E-H, 72 A] v. Taunton St. Mary (1815) 3 M & S 465, King v: Groom & Others Ex parte 2 K.B. 157, King v. Richmond Confirming Authority Ex parte Howitt 1 K.B. 157. R. Thomas Magistrates Ex Parte Green Baum (1957) 55 LCR. 129, 135, 135-136 in Yardley's Book of English Administrative Law 2nd Edition p. 228; v. 2 QBD 413. 's A.C. 617. v. QB 362, 378. v. (2) QB 299; v. Paddington Valuation Officer Ex parte Peachy Property Corporation Ltd. 1 QB 860; 1 SCR p. 306 v. Butt I Another Ex parte Brooke vol. xxxviii (1921-22) Times Law Reports 537; v. Brighton Borough Justices Ex parte Jarvia (1954) 1 Weekly Law Reports 203. & others v. Minister of Housing & Local Government 1 QBD 278. In re Side bottom (1880) 14 ChD. 458 @ 465; Ex parte Scott 1 KB 7; King v. Middllesex Justices (1832) 37 FR 594-(1832) 3 B & AD 938; R. Bradford an Avan Urban Dt. Council Ex parte Balton 2 All ER 492; v. (1966) WLR 899; R. v. 2 K.B. 508; v. Cardiff Justices Ex parte Cardiff Corporation 2 Q.B. 436; SCR 28. v. The State of West Bengal Supp. 3 SCR l; v. Member, 2 SCR 172; State of Orissa v. AIR 1972 S.C. 2114. . 1 SCR 615; v. 307 Q.B. 433. v. 338 U.S. 621, American Jurisprudence Vol. 2 Ld. at 575 p. 334 v. 341 U.S. 123; United States Cane Sugar Refiners' Asson. v. 138 F 2nd 116: 158 ALR 849; United States v. 351 U.S. 192 and v. 350 U.S. 884, considered. (8) The Bombay Cinematographic Act and the Rules are not designed to set norms of moral or professional conduct for the community at large or even a section thereof and hence, the expression \"person aggrieved\" must receive a strict construction. The Act and the Rules do not confer any substantive justiciable right on a rival in cinema trade, apart from the option in common with the rest of the public to lodge an objection in response to the notice published under Rule 4. Section 8A of the Act confers a right of appeal to , only on any person aggrieved by an order of a licensing authority refusing to grant a licence or revoking or suspending any licence under s 8. [72B,C-E] 61 Section 8B of the Act provides that may either of its A own motion or upon an application made by \"an aggrieved person\" call for and examine the record of any order made by a licensing authority under this Act and passes such order thereon as it thinks just and proper. [72 F-G] (9) Such harm or loss in business arising out of setting up of a rival cinema house adversely affecting the monopolistic, commercial' interest of the applicant is not wrongful in the eye of law because, it does not result in injury to a legal right or a legally protected interest the business competition causing it being a lawful activity. juridically harm of this typed is called \"damnum sine injuria\" the term injuria being here used in its true sense of an act contrary to law. The reason why the law suffers a person knowingly to inflict harm of this description on mother without holding him accountable for it is that such harm done to an individual is a gain to society at large. [73 E-F] Salmondon jurisprudence referred to. (10) In the instant case, none of the appellant's rights orinterests recognised by the general law has been infringed as a result of the grant of 'No Objection certificate'. He has not been denied or deprived of a legal right. He has not sustained injury to any legally protected interest. In fact, the impugned order does not operate as a decision against him, much less does it wrongfully affect his title to something. He has not been subjected to a, legal wrong. He has suffered no legal grievance. He has no legal peg for a justicable claim to hang on. Therefore, he is not a \"person aggrieved\" within the meaning of s. 8A or 8B of the Bombay Cinema Rules, 1954 and has no locus standi to challenge the grant of the 'No objection certificate'. [73 C, F-G] D Rice & Flour Mills case 3 S.C.R. 846 applied. (11) Assuming that the appellant is a stranger, and not a busybody, then also there are no exceptional circumstances in the present case which would justify the issue of a writ of certiorari at his instance. On the contrary, the result of the exercise of these discretionary powers, in his favour, will, on balance, be against public policy. It will eliminate healthy competition in business which is so essential to raise commercial morality. it will tend to perpetuate the appellant's monopoly of cinema business in the town. and above all, it will seriously injure the fundamental rights of respondents 1 and 2 which they have under Article 19(1)(g) of the Constitution to carry on trade or business subject to \"reasonable restrictions imposed by law\". [74 C-D] (12) It is true that in the ultimate analysis, the jurisdiction under Art. 226 is discretionary. But in a country like India where writ petitions are instituted in s by the thousand many of them frivolous, a strict ascertainment, at the outset, of the standing of the petitioner to invoke this extraordinary jurisdiction must be insisted upon. The broad guidelines indicated coupled with other well established, self-devised rules of practice, such as the availability of an alternative remedy, the conduct of the petitioner etc., can go a long way to help the s in weeding out a large number of writ petitions at the initial stage with consequent saving of public time and money. While a Procrustean approach should be avoided, as a rule, the court should not interfere at the instance of a \"stranger\" unless there are exceptional circumstance involving a grave miscarriage of justice having an adverse impact on public interests. [73H, 74 A-B] JUDGMENT: ", "CIVIL APPELLATE Jurisdiction: Civil Appeal No. 2035 of 1971. ", "Appeal by Special Leave from the Judgment and order dated the 11th November, 1971 of in S.F.A. No. 158484 of 1 970. ", " and Mrs. for the Appellant. ", " and Miss for Respondents 1-2. and and for Respondent Nos. 3-4. ", "62 ", "The Judgment of the Court was delivered by SARKARIA, J.-Whether the proprietor of a cinema theatre holding a licence for exhibiting cinematograph films, is entitled to invoke the certiorari jurisdiction ex debito justitiae to get a 'No-objection Certificate', granted under Rule 6 of the Bombay Cinema Rules, 1954 (for short, the Rules) by the District Magistrate in favour of a rival in the trade, brought up and quashed on the ground that it suffers from a defect of jurisdiction, is the principal question that falls to be determined in this appeal by special leave. ", "The circumstances giving rise to this appeal are as follows: ", "Respondents 1 and 2 are owners of a site, bearing Survey No. 98 in the town of Mehmadabad. They made an application under Rule 3 of the Rules to the District Magistrate, Kaira, for the grant of a Certificate that there was no objection to the location of a cinema theatre at this site. The District Magistrate then notified in the prescribed Form, the substance of the application by publication in newspapers, inviting objections to the grant of a No-objection Certificate. In response thereto, several persons lodged objections, but the appellants, who are the proprietors of a cinema house, situated on Station Road, Mehmadabad, were not among those objectors. Some of the objections were that a Muslim graveyard, a Durgah, a compost depot, a school and public latrines were situated in the vicinity of the proposed site. ", "The District Magistrate (Res. 3 herein) invited the opinions of the Chairman of , Executive Engineer , and the District Superintendent of Police. These three authorities opined that they had no objection to the grant of the Certificate applied for. The District Magistrate visited the site on 27-7-1970 Thereafter he submitted a report to (Res. 4) 'that the proposed site was not fit for 'the location of a cinema house. He recommended that the 'No-objection Certificate' should be refused. The State Government did not agree with the recommendation of the District Magistrate and directed the latter to grant the Certificate. Accordingly, the District Magistrate granted the 'No-objection Certificate' on 27-11-1970 to Res. 1 and 2. ", "On 16-12-1970, the appellants filed a writ petition in under Articles 226/227 of the Constitution praying for the issuance of a writ of certiorari, mandamus, or any other appropriate writ or order directing the Respondents to treat the No-objection Certificate granted to Respondents 1 and 2 as illegal, void and ineffectual They further asked for an injunction restraining Respondents 1 and 2 from utilising the certificate for the purpose of building a cinema theatre. ", "The main grounds of challenge were: that the impugned Certificate had been issued by the District Magistrate, not in the exercise of his own discretion with due regard to the principles indicated in the Bombay Cinematograph Act, 1918 (for short, the Act) and the Rules, but mechanically at the dictates of the State Government; that Rules S and 6, according to an earlier judgment of being ultra vires and void, the Government had no power to grant or refuse A the No-Objection Certificate; that such power belonged to the District Magistrate who was , and had to be exercised by him objectively, in a quasi judicial manner in accordance with the statutory principles; since it was not so exercised, the grant of the Certificate in question suffers from lack of jurisdiction. ", "In the affidavit filed in reply, by the District Magistrate (on behalf of Respondents 3 and 4) a preliminary objection was taken that the appellants had no locus standi to file the writ petition because their ,. rights were not in any manner affected by the grant of the 'No-objection Certificate'. It was stated that the deponent had reported the case and submitted the records to under Rule S, recommending that on account of the location of a graveyard, a church, a temple, a mosque and a school near the proposed site, the no-objection certificate be refused. It was admitted that on receipt of the order of he granted the No-Objection Certificate to Respondents 1 and 2 in compliance with the Government's directive. . ", ", purporting to rely on this Court's decision in (1) and an earlier decision of its own in v. State of Gujarat(\"), held that Rule 5(2) in its entirety, and the words \"the previous permission of the obtained under Rule S\" in Rule 6 being ultra vires and invalid, have to be ignored as non est, with the result that the District Magistrate had to come to his own conclusion on relevant considerations and objective norms whether a No objection Certificate should be granted or refused; that under the Act the District Magistrate and not the -is , and he was bound to exercise this power, which is an integral part of the process of licensing, in a quasi judicial manner, that since the District Magistrate exercised this power not on his own in accordance with objective principles, but solely at the dictates of the , his act in granting the No- Objection Certificate suffers from a patent lack of jurisdiction. ", ", however, dismissed the writ petition on the ground that no right vested in the appellant had been infringed, or prejudiced or adversely affected as a direct consequence of the order impugned by him, and as such, he was not an aggrieved person' having a locus standi in the matter. ", "Mr. appearing for the appellant, assails the finding of in regard to the locus standi of the appellant to maintain the writ petition. The burden of his arguments is that apart from a right in common with the general public to object to the grant before the District Magistrate, the appellant was a rival in the same trade and, as such, had a particular interest to see that permission was not granted to another, in contravention of law, to start the same business; consequently, the illegal grant of the No-objection Certificate had prejudicially affected the commercial interest of the appellant who stood in the ll (1) [1971] 2 S.C.R. 110. ", "(2)Special Civil Application No. 912 of 1970, decided by Gujarat High Court on 25/27th Nov. 1 970. ", "64 ", "category of an \"aggrieved person' entitled to a writ of certiorari ex debito justitiae. It is submitted that so far as certiorari is concerned, the concept of 'aggrieved person' is very wide and is not confined to a person who is grieved by an invasion of a legal right vested in him. Anyone-says Mr. -who is personally interested and genuinely grieved by an act of usurpation of jurisdiction or lack of jurisdiction on the part of an administrative tribunal or body, would fall within the category of an 'aggrieved person', even if such usurpation or lack of jurisdiction had not resulted in infringement of a illegal right or legal interest vested in him; nor would such a person be denied locus standi for the purpose of certiorari merely because he had not lodged any objection or joined the proceedings before the tribunal (District Magistrate, in the present case). In these premises, it is maintained, was not justified in denying the remedy of certiorari to the appellant. Counsel has cited a number of decisions, mostly of , in support of his contentions. ", " Article 226 of the Constitution empowers to issue to any person or authority, including the , within its territorial jurisdiction, directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of fundamental rights and for any other purpose. ", "As explained by this in officer, Kanpur(1) the founding fathers of the Constitution have designedly couched the Article in comprehensive phraseology to enable to reach injustice wherever it is found. In a sense, the scope and nature of the power conferred by the Article is wider than that exercised by the writ courts in England. However, the adoption of the nomenclature of English writs, with the prefix \"nature of\" superadded, indicates that the general principles grown over the years in , can, shorn of unnecessary technical procedural restrictions, and adapted to the special conditions of this vast country, in so far as they do not conflict with any provision of the Constitution, or the law declared by this , be usefully considered in directing the exercise of this discretionary jurisdiction in accordance with well-recognised rules of practice. ", "According to most English decisions, in order to have the locus standi to invoke certiorari jurisdiction, the petitioner should be an \"aggrieved person\" and, in a case of defect of jurisdiction, such a petitioner will be entitled to a writ of certiorari as a matter of course, but if he does not fulfil that character, and is a \"stranger\", the will, in its discretion, deny him this extraordinary remedy, save in very special circumstances. ", "This takes us to the further question: Who is an \"aggrieved per son\" and what are the qualifications requisite for such a status ? The expression \"aggrieved person\" denotes an elastic, and, to an extent, an elusive concept. It cannot be confined within the bounds of rigid, exact and comprehensive definition. At best, its features can be described in a broad, tentative manner. Its scope and meaning (1) [19965] 3 S.C.R. 536. ", "65 ", "depends on diverse, variable factors such as the content and intent of the statute of which contravention is alleged, the specific circumstances of the case, the nature and extent of the petitioner's interest, and the nature and extent of the prejudice or injury suffered by him. English Courts have sometimes put a restricted and sometimes a wide construction on the expression \"aggrieved person\". However, some general tests have been devised to ascertain whether an applicant is eligible for this category so as to have the necessary locus standi or 'standing' to invoke certiorari jurisdiction. ,, We will first take up that line of cases in which an \"aggrieved person\" has been held to be one who has a more particular or peculiar interest of his own beyond that of the general public, in seeing that the law is properly administered. The leading case in this line in v. Justices of Surrey(1) decided as far back as 1870. There, on the application by the highway board the Justices made certificates that certain portions of three roads were unnecessary. As a result, it was ordered that the roads should cease to be repaired by the parishes. ", "E, an inhabitant of one of the parishes, and living in the neighbourhood of the roads, obtained a rule for a certiorari to bring up the orders and certificates for the purpose of quashing them on the ground that they were void by reason of the notices not having been affixed at the places required by law. On the point of locus standi (following an earlier decision v. ), the Court held that though a certiorari is not a writ of course, yet as the applicant had by reason of his local situation a peculiar grievance of his own, and was not merely applying as one of the public, he was entitled to the writ ex debito justitiae. ", "It is to be noted that in this case was living in the neighbourhood of the roads were to be abandoned as a result of the certificates issued by the Justices. He would have suffered special inconvenience by the abandonment. Thus had shown a particular grievance of his own beyond some inconvenience suffered by the general public. He had a right to object to the grant of the Certificate. Non-publication of the notice at all the places in accordance with law, had seriously prejudiced him in the exercise of that legal right. ", "The ratio of the decision in v. Justices of Surrey (supra) was followed in King v. and ors. Ex Parte(3). There, the parties were rivals in the liquor trade. The applicants (brewers) had persistently objected to the jurisdiction of the justices to grant the ` license to one in a particular month. It was held that the applicants had a sufficient interest in the matter to enable them to invoke certiorari jurisdiction. ", "A distinguishing feature of this case was that unlike the appellants in the present case who did not, despite public notice, raise any objection before the District Magistrate to the grant of the No-objection Certificate, the brewers were persistently raising objections in proceedings before the Justices at every stage. The law gave them a right to (1) [1870] S B. 466. (2) [1815] 3 M & S 465. ", "(3) [1901] 2 K. B. 157. ", "66 ", "object and to see that the licensing was done in accordance with law. They were seriously prejudiced in the exercise of that right by the act of usurpation of the jurisdiction on the part of the Justices. ", "The rule in 's case was followed in The King v. , Ex parte Howitt(1). There, also, the applicant for a certiorari was a rival in the liquor trade. It is significant that in coming to the conclusion that the applicant was a 'person aggrieved', Earl of Reading C.J. laid stress on the fact that he had appeared and objected before the Justices and joined issue with them, though unsuccessfully, \"in the sense that they said they had jurisdiction when he said they had not\". ", "In Magistrate Court Ex parte (2) there were two traders in Goulston St., Stepney. One of them was who held a license to trade on pitch No. 4 for S days in the week an pitch No. 8 for the other two days. The other was , who held a licence to sell on Pitch No. 8 for two days of the week, and pitch No. 10 for the other days of the week. A much better pitch, pitch No. 2, in Gulston St. became vacant. Thereupon, both and applied for the grant of a licence, each wanted o to give up his own existing licence and get a new licence for pitch No. 2. considered and decided in favour of and refused who was left with his pitches 4 and 8. ", " appealed to the magistrate. He could not appeal against the grant of a licence to , but only against the refusal to grant a licence to himself. Before the magistrate, opposed him. The magistrate held that the were wrong to refuse the licence of pitch No. 2 to . The thereupon made out a licence for for pitch No. 2 and wrote to saying that his licence had been wrongly issued. made an application for certiorari to court . The court held that the magistrate had no jurisdiction to hear the appeal. An objection was taken that had no locus standi. Rejecting the contention, Lord observed: ", "\"I should have thought that in this case was certainly a person aggrieved, and not a stranger. He was affected by the magistrate's orders because the magistrate ordered another person to be put on his pitch. It is a proper case for the intervention of the court by means of certiorari.\" ", "It is to be noted that the had duly allotted pitch No. 2 to in the exercise of their administrative power. The Magistrate's order pursuant to which the cancelled the allotment. and re-allotted that pitch to , was without jurisdiction By this illegal cancellation and reallotment 's interest to trade on pitch No. 2, which had been duly licensed out to him was directly and prejudically affected by the impugned action. ", "(1) [1921] I K.B. 248. ", "(2)[1957] 55 L.G.R. 129-135, 135-136 extracted in 's book of English Administrative Law. 2nd Edn. at p. 228. ", "67 ", " v. ), is another case belonging to this group. was held that the applicants therein were \"persons aggrieved\" because they were grieved by the failure of to give them prior notice and hearing to which they were entitled under Regulation 15(2). Thus it could be said that they had suffered a legal wrong. ", "In v. , Ex parte (\"), in exercise of its powers under the Town Police Clauses Act, 1847, limited the number of licences to be issued for hackney carriages to 300. The gave an undertaking to the associations representing the 300 existing licence holders not to increase the number of such licence holders above 300 for a certain period. The , disregarding this undertaking, resolved to increase the number. An representing the existing licence-holders moved for leave to apply for orders of Prohibition, Mandamus and Certiorari. The Division Bench refused. In , allowing the 's appeal, Lord ar pp. 308, 309: ", "\"The taxicab owners' association come to this Court for relief and I think we should give it to them. The writs of prohibition and certiorari lie on behalf of any person who is a \"person aggrieved\" and that includes any person whose interests may be pre judicially affected by what is taking place. It does not include a mere busybody who is interfering in things which do not concern him; but it includes any person who has a genuine grievance because something has been done or may be done which affects him: A.C. 617 and Maurice v. London County Council 2 Q.B. 362, ", "378. The taxicab owners' association here have certainly a locus standi to apply for relief.\" ", "It may be noted that in this case, the whole question turned on the effect in law of the undertaking, and whether the applicants had been treated fairly. ", "Emphasising the \"very special circumstances\" of the case, the court read into the statute, a duty to act fairly in accordance with the principles of natural justice. Thus, a corresponding right to be treated fairly was also imported, by implication, in favour of the' applicants. Viewed from this standpoint, the applicants had an interest recognised in law, which was adversely affected by the impugned action. They had suffered a wrong as a result of the unfair treatment on the part of the corporation. ", "In v. Paddington Valuation Officer, Ex Parte Peachy Property Corporation Ltd.,(3), ratepayers were held to have the locus standi to apply for certiorari, notwithstanding the fact that it could not be said that the actual burdens to be borne by the applicants fell more heavily on them than on other members of the local community. Hl (1) (1952) 2 W.B.D. 413. (2) [1972] 2 Q.B.299. (3)[1966]1 Q.B. 880. ", "68 ", " (1), Bench of seven learned Judges of this considered the question whether of a State was a 'person aggrieved' to maintain an appeal under s. 38 of the Advocates' Act, 1961. Answering the question in the affirmative, this , speaking through , indicated how the expression \"person aggrieved\" is to be interpreted in the context of a statute, thus: ", "\"The meaning of the words \"a person aggrieved\" may vary according to the context of the statute. One of the meanings is that a person will be held to be aggrieved by a decision if that decision is materially adverse to him. Normally, one is required to establish that one has been denied or deprived of something to which one is legally entitled in order to make one \"a person aggrieved\". Again a person is aggrieved if a legal burden is imposed on him. The meaning of the words \"a person aggrieved\" is sometimes given a restricted meaning in certain statutes which provide remedies for the protection of private legal rights. The restricted meaning requires denial or deprivation of legal rights. A more liberal approach is required in the back ground of statutes which do not deal with property rights but deal with professional conduct and morality. The role of under the Advocates' Act is comparable to the role of a guardian in professional ethics. The words \"person aggrieved\" in sections 37 and 38 of the Act are of wide import and should not be subjected to a restricted inter pretation of possession or denial of legal rights or burdens or financial interests. ", "In v. and anr. Ex Parte Brooke(2), a person who was merely a resident of the town, was held entitled to apply for certiorari. Similar is the decision in v. Just ices Ex Parte Jarvis(3). ", "Typical of the cases in which a strict construction was put on the expression \"person aggrieved\", is and ors. v. Minister of Housing and Local Government(4). There, an appeal by a against the refusal of of permission to develop land owned by the by digging chalk, was allowed by the Minister. Owners of adjacent property applied to under s. 31(1) of the Town and Country Planning Act, 1959 to quash the decision of the Minister on the ground that the proposed operations by the company would injure their land, and that they were 'persons aggrieved' by the action of the Minister. It was held that the expression 'person aggrieved' in a statute meant a person who had suffered a legal grievance; anyone given the right under s. 37 of the Act of 1959 to have his representation considered by the Minister was a person aggrieved, thus section 31 applied, if those rights were infringed; but the applicants had no right under the statute, and (1) 1 S.C.R. 306. ", "(2) Vol. XXXVIII(1921-22) Times Law Reports 537. (3) (1954)1,Weekly Law Reports 203. ", "(4) [1961] 1 Q.B.D. 278. ", "69 ", "no legal rights had been infringed and therefore they were not entitled to challenge the Minister's decision. quoted with approval these observations of in In Re Sidebothem(1). ", "\"The words 'person aggrieved' do not really means a man who is disappointed of a benefit which he might have received if some other order had been made. A 'person aggrieved' must be a man who has suffered a legal grievance,`a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrong fully refused him something, or wrongfully affected his title to something.\" ", "Ex Parte Stott(2), is another illustration of a person who had no legal grievance, nor had he sufficient interest in the matter. A licensing authority under the Cinematography Act, 1901, granted to a theatre proprietor a licence for the exhibition of cinematograph films at his theatre. The licence was subject to the condition that the licensee should not exhibit any film if, he had notice that the licensing authority objected to it. A firm who had acquired the sole right of 1 exhibition of a certain film in the district in which the theatre was situated entered into an agreement with the licensee for the exhibition of the film at his theatre. The licensing authority having given notice to the licensee that it objected to the exhibition of the film, the film applied for a writ of certiorari to bring up the notice to be quash ed on the ground that the condition attached to the licence was unreasonable and void, and that they were aggrieved by the notice as 'being destructive of their property. It was held that whether the condition was unreasonable or not, the applicants were not persons who were aggrieved by the notice and had no locus standi to maintain the application. ", "Similarly, King v. Middlesex Justices(3), it was held that the words \"person who shall think himself aggrieved\" appearing in the statute governing the grant of licences to innkeepers mean a person immediately aggrieved as by refusal of a licence to himself, and not one who is consequently aggrieved, and that though the Justices had granted a licence to a party to open a public house, not before licensed, within a very short distance of a licensed public house, the occupier of the latter house could not appeal against such grant. ", "Other instances of a restricted interpretation of the expression \"person aggrieved\" are furnished by R. v. Bradford on-Avon Urban District Council Ex Parte Boulton(4); v. Camden London (1) [1880] 14Ch.D.458,at p.465. (2) [1916] 1K B.7 (3) (1832) 37 R. R. 594-(1832) 3 & Ad. 938. ", "(4) (1964) 2 All. E. R. 492. ", "70 ", "); v. ); v. ). ", "This Court has laid down in a number of decisions that in order to have the locus standi to invoke the extraordinary jurisdiction under Article 226 , an applicant should ordinarily be one who has a personal or individual right in the subject matter of the application, though (1) the case of some of the writs like habeas corpus or quo warranto this rule is relaxed or modified. In other words, as a general rule, in fringement of some legal right or prejudice to some legal interest in hearing the petitioner is necessary to give him a locus standi in the matter see The State of orissa v. ); Calcutta . (5); v. Member, , orissa(6); (7); State of orissa v. ); .(9)]. ", "The expression \"ordinarily\" indicates that this is not a cast-iron rule. It is flexible enough to take in those cases where the applicant has been prejudicially affected by an act or omission of an authority, r even though he has no proprietary or even a fiduciary interest in the subject- matter. That apart, in exceptional cases even a stranger or a person who was not a party to the proceedings before the authority, but has a substantial and genuine interest in the subject matter of the proceedings will be covered by this rule. The principles enunciated in the English cases noticed above, are not inconsistent with it. ", "In the United States of America, also, the law on the point is substantially the same. \"No matter how seriously infringement of the Constitution may be called into question, \"said Justice in v. Miller(10) \"this is not the tribunal for its challenge except by those who have some specialized interest of their own to vindicate apart from a political concern which belongs to all\". To have a \"standing to sue\", which means locus standi to ask for relief in a court independently of a statutory remedy, the plaintiff must show that he is injured, that is, subjected to or threatened with a legal wrong. Courts can intervene only where legal rights are invaded(11). \"Legal wrong\" requires a judicially enforceable right and the touch stone to justiciability is injury to a legally protected right. A nominal or a highly speculative adverse affect(12) on the interest or right of a person has been held to be insufficient to give him the \"standing to sue\" for judicial review of administrative action(18). Again the (1) (1966) 1 W. L. R.899 (2) [1951] 2K.B. 508. (3) [1962] 2 QB 436. ", "(4) [1952] S.C.R.28. ", "(5) [1962] Supp.3 S.C.R. 1. ", "(6) [1967] 1, S.C. Appeals 413. ", "(7) A.I.R. 1966 S.C.828-[1966] 2 S.C.R.172. (8) A.T.R.1972 S.C.2112. ", "(9) A.I.R.1973 S.C.2720-(1974) I S.C.R 615. (10)(1939) 307 U.S. 433. ", "(11)Chapman v. 338 U. S.621. (12)American Jurisprudence Vol. 2 d ss. 575 . p. 334 v. 341 U.S.123. ", "(13)United States Cane Sugar Refiners. Assoen. v. 138 2nd 116: 1518 A.L.R.849. ", "71 ", "\"adverse affect\" requisite for \"standing to sue\" must be an \"illegal effect''(l). Thus, in the undermentioned cases, it was held that injury resulting from lawful competition, not being a legal wrong, cannot furnish a \"standing to sue\" for judicial relief(2). ", "It will be seen that in the context of locus standi to apply for a writ of certiorari, an applicant may ordinarily fall in any of these categories: (i) 'person aggrieved'; ", "(ii) 'stranger'; (iii) busybody or meddlesome interloper. Persons in the last category are easily distinguishable from those coming under the first two categories. Such persons interfere in things which do not concern them. They masquerade as crusaders for justice. They pretend to act in the name of , though they have no interest of the public or even of their own to protect. They indulge in the pastime of meddling with the judicial process either by force of habit or from improper motives. Often, they are actuated by a desire to win notoriety or cheap popularity; while the ulterior intent of some applicants in this category, may be no more than spoking the wheels of administration. should do well to reject the applications of such busybodies at the threshold. ", "The distinction between the first and second categories of applicants, though real, is not always well-demarcated. The first category has, as it were, two concentric zones; a solid central zone of certainty, and a grey outer circle of lessening certainty in a sliding centrifugal scale, with an outermost nebulous fringe of uncertainty. Applicants falling within the central zone are those whose legal rights have been infringed. Such applicants undoubtedly stand in the category of 'persons aggrieved'. In the grey outer-circle the. bounds which separate the first category from the second, intermix, interfuse and overlap increasingly in a centrifugal direction. All persons in this outerzone may not be \"persons aggrieved. ", "To distinguish such applicants from 'strangers', among them, some broad tests may be deduced from the conspectus made above. These tests are not absolute and ultimate. Their efficacy varies according to the circumstances of the case, including the statutory context in which the matter falls to be considered. These are: Whether the applicant is a person whose legal right has been infringed ? Has he suffered a legal wrong or injury, in the sense that his interest, recognised by law. has been prejudicially and directly affected by the act or omission of the authority, complained of ? Is he a person who has suffered a legal grievance, a person \"against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something\" ? Has he a special and substantial grievance of his own beyond some grievance or inconvenience suffered by him in common with the rest of the public ? Was he entitled to object and be heard by the authority before it took the impugned action? If so, was he prejudicially affected in the exercise of that right by the act of usurpation of jurisdiction on (1) United States v. U.S.192. (2) v. 350 U. S. ", "884. 6-390SCr/76 the part of the authority ? Is the statute, in the context of which the scope of-the words \"person aggrieved\" is being considered. a social welfare measure designed to lay down ethical or professional standards of conduct for the community ? or is it a statute dealing with private rights of particular individuals ? ", "Now let us apply these tests to the case in hand. The Act and the Rules with which we are concerned, are not designed to set norms of moral or professional conduct for the community at large or even a section thereof. They only regulate the exercise of private rights of an individual to carry on a particular busness on his property. In this context, the expression \"person aggrieved\" must receive a strict construction. ", "Did the appellant have a Legal right under the statutory provisions or under the general law, which has been subjected to or threatened with injury. ? The answer in the circumstances of the case must necessarily be in the negative. ", " The Act and the Rules do not confer any substantive justiciable right on a rival in cinema trade, apart from the option in common with the rest of the public, to lodge an objection in response to the notice published under Rule 4. The appellant did not avail of this option. He did not lodge any objection in response to the notice, the due publication of which was not denied. No explanation has been given as to why he did not prefer any objection to the grant of the Objection Certificate before the District Magistrate or the . Even if he had objected before the District Magistrate and failed, the Act would not give him a right of appeal. Section 8A of the Act confers a right of appeal to the State , only on any person aggrieved by an order of a licensing authority refusing to grant a license, or revoking or suspending any licence under section 8 . Obviously, the appellant was not a \"person aggrieved\" within the contemplation of Section 8A Section 8B of the Act provides that the State may either of its own motion, or upon an application made by \"an aggrieved person\", call for and examine the record of any order made by a licensing authority under this Act, and pass such order thereon as it thinks just and proper. Assuming that the scope of the words \"aggrieved person\" in Section 8B is wider than the ambit of the same words as used in Sec. 8A, then also, the appellant cannot, in the circumstances of this case, be regarded as a \"person aggrieved' having. the requisite legal capacity to invoke certiorari jurisdiction. ", " The Act and the Rules recognise a special interest of persons residing, or concerned with any institution such as a school, temple, mosque etc. located within a distance of 200 yards of the site on which a cinema house is proposed to be constructed. The appellant does not fall within the category of such persons having a special interest in the locality. It is not his case that his cinema house is situated anywhere near the site in question, or that he has any peculiar interest in his personal, fiduciary or representative capacity in any school, temple etc. situated in the vicinity of the said site. It cannot therefore be said that the appellant is \"a person aggrieved\" on account of his having a particular and substantial interest of his own in the subject matter of the litigation, beyond the general interest of the public. Moreover the appellant could not be said to have been, in fact, aggrieved. As already noticed, he, despite adequate opportunity, never lodged any objection with the District Magistrate, nor went in revision before . Thus the present case is not in line with the decisions which are within the ratio of Queen v, Justices of Surrey (supra). ", "Having seen that the appellant has no standing to complain of injury, actual or potential, to any statutory right or interest, we pass on to consider whether any of his rights or interests, recognised by the general law, has been infringed as a result of the grant of No-objection Certificate to the respondents ? Here, again, the answer must be in the negative. ", "In Paragraph 7 of the writ petition, he has stated his cause of action, thus: ", "\"The petitioner submits that .. he owns a cinema theatre in Mehmadabad which has about a small population of 15000 persons as stated above and there is no scope for more than one cinema theatre in the town. He has, there fore, a commercial interest in seeing to it that other persons are not granted a no- objection certificate in violation of law.\" ", "Thus, in substance, the appellant's stand is that the setting up of a rival cinema house in the town will adversely affect his monopolistic commercial interest, causing pecuniary harm and loss of business from competition. Such harm or Loss is not wrongful in the eye of law, because it does not result in injury to a legal right or a legally protected interest, the business competition causing it being a lawful activity. Juridically, harm of this description is called demnum sine injuria, the term injuria being here used in its true sense of an act contrary to law(1). The reason why the law suffers a person knowingly to inflict harm of this description on another, without holding him accountable for it, is that such harm done to an individual is a gain to society at large. ", "In the light of the above discussion, it is demonstrably clear that the appellant has not been denied or deprived of a legal right. He has not sustained injury to any legally protected interest. In fact, the impugned order does not operate as a decision against him, much less does it wrongfully affect his title to something. He has not been subjected to a legal wrong. He has suffered no legal grievance. He 'has no legal peg for' a justiciable claim to hang on. Therefore he is not a 'person aggrieved' and has no locus standi to challenge the grant of the No-objection Certificate. ", "lt is true that, in the ultimate analysis, the jurisdiction under Article 226 in general, and certiorari in particular, is discretionary. But (1) Salmond on Jurisprudence by Fitz-Gerald. p. 357 para 85. ", "74 ", "in a country like India where writ petitions are instituted in by the thousand, many of them frivolous, a strict ascertainment, at the outset, of the standing of the petitioner to invoke this extraordinary jurisdiction, must be insisted upon. The broad guide lines indicated by us, coupled with other well established self-devised rules of practice, such as the availability of an alternative remedy, the conduct of the petitioner etc., can go a long way to help the courts in weeding out a large number of writ petitions at the initial stage with consequent saving of public time and money. ", "While a Procrustean approach should be avoided, as a rule the should not interfere at the instance of a 'stranger' unless there are exceptional circumstances involving a grave miscarriage of justice having an adverse impact on public interests. Assuming that the appellant is a 'stranger', and not a busybody, then also, there are no exceptional circumstances in the present case which would justify the issue of a writ of certiorari at his instance. On the contrary, the result of the exercise of these discretionary powers, in his favour, will, on balance, be against public policy. It will eliminate healthy competition in this business which is so essential to raise commercial morality; it will tend to perpetuate the appellant's monopoly of cinema business in the town; and above all, it will, in effect, seriously injure the fundamental rights of respondents 1 and 2, which they have under article 19(1) (g) of the Constitution, to carry on trade or business subject to 'reasonable restrictions' imposed by law. ", "The instant case falls well-nigh within the ratio of this 's decision in (1), wherein it was held that a rice mill-owner has no locus standi to challenge under Article 226 , the setting up of a new rice-mill by another even if such setting up be in contravention of s. 8(3)(c) of the Rice Milling Industry (Regulation) Act, 1958 because no right vested in such an applicant is infringed. ", "For all the foregoing reasons, we are of opinion that the appellant had no locus standi to invoke this special jurisdiction under article 226 of the Constitution. Accordingly, we answer the question posed at the commencement of this judgment, in the negative, and on that ground, without entering upon the merits of the case, dismiss this appeal with costs. ", "S.R. Appeal dismissed. (1) [1970] S.C.R. 846."], "relevant_candidates": ["0000690534", "0000693740", "0000844819", "0000961304", "0001125589", "0001298157", "0001553344", "0001954076", "0001994207"]} {"id": "0001752601", "text": ["PETITIONER: Vs. RESPONDENT: STATE OF BIHAR & ORS. DATE OF JUDGMENT: 28/08/1969 BENCH: , M. (CJ) BENCH: , M. (CJ) SHELAT, J.M. BHARGAVA, VISHISHTHA HEGDE, K.S. GROVER, A.N. CITATION: 1970 AIR 1436 1970 SCR (2) 100 1969 SCC (3) 838 CITATOR INFO : D 1972 SC2301 (30) RF 1975 SC1389 (1,6,7,16) D 1976 SC 714 (75) RF 1976 SC1654 (5,25,51) F 1980 SC 614 (29) RF 1980 SC1955 (41) RF 1981 SC 711 (1) D 1982 SC 697 (27) RF 1986 SC 85 (26) RF 1986 SC1323 (27) E 1991 SC1676 (45,46,47,49,55) ACT: Constitution of India, 1950, Seventh Schedule List I, Entry 54, List II Entry 23-Government of India Act, 1935, Seventh Schedule, List I Entry 36, List II Entry 23-Power to legislate as to mines and minerals-'s power is subject to 's power- had no jurisdiction to enact 2nd proviso to s. 10(2) of Bihar Land Reforms Act, 1950-Field already covered by s. 15 of the Mines and Minerals (Regulation and Development) Act 67 of 1957-Rule 20(2) of Bihar Minor Minerals Concession Rules, 1964 invalid for lack of legislative support. HEADNOTE: Entry 54 of the Union List I in the Seventh Schedule to the Constitution confers power for the regulation of mines and mineral development to the extent to which such regulation and development under the control of the union is declared by by law to be expedient in the public interest. The corresponding entry in the Federal List I under the Government of India Act, 1935 was entry 36 which besides mines and mineral development dealt with oilfields also. Entry 23 of List II of the Constitution gives power for regulation of mines and mineral development to the s subject to entry 54 of List I. The corresponding entry under the Government of India Act was entry 23 of List Il. in exercise of its power under entry 36. of List I in the Government off India Act enacted the Mines and Minerals (Regulation and Development) Act 53 of 1948 which dealt with mines, mineral development as well as oilfields. Rule 4 of the Mineral Concession Rules, 1948 made under the Act which came into force on October 25, 1949 gave power to the Government to frame rules for the regulation and development of 'minor minerals' as defined in the Rules. In 1957 passed the Mines and Minerals (Regulation and Development) Act 67 of 1957. The Act of 194-8 was adapted to deal with oilfields and gas only. In Act 67 of 1957 the provisions relating to regulation of mines in s.s. 4 to 13 were by s. 14 made inapplicable to 'minor minerals' as defined in the Act. Rules relating to minor minerals were under s. 15 to be made by Governments and till such rules were made any rules enforce at the commencement of the Act were to continue. The appellant purchased in 1963 a lease for quarrying minor minerals as defined in Act 67 of 1957 from a vendor who had taken the original lease from the then landlords in 1955. When under s. 10(1) of the Bihar Land Reforms Act, 1950) the rights of the intermediary landlord vested in the of Bihar the said became lessor of the appellant's lease. The lease was confirmed on behalf of the and rent under the terms of the original lease was paid by the appellant up to September 1965. had not framed any rules relating to minor minerals under Act 53 of 1948 but it framed the Bihar Minor Mineral Contession Rules, 1964 under s. 15 of the Act 67 of 1957. Also, in 1964 the Bihar legislature amended s. 10(2) of the Reforms Act. A second pro viso was added to sub-el. (2) whereby the terms and conditions of and pubsisting leases of minor minerals would be substituted by the terms and 101 conditions laid down in the Bihar Minor Mineral Concession Rules to the extent that the former were inconsistent with the latter. Rule 20 of the said Bihar Rules as originally framed provided for realisation of dead rent, royalty and surface rent in 'respect of leases granted or renewed. In terms the rule was prospective only. But in December 1964 it was amended by the addition of a second sub-rule according to which the provisions as to dead rent etc. would also apply to leases granted or renewed prior to the date of the commencement of the Act and subsisting on such date. On the strength of the amended s. 10(2) of the Reforms Act and the amended r. 20 demanded from the appellant, dead rent, royalty and surface rent contrary to the terms of his lease. The appellant thereupon filed a writ petition in . Dissatisfied with the judgment of that court the appellant came to this Court. It was contended on behalf of the: appellant: (i) that the subject of regulation of mines and mineral development came within the exclusive jurisdiction of as a result of the passing of Act 67 of 1957 with the result that the Legislature was left with no power to pass the second proviso to s. 10(2) and the said proviso was therefore ultra vires, (ii) that r. 20(2) being without legislative support could not touch a lease granted, in 1955. On behalf of the respondent it was urged that (a) the 2nd proviso to s. 10(2) of the Reforms Act fell not under entry 23 but under entry 18 of List II which dealt with land and land tenures; (b) Act 67 of 1957 did not result in control of the union as contemplated by entry 54 in List I and therefore the 's jurisdiction under entry 23 List II was not ousted; (c) modification of leases was not covered by s. 15 of the said Act and since was silent on that subject the field remained open for legislation by the . HELD: (i) Entry 54 of the Union List speaks both of regulation of mines and mineral development and entry 23 is subject to entry 54. It is open to to declare that it is expedient in the public interest that the control should vest in . Once: this declaration is made and the extent laid down the subject of the legislation to the extent laid down becomes an exclusive subject for legislation by . Any legislation by the after such declaration and touching upon the field disclosed. in the field is extracted from the legislative competence of the . [113 B--D] The declaration contemplated by entry 54 is contained in s. 2 of Act 67 of 1957 and the is given control as to regulation of mines and mineral development to the extent provided in the Act. Thus what is left within the competence of Government has to be worked out from the terms of the Act itself. [113 F] The Act deals with minor minerals separately from other minerals. In respect of minor minerals it provides in s. 14 that ss. 4 to 13 do not apply to prospecting licences and mining leases. It goes on to state in s. 15 ( 1 ) that the Government may by 'notification make 'rules for regulating the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith, and in s. 15(2) that till such rules. are framed any rules already in force would continue. No 'rules existed in the of Bihar which could be preserved under s. 15(2) . Therefore the whole subject of legislation was covered in respect of minor minerals by s. 15(1) . Whether rules under that section were made or not the topic was covered by ary legislation and to that extent the powers of the Legislature were wanting. [114 G--115 B] It must accordingly be held that by the declaration in s. 2 and by the enactment of s. 15 the whole of the field relating' to minor minerals came 102 within the jurisdiction of and no scope was left 'for the enactment of the second proviso to s. 10(2) of the Land Reforms Act. The second proviso was therefore ultra vires. . 2 S.C.R. 537 and : ", "(ii) Vested interests cannot be taken away except by law made by a competent legislature. Mere rule-making power is not sufficient. In view of Act 67 of 1957 had lost jurisdiction to legislate about minor minerals. The power of ; to modify existing mining leases was confined under s. 16 of the Act to leases granted before October 25, 1949. For modifying leases granted after that date legislation by on the lines of s. 16 was necessary. Rule 20(2) of the Bihar Minor Concession Rules, 1964 was ineffective 'for the purpose. It could not derive sustenance from the 2nd proviso to s. 10(2) of the Reforms Act as that proviso was not validly enacted. There was also no other legislative support since s. 15 of the Act of 1957 did not contemplate alteration of terms of leases already in existence before that Act was passed. [116 B--E; 116 G; 117 D] ", "(iii) The contentions raised on behalf of the must be rejected: (a) The abolition of the rights of intermediaries in the mines and vesting of these rights as lessors in the Government was a topic connected with land and land tenures. But after the mining leases stood between the Government and the leases, any attempt to regulate those mining leases will fall not in entry 18 but in entry 23. The pith and substance of the amendment to s. 10 of the Reforms Act falls within entry 23 although it incidentally touches land. [115 C---E] ", "(b) consists of its three limbs namely, , Government and Judiciary. Control by is therefore control of the within the meaning of entry 54 and for the purpose of ousting jurisdiction under entry 23. [115 F--G] ", "(c) The entire legislative field relating to minor minerals having been withdrawn from the State legislature it could not be said that because s. 15 did not deal with modification of leases the State was free to legislate in this field. [117 A--C] & CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 685 to 688 of 1967. ", "Appeals from the judgments and orders dated November 1, 1966, December 21, 1966 and December 23, 1966 of in C.W.J.C. Nos..1036, 686, 1200 and 778 of 1965 respectively. ", " and , for the appellants (in all the appeals). ", ", and , for the respondents (in C.A. No.. 685 o.f 1967). , for the respondents (in C.A. No. 686 of 1967). , for the respondents Nos. 1 to 3 (in C.As. Nos. 687 and 688 of 1967). ", "103 ", ", and , for respondent No. 4 (in C.A. No. 687 of 1967) and respondents Nos. 5 to 8 (in C.A. No. 688 of 1967). ", ", for the intervener (in C.A. No. 685 of 1967). The Judgment of the Court was delivered by , This judgment will also govern the. disposal of Civil Appeals 686 ( v. State of Bihar and others), 687 ( v. State of Bihar and others) and 688 (M/s. Pakur Quarries Private Ltd. & . v. State of Bihar and others) of 1967. These four appeals have been brought against a common judgment, November 1, 1966, of and arise out of four petitions under Art. 226 of the Constitution filed to question the validity of Proviso (2) to s. 10(2) added by Bihar Land Reforms (Amendment) Act 1964 (Bihar Act 4 of 1965), and the operation of the second sub-rule of r. 20 added on December 10, 1964 by a notification of the Governor in the Bihar Minor Mineral Concession Rules, 1964. The facts of all the four cases are similar and the same points arise ,for determination. It is, therefore, sufficient to state the facts in Civil Appeals 685 and 686 as illustrative of the others as well. ", "One obtained on March 23, 1955 from and Smt. acting for herself' and also as legatee under the will of one , registered leases to quarry stone ballast, boulders and chips from and upon Blocks Nos. 32, 45/1 45/2 and 45/3 in tauzi No. 1452, khata No. 1 in Mouza Malpahari No. 89 in Pakur SubDivision of Santhai Parganas. The leases were to commence from November 1, 1954 and to end on October 31, 1984, that is to say, they were for a total period of 30 years. was working under the name and style of ''. He sold his rights, title and interest by a registered sale- deed on September 9, 1963 to the present appellant. It is admitted that rent under the terms of the original lease was deposited upto September 1965. ", "On the passing of the Bihar Land Reforms Act, 1950 (Act 30 of 1950) the ex-landlords ceased to have any interest from the date of vesting and in their place the State of Bihar became lessor under s. 10(1) of the Land Reforms Act. The terms of s. 10 were as given below. After the vesting of the estate of the inter- ", "\"10. Subsisting leases of mines and minerals:- (1)Notwithstanding anything contained in this Act, where immediately before the date of vesting of the estate or tenure there is a subsisting lease of mines or minerals comprised in the estate or tenure or any part thereof, the whole or that part of the estate or tenure comprised in such lease shall, with effect from the date of vesting, be deemed to have been mediaries, the State of Bihar as the new lessor recognised the lease for the quarrying of stones for the remaining period and the Deputy Commissioner, asked for the rent from the date of vesting to 30 April, 1965 at the rate of Rs. 200/per year as stated in the original lease. This was by a letter issued from his office on February 2, 1963. On December 10, 1964 the appellants received a letter which gives the gist of the facts on which the present controversy starts and the relevant part may be quoted here: ", "\"Government have been pleased to amend the section 10 of Bihar Land Reforms Act, 1950, and according to which the terms and conditions in regard to leases for minor minerals stand statutorily substituted by the corresponding terms and conditions by the Bihar Minor Mineral Concession Rules, 1964. As a result of this, rent and royalty etc. in respect of minor minerals in the State irrespective of the date on which the lease was granted are to be paid by all categories of leases according to the rates given in the aforesaid Rules with effect from 27-10-64\". ", "'The 'appellants denied their liability to pay. The Government informed them by letter as follows: ", "\"This is to inform you that the terms and conditions of your mining lease in so far as they are inconsistent with the Bihar Minor Mineral Concession Rules, 1964, framed by under section 15 of the Mines & Minerals (Regulation & Development) Act , 1957, stand substituted by the corresponding terms and conditions prescribed by the Bihar Mineral Concession Rules, 1964, from 27-1-1964. Accordingly, leased by to the holder of the said subsisting lease for the remainder of the term of that lease and such holder shall be entitIed to retain possession of the lease-hold property. ", "(2) The terms and conditions of the said lease by shall mutatis mutandis be the same as the terms and conditions of the subsisting condition that, if in the opinion of the holder of the lease had not, before the date of the commencement of this Act, done any prospecting or development work, shall be entitled at any time before the expiry of one year from the said date to determine the lease by giving three months' notice in writing: Provided that nothing in this sub- section shall be deemed to prevent any modifications being made in the terms and conditions of the said lease in accordance with the provisions of any Central Act for the time being in force regulating the modification of existing mining leases. (3) The holder of any such lease of mines and minerals as is referred to in subsection (1) shall not be entitled to claim any damages from the outgoing proprietor or tenure- holder on the ground that the terms of the lease executed by such proprietor or tenure-holder in respect of the said mines and minerals have become incapable of fulfilment by the operation of this Act. ", "105 ", "dead rent, royalty and surface rent in addition to the other substitution as per Bihar Mineral Concession Rules, 1964, will be as follows :-- ", "1. Dead rent .... Rs. 50/- per acre perannum. ", "2. Royalty .... Rs. 3/- per 100 cft. of stone chips. Rs. 2/- per 100 cft. of stone ballast and boulders. Rs. 4/- per 100 cft. on building stones. Re. 1/-per 100 Nos. of stones 'setts'. 3. Surface rent 3 .. Rs. 10 per acre per year.\" ", "It is this additional demand and the liability to pay, which is the subject of controversy here. contends that the terms of the original lease have been validly altered by the operation of the second proviso to s. 10 (2) of the Bihar Land Reforms Act added first by Ordinance III of 1964 and later incorporated again by the Bihar Land Reforms (Amendment) Act, 1964 (Act 4 of 1965) and the addition of s. 10A to the Act by the same enactments. The material part of the second section of Act 4 of 1965 is quoted below. Section 10A provided for the vesting of the interest of leases of mines or minerals which were subject to such leases and need not be read here. The State Government also relied upon the Bihar Mineral Concession (First Amendment) Rules, 1964 by which a second sub-rule was added to Rule 20. The twentieth rule, purporting to be framed under s. 15 of the Mines and Minerals (Regulation 'and Development) Act , 1957 was amended on December 19, 1964 and now reads: ", "Rule 20. ( 1 ) Dead rent, royalty and surface rent.-- ", "When a lease is granted or renewed. ", "(a) dead rent shall be charged at the rates specified in Schedule 1, ", "(b) royalty shall be charged at the rates specified in Schedule II, and ", "(c) surface rent shall be charged at the rates specified by the . in from time to time. ", "2. Amendment of section 10 of Bihar Act XXX of 1950.-- ", "In Section 10 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950) (hereinafter referred to as the said Act).-- ", "(a) in sub-section (2), the following second proviso shall be added, namely :- ", "\"Provided further that the terms and conditions of the said lease in regard to minor minerals as defined in the Mines and Minerals (Regulation and Development) Act , 1957 (Act LXVII of 1957), shall, in so far as they are inconsistent with the rules made by under section 15 of that Act, stand substituted by the corresponding terms and conditions prescribed by those rules and if further ascertainment and settlement of the terms will become necessary then necessary proceedings for that purpose shall be undertaken by the Collector\"; and ", "(b) after sub-s. LISup. Cl/70--8 (2) On and from the date of commencement of these rules, the provisions of sub-rule (1) shall also apply to leases granted or renewed prior to the date of such commencement and subsisting on such date.\" The contention is that the amendment of s. 10 of the Bihar Land Reforms Act is ultra vires the Constitution and that rule 20(2) does not legally entitle the recovery of the dead-rent, royalty etc. as in the Schedules to the Bihar Minor Mineral Concession Rules, 1964. ", "To understand fully the argument on behalf of the appellants a resume of the legislation on the subject of mines and minerals is necessary. Under the Government of India Act, 1935, the subject of Mines and Minerals was covered by Entry 36 of the Federal Legislative List I and entry No. 23 of the 'Provincial Legislative List II of the 7th Schedule. These entries read as follows: ", "\"Entry 36. Regulation of mines and oil fields and mineral developments to which such regulation and development under a control is declared by law to be expedient in the public interest.\" \"Entry 23. Regulation of mines and oil fields and mineral development subject to the provisions of List I with respect to regulation and development under control.\" ", "When the Indian Independence Act, 1947 was passed the word federal' where it occurs for the first time in entry 36 and in entry 23 was changed to 'dominion'. The entries are practically repeated in the present Constitution and may be read immediately here: \"Entry 54, of List H-- List--reads: \"Regulation of mines and mineral development to the extent to which such regulation and development under the control of the is declared by by law to be expedient in the public interest.\" Entry 23 of List II--State List--reads: \"Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the .\" The difference between the entries of the Government of India Act, 1935 and the present Constitution lies in the removal of oilfields from the entries and the declaration now must be by . Entry 53 in List I deals with oilfields and mineral resources. ", "107 ", "In 1948 enacted the Mines and Minerals (Regulation and Development) Act , 1948 (Act 53 of 1948). It received the assent of the Governor-General on September 8, 1948. It was an Act to provide for the regulation of mines and oilfields and for the development of minerals. In s. 2 of that Act is to be found the declaration contemplated by entries 36 and 23, 7th Schedule of the Government of India Act, 1935. That declaration reads as follows: ", "\"2. It is hereby declared that it is expedient in the public interest that should take under its control the regulation of mines and oil fields and the development of minerals to the extent hereinafter provided.\" ", "Section 3 of the Act of 1948 contained definitions. There were definitions of 'mine' and 'minerals'. The former meant an excavation for the purpose of searching for or obtaining minerals and included an oil-well and the latter included natural gas and petroleum. Section 4 provided that no mining lease would be granted after the commencement of that Act otherwise than in accordance with the rules made under that Act and that a mining lease granted contrary to the provisions would be void and of no effect. Section 5 empowered , by notification to make rules for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area. In particular the rules could provide for the manner in which, the minerals or areas in respect of which and the persons by whom, 'applications for mining leases could be made and the fees payable, the terms on which and the conditions subject to which, mining leases might be granted, the areas and the period for which any mining lease might be granted and the maximum and minimum rent payable by a lessee, whether the mine was worked or not. Under s. 6 had power to make rules as respect mineral development. Section 7 then provided as follows: ", "\"7. (1) The Central Government may, by notification in the official , make rules for the purpose of modifying or altering the terms and conditions of any mining lease granted prior to the commencement of this Act so as to bring such lease into conformity with the rules made under sections 5 and 6 : ", "Provided that any rules so made which provide for the matters mentioned in clause ", "(c) of sub-section (2) shall not come into force until they have been approved, either with or without modification's, by '. ", "108 ", "(2) The rules made under sub-section (1) shall provide-- ", "(a) for giving previous notice of the modification or alteration proposed to be made thereunder to the lessee, and when the lessor is not , also to the lessor and for affording them an opportunity of showing cause against the proposal. ", "(b) for the payment of compensation by the party who would be benefited by the proposed modification or alteration to the party whose rights under the existing lease would thereby be adversely affected; and ", "(c)for the principles or which, the manner in which and the authority by which the said compensation shall be determined.\" ", "Section 8 provided that might by notification direct that 'any power exercisable under that Act might be exercised, subject to such conditions if any, as might be specified by such officer or authority or might be specified in the direction. In furtherance of the powers conferred framed the Mineral Concession Rules 1949 and they came into force on the twenty-fifth day of October 1949. These rules for the first time defined minor minerals and after amendments from time to time the term meant: ", "\"3 (ii) 'minor mineral' means building stone, boulder, shingle, gravel, Chalcedony pebbles (used ,for ball mill purposes only), limeshell, kankar and limestone used for lime burning, murrum, brick-earth (Fuller's earth), Bentonite, ordinary clay, ordinary sand (used for non- industrial purposes), road metal, reh-matti, slate and shale when used for building material.\" ", "Rule 4 however provided: ", "\"4. Exemption.--These rules shall not apply to minor minerals, the extraction of which shall be regulated by such rules as may prescribe.\" ", "The word \"provincial\" was later changed to 'State'. Although some of the Provinces (now ) made Minor Mineral Concession Rules, it is admitted that Bihar Government did not frame any such rules. ", "The leases of the appellants' predecessors were granted in 1955 during the subsistence of the Act of 1948 and the Rules of 1949. It is also to be noticed that a fresh declaration was made by as required by entry 54 List I--Union List of the 7th Schedule of the Constitution. The existing laws, however, continued. Without a declaration by the field of legislation might have been open to the Legislatures under entry 23 of List II-- List of the Constitution but no law was made except what was enacted by in the Land Reforms Act about vesting of mines in the and the emergence of the as a lessor in place of all original lessors. ", "Further rules were made by in 1955 and 1956. In 1955 Minerals Conservation and Development Rules were made which were later replaced in 1958. On September 4, 1956, in exercise of the powers conferred by s. 7 of the Act of 1948 made the Mining Leases (Modification of Terms) Rules 1956. Under these rules existing Conservation 'and Development Rules. The expression 'existing mining leases were to be brought into conformity with the Minerals Conservation and Development Rules. The expression 'existing mining leases' was defined as a mining lease granted before 25th day of October 1949 and subsisting at the commencement of those rules 'but did not include any lease in respect of any minor mineral within the meaning of clause (c) of s. 3 of the Act of 1948. ", "We now come to the year 1957. In that year enacted the Mines and Minerals (Regulation and Development Act , 1957 (Act 67 of 1957). It came into force from December 28, 1957. Act 67 of 1957 made amendments in the Act of 1948 so as to make the latter relate to oilfields only. All references to minerals other than oil were removed, with the result that it became legislation exclusively relating to oil and gas. Since the Act of 1948 was thus altered, enacted new provisions for minerals in Act 67 of 1957. We are primarily concerned with this Act in these appeals. A glance at some of the provisions of Act 67 of 1957 is necessary. The Act 67 of 1957 came into force on 1st June, 1958 and extended to the whole of India. It contained the following declaration in s. 2 : ", "\"It is hereby declared that it is expedient in the public interest that the should take under the control the regulation of mines and the development of minerals to the extent hereinafter provided.\" ", "By definition minerals excluded mineral oils because the Act of 1948 exclusively dealt with oil. 'Minor minerals' were defined to mean building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes and any other mineral which may, by notification in , declare to be a minor mineral. Act 67 of 1957 contained 33 sections which were separated by general headings showing the topics dealt with. The first group of sections 4- -9 contained general restrictions on undertaking prospecting and mining operations. of this group we may quote here s. 4 which will be considered later: ", "\"4. Prospecting or mining operations to be under license or lease-- ", "(1 ) No person shall undertake any prospecting or mining operations in ,any area, except under and in accordance with the terms and conditions of a prospecting licence or, as the case may be, a mining lease, granted under this Act and the rules made thereunder: Provided that nothing in this sub-section shall affect any prospecting or mining operations undertaken in any area in accordance with the terms and conditions of a prospecting licence or mining lease granted before the commencement of this Act which is in force at such commencement. ", "(2) No prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder.\" ", "Section 5 lays down restrictions on the grant of prospecting licences or mining leases. Section 6 prescribes. the maximum area for which a prospecting license or mining lease may be granted and section 7 the periods for which prospecting licences may be granted or renewed and section 8 the periods for which mining leases may be granted or renewed. Section 9 fixes the royalties in respect of mining leases. ", "Then follows another group of sections 10- -12 which lays down the procedure for obtaining prospecting licences or mining leases in respect of land in which the minerals vest in the . The next group of sections 13- -16 is headed Rules for regulating the grant of prospecting licences and mining leases. Section 13 gives power to the Central to make rules in respect of minerals. Section 14 however excludes the application of sections 4- -13 to minor minerals. It reads: ", "\"The provisions of sections 4 to 13 (inclusive) shall not apply to prospecting licences and mining leases in respect of minor minerals.\" ", "Section 15 gives power to the State Governments to make rules in respect of minor minerals. It reads: ", "111 ", "\"15 (1 ). The State Government may, by notification in the official , make rules. for regulating the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith. ", "(2) Until rules are made under sub- section (1 ), any rules made by a State Government regulating the grant of prospecting licences and mining leases m respect of minor minerals which are in force immediately before the commencement of this Act shall continue in force.\" ", "Section 16 gives power to modify mining leases granted before 25th October, 1949. It reads: ", "\"16(1 ). All mining leases granted before the 25th day of October, 1949, shall, as soon as may be after the commencement of this Act, be brought into conformity with the provisions of this Act and the rules made under sections 13 and 18 : ", "Provided that if the Central Government is of opinion that in the interests of minerals development it is expedient so to do, it may, for reasons to be recorded, permit any person to hold one or more such mining leases covering in any one State a total area in excess of that specified in clause (b) of section 6 or for a period exceeding that specified in sub-section (1 ) of section 8 . (2) The Central Government may, by notification in the official , make rules for the purpose of giving effect to the provisions of sub-section (1) and in particular such rules shall provide- ", "(a) for giving previous notice of the modification or alteration proposed to be made in any existing mining lease to the lessee and where the lessor is not also to the lessor and for affording him an opportunity of showing cause against the proposal. ", "(b) for the payment of compensation to the lessee in respect of the reduction of any area covered by the existing mining. lease; and ", "(c) for the principles on which, the manner in which and the authority by which, the said compensation shall be determined.\" ", "Section 17 stands by itself as a group and contains special powers of to undertake prospecting or minning operations in certain cases. Section 18 deals with mineral development 'and gives additional rule making power to the . Next follow some miscellaneous provisions; of these, only two interest us. Section 19 lays down that prospecting licences or mining leases granted, renewed or acquired in contravention of the provisions of the Act shall be void and of no effect and section 20 that the provisions apply to prospecting licences or mining leases whether granted before or after the Act. The rest of this Act does not concern this dispute. ", "It may be pointed out here that the rules made under s. 13 do not apply to minor minerals in view of the provisions of s. 14 . The State of Bihar had not made any rules till the Bihar Minor Mineral Concession Rules, 1964 were made. The modification of the terms of existing mining leases was provided for in s. 16 but that provision applied to mining leases granted before 25th October, 1949. The provisions of Mining Leases (Modification of Terms) Rules, 1955 did not apply to minor minerals because the definition of 'existing mining lease' excluded a lease in respect of any minerals. The power to modify the existing leases in the case had to be found elsewhere. ", "The argument of the appellant is that apart from the provisions of the 2nd proviso to s. 10 added to the Land Reforms Act, 1950 in 1964 by Act IV of 1965 and second sub- rule added to rule 20 of the Bihar Minor Mineral Concession Rules, 1964, there is no power to modify the terms. These provisions of law are said to be outside the competence of and . With regard to it is contended that the scheme of the relevant entries in the Union and State List is that to the extent to which regulation of mines and mineral development is declared by by law to be expedient in the public interest, the subject of legislation is withdrawn from the jurisdiction of and therefore Act 67 of 1957 leaves no legislative field to to enact Act 4' of 1965 amending the Land Reforms Act. As regards Rule 20(2) it is contended that the rule making power of its own force cannot reach mining leases granted in 1955 and that this could only be done by a competent legislature. These are the two matters which need decision. ", "The main arguments are supplemented by the following contentions. That the Bihar Rules in so far as they make demands of rent and royalty on the existing leases which were executed prior to their coming into force are beyond the power to make rules in respect of minor minerals under s. 15 of Act 67 of 1957, that s. 15 itself is unconstitutional and void because it delegates legislative power to the rule-making authority and it is excessive delegation and that the amendment of Bihar Land Reforms. Act is void because it affects the fundamental rights of the appellants guaranteed under Articles 31 'and 19 of the Constitution. ", "113 ", "Although these supplementary arguments were raised it is obvious that they can arise according as the two main arguments are allowed or disallowed. Therefore it is necessary to address ourselves to the first argument that the legislative competence to enact the amendment to s. 10 of the Reform Act was wanting. As the amendment was made after Act 67 of 1957 we have to consider the position in relation to it. Entry 54 of the Union List speaks both of regulation of mines and minerals development and entry 23 is subject to entry 54. It is open to parliament to declare that it is expedient in the public interest that the control should rest in . To what extent such a declaration can go is for to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by . Any legislation by the after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is abstracted from the legislative competence of the Legislature. This proposition is also self evident that no attempt was rightly made to contradict it. There are also two decisions of this reported in the and Ors.(1) and . (2) in which the matter is discussed. The only dispute, therefore, can be to what extent the declaration by leaves any scope for legislation by the Legislature. If the impugned legislation falls within the ambit of such scope it will be valid; if outside it, then it must be declared invalid. ", "The declaration is contained in s. 2 of Act 67 of 1957 and speaks of the taking and the control of the regulation of mines and development of minerals to the extent provided in the Act itself. We have thus not to look outside Act 67 of 1957 to determine what is left within the competence of but have to work it out from the terms of that Act. In this connection we may notice what was decided in the two cases of this Court. In the Hingir-Rampur(1) case a question had arisen whether the Act of 1948 so completely covered the fields of conservation and development of minerals as to leave no room for legislation. It was held that the declaration was effective even if the rules contemplated under the Act of 1948 had not been made. However, considering further whether a declaration made by a law could be regarded as a declaration by for the purpose of entry 54, it was held that it could not and there was thus a lacuna which the Adaptation of 2 S.C.R. 537. (2) 4 S.C.R. ", "461. Laws Order, 1950 could not remove. Therefore, it was held that there was room for legislation by . ", "In the case(1) the firm was working a mining lease granted under the Act of 1948. then passed the Orissa Mining Areas Development Fund Act, 1952, and levied a fee for the development of mining areas within the State. After the provisions came into force a demand was made for payment of fees due from July 1957 to March 1958 and the demand was challenged. held that after the coming into force of Act 67 of 1957 the Orissa Act must be held to be non-existent. It was held on appeal that since Act 67 of 1957 contained the requisite declaration by under entry 54 and that Act covered, the same field as the Act of 1948 in regard to mines and mineral development, the ruling in Hingir Rampur(2) case applied and as ss. 18(1) and (2) of the Act 67 of 1957 were very wide ruled out legislation by . Where a superior legislature evinced an intention to cover the whole field, the enactments of the other legislature whether passed before or after must be held to be overborne. It was laid down that inconsistency could be proved not by a detailed comparison of the provisions of the conflicting Acts but by the mere existence of two pieces of legislation. As s. 19 ( 1 ) covered the entire field, there was no scope for the argument that till rules were framed under that section, room was available. ", "These two cases bind us and apply here. Since amended the Land Reforms Act after the coming into force of Act 67 of 1957, the declaration in the latter Act would carve out a field to the extent provided in that Act and to that extent entry 23 would stand cut down. To sustain the amendment the must show that the matter is not covered by the Central Act . The other side must, of course, show that the matter is already covered and there is no room for legislation. We have already analysed Act 67 of 1957. The Act takes over the control of regulation of mines and development of minerals to the ; of course, to the extent provided. It deals with minor minerals separately from the other minerals. In respect of minor minerals it provides in s. 14 that ss. 4- -13 of the Act do not apply to prospecting licences and mining leases. It goes on to state in s. 15 that the Government may, by notification in the official , make rules for regulating the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith, and that until rules 'are made, any rules made by the Government regulating the grant of prospecting licences and mining lease in respect of minor minerals which were in force immediately before the commencement of (1) 4S.C.R.461. (2) 2 S.C.R. ", "537. the Act would continue in force. It is admitted that no such rules were made by . It follows that the subject of legislation is covered in respect of minor minerals by the express words of s. 15(1) . has undertaken legislation and laid down that regulation of the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith must be by rules made by . Whether the rules are made or not the topic is covered by ary legislation and to that extent the powers of are wanting. Therefore, there is no room for legislation. ", "Mr. argued that the topic of legislation concerns land and therefore falls under entry 18 of the State List and he drew our attention to other provisions on the subject of mines in the Land Reforms Act as originally passed. The abolition of the rights of intermediaries in the mines and vesting these rights as lessors in was a topic connected with land and land tenures. But after the mining leases stood between and the lessees, any attempt to regulate those mining leases will fall not in entry 18 but in entry 23 even though the regulation incidentally touches land. The pith and substance of the amendment to s. 10 of the Reforms Act falls within entry 23 although it incidentally touches land and not vice versa. Therefore this amendment was subject to the overriding power of as declared in Act 67 of 1957 in s. 15 . Entry 18 of the State List, therefore, is no help. ", "Mr. next contended that the provisions of ss. 4- -14 do not envisage control of the which is a condition precedent to the ousting of the jurisdiction under Entry 23. Obviously Mr. reads as equivalent to Government. This is erroneous. consists of its three limbs, namely, , Government and the Judiciary. Here the control is being exercised by , the legislative organ of the and that is also control by the . By giving the power to to make rules, the control of is not negatived. In fact, it establishes that the is exercising the control. In view of the two rulings of this referred to earlier we must hold that by enacting s. 15 of Act 67 of 1957 the has taken all the power to itself and authorised to make rules for the regulation of leases. By the declaration and the enactment of s. 15 the whole of the field relating to minor minerals came within the jurisdiction of and no scope was left for the enactment of the second proviso to s. 10 in the Land Reforms Act. The enactment 'of the proviso was, therefore, without jurisdiction. ", "116 ", "This leaves for consideration the second sub-rule added to Rule 20 in December, 1964 by . It will be noticed that the rule as it stood previously applied prospectively to all 1eases which came to be executed after the promulgation of the rules. The second sub-rule made ,applicable those provisions to all leases subsisting on the date of the promulgation of the rules. The short question is whether the rules could operate on leases in existence prior to their enactment without the authority of a competent legislature. Vested rights cannot be taken away except under authority of law ,and mere rule-making power without the support of a legislative enactment is not capable of achieving such an end. There being two legislatures to consider, namely, and we have first to decide which legislature would be competent to grant such power. ", "We have already held that the whole of the legislative field was covered 'by the ary declaration read with provisions of Act 67 of 1957, particularly s. 15 . We have also held that entry 23 of List II was to that extent cut down by entry 54 of List I The whole of the topic of minor minerals became a subject. The allowed rules to be made but that did not recreate a scope for legislation at the State level. Therefore, if the old 1eases were to be modified a legislative enactment by on the lines of s. 16 of Act 67 of 1957 was necessary. The place of such a law could not be taken by legislation by as it purported to do by enacting the second Proviso to s. 10 of the Land Reforms Act. It will further be seen that in s. 4 of Act 67 of 1957 created an express bar although s. 4 was not applicable to minor minerals. Whether s. 4 was intended to apply to minor minerals as well or any part of it applies to minor minerals are questions we cannot consider in view of the clear declaration in s. 14 of Act 67 of 1957 that the provisions of ss. 4- -13 (inclusive) do not apply. Therefore, there does not exist any prohibition such as is to be found in s. 4(1) Proviso in respect of minor minerals. Although s. 16 applies to minor minerals it only permits modification of mining leases granted before October 25, 1949. In regard to leases of minor minerals executed between this date and December 1964 when Rule 20(1) was enacted, there is no provision of law which enables the terms of existing leases to be altered. A mere rule is not sufficient. ", "Faced with this difficulty Mr. attempted to claim power for the second Proviso to s. 10 of the Land Reforms Act .from entry 18 of List II, a contention we have rejected. He also attempted to find a field for enactment by for the said proviso. This argument was extremely ingenious and needs separate notice. ", "117 ", "The contention was that modification of existing leases was a separate topic altogether and was not covered by s. 15 of Act 67 of 1957. Therefore if had not said anything on the subject the field was open to . The other side pointed to the words 'and for purposes connected therewith' in s. 15 and contended that those words were sufficiently wide to take in modification of leases. Mr. 's argument is unfortunately not tenable in view of the two rulings of this Court. On the basis of those rulings we have held that the entire legislative field in relation to minor minerals had been withdrawn from . We have also held that vested rights could only be taken away by law made by a competent legislature. Mere rule-making power of was not able to reach them. The authority to do so must, therefore, have emanated from . The existing provision related to regulation of leases and matters connected therewith to be granted in future and not for alteration of the terms of leases which were in existence before Act 67 of 1957. For that special legislative provision was necessary. As no such parliamentary law had been passed the second sub-rule to Rule 20 was ineffective. It could not derive sustenance from the second Proviso to s. 10(2) of the Land Reforms Act since that proviso was not validly enacted. In the result, therefore, these appeals must succeed. They are allowed with costs. A mandamus shall issue restraining from enforcing the provisions of the second Proviso to s. 10(2) added by Bihar L, and Reforms (Amendment) Act, 1964 (Bihar Act 4 of 1965) and the second sub-rule of Rule 20 added by a notification on December 10, 1964 to the Bihar Mineral Concession Rules, 1964. ", "G.C. Appeals allowed."], "relevant_candidates": ["0000865455", "0001464523"]} {"id": "0001753677", "text": ["PETITIONER: , BOMBAY Vs. RESPONDENT: COLLECTOR OF CENTRAL EXCISE, BOMBAY DATE OF JUDGMENT31/01/1989 BENCH: , SABYASACHI (J) BENCH: , SABYASACHI (J) RANGNATHAN, S. CITATION: 1989 AIR 1153 1989 SCR (1) 382 1989 SCC (1) 602 JT 1989 (1) 450 1989 SCALE (1)226 CITATOR INFO : R 1989 SC2066 (5) R 1990 SC 59 (4) R 1990 SC1676 (11) R 1990 SC1893 (4) RF 1991 SC 999 (7) ACT: s and Salt Act , 1944/ Rules, 1944: Sections 2(d) , 2(f) , 3 , 35-L and 35-P /Rules, 10-A 173-J. Excise duty--Excisable goods--Mere fact that an article falls within Tariff Schedule is not enough--Taxable event is 'manufacture of goods'--Which are marketable or capable of being marketed-Marketability is an essential element--Burden of proof on revenue that goods are marketable. Tariff Act , 1985: Schedule Item 15-A(2)-Production of crude PVC films--Non-marketable--Intermediate products--Used for captive consumption in end products such as leather cloth--Laminated jute mattings and PVC tapes--Whether clas- sifiable and liable to duty. Words and Phrases: 'Excisable goods'-'Manufacture'--Meaning of. HEADNOTE: The appellant is a manufacturer of Crude PVC films for the purpose of use in final products such as leather cloth and laminate jute mattings and PVC tapes both insulation and adhesive. The films manufactured by the appellant were subject matter of adjudication by the Excise authorities during the period commencing from 1st March, 1970 to 29th May, 1971. The Appellate Collector of by an order dated 14.1.1974 held that the appellant had produced sufficient evidence to prove that the said Crude PVC films were not marketable and were therefore not liable to excise duty. On 20.11.1975 the appellant filed a classification list in respect of Crude PVC films used for lamination with jute and for tapes claiming that the said PVC films were non-excisable on the ground that the same were non-marketa- ble intermediate products used exclusively for captive consumption. On 9.12.1975 the classification list was ap- proved by the Assistant Collector, . On 15.2.1977, however, the Assistant Collector issued a show 383 cause notice calling upon the appellant to show cause as to why the aforesaid films should not be re-classified as excisable under Item No. 15A(2) of the Tariff Schedule and appropriate duty not recovered under Rule 10 of the Rules, as these then stood, read with Rule 173-J. By a corrigendum, dated 23.2.1977, to the said show cause notice Rule 10-A was substituted in place of Rule 10. The appellant contested the notice but the Assistant Collector vide his order dated 16th February, 1978 confirmed the said show cause notice by holding that the said PVC films were classifiable under Item No. 15A(2) and directed the appellant to pay duty at the appropriate rate on past clearances under Rule 10-A read with Rule 173-J. The appeal filed against the aforesaid order was reject- ed by the Appellate Collector of on 10th October, 1979. A revision was preferred before . The confirmed the order of the Appellate Collector and held that the goods in question fell under Tariff Item No. 15A(2) and were dutiable in the intermediate list and the question of marketability or being capable of being sold in the market was not relevant, but modified the order to the extent that duty in respect of clearances prior to the issue of show cause notice was restricted to the period permissible in terms of Rule 10 read with Rule 173-J viz. 12 months. In the statutory appeal to this Court under Section 35-L , of the s and Salt Act , 1944 the question for consideration was whether the Crude PVC film was dutiable under Item No. 15A(2). Allowing the appeal, HELD: 1. In view of the Appellate Collector's order holding that the Crude PVC films were not marketable goods and there being no contrary evidence found by the subsequent to the finding by the Appellate Collector no excise duty should be charged under Item No. 15A(2) of the Tariff on the Crude PVC Sheets. The went wrong in not applying the proper test. The test of marketability or capable of being marketed was not applied by the . [395D-E] 2. Under the Act , as it stood at the relevant time, in order to be goods as specified in the entry the first condition was that as a result of manufac- ture goods must come into existence. For articles to be goods these must be known in the market as such or these 384 must be capable of being sold in the market as goods. Actual sale in the market is not necessary, user in the captive consumption is not determinative but articles must be capa- ble of being sold in the market or known in the market as goods. Taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. The manufacturer could not be taxed unless manufacturing process resulted in pro- duction 'of goods as known in the market'. The expression \"goods manufactured or produced\" must refer to goods which are capable of being sold to the consumer. [389B-C; 391F] , Suppl. 1 S.C.R. 586; South Bihar Sugar Mills Ltd. etc. v. , 3 S.C.R. 21; , 2 S.C.C. 547; Governor General in Council v. Province of Madras, 7 F.C.R. 179; In Re. the Bill to Amend S. 20 of the Sea Customs Act, 1878 and Section 3 of the s and Salt Act , 1944, 2 S.C.R. 787; applied. 3. Simply because a certain article falls within the Schedule it would not be dutiable under excise law if the said article is not 'goods' known to the market. Marketabil- ity, therefore, is an essential ingredient in order to be dutiable under the Schedule to the Central Tariff Act , 1985. [392F-G] 3.1. In the instant case, the Crude PVC films as pro- duced by the appellant were not known in the market and could not be sold in the market and were therefore not capable of being marketable. [392G-H] JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2820 of 1984. ", "From the Order dated 25.4.84/4.5.84 of , New Delhi in Appeal No. F.D. (SB)(T) A. 999/80-C in Order No. 223/84. , Mrs. , and for the appellant. ", ", Additional Solicitor General, Ms. and for the respondent. ", "The Judgment of the Court was delivered by , J. This is an appeal under Section 35L of the s and Salt Act , 1944 (hereinafter referred to as 'the Act') from the order passed and judgment delivered on 25th April, 1984/4th May, 1984 by , New Delhi (hereinafter referred to as 'the Tribunal'). The question involved is whether the crude PVC film is dutiable. The appellant is, inter alia, a manufacturer of crude PVC films for the purpose of use in final products such as leather cloth and laminate jute mattings and PVC tapes--both insula- tion and adhesive. The said crude PVC films are manufactured by the appellant in a continuous process in the factory premises of the appellant which are licensed premises under the Act. The appellant filed classification list No. XIV/75 dated 20th November, 1975 in respect of crude PVC films used for lamination with jute and for tapes claiming that the said PVC films were non-excisable on the ground that the same were nonmarketable intermediate products used exclu- sively for captive consumption. The said classification was approved by the Assistant Collector, on 9th December, 1977. ", "There was an order passed by the Appellate Collector on 14th June, 1974 holding that crude PVC films were not mar- ketable and were not liable to excise duty. It is necessary to refer to the Tariff Entry involved in this case. Tariff Item 15-A(2) of the Central Excise Tariff reads as follows: ", "\"Articles made of plastics, all sorts includ- ing tubes, rods, sheets, foils, sticks, other rectangular or profile shapes. whether lami- nated or not, and whether rigid or flexible, including levy flat tubings and polyvinyl chloride sheets, not otherwise specified.\" ", "The same crude PVC films which have been manufactured by the appellant and used in the manufacture of some other end product were subject-matter of adjudication by the concerned authorities in the period 1.3.1970 to 29.5.1971. The Appel- late Collector of in an order dated 14th January, 1974 held that the said PVC films manufactured by the appellant are not marketable intermediate products and hence not liable to duty. The Appellate Collector, in his order noted the contentions of the appellant that the appellant had produced sufficient evidence to prove that the crude PVC sheets which were the subject-matter of the Show Cause Notice in that case and which are also the subject-matter of the present show cause notice were not known in the market as PVC sheets nor were these marketable as PVC sheets. After reference to the rival contentions, the said Appellate Collector in his order held, inter alia, as follows: ", "\"PVC films/sheets for the clearance of which demand letters are issued are not marketable as the same are neither embossed nor printed nor any finishing Work is done when compared to PVC films/sheets which are marketed by them. It was further stated that the tensile strength of PVC sheets which is marketed by the appellants is as per the international standards laid down by A.S.T.M./I.S.I. and is much higher than the crude PVC sheets manufac- tured by them as an intermediate product for further manufacture of leather cloth. As such, it was contended that the product manufactured by the appellants is not liable to central excise duty. further stated that it was not necessary to prove from technical angle that the curde PVC sheets manufactured by the appellants for manufacturing leather cloth are different from PVC sheets which are manufactured by them and sold in the market as such. Crude PVC sheets used in the appellants' factory for further manufacture of leather cloth can be distinguished from PVC sheets which are marketed by them as such by naked eye. Moreover, all the processes which are required in case of PVC sheets which are marketed by the appellants so as to make these sheets marketable are not carried out in the case of crude PVC sheets which are used by the appellants in their factory for the manufac- ture of leather cloth ........\" ", "The Appellate Collector further held in the said order that from the technical point of view, crude PVC sheets are different from marketable PVC sheets inasmuch as the tensile strength of crude PVC sheets is much lower than that of marketable PVC sheets. He further held that: ", "\"This is so because marketable PVC sheets are passed through the calender at very high temperature and at a slow speed to that gela- tion/curing fusion takes place while in the case of crude PVC sheets, the same are passed through the calender at very fast speed and lower temperature with the result that gela- tion fusion in the course of heating and ageing is not formed resulting in lower ten- sile strength. When these crude PVC sheets are coated with textile fabrics, the two layers are passed through the rollers at slow speed and at high temperature and it is only at this stage that the GEL is properly formed and resin particles become swollen by diffusion of plasticizer into them that they touch each other. As heating progresses, the swollen particles begin to weld together, resulting in the required degree of strength.\" ", "Thereafter, the Classification List was filed in respect of crude PVC films manufactured for use in adhesive tapes on 9th December, 1975 and the said list was approved by the Assistant Collector of after making an in- quiry in that behalf. On 15th February, 1977, however, a Show Cause Notice was issued by the Assistant Collector, calling upon the appellant to show cause as to why crude PVC films should not be classified under teriff Item 15A(2) and appropriate duty not recovered under Rule 10 of the Rules, as these then stood, read with Rule 173-J of the Rules. There was a corrigendum issued on February 23, 1977 to the said Show Cause Notice dated 15th February, 1977 substituting the words 'Rule 10' by the words 'Rule 10A'. A reply was given by the appellant to the said Show Cause Notice. In the said reply, the appellant stated as follows: ", "\"We have repeatedly pointed out that the issue of \"Crude Film\" has been decided by the Appel- late Collector and also by the Assistant Collector while approving classification. However, the Superintendent persisted in pressing us for giving information about production figures of 'Crude Film' possibly with a view to raise demand. We had requested the Superintendent to let us know the provi- sion under which he required us to give the information in regard to a product which was non-excisable. He was not able to clarify this and tried to invoke wrong sections and rules according to us. The present action of re- classification, in order to make the product excisable some how or other, seems to us to be a continuation of the matter which the Super- intendent was not able to enforce on us. There is no change in the market terminology of \"PVC Film\". Our product is not known in the market as \"PVC Film\". Even technically also a further process is required to be carried out on our product before it is \"PVC Film\" as is known to the market. The various decisions of on this point are well-known to the Department. It is also known that the Appellate Collector's decision is binding on you. The principles of natural justice cannot be served by serving a show cause notice on us in order to change the Appellate Collector's decision in some manner or other. We have an uneasy feeling that an attempt is being made to some how bring the product under excise duty.\" ", "There was an order passed on 16th February, 1978 by the Assistant Collector confirming the Show Cause Notice. On 10th October, 1979 an appeal was preferred by the appellant against the order of the Assistant Collector dated 16th February, 1978 which was rejected by the Appellate Collector of . On 6th February, 1980 a revision applica- tion was preferred, by the appellant to the Joint Secretary, . That was transferred to the and by the impugned order, the has rejected the appeal under challenge. ", "The in the order has set out the contentions and observed that the question for determination was whether crude PVC film fell for classification under Item 15A(2) of the Central Excise Tariff or not. A submission was made that the Appellate Collector had held that the crude PVC sheets were not marketable and had not acquired the character and status of PVC films as known to the market. It was contended on behalf of the appellant that only marketable PVC film would fall within the said item. On the other hand, the 's contention was that there was nothing to show that the film/sheet was crude and the test of marketability was not relevant. According to the , the crude PVC films/sheets would fall under the Tariff Item. The was of the view that the tariff entry did not spell out whether it covered only finished film/sheet or whether it covered also crude film/sheet. The came to the conclusion that the tariff item covered all types of films/sheets. The also came to the conclusion that the concept of marketability was not relevant and all sorts of crude films would be covered by the entry. The was of the view that the Appellate Collec- tor's observations were made entirely in different context. In that view of the matter, the Appellate Collector's order was confirmed subject to the modification that duty in respect of clearances prior to the issue of the Show Cause Notice was restricted to the period permissible in terms of Rule 10 read with Rule 173-J, that is to say, for 12 months. In other words, the 's view was that if the descrip- tion of the goods in question fell into the entry, it was dutiable in the intermediate list and as such the goods had become goods as known to the market and the question of marketability or being capable of being sold in the market was not relevant. In support of this appeal, on behalf of the appellant, it was contended by that it was only the 'goods as specified in the Schedule' to the Central Excise that could be subject to the duty. It appears to us that under the Central Excise Act , as it stood at the relevant time, in order to be goods as specified in the entry the first condition was that as a result of manufacture goods must come into existence. For articles to be goods these must be known in the market as such or these must be capable of being sold in the market a goods. Actual sale in the market is not necessary, user in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market a goods. That was necessary. This has been clearly spelt out by this in , Supp. 1 SCR 586. There this held that excise duty being leviable on the manufacture of goods and not on their sale, the manufacturer could not be taxed unless manufacturing process resulted in production 'of goods as known in the market' (empahsis supplied). In that case, the respondents, who were manufacturers of vegetable products known as Vanas- pati, were assessed to excise duty under Item 23 of the First Schedule to the Central Excises and Salt Act , 1944, on what the taxing authorities called the manufacture of 'r- efined oil' from raw oil which according to them fell within the description of \"vegetable non-essential oils, all sorts, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power\". The common case made by the respondents in their petition under Article 226 of the Constitution challenging the imposition was that for the purpose of manufacturing Vanaspati they purchased groundnut and til oil from the market and subjected them to different processes before applying hydrogenation to produce Vanaspati and that nothing that they produced at any stage was covered by that item. Affidavits by experts were filed by both the parties and found in favour of the respondents and allowed the petitions. appealed. It was urged on its behalf before this that before finally producing Vanaspati the respondents produced at an intermediate stage what was known as 'refined oil' in the market and although they might not sell it and although Vanaspati, when produced, was liable to excise duty under another item, that could not affect their liability. It was held that excise duty being leviable on the manufacture of goods and not on their sale, the petitioners in that case no doubt be liable if they produced 'refined oil', as known in the market, at an intermediate stage. But the found that it was clear that there could be no 'refined oil' as known in the market without deodorisation according to the specification of and the affidavits of the experts. Since, however, the process of deodorisation was admittedly applied in the respondents' factories only after hydrogenation was com- plete, they could not be said to produce 'refined oil' at any stage. Nor could the respondents be held to manufacture some kind of 'non-essential vegetable oil'. , J., who spoke for the , at page 595 of the report, observed as follows: ", "\"On a consideration of all these materials we have no doubt about the correctness of the respondents' case that the raw oil purchased by the respondents for the purpose of manufac- ture of Vanaspati does not become at any stage \"refined oil\" as is known to the consumers and the commercial community.\" ", "After considering the definition of the word 'manufac- ", "ture' and several authorities and Words and Phrases, Perma- nent Edition, Vol. 18, from a judgment of and also other relevant authorities, this held that the definitions made it clear that to become \"goods\" an article must be something which can ordinarily come to the market to be bought and sold. (Emphasis supplied). In that view of the matter this agreed with and dismissed the appeal. Therefore, the first principle that emerges is that excise was a duty on goods as specified in the Schedule. In order to be goods an article must be some- thing which can ordinarily come to the market and is brought for sale and must be known to the market as such. Therefore, the marketability in the sense that the goods are known in the market or are capable of being sold and purchased in the market is essential. This principle was again reiterated by this in , etc. v. ., [1968] 3 SCR 21, where this held that the gas generated by the appellant companies in that case was kiln gas and not carbon dioxide as known to the market, i.e., to those who deal in it or who use it. Therefore, the kiln gas in question is neither carbon dioxide nor com- pressed carbon dioxide known as such to the commercial community and could not attract duty under Item 14-H of the First Schedule. It was held by this that the duty being on the manufacture and not on the sale, the mere fact that kiln gas generated by those concerns was not actually sold did not make any difference if what they generated and used in their manufacturing process was carbon dioxide. Justice speaking for the at page 31 of the report observed: ", "\" The Act charges duty on manufacture of goods. The word \"manufacture\" implies a change but every change in the raw material is not manu- facture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. The duty is levied on goods. As the Act does not define goods, the legislature must be taken to have used that word in its ordinary, dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market. (emphasis supplied). That it would be such an article which would attract the Act was brought out in ., Suppl 1 SCR 586.\" ", "In that view of the matter, the came to the conclusion that the gas generated by these concerns was kiln gas and not carbon dioxide as known to the trade, i.e., to those who deal in it or who use it. It must be capable of being sold in the market and known in the market as such. Then only it would be dutiable. ", "This view was reiterated again in , 2 SCC 547 where , J. as the learned Chief Justice then was, speaking for the observed that in order to attract excise duty the article manufactured must be capable of sale to a consumer. The expression \"goods manufactured or produced\" must refer to goods which are capable of being sold to the consumer. This observed as follows: ", "\"It does not seem to us that in order to attract excise duty the article manufactured must be capable of sale to a consumer. Entry 84 of List I of Schedule VII to the Constitu- tion specifically speaks of \"duties of excise on tobacco and other goods manufactured or produced in India .... \", and it is now well accepted that excise duty is an indirect tax, in which the burden of the imposition is passed on to the ultimate consumer. In that context, the expression \"goods manufactured or produced\" must refer to articles which are capable of being sold to a consumer. In Union of India v. ", "392 ", ", this Court con- sidered the meaning of the expression \"goods\" for the purposes of the Central Excises and Salt Act , 1944 and observed that \"to become 'goods' an article must be something which can ordinarily come to the market to be bought and sold\", a definition which was reiterated by this Court in .\" ", "It is necessary in this connection to reiterate the basic fundamental principles of excise. The Judicial Commit- tee of in Governor General in Council v. Province of Madras, [1945] F.C.R. 179, this Court observed at page 1287 of the report that excise duty was primarily a duty on the production or manufacture of goods produced or manufactured within the country. This Court again in Re The Bill to Amend S. 20 of the Sea Customs Act, 1878, And Sec- tion 3 of the Central Excises and Salt Act , 1944, 3 SCR 787 at page 822 of the report referring to the aforesaid observations of reiterated that taxable event in the case of duties of excise is the manu- facture of goods and the duty is not directly on the goods but on the manufacture thereof. Therefore, the essential ingredient is that there should be manufacture of goods. The goods being articles which are known to those who are deal- ing in the market having their identity as such. Section 3 of the Act enjoins that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or 'man- ufactured' in India. \"Excisable goods\" under section 2(d) of the Act means goods specified in the Schedule to the Central Tariff Act , 1985 as being subject to a duty of excise and includes salt. Therefore, it is necessary, in a case like this, to find out whether there are goods, that is to say, articles as known in the market as separate distinct identi- fiable commodities and whether the tariff duty levied would be as specified in the Schedule. Simply because a certain article falls within the Schedule it would not be dutiable under excise law if the said article is not \"goods\" known to the market. Marketability, therefore, is an essential ingre- dient in order to be dutiable under the Schedule to Central Tariff Act , 1985. ", "It appears from the facts as aforesaid before that the crude PVC films as produced by the appellant in this case were not known in the market and could not be sold in the market and was not capable of being marketable. The learned Solicitor General submitted before us that the Tri- ", "393 ", " was right in considering that as the article fell within the Entry the marketability was irrelevant and the Tri was right in not considering whether the articles in question, namely, crude PVC films used in this case, were marketable or capable of being sold and used in the market. Mr on the other hand submitted that as it was found that the goods were not marketable by the Appellate Collector in the order of 1974 and no evidence was adduced before the Tri to the contrary and the Tri refused to consider the question of marketability no useful purpose would be served in remanding the matter to the Tri. The appeal should be allowed and no duty should be charged. ", "As mentioned before, the Appellate Collector has on 14.1. 1974 held that the crude PVC sheets/films which formed the subject-matter of the appeal are manufactured by the appellant for the production of leather cloth in the factory are not marketable as PVC sheets and had allowed the appeal because he found that: ", "\" .... because PVC sheets of the gauges manufactured by the appellants are invariably either embossed or printed or both. The nature of embossing may be with an engraving roll or with a mirror finished roller or a mat finish. The manufacture or PVC sheets marketable as such involves the following processing se- quences, namely: Polyvinyl chloride resin is formulated with plasticizer, colorants, heat stabilizers, etc. and the formulation is thoroughly mixed. When homogeneous, this mix is fed through a two roll mill to give heavy sheet stock, which in turn is fed to the calender, where it is reduced to the desired width, thickness etc. The temperature at which PVC sheets which are marketed as such are passed through the calender is about 178o C (330 - 350x) and the speed of the roller is adjusted accordingly. The speed of the roller and the temperature at which the sheets are passed through the calender are important factors in order to achieve the minimum stand- ard of tensile strength of the sheets. Gela- tion, i.e., the change of state from the liquid to the solid condition that occurs during the heating and/or ageing, when the plasticizer has been absorbed by the resin to an extent resulting in a dry but weak and crumbly mass, and thereafter within normal proportions of resin and plasticizer, this state is attained when the resin particles have become so swollen by diffusion of plasticizer into them that they touch each other, is an impor- tant process in the case of PVC sheets which are marketed as such. As heating progresses the swollen particles begin to weld together, resulting in some degree of strength. After the GEL is formed in such PVC sheets and resins get fused with plastisizer, they are further subjected to the processing of finish- ing, embossing/printing. On the other hand, crude PVC sheets manufactured by the appel- lants for production of leather cloth in their factory are passed through the rollers at a temperature of 130o - 1400 (280 F) and the speed of the roller is, therefore, faster. Due to low temperature and faster speed of the rollers fusion is not completed in such crude plasticizers thus resulting in the tensile strength of such crude PVC sheets which is much less than the tensile strength of the PVC sheets which are marketable as such. The tensile strength of PVC sheets which are marketed as such and the crude PVC sheets which are used by the appellants in their factory for the manufacture of leather cloth are as under: ", "(1) Marketable PVC sheets Thickness Tensile strength Per cm. sq. in Kgs. Longitudinal Transverse 0.08 mm 239 185 O. 10 mm 230 201 O. 15 mm 268 2 0.20 mm 230 200 (2) Crude PVC sheets Thickness Tensile strength Per cm. sq. kgs. Longitudinal Transverse O. 11 mm 127 98 0.22 mm 144 107 The thickness of crude PVC sheets ", "of O. 11 mm ultimately comes to 10 mm when it is coated with textile fabrics and rolled. Similarly, the thickness of crude PVC sheets of 0.22mm ultimately comes to when it is coated with fabrics and rolled. ", "395 ", "The idea behind producing crude PVC sheets at low temperature and at high speed of the rollers is that when such crude PVC sheets are coated with textile fabrics and passed through a coating machine, high temperature is required to be maintained and the speed at which the rollers move has also got to be slow so that these partially fused crude PVC sheets are eventually fully fused at the time of coating these sheets with textile substrates. No finishing, embossing or printing is done in case of such crude PVC sheets. I, therefore, hold that the crude PVC sheets manufactured by the appellants are used by them in the manu- facture of leather cloth in their factory are not marketable as PVC sheets and as such the same are not liable to duty under Item 15A(2) of the said Schedule.\" ", "In view of the Appellate Collector's order dated 14.1.1974 it was the duty of the revenue to adduce evidence or proof that the articles in question were goods. No evi- dence or proof was produced. The went wrong in not applying the proper test. The test of marketability or capable of being marketed was not applied by the . In that view of the matter that there being no contrary evidence found by the in this case subsequent to the finding by the Appellate , we are of the opinion that the appeal should be allowed and no excise duty should be charged under section 15A(2) of the Central Excise Tariff on the Crude PVC sheets. In the facts and circumstances of the case, there will be no order as to costs. ", "T.N.A. Appeal allowed."], "relevant_candidates": ["0000923724", "0000941355", "0001613412"]} {"id": "0001778713", "text": ["JUDGMENT , J. ", "1. The appellant sued to recover money due under a mortgage deed for Rs. 3,000 executed in his favour by defendants 1 to 3 and their father on 13th March, 1917. The seventh defendant was the principal contesting defendant. His defence was in the main founded upon certain events that happened in 1918 and 1920. ", "2. In August, 1918, a third party who had a money claim against the mortgagors attached some of the mortgaged items, before judgment, pending his money suit against them. On 2nd October, 1918, the mortgagors purported to sell the mortgaged items to the plaintiff under the original of Ex. I partly for the mortgage amount and partly for a further consideration of Rs. 441. When the money decree-holder attempted to bring the properties to sale on the basis of the attachment already made, the plaintiff filed a claim petition (Ex. G) on 29th September, 1920. In this petition she claimed one of two reliefs: she set up her sale and asked that the property should be released from attachment, in the alternative, she asked that even if the sale should be held to be invalid as against the attaching decree-holder, the execution sale should be directed to be held subject to the mortgage in her favour. It appears from the endorsement on Ex. G that the decree-holder himself had referred in his sale proclamation to the mortgage in the plaintiff's favour but suggested that it was supported by consideration only to the extent of Rs. 2,500. When the matter carne on for final disposal the executing Court held that the sale having been effected subsequent to the attachment was invalid as against the decree-holder and it directed the sale to be held subject to the mortgage \"referred to by the decree-holder.\" The property was accordingly sold subject to the mortgage and purchased by the decree-holder himself, who in turn conveyed it to the seventh defendant as the result of a decree for specific performance of an agreement entered into between them. The result of the execution sale was that the plaintiff was deprived of possession of items 1, 2 and 4 to 6 of the plaint schedule and retained possession only of items 3 and 7. The plaintiff accordingly filed this suit for the recovery of the amount due under the mortgage, contending that as the sale had failed, he was entitled to fall back upon the mortgage. The seventh defendant contended that the sale must be deemed to have extinguished the mortgage and that the subsequent events could not revive the plaintiff's claim under the mortgage. The learned Subordinate Judge gave effect to this contention and dismissed the suit. The seventh defendant raised other contentions which formed the subject-matter of the other issues raised in the case. One of them was a plea of partial discharge which forms the subject-matter of the fourth issue. Another was a claim that the plaintiff should give credit as against the mortgage amount and the interest due thereon for the profits realised by him during the time that he had been in possession of the properties sold to him. Finally there was a question of the amount which the plaintiff was entitled to recover in view of the fact that he still retains as vendee two items of the hypotheca. ", "3. So far as the lower dismissed the plaintiff's suit, we are unable to concur in its decision. The decision is mainly based on the judgment of this in (1933) 65 M.L.J. 819 : I.L.R. 57 Mad. 195. We shall presently show that that case is distinguishable on its facts; but we think it right to add that we are, with all respect, unable to concur in some of the observations in that case, in the present case, the order Ex. G-1 was clearly an order under Order 21, Rule 62, Civil Procedure Code. As we have already stated, the plaintiff put forward alternative claims in his claim petition - one on foot of the sale in his favour and the other on foot of the mortgage. The rejected the claim based on the sale but upheld the claim based on the mortgage. Neither party took steps to impeach that order and it became conclusive between the claimant and the decree-holder in the money suit. The accordingly purported to sell only the equity of redemption and the decree-holder (who became the auction purchaser) having purchased only the equity of redemption could convey only that interest to the present seventh defendant. In respect of these facts the position in (1933) 65 M.L.J. 819 : I.L.R. 57 Mad. 195 was very different. The claim petition there was dismissed as preferred too late and as no suit was brought by the claimant under Order 21, Rule 63, Civil Procedure Code, that order became final. It was in those circumstances impossible to imply any adjudication that the claim founded on the mortgage was well founded. The learned Judges had therefore to hold that the reference to the mortgage in the sale proceedings amounted to nothing more than a notice to intending purchasers under Rule 66 of Order 21, Civil Procedure Code. It is on that footing that they held that the auction purchaser was not precluded from contesting the existence or validity of the mortgage. On the facts of the present case as we have set out above neither the decree-holder in the money suit nor the auction purchaser nor the seventh defendant as the purchaser from him could go behind the order in the claim proceedings which upheld the mortgage claim. We may also point out that in (1933) 65 M.L.J. 819 : I.L.R. 57 Mad. 195 , the learned Judges laid stress on the fact that even in the claim petition the claim based on the mortgage was never put forward and that the claimant insisted that the mortgage had been discharged by the sale deed in his favour. The conclusion reached in that case that the mortgage had been extinguished has largely been based upon this ground. That ground also will not avail the seventh defendant in this case because as already stated the claim was put forward both on the mortgage and on the sale. The portion of the judgment with which we are unable to agree is the interpretation which the learned Judges have placed on Section 101 of the Transfer of Property Act. With all respect we think that in a case like the present it must be presumed that it is to the advantage of the mortgagee to keep his interest as mortgagee and his interest as purchaser of the equity of redemption distinct because of the intervening attachment against which his sale cannot be effective. ", "4. The question in this class of cases is not whether the sale is not effective as between the vendor and the vendee, but whether there being the possibility of the sale proving ineffective as against a third party, it is not to the interest of the mortgagee not to treat his mortgage, as extinguished by the sale. In the application of this principle of presumed intention, it makes no difference whether the third party is allowed to claim in preference to the sale, on the ground of his being a subsequent encumbrancer or on the ground of his being an attaching decree-holder. If the decree in pursuance of which the attachment was made is paid off, the sale will of course stand as between the vendor and the vendee and the mortgage will be satisfied. But if in pursuance of the attachment the properties are brought to sale in execution, the vendee is deprived of his rights under the sale to the extent to which the properties are sold in execution and we think that there is no meaning in saying that even to this extent, the sale is operative as between the vendor and the vendee. This seems to us to be the principle of the decision in (1882) I.L.R. 8 Cal. 530, which we are prepared to follow. The learned Subordinate Judge distinguished that case as a decision under the Civil Procedure Code of 1882 according to which he thought that a transfer pending an attachment was wholly void whereas under the present Code, it is voidable only as against the rights enforceable under the attachment. This distinction drawn by the learned Judge is obviously erroneous. The law has always been that transfer pending an attachment is void only as against the rights enforceable under the attachment. ", "5. The learned Counsel for the respondent drew our attention to a decision of in (1922) 20 A.L.J. 151 : 66 I.C. 203. With all respect, we are unable to follow that decision. The sale was there made to the father of the mortgagee and the father was a member of a joint Hindu family with the mortgagee. The sale deed directed that a portion of the consideration should be applied by the vendee to discharge the mortgage bond in favour of his son. The learned Judges observed that the father and the son must be treated as virtually one and the same person and that the direction to the father to pay off the mortgage must be treated as an extinction of the mortgage debt. We do not find any reference in the judgment to the principle of Section 101 of the Transfer of Property Act. In the leading case in v. (1884) L.R. 11 I.A. 126 : I.L.R. 10 Cal. 1035 (P.C.), their Lordships of referred to the practice prevailing in England of circumventing the doctrine of v. (1817) 3 Mer. 210 : 36 E.R. 81, by taking a conveyance of the equity of redemption in favour of trustees for the benefit of the prior mortgagee and added that in India it was unnecessary to resort to this conveyancing device and as a rule of equity the principle of presumed intention to keep the mortgage alive might be applied. It seems to us that what was done in the Allahabad case was practically the conveyancing device referred to by their Lordships of in v. (1884) L.R. 11 I.A. 126 : 126 I.L.R. 10 Cal. 1035 (P.C.) and if even under the decision in v. (1817) 3 Mer. 210 : 36 E.R. 81, such a device would have prevented the extinction of the mortgage, we venture to think with all respect that it would be a fortiori so in this country. ", "6. Though Section 101 of the Transfer of Property Act has generally been invoked in cases where the rights of mesne encumbrancers come up for decision, the principle of the section is not limited to those cases. It only lays down a general rule of presumed intention and where the later conveyance will be inoperative as against any intermediate right whether founded on an encumbrance or on an attachment, the principle must be held equally to apply. In v. (1901) 12 M.L.J. 73 : L.R. 29 I.A. 9 : I.L.R. 29 Cal. 154 (P.C.), this question had to be considered in respect of the effect of an intermediate attachment, as in the present case, and their Lordships observed (at p. 164): ", "It is idle to contend that there was any intention to extinguish the old mortgages for the benefit of the execution creditor or any purchaser at the sheriff's sale. ", "7. We must accordingly hold that the plaintiffs' claim under the suit mortgage has not been extinguished by the subsequent sale and that it is enforceable in the events that have happened. ", "8. Mr. next contended that according to the proper construction of the order (Ex. G-1) the mortgage must be held to be valid only to the extent of Rs. 2,500. We do not think that is the effect of the order. The only point then decided was that as between the sale and the mortgage the upheld the mortgage and negatived the claim under the sale. This is made clear by the use of the words 'mortgage referred to by the decree-holder' instead of words like 'mortgage admitted by the decree-holder'. The has now found that the mortgage was fully supported by consideration and nothing has been shown against the correctness of that finding. ", "9. It remains to deal with two other questions raised by Mr. on behalf of the seventh defendant. He first contended that the lower 's finding on the fourth issue was not in accordance with the evidence and that the issue should have been found in his client's favour. This relates to a plea of discharge, it being the seventh defendant's case that in or about April, 1925, he paid to the plaintiff a sum of Rs. 1,950 in full quit of so much of the mortgage debt as would be recoverable from the properties agreed to be purchased by the seventh defendant. Though the seventh defendant is not able to fix the exact date of payment, he states that the agreement between himself and the auction purchaser was in February, 1925, and that the payment to the plaintiff was about two months later. Though the learned Sub-Judge has not discussed in detail the evidence bearing upon this question, he has clearly indicated that he was not impressed by the evidence adduced in support of the plea of discharge. We have been taken by Mr. through the relevant portions of the oral evidence, and we see no reason to come to a different conclusion. The seventh defendant has not thought fit to take any voucher for the payment of such a large sum of money nor has he even cared to insist upon the payment being endorsed on the mortgage bond. Even according to his version, the plaintiff promised to make the endorsement in due course and yet, after the plaintiff had failed to do so for more than a year, the seventh defendant never even thought fit to send any notice to the plaintiff complaining of her conduct. Further, the seventh defendant's evidence as to the circumstances under which the alleged payment was made and the manner in which he found the money to make the payment, is not at all convincing. It is very doubtful if at or about this time he had the money to pay at all. whose help has been availed of to support this story apparently because he had to receive some money from the plaintiff, is the son-in-law of the seventh defendant's brother and assuming it to be true, that he had to receive a sum of Rs. 200 from the plaintiff and did receive it about this time, we are not, by any means satisfied that there is any connection between that transaction and the alleged payment by the seventh defendant to the plaintiff. The remaining witnesses who support this story of payment do not really seem to have had anything to do with the transactions between the plaintiff and the seventh defendant and, as one of them admits, it is probably the seventh defendant's local influence that has enabled him to get these witnesses to support his story. We must accordingly find against the seventh defendant on his plea of alleged discharge. ", "10. The second issue raised the question of the accountability of the plaintiff for the profits received by her from the lands which had been purchased by the seventh defendant. The law on this point is not, by any means, settled. We may observe in passing that the observations in (1917) I.L.R. 41 Mad. 513 are not wholly reconcilable with the view taken in (1937) 46 L.W. 332. As we do not propose to decide the question as an abstract question of law in this case, we do not think it necessary to refer to the cases in detail. We only wish to guard ourselves against being understood as concurring in all the observations in (1937) 46 L.W. 332. For instance, the statement that a purchase by a prior mortgagee in execution of a decree obtained in his suit without impleading the puisne mortgagee therein is a nullity and will not be effective even to pass the title of the mortgagor as against the puisne mortgagee seems to us too broadly stated. In the circumstances of the present case and in view of the fact that a petition has been filed before us on behalf of the seventh defendant for relief under the Agriculturists' Relief Act (IV of 1938), we think it best to hold that no accounting is necessary and it would be more equitable to say that after 23rd October, 1920, the plaintiff is not entitled to claim interest as against the seventh defendant to the extent of the proportion of the mortgage debt recoverable from the properties in the seventh defendant's possession. In this view, there is no occasion in our opinion, to deal with the petition under Madras Act IV of 1938 either. As the plaintiff has become the owner of the equity of redemption in some of the items of the mortgage property, the mortgage must be held to have been split up and the plaintiff will be entitled to a decree only for a proportionate share of the mortgage debt as against the properties purchased by the seventh defendant. ", "11. The parties are not able to agree before us as to the proportion. The lower will ascertain the amount due for principal and interest as per terms of the mortgage bond, on 23rd October, 1920, the date on which the seventh defendant's vendor became the auction purchaser; out of that amount, there will be a decree for sale of the properties purchased in that sale by the seventh defendant's vendor for an amount bearing the same proportion to the mortgage debt due on that date as the said properties bear to the entirety of the mortgaged properties valued as on the date of the mortgage. ", "12. The appeal is allowed and the case will be sent back to the lower Court to give effect to the above directions and pass a preliminary decree for sale for the amount ascertained as above. The plaintiff and the seventh defendant will pay and receive proportionate costs both here and in the Court below."], "relevant_candidates": ["0000405874", "0001268723", "0001683696"]} {"id": "0001794806", "text": ["ORDER , J. ", "1. This appeal by the defendant is directed against the judgment and decree of eviction passed by the Additional District Judge, , Ali-pore, affirming the judgment and decree of the trial Court in a suit for eviction of the defendant on revocation of his licence as a licensee, ", "2. The case of the plaintiff/respondent, in short, was that he was a monthly tenant in respect of entire premises No. 19, Gopal Chandra Chatterjee Road at a monthly rental of Rs. 70/- under and his brothers. On being approached by the defendant, in need of accommodation in September, 1979, the plaintiff/respondent allowed the defendant/appellant to live in one room of the suit premises for a period of four months from September 1979. On compassionate ground as a licensee, without any licence fee or consideration whatsoever, and on his refusal to vacate it after the expiry of the said period of four months, the respondent revoked his licence and brought this suit. ", "3. The defendant contested the suit by filing a written statement. His defence, in short, was that he was a tenant or for the matter of that, a sub-tenant under the plaintiff who was a tenant at a monthly rental of Rs. 20/- payable according to English calendar month and not a licensee at all. It was alleged that the father of the defendant was also a tenant in the suit premises and that the plaintiff accepted the defendant as a tenant in respect of the said room only after taking a sum of Rs. 2,000/- as advance subject to adjustment against the rent payable by the defendant/appellant. It was alleged that as because the defendant/appellant demanded rent receipt the plaintiff started harassment and also demanded higher rate of rent which the appellant refused to pay. ", "4. The trial Court, on a consideration of the materials on record, held that the defendant was a licence under the plaintiff and decreed the suit. Being aggrieved the defendant/appellant preferred an appeal before the lower appellate Court and the judgment and decree of the trial were also affirmed by such Court. Defendant/ appellant has thereafter preferred this second appeal on, among other grounds, that finding of both the below is manifestly unjust and illegal as both the below mis-directed themselves in not taking into account important evidence bearing on the disputed issue and that the same is also perverse. ", "5. Judgment of the lower appellate Court has been assailed before this Court on several grounds. Firstly, it has been urged that both the Courts below misplaced the onus of initially proving that the burden lies on the plaintiff to show prima facie that the defendant was a licensee. Secondly, it has been urged that both the Courts below mis-directed themselves by not taking into account very important and material evidence bearing on the status of the defendant as to whether he was a licensee or a tenant and thereby came to a wrong finding regarding the status of the defendant. Thirdly, it has been urged that such finding regarding the status of the defendant/appellant as a licensee is unjust also as the \"essential ingredients\" necessary for finding of such fact have not been found by both the Courts below. ", "6. As against this, Mr. , appearing on behalf of the plaintiff/respondent, contended that findings of both the courts below regarding the status of the defendant as a licensee is a concurrent finding of fact and should not be ordinarily interfered with in this second appeal, as the scope of this appeal in terms of the provisions of Section 100 of the Code of Civil Procedure, is to be confined only to substantial question of law. It is, therefore, urged that as because the defendant-appellant has been found by both the courts below to be a licensee, the same should not be ordinarily interfered with by this Court as it does not involve substantial question of law. ", "7. Before we enter into the merits of this case on the questions as addressed by the learned Advocates of both sides, let Us Iook into the admitted facts of this case. Un-disputably, the plaintiff was a tenant In respect of the entire suit premises, i.e.. 19, Gopal Chandra Chatterjee Road, at a monthly rental of Rs. 70/-. It is also an undisputed fact that the defendant/appellant is actualy occupying a room of such premises having the facility of a kitchen together with the further facility of joint user of toilet of such premises. Undisputedly also, the status of the plaintiff/ respondent was that of a tenant at the time the defendant was allegedly inducted as a licensee in September, 1979. It is further undisputed that the plaintiff/respondent became the owner of this premises by virtue of his purchase by a registered deed dated 22nd April, 1985, from the previous landlord. So the fact remains, that the plaintiff/respondent was still a tenant and not the owner of the suit premises at the time the suit was instituted in the year 1981. ", "8. Be it stated here at the very outset that in a case of concurrent findings of fact by both the courts below, the scope of interference by is very limited and should not interfere with the concurrent findings of facts of the Courts below on the ground of perversity unless the court concerned misdirected itself In coming to its finding on the question of fact. Such concurrent finding of fact, however, as observed by can be interfered with only where it is manifestly unjust or where the essential ingredients for such a finding of fact have not been found by the Courts below. It is true, in an ejectment suit a finding on the question whether the defendant is a tenant or a licensee, the finding of the lower appellate Court on a consideration of the evidence is a finding of fact. Reference may be made in this connection to the decision of . However, it has also been observed by in another decision reported in AIR 1989 SC 1 that the question whether there is a tenancy or sub-tenancy or licence or parting with possession in any particular case, must depend upon the quality of occupation given to the licensee or the transferee. Of course, in the case referred to, dispute arose regarding the occupation of a holder to dis- ", "play his holding and as such the vital question in that case was whether occupation itself will amount to a question of tenancy or that of a licence. Mere occupation is not sufficient to infer either sub-tenancy or parting with the possession. Facts of the instant case are somewhat different from the one referred to, as because parting of possession in favour of the defendant/appellant is an undisputed fact, though it is claimed on behalf of the plaintiff/ respondent that the respondent was in actual legal possession of the suit property. In other words it is sought to be urged and emphasised that the possession of the defendant/appellant was not exclusive possession in this case. It is, therefore, urged that although the defendant/appellant was permitted to occupy a room, it was the possession of a licensee. ", "9. In view of the contentions of the learned Advocate for the defendant/appellant, it will be necessary to see as to whether the possession which was given to the defendant/appellant was that of a licensee or that of a tenant. Further, in view of the points raised by the learned Advocate for the defendant/appellant, the entire relevant evidence on record is to be considered to see that the below considered all such important evidence having direct bearing on the disputed issue. If, on such examination we find that the courts' below made such a mistake, then in that case this Court is fully authorised to set aside such finding. To make it clear once again, it is true that , while hearing second appeal under Sec. 100, C.P. Code, has not the jurisdiction to examine the evidence and reverse or reject the conclusion reached by the first appellate Court. But we should also bear in mind that it has the power to interfere with such finding, when the lower appellate Court made a mistake of the nature as stated, and can decide the issue, treating such finding as unwarranted and then it can be looked into as a substantial question of law. If any authority is needed on this point even after the amendment of 1976, we may refer to the decision , and also the decision of , . ", "10.In the case of this nature where the plaintiff alleges that the defendant/appellant is a licensee and where the defendant/appellant asserts that he is a tenant, the initial onus is upon the plaintiff/landlord to prove that the defendant was inducted as a licensee. The question of onus, however, loses its importance once the parties enter into the evidence. Once the plaintiff/respondent tenders evidence showing that the defendant was inducted as a licensee, onus shifted upon the defendant to show that his status is that of a tenant and not a licensee as claimed by him. ", "11.On a perusal of the judgments of both the courts below, unfortunately we find that both the Courts below, misplaced the onus on the defendant/ appellant to prove his case that he was a tenant and not a licensee. Admittedly, there is no document of lease or agreement of tenancy between the parties. Sub-letting has not been defined in the Rent Act or in other words, in the Premises Tenancy Act. There is no paper showing payment of rent by the defendant/appellant to the plaintiff in respect of the suit room. Nor there is any paper whatsoever showing payment of a sum of Rs. 2,000/- by the defendant/appellant either as advance or as security money. But at the same time, there is also no good evidence adduced on the part of the plaintiff/respondent showing that the defendant/appellant was inducted as a licensee in September, 1979. Admittedly, nobody was present at the time of such induction of the defendant/ appellant as a licensee. Barring the uncorroborated testimony of the plaintiff/ respondent there is no evidence whatsoever of induction of the defendant/appellant as a licensee for a period of four months in the disputed room of the suit premises. A proper scrutiny of the evidence on record in this case would be necessary in view of the manner of approach made by both the courts below with regard to the evidence to determine the status of the defendant/appellant. We find from the admitted evidence of the plaintiff/respondent (P. W. 1) that he did not know the father of the defendant. There is no evidence that the parties are related to each other or that they had any previous acquintance. Plaintiffs case in this regard is short and simple that he allowed the defendant/appellant to say in, though for a specific period as the defendant/appellant was in need of such accommodation. It seems unlikely when the parties are not related to each other or there is not even any acquintance with each other, one party would go to the extent of accommodating the other by way of granting gratuitous licence to have exclusive possession of the particular premises without any consideration whatsoever. This is against normal human conduct or experience, unless of course the plaintiff/respondent can show it otherwise. It is true that the plaintiff/res-pondent has led evidence, both oral and documentary, to show that the defendant/ appellant came into the premises only in September, 1979 and not before that as it is the case of the defendant/ appellant. We have already seen that it is the specific defence case that his father was there in that house for a long time and that after demise of his father in 1970, he was accepted as a tenant at a monthly rental of Rs. 20/-and further on a payment of Rs. 2.000/ - as advance. So, the viital question for determination of the status of the defendant/appellant would be whether he was there in the suit premises since before the alleged induction in September, 1979. If we find positive evidence on record that he was there since before that time, it would demolish the case of the plaintiff/respondent that the defendant was inducted as a licensee only in September, 1979 and not before. ", "12. started with this question on an analysis of the evidence led by the defendant and that too from a wrong angle; or in other words, he mis-directed himself in assessing the oral evidence led by the defendant/appellant on an assumption that no case of prior occupation before 1979, either by the defendant or by his father was made out in the written statement. We have already seen that the defendant made a specific case that his father was occupying the suit premises as a tenant and after his death the defendant continued to occupy the same. Both the Courts below con- ", "sidered the same as a case not made out in the pleading itself. All the four witnesses examined by the defendant including the defendant/appellant himself were disbelieved and their eidence brushed aside on this sweeping assumption that no such case made out in the written statement, though there is such a case in the written statement, itself. According to , and were the witnesses who saw payment of rent to the plaintiff/respondent by the defendant. observed that none of these two witnesses was examined by the defendant although they were alive. As a matter of fact was examined by the defendant as D.W. 3 who was a private tutor in the family of , father of the defendant/appellant in the same house 20/25 years before ago, and he stated that he saw payment of rent by the father of the defendant to the plaintiff/ respondent. D. Ws. examined by the defendant are also the neighbours living in close proximity to the disputed premises and as such they are expected to know and to be acquinted with the inmates of that house and to witness any payment of rent or otherwise or the relationship between the parties in dispute. On a careful perusal of the judgment of it will appear that he placed no reliance upon the testimony of the witnesses examined by the defendant or the credibility of such witnesses in the context of their making statement that the defendant's father was also there in the suit premises and the court below assumed it to be a case not made out in the written statement itself. In other words, he disbelieved the testimony of such witnesses, as if the same was contrary to the case made out in the written statement. ", "13. I have gone through the written statement very carefully to find that there is actually such a case in the written statement. Both the courts below made this apparent error in not looking properly into the written statement and, therefore, mis-directed themselves in assessing the oral evidence adduced by the parties. Therefore, it can be said that both the courts below, while recording their finding regarding the status of the defendant/ appellant, acted on an assumption not sup- ", "ported by evidence and failed to consider the oral and also the documentary evidence in coming such finding. ", "14. Coming to the evidence of the witnesses examined by the plaintiff, we have already seen that the plaintiff admitted that he did not know the father of the defendant/ appellant and he could not say if the defendant's father was the tenant in the suit premises. He did not enquire admittedly about the antecedents of the defendant when he was inducting him as a licensee. Admittedly, the defendant was given not only a room, but also a kitchen and the facility to use the toilet and the common tap water. Thereby, exclusive possession of the portion of the suit premises was given to the defendant. There is nothing to show that the plaintiff/landlord retained legal possession of the same in the sense allowing the defendant/tenant to occupy it only as a licensee or an invitee for a period of four months. The other witness (P.W. 2) was examined by the plaintiff to prove that the defendant/appellant was a tenant in their house, i.e., in the house of P.W. 2, since before his occupation of the suit premises as a licensee. In other words, P.W. 2 was examined to prove that the defendant/ appellant was living as a tenant in their house, and, was therefore, living elsewhere than in the suit premises before September, 1979. If there is convincing evidence on record to show that really the defendant was living elsewhere, then in that case the defendant will have no case as a tenant in the suit premises. On a scrutiny of the evidence of P.W. 2 we find that he is completely an interested witness and admitted to have come to the dock at the request of the plaintiff, as his father's friend and thereby brought the rent counterfoils which he was requested so to do. He did not know the defendant's father or where he lived. P.W. 2 cannot say when the defendant was inducted as a tenant in their house in 5, Sashibhusan Basak Lane. He cannot say in his evidence how old he was when the defendant was inducted as a tenant in their house, although he says he used to collect rent when the defendant was inducted as a tenant. ", "15.P.W. 3 is apparently an interested witnesses as admittedly he is a friend of the plaintiff/ respondent. It is true, he was once a tenant in this house, but he left it long ago and purchased a house site and built a house in the name of his wife away from this place, although he claims that he shifted from this house in 1966. As a matter of fact we find that he purchased the house site in which, he says, he built a house long before. ", "16. Nextly, turning to the documentary evidence on record, the plaintiff has placed much reliance on the rent counterfoils produced by P.W. 2. Genuineness of such rent counterfoils and also the factum of such alleged tenancy right in the said house, have been challenged on behalf of the defendant/ appellant. We have already seen that P.W. 2 as the son of the friend of the plaintiff/ respondent was requested to bring those rent counterfoils and he admittedly produced the same on such request. Allegedly, such rent counterfoils, at least two of the rent counterfoils are said to bear the initial of the defendant/appellant showing payment of rent when he was supposed to be occupying the said premises. compared the said initials with the admitted signature of the defendant put in the deposition sheet. The defendant has already categorically denied that either he was a tenant in the said premises or that he ever paid rent to the father of the P.W. 2 or that the rent counterfoils (Exts. 7 and 7(a)) bear his initial or signature. 1 am at a loss to understand as to how could come to the conclusion that the signatures are identical or of the same person. A casual look at the initials contained in Exts, 7 and 7(a) will show that they are completely distinct and different from those admitted signatures of the defendant/appellant in the deposition sheet. Forming an opinion even by the court as to the nature of such signature, made on the basis of the comparison between the admitted signature and the disputed one is extremely hazardous as has been held by this as well as by the Supreme . It is with utmost caution that such comparison is to be made and a finding is to be arried at on that basis. In the context of unreliable nature of the oral evidence of P.W. 2, it will be all the more risky to rely upon such rent counterfoils containing suspicious initials, far less proving convincingly that the defendant;appellant was a tenant in that building, namely, 5, Sashibhushan Basak Lane before September, (979. It is true, the plaintiff has produced the certified copy of the death certificate showing that in 1970, the defendant's father 's address, as given therein, is other than the disputed premises. But such noting of address as appearing in the death certificate has been said to be incorrect one by the defendant () in his evidence. No doubt, this entry in the death certificate goes to show that the defendant's father was at least living in a different place at the time of his death. But there is overwhelming evidence on record to show that the defendant was living with his family in the suit premises even long before his induction as licensee in 1979. has placed no reliance on the documentary evidence adduced by the defendant showing his residential address in the suit premises. Even, if we disbelieve the other documents, (Exts. B series) the postal receipts, (Ext. C series), postcards (Ext. D), inland letter (Ext. E). the transfer certificate, cannot be lighly brushed aside in the manner as has done and dittoed by the court of appeal below. There will be no manner of doubt that at least some of these were addressed to the defendant or his mother before 1979 showing thereby that they were living in this house before the alleged induction as a licensee by the plaintiff. Postal marks clearly show the years before 1979 and even in spite of the alleged interpolations the name of the defendant and the address are discernible. So also the original school leaving certificate by the defendant (Ext. E) showing that his address as long back as 1965 was given in this disputed premises and showing thereby that the defendant/appellant was living in this house since before 1979. All these volumes of oral and documentary evidence are distinct pointer to the fact that the defendant/appellant was occupying such premises with the members ot his family since before 1979. This can only be done not as a licensee, but in the capacity other than that as a licensee. If this prior occupation of the defendant is believed, it fits with the case of the defendant that no rent receipt was granted to him because the plaintiff/ respondent was himself a tenant and that he would be liable to eviction for creating sub-tenancy. This is the specific case of the defendant and is borne out as such by the facts and circumstances of the case. ", "17. As already stated, the first court of appeal, also approached the whole case from a wrong angle misdirecting itself as that of , in a way prejudicial to the interest of the defendant/appellant. In short, judgment is also based on surmise and conjectures, as that of . He simply brushed aside the documentary evidence adduced by the defendant/ appellant as suspicious in nature and placed no reliance on the same without carefully examining the same and trying to arrive at a finding based on his independent judgment and reasoning. He simply dittoed and endorsed the finding of that such documents were created for the purpose of this suit, without trying to weigh and assess the evidentiary value of the same. In that view of the matter, I am constrained to observe that the court of appeal below failed altogether to comply with the statutory provisions of Order 41, Rule 31 of the Code of Civil Procedure. The judgment of the appeal Court should not be the mere endorsement of the findings of , not containing the reasons for the decisions arrived at by him independently of that of . ", "18. So, in view of what has been discussed above, it is clear from the volume of oral and documentary evidence on record that the defendant/appellant was there in the suit premises long before his alleged induction in such premises by the plaintiff/respondent in September, 1979. When this fact is established convincingly, it fits in with the case of the defendant/appellant that he was there obviously in the capacity not attributed to him by the plaintiff/respondent. In other words, this fits in with the case of the defendant/appellant that he was there as a tenant and that this fact was not given a stamp of legality or authority as because the plain- ", "tiff/ respondent's status was that of a tenant. No sub-tenancy was sought to be created, presumably to avert a suit for eviction to be filed by the landlord against the tenant. I find, therefore, that the plaintiff has failed singularly to prove his case of induction of defendant/ appellant as licensee and the finding of the lower appellate Court based on that of should be set aside as stated above. ", "19. The result is, the appeal is allowed. The judgment and decree of the court of appeal below are set aside and the plaintiffs suit is dismissed. ", "20.Theie will be no order as to costs. ", "21. Appeal allowed."], "relevant_candidates": ["0000206819", "0001748770"]} {"id": "0001804857", "text": ["JUDGMENT Venkataramaiah, J. ", "1. These two appeals are filed against the common order passed in Writ Petitions Nos. 7496 and 7497 of 1978 by dismissing the petitions. The appellant (hereinafter referred to as \"the assessee\") was the petitioner in the said petitions and the ITO, Company Circle III, Bangalore, was the respondent. In the writ petitions the assessee prayed for the issue of an appropriate writ, order or direction quashing the two notices dated March 25, 1978, issued by the respondent under s. 148 of the I.T. Act, 1961 (hereinafter referred to as \"the Act\"), proposing to reassess the income of the assessee for the assessment years 1973-74 and 1974-75 on the ground that he had reason to believe that certain income of the assessee had escaped assessment in each of the above assessment years and for a writ in the nature of prohibition restraining the respondent from taking any steps pursuant to the said notices. ", "2. Briefly stated the facts are these : The assessee is a private limited company incorporated under the Companies Act and is carrying on business of manufacture of pressure cookers and allied products at Bangalore. The sale of these products is being effected by the assessee through its selling agents, , which is a firm carrying on business at Madras, with whom the assessee has entered into an agreement. The assessee has been making payments to the said firm for the services rendered in connection with the sale of its products. The question whether the said payments could be treated as revenue expenditure and if so to what extent arose for consideration before the income-tax authorities in the earlier assessment years, i.e., 1968-69, 1969-70, 1970-71 and 1971-72, having regard to s. 40A(2)(a) of the Act and the relationship that existed between the directors of the assessee-company and the partners of the firm of . Ultimately, by a common order dated October 30, 1976, the said question was settled by , Madras Bench 'C', Madras, in I.T.A. Nos. 366 to 369 (Bang)/1975-76. After perusing the tripartite agreement dated December 20, 1956, entered into between the assessee, the selling agents and and on the basis of the material available on record, the concluded that the selling agents, , had been rendering various services and providing various facilities to the assessee such as, (i) giving guidelines to the assessee in the matter of manufacture of various models and range of pressure cookers in the light of their own market research; (ii) giving advice to the assessee in the matter of selection and appointment of distributors for the sale of cookers and fixing the terms and conditions thereof and also advising termination of services of distributors as and when required; (iii) making reports to the assessee on the activities of the competitors; (iv) participation in the finalisation of advertisement and sales promotional campaigns; (v) supervising the activities of the distributors; (vi) attending to complaints of consumers; (vii) helping the assessee in the matter of collection from distributors; (viii) helping the assessee in liaison work with Government authorities; (ix) helping the assessee in procuring raw materials; and (x) helping the assessee in the matter of excise duty, etc. The also perused the resolution dated October 17, 1960, passed by the assessee-company in its extraordinary general meeting appointing as sole selling agents on a commission of 7 1/3% on cookers and 15% on spare parts and considered that with the passage of time, as and when the assessee came to undertake the after-sale service, the quantum of commission had to be reduced gradually to 5% and 2 1/2%, respectively. The departmental stand that there was no specific agreement entered into by the assessee with was rejected by the which held that the various resolutions passed by the assessee-company and the tripartite agreement earlier referred to constituted the agreement. Thus, the in its elaborate order dated October 30, 1976, held that the payment in question was reasonable in the light of various factors and thus the same was not liable to be disallowed under s. 40A(2)(a) of the Act. The , following the said order, dismissed the departmental appeal in respect of the assessment for the subsequent assessment year 1972-73 also. These orders of the became final, the department having accepted the same. ", "3. When the assessment of the income of the assessee arose during the assessment year 1973-74, the disallowed by his order dated August 6, 1976, the claim made by the assessee regarding payments made to the selling agents as the decision of the had not yet been rendered on the appeals referred to above. The assessee filed an appeal against the said order of assessment before the . The appeal was allowed on March 5, 1977, and the allowance claimed by the assessee was granted in the light of the appellate orders of the regarding earlier assessment years passed on October 30, 1976. The order passed by the was allowed to become final. ", "4. In the assessment order dated January 31, 1977, passed in respect of the assessment year 1974-75, the ITO himself granted the allowance claimed in respect of payments made to the selling agents as by then the appellate orders of the in respect of the earlier years had been pronounced. ", "5. It would appear that the internal audit party raised an objection regarding allowance having been made in respect of payments made to the selling agents under s. 40A(2)(a) of the Act as according to them the case had to be dealt with under s. 40(c)(i) of the Act. In view of the observations made by the audit party the decided to issue the impugned notices under s. 148 of the Act proposing to reopen the assessments for the assessment years 1973-74 and 1974-75 and to make a reassessment. Aggrieved by the said notices the assessee filed the two writ petitions. The petitions were dismissed at the stage of preliminary hearing by the learned single judge observing that since it was open to the assessee to appear before the and to urge that there was no case for reopening the assessment proceedings already completed, they were not fit cases for interference at this stage. These appeals are filed against the orders of the learned single judge. ", "6. After the respondent was served with the notices in these appeals, he has filed a statement of objections to the relief claimed by the assessee. The relevant part of the statement of objections reads : ", "\"4. The Internal Audit party of the department in the course of their inspection for the assessment year 1974-75 raised an objection that the allowance of payment of commission to was not permissible under the Act. They also pointed out that the provisions of section 40(c)(i) of the Act were applicable to the assessee's case. ", "5. The Income-tax Officer accordingly took action under section 148 and initiated proceedings by issue of notice under section 148 for both the assessment years. The appellant has challenged these notices in the writ appeals on various grounds. The grounds on which the notices are challenged are : ", "(i) that it was not open to the department to reopen the assessments for the two years, having accepted the 's order on the same point for the assessment year 1972-73; ", "(ii) the notices were issued only on a change of opinion; ", "(iii) that section 40(c) of the Act has no application to the assessee's case and the only section which has application is section 40A ; ", "(iv) neither section 147(a) nor (b) is applicable to the assessee's case. ", "6. It is submitted that none of the grounds referred to above is available to the assessee to urge in the writ appeals for the following reasons : ", "(i) that for the assessment year 1972-73 the order of the is accepted by the department is not relevant for initiating action under section 148 for the subsequent assessment years; ", "(ii) the notices are not issued only on account of mere change of opinion on the part of the Income-tax Officer, but were issued as a consequence of audit objections raised by the internal audit party; ", "(iii) whether the provisions of section 40A or of section 40(c) are applicable to the facts of the case is a matter exclusively within the jurisdiction of the Income-tax Officer to adjudicate under the Act, and this is not a matter for interference by this hon'ble court under art. 226; ", "(iv) the notices are issued under section 147(b) and the records of assessment contain the information in support of the action and the notices are validly issued.\" ", "7. During the period under consideration, the relevant parts of s. 40 and s. 40A of the Act stood as follows : ", "\"40. Amounts not deductible. - Notwithstanding anything to the contrary in sections 30 to 39 , the following amounts shall not be deducted in computing the income chargeable under the head 'Profits and gains of business or profession' - ... ", "(c) in the case of any company - ", "(i) any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be, ", "(ii) any expenditure or allowance in respect of any assets of the company used by any person referred to in sub-clause (i) either wholly or partly for his own purposes or benefit, if in the opinion of the Income-tax Officer any such expenditure or allowance as is mentioned in sub-clauses (i) and (ii) is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, so, however, that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub-clause (i) shall, in no case, exceed - ", "(A) where such expenditure or allowance relates to a period exceeding eleven months comprised in the previous year, the amount of seventy-two thousand rupees; ", "(B) where such expenditure or allowance relates to a period not exceeding eleven months comprised in the previous year, an amount calculated at the rate of six thousand rupees for each month or part thereof comprised in that period : ", "Provided that in a case where such person is also an employee of the company for any period comprised in the previous year, expenditure of the nature referred to in clauses (i), (ii), (iii) and (iv) of the second proviso to clause (a) of sub-section (5) of section 40A shall not be taken into account for the purposes of sub-clause (A) or sub-clause (B), as the case may be.....\" ", "\"40A. Expenses or payments not deductible in certain circumstances. - (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head 'Profits and gains of business or profession'. ", "(2) (a) Where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person referred to in clause (b) of this sub-section, and the Income-tax Officer is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services of facilities for which the payment is made or the legitimate needs of business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction : ", "Provided that the provisions of this sub-section shall not apply in the case of an assessee being a company in respect of any expenditure to which sub-clause (i) of clause (c) of section 40 applies.....\" ", "8. There is no dispute in this case that if s. 40(c)(i) is applicable to the case then the challenge to the impugned notices has to fail. There is also no dispute about the nature of services and facilities that were provided by the selling agents for which payments have been made. Both parties have depended upon the appellate order of the . The questions raised in these appeals have, therefore, to be decided on the above basis. They are : ", "\"(i) Whether it is open to this court under article 226 of the Constitution to quash the impugned notices and to issue an order restraining the Income-tax Officer from taking further steps ? ", "(ii) Whether the observations made by the internal audit party amounts to 'information' within the meaning of that expression in section 147(b) of the Act ? and ", "(iii) Whether, on the facts and circumstances of the case, the Income-tax Officer had in consequence of such information reason to believe that income chargeable to tax had escaped assessment for the assessment years in question ?\" ", "9. The first question arises out of the contention urged on behalf of the department that the petitions are barred under art. 226(3) of the Constitution, which provides that no petition for the redress of any injury referred to in sub-clause (b) or sub-clause (c) of clause (1) of art. 226 shall be entertained if any other remedy for such redress is provided for by or under any other law for the time being in force. The prayers made in the writ petitions are that the notices issued under s. 148 of the Act in contravention of law, which are likely to result in injury of a substantial natural may be quashed and a writ in the nature of prohibition may be issued to the respondent restraining him from taking any further step pursuant to the impugned notices. The question is whether the law provides any alternative machinery through which the assessee can secure the reliefs prayed for in the petitions. It may be possible for a party to a proceeding before an inferior court or to urge all his contentions against the jurisdiction assumed by it and challenge its decision on that question either before a higher court or tribunal to which an appeal or revision petition may lie against such decision or by applying for a writ in the nature of certiorari under art. 226 of the Constitution. But we are not on that point now. We are concerned with the question whether the petition for issue of a writ in the nature of prohibition referred to in clause (1) of art. 226 of the Constitution is barred only because after the decision of the inferior court or tribunal, an appeal or a revision or a petition for the issue of a writ of certiorari can be filed. The distinction between a writ in the nature of prohibition and a writ in the nature of certiorari and the stages at which they can be issued are well settled. Rejecting the contention based on Rex v. Electricity Commissioners 1 KB 171 (CA) that there was no difference in law between a writ of prohibition and a writ of certiorari, observed in , as follows : ", "\"What is stated there is that both writs of prohibition and 'certiorari' have for their object the restraining of inferior courts from exceeding their jurisdiction, and they could be issued not merely to courts but to all authorities exercising judicial or quasi-judicial functions. But there is one fundamental distinction between the two writs, and that is what is material for the present purpose. They are issued at different stages of the proceedings. When an inferior court takes up for hearing a matter over which it has no jurisdiction, the person against whom the proceedings are taken can move the superior court for a writ of prohibition, and on that, an order will issue forbidding the inferior court from continuing the proceedings. On the other hand, if the court hears that cause or matter and gives a decision, the party aggrieved would have to move the superior court for a writ of 'certiorari', and on that, an order will be made quashing the decision on the ground of want of jurisdiction. ", "It might happen that in a proceeding before the inferior court a decision might have been passed, which does not completely dispose of the matter, in which case it might be necessary to apply both for certiorari and prohibition - 'certiorari' for quashing what had been decided, and prohibition for arresting the further continuance of the proceeding. Authorities have gone to this extent that in such cases when an application is made for a writ of prohibition and there is no prayer for 'certiorari', it would be open to the court to stop further proceedings which are consequential on the decision. But if the proceedings have terminated then, it is too late to issue prohibition and 'certiorari' for quashing is the proper remedy to resort to. Broadly speaking and apart from the cases of the kind referred to above, a writ of prohibition will lie when the proceedings are to any extent pending and a writ of 'certiorari' for quashing after they have terminated in a final decision.\" ", "10. , , further explained the nature of jurisdiction exercised by a superior court while issuing a writ in the nature of prohibition thus (P. 1277) : ", "\"The jurisdiction for grant of a writ of prohibition is primarily supervisory and the object of that writ is to restrain courts of inferior tribunals from exercising a jurisdiction which they do not possess at all or else to prevent them from exceeding the limits of their jurisdiction. In other words, the object is to confine courts or tribunal of inferior or limited jurisdiction within their bounds. It is well settled that the writ of prohibition lies not only for excess of jurisdiction or for absence of jurisdiction but the writ also lies in case of departure from the rules of natural justice (See Halsbury's Laws of England, 3rd edn., Vol. 11, P. 114). It was held for instance by in King v. [1927] 1 KB 491, that as the order of the judge of of July 24, 1925, was made without giving the vicar an opportunity of being heard in his defence, the order was made in violation of the principles of natural justice and was, therefore, an order made without jurisdiction and the writ of prohibition ought to issue. But the writ does not lie to correct the course, practice or procedure of an inferior tribunal, or a wrong decision on the merits of the proceedings. It is also well established that a writ of prohibition cannot be issued to a court or an inferior tribunal for an error of law unless the error makes it go outside its jurisdiction (See v. Comptroller-General of Patents and Designs [1953] 2 WLR 760 at p. 765 (QB) and v. , 59 CLR 369. A clear distinction must, therefore, be maintained between want of jurisdiction and the manner in which it is exercised. If there is want of jurisdiction then the matter is coram non judice and a writ of prohibition will lie to the court or inferior tribunal forbidding it to continue proceedings therein in excess of its jurisdiction.\" ", "11. The reason for interfering at this stage in cases of this nature are to be found in . In that case, the petitioner was asked by a sales tax authority to apply for registration and to submit returns under the provisions of the Bihar Sales Tax Act, 1947. The petitioner who questioned the jurisdiction of the authority to issue such a notice applied under art. 226 of the Constitution. of Patna took the view that the Bihar Sales Tax Act undoubtedly conferred jurisdiction on the STO to investigate the question of liability of a dealer to sales tax and accordingly he was well within his jurisdiction in issuing the impugned notice and dismissed the petition observing that if on assessment it was found that the order was erroneous the matter could be agitated in appeal under that Act. On appeal, repelled the contention that the petition was not maintainable in view of the existence of an alternative remedy in the following terms (p. 457) : ", "\"It has been argued that the application was premature, for there has, so far, been no investigation or finding on facts and no assessment under section 13 of the Act. The appellant-company, contending, as it does, that the Act is ultra vires and void, should have ignored the notice served on it and should not have rushed into court at this stage. This line of argument appears to us to be utterly untenable. In the first place, it ignores the plain fact that this notice, calling upon the appellant-company to forthwith get itself registered as a dealer, and to submit a return and to deposit the tax in a treasury in Bihar, places upon it considerable hardship, harassment and liability which, if the Act is void under article 265 read with article 286 constitute, in praesenti, an encroachment on and an infringement of its right which entitles it to immediately appeal to the appropriate court for redress. In the next place, as was said by this court in , , when an order or notice emanates from or any of its responsible officers directing a person to do something, then, although the order or notice may eventually transpire to be ultra vires and bad in law, it is obviously one which prima facie compels obedience as a matter of prudence and precaution. It is, therefore, not reasonable to expect the person served with such an order or notice to ignore it on the ground that it is illegal, for he can only do so at his own risk and peril. This court has said in the last mentioned case that a person placed in such a situation has the right to be told definitely by the proper legal authority exactly where he stands and what he may or may not do. ", "Another plea advanced by the respondent is that the appellant-company is not entitled to take proceedings praying for the issue of prerogative writs under article 226 as it has adequate alternative remedy under the impugned Act by way of appeal or revision. The answer to this plea is short and simple. The remedy under the Act cannot be said to be adequate and is, indeed, nugatory or useless if the Act which provides for such remedy is itself ultra vires and void and the principle relied upon can, therefore, have no application where a party comes to court with an allegation that his right has been or is being threatened to be infringed by a law which is ultra vires the powers of the legislature which enacted it and as such void and prays for appropriate relief under article 226. As said by this court in 5 STC 115 (SC) this plea of the stands negatived by the decision of this court in . 4 STC 113 (SC). We are, therefore, of the opinion, for reasons stated above, that was not right in holding that the petition under article 226 was misconceived or was not maintainable. It will, therefore, have to be examined and decided on merits.\" ", "12. , where a notice issued under s. 34 of the Indian I.T. Act, 1922, corresponding to s. 148 of the Act was questioned, observed (p. 207) : ", "\"Mr. mentioned more than once the fact that the company would have sufficient opportunity to raise this question, viz., whether the Income-tax Officer had reason to believe that under-assessment had resulted from non-disclosure of material facts, before the Income-tax Officer himself in the assessment proceedings and, if unsuccessful there, before the Appellate Officer or or in under section 66(2) of the India Income-tax Act. The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action.\" ", "13. It is no doubt true that the above decisions relate to the period prior to the amendment of art. 226 of the Constitution by the Constitution (42nd Amend.) Act, 1976. But we are of the view that art. 226(3) as it now stands also does not preclude from exercising the power in appropriate cases to issue a writ, order or direction prohibiting an illegal or unauthorised act. We agree with the view expressed in 1977 Guj 113 [FB] that clause (3) of art. 226 of the Constitution which restricts the scope of power of under art. 226 should be construed strictly and if is of opinion that the alternative remedy does not provide adequate relief, jurisdiction under art. 226 has to be exercised in an appropriate case. ", "14. , held that art. 226(3) was no bar to entertain petition in which the validity of a notice under s. 148 of the Act was challenged holding that there was no provision in the Act providing for any remedy for the redress of any injury that might be caused to the assessee if the assessment was allowed to be reopened and that a suit in which the validity of such notice could be questioned could not be considered as an alternative remedy barring the jurisdiction of under art. 226. also expressed the same view in 111 ITR 900 in which a notice issued under s. 148 of the Act was quashed under art. 226. ", "15. It is true that in , a Full Bench of has held that art. 226(3) of the Constitution precluded an assessee from challenging a notice issued under s. 148 of the Act relying upon the observations made by in the case of and holding that had recognised the existence of an alternative remedy. We are of the view that the case has to be examined in the light of the amended art. 226 which imposes a restriction on the power of and the nature of the alternative remedy available. In that case, qualified the words \"alternative remedy\" with the word \"such\" as referring to the remedy by way of an appeal and reference under s. 66 to which were referred to by the counsel for the department. But it cannot be assumed that held in that case that the appeal and reference referred to therein did really amount to remedies \"alternative\" to a writ or direction that could be issued under art. 226 restraining the continuance of a proceeding which had been commenced without jurisdiction. We respectfully disagree with the above decision of of of Punjab and Haryana. ", "16. We respectfully agree with the views expressed in the above decisions of the of Gujarat, Calcutta and Orissa in so far as the question of issue of a writ in the nature of prohibition is concerned and hold that the writ petitions out of which these appeals arise are not barred by art. 226(3) of the Constitution. There will not be any difference even if it is held that while issuing a notice under s. 148 the acts as an administrative authority to whom a writ of prohibition may not be issued as it is open to to issue under art. 226 any appropriate order or direction restraining the continuance of an illegal proceeding if on merits the case requires to do so. Hence, we reject the first contention. ", "17. On the second question it has to be held that the opinion expressed by the audit party amounts to information within the meaning of that expression in s. 147(b) of the Act and can form the basis of exercise of power thereunder (vide the decision of in ). ", "18. The third question relates to the jurisdiction of the to issue the impugned notices on the facts and in the circumstances of the case. It is argued by Sri , learned counsel for the revenue, that the question whether the information he had was sufficient to issue the impugned notices was a matter for the decision of the and cannot be canvassed before this court in a petition under art. 226. This question is no longer res integra. In the case of , rejected a similar contention while considering the validity of a notice issued under s. 34 of the Indian I.T. Act, 1922, which correspond to ss. 147 and 148 of the Act in the following terms (p. 206) : ", "\"Mr. argued that the question whether the Income-tax Officer had reason to believe that under-assessment had occurred 'by reason of non-disclosure of material facts' should not be investigated by the courts in an application under article 226. Learned counsel seems to suggest that as soon as the Income-tax Officer has reason to believe that there has been under-assessment in any year he has jurisdiction to start proceedings under section 34 by issuing a notice provided 8 years have not elapsed from the end of the year in question, but whether the notices should have been issued within a period of 4 years or not is only a question of limitation which could and should properly be raised in the assessment proceedings. It is wholly incorrect however to suppose that this is a question of limitation only not touching the question of jurisdiction. The scheme of the law clearly is that where the Income-tax Officer has reason to believe that an under-assessment has resulted from non-disclosure he shall have jurisdiction to start proceedings for reassessment within a period of 8 years : and where he has reason to believe that an under-assessment has resulted from other causes he shall have jurisdiction to start proceedings for reassessment within 4 years. Both the conditions, (i) the Income-tax Officer having reason to believe that there has been under-assessment, and (ii) his having reason to believe that such under-assessment has resulted from non-disclosure of material facts, must co-exist before the Income-tax Officer has jurisdiction to start proceedings after the expiry of 4 years. The argument that the court ought not to investigate the existence of one of these conditions, viz., that the Income-tax Officer has reason to believe that under-assessment has resulted from non-disclosure of material facts, cannot therefore be accepted.\" ", "19. The above view is reiterated by in . in which s. 147(b) of the Act arose for consideration in the following terms : ", "\" may, therefore, issue a high prerogative writ prohibiting the Income-tax Officer from proceeding with reassessment when it appears that the Income-tax Officer had no jurisdiction to commence the proceeding. ", "The condition which invests the Income-tax Officer with jurisdiction has two branches : (i) that the Income-tax Officer has reason to believe that income chargeable to tax has escaped assessment; and (ii) that it is in consequence of information which he has in his possession that he has reason so to believe. Since the learned judges of have concentrated their attention upon the second branch of the condition and have reached their conclusion in favour of the assessees on that branch, it would be appropriate to deal with the correctness of that approach. The expression 'information' in the context in which it occurs must, in our judgment, mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment. If, as a result of information in his possession, the Income-tax Officer has reason to believe that income chargeable to tax had escaped assessment, the Income-tax Officer has jurisdiction to assess or reassess income under section 147(b) of the Income-tax Act, 1961. Information in his possession that income chargeable to tax has escaped assessment furnishes a starting point for assessing or reassessing income. If he has that information, the Income-tax Officer may commence proceedings for assessment or reassessment. To commence the proceeding for reassessment it is not necessary that on the materials which came to the notice of the Income-tax Officer, the previous order of assessment was vitiated by some error of fact or law. ", " exercising jurisdiction under article 226 of the Constitution has power to set aside a notice issued under section 147 of the Income-tax Act, 1961, if the condition precedent to the exercise of the jurisdiction does not exist. The court may, in exercise of its powers, ascertain whether the Income-tax Officer had in his possession any information; the court may also determine whether from that information the Income-tax Officer may have reason to believe that income chargeable to tax had escaped assessment. But the jurisdiction of the court extends no further.\" ", "20. It is thus clear that it is open to this court to examine whether the information was such that prima facie it may be said that the had reason to believe that income chargeable to tax had escaped assessment. This leads us on to the facts of these cases. ", "21. As mentioned earlier the had after an elaborate investigation came to the conclusion that the payments made by the assessee to its selling agents were not either excessive or unreasonable having regard to the services and facilities provided by the selling agents by applying s. 40A(2) of the Act. Even though the non-obstante clause in s. 40A(1) gives the provisions of that section an overriding effect over the other provisions of the Act, the proviso to that section excludes the application of that section to any expenditure to which sub-clause (i) of clause (c) of s. 40 of the Act applies. Since the facts are not in dispute, we shall examine whether sub-clause (i) of clause (c) of s. 40 applies at all to the present case. That sub-clause refers to any expenditure incurred by a company which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be. Section 40(c) provides that it is open to the ITO to determine whether the remuneration, benefit or amenity is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom and also places a maximum limit on the deduction that may be claimed in respect of the aggregate of such expenditure and allowance in respect of any one person by declaring that in no case it shall exceed Rs. 72,000 and where such expenditure or allowance relates to a period not exceeding eleven months comprised in the previous year, an amount calculated at the rate of Rs. 6,000 for each month or part thereof comprised in that period. It further provides that where such person is also an employee at the company during the relevant period expenditure of the nature referred to in cls. (i) to (iv) of the second proviso to s. 40A(5)(a) shall not be taken into account for the purpose of determining the above-said maximum limit of Rs. 72,000 or Rs. 6,000 per month, as the case may be. A close reading of the above provision shows that s. 40(c) refers to an expenditure incurred by making periodical payments to a person mentioned in that clause apparently for any personal service that may be rendered by him. It cannot have any reference to payments made by the assessee for all kinds of \"services or facilities\" referred to in s. 40A(2)(a) . It is argued that the proviso thereto suggests that any expenditure incurred for any kind of service which is referred to in the main part of s. 40A(2)(a) and the expenditure referred to in s. 40(c) belong to the same category. This contention is not correct. The expression \"services\" in s. 40A(2)(a) is an expression of wider import. We should not forget that as observed by in . 32 Comp Cas 604 (SC) provisos are sometimes introduced to \"allay fears\" or to remove misapprehensions. A proviso or an exception cannot be interpreted as to destroy the main provision. The proper rule of construction of a proviso is explained by in ., as follows : ", "\"The cardinal rule of construction of the provisions of a section with a proviso is succinctly stated in Maxwell's Interpretation of Statutes, 10th edn., at p. 162 thus : ", "\"The proper course is to apply the broad general rule of construction, which is that a section or enactment must be construed as a whole, each portion throwing light if need be on the rest. ", "The true principle undoubtedly is, that the sound interpretation and meaning of the statute, on a view of the enacting clause, saving clause, and proviso, taken and construed together is to prevail. ", "Unless the words are clear, the court should not so construe the proviso as to attribute an intention to the legislature to give with one hand and take away with another. To put it in other words, a sincere attempt should be made to reconcile the enacting clause and the proviso and to avoid repugnancy between the two.\" ", "22. The crucial words in s. 40A(2)(a) are 'fair market value of the goods, services or facilities'. If the remuneration, benefit or amenity referred to in s. 40(c) is treated as the same as what is paid in return for \"the goods, services or facilities\" then irrespective of the fair market value of the goods, services and facilities provided by a person who may be a director or who has a substantial interest in the company or a relative of the director or of such person, as the case may be, only a maximum of Rs. 72,000 can be allowed to be deducted in computing the income of the company in any one year. We do not think that even intended that such a result should follow. The goods, services and facilities referred to in s. 40A(2)(a) are those which have a market value and which are commercial in character. Many of the services and facilities referred to above are those which are nowadays provided by independent organisations. They take diverse forms, such as packing and forwarding, transport service, advertisement service, warehousing facilities, processing, collection of price, insurance of goods, etc., which involve investment of large finance and employment of number of persons. The cost of post-manufacture operations in some cases will be in the order of 30% of the price paid by the customer. Marketing and distribution of goods have become important branches of modern industrial and commercial operations, which have not become highly standardised. Their importance in the scheme of the free market system is dealt with by in the Chapter entitled \"Services and the Market System\" in his book Economics and Public Purpose as follows : ", "\"Services are rightly assumed to be the domain of the small firm and thus of the market system. In recent times there has been much talk in the United States and other industrial countries of the rise of the so-called service economy. This, in turn, has been taken by determined defenders of the market to prove that the market controlled economy is not only surviving but resurgent. Economics, as it is taught, is being saved from the depredations of the great corporation by the growing demand for services. ", "On examination this development turns out to be a good deal more complex. Numerous service enterprises are the by-product of the rise of the large firm. They are, in effect, a subsidiary and supporting development of the planning system. This is especially the case with that part of the service sector which, from outward evidence, is expanding most rapidly. ", "Services, nonetheless, are the favoured domain of the small firm. As mentioned in the last chapter, the growth of the firm is arrested where the task is geographically dispersed and where, accordingly, the activity at any one point is limited and where the task involved is unstandardized. This means that one or a few people work in isolation, i.e., without supervision. Under such circumstances they adopt their preferred pace, which is normally slow. They enhance their input of mental and physical energy only if, in their earning, they reap the rewards and suffer the penalties of the individual entrepreneur. ", "Geographical dispersion, it may be observed, is not an absolute barrier to organization. If the task is relatively standardized, performance norms can be established for dispersed workers to which they can then be required to conform. Or payment can be according to product or revenue produced. On such dispersed functions can be associated with the capital and technical support of a larger organization as in the case of a local unit of a retail or restaurant chain. In recent times there has also been a great exfoliation of hybrid arrangements, commonly denoted franchises, by which an individual is made responsible for a local enterprise and is thus subject to the comprehensive incentive system, that is, associated with individual entrepreneurship. Ordinarily he is required to put some of his own capital at risk. As the proprietor he is then rewarded for any and all energy and intelligence he expends and punished for failure in this regard, as well as for such errors of optimism and gullibility as he may have made and such other misfortune as he may endure...\" ", "23. Now, in the case of a selling agent who carries on marketing operations it is seen that he has to perform several functions such as, (i) providing godown facilities for the goods of the principal; (ii) providing watch and ward; (iii) arranging collection of price; (iv) providing workshop facilities in the locality in the case of automobiles and machinery; (v) processing of goods; (vi) packing and forwarding; (vii) advertising; (viii) collection of market information; (ix) depositing money with the principal without any interest; (x) insurance of goods, and several other functions. Without the services of a competent selling agent it may not be possible to a big manufacturer to push his goods in the market. We do not think that, in these circumstances, payment made to such a selling agent can be treated as an expenditure referred to in s. 40(c) of the Act. It is also relevant to bear in mind s. 40(c) is a successor to s. 10(4A) of the 1922 Act. But s. 40A was introduced in the year 1968 in the Act apparently for the purpose of preventing the abuse of excessive or unreasonable payments being made by assessee to persons referred to therein in lieu of goods, services and facilities. If the payments represent a fair market value then there is no limitation on the total amount payable during any period. We are of the view that expenditure incurred by way of commission paid to a selling agent who acts as an independent entrepreneur with an independent organization which is not subject to the control and supervision of the assessee, for the services and facilities provided by him, cannot, therefore, be considered as equivalent to remuneration or benefit or amenity referred to in s. 40(c) of the Act. ", "24. In the instant case it is not disputed that & Company, the selling agents, have been providing the services and facilities under the agreement as independent entrepreneurs and it has been held that the commission paid to them was not excessive. At this stage, it is appropriate to set out a part of the order of the dated October 30, 1976, in respect of the assessment years 1968-69 to 1971-72, It reads : ", "\"On a careful consideration of the facts of the case on record, we are of the opinion that the commission paid to the selling agents in this case is neither excessive nor unreasonable having regard to the tests set forth in section 40A(2)(a) . The assessee-company did not have any establishment in the form of premises, staff, telephone and other facilities in any of the major cities of India, Bombay, Calcutta, Delhi and Madras, which are the principal distribution centers. If the assessee-company had these facilities, it would have incurred costs, which the assessee had estimated at about Rs. 7.39 lakhs per year. As regards the legitimate business reeds, we have already set out the background in which the tripartite agreement was entered into between the assessee-company, the foreign company and and Company. We have also referred to in great detail the various services rendered by and Company in the matter of promoting sales of '' pressure Cookers, appointment of distributors, collection distributors, infringement of trade marks, attending to consumer complaints, etc. The assessee-company had also derived benefit by the services rendered by the sole selling agents, and Company, in proof of which the assessee has furnished the following chart of performance : ", "---------------------------------------------------------------------- ", "Year Sales Profit before Commission Profit ending charging before commission tax ---------------------------------------------------------------------- Rs. Rs. Rs. Rs. 31-10-1967 1,06,37,997 18,64,590 6,44,555 12,20,035 31-10-1968 1,37,60,859 34,32,080 7,82,597 26,49,483 31-10-1969 1,13,66,749 23,36,303 5,56,155 18,30,148 31-10-1970 1,57,02 532 42,24,041 4,34,585 37,89,456 ------------------------------------------------------------------------ Having carefully considered all the aspects of the caes, we have no hesitation in upholding the findings of the arrived at on the facts of the case. The orders of the setting aside the disallowance of commission payment is accordingly upheld.\" ", "25. The total payment made to the selling agents may be in excess of Rs. 72,000 per year. But as long as the case does fall under s. 40(c) , there is no justification for the to issue the impugned notices even though the audit party may have said so. We hold that the present case does not at all fall under s. 40(c) of the Act. We are of the opinion that on the face of it the case did not attract s. 147(b) of the Act. We, therefore, held that the had no jurisdiction to issue the impugned notices under s. 148 of the Act as he could not reasonably entertain any doubt that any part of the assessee's income had escaped assessment by reason of not applying s. 40(c) to the case. ", "26. In the result, we allow these appeals, reverse the common order passed by the learned single judge and quash the notices issued under s. 148 of the Act which are impugned in these cases. We also direct the respondent in each of these cases not to take any further proceedings pursuant to the impugned notices. ", "27. Parties shall bear their own costs."], "relevant_candidates": ["0000056195", "0000317785", "0000345078", "0000424874", "0000608874", "0000729546", "0000839441", "0001008845", "0001237020", "0001345052", "0001385734", "0001450722", "0118959948"]} {"id": "0001839963", "text": ["PETITIONER: , LTD. AND ANOTHER Vs. RESPONDENT: THE COLLECTOR OF CUSTOMS, DATE OF JUDGMENT: 04/05/1962 BENCH: , A.K. BENCH: , A.K. SUBBARAO, K. , J.R. CITATION: 1962 AIR 1893 1963 SCR (3) 338 CITATOR INFO : D 1963 SC1470 (12,14) RF 1966 SC1586 (9) R 1969 SC 110 (8) R 1971 SC 170 (1893 RF 1972 SC2466 (15,16) RF 1973 SC 106 (145,146) RF 1991 SC 647 (5,6) R 1992 SC1417 (20) ACT: Import--Law enabling Government to issue notifications prohibiting or restricting Import--Import licence--Breach of conditions--If amounts to import without licence--Law declared by --If binding on authorities or tribunals under its superintendence--Sea Act, 1878 (8 of 1878), ss. 19, 167(8)--Imports and Export (Control) Act, 1947 (18 of 1947), ss. 3, 5--Constitution of India, Arts. 226, 227. HEADNOTE: On October 8, 1948, the appellant company was granted a licence to import from the U. S. A. a large quantity of electrical instruments. The licence was issued subject to the condition that the goods would be utilised only for consumption as raw material or accessories in the licence holder's factory and that no portion thereof would be sold to any party. After the goods arrived in India in February- March, 1949, the company took delivery of them on payment of customs duty. On information alleged to have been received by the authorities concerned that the goods were being sold in the market in breach of the conditions of the licence, the , after obtaining a search warrant from the magistrate seized a large stock of the goods from the godown of the appellant. On January 12, 1951, the customs authorities filed a complaint before the Magistrate under s. 5 of the Imports and Exports (Control) Act, 1947, against the second appellant, who was a director of the company, and others, on the allegation that the accused persons had, in violation of the conditions of the licence, disposed of portions of the goods covered by it. The Magistrate discharged the accused and his order was confirmed by the on March 3, 1955, on the ground that s. 5 of the Act penalised only a contravention of an order made or deemed to have been made under the said Act, but did not penalise the contravention of the conditions of licence issued under the Act or issued under a statutory order made under the Act. On January 16, 1953, the made an order directing the seized goods to be sold and the sale proceeds kept with the Chief Presidency Magistrate. On August 28, 339 1955, served a notice on the appel- lants under s. 167(8) of the Sea Act, 1873, read with s. 3 (2) of the Imports and Exports (Control) Act, 1947 to show cause why the moneys lying with the Chief Presidency Magistrate representing the imported goods should not be confiscated and also why penalty should not be imposed on them, inasmuch as they had infringed the conditions of the licence issued to them by selling a portion of the goods imported to others. The appellants filed an application under Art. 226 of the Constitution of India before the of Calcutta praying for a write of prohibition restraining the respondent from proceeding with the enquiry on the ground that it was without jurisdiction. Held, (Per and , ., , J., dissenting), that : (1) that the application under Art. 226 of the Constitution was maintainable, because, if on a true construction of the provisions of law under which the notice was issued, the respondent had no jurisdiction to initiate proceedings in respect of the acts alleged to have been done by the appellants, the respondent could be prohibited from proceeding with the same. (2) under s. 167(8) of the Sea Act, 1878, read with s.3(2) of the Imports and Exports (Control) Act, 1947, only the goods imported in contravention of an order under the latter Act were liable to be confiscated, but the section did not expressly or by necessarly implication empower the authority concerned to consficate the goods imported under a valid licence on the ground that a condition of the licence not imposed by the order was infringed or violated. The infringement of a condition in the licence was not an infringement of the order and did not, therefore, attract s. 167(8) of the Sea Act. (3) public notices issued by governingthe issue of import licences were not orders issued under s. 3of the Imports and Exports (Control) Act. (4) in the present case, as the goods were imported tinder a valid licence they could not be considered as goods either prohibited or restricted within the meaning of s. 167 (8) of the Sea Act and, therefore, the Collector 'of had no jurisdiction to proceed with the enquiry tinder that section. Per and ,,-The law declared by the highest Court in the State was binding or, authorities 340 or tribunals under its superintendence and that they could not ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. Consequently, the of Calcutta, having by its order dated March 3, 1955, held that a contravention of a condition imposed by a licence issued under the Act was not an offence under s. 5 of the Act, the notice dated August 28, 1955, signifying the launching of proceedings contrary to the law laid down by the , was invalid. Per , J.-(I) The application under Art. 226 of the Constitution was not maintainable, because the Collector had jurisdiction to decide what was a breach of an order and, therefore, whether the breach of a condition of a licence was breach of an order. (2) Even assuming that the decision of the dated March 3, 1955, was binding on the Collector, that would not affect his jurisdiction in the present case to decide whether the goods were liable to confiscation. an ordermade under the Imports and Exports (Control) Act 1947, was a breach of the order itself. (4) Where after crossing the customs barrier lawfully, goods are disposed of in contravention of a restriction duly imposed, they must be considered to have been imported contrary to the restriction. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION : Civil Appeal No. 383 of 1960, Appeal by special leave from the judgment and order dated January 5, 1959, of in Appeal from Original Order No. 54 of 1957. ", ", , and , for the appellants. ", " and , for the respondent. 1962. May 4. delivered his own Judgment and the judgment of and , JJ., was delivered by , J. ", "341 ", "SARKAR, J.-The appellants had brought into India from the U.S.A. a large quantity of electrical instruments under a licence. The respondent, the Collector of , Calcutta, started proceedings for confiscation of these goods tinder s.167(8) of the Sea Act, 1878. The appellants contend that the proceedings are entirely without jurisdiction as the Collector can confiscate only when there is an import in contravention of an order prohibiting or restricting it and in the present case the Collector was proceeding to confiscate on the ground that a condition of the licence under which the goods had been imported had been disobeyed. The appellants, therefore, ask for a writ of prohibition directing the Collector to stop the proceedings. The question is, has the Collector jurisdiction to adjudicate whether the goods are liable to be confiscated? The decision of that question, however, depends on certain statutory provisions and the fact of the case to which, therefore, I shall immediately turn. ", "Sub-section (1) of s. 3 of the Import and Exports (Control) Act, 1947, provides that the Government may by order prohibit, restrict or otherwise control the import of goods. By Notification No. 23-I.T.C./43 issued under r. 84 of the Defence of India Rules which by virtue of s. 4 of the Act of 1947 is to be deemed to have been issued under that Act, it was ordered that DO electrical instrument could be brought into India except under a licence. By another order made under s. 3 of the Act and contained in Notification No. 2- ITC/48, dated March 6, 1948, it was provided that the licence to import electrical instruments might be issued subject to the condition that the goods would not be disposed of or otherwise dealt with without the written permission of the licensing authority. ", "The first appellant is a company and the second appellant, one of its directors. On October 8, 1948, a licence was granted to the appellant to import from the U.S.A. a large quantity of electrical instruments, namely fluorescent tubes and fluorescent fixtures. In the application for the licence it was stated that the goods were not required for sale but for modernising the lighting system of the appellant's factory at Ellore in Madras. The licence was issued subject to the condition that the goods would be utilised only for consumption as raw material or accessories in the licence holder's factory and that no portion thereof would be sold to any party. The goods duly arrived in India and were cleared out of the customs sometime about the end of February, 1949. Soon thereafter, the authorities concerned are said to have got information that the goods were being sold in the market in breach of the condition of the licence. Thereupon the police took steps and after obtaining a search warrant from a Magistrate in Calcutta on August 12, 1949, seized a large stock of the goods from the godown of the appellants. Thereafter on January 12, 1951, two proceed. ings were started. One of them was a prosecution of various officers of the appellant company including the second appellant under s. 420 read with s. 120 of the Indian 'Penal Code on the allegation that the licence bid been obtained on false and fraudulent representations as there was no intention at any time to use the goods for any factory. After certain proceedings to which it is unnecessary to refer, the accused persons were discharged by a Presidency Magistrate of Calcutta on July 27, 1953, under s. 253 of the Code of Criminal Procedure and the prosecution under so. 420 and 120B of the Penal Code came to an end. The learned Magistrate held that it had not been proved that the licensing authority had been deceived by any representation of the accused officers of the company nor that \"right from the time of applying for the licence, the intention was to sell the goods or part thereof\". ", "The other proceeding was a prosecution of the second appellant and another person under s.5 of the Act of 1947. That section provides that \"if any person contravenes any order ... under this Act, he shall ... be punishable with imprisonment...\". It was alleged that the accused persons had in violation of the conditions of the licence disposed of portions the goods covered by it and, therefore, com- mitted an offence under s, 5 of the Act of 1947. This proceeding resulted in a acquittal by the trial Court which was confirmed by at Calcutta on March 3, 1955. , who delivered the judgment of said that it was difficult to hold that a condition of the licence amounted to an order under the Act and unless the penal section included the contravention of the condition as an offence it could not be held that such a contravention amounted to an offence under the section. ", "While these proceedings were pending an order was made by on January 16, 1953, directing the seized goods to be sold and the sale proceeds kept with the Chief Presidency Magistrate, Calcutta. Pursuant to this order the goods were sold for a sum of Rs. 4,15,000 and the sale proceeds have since been lying with the Chief Presidency Magistrate. ", "After the aforesaid proceedings had come to an end, the Collector of , Calcutta on August 28, 1955, served a notice on the appellant to show cause why the moneys lying with the Chief presidency Magistrate representing the imported goods should not be confiscated under s. 167(8) of the Sea Act, read with s. 3(2) of the Act of 1947 and why further penalty should not be imposed on them under these provisions. It is this notice which gave rise to the proceedings with which we are concerned. The notice stated that a prohibition on the import of the goods except under a special licence and subject to the conditions stated in it was imposed under s. 3(1) of the Act of 1947 and that by virtue of this prohibition the importation of the goods would be deemed to be illegal unless \"(I) at the time of importation of goods were covered by a valid special licence which had not been caused to be issued by fraudulent misrepresentation, (2) after importation the goods or any part of them were not sold or permitted to be utilised by any other party, except the importers for consumption as raw material.\" It also stated that investigation had revealed that portion of the goods were sold by the appellants to other people. After receipt of the notice the appellants moved at Calcutta under Art. 226 of the Constitution for a writ of prohibition prohibiting the respondent, the Collector of , Calcutta, from taking any proceeding pursuant to the notice under ss. 167 and 182 of the Sea Cus- toms Act against the appellants. The application was first heard by , J, and was dismissed. An appeal by the appellants to an appellate bench of also failed. The appellants have now approached this in further appeal by special leave. ", "Sub-section (2) of s. 3 of the Act of 1947 provides that \"all goods to which any order under subsection (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under s. 19 of the Sea Act, 1878 and all the provisions of that Act shall have effect accordingly\". Section 19 of the Sea Act is contained in Chapter IV of that Act. Section 167(8) of the Sea Act states the \"If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction ... such goods shall be liable to confiscation; and any person concerned in any such offence shall be liable to a penalty\". Section 182 of this Act authorises various Officers including a Collector to adjudicate on questions of confiscation and penalty under s. 167(8) . As earlier stated the question is one of jurisdiction. The contention of learned counsel for the appellant is that under s. 167(8) of the Sea Act read with s. 182 of that Act under which the Collector of is proceeding, he has jurisdiction only to decide whether goods have been imported contrary to the prohibition or restriction imposed by an order made under s. 3(1) of the Act of 1947 but he has no jurisdiction under these sections to decide any question of confication of goods for breach of a condition of a licence issued under such an order. It, is said that it appeared from the notice served by the Collector that he was proceeding to decide whether the goods were liable to confiscation because they had been disposed of in breach of the condition of the licence under which they had been imported which he has no jurisdiction to do and hence the appellants were entitled to a writ of prohibition which they sought. For the purpose of this argument the appellants proceed on the assumption that there has been a breach of the condition but this they do not, of course, admit. The basis of the appellant's contention is the proposition that a breach of the conditions of a licence is not a breach of the order under which the licence was granted and the condition imposed and that no offence under s. 167(8) of the Sea Act is committed if a condition of the licence is contravened. In my view this proposition is not well founded. But assume it is correct. Even so it seems to me that there is no lack of jurisdiction in the Collector in the present case. He has admittedly jurisdiction to decide whether there has been a breach of an order. It follows that he has jurisdiction to decide what is a breach of an order and, therefore, whether the breach of a condition of a licence is breach of an order. To say that the breach of a condition is not a breach of an order is only to set up a defence that the goods cannot be confiscated for such a breach. Such a contention does not oust the jurisdiction of the Collector to decide whether the breach of a, condition is breach of an order. If the Collector decides that the breach of a condition is a breach of an order, his decision, on the assumption that I have made, would be wrong but it would not be a decision made without jurisdiction. This is the view which all the learned Judges of took and it seems to me to be the correct view. ", "Further I think in the, present case one of the allegations in the notice is that the goods had been imported without a licence and therefore in direct violation of an order made under s. 3(1) of the Act of 1947. Clearly, the Collector has jurisdiction to decide the question raised by such an allegation. Now the notice served by the Collector on the appellants contains a statement that an importation of goods would be illegal unless it was covered by a licence which has not been procured by fraudulent misrepresentation and that in the present case the licence had been obtained by fraudulent misrepresentation. The notice hence alleges that the goods had been imported really without a licence, that is, in breach of an order. Even if it be assumed, as the appellants contend that an importation under a licence fraudulently procured is not an importation without a licence, that would only show that there has been no importation without a licence, that is, in breach of an order, but it would not deprive the Collector of his jurisdiction to decide that question. Likewise the fact that a Magistrate has decided that the licensing authority had not been deceived by the appellants in the matter of the issue of the licence which, if binding on the Collector, would only show that the licence had not been fraudulently procured and cannot affect the Collector's jurisdiction in any way. ", "It is also said that the decision of on a point of law is binding on all inferior Tribunals within its territorial jurisdiction. It is, therefore, contended that the Collector is bound by the decision of Sen. , to which I have earlier referred, that the breach of a condition of a licence is not a breach of the order under which the licence was issued and the condition imposed, As at present advised I am not prepared to subscribe to the view that the decision of is so binding. But it seems to me that the question does not arise, for even if the decision of was binding on the Collector, that would not affect his jurisdiction. All that it would establish is that the Collector would have. while exercising his jurisdiction, to hold that the breach of a condition of the licence is not a breach of an order. Its only effect would be that the appellants would not have to establish independently as a proposition of law that a breach of a condition of a licence is not the breach of an order under which it had been issued but might for that purpose rely on the judgment of Sen, ", "I think, therefore, that the Collector has jurisdiction in this case to decide whether the goods were liable to confiscation. If he has this jurisdiction, he has clearly also the jurisdiction to decide whether the appellants are liable to have a further pecuniary penalty imposed on them under s. 167(8) of the Sea Customs Act. If this is the correct view, as I think it is, then the appellants are not entitled to the writ. But suppose I am wrong in what I have said so far about the Collector's jurisdiction. Suppose as the appellants contend, he had in this case no jurisdiction to decide whether the goods are liable to confiscation. That would be because the breach of a condition of a licence is not a breach of an order under which it was issued and the Collector has no jurisdiction to decide whether it is so or not. This is how the appellants themselves put it. It has not been contended, and indeed it cannot be, that if the breach of a condition of a licence is the breach of an order under which it was issued, the Collector would have jurisdiction to decide whether in the present case the goods are liable to confiscation. ", "I am unable to agree that the breach of a condition of a licence issued under an order made under the Act of 1947 is not a breach of the order. In my view, such a breach is a breach of the order itself. Subsection (1) of s 3 of the Act of 1947 empowers the to make orders prohibiting, restricting or otherwise controlling the import of goods. Now clearly, one method of restricting or controlling the import of goods would be to regulate their use or disposition after they had been brought into India. Therefore, under the Act of 1947 the has power to restrict or control imports in this way; it could lawfully drovide that the goods would not after import be dealt with in a certain way. It would follow that Notification No. 2- ITC/48 was quite competent and intra vires the Act and, therefore, the condition in the licence issued in this case that the goods would not be sold after they had been brought into India had been legitimately imposed. The contrary has not indeed been seriously contended. When, therefore, such a condition is contravened, it is really the order authorising its imposition that is contravened. That seems to me to be the clear intention of the legislature for otherwise the efficacy of the Act of 1947 would be largely destroyed. That Act was intended to preserve and advance the economy of the State on which the welfare of the people depended. In such a statute large powers have to be given to the and they were undoubtedly so given in the present case. The statute clearly intended and it should be so read that these power could be effectively exercised. Therefore the breach of a condition of a licence legitimately imposed in exercise of that power has to be read as a breach of the order by which the power was exercised and the condition imposed. It follows that the Collector has jurisdiction to-decide whether there has been a breach of a condition of a licence and whether, therefore confiscation should be ordered under s. 167(8) of the Sea Customs Act and further penalty imposed. ", "I observed that , , in dealing with the argument advanced on behalf of the customs authorities that a breach of a condition of a licence imposed under an order issued under the Act would be a breach of that order said that there might be some substance in it in the present case, if notification No. 23-ITC/43 which provided that electrical instrument could not be imported without a licence had itself provided that the licence might impose condition as to how the goods were to be dealt with after they had been brought into India but that that had not been done. I am unable to appreciate this reasoning. Notification No. 23- ITC/ 43 has to be read along with Notification No. 2-ITC/48. The latter provided that a licence to import might be issued subject to a condition like the one which we have in the present case. The licence that was issued in this case was subject to these notifications and was issued under both of them. The position, therefore, is the same as if one order had provided that the goods could not be imported except under a licence which could impose the condition. I am unable to agree with Sen, , and also , , who expressed the same view without giving any reason to support it. ", "I find that the view that I have taken is supported by authority. v. (1) is a case fully in point and is a much stronger case That case dealt with a prosecution under s. 19 of the London Hackney Carriages Act, 1853, which provided that \"for every offence against the provisions of this Act for which no special penalty is hereinbefore appointed the offender shall be liable to a penalty not exceeding forty shillings\" A cab driver was prosecuted under the section for breach of a regulation made under s. 4 of the Hackney Carriages Act, 1850. Section 21 of the Hackney Carriages Act, 1853, provided that the Acts of 1850 and 1853 were to be considered as one Act. The driver was held liable to be penalised under s. 19 of the Act of 1953. It was observed at p. 66. ", "\"How are the words 'against the provisions of the Act' to be read ? The two statutes are to be construed as one. In my opinion, to break the regulations made under the authority of a statute is to break the statute itself, and therefore s. 19 of the London Hackney Carriages Act, 1823 must be read thus: (For every offence against the regulations prom- ulgated under these two Act, which are to be read as one, a penalty not exceeding forty shillings may be imposed'.\" ", "(1) [1909] 1 K.B. 57,66. ", "351 ", "That case received the full approval of in v. where Viscount said, \"There is, of course, no doubt that when a statute like the Emergency Powers (Defence) Act, 1939, enables an authority to make regu- lations, a regulation which is validly made under the Act, i.e., which is intra vires o f the regulation-making authority, should be regarded as though it were itself an enactment.\" ", "I think these observations fully apply to an Act like the Imports and Exports (Control) Act. Then I find that in our country too the same view has been taken. Thus in ., observed, \"When a notification is issued by an executive authority in exercise of a power conferred by statue, that notification is as much a part of the law as if it had been incorporated within the body of the statute at the time of its enactment.\" ", "It has, therefore, to be held that where an order passed under the Act authorises the impostion of a condition a breach of the condition would be punishable as a breach of the order under the Act. ", "I might now notice another argument. It was this: Under s. 167 (8) of the Sea Act, it was the import in contravention of the restriction that was an offence. The contention was that once the goods had been imported validly, that is to say, once they bad been allowed to cross the barrier under a valid licence, there could not be an import contrary to any prohibition or restriction. It seems to me that this is taking too narrow a view of s. 167 (8). Suppose the order under s. 3 (1) of the Imports and Exports (Control) Act had itself (1) A.C. 362, 365. (2) A.I.R. 1923 Pat. 1. ", "352 ", "said that goods imported shall not be sold in the market without the permission of a certain authority and the goods imported were notwithstanding this sold without such permission. It would to my mind make nonsense of a. 167 (8) if it were to be said even in such a case that the goods bad not been imported in contravention of the restriction imposed by a legitimate order duly made. I have earlier stated that the coditions in the licence have to be treated as conditions contained in an order issued under the Act of 1947 itself. Therefore, the breach of such a condition would amount to a contravention of an order restricting the import of goods. Such a contravention is clearly punishable under s. 167 (8). The word ,import\" has not been defined in the Sea Act. In order that the Act of 1947 does not become infructuous, which result the legislature could not have intended, it must be held that where after crossing the barrier lawfully, goods are disposed of in contravention of a restriction duly imposed, they have been imported contrary to the restriction. ", "It remains only to consider the argument that under the Sea Customs Act only the goods imported can be confiscated and therefore, the money now lying with the Presidency Magistrate cannot be confiscated. I think this argument is wholly untenable. The money represents the goods. The order for sale was made by with the consent of both the parties because the goods were deteriorating. Therefore there can be no doubt that the sale proceeds of the goods which could be confiscated, can also be confiscated. ", "I think that the appeal fails and should be dismissed. , J.-This appeal by special leave is directed against the judgment of a division Bench of at Calcutta dated January 5, 1957, confirming the order of a single Judge of that Court dismissing the petition filed by the appellants under Art. 226 of the Constitution. ", "The dispute which culminated in this appeal has had a tortuous career and had its origin in the year 1948. To appreciate the contentions of the parties it is necessary to survey broadly the events covering a long period. The appellants are Messrs. , a company having its registered office in Calcutta and the Director of that Company. On September 27, 1948, the appellant-Company filed an application with the Chief Controller of Imports, New Delhi for the grant of a licence to import 20, 000 fluorescent tubes and 2,000 fluorescent fixtures from the United States of America. The application was accompanied by a covering letter. In the application it was mentioned that the goods were required for the Company's own use as industrial raw material or accessories; but in the covering letter it was stated that the goods were required primarily for their mills at Ellore in the Madras Presidency where they where planning to arrange for an up-to-date lighting system. The Chief Contoller of Imports issued a special licence to the appellants on October 8, 1948. The licence granted was in respect of fluorescent tubes and fixtures of the approximate CIF value of Rs. 3,33,333 equivalent to $100,000 and the shipment was to be made within one year from the date of issue of the licence. The licence issued had a rubber stamp which ran thus: ", "\"This licence is issued subject to the condi- tion that the goods will be utilised only for consumption as raw material or accessories in the licence holder's factory and that no portion thereof will be sold to any party.\" ", "The licence did not impose any restriction as regards the number of tubes and fixtures to be imported, but a ceiling was placed on the value of the goods as stated supra. Between March 21, 1949, and March 26, 1949, the appellants took delivery of the said tubes and fixtures of the specified value and cleared them on payment of customs duty. The number of tubes and fixtures imported was larger than that mentioned in the application, but it is common case that the value did not exceed the ceiling fixed under the license. On information alleged to have been received by the Chief controller of imports that the appellant-Company was selling the goods to various parties, the matter was placed before , of India, Now Delhi. On August 31, 1949, the said Police establishment obtained a search warrant from the Chief presidency Magistrate, Calcutta, and seized, among others, from the appellants' godown a large stock of fluorescent tubes and fixtures, and left them with the appellants on their executing a bond. It may be mentioned at this stage that the value of the stock imported was about Rs. 4,66,000 i.e., the purchase price of Rs. 3,33,333, together with the customs duty paid on the said goods. In the sale subsequently made at the instance of , the stock seized fetched a sum of Rs. 4,15,000. On December 9, 1950, the appellants filed an application before the Chief Presidency Magistrate, Calcutta, for the return of the seized goods, whereupon the learned Magistrate called for a report from , New Delhi. On January 9 12, 1951, the said submitted a Challan against appellant No. 2 and others for alleged offences under s. 4201120B of the Indian Penal Code and the same was registered as Case No. C. 121 of 1951. On the same day, the Assistant Collector of filed a complaint before the said Magistrate against appellant No. 2 and others for committing an offence under s. 5 of the Imports and Exports (Control) Act,, 1947 (hereinafter called the Act, for having sold a portion of the stock of fluorescent tubes and fixtures in contravention of the terms of the licence and the same was registered as Case No. C. 120 of 1951. On June 28, 1951, the learned Presidency Magistrate discharged all the accused in both the cases under s. 253 of the Code of Criminal Procedure after holding that no prima facie case had been made out against any of them. Two revisions were filed against that order in -one by the and the other by the Authorities. , J., who heard the revisions, set aside the orders of discharge made by the Presidency Magistrate and remanded the cases for fresh disposal. On June 8, 1952, the appellants filed an application before the Chief presidency Magistrate for the release of seized goods on the ground that they were deteriorating, but that was dismissed. But in a revision against that order, on January 16,1953, directed the goods to be sold by the Presidency Magistrate and the sale proceeds to be kept in his custody. The goods were sold accordingly and they fetched a sum of Rs. 4,15,000 and the money has since then been in the custody of the said court. After remand, the Presidency Magistrate took the evidence of innumerable witnesses for the prosecution and for the defence, considered a number of documents and discharged appellant No. 2 in both the cases. He held that appellant No. 2 was neither guilty of the offence under s. 420 of the Indian Penal Code, as, in his view, there was no fraudulent or dishonest inducement at the time the appli- cation for licence was made, nor of any contravention of the provisions of the Act. Though he discharged appellant No. ", "2. he did not make over the sale proceeds to him. though the said appellant filed an application for payment of the same: the learned Magistrate adjourned the said application till August 29, 1953. The Assistant Collector of filed a revision to against the order of discharge of appellant No. 2 passed in case No. C. 120 of 1951' and the same was registered as Criminal Revision No. 1124 of 1953; he also obtained an interim stay of the return of the money to appellant No. 2. But no revision was filed against the order of the Presidency Magistrate discharging appellant No- 2 of the offence under s. 420 , Indian Penal Code . The Criminal Revision (No. 1124 of 1953) came up before a division Bench of , Consisting of Mitter and , JJ., and the learned Judges, by their judgment dated March 3, 1955, dismissed the revision holding that there had been no contravention of the order made or deemed to be made under the Act. The learned Judges construed a. 5 of the Act and held that the said section penalised only a contravention of an order made or deemed to have been made under the said Act, but did not penalise the contravention of the conditions of licence issued under the Act or issued under a statutory order made under that Act, and dismissed the revision. On March 24, 1955, the appellants filed an application before the Chief Presidency Magistrate for making over the sale proceeds to them; and the said Magistrate issued a notice to the Assistant Collector of and also to to show cause on or before April 19, 1955. On April 19, 1955, the Superintendent, Special Police Establishment, did not show cause, but the Assistant Collector of asked for an adjournment and the same was granted till May 7, 1955; and again on May 7, 1955, he took another adjournment of the hearing of the application on the ground that departmental proceedings were pending against the appellants. On May 9, 1955, the appellants filed a revision in , presumably, against the order adjourning the application and the said revision was numbered as Revision Case No. 582 of 1955 and it was adjourned from time to time at the request of the respondent. On May 28, 1955, the respondent started a proceeding purported to be under s. 167(8) of the Sea Act, read with s. 3(2) of the Act and called upon the appellants by notice to show cause within seven days from the date thereof why the said proceeds, namely, Rs. 4,15,000 should not be confiscated and also why Penal action should not be taken against them. It was stated in the notice that the special licence was issued on the express condition that the goods covered by the said licence should be utilised for consumption as raw material or assessories in the factory of the licence holder and that no part thereof should be sold or permitted to be utilities by any other party, that the appellants sold a portion of the goods imported under the said licence to others in Breach of the said condition and that, as the appellants infringed the said condition, the goods, or the money substituted in its place, were liable to be confiscated. On June 3, 1955, the appellant filed an application in at Calcutta under Art. 226 of the Constitution for the issue of an appropriate writ, including a writ in the nature of prohibition, against the Collector of from continuing with the proceedings initiated by him. The application, in the first instance, came up before , J., who by his order dated March 18, 1957, dismissed the application as premature; but, in the course of his judgment, the learned Judge agreed with the earlier division Bench, which disposed of the revision against the order of discharge, that a breach of a condition alone would not be a violation of the order passed by , but he observed that the learned Judges on the earlier occasion did not decide the question as to what was permitted to be imported: he drew a distinction between a licensee who imported goods perfectly bona fide for his own consumption but who later changed his mind and a licensee who, even from the inception, knew that he did not require the goods for his own use, but entered into the transaction fraudulently; in the second situation, he learned Judge proceeded to state, the goods imported were never goods required for the petitioner's company for its own use. The appellants preferred an appeal to a division Bench of of , consisting of , C.J., and , J. The learned Judges dismissed the appeal solely on the ground that it was within the jurisdiction of the Collector of to ascertain whether there had been a contravention of the relevant provisions of the Act as would entail an order of confiscation and that, therefore, , J., was right in refusing to issue a writ; but they made it clear that all the questions raised in the case were left open for decision by the Chief Controller of Imports. Hence the present appeal. ", "Mr. , learned counsel for the appellants, raised before us the following points: (1) The Assistant Collector of has no jurisdiction to initiate proceedings under a. 167 (8) of the Sea Act, 1878, read with s. 3(2) of the Imports and Exports (Control) Act, 1947, in the circumstances of the case, and therefore, should have issued an order in the nature of a writ of prohibition restraining him from proceeding with the said inquiry. (2) A division Bench of of Calcutta in Criminal Revision No. 1124 of 1953, to which the respondent was a party, declared the law on the construction of the provisions of s.5 of the Act, read with s.3(2) thereof, viz., that it penalizes only a contravention of an order made or deemed to have been made under the Act and not a contravention of a condition imposed by the licence issued under the Act or issued under a statutory order made under the Act; and after that declaration, which is binding on all the authorities and tribunals within the territorial juris- diction of that court, the respondent has no jurisdiction to ignore the said order and proceed with a fresh inquiry in direct contravention of the law so declared. (3) That apart, the proposition so laid down by the said division Bench is sound and, if so, the respondent could not initiate proceedings under s. 167(8) of the Sea Act in respect of a contravention of a condition of the licence, as it is neither a part of an order nor a condition laid down by the Order within the meaning of s. 3 of the Act. (4) The chief Controller of Imports has no jurisdiction to take action under s. 167(8) of the Sea Act on the ground that a condition inserted in a licence is subsequently infringed by an importer, for it is said, the rule only enables the Authorities to confiscate the goods imported without a license whereas in the present case the goods were imported under a valid subsisting licence. (5) Clause (8) of a. 167 of the Sea Act does only authorize the confiscation of goods so imported and not the sale proceeds of the said goods, for the reason that the said money could not conceivably be goods in any sense of the term. ", "Mr. , learned counsel for the respondent, argued contra. His argument may be summarized thus: (1) The Collector of has jurisdiction to consider under s. 167(8) (if the Sea Act whether the goods are imported contrary to the restrictions imposed under the Act, and, therefore, could not issue a writ of prohibition against the said authority from proceeding with the inquiry. (2) The notice issued is not a statutory notice but is only an intimation to the appellants of the initiation of the proceedings and, therefore, the question of jurisdiction could not be decided on the contents of the said notice. (3) The Authorities have a concurrent jurisdiction with the criminal Court to deal with matters entrusted to them under the Acts and, therefore, the findings of a criminal court or even of on the same or similar matters could not bind them and they could come to a different conclusion of their own both on the question of law as well as on fact,% from those of criminal courts, though the decision of may have persuasive influence on them. (4) The condition imposed in a licence is under the relevant order issued by in exercise of its power under s. 3 of the Act, and, as the appellants infringed that condition, the goods imported are liable to be confiscated under s.167(8) of the Sea Act, read with s.3(2) of the Act. (5) As the appellants imported goods on a misrepresentation, in law the import must be deemed to be one made without a licence and therefore the goods imported are goods either prohibited or restricted within the meaning of s. 167(8) of the Sea Act. (6) The Collector has jurisdiction to confiscate goods after they have left the customs barrier, and, as the money in deposit in court is the proceeds of the sale directed to be held by in the interest of both the parties, it represents the said goods, and, in any view, as the order of is binding on both the parties, it is not open to the appellants to plead that the goods are not represented by the said money, The first question is whether the petition filed by the appellants under Art. 226 of the Constitution for the issue of a writ in the nature of prohibition is maintainable in the circumstances of the case. A writ of prohibition is an order directed to an inferior forbidding it from continuing with a proceeding therein on the ground that the proceeding is without or in excess of jurisdiction or contrary to the laws of the land, statutory or otherwise: v. Lord Penzance(1) and Halsbury's Laws of England, 3rd Edn: Vol. 11, p, 52. ", "The argument of' learned counsel for the appellants is that on the face of the notice dated May 28, 1955, issued by the respondent, the latter has no jurisdiction to initiate proceedings under a. 167(8) of the Sea Act, read with s.3(2) of the Act. Learned counsel for the respondent argues that the said notice is not a statutory notice but only a memorandum informally sent to the appellants intimating them that proceedings have been started against them, that the said notice is neither full nor exhaustive and that jurisdictional facts could be ascertained only by the Collector in the course of the said proceedings on full inquiry, We do not see any justification for this argument, The respondent proposed to take action under s. 167(8) of the Sea Act, read with s. 3(2) of the Act. It cannot be denied that the proceedings under the said sections are quasijudicial in nature. Whether a statute provides for a notice or not, it is incumbent upon the respondent to issue notice to the appellants disclosing the circumstances under which proceedings are sought to be initiated against them. Any proceedings taken without such notice would be against the principles of natural justice. In the present case, in our view, the respondent rightly issued such a notice wherein specific acts constituting contraventions of the provisions of the Acts for which action was to be initiated were clearly mentioned. Assuming that a notice could be laconic, in the present case it was a speaking one clearly specifying the alleged act of contravention. If on a reading of the said notice, it is manifest that on the assumption that the facts alleged or allegations made therein were true, none of the conditions laid down in the specified sections (1) (1881) 6 App. Cas. 424. ", "362 ", "was contravened, the respondent would have no jurisdiction to initiate proceedings pursuant to that notice. To state it differently, if on a true construction of the provisions of the said two sections the respondent has no jurisdiction to initiate proceedings or make an inquiry under the said sections in respect of certain acts alleged to have been done by the appellants, the respondent can certainly be prohibited from proceeding with the same. We therefore, reject this preliminary contention. ", "The next question is, what is the true construction of the provisions of the relevant sections? It would be convenient at this stage to read the relevant parts of ss. 3 and 5 of the Act and as, 19 and 167(8) of the Sea Customs Act. ", "Imports and Exports (Control) Act, 1947 Section 3 . (1) The Central Government may, by order published in the Official Gazette, make provisions for prohibiting, restricting or otherwise controlling, in all cases or i n specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order:- ", "(a) the import, export, carriage coastwise or shipment as ship stores of goods of any specified description, ", "(b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried. ", "(2) All goods to which any order under sub- ", "section (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of the Sea Customs Act, 1878 (VIII of 1878) and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word \"shall\" therein the word \"may\" were substituted. ", " Section 5 . Penalty-If any person contravenes or attempts to contravene. or abets a contravention of any order made or deemed to have been made under this Act, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Sea Customs Act, 1878 (VIII of 1878), as applied by sub-section (2) of section 3 , be punishable with imprisonment for a term which may extend to one year, or with fine, or with both. ", "The Sea Customs Act, 1878. ", " Section 19 . The Central Government may from time to time, by notification in the Offi- ", "cial Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any customs frontier as defined by . ", " Section 167 . The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively : ", "Section of this Offences Act to which Penalties offences has reference. ", "8. If any such goods shall goods, the be liable to con- importation fiscation, and any or exporta- person concerned tion of which in any such offen- is for the 18 and 19 ce shall be liable time being to a penalty not prohibited or exceeding three restricted by times the value of or under the goods, or not Chapter IV exceeding one of this Act, thousand rupees. be imported into or ex- ported from India contr- ary to such prohibition or restriction. ", "The essence of the offence is a contravention of any order made or deemed to have been made under the Act. All orders under this Act can only be made by in exercise of the power conferred upon it by s. 3 of the Act, and \"all orders made under r. 84 of the Defence of India Rules or that rule as continued in force by the Emergency Provisions (Continuance) Ordinance, 1946 (XX of 1946), and in force immediately before the commencement of this Act, shall continue in force and be deemed to have been made under this Act\". The contravention of only these two categories of orders attracts the provisions of s. 19 of the See, Customs Act . By reason of s. 3(2) of the Act, all goods to which any order under sub-s. (1) of s. 3 applies shall be deemed to be goods of which the import or export has been prohibited under s. 19 of the Sea Customs Act and all the provisions of the Sea Customs Act, with some modifications- ", "with which we are not concerned now-shall apply. This provision in its turn attracts. along with others a. 167 (8) of the Sea Customs Acts, and under that section, read with a. 3(2) of the Act, the goods imported in contravention of an order under the Act shall be liable to be confiscated. But the section does not expressly or by necessary implication empower the authority concerned to confiscate the goods imported under a valid licence on the ground that a condition of the licence not imposed by the order is infringed or violated. If that be the true construction of the said provisions, the question arises whether in the instant case the allegations made in the notice bring the goods imported within the scope of the provisions of s. 167(8) of the Sea Customs Act. We shall now proceed to deal with that question. ", "As we have already noticed in the earlier stage of the judgment, the notice issued by the respondent charges the appellants thus: ", "\"One of the conditions of the special licence was that the goods would be utilized for consumption as raw material or accessories in the factory of the licence-holder and no part thereof would be sold to other parties, but in contravention of that condition the appellants sold a part of the goods imported to a third party and as the goods had been caused to be issued by fraudulent misrepresentation, they were liable to be confiscated under s. 167(8) of the Sea Customs Act.\" ", "366 ", "Section 167 (8) of the Sea Customs Act can be invoked only if an order issued under s. 3 of the Act was infringed during the course of the import or export. The division Bench of held that a contravention of a condition imposed by a licence issued under the Act is not an offence under s. 5 of the Act. This raises the question whether an administrative tribunal can ignore the law declared by the highest court in the State and initiate proceedings in direct violation of the law so declared. Under Art,. 215, shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Under Art. 226 , it has a plenary power to issue orders or writs for the en- forcement of the fundamental rights and for any other purpose to any person or authority, including in appropriate cases any , within its territorial jurisdiction. Under Art. 227 it has jurisdiction over all courts and tribunals throughout the territories in relation to which it exercise jurisdiction. It would be anomalous to suggest that a tribunal over which has superint- endence can ignore the law declared by that court and start proceedings in direct violation of it. If a tribunal can do so, all the sub-ordinate courts can equally do so, for there is no specific, provision, just like in the case of , making the law declared by binding on subordinate courts. It is implicit in the power of supervision conferred on a superior tribunal that all the tribunals subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working: otherwise there would be confusion in the administration of law and respect for law would irretrievably suffer. We, therefor, hold that the law declared by the highest court in the State is binding on authorities or tribunals under its supreintendence, and that they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. If that be so, the notice issued by the authority signifying the launching of proceedings contrary to the law laid down by would be in. valid and the proceedings themselves would be without jurisdiction. ", "We shall now proceed to consider the merits, Sub-section (2) of s. 3 of the Act clearly lays down that all goods, to which an order under sub-s. (1) thereof applies, shall be deemed to be goods of which the export or import has been prohibited or restricted under s. 19 of the Sea Customs Act. Therefore, a. 167(8) of the Sea Customs Act can be attracted only if there was a contravention of the order issued under s. 3 of the Act. Does any order so issued by its own force impose such a condition ? The Import Trade Control Notification dated July 1, 1943, reads thus: ", "The notification of in the late No. 23 ITC/43, dated the 1st July, 1943, incorporating all amendments upto the 25th November.. 1951. In exercise of the powers conferred by sub- rule (3) of rule 84 of the Defence of India Rules is pleased ................................. to prohibit the bringing into British India by sea, land or air from any place outside India of any goods of the descriptions specified in the Schedule hereto annexed except the following, namely., ", "(xiii) any goods of the descriptions spe- cified in the schedule which are covered by a special licence issued by any officer specially authorised in this behalf by the Central Government. ", "It is not disputed that the goods imported in the present case were specified in the schedule. This order prima facie does not impose a condition in the matter of issuing a licence for the specified goods. On March 6, 1948, another notification No. 2-ITC/48 was issued by . The relevant part of it reads: ", "In exercise of the powers conferred by subsection (1) and sub-section (3) of section 3 of the Imports and Exports (Control) Act, 1947 (XVIII of 1947), is pleased to make the following order, namely :- ", "(a) any officer issuing a licence under clauses (viii) to (xiv) of the Notification of the Government of India in the late Department of Commerce No. 23ITC/43, dated the 1st July 1943, may issue the same subject to one or more of the conditions stated below : ", "(i) that goods covered by the licence shall not be disposed of or otherwise dealt with without the written permission of the licen- sing authority or any person duly authorised by it; ", "(v) that such other conditions may be imposed which the licensing authority considers to be expedient from the administrative point of view and which are not inconsistent with th e provisions of the said Act. ", "(b) Where a licensee is found to have contravened the order or the terms and condi- tions embodied in or accompanying a licence, the appropriate licensing authority or the Chief Controller of Imports may notify him that, without prejudice to any penalty to which he may be liable under the Imports and Exports (Control) Act, 1947 (XVIII of 1947), or any other enactment for the time being in force, he shall either permanently or for a specified period be refused any further licence for import of goods. ", "It will be seen from this order that it does not provide for a condition in the licence that subsequent to the import the goods should not be sold. Condition (y) of cl. (a) only empowers the licensing authority to impose a condition from an administrative point of view. It cannot be suggested that the condition, with which we are now concerned, is a condition imposed from an administrative point of view, but it is a condition which affects the rights of parties. Learned counsel for the respondent argues that a public notice issued by the on July 26, 1948, is an order made in exercise of the power conferred on the Central under a. 3 of the Act and that the order directs the imposition of a condition not to sell to a third party the goods permitted to be imported and that that condition was contravened. The public notice dated July 26, 1948, was published in the on July 29, 1948. The relevant part of it reads of India MINISTRY OF COMMERCE PUBLIC NOTICES New Delhi, the 26th July, 1948 Subject :-Principles governing the issue of import licences for the period July-December, 1948. ", "No. 1 (13)-l.T.C./47 (i). The following decisions made by governing the issue of import licences for goods falling under Parts II to V of the Import Trade Control Schedule for the licen- cing period July-December, 1948 are hereby published for general information. These decisions do not apply to goods falling under Capital Goods and H.E.P. Licensing procedure which has been prescribed in the Public Notice issued on 10th April, 1948. ", "Under paragraph 5, importers are requested to study the Appendix carefully and avoid making applications for import licences for articles which will not be licensed; para. 7 prescribes the form of application; para. 8 says that in the case of articles which are subject to overall monetary limits, where goods are raw materials and accessories used in Industrial concerns, applications from actual consumers of goods will receive consideration, and that actual consumers should clearly specify in their application their past and estimated consumption of the article concerned as required in para. 6 of the form of application. Paragraphs 6 to 10 deal with would-be applicants. Paragraph 11 says that no time limit has been fixed for receiving applications from importers who are actual consumers of industrial raw material and accessories and who have imported the commodities concerned during any financial year between 1938-39 and 1947-48 (inclusive) and that it is hoped to deal with these applications chronologically as and when received. Paragraph 13 describes the authorities to whom applications should be made. A perusal of this notice shows that it is intended to give information to the public as regards the procedure to be followed in the matter of filing of applications by different categories of applicants. It not only does not on its face purport to be a statutory order issued under a. 3 of the Act, but also the internal evidence furnished by it clearly shows that it could not be one under that section. That apart, this order does not amend the previous orders or direct the imposition of a condition on an importer not to sell the goods to a third party or provide for a penalty for doing s0. ", "Learned counsel for the respondent asserts that the said public notice is an order made in exercise of the power conferred on under a. 3 (1) of the Act. On the other hand, learned counsel for the appellants contends that public notices are not such orders but only information given to the public for their guidance. Firstly, the said notice does not purport to have been issued under s. 3 (1) of the Act, whereas the orders referred to earlier, that is, notifications Nos. 23-ITC/43 and 2-ITC/48 and similar others, were issued by in exercise of the power conferred on it by sub- r. (3) of r. 84 of the Defence of India Rules or s. 3 (3) of the Act, as the case may be. itself makes a clear distinction in the form adopted in issuing the notice. Secondly, while the notifications issued under s. 3 of the Act are described as orders, the notices are described as \"public notices\"; while the notifications under s. 3 of the Act regulate the rights of parties, the public notices give information to the public regarding the principles governing the issue of import licences for specified periods. It is also clear that the orders issued under s. 3 of the Act, having statutory force, have to be repealed, if the new order in any manner modifies or supersedes the provisions of an earlier order; public notices are issued periodically without repealing or modifying the earlier notices or notifications. For instance, on December 7, 1955, in exercise of the power conferred by ss. 3 and 4-A of the Act made an order and under el. 12 thereof the orders contained in Schedule IV were repeated; Schedule IV only mentioned five notifications issued under s. 3 of the Act, but no public notice was included in that list. To put it differently, orders made under a. 3 of the Act have statutory force, whereas public notices are policy statements administratively made by the for public information. The foreword to the Import Trade Control Hand- book of Rules and Procedure, 1952, under the signature of the Secretary to the of India, in brings out this distinction thus : ", "\"In the past the half-yearly publication on Import Control, popularly known as the \"Red Book\", has included not only a statement of policy for the ensuing six months but also a reproduction of various notifications relating to Import Control and detailed information on points of procedure\". ", "It is true the Chief Controller made an affidavit in that the policy-statements are issued under s. 3 of the Act. But, as we have said, that is only on information which has no support either in the form adopted or the practice followed or the matter incorporated in the notifications. We have no hesitation in holding that public notices are not orders issued under s. 3 of the Act. It follows from the above that the infringement of a condition in the licence not to sell the goods imported to third parties is not an infringement of the order, and, therefore, the said infringement does not attract s. 167 (8) of the Sea Customs Act. ", "Nor is there any legal basis for the contention that licence obtained by misrepresentation makes the licence non est, with the result that the goods should be deemed to have been imported without licence in contravention of the order issued under a. 3 of the Act so as to bring the case within cl. (8) of s. 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is only voidable : it is good till avoided in the manner prescribed by law. On May 1, 1948, issued an order in exercise of the power conferred on it by s.3 of the Act to provide for licences obtained by misrepresentation, among others, and it reads: ", "\"The authorities mentioned in the Schedule hereto annexed may under one or other of the following circumstances cancel licences issue d by any officer authorised to do so under clauses (viii) to (xiv) of the notification of in the late , No. 23-ITC/43, dated 1st July 1943, or take such action as is considered necessary to ensure that the same in made ineffective, namely:- ", "(i) when it is found subsequent to the issue of a licence that the same has been issued inadvertently, irregularly or contrary to rules, fraudulently or through misleading statement on the part of the importer con- cerned; or ", "(iii) when it is found that the licensee has not complied with any one or more of the conditions subject to which the licence may have been issued. ", "374 ", "SCHEDULE ", "------------------------------------------------------------- ", " authority ", "Clause (xiii) Any officer authorised Chief Con- ", "by the Central Govern- troller of Imports and/or Government of India. ", "This order, therefore, authorised or the Chief Controller of Imports to cancel such licences and make them ineffective. The specified authority has not cancelled the licence issued in this case on the ground that the condition has been infringed. We need not consider the question whether the Chief Controller of Imports or , as the case may be, can cancel a licence after the term of the licence has expired, for no such cancellation has been made in this case, In the circumstances, we must hold that when the goods were imported, they were imported under a valid licence and therefore it is not possible to say that the goods imported were those prohibited or restricted by or under Ch. IV of the Act within the meaning of cl. (8) of s. 167 of the Sea Customs Act. ", "It follows that on the assumption that the allegations made in the notice are true, the tribunal has no jurisdiction to proceed with the inquiry under s. 167(8) of the Sea Customs Act. ", "Learned counsel for the appellants further contends that s. 167(8) of the Sea Customs Act applies only to an act done before or during the course of an import or export into or out of India in contravention of the prohibition or restrictions imposed under s.3 of the Act and that, as in the instant case the breach of the condition was committed subsequent to the importation of the concerned goods, the said goods could not be confiscated, under the said section. But we do not propose to express our opinion on this question, as it does not arise in view of our findings on other questions raised in the case. ", "Before closing we may briefly notice one more contention raised by learned counsel for the appellants. It is said that, as the goods imported were converted into money, the Collector has no jurisdiction to confiscate the same and that he can, at the best, only trace the goods in whosesoever hands they may be. We have pointed out that the goods were sold only at the instance of the court in the interest of both the parties, as they were deteriorating. The order is binding on the parties. The sale proceeds are preserved for the benefit of the party who finally succeeds. In the circumstances it is not open to the appellants to argue that money deposited in the court does not represent the goods. ", "In the result, the order of is set aside and the appeal is allowed with costs. There will be an order of prohibition restraining from proceeding with the inquiry under s.167(8) of the Sea Customs Act. ", "By COURT: In view of the majority opinion of the , the appeal is allowed with costs. There will be an order of prohibition restraining from proceeding with the enquiry under s. 167(8) of the Sea Customs Act. ", "Appeal allowed. ", "376"], "relevant_candidates": ["0001486850"]} {"id": "0001847433", "text": ["ORDER ", "1. The assesses, a banking company, had the assessment for the year ending on December 31, 1968, completed on October 4,1969. Subsequently, however, the assessment was reopened under Section 147(a) of the Income-tax Act, 1961, to bring to tax a sum of Rs. 54,485 in respect of interest suspense account. It is, however, according to the assessee, the sums representing interest on loans, recovery of which was considered doubtful. ", "2. Incidentally be it noted that the assessee had disclosed this sum of Rs. 54,485 in the balance-sheet as unrealised amount of interest along with the return filed by it and the Income-tax Officer had accepted the return and as a matter of fact had excluded that amount in the assessment order completed on October 4, 1969. ", "3. The factual score depicts that in terms of a notice under Section 147(a) of the Act, the assessment was reopened and a sum of Rs. 54,485 was subjected to tax on the ground that the interest accrued and due on the loans advanced by the bank was the income of the bank for the relevant assessment year and the assessee has failed to disclose this income in the return filed earlier. ", "4. In the appeal against the reassessment order, the Commissioner of Income-tax (Appeals) upheld the order of the Income-tax Officer and on further appeal, the , however, reversed the view of the Commissioner and held that the instructions of contained in circular dated October 6, 1952, would govern the case and the reopening was not justified and on a reference before under Section 256(1) of the Income-tax Act, answered the reference in favour of the assessee upon recording its approval on to the order of the . ", "5. The records depict that two questions were raised before (see [1986] 157 ITR 509) namely (page 510): ", "\"1. Whether, on the facts and in the circumstances of the case, is right in law in holding that the provisions of Section 147(a) are not attracted ? ", "2. Whether, on the facts and in the circumstance of the case, is right in law in holding that the interest of Rs. 54,485 taken directly to interest suspense account is not assessable to income-tax ?\" ", "6. So far as the second question is concerned, recorded that the matter need not be gone into by reason of the circular dated October 6, 1952, issued by . Neither do we feel it necessary to go into the issue any further. ", "7. Turning attention to the first question as regards the provisions under Section 147(a) be it noted and as the facts depict, there is no failure on the part of the assessee in furnishing the particulars pertaining to the above noted sum as not recoverable for the relevant accounting year and the statements filed along with the original return disclosed the full details of the aforesaid account. There is, therefore, no failure on the part of the assessee to disclose fully and truly the material facts necessary for the assessment years for the respective years and as such Section 147(a) has no manner of application and is not attracted in the facts of the matter under consideration. on consideration of the facts came to the conclusion that the was justified in coming to the said finding and we also record our concurrence therewith. ", "8. Incidentally this issue came for consideration before this court in a batch of cases on more or less identical situations and this court while dealing with this matter finally, recorded that the question as regards reopening of the assessment under Section 147(a) of the Act would not arise further. The question in the facts of the matter under consideration is thus covered by the judgment of this court in 158 ITR 102. ", "9. In that view of the matter, these appeals fail and are dismissed. No order as to costs."], "relevant_candidates": ["0001862896"]} {"id": "0001848445", "text": ["JUDGMENT , Kt., C.J. ", "1. It is well settled that the succession to temple offices is governed by user which is taken to represent the intentions of the founder, and it is not disputed that in this part of India the user in the case of temple archakas is that the office is hereditary and descends in the ordinary course of succession to women who are not themselves competent to perform the duties of the office by ministering in the temple and perform them by deputy. The opinion of the pandits in 1853 in v. (1853) M.S.D.A., 261 shows that this was then the recognized usage, The question appears to have first come before the in 1910, but since that time there have been numerous decisions where the user has been recognized and enforced, and all the Hindu members of the with one exception have been parties to these decisions which also are conformable with the decisions of other High s. The only authority the other way is the judgment of , in v. (1905.) I.L R., 38 Mad., 850 who considered that on principle a personally disqualified heir could not inherit the office and delegate the duties to others. In the argument before us it was again contended that the decision of in (1913) I.L.R., 35 All., 283 (P.C.) was in accordance with this view and must be taken to have overruled the other cases. In that case the office of archaka had descended to the widow and daughter of the last male archaka, and the question was whether the daughter was to be succeeded by her son or by the reversioner of the last male holder. The archakas were gossains and there was a usage among them that females continued to belong to their father's kul or family after marriage. On this ground apparently the daughter had been allowed to fill the office even though married to a member of the Bhat community who was incapable of filling it. No question arose in that case as to the right of the widow and her daughter after her to fill the office; and it does not appear whether while they held it they performed the duties in person or by deputy. What their Lordships had to consider was, whether on the daughter's death the office should go to her son and her descendants, a line of heirs who, as , would be incapable of performing its duties, or should revert to the male heirs of the last male holder. Their Lordships at p. 288 observe: ", "The rule as to the shebaitship being vested in the heir of the founder must from the very nature of the right, be subject to the condition that the devolution in the ordinary line of descent is not inconsistent with or opposed to the purpose the founder had in view in establishing the worship and they say later on at page 289 that: ", "to allow the plaintiff's claim to an admittedly Ballav temple where the rights are performed according to Ballav ritual, which it is clearly established they cannot perform, would in their Lordships' judgment, defeat the purpose for which the worship was established. ", "2. A contrary decision would have involved the devolution of the office to a line of heirs incompetent to perform its duties. Moreover, the plaintiff's claim in that case was not shown to be in accordance with any well recognized user which is the best evidence of the founder's intentions. I do not consider that this decision of their Lordships warrants us in overruling the numerous decisions of this in conformity with the decisions of other s by which the widow and daughter of the last male archaka are held entitled in accordance with the established user to succeed to the office of archaka discharging its duties by deputy and to transmit it to their heirs, who, as male heirs are preferred to female, will generally be competent, to perform the duties in person, , J., for whose opinion I have a great respect, considers, if I rightly understand him, that the established custom of female succession to this office is of so mischievous and objectionable a character that it cannot have been intended by the founder. That view is not shared by J., who has considered this aspect of the case in the Order of Reference, or by the other Hindu members of the who have considered the question. We should not in my opinion be justified in overruling on this ground the numerous decisions of this in which the usage has been recognized and enforced, unless its mischievous character had been established beyond all doubt or controversy. This has not been done and I feel bound to answer the question in the negative. ", ", J. ", "3. I have carefully reconsidered my decision in v. (1915) I.L.R., 38 Mad., 850 in the light of the later decisions of this Court quoted by my learned brother Mr. Justice in his Order of Reference, also of his own keen and yet considerate criticisms (if I may be permitted to say so) of my said decision and also of the opinions of my Lord and of Mr. Justice on this reference. I am, notwithstanding, unable to convince myself that my opinion was erroneous. On the other hand, the decision of their Lordships of in (1913) I.L.R., 35 All., 283 (P.C.) lends, in my opinion, strong support to my conclusion. With respect, I am unable to agree with Mr. Justice that the widow and daughter of the last male of the Ballavacharya Grossain sect in case must have been not competent to perform the duties of the office and must have \"employed deputies to perform the duty\" and that their enjoyment of the emoluments of the office during their lifetime must be due to their having performed the duties through such deputies and not directly. On the contrary, it seems to me clear from the report that the out-of-date unshastraic custom obtaining in the South by which Dharmapathnies (who are Sahadharmacharinees of their husbands) are considered incompetent to pronounce mantrams and do religious duties along with (and even solely in the absence of) their husbands does not obtain among the Ballavacharya Grossains, one of the Vnishnavite sects which are in several respects much more liberal in the treatment of women and birth-sudras than other sects though many Vaishnavite sects might have become very degenerate in other respects. ", "4. I am further unable to see that my conclusion as to 's opinion and the weight of the authority of the texts quoted by him being in my favour is wrong. ", "5. A general rule has been laid down by their Lordships of that where a person is incompetent to perform the rites of a religious office, it would defeat the very purpose for which the worship was established if he (including of course 'she') is allowed to inherit the office. Any usage inconsistent with such purpose is clearly invalid in law. [See v. (1917) I.L R., 40 Mad., 709 (P.C.)]. ", "6. I am unable to appreciate any distinction in principle between the incompetency of the claimant to the office by reason of sex and the incompetency due to any other cause. I do not think that the pronouncement of their Lordships of can be got round through any such distinction. ", "7. Though 'law' is not always logical and though the narrow point referred to us relates to inheritance by a person incompetent by reason of sex alone for performing the duties of a religious office, I do not think that considerations of the difficulties which are aggressively prominent when we take the four analogous cases (1) of a male heir being incompetent by reason of conversion to another faith when the inheritance opens, (2) of his becoming incompetent after the inheritance opens, (3) of a female heir being incompetent by reason of conversion before the inheritance opens and (4) becoming incompetent after the inheritance opens, can be kept out of mind in deciding the present reference, especially having regard to the provisions of Act XXI of 1850. ", "8. Coming to the weight to be given to practice and usage, many pernicious and unshastraic usages have crept into the Hindu religions and social systems during dark medieval days and through efflux of time. Most of them entered gradually and insidiously through the tendency of that subtle materialism which sometimes parades as strict orthodox spirituality. The letter is exalted over the spirit, the so-called hereditary rights are given more importance than the performance of the religious duties, instead of the rights being kept as a very subordinate adjunct and appurtenance of the duties, and religious offices and caste status are looked upon more as intended for the means of livelihood and for the enjoyment of worldly power and material possessions than as things bestowed upon one for helping all humanity in its evolutionary progress towards the common goal. ", "9. I respectfully agree with my Lord that the law as at present settled by the decisions of is that unless the usages in connexion with religious institutions and offices are manifestly immoral or opposed to public policy or opposed to the intentions of the founders of a religious trust or manifestly injurious to the trust, the are not entitled to go back for the law to the purer, more liberal and more ancient shastraic; fountain heads. The question therefore narrows itself to this: Whether the usage relied on by the respondents is manifestly injurious (both in its material and moral aspects) to the religious institution, and whether it could have been in conformity with the intention of the founder of the trust. It is on this question that I feel that there is real and substantial difference of opinion between myself and the learned Judges who have considered this question in this since 1910. My angle of vision in respect of these questions might have been affected by my longstanding interest and sensitiveness in the cause of Hindu religious and social reform on shastraic lines. I find, however, that after making sincere attempts to allow as much discount as possible to the above factor, my view of the seriousness of the evils of usage in question has not been materially affected. While the incumbent of a religious office must be allowed to employ a temporary deputy when a temporary disqualification or inability occurs, such as birth and death pollutions, absence from home owing to urgent private affairs, etc., I am clear in my mind that a usage permitting a permanently disqualified claimant to receive the emoluments of a religious office and to appoint his or her own deputy to do the duties is of such a seriously mischievous character that it ought not to be recognized. I regret I am unable to agree with Mr. Justice that the performance of the duties through the deputy of a female disqualified heir is not less beneficial to the religious institution then the performance of the next qualified male heir. It is notorious that the deputy is usually chosen on the principle of a Dutch auction. The man who agrees to allow the widow to retain the largest portion of the emoluments of the office and to receive the least as his own remuneration is given the place of deputy. Thus when the usually small remuneration in rice and cash attached to the archaka office does not go to the deputy who does duties, the deputy cannot be expected to perform the duties at all satisfactorily. I do not see why a religious office should be considered less important than any other kind of office. To allow even the office of a peon to be held by a permanently disqualified man because he undertakes to appoint a deputy, out of the remuneration of the office is, in my opinion, entirely mischievous and it ought not to be allowed even if it is sanctioned by usage. ", "10. In the result, my answer to the question referred is that so long as a Hindu widow is held incompetent by reason of her sex from doing the duty of a priestly office, she is also incompetent to inherit the service and emoluments of the office. ", "Spencer, J. ", "11. Without laying down any rule as to particular institutions, in which there may be a special custom that females cannot succeed to the office and emoluments, the trend of decisions in this Court has certainly been to treat females as competent to succeed to the archakaship of Hindu temples in this Presidency. (1910) 8 M.L.T., 325: s.c. (1910) M.W.N., 445, (1914) 27 M.L.J., 179, v. Savundrathammal (1914) 16 M.L.T., 423, (1917) I.L.R.,40 Mad., 105 and v. Second Appeal No. 2078 of 1915 (unreported). ", "12. The judgment of , J., in v. (1915) I.L.R., 38 Mad., 850 was an exception to the course of decided cases and was not adopted by , J., who sat with him. I do not think it contains reasons of such weight as to justify a departure from the principle of stare decisis. I would answer the question referred to us in the negative."], "relevant_candidates": ["0000509411", "0001724645", "0001731694", "0001856855"]} {"id": "0001854419", "text": ["JUDGMENT , J. ", "1. A common question of law as to whether it is open to an insurance company to challenge the quantum of compensation awarded by in an appeal filed in arises in the three appeals which are under consideration by us. The matter was referred to because when one appeal, i.e., Civil Misc. First Appeal No. 80 of 1977, came up for disposal before a of this court, comprising , Chief Justice and , their Lordships were of the opinion that there was some divergence of opinion on this subject in the different in the country and, consequently, they made the following order of reference on October 27, 1979. ", "\" The point sought to be raised in this appeal relates to the quantum of compensation awarded by in favour of the respondents. ", "A preliminary objection has been raised on behalf of the respondents that it is not open to the appellant to challenge the quantum of compensation awarded by the . The argument is founded on the language employed in Section 96(2) and Sections 110C and 110D of the Motor Vehicles Act. ", "Mr. has sought to meet this point by enunciating the view that it is open to the insurer to challenge the very quantum of compensation. Sections 96(2) read with Sections 110C and 110D do not operate as a bar to the raising of such a plea in the appeal. ", "It'seems that there is divergence of opinion among the Indian on the question of law debated before us. , AIR 1977 All 330 ; ACJ 252, , AIR 1971 Mys 207 and , AIR 1969 MP 190; ACJ 164, support the contention of the respondent, whereas MACJ 103; ACJ 101, have laid down the contrary view. We are given to understand that there is a recent judgment of this court rendered in Civil Misc. First Appeal No. 15 of l978, ( ) dealing with the point at issue. ", "In view of the divergence of opinion expressed by the Indian on this subject and in view of the recent judgment of this court, it would be appropriate to refer the case to . ", "Accordingly the case is referred to for an authoritative pronouncement. The date and the venue will be communicated to the counsel for the parties. \" ", "2. In the other two appeals also, this question was involved and they were also directed to be heard along with Civil Miscellaneous First Appeal No. 80 of 1977. ", "3. The fact in all the three appeals are somewhat different and I propose to first deal with the legal question and then deal with each of the three appeals on merits. ", "4. At the outset, Lwould like to point out, with due respect to the referring Bench, that in all the judgments noticed in the order of reference, there is no divergence of opinion and all the judgments noticed therein lay down the proposition that it is not open to an insurer to question an award of the on the question of quantum only except on the grounds contained in Section 96(2) of the M.V. Act. This position is conceded by Mr. also but his argument is that Section 96(2) of the Act is not exhaustive and that there are no limitations prescribed by Section 110D of the Act, of the nature and character of Section 96(2) of the Act, and, therefore, an insurer has a right to challenge an award of the on all the grounds, including the challenge to the quantum of compensation, in an appeal in . Before proceeding to examine these submissions, it would be advantageous to notice some of the relevant provisions of the Act. ", "\" Section 96 . Duty of insurers to satisfy judgments against persons insured in respect of third party risks.--(1) If, after a certificate of insurance has been issued under Sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay, to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. ", "(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the court of the bringing of the procedings, or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceeding is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:-- ", "(a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability, and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 105 ; or ", "(b) that there was been a breach of a specified condition of the policy, being one of the following conditions, namely :-- ", "(i) a condition excluding the use of the vehicle -- ", "(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or ", "(b) for organised racing and speed testing, or ", "(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a public service vehicle or a goods vehicle, or ", "(d) without side-car being attached, where the vehicle is a motor cycle ; or ", "(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of \" ", "disqualification ; or ", "(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion ; or ", "(c) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular. ", "(2A) Where any such judgment as is referred to in Sub-section (1) is obtained from a court in the State of Jammu and Kashmir or in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of Section 13 of the Code of Civil Procedure, 1908, conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act , 1938, and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in Sub-section (1), as if the judgment were given by a court in India: ", "Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before or after the commencement of the pro ceedings in which the judgment is given, the insurer had notice through the court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the State of Jammu and Kashmir or the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in Sub-section (2). ", "(3) Where a certificate of insurance has been issued under Sub-section (4) of Section 95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in Clause (b) of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under Clause (b) of Sub-section (1) of Section 95 , be of no effect: ", "Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. ", "(4) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. ", "(5) In this section the expressions \"material fact\" and \"material particular \" mean, respectively, a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk, and, if so, at what premium and on what conditions, and the expression \"liability covered by the terms of the policy\" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy. ", "(6) No insurer to whom the notice referred to in Sub-section (2) or sub-Section (2A) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in Sub-section (1) or Sub-section (2A) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the State of Jammu and Kashmir or of the reciprocating country, as the case may be.\" ", "Section 110B lays down : ", "\" On receipt of an application for compensation made under section 110A shall, after giving the parties an opportunity of being heard, hold an enquiry into the claim and may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid; and in making the award shall specify the amount which shall be paid by the insurer.\" ", "Section 110C provides: ", "\" Procedure and powers of Claims Tribunals.--(1) In holding any inquiry under Section 110B , may, subject to any rules that may be made in this behalf, follow such summary procedure as it thinks fit. ", "(2) shall have all the powers of for the purpose of taking evidence on oath and of enforcing the attendance of witnesses and of compelling the discovery and production of documents and material objects and for such other purposes as may be prescribed ; and shall be deemed to be for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (Vof 1898). ", "(2A) Where in the course of any inquiry, is satisfied that-- ", "(i) there is collusion between the person making the claim and the person against whom the claim is made, or ", "(ii) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded by it in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. ", "(3) Subject to any rules that may be made in this behalf, may, for the purpose of adjudicating upon any claim for compensation, choose one or more persons possessing special knowledge of any matter relevant to the inquiry to assist it in holding the inquiry.\" ", "\"110D. Appeals.--(1) Subject to the provisions of Sub-section (2), any person aggrieved by an award of a Claims Tribunal may, within ninety days from the date of the award, prefer an appeal to : ", "Provided that may entertain the appeal after the expiry of the said period of ninety days if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time. ", "(2) No appeal shall lie against any award of , if the amount in dispute in the appeal is less than two thousand rupees.\" ", "5. Thus, Section 96 of the Act enables the claimant, the assured and the insurer, interested in any litigation arising out of a motor vehicle accident to be made parties to the claim petition. The section maintains the respective rights and liabilities of one qua the other. Whereas Sub-section (1) of Section 96 is only a declaratory provision; it deems an insurer to be a judgment-debtor when a decree is passed against an insured under certain circumstances rendering him liable to a third party, Sub-section (2) of this section lays down that an insurer, to whom notice of the proceeding is given, would be entitled to be made a party thereto and to defend the action on any of the grounds specified in various clauses of the sub-section. Section 110C (2A) provides that in a case where is satisfied that there is collusion between the insured and the claimant it may, for reasons to be recorded in writing, direct that the insurer, who may ultimately be found liable in respect of the claim, if not already a party, be impleaded as a party to the proceedings and the insurer so impleaded shall have the right to resist the claim on all or any of the grounds which are available to an insured. Section 110D provides that an appeal may be filed in against an award of the if the amount in dispute in the appeal is not less than two thousand rupees. Such an appeal may be filed within 90 days from the date of the award, although can, if satisfied that the appellant was prevented by sufficient cause to file the appeal in time, condone the delay. ", "6. From a plain reading of Section 96 it at once emerges that an insurer apart from the rights under the statute has no right, to be impleaded as a party to a petition for compensation and once impleaded as a party, it can exercise only those rights which are provided to it by the statute and it is Section 96(2) which details the grounds which are available to an insurer. A reference to Sub-section (6) of Section 96 which provides that no insurer shall be entitled to avoid his liability except in the manner provided for in Sub-section (2) also support this view. Dealing with this aspect of the law, their Lordships of in 29 Comp Cas (Ins) 60, 64; AIR 1959 SC 1331, 1333 opined as follows: ", "\" To start with it is necessary to remember that apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of Section 96 , however, gives him the right to be made a party to the suit and to defend it. The right, therefore, is created by statute and its content necessarily depends on the provisions of the statute. The question then really is, what are the defences that Sub-section (2) makes available to an insurer ? That clearly is a question of interpretation of the sub-section. ", "Now the language of Sub-section (2) seems to us to be perfectly plain and to admit of no doubt or confusion. It is that an insurer to whom the requisite notice of the action has been given ' shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely,' after which comes an enumeration of the grounds. It would follow that an insurer is entitled to defend on any of the grounds enumerated and no others. If it were not so, then of course no grounds need have been enumerated. When the grounds of defence have been specified, they cannot be added to. To do that would be adding words to the statute. ", "Sub-section (6) also indicates clearly how Sub-section (2) should be read. It says that no insurer to whom the notice of the action has been given shall be entitled to avoid his liability under Sub-section (1) 'otherwise than in the manner provided for in Sub-section (2)'. Now the only manner of avoiding liability provided for in Sub-section (2) is by successfully raising any of the defences therein mentioned. It comes then to this that the insurer cannot avoid his liability except by establishing such defences. Therefore, Sub-section (6) clearly contemplates that he cannot take any defence not mentioned in Sub-section (2). If he could, then he would have been in a position to avoid his liability in a manner other than that provided for in subjection (2). That is prohibited by Sub-section (6). ", "We, therefore, think that Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is not specified in it.\" ", "7. Though, in the judgment, the question involved directly was not as to what defences are available to an insurer, in an appeal against an award, because that case arose at a stage before any award was made, yet the guidelines given in the judgment and the interpretation placed on Section 96 is helpful. The following observations of the , throw a flood of light on the question which is before this Bench (p. 1335 of AIR 1959 and p. 66 of 29 Comp Cas (Ins.)): ", "\" The statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and, therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do.\" ", "8. Apart from the judgment of , this precise question has been the subject-matter of debate before various in the country. Reference to some of those judgments, before considering the validity of the submission of the learned counsel for the insurance company before us, would be helpful. ", "9. In v. [1966] ACJ 101, held that an insurer cannot question the quantum of compensation awarded by a in an appeal, except on the defence available to it under Section 96(2) of the Act. The court repelled the argument raised on behalf of the insurance company that since it was a party to the action before the , it was entitled to challenge the award on all grounds available at law, including the grounds on which the insured himself could have relied. ", "10. In v. [1969] ACJ 60, had also an occasion to consider this question in some depth. After noticing a number of authorities the court opined ; ", "\" An insurance company is not entitled to raise any defence other than the defences enlisted in Section 96(2) of the Motor Vehicles Act, 1939. It cannot, therefore, be permitted to dispute the quantum of compensation awarded by . It makes no difference whether the proceedings for the recovery of compensation were by way of a suit in a civil court, before the Amendment Act of 1956, or by way of an application in , after the said amendment. It also makes no difference whether the insurer entered appearance and filed his written statement after a notice was issued to him under the provisions of Section 96(1) of the said Act or whether he has impleaded as a party at the very inception.\" ", "11. A Division Bench of in ACJ 164; AIR 1970 MP 190 held that in an appeal under Section 110 filed by an insurance company, where the insured had not filed any appeal or applied for being transposed as an appellant, the appellant could be permitted to raise only those defences which are prescribed by Section 96(2) of the Act and no other defence. ACJ 86; AIR 1971 MP 5 ; 42 Comp Cas 102 a Full Bench of laid down that Section 96(2) limits the defences available to the insurer, where the insured is held liable to pay compensation. However, the insurer can in the name of the insured raise every such defence as an insured can raise, including the absence of negligence, provided it has reserved that right by policy of insurance. ", "12. This question also came up for consideration before Mr. Justice (as his Lordship then was) in ACJ 219 (Ker) and his Lordship held that an insurer was entitled to take up only those defences as are specified in Section 96(2) of the Act and that it could not question the award of the on any other grounds. ", "13. In v. [1972] ACJ 261, it was opined that apart from the defences which came within the scope of Section 96(2) of the Act, an insurer could not jtake up any other defence, either in the original claim petition or in an appeal arising from an award given by the . ", "14. ACJ 420 (Mys); AIR 1973 Mys. 107, itwasopined (at p. 107 of AIR 1973 Mys): ", "\"...it is clear that insurer can urge all the defences open to the insured, only when the insurer defends the action in the name of the insured. But, in the present case, it has not been shown that before the , the appellant defended the action in the name of the insured. On the other hand, the insured (the owner of the lorry) and the driver of the lorry who were respondents 1 and 2 before the , had filed their objections and the appellant had filed a separate statement of objections. Unless the appellant had defended before the , the action in the name of the insured, the only defences which it (the appellant) could urge before the and which it can urge in this appeal are those specified in Clauses (a) to (c) of Sub-section (2) of Section 96 of the Act.\" ", "15. Similar view was also expressed by a Single Judge of in v. Dunna Mukanda Rao [1973] ACJ 229 and by in ACJ 18. in ACJ 159 after holding that an insurance company is not allowed any plea outside the scope of the pleas specified in Section 96(2) , added that in case the insurance company has reserved a right in the policy itself to defend an action in the name of the insured, it could raise all such pleas as may be open to an insured both at the trial of the petition as well as in an appeal against the award. ", "16. The matter came up for consideration before a Full Bench of in , AIR 1976 175 ; ACJ 239. In that case, though the insured as well as the insurer had contested the claim before , after the award, an appeal was filed only by the insurance company and not by the insured. In that appeal both the quantum of compensation as also the liability of the insured on grounds of negligence were challenged by the insurance company. The Full Bench, after a review of a catena of authorities, came to the conclusion that the insurance company could defend an action only on the grounds specified in Section 96(2) of the Act and not on other grounds unless it had obtained leave of under Section 110C(2A) of the Act. The mere non-filing of the appeal by the insured, however, was not considered enough for allowing the insurance company to challenge the award on the grounds other than those specified in Section 96(2) of the Act. The following observations of are significant (at p. 191 of AIR 1976 ): ", "\" As the facts of this case show, the insured had entered contest and there is no reason to hold in the absence of any allegation, and something more, that the insured has been colluding with the claimant. Leave of the had admittedly not been taken under Section 110C(2A) of the Act. There exists a clause in the policy bond authorising the insurer to defend in the name of the insured. As we have already noted, the insured and the insurer simultaneously wanted to defend, the insured defending in his own name and the insurer in its own name. The term in the policy bond did not authorise such defence by the insurer. In the instant case, therefore, to the insurer the restriction under Section 96(2) of the Act applies and he could not travel beyond the restriction imposed by the statute either before the or in appeal before this court. None of the grounds in the memorandum of appeal appertains to a defence raised within Section 96(2) of the Act and what is being mainly challenged is the quantum and liability on a ground not covered by Section 96(2) of the Act. On these grounds the insurer was not entitled to contest the claim for the award. The appeal filed on its behalf, therefore, is not maintainable.\" ", "17. Similar view was reiterated in (now ) v. [1977] ACJ 283. ", "18. A Division Bench of in ACJ 137 opined as follows: ", "\"That apart Section 110C (Sub-section (2A)) provides that where in the course of any inquiry, is satisfied that (1) there is collusion between the person making the claim and the person against whom the claim is made has failed to contest the claim, it may for reasons to be recorded by it in writing, direct that the insurer who may be liable in respect of such claims shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. None of the conditions as provided in this section exists in the present case. This sub-section empowers an insurer to contest the claim for compensation only if these conditions are satisfied. Unless these conditions are satisfied, the insurer cannot contest the claim on any ground other than those specified in clauses (a) to (c) of Sub-section (2) of Section 96 of the Act.\" ", "19. A Division Bench of also had an occasion to consider the point at issue in , AIR 1977 All 330; ACJ 252. Their Lordships stated the law thus (at p. 334 of AIR 1977): ", "\" Almost every other has taken the view that the defences open to an insurance company in a claim under Section 110 of the Motor Vehicles Act are restricted to those specified in Section 96 of the Act, See v. ACJ 156 (Cal), v. State Insurance Officer ACJ 219 (Ker), v. ACJ 49 (Orissa), v. Prabhakar ACJ 1; AIR 1971 MP 145, ACJ II (Delhi), v. ACJ 245 (All), v. Gurbaksh Singh ACJ 460; AIR 1973 Raj 317, v. ACJ 222 ( ACJ 420; AIR 1973 Mys 107. ", "We accordingly find that it is not permissible for the appellant in F.A.F.O. No. 422 of 1975 to assail the findings of on merits. It may, however, be added that, as we shall show while considering the appeal by the truck owner even on merits there is no substance in this appeal.\" ", "20. ACJ 526, a Division Bench of following the law laid down in ACJ 101, held that an insurance company cannot avoid liability except on the grounds contained in Section 96(2) of the Act. ", "21. and Haryana also reiterated the same view following its earlier judgments and the judgment in Captain 's case [1959] 29 Comp Cas (Ins.) 60, in ACJ 203. ", "22. ACJ 169 (P & H), it was held that an insurance company cannot raise any argument regarding quantum of compensation either before the tribunal or in an appeal. ", "23. A Division Bench of in v. [1980] ACJ 470, again reiterated that an insurer cannot question the quantum of compensation under the defences enumerated in Section 96(2) of the Act. ", "24. of also took the same view in Kantilal and Bros. v. , AIR 1979 Cal 152; [1980] ACJ 501. Their Lordships stated the thus (at p. 154 of AIR 1979 (Cal)): ", "\" Now, in view of the provision of subjection (2) of Section 96 of the the Motor Vehicles Act, 1939, the appeal challenging the claim of the petitioners is limited within the grounds mentioned therein. Clearly the insurer, here the insurance company, as appellant had no available ground to challenge the award in the appeal. The insurer-appellants cannot challenge the quantum of compensation fixed by the and have, therefore, no ground to urge in this appeal challenging the award. In this view of the matter, the insurance company had no legal ground to prefer this appeal to challenge the award.\" ", "25. Thus, from a review of the aforesaid judgments it becomes clear that an insurer cannot resist the claim before the or challenge the award of the in appeals on grounds other than those enumerated in Section 96(2) of the Act, except where the insurer has reserved a right in the policy of insurance to defend the claim in the name of the assured himself or where the or the court is satisfied that the assured and the claimant have colluded with each other and in exercise of the powers under Section 110C(2A) have granted permission to the insurer to defend the claim on all the grounds on which an assured could defend the claim. An insurer can, however, limit his liability under the terms of insurance, otherwise the liability extends to the statutory limits set out in the Act itself. ", "26. I shall now consider the arguments raised by Mr. . ", "27. Mr. has argued that Section 110D of the Act does not impose any limitation on the grounds on which a party can file an appeal against an award of the . It is urged that Section 96(2) is not exhaustive and that it does not cover cases in which compensation has been granted arbitrarily and that in any event the limitations contained in it cannot be read into Section 110D to restrict the grounds on which an appeal can be filed. It is urged that the insurer on whom the ultimate liability to satisfy the award falls, must have the right to question the quantum of compensation awarded by the . ", "28. To appreciate the arguments raised at the , it would be relevant to remember that the Motor Vehicles Act is a complete code in itself. Chapter 8 of the Act deals with matters relating to claims for compensation arising out of a vehicular accident. Sections 94 to 96 of the Act provide for compulsory insurance of a motor vehicle before it can be used on any public road and lay down the liability of the insurer to pay to the claimant directly, whenever there is a decree or the judgment of a tribunal or a court, as the case may be. It also fixes the limits of the pecuniary liability on the insurer in certain cases. Section 96 provides that the liability of an insurer shall arise only if the insured is found liable because the policy of insurance is a policy of indemnity. Section 97 deals with the right of a third party against the insurer on the insolvency of the insured while Section 98 casts a duty on a person against whom a claim is made to give information as to his insurer. Section 103 sets out the effect of a certificate of insurance policy. Where the specified sum is less than the sum payable under Section 95(2) of the Act, the maximum liability of the insurer will be as laid down in Section 95(2) . However, if the sum specified in the insurance policy exceeds the sum fixed under Section 95(2) the maximum liability shall be to the extent of the sum specified in the insurance policy. Sections 110A to 110F were introduced in the Act by Act No. 100 of 1956 to substitute the ordinary remedy of a civil suit by a special remedy, which is summary in nature. Section 110 provides for the constitution of and confers jurisdiction on it to adjudicate upon claims for compensation in respect of accidents involving death or bodily injuries to persons resulting from a motor vehicle accident. Section 110A deals with the procedure for setting up a claim for compensation. Section 110B relates to an award made by the , after an enquiry into the claim. Section 110C deals with the procedure and powers of the , while Section 110D provides for an appeal from an award made by the Claims . Section 110E provides for the recovery, from the insurer, of compensation money awarded by the , as arrears of land revenue and Section 110F excludes the jurisdiction of civil courts to entertain any question relating to claims for compensation, arising out of a motor vehicle accident, in such areas where there exists a duly constituted Claims . This, broadly speaking, is the scheme of Chapter 8 of the Act and it is this scheme which one has to keep in mind while appreciating the contentions raised at the . ", "29. An award made under Section 110B has three components: firstly, it specifies the amount of compensation, if any, payable to the claimants, which appears to the to be \" just and reasonable \" ; secondly, it specifies the person or persons to whom the compensation is to be paid ; and, thirdly, it specifies the amount out of the awarded compensation which is required to be paid by the insurer. In specifying this sum, the has to take into account both the contractual as well as the statutory limits fixed under Section 95 of the Act. ", "30. The argument of Mr. that the limitations which are set out in Section 96(2) of the Act in the matter of defending a claim petition before the do not extend to appeals filed under Section 110D of the Act by an insurer or that Section 96(2) is not exhaustive is not sound. The limitations which are set out in Section 96(2) of the Act are implicit and inherent in Section 110D of the Act and have to be read into that section. Before a person can file an appeal under Section 110D of the Act, he has to be an \" aggrieved party \". The expression \"aggrieved party \" contains the inherent limitations in the matter of filing an appeal. The expression \" aggrieved \" in the context of Section 110D of the Act has to be interpreted and understood in common parlance. (See in this connection , AIR 1976 SC 578). It is not possible to give an exhaustive definition of the expression \" aggrieved party \" and the expression has to be interpreted in the context in which it appears in a particular statute. As a general principle, it has been held by the courts that a person who feels disappointed with the result of a case is not necessarily a \" person aggrieved \", to be so classified, he must be disappointed of a benefit which he would have received if the order had gone the other way. The order must cause him the legal grievance by wrongfully depriving him of something. If he was not entitled to that relief in the first place, he cannot be aggrieved if the relief was denied to him but if he was entitled to it and the same has been denied to him, he would be a \" person aggrieved \". Thus, a party would be regarded as an \" aggrieved party\" for the purposes of Section 110D where the claim or defence available to that party did not find favour with the in making an award. The party would be \" aggrieved \" only to that extent and no further. It is unimaginable that an insurer, which before the had only limited defences can file an appeal on other grounds also. An appeal is a rehearing of the claim petition and is, therefore, a continuation of it. It is elementary that in an appeal, a party cannot be allowed to raise a defence which was not available to it in the forum below. It, therefore, follows that an \"aggrieved party \" for the purpose of Section 110D would only be such a party which is aggrieved of the award on the ground that its defence or claim as was available to it and was set up before the , did not find favour with it. If a particular defence was not available to a party before the , the question of it not having found favour with the does not arise because no party can be aggrieved of any adverse decision on a ground which was not available to it. Thus, it is manifest that whereas an insured would have the right to challenge an award on all the grounds which were available to it before the , an insurance company would be entitled to challenge the award only on the grounds which were available to it under Section 96(2) of the Act. ", "31. Before the Tribunal an insurer can resist the claim against him in two ways: (1) by urging that the insurer is not liable even though the insured may be liable, and (2) by pleading that the insurer is not liable because the insured is not liable. ", "32. Under the first head, an insurer is entitled to escape his liability by showing that the policy of insurance is void as it had been obtained on false representation or concealment of material facts or that the policy had been cancelled before the accident or that there had been a breach of any condition of the policy and the like grounds. The insurer is not entitled to raise any other ground of defence to avoid his liability, where the insured is found to have incurred the liability because of the simple reason that a policy of insurance being in the nature of a contract of indemnity, the insurer takes upon himself to discharge the liability of the insured arising out of a motor vehicle accident, subject, of course, to the terms and conditions of the policy and the maximum statutory liabi lity. He cannot, under the first head, avoid his liability except on the grounds mentioned above. When a party takes out a policy of insurance, it does so after paying the premium for the sum assured and unless the contract between him and the insurer can be avoided, the insurance com pany which has been benefited by the premium cannot back out of its commitment to indemnify the insured. This is manifest from the plain phraseology of Section 95(5) of the Act, which reads thus: ", "\" Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. \" ", "33. However, no sum shall be payable by an insurer under Section 96(1) in respect of any award unless before or after the commencement of the proceeding in which the award is given, the insurer had notice through the of the bringing of those proceedings. It is only an insurer to whom notice of the bringing of any such proceedings is given who shall be entitled to be made a party to the proceedings and to defend the action on the grounds contained in Section 96(2) of the Act, unless the insurer had reserved in the policy of insurance a right to defend the action in the name of the insured, in which event he can defend on all the grounds on which the insured could defend. ", "34. Under the second head, an insurer can plead that there was no negligence on the part of the insured and raise all such pleas in defence to the claim as are available to an insured to show that the insured had not incurred any liability. This, however, can be done by the insurer only if the insurer had reserved in the policy of insurance a right to defend the claim in the name of the insured. If there is no such reservation made in the policy of insurance, then Section 96(2) strictly debars an insurer from taking any defence, other than those enumerated therein, to show that the insurer was not liable although the insured has incurred liability. ", "35. Where an insurer finds that it has not reserved such a right but that the insured and the claimant have colluded with each other, as it is a possibility that cannot be ignored, it is open to an insurer to bring that fact to the notice of the and seek its permission under Section 110C(2A) to contest the claim on all the grounds available to an insured. On being satisfied that there is such a collusion, the would grant permission and on such permission being granted, the insurer steps into the shoes of the insured and defends the claim on all available grounds If the award goes against the insurer, it can challenge it in appeal also on all such grounds on which it had contended the claim before the . Right of appeal against an award of the is the creation of the statute. The Act had confined the right to avoid the liability of the insurer to the injured on certain grounds specified in it. It is not open to this court to add to those grounds on the plea that hardship would be caused to the insurer. An insurer can avoid any hardship by remaining vigilant during the trial of the claim petition and also by providing, in the policy of insurance, for a right to defend the action in the name of the assured and that he had full liberty to do. Where the insurer has failed to do it, he cannot avoid the liability if the insured is found liable. ", "36. The aforesaid discussion leads to the conclusion (1) that an insurer is not entitled to resist the claim or the award, where the insured has been found liable, on grounds not enumerated under Section 96(2) of the Act; (2) where the term of the policy of insurance provides that the insurer has the right to defend the action in the name of the insured, the insurer shall have the right to defend and, if he does so, all the defences as are open to the insured can be urged by the insurer both to resist the claim as well as the award; (3) if it appears that the claimant and the insured have colluded, then after receiving permission of the under Section 110C(2A) the insurer can defend the claim as well as the award on all grounds which are available to the insured; and (4) except for the aforesaid contingencies, an insurer cannot question an award in appeal and unless the case of the insurer is covered by (2) or (3) conclusions, as noticed above, an insurer cannot, in an appeal against the award, question the quantum of compensation only. ", "37. It is in the light of the aforesaid conclusions that I shall now deal with the three appeals : ", "Civil Misc. First Appeal No. 80 of 1977 In this case, respondents Nos. 1 to 3 filed a petition for grant of compensation amounting to Rs. 50,000 before in 1973, against the appellant and respondents Nos. 4, 5 and 7 (the insured and his driver) on the ground that had died as a result of accident caused by the rash and negligent driving of Taxi No. JKT 699 at Badshah Chowk, Srinagar, on 23rd April, 1973. During the proceedings the owners of the vehicle were set ex parte and the claim for compensation was resisted only by the appellant and the driver of the vehicle. From the pleadings of the parties the following issues were framed ; ", "1. Whether the deceased, , had died due to the injuries sustained in the accident that took place on 23rd April, 1973, at Badshah Chowk caused by who was driving the vehicle No. JKT 699 while the deceased was crossing the road ? OPP. ", "2. Whether the said accident was caused by the rash or negligent driving of , driver, while driving his motor taxi No. JKT 699 ? OPP. ", "3. In case issue Nos. 1, 2 are proved, to what amount of compensation the petitioners are entitled and in what proportion and from whom ? OPP. ", "4. Whether the vehicle involved in the accident was insured with NA No. 3 ? ", "5. Whether the claim petition does not comply with the requirement of Section 110A of the M.V. Act and, as such, is liable to be dismissed ? OP No. 3. ", "6. Whether the petition is not signed by the petitioners or any person representing them and, as such, is liable to rejection. If so, how......? OP NA 3. 7. Whether the deceased himself was negligent and rash in crossing the road and the driver of the said taxi could not avoid the said accident ? OP NA's. 8. Whether the claim petition is not within time and is liable to be dismissed. If so, how...... ? OP NA 5. 9. Whether the vehicle involved in the accident had been sold by NA 2 to NA 1 on 19th April, 1973. If so, what is its effect on the case. OP NA 2. 38. The insurer had neither sought the permission of the under Section 110C(2A) nor had it reserved any right in the policy to defend the claim in the name of the insured. As a matter of fact, perusal of the record reveals that the insurer did not, at the trial of the petition, resist the action on grounds other than those enumerated under Section 96(2) of the Act. ", "39. The learned found that the accident had taken place due to the negligence of , driver of taxi No. JKT 699, and that the deceased could not be held liable for any contributory negligence. The also found that at the time of his death, the deceased had an income of Rs. 205 p.m. and that his age at the time of the accident was 58 years. An amount of Rs. 30,000 was awarded as compensation and the liability to pay that amount was fixed on the appellant. Neither the driver nor the owner filed an appeal and the award has been questioned by the insurance company only. A preliminary objection has been raised by the learned counsel for the respondent to the maintainability of the appeal. It is urged that it is not open to the insurer to question the finding of negligence or to challenge the award on quantum of compensation. It is then argued that the respondent has filed cross-objections and claimed enhancement of compensation and that these cross-objections merit acceptance. ", "40. Since, as already noticed, the insurance company had not reserved in the insurance policy any right to defend in the name of the insured and further since the insurance company did not seek any leave of the , expressly or impliedly, under Section 110C(2A) to defend in the name of the insured, who had been set ex parte, it is not now open to the appellant to challenge the quantum of compensation or the finding of the about negligence of the driver of taxi No. JKT 699. Thus, the preliminary objection has merit and must succeed. The compensation awarded is not outside the limits of the liability of the insurer, under the policy or the statute, and as such the insurer cannot avoid the liability to pay the awarded amount. ", "41. This appeal, therefore, is not competent and consequently the cross-objections also must be dismissed. Even otherwise, the cross-objections have no merit and there is no scope for enhancement of the compensation. The while awarding compensation took into account that at the time of death, the deceased aged 58 years, was having an income of Rs. 205 p. m. and taking the life span as 70 years, the awarded compensation by using the multiple of 12 years for the yearly income of the deceased, i.e., (205 X 12 X 12) and awarded Rs. 30,000 to the claimants. This was not a correct approach. The while calculating the amount did not take into consideration the loss suffered by the family of the deceased and did not determine as to what sum out of Rs. 205 p. m. was the deceased spending on his family, to assess the loss suffered by the family. It also made no allowance for accelerated payment. Thus, the compensation awarded definitely erred on the higher side and no further enhancement can be made in the cross-objections. ", "42. Both the appeal and cross-objections, therefore, fail and are dismissed as such but without any order as to costs. ", "Civil Misc. First Appeal No. 21 of 1979 In this case respondent No. 1 filed a petition for grant of compensation amounting to Rs. 50,000, through his father, against the appellant and respondents Nos. 2 and 3 (owner and driver of vehicle No. JKB 5190) on the ground that on July 4, 1975, , respondent No. 1, was hit by Truck JKB 5190 insured with the appellant, as a result of which accident, had suffered fracture of his leg and the injured leg had later to be amputated at where the injured had been removed after initial treatment at , Srinagar. The awarded compensation amounting to Rs. 50,000 to respondent No. 1 and placed the liability of payment of the entire amount on the insurer, Aggrieved, the insurance company alone has filed this appeal. Mr. , appearing for the appellant, has urged that the claim petition was barred by time and, therefore, no compensation could have been awarded by the to the claimant. Alternatively, it is urged that the quantum of compensation awarded is very excessive and has been fixed arbitrarily. An objection has been raised by the learned counsel for the respondent to the very maintainability of the appeal by the insurer. ", "43. A, perusal of the file reveals that in the claim petition which was filed on August 2, 1976, it was stated in para. 14 that respondent No, 1 had remained in for about three months and, thereafter at , New Delhi, for about eight months and that for these reasons the petition could not be filed in time and that the petition was filed soon after the return of respondent No. 1 and his father from New Delhi. To this petition, no objections were filed by any of the parties and no plea of limitation was ever raised before the by any of its respondents. It is also transpires from the record that notice of the claim petition was issued to the respondents, including the appellant, but they avoided service and consequently on an application filed by the claimant, service on the respondents was effected by publication in a newspaper. Despite the publication of that notice, nobody appeared and the case was set ex parte against all the respondents, including the insurer. Mr. then filed an application before the for setting aside the ex parte proceedings against the insurance company and notice of the said application was given to respondent No. 1 on January 29, 1977. By order of the dated February 8, 1977, the ex parte proceedings taken against the appellant were set aside, subject to payment of costs and the appellant herein was given an opportunity to file objections to the claim petition by February 18, 1977. On February 18, 1977, neither costs were paid nor objections were filed and an adjournment was sought for by learned counsel for the appellant. The case was, on his request, adjourned to March 10, 1977. On that date, again no objections were filed and another adjournment was sought for and granted to the appellant subject to payment of further costs and the case was adjourned to April 4, 1977. On the said date, i.e., on April 4, 1977, again neither the objections were filed nor costs were paid by the appellant and the , once again, granted an adjournment to the appellant on payment of costs to file objections to the claim petition, by April 19, 1977. However, neither costs were paid nor any objections were filed to the claim petition by the appellant and on April 19, 1977, the appellant-insurance company again absented itself and the case was set ex parte against it, and the claimant was directed to produce ex parte evidence on May 6, 1977. On that date, it transpires, Mr. again appeared for the appellant and sought permission of the to take part in the proceedings \" from that stage onward\" without filing objections to the claim petition. Permission was granted and the insurance company participated in the proceedings. While the evidence was being recorded, on June 17, 1977, again nobody appeared for the insurance company, and onnce again the case was set ex parte against it. Thereafter, after seeking leave of the , on one or two occasions, Mr. put in his appearance and participated in, the proceedings but mostly the insurance company remained absen,t. Respondent No. 1, the claimant, filed an application on April 10, 1978, seeking permission to examine two more: witnesses. At that stage, Mr. appeared and sought time to file objections to that application. The case was adjourned to May 10, 1977, when on that date again some more time was sought for by Mr. to file objections. The case was adjourned to May 19, 1978. However, despite obtaining two opportunities, no objections were filed and, consequently, the application was allowed and witnesses named in the application were directed to be examined on June 22, 1978. On that date, i.e., on June 22, 1978, Mr. appeared before the and stated that he was taking up the matter with the insurance company to get it settled by mutual negotiations and prayed for an adjournment. The case was adjourned to July 8, 1978, and again to July 19, 1978, and to August 19, 1978, every time at the request of Mr. . On August 19, 1978, it was reported by Mr. that no compromise could be arrived at and the case was put up for further proceedings for September 16, 1978. The insurance company again did not appear on that date and the case was, for the fifth time, set ex parte against it. ", "44. The aforesaid narration of events shows the erratic manner in which the appellant had conducted the case before the . In the face of these facts, it does not now lie in the mouth of Mr. to say that the claim petition was barred by time and that no award could have been made in respect thereof. It was open to him to take that objection and controvert what had been stated by the claimant in para. 14 of the claim petition before the but he chose not to do so, despite numerous opportunities granted to him. Even though all the respondents had been set ex parte, the insurance company, on its own request, had been given permission to take part in the proceedings but it chose not to avail of that permission and neither the explanation for the delay in filing the claim petition nor the fact that the accident had been caused due to the negligence of the truck driver was controverted before the , by the insurer and despite numerous opportunities granted, it did not file any objections to the claim petition. The , after a proper appreciation of the evidence, returned the findings and made the award. Keeping in view the manner in which the insurance company had conducted its defence before the and also the fact that at no stage during the trial of the claim petition did it either raise the plea of limitation or question the allegation of negligence, the objection raised by learned counsel for respondent No. 1 to the maintainability of the appeal is well merited. More so, when Mr. has been unable to show how the insurer can avoid, the liability, when the insured has been found liable. It is also not shown by Mr. that the liability of the insurer could not extend to Rs. 50,000 under the policy of insurance. In the facts and circumstances of the case, I hold that this appeal has no merits and I dismiss the same, with costs. ", "Civil Misc. First Appeal No. 24 of 1979 The salient facts giving rise to this appeal are : that on December 3, 1975, at , father of respondent No. 1, met with an accident caused by truck No. JKN 2811, owned by respondent No. 2 and which was being driven at the time of the accident by respondent No. 3. As a result of the accident, father of respondent No. 1, received injuries and died. The daughter of the deceased, respondent No. 1, through her next friend, submitted a claim petition before claiming Rs. 50,000 as compensation for the death of her father, who it was alleged was aged 31 at the time of the accident and was the sole bread-earner of the family. awarded the sum as claimed together with interest at the rate of 6% p.a. from the date of the claim petition till the payment, and made the appellant insufance company liable for payment of the entire awarded compensation, vide award dated March 16, 1979. The insurer has filed this appeal questioning the award on all the grounds. ", "45. From a perusal of the record, it transpires that despite due service, respondents Nos. 2 and 3, the owner and the driver of the truck respectively, did not appear before the and the case was set ex parte against them. The insurance company, however, appeared and participated in the proceedings. Objections were filed to the claim petition by the appellant and it was pleaded therein that the accident had not been caused due to the alleged rash or negligent driving of the vehicle by the driver of the truck. It was also pleaded that the vehicle was being plied in contravention of the conditions of the insurance policy and further that the owner-insured had procured the policy of insurance by not disclosing material facts and on representing false facts in material particulars. It was on this basis, asserted that even if the insured and the driver are held to be liable to pay compensation, the insurance company was not liable to pay any compensation to the claimant, yet another objection raised was that all the legal representatives of the deceased had not preferred the claim and, therefore, the case could not be adjudicated upon. The question of compensation claimed was also disputed by the insurance company. Since neither the owner of the vehicle nor the driver had contested the claim petition, the permitted the insurance company to defend the claim petition on all grounds, of course without expressly making an order under Section 110C(2A) of the Act. The insurer, therefore, with the permission of the , and without any objection having been raised by the claimant, contested the claim petition on all grounds on which an insured could defend the action. In this appeal also, Mr. , learned counsel for the claimant, has conceded that since the insurer had been permitted by the to contest the action on all the grounds, the insurer could challenge the award also on all those grounds, but it is maintained that neither the finding regarding negligence nor the amount of compensation awarded by the called for any interference. I shall, therefore, deal with this appeal on merits. ", "46. From the pleadings of the parties the framed the following issues : ", "1. Has not non-applicant No. 3 any liability to pay the compensation as the vehicle was being plied in contravention of the policy conditions of the route permit granted for its use. OP non-applicant No. 3. ", "2. Does the claim need to be dismissed as it has not been preferred by all the legal representatives of the deceased ? OP non-applicant No. 3. ", "3. Was the accident caused due to rash and negligent driving of the driver which resulted in causing the death of the father of the applicant. OP Applicant. ", "4. In case issue No. 3 is proved, to how much compensation the applicant is entitled and from whom and in what proportion OP Applicant. ", "5. Relief. ", "Issue No. 1 ", "The insurer did not lead any evidence in respect of issue No. 1 and consequently the said issue was decided against the insurer. ", "Issue No. 2 ", "It transpires from the record that before evidence was led, the attorney for the claimant filed an affidavit to the effect that there were no other legal representatives of the deceased, except the minor daughter. Learned counsel for the insurance company did not controvert that affidavit and consequently, vide order of the dated February 8, 1977, issue No. 2 was not pressed before the and the same was also decided against the insurance company. ", "Issue No. 3 ", "The claimant examined, , , alias , , , , , . The insurance company in rebuttal examined . ", "47. According to , A.W., the deceased , was collecting leaves outside the garden when Truck No. JKN 2811 came from the side of Sopore at a very fast speed and ran over . The said truck was being driven by respondent No, 3 at that time. That many people collected there and police also arrived at the spot. The body of was taken out from under the truck. That the accident had been caused due to rash and negligent driving of the driver of truck No. JKN 2811. That was earning about 200/300 rupees p.m. during those days. , A.W., corroborated , A.W., in all material particulars both as regards the manner in which the accident took place and the negligence of the driver in causing the accident. During his cross-examination, he stated that the deceased was drawing about Rs. 300 p.m. at the time of the death and was about 30 years old at that time. He went on to add that when the body was pulled out from under the truck, the deceased was breathing heavily and that he died soon thereafter. ", "48. , A.W., , A.W., and , A.Ws., also corroborated the statement of the aforesaid witnesses as regards the rash and negligent manner in which the truck was being driven by its driver and the manner in which the accident, causing the death of , , took place. All these witnesses also deposed that the deceased was about 30 years of age at the time of the accident and that he was earning about Rs. 300 p.m. at the time of his death. All these witnesses categorically asserted that the deceased had died as a result of the accident. ", "49. , A.W., brother of the deceased, deposed that the deceased was earning about Rs. 300 p.m. and that the claimant , is his only daughter. That she has no other relations and that her mother had married another person, leaving her all alone and uncared for. He also gave the age of the deceased at the time of the accident as about 30 years. ", "50. In rebuttal, , SHO, stated that the investigation of the case relating to the accident in question was undertaken by him and that according to it was a simple case of accident and that during the investigation, the complainant was unable to establish that the accident had occurred due to rash and negligent driving of the driver of the truck. He went oh to add that the magistrate had agreed with the police report arid the case closed. The witness, however, did not produce the final report nor disclosed which of the witnesses he had examined in the investigation. This is all the evidence in the case. ", "51. The evidence of the eye witnesses, , and others, as noticed above, conclusively establishes that the accident took place due to rash and negligent driving of the truck by its driver. Those eye witnesses were not at all challenged on this aspect of the case during cross-examination and their testimony inspires confidence. From \"their evidence, it emerges that had been run over by the truck and that he died due to the injuries received by him in the accident. No rebuttal whatsoever of the evidence led by the claimant was given by the insurance company. The fact that the accident took place on the main road, opposite a garden, and the 'truck ran over the deceased, whose body had to be pulled out from under the truck, also lends credence to the evidence led by the claimant about the manner in which the accident took place. It stands clearly established that the accident was caused by the rash and negligent driving of the truck by respondent No. 3. The statement of , SHO, is hardly of any consequence. He did not produce either the final report nor did he disclose as to what investigation he had carried out or the names of the witnesses1 he had examined. His evidence, thus, does not create any dent in the evidence led by the claimant. As a matter of fact, instead of disproving the case of the claimant, his evidence lends credence to her case inasmuch as he did not dispute that the accident in question had taken place on the date and the time alleged and that the deceased had died as a result of the accident. His bald assertion that the complainant had failed to establish the charge against the driver or it was a simple case of accident is wholly insufficient to discard the trustworthy testimony of the witnesses produced by the claimant. The was, in the face of the evidence led before it, perfectly right in deciding issue No. 3 in favour of the claimant and holding that the accident had been caused due to rash and negligent driving of the driver and also that the death of the father of the claimant was caused as a result of that accident. Learned counsel for the appellant has been unable to show any error in the finding arrived at by the and from what I have said above, I find no reason to take a different view either. The finding of the on issue No. 3 is, therefore, confirmed. ", "Issue No: 4 Findings on this issue has been seriously assailed by learned counsel for the appellant and it is argued that the method adopted by the for assessing compensation was faulty and not proper. ", "52. In support of this issue, the evidence led by the claimant, as noticed above, shows that the father of the claimant was earning about Rs. 300 p.m. at the time of his death. He was about 31 years of age at that time. The evidence also reveals that the deceased was a healthy man and was not suffering from any ailment and but for the accident had reasonable chances to live a long life. The awarded Rs. 50,000 as compensation to the claimant. In the opinion of the , for at least 15 years more the deceased would have lived and earned at the rate of Rs. 300 p.m. and, thus, the claimant had been put to a loss of Rs. (300 X 12 X 15) = Rs. 54,000 by the death of her father. Since the claimant had herself claimed only Rs. 50,000, therefore, the same was awarded to her even though her loss was assessed at Rs. 54,000. ", "53. Mr. , learned counsel for the appellant, has urged that the applied wrong principles in determining the compensation, inasmuch as it failed to work out the monthly dependency of the family to assess the loss of the claimant. It is pointed out that Rs. 300 p.m. was not the loss of the claimant because the deceased must have been spending some amount on his own upkeep also. It is also urged that the should have taken into account the effect of accelerated payment and made some deduction on that account. To me there appears to be considerable force in the submissions of Mr. and for what shall follow, I am of the opinion, the had misdirected itself while assessing the just and fair compensation. ", "54. Indeed, for assessing compensation, no rigid formula can be laid down and each and every case depends upon a number of factors peculiar to the life and circumstances of the family concerned. However, courts have from time to time held that the compensation should be, ' just and fair ' and that it should not be a windfall. Some guidelines were prescribed by this court. ACJ 403, where of this court, comprising (as his Lordship the Acting Chief Justice then was) and myself, while dealing with the principles which should govern the working out of the amount of compensation, gave the following illustrative guidelines : ", "\" A principle which has generally been accepted by most of the courts in India, including , for working out the amount of compensation one is to ascertain the annual income of the deceased, after making allowance for the estimated amount which the deceased was spending on himself during his lifetime and then capitalising the same by multiplying that amount by the number of years of purchase of dependency. Out of that amount an allowance is made for any amount which the family of the deceased receives on account of the death of the deceased. The basic factor for working out compensation, which generally guides the courts, is that the compensation must be ' just and fair'. The family of the deceased of course do not have to get a windfall or derive any undue benefit from the unfortunate death of the deceased, yet they are entitled to at least receive so much of the amount which is essential for their upkeep and to meet other necessary expenses which, had the deceased been alive, would have been provided by him. These considerations assume very great importance in cases where the deceased happens to be the sole bread-earner of the family. \" ", "55. In case 1979 ACJ 403, the deceased was about 35 years of age. He was earning about Rs. 476 at the time of his death. The Bench found that the deceased must have been spending about Rs. 360 p.m. out of his salary of Rs. 476 p.m. on his dependants. The court accepted the evidence that the deceased would have continued to earn Rs. 476p.m. \"till his retirement at the age of 55, i.e., for the next 20 years. The basic figure was then worked out by this court by adopting a multiple of 20 (the gap between the age at the time of death and the age of superannuation). The court came to the conclusion that the loss to the dependants Was (360 X 12 X 20) = Rs. 86,400. Out of this amount, the extent of the pecuniary benefits received by the family of the deceased (according to the evidence) amounting to Rs. 26,614 were deducted. From the remainder, a further deduction of 1/6th of the amount was made on account of accelerated lump sum payment. Thus, the total compensation was worked out as Rs. 49,905 rounded up to Rs. 50,000. ", "56. In the instant case, the deceased was 31 years of age on the date of his death. Though, keeping the normal life expectancy in the villages as 60 years, the deceased might have lived for about 29 years more, he would have supported the claimant, his 6 year old daughter, for another 15 years only, till she got married. He would have then spent some amount on her marriage also. Since the claimant and her father were the only two persons in that family and the deceased was the sole bread-earner it would not be unrealistic to assume that the deceased must have been spending about Rs. 100 p.m. on his own maintenance and the balance of Rs. 200 from his earnings he must be spending on his daughter as well as saving some amount for her marriage. Therefore, for capitalising the loss suffered by the claimant in this case, the multiple of 15 for arriving at the basic figure should have been adopted. The amount of compensation would then wort out to (200 X 12 X 15) = Rs. 36,000. Out of this amount, deduction for accelerated lump sum payment at 1/6th was required to be made. So deducting Rs. 6,000 from Rs. 36,000 the compensation payable would come to Rs. 30,000 and that in my opinion would be the \" fair and just\" compensation to be paid to the claimant. I am conscious that in arriving at this figure, some amount of conjecture has crept in; but in a case like the present, as observed by the Supreme : Court in ACT 110 ; AIR 1=970 SC 376 (at p/380): ", "\" In assessing damages, the court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some ex tent is inevitable.\" ", "--it is unavoidable. ", "57. I, accordingly, accept this appeal partially and reduce the amount of compensation from Rs. 50,000, awarded by the , to Rs. 30,000. The claimant snail also be entitled to receive interest'at the rate of 6% on this amount from the date of tne application till the realisation of the awarded amount. ", "58. The claimant is still a minor and her mother has remarried. She is being looked after by her uncle, . I, therefore, consider it proper to direct that the sum of Rs. 30,000 shall be deposited by her uncle, , in the name of (minor) infixed deposit with any Scheduled bank f6f a period of five years initially and, thereafter, it shall be renewed from time to time till gets married. The amount of interest shall be withdrawn by her uncle, , every month for meeting the expenses of . The- entire amount of Rs. 30,000 shall be withdrawn by her uncle at the time of her marriage, and after meeting the necessary expenses of marriage, the remaining amount shall be given over to . ", "59. Since the appeal has partially succeeded, I leave the parties to bear their own costs of this appeal. ", ", Actg. C.J. ", "I agree. ", "Kotwal, J. ", "I also agree."], "relevant_candidates": ["0000069966", "0000135147", "0000149357", "0000368132", "0000405121", "0000413918", "0000470583", "0000569612", "0000791759", "0000859552", "0000949985", "0001162044", "0001281733", "0001749406", "0001753520", "0001805239", "0001938300", "0110140082", "0134666630", "0146239523"]} {"id": "0001854454", "text": ["JUDGMENT , J. ", "1. This is an appeal by the first defendant, in a suit for declaration that the plaintiff has a four annas share in the shebaitship of a deity, Syamsundar, established by his paternal grandfather and for confirmation or recovery of possession of the corresponding share of the properties of the endowment. The claim was contested by the widow of the step-brother of the father of the plaintiff. The Subordinate Judge held that the title of the plaintiff to the shebaitship was established and made a decree accordingly. On the present appeal, that decision has been assailed as founded on an erroneous construction of the Will of the founder. The relationship between the parties may be elucidated by the annexed genealogical table: ", "First wife= Jasmant Das =Second wife [Will, 22-7-1882. | Died, 20-9-1882.] | ___________|_____ _______________________________|_____________ | | | | | | , , , | Defendant No. 2, Died June, 1890. Died 12-1-1807. Died 30-8-1887 Died 30-8-1887 | | Window , | | Defendant No. 1. | | | | , | | Plaintiff, | _______| | | | , Two daughters. Died after 25-9-1882 ", "2. died on the 25th September 1882, and the question in controversy turns upon the true construction of the Will he executed on the 22nd July 1882. The testator provided that all his properties would devolve on his family deity Syamsundar and his widow would be executor in respect of the same. He further laid down that on the death of his widow, his youngest son Jagadanand and on the death of the latter, his son would be successively installed in the office of executor, and all acts would be done under their management. The Will concluded that his sons by his first wife were disobedient and accordingly would not be appointed executors. ", "3. On the death of the testator, proved his Will, but died before she could take out Probate. Meanwhile, also died. Probate was accordingly granted to , who himself died not many years later on the 30th August 1887. then took out Letters of Administration with copy of the Will annexed, but he died on the 12th January 1897, leaving a widow , the first defendant in the present suit, as also two daughters by her. died on the 10th February 1898, unmarried, like his brothers and . died in June 1890 leaving an infant son , who is plaintiff in this suit. had applied for Letters of Administration after the death of , but he died before orders were passed. After this, applications were made for the same purpose by , and others, but on the 3rd September 1902, this Court held that no Letters of Administration could be issued as the estate had been completely administered, and the only object of the rival applicants was to secure indirectly a decision upon the question of title to the shebaitship. In 1906, a suit was instituted by against and some of the kinsmen of his father for declaration that she was the shebait of the deity Syamsundar. The Court held that she was shebait to the extent of an eight annas share and made a decree accordingly. had not been made a party in that suit and he consequently instituted the present litigation on the 26th September 1910 for declaration that he himself was interested to the extent of a four annas share in the shebaitship. This claim was unsuccessfully contested by in the Court below and the substantial question in controversy now is, whether the plaintiff has the title claimed. ", "4. We are of opinion that the effect of the Will was to constitute , and successive shebaits of the endowment, though they are described as executors in respect of the endowed property. The testator did not prescribe how the shebaitship would devolve after the death of . In these circumstances, the devolution of the office of shebait follows the line of inheritance from the founder; in other words, it passes to his heirs unless there has been some usage or course of dealing which points to a different mode of devolution: v. Perianayagam 1 I.A. 209; Rajah Vurmah Valia v. Ravi Vurmah Kunhi Kutty 4 I.A. 76; 1 M. 235; 1 Ind. Jur. 134; 3 Sar. P.C.J. 687; 3 Suth. P.C.J. 382; 10 I.A. 32; 9 C. 766; 13 C.L.R. 30; 4 Sar. P.C.J. 411; 7 Ind. Jur. 218; 16 I.A. 137; 17 C. 3; 13 Ind. Jur. 211; 5 Sar. P.C.J. 350; v. 27 I.A. 69; 23 M. 271; 4 C.W.N. 329; 10 M.L.J. 29; 2 Bom. L.R. 597; 31 I.A. 203; 3.2 C. 129; 7 Bom. L.R. 765; 8 C.W.N. 809; 1 A.L.J. 585; 19 Ind. Cas. 337; 40 I.A. 97; 35 A. 283; 17 C.L.J. 612; 17 C.W.N. 741; 11 A.L.J. 548; 15 Bom. L.R. 606; (1913) M.W.N. 536; 14 M.L.T. 27; 3 Ind. Cas. 408; 11 C.L.J. 2; 29 A. 663; A.W.N. (1907) 210; 4 A.L.J. 565; 6 Ind. Cas. 77; 32 A. 461; 7 A.L. 3. 430. In this connection, we must bear in mind the observation of Sir in v. 27 I.A. 69; 23 M. 271; 4 C.W.N. 329; 10 M.L.J. 29; 2 Bom. L.R. 597 that the rule in v. I.A. Sup. 47 at p. 66; 9 B.L.R. 377; 18 W.R. 359; 2 Suth, P.C.J. 692; 3 Sar. P.C.J. 85 is applicable to an hereditary office and endowment quite as much as to other immovable property and that the Hindu Law of inheritance does not permit the creation of successive life-estates in an endowment [see also 31 C. 166; 8 C.W.N. 273; 29 C. 716]. What then is the result of the application of these principles to the case before us? The founder had nominated , and as successive shebaits, and had given no further direction as to the devolution of the office thereafter. Consequently, upon the death of the shebaitship vested in , , and , who were the heirs of the founder at the time. On the death of the interest in the shebaitship vested in him passed to his son . Upon the death of his interest devolved upon his widow . Upon the death of his interest in the office passed to his step-brother . Consequently, at the date of the institution of the suit, had a half share in the office, while and had one-fourth share each. ", "5. But it has been argued for the appellant that , and took successive life-estates in the office, with the result that the remainder at the death of the founder constituted a vested interest in the hands of his six sons. In this view, would get through his father one-sixth share, while would ultimately receive a half share by transmission to him of the interests vested in and ; would thus have a third share by absorption of the interest of . We are of opinion that this contention is unsound and that the principle of vested interest while the actual enjoyment of the expected interest is postponed till the termination of the life-estate, as expounded by their Lordships of in v. 4 M.I.A. 137; 7 W.R. (P.C.) 35; 1 Suth. P.C.J. 172; 1 Sar. P.C.J. 327; 18 E.R. 651, has no application to cases of the description now before us. No doubt, a shebait holds his office for life [ 35 C. 226; 12 C.W.N. 323; 7 C.L.J. 315]; but this does not signify that he has a life-interest in the office with the remainder presently vested in the next taker. The entire office is vested in him, though his powers of alienation are qualified and restricted. [ v. 27 M. 435 at p. 442; 14 M.L.J. 105, where , J., describes the spiritual head of a as a \"corporation sole\".] The position of a shebait is analogous to that of a Hindu female (widow, daughter or mother) in possession of the estate of the last full owner rather than to that of the holder of a life-estate. When a Hindu female is thus in possession, she represents the estate completely and though her powers of disposition may be of a restricted character, no one else has a vested interest in the estate during her life-time. Similarly, when a founder has given valid directions as to the devolution of the shebaitship, as in the present case, upon the death of the last shebait, the office vests in persons who at the time constitute the heirs of the founder, provided the last shebait has not taken it absolutely; when the office has so vested in them, upon the death of each member of the group, it passes by succession to his heir, subject to the important qualification formulated by in 19 Ind. Cas. 337; 40 I.A. 97; 35 A. 283; 17 C.L.J. 612; 17 C.W.N. 741; 11 A.L.J. 548; 15 Bom. L.R. 606; (1913) M.W.N. 536; 14 M.L.T. 27, namely, that the rule that when a worship of a thakoor has been founded, the shebaitship is vested in the heirs of the founder in default of evidence that he has disposed of it otherwise or of there being some evidence of usage, course of dealing or some circumstances to show a different mode of devolution, cannot be applied so as to vest the shebaitship in persons who, according to the usages of the worship, cannot perform the rights of the office. We hold accordingly that on the death of , the last shebait named by the founder, the office vested in the four sons of the founder then alive; and this, notwithstanding the fact that the founder intended to exclude his sons by his first wife, for as said in v. I.A. Sup. 47 at p. 66; 9 B.L.R. 377; 18 W.R. 359; 2 Suth, P.C.J. 692; 3 Sar. P.C.J. 85, the heir at law, though in terms excluded from benefit under the Will, cannot be excluded from his general right of inheritance without a valid devise to some other person. We may add that precisely the same result follows if we hold, on the authority of the decision of in 17 Ind. Cas. 696; 40 I.A. 37; 40 C. 274; 17 C.L.J. 159; 17 C.W.N. 145; 13 M.L.T.4; (1913) M.W.N.34; 15 Bom. L.R. 72, that the shebaitship vested absolutely in , and, on his death, devolved on his heirs, namely, his four surviving brothers, , , and . The decree made by the Subordinate Judge correctly determines the rights of the parties and as no question of limitation really arises on the evidence, that decree must be affirmed. ", "6. The result is that the appeal is dismissed with costs. We assess the hearing fee at ten gold mohurs."], "relevant_candidates": ["0000011301", "0000115219", "0000458443", "0000711835", "0000813304", "0000872584", "0000908692", "0001195051", "0001331409", "0001376894", "0001427552"]} {"id": "0001855966", "text": ["PETITIONER: Vs. RESPONDENT: AND ANOTHER. DATE OF JUDGMENT: 14/04/1954 BENCH: , VIVIAN BENCH: , VIVIAN MUKHERJEA, B.K. HASAN, , T.L. VENKATARAMA CITATION: 1954 AIR 345 1955 SCR 174 CITATOR INFO : D 1963 SC1906 (7) D 1992 SC1236 (11,15,18,21) ACT: Transfer of Property Act (Act IV of 1882)- Section 58(c) as amended by Act XX of 1929-Document-Wether a mortgage or sale outright -Principles for determining whether the document is one or the other. HEADNOTE: There is no hard and fast rule for determining whether a given transaction is a mortgage by conditional sale or sale outright with a condition for repurchase. Each case must be decided on its own facts. The numerous decisions of on the point are of no help because two documents are seldom expressed in identical terms. The intention of the parties is the determining factor but the intention must be gathered from the document itself which has to be construed to find out the legal effect of the words used by the parties. If the words are express and clear, effect must 'be given to them and any extraneous enquiry into what was thought or in. tended is ruled out. If however there is ambiguity in the language employed then it is permissible to look to the surrounding circumstances to determine what was intended. 175 In view of the provisions of the amended section 58(c) of the Transfer of Property Act, if the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage whether the documents are contemporaneously executed or not. But the mere fact that there is only one document does not necessarily mean that it must be a mortgage and, cannot be a sale. If the condition of repurchase is embodied in the document that effects or purports to affect the sale, then it is a matter for construction which was meant. v. (27 I.A. 58), v. (44 E.R. 924 at 928), v. (17 I.A. 98 at 102), and v. (43 I.A. 284 at 293) referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 98 of 1953. ", "Appeal by Special Leave from the Judgment and Decree dated the 27th day of January, 1949, of at Patna in Appeal from Appellate Decree No. 690 of 1947 against the Decree dated the 13th January, 1947, of , Bbagalpur, in Title Appeal No. 161 of 1946 arising out of the Judgment and Decree dated the 25th July, 1946, of Additional Subordinate Judge, Bhagalpur, in Title Suit No. 80 of 1945. , ( and , ,with him) for the appellant. ", " and , for respondent No. I. 1954. April 14. The Judgment of the was delivered by is a plaintiff's appeal in a suit for re- demption of what the plaintiff calls a mortgage dated 15th April, 1930. The only question for determination is whether this is a mortgage by conditional sale or a sale out and out with a condition of repurchase. If the former the plaintiff succeeds. If the latter he is out of . ", "The property covered by the disputed deed belonged to one who died leaving a widow and two sons and . On 25th May, 1922, alone executed a simple mortgage in favour of the second defendant for Rs. ", "25. Then on 6th May, 1927, , and Mst. mortgaged the same property to the first defendant for Rs. 250. This was also a simple mortgage. After this came the transaction in suit dated 15th April, 1930. The same three persons executed the disputed deed. This was in favour of the first defendant. The consideration mentioned in the deed is Rs. 634-10-0 due on the second mortgage and Rs. 65-6-0 taken in cash to enable the executants to meet the expenses of certain commutation proceedings under section 40 of the Bihar Tenancy Act in respect of this very land. ", "The second defendant sued on his mortgage of 1922 but did: not join the subsequent mortgagee, the first defendant. He obtained a decree against the mortgagors alone and executed it in 1940. He himself purchased the property in dispute and took possession on 20th March, 1943. Shortly-after, on 19th August, 1943, he sold this land to the plaintiff for Rs. 400. ", "The plaintiff's title is derived from the second defendant who stepped into the shoes of the mortgagors because of his suit against the mortgagors in 1940. The plaintiff's case is that the transaction of 15th April, 1930, is a mortgage and, as the subsequent mortgagee was not joined as a party to the earlier suit, the plaintiff is entitled to redeem. The first defendant's case is that the transaction of 15th April, 1930, was not a mortgage but an out and out sale with a covenant for repurchase which became infructuous because no attempt was made to act on the covenant within the time specified. The learned trial Judge and the lower appellate both held that the document was a mortgage and so decreed the plaintiff's claim. The High on second appeal reversed these findings and held it was a sale. Consequently the learned Judges dismissed the plaintiff's suit. The plaintiff appeals here. ", "The question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one which invariably gives rise to trouble and litigation. There are numerous decisions on the point and much industry has been expended in some of in collating and analysing them. We think that is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts. But certain broad principles remain. The first is that the intention of the parties is the determining factor: see (1). But there is nothing special about that in this class of cases and here, as in every other case where a document has to be construed the intention must be gathered, in the first place, from the document itself. If the words are express and clear., effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out. the real question in such a case is not what the parties intended or meant but what is the legal effect of the words which they used. If, however, there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended. As Lord said in A Aderson v. White (2) : \"The rule of law on this subject is one dictated by commonsense; that prima facie an absolute conveyance, containing nothing to show that the relation of debtor and creditor is to exist between the parties, does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase............... In every such case the question is, what, upon a fair construction, is the meaning of the instruments? ", "Their Lord-ships of the Privy Council applied this rule to India in v. (3) and in (4). ", "The converse also holds good and if, on the face of it, an instrument clearly purports to be a mortgage it cannot be turned into a sale by reference to a host of (1) 27 I.A. 58. (3) 17 I.A. 98 at 102. ", "(2) 44 E.R. 924 at 928. (4) 43 I.A. 284 at 293. ", "23 ", "178 ", "extraneous and irrelevant considerations. Difficulty only arises in the border line cases where there is ambiguity. Unfortunately, they form the bulk of this kind of transaction. ", "Because of the welter of confusion caused by a multitude of conflicting decisions the stepped in and amended section 58(c) of the Transfer of Property Act. Unfortunately that brought in its train a further conflict of authority. But this much is now clear. If the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage whether the documents are, contemporaneously executed or not. But the converse does not hold good, that is to say, the mere fact that there is only one document does not necessarily mean that it must be a mortgage and cannot be a sale. If the condition of repurchase is embodied in the document that effects or purports to effect the -sale, then it is a matter for construction which was meant. The has made a clear cut classification and excluded transactions embodied in more than one document from the category of mortgages, therefore it is reasonable to suppose that persons who, after the amendment, choose not to use two documents, do not intend the transaction to be a sale, unless they displace that presumption by clear and express words; and if the conditions of section 58(c) are fulfilled, then we are of opinion that the deed should be construed as a mortgage. ", "The document with which we are concerned, Exhibit A, is in the following terms and our first duty is to construe the language used and see whether it is ambiguous. (We have paragraphed the document for convenience of construction and have omitted unnecessary words). ", "(1)\" Rs. 634 principal with interest under a registered rehan bond \" (simple mortgage) \" dated the 6th May, 1927, is justly due............ by us the executants. Now we further require Rs. 65-6-0 more to meet costs of the suit under section 40 .\" (Bihar Tenancy Act). ", "(2)(I; and at present there is no other way in view rather it seems impossible and difficult to arrange for the money without selling the property let out in rehan \" (simple mortgage) \" under the above mentioned bond.\" (3) \" Therefore, we the executants declare.... that we sold -and vended the properties,detailed below on condition (given below) for a fair and just price of Rs. 700 \" (4) \"That we set off Rs. 634- 10-0 against the consideration money \" (torn) \" payable under the aforesaid bond in favour of the said vendee and received Rs. 65-6-0 in cash from the said vendee. In this way the entire consideration money was realised from the said vendee.\" (5) \" and we put the said vendee in possession and occupation of the vended property detailed below and made him an absolute proprietor in our places.\" (6) \" If we, the executants, shall repay the consideration money to the said vendee within two years............ the property vended under this deed of conditional sale attached shall come in exclusive possession and occupation of us the executants.\" ", "(7) \" If we do not pay the same, the said vendee shall remain in possession and occupation thereof, generation after generation, and he shall appropriate the produce thereof.\" ", "(8) \" We, the executants, neither have nor shall have any objection whatsoever in respect of the vended property and the consideration money. Perchance if we do so it shall be deemed null and void in Court.\" ", "\"and we declare also that the vended property is flawless in every way and that if in future any kind of defect whatsoever be found on account of which the said vendee be dispossessed of a portion or the entire property vended under this deed of conditional sale and will have to pay the loss or damage, in that event we, the executants, ", "(a) shall be liable to be prosecuted under the criminal procedure, and ", "(b) we shall pay the entire consideration money together with loss and damage and interest at the rate of Rs. 2 per mensem per hundred rupees from the date of the execution of this deed till the date of realisation from our person and other properties ", "(c)and we shall not claim the produce of the vended property for the period of vendee's possession against the said vendee or his heirs and representatives.\" (10) \" Therefore we, the executants......... have executed this deed of conditional sale so that it may be of use in future.\" ", "In our opinion, this language is not free from difficulty and is ambiguous. The deed purports to be a sale and has the outward form of one but at the same time it calls itself a\"conditional sale.\" It has,however, no clause for retransfer and instead says (clause 6) that if the executants pay the money within two yeas, the property \" shall come in exclusive possession and occupation of us, the executants.\" That is clear about the possession but is silent about the title. In the context we can only take these words to mean that if there is payment within the specified time, then the title will continue to reside in the executants; for what else can a right of exclusive possession import in these circumstances ? It is relevant to note in passing that this silence about title would be proper in a mortgage for there the owner's title remains in him all the while and so a reconveyance is unnecessary. But if there is an out and out sale the title could not revert to the original owner without a proper reconveyance. Clause (7) appears to underline this because it couples the transferee's; right to remain in possession and occupation and to appropriate the produce \" generation after generation \" with the non-payment of the money within the time set out. It is true the words of conveyance in the earlier part Of the deed (clause 5) would pass an absolute title if they stood alone but the document must be read as a whole and it must also be remembered that it was executed by ignorant justice and scribed by a man whose knowledge of conveyancing was, on the face of it, rudimentary and defective. The deed lacks the precision of a practised hand and that probably accounts. for its ambiguities: that there is ambiguity is patent from what we have said. ", "181 ", "The next step is to see whether the document is covered by section 58(c) of the Transfer of Property Act, for- if it is not, then it cannot be a mortgage by conditional sale. The first point there is to see whether there is an \" ostensible sale.\" That means a transaction which takes the outward form of a sale, for the essence of a mortgage by conditional sale is that though in substance it is a mortgage it is couched in the form of a sale with certain conditions attached. The executable clearly purported to sell the property in clause (5) because they say so, therefore, if the transaction is not in substance a mortgage, it is unquestionably a sale: an actual sale and not merely an ostensible one. But if it is a mortgage, then the condition about an \" ostensible sale \" is fulfilled. ", "We next turn to the conditions. The ones relevant to the present purpose are contained in clauses (6) and (7). Both are ambiguous, but we have already said that on a fair construction clause (6) means that if the money is paid within the two years then the possession will revert to the executants with the result that the title which is already in them will continue to reside there. The necessary consequence of that is that the ostensible sale becomes void. Similarly, clause- (7), though clumsily worded, can only mean that if the money is not paid, then the sale shall become absolute. Those are not the actual words used but, in our opinion, that is a fair construction of their meaning when the document is read as a whole. If that is what they mean, as we hold they do, then the matter falls squarely within the ambit of section 58(c) . ", "Now, as we have already said, once a transaction is embodied in One document and not two and once its terms are covered by section 58(c) then it must be taken to be a mortgage by conditional sale unless there are express words to indicate the contrary, or, in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion. There are no express words here which say that this is not a mortgage but there is ambiguity, so we must probe further. The respondents, who claim that this is a sale and not a mortgage, rely on the following circumstances. They are all culled from the deed itself First, they point to clause (5) which says that the transferee has been made the absolute proprietor in place of the executants. Those, they say, are the operative words and point to an out and out transfer of title. Next, they point to clause (2) where the executants say that they have no other Means of raising the money they want except by selling the property. The respondents argue that the word \" sale \" could not have been used inadvertently because it is contrasted with a mortgage in the very same sentence. The word \" mortgage \"is also used in clause (1), therefore it is clear that when a mortgage is intended the word \" mortgage is used. It must follow that when the word \" sale is used, a sale must have been meant. The only weakness in this argument is that when a mortgage is by conditional sale this is the form it has to take, because section 58(c) postulates that there must be an \" ostensible sale \" and if a sale is ostensible it must necessarily contain all the outward indicate of a real sale. The question we are considering can only arise when the word \" sale \" is used and, of course, a sale imports a transfer of title. The use of the words It absolute proprietor in our places \" carries the matter no further because the essence of every sale is to make the vendee the absolute proprietor of what is sold. The question here is not whether the words purport to make the transferee, an absolute proprietor, for of course they must under section 58(c) , but whether that is done \" ostensibly \" and whether conditions of a certain kind are attached. ", "The learned counsel for the respondents next relied on the fact that clause (3) says that the price paid was a \"fair and just?' one and that the Courts below have found that the consideration was not inadequate. , He also relies on the fact that no interest was charged, that the transferee was placed in possession of the property and was Dot to account- for the usufruct also on the fact that a short term, namely two years, was fixed for repayment. ", "183 ", "But on the other side, there is the very significant fact that Rs. 65-6-0 was borrowed to enable the executants to carry on commutation proceedings under section 40 of the Bihar Tenancy Act (that is, for substitution of a cash rent instead of one in kind) in respect of this very property: (clause 1). It was admitted before us, and the lower so find, that the commutation proceedings related to this very land. The learned Judges discount this by saying that there is no evidence to show that the proceedings, which were started in 1929, continued after the deed. But that is a mistake apparently due to the fact that the copy of the entry in the Rent Schedule, produced before the learned Judges, inadvertently omitted the date. Mr. produced a certified copy of the revenue record here and that gives the missing date. From that it is clear that the proceedings continued till 18th February,- 1931, that is to say, for some ten months after the deed. This, we think, is crucial. Persons who are selling their property would hardly take the trouble to borrow money in order to continue revenue proceedings which could no longer benefit them and could only enure for the good of their transferees. ", "There is another point in favour of the appellant, and that is that the surrounding circumstances show that there was a relationship of debtor and creditor between the. parties existing at the date of the suit transaction. The bulk of the consideration went in satisfaction of the mortgage of 6th May, 1927. In those circumstances, seeing that the deed takes the form of a mortgage by conditional sale under section 58(c) of the Transfer of Property Act, it is legitimate to infer, in the absence of clear indications to the contrary, that the relationship of debtor and creditor was intended to continue. ", "The point made on behalf of the respondents about the adequacy of the consideration and the absence of interest can be explained. The transferee was to take possession of the property and would thus get the produce and it is evident to us from the tenor of the document that he was not to be accountable for it. ", "184 ", "We say this because the indemnity clause (clause 9) says in sub-clause (b) that in the event of the transferee's possession being disturbed the executants would among other things, pay him, in addition to damages, the entire consideration together with interest at 2 per cent. per month from the date of the deed and would not require the transferee to account for the usufruct. It is true this can also be read the other way but considering these very drastic provisions as also the threat of a criminal prosecution in sub-clause (a), we think the transferee was out to exact more than his pound of flesh from the unfortunate rustics with whom he was dealing and that he would not have agreed to account for the profits: indeed that is his own case, for he says that this was a sale out and out. In these circumstances, there would be no need to keep a reasonable margin between the debt and the value of the property as is ordinarily done in the case of a mortgage. Taking everything into consideration, we are of opinion that the deed is a mortgage by conditional sale under section 58(c) of the Transfer of Property Act. The appeal is allowed. The decree of is set aside and that of the lower appellate is restored except as to costs. ", "The original owners of the property have lost it. The value of the property was put at over Rs. 10,000 in the special leave petition. The second defendant oust,.,, the original owners by getting a mortgage decree for Rs. 130 in his favour on a mortgage of only Rs. 25 and purchasing it at the auction himself. He is no longer in the picture as he sold it to the plaintiff for Rs. 400. The plaintiff has accordingly obtained property which on his own showing is worth more than Rs. 10,000 for only Rs. 400. The first defendant spent only Rs. 250 plus Rs. 65-6-0 on it: Rs. 315- 6-0 and the consideration of the disputed deed is only Rs. ", "700. it is evident that both sides are speculators. In the circumstances we direct that each party bear its own costs. ", "Appeal allowed,"], "relevant_candidates": ["0000386205"]} {"id": "0001857950", "text": ["PETITIONER: Vs. RESPONDENT: THE STATE OF MADRAS.UNION OF INDIA: INTERVENER. DATE OF JUDGMENT: 19/05/1950 BENCH: , BENCH: , FAZAL ALI, SAIYID SASTRI, M. PATANJALI , MEHR CHAND DAS, SUDHI RANJAN , B.K. CITATION: 1950 AIR 27 1950 SCR 88 CITATOR INFO : F 1951 SC 157 (21) F 1951 SC 270 (5,6) F 1951 SC 301 (10) F 1951 SC 332 (344) E 1952 SC 75 (45) RF 1952 SC 123 (6) F 1952 SC 181 (6,27,29,33) D 1952 SC 196 (16) RF 1952 SC 252 (106) R 1952 SC 366 (16) E&F 1952 SC 369 (90,93) F 1953 SC 451 (7) E&F 1954 SC 92 (5,39) RF 1954 SC 119 (15) RF 1954 SC 728 (17) R 1955 SC 41 (6) F 1956 SC 108 (6) R 1957 SC 688 (6,8,9) R 1958 SC 163 (7,8,9,25,26,33,36,38,41) APL 1958 SC 578 (154,223) D 1958 SC 731 (17) R 1959 SC 149 (27,82) D 1960 SC 430 (10) D 1960 SC1080 (25,27,28) RF 1961 SC 232 (55) R 1961 SC1629 (5) R 1962 SC1006 (67,72,79) R 1962 SC1371 (32,34,35) R 1962 SC1621 (73,108) R 1963 SC1047 (18) F 1963 SC1295 (15,31) F 1964 SC 381 (54) R 1965 SC 845 (29,30,44,45) E 1966 SC 424 (2,7) RF 1966 SC1910 (34) R 1967 SC 1 (41,42,75,158) APL 1967 SC1639 (7,10) R 1967 SC1643 (22,95,230,274) R 1967 SC1836 (13,23,53,58) E 1968 SC1138 (14) E 1968 SC1313 (10) RF 1969 SC1100 (7) O 1970 SC 564 (48,53,54,64,149,152,153,156) RF 1971 SC 481 (46) E 1972 SC 963 (35) R 1972 SC1660 (7,9) RF 1973 SC 106 (105) O 1973 SC1425 (7,18,25,27,33,37,38,39) RF 1973 SC1461 (24,30,184,310,503,648,699,790 RF 1973 SC2555 (5) F 1974 SC 348 (24) R 1974 SC 613 (8,10,31,32,33,34,43,50,51) R 1974 SC2154 (21) RF 1975 SC 550 (12) E 1975 SC 775 (3) RF 1975 SC2213 (7) RF 1975 SC2299 (135,609,610) E 1976 SC1207 (53,55,57) RF 1976 SC1750 (3) R 1977 SC1027 (23,30,42) R 1978 SC 68 (89) R 1978 SC 215 (67) D 1978 SC 489 (1,9) E&R 1978 SC 597 (5,9,10,11,12,16,40,41,54,55,* RF 1978 SC1675 (55,227) RF 1979 SC 478 (90,159) RF 1979 SC 745 (71) RF 1979 SC1925 (16) C 1980 SC 898 (30,41,43,44,47,48,50,51,54) RF 1982 SC 710 (17,21,71,84,114) MV 1982 SC1325 (16,80) RF 1983 SC 361 (2,12,13) F 1985 SC1367 (33) F 1985 SC1416 (103,104) RF 1986 SC 555 (6) RF 1986 SC1162 (5) R 1990 SC 231 (17) RF 1991 SC 564 (5) R 1992 SC 320 (51) RF 1992 SC1701 (21,26,27) ACT: Preventive Detention Act (IV of 1950), ss. 8, 7, 10-I4.--Validity--Constitution of India, 1950, Arts. 13, 19 to 22, 32--Law relating to preventive detention--Whether infringes Fundamental Right as to freedom of movement--Whether subject to judicial review as to reasona- bleness under Art. 19 (5)-- Scope of Art. 19-- Right of free movement and Right to personal liberty, nature and incidents of-- Art. 22 , whether complete code as to preventive deten- tion--Scope and applicability of Art.. 21--\"Law,\" \"proce- dure established by law,\" meanings of--Whether include rules of natural justice--Construction of Art. 21-- American deci- sions on \"due process of law,\" value of-Omission to provide objective standard for satisfaction of authorities, to provide for oral hearing or leading of evidence, to fix maximum period of detention, and to specify \"circumstances\" and \"classes of cases\" where period of detention may be extended over 3 months, prohibiting detenu from disclos- ing grounds of detention--Validity of law--Construction of Constitution --Reference to debates and Report of Draft- ing Committee-Permissibility. HEADNOTE: The petitioner who was detained under the Preventive Detention Act (Act IV of 1950) applied under Art. 32 of the Constitution for a writ of habeas corpus and for his release from detention, on the ground that the said Act contravened the provisions of Arts. 13, 19, 21 and 22 of the Constitu- tion and was consequently ultra rites and that his detention was therefore illegal: Held, per C.J., , and . ( and dissentinq)--that the preventive Detention Act, 1950, with the exception of Sec. 14 thereof did not contravene any of the Articles of the Constitution and even though Sec. 14 was ultra rites inas- much as it contravened the provisions of Art. 9.9 , (5) of the Constitution, as this section was severable from the remaining sections of the Act, the invalidity of Sec. 14 did not affect the validity of the Act as a whole, and the detention of the petitioner was not illegal. and --Section 12, of the Act was also ultra vires, and since it contravened the very provi- sion in the 89 Constitution under which the derived its compe- tence to enact the law, the detention was illegal. Held, by ( CJ., , , , and .)--Section 14 of the Preventive Detention Act, 1950, contravenes the provisions of Art. 9.9. (5) of the Constitution in so far as it prohibits a person detained from disclosing to the the grounds on which a detention order has been made or the representation made by him against the order of detention, and is to that extent ultra vires and void. Per C.J., , , and . ( J. dissenting).-- Article 19 of the Consti- tution has no application to a law which relates directly to preventive detention even though as a result of an order of detention the rights referred to in sub-cls. (a) to (e) and (g) in general, and sub-cl. (d) in particular, of cl. (1) of Art. 19 may be restricted or abridged; and the constitution- al validity of a law relating to such detention cannot therefore, be judged in the light of the test prescribed in el. (5) of the said Article. DAS J.-- Article 19 (1) postulates a legal capacity to exercise the rights guaranteed by it and if a citizen loses the freedom of his person by reason of lawful detention as a result of a conviction for an offence or otherwise he cannot claim the right s under- sub-cls. (a) to (e) and (g) of Art. 19 (1); likewise if a citizen's property is compulsorily ac- quired under Art. 31 , he cannot claim the right under sub- el. (f) of Art. 19 (1) with respect to that property. In short the rights under sub-cls. (a) to (e) and (g) end where lawful detention begins and therefore the validity of a preventive detention Act cannot be judged by Arc. 19 (5). J.---Whatever be the precise scope of Art. 19 (1) (d) and Art.19(5) the provisions of Art. 19(5) do not apply to a law relating to preventive detention, inasmuch as 'there is a special self-contained provision in Art. 22 regulating it. .J.--Preventive detention is a direct infringe- ment of the right guaranteed in Art. 19 (1) (d ), even if a narrow construction is placed on the said sub-clause, and a law relating to preventive detention is therefore subject to such limited judicial review as is permitted by Art. 19 (5). Per C.J., , and . ( J. dissenting).--The concept of the right \"to move freely throughout the territory of India\" referred to in Art. 19 (1) (d ), of the Constitution is entirely differ- ent from the concept of the right to \"personal liberty\" referred to in Art. 21 , and Art. 19 should not, therefore, be read as controlled by the provisions of Art. 21. The view that Art. 19 guarantees substantive rights and Art. 21 prescribes the procedure is incorrect. DAs J.-- Article 19 protects some of the important attributes of personal liber- ty as independent rights and the expression \"personal liber- ty\" is used in Art. 21 as a compendious term 90 including within Rs meaning all varieties of rights which go to make up the personal liberties of men. J.--Even if it be assumed that Art. 19 (1) (d) does not refer to \" personal liberty\" and that it bears the restricted meaning attributed to it,that is to say, R signi- fies merely the right to move from one locality to another, preventive detention must be held to affect this limited right of movement directly and substantially. One of the objects of preventive detention is to restrain a person detained from moving from place to place so that he may not spread disaffection or indulge in dangerous activities in the places he visits. The same consideration applies to the cases of persons who are interned or externed. Hence, externment, interment and certain other forms of restriction on movement have always been treated as kindred matters belonging to the same group or family, and the rule which applies to one must necessarily apply to the others. Per C. J ,, and DAS 35. ( 3. dissenting).-- Article 22 does not form a complete code of constitutional safeguards relating to preventive detention. To the extent that provision is made in Art. 9.9 , it cannot be controlled by Art. 9 ,1; but on points of procedure which expressly or by necessary implication are not dealt with by Art. 22 , Art. 9.1 will apply. DAS J.--Art. 21 protects substantive rights by requiring a procedure and Art. 9.9. lays down the minimum rules of procedure that even the cannot abrogate or overlook. J.--Art. 99. contains a self-contained code of constitutional safeguards relating to preventive detention and cannot be examined or controlled by the provisions of Art. 21. The principles underlying Art. 21 are however kept in view in Art. 22 and there is no conflict between these articles. J. --Even assuming that Art. 22 is not a self-contained code relating to preventive detention and that Art. 21 would apply, it is .not permissible to supplement Art. 22 by the application of rules of natural justice. J.--Art. 22. does not form an exhaustive code by itself relating to preventive detention. can make further provi- sions and if it has done so Art. 19 (5) may be applied to see if those provisions have transgressed the bounds of reasonableness. Per C.J., and . ( J. dis- senting).--In Art. 9.1 the word 'law\" has been used in the sense of -made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice; and \"procedure established by law\" means procedure established by law made by the , that is to say, the Union or the Legislatures of the s. It is not proper to construe this expression in the light of the meaning given to.the expression \"due process of law\" in the American Constitution by the Supreme of America. \"Law\" in Art. 21 does not mean the jus naturale of civil law but means 91 positive or -made law. \"Procedure established by law\" does not however mean any procedure which may be prescribed by a competent legislature, but the ordinary well-estab- lished criminal procedure, i.e., those settled. usages and normal modes of procedure sanctioned by the Criminal Proce- dure Code, which is the general law of criminal proce- dure in this country. The only alternative to this con- struction, if a constitutional transgression is to be avoid- ed is to interpret the reference to \"law\" as implying a constitutional 'amendment pro tanto, for it is only a law enacted by the procedure provided for such amendment that could modify or override a fundamental right without contra- vening Art. 13 (2). , is nothing revolutionary in the view that \"procedure established by law \"must include the four principles of elementary justice which inhere in and are at the root of all civilized systems of law, and which have been stated by the American s and jurists as consisting in (1) notice, (2) opportunity to be heard, (3) impartial tribunal and (4) orderly course of procedure. These four principles are really different aspects of the same right, namely, the right to be heard before one is condemned. Hence the words \"procedure established by law \", whatever its exact meaning be, must necessarily include the principle that no person shall be condemned without hearing by an impartial tribunal. Per C.J., , , and .--Section 3 of the Preventive Detention Act, 1950, does not delegate any legislative power to an executive officer but merely confers on such officer a discretion to enforce the law made by the legislature, and is not there- fore invalid on this ground. The fact that the section does not provide an objective standard for determining whether the requirements of law have been complied with, is not a ground for holding that it is invalid. J.---Section 3 is however a reasonable provision only for the first step, i.e., for arrest and initial detention and must be followed by some procedure for testing the so-called subjective satisfaction, which can be done only by providing a suitable machinery for examining the grounds on which the order of detention is made and considering the representations of the persons detained in relation to those grounds. Per C. J., and .---Section 7 of the said Act is not invalid merely because it does not provide for an oral hearing or an opportunity to lead evidence but only gives right to make a representation. Right to an oral hearing and right to give evidence are not necessarily implied in the right to make a representation given by Art. 22. Per C.J., and J.--The provision contained in Sec. 11 that a person may be detained for such period as the 12-A 92 thinks fit does not contravene Art. 22 (7) and it is not therefore invalid. Per . C.J., , and . ( and dissenting).-- Article 22 (7) means that may prescribe either the circumstances under which, or the class or classes of cases in which, a person may be detained for a period longer than three months without reference to an advisory board. It is not necessary that the should prescribe both. The matters referred to in clauses (a) and (b) of sub-see. (1) of Sec. 12 constitute a sufficient description of such circumstances or classes of cases and Section 12 is not therefore open to the objection that it does not comply with Art. 22 (7) DAS J.-- has in act and substance prescribed both in clauses (a) and (b) of sub-sec. (1) of Sec. 12. and MAJAN JJ.-- Article 22 (7) Means that both the circumstances and the class or classes of cases (which are two different expressions with different meanings and connotations) should be prescribed, and the prescription of one without the other will not be enough. The enumeration of the subjects for reasons connected with which a law of preventive detention could be made contained in els. (a) and (b) of sub-see. (1) of Sec.12 does not amount to prescribing the circumstances under which, or the class or classes of cases in which, a person can be detained for more than three months. Per C.J.--While it is not proper to take into consideration the individual opinions of members of or to construe the meaning of a particular clause, when a question is raised whether a certain phrase or expression was up for consideration at all or not, a reference to the debates may be permitted. construing the provisions of an Act, speeches made in the course of the debates on the bill should not be taken into consideration. J.--In construing the Constitution it is better to leave out of account the debates in , but a higher value may be placed on the report of . JUDGMENT: ", "ORIGINAL JURISDICTION: Petition No. XIII of 1950. Application under Art. 32 (1) of the Constitution of India for a writ of habeas corpus against the detention of the appellant in the Madras jail in pursuance of an order of detention made under the Preventive Detention Act, 1950. The material facts of the case and arguments of counsel are set out in detail in the judgments. The relevant provisions of the Preventive Detention Act, 1950, are printed below. ", "93 ", "1. Short title, extent and duration.--This Act may be called the Preventive Detention Act, 1950. (2) It extends to the whole of India ..... ", "(3) It shall cease to have effect on the 1st day of April, 1951, as respects things done or omitted to be done before that date. ", "2. Definitions.--In this Act, unless the context other- wise requires,-- ", "(a) \"State Government\" means, in relation to a Part C State, the Chief Commissioner of the State; and ", "(b) \"detention order\" means an order made under Section 3. ", "3. Power to make orders detaining certain persons.--(1) The Central Government or the State Government may--- ", "(a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to-- ", "(i) the defence of India, the relations of India foreign power, or the security of India, or ", "(ii) the security of the or the maintenance of public order, or ", "(iii) the maintenance of supplies and services to the community, or ", "(b) if satisfied with respect to any person who is a foreigner within the meaning of the Foreigners Act , 1946 (XXXI of 1946), that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India it is necessary so to do, make an order directing that such person be detained. ", "(2) Any District Magistrate or Sub-Divisional Magistrate, or Presidency-town, the Commissioner of Police, may, if satisfied provided in sub-clauses (ii) and (iii) of clause ", "(a) of sub-section (1), exercise the power conferred by the said sub-section. ", "(3) When any order is made under this section by a Dis- trict Magistrate, Sub-Divisional Magistrate or Commissioner of Police, he shall forthwith report the fact to to which he is subordinate together with the grounds on which the order has been made and such other particulars as in his opinion have a bearing on the necessi- ty for the order. ", "7. Grounds of order of detention to be disclosed to persons affected by the order.--(1) When a person is de- tained in pursuance of a detention order, the authority making the order shall, as soon as may be, communicate to him the grounds on which the order his been made, and shall afford him the earliest opportunity of making a representa- tion against the order, in a case where such order has been made by the Central , to that , and in a case where it has been made by a State or an officer subordinate thereto, to the State . ", "94 ", "11. Confirmation of detention order.--In any case where has reported that* there is in Rs opinion suffcient cause for the detention of the person concerned, or . as the case may be, may confirm the detention order and continue the detention of the person concerned for' such period as it thinks fit. ", "12. Duration of detention in certain cases.--(1) Any person detained in any of the following classes of cases or under 'my of the following circumstances may be detained without obtaining the opinion of for a period longer than three months, but not exceeding one year from the date of his detention, namely, where such person has been detained wish a view to preventing him from acting in any manner prejudicial to-- ", "(a) the defence of India, relations of India with foreign powers or the security- of India; or ", "(b) the security of a or the maintenance of public order. * * * ", "14. Disclosure of grounds of detention, etc.--(1) No court shall, except for the purpose of a prosecution for an offence punishable under sub-section (9,), allow any state- ment to be made, or any evidence to be given. before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by 'him against such order; and notwithstanding anything contained in any other law, no court shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such communication or representation made, or the proceedings of or that par of the report of which is confidential. (2) It shall be an offence punishable with imprisonment for term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of or , as the case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub-section (1): ", "Provided that nothing in this sub-section shall apply to a disclosure made' to his legal adviser by a person who is the subject of a detention order. ", " ( , with him) for the petitioner. ", ", Advocate-General of Madras ( and , with him) lot the State of Madras. ", ", Attorney-General for India (, with him) for . ", "95 ", "1950. May 19. The following Judgments were delivered. This is a petition by the applicant under article 32 (1) of the Constitution of India for a writ of habeas corpus against his detention in the Madras Jail. In the petition he has given various dates showing how he has been under detention since December, 1947. Under the ordi- nary Criminal Law he was sentenced to terms of imprisonment but those convictions were set aside. While he was tires under detention under one of the orders of the Madras State Government, on the 1st of March, 1950, he was served with an order made under section 3 (1) of the Preventive Detention Act, IV of 1950. He challenges the legality of the order as it is contended that Act IV of 1950 contravenes the provisions of articles 13, 19 and 21 and the provisions of that Act are not in accordance with article 22 of the Con- stitution. He has also challenged the validity of the order on the ground that it is issued mala fide. The burden of proving that allegation is on the applicant. Because of the penal provisions of section 14 of the impugned Act the applicant has not disclosed the grounds, supplied to him, for his detention and the question of mala fides of the order therefore cannot be gone into under this petition. The question of the validity of Act IV of 1950 was argued before us at great length. This is the first case in which the different articles of the Constitution of India contained in the Chapter on Fundamental Rights has come for discussion before us. The Court is indebted to the learned counsel for the applicant and the Attorney-General for their assistance in interpreting the true meaning of the relevant clauses of the Constitution. ", "In order to appreciate the rival contentions it is useful first to bear in mind the general scheme of the Constitution. Under article 53 of the Constitution the executive power of the is vested in the President and is to be exercised by him in accordance with the Constitution either directly or through officers subordinate to him. The legislative powers of the are divided between the and of the States. The ambit and limitations on their respective powers are found in article 246 read with article 245 , Schedule VII, Lists 1,2 and 3 of the Constitution. For the of India is established and its powers and jurisdiction are set out in articles 124 to 147. This follows the pat- tern of the Government of India Act, 1935, which was the previous Constitution of the Government of India. Unlike the American Constitution, there is no article vesting the judicial power of the of India in . The material points substantially altering the edifice are first in the Preamble which declares india a Sovereign Democratic Republic to secure to all its citizens justice, liberty and equality and to promote among them all, frater- nity. Part III of the Constitution is an important innova- tion. It is headed \"Fundamental Rights.\" In that Part the word \"State\" includes both the Government of the and . By article 13 it is expressly provided that all laws in force in the territory of India, immediately before the commencement of the Constitution, in so far as they are inconsistent with the provisions of this Part, to the extent of such inconsistency, are void. There- fore, all laws in operation in India on the day the Consti- tution came into force, unless otherwise saved, to the extent they are inconsistent with this Chapter on Fundamen- tal Rights, become automatically void. Under article 13 (2) provision is made for legislation after the Constitution comes into operation. It is there provided that the State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contraven- tion of this clause shall to the extent of the contraven- tion, be void. Therefore, as regards future legislation also the Fundamental Rights in Part III have to be respected and, unless otherwise saved by the provisions of the Consti- tution, they will be void to the extent they contravene the provisions of Part III. Under article 245 (1) the legisla- tive powers conferred under article 246 are also made \"subject to the provisions of this Constitution,\" which of course includes Part III dealing with the Fundamental Rights. The term law in article 13 , is expressed to be wide enough to include Acts, Ordinances, Orders, Bye-laws, Rules, Regulations and even custom or usage having, in the territory of India, the force of law. The rest of this Part is divided in seven divisions. \"Right to Equality\" is found in articles 14-18, \"Eight to Freedom\" in articles 19-22, \"Right against Exploitation\" in articles 23 and 24, \"Right to Freedom of Religion\" in articles 25-28, \"Cultural and Educational Rights\" in articles 29 and 30, \"Right to Property\" in article 31 and \"Right to Constitu- tional Remedies\" in articles 32-35. In this case we are directly concerned only with the articles under the caption \"Right to Freedom\" (19-22) and article 32 which gives a remedy to enforce, the rights conferred by this Part. The rest of the articles may have to be referred to only to assist in the interpretation of the above-mentioned arti- cles. ", "It is obvious that by the insertion of this Part the powers of the and the , both of the Union and the s, are further curtailed and the right to enforce the Fundamental Rights found in Part III by a direct application to is removed from the legislative control. The wording of article 32 shows that can be moved to grant a suitable relief, mentioned in article 32 (2 ), only in respect of the Funda- mental Rights mentioned in Part III of the Constitution. The petitioner is detained under a preventive detention order, made under Act IV of 1950, which has been passed by . In the Seventh Schedule of the Constitution, List I contains entries specifying items in respect of which the has exclusive legislative powers. Entry 9 is in these terms: \"preventive detention for reasons connected with , or ; persons subjected to such detention.\" List III of that Schedule enumerates topics on which both the Union and the s have concurrent legislative powers. Entry 3 of that List is in these terms: \"Preventive detention for reasons connected with the security of a , the maintenance of public order or the maintenance of supplies and services essential to the community; persons subjected to such detention.\" It is not disputed that Act IV of 1950 is covered by these two Entries in List I and List III of the Seventh Schedule. The contention of the peti- tioner is that the impugned legislation abridges or in- fringes the rights given by articles 19-21 and is also not in accordance with the permissive legislation on preventive detention allowed under articles 22 (4) and (7) and in particular is an infringement of the provisions of article 22 (5). It is therefore necessary to consider in detail each of these articles and the arguments advanced in respect thereof. ", " Article 19 is for the protection of certain rights of freedom to citizens. It runs as follows :-- ", "\"19. (1)--All citizens shall have the right-(a) to free- dom of speech and expression; ", "(b) to assemble peaceably and without arms; ", "(c) to form associations or unions; ", "(d) to move freely throughout the territory of India; ", "(e) to reside and settle in any part of the territory of India; ", "(f) to acquire, hold and dispose of property; and ", "(g) to practise any profession, or to carry on any occupation, trade or business. ", "\"(2) 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 from making any law relat- ing to, libel, slander, defamation, contempt of court or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the . ", "(3) Nothing in sub-clause (b) of the said clause shall affect the operation of any existing law in so far as it imposts, or prevent the from making any law imposing, in the interests of public order reasonable restrictions on the exercise of the right con- ferred by the said sub-clause. ", "(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the from making any law imposing, in the interests of public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause. ", "(5) Nothing in sub-clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of . ", "(6) 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 restric- tions 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 pro- fession or carrying on any occupation, trade or business.\" ", "Clause (2) specifies the limits up to which the abridge- ment- of the right contained in 19 (1) (a) may be permitted. it is an exception. Similarly clause (3) sets out the limit of abridgement of the right in 19 (1) (b) and clause (4) specifies such limits in respect of the right in 19 (1) (c). Clause (5) is in respect of the rights mentioned in 19 (1) ", "(d), (e) and (f) and clause (6) is in respect of the rights contained in 19 (1) (g). It cannot be disputed that the articles collected under the caption \"Right to Freedom\" have to be considered together to appreciate the extent of the Fundamental Rights. In the first place it is necessary to notice that there is a distinction between rights given to citizens and persons. This is clear on a perusal of the provisions of article 19 on the one hand and articles 20, 21 and 22 on the other. In order to determine whether a right is abridged or infringed it is first necessary to determine the extent of the right given by the articles and the limitations pre- scribed in the articles themselves permitting its curtail- ment. The inclusion of article 13 (1) and (2) in the Con- stitution appears to be a matter of abundant caution. Even in their absence, if any of the fundamental rights was infiringed by any legislative enactment, the has always the power to declare the enactment, to the extent it transgresses the limits, invalid. The existence of article 13 (1) and (2) in the Constitution therefore is not material for the decision of the question what fundamental right is given and to what extent it is permitted to be abridged by the Constitution itself. ", "As the preventive detention order results in the deten- tion 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 argu- ment 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 abridge- ment of the rights connected with each of them, punitive detention under several sections of the Penal Code , e.g., 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, such 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 subclauses. If there is a legislation directly attempting to control a citizen's freedom of speech or expression, 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 legisla- tion 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 subclauses is abridged, the question of the application of article 19 does not arise. The true approach is only to consider the directness of the legisla- tion and not what will be the result of the detention other- wise valid, on the mode of the detenue's life. On that short ground, in my opinion, this argument about the in- fringement of the rights mentioned in article 19 (1) gener- ally must fail. Any other construction put on the article, it seems to me. will be unreasonable. ", "It was next urged that while this interpretation may meet the contention in respect of rights under article 19 (1) (a ), (b ), (c ), (e) and (g ), the right given by article 19 (1) (d) is left untouched. That sub-clause expressly gives the right \"to move freely throughout the territory of India.\" It was argued that by the confinement of the peti- tioner under the preventive detention order his right to move freely throughout the territory of India is directly abridged and therefore the must show that the im- pugned legislation imposes only reasonable restrictions on the exercise of that right in the interests of the general public or for the protection of the interests of , under article 19 (5). The is thus en- joined to inquire whether the restrictions imposed on the detained person are reasonable in the interests of the general public. Article 14 of the Constitution gives the right to equality in these terms: ", "\"The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.\" ", "102 ", "It was argued that the words \"within the territory of India\" are unnecessary in that article because the Parlia- ment is supreme to make laws operative only within the territory of India. Without those words also the article will bear the same meaning. Similarly, it was urged that the words \"territory of India\" in article 19 (1) (d) may be treated as superfluous, and preventive detention would thus be an abridgement of the right to move freely. In my opin- ion, this rule of construction itself is faulty. Because certain words may be considered superfluous (assuming them to be. so in article 14 for the present discussion) it is quite improper to assume that they are superfluous wherever found in the rest of the Constitution. On the contrary, in my opinion, reading sub-clause (d) as a whole the words \"territory of India\" are very important. What is sought to be protected by that sub-clause is the right to freedom of movement, i.e., without restriction, throughout the terri- tory of India. Read with their natural grammatical.. mean- ing the sub-clause only means that if restrictions are sought to be put upon movement of a citizen from State to State or even within a State such restrictions will have to be tested by the permissive limits prescribed in clause (5) of that Article. Sub-clause (d) has nothing to do with detention, preventive or punitive. The Constitution men- tions a right to freedom of movement throughout the territo- ry of India, Every word of that clause must be given its true and legitimate meaning and in the construction of a Statute, particularly a Constitution, it is improper. to omit any word which has a reasonable and proper place in it or to refrain from giving effect to its meaning. This position is made quite clear when clause (5) is read along with this sub-clause. It permits the imposition of reasona- ble. restrictions on the exercise of such right either in the interest of general public or the protection of the interest of . It is difficult to conceive of a reasonable restriction necessary in the interests of the general public for confining a person in a cell. Such restriction may be appropriate to prevent a person from going from one Province to another or one area to another, having regard to local conditions prevailing in particular areas. The point however is made abundantly clear by the alternative, viz., for the protec- tion of the interests of . What protec- tion of the interests of requires the confinement of a man in a cell ? On the other hand, pre- venting the movement of a person from one part of the terri- tory of India to another and the question of reasonable restriction imposed to protect the interests of is clearly intelligible and often noticed in the course of the administration of the country. Scheduled Tribes have certain rights, privileges and also disabili- ties. They have their own civilization, customs and mode of life and prevention of contact with persons or groups with a particular Scheduled Tribe may be considered undesirable during a certain time or in certain conditions. The legis- lative history of India shows that Scheduled Tribes have been given a separate place on these grounds. Reading article 19 as a whole, therefore, it seems to me that it has no application to a legislation dealing with preventive or punitive detention as its direct object. I may point out that the acceptance of the petitioner's argument on the interpretation of this clause will result in the being called upon to decide upon the reasonableness of several provisions of the Indian Penal Code and several other penal legislations as abridging this right. Even under clause (5), the is permitted to apply the test of reasonable- ness of the restrictions or limits not generally, but only to the extent they are either in the interests of the gener- al public, e.g., in case of an epidemic, riot, etc., or for the protection of the interests of . In my opinion, this is not the intention of the Constitution. Therefore the contention urged in respect of article 19 fails. ", "It was argued that article 19 and article 21 should be read together as implementing each other. Article 19 gave substantive rights to citizens while article 21 prescribed that no person can be deprived of his life and personal liberty except by procedure established by law. Even so, on a true construction of article 19 , it seems to me that both preventive and punitive detention are outside the scope of article 19. In order to appreciate the true scope of article 19 it is useful to read it by itself and then to consider how far the other articles in Part HI affect or control its meaning. It is the first article under the caption \"Right to Freedom .\" It gives the rights mentioned in 19 (1) (a) to ", "(g) to all citizens of India. These rights read by them- selves and apart from the controls found in clauses (2) to (6) of the same article, specify the different general rights which a free citizen in a democratic country ordi- narily has. Having specified those rights, each of them is considered separately from the point of view of a similar right in the other citizens, and also after taking into consideration the principle that individual liberty must give way, to the extent it is necessary, when the good or safety of the people generally is concerned. Thus the right to freedom of speech and expression is given by 19 (1) (a). But clause (2) provides that such right shall not prevent the operation of a law which relates to libel, slander, defamation, contempt of or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the . Clause (2) thus only emphasizes that while the individual citizen has a free right of speech or expression, he cannot be permit- ted to use the same to the detriment of a similar right in another citizen or to the detriment of the . Thus, all laws of libel, slander, contempt of or laws in respect of matters which offend against decency or morality are reaffirmed to be operative in spite of this individual right of the citizen to freedom of speech and expression. Simi- larly; that right is also subject to laws which prevent undermining the security of the or against activities which tend to overthrow the . A similar analysis of clauses f3) and (4) shows similar restrictions imposed on similar grounds. In the same way clause (5) also permits reasonable restrictions in the exercise of the right to freedom of movement throughout the territory of India, the right to reside and settle in any part of the territory of India or the right to acquire, hold and dispose of property, being imposed by law provided such reasonable restrictions on the exercise of such right are in the inter- est of the general' public. The Constitution further pro- vides by the same clause that similar reasonable restric- tions could be put on the exercise of those rights for the protection of the interest of . This is obviously to prevent an argument being advanced that while such restriction could be put in the interest of general public, the Constitution did not provide for the imposi- tion of such restriction to protect the interests of a smaller group of people only. Reading article 19 in that way as a whole the only concept appears to be that the specified rights of a free citizen arc thus controlled by what the framers of the Constitution thought were necessary restric- tions in the interest of the rest of the citizens. Reading article 19 in that way it appears to me that the concept of the right to move freely throughout the territo- ry of India is an entirely different concept from the right to \"personal liberty\" contemplated by article 21. \"Person- al liberty\" covers many more rights in one sense and has a restricted meaning in another sense. For instance, while the right to move or reside may be covered by the expression ,'personal liberty\" the right to freedom of speech (men- tioned in article 19 (1) (a)) or the right to acquire, hold or dispose of property (mentioned in 19 (1) (f)) cannot be considered a part of the personal liberty of a citizen. They form part of the liberty of a citizen but the limita- tion imposed by the word \"personal\"leads me to believe that those rights are not covered by the expression personal liberty. So read there is no conflict between articles 19 and 21. The contents and subject matters of articles 19 and 21 are thus not the same and they proceed to deal with the rights covered by their respective words from totally different angles. As already mentioned in respect of each of the rights specified in sub-clauses of article 19 (1) specific limitations in respect of each is provided, while the expression \"personal liberty\" in article 21 is generally controlled by the gener- al expression \"procedure established by law.\" The Constitu- tion, in article 19 , and also in other articles in Part III, thus attempts to strike a balance between individ- ual liberty and the general interest of the society. The restraints provided by the Constitution on the legislative powers or the executive authority of the thus operate as guarantees of life and personal liberty of the individu- als. ", "Deprivation (total loss) of personal liberty, which inter alia includes the right to eat or sleep when one likes or to work or not to work as and when one pleases and sever- al such rights sought to be protected by the expression \"personal liberty\" in article 21 , is quite different from restriction (which is only a partial control) of the right to move freely (which is relatively a minor right of a citizen) as safeguarded by article 19 (1) (d). Deprivation of personal liberty has not the same meaning as restriction of free movement in the territory of India. This is made clear when the provisions of the Criminal Procedure Code in Chapter VIII relating to security of peace or maintenance of public order are read. Therefore article 19 (5) cannot apply to a substantive law depriving a citizen of personal liberty. I am unable to accept the contention that the word \"deprivation\" includes within its scope \"restriction\" when interpreting article 21. Article 22 envisages the law of preventive detention. So does article 9.46 read with Schedule Seven, List I, Entry 9, and List III, Entry 3. Therefore, when the subject of preventive detention is specifically dealt with in the Chapter on Fundamental Rights I do not think it is proper to consider a legisla- tion ' permitting preventive detention as in conflict with the rights mentioned in article 19 (1). Article 19 (1) does not purport to cover all aspects of liberty or of personal liberty. In that article only certain phases of liberty are dealt with. \"Personal liberty\" would primarily mean liberty of the physical body. The rights given under article 19 (1) do not directly come under that description. They are rights which accompany the freedom or liberty of the person. By their very nature they are freedoms of a person assumed to be in full possession of his personal liberty. If article 19 is considered to be the only article safeguarding personal liberty several well-recognised rights, as for instance, the right to eat or drink, the right to work, play, swim and numerous other rights and activities and even the right to life will not be deemed protected under the Constitution. I do not think that is the intention. It seems to me improper to read article 19 as dealing with the same subject as article 21. Article 19 gives the rights specified therein only to the citizens of India while arti- cle 21 is applicable to all persons. The word citizen is expressly defined in the Constitution to indicate only a certain section of the inhabitants of India. Moreover, the protection given by article 21 is very general. It is of \"law\"--whatever that expression is interpreted to mean. The legislative restrictions on the law-making powers of the legislature are not here prescribed in detail as in the case of the rights specified in article 19. In my opinion there- fore article should be read as a separate complete article. Article 21 which is also in Part III under the caption \"Right to Freedom\" runs as follows :- ", "\"No person shall be deprived of his life or personal liberty except according to procedure established by law.\" ", "This article has been strongly relied upon by the peti- tioner in support of his contention that the impugned Act is ultra vires the as it abridges the right given by this article to every person. It was argued that under the Constitution of the United States of America the corre- sponding provision is found in the 5th and 14th Amendments where the provision, inter alia, is \"that no person shall be deprived of his life or liberty or property except by due process of law.\" It was contended for the petitioner that the Indian Constitution gives the same protection to every person in India, except that in the 'United States \"due process of law\" has been .construed by its to cover both substantive and procedural law, while in India only the protection of procedural law is guaranteed. It was contend- ed that the omission of the word \"due\" made no difference to the interpretation of the words in article 21. The word \"established\"' was not equivalent to \"prescribed\". It had a wider meaning. The word \"law\" did not mean enacted law because that will be no 'legislative protection at all. If so construed, any Act passed by the or , which was otherwise within its legislative power, can destroy or abridge this right. On the same line of reasoning, it was argued that if that was the inten- tion there was no necessity to put this as a fundamental right in Part III at all. As to the meaning of the word \"law\" it was argued that it meant principles of natural justice. It meant \"jus\", i.e., law in the abstract sense of the principles of natural justice, as mentioned in standard works of Jurisprudence, and not \"lex\", i.e., enact- ed law. Against the contention that such construction will leave the meaning vague, it was argued that four principles of natural justice recognised in all civilized countries were covered, in any event, by the word \"law\". They are: (1) An objective test, i.e., a certain, definite and ascer- tainable rule of human conduct for the violation of which one can be detained; (2) Notice of the grounds of such detention; (3) An impartial tribunal, administrative, judi- cial or advisory, to decide whether the detention is justi- fied; and (4) Orderly course of procedure, including an opportunity to be heard orally (not merely by making a written representation) with a right to lead evidence and call witnesses. ", "In my opinion, this line of approach is not proper and indeed is misleading. As regards the American Constitution its general structure is noticed in these words in \"The Government of the United States\" by (5th Edition) at page 53: \"The architects of 1787 built only the basement. Their descendants have kept adding walls and windows, wings and gables, pillars and porches to make a rambling structure which is not yet finished. Or, to change the metaphor, it has a fabric which, to use the words of , is still being 'woven on the roaring loom of time'. That is what the framers of the original Constitution intended it to be. Never was it in their mind to work out a final scheme for the government of the country and stereotype it for all time. They sought merely to pro- vide a starting point.\" The same aspect is emphasized in Professor 's book on Constitutional Law and Cooley's Constitutional Limitations. In contrast to the American Constitution, the Indian Constitution is a very detailed one. The Constitution itself provides in minute details the legislative powers of the and . The same feature is noticeable in the case of the judiciary, finance, trade, commerce and services. It is thus quite detailed and the whole of it has to be read with the same sanctity, without giving undue weight to Part III or article 246 , except to the extent one is legitimately and clearly limited by the other. ", "Four marked points of distinction between the clause in the American Constitution and article 21 of the Constitution of India may be noticed at this stage. The first is that in U.S A. Constitution the word \"liberty\" is used simpliciter while in India it is restricted to personal liberty. (2) In U.S.A. Constitution the same protection is given to proper- ty, while in India the fundamental right in respect of property is contained in article 31. (3) The word \"due\" is omitted altogether and the expression \"due process of law\" is not used deliberately. (4) The word \"established\" is used and is limited to \"Procedure\" in Our article 21. The whole argument of the petitioner is rounded on the meaning of the word \"law\" given to it by . It seems unnecessary to embark on a discussion of the powers and jurisdiction of of the 'U.S.A. and how they came to enlarge or abridge the meaning of law in the expression \"due process of law\". Without going into details, I think there is no justification to adopt the meaning of the word \"law\" as interpreted by of U.S.A. in the expression \"due process of law\" merely because the word \"law\" is used in article 21. The discussion of the meaning of \"due process of law\" found in Willis on Constitutional Law and in Constitutional Limitations shows the diverse meanings given to that expression at different times and under dif- ferent circumstances by of U.S.A., so much so that the conclusion reached by these authors is that the expression. means reasonable law according to the view of the majority of the judges of at a particular time holding office. It also shows how the meaning of the expression was widened or abridged in certain decades. Moreover, to control the meaning so given to that expression from time to time the doctrine of police powers was brought into play. That doctrine, shortly put, is that legislation meant for the good of the people generally, and in which the individual has to surrender his freedom to a certain extent because it is for the benefit of the people at large, has not to be tested by the touchstone of the \"due process of law\" formula. ", "Our attention was drawn to the debates and report of the drafting committee of in respect of the wording of this clause. The report may be read not to control the meaning of the article, but may be seen in case of ambiguity. In v. The Commonwealth(1), it was thought that individu- al opinion of members of the expressed in the debate cannot be referred to for the purpose of construing the Constitution. The same opinion was expressed in United States v. ). The result appears to be that while it is not proper to take into consideration the indi- vidual opinions of Members of or to construe the meaning of the particular clause, when a ques- tion is raised whether a certain phrase or expression was up for consideration at all or not, a reference to the debates may be' permitted. In the present case the debates were referred to to show that the expression \"due process of law\" was known to exist in the American Constitution (1) (1904) 1 Com. L.R. 208. (2) (169) U.S 649 at 699. ", "111 ", "and after a discussion was not adopted by in our Constitution. (1), a reference to the proceedings of the which resulted in the passing of the Act was not considered legitimate aid in the construction of a particular section. The same reasons were held as cogent for excluding a reference to such debates in construing an Indian Statute. Resort may be had to these sources with- great caution and only when latent ambiguities are to be resolved. See Craies' Statute Law (4th Edition) page 122, (9th Edition)pp. 28- 29 and (1940 Edition) p. 379, article 214. A perusal of the report of the drafting committee to which our attention was drawn shows clearly that had before it the American article and the expression \"due process of law\" but they deliberately dropped the use of that expression from our Constitution. ", "No extrinsic aid is needed to interpret the words of article 21 , which in my opinion, are not ambiguous.Normally read, and without thinking of other Constitutions, the expression \"procedure established by law\" must mean procedure prescribed by the law of the State. If the Indian Constitution wanted to preserve to every person the protection given by the due process clause of the Ameri- can Constitution there was nothing to prevent the from adopting the phrase, or if they wanted to limit the same to procedure only, to adopt that expression with only the word \"procedural\" prefixed to \"law.\" However, the correct question is what is the right given by article 21 ? The only right is that no person shall be deprived of his life or liberty except according to procedure established by law. One may like that right to cover a larger area, but to give such a right is not the function of the ; it is the function of the Constitution. To read the word \"law\" as meaning rules of natural justice will land one in (1) (1895)L.R. 221. A. 107. 15 difficulties because the rules of natural justice, as re- gards procedure, are nowhere defined and in my opinion the Constitution cannot be read as laying down a vague standard. This is particularly so when in omitting to adopt \"due process of law\" it was considered that the expression \"procedure established by law\" made the standard specific. It can not be specific except by reading the expression as meaning procedure prescribed by the legislature. The word \"law\" as used in this Part has different shades of meaning but in no other article it appears to bear the indefinite meaning of natural justice. If so, there appears no reason why in this article it should receive this peculiar meaning. Article 31 which is also in Part III and relates to the fundamental rights in respect of property runs as follows :- ", "\"No person shall be deprived of his property save by authority of law.\" ", "It is obvious that in that clause \"law\" must mean enact- ed law. The object of dealing with property under a differ- ent article appears more to provide the exceptions found in article 31 (2) to (6), rather than to give the word \"law\" a different meaning than the one given in article 21. The world \"established\" according to the Oxford Dictionary means \"to fix, settle, institute or ordain by enactment or agree- ment.\" The word \"established\" itself suggests an agency which fixes the limits. According to the dictionary this agency can be either the legislature or an agreement between the parties. There is therefore no justification to give the meaning of \"jus\" to \"law\" in article 21. ", "The phrase \"procedure established by law\" seems to be borrowed from article 31 of the Japanese Constitution. But other articles of that Constitution which expressly pre- serve other personal liberties in different clauses have to be read together to determine the meaning of \"law\" in the expression \"procedure established by law.\" These articles of the Japanese Constitution have not been incorporated in the Constitution of India in the same language. It is not shown that the word \"law\" means \"jus\" in the Japanese Constitution. In the Japanese Constitution these rights claimed under the rules of natural justice are not given by the interpretation of the words \"procedure established by law\" in their article 31. The word \"due\" in the expression \"due process of law\" in the American Consti- tution is interpreted to mean \"just,\" according to the opinion of That word imparts jurisdiction to the to pronounce what is \"due\" from otherwise, according to law. The deliberate omission of the word \"due\" from article 21 lends strength to the conten- tion that the justiciable aspect of \"law\", i.e., to consider whether it is reasonable or not by the , does not form part of the Indian Constitution. The omission of the word \"due\", the limitation imposed by the word \"procedure\" and the insertion of the word \"established\" thus brings out more clearly the idea of legislative prescription in the expres- sion used in article 21. By adopting the phrase \"procedure established by law\" the Constitution gave the legislature the final word to determine the law. ", "Our attention was drawn to The King v. The Military Governor of the Hair Park Camp ('), where articles 6 and 70 of the Irish Constitution are discussed. Under article 6 it is provided that the liberty of the person is inviolable and no person shall be deprived of such except \"in accord- ance with law\" ......In article 70 it is provided that no one shall be tried \"save in due course of law\" and extraor- dinary Courts were not permitted to be established except to try military offences. The expres- sion \"in accordance with law\" was interpreted to mean not rules of natural justice but as the law in force at the time. gave the expression \"due course of law\" the meaning given to it according to the English law and not the American law. It was observed by Lord in v. Officer Administering the Government of Nigeria C), that in accordance with British Jurispru- dence no member of the executive can interfere with the liberty or property of a British subject except when he can support the legality of his act before . (1) 2 Irish Reports K.B. 104. (2) A.C. (62 at 670. ", "114 ", " for Home Affairs(1), . observed: \"A man undoubtedly guilty of murder must yet be released if due forms of law have not been followed in his conviction.\" It seems very arguable that in the whole set-up of Part III of our Constitution these principles only remain guaranteed by article 21. A detailed discussion of the true limits of article 21 will not be necessary if article 22 is considered a code to the extent there are provisions therein for preventive detention. In this. connection it may be noticed that the articles in Part III deal with different and separate rights. Under the caption \"Right to Freedom\" articles 19--22 are grouped but each with a separate marginal note. It is obvious that article 22 (1) and (2) prescribe limita- tions on the right given by article 21. If the procedure mentioned in those articles is followed the arrest and detention contemplated by article 22 (1) and (2 ), although they infringe the personal liberty of the individual, will be legal, because that becomes the established legal proce- dure in respect of arrest and detention. Article 22 is for protection against arrest and detention in certain cases, and runs as follows :-- ", "\"22. (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. ", "(2.) Every person who is arrested and detained in custo- dy shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to and no such person shall be detained in custody beyond the said period without the authority of a magistrate. ", "(3) Nothing in clauses (1) and (2) shall apply(a) to any person who for the time being is an enemy alien; or (1) (1923) 2 K.B. 361 at 382. ", "115 ", "(b) to any person who is arrested or detained under any law providing for preventive detention. ", "(4) No law providing for preventive detention shall authorize the detention of a person for a longer period than three months unless- ", "(a) consisting of persons who are, or have been, or are qualified to be appointed as, Judges of , has reported before the expiration of the said period of three months that there is in its opinion suffi- cient cause for such detention: ", "Provided that nothing in this sub-clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by under sub-clause ", "(b) of clause 17); or ", "(b) such person is detained in accordance with the provisions of any law made by under subclauses ", "(a) and (b) of clause (7). ", "(5) When any person is detained in pursuance .of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. ", "Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose. ", "(7) Parliament may by law prescribe- ", "(a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of in accordance with the provisions of sub- clause (a) of clause (4); ", "(b) the maximum period for which any person may ,in any class or classes of cases be detained under any law provid- ing for preventive detention; and ", "(c) the procedure to be followed by in an inquiry under sub-clause (a) of clause (4).\" ", "The learned Attorney-General contended that the subject of preventive detention does not fall under article 21 at all and is covered wholly by article 22. According to him, article 22 is a complete code. I am unable to accept that contention. It is obvious that in respect of arrest and detention article 22 (1) and (2) provide safeguards. These safeguards are excluded in the case of preventive detention by article 22 (3 ), but safe- guards in connection with such detention are provided by clauses (4) to (7) of the same article. It is therefore clear that article 21 has to be read as supplemented by article 22. Reading in that way the proper mode of construc- tion will be that to the extent the procedure is prescribed by article 22 the same is to be observed; otherwise article 21 will apply. But if certain procedural safeguards are expressly stated as not required, or specific rules on certain points of procedure are prescribed, it seems im- proper to interpret these points as not covered by article 22 and left open for consideration under article 21. To the extent the points are dealt with, and included or excluded,, article 22 is a complete code. On the points of procedure which expressly or by necessary implication are not dealt with by article 22 , the operation of article 21 will remain unaffected. It is thus necessary first to look at article 22 (4) to (7) and next at the provisions 0 the impugned Act to determine if the Act or any of its provi- sions are ultra vires. It may be noticed that neither the American nor the Japanese Constitution contain provisions permitting preventive detention,. much less laying down limitations on such right of detention, in normal timeS, i.e., without a declaration of emergency. Preventive deten- tion in normal times,. i.e., without the existence of an emergency like war,. is recognised as a normal topic of legislation in List I. Entry 9, and List III, Entry 3, of the Seventh Schedule. Even in the Chapter on Fundamental Rights article 22 envisages legislation in respect of pre- ventive detention in normal times. The provisions of article 22 (4) to (7) by their very wording leave unaffected the large powers of legislation on this point and emphasize particularly by article 22 (7) the power of the to deprive a person of a right to have his case considered by an advisory board. Part III and. ", "117 ", "article 22 in particular are the only restrictions on that power and but for those provisions the power to legislate on this subject would have been quite unrestricted. Parliament could have made a law without any safeguard or any procedure for preventive detention. Such an autocratic supremacy of the legislature is certainly cut down by article 21. There- fore, if the legislature prescribes a procedure by a validly enacted law and such procedure in the case of preventive detention does not come in conflict with the express provi- sions of Part III or article 22 (4) to (7), the Preventive Detention Act must be held valid notwithstanding that the may not fully approve of the procedure prescribed under such Act. ", " Article 22 (4) opens with a double negative. Put in a positive form it will mean that a law which provides for preventive detention for a period longer than three months shall contain .a provision establishing an advisory board, (consisting of persons with the qualifications mentioned in sub-clause (a)), and which has to report before the expira- tion of three months if in its opinion there was sufficient cause for such detention. This clause, if it stood by itself and without the remaining provisions of article 22 , will apply both to the and the . The proviso to this clause further enjoins that even though the advisory board may be of the opinion that there was sufficient cause for such detention, i.e., detention beyond the period of three months, still the detention is not to be permitted beyond the maximum period, if any, prescribed by under article 22 (7) (b). Again the whole of this sub-clause is made inoperative by article 22 (4) (b) in respect of an Act of preventive detention passed by Parlia- ment under clauses (7) (a) .and (b). Inasmuch as the im- pugned Act is an Act of the purported to be so made, clause 22 (4) has no operation and may for the present discussion be kept aside. Article 22 prescribes that when any person under a preventive detention law is detained, the authority making the order shall, as soon as may be, commu- nicate to such person the grounds on which . the order has been made and shall afford him the earliest opportunity of making a representation against the order. This clause is of general operation in respect of every detention order made under any law permitting deten- tion. Article 22 (6) permits the authority making the order to withhold disclosure of facts which such authority consid- ers against the public interest to disclose. It may be noticed that this clause only permits the non-disclosure of facts, and reading clauses (5) and (6) together a distinc- tion is drawn between facts and grounds of detention. Article 22 (4) and (7) deal not with the period of detention only but with other requirements in the case of preventive detention also. They provide for the establishment of an advisory board, and the necessity of furnishing grounds to the detenue and also to give him a right to make a represen- tation. Reading article 22 clauses (4) and (7) together it appears to be implied that preventive detention for less than three months, without an advisory board, is permitted under the Chapter on Fundamental Rights, provided such legislation is within the legislative competence of the or , as the case may be. Article 22 (5) permits the detained person to make a representation. The Constitution is silent as to the person to whom it has to be made, or how it has to be dealt with. But that is the procedure laid down by the Constitution. It does not therefore mean that if a law made by the in respect of preventive detention does not make provision on those two points it is invalid. Silence on these points does not make the impugned Act in contravention of the Constitution because the first question is what are the rights given by the Constitution in the case of preventive detention. The contention that the representation should be to an outside body has no support in law. Even in the case the representation had to be made to the Secretary of and not to another body. After such representation was made, another advisory board had to consider it, but it was not necessary to make the represen- tation itself to a third party. Article 22 (4) and (7) permit the non-establishment of an advisory board expressly in a parliamentary legislation- ", "119 ", "providing for preventive detention beyond three months. If so, how can it be urged that the nonestablishment of an advisory. board is a fundamental right violated by the procedure prescribed in the Act passed by the ? ", "The important clause to be considered is article 22 (7). Sub-clause (a) is important-for this case. In the case of an Act of preventive detention passed by the this clause contained in the Chapter on Fundamental Rights, thus permits detention beyond a period of three months and ex- cludes the necessity of consulting an advisory board, if the opening words of the sub-clause are complied with. Sub- clause (b) is permissive. It is not obligatory on the to prescribe any maximum period. It was argued that this gives the a right to allow a person to be detained indefinitely. If that construction is correct, it springs out of the words of sub-clause (7) itself and the cannot help in the matter. Subclause (c) permits the to lay down the procedure to be followed by the advisory board in an inquiry under sub-clause (a) of clause (4). I am unable to accept the contention that article 22 (4) (a) is the rule and article 22 (7) the exception. I read them as two alternatives provided by the Constitution for making laws on preventive detention. ", "Bearing in mind the provisions of article 22 read with article 246 and Schedule VII, List I, Entry 9, and List III, Entry 3, it is thus clear that the is empowered to enact a law of preventive detention (a) for reasons connected with defence, (b) for reasons connected with foreign affairs, (c) for reasons connected with the security of India; and (under List III), (d) for reasons connected with the security of a State, (e) for reasons connected with the maintenance of public order, or (f) for reasons connect- ed with the maintenance of supplies and services essential to the community. Counsel for the petitioner has challenged the validity of several provisions of the Act. In respect of the construction of a Constitution Lord in v. The Commonwealth of Australia(1), (1) (1936) A. 0. 578 at 614. ", "16 ", "120 ", "observed that \"a Constitution must not be construed in any narrow and pedantic sense.\" Mr. Justice in Attorney-General of New South Wales v. (1), observed: \"Although we are to interpret words of the Constitution on the same principles of interpretation as we apply to any ordinary law, these very principles of interpretation compel us to take into account the nature and scope of the Act that we are interpreting--to remember that it is a Constitution, a mechanism under which laws are to be made and not a mere Act which declares what the law is to be.\" In In re The Central Provinces and Berar Act XIV of 1938 (\"'), Sir after adopting these observations said: \"especially is this true of a Federal Constitution with its nice balance of jurisdictions. I conceive that a broad and liberal spirit should inspire those whose duty it is to interpret it; but I do not imply by this that they are free to stretch or pervert the lan- guage of the enactment in the interest of any legal or con- stitutional theory or even for the purpose of supplying omissions or of correcting supposed errors.\" There is considerable authority for the statement that the are not at liberty to declare an Act void because in their opinion it is opposed to a spirit supposed to pervade the Constitution but not expressed in words. Where the funda- mental law has not limited, either in terms or by necessary implication, the general powers conferred upon the Legisla- ture we cannot declare a limitation under the notion of hav- ing discovered something in the spirit of the Constitution which is not even mentioned in the instrument. It is diffi- cult upon any general principles to limit the omnipotence of the sovereign legislative power by judicial interposition, except so far as the express words of a written Constitution give that authority. It is also stated, if the words be positive and without ambiguity, there is no authority for a to vacate or repeal a Statute on that ground alone. But it is only in express constitutional provisions limiting legislative power and controlling the temporary will of a majority by a permanent and (1) (1908) 6 Com. L.R. 469 at 611-12. (2) (1939) F.C.R. 18 at 37. ", "121 ", "paramount law settled by the deliberate wisdom of the nation that one can find a safe and. solid ground for the authority of Courts of justice to declare void ,any legislative enact- ment. Any assumption of authority beyond this would be to place in the hands of the judiciary powers too great and too 'indefinite either for its own security. or the protection of private rights. ", "It was first argued that by section 3 the had delegated its legislative power to the executive officer in detaining a person on his being satisfied of its necessi- ty. It was urged that the satisfaction must be of the legislative body. This contention of delegation of the legislative power in such cases has been considered and rejected in numerous cases by our and by . It is unnecessary to refer to all those cases. A reading of the various speeches in v. clearly negatives this contention. Section 3 of the impugned Act is no delegation of legislative power to make laws. It only confers discretion on the officer to enforce the law made by the legislature. Section 3 is also impugned on the ground that it does not provide an objective standard which the can utilize for determining whether the requirements of law have been complied with. It is clear that no such objective standard of conduct can be pre- scribed, except as laying down conduct tending to achieve or to avoid a particular object. For preventive detention action must be taken on good suspicion. It is a subjective test based on the cumulative effect of different actions, perhaps spread over a considerable period. As observed by Lord in The King v. Halliday (2), a is the least appropriate tribunal to investigate the question whether circumstances of suspicion exist warranting the restraint on a person. The contention is urged in respect of preventive detention and not punitive detention. Before a person can be held liable for an offence it is obvious that he should be in a position to know what he may do or not do, and an omission to do or not to do will result in the State (1) (1942) A.C. 2C6. (2) (1917) A.C. 260 at 269. ", "122 ", "considering him guilty according to the penal enactment. When it comes however to preventive detention, the very purpose is to prevent the individual not merely from acting in a particular way but, as the sub-heads summarized above show, from achieving a particular object. It will not be humanly possible to tabulate exhaustively all actions which may lead to a particular object. It has therefore been considered that a punitive detention Act which sufficiently prescribes the objects which the legislature considers have not to be worked up to is. a sufficient standard to prevent the legislation being vague. In my opinion, therefore, the argument of the petitioner against section 3 of the impugned Act fails. It was also contended that section 3 prescribes no limit of time for detention and therefore the legislation is ultra vires. The answer is found in article 22 (7) (b). A perusal of the provisions of the impugned Act moreover shows that in section 12 provision is made for detention for a period longer than three months but not exceeding one year in respect of clauses (a) and (b) of that section. It appears therefore that in respect of the rest of the clauses mentioned in section 3 (1)(a)the detention is not contem- plated to be for a period longer than three months, and in such cases a reference to the advisory board under section 9 is contemplated. ", " Section 7 of the Act which is next challenged, runs on the same lines as article 22 (5) and. (6) and in my opinion infringes no provision of the Constitution. It was argued that this gave only the right of making a representation without being heard 'orally or without affording an opportu- nity to lead evidence and therefore was not an orderly course of procedure, as required by the rules of natural justice. The by the Act has expressly given a right to the person detained under a preventive detention order to receive the grounds for detention and also has given him a right to make a representation. The Act has thus complied with the requirements of article 22 (s). That clause, which prescribes what procedure has to be followed as a matter of fundamental right, is silent about the person detained having a right to be heard orally or by a lawyer. had before them the provisions of clause (1) of the same article. The having dealt with the requirements of receiving grounds and giving an opportunity to make a representation has deliberately refrained from providing a right to be heard orally. If so, I do not read the clause as guarantee- ing such right under article 22 (5). An \"orderly course of procedure\" is not limited to procedure which has been sanc- tioned by settled usage. New forms of procedure are as much, held even by , due process of law as old forms, provided they give a person a fair opportunity to present his case. It was contended that the right to make a representation in article 22 (5) must carry with it a right to be heard by an independent tribunal; otherwise the making of a representation has no substance because it is not an effective remedy. I am unable to read clause (5) of . article 22 as giving a fundamental right to be heard by an independent tribunal. The Constitution deliberately stops at giving the right of representation. This is natural because under article 22 (7 ), in terms, the Constitution permits the making of a law by in which a reference to an advisory board may be omitted. To consider the right to make a representation as necessarily including a right to be heard by an independent judicial, administrative or advisory tribunal will thus be directly in conflict with the express words of article 22 (7). Even according to a right to a judicial trial is not absolute. In the United States v. (1), a question arose about the exclusion from entry into the States, of a Chinese who claimed to be a citizen of the United States. At page 263 the majority judgment con- tains the following passage :--\" If for the purpose of argument, we assume that the Fifth Amendment applies to him, and that to deny entrance to a citizen is to deprive him ,of liberty, we nevertheless are of opinion that with regard to him due process of law does not require judicial trial: That is the result of the cases which we have cited, and the almost necessary result of the (1) (198) U.S. 253 at 263. ", "124 ", "power of the to pass exclusion laws. That the decision may be entrusted to an executive officer, and that his decision is due process of law, was affirmed and ex- plained in several cases. It is unnecessary to repeat the often-quoted remarks of Mr. Justice , speaking for the whole , in v. (1), to. show that the requirement of a judicial trial does not prevail in every case.\" ", "Again, I am not prepared to accept the' contention that a right to be heard orally is an essential right of proce- dure even according to the rules of natural justice. The right to make a defence may be admitted, but there is nothing to support the contention that an oral interview is compulsory. In v. (2), the respondent applied to the constituted under the Housing Act to state a special case for the opinion of , contending that the order was invalid because (1) the report of the Inspector had been treated as a confi- dential document and had not been disclosed to the respond- ent, and (2) because the had declined to give the respondent an opportunity of being heard orally by the person or persons by whom the appeal was finally decided. The rejected the application. Both the points were urged before on appeal. Viscount in his speech rejected the contention about the necessity of an oral hearing by observing \"But it does not follow that the procedure of every tribunal must be.the same. In the case of a Court of law tradition in this country has prescribed certain principles to which, in the main, the procedure must conform. But what that procedure is to be in detail must depend on the nature of a tribunal.\" In rejecting the contention about the disclosure of the report of the Inspector, the Lord Chancellor stated: \"It might or might not have been useful to disclose this report, but I do not think that the was bound to do so. any more than it would have been bound to disclose all the minutes made on the papers in the office before (1) 18 HO.W. 272 at 280. (2) (1915) A.C. 120. ", "125 ", "a decision was come to ...... What appears to me to have been the fallacy of the judgment of the majority in is that it begs the question at the begin- ning by setting up the test of the procedure of instead of the other standard which was laid down for such cases in v. (1). I do not think the Board was bound to hear the respondent orally provided it gave him the opportunities he actually had.\" In spite of the fact that in England the is supreme I am unable to accept the view that the in making laws, legislates against the well-recognised principles of natural justice accepted as such in all civilized countries. The same view is accepted in the United States in v. (2). A right to lead evidence against facts suspected to exist is also not essential in the case of preventive deten- tion. Article 22 (6) permits the non-disclosure of facts. That is one of the clauses of the Constitution dealing with fundamental rights. If even the non-disclosure of facts is permitted, I fail to see how there can exist a right to contest facts by evidence and the noninclusion of such procedural right could make this Act invalid. Section 10 (3) was challenged on the ground that it excludes the right to appear in person or by any lawyer before the advisory board and it was argued that this was an infringement of a fundamental right. It must be noticed that article 22 (1) which gives a detained person a right to consult or be defended by his own legal practitioner is specifically excluded by article 22 (3) in the case of legislation dealing with preventive detention. Moreover,. the is expressly given power under article 22 (7) ", "(c) to lay down the procedure in an inquiry by an advisory board. This is also a part of article 22 itself. If so, how can the omission to give a right to audience be considered ", "-against the constitutional rights ? It was pointed out that section 10 (3) prevents even the disclosure of a (1) (1911) A.C. 179. (2) 337 U.S. 265 at 276. ", "126 ", "portion of the report and opinion of the advisory board.. It was argued that if so how can the detained person put forth his case before a and challenge the conclusions ? This argument was similarly advanced in v. (1) and rejected, as mentioned above. In my opinion, the answer is in the provision found in article 22 (7) (c) of the Constitution of India. ", "It was argued that section 11 of the impugned Act was invalid as it permitted the continuance of the detention for such period as the Central Government or thought fit. This may mean an indefinite period. In my opinion this argument has nos substance because the Act has to be read as a whole., The whole life of the Act is for a year and therefore the argument that the detention may be for an indefinite period is unsound. Again, by virtue of article 22 (7)(b ), the is not obliged to fix the maximum term of such detention. It has not so fixed it, except under section 12 , and therefore it cannot be stated that section 11 is in contravention of article 22 (7). Section 12 of the impugned Act is challenged on the ground that it does not conform to the provisions of article 22 (7). It is argued that article 22 (7) permits preventive detention beyond three months, when the pre- scribes \"the circumstances in which, and the class or class- es of cases in which,\" a person may be detained. It was argued that both these conditions must be fulfilled. In my opinion, this argument is unsound, because the words used in article 22 (7) themselves are against such interpretation. The use of the word \"which\" twice in the first part of the sub-clause, read with the comma put after each, shows that the legislature wanted these to be read as disjunctive and not conjunctive. Such argument might have been possible (though not necessarily accepted) if' the article in the Constitution was \"the circumstances. and the class or class- es of cases in which ...... \"I have. no doubt that by the clause, as worded, the legislature- ", "(1) (1915) A.C. 120. ", "127 ", "intended that the power of preventive detention beyond three months may be exercised either if the circumstances in which, or the class or classes of cases in which, a person is suspected or apprehended to be doing the objectionable things mentioned in the section. This contention therefore fails. ", "It was next contended that by section 12 the had provided that a person might be detained for a period longer than three months but not exceeding one year from the date of his detention, without obtaining the opinion of an advisory board, with a view to prevent him from acting in any manner prejudicial to (a) the defence of India, rela- tions of India with foreign powers or the security of India; or (b)the security of a or the maintenance of public order. It must be noticed that the contingency provided in section 3 (1) (a) (iii), viz., the maintenance of supplies and services essential to the community is omitted in sec- tion 12. Relying on the wording of these two sub-sections in section 12 , it was argued that in the impugned Act the wording of Schedule VII List I, Entry 9, and List III, Entry 3, except the last part, are only copied. This did not comply with the requirement to specify either the circum- stances or the class or classes of cases as is necessary to be done under article 22 (7) of the Constitution. Circum- stances ordinarily mean events or situation extraneous to the actions of the individual concerned, while a class of cases mean determinable groups based on the actions of the individuals with a common aim or idea. Determinable may be according to the nature of the object also. It is obvious that the classification can be by grouping the activities of people or by specifying the objectives to be attained or avoided. The argument advanced on behalf of the petitioner on this point does not' appeal to me because it assumes that the words of Schedule VII List I, Entry 9, and List III, Entry 3 are never capable of being considered as circum- stances or classes of cases. In my opinion, that assumption is not justified, particularly when we have to take into consideration cases of preventive detention and not of conviction and punitive detention. Each of the expressions used in those entries is capable of complying with the requirement of mentioning circumstances or classes of cases. The classification of cases, having regard to an object, may itself amount to a description of the circumstances. It is not disputed that each of the entries in the Legislative Lists in the Seventh Schedule has a specific connotation well understood and ascertainable in law. If so, there appears no reason why the same expression when used in section 12 (1) (a) and (b) of the impugned Act should not be held to have such specific meaning and thus comply with the requirement of prescribing circumstances or classes of cases. This argument therefore must be rejected. Section 13(2) was attacked on the ground that even if a detention order was revoked, another detention order under section 3 might be made against the same person on the same grounds. This clause appears to be inserted to prevent a man being released if a detention order was held invalid on some technical ground. There is nothing in the Chapter on Fundamental Rights and in article 21 or 22 to prevent the inclusion of such a clause in a parliamentary legislation, permitting preventive detention. Article 20 (2) may be read as a contrast on this point. ", "Dealing with the four fundamental principles of natural justice in procedure claimed by the petitioner, it is thus clear that in respect of preventive detention no question of an objective standard of human conduct can be laid down. It is conceded that no notice before detention can be claimed by the very nature of such detention. The argument that after detention intimation of the grounds should be given has been recognised in article 22 (5) and incorporated in the impugned Act. As regards an impartial tribunal, article 22 and (7) read together give the ample discretion. When in specified circumstances and classes of cases the preventive detention exceeds three months, the absence of an advisory board is expressly per- mitted by article 22 (7). Under article 22 (4) it appears implied that a provision for such tribunal is not necessary if the detention is for less than three months. As regards an opportunity to be heard, there is no absolute natural right recognised in respect of oral representation. It has been held to depend on the nature of the tribunal. The right to make a representation is affirmed by the Constitution in article 22 (5) and finds a place in the impugned Act. The right to an orderly course of procedure to the extent it is guaranteed by article 22 (4) read with article 22 (7) (c ), and by article 22 (7) (a) and (b ), has also been thus provided in the Act. It seems to me therefore that the petitioner's contentions even on these points fail. Section 14 was strongly attacked on the ground that it violated all principles of natural justice and even in- fringed the right given by article 22 (5) of the Constitu- tion. It runs as follows: ", "\"14. (1) No shall, except for the purposes of a prosecution for an offence punishable under subsection (2), allow any statement to be made, or any evidence to be given, before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by him against such order; and, notwithstanding anything contained in any other law, no shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such communication or representation made, or the proceedings of or that part of the report of which is confidential. (2) It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of or , as the case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub-section (1): ", "130 ", "Provided that nothing in this sub-section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order.\" ", "By that section the is prevented (except for the purpose of punishment for such disclosure) from being in- formed, either by a statement or by leading evidence, of the substance of the grounds conveyed to the detained person under section 7 on which the order was made, or of any representation made by him against such order. It also prevents the from calling upon any public officer to disclose the substance of those grounds or from the produc- tion of the proceedings or report of the.advisory board which may be declared confidential. It is clear that if this provision is permitted to stand the can have no material before it to determine whether the detention is proper or not. I do not mean whether the grounds are suffi- cient or not. It even prevents the from ascertaining whether the alleged grounds of detention have anything to do with the circumstances or class or classes of cases men- tioned in section 12 (1) (a) or (b). In v. (1), the Federal . held that the can examine the grounds given by the to see if they are relevant to the object which the legislation has in view. The provisions of article 22 (5) do not exclude that right of the . Section 14 of the impugned Act appears to be a drastic provision. which re- quires considerable support to sustain it in a preventive detention Act. The learned Attorney-General urged that the whole object of the section was to prevent ventilation in public of the grounds and the representations, and that it was a rule of evidence only which the could prescribe. I do not agree. This argument is clearly not sustainable on the words of article 22 clauses (5) and (6). The has the right under article 22 (6) not to disclose facts which it considers undesirable to disclose in the public interest. It does not permit the to refrain from disclosing grounds which fall under clause (5). (1) [1949-50] F.C.R. 827. ", "131 ", "Therefore, it cannot successfully be contended that the disclosure of grounds may be withheld from the in public interest, as a rule of evidence. Moreover, the position is made clear by the words of article 22 (5). It provides that the detaining authority shall communicate to such detained person the grounds on which the order has been made. It is there fore ,essential that the grounds must be connected with the order of preventive detention. If they are not so .connected the requirements of article 22 (5) are not ,complied with and the detention order will be invalid. Therefore, it is open to a detained person to contend before a that the grounds on which the order' has been made have no connection at all with the order, or have no connec- tion with the circumstances or class or classes of cases under which a preventive detention order could be supported under section 12 . To urge this argument the aggrieved party must have a right to intimate to the the grounds given for the alleged detention and the representation made by him. For instance, a person is served with a paper on which there are written three stanzas of a poem or three alphabets written in three different ways. For the validity of the detention order it is necessary that the grounds should be those on which the order has been made. If the detained person is not in a position to put before the this paper, the will be prevented from considering whether the requirements of article 22 (5) are complied with and that is a right which is guaranteed to every person. It seems to me therefore that the provisions .of section 14 abridge the right given under article 22 (5) and are there- fore ultra vires. ", "It next remains to be considered how far the invalidity of this section affects the rest of the impugned Act. The impugned Act minus this section can remain unaffected. The omission of this section will not change the nature or the structure or the object of the legislation. Therefore the decision that section 14 is ultra vires does not affect the validity of the rest of the Act. In my opinion therefore Act IV of 1950, except . section 14 , is not ultra vires. It does not infringe any provisions of Part III of the Constitution and the con- tention of the applicant against the validity of that Act except to the extent of section 14 , fails. The petition therefore fails and is dismissed. ", " question to be decided in this case is whether 'the Preventive Detention Act, 1950 (Act IV of 1950), is wholly or in part invalid and whether the peti- tioner who has been detained under that Act is entitled to a writ in the nature of habeas corpus on the ground that his detention is illegal. The question being a pure question of law can he decided without referring to a long chain of facts which are narrated in the petitioner's application to this Court and which have a more direct bearing on the alleged mala fides of the authorities who have detained him than on the validity of the Act. ", " The Act which is impugned was enacted by the on the 26th February, 1950, and will cease to have effect on the 1st April, 1951, save as respects. things done or omit- ted to be done before that date. The main provisions of the Act are set out in sections 7 , 8 , 9 , 10 , 11 , 12 and 14 . Section a (1) provides that \"the Central Government or may- ", "(a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to- ", "(i) the defence of India, the relations of India with foreign powers, or the security of India, or ", "(ii) the security of the or the maintenance of public order, or ", "(iii) the maintenance of supplies and services essential to the community, or ", "(b) if satisfied with respect to any person who is. a foreigner within the meaning of the Foreigners Act , 1946 (XXXI of 1946), that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India, it is necessary so to do, make an order directing that such person be detained.\" ", "Sub-sections (2) and (3) of this section empower a District Magistrate, Sub-Divisional Magistrate or the Com- missioner of Police in a Presidency Town to exercise the power conferred by and make the order contemplated in sub- section (1), but with the qualification that any order made thereunder must be reported forthwith to the of the State to which the .officer in question is subordinate with the grounds on which the order has been made and such other particulars as in his opinion have a bearing on the necessity for the order. Section 7 of the Act provides that the authority making an order of detention shall as soon as may be communicate to the person detained the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order, in a case where such ,order has been made by , to that , and in a case where it has been made by a State or an officer subor- dinate thereto, to the State . Section 8 provides that and each State shall, whenever necessary, constitute one or more advisory boards for the purposes of the Act, and state the qualifications of persons of which the board should consist. Section 9 pro- vides that when a detention order has been made with a view to preventing a person from acting in any manner prejudicial to the maintenance of supplies and services essential to the community or if it is made in regard to a person who is a foreigner within the meaning of the Foreigners Act with a view to regulating his continued presence in India or making arrangements for his expulsion from India, the grounds on which the order has been made and the representation, if any,. of the person detained shall, within six weeks from the date of detention, be placed 'before an advisory regard. It will be noticed that this section does not provide that the cases of persons who are detained under section 3 (1) ", "(a) (i) and (ii) will also be placed before the advisory board. Section 10 lays down the procedure to be followed by. the advisory board and section 11 provides that in any case where the advisory board has reported that there is sufficient cause for the detention of the person concerned, the detention order may be confirmed and the detention of the person concerned may be continued for such period as or , as the case may be, thinks fit. Section 12 ,. which is a very important section, as we shall presently see, runs as follows :-- ", "\"12 (1) Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of for a period longer than three months, but not exceed- ing one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to- ", "(a) the defence of India, relations of India with foreign powers or the security of India; or ", "(b) the security of a or the maintenance of public order. ", "(2) The case of every person detained under a detention order to which the provisions of sub-section (1) apply shall, within a period of six months from the date of his detention, be reviewed where the order was made by the Central Government or a State, Government, by such Govern- ment, and where the order was made by any officer specified in sub-section (2) of section 3 , by to which such officer is subordinate, in consultation with a person who is or has been or is qualified to be appointed as Judge of nominated in that behalf by or , as the case may be.\" ", " Section 14 , which is also a material section for the purpose of this case, is to the following effect :-- ", "\"(1) No shall, except for the purposes of' a prosecution for an offence punishable under subsection (2), allow any statement to be made, or any evidence to be given, before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by him against such order; and, not- withstanding anything contained in any other law, no shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such commu- nication or representation made, or the proceedings of or that part of the report of which is confidential. ", "(2) It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of or , as the case may be, any contents or matter purporting to be the contents of any such communication or representation as is referred to in sub-section (1): ", "Provided that nothing in this sub-section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order.\" ", "The point which has been pressed before us is that the Act is invalid, as it takes away or abridges certain funda- mental rights conferred by Part III of the Constitution of India, and in support of this general proposition, reliance is placed on article 13 (2) which runs as follows :- ", "\"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.\" ", "The rights guaranteed under Part III of the Constitution are classified under seven broad heads, as follows :-- ", "(1) Right to equality; ", "(2) Right to freedom; ", "(3) Right against exploitation; (4) Right to freedom of religion; (5) Cultural and educational rights; (6) Right to property; and (7) Right to constitutional remedies. ", "136 ", "Most of the articles which are said to have been disre- garded occur under the heading \"Right to freedom,\" these articles being articles 19 (1) (d), 21 and 22. Another article which is also said to have been violated is article 32 , under which the present application for a writ of habeas corpus purports to have been made. ", " Article 19 (1) is divided into seven sub-clauses and runs as follows:- ", "\"All citizens shall have the right- ", "(a) to freedom of speech and expression; ", "(b) to assemble peaceably and without arms; ", "(c) to form associations or unions; ", "(d) to move freely throughout the territory of India; ", "(e) to reside and settle in any part of the territory of India; \" ", "(f) to acquire, hold and dispose of property; and ", "(g) to practise any profession, or to carry on any occupation, trade or business.\" ", "Clauses (2), (3), (4), (5) and (6) of this article pro- vide that nothing in clause (1) shall affect the operation of any existing law in regard to the rights under that clause, under certain conditions which are mentioned there- in. Clause (5), with which we are directly concerned and which will serve as a specimen to show the nature of these provisions, is to the following effect :-- ", "\"Nothing in sub-clauses (d), (e) and (f)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, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection 'of the interests of any Scheduled Tribe.\" ", "The contentions advanced on behalf of the petitioner with reference to this article are :--(1) that the Act under which he has been detained deprives him who is a citizen of the Republic of India of the right to move freely throughout the territory of India, which is guaran- teed under article 19 (1) (d ), and (2) that under clause (5) of article 19 , it is open to this Court to judge whether the restrictions imposed by the Act on the exercise of the right conferred by article 19 (1) (d) are reasonable or otherwise. Before dealing with this argument, it is necessary to understand the meaning of the words used in article 19 (1)(d) and to have a clear compre- hension as to the true nature of the right conferred there- under. The contention put forward on behalf of the peti- tioner is that freedom of movement is the essence of person- al liberty and any restraint on freedom of movement must be held to amount to abridgment or deprivation of personal liberty, as the case may be, according to the nature of the restraint. After very careful consideration, I have come to the conclusion that this contention is well-founded in law. in his \"Commentaries on the Laws of England\" (4th Edition, volume 1, page 134) states that \"personal liberty consists in the power of locomotion, of changing .'situation or moving one's person to whatsoever place one's own incli- nation may direct, without imprisonment or restraint unless by due course of law.\" The authority of this state- ment has never been questioned, and it has been bodily incorporated by in his \"Commentaries on the Laws of England\" and has been reproduced by in his well-known treatise on \"Constitutional Limitations\" (8th Edition, volume 1, page 710), which was extensively quoted by both parties in the course of their arguments. The view that freedom of movement is the essence of personal liberty will also be confirmed by reference to any book on the criminal law of England dealing with the offence of false imprisonment or any commentary on the Indian Penal Code dealing with the offences of wrongful restraint or confine- ment. in his book on \"Crimes and Misdemeanours\" (8th Edition, volume 1, page 861), dealing with the offence of false imprisonment states as follows :-- ", "\"False imprisonment is unlawful and total restraint of the personal liberty of another, whether by constraining him or compelling him to go to a particular place or by confin- ing him in a prison or police station or private place, or by detaining him against his will in a public place ........... the essential element in the offence is the unlawful detention of the person or the unlawful restraint on his liberty. Such interference with the liberty of another's movements is unlawful, unless it may be justified ...... \" ", "Again, Dr. in dealing with the offence of wrongful restraint in his book on \"The Penal Law of British India\" (5th Edition, page 1144) observes as follows :-- ", "\"Following the principle that every man's person is sacred and that it is free, law visits with its penalties those who abridge his personal liberty, though he may have no design upon his person. But the fact that he controls its movements for ever so short a time is an offence against the King's peace, for no one has the right to molest another in his free movements.\" ", "Dealing with the offence of wrongful confinement, the same learned author observes as follows at page 1148 of his book :-- ", "\"'Wrongful confinement' is a species of ' wrongful restraint' as defined in the last section. In wrongful restraint, there is only a partial suspension of one's liberty of locomotion, while in wrongful confinement there is a total suspension of liberty 'beyond certain circum- scribing limits'.\" ", "Both these authors speak of restraint on personal liber- ty and interference with the liberty of one's movements or suspension of liberty or locomotion as interchangeable terms. In v. (1), said that \"it is one part of the definition of freedom to be able to go whithersoever one pleases.\" A similar opinion has been expressed by several authors including Sir in his book entitled \"Freedom under the Law.\" There can there- fore be no doubt that freedom of movement is in the last analysis the essence of personal liberty, and just as a man's wealth is generally measured in this country in terms of rupees, annas and pies, one's personal liberty depends upon the extent of his freedom of movement. But it is contended on behalf of the that freedom of move- (1) 7 Q.B. 742. ", "139 ", "ment to which reference has been made in article 19 (1) (d) is not the freedom of movement to which and other authors have referred, but is a different species of freedom which is qualified by the words \"throughout the territory of India.\" How the use of the expression \"throughout the territory of India\" can qualify the meaning of the rest of the words used in the article is a matter beyond my compre- hension. In my opinion, the words \"throughout the territory of India\" were used to stretch the ambit of the freedom of movement to the utmost extent to which it could be guaran- teed by our Constitution. The Constitution could not guar- antee freedom of movement outside the territorial limits of India, and so has used those words to show that a citizen was entitled to move from one corner of the country to another freely and without any obstruction. \"Throughout\" is an amplifying and not a limiting expression, and I am sur- prised to find that the expression \"throughout the territory of India,\" which was used to give the widest possible scope to the freedom of movement, is sought to be construed as an expression limiting the scope and nature of the freedom. In my opinion, the words \"throughout the territory of India,\" having regard to the context in which they have been used here, have the same force and meaning as the expression \"to whatsoever place one's own inclination may direct\" used by , or the expression \"freedom to be ,able to go whithersoever one pleases\" used by in v. (1). I am certain that neither of these authorities contemplated that the freedom of movement which is vouch- safed to a British citizen, is guaranteed beyond the terri- torial limits of British territories. ", "The question as to whether preventive detention is an encroachment on the right guaranteed by article 19 (1) (d) has been considered by the Nagpur, Patna and Calcutta . The view which has .been ultimately adopted by these is that preventive detention is not a violation of the right guaranteed by article 19 (1) (d ), but, in the Calcutta (1) 7 Q.B. 742. ", "140 ", ", where the matter has been elaborately discussed, at least five Judges have held that it does, and in the ultimate analysis the number of Judges. who have held the contrary view appears to be the same. Having regard to the fact that the view expressed by so many learned Judges is opposed to the view I am inclined to take, I consider it necessary to deal briefly with the main objections which have been raised in support of the narrow meaning sought to be attached to the words in article 19 (1)(d). I have already dealt with one of them which is based on the ex- pression \"throughout the territory of India.\" A. nd I shall now proceed to deal with the, others seriatim. I. It will be recalled that clause (5) of article 19 , which I have already quoted in full, provides among other things that nothing in clause (1) (d) shall affect the operation of any law, present or future, imposing reasonable restrictions on the exercise of the right of freedom of movement either in the interests of the general public or for the protection of the interests of any Scheduled Tribe. It has been argued that the use of the words \"interests of any Scheduled Tribe\" in this clause shows that the right guaranteed by article 19 (1) (d) is a limited right of movement, such as the right to visit different localities and to go from one place to another and is different from the expression \"freedom of movement\" which has been stated by to be another name for personal liberty. It is pointed out that the restrictions in contemplation here are mainly restrictions preventing undesirable outsiders from visiting Scheduled Areas and exploiting Scheduled Tribes, and if the words \"freedom of movement\" had been used in the larger sense, such a small matter would not have found a place in clause (5) of article 19.. ", "I must frankly confess that I am unable to appreciate this argument and to hold that a mere reference to Scheduled Tribes affects the plain meaning of the words used in clause (1) (d) of article 19. The words used in article 19 (1) (d) are very wide and mean that a person can go at his will in any direction to any locality and to any distance. Re- straint on a freedom. ", "141 ", "so wide in scope and extent may assume a variety of forms and may include internment or externment of a person, his confinement to a particular locality or within the walls of a prison, his being prevented from visiting or staying in any particular area, etc. The framers of the Constitution wanted to save all restrictive legislation affecting freedom of movement made in the interests of the general public (which expression means the same thing as \"public interests\") and I think that the law in regard to preventive detention is fully covered by the expression \"restrictions imposed in the public interests.\" But they also remembered that there were restrictive laws made in the interests of an important community and that similar laws may have to be made in future and hence they added the words \"for the protection of the interests of any Scheduled Tribe.\" A reference to the Fifth Schedule of the Constitution and the corresponding provisions of the Government of India Act, 1935, as well as to certain laws made for Chota Nagpur, Santhai Pargangs and .other localities will show that great importance has been attached in this country to. the protec- tion and preservation of the members of the scheduled tribes .and maintenance of order in tribal areas, and this, in my opinion, is sufficient to account for the special mention of the scheduled tribes in clause (5). It may, at first sight, appear to be a relatively small matter, but in their anxiety to cover the whole field of restrictive laws made whether in the public interest or in the interests of a particular community and not to leave the smallest loophole, the framers of the Constitution apparently decided to draft the clause in the present form. As far as I am aware, there are no restrictive laws made in the interests of any commu- nity other than the scheduled tribes, and I think clause (5)is sufficiently comprehensive to include the smallest as well as the most complete restrictions on freedom of move- ment. I am also satisfied that the mere mention of sched- uled tribes in clause (5) cannot change, the plain meaning of the words of the main provision which we find in article 19 (1) (d) and confine it to some kind of peculiar and truncated freedom of movement which is unconnected with personal liberty and which is unknown to any Constitution with which. we are familiar: ", "It will perhaps be not out of place to refer in this. connection to Ordinance XIV of 1943, which is one of the ordinances by which the Defence of India Act, 1939, was partly amended. This ordinance provides for-- ", "\"the apprehension and detention in custody of any person whom the authority empowered by the rules to appre- hend or detain as the case may be suspects, on grounds appearing to such authority-to be reasonable, of being of hostile origin, or of having acted, acting, being about to act, or being likely to act in a manner prejudicial to the public safety or interest, the defence of British India, the maintenance of public order, His Majesty's relations with foreign powers or Indian States, the maintenance of peaceful conditions in tribal areas or the efficient prosecution of the war, or with respect to whom such authority is satisfied that his apprehension and detention are necessary for the purpose of preventing him from acting in any such prejudi- cial manner, the prohibition of such person from entering or residing or remaining in any area, and the compelling of such person to reside and remain in any area, or to do or abstain from doing anything.\" ", "The points to be noted in connection with the ordinance are :-- ", "(1) that it is an ordinance specifically providing for apprehension and detention; ", "(2) that notwithstanding the fact that there is a gener- al reference in it to acts prejudicial to public safety or interests and maintenance of public order there is also a specific reference to maintenance of peaceful conditions in tribal areas; ", "(3) that tribal areas and scheduled tribes are, kindred subjects as would appear from the Fifth Schedule appended to the Constitution; and (4) that maintenance of peaceful conditions in tribal areas may be as much in the public interest as in the inter- ests of persons living in those areas. ", "143 ", "This ordinance shows at least this much that sometimes the law of preventive detention can also be made in the interests of scheduled tribes or scheduled areas and conse- quently the mere mention of scheduled tribes in clause (5) does not necessarily exclude laws relating to preventive detention from the scope of article 19 (5) The same remarks apply to the ordinance called \"The Restriction and Detention Ordinance, 1944\" (Ordinance No. III of 1944) which empow- ered the Central Government or to detain and make orders restricting the movements of certain persons in the interest of public safety, maintenance of public order as well as maintenance of peaceful conditions in tribal areas, etc. II. It is also argued that since preventive detention amounts to a total deprivation of freedom of movement, it is not a violation of the right granted under article 19 (1) ", "(d) in regard to which the word \"restriction\" and not \"deprivation\" has been used in clause (5). This argument also does not appeal to me. There are really two questions which fall to be decided in this case, viz., (a) Does pre- ventive detention take away the right guaranteed by article 19 (1) (d)? ; and (b) if so, what are the consequences, if any ? ", "It seems obvious to me that preventive detention amounts to a complete deprivation of the right guaranteed by article (19) (d). The meaning of the word \"restriction\" is to be considered with reference to the second question and I think that it will be highly technical to argue that deprivation of a right cannot be said to involve restriction on the exercise of the right. In my opinion, having regard to the context in which the word \"restriction\" has been used, there is no antithesis between that word and the word \"depriva- tion.\" As I have already stated, restraint on the right to move can assume a variety of forms and restriction would be the most appropriate expression to be' used in clause (5) so as to cover all those forms ranging from total to various kinds of partial deprivation freedom of movement. I will however have to advert to this subject later and will try to show that the construction I have suggested is supported by good authori- ty. ", "III. It appears that some of the Judges who had to deal with the question which we have before us were greatly influenced by the argument that if the deprivation of per- sonal liberty amounts to deprivation of the right granted under article 19 (1) (d ), any conviction for an offence under the Indian Penal Code involving a sentence of impris- onment will be subject to judicial review on the ground of reasonableness of the provisions of the Code under which the conviction is recorded. of has given expression to his concern for the situation which will thereby arise, in these words :-- ", "\"It will be seen that the claim made is very sweeping indeed. It would mean that every law under which a person may be imprisoned, including all the provisions of the Penal Code , is open to examination by the on the ground of reasonableness. It makes the supreme arbiters in regard to any such legislation, and they can reject it-or accept it in accordance with their ideas of whether it appeals to their reason. But ideas of reasonableness or otherwise are apt to vary widely. Take for example, laws relating to prohibition or take such a matter as adultery which the Indian law regards as a crime punishable with imprisonment but the English law does not. It is difficult to believe the framers of the Constitution ever intended to place so enormous a power in the hands of the ................\"[ v. The State of Biharl. The obvious and strictly legal reply to this argument is that the consideration, which has so greatly weighed with the learned Chief Justice, is not enough to cut down the plain meaning of the general words used in article 19 (5) of the Constitution. As has been pointed out in a number of cases, \"in construing enacted words, we are not concerned with the policy involved or with the results injurious or otherwise which may follow by giving effect to the language ", "-used\" [King Emperor v. and others (1)I Apart from this aspect of the matter, I agree with one of the learned Judges Of in his remark that \"no calamitous or untoward result will follow even if the provisions of the Penal Code become justiciable.\" I am certain that no Court would interfere with a Code which has been the law of the land for nearly a century and the provisions of which are not in conflict with the basic principles of any system of law. It seems to me that this Court should not be deterred from giving effect to a fundamental right granted under the Constitution, merely because of a vague and unfounded fear that something catas- trophic may happen. ", "I have so far proceeded on the assumption that the basis of the objection raised by is correct in law, but, in my opinion, it is not. Crime has been defined to consist in those acts or omissions involving breach of a duty to which a sanction is attached by law by way of pun- ishment or pecuniary penalty in the public interests. (See 's \"Crimes and Misdemeanours \"). Section 2 of the Indian Penal Code, 1860, provides that \"every person shall be liable to punishment under this Code' and not otherwise for every act or omission contrary to the provisions there- of, of which he shall be guilty within British India .\" The Indian Penal Code does not primarily or necessarily impose restrictions on the freedom of movement, and it is not correct to say that it is a law imposing restrictions on the right to move freely. Its primary object is to punish crime and not to restrict movement. The punishment may consist in imprisonment or a pecuniary penalty. If it consists in a pecuniary, penalty, it obviously involves no restriction on movement; but if it consists in imprisonment, there is a restriction on movement. This restraint is imposed not under a law imposing restrictions on movement but under a law defining crime and making it punishable. The punishment is correlated directly with the violation of some other person's right and not with the right of (1) F.C.R. 161 at p. 177. ", "146 ", "movement possessed by the offender himself. In my opinion, therefore, the Indian Penal Code does not come within the ambit of the words \"law imposing restriction on the right to move freely \". ", "In the course of the arguments, the expression \"punitive detention\" was frequently used and the tendency was to put it on the same footing as preventive detention for the purpose of certain arguments. Punitive detention is however essentially different from preventive detention. A person is punitively detained only after a trial for committing a crime and after his guilt has been established in a compe- tent Court of justice. A person so convicted can take his case to and sometimes bring it to this Court also; and he can in the course of the proceedings connected with his trial take all pleas available to him including the plea of want of jurisdiction of and the invalidity of the law under which he has been prosecuted. The final judgment in the criminal trial will thus constitute a serious obstacle in his way if he chooses to assert even after his conviction that his right under article 19 (1) (d) has been violated. But a person who is preventively detained has not to face such an obstacle whatever other obstacle may be in his way. ", "IV. It was pointed out that article 19 being confined to citizens, the anomalous situation will follow that in cases of preventive detention, a citizen will be placed in a better position than a non-citizen, because if a citizen is detained his detention will be open to some kind of judicial review under article 19 (5 ), but if a non-citizen has been detained his case will not be open to such review. In this view, it is said that the whole Act relating to preventive detention, may be declared to be void if it is unreasonable, though it concerns citizens as well as persons other than citizens. I must frankly state that I am not at all per- turbed by this argument. It is a patent fact that the Constitution has confined all the rights mentioned in arti- cle 19 (1) to citizens. It is equally clear that restric- tions on those rights are to a limited extent at least open to judicial review- The very same question which is raised in regard to article 19 (1)(d) will arise with regard to most of the other sub-clauses. A citizen has the right to assemble peaceably and without arms, to form associations or unions and so on. If there is any law imposing unreason- able restrictions on any of these rights, that law will not be good law so far as citizens are concerned, but it may be good law so far as non-citizens are concerned. I do not see why a similar situation arising with regard to the right granted under sub-clause (d) should be stated to be anoma- lous. So far as the right of free movement is concerned, a non-citizen has been granted certain protections in articles 21 and 22. If a ,citizen has been granted certain other additional protections under article 19 (1) (d ), there is no anomaly involved in the discrimination. I think that it is conceivable that a certain law may be declared to be void as against a citizen but not against a non-citizen. Such a result however should not affect our mind if it is found to have been clearly within the contemplation of the framers of the Constitution. ", "V. It was contended that the rights declared by article 19 are the rights of a free citizen and if he has already been deprived of his liberty in the circumstances referred to in articles 20, 21 and 22, then it would be idle to say that he still enjoys the right referred to in article 19. After giving my fullest consideration to this argument, I have not been able to appreciate how it arises in this case. There is nothing in article 19 go suggest that it applies only to those cases which do not fall under articles 20, 21 and 22. Confining ourselves to preventive detention, it is enough to point out that a person who is preventively de- tained must have been, before he lost his liberty, a free man. Why can't he say to those who detained him: \"As a citizen I have the right to move freely and you cannot curtail or take away my right beyond the limits imposed by clause (5)of article 19.\" This is the only question which arises in the case and it should not be obscured by any abstruse or metaphysical considerations. It is true that if you put a man under detention, he cannot move and therefore he is not in a position to exercise the right guaranteed under article 19 (1) (d). but this is only the physical aspect of the matter and a person who is bed-ridden on account of disease suffers from a similar disability. In law, however,. physical duress does not deprive a person of the right to freedom of movement. If he has been detained under some provision of law imposing restrictions on the freedom of movement, then the question will arise whether the restrictions are reasonable. If he has been detained under no provision of law or under some law which is invalid, he must be set at liberty. To my mind, the scheme of the Chapter dealing with the fundamental rights does not contemplate what is attributed to it, namely, that each article is a code by itself and is independent of the others. In my opinion, it cannot be said that articles 19, 20, 21 and 22 do not to some extent over- lap each other. The case of a person who is convicted of an offence will come under articles 20 and 21 and also under article 221 so far as his arrest and detention in custody before trial are concerned. Preventive detention, which is dealt with in article 22 , also amounts to deprivation of personal liberty which is referred to in article 21 , and is a violation of the right of freedom of movement dealt with in article 19 (1) (d). That there are other instances of overlapping of articles in the Constitution may be illus- trated by reference to article 19 (1) (f) and article 31 both of which deal with the right to property and to some extent overlap each other. It appears that some learned Judges, who had to deal with the very question before us, were greatly impressed by the statement in the report of on article 15 (corresponding to the present article 21 ), that the word \"liberty\" should be qualified by the insertion of the word \"personal\" before it for otherwise it may be construed very widely so as to include the freedoms dealt with in article 13 (corresponding to the present article ", "19). I am not however prepared to hold that this statement is decisive on the question of the construction of the words used in article 19 (1) (d) which are quite plain and can be construed without any extraneous help. Whether the report of the Drafting Commit- tee and the debates on the floor of the should be used at all in construing the words of a statute, which are words of ordinary and common use and are not used in any technical or peculiar sense, is a debatable question; and whether they can be used in aid of a construction which is a strain upon the language used in the clause to be interpreted is a still more doubtful matter. But, apart from these legal consider- ations, it is, I think, open to us to analyse the statement and see whether it goes beyond adding a somewhat plausible reason--a superficially plausible reason--for a slight verbal change in article 21. It seems clear that the addi- tion of the word \"personal\" before \"liberty\" in article 21 cannot change the meaning of the words used in article 19 , nor can it put a matter which is inseparably bound up with personal liberty beyond its place. Personal liberty and personal freedom, in spite of the use of the word \"personal ,\" are, as we find in several books, sometimes used in a wide sense and embrace freedom of speech, freedom of .asso- ciation, etc. These rights are some of the most valuable phases or elements of liberty and they do not cease to be so by the addition of the word \"personal.\" A general statement by referring to freedom in plural cannot take the place of an authoritative exposition of the meaning of the words used in article 19 (1)(d ), which has not been specifically referred to and cannot be such an overriding consideration as to compel us to put a meaning opposed to reason and authority. The words used in article 19 (1) (d) must be construed as they stand, and we have to decide upon the words themselves whether in the .case of preventive detention the right under article 19 (1) (d) is or is not infringed. But, as I shall point out later, however literally we may construe the words used in article 19 (1) (d) and however restricted may be the meaning we may attribute to those words, there can be no escape from the conclusion that preventive detention is a direct infringe- ment of the right guaranteed in article 19 (1) (d). ", "150 ", "Having dealt with the principal objections, I wish to revert once again to the main topic. The expressions \"per- sonal liberty\" and\" personal freedom\" have, as we find in several books, a wider meaning and also a narrower meaning. In the wider sense, they include not only immunity from arrest and detention but also freedom of speech, freedom of association, etc. In the narrower sense, they mean immunity from arrest and detention. I have shown that the juristic conception of \"personal liberty ,\" when these words are used in the sense of immunity from arrest, is. that it consists in freedom of movement and locomotion. I have also pointed out that this conception is at the root of the criminal law of England and of this country, so far as the offences of false imprisonment and wrongful confinement are concerned. The gravamen of these offences is restraint on freedom of movement. With these facts in view, I have tried to find out whether there is any freedom of movement known in England apart from personal liberty used in the sense of immunity from arrest and detention, but I find no trace of any such freedom. In 's Laws of England (2nd Edition, volume 6, page 391), the freedoms mentioned are the right to per- sonal freedom (or immunity from detention or confinement), the right to property, the right to freedom of speech, the right of public meeting, the right of association, etc. Similar classifications will be found in 's \"Introduc- tion to the Study of the Law of the Constitution\" and 's \"Constitutional Law\" and other books on constitu- tional subjects, but there is no reference anywhere to any freedom or right of movement in the sense in which we are asked to. construe the words used in article 19 (1) (d).. In the Constitutions of America, Ireland and many other countries where freedom is prized, there is no reference to freedom or right of movement as something distinct from personal liberty used in the sense of immunity from arrest and confinement. The obvious explanation is that in legal conception no freedom or right of movement exists apart from what personal liberty connotes and therefore a separate treatment of this freedom was not necessary. It is only in the Constitution of the Free City of Danzig, which covers an area of 701 square miles, that we find these words in article 75 :-- \" All nationals shall enjoy freedom of movement within the City.\" There is however no authoritative opinion available to support the view that this freedom is anything different from what is otherwise called personal liberty. The problem of construc- tion in regard to this particular right in the Constitution of Danzig is the same as in our Constitution. Such being the general position, I am confirmed in my view that the juristic conception that personal liberty and freedom of movement connote the same thing is the correct and true conception, and the words used in article 10 (1) (d) must be construed according to this universally accepted legal conception. ", "This conclusion is further supported by reference to the war legislation in England and in India, upon which the law of preventive detention, which has been in force in this country since the war, is based. In the first world war, passed the Defence of the Realm Consoli- dation Act, in 1914, and a number of regulations were made under it including regulation 14-B, which permitted the Secretary of to subject any person \"to such obliga- tions and restrictions as hereinafter mentioned in view of his hostile origin or associations.\" Lord in refer- ring to this regulation said in v. Sir (1), \"that the regulation undisputedly gave to a Secretary of unrestricted power to detain a suspected person.\" Apparently, Lord meant that the restriction referred to in the Act included preventive detention. Under this regulation, one was interned, and he applied to for a writ of habeas corpus which was refused. The matter ultimately came up before in v. (2), and the noble Lords in dealing with the case proceeded on the assumption that there was no difference between internment and incarceration or imprisonment. Lord in narrating the facts of the case stated :-- ", "(1) [1942] A.C. 238. (2) [1917] A.C. 260. ", "20 ", "152 ", "His person was seized, he has been interned ...... The appellant lost his liberty and was interned ......\" ", "He then proceeded to state that there was no difference between internment and imprisonment and quoted the following passage from :-- ", "\"The confinement of the person, in any wise, is an imprisonment. So that the keeping a man against his will in a private house, putting him in the stocks, arresting or forcibly detaining him in the street, is an imprisonment.\" ", "Proceeding on this footing (which I find to be the common basis in all other speeches delivered in the case, though Lord had given a dissenting judgment), Lord while dealing with the provisions of the regulations observed :-- ", "\"One of the most obvious means of taking precautions against dangers such as are enumerated is to impose some restriction on the freedom of movement of persons whom there may be any reason to suspect of being disposed to help the enemy \"(1). ", "Again, Lord while dealing with the merits of the case made the following observations :-- ", "\"If the legislature chooses to enact that he can be deprived of his liberty and incarcerated or interned for certain things for which he could not have been heretofore incarcerated or interned, that enactment and the orders made under it if intra vires do not infringe upon the Habeas Corpus Acts or take away any right conferred by Magna Charta ...... ,, (2). ", "This passage read with the previous passage quoted by me will show that both internment and incarceration were re- garded as \"restrictions on the freedom of movement \"and that deprivation of liberty and restriction on freedom of move- ment were used as alternative expressions bearing the same meaning. ", "The same conclusion is to be drawn by reference to the regulations made in the last world war under the Emergency Powers (Defence)Act, 1939. The regulation which directly dealt-with detention orders was 18-B. This regulation and a number of other regulations have been placed in Part I under the heading\" Restrictions (1) [1917] A.C. 269. (2) [1917] A.C. 272. ", "153 ", "On movements and activities of persons .\" The classifica- tion is important, because it meets two principal arguments advanced in this case. It shows firstly that detention is a form of restriction and secondly that it is a restriction on movement. I have noticed that\" movement\" is used in plural, and the heading also refers to restrictions on activities, but, having regard to the subjects classified under this head, movement undoubtedly refers to physical movement and includes such movements as entering a particu- lar locality, going from one place to another, etc., i.e., the very things to which article 19 (1) (d) is said to have reference. In 's case, in construing the provi- sions of the Act of 1939, Viscount observed as follows :-- ", "\"The language of the Act of 1939 (above cited) shows beyond doubt that Defence Regulations may be made which must deprive the subject \"whose detention appears to the Secre- tary of to be expedient in the interests of public safety\" of all his liberty of movement while the regulations remain in force\"(1). ", "Thus Viscount also considered detention to be synonymous with deprivation of liberty of movement. The classification that we find in the Defence of the Realm Regulations was with a little verbal modification adopted in the Defence of India Rules, and we find that here also rule 26, which dealt with preventive detention, has been placed under the heading \"Restriction of movements and activities of persons.\" A somewhat similar classification has also been adopted in a series of Provincial Act s and Ordinances relating to maintenance of order [see section 2 of the Bihar Maintenance of Public Order. Act, 1949, section 16 of the West Bengal Security Act, 1948, section 4 of the East Punjab Public Safety Act, 1949, section 2 of the Madras Maintenance of Public Order Act, 1947, section 3 of the U.P. Maintenance of Public Order Temporary Act, 1947, and section 2 of the Bombay Public Security Measures Act, 1947. In these Acts and Ordinances, preventive detention and certain (1) A.C. 219. ", "154 ", "other forms of restriction on movement such as internment, externment, etc. have been classed together and dealt with more or less on the same footing, and sometimes they have been dealt with in different clauses of the same section. In one of the Acts, the same advisory board is to deal with the case of a detenue as well as that of an externed person, and there are also similar provisions giving them the right to represent their case to the Government. ", "I will now assume for the sake of argument that the freedom of movement to which reference is made in article 19 (1) (d) has nothing to do with personal liberty and that the words which occur in the article bear the restricted meaning attributed to them by the learned Attorney-General and some of my colleagues. It seems to me that even on this assump- tion, it is difficult to arrive at any conclusion other than what I have already arrived at. There can be no doubt that preventive detention does take away even this limited free- dom of movement directly and substantially, and, if so, I do not see how it can be argued that the right under article 19 (1) (d) is not infringed if the alternative interpretation is accepted. We have only to ask ourselves: Does a person who is detained retain even a fraction of his freedom of movement in howsoever restricted sense the term may be used and does he not lose his right to move freely from one place to another or visit any locality he likes as a necessary result of his detention ? I think I should refer here once more to the fact that in the Defence of the Realm Regula- tions and Defence of India Rules, preventive detention is classed under the heading \"Restriction of movements and activities.\" \"Movement\" is here used in plural and refers to that very type of movement which is said to be protected by article 19 (1) (d ), moving from one State or place to another, visiting different localities, etc. One of the objects of 'preventive detention is to restrain the person detained from moving from place to. place so that he may not spread disaffection or indulge in dangerous activities in the' places he visits. The same consideration applies to the cases of persons who are interned or externed. Hence, externment, internment and certain other forms of restriction on move- ment have always been treated as kindred matters belonging to the same group or family and the rule which applies to one must necessarily apply to the other. It is difficult to hold that the case of externment can possibly be dealt with on a different footing from the case of preventive deten- tion. I am however interested to find that the Patna and Bombay High Courts have held that a person who is externed can successfully assert that the right granted to him under article 19 (1) (d) has been violated. This view has not been seriously challenged before us, and, if it is correct, I really do not see how it can be held that preventive deten- tion is also not a direct invasion of the right guaranteed in article 19 (1) (d). Perhaps, one may pause here to ask what kind of laws were in contemplation of the framers of the Constitution when they referred to laws imposing re- strictions in the public interest in article 19 (5). I think the war laws and the Provincial Act s and Ordinances to which I have already referred must have been among them, these being laws which expressly purport to impose restrictions on movements. If so, we should not overlook the fact that preventive detention was an inseparable part of these laws and was treated as a form of restriction on movement and classified as such. It seems to me that when the matter is seriously considered, it would be found that the interpreta- tion of the learned Attorney-General attracts the operation of article 13 (2) no less strongly and directly than the interpretation I have suggested, and I prefer the latter only because I consider that it is legally unsound to treat what is inseparably bound up with and is the essential element in the legal concept 1of personal liberty as a wholly separate and unconnected entity. But, as I have already indicated, it will be enough for the purpose of this case if we forget all about personal liberty and remember only that detention is, as is self-evident and as has been pointed out by Viscount and other eminent judges, another name for depriving a person of all his \"liberty of movement.\" ", "It was pointed out in the course of the arguments that preventive detention not only takes away the right in article 19 (1) (d) but also takes away all the other rights guaranteed by article 19 (1 ), except the right to hold, acquire and dispose of property. Where exactly this argu- ment is intended to lead us to, I cannot fully understand, but it seems to me that it involves an obvious fallacy, because it overlooks the difference in the modes in which preventive detention operates on the right referred to in sub-clause (d) and other sub-clauses of article 19 (1). The difference is that while preventive detention operates on freedom of movement directly and inevitably, its operation on the other rights is indirect and consequential and is, often only notional. One who is preventively detained is straightaway deprived of his right of movement as a direct result of his detention, but he loses the other rights only in consequence of his losing freedom of movement. Beside% while freedom of movement is lost by him in all reality and substance, some of the other rights may not be lost until he wishes to exercise them or is interested in exercising them. A person who is detained may not be interested in freedom of association or may not pursue any profession, occupation, trade or business. In such a case, the rights referred to are lost only in theory and not as a matter of substance. I wish only to add that when I said that I was not able to understand the full force of the argument which I have tried to deal with, what I had, in mind was that if preventive detention sweeps away or affects almost all the rights guaranteed in article. 19 (1), the matter deserves very serious consideration and we cannot lightly lay down that article 13 (2) does not come into operation. Being fully alive to the fact that it is a serious matter to be asked to declare a law enacted by to be unconstitutional, I have again and again asked myself the question: What are we to put in the scales against the construction which I am inclined to adopt and in favour of the view that preventive detention does not take away the freedom of movement guaranteed in article 19 (1) (d)? The inevitable answer has always been that while in one of the scales we have plain and unambiguous language, the opinion eminent jurists, judicial dicta of high authority, constitu- tional practice in the sense that no Constitution refers to any freedom of movement apart from personal liberty, and the manner in which preventive detention has been treated in the very laws on which our law on this subject is based, all that we can put in the opposite scale is a vague and ill- rounded apprehension that some fearful object such as the revision of the Penal .Code is looming obscurely in the distant horizon, the peculiar objection that the mere men- tion of the scheduled tribes will alter the meaning of certain plain words, the highly technical and unreal dis- tinction between restriction and deprivation and the assump- tion not warranted by any express provision that a person who is preventively detained cannot claim the right of freedom of movement because he is not a free man and certain other things which, whether taken singly or ,collectively, are too unsubstantial to carry any weight. In these circum- stances, I am strongly of the view that article 19 (1)(d) guarantees the right of freedom of movement in its widest sense, that freedom of movement being the essence of person- al liberty, the right guaranteed under the article is really a right to personal liberty and that preventive detention is a deprivation of that right. I am also of the view that even on the interpretation suggested by the learned Attor- ney-General, preventive detention cannot but be held to be a violation of the right conferred by article 19 ,(1) (d). In either view, therefore, the law of preventive detention is subject to such limited judicial review as is permitted under article 19 (5). The scope of the review is simply to see whether any particular law imposes any unreasonable restrictions. Considering that the restrictions are imposed on a most valuable right, there is nothing revolutionary in 'the legislature trusting to examine whether an Act which infringes upon that right is within the limits of reason. ", "I will now pass on to the consideration of article 21 , which runs as follows :- ", "\"No person shall be deprived of his life or personal liberty except according to procedure established by law.\" ", "Here again, our first step must be to arrive at a clear meaning of the provision. The only words which cause some difficulty in the proper construction of the article are \"procedure established by law.\" ", "The learned Attorney-General contended before us that the word \"law\" which is used in article 21 means State-made law or law enacted by the State. On the other hand, the learned counsel for the petitioner strongly contended that the expression \"procedure established by law\" is used in a much wider sense and approximates in meaning to the expres- sion \"due process of law\" as interpreted by in the earliest times and, if that is so, it means exactly what some of the American writers mean to convey by the expression \"procedural due process.\" ", "In the course of the arguments, the learned Attorney- General referred us to the proceedings in for the purpose of showing that the article as originally drafted contained the words \"without due process of law\" but these words were subsequently replaced by the words \"except according to procedure established by law.\" In my opinion, though the proceedings or discussions in the are not relevant for the purpose of construing the meaning of the expressions used in article 21 , especially when they are plain and unambiguous, they are relevant to show that the intended to avoid the use of the expression \"without due process of law.\" That expression had its roots in the expression \"per legem terrae\" (law of the land) used in Magna Charta in 1215. In the reign of Edward III, 'however, the words \"due process of law\" were used in a statute guaranteeing that no person will be de- prived of his property or imprisoned or indicted or put to death without being brought in to answer by due process of law (28, Edward III, Ch. III). The expression was after- wards adopted in the American Constitution and also in the Constitutions of some of the constituent States, though some of the States preferred to use the words \"in due course of law\" or \"according to the law of the land.\" [See on \"Constitutional Limitations,\" 8th Edn. Vol. II, pages 734-51. In the earliest times, construed \"due process of law\" to cover matters of procedure only, but gradually the meaning of the expression was widened so as to cover substantive law also, by laying emphasis on the word \"due.\" The expression was used in such a wide sense that the judges found it difficult to define it and in one of the cases it was ob- served as follows :-- ", "\"It would be difficult and perhaps impossible to give to those words a definition, at once accurate, and broad enough to cover every case. This difficulty and perhaps impossi- bility was referred to by Mr. Justice in v. New Orleans, where the opinion was expressed that it is wiser to ascertain their intent and application by the 'gradual process of judicial inclusion and exclusion,' as the cases presented for decision shall require, with the reasoning on which such decisions may be rounded:\" v. (1). ", "It seems plain that did not adopt this expression on account of the very elastic meaning given to it, but preferred to use the words \"according to procedure established by law\" which occur in the Japanese Constitution framed in 1946. ", "It will not be out of place to state here in a few words how the Japanese Constitution came into existence. It appears that on the 11th October, 1945. General directed to initiate measures for the preparation of the Japanese Constitution, but, as no progress was made, it was. decided in February, 1946, that the problem of constitutional reform should be taken over by of the Supreme Commander's Headquar- ters. Subsequently the Chief of this Section ,and the staff drafted the Constitution with the help of American constitu- tional lawyers who were called to assist in the task. This Constitution, as a learned writer has remarked, bore (1) 115 U.S. 512 at page 513. ", "21 ", "160 ", "on almost every page evidences of its essentially Western origin, and this characteristic was especially evident in the preamble \"particularly reminiscent of the American Declaration of Independence, a preamble which, it has been observed, no Japanese could possibly have conceived or written and which few could even understand\" [See and 's \"Modern Foreign Governments\"]. One of the character- istics of the Constitution which undoubtedly bespeaks of direct American influence is to be found in a lengthy chap- ter, consisting of 31 articles, entitled \"Rights and Duties of the People,\" which provided for the first time an effec- tive \"Bill of Rights\" for the Japanese people. The usual safeguards have been provided there against apprehension without a warrant and against arrest or detention without being informed of the charges or without adequate cause (articles 33 and 34). ", "Now there are two matters which deserve to be noticed :--(1) that the Japanese Constitution was framed wholly under American influence; and (2) that at the time it was framed the trend of judicial opinion in America was in favour of confining the meaning of the expression \"due process of law\" to what is expressed by certain American writers by the somewhat quaint but useful expression \"proce- dural due process.\" That there was such a trend would be clear from the following passage which I quote from \"The Growth of Constitutional Power in the United States\" (page 107.):-- ", "\"The American history of its interpretation falls into three periods. During the first period, covering roughly the first century of government under the Constitution, due process was interpreted principally as a restriction upon procedure--and largely the judicial procedure--by which the government exercised its powers. During the second period, which, again roughly speaking, extended through 1936, due process was expanded to serve as a restriction not merely upon procedure but upon the substance of the activities in which the government might engage. During the third period, extending from 1936 to date, the use of due process as a substantive restriction has been largely sus- pended or abandoned, leaving it principally in its original status as a restriction upon procedure.\" ", "In the circumstances mentioned, it seems permissible to surmise that the expression \"procedure established by law\" as used in the Japanese Constitution represented the current trend of American judicial opinion with regard to \"due process of law,\" and, if that is so, the expression as used in our Constitution means all that the American writers have read into the words \"procedural due process.\" But I do not wish to base any conclusions upon mere surmise and will try to examine the whole question on its merits. ", "The word \"law\" may be used in an abstract or concrete sense. Sometimes it is preceded by an article such as \"a\" ", "or \"the\" or by such words as \"any,\" \"all,\" ", "etc., and sometimes it is used without any such prefix. But, generally, the word \"law\" has a wider meaning when used in the abstract sense without being preceded by an article. The question to be decided is whether the word \"law\" means nothing more than statute law. ", "Now whatever may be the meaning of the expression \"due process of law,\" the word \"law\" is common to that expression as well as \"procedure established by law\" and though we are not bound to adopt the construction put on \"law\" or \"due process of law\" in America, yet since a number of eminent American Judges have devoted much thought to the subject, I am not prepared to hold that we can derive no help from their opinions and we should completely ignore them. I will therefore in the first instance set out certain quotations from a few of the .decisions of construing the word \"law\" as used in the expression \"due process of law,\" in so far as it bears on the question of legal procedure. ", "(1) \"Although the legislature may at its pleasure provide new remedies or change old ones, the power is never- theless subject to the condition that it cannot remove certain ancient land-marks, or take away certain fundamen- tal rights which have been always recognized and observed in judicial procedures:\" v. (1). ", "(2)' 'By the law of the land is most clearly intended the general law: a law which hears before it condemns, which proceeds upon inquiry and renders judgments only- after trial. The meaning is that every citizen shall hold his life, liberty and property, and immunities under the protection of the general rules which govern society:\" Dartmouth College Case (2). ", "(3) \"Can it be doubted that due process of law signifies a right to be heard in one's defence ? If the legislative department of the government were to enact a statute confer- ring the right to condemn the citizen without any opportuni- ty whatever of being heard, would it be pretended that such an enactment would not be violative of the Constitution ? If this be true, as it undoubtedly is, how can it be said that the judicial department. the source and fountain of justice itself, has yet the authority to render lawful that which if done under express legislative sanction would be viola of the Constitution ? If such power obtains, then the judicial department of the government sitting to uphold and enforce the Constitution is the only one possessing a power to disregard it. If such authority exists then in conse- quence of their establishment, to compel obedience to law and enforce justice, Courts possess the right to inflict the very wrongs which they were created to prevent:\" v. Elliott(3). ", "(4) \"It is a rule as old as the law, and never more to be respected than now, that no one shall be personally bound until he has had his say in , by which is meant, until he has been duly cited to appear, and has been afforded an opportunity to be heard. Judgment without such citation and opportunity wants all the attributes of a judicial determi- nation; it is judicial usurpation and oppression, and can never be upheld where justice is justly administered:\" v. Page(4). ", "Thus, in America, the word \"law\" does not mean merely -made law or law enacted by the and does not exclude certain fundamental principles of (1) 44 Minn. 97; 9 L.R.A. 152. (3) 167 U.S. 409 at page 417. ", "(2) 17 U.S. 4. (4) 85 U.S. 18. ", "163 ", "justice which inhere in every civilized system of law and which are at the root of it. The result of the numerous decisions in America has been summed up by Professor in his book on \"Constitutional Law\" at page 662, in the statement that the essentials of due process are: (1) no- tice, (2) opportunity to be heard, (3) an impartial tribu- nal, and (4) orderly course of procedure. It is pointed out by the learned author that these essentials may assume different forms in different circumstances, and so long as they are conceded in principle, the requirement of law will be fulfilled. For example, a person cannot require any particular form or method of hearing, but all that he can require is a reasonable opportunity to be heard. Similarly, an impartial tribunal does not necessarily mean a judicial tribunal in every case. So far as 'orderly course of proce- dure is concerned, he explains that it does not require a ' to strictly weigh the ,evidence but it does require it to examine the entire record to ascertain the issues, to discover whether there are facts not reported and to see whether or not the law has been correctly applied to facts. The view expressed by other writers is practically the same as that expressed by Professor , though some of them do not expressly refer to the fourth element, viz., orderly course of procedure. The real point however is that these four elements are really different aspects of the same right, viz., the right to be heard before one is condemned. So far as this right is concerned, -judicial opinion in England appears to be the same as that in America. In Eng- land, it would shock one to be told that a man can be de- prived of his personal liberty without a fair trial or hearing. Such a case can happen if the expressly takes away the right in question in an emergency as the British did during// the last two world wars in a limited number of cases. I will refer here to a few cases which show that the fundamental principle that a person whose right is affected must be heard has been observed not only in cases involving personal liberty but also 'in proceedings affecting other rights, even though they may have come before administrative or quasi-judicial tribunals. v. (1)was a case under an Act which empowered to alter or demol- ish a house where the builder had neglected to give notice of his intention. seven days before proceeding to lay or dig the foundation. Acting upon this power, the directed the demolition of a building without notice to the builder, but this was held to be illegal. in dealing with the matter observed as follows :-- ", "\"I conceive they acted judicially, because they had to determine the offence, and they had to apportion the punish- ment as well as the remedy. That being so, a long course of decisions, beginning with Dr. 's case, and ending with some very recent cases, establish that although there are no positive words in a statute requiring that the party-shall be heard, yet the justice of the common law will supply the omission of the legislature. The judgment of Mr. Justice , in Dr. 's case, is somewhat quaint, but it is very applicable, and has been the law from that time to the present. He says, \"The. objection for want of notice can never be got over. The laws of God and man both give the party an opportunity to make his defence, if he has any.\" ", "In the same case observed :-- ", "\"It has been said that the principle that no man shall be deprived of his property without an opportunity of being heard, is limited to a judicial proceeding...... I do not quite agree with that; ......the law, I think, has been applied to many exercises of power which in common under- standing would not be at all more a judicial proceeding than would be the act of in ordering a house to be pulled down.\" ", "The observations made by were quoted and applied by Sir in v. The' Queen (2), and the observations of Lord in v. (3) were to the. same effect. (1) 14 C.B. (N.S.) 180. (2) 3 A.C. 614. ", "(3) 1E.& E. 559. ", "165 ", "A similar opinion was expressed by Sir in v. (1), v. Earl of (2), and v. (3). In the last mentioned case, he observed as follows :-- ", "\"It [ v. (4)] contains a very valuable state- ment by the Lord Chief Baron as to his view of the mode of administering justice by persons other than Judges who have judicial functions to perform which I should have been very glad to have had before me on both those club cases that I recently heard, namely, the case of v. and the case of v. Earl of . The passage I mean is this, referring to a committee: 'They are bound in the exercise of their functions by the rule expressed in the maxim \"audi alteram partem,\" that no man should be condemned to consequences without having the opportunity of making his defence. This rule is not confined to the con- duct of strictly legal' tribunals, but is applicable to every tribunal or body of persons invested with authority to adjudicate upon matters involving civil consequences to individuals '.\" ", "This opinion was quoted with approval by Lord in v. (5). In that case, on an application for pension by the appellant, who had been obliged to resign, , without any judicial inquiry into the circumstances, resolved to refuse the claim on the ground that he was obliged to tender his resignation. This procedure was condemned by Lord as being \"contrary to rules of society and above all contrary to the elementary principles of justice.\" These observations of Lord were referred to and relied on in The King v. Tribunal of Appeal under the Hous- ing Act, 1919 (6). In that case, a company proposed to build a picture house and the local authority having prohibited 'the building, the company appealed under the Housing (1) H. Ch. D. 353. (4) [1874] L.R. 9 Ex. ", "190. (2) 13 Oh. D. 346. (5) [1906] A.C. 535. ", "(3) 14 Ch. D. 471. (6) [1920] I.B. 334. ", "166 ", "(Additional Powers) Act, 1919, which contained a provision that an appeal could in certain cases be properly determined without a hearing and that the appellate Court could dis- pense with the hearing and determine the appeal summarily. It was held that the meaning of rule 7 was that the tribunal on appeal might dispense with an oral hearing, not that they might dispense with a hearing of any kind, and that they were bound to give the appellants a hearing in the sense of an opportunity to make out a case. The Earl of Reading in delivering the judgment observed: ", "\"The principle of law applicable to such a case is well stated by in v. in a passage which is cited with approval by Lord in v. ...... \" ", "In v. ), dismissed an appeal by a person against whom a closing order had been made under Housing, Town Planning, &c. Act, without an oral hearing and without being allowed to see the report made by the 's Inspector upon 'public local inquiry. did not interfere with the order on the ground that the appeal had been dealt with by an administrative authority whose duty was to enforce obligations on the individual in the interests of the commu- nity and whose character was that of an organization with executive functions. The principle however was conceded and lucidly set forth that when the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially, and they must deal with the question referred to them without bias and must give to each of the parties an opportunity of presenting its case, and that the decision must be come to in the spirit and with the sense of respon- sibility of a tribunal whose duty it is to mete out justice. Commenting upon this case, which is generally regarded as an extreme case, Mr. , who afterwards became a member of observes :-- ", "(1) [1915] A.C.120. ", "167 ", "\"I think you would agree that if the subjectmatter of such proceedings as arc here indicated was the liberty of the subject, or indeed his life, you would regard such a judicial procedure as outrageous.\" (See \"Law and Orders,\" page 167). ", "I have particularly referred to cases which were before administrative tribunals, because I have to deal in this case with preventive detention which is said to be an execu- tive act and because I wish to point out that even before executive authorities and administrative tribunals an order cannot generally be passed affecting one's rights without giving one such hearing as may be appropriate to the circum- stances of the case. I have only to add that after enumerating the most important liberties which are recog- nized in England, such as right of personal freedom, right to freedom of speech, right of public meeting, etc., adds :-- ", "\"It seems to me that there should be added to this list the following rights which appear to have become well-estab- lished--the right of the subject to have any case affecting him tried in accordance with the principles of natural justice, particularly the principles that a man may not be a judge in his own cause, and that no party ought to be con- demned unheard, or to have a decision given against him unless he has been given a reasonable opportunity of putting forward his case ...... \"(Halsbury's Laws of England, 2nd Edition, volume 6, page 392). ", "The question is whether the principle that no person can be condemned without a hearing by an impartial tribunal which is well-recognized in all modern civilized systems of law and which Halsbury puts on a par with well-recognized fundamental rights cannot be regarded as part of the law of this country. I must confess that I find it difficult to give a negative answer to this question. The principle being part of the British system of law and procedure which we have inherited, has been observed in this country for a very long the and is also deeply rooted in our ancient history, being the basis of the panchayat system from the earliest times. The whole of the Criminal Procedure Code , whether it deals with trial of offences or with preventive or quasiadministrative measures such as are contemplated in sections 107 , 108 , 109 , 110 and 145 , is based upon the foundation of this principle, and it is difficult to see that it has not become part of the \"law of the land\" and does not inhere in our system of law. If that is so, then \"procedure established by law\" must include this principle, whatever else it may or may not include. That the word \"law\" used in article 21 does not mean only -made law is clear from the fact that though there is no statute laying down the complete procedure to be adopted in contempt of cases, when the contempt is not within the view of the , yet such procedure as now prevails in these cases is part of our law. The statute-law which regulates the procedure of trials and enquiries in criminal cases does not specifically provide for arguments in certain cases, but it has always been held that no decision should be pronounced without hearing arguments. In a number of cases, it has been held that though there may be no specific provision for notice in the statute, the provision must be read into the law. I am aware that some Judges have ex- pressed a strong dislike for the expression \"natural jus- tice\" on the ground that it is too vague and elastic, but where there are well-known principles with no vagueness about them, which all systems of law have respected and recognized, they cannot be discarded merely because they are in the ultimate analysis found to be based on natural jus- tice. That the expression \"natural justice\" is not unknown to our law is apparent from the fact that has in many criminal appeals from this country laid down that it shall exercise its power of interference with the course of criminal justice in this country when there has been a breach of principles of natural justice or departure from the requirements of justice. [See In re (1), v. King Emperor C), v. The (1) 12 A.C. 459. (2) I.L.R. 48 Born. 515. ", "169 ", "King(1), and (2). In the present case, there is no vagueness about the right claimed which is the right to have one's guilt or innocence considered by an impartial body and that right must be read into the words of article 21. Article 21 purports to protect life and person- al liberty, and it would be a precarious protection and a protection not worth having, if the elementary principle of law under discussion which, according to is on a par with fundamental rights, is to be ignored and excluded. In the course of his arguments, the learned counsel for the petitioner repeatedly asked whether the Constitution would permit a law being enacted, abolishing the mode of trial permitted by the existing law and establishing the procedure of trial by battle or trial by ordeal which was in vogue in olden times in England. The question envisages something which is not likely to happen, but it does raise a legal problem which can perhaps be met only in tiffs way that if the expression \"procedure established by law\" simply means any procedure established or enacted by statute it will be difficult to give a negative answer to the question, but ii the word \"law\" includes what I have endeavoured to show it does, such an answer may be justified. It seems to me that there is nothing revolutionary in the doctrine that the words \"procedure established by law\" must include the four principles set out in Professor ' book, which, as I have already stated, are different aspects of the same principle and which have no vagueness or uncertainty about them. These principles, as the learned author points out and as the authorities show, are not absolutely rigid principles but are adaptable to the circumstances of each case within certain limits. I have only to add that it has not been seriously controverted that \"law\" in this article means valid law and \"procedure\" means certain definite rules of proceeding and not something which is a mere pretence for procedure. ", "I will now proceed to examine article 22 of the Consti- tution which specifically deals with the subject (1) A.I.R. 1943P.C. 211. (2) A.I.R. 1919P. C. 108. ", "170 ", "of preventive detention. The first point to be noted in regard to this article is that it does not exclude the operation of articles 19 and 21, and it must be read subject to those two articles, in the same way as articles 19 and 21 must be read subject to article 22. The correct position is that article 22 must prevail in so far as there are specific provisions therein regarding preventive detention, but, where there are no such provisions in that article, the operation of articles 19 and 21 cannot be excluded. The mere fact that different aspects of the same right have been dealt with in three different articles will not make them mutually exclusive except to the extent I have indicated. I will now proceed to analyse the article and deal with its main provisions. In my opinion, the main provisions of this article are :--(1) that no person can be detained beyond three months without the report of an advisory board [clause 4 (a) ]; (2) that the may prescribe the circumstances and the class or classes of cases in which a person may be detained for more than three months without obtaining the opinion of an advisory board [clause 7 (a)]; (3) that when a person is preventively detained, the author- ity making the order of detention shall communicate to such person the grounds on which the order is made and shall afford him the earliest opportunity of making a representa- tion against the order [clause (5) ]; and (4) that the may prescribe the maximum period for which any person may in any class or classes of cases be detained under any law providing for preventive detention [clause 7 ", "(b) ]. The last point does not require any consideration in this case, but the first three points do require considera- tion. ", "In connection with the first point, the question arises as to the exact meaning of the words \"such detention\" occur- ring in the end of clause 4 (a). Two alternative interpre- tations were put forward: (1) \"such detention\" means preven- tive detention; (2) \"such detention\" means detention for a period longer than three months. If the first interpreta- tion is correct, then the function of the advisory board would be to go into the merits of the case of each person and simply report whether there was sufficient cause for his detention. According to the other interpretation, the function of the advisory board will be to report to the government whether there is sufficient cause for the person being detained for more than three months. On the whole, I am inclined to agree with the second interpretation. Prima facie, it is a seri- ous matter to detain a person for a long period (more than three months) without any enquiry or trial. But article 22 (4) (a) provides that such detention may be ordered on the report of the advisory board. Since the report must be directly connected with the object for which it is required, the safeguard provided by the article, viz., calling for a report from the advisory board, loses its value, if the advisory board is not to apply its mind to the vital ques- tion before the government, namely, whether prolonged deten- tion (detention for more than three' months) is justified or not. Under article 22 (4) (a ), the advisory board has to submit its report before the expiry of three months and may therefore do so on the eighty-ninth day. It would be some- what farcical to provide, that after a man has been detained for eighty-nine days, an advisory board is to say whether ' his initial detention was justified. On the other hand, the determination of the question whether prolonged detention (detention for more than three months)is justified must necessarily involve the determination of the question wheth- er the detention was justified at all, and such an interpre- tation only can give real meaning and effectiveness to the provision. The provision being in the nature of a protection or safeguard, I must naturally lean towards the interpreta- tion which is favourable to the subject and which is also in accord with the object in view. ", "The next question which we have to discuss relates to the meaning and scope of article 22 (7)(a) which runs as follows:- ", "\"Parliament may by law prescribe--- ", "(a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preven- tive detention without obtaining the opinion of in accordance with the provisions of sub-clause (a) of clause (4).\" ", "The question is what is meant by \"circumstances\"' and \"class or classes of cases\" used in this provision. This question has arisen because of the way in which these ex- pressions appear to have been interpreted and applied in the Act of with which we are concerned. As the matter is important and somewhat complicated, I shall try to express my meaning as clearly as possible even at the risk of some repetition, and, in doing so, I must necessarily refer to the impugned Act as well as Lists I and III of the Seventh Schedule of the Constitution, under which had jurisdiction to enact it. Item 9 of List I--Union List--shows that the has power to legislate on preventive detention for reasons connected with (1) defence, (2) foreign affairs, and (3) security of India.. Under List III--Concurrent List--the appropriate item is item 3 which shows that law as to preventive detention can be made for reasons connected with (1) the security of the , (2) the maintenance of public order, and (3) the maintenance of supplies and services essential to the community. The impugned Act refers to all the subjects mentioned in Lists I and III in regard to which law of preventive detention can be made. Section 3 (1)of the Act, the substance of which has already been mentioned, is important, and I shall reproduce it verbatim. ", "\" or may- ", "(a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to- ", "(i) the defence of India, the relations of India with foreign powers, or the security of India, or ", "(ii) the security of the or the maintenance of public order, or ", "(iii) the maintenance of supplies and services essen- tial to the community, or ", "(b) if satisfied with respect to any person who is a foreigner within the meaning of the Foreigners Act , 1946 (XXXI of 1946), that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India, it is necessary so to do, make an order directing that such person be detained.\" ", "It will be noticed that all the subjects of legislation concerning preventive detention occurring in item of List I are grouped in sub-clause (1) of clause (a). The subjects in this group are three in number and, for convenience of reference, I shall hereafter refer to them as A, B and C. In sub-.clause (ii), we find grouped two of the matters referred to in item 3 of List III, these being security of the State and the maintenance of public order. These two subjects, I shall refer to as D and E. In sub-clause (iii), reference has been made to the third matter in item 3 of List III, and I shall refer to this subject as F. With this classification, let us now turn to the Constitution itself. On reading articles 22 (4) and 22 (7) together, it would be clear that so long as article 22 (4) (a) holds the field and does not act under clause (7) (a) of article 22 , there must be an advisory board in every case, i.e., if the legislation relates to groups A to F, as it does here, there must be an advisory board for all these groups. Article 22 (7) however practically engrafts an excep- tion. It states in substance that the may by an Act provide for preventive detention for more than three months without reference to an advisory board, but in such cases it shall be incumbent on the to prescribe (1) the circumstances and (2) the class or classes of cases in which such course is found to be necessary. If the case contemplated in clause (4)(a)is the rule and that contem- plated 'in clause (7) (a) is the exception, then the circum- stances and the class or classes of cases must be of a special or extraordinary nature, so as to take the case out of the rule and bring it within the exception. It is always possible to draw the line between the normal or ordinary and the abnormal or extraordinary cases. and this is what, in my opinion, the was expected to do under clause (7) (a). I do not think that it was ever intended that could at its will treat the normal as the abnor- mal or 'the rule as the exception. But this is precisely what has been done in this case- All the items on which preventive legislation is possible excepting one, i.e., A to E, have been put within the exception, and only one, F, which relates to maintenance of supplies and services essen- tial to the community, has been allowed to remain under the rule. In other words, it is provided that there shall be an advisory board only for the last category, F, but no provi- sion having been made for the other categories, A to E, it may be assumed that the advisory board has been dispensed with in those cases. The learned Attorney-General maintained that it would have been open to the to dispense with the advisory board even for the category F, and if such a course had been adopted it would not have affected the validity of the Act. This is undoubtedly a logical position in the sense that it was necessary for him to go as far as this to justify his stand; but, in my opinion, the course adopted by the in enacting section 12 of the impugned Act is not what is contemplated under article 22 (7) (a) or is permitted by it. The circumstances to be prescribed must be special and extraordinary circumstances and the class or classes of cases must be of the same na- ture. In my opinion, the Constitution never contemplated that the should mechanically reproduce all or most of the categories A to F almost verbatim and not apply its mind to decide in what circumstances and in what class or classes of cases the safeguard of an advisory board is to be dispensed with. ", "I may state here that two views are put forward before us as to how clauses (4) (a) and 7 (a) of article 22 are to be read:--(1) that clause (4) (a) lays down the rule that in all cases where detention for more than three months is ordered, it should be done in consultation with and on the report of the advisory board, and clause (7) (a) lays down an exception to this rule by providing that may pass an Act permitting detention for more than three months without reference to an advisory board; (2) that clauses (4)(a) and (7) (a) are independent clauses making two separate and alternative provisions regarding detention for more than three months, in one case on the report of an advisory board and in other case without reference to an advisory board. Looking at the substance and not merely at the words, I am inclined to hold that clause (7) (a) practically engrafts an exception on the rule that preventive detention for more than three months can be ordered only on the report of an advisory board, and so far I have proceeded on that footing. But it seems to me that it will make no difference to the ulti- mate conclusion, whichever of the two views we may adopt. Even on the latter view, it must be recognized that the law which the Constitution enables the to make under article 22 (7) (a) would be an exceptionally drastic law, and, on the principle that an exceptionally drastic law must be intended for an exceptional situation, every word of what I have said so far must stand. Clause (7) (a) is only an enabling provision, and it takes care to provide that the cannot go to the extreme limit to which it is permitted to go without prescribing the class or classes cases and the circumstances to which the extreme law would be applicable. It follows that the class or classes of cases and the circumstances must be of a special nature to require such legislation. ", "It was urged that the word \"and\" which occurs between \"circumstances\" and \"class or classes of cases\" is used in a disjunctive sense and should be read as \"or,\" and by way of illustration it was mentioned that when it is said that a person may do this and that, it means that he is at liberty to do either this or that. I do not think that this argu- ment is sound. I think that clause (7)(a) can be accurately paraphrased somewhat as follows :--\" Parliament may dispense with an advisory board, but in that case it shall prescribe the circumstances and the class or classes of cases ........ \"If this is the meaning, then ' 'and\" must be read as \"and\" and not as \"or\"; and \"may\" must be read as \"shall.\" Supposing it was said that Parliament may prescribe the time and place for the doing of a thing, then can it be suggested that both time and place should not be prescribed ? It seems obvious to me that the class or classes of cases must have some reference to the persons to be detained or to their activities and movements or to both. \"Circumstances\" on the other hand refer to something extra- neous, such as surroundings, background, prevailing condi- tions, etc., which might prove a fertile field for the dangerous activities of dangerous persons. Therefore the provision clearly means that both the circumstances and the class or classes of cases (which are two different expres- sions with different meanings and connotations and cannot be regarded as synonymous) should be prescribed, and prescrip- tion of one without prescribing the other will not be enough. As I have already stated, such law as can be enact- ed under article 22 (7) (a) must involve, by reason of the extreme limit to which it can go, serious consequences to the persons detained. It will mean (1) prolonged detention, i.e., detention for a period longer than three months, and (2) deprivation of the safeguard of an advisory board. Hence article 22 (7) (a) which purports to be a protective provi- sion will cease to serve its object unless it is given a reasonable interpretation. To my mind, what it contemplates is that the law in question must not be too general but its scope should be limited by prescribing both the class or classes of cases and the circumstances. ", "It was contended that the expression \"class or classes of cases\" is wide enough to enable the to treat any of the categories mentioned in Lists I and III, items 9 and 3 respectively, (i.e., any of the categories A to F) as constituting a class. At first sight, it seemed to me to be a plausible argument,, but the more I think about it the more unsound it appears to me. The chief thing to be remem- bered is what I have already emphasized more than once, viz., that a special or extreme type of law must be limited to special classes of cases and circumstances. Under the Constitution, the has to prescribe \"the class or classes,\" acting within the limits of the power granted to it under Lists I and III. The class or classes must be its own prescription and must be so conceived as to justify by their contents the removal of an important safeguard provid- ed by the Constitution. Prescribing is more than a mere mechanical process. It involves a mental effort to select and adapt the thing prescribed to the object for which it has to be prescribed. We find here that what is to be prescribed is \"class or classes\" (and also \"circumstances \"). We also find that what the law intends to provide is prolonged detention (by which words I shall hereafter mean detention for more than three months) and elimination of the advisory board. The class or classes to be prescribed must therefore have a direct bearing on these matters and must be so selected and stated that any one by looking at them may say :--\" That is the reason why the law has prescribed prolonged detention without reference to an advisory board.\" In other words, there must be something to make the class or classes prescribed fit in with an extreme type of legisla- tion--some element of exceptional gravity or menace, which cannot be easily and immediately overcome and therefore necessitates prolonged detention; and there must be some- thing to show that reference to an advisory board would be an undesirable and cumbersome process and wholly unsuitable for the exceptional situation to which the law applies. Perhaps a simple illustration may make the position still clearer. Under the Lists, one of the subjects on which may make a law of preventive detention is \"matter connected with the maintenance of public order.\" The Act simply repeats this phraseology and states in sec- tion 3: \"with a view to preventing him (the person to be detained) from acting in a manner prejudicial to the main- tenance of public order.\" This may be all right for section 3 , but section 12 must go further. An act prejudicial to. the maintenance of public order may be an ordinary act or it may be an act of special gravity. I think that article 22 (7)(a) contemplates that the graver and more heinous types of acts falling within the category of acts prejudicial to the maintenance of public order (or other heads) should be prescribed so as to define and cir- cumscribe the area of an exceptional piece of legislation. That some kind of sub-classification (if I may be per- mitted to use this word) of the categories A to F was possi- ble can be illustrated by reference to regulation 18-]3 of the British Defence of the Realm Regulations. This regula- tion was made under an Act of 1039 which authorized \"the making of regulations for the detention of persons whose detention appears to the Secretary of to be expedient in the interests of public safety or the defence of the realm.\" The two matters \"public safety\" and \"defence of the realm\" are analogous to some of the heads stated in Lists I and III. It will be instructive to note that under these two heads, regulation 18-B has set forth several subheads or class or classes of cases in which preventive detention could be ordered. These classes are much more specific than what we find in section a of the impugned Act and therefore there is less chance of misuse by the executive of the power to order preventive detention. The classes set out are these :--(1) If the Secretary of has reasonable cause to believe any person to be of hostile origin or associa- tions, (2) if the Secretary of has reasonable cause to believe any person to have been recently concerned in acts prejudicial to the public safety or the defence of the realm or in the preparation or instigation of such acts, (3) if the Secretary of has reasonable cause to believe any person to have been or to be a member of, or to have been or to be active in the furtherance of the objects of, any such organization as is hereinafter mentioned ...... (a) the organization is subject to foreign influence or control, (b) the persons in control of the organization have or have had associations with, persons concerned in the government of, or sympathies with the system of government of, any Power with which His Majesty is at war, and in either case there is danger of the utilization of the organization for pur- poses prejudicial to the public safety, etc., (4) if the Secretary of has reasonable cause to believe that the recent conduct of any person for the time being in an area or any words recently written or spoken by such a person expressing sympathy with the enemy, indicates or indicate that person is likely to assist the enemy. I have only to point out that the scope within which preventive detention can be legislat- ed upon in this country is much larger than the scope indi- cated in the British Act under which Regulation 18-B was framed, and therefore there is more scope for specification of the circumstances as well as the class or classes of cases under the impugned Act. But all that has been done is that words which occur in the legislative Lists have been taken and transferred into the Act. ", "What I have stated with regard to class or classes of cases also applies to the circumstances which are also to be prescribed under article 22 (7) (a). These circumstances are intended to supply the background or setting in which the dangerous activities of dangerous persons might prove specially harmful. They must be special circumstances which demand a specially drastic measure and under which reference to an advisory board might defeat the very object of preven- tive action. The evident meaning of article 22 (7) (a) seems to be that the picture will not be complete without mentioning both the classes and the circumstances. There was some discussion at the as to what kind of circumstances might have been specified. It is not for me to answer this question, but I apprehend that an impending rebellion or war, serious disorder in a particular area such as has induced to declare certain areas as \"disturbed areas,\" tense communal situation, prevalence of sabotage or widespread political dacoities and a variety of other matters might answer the purpose the Constitution had in view. ", "I will now try to sum up the result of a somewhat pro- tracted discussion into which I had to enter merely to clarify the meaning of a very important provision of the Constitution which has, in my opinion, been completely misunderstood by the framers of the impugned Act. It appears to me that article 22 deals with three classes of preventive detention :-- ", "(1) preventive detention for three months; ", "(2) preventive detention for more than three months on the report of the advisory board; and (3) preventive detention for more than three months without reference to the advisory board. ", "If one has to find some kind of a label for these class- es for a clear understanding of the subject, one may label them as \"dangerous,\" \"more dangerous\" and \"most danger- ous.\" Now so far as the first two classes are concerned, there is nothing to be prescribed under the Constitution Apparently, the authors of the Constitution were not much concerned about class No. (1), and they thought that in so far as class No. (2) was concerned the provision that a reference to the advisory board was necessary coupled with the provision that detention was not to exceed the maximum period which may be fixed by the was enough. But they did take care to make a special provision for class No. (3), and it is extermly important for the liberty of the subject as well as for the smooth working of the Constitu- tion that this provision should not be lightly treated but should receive a well considered and reasonable construc- tion. It is elementary that the rigour of a law should correspond to or fit the gravity of the evil or danger it aims at combating, and it is also evident that the law which the has been permitted to enact under article 22 (7) (a) can, so far as rigour is concerned, go to the I farthest limit. It follows that the law must have been intended for exceptionally grave situations and exigencies. Hence the authors of the Constitution have made it necessary that the should put certain specifications into the Act which it is empowered to pass under article 22 (7) ", "(a), so that by means of these specifications the necessity for enacting so drastic a law should be apparent on the face of it, and its application should be confined to the classes and circumstances specified. The Act must prescribe (1) \"c]ass or classes of cases\" which are to have reference to the persons. ", "181 ", "against whom the law is to operate and their activities and movements and (2) \"circumstances\" which would bring into prominence the conditions and the backgrounds against which dangerous activities should call for special measures. By means of such two-fold prescription, the sphere for the application of the law will be confined only to a special type of cases--it will be less vague, less open to abuse and enable those who have to administer it to determine objec- tively when a condition has arisen to justify the use of the power vested in them by the law. This, in my opinion, is the true meaning and significance of article 22 (7) (a) and any attempt to whittle it down will lead to deplorable results. ", "Having stated my views as to the construction of article 22 (7) (a ), I propose to consider at once whether section 12 of the impugned Act conforms to the requirements of that provision. In my opinion, it does not, because it fails to prescribe either the circumstances or the class or classes of cases in the manner required by the Constitution. It does not prescribe circumstances at all, and, though it purports to prescribe the class or classes, it does so in a manner showing that the true meaning of the provision from which the derived its power has not been grasped. I have sufficiently dwelt on this part of the case and shall not repeat what I have already said. But I must point out that even if it be assumed that the view advanced by the learned Attorney-General is correct and it was within the competence of to treat any of the categories mentioned in items 9 and 3 of Lists I and III as constitut- ing a class and to include it without any qualification or change, the impugned section cannot be saved on account of a two-fold error :--. (1) the word \"and\" which links \"class or classes\" with \"circumstances\" in article 22 (7) (a) has been wrongly construed to mean \"or ;\" and (2) the distinction between \"circumstances\" and \"class or classes\" has been completely ignored and they are used as interchangeable terms. The first error appears to me to be quite a serious one, because though the Constitution lays down two require- ments and insists on the prescription of circumstances as well as class or classes, it has been assumed in enacting section 12 that prescription of one of them only will be enough. The other error is still more serious and goes to the root of the matter. There can be no doubt that circumstances and class or classes are two different expressions and have different meanings, but the Act proceeds on the assumption that cir- cumstances are identical with class or classes, as will appear from the words \"any person detained in any of the following classes of cases or under any of the following circumstances\" used in the section. I have already shown how important the specification of circumstances is in legislation of such an extreme and drastic character. There- fore, to confuse \"classes\" with \"circumstances\" and to omit to mention \"circumstances\" at all are in my opinion grave errors. There can, in my opinion, be no escape from the conclusion that section 12 of the Act by which a most impor- tant protection or safeguard conferred on the subject by the Constitution has been taken away, is not a valid provision, since it contravenes the very provision in the Constitution under which the derived its competence to enact it. ", "I will now briefly deal with article 22 (5) which makes it incumbent on the authority ordering preventive deten- tion to communicate to the person detained the grounds on which the order has been made and to give him the earliest opportunity of making a representation against the order. It must be remembered that this provision is intended to afford protection to and be a safeguard in favour of a detained person, and it cannot be read as limiting any rights which he has under the law or any other provisions of the Consti- tution. If article 21 guarantees that before a person is deprived of his liberty he must be allowed an opportunity of establishing his innocence before an impartial tribunal, that right still remains. In point of fact, there is no express exclusion of that right in the Constitution and no prohibition against constituting an impartial tribunal. On the other hand, the right to make a representation which has been granted under the Constitution, must carry with it the right to the representation being properly considered by an impartial person or persons. There must therefore be some machinery for properly examining the cases of the detenus and coming to the conclusion that they have not been de- tained without reason. If this right had been expressly taken away by the Constitution, there would have been an end of the matter, but it has not been expressly taken away, and I am not prepared to read any implicit deprivation of such a valuable right. The mere reference to an advisory board in article 22 (4) (a) does not, if my interpretation of the provision is correct, exclude the constitution of a proper machinery for the purpose of examining the cases of detenus on merits. The constitution of an advisory board for the purpose of reporting whether a person should be detained for more than three months or not is a very different thing from constituting a board for the purpose of reporting whether a man should be detained for a single day. In the view I take, all that could do under clause (7) (a) of article 22 was to dispense with an advisory board for the purpose contemplated in clause (4) (a) of that article and not to dispense with the proper machinery, by whichever name it may be called, for the purpose of examining the merits of the case of a detained person. ", "It was argued that article 22 is a code by itself and the whole law of preventive detention is to be found within its four corners. I cannot however easily subscribe to this sweeping statement. The article does provide for some mat- ters of procedure, but it does not exhaustively provide for them. It is said that it provides for notice, an opportuni- ty to the detenu to represent his case, an advisory board which may deal with his case, and for the maximum period beyond which a person cannot be detained. These points have undoubtedly been touched, but it cannot be said that they have been exhaustively treated. The right to represent is given, but it is left to the legislature to provide the machinery for dealing with the representation. The advisory board has been mentioned, but it is only to safeguard detention for a period longer than three months. There is ample latitude still left to the , and if the makes use of that latitude unreasonably, article 19 (5) may enable the to see whether it has transgressed the limits of reasonableness. I will now proceed to deal with the Act in the light of the conclusions I have arrived at. So far as section 3 of the Act is concerned, it was contended that it is most unreasonable, because it throws a citizen at the mercy of certain authorities, who may at their own will order his detention and into whose minds we cannot probe to see wheth- er there is any foundation for the subjective satisfaction upon which their action is to rest. I am however unable to accept this argument. The administrative authorities who have to discharge their responsibilities have to come to quick decisions and must necessarily be left to act on their own judgment. This principle is by no means unreasonable and it underlies all the preventive or quasi administrative measures which are to be found in the Criminal Procedure Code . Under section 107 of that code, it is left to the discretion of the magistrate concerned to determine whether in his opinion there is sufficient ground for proceeding against any person who is likely to occasion a breach of the peace. Under section 145 also, his initial action depends upon his personal satisfaction. Therefore I do not find anything wrong or unconstitutional in section 3 of the Act. But I must point out that it is a reasonable provision only for the first step, i.e., for arrest and initial detention, and must be followed by some procedure for testing the so- called subjective satisfaction, which can be done only by providing a suitable machinery for examining the grounds on which the order of detention is made and considering the representations of the persons detained in relation to those grounds. ", "I do not also find anything radically wrong in section 7 of the Act, which makes it incumbent on the authority con- cerned to communicate to a detenu the grounds on which the order has been made and to afford him the earliest opportunity of making a representa- tion against the order. Section 10 which provides that the advisory board shall make its report within ten weeks from the date of the detention order is in conformity with arti- cle 22 (4) (a) of the Constitution, and the only comment which one can make is that was not obliged to fix such a long period for the submission of a report and could have made it shorter in ordinary cases. The real sections which appear to me to offend the Constitution are sections 12 and 14 . I have already dealt with the principal objec- tion to section 12 , while discussing the provisions of article 22 (7) (a) and I am of the opinion that section 12 does not conform to the provisions of the Constitution and is therefore ultra vires. I also think that even if it be held that it technically complies with the requirements of article 22 (7) (a ), has acted unreasonably in exercising its discretionary power without applying its mind to essential matters and thus depriving the detenus of the safeguard of an advisory board which the Constitution has provided in normal cases. So far as section 14 is con- cerned, all my colleagues have held it to be ultra vires, and, as I agree with the views expressed by them, I do not wish to encumber my judgment by repeating in my own words what has been said so clearly and so well by them. Section 14 may be severable from the other provi- sions of the Act and it may not be possible to grant any relief to the petitioner on the ground that section 14 is invalid. But I think that section 12 goes to the very root of the legislation inasmuch as it deprives a detenu of an essential safeguard, and in my opinion the petitioner is entitled to a writ of habeas corpus on the ground that an essential provision of the Constitution has not been com- plied with. This writ will of course be without prejudice to any action which the authorities may have taken or may hereafter take against the petitioner under the penal law I have to add this qualification because there were allega- tions of his being involved in some criminal cases but the actual facts were not clearly brought out before us. ", "186 ", "I have only to add a few concluding remarks to my judg- ment. In studying the provisions of the impugned Act, I could not help instituting a comparison in my own mind between it and similar legislation in England during the last two world wars. I could not also help noticing that the impugned Act purports to be a peacetime Act, whereas the legislation to which I have referred was enacted during the war. During the first war as well as the second, a number of persons were detained and a number of cases were brought to in connection with their detention, but the two lead- ing cases which will be quoted again and again are v. (1) and v. Sir ). We are aware that in America certain standards which do not conform to ordinary and normal law have been applied by the Judges during the period of the war and sometimes they are compen- dionsly referred to as being included in \"war power.\" The two English cases to which I have referred also illustrate the same principle, as will appear from two short extracts which I wish to reproduce. In v. (3), Lord observed as follows :--\" However precious the personal liberty of the subject may be, there is something for which it may well be, to some extent, sacrificed by legal enactment, namely, national success in the' war, or escape from national plunder or enslavement.\" ", "In v. Sir (4), Lord struck the same note in these words :-- ", "\"The liberty which we so 'justly extol is itself the gift of the law and as recognizes may by the law be forfeited or abridged. At a time when it is the undoubted law of the land that a citizen may by conscription or requisition be compelled to give up his life and all that he possesses for his country's cause it may well be no matter for surprise that there should be confided to the Secretary of a discretionary power of enforcing the relatively mild precaution of detention.\" (1) [1917] A.C.260. (3) [1917] A.C. 260atp. 271. [1942] A.C. 206. (4) [1942] A.C. 206 at p. ", "257. These passages represent the majority view in the two cases, but the very elaborate judgments of Lord in v. and that of Lord in v. Sir show that there. was room for difference of opinion as well as for a more dispassionate treatment of the case and the points involved in it. It is difficult to say that there is not a good substratum of sound law in the celebrat- ed dictum of Lord that even amidst the clash of arms the laws are not silent and that they speak the same lan- guage in war as in peace. However that may be, what I find is that in the regulations made in England during the first war as well as the second war there was an elaborate provi- sion for an advisory board in all cases without any excep- tion, which provided a wartime safeguard for persons de- prived of their liberty. There was also a provision in the Act of 1939 that the Secretary of should report at least once in every month as to the action taken under the regulation including the number of persons detained under orders made thereunder. I find that these reports were printed and made available to the public. I also find that the Secretary of stated in on the 28th January, 1943, that the general order would be to allow British subjects detained under the Regulation to have consultations with their legal advisers out of the hearing of an officer. This order applied to consultations with barristers and solicitors but not to cases where solicitors sent to interview a detained person a clerk who was not an officer of . The impugned Act suffers in com- parison, on account of want of such provisions, though, so far as I can see, no great harm was likely to have been caused by setting up a machinery composed of either adminis- trative or judicial authorities for examining the cases of detained persons so as to satisfy the essentials of fairness and justice. The Act also suffers in comparison with some of the later Provincial Act s in which the safeguard of an advisory board is , expressly provided for. I find that there is a provision in section 12 (2) of the Act for the review of the cases of detenus after six months, but this is quite different from examining the merits of the case. The object of such a review is obviously to find out whether by reason of any change in the circumstances, a review of the original order is required. ", "I hope that in pointing out the shortcomings of the Act I will not be misunderstood. I am aware that both in Eng- land and in America and also in many other countries, there has been a reorientation of the old notions of individual freedom which is gradually yielding to social control in many matters. I also realize that those who run the have very onerous responsibilities, and it is not correct to say that emergent conditions have altogether disappeared from this country. Granting then that private rights must often be subordinated to the public good, is it not essen- tial in a free community to strike a just balance in the matter ? That a person should be deprived of his personal liberty without a trial is a serious matter, but the needs of society may demand it and the individual may often have to yield to those needs. Still the balance between the maintenance of individual rights and public good can be struck only if the person who is deprived of his liberty is allowed a fair chance to establish his innocence, and I do not see how the establishment of an appropriate machinery giving him such a chance can be an impediment to good and just government. ", " is an application under arti- cle 32 of the Constitution of India for releasing the petitioner from detention in jail without trial under directions purporting to be issued by under the Preventive Detention Act, 1950, and it has the distinction of being the first application invoking the guaranteed protection of this as the guardian of Fundamental Rights against alleged infringement of the petitioner's right to freedom of movement. As the case involved issues of great public importance and breaking of new ground it was argued with thoroughness and ability on both sides, reference being made to more or less analogous provisions of the Constitutions of other countries and in particular the Constitution of the United States of America. ", "The petitioner had been under detention previously under orders passed by the said Government under the Madras Main- tenance of Public Order Act, 1947, but as the validity of that Act and all other similar local public safety enact- ments had been questioned in some of in India after the new Constitution came into force, the Par- liament enacted a comprehensive measure called the Preven- tive Detention Act, 1950, (hereinafter referred to as the impugned Act) extending to the whole of India with a certain exception not material here. ", " The Act came into force on 25th February 1950, and, on the 27th February, the Government of Madras, in purported exercise of the powers conferred by the impugned Act and in supersession of earlier orders, directed the detention of the petitioner, and the order was served on him on 1st March. The petitioner contends that the impugned Act and in particular sections 3 , 7 , 10 , 11 , 19 ,, 13 and 14 thereof take away or abridge the fundamental right to freedom of movement in contravention of article 13 (2) of the Constitu- tion and is, therefore, void as declared therein. Article 13 is one of a fasciculus of articles which are comprised in part III of the Indian Constitution headed \"Fundamental Rights.\" This Part forms a new feature of the Constitution and is the Indian \"Bill of Rights.\" It is modelled on the first ten Amendments of the American Con- stitution which declare the fundamental rights of the American citizen. Article 12 , which is the first article in this Part, defines \"the State\" as including the Governments and Legislatures of the Union and the States as well as all local and other authorities against which the fundamental rights are enforceable, and article 13 (1) declares that all existing laws inconsistent with the provisions of Part III shall, to the extent of the inconsistency, be void. Clause (2) of the article, on which the petitioner's con- tention is primarily founded reads as follows: ", "190 ", "\"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.\" ", "As the constitutional inhibition against deprivation or abridgement relates only to \"the rights conferred by this Part,\" it is necessary first to ascertain the nature and extent of the right which, according to the petitioner, Part III has conferred on him, and, secondly, to determine wheth- er the right so ascertained has been taken away or abridged by the impugned Act or by any of its provisions. The first question turns on the proper interpretation of the relevant articles of the Constitution, and the second involves the consideration of the provisions of the impugned Act. ", "Mr. appearing for the petitioner advanced three main lines of argument. In the first place, the right to move freely throughout the territory of India referred to in article 19 (1)(d) is of the very essence of personal liber- ty, and inasmuch as the detention authorised by the impugned Act was not a \"reasonable restriction\" which could validly impose on such right under clause (5) of the article, the impugned Act is void. Alternatively, the petitioner had a fundamental right under article 21 not to be deprived of his personal liberty except according to procedure established by law, and the impugned Act by autho- rising detention otherwise than in accordance with proper procedure took away that right and was therefore void. And, lastly, the provisions of the impugned Act already re- ferred to were ultra vires and inoperative as in enacting them has overstepped the ]imitations placed on its legislative power by article 22 clauses (4) to (7). ", "Accordingly, the first question for consideration is whether article 19 (1) (d) and (5) is applicable to the present case. \"Liberty,\" says , \"consists in doing what one desires. But the liberty' of the individual must be thus far limited--he must not make him- self a nuisance to others.\" Man, as a rational being, desires to do many things, but in a civil society his de- sires have to be controlled, regulated and reconciled with the exercise of similar desires. by other individuals. Liberty has, therefore, to be limited in order to be effectively possessed. Accordingly, article 19 , while guaranteeing some of the most valued phases or elements of liberty to every citizen as civil1 rights, pro- vides for their regulation for the common good by the imposing certain \"restrictions\" on their exercise. The power of locomotion is no doubt an essential element of personal liberty which means freedom from bodily restraint, and detention in jail is a drastic invasion of that liberty. But the question is: Does article 19 , in its setting in Part III of the Constitution, deal with the deprivation of per- sonal liberty in the sense of incarceration ? Sub-clause (d) of clause (1) does not refer to freedom of movement simplic- iter but guarantees the right to move freely \"throughout the territory of India.\" Sub-clause (e) similarly guaran- tees the right to reside and settle in any part of the territory of India. And clause (5) authorises the imposi- tion of \"reasonable restrictions\" on these rights in the interests of the general public or for the protection of the interests of . Reading these provisions together, it is reasonably clear that they were designed primarily to emphasise the factual unity of the territory of India and to secure the right of a free citizen to move from one place in India to another and to reside and settle in any part of India unhampered by any barriers which nar- row-minded provincialism may seek to interpose. The use of the word \"restrictions\" in the various sub-clauses seems to imply, in the context, that the rights guaranteed by the article are still capable of being exercised, and to exclude the idea of incarceration though the words \"restriction\" and \"deprivation\" are sometimes used as interchangeable terms, as restriction may reach a point where it may well amount to deprivation. Read as a whole and viewed in its setting among the group of provisions (articles 19-22) relating to \"Right to -Freedom,\" article 19 seems to my mind to pre--suppose that the citizen to whom the possession of these fundamental rights is secured retains the substratum of personal freedom on which alone the enjoyment of these rights necessarily rests. It was said that subclause (f) would militate against this view, as the enjoyment of the right \"to acquire, hold and dispose of property\" does not depend upon the owner retaining his personal freedom. This assumption is obviously wrong as regards moveable proper- ties, and even as regards immoveables he could not acquire or dispose of them from behind the prison bars; nor could he \"hold\" them in the sense of exercising rights of possession and control over them which is what the word seems to mean in the context. But where, as a penalty for committing a crime or otherwise, the citizen is lawfully deprived of his freedom, there could no longer be any ques- tion of his exercising or enforcing the rights referred to in clause (1). Deprivation of personal liberty in such a situation is not, in my opinion, within the purview of article 19 at all but is dealt with by the succeeding arti- cles 20 and 21. In other words, article 19 guarantees to the citizens the enjoyment of certain civil liberties while they are free, while articles 20-22 secure to all persons--citizens and non-citizens--certain constitutional guarantees in regard to punishment and prevention of crime. Different criteria are provided by which to measure legisla- tive judgments in the two fields, and a construction which would bring within article 19 imprisonment in punishment of a crime committed or in prevention of a crime threatened would, as it seems to me, make a reductio ad absurdum of that provision. If imprisonment were to be regarded as a \"restriction\" of the right mentioned in article 19 (1)(d ), it would equally be a restriction on the rights mentioned by the other subclauses of clause (1), with the result that all penal laws providing for imprisonment as a mode of punish- ment would have to run the gauntlet of clauses (2) to (6) before their validity could be accepted. For instance,the law which imprisons for theft would, on that view, fall to be justified under clause (2) as a law sanctioning restric- tion of freedom of speech and expression. Indeed, of ,in a recent unreport- ed decision brought to our notice applied the test of undermining the security of the or tending to overthrow it in determining the validity or otherwise of the impugned Act. The learned Judges construed article 19 as covering cases of deprivation of personal liberty and held, logically enough, that inasmuch as the impugned Act, by authorising preventive detention, infringed the right to freedom of speech and expression, its validity should be judged by the reservations in clause (2), and, as it failed to stand that test, it was unconstitutional and void. ", "Mr. did not seek to go so far. He drew a dis- tinction between the right conferred by sub-clause (d) and those conferred by the other sub-clauses. He urged, refer- ring to Blackstone's Commentaries, that personal liberty consisted \"in moving one's person to whatever place one's inclination might direct,\" and that any law which de- prived a person of such power of locomotion was a direct invasion of the right mentioned in sub-clause (d), whereas it inter-fered only indirectly and consequentially with the rights mentioned in the other sub Clauses. There is no substance in the distinction suggested. It would be illogi- cal, in construing article 19 , to attribute to one of the sub-clauses a scope and effect totally different from the scope and effect of the others or to draw a distinc-. tion between one right and another in the group. All the rights mentioned in clause (1) are equally essential elements in the liberty of the individual in any civilised and democrat- ic community, and imprison, ment operates as an extinction of all of them alike. It cannot, therefore, be said that deprivation of personal liberty is an infringement of the right conferred by sub-clause (d) alone but not of the others. The learned Judges of realised this and were perfectly logical in holding that the constitutional validity of a law providing for deprivation of personal liberty or imprisonment must be judged by the tests laid down not only in clause (5) of article 19 but also in the other clauses including clause (2), though their major premise that deprivation of personal liberty was a \"restriction\" within the meaning of article 19 is, in my judgment, erroneous. ", "194 ", "It was said that preventive detention being a drasic re- striction of the right to move freely was, in its pith and substance,\" within article 19 (1) (d) read with clause (5) and not within article 21 which deals with crime and its punishment and prevention. There is no room here, in my opinion, for the application of the rule of \"pith and sub- stance.\" As pointed out by in v. , Khulna (1), approving the observations of in v. (2), the rule was evolved by the for determining whether an impugned statute was, in its true character, legislation with respect to matters within the jurisdiction of one legislature or another in a scheme of divided legislative power. No such question arises here. What the has to ascertain is the true scope and meaning of article 19 in the context of Part III of the Constitution, in order to decide whether depriva- tion of personal liberty falls within that article, and the pith and substance rule will be more misleading than helpful in the decision of that issue. Article 19 , as I have already indicated, guarantees protection for the more important civil liberties of citizens who are in the enjoyment of their freedom, while at the same time laying down the re- strictions which the legislature may properly impose on the exercise of such rights, and it has nothing to do with deprivation of personal liberty or imprisonment which is dealt with by the succeeding three articles. There is also another consideration which points to the same conclusion. , to whose Report reference was freely made by both sides during the argument, recommended \"that the word liber- ty should be qualified by the insertion of the word 'person- al ' before it, for otherwise it might be construed very widely so as to include even the freedoms already dealt with in article 13\" (now article 19 ). The acceptance of this suggestion shows that whatever may be the generally accepted (1) 74 I.A. 23. (2) F.C.E. 188. ", "195 ", "connotation of the expression \"personal liberty,\" it was used in article 21 in a sense which excludes the freedoms dealt with in article 19 , that is to say, personal liberty in the context of Part III of the Constitution is something distinct from the freedom to move freely throughout the territory of India. ", "It was further submitted that article 19 declared the substantive rights of personal liberty while article 21 provided the procedural safeguard against their deprivation. This view of the correlation between the two articles has found favour with some of the Judges in which have had occasion to consider the constitutional validity of the impugned Act. It is, however, to be ob- served that article 19 confers the rights therein specified only on the citizens of India, while article 21 extends the protection of life and personal liberty to all persons--citizens and noncitizens alike. Thus, the two articles do not operate in a conterminous field, and this is one reason for rejecting the correlation suggested. Again, if article 21 is to be understood as providing only proce- dural safeguards, where is the substantive right to personal liberty of non-citizens to be found in the Constitution ? Are they denied such right altogether ? If they are to have no right of personal liberty, why is the proce- dural safeguard in article 21 exended to them ? And where is that most fundamental right of all, the right to life, provided for in the Constitution ? The truth is that arti- cle 21, like its American prototype in the Fifth and Four- teenth Amendments of the Constitution of the United States, presents an example of the fusion of procedural and substan- tive rights in the same provision. The right to live, though the most fundamental of all, is also one of the most difficult to define and its protection generally takes the form of a declaration that no person shall be deprived of it save by due process of law or by authority of law. \"Process\" or \"procedure\" in this context connotes both the act and the manner of proceeding to take away a man's life or per- sonal liberty. And the first and essential step in a proce- dure established by law for such deprivation must be a law made by a competent legislature Authorising such deprivation. This brings me to the consid- eration of articles 21 and 22 to which was deroted the greater part of the debate at the . ", "These articles run as follows: ", "\"21. No person shall be deprived of his life or person- al liberty except according to procedure established by law. ", "22. (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest, nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. ", "(2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the Court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate. ", "(3) Nothing in clauses '(1) and (2) shall apply ", "(a) to any person who for the time being is an enemy alien; or ", "(b) to any person who is arrested or detained under any law providing for preventive detention. ", "(4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless- ", "(a) an Advisory Board consisting of persons who, are, or have been, or are qualified to be appointed as, Judges of has reported before the expiration of the said period of three months that there is in its opinion suffi- cient cause for such detention: ", "Provided that nothing in this sub-clause shall' autho- rise the detention of any person beyond the maximum period prescribed by any law made by parliament under sub-clause ", "(b) of clause (7); or ", "(b) such person is detained in accordance with the provisions of any law made by under sub-clauses ", "(a) and (b) of clause (7). ", "197 ", "(5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, commu- nicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. (6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose. ", "(7) Parliament may by law prescribe ", "(a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preven- tive detention without obtaining the opinion of in accordance with the provisions of sub-clause (a) of clause (4); ", "(b) the maximum period for which any person may in any class or classes of cases be detained under any law provid- ing for preventive detention; and ", "(c) the procedure to be followed by in an inquiry under sub-clause (a) of clause (4).\" ", "Mr. urged that the word \"law\" in article 21 should be understood, not in the sense of an enactment but as signifying the immutable and universal principles of natural justice--the jus naturale of the civil law--and that the expression \"procedure established by law\" meant the same thing as that famous phrase \"due process of law\" in the American Constitution in its procedural aspect. Numerous American decisions were cited to show that the phrase implied the basic requirements of (1) an objective and ascertainable standard of conduct to which it is possi- ble to conform, (2) notice to the party of the accusation against him, (3) a reasonable opportunity for him to estab- lish his innocence, and (4) an impartial tribunal capable of giving an unbiased judgment Mr. conceded that these requirements might have to be modified or adapted to suit the nature of the particular proceeding and the object it had in view, as for instance, in a case of preventive detention, previous notice, which might result in the person concerned going underground might be dispensed with Learned counsel insisted that these requirements, being the very core of the principles of natural justice which transcended all State- made laws, must be substantially complied with by any law governing the process of deprivation of life or personal liberty, subject, of course, to any express provision in the Constitution sanctioning their relaxation or dispensation in any case or class of cases. He also appealed to the Pream- ble of the Constitution as the guiding star in its interpre- tation to support his thesis that, in view of the democratic Constitution which the people of India have purported to give themselves guaranteeing to the citizens certain funda- mental rights which are justiciabke, the provisions of Part III must be construed as being paramount to the legislative will, as otherwise the socalled fundamental right to life and personal liberty would have no protection against legis- lative action, and article 13 12 ) would be rendered nugato- ry. ", "There can be no doubt that the people of India have, in exercise of their sovereign will as expressed in the Pream- ble, 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, socalled, I apprehend, because they have been re- tained by the people and made paramount to the delegated powers, as in the American model. (who played a prominent part in framing the First Amendment of the Ameri- can Constitution) pointing out the distinction, due to historical reasons, between the American and the British ways of securing \"the great and essential rights of the people,\" observed \"Here they are secured not by laws para- mount to prerogative but by Constitutions paramount to laws:\" Report on the Virginia Resolutions, quoted in v. Minnesota (1). ", "(1) 283 U.S. 697. ", "109 ", "This has been translated into positive law in Part III of the Indian Constitution, and I agree that in construing these provisions the high purpose and spirit of the Preamble as well as the constitutional significance of a Declaration of Fundamental Rights should be borne in mind. This, howev- er, is not to say that the language of the provisions should be stretched to square with this or that constitutional theory in disregard of the cardinal rule of interpretation of any enactment, constitutional or other, that its spirit, no less than its intendment should be collected primarily from the natural meaning of the words used. ", "Giving full effect to these principles, however, I am unable to agree that the term \"law\" in article 21 means the immutable and universal principles of natural justice. \"Procedure established by law\" must be taken to refer to a procedure which has a statutory origin, for no procedure is known or can be said to have been established by such vague and uncertain concepts as \"the immutable and universal principles of natural justice.\" In my opinion, \"law\" in article 21 means \"positive or -made law.\" ", "No doubt, the American Judges have adopted the other connotation in their interpretation of the due process clause in the Fifth and Fourteenth Amendments of the Ameri- can Constitution (\" Nor shall any person be deprived of life, liberty or property without due process of law \"). But that clause has an evolutionary history behind it. The phrase has been traced back to 28 Edw. III Ch. 3, and in his Institutes identified the term with the expression \"the law of the land\" in the Great Charter of John. Even in England where the legislative omnipotence of is now firmly established, understood these terms as implying an inherent limitation on all legislation,and ruled in Dr. 's Case (1) that \"the common law will control Acts of and sometimes adjudge them to be utterly void when they are against common right and reason.\" Though this doctrine was later discarded in England as being \"a warning (1) 8 Rep. 118 (a). ", "26 ", "200 ", "rather than an authority to be followed\" [per in v. and . (1)] it gained ground m America, at first as a weapon in the hands of the Revolu- tionists with which to resist the laws of , and later as an instrument in the hands of the Judges for estab- lishing the supremacy of the judiciary [see v. (\"')]. In the latter half of the 19th century, this doc- trine of a transcendental common law or natural justice was absorbed in the connotation of the phrase \"due process of law\" occurring in the Fifth and Fourteenth Amendments. By laying emphasis on the word\" due,\" interpreting \"law\" as the fundamental principles of natural justice and giving the words \"liberty\" and \"property\" their widest meaning, the Judges have made the due process clause into a general restriction on all legislative power. And when that power was threatened with prostration by the excesses of due process, the equally vague and expansive doctrine of \"police power,\" i.e., the power of to regulate private rights in public interest, was evolved to counteract such excesses. All this has been criticised as introducing great uncertainty in the state of the law in that country, for no one could be sure how due process of law would affect a particular enactment. A century after the phrase had been the subject of judicial interpretation one learned Judge observed in 1877 that it was incapable of precise definition and that its intent and application could only be ascer- tained by \"the gradual process of inclusion and exclusion\" [ v. New Orleans (3)]and, as recently as 1948, another Judge referred to the difficulty of \"giving defi- niteness to the vague contours of due process\" and \"of spinning judgment upon action out of that gossamer concept:\" v. of Ohio (4). ", "It is not a matter for surprise, therefore, that appointed by recommended the substitution of the expression \"except according to procedure (1) (1871) L.R. 6 C.P. 576, 582. (3) 96 U.S. ", "97. (1798) 3 Dallas 386. (4) 332 U.S. ", "596. established by law\" taken from the Japanese Constitution, 1946, for the words \"without due process of law\" which occurred in the original draft, \"as the former is more specific.\" In their Report the added that they have \"attempted to make these rights (fundamental rights) and the. limitations to which they must necessarily be subject as definite as possible, since the may have to pronounce upon them\" (para. 5). In the face of all these considerations, it is difficult to accept the suggestion that \"law\" in. article 21 stands for the jus naturale of the civil law, and that the phrase \"according to procedure established by law\" is equivalent to due process of law in its procedural aspect, for that would have the effect of introducing into our Constitution those \"subtle and elusive criteria\" implied in that phrase which it was the deliberate purpose of the framers of our Constitution to avoid. On the other hand, the interpretation suggested by the Attorney-General on behalf of the intervener that the ex- pression means nothing more than procedure prescribed by any law made by a competent legislature is hardly more accept- able. \"Established\" according to him, means prescribed, and if or the enacted a proce- dure, however novel and ineffective for affording the ac- cused person a fair opportunity of defending himself, it would be sufficient for depriving a person of his life or personal liberty. He submitted that the Constituent Assem- bly definitely rejected the doctrine of judicial supremacy When it rejected the phrase \"due process of law\" and made the legislative will unchallengeable, provided only \"some procedure\" was laid down. The Indian Constitution having thus preferred the English doctrine of ary supremacy, the phrase \"procedure established by law\" must be construed in accordance with the English view of due process of law, that is to say, any procedure which may choose to prescribe. Learned counsel drew attention to the speeches made by several members of the on the floor of the for explaining, as he put it, the \"his- torical background.\" A speech made in the course of the debate on a bill could at best be indicative of the subjective intent of the speaker, but it could not reflect the inarticulate mental processes lying behind the majority vote which carried the bill. Nor is it reasonable to assume that the minds of all those legislators were in accord. The could only search for the objec- tive intent of the legislature primarily in the words used in the enactment, aided by such historical material as reports of statutory committees, preambles etc. I attach no importance, therefore, to the speeches made by some of the members of the Constituent in the course of the debate on article 15 (now article 21 ). ", "The main difficulty I feel in accepting the construction suggested by the Attorney-General is that it completely stultifies article 13 (2) and, indeed, the very conception of a fundamental right. It is of the essence of that con- ception that it is protected by the fundamental law of the Constitution against infringement by ordinary legislation. It is not correct to say that the Constitution has adopted the doctrine of Parliamentary supremacy. So far, at any rate, as Part III is concerned, the Constitution, as I have already observed, has accepted the American view of funda- mental rights. The provisions of articles 13 and 32 make this reasonably clear. Could it then have been the inten- tion of the framers of the Constitution that the most impor- tant fundamental rights to life and personal liberty should be at the mercy of legislative majorities as, in effect, they would be if \"established\" were to mean merely \"pre- scribed ?\" In other words, as an American Judge said in a similar context, does the constitutional prohibition in article 13 (2) amount to no more than \"You shall not take away life or personal freedom unless you choose to take it away,\" which is mere verbiage. It is no sound answer to say that, if article 21 conferred no right immune from legisla- tive invasion, there would be no question of contravening article 13 (2). The argument seems, to my mind, to beg the question, for it assumes that the article affords no such immunity. It is said that article 21 affords no protection against competent legislative action in the field of substantive criminal law, for there is no provision for judicial review, on the ground of reasonable- ness or otherwise, of such laws, as in the case of the rights enumerated in article 19. Even assuming it to be so the construction of the learned Attorney. General would have the effect of rendering wholly ineffective and illusory even the procedural protection which the article was un- doubtedly designed to afford. It was argued that \"law\" in article 31 which provides that no person shall be deprived of his property \"save by authority of law\" must mean enacted law and that if a person's property could be taken away by legislative action, his right to life and personal liberty need not enjoy any greater immunity. The analogy is mis- leading. Clause (2) of article 31 provides for payment of compensation and that right is justiciable except in the two cases mentioned in clauses (4) and (6) which are of a tran- sitory character. The constitutional safeguard of the right to property in the said article is, therefore, not so illu- sory or ineffective as clause (1) by itself might make it appear, even assuming that\" law\" there means ordinary legis- lation. ", "Much reliance was placed on the Irish case The King v. The Military Governor of Hare Park Camp (1) where the Court held that the term \"law\" in article 6 of the Irish Constitu- tion of 1922 which provides that \"the liberty of the person is inviolable and no person shall be deprived of his liberty except in accordance with law\" meant a law enacted by the , and that therefore the Public Safety Act of 1924 did not contravene the Constitution. The Court followed The King v. Halliday(2) where by a majority held that the Defence of the Realm (Consolidation) Act, 1914, and the Regulations framed thereunder did not infringe upon the Habeas Corpus Acts and the Magna Carta \"for the simple reason that the Act and the Orders become part of the law of the land.\" But that was because, as Lord pointed out \"the British Constitution has entrusted to the two Houses of parliament subject to the assent (1) [19241 2 I.R. 104. (2) A.C. ", "260. of the King, an absolute power untrammelled by any written instrument obedience to which may be compelled by some judicial body,\" whereas the Irish Constitution restricted the legislative powers of by a formal declaration of funda mental rights and by providing for a judicial review of legislation in contravention of the Constitution ( article 65 ). This radical distinction was overlooked. ", "The Attorney-General further submitted that, even on his interpretation, article 21 would be a protection against violation of the rights by the executive and by individuals, an d that would be sufficient justification for the article ranking as a fundamental safeguard. There is no substance in the suggestion. As pointed out in v. Gov- ernment of Nigeria (Officer Administering) (1), the execu- tive could only act in pursuance of the powers given by law and no constitutional protection against such action is really needed. Even in monarchical Britain the struggle between prerogative and law has long since ended in favour of the latter. \"In accordance with British jurisprudence\" said Lord in the case cited above, \"no member of the executive can interfere with the liberty or property of a British subject except on the condition that he can support the legality of his action before .\" As for protection against individuals, it is a misconception to think that constitutional safeguards are directed against individuals. They are as a rule directed against the and its organs. Protection against violation of the rights by individuals must be sought in the ordinary law. It is therefore difficult to accept the suggestion that article 21 was designed to afford protection only against infringements by the executive or individuals. On the other hand,the insertion of a declaration of Fundamental Rights in the forefront of the Constitution, coupled with an express prohibition against legislative interference with these rights ( article 13 ) and the provision of a constitutional sanction for the enforcement of such prohibition by means of a judicial review ( article 32 ) is, in my (1) A.C. 662. ", "205 ", "opinion, a clear and emphatic indication that these rights are to be paramount to ordinary -made laws. After giving the matter my most careful and anxious consideration, I have come to the conclusion that there are only two possible solutions of the problem. In the first place, a satisfactory via media between the two extreme positions contended for on either side may be found by stressing the word \"established\" which implies some degree of firmness, permanence and general acceptance, while it does not exclude origination by statute. \"Procedure estab- lished by law\" may well be taken to mean what referred to in King Emperor v. (1) as \"the ordinary and well-established criminal proce- dure,\" that is to say, those settled usages and normal modes of proceeding sanctioned by the Criminal Procedure Code which is the general law of criminal procedure in the coun- try. Their Lordships were referring to the distinction between trial by special Courts provided by an Ordinance of the Governor-General and trial by ordinary Courts under the Criminal Procedure Code . It can be no objection to this view that the Code prescribes no single and uniform proce- dure for all types of cases but provides varying procedures for different classes of cases. Certain basic principles emerge as the constant factors common to all those proce- dures, and they form the core of the procedure established by law. I realise that even on this view, the life and liberty of the individual will not be immune from legisla- tive interference, for a competent legislature may change the procedure so as to whittle down the protection if so minded. But, in the view I have indicated, it must not be a change ad hoc for any special purpose or occasion, but a change in the general law of procedure embodied in the Code . So long as such a change is not effected, the protection under article 21 would be available. The different measures of constitutional protection which the fundamental right to life and personal liberty will enjoy under article 21 as interpreted in the three ways (1) F.C.R. 161,175. ", "206 ", "referred to above will perhaps be best illustrated by a concrete example. Suppose that article 22 (1) was not there and passed an Act, as a temporary measure, taking away in certain cases the right of an accused person to be defended by a legal practitioner. According to the petition- er's learned counsel the Act would be void as being contrary to the immutable principles of natural justice embodied in article 21 , whereas on the construction contended for by the Attorney-General, the Act would be perfectly valid, while, on the view I have indicated above, the Act would be bad, but if the denial of such right of defence is made a normal feature of the ordinary law of criminal procedure by abro- gating section 340 (1)of the Code , article 21 would be powerless to protect against such legislative action. But in a free democratic republic such a drastic change in the normal law of procedure, though theoretically possi- ble, would be difficult to bring about, and that practical difficulty will be the measure of the protection afforded by article 21. ", "It was said that the safeguards provided in clauses (1) and (2) of article 22 are more or less covered by the provisions of the Criminal Procedure' Code, and this overlapping would have been avoided if article 21 were intended to bear the construction as indicated above. The argument overlooks that, while the provisions of the Code would be liable to alteration by competent legislative action, the safeguards in clauses (1)and (2) of article 22 , being constitutional, could not be similarly dealt with: and this sufficiently explains why those safeguards find a place in the Constitution. ", "The only alternative to the construction I have indi- cated above, if a constitutional transgression is to be avoided, would be to interpret the reference to \"law\" as implying a constitutional amendment pro tanto, for it is only a law enacted by the procedure provided for such amend- ment ( article 368 ) that could modify or override a fundamen- tal right without contravening article 13 (2). ", "207 ", "The question next arises as to how far the protection under article 21 , such as it has been found to be, is avail- able to persons under preventive detention. The learned Attorney-General contended that article 21 did not apply to preventive detention at all, as article 22 clauses (4) to (7) formed a complete code of constitutional safeguards in respect of preventive detention,and, provided only these provisions are conformed to, the validity of any law relat- ing to preventive detention could not be challenged. I am unable to agree with this view. The language of article 21 is perfectly general and covers deprivation of personal liberty or incarceration, both for punitive and preventive reasons. If it was really the intention of the framers of the Constitution to exclude the application of article 21 to cases of preventive detention, nothing would have been easier than to add a reference to article 21 in clause (3) of article 22 which provides that clauses (1) and (2) of the latter shall not apply to any person who is arrested or detained under any law providing for preventive detention Nor is there anything in the language of clauses (4) to (7) of article 22 leading necessarily to the inference that article 21 is inapplicable to preventive detention. These clauses deal only with certain aspects of preventive deten- tion such as the duration of such detention, the constitu- tion of an advisory board for reviewing the order of deten- tion in certain cases, the communication of the grounds of detention to the person detained and the provision of an opportunity to him of making a representation against the order. It cannot be said that these provisions form an exhaustive code dealing with all matters relating to preven- tive detention and cover the entire area of protection which article 21 , interpretedin the sense I have indicated above, would afford to the person detained. I am, therefore, of opinion that article 21 is applicable to preventive deten- tion as well. ", "I will now proceed to examine whether the impugned Act or any of its provisions under which the petitioner has been ordered to be detained, takes away any of the rights con- ferred by articles 21 and 22 or infringes the protection afforded thereby. The outstanding fact to be borne in mind in this connection is that preventive detention has been given a constitutional status. This sinister-looking feature, so strangely out of place in a democratic constitution which invests personal liberty with the sacrosanctity of a fundamental right and so incompatible with the promises of its preamble is doubtless designed to prevent an abuse of freedom by anti-sOcial and subversive elements which might imperil the national welfare of the infant Republic. It is in this spirit that clauses (3) to (7) of article 22 should, in my opinion, be con- strued and harmonised as far as possible with article 21 so as not to diminish unnecessarily the protection afforded for the legitimate exercise of personal liberty. In the first place, as already stated, clause (3) of article 22 excludes a, person detained under any law providing for preventive detention from the benefit of the safeguards provided in clauses (1) and (2) No doubt clause (5) of the same article makes some amends for the deprivation of these safeguards in that it provides for the communication to the person detained the grounds on which the order has been made and for an opportunity being afforded to him of making a representation against the order, but the important right to consult and to be defended by a legal practitioner of his choice is gone. Similarly, the prohibition against detention in custody beyond a period of 24 hours without the authority of a magistrate has also been taken away m cases of preventive detention. It was not disputed that, to the extent to which the express provisions of clauses (4) to (7) authorised the abrogation or abridgement of the safeguards provided under other articles or substitution of other safeguards in a modified form, those express provisions must rule. Of the four essentials of the due process on which Mr. insisted, (which also form part of the ordinary and established procedure under the Criminal Procedure Code , though I cannot agree that they are immutable and beyond legislative change) the requirements of notice and an opportunity to establish his innocence must, as already stated, be taken to have been provided for by clause (5)of article 22. As for an ascertainable standard of conduct to which it is possible to conform, article 22 makes no specific provision in cases of preventive detention, and if such a safeguard can be said to be implicit in the procedure established by law in the sense explained above in preventive detention cases, it could no doubt be invoked. This point will be considered presently in dealing with provisions of the impugned Act. The only other essential requirement, and the most essen- tial of all, is an impartial tribunal capable of giving an unbiassed verdict. This, Mr. submitted, was left unprovided for by article 22 , the advisory board referred to in clause (4) (a) being, according to him, intended to deal solely with the question of duration of the detention, that is to say, whether or not there was sufficient cause for detaining the person concerned for more than three months, and not with judging whether the person detained was innocent. A tribunal which could give an unbiassed judg- ment on that issue was an essential part of the protection afforded by article21 in whichever way it may be interpret- ed, and reference was made in this connection to the preven- tive provisions of the Criminal Procedure Code (Ch. VIII). The impugned Act, not having provided for such a tribunal contravened article 21 and was therefore void. It will be seen that the whole of this argument is based on the major premise that the advisory board mentioned in clause (4) (a) of article 22 is not a tribunal intended to deal with the issue of justification of detention. Is that view correct? ", "It was argued that the words \"sufficient cause for such detention\" in sub-clause (a) of clause (4) had reference to the detention beyond three months mentioned in clause (4) and that this view was supported by the language of sub- clause (a) of clause (7) whereby is authorised to prescribe the circumstances under'which and the class or classes of cases in which a person may be detained for a period longer than three months without the opinion of an advisory board. In other words, learned counsel submitted, the combined effect of clauses (4) and (7) was that no person could be detained for a period over three months without obtaining the opinion of an advisory board that there was sufficient cause for detention for the longer period, except in cases where passed a law autho- rising detention for such period even without the opinion of an advisory board. Thus, these two clauses were concerned solely with the duration of the preventive detention, and so was the advisory board which those clauses provided for that purpose. I am unable to accept this view. I am inclined to think that the words \"such detention\" in sub-clause (a) refer back to the preventive detention mentioned in clause (4) and not to detention for a longer period than three months. An advisory board, composed as it has to be of Judges or lawyers, would hardly be in a position to judge how long a person under preventive detention, say, for reasons connected with defence, should be detained. That must be a matter for the executive authorities, , to determine, as they alone are responsible for the defence of the country and have the necessary data for taking a decision on the point. All that an advisory board can reasonably be asked to do, as a safeguard against the misuse of the power, is to judge whether the detention is justified and not arbitrary or mala fide. The -fact that the advisory board is required to make its report before the expiry of three months and so could submit it only a day or two earlier cannot legitimately lead to an inference that the board was solely concerned with the issue whether or not the detention should continue beyond that period. Before any such tribunal could send in its report a reasonable time must elapse, as the grounds have to be communicated to the person detained, he has to make his representation to the detaining authority which has got to be placed before the board through the appropriate departmental channel. Each of these steps may, in the course Of official routine, take some time, and 'three months' period might well have been thought a reasonable period to allow before the board could be-required to submit its report. ", "211 ", "Assuming, however, that the words \"such detention\" had reference to the period of detention, there is no apparent reason for confining the enquiry by the advisory board to the sole issue of duration beyond three months without reference to the question as to whether the detention was justified or not. Indeed, if is difficult to conceive how a tribunal could fairly judge whether a person should be detained for more than three months without at the same time considering whether there was sufficient cause for the detention at all. I am of opinion that the advisory board referred to in clause (4) is the machinery devised by the Constitution for reviewing orders for preventive detention in certain cases on a consideration of the representations made by the persons detained. This is the view on which has proceeded in enacting the impugned Act as will be seen from sections 9 and 10 thereof, and I think it is the correct view. It follows that the petitioner cannot claim to have his case judged by any other impartial tribu- nal by virtue of article 21 or otherwise. ", "Mr. , however, objected that, on this view, a law could authorise preventive detention for three months with- out providing for review by any tribunal, and for even longer periods if passed an Act such as is con- templated in sub-clause (a) of clause (7). That may be so, but, however deplorable such a result may be from the point of view of the person detained, there could be no remedy if, on a proper construction of clauses (4) and (7), the Consti- tution is found to afford no higher protection for the personal liberty of the individual. ", "Turning next to the provisions of the impugned Act, whose constitutional validity was challenged, it will be necessary to consider only those provisions which affect the petitioner before us. In the first place, it was contended that section 3 , which empowers or to detain any person if it is \"satisfied\" that it is necessary to do so with a view to preventing him from acting in any manner prejudicial to (among other things) the security of the or the maintenance of public order, cannot be said to comply with the procedure established by law, as the section prescribes no objective and ascertainable standard of conduct to which it will be possible to conform, but leaves it to the will and pleasure of the Government concerned to make an order of detention. TIm argument proceeds on the assumption that the procedure established by law is equivalent to the due process of law. I have already endeavoured to show that it is not Apart from this, the argument overlooks that for the purposes of preventive detention it would be difficult, if not impossi- ble to lay down objective rules of conduct failure to conform to which should lead to such detention. As tim very term implies, the detention in such cases is effected with a view to prevent the person concerned from acting prejudi- cially to certain objects which the legislation providing for such detention has in view. Nor would it be practicable to indicate or enumerate in advance what acts or classes of acts would be regarded as prejudicial. The responsibility for the security of the and the maintenance of public order etc. having been laid on the executive Government it must naturally be left to that Government to exercise the power of preventive detention whenever they think the occa- sion demands it. ", " Section 12 came in for a good deal of criticism. That section, which governs the duration of thepetitioner's detention reads as follows :-- ", "\"Duration of detention in certain cases.--Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of for a period longer than three months, but not exceeding one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to:-- ", "(a) the defence of India, relations of India with for- eign powers or the security of India; or ", "(b) the security of a State of the maintenance of public order. ", "213 ", "(2) The case of every person detained under a detention order to which the provisions of sub-section (1) apply shall, within a period of six months from the date of his detention, be reviewed where the order was made by or a State Government, by such Govern- ment, and where the order was made by any officer specified in sub-section (2)of section 3 , by to which such officer is subordinate, in consultation with a person who is, or has been, or is qualified to be appointed as a Judge of nominated in that behalf by or , as the case may be.\" ", "It was urged that this did not comply with the require- ments of clause (7) of article 22 as it merely repeated the \"matters\" or legislative topics mentioned in Entry 9 of List I and Entry 3 of List III of the Seventh Schedule to the Constitution. What has to do under clause(7) of article 22 is to prescribe \"the circumstances under which and the class or classes of cases in which\" a person may be detained for a period longer than three months without obtaining the opinion of an advisory board. It was said that clause (4) (a) provided for ordinary cases of preventive detention Where such detention could not continue beyond three months without obtaining the opinion of an advisory board, whereas clause (7) (a) made provision for special cases of detention for more than three months with- out the safeguard of the advisory board's opinion, for aggravated forms of prejudicial conduct. In other words, clause (4) (a) laid down the rule and clause (7) (a) enacted an exception. It was therefore necessary for to indicate to the detaining authority for its guidance the more aggravated forms of prejudicial activity, and mere mention of the subjects in respect of which is authorised under the legislative lists to make laws in respect of preventive detention could hardly afford any guidance to such authority and should not be regarded as sufficient compliance with the requirements of clause (7). There is a two-fold fallacy in this argument. In the first place, the suggested correla- tion between clause (4) (a) and clause (7) (a) as enacting a rule and an exception is, as a matter of construction, without foundation. Reading clauses (4) and (7) together it is reasonably clear that preventive detention could last longer in two cases: (1) where the opinion of an advisory board is obtained, subject however to a prescribed period [sub-clause (a)of clause (4)] and (2) where a person is detained under a law made by under sub-clauses ", "(a) and (b) of clause (7) [sub-clause (b) of clause (4)]. These are two distinct and independent provisions. It is significant that sub-clause (b) of clause (4) is not worded as a proviso or an exception to sub-clause (a) of the same clause as it would have been if it was intended to operate as such. The attempt to correlate clause (4)(a)and clause (7) (a) as a rule and an exception respectively is opposed both to the language and the structure of those clauses. ", "'Secondly, the argument loses sight of the fact that clause (7) deals with preventive detention which is a purely precautionary measure which \"must necessarily proceed in all cases, to some extent, on suspicion or anticipation as distinct from proof\" [ per Lord in v. (1) ]. The remarks I have' already made with reference to the absence of any objective rules of conduct in section 3 of the impugned Act apply also to this criticism of section ", "12. It would be difficult, if not impracticable, to mention the variouscircumstances, or to enumerate the various class- es of cases exhaustively in which a person should be de- tained for more than three months for preventive purposes, except in broad outline. Suppose a person belongs to. an organization pledged to violent and subversive activity as its policy. Beyond his membership of theparty the person might have done nothing until he1 was arrested and detained. But if released he might indulge in anything from the mild- est form of prejudicial activity, like sticking an objec- tionable handbill on a hoarding, to the most outrageous acts of sabotage. ", "(1) L.R. 1917 A.C. 260, 275. ", "215 ", "How could the insertion in section 12 of a long series of categories of aggravated forms of prejudicial activities, or the enumeration of the various circumstances in which such activities are likely to be indulged in, be of any assist- ance to the detaining authority in determining whether the person concerned should be detained for three months or for a longer period ? All that would be necessary and suffi- cient for him to know for coming to a decision on the point is that the person is a member of such an organisation and will probably engage in subversive activities prejudicial to the security of the or the maintenance of public order or, in other words, he belongs to class (b) in section 12 . While enumeration and classification in detail would un- doubtedly help in grading punishment for offences committed, they would not be of much use in fixing the duration of preventive detention. Sufficient guidance in such cases could be given by broadly indicating the general nature of the prejudicial activity which a person is likely to indulge in, and that in effect is what has done in sec- tion 12. Reference was made in this connection to Rule 34 of the Defence of India Rules framed under the Defence of India Act, 1939, where \"prejudicial act\" is defined by enumeration. But it was also for the purpose of prohibiting such acts [ Rule 38 sub-rule (1) ] and making them offences (sub-rule 5). And even there, the definition had to end in a residuary clause sweeping in acts likely \"to prejudice the efficient prosecution of the war, the defence of British India or, the public safety or interest.\" In Lists I and III of the Seventh Schedule to the Constitution six topics are mentioned in respect of which could make laws providing for preventive detention, and section 12 of the impugned Act mentions five of them as being the classes of cases or the circumstances in which longer detention is authorised. I fail to see why this could not be regarded as a broad classification of cases or a broad description of circumstances where considers longer detention to be justifiable. A class can well be designated with refer- ence to the end which one desires to secure, and the matters referred to as classes (a) and (b) of sub-section (1) of section 12 being clearly the objects which desired to secure by enacting the section, it seems to me that the classification with refer- ence to such general aims does not contravene article 22 (7). ", "It was argued that did not, in enacting section 12 , perform its duty of prescribing both the circumstances and the class or classes of cases where detention without obtaining the advisory board's opinion could be for a period longer than three months. The use of the disjunctive \"or\" between the word \"circumstances\" and the words \"class or classes of cases\" showed, it was said, that proceeded on the view that it need not prescribe both. This was in contravention of article 22 (7) which used the con- junctive \"and\" between those words. There is no substance- in this objection. As I read article 22 (7) it means that may prescribe either the circumstances or the classes of cases or both, and in enacting section 12 evidently regarded the matters mentioned in clause (a) and (b) of sub-section (1) as sufficiently indic- ative both of the Circumstances under which and the classes in which a person could be detained for the longer period. To say, for instance, that persons who are likely to act prejudicially to the defence of India may be detained beyond three months is at once to \"prescribe a class of persons in which and the circumstances under which\" a person may be detained for the longer period. In other words, the classi- fication itself may be such as to amount to a sufficient description of the circumstances for purposes of clause (7). The circumstances which would justify precautionary deten- tion beyond three months without recourse to an advisory board must be far too numerous for anything approaching an exhaustive enumeration, and it can, in my judgment, be no objection to the validity of section 12 that no circum- stances are mentioned apart from the matters referred to in clauses (a) and (b) of sub-section (1). It would indeed be singular for the to strike down a parliamentary enact- ment because in its opinion a certain classification therein made is imperfect or the mention of certain circumstances is unspecific or inade- quate. ", "Lastly, Mr. turned his attack on section 14 which prohibits the disclosure of the grounds of detention communicated to the person detained and of the representa- tion made by him against the order of detention, and debars the from allowing such disclosure to be made except for purposes of a prosecution punishable under sub-section (2) which makes it an offence for any person to disclose or publish such grounds or representation without the previous authorisation of or as the case may be. The petitioner com- plains that this provision nullifies in effect the rights conferred upon him under clause (5) of article 22 which entitles him to have the grounds of his detention communi- cated to him and to make a representation against the order. If the grounds are too vague to enable him to make any such representation, or if they are altogether irrelevant to the object of his detention, or are such as to show that his detention is not bona fide, he has the further right of moving this and this remedy is also guaranteed to him under article 32. These rights and remedies, the petitioner submits, cannot be effectively excercised, if he is prevent- ed on pain of prosecution, from disclosing the grounds to the . There is great force in this contention. All that the Attorney-General could say in answer was that if the other provisions of the Act were held to be valid, it would not be open to the to examine the sufficiency of the grounds on which the executive authority was \"satisfied\" that detention was necessary, as laid down in v. The King (1), and so the petitioner could not complain of any infringement of his rights by reason of section 14 which enacted only a rule of evidence. The argument overlooks that it was recognised in the decision referred to above that it would be open to the to examine the grounds of detention in order to see whether they were relevant to the object which the legislature had (1) F.C.R. 827. ", "218 ", "in view, such as, for instance, the prevention of acts prejudicial to public safety and tranquillity, or were such as to show that the detention was not bona fide. An examina- tion of the grounds for these purposes is made impossible by section 14 , and the protection afforded by article 22 (5) and article 32 is thereby rendered nugatory. It follows that section 14 contravenes the provisions of article 22 (5) and article 32 in so far as it prohibits the person detained from disclosing to the the grounds of his detention communicated to him by the detaining authority or the repre- sentation made by him against the order of detention, and prevents the from examining them for the purposes aforesaid, and to that extent it must be held under article 13 (2) to be void. This however, does not affect the rest of the Act which is severable. As the petitioner did not disclose the grounds of his detention pending our decision on this point he will now be free to seek his remedy, if so advised, on the basis of those grounds. ", "In the result, the application fails and is dismissed. of India having solemnly resolved to constitute India into a Sovereign Democratic Republic on the 26th day of November 1949 gave to themselves a Constitution which came into force on the 26th January 1950. This is the first case in which this has been called upon to determine how far the Constitution has secured personal liberty to the citizens of this country. ", ", the petitioner, who was already under the custody of the Superintendent, Central Jail, Cuddalore, was served with an order of detention under section 3 (1) of the Preventive Detention Act, 1950 (Act IV of 1950) on the 27th February 1950. It was said in the order that the Governor of Madras was satisfied that it was necessary to make the order with a view to preventing him from acting in any manner prejudicial to the security of the State and the maintenance of public order. On 20th March 1950 a petition was presented to this under article 32 of the Constitution praying for the issue of a writ of habeas corpus directing the State of Madras to produce him before the and to set him at liberty. A writ was accordingly issued. The return to the writ is that the detention is legal under Act IV of 1950, enacted by Parlia- ment. The petitioner contends that the Act abridges and infringes certain provisions of Part III of the Constitution and is thus outside the constitutional limits of the legis- lature and therefore void and unenforceable. The matter is one of great importance both be-cause the legislative power expressly conferred by the 7th Schedule has been impugned and because the liberty of the citizen is seriously affected. The decision of the question whether Act IV of 1950 takes away or abridges the rights conferred by Part III of the Constitution depends on a consideration of two points: ", "(1) In what measure has the Constitution secured person- al liberty to a citizen of India, and. ", "(2) has the impugned legislation in any way taken away or abridged the rights so secured and if so, to what extent ? ", "Act IV of 1950 provides for preventive detention in certain cases and it has been enacted as a temporary meas- ure. It will cease to have effect on 1st April 1951. It empowers and the Governments to make an order directing a person to be detained with a view to preventing him from acting in any manner prejudicial to the defence of India, the relations of India with foreign powers or the security of India. It also gives power to detain a person who acts in any manner prejudicial to the security of the or the maintenance of public order or the maintenance of supplies and services essential to the community. It came into force on 26th February 1950 and was enacted by virtue of the powers conferred on by article 22 clause (7) of Part III of the Constitution read with the entries in the 7th Schedule. There can be no doubt that the legislative will expressed herein would be enforceable unless the legislature has failed to keep within its constitutional limits. It is quite obvious that the cannot declare a statute unconstitutional and void simply on the ground of unjust and oppressive provi- sions or because it is supposed to violate natural, social or political rights of citizens unless it it can be shown that such injustice is prohibited or such rights are guaranteed or protected by the Constitution. It may also be observed that an Act cannot be declared void because in the opinion of the it is opposed to the spirit supposed to pervade the Constitution but not so expressed in words. It is difficult on any general principles to limit the omnipo- tence of the sovereign legislative power by judicial inter- position except in so far as the express words of a written Constitution give that authority. Article 13 (2) of our Constitution gives such an authority and to the extent stated therein. It says that the 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. Preventive detention laws are repugnant to democratic constitutions and they cannot be found to exist in any of the democratic countries of the world. It was stated at the that no such law was in force in the United s of America. In England for the first time during the first world war certain regulations framed under the Defence of the Realm Act provided for preventive detention at the satisfaction of the Home Secretary as a war measure and they ceased to have effect at the conclusion of hostilities. The same thing happened during thesecond world war. Similar regulations were introduced during the period of the war in India under the Defence of India Act. The Government of India Act, 1935, conferred authority on to enact laws on this subject for the first time and since then laws on this subject have taken firm root here and have become a permanent part of the statute book of this country. Curiously enough, this subject has found place in the Constitution in the. ", "221 ", "chapter on Fundamental Rights. Entry 9 of the Union List and Entry 3 of the Concurrent List of the 7th Schedule mention the scope of legislative power of in respect of this topic. The jurisdiction, however, to enact these laws is subject to the provisions of Part III of the Constitu- tion. Article 22 in this Part provides :-- ", "\"(1 ) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. ", "(2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the Court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate. ", "(3) Nothing in clauses (1) and (2) shall apply ", "(a) to any person who for the time being is an enemy alien; or ", "(b) to any person who is arrested or detained under any law providing for preventive detention. (4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless- ", "(a) consisting of persons who are, or have been, or are qualified to be appointed as, Judges of has reported before the expiration of the said period of three months that there is in its opinion suffi- cient cause for such detention: ", "Provided that nothing in this sub-clause shall authorise the detention of any person beyond the maximum period pre- scribed by any law made by under sub-clause (b) of clause (7); or ", "(b) such person is detained in accordance with the provisions of any law made by under sub-clauses ", "(a) and (b) of clause (7). ", "(5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, commu- nicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. (6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to, disclose facts which such authority considers to be against the public interest to disclose, (7) parliament may by law prescribe ", "(a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preven- tive detention without obtaining the opinion of in accordance with the provisions of sub-clause (a) of clause (4); ", "(b) the maximum period for which any person may in any class or classes of cases be detained under any law provid- ing for preventive detention; and ", "(c) the procedure to be followed by in an inquiry under sub-clause (a) of clause (4).\" ", "The question of the constitutional validity of the impugned statute has to be approached with great caution in view of these provisions of the Constitution and has to be considered with patient attention. The benefit of reasona- ble doubt has to be resolved in favour of legislative ac- tion, though such a presumption is not conclusive- It seems that the subject of preventive detention became the particu- lar concern of the Constitution because of its intimate connection with deprivation of personal liberty to protect which certain provisions were introduced in the Chapter on Fundamental Rights and because of the conditions prevailing in the newly born Republic. Preventive detention means a complete negation of freedom of movement and of personal liberty and is incompatible with both those subjects and yet it is placed in the same compartment with them in Part III of the Constitution. ", "223 ", "Though the Constitution has recognized the necessity of laws as to preventive detention it has also provided certain safeguards to mitigate their harshness by placing fetters on legislative power conferred on this subject. These are- ", "(1) That no law can provide for detention for a period of more than three months unless the sufficiency for the cause of the detention is investigated by an advisory board within the said period of three months. This provision limits legislative power in the matter of duration of the period of detention. A law of preventive detention would be void if it permits detention for a longer period than three months without the intervention of an advisory board. (2) That a law cannot authorize detention beyond the maximum period prescribed by under the powers given to it in clause (7). This is a limitation on the legislative power of the legislature. They cannot make a law authorizing preventive detention for a longer period than that fixed by . ", "(3) That also cannot make a law authorizing detention for a period beyond three months without the intervention of an advisory board unless the law conforms to the conditions laid down in clause (7) of article 22. Provision also has been made to enable to make laws for procedure to be followed by advisory boards. This is a safeguard against any arbitrary form of procedure that may otherwise find place in laws. ", "Apart from these enabling and disabling provisions certain procedural rights have been expressly safeguarded by clause (5) of article 22. A person detained under a law of preventive detention has a right to obtain information as to the grounds of his detention and has also the right to make a representation protesting against an order of preventive detention. This right has been guaranteed independently of the duration of the period of detention and irrespective of the existence or non-existence of an advisory board. No machinery, however, has been provided or expressly mentioned for dealing with this representation. It seems to me that when a constitutional right has been conferred as a necessary consequence, a constitutional remedy for obtaining redress in case of infringement of the right must be pre- sumed to have been contemplated and it could not have been intended that the right was merely illusory and that a representation made may well find place in cold storage. Consideration of the representation made by virtue of clause (5) by an unbiassed authority is, m my opinion, a necessary consequence of the guaranteed right contained herein. The right has been conferred to enable a detained person to establish his innocence and to secure justice, and no jus- tice can be said to be secured unless the representation is considered by some impartial person. The interpretation that I am inclined to place on clause (5) of article 22 is justi- fied by the solemn words of the declaration contained in the Preamble to the Constitution. It is this declaration that makes our Constitution sublime and it is the guarantees mentioned in the chapter on Fundamental Rights that make it one of the greatest charters of liberty and of which the people, of this country 'may well be proud. This charter has not been forced out of unwilling hands of a sovereign like the Magna Carta but it has been given to themselves by the people of the country through their Constituent . Any interpretation of the provisions of Part III of the Constitution without reference to this solemn declara- tion is apt to lead one into error. If the right of repre- sentation given to a detained person by clause (5) of arti- cle 22 is a guaranteed right and has been given for the purpose of securing justice, then it follows that no justice can be held secured to him unless an unbiassed person considers the merits of the representation and gives his opinion on the guilt or the innocence of the persons detained. In my view, the right cannot be defeated or made elusive by presuming that the detaining authority itself will consider the representation with an unbiassed mind and will render justice. That would in a way make the prosecu- tor a judge in the case and such a procedure is repugnant. to all notions of justice. The Constitution has further curtailed the rights given in clause (5) by providing in clause (6) a privilege on the detaining authority of witholding facts which the said authority considers not in public interests to disclose. This privilege has been conferred for the security of the and possibly for the security of the Constitution itself, but in view of these stringent provi- sions no additional clogs can be put on the proper consider- ation of the representation of the detained person by pre- suming that the detaining authority itself will properly consider the representation. It has also to be remembered in this context that a person-subjected to the law of pre- ventive detention has been deprived of the rights conferred on persons who become subject to the law of punitive deten- tion [vide clauses (1) and (2) of article 22]. He has been denied the right to consult a lawyer or be defended by him and he can be kept in detention without being produced before a magistrate. ", "Having examined the provisions of article 22 , I now proceed to consider the first question that was canvassed before us by the learned Attorney-General, i.e., that arti- cle 22 of the Constitution read with the entries in the 7th Schedule was a complete Code on the subject of preventive detention, and that being so, the other articles of Part III could not be invoked in the consideration of the validity of the impugne'd statute. It was conceded by the learned coun- sel for the petitioner that to the extent that express provisions exist in article 22 on the topic of preventive detention those provisions would prevail and could not be controlled by the other provisions of Part III. It was, however, urged that on matters on which this article had made no special provision on this topic the other provisions of Part III of the Constitution had application, namely, articles 10 and 21 and to that extent laws made on this subject were justiciable. In order to draw the inference that the framers of the Constitution intended the provisions as regards preventive detention in article 22 to be self- contained a clear indication of such an intention has to be gathered. If the provisions embodied in this article have dealt with all the principal questions that are likely to arise in matters of procedure or on questions of the reasonableness of the period of detention, the inference of such an indica- tion would be irresistible. Ordinarily when a subject is expressly dealt with in a constitution in some detail, it has to be assumed that the intention was to exclude the application of the general provisions contained therein elsewhere. Express mention of one thing is an exclusion of the other. Expressio unius est exclusio alterius. I am satisfied on a review of the whole scheme of the Constitu- tion that the intention was to make article 22 self-con- tained in respect of the laws on the subject of preventive detention. It was contended that all the articles in the Constitution should be read in an harmonious manner and one article should not be read as standing by itself and as having no connection with the other articles in the same part. It was said that they were all supplementary to one another. In this connection it was argued that a law made under article 22 would not be valid unless it was in accord with the provisions of article 21 of the Constitution. This article provides that no person shall be deprived of life or liberty' except according to procedure established by law. It was contended that in substance the article laid down that no person will be deprived of life or liberty without having been given a fair trial or a fair hearing and that unless a law of preventive detention provided such a hearing that law would be in contravention of this article and thus void. Conceding for the sake of argument (but without expressing any opinion on it ) that this contention of the learned counsel is correct, the question arises whether there is anything in article 22 which negatives the application of article 21 as above construed to a law on preventive detention. In my opinion, sub-clause (5) of article 22 read with clauses (1) and (2) leads to the inference that the contention raised by the learned counsel is unsound. Clause (5), as already stated, provides that notice has to be given to a detenu of the grounds of his detention. It also provides a limited hearing inasmuch as it gives him an opportunity to establish his innocence. As, in my opinion, the considera- tion of a representation made by a detained person by an unbiassed authority is implicit in clause (5) it gives to the detained person all that he is entitled to under the principles of natural justice. The right to consult and to be represented by a counsel of his own choice has been denied in express terms to such a person by the Constitu- tion. He is also denied an opportunity of appearing before a magistrate. When the Constitution has taken away certain rights that ordinarily will be possessed by a detained person and in substitution thereof certain other rights have been conferred on him even in the matter of procedure, the inference is clear that the intention was to deprive such a person of the right of an elaborate procedure usually pro- vided for in judicial proceedings. Clause (6) of article 22 very strongly supports this conclusion. There would have been no point in laying down such detailed rules of proce- dure in respect of a law of preventive detention if the intention was that such a law would be subject to the provi- sions of article 21 of the Constitution. In its ultimate analysis the argument of the learned counsel for the peti- tioner resolves itself to this: that the impugned statute does not provide for an impartial tribunal for a considera- tion of the representation of the detained person and to this extent it contravenes article 21 of the Constitution. As discussed above, in opinion, such a provision is implicit within article 22 itself and that being so, the application of article 21 to a law made under article 22 is excluded. ", "It was next contended that a law of preventive detention encroaches on the right of freedom of movement within the territory of India guaranteed to a citizen under article 19 (1) (d) and that being so, by reason of the provisions of sub-clause (5) of article 19 it was justiciable on the ground of reasonableness. It is true, as already pointed out, that a law of preventive detention is wholly incompati- ble with the right of freedom of movement of a citizen. Preventive detention in substance is a negation of the freedom of locomotion guaranteed under article 19 (1) (d) but it cannot be said that it merely restricts it. Be that as it may, the question for consideration is whether it was intended that article 19 would govern a law made under the provisions of article 22. Article 19 (5) is a saving and an enabling provision. It empowers to make a law imposing reasonable restriction on the right of freedom of movement while article 22 (7) is auother enabling provision empower- ing to make a law on the subject of preventive detention in certain circumstances. If a law conforms to the conditions laid down in ' article 22 (7 ), it would be a good law and it could not have been intended that that law validly made should also conform itself to the provisions of article 19 (5). One enabling provision cannot be considered as a safeguard against another enabling provision. Article 13 (2) has absolutely no application in such a situation. If the intention of the constitution was that a law made on the subject of preventive detention had to be tested on the touchstone of reasonableness, then it would not have trou- bled itself by expressly making provision in article 22 about the precise scope of the limitation subject to which such a law could be made and by mentioning the procedure that the law dealing with that subject had to provide. Some of the provisions of article 22 would then have been redun- dant, for instance, the provision that no detention can last longer than three months without the necessity of such detention being examined by an advisory board. This provi- sion negatives the idea that the deprivation of liberty for a period of three months without the consultation of the advisory board would be justiciable on the ground of reason- ableness. Again article 22 has provided a safeguard that if an advisory board has to be dispensed with, it can only be so dispensed with under a law made by and that also in enacting such a law has to conform to certain conditions. This provision would have' been unnec- essary in article 22 if a law on this subject was justicia- ble. In sub-clause (b) of clause (7) of article 22 provision has been made enabling to fix the maximum period for which a person can be detained under a law on the sub- ", "ject of preventive detention. Under this express provision it is open to to fix any period, say, even a period of five to ten years as the maximum period of detention of a person. Can it be said that in view of this express provision of the Constitution such a law was intended to be justiciable by reason of article 19 (5) ? Duration of detention is the principal matter in preventive detention laws which possibly could be examined on the touchstone of reasonableness under article 19 (5 ), but this has been expressly excluded by express provisions in article 22. In my judgment, therefore, an examination of the provisions of article 22 clearly suggests that the intention was to make it self-contained as regards the law of preventive detention and that the validity of a law on the subject of preventive detention cannot be exam- ined or controlled either by the provisions of article 21 or by the provisions of article 19 (5) because article 13 (2) has no application to such a situation and article 22 is not subject to the provisions of these two articles. The Consti- tution in article 22 has gone to the extent of even provid- ing that may by law lay down the procedure to be followed by an advisory board. On all important points that could arise in connection with the subject of preventive detention provision has been made in article 22 and that being so, the only correct approach in examining the validi- ty of a law on the subject of preventive detention is by considering whether the law made satisfied the requirements of article 22 or in any way abridges or contravenes them and if the answer is in the affirmative, then the law will be valid, but if the answer is in the negative, the law would be void. ", "In expressing the view that article 22 is in a sense self-contained on the law of preventive detention I should not however be understood as laying down that the framers of the article in any way overlooked the safeguards laid down in article 21. Article 21 , in my opinion. lays down sub- stantive law as giving protection to life and liberty inas- much as it says that they cannot be deprived except accord- ing to the procedure established by law; in other words, it means that before a person can be deprived of his life or liberty as a condition precedent there should exist some substantive law conferring authority for doing so and the law should further provide for a mode of procedure for such depriva- tion. This article gives complete' immunity against the exercise of despotic power by the executive. It further gives immunity against invalid laws which contravene the Constitution. It gives also further guarantee that in its true concept there should be some form of proceeding before a person can be condemned either in respect of his life or his liberty. It negatives the idea of fantastic, arbitrary and oppressive forms of proceedings. The principles there- fore underlying article 21 have been kept in view in draft- ing article 22. A law properly made under article 22 and which is valid in all respects under that article and lays down substantive as well as adjective law on this subject would fully satisfy the requirements of article 21 , and that being so, there is no conflict between these two articles. The next question that arises for decision is whether there is anything in Act IV of 1950 which offends against the provisions of article 22 of Part III of the Constitu- tion. The learned counsel for the petitioner contended that section 3 of the Act was bad inasmuch as it made \"satisfaction of the Government\" as the criterion for de- taining a person. It was said that as section 3 laid down no objective rule of conduct for a person and as people were not told as to what behaviour was expected of them, the result was that it could not be known what acts a person was expected to avoid and what conduct on his part was prejudi- cial to the security of the or the maintenance of' public order; in other words, it was argued that section 3 left the determination of the prejudicial act of a person to the arbitrary judgment of the Government and that even the officer who was to administer this law had been furnished no guide and no standard of conduct in arriving at his own satisfaction whether the conduct was prejudicial to the security of the etc. This criticism of the learned counsel, in my opinion, is not valid, It is no doubt true that a detention order depends on the satisfac- tion of the' Government but this provision is in accordance with article 22 of the Constitution which to my mind contemplates detention on the satisfaction of the executive authority. By its very nature the subject is such that it implies detention on the judgment of the authority entrusted with the making of the order. The whole intent and purpose of the law of preventive detention would be defeated if satis- faction of the authority concerned was subject to such an objective standard and was also subject to conditions as to legal proof and procedure. In the 7th Schedule jurisdiction to make the law on this subject has been given for reasons connected with defence etc. and the maintenance of public order. These are subjects which concern the life and the very existence of the . Every citizen is presumed to know what behaviour is prejudicial to the life of the or to its existence as an ordered . Considering that the is presumed to have a government that conducts itself in a reasonable way and also presuming that its officers usually will be reasonable men, it cannot be said that in making \"satisfaction of the government\" as the standard for judging prejudicial acts of persons who are subject to the law of preventive detention section 3 in any way contravenes article 22 of the constitution. Section 7 of the impugned Act gives full effect to the provisions of article 22 sub clause (5) and enacts that representation has to be made to the or Gov- ernment as the case may be. It was impeached on the ground that no machinery has been provided herein to consider and adjudicate on the merits of the representation. To this extent, as already indicated, the law is defective. In the absence of a machinery for the investigation of the conten- tions raised in the representation it may be open to the detenu to move this Court under article 32 for a proper relief. It is, however, unnecessary to express any opin- ion as to the precise remedy open to a detained person in this respect. The absence of a provision of this nature in the statute however would not make the law wholly void. Section 9 of the Act makes reference to the advisory board obligatory in cases falling under sub-clause (iii) of clause (a) or clause (b) of sub-section (1) of section a within six weeks of the order. The proce- dure to be followed by the advisory board is laid down in section 10 . has been authorized to lay down such a procedure to be followed by an advisory board in sub- clause (c) of clause (7). It was contended that the law had not provided a personal hearing to the detenu before an advisory board, nor had it given him a right to lead evi- dence to establish his innocence. In my opinion, this criticism is not sound and does not in any way invalidate the law. The advisory board has been given the power to call for such information as it requires even from the person detained. It has also been empowered to examine the materi- al placed before it in the light of the facts and arguments contained in the representation. The opportunity afforded is not as full as a person gets under normal judicial proce- dure but when the Constitution itself contemplates a special procedure being prescribed for preventive detention cases, then the validity of the law on that subject cannot be impugned on the grounds contended for. ", " Section 11 of the Act was also impugned on the ground that it offended against the Constitution inasmuch as it provided for preventive detention for an indefinite period. This section in my opinion has to be read in the background of the provision in sub-clause (3) of section 1 of the Act which says that the Act will cease to have effect on 1st April, 1951. Besides, the words \"for such period as it thinks fit\" do not in any way offend against the provisions of article 22 wherein has been given the power to make a law fixing the maximum period for preventive deten- tion. It has to be noted that has fixed a period of one year as the maximum period for the duration of detention where detention has to be without reference to an advisory board. In my opinion, there is nothing in section 11 which is outside the constitutional limits of the powers of the supreme legislature. ", "233 ", "It is section 12 of the Act which was assailed by the learned counsel for the petitioner rather vehemently. This section is of a very controversial character. It has been enacted on the authority of clause (7) of article 22 and runs thus :-- ", "\"(1) Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of for a period longer than three months, but not exceed- ing one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to- ", "(a) the defence of India, relations of India with for- eign powers or the security of India; or ", "(b) the security of a or the maintenance of public order. ", "(2) The case of every person detained under a detention order to which the provisions of sub-section (1) apply shall, within a period of six months from the date of his detention, be reviewed where the order was made by or a State Government, by such Govern- ment, and where the order was made by any officer specified in sub-section (2) of section a, by to which such officer is subordinate, in consultation with a person who is, or has been, or is qualified to be appointed as, a Judge of nominated in that behalf by or , as the case may be.\" ", "The section purports to comply with the conditions laid down in clause (7) of article 22. It was, however, argued that in substance and reality it has failed to comply with any of the conditions laid down therein; that it neither mentions the circumstances under which nor the classes of cases in which preventive detention without recourse to the machinery of an advisory board could be permitted. The crucial question for consideration is whether section 12 mentions any circumstances under which or defined the class- es of cases in which authority was conferred by clause (7) to dispense with an advisory board. So far as I have been able to gather from opinions of text-book writers on the subject of classification, the rule seems clear that in making classification of cases there has to be some rela- tionship to the classification to the objects sought to be accomplished. The question for consideration therefore is what object was sought to be accomplished when the Constitu- tion included clause (7) in article 22. It seems clear that the real purpose of clause (7) was to provide for a contin- gency where compulsory requirement of an advisory board may defeat the object of the law of preventive detention. In my opinion, it was incorporated in the Constitution to meet abnormal and exceptional cases, the cases being of a kind where an advisory board could not be taken into confidence. The authority to make such drastic legislation was entrusted to 'the supreme legislature but with the further safeguard that it can only enact a law of such a drastic nature provided it prescribed the circumstances under which such power had to be used or in the alternative it prescribed the classes of cases or stated a determinable group of cases in which this could be done. The intention was to lay down some objective standard for the guidance of the detaining authority on the basis of which without consultation of an advisory board detention could be ordered beyond the period of three months. In this connection it has to be remembered that the Constitution must have thought of really some abnormal situation and of some dangerous groups of persons when it found it necessary to dispense with a tribu- nal like an advisory board which functions in camera and which is not bound even to give a personal hearing to the detenu and whose proceedings are privileged. The law on the subject of preventive detention in order to avoid even such an innocuous institution could only be justified on the basis of peculiar circumstances and peculiar situations which had to be objectively laid down and that was what in my opinion was intended by clause (7). If the peculiarity lies in a situation outside 'the control or view of a de- tained person, then it may be said that the description of such a situation would amount to a prescription of the circumstances justifying the detention for a longer period than three months by a law without the intervention of an advisory board'. If, however, the abnormality relates to the conduct and character of the activities of a certain determinable group of persons, then that would amount to a class of cases which was contemplated to be dealt with under clause (7). In such cases alone arbitrary detention could be held justifiable by law beyond a period of three months. ", "It was argued by the learned counsel for the petitioner that the phrase \"circumstances under which, and the classes of cases in which\" used in clause (7) had to be construed in a cumulative sense; on the other hand, the learned Attorney-General contended that the word \"and\" had been used in this clause in the same sense as \"or.\" He further argued that even if the word \"and\" is not given that meaning the true construction of the phrase was that could prescribe either the circumstances or the classes of cases for making a law on the subject of preventive detention authorizing detention for a longer period than three months without the machinery of an advisory board. In Full Bench Reference No. 1 of 1950, of held that the intention of the legislature in enacting the clause was that the law of preventive detention author- izing detention for a longer period than three months with- out the intervention of an advisory board had to fulfil both the requirements laid down in clause (7) and not only one of the requirements in the alternative. The same view has been expressed by my brother Sir . I share this view with him. I would, however, like to consider this matter from a different aspect on the assumption that the contention raised by the learned Attorney-General is right. Dealing first with the question whether section 12 mentions any circumstances, so far as I have been able to see, it does not prescribe any circumstances unless it can be said that the prejudicial acts for reasons connected with the security of , maintenance of public order, etc. are both the circumstances as well as the classes of cases. In my opinion, this line of approach cannot be held to be correct in the construction of clause (7) of article 22. I am inclined to agree with the learned Attorney-General that the phrase \"circumstances under which\" means some situation extraneous to the detenu's own acts, in other words, it means some happening in the country with which the detenu is not concerned, such as a situation of tense communal feelings, an apprehended internal rebellion or disorder, the crisis of an impending war or apprehended war, etc. In such a situation the machinery of an advisory board could be dispensed with because it may become cumber- some or it may hamper the exercise of necessary powers. In this view of the matter I have no hesitation in holding that no circumstances have been stated in section 12 , though the section ostensibly says so. If it was permissible to con- jecture, it seems that the draftsman of section 12 ' repeated the words of clause' (7) of article 22 without an applica- tion of his mind to the meaning of those words and as the legislation was passed in haste to meet an emergent situa- tion, it suffers from the defects which all hasty legisla- tion suffer from. ", "I now proceed to consider whether section 12 has classi- fied the cases in which detention for a longer period beyond three months could be suffered by a citizen without the benefit of the machinery of an advisory board. The section has placed five subjects out of the legislative list within its ambit and these are described as the classes of cases. The question is whether it can be said that a mere selection of all or any of the categories of the subjects for reasons connected with which a law of preventive detention could be' made under the 7th Schedule amounts to a classification of cases as contemplated in clause (7) of article 22. Entry 9 of the Union List and Entry 3 of the Concurrent List of the 7th Schedule lay down the ambit of legislative power of on the subject of preventive detention on the following six subjects :-- ", "(1) Defence of India, (2) Foreign Affairs, (a) Security of India, (4) Security of the State, (5) Mainten- ", "237 ", "ance of public order, (6) Maintenance of supplies and serv- ices essential to the community. ", "Clause (4) of article 22 enjoins in respect of all the six subjects that no law can provide for preventive deten- tion for a longer period than three months without reference to an advisory board. Clause (7) gives permission to make a law for dispensing with an advisory board by a prescription of the circumstances and by a prescription of the classes of cases in which such a dispensation can be made. The legis- lative authority under clauses (4) and (7)in my opinion, extends to all these six subjects. The normal procedure to be followed when detention is intended to be beyond a period of three months in respect of the six subjects is provided in sub-clause (4) The extraordinary and unusual procedure was intended, to be adopted in certain abnormal cases for which provision could be made by a parliamentary statute under clause (7). It seems to me, however, that section- 12 of Act IV of 1950 has reversed this process quite contrary to the intention of the Constitution. By this section Act IV of 1950 has dispensed with the advisory board in five out of the six subjects above mentioned and the compulsory procedure of an advisory board laid down in clause (4) of article 22 has been relegated to one out of these six sub- jects. This has been achieved by giving a construction to the phrase \"circumstances under which and the classes of cases in which\" so as to make it co-extensive and cotermi- nous with the \"subjects of legislation.\" In my opinion, this construction of clause (7) is in contravention of the clear provisions of article 22 , and makes clause (4) of article -9 ,2 to all intents and purposes nugatory. Such a construction of the clause would amount to the Constitution saying in one breath that a law of preventive detention cannot provide for detention for a longer period than three months without reference to an advisory board and at the same breath and moment saying that , if it so chooses, can do so in respect of all or any of the subjects mentioned in the legislative field. If that was so, it would have been wholly unnecessary to provide such a safe- guard in the Constitution on a matter which very seriously affects personal liberty. On the other hand, it would be a reasonable construction of the clause to hold that the Constitution authorized that in serious classes of cases or in cases of those groups of persons who are incorrigible or whose activities are secret the procedure of an advisory board may well be dispensed with, that being necessary in the interests of the . On the other construction as adopted by the framers of section 12 , the Constitution need not have troubled itself by con- ferring an authority on for making such a law. Moreover, if that was the intention, it would have in very clear words indicated this by drafting article 22 clause (4) thus: ", "\"Unless otherwise provided by no law provid- ing for preventive detention shall authorize detention for a longer period than three months unless has investigated the sufficiency of the cause of such detention.\" ", "The words \"Unless otherwise provided for by \" would have been in accord with the construction which the framers of section 12 have placed on article 22 clause (7). I am further of the opinion that the construction placed by the learned Attorney-General on clause (7) of article 22 and adopted by the framers of Act IV of 1950 creates a very anomalous situation. The matter may be examined from the point of view of the law of preventive detention for reasons connected with supplies and services essential to the life of the community. This subject has been put under section 9 in Act IV of 1950. Suppose a tense situation arises and there is a danger of the railway system being sabotaged and it becomes necessary to pass detention orders against cer- tain persons. According to Act IV of 1950 in such a serious state of affairs the procedure of an advisory board is compulsory, while on the other hand, if there is an appre- hension of disturbance of public order by reason of a wrong decision of an umpire at a cricket match or on account of conduct of persons celebrating the festival of Holi, then detention beyond three months can be ordered without reference to an advisory board. Could such an anomalous result be in the contempla- tion of the framers of the Constitution ? The construction that I am inclined to place on the section is in accord with the scheme of the law of punitive detention. Hurt is an offence under the Indian Penal Code and this is one of the subjects of punitive detention. The cases on the subject have been classified in different groups, namely, simple hurt, grievous hurt, grievous hurt with dangerous weapons, grievous hurt to extort a confession, grievous hurt to restrain a public officer from doing his duty, grievous hurt by a rash act, and grievous hurt on provocation. Even simple hurt has been classified in different categories. The sub- ject of assault has also been similarly dealt with. Sections 352 to 356 deal with cases classified according to the gravity of the offence, i.e., cases of simple assault, assault on a public servant, assault on women, assault in attempt to'commit theft, assault for wrongfully confining a person and assault on grave provocation have been separately grouped. Another illustration is furnished by the Criminal Procedure Code in the preventive sections 107 to 110 . These deal with different groups of persons; vagrants are in one class, habitual offenders in another, bad characters in the third and disturbers of peace in the fourth. It seems that it is on lines similar to these that it must have been contemplated by the Constitution that classes of cases would be prescribed by , but this has not been done. The Constitution has recognised varying scales of duration of detention with the idea that this will vary with the nature of the apprehended act, detention for a period of three months in ordinary cases, detention for a longer period than three months with the intervention of an adviso- ry board in more serious cases, while detention for a longer period than three months without the intercession of an advisory board for a still more dangerous class and for acts committed in grave situations. It can hardly be said that all cases of preventive detention for reasons connected with the maintenance of public order stand on the same footing in the degree of gravity and deserve the same duration of detention and all cases connected with the maintenance of supplies and services essential to the life of the community stand in the matter of their gravity on such a footing as to require a lenient treatment. It is true that in a sense all persons who act prejudicially to the defence of India may be comprehensively said to form one group and similarly persons who act prejudicially to the maintenance of supplies and services essential to the life of the community may form another class but the question is, whether it was in this comprehensive sense that classifica- tion was intended by the Constitution in clause (7) or was it intended in a narrower and restricted sense ? It has to be remembered that the law under clause (7) was intended to provide detention for a longer period and such a law very seriously abridges personal liberty and in this situation giving a narrower and restricted meaning to this expression will be in accordance with well established canons of con- struction of statutes. ", "The wide construction of clause (7) of article 22 brings within the ambit of the clause all the subjects in the legislative list and very seriously abridges the personal liberty of a citizen. This could never have been the inten- tion of the framers of the Constitution. The narrow and restricted interpretation is in accord with the scheme of the article and it also operates on the whole field of the legislative list and within that field it operates by demar- cating certain portions out of each subject which requires severe treatment. If I may say so m conclusion, section 12 treats the lamb and the leopard in the same class because they happen to be quadrupeds. Such a classification could not have been in the thoughts of the Constitution-makers when clause (7) was introduced in article 22. For the reasons given above, I am of the opinion that section 12 of Act IV of 1950 does not fulfil the requirements of clause (7) of article 22 of the Constitution and is not a law which falls within the ambit of that clause. That being so, this section of Act IV of 1950 is void and by reason of it the detention of the petitioner cannot be justified. There is no other provision in this law under which he can be detained for any period whatsoever. ", "It was argued that it was neither practicable nor possi- ble to make a classification on any definite basis in the case of apprehended acts of persons whose activities are of a prejudicial character to the maintenance of public order or to the security of the or to the defence of India. This contention to my mind is not sound. Such a classifica- tion was made in the rules under the Defence of India Act by defining \"a prejudicial act\" in regulation 34. Mere difficulty in precisely ascertaining the groups or in defin- ing objectively the conduct of such groups is no ground for not complying with the clear provisions of the statute or for disobeying it. I see no difficulty whatsoever if a serious effort was made to comply with the provisions of clause (7). I cannot see that the compulsory requirement of an advisory board is likely to lead to such disastrous or calamitous results that in all cases or at least in five out of the six subjects of legislation it becomes necessary to dispense with this requirement. The requirement of an advi- sory board is in accordance with the preamble of the Consti- tution and is the barest minimum that can make a law of preventive detention to some little degree tolerable to a democratic Constitution. Such a law also may have some justification even without the requirement of an advisory board to meet certain defined dangerous situations or to deal with a class of people who are a danger to the but without such limitation the law would be destructive of all notions of personal liberty. The Constitution must be taken to have furnished an adequate safeguard to its citi- zens when it laid down certain conditions in clause (7) and it could not be considered that it provided no safeguard to them at all and that the words used in clause (7) were merely illusory and had no real meaning. ", "Section 14 of Act IV of 1950 has been impugned on the ground that it contravenes and abridges the provisions of articles 22 (5) and 32 of the Constitution. This section is in these terms:-- ", "242 ", "\"(1) No shall except for the purposes of a prose- cution for an offence punishable under subsection (2), allow any statement to be made, or any evidence to be given, before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by him against such order, and notwithstanding anything con- tained in any other law, no shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such communication or repre- sentation made, or the proceedings of an advisory board or that part of the report of an advisory board which is confi- dential. ", "(2) It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of or , as the case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub-section (1): ", "Provided that nothing in this sub-section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order.\" ", "This section is in the nature of an iron curtain around the acts of the authority making the order of preventive detention. The Constitution has guaranteed to the detained person the right to be told the grounds of detention. He has been given a right to make a representation [vide arti- cle 22 (5)], yet section 14 prohibits the disclosure of the grounds furnished to him or the contents of the representa- tion made by him in a Court of law and makes a breach of this injunction punishable with imprisonment. Article 32 (1) of the Constitution is in these terms :-- \"The right to move by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.\" ", "243 ", "Sub-section (4) says :-- ", "\"The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitu- tion.\" ", "Now it is quite clear that if an authority passes an order of preventive detention for reasons not connected with any of the six subjects mentioned in the 7th Schedule, this can always declare the detention illegal and release the detenu, but it is not possible for this to func- tion if there is a prohibition against disclosing the grounds which have been served upon him. It is only by an examination of the grounds that it is possible to say wheth- er the grounds fall within the ambit of the legislative power contained in the Constitution or are outside its scope. Again something may be served on the detenu as being grounds which are not grounds at all. In this contingency it is the right of the detained person under article 32 to move this for enforcing the right under article 22 (5) that he be given the real grounds on which the detention order is based. This would be disabled from exercis- ing its functions under article 32 and adjudicating on the point that the grounds given satisfy the requirements of the sub-clause if it is not open to it to see the grounds that have been furnished. It is a guaranteed right of the person detained to have the very grounds which are the basis of the order of detention. This would be entitled to examine the matter and to see whether the grounds furnished are the grounds on the basis of which he has been detained or they contain some other vague or irrelevant material. The whole purpose of furnishing a detained person with the grounds is to enable him to make a representation refuting these grounds and of proving his innocence. In order that this may be able to safeguard this fundamental right and to grant him relief it is absolutely essential that the detenu is not prohibited under penalty of punishment to disclose the grounds to the and no injunction by law can be issued to this disabling it from having a look at the grounds. Section 14 creates a substantive offence if the grounds are disclosed and it also lays a duty on the not to permit the disclosure of such grounds. It virtually amounts to a suspension of a guaranteed right provided by the Constitution inasmuch as it indirectly by a stringent provision makes administration of the law by this impossible and at the same time it deprives a detained person from obtaining justice from this . In my opin- ion, therefore, this section when it prohibits the disclo- sure of the grounds contravenes or abridges the rights given by Part III to a citizen and is ultra vires the powers of to that extent. ", "The result of the above discussion is that, in my opin- ion, sections 12 and 14 of Act IV of 1950 as above indicated are void and the decision of the detenu's case has to be made by keeping out of sight these two provisions in the Act. If sections 12 and 14 are deleted from the impugned legislation, then the result is that the detention of the petitioner is not legal. The statute has not provided for detention for a period of three months or less in such cases as it could have done under article22 (4) of the Constitu- tion and that being so, the petitioner cannot be justifia- bly detained even for a period of three months. I would accordingly order his release. ", "In view of the decision above arrived at I do not con- sider it necessary to express any opinion on the other points that were argued at great length before us, namely, (1)what is 'the scope and true meaning of the expression \"procedure established by law\" in article 21 of the Consti- tution, and (2) what is the precise scope of articles 19 (1) ", "(d) and 19 (5)of the Constitution. ", " an application under article 32 of the Constitution praying for a writ of habeas corpus upon the respondents with a view to release the petitioner who, it is alleged, is being unlawfully detained in the Central Jail, Cuddalore, within the State of Madras. ", "The petitioner, it is said, was initially arrested in Malabar on 17th of December, 1947, and prosecution was started against him on various charges for having delivered certain violent speeches. While these criminal cases were going on, he was served with an order of deten- tion under the Madras Maintenance of Public Order Act on 22nd April, 1948. This order of detention was held to be illegal by , but on the same day that the judgment was pronounced, a second order of detention was served upon him. On his moving again for a writ of habeas corpus in respect to the subsequent order, his application was dismissed on the ground that as he was not granted bail in one of the three criminal cases that were pending against him, the detention could not be said to be unlawful. Liberty, however, was given to him to renew his application if and when his detention under the criminal proceedings ceased. In two out of the three criminal cases the trial before the magistrate ended on February 23, 1949, and the petitioner was sentenced to rigorous imprisonment for 6 months in each of the cases. These sentences, however, were set aside in appeal on 26th September, 1949. As re- gards the third case, he was tried by the Sessions Judge of North Malabar and sentenced to rigorous imprisonment for 5 years but this sentence was reduced to 6 months' imprison- ment by on appeal. The petitioner made a fresh application to praying for a writ of habeas corpus in respect of his detention under the Madras Maintenance of Public Order Act and this application, which was heard after he had served out his sentences of imprisonment referred to above, was dismissed in January, 1950. On 25th February, 1950, the Preventive Detention Act was passed by the and on the 1st of March follow- ing, the the detention of the applicant under the Madras Maintainance of Public Order Act was cancelled and he was served with a fresh order of detention under section 3 (1) of the Preventive Detention Act, 1950. On behalf of the respondents the detention of the petitioner is sought to be justified on the strength of the Preventive Detention Act of 1950. The position taken up on behalf of the petitioner on the other hand is that the said Act is invalid and ultra vires the conStitution by reason of its being in conflict with certain fundamental rights which are guaranteed by the Constitution. It is argued, therefore, that the detention of the peti- tioner is invalid and that he should be set at liberty. The contentions that have been but forward-by Mr. who appeared in support of the petition, may be classi- fied under four heads. His first contention is that as preventive detention is, in substance, a restriction on the free movements of a person throughout the Indian territory, it comes within the purview of article 19 (1) (d) of Part III of the Constitution which lays down the fundamental rights. Under clause (5) of the article, any restriction imposed upon this right of free movement must be reasonable and should be prescribed in the interests of the general public. The question as to whether it is reasonable or not is a justiciable matter which is to be determined by the . This being the legal position, the learned Counsel invites us to hold that the main provisions of the impugned Act, particularly those which are contained in sections 3 , 7 , 10 , 11 , 12 , 13 and 14 are wholly unreasonable and should be invalidated on that ground. ", "The second contention advanced by the learned Counsel is that the impugned legislation is in conflict with the provi- sion of article 21 of the Constitution inasmuch as it pro- vides for deprivation of the personal liberty of a man not in accordance with a procedure established by law. It is argued that the word 'law' here does not mean or refer to any particular legislative enactment but it means the gener- al law of the land, embodying those principles of natural justice' with regard to procedure which are regarded as fundamental, in all systems of civilised jurisprudence. It is conceded by the learned counsel that the proce- dure, if any, with regard to preventive detention as has been prescribed by article 22 of the Constitution which itself finds a place in the chapter on Fundamental Rights must override those general rules of procedure which are contemplated by article 21 but with regard to matters for which no provision is made in article 22 , the general provi- sion made in article 21 must apply. He has indicated in course of his arguments what the essentials of such procedure are and the other point specifically raised in this connection is that the provision of section 12 of the Preventive Detention Act is in conflict with article 22 (7) of the Constitution. The last argument in support of this application is that the provisions of sections 3 and 14 of the Preventive Deten- tion Act are invalid as they take away and render completely nugatory the fundamental right to constitutional remedies as is provided for in article 32 of the Constitution. In discussing these points it should be well to keep in mind the general scheme of the Indian Constitution relating to the protection of the fundamental rights of the citizens and the limitations imposed in this respect upon the legis- lative powers of the Government. The Constitution of India is a written Constitution and though it has adopted many of the principles of the English ary system, it has not accepted the English doctrine of the absolute supremacy of in matters of legislation. In this respect it has followed the American Constitution and other systems modelled on it. Notwithstanding the representative charac- ter of their political institutions, the Americans regard the limitations imposed by their Constitution upon the action of the Government, both legislative and executive, as essential to the preservation of public and private rights. They serve as a check upon what has been described as the despotism of the majority; and as was observed in the case of v. (1) \"a government which holds the lives, the liberty and the property of its citizens, subject at all times to the absolute disposition and unlimited control of even the most democratic depository of power, is after all but a despotism.\" In India it is the Constitution that is supreme and as well as the State must not only act within the limits of their respective legislative spheres as demarcated in the three (1) 110 U.S. 516. ", "32 ", "248 ", "lists occuring in the Seventh Schedule to the Constitution, but Part III of the Constitution guarantees to the citizens certain fundamental rights which the legislative authority can on no account transgress. A statute law to be valid must, in all cases, be in conformity with the constitutional requirements and it is for the judiciary to decide whether any enactment is unconstitutional or not. Article 13 (2) is imperative on this point and provides expressly that the shall not make any law which takes away or abridges the right conferred by this Part and any law made in contra- vention of this clause shall, to the extent of the contra- vention, be void. Clause (1) of the article similarly invalidates all existing laws which are inconsistent with the provisions of this Part of the Constitution. The fundamental rights guaranteed by the Constitution have been classified under seven heads or categories. They are: ", "(1) Right to equality; ", "(2) Right to freedom; ", "(3) Right against exploitation; ", "(4) Right to freedom of religion; ", "(5) Cultural and educational rights; ", "(6) Right to property; and (7) Right to constitutional remedy. ", "The arrangement differs in many respects from that adopted in the American Constitution and bears a likeness on certain points to similar declarations in the Constitutions of other countries. ", "Of the different classes of fundamental rights spoken of above, we are concerned here primarily with right to freedom which is dealt with in four articles beginning from article 19 and also with the right to constitutional remedy which is embodied in article 32. ", " Article 10 enumerates certain forms of liberty or free- dom, the protection of which is guaranteed by the Constitu- tion. In article 20 , certain protections are given in cases of persons accused of criminal offences. Article 21 lays down in general terms that no person shall be deprived of his life or personal liberty, except according to procedure established by law. Article 22 pro- vides for certain additional safeguards in respect to arrest and detention and by way of exception to the rules so made, makes certain special provisions for the particular form of detention known as Preventive Detention. ", "The first contention advanced by Mr. involves a consideration of the question as to whether Preventive Detention, which is the subject matter of the impugned legislative enactment, comes within the purview of article 19 (1) (d) of the Constitution, according to which a right to move freely throughout the territory of India is one of the fundamental rights guaranteed to all citizens. If it comes within that sub-clause, it is not disputed that clause (5) of article 19 would be attracted to it and it would be for the courts to decide whether the restrictions imposed upon this right by the are reasonable restric- tions and are within the permissible limits prescribed by clause (5) of the article. ", "There is no authoritative definition of the term 'Pre- ventive Detention' in Indian law, though as description of a topic of legislation it occurred in the Legislative Lists of the Government of India Act, 1935, and has been used in Item 9 of List I and Item 3 of List III in the Seventh Schedule to the Constitution. The expression has its origin in the language used by Judges or the law Lords in England while explaining the nature of detention under Regulation 14 (B) of the Defence of Realm Consolidation Act, 1914, passed on the outbreak of the First World War; and the same lan- guage was repeated in connection with the emergency regula- tions made during the last World War. The word ' preventive ' is used in contradistinction to the word ' punitive.' To quote the words of Lord in v. Halliday(1), \"it is not a punitive but a precautionary measure.\" The object is not to punish a man for having done something but to intercept him before he does it and to prevent him from doing it. No offence is proved, nor any charge formulated; and the justification of such detention is suspicion (1) [1917] A.C. 260 at p. 269. ", "250 ", "or reasonable probability and not criminal conviction which can only be warranted by legal evidence (1). Detention in such form is unknown in America. It was resorted to in England only during war time but no country in the world that I am aware of has made this an integral part of their Constitution as has been done in India. This is undoubtedly unfortunate, but it is not our business to speculate on questions of policy or to attempt to explore the reasons which led the representatives of our people to make such a drastic provision in the Constitution itself, which cannot but be regarded as a most unwholesome encroachment upon the liberties of the people. ", "The detention of a man even as a precautionary measure certainly deprives him of his personal liberty, and as article 21 guarantees to every man, be he a citizen or a foreigner, that he shall not be deprived of his life and personal liberty, except in accordance with the procedure established by law, the requirements of article 21 would certainly have to be complied with, to make preventive detention valid in law. What these requirements are I will discuss later on. Article 22 comes immediately after arti- cle 21. It secures to all persons certain fundamental rights in relation to arrest and detention, and as already said, by way of exception to the rights thus declared, makes certain specific provisions relating to preventive deten- tion. The subject of preventive detention is specified in and constitutes Item No. 9 in the Union legislative List and it also forms Item No. 3 in the Concurrent List. Under article 246 of the Constitution, the and are empowered to legislate on this sub- ject within the ambit of their respective authorities. Clause(3) of article 22 expressly enjoins that the protec- tive provisions of clauses (1) and (2) of the article would not be available to persons detained under any law providing for preventive detention. The only fundamental rights which are guaranteed by the Constitution in the matter of preven- tive detention and which to that extent impose restraints upon the exercise of legislative powers in that respect are (1) Vide Lord Macmillan in Liversidge v. Anderson A.C. 206 at p. 254. ", "251 ", "contained in clauses (4) to (7) of article 22. Clause (4) lays down that no law of preventive detention shall autho- rise the detention of a person for a period longer than three months, unless an advisory board constituted in the manner laid down in sub-clause (a) of the clause has report- ed before the expiration of the period that there is suffi- cient cause for such detention. The period of detention cannot, in any event, exceed the maximum which is entitled to prescribe under clause (7) (b). The is also given the authority to prescribe the circumstances and the class of cases under which a person can be detained for a period longer than three months under any law of preventive detention without obtaining the opin- ion of the advisory board. There is one safeguard provided for all cases which is contained in clause (5) and which lays down that the authority making the order of detention shall, as soon as possible communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. But even here, the authority while giving the grounds of detention need not disclose such facts which it considers against public interest to disclose. The question that we have to consider is whether a law relating to preventive detention is justiciable in a of law on the ground of reasonableness under article 19 (5) of the Constitution inasmuch as it takes away or abridges the right to free movement in the territory of India guaran- teed by clause (1) (d)of the article. It will be seen from what has been said above that article 22 deals specifically with the subject of preventive detention and expressly takes away the fundamental rights relating to arrest and detention enumerated in clauses (1) and (2) of the article from per- sons who are detained under any law which may be passed by the or acting under article 246 of the Constitution read with the relevant items in the legislative lists. I will leave aside for the moment the question as to how far the court can examine the reasonable- ness or otherwise of the procedure that is prescribed by any law relating to preventive detention, for that would involve a considera- tion of the precise scope and meaning of article. 21; but this much is beyond controversy that so far as substantive law is concerned, article 22 of the Constitution gives a clear authority to the legislature to take away the funda- mental rights relating to arrest and detention, which are secured by the'first two clauses of the article. Any legis- lation on the subject would only have to conform to the requirements of clauses (4) to (7) and provided that is done, there is nothing in the language employed nor in the context in which it appears which affords any ground for suggestion that such law must be reasonable in its character and that it would be reviewable by the on that ground. Both articles 19 and 22 occur in the same Part of the Con- stitution and both of them purport to lay down the fundamen- tal rights which the Constitution guarantees. It is well settled that the Constitution must be interpreted in a broad and liberal manner giving effect to all its parts, and the presumption should be that no conflict or repugnancy was intended by its framers. In interpreting the words of a Constitution, the same principles undoubtedly apply which are applicable in construing a statute, but as was observed by Lord in v. Commonwealth of Australia ( 1 ), \"the ultimate result must be determined upon the actual words used not in vacuo but as occurring in a single complex instrument in which one part may throw light on the other.\" \"The Constitution,\" his Lordship went on saying, \"has been described as the federal compact and the construction must hold a balance between all its parts.\" ", "It seems to me that there is no conflict or repugnancy between the two provisions of the Constitution and an exami- nation of the scheme and language of the catena of articles which deal with the rights to freedom would be sufficient to show that what clause (1) (d) of article 19 contemplates is not freedom from detention, either punitive or preventive; it relates to and speaks of a different aspect or phase of civil liberty. ", "(1) [1936] A.C. 578 at p. 613. ", "253 ", " Article 19 , which is the first of this series of arti- cles, enumerates seven varieties or forms of freedom begin- ning with liberty of speech and expression and ending' with free right to practise any trade, profession or business. The rights declared it articles 19 to 22 do not certainly exhaust the whole list of liberties which people possess under law. The object of the framers of the Constitution obviously is to enumerate and guarantee those forms of liberty which come under well-known categories recognised by constitutional writers and are considered to be fundamental and of vital importance to the community. ", "There cannot be any such thing as absolute or uncon- trolled liberty wholly freed from restraint, for that would lead to anarchy and disorder. The possession and enjoyment of all rights, as was observed by in v. Massachusetts (1), are subject to such reasonable conditions as may be deemed by the governing authority of the country essential to the safety, health, peace, general order and morals of the community. The question, therefore arises in each case of adjusting the conflicting interests of the individual and of the society. In some cases, restrictions have to be placed upon free exercise of individual rights to safeguard the interests of the society; on the other hand, social control which exists for public good has got to be restrained, lest it should be misused to the detriment of individual rights and liberties. Ordinarily, every man has the liberty to order his life as he pleases, to say what he will, to go where he will, to follow any trade, occupation or calling at his pleasure and to do any other thing which he can lawfully do without let or hindrance by any other person. On the other hand for the very protection of these liberties the society must arm itself with certain powers. No man's liberty would be worth its name if it can be violated with impunity by any wrong- doer and if his property or possessions could be preyed upon by a thief or a marauder. The society, therefore, has got to exercise certain powers for the protection of these liber- ties and to arrest, search, imprison and (1) 197 U.S. 11. ", "254 ", "punish those who break the law. If these powers are' prop- erly exercised, they themselves are the safeguards of free- dom, but they can certainly be abused. The police may arrest any man and throw him into prison without assigning any reasons; they may search his belongings on the slightest pretext; he may be subjected to a sham trial and even pun- ished for crimes unknown to law. What the Constitution, therefore, attempts to do in declaring the rights of the people is to strike a balance between individual liberty and social control. ", "To me it seems that article 19 of the Constitution gives a list of individual liberties and prescribes in the various clauses the restraints that may be placed upon them by law, so that they may not conflict with public welfare or general morality. On the other hand articles 20, 21 and 22 are primarily concerned with penal enactments or other laws under which personal safety or liberty of persons could be taken away in the interests of the society and they set down the limits within which the control should be exer- cised. Article 19 uses the expression ' 'freedom\" and men- tions the several forms and aspects of it which are secured to individuals, together with the limitations that could be placed upon them in the general interests of the society. Articles 20, 21 and 22 on the other hand do not make use of the expression \"freedom\" and they lay down the restrictions that are to be placed on control where an individual is sought to be deprived of his life or personal liberty. The right to the safety of one's life and limbs and to enjoyment of personal liberty, in the sense of freedom from physical restraint and coercion of any sort, are the inher- ent birthrights of a man. The essence of these rights consists in restraining others from interfering with them and hence they cannot be described in terms of \"freedom\" to do particular things. There is also no question of imposing limits on the activities of individuals so far as the exer- cise of these rights is concerned. For these reasons, I think, these rights have not been mentioned in article 19 of the Constitution. An individual can be deprived of his life or personal liberty only by action of the , either under the provisions of any penal enactment or in the exercise of any other coercive process vested in it under law. What the Constitution does there- fore is to put restrictions upon the powers of the , for protecting the rights of the individuals. The re- straints on authority operate as guarantees of indi- vidual freedom and secure to the people the enjoyment of life and personal liberty which are thus declared to be inviolable except in the manner indicated in these articles. In my opinion, the group of articles 20 to 22 embody the entire protection guaranteed by the Constitution in relation to deprivation of life and personal liberty both with regard to substantive as well as to procedural law. It is not correct to say, as I shah show more fully later on, that article 21 is confined to matters of procedure only. There must be a substantive law, under which the is empow- ered to deprive a man of his life and personal liberty and such law must be a valid law which the legislature is compe- tent to enact within the limits of the powers assigned to it and which does not transgress any of the fundamental rights that the Constitution lays down. Thus a person cannot be convicted or punished under an ex post facto law, or a law which compels the accused to incriminate himself in a crimi- nal trial or punishes him for the same offence more than once. These are the protections provided for by article 20. Again a law providing for arrest and detention must conform to the limitations prescribed by clauses (1) and (2) of article 22. These provisions indeed have been withdrawn expressly in case of preventive detention and protections of much more feeble and attenuated character have been substi- tuted in their place;but this is a question of the policy adopted by the Constitution which does not concern us at all. The position, therefore, is that with regard to life and personal liberty, the Constitution guarantees protection to this extent that no man could be deprived of these rights except under a valid law passed by a competent legislature within the limits mentioned above and in accordance with the procedure which such law lays down. Article 19 , on the other hand, enunciates certain particular forms of civil liberty quite independently of the rights dealt with under article 21. Most of them may be connected with or dependent upon person- al liberty but are not identical with it; and the purpose of article 19 is to indicate the limits within which the could, by legislation, impose restrictions on the exercise of these rights by the individuals. The reasonableness or otherwise of such legislation can indeed be determined by the to the extent laid down in the several clauses of article 19 , though no such review is permissible with regard to laws relating to deprivation of life and personal liber- ty. This may be due to the fact that life and personal freedom constitute the most vital and essential rights which people enjoy under any and in such matters the pre- cise and definite expression of the intention of the legislature has been preferred by the Constitution to the variable standards which the judiciary might lay down. We find the rights relating to personal liberty being de- clared almost in the same terms in the Irish Consti- tution article 40 (1) (4) (1) of which lays down that \"no citizen shall be deprived of his personal liberty save in accordance with law.\" In the Constitution of the Free City of Danzig, \"the liberty of the person has been declared to be inviolable and no limitation or deprivation of personal liberty may be imposed by public authority except by virtue of a law\" (vide article 74 ). Article 31 of the Japanese Constitution is the closest parallel to article 21 of the Indian Constitution and the language is almost identical. This is the scheme adopted by the Constitution in dealing with the rights to freedom described in the chapter on fundamental rights and in my opinion, therefore, the proper test for determining the validity of an enactment under which a person is sought to be deprived of his life and personal liberty has to be found not in article 19 , but in the three following articles of the Constitution. Article 20 of course has no application so far as the law relating to preventive detention is concerned. ", "Mr. 's endeavour throughout has been to establish that article 19 (1) (d) of the Constitution read with article 19 (5) enunciates the fundamental rights of the citizens regarding the substantive law of personal liberty, while article 21 embodies the protection as regards proce- dural law. This, in my opinion, would be looking at these provisions from a wrong angle altogether. Article 19 cannot be said to deal with substantive law merely, nor article 21 with mere matters of procedure. It cannot also be said that the provisions of article 19 (1) (d) read with clause (5) and article 21 are complementary to each other. The con- tents and subject matter of the two provisions are not identical and they proceed on totally different princi- ples. There is no mention of any \"right to life\" in article 19 , although that is the primary and the most important thing for which provision is made in article 21. If the contention of the learned counsel is correct, we would have to hold that no protection is guaranteed by the Constitution as regards right to life so far substantive law is con- cerned. In the second place, even if freedom of movement may be regarded as one of the ingredients of personal liberty, surely there are other elements included in the concept and admittedly no provision for other forms of personal liberty are to be found in article 19 (5) of the Constitution. Furthermore article 19 is applicable to citizens only, while the rights guaranteed by article 21 are for all per- sons. citizens as well as aliens. The only proper way of avoiding these anomalies is to interpret the two provisions as applying to different subjects and this would be the right conclusion if we have in mind the scheme which under- lies this group of articles. ", "I will now turn to the language of article 19 (1) (d) and see whether preventive detention really comes within its purview. Article 19 (1) (d) provides that all citizens shall have the right to move freely throughout the territory of India. The two sub-clauses which come immediately after sub-clause (d) and are intimately connected with it, are in these terms: ", "\"(e) To reside and settle in any part of the territory of India; ", "258 ", "(f) to acquire, hold and dispose of property.\" Clause (5)relates to all these three sub-clauses and lays down that nothing in them shall affect the operation of any existing law in so far as it imposes, or prevent the from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub- clause either in the interests of the general public or for the protection of the interests of any scheduled tribe. I agree with the learned Attorney-General that in con- struing article 19 (1) (d) stress is to be laid upon the expression \"throughout the territory of India,\" and it is a particular and special kind of right, viz., that of free movement throughout the Indian territory, that is the aim and object of the Constitution to secure. In the next sub- clause, right tO reside and settle \"in any part of the territory of India\" is given and here again the material thing is not the right of residence or settlement but the right to reside or settle in any part of the Indian territo- ry. For an analogous provision, we may refer to article 301 which says that subject to the other provisions of this Part, commerce and intercourse throughout the territory of India shall be free. The meaning of sub-clause (d) of arti- cle 19 (1) will be clear if we take it along with sub- clauses (e) and (f), all of which have been lumped together in clause (5) and to all of which the same restrictions including those relating to protecion of the interest of any scheduled tribe have been made applicable. It will be remembered that these rights are available only to citizens. To an alien or foreigner, no guarantee of such rights has been given. Normally all citizens would have the free right to move from one part of the Indian territory to another. They can shift their residence from one place to any other place of their choice and settle anywhere they like. The right of free trade, commerce and intercourse throughout the territory of India is also secured. What the Constitu- tion emphasises upon by guaranteeing these rights is that the whole of Indian Unian in spite of its being divided into a number of s is really one unit as far as the citizens of the Union are concerned. All the citizens would have the same privileges and the same facilities for moving into any part of the territory and they can reside or carry on business anywhere they like; and no restrictions either inter- or otherwise would be allowed to set up in these respects between one part of India and another. ", "So far as free movement throughout the territory is concerned, the right is subject to the provision of clause (5), under which reasonable limitation may be imposed upon these liberties in the interests of the general public or protection of any scheduled tribe. The interests of the public which necessitates such restrictions may be of var- ious kinds. They may be connected with the avoidance of pestilence or spreading of contagious diseases; certain places 'again may be kept closed for military purposes and there may be prohibition of entry into areas which are actual or potential war zones or where disturbances of some kind or other prevail. Whatever the reasons might be, it is necessary that these restrictions must be reasonable, that is to say, commensurate with the purpose for which they are laid down. In addition to general interest, the Constitu- tion has specified the protection of the interests of the scheduled tribes as one of the factors which has got to be taken into consideration in the framing of these restric- tions. The scheduled tribes, as is well known, are a back- ward and unsophisticated class of people who are liable to be imposed upon by shrewd and designing persons. Hence there are various provisions disabling them from alienating even their own properties except under special conditions. In their interest and for their benefit, laws may be made restricting the ordinary right of citizens to go or settle in particular areas or acquire property in them. The refer- ence to the interest of scheduled tribe makes it quite clear-that the free movement spoken of in the clause relates not to general rights of locomotion but to the particular right of shifting or moving from one part of the Indian territory to another, without any sort of discriminatory barriers. ", "This view will receive further support if we look to some analogous provisions ,in the Constitution of other countries. It will be seen that sub-clauses (d) (e) and (f)of article 19 (1) are embodied in almost identical language in one single article, viz., article 75 of the Constitution of the Free City of Danzig. The article runs as follows: ", "\"All nationals shall enjoy freedom of movement within the free city and shall have the right to stay and to settle at any place they may choose, to acquire real property and to earn their living in any way. This right shall not be curtailed without legal sanctions.\" ", "The several rights are thus mentioned together as being included in the same category, while they are differentiated from the \"liberty of the person\" which is \"described to be inviolable except by virtue of a law\" in article 74 which appears just previous to this article. An analogous provi- sion in slightly altered language occurs in article 111 of the Constitution of the German Reich which is worded in the following manner: ", "All Germans enjoy the right of change of domicile within the whole Reich. Every one has the right to stay in any part of the Realm that he chooses, t6 settle there, acquire landed property and pursue any means of livelihood.\" Here again the right to personal liberty has been dealt with separately in article 114. A suggestion was made in course of our discussions that the expression \"throughout the territory of India\" occurring in article 19 (1) (d) might have been used with a view to save Passport Regulations or to emphasise that no rights of free emigration are guaran- teed by the Constitution. The suggestion does not seem to me to be proper. No State can guarantee to its citizens the. free right to do anything outside its own territory.This is true of all the fundamental rights men- tioned in article 19 and not merely of the right of free movement. Further it seems to me that the words \"throughout the territory of India\" have nothing to do with rights of emigration. We find that both in the Danzig as well as in the German Constitution, where similar words have been used with regard to the excercise of the right of free movement throughout the. ", "261 ", "territory, there are specific provisions which guarantee to all nationals the free right of emigration to other coun- tries (vide article 76 of the Danzig Constitution and arti- cle 112 of the Constitution of the German Reich). In my opinion, therefore, preventive detention does not come either within the express language or within the spirit and intendment of clause (1) (d) of article 19 of the Constitu- tion which deals with a totally different aspect or form of civil liberty. ", "It is true that by reason of preventive detention, a man may be prevented from exercising the right of free movement within the territory of India as contemplated by article 19 (1) (d) of the Constitution, but that is merely incidental to or consequential upon loss of liberty resulting from the order of detention. Not merely the right under clause (1) ", "(d), but many of the other rights which are enumerated under the other-sub-clauses of article 19 (1) may be lost or suspended so long as preventive detention continues. Thus a detenu so long as he is under detention may not be able to practise any profession, or carry on any trade or business which he might like to do; but this would not make the law providing for preventive detention a legislation taking away or abridging the rights under article 19 (1) (g) of the Constitution and it would be absurd to suggest that in such cases the validity of the legislation should be tested in accordance with the requirement of clause (6) of article 19' and that the only restrictions that could be placed upon the person's free exercise of trade and profession are those specified in that clause. Mr. concedes that in such cases we must look to the substance of the particular legis- lation and the mere fact that it incidentally trenches upon some other right to which it does not directly relate is not material. He argues, however, that the essence or substance of a legislation which provides for preventive detention is to take away or curtail the right of free move- ments and in fact, \"personal liberty\" according to him, connotes nothing else but unrestricted right of locomotion. The learned counsel refers in this connection to certain passages in 's Commentaries on the Laws of Eng- land, where the author discusses what he calls the three absoluterights inherent in every Englishman, namely, rights of personal security, personal liberty and property. \"Personal security\", according to , consists in a person's legal and uninterrupted enjoyment of his life, his limb, his body, his health and his reputation; whereas \"personal liberty\" consists in the power of locomotion, of changing of situation or moving one's person to whatsoever place one's own inclination may direct without imprisonment or restraint unless by due course of law (1). It will be seen that uses the expression \"personal liberty\" in a somewhat narrow and restricted sense. A much wider and larger connotation is given to it by later writers on con- stitutional documents, particularly in America. In ordinary language \"personal liberty\" means liberty relating to or concerning the person or body of the individual; and \"per- sonal liberty\" in this sense is the antithesis of physical restraint or coercion. According to , who is an acknowledged authority on the subject \"personal liberty\" means a personal right not to be subjected to imprisonment, arrest or other physical coercion in any manner that does not admit of legal justification(2). It is, in my opinion, this negative right of not being subjected to any form of physical restraint or coercion that constitutes the essence of personal liberty and not mere freedom to move to any part of the Indian territory. ", "In this connection, it may not be irrelevant to. point out that it was in accordance with the recommendation of the'Drafting Committee that the word \"personal\" was inserted before \"liberty\" in article 15 of the Constitution which now stands as article 21. In the report of it is stated that the word \"liberty\" should be quali- fied by the insertion of the word \"personal\" before it; otherwise, it might be construed very widely so as to in- clude even the freedoms already dealt with in article 13. Article. 13, it should be noted, is the present article 19. If the views of were accepted by the (1) Vide Chase's Blackstone, 4th Edn, pp. 68, 73. (2) Vide Dicey on Constitutional Law, 9th Edn, pp. 207-208. ", "263 ", ", the intention obviously was to exclude the contents of article 19. from the concept of \"personal liberty\" as used in article 21. To -what extent the meaning of words used in the Constitution could be discovered from reports of or debates on the floor of the is a matter not quite free from doubt and I may have to take up this matter later on when discussing the meaning of the material clause in article 21 of the Constitution. It is enough to say at this stage that if the report of the is an appropriate material upon which the interpretation of the words of the Constitution could be based, it certainly goes against the contention of the applicant and it shows that the words used in article 19 (1) ", "(d) of the Constitution do not mean the same thing as the expression \"personal liberty\" in article 21 does. It is well known that the word \"'liberty\" standing by itself has been given a very wide meaning by of the United States of America. It includes not only personal freedom from physical restraint but the right to the free use of one's own property and to enter into free contractual relations, In the Indian Constitution, on the other hand, the expression \"personal liberty\" has been deliberately used to restrict it to freedom from physical restraint of person by incarceration or otherwise. Apart from the report of , that is the plain grammatical meaning of the expression as I have already explained. It may not, I think, be quite accurate to state that the operation of article 19 of the Constitution is limited to free citizens only and that the rights have been described in that article on the presupposition that the citizens are at liberty. The deprivation of personal liberty may entail as a consequence the loss or abridgement of many of the rights described in article 19 , but that is because the nature of these rights is such that free exercise of them is not possible in the absence of personal liberty. On the other hand, the right to hold and dispose of property which is in subclause (f) of article 19 (1) and which is not dependent on full possession of personal liberty by the owner may not be affected if the owner is imprisoned or detained. Anyway, the point is not of much importance for purposes of the present discussion. The result is that, in my opinion, the first contention raised by Mr. cannot succeed and it must be held that we are not entitled to examine the reasonableness or otherwise of the Preventive Detention Act and see whether it is within the permissible bounds specified in clause (5) of article 19. ", "I now come to the second point raised by Mr. in support of the application; and upon this point we had arguments of a most elaborate nature addressed to us by the learned counsel on both sides, displaying a considerable amount of learning and research. The point, however, is a short one and turns upon the interpretation to be put upon article 21 of the Constitution, which lays down that \"no person shall be deprived of his ........ personal liberty, except according to procedure established by law.\" On a plain reading of the article the meaning seems to be that you cannot deprive a man of his personal liberty, unless you follow and act according to the law which provides for deprivation of such liberty. The expression \"procedure\" means the manner and form of enforcing the law. In my opinion, it cannot be disputed that in order that there may be a legally established procedure, the law which establish- es it must be a valid and lawful law which the legislature is competent to enact in accordance with article 245 of the Constitution and the particular items in the legislative lists which it relates to. It is also not disputed that such law must not offend against the fundamental rights which are declared in Part III of the Constitution. The position taken up by the learned Attorney-General is that as in the present case there is no doubt about the competency of that to enact the law relating to preventive detention which is fully covered by Item 9 of List I, and Item 3 of List III, and as no question of the law being reasonable or otherwise arises for consideration by reason of the fact that article 19 (1) (d) is not attracted to this case, the law must be held to be a valid piece of legisla- tion and if the procedure laid down by it has been adhered to, the validity of the detention cannot possibly be challenged. His further argu- ment is that article 22 specifically provides for preventive detention and lays down fully what the requirements of a legislation on the subject should be. As the impugned Act conforms to the requirements of article 22 , no further ques- tion of its validity under article 21 of the Constitution at all arises. The latter aspect of his arguments, I will deal with later on. So far as the main argument is concerned,the position taken up by Mr. is that article 21 refers to 'procedure only and not to substan- tive law the procedure, however, must be one which is established by law. The expression \"law\" in this context does not mean or signify, according to the learned counsel, any particular law enacted by the legislature in conformity with the requirements of the Constitu- tion or otherwise possessing a binding authority. It refers to law in the abstract or general sense--in the sense of jus and not lex--and meaning thereby the legal principles or fundamental rules that lie at the root of every system of positive law including our own, and the authority of which is acknowledged in the jurisprudence of all civilised coun- tries. It is argued that if the word \"law\" is interpret- ed in the sense of any -made law, article 21 could not rank as a fundamental right imposing a check or limitation on the legislative authority of the Government. It will be always competent to the legislature to pass a law laying down a thoroughly arbitrary and irrational procedure opposed to all elementary principles of justice and fairness and the people would have no protection whatsoever, provided such procedure was scrupulously adhered to. In support of this argument the learned counsel has relied upon a large number of American cases, where ap- plied the doctrine of \"due process of law\" as it appears in the American Constitution for the purpose of invalidating various legislative enactments which appeared to that Court to be capricious and arbitrary and opposed to the fundamen- tal principles of law. ", "266 ", "It may be noted here that in the original draft of the Indian Constitution the words used in article 15 (which now stands as article 21 ) were \"in accordance with due process of law.\" recommended that in place of the \"due process\" clause, the expression \"according to procedure established by law\" should be substituted. The present article 21 seems to have been modeled on article 31 of the Japanese Constitution, where the language employed is \"no person shall be deprived of'life or liberty, nor shall any other criminal penalty be imposed, except according to procedure established by law.\" Mr. argues that the expression \"procedure established by law\" in article 21 of the Constitution bears the same meaning as the \"due process\" clause does in America, restricted only to this extent, viz., that it is limited to matters of procedure and does not extend to questions of substantive law. To appre- ciate the arguments that have been advanced for and against this view and to fix the precise meaning that is to be given to this clause in article 21 , it would be necessary to discuss briefly the conception of the doctrine of \"due process of law\" as it appears in the American Constitution and the way in which it has been developed and applied by . ", "In the history of Anglo-American law, the concept of \"due process of law\" or what is considered to be its equiva- lent \"law of the land\" traces its lineage far back into the beginning of the 13th century A.D. The famous 39th chapter of the Magna Charta provides that \"no free man shall be taken or imprisoned or disseized, or outlawed or exiled or in any way destroyed; nor shall we go upon him nor send upon him but by the lawful judgment of his peers and by the law of the land.\" Magna Charta as a charter of English liberty was confirmed by successive English monarchs and it is in one of these confirmations (28 Ed. III, Chap. 3) known as \"Statute of Westminster of the liberties of London\", that the expression \"due process of law\" for the first time appears. Neither of these phrases was explained or defined in any of the ", "-documents, but on the authority of Sir it may be said that both the expressions have the same meaning. In substance, they guaranteed that persons should not be imprisoned without proper indictment and trial by peers, and that property should not be seized except in proceedings conducted in due form in which the owner or the person in possession should have an opportunity to show cause why seizure should not be made (1). These concepts came into America as part of the rights of Englishmen claimed by the colonists. The expression in one form or other appeared in some of the earlier State Constitutions and the exact phrase \"due process of law\" came to be a part of the Federal Constitution by the Fifth Amendment which was adopted in 1791 and which provided that \"no person shall... be deprived of life, liberty or property without due process of law.\" It was imposed upon the State Constitution in almost identical language by the Fourteenth Amendment in the year 1868. What \"due process of law\" exactly means is difficult to define even at the present day, The Constitution contains no description of what is \"due process of law\" nor does it declare the principles by application of which it could be ascertained. In v. New Jersey (2) the ob- served: ", "\"Few phrases in the law are so elusive of exact appre- hension as this. This has always declined to give a comprehensive definition of it and has preferred that its full meaning should be gradually ascertained by the process of inclusion and exclusion in the course of the decisions of cases as they arise.\" ", "It is clear, however, that the requirement of \"due process of law\" in the United States Constitution imposes a limitation upon all the powers of Government, legislative as well as executive and judicial. Applied in England only as protection against executive usurpation and royal tyranny, in America it became a bulwark against arbitrary legislation (3). ", "(1) Vide Willoughby on the Constitution of the United States, Vol. III, p. 1087. ", "(2) 211 U.S. 79. ", "(3) v. People of California, 110 U.S. 516 at p. 532. ", "268 ", "As it is a restraint upon the legislative power and the- object is to protect citizens against arbitrary and capri- cious legislation, it is not within the competence of the to make any process a \"due process of law\" by its mere will; for that would make the limitation quite nugato- ry. As laid down in the case cited above, \"it is not any act legislative in form that is law; law is something more than mere will exerted as an act of power.\" It means and signifies the general law of the land, the settled and abid- ing principles which inhere in the Constitution and lie at the root of the entire legal system. To quote the words of in a famous argument before.the (1): ", "\"By the law of the land is most clearly intended the general law--a law which hears before it condemns, which proceeds upon enquiry and renders judgment only after trial. The meaning is that every citizen shall hold his life, liberty, property and immunities under the protection of the general rules which govern society.\" ", "What these principles of general law are nobody has ever attempted to enumerate. To a large extent they are the principles of English common law and modes of judicial pro- ceedings obtaining in England, the traditions of which came along with the settlers in America. Some Judges seem to have alluded to the principles of natural justice in ex- plaining what is meant by general law or \"law of the land,\" though the doctrine of a law of nature did not obtain a firm footing at any time. In v. New York (2), Justice declared himself opposed to the judiciary attempting to set bounds to the legislative authority or declaring a statute invalid upon any fanciful theory of'higher law or first principles of natural right outside of the Constitu- tion. 's dictum of a supreme fundamental law which obviously referred to principles of English common law cer- tainly did exercise considerable influence upon the minds of the American Judges (3) and there are observations in some cases (1) case, 4 p. 518. (2) 13 N.Y. 379. ", "(3) on Constitutional Law, p. 647. ", "269 ", "which go to suggest that the principles of natural justice were regarded as identical with those of common law, except where the rules of common law were not considered to be of fundamental character or were not acted upon as being un- suited to the progress of time or conditions of the American Society (1). In the case of v. Topeka (2), it was observed that there are limitations upon powers of Government which grow out of the essential nature of free Governments--implied reservations of individual rights without which the social compact could not exist and which are respected by all Governments entitled to the name. What is hinted at, is undoubtedly the old idea of a social com- pact under which political institutions were supposed to come into being; and the suggestion is that when the Ameri- cans formed themselves into a by surrendering a por- tion of their rights which they possessed at that time and which presumably they inherited from their English ancestors, there were certain rights of a fundamental character still reserved by them which no could possibly take away. ", "As has been said already, \"due process of law\" has never been defined by Judges or Jurists in America. The best description of the expression would be to say that it means in each particular case such an exercise of the powers of Government as the settled maxims of law permit and sanction, and under such safeguards for the protection of individual rights as those maxims prescribe for the class of cases to which the one in question belongs (3). ", "In the actual application of the clause relating to \"due process of law\" to particular cases the decisions of present certain peculiar and unusu- al features and there is total lack of uniformity and consistency in them. Ever since the appearance of the clause in the Fifth Amendment and down to the middle of the 19th century, it was interpreted as a restriction on proce- dure, and particularly the judicial procedure, by which the Government (1) Cooley's Constitutional Limitations, Vol. II, p. 73940. (2) 20 Wall, p. 655. (3) Cooley's Constitutional Limita- tions, Vol. II, p. 741. ", "270 ", "exercises its powers. Principally it related to the proce- dure by which persons were tried for crimes and guaranteed to accused persons the right to have a fair trial in compli- ance with well established criminal proceedings. The same principle applied to the machinery or proceeding by which property rights were adjudicated and by which the powers of eminent domain and taxation were exercised. During this period it was not considered to have any bearing on substan- tial law at all. ", "Change, however, came in and the period that followed witnessed a growing recognition of the doctrine that sub- stantive rights of life, liberty and property are protected by the requirement of due process of law against any depri- vation attempted at by legislative authority; and the polit- ical and economic conditions of the country accounted to a great extent for this change in judicial outlook. The close of the civil war brought in a new period of industrial development leading to accumulation of large capital in the hands of industrialists and the emergence of a definite labouring class. New and important problems arose which the States attempted to deal with by various laws and regu- lations. Some of them seem to have been ill-advised and arbitrary and there was a clamour amongst businessmen against what they described as legislative encroachments upon their vested private rights. now began to use the rule of due process of law as a direct restraint upon substantial legislation and any statute or administrative act, which imposed a limitation upon rights of private property or free contractual relations between the employers and employed, was invalidated as not being in accordance with due process of law (1). What constituted a legitimate exercise of the powers of legislation now came to be a judicial question and no statute was valid unless it was. reasonable in the opinion of the . The question of reasonableness obviously depends largely upon the. ideas of particular individuals and the s or rather the majority of Judges thus marshalled their own (1) Vide Encyclopaedia of the Social Sciences, Vol. V, pp. 265-67. ", "271 ", "views of social and economic policy in deciding the reasona- bleness or otherwise of the statutes. In the language of a well-known writer, the became a kind of negative third chamber both to the State Legislatures and the Con- gress(1). To what extent the laid stress upon the doctrine of freedom of contract is illustrated in the case of v. New York(2). In that case the question arose as to the validity of a labour legislation which prohibited the employment of persons in certain fields of activity for more than 60 hours a week. was indicted for violat- ing this law by employing a man in his Biscuit and Cake Factory who was to work more than 60 hours in a week. The by a majority of 5 to 4 held the statute to be invalid on the ground that the \"right to purchase or sell labour is part of the liberty protected by the Amendment unless there are circumstances which excluded the right.\" That decision has been criticized not merely on the ground that it rested upon an economic theory which to quote the language of , who was one of the dissentient Judges \"was not entertained by a large part of the country;\" but it ignored that such regulation was necessary for protecting the health of the employees, that is to say, it was in substance an exercise of police powers with a view to accomplish some object of public interest(s). ", "It may be mentioned here that while the due process doctrine was being extended by judicial pronouncements, the doctrine of police power which operates to some extent as a check upon the \"due process\" clause was simultaneously gaining importance. Roughly speaking, police power may be defined as \"a right of a to regulate the conduct of its people in the interests of public safety, health, morals and convenience. Under this authority, a may make regulations concerning the safety of building, the regulation of traffic, the reporting of incurable diseases, the inspection of markets, the sanitation of factories, the hours of work for women (1) Vide Kelley and on the American Constitution, p. 539. ", "198 u.s. 45. ", "Vide Willoughby on the Constitution of the U.S., Vol. III, p. 271. ", "272 ", "and children, the sale of intoxicants and such other matters ,,(1). Here again, the extent to which the can inter- fere with exercise of police powers by the has not been clearly defined by judicial pronouncements. The doc- trine generally accepted is that although any enactment by legislature under the guise of exercise of police powers would not necessarily be constitutional, yet if the regula- tion has a direct relation to its proposed object which is the accomplishment of some legitimate public purpose, the wisdom or policy of the legislation should not be examined by the s. The rule is not without its exceptions but it is not necessary to elaborate them for our present pur- pose(2). The later decisions, though not quite uniform, reveal the growing influence of the police power doctrine. It may be said that since 1936 there has been a definite swing of the judicial pendulum in the other direction. In the case of v. Parrish(3) which related to the legality of a Statute for regulating the minimum wages of women, Chief Justice Hughes, who delivered the opinion of the , observed as follows: \"In each case the violation alleged by those attack- ing minimum wage regulation for women is deprivation of freedom of contract. What is the freedom? The Constitution does not speak of freedom of contract. It speaks of liberty and prohibits the deprivation of liberty without due process of law. In prohibiting that deprivation the Constitution does not recognise an absolute and uncontrol- lable liberty. Liberty in each of its phases has its histo- ry and connotation. But the liberty safeguarded is liberty in a social organisation which requires the protection of law. against the evils which menace the health, safety, morals and welfare of the people.\" ", "In the succeeding years the indications certainly are that the requirement of due process of law as a substantial restriction on Government control is becoming a thing of the past and the rule is being restricted more (1) Vide Munroe--The Government of the U.S., p. 522. (2) Vide Willoughby on the Constitution of the U.S. Vol. III, pp. 1709-70. ", "(3) 300 U.S. 379. ", "273 ", "and more to its original procedural meaning. What will happen in future cannot certainly be predicted at this stage(1). ", "Thus it will be seen that the \"due process\" clause in the American Constitution came to be used as a potent in- strument in the hands of the judiciary for exercising con- trol over social legislation. The judicial pronouncements are not guided by any uniform principle, and the economic and social ideas of the Judges, who form the majority in for the time being, constitute, so to say, the yard-stick for measuring the reasonableness or otherwise of any enactment passed during that period. No writer of American Constitutional Law has been able uptil now to evolve anything like a definite and consistent set of prin- ciples out of the large mass of cases, where the doctrine of \"due process of law\" has been invoked or applied. ", "It is against this background that we must consider how the constitution-makers in India dealt with and gave final shape to the provisions, on an analogous subject in the Indian Constitution. In the Draft Constitution, article 15 (which now stands as article 21 ) was apparently framed on the basis of the 5th and 14th Amendments in the American Constitution. The article was worded as follows: ", "\"No person shall be deprived of his life or liberty without due process of law.\" ", " in their report recommended a change in the language of this article. The first sugges- tion was that the word \"personal\" shall be inserted before the word \"liberty\" and the second was that the expression \"in accordance with procedure established by law\" shall be substituted for \"due process of law,\" the reason given being that the former expression was more specific. ", "The learned Attorney-General has placed before us the debates in centering round the adoption of this recommendation of and he has referred us to the (1) Swisher--The Growth of Constitutional Power in the United States, pp. 123-25. ", "274 ", "speeches of several members of the who played an important part in the shaping of the Constitution. As an aid to discover the meaning of the words in a Consti- tution, these debates are of doubtful value. ''Resort can be had to them\"' says , ''with great caution and only when latent ambiguities are to be solved. The proceed- ings may be of some value when they clearly point out the purpose of the provision. But when the question is of ab- stract meaning, it will be difficult to derive from this source much material assistance in interpretation\"(1). The learned Attorney-General concedes that these debates are not admissible to explain the meaning of the words used and he wanted to use them only for the purpose of showing that the Constituent when they finally adopted the recommendation of , were fully aware of the implications of the differences between the old form of expression and the new. In my opinion, in interpreting the Constitution, it will be better if such extrinsic evi- dence is left out of account. In matters like this, differ- ent members act upon different impulses and from different motives and it is quite possible that some members accepted certain words in a particular sense, while others took them in a different light. ", "The report of , however,has been relied upon by both parties and there are decided authori- ties in which a higher value has been attached to such reports than the debates on the floor of the . In v. United States (2), it is said that reports to accompanying the introduction of proposed law may aid the in reaching the true meaning of the legisla- tion in case of doubtful interpretation. The report is extremely short. It simply says that the reason for the suggested change is to make the thing more specific. I have no doubt in my mind that if the \"due process\" clause which appeared in the original draft was finally retained by , it could be safely presumed that the framers of the Indian (1) Vide Willoughby on the Constitution of the United States, p. 64. ", "(2) 242 U.S. 470. ", "275 ", "Constitution wanted that expression to bear the same sense as it does in America. But when that form was abandoned and another was deliberately substituted in its place, it is not possible to say that in spite of the difference in the language and expression, they should mean the same thing and convey the same idea. Mr. 's contention is that in view of the somewhat uncertain and fluidic state of law as prevails in America on the subject, recommended an alteration for the purpose of making the language more specific and he would have us hold that it was made specific in this way, namely, that instead of being extended over the whole sphere of law, substantive as well as adjective, it was limited to procedural law mere- ly. That is the reason, he says, why instead of the word \"process\" the expression \"procedure\" was adopted, but the word \"law\" means the same thing as it does in the \"due process\" clause in America and refers not to any -made law but to the fundamental principles which are inherent in the legal system and are based upon the immutable doctrines of natural justice. ", "Attractive though this argument might at first sight appear, I do not think that it would be possible to accept it as sound. In the first place, it is quite clear that the framers of the Indian Constitution did not desire to intro- duce into our system the elements of uncertainty, vagueness and changeability that have grown round the \"due process\" doctrine in America. They wanted to make the provision clear, definite and precise and deliberately chose the words\" procedure established by law,\" as in their opinion no doubts would ordinarily arise about the meaning of this expression. The indefiniteness in the application of the \"due process\" doctrine in America has nothing to do with the distinction between substantive and procedural law. The uncertainty and elasticity are in the doctrine itself which is a sort of hidden mine, the contents of which nobody knows and is merely revealed from time to time to the. judicial conscience of the Judges. This theory, the Indian Constitu- tion deliberately discarded and that is why they substituted a different form in its place which, according to them, was more specific. In the second place, it appears to me that when the same words are not used, it will be against the ordinary canons of con- struction to interpret a provision in our Constitution in accordance with the interpretation put upon a somewhat analogous provision in the Constitution of another country, where not only the language is different, but the entire political conditions and constitutional set-up are dissimi- lar. In , stress has been laid uniformly upon the word \"due\" which occurs before and quali- fies the expression \"process of law.\" \"Due\" means \" what is just and proper\" according to the circumstances of a particular case. It is this word which introduces the varia- ble element in the application of the doctrine; for what is reasonable in one set of circumstances may not be so in another and a different set. In the Indian Constitution the word \"due\" has been deliberately omitted and this shows clearly that the Constitution-makers of India had no inten- tion of introducing the American doctrine. The word \"estab- lished\" ordinarily means \"fixed or laid down\" and if \"law\" means, as Mr. contends, not any particular piece of law but the indefinite and indefinable principles of natural justice which underlie positive systems of law, it would not at all be appropriate to use the expression \"established,\" for natural law or natural justice cannot establish anything like a definite procedure. ", "It does not appear that in any part of the Constitution the word \"law\" has been used in the sense of \"general law\" connoting what has been described as the principles of natural justice outside the realm of positive law. On the other hand, the provision of' article 31 of the Constitu- tion, which appears in the. chapter on Fundamental Rights, makes it clear that the word \"law\" is equivalent to State- made law and to deprive a person of his property, the au- thority or sanction of such law is necessary. As has been said already, the provision of article 21 of. the Indian Constitution reproduces, save in one particular, the- ", "277 ", "language of article 31 of the Japanese Constitution and it is quite clear from the scheme and provisions of the Japa- nese Constitution that in speaking of law it refers to law passed or recognised as such by the . In the Irish Constitution also, there is provision in almost similar language which conveys the same idea. Article 40 (4) (1) provides that \"no citizen shall be deprived of his personal liberty save in accordance with law,\" and by law is certain- ly meant the law of the . ", "Possibly the strongest argument in support of Mr. contention is that if law is taken to mean -made law, then article 21 would not be a restriction on legisla- tion at all. No question of passing any law abridging the right conferred by this article could possibly arise and article 13 (2) of the Constitution would have no operation so far as this provision is concerned. To quote the words of an American Judge it would sound very much like the Constitution speaking to the legislature that the latter could not infringe the right created by these articles unless it chose to do so (1). ", "Apparently this is a plausible argument but it must be admitted that we are not concerned with the policy of the Constitution. The fundamental rights not merely impose limitations upon the legislature, but they serve as checks on the exercise of executive powers as well, and in the matter of depriving a man of his personal liberty, checks on the high-handedness of the executive in the shape of pre- venting them from taking any step, which is not in accord- ance with law, could certainly rank as fundamental rights. In the Constitutions of various other countries, the provi- sions relating to protection of personal liberty are couched very much in the same language as in article 21. It is all a question of policy as to whether the legislature or the judiciary would have the final say in such matters and the Constitution-makers of India deliberately decided to place these powers in the hands of the legislature. Article 31 of the Japanese Constitution, upon which article 21 of our Constitution is modelled, also (1) Vide per 5. in v. 4 Hill 1<0. ", "278 ", "proceeds upon the same principle. The Japanese Constitu- tion, it is to be noted, guarantees at the same. time other rights in regard to arrest, detention and access to which might serve as checks on legislative authority as well. Thus article 32 provides: ", "\"No person shall be denied the right of access to the Courts.\" ", "Article 34 lays down: ", "\"No person shall be arrested or detained without being at once informed of the charges against him or without the immediate privilege of counsel, nor shall he be detained without adequate cause; and upon demand of any person, such cause must be immediately shown in open Court in his presence and in the. presence of his counsel.\" ", "It was probably on the analogy of article 34 of the Japanese Constitution that the first two clauses of article 22 of the Indian Constitution were framed. Article 22 was not in the original Draft Constitution at all; and after the \"due process\" clause was discarded by the Constituent and the present form was substituted in its place in article 21 , article 22 was introduced with a view to provide for some sort of' check in matters of arrest and detention and the protection it affords places limitations upon the authority of the legislature as well. These protections indeed have been denied to cases of preventive detention but that again is a question of policy which does not concern us as a . My conclusion, therefore, is that in article 21 the word \"law\" has been used in the sense of -made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice. The article presupposes that the law is a valid and binding law under the provisions. of the Constitution having regard to the competency of the legislature and the subject it relates to and does not infringe any of the fundamental rights which the Constitution provides for. ", "In the view that I have taken, the question raised by Mr. that the Preventive Detention Act is invalid, by reason of the fact that the procedure it lays down is not in conformity with the rules of natural justice, does not fall for consideration. It is enough, in my opin- ion, if the law is a valid law which the legislature is competent to pass and which does not transgress any of the fundamental rights declared in Part III of the Constitution. It is also unnecessary to enter into a discussion on the question raised by the learned Attorney-General as to wheth- er article 22 by itself is a self-contained Code with regard to the law of Preventive Detention and whether or not the procedure it lays down is exhaustive. Even if the procedure is not exhaustive, it is not permissible to supplement it by application of the rules of natural justice. On the third point raised by Mr. , the only question, therefore, which requires consideration is whether section 12 of the Preventive Detention Act is ultra vires of the Constitution by reason of its being not in conformity with the provision of article 22 (7)(a). Article 22 (7) (a) of the Constitution empowers the to prescribe the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an advisory board in accordance with the provisions of sub-clause (a) of clause (4). Section 12 of the Preventive Detention Act which purports to be an enact- ment in pursuance of article 22 (7) (a) of the Constitution provides as follows: ", "\"(1) Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of an advisory board for a period longer than three months, but not exceeding one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to ", "(a) the defence of India, relations of India with for- eign powers or the security of India; or ", "(b) the security of a or the maintenance of public order.\" ", "It will be noticed that there are altogether six heads or subjects in the two Items in the legislative lists, namely, Item No. 9 of List I and Item No. 3 of List III which deal with preventive detention. Item No. 9 of List I mentions reasons connected with defence, foreign affairs and security of India, while Item No. 3 of List III speaks of reasons connected with security of a State, the maintenance of public order and the maintenance of supplies and services essential to the community. With the exception of the last head; all the remaining five have been listed in section 12 of the preventive Detention Act and they have been mentioned both as circumstances and classes of cases in which deten- tion for more than three months would be permissible without the opinion of any advisory board. Mr. 's argument is that the mentioning_ of five out of the six legislative heads in section 12 does not amount to prescribing the circumstances under which, or the classes of cases in which, a person could be detained for more than three months as contemplated by article 22 (7) (a). It is also contended that in view of the fact that the two items \"circumstances\" and \"classes\" are separated by the conjunction \"and,\" what the Constitution really contemplated was that both these items should be specified and a statement or specification of any one of them would not be a proper compliance with the provisions of the clause. It is further pointed out that the mentioning of the same matters as \"circumstances\" or \"classes\" is not warranted by article 22 (7) of the Consti- tution and is altogether illogical and unsound. ", "I must say that section 12 has been drafted in a rather clumsy manner and certainly it could have been framed in a better and more proper way. Under article 22(7)(a ), the may specify the circumstances under which, and the classes of cases in which, the necessity of placing the cases of detention for examination by the advisory board could be dispensed with. By \"classes of cases\" we mean certain determinable groups, the individuals comprised in each group being related to one another in a particular way which constitutes the determining factor of that group. \"Circumstances\" on the other hand connote situations or conditions which are external to the persons concerned. Preventive detention can be provided for by law for reasons connected with six different ,matters specified in the relevant items in the legislative lists, and whatever the reasons might be, there is a provision contained in article 22 (4) (a) which lays down that deten- tion for more than three months could not be permitted except with the sanction of the advisory board. An alterna- tive however has been provided for by clause (b) and Parlia- ment has been given the option to take away the protection given by clause (a) and specify the circumstances and the cases when this rule will not apply. I am extremely doubt- ful whether the classification of cases made by in section 12 of the Act really fulfils the object which the Constitution had in view. The basis of classification has been the apprehended acts of the persons detained described with reference to the general heads mentioned in the items in the legislative lists as said above. Five out of the six heads have been taken out and labelled as classes of cases to which the protection of clause (4) (a) of the article would not be available. It is against common sense that all forms of activities connected with these five items are equally dangerous and merit the same drastic treatment. The descriptions are very general and there may be acts of various degrees of intensity and danger under each one of these heads. ", "Although I do not think that section 12 has been framed with due regard to the object which the Constitution had in view, I am unable to say that the section is invalid as being ultra vires the Constitution. The Constitution has given unfettered powers to in the matter of making the classifications and it is open to the to adopt any method or principle as it likes. If it chose the principle implied in the enumeration of subjects under the relevant legislative heads, it cannot be said that has exceeded its powers. ", "I am also unable to hold that both \"circumstances\" as well as \"classes\" have to be prescribed in order to comply with the requirement of sub-clause (a) of article 22 (7). The sub-clause (a) of the article lays down a purely enabling provision and , if it so chooses, may pass any legislation in terms of the same. Where an optional power is conferred on certain authority to perform two separate acts, ordinarily it would not be obligatory upon it to perform both; it may do either if it so likes. Here the classes have been specified and the classes apparently are composed of persons who are detained for the purpose of preventing them from committing certain apprehended acts. I am extremely doubtful whether the classes themselves could be described as \"circumstances\" as they purport to have been done in the section. \"Circumstances\" would ordinarily refer to conditions like war, rebellion, communal disturbances and things like that, under which extra precaution might be :necessary and the detention of suspected persons beyond the period of three months without the sanction of the advisory board might be justified. It is said that the likelihood of these persons committing the particular acts which are specified might constitute \"circumstances.\" In my opinion, that is not a plain and sensible interpretation. But whatev- er that may be, as I am of opinion that it is not obligatory on to prescribe both the circumstances and the classes of cases, I am unable to hold that section 12 is ultra vires the Constitution because the circumstances are not mentioned. As I have said at the beginning, the draft is rather clumsy and I do not know why used the word \"or\" when in the Constitution itself the word \"and\" has been used. ", "In the fourth and last point raised by Mr. the principal question for consideration is the validity of section 14 of the Preventive Detention Act. Subsection (1)of section 14 prohibits any from allowing any statement to be made or any evidence to be given before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or any representation made by him against such order. It further provides that no shall be entitled to require any public officer to produce before it or to disclose the substance of any such communication or representation made or the proceedings of an advisory board or that part of the report of an advisory board which is confidential. Sub-section (2) further provides that: ", "\"It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of or , as the' case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub-section (1): ", "Provided that nothing in this sub-section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order.\" ", "The provisions of this section are obviously of a most drastic character. It imposes a ban on the and pre- vents it from allowing any statement to be made or any evidence produced before it of the substance of any communi- cation made to the detenu apprising him of the grounds upon which the detention order was made. The is also incompetent to look into the proceedings before the advisory board or the report of the latter which is confidential. Further the disclosure of such materials has been made a criminal offence punishable with imprisonment for a term which may extend to one year. Mr. 's contention is that these restrictions render utterly nugatory the provi- sions of article 32 of the Constitution which guarantees to every person the right to move this by appropriate proceedings for the enforcement of the rights conferred by Part III of the Constitution. It is not disputed that the petitioner has the right of moving this for a writ of habeas corpus, and unless the is in a position to look into and examine the grounds upon which the detention order has been made, it is impossible for it to come to any deci- sion on the point and pass a proper judgment. Though the right to move this is not formally taken away, the entire proceedings are rendered ineffective and altogether illusory. On behalf of the respondent, it is pointed out that article 32 guarantees only the right to constitutional remedy for enforcement of the rights which are declared by the Constitution. If there are no rights under the Constitution, guaranteed to a person who is detained under any law of preventive deten- tion, no question of enforcing such rights by an ap- proach to this at all arises. I do not think that this argument proceeds on a sound basis; and in my opinion, section 14 does take away and materially curtails some of the fundamental rights which are guaranteed by the Constitu- tion itself. Article 22 , clause (5), of the Constitution lays down as a fundamental right that when a person is detained for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made, and shall afford him the earliest opportunity of making a representa- tion against the order. Under clause (6), the authority need not disclose such facts as it considers to be against public interest to disclose. But so far as the grounds are concerned, the disclosure is not prohibited under any cir- cumstance. It is also incumbent upon the detaining authori- ty to afford a detenu the earliest opportunity of making a representation against the detention order. It has been held in several cases, and in my opinion quite rightly, that if the grounds supplied to a detained person are of such a vague and indefinite character that no proper and adequate representation could be made in reply to the same, that itself would be an infraction of the right which has been given to the detenu under law. In my opinion, it would not be possible for the to decide whether the provisions of article 22 , clause (5), have been duly complied with and the fundamental right guaranteed by it has been made avail- able to the detenu unless the grounds communicated to him under the provisions of this article are actually produced before the . Apart from this, it is also open to. the person detained to contend that the detention order has been a main fide exercise of power by the detain- ing authority and that the grounds upon which it is based, are not proper or relevant grounds which would justify detention under the-provisions of the law itself. These rights of the detenu would for all practical purposes be rendered unenforceable if the is precluded from look- ing into the grounds which have been supplied to him under section 7 of the Preventive Detention Act. In my opinion, section 14 of the Preventive Detention Act does materially affect the fundamental rights declared under Part III of the Constitution and for this reason it must be held to be illegal and ultra vires. It is not disputed, however, that this section can be severed from the rest of the Act without affecting the other provisions of the Act in any way. The whole Act cannot, therefore, be held to be ultra vires. Mr. has further argued that section 3 of the Act also contravenes the provisions of article 32 of the Consti- tution, for it makes satisfaction of the particular authori- ties final in matters of preventive detention and thereby prevents this from satisfying itself as to the propriety of the detention order. This contention cannot succeed as no infraction of any fundamental right is in- volved in it. As has been pointed out already, this cannot interfere unless it is proved that the power has been exercised by the authorities in a mala fide manner or that the grounds are not proper or relevant grounds which justify detention. The provisions are undoubtedly harsh, but as they do not take away the rights under articles 21 and 22 of the Constitution, they cannot be held to be illegal or ultra vires. ", "The result, therefore, is that, in my opinion, the Preventive Detention Act must be declared to be intra vires the Constitution with the exception of section 14 which is held to be illegal and ultra vires. The present petition, however, must stand dismissed, though it may be open to the petitioner to make a fresh application if he so chooses and if the grounds that have been supplied to him under section 7 of the Act do furnish adequate reasons for making such application. ", "286 ", " am likewise of opinion that this application should be dismissed. ", "The contention of learned counsel appearing in support of this application is that the provisions of the Preventive Detention Act, 1950 (Act IV of 1950), are extremely drastic and wholly unreasonable and take away or, in any event, considerably abridge the fundamental rights conferred on the citizens by the provisions of Part III of the Constitution and that this Court should declare the Act wholly void under article 13 (2) of the Constitution and set the petitioner at liberty. ", "It is necessary to bear in mind the scope and ambit of the powers of the under the Constitution. The powers of the are not the same under all Constitutions. In England is supreme and there is no limitation upon its legislative powers. Therefore, a law duly made by cannot be challenged in any . The English s have to interpret and apply the law; they have no authority to declare such a law illegal or unconstitutional. By the American Constitution the' legislative power of the Union is vested in the and in a sense the is the supreme legislative power. But the written Constitu- tion of the United States is supreme above all the three limbs of Government and, therefore, the law made by the , in order to be valid, must be in conformity with the provisions of the Constitution. If it is not, the Supreme will intervene and declare that law to be unconstitutional and void. As will be seen more fully hereafter, the Supreme of the United States, under the leadership of Chief Justice , assumed the power to. declare any law unconstitutional on the ground of its not being in \"due process of law,\" an expression to be found in the Fifth Amendment (1791) of the United States Constitution and the Fourteenth Amendment (1868) which related to the State Constitutions. It is thus that the Supreme established its own supremacy over the executive and the . In India the position of the is some- where in between the s in England and the United States. While in the main leaving our and supreme in their respective legislative fields, our Constitution has, by some of the articles, put upon the certain specified limitations some of which will have to be discussed hereafter. The point to be noted, however, is that in so far as there is any limitation on the legislative power, the must, on a complaint being made to it, scrutinise and ascertain whether such limitation has been transgressed and if there has been any transgression the will courageously declare the law unconstitution- al, for the is bound by its oath to uphold the Consti- tution. But outside the limitations imposed on the legisla- tive powers our and the State are supreme in their respective legislative fields and the has no authority to question the wisdom or policy of the law duly made by the appropriate legislature. Our Constitution, unlike the English Constitution, recognises the 's supremacy over the legislative authority, but such supremacy is a very limited one, for it is confined to the field where the legislative power is circumscribed by limitations put upon it by the Constitution itself. Within this restrict- ed field the may, on a scrutiny of the law made by the , declare it void if it is found to have trans- gressed the constitutional limitations. But our Constitu- tion, unlike the American Constitution, does not recognise the absolute supremacy of the over the legislative authority in all respects, for outside the restricted field of constitutional limitations our and the State are supreme in their respective legislative fields and in that wider field there is no scope for the in India to play the role of the Supreme of the United States. It is well for us to constantly remember this basic limitation on our own powers. ", "The impugned Act has been passed by after the Constitution came into force. Article 246 gives exclusive power to to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule and it gives exclusive power to the State Legislatures to make laws with respect to any of the matters specified in List II of that Schedule. It also gives concurrent power to as well as to the State Legislatures to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. Residuary powers of legislation are vested in parliament under article ", "248. The first thing to note is that under Entry 9 of List I the parliament and under Entry 3 in List III both parliament and the State are empowered to make laws for preventive detention for reasons connected with the several matters specified in the respective entries. This legisla- tion is not conditioned upon the existence of any war with a foreign power or upon the proclamation of emergency under Part XVIII of the Constitution. Our Constitution has, there- fore, accepted preventive detention as the subjectmatter of peacetime legislation as distinct from emergency legisla- tion. It is a novel feature to provide for preventive detention in the Constitution. There is no such provision in the Constitution of any other country that I know of. Be that as it may, for reasons good or bad, our Constitution has deliberately and plainly given power to and the State to enact preventive detention laws even in peacetime. To many of us a preventive detention law is odious at all times but what I desire to emphasise is that it is not for the to question the wisdom and policy of the Constitution which the people have given unto themselves. This is another basic fact which the must not overlook. ", "The next thing to bear in mind is that, if there were nothing else in the Constitution, the legislative powers of and in their respective fields would have been absolute. In such circumstances the would have been entitled only to scrutinise whether or had, in making a partic- ular law, over-. stepped its legislative field and en- croached upon the legislative field of the other legislative power, but could not have otherwise questioned the validity of any law made by the parliament or . ", "289 ", "Thus under Entry 9 of List I the and under Entry 3 of List III the and could make as drastic a preventive detention law as it pleased. Such a law might have authorised a policeman, not to speak of a District Magistrate or Sub-Divisional Magistrate or the Commissioner of Police, to take a man, citizen or non-citi- zen, into custody and keep him in detention for as long as he pleased. This law might not have made any provision for supplying to the detenu the grounds of his detention or affording any opportunity to him to make any representation to anybody or for setting up any advisory board at all. Likewise, under Entries 1 and 2 in List III the or might have added as many new and novel offences as its fancy might have dictated and provided for any cruel penalty ranging from the maiming of the limbs to boiling to death in oil or repealed the whole of the Code of Criminal Procedure and provided for trial by battle or ordeal or for conviction by the verdict of a sorcerer or a soothsayer. Such law might have forbidden any speech criti- cising the Government, however mildly, or banned all public meetings or prohibited formation of all associations under penalty of law. Under Entry 33 of List I the might have made a law for acquiring anybody's properties for the purposes of the Union without any compensation and under Entry 36 in List III could do the same subject to the provisions of Entry 42 in List III which empowers the making of a law laying down principles for payment of compensation which might be anything above noth- ing. Under Entry 81 could have made any law restricting or even prohibiting inter-State migration so that a Bengali would not be able to move into and settle in Bihar or vice versa. It is needless to multiply instances of atrocious laws which or might have made under article 246 read with the different lists if there were nothing else in the Constitution. Our Legislatures, subject to the limitation of distribution of legislative powers, would have been as supreme in their respective legislative fields as the English is and has been. The in India, in such event, would have had to take the law duly made, inter- pret it and apply it. It would not have been entitled to utter a word as to the propriety of the particular law, although it might have shuddered at the monstrous atrocities of such law. ", "Our Constitution, however, has not accepted this abso- lute supremacy of our or . Thus by article 245 (1) the legislative power is definitely made \"subject to the provisions of this Constitution.\" Turning to the Constitution, article 13 (2) provides as follows: ", "\"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.\" ", "This clearly puts a definite limitation on the wide legislative powers given by article 246. It is certainly within the competency of the to judge and declare whether there has been any contravention of this limitation. In this respect again the has supremacy over the . ", "From the provisions so far referred to, it clearly follows that there are two principal limitations to the legislative power of parliament, namely,-- ", "(i) that the law must be within the legislative compe- tence of parliament as prescribed by article 246; and ", "(ii) that such law must be subject to the pro-visions of the Constitution and must not take away or abridge the rights conferred by Part III. ", "There can be no question--and, indeed, the learned Attorney-General does not contend otherwise--that both these matters are justiciable and it is open to the to decide whether has transgressed either of the limitations upon its legislative power. ", "Learned counsel for the petitioner does not say that the impugned Act is ultra vires the legislative powers of as prescribed by article 246. His contention is that the impugned Act is void because it takes away or abridges the fundamental rights of citizens conferred by Part III of the Constitution. It is, therefore, necessary to ascertain first the exact nature, extent and scope of the particular fundamental right insist- ed upon and then to see whether the impugned Act has taken away or, in any way, abridged the fundamental right so ascertained. ", "Civil rights of a person are generally divided into two classes, namely, the rights attached to the person (jus personarum) and the rights to things, i.e., property (jus rerum). Of the rights attached to the person, the first and foremost is the freedom of life, which means the right to live, i.e., the right that one's life shall not be taken away except under authority of law. Next to the freedom of life comes the freedom of the person, which means that one's body shall not be touched, violated, arrested or imprisoned and one's limbs shall not be injured or maimed except under authority of law. The truth of the matter is that the right to live and the freedom of the person are the primary rights attached to the person. If a man's person is free, it is then and then only that he can exercise a variety of other auxiliary rights, that is to say, he can, within certain limits, speak what he likes, assemble where he likes, form any associations or unions, move about freely as his \"own inclination may direct,\" reside and settle anywhere he likes and practise any profession or carry on any occupation, trade or business. These are attributes of the freedom of the person and are consequently rights attached to the person. It should be clearly borne in mind that these are not all the rights attached to the person. Besides them there are varieties of other rights which are also the attributes of the freedom of the person. All rights attached to the person are usually called personal liberties and they are too numerous to be enumerated. Some of these auxiliary rights are so important and fundamental that they are re- garded and valued as separate and independent rights apart from the freedom of the person. ", "Personal liberties may be compendiously summed up as the right to do as one pleases within the law. I say within the law because liberty is not unbridled licence. It is what called \"regulated freedom.\" Said in Book III, Ch. 3, of his Spirit of the Laws: ", "\"In Governments, that is, in societies directed by laws, liberty can consist only in the power of doing what we ought to will, and in not being constrained to do what we ought not to will. We must have continually present to our minds the difference between independence and liberty. Liberty is a right of doing whatever the laws permit, and if a citizen could do what they forbid, he would no longer be possessed of liberty, because all his fellow-citizens would enjoy the same power.\" ", "To the same effect are the following observations of in his Works Vol. II, p. 393: ", "\"Liberty is the creation of law, essentially different from that authorised licentiousness that trespasses on right. It is a legal and refined idea, the offspring of high civilization, which the savage never understands, and never can understand. Liberty exists in proportion to wholesome restraint; the more restraint on others to keep off from us, the more liberty we have. It is an error to suppose that liberty consists in a paucity of laws ......... The working of our complex system, full of checks and restraints on legislative, executive and judicial power is favourable to liberty and justice. These checks and restraints are so many safeguards set around individual rights and interests. That man is free who is protected from injury.\" ", "Therefore, putting restraint on the freedom of wrong doing of one person is really. securing the liberty of the intended victims. To curb the freedom of the saboteur of surreptitiously removing the fish plates from the railway lines is to ensure the safety and liberty of movement of the numerous innocent and unsuspecting passengers. Therefore, restraints on liberty should be judged not only subjectively as applied to a few individuals who come within their opera- tions but also objectively as securing the liberty of a far greater number of individuals. Social interest in individu- al liberty may well have to be subordinated to other greater social interests. If a law ensures and protects the greater social interests then such law will be a wholesome and beneficent law although it may infringe the liberty of some individuals, for it will enure for the greater liberty of the rest of the members of the society. At the same time, our liberty has also to be guarded against executive, legislative as well as judicial usurpation of powers and prerogatives. Subject to certain restraints on individuals and reasonable checks on the every person has a varie- ty of personal liberties too numerous to be cataloged. As will be seen more fully hereafter, our Constitution has recognised personal liberties as fundamental rights. It has guaranteed some of them under article 19 (1) but put re- straints on them by clauses (2) to (6). It has put checks on the 's legislative powers by articles 21 and 22. It has by providing for preventive detention, recognised that individual liberty may be subordinated to the larger social interests. ", "Turning now to the Constitution I find that Part III is headed and deals with \"Fundamental Rights\" under seven heads, besides, \"General\" provisions (articles 12 and 13), namely \"Right to Equality\" (articles 14 to 18), \"Right to Freedom\" (articles 19 to 22), \"Right against Exploitation\" (articles 23 and 24), \"Right to Freedom of Religion\" (articles 25 to 28), \"Cultural and Educational Rights\" (articles 29 and 30), \"Right to Property\" ( article 31 ), \"Right to Constitutional Remedies\" (articles 32 to 35). Under the heading \"Right to Freedom\" are grouped four arti- cles, 19 to 22. Article 19 (1) is in the following terms :-- ", "\" (1) All citizens shall have the right- ", "(a) to freedom of speech and expression; ", "(b) to assemble peaceably and without arms; (c) to form associations or unions; ", "(d) to move freely throughout the territory of India; ", "(e) to reside and settle in any part of the territory of India; ", "(f) to acquire, hold and dispose of property; and ", "(g) to practise any profession, or to carry on any occupation, trade or business.\" ", "It will be noticed that of the seven rights protected by clause (1) of article 19 , six of them, namely, (a), (b), ", "(c), (d), (e) and (g) are what are said to be rights at- tached to the person (jus personarum). The remaining item, namely, (f) is the right to property (jus rerum). If there were nothing else in article 19 these rights would have been absolute rights and the protection given to them would have completely debarred parliament or any of from making any law taking away or abridging any of those rights. But a perusal of article 19 makes it abun- dantly clear that none of the seven rights enumerated in clause (1) is an absolute right, for each of these rights is liable to be curtailed by laws made or to be made by the to the extent mentioned in the several clauses (2) to (6) of that article. Those clauses save the power of the to make laws imposing certain specified restrictions on the several rights. The nett result is that the unlimit- ed legislative power given by article 246 read with the different legislative lists in the Seventh Schedule is cut down by the provisions of article 19 and all laws made by the with respect to these rights must, in order to be valid, observe these limitations. Whether any law has in fact transgressed these limitations is to be ascertained by the and if in its view the restrictions imposed by the law are greater than what is permitted by clauses (2) to (6) whichever is applicable the will declare the same to be unconstitutional and, therefore, void under article 13. Here again there is scope for the application of the \"intel- lectual yardstick\" of the . If, however, the finds, on scrutiny, that the law has not overstepped the constitutional limitations, the will have to uphold the law, whether it likes the law or not. ", "The first part of the argument is put broadly, namely, that personal liberty is generally guaranteed by the Consti- tution by article 19 (1) and that the Preventive Detention Act, 1950, has imposed unreasonable restrictions thereon in violation of the provisions of clauses (2) to (6) of that article. The very first question that arises, therefore, is as to whether the freedom of the person which is primarily and directly suspended or de- stroyed by preventive detention is at all governed by arti- cle 19 (1). If personal liberty as such is guaranteed by any of the sub-clauses of article 19 (1) then why has it also been protected by article 21 ? The answer suggested by learned counsel for the petitioner is that personal liberty as a substantive right is protected by article 19 (1) and article 21 gives only an additional protection by prescrib- ing the procedure according to which that right may be taken away. I am unable to accept this contention. If this argument were correct, then it would follow that our Consti- tution does not guarantee to any person, citizen or non- citizen, the freedom of his life as a substantive right at all, for the substantive right to life does not fall within any of the sub-clauses of clause (1) of article 19. It is retorted in reply that no constitution or human laws can guarantee life which is the gift of God who alone can guar- antee and protect it. On a parity of reasoning no Constitu- tion or human laws can in that sense guarantee freedom of speech or free movement, for one may be struck dumb by disease or may lose the use of his legs by paralysis or as a result of amputation. Further, what has been called the procedural protection of article 21 would be an act of supererogation, for when God takes away one's life, whatever opportunity He may have had given to Adam to explain his conduct before sending him down, He is not likely in these degenerate-days to observe the requirements of notice or fair trial before any human tribunal said to be required by article 21. The fifth Amendment and the Fourteenth Amendment of the American Constitution give specific protection to life as a substantive right. So does article 31 of the Japanese Constitution of 1946. There is no reason why our Constitution should not do the same. The truth is that article 21 has given that protection to life as a substan- tive right and that, as will be seen hereafter, that article properly understood does not purport to prescribe any par- ticular procedure at all. The further astounding result of the argument of counsel for the petitioner will be that the citizen of India will have only the rights enumerated in article 19 , clause (1) and no other right attached to his person. As I have already stated, besides the several rights mentioned in the several sub- clauses of article 19 (1) there are many other personal liberties which a free man, i.e., a man who has the freedom of his person, may exercise. Some of those other rights have been referred to by of Calcutta in his unreported judgment in Miscellaneous Case No. 166 of 1950 ( v. The Chief Secretary of West Bengal) while referring the case to a Full Bench in the following words :-- ", "\"It must be remembered that a free man has far more and wider rights than those stated in article 19 (1) of the Constitution. For example, a free man can eat what he likes subject to rationing laws, work as much as he likes or idle as much as he likes. He can drink anything he likes subject to the licensing laws and smoke and do a hundred and one things which are not included in article 19. If freedom of person was the result of article 19 , then a free man would only have the seven rights mentioned in that article. But obviously the free man in India has far greater rights.\" ", "I find myself in complete agreement with the learned Chief Justice on this point. If it were otherwise, the citizen's right to eat what he likes will be liable to be taken away by the executive fiat of the Civil Supply Depart- ment without the necessity of any rationing laws. The Government may enforce prohibition without any prohibition laws or licensing laws and so on. I cannot accept that our Constitution intended to give no protection to the bundle of rights which, together with the rights mentioned in sub- clauses (a) to (e) and (g) make up personal liberty. In- deed, I regard it as a merit of our Constitution that it does not attempt to enumerate exhaustively all the personal rights but uses the compendious expression \"personal liber- ty\" in' article 21 , and protects all of them. It is pointed out that in the original draft the word \"liberty\" only was used as in the American Constitution but added the word \"personal\" to make it clear that what was being protected by what is now article 21 was not what had already been pro- tected by what is now article 19. If it were permissible to refer to 's report, it would be anoth- er answer to the contentions of learned counsel for the petitioner that personal liberty as a substantive right was protected by article 19. I do not, however, desire to base my judgment on 's report and I express no opinion as to its admissibility. Whatever the intentions of might have been, the Constitution as finally passed has in article 21 used the words \"personal liberty\" which have a definite connotation in law as I have explained. It does not mean only liberty of the person but it means liberty or the rights attached to the person (jus personarum). The expressions \"freedom of life\" or \"personal liberty\" are not to be found in article 19 and it is strain- ing the language of article 19 to squeeze in personal liber- ty into that article. In any case the right to life cannot be read into article 19. ", " Article 19 being confined, in its operation, to citizens only, a non-citizen will have no protection for his life and personal liberty except what has been called the procedural protection of article 21. If there be no substantive right what will the procedure protect ? I recognise that it is not imperative that a foreigner should have the same privileges as are given to a citizen, but if article 21 is construed in the way I have suggested even a foreigner will have equal protection for his life and personal liberty before the laws of our country under our Constitution. I am unable, there- fore, for all the reasons given above, to agree that person- al liberties are the result of article 19 or that that article purports to protect all of them. ", "It is next urged that the expression \"personal liberty\" is synonymous with the right to move freely and, therefore, comes directly under article 19 (1) (d). Reference is made to the unreported dissenting judgment of Sen of Calcutta in Miscellaneous Case No. 166 of 1950 while referring that case to . ", "298 ", "In his judgment Sen quoted the following passage from 's Commentaries :-- ", "\"Next to personal security the law of :England regards, asserts and preserves, the personal liberty of individuals. This personal liberty consists in the power of locomotion, of changing situation, or moving one's person to whatsoever place one's own inclination may direct, without imprisonment or restraint, unless by due course of law.\" (Page 73 of Edition (4th Edition) of Blackstone, Book I, Chapter I. ", "On the authority of the above passage the learned Judge concluded that personal liberty came within article 19 (1)(d). I am unable to agree with the learned Judge's con- clusion. On a perusal of Chapter I of Book I of Black- stone's Commentaries it will appear that the]earned commen- tator divided the rights attached to the person (jus person- arum) into two classes, namely, \"personal security\" and \"personal liberty.\" Under the head \"personal security\" included several rights, namely, the rights to' life, limb, body, health and reputation, and under the head \"personal liberty\" he placed only the right of free move- ment. He first dealt with the several rights classified by him under the head \"personal security\" and then proceeded to say that next to those rights came personal liberty which according to his classification consisted only in the right of free locomotion. There is no reason to suppose that in article 21 of our Constitution the expression \"personal liberty\" has been used in the restricted sense in which used it in his Commentaries. If \"personal liber- ty\" in article 21 were synonymous with the right to move freely which is mentioned in article 19 (1) (d ), then the astounding result will be that only the last mentioned right has what has been called the procedural protection of arti- cle 21 but none of the other rights in the other sub-clauses of article 19 (1) has any procedural protection at all. According to learned counsel for the petitioner the proce- dure required by article 21 consists of notice and a right of hearing before an impartial tribunal. Therefore, accord- ing to him, a man's right of movement cannot be taken away without giving him notice and a fair trial before an impartial tribunal but he may be deprived of his freedom of speech or his property or any of his other rights without the formality of any procedure at all. The proposi- tion has only to be stated to be rejected. In my judgment, article '19 protects some of the important attributes of personal liberty as independent rights and the expression \"personal liberty\" has been 'used in article 21 as a compen- dious term including within its meaning all the varieties of rights which go to make up the personal liberties of men. Learned counsel for the petitioner next contends that personal liberty undoubtedly means or includes the freedom of the person and the pith and substance of the freedom of the person is right to move about freely and consequently a preventive detention law which destroys or suspends the freedom of the person must inevitably destroy or suspend the right of free movement and must necessarily offend against the protection given to the citizen by article 19 (1)(d) unless it satisfies the test of reasonableness laid down in clause (5). The argument is attractive and requires serious consideration as to the exact purpose and scope of sub- clause (d) of article 19 (1). ", "There are indications in the very language of article 19 (1) (d) itself that its purpose is to protect not the gener- al right of free movement which emanates from the freedom of the person but only a specific and 'limited aspect of it, namely, the special right of a free citizen of India to move freely throughout the Indian territory, i.e., from one State to another within the Union. In other words, it guarantees, for example, that a free Indian citizen ordinarily residing in the State of West Bengal will be free to move from West Bengal to Bihar or to reside and settle in Madras or the Punjab without any let or hindrance other than as provided in clause (5). It is this special right of movement of the Indian citizen in this specific sense and for this particu- lar purpose which is protected by article 19 (1) (d). It is argued on the authority of a decision of a Special Bench of presided over by Sen in (1) that the words \"through-. out the territory of India\" occurring in that sub-clause only indicate that our Constitution does not guarantee to its citizens the right of free movement in or into foreign territory and that those words have been added to save passport restrictions. I am unable to accept this interpre- tation. Our Constitution cannot possibly give to any of its citizens any right of free movement in a foreign country and it was wholly superfluous to specifically indicate this in the Constitution, for that would have gone without saying. The words \"throughout the territory of India\" are not used in connection with most of the other sub-clauses of clause (1) of article 19. Does such omission indicate that our Constitution guarantees to its citizens freedom of speech and expression, say, in Pakistan ? Does it guarantee to. its citizens a right to assemble or to form associations or unions in a foreign territory ? Clearly not. Therefore, it was not necessary to use those words in sub-clause (d) to indicate that free movement in foreign countries was not being guaranteed. It is said that by the use of those words the Constitution makes it clear that no1 guarantee was being given to any citizen with regard to emigration from India without a passport and that the freedom of movement was restricted within the territory of India. Does the omission of those words from article 19 (1) (a) indicate that the citizen of India has been guaranteed such freedom of speech and expression as will enable him to set up a broadcasting station and broadcast his views and expressions to foreign lands without a licences ? Clearly not. Dropping this line of argument and adopting a totally new line of argument it is said that by the use of the words \"throughout the territory of India\" the Constitution indicates that the widest right of free movement that it could possibly give to its citizens has been given. Does. then, the omission of those words from the other subclauses indicate that the Constitution has kept back some parts of those rights even beyond the limits of the qualifying clauses that follow ? Do not those other rights prevail throughout the Indian territory ? ", "(1) 54 C.W.N. 394. ", "301 ", "Clearly they do, even without those words. Therefore, those words must have been used in sub-clause (d) for -some other purpose. That other purpose, as far as I can apprehend it, is to indicate that free movement from one State to another within the Union is protected so that may not by a law made under Entry 81 in List I curtail it beyond the limits prescribed by clause (5) of article 19. Its purpose, as I read it, is not to provide protection for the general right of free movement but to secure a specific and special right of the Indian citizen to move freely throughout the territories of India regarded as an independent additional right apart from the general right of locomotion emanating from the freedom of the person. It is a guarantee against unfair discrimination in the matter of free movement of the Indian citizen throughout . In short, it is a protection against provincialism. It has nothing to do with the freedom of the person as such. That is guaranteed to every person, citizen or otherwise, in the manner and to the extent formulated by article 21. ", "Clause (5) of article 19 qualifies sub-clause (d) of clause (1) which should, therefore, be read in the light of clause (5). The last mentioned clause permits the to impose reasonable restrictions on the exercise of the right of free movement throughout the territory of India as ex- plained above. Imposition of reasonable restrictions clearly implies that the right of free movement is not entirely destroyed but that parts of the right remain. This reasona- ble restriction can be imposed either in the interest of the general public or for the protection of the interests of any Scheduled Tribe. The Scheduled Tribes usually reside in what are called the Scheduled Areas. The provision for imposing restriction on the citizens' right of free movement in the interests of the Scheduled Tribes clearly indicates that the restriction is really on his right of free movement into or within the Scheduled Areas. It means that if it be found necessary for the protection of the Scheduled Tribes the citizens may be restrained from entering into or moving about in the Scheduled Areas, although they are left quite free to move about elsewhere. This restraint may well be necessary for the protection of the members of the, Sched- uled Tribes who are generally impecunious and constitute a backward class. They may need protection against money- lenders or others who may be out to exploit them. They may have to be protected against their own impecunious habits which may result in their selling or mortgaging their hearths and homes. Likewise, the free movement of citizens may have to be restricted in the interest of the general public. A person suffering from an infectious disease may be prevent from moving about and spreading the disease. and regulations for his segregation in the nature of quarantine may have to be introduced. Likewise, healthy people may be prevented, in the interests of the general public, from entering a plague-infected area. There may be protected places, e.g., forts or other strategic places, access where- to may have to be regulated or even prohibited in the inter- ests of the general public. The point to be noted, however, is that when free movement is thus restricted, whether in the interest of the general public or for the protection of the Scheduled Tribes, such restriction has reference gener- ally to a certain local area which becomes the prohibited area but the right of free movement in all other areas in the Union is left unimpaired. The circumstance that clause (5) contemplates only the taking away of a specified area and thereby restricting the field of the exercise of the right conferred by subclause (d) of clause (1) indicates to my mind that subclause (d)is concerned, not with the freedom of the person or the general right of free movement but with a specific aspect of it regarded as an independent right apart from the freedom of the person. In other words in sub-clause (d)the real emphasis is on the words \"throughout the territory of India.\" The purpose of article 19 (1) (d) is to guarantee that there shall be no barrier. It gives protection against provincialism. It has nothing to do with the freedom of the person as such. ", "Finally, the ambit and scope of the rights protected by article 19 (1) have to be considered. Does it protect the right of free movement and the other personal rights therein mentioned in all circumstances irrespective of any other consideration ? Does it not postulate a capacity to exercise the rights ? Does its protection continue even though the citizen lawfully loses his capacity for exercising those rights ? How can the continuance of those personal rights be compatible with the lawful detention of the person ? These personal rights and lawful detention cannot go together. Take the case of a person who has been properly convicted of an offence punish- able under a section of the Indian Penal Code as to the reasonableness of which there is no dispute. His right to freedom of speech is certainly impaired. Under clause (2) the may make a law relating to libel, slander, defama- tion, contempt of or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the . Any law on any of these matters contemplated by this clause certainly must have some direct reference to speech and expression. It means that the law may directly curtail the freedom of speech so that the citizen may not talk libel or speak contemptuously of the or express indecent or immoral sentiments by speech or other forms of expression or utter seditious words. To say that every crime undermines the security of the and, therefore, every section of the Indian Penal Code , irrespective of whether it has any reference to speech or expression, is a law within the meaning of this clause is wholly unconvincing and betrays only a vain and forlorn attempt to find an explanation for meeting the argument that any conviction by a of law must necessarily infringe article 19 (1) (a). -There can be no getting away from the fact that a detention as a result of a conviction impairs the freedom of speech far beyond what is permissible under clause (2) of article 19. Likewise a detention on lawful conviction impairs each of the other personal rights men- tioned in sub-clauses (b) to (e) and (g) far beyond the limits of clauses (8) to (6). The argument that every section of the Indian Penal Code irrespective of whether it has any reference to any of the rights referred to in sub- clauses (b) to (e) and (g) is a law imposing reasonable restriction on those several rights has not even the merit of plausibility. There can be no doubt that a detention as a result of lawful conviction must necessari- ly impair the fundamental personal rights guaranteed by article 19 (1) far beyond what is permissible under clauses (2) to (6) of that article and yet nobody can think of questioning the validity of the detention or of the section of the Indian Penal Code under which the sentence was passed. Why ? Because the freedom of his person having been lawfully taken away, the convict ceases to be entitled to exercise the freedom of speech and expression or any of the other personal rights protected by clause (1) of article ", "19. On a parity of reasoning he cannot, while the detention lasts, exercise any other personal right, e.g., he cannot eat what he likes or when he likes but has to eat what the Jail Code provides for him and at the time when he is by Jail regulations required to eat. Therefore, the conclusion is irresistible that the rights protected by article 19 (1 ), in so far as they relate to rights attached to the person, i.e., the rights referred to in sub-clauses (a) to (e) and ", "(g), are rights which only a free citizen, who has the freedom of his person unimpaired, can exercise. It is pointed out, as a counter to the above reasonings, that detention as a result of a lawful conviction does not deprive a person of his right to acquire or hold or dispose of his property mentioned in sub-clause (f). The answer is simple, namely, that that right is not a right attached to the person (jus personrum) and its existence is not depend- ent on the freedom of the person. Loss of freedom of the person, therefore, does not suspend the right to property. But suppose a person loses his property by reason of its having been compulsorily acquired under article 31 he loses his right to hold that property and cannot complain that his fundamental right under sub-clause (f) of clause (1) of article 19 has been infringed. It follows that the rights enumerated in article 19 (1) subsist while the citizen has the legal capacity to exercise them. If his capacity to exercise them is gone, by reason of a lawful conviction with respect to the rights in sub-clauses (a) to (e) and (g), or by reason of a lawful compulsory acquisition with respect to the right in sub- clause (f), he ceases to have those rights while his inca- pacity lasts. It further follows that if a citizen's free- dom of the person is lawfully taken away otherwise than as a result of a lawful conviction for an offence, that citizen, for precisely the same reason, cannot exercise any of the rights attached to his person including those enumerated in sub-clauses (a) to (e) and (g) of article 19 (1). In my judgment a lawful detention, whether punitive or preventive, does not offend against the protection conferred by article 19 (1) (a) to (e) and (g), for those rights must necessarily cease when the freedom of the person is lawfully taken away. In short, those rights end where the lawful detention be- gins. So construed, article 19 and article 21 may, there- fore, easily go together and there is, in reality, no con- flict between them. It follows, therefore, that the validi- ty or otherwise of preventive detention does not depend on, and is not dealt with by, article 19. ", "To summarise, the freedom of the person is not the result of article 19. Article 19 only deals with' certain particu- lar rights which, in their origin and inception, are attributes of the freedom of the person but being of great importance are regarded as specific and independent rights. It does not deal with the freedom of the person as such. Article 19 (1) (d) protects a specific aspect of the right of free locomotion, namely, the right to move freely throughout the territory of India which is regarded as a special privilege or right of an Indian citizen and is protected as such. The protection of article 19 is co-termi- nous with the legal capacity of a citizen to exercise the rights protected thereby, for sub-clauses (a) to (e) and (g) of article 19 (1) postulate the freedom of the person which alone can ensure the capacity to exercise the rights pro- tected by those sub-clauses. A citizen who loses the free- dom of his person by being lawfully detained, whether as a result of a conviction for an offence or as a result of preventive detention loses his capacity to exercise those rights and, therefore, has none of the rights which sub- clauses (a) to (e) and (g) may protect. ", "306 ", "In my judgment article 19 has no bearing on the question of the validity or otherwise of preventive detention and, that being so, clause (5) which prescribes a test of reasonable- ness to be defined and applied by the has no applica- tion at all. ", " Article 19 being thus out of the way, I come to article 20 which is concerned with providing protection against what are well known as ex post facto laws, double jeopardy and self-incrimination. This article constitutes a limitation on the absolute legislative power which would, but for this article, be exercisable by or under article 246 read with the legislative lists. If the disobeys this limitation the will certainly prevent it. Article 20 has no bearing on preven- tive detention laws and I pass on. ", "Article 21 runs thus: ", "\"21. No person shall be deprived of his life or person- al liberty except according to procedure established by law.\" ", "The contention of learned counsel for the petitioner is that by this article the Constitution offers to every per- son, citizen or non-citizen, only a procedural protection. According to the argument, this article does not purport to give any protection to life or personal liberty as a sub- stantive right but only prescribes a procedure that must be followed before a person may be deprived of his life or personal liberty. I am unable to accept this contention. Article 21 , as the marginal note states, guarantees to every person \"protection of life and personal liberty.\" As I read it, it defines the substantive fundamental right to which protection is given and does not purport to prescribe any particular procedure at all. That a person shall not be deprived of his life or personal liberty except according to procedure established by law is the substantive fundamental right to which protection is given by the Constitution. The avowed object of the article, as I apprehend it, is to define the ambit of the right to life and personal liberty which is to be protected as a fundamental right. The right to life and personal liberty protected by article 21 is not an absolute right but is a qualified right--a right circumscribed by the possibility or risk of being lost according to procedure established by law. Liability to deprivation according to procedure established by law is in the nature of words of limitation. The article delimits the right by a reference to its liability to deprivation according to procedure estab- lished by law and by this very definition throws a corre- sponding obligation on the to follow a procedure before depriving a man of his life and personal liberty. What that procedure is to be is not within the purpose or purview of this article to prescribe or indicate. ", "The claim of learned counsel for the petitioner is that article 21 prescribes a procedure. This procedure, accord- ing to learned counsel, means those fundamental immutable rules of procedure which are sanctioned or well established by principles of natural justice accepted in all climes and countries and at all times. Apart from the question whether any rule of natural procedure exists which conforms to the notions of justice and fair play of all mankind at all times, it has to be ascertained whether the language of article 21 will permit its introduction into our Constitu- tion. The question then arises as to what is the meaning of the expression \"procedure established by law.\" The word \"procedure\" in article 21 must be taken to signify some step or method or manner of proceeding leading up to the depriva- tion of life or personal liberty. According to the language used in the article, this procedure has to be \"established by law.\" The word \"establish\" according to the Oxford English Dictionary, Vol. III, p. 297, means, amongst other things, \"to render stable or firm ; to strengthen by materi- al support; to fix, settle, institute or ordain permanently by enactment or agreement.\" According to Dr. 's edition of the New Gresham Dictionary the word \"establish,\" means, amongst other things, \"to found permanently; to institute; to enact or decree; to ordain; to ratify; to make firm.\" It follows that the word \"established\" in its ordi- nary natural sense means, amongst other things, \"enacted.\" \"Established by law\" will, therefore, mean \"enacted by law.\" If this sense of the word \"established\" is accepted, then the word \"law\" must mean -made law and cannot possibly mean. the principles of natural justice, for no procedure can be said to have ever been \"enacted\" by those principles. When section 124-A of the Indian Penal Code speaks of \"Government established by law,\" surely it does not mean \"Government set up by natural justice.\" Therefore, procedure established by law must, I apprehend, be procedure enacted by the which, by its definition in article 12 , includes parliament. There is no escape from this position if the cardinal rule of construc- tion, namely, to give the words used in a statute their ordinary natural meaning, is applied. And this construction introduces no novelty or innovation, for at the date of the Constitution the law of procedure in this country. both civil and criminal, was mainly if not wholly, the creature of statute. The Hindu or Muhammadan laws of procedure were abrogated and replaced by the Code of Civil Procedure or the Code of Criminal Procedure. Therefore, procedure established by law is quite compatible with procedure enact- ed by law. If, however, the word \"established\" is taken to mean \"sanctioned\" or \"settled\" or \"made firm\" then the question will arise as to the meaning of the word \"law\" in that context. Reference is made to Salmond's Jurisprudence, 10th Edition, p. 37, showing that the term \"law\" is used in two senses and it is suggested that the word \"law\" in the expression \"established by law \"means law in its abstract sense of the principles of natural justice. It is \"jus\" and not \"lex,\" says learned counsel for the petitioner. It is pointed out that both the English and the Indian law in many cases, some of which have been cited before us, have recog- nised and applied the principles of natural justice and that this Court should do the same in interpreting tim provisions of our Constitution. I find it difficult to let in princi- ples of natural justice as being within the meaning of the word \"law,\" having regard to the obvious meaning of that word in the other articles. Article 14 certainly embodies a principle of natural justice which ensures to. ", "309 ", "every person equality before the law. When natural jus- tice speaks of and enjoins equality- before the law, that law must refer to something outside natural justice, and must mean the -made laws. It is only when the law gives equality to every person that that law is said to be in accordance with natural justice. There can be no doubt that the words \"in accordance with law\" in article 17 have reference to law. Likewise, the word \"law\" in article 20 (1) can mean nothing but law made by the . The same remark applies to the words \"in accordance with law\" in articles 23, 31 and 32. Natural justice does not impose any tax and, therefore, the word \"law\" in articles 265 and 286 must mean -made law. If this be the correct meaning of the word \"law\" then there is no scope for intro- ducing the principles of natural justice in article 21 and \"procedure established by law\" must mcan procedure estab- lished by law made by the which, as defined, includes and the Legislatures of the s. We have been referred to a number of text books and decisions showing the development of the American doctrine of \"due process of law\" and we have been urged to adopt those principles in our Constitution. The matter has to be considered against its historical background. The English settlers in different parts of America had carried with them the English common law as a sort of personal law regulating their rights and liberties inter se as well as between them and the . After the War of Independence the Constitu- tions of the United s were drawn up in writing. The majority of those who framed the Constitution were lawyers and had closely studied the Commentaries of the great Eng- lish jurist , who in his famous commentaries had advocated the separation of the three limbs of the , namely, the executive, the legislature and the judiciary. 's Spirit of Laws had already been published wherein he gave a broader and more emphatic expression to the Aristotelian doctrine of separation of powers. The experience of the repressive laws of had im- pressed upon the framers of the American Constitution the belief that it was the habit of all legislative bodies to grasp and exercise powers that did not belong to them. The interference of the colonial governors with legislation and the judiciary was also real. This sad experience coupled with the political philosophy of the time induced the fram- ers of the American Constitutions to adopt safeguards not only against the executive but also against the legislature. (See Munro on the Government of the United s, 5th Edition, Chapter IV, p. 53 et seq.). Says Judge in his Constitutional Limitations, 6th Edition, Vol. II, Chap- ter XI, p. 755: ", "\"The people of the American States, holding the sover- eignty in their own hands, have no occasion to exact any pledges from any one for a due observation of individual rights; but the aggressive tendency of power is such that they have deemed it of no small importance, that, in framing the instruments under which their governments are to be administered by their agents, they should repeat and re- enact this guarantee, and thereby adopt it as a principle of constitutional protection.\" ", "There can be little doubt that the people of the differ- ent States in America intended not to take any risk as to their life, liberty or property even from the legislature. As puts it at pp. 58-61 :-- ", "\"The framers of the Constitution set boundaries to the powers of the , and it was their intent that these limitations should be observed. But how was such observance to be enforced by the ? The statesmen of 1767 did not categorically answer that question.\" ", "The Constitution was silent and there was no express provision as to who was to serve as umpire in case the overstepped the limits of its legislative powers. By the 5th Amendment what is now known as the \"due process clause\" was introduced in the Federal Constitution and by the 14th Amendment a similar clause was adopted in the State Constitutions. Some of the State Constitutions used the words \"due course of law,\" some repeated the words of , namely, \"the law of the land\" but most of them used the expression \"due process of law.\" All the expressions meant the same thing, namely, that no person should be deprived of his life, liberty or property except in due process of law. The Constitution by this clause gave an opportunity to take upon itself the function of declaring the national laws unconstitutional. And , under the leadership of Chief Justice , seized this opportunity and assumed the right to say the last word on questions of constitutionality, and possesses that right to-day: (, p. 62). The expression \"due process of law\" has been interpreted by the American Courts in different ways at different times. in his book on the Growth of Constitutional Power in the United States at p. 107 says, with reference to the development of the doctrine of due procedure: ", "\"The American history of its interpretation falls into three periods. During the first period covering roughly the first century of under the Constitution \"due process\" was interpreted \"principally as a restriction upon procedure--and largely the judicial procedure--by which the exercised its powers. During the second period,which, again roughly speaking, extended through 1936, \"due process\" was expanded to serve as a restriction not merely upon procedure but upon the substance of the activi- ties in which the might engage. During the third period extending from 1936 to date, the use of \"due process\" as a substantive restriction has been largely suspended or abandoned, leaving it principally in its original status as a restriction upon procedure.\" ", "In the guise of interpreting \"due process of law\" went much further than even Lord ever thought of doing. gradually arrogated to themselves the power to revise all legislations. In the beginning they confined themselves to insisting on a due procedure to be followed before a person was deprived of his life, liberty or property. In course of time, \"due process of law\" came to be applied to personal liberty, to social control, to procedure to jurisdiction and to substantive law: (, p. 642). In the words of \"due process of law\" became a sort of palladium covering all manner of individual rights. A_II the while refused to define the phrase, but used it to enable it to declare unconstitutional any Act of legislation which it thought unreasonable: (, p. ", "657). In v. (1) we find the following observa- tions: ", "\"This Court has never attempted to define with precision the words' due process of law ................ It is suffi- cient to say that there are certain immutable principles of justice which inhere in the very idea of free government which no member of the Union may disregard.\"In v. (2) observed: ", "\"The words 'by the law of the land' as used in the Constitution, do not mean a statute passed for the purpose of working the wrong. That construction would render the restriction absolutely nugatory, and turn this part of the Constitution into mere nonsense. The people would be made to say to the two : ' You shall be vested with the legis- lative power of the. State, but no one shall be disenfran- chised or deprived of any of the rights or privileges of a citizen, unless you pass a statute for that purpose. In other words you shall not do the wrong unless you choose to do it.'\" ", "It was thus that of the United s firmly established its own supremacy over the other two limbs of the , namely, the executive and the . In the words of quoted in at p. 61, \"The Judges of Aragon began by setting aside laws and ended by making them.\" And all this sweeping development could only be possible because of the presence of one little word \"due\" which, in its content, knows no bound and is not subject to any fixed definition. Whenever a substantive law or some procedure laid down in any law did not find favour with the majority of the learned Judges of it was not reasonableand, therefore, it was not \"due.\" (1) 169 U.S. 366 at p. 389. (2) 4 Hill 140, ", "145. The very large and nebulous import of the word \"due\" was bound to result in anomalies, for what was not \"due\" on one day according to the Judges then constituting became \"due\" say 20 years later according to the new Judges who then came to occupy the Bench, for the had to adapt the Constitution to the needs of the society which were continually changing and growing. The larger content of due process of law, which included both procedural and substantive due process of law, had of necessity to be narrowed down, for social interest in personal liberty had to give way to social interest in other matters which came to be considered to be of more vital interest to the commu- nity. This was achieved by of the United States evolving the new doctrine of police powers--a pecul- iarly American doctrine. The police powers are nowhere exhaustively defined. In v. Drainage Commissioner (1) ,, police power\" has been stated to \"em- brace regulations designed to promote the public convenience or the general prosperity, as well as regulations designed to promote the public health, the public morals or the public safety.\" Reference in this connection may be made to Cooley's Constitutional Limitations, 8th Edition, Vol. II, p. 1223 and to Chapter XXVI of at p. 727. The nett result is that the all-inclusive and indefina- ble doctrine of due process of law has in America now been brought back to its original status of a procedural due process of law by the enunciation and application of the new doctrine of police power as an antidote or palliative to the former. Who knows when the pendulum will swing again. Turning now to what has been called the procedural due process of law it will be found that the matter has been described in different languages in different cases. In v. Gregg (2) Edwards J. defined it thus: ", "\"Due process of law undoubtedly means, in the due course of legal proceedings, according to those rules 204 u.s. 561,592. (2) 12 N.Y. 202. ", "314 ", "and forms which have been established for the protection of private rights.\" ", "A more specific definition of the expression \"the law of the land\" meaning procedural due process was given by Web- ster appearing as counsel for the plaintiff in error in v. (1): ", "\"By the law of the land is most clearly intended the general law; a law which hears before it condemns; which proceeds upon inquiry and renders judgment only after trial. The meaning is that every citizen shall hold his life, liberty, property, and. immunities, under the protection of the general rules which govern society. Everything which may pass under the form of an enactment is not therefore to be considered the law of the land.\" ", " in Ch. XXIII, p. 661, says: ", "\"The guarantee of due process of law as a matter of procedure means that no part of a person's personal liberty, including ownership, shall be taken away from him except by the observance of certain formalities. Hence its object is the protection of the social interest in personal liberty.\" ", "At p. 662 enumerates the requirements of the procedural due process of law as follows:(1) notice. (2) opportunity to be heard, (3) an impartial tribunal, and (4) an orderly course of procedure. In short, the procedural due process requires that a person who is to be deprived of his life, liberty or property shall have had \"his day in .\" This according to by p. 736, means: ", "\"(1) that he shall have had due notice, which may be actual or constructive, of the institution of the proceed- ings by which his legal rights may be affected; (2) that he shall be given a reasonable opportunity to appear and defend his rights, including the right himself to testify, to produce witnesses, and to introduce relevant documents and other evidence, (3) that the tribunal in or before which his rights are adjudicated is so constituted as to give reasona- ble assurance of its. ", "(1) 4 Wheaton 518 at p. 579; 4 L. Edn. 629 at p. 645. ", "315 ", "honesty and impartiality; and (4) that it is a Court of competent jurisdiction.\" ", "It will be noticed that the fourth item of Willoughby is different from the fourth item of Willis. Such, in short, are the history of the development of the doctrine of the process of law in the United States and the requirements of the procedural due process as insisted on by of that country. ", "Learned counsel for the petitioner before us does not contend that we should import this American doctrine of due process of law in its full glory but that we should adopt the procedural part of it and insist that no person shall be deprived of his life or personal liberty except by the observance of the formalities which justice and fair play require to be observed. The arguments of learned counsel for the petitioner are attractive and in the first blush certainly appeal to our sentiment but on serious reflection I find several insuperable objections to the introduction of the American doctrine of procedural due process of law into our Constitution. That doctrine can only thrive and work where the legislature is subordinate to the judiciary in the sense that the latter can sit in judgment over and review all acts of the legislature. Such a doctrine can have no application to a field where the legislature is supreme. That is why the doctrine of \"due process of law\" is quite different in England where is supreme. This difference is pointedly described by in v. People of California (1) at p. 531: ", "\"The concessions of were wrung from the King as guarantees against oppression and usurpation of his prerogatives. It did not enter into the minds of the barons to provide security against their own body or in favour of the commons by limiting the power of , so that bills of attainder, ex post facto laws, laws declaring forfeitures of estates and other arbitrary Acts of legisla- tion which occur so frequently in English history, were never regarded as inconsistent with the law of the land, for, notwithstanding what was attributed to Lord in. 's (1) (1883) 110 U.S. 516. ", "316 ", "case, [8 Coke 115, 118 (a),] the omnipotence of over the Common Law was absolute, even against common right and reason. The actual and practical security for English liberty against legislative tyranny was the power of a free public opinion represented by the . In this country written Constitutions were deemed essen- tial to protect the rights and liberties of the people against the encroachments of power delegated to their gov- ernments and the provisions of Magna Charta were incorporat- ed in the bills of rights. They were limitations upon all the powers of government, legislative as well as executive and judicial.\" ", "This basic distinction between the two systems should never be lost sight of, if confusion of thought is to be avoided. Although our Constitution has imposed some limita- tions on the legislative authorities, yet subject to and outside such limitations our Constitution has left our and the State supreme in their respective legislative fields. In the main, subject to the limitations I have mentioned, our Constitution has preferred the supremacy of the to that of the . The English principle of due process of law is, therefore, more in accord with our Constitution than the American doctrine which has been evolved for serving quite a differ- ent system. The picturesque language of quoted above, while that is quite appropriate to the American Constitution which does not recognise the supremacy of the , is wholly out of place in, and has no applica- tion to, a Constitution such as ours, which, subject only to certain restrictions, recognises the supremacy of the Legis- latures in their respective fields. In the next place, it is common knowledge that our Constitution-makers deliberate- ly declined to adopt the uncertain and shifting American doctrine of due process of law and substituted the words' \"except in due process of law\" that were in the original draft by the more specific expression \"except in accordance with procedure established by law.\" To try to bring in the American doctrine, in spite of this fact, will be to stulti- fy the intention of the Constitution as expressed in article 21. In the third place, in view of the plain meaning of the language of that article as construed and explained above it is impossible to let in what have been called the principles of natural justice as adopted in the procedural due process of law by . Again, even the all-pervading little word \"due\" does not find a place in article 21 so as to qualify the procedure. It speaks of procedure and not \"due\" procedure and, therefore, \"the intellectual yardstick\" of the is definitely ruled out. Finally, it will be incongruous to import the doctrine of due process of law without its palliative, the doctrine of police powers. It is impossible to read the last mentioned doctrine into article 21. ", "It has also been suggested as a compromise that this Court should adopt a middle course between the flexible principles of natural justice as adopted by the American doctrine of due process of law and the unbending rigidity of mere -made laws. h is said that we have our Code of Criminal Procedure which embodies within its provisions certain salutary principles of procedure and we must insist that those underlying principles should be regarded as procedure established or settled by our positive law. But who will say what are those fundamental principles? What principles. do I reject as inessential and what shall I adopt as fundamental ? What is fundamental to me today may not appear to be so to another Judge a decade hence, for principles give way with changing social conditions. In America it was suggested that due process of law should be taken to mean the general body of common law as it stood at the date of the Constitution. In v. (1) it was negatived in the following words: ", "\"'Due process of law' does not mean the general body of the law, common and statute, as it was at the time the Constitution took effect; for that would deny the legisla- ture power to change or amend the law in any particular.\" The , however, brought in principles of (1) 44 Minn. 97. ", "318 ", "natural justice under the due process clause. To sanctify what I may to-day regard as the basic principles underlying our Code of Criminal Procedure will be to make them immuta- ble and to prevent the legislature even to improve upon them. This is nothing but imposing on the legislature a limitation which the Constitution has not placed on it. I do not think it is a permissible adventure for the to undertake. It is a dangerous adventure, for it will bring about stagnation which means ruin. We must accept the Con- stitution which is the supreme law. The Constitution has by article 21 required a procedure and has prescribed certain minimum requirements of procedure in article 22. To add to them is not to interpret the Constitution but to recast it according to our intellectual yardstick and our unconscious predilections as to what an ideal Constitution should be. Article 21 , in my judgment, only formulates a substan- tive fundamental right to life and personal liberty which in its content is not an absolute right but is a limited right having its ambit circumscribed by the risk of its being taken away by following a procedure established by law made by the appropriate legislative authority and the proximate purpose of article 21 is not to prescribe any particular procedure. It is to be kept in mind that at the date when the Constitution came into effect we had the Indian Penal Code creating diverse offences and a conviction for any of them would deprive a person of his personal liberty. Under article 246 read with Entry 1 of the Concurrent List, Par- liament or could add more offences and create further means for taking away personal liberty. But all this deprivation of personal liberty as a result of a conviction could only be done by following the procedure laid down by the Code of Criminal Procedure. Again, at the date of this Constitution there were preventive detention laws in almost every province and a person could be deprived of his personal liberty under those laws. Those laws, however, provided a procedure of a sort which had to be followed. Therefore, before the Constitution came into force, personal liberty could be taken away only by following the procedure enacted by the Criminal Procedure Code in the case of punitive detention or by the procedure enacted by the different Security Act s in case of preventive detention. Power, however, has been given to and under article 246 read with Entry 2 of the Concurrent List to make laws with re- spect to Criminal Procedure. If that article stood by itself the or could repeal the whole of the Criminal Procedure Code and also do away even with the skeleton procedure provided in the Security Act s. If article 246 stood by itself then the appropriate legislative authority could have taken away the life and personal liberty of any person without any procedure at all. This absolute supremacy of the legislative authority has, however, been cut down by article 21 which delimits the ambit and scope of the substantive right to life and person- al liberty by reference to a procedure and by article 22 which prescribes the minimum procedure which must be fol- lowed. In this situation the only power of the is to determine whether the impugned law has provided some proce- dure and observed and obeyed the minimum requirements of article 29. and if it has, then it is not for the to insist on more elaborate procedure according to its notion or to question the wisdom of the legislative authority in enacting the particular law, however harsh, unreasonable, archaic or odious the provisions of that law may be. It is said that if this strictly technical interpreta- tion is put upon article 21 then it will not constitute a fundamental right at all and need not have been placed in the chapter on Fundamental Rights, for every person's life and personal liberty will be at the mercy of the which, by providing some sort of a procedure and complying with the few requirements of article 22 , may, at any time, deprive a person of his life and liberty at its pleasure and whim. There are several answers to this line of argument. Article 21 as construed by me will, if nothing else, cer- tainly protect every person against the executive and as such will be as much a fundamental right deserving a place in the Constitution as the famous 39th Chapter of the Magna Charta was and is a bulwark of liberty in English law. It appears to me that article 21 of our Constitution read with article 32 also gives us some protection even against the legislative authority in that a person may only be deprived of his life and personal liberty in accordance with procedure which, although enacted by it, must at least conform to the requirements of article 22. Subject to this limitation our parliament or may enact any law and provide any procedure it pleases for depriving a person of his life and personal liberty under article 21. Such being the meaning of that article and the ambit and extent of the fundamental right of life and personal liberty which the people of this country have given unto themselves, any law for depriving any person of his life and personal liberty that may be made by the appropriate legislative authority under article 246 and in conformity with the requirements of article 22 does not take away or abridge any right conferred by article 21 , for the very right conferred by that article is circumscribed by this possi- bility or risk and, therefore, such law cannot be regarded as violating the provisions of article 13 (2). Our Constitution is a compromise between ary supremacy of England and the supremacy of the Supreme of the United s. Subject to the limitations I have mentioned which are certainly justiciable, our Constitution has ac- cepted the supremacy of the legislative authority and, that being so, we must be prepared to face occasional vagaries of that body and to put up with enactments of the nature of the atrocious English statute to which learned counsel for the petitioner has repeatedly referred, namely, that the Bishop of Rochester's cook be boiled to death. If may take away life by providing for hanging by the neck, logi- cally there can be no objection if it provides a sentence of death by shooting by a firing squad or by guillotine or in the electric chair or even by boiling in oil. A procedure laid down by the legislature may offend against the 's sense of justice and fair play and a sentence provided by the legislature may outrage the 's notions of penology, but that is a wholly irrelevant consideration. The may construe and interpret the Constitution and ascertain its true meaning but once that is done the cannot question its wisdom or policy. The Constitution is supreme. The must take the Constitu- tion as it finds it, even if it does not accord with its preconceived notions of what an ideal Constitution should be. Our protection against legislative tyranny, if any, lies in ultimate analysis in a free and intelligent public opinion which must eventually assert itself. The conclusion I have arrived at does not introduce any novelty, for in many other Constitutions the supremacy of the legislature is recognised in the matter of depriving a person of his life, liberty and property. The English Democratic Constitution is one in point. Take the Constitu- tion of the Irish Free . Article 40 (4) (i) provides that no citizen shall be deprived of personal liberty save in accordance with law, and article 50 (5) guarantees that the dwelling of every citizen is inviolable and shall not be forcibly entered save in accordance with law. The words \"in accordance with law\" in both the above clauses must mean the same thing and I have no doubt in my mind, reading clause (5)that it means in accordance with the -made law, for we have not been referred to any rule prescribed by natural justice regulating searches of, or entry into, dwelling houses. Article 107 (2) of the Czechoslovakian Constitution uses the words \"in accordance with law\" which, read with clause (1) of that article, obviously means the law to be made which will form part of the Constitution. Take the Constitution of the Free City of Danzig. Article74 of that Constitution which is in Part II headed \"Fundamental Bights and Duties\" provides as follows: ", "\"The liberty of the person shall be inviolable. No limitation or deprivation of personal liberty may be imposed by public authority, except by virtue of a law.\" ", "322 ", "The word\" law\" clearly cannot, in the context,mcan princi- ples of natural justice- Again, article 75 of that Consti- tution protects the freedom of movement within the Free City and the right to stay and to settle at any place, to acquire real property and to earn a living. It concludes by saying that this right shall not be curtailed without legal sanctions. Legal sanctions, in this context, can only mean sanctions of the City laws. Article 114 of the Weimar Constitution is on the same lines and expressed in almost the same language as article 74 of the Danzig Constitution. Take the Japanese Constitution of 1946 from which our arti- cle 21 is reputed to have been taken. Article XXXI of that Constitution says: ", "No person shall be deprived of life or liberty nor shall any other criminal penalty be imposed, except according to procedure established by law.\" ", "Surely the words \"except according to procedure established by law\" in their application to the imposition of criminal penalty must mean State-made law and the same words in the same sentence in the same article cannot, according to ordi- nary rules of construction of statutes, mean a different thing in their application to deprivation of life or liber- ty. I am aware that it is not right to construe one Consti- tution in the light of another and that is not my purpose when I refer to the other Constitutions; but I do think that after reading the relevant provisions of other written Con- stitutions one sees quite clearly that there is no pressing special reason applicable to or inherent in written Consti- tutions which requires the importation of the principles of natural justice or of the American doctrine of due process of law into our Constitution. The several Constitutions referred to above have not adopted that American doctrine but have been content with leaving the life and liberty of their citizens to the care of the laws made by their legis- latures. It is no novelty if our Constitution has done the same. For all these reasons, in spite of the very able and attractive arguments of the learned counsel for the peti- tioner which I freely acknowledge, I am not convinced that there is any scope for the introduction into article 21 of our Constitution of the doctrine of due process of law even as regards procedure. I may or may not like it, but that is the result of our Constitution as I understand it. The learned Attorney-General has referred to certain debates in on the original clause which has now become article 21 , not as evidence to be used in interpreting the language of article 21 but as disclos- ing the historical background. His purpose, he says, is to show that the framers of our Constitution had the essential difference in the meaning of the phrases \"due process of law\" and \"according to procedure established by law\" clearly explained to them, that they knew that the former implied the supremacy of the judiciary and the latter the supremacy of the legislature and with all that knowledge they deliber- ately agreed to reject the former expression and adopt the latter. As, in my opinion, it is possible to interpret the language of article 21 on the ordinary rules of interpreta- tion of statutes, I do not think it is at all necessary to refer to the debates. As I do not propose to refer to, or rely on, the debates for the purposes of this case, I express no opinion on the question of the admissibility or otherwise of the debates. ", "I now pass on to article 22. The contention of learned counsel for the petitioner is that article 21 by reason of the last few words, \"according to procedure established by law\" attracts the four requirements of the American proce- dural due process of law as summarised by to which reference has been made earlier, and that those require- ments, except to the extent they have been expressly abro- gated or modified by article 22 , must be strictly followed before a person may be deprived of his life or personal liberties. I have already stated for reasons set forth above, that there is no scope for introducing any rule of natural justice or the American procedural due process of law or any underlying principle of our Code of Criminal Procedure into that article. This being the conclusion I have arrived at, the major premise assumed by learned coun- sel for the petitioner is missing and this line of argument does not begin and cannot be accepted. The learned Attorney-General, on the other hand. has at one stage of his argument, urged that article 21 has nothing to do with preventive detention at all and that preventive detention is wholly covered by article 22 (4) to (7) which by themselves constitute a complete code. I am unable to accede to this extreme point of view also. The true posi- tion, as I apprehend it, lies between the two extreme views. Article 21 , to my mind, gives protection to life and person- al liberty to the extent therein mentioned. It does not recognise the right to life and personal liberty as an absolute right but delimits the ambit and scope of the right itself The absolute right is by the definition in that article cut down by the risk of its being taken away in accordance with procedure established by law. It is this circumscribed right which is substantively protected by article 21 as against the executive as well as the legislature, for the Constitution has conditioned its depri- vation by the necessity for a procedure established by law made by itself. While subclauses (2) to (6) of article 19 have put a limit on the fundamental rights of a citizen, articles 21 and 22 have put a limit on the power of the given under article 246 read with the legislative lists. Under our Constitution our life and personal liberty are balanced by restrictions on the rights of the citizens as laid down in article 19 and by the checks put upon the by articles 21 and 22. preventive detention deprives a person of his personal liberty as effectively as does punitive detention and, therefore, personal liberty, circum- scribed as it is by the risk of its being taken away, re- quires protection against punitive as well as preventive detention. The language of article 21 is quite general and is wide enough to give its limited protection to personal liberty against all forms of detention. It protects a person against preventive detention by the executive without the sanction of a law made by the legislature. It prevents the legislature from taking away a person's personal liberty except in accordance with procedure established by law, although such law is to be by itself. If, as contended by the learned Attorney-General and held by me, article 19 only protects the rights of a free citizen as long as he is free and does not deal with total deprivation of personal liberty and if, as contended by the learned Attorney-General, article 21 does not protect a person against preventive detention then where is the protection for life and personal liberty as substantive rights which the procedural provisions of arti- cle 22 may protect ? What is the use of procedural protec- tion if there is no substantive right ? In my judgment article 21 protects the substantive rights by requiring a procedure and article 22 gives the minimum procedural pro- tection. ", "Clauses (1) and (2) of article 22 lay down the procedure that has to be followed when a man is arrested. They ensure four things: (a) right to be informed regarding grounds of arrest, (b) right to consult, and to be defended by, a legal practitioner of his choice, (c) right to be produced before a magistrate within 24 hours and (d) freedom from detention beyond the said period except by order of the magis- trate. These four procedural requirements are very much similar to the requirements of the procedural due process of law as enumerated by . Some of these salutary protections are also to be found in our Code of Criminal Procedure. If the procedure has already been prescribed by article 21 incorporating the principles of natural justice or the principles underlying our Code of Criminal Procedure what was the necessity of repeating them in clauses (1) and (2) of article 22 ? Why this unnecessary overlapping ? The truth is that article 21 does not prescribe any particular procedure but in defining the protection to life and person- al liberty merely envisages or indicates the necessity for a procedure and article 22 lays down the minimum rules of procedure that even cannot abrogate or overlook. This is so far as punitive detention is concerned. But clause (3) of article 22 expressly provides that none of the procedure laid down in clauses (1) and (2) shall apply to an alien enemy or to a person who is arrested or detained under any law providing for preventive detention. It is thus expressly made clear that a detenu need not be produced before the magistrate and he is not to have the assistance of any lawyer for consultation or for defending him. Such being the express provision of our Constitution nobody can question its wisdom. So I pass on. ", "Clauses (4), (5), (6) and (7) of article 22 in terms relate to preventive detention. Article 246 authorises the appropriate legislature to make a law for preventive deten- tion in terms of Entry 9 in List I and/or Entry 3 in List III of the Seventh Schedule. On this legislative power are imposed certain limitations by article 22 (4) to (7). According to this the legislature, whether it be or , is reminded that no law made by it for preventive detention shall authorise the detention of a person for a longer period than three months except in two cases mentioned in sub-clauses (a) and (b). The proviso to sub-clause (a) and sub-clause (b) refer to a law made only by under clause (7). Under clause (7) it is alone and not any State that may prescribe what are specified in the three subclauses of that clause. Although may make a law for preventive detention in terms of Entry 3 in List III of the Seventh Schedule no such law may authorise detention for more than three months unless the provisions of sub-clauses ", "(a)and (b) of clause (4) sanction such detention. Even a law made by cannot authorise detention for more than three months unless it is a law made under the provi- sions of clause (7). In short, clause (4) of article 22 provides a limitation on the legislative power as to the period of preventive detention. Apart from imposing a limitation on the legislative power, clause (4) also pre- scribes a procedure of detention for a period longer than three months by providing for an advisory board. Then comes clause (5). It lays down the procedure that has to be fol- lowed when a person is detained under any law providing for preventive detention, namely, (a) the grounds of the order of detention must be communicated to the detenu as soon as may be, and (b) the detenu must be afforded the earliest opportunity of making a representation against the order. The first requirement takes the place of notice and the second that of a defence or hearing. These are the only compulsory procedural requirements laid down by our Constitution. There is nothing to prevent the from providing an elaborate procedure regulating preventive detention but it is not obliged to do so. If some procedure is provided as envisaged by article 21 and the compulsory requirements of article 22 are obeyed and carried out nobody can, under our Constitution, as I read it, complain of the law providing for preventive detention. ", "Learned counsel for the petitioner concedes that the four requirements of procedural due process summarised by will have to be modified in their application to preventive detention. Thus he does not insist on a prior notice before arrest, for he recognises that such a require- ment may frustrate the very object of preventive detention by giving an opportunity to the person in question to go underground. The provision in clause (5) for supplying grounds is a good substitute for notice. He also does not insist that the to judge the reasonableness of the detention should be a judicial tribunal. He will be satis- fied if the tribunal or advisory board, as it is called in article 22 of the Constitution, is an impartial body and goes into the merits of the order of detention and its decision is binding on the executive government. He insists that the detenu must have a reasonable and effective oppor- tunity to put up his defence. He does not insist on the assistance of counsel, for that is expressly taken away by the Constitution itself. But he insists on what he calls an effective opportunity of being heard in person before an impartial tribunal which will be free to examine the grounds of his detention and whose decision should be binding alike on the detenu and the executive authority which detains. The claim may be reasonable but the question before the is not reasonableness or otherwise of the provisions of article 22 (4) to (7). Those provisions are not justicia- ble, for they are the provisions of the Constitution itself which is supreme over everybody. ", "42 ", "328 ", "The can only seek to find out, on a proper construc- tion, what protection has in fact been provided. The Consti- tution has provided for the giving of the grounds of deten- tion although facts as distinguished from grounds may be withheld under clause (6) and the right of representation against the order of detention. It has provided for the duration of the detention. There the guaranteed fundamental procedural rights end. There is no provision for any trial before any tribunal. One cannot import the condition of a trial by any tribunal from the fact that a right of repre- sentation has been given. The right to make representation is nothing more than the right to \"lodge objections\" as provided by the Danzig Constitution and the Weimar Constitu- tion. The representations made will no doubt be considered by the Government. It is said a prosecutor cannot be himself the judge. Ordinarily, the orders of detention will in a great majority of cases be made by the District Magistrate or Sub-Divisional Officer or the Commissioner of Police. The representation of the detenu goes to the Government. Why should it be assumed that a high government official at the seat of the government will not impartially consider the representation and judge the propriety of the order of detention made by local officials ? Clause (5) does not imperatively provide for any oral representation which a hearing will entail. Indeed the exclusion of the provisions of clauses (1) and (2) negatives any idea of trial or oral defence. The may not, by temperament and training, like this at all but it cannot question the wisdom or the policy of the Constitution. In my judgment as regards pre- ventive detention laws, the only limitation put upon the legislative power is that it must provide some procedure and at least incorporate the minimum requirements laid down in article 22 (4) to (7). There is no limitation as regards the substantive law. Therefore, a preventive detention law which provides some procedure and complies with the require- ments of article 22 (4) to (7) must be held to be a good law, however odious it may appear to the to be. ", "329 ", "Learned counsel for the petitioner contends -that the impugned Act does not comply with even the bare requirements of article 22 (4) to (7). It is pointed out that section 3 of the Act does not lay down any objective test but leaves it to the authority to define and say whether a particular person comes within the legislative heads. In other words, it is contended that has not legislated at all but has delegated its legislative powers to the executive authorities. I do not think there is any substance in this contention. In the first place this is not an objection as to procedure but to substantive law which is not open to the 's scrutiny. In the next place this contention over- looks the basic distinction between the delegation of power to make the law and the conferring of an authority and discretion as to its execution to be exercised under and in pursuance of the law. The impugned Act has specifically set forth an ascertainable standard by which the conduct of a particular person is to be judged by the detaining authori- ty. ", "It is next urged that section 12 of the Act does not comply with the requirements of clause (7) of article 22 for two reasons, namely-- ", "(i) that clause (7) contemplates a law prescribing the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months and then another law thereafter providing for preventive detention for a period longer than three months; and ", "(ii) that under clause (7) must prescribe both the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months. ", "As regards the first point I do not see why must make two laws, one laying down the principles for longer detention and another for detention for such longer period. It may be that a cannot provide for longer detention until has made the law, but I can see no reason why cannot do both by the same Act. In fact, clause (4) (b) contemplates the detention itself to be in accordance with the provisions of any law made by under sub- clauses (a) and (b) of clause (7). Therefore, the detention can well be under the very law which the makes under sub-clauses (a) and (b) of clause (7). As to the second point the argument is that has a discre- tion under clause (7) to make a law and it is not obliged to make any law but when our chooses to make a law it must prescribe both the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months. I am unable to construe clause (7) (a) in the way suggested by learned counsel for the petitioner. It is an enabling provision empowering to prescribe two things. may prescribe either or both. H a father tells his delicate child that he may play table tennis and badminton but not the strenuous game of football, it obviously does not mean that tim child, if he chooses to play at all, must play both table tennis and badminton. It is an option given to the child. Likewise, the Constitution gives to the power of prescribing two things. is not obliged to prescribe at all but if it chooses to prescribe it may prescribe either or both. Clause 7 (a), in my opinion, has to be read distributively as follows: The may prescribe the circumstance under which a person may be detained for a period longer than three months and may prescribe the class or classes of cases in which a person may be detained for a period longer than three months. That appears to me to be consonant with sound rules of construction. Further, the circumstances and the class or classes of cases may conceivably coalesce. Indeed the case No. 1 of 1950 before ( v. The Chief Secretary) itself indicates that the same provision may be read as circumstances or as a classification. In that case learned counsel conceded that section 12 had prescribed the circumstances but his com- plaint was that it had not prescribed the class or classes of cases. The majority of the repelled this contention. One learned Judge er, held that section 12 had prescribed the class or classes of cases but had not prescribed the circumstances. It is, therefore, clear that the classification itself may indicate the circumstances. Again, the classification may be on a variety of bases. It may be according to provinces the detenus come from. It may be according to the age of the detenus. It may be according to the object they are supposed to have in view or according to the activities they are suspected to be engaged in. In this case has taken five out of the six legislative heads and divided them into two categories. The detenus are thus classified ac- cording to their suspected object or activities endangering the several matters specified in the section. I do not see why classification cannot be made on the footing of the objectives of the detenus falling in some of the legislative heads, for each legislative head has a specific connotation well understood in law. If I am correct that there has been a classification then the fact that a person falls within one or the other class may well be the circumstances under which he may be detained for a period longer than three months. I do not consider it right, as a matter of con- struction, to read any further limitation in clause 7 (a) of article 22. In my judgment Par]lament was not obliged under clause (7) to prescribe both circumstances and classes, and in any case has in fact and substance prescribed both. I am conscious that a law made by under article 22 (7) will do away with the salutary safeguard of the opinion of an advisory board. But it must be remembered that our Constitution itself contemplates that in certain circumstances or for certain class or classes of detenus even the advisory board may not be safe and it has trusted to make a law for that purpose. Our preference for an advisory board should not blind us to this aspect of the matter. It is true that circumstances ordinarily relate to extraneous things, like riots, commotion, political or communal or some sort of abnormal situation and it is said that the framers of the Constitution had in mind some such situation when the advisory board might be done away with. It is also urged that they had in mind that the more dangerous types of detenus should be denied the privi- lege of the advisory board. I am free to confess that prescription of specific circumstances or a more rigid and definite specification of classes would have been better and more desirable. But that is crying for the ideal. The Constitution has not in terms put any such limitation as regards the circumstances or the class or classes of cases and it is idle to speculate as to the intention of the Constitution-makers, who, by the way, are the very persons who made this law. It is not for the to improve upon or add to the Constitution. If the law duly made by is repugnant to good sense, public opinion will compel to alter it suitably. ", "Finally, an objection is taken that section 14 of the impugned Act takes away or abridges the right of the detenu to move this by appropriate proceedings. Both clauses (1) and (2) of article 32 speak of enforcement of rights conferred by Part III. The right to move this is given to a person not for the sake of moving only but for moving the for the enforcement of some rights conferred by Part III and this has been given power to issue direc- tions or orders or writs for the enforcement of any of such rights. In order, therefore, to attract the application of article 32 , the person applying must first satisfy that he has got a right under Part III which has to be enforced under article 32. I have already said that article 19 does not deal with the freedom of the person. I have also said that articles 21 and 22 provide for protection by insisting on some procedure. Under article 22 (5) the authority making the order of detention is enjoined, as soon as may be, to communicate to the detenu the grounds on which that order has been made. This provision has some purpose, name- ly, that the disclosure of the grounds will afford the detenu the opportunity of making a representation against the order. Supposing the authority does not give any grounds at all as distinct from facts referred to in Clause (6). Surely, the detenu loses a fundamental right because he is prevented from making a representation against the order. of deten- tion. Suppose the authority hands over to the detenu a piece of paper with some scribblings on it which do not amount to any ground at all for detention. Then also the detenu can legitimately complain that his right has been infringed. He can then come to the to get redress under article 32 , but he cannot show to the the piece of paper with the scribblings on it under section 14 of the Act and the cannot judge whether he has actually got the grounds which he is entitled to under article 22 (5). In. such a case the detenu may well complain that both his substantive right under article 22 (5)' as well as his right to constitutional remedies under article 32 have been in- fringed. He can complain of infringement of his remedial rights under article 32 , because he cannot show that there has been an infringement of his substantive right under article 22 (5). It appears to me, therefore, that section 14 of the Act in so far as it prevents the detenu from disclosing to the the grounds communicated to him is not in conformity with Part III of the Constitution and is, therefore, void under article 13 (2). That section, howev- er, is clearly severable and cannot affect the whole Act. On this question the views of and of Patna in Criminal Miscellaneous No. 124 of 1950 ( v. The ) and the majority of the learned Judges of the Calcutta High in Full Bench Case No. 1 of 1950 ( v. The Chief Secretary) appear to be correct and sound. ", "For the reasons I have given above, in my opinion, the impugned Act is a valid law except as to section 14 in so far as it prevents the grounds being disclosed to the . The petitioner before us does not complain that he has not got proper grounds. Further, the period of his detention under the impugned Act has not gone beyond three months and, in the circumstances, this application should, in my opinion, stand dismissed. Petition dismissed. ", "Agent for the petitioner: . Agent for the State of Madras and Union of India: . ", "335"], "relevant_candidates": ["0000025987", "0000245155", "0000427436", "0000806892", "0001286989"]} {"id": "0001860679", "text": ["PETITIONER: MUNICIPAL CORPORATION OF DELHI Vs. RESPONDENT: RAM KISHAN ROHTAGI AND OTHERS DATE OF JUDGMENT01/12/1982 BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA VENKATARAMIAH, E.S. (J) CITATION: 1983 AIR 67 1983 SCR (1) 884 1983 SCC (1) 1 1982 SCALE (2)1124 CITATOR INFO : RF 1983 SC 158 (1) D 1983 SC 288 (3) R 1983 SC 595 (13) RF 1986 SC 833 (46) R 1989 SC 1 (6) R 1992 SC1168 (9) ACT: Code of Criminal Procedure, 1973-ss. 4827 397(2) and 319 - Allegations in complaint not constituting offence against accused-Exercise of inherent power under s. 482 to quash interlocutory order summoning accused not affected by s. 397(2)-Court has power under s. 319 to proceed against such accused on production of additional evidence. HEADNOTE: A Food Inspector of visited tho premises of a shopkeeper and purchased a sample of toffees which, when analysed by Public Analyst, was found not to conform to the prescribed standards. In clause No. S of the complaint filed before the Magistrate it was stated: \"That the accused No. 3 is tho Manager of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of sampling.\" Accused No. 2 was the Company which manufactured the toffees, accused No. 3 was its Manager and accused Nos. 4 to 7 were its Directors (respondents l to 5 here). The Magistrate passed an order summoning all the accused for being tried for violation of ss. 7 / 16 of the Prevention of Food Adulteration Act and that order was assailed before . It was argued before that the complaint did not attribute any criminal responsibility to the Directors inasmuch as there was no clear averment of the fact that the Directors were really incharge of the manufacture of toffees and were responsible for the conduct of business and that the words 'as such' in clause No. S of the complaint indicated that the complainant had merely presumed that the Directors of the Company must be guilty because they were holding a particular office. accepted the argument and quashed the proceedings against the Directors as well as the Manager of the Company. In appeal, it was contended on behalf. Of the appellant that on the allegations made in the complaint, a clear case had been made out against all the respondents and ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence. Counsel for respondents contended that even taking the allegations of the complaint ex facie no case for trial had been made out. 885 Upholding the order of in respect of quashing of proceedings against the Directors and allowing the appeal in respect of quashing of proceedings against the Manager, ^ HELD: Where the allegations set out in the complaint do not constitute any offence it is competent to exercising its inherent jurisdiction under 8. 482 of the Code of Criminal Procedure, 1973 to quash the order passed by the Magistrate taking cognizance of the offence. It is true that s. 397(2) bars the jurisdiction of the court in respect of interlocutory orders. But s. 482 confers a separate and independent power on alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the court has been seriously abused. It is not merely a rovisional power meant to be exercised against the orders passed by subordinate courts. Nothing in s. 397(2) limits or affects the inherent power under s. 482 . The scope, ambit and range of the power under s. 482 are quite different from those of the power conferred under s. 397 . It may be that in some cases there may be overlapping but such cases would be few and far between. It is well settled that the inherent powers under s. 482 can be exercised only when no other remedy is available to the litigant and Dot where a specific remedy is provided by the statute. It is clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. The test is that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then would be justified in quashing the proceedings in the exercise of its powers under s. 482. [889 A-B, G; 887 C; 888 A-B; 887 G-H; 888 C-D; 890 1 S.C.R. 749; Ra; ., 1 S.C.C. 43; Smt. Nagavva v. and ., Suppl. S.C.R. 123; and . 2 S.C.R. 357, referred to. In the instant case, so far as the Manager of the Company was concerned, from the very nature of his duties it could be safely inferred that he would be vicariously liable for the offence as he must have been in the knowledge of the manufacture and sale of the disputed sample. So far as the Directors of the Company were concerned, there was nothing to show, apart from the presumption drawn by the complainant, that there was any act committed by them from which a reasonable inference could be drawn to the effect that they were also vicariously liable and was right in holding that no case had been made out ex facie on the allegations made in the complaint. {891 D; 891 A; 891 E-F] 2. The mere fact that the proceedings have been quashed against the Directors will not prevent the court from exercising its discretion under s. 319 of the Code if it is fully satisfied that a case for taking cognizance against them is made out on the additional evidence led before it. Section 319 gives ample powers to any court to take cognizance and add any person not being an accused before it and try him along with the other accused. However, this being an extraordinary power conferred on the court, it should be used very sparingly and only if compelling reasons exist for doing so. [893 G; 893 G; 893 F] and Anr. v. State of Punjab and Anr. 2 S.C.R. 306, referred to. 886 JUDGMENT: ", "CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 701 of 1980. ", "Appeal by special leave from the Judgment and order dated the 5th March, 1980 of in Criminal Revision No. 335 of 1974. ", " for the Appellants. ", ", Mrs. and for the Respondents. ", ", , and for Respondents. ", "The Judgment of the Court was delivered by , 1. This appeal by special leave is directed against a judgment dated March 5, 1980 of quashing the proceedings taken against respondents Nos. 1 to S and arises in the following circumstances. ", "On March 25, 1974, one , Food Inspector, visited premises No. 5171, Basant Road, Delhi where had kept for sale 'Morton Toffees'. The said Inspector after purchasing the sample of the article sent it to the Public Analyst who opined that the said sample did not conform to the standards prescribed for toffees. The toffees were manufactured by Upper Ganges Sugar Mills. Respondent No. 1 () was the Manager of the company and Respondent Nos. 2 to 5 were the Directors of the Company, including the company also. ", "A complaint was filed before the Metropolitan Magistrate who summoned all the respondents for being tried for violating the provisions of the Prevention of Food Adulteration Act (hereinafter referred to as the 'Acts). The said complaint was filed by the Assistant Municipal Prosecutor in the court of Metropolitan Magistrate, Delhi against the accused for having committed offences under sections 7 / 16 of the Act. ", "The only point canvassed before us was that on the allegations made in the complaint, a clear case was made out against all the respondents and ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence. Before going through the relevant part of the complaint, it mag be necessary to say a few words about the law on the subject. ", "After the coming into force of the Code of Criminal Procedure, B 1973 (hereinafter referred to as the 'present Code'), there was a serious divergence of judicial opinion on the question as to whether where a power is exercised under section 397 of the present Code, could exercise those very powers under section 482 of the present Code. It is true that s. 397 (2) clearly bars the jurisdiction of the in respect of interlocutory orders passed in appeal, enquiry or other proceedings. The matter is, however, no longer res integra as the entire controversy has been set at rest by a decision of this in (1) where this pointed out that s. 482 of the present Code had a different parameter and was a provision independent of s. 397(2) . This further held that while s. 397(2) applied to the exercise y of revisional powers of , section 482 regulated the . inherent powers of the court to pass orders necessary in order to prevent the abuse of the process of the court. In this connection, , J. speaking for the observed as follows:- ", "\"On a plain reading of section 482 , however, it would follow that nothing in the Code, which would include sub section (2) of section 397 also, \"shall be deemed to limit or affect the inherent powers of \". But, if we were to say that the said bar is not to operate in the exercise of the inherent power at all, it will be setting at naught one of the limitations imposed upon the exercise of the revisional powers .. But in case the impugned order clearly brings about a situation which is an abuse of the process of the court or for the purpose of securing the ends of justice interference by is absolutely necessary, then nothing contained in section 397(2) can limit or affect the exercise of the inherent power by . But such cases would be few and far between. must exercise the inherent power very sparingly.\" ", "888 ", "It may be noticed that s. 482 of the present Code is the ad verbatim copy of s. 561A of the old Code. This provision confers a separate and independent power on alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the has been seriously abused. It is not merely a revisional power meant to be exercised against the orders passed by subordinate courts. It was under this section that in the old Code, s used to quash the proceedings or expunge uncalled for remarks against witnesses or other persons or subordinate courts. Thus, the scope, ambit and range of s. 561A (which is now s. 482 ) is quite different from the powers conferred by the present Code under the provisions of s. 397 . It may be that in some cases there may be overlapping but such cases would be few and far between. It is well settled that the inherent powers under s. 482 of the present Code can be exercised only when no other remedy is available to the litigant and not where a specific remedy is provided by the statute. Further, the power being an extraordinary one, it has to be exercised sparingly. If these considerations are kept in mind, there will be no inconsistency between sections 482 and 397(2) of the present Code. ", "The limits of the power under s. 482 were clearly defined by this Court in .(l) where Observed as follows:- ", "\"Even so, a general principle pervades this branch of law when a specific provision is made: easy resort to inherent power is not right except under compelling circumstances. Not that there is absence of jurisdiction but that inherent power should not invade areas set apart for specific power under the same Code.\" ", "Another important consideration which is to be kept in mind is as to when acting under the provisions of s. 482 should exercise the inherent power in so far as quashing of criminal q proceedings are concerned. This matter was gone into in greater detail in .(2) where the scope of ss. 202 and 204 of the present Code was consider ed and while laying down the guidelines and the grounds on which proceedings could be quashed this Court observed as follows: ", "889 ", "\"Thus, it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: ", "(1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; ", "(2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; ", "(3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like. ", "The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where can quash Proceedings.\" ", "Same view was taken in a later decision of this Court in (l) where , J. speaking for the Court observed as follows:- ", "\"It is, now settled law that where the allegations set out in the complaint or the charge-sheet do not constitute any offence, it is competent to exercising its inherent jurisdiction under section 482 of the Code of Criminal Procedure to quash the order passed by the Magistrate taking cognizance of the offence.\" ", "890 ", "It is, therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting any thing, if no offence is made out then will be justified in quashing the proceedings in exercise of its powers under s. 482 of the present Code. ", "In the instant cases the argument of the appellant before us is that taking the complaint as a whole, it cannot be said that no offence is made out or that the facts mentioned in the complaint do not constitute any offence against the respondents or some of them. On the other hand, the counsel for the respondents submitted that even taking the allegations of the complaint ex facie no case for trial has been made out at all. ", "Before going to the complaint, we might state that it is common ground that the complaint clearly contains the allegations regarding the visit of the Inspector to the shop of respondent No. 6 () and that the sample taken by him, which was sent to the Public Analyst, was manufactured by , Daryagang, Delhi having its registered office at Calcutta and that the Public Analyst found the samples to be adulterated. There is no dispute regarding these facts. The only point on which the contro- versy centres is as to whether or not on the allegations, the Manager as also the other respondents I to 5 committed any offence. The main clause of the complaint which is the subject matter of the dispute is clause No. S which may be extracted thus: ", "\"5. That the accused No. 3 is the Manager, of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of a sampling.\" ", "According to this clause, accused No. 3 () who is respondent No. I in this appeal and accused Nos. 4-7 who are respondent Nos. 2 to 4, were the Directors of the company, respondent No. 5. So far as the Manager, respondent No. 1, is concerned it was not and could not be reasonably argued that no case is made out against him because from the very nature of his duties, it is manifest that he must be in the knowledge about the affairs of the sale and manufacture of the disputed sample. It was, however, contended that there is no allegation whatsoever against the Directors, respondent Nos. 2 to 4. ", "Reliance has been placed on the words 'as such' in order to argue that because the complaint does not attribute any criminal responsibility to accused Nos. 4 to 7 except that they were incharge of and responsible for the conduct of the business of the company. It is true that there is no clear-averment of the fact that the Directors were really incharge of the manufacture and responsible for the conduct of business but the words 'as such' indicate that the complainant has merely presumed that the Directors of the company must be guilty because they are holding a particular office. This argument found favour with which quashed the proceedings against the Directors as also against the Manager, respondent No. 1. ", "So far as the Manager is concerned, we are satisfied that from the very nature of his duties it can be safely inferred that he would undoubtedly be vicariously liable for the offence; vicarious liability being an incident of an offence under the Act. So far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable. In these circumstances, therefore, we find ourselves in complete agreement with the argument of that no case against the Directors (accused Nos 4 to 7) has been made out ex facie on the allegations made in the complaint and the proceedings against them were rightly quashed. ", "We, however, do not agree that even accused No. 3, respondent No. 1, who is Manager of the Company and therefore directly incharge of its affairs, could fall in the same category as the Directors. Hence, we would set aside that part of the judgment of which quashes the proceedings against the Manager, respondent No. I (). ", "Although we uphold the order of we would like to state that there are ample provisions in the Code of Criminal Procedure, 1973 in which the Court can take cognizance against persons who have not been made accused and try them in the same manner along with the other accused. In the old Code, s. 351 contained a lacuna in the mode of taking cognizance if a new person was to be added as an accused. 1 he Law Commission in its 41st Report (para 24.81) adverted to this aspect of the law and s. 319 of the present Code gave full effect to the recommendation of by removing the lacuna which was found to exist in s. 351 of the old Code. Section 319 as incorporated in the present Code may be extracted thus:- ", "\"319. Power to proceed against other persons appearing to be guilty of offence. ", "(1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed. ", "(2) Where such person is not attending the Court, he may be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid. ", "(3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the enquiry into, or trial of, the offence which he appears to have committed. ", "(4) Where the Court proceeds against any person under sub-section (1) then- ", "(a) the proceedings in respect of such person shall be commenced afresh, and the witnesses re-heard; ", "(b) subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the took cognizance of the offence upon which the inquiry or trial was commenced.\" ", "This provision gives ample powers to any court to take cognizance and add any person not being an accused before it and try him alongwith the other accused. This provision was also the subject matter of a decision by this in .(1) where , J., speaking for the observed thus:- ", "\"A plain reading of section 319 (1), which occurs in chapter XXIV dealing with general provisions as to inquiries and trials, clearly shows that it applies to all the Courts including and as such will have the power to add any person, not being the accused before it, but against whom there appears during trial sufficient evidence indicating his involvement in the offence, as an accused and direct him to be tried along with the other accused.\" ", "In these circumstances, therefore, if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have been quashed have also committed the offence the can take cognizance against them and try them along with the other accused. But, we would hasten to add that this is really an extraordinary power which is conferred on the and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken. More than this we would not like to say anything further at this stage. We leave the entire matter to the discretion of the court concerned so that it may act according to law. We would, however, make it plain that the mere fact that the proceedings have been quashed against respondent Nos. 2 to S will not prevent the court from exercising its discretion if it is fully satisfied that a case for taking cognizance against them has been made out on the additional evidence led before it. ", "894 ", "For these reasons, therefore, we allow this appeal only to the extent that the order of quashing the proceedings against the Manager (), respondent No. 1, is hereby set aside and that of the Metropolitan Magistrate is restored. As regards the other respondents (Directors) the order of stands and the appeal in respect of these respondents only will stand dismissed. An attested copy of this judgment be placed on the file of criminal appeal No. 749 of 1980. ", "H.L.C. Appeal partly allowed."], "relevant_candidates": ["0000056823", "0000179764", "0000646292", "0000723828", "0001547506"]} {"id": "0001860806", "text": ["JUDGMENT - and were partners in the firm of and Co., Panruti. submitted his returns for the assessment years 1947-48 to 1954-55 and was duly assessed. Likewise, made his returns for the assessment years 1948-49 to \u00e81954-55. The assessment of the incomes of these two persons during the relevant assessment years covered their partnership income in the above-said firm. The assessments were made in the status of resident and ordinarily resident. ", "In the course of the assessment proceedings for the assessment year 1956-57, the Income-tax Officer became aware that these assessees were non-residents and that they had income outside the taxable territories which if taken into account under the relevant provisions of the Indian Income-tax Act , would attract tax at a rate higher than that at which they had been assessed. Accordingly, he reopened the assessments of these two assessees for the said years and issued notices to them under section 34 of the Act. In the returns filed by the assessees in response to these notices, they declared their status as non-residents and furnished their incomes as they appeared in the original returns made by them. They objected to the proceedings under section 34 of the Act as illegal. The Income-tax Officer, however, assessed them to tax at the rates applicable to non-residents but on the income that arose or accrued in the taxable territories. Against these assessments, appeals were taken to the Appellate Assistant Commissioner, it being contended that section 34 of the Act did not authorise the assessment at the maximum rate, that the notices were invalid inasmuch as they did not contain the necessary particulars required to be stated therein and further that the provision of the Indian Income-tax Act imposing the liability to tax on a non-resident at the maximum rate was unconstitutional as offending article 14 of the Constitution of India. These contentions were overruled. One other contention that was raised was that in the case of , there had been an earlier proceeding under section 34 of the Act in respect of the assessment years 1949-50 to 1951-52 and that the statute did not authorise a second proceeding under section 34 . This contention was also rejected. ", "A further appeal to the also failed, the assessees being unable to convince the of the sustainability of any of these above contentions. ", "Under section 66(1) of the Act, the assessees moved the to refer certain questions of law for the consideration of this court, and the questions of law so referred ar : ", "\"(1) Whether the provision of the Income-tax Act for the levy of maximum rate is not a denial of equality before the law within the meaning of article 14 of the Constitution of India and void under article 13 and the present assessment as a non-resident at the maximum rate is not, therefore, void? ", "(2) Whether the aforesaid reassessments under section 34 for all the assessment years 1947-48 to 1954-55 in the case of and assessment years 1948-49 to 1954-55 in the case are valid?\" ", "We shall deal with the second question first. One of the grounds urged on behalf of the assessees is that the notice did not comply with the requirements of the section and furnished no information to the assessee of the particular reasons which led to the reopening of the assessments. It is claimed that the assessees were not put on notice on the basis of the reopening and that, \u00e8therefore, the notice is bad in law and the proceedings stand vitiated. What is contended in this regard is that in the copy of the notice issued by the Income-tax Officer, the Income-tax Officer stated that he had reason to believe that the assessees income assessable to income-tax for the relevant assessment year had (a) escaped assessment, (b) been under-assessed, (c) been assessed at too low a rate, (d) been subject to excessive relief and (e) been the subject of computation of the excessive loss or depreciation allowance. He continued in the notice, \"I, therefore, propose to reassess the said income less depreciation that has (a) escaped assessment; (b)..... etc.,\" and called upon the assessee to \"deliver to me not later than or within 35 days of the receipt of the notice a return in the attached form of your total income and total world income assessable for the assessment years 1948-49.\" He also indicated that the notice was issued after \"obtaining the necessary satisfaction\" of the Commissioner of Income-tax, Madras. It will be noticed that all the clauses (a) to (e) referred to above cover the several aspects dealt with in section 34 of the Act by reason of which the Income-tax Officer is enabled to take proceedings under the provision for reassessing the income and the tax. In the present case, however, the contention of the department was that since the assessee is a non-resident having income outside the taxable territories also, he is liable to be taxed at the maximum rate or at a rate dependent upon his total world income under section 17 of the Act. If the assessee fails to furnish his total world income to enable the tax to be levied on the basis of a rate dependent upon such total world income, the Income-tax Officer is authorised to levy the tax at the maximum rate as provided by section 17 of the Indian Income-tax Act. Since the assessees had failed to disclose their status as non-residents, but had in their original returns indicated that they were residents of Panruti and failed also to furnish particulars of their incomes derived outside the taxable territories the tax had been levied at a rate relevant to the income disclosed in those returns, income that accrued or arose within the taxable territories only. Obviously, the rate was too low a rate within the meaning of section 34 of the Act and it was on this basis that the proceedings were launched by the Income-tax Officer. Mr. for the assessee contends that the Income-tax Officer was bound to disclose in the notice issued by him the particular reason for the reopening of the assessments and whether the case requiring action fell with one or the other of the heads referred to. In the notice, however, beyond indicating that it was a notice under section 34 of the Indian Income-tax Act, nothing express was stated which would inform the assessees of the case that he had to meet. It is contended that section 34 requires that that should be done, and if that is not done, the notice is not a proper notice and the \u00e8proceedings stand wholly invalidated. ", "A perusal of the section, however, does not support this contention. The relevant requirements in so far as they are material to the present case are that the Income-tax Officer should have reason to believe that by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year, the income, profits or gains chargeable to income-tax had escaped assessment for that year, or been under-assessed, or been assessed at too low a rate. If he has such reason, he is required to serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 . It is clear, therefore, that when the Income-tax Officer honestly believes that the income, profits or gains have been assessed at too low a rate by reason of the failure of the assessee to disclose all material facts necessary for his assessment, the only notice that he is called upon to issue to the assessee is a notice of the description referred to in section 22 , sub-section (2). It does not even appear from the section that the Income-tax Officer should expressly state it to be a notice under section 34 of the Act. If it is a case where the assessee had already been assessed for a particular year, a subsequent notice issued calling upon him to comply with the requirements of section 22 , sub-section (2), would clearly indicate to the assessee that it was a case of reopening of the assessment. Even otherwise, if the assessee had not submitted his return and the assessment year had elapsed, even a notice issued for the first time by the Income-tax Officer under section 22(2) is one which comes within the scope of section 34 , for it would be a case where there had been a failure of the assessee to make a return of his income, and the income, profits or gains chargeable to income-tax had escaped assessment for that year. What all the section, therefore, requires is that the notice should indicate that it is a proceeding under section 34 of the Act, which to the knowledge of the assessee it would be, had there been an earlier assessment for that assessment year. It may also be specifically noticed that the requirements of a notice purporting to be the precursor of the reopening of the assessment is not in any way different from the requirements of a notice required to be issued under section 22(2) of the Act. In this provision, the notices which the Income-tax Officer is called upon to issue is to demand \"a return, in the prescribed form and verified in the prescribed manner, setting forth (along with such other particulars as may be provided in the notice), his total income and total world income during the previous year.\" It follows, therefore, that a notice leading to the reopening of the assessment under section 34 is not any special kind of notice which requires any information to be furnished to the assessee as to the reasons for reopening. It may also be noticed that neither the Act nor the Rules provide for any special form of notice under section 34 . That is as it should be, \u00e8because, the section itself indicates the kind of notice that has to be issued to the assessee and that, as we have seen, is nothing more than a notice conformably to the requirements of section 22 , sub-section (2). ", "We are not satisfied also that beyond the fact that the Income-tax Officer purports to exercise his jurisdiction under section 34 of the Act and to reopen the assessment, it is necessary for the Income-tax Officer to inform the assessee of the particular reasons leading to the reopening of the assessment. It would suffice in our opinion if the notice merely stated that the Income-tax Officer believed that the case of the assessee required reopening of the assessment under section 34 of the Act and to indicate that he had complied with the requirements of the provision by obtaining the prior approval of the Commissioner of Income-tax and in terms of the section called upon the assessee to submit a return containing such particulars as section 22 , sub-section (2) requires. The conditions for reopening of the assessment are not the same as the contents of the notice to be issued to the assessee. The conditions requisite are merely that the Income-tax Officer should have reason to believe that one or the other of the grounds necessitating the revision of the assessment existed in the case. Which precise grounds operated on his mind and what reasons impelled him to come to that conclusion are not required to be intimated to the assessee. The reason is obvious. It may be that when the Income-tax Officer commences the proceedings under section 34 , he might have had reason to believe that a particular item of income had escaped to be included in the assessable income of the assessee. But having started the proceeding under section 34 , the Income-tax Officer is not, under the terms of the section, as it stands, confined only to that particular item. It may transpire in the course of the proceedings that excessive relief had been given to the assessee and it would be open to the Income-tax Officer to deal with that aspect of the matter also. The intendment behind the section is that the whole of the assessment is thrown open and even if the Income-tax Officers notice contained only one particular head for reopening the assessment, he is not incompetent to deal with cases of under-assessment or the like which may be disclosed as a result of such reopening. ", "Mr. referred to . We are unable to gather anything from this decision which supports the contention at present raised with regard to the requirements of the notice. That was a case where the Income-tax Officer issued a notice under section 34 of the Act (as it stood then) for the purpose of raising the rate of tax on the grounds that the rate originally fixed was too low. The assessees demanded that the Income-tax Officer should reassess his income, that is to say, determine afresh the correct taxable income of the assessee. The argument was that the Income-tax Officer was bound to begin proceedings again as regards assessment and proceed as if there was an enquiry in respect not only of the portion which had \u00e8escaped assessment but of all other items also. That contention was repelled. But it may be noticed that even apart from not answering the particular contention now advanced, this decision related to the interpretation of section 34 as it stood prior to the amendment in 1939, when the section was far differently worded. ", " a similar question arose. The learned judges observe : ", "\"The scheme of section 34 of the Act is that if the conditions of the main section are satisfied, a notice has to be issued to the assessee containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 . But before issuing the notice, the proviso requires that the officer should record his reasons for initiating action under section 34 and obtain the sanction of the Commissioner who must be satisfied that the action under section 34 was justified. There is no requirement in any of the provisions of the Act or any section laying down as a condition for initiation of the proceedings that the reasons which induced the Commissioner to accord sanction to proceed under section 34 must also be communicated to the assessee...... It is not intended by the proviso that the reasons should be communicated to the assessee.\" ", "The learned judges also observed that it was unnecessary for the notice to state whether the Income-tax Officer was limiting the assessment for the period of eight years or four years, that is to say, whether it was a case which the Income-tax Officer thought came within the scope of 34(1)(a) or 34(1)(b). ", " Court pointed out that section 34 is only a section authorising the issue of a notice, that is, a notice under section 22(2) , and that it is not necessary or imperative that a notice under section 34 should specify under which of the two clauses of the section, viz., clause (a) or clause (b), the notice was issued. The learned judges observed that \"all that the section itself says is that the Income-tax Officer may serve on the assessee..... a notice under sub-section (2) of section 22 . The main notice to be issued is, therefore, a notice under section 22(2) of the Act and section 34 only authorises the issue of such a notice, in spite of there having been a previous assessment or inspite of the time for the issue of a notice in the normal way having expired. It is true that when answering a notice issued under the section, the assessee may take a plea of limitation, and for purposes of such a plea, it may be necessary for him to know whether his case is being treated as one under clause (a) or as one under clause (b). It appears to me, however, that whether the case is treated as coming under one clause or the other, will transpire in the course of the assessment proceedings, and it is neither required of the Income-tax Officer not is it necessary, that he should specify the clause in the notice itself. Even when a clause is specified, it is conceivably that when making the actual assessment, the Income-tax Officer may come to hold that it comes under the other clause........\" ", "It seems to us that these decisions completely answer the \u00e8above contention. ", "It has been mentioned earlier that in so far as is concerned, there had been certain earlier proceedings under section 34 in connection with the assessment years 1949-50 to 1951-52. It is argued that there cannot be a second proceeding under section 34 . The argument is put somewhat in this manner. Section 23 authorises the making of an order of assessment in the normal course. The power to make such an assessment exhausts itself when once it is exercised. So also, it is claimed, the power to reopen an assessment should be deemed to be exhausted when resort to that provision has been had once. We are really unable to appreciate this argument. Section 34 was intended to deal with cases of escapement of income tax, broadly speaking. It may happen that the Income-tax Officer comes to know that a particular item of income had escaped assessment and take steps to bring that income to tax by way of proceedings under section 34 . If the underlying intendment of the section is to deal with cases of escaped income, we fail to see why the Income-tax Officer should be prevented from having resort to that provision when on a subsequent occasion he becomes aware that another item of income had also escaped assessment. The section could be resorted to only within the period of limitation prescribed and it can be invoked in our opinion on any number of occasions which justifies resort to it. The only limit upon the exercise of that power is that the proceeding should be within the period of limitation prescribed. , the court had before it a case where section 34 had been invoked on a second occasion in the case of the same assessee. The point, however, was not decided therein whether the reopening of an assessment could be effected on more than one occasion. The question came to be considered specifically by a single judge of in . The learned judge observed that within the time limit specified in section 34 of the Indian Income-tax Act, there is no restriction as to the number of proceedings that can be taken to reopen the assessment by way of assessment or reassessment, computation or re-computation. We agree with this view of the learned judge. The same view was taken by in . The question was very shortly disposed of with the observatio : ", "\"A simple reading of the sub-section leaves no doubt that it places no limit to the number of notices that may be issued, so long as they are within the time limit specified in that section. There can be no restriction as to the number of proceedings that can be taken to reopen the assessment where it is found that any income of the assessee has for one reason or another escaped assessment.\" ", "Whatever arguments might be available to the assessee to claim that section 34 authorises only the reopening of an assessment and not the reopening of a reassessment stand obviated by the decision of in , where their Lordships held that the word \"assessment\" is capable of bearing only a comprehensive meaning and would include reassessment. It follows that solely for the reason that in respect of the two assessment years there had been a reassessment of the assessees income by proceedings under section 34 does not bar the exercise of the power under section 34 of the Act in reopening such a reassessment. ", "On a question of fact, we may point out that the assessee was fully aware of the reason for the reopening of the assessment in this case. In the assessment order for the assessment year 1948-49, the Income-tax Officer states that when the assessee submitted a return in response to the notice under section 34 , he correctly declared his degree of residence as non-resident. While in the earlier returns filed he had not completed that part of the prescribed form showing the degree of residence, but by giving his address as had left it to be inferred that he claimed to be a resident, in the subsequent return, he gave his degree of residence as non-resident. In the assessment order relating to 1947-48 also, the assessee filed a letter dated 15th November, 1956, in which he admitted that he was a permanent resident of Karaikal, that is to say, a non-resident, but at the same time questioned the validity of the proceedings as illegal and barred by limitation. There is no doubt, therefore, that the assessee was fully aware of the reasons that led to the reopening of the assessment. ", "We have next to consider whether the present case would fall within sub-clause (a) or (b) of section 34(1) . That would lead us to a consideration of the question whether the disclosure of the status of the assessee as a resident or non-resident is not a material fact necessary for his assessment. The law broadly stated imposes the liability to tax on the income of any assessee at a rate dependent on the total world income. In the particular case of a non-resident, who has income accruing or arising both within and without the taxable territories, the income arising without the taxable territories is brought to tax, but at a rate dependent upon his total world income. Leaving aside the question of the validity of section 17 of the Act, as the law stands, the fact whether a person is a resident or a non-resident is undoubtedly a material fact necessary for making a proper assessment upon him. The incidence of tax would vary and it is incumbent upon the assessee to make a disclosure of the particular fact, viz., that he is a resident or a non-resident. It is undoubtedly a material fact necessary for the assessment and it is indisputable that in the present case the assessee had failed to disclose this material fact in his return for the relevant assessment years. This is clearly a case that falls within the scope of section 34(1)(a) . It is argued by Mr. in this regard that there has been no failure on the part of the assessee to disclose this material fact and that at the best it can only be regarded that in consequence of information which the Income-tax Officer came to possess, the assessment had \u00e8been made at too low a rate. It is alleged that the assessees might have thought that they fell into all the categories of resident, non-resident or resident but not ordinarily resident. This argument is wholly untenable. The factum of residence is a fact which is exclusively within the knowledge of the assessee and so long as the law differentiates the manner in which persons possessing the character of resident or non-resident are assessed, the precise qualification with regard to the residence is a matter which has to be disclosed by the assessee. There has undoubtedly been a failure on the part of the assessee to disclose the material fact. We must repel the argument that the case is one which comes under sub-clause (b). ", "The result is that the second question is answered in the affirmative and against the assessee. ", "It is next contended that the provision in the Income-tax Act levying tax at the maximum rate on a non-resident is violative of article 14 of the Constitution. We need not embark upon a discussion of the case law upon the scope of article 14. Suffice it to say courts have uniformly held that discrimination cannot be lightly inferred and that a classification of the subject-matter for legislation is permissible under the Constitution so long as that classification is based upon some real an substantial distinction and has reasonable relation to the object of the legislation. Having thus broadly stated the proposition, it should necessary follow that the classification of persons for the purpose of levying tax on their incomes on the basis of their status as residents and non-residents it undoubtedly a real one. But what is contended is that for the purpose of levy of tax, such classification and the imposition of a differential levy has no relation to the object of the taxing enactment. It is urged also that the legislature is not competent to tax the other income, that is to say, income which does not arise or accrue within the taxable territories in the case of a non-resident, and that being so, it must equally follow that there can be no lawful authority for the levy of tax on a non-resident at a higher rate dependent upon the extra-territorial income. In so far as a non-resident as a person who earns income within the taxable territories is concerned, undoubtedly a sufficient territorial connection is established between the person sought to be taxed and the country seeking to tax him. That would be sufficient to validate the levy. But it must be emphasised that such territorial connection must be real and the liability sought to be imposed must have a reasonable relation to that connection. It is also undoubted that a taxing enactment is entitled to levy differential rates of tax on different classes of income and to impose also different rates of tax. In so far as income derived from the taxable territory is concerned, it is competent to the Indian legislature to fix the rate of tax upon such income on the basis of any reasonable classification. We are unable to see why the basis of residence is not a valid criterion to be adopted in such a case. If, therefore, the classification as a resident and \u00e8non-resident would be a proper classification for the purpose of levy of tax, it should equally be open to the legislature to vary the incidence of tax in so far as the two classes are concerned. In fact, the resident is liable to be taxed on his total world income, while a non-resident is liable to be taxed only on the territorial income but at a rate dependent on the total world income. We are not concerned with the question whether tax can be imposed on the non-resident in the same manner as the resident on the total world income. We are only dealing with the question whether a rate of tax dependent upon the classification of the assessee as resident or non-resident has a reasonable relation to the object of the legislation. We are unable to see any constitutional disability in this regard and we cannot agree that article 14 is in any way violated. The question is answered against the assessee. ", "The assessee will pay the costs of the department. Counsels fee Rs. 250. ", "Question answered against the assessee."], "relevant_candidates": ["0000269124", "0000381270", "0000937758", "0001298755", "0001316416", "0001652552", "0001758576"]} {"id": "0001864396", "text": ["JUDGMENT , J. ", "1. , a girl, aged 14 years student on 9th class, died in an accident which took place on 23.1.1997 as she was run over by a Punjab Roadways bus bearing registration No, PB-12-B- 8710. , Jalandhar vide its judgment dated 16.7.1999 awarded a total compensation of Rs. 50,000/- alongwith 12% interest in favour of the claimant. ", "2. Aggrieved against the award of , the present appeal has been filed. During the pendency of the appeal, the matter was referred to , which, vide order dated 9.12.2003 allowed a compensation of Rs. 1 lac over and above the amount awarded by the . As did not give any concurrence and acceptance to the award passed by , therefore, the claimant-appellant has filed the present application for disposing of the appeal on merits. Learned Counsel for the appellant has contended that the deceased was 14 years old at the time of the accident and in terms of the judgment in . 2005 A.C.J. 90, for a teenaged child of 13/14 years and a non-earning person, has assessed notional income of Rs. 15,000/- per annum and has adopted a multiplier of 15. On this basis, learned Counsel contends that the claimant is entitled to be awarded Rs. 15,000/- with a multiplier of 15 and thus, a total compensation of Rs.2,25,000/- be awarded in favour of the appellant. Learned Counsel for the , however, submits that as the interest rates have considerably been reduced by the nationalised banks, therefore, reduced rate of interest be awarded. ", "3. After going through case (supra), it is clear that as the deceased in the present case was only 14 years old, therefore, the earning of a non-earning person is assessed at Rs. 15,000/- per annum and a multiplier of 15 is adopted. Thus, the appellant is entitled to a total compensation of Rs. 2,25,000/- on account of death of , The appellant shall also be entitled to interest at the rate of 9% from the date of filing of the claim petition till realisation. ", "4. The appeal is allowed. The respondent State is directed to pay the enhanced compensation to the appellant within a period of 3 months from today."], "relevant_candidates": [""]} {"id": "0001873699", "text": ["PETITIONER: Vs. RESPONDENT: COMMISSIONER OF INCOME-TAX, BOMBAY. DATE OF JUDGMENT: 28/10/1954 BENCH: , MEHAR CHAND (CJ) BENCH: , MEHAR CHAND (CJ) DAS, , , , CITATION: 1955 AIR 740 1955 SCR (1) 876 CITATOR INFO : RF 1961 SC1019 (7) R 1963 SC1185 (9) R 1965 SC1836 (11) RF 1967 SC 81 (11) RF 1970 SC1578 (9) F 1976 SC1790 (14) F 1988 SC1708 (13) ACT: Indian Income-tax Act (XI of 1922), ss. 2(1) , 4(3)(viii) , 69 and rule 24-Agricultural Income, Meaning of-Growing and manufacturing tea company's dividend, Nature of- -Dividend how arises -Distinction between shareholder and partner--Difference between company and firm-Decided cases on English Tax Law, Use of. HEADNOTE: Agricultural income as defined in a. 2(1) of the Indian Income. tat Act, 1922, signifies income proximately derived from direct association with land by a person who actually tills the land or 877 gets it cultivated by others. Agricultural income does not mean income which can be ultimately or indirectly traced to have connection with agricultural operations. Even though a tea company growing and manufacturing top gets an exemption of 60 per cent. of the profits as agricultural income in accordance with rule 24 framed under s. 59 of the Act, it must be held that the dividend of such company is not derived by the shareholder owing to his direct connection with the land in which be% is grown and such dividend is not agricultural income within the meaning of s. 2(1) of the Act and hence is not exempted from income-tax under s. 4(3)(viii) of the Act. The dividend of a shareholder is the outcome of his right to participate in the profits of the company arising out of the contractual relation between the company and the shareholder and this right exists independently of any declaration of the dividend though until such declaration the enjoyment of the profits is postponed. The shareholder by purchase of the share does not acquire any interst in the assets 'of the company till after the company is wound up. The position of a shareholder of a company is altogether different from that of a partner of a firm. A company is a juristic entity distinct from the shareholders but the firm is a collective name or an alias for all the partners. Decisions based on the peculiarities of Income-tax law of England are hardly safe guides for determining the true meaning of the term \"agricultural income\" Under the Indian Income-tax Act , 1922. S.C.R. 869) followed. Commissioners of Inland Revenue v. (1924) 8 T.C. 704, 's . 1 Ch. 279, 16 I.T.R. 325, of lncome-tax, Bombay City 16 I.T.R. 380 and 3 I.T.R. 237 referred to. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 104 of 1953. Appeal from the Judgment and Order dated the 28th day of March, 1952, of at Bombay in Income-tax Reference No. 39 of 1951 arising out of the Order dated the 23rd day of April, 1951, of in Income-tax Appeal No. 5228 of 1950-51. ", "112 ", "878 ", ", (, and , with him) for the appellant. ", ", Attorney-General. for India, (, with him) for the respondent. ", "1954. October 28. The Judgment of the Court was delivered by appeal raises an interesting point of law under the Indian Income-tax Act . ", "The question referred by the to at Bombay was stated thus: ", "\" Whether 60% of the dividend amounting to Rs. 2,750- received by the assessee from the two Tea companies is agricultural income and as such exempt under section 4(3) ", "(viii) of the Act.\" ", " and , who heard the reference, answered the question in the negative by two separate but concurring judgments dated March 28, 1952. The facts lie within a narrow compass. The appellant, Mrs. , was, in the accounting year 1949-50, a shareholder in two Tea:companies, , and , and received from the aforesaid companies dividends aggregating to Rs. 2,750. The two companies carried on business of growing and manu- facturing tea. By rule 21 of the Indian Income-tax Rules, 1922, made in exercise of the powers conferred by section 59 of the Indian Income-tax Act, it is provided that \"income derived from the sale of tea grown and manufactured by the seller in the taxable territories shall be computed as if it were income derived from business and 40% of such income shall be deemed to be income, profits and gains, liable to tax.\" It is common ground that 40% of the income of the Tea companies was taxed as income from the manufacture and sale of tea and 60% of such income was exempt from tax as agricultural income. According to the appellant, the dividend income received by her in respect of the shares held by her in the said Tea companies is to the extent of 60% agricultural income in her hands and therefore pro tanto exempt from tax while the contends that dividend income is not agricultural income and therefore the whole of the income is liable to tax. The Income-tax Officer and on appeal, the Appellate Assistant Commissioner both concurred in holding the whole of the said income to be liable to tax. confirmed the view that the dividend income could not be treated as agricultural income in the hands of the shareholder and decided in favour of the , but' agreed that its order gave rise to a question of law and formulated the same as set out above and referred it to . upheld the order of the but granted leave to appeal to this Court. ", "The question, we comprehend, is capable of an easy solution and can best be answered by reference to the material provisions of the Income-tax Act . Under section 2(1) 'agricultural income' means: ", "(a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land- revenue in the taxable territories or subject to a, local rate assessed and collected by officers of the Government as such; ", "(b) ", "(i).............. ", "(ii)................................. ", "(iii)................................. ", "(c)....................................\" Sub-section (15) of section 2 defines \" total income\" as total amount of income, profits and gains, referred to in sub-section (1) of section 4 computed in the manner laid down in this Act, Section 3 authorises income-tax to be charged upon a person in respect of the total income of the previous year. Section 4 lays down that the total income of any previous year of any person to be charged must include all income, profits and gains, from whatever source derived and defines the scope of its application for purposes of tax. Sub-section (3) of the same section - enacts certain exemptions upon the chargeability of -the income and clause ", "(iii) includes agricultural income in the category of exemptions. Section 6 mentions the various heads of income, profits and gains, chargeable. to income,-tax including in that category clause (v) 'income from other sources.' It is common ground that dividend falls under this category. ", "In order, however, that dividend may be held to be Agricultural income it will be incumbent upon the appellant to show that, within the terms of the definition, it is rent or revenue derived from land which is used for agricultural 'purposes. Mr. , for the appellant, contends that it is revenue derived from land because 60% of the profits of the company out of which dividends are payable are referable to the pursuit of agricultural operations on the part of the company. It is true that the agricultural process renders 60% of the profits exempt from tax in the hands of the company from land which is used for agricultural purposes but can it be said that when such company decides to distribute its profits to the shareholders and declares the dividends to be allocated to them , such dividends in the hands of the shareholders also partake of the character of revenue derived from land which is -used for agricultural purposes ? Such a position - if accepted would extend the scope of the vital words I revenue derived from land' beyond its legitimate limits. Agricultural income as defined in the Act is obviously intended to refer to the revenue received by direct association with the land which is used for agricultural purposes and not by indirectly extending it to cases where that revenue or part thereof changes hands either by way of distribution of dividends or otherwise. In fact and truth dividend is derived from the investment made in the shares of the company and the foundation of it rests on the contractual relations between the company and the shareholder. Dividend is not derived by a shareholder by his direct relationship with the land. There can be no doubt that the I initial source which has produced the revenue is land used for agricultural purposes but to give to the words 'revenue derived from land the unrestricted meaning, apart from its direct association or relation with the land, would be quite unwarranted. For example, the proposition that a creditor advancing money on interest to an agriculturist and receiving interest out of the produce of the lands in the hands of the agriculturist can claim exemption of tax upon the ground that it is agricultural income within the meaning of section 4 , sub-section (3) (viii), is hardly statable. The policy of the Act as gathered from the various sub-clauses of section 2(1) appears to be to exempt agricultural income from the purview of Income tax Act. The object appears to be not to subject to tax either the actual tiller of the soil or any other person getting land cultivated by others for deriving benefit therefrom, but to say that the benefit intended to be conferred upon this class of persons should extend to those into whosoever hands that revenue falls, however remote the receiver of such revenue may be, is hardly warranted. ", "It was argued by Mr. on the strength of an observation made by Lord in v. Forrest(1), that an investor buys in the first place a share of the assets of the industrial concern proportionate to the number of shares he has purchased and also buys the right to participate in any profits which the company may make in the future. That a shareholder acquires a right to participate in the profits of the company may be readily conceded but it is not possible to accept the contention that the shareholder acquires any interest in the assets of the company. The use of the word 'assets' in the passage quoted above cannot be exploited to warrant the inference that a shareholder, on investing money in the purchase of shares, becomes entitled to the assets of the company and has any share in the property of the company. A shareholder has got no interest in the property of the company though he has undoubtedly a right to participate in the profits if and when the company decides to divide them. The interest of a shareholder vis-a-vis the company was explained in the case of v. ). That judgment negatives the position taken up on behalf of the appellant that a shareholder has got a right in the property of the company. It is true that the shareholders of the company have (1) (1924) 8 T.C. 704,710., (2) [1950] S.C.R. 869, 904. ", "882 ", "the, sole determining voice in administering the affairs of the company and are entitled, as provided by the Articles of Association to declare that dividends should be distributed out of the profits of the company to the shareholders but the interest of the shareholder either individually or collectively does not amount to more than a right to participate in the profits of the company. The company is a juristic person and is distinct from the shareholders. It is the company which owns the property and not the shareholders. The dividend is a share of the profits declared by the company as liable to be distributed among the shareholders. Reliance is placed on behalf of the appellant on a passage in Companies Act , 12th Ed., page 894, where the etymological meaning of dividend is given as dividendum, the total divisible sum but in its ordinary sense it means the sum paid and received as the quotient forming the share of the divisible sum payable to the recipient. This statement does not justify the contention that shareholders are owners of a divisible sum or that they are owners of the property of the company. The proper approach to the solution of the question is to concentrate on the plain words of the definition of agricultural income which connects in no uncertain language revenue with the land from which it directly springs and a stray observation in a case which has no bearing upon the present question does not advance the solution of the question. There is nothing in the Indian law to warrant the assumption that a shareholder who buys shares buys any interest in the property of the company which is a juristic person entirely distinct from the shareholders. The true position of a shareholder is that on buying shares an investor becomes entitled to participate in the profits of the company in which he holds the shares if and when the company declares, subject to the Articles of Association, that the profits or any portion thereof should be distributed by way of dividends among the shareholders. He has undoubtedly a further right to participate in the assets of the company which would be left over after winding up, but not in the assets as a whole as Lord puts it. ", "883 ", " expressed the view that until a dividend is declared there is no -right in a shareholder to participate in the profits and according to them the declaration of dividend by the company is the effective source of the dividend which is subject to tax. This statement of the law we are unable to accept. Indeed the learned Attorney- General conceded that he was not prepared to subscribe to that proposition. The' declaration of -dividend is certainly not the source of the profit. The right to participation in the profits exists independently of any declaration by the company with the only difference that the enjoyment of profits is postponed until dividends are declared. ", "It was argued that the position of shareholders in a company is analogous to that of partners inter se. - This analogy is wholly inaccurate. Partnership is -merely an association of persons for carrying on the business of partnership and in law the firm name is a compendious method of describing the partners. Such is, however, not the case of a company which stands as a separate juristic entity distinct from the shareholders. In , Volume 6 (3rd Ed.), page 234, the law regarding the attributes of shares is thus stated : ", "\" A share is a right to a specified amount of the share capital of a company carrying with it certain rights and liabilities while the company is a going concern and in its winding up. The shares or other interest of any member in a company are personal estate transferable in the manner provided by its articles, and are not of the, nature of real estate. \" ", "In Borland's Trustee v. ), held that \"a share in a company cannot properly be likened to a sum of money settled upon and subject to executory limitations to arise in the future ; it is rather to be regarded as the interest of the shareholder in the company, measured, for the purposes of liability and dividend, by a sum of money ...............................\" It was suggested that the dividend arises out of the profits accruing from land and is impressed with the same character as the profits (1) L.R. [1901] 1 Ch. 279. ", "884 ", "and that it does not change its character merely because of the incident that it reaches the hands of the shareholder. This argument runs counter to. the definition of agricultural income which emphasizes the necessity of the recipient of income having a direct and an immediate rather than an indirect and remote relation with land. To accept this argument will be tantamount to saying that the creditor recovering interest on money debt due from the agriculturist who pays out of the produce of the land is equally entitled to the exemption. In fairness to Mr. it must, however, be stated that the contention was not so broadly put but there is no reason why one should stop at a particular stage and not pursue the analogy to its logical limits. ", "English decisions resting upon the peculiarities of the English Income-tax law can hardly be a safe guide ,in determining upon the language of the Indian Income-tax Act the true meaning of the words 'agricultural income.' A few cases of decided with reference to the provisions of the Indian Income-tax Act , however, deserve notice. The first case, - (1), dealt with the question whether interest on arrears of rent payable in respect of land used for agricultural purposes is agricultural income and therefore exempt from income-tax. It was held that it was neither rent nor revenue derived from land within the meaning of section 2(1) of the Income-tax Act. Lord who delivered the judgment of used the following piquant language in coming to that conclusion : \"The word derived' is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of (1) 16 I.T.R. 325. ", "885 ", "non-payment. And rent is not land within the meaning of the definition. \" ", "The second case, viz., (1), dealt, with the nature of the commission of a managing agent of the company a part of whose income was agricultural income. The assessee claimed exemption from tax on the ground that his remuneration at 10 per cent. of the profits was calculated with reference to the income of the company part of which was agricultural income. It was held that the assessee received no agricultural income as defined by the Act but that he received a remuneration under a contract for personal service calculated on the amount of profits earned by the employer, payable not in specie out of any item of such profits, but out of any moneys of the employer avail- Able for the purpose, and that the remuneration therefore was not agricultural income and was not exempt from tax. Sir in the above case observed : ", "\" In their Lordships' view the principle to be derived from a consideration of the terms of the Income-tax Act and the authorities referred to is that where an assessee receives income, not itself of a character to fall within the definition of agricultural income contained in the, Act, such income does not assume the character of agricultural income by reason of the source from which it is derived, or the method by which it is calculated. \" ", "In the third case, viz., v. Commissioner of Income-tax, Bihar and Orissa(1), an annual payment for life to the assessee was not held to be agricultural income and therefore not exempt from tax where the annuity arose out of a transfer made by the assessee of a portion of his estate for discharging his debts and for obtaining an adequate income for his life it being held that it was not rent or revenue derived from land --but. money paid under a contract imposing personal liability on the covenantor the discharge of which was secured by a charge on (1) [1948] 16 I.T.R. 380. ", "(2) [1935] 3 I.T.R. 237. ", "886 ", "land. But reliance was placed uponanother judgment of in the same volume at page 305 'in (1). That was a case of a usufructuary mortgagee the profits received by whom were exempt from income-tax on the ground that they were agricultural income in his hands. Lord , after referring to certain sections of the Act, observed that \"the result of those sections is to exclude agricultural income altogether from the scope of the Act howsoever or by whomsoever it may be received.\" These observations must be held to be confined to the facts of that particular case which was a case of usufructuary mortgagee who had received profits directly from the land. The obvious implication of the words used by Lord was that whosoever receives profit from the land directly is entitled to the exemption. Reference was also made to some English decisions but they have no bearing upon the present case as they were founded on the English Income-tax law and the provisions of the particular statute. ", "The learned Attorney-General also contended that the conclusion that dividend is not agricultural income also follows from the provisions of section 16 , subsection (2) and the proviso to the Act. According to him, this section compels the assessee to show in his return the whole dividend including the portion which is excluded on the ground of agricultural income. We do not consider it necessary to express any opinion upon this contention as our conclusion reached as a result of the foregoing discussion is sufficient to dispose of the appeal. We accordingly dismiss the appeal with costs. ", "Appeal dismissed. ", "(1) [1935] 3 I.T.R. 305. ", "887"], "relevant_candidates": ["0000004354", "0000050708", "0000301789", "0000815634", "0001011716", "0001182818"]} {"id": "0001909159", "text": [", J. ", "1. Take the question of estoppel first. ", "2. It does not arise at all. A former abuse of trust cannot be pleaded against a trustee who seeks to prevent a repetition of that abuse, even if he were formerly implicated in the same indefensible course against which he is seeking to protect the trust property: v. (1871) 14 Mad. I. A. 289 : 17 W. R. 41, 44. and v. (1897) 1 C. W. N. 493. ", "3. What do yon say as to the case of v. (1842) 3 Q. B. D. 760, 766 : 61 R. R. 397. In that case the mortgagors were empowered to raise money on mortgage, while here the palms cannot be alienated. ", "4. There was no issue on estoppel; that question has been raised here for the first time. ", "5. Here the transfer is void under Statute, i.e., Scripture of Hindu Law. For the principle against estoppel, see Bigelow p. 514, Ch. 17, Section 1. ", "6. Next, as regards the second contention of the appellant, I submit that the custom of transferring a pala or selling the office of a shebait: even to a person of the same caste or sect can never be reasonable and valid: see (1882) I. L. R. 6 Mad. 76., v. (1867) 7 W. R. 266. and (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76. ", "7. To validate such a custom would tend to public mischief in inducing needy incumbents of hereditary religions offices who desire to sell them to give a dishonest recognition to qualifications, which in fact were not the qualifications demanded by the nature of the office. I submit that no custom can validate an act which is clearly against public policy. The offerings made by Hindus to a public shrine constitute a public trust, in which the trustee can never have any beneficiary interest, and any appropriation by them of the same would be a clear breach of trust; no custom recognising such appropriation can alter the character of such a transaction, or validate the same. ", "8. (1907) I. L. R. 35 Calc. 226, 229., which lays down the rule that shebaits cannot bequeath their office by will to non-shebaits. See also v. (1874) 14 B. L. R. 166. Even if the owners of private temples may alter the character of the trust to a certain extent by family arrangement, still the trustees of the Kalighat temple can never do so, because, as both the Courts below have found, it is a public temple. ", " ", "9. Then you have been abusing your trust, and you now want the \" to put you in a position to continue doing so. ", "10. Further, the alleged custom of transferability of palas does not bear the requisite characteristics of a valid legal custom. For it is not certain, reasonable, immemorial, legal or moral. The earliest instance of transfer of a pala goes back only to 4th October 1819 or about 90 years before the institution of this suit; not even to the beginning of the establishment of regular in British India, while the foundation of this is lost in the oblivion of mythical ages. ", "11. The transfer of palas is an abuse of trust, and by implication, mis-appropriation: (1867) 7 W. R. 266. For the personal debt of a shebait, trust property cannot be sold; of. the position of the manager of an infant heir. ", " ", "12. There is great danger in developing superficial analogies. ", "13. If this custom be upheld, extravagance among shebaits will be encouraged. Public policy must be vindicated, whether the plaintiff lose her money or not. ", " ", "14. But yon have not got beyond extravagance, encouraged by any possible decision of ours. ", "15. Misappropriation does not alter the character of the trust. Even a mourasi mokurari lease of landed property granted to a co-shebait has been held to be void. Regarding the case, is pala or turn of worship the same as charao?. No custom was pleaded there; (1896) I. L. R. 23 Calc. 645. ", " ", "16. The contention of the other side is not that the Kalighat temple palas are transferable, as a matter of right under Hindu Law, but that they are so by custom. ", "17. Even if such a custom is proved, it is bad in law: see v. (1897) 1 C. W. N. 493. ", "18. Instances of continued abuse of trust for 90 years will not make the custom valid. ", "19. v. (1882) I. L. R. 6 Mad. 76; custom was not pleaded there. See also Hindu Law, p. 486, 491. ", "20. The custom found by the District Judge to be in existence relates to private and not public endowments: (1877) I. L. R. 2 Calc. 365. See also on Hindu Law, p. 453. A turn of worship, cannot be called a shape. ['s Hindu Law paras, 437, 438.] ", "21. As to a foreclosure decree, I submit that a pala or turn of worship has been held in all the reported cases to be moveable property. As a foreclosure decree can only he made with respect to mortgages of immoveable property, the provisions of the Transfer of Property Act which refer to foreclosure of mortgages of immoveable property only, and Order 34 of the Civil Procedure Code of 1908 (applying also to mortgages of immoveable property) are inapplicable to mortgages of palas. There is no provision of Indian Law for granting a decree for foreclosure in the case of pledge, or mortgage of moveables. ", "22. , in reply. It has been urged, that we cannot have a foreclosure decree because a pala is not immoveable property. See Fisher on Mortgage, 6th Edition, Article 985 , p. 505. A pledge presupposes delivery of possession. (Contract Act , Sections 172 . 148.) ", "23. For the difference between a pledge and a mortgage, I refer to pages 107 and 320 of Ghose's Mortgage. A pledgee can realise his money by sale of the pawn: v. (1). Regarding foreclosure of a mortgage of moveables, see , 7th edition. Ch. 49, para I, p. 1019. ", "24. [. See Halsbury's Laws of England, Vol. I, p. 123. Section 58 of the Transfer of Property Act refers to mortgages of immoveable property.] ", "28. An regards, the second question, it has riot been disputed on behalf of the mortgagee that in the absence of a custom or usage to the contrary or any term to that effect in the deed of endowment, a religions trust or the right of management of a religious or charitable endowment or a religious office attached to a temple or any other endowment cannot be alienated by the holder: (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76., (1882) I. L. R. 5 Mad. 89., v. Nila Kandan (1884) I. L. R. 7 Mad. 337., v. (1902) I. L. R. 26 Mad. 31., v. (1899) I. L. R. 23 Mad. 271; L. R. 27 I. A. 69., v. (1896) I. L. R. 24 Calc. 83., (1891) I. L. R. 15 Mad. 183., v. (1892) I. L. R. 15 Mad. 389., (1894) I. L. R. 19 Mad. 211., (1907) I. L. R. 34 Calc. 828; I. L. R. 35 Calc. 226., v. (1881) I. L. R. 4 All. 81., Rup Narain v. (1878) 3 C. L. R. 112., v. (1897) 1 C. W. N. 493., (1892) I. L. R. 16 Mad. 146., v. (1898) I. L. R. 23 Bom. 131., v. (1865) 3 W. R. 152., v. (1867) 7 W. R. 266., v. (1871) 6 B. L. R. 727; 15 W. R. 339, v. (1870) 5 B. L. R. 617., (1903) I. L. R. 27 Mad. 192., v. (1895) I. L. R. 20. Bom. 495., (1882) I. L. R. 6 Mad. 76. There is also authority for the proposition that alienation of a religious office may be validly made in favour of a person standing in the line of succession and not disqualified by personal unfitness, v. (1869) 6 Bom. H. C. R. 250., v. (1882) I. L. R. 6 Bom. 298., , (1900) I. L. R. 36 Calc. 975., v. (1909) I. L. R. 36 Calc. 375. But the appellant does not invite us to go even as far as this proposition. She asks us to assume that a pala or turn of worship is not alienable, except by custom, and contends' that the custom which has been proved in this case should be recognised by the : (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76., Gnanasamandha v. (1899) I. L. R. 23 Mad. 271 : L. R. 27 I. A. 69. This raises the question, whether the custom possesses the characteristics deemed essential for the validity of a custom. These essential attributes were specified by , in v. (1838) 9 Ad. & E1. 406., in these terms; \"A, custom, to be valid mast have four essential attributes: first, it mast be immemorial; secondly, it must be reasonable; thirdly, it mast have continued without interruption since its immemorial origin; and fourthly, it must be certain in respect of its nature generally, as well as in respect of the locality where it is alleged to obtain and the persons whom it is alleged to affect.\" See also v. (1876) L. R. 3 I. A. 259., (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76., (1882) I. L. R. 9 Calc. 698., v. (1893) I. L. R. 21 Calc. 149. In the case before us, the custom obviously satisfies the first, third and fourth requirements. The time when the custom originated is unknown; all that has been ascertained is that, as far as the evidence can be carried back, it has \"been in existence. This takes the case out of the rule formulated by , in Mayor of London v. (1867) L. R. 2. H. L. 239, 258. that \"a custom originating within time of memory, even though existing in fact, is void at law.\" There is no force in the contention that the proof of the existence of the custom should have been carried back by direct evidence to 1793 when the first Regulations were passed by , if not to the year 1773, when was established. It is well settled, that evidence showing exercise of a right in accordance with an alleged custom as far back as living testimony can go, raises the presumption, though only a rebuttable presumption, as to the immemorial existence of the custom. As , C.J., said in v. (1837) 2 Moo. & R. 129, 136., yon cannot reasonably expect to have it proved that the custom did in fact exist before time of legal memory; but you are to require proof, as far back as living memory goes, of a continuous, peaceable and uninterrupted use of the custom. To the same effect is the observation of , J., in v. 2 Ch. 534, 550. (1): \"not only ought the to be slow to draw an inference of fact which would defeat a right that has been exercised during so long a period as the present, unless such inference is irresistible, but it ought to presume everything possible to presume in favour of such a right.\" It is interesting to note that in his Mitakshara enunciated a similar rule (, Book 11, 27). On the authority of a text of , he holds that \"time within the memory of man extends as far as a hundred years\", as a man has, according to , a hundred years' duration of life. (Mitakshara, trans., Gharpure, p. 50). , in his commentary on the same text of , treats a period beyond three generations (that is one hundred and five years) as time immemorial, and, refers to an earlier text to show that a period beyond sixty years might be treated as time beyond human memory. In any event, it is well settled that if the existence of the custom has been proved for a long period, the onus lies on the person seeking to disprove the custom, to demonstrate its impossibility; in this case, the mortgagors have entirely failed to meet the evidence of the custom adduced by the plaintiff. There is also no room for serious controversy as regards the certainty and continuity of the custom. The only question, consequently, for consideration is, whether it is reasonable as the appellant contends or unreasonable and opposed to public policy us the respondent asserts. It is indisputable that if a custom be against reason, it has no force in law; but as explained in Co. Litt., 62a, the reason here referred to is not to be understood as meaning every unlearned man's reason, but artificial and legal reason warranted by authority of law; or, as Blacks tone puts it, (Commentaries, Vol. I, p. 77) it is sufficient if ho good legal reason can be assigned against it. When, however, it is said that a custom is void, because it is unreasonable, nothing more is meant than that the unreasonable character of the alleged custom conclusively proves that the usage, even though it may have existed from time immemorial, must have resulted from accident or indulgence and not from any right conferred in ancient times. v. (1861) 9 H. L. C. 691, 700, 701. It is also well settled that the period for ascertaining, whether a particular custom is reasonable or not, is the time of its possible inception; this is in accord with the observation in the Tanistry Case (1608) 29, 32.: \"the commencement of a custom (for every custom hath a commencement, although the memory of man doth not extend to it, as the river Nile hath a spring although geographers cannot Audit) ought to be upon reasonable ground and cause, for if it was unreasonable in the original, no usage or continuance can make it good: Quod ab initio non valuit tractu temporis non convalescet.\" When tested in the light of these principles, no good ground can be assigned why the custom should be condemned as unreasonable. There is no force in the contention of: the respondents that because the custom contravenes the rule that a religious office is inalienable, it must be pronounced to be against public policy; if this argument were to prevail, all customs would be unreasonable. Since customs in general involve some inconsistency with the general common law of the realm or are contrary to a particular maxim, the fact of this inconsistency is not of itself a ground for holding the custom unreasonable and bad: v. (1838) 9 A. & E. 406, 422. Thus in the Tanistry Case (1608) 29, 33., it is said that \"several customs which had been adjudged void in our books as being unreasonable against common right or purely against law, if their nature and quality be considered, will be found injurious to the multitude and prejudicial to the Commonwealth. To the same effect is Co. Litt. 113a; \"Consuetudo ex certa causa rationabili usitata privat communem begem.\" Is there then anything to show that the custom is injurious to the endowment or to the Commonwealth? One of the mortgagors has a turn of worship or pala; he is entitled in this character to collect the offerings made to the goddess on the day on which his turn falls; he applies a portion of the income for the worship of the goddess and appropriates the remainder for his personal use. It is not material to consider whether he should not apply the whole of the income for religious and charitable purposes; but let us assume that he and every shebait like him who has a pala may be compelled to do so. He transfers his turn of worship to a person who, in certain contingencies, might in his own right, have been a shebait and might, have held a pala. The transferee, as holder of the pala, is under precisely the same obligation to the endowment as the transferor himself. It is difficult to appreciate how a custom which recognises and validates a transfer to members of a limited circle under these circumstances can be detrimental to the endowment or to the public. There is no question that a pala of the Kalighat temple is heritable, and it is immaterial whether the heir is a male or female; the custom in this respect is established' beyond doubt: (1877) I. L. R. 2 Calc. 365, 372. There is also no question that though probably religious offices were originally indivisible, they are now deemed partible: v. (1895) I. L. R. 20 Bam. 495., v. (1874) 14 B. L. R. 166; 22 W. R. 437., Elder Widow v. Younger Widow (1807) 1 Mac. Sel. Rep. 180, (1909) I. L. R. 34 Mad. 470., v. (1892) I. L. R. 17 Bam. 271., (1900)11 Mad. L. J. 215, 222., (1888) I. L. R. 13 Bam. 548., (1897) I. L. R. 19 All. 428., (1907) I. L. R. 34 Calc. 828., v. (1867) 8 W. R. 193., . v. (1872) 19 W. R. 28., v. (1878) I. L. R. 3 Calc. 390., Eshan v. (1878) I. L. R. 4 Calc. 683., v. (1882) I. L. R. 8 Calc. 807. Indeed, the very name pala or turn of worship shows that the right is partible. This involves, by necessary implication, the attribute of transferability as amongst the members of the family of shebaits; partition signifies the surrender of a portion of joint right in exchange for a similar right from the co-owner. There is further no question that a pala has not only been deemed heritable and partible; it has also been treated as devisable, as is illustrated by the case of the 'Mister of the first defendant, who obtained a, pala under the testamentary devise of her father. This, again, involves the recognition of the transferable character of a pala; the exercise of thy right to make a bequest implies an assertion of the right to make a transfer inter vivos. It follows, consequently, that the customary right to make a sale, mortgage, gift or lease of a, pala in favour of persons within a limited circle is closely associated with and possibly developed out of the heritable, devisable, and partible character of a pala. A custom of this description clearly cannot be characterised on any rational ground as unreasonable or opposed to public policy, it is further worthy of note that this is not a novel view of the true character of such a custom; for, as early as 8th August 1810, the validity of a conditional mortgage of a pala effected on the 18th February, 1835, was upheld in a contested litigation. Since every custom sanctioned by the s must be reasonable, it follows that every case where a custom has been upheld by the s is an example of a reasonable custom. When the evidence is examined from this point of view, the case for the mortgagee is materially strengthened; for, as is clear from the record, not only the existence but also the validity of the custom has been repeatedly recognised by the s during at least 70 years prior to the institution of this suit, while no single instance has been found where its reasonableness has been successfully assailed. The diatom of transferability of a pala in favour of a limited circle of transferees must accordingly be held valid, and no good reason has been assigned why it should be deemed unreasonable or opposed to public policy. ", "29. As regards the third question, it has been argued on behalf of the mortgagors respondents that as Order 34 of the Civil Procedure Code of 1908 applies only to mortgages of immoveable property, the plaintiff is not entitled to a decree for foreclosure; and in this connection, reference has been made to v. (1878) I. L. R. 4 Calc. 683., and (1911) I. L. R. 39 Calc. 227., to show that a pala or turn of worship is not immoveable property. There is no substance in this contention. It is well settled that foreclosure is a remedy of the mortgagee which is not confined to mortgages of land; it is equally applicable to mortgages of chattels, as decided by in v. (1726) 1 Comyn. 393; 2 Eq. Cas. Abr. 6., v. , 5th Ed., 261 n., v. (1749) 1 Ves. Sen. 278. The case before us is cleanly not that of a pledge of a moveable; such a pledgee, as pointed out hi v. (1901) 2 Ch. 314., is in a very different position from an ordinary mortgagee, as he has only a special property in the thing pledged and may obtain a sale but not a foreclosure. The plaintiff is a mortgagee, not of immoveable but of intangible property, and he is entitled to foreclose the mortgagor quite as much as a mortgagee of chattels. [Jones, on Chattel Mortgages, 1908, Sections 699 and 776 .] It is worthy of note that, as early as 1181, described in detail a remedy applicable to chattel mortgages which is substantially equivalent to the modern procedure for foreclosure and order absolute on failure of the mortgagor to redeem within the period fixed by the Court [, Tr. Beames, Book X, Ch.. 6-8; Ed. Beale, 1900, pages 201-210]. It may be added that if the contention of the mortgagors were to prevail, they might find themselves in a worse position, than what they would occupy under a foreclosure decree; for, if the procedure for foreclosure, with its consequent opportunity to the mortgagor to redeem, is not applicable, the mortgagee may very well contend that the contract between the parties must be strictly enforced and that, as the time for repayment has passed away, the title of the mortgagee to the mortgaged property has become absolute; such a result could hardly have been contemplated by the mortgagors. ", "30. The result is that this appeal is allowed and the decree of the District Judge discharged. On account taken of the sum due on the conditional mortgage in suit on the 16th. November next, it transpires that the mortgagee will be entitled to Rs. 3,421 for principal and interest up to that date. The decree will direct that if the defendants pay this sum, together with costs of all the with 'interest' thereon (as specified in the decree of this ) on or before the 16th November 1914, the mortgage will stand redeemed. On default, the mortgage will, be foreclosed after the decree absolute has been made by in due course. The hearing fee in this is assessed at thirty gold mohurs. ", " ", "31. I agree with the proposed order on the second ground discussed by my learned brother. On the question of estoppel, I prefer to reserve my opinion."], "relevant_candidates": ["0000006974", "0000011301", "0000027168", "0000198519", "0000237469", "0000587105", "0000676085", "0000907602", "0000933603", "0000956729", "0001173428", "0001409672", "0001537139", "0001660757", "0001822596", "0001828707", "0001863886"]} {"id": "0001924884", "text": ["ORDER (J), Member ", "1. (appellants in Appeal No 534/96) are aggrieved by confiscation, by the Commissioner of , of a consignment of 'Video Magnetic Tapes in Hubs' covered by Shipping Bill No. 426772 dated 8.4.94 (with option for redemption on payment of a fine of Rs. 50,000/-). They are also aggrieved by imposition of personal penalty of Rs. 1 lakh by the Commissioner. , partner of , is the appellant in Appeal No. C/535/96 wherein he challenges the personal penalty of Rs. 50,000/- imposed on him by the Commissioner of . ", "2. The relevant facts of the case are that had imported 'Video Magnetic Tapes in pancakes' in terms of Advance Licence No. 0302672 dated 12.2.92 under the Scheme ( Book No. 058442 dated 7.4.92) and cleared the goods free of duty under Bill of Entry No 8535 dated 25.2.94 for the purpose of manufacture of Video Magnetic Tapes in hubs, which were to be exported in discharge of export obligation under the said Scheme; that, in discharge of the export obligation, they presented a consignment of what was declared as \"Video Magnetic Tapes in hubs\" for export under Shipping Bill No 426772 dated 8.4.94; that these goods were detained and examined, whereupon it appeared to authorities that the consignment contained old used and junk video magnetic tapes in hubs of no commercial value and which did not appear to have been made out of the imported raw material (Video Magnetic Tapes in Pancakes); that Agent of stated to the SIIB of (who investigated the case) that they had filed the Shipping Bill at the instance of , partner of the exporting firm; that , in his statements dated 25.4.94 and 8.11.94 under Section 108 of the Act, admitted that the goods covered by the above Shipping Bill had been purchased by him from various suppliers of old and used hubs and tapes; that further admitted that he had sold off a part of the raw materials imported by his firm in October, 1993 and had thereby earned a profit of Rs. 180/- to Rs. 190/- per pancake; that further admitted that neither his exporting firm nor his supporting manufacturers viz. Dipen Textiles Private Ltd, Palghar, Thane had carried out any manufacturing activity and that the junk tapes alongwith hubs were only purchased by him; that the Central Excise officers who searched the premises of Dipen Textiles Pvt Ltd recovered 63 packages each containing 320 Video Magnetic Tapes in hubs valued at Rs. 9,37,728/- and detained the same; that Shri admitted that the said quantity of Video Magnetic Tapes in hubs had been manufactured by Dipen Textiles at Palghar in May 1994 out of the imported Video Magnetic Tapes in Pancakes; that it appeared to the Department that had removed the raw material from their premises to the premises of Dipen Textiles Pvt Ltd; that Central Excise officers seized the above 63 packages (each containing 320 Video Magnetic Tapes in hubs) under panchnama dated 10.10.94 under Section 110 of the Act; that the DGFT authorities by letter dated 17.10.94 informed the that the Advance Licence and the book of had been cancelled; that, on account of the cancellation of Advance Licence and book, the authorities considered the import of the raw material cleared free of duty under three Bills of Entry dated 22.2.93, 8.10.93 and 25.2.94 to be unauthorized as the same were covered by the Negative List of import items under the relevant Exim Policy; that it appeared to the authorities that had deliberately misdeclared the goods covered by Shipping Bill No 426772 dated 8.4.94 to make it appear that the said goods had been manufactured out of raw material (Video Magnetic Tapes in pancakes) cleared under Bill of Entry No 8535 dated 25.2.94; that the said authorities held the view that the misdeclared goods were liable to confiscation under Section 113(d) and (i) of the Act read with Section 3(3) of the Export Trade (Control) Order, 1998; that and Shri had rendered themselves liable to penalty under Section 114(i) of the Act.; that, consequent upon cancellation of the Advance Licence and book, the imported Video Magnetic Tapes in pancakes, which were cleared without payment of duty, became chargeable to duty to the extent of over Rs. 21 lakhs; that and Shri were also liable for penalty under Section 112 of the Act; that their CHA, P.N. Shipping Agency, having aided and abetted the attempted fraudulent export of second hand goods by , had rendered themselves liable to penalty under Section 114(i) of the Act; and that a show-cause notice was issued to , Dipen Textiles Pvt Ltd and Shri proposing to:- ", "i) confiscate the goods covered by Shipping Bill No 426772 dated 8.4.94 under Section 113(d) of the Customs Act read with Section 3(3) of the Export Trade (Control) Order, 1998; ", "ii) confiscate the Video Magnetic Tapes on Pancakes converted into Video Magnetic Tapes in Hubs at Palghar under Section 111(d) and (o) read with Section 120(1) of the Customs Act; ", "iii) impose personal penalties under Sections 114(i) and 112(a) of the Act on the noticees; ", "iv) recover duty of customs on the Video Magnetic Tapes on pancakes cleared under all the three Bills of Entry. ", "The was also called upon to show cause why personal penalty should not be imposed on them under Section 114(i) of the Customs Act. ", "3. The Commissioner of , after considering the written submissions submitted by the noticees in reply to the show-cause notice and after hearing their Counsel, passed the impugned order dated 27.6.96. As regards the raw material, the order held it not liable to confiscation and dropped the demand of duty. The order also held and (CHA) not liable to be penalized. However, confiscation was ordered of the 63 packages containing 20160 Video Magnetic Tapes in hubs covered by Shipping Bill No 426772 dated 8.4.94 under Section 113(d) and (i) of the Act with option under Section 125 of the Act for redemption of the goods on payment of a fine of Rs. 50,000/-. Moreover, personal penalties of Rs. 1 lakh and Rs. 50,000/- were also imposed on and respectively under Section 114(i) of the Act. Hence these appeals of and . ", "4. We have heard both the sides. The learned Counsel for the appellants submitted that Video Magnetic Tapes in hubs confiscated by the Commissioner were freely exportable as they were not mentioned in the Negative List of Exports in Chapter XVI of the Export Import Policy 1992-97. Section 113(d) and (i) of the Customs Act were not applicable to such a case where the goods were not dutiable. Clause 3(3) of the Export (Control) Order, 1988 was also not applicable to the goods which did not figure in Schedule I or Schedule III of the Export (Control) Order and were not governed by the Licensing Policy contained in the relevant Exim Policy. The goods, therefore, were not liable to be confiscated under Section 113(d) and (i) of the Customs Act . In this connection, the learned Counsel relied on the decisions of this in the cases of [2001 (136) ELT 1398] and [2001 (137) ELT 1010]. The Counsel argued that where there was no prohibition for exporting the goods, the goods were not liable to confiscation under Section 113(d) of the Customs Act. He relied on the 's decision in [1996 (83) ELT 302], which was upheld by [2000 (115) ELT A-219]. It was further submitted that, as the goods which were declared as Video Magnetic Tapes in hubs were found to be so on visual examination, there was no misdeclaration on the part of the appellants, nor had they any intention to misdeclare the goods. The confiscation of the goods and imposition of penalty on the appellants were, therefore, not sustainable. It was not possible to ascertain by mere visual examination whether the goods were old and used. Neither any test report nor any expert opinion was relied upon to establish that the goods were old and used. The panch witnesses were only ordinary laymen with no technical knowledge or expertise to certify the nature of the goods. It was not correct on the part of the Commissioner to rely on the statements of panch witnesses as to the nature of the goods without giving the appellants an opportunity of cross-examining them. The Counsel added that the repeated requests made by the appellants for cross-examination of the panchas were only ignored by the Commissioner. The Department failed to discharge their burden of proving that the goods were old and used. The Counsel further submitted that the Commissioner had heavily relied on the confessional statements of dated 25.4.94 and 8.11.94 which, according to the appellants, had been recorded under duress, coercion and threat. Though the statements were retracted subsequently, the retraction was ignored by the Commissioner. ", "5. The DR vehemently defended the order of the Commissioner by submitting that the appellants had confessed their guilt in unequivocal terms in their statements dated 25.4.94 and 8.11.94 and these statements were never retracted by them. In view of the admission, by the appellants, of their offence alleged in the show-cause notice, any further evidence was not required to prove the offence. The DR relied on the decision of in [1997 (90) ELT 31(Cal.)] and submitted that the appellants had, by declaring the high FOB value of Rs. 10,14,949/-for the old/used Video Magnetic Tapes in hubs of no commercial value, had indulged in redeclaration of value (overinvoicing) which amounted to violation of Section 11 of the Customs Act, attracting the provisions of Section 113 of the Act. The DR pointed out that the decision of had been followed by the in the case of [2002 (141) ELT 282]. He concluded by submitting that there was nothing wrong with the confiscation of the goods or with the imposition of penalties on the appellants. ", "6. In his rejoinder, the learned Counsel for the appellants argued that the judgment of was not applicable to the instant case. According to him, the said judgment had been rendered by the consent of parties. had not examined the confiscability of any goods under Section 113(d) or (i) of the Customs Act . The observations contained in para 20 of judgment were in the nature of obiter dicta and did not provide any binding ratio. It was further argued that the view expressed by in para 20 of its judgment was contrary to the law laid down by in [AIR 1970 SC 1597] which was followed by this in the case of v. Commissionersf [Order No. C-1/3977-84/WZB/2000 dated 4.11.2000 in Appeal Nos. C/363-364/2000 Bom]. ", "7. We have carefully examined the submissions. Admittedly, the Video Magnetic Tapes in hubs covered by Shipping Bill No 426772 dated 8.4.94 had been presented by the appellants through their for export under the DEEC Scheme towards discharge of export obligation (under Notification No. 159/90-Cus dated 30.3.1990 under the said Scheme) vis-a-vis raw material (Video Magnetic Tapes in pancakes) which they had cleared earlier without payment of duty on the strength of Advance Licence No. 0302672 and DEEC Book No. 058442. The said goods covered by the Shipping Bill for export were described as Video Magnetic Tapes in hubs. Visual examination of the goods showed that they were old and used ones. , partner of the firm viz. Dipen Enterprises, in his statements dated 25.4.94 and 8.11.94, admitted that the goods had been purchased from various suppliers of old and used hubs and tapes. He also admitted that, under the DEEC Scheme, they should have exported new product. He further admitted that he had disposed of a part of the raw material imported earlier in the month of October, 1993, for monetary consideration and had thereby made an estimated profit of Rs. 180/-to Rs. 190/- per pancake. He also produced records showing sale of 879 pancakes at the rate of Rs. 660/-per pancake making net income of over Rs. 5.8 lakhs. He admitted that such unauthorized disposal of the raw material imported under the DEEC Scheme was illegal. Regarding the nature of the export goods, he stated that he was not aware as to whether they were in serviceable condition. He stated that neither the exporting firm nor their supporting manufacturers ( Dipen Textiles) had carried out any manufacturing activity in their respective premises in relation to the said goods. admitted his guilt and prayed for a lenient view. These statements of have been claimed to have been retracted by him. It was claimed that the statements dated 25.4.94 and 8.11.94 were retracted on 26.4.94 and 9.11.94 respectively and that the 'retracting letters' were sent to the investigators (, New Custom House, Bombay) under certificate of posting. The impugned order says that there was nothing on record to show that the appellants had retracted the statements dated 25.4.94 and 8.11.94. We have also found no evidence of any 'retracting letter' having been received by the departmental investigators. None of the officers in the investigating team () was examined by the appellants to prove their point. We are also at a loss to understand as to why the appellants did not resort to an effective mode of dispatch which was acknowledgeable by the addressee. Annexure 'J' to the memorandum of appeal is a 'certificate of posting' bearing the postal date-seal on which the date is not legible. It has been claimed by the appellants that this document is evidence of their retracting letter dated 26.4.94 having been sent to the . Annexure 'L' to the memorandum of appeal is another 'certificate of posting' which also carries a postal seal on which the date is not legible. It has been claimed that this document proves dispatch of the appellants' retracting letter dated 9.11.94 to the . By no stretch of imagination can a certificate of posting issued by postal authorities to the sender be considered as evidence of receipt of the postal article by the addressee. Therefore, in this case, there is no sustainable evidence of any retraction of the statements dated 25.4.94 and 8.11.94. The statements have been rightly relied upon by the adjudicating authority. clearly admitted that the export goods covered by the shipping bill had not been manufactured by Dipen Enterprises or even by their supporting manufacturers Dipen Textiles Pvt Ltd and that the goods had been purchased from the local market. He never claimed that the goods were new and unused. On the other hand, he conceded that he did not know as to whether the goods were in serviceable condition. He even went to the extent of admitting that the suppliers of the goods had told him that the goods were old and used ones. Therefore, the fact that the Video Magnetic Tapes in hubs seized by the departmental officers had not been manufactured out of the raw material imported duty-free under the DEEC Scheme and were old/used second hand goods procured from the local market stands proved. The appellants were admittedly aware of the legal requirement that the export goods under the DEEC Scheme should be new and not old and used ones. The Shipping Bill described the goods as Video Magnetic Tapes in hubs only. The FOB value (Rs. 10,14,949/-) of the old goods declared in the Shipping Bill was undisputedly that of new goods. The appellants have never had a case that old/used video magnetic tapes in hubs had any appreciable commercial value. For all these reasons, the case of the that the appellants had misdeclared and overvalued the goods has to be sustained. ", "8. It has been held by in the case of (supra) that misdeclaration of value of goods by exporter amounts to violation of prohibition deemed to have been imposed under Section 11 of the Customs Act attracting the provisions of Section 113 of the Act. This view of is contained in para 20 of its judgment, which reads as under:- ", "\"Similarly, under the Foreign Trade (Regulation) Rules, 1993 which have been framed under the Foreign Trade (Development and Regulation) Act , 1992 Rule 2(i) provides that 'value' would have the same meaning as was assigned to it in Section 2(41) of the act. Thus the procedure for determination of value under Section 14 of the act is brought in for the purposes of the 1993 Rules. Rule 11 of the 1993 Rules clearly states that the value of the goods must be stated whether the goods are liable to duty or not and such statement must be certified as being correct. If therefore an incorrect declaration is made this would be a violation of Rule 11 of the 1993 Rules. If an incorrect declaration of the value is made this would violate Section 11 of the 1992 Act which forbids the export or import of goods in violation of the Rues. This in turn would attract the provisions of Sections 111 and 13 of the Act as goods imported or exported contrary to law and give the power to investigate the correct value of the gods in question and for that purpose utilize the method prescribed under Section 14(1) .\" ", "The above ruling of has been followed by this in the case of (supra). It was pointed out by the Counsel that 's ruling was not followed by the in the case of [2001 (137) ELT 916]. It was not followed in the case of (supra) either. We find that, in both the cases, the Bench relied on the 's Larger Bench decision in [2000 (121) ELT 754]. But the view taken by the 3-Member larger bench in has been overruled by a larger bench of Five Members of the in the case of [2001 (127) ELT 81]. The latter larger Bench relied on judgment in case and also distinguished decision in [2000 (115) ELT A-219]. In the result, it is the decision of that should be followed in the instant case. On a reading of the apex court's judgment in (supra) relied on by the learned counsel, we are unable to accept his argument that decision is hit by the said judgment of the apex court. In the result, we hold that the appellants had contravened Section 11 of the Customs Act (thereby attracting the penal provisions of Section 113 of the Act) by overvaluing the export goods in the Shipping Bill with an oblique purpose. The Commissioner has rightly invoked the provisions of Section 113 to confiscate the goods. In the facts and circumstances of the case, we do not find any reason to interfere with the quantum of redemption fine imposed by him under Section 125 in lieu of confiscation. Further, a personal penalty under Section 114 (i) of the Customs Act would be liable to be imposed on as they had rendered the goods liable to confiscation under Section 113 of the Act. The penalty of Rs. 1 lakh imposed on by the Commissioner, however, appears to be on the higher side in the facts and circumstances of the case. We reduce it to Rs. 50,000/-. ", "9. is a partner of the exporting firm, . A separate penalty has been imposed on him by the Commissioner under the same provision of law. According to settled law, identical penalties on the firm and its partner on the same ground are unwarranted. Therefore, we set aside the penalty imposed on . ", "10. In the result, Appeal No. C/534/96 is dismissed, but with a reduction of the quantum of penalty on the appellant to Rs. 50,000/-. Appeal No. C/535/96 is allowed."], "relevant_candidates": ["0000802605", "0000844585", "0000894621", "0000942511", "0001451490", "0001480227", "0001630921", "0001748864", "0001861358", "0001993975"]} {"id": "0001934801", "text": ["JUDGMENT , C. and , ", "1. This is an execution appeal. It appears that a decree was obtained by minors on the 22nd of May, 1901. There were several applications for execution leading up to one on the 6th of February, 1912, which was dismissed on the 3rd of December, 1912. The present application for execution was made on the 27th of May, 1913. It thus appears that the last application for execution was more than 12 years from the date of the decree. The judgement-debtors resisted execution relying - on Section 48 of the Code of Civil Procedure. This section provides that \"where an application to execute a decree, not being a decree granting an injunction has been made, no order for the execution, of the same decree shall be made upon any fresh application presented after the expiration of 12 years\" from the various dates specified in the section. It is admitted that had the decree-holders been parsons of full age the present application would be clearly barred. It is, however, contended that being minors they are still entitled to execute the decree. The first court-allowed the objection of the judgement-debtors. The lower appellate court reversed the order of the court of first instance. The learned Judge of this Court reversed the order of the lower appellate court and restored the order of the court of first instance. ", "2. Section 6 of the Indian Limitation Act, No. IX of 1908, provides as follows : \"Where a person entitled to institute a suit, or make an application for the execution of a decree, is at the time from which the period of limitation is to be reckoned, a minor or insane or an idiot, he may institute the suit or make the application within the same period after the disability has ceased, as would otherwise have been allowed from the time prescribed therefor in the third column of the first schedule.\" It is admitted that the provisions of this section do not help the present decree-holders. It might have given them a right to execute their decree notwithstanding the expiration of the three years limit laid down in Article 182 of the schedule I, but it does not give them any exemption from the provisions of Section 48 of the Code of Civil Procedure. In the case of v. (1891) I.L.R. 16 Bom. 536 , , held in a case similar to the present that Section 7 of the former Limitation Act (which corresponds to Section 6 of the present Limitation Act ), only applied to cases dealt with by the statute itself. ", "3. He, however, goes on to say : \"The question referred to us must be decided by the general principles of law as to the disability of minors, to which the provisions of the Code of Civil Procedure must, in the absence of anything to the contrary, be deemed to be subject. The general principle is that time does not run against a minor; and the circumstance that he has been represented by a guardian does not affect the question.\" If we were. to accept this statement of the law it would mean that a minor party to a suit through his guardian, whether as plaintiff or as defendant, is not bound to take any of the steps provided by the Code of Civil Procedure within the periods therein limited. For example it would be open to a minor judgement-debtor to reopen by way of appeal a question which had been finally decided years before. Just in the same way if a suit had been decided against a minor he might delay presenting his appeal for many years. The learned Judge of this Court has referred to the Judgment of Sir in v. Mohan Lal Punj. Rec., 1894 C.J. 489, and also to the decision (1912) I.L.R. 37 Mad. 186. In our opinion the Judgment of the learned Judge of this Court was correct and ought to be affirmed. We dismiss the appeal with costs."], "relevant_candidates": ["0000206286"]} {"id": "0001943102", "text": ["JUDGMENT ", "1. This appeal is directed against an order of an additional District Judge of Muzaffarpur who dismissed an appeal preferred by the judgment-debtor against the order of the Subordinate Judge dismissing his application under Section 77 of the Civil Procedure Code. The respondent filed a suit against the appellant and other members of his family to recover a certain amount on the basis of a promissory note executed by the judgment debtor appellant. The suit was dismissed for default on 3-9-57. An application for restoration of the suit was filed by the plaintiff respondent under Order 9, Rule 9 of the Code of Civil Procedure. In pursuance of a compromise petition filed by the parties, a consent order was passed on 17-9-57 restoring the suit and decreeing the suit for Rs. 7586 and odd against two of the defendants, namely, defendants 3 and 4. Defendant No. 3 was the appellant and his son was defendant No. 4. The execution proceeding, out of which this appeal arises, was started by the respondent decree-holder against judgment debtor No. 1, that is, defendant' No. 3 who is the appellant, only, with a prayer for realisation of the decretal dues by arrest and detention in the civil prison. After the service of notice under Order 21, rule 22 of the Code, the appellant filed the aforesaid application under Section 47 asserting that the decree-holder's dues could not be realised from him by arrest and detention in civil prison as the conditions laid down in the proviso to Section 51 of the Code were not fulfilled. The decree-holder respondent examined himself in support of his contention that the appellant did not pay the decretal dues in spite of the fact that he had means to pay the same since the passing of the decree, while the appellant examined himself in support of his application under Section 47 of the Code, the other two witnesses being formal. Both the courts below accepted the case of the decree-holder and consequently the application under Section 47 was dismissed. ", "2. Mr. , appearing on behalf of the judgment-debtor appellant drew our attention to Rules 37 and 40 of Order 21 read with Section 51 of the Civil Procedure Code. The object of these provisions is to afford protection to honest debtors who are incapable of paying their dues for reasons beyond their control and who have not committed any act of bad faith. The test is whether the debtor is unwilling to pay in spite of his means to pay. The circumstances which justify an order for arrest are contained in Section 51 of the Code, which provides for the different modes of execution of a decree and lays down that, where the decree is for the payment of money, execution by detention in prison shall not be ordered, unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the court for reasons recorded in writing is satisfied. ", "\"(a) that the judgment-debtor, with the object or effect of obstructing or delaying with the execution of the Decree. ", "(i) is likely to abscond or leave the local limits of the jurisdiction of the , or ", "(ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property, or ", "(b) that the judgment-debtor has, or has had since the date of the decree the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same or, ", "(c) that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account\". ", "Clause (c) does not apply to the instant case nor Sub-clause (i) of Clause (a). It is, therefore, to be seen whether the judgment-debtor, with the object of obstructing or delaying execution of the decree has, since the passing of the decree, dishonestly transferred, concealed or removed any part of the property or committed any act of bad faith, or having had means to pay the decree has refused or neglected to pay the same. In the instant case, having gone through the evidence of the two witnesses examined on behalf of each party, we do not find any of the circumstances mentioned in any of these clauses. The decree-holder stated that the judgment-debtor was still joint with his brothers and father and they had 30 bighas of land inclusive of and recently purchased lands; but no document was filed support of the same. In cross-examination the decree-holder expressed his ignorance as to when the recently purchased land had been acquired. He did not see the sale deeds under which the land was said to have been purchased by the judgment-debtor and others of his family, nor had he seen any of the sale deeds, nor was he present at the time of the execution or registration of any of the sale deeds. He could not say the boundaries of any land belonging to the judgment-debtor and other members of his family He had not even filed any petition for taking copy of the survey proceedings He did not even make any enquiry from the landlord's office or seen any paper relating to the land of the judgment-debtor and other members of his family. On the other hand, the appellant-judgment debtor said that he was separate from his father and other members of his family since 15 or 16 years and that in his share he had got only 16 kathas of land He denied having any property in the name of his wife and said that he did not conceal any property The learned Addl. District Judge relied on certain statements in his deposition and reproduced the same in his judgment which reads thus :- ", "\"No land of mine has been recorded in the recent survey going on in the village. I do not know in whose name that 16 kathas of land has been recorded in the current survey operation. I do not know if lands are recorded in khata No. 220 in my name under touzi No. 13564. I do not know if lands in extensive area have been recorded under khata 404 of Touzi No. 13569 in the current survey. I do not know if lands are recorded in the names of my brothers. I do not know what area of lands are owned and possessed by my father. I do not remember the calendar year and month when I had separated from my father and brother. I do not know how much land went to my father and brother on partition. I do not know what rental is payable for my land\". ", "The learned Judge then observed that one could not help getting the impression that the appellant, by pretending ignorance, has tried deliberately to suppress the facts and his assets from the and that the proviso to Section 51 CPC was not enacted to give protection to such a judgment debtor. This inference is not justified, because the onus to bring a case within one or more clauses of the proviso to Section 51 C.P.C. is on the decree-holder who wants the judgment-debtor to be arrested and detained in civil prison. The learned Judge relied on an observation in the case of ., AIR 1955 Mad 409, which reads as follows:-- ", "\"In my view it is perfectly open to a court to apply a judicial corrective to the extreme lengths to which the onus which Act 9 of 1935 casts on decree-holders is sought to be taken by adopting the view that it is perfectly open to an executing court on all the material placed before it to come to an inference as regards the statutory findings required by provisos (a) (2) and (b) of Section 51. Civil P. C. It is also no doubt true that the onus rests on the creditor to prove the debtor's ability to pay, and mere disbelief of the latter's statement that he had no means to pay is not sufficient. Where, however, there is sufficient material shown to warrant an inference, as in the present case, that the judgment debtor has actually been in the possession of substantial assets a few months prior to suit, an inference is perfectly justifiable that he has since the institution of the suit dishonestly concealed them and, furthermore, that he has since the date of the decree means to pay a substantial portion of it from assets he is concealing from the .\" ", "Act 9 of 1935 referred to in this quotation appears to be a printing error for Act 21 of 1936. Learned Counsel for the appellant, however, contended, on the observation of their Lordships, that it is open to apply a judicial corrective to the extreme length to which the onus is cast on the decree-holder. In our opinion, the court has to interpret the law as it is and it cannot minimise the rigor of the onus. It is, of course, true that the court has to consider all the materials placed before it, in order to decide whether the onus has been discharged by the decree holder. In the Madras case, referred to above, there were sufficient materials which justified the inference that the decree-holder had discharged that onus and the judgment-debtor was liable to be arrested and detained in civil prison. In the instant case, however, there is no material at all on the basis of which it can be said that the decree-holder has discharged the onus. Though he was in a position to produce documents and witnesses in support of the general statement that the judgment-debtor and the other members of his family were still joint and that they had 30 bighas of land, he did not choose to produce the same. This general statement of his was rebutted by the evidence of the judgment-debtor. From the fact that by the compromise the plaintiff, who is now the decree-holder, agreed to forgo his claim against all the members of the family of the judgment-debtor except himself and his son, because they had taken the plea in the suit that the judgment-debtor and his son had separated from the other members long before, the reasonable inference is that the alleged separation had taken place some time before the compromise, even though it, might not have taken place 15 or 16 years back, as stated by the judgment-debtor in his evidence in the instant case. Further, the mere fact, that the judgment-debtor had not produced his khatians or any document is not sufficient to draw the inference that he had been concealing any property, particularly when he definitely stated in his examination in chief that he had not concealed any property. ", "So far as the question of onus is concerned, it is enough to refer to a Bench decision of , in the case of 1955 All 402, wherein it was held that, whether the judgment debtor files any written objection or not after the service of notice on him, it is for the decree-holder to lead his evidence in the presence of the judgment debtor in support of his application and should have reference to the grounds which, according to the decree-holder, would justify the arrest of the judgment-debtor and and it will be only when the decree-holder has led prima facie evidence in support of his application that the judgment-debtor has to be given an opportunity of showing cause why he should not be committed to the civil prison. Substantially, the same view was taken by Mr. Justice in the case of v. Municipal Commissioner. Muzaffarpur Municipality, 1964 BLJR 617 His Lordship held that it would not be a sufficient compliance with Section 51, if the decree-holder merely says vaguely that the judgment-debtor has movable and immovable properties from which he can pay the decretal amount. ", "3. From a persual of the judgment of the courts below, it is manifest that the finding that the decree-holder had been able to bring the case within the relevant clauses of the proviso to Section 51 of the Code of Civil Procedure is based on no evidence, and, therefore, we are entitled to take a different view in this case. In view of the foregoing discussions, we hold that there is absolutely no material on the record in the instant case to justify the arrest and detention of the judgment debtor appellant in civil prison. ", "4. The next question is whether the judgment-debtor had, by virtue of the contents of the compromise petition, waived the privilege conferred on him by the proviso to Section 51 of the Civil Procedure Code. The learned Judge has referred to Clause (d) of the compromice petition in which it was stated that on the failure of any of the instalments on the due date the entire remaining decretal amount would become payable at once and would be realisable from \"the person and properties of defendants Nos. 3 and 4\". It was argued by Mr. on behalf of the appellant that the portion of Clause (d) of the compromise petition stated above does not mean that defendants 3 and 4 of the suit meant to forego this privilege. What they really meant was that in case of default, the decree-holder would be entitled to realise the dues from their person and properties in accordance with law. It may be mentioned here that defendant No. 4 is a minor son of defendant No. 3 who is the appellant in this court. Mr. , on the other hand, contended that in Clause (d) of the compromise the appellant did forgo his privilege; but we are unable to agree with him and we accept the contention of Mr. . ", "5. In the alternative, Mr. submitted that the privilege conferred by the proviso to Section 51 of the Code of Civil Procedure on the judgment debtor cannot be waived at all. It is well settled that every one has the right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with, without Infringing any public right or public policy: See Maxwell on Interpretation of Statutes, Eleventh Edition, page 376. In the case of , AIR 1959 SC 149, it was held that, where a right or privilege guaranteed by law rests in the individual and is primarily intended for his benefit and does not infringe on the right of others, It can be waived, provided such waiver is not forbidden by law and does not contravene public policy or public morale. It is apparent that waiver of the privilege conferred by the proviso to Section 51 of the Code does infringe the public policy, because by inserting this privilege for the judgment- ", "debtor in Section 51 of the Act of 1908, the was guided by public policy, namely, that a debtor should not be put in the prison, when he is unable to pay his debt for reasons beyond his control. ", "Mr. , however, submitted that some of the privileges conferred on the judgment-debtor by Section 60 of the Civil Procedure Code could be waived and, therefore, the privilege conferred by the proviso to Section 51 of the Code should also be waived. He has, like the court below, relied on four decisions, namely, , AIR 1950 Mad 284, v. , AIR 1927 Pat 233, , 24 Cal WN 575 = (AIR 1920 Cal 424) and , AIR 1946 All 432. In the Madras case, which was in respect of the Madras Buildings (Lease, Rent and Control) Act , 1946, there was a document of lease which expressly provided that, if the rent remained unpaid for two tenancy months after it became payable, the landlord would be entitled to re-entry upon the demised premises. Section 7(2)(i) of the Act, however, provided that the landlord may be entitled to apply for eviction even when there was default, in payment of a month's rent. The question raised was whether in a document of lease the landlord could make a contract for forgoing his privilege of going to court for eviction of the tenant on the letter's default in making the payment of a month's rent. It was held by their Lordships that such a contract was quite valid, as the privilege given to the landlord by section 7 of the Act could be waived, if such a waiver would not infringe any public right or public policy. It is obvious that the provision regarding the eviction on default of the payment of the rent for a month does not involve public policy. ", "The other three decisions deal with the waiver by the judgment-debtor in respect of his privilege under Section 60(1)(c) that his house could not be attached in execution of a money decree; and it was held by their Lordships that such a waiver was permissible. In the Calcutta case there were other properties also besides the house, but they were also not attachable in law. Sub-section (1) of Section 60 contains a list of properties which are liable to attachment and sale in execution of a decree and then there is a proviso to the effect that, in spite of the contents of that list, some properties shall not be liable to such attachment or sale. According to Clause (c) of the proviso, houses and other buildings belonging to an agriculturist and occupied by him cannot be attached. It is, therefore, apparent that it is for the judgment debtor to claim this privilege by proving that he is an agriculturist and occupies the house. It is, therefore, clear that the judgment-debtor can forgo such a claim. On the other hand, the proviso to Section 51 enjoins on the court itself not to order arrest and detention of the judgment debtor in prison unless the court, for reasons recorded in writing, is satisfied that the materials on the record of the case come within any of the clauses of the proviso. In other words, it is a mandate to the court by the as a matter of public policy with a view to implement its object by protecting debtors who cannot pay their debts for reasons beyond their control. Irrespective of the fact whether the judgment debtor appears or not, the court has to satisfy itself, before issuing any warrant of arrest against the judgment debtor, whether the materials on the record bring the case within any of the clauses of the proviso to Section 51 of the Code.\" Proviso to Section 60 of the Code, however, shows that it is for the judgment debtor to place materials before the court to bring his case within the relevant clauses. The distinction between the two therefore, is obvious. ", "In this connection, Section 3 of the Limitation Act may be seen. This section lays down that, subject to the provisions contained in Sections 4 to 25 , every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence. Here too the has given a mandate to the court to dismiss suits, appeals or applications filed after the prescribed period of limitation even though the other party does not take up the plea of limitation. It is by now well settled that the court must dismiss a suit as barred by limitation even though the defendant does not raise such a plea or press the same. In view of the foregoing discussions, we are unable to agree with the learned Additional District Judge and hold that the judgment-debtor could not waive the privilege conferred on him by Section 51 of the Code of Civil Procedure. ", "6. In the result, the appeal is allowed and the orders of the courts below are set aside. In the circumstances of the case, the parties will bear their own costs through out."], "relevant_candidates": ["0000369003", "0000761967", "0000979282", "0001251155", "0001431359", "0001790472"]} {"id": "0001956690", "text": ["CASE NO.: Appeal (crl.) 1302 of 2006 PETITIONER: @ Mubarik Hussain \u0005Appellant RESPONDENT: State of Rajasthan \u0005Respondent DATE OF JUDGMENT: 12/12/2006 BENCH: Dr. & S.H. KAPADIA JUDGMENT: ", "J U D G M E N T (Arising out of SLP (Crl.) No. 4765 of 2006) Dr. ARIJIT PASAYAT, J Leave granted. ", "Challenge in this appeal is to the judgment rendered by of at Jodhpur confirming the death sentence awarded to the appellant for commission of offence punishable under Section 302 of the Indian Penal Code, 1860 (in short the ' IPC '). had imposed a death sentence and, therefore, made a reference for confirmation of death sentence by in terms of Section 366 of the Code of Criminal Procedure, 1973 (in short the 'Code'). ", "Appellant also filed an appeal and both the case under reference and the appeal were taken up together and disposed of by a common judgment. ", "According to the prosecution accused killed his wife- , three daughters namely, , and @ Munni aged 9 years, 6 years and 4 years respectively and son aged 2 = years. The Additional Sessions Judge (Fast Track), had found the charge for commission of offence under Section 302 to have been proved and imposed the death sentence. ", "Prosecution version in a nutshell is as follows: On 10.12.2005 at about 6 A.M. (PW-1) submitted a written report at , stating inter alia that In the evening of 9.12.2005 the appellant gave beating to his wife and children. But they were rescued on his intervention. He described as a person of notorious character. It was further averred that in the morning at about 5 a.m. his brother appellant came out of the house shouting and making declaration that he has killed all the five bastards by strangulation one by one. He killed his wife , daughters , , @ Munni and son . The dead bodies were found placed on the mattresses tying the thumbs of each leg of the dead bodies by thread. On this information police registered a case for offence punishable under Section 302 I.P.C. and proceeded with investigation. All the dead bodies were sent for postmortem. consisting of three doctors conducted the postmortem of all the five dead bodies. The appellant was arrested. After usual investigation police laid charge-sheet against the appellant for offence punishable under Section 302 I.P.C. On being committed the appellant was tried of the charge of offence punishable under Section 302 I.P.C. by the court of Additional Sessions Judge (Fast Track), . The trial court on consideration of the evidence led by the prosecution found the appellant guilty of offence under Section 302 I.P.C. ", " relied upon the following circumstances to find the accused guilty. ", "(1) Extra judicial confession made by the appellant before (PW-1), (PW-2), (PW-3) and (PW-4). ", "(2) The presence of the appellant in the house wherein the alleged incident took place. (3) Recovery of ear ring of the wife from the possession of the appellant. ", "At the time of hearing the reference and the appeal the primary stand taken by the accused appellant was that the extra judicial confession relied upon by the prosecution is not correct. It was submitted that the alleged confession publicly standing on a platform is highly improbable. found that the evidence of (PW-1) and (PW- ", "2) was cogent and credible. PW-1 was a neighbour and PW-2 is the brother of the accused-appellant. There is no reason as to why they would falsely implicate the accused-appellant by making an untruthful statement. Added to that, evidence of PW-1 about the behaviour of the appellant was relevant. The third circumstance was the recovery of ornament from the possession of the appellant. The circumstances highlighted by the prosecution according to presented a complete chain of circumstances. Though it was submitted by the accused-appellant that even if the prosecution case was accepted in its totality, there was no special reason to impose the death sentence. considered this plea in the background of what has been stated by this Court in (1983 (3) SCC 470) and (1980 (2) SCC 684). Reference was also made to the decision in (2003 (8) SCC 224). was of the view that the appellant had acted in a most cruel and diabolic manner. He deliberately planned and meticulously executed the same. There was not even any remorse for such gruesome acts. On the contrary, he was satisfied with what he had done. He made a declaration of his act of abusing his wife and children. Accordingly, the death sentence was confirmed. ", "The stand taken by the accused-appellant before was re-iterated in this appeal. Additionally, it was stated that the accused was in a state of drunkenness and did not know the consequences of what he did and, therefore, death sentence should not have been awarded. ", "On the contrary, learned counsel for the submitted that the cruel and diabolic acts of the accused show that he does not deserve any leniency so far as the sentence is concerned. Drunkenness cannot be an excuse for such cruel and inhuman acts. ", "It has been consistently laid down by this Court that where a case rests squarely on circumstantial evidence, the inference of guilt can be justified only when all the incriminating facts and circumstances are found to be incompatible with the innocence of the accused or the guilt of any other person. ( (AIR 1977 SC 1063); (AIR 1956 SC 316); (AIR 1983 SC 446); and Ors. (AIR 1985 SC 1224); (AIR 1987 SC 350); . (AIR 1989 SC 1890). The circumstances from which an inference as to the guilt of the accused is drawn have to be proved beyond reasonable doubt and have to be shown to be closely connected with the principal fact sought to be inferred from those circumstances. (AIR 1954 SC 621), it was laid down that where the case depends upon the conclusion drawn from circumstances the cumulative effect of the circumstances must be such as to negative the innocence of the accused and bring the offences home beyond any reasonable doubt. ", "We may also make a reference to a decision of this Court in . , wherein it has been observed thus: ", "\"In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and such circumstances must be conclusive in nature. Moreover, all the circumstances should be complete and there should be no gap left in the chain of evidence. Further the proved circumstances must be consistent only with the hypothesis of the guilt of the accused and totally inconsistent with his innocence....\". ", " . (AIR 1990 SC 79), it was laid down that when a case rests upon circumstantial evidence, such evidence must satisfy the following tests: ", "(1) the circumstances from which an inference of guilt is sought to be drawn, must be cogently and firmly established; ", "(2) those circumstances should be of a definite tendency unerringly pointing towards guilt of the accused; ", "(3) the circumstances, taken cumulatively should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else; and (4) the circumstantial evidence in order to sustain conviction must be complete and incapable of explanation of any other hypothesis than that of the guilt of the accused and such evidence should not only be consistent with the guilt of the accused but should be inconsistent with his innocence. ", " , (AIR 1992 SC ", "840), it was pointed out that great care must be taken in evaluating circumstantial evidence and if the evidence relied on is reasonably capable of two inferences, the one in favour of the accused must be accepted. It was also pointed out that the circumstances relied upon must be found to have been fully established and the cumulative effect of all the facts so established must be consistent only with the hypothesis of guilt. ", "Sir in his admirable book \"Wills' Circumstantial Evidence\" (Chapter VI) lays down the following rules specially to be observed in the case of circumstantial evidence: (1) the facts alleged as the basis of any legal inference must be clearly proved and beyond reasonable doubt connected with the factum probandum; (2) the burden of proof is always on the party who asserts the existence of any fact, which infers legal accountability; (3) in all cases, whether of direct or circumstantial evidence the best evidence must be adduced which the nature of the case admits; (4) in order to justify the inference of guilt, the inculpatory facts must be incompatible with the innocence of the accused and incapable of explanation, upon any other reasonable hypothesis than that of his guilt, (5) if there be any reasonable doubt of the guilt of the accused, he is entitled as of right to be acquitted\". ", "There is no doubt that conviction can be based solely on circumstantial evidence but it should be tested by the touch- stone of law relating to circumstantial evidence laid down by as far back as in 1952. ", "In and of Madhya Pradesh, (AIR 1952 SC 343), wherein it was observed thus: ", "\"It is well to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should be in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.\" ", "A reference may be made to a later decision in , (AIR 1984 SC 1622). Therein, while dealing with circumstantial evidence, it has been held that onus was on the prosecution to prove that the chain is complete and the infirmity of lacuna in prosecution cannot be cured by false defence or plea. The conditions precedent in the words of this Court, before conviction could be based on circumstantial evidence, must be fully established. They are: ", "(1) the circumstances from which the conclusion of guilt is to be drawn should be fully established. The circumstances concerned must or should and not may be established; ", "(2) the facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty; (3) the circumstances should be of a conclusive nature and tendency; ", "(4) they should exclude every possible hypothesis except the one to be proved; and (5) there must be a chain of evidence so compete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused. ", "The only other thing which needs consideration is whether death sentence as awarded by trial Court is proper. ", "Section 302 prescribes death or life imprisonment as the penalty for murder. While doing so, the Code instructs the court as to its application. The changes which the Code has undergone in the last three decades clearly indicate that is taking note of contemporary criminological thought and movement. It is not difficult to discern that in the Code , there is a definite swing towards life imprisonment. Death sentence is ordinarily ruled out and can only be imposed for \"special reasons\", as provided in Section 354(3) . There is another provision in the Code which also uses the significant expression \"special reason\". It is Section 361 . Section 360 of the 1973 Code re-enacts, in substance, Section 562 of the Criminal Procedure Code, 1898 (in short \"the old Code\"). Section 361 which is a new provision in the Code makes it mandatory for the court to record \"special reasons\" for not applying the provisions of Section 360 . Section 361 thus casts a duty upon the court to apply the provisions of Section 360 wherever it is possible to do so and to state \"special reasons\" if it does not do so. In the context of Section 360 , the \"special reasons\" contemplated by Section 361 must be such as to compel the court to hold that it is impossible to reform and rehabilitate the offender after examining the matter with due regard to the age, character and antecedents of the offender and the circumstances in which the offence was committed. This is some indication by the legislature that reformation and rehabilitation of offenders and not mere deterrence, are now among the foremost objects of the administration of criminal justice in our country. Section 361 and Section 354(3) have both entered the statute-book at the same time and they are part of the emerging picture of acceptance by the legislature of the new trends in criminology. It would not, therefore, be wrong to assume that the personality of the offender as revealed by his age, character, antecedents and other circumstances and the tractability of the offender to reform must necessarily play the most prominent role in determining the sentence to be awarded. Special reasons must have some relation to these factors, Criminal justice deals with complex human problems and diverse human beings. A Judge has to balance the personality of the offender with the circumstances, situations and the reactions and choose the appropriate sentence to be imposed. ", "It should be borne in mind that before the amendment of Section 367(5) of the old Code, by the Criminal Procedure Code (Amendment) Act , 1955 which came into force on 1.1.1956, on a conviction for an offence punishable with death, if the court sentenced the accused to any punishment other than death, the reason why sentence of death was not passed had to be stated in the judgment. After the amendment of Section 367(5) of the old Code by Act 26 of 1955, it is not correct to hold that the normal penalty of imprisonment for life cannot be awarded in the absence of extenuating circumstances which reduce the gravity of the offence. The matter is left, after the amendment, to the discretion of the court. The court must, however, take into account all the circumstances, and state its reasons for whichever of the two sentences it imposes in its discretion. Therefore, the former rule that the normal punishment for murder is death is no longer operative and it is now within the discretion of the court to pass either of the two sentences prescribed in this section; but whichever of the two sentences he passes, the Judge must give his reasons for imposing a particular sentence. The amendment of Section 367(5) of the old Code does not affect the law regulating punishment under IPC . This amendment relates to procedure and now courts are no longer required to elaborate the reasons for not awarding the death penalty; but they cannot depart from sound judicial considerations preferring the lesser punishment. ", "Section 354(3) of the Code marks a significant shift in the legislative policy underlying the old Code as in force immediately before 1.4.1974, according to which both the alternative sentences of death or imprisonment for life provided for murder were normal sentences. Now, under Section 354(3) of the Code the normal punishment for murder is imprisonment for life and death penalty is an exception. The court is required to state the reasons for the sentence awarded and in the case of death sentence \"special reasons\" are required to be stated, that is to say, only special facts and circumstances will warrant the passing of the death sentence. It is in the light of these successive legislative changes in the Code that the judicial decisions prior to the amendment made by Act 26 of 1955 and again Act 2 of 1974 have to be understood. ", "This Court in . (1974 (4) SCC 443) has observed : (SCC pp. 453-54, para 26) \"26. Let us crystallize the positive indicators against death sentence under Indian law currently. Where the murderer is too young or too old, the clemency or penal justice helps him. Where the offender suffers from socio-economic, psychic or penal compulsions insufficient to attract a legal exception or to downgrade the crime into a lesser one, judicial commutation is permissible. Other general social pressures, warranting judicial notice, with an extenuating impact may, in special cases, induce the lesser penalty. Extraordinary features in the judicial process, such as that the death sentence has hung over the head of the culprit excruciatingly long, may persuade the court to be compassionate. Likewise, if others involved in the crime and similarly situated have received the benefit of life imprisonment or if the offence is only constructive, being under Section 302 , read with Section 149 , or again the accused has acted suddenly under another's instigation, without premeditation, perhaps the court may humanely opt for life, even like where a just cause or real suspicion of wifely infidelity pushed the criminal into the crime. On the other hand, the weapons used and the manner of their use, the horrendous features of the crime and hapless, helpless state of the victim, and the like, steel the heart of the law for a sterner sentence. We cannot obviously feed into a judicial computer all such situations since they are astrological imponderables in an imperfect and undulating society. A legal policy on life or death cannot be left for ad hoc mood or individual predilection and so we have sought to objectify to the extent possible, abandoning retributive ruthlessness, amending the deterrent creed and accenting the trend against the extreme and irrevocable penalty of putting out of life.\" ", "In case (supra) it has been observed that: ( p. 751, para 209) \"A real and abiding concern for the dignity of human life postulates resistance to taking a life through law's instrumentality. That ought not to be done save in the rarest of rare cases when the alternative option is unquestionably foreclosed.\" ", "A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised. In order to apply these guidelines, inter alia, the following questions may be asked and answered, (a) is there something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence?; and (b) are the circumstances of the crime such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender? ", "Another decision which illuminatingly deals with the question of death sentence is case (supra). ", "In (supra) and (supra) cases the guidelines which are to be kept in view when considering the question whether the case belongs to the rarest of the rare category were indicated. ", "In case (supra) it was observed: (SCC p. 489, para 39) The following questions may be asked and answered as a test to determine the 'rarest of the rare' case in which death sentence can be inflicted:- ", "(a) Is there something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence? ", "(b) Are the circumstances of the crime such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender? ", "The following guidelines which emerge from case (supra) will have to be applied to the facts of each individual case where the question of imposition of death sentence arises: (SCC p. 489, para 38):- ", "(i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability. ", "(ii) Before opting for the death penalty the circumstances of the `offender' also require to be taken into consideration along with the circumstances of the `crime'. ", "(iii) Life imprisonment is the rule and death sentence is an exception. Death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances. ", "(iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised. ", "In rarest of rare cases when collective conscience of the community is so shocked that it will expect the holders of the judicial power centre to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty, death sentence can be awarded. The community may entertain such sentiment in the following circumstances: ", "(1) When the murder is committed in an extremely brutal, grotesque, diabolical, revolting or dastardly manner so as to arouse intense and extreme indignation of the community. ", "(2) When the murder is committed for a motive which evinces total depravity and meanness; e.g. murder by hired assassin for money or reward or a cold-blooded murder for gains of a person vis-`-vis whom the murderer is in a dominating position or in a position of trust, or murder is committed in the course for betrayal of the motherland. ", "(3) When murder of a member of a Scheduled Caste or minority community etc., is committed not for personal reasons but in circumstances which arouse social wrath, or in cases of 'bride burning' or `dowry deaths' or when murder is committed in order to remarry for the sake of extracting dowry once again or to marry another woman on account of infatuation. ", "(4) When the crime is enormous in proportion. For instance when multiple murders, say of all or almost all the members of a family or a large number of persons of a particular caste, community, or locality, are committed. (5) When the victim of murder is an innocent child, or a helpless woman or old or infirm person or a person vis-`-vis whom the murderer is in a dominating position or a public figure generally loved and respected by the community. ", "If upon taking an overall global view of all the circumstances in the light of the aforesaid propositions and taking into account the answers to the questions posed by way of the test for the rarest of rare cases, the circumstances of the case are such that death sentence is warranted, the court would proceed to do so. ", "A convict hovers between life and death when the question of gravity of the offence and award of adequate sentence comes up for consideration. Mankind has shifted from the state of nature towards a civilized society and it is no longer the physical opinion of the majority that takes away the liberty of a citizen by convicting him and making him suffer a sentence of imprisonment. Award of punishment following conviction at a trial in a system wedded to the rule of law is the outcome of cool deliberation in the court room after adequate hearing is afforded to the parties, accusations are brought against the accused, the prosecuted is given an opportunity of meeting the accusations by establishing his innocence. It is the outcome of cool deliberations and the screening of the material by the informed man i.e. the Judge that leads to determination of the lis. ", "The principle of proportion between crime and punishment is a principle of just desert that serves as the foundation of every criminal sentence that is justifiable. As a principle of criminal justice it is hardly less familiar or less important than the principle that only the guilty ought to be punished. Indeed, the requirement that punishment not be disproportionately great, which is a corollary of just desert, is dictated by the same principle that does not allow punishment of the innocent, for any punishment in excess of what is deserved for the criminal conduct is punishment without guilt. ", "The criminal law adheres in general to the principle of proportionality in prescribing liability according to the culpability of each kind of criminal conduct. It ordinarily allows some significant discretion to the Judge in arriving at a sentence in each case, presumably to permit sentences that reflect more subtle considerations of culpability that are raised by the special facts of each case. Judges in essence affirm that punishment ought always to fit the crime; yet in practice sentences are determined largely by other considerations. Sometimes it is the correctional needs of the perpetrator that are offered to justify a sentence. Sometimes the desirability of keeping him out of circulation, and sometimes even the traffic results of his crime. Inevitably these considerations cause a departure from just desert as the basis of punishment and create cases of apparent injustice that are serious and widespread. ", "Proportion between crime and punishment is a goal respected in principle, and in spite of errant notions, it remains a strong influence in the determination of sentences. The practice of punishing all serious crimes with equal severity is now unknown in civilized societies, but such a radical departure from the principle of proportionality has disappeared from the law only in recent times. Even now a single grave infraction that is thought to call for uniformly drastic measures. Anything less than a penalty of greatest severity for any serious crime is thought then to be a measure of toleration that is unwarranted and unwise. But in fact quite apart from those considerations that make punishment unjustifiable when it is out of proportion to the crime, uniformly disproportionate punishment has some very undesirable practical consequences. ", " Section 85 deals with act of a person incapable of judgment by reason of intoxication caused against his will. As the heading of the provision itself shows, intoxication must have been against his will and/or the thing which he intoxicated was administered to him without his knowledge. There is no specific plea taken in the present case about intoxicant having administered without appellant's knowledge. The expression \"without his knowledge\" simply means an ignorance of the fact that what is being administered to him is or contains or is mixed with an intoxicant. The defence of drunkenness can be availed of only when intoxication produces such a condition as the accused loses the requisite intention for the offence. The onus of proof about reason of intoxication due to which the accused had become incapable of having particular knowledge in forming the particular intention is on the accused. Basically, three propositions as regards the scope and ambit of Section 85 are as follows: ", "(i) The insanity whether produced by drunkenness or otherwise is a defence to the crime charged; ", "(ii) Evidence of drunkenness which renders the accused incapable of forming the specific intent essential to constitute the crime should be taken into account with the other facts proved in order to determine whether or not he had this intent; and ", "(iii) The evidence of drunkenness falling short of a proved incapacity in the accused to form the intent necessary to constitute the crime and merely establishing that his mind is affected by drink so that he more readily give to some violent passion, does not rebut the presumption that a man intends the natural consequences of his acts. ", "In the instant case, the plea of drunkenness can never be an excuse for the brutal, diabolic acts of the accused. and have rightly treated the case to be one falling in rarest of rare category thereby attracting the death sentence. ", "The brutal acts done by the accused-appellant are diabolic in conception and cruel in execution. The acts were not only brutal but also inhuman with no remorse for the same. Merely because he claims to be a drunk at the relevant point of time, that does not in any way get diluted not because of what is provided in Section 85 but because one after another five lives were taken and that too of four young children. This case squarely falls under the rarest of rare category to warrant death sentence. ", "The appeal deserves dismissal which we direct."], "relevant_candidates": ["0000009122", "0000307021", "0000307495", "0000425869", "0000545301", "0001388203", "0001496005", "0001505859", "0001585519", "0001718159", "0001945016"]} {"id": "0001971819", "text": ["ORDER ", "1. Two learned Judges of this Court in CST v. , held that Explanation II to of the UP. Sales Tax Act, 1948 could not be given retrospective effect. The attention of the Bench was not drawn to the earlier judgment of a Bench of four learned Judges of this Court in ., where this provision was held to be retrospective. For the purposes of these appeals, it is relevant to consider whether or not the said Explanation has retrospective effect. It is appropriate, in the circumstances, that the appeals should be heard by a Bench of five learned Judges. The papers shall be placed before the Hon'ble the Chief Justice for appropriate directions."], "relevant_candidates": ["0174910953"]} {"id": "0001979210", "text": ["CASE NO.: Appeal (civil) 12845 of 1996 PETITIONER: . Vs. RESPONDENT: & ORS. DATE OF JUDGMENT: 21/02/2001 BENCH: S. Rajendra Babu & . JUDGMENT: ", "J U D G M E N TL...I...T.......T.......T.......T.......T.......T.......T..J RAJENDRA BABU, J. : ", "The first respondent, which is , filed a complaint against the appellant for unfair labour practices under Section 28 of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 (for short the Act) under Item 1(a) by way of victimisation; (b) not in good faith, but in the colourable exercise of the employers right; (d) for patently false reasons; and (f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste of Scheduled IV of the Act. Before at Bombay it was claimed by the respondent herein that the statutory duty of the appellant is not only to keep the factory premises clean, hygienic and dust free but also the surroundings thereof in terms of Schedule M of Drugs & Cosmetics Act , 1940 and the employees engaged for such process are, therefore, employees of the company itself; that, in fact, the appellant had been directly employing the workmen to attend such work and the appellant used to appoint such persons on casual or temporary basis and terminate their services from time to time with a view to depriving them of the permanent status and wages and other benefits as applicable to permanent workmen of the appellant; that this situation continued till the year 1990-91 when such casual or temporary workmen engaged in cleaning process joined the respondent-Union in order to protect their rights for permanency in the appellant-company; that since about 1991 the appellant has been engaging persons but on paper they are shown as contract workmen working for contractor, respondent No. 2 herein; that the second respondent is only a name lender whereas the appellant is the real employer of the workmen; that the appellant through the second respondent terminated the services of such workmen employed through second respondent the moment the persons completed 11 months of services thereby depriving them of the status of permanent workmen; that the entire effort being made to avoid giving permanency to the workmen concerned with sanitation, sweeping and in keeping the factory premises and surrounding thereof in a hygienic condition. It is further alleged that there are about 30 such workmen who were engaged in such activities; that in keeping with the past practice, the respondent had reasons to apprehend that the moment any of the workmen completes 11 months of service, the services of such employee would be terminated. It is submitted on behalf of the respondent that the recruitment of such workmen is done by the appellant and upon selection such workmen are sent to appellants doctor for medical check up. However, they are not given any appointment letters but are given attendance cards by the second respondent only to show that they are the employees of the second respondent and not that of the appellant. They claimed that they are the workmen working under the direct supervision, control and direction of the officers of the appellant who assign work to them and they are granted leave by the officers of the appellant and are also paid by the appellant; that the company is the real employer apart from being the employees because of statutory obligation of the company to employ such workmen; that, however, the appellant denied the relationship of employer-employee from various stages; that such denial of relationship is only to deprive the workmen of permanency in the company and payment of wages as are applicable to the permanent workmen of the company; that the company has denied this relationship as employer and thus this cause of action has arisen in this complaint; that the appellant has engaged in unfair labour practices in terms of Act and it be directed to cease and desist from continuing to do so. ", "The appellant, apart from denying that it is guilty of unfair labour practices under Items 1(a), (b), (d) and (f) of Scheduled IV of the Act, contended that the persons listed in Exhibit A and referred to in the complaint are not the employees of the company nor are they employed ostensibly through the second respondent. The appellant categorically denied that they are the employees of the company and there has never been any employer-employee relationship between them and, therefore, the question of terminating the services of the employees employed by the second respondent would not arise. The appellant contended that since it is engaged in the manufacture of pharmaceutical products for which a high degree of cleanliness and hygiene is required to be maintained and, therefore, it is necessary for the company to seek the services of the specialised agencies and this practice has been in vogue for several years and in the last eight year such services have been obtained from three different agency and they are (i) , (ii) and (iii) . The second respondent had been engaged as an agency for rendering house- keeping and hygiene services and the terms of the engagement were set out in a letter dated 28.2.1992. Pursuant to such rendering of services the second respondent had engaged services of the persons named in Exhibit A. The appellant contended that the named persons in the Exhibit A to the complaint are those who have joined the second respondent only during the last 3 to 8 months. The appellant denied that it interviewed and selected the persons to be employed by the second respondent, but it was expected that persons employed by the second respondent were subjected to periodical medical examination in order to comply with the statutory requirements for maintaining proper hygiene integrity of the manufacturing processes of the company. It is also denied by the appellant that the workmen are working under the direct control and supervision of the officers of the company and there is any employer-employee relationship between them. It was submitted that the second respondent pays wages to those employees in accordance with or more than the minimum wages. It is also contended that the appellant has obtained registration as required under the earlier Act and the copy of which was produced in the proceedings. The second respondent supported the contentions made by the appellant. ", " on the basis of these pleadings framed the following issues: ISSUES@@ JJJJJJ ", "1. Does the complainant prove that the company indulged in unfair labour practices as alleged ? ", "2. ---------deleted--------- ", "3. Does he prove that he is entitled the relief as prayed for? ", "4. What order ? ", "ADDITIONAL ISSUES 3A. Whether the complaint is maintainable? 3B. Whether the complainant prove that the names in Annexure A are the workmen of the Respondent No.1? 3C. Whether this has jurisdiction to entertain the complaint? ", ", after elaborate consideration of the pleadings and evidence on record, came to the following@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ conclusion:@@ JJJJJJJJJJJ It can be seen from the evidence on record and the documents filed by the parties that different contractors engaged by the first respondent company and these workmen had never worked in the first respondent company but they had worked through second respondent. Hence, the arrangement between the respondent No. 1 & 2 can be said to be legal and bonafide. The second respondent has also obtained licence No. 2796 under the provisions of Contract Labour (Regulation & Abolition) Act, 1971 which is at Exh.C-14 at page 5. The respondent No. 2 has its own separate and independent establishment which has been registered under the provisions of Bombay Shops and Establishment Act , 1948. It is also independently and separately registered under the provisions of Employees Provident Fund and Miscellaneous Provisions Act . These documents are produced At Sr.No.10 of Exh.C-14. From these documents, it is crystal clear that it is a separate entity and there is a contract between the first respondent and second respondent in respect of sweeping and cleaning in the company premises. ", "After further examination, it was held that the arrangement between the appellant and the second respondent can only be termed as legal and bona fide and hence the matter of abolition of contract labour in the process of house-keeping and maintenance of the premises of the factory can be agitated only under the provisions of Contract Labour (Regulation and Abolition) Act, 1970. Therefore, dismissed the complaint filed by the first respondent-Union. When the matter was carried by revision under the Act dismissed the revision application by reiterating the views of . ", "In the writ petition of took a different view of the matter and allowed the complaint. Before several decisions were referred to including the decision of this Court in ., 1995 Supp. (1) SCC 175. In that case the complaint of the was that 21 workmen who were working in one of the canteens of the respondent-company were not given the service conditions as were available to the other workmen of the company and there was also a threat of termination of their services. This Court proceeded to consider the case on the basis that their complaint was that the workmen were the employees of the company and, therefore, the breach committed and the threats of retrenchment were cognizable by or under the Act. Even in the complaint no case was made out that the workmen had ever been accepted by the company as its employees. On the other hand, the complaint proceeded on the basis as if the workmen were a part of the work force of the company. This Court noticed that the workmen were never recognised by the company as its workmen and it was the consistent contention of the company that they were not its employees. In those circumstances, having dismissed the complaint and having upheld the same, this Court stated that it was not established that the workmen in question were the workmen of the company and in those circumstances, no complaint could lie under the Act as was held by the two courts. In that case it was the admitted position that the workmen were employed by a contractor, who was given a contract to run the canteen in question. Thereafter, adverted to the decision of this Court in ., 1995 (5) SCC 27, wherein it was noticed that the first question to be decided would be whether an industrial dispute could be raised for abolition of the contract labour system in view of the provisions of the Act and, if so, who can do so. was of the view that the decision in . (supra) would make it clear that such a question can be gone into and that the observations would not mean that the workmen had to establish by some other proceedings before the complaint is filed or that if the complaint is filed, the moment the employer repudiates or denies the relationship of employer and employees the court will not have any jurisdiction. The observation of this Court that it is open to the workmen to raise an appropriate industrial dispute in that behalf if they are entitled to do so has to be understood in the light of the observations of this Court made earlier. further held that the judgment in . (supra) was confined to the facts of that case. On that basis proceeded to further consider the matter and reversed the findings recorded by the two courts and gave a finding that the workmen in question are the workmen of the appellant-company. ", "In this Court it was submitted that had proceeded entirely on wrong lines. (supra) the question raised was whether the workers whose services were engaged by the contractors but who were working in the thermal power station of at Ukai can legally claim to be the employees of . The industrial tribunal had adjudicated the matter and held that the workmen concerned in the reference could not be the workmen of the contractors and, therefore, all the workmen employed by the contractor should be deemed to be the workmen of the . The industrial tribunal also gave consequential directions to the for payment of wages, etc. The award of the industrial tribunal was upheld by in appeal. The contention put forth before this Court was that after coming into force of the Act it is only the appropriate Government, which can abolish the contact labour system after consulting the Central or the State , as the case may be, and no other authority including the industrial tribunal has jurisdiction either to entertain such dispute or to direct abolition of the contract labour system and neither the appropriate Government nor the industrial tribunal has the power to direct that the workmen of the erstwhile contractor should be deemed to be the workmen of the . or the industrial tribunal, as the case may be, can only direct the abolition of the contract labour system as per the provisions of the Act but it does not permit either of them to declare the erstwhile workmen of the contract to be the employees of the principal employer. As to what would happen to an employee engaged by the contractor if contract employment is abolished is another moot question yet to be decided by this Court. But that is not a point on which we are called upon to decide in this matter. ", "contract covered by But one thing is clear - if the employees are working under a the Contract Labour (Regulation & Abolition) Act then it is clear that the labour court or the industrial adjudicating authorities cannot have any jurisdiction to deal with the matter as it falls within the province of an appropriate Government to abolish the same. If the case put forth by the workmen is that they have been directly employed by the appellant- company but the contract itself is a camouflage and, therefore, needs to be adjudicated is a matter which can be gone into by appropriate industrial tribunal or labour court. Such question cannot be examined by the labour court or the industrial court constituted under the Act. The object of the enactment is, amongst other aspects, enforcing provisions relating to unfair labour practices. If that is so, unless it is undisputed or indisputable that there is employer-employee relationship between the parties, the question of unfair practice cannot be inquired into at all. The respondent union came to with a complaint that the workmen are engaged by the appellant through the contractor and though that is ostensible relationship the true relationship is one of master and servant between the appellant and the workmen in question. By this process, workmen repudiate their relationship with the contractor under whom they are employed but claim relationship of an employee under the appellant. That exercise of repudiation of the contract with one and establishment of a legal relationship with another can be done only in a regular industrial tribunal/court under the I.D.Act. ", ", the learned senior Advocate appearing for the respondent, submitted that under Section 32 of the Act the labour court has the power to decide all matters arising out of any application or complaint referred to it for the decision under any of the provisions of the Act. Section 32 would not enlarge the jurisdiction of the court beyond what is conferred upon it by other provisions of the Act. If under other provisions of the Act the industrial tribunal or the labour court has no jurisdiction to deal with a particular aspect of the matter, Section 32 does not give such power to it. In the cases at hand before us, whether a workmen can be stated to be the workman of the appellant establishment or not, it must be held that the contract between the appellant and the second respondent is a camouflage or bogus and upon such a decision it can be held that the workman in question is an employee of the appellant establishment. That exercise, we are afraid, would not fall within the scope of either Section 28 or Section 7 of the Act. In cases of this nature where the provisions of the Act are summary in nature and give drastic remedies to the parties concerned elaborate consideration of the question as to relationship of employer-employee cannot be gone into. If at any time the employee concerned was indisputably an employee of the establishment and subsequently it is so disputed, such a question is an incidental question arising under Section 32 of the Act. Even the case pleaded by the respondent-Union itself is that the appellant establishment had never recognised the workmen mentioned in Exhibit A as its employees and throughout treated these persons as the employees of the second respondent. If that dispute existed throughout, we think, the labour court or the industrial court under the Act is not the appropriate court to decide such question, as held by this Court in . (supra), which view was reiterated by us in ., 2001 (1) SCALE 82. ", "However, very strenuously contended, by adverting to the scope of the Payment of Wages Act , 1936 and the scope of Section 32C(2) of the Industrial Disputes Act, that these questions can be gone into by the courts and, in this context, he relied upon the decision of in , , 59 BLR 892. In determining whether the wages had been appropriately paid or not, the authority under the Payment of Wages Act was held to have jurisdiction to decide the incidental question of whether the applicant was in the employment of the railway administration during the relevant period. It means that at one time or the other the concerned employee was indisputably in employment and later on he was found to be not so employed and in those circumstances, the court stated that it was an incidental question to be considered. ", " v. Next decision relied upon by is , 1964 (3) SCR 140, to contend that even in cases arising under Section 33C(2) of the Industrial Disputes Act the scope, though very limited, certain incidental questions can be gone into like a claim for special allowance for operating adding machine which may not be based on the Sastry Award made under the provisions of Chapter V-A. The learned counsel pointed out that in the event we were to hold that it is only in clear cases or undisputed cases the labour court or the industrial tribunal under the Act can examine the complaints made thereunder, the whole provision would be rendered otiose and in each of those cases provisions of the Bombay Industrial Relations Act, 1946 or the Industrial Disputes Act will have to be invoked. We are afraid that this argument cannot be sustained for the fact that even in respect of claims arising under Section 33C(2) appropriate dispute can be raised in terms of Section 10 of the Industrial Disputes Act and that has not been the position in the present case. Nor can we say that even in cases where employer-employee relationship is undisputed or indisputably referring to the history of relationship between the parties, dispute can be settled and not in a case of the present nature where it is clear that the workmen are working under a contract. But it is only a veil and that will have to be lifted to establish the relationship between the parties. That exercise, we are afraid, can also be done by the industrial tribunal under the Bombay Industrial Relations Act, 1946 or under the Industrial Disputes Act . Therefore, we are afraid that the contention advanced very ably by on behalf of the respondents cannot be accepted. Therefore, we hold that went far beyond the scope of the provisions of the Act and did not correctly understand the decisions of this Court in (supra) and . (supra). The correct interpretation of these decisions will lead to the result, which we have stated in the course of this order In the view we have taken on the question of jurisdiction of under the Act, the decision given by on other questions need not be considered. ", "In the circumstances, we allow this appeal, set aside the order of and restore that of the industrial court affirming the order of the labour court. No costs. ", "[ ] [S.N. Phukan]@@ JJJJJJJJJJJJJ FEBRUARY 21, 2001."], "relevant_candidates": ["0000130103", "0000199139", "0000366376", "0001087177", "0001679740"]} {"id": "0001988443", "text": ["ORDER , C.J. ", "1. These references made by Income-tax Appellate , New Delhi (in short, the ) involve identical points for adjudication in relation to Sir Shri Ram Foundation, hereinafter referred to as assessed for the assessment years 1971-72, 1972-73 and 1974-1974. Following question has been referred under Section 256(1) of the Income-tax Act, 1961 (in short, the Act) \"Whether on the facts and in the circumstances of the case the was correct in law to give a finding that the assessed was not covered by section 13(2)(h) of the Income-tax Act or any other provision of Section 13 and thereby allowing its claim for exemption from tax of its dividend income u/s 11 of the Income-tax Act .\" ", "2. Factual position in a nutshell is as follows: ", "assessed is a public charitable trust which was originally registered as a society under the name \"\" under the Societies Registration Act , 1860 on 7-5-1941. Name of the trust was changed to its present name \"Sir Foundation\" as per certificate of registration dated 30-5-1963 granted by the Registrar of Societies. There were seven subscribers to the Memorandum of Association of whom three, namely, Sir , and constituted . On 10-2-1955, donated to the 200 shares of (hereinafter referred to as '') of the face value of Rs. 100/- each. On the said date also donated 90 shares of . In respect of these 290 shares received as donation by the , issued 870 bonus shares and thus the came to hold 1160 shares of . The total shareholding of consisted of 19,997 shares, of which 11359 shares were held by relatives of and who were the founder members of the and were treated by the revenue authorities as \"excluded persons\" in terms of clause (b) of Section 13(3) of the Act. Thus the percentage of shares held by excluded persons came to 56.79% while that of shares held by the worked out to 5.8%. ", "3. On being moved for reference, question, as set out above, has been referred for opinion of this Court. We have heard the learned counsel for revenue and for the assessed. ", "4. Stand of the learned counsel for the is that there is scope for misuse and evasion of tax if interpretation given by the is accepted. The language of the provisions, according to him, shows that the amount must have remained invested for a specific period and merely because, for the sake of argument, it can be said that originally the amount was not invested by the assessed yet when it remained invested subsequently, the provision of Section 13(2)(h) are applicable. The stress, according to him, is on the concern and not on the funds invested, except that it should remain invested in the concern. Learned counsel for the assessed, on the other hand, submitted that the language used as \"funds\" which must have been invested. If it was originally not invested the question of funds remaining invested in the manner suggested by the learned counsel for is not borne out from the statute. ", "5. In order to appreciate rival submissions, the relevant provisions need to be noted. Sections 11 , 12 and 13(2)(h) at the relevant time read as follows: ", "\"Section 11(1) Subject to provisions of sections 60 and 63 , the following income shall not be included in the total income of the previous year of the person in receipt of the income- ", "(a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India, and, where any such income is accumulated or set apart for application to such purposes in India, to the extend to which the income so accumulated or set apart is not in excess of twenty-five per cent of the income from such property: ", "12. any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes ( not being contributions made with a specific direction that they shall form part of the corpus If the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and Section 13 shall apply accordingly. ", "13.(1) Nothing contained in Section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof- ", "(a) *** *** *** ", "(b) *** *** *** ", "(c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof- ", "(i) *** *** *** ", "(ii) if any part of such income or any property of the trust or the institution ( whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub-section(3) *** *** *** *** *** *** (2) Without prejudice to the generality of the provisions of clause (c) and clause(d) of sub-section (1) the income or the property of the trust or institution or any part of such income or property shall, for the purposes of that clause, be deemed to have been used or applied for the benefit of a person referred to in sub-section(3),- ", "*** *** *** *** *** *** ", "(h) if any funds of the trust or institution, are or continue to remain, invested for any period during the previous year (not being a period before the 1st day of January, 1971) in any concern in which nay person referred to in sub-section (3) has a substantial interest.\" ", "6. A similar issue had come up before various High Courts and there is unanimity in the view, as that taken by the . In construing the provisions of Section 13(2)(h) , the expression \"funds\" has to be understood in the context of the provision and not only with reference to dictionaries or to commercial parlance or to the principles of accountancy. It is to be noted that the expression used is \"funds\" and not \"fund\". \"Funds\" means money in hand or cash according to some dictionaries. This, according to us, would be the proper meaning to be attributed to the expression \"funds\" as appearing in the provision. The fundamental requirement of Section 13(2)(h) is that there must be investment of funds of a trust. If any expanded meaning is given to include assets other than money in hand or cash or credit balance in a bank account, it is evident that they are not capable of being invested as such. Other assets of the trust apart from money in hand or cash or balance in bank will have to be converted into money or cash before the same can be invested, as was observed by in , 170 ITR 150. The expression \"invest\" connotes a positive act on the part of the trust whereby the funds of the trust are laid out or committed in any particular property or business or transaction with the object of earning a profit or financial advantage or return. What is contemplated is that the trust having assets in the form of money or cash or balance in a bank or any other form capable of being invested or by a positive act and pursuant to a decision of the trust was laid out or committed in a concern of a nature specified before it can be held that such an investment comes within the mischief of Section 13(2)(h) . ", "7. The meaning of expression \"funds\" given in the standard dictionaries are as follows: ", "\"Black's Law dictionary, Fifth Edition: 'Fund'...An asset or group of assets set aside for a specific purpose...... ", "A generic term and all-embracing as compared with term 'money' etc which is specific. A sum of money or other liquid assets set apart for a specific purpose or available for the payment of debts or claims. In the plural, this word has a variety of slightly different meanings, as follows: moneys and much more, such a notes, bills, cheques, drafts, stocks and bonds, and in broader meaning may include property of every kind... Money in hand, assets, cash, money available for the payment of a debt, legacy, etc. Corporate stocks or government securities; in this sense usually spoken of as the 'funds'. Assets, securities, bonds or revenue of a or appropriated for the discharge of its debts. Generally, working capital, sometimes used to refer to cash or to cash and marketable securities.\" ", "\"(b) Dictionary for Accountants, 4th Edn., by : ", "\"1.An asset or group of assets within any organisation, separated physically or in the accounts or both from other assets and limited to specific uses. Examples: a petty cash or working fund; a replacement and renewal fund; an accident fund; a contingent fund; a pension fund. ", "Example: a trust fund created by a will; an endowment fund; a sinking fund. ", "4.Pl. Current assets less current liabilities (on an accrual basis); working capital; a term used in cash flow statement. ", "5. Pl: cash (pp.204-208).\" ", "Chambers' Twentieth Century Dictionary, New Edn. ", "'Fund: n.a sum or money or which some enterprise is founded or expense supported: a supply or source of money': ", "The Concise Oxford dictionary, 5th Edn.,: ", "'Fund n.1 Permanent stock of something ready to be drawn upon-stock of money- pecuniary resources'. ", "Webster's Seventh New Collegiate Dictionary--based on Webster's Third New International Dictionary (p.538) : ", "'Fund. 1 an available quantity of material or intangible resources; supply; 2. a sum of money or other resources the principal or interest of which is set apart for a specific objective. ", "The expression 'invest' in the said Section 13(2)(h) is used as a verb and the meaning of the said expression in the standard dictionaries is as follows: ", "'s Twentieth Century dictionary, New Edn. ", "\"...to lay out for profit as by buying property, shares, etc\" ", "The Concise Oxford dictionary, 5th ed., '... lay out money on, as (invest) in a car'. ", "Webster's Seventh New Collegiate Dictionary: ", "'vb. Vt 1: to commit ( money) in order to earn a financial return; 2 to make use of for future benefits or advantage,-- vt. To make an investment.\" ", "\"In general.--The word has a variety of meanings, but the sense in which it is employed must be gathered from the context. It is not a legal term with a settled meaning but it is a term in common use, suggesting money, in common speech, although technically it may be employed to cover other articles of value, for the term 'fund' or 'funds' is generic and all embracing as compared with the term money, etc which is specific...\" In the plural. \"Capital : cash, money or moneys; money and negotiable paper immediately or readily convertible into cash, available pecuniary resources; money in hand or available for the payment of a debt, legacy, etc.; specie, or a stock of convertible wealth; and 'funds' may mean or include not only money, as the term is generally understood, but other circulating medium or instrument or tokens in general use in the commercial world as the representatives of value, such as bank notes, bills, cheques, drafts, notes, stocks and bonds, deposits or certificates of deposit, evidences of money lent to the Government, constituting a national debt, for which interest is paid at prescribed intervals...\" ", "Corpus Jurisdiction Secundum Vol. xxxvII \"In General.--The word has a variety of meanings, but the sense in which it is employed must be gathered from the context. It is not a legal term with a settled meaning, but it is a term in common use, suggesting money, in common speech, although technically it may be employed to cover other articles of value, for the term \"fund\" or \"funds\" is generic and all embracing as compared with the term 'money', etc. which is specific...\" in the plural, \"capital: cash, money, or moneys; money and negotiable paper immediately or readily convertible into cash, available pecuniary resources; money in hand or available for the payment of a debt, legacy, etc specie, or a stock of convertible wealth; and 'funds' may mean or include not only money, as the term is generally understood, but other circulating medium or instrument or tokens in general use in the commercial world as the representatives of value, such as bank notes, bills, cheques, drafts, notes, stocks and bonds, deposits or certificates of deposit, evidences of money lent to the Government, constituting a national debt, for which interest is paid at prescribed intervals..\" ", " , , it was observed that word \"fund\" may mean actual cash resources of a particular kind (e.g. money in a drawer or in a bank or it may be a mere accountancy expression used to describe a particular category which a person uses in making up his accounts. Similar view was expressed in v. (1942) 2 KB 228. The expression \"fund\" or \"funds\" has a variety of meanings but the sense in which it is employed must be gathered from the context. It would not be correct to adopt a strictly literal or technical meaning of this expression while construing section 13(2)(h) . In other words, we must not construe that provision mechanically. We must construe it having regard to the object which the had in view in enacting it and in the context of the setting in which it occurs. That provision came to be inserted in the Act by the Finance Act , 1970. On a plain reading of that provision, it is clear that clause (h) of sub-section (2) of Section 13 covers investment of the trust funds in any concern in which any of the persons specified in sub-section (3) have substantial interest (\"specified persons\" in short) and if such investment of the trust funds is made after December, 31, 1970, it would result in forfeiture of exemption from tax. However, if the trust funds have already been invested in any concern as aforesaid before January 1, 1971 exemption would be forfeited if the funds continued to remain so invested even after December 31, 1970. The object of the above provision is to discourage investment of trust funds in the concerns in which specified persons have substantial interest and if an investment is already made in such concerns, to discourage continuance thereof after December 31, 1970. In order to attract the provisions of Section 13(2)(h) , what is essential is that the funds of the trust are invested in a concern covered by Section 13(2)(c) and if such investment is made prior to January 1, 1971, funds are continued to be not invested after December 31, 1970. It is only if the funds of the trust itself are under Section 11 . The funds have to be such as are capable of investment. Therefore, in order to attract Section 13(2)(b) , it has to be established that the funds of the trust which are capable of being invested have been utilised for making investment as provided therein. When the funds of the trust are so invested and such investment is continued after December 31, 1970, the trust whose funds are so invested will not be entitled to claim exemption under Section 11 . Above position has been elaborately dealt with by in (1988) 173 ITR 248. ", "9. The word investment means to lay out money in business with a view to obtain income or profit. In order to constitute an investment the amount laid down should be capable of resulting in an income or return or profit to the investor and in every case of investment, the intention and positive act on the part of the investor should be to earn such income, return or profit to the investor. In order to constitute an investment, the money shall be laid out in such manner, as to acquire some species of property which bring in an income to the investor. An investment popularly means every application of money which is intended to fetch return by way of interest income or profit. This only employed as capital in a business is money invested in business. (, in Tax Commissioner v. (1902) 22 NZLR 445. In v. 21 WR Eng 155 it was observed that in its most comprehensive sense it is generally understood to signify the laying out of money in such a manner that it produces a revenue. An illuminating observation was made in IRC v. (1946) 1 All ER 57(CA) about what \"investment\" means. It was observed that the word \"investment\" is not a word of art, but has to be interpreted in a popular sense. It is not capable of legal definition, but a word of current vernacular. The words \"invest\" and \"investment\" are to be taken in the business sense of laying out of money for interest or profit. ", "10. The plea similar to the one taken by the learned counsel for was raised before in trust, (1944) 207 ITR 108. There also it was pleaded that the expression 'continued to remain' qualifies the expression 'in any concern' whether it was an investment or not. The plea was rejected by . It was observed that it would be doing violence to the plain language of the provision. Section 13(2)(h) requires that the funds of the trust are, or continue to remain invested in any concern of the nature mentioned therein. ", "(underlined for emphasis) ", "11. The interpretation suggested by learned counsel for would do violence to the plain language used. The dictum of as quoted with approval by in v. IR [1921] 1 KB 64, which has become locus classics can be aptly applied to the facts of the case. Following the illuminating words were used by the learned Judge: \"In a taxing act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used\" The position has been reiterated time and again by . (See. , , , , ). ", "12. As indicated above, several High Courts have taken the view expressed by in case (supra). ( ; trust (2000) 240 ITR 513 (Cal); trust (1993) 203 ITR 349 (Guj); trust (1994) 209 ITR 865 (Guj). , (1994) 209 ITR 390 (Guj); trust, ; Trustees of Mangaldas N Verma Charitable trust v. CIT ; trust (1994) 207 ITR 1053 (Bom). ", "13. It appears that SLP'S filed against judgments of and in (Supra) and (supra) have been dismissed (See, (1995) 212 ITR (st) 369 (SC) and (1995) 212 ITR (St) 366 (SC) respectively). ", "14. The inevitable conclusion from the analysis made above is that the was justified in its view. Accordingly, we answer the question referred in the affirmative in favor of the assessed and against revenue."], "relevant_candidates": ["0000042052", "0000412256", "0000434894", "0000450563", "0000566292", "0000625579", "0000713954", "0000742753", "0000752334", "0000789425", "0001092479", "0001139160", "0001231997", "0001461059", "0001642889"]} {"id": "0001997407", "text": ["PETITIONER: ASRUMATI DEBI Vs. RESPONDENT: KUMAR RUPENDRA DEB RAIKOT AND OTHERS. DATE OF JUDGMENT: 27/02/1953 BENCH: , B.K. BENCH: , B.K. SASTRI, (CJ) BOSE, VIVIAN BHAGWATI, NATWARLAL H. CITATION: 1953 AIR 198 1953 SCR 1159 CITATOR INFO : RF 1965 SC 507 (19) RF 1970 SC 891 (5) R 1971 SC2337 (4) R 1974 SC1719 (11,12,13,14) RF 1981 SC1786 (73,99,139,152) R 1988 SC1531 (63) ACT: Letters Patent (), cls. 13, 15-Order for transfer of suit under cl. 13-Whether \" judgment\"- Appealability -meaning of \"judgment\". HEADNOTE: An order for transfer of a suit, made under clause 13 of the Letters Patent of the is not a \"judgment\" within the meaning of clause 15 of the Letters Patent and no appeal lies therefrom under the Letters Patent, as it neither affects the merits of the controversy between the parties in the suit itself, nor terminates or disposes of the suit on any ground. [Meaning of the word \"judgment\" discussed]. . 47 Cal. 1104), Justices of the Peace for Calcutta v. (8 Beng. L.R. 433), v. (I.L.R. 13 Rang. 457), . 35 Mad. 1), v. (I.L.R. 48 Cal. 857), v. (29 C.L.J. 225), v. (39 C.W.N. 156), v. (A.I.R. 1945 Nag. 156), v. (A.I.R. 1948 Nag. 85), v. (I.L.R. 57 All. 983), v. (I.L.R. 23 1160 Lab. 491), v. (9 Bom. H.C.R. 398) and v. (I.L.R. 29 Bom. 249) referred to. . 47 Mad. 136) disapproved. JUDGMENT: ", "CIVIL APPELLATE JURISDICTION: Civil Appeal No. 92 of 1952. Appeal by special leave from the Judgment and Order dated 16th May, 1951, of Calcutta ( and ) in Appeal from Original Order No. 136 of 1949 arising out of Judgment and Order dated the 25th April,' 1949, of the said () in Extra- ordinary Suit No. 2 of 1948. ", " (, with him) for the- appellant. ", " (, with him) for the respondent. ", "1953. February 27. The Judgment of the Court was delivered by appeal, which has come before us on special leave, is directed against a judgment of of , dated the 16th May, 1951, by which the learned Judges dismissed an appeal taken against an order, made by a single Judge on the Original Side of that Court,, under clause 13 of the Letters Patent, on the preliminary ground that the appeal was not competent in law. ", "There is no dispute about the material facts of the case which lie with-in a short compass. On 7th August, 1947, a suit was filed by the respondent in at Jalpaiguri in West Bengal,being Title Suit No. 40 of 1947,for recovery of possession of a large estate known as Baikunthapur Raj situated in that district, on the allegation that he, being the eldest son of late , the last holder of the estate, became entitled to the properties on the I death of his father under a custom of the family which excludes all females from inheritance and follows the rule of Iineal primogeniture in matters of succession. died in December, 1946, and , the appellant before us, is admittedly his widow. There was no son born to her and her only child is a daughter named . According to the plaintiff respondent, his mother , who is a Lepcha by birth was another lawfully wedded wife of and was married to the latter in what is known as the \" form. had three sons by this wife, the plaintiff being the eldest. , it is alleged, took possession of the bulk of the properties comprised in the estate on the death of her husband, although she had no legal right to the same and it was to evict her from these properties that this suit was brought. Besides , the plaintiff also impleaded three other agnatic relations of the deceased (who are defendants Nos. 2 to 4) and also his own two younger brothers as defendants to the suit. filed her written statement on January 19, 1948, and the main defence put forward by her was that there was no legal marriage between her husband and the plaintiff's mother, the latter being only one of the several mistresses of her husband. She denied that there was any custom in the family under which females were excluded from inheritance. The defendants 2 to 4 also filed written statements, challenging the legitimacy of the plaintiff and his claim to succession, and put forward their own rights as heirs under the customary law obtaining in the family. On 30th April, 1948, the plaintiff presented an application in of Calcutta under clause 13 of the Letters Patent, praying for transfer of the suit filed in the Jalpaiguri court to to be tried in its Extraordinary Original Civil Jurisdiction. This application was heard by sitting singly and by his order dated the 25th of April, 1949, the learned Judge allowed the application, substantially on the ground that having regard to the atmosphere of prejudice that was created in the locality by supporters of the defendant, who wielded considerable influence in the district, the plaintiff might have a legitimate apprehension that he would not get fair trial in the district court. ", "Against this decision the defendant No. 1 took an appeal to of and the learned Judges ( and ) dismissed the appeal on the ground that the order appealed again was not a 'judgment' within the meaning of clause 15 of the Letters Patent. It is the propriety of this decision that has been challenged before us in this appeal. in holding the appeal before it to be incompetent based its decision entirely upon an earlier pronouncement of a Division Bench of the same court, where it was held by sitting with that an order for transfer of a suit made under clause 13 of the Letters Patent was not a 'judgment' within the meaning of clause 15 (1). Reliance was placed by the learned Judges for this view upon the pronouncement of Sir in the well-known and often cited case of for Calcutta v. (2), where the learned Chief Justice said as follows:- ", "\"We think that 'judgment' in clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final or preliminary, or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined.\" ", "The identical question, whether an order for transfer under clause 13 of the Letters Patent is a 'judgment' for purposes of appeal, was pointedly raised before the Madras and , and while (3) answered the question hi the affirmative, a definitely negative answer was given by (1) . 47 Cal. 1104 (2) 8 Ben. L.R. 433. ", "(3) Vide Krishns Reddi v. , I.L.R 47 Mad. 136. ", "1163 ", " (1). The Madras decision purports to be in accordance with the view enunciated of that court in (2) where Sir sitting with swami and formulated a definition of 'judgment' in a comprehensive manner differing fro the wide interpretation put upon the term in the earlier case of v. (3). \"The test seems me,\" thus observed the learned Chief Justice, \"to be not what is the form of the adjudication, but what is its effect on the suit or proceeding in which it is made. If its effect, whatever its form may be, and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, I think the adjudication is a judgment within the meaning of the clause.\" This decision, it may be pointed out, has not only been adhered to in Madras since then without any comment, but has in several instances manifested a marked leaning towards it (4). ", "On the other hand, a Full Bench(1) of presided over by took 'a view altogether different from that of the Calcutta and the Madras as regards the meaning of the word I judgment' in clause 13 of the Rangoon Letters Patent, which corresponds to clause 15 of the Letters Patent of the Calcutta and Madras . It was held by the Full Bench of that the term 'judgment' in the Letters Patent means and is a decree in a suit by which the rights of the ", "-parties in the suit are determined. In other words, 'judgment' is not what is defined in section 2 (9) of the Civil Procedure Code as being the statement given by the judge of the grounds of a decree (1) v. , 13 Rang. 457 (F.B.). (2) 35 M 1 (F.B.). ", "(3) 3 M.H.C.R. 384. ", "(4) Vide Muathura Sundari v. Haran Chandra I.L.R. 43 Cal. 857; Chandi Charan v. 29 C.L.J. 225 at 229 , 39 C.W. N. 155 or order, but is a judoment in its final and definitive sense embodying a decree. A final ' judgment is an adjudication which conclusively determines the rights of the parties with regard to all matters in issue in the suit, whereas a preliminary or interlocutory judgment is a decree by which the right to the relief claimed in the suit is decided but under which further proceedings are necessary before a suit in its entirety can be disposed of. Save and except final and preliminary judgments thus defined, all other decisions are ' orders' and they do not come within the description of I judgments ' under the relevant clause of the Letters Patent. No 'order' is appealable unless an appeal is expressly provided against it by the Civil Procedure code or some other Act of the . In this view an ' order' for transferring a suit from a subordinate court to could not possibly be regarded as a 'judgment', and consequently no appeal would lie against such an order. This definition of ' judgment 'has been accepted in several cases by (1), and substantially this seems to be the view of also (2). of (,'), however, has refused to accept this view and has preferred to follow the tests enumerated by the Calcutta and . accepted the Calcutta view from the very beginning (4). In view of this wide divergence of judicial opinion, it may be necessary for this court at some time or other to examine carefully the principles upon which the different views mentioned above purport to be based and attempt to determine with as much definiteness as possible the true meaning and scope of the word I judgment' as it occurs in clause 15 of the Letters Patent of and in the corresponding clauses of the Letters Patent of the other . We are, however, relieved from embarking (1) v. , A.I.R. 1945 Nag. 156; v. , A.I.R. 1948 Nag. 85. (2) v. , 57 All. 983 (F.B.) (3) v. , I.L.R. 23 Lah. 491, (4) v. , 9 Bom. H.C.R. 398, on such enquiry in the present case as we are satisfied that in none of the views referred to above could an order of the character which we have before us, be regarded as a judgment' within the meaning clause 15 of the Letters Patent. ", ", as said already, defined 'judgment' be a decision which determines some right or liability affecting the merits of the controversy between the parties. It is true that according to the learned Chief Justice an adjudication, in order that it might rank as a 'judgment', need not decide the case on its merits, but it must be the final pronouncement of the court making it, the effect of which is to dispose of or terminate the suit or proceeding. This will be apparent from the following observations made by in the course of his judgment in the case referred to above : ", "\" It is, however, said that this court has already put a wider construction upon the word I judgment' in clause 15 by entertaining appeals in cases where the plaint has been rejected as insufficient, or as showing that the, claim is barred by limitation,, and also in cases where orders have been made in execution. These however are both within the above definition of a judgment, and it by no means follows that, because we hold the order in the present case not to be appealable, we should be bound to hold the same in the cases referred to. For example, there is an obvious difference between an order for the admission of a plaint and an order for its rejection. The former determines nothing, but is merely first step towards putting the case in a shape for determination. The latter determines finally so far as the court which makes the order is concerned that the suit, as brought. will not lie. The decision, therefore, is a judgment in the proper sense of the term .\" ", "It cannot be said, therefore, that according to Sir every judicial pronouncement on a right or liability between the parties is to be regarded as a 'judgment', for in that case there would be any number of judgments in the course of a suit or proceeding, each one of which could be challenged by way of appeal. The judgment must be the final pronounce ment which puts an end to the proceeding so far as the court dealing with it is concerned. It certainly involves the determination of some right or liability, though it may not be necessary that there must be a decision on the merits. This view, which is implied in the observations of Sir C.J. quoted above, has been really made the basis of the definition of I judgment' by Sir in the decision of to which reference has been made (1). According to to find out whether an order is a I judgment ' or not, we have to look to its effect upon the particular suit or proceeding in which it is made. If its effect is to terminate the suit or proceeding, the decision would be a 'judgment' but not otherwise. As this definition covers not only decisions in suits or actions but 'orders' in other proceedings as well which start with applications, it may be said that any final order passed on an application in the course of a suit, e.g., granting or refusing a party's prayer for adjournment of a suit or for examination of a witness, would also come within the definition. This seems to be the reason why the learned Chief Justice qualifies the general proposition laid down above by stating that \"an adjudication on an application, which is nothing more than a step towards obtaining a final adjudication in the suit, is not a judgment within the meaning of the Letters Patent. \" ", "As stated already, it is not our purpose in the present case to frame an exhaustive definition of the word 'judgment' as used in clause 15 of the Letters Patent. We have indicated what the essential features of a I judgment' are according to both the Calcutta and the Madras and all that we need say is that, in our opinion, an order under clause 13 of the Letters Patent does not satisfy the tests of a 'judgment' as formulated by either of these . (1) , 35 Mad, 1, The question that requires determination in an application under clause 13 of the Letters Patent is, whether a particular suit should be removed from any court which is subject to the superintendence of and tried and determined by the latter as a court of extraordinary original jurisdiction. It is true that unless the parties to the suit are agreed on this point, there must arise a controversy between them which has to be determined by the court. In the present case, a single Judge of has decided this question in favour of the plaintiff in the suit; but a decision on any and every point in dispute between the parties to a suit is not necessarily a ' judgment'. The order in the present case neither affects the merits of the controversy between the parties in the suit itself, nor does it terminate or dispose of the suit on any ground. An order for transfer cannot be placed in the same category as an order rejecting a plaint or one dismissing a suit on a preliminary ground as has been referred to by in his observations quoted above. An order directing a plaint to be rejected or taken off the file amounts to a final disposal of the suit so far as the court making the order is concerned. That suit is completely at an end and it is immaterial that another suit could be filed in the same or another court after removing the defects which led to the order of rejection. On the other hand, an order of transfer under clause 13 of the Letters Patent is, in the first place, not at all an order made by the court in which the suit is pending. In the second place, the order does not put an end to the suit which remains perfectly alive and that very suit is to be tried by another court, the proceedings in the latter to be taken only from the stage at which they were left in the court in which the suit was originally filed. Mr. in the course of his arguments placed considerable reliance upon the pronouncement of in (1), where it was held by Court C.J. and (1) 13 Beng, L.R. 91. ", "1168 ", " that an order refusing to rescind leave to sue granted under clause 12 of the Letters Patent was a 'judgment' under clause 15 and could be challenged by way of appeal. This decision was followed by in v. ); and it is argued by Mr. that there is no difference in principle between an order of that description and an order transferring a suit under clause 13 of the Letters Patent. The contention of Mr. undoubtedly receives support from the judgment of in v. ", "Thanikachala(2),where precisely the same line of reasoning was adopted. In our opinion, this reasoning is not sound and there is an essential difference between an order rescinding or refusing to rescind leave to sue granted under clause 12 of the Letters Patent and one removing a suit from a subordinate court to under clause 13 of the Letters Patent, and this distinction would be apparent from the observations of Sir in the Madras case(3) mentioned above, to which sufficient attention does not appear to have been paid by the learned Judges of the same court who decided the later case. Referring to the decision of in v. ), observed as follows: ", "\"As regards the Bombay authorities I may refer to v. Camaji(1), where it was held that an appeal lay from an order dismissing a Judge's summons to show cause why leave granted under clause 12 of the Letters Patent should not be rescinded and the plaint taken off the file. Here the adjudication asked for, if made, would have disposed of the suit. So also would an order made under an application to revoke a submission to arbitration. I think such an order is appealable.\" ", "Leave granted under clause 12 of the Letters Patent constitutes the very foundation of the suit which is instituted on its basis. If such leave is rescinded. the (1) I.L.R. 29 Bom. 249. (2) I.L.R. 47 Mad. 136. (3) 35 Mad. 1 (F.B.). ", " ", "suit automatically comes to an end and there is no doubt that such an order would be a judgment. If, on the other hand, an order is made dismissing the Judge's summons to show cause why the leave should not be rescinded, the result is, as Sir pointed out(1), that a decision on a vital point adverse to the defendant, which goes to the very root of the suit, becomes final and decisive, against him so far as the court making the order is concerned. This brings the order within the category of a 'judgment' as laid down in the Calcutta cases. We need not express any final opinion as to the propriety or otherwise of this view. It is enough for our purpose to state that there is a difference between ail order refusing to rescind leave granted under clause 12 of the Letters Patent and one under clause 13 directing the removal of a suit from one court to another, and there is no good reason to hold that the principle applicable to one applies to the other also. The result, therefore, is that, in our opinion, the view taken by is right and this appeal should fail, and is dismissed with costs. ", "Appeal dismissed. ", "Agent for the appellant: . ", "Agent for the respondent No. 1 : for ."], "relevant_candidates": ["0000212413", "0000215948", "0000497890", "0001165068", "0001937391"]} {"id": "0024858865", "text": ["* IN THE HIGH COURT OF DELHI AT NEW DELHI + WP(C) No.2254/2002 Reserved on: 7th August, 2009 Pronounced on: 13th August, 2009 # SAIL EX-EMPLOYEES ASSOCIATION .......Petitioner ! Through: None VERSUS $ STEEL AUTHORITY OF AND . ......Respondents ^ Through: Mr. , Advocate, for the Respondent No.1. CORAM: HON'BLE MR. JUSTICE 1. Whether Reporters of Local newspapers may be allowed to see the Judgment? 2. To be referred to the Reporter or not?yes 3. Whether the Judgment should be reported in the Digest? yes , J. ", "The Petitioner No.1 is an Association of retired employees of (hereinafter referred to as \u201e) and is concerned with their welfare. Petitioner No.2 is the patron of petitioner No.1. The employees of are divided into two categories, viz. (a)Executives (b) non-executives. The Executives are either promoted from non-executive cadres or appointed directly. Vide Notification dated 1.2.1996, raised the ceiling on the amount of gratuity payable to the employees from Rs.1 lakh to Rs.2.5 lakhs for the Executives. This ceiling was further raised to Rs.3.5 lakhs with effect from 1.1.1996 and according to the petitioners, it was applicable to all Government employees of . However, this enhanced ceiling on gratuity was adopted by Respondent- only with effect from 22.9.1997. ", "2. Another grievance of the Petitioner is that the ceiling on gratuity is applicable only to those employees who are in Executive cadre and there is no ceiling in case of non-executive employees. The Petitioners have sought setting aside of the lower ceiling fixed by and have further sought removal of distinction between Executives and non-executive employees in the matter of gratuity. They have also sought payment of difference in gratuity amount along with interest at the rate of 24 per cent per annum. ", "3. The Petition has been contested by . It has been stated in the Counter Affidavit that Respondent No.1 is an independent Company having its own policy and rules for its employees and is not a department of and, therefore, the decisions of in respect of Government employees are not applicable to it. It has been further alleged that as per clause 3.2.1 of SAIL Gratuity Rules, the amount of gratuity in respect of employees governed by the Memorandum of Agreement, arrived at in , is to be decided as per the terms of the agreement. Even the fixation of salary and other benefits in respect of the non-executives is based on the agreement arrived at . The Memorandum of Agreements signed at the National level are implemented by entering upon by-partite settlement at the plant/unit level with the local management and local representing the non-executives and the workmen. The Memorandum of Agreement of which was signed in October, 1970, provided that there shall be no ceiling or limit on the amount of gratuity payable. In all subsequent NJCS Agreements, it has been provided that the benefits given under the previous Agreements will continue and, therefore, upper limit on payment of gratuity has become non- operative in case of non-executive employees. ", "4. It has also been alleged by the respondent that Executives being Officers/Managers at various levels are different and distinct class, compared to non-executives who constitute workmen. It has also been pleaded that since promotions from non-executives posts to executives post were accepted by the members of , at the terms and conditions applicable to the Executives, they are stopped from raising a grievance on this count. It has also been stated that Executive enjoys several benefits and allowances which are not available to non-executives and there cannot be any comparison since the two are distinct class categories. It has further been stated in Counter Affidavit that vide Government of India Ordinance dated 24.9.1997, under payment of Gratuity Act , the amount of ceiling was increased from Rs.1 lakh to Rs.2.5 lakhs and further vide Payment of Gratuity (Amendment) Act , 1998 dated 23.6.1998, the ceiling was raised to Rs.3.5 lakhs. The Rules of the Company were amended accordingly so as to raise the ceiling from the date of amendments. ", " ", "5. Let me first take up the grievance of the petitioners regarding distinction between Executives and non-Executives in the matter of payment of gratuity. Section 4(2) of the Payment of Gratuity Act, 1972 provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of 15 days wages based on the rate of wages last drawn by the employee concerned. Sub-section 5 of Section 4 before its amendment with effect from 24.9.1997, provided that the amount of gratuity payable to an employee shall not exceed Rs. 1 lakh. It was increased first to Rs.2.5 lakhs and then to Rs. 3.5 lakhs. The ceiling of Rs. 3.5 lakhs was prescribed by Payment of Gratuity (Amendment) Act , 1998, with effect from 24 th September, 1997. Therefore, as far as Section 4 (4) of Payment of Gratuity Act , 1972 is concerned, the upper sealing was Rs.1 lakh prior to 24th September, 1997, which was fixed at Rs.3.5 lakhs with effect from 24.9.97. ", " ", "6. Section 4(5) of the Payment of Gratuity Act, 1972 reads as under:- ", " ", "\"Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.\" ", " ", "Thus, despite the upper sealing prescribed by sub- section 4 , the employees are entitled to receive higher gratuity if it is so agreed under any award or an agreement or contract between the employer and the employees. ", " ", "7. As disclosed in the counter affidavit, the salary and other benefits of non-executive employees of Steel Industry were fixed under an agreement arrived at the level of , which was followed by by-partite agreement at plants/unit level between the local management and the local unions representing the workmen. The counter affidavit shows that a Memorandum of Agreement of Joint Wage Negotiating Committee for steel industry signed in October, 1970 provided that there was to be no ceiling or limit on the amount of gratuity payable. It further shows that in all subsequent agreements, it was provided that the benefits provided under the previous agreement would continue. Thus, in view of the agreement between the respondent and its workmen, there is no ceiling on the amount of gratuity payable to the non-executive employees and such an agreement is specifically permitted by Section 4(5) of the Payment of Gratuity Act, 1972. ", " ", "8. It is true that differential treatment is being meted out by the respondent/SAIL to its employees forming part of the executive cadres and the employees who are non-executives/workmen. But, such a differential treatment is not without authority of law and is expressly permitted under Section 4(5) of The Payment of Gratuity Act, 1972. The Constitutional validity of Section 4(5) of Payment of Gratuity Act, 1972 has not been challenged by the petitioners. They have also not challenged the agreement between the respondent and its non-executive employees. So long as there is a subsisting agreement between the respondents and its non- executive employees to the effect that there will be no ceiling on the gratuity payable to the workmen and such an agreement is permissible in law, no fault can be found with the respondent treating its employees forming part of executive cadres differently from the employees who are workmen, in the matter of Payment of Gratuity. ", " ", "9. Even otherwise, the employees who are workmen, constitute an altogether different class from the employees who are Managers and officers, being members of various executive cadres of the respondent/company. The pay structure, allowances and service conditions of employees forming part of managerial/officer cadres are altogether different from the pay structure, allowances and service conditions of employees constituting non-executive cadres. Those who belong to executive cadres get not only higher salary but also better allowances, more perks and more favourable service conditions. In fact, executive cadres and non-executive cadres are altogether different classes and cannot be compared with each other. Differential treatment based on intelligible differentia is permissible under the Constitution so long as it has a reasonable nexus with the objective sought to be achieved in this behalf. Only those who are similarly situated are entitled to equal treatment. Since the employees forming part of managerial cadres belong altogether to a different class, they cannot claim, as a matter of right, the same treatment which is given to the non-executive employees on account of a binding agreement between them and the respondent company. Therefore, this is no violation of Article 14 of the Constitution in payment of gratuity to the Executives as per their statutory entitlements while paying gratuity to the Non- Executives in terms of the agreement between them and the management. ", " ", "10. Another important aspect in this regard is that while taking promotion from non-executive cadres to executive cadres, these employees knew that once they are promoted to the executive cadres, they will receive gratuity only as per their statutory entitlement and not in terms of the agreement between the management and the workmen. Having accepted the promotion, knowing fully well its implication on their gratuity, they cannot now claim the same gratuity which is payable to the non-executive employees. ", " ", "11. The issue of differential treatment to executive and non- executive employees, in the matter of payment of gratuity came up for consideration before this court in CWP No.486/1995 decided on September 13, 1996. This court, after considering the provisions of Payment of Gratuity Act and the agreement of the respondent with its non-executive employees repelled the contentions that fixation of higher gratuity to the non-executive class under the agreement was inconsistent with the provisions of the Payment of Gratuity Act , 1972. This court also held that the two categories, namely, the executives and the non-executives belong to two different and distinct classes, and there was a rationale relationship with the object sought to be achieved in extending better terms of gratuity to the non-executive employees in pursuance of the agreement and in terms of sub-section 5 of Section 4 of the Payment of Gratuity Act , 1972. ", " ", "12. The respondent amended its Gratuity Rules as and when there was amendment in the provisions of the Payment of Gratuity Act , 1972 and those rules applied to all employees irrespective of whether they are from executive cadres or from non-executive cadres. The non-executives are getting gratuity without any ceiling not on account of Rules but on account of their agreement with the management. ", " ", "13. For the reasons given above, I find no merit in the contention that the executives are entitled to Payment of Gratuity without any ceiling, as is being paid to the non-executive employees. ", "14. Coming to the plea that had increased the ceiling on the amount of gratuity from Rs.1 lakh to Rs.2.5 lakhs with effect from 1st April, 1995 and then to Rs. 3.5 lakhs with effect from 1st January, 1996 and the enhanced ceiling was applicable not only to employees but also to the employees of public sector undertakings/enterprises, I find that the petitioner has not placed on record any order or notification of revising the ceiling for payment of gratuity to the employees of all the public sector undertakings, to Rs. 2.5 lakhs with effect from 1st April, 1995 and then to Rs. 3.5 lakhs with effect from 1.4.96. . AIR 1998 Supreme Court 418, the Hon\u201fble Supreme Court specifically held that was not a department of the . In taking this view, the Hon\u201fble Supreme Court relied upon its earlier judgments, namely, . AIR 1970 SC 1150; and AIR 1982 SC 697. ", " ", "Since neither the respondent is a department of nor its employees are government employees, the ceiling fixed by in respect of its employees does not ipso facto apply to the employees of public sector undertakings. The respondent is a company duly registered under Companies Act and it has framed its own Rules in the matter of Payment of Gratuity to its employees. The employees of the respondents are, therefore, entitled to Payment of Gratuity only in terms of Payment of Gratuity Act , 1972 and the Gratuity Rules framed by the respondent company. In the absence of any order, notification or direction from , for applying the same ceiling, in payment of gratuity, to the employees of all the public sector undertakings, as is fixed by it in respect of its own employees, the employees of the respondent cannot claim that the ceiling prescribed for employees should be applicable in their case as well. ", " ", "15. Coming to the effective date from which the revised ceiling was applied by , I find that the Gratuity Rules were amended by the respondent with effect from 24.9.97. Since the provisions of Payment of Gratuity Act , 1972 were amended with effect from the same date, it cannot be said that the aforesaid date was fixed arbitrarily and was without any basis. In State of H.P. & Anr. Vs. 8) SC 260, the State of Himachal Pradesh framed Demobilised Armed Forces personnel (Reservation of Vacancies in Himachal State Non Technical Services) Rules, 1972 to provide for reservation of vacancies to released army personnel, who were commissioned to the army on or after 1.11.62. The cut off date was challenged as arbitrary. found that the cut off date had a direct bearing with the date on which country faced disturbance on account of war with China. In Vs. & Ors. JT 1993 (4) SC 501, held as under:- ", "\"the power of the to specify a date with effect from which, the Regulations framed, or amended, as the case may be shall come into force is unquestioned. A date can be specified both prospectively as well as retrospectively. The only question is whether the prescription of the date is unreasonable or discriminatory.\" ", " ", "In State of Bihar & Ors. Vs. & Ors. AIR 1990 SC 1300, held as under:- ", "\"the choice of a date as a basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for the choice unless the circumstances show it to be capricious and whimsical. When it is necessary for the or authorities to fix a line or a date and there is no mathematical or logical way of fixing it precisely, the decision of the or authority must be accepted unless it is shown to be capricious or whimsical or wide off the reasonable mark.\" ", " ", "The effective date fixed by the respondent being based upon the date of amendment of Payment of Gratuity Act , I find no merit in the contention that the date of 24th September, 1997 for the purpose of revising the ceiling of gratuity was fixed arbitrarily. ", "For the reasons given above, I do not find any merit in the petition and the same is hereby dismissed. ", " ", "() JUDGE August 13, 2009. ", "sn/sk"], "relevant_candidates": ["0000431853", "0000791627", "0001924249"]} {"id": "0031443063", "text": ["JUDGMENT , J. ", "1. In these appeals by special leave the only question that is raised is whether the substance known as Pyratax-Vinyl Pyridine Latex (for short, V.P. Latex) is not rubber raw classifiable under item No. 39 of the Indian Tariff Act, 1934 (hereinafter referred to as I.C.T.). ", "2. The appellants are manufacturers of automotive tyres. V.P. Latex is required in the process of manufacturing of tyres. V.P. Latex is required is the process of manufacturing of tyres V.P. Latex is not manufactured in India and has to be imported from outside the country. The tyre industry uses V.P. Latex as one of the essential ingredients in the course of manufacture of automotive tyres. ", "3. The appellant in Civil Appeal No. 1446 of 1972 imported sometime in April 1969, 3 consignments of V.P. Latex. In appeal from the proceedings before the Assistant Collector of for appraisement of the said consignments for the purpose of imposition of customs duty and/or countervailing duty, the Appellate Collector of , Calcutta upheld the appellant's contention and classified V.P. Latex under item 39 of the I.C.T. as raw rubber. The classification made by the Appellate Collector was revised by in a proceeding initiated, suo motu, under Section 131(2) of the Act, 1962. held by the impugned order, that the said V.P. Latex was \"an aqueous dispersion of synthetic resin\", and hence classifiable under item 87 of the I.C.T. prior to 1st March, 1970, and thereafter under the new item No. 82(3) I.C.T. by the same order further held that the said goods were liable to countervailing duty under item No. 15A, C.E.T. both before and after 1st March, 1970. It is apparent that if V.P. Latex were to be classified under Item No. 87, higher duty will be leviable and that is the reason for the controversy in these appeals. ", "4. In Civil Appeal No. 2746 of 1972, the appeal is directed against the order of August 17, 1972, of the Appellate Collector of Customs, Madras, dismissing a batch of 18 appeals of the . The Appellate Collector confirmed the order of the Assistant Collector of Customs Appraising, Madras, rejecting the appellant's claim for refund of duty on the basis that V.P. Latex should be classified under item 39 I.C.T. and not under item 82(3) of the I.C.T. The appellant did not go in revision before as already similar claims had been rejected by . ", "5. There are several interveners in the appeals and the entire tyre industry is interested in the matter. ", "6. Prior to the 1st March, 1970, the First Schedule to the Indian Tariff Act, 1934, contained, inter alia, the following dutiable items : ", "Item No. 39-Ruber, raw, Item No. 87-All other articles, not otherwise specified. ", "In addition to the above, the following item was introduced in the Tariff Act by the Finance Act , 1970 : ", "Item No. 82(3)(a).-Artificial or synthetic resins and plastic materials in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders. ", "7. Under Section 2A of the Tariff Act any article which is imported into India shall be liable to customs duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. Such customs duty in addition to the duty under the Tariff Act is known as countervailing duty. ", "8. Item 15A of the First Schedule to the Central Excises and Salt Act , 1944 (briefly C.E.T.) reads as follows : ", "15A. Artificial or synthetic resins and plastic materials and articles thereof (1) Artificial or synthetic resins and plastic materials in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders, the following, namely ", "9. An additional item being item No. 16AA was introduced in the C.E.T. for the first time by the Finance Act , 1970, which reads as follows : ", "Item No. 16AA.-Synthetic rubber, including butadiene acrylonitrile rubber, styrene butadiene rubber and butyl rubber, synthetic rubber latex, including prevulcanised synthetic rubber latex. ", "The quantity of V.P. Latex consumed by the tyre industry in India as a whole is said to be about 1000 tonnes per year and the value thereof is Rs. 40,33,000/- approximately. The appellant, , consumes about 300 tonnes per year. The controversy between the parties centers round the real meaning of V.P. Latex, while the appellants submit that V.P. Latex is synthetic rubber in the latex form, according to the respondents it is not so, but on the other hand, it is what may be described as 'resin'. ", "10. In order that the is able to appreciate the rival contentions, both sides addressed us referring to several standard authorities and treatises. ", "11. Before we proceed further it may be appropriate to see how rubber is described in the Encyclopaedia Britannica, Volume 19, 1965 Edition : ", "Rubber is the substance caoutchouc (q.v.), a milk like fluid that is obtained from certain tropical shrubs or tyres and then subjected to various processes of manufacture; or it may be a product of chemical synthesis. ", "* * * * The uniqueness of rubber lies in its physical properties of extensibility and toughness. In its natural state, it is greatly affected by temperature, becoming harder when cooled (at 0\u00b0-10\u00b0C it is opaque) and softer when heated (above 50\u00b0C, it becomes tackier and less elastic, decomposing into liquid form at 190\u00b0-200\u00b0C). When vulcanized (i.e. heated with sulphur at 120\u00b0-160\u00b0C.) it loses its thermoplasticity and becomes stronger and more elastic .... ", "Chemically, rubber is a polymer of isoprene.... ", "* * * * The term synthetic rubber is used to describe an ever growing number of elastic materials, some of which closely resemble natural rubber while others have completely different physical properties, Since World War II, precise terminology has not kept pace with the rapid developments in the synthetic and plastics industries. ", "The copolymerization of the butadiene and the styrene takes place in an emulsion in the presence of an active initiator, such as cumene hydroperoxide and p-menthane hydroperoxide, which allows the conversion to occur at a low temperature (5\u00b0C). SBR is usually prepared with 75% butadiene and 25% styrene; the proportion will, however, vary according to the desired degree of elasticity.... ", "12. Let us consider the appellants' case to treat the V.P. Latex as rubber raw. In this attempt the appellants rely upon several authorities from the rubber world pronouncing upon the chemical properties as well as various uses and potentialities. Their contention is that V.P. Latex is a synthetic rubber Latex and can never be taken for synthetic resin. The principal point to distinguish V.P. Latex from synthetic resin is, while synthetic resin cannot be vulcanised, V.P. Latex, being rubber can be vulcanised. According to , (A.S.T.M.) raw rubber is defined as crude or uncompounded rubber, either natural or synthetic. (I.S.I.) defines rubber as follows : ", "Rubber in its modified state free of all diluents, retracts within one minute to less than 1.5 times its original length after being stretched at normal room temperature to twice its length and held for one minute before release. ", "13. It also defines raw rubber as 'vulcanised rubber'. According to in his book \"Rubber-Natural and Synthetic\", V.P. Latex is composed of butadiene styrene and vinyl pyridine in the ratio of 70 : 15 : 15 respectively. A synthetic latex is produced as the first stage in the manufacture of most synthetic rubbers. V.P. Latex is one such synthetic rubber latex. An affidavit sworn by Mr. , Manager, , , , states that V.P. Latex is a terpolyer rubber as defined in A.S.T.M. Specification DI-566-60T and that there is no measurable resin content in this product. It is claimed by the appellants that pyratex which is the commercial name for V.P. Latex, imported by them, is exactly similar to the V.P. Latex referred to in Mr. 's affidavit, since it also contains butadiene styrene and vinyl pyridine in the same proportion of 70 : 15 : 15 with no measurable resin content. It is claimed that V.P. Latex is an emulsion of synthetic rubber and it is borne out by its chemical composition and by the physical properties. In the case of V.P. Latex when coagulated, the coagulum answers fully the A.S.T.M. standards and tests prescribed for rubber. Its use in liquid state is commercially more expedient than its use in dry state. V.P. Latex has been designed as a special synthetic rubber latex to be suitable for its use at the fabric cross-linking stage with rubber compound. It is claimed that in its application it is in no way different from any other natural rubber or synthetic rubber latices. The advantage gained in the case of V.P. Latex is that it is more stable and is not whimsical with reference to manufacturing conditions. According to , the additions of vinyl pyridine in such terpolymers of butadiene, styrene and vinyl pyridine have been found to improve the characteristics and properties with the increase of vinyl pyridine content and it is known to reach optimum at about 15 parts i.e. at a charge of 75 : 10 : 15. It is further said that vinyl pyridine copolymers suffer from the drawback of extremely high rate of cure, scorching and incompatibility with other rubbers and hence do not find use in the dry state in spite of their certain superior properties. According to the appellants, V.P. Latex, when coagulated just like any other rubber latex satisfies the elongation tests prescribed for rubber. It is also claimed that in the international field of rubber manufacture, all over the world, V.P. Latex is fully recognised as a synthetic rubber latex and not as a synthetic resin. ", "14. The Condensed Chemical Dictionary, 8th edition, 1971, defines latex as a white free-flowing liquid obtained from some species of shrubs or trees in which microscopically small particles or globules of natural rubber are suspended in a watery serum. Natural rubber latex, obtained from the tree Heve a Braziliensis, contains about 60% water, 35% rubber hydrocarbon, and 5% proteins and other substances. Coagulation is prevented by protective colloids, but can be induced by addition of acetic or formic acid. Synthetic latices include polystyrene, SBR rubber, neoprene, polyvinyl chloride etc. Both natural and synthetic latices are available in vulcanised form. It describes their uses for thin rubber products (surgeons' gloves, drug, sundries); girdles, pillows, etc.; emulsion paints; adhesives; tire cord coating; rubber, natural. ", "15. In the same Dictionary, rubber synthetic is described as follows : ", "Any of a group of manmade elastomers which approximate one or more of the properties of natural rubber. Some of these are : sodium polysulfide ('Thiokol'); polychloroprene (neoprene); butadiene-styrene copolymers (SBR) ; acrylonitrile-butadiene copolymers (nitrile rubber); ethylene-propylene-diene (EPDM) rubbers; synthetic polyisoprene ('Coral', 'Natsyn'); butyl rubber (copolymer of isobutylene and isoprene); poly acryloni-trile ('Hycar'); silicone (polysiloxane); epichlorohydrin; polyurethane ('Vulkollan'). ", "Styrene-butadiene rubber (SBR, s. type elastomer)-is the most common type of synthetic rubber. Manufacture involves copolymerization of about 3 parts butadiene with 1 part styrene. Its uses are for tires, footwear, mechanical goods coatings; adhesives; etc. ", "16. The appellants have also produced the Import Trade Control Policy, Volume I, for the year 1975-76 described during the arguments as the 'Red Book' of of . It may be useful to quote the entire entry 150 at page 58 : ", "Section II : Policy for individual items and the detailed policy for Actual Users : ____________________________________________________________________________________________________________ Part & SI. No. Description Established IMPORT POLICY of I.T.C. Importers Actual User Schedule _____________________________________________________________________________________________________________ (1) (2) (3) (4) _____________________________________________________________________________________________________________ 150 Rubber, raw and Nil (1) A.U. for import of Gutta gutta percha, raw. percha, raw. (2) Requirements of actual users for the following items will be met by imports through public-sector agency : (i) Synthetic rubber namely, Butyl rubber Acrylonitrile Butadiene Copolymer, Poly Chloroprene, Thikol, Polyisoprene, Poly butadiene, Hypalon, Viton Polyarcylic EPDM, Chlonobutyl and Bromobutyl Silicone rubber and Silicone rubber master batches and Silicone rubber master batches and Synthetic latex including Vinyl pyridine latex and copolyme of 'styrene butadiene latex, Nitrilre latex and poly chloroprene latex. (ii) Hot type special grades of SBR for manufacture of high impact polystyrene only. Please see Section III to this Red Book. (3) Import of SBR and/or Alkyl substituted Styrene Butadiene Elastometric Copolymers will not be allowed. (4) Import of natural rubber and reclaimed rubber will not be allowed. ", "(emphasis added) ________________________________________________________________________________________________________________________ ", "17. In the earlier Volume of the Import Trade Control Policy, for the year 1969-70, this item 150-Rubber, raw-shows under the fourth column \"Actual Users for Synthetic rubber\", the following : ", "(i) Import of natural rubber will normally be arranged through STC for meeting the requirements of actual users. ", "(ii) A.U. for Synthetic Rubber, namely, Butyl rubber, Acrylonitrile Butadiene Copolymer, Poly chloroprene, Thikol, Poly isoprene and Polybutadiene and Synthetic latex. ", "* * * * In the Import Trade Control Policy in Volume No. I for the year 1970-71 against Serial No. 150, rubber, raw, under column 4 Actual Users for Synthetic rubber\", actual users are shown as (ii) \"A.U. (Actual User) for Synthetic Rubber, namely, Butyl Rubber, Acrylon-trile Butadiene Copolymer, Poly Chloroprene, Thikol, Poly Isoprene and Poly-butadiene Hypalon, Silicone rubber and Synthetic latex including Vinyl Pyridine latexand copolymer of styrene butadiene latex\" (emphasis added). Again the Condensed Chemical Dictionary at page 741 describes \"Pyratex\" the trade name under which V.P. Latex has been imported as follows : ", "Pyratex, 248 Trademark for a vinylpyridine Latex. ", "Properties : Total solids 40-42% PH 10, 5-11, 5 : sp. gr. 0.96. ", "Uses : To promote adhesion between rayon or nylon fibres and rubber, as in tire cord, belting, hose, etc. ", "18. The British Standard specification is as follows : ", " gives the specification of PSBR 41 latex as \"(Vinyl) pyridine-styrene-butadiene rubber latex with a nominal total solids content within the range 40.0% to 49.9% and a nominal bound styrene content of less than 20.0% of the total polymer\". In , under Table XI, enumerates \"GENTAC\" and \"PYRATEX\" as Emulsion Styrene-Butadiene and Butadiene Rubber Latices of Section 41 P Class. The classification \"Section 41 P\" properly decoded means as belonging to the Chemical Family of Styrene-Butadiene Rubber (SBR) having total solid contents of 40 to 49% and Styrene Co-monomer content of less than 20% wherein Vinyl Pyridine is present in the Polymer. ", "19. Although the controversy between the parties was placed before us in an exhaustively enlarged form going into the Chemistry of V.P. Latex, it is not necessary to go into all the complexities of chemical formulate and properties. The impugned order itself takes note of all the contentions raised before the and also pressed before us. ", "20. This approach is also convenient and unobjectionable, since it is urged on behalf of the respondents that we should not entertain fresh materials which were not available before the authority. We may, therefore, briefly note the claim of the appellants to V.P. Latex being classified as raw rubber under item 39, I.C.T. on the grounds advanced before the which the authority took note of: ", "(1) V.P. Latex is a synthetic rubber latex which satisfies wholly each and every test prescribed by the authority in India as well as abroad for classification of rubber. ", "(2) According to the A.S.T.M. definition, rubber means \"an elastomer that can be or already is vulcanised. Collectively the rubber constitutes the definite raw material of the rubber industry. They may be of vegetable origin or synthetic\". Synthetic resin cannot be vulcanised whereas V.P. Latex, being rubber, can be vulcanised. ", "(3) A.S.T.M. further defines raw rubber as crude or uncompounded rubber, either natural or synthetic. ", "(4) According to I.S.I. definition, rubber is defined as follows : ", "Rubber in its modified state free of all diluents, retracts within one minute to less than 1.5 times its original length after being stretched at normal room temperature to twice its length and held for one minute before release. ", ", also defines raw rubber as unvulcanised rubber. ", "(5) V.P. Latex is composed of butadiene styrene and vinyl pyridine in the ratio of 70 : 15 : 15 respectively. According to (author of 'Rubber-Natural and Synthetic'), a synthetic latex is produced at the first stage in the manufacture of most synthetic rubbers V.P. Latex is one such synthetic rubber latex. ", "(6) V.P. Latex is very much similar to other synthetic rubber latices. V.P. Latex cannot be regarded as an aqueous dispersion of synthetic resin since it has no measurable resin at all. On the contrary the proper description of V.P. Latex would be to call it an emulsion of synthetic rubber and this is borne out by its chemical composition and by its physical properties. ", "(7) The question of classifying a substance rests primarily on its chemical properties as borne out by technical tests. In the case of V.P. Latex, when coagulated, the coagulum answers fully the A.S.T.M. standards and tests prescribed for rubber. Its use in liquid state is commercially more expedient than its use in dry state but this should not be factor in classifying a product according to its technical and chemical composition. ", "(8) V.P. Latex has been designed as a special synthetic rubber latex to be suitable for its use at the fabric cross-linking stage with rubber compound. In its application it is in no way different from any other natural rubber or synthetic rubber latices. V.P. Latex should, therefore, properly be regarded as a synthetic rubber latex. ", "(9) It is not correct to say that all rubber latices when coagulated should have an absolute commercial dry rubber usage in order to be classified under raw rubber. Quoting from \"the addition of vinyl pyridine in such terpolymers of butadiene, styrene and vinyl pyridine has been found to improve the characteristics and properties with the increase of vinyl pyridine content and it is known to reach optimum at about 15 parts, i.e. at a charge of 75 : 10 : 15 (Synthetic rubber by ). It was admitted that vinyl pyridine copolymers do not find use in the dry state as they suffer from the drawback of extremely high rate of cure, scorching and incompatibility with other rubbers. ", "(10) V.P. Latex has to be assessed in the form in which it is imported. In this view, V.P. Latex is nothing but a synthetic rubber latex. ", "(11) In the International field of rubber manufacture all over the world V.P. Latex is fully recognised as a synthetic rubber latex and not as a synthetic resin. While V.P. Latex can be coagulated and vulcanised, a synthetic rubber cannot be vulcanised. ", "21. The appellants submitted before the revisional authority letter dated 26th November, 1970, written by on V.P. Latex; extracts from Elastomers Manual published by ; Articles written by of (PBR) published Rubber Chemistry and Technology; A.S.T.M. Glossary of Terms relating to Rubber and Rubber like materials; and the books by and . It was pointed out before the authority by the appellants that rubber was always obtained first in a latex form and latex was nothing but an aqueous state of rubber, that V.P. Latex is a liquid rubber designed for use in tyre manufacture as a bonding agent by cross linking with fabrics. It was also pointed out with reference to the classification of synthetic rubber latices that itself had ruled in several cases that these were to be regarded as coming under I.C.T. 39. ", "22. The conclusion of the revisional authority, after considering the above submissions, may be quoted in its own words : ", "V.P. Latex is a synthetic latex designed to be used in the manufacture of tyres as a bonding agent by cross linking with fabric. It has bee admitted by the importers that the product is not used in the dry state V.P. Latex is a liquid latex used as such and the question boils down to consider whether synthetic rubber latex could be classified as 'raw rubber' assessable under item 39 I.C.T. irrespective of its usage known commercially or in the industry. ", "23. Then after nothing the definition of latex in the Chemical Dictionary and in the \"Materials Hand Book\" by , the authority observed as follows : ", "These definitions imply that latex is a material from which rubber is obtained and not rubber itself. ", "Latex, according to the authority, is milk juice of the rubber tree which is source of rubber and is in common parlance referred to as rubber. The authority then refers to Chapter 40 of the Brussels Tariff Nomenclature (B.T.N.) dealing with natural rubber latex (40.01) and synthetic rubber latex (40.02). ", "40.1. : \"Natural rubber latex, whether or not with added synthetic rubber latex; pre-vulcanised natural rubber latex; natural rubber; balata, gutta-percha and similar natural gums. ", "40.2. \"Synthetic rubber latex; pre-vulcanised synthetic rubber latex; synthetic rubber; factice derived from oils. ", "The authority then observed as follows : ", "Chapter 40 of the B.T.N. covers raw rubber, Heading No. 40.01 refers to 'natural Rubber Latex whether or not with added synthetic rubber latex, pre-vulcanised natural rubber latex, natural rubber but natural rubber latex has been defined under 40.01 as containing in suspension 30% to 40% of rubber. Rubber Latex therefore appears to fall under 40.01 by specific inclusion only. So also synthetic rubber latex is specifically mentioned in heading 40.02. Had they not been so specified, latex may have been excluded from the scope of the heading 'rubber'. ", "24. To say the least, it is difficult to appreciate the strained meaning given by the authority in the above extract. At any rate the authority concludes \"hence it appears that rubber latex is not rubber as such but merely a source of rubber.... In this view, latex and rubber will have to be distinguished from each other. ", "25. It appears from the order itself that was not treating rubber latex as raw rubber assessable under item 39 I.C.T. till 1935, and a decision was taken in that year to accord the same tariff treatment to rubber latex as to rubber raw, because it was found that latex had to be imported for various specific uses which required a liquid form. According to the authority, the use of rubber latex was as rubber and therefore on the same principle, synthetic rubber latex was also treated as synthetic rubber for assessment purposes. Then comes the crucial conclusion of the authority. ", "If V.P. Latex was designed for or intended to be used as rubber, there would have been no difficulty in classifying it under item 39 I.C.T. In fact synthetic rubber itself has been classified as raw rubber only because synthetic rubber serves exactly the same purpose as crude rubber in all its industrial uses and has no practical difference from the latter. Pyratex V.P. Latex is designed for use as an adhesive in the manufacture of tyres. It is seldom put to any of the other uses to which rubber, natural or synthetic is ordinarily put. In composition, it is similar to rubber latex and it may also well answer the tests for rubber such as elongation etc. When reduced to dry state but its use is not the same as that of rubber. It could theoretically be converted into a substance which is akin to rubber but it has been admitted that due to high rate of cure, scorching and incompatibility with other rubbers. It does not find use in a dry state. In fact it does not replace rubber in use though it has similar properties. ", "[Emphasis added] ", "26. The last point considered by the authority was with regard to the resin content in V.P. Latex. The appellants claimed that V.P. Latex had no resin content. The authority repelled the contention in the following words : ", "It appears that there is no accepted definition of the term 'resin' in trade usage or technical literature and resins are identified by their use as resins and in this view V.P. Latex may well be considered as a resin latex. ", "27. Mr. for the respondents has made a strenuous plea that V.P. Latex is not rubber raw and is synthetic resin. If it is correct that V.P. Latex is synthetic resin, it would come under item 87 I.C.T. the residuary entry covering \"all other articles not otherwise specified\". ", "28. To revert to the order of the authority, it is clear that the authority would be have found no difficulty in coming to the conclusion that V.P. Latex in view of chemical composition and physical properties is rubber raw, if the same were commercially used as rubber. The authority, therefore, was principally influenced to come to its decision on the sole basis of the ultimate use of the imported article in the trade. ", "29. Section 12 of the Customs Act, 1962, is the charging section. That section reads (1) \"Except as otherwise provided in this Act or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Indian Tariff Act, 1934, or any other law for the time being in force, on goods imported into, or exported from, India. ", "30. The relevant taxing event is the importing into or exporting from India. Condition of the article at the time of importing is a material factor for the purpose of classification as to under what head, duty will be leviable. The reason given by the authority that V.P. Latex when coagulated as solid rubber cannot be commercially used as an economic proposition, as even admitted by the appellants, is an extraneous consideration in dealing with the matter. We are, therefore, not required to consider the history and chemistry of synthetic rubber and V.P. Latex as a component of SBR with regard to which extensive arguments were addressed by both sides by quoting from different texts and authorities. ", "31. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the and its popular meaning should commend itself to the authority. ", "32. Dealing with the meaning of the term \"vegetables\" in the Excise Tax Act in King v. , 1951 CLR 122, observed as follows : ", "Now the statute affects nearly everyone, the producer or manufacturer, the importer, wholesaler and retailer, and finally the consumer who, in the last analysis, pays the tax. would not suppose in an Act of this character that manufacturers, producers, importers, consumers, and others who would be effected by the Act, would be botanists. The object of Excise Tax Act is to raise revenue, and for this purpose to class substances according to the general usage and known denominations of trade. In my view, therefore, it is not the botanist's conception as to what constitutes a 'fruit' or 'vegetable' which must govern the interpretation to be placed on the words, but, rather what would ordinarily in matters of commerce in Canada be included therein. Botanically, oranges, and lemons are berries, but otherwise no one would consider them as such. ", " also referred to a pithy sentence from \"200 chests of Tea\", per story, J (1824) 9 Wheaton (US) 435 that \"the does not suppose our merchants to be naturalists, or geologists, or botanists\". ", "33. The above Planters Nut case (supra) was referred to with approval by this Court in , (. In 's case, this Court was concerned with the meaning of the word 'vegetables' occurring in C.P. and Berar Sales Tax Act, 1947. This Court held as follows : ", "But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it'. It is to be construed as understood in common language. ", "34. Again in the , , this had to deal with the word 'charcoal' used in Madhya Pradesh General Sales Tax Act. It was contended in that case that 'charcoal' would be covered under Entry I of Part III of Schedule II to that Act. This while holding that charcoal would be included in coal, observed as follows : ", "Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well settled that while interpreting items in statutes like the Sales Tax Act s, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. ", "This Court again referred with approval to the decision in case (supra) and followed the principle laid down in 's case (supra). In , etc. v. , the question that was raised related to item 14-H in the Schedule I to the Central Excises and Salt Act , 1944, which contained compressed, liquefied or solidified gases, inter alia. Carbon acid (carbon dioxide). This Court observed as follows : ", "It is also not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purpose and sets up a kiln for it that he produces carbon dioxide and not kiln gas. In fact what he produces is a mixture known both to trade and science as kiln gas, one of the constituents of which is, no doubt, carbon dioxide. ", "This Court finally observed : ", "The Kiln gas in question therefore is neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14-H in the First Schedule. ", "Similarly in , this Court dealing with the meaning of the word 'Wolfram ore' again approvingly referred \"not to the scientific or technical meaning but to the meaning attached to them by those dealing in them in their commercial sense\". ", "35. Mr. draws our attention to several authorities to impress upon us that butadiene styrene latices are compatible with many resins and modifiers. He also submits that the term vinyl pyridine has been used to include a variety of resins, plastics, elastomers, etc. and that V.P. Latex exhibits outstanding adhesive properties. His main object is to show that V.P. Latex is resin which is \"an omnibus term for a variety of hard brittle, solid or semisolid organic substances\". It is however, seen from an extract from the Dictionary of Rubber Technology, 1969 edition, by , produced by Mr. that \"vinyl pyridine is one component of terpolymer of butadiene, styrene and vinyl pyridine used in latex form to promote good adhesion between rubber and textiles, particularly rayon and nylon\". We find the same description reiterate in a book \"Latex Natural and Synthetic\" by (a Reinhold Pilot Book) where at page 145 it is stated that 'there is one type of speciality rubber latex that deserves special notice. This is terpolymer of butadiene, styrene, and 2-vinyl pyridine. Under the trade names of \"Gentac\" and \"Pyratex\" it is extensively used in nylon tire cord saturation because it gives better adhesion between the cord and the rubber in which the cord is imbedded than do other latices'. Mr. , however, emphasises that V.P. Latex is merely an adhesive and so is akin to resin and not to rubber. ", "36. We are however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry. ", "37. It is good fiscal policy not to put people in doubt and quandary about their liability to duty, when a particular product like V.P. Latex known to trade and commerce in this country and abroad is imported, it would have been better if the article is eonomine, put under a proper classification to avoid controversy over the residuary clause. As a matter of fact in the Red Book (Import Trade Control Policy of the Ministry of Commerce) under Item 150, in Section II, which relates to \"rubber, raw and gutta percha, raw\", synthetic latex including vinyl pyridine latex and copolymer of styrene butadiene latex are specifically included under the sub-head \"Synthetic Rubber\". We do not see any reason why the same policy could not have been followed in the book being complementary to each other. When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. The question of competition between two rival classifications will, however, stand on a different footing. ", "38. It is not for the to determine for itself under article 136 of the Constitution under which item a particular artical falls. It is best left to the authorities entrusted with the subject. But where the very basis of the reason for including the article under a residuary head in order to charge higher duty is foreign to a proper determination of this kind, this will be loath to say that it will not interefere. ", "39. In this case there is rather voluminous evidence from the standard authorities in favour of V. P. Latex being a component of SBR which is admittedly classified under rubber raw. But assuming, and only assuming, that evidence is balanced, the best course in a fiscal measure is to decide and fix the entry under which the article comes, otherwise it will give rise to adoption of varying standards where uniformity should be the rule. ", "40. At one stage Mr. pointed out that in certain Bills of Entry of Dunlop India Limited, their Agents, Messrs, , Private Ltd., gave the I.C.T. Item No. 87 with regard to the imported V.P. Laitex. This, according to Mr. , clearly shows how the appellants them selves have understood the matter. There is, however, no estoppel in law against a party in a taxation matter. In order to clear the goods for the customs, the appellants Agents may have given the classification in accordance with the wishes of the authorities or they may even be under some misapprehension. But when law allows them the right to ask for refund on a proper appraisement and which they actually applied for. we do not attach any significance to this aspect of the matter pointed out by counsel. The question is of general importance and must be decided on its merits. ", "41. Mr. drew our attention to two decisions of this in , and the , and submitted that this should not interfere with the decision of the authority under Article 136 of the Constitution. These decisions are clearly distinguish able, as, in the view we have taken, the order is ex facie based on an irrelevant factor. Even in the , , this refused to interfere only because it could not be persuaded to hold that the view taken by the High was so grossly erroneous as to call for interference under Article 136 of the Constitution. The present is not such a case. ", "42. We are clearly of opinion that in the state of the evidence before the revisional authority no reasonable person could come to the conclusion that V.P. Latex would not come under rubber raw. The basis of the reason with regard to the end-use of the article is absolutely irrelevant in the context of the entry where there is no reference to the use or adaptation of the article. The orders of the authority are, therefore, set aside. In the result the appeals are allowed with costs. ", "43. We should observe that we express no opinion with regard to the question relating to countervailing duty under Section 16AA of the First Schedule to the Central Excises and Salt Act , 1944, in these appeals."], "relevant_candidates": ["0000122622", "0000540093", "0000547717", "0001272035", "0001632638", "0001801675"]} {"id": "0069408974", "text": ["CASE NO.: Writ Petition (civil) 4677 of 1985 PETITIONER: RESPONDENT: . DATE OF JUDGMENT: 18/03/2004 BENCH: & . JUDGMENT: ", "J U D G M E N T INTERLOCUTORY APPLICATION NO.1785/01 IN INTERLOCUTORY APPLICATION NO.22 AND IN WRIT PETITION (CIVIL) NO.4677 OF 1985 [With IA Nos.1806, 1815, 1817-1818, 1819, 1822, 1823, 1824, 1825, 1794 and 1795 in IA No.1785 in WP (C) No.4677/85, WP (C) NO.410/2002, IA No.1832, 1835-1836, 1838 and 1839-1840 in IA No.1785 in IA No.22 in WP (C) No.4677/85, WP (C) No.661/2002, WP (C) No.428/2002, WP (C) No.624/2002 and Contempt Petition (C) No.568/2002 in WP (C) No.428/2002] Y.K. Sabharwal, J. ", "The main question to be examined in these matters is whether the mining activity in area upto 5 kilometers from the Delhi-Haryana border on the Haryana side of the ridge and also in the Aravalli hills causes environment degradation and what directions are required to be issued. The background in which the question has come up for consideration may first be noticed. ", " () was directed by orders of this Court dated 20th November, 1995 to inspect and ascertain the impact of mining operation on the Badkal Lake and Surajkund - ecologically sensitive area falling within the State of Haryana. In the report that was submitted, it was stated that explosives are being used for rock blasting for the purpose of mining; unscientific mining operation was resulting in lying of overburden materials (topsoil and murum remain) haphazardly; and deep mining for extracting silica sand lumps is causing ecological disaster as these mines lie unreclaimed and abandoned. It was, inter alia, recommended that the Environmental Management Plan (EMP) should be prepared by mine lease holders for their mines and actual mining operation made operative after obtaining approval from the State or ; the EMP should be implemented following a time bound action plan; land reclamation and afforestation programmes shall also be included in the EMP and must be implemented strictly by the implementing authorities. The report recommended stoppage of mining activities within a radius of 5 kms. from Badkal Lake and Surajkund (tourist place). , on the basis of the recommendations made in the report, stopped mining operations within the radius of 5 kms of Badkal Lake and Surajkund. The mine operators raised objections to the recommendations of stoppage of mining operations. According to them, pollution, if any, that was generated by the mining activities cannot go beyond a distance of 1 km. and the stoppage was wholly unjustified. Report and earlier directions By order dated April 12, 1996, the Court sought the expert opinion of () on the point whether the mining operations in the said area are to be stopped in the interest of environmental protection, pollution control and tourism development and, if so, whether the limit should be 5 kms. or less. in its inspection report dated 20th April, 1996, inter alia, recommended that: \"6.1 Mining. (1) Detailed exploratory operations need to be undertaken to facilitate the estimation of reserves in the region, and for scientific management of mining operations. ", "(2) The mine lease-owners need to undertake the mining operations in series, i.e. mining activities must be completed to full potential in a block before moving to the next. This will help in reclamation of land in the block in which mining operations have been completed. ", "(3 to (9) ... ", "(10) The Environmental Management Plans (EMP) being formulated by the mine-owners should include land rejuvenation and afforestation programmes, and other measures necessary to protect the quality of the environment and human health. The mining operations should commence only after the approval of EMPs by a designated authority. A time-bound action plan needs to be initiated for the implementation of the measures delineated in the Environmental Management Plans. ", "(11) & (12) ... ", "(13) The question of lifting the ban on mining operations needs to be considered in conjunction with the implementation of stringent pollution control, land reclamation, green belt, and other Environmental Management measures so as to facilitate the availability of construction materials and employment opportunities for the workers along with the protection of environment and public health. ", "(14) It is considered necessary to prepare a Regional Environmental Management Plan for urgent implementation to enable eco-friendly regional development in the area.\" ", "On consideration of the reports, this Court came to the conclusion that the mining activities in the vicinity of tourist resorts are bound to cast serious impact on the local ecology. The mining brings extensive alteration in the natural land profile of the area. Mined pits and unattended dumps of overburdened left behind during the mining operations are the irreversible consequences of the mining operations and rock blasting, movement of heavy vehicles, movements and operations of mining equipment and machinery cause considerable pollution in the shape of noise and vibration. The ambient air in the mining area gets highly polluted by the dust generated by the blasting operations, vehicular movement, loading/unloading/transportation and the exhaust gases from equipment and machinery used in the mining operations. It was directed that in order to preserve environment and control pollution within the vicinity of two tourist resorts, it is necessary to stop mining activity within 2 kms. radius of the tourist resorts of Badkal Lake and Surajkund. The Court further directed the Director, to enforce all the recommendations of NEERI contained in para 6.1 of its report so far as the mining operations in the State of Haryana are concerned. Further, it was directed that failing to comply with the recommendations may result in the closure of the mining operations and that the mining leases within the area from 2 kms. to 5 kms. radius shall not be renewed without obtaining prior no objection certificate from the as also from (). Unless both the Boards grant no objection certificate, the mining leases in the said area shall not be renewed. ( . []). ", "Present Issues The aspects to be examined include the compliance of the conditions imposed by while granting no objection certificate for mining and also compliance of various statutory provisions and notifications as also obtaining of the requisite clearances and permissions from the concerned authorities before starting the mining operations. ", "In matters under consideration, the areas of mining fall within the districts of Faridabad and Gurgaon in the Haryana State. I.A. No.1785/01 has been filed by praying that be directed to stop all mining activities and pumping of ground water in and from area upto 5 kms from Delhi-Haryana border in the Haryana side of the Ridge, inter alia, stating that in the larger interest of maintaining the ecological balance of the environment and protecting the Asola Bhatti Wildlife Sanctuary and the ridge located in Delhi and adjoining Haryana, it is necessary to stop mining. In the application, it has been averred that the Asola Bhatti Wildlife Sanctuary is located on the southern ridge which is one of the oldest mountain ranges of the world and represents the biogeographical outer layer of the Aravalli mountain range which is one of the most protected areas in the country. The sanctuary is significant as it is instrumental in protecting the green lung of and acts as a carbon sink for the industrial and vehicular emissions of the country's capital which is witnessing rapid growth in its pollution level each year. The ridge, it is averred, is a potential shelter belt against advancing desertification and has been notified a wildlife sanctuary and reserve forest by . Regarding the mining activities, it is averred that for extraction of Badarpur (Silica sand), there is large scale mining activity on the Haryana side just adjacent to the wildlife sanctuary of the ridge which activities threaten the sanctuaries habitat and also pumping of large quantity of ground water from mining pits. It was also stated that the ground water level was being depleted as a result of the mining activity. Further, the query dust that comes out of mining pits is a serious health hazard for human population living nearby and also the wild animals inhabiting the sanctuary pointing out that the mining and extraction of ground water had been banned in National Capital Territory of Delhi and the ridge being protected as per the order of this Court, it is necessary, that the ridge on the Haryana side is also protected - that being the extension of the range and, therefore, mining, withdrawal of ground water and destruction of flora, etc. should also be restricted outside Delhi or at least upto 5 kms. from Delhi-Haryana border towards Haryana. On 6th May, 2002, this Court directed the Chief Secretary, to stop, within 48 hours, all mining activities and pumping of ground water in and from an area upto 5kms. from Delhi- Haryana border in the Haryana side of the ridge and also in the Aravalli Hills. The question to be considered is whether the order shall be made absolute or vacated or modified. ", "Our examination of the issues is confined to the effect on ecology of the mining activity carried on within an area of 5 Kms. of Delhi-Haryana Border on Haryana side in areas falling within the district of Faridabad and Gurgaon and in Aravalli Hills within Gurgaon District. The question is whether the mining activity deserves to be absolutely banned or permitted on compliance of stringent conditions and by monitoring it to prevent the environmental pollution. ", " Visits In terms of the order passed by this Court on 22nd July, 2002, () was directed to give a report with regard to environment in the area preferably after a personal visit to the area in question without any advance notice. It may be noted that was constituted by under notification dated 29th January, 1998 issued in exercise of power under Section 3(1) & (3) of the Environment (Protection) Act , 1986 (for short, 'the EP Act') Mr. was appointed its Chairman. The was constituted with a view to protect and improve the quality of environment and preventing, controlling and abetting environmental pollution. has also the power to deal with environment issues pertaining to National Capital Region which may be referred to it by . The has jurisdiction over the National Capital Region as defined in clause (f) of Section 2 of the National Capital Region Planning Board Act, 1985. The Districts of Gurgaon and Faridabad are part of the National Capital Region, under Section 2(f) read with the Schedule of the said Act. The Chairman of the is a convenor member of . made a surprise visit to the area to see the mining sites. The mining sites visited are located in the villages of Anangpur, Pali, Mohabatabad and Mangar, which fall within the notified area of 5 km radius from the Delhi border in the Faridabad district. also visited mining sites that are located outside the notified zone in Kot area, also held consultation with the officials of and obtained their opinion on this matter. On August 7, 2002, members of the visited the mining sites located within five km radius from Delhi border. The objectives of the visit, as per , were as follows : ", "1. Assessment of the level of compliance with the conditions laid down in the regulatory procedures like the No Objection Certificate (NOC) granted by authorities to the mine owners; ", "2. Evidence of land and habitat degradation in and around the mining sites; ", "3. Evidence of misuse and shortage of ground water in the area; ", "4. Assessment of the implication of such activities for the local ecology and drinking water sources in the area. ", "During the visit, prima facie, found evidence of clear violation of some of the key conditions of order of this court dated May 10, 1996. Ist Report and Recommendations The gave its report dated 9th August, 2002. It would be useful to reproduce the said report in extenso as under: \"Anangpur area and its vicinity : inspected the mining sites owned by and Company as well as at least 5 other mining sites in this area, which is not clear who owns. At the time of visit there was no mining taking place. So members assessed level of compliance with some of the key conditions laid down in the NOCs. There was clear evidence of violation of the following conditions. i. The excavated pits should be filled with fly ash or municipal solid waste in the bottom layers. The top soil should be used as a top layer while filling the pit. Land reclamation and tree plantation should be done in a planned manner over the reclaimed mine pits. ", "ii. The applicant shall not discharge any effluent or groundwater outside their lease premises and shall take appropriate measures for rainwater harvesting and reuse of water so as not to affect adversely the ground water table of the area. No mining operation shall be carried out in the water table area. ", "iii. The green belt proposed in the environment management plan around the proposed mining lease area and along the road side shall be developed. ", "The most serious violation noticed by the was the continuation of mining even after reaching the ground water level which has been disallowed by the regulatory agencies. Photographs taken by , which show deep mining pits have turned into large lakes of ground water. In this mining lease area members saw extensive and deep water bodies. The water was blue, indicating that this was groundwater and not surface water runoff collected in the pits. Even more serious violation noticed was configuration of water pipes laid out to draw water out of the pits to throw them over hills and let the water flow out. This is a grave misuse of precious ground water in an area where ground water is the only source of water for the local population - both urban and rural. ", " members talked to local villagers who complained that water table in the area has gone down over a period of time and that the village is facing water shortage. While earlier ground water could be tracked at the depth of 30-35 ft. now deep bore wells have been dug to get drinking water, in addition, noise and dust pollution from the mining sites are a problem. ", "Goodwill mine in Pali village : found similar violation of conditions and evidence of mining sites reaching the level of ground water in deep pits and pipes fitted to drain out water here as well. ", "During the long drive to various mining sites, could not see any credible sign of green belt along the roads. Moreover, one important condition of NOCs is that \"a safe distance should be maintained from the road to overburden dumps and the mine pits in accordance with the directions/notifications of the department of environment, Haryana and bureau of mines.\" But noticed mining sites very close to the roads and also very close to the ecologically sensitive area of Asola sanctuary near the mines. Stone crushing sites in Pali : has inspected the stone crushing sites in the area. All sites had a lot of material and trucks being loaded. It is difficult to establish if these are the left over material from the past or were products from banned sites or from sites from outside the notified area. was informed that after the directive of May 2002, the stone crushers were not being operated, except between the hours of 5 am to 9 am. was, therefore, unable to verify the working conditions of these crushers. But it did not find any evidence of afforestation as stipulated by the directive or any evidence of dust minimizing equipment. ", "Mining around Mangar village : Again the same situation was found around Anangpur. The villagers interviewed here were caught between the devastation of the mines, desperate shortage of drinking water and the only livelihood option that these manual stone quarries provided. Legal mining in Kot area : As mining is banned along the 5 km radius from the Delhi border, also visited some mines that are outside the notified area to ascertain the state of the environment. In this area, surface mining is being done and not deep mining. Therefore, as yet, the groundwater reserves are not being touched in this region. The entire area was like a giant dust field. We saw no evidence of any afforestation or even dust minimising efforts being undertaken in the areas that are being mined. We did see one tanker of water, which was sprinkling the roads, unable to stop the dust from swirling. could not see any protection for the workers from dust. As this area will clearly emerge as a major mining in the future, it is important that the mining area is properly demarcated and environment management plan implemented to enable scientific mining to minimize degradation of the environment. ", "Faridabad-Gurgaon road : saw mining alongside the road. Though the mines were closed because of the Hon'ble court directive, saw vast pits and mining activity in this area. This is the road for the proposed bypass from Delhi. ", "3. The present laws and regulations in the area We have assessed the current applicable laws and regulations in the area, which govern land use and mining so as to understand what efforts have been made by different agencies to ensure compliance. ", "? In may 1992, parts of the Aravalli range were declared ecologically sensitive under the Environment (Protection) Act . Under this notification, certain activities - including all new mining operations, including renewals of mining leases - are restricted and permission has to be sought from . This notification is valid for reserved forests in the districts of Gurgaon in Haryana and Alwar in Rajasthan. ", "? In August 1992, had issued a notification under the Punjab Land Preservation Act 1900, banning the clearing and breaking up the land not under cultivation, quarrying of stone... in the Badkal area without prior permission of the forest department. This ban was for 30 years. Earlier it had already issued a similar notification for the Pali area for 25 years. ", "? In 1996, banned all mining activity within 2 kms of the Badkal and Surajkund tourist resorts. ", "? In the same order, it ordered that mining leases within the area from 2 km to 5 km radius shall not be renewed without obtaining no-objection certificates from as also (). It stipulated that \"unless both the boards grant no objection certificate, the mining leases in the said area shall not be renewed\". ", "? Mining in the 2-5 kms was allowed under condition that there would be strict adherence to the environment management plan laid down by the . It has to be noted here that the had in its report to in 1996 stated that the \"deep mining for silica is causing an ecological disaster\". has recommended that mining activity \"should be stopped within a radius of 5 kms from Badkal and Surajkund. The subsequent report of dated 20.4.1996, recommended green belt at 1 km radius all around the boundaries of the two lakes. On this basis, directed that radius be extended to 2 kms for a green belt and to cushion the impacts of air and noise pollution. ", "? in its order asked the agencies to ensure enforcement of the recommendations of NEERI. It directed that \"failure to comply with the recommendations may result in the closure of the mining operations.\" ", "4. Compliance and enforcement : absent and missing To discuss the future strategy for this area, it would be important to assess the track-record of the different agencies in ensuring that the previous orders and directives are enforced and complied with. ", "1. No mining within 2 kms of Badkal and Surajkund : Probably enforced. But difficult to assess as the area is hilly. ", "2. Mining within 2-5 kms should get permission from and . The has issued 2 NOCs, dated December 20, 2001 and May 6, 2002. No further record has been found of NOCs given for mining in this area. has not been able to find the NOCs granted by the . ", "Compliance with the environmental management plans recommended by as directed by . ", " ", "No. ", "Directive Enforced or not ", "1. 200 mts wide green belt along Surajkund and Badkal Shrubs and wild growth. ", "No real evidence of good afforestation. ", "2. 100 mts wide green belt outside mining lease boundary Definitely not done. did not see afforestation, except for some recent plantation of dying and dead trees in one or two places. The sign boards were more prominent than the trees they were supposed to show. ", "3. 100 mts open peripheral area around stone crusher zone with green belt Not done ", "4. Green belt on either side of the road between Surajkund and Badkal. ", "We saw large scale construction on this road ", "- from schools to management colleges and housing colonies. ", "5. Mining should commence only after the environmental management plan (EMP) is approved by a designated authority There is no evidence of an environmental management plan being adhered to in this region. ", "Adherence to the conditions of the No-objection Certificate granted by for mining S. ", "No. ", "Directive Enforced or not ", "1. Mining to be done with approved mining plan No evidence ", "2. Excavated pit to be filled by fly ash or municipal solid waste in the bottom layers. ", "Overburden should be used in the middle layer. Top soil on top layer and afforestation. ", " saw no evidence that this recommendation had even been attempted to be followed. All abandoned mines were left open and degraded. ", "The entire region was pockmarked with deep holes and overburdens. ", "3. No discharge of effluent or groundwater outside lease premises. Must take measures for rain water harvesting and reuse of water so as not to affect the groundwater table in the areas. No mining operations shall be carried out in the water table area. ", "Not done. Gross violation. See section on water for details. ", "4. Ambient air quality standards to be complied with. ", "No evidence. Mine was closed. ", "5. Noise level at the boundary shall conform with noise standards No evidence. Mine was closed. ", "6. Green belt around lease area and roadside Not done. ", "7. Clearance of groundwater board for the usage of the groundwater will be obtained, for the conservation of groundwater and to ascertain that there will be no impacts on the groundwater table of the area. ", "No evidence. ", " has not given any clearance that we could ascertain. ", "From the above, it is clear that little or nothing has been done to seriously comply with the directives of as well as to enforce the regulations and conditions laid down by the authorities for environmental management of the mining areas. ", "5. Impact on groundwater reserves It has been argued by in its IA no.1785 of 2001 that the expert committee constituted by it under the Chairmanship of the principal conservator of forests has submitted that there is a water divide between the two boundaries of the two states which prevents the flow of water from Delhi side to Haryana side. It has, therefore, argued that the mining on the Haryana side is not affecting the water balance in the Delhi side of the ridge. ", "It has further said that only in four pits the groundwater was pumped regularly and in two pits occasionally. Therefore, it has argued that little or no impact on groundwater reserves is possible. 5.1 requested () for its opinion. The Board has based its recommendations on the data available with it as well as a field survey. ", "The key issues are : ", "1. On the issue of the ridge providing a water divide between the two states, the has maintained that while the surface water divide follows the Delhi-Haryana border, except in the catchment of Bhuria Nala, `the surface water divide may not be the groundwater divide in the strict sense due to secondary porosity and also flat topped nature of the hills.' It also states that the Aravalli hills are highly fractured, jointed and weathered making the major recharge zone for the surrounding areas. ", "2. On the impact on the groundwater reserves due to mining, the Board has found that its observation wells have shown an increase in groundwater levels in Anangpur, Mangar, after the mining has been stopped in May. Therefore, in spite of monsoon failure and continued abstraction of water, the observation wells have noted increased water levels within just 2 months of the mining being closed. ", "The groundwater levels in a tube well monitored in Mewla Maharajpur during mid July and first week of August showed a rise of 0.18 metres, A higher rise - 0.71 to 0.78 metres was observed in the two tube wells near the Mangar mines and Pali mines in the two months since the mines were closed. This clearly points to the impact of mining on groundwater reserves. ", "This fact was also confirmed in the interviews done by at site. ", "3. also notes that contrary to what has been claimed, the mined water is not being pumped into abandoned pits to recharge the groundwater. Instead the groundwater pumped is discharged into the surrounding nalas, leading to \"wastage\" of groundwater. For instance, in the case of Anangpur mines, the water was pumped into the Bhuria Nala and in the case of Pali, the groundwater was discharged into a nala to the Badkal lake and from Manger mine towards Dhauj lake causing \"enormous losses to groundwater resources of the area\". The mined water is also full of silt, which reduces recharge as well. ", "4. Furthermore, notes that the large surface lakes in the mines are leading to huge losses of groundwater through evaporation. ", "5. () has notified these areas - South district of NCT Delhi, Faridabad, Ballabhgarh Municipal Corporation area, Gurgaon town as water stressed areas and has put regulatory measures on ground water development in these areas. ", "Given all this, concludes that the \"dewartering of mines in the Aravalli hills has affected groundwater regimes of the mine area as well as buffer zone resulting in the depletion of ground water resources.\" ", "5.2 Compliance with groundwater related regulations The NOC given by , includes an explicit condition regarding ground water : ", "That the mine owner will ensure that there is no discharge of effluent of ground water outside lease premises. They must take measures for rain water harvesting and reuse of water so as not to affect the groundwater table in the areas. Most importantly, it stipulates that no mining operations shall be carried out in the water table area. ", "This condition has been grossly violated. Even the Haryana government's affidavit in court accepts that pumping of ground water is taking place, though it attempts to soften the issue by arguing that it is only being done in a few cases. Under this condition, mining is not allowed in the water table area. saw deep and extensive pits of mines with vast water bodies. also saw evidence of pumps and pipes being used to drain out the ground water so that mining could continue. Therefore, the miners are mining for silica, but also in the process, mining and destroying the ground water reserves of the areas. In times of such water stress and desperation, this water mining is nothing less than a gross act of wastage of a key resource. This time the stress has been further aggravated by the failure of monsoon. Notices have been issued in the nearby housing colonies stating that fall in groundwater table due to lack of rains is responsible for water shortage in the area this season. This only indicates how important it is to conserve ground water in the region for long term sustainability of drinking water sources. Ground water is the only source of drinking water here.\" ", "On the basis of study and visit as well as the report of , made the following recommendations : \"1. The ban on the mining activities and pumping of ground water in and from an area upto 5 kms. from the Delhi-Haryana border in the Haryana side of the ridge and also in the Aravalli Hill must be maintained. ", "2. Not only must further degradation be halted but, all efforts must be made to ensure that the local economy is rejuvenated, with the use of plantations and local water harvesting based opportunities. It is indeed sad to note the plight of people living in these hills who are caught between losing their water dependent livelihood and between losing their only desperate livelihood to break stones in the quarries. It is essential that seriously implements programmes to enhance the land based livelihood of people ? agriculture, animal care and forestry. Local people must not be thrown into making false choices, which may secure their present but will destroy their future. Already, all the villages visited by complained of dire and desperate shortages of drinking water. Women talked about long queues before taps to collect water. ", "Clearly, water resources of the region are critical inputs to development and cannot be wasted and destroyed like this. The state government must come up with strategies to involve local communities in the future development of this region. ", "We have been given to understand that under the mining lease, 10 per cent of the royalty is to be given to local villagers. We have also understood that the turnover is of the mining operations in this area is substantial ? between Rs.50 lakhs to Rs. 1 crore a day were the gross estimates provided to us. However, we do not have any estimate of the money that has been given to villagers from this revenue. But there was little evidence in these poor and destitute villages that any effort had been made to share the proceeds with them. ", "3. must be consulted urgently about what should be done with the huge standing water in the area. This is a valuable national resource and the Board should be asked if the water is best conserved by covering it to stop evaporation or should it be used for recharge and storage with further water harvesting efforts. ", "4. () should be asked to extend the notification under the Environment (Protection) Act to the Faridabad part of the Aravalli and ridge as well. Currently, the notification is only for Gurgaon district. This notification declaring it an ecologically sensitive area will help to regulate the activities in this region. ", "5. It is not clear to us if adequate planning for water is being done in the large scale construction activities being undertaken in this area. This aspect is outside the purview of this report but needs to be examined carefully. ", "6. It must also be noted that Gurgaon- ", "Faridabad road is being proposed as the major bypass for the city of Delhi. will note its directives on the air pollution case in this regard. It has been said to the court in that matter that is intending to widen the road and bids have even been issued to this effect. Therefore, it is all the more important that the mining activity along the road must not be allowed. The 5 kms. ", "ban from the border of Delhi will take care of this requirement. ", "7. would also recommend that the mining area outside the 5 kms. area must be demarcated and regulated. In this context, would like to draw the attention of the court to the violations and gross disregard for regulations found in the present mines. It is not out of place to mention that these mines are owned by very powerful and highly placed individuals in the establishment. In a related case has directed on 20.4.2001 a enquiry on the basis of a public interest litigation filed by a journalist. In its order maintained that its examination has found evidence that illegal mining operations are going on in the area. also noted the bias of to shield the offenders and has said that because there is prima facie evidence of the involvement of a `person who holds the high position of the cabinet minister in the state', the enquiry should be done by . This enquiry is still ongoing. ", "During the examination of the case, was told of other persons involved in the mining activity who are highly influential and part of the ruling political parties in the state and . ", "In this respect, would recommend that tighter and constant monitoring of the area must be done by a agency. To increase accountability, would also recommend that the environment management plan (EMP) for the mining area as well as the conditions of the should be made a public document. All other subsequent monitoring reports of this region must be available publicly, preferably on the website of the monitoring agency.\" ", "With the report, a note given by the Chairmen, on impact of pumping of ground water from mines and ground water regime in mining area and its buffer zone in Aravalli hills of NCT Delhi, Faridabad and Gurgaon Districts of Haryana was also annexed. The said note reads as under : ", "Based on available data with and a quick survey in and around mining area in Aravalli hills, following observations are made - ", "\"1. The area under consideration forms part of Aravalli range from where mining of silica- sand and other construction material was being carried out. The mining of silica sand was mainly carried out below water table by dewatering the mines whereas mining for other construction material is carried out above water table. The major mining areas are Anangpur, Pali, Manger and Mohabbatabad. ", "2. The surface water divide in the area approximately follows Delhi-Haryana boarder except the catchment of Bhuria Nala flowing in Haryana State, which extends in Asola area of Delhi State also. The formations in the Aravalli hills are highly fractured, jointed and weathered making it the major recharge zone for the surrounding areas. The surface water divide may not be ground water divide in strict sense due to secondary porosity and also flat-topped nature of the hills. ", "3. The pumping of ground water during mining of Silica sand affects ground water regime of surrounding area. During the field visit, it was reported by local people that during the dewatering of mines there was decline in ground water levels and reduction in discharge in surrounding wells whereas after stoppage of pumping the rise in water levels and increase in discharge has been reported. In few observation wells on down stream side of mines rise in ground water levels has been observed in Anangpur, Manger and villages after stoppage of abstraction of ground water from deep mines. The ground water levels in a tube well monitored in Mewla Maharajpur during mid July 2002 and first week of August 2002 were 24.39 and 24.57 m. below ground level respectively, showing a rise of 0.18 m. Ground water levels in tube well located at temple near Manger mine in second week of July 2002 and first week of August, 2002 were 51.70 and 49.99. m. below ground level respectively showing a rise of 0.71 m. Similarly, ground water level in a tube well at Indernagar in Delhi area near Pali mine in third week of June 2002 and first week of August 2002 were 59.68 and 58.90 m. ", "below ground level respectively showing a rise of 0.78 m. The stoppage of dewatering of mines has resulted in rise of ground water levels in surrounding areas. ", "4. It has been observed that drainage pattern of the area has been modified due to haphazard mining and dumping of waste material which has bearing on natural path of ground water flow in the area. ", "5. It is claimed that abandoned pits act as recharge pits and in some cases the pumped ground water is put in these pits so there may not be substantial modification in the conditions of ground water regime. All the ground water pumped out from Anangpur mine has not been put into abandoned adjoining pits resulting in wastage of ground water by discharge into Bhuria Nala. Observation have indicated that Bhuria Nala which was ephemeral stream became a perennial stream during mining operations and now flow has stopped after closure of mining activity. Similarly, pumped out ground water from Pali mine was being discharged in a easterly flowing nala to Badkal Lane and from Manger mine in a south westerly flowing nala towards Dhauj lake causing enormous losses to ground water resources of the area. Further, the pumped out water cannot be recharged effectively due to its high silt content. In silica sand mines the water table has been intersected and in presently exposed to the atmosphere causing huge losses to ground water through evaporation. ", "6. Studies conducted by have revealed that water levels in Faridabad new town which falls in buffer zone of mine area have declined by 1.44 m/year. The decline of ground water level in the towns has been attributed to over development of ground water for domestic and industrial uses which is totally dependent on ground water. The pumping out of ground water for mining of silica sand in recharge zone might have aggravated the declining trend of ground water levels which otherwise would have contributed to the buffer zone. ", "7. has notified South district of NCT Delhi and Faridabad and Ballabhgarh area and Gurgaon town and adjoining industrial area in August 2000, October 1998 and December 2000 respectively mainly on consideration of over development of ground water resources resulting in substantial decline in ground water levels. Regulatory measures on ground water development have been imposed in these areas. ", "8. Therefore, it is observed that dewatering of mines in Aravalli hills has affected ground water regime of the mine area as well as buffer zone resulting in depletion of ground water resources.\" ", "When the aforesaid report came up for consideration, some of the mine owners submitted that their mines had not been inspected by . Particulars of the mines that were stated to have not been inspected were filed on 23rd September, 2002. was requested to carry out the inspection of the said areas/mines. The Committee was also permitted to associate such other organizations or persons as it may deem fit and proper for the purpose of inspection. 2nd Report and Recommendations In terms of the aforesaid order, 26 mines were inspected and report dated 21st October, 2002 was submitted. The observations made as a request of inspection in regard to each mine are as follows : \"The numbers indicated in parenthesis are serial number of mines given in the list of mines furnished by , senior advocate to that was forwarded to . ", "1. (no.9) Name of Mine/Area : New Anangpur Silica Sand Mines M/s S.P. Sethi, Location : Village New Anangpur, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity : 186.52 hec. ", "Mineral Extracted : Silica Sand Mines Status of Mining : Above groundwater level Whether groundwater is extracted : No. Status of environmental clearances : No clearance given. No environmental management plan. This mine is located very close to the Delhi border (in close proximity to the Asola sanctuary). members were shown two pits, which were not being worked currently. There was no groundwater exploitation seen in these pits. Only brown stagnant rain water was seen. But what was very clear was that this mining lease was adjoining the boundary of Delhi. Only recent plantation of sapling was noticed along the path. ", "2. (13) Name of Mine/Area: Anangpur Silica Sand Mines M/s. Mohan Ram and Co. ", "Location : Village Anangpur, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity : 175.00 Hec. ", "Mineral Extracted: . Status of Mining : Below groundwater level Whether ground water is extracted : Yes Status of environmental clearances : NOC granted by state pollution control board for renewal of lease in 1999. No environmental management plan. ", "This mine has large pits where sand and silica was being extracted. This was a working mine and had large amount of water in the two pits. members also saw a pipe, which was currently unused, meant for pumping out the water from the pits. The pits were at least 100-150 feet deep and the groundwater had been clearly exploited for some time. Large amount of overburden were also seen in the area. ", "3. (12) Name of Mine/Area: Anangpur Silica sand mines, M/s. S.P. Sethi, Anangpur. ", "Location: Village Anangpur Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 489.34 hec. ", "Mineral Extracted : Silica sand, China clay, ordinary sand, stone road material (RM) and masonry stone (MS) Status of Mining : Below groundwater table Whether ground water is extracted : Yes. Status of environmental clearances: No clearance given. No environmental management plan. The mining pit here has tuned into a huge groundwater lake, Groundwater is fully exposed. Extensive oberburden could be seen near the pits. It was very evident that no major efforts were made to create plantation in the area. Some new and young saplings could be seen along side the paths leading to the pits. Clearly these were planted very recently. ", "4. (8) Name of Mine/Area: Anangpur Silica sand mines, M/s. Rajdhani Minerals Corporation. ", "Location: Village Anangpur Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 188.47 hec. ", "Mineral Extracted : Silica sand, China clay, ordinary sand, stone RM and MS Status: seen one closed pit. Did not see any water. ", "Status of environmental clearances: granted by . ", "5. (7) Name of Mine/Area: Mewla maharajpur Silica sand mines, M/s K.C. Ahuja & Co. ", "Location: Village Mewla Maharajpur Distt.. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 162.905 hec. ", "Mineral Extracted : Silica sand, China clay, ordinary sand, stone road material (RM) and masonry stone (MS) Status : surface mining from the rocks Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. One pit seen, Mostly stone being quarried. Some water seen. No evidence of tree plantation seen in the area. But mine pits are ajoining road. ", "6. (19) Name of Mine/Area: M/s. Ramkrishna Purni Devi.. Location: Village Badkal Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 369.4 hec. ", "(Of this 121 hec. Falls within 2 km of Badkal Tourist Complex where mining has been banned) Mineral Extracted : Silica sand, ordinary sand, road metal, masonry stone and minor mineral Status: mining above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. members saw one pit located next to the border of Delhi. The mining area is hard rock and the pit was being worked for stone. The mining site was at the boundary of Delhi and the Asola sanctuary was seen at a close distance. This mine is also adjoining the road. ", "7. (2) Name of Mine/Area: Co. Proprietor . ", "Location: Village Pali Distt. Faridabad. Mineral extracted : Ordinary stone, road metal, masonry stone Under litigation in of Delhi. ", "8. (11) Name of Mine/Area: , M/s Goodwill Mineral Corporation. ", "Location: Village Pali, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 50.5 hec. ", "Mineral Extracted : Silica sand, China clay, sand Status of Mining : Below water table. ", "Whether ground water is extracted : Yes. Status of environmental clearances: NOC granted by in 1999 for renewal of lease. Asked to comply with conditions laid down by as well. No environmental management plan as yet. ", "A deep pit with extensive water body. Pipes pumps and generators could be seen at the site. Water is extracted from the pit. Very little plantation could be seen at the site. The pit is contiguous to other mines in the area and the extent of groundwater being exploited is massive and the expanse is vast. Some trees have been planted along the roadside. This mine is adjoining the main Delhi bypass of Faridabad-Gurgaon, which is being tendered for a four-lane highway. ", "9. (17) Name of Mine/Area: M/s. Location: Village Pali, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 127.95 hec. ", "Mineral Extracted : Silica, China clay, sand, quartzite Status: Below groundwater table. ", "Whether ground water is extracted : Yes. Status of environmental clearances: No clearance given. No environmental management plan. Large lake of ground water could be seen at the site. The lake apparently covers a few contiguous mining pits. No efforts to create plantation in the area except a few young saplings which seemed to have been planted very recently. Huge overburden could be seen near the pits. This mine is adjoining the main Delhi bypass of Faridabad-Gurgaon, which is being tendered for a four lane highway. ", "10. (20) Name of Mine/Area: M/s. Location: Village Gothra, Mohatabad, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 296 hec. ", "Mineral Extracted : Silica sand, ordinary sand, road metal and masonry stone. ", "Status: Below groundwater table Whether ground water is extracted : Yes. Status of environmental clearances: No clearance given. No environmental management plan. Deep mining pits with large water bodies could be seen. The mine is also contiguous to the other mines so the amount of water that is being exploited is massive and uncontrolled. Huge amounts of overburden were also seen in the area. In this mine some efforts have been made to create plantations and the trees, unlike those seen in other areas, were more mature. This mine is adjoining the main bypass of Faridabad- Gurgaon, which is being tendered for a four-lane highway. ", "11. (22) Name of Mine/Area: M/s. Maruti Minerals. Location: Plot No.1 Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 63.225 hec. ", "Mineral Extracted : Silica sand, China clay, ordinary sand, road metal and masonry stone. Status: above groundwater. ", "Whether ground water is extracted :No . Status of environmental clearances: clearance given. No environmental management plan. Observed surface stone mining. No water seen. New lease and so the mines have not reached ground water levels as yet. But mine ear Delhi bypass of Faridabad-Gurgaon road. ", "12A. (1) Name of Mine/Area: M/s. Seven Mines and Minerals Pvt. Ltd. ", "Location: Plot No.6, Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 59.3875 hec. ", "Mineral Extracted : Ordinary sand, road metal and masonry stone. ", "Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: Clearance given. No environmental management plan. Observed surface stone mining. No water seen. New lease and so the mines have not reached groundwater levels as yet. But mine near Delhi bypass of Faridabad-Gurgaon Road. ", "12B. ", "Name of Mine/Area: M/s. Seven Mines & Minerals Pvt. Ltd. ", "Location: Plot No.8, Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 63.75 hec. ", "Mineral Extracted : Ordinary sand, road metal and masonry stone. ", "Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: Clearance given. No environmental management plan. Observed surface stone mining. No water seen. New lease and so the mines have not reached groundwater levels as yet. But mine near Delhi bypass of Faridabad-Gurgaon road. ", "13. (25) Name of Mine/Area: M/s. Ashok Minerals industry Location: Plot No.7, Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity:67.00 hec. ", "Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Observed surface stone mining. No water seen. New lease and so the mines have not reached groundwater levels as yet. But mine is on the Delhi bypass of Faridabad-Gurgaon road. ", "14. (23) Name of Mine/Area: M/s. Jaikrishan Impex Pvt. Ltd. ", "Location: Plot No.2 & 3, Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 44.785 hec and 56.4375 hec. Mineral Extracted : Stone mining Status: Below groundwater table Whether ground water is extracted : Yes. Status of environmental clearances: No clearance given. No environmental management plan. Was shown one pit with small water collection. But at a distance seen another pit with large amount of groundwater collected. This mine is being worked and clearly water must have been pumped from the mine. Deep pits seen. But mine is near Delhi bypass of Faridabad-Gurgaon road. ", "15. (10) Name of Mine/Area: M/s. Faridabad Gurgaon Minerals. ", "Location: Plot No.5 Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity:33.0375 hec. ", "Mineral Extracted : Ordinary sand, road metal and masonry stone Status: Below groundwater table Whether ground water is extracted : Yes. Status of environmental clearances: No clearance given. No environmental management plan. Exposed groundwater could be seen. This mine was also been worked. Deep pits seen in this mine. ", "16. (24) Name of Mine/Area: M/s. Patram Mines and Minerals Pvt. Ltd. ", "Location: Plot No.11, Village Manger, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 126.75 hec. ", "Mineral Extracted : Silica sand and stone Status: Above groundwater table. ", "Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Stone quarry. No water seen. Some efforts have been made to create plantation. ", "17. (18) Name of Mine/Area: M/s. Location: Village Pali, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 44.48 hec. ", "Mineral Extracted : Solica/Ord. Sand & stone, road metal and masonry stone Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Recent lease. Mining activity had recently started. New pit seen and as yet only stone was being quarried. ", "18. (4) Name of Mine/Area: Pali Silica Sand Mines, M/s. S.P. Sethi. ", "Location: Village Pali, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 82.20 hec. ", "Mineral Extracted : Silica/Ord. Sand, china clay stone (road metal and masonry) Status: Below groundwater table Whether ground water is extracted : Yes. Status of environmental clearances: NOC given by in 1999 for renewal of lease. No environmental management plan. Pit with little water seen. Being worked. Large amount of overburden was seen close to mine. 1 hec of plantation created near mine. ", "19. (3) Name of Mine/Area: Pali Silica Sand Mines, M/s. P.K. Sethi Location: Pali, Distt. Faridabad. ", "Total Area of Land on lease/Actual area under mining activity: 162 hec. ", "Mineral Extracted : Sand china clay, stone (road and masonry) Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Pit with no water seen. Being worked. Large amount of overburden was seen close to mine. ", "20. (5) Name of Mine/Area: , M/s. Lucky Minerals Location: Village Pali, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 261.36 hec. ", "Mineral Extracted : Sand, china clay stone (road metal and masonry) Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Pit with no water seen. Being worked. Large amount of overburden was seen close to mine. Nominal plantation seen. But area with lessee is very large over - 261 ha - and no idea if other mines in the area have reached water levels. ", "21. (6) Name of Mine/Area: Mohabatabad Silica sand mines, M/s. P.K. Sethi Location: Village Mohtabad, Distt. Faridabad. Total Area of Land on lease/Actual area under mining activity: 399.59 hec. ", "Mineral Extracted : Sand, china clay, stone (road metal and masonry) Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Shown pit where stone is being quarried. But area with lessee is very large over - almost 400 hec. - and no idea if other mines in the area have reached water level as yet. ", "22. (14) Name of Mine/Area: M/s. and Co. Location: Village Bandhwari, Distt. Gurgaon. Total Area of Land on lease/Actual area under mining activity: 91.20 hec. ", "Mineral Extracted : Silica Sand, Ord. Sand, china clay, quartz & stone mine. ", "Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: Clearance given. No environmental management plan. Stone quarry. Very recent lease granted and clearance has only been done in April 2002. Large seemingly abandoned, pits seen on road. Labourer colony near on road near mine and a number of trucks seen on this road carrying material. No plantation seen. ", "23. (15) Name of Mine/Area: Mr. Location: Village Balola, Distt. Gurgaon. Total Area of Land on lease/Actual area under mining activity: 19.15 hec. ", "Mineral Extracted : Silica Sand and china clay. Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: Clearance given. No environmental management plan. Stone quarry Recent lease and clearance of January 2002. No plantation seen. The mine is on the main Delhi bypass - Gurgaon-Faridabad road, which is being developed as a four-lane bypass. ", "24. (16) Name of Mine/Area: Mr. Location: Plot No.3, Village Behrampur, Distt. Gurgaon. ", "Total Area of Land on lease/Actual area under mining activity: 94.05 hec. ", "Mineral Extracted : Silica sand quartzites. Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Stone quarry. Recent lease. No plantation seen. But near village. As this mine is near the five km radius, other mines with crushers and blasting seen at close distance. ", "(11B - 22) Name of Mine/Area: M/s. Maruti Minerals Location: Village Haidpur, Distt. Gurgaon. Total Area of Land on lease/Actual area under mining activity: 18.125 hec. ", "Mineral Extracted : Stone Status: Above groundwater table Whether ground water is extracted : No. Status of environmental clearances: No clearance given. No environmental management plan. Stone quarry. No plantation seen. Near habitation of Gurgaon town. ", "25. (21) Name of Mine/Area: Mr. Location: Village Nathpur, Distt. Gurgaon. Total Area of Land on lease/Actual area under mining activity: 5.996 hec. ", "Mineral Extracted : . ", "Status: Above groundwater level (surface mining) Whether ground water is extracted : No. Status of environmental clearances: No Clearance given. No environmental management plan. Stone quarry. No plantation seen. Mine on main Delhi-Gurgaon road at the border of Delhi. Mine lease recently awarded at the edge of the DLF residential colony. Allegations that illegal mining is being done at the Delhi side of this mine. Next to the protected area of Delhi forest. ", "In respect of the ground water regime the report states that : \"The key issue to examine is the impact of mining on the ground water regime in the region. It is evident from the inspection done by that ground water reserves are being exploited and destroyed, it must be stressed that it is not a matter of individual mines reaching ground water levels or not, the issue to examine is the water regime of the entire area.\" ", "The report further states that \"during its inspection to the mines, , Minister of in the State and also a mine owner told members that the impact of ground water abstraction is minimal. He maintained that the miners were harvesting the water and not allowing it to flow to the Yamuna, where it would be lost to the State. A perusal of the reports of the ground water regime shows that this contention cannot be upheld.\" ", "It is also stated in the report that \"the geology and geomorphology of the area comprises oldest exposed lithology with upland units. The rock type is mainly quartzite and these rise 150-200 metres above ground level in the quartzite's the ground water aquifers occur in the weathered zones and interspaces within interconnected joints and fractures. According to the , the unconfined aquifer is about 50 metres thick. But between the 50-110 metre below ground level (bgi) a thick clay layer ranging in thickness from 25-60 metres separates the top unconfined aquifer from the confined aquifer. ", "The mines inspected by were below 150 feet (45 metres) and on checking it was found that most mines were further operating at 20-100 feet (6-30 metres) below water levels. This means that the mines are abstracting water from the confined aquifer. As annual rainfall mostly replenishes the unconfined or top aquifer levels, the mining activity is destroying a non-renewable resource. saw deep and extensive pits of mines with vast waterbodies ? stretching at times to a kilometer and more. also saw evidence of pumps and pipes being used to drain out the ground water so that mining could continue. Therefore, the miners are mining for silica, but also in the process mining and destroying the ground water reserves of the areas. ", "The NOC given by includes an explicit condition regarding ground water : \"That the mine owner will ensure that there is no discharge of effluent or ground water outside lease premises. They must take measures for rain water harvesting and reuse of water so as not to affect the ground water table in the areas. Most importantly, it stipulates that there should be no mining operations shall be carried out in the water table area.\" ", "The report of states very categorically that the ground water table is already at a critical stage in Faridabad. It states, `The stage of ground water development of Faridabad block is 89.02 percent in dark category and no further abstraction of ground water should be carried out to avoid any adverse environment impact on ground water regimes. Thus no additional tube wells are advisable to be constructed for community water supply scheme even though they may not affect the storage in Badkhal lake.' The report further states that `The domestic water supply to Faridabad town has to be catered and there are no surface water source which can be tapped.' further observes that most of the mining is happening inside the municipal area of Faridabad. In fact, states in the letter dated October 12, 2002, `it is submitted that the mineral rights of the mines vests with ....The surface rights of villages Badkhal, Pali, Gothra, Mohabtabad, Anangpur, Mewla Maharajpur are with municipal corporation, Faridabad, and Manager revenue estate are with gram panchayat.' Sensitivity of this region is further accentuated by its close proximity to the reserved forests of Asola sanctuary located at the border of Delhi and Haryana and other ecologically sensitive areas like Surajkund and Badkhal lake. ", "Even in Gurgaon, the report indicates that the ground water scenario is grim. According to , the `ground water development of Guirgaon block is 124 per cent, indicating that the entire block in which Gurgaon town is situated is over exploited.' The ground water levels are also falling dangerously according to the report of which recommends strict regulatory measures for ground water use. The , while reaffirming the recommendations that had been made in its earlier report dated 9th August, 2002, made the following recommendations : ", "\"The overall assessment of the environmental impact of the mining activities in the area especially its implication for ground water level in the region reaffirms 's assessment presented in its earlier report. upholds its earlier recommendations made vide the report submitted to on August 9, 2002. ", " is concerned that if mining is allowed to continue in this area, it will have serious implications for the groundwater reserve which is the only source of drinking water in the area. has also noticed uncontrolled construction activities that will expand urban habitation considerably in future. Unless immediate measures are taken to conserve and augment water resources in the area acute survival crisis is expected. Interviews with local villagers in the vicinity of mines confirm that water shortage is already a serious problem in the region. The extent of degradation in and around mines is the evidence of failure to enforce basic rules for ecological safeguards. Recent attempts at planting trees are cosmetic. Exposed ground water lakes observed in mining sites only reconfirms the worst fears. If mining could not be stopped in so many pits even after reaching groundwater level there is no guarantee that even some of those mines still at the surface level will abide by the stipulated norms when they reach the water table.\" ", "Submissions for Confirming or varying Order dated 6th May, 2002 Having regard to the ground realities as reflected in the aforesaid reports, should the order passed on 6th May, 2002 be varied is the question? The continuance of the order has been strenuously objected to by the mining lease holders and also by . Various applications have been filed seeking vacation of the order and in support thereof, submissions have been made mainly by Mr. , Dr. , Mr. , Mr. and Mr. representing the lease holders and Mr. , learned Additional Solicitor General representing . We have also heard Mr. and Mr., learned Additional Solicitor Generals for , , Mr. and Mr. (in support of IA No.1825/2002 filed by the villagers). Mr. , learned and Mr. , Advocate/petitioner-in- person and Mr. for have made submissions in support of closure of mining activity and for making the order dated 6th May, 2002 absolute by prohibiting all mining activities and pumping of ground water in and from an area upto 5 kms. from Delhi- Haryana Border in the Haryana side of the Ridge and also in the Aravalli Hills. ", "Notifications Regarding Mining on Aravalli Hills The notification dated 7th May, 1992 issued by , Government of India under Section 3(2)(v) of the EP Act read with Rule 5 of the Rules made under the said Act has considerable bearing on the aspect of mining in Aravalli Hills. The notification, inter alia, bans all new mining operations including renewals of mining leases and sets out the procedure for taking prior permission before undertaking such an activity. The notification, in so far as material for the present purposes, reads : ", "\"S.O.319(E) - Whereas a Notification under Section 3(1) and Section 3(2) (v) of the Environment (Protection) Act , 1986 inviting objections against restricting certain activities in specified area of Aravalli Range which are causing Environmental Degradation in the Region was published in the Gazette of India Part II- Section 3 sub-section (ii) vide S.O. 25 (E) dated 9th January 1992; ", "And whereas all objections received have been duly considered by ; Now, therefore, in exercise of the powers conferred by sub-section (1) and clause (v) of sub- section (2), of Section 3 of the Environment (Protection) Act, 1986 , read with rule 5 of the Environment (Protection) Rules, 1986 hereby prohibits the carrying on the following process and operations, except with its prior permission, in the areas specified in the Table appended to this Notification : ", "(i) ...... ", "(ii) (a) All new mining operations including renewals of mining leases ", "(b) Existing mining leases in sanctuaries/national Park and areas covered under Project Tiger and/or ", "(c) Mining is being done without permission of the competent authority ", "(iii) Cutting of trees; ", "(iv) Construction of any clusters of dwelling units, farmhouses, sheds, community centers, information centers and any other activity connected with such construction (including roads a part of any infrastructure relating thereto); ", "(v) ...... ", "2. Any person who desires to undertake any of the above mentioned processes or operations in the said areas, shall submit an application to the Secretary, , New Delhi, in the attached application form (annexure) specifying, inter alia, details of the area and proposed process or operation. He shall also furnish an Environment Impact Statement and an Environmental Management Plan along with the application and such other information as may be required by for considering the application. ", "(3) The Central Government in shall, having regard to the guidelines issued by it from time to time for giving effect to the provisions of the said Act, grant permission within a period of three months from the date of receipt of the application or where further information has been asked for from the applicant, within a period of three months from the date of the receipt of such information, or refuse permission within the said time on the basis of the impact of the proposed process or operation on the environment in the said area. ", "4. For seeking permission under this Notification, an application in the prescribed form (see Annexure), duly filled in, may be submitted to the Secretary, , Paryavaran Bhavan, CGO Complex, Lodi Road, New Delhi. ", "XXX XXXX XXXX ", "3.(b)(ii) Erodability classification of the proposed land. ", "5.(a) Water balance at site surface and ground water availability and demand. ", "XXX XXXX XXXX ", "12.(a) Environmental Impact Assessment Report: ", "(b) Environmental Management Plan : prepared as per Guidelines of MEF issued from time to time. ", "(c) Detailed Feasibility Report. ", "(d) Proposal for diversion of forest land under Forest (Conservation) Act , 1980 including benefit cost analysis. ", "13. Recommendations of and/or .\" ", "The aforesaid notification, restricting mining activities in Aravalli range is relevant for mining operation in Gurgaon district wherein part of Aravalli hills range exist. ", "The powers vested in in terms of the aforesaid notification dated 7th May, 1992 were delegated to the State Governments concerned, namely, Rajasthan and Haryana by issue of notification dated November 29, 1999 by , . The said notification reads thus : MINISTRY OF ENVIRONMENT AND FORESTS NOTIFICATION New Delhi, the 29th November, 1999 S.O.1189(E).-In exercise of the powers conferred by section 23 of the Environment (Protection) Act, 1986 , (hereinafter referred to as the said Act), read with sub-rule (4) of rule 5 of the Environment (Protection) Rules, 1986, hereby delegates the powers conferred on it to take measures for protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution, to be exercised also by the State Governments as notified in the Notification of the Government of India in the s S.O. NO.319(E) dated 7th May, 1992 subject to certain conditions which are as follows : ", "(i) the State Governments concerned, namely, Haryana and Rajasthan shall constitute an Expert Committee for each state as per the composition given in the Schedule-I annexed to this Notification; ", "(ii) each State Government shall also constitute a Monitoring Committee, under the chairmanship of the District Collector concerned (Gurgaon in Haryana and Alwar in Rajasthan) as given in the Schedule-II annexed to this Notification which shall inter alia monitor the compliance of the conditions stipulated while according environmental clearance by such State Governments and report to such State Government about the violations, if any, and the action taken thereon; ", "(iii) The District Collectors of Gurgaon in Haryana and Alwar in Rajasthan shall be authorised by the respective State Governments to take necessary action under section 5 of the said Act in respect of cases where the project proponents fail to implement the conditions. ", "2. The concerned shall initiate steps to prepare a Master Plan for the development of the area covered by the Notification S.O. 319(E) dated 7th May, 1992 integrating environmental concerns and keeping in view the future land use of the area. This Master Plan shall be prepared by the concerned state agency, approved by the competent authority and finally published within two years from the date of issue of this Notification, in accordance with the procedure laid down in the Town and Country Planning Act or any other similar Act of the respective . The concerned shall implement the Master Plan forthwith after its final publication. ", "3. Any person desirous of undertaking any of the activities mentioned in the Notification No.319(E) dated 7th May, 1992 shall submit an application to the Secretary, of , as the case may be. The applicant shall also furnish environment impact statement and an environment management plan and such other information as may be prescribed by such State Governments. The application after due scrutiny shall be placed before for its recommendations. Based on the recommendations of , the in the State Government concerned shall take a final decision and convey the same to the applicant within three months from the date of receipt of application or when further information has been asked for from the applicant within three months from the date of receipt of such information. ", "4. retains appellate power against rejection of any proposal and constituted under the National Environment Appellate Authority Act , 1997 shall continue as an Appellate Authority against approval.\" ", "Schedule I and II of the notification sets out the composition of and of . Some controversy and confusion in respect of constitution of committees insofar as it relates to appointment of an expert from non-government organization, was brought to our notice but the delegation in favour of State Governments having been withdrawn now, it is not necessary to examine this aspect. , in terms of notification dated 28th February, 2003, has withdrawn the delegation in favour of State Governments. Notification of 27th January, 1994 Regarding Environment Impact Assessment (EIA) Another notification which is of considerable importance on aspect of mining is dated 27th January, 1994, as amended on 4th May, 1994. The notification has been issued by , , in exercise of powers conferred by sub-section (1) and clause (5) of sub-section (2) of Section 3 of the EP Act read with clause (d) of sub-rule (3) of Rule 6 of the EP Rules stipulating that expansion or modernization of any activity (if the pollution load is to exceed the existing one) or a new project listed in Schedule I of the notification shall not be undertaken in any part of India unless it has been accorded environmental clearance by in accordance with the procedure specified in the notification. The issue in these matters is about the interpretation of the notification, its applicability also to mining leases granted earlier to the issue of the notification i.e. at the time of the renewal of such mining lease. The notification dated 27th January, 1994, to the extent material for the present purpose, reads as under : ", "\"S.O.60(E) Whereas a notification under clause ", "(a) of sub-rule (3) of rule 5 of the Environment (Protection) Rules, 1986 inviting objections from the public within sixty days from the date of publication of the said notification, against the intention of to impose restrictions and prohibitions on the expansion and modernization of any activity or new projects being undertaken in any part of India unless environmental clearance has been accorded by or in accordance with the procedure specified in that notification was published as S.O. No.80(E) dated 28th January, 1993: ", "And whereas all objections received have been duly considered; ", "Now, therefore, in exercise of the powers conferred by sub-section (1) and clause (v) of sub- section (2) of section 3 of the Environment (Protection) Act, 1986 read with clause (d) of sub-rule (3) of rule 5 of the Environment (Protection) Rules, 1986, hereby directs that on and from the date of publication of this notification in the Official Gazette expansion or modernization of any activity (if pollution load is to exceed the existing one) or a new project listed in Schedule I of this notification shall not be undertaken in any part of India unless it has been accorded environmental clearance by in accordance with the procedure hereinafter specified in this notification. ", "2. Requirements and procedure for seeking environmental clearance of projects: ", "1.(a) Any person who desires to undertake any new project or the expansion or modernization of any existing industry or project listed in Schedule I shall submit an application to the Secretary, , New Delhi. ", "The application shall be made in the proforma specified in Schedule II of this notification and shall be accompanied by a project report which shall, inter alia, include an Environmental Impact Assessment Report/Environment Management Plan prepared in accordance with the guidelines issued by in from time to time. ", "(b) Cases rejected due to submission of insufficient or inadequate data and plans may be reviewed as and when submitted with complete data and plans. Submission of incomplete data or plans for the second time would itself be a sufficient reason for to reject the case summarily. ", "II. In case of the following site specific projects: ", "(a) mining; ", "(b) to (d) ... ", "(e) prospecting and exploration of major minerals in areas above 500 ha., The project authorities will intimate the location of the project site to in while initiating any investigation and surveys. in will convey a decision regarding suitability or otherwise of the proposed site within a maximum period of thirty days. The said site clearance shall be granted for a sanctioned capacity and shall be valid for a period of five years for commencing the construction, operation or mining. ", "III.(a) The reports submitted with the application shall be evaluated and assessed by , and if deemed necessary it may consult , having a composition as specified in Schedule-III of this Notification. () would be . mentioned above shall be constituted by the or such other body under the Central Government authorised by the in this regard. ", "(b) The said Committee of Experts shall have full right of entry and inspection of the site or, as the case may be, factory premises at any time prior to, during or after the commencement of the operations relating to the project. ", "(c) shall prepare a set of recommendations based on technical assessment of documents and data, furnished by the project authorities, supplemented by data collected during visits to sites or factories, if undertaken, and interaction with affected population and environmental groups, if necessary. ", "Summary of the reports, the recommendation and the conditions, subject to which environmental clearance is given, shall be made available subject to the public interest to the concerned parties or environmental groups on request. ", "Comments of the public may be solicited, if so decided by , within thirty days of receipt of proposal, in public hearings arranged for the purpose after giving thirty days notice of such hearings in at least two newspapers. ", "Public shall be provided access, subject to the public interest, to the summary of the reports/Environmental Management Plans at the Headquarters of . ", "The assessment shall be completed within a period of ninety days from receipt of the requisite documents and data from the project authorities and completion of public hearing where required, and decision conveyed within thirty days thereafter. The clearance granted shall be valid for a period of five years for commencement of the construction or operation. ", "No construction work preliminary or otherwise, relating to the setting up of the project may be undertaken till the environmental and/or site clearance is obtained. ", "IV. In order to enable to monitor effectively the implementation of the recommendations and conditions subject to which the environmental clearance has been given the project authorities concerned shall submit a half-yearly report to . Subject to the public interest, , shall make compliance reports publicly available. V. If no comments from are received within the time limit, the project would be deemed to have been approved as proposed by project authorities. ", "3. Nothing contained in this Notification shall apply to : ", "(a) any item falling under entry nos.3, 18 and 20 of the Schedule I to be located or proposed to be located in the areas covered by the Notifications S.O. No.102(E) dated 1st February, 1989; S.O. 114(E) dated 20th February, 1991, S.O. No.416(E) dated 20th June, 1991 and S.O. No.319(E) dated 7th May, 1992. ", "(b) any item falling under entry Nos.1, 2, 3, 4, 5, 7, 9, 10, 12, 13, 14, 16, 17, 19, 21, 25 and 27 of Schedule-I if the investment is less than Rs.50 crores. ", "(c) any item reserved for Small Scale Industrial sector with investments less than Rs.1 crore. ", "4. Concealing factual data or submission of false, misleading data/reports, decisions or recommendations would lead to the project being rejected. Approval, if granted earlier on the basis of false data would also be to be revoked. Misleading and wrong information will cover the following : ", "-- False information; ", "-- False data. ", "-- Engineered reports. ", "-- Concealing of factual data. ", "-- False recommendations of decisions. ", "SCHEDULE-I (See paras 1 and 2) LIST OF PROJECTS REQUIRING ENVIRONMENTAL CLEARANCE FROM THE CENTRAL GOVERNMENT. ", "1. Nuclear Power and related projects such as Heavy Water Plants, nuclear fuel complex, rare earths. ", "2 to 19 ... ", "20. Mining projects (major minerals) with leases more than 5 hectares. ", "21 to 29 ... ", "XXX XXXX XXXX SCHEDULE III (See sub-para III(a) of Para 2) COMPOSITION OF THE EXPERT COMMITTEES FOR ENVIRONMENTAL IMPACT ASSESSMENT ", "1. The will consist of experts in the following disciplines : ", "(i) Eco-System Management ", "(ii) Air/Water Pollution Control ", "(iii) Water Resource Management ", "(iv) Flora/Fauna Conservation and Management ", "(v) Land Use Planning ", "(vi) Social Sciences/Rehabilitation ", "(vii) Project Appraisal ", "(viii) Ecology ", "(ix) Environmental Health ", "(x) Subject Area Specialists. ", "(xi) Representatives of NGOs/Persons Concerned With Environmental Issues. ", "2. The Chairman will be an outstanding and experienced ecologist or environmentalist or technical professional with wide managerial experience. ", "3. The representative of will act as Member-Secretary ", "4. Chairman and members will serve in their individual capacities except those specifically nominated as representatives. ", "5. The membership of a shall not exceed 15. ", "EXPLANATORY NOTE REGARDING THE IMPACT ASSESSMENT NOTIFICATION DATED 27TH JANUARY, 1994 1 to 3. ... ", "4. Public Hearing Public hearings could be called for in case of projects involving large displacement or having severe environmental ramifications. 5 to 7. ... ", "8. Exemption for projects already initiated For projects listed in Schedule-I to the notification in respect of which the required land has been acquired and all relevant clearances of including NOC from the respective have been obtained before 27th January, 1994, a project proponent will not be required to seek environmental clearance from the . However, those units who have not as yet commenced production will inform the .\" ", "Reference may also be made to a notification issued by the Haryana Government on November 28, 2001 with a view to enforce the recommendations of contained in para 6.1 of its report so far as mining operations in the State of Haryana are concerned. In terms of the notification, and were directed to impose the conditions mentioned in the notification while according environmental clearance. This notification, it seems, was issued in the purported attempt to comply with the directions of this Court as contained in the order dated 10th May, 1996 as reported in case (supra). ", "We may also refer to the circular dated May 14, 2002 issued by noticing that in the past several units had come up in violation of the notification dated 27th January, 1994 and a view had been taken earlier that such units are permitted to apply for environment clearance by 31st March, 1999. For period of five years, there was no circular or notification granting any time to apply for EIA under notification dated 27th January, 1994. The period to apply for environment clearance was extended upto 30th June, 2001 which deadline was extended upto 31st March, 2003, stating that it was to give opportunity to defaulting units to avail of the last and final opportunity to obtain ex post facto environment clearance. The notification dated 27th January, 1994 is applicable also to construction activity. It seems that this circular was issued to give opportunity to those who had undertaken constructions after issue of notification without compliance of stipulations therein. We are, however, not concerned in these matters with the construction which may have come up in breach of the notification. It does not appear that intended to legalise the commencement or continuance of mining activity without compliance of stipulations of the notification. In any case, a statutory notification cannot be notified by issue of circular. Further, if intended to apply this circular also to mining activity commenced and continued in violation of this notification, it would also show total non- sensitivity of to the principles of sustainable development and the object behind the issue of notification. The circular has no applicability to the mining activity. ", " () - Its Suggestions The notification dated 27th January, 1994 is mandatory. The compliance of the notification before commencement of any mining operation is essential and cannot be dispensed with. The has not so far conducted Environment Impact Assessment in respect of any of the mining lease under the notification dated 27th January, 1994. Before the order dated 6th May, 2002 was passed, the lease holders had not made any application before the Ministry for grant of . The applications were filed during the pendency of these matters under the order of this . The applications of the lease holders are lying with . was constituted in terms of notification dated 17th September, 2002, issued by the , in exercise of power conferred by Section 3(3) of the EP Act for the purposes of monitoring and ensuring compliance of the order of this covering the subject matter of forest and wildlife and related issues arising out of the said order and one of the functions of the in terms of the notification is to monitor the implementation of the orders of this and place reports of non-compliance before the including in respect of encroachment and removals, working plans, compensatory afforestation, plantations and other conservation issues. In the order dated 31st October, 2002, this has observed that no mining activity can be carried out without remedial measures taking place and for this purpose, it is necessary that environment impact assessment is done and the applications dealt with before any mining activity can be permitted. It was also observed that the application of lease holders for environmental clearance can be disposed of them of within a period to be specified by this . In terms of order dated 25th November, 2002, the was asked to file its suggestions in regard to the time for considering the applications for grant of . The had received large number of voluminous Environment Impact Assessment plans only in the last few days which are being examined further stating that the process of examination and formulation of suggestions is likely to take some more time. On 24th January, 2003, the was granted time to file its report upto 8th February, 2003. has filed three reports, the last having been filed on 7th February, 2003. ", "In an interim report dated 22nd June, 2003 stated that the complete information had not been supplied to it by the of Haryana. The report states that as per the information provided by the Haryana , in Faridabad district there are 21 sanctioned major mineral mines with the varying size from 44.48 hectare to 516.518 hectare. In Gurgaon districts 54 mining leases have been sanctioned varying in size from 5.96 hectare to 802.322 hectare. All the mines of major minerals were operating in Faridabad district without obtaining statutory environmental clearance under the EP Act. It also noticed that in respect of the Aravalli Hills range being an acknowledged as eco friendly area under the Aravalli notification, clearances were being granted on the basis of examination of an expert group without any public hearing or participation of or the affected people. As already noticed, the delegation in favour of the has been now withdrawn. The report further observes that most of the mines are operating in violation of approved plans. Instead of doing section wise mining (bench mining) the mining operations are carried on unscientifically with the sole aim to make maximum profits which has resulted in number of fatal accidents involving labourers, hazards to the adjoining population, indiscriminate scattering of the over burden, wasteful manner of mining with complete disregard to mineral conservation aspect, rendering reclamation of mined area impossible. Further it points out that several mining leases have been granted in areas where plantations were undertaken with the financial assistance provided by international donor agencies. Mining activities are permitted in a manner which is destroying the ground water table and also the deep aquifers thereby causing irreparable damage to the critical ground water reserves. There is no effective mechanism to ensure compliance of various conditions stipulated while granting statutory approvals. No deterrent action was taken against mines even in those cases where during monitoring serious violations and non compliance of conditions were found. The has made the following suggestions : ", "\"I) For major mineral mines above 5 hectare in Faridabad district, mining activity may be allowed to be undertaken only after the required environmental clearances are accorded by (); ", "ii) the powers delegated to by notification dated 27.1.1997 to grant environmental clearances in respect of areas of Gurgaon district falling within Aravalli notification dated 7.5.1992 requires to be reconsidered as the presumptions on the basis of which powers were delegated to have been found to be incorrect; ", "iii) mining activity may be allowed in respect of areas notified under Section 4 and 5 of the PLP Act, which for the purpose of FC Act are `forest' even as per the records, only after obtaining prior approval under the said Act from the ; ", "iv) all mining leases granted in respect of areas where plantations have been raised under the financial assistance received from any international donor agencies may be cancelled forthwith. The concerned authorities may be prohibited from allowing any mining operations, allowing renewals or grants of fresh leases in such areas; ", "v) mining activity may be allowed only as per the approved Mining Plans. Mines which are found to be operating at variance with the approved Mining Plans may be made liable for cancellation of lease and payment of exemplary compensation; ", "vi) in view of rampant and indiscriminate mining, which was being done, a high level monitoring committee may be constituted comprising representatives of , , , Director General of Mine Safety and reputed . This Committee may be empowered to monitor the implementation of the conditions imposed while approving Mining Plans, grants of environmental clearances and other approvals/clearances. Whenever any violation is detected, the Committee should have the powers to direct closure of the defaulting mines and also to impose fines commensurate with the seriousness of the violation; ", "vii) in addition to the above (vi), the Officials of , , , Director General of Mine Safety may independently monitor, at least once in three months, to ensure compliance of all statutory conditions; ", "viii) the State Government may identify and notify officials, who would ensure enforcement of the directions given by and or the above mentioned officials; ", "ix) no mining activity may be allowed without obtaining `No Objection Certificate' from to ensure that the water table and the underground aquifers are not adversely affected; ", "x) before allowing resumption of mining activity in any approved mining lease, the status of compliance of the conditions of the approved Mining Plans, approved Environmental Management Plans, environmental clearances and other statutory conditions/clearances may be ascertained. Suitable and adequate compensation/penalty for non-compliance of stipulations may be recovered, otherwise such stipulations would remain only on paper; ", "xi) in respect of forest area, including areas notified under Section 4 and 5 , net present value of the land leased out for mining may be recovered as per the Hon'ble order dated 30.10.2002 in I.A. No.566 in Writ Petition (Civil) No.202/95 (forest matter); ", "xii) a suitable system of securing adequate bank guarantee, bank deposit or other personal guarantee from the mine owner may be worked out to ensure compliance of all statutory and other conditions; ", "xiii) after considering the annual approved rate of mining and mineral deposits in the area, optimum size of the mines may be determined in respect of approved mines to ensure optimum utilization of the mineral resources; ", "xiv) presently, the over burden is not stacked as per approved , which makes it practically impossible to carry out any reclamation work. The over burden dumping may be allowed only at identified sites within the mining lease area as per approved Mining Plans; ", "xv) for the purpose of afforestation, the funds may be recovered from the mine owners and deposited with the forest department for undertaking afforestation in a planned manner; ", "xvi) the identification of the consultants for preparation of the 's should be done by the regulating agency instead of by the mine owners to ensure good and credible reports. It is important that payment to the consultants should also be routed through the regulating agency and not directly by the mine owners.\" ", "The report of dated 7th February, 2003 mentions that the State Government, despite letters, had not made available to the the following information : ", "i) mine wise details of stipulated conditions, which have been fulfilled and those which have not been fulfilled ", "ii) details of five major mineral mines in Faridabad and Gurgaon Districts which have fulfilled all the conditions stated in the approved mining plans, environmental and other clearances; ", "iii) details of the mines where mining activity has been undertaken without obtaining requisite environmental clearance. ", "In the absence of the information as aforesaid the gave its suggestions on the basis of information available to it which are as under: ", "i) the ban on mining activity may continue up to 2 km from Surajkund and Badkal Lakes, as per order dated 10.5.1996; ", "(ii) each of the existing mines may be physically inspected by Inspection Team(s) comprising officials of , , Director General of Mines Safety and to report the specific conditions which have not been fulfilled/violated especially in respect of : a. sectionwise (benchwise) mining to be done as per approved mining plan; ", "b. storage of top soil as per approved mining plan; ", "c. dumping of over-burden in identified area as per the approval mining plan; ", "d. plantations as per Environmental Management Plan; ", "e. observance of mines safety Rules and Regulations; ", "f. damage to the plantations raised under externally aided projects (foreign funding); ", "g. damage if any to the water table/underground acquifers; and h. compliance of environmental clearance stipulations; ", "The Inspection Team(s) may submit the reports to and () with copies to () for their comments and for carrying out verification, if found necessary. ", "(iii) suitable penalties for non- ", "compliance/violation of various conditions, as found by the above Inspection Team(s) or by the may be imposed. Norms for quantifying the penalties for violation of various conditions may be formulated by with the concurrence of the . No mine may be allowed to resume mining activity without first paying the penalty imposed on it. ", "(iv) mining activity may completely be prohibited in area where plantations have been undertaken with the foreign assistance/funding (externally aided projects). Mining leases already granted/approved in all such areas may be cancelled; ", "(v) yearwise requirement of funds for implementation of various conditions under which mining has been approved may be computed for each mine. To ensure compliance of these conditions, adequate safeguards by way of bank guarantee, mortgage of immovable assets, pledge of movable assets, personnel guarantee of the lessee or others (supported by adequate assets) may be put in place; ", "(vi) may examine the Environment Impact Assessment Report/Environment Management Plan of individual major mineral mines and proposals for approval under the FC Act, if the mining lease is in 'forest' as per the Hon'ble order dated 12.12.1996 in Writ Petition (C) No.206/95, and take decision(s) thereon, including regarding measures for protecting the water table and underground acquifers, in a time bound manner; and ", "(vii) regular inspection of the mines may be undertaken by the identified officials of , and Director General of Mines Safety. ", "Mines which are found to have violated the conditions may be made liable to pay stiff penalties including closure of the mines.\" ", "Some mining leases were granted prior to notification dated 27th January, 1994 and some after the issue of that notification. Even in respect of the leases granted prior to 27th January, 1994, the renewal of most of the leases has come up after issue of notification. Some of the leases are for extraction of major mineral, some for extraction of minor mineral and some for extraction of both major and minor mineral. In respect of none of the leases, before commencement of mining activity, was obtained from the . In respect of mining in Aravalli Hills in Gurgaon, the relevant notifications dated 7th May, 1992, 29th November, 1999 and 28th January, 2003 have been noticed earlier. Under the notification dated 7th May, 1992, no permission was granted by the though some applications were pending before it when power was delegated to . Permissions were granted by after the powers were delegated to it. The delegation in favour of the has since been withdrawn. Legal Parameters The natural sources of air, water and soil cannot be utilized if the utilization results in irreversible damage to environments. There has been accelerated degradation of environment primarily on account of lack of effective enforcement of environmental laws and non-compliance of the statutory norms. This has repeatedly said that the right to live is a fundamental right under Article 21 of the Constitution and it includes the right to of enjoyment of pollution-free water and air for full enjoyment of life. ( [AIR 1991 SC 420]. Further, by 42nd Constitutional Amendment, Article 48-A was inserted in the Constitution in Part IV stipulating that the shall endeavour to protect and improve the environment and to safeguard the forest and wildlife of the country. Article 51A , inter alia, provides that it shall be the duty of every citizen of India to protect and improve the natural environment including forest, lakes, rivers and wildlife and to have compassion for living creatures. Article 47 which provides that it shall be the duty of the to raise the level of nutrition and the standard of living and to improve public health is also relevant in this connection. The most vital necessities, namely, air, water and soil, having regard to right of life under Article 21 cannot be permitted to be misused and polluted so as to reduce the quality of life of others. Having regard to the right of the community at large it is permissible to encourage the participation of Amicus Curiae, the appointment of experts and the appointments of monitory committees. The approach of the has to be liberal towards ensuring social justice and protection of human rights. [], this held that life, public health and ecology has priority over unemployment and loss of revenue. The definition of 'sustainable development' which Brundtland gave more than 3 decades back still holds good. The phrase covers the development that meets the needs of the present without compromising the ability of the future generation to meet their own needs. . [], this observed that sustainable development means the type or extent of development that can take place and which can be sustained by nature/ecology with or without mitigation. In these matters, the required standard now is that the risk of harm to the environment or to human health is to be decided in public interest, according to a \"reasonable person's \" test. [See Chairman : The Status of the Precautionary Principle in Australia : (Vol. 22) (1998) (Harv. Envtt. Law Review, p. 509 at p.549-A) as in . []. ", "The mining operation is hazardous in nature. It impairs ecology and people's right of natural resources. The entire process of setting up and functioning of mining operation require utmost good faith and honesty on the part of the intending entrepreneur. For carrying on any mining activity close to township which has tendency to degrade environment and are likely to effect air, water and soil and impair the quality of life of inhabitants of the area, there would be greater responsibility on the part of the entrepreneur. The fullest disclosures including the potential for increased burdens on the environment consequent upon possible increase in the quantum and degree of pollution, has to be made at the outset so that public and all those concerned including authorities may decide whether the permission can at all be granted for carrying on mining activity. The regulatory authorities have to act with utmost care in ensuring compliance of safeguards, norms and standards to be observed by such entrepreneurs. When questioned, the regulatory authorities have to show that the said authorities acted in the manner enjoined upon them. Where the regulatory authorities, either connive or act negligently by not taking prompt action to prevent, avoid or control the damage to environment, natural resources and peoples' life, health and property, the principles of accountability for restoration and compensation have to be applied. The development and the protection of environments are not enemies. If without degrading the environment or minimising adverse effects thereupon by applying stringent safeguards, it is possible to carry on development activity applying the principles of sustainable development, in that eventuality, the development has to go on because one cannot lose sight of the need for development of industries, irrigation resources and power projects etc. including the need to improve employment opportunities and the generation of revenue. A balance has to be struck. We may note that to stall fast the depletion of forest, series of orders have been passed by this Court in case regulating the felling of trees in all the forests in the country. Principle 15 of Rio Conference of 1992 relating to the applicability of precautionary principle which stipulates that where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for proposing effective measures to prevent environmental degradation is also required to be kept in view. In such matters, many a times, the option to be adopted is not very easy or in a straight jacket. If an activity is allowed to go ahead, there may be irreparable damage to the environment and if it is stopped, there may be irreparable damage to economic interest. In case of doubt, however, protection of environment would have precedence over the economic interest. Precautionary principle requires anticipatory action to be taken to prevent harm. The harm can be prevented even on a reasonable suspicion. It is not always necessary that there should be direct evidence of harm to the environment. Bearing in mind the aforesaid principles, we have to consider the main question: should the mining activity in areas in question be banned altogether or permitted and, if so, conditions to be provided therefor? The reports and suggestions of , and have already been extensively noted. The effect of mining activity in area upto 5 km. from Delhi-Haryana border on Haryana side of the ridge and also in the Aravalli Hills is to be seen in light of these reports and another report dealt later. One of the aspect stated in these reports is about carrying on of mining activity in close proximity to the residential area and/or main roads carrying traffic. ", "Mines and Minerals (Regulation and Development) Act and Rules thereunder The grant of mining lease is governed by the Mines and Minerals (Regulation and Development) Act , 1957 (for short, 'the MMRD Act) which was enacted to provide for the development and regulation of mines and minerals under the control of the . Section 13 is the rule making power of . is empowered to make rules to provide for the manner in which rehabilitation of flora and other vegetation, such as trees, shrubs and the like destroyed by reason of any mining operation shall be made in the same area or in any other area selected by (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the mining lease. Section 18 , inter alia, casts a duty upon to take all such steps as may be necessary for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by mining operations and for such purposes, may, by notification in the official gazette, make such rules as it thinks fit. ", "The Mineral Concession Rules, 1960 have been framed by in exercise of the powers conferred by Section 13 of the MMRD Act. Chapter IV of these Rules relate to grant of mining leases in respect of land in which the minerals vest in the . Rule 22(4), inter alia, provides that on receipt of the communication from the State of the precise areas to be granted for mining purpose, the applicant shall submit a mining plan, within the period stipulated in the Rules, to for its approval. The applicant, on approval of the mining plan by , shall submit the same to the State to grant mining lease over that area. Rule 4A, inter alia, provides that notwithstanding anything contained in Sub- rule(4), the State shall be competent to approve mining plan of open cost mines (mines other than underground mines) in respect of now metallic or industrial minerals, named therein, one of it being Silica sand. The mining plan, as provided in sub-rule (5) of Rule 22, shall, inter alia, incorporate the mineral reserves of the area and the plan of area showing, inter alia, water courses, limit of reserves and other forest areas and density of trees, if any, assessment of impact of mining activity on forest, land surface and environment including air and water pollution; details of the scheme of restoration of the area by afforestation, land reclamation, use of pollution control devices and such other measures as may be directed by or the State from time to time. A tentative scheme of mining and annual programme and plan for excavation from year to year for five years is also required to be incorporated in the mining plan. Rule 22(5) was inserted in the Rules by notification dated 27th September, 1994 to which certain amendments were made in terms of notification dated 17th January, 2000 also inserting by same notification Rule 22(4A). Sub-rule(4) to Rule 22 ad been earlier inserted by notification dated 27th September, 1994. The grant of permission for mining and approving mining plan and the scheme by , of India by itself does not mean that mining operation can commence. It cannot be accepted that by approving Mining Plan and Scheme by , Central is deemed to have approved mining and it can commence forthwith on such approval. Section 13 of the MMRD Act and the Rules made in exercise of powers under the said section, deal, inter alia, with the aspect of grant of mining of lease and not commencement of mining operations. Rules made under Section 18 , however, deal with commencement of mining operations and steps required to be taken for protection of environment by proventing or controlling any pollution which may be caused by mining operation. A mining lease holder is also required to comply with other statutory provisions such as Environment (protection) Act, 1986, Air (Prevention and control of Pollution) Act , 1981, The Water (Prevention and Control of Pollution) Act , 1974, Forest (Conservation) Act , 1980. Mere approval of the mining plan by of India, would not absolve the lease holder from complying with the other provisions. Rules 31 to 41 contained in Chapter V of the Mineral Conservation and Development Rules, 1988 framed under Section 18 of the MMRD Act deal with the measures required to be taken by the lessee for the protection of environment from any adverse effect of mining or irreversible consequences thereof. These Rules, inter alia, provide that every holder of a mining lease shall take all possible precautions for the protection of environment and control of pollution while conducting mining operations in the area; shall, wherever top soil exists and is to be excavated for mining operations, remove it separately and utilize for restoration or rehabilitation of the land which is no longer required for mining operations. The holder is also required to take steps so that the overburden, waste rock, rejects and fines generated during prospecting and mining operations or tailings, slims and fines produced during sizing salting and benefication or metallurgical operations shall be stored in separate dumps which shall be properly secured to prevent escape of material therefrom in harmful quantities which may cause degradation of environment. Wherever possible, the waste rock, overburden etc. shall be back-filled into the mines excavation with a view to restoring the land for its original use as far as possible and wherever it is not feasible during mining operation, the waste dumps shall be suitably tarraced and stabilized through vegetation or otherwise. It is also required that the phased restoration, reclamation and rehabilitation of lands affected by mining operation shall be undertaken which work shall be completed before the conclusion of mining operations and the abandonment of mine. Air pollution due to fines, dust and smoke or gaseous emissions during mining operations and related activities shall be controlled and kept within 'permissible limits' specified under various environmental laws of the country including the Air (Prevention and Control of Pollution) Act , 1981 and the Environment (Protection) Act , 1986 by the holder of mining lease. Further, noise arising out of such operations shall be abated or controlled by the lessee at the source so as to keep it within the permissible limit. The mining operations shall be carried out in such a manner so as to cause least damage to the flora of the area and nearby areas. Every holder of mining lease shall take immediate measures for planting in the same area or any other area as selected by the authorized officer and not less than twice the number of trees destroyed by reason of any mining operation and look after them during the subsistence of the licence/lease and restore, to the extent possible, other flora destroyed by mining operations. ", "The aforesaid measures are not required to remain only on paper but strictly complied for the protection of environment and control of pollution as a result and consequence of mining operations. National Forest Policy In respect of mining in the forest area, we may also refer to the National Forest Policy, 1988 issued by , which, inter alia, notices that over the years, forests in the country have suffered serious depletion. One of the reason of it is inadequacy of protection measure and diversion of forest land to non- forest uses. Without ensuring compensatory afforestation and essential environmental safeguards; and the tendency to look upon forests as revenue earning resource. The basic objectives of the policy, inter alia, are maintenance of environment stability through preservation and, where necessary, restoration of the ecological balance that has been adversely disturbed by serious depletion of the forests of the country and checking the soil erosion and water conservation and increasing substantially the forest/tree cover through massive afforestation and social forestry programmes. It provides that the National goal should be to have a minimum of 1/3rd of the total land area of the country under forest or tree cover. In the hills and in mountains regions, the aim should be to maintain 2/3rd of the area under such cover in order to prevent erosion and land degradation and to ensure the stability of the fragile eco-system. It also provides that a massive need based and time bound programme of afforestation and tree planting, with particular emphasis on fuel wood and fodder development, on all degraded and denuded lands in the country, whether forest or non-forest land, is a national imperative. Mining in Forest Area The question of permitting mining in the area where large scale of afforestation with foreign funding has taken place is required to be examined keeping in view the National Forest Policy which also provides that forest land or land with tree cover should not be treated merely as a resource readily available to be utilized for various projects and programmes but as a national asset which requires to be properly sasfeguarded for providing sustained benefits to the entire community. Diversion of forest land for any non-forest purpose should be subject to the most careful examinations by specialists from the standpoint of social and environmental costs and benefits. The mining and industrial development should be consistent with the needs for conservation of trees in forest. It provides that no mining should be granted to any party, private or public, without a proper mine management plan appraised from the environmental angle and enforced by adequate machinery. Our attention was drawn by learned counsel appearing for lease- holders to the part of national policy which provides that beneficiaries who are allowed mining and quarrying in forest land and in land covered by trees should be required to repair and re-vegetate the area in accordance with established forestry practices to submit that the policy itself contemplates mining operations in the forest area. For present, we are not suggesting a complete ban of mining operations on forest land so long as it is possible to undertake the said operation on the sustainable development principles and after obtaining due approvals under various statutory provisions including Section 2 of the Forest (Conservation) Act, 1980. At the same time, we are unable to appreciate the commencement and continuation of mining over areas on which crores of the foreign funds have been spent for afforestation and plantation. Further, it is also not possible to accept the contention urged on behalf of the lease holders that only that part of such leased land where allegedly damage has been caused to plantation as a result of mining operations, be excluded from mining and not the entire area of the lease. For example, if the mining area is 5 hectare and damages as a result of mining is to plantation in an area of 1 hectare, it is not practicable or reasonable to exclude only that 1 hectare and permit the mining operation on the rest of the mining area. Reference can also be usefully made to the part of the of Forest Report, 1999 issued by in relation to Haryana. It, inter alia, provides that large scale plantations were carried out under project since 1992. The document claims increase of the forest cover in the as a result of plantation under the project. It, inter alia, mentions that forest cover increase in Gurgaon and Faridabad is mainly due to plantation raised under the project which was started in early 1990s. In these matters, neither the nor the leaseholders can be permitted to turn round and now take a stand that the areas covered under the project is not forest. The National Forestry Action Programme of December 2000 issued by the , giving project profile also makes detailed reference to the institution building and integrated national resource development in the region, Haryana under the project implementing agency of , of Haryana. The project profile, inter alia, states that the Central to such a policy is rehabilitation of common lands to meet the needs of the rural poor and to reduce soil and water erosion and the proposed programme was envisaged to bring the benefit of integrated development of the eco-system to the whole community, particularly, to the poorer sections. The project, it is stated, has been implemented in hills situated in the five districts of Haryana including Gurgaon. One of the expected outcome of the project is the reduced soil erosion and improved water regime in the rehabilitated area will be drastically reduce and run-off leading to recharge of constantly depleting ground water resources. It records that Haryana has implemented a project on the eco-restoration of common lands in the hills, from June 1990 to October 1999. The project is being funded by . The total cost was 28.8 million ECU in which external assistance was to the extent of 23.2 million EUC. s Hill Range The s, most distinctive and ancient mountain chain of peninsular India, mark the site of one of the oldest geological formations in the world. Heavily eroded and with exposed outcrops of the slate rock and granite, it has summits reaching 4950 feet above sea level. Due to its geological location, the range harbours a mix of Saharan, Ethiopian, Peninsular, oriental and even Malayan elements of flora and fauna. In the early part of this century, the s were well wooded. There were dense forests with waterfalls and one could encounter a large number of wild animals. Today, the changes in the environment at are severe. Though one finds a number of tree species in the hills, timber quality trees have almost disappeared. Despite the increase of population resulting in increase of demand from the forest, It cannot be questioned nor has been questioned that to save the ecology of the mountain, the laws have to be strictly implemented. The notification dated 7th May, 1992 was passed with a view to strictly implement the measures to protect the ecology of the range. The notification was followed more in its breach. ", "In the aforesaid background, any mining activity on the area under plantation under Aravalli project cannot be permitted. The grant of leases for mining operation over such an area would be wholly arbitrary, unreasonable and illogical. ", "Report of on Aravalli () on being asked by to conduct a study of environmental problems of Aravalli hills and preparation of action plan for restoration of environmental quality in Gurgaon district, after extensive examination, has submitted to its final report in July 2003. is a subsidiary of (). The report in respect of Aravalli range in Gurgaon district has been prepared by with the following objectives : ", "1. To prepare status report of the pollution problems in the Aravalli Hills. ", "2. To prepare environmental management plan to abate various environmental problems ", "3. To prepare action plan for restoration of environmental quality. ", "The environmental problems in the Aravalli Range in Gurgaon district have been identified and remedial measures including the pollution control guidelines and action plan for various stakeholders have been suggested by . It has been noticed that in large scale mining projects what is still required is a proposal on district level as to what will be mined, how it will be mined and with what method and many such areas of environmental concern which had not been adequately addressed keeping in view the environmental degradation of the Aravalli Hills. It has also been noticed that the Aravalli notification restricts process and operations under certain categories of the land in district. Though the records of such lands are available at every village level map, there is no record available in the district level in respect of these areas to undertake realistic appraisal and effective monitoring of mining and other projects at the macro level on such lands. While noticing that, notification dated 29th November, 1999, inter alia, made provision for preparing a master plan integrating the environmental concerns and the future land use of the area, but the master plan prepared on 28th August, 2002 does not, inter alia, address the issue of natural resource assessment and water Resource status; the areas near crushing zone and active mining zone remain a matter of concern and concerted efforts have not been given to the quality of roads and the dust suppression measures to maintain the air quality within safe limits. The guidelines of operation in an eco-friendly manner have been issued by but the compliance is only partial, inasmuch as wind breaking walls are not proper, pollution control devices are not operating and the green belt around the crushing zones are not maintained. Identification of mines in the district is difficult. There does not seem to be mechanism to upgrade the mining technologies and methodologies to minimize the impact due to mining in the eco-sensitive zones in the district. There is no identified land where overburden could be temporarily dumped prior to being utilized for void filling and for other purposes. There does not seem to adequate awareness among the people in respect of the environmental problems. In some parts of the district, the ground water potential is already in the dark category. Lack of water conservation measures and rainwater harvesting may ultimately lead to water scarcity in the near future. ", "Having identified the environmental problems, various actions have been recommended by for the eco restoration in the Aravalli Range in Gurgaon district. It has been, inter alia, recommended that it is imperative on the part of to improve inter- departmental co-ordination among various Government departments to achieve the common objective, i.e., ecological restoration of Aravalli Hills in the district. The master plan should indicate the proposed eco- restoration plan to compensate the environmental degradation by the proposed activities in the master plan. Rehabilitation programmes for the abandoned mines areas either to convert these to water reservoirs and eco-parks or reclamation by filling by rural waste, urban waste or fly ash. The master plan should be detailed to show the areas where overburden could be dumped, areas where waste material could be stocked, areas where plantation could be carried out, etc.etc. The planning should, inter alia, include environmental impact and concerns of activities of one sector on the other sectors in the district, e.g., afforestation should be planned not only with a view to increase vegetation on the hills but also to be supplement for fuel, fodder etc. in the district. All efforts should be made to preserve the ground water resources. Water shed management and rainwater harvesting to be implemented in the Aravalli hills regions on war footing. In the areas where mining deeper than the ground water table of the area is to be carried out, adequate provision of pollution control and conservation of water resources should be made. There should be frequent inspections of the mining operations to ensure that these are in line with the requirement for sustainable development. The inspections may be carried out at an interval of three months. There should be continual source of revenue from the mining operations to the fund, recommended to be created, for the eco-restoration of the Aravalli hills. The minimum period of lease should be for 15-20 years. This will induce the mine operators to take environmental protection measures more seriously. shall undertake regular monitoring to check compliance and to assess the ambient air quality, water quality and other environmental protection measures. should take initiative to appoint a Central Agency to monitor the eco-restoration efforts and to provide technical support to the implementing organizations. The renewal of mining lease and granting new leases should be effected after examining the environmental protection measures taken by the lessee. Requisite data should be displayed on the internet to arouse awareness in public and for further usage. Stringent action should be taken for water conservation. may even carry out the afforestation on behalf of mine operators. Expenses should, however, be borne by the mine operators. The afforestation shall be carried out keeping in view, inter alia, the consideration of checking the soil erosion. The mine lessee should implement the environmental management plan and mining plan approved by the concerned authority. In future, efforts in respect of search for sustainable development should broadly take into consideration resource potential in the region, the demand of the products and the supply options. Though the demand for the niche products existing in the Aravalli range which is one of the oldest mountain ranges in India will continue to grow, the supply options need to be given a closer look due to eco-sensitivity of the region. The environmental cost needs to be internalized in the cost of the product and there is need to limit the supply options. Noticing that the Aravalli range prevents the desert from spreading into Indo-Gangetic plains, it has been suggested that all future planning should not only concentrate to meet the ever growing demand of the products but due consideration should also be given to protect the chain. All the developmental activities should, therefore, be planned in a coherent manner and there should be integrated approach for sustainable development. ", " has noticed that in the Aravalli Hills, a large number of activities, operations of stone crushers and deforestation besides other activities are causing environmental degradation. These mines are usually located in the clusters in remote mineral rich districts/areas where living standards is lower and understanding of people towards environmental impact is also poor. In the past, the mine operators took no note of environmental damage. In fact, they were not even conscious about it. The attitude of mining community is to ignore the environmental concerns. In majority of the cases, the environmental concerns are ignored for making quick profits. The small mines (less than 5 hectares) and the mining of minor minerals which are no doubt small individually but have damaging characteristics when in clusters, e.g. the mines of granite, marble, slates, quartzite etc. (falling under minor minerals) are no less damaging than the others, especially when the processing is taken into consideration. The mining activities results in disturbance of land surface, altering drainage pattern and land use, besides the pollution problems, which may lead to the environmental problems of air, water and noise pollution and solid waste pollution. ", "It has been suggested that the short term and long term action plan for the restoration of environmental quality of the area shall be prepared separately. The action plan shall be prepared in such a way that it should be a guiding tool also in the hands of the state pollution control boards and Government agencies for enforcement of the environmental laws for the restoration of environmental quality of the area. Monitoring programme shall include frequency of monitoring for air quality, water quality, ground water, solid wastes, noise level etc. In respect of water resources, it has been, inter alia, suggested that in order to draw water resource management plan, it is essential to assess the water quality of the various components of the hydrologic cycle, i.e., stream, ground water, surface water etc. It has been pointed out that since the surface water potential is not promising in the district, there is increased dependence on the ground water for meeting the agricultural, domestic and industrial requirement resulting in depletion of ground water resources in the district. It has been suggested that utmost care is required for further development of ground water in the areas where the recharge of the ground water is low. ", "Dealing with the flora and fauna, it has been pointed out that the earliest account shows that at one time the Aravalli hills were well covered with dhauk (Anogeissus pendula). Now, except in few places, viz., the Jhir Forest in Firozpur Jhirka (dedicated to Mahadeo Temple) and near Bhondsi recently regenerated with dhauk, the Aravallis are by and large, bereft of vegetation in the district. ", "It has been noticed that in order to take stock of the environmental problems, and team made several visits to Aravalli hills and held discussion with the mine operators, officials and local people. There are number of mining projects etc. which are already existing and there is also tremendous potential to further increase the industrial and the other development activities. The environmental impact due to mining projects on air quality, water quality, noise level, overburden etc. have been noticed and it has been pointed out that the opening of new projects will further affect some of the environmental attributes. The report notices that the environmental degradation has taken place due to mining activities. The existing crusher units are also not functioning on the environmental sound systems. The situation warrants closer look on various components of the systems affecting the environmental attributes in the area, devising pragmatic approaches to facilitate eco-restoration of the Aravalli hills and offering broad framework to the industrial units to function under environmentally sustainable framework. The suggestions also include the enactment of rules for grant of mine leases to levy a separate charge for dump removal, ecological restoration in the area, the technology to be used for mining operations and post mining land use and mine decommissioning. As far as environmental protection in the Aravalli hills is concerned, planning and provisions must start from the stage of grant of mine lease and what all it should include have been set out. It has been, inter alia, suggested that the environmental framework shall include the framework for environmental clearance such as depth of cutting, area of plantation and the type of plantation, which are attributes related to closure planning as also framework for monitoring and for forestry besides air quality, land use pattern etc. In nutshell, it has been suggested that it is imperative on the part of the mine operators to carry out the mine operations in such a fashion that it has least impact on the ecology of the area. The pollution prevention guidelines have been suggested in para 7.1.1.2 Having regard to the detailed study, the recommendations and action plan has been dealt with in Chapter VIII of the report, inter alia, suggesting that concerted efforts from various departments are needed. The report states that though the environmental upgradation measures need to be taken more seriously by the mine and other industrial operators, there is need on the part of the Government to immediately start these measures in the areas where degradation has already taken place. The other recommendations have already been broadly noticed. ", "No one has raised any objection to the recommendations contained in the report of . We accept the recommendations in principle. Modification of Order dated 6th May, 2002 Regarding Mining in Aravalli Now, the question is should mining activities in the Aravalli range in Gurgaon district be permitted to restart and, to that extent, the order dated 6th May, 2002 be modified, meanwhile directing implementation of recommendations in the report of and earlier referred reports. The other option is to first constitute a monitoring committee directing it to individually examine and inspect mines from environmental angle in the light of the said recommendations and file a report in this Court in respect of individual mines with its recommendations for restart or otherwise as also recommendation, if any, for the payment by the mine operators and/or by towards environmental fund having regard to the precautionary principles and polluter pays principle and on consideration of that report, to decide the aspect of modification of the order dated 6th May, 2002, partially or entirely. We are of the view that the second option is more appropriate. We are conscious of observations in that measures for protecting the environment can be undertaken without stopping mine operations and also the suggestions of to permit mining subject to the mine lease holders undertaking to comply with such conditions which remain to be complied, but, having regard to the enormous degradation of the environment, in our view, the safer and the proper course is to first constitute , get a report from it and only thereafter consider, on individual mine to mine basis, lifting of ban imposed in terms of order dated 6th May, 2002. Before concluding this aspect, we may note that assuming there was any ambiguity about the applicability of order dated 6th May, 2002 to mining in Aravalli Range, it is clarified that the said order would be applicable to all the mines in Aravalli hill range in Gurgaon district. ", "Applicability of notification dated 27th January, 1994 The notification has been reproduced in the earlier part of the judgment. It, inter alia, applies to mining projects (major minerals) with leases of more than 5 hectares. It can neither be disputed nor has been disputed that the notification is mandatory. It, inter alia, provides that on and from the date of its publication in official Gazette expansion or modernization of any activity (if pollution load is to exceed the existing one) or a new project listed in Schedule A of this notification shall not be undertaken in any part of India unless it has been accorded environmental clearance by in accordance with the procedure specified therein. The contention urged on behalf of the lease-holders is that the leases in question do not relate to expansion or modernization of any activity as postulated by the notification. Further, it is contended, that the notification applies to 'a new project' which means that it will apply to mining lease granted after issue of notification. It has been strenuously contended that the renewal of existing mining lease is neither 'an expansion' nor 'modernization' nor is it a 'new project' and, therefore, the notification will have no applicability at the time of consideration of the renewal of the lease. Reliance has been placed on a decision of this Court in 's case (supra) holding that the notification is clearly prospective and, inter alia, prohibits the undertaking of a new project listed in Schedule I without prior environmental clearance from . The contention urged was that since in 's case, where construction had commenced nearly 8 years prior to the notification, same very notification was not held applicable. On the same analogy, it cannot have any applicability to the leases granted prior to the issue of notification. ", "No doubt, the notification is prospective but the question here is whether it would be applicable when the aspect of renewal comes up for consideration after the issue of the notification. In 's case, it was not held that this notification will not apply at the stage of renewal. The observations made in para 129 of the said decision and relied upon by learned counsel for the lease holders have no relevance to determine the applicability of the notification at the stage of renewal. In 's case, the environmental clearance had been granted in the year 1987 and this Court noticing that when it was granted by the Prime Minister, whatever studies were available were taken into consideration, it was known that the construction of the dam would result in submergence and the consequent effect which the reservoir will have on the ecology of the surrounding areas and various studies relating to environmental impact had been taken into consideration and that there was no obligation to obtain the statutory clearance under 1994 notification. In the present case, regarding the manner of grant of no objection certificate from environmental angle for proposed mining activity, by way of illustration, we may refer to the order dated 18th January, 1999 issued by whereby no objection certificate for renewal of lease was granted stipulating that the applicant in respect of mining activity at village Anangpur, district Faridabad shall also seeking environmental clearance of its mining project in compliance with this notification without even mentioning any time limit for it and admittedly till date that had not been done. None bothered to find out whether conditions in the order has been complied or not. Further the letter dated 25th January, 2003, sent to Principal Secretary of by , Haryana shows how the State Government has been circumventing the legal requirements and permitting mining. In that letter, it has been stated that pending approval of the environmental plan, the mining lessees undertook the mining operation of the minor mineral on issue of short term permit, in cases where the fresh mining leases were granted and in case of renewal of mining leases, the mining activities were going on. This is despite conditions in the judgment dated 10th May, 1996 by this Court that would be responsible for mining in the State of Haryana. ", "Be that as it may and reverting to legal position, in . [], though a case under Forest (Conservation) Act , 1980 rejecting the contention that approval at the stage of renewal was not necessary and also the plea that since the leaseholders had invested sum of money in mining operation, it was the duty of the authorities to renew the lease, it was held that having regard to the awareness that deforestation and ecological imbalances as a result of deforestation have become social menaces and the same should be prevented and that the concept that power coupled with the duty enjoined upon the respondents to renew the lease stood eroded by the mandate of the FC Act. It was held that The primary duty was to the community and that duty took precedence. In such cases, the obligation to the society must predominate over the obligation to the individuals. It would be apposite to reproduce what was said by Justice (as he then was) in paras 14 and 15 which read thus : \"14. Here the case of the appellants is that they have invested large sums of money in mining operations. Therefore, it was the duty of the authorities that the power of granting permission should have been so exercised that the appellants had the full benefits of their investments. It was emphasized that none of the appellants had committed any breach of the terms of grant nor were there any other factors disentitling them to such renewal. While there was power to grant renewal and in these cases there were clauses permitting renewals, it might have cast a duty to grant such renewal in the facts and circumstances of the cases specially in view of the investments made by the appellants in the areas covered by the quarrying leases, but renewals cannot be claimed as a matter of right for the following reasons. ", "15. The rules dealt with a situation prior to the coming into operation of 1980 Act. '1980 Act' was an Act in recognition of the awareness that deforestation and ecological imbalances as a result of deforestation have become social menaces and further deforestation and ecological imbalances should be prevented. That was the primary purpose writ large in the Act of 1980. Therefore the concept that power coupled with the duty enjoined upon the respondents to renew the lease stands eroded by the mandate of the legislation as manifest in 1980 Act in the facts and circumstances of these cases. The primary duty was to the community and that duty took precedence, in our opinion, in these cases. The obligation to the society must predominate over the obligation to the individuals.\" ", " . [1989 Supp.(1) SCC 504], agreeing with views expressed in Ambica Quarry Workers, it was held that the FC Act applies to renewals as well and even if there was a provision for renewal in the lease agreement on exercise of lessee's option, the requirement of the Act had to be satisfied before such renewal could be granted. [1995 Supp.(1) SCC 587], these two decisions were relied upon and it was held that even the renewal of lease cannot be granted without the prior concurrence of . It is settled law that the grant of renewal is a fresh grant and must be consistent with law. ", "We are unable to accept the contention that the notification dated 27th January, 1994 would not apply to leases which come up for consideration for renewal after issue of the notification. The notification mandates that the mining operation shall not be undertaken in any part of India unless environmental clearance by has been accorded. The clearance under the notification is valid for a period of five years. In none of the leases the requirement of notification was complied with either at the stage of initial grant of the mining lease or at the stage of renewal. Some of the leases were fresh leases granted after issue of the notification. Some were cases of renewal. No mining operation can commence without obtaining environmental impact assessment in terms of the notification. ", "The Applicability of Forest (Conservation) Act, 1980 to areas treated as forest by The provisions of the Act provide for the conservations of forest and for matters connected therewith or ancillary or incidental thereto. Any forest land or portion thereof cannot be used for any non-forest purposes or assigned by way of leases or otherwise to any private person or to any authority, corporation, agency or any other organization not owned, managed or controlled by the Government, except with the prior approval of . Mining activity within forest area cannot be permitted in contravention of the provisions of the Act. The Act makes the contravention of any of the provisions of Section 2 as an offence punishable in the manner provided in the Act. The controversy is in respect of certain leases where area under the lease is covered under notification issued under Section 4 and/or 5 of the Punjab Land Preservation Act, 1900. The question is whether such area is 'forest' of any kind. ", "Under Section 3 of the aforesaid Act, whenever it appears to that it is desirable to provide for the conservation of sub-soil water or the prevention of erosion in any area subject to erosion or likely to become liable to erosion, such Government may by notification make a direction accordingly. Under , has power to regulate, restrict or prohibit the quarrying of stone or the burning of lime at placed where such stone or lime had not ordinarily been so quarried or burnt prior to the publication of the notification under section ", "3. Section 5(b) in respect of any specified village or villages, or part or parts thereof, comprised within the limits of any area notified under section 3 , the State Government may, by special order, temporarily regulate, restrict or prohibit the quarrying of any stone or the burning of any lime at places where such stone or lime had ordinarily been so quarried or burnt prior to the publication of the notification under section 3 . In respect of some mining areas notifications have been issued under Section 4 and in respect of some notifications have been issued both under Sections 4 and ", "5. The submission is that invoking of Sections 3 , 4 and 5 is only to conserve sub-soil water and prevention of the area from erosion of land and is not to create any forest. It has been pointed out that in cases where the notifications have been issued, only felling of trees had been prohibited and not quarrying of stone. It cannot be disputed that has been treating and showing the aforesaid areas as 'forest'. The contention urged on behalf of is that it was on account of erroneous view point of . In fact and law, such area is not 'forest' and mining is not prohibited and, therefore the question of seeking permission under Section 2 of the FC Act does not arise. In the instant case, it is not necessary to decide the legal effect of issue of the notification under Section 4 and/or 5 of the Act. Not only in their record the area has been shown as forest but the affidavits have been filed in this Court stating the area to be 'forest'. . [] , this Court held that the term 'forest' is to be understood in the dictionary sense and also that any area regarded as a forest in Government record irrespective of ownership would be a forest. The State of Haryana, besides having filed affidavits in the forest matters treating such areas as forest for the purposes of the FC Act has been seeking prior approval from for diversion of such land for non-forestry purpose. Reference in this connection may also be made to the affidavit dated 8th December, 1996 filed by , Principal Chief Conservator of Forest, Chandigarh, Haryana in Civil Writ No.171 of 1996 attention has also been drawn to letter dated 26th November, 2002 addressed by Divisional Forest Officer, Faridabad to Mining Officer, Faridabad forwarding to him a list of blocked forest areas of Faridabad district and requesting him to ensure that the said forest areas are not affected by any mining operations as also to a letter dated 17th September, 2001 sent by Principal Chief Conservator of Forest, Haryana (Panchkula) to Director of Environment, Haryana stating therein that no mining activity can be permitted in the area. On the facts and circumstances of the case, we cannot permit to take a compete summersault in these proceedings and contend that the earlier stand that the area is 'forest was under some erroneous impressions. In the present case, for the purposes of the FC Act, these areas shall be treated as forest and for use of it for non-forestry purpose, it would be necessary to comply with the provisions of the FC Act. ", "We may also note that assuming that there was any confusion or erroneous impression, it ought to have been first sorted out at appropriate level and where affidavits had been filed in this Court, clarifications/orders sought before issue of the mining lease in respect of such area. Impact of Mining on Ground Water Where during mining water level is touched, shall carve out that area and it was agreed on behalf of the leaseholders that they would co-operate and not undertake any mining in such an area. ", "Non-payment of royalty to the villagers A controversy has been raised about non-payment of royalty by the leaseholders to villagers on whose behalf it was contended that the order dated 6th May, 2002 prohibiting mining should not be varied till the leaseholders discharge their liability to pay royalty to the villagers. On the other hand, mine leaseholders dispute the claim put-forth on behalf of the villagers and it has been submitted that no amount is payable by them and the villagers can make their claim, if any, from . The dispute of this nature cannot be properly adjudicated in these proceedings. We leave it open to be adjudicated before appropriate forum in accordance with law. ", "Leases in respect of minor mineral Though notification dated 27th January, 1994 is not applicable to minor minerals, but having regard to what we have discussed above in regard to degradation of environment and the required standard about the risk of harm to the environment or to human health to be decided in public interest according to 'reasonable person's test', and the report of , we direct to examine the leases granted for extraction of minor mineral in light thereof and file its report. The Committee would, however, bear in mind that the notification dated 27th January, 1994 as such is not applicable to these leases. Mining in Faridabad District Having examined the matter, we are of the view that though the study conducted by relates to mining activity in Aravalli Hills in Gurgaon district, in public interest the general safeguards and suggestions in that report deserve to be implemented in respect of mining in Faridabad district as well. ", "We have already extracted the recommendations of , as also violations noticed in the reports submitted by and the suggestions of , and . shall inspect the leases in question in Faridabad District as well in the light of these recommendations and file its report containing suggestions on recommencement or otherwise of the mining activity therein. It may be reiterated that if, despite stringent conditions, the degradation of environment continues and reaches a stage of no return, this may have to consider, at a later date, the closure of mining activity in areas where there is such a risk. As earlier noticed as well, it would not be expedient to lift the ban on mining imposed in terms of the order of this dated 6th May, 2002 before ensuring implementation of suggestions of and other recommendations of experts (, and ). The safer course is to consider this question, on individual basis after receipt of report of . ", "Environment Impact assessment applications During the course of hearing environment assessment applications in terms of notification dated 27th January, 1994 have been filed by some of the leaseholders. In case, those applications are presently with , the same shall be forthwith forwarded by to . The adverse effect, if any, and extent thereof on human health and ecology shall be examined while deciding impact of these activities. There is also the desirability of transparency in such matter. The is directed to consider the said applications within a period of 10 weeks. With a view to monitor the overall eco-restoration efforts in the Aravalli Hills and to provide technical support to the implementing organizations and also to monitor implementation of recommendations contained in reports referred herein, it is necessary to constitute a . The heads of the following departments would be members of the : ", "1. Regional Officer of . ", "2. ", "3. District Administration ", "4. ", "5. ", "6. Regional Officer of ", "7. ", "8. . ", "9. Chairman - . ", "Besides above, is directed to appoint an officer from to be a member of . The following persons as representatives of public shall also be members of the said : ", "1. Prof. , Ex Chairman, . ", "2. Mr. , ", "3. Mr. . ", "The would act as a nodal agency of . The Secretary of is directed to appoint an officer not below the rank of a Joint Secretary in the for the said purpose. is directed to inspect the mines in question and file a report within a period of three months, inter alia, containing suggestions for recommencement of mining in individual cases. All concerned individuals and departments are directed to render full co- operation to . Conclusions ", "1. The order dated 6th May, 2002 as clarified hereinbefore cannot be vacated or varied before consideration of the report of constituted by this judgment. ", "2. The notification of environment assessment clearance dated 27th January, 1994 is applicable also when renewal of mining lease is considered after issue of the notification. ", "3. On the facts of the case, the mining activity on areas covered under Section 4 and/or 5 of Punjab Land Preservation Act, 1900 cannot be undertaken without approval under the Forest (Conservation) Act , 1980. ", "4. No mining activity can be carried out on area over which plantation has been undertaken under project by utilization of foreign funds. ", "5. The mining activity can be permitted only on the basis of sustainable development and on compliance of stringent conditions. ", "6. The Aravalli hill range has to be protected at any cost. In case despite stringent condition, there is an adverse irreversible effect on the ecology in the Aravalli hill range area, at a later date, the total stoppage of mining activity in the area may have to be considered. For similar reasons such step may have to be considered in respect of mining in Faridabad District as well. ", "7. is directed to prepare a short term and long term action plan for the restoration of environmental quality of Aravalli hills in Gurgaon district having regard to what is stated in final report of within four months. ", "8. Violation of any of the conditions would entail the risk of cancellation of mining lease. The mining activity shall continue only on strict compliance of the stipulated conditions. The matters are directed to be listed after reopening of courts after summer vacation on receipt of the report from ."], "relevant_candidates": ["0000282585", "0000764031", "0001186098", "0001264331", "0001646284", "0001938608", "0001964392", "0048415287", "0181685796"]} {"id": "0076589794", "text": ["THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 26.10.2010 + FAO (OS) 341/2007 SHUMITA DIDI SANDHU ..... Appellant versus & OTHERS ..... Respondents ", "Advocates who appeared in this case: ", "For the Appellant : Mr with Mr For the Respondents : Mr , Sr Advocate with Mr and Mr ", "HON'BLE MR JUSTICE HON'BLE MS JUSTICE ", "1. Whether Reporters of local papers may be allowed to see the judgment ? Yes ", "2. To be referred to the Reporter or not ? Yes ", "3. Whether the judgment should be reported in Digest ? Yes , J ", "1. This appeal raises interesting issues with regard to the concepts of \u201ematrimonial home\u201f and \u201eshared-household\u201f and also concerning the right of residence of a wife in the matrimonial home, shared-household or some other place. ", " ", "2. This appeal is directed against the judgment and / or order dated 02.07.2007 passed by a learned single Judge of this court in IA Nos.291/2005 and 8444/2005 in CS(OS) 41/2005. The suit had been filed by the appellant against her husband, Mr (defendant No.1), her father-in-law, Mr (defendant No.2) (since deceased) and her mother-in-law, Mrs (defendant No.3). During the pendency of the suit as also the said applications, the appellant\u201fs father-in-law (the said defendant No.2) passed away and his legal representatives, being his widow (Mrs ), son (Mr ), daughter, Mrs and another daughter (Mrs ), were brought on record. ", " ", "3. In the said suit, the appellant / plaintiff had sought the following reliefs:- ", "\"(a) Grant a decree of permanent injunction restraining the Defendant Nos. 1, 2 and 3 from committing themselves or through their agents / representatives acts of violence and intimidation against the plaintiff; ", "(b) Grant a decree of permanent injunction restraining the Defendant Nos. 1, 2 and 3 and their agents / representatives from forcibly dispossessing the Plaintiff out of her matrimonial home without due process of law; ", "(c) Grant any other / further relief / relief (s) as may be deemed fit and proper under the facts and circumstances of the case.\" ", "4. In IA No.291/2005, the appellant / plaintiff sought an interim order restraining the defendants from dispossessing her from her \u201ematrimonial home\u201f, which, according to her, was the property at 18-A, Ring Road, Lajpat Nagar-IV, New Delhi. It is her case that she was occupying the first floor of the said property and there was imminent danger of her being dispossessed from the said portion of the said property without following the due process of law. IA No.8444/2005 was filed by the appellant / plaintiff seeking interim orders restraining the defendants from creating any third party rights in the said property. The said applications were dismissed by the learned single Judge by virtue of the impugned order dated 02.07.2007. The learned single Judge was of the view that the plaintiff could not claim any right to stay in the said property as it did not belong to her husband (defendant No.1), but it belonged to her parents-in- law. Taking note of the statement under Order 10 of the Code of Civil Procedure, 1908 made by the defendant No.2 that the defendants have no intention to throw out the plaintiff from the first floor of the said property, which is occupied by her, without following the due process of law, the learned single Judge ordered that the said defendants would be bound by the statement. However, the learned single Judge clarified that this would not prevent the defendants 2 and 3 from taking recourse to law for dispossessing the plaintiff. ", " ", "5. The learned single Judge in paragraph 9 of the impugned judgment and / or order observed as under:- ", "\"There is no dispute that the suit property belongs to the defendant Nos. 2 and 3. The plaintiff\u201fs husband, namely, the defendant No.1 has no share and / or interest in the same.\" ", "Again in para 9 of the impugned judgment / order, the learned single Judge observed that:- ", "\"The question for prima facie consideration is as to whether the plaintiff has any right to stay in the suit property in which her husband has no right, interest or share and belongs to her father-in-law and mother-in-law. Incidental question for determination is as to whether it could be treated as matrimonial home of the plaintiff?\" ", "FAO (OS) 341/07 Page 3 of 38 ", "6. The learned single Judge, it is obvious from the aforesaid extracts, proceeded on the basis that the said property belonged to defendant Nos. 2 and 3, that is, the father-in-law and the mother-in-law and that there was no dispute with this proposition. Consequently, relying on the decision in the case of : 2007 (3) SCC 169, he observed that the ratio of the said decision was clearly that the daughter-in-law has no legal right to stay in the house which belongs to her parents-in-law. The learned single Judge observed that the legal position which emerged was that the husband had a legal and moral obligation to provide residence to his wife and, therefore, the wife was entitled to claim a right of residence against her husband. He further observed that if the house in question where she lived after marriage belonged to her husband, the same could certainly be treated as a matrimonial home. Furthermore, if the house in question belonged to a Hindu undivided family in which her husband was a co-parcener, even that house could be termed as a matrimonial house. But, where the house belonged to the parents-in-law in which the husband had no right, title or interest and the parents-in-law had merely allowed their son alongwith the daughter-in-law to stay in the said house, it would amount to mere permissive possession on the part of the daughter-in-law and would not give her any right to stay in the said house inasmuch as the same would not be her matrimonial home. ", " ", "7. The learned single Judge also noted that there was a serious dispute as to whether the property could, at all, be termed as a matrimonial home. He referred to the pleadings from which it, prima facie, appeared that the appellant / plaintiff lived in the said property from the date of her marriage in 1994 till 1996 when she moved out to Defence Colony as her relations with the defendants had become strained. Interestingly, her husband (defendant No.1) also joined her and started residing with her in Defence Colony, which was a rented accommodation. In 1999, the appellant / plaintiff and her husband (defendant No.1) returned to the said property and resided in the first floor. Serious allegations have been hurled by the plaintiff as well as the defendant No.1 against each other with regard to their chastity. There is also an allegation that the defendant No.2 married another lady sometime in 2004 and that she had moved into the said property. It was alleged that because of these incidents, the appellant / plaintiff left the property in 2004. Of course, she re-entered the first floor of the said property on 10.10.2004 at 2.30 a.m. It is because of this circumstance, that the learned single Judge was prima facie of the view that there was some credence in the allegations of the defendants that the appellant / plaintiff had forced her entry into the said property on 10.10.2004 at an odd hour. Another circumstance which may be noted is that the appellant / plaintiff had also taken a flat in Mumbai for the period December 1999 to November 2000 and that the lease of the flat was in her name and she had stayed there for three-four months and her husband had also joined her. It is because of these circumstances that the learned single Judge was of the view that there was a serious dispute as to whether the suit property could, at all, have been termed as a matrimonial house, particularly when the appellant / plaintiff had left the said property in the early part of 2004 and had, prima facie, forcibly entered the same on 10.10.2004. ", " ", "8. Anyhow, the main thrust of the reasoning adopted by the learned single Judge was that the daughter-in-law (appellant/plaintiff) cannot claim any right to stay in the said property inasmuch as the said property belonged to her parents-in-law. This conclusion is based on the said decision of in the case of (supra). ", " ", "9. Mr , the learned counsel appearing on behalf of the plaintiff raised three points of attack insofar as the impugned decision is concerned. His first and main point was that the learned single Judge had proceeded on the basis that there was no dispute that the property belonged to the defendants 2 and 3. He submitted that the plaintiff had nowhere admitted the defendants 2 and 3 to be the sole and exclusive owners of the said property. Consequently, the learned counsel submitted that since the very premise was wrong, the conclusion based on such premise was obviously erroneous. He also submitted that because the said premise was faulty, the decision of in the case of (supra) would not be applicable to the facts and circumstances of the present case. ", "10. The second point of attack was that the learned single Judge had erred in holding that the appellant / plaintiff, could not, as a matter of law, claim any right in the property of the mother-in-law. He submitted that the plaintiff / appellant had a right of residence and that this proposition was not correct. The third point of attack was that since the learned single Judge had decided that in law, the appellant / plaintiff could not claim any right in the property of the mother-in-law, the suit as such had virtually been dismissed without returning any conclusive findings or recording any satisfaction on the factual aspects at all. He, therefore, submitted that this was a fit case for remand, after the impugned order was set aside. ", " ", "11. Elaborating on the first aspect of the matter, that the appellant / plaintiff had not admitted the defendant Nos. 2 and 3, jointly or the defendant No.3 by herself, to be the exclusive owner(s) of the said property, Mr drew our attention to the pleadings of the parties and, in particular, to the written statements filed on behalf of the defendant Nos.1, 2 and 3. Referring to para 3 of the written statement of the defendant No.1, Mr pointed out that the stand taken is that the said property belonged to defendant No.3 (the mother-in-law). However, in paragraph 17 of the same written statement, a somewhat different statement has been made to the following effect:- ", "\"... The suit property lawfully belongs to the parents of the defendant No.1 and the plaintiff has no claim whatsoever in the said suit property.\" ", "Again, in para 21 of the written statement of the defendant No.1, it is stated as under:- ", " ", "\"... the matrimonial house of the parties will be the residence of the husband i.e. defendant No.1 and not the house / property of the parents of the husband i.e. defendant No.2 and 3 to whom the suit property belongs. The suit property is the self acquired property of the defendant No.2 and 3 and no person except the defendant No.3 has any right, title or interest in the suit property. The matrimonial home of the plaintiff thus will be the house in which her husband i.e. defendant No.1 resides who has his residence in Dehradun and not in the suit property.\" ", "12. Mr submitted that from the aforesaid averments made in the written statement, the defendant No.1 has taken conflicting stands. At one place, the defendant No.1 has stated that the property belongs to his mother (defendant No.3) and not to the plaintiff and at other places he has stated that it belongs to his parents, i.e., both defendant Nos.2 and 3. ", "13. Referring to the written statement of the defendant No.2, Mr submitted that the defendant No.2 claimed the said property to have been built from his personal earnings and also on the basis of the loan which he had taken from . He referred to the following averments in paragraph 6 of the written statement:- ", "\"6. That the correct facts in brief imperative for the proper adjudication of the present matter are that the house at 18A, Ring Road, Lajpat Nagar was built from the personal earnings of defendant No.2 and also the loan which he had taken from . The defendant No.2 was living on the ground floor with his wife, defendant No.3 and three unmarried children. The plaintiff and the defendant No.1 got married in the year 1994. After the marriage, the plaintiff and the defendant No.1 lived with defendants no.2 and 3 in the ground floor of their house. Thereafter, in the year 1996, the plaintiff and the defendant No.1 left the said premises at Lajpat Nagar and took a separate residential premises for their living in C-461, Defence Colony, New Delhi which remained their residential premises till 1999. The said house was taken on lease by plaintiff and defendant No.1 and all the payments for rent and were duly reflected in defendant No.1\u201fs Bank statement for the said period. Thereafter plaintiff and defendant No.1 had been living at different places from time to time. For the last few years plaintiff and defendant no.1 started living in defendant No.1\u201fs house in Dehradun or at times at the First Floor of the suit property with permission of defendants no.2 & 3. Whenever they stayed at Lajpat Nagar House even though they maintain separate kitchen. Defendant No.2 had been paying all electricity and water charges including payment to security guards and other related expenses. For the said reasons the first floor at Lajpat nagar house belonging to defendant No.3 was never considered to be matrimonial home of plaintiff and defendant No.1.\" ", "The defendant No.3, in paragraph 11 (preliminary objections) of her written statement, has categorically stated that the suit property is the self acquired property of the defendant No.3 and no person except the defendant No.3 has any right, title or interest in the suit property. In para 2 (parawise reply on merits), the defendant No.3 once again stated that she was the true and legal owner of the suit property and the defendant No.2 and 3 have been in possession of the suit property. ", " ", "14. In view of the averments made in the said written statements, Mr submitted that the stand of the defendants is unclear. At one point, they claim that the property belongs to the defendant Nos.2 and 3 and at other points they claim that the property belongs to defendant No.3 exclusively. Thus, according to Mr , the shifting stands are indicative of the ulterior designs of the defendants to oust the appellant / plaintiff from her matrimonial home. ", " ", "15. He then referred to para 21 of the replication, where, for the first time, the plaintiff raised the plea that the said property was not the self- acquired property of the defendants 2 and 3 and also denied that no person except the defendant No.3 had any right, title or interest in the suit property. It was, therefore, contended by Mr that there was a dispute with regard to the ownership of the suit property. Continuing further, Mr referred to the Order X statement made under the Code of Civil Procedure, 1908 by the defendant No.2, where once again, the said defendant took a different stand that the property bearing No.18-A, Ring Road, Lajpat Nagar, Delhi had been bought by his wife, Mrs out of her own income and that the perpetual lease deed was executed by in her favour. ", "16. Mr also submitted that an application being IA No.8442/2005 had been filed by the appellant / plaintiff under order 6 Rule 17, seeking amendment of the plaint. One of the amendments sought was the introduction of para 12-B, wherein the plaintiff proposed to allege that the defendant No.3, in collusion with the other defendants, had transferred part of the above said property in the name of defendant No.4 falsely claiming this to be her absolute property, knowing fully well that the said property was the joint ancestral property and by making false averments regarding possession and consideration. In other words, the appellant / plaintiff sought to take, inter alia, the plea of joint ancestral property by virtue of the said amendment application. Mr said that that application is pending and is yet to be disposed of. He submitted that the learned single Judge ought to have disposed of the application for amendment prior to passing the impugned order. This, according to him, is another reason as to why the impugned order ought to be set aside and the matter be remanded to the learned single Judge for a fresh consideration. ", " ", "17. There was also some controversy with regard to a status quo order dated 08.01.2005. But, we need not go into that aspect of the matter. The main thrust of the arguments advanced by Mr was that the foundation on which the learned single Judge had premised his conclusions was itself faulty inasmuch as the learned single Judge, assumed that there was no dispute that the suit property belonged to the defendants 2 and 3 in which the appellant\u201fs / plaintiff\u201fs husband had no share or interest. He submitted that he has been able to show, prima faice, that there was a dispute as to whether the defendants 2 and 3 or the defendant No.3 alone was the exclusive owner of the said property and that the issue as to whether it was a joint family property also needed to be looked into. Therefore, the decision in the case of (supra) would not be applicable to the facts and circumstances of the present case, because, in the decision, the position with regard to ownership, being that of the mother-in- law, was undisputed. ", " ", "18. Referring to the following decisions, Mr submitted that the property in question was the matrimonial home of the appellant / plaintiff and she had a right to reside therein and, therefore, she was entitled to an order restraining the defendants from dispossessing her and / or creating any third party interest therein:- ", "1) : 162 (2009) DLT 459; ", "2) .: 2007 (1) SCC 521; ", "3) : ", "AIR 2009 SC 636; ", "4) : 1995 (6) SCC 88; ", "5) : 2007 (3) SCC 169; ", "6) : 2009(2) RCR(Civil) 883; ", "7) : ", "[CRL. R.C. Nos.48 and 148 of 2008 and M.P. Nos. 1 of 2008 decided on 25.03.2008]. ", " ", "19. Mr , the learned senior counsel, appearing for the respondent No.3, submitted that the present appeal is merely academic because the learned single Judge has virtually decreed the suit. He submitted that one of the reliefs claimed in the suit was to permanently injunct the defendants from forcibly dispossessing the plaintiff out of her matrimonial home \"without due process of law\". He submitted that this relief has already been granted by the learned single Judge by virtue of the impugned order, whereby he directed as under:- ", "\"19. In view of the above, insofar as the right of the plaintiff to stay in the suit property is concerned, she cannot claim any such right as the property belongs to her parents-in-law. However, statement of defendant No.2 was recorded by the under Order X CPC where he stated that he or his wife had no intention to throw her out of the premises in question without due process of law. ", "FAO (OS) 341/07 Page 12 of 38 ", "Therefore, while dismissing the applications of the plaintiff, it is ordered that the defendant Nos.1 and 2 shall remain bound by the said statement. This, however, would not prevent the defendants to take recourse to the law for dispossessing the plaintiff.\" ", "20. Mr further submitted that at the time when IA Nos. 291/2005 and 8444/2005 were being argued and which ultimately came to be disposed of by the impugned order, the appellant / plaintiff did not press for hearing of the amendment application. Consequently, she cannot now be permitted to submit that the said amendment application ought to have been decided prior to the said IA Nos.291/2005 and 8444/2005. He further submitted that the appellant / plaintiff did not press for any additional issue with regard to the title in respect of the said property. Referring to the decision in : 2002 (2) SCC 256, Mr submitted that the rights of the parties stand crystallised on the date of institution of the suit and subsequent events are not to be taken into account unless the three circumstances referred to therein arise. The said three circumstances are:- ", "(i) that the relief, as claimed originally has, by reason of subsequent events, become inappropriate or cannot be granted; ", "(ii) that taking note of such subsequent event or changed circumstances would shorten litigation and enable complete justice being done to the parties; and ", "(iii) that such subsequent event is brought to the notice of the court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise. ", "FAO (OS) 341/07 Page 13 of 38 ", "21. Mr fully supported the impugned judgment and contended that there was no infirmity in the same and, therefore, did not call for any interference. He submitted that the case of the appellant / plaintiff was that there was no abandonment of the matrimonial home and that she had a right to live in the matrimonial home even if it belonged to her in- laws. Earlier, the decision in the case of : 116 (2005) DLT 646 had been relied upon by the appellant / plaintiff as observed in the impugned order itself, but the decision in (supra) reversed the decision of the and sealed the fate of the appellant / plaintiff. Mr also referred to a decision of a learned single Judge of this court in the case of v. & Others: (2008) 106 DRJ 623 by way of persuasive value to submit that under the Protection of Women from Domestic Violence Act , 2005, there is no concept of matrimonial home. On the other hand, the concept is of a \u201eshared house-hold\u201f. In that case, the learned single Judge, after referring to and relying upon the decision of the in (supra) held that a daughter-in-law has no right to live in the house belonging to her parents-in-law. ", "22. Mr also submitted that in the present case, the said property cannot be regarded as the matrimonial home because, first of all, the appellant / plaintiff left the house in 1996 when she went to reside in Defence Colony. Her husband, the defendant No.1 also left the said property and resided with her in Defence Colony. Secondly, the appellant / plaintiff resided in Dehradun and, thirdly, she resided in Mumbai and then in 2004, she once again left the said property, only to re-enter the same on 10.10.2004 at 2.30 a.m. He referred to the order X, CPC statement of the appellant / plaintiff, wherein she stated that she had married the defendant on 05.11.1994 and that she had shifted to Defence Colony in June, 1996 and remained there till March, 1999. She then stated that she was forced to leave her matrimonial home in 2004. She also admitted that she took a flat in Bombay during the period December 1999 till November, 2000 and that the lease of the Bombay flat was in her name and that she was in Bombay for three to four months and that her husband had joined her later on. She also admitted to her going to Pakistan in January 2004 and staying there for six days alongwith a number of other persons. Thereafter, she went to Pakistan again on 12.04.2004 to 24.05.2004 with a women\u201fs organization. She also admitted that during the period February 2004 till 09.10.2004, no formal complaint was lodged by her. ", " ", "23. According to Mr , the Protection of Women from Domestic Violence Act , 2005, would come into play only when domestic violence takes place. This is not a case of domestic violence as there has been no whisper of any violence during February 2004 to 10.10.2004 when the appellant / plaintiff re-entered the said property at 2.30 a.m. He submitted that apart from this not being a case of domestic violence at all, the appellant / plaintiff having come to learn that the defendant No.3 was interested in disposing of the said property, wanted to put an impediment in the sale so as to extract some money from the defendants. For all these reasons, Mr contended that the appeal be dismissed. ", "24. Let us first deal with the submission of the learned counsel for the appellant that the foundation of the learned single Judge\u201fs decision that there was no dispute that the suit property belongs to defendant Nos. 2 and 3 was itself faulty and, therefore, the entire decision is liable to be set aside. It is true that the learned single Judge had proceeded on the basis that there was no dispute that the suit property belonged to defendants 2 and 3 and even the question which was taken up for prima facie consideration by the learned single Judge, as would be apparent from paragraph 9 of the impugned order, was founded on the understanding that the appellant\u201fs husband (defendant No.1) had no right, title or share in the said property and that the said property belonged to the appellant\u201fs father-in-law and mother- in-law. We have already noticed above that the learned counsel for the appellant was at pains to attempt to demonstrate that the appellant / plaintiff nowhere admitted that the said property belonged to her father-in-law and mother-in-law or to her mother-in-law exclusively. He had also pointed out that there is no admission by the appellant / plaintiff that her husband (defendant No.1) did not have any right, interest or share in the said property. The learned counsel for the appellant had drawn our attention to the written statements filed by the defendants as also the replication filed by the appellant / plaintiff and the Order X CPC statement of the defendant No.2. ", " ", "25. On going through the relevant portions of the said documents, it appears that the defendant No.1 took the stand that the said property belonged to his mother (defendant No.3). However, in the very same written statement, the defendant No.1 had also stated that the said property belonged to defendant Nos. 2 and 3 and that it was their self-acquired property. In the very same paragraph (para 21 of the written statement of the defendant No.1), it is again stated that no person except the defendant No.3 has any right in the said property. The defendant No.2 in his written statement stated that the said property was made from his personal earnings and from a loan taken from . However, in his Order X CPC statement, the defendant No.2, took a different stand and stated that the property was bought by his wife (defendant No.3) out of her own funds. The defendant No.3, however, took a clear stand in her written statement that the said property was her self- acquired property and no person except her had any right, title or interest in the same. She stated that while she was the true and legal owner of the said property, her husband (defendant No.2) and she were in possession of the suit property. ", " ", "26. It does appear from the averments made in the written statements of the defendant Nos. 1 and 2 that there is a shift in the stand taken with regard to the ownership of the said property. The defendant No.1 had taken the stand that the property belongs to his mother (defendant No.3) and that no person except the defendant No.3 had any right, title or interest in the same. However, he has also averred that the said property belonged to defendants 2 and 3. A similar ambivalence is discernible in the stand taken by the defendant No.2 in his written statement and his order X CPC statement. However, this much is clear that none of the defendants have stated that the appellant\u201fs husband (defendant No.1) had any right, title or interest in the said property. There is only some lack of clarity in the pleadings with regard to the exclusivity of ownership of the defendant No.3. In other words, there is a degree of ambiguity, particularly on the part of defendant No. 2 as to whether the defendant No.3 is the sole and exclusive owner of the said property or whether it also belongs to the defendant No.2. However, there is no confusion with regard to the stand that the said property does not at all belong to the appellant\u201fs husband (defendant No.1). ", "27. In the replication, as pointed out earlier, the appellant / plaintiff has sought to introduce a new dimension to the case by making an allegation that the said property is not the self-acquired property of the defendant Nos.2 and 3. The appellant / plaintiff had also filed an amendment application under Order 6 Rule 17, CPC to introduce new para 12 B in the plaint where she has taken the plea of joint ancestral property. However, as pointed out above, the appellant did not press for a decision on this application at the time when IA Nos. 291/2005 and 8444/2005 were being argued before the learned single Judge. In any event, the plea of joint ancestral property has been sought to be introduced only by way of an amendment to the plaint after the defendants had filed their written statements. It cannot be said as to whether the amendment, which has been sought, will be allowed by the learned single Judge or not. Therefore, as on the date on which the learned single Judge passed the order, there did not exist any plea of joint ancestral property in the pleadings of the parties. Furthermore, what is important is to examine the stand taken by the appellant / plaintiff in the plaint which unfortunately had not been alluded to by the learned counsel for the appellant. In para 2 of the plaint, it is merely stated that the property bearing No.18-A, Ring Road, Lajpat Nagar-IV, is the matrimonial home of the plaintiff since 1994 and that she is currently residing in the first floor of the said property and the defendants are living on the ground floor due to strained relations between the parties. ", " ", "28. In paragraph 8 of the plaint, it is alleged:- ", "\"The defendant Nos. 2 and 3 permitted the Defendant No.1 to live with \"\" in the matrimonial home of the Plaintiff with ulterior motives of driving the Plaintiff from the matrimonial home.\" ", "From the said averment, it is discernible that even as per the appellant\u201fs / plaintiff\u201fs understanding, the said property, which the plaintiff was regarding as her \u201ematrimonial home\u201f belonged to defendant Nos. 2 and 3 and the defendant No.1 only had permission to live in the same. ", " ", "29. In para 12 of the plaint, it has been averred that the plaintiff feared for her life and was filing the suit to protect her rights \"in her matrimonial home\". The plea taken was that she feared that she would be \"summarily thrown out without due process of law\". It was also stated that:- ", "\"... the defendants are trying to sell the house. They have already taken possession of a house being 201, Jor Bagh, New Delhi for their residence.\" ", "30. Two things are clear from the averments made in the plaint. The first is that it is nowhere alleged in the plaint by the appellant / plaintiff that the said property, which the appellant / plaintiff was referring to as her matrimonial home belonged to or was owned by her husband (defendant No.1). In fact, there is no averment in the plaint that the defendant No.1 had any right, title or interest or share in the said property. There is no averment that the property did not belong to the defendant No.3 exclusively. As pointed out above, it can be inferred that the appellant / plaintiff was of the view that the property actually belonged to the defendant Nos. 2 and 3. The other point which emerges from the averments contained in the plaint is that the suit was filed to protect her rights in her \u201ematrimonial home\u201f as she feared that she would be summarily thrown out without due process of law inasmuch as she had learnt that the defendants were trying to sell the house. It is in this context that the prayer (b) of the plaint, which seeks the grant of a decree of a permanent injunction restraining the defendants from forcibly dispossessing the plaintiff out of her \"matrimonial home\" without due process of law, gains importance and significance. ", " ", "31. Thus, looking at the totality of the circumstances and the pleadings as well as the order X, statements, it cannot be said that the learned single Judge was off the mark when he observed that there is no dispute that the suit property belongs to the defendant Nos. 2 and 3. Therefore, the first point of attack that the conclusion of the learned single Judge was founded on a wrong premise, falls to the ground. ", "32. In order to examine the other points urged by the learned counsel for the appellant to the effect that the conclusion of the learned single Judge that the appellant / plaintiff could not claim any right in the property of the mother-in-law was erroneous and that the learned single Judge in so holding had virtually dismissed the suit itself without recording any satisfaction on the facts, it would be necessary for us to consider the decisions cited at the bar as also the provisions of the Protection of Women from Domestic Violence Act , 2005 (hereinafter referred to as \u201ethe said Act\u201f). We shall first examine the decision of in the case of (supra) wherein a question arose as to whether the right of maintenance of a Hindu lady, includes the right of provision for residence. held as follows:- ", " ", "\"19. Maintenance, as we see it, necessarily must encompass a provision for residence. Maintenance is given so that the lady can live in the manner, more or less, to which she was accustomed. The concept of maintenance must, therefore, include provisions for food and clothing and the like and take into account the basic need for a roof over the head. Provision for residence may be made either by giving a lump sum in money, or property in lieu thereof. It may also be made by providing, for the course of the lady's life, a residence and money for other necessary expenditure. Where provision is made in this manner, by giving a life interest in property for the purposes of residence, that provision is made in lieu of a pre-existing right to maintenance and the Hindu lady acquires far more than the vestige of title which is deemed sufficient to attract Section 14(1) .\" ", "FAO (OS) 341/07 Page 21 of 38 ", "33. Next, we refer to the decision of in : 2005 (3) SCC 313, which is a decision which was relied upon by a learned single Judge of this court in the case of (supra), which in turn, was referred to by the learned counsel for the appellant. In (supra), in the context of a deserted wife continuing in possession of a property in which her husband was a tenant, observed that there was no precedent, much less a binding authority, from any court in India dealing with such a situation. However, noticed that English decisions could be found. The following passage from Lord Book ", "- The Due Process of Law - was quoted by ", "\"A wife is no longer her husband's chattel. She is beginning to be regarded by the laws as a partner in all affairs which are their common concern. Thus the husband can no longer turn her out of the matrimonial home. She has as much right as he to stay there even though the house does stand in his name. ... Moreover it has been held that the wife's right is effective, not only as against her husband but also as against the landlord. Thus where a husband who was statutory tenant of the matrimonial home, deserted his wife and left the house, it was held that the landlord could not turn her out so long as she paid the rent and performed the conditions of the tenancy.\" ", "34. After considering several other decisions, under English law, noted the Matrimonial Homes Act, 1983 applicable in England. The preamble of that Act stated that it was an Act to consolidate certain enactments relating to the rights of a husband or wife to occupy a dwelling house that has been a matrimonial home. The noted that one of the several rights expressly provided for by the Matrimonial Homes Act, 1983 in England was that so long as one spouse had a right to occupation, either of the spouses could apply to the court for an order requiring the other spouse to permit the exercise of that right. The Court observed as under:- ", "\"32. In our opinion, a deserted wife who has been or is entitled to be in occupation of the matrimonial home is entitled to contest the suit for eviction filed against her husband in his capacity as tenant subject to satisfying two conditions : first, that the tenant has given up the contest or is not interested in contesting the suit and such giving up by the tenant-husband shall prejudice the deserted wife who is residing in the premises; and secondly, the scope and ambit of the contest or defence by the wife would not be on a footing higher or larger than that of the tenant himself. In other words, such a wife would be entitled to raise all such pleas and claim trial thereon, as would have been available to the tenant himself and no more. So long as, by availing the benefit of the provisions of the Transfer of Property Act and Rent Control Legislation, the tenant would have been entitled to stay in the tenancy premises, the wife too can continue to stay exercising her right to residence as a part of right to maintenance subject to compliance with all such obligations including the payment of rent to which the tenant is subject. This right comes to an end with the wife losing her status as wife consequent upon decree of divorce and the right to occupy the house as part of right to maintenance coming to an end. ", "33. We are also of the opinion that a deserted wife in occupation of the tenanted premises cannot be placed in a position worse than that of a sub-tenant contesting a claim for eviction on the ground of subletting. Having been deserted by the tenant-husband, she cannot be deprived of the roof over her head where the tenant has conveniently left her to face the peril of eviction attributable to default or neglect of himself. We are inclined to hold - and we do so - that a deserted wife continuing in occupation of the premises obtained on lease by her husband, and which was their matrimonial home, occupies a position akin to that of an heir of the tenant-husband if the right to residence of such wife has not come to an end. The tenant having lost interest in protecting his tenancy rights as available to him under the law, the same right would devolve upon and inhere in the wife so long as she continues in occupation of the premises. Her rights and obligations shall not be higher or larger than those of the tenant himself. A suitable amendment in the legislation is called for to that effect. And, so long as that is not done, we, responding to the demands of social and gender justice, need to mould the relief and do complete justice by exercising our jurisdiction under Article 142 of the Constitution. We hasten to add that the purpose of our holding as above is to give the wife's right to residence a meaningful efficacy as dictated by the needs of the times; we do not intend nor do we propose the landlord's right to eviction against his tenant to be subordinated to wife's right to residence enforceable against her husband. Let both the rights co- exist so long as they can.\" ", "35. However, in (supra), the appeal filed by Smt. was dismissed because, in the meanwhile, a decree for dissolution of marriage by divorce based on mutual consent had been passed. noted that it was not the case of Smt. Anand, the appellant, that she was entitled to continue her residence in the tenanted premises by virtue of an obligation incurred by her ex husband to provide residence for her as part of maintenance. Consequently, held that she could not, therefore, be allowed to proceed with the appeal and defend her right against the claim for eviction made by the landlord. ", "36. The third decision of in this line is that of (supra). In that decision, took a view similar to that in (supra) that maintenance, in the case of a Hindu lady, necessarily must encompass a provision for residence. reiterated that the provision for residence may be made either by giving a lump sum in money or property in lieu thereof. It may also be made by providing, for the course of the lady\u201fs life, a residence and money for other necessary expenditure. ", " ", "37. The final decision in this line of cases is that of in S.R. Batra (supra). The facts before in S.R. Batra (supra) are somewhat similar to those in the present case and it would, therefore, be instructive to refer to them in some detail. married and started living with him in the second floor of the house belonging to \u201fs mother. It was not disputed that the said house at B-135, Ashok Vihar, Phase-I, Delhi belonged to \u201fs mother-in-law and not to her husband . Cross divorce petitions were filed by and and because of this discord, Smt shifted to her parents residence. She alleged that later on, when she tried to enter B-135, Ashok Vihar, she found the main entrance locked and consequently she filed a suit for mandatory injunction to enable her to enter the house. However, before any order could be passed in the said suit, Smt , alongwith her parents, allegedly broke open the locks and entered the said property. Another aspect was that had shifted to his own flat in Mohan Nagar, Ghaziabad before the said litigation had ensued. In the said suit, the trial Judge granted temporary injunction restraining the appellants therein from interfering with the possession of Smt in respect of the second floor of the said property. In appeal, the Senior Civil Judge, Delhi, by his order dated 17.09.2004, held that Smt was not residing in the second floor of the premises in question and that her husband was not living in the said property and the matrimonial home could not be said to be a place where only a wife was residing. He also held that Smt had no right to the properties other than that of her husband and consequently dismissed the temporary injunction application. Thereafter, a petition under Article 227 of the Constitution of India was filed before whereupon a learned single Judge of this court held that the second floor of the property in question was the matrimonial home of Smt and he further held that even if her husband shifted to Ghaziabad that would not make the Ghaziabad home the matrimonial home of Smt . On this reasoning, the learned single Judge of this court, held that Smt was entitled to continue to reside in the second floor of B-135, Ashok Vihar as that was her matrimonial home. disagreed with the view taken by the learned single Judge of this court. Referring to an earlier decision in the case of : 1987 (4) SCC 183, observed \"whereas in England the rights of the spouses to the matrimonial home are governed by the Matrimonial Homes Act, 1967, no such right existed in India\". ", " ", "38. A reference was made to the following observations in B.R. Mehta (supra):- ", "\"... it may be that with change of situation and complex problems arising it is high time to give the wife or the husband a right of occupation in a truly matrimonial home, in case of the marriage breaking up or in case of strained relationship between the husband and the wife.\" ", "FAO (OS) 341/07 Page 26 of 38 ", "However, in (supra) observed that the aforesaid extract was merely an expression of hope and it did not lay down any law and that it was only the legislature which could create a law and not the court. further held:- ", " ", "\"17. There is no such law in India, like the British Matrimonial Homes Act, 1967, and in any case, the rights which may be available under any law can only be as against the husband and not against the father-in-law or mother-in-law. ", "18. Here, the house in question belongs to the mother-in-law of Smt. and it does not belong to her husband . Hence, Smt. cannot claim any right to live in the said house. ", "19. Appellant No. 2, the mother-in-law of Smt. has stated that she had taken a loan for acquiring the house and it is not a joint family property. We see no reason to disbelieve this statement.\" ", "39. Thereafter, considered the provisions of the said Act and particularly the concept of a \"shared household\" under Section 2(s) of the said Act as also the provisions of Sections 17 and 19(1) thereof and repelled the argument that since had lived in the property in question in the past, therefore, the said property was her \u201eshared household\u201f. observed as under:- ", " ", "\"26. If the aforesaid submission is accepted, then it will mean that wherever the husband and wife lived together in the past that property becomes a shared household. It is quite possible that the husband and wife may have lived together in dozens of places e.g. with the husband's father, husband's paternal grand parents, his maternal parents, uncles, aunts, brothers, sisters, nephews, nieces etc. If the interpretation canvassed by the learned Counsel for the respondent is accepted, all these houses of the husband's relatives will be shared households and the wife can well insist in living in the all these houses of her husband's relatives merely because she had stayed with her husband for some time in those houses in the past. Such a view would lead to chaos and would be absurd. ", "27. It is well settled that any interpretation which leads to absurdity should not be accepted.\" ", " finally held as under:- ", " ", "\"29. As regards Section 17(1) of the Act, in our opinion the wife is only entitled to claim a right to residence in a shared household, and a 'shared household' would only mean the house belonging to or taken on rent by the husband, or the house which belongs to the joint family of which the husband is a member. The property in question in the present case neither belongs to nor was it taken on rent by him nor is it a joint family property of which the husband is a member, it is the exclusive property of appellant No. 2, mother of . Hence it cannot be called a 'shared household'. ", "30. No doubt, the definition of 'shared household' in Section 2(s) of the Act is not very happily worded, and appears to be the result of clumsy drafting, but we have to give it an interpretation which is sensible and which does not lead to chaos in society.\" ", "40. From this line of cases, it is apparent that the concept of maintenance, insofar as a Hindu lady is concerned, necessarily encompasses the provision for residence. Furthermore, the provision for residence may be made either by giving a lumpsum in money or property in lieu thereof. It may also be made by providing, for the course of the lady\u201fs life, a residence and money for other necessary expenditure. Insofar as Section 17 of the said Act is concerned, a wife would only be entitled to claim a right of residence in a \"shared household\" and such a household would only mean the house belonging to or taken on rent by the husband, or the house which belongs to the joint family of which the husband is a member. The property which neither belongs to the husband nor is taken on rent by him, nor is it a joint family property in which the husband is a member, cannot be regarded as a \"shared household\". Clearly, the property which exclusively belongs to the father-in-law or the mother-in-law or to them both, in which the husband has no right, title or interest, cannot be called a \"shared household\". The concept of matrimonial home, as would be applicable in England under the Matrimonial Homes Act, 1967, has no relevance in India. ", "41. In the light of the aforesaid principles, the appellant / plaintiff would certainly have a right of residence whether as a part of maintenance or as a separate right under the said Act. The right of residence, in our view, is not the same thing as a right to reside in a particular property which the appellant refers to as her \u201ematrimonial home\u201f. The said Act was introduced, inter alia, to provide for the rights of women to secure housing and to provide for the right of the women to reside in a shared household, whether or not she had any right, title or interest in such a household. ", "42. Let us now look at the relevant provisions of the said Act. They are:- ", "\"2. Definitions. - In this Act, unless the context otherwise requires, ", "(a) \"aggrieved person\" means any woman who is, or has been, in a domestic relationship with the respondent and who alleges to have been subjected to any act of domestic violence by the respondent; ", "xxxx xxxx xxxx xxxx ", "(q) \"respondent\" means any adult male person who is, or has been, in a domestic relationship with the aggrieved person and against whom the aggrieved person has sought any relief under this Act: ", "Provided that an aggrieved wife or female living in a relationship in the nature of a marriage may also file a complaint against a relative of the husband or the male partner; ", "xxxx xxxx xxxx xxxx ", "(s) \"shared household\" means a household where the person aggrieved lives or at any stage has lived in a domestic relationship either singly or along with the respondent and includes such a household whether owned or tenanted either jointly by the aggrieved person and the respondent, or owned or tenanted by either of them in respect of which either the aggrieved person or the respondent or both jointly or singly have any right, title, interest or equity and includes such a household which may belong to the joint family of which the respondent is a member, irrespective of whether the respondent or the aggrieved person has any right, title or interest in the shared household.\" ", "43. Chapter IV of the said Act deals with the procedure for obtaining orders or reliefs. The said chapter comprises of Sections 12 to 29 . Section 12 provides for the making of an application to a Magistrate seeking one or more of the reliefs under the Act. Section 17 relates to the right to reside in a \"shared household\". Section 18 prescribes the protection orders which the Magistrate may pass on being prima facie satisfied that domestic violence has taken place or is likely to take place. Section 19 contemplates the residence orders that may be passed by the Magistrate on being satisfied that domestic violence has taken place. Since the said provisions of Sections 17 , 18 and 19 are relevant, they are set out in full hereinbelow:- ", "\"17. Right to reside in a shared household. - (1) Notwithstanding anything contained in any other law for the time being in force, every woman in a domestic relationship shall have the right to reside in the shared household, whether or not she has any right, title or beneficial interest in the same. ", "(2) The aggrieved person shall not be evicted or excluded from the shared household or any part of it by the respondent save in accordance with the procedure established by law. ", "18. Protection orders.-The Magistrate may, after giving the aggrieved person and the respondent an opportunity of being heard and on being prima facie satisfied that domestic violence has taken place or is likely to take place, pass a protection order in favour of the aggrieved person and prohibit the respondent from- ", "(a) committing any act of domestic violence; ", "(b) aiding or abetting in the commission of acts of domestic violence; ", "(c) entering the place of employment of the aggrieved person or, if the person aggrieved is a child, its school or any other place frequented by the aggrieved person; ", "(d) attempting to communicate in any form, whatsoever, with the aggrieved person, including personal, oral or written or electronic or telephonic contact; ", "(e) alienating any assets, operating bank lockers or bank accounts used or held or enjoyed by both the parties, jointly by the aggrieved person and the respondent or singly by the respondent, including her stridhan or any other property held either jointly by the parties or separately by them without the leave of the Magistrate; ", "(f) causing violence to the dependants, other relatives or any person who give the aggrieved person assistance from domestic violence; ", "(g) committing any other act as specified in the protection order. ", "19. Residence orders.-(1) While disposing of an application under sub-section (1) of section 12 , the Magistrate may, on being satisfied that domestic violence has taken place, pass a residence order - ", "(a) restraining the respondent from dispossessing or in any other manner disturbing the possession of the aggrieved person from the shared household, whether or not the respondent has a legal or equitable interest in the shared household; ", "(b) directing the respondent to remove himself from the shared household; ", "(c) restraining the respondent or any of his relatives from entering any portion of the shared household in which the aggrieved person resides; ", "(d) restraining the respondent from alienating or disposing off the shared household or encumbering the same; ", "(e) restraining the respondent from renouncing his rights in the shared household except with the leave of the Magistrate; or ", "(f) directing the respondent to secure same level of alternate accommodation for the aggrieved person as enjoyed by her in the shared household or to pay rent for the same, if the circumstances so require: ", "Provided that no order under clause (b) shall be passed against any person who is a woman. ", "(2) The Magistrate may impose any additional conditions or pass any other direction which he may deem reasonably necessary to protect or to provide for the safety of the aggrieved person or any child of such aggrieved person. ", "(3) The Magistrate may require from the respondent to execute a bond, with or without sureties, for preventing the commission of domestic violence. ", "(4) An order under sub-section (3) shall be deemed to be an order under Chapter VIII of the Code of Criminal Procedure, 1973 (2 of 1974) and shall be dealt with accordingly. ", "(5) While passing an order under sub-section (1), sub-section (2) or sub-section (3), the court may also pass an order directing the officer in charge of the nearest police station to give protection to the aggrieved person or to assist her or the person making an application on her behalf in the implementation of the order. ", "(6) While making an order under sub-section (1), the Magistrate may impose on the respondent obligations relating to the discharge of rent and other payments, having regard to the financial needs and resources of the parties. ", "FAO (OS) 341/07 Page 32 of 38 ", "(7) The Magistrate may direct the officer in-charge of the police station in whose jurisdiction the Magistrate has been approached to assist in the implementation of the protection order. (8) The Magistrate may direct the respondent to return to the possession of the aggrieved person her stridhan or any other property or valuable security to which she is entitled to.\" ", "44. Another important provision is Section 23 which empowers the Magistrate to grant interim and ex parte orders on the Magistrate being satisfied that an application, prima facie, discloses that the respondent is committing or has committed an act of domestic violence or that there is a likelihood that the respondent may commit an act of domestic violence. The ex parte order may be passed on the basis of affidavits of the aggrieved person in terms of, inter alia, Sections 18 and 19 against the respondent. Section 26 of the said Act prescribes that any relief available under Sections 18 , 19 , 20 , 21 and 22 may also be sought in any legal proceedings before a civil court, family court or a criminal court, affecting the aggrieved person and the respondent, whether such proceeding was initiated before or after the commencement of the said Act. ", " ", "45. From the aforesaid provisions, it is clear that the expression \"matrimonial home\" does not find place in the said Act. It is only the expression \"shared household\" which is referred to in the said Act. \"Shared household\" is defined in Section 2(s) to mean a household where the person aggrieved lives or at any stage has lived in a domestic relationship either singly or along with the respondent and includes such a household whether owned or tenanted either jointly by the aggrieved person and the respondent, or owned or tenanted by either of them in respect of which either the aggrieved person or the respondent or both jointly or singly have any right, title, interest or equity. The \u201eshared household\u201f also includes such a household which may belong to the joint family, of which the respondent is a member, irrespective of whether the respondent or the aggrieved person has any right, title or interest in the shared household. The word \"household\" has not been defined in the said Act, however, Black\u201fs Law Dictionary, 9th Edition defines \u201ehousehold\u201f in the following manner:- ", "\"household, adj. Belonging to the house and family; domestic. ", "household, n. (14c) 1. A family living together, 2. A group of people who dwell under the same roof. Cf. FAMILY. ", "3. The contents of a house.\" ", "46. In contrast, the impression that we get by reading Section 2(s) , which defines \"shared household\" is that the \"household\" which is referred to in the said provision, relates to the property and not just to the group of people who dwell under the same roof or the family living together. Therefore, we are of the view that the word \"household\" used in Section 2(s) actually means a house in the normal sense of referring to a property, be it a full-fledged house or an apartment, or some other property by any other description. This is also clear because the expression \"household\" has been referred to as a place where the person aggrieved lives or, at any stage has lived. It also refers to a property whether owned or tenanted or in which the aggrieved person or the respondent has any right, title, interest or equity. Therefore, in order to fall within the meaning of \"shared household\" as defined in Section 2(s) , it is essential that the property in question must be one where the person aggrieved lives, or at any stage, has lived in a domestic relationship, either singly or alongwith the respondent. It also includes such a property whether owned or tenanted either jointly by the aggrieved person and the respondent or owned or tenanted by either of them in respect of which either of them or both jointly or singly have any right, title, interest or equity. It also includes a property which may belong to the joint family of which the respondent is a member, irrespective of whether the respondent or the aggrieved person has any right, title or interest therein. has already observed in S.R. Batra (supra) that the definition of \"shared household\" in Section 2(s) is not happily worded, but the courts have to give it an interpretation which is sensible and which does not lead to chaos in society. In this backdrop and in the facts and circumstances of the present case, the property in question cannot be considered to be a shared \"household\" because neither the appellant / plaintiff, nor her husband (defendant No.1) has any right, title or interest or equitable right in the same. The property may belong to defendant No.3 exclusively or to defendants 2 and 3 jointly, but it certainly does not belong to the defendant No.1 or the appellant / plaintiff. The position as it exists today also does not indicate even prima facie that the property in question is the property of a joint family of which the defendant No.1 is a member. Therefore, in our view, the property in question does not fall within the expression \"shared household\" as appearing in Section 2(s) of the said Act. ", "47. Section 17 of the said Act deals with the right of every women in a domestic relationship to reside in the shared household and, Section 17(2) , specifically provides that such a woman shall not be evicted or excluded from the shared household or any part of it by the respondent save in accordance with the procedure established by law. In other words, the wife can be evicted or excluded from the \"shared household\" after following the due procedure established by law and it is not an absolute right of the wife to reside in a \"shared household\". However, in the present case, we need to go into this aspect of the matter because Section 17 in itself would be inapplicable in view of the fact that the property in question cannot be regarded as a \"shared household\". The residence orders that may be passed under Section 19 are also subject to the Magistrate / court being satisfied that domestic violence has taken place. All the residence orders also relate to a \"shared household\". Consequently, Section 19 would also not come in the aid of the appellant / plaintiff. ", " ", "48. The learned counsel for the appellant had also referred to single Bench decisions of and in the cases of (supra) and and Padmavathi(supra) to indicate instances of cases where the decision in (supra) was distinguished. Those decisions are single Bench decisions and that too of other high courts and are, therefore, of no precedential values insofar as this Bench is concerned. We feel that in view of the prima facie finding that the property in question does not belong to the appellant\u201fs / plaintiff\u201fs husband nor does he have any share or interest in the same, there is no question of the said property being regarded as a \"shared household\" in terms of Section 2(s) of the said Act. We also find that the expression \"matrimonial home\" is not at all defined in the said Act and the concept of the matrimonial homes as prevailing in England by virtue of the Matrimonial Homes Act, 1967 cannot be applied in India as pointed out in (supra) and (supra). There is no doubt that the appellant / plaintiff has a right of a residence whether as an independent right or as a right encapsulated in the right to maintenance under the personal law applicable to her. But that right of residence does not translate into a right to reside in a particular house. More so, because her husband does not have any right, title or interest in the said house. As noted by the in the case of (supra) as well as in (supra), the right of residence or provision for residence may be made by either giving a lumpsum in money or property in lieu thereof. In the present case, we have noted earlier in this judgment that the learned single Judge had recorded that alternative premises had been offered to the appellant / plaintiff, but she refused to accept the same and insisted on retaining the second floor of the property in question claiming it to be her \u201ematrimonial home\u201f. ", " ", "49. We must emphasise once again that the right of residence which a wife undoubtedly has does not mean the right to reside in a particular property. It may, of course, mean the right to reside in a commensurate property. But it can certainly not translate into a right to reside in a particular property. In order to illustrate this proposition, we may take an example of a house being allotted to a high functionary, say a Minister in and who resides in the same house alongwith his wife, son and daughter-in-law. It is obvious that since the daughter-in-law and son reside in the said house, which otherwise is a government accommodation allotted to the father-in-law, the same could be regarded as the house where the son and daughter-in-law live in matrimony. Can the daughter-in-law claim that she has a right to live in that particular property irrespective of the fact that the father-in-law subsequently is no longer a Minister and the property reverts entirely to the ? Certainly not. It is only in that property in which the husband has a right, title or interest that the wife can claim residence and that, too, if no commensurate alternative is provided by the husband. ", " ", "50. In view of the foregoing discussion, no interference is called for with the impugned order and we also feel that the learned single Judge has amply protected the appellant / plaintiff by directing that she would not be evicted from the premises in question without following the due process of law. The appeal is dismissed. The parties shall bear their respective costs. ", ", J VEENA BIRBAL, J October 26, 2010 dutt"], "relevant_candidates": ["0000011266", "0000252590", "0000315007", "0000594165", "0000693512", "0000925132", "0001235126", "0001245246", "0001642416", "0001867354", "0152067037"]} {"id": "0091099808", "text": ["IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.4.2012 CORAM THE HON'BLE MR.JUSTICE AND THE HONOURABLE MR.JUSTICE M.DURAISWAMY W.P.Nos.950 of 2012, 30223 and 30184 of 2011, 104 and 105 of 2012 W.P.Nos.950 of 2012 and 30223 of 2011: .. Petitioner Vs. 1. rep. by the Secretary to New Delhi. 2. The rep. by the Branch Manager Sri Rangapalayam Branch \u0016 7. 3. The Assistant General Manager Stressed Assets Recovery Branch (SARB) Santhi Plaza, I Floor, 1/5 Brindavan Road, Fair Lands \u0016 4. 4. The Chief Judicial Magistrate \u0016 7. .. Respondents PRAYER in W.P.No.950 of 2012: Petition under Article 226 of the Constitution of India praying for a writ of Declaration, declaring that Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 is null and void. PRAYER in W.P.No.30223 of 2011: Petition under Article 226 of the Constitution of India praying for a writ of Declaration, declaring that the order of the fourth respondent in Crl.M.P.No.946 of 2011, dated 16.8.2011 passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 is null and void and consequently direct respondents 2 and 3 to follow the procedure prescribed under Section 13(2) and Section 13(4) of the Act before resorting to Section 14 of the Act. W.P.No.30184 of 2011: .. Petitioner Vs. 1. The Authorised Officer Nambiyur Branch Coimbatore \u0016 Gobi Road Near Bus Stand Nambiyur \u0016 638 458. 2.K.C.Sivakumar .. Respondents PRAYER: Petition under Article 226 of the Constitution of India praying for a writ of Certiorarified Mandamus to call for the records in C.M.P.No.421 of 2011 on the file of , , dated 9.4.2011 and quash the same as illegal, incompetent, unconstitutional and further forbear the first respondent from interfering with the possession of the petitioner's premises at No.24, Madathu Palayam, Perundurai and Taluk, District without due process of law. W.P.No.104 of 2012: 1.S.Muthupaava 2.V.Senthil Murugan 3.S.Saiyathu Jaabar .. Petitioners Vs. 1. The Authorised Officer Nambiyur Branch Coimbatore \u0016 Gobi Road Near Bus Stand Nambiyur \u0016 638 458. 2. .. Respondents PRAYER: Petition under Article 226 of the Constitution of India praying for a writ of Certiorarified Mandamus to call for the records in C.M.P.No.421 of 2011 on the file of , , dated 9.4.2011 and quash the same as illegal, incompetent, unconstitutional and further forbear the first respondent from interfering with the possession of the petitioners at the addresses stated in the affidavit without due process of law. W.P.No.105 of 2012: 1.V.Ganeshkumar 2.C.V.Moorthy 3.A.M.Abdulkalam Azad 4.V.C.Angayarkanni .. Petitioners Vs. 1. The Authorised Officer Nambiyur Branch Coimbatore \u0016 Gobi Road Near Bus Stand Nambiyur \u0016 638 458. 2. .. Respondents PRAYER: Petition under Article 226 of the Constitution of India praying for a writ of Certiorarified Mandamus to call for the records in C.M.P.No.421 of 2011 on the file of , , dated 9.4.2011 and quash the same as illegal, incompetent, unconstitutional and further forbear the first respondent from interfering with the possession of the petitioners at the addresses stated in the affidavit without due process of law. For Petitioners in : Mr. WP:950 of 2012 and 30223 of 2011 For Petitioners in : Mr. WP:30184 of 2011, 104 and 105 of 2012 For 1st Respondent in : Mr., WP:950 of 2012 and 30223 of 2011 For respondents 2 and 3 : Mr.Om Prakash in WP:950 of 2012 and for M/s.Ramalingam Associates 30223 of 2011 For 1st Respondent in : Mr.M.S.Krishnan, Sr.Counsel WP:30184 of 2011, for Mr. 104 and 105 of 2012 For 2nd Respondent in : No appearance WP:30184 of 2011, 104 and 105 of 2012 COMMON ORDER ,J. ", "While W.P.No.950 of 2012 has been filed by the borrower against whom action has been taken as per the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (for brevity, \"the SARFAESI Act \") for recovery \u0016 by giving demand notice under Section 13(2) of the SARFAESI Act; possession notice under Section 13(4) of the SARFAESI Act; and obtaining an order of assistance from the learned Chief Judicial Magistrate under Section 14 of the SARFAESI Act appointing an Advocate Commissioner to take possession with the help of the police, challenging the said Section 14 of the SARFAESI Act as ultra vires, the same borrower has filed W.P.No.30223 of 2011 challenging an order dated 16.8.2011 in Crl.M.P.No.946 of 2011 passed by the learned Chief Judicial Magistrate, under Section 14 of the SARFAESI Act, as stated above, as one passed without application of mind and in violation of the principles of natural justice and, hence, arbitrary and illegal. ", "2. The petitioner in the said writ petitions (W.P.Nos.950 of 2012 and 30223 of 2011) has availed from the second respondent/bank, on 31.1.2005, a housing loan to the extent of ` 8,82,000/- and, on 23.7.2008, a cash credit loan to the extent of ` 20,00,000/-, in respect of which the outstanding as on 1.3.2011 under the cash credit loan facility was ` 21,58,531.40 and the housing loan outstanding as on 19.3.2011 was arrived at ` 7,28,644.42. As regards the recovery of the said amount, the second respondent/bank has issued a demand notice under Section 13(2) of the SARFAESI Act on 2.9.2009 and since the amount has not been paid, possession notice was issued under Section 13(4) of the SARFAESI Act on 5.4.2011 for the claim of ` 28,97,725.91. Thereafter, the second respondent/bank has approached the learned Chief Judicial Magistrate, Salem by filing Crl.M.P.No.946 of 2011 under Section 14 of the SARFAESI Act, in which the learned Chief Judicial Magistrate has passed the following order: ", "\"The Authorized Officer Mr., of the petitioner has filed this petition under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 for taking possession of assets mentioned in the Description of Property. Perused the records. Sworn statement of the Authorized Officer of the petitioner recorded. After gleaning the entire materials made available with the court and upon hearing the petitioner, the court is fully satisfied with a need to render necessary assistance to the secured creditor in taking over the secured assets. All the legal formalities have already been complied with scrupulously and accordingly this court is inclined to confer the relief sought for by the petitioner under section 14 of the SARFAESI Act 2002. Thus, the Inspector of Police, , P.S., is required to render all necessary assistance to the secured creditor (petitioner) in taking over possession of the secured assets described in the description of property.\" ", "3. W.P.Nos.30184 of 2011, 104 and 105 of 2012 have been filed by the petitioners who are stated to be tenants of various residential portions in respect of which the respective landlords have borrowed amounts from the bank or stood as guarantor to the third party/borrowers and the bank while enforcing their rights under the SARFAESI Act , after giving demand notice under Section 13(2) of the SARFAESI Act to the borrowers (or) guarantors, who have been made as second respondent in these writ petitions, followed by possession notice under Section 13(4) of the SARFAESI Act, have obtained an order of assistance from the learned Chief Judicial Magistrate concerned under Section 14 of the SARFAESI Act appointing an Advocate Commissioner to take possession. ", "4. In W.P.No.30184 of 2011, the second respondent, who is the owner of the property, is stated to have let out a residential portion to the writ petitioner, and in respect of a borrowal by third parties/borrowers for which he stood as a guarantor mortgaging his impugned property, the first respondent/bank has issued a demand notice under Section 13(2) of the SARFAESI Act to the second respondent/landlord on 15.12.2010, followed by possession notice under Section 13(4) of the SARFAESI Act on 22.2.2011 and thereafter obtained the impugned order of assistance from the learned Chief Judicial Magistrate, under Section 14 of the SARFAESI Act on 9.4.2011 and, admittedly, in those proceedings the petitioner, who is facing the threat of eviction, is not a party and was also not given any notice. ", "5. Likewise, in W.P.No.104 of 2012, the second respondent/landlord has availed Cash Credit facility to an extent of ` 8.50 Crores and Term Loan facility to an extent of ` 3,35,95,000/- on 13.10.2009 from the first respondent/bank, in respect of which the residential houses in Door Nos.127, 126 and 110/1 in T.S.No.69 of Karumandi Chellipalayam Village, Perundurai, District were given as security for repayment, and since the second respondent/landlord failed to pay back the amount, the first respondent/bank, after giving demand notice under Section 13(2) of the SARFAESI Act on 15.12.2010, followed by possession notice under Section 13(4) of the SARFAESI Act on 22.2.2011, has obtained the impugned order of assistance dated 9.4.2011 from the learned Chief Judicial Magistrate, under Section 14 of the SARFAESI Act appointing an Advocate Commissioner to take possession. In these proceedings also, the petitioners, who claim to be tenants, have not been given notice and are under the threat of eviction. ", "6. Similarly, in W.P.No.105 of 2012, the second respondent stood as a guarantor for the borrower (second respondent in W.P.No.104 of 2012) for availing from the first respondent/bank Cash Credit facility to the extent of ` 8.50 Crores and Term Loan facility to the extent of ` 3,35,95,000/- on 13.10.2009 and due to the non payment by the borrower (second respondent in W.P.No.104 of 2012), after classifying the account as a non performing asset, the first respondent/bank has issued a demand notice under Section 13(2) of the SARFAESI Act on 15.12.2010, followed by possession notice under Section 13(4) of the SARFAESI Act on 22.2.2011 and thereafter, obtained an order of assistance from the learned Chief Judicial Magistrate, under Section 14 of the SARFAESI Act on 9.4.2011. As stated above, in this case also the petitioners, who are claiming themselves to be tenants, have not been given any notice at any point of time and are facing the threat of eviction. ", "7. Barring W.P.No.950 of 2012, wherein the petitioner has challenged the vires of Section 14 of the SARFAESI Act as null and void, in all other writ petitions the petitioners have challenged the validity and correctness of the orders passed by the Chief Judicial Magistrates under Section 14 of the SARFAESI Act. Inasmuch as W.P.No.950 of 2012 has been filed challenging the very provision of Section 14 of the SARFAESI Act, first off, it is necessary to deal with the said writ petition. ", "W.P.No.950 of 2012 ", "8. The petitioner in W.P.No.950 of 2012, as stated above, has chosen to challenge Section 14 of the SARFAESI Act having known that the validity of the SARFAESI Act has been upheld by , contending inter alia that Section 14 of the SARFAESI Act confers an unfettered power without proper guidance to the Chief Judicial Magistrate; that while passing an order of assistance by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act, there is no necessity for him to hear the affected party who is in actual possession of the property sought to be taken physical possession and, therefore, it is an infraction of the principles of natural justice; that the occupier, who is not given any notice before any order of assistance is passed by the learned Chief Judicial Magistrate under Section 14 of the SARFAESI Act, is suddenly disturbed from his possession and especially when it is dwelling house, it causes grave injustice to the occupant; that the said Section, being penal in nature, ought to have provided opportunity of hearing to the occupant before passing the order of assistance, especially when such power has been vested with the Chief Metropolitan Magistrate and District Magistrate; that even otherwise, Section 14 of the SARFAESI Act has to be read down in the interest of justice; that the said section is arbitrary and in violation of the fundamental rights guaranteed under Articles 14, 19(1)(e), 19(1)(g) and 21 of the Constitution of India and, therefore, is liable to be struck down. ", "9.1. It is the contention of Mr., learned counsel appearing for the petitioner that even though the validity of the SARFAESI Act has been upheld in the judgment of in , , has only considered the SARFAESI Act as a whole and not particularly Section 14 of the SARFAESI Act and, therefore, there is no impediment for this Court to decide independently the validity of Section 14 of the SARFAESI Act. ", "9.2. It is his contention that the validity or otherwise of Section 14 of the SARFAESI Act was not an issue before and the judgment of is binding only on the points raised and argued and applying the doctrine of sub silentio, it cannot be said that even the points which were not argued or discussed before have to be followed. To buttress the said contention, he has relied upon the decisions in (i) , ; (ii) , ; and (iii) , . ", "9.3. It is his submission that even in case, supra, where has upheld the validity of the SARFAESI Act , has left it open to decide in future any problem about the working of any particular provision of the SARFAESI Act and, therefore, while deciding the validity of the SARFAESI Act as a whole, has not considered the vires of Section 14 of the SARFAESI Act. ", "9.4. It is his further submission that even otherwise, by virtue of the subsequent amendment made to Section 13 of the SARFAESI Act, by introducing sub- section 3-A , and various other judgments in , ; , , much water has flown and, therefore, it requires a fresh consideration. ", "9.5. It is also his submission that the concept of judicial review has so much developed that even the validity of the statutes mentioned in Schedule IX to the Constitution of India can be tested by the Courts with the power of judicial review to decide as to whether such statutes satisfy the rule of law, as held in , . Therefore, according to him, the impugned Section 14 of the SARFAESI Act does not satisfy the principle of the rule of law and hence, it is liable to be struck down. ", "9.6. By relying upon various judgments in (i) , ; (ii) , ; (iii) ,; (iv) ,; (v) v. ,; (vi) , ; (vii) , AIR 1967 SC 1427; (viii) Nandini Sundar v. State of Chhattisgarh, ; (ix) , , it is his submission that by virtue of the effective march of law, the impugned provision has to be set aside. ", "9.7. It is his submission that it is not as if by striking down Section 14 of the SARFAESI Act as ultra vires, the entire SARFAESI Act will be negated and, therefore, even if the vires of the particular provision is challenged, the same would not affect the validity of the SARFAESI Act as upheld by in case, supra, and thus, he sought to read down the said provision. ", "9.8. He has also contended that due to various conflicting views expressed by various High Courts in respect of Section 14 of the SARFAESI Act and in order to save the bona fide occupants from arbitrary eviction by obtaining the order of assistance by the secured creditor by approaching the Chief Judicial Magistrate under Section 14 of the SARFAESI Act, the validity of the said provision needs a re-look. ", "9.9. He has also submitted that Section 14 of the SARFAESI Act apart from making the Chief Metropolitan Magistrate or District Magistrate as an agent of the secured creditor for the purpose of taking possession by using force, has, in effect, taken away the rights of the affected party granted even under the Code of Criminal Procedure. ", "9.10. Inasmuch as it has been held that Section 14 of the SARFAESI Act is not a judicial power exercised by the Chief Judicial Magistrate and when once such power impinges on the fundamental rights guaranteed to a citizen, according to the learned counsel, it is liable to be struck down as unconstitutional and ultra vires, by relying upon the judgments in (i) , AIR 1978 SC 597; and (ii) , . ", "9.11. It is his further submission that while under Section 14(2) of the SARFAESI Act the Chief Judicial Magistrate is entitled to direct the police to use necessary force for the purpose of taking possession, there are absolutely no guidelines for the purpose of using force and such unrestrained right may tend to arbitrary exercise of the power by the Chief Judicial Magistrate at the instance of the secured creditor, for whose benefit or assistance Section 14 of the SARFAESI Act has been provided. ", "9.12. He submits that in cases where the occupant is a tenant or a person other than a borrower, such person has a statutory right under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 or even under the Transfer of Property Act , 1882 not to be evicted except under certain circumstances and indeed such eviction should only be after following the procedure contemplated under the said Acts and, therefore, there is every possibility for an unscrupulous landlord, who is unable to evict a tenant, to take the aid of Section 14 of the SARFAESI Act for the purpose of taking physical possession by using force with the assistance of the Chief Judicial Magistrate. ", "9.13. He adds that inasmuch as the tenant is having a statutory protection under the local laws and his lawful occupation can be evicted by the landlord only under certain circumstances, the tenant, who is not a borrower and who has never entered into any contractual obligation with the bank or financial institution, cannot be thrown away even without his knowledge, which will be affecting the fundamental rights. ", "9.14. It is his submission that insofar as it relates to the borrower, Section 14 of the SARFAESI Act cannot be straightaway invoked, since it requires a demand notice under Section 13(2) of the SARFAESI Act, by which the borrower must be given sixty days time for payment; thereafter, by virtue of the subsequent amendment introducing sub- section 3-A to Section 13 of the SARFAESI Act, the borrower himself has got a right to give proper representation, which is considered, and of course, against rejection of the same, no application can be filed under Section 17 of the SARFAESI Act; and ultimately, it is only after giving possession notice under Section 13(4) of the SARFAESI Act, the secured creditor can approach the Chief Judicial Magistrate for taking possession under Section 14 of the SARFAESI Act, while such notice is not contemplated to an occupier other than the borrower and, therefore, according to him, the purport of the SARFAESI Act is unjust and he would submit that at least a notice is required to an occupant/tenant by relying upon a judgments of this Court in v. Authorised Officer, and others, 2011 (1) CTC 513 and v. Senior Manager, , 2011 (4) CTC 492. ", "9.15. It is also his submission that what is contemplated under the SARFAESI Act is symbolic possession and Section 14 of the SARFAESI Act, virtually enables the bank or financial institution to execute an order which is not permissible in any civil law. He submitted that even for recovery and execution of a civil decree, cannot direct an occupant to vacate and even for the purpose of enabling a purchaser under the Specific Relief Act to enforce his right under the agreement, the person who succeeds in the specific performance suit alone has to take action under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 to evict the tenant, and while so, under the impugned provision, namely Section 14 of the SARFAESI Act, by using the administrative fiat of the order of the learned Chief Judicial Magistrate, a bona fide occupier is thrown out mercilessly. ", "9.16. His submission is that when rule of law contemplates fairness and legitimacy of any action without arbitrariness, Section 14 of the SARFAESI Act, which is totally arbitrary, cannot be held to be valid in the eye of law. To substantiate his contention, he would rely upon some of the passages of the judgments of in , ; , AIR 1967 SC 1427; and , . ", "9.17. He would also submit that when the march of law is so much in respect of the principles of natural justice that even in cases where a statute is silent about affording an opportunity to the other side such opportunity, which is treated to be noble, is deemed to be inherent in any law, it is not known as to how under Section 14 of the SARFAESI Act a Chief Judicial Magistrate can pass an administrative order to assist the bank or financial institution directing the police to remove the occupant by using force, without even knowing as to whether the person in occupation is a borrower or any other person like tenant, for even a trespasser cannot be evicted without giving him an opportunity. Such forceful eviction from a residential property is totally against Article 300-A of the Constitution of India, which though is not a fundamental right, remains a constitutional right based on human rights and rule of law. ", "9.18. He would also rely upon the judgment in , to submit that right to property which has been guaranteed under Article 300-A of the Constitution of India in respect of tenants and other occupiers must be read with Article 21 of the Constitution of India as a right to life. To bolster the said contention, he also relied on the decision in , . ", "9.19. The learned counsel has also elaborately taken us through various other judgments, including some of the judgments of , to insist that there is no impediment on the part of this in holding Section 14 of the SARFAESI Act as unconstitutional. ", "10.1. Per contra, it is the contention of Mr. of , learned counsel appearing for the second respondent/bank that the power of the Chief Metropolitan Magistrate or District Magistrate conferred under Section 14 of the SARFAESI Act is purely executive and administrative in nature and it does not relate to the rights of any parties. ", "10.2. It is submitted that when the SARFAESI Act has been upheld by in case, supra, there is no scope for this Court to go into the correctitude of one of the sections. It is not as if was oblivious of the provisions of Section 14 of the SARFAESI Act and, in fact, there has been a reference and has consciously made an observation that there are certain sections which are monstrous, but nevertheless taking into consideration the object of the SARFAESI Act such difficulties are to be condoned. ", "10.3. It is his submission that Section 14 of the SARFAESI Act cannot be read independently and it is in continuation of the notices and various steps taken by the bank, namely (i) classifying the debt as a non performing asset due to the consistent failure on the part of the borrower in payment after following certain procedure in accordance with the Reserve Bank of India Guidelines; (ii) giving demand notice under Section 13(2) of the SARFAESI Act giving sixty days time so as to enable the borrower to make payment and also give representation; and (iii) finally taking possession by way of a notice under Section 13(4) of the SARFAESI Act, and it is only in cases where the bank itself is unable to take possession, it approaches the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act for assistance to take possession and, therefore, Section 14 of the SARFAESI Act hinges upon Section 13 of the SARFAESI Act and it cannot be read in isolation and moreover, Section 14 of the SARFAESI Act also forms part of Chapter III of the SARFAESI Act. ", "10.4. He contends that under the SARFAESI Act there is no dichotomy between symbolic possession and physical possession. ", "10.5. He would compare the power of the Chief Judicial Magistrate under Section 14 of the SARFAESI Act to that of the power under Section 29 of the State Financial Corporations Act, 1951. It is his submission that it is not as if the power under Section 14 of the SARFAESI Act is revealed to the occupant for the first time when the bank or financial institution try to take possession. While it is true that notice under Section 13(2) of the SARFAESI Act need not be given to an occupier other than the borrower, because it is only a demand based on a contractual obligation between the bank and the borrower, when once the bank resorts to possession notice under Section 13(4) of the SARFAESI Act, which is mandatory before moving the Chief Judicial Magistrate under Section 14 of the SARFAESI Act, the Security Interest (Enforcement) Rules, 2002, especially Rule 8 of the Rules, contemplates affixture of such possession notice on the doors of the property and, therefore, the occupier or tenant or owner cannot plead that unbeknownst to him suddenly an order is obtained under Section 14 of the SARFAESI Act. ", "10.6. It is his submission that by dint of Section 35 of the SARFAESI Act which gives overriding effect based on the basic object of the SARFAESI Act , a tenant cannot claim any superior right than that of the borrower. ", "10.7. It is his submission that even as against the order under Section 14 of the SARFAESI Act an effective alternative remedy is available under Section 17 of the SARFAESI Act by way of an appeal to . He would submit that the judgment of in , AIR 1978 SC 597 is applicable only in respect of punitive action. ", "10.8. He would rely upon the decisions in .), and , to contend that by virtue of the judgment of in upholding the validity of the SARFAESI Act , the principle of constructive res judicata is applicable against the petitioner. ", "10.9. He would insist that the steps taken under Section 14 of the SARFAESI Act are only a measure to enable the secured creditor to enforce his right of possession under Section 13(4) of the SARFAESI Act and, therefore, it is not an order. As long as possession notice under Section 13(4) of the SARFAESI Act cannot be challenged by the petitioner, the petitioner is obviated from challenging the vires of Section 14 of the SARFAESI Act. He would also refer to some of the passages of the judgment of in , . He would also submit that in the latest judgment of in , , has clearly held that even against the order under Section 14 of the SARFAESI Act there is an effective appeal and, therefore, it can never be said that the order passed under Section 14 of the SARFAESI Act is final. ", "11. Mr., learned Senior Counsel even though appears for the 1st respondent/bank in W.P.Nos.30184 of 2011 and 104 and 105 of 2012, which are relating to the validity of the orders passed by the Chief Judicial Magistrates under Section 14 of the SARFAESI Act, has also made submissions in support of the validity of Section 14 of the SARFAESI Act, apart from supporting the individual orders passed by the Chief Judicial Magistrates concerned under Section 14 of the SARFAESI Act. Mr., learned Standing Counsel appearing for adopted the arguments advanced by , learned counsel for the second respondent/bank. ", "12. We have heard the respective counsel and given our anxious thought to the issue involved in the above said writ petition challenging the vires of Section 14 of the SARFAESI Act. ", "13. Before adverting to the rival contentions, since the petitioner has chosen to challenge the validity of Section 14 of the SARFAESI Act, it is necessary to extract the said provision of the SARFAESI Act which is as follows: ", "\" Section 14 . Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset .- ", "(1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him- ", "(a) take possession of such asset and documents relating thereto; and ", "(b) forward such asset and documents to the secured creditor. ", "(2) For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary. ", "(3) No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority.\" ", "14. The SARFAESI Act has been enacted with an object of regulating securitisation and reconstruction of financial assets and enforcement of security interest empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the . The SARFAESI Act , as it stood originally in the year 2002, enacted by replacing the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 provides for legal provisions for facilitating securitisation of financial assets of the banks and financial institutions. In fact, the Law-makers having realised that the then existing methods for recovery as provided under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act 51 of 1993) have not provided for such method of recovery without resorting to court proceedings, has enacted the SARFAESI Act in addition to the said Act 51 of 1993 stated above, even though the SARFAESI Act has been given an overriding effect. ", "15. While Section 35 of the SARFAESI Act, which is as follows: ", "\" Section 35 . The provisions of this Act to override other laws.- The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.\", gives overriding effect to the SARFAESI Act notwithstanding anything inconsistent contained in any other law, under Section 37 of the SARFAESI Act, which is as follows: ", "\" Section 37 . Application of other laws not barred.- The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act , 1956 , the Securities Contracts (Regulation) Act , 1956 , the Securities and Exchange Board of India Act , 1992 , the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or any other law for the time being in force.\", among many other Acts, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act 51 of 1993) or any other law for the time being in force is made applicable in addition to the SARFAESI Act . ", "16. When the vires of the SARFAESI Act was challenged, in , has upheld the validity of the SARFAESI Act , except Section 17(2) of the SARFAESI Act which required depositing of 75% of the amount claimed before entertaining an appeal under Section 17 of the SARFAESI Act, and the operative portion of the said decision is as follows: ", "\"82. We, therefore, subject to what is provided in para 80 above, uphold the validity of the Act and its provisions except that of sub-section (2) of Section 17 of the Act, which is declared ultra vires Article 14 of the Constitution of India.\" ", "It is no doubt true that in the said case the main questions that arose for consideration before , as framed by , are as follows: ", "\"(i) Whether it is open to challenge the statute on the ground that it was not necessary to enact it in the prevailing background particularly when another statute was already in operation? ", "(ii) Whether provisions as contained under Sections 13 and 17 of the Act provide adequate and efficacious mechanism to consider and decide the objections/disputes raised by a borrower against the recovery, particularly in view of bar to approach the civil court under Section 34 of the Act? ", "(iii) Whether the remedy available under Section 17 of the Act is illusory for the reason it is available only after the action is taken under Section 13(4) of the Act and the appeal would be entertainable only on deposit of 75% of the claim raised in the notice of demand? ", "(iv) Whether the terms or existing rights under the contract entered into by two private parties could be amended by the provisions of law providing certain powers in a one-sided manner in favour of one of the parties to the contract? ", "(v) Whether provision for sale of the properties without intervention of the court under Section 13 of the Act is akin to the English mortgage and its effect on the scope of the bar of the jurisdiction of the civil court? ", "(vi) Whether the provisions under Sections 13 and 17(2) of the Act are unconstitutional on the basis of the parameters laid down in different decisions of this Court? ", "(vii) Whether the principle of lender's liability has been absolutely ignored while enacting the Act and its effect?\" ", "Therefore, it is true that the validity or otherwise of Section 14 of the SARFAESI Act was not specifically the subject matter of consideration, even though the entire SARFAESI Act was challenged. while holding that the SARFAESI Act is intra vires except Section 17(2) , as stated above, has clarified that while deciding about classification of an account as a non performing asset, any disputes regarding the same should be resolved by internal mechanism, suggesting certain safeguards for the borrowers before making such classification. It was also held that as against the measure of taking possession by issuing notice under Section 13(4) of the SARFAESI Act, the affected person has a right of appeal under Section 17 of the SARFAESI Act to . ", "17. Ergo, it is clear that while the bank or financial institution resorts to take possession and enforce the security by sale, it has to first classify the account of the borrower as a non performing asset depending upon various internal mechanism, including the resolution of dispute as contemplated under Section 11 of the SARFAESI Act either by conciliation or arbitration, as provided under the Arbitration and Conciliation Act , 1996, apart from the directions of which is empowered under Section 12 of the SARFAESI Act to determine policy and issue directions. ", "18. The SARFAESI Act also provides for assets reconstruction by constituting securitisation company and reconstruction company registered under the Companies Act . The word \"securitisation\", as defined under Section 2(z) of the SARFAESI Act, is as follows: ", "\" Section 2(z) \"securitisation\" means acquisition of financial assets by any securitisation company or reconstruction company from any originator, whether by raising of funds by such securitisation company or reconstruction company from qualified institutional buyers by issue of security receipts representing undivided interest in such financial assets or otherwise\" ", "and the word \"originator\" used in the definition of securitisation means the owner of a financial asset which is acquired by a securitisation company and Section 2(r) of the SARFAESI Act, which defines the word \"originator\", is as follows: ", "\" Section 2(r) \"originator\" means the owner of a financial asset which is acquired by a securitisation company or reconstruction company for the purpose of securitisation or asset reconstruction\" ", "19. The securitisation company or reconstruction company is to act as an agent for any bank or financial institution for making recovery of dues from the borrower on payment of charges or fees as mutually agreed upon to act as a manager for the purpose of effecting possession under Section 13(4)(c) of the SARFAESI Act or to act as a receiver appointed by any or as contemplated under Section 10 of the SARFAESI Act. ", "20. Sections 13 to 19 of the SARFAESI Act, which are in Chapter III, relate to the enforcement of security interest by the bank or financial institution. Section 13(1) of the SARFAESI Act clearly shows that the power conferred under the said provision is notwithstanding the powers under Section 69 or 69- A of the Transfer of Property Act , 1882. Therefore, when the bank or financial institution resorts to proceed to enforce the security interest against the borrower, the first step taken by the bank after classifying the due as a non performing asset is requiring the borrower by a notice in writing to discharge in full his liabilities by giving sixty days time from the date of issuance of notice, stating that in case of default the bank is entitled to take recourse to Section 13(4) of the SARFAESI Act. It is relevant to note that under Section 13(2) of the SARFAESI Act, which is as follows: ", "\" Section 13(2) . Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).\", the obligation of the bank or financial institution to give such notice is to the \"borrower\". ", "21. By virtue of an amendment which was inserted to the SARFAESI Act under Act 30 of 2004 with effect from 11.11.2004, a new sub-section was introduced as sub- section 3-A to Section 13 of the Act, which is as follows: ", "\" Section 13 (3-A). If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower: ", "PROVIDED that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to under section 17 or under section 17-A .\", which enables the borrower on receipt of notice under Section 13(2) of the SARFAESI Act to give his representation or objection, which shall be considered by the bank and the decision of the bank as to the acceptability or tenability of such representation or objection shall be communicated to the borrower within one week of receipt of such representation or objection. At the same time, the said newly introduced provision specifically states that as against such decision taken on the representation, no appeal shall be filed under Section 17 or Section 17-A of the SARFAESI Act. ", "22. In case the borrower after receiving the notice under Section 13(2) of the SARFAESI Act fails to make payment, or, as stated above, after the amendment if the bank or financial institution rejects the representation as not acceptable or tenable, by virtue of the power under Section 13(4) of the Act, which is as follows: ", "\" Section 13(4) . In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:- ", "(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; ", "(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset: ", "PROVIDED that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: ", "PROVIDED FURTHER that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt. ", "(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; ", "(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.\", the bank or financial institution can resort to the measures to recover the secured debt either by taking possession of the secured assets of the borrower or by taking over the management of the business of the borrower, in which case the bank is entitled to appoint a manager, as stated therein, and in cases where the secured asset is an immovable property, the possession notice has to be affixed on the outer door or at a conspicuous place of the property as per Rule 8(1) of the Security Interest (Enforcement) Rules, 2002, which is as follows: ", "\"Rule 8. Sale of immovable secured assets. ", "(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix-IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.\" ", "23. There are various other sub-sections under Section 13 of the SARFAESI Act from Section 13(5) to Section 13(13) which are in effect to facilitate the taking of possession under Section 13(4) of the Act, which includes that when a transfer is made by virtue of the power under Section 13(4) of the SARFAESI Act by the secured creditor, the entire right shall vest with the transferee in respect of the secured asset. It also states under Section 13(13) of the SARFAESI Act that after the borrower receives a notice under Section 13(2) of the SARFAESI Act, no transfer or sale, etc. shall be effected without the prior written consent of the secured creditor. It is as against the measure taken under Section 13(4) of the SARFAESI Act, as stated above, has held in case, supra, that an appeal lies to under Section 17 of the Act. ", "24. Section 31 of the SARFAESI Act specifically excludes certain cases from the application of the SARFAESI Act , which are in effect restrictions imposed on the powers of the bank or financial institution in enforcing the security interest. ", "25. After taking possession under Section 13(4) of the SARFAESI Act, as stated above, if the bank is able to successfully take possession itself without any hindrance or obstruction, it is not necessary for the bank or financial institution to invoke Section 14 of the SARFAESI Act and straightaway it can proceed with the sale of the secured assets. But in cases where taking possession of the secured assets by the secured creditor requires certain assistance, the secured creditor is entitled to apply by way of a request in writing to the Chief Metropolitan Magistrate or District Magistrate, who, by passing an order, is entitled to assist the secured creditor in taking possession of the secured assets. Therefore, while reading Section 14(1) of the Act, extracted above, there is no difficulty to conclude that the power of the bank or financial institution to resort to the said provision is only in continuation and after taking possession as per the process enumerated under Section 13(4) of the SARFAESI Act. Ergo, it cannot be said that straightaway the secured creditor can approach the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act. ", "26. A reading of Section 14 of the SARFAESI Act also makes it very clear that even though such assistance can be rendered by the Chief Metropolitan Magistrate or District Magistrate, such assistance is only by way of an order. Therefore, it is clear that before passing any order of assistance, the Chief Metropolitan Magistrate or District Magistrate has to be satisfied as to whether the bank has followed the provisions of the SARFAESI Act , namely the sequence of classifying the asset as non performing asset; issuing notice under Section 13(2) of the SARFAESI Act giving the required time to the borrower; and thereafter issuing a notice of possession under Section 13(4) of the SARFAESI Act. If the Chief Metropolitan Magistrate or District Magistrate is not satisfied as to the following of the procedure, certainly the Chief Metropolitan Magistrate or District Magistrate can reject such request, in which event, it will be for the secured creditor to follow the procedure as contemplated under the SARFAESI Act . In cases where the Chief Metropolitan Magistrate or District Magistrate is satisfied about the procedure having been followed by the secured creditor, but is of the view that certain more steps are to be taken for the purpose of taking possession by using force, the Chief Metropolitan Magistrate or District Magistrate passes further order directing the police authorities to use necessary force. As Section 14 of the SARFAESI Act, on the face of it, does not contemplate notice to any person before passing such order of assistance, it is naturally left to the discretion of the Chief Metropolitan Magistrate or District Magistrate to decide the nature of force to be used. Moreover, it is also clear that Section 14 of the SARFAESI Act is not independent and it hinges upon the measures taken by the secured creditor under Section 13(4) of the SARFAESI Act. It is true that no guidelines are contemplated to the Chief Metropolitan Magistrate or District Magistrate as to the nature of force to be used in his opinion. ", "27. In the judgment in case, supra, has taken note of the fact that the measures contemplated under the SARFAESI Act are no doubt stringent and held that it is the duty of the secured creditor to consider the representation of the borrower. was also cognizant of the fact that regarding the workable nature of some of the provisions of the SARFAESI Act there may be doubts, but nevertheless held that such difficulties are insufficient to hold the statute invalid or unconstitutional and observed that in any particular factual situation, if any difficulty arises, the same may be considered. It is relevant to extract paragraphs 77 to 82 of the said judgment, which are as follows: ", "\"77. It is also true that till the stage of making of the demand and notice under Section 13(2) of the Act, no hearing can be claimed for by the borrower. But looking to the stringent nature of measures to be taken without intervention of court with a bar to approach the court or any other forum at that stage, it becomes only reasonable that the secured creditor must bear in mind the say of the borrower before such a process of recovery is initiated so as to demonstrate that the reply of the borrower to the notice under Section 13(2) of the Act has been considered applying mind to it. The reasons, howsoever brief they may be, for not accepting the objections, if raised in the reply, must be communicated to the borrower. True, presumption is in favour of validity of an enactment and a legislation may not be declared unconstitutional lightly more so, in the matters relating to fiscal and economic policies resorted to in the public interest, but while resorting to such legislation it would be necessary to see that the persons aggrieved get a fair deal at the hands of those who have been vested with the powers to enforce drastic steps to make recovery. ", "78. It was sought to be argued that fairness cannot be a one-way street. The plea of absence of natural justice lies ill in the mouth of chronic defaulters who have not paid the principal amounts admittedly due to the banks. The said argument presupposes admission of the liability by the borrowers and all of them to be chronic defaulters. It would only be prejudging an issue. We hope it was not meant to be said that all those who defaulted according to the banks and financial institutions must be condemned unheard who might not deserve any hearing to place their side of the case, unless they must go through the crushing preconditions of deposit of 75% of the amount demanded over and above their secured assets already having been taken possession of. We feel this can well be one example of hitting below the belt. ", "79. Some submissions have been made pointing out that in certain circumstances it would not be clear as to in what manner the provisions of the Act would be workable. We feel the objections pointed out are not such which render the statute invalid or unconstitutional. Such problems about working of any particular provision of the Act in any particular factual situation, may be considered as and when they may arise. We, therefore, do not think it necessary to go into those questions. ", "80. Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13(4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach . The abovenoted provisions are for the purpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows: ", "1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under sub-section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach under Section 17 of the Act, at that stage. ", "2. As already discussed earlier, on measures having been taken under sub-section (4) of Section 13 and before the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under Section 17 of the Act before . ", "3. That the in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose. ", "4. In view of the discussion already held in this behalf, we find that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive, onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down. ", "5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court. ", "81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before . The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of the economy of the country and welfare of the people in general which would subserve the public interest. ", "82. We, therefore, subject to what is provided in para 80 above, uphold the validity of the Act and its provisions except that of sub-section (2) of Section 17 of the Act, which is declared ultra vires Article 14 of the Constitution of India.\" ", "In such circumstances, the contention made by Mr., learned counsel for the petitioner that has not specifically considered the validity of Section 14 of the SARFAESI Act and, therefore, there is no bar for this Court to consider the same, in our considered opinion, is not tenable. ", "28. By authorizing a judicial authority in the rank of the Chief Metropolitan Magistrate or District Magistrate to do the administrative work of providing assistance to the secured creditor, it appears to be not necessary to consider the claim or case of a party likely to be affected by applying the principles of natural justice, which certainly is monstrous, especially in the light of the judgment of in , AIR 1978 SC 597, wherein has held that even in cases where the statute does not explicitly provide for the following of the principles of natural justice, following the same is implied, in the following terms: ", "\"32. It is well established that even where there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the rights of that individual, the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action. This principle was laid down by this Court in the (AIR 1967 SC 1269) in the following words: ", "\u0013The rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applies alike to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the or its officers. Duty to act judicially would, therefore arise from the very nature of the function intended to be performed: it need not be shown to be super-added. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is made, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case.\u0014 In the said judgment, the principle of arbitrariness was held to be sworn enemy to the concept of equality enshrined under Article 14 of the Constitution of India, apart from the principles of natural justice, in the following paragraphs: ", "\"56. Now, the question immediately arises as to what is the requirement of Article 14 : what is the content and reach of the great equalising principle enunciated in this article? There can be no doubt that it is a founding faith of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits. We must reiterate here what was pointed out by the majority in (AIR 1974 SC 555) namely, that \u0013from a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic, while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14 \u0014. Article 14 strikes at arbitrariness in action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14. It must be \u0013right and just and fair\u0014 and not arbitrary, fanciful or oppressive; otherwise, it would be no procedure at all and the requirement of Article 21 would not be satisfied. ", "How far natural justice is an essential element of procedure established by law .... ", "58. We may commence the discussion of this question with a few general observations to emphasise the increasing importance of natural justice in the field of administrative law. Natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the years it has grown into a widely pervasive rule affecting large areas of administrative action. Lord of spoke of this rule in eloquent terms in his address before : ", "\u0013We can, I think, take pride in what has been done in recent periods and particularly in the field of administrative law by invoking and by applying these principles which we broadly classify under the designation of natural justice. Many testing problems as to their application yet re-remain to be solved. But I affirm that the area of administrative action is but one area in which the principles are to be deployed. Nor are they to be invoked only when procedural failures are shown. Does natural justice qualify to be described as a \u0011majestic\u0012 conception? I believe it does. Is it just a rhetorical but vague phrase which can be employed, when needed, to give a gloss of assurance? I believe that it is very much more. If it can be summarised as being fair-play in action \u0017 who could wish that it would ever be out of action? It denotes that the law is not only to be guided by reason and by logic but that its purpose will not be fulfilled; it lacks more exalted inspiration. (Current Legal Problems, 1973 Vol.26 p.16). \u0014 And then again, in his speech in in , 1971 AC 297 the learned Law Lord said in words of inspired felicity: ", "\u0013... that the conception of natural justice should at all stages guide those who discharge judicial functions is not merely an acceptable but is an essential part of the philosophy of the law. We often speak of the rules of natural justice. But there is nothing rigid or mechanical about them. What they comprehend has been analysed and described in many authorities. But any analysis must bring into relief rather their spirit and their inspiration than any precision of definition or precision as to application. We do not search for prescriptions which will lay down exactly what must, in various divergent situations, be done. The principles and procedures are to be applied which, in any particular situation or set of circumstances, are right and just and fair. Natural justice, it has been said, is only \u0011fair play in action\u0012. Nor do we wait for directions from . The common law has abundant riches : there may we find what , J., called \u0011the justice of the common law\u0012 \u0014. ", "Thus, the soul of natural justice is \u0013fair-play in action\u0014 and that is why it has received the widest recognition throughout the democratic world. In the United States, the right to an administrative hearing is regarded as essential requirement of fundamental fairness. And in England too it has been held that \u0013fair-play in action\u0014 demands that before any prejudicial or adverse action is taken against a person, he must be given an opportunity to be heard. The rule was stated by Lord , MR in these terms in v. Secretary of State or Home Affairs (1969) 2 Ch.D. 149 \u0017 \u0013where a public officer has power to deprive a person of his liberty or his property, the general principle is that it has not to be done without his being given an opportunity of being heard and of making representations on his own behalf\u0014. The same rule also prevails in other Commonwealth countries like Canada, Australia and New Zealand. It has even gained access to (vide American Journal of International Law, Vol. 67, p. 479). , J., describes natural justice \u0013as a distillate of due process of law\u0014 (vide v. (1968) 112 Sol Gen 690. It is the quintessence of the process of justice inspired and guided by \u0013fair-play in action\u0014. If we look at the speeches of the various Law Lords in case it will be seen that each one of them asked the question \u0013whether in the particular circumstances of the case, the acted unfairly so that it could be said that their procedure did not match with what justice demanded\u0014, or, was the procedure adopted by the \u0013in all the circumstances unfair?\u0014 The test adopted by every Law Lord was whether the procedure followed was fair in all the circumstances and \u0013fair-play in action\u0014 required that an opportunity should be given to the taxpayer \u0013to see and reply to the counter-statement of the Commissioners\u0014 before reaching the conclusion that \u0013there is a prima facie case against him\u0014. The inquiry must, therefore, always be: does fairness in action demand that an opportunity to be heard should be given to the person affected?\" ", " has also held that in applying the principles of natural justice there is no distinction between a quasi judicial function and administrative function in the following words: ", "\"59. Now, if this be the test of applicability of the doctrine of natural justice, there can be no distinction between a quasi-judicial function and an administrative function for this purpose. The aim of both administrative inquiry as well as quasi-judicial inquiry is to arrive at a just decision and if a rule of natural justice is calculated to secure justice, or to put it negatively, to prevent miscarriage of justice, it is difficult to see why it should be applicable to quasi-judicial inquiry and not to administrative inquiry.\" ", "29. The said view has been reiterated by in its latest judgment in , , wherein it was held as under: ", "\"29. It is a settled legal proposition that Article 14 of the Constitution strikes at arbitrariness because an action that is arbitrary, must necessarily involve negation of equality. This doctrine of arbitrariness is not restricted only to executive actions, but also applies to the legislature. Thus, a party has to satisfy that the action was reasonable, not done in unreasonable manner or capriciously or at pleasure without adequate determining principle, rational, and has been done according to reason or judgment, and certainly does not depend on the will alone. However, the action of the legislature, violative of Article 14 of the Constitution, should ordinarily be manifestly arbitrary. There must be a case of substantive unreasonableness in the statute itself for declaring the act ultra vires Article 14 of the Constitution. [ , , , , , , ., and State of T.N. v. , .] ", "30. , AIR 1968 SC 1379, this Court examined the case as to whether the list of backward classes, for the purpose of Article 15(4) of the Constitution has been prepared properly, and after examining the material on record came to the conclusion that there was nothing on record to show that the Government had followed the criteria laid down by this Court while preparing the list of Other Backward Classes. The Court observed as under: (AIR p.1384-85, para 9) \u00139. \u0005 Honesty of purpose of those who prepared and published the list was not and is not challenged, but the validity of a law which apparently infringes the fundamental rights of citizens cannot be upheld merely because the lawmaker was satisfied that what he did was right or that he believes that he acted in manner consistent with the constitutional guarantees of the citizen. The test of the validity of a law alleged to infringe the fundamental rights of a citizen or any act done in execution of that law lies not in the belief of the maker of the law or of the person executing the law, but in the demonstration by evidence and argument before the courts that the guaranteed right is not infringed.\u0014 ", "31. In (2) v. , (2000) 1 SCC 168, while considering a similar issue regarding preparing a list of creamy layer OBCs, this Court held that legislative declarations on facts are not beyond judicial scrutiny in the constitutional context of Articles 14 and 16 of the Constitution, for the reason that a conclusive declaration could not be permissible so as to defeat a fundamental right.\" ", "30. A Constitution Bench of presided over by the Hon'ble Chief Justice of India in , has analyzed the entire concept of Rule of Law in the context of the constitutional provisions, especially with reference to Articles 14 and 19(1)(g) of the Constitution of India. While holding that the principle of rule of law is the basic structure, it was asserted that violation of principles of natural justice may debilitate the rule of law, in the following words: ", "\"217. The rule of law as a principle contains no explicit substantive component like eminent domain but has many shades and colours. Violation of principle of natural justice may undermine the rule of law resulting in arbitrariness, unreasonableness, etc., but such violations may not undermine the rule of law so as to invalidate a statute. Violation must be of such a serious nature which undermines the very basic structure of our Constitution and our democratic principles. But once the court finds, a statute undermines the rule of law which has the status of a constitutional principle like the basic structure, the above grounds are also available and not vice versa. Any law which, in the opinion of the court, is not just, fair and reasonable, is not a ground to strike down a statute because such an approach would always be subjective, not the will of the people, because there is always a presumption of constitutionality for a statute.\" ", "In fact, in the said judgment, declared loudly to the world about the existence of rule of law in this country as follows: ", "\"219. One of the fundamental principles of a democratic society inherent in all the provisions of the Constitution is that any interference with the peaceful enjoyment of possession should be lawful. Let the message, therefore, be loud and clear, that the rule of law exists in this country even when we interpret a statute, which has the blessings of Article 300-A.\" ", "31. It is no doubt true that by applying the above said celebrated concept, which has been throughout well established by judicial precedents in this country, the consequences of an order passed by the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act, especially relating to the force to be used for the purpose of taking possession under Section 14(2) of the SARFAESI Act without giving opportunity to the person who is in occupation, is ostensibly draconian. But, in the light of the decision of in case, supra, upholding the validity of the SARFAESI Act , in our view, it is not for this Court to reexamine one of the provisions of the SARFAESI Act . Needless to state that it is for in appropriate case to decide about the said situation or for the law-makers to take appropriate action. ", "32. The above said observation had to be made in the context of some of the events like cases where the possession of the secured asset is in the hands of a bona fide tenant, who was inducted by the borrower long before either the borrowal of the amount by the landlord or any action taken by the bank under the provisions of the SARFAESI Act . In such unfortunate event, since the tenant in occupation is not entitled to know about the classification of the dues as non performing asset, or a notice under Section 13(2) of the Act, apart from possession notice under Section 13(4) of the Act, certainly he may be in the dark about the entire event, except for the first time when the secured creditor approaches the tenant in occupation with the help of an order passed by Chief Metropolitan Magistrate or District Magistrate under Section 14(2) of the SARFAESI Act to use force to throw him away. ", "33. Even if an appeal can be filed by such a tenant to under Section 17 of the SARFAESI Act, which uses the words \"any person\", the jurisdiction of is restricted to find out as to whether the provisions of the SARFAESI Act have been followed scrupulously or not and there is no provision for to decide as to whether the occupant, being a bona fide tenant, is liable to be removed from the place for the purpose of securing the secured asset by the secured creditor. Even assuming such power is available to to put such tenant back to possession, the fact remains that damage has been done to an innocent person with the aid of law unbeknownst to him. It is equally true that there may be unscrupulous landlords/borrowers who have inducted any person as a tenant by creating unregistered lease deeds. There is also possibility for certain unscrupulous landlords to take advantage of the draconian provision of Section 14 of the SARFAESI Act in order to take possession from a tenant, who is entitled to protection under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, by borrowing an amount from a bank of financial institution; wantonly committing default; and thereby obtaining an order through the secured creditor under Section 14 of the SARFAESI Act to throw away the bona fide tenant. ", "34. In this regard, it is relevant to refer to another latest judgment of in , , wherein has held that it is not only against the possession notice under Section 13(4) of the SARFAESI Act but also against the order passed under Section 14 of the SARFAESI Act an application can be filed under 17(1) of the SARFAESI Act . Strongly denouncing the conduct of in interfering under Article 226 of the Constitution of India with an order passed under Sections 13(4) and 14 of the SARFAESI Act, has observed as follows: ", "\"42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14 , then she could have availed remedy by filing an application under Section 17(1) . The expression \u0013any person\u0014 used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14 . Both, the and the Appellate are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. ", "43. Unfortunately, overlooked the settled law that will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. must keep in mind that the legislations enacted by and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.\" ", "Therefore, it is clear that even against an order of possession taken through the administrative fiat from the Chief Metropolitan Magistrate or District Magistrate an application under Section 17 of the SARFAESI Act can be filed by any person affected, which includes a tenant in lawful occupation, to . ", "35. It is no doubt true, as contended by the learned counsel for the petitioner, that a judgment, as is well known, is the authority for the proposition which it decides and not what can logically be deduced therefrom, as it was held by in , , from which paragraph (9) was quoted with approval in the latest judgment of in , as follows: ", "\"18. A judgment, as is well known, is the authority for the proposition which it decides and not what can logically be deduced therefrom. This Court in , has observed: ", "'9. \u0005 The courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of the courts are neither to be read as 's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of the courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.'\" ", "36. It was in ., , by referring to an earlier judgment in , (1989) 1 SC 101, has held that when a point does not fall for decision but incidentally arises for consideration, it does not form part of the ratio of the case and the same is to be treated as a decision passed in sub silentio. by referring to case, supra, also considered the text from on Jurisprudence explaining the concept of sub silentio as follows: ", "\"42. It has been held in the decision of this Court in , that when a point does not fall for decision of a court but incidentally arises for its consideration and is not necessary to be decided for the ultimate decision of the case, such a decision does not form a part of the ratio of the case but the same is treated as a decision passed sub silentio. ", "43. The concept of \u0013sub silentio\u0014 has been explained by on Jurisprudence, 12th Edn. as follows: ( case, SCC pp. 110-11, para 11) \u001311. \u0005\u0011A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the or present to its mind. The may consciously decide in favour of one party because of Point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided Point B in his favour; but Point B was not argued or considered by the . In such circumstances, although Point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on Point B. Point B is said to pass sub silentio.\u0012 \u0014 ", "44. The aforesaid passage has been quoted with approval by the three-Judge Bench in . This in , in order to illustrate the aforesaid proposition further relied on the decision of in v. of Paris Ltd., (1936) 2 All ER 905 (CA). In , the only point argued was on the question of priority of the claimant\u0012s debt. The found that no consideration was given to the question whether a garnishee order could be passed. Therefore, a point in respect of which no argument was advanced and no citation of authority was made is not binding and would not be followed. This held that such decisions, which are treated having been passed sub silentio and without argument, are of no moment. The further explained the position by saying that one of the chief reasons behind the doctrine of precedent is that once a matter is fully argued and decided the same should not be reopened and mere casual expressions carry no weight.\" ", "37. But when has considered the validity of the SARFAESI Act as a whole, even though no express opinion has been made by about Section 14 of the SARFAESI Act, and the vires of the SARFAESI Act has been upheld, in the guise of applying the principle of sub silentio it is not possible for this to go into the validity of Section 14 of the SARFAESI Act. As stated by on Jurisprudence, elicited above, may be in cases where a point of law involved in the decision is not perceived by the and the while deciding a particular point has made a reference about another point, the principle of sub silentio may be made applicable in respect of another point relating to which a reference has been made. But in the case on hand, when the SARFAESI Act as a whole has been upheld, in our view, the principle of sub silentio may not be of much use to the petitioner while challenging the provision of the SARFAESI Act . But at the same time, we are of the view that when once greater power has been conferred on the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the Act, the same has to be exercised by the Chief Metropolitan Magistrate or District Magistrate with greater care and onerous responsibility. ", "38. Even though it is true that it is only after exercise of its power under Section 13(4) of the SARFAESI Act by giving notice of possession by the bank or financial institution, such secured creditor can proceed under Section 14 of the SARFAESI Act only in cases where it is necessary to obtain such assistance from the Chief Metropolitan Magistrate or District Magistrate, in our view, before exercising such power under Section 14 of the SARFAESI Act, which obviously does not require any notice to anyone, the authority must cogitate on and analyze the following aspects: ", "(i)that even after giving notice under Section 13(4) of the SARFAESI Act, the secured creditor requires assistance from the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act; ", "(ii)that while classifying the due as non performing asset, the bank or financial institution has followed the procedure contemplated under the SARFAESI Act ; ", "(iii)that notice under Section 13(2) of the SARFAESI Act was, in fact, given to the borrower in accordance with the Rules, including paper publication, affixture, etc., by giving him sixty days time as contemplated therein and such notice has been received by the borrower and it contains the details of the amount payable by the borrower, etc.; ", "(iv)that in case any representation has been made by the borrower under Section 13 (3- A) of the SARFAESI Act , the secured creditor \u0016 bank or financial institution has replied within one week; ", "(v)that notice of possession under Section 13(4) of the SARFAESI Act has been given; and ", "(vi)that in cases where the borrower or guarantor is not in possession of the secured asset, whether the bank or financial institution has scrupulously followed Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 in affixing the possession notice and if necessary, direct the bank or financial institution to inform about the affixture of possession notice under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 to the tenant in occupation and also in that event direct the bank or financial institution to give such tenant sufficient time to file appeal under Section 17 of the SARFAESI Act to , and thereafter the Chief Metropolitan Magistrate or District Magistrate should pass appropriate orders and such order shall contain laconically the above said considerations to evince that there has been an application of mind by the authority. This is necessary as has held that even against the possession notice under Section 13(4) and order under Section 14 of the SARFAESI Act, a person aggrieved can approach under Section 17 of the SARFAESI Act. A consideration of the above said aspects will be helpful to prevent a bona fide tenant, who has been in occupation for a long time, from being thrown out arbitrarily without his knowledge due to the default committed by the borrower, who happens to be a landlord. It behooves us to lay down the above said exhaustive guidelines as an extraordinary power has been conferred on the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act, of course in order to achieve the main goal of the SARFAESI Act itself, as stated above. ", "39. By referring to the real power of the , the Supreme has held that the responsibility of the in passing orders must be more when greater powers are given. That was in , . In paragraph (15) of the said judgment, it was held as follows: ", "\"15. This Court has repeatedly noticed that the real power of courts is not in passing decrees and orders, nor in punishing offenders and contemnors, nor in summoning the presence of senior officers, but in the trust, faith and confidence of the common man in the judiciary. Such trust and confidence should not be frittered away by unnecessary and unwarranted show or exercise of power. Greater the power, greater should be the responsibility in exercising such power.\" ", "40. The nature of care to be taken as suggested by us, in our view, is in consonance with the concept of a Welfare State, apart from the principle of rule of law enunciated above. In addition to the enforcement of the object of the SARFAESI Act , the Chief Metropolitan Magistrate or District Magistrate has to necessarily be guided by the consideration of doing justice, even though it is said that while passing order under Section 14 of the SARFAESI Act the Chief Metropolitan Magistrate or District Magistrate is only assisting the bank or financial institution for enforcing the security of the secured asset. ", "41. While rejecting the contention that there is a dichotomy between symbolic possession and physical possession under the SARFAESI Act , has held that there is no distinction under the SARFAESI Act and has taken note of the fact that the third party interest are created overnight in order to scuttle the enforcement of the provisions of the SARFAESI Act . It was in , 2006 (5) CTC 753, has made the following observations which are reproduced here-under: ", "\"54. The word possession is a relative concept. It is not an absolute concept. The dichotomy between symbolic and physical possession does not find place in the Act. As stated above, there is a conceptual distinction between securities by which the creditor obtains ownership of or interest in the property concerned (mortgages) and securities where the creditor obtains neither an interest in nor possession of the property but the property is appropriated to the satisfaction of the debt (charges). Basically, the NPA Act deals with the former type of securities under which the secured creditor, namely, the bank/FI obtains interest in the property concerned. It is for this reason that the NPA Act ousts the intervention of the courts/tribunals. ", "55. Keeping the above conceptual aspect in mind, we find that Section 13(4) of the NPA Act proceeds on the basis that the borrower, who is under a liability, has failed to discharge his liability within the period prescribed under Section 13(2) , which enables the secured creditor to take recourse to one of the measures, namely, taking possession of the secured assets including the right to transfer by way of lease, assignment or sale for realising the secured assets. Section 13 (4-A) refers to the word \u0013possession\u0014 simpliciter. There is no dichotomy in sub-section (4-A) as pleaded on behalf of the borrowers. Under Rule 8 of the 2002 Rules, the authorised officer is empowered to take possession by delivering the possession notice prepared as nearly as possible in Appendix IV to the 2002 Rules. That notice is required to be affixed on the property. Rule 8 deals with sale of immovable secured assets. Appendix IV prescribes the form of possession notice. It inter alia states that notice is given to the borrower who has failed to repay the amount informing him and the public that the bank/FI has taken possession of the property under Section 13(4) read with Rule 9 of the 2002 Rules. Rule 9 relates to time of sale, issue of sale certificate and delivery of possession. Rule 9(6) states that on confirmation of sale, if the terms of payment are complied with, the authorised officer shall issue a sale certificate in favour of the purchaser in the form given in Appendix V to the 2002 Rules. Rule 9(9) states that the authorised officer shall deliver the property to the buyer free from all encumbrances known to the secured creditor or not known to the secured creditor. (emphasis supplied) Section 14 of the NPA Act states that where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred, the secured creditor may, for the purpose of taking possession, request in writing to the District Magistrate to take possession thereof. Section 17(1) of the NPA Act refers to the right of appeal. Section 17(3) states that if as an appellate authority after examining the facts and circumstances of the case comes to the conclusion that any of the measures under Section 13(4) taken by the secured creditor are not in accordance with the provisions of the Act, it may by order declare that the recourse taken to any one or more measures is invalid, and consequently, restore possession to the borrower and can also restore management of the business of the borrower. Therefore, the scheme of Section 13(4) read with Section 17(3) shows that if the borrower is dispossessed, not in accordance with the provisions of the Act, then is entitled to put the clock back by restoring the status quo ante. Therefore, it cannot be said that if possession is taken before confirmation of sale, the rights of the borrower to get the dispute adjudicated upon is defeated by the authorised officer taking possession. As stated above, the NPA Act provides for recovery of possession by non-adjudicatory process; therefore, to say that the rights of the borrower would be defeated without adjudication would be erroneous. Rule 8, undoubtedly, refers to sale of immovable secured asset. However, Rule 8(4) indicates that where possession is taken by the authorised officer before issuance of sale certificate under Rule 9, the authorised officer shall take steps for preservation and protection of secured assets till they are sold or otherwise disposed of. Under Section 13(8) , if the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the creditor before the date fixed for sale or transfer, the asset shall not be sold or transferred. The costs, charges and expenses referred to in Section 13(8) will include costs, charges and expenses which the authorised officer incurs for preserving and protecting the secured assets till they are sold or disposed of in terms of Rule 8(4). Thus, Rule 8 deals with the stage anterior to the issuance of sale certificate and delivery of possession under Rule 9. Till the time of issuance of sale certificate, the authorised officer is like a Court Receiver under Order 40 Rule 1 CPC. The Court Receiver can take symbolic possession and in appropriate cases where the Court Receiver finds that a third-party interest is likely to be created overnight, he can take actual possession even prior to the decree. The authorised officer under Rule 8 has greater powers than even a Court Receiver as security interest in the property is already created in favour of the banks/FIs. That interest needs to be protected. Therefore, Rule 8 provides that till issuance of the sale certificate under Rule 9, the authorised officer shall take such steps as he deems fit to preserve the secured asset. It is well settled that third-party interests are created overnight and in very many cases those third parties take up the defence of being a bona fide purchaser for value without notice. It is these types of disputes which are sought to be avoided by Rule 8 read with Rule 9 of the 2002 Rules. In the circumstances, the drawing of dichotomy between symbolic and actual possession does not find place in the scheme of the NPA Act read with the 2002 Rules.\" ", "42. On analyzing the judgment of in Transcore case, supra, of in , 2007 Cri LJ 2544 has given a gist of the said judgment of as follows: ", "\"64. Following is the gist of the relevant portion of the judgment. ", "(a) The DRT Act did not provide for assignment of debts to securitisation companies. The secured assets could not be liquidated in time. The NPA Act was enacted to reduce mounting non-performing assets by empowering banks to liquidate the assets and secured interest. ", "(b) The NPA Act deals with crystallized liabilities. ", "(c) The NPA Act proceeds on the basis that the asset is created in favour of bank which could be assigned to the assets management company which steps into the shoes of the secured creditors. ", "(d) Section 13(2) proceeds on the basis that the borrower is under a liability and his account in the books of account of the bank is classified as sub-standard or doubtful or loss. The NPA Act comes into force only if these two conditions are satisfied. ", "(e) Since Section 13(2) deals with liquidation of liability on the basis that the account of the borrower has become non-performing, there is no scope of any dispute regarding liability. ", "(f) The NPA Act does not deal with disputes between the secured creditors and the borrowers but it deals with the rights of the secured creditors inter se. ", "(g) Section 13(1) and Section 13(2) of the NPA Act proceed on the basis that the security interest in the bank and financial institution needs to be enforced expeditiously without the intervention of the and that enforcement could take place by non- adjudicatory process. The NPA Act provides for recovery of possession by non-adjudicatory process. ", "(h) The NPA Act removes all fetters on the right of the secured creditor. ", "(i) Under Section 17(2) , the is required to consider whether any of the measures referred to in Section 13(4) are in accordance with the provisions of the NPA Act and the Rules made thereunder. ", "(j) If while examining the application under Section 17 , the DRT comes to the conclusion that any of the measures taken under Section 13(4) are not in accordance with NPA Act , it shall direct the secured creditor to restore the possession to the borrower or restore management to the borrower. ", "(k) If the declares that the recourse taken under Section 13(4) is in accordance with the provisions of the NPA Act then notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to anyone or more of the measures as specified under Section 13(4) to recover his secured debt. ", "(l) Section 17(4) shows that the secured creditor is free to take recourse to any one of the measures under Section 13(4) notwithstanding anything contained in any other law for the time being in force, e.g. for the sake of argument if in a given case, the measures undertaken by the secured creditor under Section 13(4) come in conflict with the land revenue law, then notwithstanding such conflict, the provision of Section 13(4) shall override the local law. ", "(m) This position stands clarified by Section 35 of the NPA Act which states that the provisions of the NPA Act shall override all other laws which are inconsistent with the NPA Act . Section 35 gives an overriding effect to the NPA Act over all other laws, if they are in consistent with it. ", "(n) The dichotomy between symbolic and physical possession does not find place in the NPA Act . ", "(o) Rule 8 of the said Rules deals with the sale of immovable secured assets. Rule 8 deals with the stage anterior to the issuance of sale certificate and delivery of possession under Rule 9. Rule 9 relates to time of sale, issue of sale certificate and delivery of possession. Till the time of issuance of sale certificate, the authorised officer is like a court receiver under Order XL, Rule 1 of the CPC. The court receiver can take symbolic possession and in appropriate cases, he can take actual possession even prior to the decree. The authorised officer's powers are greater as security interest is already created in the bank. Hence, under Rule 8, he can take steps to preserve the secured asset till issuance of the sale certificate under Rule 9. Rule 9(6) states that on confirmation of sale, if the terms of payment are complied with, the authorised officer shall issue a sale certificate in favour of the purchaser. Rule 9(9) states that the authorised officer shall deliver the property to the buyer free from all encumbrances known to the secured creditor or not known to the secured creditor. This scheme of the NPA Act therefore does not disclose any dichotomy between symbolic possession and physical possession. ", "(p) Since scheme of Section 13(4) read with Section 17(3) shows that if the borrower is dispossessed not in accordance with the provisions of the NPA Act , the DRT is entitled to restore status quo ante, it cannot be said that if possession is taken before confirmation of sale, the rights of the borrower to get the dispute adjudicated upon is defeated by the authorised officer taking possession. ", "(q) The disputes which are sought to be avoided by Rule 8 read with Rule 9 of the said Rules are those where third party interests are created overnight and in very many cases those third parties take up the defence of being a bonafide purchaser for value without notice.\" ", "In fact, in the said judgment, while holding that the process under Section 14 of the SARFAESI Act is a non adjudicatory process, has held that the remedy under Section 17 of the SARFAESI Act before is available to the third parties also. ", "43. While holding that the secured creditor to enforce his right under Section 13(4) of the SARFAESI Act, in particular Section 13(4)(a) of the SARFAESI Act, may take recourse to Section 14 of the SARFAESI Act, it was held in the latest judgment of in , that it is after resorting to Section 13(4) of the SARFAESI Act, the assistance under Section 14 of the SARFAESI Act arises and against any measure taken under Section 14 of the SARFAESI Act, any person can approach under Section 17(1) of the SARFAESI Act. It is useful to extract the following paragraphs of the said judgment: ", "\"18. Section 14 of the Act provides that the secured creditor can file an application before the Chief Metropolitan Magistrate or the District Magistrate, within whose jurisdiction, the secured asset or other documents relating thereto are found for taking possession thereof. If any such request is made, the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, is obliged to take possession of such asset or document and forward the same to the secured creditor. ( , .) Therefore, it follows that a secured creditor may, in order to enforce his rights under Section 13(4) , in particular Section 13(4)(a) , may take recourse to Section 14 of the Act. ", ".... ", "22. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4) , and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT.\" ", "44. In view of the judgments of commencing from case to case, supra, wherein has analyzed threadbare the various provisions of the SARFAESI Act , we are unable to accept the contention of Mr., learned counsel appearing for the petitioner in W.P.No.950 of 2012 for a declaration that Section 14 of the SARFAESI Act is null and void, except issuing certain guidelines as stated above. ", "45. Accordingly, W.P.No.950 of 2012 stands dismissed and Section 14 of the SARFAESI Act is held valid. However, while exercising the power by way of measure to assist the bank or financial institution to secure the secured assets, the Chief Metropolitan Magistrate or District Magistrate shall follow the following guidelines: ", "(i)that even after giving notice under Section 13(4) of the SARFAESI Act, the secured creditor requires assistance from the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act; ", "(ii)that while classifying the due as non performing asset, the bank or financial institution has followed the procedure contemplated under the SARFAESI Act ; ", "(iii)that a notice under Section 13(2) of the SARFAESI Act was, in fact, given to the borrower in accordance with the Rules, including paper publication, affixture, etc., by giving him sixty days time as contemplated therein and such notice has been received by the borrower and it contains the details of the amount payable by the borrower, etc.; ", "(iv)that in case any representation has been made by the borrower under Section 13 (3- A) of the SARFAESI Act , the secured creditor \u0016 bank or financial institution has replied within one week; ", "(v)that a notice of possession under Section 13(4) of the SARFAESI Act has been given; ", "(vi)that in cases where the borrower or guarantor is not in possession of the secured asset, whether the bank or financial institution has scrupulously followed Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 in affixing the possession notice and if necessary, direct the bank or financial institution to inform about the affixture of possession notice under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 to the tenant in occupation and also in that event direct the bank or financial institution to give such tenant sufficient time to file appeal under Section 17 of the SARFAESI Act to ; and ", "(vii)thereafter pass appropriate orders, which shall contain laconically the above said considerations to evince that there has been an application of mind by the authority. ", "W.P.Nos.30223 and 30184 of 2011, 104 and 105 of 2012 ", "46. Now coming to the individual cases wherein the orders of the Chief Judicial Magistrates are challenged, it is true that as against the measure taken under Section 14 of the SARFAESI Act any person affected can approach under Section 17 of the SARFAESI Act, which states \"any person (including the borrower)\", as it seen in Section 17(1) of the SARFAESI Act, which is as follows: ", "\" Section 17 . Right to appeal.- ", "(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to having jurisdiction in the matter within forty-five days from the date on which such measure had been taken: ", "PROVIDED that different fees may be prescribed for making the application by the borrower and the person other than the borrower. ", "Explanation: For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to under this sub-section.\" ", "47. It is relevant to point out that under Section 14(3) of the SARFAESI Act, an order of the Chief Metropolitan Magistrate or District Magistrate as a measure under Sections 14(1) and 14(2) of the SARFAESI Act has become final and cannot be questioned in any court of law or before any authority. Of course, it is because of that provision has clarified that an appeal lies to against the order passed under Section 14 of the SARFAESI Act. But at the same time, when the Chief Metropolitan Magistrate or District Magistrate while considering such request from the secured creditor, failed to follow the provisions of the SARFAESI Act and exercised his discretion in an improper manner, or in cases where the Chief Metropolitan Magistrate or District Magistrate simply as an administrative authority without application of mind merely on the request of the secured creditor passes an order appointing an Advocate Commissioner to take possession with the help of police without considering anything about the fulfillment of the requirements under the SARFAESI Act , it cannot be said that this Court cannot entertain a writ petition under Article 226 of the Constitution of India, especially when gross injustice is sought to be done by such measure taken by the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act. This is because it can be construed that under Section 17 of the SARFAESI Act, even while considering the appeal of any person other than the borrower has to only examine as to whether notice under Section 13(2) of the SARFAESI Act has been given, followed by the possession notice under Section 13(4) of the Act. By referring to Section 17 of the Act, which is as follows: ", "\" Section 17 . Right to appeal (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application alongwith such fee, as may be prescribed to having jurisdiction in the matter within forty-five days from the date on which such measure had been taken: ", "PROVIDED that different fees may be prescribed for making the application by the borrower and the person other than the borrower. ", "Explanation: For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to under this sub-section. ", "(2) shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. ", "(3) If, , after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13 , taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the business to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditors as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13 . ", "(4) If, declares the recourse taken by a secured creditor under sub-section (4) of section 13 , is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt. ", "(5) Any application made under sub-section (1) shall be dealt with by as expeditiously as possible and disposed of within sixty days from the date of such application: ", "PROVIDED that may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with , shall not exceed four months from the date of making of such application made under sub-section (1). ", "(6) If the application is not disposed of by within the period of four months as specified in sub-section (5), any part to the application may make an application, in such form as may be prescribed, to for directing for expeditious disposal of the application pending before and may, on such application, make an order for expeditious disposal of the pending application by . ", "(7) Save as otherwise provided in this Act, shall, as far as may be, dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the rules made thereunder.\", one can certainly come to a conclusion that the power of under Section 17 of the SARFAESI Act even though it enables any person affected by an order under Section 13(4) or consequently under Section 14 of the SARFAESI Act to approach it, is restricted to the confirmation to the provisions of the SARFAESI Act alone. ", "48. Ergo, in cases where a bona fide tenant is sought to be evicted either by the steps taken under Section 13(4) of the SARFAESI Act by the secured creditor or by the order of assistance passed by the Chief Metropolitan Magistrate or District Magistrate under Section 14 of the SARFAESI Act at the instance of the secured creditor, it is highly doubtful as to whether can go into the question as to whether the third party tenant is a bona fide tenant or not, since is not expected to follow the elaborate procedure of and is expected to proceed on summary basis taking into consideration the object of the SARFAESI Act . Therefore, in such cases, in order to render substantial justice, we are of the view that there is no bar for this Court to entertain a writ petition under Article 226 of the Constitution of India. But insofar as it relates to the borrower or guarantor, as against the steps taken by the secured creditor under Sections 13(4) and 14 of the SARFAESI Act, Section 17 of the SARFAESI Act provides an effective alternative remedy and in such cases, it is not possible for this Court to entertain a writ petition. ", "49. While construing about the right of a bona fide tenant in occupation under a borrower and taking note of the fact that such tenant has got a statutory protection under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 and also in other cases under Section 106 of the Transfer of Property Act, 1882, in the light of the summary powers provided to the secured creditor under the SARFAESI Act , a Division Bench of this Court in , 2011 (2) CTC 474, after analyzing the constitutional provisions regarding the source of power under both the Acts and finding that the SARFAESI Act has been enacted by the by virtue of the power under List I of Schedule VII, while the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 was enacted by under Entry 6 of List III (Concurrent List) of Schedule VII, and that the tenant can be evicted only on specific grounds enumerated under Section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 and also considering the judgment of in , 2009 (6) CTC 656, wherein has considered as to whether there is any repugnancy between Kerala Sales Tax Act, 1962 and Bombay Sales Tax Act, 1959 on the one hand and the SARFAESI Act on the other hand, held that the SARFAESI Act and Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 are acting in different fields and the intention of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 is to protect the possession of the bona fide tenants and, therefore, while there is no repugnancy between the two Acts, it was held that the bank cannot take physical possession from a bona fide tenant by invoking the provisions of Sections 13(4) and 14 of the SARFAESI Act in the following paragraph: ", "\"38. In the above case, found that since there was no specific provision creating first charge in respect of the amount due to the bank in the SARFAESI Act , such provision contained in the enactment creating first charge in respect of the dues to the Government shall not indicate any conflict or inconsistency or overlapping between the same. In the case on hand, as we have already stated, there is no specific provision in the SARFAESI Act in respect of taking possession from the hands of the tenant. But the right of the tenant to continue to be in possession is protected by the TN Rent Control Act. The SARFAESI Act is an Act for the expeditious recovery of dues to the banks, financial institutions and secured creditors, whereas the purpose of the legislation i.e., the TN Rent Control Act is to protect the possession of the tenants. Thus, they are traceable to two different entries in their respective fields and there is neither any conflict nor repugnancy or overlapping. In such view of the matter, there is no difficulty in holding that the bank cannot take physical possession from the tenant protected under Tamil Nadu Rent Control Act by invoking the provisions of Sections 13(4) and 14 of the SARFAESI Act, in the event the tenant is in bona fide occupation. The point is answered accordingly.\" ", "It is in the above backdrop, we take up the individual cases. ", "W.P.No.30223 of 2011 ", "50. In this writ petition, the petitioner is a borrower from the second respondent/bank in respect of a housing loan to the extent of ` 8,82,000/- and a cash credit loan to the extent of ` 20 Lakhs. The bank has issued a notice under Section 13(2) of the SARFAESI Act claiming an outstanding of ` 21,58,531.40 under cash credit loan and ` 7,28,644.42 under housing loan and thereafter issued a notice under Section 13(4) of the SARFAESI Act as per Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 on 5.4.2011 claiming a total amount of ` 28,97,725.91 and on the bank approaching the Chief Judicial Magistrate, under Section 14 of the SARFAESI Act, the Chief Judicial Magistrate after recording the evidence of the Manager of the Bank, who has produced in his evidence notice issued under Section 13(2) of the SARFAESI Act, apart from the possession notice issued under Section 13(4) of the SARFAESI Act, as it is affixed and published in two newspapers, has passed an order after perusing the records and sworn statement of the authorised officer directing to render necessary assistance to the secured creditor in respect of the secured property. The order passed by the Chief Judicial Magistrate, is as follows: ", "\"The Authorized Officer Mr., of the petitioner has filed this petition under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 for taking possession of assets mentioned in the Description of Property. Perused the records. Sworn statement of the Authorized Officer of the petitioner recorded. After gleaning the entire materials made available with the court and upon hearing the petitioner, the court is fully satisfied with a need to render necessary assistance to the secured creditor in taking over the secured assets. All the legal formalities have already been complied with scrupulously and accordingly this court is inclined to confer the relief sought for by the petitioner under section 14 of the SARFAESI Act 2002. Thus, the Inspector of Police, , P.S., is required to render all necessary assistance to the secured creditor (petitioner) in taking over possession of the secured assets described in the description of property.\" ", "51. Inasmuch as the petitioner is a borrower and there is nothing to conclude that the Chief Judicial Magistrate has not applied his mind and inasmuch the petitioner has got an effective alternative remedy of filing an appeal under Section 17 of the SARFAESI Act, W.P.No.30223 of 2011 stands dismissed with liberty to the petitioner to approach under Section 17 of the SARFAESI Act, making it clear that if such appeal is filed within a period of four weeks from the date of receipt of a copy of this order, shall receive the said appeal and decide the same on merits and in accordance with law, independent of any observation made above. ", "W.P.No.30184 of 2011 ", "52. In this writ petition, the petitioner claims to be a tenant under the second respondent, who stood as a guarantor in respect of the borrowal made by third parties creating a mortgage in respect of his property. Even though the petitioner is a tenant, he has not stated in the affidavit filed in support of the writ petition as to the period of his tenancy, except producing an unregistered rental agreement dated 7.8.2008. However, it appears, as it is seen in the application filed by the first respondent/bank under Section 14(1) of the SARFAESI Act before the Chief Judicial Magistrate, , that the second respondent has created a mortgage in the year 2009. ", "53. In such circumstances, this Court cannot decide the bona fide nature of the petitioner as a tenant under the second respondent and, therefore, giving liberty to the petitioner to approach under Section 17 of the SARFAESI Act or to approach the appropriate forum in any other manner known to law, the writ petition stands dismissed. It is made clear that if the petitioner resorts to such legal recourse within four weeks from the date of receipt of a copy of this order, the authority concerned shall decide the issue on merits and in accordance with law. Till such time, if physical possession of the property was not taken over from the petitioner, status-quo shall be maintained. It is further made clear that after the said period of four weeks if the petitioner is unable to get any legal protection from the competent authority, it shall be open to the bank to proceed in accordance with law. ", "W.P.No.104 of 2012 ", "54. The petitioners in this writ petition are claiming to be the tenants under the second respondent, who is stated to have borrowed from the first respondent/bank by way of cash credit facility an amount of ` 8.50 Crores and by way of term loan facility an amount of ` 3,35,95,000/- on 13.10.2009. A claim was made to the extent of ` 11,78,74,402/- on 15.12.2010 and possession notice under Section 13(4) of the SARFAESI Act was served on 22.2.2011. Under Section 14 of the SARFAESI Act, at the instance of the first respondent/bank, the Chief Judicial Magistrate, has passed a considered order by perusing the detailed affidavit filed by the bank. ", "55. On the side of the petitioners, three unregistered rental agreements dated 22.5.2009, 1.6.2009 and 6.7.2009 have been filed. Inasmuch as the said unregistered rental agreements are dated immediately before the date of borrowal, this Court cannot decide while exercising the power under Article 226 of the Constitution of India, about the bona fide nature of the petitioners/tenants and, therefore, giving liberty to the petitioners to approach under Section 17 of the SARFAESI Act or to approach the appropriate forum in any other manner known to law, the writ petition stands dismissed. It is made clear that if the petitioners resort to such legal recourse within four weeks from the date of receipt of a copy of this order, the authority concerned shall decide the issue on merits and in accordance with law. Till such time if physical possession of the properties was not taken over from the petitioners, status-quo shall be maintained. It is further made clear that after the said period of four weeks if the petitioners are unable to get any legal protection from the competent authority, it shall be open to the bank to proceed in accordance with law. ", "W.P.No.105 of 2012 ", "56. The petitioners claim to be the tenants under the second respondent, who is the guarantor in respect of the availing of loan by the second respondent in W.P.No.104 of 2012, as stated above, and the learned Chief Judicial Magistrate, has passed the order after considering the documents and perusing the detailed affidavit filed by the first respondent/ bank. ", "57. In this case also, the unregistered rental agreements 30.1.2009, 31.3.2009, 3.12.2009 and 19.11.2007 are all dated immediately before the date of borrowal, and therefore, this while exercising the power under Article 226 of the Constitution of India, cannot decide about the bona fide nature of the petitioners/tenants and, therefore, giving liberty to the petitioners to approach under Section 17 of the SARFAESI Act or to approach the appropriate forum in any other manner known to law, the writ petition stands dismissed. It is made clear that if the petitioners resort to such legal recourse within four weeks from the date of receipt of a copy of this order, the authority concerned shall decide the issue on merits and in accordance with law. Till such time if physical possession of the properties was not taken over from the petitioners, status-quo shall be maintained. It is further made clear that after the said period of four weeks if the petitioners are unable to get any legal protection from the competent authority, it shall be open to the bank to proceed in accordance with law. ", "In the result, all the writ petitions are dismissed with the above observations. No costs. Consequently, M.P.No.1 of 2012 in W.P.No.950 of 2012, M.P.No.1 of 2011 in W.P.No.30223 of 2011, M.P.Nos.1 and 2 of 2011 in W.P.No.30184 of 2011, M.P.Nos.1 and 2 of 2012 in W.P.No.104 of 2012 and M.P.Nos.1 and 2 of 2012 in W.P.No.105 of 2012 are closed. ", "(P.J.M.J.) (M.D.J.) 17.4.2012 Index : Yes Internet : Yes sasi To: 1. The Secretary to , . 2. The Chief Judicial Magistrate \u0016 7. ,J. AND M.DURAISWAMY,J. (sasi) W.P.Nos.950 of 2012, 30223 and 30184 of 2011, and 104 and 105 of 2012 17.4.2012"], "relevant_candidates": ["0000013540", "0000015322", "0000027045", "0000175816", "0000290532", "0000322504", "0000327169", "0000379361", "0000627937", "0000645192", "0000647015", "0000703277", "0000708095", "0000857240", "0000874352", "0000890111", "0001004041", "0001059476", "0001108032", "0001129696", "0001186368", "0001327287", "0001455346", "0001489340", "0001511187", "0001511319", "0001524072", "0001640744", "0001727877", "0001766147", "0001992267", "0056073873", "0141201637"]} {"id": "0126111424", "text": ["PETITIONER: Vs. RESPONDENT: UNIED BANK OF INDIA & ORS. DATE OF JUDGMENT: 08/08/2000 BENCH: S.RAJENDRA BABU & SHIVARAJ V. PATIL JUDGMENT: ", "L...I...T.......T.......T.......T.......T.......T.......T..J RAJENDRA BABU, J. : ", "This petition is filed against the judgment passed by affirming a decree passed by the learned Single Judge of for a sum of Rs.1015.50 lakhs on application of the respondent for judgment upon admission as provided under Order XII, Rule 6 of the Code of Civil Procedure. The facts leading to the suit are as follows: ", " subcontracted construction of students' dormitories/dining hall for Iraq. Respondent Nos. 1 to 3 functioned as consortium to finance the said project. Certain disputes having arisen petitioner filed suits against the respondent Banks that the debits raised are illegal etc. () filed a suit for recovery of certain sums of money and an application made therein under Chapter XIII-A of the Original Side Rules and rejected the same and Respondents 1 and 3 Banks and were also impleaded by an amendment in the said suit. Respondent No.1 filed a suit for recovery of certain sum of money with certain other reliefs and in that suit, application for judgment upon admission was allowed. Appeal thereon being unsuccessful, this petition is filed. ", "The application filed by for judgment on admission covers only a part of the suit claim. The relied upon (I) Balance Sheet of the petitioner for year ending 31st March, 1989 with reference to Schedules 'C', 'D' and 'E'; (ii) Minutes of the meeting of Board of Directors held on 30th May, 1990 which noticed the discussion at the meeting and issues that could be deemed to have been settled as result thereof. (iii) letter dated 4th June, 1990 communicating the resolution and minutes of the meeting of the Board of Directors held on May 30, 1990. ", "In the said minutes in the meeting held on 30th May, 1990, it was mentioned as follows:- ", "\"IT WAS RESOLVED THAT : ", "In consideration of , Connaught Circus Branch, New Delhi, having agreed to the continuation of the previously sanctioned aggregate credit limits amounting to Rs.17.45 crores and in consideration of the having agreed to continue the operation of the various borrowing accounts with outstanding dues, as stated hereinbelow in detail, the Company agrees to duly execute a fresh set of documents as required by the there against. ", "That Mr. , the Managing Director of the Company be and is hereby authorised to execute the said documents and the official seal of the Company be affixed thereon. ", "It is also resolved that the Company disputes the amount of Rs.3,08,01,000 debited to its Cash Credit Account on 01.08.89 which along with interest stands at Rs.3,60,62,579 as on 31.03.90. ", "That the company accepts its liability as per details stated hereinbelow: ", "Natures Present Sanctioned Amount Due (Rs. In lakhs) (Rs. In lakhs) Cash Limit/OD 65.00 101.16 Inland Guarantee 401.31 23.18 1082.60 793.73 Jordan Guarantee 209.30 101.85 Term Loan 5.00 Nil Loan Account Nil 16.88 --------- --------- 1745.07 1036.80 ======= ======= ", "That, also due to fluctuations in Exchange Rate there has been difference in amount due under Jordan Guarantee amounting to about Rs.21 lakhs which is not reflected in details shown above.\" ", "A copy of the aforesaid resolution was sent to the plaintiff with the following note as indicated in the letter dated 4th June, 1990: ", "\"a) We do not confirm the debit entry of Rs.3,60,62,579/- representing your share of the invoked guarantee with interest upto 31.3.90 which has been effected by you unauthorisedly against the illegal payment made by . We are enclosing a copy of the reply given to the Legal Notice received by us from them. The reply is self-explanatory. You will agree that before effecting the said payment consisting of such a large amount, a reference ought to have been made to us. ", "b) The loan account of amounting to Rs.4,03,820 is not accepted and is totally denied. We have repaid your the Convertible was loan for Baghdad along with interest in full. The debit in your ledger is on account of the not giving effect to the reduced interest rate as directed by . At their request a copy of the circular was given to them and had also been sent to you. ", "c) That fresh documents are executed against the consideration of permitting us to operate the sanctioned limits there against as they stand. The debit entry of Rs.3,60,62,579 and entries for interest thereon will have no bearing on the actual amount due as confirmed by us in our Board Resolution. ", "d) Almost two years ago an unofficial freeze was imposed on our Inland Guarantee limits for reasons never communicated to us. Thus, you had denied fresh Guarantees for Bid Bonds etc. to tender for new works and the company's huge fleet of Construction equipments and trained personnel perforce thereby remained idle since the last one and a half year.\" ", "The petitioners filed an affidavit-in-opposition to contend that: ", "1. That the defendant No.1's suit is barred by limitation; ", "2. That the resolution dated 30.5.90 was passed subject to a condition that the inland guarantee limit would be resumed and that as the condition was not fulfilled, the resolution was no binding; ", "3. That the defendant No.1's suit was liable to be stayed under Section 10 CPC because the matter in issue in the suit was also directly and substantially in issue in the previous suits filed by others ", "4. That the suit of the defendant No.1 is bad for misjoinder of parties. ", "The defendants further contended that, insofar as resolution dated 30.5.90 and a letter dated 4.6.1990 are concerned, they are to the effect that they are matters of record and save what are matters of record and save what would appear from the letter dated 30.5.1990 all allegations to the contrary are disputed and denied. It is categorically denied that there is any admission of liability by the first respondent to the Petitioner to the extent of Rs.10,15,80,090 as on 30th March 1990 or that since the said alleged admission of the liability the claim of the Petitioner has increased and it is now more than Rs.24 crores, as wrongly alleged, if at all. ", "At the time of hearing it appears it was contended: 1. that the amount claimed by the plaintiff from the defendants was part of the consortium agreement under which , and agreed to advance money to defendant No. 1 in the proportion of 50:25:25. It was stated that has filed a suit against the defendants for recovery of all the amounts advanced by the consortium to the defendant No.1 and that suit was still pending, therefore, they were estopped from filing that suit and making an independent claim against the defendant No.1. 2. That in the suit filed by an application had been moved by for final judgment under Chapter XIII-A on the basis of the same documents which were sought to be relied upon by the plaintiff. The trial judge had rejected the same. 3. That payments had been made subsequent to the admission and loan was recalled only in 1993 just prior to the filing of the suit. 4. That several claims have been included in the suit in respect of which another suit has been filed in and, therefore, the amount could not be recovered. 5. The claim of the plaintiff had been covered by a counter guarantee issued by and the extent of payment made by it to the plaintiff and the suit was for the reason not maintainable at the instance of defendant No. 1. ", "6. That the defendants in the suit had filed a separate suit in which he had claimed for certain reliefs which would nullify the claim made by the plaintiff in the suit. ", "The learned trial judge found that there is an unequivocal admission of the contents of the documents and what is denied is the extent of admission and the increase of the liability admitted. The learned trial judge took the view that the pre- requisites of Order XII, rule 6 CPC had been satisfied in this case and that on a plain reading of the resolution of the dated 30.5.90 there could be no doubt that the Petitioner had made a clear, unambiguous and unconditional acknowledgement of its liability to the . The language of the resolution would show that the extent of the admission in the resolution is for Rs.10,15,80,000/-, if not for Rs.10,36.80 lakhs. The figure of Rs.1015.80 lakhs is firm admission being the figure arrived at after deducting Rs.21 lakhs claimed by the defendants by reason of fluctuation of the exchange rate and that was the amount claimed by the Petitioner in the suit. This admission made in the course of the of Directors' resolution had not been explained by the Petitioner in the affidavit-in-opposition but on the other hand had reiterated the same. The arguments raised before the trial court were considered to be contrary to the pleadings raised in the case. Therefore, the application was allowed. ", "On appeal, noticed these very facts and also noted that discrepancy, if any, between the appellant's particulars and the particulars in respect of which a judgment was sought on admission was not made the subject-matter of challenge either in the affidavit-in- opposition before the trial Judge or in the arguments thereof and characterized the same as a point of accounting discrepancy which could not be raised at the stage of appeal and dismissed the same. ", "Learned Counsel for the appellant contended that Order XII Rule 6 comes under the heading 'admissions' and a judgment on admission could be given only after due opportunity to the other side to explain the admission, if any, made; that such admission should have been made only in the course of the pleadings or else the other side will not have an opportunity to explain such admission; that even though, the provision reads that the court may at any stage of the suit make such order as it thinks fit effect of admission, if any, can be considered only at the time of trial; that the admission even in pleadings will have to be read along with order VIII Rule 5(1) of and need not necessarily proceed to pass an order or a judgment on the basis of such admission but call upon the party relying upon such admission to prove its case independently; that during pendency of other suits and the nature of contentions raised in the case, it would not be permissible at all to grant the relief before trial as has been done in the present case; that the expression 'admissions' made in the course of the pleadings or otherwise will have to be read together and the expression 'otherwise' will have to be interpreted ejusdem generis'. ", "As to the object of the Order XII Rule 6, we need not say anything more than what the legislature itself has said when the said provision came to be amended. In the objects and reasons set out while amending the said rule, it is stated that \"where a claim is admitted, the court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled.\" We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which, it is impossible for the party making such admission to succeed. ", "The next contention convassed is that the resolutions or minutes of meeting of the , resolution passed thereon and the letter sending the said resolution to the respondent bank cannot amount to a pleading or come within the scope of the Rule as such statements are not made in the course of the pleadings or otherwise. When a statement is made to a party and such statement is brought before the showing admission of liability by an application filed under Order XII Rule 6 and the other side has sufficient opportunity to explain the said admission and if such explanation is not accepted by the , we do not think the trial court is helpless in refusing to pass a decree. We have adverted to the basis of the claim and the manner in which the trial court has dealt with the same. When the trial judge states that the statement made in the proceedings of the meeting and the letter sent as well as the pleadings when read together, leads to unambiguous and clear admission with only the extent to which the admission is made is in dispute. And the court had a duty to decide the same and grant a decree. We think this approach is unexceptionable. ", "Before the trial judge, there was no pleading much less an explanation as to the circumstances in which the said admission was made, so as to take it out of the category of admissions which created a liability. On the other hand, what is stated in the course of the pleadings, in answer to the application filed under Order XII Rule 6 CPC, the stand is clearly to the contrary. Statements had been made in the course of the Minutes of the Board of Directors held on 30th May, 1990 to which we have already adverted to in detail. In the pleadings raised before the Court, there is a clear statement made by the respondent as to the undisputed part of the claim made by them. In regard to this aspect of communicating the resolution dated 30th May, 1990 in the letter dated 4th June, 1990 what is stated in the affidavit-in-oppostion in application under Order XII Rule 6 CPC is save, what are matters on record and save what would appear from the letter dated 30th May, 1990 all allegations to the contrary are disputed and denied. This averment would clearly mean that the petitioner does not deny a word of what was recorded therein and what is denied is the allegation to the contrary. The denial is evasive and the learned judge is perfectly justified in holding that there is an unequivocal admission of the contents of the documents and what is denied is extent of the admission but the increase in the liability is admitted. ", "Even without referring to the expression 'otherwise' in Rule 6 of Order XII CPC, we can draw an inference in the present case on the basis of the pleadings raised in the case in the shape of the applications under that Rule and the answering affidavit which clearly reiterates the admission. If that is so, interpretation of the expression 'otherwise' becomes unnecessary. ", "The learned counsel for the appellant relied on a decision of this Court in Vs. & Others, 1956 S.C.R.451, as to when an admission becomes relevant. In (supra) which is locus classicus on the subject states that merely because a written admission made in a different context, such admission may not become relevant if the party making it has a reasonable explanation of that. But that is not the position in the present case at all. Learned counsel for the appellant further adverted to the decision in & Anr. Vs. and Anr., 1999 (8) SCC 396 in which the court was concerned with a case of the effect of not filing a written statement and whether a decree could be passed only on that basis. That was a suit for specific performance and it was held it could not be granted without even writing a detailed judgment and adverted to various provisions of Code of Civil Procedure and reference was made to Order XII Rule 6 by way of analogy and referred to the dictum in , 1959 SCR 111, to state that Order XII Rule 6 should be read along with proviso to Rule 5 of Order 8 CPC. In that case, what was noticed was that in cases governed by Section 42 and Section 43 of Specific Relief Act, 1877, the court is not bound to grant declaration prayed for on the mere admission of the claim by the defendant if the court has reason to insist upon a clear proof apart from admission. The result of a declaratory decree confers status not only on the parties but for generations to come and so it cannot be granted on a rule of admissions and, therefore, insisted upon adducing evidence independent of the admission. That is not the position in the present case at all. We fail to see how this decision can be of any use to the petitioner. The decision in re , AIR 1974 Calcutta 170 pertains to the manner in which the balance sheet should be read and has no bearing on the case. The decision in . , 1974 M.P.75, is to the effect that the Rule is wide enough to afford relief not only in cases of admissions in pleadings but also in the case of admission de hors pleadings. ., AIR 1988 Delhi 153, and vs. , AIR 1962 J & K 66 cannot have any relevance because the facts in arising cases and the present case are entirely different. ", "Learned counsel for the Petitioner contended that admissions referred to in Order XII, Rule 6 CPC should be of the same nature as other admissions referred to in other rule preceding this Rule. Admissions generally arise when a statement is made by a party in any of the modes provided under Sections 18 to 23 of the Evidence Act, 1872. Admissions are of many kinds : they may be considered as being on the record as actual if that is either in the pleadings or in answer to interrogatories or implied from the pleadings by non- traversal. Secondly as between parties by agreement or notice. Since we have considered that admission for passing the judgment is based on pleadings itself it is unnecessary to examine as to what kinds of admissions are covered by Order XII, Rule 6 CPC. ", "We are not impressed with the contention of the learned counsel for the appellant that there is no admission for the purpose of Order XII Rule 6 at all, nor that the admission if any is conditional because we cannot spell out any conditions stated therein nor the dismissal of application filed by in the suit has any relevance. Therefore, we are of the view that this case deserves to be dismissed with advocates' fees quantified at Rs. 10,000/-."], "relevant_candidates": ["0000384581", "0000466626", "0000699829"]} {"id": "0131602535", "text": [", J. ", "1. through its Secretary has filed the above Writ Petition to issue a Writ of Declaration declaring the ceiling on the wages of the employees with regard to entitlement for Bonus in Section 2(13) of the Payment of Bonus Act as illegal and unconstitutional and consequently direct the respondents 1 and 2 not to impose ceiling on the wages of the employees Class III and IV Categories with regard to entitlement for Bonus and direct the respondents 2 and 3 to pay arrears of bonus for the period from 1986 to 1993. ", "2. The case of the petitioner is briefly stated hereunder: The petitioner is of the UCO Bank Employees' which is a registered Trade Union and has been recognised by the third respondent. Most of the employees of the third respondent were getting bonus until they crossed the limit of Rs.2,500/-. The Secretary of the petitioner Union who is the deponent of the affidavit filed in support of the above writ petition was getting bonus till 1986 and thereafter became eligible as a result of the ceiling on wages at Rs.2,500/-. of which the petitioner is an affiliate made representations to for amendment of Section 2(13) to remove the ceiling so as to make all employees particularly Class IV and III eligible to get bonus. Since nothing has been done so far by the Government, the was constrained to approach this Court by way of the present writ petition. ", "3. Joint Director, -first respondent herein, has filed a counter affidavit disputing various averments made by the petitioner. Section 2(13) of the Payment of Bonus Act, 1965, defining 'Employees' by which employee drawing more than 2,500 rupees would be ineligible for bonus. may from time to time revise the eligibility limit and calculation ceiling taking into account the economic situation prevailing in the country, capacity to pay, etc. These ceilings were last revised in the year 1985. Further, the Payment of Bonus Act , 1965 envisages minimum statutory bonus of 8.33 per cent and a maximum of 20 per cent. The scheme of payment of Bonus to persons employed in certain establishments is on the basis of profit or productivity. The Government can revise a ceiling on salary or wage for entitlement of bonus depending on the conditions prevailing in the country. while amending Section 2 (13) by Act 67 of 1985, substituted the words as \"two thousand and five hundred rupees\" for the words \"one thousand and six hundred rupees\". The amendment is with reference to salary or wages earned by the employees and not with reference to class III or IV employees. Section 10 of the Payment of Bonus Act, 1965 provides for payment of statutory minimum bonus of 8.33 percent and maximum of 20 per cent. ", "4. In the light of the above pleadings, I have heard Mr. , learned counsel for the petitioner Employees' Association; Mr. , learned Additional Solicitor General for respondents 1 and 2 and Mr. for third respondent. ", "5. Mr. , learned counsel for the petitioner , by drawing my attention to Section 2(13) of the Payment of Bonus Act, 1965, would contend that the ceiling imposed therein is bad, unjustified, unrealistic and violative of Article 14 of the Constitution of India. He also contended that there is no such ceiling under Gratuity Act , Workmen Compensation Act and other Social Welfare Legislation. On the other hand, Mr. , learned Additional Solicitor General, appearing for respondents 1 and 2, after pointing out the history of the enactment, contended that it is a legislation policy and it is for the which alone can prescribe and increase the ceiling. He also contended that inasmuch as the Payment of Bonus Act is self contained, the same cannot be compared with the other legislation and the judicial decisions arising from those enactments. According to him, it must be left to the wisdom of the . Mr. , appearing for the third respondent, adopted the argument of the learned Additional Solicitor General. ", "6. In order to appreciate the rival contentions, it is useful to refer the definition \"employee\" ", "in Section 2(13) of the Payment of bonus Act, 1965 (hereinafter referred to as \"the Act\"). ", "\" Section 2(13) \"employee\" means any person (other than an apprentice) employed on a salary or wage not exceeding three thousand and five hundred rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work of hire or reward, whether the terms of employment be express or implied;\" ", "Section 12 of the Act is also relevant which speaks about calculation of bonus with respect to certain employees. ", "\" Section 12 . Calculation of bonus with respect to certain employees.- Where the salary or wage of an employee exceeds two thousand and five hundred rupees per mensem, the bonus payable to such employee under Section 10 or, as the case may be, under Section 11 , shall be calculated as if his salary or wage were two thousand and five hundred rupees per mensem.\" ", "It is to be noted that at the time of enactment of the Act in 1965, the ceiling of a salary or wage was fixed at Rs.1,600/-, it was subsequently enhanced to Rs.2,500/-, and by Amendment Act 34/1995, the ceiling was raised to Rs.3,500/- with effect from 1-4-93. It is clear that after filing of the writ petition, the ceiling was increased from Rs.2,500/- to Rs.3,500/-. Mr. , learned counsel for the has contended that having included skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work in any industry, the eligibility criteria and fixing ceiling is unrealistic and unjustified. He further emphasized that the persons incharge of supervisory or managerial or administrative work undoubtedly get salary or wages more than the ceiling prescribed, accordingly they are forced to out of the pension benefit, which cannot be sustained. It is also stated that there is no ceiling to claim gratuity under the Payment of Gratuity Act , 1972 or compensation under Workmen Compensation Act . ", "7. Now I shall consider decisions cited by Mr. in support of his claim that ceiling provided under Section 2(13) of the Act is bad and irrational. The first decision is in the case of v. S.B.I., (1989 Supp. (1) S.C.C. 236). The grievance of the petitioners therein is that the instant Pension Plan governing the employee of the erstwhile is outdated and does not provide reasonable pension required for survival. Before , the submission was twofold: Firstly, the ceiling of Rs.1,300/- is unrealistic and secondly the calculation of pension at 50 per cent of the basic salary is uncalled for as it introduces a second ceiling. has accepted the first contention, namely, that the ceiling of Rs.1,300/- is unrealistic. After holding that once it is realised that pension is a right and not a bounty, it would not be proper to leave the quantum of pension at the discretion of the Trustees in each case, opined that the figure of Rs.1,300/- in the proposed Rule 20 (1) (a) should be replaced by the figure of Rs.2,400/-. First of all, the said decision deals with payment of pension under Employees Pension and Gratuity Fund Rules and Regulations. On the other hand, we are dealing with bonus under a statute, namely, Payment of Bonus Act , 1965. Even in the said decision, has altered the amount in the proposed rule. In such a circumstance, I am of the view that the said decision is not helpful to the petitioner's claim. ", "8. The next decision relied on by Mr. is in the case of , . In that case the tenants of residential buildings were paying monthly rent exceeding Rs.400/- excepted from the protection of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. After holding that there is no justification at all for picking out the class of tenants of residential buildings paying a rent of more than four hundred rupees per month to deny them the rights conferred generally on all tenants of buildings residential or non-residential by the Act, that the tenants of non-residential buildings cannot be said to be in a disadvantageous position as compared with tenants of residential buildings and that the argument based on protection of the weaker section of the community is entirely inconsistent with the protection given to tenants of non-residential buildings who are in a position to pay much higher rents than the rents which those who are in occupation of residential buildings can ever pay, struck down Section 30(ii) of the Act as violative of Article 14 of the Constitution of India. ", "9. , , , while considering Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, has held that law should be just to all sections of the society and it should not be unjust to one and give disproportionate benefit to the other. ", "10. He also relied on M/s v. State of J and K , wherein Their Lordships have held that in granting largess, the Government action must satisfy test of reasonableness and public interest. ", "11. Among these decisions, the decisions, namely, and (cited supra) arose under Rent Control Act, whereas (cited supra) is with reference to grant of largess by the . Mr. , learned Additional Solicitor General, by pointing out that unless those provisions are in pari materia with Payment of Bonus Act ,1965, the same cannot be cited as a binding decision for the issue in question. In this regard, he very much relied on a recent decision of in . The following conclusion of Their Lordships is relevant: (para 5) \"5......It is true that the courts while construing a provision of an enactment often follow the decisions by the courts construing similar provision of an enactment in pari materia. The object behind the application of the said rule of construction is to avoid contradiction between the two statutes dealing with the same subject. But in the present case, what we find is that the Madhya Bharat Land Revenue and Tenancy Act contains one integrated scheme providing for remedy to a pucca tenant claiming restoration of possession under Section 91 and 93 of the Act. The Madhya Bharat Land Revenue and Tenancy Act was repealed by the M.P. Land Revenue Code. In the repealing Act i.e. M.P. Land Revenue Code we do not find any provision like Section 93 of the Act. We are, therefore, of the view that Sections 91 , 92 and 93 of the Act are not in pari materia with the provision of Section 250 of the M.P. Code. It is not a sound principle of construction to interpret a provision of an enactment following the decisions rendered on a similar provision of an enactment when two statutes are not in pari materia.....\" ", "11(a). ., reported in (2001) 3 Cases 135, the has held thus: (para 19) \"19. We have considered the arguments of both the parties. In our view it is clear that the interpretation has to be on the basis of the expression \"agricultural produce\" as set out in Section 2(a) of the said Act. In so determining decisions based on different statutes, statutes such as sales tax laws can be of no assistance. All the cases relied upon by Mr. are cases under the taxing statutes where the interpretation has been given on the basis of the terms as defined in those statutes.\" ", "12. have held thus: (paras 12 and 13) \"12. it was held that cognate and pari-materia legislation should be read together as forming one system and as interpreting and enforcing each other. it was held that Code of Civil Procedure has to be read along with the Limitation Act . , it was held that Prevention of Corruption Act should be read along with the Evidence Act . . Chhoitaka Bibi it was held that the Code of Civil Procedure has to be read along with the Court Fees Act . this Court observed that the Companies Act should be read along with the Transfer of Property Act . ", "13. From the aforesaid decisions it clearly follows that it is permissible to read the provisions of the two Acts together when the same are complementary to each other...\" ", "13. ((2001) 7 Cases 71), has considered the issue relating to interpretation of Statutes. The following conclusion is relevant (para 13) \"13. We have considered the submission made by the parties. The settled principles of interpretation are that the court must proceed on the assumption that the legislature did not make a mistake and that it did what it intended to do. The court must, as far as possible, adopt a construction which will carry out the obvious intention of the legislature. Undoubtedly, if there is a defect or an omission in the words used by by legislature, the court would not go to its aid to correct or make up the deficiency. The court could not add words to a statute or read words into it which are not there, especially when the literal reading produces an intelligible result. The court cannot aid the legislature's defective phrasing of an Act, or add and mend, and, by construction, make up deficiencies which are there.\" ", "14. , the following conclusion is pressed into service: (para 52) \"52. There is no provision in the Act which negates the power of to grant pardon. has power to grant pardon at any stage of the proceedings. The power under Section 307 cannot be denied merely because no commitment of the case is made to . Learned Solicitor-General, in our view, rightly contends that the other statutes are only an external aid to the interpretation and to rely upon the omission of a provision which is contained in another different enactment, it has to be shown that the two Acts are similar which is not the position here. The scheme of the two Acts is substantially different as has been earlier noticed by us....\" ", "15. have arrived at the following conclusion: (para 23) \"23. We find that Kantilal Trikamlal case supports the view taken in Getty Chettiar case . Added to this, Section 2(15) of the Estate Duty Act, defining \"property\" came up for consideration in Kantilal Trikamlal case (cited supra). We may state here itself that the words and expressions defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expressions in another statute unless both the statutes are pari materia legislation or it is specifically so provided in one statute to give the same meaning to the words as defined in the other statute. The aim and object of the two legislations, namely, the Gift Tax Act and the Estate Duty Act are not similar.\" ", "16. All the above decisions of make it clear that the words and expression defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expressions in another statute unless both the statutes are pari materia legislations. Further, it is clear that the other statutes are only an external aid to the interpretation and to rely upon the omission of a provision which is contained in another different enactment, it has to be shown that the two Acts are similar. It is also clear that it is permissible to read the provisions of the two Acts together when the same are complementary to each other. It is also stated that the while construing a provision of an enactment often follow the decisions by the courts construing similar provision of an enactment in pari materia. The object behind the application of the said rule of construction is to avoid contradiction between the two statutes dealing with the same subject. But, in the present case we are concerned with the ceiling prescribed for Payment of Bonus to the Employees. The cases relied on by Mr. are cases under Tamil Nadu Buildings (Lease and Rent Control) Act and Bombay Rent Control Act where the interpretation has been given on the basis of the terms as defined in those statutes. Accordingly, as rightly argued by the learned Additional Solicitor General, those principles cannot be applied to the present case. ", "17. Another decision very much relied on by the learned Additional Solicitor General is in the case of (2001 (1) CTC 309). Before , one of the contentions of the petitioner was that the bonus, which the has directed the Management to pay was in the nature of deferred wages, that impugned legislation had the effect of freezing wages, and that not being vested with the power to reduce the wages, the legislation is invalid on that account as well. On behalf of , it was contended before that the power of legislation is plenary and it is open to the law maker to amend or repeal existing legislation so long as it acts within its field of legislative competence, and that such power extends to taking away vested rights. It was further submitted that in matters of economic policy, the has wide latitude and is to be allowed play at the joints. While construing the amendment made in the of India Act , has concluded thus: (para 28 and 39) \"28. The legislation with which we are concerned in this case has already been set out. The amendment made by the impugned enactment is to the of India Act and other enactments concerning other public sector s. By Section 7(1) of the of India Act, the was vested with the power to change the conditions of service of those of its employees, who had earlier served in the Imperial . Those employees cannot assert that they have a vested unalterable right in their terms and conditions of the employment. So far as other employees are concerned, by Section 43 of the Act, the is empowered to determine the terms and conditions of service. The of India Act , as also the other Acts amended by this amending Act, are not beyond the pale of the legislative power of the . has undoubted power to legislate on the topic of bonus and is not precluded from legislating on that topic in enactments other than the Payment of Bonus Act . The principles, including custom, on basis of which bonus is payable, are capable of being altered by legislation. ", "39. The argument that the impugned legislation is invalid on the ground that it has expropriated the wages of the workmen bonus, according to petitioner being deferred wages, is wholly untenable. Bonus, after the enactment of the Payment of Bonus Act is a statutory right. The bonus though calculated on basis of wages, can no longer be termed as a deferred wage, though that description had been given to it by the prior to the enactment of the Bonus Act . While bonus may form part of wages for purpose of some of the other enactments governing employees, the right to receive bonus and the extent is as regulated or permitted under the Bonus Act ....\" ", "It is settled that in matters of economic policy, the must have a larger area in which to make its decisions without the supervision of the , as the is the better Judge of what the policy should be in relation to matters of economic. Likewise, has power to legislate on the topic of bonus. The having legislated that bonus to the employees of shall be payable only in accordance with and to those eligible under the Payment of Bonus Act , it is no longer open to the employees to claim bonus on the basis of custom de hors the provisions therein. Likewise, bonus after the enactment of Payment of Bonus Act , 1965, is a statutory right. The right to receive bonus and extent is as regulated or permitted under the Bonus Act . ", "18. To sum up, after the enactment of the Payment of Bonus Act , the right to receive bonus and the extent is as regulated or permitted under the Bonus Act . There is no scope for claiming bonus de hors the provisions therein. Though in other enactments, the differential treatment or ceiling is found to be bad, in view of the fact that those enactments cannot be compared with the Payment of Bonus Act , those decisions are not helpful to the case on hand. The reference made to the Rent Control legislation of the State of Tamil Nadu and Bombay, Payment of Gratuity Act , Workmen Compensation Act are not in pari materia with section 2(13) of the Payment of Wages Act. In such a circumstance, it is not fair principle of construction to interpret a provision of enactment following a decision rendered in a similar provision of the enactment when the statutes are not in pari materia. The cases relied on by Mr. are cases under different statutes where the interpretation has been given on the basis of the terms given in those statutes. It is also settled law that it is permissible to read the provisions of two Acts together when the same are complementary to each other. It is true that in (2002 (1) LLJ 918, a Division Bench of has held that prescribing wage ceiling of Rs.1,600/- per month under Payment of Wages Act , 1936 had become obsolete and unreal and issued appropriate direction for change in the Act. In our case, I have already referred to the fact that at the time of enactment of Bonus Act , the ceiling was fixed at Rs.1,600/- and the same was increased to Rs.2,500/- and again by Act 34/1995, it was further increased to Rs.3,500/-. Likewise, the figure mentioned in Section 12 of the Act also increased periodically. I have already held that Section 12 speaks about computation of bonus. In the light of the fact that is very well aware of the grievance of persons concerned and it increases the ceiling limit then and there, I am of the view that while holding that the impugned legislation is valid, no direction is required to be given by this Court. I hold that Section 2(13) of the Payment of Bonus Act, 1965 defining an employee is constitutional and the same is valid in law. The Bonus Act envisages minimum statutory bonus of 8.33 per cent and a maximum of 20 per cent. The scheme of payment of bonus to persons employed in certain establishments is on the basis of profit or productivity. may from time to time revise the eligibility limit taking into account the economic situation prevailing in the country, capacity to pay etc. Inasmuch as the ceiling limit was increased to Rs.3,500/- in 1995, this Court hopes that may revise the eligibility limit, more particularly, in view of increased salary/wage payable to Class III and IV employees. With the above observation, I hold that Section 2(13) defining an employee in the Payment of Bonus Act , 1965 is constitutional, valid in law and the same is not liable to be struck down. Accordingly, the Writ Petition fails and the same is dismissed. No costs. Consequently, both the ., are closed."], "relevant_candidates": ["0000046064", "0000151821", "0000163524", "0000195129", "0000213931", "0000235803", "0000340697", "0000423307", "0000672592", "0000729673", "0001082531", "0001296130", "0001490167", "0001644913", "0001737583"]} {"id": "0137734242", "text": ["PETITIONER: UNION OF INDIA & ORS. Vs. RESPONDENT: N.R. BANERJEE & ORS. DATE OF JUDGMENT: 16/12/1996 BENCH: K. RAMASWAMY, G.T. NANAVATI ACT: HEADNOTE: JUDGMENT: ", "O R D E R Leave granted. ", "These appeals by special leave arise from the orders of , Jabalpur Bench, made on August 14, 1996 in OA Nos.219/95 and 237/96. The controversy involved relates to promotion to the post of Senior General Manager in under India Ordinance Factories Services Rules. The question for consideration is; as to when the vacancies in the above posts would arise? The grade and scale of pay for the said post is Rs.3700-8000/-. For the year 1994-95, panel of successful candidates was required to be prepared. According to the appellants, there were no clear vacancies as on April 1994. Four members in the above grade were to retire in that year. Proposal for filling up the ensuing vacancies from was sent to the on December 22, 1993. The had communicated to its approval on February 8, 1994. A.C.Rs. of the eligible candidates were approved on August 16, 1994 and the incumbent members joined as members of the Board on August 22, 1994, September 03, 1994, October 6, 1994 and March 1, 1995. Consequently the met on March 15, 1995 for selection of Officers to fill up the four vacancies. ", "On this factual matrix, it is contended for the appellants that the crucial date for the meeting for selection should be April or May 1995 for selection of candidates to fill up the vacancies of the year 1994-95. The A.C.Rs. recorded of all the candidates falling within the zone of consideration and approved by the , as on March 31, 1994, are required to be looked into and merits adjudged. The , therefore, was not right in directing the to ignore the A.C.Rs. for the year 1994 and consideration of the candidates eligible by then upto March, 1993. The was to be constituted as on April 1, 1994. Resultantly, the direction were given in paragraphs 25 and 28 for consequential action. , learned Additional Solicitor General, contends that the view of the is not correct in law. As per the procedure, preparation of the panel of candidates for consideration by the to fill up the clear vacancies as on April 1994 is necessary. A.C.Rs. are prepared on the basis of the performance during financial year which would be October 1 of the year. In this case, the A.C.Rs. of the incumbents are written on the financial years basis;. It was approved by the in March 31, 1995. Therefore, the could not have got approved A.C.Rs. before that date, namely, as held by the on March 19, 1993. The direction, therefore, that the in its proceedings should take into consideration A.C.Rs. of all the eligible candidates as on April, 1993 is incorrect. Though, prima facie, we are impressed with the arguments of , on deeper probe and on going through the procedure laid by , we find no force in the contention. Preparation of the action Plan for consideration by the of the respective claims of the officers within the Zone and thereafter for setting in motion the preparation of panel on year wise basis, is elaborately mentioned. In case of their failure to do so, what further procedure is required to be followed is also indicated in the rules. It thereby manifests the intention of the rue-maker that the appellant- should estimate the anticipated vacancies, regular vacancies and also vacancies arising thereafter due to various contingencies and it should also get the A.C.Rs. prepared and approved. it is also made clear that the should sit on regular basis to consider the cases of the eligible candidates within the zone of consideration. The object is clear that the should keep the panel ready in advance so that the vacancies arising soon thereafter may be filled up from amongst the approved candidates whose names appear in the panel. In that behalf, it is seen that in the guidelines issued by the in Part I of clause (49) dealing with Functions and Composition of Departmental promotion Committee etc. necessary guidelines have been enumerated. It envisages that a post is filled upon by promotion where the Recruitment Rules so provide. In making promotions, it should be ensured that suitability of the candidates for promotion is considered in an objective and impartial manner. In other words, the consideration of the candidate is not clouded by any other extraneous considerations like caste, creed, colour, sect, religion or region. In consideration of claims, merit alone should enter into objective and impartial assessments. The object appears to be that the A.C.Rs. be written by competent officer and approved by superior officer objectively and impartially without being influenced by any extraneous and irrelevant consideration, to augment efficiency in public service and to improve competence. For the purpose of selection, should be formed in each Ministry/Department/Office, whenever an occasion arises, for promotions/confirmations etc. The D.P.Cs. so constituted shall judge the suitability of officers for: ", "(a) promotions to selection as well as non-selection posts; ", "(b) confirmation in their respective grades/posts; ", "(c) assessment of the work and conduct of probationers for the purpose of determining their suitability for retention in service of their discharge from it or extending their probation; and ", "(d) consideration of cases of servants for crossing the Efficiency Bar. ", "Rule 2.1 relates to composition of the for Group A and Group B Officers. Members included in DPCs should be officers who are at least one step above the posts in which promotion/confirmation is be made as indicated thereunder. This is consistent with the law laid by this Court in . [(1996) 8 Sec 762] wherein it was held that the object of writing the confidential report is two-fold, i.e., to give an opportunity to the officer to remove deficiencies and to inculcate discipline. Secondly, it seeks to serve improvement of quality and excellence and efficiency of public service. The officer should show objectivity, impartiality and fair assessment without any prejudices whatsoever with the highest sense of responsibility alone to inculcate devotion to duty, honesty and integrity to improve excellence of the individual officer. Lest the officers get demoralised which would be deleterious to his efficacy and efficiency of public service, the confidential reports should be written by a superior officer of high rank. There should be another higher officer in rank above the officer who has written confidential report to review such report. ", "Part II of the guidelines relating to the frequency of meeting of the Para 3.1 indicates that the D.P.Cs should be convened at regular annual intervals to draw panels which could be utilised for making promotions against the vacancies occurring during the course of a year. In other words, the life of the penal is one year. For this purpose, it is essential for the concerned appointing authorities to initiate action to fill up the existing as well as anticipated vacancies well in advance of the expiry of the previous panel, by collecting relevant documents like A.C.Rs., integrity certificates, seniority list etc. for placing before the ", ". should be convened every year, if necessary, on fixed date, i.e. 1st of April or May. In the middle of the para, by way of amendment brought on May 13, 1995, it postulates that very often action for holding meeting is initiated after the vacancy has arisen. This results in undue delay in filling up of vacancies and causes dissatisfaction among those who are eligible for promotion. It may be indicated that regular meeting of . should be held every year for each category of posts so that approved select panel is available in advance for making promotions against vacancies arising every year. Under para 3.2, the requirement of convening annual meetings of the . should be dispensed with only after a certificate has been issued by the appointing authority that there are no vacancies to be filled by promotion or no officers are due for confirmation during the year in question. It would, thus, be seen that . are required to sit every year, regularly on or before 1st April or 1st May of the year to fill up the vacancies likely to arise in the year for being filled up. The required material should be collected in advance and merit list finalised by the appointing authorities and placed before the for consideration. This requirement can be dispensed with only after a certificate is issued by the appointing authority that there are no vacancies to be filed by promotion, or that no officers are due for confirmation, during the year in question. ", "Part III deals with preparatory action plan for consideration for promotion. Para 4.1 reads as under; ", "\"It is essential that the number of vacancies in respect of which a panel is to be prepared by a should be estimated as accurately as possible. For this purpose, the vacancies to be taken into account should be the clear vacancies arising in a post/grade/service due to death, retirement, resignation, regular long term promotion and deputation or from creation of additional posts on a long term. As regards vacancies arising out of deputation, only those cases of deputation for periods exceeding one year should be taken into account, due note, however, being kept also of the number of the deputationists likely to return to the cadre and who have to be provided for. Purely short term vacancies created as a result of officers proceeding on leave, or on deputation for a shorter period, training etc., should not be taken into account for the purpose of preparation of a panel. In cases where there has been delay in holding s for a year or more, vacancies should be indicated year- wise separately.\" ", "Crucial date for determining eligibility has been dealt with thereunder. By an amendment brought w.e.f. July 19, 1989, it is stated that relevant dates for determining eligibility of the officers for promotion would be, where A.C.Rs. are written calendar yearwise, 1st July of the year and where the A.C.Rs. are written financial yearwise, 1st October of that year. The other details prescribed in Chapter IV are not material for the purpose of this case. Part 6.4.1 deals with preparation of yearwise panels by D.P.C. which reads as under; ", "\"Where for reasons beyond control, the could not be held in year(s), even though the vacancies arose during that year (or years), the first that meets thereafter should follow the following procedures : ", "(i) Determine the actual number of regular vacancies that arose in each of the previous year(s) immediately preceding and the actual number of regular vacancies proposed to be filled in the current year separately. ", "(ii) Consider in respect of each of the years those officers only who would be within the field of choice with reference to the vacancies of each year starting with the earliest year onwards. ", "(iii) Prepare a `Select list' by placing the select list of the earlier year above the one for the next year and so on; ", "It would, thus, be seen that the authorities are required to anticipate in advance the vacancies for promotion on regular basis including long term deputation posts and additional posts created and then to take the action plan in finalising the A.C.Rs. preparation of the select list and place necessary material before the D.P.C. for consideration of the candidates within the zone of consideration, as are found eligible for the relevant year/years. ", " in the present case was directed to consider the cases of all the eligible candidates within the zone of consideration so that there will not be any heart burning among the eligible persons whose claims have been withheld for consideration for promotion to the higher post. In S.K. Rizvi & Ors. vs. [1993 Supp. (3) SCC 575] the mandatory duty of the preparation of the select list of the officers for promotion to has been indicated in para 35 of the judgment at page 605 thus: \"We, therefore, hold that preparation of the select list every year is mandatory. It would subserve the object of the Act and the rules and afford an equal opportunity to the promotee officers to reach higher echelons of the service. The dereliction of the statutory duty must satisfactorily be accounted for by the State Government concerned and this Court takes serious note of wanton infraction\". ", "It would thus be seen that the claims of the candidates eligible have to be considered for promotion objectively and dispassionately, with a sense of achieving many-fold purpose (1) affording an opportunity to an incumbent to improve excellence, honesty, integrity, devotion to public duty; (2) inculcating discipline in service; (3) afford opportunity to every eligible officer within zone of consideration for promotion to higher post or officer; and (4) ensuing that the Committee regularly meets and considers their claim objectively, impartially with high sense of responsibility in accordance with the procedure and finalisation of the list in advance so as to fill up vacancies arising in the year from the approved panel without any undue delay. They are the salutory principles, purpose and the policy behind the above rules and the should follow them. ", "Considered from that perspective, the question arises: whether the view taken by the is justified in law? It is true that filling up of the posts are for clear or anticipated vacancies arising in the year. It is settled law that mere inclusion of one's name in the list does not confer any right in him/her to appointment. It is not incumbent that all posts may be filled up. But the authority must act reasonably, fairly and in public interest and omission thereof should not be arbitrary. [(1991) 2 SCR 567], had held that inclusion of the name of a candidate in a merit list does not confer any right to be selected unless the relevant recruitment rules so indicate. The is under no legal duty to fill up all or any of the vacancies even thought he acts in arbitrary manner. . [(1993) Supp. 3 SCC 268] it was held that mere inclusion of one's name in the panel does not confer on him/her any indefeasible right to appointment. It was further held that the purpose of making panel was to finalise the list of eligible candidates for appointment. The preparation of the panel should be to the extent of the notified or anticipated vacancies. Unduly wrong panel should not be operated. . [] it was held that the mere fact that a candidate's name finds a place in the select list as a selected candidate for appointment to a post, does not confer on him/her an indefeasible right to be appointed in such post in the absence of any specific rule entitling him to such appointment. 1986 & Ors. [] it was held that a person who is selected and empanelled does not on account of empanelment alone acquire any indefeasible right to appointment. Empanelment is, at the best, a condition of eligibility for the purposes of appointment and that by itself does not amount to selection or creation of a vested right to appointment unless relevant rules state to the contrary. However, in the light of the above principles and in the light of the clear rules extracted hereinbefore, it is seen that the exercise of preparation of the panels is undertaken well in advance to fill up the clear vacancies of anticipated vacancies. The preparation and finalisation of the yearly panel, unless duly certified by the appointing authority that no vacancy would arise or no suitable candidate was available, is a mandatory requirement. If the annual panel could not be prepared for any justifiable reason, yearwise panel of all the eligible candidates within the zone of consideration for filling up the vacancies each year should be prepared and appointment made in accordance therewith. [AIR 1987 SC 847], this Court had pointed out with respect to the prescription of the limitation of one year of the waiting list thus. ", "\"The reason underlying the limitation of the period of list for one year is obviously to ensure that other qualified persons are not deprived of their chances of applying for the post in the succeeding year and being selected for appointment.\" ", "It is true that the material furnished before us would indicate that action was taken on December 22, 1993 by and circulated for action to be taken by the Government and thereafter was consulted. Action taken on this material should have been taken much earlier to the date on which it was taken since they knew that four members were due to retire in August, September, October 1994 and March 1995. There were anticipated vacancies likely to arise on permanent basis and promotion to them was to be made on regular basis. In other words, they were all clear vacancies. So they were to be finalised before April 1994 and the confidential reports should have been approved before 31st March 1993 and all eligible candidates within the zone of consideration as on the date of D.P.C. were entitled to be considered. The direction given be the referred to above is clearly in accordance with the procedure indicated hereinbefore. Therefore, we do not find that the orders are vitiated by any error of law warranting interference. ", "The appeals are accordingly dismissed. No costs. Since the has given time to constitute the and finalise the matter within 45 days, time is extended for 45 days from today. It is needless to mention that all those found eligible are required to be appointed."], "relevant_candidates": ["0000284979", "0000673003", "0000982107", "0001009952", "0001750552", "0001767295"]} {"id": "0147226972", "text": ["PETITIONER: Vs. RESPONDENT: STATE OF U.P. & ORS. DATE OF JUDGMENT: 25/04/2000 BENCH: D.P.Wadhwa, S.S.Ahmad JUDGMENT: ", ", J. ", "Leave granted. What is \"motive\"; what is \"foundation\"; what is the difference between the two; these are questions which are said to be still as baffling as they were when , J. in vs. of Punjab, (1974) 2 SCC 831 = 1975 (1) SCR 814 = AIR 1974 SC 2192, observed as under : \"Again, could it be that if you summarily pack off a probationer, the order is judicially unscrutable and immune? If you conscientiously seek to satisfy yourself about allegations by some sort of enquiry you get caught in the coils of law, however, harmlessly the order may be phrased. And so, this sphinx-complex has had to give way in later cases. In some cases the rule of guidance has been stated to be `the substance of the matter' and the `foundation' of the order. When does `motive' trespass into `foundation'? When do we lift the veil of `form' to touch the `substance'? When the says so. These `Freudian' frontiers obviously fail in the work-a-day world.\" But, as we shall presently see, the law, on account of recent judgments concerning the services of a probationer, is fairly well-settled and there is no cause for being confounded or bewildered. The perplexity which, at one time, surrounded the torrid question involved in this case has yielded to the clarity of reasons propounded by this from time to time in recent times to which a reference shall be made during the course of this discussion. The appellant was recruited on 1.10.1985 as a Constable in , U.P. under the U.P. Pradeshik Armed Constabulary Act, 1948. He completed his training on 6th of September, 1986 and was, thereafter, placed on probation for a period of two years. He completed his period of probation on 5th of September, 1988 but a year later, on 19th of July, 1989, his services were terminated by a simple notice in terms of Rule 3 of the U.P. Temporary Servants (Termination of Service) Rules, 1975. The order of termination was challenged by the appellant before which, by its judgment dated 18.1.1993, allowed the claim petition and set aside the order dated 19.7.1989 by which the services of the appellant were terminated. Respondents 1 and 2, thereafter, approached the High through a Writ Petition which was allowed on 27th of November, 1997 and the judgment passed by the was set aside. Learned counsel for the appellant has contended that the order by which the services of the appellant were terminated, though innocuous apparently, was, in fact, punitive in nature. The appellant, it is contended, could not have been removed from service without holding a regular departmental enquiry. It is further contended that the courts including the constituted under the U.P. Public Services () Act, 1976 have full jurisdiction to go behind the order to find out whether it was an order of termination simpliciter or it was an order passed by way of punishment. It is pointed out that this aspect of the matter was considered by the which, on the basis of the facts set out in the counter-affidavit filed on behalf of the respondents as also the entire service record of the appellant which was produced before it, came to the conclusion that the order was punitive in nature. This finding, it is contended, could not have been disturbed by the High in a Writ Petition under Article 226 of the Constitution. Learned counsel for the respondents has, on the contrary, contended that the appellant was a temporary employee and, therefore, his services could be terminated at any time by giving him a month's notice in terms of U.P. Temporary Servants (Termination of Service) Rules, 1975. In the Counter-Affidavit filed before the before which the order dated 19.7.1989 (termination order) was challenged by the appellant, it was, inter alia, stated that on 24th of June, 1989 while camping at Ghat Varanasi for Flood Relief Training, a quarrel had taken place between two Constables as a result of which Constable used filthy and unparliamentary language against Constable . He also caused injuries to Constable by kicks and fists. He was joined by Constable . Other Constables also joined the fray. A preliminary enquiry was conducted by , Assistant Commandant, P.A.C. and a few constables including the appellant were found guilty of indiscipline and misbehaviour and it was for this reason that the services of the appellant were terminated. The respondents admitted in the counter- affidavit that there was no adverse material against the appellant before the incident in question. The original records which were produced before the and were scrutinised by it indicated that the order by which the services of the appellant were terminated was passed on account of his alleged involvement in the quarrel between the constables at the Ghat Varanasi Camp. The has found as under:- \"The preliminary enquiry file No.Ja-2/89 relating to the petitioner and other constables of 34th Bn. P.A.C. Varanasi from page 21/34 to 22/33 dated 26.6.89 shows that the enquiry was conducted by Sri , Assistant Commandant, 34th Bn. P.A.C. Varanasi and in the preliminary enquiry report he concluded at pages 21/34 to 22/37 that the petitioner along with others had indulged in a misconduct of hurling blows and used filthy language to the superior officers of the Department and he was found guilty along with others for the said misconduct and misbehaviour. Thereafter on internal page 6 the impugned order of termination dated 19.7.89 was passed in respect of the petitioner and on the same day he was served the copy of the order.\" It was in view of the above finding that the termination order was held to be punitive in nature and was consequently set aside by the but the High relying upon the decision of this in , = 1991 (1) SCR 29, quashed the order of the . The first contention of the learned counsel for the appellant is about the status of the appellant. Learned counsel has contended that the appellant could not have been legally removed from service, except by way of disciplinary action in accordance with the requirements of Article 311(2) of the Constitution. It is contended that after completion of the period of probation, the appellant had acquired `permanent' status and, therefore, his services could not have been terminated by a mere notice or a month's pay in lieu thereof. This argument cannot be accepted. An assertion that on completion of the period of probation the appellant had acquired `permanent' status is based on a misreading of the provisions of Para 541 of Regulations, relevant portion of which is quoted below : \"541. (1) Recruits will be on probation for a period of two years, except that -- (a) those recruited directly in or will be on probation for three years, and (b) those transferred to will be governed by the directions contained in paragraph 84 of the Police Regulations. If during the period of probation their conduct and work have been satisfactory and they are approved by the Deputy Inspector General of Police at the end of the period of probation for service in the force the Superintendent of Police will confirm them in their appointment.\" A perusal of the above provision would indicate that the period of probation is two years. The Regulation is silent as to the maximum period beyond which the period of probation cannot be extended. In the absence of this prohibition, even if the appellant completed two years of probationary period successfully and without any blemish, his period of probation shall be treated to have been extended as a `permanent' status can be acquired only by means of a specific order of confirmation. This in (1968) 3 SCR 1 = AIR 1968 SC 1210 ruled out the proposition of automatic confirmation on completion of the period of probation. This ruled that the `permanent' status can be acquired only by a specific order confirming the employee on the post held by him on probation. To the same effect is the decision in vs. = 1980 (1) SCR 487 = AIR 1980 SC 57. = 1991 (2) SCR 320 = AIR 1991 SC 1402, the same principles were reiterated. In view of the above, the contention that the appellant had acquired `permanent' status cannot be accepted. His status was that of a probationer. Now, it is well-settled that the temporary servants or probationers are as much entitled to the protection of Article 311(2) of the Constitution as the permanent employees despite the fact that temporary government servants have no right to hold the post and their services are liable to be terminated at any time by giving them a month's notice without assigning any reason either in terms of the contract of service or under the relevant statutory rules regulating the terms and conditions of such service. The courts can, therefore, lift the veil of an innocuously worded order to look at the real face of the order and to find out whether it is as innocent as worded. (See: , AIR 1958 SC 36 = 1958 SCR 828). It was explained in this decision that inefficiency, negligence or misconduct may have been the factors for inducing the to terminate the services of a temporary employee under the terms of the contract or under the statutory Service Rules regulating the terms and conditions of service which, to put it differently, may have been the motive for terminating the services but the motive by itself does not make the order punitive unless the order was \"founded\" on those factors or other disqualifications. Following the decision of case (supra), this in , AIR 1960 SC 689, held that if the services of a probationer are terminated on the basis of an enquiry into the allegations of misconduct and inefficiency, the order would be punitive. It was pointed out that in the case of a probationer, it is always open to the to hold an enquiry merely to assess the merits of the employee to find out whether he was fit to be retained in service and confirmed. In another case relating to a probationer, namely, in , 1961 (1) SCR 606 = AIR 1961 SC 177, where the services were governed by Rule 55-B of the Civil Services (Classification, Control and Appeal) Rules which provided that where the services of a probationer were intended to be terminated either during the period of probation or at the end of that period for any fault or on account of his unsuitability, he would be apprised of the grounds of unsuitability and would also be afforded an opportunity to show-cause against it before orders are passed against him, it was held that the termination order would not become punitive merely because of an antecedent enquiry but the real object or purpose of the enquiry had to be found out whether it was held merely to assess the general unsuitability of the employee or it was held into charges of misconduct or inefficiency etc. , AIR 1963 SC 1552 = 1964 (2) SCR 135, which again was a case relating to a probationer, it was held that on account of Rule 55-B of the Civil Services (Classification, Control and Appeal) Rules if the enquiry was held for the limited purpose of finding out whether the employee was fit to be retained or not, the said enquiry would not make the order punitive as the enquiry could not be related to any misconduct of the employee. This view was reiterated in , AIR 1964 SC 449. , AIR 1963 SC 531 = 1963 Supp.(3) SCR 716, the order by which the services of the employee were terminated was an order simpliciter in nature, which was innocuously worded, but it was held by this that the form of the order was not decisive and the could go behind that order to find out whether it was founded upon the misconduct of the employee. These cases, namely, AIR 1960 SC 689; (1961) 1 SCR 606 = AIR 1961 SC 177; (1963) Supp. (3) SCR 716 = AIR 1963 SC 531; and AIR 1964 SC 449 were considered by this in (1964) 5 SCR 190 = AIR 1964 SC 1854 where the services of the appellant, who was a temporary employee, were terminated by giving him a simple notice specifying therein that the services would stand terminated with effect from the date mentioned therein. But, before the termination of his services, he was called upon to explain certain irregularities and was also asked to submit his explanation, but no regular departmental enquriy was held. It was held that since no punitive action was taken against the appellant, there was no question of the applicability of Article 311(2) of the Constitution. In another significant decision in (1968) 3 SCR 234 = AIR 1968 SC 1089 where the respondent, who was officiating in (Executive Branch) was reverted to his substantive post in after issuing him a charge sheet to which a reply was submitted by the respondent but the disciplinary enquiry was not proceeded with, and an order of reversion was passed, it was held that the order could not be treated to have been passed by way of punishment. The laid down the following propositions : \"1. The services of a temporary servant or a probationer can be terminated under the rules of his employment and such termination without anything more would not attract the operation of Art. 311 of the Constitution. 2. The circumstances preceding or attendant on the order of termination of service have to be examined in each case, the motive behind it being immaterial. 3. If the order visits the public servant with any evil consequences or casts an aspersion against his character or integrity, it must be considered to be one by way of punishment, no matter whether he was a mere probationer or a temporary servant. 4. An order of termination of service is unexceptionable form preceded by an enquiry launched by the superior authorities only to ascertain whether the public servant should be retained in service, does not attract the operation of Art. 311 of the Constitution. 5. If there be a full-scale departmental enquiry envisaged by Art. 311 , i.e. an Enquiry Officer is appointed, a charge-sheet submitted, explanation called for and considered, any order of termination of service made thereafter will attract the operation of the said Article.\" These principles as also the principle laid down in 's case (supra) were reiterated by this in ; = 1971 (2) SCR 191 = AIR 1971 SC 1011; . (1974) 3 SCR 754 = AIR 1974 SC 1317 = and it was laid down that in order to attract the provisions of Article 311(2) it has to be seen whether the misconduct or negligence was a mere motive for the order of reversion or termination or whether it was the very foundation of that order. It was again reiterated that the form of the order was not conclusive of its true nature and the has to examine the entirety of circumstances preceding or attendant on the order of termination. To the same effect is the decision of this in = 1974 (2) SCR 335 = AIR 1974 SC 423, which related to reversion and in which reliance was placed on two earlier decisions in AIR 1962 SC 8 = 1962 (1) SCR 886 and AIR 1962 SC 794 = 1962 Supp. (2) SCR 92. It was, however, laid down that if the order visits the employee with penal consequences, the order would be punitive. It was for this reason that the order of reversion in that case was held to be bad. In the same year, came the decision of this in vs. of Punjab = AIR 1974 SC 2192 = 1975 (1) SCR 814, in which \"Motive\" and \"Foundation\" theory was reiterated and it was laid down that the question whether an order terminating the services of a temporary employee or a probationer was by way of punishment or not would depend on the facts and circumstances of each case. The form of the order, it was observed, was not conclusive and an innocuously worded order, terminating the services of a temporary employee or a probationer may, in the facts of the case, be found to have been passed on account of serious and grave misconduct in utter violation of Article 311(2) of the Constitution. This decision was followed in AIR 1975 SC 1096 = and the termination order, regarding which a concurrent finding of fact was recorded by the trial court, the lower appellate court and also by the High in second appeal that it was punitive in nature, was held to be bad. While the judicial pronouncements stood at that stage, the entire case law was reviewed by this in AIR 1976 SC 2547 = = 1977 (1) SCR 462, in which it was contended that the legal and Constitutional position with regard to an order of termination was not settled as there were conflicting decisions of this on that question. This contention was not accepted and on a review of the entire case law, including the Seven- Judge Bench decision in 's case (supra), it was laid down that the has consistently held that the \"motive\", in passing an order of termination or reversion, operating in the minds of the . was not a relevant factor for determining whether the order was passed by way of punishment. What was determinative of the true nature of the order was not its exterior form but the \"foundation\" on which it was based. If misconduct or negligence was the foundation of the order of termination, or for that matter, reversion, the order would be punitive in nature. The also referred to the decision in = AIR 1976 SC 1766 = 1976 (3) SCR 540, in which it was observed as under : \"We think that the principles involved in applying Article 311(2) having been sufficiently explained in case (AIR 1974 SC 2192) (supra) it should no longer be possible to urge that case (supra) could give rise to some misapprehension of the law. Indeed, we do not think that the principles of law declared and applied so often have really changed. But the application of the same law to the different circumstances and facts of various cases which have come up to this could create the impression sometimes that there is some conflict between different decisions of this . Even where there appears to be some conflict, it would, we think, vanish when the ratio decidendi of each case is correctly understood. It is the rule deducible from the application of law to the facts and circumstances of a case which constitutes its ratio decidendi and not some conclusion based upon facts which may appear to be similar. One additional or different fact can make a world of difference between conclusions in two cases even when the same principles are applied in each case to similar facts.\" ( Emphasis supplied ) Termination simpliciter of a temporary . servant on the ground of unsuitability does not attract the provisions of Article 16 , nor is the protection under Article 311(2) of the Constitution available to a temporary . servant unless the termination involved \"stigma\", was the dictum laid down by this in = AIR 1981 SC 965 = (1981) 3 SCR 165. = (1980) 1 LLJ 137 = 1980 (2) SCR 146 = AIR 1980 SC 1896, it was laid down that a or is entitled to find out the true nature of the termination order, namely, whether it is punitive or not. In this regard, the form of the order will not be decisive and the can lift the veil to see the true nature of the order. The observed that the substance, not semblance, governs the decision. The further observed that what was decisive was the plain reason for the discharge and not the strategy of a non-enquiry. If the basis was not the misconduct, the order could be saved. The further observed that the mere fact that after being satisfied of the guilt the . abandons the enquiry and proceeds to terminate the services by a simple order, would not be the relevant factor in considering the true nature of the order. Given an alleged misconduct and a live nexus between it and the termination of service, the conclusion would be \"dismissal\" even if full benefits, as on simple termination, are given and non-injurious terminology is used. The tests for determining whether termination was a termination simpliciter or by way of punishment laid down in earlier decisions were reiterated in .) = (1980) 2 LLJ 155 = 1980 (3) SCR 603 = AIR 1980 SC 1242 and . = (1980) 2 LLJ 161 = (1980) LIC 747. The latter was a case of termination simpliciter on account of the drive launched by the Inspector General of Police for weeding out Police Officers who were unsuitable or unfit to be continued in service. On the facts and circumstances of that case, it was held that the question whether the appellant, who was a temporary servant, should be retained in service, directly arose during the drive launched to weed out unsuitable officers and it was for this reason that the termination order was upheld, particularly as there was nothing to show that the termination order was made by way of punishment. In another decision which, incidentally, again is . = AIR 1985 SC 84 = (1985) 2 SCR 1, the held that where the services of a temporary . servant are terminated on the ground that his reputation for corruption makes him unsuitable for retention in the service, the , or for that matter, any statutory employer, must take great care when proceeding to terminate a career on the ground of unsuitability, to ensure that its order is founded on definable material, objectively assessed and relevant to the ground on which the termination is effected. It was observed that the will view with great disfavour any attempt to circumvent the requirement of Article 311(2). = 1984 (2) SCR 453 = AIR 1984 SC 636, it was found on a consideration of the entire record that the real foundation for the order of discharge of the appellant- probationer was the alleged act of misconduct. This, it was observed, made the impugned order punitive in nature and was, therefore, held to be bad. vs. of U.P. & Ors. (1988) 2 LLJ 99 was a case of a temporary Constable in whose services were terminated by an apparently innocuous order. On scrutiny it was found that the services were terminated on account of his alleged participation in activities of unrecognised . The termination order, therefore, was held to be bad as having been passed without following the procedure prescribed under Article 311(2) of the Constitution. . 1987 Supp. SCC 739 = AIR 1987 SC 2408 = 1988 (1) SCR 501, it was held that for finding out the effect of the order of termination, the concept of \"motive\" and \"foundation\" has to be kept in mind. It was further observed that no strait-jacket test can be laid down to distinguish the two, namely, the `motive' and the `foundation'. Whether motive has become the foundation has to be decided by the with reference to the facts of a given case. It was also observed that `motive' and `foundation' are certainly two points of one line - ordinarily apart but when they come together, `motive' gets transformed and merged into `foundation'. It was also observed that since in regard to a temporary employee or an officiating employee an assessment of the service is necessary, merely because the proceeds to make an assessment and records its views, it would not be available to be utilised to make the order of termination, following such assessment, punitive in character. It was observed by this that in the relationship of master and servant there is a moral obligation to act fairly. There should be an assessment of the work of the employee and if any defect is noted in his working, the employee should be made aware of the defect in his work and deficiency in his performance. Defects or deficiency, indifference or indiscretion may be with the employee by inadvertance and not by incapacity to work. Timely communication of the assessment of work in such cases may put the employee on the right track. Without any such communication, it was observed, it would be arbitrary to give a movement order to the employee on the ground of unsuitability. = 1991 (1) SCR 29, which has been relied upon by the High in the impugned judgment, it was held that merely because a preliminary enquiry was held against a temporary . servant, would not be a ground to hold that an order, otherwise innocuous on the face of it, by which the services were terminated, was punitive in nature. The decision in . = 1985 (2) SCR 1 = AIR 1985 SC 84 was held to be per incuriam as in that case, 's case (supra) was not considered, but the did observe that if on an overall assessment of the work and conduct of the employee the authority competent in that behalf to terminate the service, is satisfied that on account of the employee's general unsuitability and inefficiency or misconduct it would not be in the public interest to retain him in service, it may either terminate the services by an innocuous order or may proceed to take punitive action by holding a regular departmental enquiry. The , however, emphasised that the termination has to be in accordance with the terms and conditions of service regulated by relevant rules. 1998 (8) SC 585 = , which related to a probationer, the whole legal position was reviewed by Brother M. , J., in an illuminating and research- oriented judgment and after considering various decisions including the decision in case (supra) and a still later decision in = 1994 (3) Scale 12, so as to trace the development of law relating to this aspect of service jurisprudence, laid down that there has not been any conflict of opinion inter se various judgments including those laying down the \"Motive\" and \"Foundation\" theory. It was held that the question whether the order by which the services were terminated was innocuous or punitive in nature had to be decided on the facts of each case after considering the relevant facts in the light of the surrounding circumstances. Benefit and protection of Article 311(2) of the Constitution is available not only to temporary servants but also to a probationer and the court in an appropriate case would be justified in lifting the veil to find out the true nature of the order by which the services were terminated. The whole case law is thus based on the peculiar facts of each individual case and it is wrong to say that decisions have been swinging like a pendulam; right, the order is valid; left, the order is punitive. It was urged before this , more than once including in case (supra) that there was a conflict of decisions on the question of order being a simple termination order or a punitive order, but every time the rejected the contention and held that the apparent conflict was on account of different facts of different cases requiring the principles already laid down by this in various decisions to be applied to a different situation. But the concept of \"motive\" and \"foundation\" was always kept in view. The important principles which are deducible on the concept of \"motive\" and \"foundation\", concerning a probationer, are that a probationer has no right to hold the post and his services can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post in question. If for the determination of suitability of the probationer for the post in question or for his further retention in service or for confirmation, an enquiry is held and it is on the basis of that enquiry that a decision is taken to terminate his service, the order will not be punitive in nature. But, if there are allegations of misconduct and an enquiry is held to find out the truth of that misconduct and an order terminating the service is passed on the basis of that enquiry, the order would be punitive in nature as the enquiry was held not for assessing the general suitability of the employee for the post in question, but to find out the truth of allegations of misconduct against that employee. In this situation, the order would be founded on misconduct and it will not be a mere matter of \"motive\". \"Motive\" is the moving power which impels action for a definite result, or to put it differently, \"motive\" is that which incites or stimulates a person to do an act. An order terminating the services of an employee is an act done by the employer. What is that factor which impelled the employer to take this action. If it was the factor of general unsuitability of the employee for the post held by him, the action would be upheld in law. If, however, there were allegations of serious misconduct against the employee and a preliminary enquiry is held behind his back to ascertain the truth of those allegations and a termination order is passed thereafter, the order, having regard to other circumstances, would be founded on the allegations of misconduct which were found to be true in the preliminary enquiry. Applying these principles to the facts of the present case, it will be noticed that the appellant, who was recruited as a Constable in the , U.P., had successfully completed his training and had also completed two years of probationary period without any blemish. Even after the completion of the period of probation under Para 541 of Regulations, he continued in service in that capacity. The incident in question, namely, the quarrel was between two other Constables in which the appellant, to begin with, was not involved. When the quarrel was joined by few more Constables on either side, then an enquiry was held to find out the involvement of the constables in that quarrel in which filthy language was also used. It was through this enquiry that appellant's involvement was found established. The termination was founded on the report of the preliminary enquiry as the employer had not held the preliminary enquiry to find out whether the appellant was suitable for further retention in service or for confirmation as he had already completed the period of probation quite a few years ago but was held to find out his involvement. In this situation, particularly when it is admitted by the respondent that the performance of the appellant throughout was unblemished, the order was definitely punitive in character as it was founded on the allegations of misconduct. There is another aspect of the matter. Para 541 of Regulations provides as under : \"541. (1) Recruits will be on probation for a period of two years, except that -- (a) those recruited directly in or will be on probation for three years, and (b) those transferred to will be governed by the directions contained in paragraph 84 of the Police Regulations. If during the period of probation their conduct and work have been satisfactory and they are approved by the Deputy Inspector General of Police at the end of the period of probation for service in the force the Superintendent of Police will confirm them in their appointment. (2) In any case in which either during or at the end of the period of probation, the Superintendent of Police is of opinion that a recruit is unlikely to make a good police officer he may dispense with his services. Before, however, this is done the recruit must be supplied with specific complaints and grounds on which it is proposed to discharge him and then he should be called upon to show cause as to why he should not be discharged. The recruit must furnish his representation in writing and it will be duly considered by the Superintendent of Police before passing the orders of discharge. (3) Every order passed by a Superintendent under sub-paragraph (2) above shall, subject to the control of the Deputy Inspector General, be final.\" Where, therefore, the services of a probationer are proposed to be terminated and a particular procedure is prescribed by the Regulations for that purpose, then the termination has to be brought about in that manner. The probationer-constable has to be informed of the grounds on which his services are proposed to be terminated and he is required to explain his position. The reply is to be considered by the Superintendent of Police so that if the reply is found to be convincing, he may not be deprived of his services. If this procedure is followed and the services are terminated thereafter, it would not amount to a punitive action. The rule being mandatory in nature, compliance thereof would not alter the nature of the order passed against the probationer. This aspect was considered by this in two decisions, namely, (1961) 1 SCR 606 (supra) and (1964) 2 SCR 135 (supra) in terms of Rule 55-B of the Civil Services (Classification, Control & Appeal) Rules, which, in all respects, is akin to Para 541 of Regulations quoted above. Relevant portion of Rule 55-B which was extracted in the case of (supra) is quoted below : \"Where it is proposed to terminate the employment of a probationer, whether during or at the end of the period of probation, for any specific fault or on account of his unsuitability for the service, the probationer shall be apprised of the grounds of such proposal and given an opportunity to show cause against it, before orders are passed by the authority competent to terminate the employment.\" Immediately after quoting the Rule, the observed: \"Notice to show cause whether the employment of the respondent should be terminated was, by Rule 55 B made obligatory.\" The , after considering that the had complied with the requirements of Rule 55-B came to the conclusion that the order of termination of services of the probationer was not punitive in nature. (supra), the , while considering the provisions of Rule 55-B, observed as under : \"Therefore in a case covered by r.55-B all that is required is that the defects noticed in the work which make a probationer unsuitable for retention in the service should be pointed out to him and he should be given an opportunity to show cause against the notice, enabling him to give an explanation as to the faults pointed out to him and show any reason why the proposal to terminate his services because of his unsuitability should not be given effect to. If such an opportunity is given to a probationer and his explanation in reply thereto is given due consideration, there is in our opinion sufficient compliance of r.55-B. Generally speaking the purpose of a notice under r.55-B is to ascertain, after considering the explanation which a probationer may give, whether he should be retained or not and in such a case it would be sufficient compliance with that rule if the grounds on which the probationer is considered unsuitable for retention are communicated to him and any explanation given by him with respect to those ground is duly considered before an order is passed.\" ( Emphasis supplied ) In two other cases, namely, (supra) and vs. of Punjab (supra), the question of termination of services of a probationer was considered and it was laid down that the form of the order was not conclusive and the court could go behind the order to find out the real foundation of that order. 1998 (8) SC 585, which has been decided by Brother , J., was also a case where the services of a probationer were terminated. As we have already seen above, there has been total non-compliance with the provisions of Para 541 of Regulations and services of the appellant were terminated without ever issuing him any notice intimating the grounds on which his services were proposed to be terminated nor was his explanation ever obtained. The services were terminated because he was found involved in a quarrel between two other Police Constables. For the reasons stated above, the appeal is allowed, the impugned judgment passed by the High is set aside and that of the U.P. Public Services is restored, but without any order as to costs. ", "rights are dismissed. There shall be no order as to costs."], "relevant_candidates": ["0000007060", "0000032468", "0000036830", "0000442187", "0000443172", "0000498117", "0000572415", "0000609478", "0000656567", "0000681422", "0000756364", "0000890488", "0000920129", "0000943173", "0001023697", "0001068923", "0001198034", "0001237844", "0001270113", "0001343955", "0001404216", "0001489350", "0001611594", "0001662853", "0001904388", "0001973416", "0001984082", "0190973290"]} {"id": "0163876967", "text": ["REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NOS.410-411 OF 2012 \u2026 APPELLANT VERSUS STATE OF MADHYA PRADESH \u2026 RESPONDENT J U D G M E N T ", ", J. ", "These appeals are directed against the common impugned judgment dated 24th March, 2011 passed by , Principal Seat at Jabalpur, by which upheld the judgment of conviction and sentence for the offences u/s 302, 307, 394, 397 and 450 IPC , as follows: ", "|Section |Sentence imposed | |For offence under Section 302 |Sentenced to death. | |(on two counts); | | |For offence under Section 307 |Sentence for life on each count | |(on two counts); |with fine of Rs.10,000/- each on | | |failure of payment RI for two years| | |each. | ", "|For offence under Section 394 read |RI for ten years on each count with| |with Section 397 (on four counts); |fine of Rs.5,000/- each on failure | | |of payment further RI for one year | | |each. | |For offence under Section 450 . |RI for ten years with fine of | | |Rs.5,000/-. On failure of payment, | | |further RI for one year. | ", "2. The learned counsel for the appellant assailed the conviction, inter alia, on the following grounds: ", "(a) The trial was not fair as the appellant was not given an opportunity to defend by the counsel of his choice. ", "(b) gravely erred in placing implicit reliance on the statement of (PW-4) and (PW- ", "3) and on the evidence of recovery of the ornaments and other articles from the possession of the appellant. ", "(c) The death sentence awarded by as confirmed by is not justified, as no case of rarest of the rare is made out. ", "3. The case of the prosecution is that the accused- was known to the family of . including his wife, , son , and daughters viz. @ and . On 7th May, 2010, accused came to their house in Sector No.12, Quarter No.B-664, N.C.L. Colony, Singrauli at about 2 p.m. He had a chat with Begum (deceased) for about 30 minutes. In the same room besides her @ Khatoon(PW-4) and (PW-3) were also present. (deceased), son of Begum was sleeping in the bedroom. After accused left, Begum (deceased) started offering , @ went to bathroom to take bath and was sitting in the outside room. After sometime, accused came back and knocked the door; opened the door and the accused came inside. At that time @ came out of the bathroom and saw accused talking to in the outside room, at that moment, the accused suddenly pulled out an iron hammer from his T-shirt and hit on the head of Parween two-three times with hammer. screamed and became unconscious. The accused, thereafter, with intention to kill Begum and also hit them with hammer on their heads, because of which both fell down and became unconscious. After that accused hit @ by the hammer on her head with an intention to kill her resultantly \u2019s head got fractured. Thereafter, the accused opened the almirah, suitcases and boxes and looted two gold chains, one pair of tops, one pair of bali, one pair of jhala, three rings, one nose pin and four pairs of silver anklets, artificial jewellery etc. and Rs. 23,000/- cash of Begum. He also took out four brass bangles from the hands of Begum. As a result of assault Begum died on the spot. On hearing shrieks of @ , (PW-1), (PW-5) and other people of the colony came. At the time of incident, . (PW-2) was on duty and on receiving the news he came to the place of incident and took @ , and to Nehru Hospital. ", "4. On the basis of the report, Ext.P-10, of @ Razia Khatoon(PW-4), a case Crime No.0/10 was registered under Section 302 , 307 , 450 , 394 & 397 at the Police Station Vindhya Nagar. After receiving the news of the death of and , (PW-13) recorded the marg intimation of Ext.P-24 & 25 in Police Chauki Jayant, P.S. Vindhya Nagar and the marg intimation-Ext.P/10 was sent to the concerned Police Station, on the basis of which Crime No.Ka-0-304/10 was registered at P.S. Baidhan and investigation was started. ", "5. Sub-Inspector, (PW-12), on the same day, went at the spot and prepared the inquest memo of the body of (Ext.P/12).The dead body of was sent for postmortem examination. After conducting inquest proceedings in respect of the dead body of , the same was also sent for postmortem examination. Dr. ) examined the injuries of and and found injuries on their heads. The injuries, grievous in nature, were dangerous to life. ", "6. Dr. (PW-10) conducted autopsy of the body of . He found three injuries on her skull, skull bones were fractured. He submitted his postmortem report-Ext.P/19. In his opinion, death of the deceased was homicidal in nature. Dr. (PW-10) also conducted autopsy of body of and found two injuries on his head. There was depressed fracture of skull bone underneath the injuries. In his opinion, death of the deceased was homicidal in nature. Postmortem report of is Ext.P/20. ", "7. (PW-11) was the Investigation Officer, who on the same night apprehended the accused from Khariya Chowk and recovered Rs.23,020/- from the pocket of his pants. On the information given by the appellant under Section 27 of the Indian Evidence Act, he recovered stolen articles, iron hammer and blood stained clothes from the house of the accused situated in N.C.L. Colony. The recovered articles were identified by (PW.2) and (PW-4). ", "8. After due investigation, the chargesheet was filed and the case was committed for trial. The appellant denied the guilt and pleaded false implication but he did not adduce any evidence in his defence. ", "9. Prosecution examined altogether 16 witnesses and produced a number of documentary evidence to prove their case. The Trial court on the appreciation of the evidence held the accused guilty and convicted and sentenced him for the offence as mentioned above, which was affirmed by . ", "10. Dr. (PW-10), who performed the postmortem examination of the body of found the following injuries on her body: ", "\u201c(1)Reddish contusion 5 cm x 4 cm present on right side of forehead. Red blood clot was deposited under the skin. ", "(2)Lacerated wound 5 cm x 3 cm x bone deep on middle of the forehead posteriorly with depressed multiple fractures of underlying bone. ", "(3) Lacerated wound 4 cm x 3 cm x bone deep on left occipito parietal region of head with depressed multiple fractures of underlying bones. ", "In his opinion, death of deceased had occurred as a result of coma due to head injury. Death was homicidal in nature. The postmortem examination report (P/19) was written and signed by him.\u201d On the same day, Dr. (PW-10) performed postmortem examination of the body of deceased and found the following injuries: ", "\u201c(1) Lacerated wound on left parietal region of head 2 cm x 1 cm x bone deep with peripheral contusions in size of 6 cm x 5 cm. subcutaneous reddish blood clot with multiple depressed fractures of underlying bone. ", "(2) Reddish contusion on occipital region of head 5 cm x 4 cm in size with subcutaneous reddish blood clot with depressed fracture of underlying bone. ", "In his opinion, death of had occurred as a result of coma due to injury. Death was homicidal in nature.\u201d ", "11. From the inquest memorandums (Ext.P/6 and P/12) and the evidence of Sub-Inspector, J.S. Paraste (PW-12) and constable (PW- ", "15), who conducted inquest, it was established that and died of homicidal injuries found on their bodies. ", "12 (PW-11), Investigation Officer arrested the accused from Khariya Chowk, Main Road, PS Shakti Nagar in the presence of witnesses (PW-6) and Yunus (PW-7) and seized money from him and prepared seizure memo-ExtP-15 After arrest the accused was brought to the Police Station-Jayant and was interrogated in front of the witnesses During interrogation accused gave information regarding jewellery and the hammer which was used in committing crime; the clothes, hammer and jewellery were seized from the house of the accused vide memorandum-ExtP-13, written by (PW-11) stated that he went to the house of accused and seized the jewellery article from articles-A1 to A 24; seizure memo-ExtP-14 was prepared He had also stated that blood stained clothes and iron hammer were seized in the presence of witnesses vide seizure memo-ExtP-16 ", "13. (PW.6) and (PW-7) are the independent witnesses of the memorandum of seizure. In their statement they deposed that the arrested the accused at Khariya Chowk in their presence and seized about Rs. 23,000/-from him and the accused was brought to the Station-Jayant for inquiry. At the Station the accused disclosed about the jewellery, hammer and clothes, on the basis of which jewellery, hammer and clothes were seized. Both the witnesses thereby have corroborated the statement of ). During the cross- examination both the witnesses, PW-6 and PW-7 admitted that they visited the house of . There is no infirmity or contradiction in the statements of the two witnesses. ", "14. (PW-9) stated that on 8th July, 2010 at the request of the he conducted identification of the jewellery at stadium Baidhan and prior to the identification had handed over other jewellery in a sealed packet. He mixed it and then conducted the identification and during the identification . and had identified the original jewellery. After identification he had handed over the jewellery in a packet to the who were standing outside the stadium. ", "15. ) and (PW-4), daughters of deceased and sisters of deceased are the injured eyewitnesses; both of them received serious injuries at the incident. Both the witness PW-3 and PW-4 clearly stated that sometime before the incident, the accused had come to their house and he being a prior acquaintance, the accused had taken refreshment sitting with their mother and also was talking with her. From the statements of both the witnesses the facts of the accused coming to their house before the incident, taking refreshment with deceased and talking with her are proved, which is also corroborated from the FIR-Ext.P-10. Both these witnesses have also stated that in the past the accused used to come for tuitions and their mother used to treat the accused like her son and the photograph of the accused was also hanging in their house. From the aforesaid evidence, it is clear that the PW-3 and PW-4 were in a position to identify the accused, the accused was well acquainted with both PW-3 and PW-4 since long. The prosecution proved beyond reasonable doubt that even prior to the incident the accused was known to the deceased and the injured witnesses PW-3 and PW- 4 and on the date of incident also, the accused had come to their house and had taken refreshments and had talks. ", "16. (PW-3) and (PW-4) in their statements clearly stated that initially the accused left their house and after sometime the accused had come again to their house. On opening the door he had hit the hammer on the head of , who had come out after hearing screams of and then after entering into the bedroom he hit deceased on her head. From the statement of (PW-4), it is also clear that the accused after entering the store-room had hit on her head and then the accused had taken out the money and jewellery from the almirah, suitcase, box and attach\u00e9, etc. In paragraph 7 (PW-3), has also stated that she had seen the accused hit on his head but she could not see as to who hit and her mother. Such statement cannot be stated to be contradiction and does not adversely affect the case of the prosecution in view of the deposition made by (PW-4). ", "17. Similarly, from the statement of (PW-4), we find that the accused after hitting , and took away jewellery, cash amount and the bangles of and then he ran away after bolting the door from outside. ", "18. PW-4 further deposed that after the accused run away by bolting the door from outside she went into the balcony and stop (PW-1), who at that time had taken out his vehicle and was going somewhere. Then, the door was got open. Statements of (PW-4) about shouting from the balcony stopping (PW-1) and then opening of the door by are also proved by the statement of Ramesh (PW-1), who made similar statement. ", "19. In view of the statements made by the injured witnesses (PW-3) and (PW-4) as corroborated by the postmortem report, seizure of jewellery, hammer, blood stained clothes (Ex.P-13)and statement of (PW-11), as corroborated by (PW-6) and (PW-7), rightly held the accused guilty for the offences u/s 302, 307, 394 r/w 397 and 450 IPC . ", "20. First ground taken by the learned counsel for the appellant with respect to denial of opportunity to the accused to be defended by a counsel of his choice is incorrect as from the record we find that proper opportunity was given to the accused. ", "21. The order sheets of dated 25th September, 2010 shows that the appellant made an application that appellant wanted to get the witnesses cross-examined by senior Advocate, Mr. , therefore, he requested to defer the cross-examination of the witnesses. The Trial court rejected the application. On 27th September, 2010, counsel of the accused, Mr. , who was defending the accused, refused to defend him. then appointed one Mr. , Advocate, as defence counsel on expenses. ", "22. On perusal of records it transpires that , Advocate had filed his Vakalatnama for representing the appellant. On 25th September, 2010, when the case was fixed for evidence though he was competent to cross-examine the witnesses but he moved the application to defer the cross-examination of the witnesses on the ground that the accused wanted to engage senior Advocate, Mr. . However, neither was present nor any Vakalatnama was filed on his behalf. On that day, two witnesses, namely (PW-1) and . (PW-2) were examined and Mr. , Advocate had cross- examined those witnesses. None of those witnesses were eyewitnesses; in fact one of them, (PW-1) was declared hostile. On 27th September, 2010, Mr. refused to appear on behalf of the appellant, when the appellant on asking expressed his inability to appoint any counsel. Since there was none to represent the accused, appointed Mr. , Advocate, to pursue the appeal. The appellant has failed to show that Mr. was not competent or was incapable of handling the case. On the contrary from the cross-examination of the witnesses made by Mr. we find that he was competent to deal with the case. Even on the next date neither Mr. , Advocate appeared nor he filed his Vakalatnama. ", "23. The next question is whether death sentence awarded to the appellant is excessive, disproportionate on the facts and circumstance of the case, i.e. whether the present case can be termed to be a rarest of the rare case. ", "24. Guidelines emerged from , 1980 (2) SCC 684 were noticed by this Court in , 1983 (3) SCC 470. In the said case the Court observed: ", "38. In this background the guidelines indicated in case, 1980 (2) SCC 684 will have to be culled out and applied to the facts of each individual case where the question of imposing of death sentence arises. The following propositions emerge from case(supra): ", "\u201c(i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability. ", "(ii) Before opting for the death penalty the circumstances of the \u2018offender\u2019 also require to be taken into consideration along with the circumstances of the \u2018crime\u2019. ", "(iii) Life imprisonment is the rule and death sentence is an exception. In other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided, the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances. ", "(iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised. ", "39. In order to apply these guidelines inter alia the following questions may be asked and answered: ", "(a) Is there something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence? ", "(b) Are the circumstances of the crime such that there is no alternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender? ", "40. If upon taking an overall global view of all the circumstances in the light of the aforesaid proposition and taking into account the answers to the questions posed hereinabove, the circumstances of the case are such that death sentence is warranted, the court would proceed to do so.\u201d ", "25. In Ronny alias , 1998 (3) SCC 625, this Court held: ", "\u201c45. These principles have been applied in various judgments of this Court thereafter and it is unnecessary to multiply the cases here. Whether the case is one of the rarest of the rare cases is a question which has to be determined on the facts of each case. Suffice it to mention that the choice of the death sentence has to be made only in the rarest of the rare cases and that where culpability of the accused has assumed depravity or where the accused is found to be an ardent criminal and menace to the society and; where the crime is committed in an organised manner and is gruesome, cold-blooded, heinous and atrocious; ", "where innocent and unarmed persons are attacked and murdered without any provocation, the case would present special reason for purposes of sub-section (3) of Section 354 of the Criminal Procedure Code.\u201d In alias (supra) this noted the law laid-down by this in & . Vs. State of Bihar, , that unless the nature of the crime and circumstances of the offender reveal that criminal is a menace to the society and the sentence of life imprisonment would be altogether inadequate, the should ordinarily pass a lesser punishment and not punishment of death which should be reserved for exceptional case only. Considering the cumulative effect of all the factors, like the offences committed under the influence of extreme mental or emotional disturbance, the young age of the accused, the possibility of reform and rehabilitation, etc. the may convert the sentence into life imprisonment. ", "26. , 2011 (7) SCC 437, this Court made the following observation: ", "\u201c30. The principles governing the sentencing policy in our criminal jurisprudence have more or less been consistent, right from the pronouncement of the judgment of this Court in ,. Awarding punishment is certainly an onerous function in the dispensation of criminal justice. The court is expected to keep in mind the facts and circumstances of a case, the principles of law governing award of sentence, the legislative intent of special or general statute raised in [pic]the case and the impact of awarding punishment. These are the nuances which need to be examined by the court with discernment and in depth. ", "31. The legislative intent behind enacting Section 354(3) CrPC clearly demonstrates the concern of the legislature for taking away a human life and imposing death penalty upon the accused. Concern for the dignity of the human life postulates resistance to taking a life through law\u2019s instrumentalities and that ought not to be done, save in the rarest of rare cases, unless the alternative option is unquestionably foreclosed. In exercise of its discretion, the court would also take into consideration the mitigating circumstances and their resultant effects. ", "32. The language of Section 354(3) demonstrates the legislative concern and the conditions which need to be satisfied prior to imposition of death penalty. The words, \u201cin the case of sentence of death, the special reasons for such sentence\u201d unambiguously demonstrate the command of the legislature that such reasons have to be recorded for imposing the punishment of death sentence. This is how the concept of the rarest of rare cases has emerged in law. Viewed from that angle, both the legislative provisions and judicial pronouncements are at ad idem in law. The death penalty should be imposed in the rarest of rare cases and that too for special reasons to be recorded. To put it simply, a death sentence is not a rule but an exception. Even the exception must satisfy the prerequisites contemplated under Section 354(3) CrPC in light of the dictum of the in ). ", "33. The Constitution Bench judgment of this Court in (supra) has been summarised in para 38 in , , and the following guidelines have been stated while considering the possibility of awarding sentence of death: ( case(supra), SCC p. 489) \u201c(i) The extreme penalty of death need not be inflicted except in gravest cases of extreme culpability. ", "(ii) Before opting for the death penalty the circumstances of the \u2018offender\u2019 also requires to be taken into consideration along with the circumstances of the \u2018crime\u2019. ", "(iii) Life imprisonment is the rule and death sentence is an exception. \u2026 death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime, and provided, and only provided the option to impose sentence of imprisonment for life cannot be conscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances. ", "(iv) A balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances have to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised.\u201d (emphasis supplied) [pic] ", "34. The judgment in ), did not only state the above guidelines in some elaboration, but also specified the mitigating circumstances which could be considered by the while determining such serious issues and they are as follows: (SCC p. 750, para 206) \u201c206. \u2026 \u2018Mitigating circumstances.\u2014In the exercise of its discretion in the above cases, the court shall take into account the following circumstances: ", "(1) That the offence was committed under the influence of extreme mental or emotional disturbance. ", "(2) The age of the accused. If the accused is young or old, he shall not be sentenced to death. ", "(3) The probability that the accused would not commit criminal acts of violence as would constitute a continuing threat to society. ", "(4) The probability that the accused can be reformed and rehabilitated. ", "The shall by evidence prove that the accused does not satisfy Conditions (3) and (4) above. ", "(5) That in the facts and circumstances of the case the accused believed that he was morally justified in committing the offence. ", "(6) That the accused acted under the duress or domination of another person. ", "(7) That the condition of the accused showed that he was mentally defective and that the said defect impaired his capacity to appreciate the criminality of his conduct.\u2019\u201d ", "35. Now, we may examine certain illustrations arising from the judicial pronouncements of this . ", "36. .,, this Court took the view that custodial torture and consequential death in custody was an offence which fell in the category of the rarest of rare cases. While specifying the reasons in support of such decision, the Court awarded death penalty in that case. ", "37. , , this Court also spelt out in paras 56 to 58 that nature, motive, impact of a crime, culpability, quality of evidence, socio-economic circumstances, impossibility of rehabilitation are the factors which the court may take into consideration while dealing with such cases. In that case the friends of the victim had called him to see a movie and after seeing the movie, a ransom call was made, but with the fear of being caught, they murdered the victim. The Court felt that there was no evidence to show that the criminals were [pic]incapable of reforming themselves, that it was not a rarest of the rare case, and therefore, declined to award death sentence to the accused. ", "38. Interpersonal circumstances prevailing between the deceased and the accused was also held to be a relevant consideration in , , where constant nagging by family was treated as the mitigating factor, if the accused is mentally unbalanced and as a result murders the family members. Similarly, the intensity of bitterness which prevailed and the escalation of simmering thoughts into a thirst for revenge and retaliation were also considered to be a relevant factor by this Court in different cases. ", "39. This in Satishbhushan Bariya (supra) also considered various doctrines, principles and factors which would be considered by the s while dealing with such cases. The discussed in some elaboration the applicability of the doctrine of rehabilitation and the doctrine of prudence. While considering the application of the doctrine of rehabilitation and the extent of weightage to be given to the mitigating circumstances, it noticed the nature of the evidence and the background of the accused. The conviction in that case was entirely based upon the statement of the approver and was a case purely of circumstantial evidence. Thus, applying the doctrine of prudence, it noticed the fact that the accused were unemployed, young men in search of job and they were not criminals. In execution of a plan proposed by the appellant and accepted by others, they kidnapped a friend of theirs. The kidnapping was done with the motive of procuring ransom from his family but later they murdered him because of the fear of getting caught, and later cut the body into pieces and disposed it off at different places. One of the accused had turned approver and as already noticed, the conviction was primarily based upon the statement of the approver.\u201d \u201c41. The above principle, as supported by case illustrations, clearly depicts the various precepts which would govern the exercise of judicial discretion by the courts within the parameters spelt out under Section 354(3) CrPC. Awarding of death sentence amounts to taking away the life of an individual, which is the most valuable right available, whether viewed from the constitutional point of view or from the human rights point of view. The condition of providing special reasons for awarding death penalty is not to be construed linguistically but it is to satisfy the basic features of a reasoning supporting and making award of death penalty unquestionable. The circumstances and the manner of committing the crime should be such that it pricks the judicial conscience of the court to the extent that the only and inevitable conclusion should be awarding of death penalty.\u201d ", "27. This Court in and others vs. State of Chattisgarh, 2012 (4) SCC 257, noticed the aggravating and mitigating circumstances with respect to a crime and held as follows: ", "\u201c76. The law enunciated by this Court in its recent judgments, as already noticed, adds and elaborates the principles that were stated in Bachan Singh,(1980) 2 SCC 684, and thereafter, in Machhi Singh,(1983) 3 SCC 470. The aforesaid judgments, primarily dissect these principles into two different compartments\u2014one being the \u201caggravating circumstances\u201d while the other being the \u201cmitigating circumstances\u201d. The court would consider the cumulative effect of both these aspects and normally, it may not be very appropriate for the court to decide the most significant aspect of sentencing policy with reference to one of the classes under any of the following heads while completely ignoring other classes under other heads. To balance the two is the primary duty of the court. It will be appropriate for the court to come to a final conclusion upon [pic]balancing the exercise that would help to administer the criminal justice system better and provide an effective and meaningful reasoning by the court as contemplated under Section 354(3) CrPC. ", "Aggravating circumstances (1) The offences relating to the commission of heinous crimes like murder, rape, armed dacoity, kidnapping, etc. by the accused with a prior record of conviction for capital felony or offences committed by the person having a substantial history of serious assaults and criminal convictions. (2) The offence was committed while the offender was engaged in the commission of another serious offence. (3) The offence was committed with the intention to create a fear psychosis in the public at large and was committed in a public place by a weapon or device which clearly could be hazardous to the life of more than one person. (4) The offence of murder was committed for ransom or like offences to receive money or monetary benefits. (5) Hired killings. ", "(6) The offence was committed outrageously for want only while involving inhumane treatment and torture to the victim. (7) The offence was committed by a person while in lawful custody. ", "(8) The murder or the offence was committed to prevent a person lawfully carrying out his duty like arrest or custody in a place of lawful confinement of himself or another. For instance, murder is of a person who had acted in lawful discharge of his duty under Section 43 CrPC. (9) When the crime is enormous in proportion like making an attempt of murder of the entire family or members of a particular community. ", "(10) When the victim is innocent, helpless or a person relies upon the trust of relationship and social norms, like a child, helpless woman, a daughter or a niece staying with a father/uncle and is inflicted with the crime by such a trusted person. ", "(11) When murder is committed for a motive which evidences total depravity and meanness. ", "(12) When there is a cold-blooded murder without provocation. (13) The crime is committed so brutally that it pricks or shocks not only the judicial conscience but even the conscience of the society. ", "Mitigating circumstances (1) The manner and circumstances in and under which the offence was committed, for example, extreme mental or emotional disturbance or extreme provocation in contradistinction to all these situations in normal course. ", "(2) The age of the accused is a relevant consideration but not a determinative factor by itself. ", "[pic] (3) The chances of the accused of not indulging in commission of the crime again and the probability of the accused being reformed and rehabilitated. ", "(4) The condition of the accused shows that he was mentally defective and the defect impaired his capacity to appreciate the circumstances of his criminal conduct. ", "(5) The circumstances which, in normal course of life, would render such a behaviour possible and could have the effect of giving rise to mental imbalance in that given situation like persistent harassment or, in fact, leading to such a peak of human behaviour that, in the facts and circumstances of the case, the accused believed that he was morally justified in committing the offence. ", "(6) Where the court upon proper appreciation of evidence is of the view that the crime was not committed in a preordained manner and that the death resulted in the course of commission of another crime and that there was a possibility of it being construed as consequences to the commission of the primary crime. ", "(7) Where it is absolutely unsafe to rely upon the testimony of a sole eyewitness though the prosecution has brought home the guilt of the accused. ", "While determining the questions relating to sentencing policy, the laid down the Principles at paragraph 77 which reads as follows: ", "\u201c77. While determining the questions relatable to sentencing policy, the court has to follow certain principles and those principles are the loadstar besides the above considerations in imposition or otherwise of the death sentence. Principles (1) The court has to apply the test to determine, if it was the \u201crarest of rare\u201d case for imposition of a death sentence. (2) In the opinion of the court, imposition of any other punishment i.e. life imprisonment would be completely inadequate and would not meet the ends of justice. ", "(3) Life imprisonment is the rule and death sentence is an exception. ", "(4) The option to impose sentence of imprisonment for life cannot be cautiously exercised having regard to the nature and circumstances of the crime and all relevant considerations. (5) The method (planned or otherwise) and the manner (extent of brutality and inhumanity, etc.) in which the crime was committed and the circumstances leading to commission of such heinous crime.\u201d ", "28. Recently, this Court in , 2013 (5) SCC 546, dealing with a case of death sentence, observed: ", "\u201c52. Aggravating circumstances as pointed out above, of course, are not exhaustive so also the mitigating circumstances. In my considered view, the tests that we have to apply, while awarding death sentence are \u201ccrime test\u201d, \u201ccriminal test\u201d and the \u201cR-R test\u201d and not the \u201cbalancing test\u201d. To award death sentence, the \u201ccrime test\u201d has to be fully satisfied, that is, 100% and \u201ccriminal test\u201d 0%, that is, no mitigating circumstance favouring the accused. If there is any circumstance favouring the accused, like lack of intention to commit the crime, possibility of reformation, young age of the accused, not a menace to the society, no previous track record, etc. the \u201ccriminal test\u201d may favour the accused to avoid the capital punishment. Even if both the tests are satisfied, that is, the aggravating circumstances to the fullest extent and no mitigating circumstances favouring the accused, still we have to apply finally the rarest of the rare case test (R-R test). R-R test depends upon the perception of the society that is \u201csociety- centric\u201d and not \u201cJudge-centric\u201d, that is, whether the society will approve the awarding of death sentence to certain types of crimes or not. While applying that test, the court has to look into variety of factors like society\u2019s abhorrence, extreme indignation and antipathy to certain types of crimes like sexual assault and murder of intellectually challenged minor girls, suffering from physical disability, old and infirm women with those disabilities, etc. Examples are only illustrative and not exhaustive. The courts award death sentence since situation demands so, due to constitutional compulsion, reflected by the will of the people and not the will of the Judges.\u201d ", "29. In the present case the appellant is an educated person, he was about 26 years old at the time of committing the offence. The accused was a tutor in the family of the deceased-Noorjahan. He was in acquaintance with the deceased as well as (PW-3) and (PW-4). There is nothing specific to suggest the motive for committing the crime except the articles and cash taken away by the accused. It is not the case of the prosecution that the appellant cannot be reformed or that the accused is a social menace. Apart from the incident in question there is no criminal antecedent of the appellant. It is true that the accused has committed a heinous crime, but it cannot be held with certainty that this case falls in the \u201crarest of the rare category\u201d. On appreciation of evidence on record and keeping in mind the facts and circumstances of the case, we are of the view that sentence of death penalty would be extensive and unduly harsh. ", "30. Accordingly, we commute the death sentence of appellant to life imprisonment. The conviction and rest part of the sentence are affirmed. Appeals are partly allowed. ", "\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. ", "(H.L. DATTU) \u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. ", "(SUDHANSU JYOTI MUKHOPADHAYA) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. ", "() NEW DELHI, JULY 3, 2014."], "relevant_candidates": ["0000307021", "0000501198", "0000545301", "0000717201", "0001201493", "0001312651", "0001460234", "0001724804", "0079577238"]} {"id": "0178226192", "text": ["JUDGMENT , J. ", "1. Delay Condoned. ", "2. Leave granted. ", "3. Challenge in these appeals is to the direction given to the by of to dispose of application for renewal filed by the respondents expeditiously, in the background of views expressed on the factual aspects. ", "4. Shorn of theatric and bereft of legal controversy which constitutes bulk of the armoury as regards attack to the legality of judgment of by which four Letters Patent Appeals were disposed of, the factual background is as follows: ", "5. The respondents applied for and were granted permits under the provisions of the Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981 (in short 'the Act') and the Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Rules, 1982 (in short 'the Rules'). Permits were granted in the Exclusive Economic Zone of India in the prescribed form. The said permit authorized the applicants respondents to obtain on lease and operate Foreign Deep Sea Fishing Vessels in terms of the Act and the Rules. The permit was, however, not renewed after its period of initial currency. Stand of the applicants was that in each case permit was valid for a period of 15 years from the date of issue, since they were granted in accordance with the Government of India's policy relating to fishing of Deep Sea Resources in India Exclusive Economic Zone by leased Foreign Deep Sea Fishing Vessels, and were operative for a period of 15 years. There is a marked distinction between periods have been prescribed for currency of the concerned permits. Though applications for renewal were filed with requisite fees, no express order was passed in any of the cases declining to grant permit. However, pay orders covering renewal fee were returned to the applicants. Grievance is made that no reason has been indicated and, there is also no reference to any policy decision for not effecting the renewal. The applicants filed writ applications before . The applications were taken up by a learned Single Judge. With reference to earlier order passed by in the case of and Anr. v. ", " and the counter affidavit filed by the present appellants, the writ applications were dismissed. In the said case noticed that renewal of permission was not a matter of right, since there was change in policy. In larger public interest, the deep sea fishing policy had to be reframed. was appointed which submitted its recommendations, and in that view of the matter there was no question of directing renewal of the permits. It was noticed by the that having regard to the policy decision adopted by the of India in the year 1996 pursuant to the report of constituted under the Chairmanship of Mr. , the was in the process of formulating a new deep sea fishing policy. In view of the non-success before the learned Single Judge, the applicants filed Letters Patent Appeals before the High , wherein the impugned judgment has been passed. The High , inter alia, came to the conclusions that renewal of the permit is a valuable right; it could be refused only on cogent and valid grounds; though plea was taken that the renewal period was mentioned by mistake same appears to be an afterthoughts, and the concerned authorities were required to consider the prayer for renewal of the permit in accordance with law. The authorities were directed to pass an appropriate order thereupon. Principles of natural justice were required to be applied. Though licence has not been granted for a period of 15 years, there has been a legitimate expectation that renewal shall be granted. Policy decision which is contrary to the statute cannot be upheld. The earlier decision in (supra) was not a binding precedent, as several relevant provisions had not been brought to the notice of hearing the case. ", "6. However, it was held that in the circumstances relief was not available by issuing & Mandamus directing the concerned officials to renew the licence. Consideration was to be made by the statutory authorities at the first instance. With the aforesaid conclusions, the authorities were directed to consider the applications and take a decision within a period of six weeks from the date of communication. ", "7. In support of the appeals, Mr. , learned Solicitor General submitted that has lost sight of the fact that if the license/permit is renewed, it would be only by going against the specific stipulations in the policy decision. was not justified in its conclusion that there was legitimate expectation or promissory estoppel involved, and that the policy decision was contrary to the statute. Reference was made to the recommendations made by which specifically prohibit renewal, extension of existing licence and put prohibition on issuance of permits in future for fishing to joint venture/charter/lease/test fish vessels. The recommendations were approved and accepted. It was pointed out that fishing in Indian Exclusive Zone by foreign vessels is governed and regulated by the Act and the Rules thereunder while fishing by Indian vessels in the said zone is governed by executive orders. ", "8. Responding to the aforesaid pleas, learned counsel for the respondents submitted that judgment is flawless and suffers from no infirmity to warrant interference. It was rightly turned down the plea that the authorities were not bound by the period indicated in several documents so far as currency of the licence/permits is concerned. Merely because licence was not indicated to be valid for a period of 15 years that did not clothe the authorities with any jurisdiction to refuse renewal. It was highlighted that in respect of 32 vessels a departure was made from the so-called policy and they were permitted to fish in the concerned zone. This clearly establishes the discrimination, and is impermissible in law. The 32 vessels are secondhand deep sea fishing vessels and could not have been imported except against vessel specific import licence granted by Director General of Foreign Trade, which has not been granted though it is a pre-requisite for import. The so-called import, have been made by companies, which were not in existence at the time permits were granted to operate. One of the companies which has been given permission to operate is only with no financial resources. The factual aspects brought on record clearly establish that illegally and without any justifiable reasons, they have been permitted to operate, while the same benefit was not extended to the respondents herein. I was further pointed out that has not in reality granted any relief to which the applicants were entitled in law. It has merely directed that the applications for renewal were to be disposed of expeditiously preferably within a period of six weeks from the date of communication of its order. ", "9. By way of reply to the submissions made by learned counsel for the respondents, learned Solicitor General submitted that directions were not merely to consider. Had it been so, and the matter would have been left open to be decided in accordance with law, there could have been no difficulty. But in view of the specific findings recorded by on several aspects more particularly policy being opposed to statute, and/or that the documents established entitlements for renewal, the exercise by the concerned authorities in dealing with the applications for renewal would amount to an empty formality. Further, 32 vessels to which reference has been made stood on entirely different footing. The vessels in question were imported under the prevailing policy of the and were registered by under the Merchant Shipping Act , 1958. The said vessels were not in any way connected with the cases at hand which relate to lease and charter permits. The aforesaid 32 vessels were imported as per EXIM policy of the . The said EXIM policy in the year 2000-2001 allowed import of deep sea fishing vessels by surrendering special import licence which had been done in the case of the concerned vessels and, therefore, the licences on those cases have no relevance so far as the present appeals are concerned. Even if it is conceded for the sake of argument that there was anything improper in the permission granted it may be ground for taking action against the concerned vessels, but it cannot be a ground to renew licence of the applicants. ", "10. Though there can be quarrel with the proposition that renewal of a permit carries with it a valuable right, it cannot be lost sight of that for outweighing reasons of public interest renewal can be refused. It is not in dispute that licences have not been granted for a period of 15 years. If at the time when the matter is taken up for considering whether renewal to be granted, there is a change in policy; it cannot be said that the right is defeated by introduction of a policy. In such an event, the question of applying doctrine of legitimate expectation or promissory estoppel looses significance. It has not been disputed that in fact the policy decision exists. But the stand of the respondents is that it cannot outweigh the legitimate expectation or the unbuilt rights. Additionally it is submitted that the issue has to be considered in the background of 32 vessels referred to above. ", "11. Rival contentions need to be cogitated. ", "12. Legitimacy of the policy decision has not been questioned by the respondents. What is highlighted is that notwithstanding the policy their rights are unaffected. ", "13. Doctrines of promissory estoppel and legitimate expectation cannot came in the way of public interest. Indisputably, public interest has to prevail over private interest. The case at hand shows that a conscious policy decision has been taken and there is no statutory compulsion to act contrary. In that context, it cannot be said that respondents have acquired any right for renewal. was not justified in observing that the policy decision was contrary to statute and for that reason direction for consideration of the application for renewal was necessary. Had not recorded any finding on the merits of respective stands, direction for consideration in accordance with law would have been proper and there would not have been any difficulty in accepting the plea of the learned counsel for the respondents. But having practically foreclosed any consideration by the findings recorded, consideration of the application would have been mere formality and grant of renewal would have been the inevitable result, though it may be against the policy decision. That renders judgment indefensible. ", "14. What remains now to be considered, is the effect of permission granted to the 32 vessels. As highlighted by learned counsel for the appellants, even if it is accepted that there was any improper permission, that may render such permissions vulnerable so far as 32 vessels are concerned. But it cannot come to the aid of respondents. It is not necessary to deal with that aspect because two wrongs do not make one right. A party cannot claim that since something wrong has been done in another case; direction should be given for doing another wrong. It would not be setting a wrong right, but would be perpetuating another wrong. In such matters there is no discrimination involved. The concept of equal treatment on the logic of Article 14 of the Constitution of India, 1950 (in short 'the Constitution') cannot be pressed into service in such cases. What the concept of equal treatment presupposes is exis ence of similar legal foothold. It does not countenance repetition of a wrong action to bring both wrongs or par. Even if hypothetically it is accepted that wrong has been committed on some other cases by introducing a concept of negative equality respondents cannot strengthen their case. They have to establish strength of their case on some other basis and not by claiming negative equality. ", "15. It is (SIC) law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the , even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. ", "16. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily on by any ulterior criteria. The wide sweep of Article 14 and the requirement of every action qualifying for its validity on this touchstone irrespective of the field of activity of the is an accepted tenet. The basic requirement of Article 14 is fairness in action by the state, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the must act validly for a discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness. ", "17. Where a particular mode is prescribed for doing an act and there is not impediment in adopting the procedure, the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. ", "18. The courts as observed in are kept out of lush field of administrative policy except where policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates or where a decision made in purported exercise of power is such that a repository of the power acting reasonably and in good faith could not have made it. But there has to be a word of caution. Something overwhelming must appear before the will intervene. That is and ought to be a difficult onus for an applicant to discharge. The courts are not very good at formulating or evaluating policy. Sometimes when the s have intervened on policy grounds the 's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. ", "19. As Professor points out (in Administrative Law by H.W.R. 6th Edition) there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. The reasonableness in administrative law must, therefore, distinguish between proper course and improper abuse of power. Nor is the test 's own standard of reasonableness as it might conceive it in a given situation. The point to note is that the thing is not unreasonable in the legal sense merely because the thinks it to be unwise. ", "20. , it was observed that decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest where the doctrine of legitimate expectation can be applied. If it is a question of policy, even by ways of change of old policy, the cannot intervene with the decision. In a given case whether there are such facts and circumstance giving rise to legitimate expectation, would primarily be a question of fact. ", "21. As was observed in . ", "/SC/0326/1999, the change in policy can defeat a substantive legitimate expectation if it can be justified on \"Wednesbury reasonableness\". The decision maker has the choice in the balancing of the pros and cons relevant to the change in policy. It is, therefore, clear that the choice of policy is for the decision maker and not the . The legitimate substantive expectation merely permits the to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. A claim based on merely legitimate extension without anything more cannot ipso facto give a right. Its uniqueness lies in the fact that it covers the entire span of time: present, past and future. How significant is the statement that today is tommorrows' yesterday. The present is an we experience it, the past is a present memory and future is a present expectation. For legal purposes, expectation is not same anticipation. Legitimacy of an expectation can be inferred only if it is founded on the sanction of law. ", "22. As observed in Attorney General for New Southwale v. [1990 (64) Australian LJR 327) 'to strike the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism. Moreover, the negotiation of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law; 'If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased gross abuse of power or violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider, but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognized general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is 'not the key which unlocks the treasure of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits', particularly, when the element of speculation and uncertainty is inherent in that very concept. As cautioned in Attorney General for New Southwale's case the should restrain themselves and respect such claims duly to the legal limitations. It is a well-meant caution. Otherwise, a resourceful litigant having vested interest in contract, licences, etc. can successfully indulge in getting welfare activities mandated by directing principles thwarted to further his own interest. The caution, particularly in the changing scenario becomes all the more important. ", "23. If the acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed. ", "24. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interest of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable nearly because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Cancalization of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. ( . ", "/ , . ", "/ . (AIR 1997 SC 129). ", "25. As noted above, the appellants have relied upon the change in Government policy prescribing that there shall be no grant of renewal/extension for charter/lease permits. Learned Solicitor General has stated that if respondents apply in terms of prevailing EXIM policy, as was done by the affronted 32 vessels, due consideration in accordance with law shall be made. ", "26. Keeping in view the analysis made of legal positions, and in the absence of any material to discount legitimacy of policy, the respondents have not made out a case for interference. ", "27. In the aforesaid background the residual plea of the respondents regarding legitimate expectation is also sans merit. ", "28. The appeals deserve to be allowed; which we direct. Costs made easy."], "relevant_candidates": ["0000079972", "0000126971", "0000349643", "0000958552", "0001507940", "0001758272", "0001964881"]} {"id": "0181810880", "text": ["CASE NO.: Appeal (civil) 6913-6914 of 2003 PETITIONER: RESPONDENT: Vs. State of Karnataka and Ors. DATE OF JUDGMENT: 02/09/2003 BENCH: JUDGMENT: ", "J U D G M E N T (Arising out of SLP(C) Nos. 8113-8114/2002) , J Leave granted. ", "Both these appeals have common factual matrix, and legal panorama and, therefore, are dealt with by this common judgment. Factual backdrop in a nutshell is as follows: ", " (hereinafter referred to as the 'Corporation') invited applications for recruitment to two posts of Manager (Finance and Accounts) by advertisement dated 18.7.1995. The advertisement inviting applications for the two posts of Manager (Finance and Accounts), one post for general and one post of scheduled caste, prescribed the requisite educational qualification. It was stipulated in the advertisement that the age and other qualifications were to be reckoned as of 31.7.1995. It was also indicated that the applications in the prescribed format with complete information should reach the prescribed authority before 29th July, 1995 and incomplete applications and applications without necessary enclosures were to be rejected. ", "Appellant and respondents 4 and 5 were applicants in response to the advertisement. Though respondent No.4 was not qualified on the last date of submission of application, he was permitted to attend and appear for the written test. However, on the date of interview he was eligible. The written test was conducted on 1.10.1995 and the viva vice was conducted on 25.11.1995. Similar was stated to be the position vis- \u00e0-vis respondent No.5. When respondent No.4 was selected, appellant challenged his selection to be not in accordance with law. It is to be noted that waiting list is prepared and respondent No.5 was placed in the waiting list. ", "A writ application was filed before at Bangalore challenging the selection of respondent No.4 and placing respondent in the waiting list. Though, learned Single Judge of held that respondent No.4 was ineligible as on the date of employment, he held that in public interest the selection was to be maintained. ", "A reference was made to the decision of this Court in . (1993 Supp (2) SCC 611) (described hereinafter as Ashok Kumar Sharma \u2013 case No.I) where it was held that if the applicant had acquired qualification by the time of interview that is sufficient. ", "A writ appeal was filed before . The view of the learned Single Judge was affirmed by . A review application was filed inter alia taking the stand that the view in case No.I has been later on over-ruled in and Ors. v and Anr. (1997 (4) SCC 18) (described hereinafter as \u2013 case No.II). Therefore, a review of the judgment of was necessary. by the impugned judgment held that though admittedly on 18.7.1995 i.e. on the date of advertisement the respondent No.4 was not qualified to make an application, yet few dates and facts are relevant. He had appeared for the M.B.A. examination in April 1995 and the results were declared on 4.9.1995. The written examination was held on 1.10.1995 and viva voce was conducted on 25.11.1995. At least by the time the written examination and the viva voce tests were held, he had acquired the requisite qualification. Judgment in case No. I was delivered on 18.12.1992 and decision in the review petition in the said case was rendered on 10.3.1997. The appointment of respondent No.4 was made when the earlier decision of case No.I held the field. It was, therefore, held that on the date of selection, the first judgment held the field; and, therefore, by applying logic of that decision the selection of respondent No.4 cannot be questioned. ", "Learned counsel for the appellant submitted that the approach of is erroneous as the law declared by this is presumed to be the law at all times. Normally, the decision of this enunciating a principle of law is applicable to all cases irrespective its stage of pendency because it is assumed that what is enunciated by the Supreme is, in fact, the law from inception. The doctrine of prospective over-ruling which is a feature of American jurisprudence is an exception to the normal principle of law, was imported and applied for the first time in . (AIR 1967 SC 1643). . (1993 (4) SCC 727) the view was adopted. Prospective over-ruling is a part of the principles of constitutional canon of interpretation and can be resorted to by this while superseding law declared by it earlier. It is a device innovated to avoid reopening of settled issues, to prevent multiplicity of proceedings, and to avoid uncertainty and avoidable litigation. In other words, actions taken contrary to the law declared prior to the date of declaration are validated in larger public interest. The law as declared applies to future cases. ( . , ). It is for this to indicate as to whether the decision in question will operate prospectively. In other words, there shall be no prospective over-ruling, unless it is so indicated in the particular decision. It is not open to be held that the decision in a particular case will be prospective in its application by application of the doctrine of prospective over-ruling. The doctrine of binding precedent helps in promoting certainty and consistency in judicial decisions and enables an organic development of the law besides providing assurance to the individual as to the consequences of transactions forming part of the daily affairs. That being the position, was in error by holding that the judgment which operated on the date of selection was operative and not the review judgment in case No.II. All the more so when the subsequent judgment is by way of Review of the first judgment in which case there are no judgments at all and the subsequent judgment rendered on review petitions is the one and only judgment rendered, effectively and for all purposes, the earlier decision having been erased by countenancing the review applications. The impugned judgments of are, therefore, set aside. ", "That brings us to the ticklish question as to how the reliefs can be moulded. It is not in dispute that subsequently the appellant has also been appointed on 9.11.2002. Though it was permissible for this case to set aside the appointments of respondent no.4 and respondent no.5, on the peculiar facts of this case, we consider it to be not called for and the rights of parties instead could be adjusted by working out equities, in the interests of substantial justice by adopting a different course. The appellant shall rank senior to respondent No.4 by treating his appointment to be with effect from the date of selection of respondent No.4. This shall be only for the purpose of fixing the seniority and continuity of service only not for entitlement to any salary or other financial benefits. As respondent No.5 was only in the waiting list, and it is stated that he has been subsequently appointed, he will also rank below the appellant and respondent No.4. The appeals are accordingly allowed. There shall be no order as to costs."], "relevant_candidates": ["0000199143", "0000897981", "0000980500", "0001246653", "0021266288"]}